Tag: Startups

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Internet Culture Startups

Day 282 and Stop & Go

I wasn’t born until after stagflation so I can’t tell you what America or Britain felt like in the 70’s but the chattering classes seem to enjoy bringing up the comparison. But there does seem to be a bit of “stop & go” energy in the air. Everyone is raring to go but the energy cannot quite flow freely as we smack into obstacle after obstacle. Demand is pent up but the reality of supply is uglier.

Obviously this perspective of excitement and demand is colored by working in startups where the bias is always towards the excitement of building new things. Crypto is burning with the fire of millions of zealots, all of whom are confident we are building the infrastructure for a better future. Everyone feels like it’s worth investing and higher prices are a good sign. There is more go than stop here.

Of course, I am one of those zealots. I’ve got the optimism of someone who saw how fast previous waves of web1 and web2 changed my entire world. Wealth and creativity was unleashed twice over for the elder millennials who were lucky enough to witness the dot com boom as children and the social media era as their first jobs.

There were massive crashes and financial implosions too. Stop more than go. More of us got hurt than got wealthy. But we saw the possibility even as failure engulfed most of us. So we believe we might be the lucky ones this time. That we might be the ones to win the game. “Red light, green light” seems fun if you can make up ground when everyone is running. Just don’t get hurt too bad.

I feel this energy in my own body. I am excited to push into everything. My portfolio companies are all riding high. There is no way I can do it all in any given day. So when the go energy pushes me sometimes I find myself leaning into stop and simply taking a nap in the middle of the day. It makes me a little jittery to feel the push-me-pull-me of demand grind up against the limited supply of energy and focus. I’d like to feel fully unleashed but I know somehow there are moments where it’s best to stop before I go.

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Finance Startups

Day 275 and Manifesting

I had a really terrific September. Everything just started going my way. Projects that I’d been pushing on had significant breakthroughs. My deals got hot. My focus and health improved. Even when I had setbacks and failures I was able to execute on quick recoveries. But mostly I didn’t give in to past bad habits. And all of that happened without any additional effort on my part.

I’ve been making a really conscious effort to stop pushing myself to always be doing more. Either I am able to find elegant solutions or I ask myself to take a step back till I can. Rather than brute forcing everything I am finding ways get where I am going without sacrificing myself to costly bad trades on my time and energy.

I asked for something really significant from one of my investments (an additional allocation for an special purpose vehicle). The second I asked for it I started to panic. I didn’t have an immediate or simple path to deliver on what I asked for from this founder. Even though I was confident I had the money for the deal it out I panicked that maybe I had bitten off more than I could chew. Immediately it started going through my head about how bad I’d feel if failed this founder. I relived the guilt, shame and punishment I had felt in previous failures to deliver for people that trusted me. I hated feeling like I’d failed people.

And I just decided stopped the cycle of worry then. Like turning off a switch. I told myself I could do it, I knew I could do it or I wouldn’t have asked, and that there was simply no way I was going to let down this founder. But this is where I felt the frown Instead of going into overdrive, I stuck by my schedule. I didn’t change anything. I didn’t push myself to a frenzy by adding in calls, pitches & emails. I just put down all the steps I could and would take to make the deal available to the right people and I began.

In the past I would have let that fear drive me. I would have gone into overwork and adding in additional tactics that I didn’t even need to insure I would reach my goal. But here I trusted myself to get the outcome. I didn’t exhaust myself. I took care of myself. And the allocation got filled quickly. I checked the commitments this morning and I’ve only got 15% of the deal left.

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Finance Startups

Day 270 and The Circle of Capital

Capital has evolved a lot in my life. The dynamics have changed so much in the 30 years I’ve been ambiently around venture it’s barely the same business. And yes I mean since I was a kid. The apocryphal family history is that I was born on the poor side of Silicon Valley while my unemployed father was working on pitch deck for education software. Yeah it’s a shitty origin story but it’s mine.

Back then you sold your entire life to some dudes for half a million bucks and gave up a lot of control. It wasn’t really collaborative but it was worth it to create the future. Back then your VCs controlled a lot more than they do now for capital they deployed. Flexibility and collaboration wasn’t really considered necessary. Your VCs actually controlled when you got fired (another childhood memory was a “take your daughter to work day” where a CEO got fired), when you could raise again, if and when you could sell your company, and honestly I wouldn’t be shocked if they had some Rumplestiltskin provisions too. That’s just where the market was at the time.

As it has become clear that non-linear returns come from creative founders and new markets, the structures of capital deployment have changed a lot. Capital cares about helping operators create because creation simply has more value than it did in the past. Venture capital isn’t old dudes optimizing for control and margin anymore (even if sometimes that might be a good idea) because that’s just not what makes money anymore.

Heck it has changed a lot in just half a decade. The last time I raised venture for my own startup, we actually priced the round (no uncapped SAFEs), we had a board from day one, and we were allowed to overshoot our valuation and capital goals by a whopping 300K. I was sure we’d reached the height of founder leverage at the time. Heck I felt certain we’d raised a small fortune on favorable & flexible terms. Six years later that would be considered a charmingly small pre-seed round with very onerous terms. Time marches on! And rightly so. Markets adapt to the needs of the participants and the returns they deliver. If it wasn’t profitable it wouldn’t be so.

This is all a long winded way of saying that I am continuing the circle of life. I’ve got my own venture fund Chaotic Capital with Alex Miller and Jacob Brody. It doesn’t look anything like the funds of my childhood or even the seed stage funds of the last decade. Probably because we as founders and operators lived through the hard lessons of venture in multiple cycles and took a lot of lessons with us. Capital isn’t about control. It’s about collaboration now. Capital starts early. Capital is flexible to generate returns But we also aren’t n00bs.

Rather than spend a year raising in silence and announcing it once it’s all said and done we are building a rolling fund. That structure works for us and my general affinity for building in public. It signals founders we are building like them (even as our other constituents see it as being responsive to the demands of the market). The rolling fund is a kind of flexibility to build at the speed of the market while also understanding that the give and take of responsible deployment must also work at the pace of founders.

While we work on forming our proper fund, we’ve created an AngelList Syndicate for chaotic where we’ll be creating SPVs for our current deals (we already have our first two which feels crazy to me) as well as follow-on deals once the fund is created. If you’re an accredited investor and interested in joining our deals, head on over. Isn’t it cool how these structures morph and change over time? I guess having a couple decades of being an operator has some benefits. You’ve seen what works and hopefully have some capacity to change what needs to be changed.

Our LPs and co-investors are mostly our friends and former colleagues who have spent years working with us at companies as varied and diverse as Stack Overflow, Trello, Easypost, Triplelift, Goop, PopSugar and over 40 different angel investments. Alex Miller, Jacob Brody and I have invested over 4m over the years which seems sort of astonishing.

While we work on forming our proper fund, we’ve created an AngelList Syndicate for chaotic where we’ll be creating SPVs for our current deals (we already have our first two!) as well as follow-on deals once the fund is created. If you’re an accredited investor and interested in joining our deals, head on over.

Categories
Finance Startups

Day 255 and Bias Towards Fuckround

There is a tendency to believe that startups have a bias against older people. While ageism is alive and well, I’d argue what appears to be a bias against older teams is actually a bias against teams with experience. No one wants to invest in a team who don’t fuck around. We want teams that will find out.

One of the reasons I work with early stage startups is because their trajectory is not yet set. Every conversation has a hint of “fuck around and find out” because your vision is far away. You need to experiment, test, throw spaghetti against the wall. Pick your metaphor. The bias towards action and the bias for momentum exist in investor minds because the alternative is death.

This has the second order effect of selecting against teams with experience. It isn’t ageism. It is a bias against a certain kind of professional that knows too much. It’s not that anyone thinks experience is bad. It’s harder to fund teams with no exposure to the industry they are working in. It means that some types of experience will function as negative signaling. We think you know too much to solve the big problems. We are afraid you aren’t flexible enough to do the work of throwing out all existing assumptions.

While being an expert in a field means you have a better sense of how you will get from point A to B, it also means you have a less flexible mindset. You have seen what hasn’t worked. You have opinions about can or cannot be done. Even worse, you have an idea of how things must be done. Simply put a certain kind of battle tested, “expert in their field” persona isn’t trusted to fuck around enough.

If you are one of these founders, you have to fight against this signaling issue. Show investors your commitment to fucking around and finding out. Telegraph that all your experience and knowledge from your past work could very well be bullshit. Show us you will be committed to testing even more rigorously every hypothesis of how your roadmap will unfold. Then your experience becomes an asset.

We will trust that you have more opportunities to fuck around and find out than a less experienced founder because you plan to test what you think you know. Which is a lot! Show that no truism of your space will be held sacred. While a neophyte team will need to discover all the truths of a space to even begin to test. you will be ahead of them running test after test. Jujitsu that shit. Use the energy of your experience to show that you will bring the maximum amount of flexibility to finding new outcomes. The unbiased but experienced mind has the best chance at achieving momentum.

Categories
Aesthetics Internet Culture Media

Day 251 or NYFW SS08

Today is Star Trek day. The original series debuted 55 years ago. I was searching for a photo of myself as a child wearing a captain’s uniform to commemorate it and instead stumbled upon a file containing my old WordPress blog. So rather than find an adorable picture of me in a red jumpsuit I found this picture from September 10th 2007 waiting for the Marc Jacob’s fashion show.

Several invitations to Marc Jacob’s fashion show for his spring 2008 collection seen from above. A blackberry, an iPhone & a recorder are scattered between wine glasses, a carton of cigarettes and two arms.

I used to be a fashion blogger you see. I have a few dubious CV distinctions, one of which is being the first person to live blog fashion week (at least according to Women’s Wear Daily). In the late aughts just before the Great Recession, it was a hell of a time to work in fashion and I wanted in. Being utterly unqualified I did what any kid would do and started a new media company. It went pretty well, we turned it into an ad tech company, sold it, and survived “RIP good times” but before all of that I partied professionally. A lot of business in fashion used to get done over drinks in fancy hotel lobbies while we all clutched our Blackberries.

This particular photo represents a time when Condé Nast still mattered. I was at the Mercer Hotel with my friend Lauren Goldstein Crowe (also apparently economic writer Felix Solomon). My friend Lauren was the newly installed fashion columnist for the new glossy magazine about money called Portfolio Magazine. We were killing time in the then trendy Soho hotel before the always reliably two hours late Marc Jacob’s show.

I don’t actually remember if I legitimately had an invitation or if I snuck in with Lauren that season. Back in 2007, if you can believe it, social media was considered very uncouth and no one has begun writing “bloggers are taking over the front row” thought pieces yet. Could have gone either way.

Portfolio was the last hurrah of the print behemoths, a glossy magazine dedicated to the culture of finance, so naturally I was appreciative that I could tag along with my much better financed friend. Condé Nast reported spent 100m on the magazine and I appreciate that some small portion of that went to drinks before the fashion of the season. Lauren is an especially erudite editor, of the sort who writes deeply studied long form work, so the fact that Condé Nast was paying to send her to fashion week was pretty decadent. She wasn’t a mid tier market editor who needed to see the clothes. She covers culture so the entire milieu was her domain. The gossip before the shows absolutely counted.

Of course, the business of media couldn’t support that sort of thing forever with changing advertising models and Condé Nast didn’t really keep up with the times. It’s a real loss. People like me ended up winning and it’s been perhaps a net loss for some things that were valuable cultural artifacts.

I spent no more than a couple grand getting our rinky dink operation up and running. We still managed to publish faster than anyone else. I had several meltdowns in service of that effort. In hindsight it was probably a waste but it felt so very new and urgent to be publishing things at the very second a look went down the runway. Now fashion week is an exercise in instant publishing and live-streaming everything from a million perspectives. But the actual studied writers don’t get expense accounts and drivers and corporate Blackberries anymore. If they are lucky maybe they have a blog with a subscription. Lauren knew it even then. She and I slowly occupied the same basic space in the ecosystem. She was just 15 years ahead of seeing it.

Categories
Startups

Day 250 and Getting to Know You

I don’t really like musical theater (it’s the people sorry) but I’ve been humming a tune from The King and I called “Getting to Know You” as I codify my process for meeting founders and startups. It turns out Julie Andrews through Rogers and Hammerstein lyrics may be a viable strategy for finding out if someone is a fit for Chaotic.Capital. The actual play is racist, colonial nonsense but you know take art for art’s sake.

Getting to know you

Getting to feel free and easy

When I am with you

Getting to know what to say

Haven’t you noticed

Suddenly I’m bright and breezy?

Because of all the beautiful and new

Things I’m learning about you

Day by day

She’s talking about being a teacher and getting to know her pupils but it’s also maybe about falling in love, but I like the sentiment that learning “beautiful and new” things “day by day” feels bright, breezy, free and easy. That’s a good template for relationships of all kinds.

Pitching is none of those things. It’s practiced, formal, and exhausting. It may be a necessary evil for founders as you need concise and clear communications about what you are doing and why it requires capital. But I don’t think it’s the best way to get to know people. Getting to know someone should feel easy.

I like to get to know someone over the course of conversations. My preference is through asynchronous communication mediums like chat, direct message or email. There is something about the volleying back and forth of information that helps me more. I like a back and forth that is informed by revealing thought process but also context and background. I’ll chat with virtually anyone and keep my direct messages open on Twitter because I value conversation so much.

I generally don’t feel that phone or video calls are that helpful to me in getting to know someone initially. I don’t mind short 10 minute bursts. What I do dislike is the planned hour long call for an initial conversation. Rarely am I able to be emotionally and physically present for something like that if I am not already interested or invested in story.

But if we’ve had conversations through Twitter, direct message or email where I have more context and connection then it’s possible I can be present for you. But I wouldn’t recommend asking for an hour synchronous medium as your first interaction with me. I’ll do it as a favor to someone now and again but I almost always resent it.

I’d rather get to know you over time before I’m trapped in a room for an hour to put it bluntly. I promise this is for both of our benefit. You wouldn’t take someone on a two week vacation for a second date so why would you hinge your chance to work or get investment from someone by insistence on spending an hour together right off the bat. Let it simmer a bit. Give me an appetite for wanting to help you. Then you won’t be able to get me off the phone or Signal. I will be your most available investor if you take the time to show me who you are.

So go ahead. Message me. Message a bunch. Send an email. If you don’t hear from me message some more. If I’m being evasive tell me straight me. But the end goal should be that getting to know you is free and easy. And you will be able to tell if I’m excited. Don’t give up. Just keep the conversation flowing like Julie Andrew’s did.

Categories
Emotional Work Internet Culture

Day 247 and Rooting for You

I watched a viral video of a young white American kid who claims to have quit a 100K job in order to pitch YouTube star Logan Paul for a job. It’s really hard to watch because this poor young man just utterly shits the bed on asking his favorite social celebrity to take a chance on him. He can’t even tell Logan what he is best at. He doesn’t know himself and thus cannot capitalize on his moment in the sun to show his worth. Honestly it will break your heart.

The shitty sad part of watching this kid utterly fail at self advocacy is if you are in a position of power you genuinely want to help people if they are clear about how you can do so. No one wants to say no. We all want to get to yes.

Being asked “what are you good at?” is an empathy driven open ended “get me to yes” kind of question. Logan Paul, never a celebrity I’d have previously associated with emotionally empathic, actually encourages this young fan. Even in a short clip he encourages him.

It breaks my heart a little that this kid doesn’t have anything to say for himself. Even saying something small like “ I’m the best getting groceries quickly” would have given him a chance.

I think the reason this hits me hard is that everyone has emotionally been that young man. Asked someone to help and just utterly bombed. I know I’ve taken a swing and asked powerful connected intelligent people to help me and then subsequently failed to rise to the moment. I carry those emotional failures with me. I think we all do. It’s what drives us to be better. Those moments of defeat can remake us for success. They course correct us. But only if we don’t let don’t let those failures beat us for good. We have to see the patterns that brought it into our life, accept that it’s our failure, and let it improve us.

That’s why it’s so important when you are in a position of saying no to someone to do it with as much grace as Logan Paul. I know it’s a weird sentence to type. We owe it to ourselves to there to hear them at their lowest moment with the hope may eventually become the path to their better self. Because surely someone once did that for you. That’s wisdom.

It’s hard getting a concise answer to “why you” and finding and accepting the truth of what you are truly better than anyone else is at is a lifetime of work. Being able to do it when you are young is what makes for a life that will give you satisfaction instead of disappointment.

I genuinely believe we want to help others get there. I used to hate when someone who turned down one of my pitches would say they “were rooting for me.” I thought it was dismissive. Now I choose to understand that that most people want to help you succeed.

If someone accepts time to talk to you it’s probably because human to human they would like to get to yes. I now take “we’re rooting for you” as sincere. Maybe it’s not in some cases but why not default to good intent first?

Categories
Startups

Day 243 and Delegation

One of the funniest aspects of hustle culture was its insistence on always being “on!” This maxim fought mightily against that other successful management truism; a successful CEO delegates. But how can you always be working if you have also successfully delegated your workload to a top notch team? Which one is it guys?!?!

I guess the logic was that you should always be working on whatever new horizon you has discovered in your perch as visionary founder but also be continually recruiting the best possible people to take on work as you should never be doing that work yourself. But those two directions are in obvious tension.

I think this tension ended up creating founders who exercise control of their anxiety through constantly searching for new ways to show off they were hard at work. We got addicted to busywork. Or at least the appearance of always being hard at work finding a new problem and then hiring talent to own it.

You’d always be finding new blockers at every turn, justifying it as growth and then you’d balloon your team hiring people for the work that you’d just found. I honestly wouldn’t be shocked if this was the driving force behind the trend of showing off your headcount growth.

“Oh we hired 50 people this quarter!” Sure but like were you actually blitzscaling or were you caught in the hustle/delegate hamster wheel? How many of those people actually materially moved your roadmap forward? I would bet at least some of them were just there to give you the emotional safety of claiming to yourself that you’d satisfied both hustle and delegation culture.

Categories
Finance Startups

238 and DAO Ethics

Are smart contracts freeing us from the tyranny of the legal class just to toss us into the maws of the developer class? Sure we think of lawyers as being inherently worse because they are bourgeois and protected by credentialism and regulatory capture.

But as crypto gets more complex and smart contracts involve more intricate provisioning ,will it become just as exclusionary as the ecosystem of white shoe magic circle legalese? It’s getting to be mighty hard to afford Solidity developers!

Sure we tend to think of developers as friendly self trained indie types. Anyone can learn to code! Let us not lean on heavily on the benefits of decentralization as a panacea for human nature. Power aggregates and money likes influence.

When describing the benefits of how DAOs will outflank traditional corporate governance structures we need to look out for how we avoid the self interest of a protected class of Mandarins forming. We need to think ahead on how to keep smart contracts legible. I don’t have any of the answers here. Governance is just barely coalescing in crypto but it’s never to soon to think ahead.

Categories
Internet Culture Startups

Day 236 and Founders Who Write

A heuristic I’m playing with for assessing founders is how good they are at writing.

And while this approach to vetting a founder is a practical method (everyone writes) it’s obviously limited. But I think it is nevertheless sufficient for reaching an approximation of founder capacity in a swift and asynchronous way. I like to see examples of founder writing whether it is Tweets, blog posts, technical documentation or a Notion document.

It’s my belief that we’ve overweighted salesmanship, pitching & synchronic communication methods (remember reality distortion fields) which has led to prioritizing messianic style founders. A rousing keynote speech used to be the gold standard. But this may be less relevant as teams go fully remote and more work is done asynchronously. Your capacity to document and communicate meaning at scale is crucial as a founder.

The canonical example of a founder who telegraphed competence and meaning through writing was Joel Spolsky. The Joel on Software blog established him as ur technical writer and gave us documentation culture which blossomed in Stack Overflow.

A more recent example for me is Devin Finzer who I discovered through his technical writing. Long before OpenSea was a clear winner in the NFT space, Devin’s writing caught my attention as his crisp clear articulation on the basics non-fungible tokens was legible to everyone.

My guess is this heuristic of focusing on writing instead of showmanship will improve overall diversity of founders & companies in a portfolio as less bias creeps into asynchronous documentation whereas mirroring & social cues easily tilt pitching in favor of certain classes of people

I’m also keen on folks who like messaging culture. Being able to hop in and out of conversations is crucial to team building & scaling. Those that are happy to DM & chat to build rapport in distributed fashion more easily will succeed at building relationships in a remote first world.