Month: April 2021

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Losing is Winning w/ Jeep Kline, General Partner at Translational Partners and Venture Partner at MrPink VC

“I was a swimmer since I was very young and, you know, I never won. I never won.”

You’re probably assuming this is how the opening scene of a movie about a future world-champion swimmer begins. The beginning of the world’s most amazing underdog story. And you’re wrong. Well, not completely wrong. This isn’t a story about the world’s next biggest Olympic swimmer. Although it might be well-timed with the Tokyo Olympics around the corner. This… is a story, in my humble opinion, of one of the world’s next biggest venture capitalists. A story of a young Bangkok girl who became a VC from learning how to lose.

I’ve never been the smartest kid on the block. At least in the IQ department. So I make it my mission to hang out with folks who are smarter and more driven than I am. Jeep is no exception. I met her last month. And as if going from a World Bank economist to Intel leadership to startup advisor and investor to lecturing at UC Berkeley’s Haas School of Business was not enough, in our first conversation, she shared an incredible set of contrarian insights. So earlier this month, I had to jump into another conversation with her.

Something about going long

If you’re a long-time fan of this blog, you know one of my favorite Bezos-isms is, “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”

Jeep is that same kind of superhuman.

“I started as a competitive swimmer since I was seven, and I swam so much and so hard, like three kilometers a day. It’s just a lot of practicing. I never even won a medal. And I kept doing it. And that was hard.

“Because other kids they got medals in different styles. So I learned early on in life what losing actually meant. And I think that’s very important because a lot of smart kids, they never learn how to fail early on in their life. And it’s kind of like a winner’s curse because you know, when they’re the best at everything, since they were young, throughout college , once they come out, and they realize that the world is hard, they are doing things or want to pursue a career that their parents cannot help them, they become risk averse. Meaning they don’t want to try new things.

“So I never won in [any] swimming competitions. Until I got into college. When I got into college, at the time I already quit swimming. I quit in high school. So, I didn’t swim competitively anymore since I didn’t have time to practice. I picked up other activities like piano, which I came to love. In college, one of my friends asked me, ‘Hey Jeep, why don’t you come back to the competition?’ And she knew I never won. We were in the same race at so many events. And I said, ‘I don’t know. Let me try.’ So I tried again.

“So I got back to the practice routine. Adjust my strokes a little bit. And then I won. I got gold and silver medals for a college swimming competition. And I was like, ‘This is a joke. How could I win?’

I never won ever, like for ten some years. And I joke with my friend, ‘You know why, because everybody else quit!’ They quit about the same age in high school.

I just went for it. And that was one of the moments in life that I realized that it’s all about grit. You do what you love and you don’t quit. There will be a moment that you win.”

The analogy extends further

“Failure is the mother of success.” It’s an ancient Chinese proverb that my mom used to tell me again and again growing up. Every time I “failed.” Scored low on a test. Embarrassed myself on stage for a school musical. Placed fourth, right off the podium for multiple competitions. It’s funny thinking about it in retrospect since she turned out to be the exact antithesis of a stereotypical Asian parent. And I love it!

Take tbh, an app where you send your friends anonymous compliments, as an example. It launched back in late 2017. 73 days after its launch, it went from zero to 2.5 million daily active users, which subsequently led to a $100M acquisition by Facebook. To many, tbh looked like an overnight success. But it wasn’t. Nikita Bier, co-founder of tbh, and his team spent seven years with 15 failed products before they arrived at tbh. And with each iteration, they learned and compounded their lessons from their previous failure.

Clubhouse’s Paul Davison and Rohan Seth is another example of a seemingly overnight success. From Talkshow to Highlight (acq. Pinterest), the pair went through at least nine failed apps before they arrive at Clubhouse – last reported to have passed 10 million users. And valued at $4 billion. Their lead investor, Andrew Chen at a16z, spent eight years getting to know Paul.

One of my junior swim teammates told me years ago when I was at my prime, “David, I don’t think I can beat you as you are now. But I promise you I will beat you one day, even if that means after you retire.” At the time, I dismissed it as just another snarky comment, which athletes are prone to make from time to time. But now that I’m a bit wiser than I was in high school, I find that same comment incredibly prescient. It just so happened that a few years ago, we raced each other again. Both of us had long exited the competitive arena, and he won.

In closing

Near the end of our conversation, Jeep cited something Soichiro Honda, the namesake for the Honda Motor Company, once said. “Success can be achieved only through repeated failure and introspection. In fact, success represents 1% of your work which results only from the 99% that is called failure. Many people dream of success. To me success can be achieved only through repeated failure and introspection. In fact, success represents 1% of your work which results only from the 99% that is called failure.”

She further elaborated, “For people who grew up in a society, in a culture that does not easily accept failure, I want them to know that it’s actually not a bad thing to try and hear rejection. But along the way, they have to make sure that they learn.

“It’s the same thing when I teach UC-Berkeley students. I told my brilliant graduate MBA students that there is, for me – and it’s true – there is no stupid question. If other people think your question is stupid, but at least you learn. If you learn, there’s no stupid question. Do not ask good questions, if it means you don’t learn anything.”

In a way, I’m reminded of a peculiar quote by Karl Popper, “Good tests kill flawed theories; we remain alive to guess again.” While Popper was known to be quite the contrarian thinker of his day, the same seems to hold for questions. Good questions kill flawed theories. We remain alive to learn again. After all, speaking from personal experience, I often find myself burning the midnight oil to ask the perfect question. But in the pursuit of asking the “perfect question”, I’ve forgone the adventures I would have had to arrive at the answer I thought I sought.

We learn when we fail. We learn, to one day succeed. The greatest are the greatest because they have a higher propensity to fail than the average person. As the great Winston Churchill said, “Success consists of going from failure to failure without loss of enthusiasm.”

And as Jeep said, “Winning is actually losing, but learning along the way.”

Thanks Jeep for helping with earlier draft edits!

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#unfiltered #49 Doing Boring Things

I recently tuned back into Elizabeth Gilbert‘s, author of Eat Pray Love, 2016 interview with On Being. It also happens to be one of my favorite interviews about creativity and curiosity. I found myself pausing, rewinding, playing, pausing, rewinding, then playing again one line again and again.

“Everything that is interesting is 90 percent boring.”

She further elaborates, “And I think one of the reasons that both my sister and I ended up being authors is because we were taught how to do boring things for a long time. And I think that’s really important, because here is one of the grand misconceptions about creativity, and when people dream of quitting their boring job so that they can have a creative life, one of the risks of great disappointment is the realization that, ‘Oh, this is also a boring job a lot of the time.’ It’s certainly tedious. It’s a boring job I would rather do than any other boring job. It’s the most interesting boring job I’ve ever had. […]

“And we are in a culture that’s addicted to the good part, the exciting part, the fun part, the reward. But every single thing that I think is fascinating is mostly boring.”

She takes it from a perspective that everything has its boring parts. So you have to learn to accept what’s boring along with what’s interesting. I think she’s absolutely right. But while I was tuning in again to that same interview – those exact same lines – for who knows, the 20th time, I thought… maybe there’s something more. Forgive my brain for having the tendency to jump into numbers and equations. That for some reason, one of the primary ways I understand life has to be through some quantitative lens. I thought, what if we take it from an expected value perspective.

Expected value = 10% * (Utility of interesting) + 90% * (Utility of boring)

The utility we gain from boring, often times, is of course, well… boring. Some utility value less than zero. Or in other words, more often than not, we lose utility. On the other hand, the utility we gain from interesting is positive. So, then it becomes a balancing act between what’s interesting and what’s boring. That in the decision to pursue something interesting, there might be the below subconscious calculus:

10% * (Utility of interesting) > 90% * (Utility of boring)

To shine a different light, is the interesting part interesting enough that it outweighs all of the boring parts combined, and ideally, more?

Take, for instance, writing for me. I love writing. It’s meditative. Thought-provoking. And it’s challenging. But at the same time, editing, filling in the keywords for SEO, finding a cover image, all the way to writing when I don’t feel inspired, but I do so to commit to a weekly routine is tedious.

Similarly, Gilbert uses the example of raising children. “Raising children — I’m not a mother, but I’m a stepmother, I’m a grandmother, I’m a godmother, I’m an aunt, and I know that 90 percent of — especially, being with very small children…

“Incredibly — it’s hard. And then there’s the moment where you realize, ‘Oh, my God, this is a spark of creation that I’m working with, and this is magic, and this is life seen through new eyes.’ And creativity is the same, where 90 percent of the work is quite tedious. And if you can stick through those parts — not rush through the experiences of life that have the most possibility of transforming you, but to stay with it until the moment of transformation comes and then through that, to the other side — then, very interesting things will start to happen within very boring frameworks.”

For many of this blog’s readers, it’s starting a business. Whether you’re changing the world or the people you care the most about, that mission is what drives you. That’s what makes it interesting. And every time you hit a milestone –

  • Your first user outside of your friends and family,
  • Rated #1 on Product Hunt,
  • One of your customers writes a handwritten love letter to you and your team about how you saved her family,
  • You finally have enough revenue to pay your team members who’ve been working with you for free for two years,
  • $1M in ARR,
  • 50,000 users,
  • You reach profitability,
  • Your dream investor says yes,
  • A Fortune 500 business offers you 9 figures for your business,
  • And the list goes on and on.

… it’s exciting! But let’s be honest, not every day will be sunshine and rainbows. 90% of your days will be tedious. Some percent of those days or weeks might even suck! 90% of your days will be you working to find and reach that 10%. And if that 10% is just that amazing, it’ll make that 90% worth it.

In a sense, it’s like the Pareto Principle. 80% of your utility will come from 20% of your achievements. That star 20% – your customer love letters, providing employment for all your team members during the tough days of COVID.

In an analogous mental model, in everything that is boring, there might be a small percentage that makes it interesting. Now I’m really curious as to what I might discover here.

Photo by Sophie Dale on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

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#unfiltered #48 Am I Valuable in this Ecosystem?

In the past month, I’ve doubted myself and my abilities more than I have in the past two years combined. Half from putting myself intentionally in tough conversations, half from pursuing new opportunities to see them turn belly up. The latter is merely a fact in life. But coupled with the former, I can’t say I was always the happiest camper. So, when in one of the former’s conversations, someone asked me: “Are you worth anything in the startup world?”… I hesitated for more than a day, before I had the courage to give myself an answer. While it was a rhetorical question then, it is a question I need a companion answer to now.

  1. Nothing. Without entrepreneurs, I am useless in this ecosystem. On the flip side, if there are entrepreneurs that I can help find product-market fit and grow, I’m a percentage-based function of their growth. Let’s say as an investor, I own 10% of a company. If the company’s worth $0, then I am too. If it’s not zero, then I’m worth whatever 10% of the whole is worth. Is that a representation of my true market value? No. It’s merely an assumption that for, say, $250K for 10%, I am worth, in the long run, at least 10x of $250K to help founders move faster on their journey.
  2. Something. How much? I don’t know. My job is to help pair founders with the knowledge, skills, and relationships that will transcend the outcome of the venture itself. They say entrepreneurship is never a zero sum game. Even if your idea doesn’t find its product-market fit, the time you spend hustling is cross-applicable to any other industry. Can founders find the knowledge, skills, and relationships without me? Most likely. There are so many resources online via YouTube, Medium, Substack, Quora, just to name a few, that it’d be silly of me to think I’m essential. What I can do is expedite the journey towards their goals. Hopefully even alleviate some stress. And even when I do so, I’m only truly useful in one chapter of their journey rather than the whole novel. But if my worth is just to reduce the friction it takes to get us one step closer to live in the world we want to live in tomorrow, then so be it.

I’m reminded of what Ashmeet Sidana of Engineering Capital said recently. “A company’s success makes a VC’s reputation; a VC’s success does not make a company’s reputation. In other words to take a concrete example, Google is a great company. Google is not a great company because Sequoia invested in them. Sequoia is a great venture firm because they invested in Google.”

Photo by Sunrise Photos on Unsplash

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#unfiltered #47 Two Ears, One Mouth

I’ve been this self-proclaimed “few screws loose” for a while. Rationally, what I do, it doesn’t always make sense. But in their post-mortems, my adventures often turn out to be invaluable lessons of growth. The month of March was no exception.

It all started with someone who reached out to tell me I didn’t know what I was talking about. And subsequently, that I should stop writing. It certainly wasn’t the first, but definitely the most direct one to date. I saw where he was coming from. I’d never personally taken an idea from inception to scale, much less exit. On the venture side, I’m a scout, and well that means, I don’t personally invest in many deals, if at all.

At the same time, it’s not like I didn’t expect such a comment. As a content creator, even an amateur one, I’m putting myself out there. And in doing so, I’m opening myself up to criticism. This, well, just the first of many more to come. In fact, I’ve alluded to it before. As Jeff Bezos once said, “If you can’t tolerate critics, don’t do anything new or interesting.” Now before I make myself seem smarter than I actually am by appealing to authority, I’m not. Simply, I believe their few words profoundly summarize what might take me an essay to convey.

In writing weekly content, and subsequently, doing my homework to write the best I can on any given topic, I give off the illusion that I’m smarter than I actually am. And every once in a while, I fall victim to using esoteric phrases. Like I could say the same statement above as: I give off the illusion that I have a larger repository of information than I have. But I do so because sometimes I really, really like the phrasing I come up with or come across. It’s more of a personal fulfillment than a misleading façade.

Like I’ve mentioned before… I write to think. An unrefined concept that through the process of writing, I come to a more robust understanding. But let’s be honest, it’s not all up and to the right. It’s a rollercoaster. I love how Packy McCormick, who authors Not Boring, described his own writing process.

After all, mine doesn’t fall too far from the apple tree. But I digress. That one message led me down a path to jump on phone calls with other folks who found my content or myself to be disagreeable. Some more perverse and antagonistic than others. Five people total. Four who had just fallen on a series of unfortunate events. Two of which just wanted to be heard. The other two seeking advice and feedback. And last who seemed to find power through berating me for 20 straight minutes. One other who has yet to respond.

Why? I’ve known for a while that I’m terrible at having tough conversations. Some of my friends might know from personal experience. A number of other founders who’ve been on the receiving end of my inability to say “No”. Especially when I first began in venture.

I thought that maybe – just maybe – if I go to the more extreme end of the spectrum, I might get better at giving others the respect and time they deserve. While I’m not sure if the five conversations have helped me mature, they made me a better listener.

When two broke down during our short call, what they needed wasn’t advice or feedback or someone to tell them everything was going to be alright. They just wanted someone to listen. Just listen. Given my personality, I was constantly tempted to respond. To give advice. And to ease the “awkward silence.” But it wasn’t awkward at all. My inability to recognize the sanctity of silence made it awkward.

For the two other founders, they sought feedback since no investor they chatted with so far gave them any constructive ones. I couldn’t promise connections nor capital. All I could promise was my own radical candor. And they were free to do with it as they saw fit. So I spent 10-15 minutes with each, listening to their pitch. No questions in between. My thoughts only chronicled on a 5×8 notepad in front of me. And only after they’d concluded, I would share my thoughts.

The last one, frankly, there was nothing I could do or say that would have changed his mind. And rather than trying to, which would only reinforce his belief, the best I could do was stay silent and occasionally smile.

I’m reminded once again of a line someone I deeply respect once told me, “The quality of communication is measured by not how much comes out of your mouth, but by how much reaches the other person’s ear.” And another, “We have two ears and one mouth; we should use them in that proportion.”

And I am still working on it. I have a long road ahead, but I’m positive if I keep the above lessons in mind, I’ll go further faster.

Photo by Jonathan Sanchez on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

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How to Build Your Investor Pipeline Without a Network

One of the most common questions I get from first-time founders, as well as those outside the Bay Area, is: “Who is/How do I find the best investor for our startup?” Often underscored by circumstances of:

  • Raising their first round of funding
  • Finding the best angel investors
  • Doesn’t have a network in the Bay Area or with investors

While I try to be as helpful as I can in providing names and introductions, more often than not, I don’t know. I usually don’t know who’s the best final denominator, but I do know where and how to start. In other words, how to build a network, when you don’t think you have one. I emphasize “think” because the world is so connected these days. And you’re at most a 2nd or 3rd degree connection from anyone you might wanna meet. Plus, so many early-stage investors spend time on brand-building via Medium, Quora, Twitter, Substack, podcasting, blogging, and maybe even YouTube. It’s not hard to do a quick Google search to find them.

“Googling” efficiency

While I do recommend starting your research independently first, if you really are stumped, DM me on my socials or drop me a line via this blog. Of course, this is not a blog post to tell you to just “Google it”. After all, that would be me being insensitive. Here’s how I’d start.

One of the greatest tools I picked up from my high school debate days was learning to use Google search operators. Like:

  • “[word]” – Quotes around a word or words enforces that keyword, meaning it has to exist in the search items
  • site: – Limits your search query to results with this domain
  • intitle: – Webpages with that keyword in its title
  • inurl: – URLs containing that keyword

Say you’re looking for investors. I would start with a search query of:

site: docs.google.com/spreadsheets intitle: investors

Or:

site: airtable.com inurl: investors

Feel free to refine the above searches to “angel investors” or “pre-seed funds”.

Landing and expanding your investor/advisor network

I was chatting with a friend, first-time founder, recently who’s gearing up for her fundraising frenzy leading up to Demo Day. She asked me, “Who should I be talking to?” While I could only name a few names since I wasn’t super familiar with the fashion industry, I thought my “subject-matter expert network expansion” system would be more useful. SMENE. Yes, I made that name up on the spot. If you have a better nomination, please do let me know. But I digress.

First, while you might not think you have the network you want, leverage who you know to get a beachhead into the SMEN (SME network) you want. Yes I also made up that acronym just now. But don’t just ask anyone, ask your friends who are founders, relative experts/enthusiasts, and investors. Ideally with experience/knowledge in the same/similar vertical or business model.

Second, if you feel like you don’t have those, just reach out to people who are founders, relative experts/enthusiasts, and investors. Via Twitter, Quora, LinkedIn, Clubhouse. Or maybe something more esoteric. I know Li Jin and Justin Kan are on TikTok and Garry Tan and Allie Miller are on Instagram. You’d be surprised at how far a cold email/message go. If it helps, here’s my template for doing so.

Then you ask them three questions:

  1. Who is/would your dream investor be? And two names at most.
    • Or similarly, who is the first (or top 2) people they think of when I say [insert your industry/business model]?
  2. Who, of their existing investors, if they were to build a new business tomorrow in a similar sector, is the one person who would be a “no brainer” to bring back on their cap table?
  3. Who did they pitch to that turned them down for investment, but still was very helpful?

For each of the above questions, why two names at most? Two names because any more means people are scraping their minds for “leftovers”. And there’s a huge discrepancy between the A-players in their mind and the B-players. Then you reach out/get intro’ed to those people they suggested. Ask them the exact same question at the end of the conversation (whether they invest or not). And you do it over and over again, until you find the investor with the right fit.

Photo by Andrew Ly on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

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Startup Growth Metrics that will Hocus Pocus an Investor Term Sheet

Founders often ask me what’s the best way to cold email an investor. *in my best TV announcer voice* Do you want to know the one trick to get replies for your cold email startup pitches that investors don’t want you to know? Ok, I lied. No investor ever said they don’t want founders to know this, but how else am I going to get a clickbait-y question? Time and time again, I recommend them to start with the one (at most two) metrics they are slaying with. Even better if that’s in the subject line. Like “Consumer social startup with 50% MoM Growth”. Or “Bottom-up SaaS startup with 125% NDR”. Before you even intro what your startup does, start with the metric that’ll light up an investor’s eyes.

Why? It’s a sales game. The goal of a cold email is to get that first meeting. Investors get hundreds of emails a week. And if you imagine their inbox is the shelf at the airport bookstore, your goal is to be that book on display. Travelers only spend minutes in the store before they have to go to their departure gate. Similarly, investors scroll through their inbox looking for that book with the cover art that fascinates them. The more well-known the investor, the less time they will spend skimming. And if you ask any investor what’s the number one thing they look for in an investment, 9 out of 10 VCs will say traction, traction, traction. So if you have it, make it easy for them to find.

That said, in terms of traction, most likely around the A, what growth metrics would be the attention grabber in that subject line?

Strictly annual growth

A while back, my friend, Christen of TikTok fame, sent me this tweetstorm by Sam Parr, founder of one of my favorite newsletters out there, The Hustle. In it, he shares five lessons on how to be a great angel investor from Andrew Chen, one of the greatest thought leaders on growth. Two lessons in particular stand out:

And…

Why 3x? If you’re growing fast in the beginning, you’re more likely to continue growing later on. Making you very attractive to investors’ eyes – be it angels, VCs, growth and onwards. Neeraj Agrawal of Battery Ventures calls it the T2D3 rule. Admittedly, it’s not R2-D2’s cousin. Rather, once your get to $2M ARR (annual recurring revenue), if you triple your revenue each year 2 years in a row, then double every year the next 3 years, you’ll get to $100M ARR and an IPO. More specifically, you go from 2 to 6, then 18, 36, 72, and finally $144M ARR. More or less that puts you in the billion dollar valuation, aka unicorn status. And if you so choose, an IPO is in your toolkit.

image001
Source: Neeraj Agrawal’s analysis on public SaaS companies that follow the T2D3 path

For context, tripling annually is about a 10% MoM (month-over-month) growth rate. And depending on your business, it doesn’t have to be revenue. It could be users if you’re a social app. Or GMV if you’re a marketplace for goods. As you hit scale, the SaaS Rule of 40 is a nice rule of thumb to go by. An approach often used by growth investors and private equity, where, ideally, your annual growth rate plus your profit margin is equal to or greater than 40%. And at the minimum, your growth rate is over 30%.

For viral growth, many consumer and marketplace startups have defaulted to influencer marketing, on top of Google/FB ads. And if that’s what you’re doing as well, Facebook’s Brand Collabs Manager might help you get started, which I found via my buddy Nate’s weekly marketing newsletter. Free, and helps you identify which influencers you should be working with.

But what if you haven’t gotten to $2M ARR? Or you’ve just gotten there, what other metrics should you prepare in your data room?

Continue reading “Startup Growth Metrics that will Hocus Pocus an Investor Term Sheet”
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The Fastest Way to Test a Startup Idea

Last week, I reconnected with Shuo, founding partner of IOVC, and one of the first people I reached out to when I began my career in venture. That day, I asked her a pretty stupid question, “Given the rise of solo capitalists, rolling funds, equity crowdfunding, and the democratization of capital, do you think now’s a good time to raise a fund?“

She replied, “I don’t know. It could be a good time now. It could be a good time five years from now. If you’re set on sticking around for the long term, it really doesn’t matter. ‘Cause whether it’s a good time or not, you’re going to be raising a fund regardless. So just do it.”

Not gonna lie, it was serious wake-up call. While I was initially looking for her perspective on the changing venture market, what she said was right. If you’re set on doing something, say starting a fund or a business, the “right time” to start is irrelevant. The world around us changes so much so frequently. We only know when’s the right time in hindsight. So focus on what we can control. Which is starting and doing.

So as an aspiring founder, which idea do you start with? And how do you test it?

Starting a business is scary

Starting a business is scary for most people. And well, the government doesn’t always make it easy to do so. Just like what WordPress and Squarespace did for websites, you have companies, like Stripe (and their Stripe Atlas), Square, Shopify, Kickstarter, just to name a few, streamlining the whole process for entrepreneurship. For an aspiring entrepreneur, not only is it taking that leap of faith, before you begin, there’s a slew of things you have to worry about:

  • Figure out how to incorporate your business (C-corp, LLC, or S-corp),
  • Assign directors and officers to your business,
  • Buy the stock, so you actually own your stock,
  • Learn to file your taxes (multiple forms, including your 83(b) election),
  • When you raise funding, get a 409A valuation,
  • And that’s just the beginning.

Of course for the above, do consult with your professional lawyer and accountant. It’s two of the few startup expenses I really recommend not skimping on. While the purpose of this post isn’t designed to solve all the documents you’ll have to go through in starting a business, hopefully, this will help with one front – taking that leap of faith. Specifically finding early validation for your idea.

The superpower of writing

I stumbled on Max Nussenbaum‘s, who’s leading On Deck‘s Writing Fellowship, provocative tweetstorm:

He boils it down to, effectively, four reasons:

  1. You can test the validity of an idea faster by writing than with code.
  2. Writing well trains your ability to sell.
  3. Publishing regularly gets you comfortable with shipping early and often.
    • To which he cited one of my favorite Reid-isms: “If you’re not embarrassed by the first version of your product, you’ve launched too late.” – Reid Hoffman
  4. Writing is easier for most people to pick up than coding.

There’s a “5th reason” as well, but I’ll let you uncover that yourself. Talk about creativity. Side note. Max created one of my favorite personal websites to date.

Much like Max, I write to think. And in sharing my raw thoughts outside of the world of startups via the #unfiltered series, often far from perfect, as well as my take in this fast-changing universe, my cadence of writing twice a week has forced my brain to be accustomed to the velocity of growth. In the sense, I better be learning and fact-checking my growth week over week. Over time, I’ve developed my own mental model of finding idea and content catalysts.

Of course, if you know me, I just had to reach out. Particularly around the third point in his tweetstorm.

What mental models or practices did he use to help him wrestle with his embarrassment from his own writing? And he replied with two loci that provided so much more context:

  1. “Reading other writers who open up way more than I do, which makes what I’m doing feel easy by comparison. Two favorites I’d recommend are Haley Nahman and Ava from Bookbear Express.”
    • And another I binged for an hour last night. Talk about counterintuitive lessons. My favorites so far are Stephen’s 12th and 16th issue. You might not agree with everything, but he really does challenge your thinking. Thank you Max for the rec.
  2. “Publicly committing to writing weekly and finding that the embarrassment of publishing was outweighed by the embarrassment I’d feel if I missed a week. Also, like all things, I’ve found it very much gets easier with practice.”

Why not both?

Then again, why not both? I go back to Guillaume‘s, founder of lemlist, recent LinkedIn post. He says:

And he’s completely right. If I were to analogize…

Writer = common
Writer + coder = uncommon
And… writer + coder + X = holy grail

You don’t have to own one unique skill. And in this day in age, there aren’t that many individually unique skills out there that haven’t been ‘discovered’ yet. Rather than search for the singularly unique skill that you can acquire, I’d place a larger bet on a combination of skill sets that can make you unique. As a founder, test your ideas early with writing. If there’s evidence of it sticking, build it with code. And it doesn’t just to be just writing and code, whatever set of skills you can acquire more quickly and deeper with the circumstances and experiences you have. Even better if there’s a positive flywheel effect between your skills.

In closing

There’s a Chinese proverb that goes something along the lines of, “The best time to plant a tree was 20 years ago. The second best time is now.” And it circles back to Reid’s quote that Max cited, “If you’re not embarrassed by the first version of your product, you’ve launched too late.” As an entrepreneur, or as an emerging fund manager, it’s a given you’re going to mess things up. But all the time fretting around at the starting line is time better spent stumbling and standing back up.

I followed up with Shuo after our call, and she elaborated a bit more, “In all honesty, you can argue now is a good time (a lot of capital available for good managers) or a bad time (valuations are frothy), but in the long-term, these variables even out and it’s how you add value as an investor that’s most important.”

If I were to liken that same insight to aspiring entrepreneurs… Yes, investors look for timing. And yes, understanding the timing of the market is important, when you’re launching a product that will revolutionize the way we live in a fundamental way. But that boils down to which idea you plan to pursue. But if you’re looking to be a founder, it’s finding that overlap in the 3-way Venn diagram between (1) what the market needs and (2) where you, as the founder, can provide the most value. And (3) where your competitors are not maximizing their potential in.

For many aspiring founders, that first step can be practicing the art of writing. Writing for clarity. Writing to practice selling. Learning to ship early and embracing imperfection. Frankly, it’s also something I need to get better at myself.

Though I’m not a religious fellow, I’m reminded of a quote from Jesus’ teaching, which I first found in Jerry Colonna’s book, Reboot. “If you bring forth what is in you, what is in you will save you. If you do not bring forth what is in you, what is in you will destroy you.” Writing is that act of bringing forth what is in you. And well, if you’re like me, I often find my greatest regrets come from a lack of action rather than in taking action.

If you’re looking for a place to start…

Top photo by Cathryn Lavery on Unsplash

Thank you Shuo and Max for reviewing early drafts of this essay.

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