“Magic is just spending more time on a trick that anyone would ever expect to be worth it.” — Penn & Teller
Five years ago, back in 2018, I would have never guessed. But I fell in love with the soles of another person’s feet. And I knew this was going to be one of the most tenacious people I’d ever meet.
I was introduced to “Ben” by a dear friend with one line, “No one can outhustle him.” “Ben” grew up with an insatiable appetite to learn, in a village located on the outskirts of Cairo. He would spend many days and nights in conversation with village experts and the village library, until one day he noticed he learned all he could have.
It just so happens that there’s a two-hour bus to Cairo that comes once a week. And that was how he found the libraries in Cairo, where he realized his interest in AI. But due to the bus’ odd schedules, instead of riding it, Ben chose to instead walk ten hours to Cairo every week. He’d then download, read, and print (to bring back to his village) as many Stanford PhD research papers on AI as possible. Sleep overnight at the bus stop. Then the next day, walk ten hours back to his village, where he’d continue with his reading for the week with all the loose leaf papers he had.
Needless to say, he had the feet to show for it.
I shared that story with a friend two days ago at the perennially-packed Superhot. We were chatting about the traits we look for in founders we back and the questions we ask to get there. The latter of which I’ve written about before. And at the early stages, the chief thing we look for is grit. There’s a tweet I stumbled on this week summarizes that rather nicely:
The problem is it’s so hard to see if a founder has the qualities of a “white belt who never quit” in just one meeting, even a few meetings. So, instead of sharing what questions we ask founders — most of which I know are designed to be reveal tells of grit, and are at least to my friend and his team, proprietary to some degree — I’ll share why grit matters, not just as a founder trait, but as a variable in the fundraising process, and a story that I hope will inspire you.
Candy versus the meal
One of the frameworks I love thinking about is the difference between how people think and what people talk about. This is by no means original. I actually stumbled across this when watching Malcolm Gladwell on Masterclass. For instance, when people watched the most recent Avatar movie, they didn’t say “Here’s the plot of the movie.” They talk about their favorite scenes or how great the performance capture was for underwater sequences. Neither is all-encompassing of the movie, but it gets people excited. That’s what word of mouth is.
Malcolm Gladwell calls it the meal and the candy, respectively. The meal is how people think — what people take home. They sit down with it and take time to process. The candy is what people talk about. The parts of the narrative that are easiest to share and remember.
Candy without the meal is clickbait. A meal without the candy means no one will talk about the good work you do. So you need both.
Similarly, in the world of venture, when I, like most other investors get excited about a deal, assuming it’s a good one, don’t talk about the whole pitch deck. Neither do I get super excited about sharing the one-liner unless it’s actually something unique. Like when a bike-sharing company pitched their one-liner as “We make walking fun.”
What I talk about is what’s cool and what stands out. That’s the investor’s word of mouth. And that’s how you fill a round. Or get people excited to help you find investors who will. Things I shared before include:
- “That startup that hit 130% net retention.”
- “Customers literally write love letters to the founders.”
- “That founder cold emailed a Disney exec for 300 days straight to inevitably close their first enterprise deal.”
- “This founder started a podcast as a growth engine to 1/ secure his first 10 customers, 2/ bring on one of the best advisory board I’ve seen to date.”
As you might notice, it’s almost impossible to guess what each company does above with just what I shared. And it sure as hell doesn’t get investors to conviction with just that. But they’re powerful enough for investors to take a second look at and talk about. Among the above, the absolute favorite thing investors love to talk about with each other is a founder’s ability to hustle. And subsequently, their Herculean efforts that demonstrate grit.
Years later, my friend on Wednesday was still talking about a founder he backed who waited in the cold outside an exec’s office until he got a meeting. Then found unique ways to turn 20 minutes into 30 minutes into hours into their first enterprise client.
The thing is it’s rare to see this. Most people promise that they will, but the best founders have demonstrated this grit time and time again before, against seemingly impossible odds. And they’re only “impossible” if you’ve set lofty goals in the past and you did nothing short of your best to try and achieve it. I’ll give another example. One that I knew if he was to start another business, you knew he was going to make it happen.
Spoiler alert: He did.
From losing everything to acquisition
I first met Anthony at 1517 Fund’s quincentennial “anniversary” summit back in 2017, designed to bring together the world’s most divergent thinkers.
The first thing you notice about Anthony is that he had a small frame. A demeanor that belied his life experiences and the courage it took for him to share them. Yet, he has a way to command the attention of his audience.
He started his business back in freshman year of college delivering food to his fellow classmates at USC. It started off as a side hustle to earn some spare change. Something he didn’t expect would become something greater, until one day Mark Cuban came to USC to give a talk.
As the fireside chat ended sooner than expected, Mark polled the audience, “What if we did a live Shark Tank?” Anthony explained that while unsure if it’ll work, but not wanting to let a once-in-a-lifetime opportunity go, he decided to pitch this idea he’d been working on — which at that point, was not even an app, but just a series of text messages between friends who ordered food and friends who were willing to deliver them.
To his surprise, Mark loved it. Soon that snowballed into Anthony dropping out of school to focus on the business full-time. They got into 500, and he became a Thiel fellow. But one spring later, amidst the hype of a party in Vegas, he miscalculated a dive into the pool. Fractured his spine. And became paralyzed from the neck down.
In the ensuing months, his top priority was not to grow what became EnvoyNow, but to breathe, to drink water — to survive. His co-founders had promised him they would look after the business and that he should focus on recovery. So he did. Months passed. And while Anthony still sat in the occasional company meeting, he was focused on mobility and feeding himself.
A few more months passed by, and one day, his co-founders decided to visit him while he was still focused on recovering. And they broke the news. The business was stalling. Investors had lost faith. Moreover, both his co-founders had already lined up new opportunities and wanted to close the business down.
As I sat listening, I couldn’t help but wonder what I’d do in that situation. Anthony instead decided to go back full-time to the business and win back his remaining team and investors. He said, “I went back to our investors. I shared where we were at, which wasn’t good. And asked them to believe in me once more. They did once before, and as long as I showed I was still passionate about the business, I was banking on the hope that some will still continue to support us.” Luckily, a small handful did.
With renewed drive and determination, and a tough situation to get out of, within the year, they expanded to 16 schools and employed 1500 students around the nation. The rest is history. They sold to JoyRun. And Anthony went on to found more companies, including his current one, Vinovest, which he started 2019 and raised an A in 2021.
If you’re curious about the additional details to the story, there’s also a great 2017 Fortune piece cataloging his journey. I love the line Blake Masters, President of the Thiel Foundation, shared in that piece, “Good luck finding something that will hold [Anthony] back.”
In closing
There’s a fun little thought exercise a couple investors I know used to do (maybe still do). They first posed the question to me when I first jumped into venture, which is:
If you had two young founders… One went to MIT, graduated with a 4.0 GPA in computer science, and was summa cum laude. The other is a high school graduate, and instead of paying over $200,000 over 4 years, took every single MIT computer science course on Coursera in one year. All else held equal, who would you invest in?
Naturally, the answer biases towards the latter. Yet, in the past few years, or at least since I’ve been in the world of VC, there’s been a bunch of logo shopping and chasing the idea of “signal.” While no one says is explicitly, logos have become more important than the hustle.
Today, we’re in a tough market. One where we haven’t seen the light at the end of the tunnel. Hell, we don’t even know when we’re at the trough yet. Or at least, the lagging indicator that we are is a massive slowdown or lack of layoffs. Yet, we recently saw Google, as well as Microsoft and Amazon, go through cuts.
And so, it no longer matters who you’re backed by or where you’ve come from. As Engineering Capital’s Ashmeet Sidana said, “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.”
What matters is that you can make it out the other side. What matters is that you’re inventive and creative, that you can tighten your belt and put the pedal to the metal, and do what looks in retrospect as superhuman.
And that requires perseverance and the ability to learn. That requires spending more time on something than anyone would ever expect to be worth it. As you do so, you embark on what VCs call — insight development.
Photo by Karsten Winegeart on Unsplash
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Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.