Last week, I was chatting with Maya from Spice Capital. And in part of our conversation, she said that the advice she gives to folks looking to break into VC is that they should study late-stage founders, so that they know what excellence and quality looks like.
And I wholeheartedly agree. To get a bit more surgical, for anyone looking to break into VC, study founders who’ve gotten to at least a Series C round. And not only that, if you can, reach out to founders who’ve hit at least Series C, with 8- to 9-figure ARR from EACH set of vintage years. From the bull run of 2020-2021 to the growth periods of 2012-2019 to the GFC to the dot com boom and crash.
If you were to only take one vintage, you have a skewed view of what “great” looks like. But to sample across the eras allows you to pattern match with a greater and less-biased sample size. And instead of focusing on what changed in each era, focus on what hasn’t changed.
To the average person who’s looking to break into VC without a network, aka 99.9% of the world, myself and Maya included when we first did, cold emails and coffee chat asks will only get you so far. In fact, more often than not, you’ll either be ghosted or rejected. So, get creative.
If it helps, here are some ideas that may kindle the fire:
Start a podcast. I don’t care if you only have an audience of one. Start it. At some point it’ll grow. But giving people a platform to share their advice is better than having one isolated conversation. After all, that’s how Harry Stebbings started.
Or a newsletter or a blog. Vis a vis, Lenny Rachitsky or Packy McCormick. Hell, even a book, like Paige Doherty did. Although the last of which is a lot more work, but tends to be have more evergreen content.
Get into investment banking or tech/management consulting. This isn’t new. But if you get the chance to work with pre-IPO companies and take them public, there is immense value in seeing excellence in play.
Host events. While I personally like intimate dinners, there is also value from hosting large networking events, fireside chats, and panels. Like Maya, or Jonathan Chang, or David Ongchoco.
I reread PG’s blogpost on the cities and ambition recently thanks to a good friend of mine down in San Diego. And in it, there’s a specific phrase that caught my eye, “the quality of eavesdropping.” A phrase that has since worked its way into my own rotation. If I were to tie the above examples thematically together, it’s that the quality of eavesdropping is really high. At events, and in consulting, you’re around the buzz of talent. And the jazz of inspiration. When tuning into a podcast, one is often multitasking. Driving, exercising, walking, cooking, you name it. And one might say it is one of the best forms of passive learning out there.
Meriam Webster defines eavesdropping as the act of secretly listening to something private. George Loewenstein says one of the triggers to curiosity is access to information known to others. Private information, in other words, information with an element of exclusivity, fits just that. And as such, while doing the above is useful and helpful to you, it is just as helpful to everyone else. To a busy individual, that just might make her attendance worth it.
All that said, know that if you forever look to lagging indicators of success, you will always be one step behind. If not more. As long as you are tracking successful founders, their companies and their key talent (early employees or key executives), there will be others who will out-execute you. Their networks are larger. And stronger. Especially in that regard.
As someone young, or someone new to an industry, your best bet is to take market risk, not execution risk. Another perspective that both Maya and I share. Betting on new markets mean you are starting off at the same start line as everyone else is. If you can’t get home field advantage, play in a field no one’s played in before.
So after doing the above, and learning from the best, draw your conclusions. And graduate to a new market. But also, beware of the potholes pattern recognition creates.
If it may help, at least for me, it’s useful to remember that excellence is everywhere. And someone who is both ambitious and has a track record for fulfilling promises, is bound to go far. For the latter, it’s especially important to fulfill promises to oneself. The more impossible it is to that individual at that point in time, the better. Whether it was to be an Olympian, or asking their high school crush to prom. Or as Aram Verdiyan calls it “distance travelled.“
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!
The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.
When asked to write a complete story in just six words, Earnest Hemingway famously said, “For sale: baby shoes, never worn.” Six. Simple. Words. Words that even a first grader would understand. One can extrapolate profound meaning through not only what is explicitly said, but also what is implicitly not said. In fact, arguably, the impact of such a short statement is not in the former, but in the latter. Some people call it a hook. Others, a teaser. On YouTube, clickbait. In the world of startups, the one-liner.
I’ve written about the power of the one-liner before, as well as shared it many a time with founders at Techstars, Alchemist, CSI Tech Incubator, WEVE, and during my own office hours. Most founders I see focus on the whole pitch deck. Smarter founders focus on selling the problem and why it means a lot to them. The smartest tell a simple, but powerful story. Focus comes not from a surplus of information, but an intentional deficit. One of my favorite examples of focus comes from mmhmm’s pitch deck – the very same one that led to $31 million in funding pre-launch. While not every founder is as fortunate to have the accolades that Phil and his team has, what every founder can have is the same level of precision and focus.
Hence, quite literally, the one-liner wields an underestimated, but extraordinary power to focus.
Most founders fall in two camps. Camp A, they come up with their one-liner haphazardly – often an abbreviated and diluted version of their more complete product description. In Camp B, they fill their one-liner with every buzzword imaginable in hopes of capturing the attention of investors and customers alike.
And well… I lied. There’s a Camp C, which is some amalgamation of Camp A and B. Rather than the best of both worlds, it’s the worst.
Camp A – Brevity via dilution
Founders here try to cover as much ground as possible, using as little words as possible. If you fail, you’re left with holes in your logic, which leave your investors in confusion. And any doubt left uncovered is a recipe for rejection.
If you somehow succeed, in combining three words into one and five words into two, you leave yourself open to sounding generic.
Camp B – Sounding smart
Your one line may seem special in the moment. You’ve hit every keyword that an SEO consultant would suggest. And Google is without a doubt going to pick up on it. Seemingly so, you’ve done everything right. But for everyone who will pick it up, the only people who won’t are the people who matter. Your initial customers and your first investors.
The companies who can afford to be generic are those who have won already. The big names. Google, Facebook, TikTok, Slack. You don’t need to define what Google or Slack is to the average person. Their target audience knows exactly what you mean without you explaining it. Last I checked, Slack’s slogan is to be your “digital HQ”, which makes complete sense, given their product, but it wasn’t always that way. Slack started off as the “Searchable Log of All Communication and Knowledge” – Slack for short. And at one point, Stewart Butterfield called email the “cockroach of the Internet.” But it’s because of such provocative statements, like the latter especially, that capture the world’s attention. As such positioning in a one-liner is paramount.
You, on the other hand, assuming you’re a founder that is still very much pre-product-market fit, are fighting an uphill battle. You’re an outsider. And as such, you need to elicit emotion and curiosity in one line. Jargon just won’t cut it. It might get your investor to click on your email, and maybe even a first conversation, but rarely an investment.
Why? You’re competing with every other team that is using that exact same permutation of buzzwords. And trust me, it’s a lot. The reality and the paradox is you’re not unique, neither is your idea, until you can prove you are.
The importance of the one line
There are three kinds of investors that are immediately impacted by your one-liner, in the order of least to most impacted:
Angel investors
Conviction-driven firms
Consensus-driven firms
As a function of their check size, angel investors make decisions quickly. Subsequently, if you can nail your 30 minute chat, their memory of you isn’t likely to atrophy over 48 hours, or until they come to an investment decision. Angels also often make their investment decisions on gut, rather than deeper diligence that firms are known for.
Why? Diligence costs money, in the form of legal fees, and time. The latter comes in the form of opportunity cost. If they’re an operator angel – a full-time founder or operator and part-time angel, they won’t have the time to spare on doing additional homework. If they’re a full-time angel, they have their hand in so many startups that spending more time on you, the founder, is keeping them from making other great and quick decisions in other founders. At the same time, many – I dare even say, most – angels index more on “signal” than actually what you’re building.
Equally so, it is also in the nature of conviction-driven firms (firms where each partner has complete jurisdiction over their investment decisions), and solo GPs, to make decisions quickly.
The party you do have to worry about is consensus-driven firms – firms that require consensus from the partnership to move forward on a decision. This is equally true for SPVs and syndicates. Here, you are playing a game of telephone – from coffee chat to partnership to second meeting to partnership meeting (if not more). With every step of friction, the likelihood for drop-off increases. The last thing you want is for your startup’s purpose and product to get lost in translation between people who haven’t even had the chance to touch it yet.
And in all of the above instances, relaying intention, not jargon, is your most powerful tool in your toolkit. What is the query or problem that your customers/users have? How can you address in the simplest but most understandable way possible?
I’ll elaborate.
The one-liner in practice
Years ago, when I first started in venture, I had the serendipity of interviewing a bike-sharing startup for the purposes of an investment opportunity. And I remember asking the founders what they did. To which, they replied, “We make walking fun.”
Needless to say, I was quite perplexed. I knew exactly what they were trying to solve. They weren’t a shoe company or a fitness app or a pedometer. The world had already seen first movers in China and India tackle this problem, but it had yet to reach the Western world by storm.
And the founders laid it out quite simply. If I chose not to take a 10-minute walk to a friend’s house, assuming I had both, would I rather drive 2 minutes, or take a 5-minute bike ride? Expectedly, I picked the latter. Rather than competing with cars which had become a rather saturated market, and neither of the founders had the chops to build a self-driving one, it’s much easier to compete with an activity everyone is forced to do – no matter how rich or poor you are. The equivalent of what Keith Rabois calls a “large, highly fragmented market.” Albeit, maybe not with the lowest NPS score out there.
Unsurprisingly, it became one of my favorite stories to share, and one I swiftly shared with many investors then. They’ve since become one of the most recognizable unicorns around. But for now, I’ll refrain from sharing the name of the company until I get permission to do so.
Lenny Rachitsky also recently came out with an incredible blogpost, which includes the one-liners of some of the most recognizable brands today, like Tinder, Uber, Instagram, and more. In the below graphic from that blogpost, you’ll realize not a single one has any jargon in it.
The words you subsequently use in that one line determine where in the competitive landscape you lie. For instance, in the scope of messaging products, if I say email, you immediately think of Gmail or Superhuman. If I say instant messaging, you think of text, Messenger, or Whatsapp. If I mention corporate or work, you think of Slack. All of the above are messaging products, but how you frame it determines its competitors.
I’ll give another example. Say, calls. If I say call, you think of phones. On the other hand, if I say meeting, you think of Zoom or Google Meet or Microsoft teams. And if I say casual call, you think of Discord.
Your competitors aren’t who you say they are; they’re who your investors think they are.
The goal of the one-liner
The greatest one-liners elicit:
Emotion
Curiosity
While they should do their job of describing your product, your one-liner is your CTA. For customers, that’s downloading the app, or jumping on a sales call. For investors, it’s so that you can get them to open your pitch deck or take the first meeting. Don’t skip steps. Your one-liner won’t get you a term sheet. So, don’t expect that it will.
Your goal is to tease just enough that investors become curious and get over the activation energy of requesting or scheduling a call.
To summarize a point I elaborated on in a previous blogpost on the psychology of curiosity, there are five triggers to curiosity:
Questions or riddles (i.e. a puzzle they can solve but others can’t)
Unknown resolutions (i.e. cliffhangers – though not something I’d recommend for a one-liner, you’re running on borrowed time)
Violated expectations (i.e. the afore-mentioned bike-sharing startup)
Access to information known by others (i.e. FOMO)
And reminders of something forgotten (i.e. empathy when they were founders or in the idea maze)
To share a few more examples, using Lenny’s list of one-liners:
Violated expectations – Dropbox, Uber, Duolingo
Access to information known by others – Tinder, Spotify, Amazon, Zillow
And reminders of something forgotten – hims, Pinterest
Just like any other human, investors are prone to all of the above. Use that to your advantage. And as you might have suspected, your one-liner depends on your audience. Different people with different goals and different backgrounds will react to different triggers.
In closing
There’s a fine balance between clickbait and a great hook. A balance of expectations versus reality. If you were to take anything away from this essay, I’ll boil it down to three:
You should promise just enough to get people excited and curious, but not more to the point where the reality of your actual product, or even your pitch deck, is disappointing.
Less is more. The simpler your one-liner is, the easier your message will spread. No one will remember the exact words of your 7-minute pitch.
Have some element of shock value to elicit curiosity – not only initially with said investor, but also with others he/she will share with.
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!
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.
People seem to love origin stories – both in theatre and in life.
“How did it all start?”
“How did you get into this career?”
Or…
“How did you meet your wife/husband?”
And well, I can’t say I’m one to push back on that.
There’s something truly magical about “Once upon a time…”. And I’m no stranger to fairy tales. Growing up, I was largely influenced by older female cousins and family friends. As soon as our parents left to their wine-sipping adult gossip around a table of blackjack, my cousins and older female friends would drag us to watch their favorite Disney movies on the VCR, namely princess movies. I’m not exaggerating when I say I’ve seen Beauty and the Beast more than 100 times or Cinderella more than 50 times. In fact, my friends in elementary school would talk about their favorite movies – Transformers, LEGO Bionicles, Peter Pan, and Tarzan. Yet, mine was Disney’s 1998 Mulan.
And they all started with “Once upon a time…”
So, it was no surprise when friends, colleagues, and then strangers started asking me:
“How/when/why did you start hosting social experiments?”
