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The Frequency of the 3 Types of Mentors

I wrote an essay about the three types of mentors exactly a year ago. Peer. Tactical. Strategic.

  • Peer mentor – Someone who has a similar level of experience as you do in a given field.
  • Tactical mentor – Someone who is 2-5 years ahead in experience, and someone who can check your blind side. Because they have gone through similar situations as you are currently going through not too long ago, they can provide context as to the variables (core and confounding) involved.
  • Strategic mentor (which I formerly called veteran mentor) – Someone who has attained success in a particular field as you would define it. While they won’t be able to help you in the play-by-play, they can provide the bigger picture – the macroscopic view. Assessing and reassessing your long-term goals – your true north.

Rocks, pebbles, sand

Many of you might be no stranger to the rocks, pebbles, sand analogy. As the metaphor goes, if your life were a jar, you’d want to fill it with rocks first, then pebbles, then sand. If you start off filling your life with sand, you will have no more space for rocks and pebbles. Similarly, if you start filling it with pebbles, you will only have space left for sand, but not rocks. Analogized, rocks are your life and career’s most important projects and milestones. Pebbles are the smaller projects that lend itself to the whole, some of which you could do without. Sand represents the day-to-day, week-to-week ups and downs.

Rocks

Strategic mentors are most useful once a year (or at best 2-3 times/year) to see if you’re aligned with your goals. They help you set the large milestones you want to accomplish in your life.

  • What matters?
  • What doesn’t?

Pebbles

Tactical mentors, you seek after you come up with a few solutions/hypotheses that you would like to test. You don’t seek them as often, but they can help provide context to what you’re going through now, largely from their own experience having gone through it recently.

  • What variables am I overlooking or underestimating their effects on the outcome? Or simply put, what could go wrong?

Sand

You seek peer mentors before you come up with your solution and in problem-solving mode. These are the mentors you’re going to be spending the most time with. And most likely, the most abundant category of your mentors.

  • How would you attempt to resolve this dilemma? What would you do if you were in my shoes?
  • What are new, innovative ways I can use to tackle this problem?

While they vary in their sizes, each rock, pebble and sand is necessary to live your most fulfilling life.

In closing

Over the years, I’ve had the great fortune of having some amazing mentors and mentor figures that have shone me the proverbial light when alone, I may have struggled to find. Yet equally so, I’ve met their antithesis. Luckily very few, but nevertheless. People who don the mantle of being a mentor, but cannot tolerate your success when you surpass them. The latter I met years ago when I indiscriminately and naively sought out mentors, for the pure sake of just having “mentors”. Arguably, as a foolhardy contest of ego and pride, specifically to compensate my feelings of ineptitude.

A mentor like a friend is someone who is happier and wishes for your success than sometimes you do for yourself. Often, independent of their own escape velocity. Simply put, they invest in your success. And of course with that pretext, they are a scarcity. Even of those are willing and free enough to be mentors, given the volume of their inbound, understandably, their response rate is exceedingly low.

While that fact shouldn’t deter you from seeking mentorship, it makes me cherish the time, effort, and advice I have been fortunate enough to receive.

In the words of Tom Landry, legendary head coach of the Dallas Cowboys, “A coach is someone who tells you what you don’t want to hear, who has you see what you don’t want to see, so you can be who you have always known you could be.”

Photo by Anas Belmadani on Unsplash

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How Entrepreneurship and Networking Are Synonymous With Each Other

A few days ago, I came across a question on Quora that sparked my interest. “What [is] the best network for developing entrepreneurship skills?” And I couldn’t help but backcast, as Mike Maples Jr. at Floodgate would call it, which I shared a bit more here. Looking at the entrepreneurs I know who have achieved some modicum of success, how did they build their entrepreneurial skills?

Taking it a bit further, what is one skill that they have that made all their other skills much easier to acquire and/or hone? And I could only come up with one answer, which is understood in various nominations. Resourcefulness. Scrappiness. Creativity under pressure. Staying lean. Frankly, their ability to hustle.

“The best network”

What is the best network for developing entrepreneurial skills?

The simple answer: One you build yourself.

The longer answer…

Entrepreneurship is a career that requires you to hustle. Likewise, a network you build yourself from reaching out and cold emailing has the potential to be stronger than even the best of networks out there. But entrepreneurship can come in two flavors: a hobby and a lifestyle.

A hobby or a lifestyle?

If entrepreneurship is a hobby, there are amazing collaborative:

  • Slack groups,
  • Subreddits,
  • Facebook groups,
  • Quora spaces,
  • Meetup groups,
  • Conferences/trade shows/expos,
  • You name it, it’s out there.

But it will be akin to sitting in a classroom and learning the theory and conceptualizations.

If entrepreneurship is a lifestyle, you need to learn by application. And unfortunately, you’ll need to develop scar tissue from making real mistakes outside the classroom. You need to hustle and find what works and doesn’t work for you. Two of my favorite venture firms, 1517 Fund and Hustle Fund, invest in founders who do exactly that. Unlike many other venture funds, it’s in their thesis. Learn by doing. Learn by hustling. While there is merit in literature and academic institutions, you are learning at the pace of the system. And when you’re a founder, often times, time is not on your side.

In a parallel, an entrepreneur once described the bifurcation as a “lean-back” versus a “lean-in” activity. A “lean-back” activity would be watching a sitcom, picking strawberries, or typing a simple response to an email chain. Whereas a “lean-in” would be playing football, playing a competitive first-person shooter game, or fixing a bug in the code 2 hours before a product launch. Entrepreneurship, as you might guess, is a “lean-in” sport. So is networking.

There are two French words I often allude to – savoir and connaître. Both mean to understand. Savoir means to understand on a superficial, factual level. Connaître means to know on a deeper, emotional level – to be deeply familiar with. As an entrepreneur, the lifestyle you choose is often not passive, but an active one, or some might argue, an aggressive one. One where the clock started ticking before you started. Sometimes, before you were even born. Ben Horowitz makes a brilliant comparison between a peacetime and a wartime CEO. From his piece, I’ll quote two of his juxtapositions:

“Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to win.”

“Peacetime CEO has rules like ‘we’re going to exit all businesses where we’re not number 1 or 2.’  Wartime CEO often has no businesses that are number 1 or 2 and therefore does not have the luxury of following that rule.”

Where you’re required to make decisions in difficult times, and if you don’t understand a concept or a skill to the level where it’s engrained in your bone, you will fumble more often than you run touchdowns. Part of the reason why second-time, third-time entrepreneurs usually perform better than first-time entrepreneurs.

I graduated from a stellar university, UC Berkeley, located at one of the epicenters of Silicon Valley/Bay Area, where I got my economics degree and a certification in entrepreneurship and technology. I took a number of classes that allowed me “to learn and hone” my entrepreneurship skills. While there were a handful, I came out feeling I was equipped with the knowledge to take on the world. When I put them to the test, I realized I knew nothing. When faced with reality, I didn’t know how to deal with edge cases since edge cases are rarely taught in the classroom.

Most communities and classes teach entrepreneurship skills in abstractions, making it easier to understand. Even this blog post is, in many ways, an abstraction. They rarely teach the edge cases ’cause frankly, there are too many “what if’s”. But as an entrepreneur, you need to be ready for the “what if’s”. For anything and everything. And over time, what transcends the individual skills you have is having a mental model to hedge yourself from future edge cases.

I once asked someone what being an expert meant. And I really liked his answer, as it stuck with me all these years. He said, “An expert is someone who has made all the mistakes in a very narrow field.”

Photo by Jed Villejo on Unsplash

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How to Build Fast and Not Break (As Many) Things – A Startup GTM Playbook

The tech world, particularly Silicon Valley, in the past 2 decades, has accelerated its growth ’cause of one mantra: “Move fast and break things.” Some of the most valuable products we know today were built because of that. Facebook, whose founder coined the phrase. Google. Amazon. LinkedIn. Uber. The list goes on. In sum, be “agile”. Simultaneously, I see founders, on the regular, take this mental model too far. They move fast, but they rarely give enough time to test their hypotheses.

Equally so, some companies cannot afford to “break things”. Take Dropbox, for example. Ruchi Sanghvi, founder of the South Park Commons Fund, former VP of Operations at Dropbox, and Facebook’s earliest female engineer, told VentureBeat in 2015, “Quality is really, really important to Dropbox, and as a result we needed to move slower — not slowly, but slower than Facebook.” Ruth Reader, who wrote for VentureBeat at the time, further extrapolated, “What was right for Facebook — fast-paced iteration and fixing bugs in real time — didn’t work for DropBox, an application people entrusted with personal documents like wedding photos or the first draft of a novel. What was valuable to DropBox was the details.”

On the other extreme, there are founders who spend day after day, week after week, and sometimes year after year, pursuing the “perfect” product before launching. If they were right on the money before, by the time they launch 6 months later, they might be 6 months off the money. Take the situation we’re all in today for example – the pandemic. No one could have predicted it. In fact, I had many a few predictions before the pandemic, which all proved to be unfortunately wrong.

  • The Marketplace of Startups, written on February 24, 2020 – I alluded to an opinion I held that consumer social was almost dead. The consumer app market had become so saturated that it was hard for new players to play in.
  • Myths around Startups and Business Ideas, written on October 12, 2020 – Pre-COVID, I was more bullish on Slack than Zoom as a public stock investment. History proved otherwise.

… and more to come. Mistakes are inevitable. And “the rear view mirror is always clearer than the windshield”, as Warren Buffett would describe. Seth Godin said in his recent interview on The Tim Ferriss Show: “Reassurance is futile because you never have enough of it.”

At the end of the day, as a startup founder, your raison d’être is creating value in the world where there wasn’t before. As Bill Gates puts it: “A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it.” Analogized, your startup is that platform.

So, in this post, using the lessons from other subject-matter experts (SMEs), I’ll share how startup teams can balance speed with intentionality in their go-to-market (GTM) strategy.

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Before the Close – How to Increase the Chance of Raising Capital

A number of founders ask me for fundraising advice. While they come in different magnitudes, one of the common themes is: “I’ve had many investor meetings, but I still can’t get a term sheet. What am I doing wrong? What do I need to do or to say to get a yes?”

To preface, I don’t have the one-size-fit-all solution. Neither do I think there is a one-size-fit-all solution. Each investor is looking for something different. And while theses often rhyme, the “A-ha!” moment for each investor is a culmination of their own professional and life experiences. This anecdote is, by no means, prescriptive, but another perspective that may help you when fundraising, if you’re not getting the results you want. This won’t help you cheat the system. If you still have a shoddy product or an unambitious team, you’re still probably not going to get any external capital.

One thing I learned when I was on the operating side of the table is: When you want money, ask for advice. When you want advice, ask for money. It’s, admittedly, a slightly roundabout way to get:

  1. Investor interest,
  2. And reference points for milestones to hit.

But it’s worked for me. Why? Because you’re fighting in a highly-competitive, heavily-saturated market of attention – investor attention. This method merely helps you increase the potential surface area of interaction and visibility, to give you time in front of an investor to prove yourself.

Investors are expected to jump into a long term marriage with founders, while, for the most part, only given a small cross-section in your founding journey to evaluate you. It’s as if you chose to marry someone for life you’ve only met 60-90 days ago. While angels and some people have the courage and the conviction to do that, most investors like to err on the side of caution. Contrary to popular belief, venture capitalists are extremely risk-averse. They look for risk-adjusted bets. And if you can prove to them – either through traction or an earned secret – that you’re not just a rounding error, you’ll make their lives a lot easier.

So, let me elaborate.

When you want money, ask for advice.

As you’re growing your business and you want to show you are, ask investors for advice. Tell them. “So I’ve been growing at X% MoM, and I’ve gotten to Y # of users. I’m thinking about pursuing this Z as my next priority. And this is how I plan to A/B test it. What do you think?”

And if you keep these investors in the loop the entire time and ask and follow-up on their advice, at some point, they’d think and ask, “Damn, this is an epic business. Will you just take my money?”

So, what are good numbers?

The Rule of 40 is a rough rule of thumb many investors use for consumer tech markets. Month-over-month growth rate plus profit should be greater than or equal to 40. So you can be growing 50% MoM, but burning money with -10% profit, aka costs are greater than your revenue. Or you can be growing 30% MoM, but gaining 10% profit every month. And if you’ve got 10s of 1000s of users, you’re on solid ground. Better yet, one of the biggest expenses is increasing server capacity costs.

For more reference points on ideal consumer startup numbers, check out this blog post I wrote last year.

For enterprise/B2B SaaS, somewhere along the lines of 10-15% MoM growth. With at least 1 key customer logo. And 5 publicly referenceable customers.

Of course, the Rule of 40 did not age well for certain industries in 2020.

When you want advice, ask for money.

When you ask for money most of the time, investors, partners, and potential customers will say no, especially if you’re super early on and don’t have a background or track record as an entrepreneur. So when they do say no, I like to ask them one of my favorite questions: “What do I need to bring you for you to unconditionally say yes?” Then, they’ll tell me what they want to see out of our product or our business. These, especially if they’re reinforced independently across multiple different individuals in your ecosystem, should be your North Star metrics. And when you do put their advice to action, be sure to follow up with the results to their implemented advice.

  1. You either do what they recommended. And show them what happened. And what’s next.
  2. Or you don’t do what they recommended. But show that you heavily considered their recommendation. What you did instead. Why you chose to do what you did instead. And what’s next.

To take it one step further, once I ask the above question to have a reference point for growth trajectory, I ask: “Who is the smartest person(s) known to achieve X (or in Y)?” with X being the answer you got via the previous question. And Y being the industry you’re tackling.

For instance, I’d recommend:

Then, go to that person or those people and say, “Hey Jennifer, [investor name] said if there’s one person I had to talk to about X, I have to talk to you.” Feel free to use my cold email “template” as reference, if you’re unsure of what else to say.

If you use this tactic again and again, eventually you’ll build a family of unofficial (maybe even official) mentors and advisors, even if you never explicitly call them that. Not necessarily asking for money all the time. But asking for money might help you ignite the spark for this positive feedback loop.

In closing

When I was on the operating side, a brilliant founder with 2 multi-million dollar exits once told me: “Always be selling. Always be fundraising. And always be hiring.”

I didn’t really get it then. In fact, I didn’t get it the entire time I was on the other side of the table. What do you mean “Always be fundraising”? Should I just be asking for money all the time? What about the business?

It wasn’t until I made my way into VC at SkyDeck that I realized the depth of his words. Keep people you eventually want to fundraise from and hire in the loop about what you’re building. Keep them excited. Build a relationship beyond something transactional. Build a friendship.

Jeff Bezos put it best when he said:

“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.

“At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow and we’re very stubborn. We say we’re stubborn on vision and flexible on details.”

Photo by Frame Harirak on Unsplash

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Fantastic Unicorns and Where to Find Them

As a venture scout and as someone who loves helping pre-seed/seed startups before they get to the A, I get asked this one question more often than I expect. “David, do you think this is a good idea?” Most of the time, admittedly, I don’t know. Why? I’m not the core user. I wouldn’t count myself as an early adopter who could become a power user, outside of pure curiosity. I’m not their customer. To quote Michael Seibel of Y Combinator,

… “customers are the gatekeepers of the startups world.” Then comes the question, if customers are the gatekeepers to the venture world, how do you know if you’re on to something if you’re any one of the below:

  • Pre-product,
  • Pre-traction,
  • And/or pre-revenue?

This blog post isn’t designed to be the crystal ball to all your problems. I have to disappoint. I’m a Muggle without the power of Divination. But instead, let me share 3 mental models that might help a budding founder find idea-market fit. Let’s call it a tracker’s kit that may increase your chances at finding a unicorn.

  1. Frustration
  2. The highly fragmented industry with low NPS
  3. Right on non-consensus
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#unfiltered #31 The Art of Running into Walls – How to Confront Fear and Fear-Setting

Last night, I happened to re-stumble across a sentence in my collection of quotes that caught my eye.

“The greatest pleasure in life is doing what people say you cannot do.”

– Walter Bagehot
Journalist, businessman, essayist

The founder story

I’ve had this long-standing belief – which if you’re a regular reader of this blog, you’re no stranger to – that founders need to have a personal vendetta when building a business. They must have something to prove or someone they’d want to prove to. Building a business is finding where selfishness meets selflessness. In fact, I’d argue that’s true in every ideal professional career.

The path of entrepreneurship is one where resilience is the floor, not the ceiling. While I understand, it is not the only career path that carries this trait, it is the one I am most familiar with. And having asked 31 people, 18 of which are or have been entrepreneurs, I’ve learned that everyone, despite their job title or background, can be scared in the face of obstacles. Everyone feels fear, myself included. The question is what do we do next, after the feeling of fear enters our heart and mind.

Continue reading “#unfiltered #31 The Art of Running into Walls – How to Confront Fear and Fear-Setting”
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The Letters and Passages #1 – Room by Emma Donoghue

Note: I don’t know how many of these book reactions I’ll write. I don’t know how frequently I’ll write these either. But I do know that when I do write one, it’ll have changed my life, my thoughts… me – in a meaningful way.

The Preface

My friend, an extremely well-read fiction purist, highly recommended this book to me, a non-fiction purist, one beautiful Monday evening. She said if there was only one book I had to read when it came to fiction, it had to be this one. I asked her what it was about. She said only one word: “Perspective.”

Moreover, she prohibited me from doing any research online (as I like to do) or even reading the summary on the back cover. To date, it is the only book I’ve read not having done any homework on it whatsoever. And I’m glad I didn’t.

What I learned was much more than I could have ever hoped for. Throughout my read of Room, I had a constant reminder of what Josh Waitzkin, author, chess champion, and martial arts champion, said February this year on Episode #412 of the Tim Ferriss Show:

“When I studied Tai Chi for a year, I thought I knew what I was doing. And I thought I was really started to understand it. But after 2 years, I realized everything I thought after a year was wrong. It was just wrong. But now I understood.

And then after 4 years, I realized everything I thought after 2 years was wrong. And he went on with this story and this pattern, but now I understood. And after 8 years, everything I thought after 4 years was wrong. And now I’ve been training for 16 years; everything I thought after 8 years was wrong. And now, I finally understand…

It’s easy to think we’re in the dark yesterday, but in the light today. But we’re in the dark today too.”

Room by Emma Donoghue

I will warn that in this section, I will reveal some light spoilers. If you want to save that experience for yourself, feel free to jump to the epilogue of this post.

“‘Scared is what you’re feeling,’ says Ma, ‘but brave is what you’re doing.'” (116)

The first 100 pages were cute and endearing. Slowly, but surely, over the course of a week, I learned of the world inside an 11-by-11-foot space, from the eyes, ears, and the imagination of young Jack. To me, they were slow. Yet, each time Jack’s Ma shared one additional layer of perspective – another reference point, another anchor – I felt thrown back into square one. Seeing the 11-by-11 world again in new eyes.

The next 100 pages happened before I had a chance to blink. All before the hour was up. Yet only a mere 48 hours passed in the timeline of Jack’s world.

The final 100 pages, for the first time, I began to contextualize Jack’s world to mine. How much I take for granted. The small things. The ephemeral nature of life. But also how quickly I, like much of the world, tend to jump to conclusions when given only a fraction of the bigger picture. The me was exemplified in all the other characters in these 100 pages.

It’s a beautiful story – one I didn’t think I’d like. 10 pages in. It was just another book. 20 pages. It was just another book. 30. 40. 50. And so on. But on page 82, it went from another book to THE book.

The Epilogue

Perspective. It’s something I think the world could always use a little more of. There’s 7.8 billion people on this planet. One of eight bodies in this solar system. One of many interstellar objects and phenomena out there.

I’m writing in one of 6909 languages used in the world today. A participant in one, maybe two, of over 3800 cultures in this world. Both I’m sure are underestimations. Yet, everyone’s living a life I seemingly know nothing about.

Once again, I’m reminded of the answer one of my high-schoolmates wrote in his college application. A brilliantly concise one, to the question: What is a problem that exists in the world right now?

He wrote: “Ignorance. I know nothing about it.”

While the book doesn’t aim to answer all your existential questions, it does shed light into the simplicities and complexities in our world. And how often we tend to overlook each. Taking each as granted.

The world is in turmoil these days. A revolution of emotions. A war on beliefs. We spend so much time speaking our thoughts. Yet, not as much time listening to others’. As someone in the intelligence world once told me, “The most effective kind of communication is listening, not speaking. And listening is not just hearing.” Hearing is just letting audible sound transmit through the air. Listening is paying attention to the words and the context that follow another’s intentions.

So, I’ll end with Ma’s words on page 217. “That’s why God gave you a mouth to breathe through.”

Room, by Emma Donoghue, a book that reminded me that in exhaling I often forget to inhale.

The Letters and Passages is a series where I share my raw thoughts on the books, letters, passages, and the literature I come across. Those that inspire me. Those that change my perspective. And those that resonate the most. So much so, you might realize that the headings are in violet rather than the usual cyan blue.

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Myths around Startups and Business Ideas

In a number of recent conversations with friends outside of venture and “aspiring entrepreneurs”, a couple myths, which I’m going to loosely define here as popular beliefs held by many people, were brought to my attention. 4 in particular.

  1. If I have a great idea and build it, it’ll sell itself.
  2. That idea/startup is over-hyped.
  3. The startup/venture capital landscape is over-saturated.
  4. If it doesn’t make sense to me, it’s not a good idea.

Quite fortuitously, a question on Quora also inspired this post and discussion.

If I have a great idea and build it, it’ll sell itself.

Unfortunately, most times, it won’t. As Reid Hoffman puts it: “A good product with great distribution will almost always beat a great product with poor distribution.” As a founder, you have to think like a salesperson (for enterprise/B2B businesses) or a marketer (for consumer/B2C businesses). People have to know about what you’re building. ’Cause frankly you could build the world’s best time machine in your basement, but if no one knows, it’s just a time machine in your basement. Probably a great story to tell for Hollywood one day (even then you still need people to find out), but not for a business.

That idea/startup is over-hyped.

I’ll be honest. This really isn’t a myth, more of a common saying.

Maybe so, at the cross-section in time in which you’re looking at it. But if you rewind a couple months or a year or 2 years ago, they were under-hyped. In fact, there’s a good chance no one cared. While everyone has a different technical definition of over- and under-hyped, by the numbers, time will tell if it’ll be a sustainable business or not. If it’s keeping north of 40% retention even 6 months after the hype, we’re in for a breadwinner.

Take Zoom, for example. Pre-COVID, if you asked any rational tech investor, “would you invest in Slack or Zoom?” Most would say Slack. Zoom existed, but many weren’t extremely bullish on it. Today, well, that may be a different story. As of this morning (Oct. 12, 2020), while I’m editing this post before the market opens, the stock price of Zoom is $492 (and same change). Approximately 343% higher than it was on March 17th, the first day of the Bay Area shelter-in-place. And, right now, the price of Slack is $31. Approximately 56% up from the beginning of quarantine.

Neither are startups anymore, but the analogy holds. Also, a lesson that predictions, even by experts, can be wrong.

The startup/venture capital landscape is over-saturated.

“There’s too much money being invested (wasted) on startups.”

From the outside, it may very well look that way. Every day, every week we see this startup gets funded for $X million or that startup gets funded for $YY million. According to the National Venture Capital Association (NVCA), $133 billion were invested into startups last year. Yet, it pales in comparison to the capital that’s traded in the public markets.

VC funds see thousands of startup pitches a year. Per partner (most funds 2–3 partners), they each invest in 3–5 per year (aka about once per quarter). Meaning >99% of startups that a single VC sees are not getting funded by them. That doesn’t mean 99% never get funded, but it’s just to illustrate that proportionally, capital isn’t being spent willy-nilly.

If we look at it from a macro-economic perspective, if we are reaching saturation in the startup market, we should be getting closer to perfect competition. And in a perfectly competitive market, profit margins are zero. The thing is profits aren’t nearing zero in the startup/venture capital market. In fact, though the median fund isn’t returning much on invested capital. A good fund is returning 3–5x. A great one >5x. And well, if you were in Chris Sacca’s first fund, which included Uber, Twitter, and more, 250x MOIC. That’s $250 returned on every $1 invested.

If it doesn’t make sense to me, it’s not a good idea.

Finding Product-Market Fit and “Idea-Market Fit”

Revolutionary ideas aren’t meant to conform. If an idea is truly ground-breaking, people have yet to be conditioned to think that a startup idea is great or not. As Andy Rachleff, co-founder of Wealthfront and Benchmark Capital, puts it: “you want to be right on the non-consensus.” Think Uber and Airbnb in 2008. If you asked me to jump in a stranger’s car to go somewhere then, I would have thought you were crazy. Same with living in a stranger’s home. I write more about being right on the non-consensus here and in this blog post.

Frankly, you may not be the target market. You’re not the customer that startup is serving. The constant reminder we, on the venture capital side of the table, have is to stop thinking that we are the core user for a product. Most products are not made for us. Equally, when a founder comes to us pre-traction and asks us “Is this a good idea?”, most of the time I don’t know. The numbers (will) prove if it’s a good idea or not. Unless I am their target audience, I don’t have a lot to weigh in on. I can only check, from least important to most important:

  1. How big is the market + growth rate
  2. Does the founder(s) have a unique insight into the industry that all the other players are overlooking or underestimating or don’t know at all? And will this insight keep incumbents at bay at least until this startup reaches product-market fit?
  3. How obsessed about the problem space is the founder/team, which is a proxy for grit and resilience in the longer run? And obsession is an early sign of (1) their current level of domain expertise/navigating the “idea maze”, and (2) and their potential to gain more expertise. If we take the equation for a line, y = mx + b. As early-stage investors, we invest in “m’s” not “b’s”.

In closing

While I know not everyone echoes these thoughts, hopefully, this post can provide more context to some of the entrepreneurial motions we’re seeing today. Of course, take it all with a grain of salt. I’m an optimist by nature and by function of my job. Just as a VC I respect told me when I first started 4 years back,

“If you’re going to pursue a career in venture, by nature of the job, you have to be an optimist.”

Happened to also be one of the VCs who shared his thoughts for my little research project on inspiration and frustration last week.

Photo by K. Mitch Hodge on Unsplash

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#unfiltered #30 Inspiration and Frustration – The Honest Answers From Some of the Most Resilient People Going through a World of Uncertainty

A few weeks ago, around the time I published Am I At My Best Right Now?, I started noticing more and more that my friends, colleagues, and people that I’ve met since were going through tough times. Two lost a family member. Some were laid off. Two were forced to leave this land I call home. Four broke up. Three burned out. Countless more told me they were stressed and/or depressed, and didn’t know how to escape this limbo. After I published that post, another handful of people also reached out and courageously shared the troubles they are going through now. How it’s been so hard to share with others. And yesterday, while editing this blog post, I found out that one of my high school friends had passed.

Inspiration and Frustration

During this time, I had a thought: Frustration is the absence of inspiration. There were many times in my own life when I was beating myself up because I couldn’t think of a solution. And a small percent of those times, I didn’t even bother to think of a solution since I was so engrossed in my frustration with myself.

In these unprecedented times and inspired by the conversations around me, I decided to show that we’re not alone. So, I asked people who I deeply respect and who could shed light as to what it means to be human. I asked just two questions, but they were only allowed to answer one of them:

  1. What is the one thing that inspires you so much that it makes everything else in life much easier to bear?
  2. What is stressing/frustrating you so much right now that it seems to invalidate everything else you’re doing?

In turn, they responded via email, text, or on a phone call. Of the 49 I asked, so far, 31 responded with their answers. 4 politely turned me down due to their busy schedules. Another one turned me down because she didn’t feel like she could offer value in her answer.

26 responded with what inspires them. 5 with what frustrates them. All of whom I know has been through adversity and back.

Admittedly, the hardest part about this study was how I was going to organize all these responses. Unlike the one about time allocation I did over a month ago, where I knew exactly how to organize the data before I even got all the responses, this one, I really didn’t know how to best illustrate the candor everyone shared. In fact, I would be doing a disservice to them, if reduced their honesty and courage to be vulnerable to mere numbers. So, in the end, below, I let everyone speak for themselves. Sometimes, simplicity is the best.

Thank you to everyone who contributed to making this blog post happen, including Brad Feld, Mars Aguirre, Shayan Mehdi, Thomas Owen, Chris Lyons, Mark Leon, Jamarr Lampart, Christen Nino De Guzman, Louis Q Tran, Sam Marelich, Dr. Kris Marsh, Quincy Huynh, DJ Welch, Jimmy Yue, and many, many more heroes who helped me and the world around us behind the curtains.

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How to Identify Market Opportunity and Recognize Market Inefficiencies

round gold colored pocket watch

I was raised a swimmer. From 4 years old, my parents sent me to take swimming classes for 2 primary reasons:

  1. Learn how to not drown.
  2. If we (my parents) are ever going to drown, you’re going to save us.*

*Note: I’d like to point out the irony is that both of parents know how to swim themselves. Not at a competitive stage, but enough to survive from drowning.

Oddly enough, I learned how to swim by drowning. Over the years, like many other children around me, on top of swimming, I also played ball in its various sizes and ran. And I learned that swimming and running are of the 2 purest forms of athleticism and exercise out there. There’s very little margin for error, if any. A tenth of a second is the difference between Olympic gold and not even qualifying for the semifinals. Because of that, in swimming, we’re taught to be efficient. We learned to maximize for our distance per stroke (DPS). And I believe in running, it’s distance per stride.

Efficiency. The ability to do more with less.

The market of efficiency

These days, getting from point A to B isn’t as difficult as it used to be. Cars made travelling miles easier. Planes, for hundreds to thousands of miles. Bikes and scooters, for last mile transportation – distances too close to drive, but take twice as long to walk. Outside of transportation, career development, information and skill acquisition have all seen massive developments not only in the last hundred years, but especially in the last 10 years. Online platforms, like Coursera, Masterclass, Google, and Wikipedia, helped us all shave off months, years, even generations of legwork and information acquisition. They made so many things more accessible.

Accessibility

Accessibility is platformitizing and democratizing information. What Yellow Pages did for services. Reddit for knowledge acquisition. Amazon for shopping. Google for information. And Food Network and food media did for cooks. The average person today is more knowledgeable about the culinary process and its accessories than someone two decades back. Laughable now, but 8 years ago, it’s how I learned not to burn frozen pizza. I could go on and on.

But, in the next ten years, accessibility may not be enough. Though there are many populations in this world who still have yet to access the knowledge I can readily find on my laptop, accessibility provides people with the tools, but not the means to use those tools effectively.

Ease

Ease does. Lower the barriers to entry and bundle the entire knowledge acquisition, or otherwise, what I would call onboarding, in an intuitive manner. Like what WordPress did for websites. Instagram for photos. Opendoor for home-buying/selling. TurboTax for, well, tax.

It’s a messy web of information out there. As economist Herbert A. Simon puts it:

“A wealth of information creates a poverty of attention.”

Here’s an easy way to tell which industries and processes lack ease. Find where people have created hacks to solve a problem.

  • Using multiple tools/software to solve a single problem;
  • Using a “temporary” solution to solve a repetitive problem. Like a basin to catch the rainwater that leaks through the roof;
  • A public forum, like Reddit or a Facebook group or multiple similar questions on Quora, where people share their “life hacks”.
  • A How-to YouTube video that has tens/hundreds of thousands, if not millions, of views.

And to know if you hit the nail on the head, you’ve got crazy pull. Product-market fit. PMF. When you don’t even have the luxury of time to worry if you have PMF ’cause your customer success inbox/sales inbox is filled to the brim. Or you’re getting so many new users that you’re figuring out how to upgrade your servers before your servers go blank. For more on PMF, I highly recommend checking out Lenny Rachitsky‘s recent post surveying 25 of the most successful companies on when they realized they had PMF.

In closing

Tools and platforms that make it easier for an individual to go the distance, to be more efficient, carry 2 traits: accessibility and ease. With each stroke, with each action one takes, they can go further. They can do more. With less. Technology, in the incoming years, will further do so.

And as a VC scout, I look for, what I call – distance per action. Or DPA, for short. So, if you’re working on something that will enable people to have higher and greater DPAs, I wanna talk.

Photo by David Bartus on Pexels.com

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