Impressive Entrepreneurs

August 9, 2013

Reading Paul Graham’s wonderful post on How to Convince Investors prompted me think back over my last 5 years in venture capital and what traits stood out among entrepreneurs that I was most impressed by.

Of course this is a subjective view, and based on a cohort of a few thousand people. There will always be many exceptions but I still find it helpful as a reference list. As an investor in early stage companies, across a broad range of technologies and industries, backing great entrepreneurs is the easiest way for me to increases my odds of success.

Entrepreneurs who have impressed me most tend to be:

  1. soft spoken and amazingly calm, even under stress. They don’t appear to be easily over-excited by success or failure.
  2. extremely product oriented. They are not enamored by technology, creativity of their idea, or their past laurels. It’s all about the product for them.
  3. resourceful with time and money. They are somehow able to get so much done with so little.
  4. surround themselves with top talent and network, and shun mediocrity at all times.
  5. convinced they will eventually win even if they don’t yet know how. Their attitude gets reflected in the culture of companies they build.
  6. extremely knowledgable about their space. It doesn’t matter their age or complexity of industry they are tackling. They can explain their vision in starkly simple ways, but if I want to double-click on any topic, they come prepared to be challenged.
  7. unashamed if they don’t have all the answers. They don’t try to BS their way out of a question and get back to me later if it was a relevant question.
  8. charismatic and pull me into their conversation. They don’t just deliver facts and business models, but help me see what’s going on in their mind.
  9. genuine in their answer to: “what are you looking for in an investor?”
  10. understand the motivations of professional investors. Without letting it interfere with their vision, they are able to help investors see what success could look like.

It is the greatest privilege of my job to meet amazing entrepreneurs and company builders on a regular basis. When I am lucky I am able to back some great entrepreneurs. At other times I may have let my own smartness get in the way of success. Either way, I know I will succeed mostly because amazing entrepreneurs will find ways to solve int’g and relevant problems in creative ways, and will allow me to partner with them.

Advertisements

What are Resourceful Entrepreneurs (for University spinouts)?

February 23, 2012

Starting a company from scratch is not easy, especially a university startup. I have had hundreds, if not thousands, of conversations with people who have interest in university spinouts and they all point to the many difficulties that they have had to face. The risks stack up high in the face of success: technology is often pre-maturely spun out, translational research, engineering, productization often needs to happen on a startup’s lean budget, and manufacturability and costs are often not even close to thought through when the inventions are typically made and disclosed. Then you layer on top complications of dealing with IP licensing offices, finding early customers, hiring great talent when you have nothing but a professor, passion and some pieces of paper to show for yourself, and then there is the sometimes terrible task of fundraising.

However, there are entrepreneurs, and investors, who just cannot resist the charm of building companies based on university IP.  I think I am one of them as well. I believe in the value of university spinouts and that is why I have chosen to co-organize University Research and Entrepreneurship Symposium (URES) every year. At URES we bring together university technologies & technologists, technology licensing officers, angel/VC and strategic investors AND successful entrepreneurs who are likely looking for the next big thing. WHen these circles overlap, and discussions take place in a frank open manner, good things can happen.

At GC, we continue to believe in university startups for many reasons: its where some of the most amazing innovation happens, usually serendipitously. Our society is built on technological progress that is often initiated by the great thinkers at our leading research universities, and whose work has been partly supported by us, i.e. government. If we believe in taking not just incremental, but quantum steps forward in how we think about and solve human problems, then bringing university research to real world is an honorable and valuable challenge.  And financial rewards are plenty for those who are able to succeed, be in IT, Health Sciences, Energy or other areas.

I belong to the camp that believes that while the probability is high that any single university spinout may not make for a dramatic commercial success, it is also not a total hit or miss game. There are general learnings that have emerged over the many decades of entrepreneurs and investors commercializing university research, and if due/disciplined attention is paid to them chances of success improve significantly.

There is considerable debate in entrepreneurship circles that the university startup creation process is a bit broken (i.e. startups built around core and deep technologies developed through research at universities). For example we often notice:

  1. technologies that are incremental in nature getting spun out as companies when they really should be licensed to existing companies.
  2. wrong mix of technologists, entrepreneurs and investors in earliest days of a company. A giant messed up soup of skills/needs match.
  3. mind-numbing slow process of getting some faculty members to understand that invention is an important, but only a first step in what it takes reach even moderate commercial success.
  4. lack of technologist joining startup as inception who can carry with him/her the entire breadth and depth of knowledge around the topic.
  5. difficulties in navigating the IP licensing process, esp if Tech Licensing Offices are inexperienced, not motivated to license to startups, and otherwise constrained by regulations or laws.
  6. etc.

Every time I think of all the difficulties that most university spinouts face, and then I look at those startups that have succeeded, one thing almost always stands out as stark difference. And that is the nature and quality of the entrepreneurs behind the effort. Successful startups almost always tend to have resourceful, brilliant, creative entrepreneurs. Investors often say that it is the team that is the most important variable in a successful startup, and I agree that its a true statement. But it is nowhere more true than in the case of university research spinouts. At URES, perhaps the most important conversation we can have is around this topic. At this invite only event we invite researchers from across the east coast universities to present technologies that they are most excited about for their commercial potential. And we invite investors to hear those pitches and ideas and build networks…but perhaps an extremely important category of people we invite to this event are the entrepreneurs who have successfully built companies before and are either looking for the next big thing, or are invested enough in the startup ecosystem to provide advice, support and guidance to startups even before incorporation. They bring a tremendous amount of practical wisdom and experience to the table.

I have written some of my thoughts on commercializing university technologies in a blog post elsewhere. But at this year’s URES on April 18, 2012 I will be leading a lunch discussion titled “What are Resourceful Entrepreneurs?”. We will talk about some of the topics I mention above. If you are interested in joining, drop me a note (bz at gcvp.com) and we will try our best to get you an invite. I won’t be doing all the telling. All of you will be. And hopefully we will all come out wiser.


From Bill Warner: “The Key Is Backing Founders Who Intend to Change the World”

May 2, 2010

Bill Warner, a noted entrepreneur, mentor and angel investor recently wrote this to encourage founders of startups who are going after big ideas – who want to change the world. I agree very much. Life is too short, and stakes too high, to nibble at the edges of innovation. Get in there, find big/hard problems to solve, and make it happen.

I believe that the very heart of innovation comes down to founders who intend to change the world, and those who back them and help them achieve the impossible. I’ve been moved recently by the stories in Googled by Ken Auletta. We all know about Google’s meteoric rise, but what wasn’t clear to me before reading the book was what a crucial role people like Bill Campbell (of Intuit) played in helping the founders stay true to their vision and still get the management help that they needed to create the giant company that Google has become.

And then he also goes onto give some practical advice for Boston entrepreneurs. I high encourage you to read his entire blog post and the discussion in the comments section.

Jason – Fair enough. Inspirational messages seldom do list the actions that go with it. Here are some.  For one, I take the action for myself. I plan to find and back founders who intend to change the world. And I’m finding that those people are out there. Then the action items are to help them make it happen.

I don’t believe that entrepreneurship is like basketball or playing the violin. Thousands of hours of practice doesn’t make you good at it. Diving in with your heart and listening, learning, and following your instinct and mixing that with some killer logic is what can make you win. Convincing great people to help you can make you win. Great entrepreneurs rarely have a fantastically practiced “3-pointer”. They have something else. They have the drive, the courage, and the instincts to change the world. Frankly, they often only know a little. What’s really exciting is what they will learn along the way.
Action items:
1. Get more angels.
2. Get more super angels.
3. Get people to think big, and play big.
4. Get people to realize that big ideas can start small and take root.
5. Make more connections between students and local winners
6. post the huge list of action items that came out of session at Nantucket with Diane Hessan, Colin Angle and Michael Greeley
7 Here’s a sample that the group came up with (in a fast shout-out that took only about 5 minutes:)
galvanize angels,
role models to give back,
more risk taking,
stop thinking about small exits,
feeder system for ideas,
more mentors for wannabe entrepreneurs,
more professional seed investors,
connect colleges and talent,
unlock IP at universities (like MIT has done),
invest in consumer companies,
celebrate buying (rather than selling) companies (ie Kayak’s acquisition of CA-based company),
help young women take entrepreneur leap earlier in life,
inspire and galvanize younger generation,
respect (rather than patronize) digital natives (aka young generation),
richer counter culture outside business (ie Fort Point Channel),
fund really big ideas,
affordable housing,
promote successes,
make it cooler to be an entrepreneur in MA,
cooler to join start-ups,
more collaboration amongst start-ups,
less of a “club” and more inclusive of early,
Boston-based “Lunch 2.0”,
business plan contest to connect Media Lab and non-MIT students,
more investing outside 128,
focus on density,
more access to Ray Stata,
aggressive recruiting of talent from outside, diversity —
Boston is close to Europe,
differentiation — what is our identity, work from our own identity,
more engagement with developing world,
why is healthcare underrepresented at this conference?,
more focus on healthcare and biotech,
more invention that crosses technologies,
get universities to collaborate on mentoring program across schools,
“type 2 angels” to focus on getting triples to home runs (Bill Campbell did that for Google),
raise the stakes, more events like this,
returns data suggests that East Coast funds seem to outperform,
better exposure to how we really compare,
recycling talent,
investing for IPO and big company rather than for acquisition and easy exit