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Marc Andreessen: the test

More from Marc Andreessen’s brilliant interview on The Moment with Brian Koppelman. This time: how breaking into the network in order to get funding isn’t so much a symptom of cronyism as a test of fundamental attributes that a fundraiser will need to be successful.

Marc: In the financing business, like, we are dying to finance the next great startup. Like, people talk about like venture capitalists; it’s you gotta run on these gauntlets to do it or like it’s so, you know, they fund all this…you know, we’re dying to fund the next Google. Like, we can’t wait. So just for god’s sake, figure out a way to build it and bring it to us. Please!

Brian: Right. Though, to get to you, somebody has to be credibly recommended to you.

Marc: Okay, so then this gets to a concept that I talked… So this goes directly what we’re talking about. So you described the process of getting you to read somebody’s screenplay. And basically it’s they have to be a referral. There should be some sort of warm referral.

Brian: Either a referral, or the only other way is over a period of time, you’ve impressed me somehow yourself.

Marc: Yeah, exactly right, independent of this specific thing that you’re trying to create. So, it’s sort of a very similar thing in venture, which is, I mean, there are certain people where it’s just like, the reputation precedes them, and they want to come in to pitch us, we’re gonna take the pitch. And some of those people, by the way, you discover on Twitter. Like, so that’s a real thing.

But more generally, it’s a referral business. And I figured this out early on, when we were starting, I talked to friends of mine at one of the top firms in the industry that’s now a 50-year-old venture firm, one of these legendary firms and they said, in the entire history of the venture firm, they funded exactly one startup pitch that came in cold, right, over 50 years. Now, they funded like a thousand that came in warm and they funded one that came in cold.

And so anyway, so that’s like, okay, well, again, isn’t that unfair? Like, okay.

So that’s why I get into what I call the test, with a capital T, The Test. And The Test is basically, the test to get to us, to get into VC is can you get one warm introduction? Just one. And in our world, you know, your world is agents or whatever or other creatives — in our world it’s an angel investor, it’s a seed funder, it’s a professor, it’s a manager at one of the big existing tech companies, right?

Brian: Someone you think is smart.

Marc: Yeah, somebody I think is smart.

Brian: And knows people.

Marc: But there are thousands of those people out there who I will take that call for.

Brian: Like, I could call you and tell you, but somebody… By the way, I won’t. Let me just say, clearly, I will not!! <laughs> But you have this world…

Marc: You could. Somebody, like, if a director of — I don’t know, there’s like, 1,000 executives at Facebook; Facebook is like a 40,000-person company, it has like, 1,000 executives at Facebook in decision-making capacity — if any one of the thousand calls up and says, “I got this kid I think you should meet.” It’s like, “Yes, I’ll take that meeting.” So it’s like, and again, it’s just one, right?

And so the test is, can you get one person to refer you, right? And it’s like, okay, like… think of the number of ways you could get one person to refer you, you could go get a job and you could go impress a manager and then that manager makes the call.

Brian: That is an incredibly good test, by the way.

Marc: And if you can’t pass the test, The Test, to get a warm inbound referral into a venture firm, then what that indicates is, you are gonna have a hell of a time as an entrepreneur. You are gonna hate being an entrepreneur because guess what you have to do, once you raise money. We’re the easy — I always say like, we’re the easy part of the process.

Once you raise money from us is when the pain begins. And the pain is trying to get other people to say yes to you. The pain specifically is trying to get people to work for you. And they all have choices, right? And so you got to convince them to come work for instead of somebody else; to try to get a customer to buy a product, and the customers are overwhelmed with new products they could buy… and so to actually sell something to somebody. And then at some point, you’re gonna have to raise money again, right? And you raise money from new people each round. At some point you’re gonna have to go get somebody else to say yes.

And so, if you can’t get a warm inbound to us, how are you possibly going to be able to function in the environment in which you’re now gonna be operating, where you’re gonna have to get all these other people to do stuff for you. And so that’s the thing.

Marc Andreessen and Brian Koppelman
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Ben Horowitz – The Hard Thing About Hard Things

This is a great cut-the-crap book about management and building a company. It’s most relevant to the the tech world, but there are plenty of gems here that are relevant to anyone – he’s especially good on shaping your culture (hint: yoga at work is not your organisational culture).

Here’s the introduction:

Every time I read a management or self-help book, I find myself saying “That’s fine, but that wasn’t really the hard thing about the situation.”

The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.

The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things.

The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed.

The hard thing isn’t dreaming big. The hard thing is waking up in he middle of the night in a cold sweat when your dream turns into a nightmare.

The problem with these books is that they attempt to provide a recipe for challenges that have no recipes. There’s no recipe for really complicated, dynamic situations. There’s no recipe for building a high-tech company; there’s no recipe for leading a group of people out of trouble; there’s no recipe for making hit songs; there’s no recipe for running for president … and there’s no recipe for motivating people when your business has turned to crap.

That’s the hard thing about hard things: there is no formula for dealing with them.

Nonetheless, there are many bits of advice and experience that can help with the hard things.

I do not attempt to present a formula in this book. Instead, I present my story and the difficulties that I have faced.

…

I share my experiences in the hope of providing clues and inspiration for others who find themselves in the struggle to build something out of nothing.

Ben Horowitz – The Hard Thing About Hard Things

Highly recommend.

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The soft option

Your desire to be generous to others is a great motivator to excellence: if you’re serious about ensuring that the externalities of your project are consistently positive, you’re going to need to be doubly good at what you do.

You need emotional energy and time to spare to listen well, to be gracious under pressure, to be the kind of employer or customer that helps your team or partners to do their best work.

It takes discipline to do this kind of emotional labour day in, day out. You need to be clear about what you’re doing and how and why, plan for it, and be deliberate about doing it consistently. You need to find ways to articulate your values to people inside and outside your project.

You need to be hard-headed about being soft-hearted.

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Move it on

We eat elephants of different shapes and sizes. But most of the time, doing most of the things that matter, we’re eating elephants:

  • learning a new skill
  • growing a friendship
  • running a household
  • recovering
  • building an organisation
  • bringing up children
  • staying married
  • serving a country
  • paying off a mortgage
  • writing a novel
  • being a neighbour

It’s easy to feel stuck with things like these, because they’re never done. But in all of them, we can go backward (this includes stasis) or move forward (which is a prerequisite for stability).

I’ll post another day about the meaningful goals that help with forward motion. For today – and there’s less than an hour left of it – suffice to say that sometimes the thing to do with elephants is just to show up regularly and take a bite or two.

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As powerful as a smile

Real marketing is built into what you do and why you do it. It’s part of your story, something that you do organically when your business is aligned with your mission and values. Kept promises, free returns, obsession with the details, returned emails, clean tables, and attentive staff – all of this is your real marketing.

Real marketing creates a deeper impact, leaves a lasting impression, and is as powerful as a smile.

Bernadette Jiwa – The Fortune Cookie Principle

Why do people come to you for the thing you provide?
What do they get? Why do they want it? How does it make them feel?
What makes them come back?
Do they tell other people about you? What do they say?

What do your actions / words and tone of voice / website / way you dress / your office / commitment to doing things well say about who you are and what you’re doing? Do they say the same thing?
For a non-profit organisation, do you smile at your donors and your clients in the same way? (you should)
Are you an example of these things for your team? How do you articulate them to the team, to new members, to partners?

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The Commitments (1):

Some things worth committing to:

  • to service and impact for human-flourishing (vision, clarity and focus, outcomes more than processes, sustainability);
  • to getting better every day (being a pro, showing up, learning, a path to making things better rather than shortcuts and hacks);
  • to generosity and investing in others (kindness, sharing what you know, teaching and training);
  • to a strong and evolving business model (planning, experimentation and iteration);
  • to leadership and good management (executing well and running an effective team or organisation);
  • to doing the money part well (financial management);
  • to marketing and communication (so that the right people know the right things about what you do, and so that change happens and sticks);
  • to building a network (so that the right people are working with you for change, with the right resources);
  • to seeing the future and finding new tools (because effectiveness is a moving target);
  • to having fun along the way (pow!)

Anything I’ve missed?

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Compound interest

We all know about compound interest in the world of money. Save £100 a month for thirty years at one percent interest** and you’ll have a little under £42,000 by the end of that time (compared to £36,000 at zero-percent).

Make that investment at 5% and suddenly you’ll hit £83,000.

10%*** makes almost £228,000.

It takes time, and the commitment to building something steadily. No tricks, no promises of outrageous returns, a degree of risk – but not when compared to not investing at all.

What if the interest we seek for our work – attention, respect, partnership, remuneration – could compound in the same way? Often it seems that we’re after a flash in the pan (Viral. Now.), or that we’re not building anything consistently at all.

Starting with almost nothing, drop by drip, brick by brick, little by little, we can build a mountain.

** 1% annually, calculated monthly

*** A reasonable return from a stocks-and-shares index fund

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Stan Lee (1922-2018) – What If?

The exact cover of the Marvel What If that Dave’s brother kept in a plastic folder


Stan Lee was brilliant and prolific.

We know him for Spiderman, the X-men, the Avengers, the Fantastic Four, Black Panther… for being the driving force behind Marvel Comics, now a multi-billion dollar, multi-media juggernaut.

It’s less well known that he started in the comics industry in 1939, aged seventeen, as a general dogsbody, lunch-fetcher and inkwell filler at Timely Comics (which would eventually become Marvel).

Lee must have had something about him – he became editor at 19 – but here’s the thing: he slogged it out writing comics – westerns, crime stories, horror and superhero work – for twenty two years without really hitting the big time. They say he chose Stan Lee as a pen name because he was worried he’d be embarrassed by his work in comics if he ever wrote the Great American Novel.

By the early 60s Lee was fed up, and ready to quit. The Fantastic Four was a last throw of the dice on his wife’s suggestion that he try writing the comics he wanted to write. There was nothing to lose.

He was forty-one years old.

The rest is history.

What if Stan Lee had never written the fantastic four?

Some takeaways:

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Starting line

Where’s the starting line?

Sometimes we’re a few steps further down the track than the people we want to take with us:  we’ve given it more thought, we’ve done it before. We want it more.

We’re so keen to get people over the finish-line that we don’t notice that they’re still milling around at the start – or even that they’ve chosen to stay in bed.

How far away are you? How many steps backward will you need to take if you want to take them with you?

What do you need to communicate? What are the thousand other important things that you don’t?

When are you going to stop talking about techniques for crossing the finishing line and help them to put on their shoes?

 

*see also: Clarity. Simplicity. Focus.

 

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Stay on target

stay on target

*Disclaimer: This post, originally lost in the Crocapocalypse, was only recently discovered sealed in an earthern jar in a cave near the Dead Sea. The post is intact, but some formatting (especially spaces) may have gone missing in action.

I sat down to write a post.

Saw the viewing stats for driverlesscroc looking interesting and inviting.

Hovered over.

Paused.

There!

Catch yourself in the pause – in the gap between stimulus in response.

Mind the gap.

Mind in the gap: why did you come? What is this for?

Divert.

Stay on target.

Look!

The gap just got bigger.