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

Cut it out, or the impossibility of completeness

Nothing is really complete. That story always needs more context to fully understand, that lesson is inevitably missing something important, that job could always be more polished.

With some things (like painting and decorating), we face the law of diminishing returns: more effort results in less and less improvement. There comes a point where going beyond ‘good enough’ is wasteful.

Other things – presentations and teaching in particular – go beyond diminishing returns to decreasing returns: more content undermines what’s gone before, and reduces the impact you hope to have.

By recognising and accepting the impossibility of completeness – you will never be able to say everything – you free yourself up to focus. Not “What is everything I want people to know?” but “What is enough for today?”

Cut. The. Rest. Out.

Get this right – get clarity, simplicity and focus – and those you’re serving are far more likely to listen, engage and understand. And to come back for the next chapter.

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.

Machine. Ecosystem. (6) – Kevin Kelly on the techium

Okay, so machines are simple, largely linear, and predictable, and systems are complex, adaptive and ‘dispositional’… but look a bit closer and the distinction gets blurry.

Most systems (individual people, markets, forests to name three) are combinations of sub-systems that are, at the end of the day, made up of simple units. And our machines – especially digital ones – are increasingly complex and interconnected. Even our simplest machines don’t really stand alone – they’re outgrowths of human activity, the product of networks of ideas, activities and resources that allow them to develop, grow, and – if they’re not maintained – fall into obsolescence and decay.

Kevin Kelly calls this the techium*, and describes it brilliantly in What Technology Wants:

Once [19th century economist Johann] Beckmann lowered the mask [of technology, by uniting various arts and sciences under the term technologie], our art and artifacts could be seen as an interdependent components woven into a coherent impersonal unity.

Each new invention requires the viability of previous inventions to keep going. There is no communication between machines without extruded copper nerves of electricity. There is no electricity without mining veins of coal or uranium, or damming rivers, or even mining precious metals to make solar panels. There is no metabolism of factories without the circulation of vehicles. No hammers without saws to cut the handles; no blades without hammers to pound the saw blades. This global-scale, circular interconnected network of systems, subsystems, machines, pipes, roads, wires, conveyor belts, automobiles, servers and routers, codes, calculators, sensors, archives, activators, collective memory, and power generators – this whole grand contraption of interrelated and interdependent pieces forms a single system.

When scientists began to investigate how this system functioned, they soon noticed something unusual: large systems of technology often behave like a very primitive organism. Networks, especially electronic networks, exhibit near-biological behaviour.

Kevin KellyWhat Technology Wants (amazon)

In our organisations, this way of seeing helps us to think about the machines we buy buy of the networks of activity and supply that are necessary to maintain them and run them well – a way of thinking that’s probably automatic in the manufacturing and computer industries, but comes far less naturally in the social sector.

Something as simple as buying a new computer or printer isn’t just that simple. It’s introducing a new organism into an ecosystem, and will require our teams to do the work of acclimatising and adapting to make it really useful. The more complicated or relational a technology is – social media being a prime example – the further the adaptation and unintended consequences go.

*as distinct from specific technologies

Leadership: don’t say it

You may have a very good point.

You may be entirely in the right.

It may be that you’ve understood their (bad) motivation perfectly, that they are wrongheaded, inconsiderate and rude to boot.

It may be that there’s a values-conflict that’s going to take a lot of deep and difficult work to address.

Some of the above is probably true. All of it may be true*… But saying it to them now – saying it how you’d most like to say it, maybe throwing in a few of the things that you’ve been carrying for a while – saying it now, in the heat of the moment, won’t help.

Grit your teeth. Breath deeply. Don’t say it. Instead do the harder work of fixing the deeper issues and slowly, slowly getting the boat moving in the right direction.

 

P.S. Of course, I said it. 

*And of course, it’s just possible that many of them are not true, or that you need kick in the empathy to know how to respond properly

Caterina Fake: 5 Cs

If you look at all of the companies that I’ve been involved with and the investments that I’ve made, they are companies that emphasise creativity, communication, connection, collaboration and community.

Caterina Fake – Tim Ferris Show #360

Caterina Fake co-founded Flikr, where they popularised – newsfeeds, tags (which later evolved into hashtags), followers and likes. She played a key role in the development of Etsy, Kickstarter, and a many others besides.

These five Cs are values that she describes as being key to the success of her projects.

What role do they (could they, should they) play in yours, not just for you and your team, but for your partners, donors, customers, clients?

How tools spread

How do tools – ideas and understandings, practices, and real physical tools – get to the people who need them?

Some tools may only need to be seen to by copied and spread. A tool will spread if it is:

  • Visible – people need to see it (or hear, or read about it)
  • Beneficial – people need to see that the tool brings benefits too
  • Acceptable – isn’t in some way taboo*
  • Doable – simple enough to understand and apply
  • Accessible – people can get hold of what they need to start using it
  • Affordable – in terms of the physical, mental and emotional resources** and time needed to learn or use the tool

Further reading:

*Taboos may prevent one or both of the first two from happening
**”Can I afford the social or emotional costs of using this tool? Is it worth it?”
***The copyright section of which reads as follows:

You have permission to post this, email this, print this and pass it along for free to anyone you like, as long as you make no changes or edits to its contents or digital format. In fact, I’d love it if you’d make lots and lots of copies. The right to bind this and sell it as a book, however, is strictly reserved.

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?

Computers marching towards us

Computers have been on a steady march toward us. At first, computers were housed in distant air-conditioned basements, then they moved to nearby small rooms, then they crept closer to us perched on our desks, then they hopped onto our laps, and recently they snuck into our pockets. The next obvious step for computers is to lay against our skin. We call those wearables. … You may have seen this coming, but the only way to get closer than wearables over our skin is to go under our skin.

In the coming decades we’ll keep expanding what we interact with. The expansion follows three thrusts:

1. More Senses

… Of course, everything will get eyes (vision is almost free), and hearing, but one by one we can add superhuman senses such as GPS location sensing, heat detection, X-ray vision, diverse molecule sensitivity, or smell. These permit our creations to respond do us, to interact with us, and to adapt themselves to our uses. Interactivity, by definition, is two way, so this sensing elevates our interactions with technology.

2. More intimacy

The zone of interaction will continue to march closer to us. Technology will get closer to us than a watch and pocket phone. … Intimate technology is a wide-open frontier. We think technology has saturated our private space, but we will look back in 20 years and realize it was still far away in 2016.

3. More immersion

Maximum interaction demands that we leap into the technology itself. That’s what VR allows us to do. Computation so close that we are inside it.** From within a technologically created world, we interact with each other in new ways (virtual reality) or interact with the physical world in a new way (augmented reality). Technology becomes a second skin.**

Kevin KellyThe Inevitable

** Think about this – computers outside and a long way away from us, then closer and closer, then inside us – and then we’re inside it. Does this in fact happen with more technologies – and is it true of our environment as a whole?
*** Of course, technology has been a second skin for millennia – that’s what clothes are.****
**** Starting with animal hide – literally, a second skin.

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