Archive: Sep 2020

Misinterpreting “Mission”

Photo by Shaah Shahidh on Unsplash

At Spero Ventures, we’re a single bottom line venture fund: we measure ourselves by our return to our LP.

At the same time, our investment thesis is that we invest in the things that make life worth living: well-being, work and purpose, and human connection. That means we invest in mission-driven founders.

The idea that mission and profit can be tightly bound together is unfamiliar to some people. They ask one of two questions:

  1. How can you be a single bottom line investor and say you invest in mission-driven companies? You have to measure the “impact” the company is having with different impact metrics.
  2. Oh, so you invest in mission-driven founders—that means you’re okay with sub-commercial returns, right?

AAAARGH!!

The company, by performing its core function, should take you towards your mission. And if you have a mission, we believe you will be substantially more successful than if you were not mission-driven.

The words “core function” are doing a lot of work here.

eBay’s core function is to connect buyers and sellers to execute a transaction. By performing their core function, they are fulfilling their mission of enabling economic opportunity around the world. Every transaction on eBay contributes to the mission of giving buyers and sellers agency to live the lives they want.

Tesla’s core function is to manufacture and sell electric vehicles. By performing their core function, they are fulfilling their mission of accelerating the world’s transition to sustainable energy. Every car they manufacture and sell is making the world better by being one more car that uses clean power.

WhatsApp — does this seem like an odd one? It’s not. By performing their core function, they are fulfilling their mission of letting people communicate anywhere in the world, without barriers. Every text, video, and phone call on WhatsApp, whether across ten thousand miles or ten miles, is democratizing access to human connection by making it free.

In contrast, a company like Toms Shoes might be making an impact, but their core function is to sell shoes. The fact that they happen to give to charity is a nice-to-have — it’s not part of their business model; it’s a marketing tactic. They are not a mission-driven company even if they use marketing language about “improving lives.”

Mission is not off to the side. It’s the very heart and soul of the company. It’s the product, it’s the marketing, it’s the company.

And because mission is core, the bottom line is the only thing you need to measure. Tesla doesn’t measure impact separately from its bottom line, because having more Teslas on the road is the impact. At a mission-driven company, when people buy and use your product, your bottom line is going to grow, and there’s a direct connection from mission to the bottom line.

At a true mission-driven company, the business model itself makes life worth living. And we believe those companies have the highest chance of success.

Here are three companies from our portfolio that exemplify this:

Skillshare’s core function is to allow teachers and learners to connect around their creative passions. By performing their core function, they fulfill their mission of inspiring and multiplying creative exploration that furthers expression, learning, and application.

Gencove’s core function is to extract valuable genetic information through low-pass sequencing. By performing their core function, they fulfill their mission of making whole genome sequencing a bedrock of decision making by making it accessible and accurate.

Core’s core function is to get people to stick with consistent meditation and mental health practices. By performing their core function, they fulfill their mission of cementing mental well-being as a pillar of our lives.

Mission can be very beneficial to your company:

  • Your mission is your north star for decision making. Any time there’s a big strategic question, asking yourself whether it takes you towards or away from your mission can help you answer it.
  • It attracts people who believe in the mission: whether it’s co-founders or employees, these are people who are also driven by wanting to see the world be different and to have a direct hand in making this company come to life. It has some side benefits where you don’t have to pay them big company salaries in order to attract them because they are passionate about what they are building and will be more than a cog in the wheel of a large enterprise.
  • Every startup is a rollercoaster. Regardless of how much we want to believe it’s all up and to the right, there will be moments of intense stress and existential angst. When everything is going to shit, you can hold on to your mission and know why you are doing this and use this to motivate yourself and everyone at the company.
  • Customers have started to care about which companies they patronize. If you think about your customers as co-creating the company with you, they will become part of your “cult”.
  • Board of directors: If you’ve had a choice on who funds you and who joins your board, then you could pick investors and directors who are aligned with your vision of where you want to go and what you want the company to become. A clear mission gives you a stronger way to unify them. This is important since they can have a big influence on the strategic choices you make.

At the same time, it’s important to know the place and role of mission in the company.

A great mission without a great business model means very little. Do you have an exceptional business model? At the end of the day, this is the most important aspect of any company. If your business model doesn’t work, the company is going to fail.

This means you shouldn’t put mission ahead of money. They walk hand in hand: If you don’t have a good business model and cannot generate money to survive, you will go out of business. If you go out of business, you won’t accomplish your mission. Game over.

I’ve seen some mission-driven founders treat making money like it’s a bad thing, or making the mission primary and delaying coming up with a revenue-generating model that is sustainable. Mission and business model have to be developed in concert. Fulfilling your core function should generate revenue and move you towards your mission.

In pursuit of that successful business model, you may need to redefine your mission—or achieve it in a creative way. “Purity” of the mission is a false god. You can keep your priorities intact while changing what you do about those priorities. Much like how a film is rewritten when it’s edited, the details of your mission will morph as you find the best way forward.

So ask yourself: Do I care enough about this mission to work hard for the next 10 years? Missions are motivating. Companies are slogs. There is no company that just grows “up and to the right.” Most are nauseating rollercoasters where the highs hopefully compensate for the lows.

But, if you have a mission, with a fantastic business model, where the core function of the company is going to make life worth living, then that is a jewel.

Founder-Market Fit Matters More Than Ever

Photo by Tekton on Unsplash

These days, practically anyone can start practically anything. If you have a sliver of pedigree1, like experience at a reputed company, it becomes even easier.

But as tech permeates everything, people are starting companies in industries they don’t know. In other words, they’re founding companies as outsiders, without strong founder-market fit.

And that’s fine. A fresh perspective is often a huge help. But many industries are complex. The incentive structures, local laws, and nuances about who wins and loses are not obvious from the outside, or even after several conversations with those in the industry. Today, there are over 1,000 seed funds—capital is flowing freely. You will get funded, but that doesn’t mean you’ll find product-market fit, and then get to scale. At any given time, there may be 5-10 companies tackling a similar problem. This is where a founder’s knowledge or experience in the industry is a real advantage.

As my colleague Jonathan Kroll put it:

“The bar has never been lower to build a product. 10 years ago, you’d need millions in investment to have some sort of rudimentary machine learning or computer vision capability. Now, this is all off-the-shelf.

This is amazing! Right?! Well yes, it is—but as a result, building a cheap product with amazing functionality is at everyone’s fingertips. So while amazing products with amazing features could have been the major source of differentiation in the past, today, that’s just not enough.”

Founder-market fit is an advantage because:

  • These founders get to asking the right questions quickly.
  • If they don’t know the answer, they know who to call in the industry to get the answer.
  • “Founders who know exactly what their market needs,” in terms of leverage to move the needle, “might meet those needs faster and in a more capital-efficient manner, therefore extending runway and giving themselves more time to experiment,” said my colleague Sara Eshelman.
  • They understand the incentive structures, and so know how to position their company in the most appropriate (read: unthreatening and helpful) manner to the relevant constituents.
  • They know local laws and where they can push and where they can’t.

Founder-market fit is not developed only by having worked in the industry. You can also be obsessed with a problem in that industry and immerse yourself in it before you find a solution that works.

One example of this is Filip Victor. Filip is the founder of our portfolio company Mati, which is focused on identity verification. He came to the US as a student and faced the challenges of an immigrant: not being able to get credit and not being able to verify his identity with many of the commercial entities that you need to live a life with agency. This led him to spend time learning about the space to try and solve the identity verification problem for people in the developing world.

Another example is David Zamir at Nana. During a tough moment in his life, he taught himself to repair appliances, going out to customers’ homes to fix their washing machines in order to have an income. This led him to create an appliance repair marketplace that trains technicians and enables them to craft their own livelihoods.

Founder-market fit is real when a founder knows enough of the market to see a real opportunity, while knowing how hard it’s going to be. At the same time, founders need to have a bit of rebellion, a bit of chuztpah, a bit of “fuck it, this may really work,” a bit of willingness to upset former colleagues, boldness, and the ability to envision how things could be. That’s when they can take the leap and build a company that could be amazing.


  1. This is a problem and it is exclusionary, but it is also how the world currently works 

Brave Space

The poem, An Invitation to Brave Space, was shared during Back To School night last week, and everything about it resonated with me.

I’ll call out the three sentences that spoke the most to me and why.

Together we will create brave space

By the very fact that we live, we collect baggage. Proof of life is found in your scars. Never all good, never all bad, but sure to happen. Physical, mental, emotional. And instead of shielding ourselves from the things that make us who we are, we show up with them, bravely.

We have the right to start somewhere and continue to grow

Authentically looking at yourself, figuring out where you are on all spheres, accepting it and determining where you need to grow is the most important thing anyone can do.

To do it well, we have to recognize that none of us know everything. And to learn and grow, we have to be willing to learn from those whose voices we don’t hear all the time.

I wrote a short tweetstorm about how creators need to turn down the volume of the outside world. It’s important to be able to hear your own voice to figure out who you really are.

We will work on it side by side

Nothing is ever perfect. What matters is the willingness to commit to your teammates and colleagues, to commit to moving things forward. To work towards a more accepting, demanding, understanding, exceptional, constantly improving space. Together.

The questions that matter

Photo by Evan Dennis on Unsplash

In my experience, the best leaders ask the questions that matter. And the questions that matter are the key to driving the organization forward.

As the founder or leader, you’re in a unique position with a wider, more all-encompassing perspective. You can see the vision of where you need to be in 3 years and in 5 years, the reality of your bank balance and fundraising, and the sense of the morale of the organization. You’re the only one with all this information floating in front of you as you chart a path forward.

What do you do with that?

The best leaders use their unique position not only to make objective observations on the state of the business, but to determine the right questions to ask the team. They use these questions to guide the organization towards the most important goals.

Imagine a product team that has spent the last few weeks designing a feature. They’re excited to present it to you. It’s a great feature — but based on where things stand, it’s not the highest priority. While you know that, you have to communicate it in a way that’s productive.

This is where you ask the questions that matter. By asking the right questions, you won’t just tell people what you see; you’ll help them see it, too. You’ll keep them on track while keeping them motivated.

A few of the questions that matter, in this example:

  • Is this the most important feature we need in our product to achieve our goals for the next 6 months?
  • And if not, why were we spending time on it?
  • Where was the gap in the communication that let these resources get get spent on this?
  • Is there a faster way to get this live (that may involve manual intervention) in order to get it out there?
  • Is there a more cost-efficient/scalable/robust solution?

Instead of command and control, questions help the team think for themselves. It’s the Socratic method for effective orgs. The caveat is that in an emergency or a time crunch, being directive is fine. It may be needed. But organizations that always rely on one person to make decisions end up paralyzed and ineffective.

I once worked with a senior leader who did exactly this. If someone came to her saying a deadline “could not” be met, she’d find the right people and ask the questions that mattered. By doing that, she’d help people figure out how to circumvent the bottleneck. She ensured that the things that moved the company forward, moved forward. It was amazing to see how “impossible” things, once she’d pinpointed the right questions, got done.

The same is true for investors. I find the best investors ask founders questions that make them think about the world differently, change the lens, expand the set of options in front of them with an interesting re-frame.

Asking the right questions indicates a level of thought, knowledge, and facility with the world you are dealing with. A leader asking the right questions can help an organization come up with creative solutions, hit their goals, expand their view of the world, grow to become more self-sufficient, and by doing so, move the organization toward that long-term vision.