Perspectives

Who are you?

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Every August, US filmmakers rush to make the Sundance Film Festival deadline. And in early December, Sundance announces its lineup. The day before, everyone is equal—all aspiring filmmakers. But the moment Sundance announces, the wheat is separated from the chaff. There are those who will have a film that “premiered at Sundance,” and… there are the other mere mortals. Both groups will now be treated differently as expectations start to diverge.

While companies are less of a lemming-like march to the cliff than film festival applicants, similar rules apply. After a company goes down in flames, or after you get fired, the same thing happens. The very next day, there’s a sense that you’re a different person.

In both cases, I see a similar pattern: people define themselves (and each other) in terms of their successes and failures. But both success and failure are transient and ephemeral. They can both be taken away, forgotten, or overcome. Successes and failures aren’t who you are.

Perhaps, instead of letting successes and failures define you, define yourself according to something no one can take away, something you cannot lose.

If you can lose your job, you are not your job or your job title. If you can lose company, you are not your company. If you always need permission to create or make a film, you are not a creator or filmmaker.

A couple of years ago, someone asked me if I would view myself as a failure if I failed at my job as a venture investor. My answer was yes. I explained that my job is a huge part of who I am, and if I fail at it, yes, I would be a failure.

Since that conversation, I’ve come to a more nuanced view of the world. I wouldn’t say to a founder, “If your company fails, you are a failure.” Quite the opposite. You are not your company, and regardless of whether you took it public or closed it down, you are separate from the entity that is your company.

So, if not by those ephemeral things, how can you define yourself?

  • Instead of defining yourself according to your job description, you can think about characteristics like persistence, compassion, and thoughtfulness.
  • Instead of defining yourself according to successes and failures, you can look at the chances you choose to take. There are second chances, there are third chances—but they only exist if you don’t give up on yourself, and if you actually take them.
  • Instead of defining yourself according to your ego, you can think of yourself as someone who’s always learning.
  • External validation is the bane of humanity. Fuck external validation.

Despite the transience, we let success and failure have such a huge impact on us. Depending on how we deal with it, they can change our life trajectories. But these things still aren’t who we are. Who you are is the amalgam of personal characteristics that make you up. It’s what you learn from success and failure. It’s how you deal with it, and what you go on to do with it. That’s what no one can take away from you, and that’s what makes you who you are.

Momentum vs Conviction

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Among the many reasons why it is challenging to be a founder, there is this quirk of the venture business — there are a lot of investors, and it is tough to figure out who is the right one.

One axis of the decision-making model is what I think of as Momentum vs. Conviction.

One way you can identify the momentum species is if they ask the magic question: “Who else is in the deal/round?”

Momentum investors are driven by the trend du jour. They often show up when:

  • The round is oversubscribed and the company operates in a “hot” space
  • Participating in the round will allow the investor to be part of an “in group” of “top tier” VCs
  • The investor missed the last hot company in this space and is prepared to do anything to get into the next one (this is one sad reason VC bubbles form)
  • There’s a great/famous VC leading the round
  • A great/famous VC led the last round

It seems obvious that this isn’t the kind of investor a founder wants. But in the moment, it is really difficult to say no to someone who is persistent, especially when you’ve been laboring away at your product on starvation wages for years. The attention can also be fun. For the moment, everything’s great, you’re hot, and dollars are flying at you. 

The question in your mind may be: So what? What if they’re in the company for the wrong reasons?

The answers unfortunately only emerge over time:

  1. In future rounds, they will be unable to come to a decision on whether or not to fund you based on how you’re actually doing. They seek external validation from the market and cannot think through the nuances to figure out where the market is going and how you can play a role in the market
  2. Their term sheets can often cause trouble. If the deal is hot, they may overprice it (and then later yank or revise it if the deal cools). High prices driven by the perception of being “hot” can often lead to downstream issues in future rounds (but that’s a whole different post).

Momentum isn’t the only way to make investing decisions. Someone could also invest in your startup based on the conviction that your company represents the best approach in a space they understand and care about. Here are some of the signals of conviction investing:

  • They want to learn about the company and the space
  • They admit when they are learning and how much time they need
  • Rounds can move fast, but these investors will want to do the work to get to comfort regarding the industry, the company, the founder, and all open issues
  • They almost never ask the dreaded question “who else is in the round”, because they’re basing their decision on their work.

It’s fantastic to be a hot company, but if the music stops, and if you cease being the next hot thing — you want a conviction investor at the table with you. 

On Picking Tough Challenges

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No one would call Maynard Webb a pussycat. He joined eBay when the technical infrastructure was failing. He was critical to fixing it and making downtime a thing of the past. Anyone who has worked for him would say he was their toughest boss. He was full of pithy Maynardisms that all basically meant, “Stop whining and get back to work.” He was a force to be reckoned with.

Many years ago, in one of our ongoing mentoring sessions, Maynard said something like, “Whenever you’re faced with a career choice, pick the toughest challenge.”

He explained that if you choose an easy problem, you know you can fix it. But, many other people in the world can fix the same problem—there’s nothing unique about the accomplishment. If you choose a really tough problem, you may fail, but if you succeed, then you’ve done something pretty darn hard. That would be rare air.

This is one of those pieces of advice that sounds great. It’s aspirational; it’s the hero’s journey; it’s inspirational. From afar, it all looks and sounds glorious, but the daily reality can be painful. And the chance of failure is extremely high. You’ll work long, hard hours for years, put your lifeblood into something, and likely fail. Not easy.

Founders have self-selected into the toughest path in front of them. The alternatives abound. It would be so much easier to go work somewhere else—somewhere where you’re a member of a team, where many hands make light work, where a decision will not fundamentally affect the success or failure of the company, where the buck doesn’t stop with you.

But the small chance of success is alluring. What if you’re the one to pull it off? You crush that job, or you create that unique company. The highs of that are incredible.

And that is why we are all in tech.

Hoarding, Investing, and Diversifying Time

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When I was a child, I’d get a monthly allowance. In order to get the next month’s allowance, I would have to account for how I spent or saved what was given to me, down to the paisa (the Indian version of a cent). I had a pink spiral notebook that I would show to my father in order to get a fresh infusion.

Whether our parents teach us about money or we learn it elsewhere, the overarching message is all around us: “Be careful with your money.” What if we thought about time the same way?

Let’s take some of the concepts of money and try to apply them to time.

Hoard: When a resource is precious, we hoard it. This is to give us a sense of comfort that it is there when we need it most. Hoarding started off as a synonym for saving, but has now come to be viewed as excessive, with a negative connotation. Still, when I saw this quote on a writing blog, it resonated with me:

“In order to excel at anything, and this includes writing, you must hoard the time needed to accomplish that excellence.” DL Black obviously hoards that time. Just like Michael Jordan hoarded his practice time, Mother Teresa hoarded her humanitarian time, Neil Armstrong hoarded his preparation time for the moon landing, etc. I vote you hoard that time needed for your writing Franklin. Protect it. Coddle it. Savor it. It’s yours and you need it to finish your screenplay.

Unlike money, time exists mostly in the present. What does it mean to hoard time? Here’s how I try to do it – working backwards from my goals for the year, I block off time on my calendar to move the related projects forward. It’s working with some success (for example, writing is one of the goals for this year). When it is not working, you could look at your priorities and determine whether you are giving your most important ones the time they need.

Invest/compound: The goal here is for $x today to become $5x or $100x tomorrow. What can you do with your time to create more value later? If you’re a founder, it is worth thinking of what will give you that 5x return. Build those things that will make it harder for your competition to catch up and for your lead to expand exponentially. Here are some other areas that are an investment in yourself that could compound:
Writing from your unique pov makes you findable, and by creating value for others, helps you form connections with like-minded people around the world.
Learning and pursuing your curiosity in areas that may not be popular enriches your life, just because it’s worth spending time on things that pique your interest.
Thinking about things that may seem unrelated so that when the next idea come up, you can draw connections you might not have known existed.
Forming genuine connections with people who stretch your ideas, expand your horizons, and leave you energized.

Diversification: By holding different kinds of monetary assets, when one asset class suffers, you do not end up at a zero. Other asset classes can carry you through. There are many ways to look at diversification from the perspective of your time: You could choose to look at it from just the perspective of your career — the whole anti-fragile career movement is big right now, and rightfully so given the year we’ve had so far. You could also look at it from the different ways that you currently spend time — work, family, friends, exercise and health. Let’s say, for example that you’re going through a rough patch on the personal front. Having your work go well can help carry you through by giving you something positive to focus on during that time. Much like money, diversification could mean not letting one aspect of your life dominate.

Opportunity cost: With money, putting your money in opportunity X means you may have to turn down opportunity Y. If you think great opportunities are ahead of you, the rational person would wait for the better investments. Unlike money, you can’t create more time in the present, and there isn’t really “saved” time you can draw from. So the opportunity cost of time is much higher than money. Doing X right now means you cannot do Y. Time is the most finite resource. Consistently asking what the opportunity cost of a choice is may help in crystalizing what really matters and what the areas of investment should be.

Giving and gifting: This is important for many people with their money, and not just for the tax break. It’s important because they want to support worthy causes. But when the dollars get higher, most people research the chosen charities to make sure that the money is being put to good use. On this one, it’s very similar with time. Apply the same principles.

IRA: In most parts of the world, the government and businesses enable people to save for their retirement by taking some money from today and investing in for the future. This money, either in 401Ks or IRAs, is money you can’t really access, but you can choose how to invest it so that it fits your risk profile and can cover your needs once you stop working. With money, you can starting saving for retirement early, but with time, what’s the right time to start thinking about when you stop working? Is it in your 50s or 60s or 70s? Is it investing a bit of time to learn a new skill you might want to use? Is it thinking through what you enjoy and starting early? I have more questions than answers for this one.

Creating optionality: One of the biggest reasons people value money is that it gives them flexibility and optionality. Having money can create more money (through investing). One would think that time would be different, but this can be true for time, too. While we can’t create time in the present, you can create high value time (and therefore options) in the future. You can add healthy years to your life by making the right decisions in the present. I don’t do this well (yet), so it’s time to make it a priority.

None of these are easy and I struggle with them on a daily basis. But this lens helps me get over FOMO, say no even when I feel some guilt, and have chunks of time to work towards the goals that matter.

I’m sure there are some other great analogies out there. I’d love to hear which ones you use in your life.

Ignore the Requirements, Check the Proxies

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This past week, I talked to 10 candidates for our first round of summer intern interviews. It was awesome to see the enthusiasm and energy in the applicants, as well as the range of people who applied. On the job listing, we stated that “experience is preferred, but not required”—so we got a lot of MBA students, young professionals, recent graduates… and, to my surprise, one rising sophomore.

This young man, let’s call him Carl, realized there was no downside to having a conversation about the role. Because if he got picked to have a conversation, he could pitch why, despite how young he is, he’s qualified for the role. And if he impressed (which he did), he could put himself in a position to land future roles or be referred to other opportunities. He would also make a connection in the venture industry that he wouldn’t otherwise have had. Having spoken to him, I can put a face to the name, and I have a positive impression.

Because we had such fantastic candidates, Carl didn’t move on to the next round. But, he stands out in my mind for having the chutzpah and confidence to put himself out there. At Spero, we are giving some serious consideration to having ongoing, in-term interns, and Carl will be on the very short list of people I’d call if that opportunity opens up.

This story connects to the broader issue of how requirements are written and what they actually mean. Most of the time, a requirement is a proxy for a skill that people want to see so you can be successful in the role.

For example, in a job description:

An MBA is a proxy for analytical skills, basic financial skills, modeling basics, and an ability to evaluate businesses.

Experience in a specific role/industry is a proxy for the ability to hit the ground running versus needing people to spend time explaining how the industry works.

Years of experience is a proxy for maturity, the ability to collaborate with people, and the ability to handle the kinds of decisions the role will require.

And when raising venture investment, $1M revenue is often a proxy for product-market fit. There may be other ways to show PMF without being at exactly $1M.

This is not to say that every prerequisite is a proxy, or that you should fudge the facts. If you’re 2 credits short of your MBA, don’t say you have an MBA — but don’t automatically assume you’ll be rejected, either.

In our summer intern posting, we didn’t specify a single hard requirement, not even a college degree. I believe the whole professional world is moving towards tours of duty, which don’t depend on credentials like that. One of the smartest product designers I know doesn’t have an undergraduate degree. He is awesome and has accomplished a lot at some of the very best tech companies in Silicon Valley.

Next time you see one of those proxies, if you feel you‘ve demonstrated what the proxy is asking for, don’t hesitate to apply. I‘m fairly confident that Carl will do something interesting with his life. He recognizes that he is the asset and despite his youth, he understands the concept of proxies. He took the chance to put himself out there, and in nearly every situation, that’s better than not applying.

Seek the Challengers

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Many years ago, I had a junior person on my product team who was:

  • Constantly questioning why she “had” to be at meetings
  • Pushing back against tasks and responsibilities assigned to her, saying they were a waste of time
  • Constantly questioning long-established company culture
  • And, by pushing and questioning, being annoying.

Knowing only those things, a lot of people would say, “That person doesn’t seem like a good culture fit; you should get rid of her.”

But this same person was also:

  • Hardworking beyond belief
  • A brilliant product manager
  • A flawless executor
  • Beloved by engineers and designers.

She was (and is) awesome. She made the whole company better by launching an incredibly important product that the community loved, and which drove real revenue. She had a massive impact on all the organizations where she worked. And on top of that, she went on to become a dear friend.

People like that—I call them challengers—can often be the smartest people in the room. They question because they want to understand the logic and thinking behind ingrained cultural habits. They want to use their time well, and they want to make a big impact.

These are the people who push organizations to be better. Organizations that don’t have these challengers don’t succeed in the long term, because being challenged is what leads to growth. Every organization needs at least a handful of these people. They don’t have to win every fight, but they shouldn’t lose every fight either.

Yes, they can also be incredibly annoying, require a fair amount of time to manage, and drive you to distraction. That’s the price the organization pays, in terms of friction and time, for having dissenters in the ranks. But those dissenters are worth their weight in gold. If every employee is drinking the kool-aid, the company won’t question long-held beliefs, challenge itself, or stretch in new and interesting ways.

So when you recruit, look beyond the pre-converted. Hire the people who have some doubts or reservations. When you do have a challenger on your team, don’t crush their spirit. They will point out that maybe you aren’t the best thing since sliced bread, and the outside world may view your “brilliant and fair” idea through a different lens. Challengers teach you to be open to questioning yourself and changing your mind, and that’s how you grow.

To tie this in to current events: big systems, and societies, need challengers, too. Instead of seeing the challengers as annoyances who are not worth your time, try to listen to their point of view. Regardless of which “side” they may be on, there may be times when you agree with them. And if you don’t entirely agree, if you are willing to listen, you might be able to arrive at a solution that incorporates good ideas from different constituents.

Twitter is Less Wrong. Facebook is More Wrong. Values Matter.

Photo by Luis Quintero on Unsplash. Icons added by me.

Twitter took a (somewhat) principled stand last week. They exhibited some understanding of the fact that product leadership extends beyond creating a product: it also entails product stewardship. By “product stewardship” I mean taking a stand on what people should and shouldn’t be able to do with your product.

Jony Ive put it well when he was interviewed about the iOS feature Screen Time: “If you’re creating something new, it is inevitable there will be consequences that were not foreseen,” he said. “It’s part of the culture at Apple to believe that there is a responsibility that doesn’t end when you ship a product.”

This is an idea I’ve been thinking since I was at eBay. As I wrote a couple years ago:

When I led product at eBay, we wanted to be “a well-lit place to trade.” The company’s mission was “to empower people by connecting millions of buyers and sellers around the world and creating economic opportunity.” That was the intention. But as we scaled, people began to use eBay in ways we hadn’t predicted. At one point people began trading disturbing items, including Nazi memorabilia. As we thought about how to solve it, we asked ourselves a few questions: Who are we? What do we believe? Why did we create this product? Once we framed it in terms of core values, the decision about what to do became clear. The company decided to ban all hate-related propaganda, including Nazi memorabilia.

This week, yet another black man was murdered in broad daylight because of the color of his skin. It makes me ill. And it makes stewardship even more relevant.

Twitter, much like eBay in the past, asked themselves who they were, that they believed in, and why they created the product. But unlike eBay, they were not bold. Instead, they took a baby step forward last week and exhibited that they were finally willing to face the consequences for taking a (little) stand.

Twitter has a set of rules and policies. They include:

  • You may not threaten violence against an individual or a group of people. We also prohibit the glorification of violence.
  • You may not threaten or promote terrorism or violent extremism
  • You may not engage in the targeted harassment of someone, or incite other people to do so.
  • You may not promote violence against, threaten, or harass other people on the basis of race, ethnicity, national origin, caste, sexual orientation, gender, gender identity, religious affiliation, age, disability, or serious disease.

And until last week, Twitter had declined to enforce these policies when it came to one user: Donald Trump. Twitter’s reasoning was that as the President, his tweets were of public interest, and different rules applied to him. And so for years, Twitter allowed the most powerful man to:

  • threaten violence
  • threaten or promote extremism
  • engage in harassment
  • promote violence and threaten harassment on the basis of race

Twitter allowed the product they had built with love and care to be abused and defiled. And then, last week, Donald Trump went too far, even for Twitter.

First, Trump tweeted falsehoods about mail-in ballots. This violated Twitter’s Election Misinformation policies which have existed since 2018. So, Twitter enforced their policies and added a misinformation label to his tweet.

Since Trump is also a child (and a dictator wannabe), he went after a Twitter policy employee who received numerous death threats as a result. He also threatened to revoke Section 230.

Second, Trump used language that included a threat of violence, which he has done before. This time, finally, Twitter hid the tweet behind a warning.

This immediately divided the Twitterverse. Many, who felt this small step was long overdue, were glad. Others felt that this was a huge violation of free speech.

I disagree with the second group. Twitter is a private company, which means the First Amendment does not apply. The First Amendment applies to the government and how it deals with citizens’ First Amendment rights. A private company can say “No shirt, No service”, or a restaurant can ask someone to leave if they start cursing loudly. In addition, Twitter actually has rules and policies that they have not been enforcing with Trump. Those rules aren’t new. Starting to enforce the existing rules fairly, and applying them to all users, is not a restriction. If Trump were not President, he’d have been suspended a long time ago.

So, at least they did something. They decided to enforce a version of the rules. Sort of lame. But better than nothing (our new low standard).

Meanwhile the other big platform in tech land is, of course, Facebook. They also have rules and they decided that the rules do not apply to Trump. They gave the racist-in-chief carte blanche. They effectively and fully caved. And with that, they picked a side.

As I said in my piece

As product leaders, we all want people to love what we create. But people often use our products in ways we never could have predicted. Once we release something into the world, it belongs to the users — and sometimes they use our products in unexpected and negative ways. We can’t be held responsible for what they do with it… right?

We have become painfully aware of what can happen when the tools we use encourage our worst instincts and amplify the most virulent voices. In past few months, there have been several violent efforts where the suspects behind them had been vocal about their beliefs on social media. Do the platforms really have no control over the ways in which their products are used? That feels both naive and untrue.

My friend Ashita Achuthan, who used to worked at Twitter, said this: “Technology’s ethics mirrors society’s ethics. As technologists we apply a set of trade offs to the design decisions we make. While we are responsible for thinking through the second and third order effects of our choices, it is impossible to predict every use of our products. However, once a new reality emerges, it is our responsibility to ask who has the power to fix things. And then fix them.”

To be clear, these decisions are not easy because these are complex problems. There are legal considerations, there are social considerations, there are moral and ethical considerations. When platforms are used globally, these decisions are hard to rush. Policy teams, business teams, and product teams agonize over where to draw the line and the unintended consequences of these decisions. As I tweeted on Thursday night, regardless of the decision, people will criticize it. But at the end of the day, these decisions have to be made. That is the job when you run a company like this.

In the past week, two white male CEOs—Jack Dorsey and Mark Zuckerberg—made two different choices. They have shown us who they are. It is now up to us (the users, the employees, the investors) to decide if we want to support that.

What can one do? If I use a platform that puts the most vulnerable at risk, I can stop using the platform. If I work at a company, I can evaluate whether my values and those of leadership match—my time matters, where I work and who I enrich with my work matters. If our values are aligned, and it’s a disagreement on tactics, I can try to convince the leadership to see the logic of my argument. If my values and those of the leadership are not aligned (and if I am in a position to do so) I might consider leaving to work at a company which is more aligned with my values. And if I am an investor in company that doesn’t share my values, I can sell my shares.

The United States of America was built on abusing black men, women, and children (in addition, of course, to Native Americans). That some of our fellow citizens live in fear and get killed on a whim is not acceptable. We should not allow this to keep happening. If you live in America, whether you were born here or came here later in life (like I did), everything we have is built on top of black bodies.

It is our jobs, as human beings, as leaders, to stand up for what’s right. And it is not right that the biggest bully in our country can use the platforms that were built to connect people to threaten and intimidate the most vulnerable. The leaders of these companies need to be stewards of their platforms and make sure the platforms are not used to harm people in the real world.

Thank you to Ashita Achuthan for reading drafts of this post.
This is the post and video on Product Leadership is Product Stewardship.

Ignore The Gatekeepers

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Last week, I saw the awesome news that my NYU Grad Film classmates Sarah-Violet Bliss and Charles Rogers are making their next feature. I love their story because it’s so different from what people may consider the “traditional” path in film.

It was the summer of 2012, and most of the class was on draft 63 of their soon-to-be perfect first feature script. But before that, we each planned to submit draft 79 to all the prestigious film labs. There, we would get input from auteurs we admired. Then, we’d make the perfect film, it would open to acclaim at the perfect festival, and get acquired and released nationwide. That was the plan.

That same summer, Charles and Sarah-Violet (SV) had a very different plan. Instead of perfection, they decided to create immediately. They cranked out a feature script. They each borrowed $40K through student loans. Knowing they were on a tight budget, they wrote about a world they knew (deep Brooklyn), with only a small handful of locations (all in NY), and very few characters. They didn’t submit the script to any labs. They didn’t apply for any grants. They did not wait.

They planned the shoot. They cast fantastic actors, some of whom they’d known for years. One of our classmates was the cinematographer.

They shot their feature. They edited their feature.

They did it all on a total of $110K. Tiny, even by indie standards.

One year later, they submitted it to festivals. The movie, Fort Tilden, premiered at SXSW. It won SXSW. And that set SV and Charles on a different trajectory. They were writers on the Netflix show Wet Hot American Summer and now have their own, very successful show on TBS, Search Party.

I share this story to share the power of ignoring gatekeepers. There are a few big steps in making a feature film: write a script, prep and plan the shoot, shoot, edit, release. Every step depends on funding. You could wait for funding at each stage—basically asking for permission from someone else to make your film. Or, you can do what SV and Charles did — make the best movie within the constraint they faced and the funds they were able to access. No waiting, no permission needed.

Don’t get me wrong: this is definitely not an easy or guaranteed path. I spoke with SV recently about her story, and she said, “(Taking out those loans) was still a huge insane risk I wouldn’t exactly recommend for everyone. But it felt right. So I’m always very careful to say, ‘Look, this is how we did it, and it worked out for us. I have some success but I also still have student debt.’ That said, I do NOT regret it. Not everyone would be comfortable with the position I put myself in, but it was right for me. I had a lot of clarity in the process and risking the money didn’t scare me. Waiting years and years to find funding or someone to approve of my voice was a much scarier fate.”

If you follow the SV & Charles model, you will have a real, live product. A product which people can see and enjoy. A product that people can evaluate and say “hey, they won SXSW on a tiny budget.”

Given the choice between being constrained, but still making something, versus waiting for the “ideal” situation, what would you pick? While most of the class was dreaming of the perfect first feature, SV and Charles made their first feature. That was enough to launch them into a world that is very hard to break into.

Breaking into tech is easier because angels and early funders (the gatekeepers) are willing to fund first-time founders. But it’s not always easy to raise your angel or pre-seed round.

Look at the funds and skills that you have. Decide how much risk you want to take — each person has their own comfort level and you should be the one that decides what is best for you. And then, design and build something using your skills and your budget. If you build something people love, you will have a little success. And that little success can propel you onto your next opportunity. And then onto the next opportunity. And each project or startup could get better. The gatekeepers will then come to you (and I say that as a venture investor).

In my film school class, every single person had ambition, most had a great idea. But SV and Charles just did it. And they went from strength to strength. You can, too.

Consumer + Enterprise + Mission

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My friend Nikhil recently made a great point about how more startups are serving both consumers and enterprises. “The technology world used to clearly segment businesses by consumer or enterprise,” he wrote. “But those lines have been blurring for quite some time. The most interesting companies don’t fit into either bucket.” He cites Zoom, Amazon, PayPal, Notion, and many others as examples of this trend.

I saw this firsthand at eBay. It started as a consumer company, but very soon, two things happened:
1. Sellers on the marketplace realized eBay could morph from a fun side hustle into a profitable main business. Some of these sellers grew into SMBs. The world is full of enterprising people. And when your product encourages them, they will find new and interesting ways to stretch and use it.
2. Businesses realized there were a lot of buyers on eBay. It became an attractive additional storefront for them to sell their wares.

By the time I got there, eBay was already both a consumer (p2p) and a business company (b2c and early signs of b2b).

So, I agree with Nikhil 100% that the next big thing will be both consumer and enterprise. However, I believe there is an even more important lens to evaluate companies: mission.

I think of a company’s mission or purpose as its raison d’etre.

  • Why does the company exist?
  • At scale, what problem does the company solve?
  • If the company solves the problem, does it make our world significantly better?

If your company can answer that final question with a resounding “yes,” you are at a big advantage.

One advantage is that you can hire talent at reasonable rates, because people buy into the mission. Gen Z is the first generation to prioritize purpose over money. If they authentically believe in what they are working towards, their commitment level is incredibly high.

Another advantage of being mission-driven is resilience. All startups hit speed bumps, but with a strong mission and a team of believers, these become easier to weather. The purpose will help guide your team through the hard times.

Finally, customers value mission, too. Millennials and Gen Z care deeply about which brands they patronize. When they see a mission-driven company that aligns with their values, it is much more likely they will form a strong affinity for the brand.

At eBay, employees thought about the mission every day. Last week, I was catching up with a former eBay colleague, and he expressed the desire to be driven by mission again: “I mean, we weren’t working for just any company.” When you’re helping expand access to economic opportunity, and you’re doing that with a great team, it’s a powerful thing (and it’s a ton of fun).

Core, one of our portfolio companies, exemplifies this idea of consumer + enterprise + mission. It’s a mental performance company that encourages meditation. Consumers are adopting it, and companies are buying Core to help their employees find a sense of calm and focus. Their mission, to cement mental performance as a pillar of well-being, gives them an important advantage.

Historically, mission (or purpose) has been sneered at. Investors believed the lack of singular focus on money led to sub-commercial returns and failed startups.

Not us. At Spero, we believe that when you combine a great business model (an absolute must) with a great mission, magic happens. Purpose is not just icing on the cake. When a company, by executing on its core business, makes the world better, that’s a huge win. eBay, Tesla, and WhatsApp are all examples.

Mission/purpose is your secret sauce. It’s your superpower. That’s why I believe the best companies of our generation will be purpose-driven.

Re: Money On The Screen

Photo by Christina @ wocintechchat.com 

What I love most about the newsletter format is that it encourages discussion. In response to my last post, Put The Money On The Screen, a founder emailed me with some points that I want to share and discuss.

The founder rightly pointed out that there’s nuance to the idea of putting the money on the screen. Spending and cost-cutting decisions depend on the stage of the company and the unique circumstances.

Here’s part of what the founder wrote:

The problem with cutting off-screen costs is that the results over time mainly go to investors (because the great majority of the company over time is investor owned), and proportionally less to employees and common shareholders, which are asked to bring the sacrifice. Just be mindful of what asking people to sacrifice means.

This founder was speaking from a personal experience: being asked to take a ridiculously small salary after raising a significant Series A from a top-tier firm. The founder went into debt as a result of this, and it took a long time to recover.

While I haven’t heard both sides of the story, I do think putting a founder in that situation is harsh. VC firms should make sure founders and CEOs aren’t under undue financial stress—it’s in everyone’s self-interest for the CEO to be able to focus on building the company. Additionally, some expenses that might strike VCs as superfluous may be legitimately necessary for team morale or culture. Those are best judged by the company’s leadership.

All of this depends on the stage of the company. At the later stages, the tradeoffs will change. But regardless of stage, employees bear the brunt of putting the money on the screen during tough times. I’ve seen this happen in film, where the writer/director bears the highest cost in “making it happen,” and first-time founders are often in the same situation.

While that’s the nature of the beast, it’s something worth pausing on. It is not always the right decision to cut some “off-screen” costs. The best decisions may emerge when investors and CEOs have honest conversations that recognize the impact and consequences of these decisions.