Chanel Miller said her New Year’s resolution for 2020 was to fail as much as possible.

“Making things that are really crappy and undeveloped until maybe they can be good. I’m way too young to confine myself to one lane and lose the ability to openly experiment.”

This is exactly how a the first draft of a film script develops. Characters and ideas float around in your head, and one day, they’re done with the floating and demand to live on the page. The script gets written, and when you’re done… it’s shitty. It’s embarrassing, you don’t want to show it to anyone, and you wonder how on earth your magical characters and ideas amounted to this pile of doodoo on the page.

But, it’s really important to have this first draft. Because as Miller said, yes, it’s crappy and undeveloped, but you need the crappy and undeveloped to have hope for the good and the great.

Struggling, wrangling, failing, crying, working, pushing forward allows your characters and your story to breathe, thrive, and for the bones to slowly emerge from the pile. Experimenting openly, taking the story in unexpected directions, adding or removing key characters, and messing around with no pressure allows the sparks of creativity that makes the script sing.

Every creator needs that messy time.

The same is true for startup creators. Ideas for a product form in your head over time, sometimes over years. Then one day, you’re ready to put it on the “page” — to code something, to craft something. And it may be a sloppy, messy ball of hair, mud, and hope. Don’t clean it up, polish, and shine it in order to raise money too early.

Love your messy stage, because it is so important to relish that stage. You can only do it once for each startup, and it’s when experimentation, ideation, hanging out, and trying weird things is entirely possible. It’s where ugly is awesome.

At some point, a screenwriter will have to share the script with producers. At some point, you have to share your startup with users and, if you want, with investors. If things go well, they love it, and you build an amazing company. Fantastic.

If you’ve grown your company into a wonderfully world-changing one, it’s worth finding ways to go back to being messy. Get into small groups. Make room for experimentation with ugly, creative things that may fail, because that can lead to new lines of growth. If you have the urge to start again, you could start another company and embrace the new ugly ball of mess. Whatever path you follow, the messy part of creation can be the the best part of creation, and the challenge of it makes your ideas and your company better.

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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.

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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. 

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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.

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One of my early lessons in screenwriting was to focus on the character—motivations, personality, drives—and not external characteristics. It’s tempting to specify that the leading lady is blonde, petite, or whatever. And it’s okay to envision the character while writing, but we’re taught to avoid specifying detailed external appearance in casting.

The reason is that sometimes, the best casting decision is the one that’s least expected. You might have an image in your head of the character, but the best actor—the person who is most convincing and does an incredible job—might look very different from your mental image. Let’s say your character is written as a seductress, but the best actor for that role could be more of a plain Jane. That adds a lot to the nuance and depth to the story. A more regular-looking person being a seductress is so much more interesting than the hottest person on earth being a seductress. The film Snowpiercer was written for a mild-mannered man in a suit, but Tilda Swinton rocked the role.

During casting sessions, screenwriters and directors need to learn to set aside their mental picture, look at the actors in front of them, and reimagine the story with each person auditioning. That’s the way to cast the best actors.

Similarly, investors sometimes have a mental picture of who will be a good entrepreneur. It’s not based on looks (one hopes), but on the profile — the experiences a person “should” have had to be a great entrepreneur. VCs can sometimes be biased toward someone who’s worked at a hot company that went public, or is an engineer who can build it all, or a name-dropper who seems very connected in the ecosystem.

If investors carry around these biases in our heads, we will miss the best people. Like great actors, great entrepreneurs can come in all shapes and sizes, and from all backgrounds, all levels of work experience, ages, nationalities, and genders.

When casting an actor, the most important things to look for include:

• Ability to live the character. Do you believe the actor is the character

• Willingness to take direction. A director should never tell an actor “how” to play the scene, but the director can and should give her guidance on the mood of the scene, how the audience should feel, or the character’s motivation for a certain action. And the actor should be able to take that input and give the director a range of options.
  
  I remember when I had the chance to direct Jessica Chastain and James Franco. They gave me such a spectacular performance on the first take and then turned around, asked how it was, and whether I wanted to see it another way. My jaw was on the floor — I was blown away by their talent and their humility in asking for input from a student director.

• Ability to go with the flow. Film production (especially in the indie world) needs to be flexible. Sometimes, a much-desired location might suddenly become available (for free!), and the crew might have to shoot there tomorrow instead of three weeks from now. This means the actor has to be ready for scene 56 instead of scene 18.

Many of those same characteristics apply to ideal founders:

• Ability to fully inhabit the role of the CEO. This is about vision, tactical capability, ability to hire, and the ability to sell their vision and themselves.

• Willingness to take input. An investor should never tell a CEO how to do their job, but a big part of the investor’s role is to see around corners, anticipate challenges based on their experience, and give the CEO input and feedback.

• Ability to go with the flow. Startups need to be flexible. Sometimes, a new competitor might emerge, you might lose a key person on your team, a pandemic might unexpectedly sweep the globe. The best CEOs are those who can adapt and find a way to thrive in the new world.

Just like the success of a film depends on casting the person who is the best actor, the success of an investment depends on casting the best founder. It requires putting aside the mental preconceptions and focusing on the person in the room (or on Zoom). Despite her youth, can she be an amazing CEO? What gives you that confidence? Her knowledge of the space? Ability to be compelling? Authenticity?

The best casting decisions happen when we are open to allowing incredible actors to show us how much better the character can be. In the same way, I try to approach every meeting with a founder with a willingness to be blown away by their vision of the world.

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