We recently attended the C100's flagship event named “48 hrs in the Valley” and want to share some key moments, lessons learned and observations. The event was filled with so many activities that it is difficult to distill everything into a concise picture but we'll give it our best shot. Before we get started, we'd like to take a moment to thank the C100's organizing committee for their great work. Coordinating this type of event is very challenging work and we appreciate it the effort put into it.
Rob Burgess' insightful talk is the first things that come to mind when looking back at the event. Coming from a web design & development background, it was awesome to hear the inside story behind Flash. After becoming CEO of Macromedia, Rob had the foresight to pretty much cancel all development on the company's main revenue source (tools like Shockwave) and re-orient resources towards building products for the web (aka Flash). Given how drastically the industry has changed, this was the right decision but the amount of guts it took to perform this pivot is mind boggling. Pivots in a startups are difficult, but completely re-orienting a successful & profitable company with tons of money in the bank is much more challenging.
We also were fortunate to be matched with Debbie Landa for one of our one-on-one mentoring sessions. What started out with “I know nothing about franchises” concluded with a plan to revolutionize the franchise industry. By making parallels to the venture capital world, the future appeared obvious to us and we validated that FranchiseBlast's in a great position to completely alter the industry. Debbie had the energy and big vision we expected to find in the Valley. Combined with the open-mindedness to learn new things and the creativity required to challenge assumptions, these traits guarantee success regardless of your geographical location.
Being a bootstrapped startup not looking for funding, pitching to venture capitalists was also an interesting change of pace. The dynamics of each pitch was completely different. The first presentation was made to an analytical VC with a great poker face. Razor-sharp questions followed in quick succession to lead up to very insightful comments. It was the toughest meeting, but also one of the most valuable. Our second presentation was characterized by stellar flow: each slide was followed by a question answered on the next slide. It was a short meeting due to time constraints, but even in this short blitz one could sense the intellectual alignment. It's great to work with people with whom you can have fast-paced exchanges. Our third pitch slowed things down as we were given twice as much time as allotted and ended up being a conversation more than a pitch. This VC had domain expertise not found in the other meetings which lead the discussion in a completely different direction. The final pitch ended up being the easiest (emotionally) with great validation but few challenges. Putting myself in their shoes, though, I understand how gruelling it can be to deliver insights which can push companies to the next level, pitch-after-pitch.
Finally, I enjoyed the “both sides of the deal” talk where a startup and their VC discussed their deal from different perspectives. Not only was it extremely funny, it was also very insightful. Rather than discuss the specifics, let us dive into key lessons learned – some of which emanated from this talk.
Key Lessons Learned
Although we learned a lot during these 48 hours, we didn't necessarily learn anything explicitly taught. These lessons learned materialized after talking to enough people in Silicon Valley and reflecting on their thought process.
First, the importance of shared vocabulary cannot be overstated. In the software world, best practices are often boiled down to design patterns. When two software engineers have internalized concepts behind these patterns, they can propose & refine software architectures very efficiently. The same shortcuts apply to everything in the Valley: software, finance, companies, people, eras and methodologies. While we do not personally stay abreast of every hot new startup mentioned in tech news and feel it gets in the way of getting things done, we acknowledge that shared vocabulary is critical. In particular, being aware of some of the key events which shaped the technology industry in the past and general knowledge of current trends helps us align ourselves with success and avoid repeating past failures.
Furthermore, having intimate knowledge of the people behind those events is key. In our early days, we saw networking events as a chance to meet interesting people. We went into an event not expecting much and that's precisely what we got: nothing much. However, we unknowingly started to build a network of peers and, after a few years, we're now connecting some dots. We can start transposing our concrete needs onto the desire to meet concrete individuals – or at least give our interlocutor enough information to help guide us to a person which meets our criteria. Although you may randomly bump into the perfect contact, it is much more efficient to do your homework and seek out individuals yourself. As an aside, we purposefully dedicated some time during the event to plugging other local startups (Exocortex, Shopify, Project Speaker, etc.) when meeting relevant individuals because we firmly believe that we're not only founders, we're ambassadors for other startups in our community. “A rising tide lifts all ships”, as Scott Annan often says speaking to the Ottawa startup community.
We also discovered that the more successful your company becomes, the lonelier it becomes for the founders. By this we don't mean people start ignoring you or despise you to the points of throwing rocks in your direction. No, in fact, we mean that the essence of loneliness is derived from the fact that you can't talk about your fears, successes, challenges or motivations with anyone else. To help illustrate this fact, visualize entrepreneurship as a pyramid of thousands of layers where the dimensions of each layer represents the number of likeminded individuals & companies. When you first start out at the base, pretty much anyone can give you valuable business advice. However, as your business grows, the value of this advice diminishes. This causes you to look elsewhere (higher-up in the pyramid) for high-impact advice, but it becomes exponentially more difficult to find it. As an example, when you've raised venture capital, you may find that there is a limited pool of likeminded entrepreneurs in your city with whom you can discuss your challenges; this forces you to branch out. We believe the same logic holds for every major transition in your company's lifecycle, from your first part-time freelancing gig to IPO to managing a trillion dollar company. In the technology industry, we believe the entrepreneurship pyramid reveals Silicon Valley's greatest asset for founders: a greater density of likeminded individuals to accompany you in your journey.
Key Observations / Thoughts
- If you wish to raise capital efficiently, you must know which funds are aligned with your business model, which ones of those are at the right place in their funding cycle and which individuals within those funds you should talk to.
- If you wish to network efficiently, you must know what you're trying to accomplish, which companies have done it before and which individuals within those companies are responsible for the behaviour you wish to emulate.
- Company culture is important for all businesses but even more so for companies undergoing hyper-growth.
- Toughest thing to do as a CEO is terminating someone who's gotten you to where you are now but hasn't evolved.
- You will outgrow the impostor syndrome.
- Our peers during the 48hrs event were there to get things done. Everyone is independent and focused. This may come off as arrogance; break through the shell.
- Behind every success story are individuals who are just like you.
- The C100 organizing committee sets up the context, but it's up to you to leverage the opportunity to reach your goals. Sink or swim.
- Once you board the funding train, you're not getting off.
- The only way to minimize risk is to use pattern recognition. (Hiring, investing, sales, growth, etc.)
- Because of the importance of pattern recognition, most people follow. (Many investors chasing the same startups, etc.)
- Fitting the right patterns increases your likelihood of success. Revolutionary ideas must break the appropriate patterns, but not all of them. Finding the perfect balance is extremely difficult.
- Pick good lawyers; vet them.
- Business is not a zero sum game. Find a win-win agreement.
- At lastly, a tweet I saw while leaving California: Help others. Luck favours those with good karma.