I’m very fortunate in that I’ve had the opportunity to experience what I like to call the holy trinity of “startupland”: operating, founding, and investing. Studying the commonly held perceptions around founding startups vs. investing in them has always been interesting to me. I began to actively think about these perceptions when I left a venture fund in 2017 to pursue entrepreneurial endeavours.
As a VC I had all these thoughts around what it’s like to be a full-time founder. And the entrepreneurial journey allowed me to compare my perceptions to reality as a newly minted business owner. I’m investing again at a new fund, and recently found myself thinking about what I learned on the journey, and the things that surprised me most as a VC turned founder. Here are three lessons that come to mind:
1. Pitching your vision is harder than it seems
The average venture investor is reviewing a large volume of startup pitches. Over time, the high velocity of pitches allows VCs to appreciate what to listen for in a good story — from viable business models to competitive differentiators. And comparing these pitches to eventual business outcomes ultimately gives venture capitalists the ability to understand the anatomy of a successful business.
Having fielded a fair number of pitches as a VC, I naturally assumed I was going to be a pro at telling my story as an entrepreneur. This couldn’t be further from the truth. It took me a lot of time to find my voice and solidify the narrative that I wanted to present to the market. As entrepreneurs we have a number of ideas floating around in our minds. And the markets we operate in are moving targets. As such, being able to clearly express our ideas — with an overarching vision to tie them all together — will never stop being a constant work in progress.
2. Sales eats product development for lunch
Early on in my career as a VC, I had a tendency to be overly analytical about the long-term efficacy of products — be it in their ability to perfectly address the needs of a preferred client base, or their defensibility as it relates to other similar offerings in the market. If it was clear that a product addressed a real pain point and market need, then the question became “how well?”. I ultimately thought that building a great product is more crucial and harder than selling it, but I was wrong. There is no hard truth to that statement.
Selling is much harder than building. The question of how well a product addresses a pain point isn’t as important as determining a business’ ability to move fast with an offering that simply gets the job done. If the product is good enough, the focus should be on developing proprietary distribution channels and pushing for saleability as quickly as possible. After all, the best products are created and refined over time when they’re already in the hands of customers.
3. It’s important to have an abundance mentality
For every ten bets a VC makes, on average one or two will be home runs, one or two will end up in disarray, and the remaining will end up being net neutral. With such odds, it’s easy to become consumed with analyzing the “home runs” and thinking that only certain types of businesses are worth building or can be defined as truly successful.
Entrepreneurship has taught me that there are a million different ways to make money, and that opportunity exists everywhere — in both crowded and uncrowded markets. The key is to understand your goals and create a reality for yourself that optimizes for the outcomes that you truly desire. Having an “abundance mindset” helps to achieve this. Not every business requires a boat load of capital to get started, or make headlines in the press to be considered noteworthy and impactful. The discourse around entrepreneurship today tends to reinforce the idea that abundance only exists at the intersection of big money and headlines in the press. This isn’t true.
I didn’t think I could be more empathetic to founders when I was a VC, but the entrepreneurial journey has managed to increase that level of empathy tenfold. I’m fortunate to have experienced both sides of the spectrum, and look forward to having it better inform my approach to investing.
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