Going Out On Top

Last night we went up to Madison Square Garden with some friends to see James Murphy and LCD Soundsystem go out on top. For those not into LCD Soundsystem, James Murphy is a producer and record label owner who started LCD Soundsystem as a project in the early part of the last decade. They put out three records, each one besting the one before. The most recent came out last year and was one of the top records of the year.

Then, at the top of their game, LCD decided to call it quits. They played four shows this past week at Terminal 5, and then played their last show ever at The Garden last night. It's over now.

As we watched the band put on a fantastic show last night, I was thinking about going out on top. So few manage to do it. Shaq is warming the bench in Boston. Brett Favre should have called it quits after he threw the pick in OT against the Saints. The Stones haven't written a great song in thirty years. The money and the burning desire to "win another one" drives the great ones to stick around too long.

And I wondered if the rules of the entertainment and sports world can be applied to venture capital and startups. Is there a time to call it quits in business? I look at Warren Buffett and Rupert Murdoch and I see individuals still enjoying the work and delivering for their shareholders and investors into their 80s.

But I also look around the venture capital business and I see investors who were at the top of their games in the 90s struggling to remain relevant. And I think about how I want to manage this issue myself.

How do you know when you've done your last great startup? How do you know when you've done your last great investment? How do you know when you don't have the drive, hunger, and insights to keep delivering top performance?

Right now, coming off two weeks of totally relaxing vacation with my family, I find myself up early, thinking, writing, and planning. I don't sense it is yet time to hang up my cleats or walk of the stage like James Murphy did last night. But the thought is in my mind and I want it to stay there. The investment business is not easy. You are only as good as your last trade, fund, or year. And the venture capital business is particulary tricky. All the returns in the business accrue to the top ten or, at best, twenty percent of investors. When you lose your edge, your performance suffers, often badly. But it can take a decade for the rest of the world to notice because there is so much latency in the venture capital business.

I don't want to be the investor who sticks around milking the investors for fee income and raising funds based on returns that are over a decade old. That's a Rolling Stones move and it is not for me. I'd prefer to do what James Murphy and his band did last night.