From Messes To Successes

I was emailing with a top technology blogger yesterday and he said about one of his competitors in tech blogging, "they are such a mess". To which I replied, "yes, but our biggest messes have often turned into our biggest successes." And then I realized that I had made a rhyme and that I would have to blog it.

When I look back at my 20+ year history of venture investing, it’s certainly true that the biggest successes have been big messes at some point in their life. My most successful venture investment at Euclid, Multex, almost went bankrupt before the Internet came along and provided a cheap way to get it’s service to its customers. Geocities, which was our most successful investment at Flatiron, was a total mess in mid/late 1997, about a year after we first invested. And our most successful investment to date at Union Square Ventures, TACODA, was a mess multiple times including when the first build of its software totally failed on them. Delicious also had plenty of messy moments in its brief period in our portfolio. And there are a number of other companies in the Union Square Ventures portfolio that will go nameless in this post that are currently in various states of mess but doing incredibly well just the same.

I am not advocating messmaking with your startup. There have been plenty of buttoned up startups that I’ve been involved in that have been great successes. Companies like Gamesville and ComScore in the Flatiron portfolio and FeedBurner and Indeed in the Union Square Ventures portfolio come to mind when I think of organizations that have had their act together from start to finish.

But there is something about messes that lead to great successes. I think it often has to do with teams that focus almost exclusively on the product and the market to the exclusion of everything else. They don’t build the rest of the infrastructure that it takes to be a stable well executing business and they suffer a lot because of it. But in the process they get the one thing right that really matters. And the fact that they get the one thing right that really matters makes matters worse because the product takes off and they don’t have the resources in place to deal with their success. And mess ensues.

The prescription for turning these messes into successes is really pretty straightforward. You need to build the team and bring in people who excel at the blocking and tackling and the PLANNING that most startups don’t have the time or inclination to do. And you need to gradually change the culture of the business from one that is all about the product to one that is about the entire company. Sometimes, often times, that means changing the people around. And that’s never easy. And it’s even harder to change the people around when it was the initial team that made the product so popular in the first place. So you have to somehow find a way to add the "operational" people without drowning out the "product" people.

But I urge all of our companies not to overdo the "operational" thing too quickly. You need to get your act together for sure. But it can and should be a gradual process. You can’t go from mess to success overnight and even when you are a success, your company should still always be just a little bit of a mess.

#VC & Technology