Rolling Up Your Sleeves and Getting Your Hands Dirty

Comments (Archived):

1. That post just made you the best VC I know!I was in a joint meeting with other investor. The first sentence he uttered “We own you”! It was all downhill after that. I know a lot of investors who brandish their lack of understanding as profound wisdom.The time to be judgmental is just before you invest. Till that time it is like court in session. Look for evidence and get the case put in front of you. The head of an Aluminum company once said to me, listen now – don’t talk unless it is your turn.

2. I love this mentality, and think it applies to almost all walks of life. The best advice I’ve ever received when I was a thinking of becoming an entrepreneur was “Just do it, just quit your job tomorrow and dive in head first.”It was risky, and scary, and I had no idea where it would take me. But I’ve learned more in the past 3 years of doing this than I would have learned in 30 years at my old job! And that’s the most important thing to me.

   1. I think you are describing a differently mentality. You’re describing taking an entrepreneurial leap of faith; Fred’s talking about spending a few days in Buffalo to learn more about one of his portfolio companies.

      1. It’s a different situation, but the same mentality. You have to commit yourself fully, and focus completely to what you are trying to accomplish.Would Fred have learned the company as well if he had just asked managers what certain jobs entailed, rather than meeting every employee and in some cases doing the job as well?Would I have learned all I know today, if I had just been a part time entrepreneur for a year of two? Probably not.I see a greater statement in this post that applies to a broad range of life situations. Whatever you are doing in life, you have to be able to commit yourself to it and become a part of it. Walk the walk, before you can talk the talk.

         1. Part time entrepreneur, heh. We’re all business 24/7, independent of our other responsibilities (family, day job, etc).The trick with learning is remembering just what is necessary at the right moment. Maybe one day I’ll get that trick figured out 🙂

3. Excellent post.Nothing is worse than a board member who wants to roll up their sleeves and get their hands dirty without having bothered to learn the business.

4. “But that doesn’t mean you can’t help them.”Of course not. You can always introduce them to contacts of yours at firms that are prospects for their product or service.

5. “I don’t like to invest in businesses unless I really understand them”. I wished all VCs were like that.

   1. All VCs ARE like that….in their own minds.

      1. Saying it and being proficient at it are 2 different things. The savvy entrepreneur will know if a VC “really” understands their business.

      2. damn you gone bad ass on us with the new avatar…..gone are the days of smiling, happy andy; andy 2.0 is straight up thug — i.e. beanie, no smile….i like. in a world where 9/11 is an inside job, it’s very appropriate.

         1. Word.

            1. Word is the new +1 on this blog

6. Great advice.To what extent do you still do this? Obviously I bet you don’t really clear 2-3 days anymore…Does most of it now come from totally embracing the products and services the companies provide?

   1. Mostly I do this by getting all over the product.But I would happily clear my calendar and spend 2-3 days at any of our companies if they wanted me to

      1. I would guess that a lot of it is about who you work with and who you trust as you scale. Obviously at some point you’ll invest in too many businesses to be able to spend 2-3 days straight at them without impacting your other roles. I commend any VC who grows the network of people that can truly keep them up to speed. It’s the sign of both a great VC and a great CEO.

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7. Great post and same holds true for management themselves. I’ve worked places with either new senior management that hasn’t gotten their hands dirty and/or senior management that has worked at a company long enough that they’ve become separated from the daily work. In those cases it’s pretty easy for decisions to be made that aren’t in line with the true business needs.

   1. Indeed. Whether you are investing money, time, reputation, or the success of your career, you’ve got to know your business, and understand enough of the details to make the right calls.

8. Yes. Nothing worse than a VC that “phones it in”… Like a 4 year old w/ a machine gun.

   1. Oooh. Great line. Love it

9. And years later, they made a reality show about this… Isn’t the Waste Management CEO now picking up garbage or something to learn about the business?

   1. I don’t see why he shouldn’t occasionally. It is where his company starts and ends. He should do his rounds…

   2. You’re alluding to Under Cover Boss. I haven’t seen the show, but I like the concept. I’ll have to check it out. Reminds me of a bit on a TV show Michael Moore had once: he went to the headquarters of the Big Three automakers and asked if the CEOs could change the oil on one of their cars. If memory serves, Alex Trotman of Ford came down, did the oil change on one of his company’s sedans in a shirt and tie, and then went right back in building.

      1. kind of like the bottoms up episode on 30 rock.

         1. I haven’t seen it, but I’ll have to ask my resident 30 Rock watcher.

   3. Is that a joke or are you serious?

      1. No… it’s a real show!

         1. Checking out the clip of the Hooters episode now. This is actually pretty interesting so far.

   4. Yes. That episode of Undercover Boss featuring Larry O’Donnell, is a must-view (even after being massaged for TV) FanCast: http://bit.ly/bxoel1

      1. Yeah, it’s a little cheesy, but it was good to watch a CEO from a company/industry where he is quite detached from the workers stepping in and working various bottom rung jobs, and experiencing what some of the “efficiency rules” like fining people for going over break time by a minute, or making them work 10% faster really means.

         1. I agree with you on those points.Another interesting show I just found is Shark Tank: http://abc.go.com/shows/sha…Its people pitching their ideas for funding.

            1. My friend David Gusick is developing a show now called Extreme Collaboration, helping startups and smaller businesses ratchet up to the next level.He’s gotten some great support from big names, includi g to host (whom I may not reveal).Stay tuned!Some of you may even want to participate.

            2. Hi Tereza, I would be very interested in getting involved – my husband and I have had a business for 11 years, and I’ve also worked in TV production. This show sounds really interesting! Nancy Garcia

            3. Sounds super! Email David dot Gusick at gmail dot com and tell him I sentcha.My gut says that a husband and wife team would make for some great TV :-). Work it!

            4. Thanks Tereza! Will do right away, and keep you posted.best, Nancy

10. Great post Fred.I’ve been fortunate and had a few VCs who really contributed to my companies. Smart folks who brought a good point of knowledge and informed our decisions.Interesting in new markets is that they are ‘new’ and no one has the answers. What the team needs is smart input based on deep knowledge of the product and a strong base of experience. Partnership, not meddling, is the model that shines.

    1. Right on Arnold.The change of markets is accelerating with new opportunities. I wonder how long anyone can lean on older experience without getting their hands dirty. My years or c++ coding algorithms was useful in the abstract but the land of web programming, the utilities, the remote applications, and databases are a wild new set of paint for my minds eye. Fun times.

11. I feel like I would love these guys (except if they went and called me Shani, that would be annoying). It sounds so interesting to make decisions based on touch-look-feel: not enough people get that help because its time consuming. But this sounds like fun to me… (i recognize this is not for everyone, a lot of my friends would hate it)

12. Great post. It should be required for VCs, and outside board members, to spend time at the company. So many of today’s 40-something VCs came into the business in the 90s, where “drive by” venture capital was routinely practiced, so they think that actually reading the board book ahead of time is being a good board member.

13. I need an extra dolly grip this week…you around? lol

    1. 🙂

14. Good stuff, even if you never intend to give advice to the team (angel investor, etc). It will make you a better investor to do this, and expand your advantage over the market.This is one reason why institutional investors and insiders are the ones that make all of the money in liquid investment markets like the stock market….they are the only ones that “get their hands dirty” and completely understand the business and the market. It’s not just conspiracy 🙂

    1. That’s very true andy

15. People always think that they know what other people are talking about: its big, its complicated, its cutting edge, its really efficient. But none of it means anything until you actually SEE what they are talking about. Nothing beats an old fashioned “factory tour.”

16. Great post. I had a fairly strong bias against investors with no operating experience until I started reading this blog, and until Redfin took a small investment from Osage Partner’s Marc Singer. Like you Fred, Marc graduated from Wharton and soon thereafter became a VC.He is one of the best board members I have ever seen, a role he treats not as an afterthought or as a perk, but as a crucial responsibility. He genuinely loves helping companies, more I think than investing money or even making money.Marc meets with line managers on almost every visit (turning our long-distance relationship — seemingly another defect — into a basis for in-depth engagement and then detachment), using private forums as his main venue for delivering value. He somehow long ago developed a merchant sensibility for what customers will pay for. It also helps that he challenges people in serious ways with a huge smile on his face, something I have never been able to manage. That and he always seems to pick up his phone.All of this got me thinking that you should write a post on what to look for in great board members. Outside of the VCs who have to be there, it’s sometimes hard to recruit great board members until you’re so successful that you don’t really need the help.

    1. I think I did that already. I have enough material (over 5000 posts now) that I can go back and reblog. Which is essentially what I did with this post

       1. Found it: http://www.avc.com/a_vc/200…Not sure how I missed it earlier…

17. Fred – awesome anecdote from your first board seat. I’m curious – when you’re doing your initial due diligence on a new investment, it seems based on observation that you use the particular service or technology a ton before investing. And presumably get to know the entrepreneur very well too. Do you apply this “get your hands dirty” methodology pre-investment…i.e. get to know the engineers, etc before putting $ in? Interested in any later stage VC’s who may read this too and whether they get deep with sales team, etc.

    1. We try but I find you can never really know a company until after the investment closes and the ‘show’ is over

18. Brilliant!

19. Great post. I wonder whether younger people, without entrepreneurial experience of their own, are more likely to ‘get their hands dirty’ than the older folks who have already ‘been there, done that’. Considering how different the hi-tech scene has become over the years, can experience and “VC arrogance” hamper real ‘value add’?

    1. Its an issue. But with age comes wisdom (and arrogance)

20. Fred, love the idea but isn’t it kind of difficult to put into practice on every investment?Do you get your hands dirty with every investment or do you just let a trusted entrepreneur run with things until he asks for some advice help? I’m thinking of investments in things like Twitter / Zynga where you have a serial entrepreneur or someone you’ve backed before.

    1. Well pincus is always pushing me to ‘play the games’ so I don’t think so

21. Sorry, I’m not with you on this one. I think it is one of those things that sounds good on paper, but never really plays out this way in between the lines. I think that you are called a Venture “Capitalist” because the vast majority of the value that you provide is access to money. The end. The other stuff – connections, access to resources, savvy advice, etc… – is marketing fluff, attempts to differentiate from other VC or best case, comes with some quickly diminishing returns. Many venture guys have been successful in really leading a business once, maybe wildly successful, but it was often a long time ago and mileage often vary.And while your initial investment in hands-on experience might have been a good and noble start, how often did you re-invest heavily like that to really stay on track of changes? I’ll give you that the VC lot is smart in general, but I don’t believe it is practical to maintain that deep perspective via a monthly board meeting. Just saying.

    1. From discussions I’ve had with my more experienced entrepreuer friends along with my own personal experience, investors who can not only provide capital but insights and perspective are so much more valuable. To disgard connections, advice and resources as just plain marketing really short changes the benefits of a knowledgable investor. Most entrepreneurs change courses and their business idea a handful of times before they meet either success or failure. Perhaps your point would be true for the case in which an entrepreneur nails the business plan in one shot but how often does that happen?

       1. I didn’t say that you should disregard the help when it is available. And I didn’t say that VC don’t try to help or that it it is worthless. I said it is a minor point with diminishing returns.Of course there are nearly zero entrepreneurs that nail their business in one shot – even in the odd case, the perfect startup would take the benefit if available. I’m not commenting about the consumer side of this value proposition.

    2. That hurts. Its not marketing bullshit in our firm and if you call or email the teams we back you’ll find out that I am right

       1. I’d love to know more – It would be interesting to know how much of your total time, approximately, do you invest maintaining your deep knowledge across all your active investments?

    3. I think this is a great point.However, over years of reading this blog we have seen Fred *do* get very much into the business of the companies he invests in. Sure he had to spend a week learning about a whole new business when he was 30, but since then he has been spending “a day here and a day there” learning the marginal changes that occur in industries he covers. As an early stage investor he probably does meet most of the team members – and already knows many of them personally or by reputation. And he studies the areas for future investment quite diligently.I say the latter from a minor personal experience. Years ago Flatiron Partners were considering investing in our start-up (no, it did not work out) and were very clear about what they knew about, and what they thought they would need to learn about in the new industry before feeling comfortable making an investment.

22. Until someone puts on the hard hat, changes the oil, or stands behind the makeup counter in high heels for 12 hours straight, they cannot understand the business, let alone come up with ways to actively generate it.I call that the eunuch in the whorehouse.

    1. BTW at Estee Lauder, for years if not still, they required all execs to stand behong the counter.Aerin Lauder was not excepted from this.

       1. Tereza – can I just say I ABSOLUTELY LOVE ‘the eunuch in the whorehouse’!!!

          1. Feel free to use it, digital sistah!Creative commons.

       2. That’s awesome. The gotham gal started out managing the cosmetics floor at macy’s in kings plaza brooklyn. She learned a lifetime of lessons in a year

          1. I’ve been following (e-stalking?) the gotham gal and she is a total woman. This Macy’s info takes it to the next level. Wisdom from brain smarts combined with feet-on-the-street smarts is as powerful as it gets.I would be very keen on doing a mind-meld with her on my startup thingy, for early feedback. Do you think she’d be open to that?

    2. I rarely use my primary tumblog, but I am totally quoting the “eunuch in a whorehouse” line. Just funny.

23. Great message. More decision makers should think like you.

24. As is normally the case in venture, there’s no hard-and-fast rule about what kind of in-depth company expertise is required to help a company. I remember a friend telling me about a company (Rational Machines, which became Rational Software, acquired by IBM for $3 billion) and its investor (Arthur Rock). The company struggled for years to get its product out, with delays coming from firmware issues. After talking about it for several board meetings, the investor said, “I’ve had enough. I want to see the firmware so I can see directly what the problem is.” So much for understanding the business, but this investor was clearly a big help to the companies he was involved with (Intel, Rational, Apple Computer).I’ve been in way too many board meetings when venture investors offer such pablum as “If it makes sense, we should do it” or “Now is the time to build a significant barrier to entry,” and it’s easy for entrepreneurs to rush for the air sickness bag when they get this kind of well-intentioned but useless advice. Fred’s example is great, but I’d add a couple of things — UCA was a great company, and Fred — even in his early days in venture — is extremely smart and perceptive. I suspect, though, that we could find a lot of people with “venture capitalist” on their business card today who would be benign/harmful to their companies, no matter how much time they spent in the bowels of one of their investments.

    1. Agree. I’m personally very wary of VCs with no operating experience. Pontificators from Wall Street are the worst.That’s why entrepreneur-turned-VCs like Mark Suster are so refreshing.

       1. Mark is awesome

    2. I want to see the firmware!Great story tedI am going to ask to see the backend database the next time I visit a certain portfolio company 🙂

25. Great great sage advice. I got into advertising by accident. Took a flier on a start up that had a great idea two really young guys from France were pursuing. I was an independent sales person commission only contracted to develop business in the entertainment industry. I spent a few months learning advertising at 40 years old and used the two principals also since they actually had more experience than I did. But I had 16 years of Sales in B2B. We had a big fall out when one of the principals who never sold anything in his life tried to run how I did my job (especially after 5 months of working for free growing a pipeline of business I was not receptive to this). The other guy was great and he spent time learning and observing. But this same type of tension helped sink that business. In my prior jobs I always learned other people’s jobs so that I could add value to the sum of the parts. Even though I was in Sales I know every single facet of business (Operations, Quality Control. Contracts, Purchasing, Warehousing, Design, R&D, Manufacturing, Marketing, Strategic Planning, Bus Development) except accounting and some areas of Law. I have a Finance Degree yet had credibility dealing with real Rocket Scientists and Engineers. Knowledge is ammunition. Credibility is everything. Never walk into a meeting with your gun empty of bullets.

    1. I wish everyone could be required to spend time carrying a bag, getting doors slammed in their face, and earning pure commission.It is humbling and gets you very clear, very quick on what works and what doesn’t.Sales is not magic and popularity.It’s a 24/7 job with a long cycle to ramp-up.To “squeeze water from a stone” takes a massive amount of work and time, a highly entrepreneurial mindset, creativity, persistence, intelligence.And like you, the great ones who are pushing the envelope in new transformational businesses understand the rest of the business (tech, fin, ops, supply chain, etc) and bring that intel back to the business to help those areas.That’s ‘strategic sales’.

       1. So true. Selling is something that you have to learn by doing it. And its a critical business skill

    2. Great last lineI bet JLM agrees

26. This is a lesson for entrepreneurs as well. The lead entrepreneur needs to really get his hands dirty and make sure he has a solid understanding of everything going on in his company, which is a large amount of knowledge, especially for an entrepreneur early in his or her career in a specific industry.Not everyone agrees with this philosophy. But, I’ve seen too many disasters of entrepreneurs with an idea trying to outsource development, too many very frustrated engineers, etc. They become real problems.Here’s Stephen Wolfram on the topic: http://www.stephenwolfram.c…

    1. I have had mostly awful experiences with outsourced development. I’m not a fan for the core product/service

27. This is good advice – I’m in this position now sitting on my first board, not as a VC but as an angel investor. We raised a Series A about 18 months ago and I struggle to be credible when the VCs are firm in their beliefs but I perhaps think differently or even opposite. Having the front-line view certainly adds credibility.

28. Fantastic contribution, Fred. I wish for a day when thinking like this was considered commonplace, because from my perspective it’s the only way to go. It doesn’t help you as a VC or me as an entrepreneur to enter into a business relationship that does not maximize our collective strengths.

    1. I can imagine the hands on technique is a product of the investment strategy of the partnership. A diverse investor may work best more hands off, but supply needed capital to experienced entrepreneurs that they feel confident backing.

29. great one – i reblogged that last line.

30. I think an investor with that desire of involvement is certainly an asset. I also think that this applies to entrepreneurs as well. Some so called entrepreneurs that I’ve met tend to be “management” only types. They really don’t understand what’s going on at every level and they assume that they are big picture only and that’s okay. I think that’s a fatal flaw because when Sh*$ hits the fan, they tend to blame everyone but themselves. Just like a good investor, a good entrepreneur should also be the same way, they may not be able to do every job well (which is why one builds a team), but they have to know how everything works.

    1. Agreed

31. I love this post. It’s also really reassuring to me personally that someone like yourself was on the board of a tech company in Buffalo, NY that eventually achieved and exit.

    1. Ron and Jordan are responsible for creating thousands of jobs in buffalo over the past 30 years. The answer to what ails the post industrial regions is more peoplke like them

       1. Being a unique job provider in a smaller region can be a big advantage.Employees are more loyal and take a longer term view. The job really matters to them. I’d hire someone for whom this job is really important to them any day of the week. They’ll go to the mat.Years ago I consulted to Meredith Corp in Des Moines. (ie publishers of Better Homes and Gardens and many others). Not a start up now, but was a family start up back in the day and still had the feel of a small company.If you’re in publishing and live in Des Moines, you work for Meredith. Your kids are in school there and you’re deep in the community. So if stupid sh*t happens at work, which it always does, you figure out how to finesse it and make it lemonade. If someone were to puff out in an egotistical rage, it would be perceived as practically psychotic.BTW, all these people had many years of stock built in the company. Totally motivated to think entrepreneurially, and they did.These were also perhaps the nicest people I ever worked with. This was a cost-cutting job right after 9/11 — and they were still super nice.At one point one employee was being a little protective about sharing data with me. My key client person said, “Oh, don’t worry about her. She doesn’t really know how things work here. She hasn’t been here very long.”.”Oh? How long?””Seven years.”LOL.Loyalty counts.

       2. It’s so true. I would love to see or be a part of adding a tech incubator of some sort to the larger Downtown Canalside Development that Jordan Levy is heading up. http://www.eriecanalharbor….

32. Entrepreneurs should work this thinking into their board meetings/interactions and also challenge potential investors on how they are going to get involved. Try to use the board in internal sales sessions, brainstorming on new products, etc.

    1. Yup

33. Fred,Great post. I think this applies to leadership in general, whether in the VC/startup space or in the larger umbrella of corporate america. So many leaders pretend to understand what happens at the individual contributor level and while they may be able to manage a P&L, managing and motivating people is really the key to success. Getting out there and showing you aren’t afraid to get your hands dirty is the best way to build trust with those individual contributors and actually show them that you understand (and appreciate) what they are doing.

    1. Yes

34. Thanks man, good advice.

35. Every time I get my hands dirty I learn more than I ever expected. Going up the greater hill pushes us to be better than we otherwise might.Making it a habit to partner with startups and not just write a check, is a trait sharp founders look for in investors. This ties back to the limited number of deals that can be made with UVCs philosophy per year.

36. One thing I have certainly learned is that taking dumb money is not worth it. Any board member that does not take the time enough to learn about the business is going to be more trouble than they are worth.

    1. def gotta filter out the stupid asses

37. Patience is a great quality, and this is something all entrepreneurs and VCs need to understand a business. The other 3 Ps are passion, persistence, and most importantly product or productivity. I think it’s great that Fred has provided this advice.

38. Even better, go out and spend 2-3 days with the portfolio company’s customers. A consumer internet VC has the luxury of becoming a customer… this isn’t possible in other markets like enterprise software, or even the money-side of a 2-sided consumer/business internet model.Pete

    1. Amen, brother.

    2. Good point. It takes some work to do that right however

39. Nice one, Fred.This also applies to levels within a company: I believe every exec or senior management candidate should get his/her hands dirty for the first 3-4 weeks in customer service. Best way to get hands-on experience about the product, the needs & pains of its customers.

    1. Yup

40. Great story with some very valuable information. I have always thought that VCs should bring more to the table than just money. I think that entrepreneurs should look for VCs willing to – as you say ‘get their hands dirty’ – or at least be able to open doors for these companies – then money second.I know that this goes against the VC model or shotgun approach to investing – but shotguns can be aimed and if aimed properly (by knowledgeable people getting their hands dirty) – the pellets from the shotgun might just hit more marks.Glad to see these entrepreneurs made you an better investor.

41. Great write-up, I totally agree. I was watching “Undercover Boss” and realized that what most people think is common sense, is sometimes lost when you step too away from what happens on a day-to-day basis.

42. Passing from papers and cold figures to real action provide VCs and entrepreneurs the sense of running the business and learning how is it to deal with it everyday. Is a must for every leader to know its business on detail, and so it is for those interested in investing on it.There is an interesting question about What would an investor need to know about my business idea before funding it? Join the conversation here http://bit.ly/3nZkel and check what other experts have recommended!

43. Yes I always believe in Rolling Sleeves and Getting our Hands Dirty. It is the best way to start your business. I never ever want to do business with out any knowledge.

44. This is the classic idea of leading by example. It’s extremely important for business owners, bosses, anyone in charge, really, to have a good understanding of the work going on “below” them. I’ve seen so many examples of business that crumble because the person in charge has no real idea of what the employees are doing. Good article.

45. word

46. I watched the whole thing too and was impressed as well. Great concept, well executed.To be fair though, he didn’t say anything about the calendar videos. I suppose he meant he’d be happy if one of his girls became a Hooters waitress.