I remember when I was in my early 20s and just starting out in the venture capital business, I came across an old wall street saying that “a market climbs a wall of worry.” I didn’t understand it and that made me want to. I read a bit about the saying and came to understand that bull markets require an uneasy feeling.

Worrying is a fundamental characteristic of most investors I know. Greed and fear are the two opposing elements of market forces.

I read a board deck this weekend from a portfolio company that is absolutely crushing it and forwarded it to our team at USV with a short memo outlining all of the risks I am worried about. Not a single enthusiastic comment was in that email.

Why is that? Because although we invest on “what could go right”, we manage our investments on “what might go wrong.”

I believe one of our greatest assets to our portfolio companies is to be an early warning sign of trouble. If we can help the founders/leaders and their teams be aware of risks on the horizon, they can manage against those risks. And if there is one thing investors, particularly ones who have been around a while know about, it is how things can and do go wrong.

Of course, how you worry is critical. You can’t weigh down the leadership teams with your worries. You can’t fill up the board meetings with angst.

You have to be supportive, optimistic, encouraging, and positive in your interactions with founder/leaders and their teams. But you must also flag areas where there could be trouble. Getting that balance right has been a work in progress for me for my entire career.

So being a worrier is an important characteristic in an investor. But you have to mostly keep those worries to yourself and your partners/team (this is a place where partners are invaluable). And you have to decide when a worry is significant enough to share it with your portfolio companies and then you need to find the right moment and narrative to communicate it. When you do it right, the teams appreciate it immensely.

#VC & Technology

Comments (Archived):

  1. JimHirshfield

    This is a great parenting advice. Thanks.

    1. fredwilson

      A lot of similarities

      1. sigmaalgebra

        Okay, there isThomas Gordon, Parent Effectiveness Training: The Tested New Way to Raise Responsible Children, New American Library.The main technique in that book is sometimes called “reflective listening”, maybe a little like talk therapy in clinical psychological counseling.So, the C-level people in a portfolio company need to be “responsible children”?How can an outsider be more aware of dangers to the company than the CEO?Be careful: Worrying can be irrational, from a potentially serious disease, i.e., from anxiety disease as inDavid V. Sheehan, M.D., The Anxiety Disease, ISBN 0-553-25568-1, Bantam Books.Some of the results can be paranoid behavior, obsessive-compulsive behavior, etc.E.g., sure, a CEO can get “shot at”, e.g., by competitors, nuisance law suits, etc. So, as athttp://freebeacon.com/natio…is a remark from Secretary of Defense, General James “Mad Dog” Mattis:There is nothing better than getting shot at and missed. It’s really great.Well if the CEO is still there, then so far all the shots have missed and it should be “really great”!Gee, maybe the CEO borrowed some money and is in doubt about just how to pay it back. Well, there is the adviceNever borrow a little money. Instead borrow a lot of money. If you borrow a little money and can’t pay it back, then you have an angry lender. If you borrow a lot of money and can’t pay it back, then you have someone who wants to help you.from founder, COB, CEO F. Smith of FedEx.

    2. Adam Parish

      I was about to make the same comment and then forward this to my mom. Haha.

  2. Tom Labus

    There is always that period before public markets crash when we start to see articles touting our ability to manage the US economy and that we now know all the right levers to punch to make things right. Those same signs exist within companies and can be just as dangerous.Poundings usually come when least expected.

    1. Pointsandfigures


  3. William Mougayar

    That balance you mention is key in gaining credibility with the startup for listening to you. And sometimes they have to ignore you once or twice and realize you were right in hindsight, then they will take your advice more seriously.

    1. Joe Cardillo

      Reminds me of the Cynefin framework, heady stuff but good founders are either unconsciously or actively using it to mitigate fear and the unknown.

    2. JLM

      .”It is amazing what you can accomplish if you don’t care who gets the credit.”The thing for a boardmember or investor to do is NOT to share their worries; it is to ask the CEO what they are worried about.If it turns out they are worried about the same thing, then you have a basis to exchange thoughts.If they are not worried about the same thing, you ASK them if they are worried about XYZ.Then, it doesn’t become a competition between strong personalities and nobody has to be “right.”A smart boardmember or investor wants the CEO to think it was his idea and that he solved it. In that process, there is no contest as to who was right or wrong. It creates and unleashes energy rather than absorbs it.The question to ask is, “What’s keeping you up at night these days?”JLMwww.themusingsofthebigredca…

      1. cavepainting

        Learning to keep people’s egos out of key decisions is the key to getting them right. Doing this is an art though and one of the lesser discussed topics in general.Lot of Leadership is learning how to navigate people and situations. Can’t teach this in business school.

  4. William Mougayar

    Q- what happens if you emit such warning, and the startup/ceo isn’t responding or seeing the same thing you are.

    1. fredwilson

      It depends on a lot of things but if you have a board then I like to see what the other board members think

    2. Supratim Dasgupta

      can it be the reason that because the CEO has much more indepth knowledge of the situation that he doesnt think the advice is right? And he doesnt have time to explain all of that to the VC or maybe its too complex to explain.

    3. Adam Sher

      Find the person who the CEO listens to and tell them.

  5. laurie kalmanson

    Parenting, too.

  6. ChrisS

    excellent advice for all of life actually. remaining positive, courageous and energized is impossible when gripped with fear. awareness, balance, communication, honesty and humor seems like a helpful recipe.

    1. JLM

      .It is exactly at the instant when things are dicey that leaders and their followers are best served by maintaining a positive, can do attitude.Leaders take followers to places they could never get by themselves. Managers ensure it is a pleasant journey and allocate the resources to make it so.In the days after Dunkirk, Winston Churchill gave a speech which set the tone for all time. In the face of a disastrous defeat in which he barely extricated the English manpower, leaving their weapons in France, Churchill gave a speech which set the Krauts back on their heels.Churchill had taken over as Prime Minister from Neville Chamberlain on 10 May 1940. The Germans invaded through Belgium, Luxembourg, and the Netherlands on 10 May. Talk about a bad first day at work, eh?He gave three memorable speeches:1. 13 May 1940 — “Blood, Toil, Tears, and Sweat”2. 4 June 1940 — “We shall fight on the beaches”3. 18 June 1940 — “This was their finest hour”If you have never listened to or read these speeches, you owe it to yourself to get them, a bottle of whatever the Hell you drink, and a place you can listen to them uninterruptedThose three speeches and Winston Churchill was all that stood between the darkness of Hitler and the light.In those speeches, he laid out the Vision for a startup whose Mission was to free Europe, destroy Germany, and kill Hitler.People remember the phrase “We shall fight on the beaches” but the big takeaway was “victory, however long and hard the road may be” — the end game.The guy was sitting there with his essentially unarmed army and telling his nation and the world he would fight on to victory.And, guess what? The Son of a Bitch did it.That is the most powerful example of the strength of attitude I can imagine.JLMwww.themusingsofthebigredca…

  7. Joe Cardillo

    From personal experience and watching others, worrying is also the biggest reason to have a co-founder rather than go it alone. You can lie in bed awake at 3 am a lot without knowing if it’s only in your head.

    1. JLM

      .Fair play to you. The problem begins when your co-founder calls you at 3:00 AM to chat.JLMwww.themusingsofthebigredca…

  8. Saul Hudson

    I like to respond to somebody sharing their worry as them helping raise my awareness. Worry can create angst as you say. But raising awareness helps me to address potential challenges, while keeping a positive outlook.

  9. creative group

    CONTRIBUTORS:Dismissing or failing to heed the lack of any fundamental model in any investment by any so called seasoned investor, VC, Operational Manager is pure reckless.The promotion, cheerleading, or pimping without stating Caveat Emptor on any speculative craps is shameful.History has shown Markets endure after corrections. The key word Markets.

  10. Francois Royer Mireault

    Very interesting. Your comments make me think it’s rare to find people who can both worry and be optimistic in a productive way. Some people are plain negative, others are simply dreamers. To be able to flag risks AND highlight opportunities (in the same conversation) require a good control of that ‘switch’ in our brains.

  11. Chimpwithcans

    What a good post and a Fascinating topic. I would note that Worry can definitely be overdone. I see how friends and family paralyze themselves. Also, oftentimes worry does not have a gradient. It tends to be all or nothing. If genuine, the fear we have for a market crash is similar in chemistry and feeling to the fear of attack by machete…little subtlety, just an instinctual physical response. Important to recognize and respond appropriately.

  12. Pointsandfigures

    “We think it’s going to work and think it’s going to be big, but this is how it could fail” Better be more than one reason for failure if you are doing your analysis correctly.When you entered into a longer term trade, you always looked at that. You also always tried to figure out where the exit door was going to be-and how to get through it first.

    1. sigmaalgebra

      Maybe the trade is from a rule that has a good track record. So, you know that from the track record the odds are with you so that once you made the trade you could just lean back, relax, and count on the rule?To me, that’s the main advantage of writing some software for the “rules”: You get something easy to test objectively and, if it passes the tests, apply objectively.

  13. PhilipSugar

    This is why diversity is so important. All kinds of diversity. I love the unbridled enthusiasm of young people. I don’t mind the worry of people that have been through these wars five times over thirty years like me. But you are right you have to temper worry and manage it.But also as Charlie says you have to have people that are willing to call you out on it to. I don’t mind people calling me out and saying I am being a cranky old man.It actually makes me smile because a long time back my two year old picked up on the saying and said: “you a cwanky ol maan” Oh it made people laugh so hard he would keep saying it just to get the laughs.

    1. Susan Rubinsky

      I love working with young people too. I just hired a new intern and trained her and my son this past weekend. Such fun and enthusiasm. We all have things to learn from each other. And, truthfully, I love how fast young people pick up on tech — makes training a breeze.

    2. JamesHRH

      Diversity gives you new angles of worry!LOL

    3. LE

      But also as Charlie says you have to have people that are willing to call you out on it to. I don’t mind people calling me out and saying I am being a cranky old man.Well if we assume that Charlie’s ‘VP of Sales and Marketing’ is just an employee and not a founder or even an owner (and I am not talking about some trivial employee ownership) then what he has vested in the company is entirely different than what Charlie has. VP stands to loose perhaps (salary, bonus, job) but nowhere near psychologically what Charlies does if the company fails. So Charlie has a right to be a cranky old man and not want to party. In fact if he did party (sounds like he did eating a healthy burger and beer; any fries?) he most likely did it for the employee and not himself. In order to provide positive reinforcement for the employee. Or at least that is what I would have done. Necessary evil. [1]And winning a customer is only half the battle and everyone knows this. It’s now up to Charlie to make sure the product continues to have the quality that those customers will expect. And is on the shelves. If something goes wrong and he looses the account that is what his worry now is. The salesman (vp whatvever) probably isn’t dealing with those issues. He is not the ‘owner of that aggravation’ [2]. So this is a bit like celebrating when getting accepted to a school. You still now need to worry about the grades and making it through many years. [3]Of course the preceding applies to a traditional business where the market is not growing and you don’t have the advantage of a pot of money to fix problems.[1] Proper unwind is part of relieving the stress of the unknown. That is what Charlie wanted to do.[2] This is a saying that I came up with in the 80’s. It describes the primary person who has to deal with and get aggravated with an issue. This doesn’t mean that others are impacted. But generally the ‘owner of the aggravation’ is the one who acts as a primarily insulator or sacrificial zinc or shock absorber and protects others.[3] And in business or life don’t believe those stupid deathbed “I worried to much” stories ie “I didn’t need to”. There is a difference between things you worry about that you can’t do anything about (kids off at college) and things you can do something about.

  14. Susan Rubinsky

    Awareness is the key to worry. Balance can only be found by people who are aware. I prefer the term “concerns” to the word “worry.” Concerns have possible solutions.I work with two different business leaders who are what I would call “worriers.”One has learned to take his worries, turn them into concerns and then work on mapping out scenarios and possible solutions. This leader has awareness. I can easily talk with this leader and point out possible risks so that we can discuss solutions. He calls on me often to gain my advice on his concerns and I often work with him to map out solutions. He actually calls me now and says, “I need a buddhist business consultation.” (Shana might like this! Another Buddhist moment on AVC)The other biz leader is a flame thrower. Every tiny upset becomes a giant fire. I am on the board and often am called on by him and then my job is to talk him down. But he is stuck in a cycle that he does not know how to get of. The way to deal with these leaders is tricky. You don’t want to break trust but you also need to suggest pathways out of the fire (short term) and pathways toward learning how to manage worry and gain awareness (long term).For Shana:“Fear is a natural reaction to moving closer to the truth.” ― Pema Chödrön

    1. cavepainting

      Yep. Awareness is the key to everything. If we develop space around our minds that can watch and witness how it thinks, it can unlock the keys to many things in life.

  15. Lawrence Brass

    If worry is the yin, to care for actively about those worries is the yang.The record shows you excel at both.

    1. Susan Rubinsky

      All worry emerges from the ego.

  16. JaredMermey

    Paranoia is a symptom of caring.

  17. WA

    “There is a great difference between worry and concern. A worried person sees a problem, and a concerned person solves a problem.” Harold Stephens. Excellent body of work, many of his books a fave.

  18. jason wright

    https://www.google.co.uk/se…worry – “Old English wyrgan ‘strangle’, of West Germanic origin. In Middle English the original sense of the verb gave rise to the meaning ‘seize by the throat and tear’, later figuratively ‘harass’, whence ‘cause anxiety to’ (early 19th century, the date also of the noun).”I wonder which part of the brain engages in worry, and what primitive instinct it stacks on?

  19. Rob Larson

    If I were running one of your portfolio companies, I’d want to know what you were worried about at all times, not just when one is “significant enough to share” and “at the right time.”I would want a weekly email with a list of all the things you were worried about. I’d keep that list in the back of my mind, along with my own list, while I am taking in data and making decisions, so that I could be attuned to any data points that relate to the list of worries, in real time as the data is coming in.I’d also appreciate your judgement in knowing when is the right time to sound alarm bells in addition to putting an item on the list.(Obviously not everyone has the same personality as me, so some of your CEOs might rather stay oblivious to your worries until one becomes “significant enough to share.”)

    1. Adam Sher

      GPs worry about their portfolios performing well enough to raise the next fund, then performing well enough to hit the carry, and lastly, spending (i.e. investing) at least 75% of the money they raised so they can raise another fund.

      1. Rob Larson

        Haha, well played – I can’t argue with any of those points

  20. JLM

    .Worry is a consumer of energy. It is an energy sink.Omar Bradley, America’s foremost amphibious planner is reported to have said, “Worry is not productive. Professionals plan.”The guy went on to plan the North African, Sicily, Salerno, Anzio, Southern France, and Normandy landings. He was the best large scale amphibious planner in military history.Planning for contingencies is what he was talking about. “What happens if the landing is opposed? What happens if it is not?”In business, no sooner do we finalize a plan than we should ask, “What happens if the market doesn’t respond in the manner we think it will?” This is basic contingency planning.Every company should have a range of plans, a Plan A, a Plan B, and — my personal favorite — a list of horribles. A list of horribles is everything that could ever go wrong. Some of them WILL happen.Contingency planning around staffing — continuity planning — is essential.Yet, I find almost no companies who effectively plan for the contingencies, hence, Fred’s worrying.Convert worrying into solid planning. Brainstorm (something a lot of people and companies never do) and make contingency plans.When I was in business and about 45, I came down with hepatitis. I was out of work for 18 months. Three weeks earlier, I’d taken all of my executives to Jamaica for a contingency planning session. We returned with a firm, written plan of succession.I did it, primarily, to update an earlier plan, but also because I was getting ready to start another business.When I went down, the plan took about 8.5 seconds to kick into gear. People accused me of having been sick already when we went to Jamaica, but that was not so.Turn worry into productive planning. Plan for a lot of unlikely outcomes. When one of them emerges from the primordial slime, you will be ready.Do not waste energy, harness it.JLMwww.themusingsofthebigredca…

    1. sigmaalgebra

      “Worry is not productive. Professionals plan.”DAMN good. A keeper. Thanks.> JamaicaSo, suspicions confirmed: If go there, then wear rubber gloves, don’t get close to others, don’t drink the water or eat the food. Otherwise, sure, have a good time in that tropical paradise!When come home, thoroughly wash hands, feet, hair, etc. and burn all clothes, shoes, socks, etc. that brought back from Jamaica!Uh, IIRC, the main way to get hepatitis is from contact with fecal material from others who have hepatitis.Uh, right tropical paradise!Planning for contingencies is what he was talking about. “What happens if the landing is opposed? What happens if it is not?”For my startup, I’m still collecting ideas and data on just how to do the semi-public alpha test, accepting feedback, beta test, publicity, going live, publicity after going live, having users “love” (Paul Graham) the site, etc., but I should do more onIn business, no sooner do we finalize a plan than we should ask, “What happens if the market doesn’t respond in the manner we think it will?” This is basic contingency planning.And I’m not fully up to “think it will” and am still partly with just hoping it will. While I don’t know why, I have to accept that the market might not respond in the manner I think/hope it will.I have some nice math that says that the results will be by far the best. Thus, the users should really like the results; there is a quality of an interactive game that for some users may be “addictive”, etc., but none of that is a solid proof about PEOPLE. On the bright side, lots of people go for lots of goofy things; maybe they will go for my relatively good thing!A keeper. I needed that. Thanks.

    2. PhilipSugar

      I agree with all of your points. But I think the first step to taking a plan that outlines the list of horribles and a plan B is to actually worry about it.My biggest battle ever was when we sold to a company and the CEO said we were going to sell a record amount of enterprise software in the 4Q of 1999.I was COO and had the CFO come up with a plan B and he was pissed. He said that it was negative attitudes like mine that would make us miss our goals.You know how much software we sold that quarter? None, nada, zip. There was this little thing called Y2K. It was then I wrote a paper which was published in Software Magazine about selling Software as a Service. You can look that up.We had to sell out to a public company

      1. JLM

        .Back in the day in Ranger School, you learned how to issue a 5-paragraph field order. One of the components was to set out the “casualty collection point.”The first time I ever heard that I though, “Hmm, seems like a self-fulfilling prophecy. Bit defeatist?”Then, I realized it was critical to survival to get the wounded out. Because, there were definitely going to be wounded. Some plans will not work as planned, so to get on to the alternatives is being an adult.The second you finish the plan, you should begin to draw up the list of horribles and Plan B. It is realistic and it will give you confidence and a quick first step if it is needed.If you get used to doing it and you exert the discipline, it becomes second nature.JLMwww.themusingsofthebigredca…

      2. cavepainting

        | He said that it was negative attitudes like mine that would make us miss our goals.I have heard too many people from traditional bigco backgrounds say stuff like this and it can have very bad consequences both to culture and business performance.The reality is that we need both executives and employees to point out problems more often and faster than drinking the kool-aid and singing Kumbaya. But unless the culture celebrates that, no one will want to put up their hands and say anything.

        1. PhilipSugar

          I cannot tell you how spot on you are with this comment.I have said this before, but blindly spending to the budget and holding endless internal meetings are the two things that some (although I’d say most) big company executives do that can kill you.I’d argue they kill big companies too, but you have more momentum, so the process takes longer.

    3. Girish Mehta

      The process of planning is key. “Plan” as the verb is what provides the power to “The Plan” as the noun.”Plans are nothing; Planning is everything”- Eisenhower.

      1. JLM

        .”The first casualty upon contact with the enemy is the plan.”That’s why you have a Plan B.JLMwww.themusingsofthebigredca…

        1. PhilipSugar

          Or as my favorite sports quote: Everyone has a plan until they get punched in the face: Mike Tyson.Or Just when you think you know the answer I change the question: Rowdy Roddy Piper.It is easy to say: skate to where the puck will be: Wayne Gretzky and he is an all time great, but the other two are when you are getting hit in the mouth.

  21. Christopher Seshadri

    Let’s play name that billionaire…”Be fearful when others are greedy and greedy when others are fearful.” Said by who?

  22. awaldstein

    When Franz Boas said the Eskimos had fifty different words for different types of snow, he didn’t mention that there are that many types of worry as well.There are.

    1. jason wright

      i guess the Inuit’s greatest worry is that all fifty types of snow can melt. we all need to worry about that.

  23. LE

    I believe one of our greatest assets to our portfolio companies is to be an early warning sign of trouble. If we can help the founders/leaders and their teams be aware of risks on the horizon, they can manage against those risks. And if there is one thing investors, particularly ones who have been around a while know about, it is how things can and do go wrong.I thought this was very well said [1] and then wondered if it appeared on the USV website in any way. I don’t see it there from a quick check. The USV site is nice but the above made me wonder who the site is targeted toward. LP’s? Startups? Potential employees? All? I have probably said this before but I wonder why the USV site doesn’t talk at all about reasons to try to get an investment from USV. Don’t think it’s needed? It’s obvious? But in a competitive environment that is not the right way to see it.I decided to do a quick check (IRL I would have done this exhaustively) [2] and saw that a few firms just tend to essentially name drop as if they don’t have to discuss why you should approach them. As in ‘everyone wants to have their art hang in the MET, idiot, don’t ask us to sell you..).But then I did see that Firstround.com does have a FAQ. And it’s linked at the top of the home page (which is great and where it should be). And while I didn’t check the entire FAQ I did see this:http://firstround.com/faq/?…”How do you help your companies acquire customers? How do you help companies grow?”And this:http://firstround.com/faq/?…”What makes First Round different? “[1] There are things that I would change to not appear as negative. Like when you are buying a product you don’t want to think that it might break down you want to think emotionally that’s its going to be smooth sailing. So a few tweaks for sure.[2] But maybe not. If researching for someone else yes. If for what I am doing I don’t always want to know what others are doing because it messes with my gut.

  24. Jeff T.

    “So being a worrier is an important characteristic in an investor.” — and founder. I take the tack that you need to be a paranoid optimist to be able to last as a founder.

  25. Alex Murphy

    It seems to me that one writes about “worry” when one is “worried” about something.What do you see on the horizon @fredwilson:disqus that you think we should all be planning and building contingencies for?

    1. creative group

      Alex Murphy:Fred’s fiduciary duties would be violated if he shared current and ongoing issues. (Ph.D isn’t required)Assumptions not required, Fred has various financial interests to be concerned with just one. He will tell you he is concerned with them all.Crypto-currency is a sector without fundamentals or guidance to even comment upon. Self explanatory.UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT

  26. Supratim Dasgupta

    Fred, what do you recommend to VCs ? Communicate these points in board meetings where there are other shareholders/VCs or privately?

    1. JLM

      .If you want to speak directly TO someone, you do it face-to-face.If you want to speak WITH someone, you do it in a group setting.If you want to speak ABOUT someone, you do it at a bar.If you really want to speak directly TO someone, you ask them a question and see how they reply. Socrates invented that.JLMwww.themusingsofthebigredca…

  27. aminTorres

    Really? where is this coming from? love the idea.I often think Fred will be a great Mayor. But I doubt he would want to.That, or a great owner of the Kicks <- This, he would definitely want to ;).

    1. JamesHRH

      Own the Knicks +1000.Mayor? Fred says he would be a really bad AVC portfolio CEO. Major city mayor – done right – is a CEO job IMO.Plus, he’s a perfect fit where he is.Does Dolan play poker? Maybe Fred could…..

  28. Evan Powell

    Yes, exactly. Reminds me a bit of parenting actually. Learning requires skinning one’s knee – and on the other hand, falling off a ladder – or hiring the wrong VP of Marketing for eg – is more than skinning one’s knee AFAIK. So is it as simple as being more proactive in sharing the concerns when the blast radius of the questionable decision is larger?

  29. george

    Clear point you shared: “And you have to decide when a worry is significant enough to share it with your portfolio companies and then you need to find the right moment and narrative to communicate it.” At that stage, it’s more art than science…Great advice!

  30. Rob Larson

    I respectfully disagree with the premise that seeking out negative feedback and wanting to hear investors’ potential concerns constitutes “needing to have your hand held” or is a sign of inexperience. To the contrary, I consider it prudent to seek out disconfirming viewpoints that your confirmation bias may be blinding you to.I guess if a founder’s vision can’t handle hearing such negative external viewpoints, then I suppose they might be better served keeping their head down and ears closed, ignoring everything but their own vision, but I prefer not to operate that way. Not claiming my way is better, but that’s what works for me.

    1. JLM

      .The best CEOs always know where they are headed, who is on board, and who is or is not rowing in the right direction. It is fundamental.There is a great old book The Power of Alignment which is a useful read.When you are a seasoned CEO (I was a CEO for 33 years), you might be more experienced in working your board than the boardmembers.I used to have “no drama” board meetings which were a piece of cake — clear, consistent agenda; docs distributed a week before the meeting; call to boardmembers before the meeting; crisp meetings with all subcommittee meetings (audit, comp, independent directors) before the main board; let the CFO handle the numbers, everything handled by a Corp Resolution; call to anybody who was on the losing side of anything after the meeting; and minimalist meeting notes.Four meetings a year, one annual meeting, one off site.I used to conduct an Anonymous Board Survey, have a written Employment Agreement, have an annual performance appraisal (written) on a date certain, an Anonymous Company Survey.Anybody who wants an exemplar of any of the surveys, ping me and I’ll send you one.As a CEO, do you want to be the best you can? Then, you listen to people. You don’t let things fester. You don’t take crap, but you aren’t a snowflake. Never be afraid of anyone having a different opinion.Be prepared to make decisions even if not everybody is on board.Nobody is perfect.You can do this without any drama.JLMwww.themusingsofthebigredca…

      1. Rob Larson

        Great comment, thanks for sharing.

    2. creative group

      Rob Larson:”I would want a weekly email with a list of all the things you were worried about.” -Rob LarsonOur response was based upon that part of your comment.If you need someone to babysit your running a company you don’t need to run it.

      1. Rob Larson

        I guess we can agree to disagree

      2. cavepainting

        I agree with Rob here. Irrespective of their experience, blind spots exist for all CEOs and are usually fatal if not dealt with.Seeing the business from someone else’s perspective to ferret out some of these blind spots is an incredibly valuable thing. Not just as an one-time thing, but as an ongoing commentary can be really helpful.Ego and assumptions of certainty bring down companies faster than anything else.

        1. creative group

          cavepainting:The duties of the BOD, COO, CEO/Founder, etc are of no use then based upon Rob and your view of requiring your hands to be held. The new Entrepreneurs who receive millions in VC’s and Angel investments we can understand babysitting your investment. It is irresponsible to give that team that type of funding anyway with no operational experience.The reason the positions and assignments earn their compensation. Get a new team if the one you nurtured doesn’t work. All teams are not the A team. Hire until you acquire and groom A talent.What is the excuse for the failing Portfolio companies who have had the coaching and weekly mentoring from a VC or BOD? The multi-million dollar question. ❓What was the excuse for the best guided and funded companies❓AuctionataBeepiHelloHomeHero JawboneQuixeySprigYik YakGet the picture. You need a combination of talented team, talented support group and most of all a great service or product and not white paper driven with founders with zero operational experience but a cool haircut, photocopy of how Steve Jobs dressed and one semester of a Ivy League school. (The current model of a founder funded by VC’s)

          1. cavepainting

            I don’t mean handholding. I mean using people as sounding boards to challenge your thinking and get alternate perspectives.Unlike what you might think, startups are not a slam dunk. People fail not because they do not know how to execute, but because the environment Is very fluid and they fail in their search to make things people really want.Being in your own bubble and executing the thing you know without understanding what you might be missing is one of the major reasons why people stumble.

          2. creative group

            cavepainting:we agree with you more than you agree with yourself.We only highlighted one paragraph of Rob Larson’s reply and then clarified what we meet. We still feel there will be more successful going concerns with the best talent assembled, best BOD, advisors and consultants available to the people running the company.You take a founder, CEO without any knowledge of how to run a business (Operational Management Experience) (Thousands of VC Portfolio companies have them, maybe because it reminds them of themselves when younger or family members, mirror reflection, have no idea) with all the best assistance available and you give me a seasoned CEO in the same sector all things being equal and we will kick the inexperienced and lack of Operational Management Experience @$$. (Period!)We are also aware the failure rate for businesses no matter the experience is usually based upon lack of funding. That is why so many inexperienced Operational Management Founders funded by VC’s continue on. The cycle of finding new funding so the earlier investors can cash out.http://www.gemconsortium.orhttps://goo.gl/images/fCUY1C

  31. HP773

    This post reflects a mindset that’s common among the great value investors. Important to recognize the similarities between investors playing two seemingly different games.FW’s thoughts eerily similar to those expressed below…“Defensive investing” sounds very erudite, but I can simplify it: Invest scared! Worry about the possibility of loss. Worry that there’s something you don’t know. Worry that you can make high quality decisions but still be hit by bad luck or surprise events. Investing scared will prevent hubris; will keep your guard up and your mental adrenaline flowing; will make you insist on adequate margin of safety; and will increase the chances that your portfolio is prepared for things going wrong. And if nothing does go wrong, surely the winners will take care of themselves.- Howard MarksandIt’s not supposed to be easy. Anyone who finds it easy is stupid.- Charlie Munger

  32. sigmaalgebra

    It’s getting clear!!!! The Charlie Crystle good news: On the one hand, he’s in business and is good at it! The bad news: On the other hand, he dabbles in politics and is ….