The Founder's Commitment
The people who start companies are special people. We call them founders in the startup world and I have had the opportunity to work with many of them over the years.
They bring all sorts of important things to the companies they start (or help to start). One of those things is a level of commitment, responsibility, and care that others rarely bring to a company.
I was reminded of that today when I saw what Eric Wahlforss, one of the two founders of our portfolio company SoundCloud, wrote about his decision to step away from the company after 11 years:
After 11+ years of building SoundCloud, it is time for me to take a break, reflect and think about what’s next.
— Eric Wahlforss (@ericw) January 24, 2019
I will be stepping back from day-to-day operations and into an advisory role on March 1st.
I am incredibly proud of what we have achieved and deeply grateful. pic.twitter.com/71DQ8h0Sjv
Eric did pretty much every job in the company at one time or another, including being the CEO for a three month period in 2016. He gave SoundCloud everything he had for eleven years.
Startups are incredibly chaotic organizations with a lot of change. Very few people can make it through all of that chaos for a decade or more. But founders can and do.
Eric is an example of that and I am incredibly grateful to him, and his co-founder Alex, for the level of care and responsibility they brought to SoundCloud (not to mention the original idea and the original product!)
We meet with founders all the time and a few times a year decide to back them with our firm’s capital. One of the things we look for is that commitment, responsibility, and care, the “founders commitment.” It has to be there or it isn’t going to work. Because building a company is really hard. But also incredibly rewarding.
Comments (Archived):
I am on year 14. While no longer a “Startup” – we have been trying to pivot to new, more scalable, more exciting business model in cyber security for the last couple of years. It has been a grind trying to maintain the existing business while building a new model. A couple of days ago I met with an investor who said “forget it, your not making enough progress, go do consulting and forget about raising any money.”Perhaps he is correct. But as a founder my initial reactions was “F you. I’ll show you.” Honestly, I don’t know at what point tenacity turns to crazy. When is the time to cash in and go “this is not working” and start something else. Versus believing you are just around the corner from the breakthrough?
.We are powered by the slight, slings, arrows of our detractors. Tell me I cannot do something and I will put track spikes marks on your forehead.JLMwww.themusingsofthebigredca…
That’s just you / your type.
.Fair play.Toxic alpha male.JLMwww.themusingsofthebigredca…
It is my experience that most investors come from the world of investing. Or consulting. As such, they can see your business only at a high level and recognize the probability that you’ll (you meaning that they match you to a certain company profile) break through is some low number. What they lack is operating experience to know that your company is different in x and y ways, which changes your chance of success greatly.Essentially, they’re applying population averages to individual people. It’s not a good idea, but when it’s your only tool, what else can you do?Good luck!
For computers, especially servers, the real time data on performance, activities, etc. is like multiple, deep, wide rapidly flowing oceans. So, can get data from Microsoft, HP, and much more.Well, that data is poorly exploited, and some of it should be terrific for some important aspects of security.E.g., an AI project I was in was trying to do system management, for security and/or everything else. Mostly the approach was to look at thresholds on variables, e.g., have 10 variables and thresholds on each, and report an anomaly when one of the thresholds is crossed.So, each threshold is an interval. And the 10 thresholds determine essentially rectangle in 10 dimensions. The assumption is that the normal, safe, usual performance of the system is described by that rectangle. Are we ROFL yet? We should be.I worked up something MUCH better: The region of normal performance can be essentially any shape there can be, even fractals. And we get a false alarm rate adjustable and known in advance. In a useful sense, when a false alarm rate has been selected, the detection rate is the highest possible from any means of processing the data. I never called the work AI or learning, but in effect the technique does a good version of learning. That work totally blew out of the water with the doors blown off all the AI work.There’s much more that can be done. Did I mention that there’s a lot of data available and that mostly people have no very good ideas what the heck to do with it?
Amen. I founded my company, Interfolio, 20 years ago (next month is our actual anniversary of incorporation). I like to joke that it has been a hell of a first job, and damn has it been hard. But I honestly can’t imagine a better way to make an impact in the world and to create a legacy than to found a company.
.Couple of more years and then you’ll be an overnight success.JLMwww.themusingsofthebigredca…
.Since the beginning of time, it has been “jockey, horse, course.”It is not enough, these days, for the jockey to be committed, she also has to be a great leader.A jockey has a quirt (galloping whip) to drive performance. The most important person she whips? Herself.Leaders, visionaries, take people to places they cannot even see.Managers make sure everybody has bottled water and a cookie on the way.JLMwww.themusingsofthebigredca…
But be on guard, leadership is too often conveyed only for its good. It drives as many trains of evil as well.
.I have absolutely no idea what that means. Please translate.JLMwww.themusingsofthebigredca…
Aholes can be good leaders too
.Leadership style is an important element of how far and how well followers will follow any leader.In places like the Army wherein one is imbued with life-and-death authority (at an extraordinarily young age and with, literally, no experience), one may adopt a certain type of leadership style that will not work in polite society.Even in the Army, there is a leadership style when one is engaged in hot action that would not be well received when in garrison. Even with the same followers.A lot of lieutenants got fragged over leadership style. Getting fragged is the ultimate performance appraisal.People will follow genuine, authentic, self-knowing leaders who are persuasive to a far greater extent than they will leaders who only have a single gear.You can be an unswerving, uncompromising disciplinarian and still do it in a pleasant way.Nobody raises their voices in elite units because everybody knows exactly what they are doing. Nobody ever raises their voice when dealing with live explosives. Projecting calm authority is critical to both of those situations. The calmer the leader is in times of chaos, the more responsive the organization.This is exactly why military schools subject their cadets to stressful training — to make them able to perform in chaotic situations.I have never seen loyalty accrue to a leader who is an asshole. The second an alternative presents itself, those followers are gone.Followers remember every unnecessary affront and they will even the score when they can.JLMwww.themusingsofthebigredca…
Probably appropriate to cross post what I put on Gotham Gal’s blog 24 days ago.She said in her post [1] :I no longer feel like I need to climb every mountain that comes my way. Maybe it is age, maybe it is the times, maybe it is just a lot of hard work that finally got me to this place or more than likely a combination of all three.I replied in the comments:Working hard, like many things that give pleasure, is an addiction. At a certain point you reach diminishing returns on the time spent and it ceases to give the pleasure that it did in the past when it was newer to you. Since it’s hard to ramp up the thing that gives the reward (like with drugs) you would then tend to stop the activity to find something else to replace the pleasure (or pain/pleasure cycle).This is my personal theory. Not something that I read or was told. Just from observations in life.I actually found this with respect to business early on. It became less interesting to me and I wanted to sell when I realized that with a certain certainty I would earn a predictable amount each year. When you start (and early on) you think the sky is the limit. Then you pretty much settle in to the normalcy of where the business will fall every year (same, increase, decrease). You realize that at the level you are at you aren’t going to hit it out of the park. At that point it no longer becomes interesting. Perhaps that is part of what is happening with your investing. Plus the long time frame means reinforcement is not around the corner. (That is why I like small wins that are fast as well as bigger wins that take longer you get a fix to tide you over!)Now this is not the same for everyone. I was talking last month to a guy who runs his family’s supermarket chain. Can’t imagine anything more boring (along the lines of what I am saying) than that. You know there is very little you can do to move the needle. In a way you are just an administrator or manager and collecting a predictable salary and profit. (My point is it’s not a challenge and isn’t very stimulating to run supermarkets or anything where you pretty much know from year to year what you will end up earning.)[1] https://gothamgal.com/2018/…
Depends what you find interesting. I might want to keep doing cool new foods at that grocery store, that could be interesting.
Nope would not work like that if you are also ‘in charge’ and running the place (which is what I was saying ie ‘runs his family’s supermarket chain’).Have you ever run this type of ‘put out fires’ business? I have. Plus have a great deal of first hand knowledge (additionally) on how they roll. Not just supermarkets but all sorts of small businesses and their owners.You come in in the morning and you confront different issues like ‘truck broken; deli guy not there (was drinking last night), slicing machine missing guards’ etc. Health inspection. Think the manager will handle all of that for you? Well it depends remember this is ‘supermarket grade’ employees. You would get sucked into it. The people working there are not the same as work for a tech company ambition and brains wise. And the problems are not the same. Anyway by the time you are done dealing with the daily shit that just ‘happens’ you would find you have no energy to do anything creative. And that is on a ‘good’ day. On a bad day all bets are off.I am not even talking about my cousin who owned supermarkets. He had a great manager. He was super lucky. ‘Skip’ ran everything. My cousin came from a big corporation and honestly lucked into this guy. He didn’t even know it. He later tried to open a clothing store to keep his wife busy (Benneton). So he thinks ‘ok I will hire a manger that worked for me in the Supermarket great!’. Well guess what? No ‘good’ managers around to run your shit little store in a shopping center. Not even close. Not a career like some supermarket jobs. And his wife wanted to just come in and not do any work you know ‘pick out fashions’. So he ends up having to close it. My point is his thinking was all tied to his success with his supermarket which was large enough (and he was for sure lucky) to have this manager that had years of experience and ran the place. They probably ‘schtupped’ Skip with cash as well. Might seem that I am contradicting myself but the point is my cousin is not creative and just more or less a finance guy and didn’t know enough to fix any problems so he had to rely on the manager. Trust me you (as one example) would not roll like that. You (and you know this) would get sucked into all sorts of everyday shit and it would totally kill all your energy and buzz. You’d find a zillion stupid little things that would annoy you and you’d try to find a better way. You’d hold meeting with employees. Then they would forget and not do what you told them. You’d start again and do it all over. With your brain it would be easy. With their brain not the same.While this does not cover everyone who works for ‘that type of business’ people are working at ‘that type of job’ for a reason. They are not hi cap people. And the errors they make and the things they do will spin your head around.You know I think Charlie ran into some of this with his bread company no doubt. He came from tech and then started a ‘traditional’ type business. As I said before ‘wheel…..of….fuckups!’.
Yes probably right the thing that drives me bonkers is when I say don’t do X because of Y. I do not expect to say that again.But yes there are people that just don’t get it. I do have to deal with some and I understand when people have signs in all CAPS saying DON’T DO X!!Actually truth be told you know how tough my scout troop was. The third time you had it written on the back of your hand so hard with a Sharpie that even after the ink wore off you could still see it, and remember.
Check out the natural food expo east coast in September or the west coast in March. Thousands of new products introduced yearly, it’s a marketer’s innovators dilemma.
Show me an amazing business and I’ll shoe you a trade show where you say “wow, is this boring or what”! For 99% of folks boring is the world’s biggest obstical to making money.
Here may be a helpful, base hit, no grand slam, in the grocery business:Quite generally, people selling something where they don’t expect repeat business usually have little motivation to sell something that is worth a customer buying again or pleasing the customer.Now, to do well in the grocery business, people need to make good use of the groceries they buy. For this they need to know how to cook. For that, at least when starting out, they pay attention to sources of information on how to cook, from cookbooks, TV cooking shows, recipes on the backs of bags or boxes, etc.Well, for information on cooking, the major publishers long ago decided to give up on providing useful information or being instructional and, instead, just published what had, say, face validity and likely some entertainment value. So a cookbook on Italian cooking could have gorgeous pictures of some vineyard, Roman ruins, valley of the Po River, Lake Como, mountains, an outdoor family dinner with three generations of a big family, etc., maybe all of which is entertaining but none of which is usefully informative or instructional.Eventually what the big publishers did, nearly everyone else copied. An extreme case is the TV cooking shows — heavy on entertainment and light on information or instruction.Thus, bluntly the information and instruction commonly available wasn’t intended to be useful and is next to useless.As a consequence, bluntly again, the knowledge of cooking is quite low, and for nearly everyone the rate of learning good, new dishes of next to zero.Bluntly, a grocery store is selling raw materials, cooking ingredients, for people who don’t know how to use the ingredients and mostly don’t have a good way to learn how to use them.The interests of a grocery store are very different from those of a cookbook publisher or TV cooking show: The grocery store wants to create happy customers who will generate a lot of repeat business for ingredients for dishes they like a lot.Or, what the heck am I going to do with a can of artichokes, some extra virgin olive oil, some wine vinegar versus cider vinegar versus distilled white vinegar, Chinese rice or black vinegar, for white onions instead of yellow onions, with flounder or tilapia versus cod, with lump back fin crab meat, with …. How can I cook at home something like I can buy at a French, Italian, Mexican, or Chinese restaurant?So, it is in the interest of a grocery store to carefully select some dishes that will be good on flavor, appearance, nutrition, and preparation time and provide some good, quite effective information and instruction on how to do the cooking and, then, of course also provide the ingredients. So, for one more step, if the dish can be helped by the butcher, baker, or deli doing some custom work for some of the recipes, then … there’s a shot at repeat business.
11 years, “quitter” – If Eric were training to be an oncologist, he would still be 3 years from getting started.
This is going to sound hokey but if you hire right, and you don’t just hire mercenaries, your biggest commitment is to those you hired. Seriously. People have asked me why I stay past lockup periods. Most just “go”. It is because of that commitment. I’m not saying you can’t do it the mercenary way. I just choose not to.
With you are you sure that is what is going on though? And those people who you say you are loyal to? Are you saying they won’t leave if confronted with the ‘bigger better deal?’. Sure they will.I’ve been through this before. Definitely and always had people leave when it was in their best interest to do so. [1] Even my own sister (2 weeks notice and she learned what she did for the next job at my place). One of my best employees ever (well treated obviously) gave notice right after I ordered ‘the big machine’ that I was trusting she would operate for us. Plenty of other examples. 2 weeks notice. No way to replace her in 2 weeks.I think in your case the downside to staying (for the reasons you say you are staying I suspect there are other reasons) is that at your age you are losing the ability to segue to ‘the next thing’. Now I am not saying there is an issue with that but you have to also consider, and this is important, whether you could potentially start the next thing 5 years from now.And one thing I will note about ‘the next thing’. When I got out of my first business I had 20 pages of things that I had thought up that I could do. And it actually took me about 5 years to get into ‘the next thing’. I was young enough at that time that that wasn’t a big deal but that is not the same as right now.[1] And Fred was just discussing Rebecca Kaden who left Maveron for USV on this blog. Move to a different coast as well. I am sure no way Maveron would have let her go. But when she had what she thought was a better opportunity she took it (and I wonder what her husband had to do with his job since I assume that was not the reason she moved to the East Coast).
Much more important than the idea or the potential market.
Founders are teammates you want on the field with the game on the line. Win or lose good people.
I don’t know whether this serves more as motivation or a reminder today that the path is long and arduous. I’ve been working on micro for 4 years. It’s growing phenomenally but I am the beaten founder who just keeps getting up and it is gruelling. It’s not glamorous, at times it is not fun, but I can’t imagine doing anything else. There’s something I need to exist, something I have to prove to the world and myself. I wish that I could just go get a job, I so wish to be like everyone else who’s content working in those tech companies, but I just can’t.Being a founder is a blessing and a curse. It’s a gift and it’s a punishment. I have immense respect for any founder who can bleed for their startup for a decade or more.
Yes, as athttps://en.wikipedia.org/wi…for a breakfast of ham and eggs, the chicken is involved, but the pig is fully committed!