Today marks the end of my one-hundred-twenty-ninth week of working from home (mostly). Here are my takeaways from week one hundred twenty-nine:

• Pitching rough ideas – Sometimes the best people to pitch on an early, rough idea are those closest to you. It’s likely to happen during casual conversation about what’s new, which is a more relaxed setting than a formal pitch meeting. If they care about you, they’re more likely to give you honest feedback. It’s also a safe environment in which to refine your pitch. I did this myself this week, and it was helpful.
• Trusting my gut – Sometimes my gut pushes me to take certain actions that just “feel” right. I can’t always explain why it’s the right move at that moment, but after I reflect later, I can. This happened a few times this week. One resulted in an entrepreneurial insight that could prove pivotal. Note to self: trust your gut.  
• Not sure what they want – If you ask customers what they want, they’ll tell you they want a specific solution. If you ask them what they’d like to achieve long term, they’ll tell you something else. This week was a reminder that sometimes people don’t realize that what they say they want doesn’t align with what they’re trying to achieve. If you can recognize these instances, they can be opportunities to present an alternative solution they haven’t thought of.  

Week one hundred twenty-nine was a great one. Looking forward to next week.

I had a great conversation with a founder who bootstrapped her software company to over $1 million in annual recurring revenue. I got a product demo and learned about the customers she’s signed to date. A big part of her ability to bootstrap was that she got multiyear agreements with a material amount of the price paid up front. She has big growth plans and is evaluating whether she should raise capital to accelerate her growth.

During our chat, she shared her seven-year goal—to reach nine figures in annual recurring revenue—and more of her thoughts about how she wants to get there. She likely isn’t going to tolerate large losses for the sake of growth.  She also isn’t focused on an exit. Instead, she will likely achieve rapid growth in a way that’s authentic for her and her team—measured, calculated growth with an eye to profitability and ownership for the long haul.

This founder has built her business in an intentional way. She’s capitalized it using customer revenue, and that’s served her well. She’s positioned herself to have options so she can build the company in a way that fits her. I’m excited to follow her journey and curious to see how she decides to fund her growth plans.

I’ve been chatting with founders and investors about a problem I’m working on. I’ve noticed that as I’ve described the high-level problem, some people tend to relate it to something they’ve seen before and suggest existing solutions to fix it. They don’t understand that the world has changed materially in the last few years and this problem is something different than what we’ve encountered before. They also don’t understand the components of the problem.

I’ve been intentional about taking the time to break the problem down to its core and acknowledge that though I have experience, I don’t know what I still don’t know given the changes in the world. I’ve tried to fill these gaps to better understand the problem so I can craft a new solution that best fits it, rather than pick an existing solution and apply it. It hasn’t always been easy, but I think this is the best approach.

My conversations and experience with this problem have reinforced that first-principles thinking is easier said than done, and it’s the exception, not the norm. If I want to devise a solution that creates maximum value and is an outsize success, I can’t come up with the answer before I know what the question is.

I read about a new ranking system for VC firms created by two college students. Founder’s Choice VC Leaderboard crowdsources rankings of VC firms. The platform allows founders to rank the VC firms that invested in their start-up. It verifies the founders’ identities via LinkedIn and fact-checks the investments in the company via CrunchBase. The process isn’t perfect, but it does provide insight from a founder’s perspective.

The top-ranked firm is Union Square Ventures in New York. I’ve read the founding partner’s blog for years, and I’m not surprised his firm is ranked highest. The top ten included Atlanta-based TTV Capital, which was a great win for the city. Most surprisingly, the most notable firms weren’t in the top ten. Sequoia is often regarded as one of the best firms with the most consistent track record, but it ranked number eleven. Again, this ranking approach isn’t without flaws, but it’s interesting, nonetheless.

Venture capital firms serve two main stakeholders: the limited partners who trust them with capital to invest and the founders to whom they deploy the capital. I’m glad there’s another platform on which founders can share their perspectives about the VC firms they’ve worked with.

A long-time friend asked why I’m so intrigued by early-stage founders and investing. He’s surprised that I don’t like later-stage investing more because there are more measurable data points. I enjoy helping founders at any stage, but I do like the early stage the most. I define “early stage” as pre–product/market fit, so it includes the pre-seed or even seed stage. Here are a few reasons I like this stage:

• Empathy – I started my own company, so I empathize with the zero-to-one segment of the journey. I don’t think you can fully understand it unless you’ve lived it.
• Turnover – The more I’ve zoomed out, the more I realize that early-stage investing is often transient. Founders moving to the next stage is expected and a great thing. I don’t think people realize that many VC investors move to later-stage investing if they’re successful and raise a larger fund. As the VC investors transition, so do the limited partners that invested in their funds. Given all of this, turnover at the earliest stage of investing is high for all stakeholders. I enjoy helping others navigate this transient environment.
• Impact – Helping founders at this stage can have a massive impact. The right piece of advice or the right introduction can change someone’s trajectory.
• Challenge – It’s a difficult stage to invest in. Many people shy away from pre-seed investing because of its challenges and the high failure rate. I view these as problems that can be solved for.

I don’t think the current VC construct for early-stage investing efficiently deploys capital outside traditional VC networks. It can be improved. I want to be part of that solution.

I was going back and forth with a buddy this week about Kobe Bryant’s mentality and why it led to outsize success in a league where he competed with the best of the best. I came across a short clip of him describing the “mamba mentality” and why it works. Here are my takeaways from the clip:

• Kobe’s mamba mentality was about being the best version of himself through continual improvement.
• Kobe understood the power of focusing on the right habits to produce his desired outcome. He developed a habit of training every day, which increased his chances of being the best. (Atomic Habits is great for understanding the power of habits.)
• Kobe understood the effect of compounding effort. He trained more often—four times a day—by starting early in the morning. With this much training, his skills improved rapidly. So much so that after five years, he was so far ahead of his peers that there was nothing they could do to catch him. In a league of the most gifted individuals, he left everyone in the dust.

Kobe’s clip reminded me of a post I shared a few months back. Self-improvement is the key to sustained outsize success. The biggest limit on your success is your ability to improve yourself.

Kobe was smart enough to develop his mamba mentality early in his career, and he became a legend. I’m not as smart as he is, so it took me longer to fully understand this mindset. Because I now understand how important it is, I have daily habits focused on improving myself by acquiring knowledge. I’ve been sharing daily posts for over two years, and that’s a big part of my efforts. I also spend around two hours a day learning. I can’t predict or control the outcome of these efforts, but if I stick with these habits, I’m confident I’ll have outsize success over the next few decades. Maybe I’ll be as fortunate as Kobe and leave my peers in the dust too.

I’m no Kobe Bryant, but I subscribe to his mamba mentality (in my own nerdy way!).

I’ve been looking for data to quantify how the network problem in VC affects fund returns and efficiency of capital allocation to early-stage founders. I suspect that VCs that subscribe to the usual approach have funds that perform worse than those with diverse networks closer to ground level (i.e., network entrepreneurs are already in). I’ve read several academic papers that dive into VC networks, but they’ve all looked at this from the perspective of existing VC networks. Said differently, the papers look at how well VCs network among themselves and how that affects fund performance.

My observation seems obvious, but it’s been challenging to find research or data on this point—either way. I’m starting to wonder why people haven’t spent more time looking at things from this perspective. Maybe it isn’t as obvious as it feels to me. I connected with one other person researching VC from this perspective, and he shared that he too feels like no one else is looking at things from this angle. There seems to be a miniscule contingent that is. Others accept the status quo in VC. This makes me wonder if this a unique insight that could be the foundation of a game-changing solution.

I’m not sure right now, but I’ll be keeping this top of mind as I progress. I’ll be excited if this is a unique insight!

Today marks the end of my one-hundred-twenty-eighth week of working from home (mostly). Here are my takeaways from week one hundred twenty-eight:

• Persistence – I’ve been trying to connect with certain people for months. I tried various ways to reach them that ended up being dead ends. But I didn’t give up. Finally, I networked my way into meetings with them. This week reminded me that persistence pays off. I just need to be patient while I’m being persistent.
• Community – Been thinking a lot about the importance of community for early founders. Community builders in start-up ecosystems don’t have it easy. Finding runway to build and sustain these communities is a hurdle.
• Understanding people – Understanding what drives someone’s actions is important. Why they do something can matter more than what they do. It’s not always easy to get to a person’s true motivation, but when you do, it can be game-changing information that helps you understand the best way to interact with them.

Week one hundred twenty-eight was short but productive. Looking forward to repeating the productivity next week.

The most important part of a city’s start-up ecosystem is the people in the ecosystem: founders, investors, university personnel, service providers, community builders, etc. How they think and the lens they view things through. How freely they share information and relationships with early founders. This all creates the culture of the ecosystem.

How people think and act is heavily influenced by the start-up history of a city. Changing that culture can be a slow process, but it can happen faster with big events (positive or negative). If a company has a big exit, people start to think a little bigger about what’s possible. The reverse can be true if a company creates a massive crater.

Remote work will stick around (in some form or fashion) for the foreseeable future. I suspect that a material number of people left cities where dreaming and thinking big was part of the start-up culture. They’ve seen the impossible happen and witnessed outsize outcomes from those efforts. As they settle into new cities and get acclimated to the start-up ecosystem there, I suspect they’ll add diversity of thought. I’m curious how this will affect the start-up cultures (for better or worse) of cities like Atlanta. Will the mass migration be a big event that has a lasting impact on start-up cultures?

I chatted with a venture investor today. He built a new approach to deploying early-stage capital to early founders. It’s doing well and could prove impactful. I asked what he’d learned from watching this new approach to investing take off. He said he learned that there is no right way in venture capital—there’s only the way that’s available to you.

He shared a ton of other great things that I’ll digest shortly, but this one immediately stuck out to me because I don’t think it’s historically been true of the venture capital industry. The network problem in VC applied to outsiders looking to enter the industry as investors and, of course, founders seeking capital. No way was available to people outside traditional venture capital networks.

The pandemic and other factors have changed venture capital. I think we’ll begin to see new ways for high-potential venture investors to raise and deploy capital and for high-potential founders to connect with investors and access capital. When that happens, the entrepreneurial impact will be massive.