Looking for Common Threads
I had a meeting with another investor recently. His journey to investor wasn’t easy. I love hearing stories like this. They show you how people are wired and who they really are. I wanted to hear his story so I could understand him better and see if I could be of assistance.
The call began normally and was cordial, but he wasn’t opening up. Then he mentioned a small detail that made me realize we might have experienced something similar earlier in life. So, I shared my experience. Sure enough, he said he’d had a similar one. From that point on, the conversation changed. We were able to relate and get to know one another via a common thread.
I appreciate this reminder that finding ways to relate to people is important. Doing so can completely change a conversation (or start it off on the right foot). More importantly, it can be a powerful tool in helping you build relationships and understand who people really are (as opposed to how they want to be perceived).
Today I joined an intro meeting only to realize that I already know the other person. We’re not close but have been in the same circles for over a decade. Catching up, we realized that our work overlaps, so we can help each other. Here’s what I was thinking as I left the meeting:
- The world is smaller than I think.
- You never know where life will take you or others.
- Relationships matter a lot, even if they aren’t super deep.
- Being nice is easy, feels goods, and can pay dividends many years later.
I’m glad we finally got to know each other after all these years, and I’m looking forward to working with him.
Knowledge Gaps Can Slow Execution
My buddy Bob called me today and described a project he’s working on. He’s having a hard time acquiring a key piece of it—he’s been searching, but he keeps coming up short. As he talked, I thought of another friend, Sarah, who deals with these kinds of items all the time. I got a picture of the item and sent it over to Sarah. She immediately responded with a product Bob might like and a source where he could view other similar products.
Bob didn’t have knowledge or experience in this area. He expended a ton of effort over countless hours trying to fill that gap. This slowed his execution of his project. Sarah, on the other hand, has the relevant knowledge and experience. She was able to point Bob in the right direction with minimal effort, which will hopefully get his project back on track.
This simple story was a reminder: knowledge gaps can impede execution. If not knowing something is slowing me down, I should find someone who can fill my gap so I can keep executing. Kudos to my buddy for reaching out. I couldn’t fill his gap, but I’m glad I knew someone who could.
Early Founders Should Email Updates Regularly
I recently got an update email from a founder I haven’t spoken with in months. He sends them out every month to a distribution list. They’re pretty good, and this one put his company back at the top of my mind.
Update emails are a simple yet powerful tool that can benefit early-stage founders. They help with accountability and focus and they remind outsiders that the company exists. The exercise of creating the email is good for founders because it forces them to reflect on the most important things that have happened and how the company’s KPIs or other metrics look.
These emails don’t have to be long or dense. The more concise the better, in fact. I’ve seen founders create a template and change only key pieces of information each time. Most importantly, these emails should be consistent and truthful. Pick a time interval (I’d suggest monthly at a minimum) and stick to it. Sporadic updates with constantly changing formats and KPIs give the impression that the company or founder is unfocused.
Updates shouldn’t be all about everything that’s going well. Running a startup is hard, and things are constantly going wrong. Share those things, too. When you’re open about where you need help, it’s easier for people to help you. And people will tend to trust you if they feel they’re getting the complete story. If you say your startup never struggles, people won’t believe you.
If you’re an early-stage founder, consider asking people you meet with (at the end of the meeting) if you can add them to your update email list. And send regular updates to everyone on it.
3 Questions to Ask Before You Start Pitching
I recently listened to a founder’s pitch to an investor that went off the rails as soon as the founder opened his mouth. The investor struggled to understand what the founder was trying to communicate. The entire meeting was painful to watch. A few hours later, the same founder pitched another investor, and the meeting went great. What was the difference? At the beginning of the second meeting, the founder sought to understand his audience by asking a few simple questions. This allowed him to deliver his pitch in the way the audience preferred. The change was small but powerful. Here are a few questions founders can ask to help understand their audience:
- Have you had a chance to review any of our materials? Founders often assume investors have reviewed their pitch deck, one-pager, product demo video, etc. But sometimes investors haven’t received the materials or haven’t had an opportunity to review them. They’re human; they miss things. Some are just busy and run out of time. Understanding what they know about your company (if anything) is important. Filling in gaps is different from starting with a blank canvas.
- Where would it be most beneficial for me to start? Some investors want to dive straight into the solution you’ve built and the business. Others want to understand the founder and their journey that led to founding a company. Beginning the conversation with what matters most to the audience greatly increases the likelihood that they’ll clearly understand what you’re trying to do.
- Would it be more helpful to stay high level or to explain the details? For technical founders who live in the weeds of their technology, this is an especially important question to ask. Some investors love the technical details, while others love the big picture. It’s important to understand this and deliver your pitch at a level that interests them. Miss the mark and the conversation could spiral downhill fast.
Understanding the audience goes a long way toward helping founders communicate effectively and gain support. The questions above will help accomplish that, but it’s by no means an exhaustive list. Plenty of other questions would also work. Regardless of what you ask, I’d limit it to two or three questions.
To Be a Great Leader, You Need a High EQ
One of the toughest situations I had to navigate as a founder was a key team member threatening to leave my team. During a strategy session about an important topic, Bob and I saw things differently. Neither of us backed away from our position, and it turned into a heated debate. We were respectful of each other, but later that day I received an email from Bob saying he would like to leave the team because we didn’t see eye to eye. Bob was extremely smart and talented. He owned all the details of a critical part of the business. Translation: it would be hard to replace Bob, and a critical part of the business would come to a standstill if he left.
I didn’t realize the seriousness of the situation until I read Bob’s email. I immediately realized that it could spiral out of control unless I handled it correctly. I got Bob on the phone, and we listened to each other’s viewpoints (instead of pushing our own). I told him I valued him as a team member, and we agreed to sleep on things.
I felt there was more there, so over the next few days we talked it over and got to the root of his frustrations. I learned that it had nothing to do with what we were originally debating. The company was growing, and Bob’s role was becoming more demanding. He didn’t understand why he was being asked to take on many new responsibilities. This was news to me, but once I understood the problem I came up with a solution.
I realized I hadn’t articulated my vision for where the company was going, so the extra work didn’t make sense to Bob. He didn’t understand how he fit in. He just felt overworked. I started communicating my high-level vision more clearly and frequently to the entire team so that everyone would understand their importance to making the vision reality. I transitioned certain responsibilities away from Bob and hired someone to work closely with Bob and take them on. We put the plan in writing and agreed to it. Everything was back on track. Bob and the rest of the team understood the vision and were satisfied.
That situation was a great lesson. I learned that being a leader is not just about being hard-charging and executing. It’s about people, too (other people—not just you). Leaders need to have emotional intelligence and awareness to understand what your team needs (even if they can’t—or don’t—articulate it) and provide it.
Cultivate this ability in yourself. Your team will run through walls for you.
Company Culture: Propelling Atlanta Start-ups to Success
Atlanta start-ups have been on a tear lately. Calendly raised $350 million at a $3 billion valuation, Rigor was acquired by Splunk, SalesLoft was valued at over $1 billion, and CallRail raised $56 million . . . all in the last few months. I spoke with a fellow investor about these wins. The founders’ styles and the companies’ circumstances are different, but we agreed there’s one thing they have in common that contributed heavily to their success: culture.
Each of these founders focused on culture early. They were intentional about the environment they wanted for their team. They took the time to think deeply about their core values, mission, etc. And they took it even further, making sure the decisions they made as they grew the company (including hiring) aligned with their values and mission. The results speak for themselves.
Some founders pay no attention to company culture. Big mistake. I’ve noticed two things that happen when they don’t:
- By any means necessary – Without clear values, sometimes people take the gray route in tough situations. Individual decisions may not be shady or bad, but over time they compound. People stray further and further from operating in an ethical way. One day you wake up and you have a company that achieves its goals by any means necessary. It’s Game of Thrones inside the company.
- Unmotivated team – Why you want to do something is usually clear to the founding team (or it should be). But as the team grows, everyone won’t understand the why if communicating it isn’t a priority. When people don’t understand why they’re doing something, they don’t work as hard. You can’t blame them. It makes sense. It’s hard to get someone to run through a wall if they don’t see any purpose or benefit to it. Next thing you know, you have an unmotivated team giving 50%.
Not making company culture a high priority produces lots of other perils. These are just two that I’m familiar with because of my own shortcomings as a founder. Take it from me, you don’t want to experience either of them. Once they set in, it’s hard to reverse them.
Learn by Extending a Helping Hand
I’ve been listening to a friend talk about a deal he was considering. It was a big real estate deal, something I’m not experienced in. I didn’t have a stake in it, but I decided to help in a way that leveraged my strengths. I’m a numbers guy, so I built a crude financial model to help clarify the worst-case scenario. We talked it over and he shared his insights on what the model was saying and things it didn’t account for.
Today, I learned that the deal fell apart. Not the outcome we were hoping for, but I realized that supporting my friend had been a great experience. First, it always feels good to contribute to someone else’s success. My assistance wasn’t material (in my opinion), but every little bit helps when you’re trying to do the impossible. Second, helping my friend, who’s experienced in a space that I consider a future area of interest, was a terrific opportunity for me. I learned a lot, fast, from the combination of his wisdom and my own research.
If you’d like to learn about an area or gain some experience in it, try to find a way to offer your skills, free of charge, to someone knowledgeable. Give back by helping a friend or colleague . . . learn about something that interests you . . . it’s a win–win!
2021: The Year of . . . ?
I had a good conversation with a buddy about 2020 and 2021. He said that 2021 will be a year of experimentation for him. He plans to try several different things, knowing that many will not work out. His goal is to learn and have a few successful experiments that pay dividends.
My friend isn’t an entrepreneur, but I love his perspective. Though we’re living in uncertain times, he understands that doing nothing isn’t an option. He has to take action toward reaching the goals he’s set for himself and his family. His action will be risk adjusted. He’s not going to bet the farm on his experiments . . . but he will make some bets. Worst-case scenario, all his experiments fail and he learns a lot. To him that knowledge will be valuable even if the monetary value of his bets shrinks to zero.
Perspective is important, and I think the beginning of the year is a great time to think about it.
What will 2021 be about for you?
Good Partnerships Have Balance, Not Perpetual Agreement
I had a conversation the other day with an entrepreneur (let’s call him “Ed”) who was frustrated with his business partner (“Phil”). Ed is extroverted and focused on the big ideas. Phil is introverted and detail oriented. Ed’s frustration is rooted in feeling like Phil hasn’t been supportive of some of his ideas.
I came to the conclusion that these two are the perfect match. They balance each other’s weaknesses and together are a well-rounded team. The difficulty is Ed’s perspective on the situation. He can’t forget times when Phil has disagreed with ideas he felt strongly about.
Ed and I went through some of their most successful initiatives of 2020 and the role each person played. I pointed out how each of them contributed and how unlikely each success would have been without both of them. Sure, some ideas didn’t pan out, but the ones that did were successful because of the partnership.
In my opinion, in this partnership, Ed has more to be happy about than unhappy about. He just needs to adjust his thinking. Does he want to play team ball or beef up his own stat line? Partnerships are difficult. Sometimes you get your way and sometimes you don’t. In the end, it doesn’t matter as long as you end up wearing the championship ring.