by Brian Wong
As the conductor, you need to have a certain degree of distance from the team to do your job. Sometimes you almost have to remove yourself physically, and other times mentally, as if you’re having an out-of-body experience. It’s easier to fix systematic problems when you see them from a bit of a distance rather than close up.
Despite the need for the conductor to stay focused on the big picture and coalesce each element of the team into a whole, there’s also a fractal element to companies—meaning that often, each small piece mirrors the whole, in a different scale. So you need to understand all the working parts and be able to dive in at any given moment and help somebody who’s struggling with something specific.
That’s part of the reason it’s good to know the company from top to bottom, and have a little experience in almost every type of job. In start-ups, that usually comes naturally, because in the beginning you need to do a little of everything. It’s even more valuable just to be open and intuitive, and capable of turning on your creative juices at any time.
Even if you’re the best team builder in the world, though, you’ll probably never be a CEO if you don’t have at least one superpower. Managers, of course, can come in at any stage of a company and build effective teams, but managers aren’t owners.
Great entrepreneurs—the founders and CEOs—know exactly what their superpowers are (see Cheat 16), and they use them almost every day. The superpower can be almost anything—mastery of business skills, technology, public speaking, sales, or whatever—but it needs to be an important function that nobody in the company does better. The founder or creator will always be the foundation that a team is built on, and that foundation is irreplaceable.
Nothing is a sadder sight, though, than a piece of land with just a foundation on it and no building. You might be the one who builds the team, but it’s the team who builds the majestic skyscraper.
A lot of people mess up by limiting almost all their business to the phone, email, Skype, text, or videoconference. This misses the big point. It keeps you in your comfort zone, limits the expression of your full personality, and lets you hide your lack of preparation behind notes, scripts, and digital props. Actually going to a meeting makes you stand out. People see your face, smile, handshake, eye contact, charm, spontaneity, wit, and ability to think on your feet. They’re flattered that you came, and maybe you end up socializing. You become a human being, rather than just a business entity. You might even become a friend.
As international olive oil importer Michael Corleone once said, “It’s never just business. It’s always personal.”
Here’s a problem: You’ve got to get there. That usually means traveling. Flying is hard. If you could just snap your fingers and be there, you’d do it almost every time.
Here’s how to make it easier. That’s important. Easy is good. Hard is bad.
Pack light. For almost all domestic trips, just take a carry-on. When you use a carry-on, you don’t wait at the carousel, freaking out while your luggage fails to appear—especially when it’s a business trip, since you’ve got documents, devices, and even clothes you can’t replace. Sub-cheat: Even if you do check your luggage, carry all the indispensables.
Book your flights on a Wednesday, when airlines almost always sell them cheaper. If other people book your travel, make sure they know that money matters. Three of the main myths about money are (1) that people who have money don’t worry as much about it as people who don’t have it; (2) that people who have money don’t work as hard as people who don’t have it; and (3) that people who have money don’t try as hard to keep it as people who don’t have it. If your assistants believe any of those myths, they shouldn’t be spending your money.
Get an aisle seat as close to the front as possible. You’ll be one of the first people off—and you can use the restroom without stepping over people, which is a big deal on a long flight, especially if people in your row are asleep.
Don’t show up too early to the airport. If you’re late, you can legitimately assert your need for priority in the security line. Join every airline membership program you can, so you can begin to accumulate miles. Before you know it, you’ll be in at least a couple of programs that will let you go into the expedited lanes. Some people go through those lanes no matter what, because it’s typically considered bad customer service to insist on seeing the membership card that would entitle you to use them. If you ask for boarding gate priority, it’s also easier to do it in those shorter lanes—fewer bad vibes. Airport lines reward late people (if you ask the right way). In some ways, they also punish early people—so arriving later makes sense.
To sleep, don’t screw around with the pillows and blankets, because those don’t help. Fly late in the day, or at night, when you’re tired. If necessary, drink a glass of wine, or take a pharmaceutical relaxant, if you don’t have to drive when you get there. Don’t waste your time reading magazines or playing with devices. Put something in your Kindle or tablet you need to read, but try not to work on things that require full focus.
Book a hotel that’s as convenient and quiet as absolutely possible, and don’t worry about frivolous amenities. The important amenity is room service, which can be a lifesaver if you have an early-morning meeting or want to work while you eat.
Exercise counts, because your body counts. But try to get it by walking around the city and absorbing the ambiance, instead of in a forgettable fitness room. Seeing a new place is an education in itself, especially if you’re abroad. It also gives you some commonality with whomever you’re there to see.
If you want to create some indelible memories of a new place, listen to a very small playlist with new songs while you walk around. Later, every time you hear those songs they’ll bring back the city’s sights, sounds, smells, and ambiance.
There is no such thing as a boring city—just boring travelers. People live there for a reason. Find out the easy way: Ask somebody. Just asking people about their city is an education.
The easier your travels, the wider they will be, and with them, your view of the world.
The more you see the many different worlds that people live in, the more you’ll love the earth, and feel right at home anywhere.
Raising investment capital is easier now than it’s ever been. The whole landscape has changed.
True, the age-old investor criteria—dominated basically by risk and reward—still stand. But the tools, terms, and mechanisms of investment are always in flux as business environments morph.
Recently there have been massive changes in the investor landscape, much of it ushered in by a 2012 law: the Jumpstart Our Business Startups Act, also known as the JOBS Act. It eliminated a lot of red tape and allowed many more people to invest, with greater flexibility. Investors can now put their money into a company without having to get accredited by the government, and they can offer to buy any increment of a company that they want.
This opened the door to dramatically new types of investment sources, like Kickstarter, the global crowdfunding platform. It seemed to come out of nowhere, and yet facilitated the investment of about $1.5 billion in its first six years, from almost eight million different backers. At first it seemed as if Kickstarter might be just a frivolous toy for hobbyists and dilettantes, because in the beginning so many of the projects were marginal or unrealistic, but it exploded—mostly because of the incredible reach of the Internet—and today has funded some game-changing products and ideas.
The goal of Kickstarter is simple: to give entrepreneurs and inventors who may have been turned down by traditional funding sources the opportunity to kick-start their projects by amassing small contributions from a large number of people. If ten thousand people each invest $10 in something, the total investment comes to $1 million, enough to generously finance the vast majority of start-ups. And, thanks to Kickstarter, it turns out to be a hell of a lot easier to raise $10 ten thousand times than $1 million just once.
Pebble Smartwatch is an example of a company tha
t was having trouble raising money from the traditional sources, so they launched a Kickstarter campaign in 2012, with the goal of $100,000. Backers who put in $115 were promised a watch if and when the company reached their target number. They made the goal in just two hours, and then went on to raise close to $5 million more the first week. They rolled out their second-generation watch, Pebble Time, in 2015, and about seventy-eight thousand backers pledged over $20 million.
Things were very different when I raised my first dollar in 2010, during the Great Recession. At that time, the options I had in front of me were very limited compared to now. Serious investors were confined to mostly two types: the angel investor, a rich person who invests in start-ups in exchange for partial ownership, and the venture capitalist, who works for a fund that pools the resources of large numbers of people, firms, and other funds.
These days, when somebody asks me for advice about securing a first-round investment, my answer is: “You are in luck, my friend! There’s now almost a glut of early, seed-stage investors.”
Because there are so many new sources of capital, this is the best time ever to have an idea, and a friend to build it with.
There are now incubators that help start-ups with everything from access to investors to helping them find office space to management training. There’s also a slightly different version of incubators, called accelerators, that get more involved with companies that are already operating but are still very young. The incubators and accelerators help establish a lot of start-ups, knowing that many will fail, because it only takes a few major successes for them to reap huge benefits.
Plus, these days, investing in start-ups is cool. The status symbol in Silicon Valley—akin to the New York symbol of having a house in the Hamptons, or the L.A. symbol of driving a Rolls—is how many companies you’ve invested in.
As I mentioned in Cheat 54, there is also an extremely high ratio of investors to start-ups in the Valley right now. People say—and it’s not entirely a joke—that there’s more money than start-ups to spend it on.
The success of the first huge wave of entrepreneurs has made it easier for the succeeding waves. It no longer seems like such a shot in the dark.
The sheer numbers of people involved in the new start-up subculture—along with the ease of communication among them—also makes it easier to find money. Everybody seems to know everybody, and a great many investments come from personal relationships—not out of friendship, because even friends don’t throw their money at bad ideas, but out of connectivity. For instance, the initial investors in Uber were just a small club of people who were really good friends.
After about five years of running Kiip, I’ve had around thirty investors, and not one of them came out of nowhere. We always had a mutual connection.
Even so, as always happens when abundance diminishes scarcity, the value of connections is dropping. It’s just too easy now, especially with the almost constant round of meet-up conventions, to say that you know somebody. It’s like, “Yeah, I know Brian. Cool guy! I handed him some ice cream in Austin.” A few years ago that would have meant something, but today it’s just one of a million random connections.
Even without connections, though, there are ways to establish your credibility in your first round of investment. Investors are interested in the companies you’ve worked for, what you’ve achieved, whether you’ve previously started another company, why you aren’t still there, whom you’ve worked with, and who is on your team now. There are other, even more abstract signals that you’re a valid target for investment, like: “Are you tolerant of risk?” “What’s your motivation for doing this?” “What’s your five-year goal?” “What’s your dream?” “Whom do you admire?” “What do you post on Instagram?”
They’re looking at you as much as at your project. They know that your first ideas about your company will probably not be what you end up with, because as you scale out the company, the environment will change. As my investor John Callaghan says, “Ideas fail, but people don’t.”
If investors get any whiff of you being a shitty person, they won’t touch you, even if you’ve got the greatest idea ever. They’re looking for people who can lead teams that take ideas from start to finish. They want somebody who works with devotion, inspiration, confidence, and an insane amount of perseverance. Investors already have money; what they’re looking for is passion.
So however you choose to pursue funding for your project—whether through a crowdfunding site like Kickstarter, an incubator like Y-Combinator, or the more traditional route—don’t go to potential funders thinking that you’ve got it made just because this is a golden age for finding investors. The same rules that once applied still apply. Money seeks money.
My best advice: Be money.
I love Kiip’s investors. Because they gave me money? No. It’s the other way around. I love them because they’re great people—and that’s why they gave me money.
Substantial investment money is hard to get, especially for a start-up. But what a lot of entrepreneurs don’t realize is that funding can come from many sources, just as great entrepreneurial ideas can come from any number of places of inspiration. The key isn’t just finding money; it’s finding the right fit between the investor and the entrepreneur.
My investors are the perfect fit for me, and I try hard to be the perfect fit for them. When you find someone who’s the perfect fit for you—whether in romance, friendship, or business—it’s impossible not to like them and think they’re great, because your mutual goals and interests align.
The feeling has to be real, though. You can’t fake liking some investors just so they’ll give you money. First of all, those people are way too smart to believe that you like them if you actually don’t. They hear dozens of pitches a day and have bullshit detectors hardwired into their brains. They’ve heard it all, and will know—probably even before you do—if you’re the right fit.
You’ve got to be on the same wavelength, emotionally and morally. You’ve got to have the same basic intellectual interests and abilities. You’ve got to share a similar vision and level of energy.
Sounds kind of like a marriage, doesn’t it?
Like a marriage or a super-close friendship, not only can’t you fake it, you also can’t force it. The best advice you can give somebody who’s looking to find Mr. or Ms. Perfect is never to settle. Don’t think you can change somebody, don’t go after somebody based on just one element, and don’t try to change yourself to win their affection. The same is true of investors in a business.
I love my investors, and sometimes—especially early in the relationship—I talk to them even more than I talk to my mom or my best friends. That doesn’t mean, though, that my investors are my best friends. We have a great relationship, but it’s important to keep that relationship on a business level, because there are core things they need to do that could be complicated by too close a personal friendship with you. They have their own objectives and agendas, and at the end of the day they’re there because they want a return on their investments—not to listen to your troubles or make you feel good.
What’s the most important ingredient for a successful relationship between investor and entrepreneur? Transparency. That’s why I bring my investors in on my business process, in the same way that I sometimes share my plans with my customers. I go over my six-month plans with them so that they can feel like they’ve become part of my brain and share my enthusiasm. There’s nothing more bonding than bringing someone into your inner circle.
When an idea they helped me with hatches and turns out great, I can see the gleam in their eyes when we talk about it. It’s not just a good feeling for everybody; it’s also good for business.
But as important as transparency is, drawing boundaries comes in at a close second. I respect their advice tremendously, but I don’t kid myself that they know my business as well as I do. It would be scary for us if they did. I’m the one working in the trenches every day, so I don�
��t have the unrealistic expectation that they’ll be able to answer every pressing question that comes up. If I did think that, I’d be vulnerable to getting seriously sidetracked by the advice of somebody who hasn’t had the time or information to think something through as carefully as I do.
Another thing that I love about my investors—people like Kevin Talbot, of Relay Ventures; Phil Black and Adam D’Augelli, of True Ventures; and Lars Leckie, of Hummer Winblad—is that they refused to take advantage of me at a time when they could have. They made that choice not just for my sake but for theirs as well. When I was in the traction round of gathering investors, after the first seed round, they easily could have messed with me by asking for a much larger stake for the same amount of investment dollars. And I probably would have taken their offer, because I was super-naive and on one level had no idea what I was doing. But they were smart enough, and decent enough, to know that if they did that, they’d be more than just investors. That it would be their company even more than mine, and that would create the possibility that I would lose some of my passion for it, or allow them to make decisions I should be making, as the guy with the boots on the ground. Then, if the company did succeed beyond our expectations, they’d need to be concerned that I would come back to them thinking that they hadn’t taken care of me from the get-go.
Now that many of our dreams have been fulfilled, instead of being resentful, I’m more than grateful. I’m one of their biggest fans, and I vouch for them whenever they want to get into other deals. Who’s a better advocate for an investor than somebody they’ve invested in?
The other savvy and considerate thing they did was not to go, “Yeah, I’ll invest in you if you change this or that.” Investors do that sometimes, and after the start-up goes out, retools, and comes back, the investor will go, “Well, I don’t really feel like investing now—the timing’s not right.” They’ve just wasted your time and money by making you change your model and then not investing.