1/ I had "strategic" investors at my first startup. I learned first hand what a bad idea this can be, even when they're good people. A thread ...
2/ I use quotes for "strategic" because it's really an oxymoron. Most industry investors are the opposite of strategic. They have vested interests and sadly this plays out on their board and investor participation
3/ Many strategic / industry investors are bad for startups even though it's no fault of their own. They often have different incentives, different expectations and are playing a different game. Let's examine this ...
4/ Strategic investors have different incentives:
- they often care more about your product than your growth (if they're a user)
- they care more about keeping your valuation LOW (if they want to be a buyer)
- they care more about looking good internally than shareholder value
5/ Strategic investors have different expectations because they measure success based on internal, big company, slow growth metrics. They see every downside case, not what could happen if the growth case happens. Because that's what life inside a big company looks like
6/ Even if you have a relatively progressive, thoughtful, open-minding "strategic" board member who loves innovation, they have to report back to a public company CEO who is complaining to them that all tech startups are overvalue & overhyped
7/ I once had an amazing strategic board member who was a co-investor with me. Still, he always looked through the lens of the world that "was" (media) vs. the world that "could be" (tech-enabled social commerce). So we were forced to double-spend to appease both arguments
8/ I have watched "strategic" investors try to block financings at startups because they want to buy the company one day so they don't want dilution, don't want a high price, don't want fast growth
9/ I wrote about many of these problems publicly in 2009 having run a startup who raised strategic money & having lived through the problems directly. So I've lived through this for 20 years, not 2 bothsidesofthetable.com/is-strategic-m…
10/ It reminds me "plus ça change" ... the more I experience this wave of strategic investors entering the bull market for tech/startup investing the more I am reminded that they can't help themselves. They're scorpions. As this great parable goes ... en.wikipedia.org/wiki/The_Scorp…
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1/ A thread on "founder types" & how to hire those who complement you
There are no "exact types" of founders but to simplify:
A framework I think most founders broadly fall into: 1. Product centric 2. Tech centric 3. Customer centric
It helps to figure out which you have / are
2/ Many tech companies are "product centric"
- They understand how customers use today's products & where the gaps exist in the market.
- Know how to get tech built by high quality engineers
- Often win through 10x better products
- But often don't truly understand the customer
3/ In order to understand the customer you need to know:
- how they work
- what their problems are
- how to satisfy their needs
- how they get approval to spend $
- why they adopt new solutions
- how they train themselves
- how they get buy in from teams
- what choices they have
1/ Trevor Noah addresses racism against Asian Americans. It's so hard to find the right words to convey but his wisdom sums up my feelings better than even I could articulate. If you haven't seen this please dedicate just four minutes.
2/ I feel so much empathy for Asian Americans facing hostility and racism in America. We can't create a culture that tolerates this.
You can't stop crazy people, but we as a society can lash out against public figures who think it's acceptable to vilify Asians in any way
3/ We all know the last president & his allies used terminology like China Virus or Kung Flu as a dog whistle for tolerating racism & creating an environment where White Nationalists + sympathizers can blame "the other"
The inciters are always as dangerous as those who act out
1/ I saw some of my colleagues argue that the press & some on Twitter overreacted to the events of yesterday. That's seriously misguided. The President of the United States wanted to illegally remain in power & certainly would have if Congress would have allowed him.
2/ There were enough GOP congresspeople immoral enough to go alone with the President's ruse. They knew he lost the election in a landslide but for political reasons said the opposite. This is seriously dangerous
3/ There is now a press establishment (OAN, others) willing to use presidential propaganda to amplify anything he says & social media bubbles that have persuaded tens of millions of people that black was white and up was down supported by carnival barkers like Giuliani
1/ Just realized this morning that it was 5 years ago today that I invested in @densityio ... it has truly been such a great career experience for me. Some notes ...
2/ Density is a privacy-first way to monitor how people or objects move around spaces. Today mostly office spaces. Plus warehouses, schools, retail outlets, government buildings
3/ Density is a software company that gives insights to property owners or occupants. To deliver value it required team to also build hardware. That has been a journey. VCs are scared of HW. It’s challenging but gives SW companies such great defensive moats.
1/ I have read many times over the years. It serves as a powerful reminder: Leaders who have the courage to use peaceful, symbolic protests to raise awareness of oppression are often discriminated against in their times but "history has its eyes on them" filmsforaction.org/articles/the-w…
2/ This article is a great reminder of the courage & conviction of two African American athletes who raised awareness of oppression at their expense of their own continued fame, achievement and financial benefit
3/ The article is titled "The White Man in That Photo" because it also shows the courage and conviction of a White ally who believed in equality & God and felt it was worth showing public support despite paying a lifetime of economic consequences. It says he never regretted this
1/ We know that Covid-19 has been devastating to some industries: air travel, hotels, live events, physical retail, oil. We know it has benefitted others: supermarkets, collaborative tools, restaurant delivery, athleisurewear. There are some other "future positives" ...
2/ Acceptance of technologies we know will benefit society are accelerating post Covid-19. some examples: Telemedicine an obvious benefit for doctors & patients. Rules, regs & habits being transformed
3/ We know it isn't cost-effective or best for students to be confined to expensive, physical-access-only educational facilities. Covid-19 will bring difficult transformations to existing education but we knew this would happen eventually. The future state will be better