Yoav, thanks for writing this article. You have been an amazing mentor to me the past couple years and I am not surprised by any of the conclusions you have here. A couple of misc thoughts (in no particular order):
- The advantage of being an operator is that you can dive deep into solving real problems. For an engineer at heart, getting your hands dirty building stuff is in your DNA.
- As you point out, being an investor sometimes puts you in conflict with your desire to legitimately help other entrepreneurs. Sure, sometimes the stars align and it all works out, but there are so many things that can pull you out of alignment in a way…that, well, frankly sucks. It seems like experienced investors know this and hold back from giving too much help until it seems like they will invest. I think the approach that Mike and you have taken to provide real help to entrepreneurs even if you don’t invest is rare and amazing.
- As far as knowing whether or not you are a “good” VC, I think it is totally bizarre that you need 5–10 years to figure this out. Ultimately, you can make many deals with companies that seem to be doing well, but unless they exit at a certain price, you may not get a good return on your capital. You may think you did a great job 1 year into your life as a VC…but did you? The stuff you invested in during that year won’t likely exit for many years afterwards, so who knows? As an operator, at least you know where you stand at any given point and time.
- The dynamics of the VC world are fascinating. The power law drives behavior in a way that can be confusing at times. I personally sort of like it (sometimes) because it is like you are stepping into another world. At other times, though, it can be really frustrating because can be so different than your mindset as an operator.
Thanks once again for putting this article together. It is really informative. Can’t wait to hear more about your next move!