Some friends of mine (let’s call the founders Bob and Jill) started a company about 6 months ago. They practiced their pitch with me this week ahead of an upcoming, widely attended Demo Day. I stopped them in the middle of the first run.
Me: “Why are you marginalizing the competition? They’re obviously quite successful, and do you really think they’re barely relevant? I think they have a talented team, actually.”
Jill: “Yeah, sure. But investors want to hear that we’re confident and aggressive and can take down the competition. We need to be animals to win in this market.”
Me: “Investors want to understand if you’ve got some fundamental unfair advantage. Is that advantage that you’re more aggressive than everyone else?”
We discussed — they did have a fundamental advantage, but it had been obscured in their celebration of week-over-week growth numbers and their somewhat disingenuous take-over-the-world message. Internally, the team’s confidence was based on design principles they thought were superior for growth, not that they had the ability to “out-aggress” their competitors.
I met another entrepreneur recently, and we don’t know one another too well yet, but I’d love to be in business with him. It’s not just that he’s a talented, experienced engineer working in an area of technology I like (though that of course helps). He was shockingly thoughtful, curious, low-ego, and transparent, and that took away none of his edge. And I developed this impression of him asking his advice on another startup. He spoke highly of the team, and gave a balanced but positive view of their opportunity.
One of my favorite things about Bay Area startup culture is that you spend much of your time trying to understand different potential versions of the future, seeking truth with the help of another person. It could be at a dinner party or in a fundraising meeting, but people are generally not very transactional. Their first reaction is to be curious rather than dismissive.
Mostly when VCs and founders meet one another they don’t end up actually partnering, but hopefully you can advance one another’s thinking, or there’s some serendipitous connection to be made, or you’ve got a lead on some real estate, or you can offer an opinion on some choice of highly concurrent data infrastructure, or you can just become friends. The Valley is not a zero sum place, except for those taping together cloogy software and trying to protect entrenched, outdated products.
Right now, because people are nervous about the large funding rounds for multiple companies in winner-take-all markets, because no good idea goes un-imitated for 9 months, many founders and investors seem to feel the only way to win (and to get funded) is by being sharp-elbowed in a highly competitive environment. This is a misreading of the spec. Ambition and edge are correlated with winning, yes, but so are integrity and the unique insights that come from intellectual honesty and curiosity.
Wanting to win (badly) is not that unique. It’s really unique when other people not only think you can win (which for sure requires the founder to have a certain level of self-confidence), but want you to win.
They want to invest in you, work for you, help you. One of the best ways to do that is to be honest with yourselves and your investors about why you could win, or not.
Arrogant, successful people are very visible in Silicon Valley, just like everywhere else. Don’t mistake the visibility of those combined traits for a strong causal relationship.