Long, Strange Trip — Fatherhood, Israel, BVP, and Good Today
2018 was quite the year for the Sterman family. From the birth of our first child to moving a quarter-way around the globe to a new country, to starting a new job at Bessemer Venture Partners and (re)launching Good Today, a whole lot has happened over the past 12 months. Now, most of our friends who heard about these concurrent, life-altering transitions had a similar reaction: “that’s a whole lot of change all at once…”, to which I would half-jokingly reply that I’d rather tackle several big life changes in one sitting than space them out every couple of years (I sure hope my wife agrees).
But the truth is I’ve found two major benefits to undergoing these pivotal life experiences all at once. The first is, perhaps counter-intuitively, that you don’t really have the luxury to dwell and get caught up in any one area because you’ve got to keep juggling. (The Lubavitcher Rebbe of blessed memory would say that if you feel like you don’t have enough time in the day for your commitments, add something else to your plate and you’ll somehow find a way to do it all.) Now, my wife is the therapist in the family, but in my non-professional opinion, the best way to combat potential anxieties around large-scale change is to leave no time for it.
The second benefit I’m experiencing is the opportunity to observe the patterns that emerge across such seemingly disparate parts of life. Or as any good VC would call it — “pattern recognition”.
Which brings me to the point of this post — here are 5 shared lessons I’ve learned (so far!) from my transition to early stage investing, parenthood, becoming an immigrant, and trying to change the world:
1. Team is (Almost) Everything
This is true in every aspect of life — family, professional, community — investing in a strong and collaborative team is (in my opinion) the greatest factor for success. In contrast to my experience with growth-stage investing, where measurable KPIs and historical performance are key to evaluating an investment opportunity, I’ve quickly come to terms with the essential role that the founding team plays in the earliest stages of a startup. Regardless of just how great the idea and market dynamics may be, if the right team isn’t there to build it, as an investor you’re better off sitting on the sidelines. On the flip side — if you’ve got a rockstar team in front of you and the idea is so-so, you may still have conviction that they’ll succeed in building something special. On the family front, I’ve been blessed to have the best possible teammate in the adventure of raising a child and picking up and moving to a new country — and to have such a strong network of family and friends on the ground here in Israel to provide anything from a month-long apartment stay to tips on navigating Israeli bureaucracy surely has made the transition that much more smooth. And finally, witnessing the dramatic momentum shift in the platform formerly known as Good Street since bringing on our incredible new co-founders and our first full time employees just reinforces the notion that with a dedicated, cohesive, and passionate team, the distance to the goal-line is that much shorter.
2. You’re Not Salmon
Don’t swim against the tide. This is obviously true when coming to terms with the fact that children will irretrievably alter your evening, weekend, and sleep schedules, but it may sound funny coming from a venture capital investor — after all, innovation demands new modes of thinking, building, and doing. What I mean, however, is that going directly against the current isn’t necessarily the right way to create meaningful change. For example, a startup trying to service a ‘dying industry’ is likely not going to build a big business by attempting to rescue a sinking ship. But if one surrenders to the flow and objectively observes the inevitable change, one can swim to the banks and/or ride the coattails of a new, emerging category. Going up against Amazon on retail or cloud computing may be futile for a young startup, but recognizing the seismic shifts that have already occurred creates new pathways to providing novel experiences, services, and products that were not tenable before. Similarly, being an immigrant in a pseudo-Middle-Eastern (or any different) country and culture means respecting certain realities that are just…different. In Israel, that means understanding that there are certain areas in which you just won’t win through confronting head on, like the passport clerk’s bad day, but you can always cut across to the next cashier who will be happy to take your papers. Don’t hate the player or the game — learn the new rules!
3. Dream Big…
The amount of times a VC hears that a given startup has the potential to become the next Uber, WeWork, or Intel is immeasurable. But during a pitch, investors want to at least hear that there is hunger and ambition to build something greater than just the product in front of you or the opportunity flip a quick exit (especially with early-stage valuations at all-time highs). It doesn’t mean that we have to believe a company will become Google in order to make an investment palatable, however setting achievable but aggressive goals is always more attractive than a vision that is too narrow in scope. When my close friend Joe Teplow conceived of the Good Today model, what immediately grabbed our interest was the fact that my single quarter, his quarter, and everyone else’s quarters together could eventually add up to donating entire hospital wings, building desalination plants, and funding ground-breaking research on a daily basis. Is it a crazy dream? Probably. But is it achievable? Heck yeah. When our child was born and people found out we were moving to Israel, more than a handful of people jokingly said to us that our kid could become the prime minister one day. I would laugh it off, but it’s left a slight echo in my mind — I mean that could actually happen. Rest assured that was not the reason we decided to have children, but our belief that every single person actually has the capacity to change the world is a dream worth striving for. Finally, my family’s move to Israel is the culmination and beginning of a closely-held personal dream — and Israel itself is the ongoing fulfillment of a religious and secular dream of the Jewish people for millennia. Today there are over 6 million Jews here and Tel Aviv is one of the strongest centers and exporters of innovation in the world. Of course it didn’t start that way — 150 years ago there were not 20K Jews living in their historic homeland and Tel Aviv didn’t exist. But like with every long journey, it began with single, focused steps.
4. …But Build Small.
The dynamic between vision and focus is critical. While the story-telling ability of a charismatic founder can generate an initial burst of excitement from an investor like myself, the brilliance of the picture painted quickly fragments into the details and the conversation should naturally shift towards the steps necessary to actually build it. A SaaS business that ultimately wants to serve various sizes of companies from SMB to Large Enterprise simply can’t start off by selling to both. A robotics company looking to commercialize their systems for multiple industries is better off picking one or two to start with. In the beginning, iterating quickly and tackling features one by one is far more attractive than spending the time, energy, and money building a full-suite solution only to find out that who you thought were your potential customers actually don’t exist. I might strongly believe in the vision — but ultimately what are the steps? For our family, the move across the world didn’t happen overnight. From getting our degrees and professional experience in the US to building relationships and a network in advance, we felt that to best achieve our goals we had to have some semblance of a step-by-step plan (and thank God it mostly came together!).
5. Don’t Read “Twelve Hours Sleep by Twelve Weeks Old”
OK — apparently that book is actually super helpful. But in reality no amount of parenting reading material will ever fully prepare a new parent for what it means to have and care for a child (Disclaimer: I may not have read any of the books we bought so I can’t say for sure). At some point, whether it’s how to burp your baby or put them down for a nap, your instincts kick in and you just know. The limited information to work with (not to mention every child is completely different) and the fact that you can’t ever know everything means that there are certain decisions you have to make with a leap of faith. This is magnified at the early-stage more so than at any other stage of investing. You can do your technical diligence, your reference and expert calls, and build bottoms-up and top-down market estimates, but at a certain point — and it can be in the first 5 minutes of a meeting or after weeks of analysis — it’s time to trust your gut. Yet, VC is not akin to a game of roulette — an investor’s lens is trained and refined over time with our sub/conscious recognizing patterns and opportunities that others (and even ourselves) may not notice. Our brains pick up on signals we didn’t even know were there — and it’s the pattern recognition that one hones over the course of his or her career and personal life that helps foster better decision-making long-term.
Thanks for reading blog #1! I promise the next one will sound a lot less like a motivational poster. Here’s to hoping I learn more than 5 things in 2019!
