Launchtalk #1 — Danielle Strachman

Danielle Strachman is a co-founder and general partner of 1517 Fund and a senior advisor to the Thiel Fellowship where she supports entrepreneurs with grant, pre-seed, and seed funding for technology startups. Her main goal through her work is to bring out the hidden talent of young entrepreneurs and innovators, namely those who aren’t geared towards the path of higher education. With her expertise in the sectors of technology, entrepreneurship, and education, she guides and prepares the entrepreneurs of tomorrow. She spoke at Swarthmore’s Launchtalk event on 2/18/21.

Disclaimer: Quotes have been shortened and lightly edited for clarity.

The need for constant learning

“One path is not for all. There are many different ways to become an educated person and having a diploma is one way to do that and charting one’s own course is another way to do that. I think as all of you will see you’re going to be doing that with or without the diploma anyways. Your careers are going to develop, the things you’re going to do are going to change drastically over time and it’s not going to stay the same. It’s highly unlikely for me these days to see someone in the same role for even two years. So people are always forging ahead and thinking about how do I develop as a person and how do I develop my skills into roles I want to go into. This is the future of work and the future of learning.”

How does 1517 Fund determine what founders to fund?

Building Relationships

“Capital partnership is just one thing we do at 1517. It’s actually the least likely thing we do with anyone we work with because we write about one check a month into a company. With that said we work with lots of students. We’ve built a large community with 1517. The reason we do this is that we believe in building relationships with people over time, sometimes that means mentoring people, sometimes that’s through giving them grants.”

Data Points Over Time

“We love to collect data points on people over time because when you’re making an investment at the pre-seed stage there isn’t a lot of data. I can’t ask you for a spreadsheet, there’s no profit-loss statement at this stage, it’s really who your team is, what abilities you have, and if you have the character development to get through something hard. I can only know these things about a person if I know them over time. So that’s why we do things like our grant program.”

Technical Skillsets

“There are lots of things when it comes to the characteristics of founders. One thing is, does this team have the ability to build this. We’ve met lots of founders over time who are great people and have a great idea for a business but don’t have the capacity to build what they want to build. What they think they’re going to do is hire a dev shop or be able to hire employees to build it. But the hard part is that it’s just all so expensive. That’s why having a technical co-founder and someone willing to take equity to do something risky is important because you want someone else in the boat with you who’s essentially willing to work cheap for something that could be very valuable later on.”

Hyperfluency

“We also look for a particular quality we call hyperfluency. It’s when someone has the ability to talk both backwards and forwards about an idea but also at multiple levels. So we’ll talk with founders who are geniuses in their arena but we’ll ask them to talk to us like we’re the dumbest golden retrievers you’ve ever met and tell us what you’re doing. So what we’re looking for there is do they have the ability to talk about things at different levels about what they’re building. This is important because if they’re going to do sales, if they’re up in the technical weeds all the time that’s not necessarily what makes for a good salesperson. it’s also not makes for a good hiring manager. If you’re hiring people and bringing them on, you need to communicate at different levels. So the way someone communicates is very important to us.”

Most important lesson for young founders to learn and advice for people interested in startups especially in the tech industry?

Startup problems are common across all founders

“I have trouble with the “young founders” questions because sometimes I’ll talk with older founders or even multiple-time founders and they’ll still struggle with the same things. So don’t necessarily always chalk things up to your age.”

The importance of prioritization and self-awareness during times of scarcity

“One observation we’ve made over the years observing which teams fell apart and which teams stay together, is really systemic to startups. It’s when resources get scarce (time, money, bodies on the team, attention, etc.) it becomes harder to make decisions; everything feels more urgent. And we’ve noticed two patterns that teams go into. The best-case scenario is when co-founders keep working on the problem. It’s like surgery. The body is on the table, which is like your startup, and you’re making all the progress you can. You’re working on sales, you’re focused on making more money, and you’re able to know what are the most important things to focus on. These types of founders are able to get through hard times a lot easier. Founders who can’t tend to become control freaks and you’ll see them have their hand in everything. You’ll also see founders pointing fingers at each other blaming each other for not doing things the right way. Founders will think what’s happening with their startup is very personal when it’s actually systemic. If you’re working on a startup you’ll come across certain types of challenges — one of which is working with a co-founder. It’s more of where are you going to focus your attention and do you have enough self-awareness to catch yourself and say “we’re at a really high-stress point right now, we know it’s normal to fight and so we’re going to treat this as a normal thing that’s happening instead of as a huge problem.”

Learn to manage

“Management is hard. Younger founders in particular don’t have that much management experience, even including just having a good manager. Younger founders need to know to read books, have mentors, and listen to feedback from your team members because they want you to grow too.”

How does someone come up with a great startup idea and knows when to pursue them?

Be your own first customer

“We are fans of founders who’ve experienced the pain point themselves and are solving something they understand deeply. You are your own first customer. Doing a startup is really hard and if you don’t deeply care or are interested in the industry it’s just not worth it. The chances of the startup doing well are so small that you have to be doing it for reasons other than fame or fortune. Because if those come at all, it’s not for many years, so you have to have a sustaining motivation that works. So I would think about what is your underlying motivation for starting a startup.”

Prioritize idea validation

“Once you start, you need to start validating your ideas. Too many we’ve seen perfectionism kill off the good. You have to talk to customers early and get feedback because that’ll drive the direction you go.”

Pivot and adapt

“Don’t be afraid to iterate and pivot and follow hunches, especially at the early stages. Any good investor is going to want you to do that. If an investor wants you to stick with KPIs that aren’t working, that’s a dud. Don’t do that.