David Rose occasionally shows up in my inbox by way of Columbia’s BVC mailing list. This week he hit a nerve:
The bottom line is that raising money from anyone, including both angels and VCs, is really, really tough. Since only the top 2% of companies looking for angel funding succeed in getting it, that means you have to be one of the top two deals out of a hundred who are looking for the same money…and many of the others have companies that are much further down the path than you are.
He’s looking at fund raising like it’s some sort of goal. Fund raising is a friction to your success. A necessary one, sometimes, but a friction nonetheless. Most technology startups can choose early on to spend time looking for seed money or build a prototype instead. Assuming you could achieve either, in one scenerio you’d end up with no business and some money, while in the other you’d have a tangible product and a hungry market vying to invest in its success.
The time and distraction of the fund raising process must be worth the benefits, right now, to your business. Outside investment is not an achievement or a prerequisite to success. It’s just one of several strategies that can help you out along the way.
Via Fred Wilson,
I believe that in startups, like venture investing, the cost of making a bad decision is not nearly as great as the benefit of making a good one. So I like action oriented leaders. …
If you are “action oriented” in your hiring, you’ll make more hires and more of them will not work out.
This feels exactly right for startups, and it’s one of the key advantages a company like ours has versus someone much larger. Every person we’ve hired for Perpetually jumped first into a small project that could be completed in about 10 hours. Most often it’s the tip of the iceberg for a much larger idea the candidate will focus on if they’re hired. Joining our team should be a smooth transition with few if any surprises. If the candidate is excited and curious, that’s a very good sign. If they can’t communicate or deliver, it gives us an opportunity to improve early on.
Hiring is a two-way street, and this quick-fail approach has proven to be an excellent way for candidates to learn about how we work and if they want to stay. We’ve definitely found great people, in less time, because of it. It’s exactly how I hope to find talented a front-end person as we start a new search this week.
We’ve got some awesome projects in the queue at Perpetually. If you’re into innovative uses for the browser, using the full DNS database for something altogether different, and know (or want to learn) Python, please contact me somehow!
Thanks!
TechCrunch has labeled this year’s TechCrunch50 as, basically, the triumph of the dull. As one of the companies on stage, let me respond by saying, Thanks! It wasn’t clear we could do it, but we did! And your praise means everything.
Sarah Lacy writes,
I want to see huge audacious failures and huge gaudy wins.
This follows Arrington’s argument a couple weeks back that Twitter shouldn’t “turn on revenue” because it might prove bad for business.
We started Perpetually.com to be a real business. We have some serious challenges, and approximately none of them come from a lack of funding, competitive edge or market position. We’re going to make a lot of mistakes (hint: we’re making some right now), and we’re going to fix and learn from all of them. We’re going to innovate in increments and we’re going to stumble into huge blue oceans. But we’re never going to “swing for a fences” when rock-solid improvement will serve our customers and business best.
Jason & TechCrunch were nice enough to provide invites to all TC50 companies (“alumni”) from previous years. You know what *I* kept hearing backstage?
Where are they now?
Turnout was like twenty percent at best. Where did everyone go? After the headlines have gone, where does all that swinging for the fences leave you?
We’re running Perpetually.com as a long-term business exactly because we want to change the world. Our opportunities are so big that we’d be idiots to go for broke with every idea. Only someone with no options swings for the fences.
