reecepacheco

The other day I talked about Jeff Bussgang’s book Mastering the VC Game. I highly recommend this for anyone who thinks they may want to raise venture capital someday.

In the book, Bussgang includes the stories of some stellar entrepreneurs. In particular, I loved the story about Eric Paley who keenly built and successfully sold his startup to 3M.

There are a few reasons Eric was so successful, but one lesson that stuck out to me was how he developed his network early. He made the connection to Jeff as an MBA student, before even mentioning his startup. When it was time to pitch the idea, he already had a warm connection.

Conversely, when we started building HomeField, we didn’t have any connections to the world of investors. We really didn’t know much about startups at all. We just wanted to create this thing to scratch our own itch and figured we’d learn along the way.

Over time, I slowly started to hear about some of the major players online: Fred Wilson, Brad Feld, Bijan Sabet - but I still didn’t know anyone who knew them!

However, thanks to their life-streaming and my avid reading/commenting habits, I was able to develop a relationship with them through their blogs and eventually met with all of them in person (one in an office, one on a 6am run around the Flatiron District, and one on a football field. Ok, coffee first, then football).  

I’m lucky I was able to do this, but it took time to get there and I’m still playing catch-up. I wish I’d known them sooner. Hell, I wish I’d started this business before I even graduated, but then I wouldn’t have done this, this, or this.

Point is - if you think you may want to work with someone in the future, make the connection as soon as you can… and in general, make as many good quality connections as well. As I’m learning from our ‘sherpa’ Allen Morgan, they’ll pay off in the long run.

[And to be clear, I mean real connections. Facebook, LinkedIn et al. are great for research, but they don’t count.]

A little over a year ago, I started spending time with a girl I’d met just once while we were in school together at Brown. On a whim, I invited her over for “a dinner party I was planning” and when she accepted, I then had to scramble to actually invite other guests, too!  [Cooking was no problem, though]. ;)

Despite the long roundtrip on the subway for her, I leveraged the big TV in my apartment as a reason for her to come over and watch the Celtics in the playoffs.

Apparently, she liked me. [Update: And still does!)

And I her.

Today, marks one year together and I’m still as excited about us now as I was last May 19. It’s been a really fun year, despite the stress of my rollercoaster life as a startup founder and hers as a student living in NYC.

Some of my favorite moments have been on the beach at home on Cape Cod, running races and doing a triathlon together, cooking in our tiny apartment, teaching Daisy to surf and snowboard for the first time (yes, this was actually fun!), seeing the Yeah Yeah Yeahs play ‘Maps’ acoustic at Radio City Music Hall… 

…but still, the most vivid moment was a year ago today, sitting on a bench watching the sunset together from the tip of Manhattan.

I finished reading Jeff Bussgang’s book Mastering the VC Game last week. It’s a great, quick read that anyone starting out in tech/startups/VC should read (especially founders planning to raise money).

Lots of rookie founders subscribe to a diet of self-education through blogs/books (often about fundraising because it’s foreign as first-timers). I sometimes refer other newbies to my Entrepreneur’s Reading List including classics like Getting Real, inspirational works like The Monk and The Riddle, and prolific bloggers like Fred Wilson and Mark Suster.

I’ll admit though, some of it turns into an echo chamber. “start building something, get traction, iterate on feedback, raise capital only if necessary, work hard, innovate…” etc. I’m not putting all this advice down, but Bussgang’s book touched on something new for me.  

…the most essential element in the relationship between the entrepreneur and the VC boils down to one word.  Chemistry.

Bussgang advocates developing a great, communicative foundation between entrepreneur and VC in order to have a successful business. By communicating early and often to develop chemistry, they can work together more harmoniously than stereotypical ‘vulture capitalists’ are known for. Furthermore, Bussgang notes that entrepreneurs cannot simply look at a VC like an ATM with a hefty fee.

I generally try to be very terse in any communication with VC’s. They’re busy guys so it’s tough to break through the noise. Likewise in any pitch I’ve had - I cut right to the chase. But in hindsight, this is too transactional. The best VC’s want to get to know the entrepreneurs and figure out how they can really help build a great business.

…and thinking back on it, the best meetings I’ve had are when I’ve ditched the deck and been the most candid about who I am and what makes me (and my founders) tick. And when the VC’s open up the same way, we can really see eye to eye and start to work together.

A lot of entrepreneurs bemoan pitching investors, but I’ve learned to love it. These guys have tons of experience and I’m excited to learn from them and work more closely together to build a great business.

There’s a ton more good advice in the book. Go read it.

I recently finished a book in which one scientist references the Handy Hammer Syndrome:  

‘When you’ve got a hammer in your hand, everything looks like a nail.’

He’s referencing some research by a student who claimed (against established thought) that early man evolved into runners, but the scientist knew the student was an avid runner himself (so he was using the hammer in his hand).

Let’s look at a few cases* of the Handy Hammer in web-tech:

• Google’s hammer is Gmail.  They used it to hammer away at social and are failing miserably with Buzz.
• Twitter’s hammer is was its developer API.  Without it, Twitter would not be where it is today, but after their recent announcement to acquire Tweetie, the Twitter developer community is not happy at all and scared for the future.
• Facebook’s hammer is the social graph.  They’re banging away furiously now and users are not psyched about their data being collected and used without first opting in.

In each case, these companies are using the hammers in their hands to bang at problems that may actually need a screwdriver, or a wrench… or no tool at all.

Though it’s not necessarily the right approach, it’s pretty natural.  Think about anything you’ve done in your life, any problem you’ve solved.  You likely have a few standard answers or remedies for any given situation… but that doesn’t mean it’s the right solution.

People rely on their hammers (their strengths), settle into habits and consequently develop a weak tool-belt for creatively solving problems.

Think about yourself, are you using the same hammer for every problem?  Next time think twice and make sure you’re using the right tool for the job…

*Note: These companies have more than one hammer, but I picked these cases as they are the most current examples.