the cornice

I care less about product everyday. I care more about people and markets everyday.

With seed stage companies, most everything is mutable. The founders are forever The Founders but the team will grow. The product will morph. And the name will probably change too. That this all happens is a good thing. It should be encouraged amongst both founders and company advisors. The best seed stage companies are creatures of learning. I’ve written about this before in a post on pivoting.

At First Round Capital, this is something we talk about a great deal. Every year, we review more than 2500 plans and presentations on ideas for new businesses. We typically invest in 20 new companies every year, but we continue to follow the development of many companies that we have chosen not to fund. While doing so is often humbling, this has allowed us to develop a tremendous amount of institutional knowledge on business building.

We recently carved out some time to review and discuss some of the data we have collected. This involved checking our old notes from company meetings and revisiting their original pitch decks. It’s a staggering exercise actually. Seed stage companies become successful through paths that nobody can imagine. Many of the companies which grew to be most successful, identified their initial market correctly but missed on the specifics. Often, they knew to target a certain type of user or community, but were off in identifying the growth engine of their business.

The currency of an early stage business isn’t revenue or profit, it’s learning. Products and features are tactics employed to test and reach a market vision. After our data review, I’m more convinced of this than ever. When product roadmaps are spec’d and fundraising is planned, they need to be done so with the intent of discovering what is and what is not working in a business. Every feature / pixel / byte is a chance to take another step to a market vision. When they don’t another tactic is needed.

The best entrepreneurs know this. I’ve seen the data.

It’s always surprising when you see the lessons of the tech start-up world reveal themselves in unexpected places. This past weekend my I saw the movie, “The September Issue.” It is a documentary on the production of a single issue of the women’s fashion magazine Vogue and its editor Anna Wintour. The movie is true story behind “The Devil Wears Prada” and Ms. Wintour is said Devil. For any entrepreneur, it is “much watch” material.

Some background on the story. The September issue of any fashion magazine is the most critical issue of the year. It is the issue that sets off the fall and holiday buying season. September is to the fashion publishers what December is to retailers. Of course, in the world of fashion magazines there is no publication more important than Vogue and no person more important than the iconic Wintour. Wintour is known for scaring and scarring both designers and her team alike. In this regard, she does not disappoint. But “The September Issue” is also an opportunity to witness the best in their field prepare for their biggest moment.

Some of the start-up related lessons from witnessing the Devil herself:

• Delusion is Good. There is a revealing scene in which Anna Wintour discusses her siblings and what they do for a living. One is involved in non-profit work, another is an Editor for the UK’s Guardian newspaper. She then says, “I think my family is amused by what I do.” But she is not. The world of couture is not frivolous to her. Vogue is important to the world. It is easy to laugh at this notion, but for those outside the tech world  it’s also easy to laugh at the notion that creating better online ad platforms, communication systems, shopping experiences is important. If you are going to start a company, start by believing that what you are setting out to do is important.
• Love what you do. If you succeed in convincing yourself that your idea is important, chances are you will love creating it. There is a scene in “The September Issue” in which Grace Coddington, the Creative Director of Vogue, just having been dressed down by Wintour muses “Well, of course, I want the issue to be a success. My job depends on it.” Coddington will never have difficulty finding employment. She isn’t speaking about employment. She has long and storied career in the fashion industry and many would fight to hire her today. Vogue clearly is not a “job” to her. You can see the way in which she revels in her work (its struggles) and colleagues she is passionate about Vogue. It is her life.
• Refine, Release, Repeat. Here’s the plot of the film. They set out to produce an issue of magazine. They struggle with production. They fight. They refine what they want the issue to be. They reshoot. They find new inspiration at the latest possible date. And then they release their creation to the world… And then, just before the credits role work begins on the October issue. Sound familiar?

This post is a bit of a commercial and I have no intention of apologizing for it. In fact, I’m incredibly proud of it.

Many venture capital funds will tell prospective entrepreneurs, “If you take funding from us, you won’t just have one person working on your behalf, you’ll have our entire team pushing for you and opening doors for you every day.” As you might expect some firms are truer to this mantra than others. For founders choosing their funding partners, this is one of the most important areas on which to perform diligence. Ask other companies in a VC’s portfolio how often they interact with multiple members of a VC firm. The answer will reveal an enormous amount about the health and culture of the partnership. As a founder, you want a VC that acts as one team of many people, not many people acting as many individual teams.

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