« swipe left for tags/categories
swipe right to go back »
While FAKEGRIMLOCK and all of the humans he has let survive are hanging out at the TechStars SXSW party, I’m at home with Amy, buried in a snowstorm, reading. I haven’t read much this year – I’ve been overwhelmed with work and writing and haven’t had much energy for reading. Which is dumb, since I love to read, and it’s an important way I discover new things and think about things I’m interested in.
A copy of Clay Christensen’s new book How Will You Measure Your Life? ended up finding its way to me. It’s signed by Clay and his co-authors James Allworth and Karen Dillon so I assume someone sent it to me. I read it tonight. It was timely and excellent.
One of the chapters in Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur that was especially challenging for me and Amy to write was the one about children. We don’t have any, so we enlisted a bunch of friends to write sections of it. I’m proud of what they wrote and think it hits the mark, but it is an area I struggle to understand since we made a deliberate decision not to have kids. So I dug into the middle section of the book where Clay spends a lot of time talking about children in the context of measuring one’s life. I learned a lot from it that I think I can apply to my interaction with children that are not my own.
Clay very deftly uses business concepts to set the stage for a deep discussion of how to think about your life, your values, and how you operate. The one I liked the most was his discussion of the theory of good and bad capital. It’s very nicely linked to the Lean Startup methodology (without realizing it). The theory is that early in their life, companies should be patient for growth but impatient for profit. Specifically, they should search for their business model, and long term strategy, before stepping on the gas. This is good capital. Bad capital early on will be impatient for growth ahead of profit.
When companies accelerate (search for growth) too early, they often drive right over a cliff. However, once the business model and strategy is figured out, then companies should switch modes to be impatient for growth but patient for profit. Invest like crazy when you’ve got it figured out.
The section that follows is awesome. You need to read it to get it, but imagine the notion of how you invest in friendships, in your children, and in yourself. At any particular time are you focused on growth or profit? Do you have them sequenced and allocated correctly? Clay’s punch line is:
“There are two forces that will be constantly working against [your investments in relationships with family and close friends.] First, you’ll be routinely tempted to invest your resources elsewhere – in things that will provide you with a more immediate payoff. And second, your family and friends rarely shout the loudest to demand your attention… If you don’t nurture and develop these relationships, they won’t be there to support you if you find yourself traversing some of the more challenging stretches of life.”
I’ve just had one of those stretches – I spent the past three months struggling with depression after having a bike accident, wearing myself out travelling for two months, and then ending up in the hospital to have surgery to remove a kidney stone. I’d made the right investments in my relationships so it was easy to cash in on a bunch of them, and I appreciate greatly everyone who invested energy and support in me. I came out of the depression around February 14th and I appreciate more than ever the value of investing in these relationships. I now have a powerful business analogy – that of good and bad capital.
There’s a lot more in How Will You Measure Your Life? It’s a great companion to Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur and very easy to recommend to anyone who is trying to live the best life they can.
In the last month I’ve had the chance to make about 50 new friends. I’ve suddenly become very popular with investment bankers and have been on the receiving end of over 50 emails that look something like the following:
“We met once a long time ago when I was with firm X. I’m now at firm Y. We are the blah blah blah best at blah blah most successful blah blah tied into blah blah working with blah blah blah connected with blah blah blah. Congrats on all the success at Company W. We are very interested in talking to them about blah blah strategic blah blah – can you introduce us to high-profile-CEO.”
At first I felt compelled to respond as part of my “answer every email and try to at least be polite / responsive to everyone” approach to life. After a few days, I started getting annoyed when I realized I was simply viewed as a conduit to an introduction. When I saw a few similar emails to my co-investors in at least one company, I realized that there was a complete lack of sincerity in many of these emails – it was no different than a random salesman emailing me asking if I wanted to buy a random widget.
Now, I have several good friends who are investment bankers and we have a handful of trusted ibanking relationships and folks who are our go-to ibankers. These are people who have developed a long standing relationship with me and my partners, have worked with us in good times and bad, and have always been reasonable and thoughtful about their fees, especially in situations that didn’t work out.
It amazes me that 50+ people could suddenly come out of the woodwork in an effort to “build a new relationship that’s not really a relationship” thinking it would give them an opportunity, or even an advantage, in the context of a set of hot companies.
When I think about the relationships I’ve developed, whether it be with investment bankers, LPs, co-investors, or anyone else, they evolve over a period of time. They don’t require boondoggles or fancy things; they require sincerity and substantive interaction over a long period of time. Then, when there are moments of opportunity, these are the people that I go to (and hopefully who come to me.)
There suddenly seem to be an abundance of “transaction relationships” out there. Entrepreneurs beware.