So you want to be a junior VC? | Startable - Healy Jones' & Pras You want to get a job as a junior venture capitalist? Really? Have you seen the state of the venture market? 10 returns are falling and there is not end in sight and the venture industry is shrinking… But, OK, you want to get a junior investor role at a venture capital firm. Having collected job offers at over a half a dozen venture and private equity groups (and having been rejected by countless more!) I’ve got a pretty strong opinion on how to prepare for an interview with a venture firm. The 1st questions to have answers to when interviewing for a venture capital position This is not an inclusive list of topics to prepare for, but these are probably the top few questions that you need to have solid answers – and you should have practiced them so they are concise and impactful. Why now? A. Be knowledgeable on several industries/spaces that you think would be interesting investment areas for the fund.
The ideal startup career path For most people I know who join or start companies, the primary goal is not to get rich – it is to work on something they love, with people they respect, and to not be beholden to the vagaries of the market- in other words, to be independent. The reality is being independent often means having made money and/or being able to raise money from others. A while back, I posted about how I recommend thinking about non-founder option grants. In the comments, Aaron Cohen made the point that given today’s “good” exit sizes and standard equity grants, most non-founders will not gain independence even in the (non-extreme) good cases: Most startup employees need to realize they are on a journey and that in addition to making a few hundred thousand dollars on a good outcome they are learning how to become more senior at the next company. Real wealth creation will take founding, seniority, or staggeringly large exits. As Aaron said, you shouldn’t think of joining a startup as just joining a company.
The best companies are analytical | The Equity Kicker There is a new survey out from IBM which has found: Top-performing companies were 15 times more likely to apply analytics to strategic decisions than their underperforming peers and: In addition, top performers were 22 times more prepared to challenge the status quo in their organizations, rethink current strategies and business processes, and aggressively apply and act on new insights derived from analytics. The conclusion is nothing new, but I was surprised how stark these results are. For Internet companies in particular good management is all about analytics, insight and gearing the organisation to a set of metrics. One of the best people I know in this regard is Will Reeve. As we all know only too well startups are resource constrained and in this area as with all others there is a balance to be struck between thoroughness on the one side and speed/capital efficiency on the other, and most of the companies in our portfolio aren’t taking the use of data and analytics as far as IBM.
What Startups Are Really Like October 2009 (This essay is derived from a talk at the 2009 Startup School.) I wasn't sure what to talk about at Startup School, so I decided to ask the founders of the startups we'd funded. I'm in the unusual position of being able to test the essays I write about startups. So I sent all the founders an email asking what surprised them about starting a startup. I'm proud to report I got one response saying: What surprised me the most is that everything was actually fairly predictable! The bad news is that I got over 100 other responses listing the surprises they encountered. There were very clear patterns in the responses; it was remarkable how often several people had been surprised by exactly the same thing. 1. This was the surprise mentioned by the most founders. What people wished they'd paid more attention to when choosing cofounders was character and commitment, not ability. Here's a typical reponse: You haven't seen someone's true colors unless you've worked with them on a startup.
The VC And Startup Industries Must Do A Better Job Seeding A Sta You Weren't Meant to Have a Boss March 2008, rev. June 2008 Technology tends to separate normal from natural. I began to suspect this after spending several years working with startup founders. Though they're statistically abnormal, startup founders seem to be working in a way that's more natural for humans. I was in Africa last year and saw a lot of animals in the wild that I'd only seen in zoos before. Trees What's so unnatural about working for a big company? Another thing you notice when you see animals in the wild is that each species thrives in groups of a certain size. Whatever the upper limit is, we are clearly not meant to work in groups of several hundred. Companies know groups that large wouldn't work, so they divide themselves into units small enough to work together. These smaller groups are always arranged in a tree structure. In practice a group of people are never able to act as if they were one person. Anyone who's worked for a large organization has felt this. Corn Syrup It's not your boss's fault. Notes
Why Do Harvard Kids Head to Wall Street? By James Kwak That’s the title of a post a couple weeks ago by Ezra Klein, in which he interviewed a friend of his who went to Wall Street after Harvard. Having seen this phenomenon from a couple of different angles, I’d say the interview is right on. This is how Klein summarizes the central theme: “The impression of the Ivy-to-Wall Street pipeline is that it’s all about the money. You’re saying that it’s actually more that Wall Street has constructed a very intelligent recruiting program that speaks to the anxieties of the students and makes them an offer that there’s almost no reason to refuse.” When I graduated from college, I had no interest in investment banking or its close cousin, management consulting. The recruiting processes of Wall Street firms (and consulting firms, and corporate law firms) exploit these (faulty) decision rules perfectly. The second selling point is that they make it easy. The third selling point — not the top one, but it’s there — is the money.
How I Graduated from Harvard, Turned Down Google, Got a Job On T Gamers make faster decisions than nongamers, just as accurate There's a significant controversy over the value of games that are designed to improve people's mental faculties, as some studies have indicated that brain training only helps prepare you for similar tasks, while others indicate that general improvements are possible. But there turns out to be a type of game that is known to boost a variety of skills, from decision making to tracking multiple objects: standard action games. A study, released today by Current Biology attempts to explain how these video games can produce such wide-ranging improvements. The authors of the study argue that the root of all these tasks involves making a probabilistic inference, where complete information is missing, so people have to make a best guess based on known odds. The work started with two sets of subjects, gamers and non-gamers. When set loose on this task, both groups performed equally well in terms of accuracy, but the gamers produced the response more quickly than their peers.
Why Your Startup Should Be Involved in Open Source Oftentimes, when you hear the arguments for "Why open source?", they are aimed at convincing companies to use open source software. But the other piece of the argument is, of course, an argument for why your company should build open source - why it should develop its technology in a community-driven, open sourced way. Along those lines, Peter Friese, head of mobile development at Itemis recently wrote an article arguing "Why Your Next App Should Be Open Sourced." He lists the following "pro open source" reasons: Building a Better Product "By open sourcing your code, your code will become better," Friese writes. These are all compelling reasons for any developer, but for startups in particular, the ability to improve your code quickly can be incredibly value, particularly if you find yourself iterating rapidly. Building Developer Recognition But open sourcing your projects can also grant substantial awareness and recognition for your company.
You need to use social services to understand them I don’t know if Malcolm Gladwell is right when he claims “the revolution will not be tweeted,” but I can say with certainty that the Twitter he describes is not the Twitter I know. Gladwell’s central argument is that Twitter creates weak ties but social movements require strong ties. I’ve made more strong ties through Twitter (and blogging) than I have through any communications medium I’ve ever used before. The relationships start off weak – a retweet, @ reply, or blog comment – but often strengthen through further discussions and eventually become new friendships and business relationships. I can see why Gladwell gets this wrong – he doesn’t seem to really use Twitter (he does blog occasionally). I made some jokes on Twitter the past few days about Kleiner Perkins’ new social fund. I’d love to engage in a debate with smart people like Gladwell about the impact of the social web on culture, politics, activism and so on.