Success & Failure

What the greatest technology investors say about Success & Failure

SUCCESS & FAILURE POSTS (32 posts)

The following is a list of the post titles by author under this topic.  Scroll further down this page to find the actual blog post by your selected author.   Author’s posts appear in reverse alphabetical order except for Peter Thiel’s posts which appear towards the beginning of the page. For the others for example, following this list, Fred Wilson’s posts appear towards the beginning of the blog page, and Marc Andreessen’s posts appear towards the end of the blog page.  

MARC ANDREESSEN (2 posts)

Marc Andreessen:  Do Whatever is Required to get to Product/Market Fit

Marc Andreessen:  What Causes Success

JEFFREY BUSSGANG  (1 post)

Jeffrey Bussgang:  Why Twitter Picked Fred Wilson as its Lead Investor

JASON CALACANIS  (1 post)

Jason Calacanis:  Nothing Great Comes from Avoiding Failure

DAVID COHEN & BRAD FELD   (1 post)

David Cohen & Brad Feld:   The Number One Startup Killer

DAVID COHEN   (1 post)  

David Cohen:  Many Successful People are Deliberate about Randomness

BILL GROSS  (4 posts)

Bill Gross:    Lessons from Flops

Bill Gross:   The Great Thing about Failure

Bill Gross:   Don't Overbuild-The World can Change Very Fast

Bill Gross:   Balance Entrepreneur's Strengths

REID HOFFMAN & BEN CASNOCHA  (2 posts)

Reid Hoffman & Ben Casnocha: Success is Fragile - Be Paranoid

Reid Hoffman & Ben Casnocha:  Achieve Big Success:  Be Contrarian and Right

JOSH KOPELMAN   (2 posts)

Josh Kopelman: Companies are Bought, not Sold

Josh Kopelman:  High Valuations Can Limit Exit Opportunities

MIKE MAPLES JR.  (1 post)

Mike Maples Jr.:  When a Team Meets a Market

DAVE MCCLURE   (1 post)

Dave McClure:  Startup Success Often Boils Down to 2 Things

HOWARD MORGAN   (1 post)

Howard Morgan:  Fail Quick & Cheap

BASIL PETERS   (3 posts)

Basil Peters:  The Exit Strategy is the Most Important Business Plan Element

Basil Peters:   Why VC's Block an Exit

Basil Peters:   Basil Peters: What He Looks for in Successful Entrepreneurs

MARK SUSTER   (4 posts)

Mark Suster:  Mark Suster:  Angels Need Five Skills to Excel

Mark Suster:   No Great Science to Determining Valuations

Mark Suster:  Select the Highest Quality Investor Available

Mark Suster:  Successful Entrepreneurs have these Qualities

PETER THIEL   (2 posts)

Peter Thiel:  A New Company’s Most Important Strength

Peter Thiel:  The Single Most Powerful Pattern in Successful People

DAVID TISCH  (1 post)

David Tisch:  Startups are Constantly Failing

ANDY WEISSMAN  (1 post)

Andy Weissman:  Overnight Successes Never Are

FRED WILSON  (4 posts)

Fred Wilson:  Hire Slowly & Wisely, not Quickly

Fred Wilson: What's the Magic

Fred Wilson:  Building the Business First

Fred Wilson:  Wear your Failures as a Badge of Honor

The Single Most Powerful Pattern in Successful People

Peter Thiel General Partner Founders Fund and former entrepreneur

“[] this book [Zero to One] offers no formula for success. [] because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.”   Peter Thiel, Zero to One, copyright 2014, pg 2-3

A New Company’s Most Important Strength

Peter Thiel General Partner Founders Fund and former entrepreneur

“A new company’s most important strength is new thinking []. This book is about the questions you must ask and answer to succeed in the business of doing new things [].  Because that is what a startup has to do: question received ideas and rethink business from scratch.”   Peter Thiel, Zero to One, copyright 2014, pg 10-11

Building the Business First

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“[Some] founders [] suggest building the business first (even if it takes longer) and then seeking investment later after it's proven successful and has a strong growth trajectory. [] Examples [][are] StackExchange and DuckDuckGo.” Wilson responds that “[] that's a great model if you can do it.”  Fred Wilson Burn Rates: How Much? Comments section, Dec 12, 2011 ; http://www.avc.com/a_vc/2011/12/burn-rates-how-much.html

What's the Magic

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“It’s the right person or people, with the right idea, packaged up with the right product at the right time in the right market…and  [] that’s the magic.”  Fred Wilson  #StartupStories: The Pitch @ 4.3 min into video, May 30 2012   http://nytm.org/resources/startupstories;  The Pitch: http://www.youtube.com/watch?v=0GxeVu5izLg

Hire Slowly & Wisely, not Quickly

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“[Wilson’s] strong bias on [optimal headcount] [] is that  less is more.  [Repeatedly] [he’s] seen the entrepreneur who wants to hire quickly fail and [] the entrepreneur [who’s] [] slow to hire succeed.”

In his experience with software-based consumer internet businesses, “[] [success] might be most highly correlated with a slow hiring ramp [] [during a company’s early years.]  Being resource constrained can be [good] when [] getting started.  It forces [] [a] focus on what's working and get[ting] to the rest of the vision later on. []” His advice: “[] hire slowly and wisely instead of quickly.”  Fred Wilson MBA Mondays: Optimal Headcount At Various Stages, Jun 4 2012;  http://www.avc.com/a_vc/2012/06/mba-mondays-optimal-headcount-at-various-stages.html

Overnight Successes Never Are

Andy Weissman venture capitalist and Partner  Union Square Ventures 

“These things often times look like overnight successes but they never are. About a year ago I was at a conference and Dennis Crowley the founder of Foursquare was at the conference and Foursquare at the time was maybe two years old.  And someone [] [asked] Dennis [] how does it feel to be [] an overnight success [] [with] millions of users [].  And Dennis said actually [he’s] been working on it for 15 years, and 13 of those were failures before [he] got to the last 2 years, so it hasn’t been an overnight success.”  Andy Weissman , #startupstories: Failure @ .10 min into video, Published on Sep 10, 2012 ; NewYorkTech Meetup #Startup stories , http://nytm.org/resources/startupstories;  

Failure: http://www.youtube.com/watch?v=lS3o2Pv355U

Startups are Constantly Failing

David Tisch angel investor, Managing Partner The Box Group and Co-Founder TechStars NYC

 “You are constantly failing as a startup.   It’s how quickly you rebound from that failure that might lead to success.” David Tisch, #startupstories: Failure @ 1.3  min into video, Published on Sep 10, 2012 ; NewYorkTech Meetup #Startup stories , http://nytm.org/resources/startupstories;  

Failure: http://www.youtube.com/watch?v=lS3o2Pv355U  

Successful Entrepreneurs have these Qualities

Mark Suster Partner Upfront Ventures and former entrepreneur

 Suster believes successful entrepreneurs have these qualities:  “1. tenacity, the most important [].  2. street smarts []” including “[] know[ing] [] how customers buy and how to excite them [], [an ability to] spot opportunities that aren’t being met and [] design products to meet these needs. []”. “3. ability to pivot []” which “[] might just be a totally different business model.[]”  “4. resiliency  []. 5. inspiration [].  6. perspiration [].  7. willingness to accept risk []. 8. attention to detail [].  9.  competitiveness []. 10. decisiveness []. 11. domain experience []. 12. integrity  []”.    Mark Suster, Entrepreneur DNA, December 15, 2009;http://www.bothsidesofthetable.com/entrepreneur-dna/ What Makes an Entrepreneur (2/11) – Street Smarts December 16, 2009

http://www.bothsidesofthetable.com/2009/12/16/what-makes-an-entrepreneur-210-street-smarts/

What Makes an Entrepreneur (3/11) – Ability to Pivot December 17, 2009

http://www.bothsidesofthetable.com/2009/12/17/what-makes-an-entrepreneur-310-ability-to-pivot/

Select the Highest Quality Investor Available

Mark Suster Partner Upfront Ventures and former entrepreneur

 Suster advises entrepreneurs to select the highest quality and most experienced investors available.   It’s generally better for the company long term to have the right investors vs. optimizing every last piece of equity up front.  “Worrying about giving up an extra 10% [equity] at [an early] stage can be meaningless if the ultimate outcome is either success or failure.”  Mark Suster, Raising Angel Money, July 19, 2009; http://www.bothsidesofthetable.com/2009/07/19/raising-angel-money/

No Great Science to Determining Valuations

Mark Suster Partner Upfront Ventures and former entrepreneur

 “There is no great science to [how prices (valuations) are determined].  The earlier [one] invest[s] the higher the chances the company won’t work out and thus [one] pay[s] a lower price than later-stage investors. [An investor tries] to pay the appropriate price for [his] perceived risks of the company succeeding and protect [himself  if] it isn’t quite as valuable as [he] had hoped.  As the risks [] get eliminated the higher the valuation investors are prepared to pay.”  These risks over time are “[first] product [], [then] market [], [then] growth/scale [] and [finally] monetization/competition [].”    Mark Suster, Why Startups Should Raise Money at the Top End of Normal  June  5, 2011;  http://www.bothsidesofthetable.com/2011/06/05/why-startups-should-raise-money-at-the-top-end-of-normal/

Mark Suster: Angels Need Five Skills to Excel

Mark Suster Partner Upfront Ventures and former entrepreneur

Suster identified “[] five skills [angel investors need to excel]”:

1.  “Access to the Best Deal Flow” []

2.  “Domain Knowledge

“[]Domain knowledge [] [is] [well-honed industry knowledge].” “[] It requires domain knowledge to know what you’re talking about and success long term as an angel. [] One of the biggest problems is when “you don’t know what you don’t know.””

3.  “Relationships with VCs

“[] Relationships with VCs [] protect [angel] investments” by taking out angels’ positions. 

4.   “Deep Pockets

A company is either acquired or has an IPO in an average 7-10 years.  Suster says that angels’ deep pockets providing follow-on investments minimize these risks:  dilution, inability to protect good investments and a lack of deal diversity.  “[] [Angels] need to be able to do a large enough number of investments to create enough deal diversity.”  The greater the deal diversity, the lower the risk. 

5. “Access to Buyers”

“[] the best investors influence their end-games through well-cultivated relationships with eventual buyers of their portfolio companies.” [] [Helping] companies exit to the right buyer and importantly at the right time” can be crucial.  Mark Suster, Angel Topics Sept. 14, 2010 http://www.bothsidesofthetable.com/angel-topics/

Basil Peters: What He Looks for in Successful Entrepreneurs

Basil Peters angel investor and Principal Strategic Exits Corporation

 “[Peters doesn’t] require [teams to have prior business experience].  I don’t think it’s a good filter, because if you look at the track record of entrepreneurs, there’s very little correlation between whether it’s their first venture or their third or fourth or fifth and success. Very often the greatest success is from the entrepreneur’s first company.

[][Peters doesn’t] usually invest in single entrepreneurs. [Most] of the time, it’s a team that is successful. [] If there’s only one person, there are a lot more failure[s].”

Peters discusses what he looks for in successful entrepreneurs.  “Some of the characteristics are that the successful entrepreneurs are always incredibly driven, [] very bright, [] absolutely honest, and [] good leaders. They often have personality defects [and] usually have a significant amount of self-doubt.  All entrepreneurs have self-doubt, but the good ones have more self-doubt than the mediocre ones, interestingly.”  Basil Peters,  Seed Capital From Angel Investors: Basil Peters, CEO and Fund Manager, Fundamental Technologies II, July 2010;   http://www.sramanamitra.com/2010/07/05/seed-capital-from-angel-investors-basil-peters-ceo-and-fund-manager-fundamental-technologies-ii

Why VC's Block an Exit

Basil Peters angel investor and Principal Strategic Exits Corporation

“Most entrepreneurs don’t even know that a VC is likely to block an exit when they accept the VC’s money. [] VCs design their investment agreements to give them the power to block exits.”

“[] VCs will almost always block a sale where they only make a 3-4X return on their investment.  This could have easily been a 10X return for the angels and a 100X return for the entrepreneurs.

[] The winners [must] produce at least 10-30X return for the [VC] fund to perform respectably.

[] This propensity to block exits is one of the reasons that every company needs a clear exit strategy before [it approaches its] first investor.”  Basil Peters, How VCs Block Exits, August 28, 2010, http://www.exits.com/blog/how-vcs-block-exits/; Why VCs Will Block Good Exits;  http://www.angelblog.net/Why_VCs_Block_Good_Exits.html

The Exit Strategy is the Most Important Business Plan Element

Basil Peters angel investor and Principal Strategic Exits Corporation

The exit strategy is “the most important element in the business plan. [] It affects many daily business decisions. [] The chances of success increase dramatically [with] a good plan.  [It] is the plan for [] the entire business. 

[The] plan should start at the end (the goal).  An exit strategy could be as simple as: “Our exit strategy is to [sell the company] in about _ years for around $ _million.[]”

[] [With a well-designed and executed exit], [it’s] often possible to increase the exit valuation by 50 to 100%”, especially with early exits in inefficient markets. Basil Peters, Maximizing Exit Value Angel Capital Assn Annual Summit Workshop Apr. 15, 2009;  http://www.basilpeters.com/Presentations/Maximizing_Exit_Value_20090415_Part_2.pdf

Fail Quick & Cheap

Howard Morgan Partner First Round Capital

Morgan explained  his firm’s investing strategy. “We were the first ones to do seed-stage investing professionally. [] We also knew [] how the venture model worked, where you couldn’t afford to fail.  The key to our strategy is failing cheap.  The one lesson [] for all entrepreneurs is, ‘If you’re going to fail, fail quick and cheap.’  There’s no stigma in failing that way.  But if you blow a hundred million bucks, big stigma.”  Howard Morgan, from the book, Mastering The VC Game by Jeffrey Bussgang,  copyright 2010, pg 65-66

Startup Success Often Boils Down to 2 Things

Dave McClure angel investor and Founding Partner 500 Startups 

“The ability to get real-time data and feedback is unique to the Internet. [] you can take advantage of that and build better products by collecting real-time usage metrics and by making decisions based on measured user data.

[] What’s really hard is simplifying your product and building a great user experience.

It’s important to start by building a culture of feedback and measured analytics into your process and your organization. [] start-up success often boils down to your ability to do two things: make money and make users happy.  If you can figure out how to do both of those things at scale, then you probably have an interesting business []. Luckily, you can tell if users are happy or not by measuring their behavior.”   Dave McClure, Obsess over Metrics, pg 183-184  Do More Faster  by David Cohen & Brad Feld 

When a Team Meets a Market

Mike Maples Jr. Founding Partner Floodgate and former entrepreneur

 “[] we just fundamentally believe that when a great team meets a bad market, the market wins. [] sometimes when a lousy team meets a great market, the market doesn’t win and the company does really well. [] When a great team meets a great market, that’s when everything goes right.”    Mike Maples Jr., Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 10); http://www.sramanamitra.com/2010/07/13/seed-capital-from-angel-investors-mike-maples-founder-and-managing-partner-floodgate

High Valuations Can Limit Exit Opportunities

Josh Kopelman Partner First Round Capital and former entrepreneur

Kopelman advises that entrepreneurs who “[] try to maximize valuation [] in many cases [] might be shortsighted” because high valuations can limit exit opportunities.  “[] too many founders are not aware that they are shutting off the majority of exits -- and therefore increasing risks -- when they accept a high valuation.”  “[] the “unwritten term in the term sheet” [means] few VC’s will willingly part with a “winning company” (i.e., a company that is executing/performing well) for less than a 10x return.”  Thus, a VC could block an exit that could have been a fabulous payout for entrepreneurs and angels.  Josh Kopelman The Unintentional Moonshot, July 10, 2007, http://redeye.firstround.com/2007/07/the-unintention.html;  When the music stops... March 10, 2006;  http://redeye.firstround.com/2006/03/as_a_little_kid.html