Ride It to the Sky

There are several different archetypes of tech entrepreneurs. I’ve noticed some of these traits in myself and many other people who have built companies. I have opinions about which archetypes have a higher likelihood of achieving success, but all of them seem to work. There are also a lot of entrepreneurs who have characteristics of multiple of these archetypes and live at their various intersections. I’ve attempted to group them into five categories (but I’m sure there are plenty more): the serial inventor, the opportunist, the problem obsessor, the industry expert, and the academic.

The Serial Inventor is clinically addicted to building things. For some ADD can be a hindrance. For the serial inventor it’s a superpower. This entrepreneur believes that everything they encounter in the world can be done better. This drives them absolutely insane to the point where they need to constantly be hacking away at these problems. There is no off button for their capacity to generate ideas and actualize them. This person is usually inspiring to be around. You may use the word Genius to describe them, and their ability to go broad is remarkable.

The Opportunist is someone who sees a hole in a market and goes for it. I’ve seen a lot of Associates at VC firms fit into this category. This is a person who evaluates and maps markets, knows all about TAM, studies industry trends, and when the timing is right and they develop the guts, they pounce. The Samwer Brothers from Rocket Internet are a quintessential example of this, studying companies that work in the US and bringing them to Europe. Non-industry specific venture studios also can be grouped into the archetype. I don’t use the word “Opportunist” pejoratively – entrepreneurship is all about seeing opportunity and chasing it.

The Problem Obsessor is the entrepreneur that is absolutely obsessed with a singular problem. Sometimes it’s hyper-specific like “why can’t we do reply all over SMS?” and other times it might be super broad like “too many people die of heart disease.” A lot of times this person is a generalist. They experience a problem firsthand and then they become fervently passionate about solving it. Sometimes they only want to solve it for themselves but their solution catches fire. I love this approach because it scratches a very personal itch.

The Industry Expert is the entrepreneur who has a very unique insight into how something should work in a relatively niche environment, but believes that insight/solution may be more broadly applicable with big-business viability. These are the people who may have been working in a corner of information security or specialized databases for many years and believe they can invent something novel and important in that space. We see this a lot in enterprise, but it can be applicable anywhere. They’re steeped in an industry, have a competitive advantage in the knowledge and network they’ve accumulated, and they’re ready to leave their mark.

The Academic is the entrepreneur who finally decides that their research, scientific knowledge or invention is ready for commercialization and they’re the one to do it. Sometimes it happens by accident. Sometimes a business person (maybe an Opportunist?) gives them the nudge. Sometimes they’re just ready to rock. They’re super technical and have world-class depth in an area, and translate that knowledge into something groundbreaking.

I’ve been a couple of these. GroupMe was a very personal problem. We wanted to build reply-all SMS for our friends so we could stay in touch before, during and after music festivals. Then we realized we were building a close-ties network and just built features that made our experiences with our groups more fun. If I am being honest with myself Fundera was more of an Opportunist approach. I was inspired by companies like Lending Club and Funding Circle in 2013 and innovations in lending, and believed there was a unique moment-in-time opportunity to create a dominant platform in the US for SMB lending. I tried to convince myself that it was all about “empowering entrepreneurs.” A piece of it definitely was. But truthfully I mainly just wanted to build a great business. It’s taken me a while to admit this to myself and be totally comfortable with it.

One of the things I’ve been grappling with is an entrepreneur’s “interest longevity.” Regardless of archetype, interest in a product / business / idea / industry likely doesn’t last forever. I don’t think I could have done GroupMe for a decade and still been as passionate about the problem, and my enthusiasm for the world of SMB lending meaningfully waned towards the end of my Fundera journey. If you talk to any Problem Obsessor, Opportunist or Generalist who has built a company, they will almost always declaratively say they’ll never build another company in that industry again. I do wonder if one archetype is inherently more obsessive for longer durations, and I have immense respect for and bewilderment of entrepreneurs who remain passionate about their singular company or space for decades. It’s a superpower that I’m glad I don’t have. Mixing it up is fun for me.

Another observation is that it’s really neat when entrepreneurs from different archetypes partner with one another to start companies, and when executives who resemble these archetypes join companies. The differences in respective characteristics and motivations feed off each other for the better and ultimately create a winning environment for success. Different archetypes bring different energy and raison d’etre to the table, and that makes everything more fun.

I’ve come to the conclusion that after their first or second exit, almost every entrepreneur goes through an identical existential crisis and thought process around what to do next with their life. I can confidently say this because I’m going through it right now and as part of my process I’ve talked to a lot of different entrepreneurs who have experienced something similar.

The process looks something like this:

-After having spent nearly a decade building companies, you finally have the opportunity to lift your head up and see the world at large. There are many different problems that need solving, and a lot of exciting things happening beyond the myopic thing you maniacally focused on for the past ten years. Also, holy shit! While you’ve been heads down it feels like the world has passed you by. Things have changed! It’s time to catch up.

-You begin your journey of reflection and start to recognize a couple different things:

• Wow, it would be really great and smart to have a lot more diversification in your portfolio instead of one giant egg. Is there a construct that enables you to do this?
• Maybe I should be somewhere between more thoughtful to super thoughtful about the idea I want to pursue next. That will probably produce a better outcome!
• Do I really want to commit another decade+ to one single thing again? Do I still have the energy to do this?

-You start to evaluate alternatives to being an entrepreneur. The most obvious one is VC. You’re cut out for the job because you’ve built companies. You also think it might be easier than building a company. You will probably work super hard because you care about being great, but you won’t suffer nearly the same stress. Also, you can make a lot of money. And if you’re not a shitty person, which you probably don’t think you are, you genuinely believe entrepreneurs will like and want to work with you. Maybe you become a VC, but you also want to know if there are other configurations that might work for you.

-Instead of abandoning building things, you come up with the amazing idea that every other entrepreneur has thought of before and decide that instead of building one company at a time you want to build 10 at a time! It’s time for a venture studio / incubator! I want to be just like Kevin Ryan and the people at Sutter Hill. If Atomic figured it out so can I! I don’t just have to put all my eggs in one basket, I can have many baskets simultaneously!

-Wait! Another alternative to this is just building a Hold Co. Have you seen IAC? Maybe we can buy companies and make them better in addition or as a substitute to just building companies. Have you heard of Tiny? Do you listen to podcasts featuring “business experts” who are building these Hold Cos? OMG have you heard of Constellation Software? Holy shit, LFG!!!!!

-Eh, that was a close call. I almost bought an HVAC company.

-Where do I start? Hunting for ideas feels really icky and disingenuous. When I used to build stuff I did it because I was passionate about the thing. I cared about solving a problem. I didn’t just map out markets and analyze companies and say, “There’s a gap there! It’s time to build!” I want to feel that fervor again. Why don’t I feel it? Am I too old? Did I lose my edge?

-I’ll just eat some psychedelics and then the answers will come to me. Ugh, no answers yet. Maybe I’ll eat some more!

-Okay, I know the Meaning of Life now but I still have no idea WTF to do with mine.

-Now what…

-I guess one day at a time and one foot in front of the other. I believe something will inevitably inescapably call to me and the momentum will snowball. Just need to optimize for luck and serendipity in the interim. Finally at peace. Let’s see where it goes…

-Step 3: Profit

And that, my friends, is the cliche, tried and tested journey that insane people embark upon when venturing once again into the unknown.

I’ve spent the past several months decompressing and occasionally thinking about what to do next, or more accurately, thinking about how to think about what to do next. One of the things I keep coming back to is a conversation I had with Nigel Morris (one of the kindest, sharpest, and most affable entrepreneurs out there) last year. He shared a framework that really resonated for me: Spend the first third of your professional life/career (ie ~15 years) building a network and becoming an expert in something. Use the middle third for capitalizing on and leveraging the knowledge and skills you’ve accumulated. And the final chapter can be spent paying it forward.

I like this because it’s a simple way to think about things and also provides a framework for asking some important questions: What are you actually good at? What does a career or profession mean to you? For the middle third, to what end(s) do you wish to capitalize or leverage the foundation you’ve built? It’s a tough series of questions to answer, and they usually beget more questions than answers, but it’s been a fun and insightful journey for me to try to tackle them.

One of the things I’m grappling with is that I dislike the word career. Perhaps the concept is offensive to me because I don’t like thinking about a strong dichotomy between “work” and “personal” life. It’s also challenging to think about what else you can do with a history of entrepreneurship other than build more companies or do some form of venture to help other entrepreneurs. Regardless, this way of breaking things down into three ~15-year intervals (or The Rule of 45) is a forcing function to ask some of the right questions when reflecting on the past and evaluating the future.

Watching the world of technology evolve at its fastest rate ever due to AI hitting its stride is absolutely nerve wracking. As an entrepreneur focused on software, I feel like I’m experiencing an existential crisis. I imagine most founders are going through something similar. It’s anxiety inducing. We are grappling with unanswerable questions right now: What is the future of software? Will what I’m working on be made obsolete by AI over the next 12 months? 24 months? 5 years? What does it mean if the rate of progress and change continues to accelerate? What The Fuck?

Most people building things have been living in a relatively safe world. Tyler Cowen hits the nail on the head when he proclaims, “Virtually all of us have been living in a bubble ‘outside of history.'” Technology entrepreneurs have certainly experienced a lot of change in the past two decades with the transition to cloud and mobile, but those moments felt much more understandable. Sure, there were plenty of surprises and disruption, but nothing even remotely comparable to the seemingly inevitable radical AI upending that is upon us.

It’s a moment in time where we experience equal parts excitement about what is possible and absolute dread at the thought that everything we know how to do and excel at feels like its growing increasingly irrelevant by the day. I am immensely grateful that Fundera was acquired two years ago and I’m a free agent that gets to soak this all in and think deeply (although it’s unclear what good the deep thinking will actually do). I do not envy founders who are many years into company building and need to grapple with the existential questions this moment in time requires. I have a great deal of empathy for you.

It’s difficult to make predictions in times like these. It seems as if even the best builders will be subject to significantly more volatility and randomness when it comes to their success. And the bar was already dauntingly high. One thing I believe to be true is that this new world will put a premium on people who deeply focus on problem-solving instead of opportunism. The past decade has been riddled with people searching for arbitrages in software, and I think AI will likely drive the returns of that approach close to zero. Dedication to solving a problem (even if it’s coupled with opportunism) will pay dividends. Primarily because it gives you a more profound reason to wake up motivated in the morning and the willpower to battle through what will certainly be the most insanely volatile decade in technology in history.

Advice is a tricky thing. We get it all the time. We give it all the time. And we seldom know if what we are giving or getting is actually any good until we evaluate it in hindsight. As an entrepreneur, I’ve spent a lot of time speaking with mentors, advisors, peers, and friends asking for advice, listening to their stories about what they’ve done over course of their careers and how they’ve handled certain situations. As an investor, I spend a lot of time sharing my own stories and advice with other entrepreneurs.

Whenever giving advice, I like to provide a disclaimer that whatever I’m saying is strictly informed by my own set of unique experiences, and that the context in which I learned whatever I’m sharing is important. When receiving advice, I think this is a crucial thing to internalize: not everything you hear, even if it’s from a person you genuinely admire and trust, may be relevant to your situation. Understanding the context in which they learned a lesson is key in applying that knowledge to your own set of circumstances.

When receiving advice, it’s important to be very wary of people who declaratively state, “You MUST do this!” Unless someone is sharing something that is objectively true, like 2 + 2 = 4, then you must push to understand the context of their experience. The other exception is when someone’s advice is an oft cited cliche. I’ve found that most advice-oriented cliches are usually truisms – they’re tropes that have been learned and repeated over and over again (e.g. “Hire slow, fire fast”).

I like to think of advice as little kernels of knowledge I accumulate over time that I can draw on whenever I feel it’s applicable to a certain situation. Collecting these data points and refining how to apply them over time is a unique skill in and of itself. But, as the cliche goes, context is key.