InSITE Fireside Chat
I did my annual “fireside chat” with the InSITE Fellows a few weeks ago. This is a group of NYU and Columbia graduate students who do free consulting with startup companies while they are getting their degrees. After the chat, we go out and drink beer together. It’s one of my favorite events of the year.
They normally film the whole chat and post it. But they had camera issues this year. However, one of the fellows caught a piece of the chat on his iPhone before his battery ran out. He caught an interesting part, where I talked about raising our first USV fund in 2003/2004 and the success we’ve had with that fund. It’s a classic example of the things that people believe in the least tend to perform the best.
Comments (Archived):
Hi Fred, What’s the name/link of the University program for consulting?
http://insiteny.org/i've just updated the post to include a link. thanks!
Hi Fred,great video, I always love these type of “presentations” where smart people just talk about thier past without an interviewer interrupting.I would like to hear your thoughts on whether your blog became successful because your fund became incredible successful or the fund became successful because you were able to build a brand through the blog.Also do you think you would be able the achieve the same kind of success with your blog if you would have started today? I have read a lot of times that the best way to start a successful blog is to start blogging in 2003.That’s something I constantly think about being only a few days away of launching my own startup as a first time founder in the middle of nowhere in Germany with no connections.I think it’s hard to build a brand if you have no traction to show but you can only show traction if you have a brand.Well, I guess that is a chicken and egg problem every startup faces and you just have to hustle right through it.Chris
I don’t know what is cause and what is effect. A bit of both I think I gotto Twitter from blogging
The only time it’s too late to start something is tomorrow…
and I thought it was yesterday 🙂
The best time to plant a tree is 30 years ago.The second best time is today.:-)
What struck me is your comment at the end, that you recognized early on as an NYC VC you didn’t have the luxury of socializing with Silicon Valley entrepreneurs 5 times or shmoozing them regularly as part of biz dev.Do you find this handicap totally gone now (or not as relevant as it used to be) and why?
It is still a huge problem for us
see my comment above or below, got it covered.
To make a great investment – you need to be willing to be alone and wrong.If USV 1 blew up – those LP’s would have had to answer to someone who was going to ask – “Didn’t you see that coming? They came from funds that wound down and they never managed a small firm. And they were trying to do deals in NYC when the action was in SV and Bos.”But those who were willing to take that chance have done great.Look at DST at Facebook – or earlier with Greylock. People thought they were nuts to pay what they paid – and now they are geniuses.Social proof is a pretty powerful force (just check out angel list) – being able to invest without it is the real key to superior returns (or a decline into anonymity) – and why so few people can produce superior returns – most just don’t have the stomach and constitution to be alone and wrong.
So true. That’s why I don’t like social proof (aka herd investing)
especially social proof from fellow geeks. what do geeks know about what the end-user’s want? not every geek is Zuckerberg. Pivot result when you don’t do your homework before you build the product. Did twitter pivot, foursquare? but hey, that’s why they ‘spray and pray.’
Simpler argument: What fraction of the people can have results in the top tiny fraction of 1%?So, even if have such a project, before results the accountants can see, can’t expect a lot of people to ‘get it’ on the project.So, then, how to know in advance? Look at some examples where some people clearly did know, in solid terms, well in advance.
it would be great to have some way to improve the quality of sound in today´s mobile devices. Image is getting better&better but sound keeps poor. Bluetooth mics? Some nice software to improve sound after recorded?
I’ve been told its the OS’s not the chips. Apparently the OS does not takeadvantage of all the sound related technologies available on handsets
Very informative & inspiring. Thank you for sharing this. 🙂
Great! Thanks!
Interesting comment about things that people believe in the least tend to perform the best.We’ve looked back at funds that we’ve passed on that have gone on to have great success and asked “what did we miss?”. Interesting thing is that in most cases, on paper the opportunity still didn’t jump out at us as one we had to commit to. We’ve seen that the “conventional” parts of our approach tell us there are too many risks, and the upside doesn’t warrant going further.We learned that you have to really get to know the manager and trust what your gut tells you about the team, and at times you have to let your gut over-rule convention. It has taken us 8 years to figure this out, but at least we did!
Good clip, bummer they didn’t get the whole thing, I’ve enjoyed these the past couple years.
Thanks for writing this: ” the things that people believe in the least tend to perform the best.” I remember that every time I explain to people what I am trying to do. In my gut, I just know it works, and will work. But people need to see the proof, and the proof takes time.
“It’s a classic example of the things that people believe in the least tend to perform the best.” This will sound like a strange analogy, but years ago, I worked in college admissions at a highly selective liberal arts college. We always knew that it was the kids who were initially placed on the wait list–the ones that had enough potential to succeed, but weren’t obvious picks–that once admitted, were the best campus citizens, most loyal alums, and of course, the most dependable admissions volunteers. This was proven year after year, and when we took a risk on a kid, pulled them up from the wait list because we felt there was something special about them–when we listened to our gut–we were almost always rewarded handsomely. And most importantly, so was the college community.
what a great comment. pulling a candidate up from a wait list is powerful inmany ways
So true Amy. Love that comment.Here’s an adjacent angle you’d be interested in. Recently I’ve gotten some really awesome value from people with great backgrounds but very hungry for the “second chance”.I think as powerful as someone who’s told a bunch of times “you’re not good enough”, is the person who’s been told “you’re a washout”.Can you imagine anything more humiliating? And yet it happens every day.The divorced mom with the golden rolodex, the ‘old-media’ stylist who almost died and now has to re-create anew.They have a choice to pack it up and go home, or dig in and fight a hell of a lot harder. They have a lot of arrows in your quiver and probably much more capacity to change than people think. Hunger is a motivator.They call Dancing With The Stars “has-been heaven”. And yet, year-in, year-out, it’s one of the top-rated shows on TV.Americans LOVE second acts.
#WINNING NOT MEAN NEVER FALL DOWN. IT MEAN ALWAYS GET BACK UP.
!!!!!!!!! right! very true words in my opinion. exactly what i was always thinking about it!
“We have a hard time investing in Silicon Valley companies”1) one of the USV partners could move out to SV and start a sister firm2) they can bring me on as an associate in the hopes of making partner down the road3) profit
and in the process we destroy our firm, our culture, our essence, our power,and our special saucenot gonna happen
Steady Fred, surely Mark’s not *that* bad…
no but his suggestion wasi’ve tried itit doesn’t workVC doesn’t scale
I was joking Fred.
ah, got it
Apparently this topic is a thorn in his side. 🙂
Very much so. I made this mistake once. Not gonna do it again
fair enough. all the USV superpowers must remain focused locally.listening to Albert on soundcloud now thanks to Gary’s tweet
Just kidding Mark 😉
Forgot Fred’s Kryptonite is a split team, my bad
It is good to know that you really can overcome.
po
#videofail
We’ve got one in the office Charlie , don’t bother, waste of time
I saw your tweet and read your blog just now before I got to AVC.I have to fight the urge to stay out of gear mood all the time! Currently determined to fight the urge to get an iPad 2 and wait for a decent Android tablet!
Awesome weather up here on long island, went for an hour and a half walk with my wife then ran the sci-fi rpg (I co-authored over many years with a friend) for a group of players. Went great, although I was a little rusty at improv of environments, characters, and rules details.Curious about sci-fi rpgs, check out VictusGames. There’s a link to the beta pdf on the page, working on converting it to html5 for future editing. We used to have a wiki but my coauthor loves saving it in non-write friendly formats :().