Starting a company is crazy.
You know the odds are stacked against you. You know it will consume a ton of energy. You know the pay sucks (at least initially.)
On top of that, many founders burn bridges, ruin relationships and struggle with mental health challenges. I believe in needing to hustle and having the grit to grind through the tough parts (of which there are many), but getting sick is a whole ‘nother level. And it happens.
Have you ever woken up in the middle of the night clenching your fists so hard that your fingers are sore and your hands are cramped? I have. It’s not a pleasant feeling. Now as I go to sleep I consciously unclench my fists to try and relax. This is fairly minor, but not a great sign. 😀
Investing in companies is crazy.
It’s a lot less crazy than starting a company (at least you have a portfolio of bets, not just one), but it’s still pretty nuts. You know it’s almost impossible to “pick winners.” You know it’s an insane rollercoaster that never stops.
When I first started angel investing, an experienced investor said to me, “Assume as soon as you’ve written the check, the money is gone.” I tried taking that to heart, but of course I also thought, “Maybe that was true for you, but I’m going to beat the odds!” (My angel investment portfolio is pretty solid actually…)
Now as a VC, writing bigger checks, and using other people’s money (along with quite a bit of my own), I feel an incredible responsibility to make the right choices, create as much value for my portfolio as possible, and generate returns. We can have a separate discussion about the craziness in VC-land, and the bad actors (there are bad actors in every profession; VC is no different), but there are plenty of high-quality, well-intentioned venture capitalists. Honest.
Investing in startups is high risk and I think when times are good, too many people forget that. Every startup looks like a slam dunk exit. When times are tough, too many VCs tighten their purse strings and hold on for dear life.
Here’s the thing: I love building and investing in startups
As crazy as building and investing in startups might be, I love it, and I’ll keep doing it, always trying to improve, learn and iterate, while generating value for founders and LPs.
And over 26 years of being in “this space” (whatever the heck that means) I’ve learned two important things (that are relevant to this blog post):
1. Focus wins. In Lean Analytics, we wrote:
Founders are magpies, chasing the shiniest new thing they see. They often use the pivot as an enabler for chronic ADD, rather than as a way to iterate through ideas in a methodical fashion.
But one of the keys to startup success is achieving real focus and having the discipline to maintain it. You may succeed if you’re unfocused, but it’ll be by accident. You’ll spend a lot more time wandering aimlessly, and the lessons learned are more painful and harder-won. If there’s any secret to success for a startup, it’s focus.
It’s incredible how hard it is to focus. Often, we get so caught in the weeds, so lost in what we’re doing or trying to do, that we don’t actually know what matters. We start grasping at straws, desperate for something, anything to work. That feeling of complete chaos—where nothing is controllable anymore—leads to hopelessness and failure. I know, dark. And shitty. 😢
2. Chaos cannot be eliminated. As much as founders need to focus to win (and frankly, the same is true for investors), you cannot completely eliminate the chaos. I’ve seen founders try. I’ve tried. You end up micromanaging, where everything becomes a task list, and you obsess over crossing things off the list. At that point you’re no longer really learning or iterating intelligently, you’re just doing. Doing for the sake of doing. Failure also lies around that corner.
If you have to focus, but can’t eliminate the chaos, how do you contain it? How do you manage the chaos, but give it enough space at the same time?
At a high-level, I’ve found the most success in applying key frameworks such as Design Thinking and Lean Startup in a meaningful, but not overly rigorous way. Once you become a methodology or process zealot you’re likely focused on doing the work more than the quality or outcome of the work.
I’ll do my best through this newsletter to illustrate how I believe focused chaos can be achieved, and why it’s the right approach to successfully building and investing in startups. In the meantime, here’s some suggested reading that may help:
Outcomes Over Output: A great book (and a quick read!) by Josh Seiden.
Talking to Humans: Another quick read, very practical by Giff Constable.
Escaping the Build Trap: An important book focused on product management (and not building useless stuff!) by Melissa Perri (also check out her podcast on the site)
Strategize: Focused on product strategy and roadmapping by Roman Pichler.
The Iterative-Hypothesis customer development method: A great blog post by Jason Cohen
How to fundraise from VCs: An awesome, very complete summary of how to fundraise by Steph Mui
So welcome to Focused Chaos, where we’ll try to wrangle the craziness of starting and building companies into something that doesn’t resemble all of us running around like headless chickens.
And I welcome any feedback, advice, recommendations or ideas on how you’ve focused the chaos.
It's about time! You have so much industry knowledge. We all win by having you sharing some of it with us.