Venture Capital Related Quotes

The key is to take a larger project or goal and break it down into smaller problems to be solved, constraining the scope of work to solving a key problem, and then another key problem. This strategy, of breaking a project down into discrete, relatively small problems to be resolved, is what Bing Gordon, a cofounder and the former chief creative officer of the video game company Electronic Arts, calls smallifying. Now a partner at the venture capital firm Kleiner Perkins, Gordon has deep experience leading and working with software development teams. He’s also currently on the board of directors of Amazon and Zynga. At Electronic Arts, Gordon found that when software teams worked on longer-term projects, they were inefficient and took unnecessary paths. However, when job tasks were broken down into particular problems to be solved, which were manageable and could be tackled within one or two weeks, developers were more creative and effective.

Darwin has interested us in the history of Nature’s Technology, i.e., in the formation of the organs of plants and animals, which organs serve as instruments of production for sustaining life. Does not the history of the productive organs of man, of organs that are the material basis of all social organisation, deserve equal attention? And would not such a history be easier to compile, since, as Vico says, human history differs from natural history in this, that we have made the former, but not the latter? Technology discloses man’s mode of dealing with Nature, the process of production by which he sustains his life, and thereby also lays bare the mode of formation of his social relations, and of the mental conceptions that flow from them. Every history of religion, even, that fails to take account of this material basis, is uncritical. It is, in reality, much easier to discover by analysis the earthly core of the misty creations of religion, than, conversely, it is, to develop from the actual relations of life the corresponding celestialised forms of those relations. The latter method is the only materialistic, and therefore the only scientific one. The weak points in the abstract materialism of natural science, a materialism that excludes history and its process, are at once evident from the abstract and ideological conceptions of its spokesmen, whenever they venture beyond the bounds of their own speciality. [Chapter Fifteen: Machinery and Modern Industry; Footnote 4]

It is best to be the CEO; it is satisfactory to be an early employee, maybe the fifth or sixth or perhaps the tenth. Alternately, one may become an engineer devising precious algorithms in the cloisters of Google and its like. Otherwise, one becomes a mere employee. A coder of websites at Facebook is no one in particular. A manager at Microsoft is no one. A person (think woman) working in customer relations is a particular type of no one, banished to the bottom, as always, for having spoken directly to a non-technical human being. All these and others are ways for strivers to fall by the wayside — as the startup culture sees it — while their betters race ahead of them. Those left behind may see themselves as ordinary, even failures.

In 1957, the venture capital industry was just being created. At the time, the investor community in the United States was uninterested in investing in computer companies, as the last wave of computer-related startups had performed poorly and even large companies were having difficulty making money in the computer business. We can envision the frustration of DEC’s cofounders, Ken Olson and Harlan Anderson, as the investors they talked to rejected them and their fledgling idea for a business. We can also imagine their joy when Georges Doriot, the founder of American Research and Development Corporation, offered to fund them. After a number of conversations and meetings, Doriot sent Olson and Anderson a letter expressing his interest in investing, along with his proposed terms. Today, this document is called the term sheet.

Your software developers can get bogged down in answering tickets by changing code. This will prevent you from assigning them to projects that will have a bigger impact. In 2021, QuickBooks made an update to how we sync with QuickBooks Desktop. The change allowed us to sync faster and more reliably, and would reduce our support tickets. Since our goal was reducing tickets by 10% and reducing churn, I assigned the project to my team. How does this project relate to the company’s overall goals? Will making this change adversely affect other people? What is the cost and benefit analysis? Some product management tools can link your CRM and feature requests together. They can show the total cost to build the feature and the amount of revenue you will gain, a cost and benefits analysis.

Some Black Americans who were accused of crimes during the Jim Crow era were thrown into work camps while in prison. There they labored decades after slavery had been abolished. People in convict work camps in Atlanta are known to have helped construct buildings that still exist today, like the federal penitentiary and homes in the upscale neighborhood Inman Park. That legacy in Atlanta is tied to a former mayor from the 1880s, James W. English. He owned the Chattahoochee Brick factory, among other businesses, and according to a book by the journalist Douglas Blackmon, English’s companies managed 1,206 of Georgia’s 2,881 convict laborers, who made bricks, among other manual jobs. English’s “great personal wealth was inextricably linked to the enslavement of thousands of men” decades after slavery had been outlawed, Blackmon wrote. In addition to the convict-staffed brick factory, English owned a bank that merged into Wachovia, which is now part of Wells Fargo. From these businesses, his descendants had money and opportunities to build more wealth: a great-grandson, James D. Robinson III, went on to serve for twenty years as the chief executive of American Express, and then he had wealth and connections to help his son, James IV, found a venture capital firm in 1994. That firm, RRE Ventures, became one of the most successful and lucrative venture capital firms in the world. Robinson III referred our question about the era of convict leasing to a relative by marriage, who told us, “It was a black mark, and history is messy.

High Switching Costs Products that require a significant amount of work to migrate away are said to have high switching costs. High switching costs reduce your churn and create a moat that keeps customers from switching to a competitor simply because that competitor is newer, cheaper, or even builds a better product. Most APIs are difficult to leave because to do so requires expensive developer time to integrate with a new product. Companies like Stripe, Twilio, and SendGrid have a pretty hefty switching cost moat. Tools like Slack are difficult to switch from because of the need to obtain buy-in from every manager in an organization. Also, because of the high number of integrations pushing data, Slack requires effort to recreate. Tools with low switching costs are those in which history is mostly irrelevant, and the time it takes to recreate something you’ve built in the tool is low or nonexistent. For example, a social media scheduling tool is easy to switch from because there is no critical history stored or complex workflows that need to be recreated using a new tool. Likewise, one-click SaaS analytics tools that tie into your Stripe account are relatively easy to switch from because they are “one-click easy” to set up.

Nike, Microsoft Amazon and similar companies went public relatively early in their growth cycles. As a result, public investors had the opportunity to participate in 95 to 99% of their overall price appreciation. Founders, early employees and VCs took all the risk. Most of the reward was left for grabbing – anyone could’ve bought those stocks on the secondary markets.   As the Federal Reserve prints more money and interest rates remain low, an increasing percentage of capital is flowing into risky asset classes like venture capital and “angel investing.” This capital has chased up valuations in the pipeline preceding IPOs, making the IPOs feel more like the end of the journey, not the beginning. Thus,

Getting through Burnout I’ve heard burnout manifests itself differently in different people, but for me it felt like a mix of depression and frustration. Not the kind you can clear up with a weekend away, but a long-term, deep sense of tiredness, lack of motivation, and feeling just a little pissed off at all times. This led to my aforementioned stints of staring at Trello for hours and a lack of presence at home. I would be home with the family, but most of the time my mind was elsewhere. I tell this as a cautionary tale: if you find yourself listless, unmotivated, or constantly frustrated as you endure the stress of building your company, it’s unlikely to fix itself. The best remedy for burnout is significantly changing your habits and patterns related to work, including stepping away for weeks, which feels like the last thing you can do when everything is going crazy (whether it’s good crazy or bad crazy). If you find yourself in this situation, you need to address it, or it will get worse. If unaddressed, burnout can lead to terrible outcomes, including long-term damage to your brain. If burnout is a situation you find yourself in, consider reaching out to a professional who works with founders on the mental game of entrepreneurship. Dr. Sherry Walling is one (she happens to be my wife, and she knows her stuff), but there are many other executive coaches and therapists who work with high-performing individuals to manage stress, burnout, and everything else that comes with our line of work. I’ve only started to touch on burnout here, but for an entire chapter about it, check out my third book: The Entrepreneur’s Guide to Keeping Your Sh*t Together: How to Run Your Business Without Letting it Run You.

Karl Marx, observing this disruption in the middle decades of the nineteenth century, could not accept the English evolutionary explanation for the emergence of capitalism. He believed that coercion had been absolutely necessary in effecting this transformation. Marx traced that force to a new class of men who coalesced around their shared interest in production, particularly their need to organize laboring men and women in new work patterns. Separating poor people from the tools and farm plots that conferred independence, according to Marx, became paramount in the capitalists’ grand plan.6 He also stressed the accumulation of capital as a first step in moving away from traditional economic ways. I don’t agree. As Europe’s cathedrals indicate, there was sufficient money to produce great buildings and many other structures like roads, canals, windmills, irrigation systems, and wharves. The accumulation of cultural capital, especially the know-how and desire to innovate in productive ways, proved more decisive in capitalism’s history. And it could come from a duke who took the time to figure out how to exploit the coal on his property or a farmer who scaled back his leisure time in order to build fences against invasive animals. What factory work made much more obvious than the tenant farmer-landlord relationship was the fact that the owner of the factory profited from each worker’s labor. The sale of factory goods paid a meager wage to the laborers and handsome returns to the owners. Employers extracted the surplus value of labor, as Marx called it, and accumulated money for further ventures that would skim off more of the wealth that laborers created but didn’t get to keep. These relations of workers and employers to production created the class relations in capitalist society. The carriers of these novel practices, Marx said, were outsiders—men detached from the mores of their traditional societies—propelled forward by their narrow self-interest. With the cohesion of shared political goals, the capitalists challenged the established order and precipitated the class conflict that for Marx operated as the engine of change. Implicit in Marx’s argument is that the market worked to the exclusive advantage of capitalists. In the early twentieth century another astute philosopher, Max Weber, assessed the grand theories of Smith and Marx and found both of them wanting in one crucial feature: They gave attitudes to men and women that they couldn’t possibly have had before capitalist practices arrived. Weber asked how the values, habits, and modes of reasoning that were essential to progressive economic advance ever rooted themselves in the soil of premodern Europe characterized by other life rhythms and a moral vocabulary different in every respect. This inquiry had scarcely troubled English economists or historians before Weber because they operated on the assumption that human nature made men (little was said of women) natural bargainers and restless self-improvers, eager to be productive when productivity

VCs have shown a preference for ventures that sell directly to users and customers. In the pre-Internet era, most VC-funded ventures sold directly to businesses (B2B) due to the relative ease of identifying and targeting potential customers. The Internet changed this by allowing direct sales to national and global consumers. VC-funded ventures in the Internet age include very successful ones that sell online to national and global consumers

Despite the relative youth of venture capital, many cryptoasset firms are now turning the model on its head. The disruptors are in danger of being disrupted. For the innovative investor, it’s key to realize that cryptoassets are not only making it easier for driven entrepreneurs to raise money, they’re also creating opportunities for the average investor to get into the earliest rounds of what could be the next Facebook or Uber. Welcome to the colliding worlds of crowdfunding and cryptoassets.

If you made a country out of all the companies founded by Stanford alumni, it would have a GDP of roughly $ 2.7 trillion, putting it in the neighborhood of the tenth largest economy in the world. Companies started by Stanford alumni include Google, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, LinkedIn, and E* Trade. Many were started by undergraduates and graduate students while still on campus. Like the cast of Saturday Night Live, the greats who have gone on to massive career success are remembered, but everyone still keeps a watchful eye on the newcomers to see who might be the next big thing. With a $ 17 billion endowment, Stanford has the resources to provide students an incredible education inside the classroom, with accomplished scholars ranging from Nobel Prize winners to former secretaries of state teaching undergraduates. The Silicon Valley ecosystem ensures that students have ample opportunity outside the classroom as well. Mark Zuckerberg gives a guest lecture in the introductory computer science class. Twitter and Square founder Jack Dorsey spoke on campus to convince students to join his companies. The guest speaker lineups at the myriad entrepreneurship and technology-related classes each quarter rival those of multithousand-dollar business conferences. Even geographically, Stanford is smack in the middle of Silicon Valley. Facebook sits just north of the school. Apple is a little farther south. Google is to the east. And just west, right next to campus, is Sand Hill Road, the Wall Street of venture capital.

Research and development conducted by private companies in the United States has grown enormously over the past four decades. We have substantially replaced the publicly funded science that drove our growth after World War II with private research efforts. Such private R&D has shown some impressive results, including high average returns for the corporate sector. However, despite their enormous impact, these private R&D investments are much too small from a broader perspective. This is not a criticism of any individuals; rather, it is simply a feature of the system. Private companies do not capture the spillovers that their R&D efforts create for other corporations, so private sector executives in established firms underinvest in invention. The venture capital industry, which provides admirable support to some start-ups, is focused on fast-impact industries, such as information technology, and not generally on longer-run and capital-intensive investments like clean energy or new cell and gene therapies. Leading entrepreneur-philanthropists get this. In recent years, there have been impressive investments in science funded by publicly minded individuals, including Eric Schmidt, Elon Musk, Paul Allen, Bill and Melinda Gates, Mark Zuckerberg, Michael Bloomberg, Jon Meade Huntsman Sr., Eli and Edythe Broad, David H. Koch, Laurene Powell Jobs, and others (including numerous private foundations). The good news is that these people, with a wide variety of political views on other matters, share the assessment that science—including basic research—is of fundamental importance for the future of the United States. The less good news is that even the wealthiest people on the planet can barely move the needle relative to what the United States previously invested in science. America is, roughly speaking, a $20 trillion economy; 2 percent of our GDP is nearly $400 billion per year. Even the richest person in the world has a total stock of wealth of only around $100 billion—a mark broken in early 2018 by Jeff Bezos of Amazon, with Bill Gates and Warren Buffett in close pursuit. If the richest Americans put much of their wealth immediately into science, it would have some impact for a few years, but over the longer run, this would hardly move the needle. Publicly funded investment in research and development is the only “approach that could potentially return us to the days when technology-led growth lifted all boats. However, we should be careful. Private failure is not enough to justify government intervention. Just because the private sector is underinvesting does not necessarily imply that the government will make the right investments.

Using a trend is perhaps the best way to build high-growth businesses. More fortunes are made with a trend than without one, and it is easier for more to grow with a trend than without. If you are an entrepreneur or a corporate business developer, track trends in your industry, in related industries where you can easily expand, in technologies that can affect your industry, and in customer segments that you serve or can serve.

The revolutions that will matter—the big disruptions that create wealth for inventors and anxiety for workers, or that scramble the geopolitical balance and alter human relations—cannot be predicted based on extrapolations of past data, precisely because such revolutions are so thoroughly disruptive.