One of the goals I have had with this blog is to provide more than just surface level insights into the venture capital and entrepreneurial worlds. To this end, I will occasionally “interview” some of the more interesting and insightful people I come across in Silicon Valley and elsewhere in the tech community. Hopefully these interviews can provide a bit of insight / wisdom or at least some discussion points for other entrepreneurs, CEOs and VCs.
Will Price is a former venture capitalist (at Hummer Winblad and Pequot Ventures, now FirstMark Capital) turned entrepreneur and CEO at Flite, an emerging leader in the Internet advertising space (Flite recently raised $12M in a third round of financing from General Catalyst, Sequoia Capital and others). Will is a longtime friend, and I recently had the chance to sit down and ask him a few questions which I thought might reveal a bit about what has made him successful as a venture-backed CEO.
Q: I know you made the transition from VC to entrepreneur/CEO a few years ago (3.5 to be exact). Kind of a unique scenario. At a high level, what have been some of the more interesting insights you’ve learned now that you’ve been on “both sides of the table?”
A: I think there are two things I’d highlight. First, why I did it (left venture for Flite), and second, what I’ve learned.
Why I did it. I had been in the venture space for a few years and had the opportunity to work with some amazing people and back some amazing companies. But there was a part of me I felt I wasn’t tapping into – a part of my brain focused around working with people, building teams, being a leader. I wanted to challenge myself a bit. I felt I had the skill set inside of me, but I would never know until I made the leap. I spent some time evaluating a number of different opportunities, and really loved what Flite was doing (called Widgetbox at the time). It’s been all the challenge I hoped it would be and more (laughs).
What I’ve learned. I’d say the biggest thing is how little I really knew about the entrepreneurial process. There is a certain element to it where you have to sort of suspend disbelief. What I mean by that is you have to let the journey lead you to the destination. There is no “right answer” out of the gate. It’s a lot of trial and error. A lot of the reason I loved Peter Sims’ book Little Bets. It’s less about the weekly management team meeting, quarterly reporting, etc. than it is about trusting the vision, the team and the market. You have to have a very high tolerance for ambiguity to be an entrepreneur – as does your spouse (laughs).
Q: I know on your blog and in person we’ve talked about the uncertainty that comes along with the territory of being an entrepreneur or startup CEO, and it’s one of the things I found most challenging in my first two companies – especially after I got married and had kids. Uncertainty not just related to the company but to family, career, etc. Can you talk a bit about that?
A: How much time do you have (laughs)?!?! My wife is so good on this front. She always is there reminding me to trust in the process and not focus on the outcome. I’m on the ledge and she pulls me back. It would be very hard to do if your spouse was not supportive and understanding, and really in the boat with you. I think it’s also really important to have a Board and investors that have a high tolerance for risk and ambiguity. You can’t have guys coming to each board meeting with a different set of questions focused on short-term results. Startups don’t mark to market like a hedge fund or a public company. You also need individual investors who have pull in their firm, and have the ability to provide runway within the firm – that’s important. You need your investors to be with you in good times and bad – and there will be both.
Q: You’ve shared a few funny scenarios with me over the years with respect to fundraising and working with VC’s, etc. Can you share a few of those?
A: Well, for starters, Jim (Goetz, from Sequoia Capital) was unbelievably patient as we were struggling to figure out the business model for Flite. Every time I’d come to him with a laundry list of questions, he’d say “you’ll figure it out.” To the point where it was funny. I’m stressed and he’s calmly repeating – “you’ll figure it out.” And he was right – we did.
There are others that might get me in trouble, so I’ll stop there (laughs).
Q: What advice would you have for entrepreneurs who are looking to raise their first round of venture capital?
A: A few things.
– Focus on the Partner, not the firm. It’s the individual that matters. You want someone who is at a brand name firm, but the person really matters.
– Create a syndicate. It’s good to have a few different perspectives around the table. I think 2 is a good number. Get some balance.
– Keep the Board small. Especially when the company is small. It always amazes me to see $10M companies with 7 board members.
– Communicate outside of board meetings. Keep a running dialogue with your board members. The board meeting should be a checkpoint, not a long dissertation on “here’s how we’re doing.”
– Don’t focus on valuation. I see guys spending tons of time walking around Sand Hill Rd trying to get a “better deal.” If you have a firm or two that are offering you a fair deal, take it. Move on and focus on building the business.
Q: Let’s talk about growth. Once you’ve grown a bit – out of startup mode and into scaling mode – what changes in your role as CEO? What elements of the company change?
A: A few things come to mind.
– In the early days, people are playing a lot of different roles. I was putting together a financial model one minute and writing a press release the next. As the company grows, you really have to focus on hiring and delegating. More focus on building the organization and leaders within the organization.
– You have to think like a chiropractor. Spend time tweaking, massaging, running interference and removing roadblocks. Making sure people have a green light to make things happen.
– Communication is key. Clear and consistent communication. We love Yammer. It’s the first thing I look at in the morning (after Twitter). Great communication tool between teams and between offices. Media coverage can also help here – it reinforces the key messages, reminds people we are doing well, etc. I think a lot of CEOs in Silicon Valley have figured that out.
Q: Here’s a curveball – how about advice for VC’s who are working with entrepreneurs and CEOs? You’ve got a unique vantage point having played both roles.
Well one analogy I’d give is – you know when you’re at a dinner party and afterwards there’s someone doing the dishes and every once in a while someone walks by and says “Hey – can I help?” And the person doing the dishes is like “Yeah – do the f’ing dishes!”
I think a lot of times VC’s don’t realize how helpful they can be if they really commit to things and get them done. Follow through. Make that extra executive intro. Send that extra email to make a client intro. There’s a reason certain VC’s have great reputations – they are the ones who go that extra mile.
– Avoid the temptation to replace people quickly. It’s not always the sales guy’s fault. Don’t tolerate bad people, but there are no quick fixes in building a company. Very often there are product, strategy, financing issues that are at play as well. Firing someone is not usually a silver bullet.
– Encourage frequent communication. If you’re only talking to your entrepreneurs and CEOs at board meetings, you’re not doing your job. Try to meet off cycle. Read the emails the CEO sends out highlighting customer wins. Be informed.
– Really leverage your network. General Catalyst has a great program – a one day Entrepreneur Forum – where they bring in senior execs from larger companies to meet with their companies. It’s terrific. You get 1-1 access with customers, decision makers. A lot of times VC’s don’t realize that a friend of a friend is a decision maker at Company X, which would be a great customer. Work LinkedIn where possible. This is sort of VC 101 but I think many VC’s can do better.
– Work to find one or more coach/mentor types for your CEOs. Jim introduced me to a very successful CEO who has been invaluable as a coach to me for the last few years. I think it’s one of the most valuable things a VC can do. Surround your CEO with people who can be a sounding board, who have been there before.