There was great news yesterday in the MA entrepreneurial community when Governor Patrick proposed sweeping legislation to ban companies from enforcing non-compete agreements. I’m really excited about this, and think that it will have a big impact. But just as important in my mind is a proposal that was introduced to allow international entrepreneurs to build businesses in Boston with an exemption from the H-1B visa cap. My friend Jeff Bussgang has discussed it in more detail on his blog here.
This particularly hits home for me because I myself was on an H1-B for my entire professional life before gaining permanent residency in the United States in 2007. Lucky for me, it was a lot easier to get an H1-B when I was applying for them than they are today. Just recently, the entire allotment (85,000) for H-1B visas for FY 2015 were filled in the first week. When I was applying for jobs, the cap was 2.3X that (195K), and I have to imagine there was not as much demand then as there is today.
It’s hard to underestimate the impact that being able to work in the US has had on my life. Almost certainly, I would have centered my career around China and Southeast Asia, and my professional trajectory would have been totally different. On top of that, I met many of my most important people in my life through work experiences that I was only able to have because of an H-1B. Most importantly, my wife Nancy and I worked at the same company after college, a boutique consulting firm called “The Parthenon Group” (Parthenon was the first company to sponsor my H-1B). There is no way we would would be married and have a family today if it were not for their ability to sponsor me. Also, David, one of my co-founders at NextView also worked at this firm, as did some of our first investors and the founder of one of our portfolio companies. I also probably would never have been able to work at Ebay in the current immigration environment, because by the time I was seriously speaking to them, there would have been no visas left for someone like me.
As an investor, we’ve benefitted from the ability of international founders to start and build companies in the US. Four of our portfolio company founders are from other countries (India, Estonia, Croatia, and Canada). But building US based companies for these founders have not always been easy. In particular, Jay Meattle, the founder of Shareaholic struggled to stay in the United States for years even after raising millions of dollars in capital from terrific firms and building a company of impressive scale. It was a really unfortunate tax on the company, and caused him to start building out part of his team in India for a period of time rather than hiring more American employees, which was his preference. Thankfully, Jay has been back in the United States for over a year and these immigration worries are well behind him.
We will see where things go – I’m excited for this proposal and think that this, or something like it has a lot of promise. I hope the proposed program works and is replicated more broadly around the country. Stay tuned to this blog for updates and ways that you can help promote immigration reform further to make the United States (and MA in particular) a better place for entrepreneurs to build their businesses.
I was as surprised as the next person to hear today that Fred Destin was going to be leaving Atlas to return home to the UK with his family. I’m sure it was a tough decision, but one I can understand given someone who has lived abroad for most of his life.
Even though Fred was always obviously not a local Boston-guy, he had a tremendous impact on the tech community here that will be sorely missed. In particular, there are a couple things I’ve admired that I hope “sticks” even while he relocates across the Atlantic.
1. Fred did a really great job re-calibrating the local ecosystem around taking big swings. He looked at large scale, extremely fast growing, network businesses and said “why can’t those be built here?”. He also appreciated the fact that often, the most disruptive companies look like “toys” in the beginning, and that some of the best companies focus on growth and scale while being patient that revenue and profitability will come when the “technology leverage kicks in”. It’s counter-cultural here, and I appreciated his willingness to push for this loudly, even in the face of occasional criticism.
2. Fred has also been the model of someone who is vocal, engaged, and genuinely excited about the local tech eco-system in Boston. Yes, it’s by definition self-serving as an investor, but Fred has been more active than most, and I think genuinely excited to help this area become more attractive and friendly towards entrepreneurs. I’ve also always appreciated the way Fred has been very quick to openly express his admiration for companies and founders outside of the Atlas portfolio. Most VC’s (myself included) have a hard time not saying snarky remarks of companies that they are not involved with. It’s harder to be positive and constructive, which is what I’ve found Fred to be in nearly all of my interactions with him.
It’s too bad to see him go. But I think Fred will leave a positive mark, and I think some of these cultural norms have some staying power and will make this eco-system better even in the months ahead. Thanks Fred!
(This is a guest post from Jay Acunzo, NextView’s director of platform and community and our newest team member.)
This post is about new beginnings, specifically mine as director of platform at NextView (about which I’m unbelievably excited). But I want to focus on goodbyes for a second.
Have you ever received a farewell note, whether you’re ending a project or a job, that makes you step back and appreciate the other person on a deeper level? I’ve only moved on from a handful of organizations in my career (Google, Dailybreak, and, most recently, HubSpot), but the phrase that always sticks with me in someone’s good luck email is, “Let me know if I can ever help you in the future!”
Simple, right? You let a colleague know that you’re embarking on a new adventure, or maybe thank them for getting lunch that one time and wish them well, and they respond with that sentiment. Not, “Great working with you,” or, “See you around,” or even, “I’d love to keep in touch,” but rather, “I’m here to help.”
It always strikes me as a powerful statement despite, or maybe because of, its simplicity. It reveals a lot about their character. (By the way, thanks to all my great former HubSpot colleagues who sent me that exact sentiment!)
Back to NextView’s Platform
As far as we can tell, this role is the first of its kind in Boston, though precedents exist elsewhere. And while you can describe it through whatever buzzy phrase you like — paying it forward, adding value, knowledge transferring…scalable entrepreneurial mind meld summits, or whatever else — to me, this role has a simple but powerful core. It’s about help.
With that in mind, the NextView platform we’ll develop will be a natural extension of the genuine desire that Rob, Lee, David, and I have to focus on the needs, growth, and success of seed-stage companies. That includes both the NextView portfolio and the larger community. Anyone who’s ever had the pleasure of meeting the NextView partners knows they’re incredibly genuine in their work with entrepreneurs and desire to see this community succeed. (Having been operators and leaders at tech companies like PayPal, LinkedIn, eBay, and About.com, they “get it.”) In joining NextView, I’m excited for the chance to work alongside them, but also many of you.
Putting in The Work
As someone who loves to write, one of my favorite quotes is from Nathaniel Hawthorne: “Easy reading is damn hard writing.” That’s true of anything, I think. Making something easier for others requires that you put in a ton of hard work upfront and on their behalf.
But I’m excited to put in that work and to keep NextView more in-tune than ever with early-stage entrepreneurs. The goal is to build a platform that’s actually meaningful and useful to you, whether through resources, content, events, or other educational or business development opportunities. In the end, we’re all focused on the same thing: growing exceptional companies and building an exceptional community of early-stage startups right here in town.
I’ve been thinking a lot about the outcome distributions in different circumstances. The dimensions that I think about are:
1. What’s the cost of attempting something?
2. What’s the probability that an individual attempt is successful?
3. Whats the probability that the aggregate outcome of various attempts is successful overall?
In venture capital, the cost of attempting something is meaningful, but not that high. For most funds, an initial investment into a company is something like 1 – 3% of total capital (for example, a $300M venture fund may make a $5M first investment into a company, representing 1.6% of total capital). The probability that an individual investment is successful is pretty low, but a venture capitalist can be very successful if they invest in that one or two companies that pay back for all the other losses and generates a big return for a fund overall.
I find this to be somewhat similar to the outcomes of job hunting, except that the cost of an “attempt” is much lower. I remember when I was first looking for jobs out of undergrad, I interviewed at many many companies, and I had informal discussions and contacts with many more. Ultimately, I got a few interesting offers and chose one. I got many more rejections along the way, although I consider the process overall to be positive.
When I talk to students about jobs, I usually give this advice: Try to narrow the world down based on a couple dimension, say industry and geography. Then make a list of every single company that meets these broad constraints, and that list should be in the neighborhood of 50 or more. Then, systematically work your way through the list, meeting people at the companies, learning about them, getting interviews, etc. Through that process, you learn a lot about the different opportunities (and your own preferences) and I’m highly confident that a good job offer will result.
Most of the time when I give this advice, I see fear and apprehension in the student’s eyes. Doing something like this that involve a lot of “shots on goal” and enduring many “misses” is really uncomfortable. But I think in situations where the cost of experimentation is low, and the value of success is very high, an approach like this tends to work.
I find that most people are not tuned to this sort of outcome distribution. Especially those who have had a lot of academic success. Our schooling system typically rewards us for consistent successful performance. And we tend to be tuned to situations where the probability of success can be relatively high at each attempt if you are talented and put in the effort. Same thing for many sports. In tennis or basketball for example, teams and individuals that are successful win at least 50% of the time, maybe much more. If you win less than 50% of the time, it’s pretty bad. I notice a lot of people are tuned to this kind of outcome distribution, and that colors the way that they go about solving problems.
But I find that in many avenues in life and work, the cost of attempting something is low, the probability that a given attempt fails is high, but the potential value of success is very high. Given that kind of distribution, a different approach and strategy can work that involves a lot of smart, coordinated iteration. You just need the persistence and thick skin to pursue it.
In venture capital, an example of this sort of strategy can be seen in the growth equity realm. Typically, a lot of venture capital deal flow is driven by proprietary relationships. A lot of VCs historically milked relationships and backed a small cadre of entrepreneurs over and over.
But then some firms took an entirely different approach. In particular, a firm called Summit partners formalized an outbound cold-calling model where analysts and associates would scour the ends of the earth for companies that might potentially be interesting, and then work like crazy to cultivate these leads over time. Each analyst at Summit spends years tenaciously calling and tracking hundreds of companies. 99% of these efforts fail, but every couple years, an analyst sources a deal that is successful. Each individual call is likely to fail, but as an entire effort, the process works, and Summit has been very successful, and attracted a bunch of copycats. I’ve found that many former analysts at Summit have a very different approach to solving problems which is distinctly different from the way I am hard-wired.
Some peoplethink of this as a brute force approach, and in some sense it is. But in another sense, it’s just a rational way to attack a problem where the cost of experimentation is very low, and the value of a successful outcome is very high. The goal then is to figure out a way to systematically take shots on goal in a way that may still lead lots of failure, but has a high probability of yielding a successful campaign overall. I think this applies in way more places than we think, but we tend to miss them because our brains are tuned very differently.
I spent a few days in LA this past week and attended the UpFront Ventures conference. It was a fun, high-quality event and I was glad to learn a lot about the great stuff happening in LA and catch up with a bunch of friends old and new.
In particular, I was glad to begin to deepen a couple digital-only professional relationships that I’ve had for a while. First, I was able to finally meet Manu Kumar at K9 ventures. I’ve respected his approach from a distance (he was doing hardware investing before it was hip, and also is very principled in what he is and isn’t interested in), and we’ve interacted quite a few times via Twitter and other channels. It was great to be able to at least have an in-person dialog with hopefully more to come.
I was also glad to be able to meet up for a second time with Hunter Walk at Homebrew. As a firm, we find Homebrew to be very similar from an approach and ethos standpoint, and although I’ve known Satya for quite a number of years, I’ve only gotten to know Hunter more recently, and largely via social media. Hunter and I were able to grab some time together in person a few weeks ago in SF, and it was fun to be able to get better acquainted when we sat at the same table for dinner on Wed evening in LA.
These encounters and others have gotten me thinking more about professional digital relationships. I’ve benefitted quite a bit from these sorts of relationships, and it’s great for someone like me who is fairly introverted. I probably would not have had much of an opportunity to really get to know Hunter and Manu outside of digital relationships, since our focus areas are a bit different and we are realistically unlikely to co-invest more than a small handful of times. It also allowed us all to get a very good, baseline understanding of our investing approach and how we view the world, given what we’ve said publicly on the internet over time. I kind of knew that I liked them before even meeting them, and that was pretty cool. If business opportunities do come our way, I think that our digital relationship allows us to bridge some chasm so it seems like we’d be working with people we have some familiarity with.
At the same time, there is an interesting false intimacy that is developed digitally vs. in person. It’s kind of weird to think that there are people online that probably know a lot more about an important subset of my thoughts than most of my close friends and family. It’s also pretty easy to be disingenuous digitally, which eventually does come to roost at some point, but probably takes a lot longer.
To tie this together, one of the speakers at the UpFront event was the founder of Tinder. And although Tinder is largely focused on dating, I’m sure I’m not the only VC that has been pitched multiple versions of “Tinder for Professional Relationships” at some point or another. Although I have a visceral negative reaction to the analogy, there is something to the idea of reducing the friction of creating new productive professional relationships. I’m not exactly sure how one would do it effectively, and I think that meaningful relationships and friendships do require quality and quantity in-person time. But I think these sorts of relationships can be (and have been) really positive for me, and I hope that I’ve been able to be a positive contributor to others as well. It will be interesting to see how these evolve and whether there will be meaningful businesses built off of making these sorts of quality professional connections.