When I started in venture capital, east coast VC’s largely had a formula for the kind of founders they wanted to back. There was a high degree of interest in backing repeat, experienced entrepreneurs or executives.  Many successful investors had made their LPs (and themselves) many millions of dollars by finding a rock-star founder, and then following him or her through 2, 3, or more companies successfully.  Simultaneously, many of these companies relied on very strong proprietary technology and IP.  As a result, it was very difficult for a young, first time entrepreneur with an interesting (but technically undifferentiated) internet product to get investors attention (especially after the bubble burst).  This region lost many amazing companies to the west coast in the process. It’s getting much better, but this continues to happen.

This history is a reminder to me about the danger of following conventional wisdom for its own sake.  Thinking back, I think it’s pretty clear that conventional wisdom ends up

1.) being applicable in a more narrow context than is commonly believed and

2.) being based on a context that changes more quickly than most people imagine possible.

In retrospect, the reason that pursuing this profile of entrepreneurs and companies became conventional wisdom is pretty straightforward.  This region had had a number of successes in enterprise software and telecommunications infrastructure. Young entrepreneurs were at a disadvantage starting these sorts of companies.  It was a huge advantage to have C-level relationships at the large carriers or enterprises.  Repeat entrepreneurs or well known CEO’s could get engagement from these customers well before a functional product was actually available. First time entrepreneurs would have a hard time even getting a phone call returned.  This model worked, and things were good.

The problem is that the context of the world changed. Today, we have a new conventional wisdom, especially in the consumer internet space.  The realization is that entrepreneurs that are developing consumer applications with a social component tend to look very very different from the founders of old. The conventional wisdom isn’t quite as tightly defined, but a couple characteristics I’ve noticed investors gravitating towards are below (some are serious, some less so)

• Young, under 30
• “digital natives” who grew up in an internet connected world
• Socially connected urban hipsters of SF and New York
• Designers and geeks, not technical wizards
• “Hustlers”
• In love with photography, quirky sneakers, and indie music
• Using the words “test”, “pivot”, “iterate”, “MVP”, like they studied at the feet of Steve Blank
• Ramen eating 🙂

Now, some of these characteristics are reflective of terrific entrepreneurs in the consumer internet space.  They describe many of the founders we’ve backed too.  But this is by no means a rule for all. I find it really funny to see my more conservative friends from other professions go into the startup world and start to become molded to this persona.  I don’t think that works – it’s important to be authentic.

Besides, conventional wisdom comes and goes.  As a firm, we often back younger, first time founders in certain projects.  But we’ve also backed older, repeat entrepreneurs in others.  Usually, we have a preference for more experienced founders when a company needs to participate in a complicated eco-system where being an “insider” is an unfair advantage.  Sean Black, the founder of SalesCrunch and former VP of Sales at Trulia is an example of this, as is Paul Nadjarian who founded Mojo Motors after a career spent working with auto dealers at Ford and Ebay Motors.  Different contexts dictate different rules.  It’s easy to be intellectually lazy or rely too much on heuristics and miss this.  It’s also easy to look around and see everyone else behaving one way and use that as a reason to follow.  Ultimately, conventional wisdom is wisdom for a reason.  But that reason doesn’t hold true for all circumstances or all time.