Now that the sale of numberFire has been in the books for a few months and the dust has settled a little bit, I've taken the time to reach back out to a lot of the people who were along for the ride. While I'm thrilled that everyone from the team is alongside me as we continue to develop our IP within FanDuel, I view a lot of our early investors also as "the team" and it's important to me to maintain those connections and friendships.
The first one who really had our back in a meaningful way - and I don't just mean financially, but I'd be lying if I said that wasn't a part of it - is Will Porteous of RRE Ventures, whom I met up with last week. Will's a great guy, and every time we get down to chatting, I come away energized with a lot of good insights - something I find to be incredibly valuable in a friend. Will was our first investor, the lead hammer in our investor syndicate, and a constant source of encouragement and helpful feedback, both delivered at the time in which each was respectively necessary. We were lucky to have him on the bus.
(We also have an unofficial agreement to contribute to our respective blogs more. Feel free to bug him if he's not holding up his end of the deal.)
Beyond just catching up, we got to chatting about deal flow and how someone like him, as an active investor at one of the city's true blue-chip firms, makes immediate sense of the chaos.
One maxim he shared is how he profiles CEOs of companies. Some people are driven to be right, which is to say that above all, their passion and what they feel is "success" relates to their ability to build the superior product, have the best insight, change the industry, and so on. Other people are driven to be rich, which is, well, exactly what that implies - what they feel is "success" relates to it's economic viability and the subsequent personal wealth creation.
Ideally, you'd want a CEO who is an equal mix of both; someone who believes in building the best product and the fundamental quality of it, but also has positive mercenary approach and a solid understanding of business fundamentals. Too much on the former side and you've got an idealist who may miss the market with perfectionist tendencies and lack of proper focus; too much on the latter side and you've got a crappy product and a leader with misplaced values and potentially user-abusive goals.
(In case you're wondering where I fall, I'm much more on the former side. While obviously anything worth doing is worth doing for financial gain, particularly in our industry, I started numberFire because I really and truly cared about how bad sports media was and frankly still is. It was a passion, perhaps the only thing I love enough to start a business around. Potentially getting rich doing something I don't care about doesn't interest me in the slightest, as there's nothing more valuable to me than working on cool shit.)
Anyway, this discussion got me thinking about something else - how would I thin-slice this sort of thing if I were a VC?
Because I haven't seen enough companies or talked to enough founders to be able to immediately discern some of the subtler things that I'm sure Will is able to pick up on, the easiest solution would probably be to only accept meetings in industry areas in which I know well. I'd likely to be able to tell within thirty seconds if an idea is legit in the media, sports, or data sectors.
But that's a very small portion of the overall market; what should I do about the rest? I hadn't given it much thought until I read this fantastic interview of the Fat Jew, the comedian/wine salesman/provocateur who you may recall was embroiled in a very sticky stealing vs. curation debate a few months back. The article digs into the business of being a social media celebrity, with him adding some very interesting thoughts.
“Most people with a large social media following will hold up a can of soda, take a picture, put it out, boom,” he says. “You’ve fulfilled your contractual obligations. But kids can spot when they’re being targeted from a mile away. They’re highly averse to it. And that’s not what we do. Brands approach me: ‘We want to get nuts and reach millennials!’ They love buzzwords. ‘We want to get in the Fat Jew business and go nuts!’ So a brand like Craftsman Tools says, ‘We’d like to do something different.’ I say, ‘OK. Superbowl Sunday. Build me with Craftsman Tools a giant bowl filled with chilli. I’ll sit in it and watch the game and I’ll have people sprinkle onions and cheese on me.’”
On the industry changing:
“Here’s the deal. I’m the future. All the real adults who are reading this book may not want to accept it, but I’m telling you, it’s the truth. Yes, most people over 50 don’t understand what I do for a living or take me seriously, but does that really matter? They are all going to be retired or dead soon, and they won’t be able to say shit about the way the world is run.”
I'm not a big social media presence guy, and my first response to his opinion is almost revulsion - how can someone who thinks that way resonate with audiences? But then, suddenly, I get it - it's not about me. I'm not his audience, singular. He's got a huge audience, massively plural. It's really about the people who are responding to him, that love his viewpoint and approach and can spot corporate marketing talking at them from a mile way, making little to no effort to truly reach them.
So if I don't get this at all - but people clearly do, and the market appears to be accelerating away from me - maybe it's equally important for me to take meetings in industry sectors I know less than nothing about. Maybe it's important for me to take meetings in sectors that I don't get, that I strongly dislike, perhaps even that I hate. There's huge value in ignorance in this case, because you can go into a meeting and easily have your mind changed, perhaps just as much value in going into a meeting with a deep domain experience.
Some of the best, most amazing ideas probably sound ridiculous up front, so it's a massive disservice to not listen solely on the basis of not getting it or disliking the industry. That strong opinion - positive or negative - is where it needs to start.