The idea that
even the most normal people close their eyes
for six, seven, eight hours a night,
and during that time,
for several hours, go
absolutely and utterly stark staring mad
If you are putting together a deck or pro-formas that show that you intend to be a unicorn (> $1B valuation) at some point, please do be thoughtful about how much it’s going to cost you to get there. Entrepreneurs are optimists by nature, which is wonderful. But don’t be silly, please. The below chart shows total capital raised for all of the unicorns and near-unicorns as of yesterday as tracked by Crunchbase. The Y axis has been artificially constrained to $100M (only $100M raised!!!!!) to make a point.
That point is, it’s a lot of fucking blue, huh? Your odds of raising $3M and becoming a unicorn are effectively nil. Breathe in all that blue, my fellow unicorn-hunters and unicorn-striving friends. Take it to heart. Eat it up.
- N = 203
- Average Raised = $474M
- Median Raised = $250M
Finally, the numbers are interesting by country. Ignoring the countries with < 3 unicorns we get the data below, suggesting that (A) it’s REALLY expensive to build a unicorn in India or China and (B) we should all move to or start investing in London ;-).
In the last three months I’ve seen more than half a dozen young startups looking to raise 6-10 months of capital. This is a common rookie error and I’m not sure why it still persists given all the extant education available on the topic, alas…
You should assume it will take you six months to raise money. Then you need to prove something. Then you should assume it’ll take six months to raise the next round of (hopefully bigger) money at a (hopefully higher) new valuation based on all the cool shit you proved with the first money! This is the life of a seed-stage ceo.
Hunter Walk at seed investment firm Homebrew posted a great article about the Goldilocks situation of “second seed rounds”. In it he talks of the “Too Hot” firm, and his description is dead-on perfect with regards to not having enough runway to prove what your business needs to prove:
Ooh, these are tough ones. This startup usually has a chart that’s up and to the right, but with just 2-5 months of data because it took them longer to find product-market fit than they originally anticipated. The best Series A investors are telling them there’s lots of potential here but would want to see 6-9 months of data to better assess cohorts and repeatability of whatever seems to be working.
Try to aim for “just-right”. Too-hot is a crappy place to end up – sometimes even worse than “too-cold”. While variety is the spice of life, as a guideline you want at least six months of burn to prove things, and then six months to raise – so one year at minimum. 18 months is a good target.
Part Of American Wrecking Girl All Night featuring Icona Pop, Miley Cyrus, Bonnie McKee, Chris Cornell, Katy Perry and Empire of the Sun. Created by Marc Johnce.
If this doesn’t get you moving, check that you have a pulse!
This weekend I had the pleasure of spending hours and hours at the Isabella Stuart Gardner Museum and the Museum of Fine Arts. In addition to the innumerable delights consumed via my eyes, I was impressed with many of the delights provided by museum patrons par nez.
Being a scent-hound, I pay attention to perfumes I pass in public. I have to say that this particular set of museum-goers were easily the best-scented group of folks I’ve encountered in the wild in quite some time. Sure, we all usually drown ourselves in something-or-other when we go out to a club for the evening, but it’s hard to capture specific scents amongst the beer, fog machine, sweat, and whatever else might be going on (oh, what sort of clubs do you frequent?). It turns out that museums are apparently exceptional in this regard, being filled with quiet, slow-moving, interesting people. It makes sense in retrospect, but I never put two and two together previously.
Some of the juices were pedestrian, but that’s okay. At least folks were making an effort. A handful of ladies had some impressive scents. Luckily none called security on me for following them around with my nose. None of the men’s scents stretched the boundaries of style, though I was pleased by the number of men wearing scent in general, and I was pleased that there weren’t too many instances of the painfully-overused (out-used? used-up?) common male perfumes. I even caught a whiff of some Old Spice at one point!
Picayunes aside, it was a blast art-looking, people-watching, and people-smelling! I’m already looking forward to my next visit to a museum.
If you were at either museum this weekend and walked past a long-ish-haired gentleman who smelled of tuberose, that was probably me. Pleasure to make your nose’s acquaintance; I hope I did not olfactorily offend.
My dear friend Betsy Aoki shared a great article this afternoon that everyone in tech should read (and probably every other industry too, but I can’t speak as definitively there). The assumptive and presumptive behavior of the suitably-embarrassed and chastised folks in the article got me to thinking about how we fail as professionals on a constant basis in judging people too fast. There are logical arguments to be made as to why we insist on jumping to conclusions fast (too many meetings in a day, not enough bandwidth right now, etc.) but that doesn’t justify the behavior pattern – especially if it’s (all too often) wrong, discriminative, offensive, and worse.
For the avoidance of doubt, I have no problem with people judging each other. It’s part of human nature, and at a professional level we do have to prioritize, bucketize, and order other human beings, as cold as that may sound.
But you can judge people in two radically-different ways that I refer to as “top-down” and “assumptions-up”.
Most folks (and we all – each and every one of us – have been guilty of it at some time) work in the “assumptions-up” world – just like the unfortunate, embarrassed folks in the above article. Whether you want them or not, you DO have preconceived professional notions that you have learned about people based on irrelevant data like age, gender, race, religion, and even on things as random as height, weight, speech patterns, and hair color! If you think you’re exempt from these behaviors for some magical reason, YOU ARE WRONG. Do yourself a favor and check out Dr. Mazharin Banaji’s implicit-association research, book – or even take an IAT test yourself (warning: I was disturbed by my results).
Even though we have learned these unfortunate biases, and they may be exceptionally difficult to unlearn, we can try to get around them in judging each other in professional* situations by working “top-down”.
Spend a week trying to work top-down. I guarantee it’ll have an impact on you. Whoever walks into your office, or into a conference room, or sits down in front of you at that cafe for a meeting, or walks up to you at some networking event – treat them identically: ASSUME THEY ARE A ROCK STAR! Yes this is counter-intuitive to how most folks manage their time and interactions – so what. Start at the top, assuming they are amazing, and figure out as you go along where they have deficits. Yes, you will be building someone ‘down’ in your mind instead of ‘up’, but you’ll find that you will be “building them down” with a ton more rationality than your preconceived, irrelevant assumptions may permit you to “build them up.”
Regardless of whether you come to the conclusion that someone is great, mediocre, or useless in the end; I guarantee your conclusion will not be majority-based on the color of their skin, the presence (or not) of a Y chromosome, whether they’ve got a skullcap on their head, or anything else generally irrelevant. As an added bonus, you’ll have a better interaction and fewer people will walk away thinking you’re an asshole ;-) .
Give it a try!
* I’m afraid I have no experimental prescription as to solving these biases outside of professional workspaces, where they are, sadly, probably 100x more destructive.