Published in the San Diego Union-Tribune, April 5, 2021
Last week, I talked with a good friend who sees “froth” everywhere. His company is getting a buyout offer. He sees other companies getting gobbled up by SPACs (special purpose acquisition companies), and he is afraid. Lots of money, too much money. What happened to the “not enough money” paradigm, the one that entrepreneurs learned to live with and know best?
My pal is in FOF mode — Fear Of Froth, the agitation of small bubbles in a sea of insanity. And I fear that if he is not cautious, he will end up in an unpleasant bubble bath.
We all revert to learned patterns in our past because it is the programming with which we are most comfortable. If you are an entrepreneur who spent your career wearing bootstraps looking for money, and all of sudden there is a tsunami of stupid money, you don’t know whether to dive in or run for the hills.
When there is a fork in the road, take it. Go ahead, rob the bank. They are giving a free toaster with the money. The other possibility is to stick with what you know and assume reversion to the mean, which is code for at least you will have a chair to sit on when the music stops.
I don’t have a crystal ball, but the only bubbles that don’t end badly are in a champagne bottle. It seems like an even-money bet at this time.
Regardless, you still have a company to build, and to that end, I would like to propose a semi-radical suggestion with respect to your hiring model, courtesy of Brad Bird from Pixar. He says they hired people who were disagreeable, disgruntled, dissatisfied and wickedly smart. He called them “pirates.”
This hiring issue is a constant black hole. There are 200 books on how to do it well, and still, it confounds CEOs. One of the reasons is our bias toward wanting to hire someone with whom we would like to have a drink, which has been consistently proven to be a losing hand. You need (but may not like) people who are skeptical and critical and promote constructive conflict.
Now to complicate that puzzle, you also need diversity. That means women, people of color, and newcomers and introverts. And the complication is that this cohort does not naturally speak up. You need to buy them a Jolly Roger hoodie and give them a plastic sword and an eye patch. And as for the plank — go with only two feet above the ground, twisted ankle, not broken leg.
A final note on my friend who sees a world awash in money. He says that one of his chief skill sets is networking, digging wells long before he needs the water. If the tech world becomes a firehose, he fears that who he is will become less relevant. Will people still value his soft skills, or will they write a check for an idea on the back of a napkin from a person they have known for 23 minutes?
His concern reminds me that it is hard to value what you don’t understand. Bitcoins have risen to $50,000. My son-in-law and daughter have some. I have no idea what it is or what it does or what it is worth. My ignorance threatens me.
The challenge in building your company is to allow for your ignorance to not hold you back from becoming informed. Admit the confusion and embrace the possibility. Me personally, I am not afraid to change, but I am also not willing to change my values. I don’t do well in crowds, but I believe that crowdfunding is extremely valuable in learning about your potential product.
We are coming out of COVID, the vaccine is available, optimism makes the world spin faster. I attended the USD angel startup pitch fest. The companies were strong. Our city has multiple pitch fests every week now. We are coming back. I think I need to lace up my old running shoes and join the crowd.
I once got great advice from the late Jack DeBoer, real estate hotelier, entrepreneur, who said this about deals and startups, “Make sure you’re only risking money and not your family, health, friendships, reputation or anything else that is difficult or impossible to get back.”
Rule No. 661