Felix Salmon, in a must-read blog post titled The Most Expensive Lottery Ticket in the World. He may be overstating the case to make the point, but the counterbalance to the Stepfordian optimism of the Valley is refreshing.
Read the full post here.
Here is how I think about it today:
Pre-Seed is the new Seed. (~$500K used for building team and initial product/prototype)
Seed is the new Series A. (~$2M used get for building product, establishing product-market fit and early revenue)
Series A is the new Series B. (~6M-$15M used to scale customer acquisition and revenue)
Series B is the new Series C.
Series C/D is the new Mezzanine
~ @ManuKumar of @K9Ventures, in a perfect articulation of how the VC-startup funding landscape has evolved
Read the full post here.
Recovering from suffering is not like recovering from a disease. Many people don’t come out healed; they come out different. They crash through the logic of individual utility and behave paradoxically. Instead of recoiling from the sorts of loving commitments that almost always involve suffering, they throw themselves more deeply into them. Even while experiencing the worst and most lacerating consequences, some people double down on vulnerability. They hurl themselves deeper and gratefully into their art, loved ones and commitments.
The suffering involved in their tasks becomes a fearful gift and very different than that equal and other gift, happiness, conventionally defined.
David Brooks, in a fantastic piece titled “What Suffering Does." While the wisdom borne of suffering is far deeper than mere career issues, I do happen to think that the strong correlation between an initial failure, and eventual startup success, is also tied to a similar wisdom borne of suffering. That wisdom is rarely found without first experiencing the suffering.
Read the full article here.
A few years ago, a sociologist told me about a study of happiness in southern California. The top reported source of unhappiness was that people felt too busy and overwhelmed by all of their daily commitments, and that they did not get enough daily time alone for themselves. The second-highest reported source of unhappiness in the survey was that people spent too much time each day commuting in the car by themselves. These ironic results reveal a fundamental insight into the nature of the human mind: our tendency to believe a narrative we have invented about what is happening, even if that narrative is contradicted by our actual experience.
We are all familiar with the accelerated pace of modern lives and its challenge to our sense of happiness and wellbeing. Arguably, those of us who work at the leading edge of technology and innovation are even more affected. For those of us leading or investing in startups, the constant change can be both exhilarating and exhausting. The constant ambiguity and uncertainty need balance from a stable set of core values and principles. The startup ethos of speed and rapid iteration can be a source of competitive advantage in the market, and also a source of individual and team dysfunction.
In over 20 years as a venture capital investor and a startup entrepreneur, I’ve lived this roller coaster along with many of you. I’ve experienced the highs of killer product launches, successful IPOs and M&A exits, of the fulfillment that comes from working collaboratively with a team that just “clicks.” I’ve also felt the soul-crushing impact of failed dreams. I’ve been through the anger and fallout from teams of exceptional people who turn on each other to blame and point fingers long after the failure is past. I’ve battled the claustrophobic dread of depression.
I’ve witnessed and known many company founders, startup team members and investors who have also gone through these particular forms of hell. Many of them found a way to just keep on going. Some of them, however, did not. Instead, some became elements of my venture capital investing track record that go undiscussed with limited partners or aspiring entrepreneurs. They include two suicides, two heart attacks, one stroke, and one homicide. Beyond these dramatic examples are troubling numbers of more common tragedies the number of personal bankruptcies are more than a few; the number of divorces are beyond counting; and the number of hidden bouts with depression and anxiety are unknowable.
The good news is that in the startup world, we know how to challenge status quo thinking and implement better solutions. In the past decade, we have collectively changed our thinking about the best practices required for startup success in almost every aspect of this framework. Marc Andreessen’s concept of “product-market fit” and Steve Blank’s process of “customer development” have changed the way we think about market opportunities and go-to-market strategies. David Kelly’s elevation of “design thinking,” and its central role for human empathy, has changed our thinking about design and product management. The Agile Manifesto, in software, and the exploding “maker” culture, in hardware, have transformed our approaches to IT product development. Eric Ries’ concept of “lean startups” and Alexander Osterwalder’s “canvas” have re-engineered our approach to financial business models. Techstars, Y Combinator, Kickstarter, AngelList, Indiegogo, and an explosion of other crowdfunding sites and “micro” seed venture funds have transformed our approach to company formation and seed investing, while Aileen Lee’s work on “unicorns” (companies with $1 billion+ valuations) has changed how we think about the drivers of private and public market valuations. Blogs by Fred Wilson, Brad Feld, Mark Suster, and other leading VC investors have created a public conversation space for dialogue about the evolving entrepreneur-investor relationship.
In my view, this widespread and collective rethinking about startups has increased the resilience of the startup economy as marked by the recent resurgence of blockbuster IPO and M&A exits. We’ve simply gotten smarter about startups.
Yet one aspect of building a startup – and in my view, the most critical aspect – seems strangely absent from that list: the human beings, and particularly their social, psychological and emotional strength and resilience. We still talk about startup behavior in the same outdated ways we did in the dot-com era. We focus on the colloquial symbolism of things like all-nighters, dogs at work, flip-flops and hoodies, in-house dry cleaning, and beer in the fridge instead of looking at the building scientific evidence for what drives effectiveness and productivity. We fail to borrow proven best practices in team-building from other domains like professional sports and the military with similar requirements for sustained human performance under elevated levels of uncertainty and stress.
It amazes me that over the last decade we’ve re-invented product development; popularized customer development; laid out the canvas for business model development; and completely ignored our leaders and their psychological, social and emotional development. When it comes to what is actually happening with regard to the single most important driver of startup company and investor success, we are either silent or clueless. Or, more accurately: we are mindless.
There is hope, however. Just like the surveyed Los Angeles commuters whose wished-for “alone time” could be magically provided, if only they changed their perceptions, the framework for rethinking how we manage ourselves and our startup teams is already right in front of us. Right now. We just need to pay attention.
Dr. Jon Kabat-Zinn is Professor of Medicine Emeritus at the University of Massachusetts Medical Center and founder of the Stress Reduction Clinic and the Center for Mindfulness in Medicine, Health Care, and Society, as well as a co-founder of the Cambridge Zen Center. Almost forty years ago, like many entrepreneurs, Dr. Kabat-Zinn saw an opportunity to innovate by bringing a successful approach well-known in one human domain (in this case, Buddhist meditation) into another, completely separate domain (Western medicine) which had not yet learned of the approach. This innovation may seem straightforward and even obvious in hindsight, but like putting wheels on luggage, something known to humans for over 2,000 years was until then strangely absent.
Dr. Kabat-Zinn’s specific vision was to create a secular approach to meditation, stripped of any spiritual, cultural or religious traditions, to train medical patients – particularly those suffering from chronic pain, stress, and anxiety – how to cultivate mindful awareness as an effective medical treatment for their condition
So what is this magical elixir called mindfulness? As defined by Dr. Kabat-Zinn, mindfulness is “paying attention in a particular way: on purpose, in the present moment, nonjudgmentally.” I describe it a bit more colloquially: it is paying attention to what is actually happening, instead of the stories and pictures our mind has created about what is or should be happening. Or put another way: Don’t believe everything you think.
The good news is that our ability to move from mindlessness to mindfulness is just as accessible as the longed-for “alone time” is to solo commuters in Los Angeles. In every moment, everything we need for our social, emotional and psychological strength and resilience is already with each of us. We carry it around in our own minds, and it is simply the ability to redirect our attention to what is actually happening at this moment as it unfolds. Some have called it simply “elevated common sense.”
The cultivation of mindfulness is usually accomplished via meditation training. Formal meditation practices involving sitting, breathing, walking, etc. are just artificially structured environments of limited distractions in which we can practice and strengthen our ability to see what is actually happening in the present moment. To be clear, the practice and benefits of meditation are unrelated to any historical, cultural or religious origins or practices. In fact, to gain the benefits of meditation, one need no more burn incense and bow before an altar to the Buddha than one would need to bow and pray at an altar of Peter Drucker in order to benefit from his teachings on the practice of management.
Many people incorrectly confuse meditation training with the actual practice of mindfulness, however. Meditation is just a particular training method. The real benefits of mindfulness are realized in our daily lives in “the real world.” Our lives are the real practice of mindfulness. As we begin to see more clearly what is really happening, we often begin to also more clearly see who our family, friends and co-workers really are. In a virtuous cycle, this understanding enables us to maintain better psychological balance, emotional resilience and social / relationship effectiveness. Improving these qualities is what provides the key benefit to CEO/founders, employees, and investors in the volatile environment of startups.
Meditation: A Hockey Stick of Accelerating Traction
The author Jeffery Paine long ago predicted, “When Buddhism comes to the West, it will arrive not as religion but as psychology.” It would appear that his long-predicted moment has indeed arrived. As the personal, leadership, and organizational benefits of mindfulness have become clear, the practice of secular meditation has begun skyrocketing across society. Growing adherents of meditation training range from NBA coaching legend Phil Jackson and this year’s Super Bowl champion Seattle Seahawks organization; to Fortune 500 companies like Monsanto and Target.
The U.S. Marine Corps is now using meditation training to strengthen the focus and resilience of new recruits and to assist veterans in dealing with post-traumatic stress disorder and other similar conditions. Congressman Tim Ryan of Ohio has written “A Mindful Nation.” The list of media figures who have adopted meditation practices is particularly broad, including celebrities ranging from Oprah Winfrey and Arianna Huffington to rapper 50 Cent. Even Rupert Murdoch of News Corp. and FOX News has tweeted about meditation. It is little surprise, then, that this week’s #1 top-selling non-fiction book, according to the New York Times, is a memoir by ABC News anchor Dan Harris titled “10% Happier: How I Tamed the Voice in My Head, Reduced Stress Without Losing My Edge, and Found Self-Help That Actually Works—A True Story”.
Given the pace of change, the volatility, and the ambiguity faced by technology companies, it is no surprise that adoption has been particularly broad throughout Silicon Valley. Well-known meditation practitioners include Square and Twitter co-founder Jack Dorsey and Salesforce.com CEO/founder Marc Benioff. Google has an entire internal program devoted to training in mindfulness called “Search Inside Yourself,” led by Chade-Meng Tang. The hottest annual conference among the Silicon Valley elite is no longer TED but Wisdom 2.0. The fastest-growing print magazine is called “Mindful.”
The mindfulness revolution is rapidly spreading throughout the world of technology startups. Ev Williams is the founder and CEO of Medium, and was previously co-founder and CEO of Twitter and Blogger. At Medium, Ev has publicly and explicitly embraced the goal of building a “mindful company.” A large number of attendees at this year’s Wisdom 2.0 conference were entrepreneurs, and a surprising number of venture capitalists have adopted meditation practice. A few VCs are now even focused on investing in mindfulness-based startups, hoping to scale adoption of the practice.
Of course, Silicon Valley is known for its herd behavior. The accelerating adoption of mindfulness across the startup community, while exciting, may prove to be only a passing trend. Indeed, many long-time practitioners have already begun to decry the rise of “McMindfulness” as a stylistic affectation chosen by trendsetting hipsters to advance their own self-interested brand image. Maybe so. But unlike facial hair and fixie bikes, mindfulness meditation has a way of permanently changing ourselves and the way we experience the world, regardless of why we may have started. Discovering a source of clarity and happiness that is always right in front of us can be addicting. In fact, a common quote on Twitter these days pretty much nails it: “Meditation is the new porn: you do it on your own, you’re afraid that others might find out, and it feels awesome.”
Trevor Loy is Managing Partner and founder of Flywheel Ventures, a seed- and early-stage venture capital firm. He is also a Lecturer on entrepreneurship at Stanford University and a former Director of the National Venture Capital Association. Trevor blogs at www.trevorloy.com and www.mindfulstartups.com. First exposed to the secular tradition of mindfulness meditation in 1996, he has since also studied in the Mahayana and Zen Buddhist traditions. He lives outside of Santa Fe, New Mexico, where his mind still wanders constantly.