Brad Feld, Managing Director,Foundry Group Co-Founder, Techstars
Healthy Obsession: Self-care, Startup Success, and Rockstar Pitches with Investor Brad Feld
Brad Feld is blunt: “The glamorization of being an entrepreneur, I put in the category of total bullshit.”
However great it can be, entrepreneurship is hard. It can mean disappointment. It can mean exhaustion. It can mean frustration. It can mean failure. Starting a business is less smooth sailing and more stormy seas, often with waves of worry even as you tack toward horizons glowing with promise.
“If you’re obsessed about this product that you want to bring to life, this business that you want to create, you’ll get through it,” Feld says. “If you’re not, you won’t.”
He would know. Feld has been open about grappling with depression and dealing with the difficulties of a demanding job, but he’s also worked obsessively over dozens of years to get to where he is today.
In 1987, he built a profitable software consulting company. Six years later, he sold it. He soon began investing money in other startups, a path that would lead him to cofound two venture capital firms, including Foundry Group, where he works today. He also cofounded Techstars, a massive startup accelerator.
Feld has heard pitch after pitch—both successful and not. He has invested in company after company—including Harmonix, Zynga, and Fitbit. Pair those facts with his firsthand experience running a business, and it becomes clear that Feld knows how to get things done.
“It’s not about the idea,” he says. “It’s about the execution of the idea.” It’s all about actually making it happen. A cool concept is little more than a vague notion of where you want to go. To get there, you still have to map a route, assemble a strategy, and trek from point A to point B. That’s the hard part.
Ideas need execution, Feld says, but execution needs obsession. That’s the test he recommends to aspiring entrepreneurs weighing a business idea. Should you go all in on an opportunity? Yes—if you’re obsessed. Whatever you work on, it should matter to prospective customers, but it also has to inspire a powerful drive within you.
Obsession isn’t passion. Passion is enthusiasm, excitement. “Obsession,” Feld says, “is that you believe you are placed on this planet to build this product or to solve this problem. This is the thing you most want to do.”
It all stretches back to the truth that entrepreneurship is hard. To push through tough times, you need to be obsessed with executing your idea. If you’re obsessed, you can’t quit.
Obsession is an entrepreneur’s guiding light. But there’s a dark side to this, of course: Obsession can turn unhealthy. Become too obsessed and you could easily find yourself sinking to the floor, exhausted and unhappy after a 130-hour workweek, your relationships in tatters, your eyes bloodshot, and your business no better for the doomed effort.
“I think there’s this illusion of ‘if I just work more hours I will be successful,’” Feld says. “I don’t think there’s any correlation between those two.” Don’t do too much. Find balance. While you should obsess over your business, you don’t need to work all the time. It doesn’t need to be the only thing you do.
Sure, you’ll work a lot. “If your idea is that you’re going to clock in at nine and clock out at five and you’re going to work Monday to Friday—and on the weekends you’re going to do something else—that’s not an entrepreneurial life,” Feld says.
But hour after hour after hour isn’t the answer, either. You must work with purpose. “The number of hours that you’re working should be correlated and linked to your obsession, and focus on what you’re doing and your belief that it’s important,” he says.
This all goes back to a wider point Feld makes: the best entrepreneurs take a view that blends short- and long-term thinking. You should know where your business is going—tomorrow, next week, next month—and invest in that future today. But you should also invest in yourself. That means preserving your health, both physical and mental, because what’s supposedly effective in the short-term might destroy you in the long-term.
Feld offers one example in sleep. If you worked through night after night—never, ever sleeping, instead relentlessly building your business—you might get by for a few days. But you’d soon become mired in sleep debt, groggy and slow and “completely ineffective” at whatever you’re doing. “It’s not OK if you manage your whole existence around your business,” Feld says.
Sure, things happen. Sometimes, say with a big deadline, you’ll forgo some sleep. But if you transform those exceptions into the rule and ignore your health, your productivity will suffer, and you will suffer. This isn’t just about sleep. It goes for all basic needs, including your happiness and peace of mind.
“I’ve experienced intense burnout,” Feld says. “I’ve also been depressed several times.” After a six-month stretch of depression in 2013, he made proactive changes in the way he worked and lived so that he wouldn’t be as prone to the same stressors again.
These are the kinds of challenges that push people off the entrepreneurial path. But challenges shouldn’t stop you. It’s easy to see a successful person and realize that you’re not on their level. It’s easy to glamorize their life, to turn an entrepreneur’s story into one of pure triumph and constant victory. It’s much harder to remember—or simply never hear about—things that didn’t work for them.
The rigid distinction between success and failure is, in Feld’s view, a false dichotomy.
“Almost all the successful have had plenty of failures along the way,” Feld says. “Every great company I’ve ever been involved in has had at least one near-death experience.”
That’s a great takeaway. Difficulties don’t mean you’re done. Stumbles shouldn’t stop you. You can fall off the ladder, but as long as you grab the bottom rung, you can climb back toward the top.
It’s not glamorous—after all, glamorized entrepreneurship is bullshit, as Feld says. It is hard. But you can do it. Find something you obsess over, take care of your health, and try, try, try.
Brad Feld’s Latest Book Asks Whether Your Idea is Worth It
Feld has written six books, and his most recent title, co-authored with Ryerson University Professor Sean Wise, is Startup Opportunities: Know When to Quit Your Day Job.
It’s aimed at anyone thinking about starting a new company, and it’s all about weighing whether an idea is worth it.
“We were really trying to answer the question, ‘Is this idea any good?’ recognizing that the question itself is not the fundamental question,” Feld says. “We tried to write a book that is the book you read before you read The Lean Startup by Eric Ries, or any of the books by Steve Blank.”
Practical Tips: Rockstar Pitches
One of the early companies Feld invested in was Harmonix, which developed games like Guitar Hero and Rock Band. Whatever his own gaming or musical ability, Feld is a rockstar in one area: pitching.
He’s seen thousands of pitches from an investor’s perspective, so he knows what you should do if you’re looking for funding.
First, appreciate differences. “I like to talk about being like Dungeons and Dragons characters,” Feld says. “Some are elves and some are wizards and some are mages and some are orcs and some are dwarves and some are trolls.” The point? Individual investors differ.
“The mistake,” Feld says, “is to think of an investor as a single archetype, a single thing.” Instead, do your homework to understand what specific investors are interested in.
Feld’s Foundry Group, for example, screens many startups out within 60 seconds. Is the startup based in the US? Has it raised less than $3 million dollars? Does it work within one of Foundry’s investing themes?
If any of the answers are no, the answer to the pitch is probably no, too. Every investor has criteria like these, and it’s your job as an entrepreneur to find people whose criteria match your company—then persuade those people that they should give you money.
What’s the second big step toward amazing pitches? “Show, don’t tell,” Feld says. You can still use slides and words, of course. But your pitch shouldn’t focus on the mechanics of what you’re doing. It should instead center on what you’re doing and why anyone should care. Show your obsession and justify that obsession.
- What makes, and breaks, an true entrepreneur
- The importance of finding balance when it comes to work and your personal life
- What to do when you hit those roadblocks and feel like giving up
- The key to rockstar pitches and how to impress investors
- How to blend short-term and long-term thinking in order to become a successful entrepreneur
Full Transcript of Podcast with Brad Feld
Nathan: Hello and welcome to another episode of the Foundr Podcast. Thank you so much for taking the time to share your earbuds with me. I’ll just gonna give you a quick update what’s happening in my world, because I haven’t given you guys one in a while. We were working actually on some really, really cool projects. One in particular called the Foundrs Club. I’m really, really excited about this. Just because, you know, we have so many people in the Foundr community now, our community reaches over a million wide on all of the assets and pretty much there’s no way that people can interact. There’s no way where people can connect and there’s no way that people can make a ruckus together, and help and support each other. So, you know, we’ve got these massive tribes on like Instagram or, you know, on our podcast that you’re listening to right now, and the magazine, or the blog, or any of those social channels. So, pretty much I wanna connect everyone together. I wanna give the Foundr tribe a home, and that’s gonna be Foundrs Club. So, I’m really, really excited about Foundrs Club and it would be spelled with Foundr without the “e”, typical Foundr style, a little bit, I guess edgy or, you know, hip or cool. We’re trying anyways.
So, yeah, look, we’re working on the Foundrs Club, that’s gonna be going live soon which I’m really excited about. And yeah, guys, please get in touch if you wanna know more. Please make sure you sign up to our newsletter, if you go to our website, foundrmag.com. And another thing they’re working on is a super cool project to relaunch one of their courses, Instagram Domination. And that’s gonna be exciting, so a lot of exciting things happening, a lot of interviews being done. Where actually, we’ve got up until June next year booked front covers for 2016. So, yeah, things are moving along nicely, I can’t complain. Business is growing fast and community is growing fast. And yeah, we’re just trying to stay afloat and provide you guys as much valuable content as we can.
So enough about me, that’s what’s been happening in my world in Melbourne, Australia. Now to today’s guest, Brad Feld. Now, this guy is an absolute rock star. Guys, he’s received over thousands and thousands, and thousands of pitches. And he’s one of the co-founders of Techstars, which is an early stage venture fund and startup accelerator. It’s one of the big ones like Y Combinator, 500 Startups, and then yeah, there’s Techstars which is a very, very notable startup accelerator and early stage venture fund. And he also co-founded Foundry Group which is a VC firm. So, this guy knows his stuff when it comes to investing and what to look for in a great idea. And he was an early stage investor in like Zynga or Fitbit, these are massive, massive companies. So, you know, we talk everything investing and entrepreneurship. We also talk about the dark side of entrepreneurship which…you know, I wanna shine a spotlight on, like, you know, Brad has openly admitted that, you know, he’s gone through some tough times as an entrepreneur. And you know, I think we all need to acknowledge that, that entrepreneurship, you know, starting your own business, you know, building a startup is not for everyone. And there’s incredibly stressful times where, you know, we feel like giving up, where we’re so stressed out that we just like…it’s just, you know, it’s just crazy. And running a company is not for everyone. And, you know, Brad really talks about quite candidly what it is really like. So, I’m sure you guys will really resonate with that because for those of you listening, you’re either, you know, just about to start a business or you wanna start a business, or you’re somewhere along your journey as a founder or an entrepreneur. So, yeah, I think you’re really gonna like this one guys, there’s a lot of gold shared as always. We only share stuff that’s got the gold. So, that’s enough from me, let’s open the show.
I’m just gonna ask you the same question we ask every one of our guests, and that is, how did you get your job?
Brad: Well, I didn’t really get my job, I created my job. Currently, I’m a partner at a venture firm, Foundry Group, that I started with three other partners in 2007. And if I go back in time through the path that got me here, most of the things I’ve been involved in were things that I co-founded or helped start. So, my first company was one I started in 1987, I sold that company to a large public company. I started making investments with some of my own money. I helped start a few companies and then I was one of four co-founders of a venture firm that started the Mobius Venture Capital. And then in 2007, I co-founded Foundry Group. So, that’s how I got my job.
Nathan: Yeah, wow. And you co-founded Techstars too, right?
Brad: I did co-found Techstars.
Nathan: Can you tell us about your first company? What was it about, you know, how did that… It’s a long time ago, at least 20 years, it was a tech company…
Brad: Yeah, it was a tech company, it’s actually pushing 30 years, right? We started in 1987, I co-founded it with a partner, a guy named Dave. We started with no money, we raised our money, so we self-funded the business. And we built a business that was over seven years about $2 million a year business that was profitable because we had to be profitable. And then it was acquired in 1993 by a public company called Ameridata.
Nathan: Okay, I see. And what did that company do exactly?
Brad: We were a software consulting company back at the very, very beginning of when PCs were starting to be used in business environments as more than just individual computers. So we wrote a lot of software, that was accounting, back office, reporting, some sales and marketing related, all on PCs that were networked together. So we had to also deal with networking the PCs together. And if you go back to 1987 to 1990, even just getting software running on a PC that was something other than, you know, a piece of packaged software was quite challenging.
Nathan: Oh, I see. And then what happened next? You sold the company and you started doing some investments?
Brad: Yes. I sold Feld Technologies to this large public company, I worked with them for a couple of years. But while I was working with them, I started actively investing as an angel investor in a bunch of early-stage companies, I was living in Boston at the time. And between 1994 and ’96 I made about 40 angel investments. You know, smallish investments, $25,000, $50,000 investments. But I was often part of the initial couple $100,000 round that the companies raised. Those investments were made at the very, very beginning of the commercial internet, so sort of the rise of the commercial internet. So, there was a lot of activity around that.
Nathan: I see. And were any of those investments notable, that anyone would know like the company now?
Brad: Some of them would include, an early one that I did was a company called Harmonics which is the company that made Guitar Hero and then acquired by Viacom, created Rock Band while they were part of Viacom. Or spun out of Viacom back to an independent company, and then did the Dance Central. And for people that I remember Rock Band and remember it fondly, Rock Band 4 is coming out this fall and I’m on the board of Harmonics again, an investor in Harmonics again. Rock Band 4 is pretty epic.
Nathan: Oh, wow. You’ve also been an investor in Zynga, MakerBot, and Fitbit.
Brad: Yeah, those three companies were investments from Foundry Group. Those were all investments that I guess Zynga was made in 2007, Fitbit was either 2009 or 2010, MakerBot was 2010. So, you know, those are all investments that were made by the firm that I’m currently part of and they’ve been a lot of fun.
Nathan: So, the reason that, you know, we connected…well, one of your co-authors contacted me and said that you guys have been traveling around, you’ve just released a book. And also the fact that you’ve heard of 20,000 pitches. You’ve been an entrepreneur longer than I’ve been alive. So, you’re a veteran, you’ve achieved mastery. So, first of all, can you tell us a little bit about your book? And I’d love to delve deep into pitches, what do you look for? But let’s talk about your book first.
Brad: So the book is a book called “Startup Opportunities: Know When to Quit Your Day Job” is the subtitle.I had six books I’ve written. So, I’ve been, you know, I would say practicing and continue to practice writing good books. I did it with a fellow named Sean Wise who’s a professor at Ryerson in Toronto. And we were really trying to answer the question, is this idea any good? Recognizing that the question itself is not the fundamental question. So, we try to write a book that is the book you read before you read a book like The Lean Startup by Eric Ries or any of the books by Steve Blank. We’re trying to create some context for somebody who is thinking about creating a new company as to what kinds of different things they should be thinking about in terms of organizing the opportunity and deciding whether they should go all in on the opportunity.
Nathan: I see. And that’s a really good problem to tackle for aspiring and novice entrepreneurs or someone that’s just about to start their company or wanting to start something. You know, that’s actually a question we get a lot at Foundrs. It’s like, “I want to start a business. I don’t know where to start. I don’t think I can come up with a good enough idea. How do I know if my idea is valid?” So, you know, what are your thoughts, like, what do you say to someone asking that question?
Brad: I try very quickly to make sure that the person understands that it’s not about the idea, but it’s about the execution of the idea. So, you know, in a lot of ways idea at best is just price of admission. And the key thing for somebody who is starting to work on something is to make sure that they’re really obsessed about the idea, to make sure that it’s something they care about, to make sure that, you know, they’re focusing on building a product and creating a product that matters not just to them, but also to prospective customers. It’s about building a team that has diverse set of skills so that as you’re starting out, if you have some strengths but some, you know, everybody has strengths and weaknesses. You have some areas you know nothing about, you actively build a founding team that’s more than just you in the context of trying to do it. Then we will go through a bunch of other things as well in terms of, you know, how to think about the market that you’re going after, how to think about incumbents that presumably you want to disrupt with your new business. It gives some advice in the book about how to think about investors and how investors think about new opportunities and new businesses, and what makes them interesting or not interesting to a potential investor.
Nathan: And how do you know, because, you know, you’ve received…you’ve done like, I’ve heard of a 20,000 pitches. How do you know if an idea or, like, what do you look for when you’re investing in an entrepreneur or a company?
Brad: Yeah. So, the question of how do I know if an idea is any good or not I can’t answer because I have no clue. But the second part of the question is quite interesting which is, what do we look for? And this is really important for every entrepreneur to understand, every founder to understand, which is that individual investors are different. I like to talk about VCs as being like Dungeons and Dragons characters. Like some are elves and some are wizards, and some are mages, and some are orcs, some are dwarves, and some are trolls. I mean, they’re all different. And the mistake is to think of an investor as a single archetype, a single thing. So, it’s key to understand what your investor is interested in, what your investor wants to invest in and participate in. And if you reflect that back on me personally, there’s really a handful of things. My partners and I at Foundry have a set of filters that we use to basically say no to almost everything in 60 seconds, because we don’t wanna waste the founder’s time on something that we’re unlikely to invest in. So, those filters include our themes, which are the areas that we invest in at Foundry. And if people are interested in that, if you go to foundrygroup.com/themes, you can see all the different themes we invest in.
We’re early stage investors, so if you’ve raised more than $3 million you’re too late for us. And we only invest in companies in the U.S. So, if you get through those three filters then we’re focused on three things. The first is, do we have affinity for the idea or the product that you’re creating? We don’t have to be users, we don’t have to, you know, live with it every day, but we have to have affinity for it, it has to be interesting to us. Second, are you as a founder and your founding team obsessed about your product? And if you’re not obsessed about your product we’re not gonna be interested. And it’s very different than being passionate about your product, it’s very easy for people to talk about how passionate they are about things. It’s very different to be obsessed and in my lingo, there’s ways to be healthily obsessed. And then the last is, do the founders wanna be partners with us for the long term as much as we wanna be partners with them? So, we really view it as a two-way relationship. If, you know, they just look at us as money and don’t really care about that long-term relationship, it’s probably not gonna be a fit with us, and vice versa. If, for some reason, we don’t feel excited about this long-term relationship that we’re gonna have to develop with this founder, that’s not gonna be interesting to us either.
Nathan: Okay, interesting. You mentioned obsessed versus passionate, can you delve a little deeper on that? Because, you know, I think if you wanna build a successful business it has to be an obsession. If you wanna build like an eight-figure business, you know, even a seven-figure business, it has to be some sort of obsession. You know, how can you make that a healthy obsession and what is the difference between obsessed versus passionate?
Brad: I’ll start with the difference. “Hey man, I’m super passionate about being on your podcast. You wouldn’t believe how passionate I am to be talking to you right now.” It’s enthusiast, it’s excitement. And I actually think passion belongs in the bedroom, like… And it’s good to be enthusiastic about what you’re working on but that’s not a sufficient condition, that’s just, you know, you’d hope that everybody’s enthusiastic about what they’re working on. Obsession is that you believe you are placed on this planet to build this product or to solve this problem. This is the thing you most want to do. It’s the thing that you wake up thinking about. It’s the thing you can’t quit, you just have to keep after it. And that’s what obsession is. Unhealthy obsession is when that gets in the way of being a human being and existing in, you know, on this planet with other humans. And healthy obsession is when that drives you but you recognize that to be able to be driven over a long period of time, you actually do need to have a life and you need to have an ability to engage deeply in what you’re doing but also separate from it, and get some rest and take care of yourself as well.
Nathan: You know, there would be a lot of entrepreneurs listening to this and that would relate to them. And I think a struggle would be, you know, how do you separate yourself from, you know, your daily life if it is an obsession. Like, that’s something I actually even struggle with right now, Brad, like, I probably should be going to the gym, you know, but I just…I put it off because, I don’t know, I just do because, you know, the company and Foundr means so much more. And, you know, what advice would you have around that, man?
Brad: Well, you know, that’s less of what’s the right thing to do and more about, are you investing in yourself for the long term so that you can be as maximally effective as possible, you know, in the pursuit of your business. So, for example, if you never slept ever, that would work for about, I don’t know, a couple of days. And at the end of a couple of days, you would be so trashed that you would be completely ineffective at whatever you were doing. It wouldn’t matter how much time you spent on it, you would be useless. And if you continue to not sleep, at some point, you would probably fall asleep anyway. And it probably would take you a long time longer than it would be if you had worked on a more measured schedule and had at least gotten a little bit of sleep each night to recover and sort of in the end, the productivity that you accomplished in that period of no sleep is questionable, whether it was better than if you had, you know, measured things out over time.
There are moments in time in the life of your company where you have a deadline and you’re gonna have to get something done by the deadline and not be able to sleep, and that’s okay. But it’s not okay if you manage your whole existence around your business like that. And if you take it to another level, you think about your life, right? You got to eat, you got to go to the bathroom, you got to sleep. You have control over how healthy you are and what the energy dynamics around you are for both your physical health and your mental health. And if you choose not to take care of that, that’s a choice you’re making. It’s an illusion for most people if they think that ignoring those things can actually make them more productive over a long period of time. So the challenge is really to view it with a combination of the short term, what do I gotta get done right now, and the long-term arc of how can I sustain this activity that I’m doing over a long period of time.
Nathan: You know, that’s a great answer. I’m curious, have you ever experienced burnout?
Brad: Yes, I’ve experienced intense burnout. I’ve also been depressed several times and been very public about that especially most recently. And I had a six month depressive period for the first six months of 2013, that was driven by a number of things including physiological exhaustion and physical exhaustion, and then boredom with an aspect of how I was thinking about what I was doing and the work that I was doing. You know, reflecting on that period, that six month period where I was depressed, where I’ll use a more loaded word than burnout. I think a lot of people talk about being burned out when they’re actually depressed. You know, when you’re in that it’s very hard to figure out what to do other than tactical things to take care of yourself and to get back to a better head space. When I reflected on it, you know, I realized a lot of the underlying reasons for why I ended up being depressed and made some changes to the way I was working and the way I was living my life. So that I wouldn’t be as susceptible to that particular set of stressors again, presumably that would lead to another depression.
Nathan: Thank you for sharing that with us. Like, can you tell us, like, what things you’d recommend entrepreneurs to do because it is gotten like a taboo kind of topic that, you know, a lot of entrepreneurs go through that they don’t actually often come out about. And that’s around, you know, because you put so much hard work into your company, it has to be an obsession, you work so hard and it’s so hard to have that. You know, like, you describe, like, you know, having a little bit of balance and then yeah, you put like so much emphasis on your company and it can be such a…it’s such a stressful one, all these things like… And then, you know, the media I guess glamorizes the life of an entrepreneur and it looks easy and then, yeah, like, what’s your take on that?
Brad: Anyone that believes the bullshit of the media and the glamorous life of an entrepreneur is just wrong, right? So, number one, being an entrepreneur is not glamorous. It’s awesomely hard work. If your goal is fame and glamour, there’s lots of better ways to get it. If your goal is fortune, making money, there’s probably lots of easier ways to make money. So, you know, the sort of glamorization of being an entrepreneur, I put it in the category of total bullshit. And it’s easy for the media to do it, it’s fun, everybody likes, you know, to have things that are popular and trendy. This shit is just really hard. And there’s a lot of things that are incredibly disappointing, there’s lots of moments and periods of failure. There are intense stretches of exhaustion and frustration, and that’s just the way it goes. And if you’re obsessed about this product that you wanna bring to life, this business that you wanna create, you know, you’ll get through it. And if you’re not, you won’t.
So, you know, step one is recognize that it’s just really hard fuckin’ work. And step two is to recognize that we’re all on this planet for a finite period of time and, you know, choose how you wanna spend that time.
Nathan: And, you know, do you think you can build an eight-figure business if you don’t work 80 hours a week?
Brad: Sure. I think you can create anything with focused energy and I don’t think it’s a requirement that you work a certain number of hours a week. There will be weeks where you work 80 hours. So, separate the idea of working 80 hours a week every week from you have to work 80 hours a week to be successful. In my first company, I probably worked, you know, 90 to 100 hours a week for the better part of seven years. Today, even at age 49, I still probably work 60 to 70 hours a week because I enjoy what I’m doing, and I care about what I’m doing and I want to do it well. And so the number of hours that you’re working should be correlated and linked to your obsession, focus on what you’re doing, and your belief that it’s important. And I think there’s this illusion of, “If I just work more hours, I will be successful.” I don’t think there’s any correlation between those two. You know, there are plenty of people who work 80 hours a week and don’t have success. And there are plenty of people who work 80 hours a week on things that they’re not obsessed about and, you know, they show up and they put the time in, but they don’t necessarily dig deep into what needs to happen.
The flip side of it is, you can have many stretches where you’re working, you know, 50, 60, 40 hours a week if you’re working on the right things in the context of your business. The idea that you just have to be there all the time and it has to be the only thing you have to do I think is mythology, that’s been promulgated for a long time in lots of different dimensions. I would separate this whole rant from the idea of working incredibly hard and being very, very focused on what you’re doing, right? If your idea is that you’re gonna, you know, clock in at 9:00 and clock out at 5:00, and you’re gonna work Monday to Friday, and on the weekends you’re gonna do something else, that’s not an entrepreneurial life. And if that’s what your expectations are about how you wanna live your life, no problem, but don’t expect that you’re gonna have an entrepreneurial life because that’s not how it works.
Nathan: I’m also curious like you’ve, you know, you’ve met a lot of entrepreneurs, successful ones, not successful ones. What’s the difference you think between the ones that make it and the ones that don’t? Can you tell some characteristics, some common traits?
Brad: Oh, sure. Almost all the successful ones that have plenty of failures along the way, and every great company I’ve ever been involved in has had at least one near death experience. So, you know, the sort of separation between success and failure I think is probably a false dichotomy. I think it’s easy to reflect back and say, “Wow, look at that person, you know, she’s been really successful.” And it’s relatively easy to forget all the things that she did that didn’t work. And all the down parts of the cycle where it was really, really difficult and miserable, and all the projects that had to get shut down. So, I guess I would encourage founders who are going after it for the first time to recognize that it’s gonna be not a straight path upward. And, you know, oftentimes what you read in the press or what you interpret from whatever the populous message is, there’s a pretty big disconnect between the story you hear and reality. Where the story you hear is simplified, you know, the heroes are more heroic, the goats are more goatish. You know, I wrote a blog post this morning and, you know, the public media loves rags to riches to rags to riches again stories, right? So, you end up getting these story arcs that, you know, they’re engaging but they don’t really reflect reality.
Nathan: Yeah, that’s so true. You know, I have to ask you because you’ve had so many pitches, like, can you give just like two or three paces that our audience can take away around making a good pitch, what makes a good pitch.
Brad: Well, I’ll give one that I think is the key, which is show, don’t tell. The biggest miss I think on most people when they’re pitching is they try to tell you what they’re going to do. And instead of telling me what you’re going to do, show me what you’re gonna do. And you can show me oftentimes with slides and words. But adjust the approach so that I know what you’re doing and why anyone cares, rather than understanding the mechanics of what you’re gonna create and the mechanics of how you’re gonna create it.
Nathan: And I’m curious, you know, you made a lot of investments. What’s the best investment you’ve ever made and why?
Brad: Define best investment.
Nathan: Most return.
Brad: Biggest return investment I’ve had has been Fitbit.
Nathan: And how did you find those guys? Or how did they find you?
Brad: I was introduced to them by another investor who’d done their seed round, a guy named Jeff Clavier. And Jeff introduced me to James Park, the CEO. I had just started to play around with this idea that I was calling human instrumentation and Fitbit were just shipping their first product, their first tracker. And I did a 30-minute phone call with James and I passed. And I just wasn’t…my mind wasn’t ready for what James was talking about, I wasn’t inspired by the call. I was probably busy and distracted with something else. So I passed and nine months later, Jeff again reached out to me along with another investor, John Callahan who was also part of the seed round. And I know John and Jeff well and I’ve been friends with both of them for quite some time. And this time they pushed me a lot harder. They said John was aggressive about me spending time with it, and Jeff basically said I was an idiot if I didn’t do the investment. And the end result was, this time I spent a little more time with James, although I was in Alaska so I did it at my house up there, so I did a video conference with them.
But they made incredible progress in nine months. And instead of doing a phone call, this time I did a video call and I really got much more of a sense of James. I was open with John and Jeff about why I had passed, which is I just wasn’t inspired by that first call. And they both said I just completely misread James, that he was incredibly intense, totally obsessed about this product, and he was a kind of founder I’d love working with. And there were right and I was just totally wrong, I just totally missed it on that first call. And I’m really glad they pushed me because I lead or we, Foundry led, the round after the seed round, and then we led a round after that. And, you know, the rest is history. And, you know, it’s been a very complex business growing incredibly fast. We’ve had created a market that didn’t exist before our products, and then subsequently is now a very crowded market with lots of people who are chasing after us. And it’s been a blast to me, I learned a ton from the experience. You know, I had other very fast-growing companies that I’ve been involved in before. Probably, the most recent one prior to this that was growing at a similar kind of rate was Zynga. And I was involved in Zynga ’til just before they went public, and it was by far the fastest growing company I’ve been involved in. And, you know, just the kinds of things you learn from those experiences are very, very powerful.
Nathan: You know, that’s really interesting. Look, I know we’re gonna wrap up, Brad, but just have a couple of questions around that. Like, you said that there’s a lot that you learned being around Zynga and some of the fastest growing companies you’ve been around. You know, what are some key takeaways that our audience can learn from your insight being, you know, an investor there?
Brad: Well, early in Zynga, the company was cash flow positive from almost inception or from inceptions. They never really used any investor money. And Mark Pincus, the CEO, had this notion of the size of the bets he was gonna make. And he raised money as he was generating positive cash flow because having more money in his balance sheet gave him more confidence or comfort that he can make bigger bets. Where he knew that some of the bets he was gonna make weren’t gonna work. So, one big lesson was sizing the bets for the size of the company, but making sure you have the balance sheet to support it. Another was I really created my ideal board meeting as a result of the Zynga board meetings. I’ve been to, you know, tens of thousands of board meetings at this point. And one of the books that I wrote was a book called Startup Boards for anybody that wants to dig into a sort of the view of how to be effective with your board and how to get an effective board of directors. In the case of these board meetings, we disconnected the financial reporting completely from the board meetings. So, the financial reporting would happen once a month on a regular case.
And the board meetings were almost always either one slide or one, you know, just some bullet points that Mark wrote on the whiteboard at the beginning of the meeting. And these were of the broad topics he wanted to cover. And he used his board in the board meetings as a brain trust, as a group to really dig deep on strategy and dig deep on hard issues. And he used the board members both collectively and individually on a continual basis, in a way that he is a CEO of you, they could help him. So, rather than have a board meeting where you show up and you report out to your board and they ask you a bunch of questions, and everybody turns pages on a presentation, these board meetings were really substantive around issues that made a difference to the business. So, that approach was something I learned. I had never been involved in a company that hired as quickly as Zynga did. I’ve been involved in plenty of high growth companies but we went from, I don’t know, 100 to 1,000 people in less than a year.
And, you know, that kind of growth is really hard to manage. And I think Zynga managed its headcount growth up to about 1,500 people extraordinarily well. And I think things started to go off the rails between 1,500 and 3,000 people, because all of a sudden we were hiring lots people who were not necessarily on the mission. They were people who were excited about coming to work for the super fast growing company that was on a path to go public, you know, and was exciting versus people who were coming in and really felt like the thing that the company was doing was something that was super important to them.
Nathan: You know, this is really fascinating. Look, we’ve got to wrap up, Brad. I could talk to you a day, but look, thank you so much for taking the time. Just one last piece was, where’s the best place our audience can find you?
Brad: Best place is www.feld.com on the web or @bfeld on Twitter.
Nathan: Awesome. Well, look, thank you so much for taking the time, it’s been an absolute pleasure.
Key Resources From Our Interview With Brad Feld
- Follow Brad Feld on Twitter
- Connect with Brad Feld on Linkedin
- Learn more about the Foundry Group
- Checkout Techstars
- Learn more about Brad Feld