Network and reputation
CEO, Startup Whisperer, Lacrosse Coach
Reputation is everything in Silicon Valley.
Continuity to a relationship is important. Never reach out when you only need favors.
Great investors and management increase likelihood of success, but they are not the key factors.
Lesson: Zero to IPO with George Northup
Step #7 Cultivating: Network and reputation
Reputation is everything in Silicon Valley. And so over your career, the way you comport yourself, and the integrity of your actions, and also the results, are really, really important. And the reason is because you're bound to run into the same people again and again. And so we've all heard of certain successful executives who, at different points, have been very rational or ruthless or harsh or perhaps incorrect politically or any number of things, and these things will come back to haunt you. And I think one of my lessons have been stick to results and also have integrity and these things will bear out in the end.
The whole concept of networking is you run out to events and you start exchanging business cards with everybody and that becomes basically the platform for your network. There are any number of networks and demo days and there are opportunities to drink Red Bull and Vodka and things like that. So there are any number of events.
And so in my own observation over the years, the majority of my meaningful relationships have come through one-on-one encounters or one on one introductions. And they might have been people that I worked with engineers in my company. So there are people that I worked with maybe 15 or 20 years ago. And so for me, as opposed to the mass events, what's been more meaningful and lasting is these one-on-one relationships or introductions one on one by a friend or something like that.
The other thing I would say about relationships is two very, very important things, and I think these are really key points, is that we all have acquaintances. And the only time one hears from them is if they need something. And so you may not hear from them for ten years and then all of a sudden you'll hear, "I need this favor and I need it immediately," or "I want you to introduce me to this person."
So there are two things about human nature. One is you begin to think that you're only going to hear from this person when they need something. And the other thing is that there's no continuity to the relationship so that you're not as receptive to responding to that request. And I think that's a bad model to use which is you'll hear from me when I need you and nothing else after that.
Typically those people, also, if anyone's had this experience, when you reach out to that person, they typically never respond to you when you need something. So I think that's a bad model which is kind of I'm going to call on my base when I need them for something. And if I don't need something, I'm going to blow them off.
The other model which I've adopted is kind of the pay-it-forward model. I typically try to respond to any request from anybody for any need, and within certain judgement criteria and willing to do the introductions. And my goal is to give into the community as much as possible and to do it on a continuous basis. It doesn't have to be overdone, but just on a constant basis.
And the reason is you have a means of staying in touch with people over a longer period of time. They know that when they hear from you it's not because they want something. Also, there's a human nature to this which is they view you as someone who's been helpful to them in the past. And so what this means is that in the long term, if and when you ever needed help, they would likely be there for you.
I think there are two models in the Valley right now, one which is I will take everything I get for free from somebody and then discard that relationship. And once I don't need it, I'll reactivate it if I need something. The other model, which I think a lot of people use, is pay it forward and let's help the karma of everything.
When I look at potential endeavors and think about whether this is something that I'd want to take on and pursue, I look at a number of things. One is I look at the sector itself and this is the sector that I think is going to be relevant in the future or is very relevant now.
So an example of that is in the mid-90s when I went to this Internet banking company that had been around for six years and had no revenues and essentially no money, some people thought I was crazy. I moved to Washington, D.C. to go do that company. But in the mid-90s it was pretty clear to me that Internet banking was going to be something of the future. And so I believed in that. So I think the sector is one area that I really look at.
I think the other thing is the founders and the people in the company and lastly the investors. I think the founders give you a feel for the quality of the organization. And this could be good or bad, depending on who they are. And when one looks at their track record, I think some level of their education is important to look at. And I hate to say that may be the brand of the school or the types of things they have studied, whether it be technical or not. So I think those are features.
In terms of the investors, I think that one caveat I'll make is that a good company has to stand on its own. So it doesn't matter who's invested in it. However, the quality investors I think provides a corroboration of whether or not it's likely been vetted to some degree and has a higher probability for success.
At an early point in my career, I viewed that if a company had a certain pedigree in terms of investors and maybe founders/management, there's a guaranteed success. Now over the years I've decided that I'm wrong and that a company really has to stand on its own in terms of what problems it's solving, what market, what technology, whatever, and that these added factors increase the likelihood of success. But they of themselves are not the key factors.