I only have 100 decisions left to dent the universe
To put it simply, over the next 15 years, I should lead about 100 investments as a partner at First Round. These hundred partnerships will define my career. The success of the founders who choose to work with me, the adoption of the products they craft, and the impact of the companies they create represent my shot at putting a dent in the universe.
We talk a lot about the power law of returns in the startup industry, and I think the investment return data supports this reality–but, I don’t think there’s a power law distribution of ideas or of founders. And, because we invest at the seed stage, the founder and the idea is often all we have to go on. The distribution of ideas and of founders is probably more a normal bell curve with the most likely power law returns hiding in outliers on either side of the curve. Discovering the 100 best opportunities and then convincing them to work with me is the defining task of my professional life.
In some ways this framework is scary. It highlights a finite resource that is depleting. It puts the pressure to partner with the next unicorn and makes each decision feel more precious. It also brings the randomness of our industry into focus. Think about partnering with only 100 companies over 15 years relative to how many companies are founded and funded each year. Then think of how many entrepreneurs achieve earth shattering results and, for the ones that do, the infinite number of things that are both out of their control and need to go right. The statistical odds of partnering with even one are low. Scary.
In other ways having a finite time horizon is very clarifying. Accepting that I only get to form 100 more partnerships with founders helps me appreciate each one more. It motivates me to learn as much as I can as quickly as I can from the founders I work with so the 100th investment has a shot to be a 10x better decision than the 10th. Knowing that much of the ultimate outcome for any company is highly influenced by a dizzying combination of factors beyond any individual’s control forces me to evaluate my individual progress against the quality of these 100 relationships rather than the financial outcome of these 100 businesses. Improvement in the positive impact I have on founders over time will be the measure my professional life.
In the context of 100 seed stage investments, I don’t think it makes sense to focus on pure financial outcomes. The feedback loops are too long to allow for rapid improvement and, as an investor, my actions have very little influence compared to the work of the founder, their team and all the random noise/luck in the system. Having 100 decisions left forces me to focus on the things that I can control and to evaluate the quality of my process and my partnerships not “my companies.”
I can control the markets that I am interested in and how much time I spend getting smarter about them. I can control the experience that I deliver to entrepreneurs, and the way I engage with them from initial contact all the way through a partnership when one is formed. I can control the type of relationships I invest in and optimize for mutual respect and genuine affinity. I can control the tactical skills that I choose to work on and evaluate my improvement in areas like interviewing, coaching and marketing.
Strangely, taking this long view of 15 years has me focused exclusively on what I need to accomplish in the present moment. I can’t think about the hundreds of thousands of eMails, thousands of meetings and millions of opinions and actions that I need to get exactly right in the decades to come. I also can’t chase some long term measure of company success because quality in this game is dependent on so many things that are out of my control.
I am clear that my chance to dent the universe depends on 100 founders. I am certain that while I wait for them to reveal themselves, I am going to focus on the little things I can control and work as hard as I can to get the details right. Right now.