What I’ve Learned from Fred Wilson

Last week Fred Wilson and I sat down in Santa Monica for an hour+ discussion with the video cameras rolling.

One of the questions we discussed was, “How much capital should a startup raise?” Fred & I are both in agreement that there is a tension between capital constraints and creativity. In his words,

[in some instances] “because lots of capital is available, the company takes on the capital and that ends up resulting in no constraints on decision making and so the company decides to do five things in stead of just one.”

Here is a three-minute video with Fred answering this question. I promise it’s worth watching.

We also spoke about what it takes to be an effective board member. On the one hand, I often find that some board members are seemingly reading the board materials on the fly and don’t have a firm grasp of the business fundamentals. On the other hand some board members like to tinker in the running of the business.

Again, Fred,

“What I’ve learned is that if you frame the problem for the team in a way that it becomes their idea as opposed to you telling them them to do it – that’s the move… effective board members help the management team decide to make the decisions that are right decisions instead of just telling them that those are the right decisions.”

This clip is just 2 minutes:

I agree. I’d add that often as board members we know contextually what the likely right answer is from years of experience and seeing similar scenarios. But unless management buys into your premise you can’t offer effective input. So part of playing an effective coach is helping the team to see the answer for themselves.

The final clip is of Fred & I talking about whether “the best product wins” and my assertion that the bias in today’s Silicon Valley dominated tech world there is probably too much emphasis on tech – at the expense of how to sell, implement and service customers. While this clip is only 1-minute long we talk about it more in the full interview.

My goal in the interview overall was to capture more of the personal side of Fred since so much of his investment thesis and portfolio work already comes out in his blog. We talk a lot about his schooling, his early jobs as a developer, and then as a VC. We also talk about his decision to spend winters in Los Angeles.

Fred has of course been a public mentor to us all with his market-defining terminology that he popularized, including “freemium” and “mobile first.” He has publicly espoused building products for “non logged in users” and has benefitted greatly from his thesis of large networks of socially connected and like-minded individuals.

Let’s see: Twitter, Tumblr, Etsy, KickStarter … not bad, hey? Not to mention USV’s investments in MongoDB (10Gen), Lending Club and a host of others. We talked in the …