Ask Founders What They Really Need: The Quick Story Behind Clare's $2 Million Raise

Last September, I was introduced to Nicole Gibbons.  She's the founder of Clare, a modern paint brand that launched today to completely reinvent the paint shopping experience. 

She came in and shared all of the hassles that make buying paint a terrible experience--the difficulty in picking colors that actually look good with microscopic swatches, the need to go to a store and crossfit your way home with heavy paint cans, not to mention the harmful chemicals that are in so many paint brands.

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She knew all this from being an influential interior designer and detailed how she believed there was a big direct to consumer brand to be built in the space.  

Her plan was to close a bit first, first picking up $800k to start executing, and then fill out the rest.  

I asked her how far she could get with it--and which milestones she'd be able to achieve.  It only got her a handful of key features related to what she wanted for Clare.  I encouraged her to go out for the whole thing right off the bat.  

To a solo, first time, non-technical founder, asking for $1.6mm may have seemed like a lot to ask for for a Powerpoint--but it was so much better of a plan than launching something half as awesome for half the money.  Talking about a stepped raise can confuse an investor (and we are easily confused) as to what amount of money matches up with what goals--when the founder knows what they really need. 

It's so important for investors to recognize that different founders have lots of different views on how aggressive or conservative to be on a pitch--but underlying that sales strategy is a *real* plan that the founder knows they could succeed with if they could be successful with fundraising.  As an investor, getting at that without knocking the founder for their interpretation of what you want to here is the key to getting some under the radar deals that others might have overlooked.

Well, not only did she raise that money for a full launch, but she was *oversubscribed* and picked up some amazing additional investors like Imaginary, First Round, Able and Bullish, as well as the founders of Casper and Harry's.   

I'm excited to support Nicole, one of the most inspiring and dynamic founders I've met, and to be along for what promises to be an exciting and impactful brand in a huge space.  

How the Need for Growth Failed Our Social Network Experience

Just about 10 years ago, I tried hard to keep my Twitter follows to a manageable amount--to people I actually cared about following and either already knew or wanted to get to know in person.

5000+ follows later and I've failed miserably.  

It wasn't my fault, though--because the app itself, like all social networks, succeed around growth.  Every single feature is optimized around growing the userbase and increasing everyone's follower count, which means everyone's following count.  Networks are always telling you who from your contacts has joined and recommends you follow new accounts, even though you still only have two eyeballs in your head and 24 hours in the day.  The end result is that each person's connection to you in an ever increasingly connected network becomes more and more tenuous. 

A few years ago, I went to breakfast with Andy Weissman and he lamented Twitter's "Garyvee feature"--the turning off of the visibility of @ replies to people who weren't following the person you were messaging.  Basically, Gary Vaynerchuk would use the @ feature to message a ton of people at a time as he was scaling his following to try and scale 1:1 conversation as much as possible.  It wasn't particularly scalable as following him became a worse experience.  It was a firehose of listening to him not talk to you and just give shoutouts and the like.  However, when Twitter turned this off, while your stream became easier to consume (and easier for businesses or celebrities to interact with people en masse), it came at the expense of authentic discovery.  You never stumbled into half of an interesting conversation with someone you might want to follow based on the topic.  

There was a time when I thought Meetup Everywhere was going to be the next big thing--a social network that was dedicated to connecting people in real life was going to create a lightweight framework for people to localize the social network experience.  If groups got too big, it would be easy to enable splintering.  I don't know why it didn't take, but I've always lamented the failure of the web to create "neighborhoods" at scale that brought communities together (as opposed to just broadcasting to them like Patch).  

For a brief moment, tech was able to make my world feel smaller and more accessible, but now it doesn't feel that way anymore--and I have a theory that I'm part of a very narrow generation that even cares or notices.

There's an age group where you are old enough not to have Facebook in college, but young enough to be an avid user of tech--and to have used the internet to meet new people, probably through AOL or other forms of chat.  When we used dating apps, they weren't based around double opt-ins.  You regularly heard from strangers.  Ok, so it wasn't a *great* experience, but occasionally you'd find diamonds in the rough--and you had to take some risk around reaching out and getting rejected. 

Roughly speaking, this group probably peaks around 35-43.

Not only did we straddle a unique time in tech, but we also came at the tail end of real life neighborhoods as well.  When I was growing up, I would eat lunch and then run outside to play with my friends.  There wouldn't be any coordination between parents to make this happen.  I would just go ring doorbells to see who could come outside if they weren't already out.  It was just assumed that *someone* we knew--a parent or next door neighbor--would be on our street somewhere to keep an eye out.  

This experience made our local world feel very safe and accessible--where we regularly interacted with new people and made decisions for ourselves on who was safe and fun to play with.  We had positive experiences of meeting new kids and becoming friends all on our own, outside the confines of institutions like schools, camps, or parent organized play groups.  

Now, walking these same streets leaves you with a sense that someone stole all the children.  I'm not sure whether it's screen time or parental fear of abduction, but the kids seem to have disappeared from the street.  

It is this same age group that sought this out online--this same group that used Twitter to meet people and Foursquare to find where their friends were hanging out--in order to recreate the neighborhoods experience.  They built Barcamps and unconferences--semi-permeable spaces that got enough scale, but not too much scale, to facilitate people discovery and high quality conversation. 

I don't think we'll see a new form of social media ever attempt to make this happen again--because I don't think the builders of the next generation of apps ever really had this experience to know that it is missing.  Those that experienced it are now at a different point in their life where they're building families or at least coupled off and not really in network expansion mode.

These days, people gather to play a sport, to protest, to play games online, or to watch something--mostly with people they know are already like minded--and maybe that's fine, albeit a little one-dimensional, but sometimes it's nice just to gather in manageable numbers with people you aren't sure agree with you on everything, just for the sake of gathering. 

Can someone build that in a way that isn't contrived or creepy?

Why VC Feedback is Often Bad Data

I've seen this so many times over:

A founder pitches a VC, or several of them, and then they come back from that process with all sorts of new strategy goals or worries that they need to be doing something differently.  Nine times out of ten, if you're pitching more than one VC, the advice seems to conflict with itself, and the founder winds up playing Wack-a-Mole trying to figure out what to do next.  

What's going on??

The fundraising process is not intended to be a feedback process.  If it was, you'd run it very differently.  Founders would ask for very specific pieces of advice on topics they thought that particular investor would have some insight into.  Instead they often just dump everything they they know about their company on the VC's lap and ask for any kind of feedback whatsoever, leading to really messy data.  

So why is this feedback seemingly all over the board?

First, let's be clear--when you walk out of a VCs office and don't get a term sheet in the next week or at least another meeting with the partners necessary to make a decision, it's a pass.  Lack of a yes is a no--so anything that firm tells you should be taken with a grain of salt.  They don't want to invest in your company.  Any advice they have for you is going to be a bit broken.  It's a bit like if someone doesn't like ice cream and then says your favorite ice cream is too sweet.  First off, you need to drop that friend like a ton of bricks, and second, making that ice cream less sweet isn't a good idea.  They don't like ice cream--so no amount of sweetness reduction is going to make them happy.  That's not helpful feedback.

Second, the feedback is incomplete.  Since you didn't ask the investor to write you a complete strategy guide, all they're doing is giving you *one* of the reasons they passed.  There could be others--so many others that following up on just that one protest might still not lead you anywhere.  Just the other day, I was talking to a founder who was told by a Series A fund that they normally invest in companies around $125k/month in MRR.  She assumed that by getting to $150k/month, they'd automatically invest.  What that investor left out was that before they were going to write an $8mm check, they'd also want to see a marketing funnel established to get leads, an actively growing sales team that showed that the process could be replicated, and growing revenues within each customer.  Otherwise, one awesome enterprise salesperson in a market where contracts were big and good product would be enough--but no one is going to write a check that big to a virtual team of one business person and some devs.  

Lastly, the most important piece of feedback--the team feedback--almost never makes its way back to the founder.  Sometimes, VCs will walk out of a meeting thinking, "Ok there's no way I'm ever going to fund THAT guy," so they just make something up or make something small into something bigger.  They'll never tell you to your face that you're pretty much unbackable, so focusing on any other advice you got from them isn't going to fix the issue.

How do you solve this?

We're working on something cool at Brooklyn Bridge Ventures to address some of these questions.  :)

Give Me Discipline Over Talent Everyday

Recently, I helped one of my portfolio companies make a VP of Marketing hire.  The founder asked me early in the process if I thought the candidate was good.  

Having not worked with her previously, I didn't know how talented she was firsthand, but what I did have confidence in was that her strategy would be well thought out, and if it wasn't working, she'd analyze why, proactively address it, and describe what steps she would take to find a solution.  She struck me as having an disciplined approach to her job, and over time I think discipline wins over raw talent everyday.

Discipline comes with a reasoned approach--a way of breaking down any situation into component parts, addressing each carefully, and sometimes finding help to address the ones you're not able to handle.  Startup life comes with a ton of variables and if you're not trying to bring order to the chaos, you won't be able to scale your effort as things get bigger.

Discipline also helps take responsibility off of a founder's plate--and that's something every founder needs and welcomes.  When you build in methodologies to your job, the founder that you work for can trust your approach in future situations, and they can make like for like comparisons in your performance over time--essential to oversight and process improvement.

Raw talent, on the other hand, has a limited shelf life.  Things change very quickly--so while you might shine in a particular situation, that approach might not work in your next job.  Someone who is great at writing blog posts might struggle in the shorter form media that has become more popular.  A community manager of fans and users might not have the same knack for inspiring user-owners who are participants in a token-based ecosystem where they benefit from improvements in a system in which they are also stakeholders.  A recruiter who is just really good with software developers might not be able to switch to sales recruiting when needed if they don't come with a disciplined approach that can be tweaked for a new situation.  

Lastly, talent without explanation of approach and discipline can actually just turn out to be luck.  When you hire the person that took X company to success, you might find out that if they can't tell you what it was that worked and why, and the logic of how they approached things when they first started, its possible that the company succeeded in spite of them.  Perhaps they weren't really so much the driver versus just coming along for the ride.  

How to Build a Relationship with a Venture Capital Investor

 
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Building a relationship with an investor, someone who is drowning in pitches and requests for their time, can be difficult.  How do you cut through the noise?  In this video, I share three ideas for kicking off a relationship with an investor you don't know.