The NYC startup community maintains a positive, supportive atmosphere. We celebrate a strong effort.
However, that often makes it hard to tell who actually excels at their job and who just mails it in or got lucky. This goes for founders, employees and investors alike.
I was just noticing that a professional acquaintance of mine just changed jobs for the third time in two years--going from startup to startup to startup without, ostensibly, accomplishing much at any of the companies. They certainly didn't become huge successes. Yet, for some reason, everybody seems to think he's really good at what he does. Why?
The same goes for investors. There are a few obvious investors with great track records of repeat success, but when's the last time you really tried to value an investor's portfolio. That VC speaking on the panel, are the deals you know about really doing that well? They raised more money, but when? How long ago? At what valuation? Are they making real revenue? Are the exit prospects for the company any good?
Even if their record looks good because of that deal, was it really their deal? Did they lead it? Will the entrepreneur count that investor among their most helpful? Would the entrepreneur enthusiastically include them in the syndicate of their next venture?
There are a lot of founders with questionable records, too. If someone bought a company for $50mm after a year, before it became a business with actual revenue, what are you really crediting the entrepreneur with? Could you really call what they did building a business?
There's really no substitute for research. If you're going to pick an investor, hire someone or invest in a founder, you need to figure out what they specifically did to create value--and how what they did was something unique to them. Could anyone have done what they did, or do they have their own special way of creating magic?
We need to raise our expectation level--especially in the media, on panels, and in our everyday discussion. Let's be a little more discerning when we're dishing out praise. Let's figure out who actually went above and beyond, versus getting lucky riding a wave.