Reputation Matters

Reputation matters. You know that and so do I. But it’s easy to forget that you’re either building or destroying that reputation in every interaction you have. Not to mention widespread reputation travels in our ridiculously connected world.

I was reminded (again) of this today from an exchange on our CEO email list (which includes about 75 CEOs of Foundry portfolio companies). The email read:

To: FoundryExec
From: [CEO of Foundry portfolio company}
Subject: Have you done business with anyone on this list

I’m on my way back from [an] investor conference where we met a bunch of VC & Private Equity guys.

The event was really useful. Not only did I discover a whole bunch of folks wanted to speak with us about investing, but I feel like I’ve been through an intensive two day course on Series B/C financings. Plus, it was useful to network with a bunch of CEOs and I think we made a few sales in the process 🙂

If any of you have ever had any dealings with the firms and/or individuals below I’d appreciate your feedback/tips.

[this was followed by a list of 20 or so firms and individuals]

The response was close to instantaneous – probably 20 messages exchanged in the course of an hour or so listing out people’s experience with various firms. Responses ranged from positive: “Good guys, and super smart.  Happy to take meetings.” and “He was nice, quick to provide feedback, clearly smart.”; to practical: “They want $5m run rate before investing” and ” Very good investors but super picky. Min check size $25M”; to negative: “The most negative experience I’ve had with a VC. …the partner was totally disengaged, dismissive, and rude.” and “Generic VC.  Another friend has him as main investor and every board meeting is “Why can’t you grow faster.”; and “He came late to the meeting. Came off as arrogant and bored”

There were tons of other comments, but you get the drift. The point is that people talk (in this case the topic was VCs but you could imagine the same thread on larger technology company partnerships or the best tools for managing metrics across your business, etc.). And while there are always two sides to a story (and certainly everyone can have an off day) it’s important to remember that with every interaction you’re either building or harming your reputation. I forget this plenty. And this morning was a reminder of why I shouldn’t…

  • heyehd

    Quote from a good friend: “It really IS a small and incestuous world”.

  • This makes me think about an idea that’s been in the back of my mind for awhile — a private way to leave feedback on past business arrangements that gives you full control of which people/groups can access that. If someone I know has engaged in a deep business arrangement or been a co-founder with person X (who I am thinking about partnering with), what was their feedback? Were they good to work with? Responsive?

    In perfect world, that entrepreneur would have a really quick way to search for those names – and see what all the partners at Foundry thought about them. A “review”. Of course, you probably wouldn’t want the world to know your private thoughts on firm or person X. But you would allow any founders in the TechStars network to access that knowledge without asking.

    Maybe Angel List is working on this already.

    But to your point — yes, reputation absolutely matters.

    • TheFunded does some of this. Are you familiar with it?

      • I am not. Just looked at their home page briefly – the value prop on their home page is pretty unclear. In the few seconds I looked at it, I don’t really know what the site is even about. Happy to get on the phone and discuss design/conversion with them if they want (and happen to be reading this). The site needs help in both areas.

        I think the scenario is just as interesting from a BD perspective (i did bd at zillow) as it is for venture capital. When thinking about any potential partner — companies would love to have first hand insight as to what the experience that companies past partners had interacting and executing with them. I could have left some pretty helpful reviews from my partnership discussions that future partners of company x, y, and z would love to see to get a better picture of whether or not that company is one they want to strike a deal with.

        This seems like an idea I should clarify a bit, and post on my random outlet for business ideas (I have many that I will never build on my own, so my friend and i started a blog to post them on).

  • aboer

    Interesting that The Funded exists–it is so personal and puts VC’s under an unusual amount of scrutiny. How do you feel about it? I would hate that feeling, in an industry where you are disappointing 98% of your customers. I have also often wondered why that reputation model succeeds for VC and retail merchants (Yelp) but hasn’t seemed to take off for doctors, real estate agents, and other high value categories.

    Personally, I wish someone would build a reputation system for referees of kids sports.

    • the challenge with these systems is that they generally skew negative, potentially give too much weight to the minority opinion and can be gamed. ideally you get feedback from a broad set of people who have had interaction with the firm/person in question and through that get a good, balanced picture of what they’re like. in practice people who have a negative experience tend to post but less so people who have had a positive experience (foundry has a good reputation on the funded so apparently people we work with have taken the time to go on the site to post about us – we’ve never asked anyone to do so on our behalf, however).

      there’s no hope for the refs of kids sports! 😉