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I’m getting sick of the bullshit

I love the start-up world. I love working with founders and young companies. I love the excitement of working on business ideas that are new and different. I love seeing the success that often comes from this hard work. I’ve never before in my professional life seen a time of such innovation and creativity. At Foundry we see more business plans now than we ever have. And what’s more, more of those business plans are really interesting (and fundable).

It goes without saying that I love the business of venture capital. I love helping entrepreneurs work on their ideas. And I love helping companies figure out how to become as successful as possible. I love the challenge of trying to figure out the next great investment and the energy that comes from working with amazing and creative people.

But I’m worried and I wanted to get it out there.

I’m worried that in all the hype, in all the “we launched our company” events, and “we changed our name again” parties, and “we redid our website – come celebrate!” shindigs, and the SXSW parties, and the hoodies, and everyone who is “killing it!”, that we’re losing sight a bit of the really hard work that is creating and building a business.

I’m worried that in offering term sheets after a single 60 minute meeting, and in pricing early stage deals like they were already late stage successes and most egregiously by constantly running around self promoting and self aggrandizing, VCs are falling prey to a cult of personality about themselves and forgetting that their jobs are to help companies be successful. And as far as I can tell, very few seem to believe what I hold as a fundamental tenet of the venture industry, which is that entrepreneurs come first, not VCs.

Don’t get me wrong. I enjoy a good party (not to mention a good hoodie!). And I recognize the reasons to celebrate important company milestones and in going to industry events like CES and SXSW. And in bringing a bunch of customers, prospects and partners together at a social event. But I feel like I’m hearing less of “did you see XYX company’s great new product” and more “are you going to so and so’s party at ad:tech:”. I’m not exaggerating when I tell you that I’ve received 30 invites to SXSW parties but not a single invite to a panel session at the conference. And when someone tells me that someone is “killing it” (a phrase I think I hear 10 times a day these days), more often than not they mean “doing the job they were hired for”.

I hear more and more stories about companies making a pitch to a VC and having an offer before they walk out of the room (entrepreneurs: do you really want to work with someone who puts so little thought into their investment process that they would do this?). And the way VCs talk about the companies they work with has clearly shifted to be substantially more VC centric (lots of use of “I” and taking credit for company success as something they themselves created rather than participated in or helped with). And, of course, much has been written about rising valuations and the potential risk this poses to particularly early stage companies. Not to mention the increasing popularity of the “party round” where many VCs participate but no one actually takes ownership (also not good for entrepreneurs, in my opinion).

And it feels like a lot of this is for external show. I’m cool; I run a shit hot start-up; I saw [insert big name technorati here] at our company party last night. I’m in such and such company with [long list of other investors] and doesn’t that make me awesome. I’m awesome I’m awesome – look at me!! And not really about building great products or great businesses.

So by all means, lets keep having fun. But let’s also remember that the goal is to build great companies. And please – my fellow venture capitalists – can we take it down a few notches and remember that our role is a supporting one. If you wanted to be the star you should have become an entrepreneur.

March 5th, 2012     Categories: Startups, Uncategorized, Venture Capital     Tags: , , ,
  • http://andybeard.eu AndyBeard

    This is the genuine Disqus account for Matt Cutts as far as I am aware
    http://disqus.com/MattCutts/ 

    The 4 current comments I believe are fake.

    • fil

      100% fake (: Ill try to find the real one.

  • http://twitter.com/geekles Shawn Hansen

    Also remember, nobody

  • James

    the problem is that then you read about a VC that invested 25 million in some bullshit, and you say that you have to play along with this shit if you want to get serious money!

  • http://twitter.com/Ovurmind Viktor Ovurmind

    The exceptional road is the one few take, the quick path into the rat race is what comes natural in the urban jungle we all live in.  If exceptional people enter our lives it is a real blessing, but if the big ticket item is survival, the rat race is the reality.  I can’t imagine an economic system that isn’t built largely on BS but I do imagine working in an economic system without it, and that’s because I am a dreamer.  Startups can begin with a dreamer, but most wake up, hold their noses and engage the BS. If one can hold onto their idealism through the rites of BS, I say kudos to those remaining few.

    [v.o.M.]

  • http://www.evbart.com evbart

    Great post, thanks for saying what lots of people are thinking.

    Behind all the hype is all the hard work that goes into making a success, and I’m afraid that those efforts will won’t be seen.  To a certain extent it sets the wrong example for all the new up-and-coming entrepreneurs to chase the wrong thing…

  • http://www.bluegurus.com/ MicJohnson

    GREAT article. There are tons of people that are full of shit….or bullshit as it were. Nice to see at least one person calling them out.

  • http://www.5o9inc.com/ Peter Cranstone

    Well for one i’d like to meet some of these VC’s who are handing out term sheets like confetti. In 22 years I’ve never met one yet (and I’ve done the road shows). In fact what i see are the same hard questions and then followed by “silence” (which means thanks for the meeting but we’re not interested).

    I’ve never seen a more difficult environment to build a real business. And let me define what a real business is – “measurable, sustainable, profitable revenue from volume”. You have to solve a real problem, you will be early to the market (because being late doesn’t cut it) and you will be rejected because you have no real customers.

    Printing a T-shirt is easy, profitable revenue from volume – not so much. 

  • http://www.moolamo.com/ Brad

    I agree completely with the sentiment, but have to say that out here in the Hinterland(Miami or not Silicon Valley, Austin, or Boston), we would kill for an investor able to make a decision in 60 minutes. That’s not to say we wouldn’t have concerns, but we don’t have parties here with fishbowls of cash. 

  • Damon LaCaille

    I think all entrepreneurs need to read ‘The Lean Startup’ first, then ‘Reworked’. The second is a little heavy on attitude, the first is a little too focused on their main case study (himself at IMVU), but both set the right mentality for using common sense, hard work, and intelligence to put your company in the best position to succeed.

    • http://www.sethlevine.com sethlevine

      I haven’t read “Reworked” but did read “The Lean Startup” and really liked it. And being lean drives a lot of good behavior – which I guess was the point Eric was making in his book!

  • DanRowinski

    You know, I think a lot of this is San Francisco-based hype and hysteria. Living in Boston and talking and covering the startups here for RWW, I know that the VCs here (and to a certain extent in NYC except a lot of NYC VC’s money actually resides in Boston) are more careful of who and how they give venture money to. It is about team, product, seed rounds and development. Boston VCs are more pragmatic about how they dole out funding. For instance, we have seen a lot of seed rounds recently but only a select few that make it to the series C and B levels. It seems sometimes that San Francisco A rounds look a lot like Boston C rounds. Boston startups love a good party but there is not much in the ways of “we redid our website – come celebrate!” Most of the time the parties are meetups and hackathons with the occasional neurotic party for the community (see: Tech Prom Boston last October). 

    It is a different environment here. The Boston based tech scene is close knit and helpful of the entire ecosystem. It is an odd phenomenon actually and I have been studying its evolution for some time now. The goal here is to build great companies and everybody is onboard from the venture capitalists to the venture bankers, mentors, accelerators, startups and established companies. Worth a closer look than a lot of people out West give it credence. 

    • http://linzlovesyou.com Lindsay Goldner

      Closeknit, yes. But read my comment above- that whole party scene I saw at startups? It was at the top tech startups in Boston last year. Love them, but definitely gets a bit fratty in addition to the occasional RubyRiot/Tech Prom events.

  • JohnFurrier

    So freaking great post.    Not one post about my investment vehicle out there…so damn good.  The best investor get positions in markets early and do solid transactions for PROFIT.  Yes I said it.  That being said… lots of this grandstanding is for promotional lead gen so those entrepreneurs who think that they just got mega funded just got used but “snake oil” VCs.  Lots of my friends are VCs and very successful and most don’t even know their name. 

    Great investors have vision and financial responsibility not awareness of the trends and write a blog to do link bait.. or bait and switch.

    I feel sorry for those entrpreneurs being used as “show horses” for attention starved VCs.  Just look and you can see them as clear as day.

    Nice guts Seth to write this post!!

  • http://twitter.com/dominele Larry Domine

    Thanks for sharing this…..your observations remind me of what lead to the ‘dotcom bust’. 

    During that time I said the same things with a lot of money being passed around and was concerned, and then it happened. 

    Social media and mobile apps are hot now, but pay attention to your customers, employees, product/service…..build something small to something big….or simply build what you have to last…..

  • http://twitter.com/h8thepain h8thepain

    This is exactly why I haven’t brought my product to a VC. While I don’t have the funds to completely get it off the ground, I don’t want anyone to feel entitled to say, “I did that” as if they came up with my idea/product. I don’t even want a go live party until I actually have customers on the hook. I want my product to succeed and to make a decent living off of it. Good luck to all the entrepreneurs out there! Hopefully, the sharks don’t eat you (and your product) alive when you finally get into the tank with them.

  • Elliott

    I was on the first tee going out as a single. Three guys walk up and now we have a foursome. Warming up. Stretching. The 3 guys talk and I stand off to the side. Seems that 2 of the guys are Stanford MBAs and 1 guy is a Harvard MBA. They talk amongst themselves – business talk, important talk . . . finally  time to tee off. They let me go first. I turn to the 3 of them and say, “I’ve got nothing against the Harvard MBA, he feels that he is entitled to make a living. But you Stanfrod MBAs – you feel that the world owes you a living.

    As Garrison Keillor said in his book, Pontoon, “old people don’t have answers, only stories.”

  • http://twitter.com/jrichlive Jeff Richards

    Enjoyed your post Seth.  One interesting data point – the most valuable and intriguing IPOs this year outside of Facebook will likely be WorkDay, Service-Now and Palo Alto Networks.  All three will be worth >$1B but are arguably “underhyped” and have certainly avoided many of the concepts you mention above.  You can still build a great company without the parties :)

  • narg

    In my short time here on Earth, I’ve yet to see a lot of folks that fit the mold of “Good Party Person” AND “Hard Worker”.  Just saying….

  • crosshillchris

    I absolutely agree with you, Seth. 
    This reminds me of 1999 when everyone was trying to be “e” and discussions were about the disconnect between the “new” (clicks) and “old” (bricks) economy.  By 2002, 90% of all the “e-commerce” start-ups were gone.  If I were a VC today, I’d “pivot” my investment strategy away from all the “me too” social networking based business plans and focus on defensible IP.  

    I’d look upstream to the headwaters of innovation – the technology transfer offices of our major research universities.  I would focus on developing repeatable processes to commercial the treasure trove of technologies that are gathering dust because they are immature and aren’t an obvious “home run” in their current stage of development.   

    There is huge opportunity in this space.

  • Guest

    huh? aren’t you at the epicenter of all this? Isn’t this a little like Santorum criticizing the media for talking about social issues instead of jobs?

    • Aaron

      Yeah. I every VC I know hates SXSW, but plenty of them seem to show up.

  • Ykzfcana

    Could it be to do with your other posts about who gets hired in VC? The nature of the industry seems to have changed and the $ involved is bringing in the same old wall street people from the same old 10 colleges.

  • Guntis

    It’s so damn true!

  • Me-Male

    Imagine being a 50+ co-founder in the middle of a bunch of “dick-head” tech guys who are more interested in the tech than the user experience!  When did “killing it” mean something good, or by calling something “sick”, actually means it is awesome. So I guess “dick-head” tech guy really means what a great guy you are!

  • Amlikethewind

    Thank you for writing this.  The tone of spin/hype/breathless pr out of the tech world has become annoying, if not deafening.

  • Joe Hogan

     Are you that poor of a writer that you need to put a vulgarity in your headline to attract readers?   Do you think that your parents are proud of you for using such filthy language? 

    It’s truly sad how far the world is falling in it’s respect for others and it’s need for self importance.  The WSJ / Dow  used to be such a well respected news organization.

    • http://www.sethlevine.com sethlevine

      The point of the title was to grab people’s attention (which clearly it did). You’ll have to be the judge (as will everyone else who reads my blog) about whether or note you think I’m a good writer…

  • http://twitter.com/paulcimino Paul Cimino

    I was a CEO from 95-02 and am again 09-present and it’s like deja vu all over again in terms of hype and unchecked hubris. Thanks for level setting Seth.

  • Mike

    How about starting by not going to events like SXSW to find companies?

    Every business has to do something better than the alternative and/or solve a problem of some sort.  The reality is most companies are solutions to problems that don’t exist.  But even if you happen to have a solution to a problem that does exists, the next question is can the good or service serve customers in a cost-effective way that allows the company to turn a profit?

    The reality is most viable serious start-up businesses don’t have the resources to spend traveling the country and globe just to be able to rub elbows with all the cool kids.  They are hunkered down working on building their businesses, scratching together whatever resources they can to make progress and gain traction.

    • http://www.sethlevine.com sethlevine

      It’s not that I object to companies going to SXSW. I’d just like to see less overall hype and more work. And more creative ideas – do something at SX that isn’t a party, for starters…

  • McCheeseFist

    rofl 90% of these companies are destined for the crapper…

    enjoy investing.

  • http://www.facebook.com/brandondwight Brandon Dwight

    I’m not a VC, but you could pretty much use this as a philosophy for any endeavor, be it business, athleticism, spiritualism…you name it. The moral of the message is, don’t be a poser.

  • Alejandroaugustocontreras

    So true for LATAM too.And what about some (not all) or the new kinder type of mentoring so called accelerators. They chear every graduations as mini IPO’s. Reminds me the nineties and the soooo cool First Tuesday Events. Then, once I went two the states to sell a company and as an entrepreneur my angels told me, we need a big press release folder, instead of a plan, and or executed milestones. Some time is like a déjà Vu.

  • http://twitter.com/denisehterry Denise Terry

    I love this post for its sobering wake-up call to reality for VCs and founders alike. Technorati, take heed as well – lest you only write about the new kids and hot startups ‘killing it’ while you beer goggle them. The ‘honeymoon phase’ in an early startup’s lifecycle is fleeting at best, and a deceivingly bad predictor of long-term, future company success. After the media hype and party rounds quiet down as they inevitably do, entrepreneurs (and their employees) and VCs must get back to the real and very hard work of building products and companies that customers love. Growing a business successfully year after year, long after the honeymoon is over is worth celebrating, but that’s not usually what gets celebrated these days — that’s unfortunate for the thousands of unsung heroes and heroines who are too busy working to rub elbows with you at SXSW or at that party you’re at tonight, dear reader.

    • http://www.sethlevine.com sethlevine

      this honeymoon effect is a really interesting one. we see this in boulder through hiring cycles. some company becomes the “hot” company to work for. but then the real work begins (and as you point out, it’s clearly very real work) and the luster wears off. not because the company isn’t doing well, but because it’s hard. and not new and fresh. sometimes we all act like cats, chasing the latest bright shiny object all over the place…

  • http://www.facebook.com/people/Robb-Smith/690127358 Robb Smith

    Anyone who funded and built companies from 2001-2003, and I mean really was in the hard thick of the hangover from the silliness of the late 90s, looks at the current crop of folks, and their behavior, and just wonders, could you really have forgotten that quickly? The hype, the parties and the buzz is not even remotely interesting. We have some real issues to solve and it’s going to take some grounded, serious entrepreneurial leaders to move the needle at this moment on the planet.

  • http://www.heyheyrenee.com/ Bowlhiker

    Howdy Seth,

    Here’s what I’m worried about.

    Back when I came into tech 24 years ago a kid with dropped out of high school who’s only skills were a love of code and the phone could make it. Those days are just about gone and that’s wrong.

    Now, that same kid couldn’t even get an interview, let alone a meeting at your place. No pedigree? It’s the rejection email you have saved. 

    There’s really no mentoring going on in tech now. Everyone is so selfish, all about the money. I long for the old days, when we used to share code on CompuServe. I’ll never forget the cyber person who helped me restore an NT box all via chat. Then called me to make sure I was good. He stayed up with me all night. Unbelievable experience.

    That would never happen today.

    Today it’s all about making something average at best then selling it. Cash out and start a blog.

    So how’s about you and your gang start spending some time at Denver North High School and helping out those who come from…less than ideal circumstances? 

    It’s easy for rich kids, kids in the know and kids from the right schools. How much time do you spend outside of this cushy circle? How much time do you and your crew spend evangelizing tech to kids who didn’t go to Stanford, who are having trouble paying tuition at Metro State? 

    You’re a man of who has a lot to say. What would you say to them? 

    • http://www.sethlevine.com sethlevine

      I don’t think you have this correct at all. The days where a love of code and a sharp, inquisitive mind getting you places are not over in the slightest. In fact software engineering is one of the most egalitarian pursuits in technology (as opposed to, say “business development” where pedigree does still matter). And I think you’d be hard pressed to find a town that’s more collaborative or supportive than Boulder is (we’ve worked hard to make it that way). There’s an unbelievable amount of mentoring going on here. In fact one of the things that I think makes Boulder so amazing is the fact that people here are so ready to help each other out. Just this week I’ve been going back and forth with two different friends on ideas to bring a better programming curriculum to high schools (in particular the type of high school you mention below). There’s a lot going on out there – I’d encourage you to check it out. You’ll discover that things haven’t changed as much as you think they have…

      Seth Levine

      • http://www.heyheyrenee.com/ Bowlhiker

        Good afternoon Seth,

        I disagree.

        When was the last time you funded a black kid? When was the last time someone you know went into a poor school and helped kids understand tech? 

        You say there’s mentoring in Boulder, fair enough. But is it mentoring between two rich kids? If so, is that really sharing the wealth? I don’t think it is. 

        Remember. In tech, the idea is make someone else less fortunate better off. I define mentoring is finding some kid who otherwise would not have broken into the circle and help them. I don’t define mentoring as one wealthy kid helping another, wealthy kid.

        And why does pedigree have to matter? Isn’t that a beltway mentality? Doesn’t that keep insiders rich and outsiders out? 

        Once again, not ragging on you. But I don’t need money from you, so I’m not here to throw rose petals at your feet like some others here.

        Does that work for you? 

  • Julia LeStage

    Startup dance is like dating. Most take it where they can get it. Those who succumb to one liners usually get what they deserve. Those who hunker down for a proper courtship, make wise unions.

  • bob

    my damn grill wont light

  • Richard Jordan

    Love this post. The cult of the celebri-vc is as tedious as the myth of founders’ heroic overnight success. I think in the post-”The Social Network” world we all live in the tech industry is way too tied up with TMZ-style nonsense at the moment. Turning an idea into viable product & business model, getting customers and keeping them, getting to profitability, finding an appropriate exit for the investors who’ve helped you get there – these things are REALLY HARD and take a lot of work and effort, and while it’s good to celebrate successes, there’s way too much credit being givn for just taking part.

    • http://www.sethlevine.com sethlevine

      Completely agree. Glad you liked the post.

  • heyehd

    technology for technology’s sake – scratch that. networking for networking’s sake – scratch that too. self promotion for self promotion’s sake – forget it. why not just shut up, get to work, and let the product speak.

  • Bond

    Most of you on here are immature young men with no life.
    What a sad state of affairs to think its fulfilling trying to make profit with boring organization of pre existing products called technology. Yippie f in do dah.
    Who cares.
    Find a real career.

  • ABC

    I just read your blog ( a little late). VC’s are nothing but support unless they actually have management experience in start-ups. Unfortunately , many have finance backgrounds and no successful marketing experience. The are over-glorified bean counters and not visionaries. They are an important of the business if they truly understand their role- they are support- not dictators of the business, Like you mentioned, if they knew how to build a business, then they should do it and not just sit behind desk and crunch numbers.

    • http://www.sethlevine.com sethlevine

      Amen! I have another rant about a very specific VC behavior that I can’t stand that’s going up later this week – stay tuned…

  • Dennis L

    Hey Seth, when are all you kindergartners going to quit talking & partying like high school kids and actually create some jobs?