Over the last several months, I’ve been spending an unusual amount of time in Silicon Valley. Two or sometimes three trips a month – starting to feel like a second home. On some of those trips, I’ve been fortunate enough to meet with very successful venture capitalists and tech investors; and I’ve learned a ton.
What I Learned from One of Tesla’s Seed Investors
One of my recent meetings with a talented VC provided an another educational moment – a rare meeting when you leave lunch a smarter man. This venture capitalist explained a valuable tidbit I want to share – it serves as a great reminder of something we likely know in our subconscious, but probably overlooked in the fog of our busyness.
For some context, this VC was one of the early investors in Tesla over a decade ago. He hosted a party at his home in the Valley for the founders of Tesla when they were looking for Series A capital. And at that party, each guest was offered a ride in Tesla’s prototype – at the time a very crude model and the inspiration for the Model S. In the end, that quasi-house party provided Tesla with a good chunk of its Series A funding.
N.B. Tesla’s Series A stock was worth about $0.50 per share. Today, its shares trade for nearly $350!
Humble and insanely successful, this guy doesn’t talk about his massive wins and rarely name drops his network and friends, the likes of which include Elon Musk and many other famous entrepreneurs. He is willing to share his insight and knowledge with a fellow entrepreneur (you’d be surprised how many VCs are guarded and almost paranoid about sharing lessons learned). In short, he’s just a solid guy with an eye for innovative ideas and concepts.
At our lunch meeting, he explained that he never invests in a company without meeting the entire management team at the same time (CFO, CEO, CTO and so forth). Aside from the obvious (we all know the greatest asset a startup has is its management), he told me two very unique reasons for meeting with the whole management team simultaneously:
It allows him to probe for potential team turmoil, egos and internal strifes. He shared many of his tactics to get the answers which I’ll pass on in another blog entry.
And two, which is the purpose of this entry on a beautiful summer Sunday evening…
Because he invests in technologies with more than one application, he likes to prod management and gauges their focus level on what’s immediately in front of them. He wants to know if they have the ability to take one step at a time.
After investing in hundreds of startups, the likes of which include the now most famous car company in the world, he believes emerging tech companies die from indigestion, not starvation.
In his words “Dilution of focus kills more companies than debt.”
Can’t argue that.
We’re all working on our big idea – a concept that’ll completely transform our niches. But to accomplish the massive mission, we must be acutely focused on what it will take to get there – the little things. The daily routine, the small, progressive goals that allow us to keep moving forward. We can’t afford to get distracted based on another, possibly unrelated matter: the success of a competitor, a new opportunity, or chasing a fad. We must be disciplined with our time and thoughts.
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Entrepreneurship is a grind. It rewards those who persevere.
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