Shownotes
Intro
In this engaging discussion, we delve into the critical attributes that investors prioritize when assessing potential startup founders. Shawn Broderick elucidates the paramount importance of integrity, intelligence, and tenacity, positing that these qualities far outweigh the allure of a mere innovative idea. He candidly shares his extensive experience as a serial entrepreneur and venture capitalist, emphasizing that the journey from concept to successful enterprise often involves navigating the tumultuous waters of market realities. Furthermore, Broderick asserts that the most compelling startups frequently arise from challenging circumstances, where the inherent hunger for success drives exceptional outcomes. This conversation serves as an invaluable resource for aspiring entrepreneurs seeking to understand the dynamics of startup creation and the essential qualities that foster success in this demanding arena.
Conversation
The dialogue between Jothy Rosenberg and Shawn Broderick encapsulates a profound exploration of the entrepreneurial landscape, underscoring the paramount importance of integrity, intelligence, and resilience in the formation of successful startups. Broderick, a seasoned entrepreneur and venture capitalist, elucidates that while a compelling idea may initially attract attention, it is ultimately the character and capabilities of the founder that secure investment and foster sustainable growth. He emphasizes that the most remarkable startups often emerge during economically challenging periods, wherein the founders' hunger and resourcefulness are cultivated in response to adversity. This conversation challenges aspiring entrepreneurs to prioritize problem-solving over unwavering attachment to their original ideas, advocating for flexibility and adaptability in the face of market realities. The episode serves not only as an insightful guide for nascent entrepreneurs but also as a reflective narrative on the iterative nature of innovation, where the journey from conception to market demands a nuanced understanding of both personal and market dynamics.
Takeaways
- Investors prioritize integrity, intelligence, and resilience over the idea itself when evaluating startups.
- The entrepreneurial journey often requires embracing uncertainty and making decisions with incomplete information.
- Small teams, particularly those with fewer than 25 members, can achieve remarkable efficiency and innovation.
- Entrepreneurs must be willing to pivot their business strategies in response to market realities and feedback.
- The most successful startups frequently emerge during periods of economic downturn, driven by necessity and resourcefulness.
- Building companies from the ground up involves a continuous learning process shaped by both successes and failures.
- Shawn Broderick - dlab | LinkedIn
- SOSV - Deep Tech for Human and Planetary Health
- Jothy's TEDx talk - On why those with disabilities tend to overachieve
- The Who Says I Can't Foundation - Jothy's non-profit that helps disabled kids get back into a sport they love to restore their self-esteem
- Our YouTube channel
- Designing Successful Startups — Jothy Rosenberg | Author | Speaker | Podcaster - Site with all podcasts
- Tech Startup Toolkit book
- Please leave us a review
Transcripts
Hello.
Speaker B:Please meet today's guest, Sean Broderick.
Speaker A:But frankly, and with my hat tip to David S. Rose, New York Angels.
Speaker A:And integrity is really one of the first things we have to look for.
Speaker A:One of the.
Speaker A:One of the problems with earliest stage, and that's what I call D lab.
Speaker A:Earliest stage, where we might come in with, here's a quarter million dollars, we're completely naked.
Speaker A:There's nobody else at the table with us.
Speaker A:As an investor, if we throw that money at people without integrity, this whole thing just falls apart.
Speaker A:And so integrity, smarts, and grit are definitely what's there.
Speaker A:I would tell my techstars companies on day one of the cohort, you're all here because we think you have the what it takes to be a great entrepreneur.
Speaker A:None of you are here are because of your idea.
Speaker A:Some of you are here in spite of your idea.
Speaker B:What if I told you that your brilliant startup idea might actually be working against you?
Speaker B:That the very passion driving your late nights and early mornings could be blinding you to what really matters today?
Speaker B:On Designing Successful Startups, I'm sitting down with my old friend Sean Broderick, a serial entrepreneur turned VC who's seen it all.
Speaker B:From coding in high school to building and selling multiple companies, to running techstars Boston during the Great Recession, and now investing at the earliest stages, where dreams meet brutal market reality.
Speaker B:Sean's going to challenge everything you think you know about what investors really look for.
Speaker B:Spoiler alert, it's not your idea.
Speaker B:He'll share why the hungriest startups often come from the toughest times.
Speaker B:How he learned that failure is a better teacher than success.
Speaker B:And why he believes some entrepreneurs might actually be on the spectrum when it comes to their ability to focus and create.
Speaker B:If you're wondering whether you have what it takes to build something from nothing, or if you're trying to figure out how to get from that blank piece of paper around the kitchen table to your first real customer.
Speaker B:This conversation is for you.
Speaker B:I'm Jothi Rosenberg and this is Designing Successful Startups.
Speaker B:And here is my old friend Sean.
Speaker B:It's been a long time, but it's great to see you.
Speaker A:Lovely to see you, sir.
Speaker B:We go back to.
Speaker B:It was called Trust Plus, Right?
Speaker A:That's right.
Speaker A:Way back when.
Speaker A:Geez.
Speaker B:And you had this wonderful little cubbyhole of a place on.
Speaker B:It was west street coming out of off of Winter street, that you know a lot of people who are in the old days when all the VCs were up on that hill, that people would be driving right back by there and paying homage to any number of VCs that they wanted to raise money from.
Speaker A:Money.
Speaker B:They've almost all moved into Boston since then.
Speaker A:I think they all have.
Speaker A:Every once in a while I actually will because I live not too far from there.
Speaker A:I will wander around and drive through there and I don't think any of their names are still there anymore.
Speaker B:So are you, are you native to Boston or are you a transplant from.
Speaker B:It's from somewhere.
Speaker A:I'm born and bred.
Speaker A:I grew up in Natick, I was born in Waltham, grew up in Natick, went to college in Waltham and then when I was young lived all around the city, Somerville, Brookline, Cambridge and Boston.
Speaker A:And moved out to Sherburne when I started greeting and then.
Speaker A:And now I'm in new.
Speaker A: I tried once in: Speaker A:So I'm stuck here still someday in.
Speaker B:Very brief and I'm not doing you justice, you've done startups, you've taught entrepreneurs.
Speaker B:You may not call it teaching when you're at techstars, but it always looks like you're very much teaching and, and then you've also now you're at a vc, but I'm not sure if you're doing multiple things at the same time.
Speaker A:Always.
Speaker A:Yeah.
Speaker A:So just a little quick background for the listeners.
Speaker A:I'm an engineer by training.
Speaker A:I started writing commercial code when I was in high school in 19 and, and I did about 15 years of coding and I got really bored of it.
Speaker A:Uh, I thought startups might be fun and I did about 15 years of doing startups with a few interspersed investments and now I've done about 10, 12 years of investing.
Speaker A:So that's the arc of what's going on.
Speaker A:And, and to your point about teaching, I agree completely.
Speaker A:It's really a question of what stage you're investing at.
Speaker A:If you're an early stage investor, which I've always been.
Speaker A:And that's my favorite part of startups.
Speaker A:I, when I ran my own companies, when they got to 15 people, honestly 20 people, 25 at the outside, I wasn't interested anymore.
Speaker A:Like now it's just a growth game, which is great, but it's not what makes me happy.
Speaker A:What made me happy was, you know, you sit around the kitchen table with a blank piece of paper trying to figure out how to solve a problem in a creative way that somebody will pay you for, and then build that business from 0 to 1 and then let somebody else take it to 2 or 3 or 4.
Speaker A:That's not what made me think.
Speaker A:And when you're.
Speaker A:And so that's where I invest.
Speaker A:And that's about teaching.
Speaker A:Because most of the people getting from 0 to 1 don't know what they're doing.
Speaker A:I didn't know what I was doing the first time around.
Speaker A:Shit.
Speaker A:I didn't know what I was doing the first three times around.
Speaker A:Let's be honest.
Speaker B:I'm with you on that.
Speaker A:And, and, and so it's really about teaching.
Speaker A:And then once, once at some point it flips and I don't know when that is, but.
Speaker A:And then it's about guiding.
Speaker A:And they're very different.
Speaker A:It's about giving advice.
Speaker A:And I have companies in my portfolio that are Series B, 50 million in revenue.
Speaker A:And I don't need to teach those teams anything.
Speaker A:I just need to guide them.
Speaker A:It's very rare times when they need a guardrail, but it's very different.
Speaker A:I do love teaching in that regard.
Speaker A:I have taught.
Speaker A:I taught at BU for a couple of semesters in the Media Ventures program and didn't really like that environment.
Speaker A:And I think it was because it wasn't real.
Speaker A:It wasn't real.
Speaker A:It was students just learning for the sake of learning, which is great in the abstract, but I really like to work with people who are pigs at breakfast, not the chickens at breakfast.
Speaker B:I don't know if you know this, but I was a university professor as well, and then I was working on something for a NASA program that I just.
Speaker B:And here's same as you.
Speaker B:So I don't know what I'm doing, but I really think this should be a startup.
Speaker B:And that took me to Silicon Valley because you weren't going to do it in North Carolina in those days.
Speaker A:The passion is why it's so cool when you're doing 50 million or 100 million in revenue.
Speaker A:It's more about the passion of just execution, like doing it, not screwing it up.
Speaker A:But when you've got no revenue, no customers and no employees, there's nothing but passion, a desire, a deep desire, like an desire that has to be fulfilled.
Speaker A:It's demanding to be fulfilled, to create something.
Speaker A:And I'm a shitty musician.
Speaker A:I'm.
Speaker A:I have no artistic capabilities.
Speaker A:And when I.
Speaker A:But everybody wants to create and I always felt like I create businesses and.
Speaker A:And now venture firms.
Speaker B:I couldn't agree more that I think it's about.
Speaker B:For me, it's about creativity and creating something from nothing.
Speaker B:It's an idea.
Speaker B:And the other thing that is really rewarding to me about the small size and I agree with you, by the way, that 25 is a significant breakover point to a different kind of a beast.
Speaker B:There is something magical about the kind of team you can put together for a small startup where it's the efficiency, the speed is.
Speaker B:Is just amazing to behold when you've got a bunch of people that trust each other, that help each other, that at a big company.
Speaker B:There's the.
Speaker B:I hate to say it, but there's the backstabbing, there's the politics that just happens naturally.
Speaker B:And one of the reasons that I was not too sorry to leave the university is that that is a very political environment.
Speaker B:The way it's set up to get tenure.
Speaker B:It is just asking for backstabbing.
Speaker B:Tell us a little bit about techstars because that was a very significant chunk of time that you spent doing that.
Speaker B:And I interacted with you a few during those years.
Speaker B:Not that often.
Speaker B:It was a.
Speaker B:It was something that was clearly a joyful thing for you.
Speaker A:So it was.
Speaker A:It really was wonderful.
Speaker A:And I owe a ton of thanks to.
Speaker A:To Brad Feld and David Cohen who drew me into techstars.
Speaker A:The techstars started in Boulder, Colorado and ran for I think two.
Speaker A:Two years there.
Speaker A:Two summers, two cohorts or three cohorts.
Speaker A:And they decided that Boston was the next expansion place.
Speaker A:And at some point they started at the top of their list to find somebody to run it.
Speaker A:And when they got down to number 634, that was me.
Speaker A:I said yes and.
Speaker A:And it really was fun.
Speaker A:I learned they Techstars, honestly, Techstars is an organization.
Speaker A:It is huge.
Speaker A:300 people or something like that with headquarters and is technically in New York, I believe, at this point.
Speaker A:And it was gigantic back then.
Speaker A:It was four people or something.
Speaker A:It was David and Andrew and Nicole and somebody doing books and it was tiny.
Speaker A:And I ran out of a former health club in the basement of a building in Boulder.
Speaker A:So it had locker rooms and showers and crazy stuff like that.
Speaker B:How convenient.
Speaker A:Yeah, none of that stuff operated, but it was cool and.
Speaker A:And so I didn't know what the hell I was doing.
Speaker A:And frankly, I don't think they knew what they were doing like it was, yeah, we should expand this, but this guy's 2,000 miles away or whatever it is and we'll let Shawn go figure it out.
Speaker A:And I figured it out and.
Speaker A:But it was so much fun and it really, it really helped me underline for me that point of creation, that creation period, if you call it.
Speaker A:Want to call it of the startups, because all the startups fit.
Speaker A:That was.
Speaker A:Things are very different today.
Speaker A: This was: Speaker A: ,: Speaker A:When we spun that up, the first cohort was summer 09.
Speaker A:We had no dearth of people who wanted to build companies.
Speaker A:And that's part of a.
Speaker A:Part of why it's so great.
Speaker A:Because it doesn't matter.
Speaker A:On an economic cycle, people have desire to create, to have desire to build.
Speaker A:And it doesn't.
Speaker A:It's impacted, of course by economics and their economic situation, whether they can do that or not.
Speaker A:Just.
Speaker A:I didn't become a professional musician because I had student loans to pay right when I got out of or got out of college.
Speaker A:And so it's a factor but no impact in that desire.
Speaker A:And number two, turns out that when you do the analysis, most of the best companies in the startup world happen during downtimes.
Speaker A:They get founded during downtimes.
Speaker A:There's a certain hunger and capital constraints that goes on that forces them to be better than their contemporaries who are founded at the top of the peaks.
Speaker A:And I've been through that.
Speaker A:I've started companies at the peak, I've started companies at the bottom.
Speaker A:And definitely I find the case that the hungrier you are at the beginning, that the richer the company is that gets created.
Speaker A:But my data is just an anecdote.
Speaker A:We were in Cambridge on Mass Ave. We found a great family that owned this building at 7 something Mass Ave. Old building that used to has banks in it and stuff like that.
Speaker A:And second floor was the top floor.
Speaker A:I think it was two floors.
Speaker A:The second floor was this big open space.
Speaker A:It used to be a Kaplan college prep course and the Kaplan people had moved to Harvard Square.
Speaker A:They didn't want to be in Central Square anymore.
Speaker A:In Central Square at the time was nothing to get excited about.
Speaker A:I happen to like it.
Speaker A:I used to drag my kids in and they'd ask questions from Sherburne and they'd be like, why is that man sleeping in the doorway?
Speaker A:Wonderful teaching moments for kids that you don't experience out in the suburbs at all.
Speaker A:And.
Speaker A:And this great family owned this building and they were willing to give us all a short Term lease, like four months or five month lease because it was empty anyway and we weren't demanding any updates.
Speaker A:And then the same space was available the next year when I ran the program again during the summer.
Speaker A:And so I thought that it was a great place to run this sort of thing as opposed to a hoity toity, fancy schmancy, whole amenities type outfit because that's the world that these people have to live in.
Speaker A:There was an application process, an application review process.
Speaker A:I don't remember offhand too many years ago how many applications came in.
Speaker A:But you know, we accepted whatever it was.
Speaker A:8, 9, 10 companies per co work and they got a small investment.
Speaker A:Way back when we used to raise tiny little funds for each cohort.
Speaker A:So it was like 300, 400, 500 GS for each cohort.
Speaker A:Every company got like 20 grand roughly and office space and mentors and mentorship and all that sort of good jazz, all that teaching.
Speaker A:And TxDar's got equity.
Speaker A:So I run, I ran two funds.
Speaker A: TxDar Boston: Speaker A: All the: Speaker A: have one company left in the: Speaker A:Both of those funds are in the money I made.
Speaker A:Carry on those.
Speaker A:I got paid like crap, but that's okay and did okay on the upside.
Speaker A:The whole idea of charging fees or for teaching entrepreneurs is, is a religious issue.
Speaker A:And I'm not, it's not a moral issue, it's a religious issue.
Speaker A:I believe that there a good entrepreneur, even better, a great entrepreneur can find people to help them learn and teach them and help them and can educate themselves to some degree as well.
Speaker A:The as you go down the scale to an okay entrepreneur or crappy entrepreneur, it becomes harder to get those people to pay attention to you, the teachers and the people that have been there because they know that you're probably not going to succeed and so they don't want to invest their time.
Speaker A:And so there's a market for charging entrepreneurs but I'm not a fan of it.
Speaker A:So I'm that religion and I totally get it.
Speaker A:I can, I think there's a place for it, but I've never personally done that per se and so how many.
Speaker B:Years did you do that?
Speaker A:So just two.
Speaker A:Two years.
Speaker A:So I did it for two years and then I had one more startup in me and I had started working on that startup.
Speaker A:Towards the end of the second year it was obvious that I couldn't do both and, and Katie Rae Took over from there and moved it out to Kendall Square, and she did a fantastic job with it.
Speaker B:Now, wait, isn't Katie the one who's over at the engine?
Speaker A:Yep.
Speaker A:Yeah.
Speaker A:So she ran techstars for three or four years.
Speaker A:I don't exactly remember.
Speaker A:And then Semyon, I think, took it over from her and she went to the engine.
Speaker A:She helped to start up the engine, mit.
Speaker B:Yeah, I like the engine, folks, but there was maybe just a little bit too much MIT in the whole thing.
Speaker A:Yep, that's its point.
Speaker B:Yeah.
Speaker B:What was that last startup you just mentioned?
Speaker A:Yeah, so that was play 140.
Speaker A:So we made social games with words.
Speaker A:We basically bridged together all these disparate text networks.
Speaker A:So we had a Facebook app, Twitter interfaces, text messaging interfaces.
Speaker A:We worked with some of the burgeoning alternative text messages.
Speaker A:Text messaging apps like WhatsApp.
Speaker A:Not WhatsApp.
Speaker A:They didn't want to work with us.
Speaker A:Brain wanted to keep it very focused and not bring games to it.
Speaker A:And.
Speaker A:And we sold that to a.
Speaker A:To another, bigger game company three years later, or something like that.
Speaker B:Hi.
Speaker B:The podcast you are listening to is a companion to my recent book, Tech Startup Toolkit, how to Launch Strong and Exit Big.
Speaker B:This is the book I wish I'd had as I was founding and running eight startups over 35 years.
Speaker B:I tell the unvarnished truth about what went right and especially about what went wrong.
Speaker B:You could get it from all the usual booksellers.
Speaker B:I hope you like it.
Speaker B:It's a true labor of love.
Speaker B:Now, back to the show.
Speaker A:And.
Speaker B:Is that when you joined the VC firm?
Speaker A:Yeah, that's when I was done.
Speaker A:Like, I knew that was my last startup and, And.
Speaker A:Which is weird to know that.
Speaker A:It sounds like maybe you know that with your.
Speaker A:Yeah, with your.
Speaker B:I do.
Speaker A:I knew it.
Speaker A:Was it like, okay, I've done.
Speaker A:I don't know how many that was at that point.
Speaker A:Most of them don't get past concept stage, I think.
Speaker A:I. I raised money for 1, 2, 3, 4, 5 companies and two of them had real exits.
Speaker A:One of them got crushed in the dot bomb and, and.
Speaker A:But I knew.
Speaker A:And then I did tons of it.
Speaker A:Another half dozen or more that never made it.
Speaker A:But.
Speaker A:But yeah, I knew that was my last one.
Speaker A:And so I had, I had.
Speaker A:I was very active in the world of accelerators because techstar, the yc, started in Boston way back when and then moved to California, and then techstar started in Boulder number two.
Speaker A:And so there was still.
Speaker A: ors were a new thing still in: Speaker A:Now you throw a rock, you hit an accelerator.
Speaker A:And for better and for worse.
Speaker A:And so I, I think I mentioned before, we used to raise these tiny little funds for every cohort.
Speaker A: So for Texas boss, in: Speaker A:And then one of the investors dropped out and I went to a friend of mine who was a former angel investor in one of my companies, two of my companies, two of my companies,.
Speaker A:I.
Speaker A:And they were doing investments that, hey, running this accelerator thing in Boston.
Speaker A:Would you be interested in investing on it?
Speaker A:You know, shits and giggles, right?
Speaker A:100 GS.
Speaker A:And that was Sean O' Sullivan of SOSV Venture SOS V. Now, SOS was called SOS Ventures back then, but SOSV now, it started out as his family office and now it's a billion and a half, $2 billion hard tech, early stage VC with a global presence.
Speaker A:And, and they were like, oh yeah, we're curious about this whole accelerator thing.
Speaker A:We'll give you a hundred GS and I'm going to send this guy over who's going to basically mirror you for three months and learn how to do this.
Speaker A:And then he's going to go back to China and start an accelerator.
Speaker A:And so Essels reinvested.
Speaker A:Mike, my now partner, Cyril, came over from Dalian, China.
Speaker A:He's a Frenchman in China.
Speaker A:He mirrored me.
Speaker A:We ran the program.
Speaker A:He went back and started the first accelerator in China, now the oldest accelerator in China.
Speaker A:Accelerator in dalian and, and so s o s v After I had gone to do play 140, SOSV kept spinning up accelerators.
Speaker A:And so they'd call me.
Speaker A:You know how VCs are with free labor and smart people.
Speaker A:Oh yeah, I can include myself in that bucket.
Speaker A:We're doing this accelerator in Dublin.
Speaker A:Can you come for a month and help teach these people how to do this?
Speaker A:We're doing this accelerator in San Francisco.
Speaker A:Can you come for a month?
Speaker A:And blah, blah, blah, and it goes on and on.
Speaker A:And finally you're like, okay, this is stupid.
Speaker A:Why don't you just hire me and I'll come to this.
Speaker A:And.
Speaker A:And So I joined SOSB.
Speaker A: I want to say: Speaker A:And I think back then we were maybe a hundred million, 150 maybe, I don't really know.
Speaker A:And there were maybe a dozen people and now it's a hundred plus.
Speaker A:I actually don't know.
Speaker A:And, and so I was at SLSP for a while.
Speaker A:I got pulled into their business of food program called Food X which somebody else had started but it didn't work out.
Speaker A:And so I ran that for quite a number of years pushing it more towards software, you know, where I'm comfortable as opposed to innovative food products and food innovation.
Speaker A:And, and, and then we decided to shut that down and they said what do you want to do?
Speaker A:And I said I really want to do Web3 and crypto and the decentralization technologies that are going to change how we do everything in computers and software systems.
Speaker A: th a small sleeve of money in: Speaker A:And when they were raising SSP 5 so I was part of SSP 1 and 32 and 3 and 4 and then SSP 5 didn't want to touch tokens.
Speaker A:A couple of the LPs were sovereign wealth funds that didn't want any exposure to crypto.
Speaker A: as an independent fund during: Speaker A:SOSB is a materially large firm so as I said, I don't know what the exact.
Speaker A:I am a venture partner now at sosb so I don't have all the data or, or but I believe it's about 1.5 billion and I think we've invested in something on the order of over more than less than 3,000 but more than 2,000 startups.
Speaker A: it's all been up until about: Speaker A:Now it's half a million to a million dollars of pre seed funding to get these companies off the ground.
Speaker A:Never mind the full fabrication labs and manufacturing mockups and, and full level 2 wet labs in the middle of Manhattan and crap like that.
Speaker A:That you know is very expensive and incredibly efficient efficiency generating for these startups which are in the case of the life sciences now for postdocs that come out of university and we basically teach them how to be entrepreneurious to some degree and teaching and but with the full set of resources available to them.
Speaker B:And when you're looking at a founder or a small founding team.
Speaker B:The first thing you probably look for is passion behind an I really good idea.
Speaker B:And then these are, like you said, these are people that if they haven't done a couple of startups, then all they really have is this idea that they think will change the world and they're going to need to have everything else filled in.
Speaker B:Do you look for the.
Speaker B:What we like to call grit in these people?
Speaker A:I would disagree with you a little bit.
Speaker A:And I would say that the brilliant idea, the passionate idea, the idea that you're passionate about, opens the door.
Speaker A:That's really all it does.
Speaker A:And what we're really looking for, what I'm looking for is three things and grit is one of them you mentioned.
Speaker A:And that would.
Speaker A:So grit.
Speaker A:And it's really hard to determine grit right off the bat.
Speaker A:The second is, do you have the brains to actually.
Speaker A:Are you smart enough and resourceful enough to actually get this to work?
Speaker A:But frankly, and with my hat tip to David S. Rose of New York Angels.
Speaker A:And integrity is really one of the first things we have to look for.
Speaker A:One of the, One of the problems with the earliest stage, and that's what I call D lab earliest stage, where we're.
Speaker A:We might come in with, here's a quarter million dollars, we're completely naked.
Speaker A:There's nobody else at the table with us as an investor.
Speaker A:If we throw that money at people without integrity, this whole thing just falls apart.
Speaker A:And integrity, smarts and great are definitely what's there.
Speaker A:I would tell my techstars companies on day one of the cohort, you're all here because we think you have the.
Speaker A:What it takes to be a great entrepreneur.
Speaker A:None of you are here are because of your idea.
Speaker A:Some of you are here in spite of your idea.
Speaker A:And we all know that pivots happen.
Speaker A:Happens all the time, right?
Speaker A:You've seen it, you've done it.
Speaker A:I've done it.
Speaker A:I've certainly seen it.
Speaker A:And that brilliant idea, just because you can con me into believing it, right, because you've conned yourself in a good way.
Speaker A:Con in a good way, not in a bad way, doesn't mean it's right.
Speaker A:And when it sees the light of day and you get to test it against actual potential customers in the market, market's a cool beast.
Speaker B:And a few minutes ago, I have proof that you're smarter than me.
Speaker B:And that is that I got.
Speaker B:I too got asked by VCs to give them free labor.
Speaker B:You only had to commit a month.
Speaker B:I had to commit a year.
Speaker A:Oh, no, no.
Speaker A:This was over years.
Speaker A:Like a month here, a month there.
Speaker A:I was bouncing around and it's.
Speaker A:You know the drill.
Speaker A:It's.
Speaker B:Yeah, I know.
Speaker B:But what I got duped into, as I also live in Boston and the VC that.
Speaker B:That was a friend and needed my help was.
Speaker B:Was operating out of Portland.
Speaker B:Not Maine.
Speaker B:Oregon.
Speaker A:Oregon.
Speaker B:And when he needed help, he needed me to come to Oregon.
Speaker B:And of course I have a family, so I wasn't moving the family.
Speaker B:So I was commuting across country.
Speaker B:There were no direct flights from Boston to Portland.
Speaker B:It was absolutely brutal and dumb.
Speaker B:But anyway, so you're smart and the other.
Speaker B:So the question I have is, where do you think your grit came from?
Speaker B:Because there's no question you have a lot.
Speaker A:Yeah, I don't know.
Speaker A:And it's a good question.
Speaker A:And I hate to sound like an old fashioned, get off my lawn type of old man, but the pattern matching thing is real.
Speaker A:And.
Speaker A:And you can sense grit when you see it.
Speaker A:You can.
Speaker A:You know it when you're experiencing it.
Speaker A:I can tell you that I grew up lower middle class in suburbs of Boston.
Speaker A:My parents divorced when I was young.
Speaker A:We didn't have a lot of money.
Speaker A:We didn't starve or anything like that, but.
Speaker A:And my mother, bless her, who's no longer with us, she did magical things to make money work.
Speaker A:And we.
Speaker A:I grew up for large periods of time on powdered milk and Xarex, if you remember that stuff from way back.
Speaker A:And we didn't have a ton of money.
Speaker A:And I have no idea how my school was paid for.
Speaker A:My.
Speaker A:I came out with loans, but I didn't ask.
Speaker A:Somehow it got paid for.
Speaker A:For all I know, one of my grandmothers paid for it.
Speaker A:No longer with us, but it's.
Speaker A:That definitely created some level of grit, not wanting to be in that position and watching how much my parents had to struggle and my sisters had to struggle and there was nothing fun about that.
Speaker A:And I'm not a billionaire or anything, and I'm quite comfortable.
Speaker A:I live in Newton.
Speaker A:Nobody in Newton is starving to death as a general rule.
Speaker A:Not entirely true, but part of it was that thing.
Speaker A:How do I have a less painful life?
Speaker A:But I'm also.
Speaker A:I don't want to psychoanalyze myself.
Speaker A:Part of it is just being type A.
Speaker A:My partner always jokes that maybe I'm on the spectrum, right?
Speaker A:That I can focus on something and go so deep on it.
Speaker A:When I was coding, part of why I love coding was when you get into that flow state and six hours goes by and it's three in the morning and you've built something very cool.
Speaker A:And like, how the fuck did that happen, man?
Speaker A:That's like, really?
Speaker A:And yeah, and it's the same thing with business building.
Speaker A:Like I, that maker time is pretty precious and that ability to focus really helps build capability.
Speaker A:You can call it grit if you want.
Speaker A:I had plenty of companies fail, right?
Speaker A:And, and that is what teaches you how to do things.
Speaker A:Success is a shitty teacher.
Speaker A:And, but failure you learn from if you're smart, like, even if you're dumb, hopefully you learn from failure because it sucks to do the same thing over and over again and get whacked in the head for it.
Speaker A:A bunch of my companies were abysmal failures.
Speaker A:I've made millions of dollars for investors, I've lost millions of dollars from other investors and my own money.
Speaker A:And all of those sort of keep getting pieced together.
Speaker A:I guess the last person that when you look at somebody's LinkedIn, right?
Speaker A:Somebody wants to raise money and you look at their LinkedIn and it's.
Speaker A:I admit that it's not common these days.
Speaker A:And they've been at company act for 20 years.
Speaker A:That's probably not an entrepreneur.
Speaker A:Maybe it is.
Speaker A:Maybe it's a late life shift, right?
Speaker A:And that definitely happens.
Speaker A:Back to amazing people that fit that bill, but not that many.
Speaker A:Like, I've done 200 investments and maybe two or three at the outside that fit that bill.
Speaker A:I'm trying to find the right word that isn't derogatory.
Speaker A:That's sort of hopping from idea to idea, from company to company, from thing to thing, creates a crazy level, in my opinion, on a material level of skills that you wouldn't get otherwise because you're forcing yourself, usually, unless you're being laid off every six months, mostly most people, you're forcing yourself to learn all sorts of new skills in new contexts all the time.
Speaker A:And when you do that enough, whether it's starting company after company or moving from job to job early on in your career, that in and of itself doesn't build grit per se, but it builds the mental model and the neural structures to welcome uncomfortableness, to welcome uncertainty, to welcome making decisions with not enough data.
Speaker A:And that's really what at the end of the day, startups end up being.
Speaker A:And not a lot of people are comfortable with that level of uncertainty.
Speaker B:And like the person I'm married to, for example.
Speaker B:Yeah, yeah, yeah, she watches this and she goes, you're nuts.
Speaker A:And I was married to one too, and my current partner is speech pathologist.
Speaker A:Like, this is not how they look at the world.
Speaker B:Mine.
Speaker B:Mine was also in the medical field.
Speaker B:As always, I could go on for hours, but I don't think our audience can could tolerate a show that long.
Speaker B:But this has been spectacular and I think we'll call it here.
Speaker A:Superb.
Speaker A:It's been an absolute pleasure.
Speaker A:Thank you so much for inviting me.
Speaker B:Oh my.
Speaker B:It's been my pleasure.
Speaker B:Now for your Founder's toolkit.
Speaker B:The Episode Takeaways.
Speaker B:Takeaway number one.
Speaker B:Your idea opens the door.
Speaker B:Nothing more.
Speaker B:Stop falling in love with your idea and start falling in love with solving real problems.
Speaker B:As Sean puts it, some of you are here in spite of your idea.
Speaker B:Investors back the founder, not the idea.
Speaker B:Your brilliant concept might get you in the room, but your integrity, intelligence and grit are what get you funded.
Speaker B:Be prepared to pivot because the market is a cruel teacher that doesn't care about your original vision.
Speaker B:Takeaway number two Embrace the uncomfortable unknown.
Speaker B:The best entrepreneurs welcome uncertainty and make decisions with incomplete data.
Speaker B:If you're constantly seeking comfort and certainty, entrepreneurship might not be for you.
Speaker B:Build your tolerance for discomfort by putting yourself in new situations repeatedly.
Speaker B:Each uncomfortable experience builds the mental models you'll need when everything is on the line and you have to choose a path forward.
Speaker B:And takeaway number three Small teams create magic.
Speaker B:Know when to step back.
Speaker B:There's something magical about teams under 25 people.
Speaker B:The trust, speed and efficiency you can achieve is unmatched.
Speaker B:But recognize when you've hit that growth inflection point where your role needs to evolve from creator to manager.
Speaker B:As Shawn discovered, some of us are built for zero to one creation, not scaling operations.
Speaker B:Know your strengths and don't be afraid to let others take your baby to the next level.
Speaker B:That's our episode with Sean.
Speaker B:Until next time.
Speaker B:Keep building, keep learning, and remember, the best companies often emerge from the toughest times.
Speaker B:The show notes contain useful resources and links.
Speaker B:Please follow and rate us@podchaser.com designing successful startups.
Speaker B:Also, please share and like us on your social media channels.
Speaker B:This is Jothi Rosenberg saying TTFN Tata for now.
