The other day someone asked me how I decide which opportunities to work with companies I take up. It’s easy to give a glib answer to that – and the answer I gave was that I’m really looking for the same as investors – a great team, a great market, and a great product (or technology if the company is still at an early stage).
This answer clearly didn’t satisfy my questioner, who then asked “So does that work? Have you missed out on great companies that way?”.
Since I work with startups at a very early stage, even opportunities that I looked at several years ago may still be a long way from proving themselves to be great, but looking back I was able to think of quite a number of companies that I passed on getting involved with because I thought they were no good. Some of these companies have gone on to do well – they have raised money from various means and they are still growing and developing.
Now that is in my mind, I have to ask myself “did I make a mistake passing on those opportunities?” and if so, “what should I learn from the experience so I don’t repeat my mistakes?”.
After a bit of reflection, something interesting came to me. Although some of the companies I passed on are apparently doing well, I’m still glad I passed on them. In each case, there is still something about the company I don’t get, and I wouldn’t be any more inclined to get involved now than I was then.
I realised then that my questioner had framed an interesting question, but perhaps a little too simple. Instead of asking “Have you missed out on great companies?” a more in interesting questions(albeit clumsier) might have been “Have you missed out on companies that would have been great for you, and that you would have been great for?”. There was an assumption embedded in the question that any great company would be great for me, and that I would be great for it.
When I walk around the supermarket, there are some products that I could see myself involved with. I could get excited about making, selling or marketing whisky or craft beers for example. I could never imagine myself getting excited about making, selling or marketing lentils. I am sure some people do, I’m very happy for them, but it’s just not for me.
My original answer to how I choose opportunities was wrong. I am looking for individual people and products I can get excited about working with. Then I need to make sure that there really is a great team, a great market, and a great product (or technology). I act based on my interest in an opportunity as well as the quality of the opportunity.
Sometimes I see an opportunity and I just don’t get it. I may not even be able to put my finger on exactly why, but if I just can’t get excited about it then I know it’s not for me. How could I possibly add value to something I don’t get excited about?
So for me the learning is that I am doing the right thing, but that it might be helpful to more consciously separate my thoughts feelings into “my excitement” and “opportunity quality“.