Feature

Announcing Collective Wisdom

By  | 

Despite what the movies show, startups aren’t born painlessly from inspiration on the back of a napkin to instant global domination. We’ve backed over 200 startups, including Uber, Buzzfeed, The Trade Desk, Coupang, MakerBot, PillPack, and SeatGeek and while each is unique, we have observed one common theme: startups are made, not born.

Startups are built step by step. Often painfully. Some very quickly and others more slowly. Everyone in the entrepreneurial world has a view about which is most important to a startup, the market, technology, or team. We disagree. Our belief is that the quality that separates the world-changing startups from the rest is the speed at which they learn. We’ve made Collective Wisdom to accelerate learning and help founders in the moment to make the right choices and avoid the mistakes others have made before.

Imagine Uber as a Cuddly Little Baby

Startups are like babies in a way. You can’t tell by looking at a newborn if it’s going to be an Olympian, Supreme Court Justice, or Nobel Laureate. Genetics and the context that baby is born into will play a huge role, but her performance will be determined largely by what and how she learns.

Startups are no different.

When we backed Uber in 2010 it looked like a promising company—but it wasn’t immediately obvious that this would become the global success that we know today. The team was solid, they were taking advantage of the then new iPhone app store, but to many investors the market was a little underwhelming. Seriously, an app that calls black cars?

Uber feels magical, but the process of building it was anything but. Today their core ride-sharing business is a shift from the original black car service that they pitched us. They had to create liquidity in a two-sided marketplace, a challenge that’s stymied many startups. Dealing with local governments is difficult for many companies, but Uber perfected a playbook that allows them to operate in 300 cities across the globe. Uber looks inevitable, but only because they learned quickly to navigate obstacles that stalled lesser startups.

We know for certain that Uber’s success isn’t a matter of context, but of learning because we had a perfect A/B test. In 2011, before Uber became a ride-sharing company, we backed another company to provide peer-to-peer rides. The model was somewhat different but the market opportunity was the same as Uber’s today. If all that mattered was the idea, then that company would be challenging Uber’s valuation. Instead those founders moved on long ago.

Brilliant ideas, technical know-how, gall, gumption, and passion are just table stakes. We believe the speed at which you learn, the openness to adapt to market conditions, and the confidence required to get outside your comfort zone is paramount.

A Field Guide for Founders

For several years through various medium, we’ve been gathering wisdom from CEOs decades into the startup journey and actionable tips from freshly-minted CEOs on the front lines. We ask founders big picture questions, as well as immediately actionable ones, like what to wear when you’re pitching a VC. Often the most insightful lessons are nuanced, so we’re recording podcasts and videos so you can hear exactly what the founders are saying. Our aspiration is to have a library of content that you can reference when you need to learn and small nuggets of daily content that can augment that learning.

Entrepreneurship isn’t academic. You can’t read yourself to a seed round. You just have to do it. But that’s not to say you can’t pick up some frameworks, skills, and tricks along the way. We are on a journey to find the best wisdom to help you and collectively, we can help each other.

We believe as little as 5 minutes a day focused on your craft can make you a better entrepreneur. Whether you’re a founder facing a new round of funding, a startup employee looking to go out on your own, or a fresh graduate wondering if entrepreneurship is for you, you’ll find resources here.

A Pharmacist, Journalist, and Rocket Scientist…

pharm-journ-rocket-updated
TJ Parker, Shane Snow, and Natalya Brikner had unorthodox backgrounds for tech startup founders.

The stereotypical startup founders are a couple of computer geeks in a garage, but that’s changing. Our portfolio includes founders who were previously journalists, pharmacists, academic rocket scientists, and school teachers who saw ways to scale their expertise through software, design, and channels. It used to be that working for a president was an ultimate career goal, today helping shape global health policy for President Clinton segues nicely into a startup. These founders took knowledge and skill in an atypical domain and leveraged it into a CEO role.

We believe this is a great thing. More people, from diverse backgrounds, in far-flung regions are going to increasingly be business owners. Many will provide for families, others will grow into small businesses, and a small number will have the potential to change the world. We’ll all benefit from a myriad of new products and services that will make our lives better.

This won’t happen without challenges. Starting a business, working in uncertain environments, and making money outside a traditional corporate structure is challenging. Founders may possess deep knowledge in an one domain or functional area, but need to learn about negotiating term sheets, creating a marketing plan, and how to think intelligently about M&A. Collective Wisdom is designed to close those knowledge gaps.

Accelerating The Rate of Learning

We’ve seen a herd of unicorns in the last few years. Part of this is due to global fiscal policy, but you can’t underestimate the value of tools designed to help entrepreneurs. Be it Fred Wilson, Brad Feld, and Mark Suster pioneering VC blogging, YCombinator replacing college with bi-annual cohorts, or new media properties like First Round Review, founders have never had access to more information. Pair those resources with a nearly endless appetite for new products and services, and tools that will help you to get to market, and you’ve got the recipe for massive growth.

You learn what works and doesn’t, new skills are acquired at a rapid clip, but perhaps the most important lesson that jumps out at us over and over again is that founders are human. Most startup stories get told after a company is successful. Founders look like geniuses who led their startups, mistake free, to the promised land. Looking backward, there is always a sense of inevitability about successful companies, like they were always going to win.

That’s just simply not true. Startups aren’t born. They’re made.

Eric is a Managing Partner at Founder Collective.