Founder vs Investor: both sides of the table

I was a VC in the really early part of my career, then became an operator+angel investor for several years, before founding Workomo. Here’s how my lens for looking at company-building has evolved from an investor then vs. founder now:

#1 Doing 0-to-1 is really hard — as an investor, I never truly realized how hard it is to “make something people want” from scratch & have someone care enough to try using what you have built. The struggles of building from 0 can only be truly understood when experienced first-hand.

#2 Appreciation for engineering talent — as an investor, while one understands the importance of quality developers, the focus tends to be more high-level in terms of looking at leadership (CTO/VPs). As a founder, I now feel gratitude when I work with top-tier functional engineers.

I have seen how a solid iOS engineer can save weeks of extra cash burn while delivering excellent output. Or how quality backend engineers are so hard to find. Or in a small engineering team, a developer with 20% better output can really move the needle via effort-compounding.

#3 Importance of iterations — as an investor, I don’t remember ever asking founders: “how many iterations did it take you to get here? And what did you learn?”. Perhaps, ‘cos I had never been a 0-to-1 founder, I focused more on “outcomes” and never on the “process”.

Now as a founder, my core operating philosophy revolves around 1) “lean” iterations, 2) systems-thinking & 3) agile dev. (hypothesize-build-get users-learn-iterate-repeat). When facing high failure rates & random outcomes, the only thing you can truly control is the process.

#4 Re-orienting from “speed” to “velocity” — a piece of frequent advice I gave as an investor was “do things at even more speed” or “how can we ship even quicker?” or “can we fundraise even sooner?”. It was missing one thing: “are we moving quickly enough IN the right direction?”.

Investors want quick results, whereas as a founder, you know building outstanding products takes time & thoughtfulness. Even if you ship quickly, building the wrong thing without pausing to learn, analyze & re-orient will result in no one using it.

#5 Design is not just UI/ UX, it’s end-to-end product experience — as an investor, my view of a portfolio company’s product was just limited to what “I could see” and what “I could use”. As a founder, I now think about “what the user will FEEL”, right from the landing page, down to repeat usage.

#6 Effective teams aren’t just about assembling the most talented — as an investor, one primarily looks for signals of talent (track record, pedigree, intelligence, expertise). As a founder, I now include commitment & fit in the hiring matrix. Sometimes even as a filter.

While “how can we hire an engineer from Google or FB” is a good question to discuss with investors, other high-impact questions that need focus include “how is the team morale?”, “how can we better reinforce the vision.” or “how is trust being built as a remote team?”.

#7 Limited value of startup playbooks — a common technique investors use to try and add value to the portfolio is sharing what other companies/ founders are doing, their approach, what seems to be working for them etc. I have been guilty of this as well.

While there is some merit to having market intel & learning from other founders’ experiences, you quickly realize as a founder that all so-called playbooks are biased, post-facto analysis & polished versions of reality. You gotta figure out your own unique way.

#8 Who is a co-founder? — when looking at co-founders in a team, the top things I would primarily evaluate as an investor: 1) do they have complementary skill sets (engg+product+biz)? and 2) will this team look good enough on a deck, to be able to raise the next round?

Now with the perspective of a founder, I evaluate many other facets in founding teams: 1) does this person have the same level of passion, desire & commitment to building this company?, 2) when sh*t hits the fan, will this person be last-person-standing, 3) how much can this person sacrifice to see things through till the end?

#9 “Closing” with no logos behind you is damn hard — with IDG Ventures or Alibaba behind me, all doors were open. I could reach anyone, get quick responses, and easily attract people to my projects. Made it easy for me to say to founders: “let’s close this deal” or “let’s hire this person”.

As a founder, I have now felt how hard it truly is to hire, close deals or close any opportunity for that matter, when you are trying to build an unproven company, on a vision that’s new & hard to visualize, with a product that keeps frequently changing & has no scale yet.

#10 Guarding your mental state is everything — startups are a mental game. All the awesome founder qualities that people talk about — grit, perseverance, belief, conviction, are all internal. Perhaps the biggest miss I had as an investor is not observing the mental state of founders.

This becomes especially challenging as founders like to put up a brave face in front of their investors. I now strongly believe that it’s the job of investors to look past this veil of confidence and help unshackle their true mental state. I regret not doing this the most.

Ultimately, investors become successful when they back the best founders, who then get lucky :). Similarly, founders improve their odds by having the best investors in their corner. Personally, it has been incredible to experience both worlds & realize how different they are.

PS: if you are curious about what I am building, Workomo is a Chrome extension that shows you everything important about people, just before you meet, right inside the browser. We are already in private beta — do check us out and sign-up to request access. #peopleinsights

Note: this article first appeared on the Workomo blog.

--

--

--

Building Workomo & Investing at Operators Studio, ex-VC, US-India-China Tripod

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

What I’ve learned angel investing, and what I’ll be betting on next

My story

Composable NFT projects are on the rise and may be the next wave of innovation.

Startup, Founder Super Power — IGNORANCE

Why Did this Founder Quit His $28 Billion Company to Open an Ice Cream Parlor?

Book Review — REWORK

The Guide to Corporate and Commercial Law for Startups (Part 2)

IdeaMensch Interview: Michael Crow

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Soumitra Sharma

Soumitra Sharma

Building Workomo & Investing at Operators Studio, ex-VC, US-India-China Tripod

More from Medium

Board Meeting “Surgical Theater”

How do valuations in start-ups and new-age companies work?

Fundraising. (this is going to be a long one)

How to Prepare a Winning Pitch Deck