I get at least a half dozen calls from VCs a week and I love talking with them since they a) have a lot of great information, b) ask good questions, and c) can put you in touch with great people.Â
Having a VC call you and throw questions at you is like getting a free sparring partner for 20 minutes…. makes you a better fighter. So, I take the calls any chance I get just to keep in shape.
One trend I’ve been noticing is associates calling asking really silly questions, and not even knowing that I’ve known the VCs they work with for five or ten years! In one case I was in the VCs office a couple of days before the associate called me (we’re not raising VC money, it was just a catch up visit)!
Here is what two recent call were like (I put the two into one):
Associate: “What’s your revenue strategy?”
Me: “Advertising.”
Associate: “So how do you make money?”
Me: “Selling advertising.”
Associate: “How do you defend yourself against someone coming in and doing what you’re doing?”
Me: “Work harder.”
Associate: “Well, that’s it? I mean anyone can create a bunch of blogs and sell advertising against them.”
Me: “Can they?”
Associate: “Sure, and then there will be no margin and your business will go away. I mean, how do you deal with margin pressure?”
Me: “How does Nobu deal with margin pressure?”
Sparring with VCs & Associates to sharpen your skills.
Reader Comments
(Page 1 of 1)2. I agree with Jim that it is an insightful post. It's the kind of post that lingers in your head for a long time, not only because it's ridiculously funny, but that it has a significant life/business impact. I find Joe Kraus's blog to be very insightful as well as it focuses on his entrepreneurial experiences from excite.com and his current venture JotSpot. http://bnoopy.typepad.com/bnoopy/ Speaking of sushi, you should go to Sushi Nozawa in Studio City. The fish is unbelievably fresh, where the chef actually frustrates fish distributers because he only picks the best from the lot (i won't get into the economics of buying sushi-grade fish). Anyways, the chef is particularly well known in the LA area...usually referred to as the "Sushi Nazi." He's been known to kick people out of the tiny restaurant. An invisible black-list of people is kept by the chef. Meals are no longer than one hour. Don't order california rolls. Don't make adjustments to the way food is prepared. Don't complain about the check. But, do order the omakase (japanese for "trust the chef"). Also, reservations aren't taken so this place does get packed if you don't get there early. Opens at noon for lunch and I think at six for dinner. I hope your meeting over coffee with the associate goes well.
3. Personally, I think it's the contextual ads. Here I am at 4 AM leaving a comment, and the adsense is asking me if I need a friend. The thing I'm impressed with is your agility (hustle?). You seem to be able to move into new topic areas fast. Your infrastructure costs are probably not that high. What about people cost? You recently mentioned $1k/day in adsense revenue. Let's say you run at $1 M/year in total revenue. With 70 people, that's under $15k/person/year, not great so far. Double and triple the revenues are still tough. Most of your bloggers must be working very part time. It would seem to me you must be doing everything possible to raise ad revenue. Your whole business model depends on getting content that draws people and then optimizing ads to content. I suppose that is not really new for publishing, but the tools you have available (adsense, near real time measurement) make the game a lot different, sort of like arena vs. real football.
Posted at 4:41PM on Oct 29th 2005 by Bud Gibson
4. Priceless, Jason, priceless.
Posted at 4:41PM on Oct 29th 2005 by Alex Rowland
6. With all the people out there trashing VCs and all the VCs defending the business, this is a great post that boths side of that endless debate can agree on. Get rid off and stop hiring morons who don't get it. Great post.
Posted at 4:41PM on Oct 29th 2005 by Rick Segal
7. Great post
Posted at 4:41PM on Oct 29th 2005 by Alex
8. Great post, Jason, right on. Dave
Posted at 4:41PM on Oct 29th 2005 by David Sifry
9. Ahh, always nice to see how MBA programs really help someone focus on the real essence of business (not heavy irony). My rules of business: 1 - do good stuff 2 - keep doing good stuff. 3 - go to step 1 And I didn't even need to spend thousands at an ivy league college to figure it out!
Posted at 4:41PM on Oct 29th 2005 by Richard Baguley
10. Nice post. How many times do you here the following words: defensible, revenue model, business model, sustainability, intelletual property, ...etc... I'd add to your post by saying know your customer, solve a need, and deliver value to your customer. Just like the sushi restaraunt.
Posted at 4:41PM on Oct 29th 2005 by John Furrier
11. I'm just piling-on at this point. Absolutely wonderful. You should start up a VC New Hire Screening service... A Moody's for VC Employees. Weed some of these folks out. Thanks for the entertaining read!
Posted at 4:41PM on Oct 29th 2005 by TL Stuart
12. Clearly I don't get enough VC calls. That was Awesome.
Posted at 4:41PM on Oct 29th 2005 by Alec Saunders
13. The key to the humor in the conversations is that they were with Associates, not Partners, at the VC firms. Associates typically are hired straight out of MBA school and have no basis for judgement -- but are very good at following a script and gathering information for a file (kind of like telephone support people follow a script, and we all know how personal that suport is). In the early days of KP, no one could become a general partner unless he had already been a CEO. They have long since dropped that rule, but it was a GREAT rule to have -- until a person has had the pressue of worrying about meeting payroll, that person does not really know what it is to run a company. How do you evaluate a company for investment without knowing how to run it? How do you give advice to a company in a portfolio without knowing how to run it? Bubbler
Posted at 4:41PM on Oct 29th 2005 by Bubbler
14. This post rocks. As long on book smarts and short on common sense as this VC associate is, this is nothing compared to the brain dead nonsense the VCs were pushing and the entreprenuers were sucking up just a few years ago. The biggest thing I notice that is missing from this VC is the comical use of made up buzzwords the VC cannot grasp the meaning of.
Posted at 4:41PM on Oct 29th 2005 by Colin Chapman
15. Loved this...I say business is based on passion, resiliency and humility!
Posted at 4:41PM on Oct 29th 2005 by Barry Moltz
17. Yep, can't quite add more than others have.. I once again identify and laugh with the observation. Why will my coffee shop succeed? Because our bar is so high we have no competition. I love nay sayers and I love your rebuke, I will have to remember that next time a banker tries to pigeon hole me. -a
19. But Dave... what will you do when Google has blog search? That same concept would have kept Google from starting since everything they've done so far is a better version of what's come before... GMAIL over Hotmail Google Search over Lycos Adsense over Overture (slightly) Google Maps over MapQuest Google Messenger over AIM Google WORD over Microsoft WORD GoogleMusic & GooglePod over iTunes & iPod :-) best j
Posted at 4:01PM on Nov 3rd 2005 by Jason
20. Bingo! Best blog post I've read EVAR!
Posted at 11:24AM on Nov 29th 2005 by Randy Charles Morin
Add your comments
Please keep your comments relevant to this blog entry: inappropriate or purely promotional comments may be removed. Email addresses are never displayed, but they are required to confirm your comments. To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br> tags.
1. To me, this is one of the better posts I've read in some time. It's a reflection of my experience. People get caught up in the text book theories of business and forget reality. Serving customers, being passionate about what you do, serving more, caring more, giving more...that's what makes success. The reference and reply to Viktor Frankl is priceless! To all who read this...if you haven't read Frankl, get it from your local library - the life lessons taught are priceless.
Posted at 4:41PM on Oct 29th 2005 by Jim Logan