I’m thrilled to publicly announce the really poorly kept secret, that after almost 4 years of working alongside Chris DeVore and the rest of the Founders’ Co-op team, I’ve stepped into the partnership with both feet as a General Partner. Going forward the investment team will be myself and Chris, with Rudy Gadre and Andy Sack remaining involved as Venture Partners.
In transitioning from entrepreneur to investor, the lifetime of hard earned lessons from my journey as a founder of Simply Measured won’t be going to waste, and I’ll be working just as hard as ever leveraging those experiences in this new challenge, both the good and the bad. Those eight years of operating, growing from two people in a coffee shop to 150 employees, ruthlessly forged my understanding of my strengths and my weaknesses; my limits and my opportunities for growth. With that, where I can create the most value and grow the most is not as a founder, but as an investor working with founders by supporting and challenging them.
And the timing couldn’t be better.
From the investment world, to the tech world, to well… the entire world itself, it’s abundantly clear that we’re in a time of transition. We’re long past business as usual, but in many ways we’re still pretending, which is all too easy as public markets continue rise seemingly against gravity. Except for Facebook and Twitter this past week…
As early stage investors, you’d imagine that elevated uncertainty makes our jobs harder than ever. So my timing isn’t great, it’s terrible! Right? After all, most companies we work with are only 15% of the way on their journey in terms of time and 1% in terms of execution when we invest. 99% of what makes it a good or a bad investment simply hasn’t happened yet. It follows then, that the less we know about the future and the less trusted the patterns we have to match against, the riskier the proposition.
But it’s in these types of environments that Founders’ Co-op’s strategy thrives, because our success isn’t contingent on us predicting the future. You can look to history to understand what happened in a market and sometimes even why, you can even use it to gauge volatility and the likelihood of disruption, but you’re much smarter than we are if you can use it to decipher exactly how things will evolve in the future and invest around that, especially in today’s climate.
Our conviction at Founders’ Co-op is grounded in our belief in what won’t change. We aren’t a thematically driven fund, we invest in self-aware and intellectually honest, execution focused founders who don’t need the world to change in a specific way for them to be successful. That magical combination is rare, but part of what makes the Pacific Northwest so unique is how much less uncommon it is here than anywhere else, and we’re not this way by accident.
The Pacific Northwest is home to Amazon and Jeff Bezos, who summed up this ethos perfectly when he said, “I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time.” Most of our greatest successes come through this mentality. Sales people will continue to sell, money will continue to be transferred, and development teams will continue to build software… just in new and better ways.
Cryptocurrencies, XR, machine learning, voice assistants, and autonomy will all be significant drivers of change over the next decade, and while individually they’ve all already begun to reshape our everyday lives, their combined potential impact and the specific outsized opportunities that will arise as a result are unclear. At Founders’ Co-op, we don’t chase these technology-driven opportunities in themselves, and instead back founders that leverage these emerging technologies to solve the tangible human problems of both today and tomorrow, the things that won’t change. We love founders that follow the customer and not the technology.
With that, unlike some other venture firms, we don’t expect the majority of our companies to fail. Good execution and meaningful value creation will in almost all cases create real value and outcomes that both investors and founders can celebrate. In this model, we also don’t model for the single outsized success that defines traditional venture, and because of that, we also may never return 10x our fund. But what we do expect, and enjoy, is consistently healthy returns and strong alignment with our founders. I am one of those founders, having raised my first $150k for Simply Measured from Founders’ Co-op’s first fund. Our founders are why we get up in the morning and why I’m taking on this new role.
Our model is not the only model for venture, but we evaluate our own strategy the same way we do our company’s. How will ICOs and other fundraising mechanisms change the seed stage investment world? With more liquidity, how far will the once clear line between investor and trader blur? We don’t know. But we do know that the best founders will continue to build the best companies, many of them in the Pacific Northwest, and we know how to help them.
If you are one of them, let’s talk.