Focus

This is part of a series of posts capturing my thoughts during the Jewish High Holidays and the new year, as we emerge from the pandemic.

We talk a lot about focus in the start-up world. Founders hear this advice all the time: you need to focus. On product development so you can ship on time. On customer engagement so you can find product-market fit. On sales so you can hit your numbers. All true. And yet, it feels like something is missing…

At the early stages of the company, the most valuable asset is the team. All investors say that they invest in people, but I have come to realize that means different things to each of us. We look for passionate teams who want to make a positive impact on the world. These usually take time.

It typically takes years to transform a startup from a fantasy into a real business. Sure, there are small milestones along the way that help make the startup more real, but the road to reality is long. Be prepared!

Eric Paley on Twitter @epaley, Oct 7, 2021

So we need to consider what “focus” really means in this context. I’ll share a couple of thoughts here as I relearn how they apply to me.

Short-term vs Long-term

Focus is often misconstrued as short-term thinking. That is simply untrue. Long- or Short-term thinking relate to the goals you set for yourself. 30/60/90 goals will be different than annual or legacy type goals. Focus is about taking the steps that will move you closer to those goals. It is the trade-off between what you can do right now to move yourself forward, no matter which goal you are pursuing.

Many times the actual number of options and possible outcomes could lead to decision paralysis. So we just go with the flow. Sticking to our comfort zones and knocking out the easy tasks. We often fool ourselves that we are being productive because the number of items being checked off the list is longer than those remaining, despite knowing the outstanding tasks are more challenging.

In a great blog post, in which he shares his personal story about selling his company to Salesforce, Mark Suster asks the following questions:

How do you process your company’s biggest decisions? How do you live with uncertainty and stay focused?

Mark Suster, Both Sides of the Table, Oct 9, 2013

Mark goes on to share what works for him (music and running) to create that focus. It doesn’t matter what works for you (though some activities are more positive than others) the key is disconnecting from the grind, from being in the weeds, and letting your mind wander. Then when you are ready to refocus, it will be even sharper.

Take the Day Off!

In our pitch-deck, when raising capital from LPs, we state that we take a day off each week and encourage our portfolio founders to do the same. For me this is Sabbath, the 7th day, and is done as part of a greater set of beliefs. But the research around the importance of this practice has been validated many times over.

Being overworked and stressed does not lead to better productivity or superior results. How much has been written about the importance of better work-life balance over the past decade? – Breaks provide a boost to energy, renewed focus and enable greater creativity. Taking a step back, removed from the details, and then reengaging makes a world of difference.

This is true for vacation time as well.

I’ll share a personal example. The other night, in the middle of the week, I decided to watch a movie with my son. He is into cinema and we often discuss some of the classics which my dad forced me to watch with him usually late at night when I had an early start the next day (Thank you Abba!). My son had been home for the Sukkot holiday and happened to have no plans for the evening. It was an opportunity that I decided to be spontaneous about.

We watched the Maltese Falcon. Still a great movie, with powerful acting and terrible stereotypes (and still not as good as Casablanca!). The clearer picture (saw it originally on the ~28″ CRT that we had growing up) actually made it easier to follow the plot and helped appreciate the acting even more.

Besides the quality father-son time and another topic we can discuss next time we have a long car ride, I found that taking the evening off really did make a difference. I had more energy and clear-mindedness the next day which helped me focus. It was extremely productive. I guess I was not practicing what I preach as well as I could have been.

Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.

Ferris Bueller, Ferris Bueller’s Day Off

One of my favorite quotes from one of my favorite movies. Words to live by. Of course, the problem came later in the day when I was tempted to close my laptop a little earlier and head back in front of a screen to see what else I might be able to enjoy. I didn’t. I stayed focused. But I will definitely be looking to add some of that “down” time into my routine so that I can enjoy the benefits.

I suggest that you do too.

Another VC Fund?!

I’ve been spending a lot of time thinking about what differentiates us as an investor. This was triggered from two different directions. The first is the explosion of new venture funds. It seems everyone I talk to is raising a fund these days. The tech media headlines indicate lots of capital looking to be deployed, at all stages. Differentiating your product is necessary to stand out in a crowded market.

The second, and more important consideration is rather from the other side of the table – why would a founding team choose us as an investor in their company? To be clear, it is a founder’s market today. These large amounts of capital looking to be put to work has led to a rise in valuations and we are seeing deals closing faster than ever (at least for the 15 years I’ve been exposed to venture, I was focused elsewhere in the late ’90s – early ’00s).

[As an aside, the above concerns me because it seems that one of two things are behind it. Either investors are making bets (no other word for it) without doing the necessary diligence. Or, investors are backing “cookie-cutter” founders without considering the hidden-potential of diversifying across first-time founders, female founders or minority founders. Others have written at length about these meaningful topics so I will refrain from digging in here, though that should not diminish from the importance of the conversation.]

Coming back to thoughts on differentiating SapirVP as an investor, we always refer to our tagline of: “Mentorship Driven Investing”. Is this really differentiated? – Today it seems that every micro-VC team claims to be “founder friendly” and “value-add” investors. Are statements like these based on the assumption that every other fund is not adding value? Only emerging managers can add value?

Maybe. We have all met investors who were less engaged and less helpful. These are probably not good early-stage start-up investors, or not a good fit for the company. Some advance diligence regarding the investor may have helped the company avoid that experience. Maybe not. Either way, these investors are not the majority and the market forces should be working against bad players so that they don’t stick around for long (though performance cycles in venture are long, so this is all relative). Most investors, even those who have already had great success and have $B AUM, are in this business to add value. As it should be, because: Venture Capital is a service business.

We only have two types of customers: Founders and LPs.

For LPs the service is primarily financial – take their capital, invest it, report on your progress and do your best to return exciting multiples within a reasonable timeframe. Some LPs are looking to create impact, increase diversity or identify potential strategic value. However, for most LPs the transaction is a financial investment at its core. The service elements here seem clear. Good GPs will be transparent and can stand out by offering unique opportunities of value creation for the LP. While popular in all VC pitch decks, I am not sure that a “unique” investment thesis is enough of a differentiation in today’s market. It is probably more important to show “product-market fit” between the fund (team, size, geography, focus) and the strategy.

Founders should also be sure that they are getting a service. The service level should fit the needs of the company. Industry expertise as well as stage expertise. A biotech spin-out from MIT establishing a scientific innovation as a commercial offering needs a different type of “added-value” than a Series A consumer product company looking for hyper-growth. Some founding teams are seeking the “roll up our sleeves” hands-on involvement to navigate the early-stage foundation-forming period, while others are content with taking capital from an investor and then only engaging with them once a year for the annual update (I advise all founders against this, for various additional reasons detailed in a separate post).

Founders should choose carefully which investors they choose to engage. Not all capital is equal.

The most common term thrown around by VCs is that they are “founder friendly”. Like many informal terms, this seems to mean different things to different people. I’ve found that the gap between speaker and audience can be pretty big when it comes to understanding what this term means.

For us this means that we recognize that the founders are the company. The investor is just along for the ride. Our mission is to find the best way to add value during the different stages of the journey. This can vary from team to team and from company to company. This is what we mean by “Mentorship Driven Investing”. It is a tailored experience, based on the core foundations of our mentorship-model, establishing this relationship even before we invest.

I just threw out another vague term…. Let’s unpack this further.

I’ve come to define Mentorship as the combination of Experience and Empathy. Experience is valuable, but it needs to be shared in a way that it can be received and make a difference. Sitting around telling stories of your glory days will provide few practical tools/lessons for a founder. Using a story to illustrate a situation or share a new perspective will create new neural connections and inspire innovative thinking.

Mentorship is showing, not telling. The mentor serves as a personal example and as a guide. But you can’t just do it for someone else, as they will never learn to do it themselves. And you don’t need to have all the answers. Just ask thoughtful and thought-provoking questions.

The mentor should always be there to help pick up the pieces and help make course corrections. Mistakes will be made and **** happens. It is not about you (or your ego), it is about the founders building an amazing company.

Mentorship is not about being a friend. Friendships may (and should) develop. But the mentor need not try to be a friend, especially if it will make it impossible to have the necessary open conversations about what is best for the company. A mentor is also not a teacher, at least not in the sense of making rules, handing out tasks or giving exams. Inspiring creative thinking and continued learning are great.

I think that we embrace the service mentality in a unique way, but we don’t say “founder friendly”. How then should we convey this to the world?

Earlier this week, my friend Shimon – a successful serial founder/CEO – told me that he thinks that we are “Founder Respectful”. He said some very nice things about our approach vs some of the investors he has dealt with. My takeaway from that conversation is that the empathy element we incorporate into these relationships – as mentors, not friends or investors – is where we truly stand out. It makes all the difference to the founder. This in turn gives the company a better chance of success. Said success should result in those multiples of returns we look to provide to our other customers, the LPs.

Creating alignment across the LP-GP-Founder ecosystem. Multitiered value-add. Practicing what everyone preaches: “It is all about the people.

Mission: Impossible?

When engaging with entrepreneurs trying to change the world, we look for people who are on a mission. We are not unique in using these buzzwords as many other investors also claim to back “mission driven founders”. So, for the sake of clarity (and transparency in the industry), we wanted to break down what “mission-driven” means to us at Sapir.

Let’s start with the formal definition offered by a Google search:

a formal summary of the aims and values of a company, organization, or individual.
“a mission statement to which all employees can subscribe”

Google

Even with such a simple definition there is already a lot here for us to unpack.

formal summary – indicates it should be crafted with a formal tone and language but in brief form rather than War and Peace.

aims and values – this is the core of the statement as it is the message you are conveying in the to grab the attention of your audience and connect with them around what truly matters.

statement – I recommend one sentence. It can be a long sentence, but the message needs to stay brief.

all… can subscribe – the end product needs to inspire and drive to action.

With this in mind we would like to propose some practical steps to create this monumental sentence so it is deserving of being called a Statement.

1. Define your purpose. What are you setting out to do? How will you be changing the world and making it a better place? Why does the world need your company? Why now? – If you have read our previous posts about your company’s Vision and how to create one then you have already developed this core material.

2. Drill down to first principles. Get specific around what is important to you as far was what you want to achieve and the values that guide you in your pursuit of these aspirations. First principles make it easier to quickly comprehend your message.

3. Create inspiration and drive action. A call to arms, so to speak. This statement will be the rallying call that introduces or reminds the audience of the grander (and longer) vision each time they hear or see it.

4. Iterate until you have a single comprehensible sentence.

Your Missions Statement is not your vision. It is not a grand description of the utopian future you are creating or a list of your core values. It is not even your Why. These are all different components of your corporate culture and each piece plays a different part. I’ll illustrate how you can use your mission statement with a personal story.

After 4 months of basic training and 3 months of advanced training our infantry platoon was stationed at an outpost along the Israel-Lebanon border. Our training had included seminars on ethics and conduct, not to mention the code-of-honor drilled into our minds throughout, balanced with the need for a military force to defend the Jewish people (the IDF is the most moral and ethical military force in the world!). But despite all of this advanced preparation, in every mess hall and briefing room there was a sign that said: “Protect the Northern Towns!”

A brief history can be found here, but ultimately we knew we were there so as to guarantee that civilians living in a town or in a kibbutz a couple of kilometers away could do so peacefully. And yet, every time we walked into the room, we had that super simple three-word statement front and center reminding us of all the other details – values, purpose, training, etc. – without needing anyone to repeat them all again.

The Mission Statement is concise because it can be if there is a strong vision shared in advance which incorporates the grand purpose and core values so it does not need to iterate them again. Rather it is a sentence that reminds those who know already and captures the attention of those who do not yet so they will want to learn more.

It is also important to emphasize that your Mission Statement is not your Elevator Pitch. We plan to discuss the Elevator Pitch in a separate post. The Mission Statement can be part of your Elevator Pitch, but it is still just one sentence so at most it would be 10 seconds worth of your 1 minute elevator ride.

As a final note, you can have multiple mission statements geared towards different audiences. Though the core should remain the same and thus the different versions are similar, the emphasis can be adjusted to best address an employee or a customer or an investor.

Sapir Venture Partners empowers Israeli founders solving grand problems by leveraging deep-technology and cutting-edge science, while holding themselves to core inspirational values with which we align allowing us to provide mentorship at the early stages of their journey to create a positive global impact.

Sapir Venture Partners

This is our mission statement.

Super Vision

In a previous post we discussed the need for a strong Vision as a way to inspire people to join you in your pursuit of making the world a better place. It is an important part of your story which can be used to attract talent, customers and investors.

How do you create your Vision? – We share here a 3-step process to get you started.

First you need to understand what your Vision is. Read this post.

Next, I recommend answering the following 4 questions which I have used with dozens of founders in my sessions at MassChallenge. The best results will come if you can be honest and detailed in your answers.

1. Purpose: What is my company’s reason for existing? Why do what I’m are doing? Why now?

2. Values: Why do it this way? What are the values by which we operate and which will guide us as we pursue our goals? How do we do it better/different than everyone else?

3. Impact: What is the ultimate impact we want to have on the world? What is the utopian future we are creating?

4. Customer: Who is my customer? Why does my customer need me? What do I need to be able to provide so as to allow my customer to benefit from what I offer?

If you are a team of founders then using brainstorming techniques to develop your answers will be very helpful once you have each answered these questions individually.

Some tips for getting good results when answering these questions:

  • Keep it simple and clear
  • Think long-term (5-10 years out)
  • Dream big yet stay rooted to reality
  • Focus on factors that will drive success
  • Make sure you can convey your answers with conviction

The last step is to test and refine till you are happy with your end result. One way to test yourself is to try and define specific goals and metrics by which you can evaluate the realization of your vision. If you can’t identify these yourself then, most probably, others will not be able to do so either. Another test to share your vision with others – family, friends, mentors, etc. – and get their feedback. Did they react with a resounding “can I join you?” or were they more like “ok, good luck!”?

Developing a strong vision for your company will take numerous revisions. It is a process that ultimately tells a story across time – where you have been, where you are today and where you want to be in the future – which requires iteration to both hone the message and learn to convey it passionately.

The final product of these exercises is intended to be a paragraph or two, not necessarily a single sentence or statement. It should be future based – aspirational and motivating. It should be a clear message which drives your business forward. These will in turn be used to further develop your Mission Statement (one sentence) and Elevator pitch (1 minute). We will cover these in future posts.

Does my company need a Vision?

Simon Sinek, in what has become one of the most watched TED talks ever, explains his theory of “Start with Why”. The talk captures the key message of his book by the same name. At the core of Simon’s explanation for motivating people to take action, is the simple understanding that people want to do something that has meaning. They want to be a part of something that they feel is meaningful.

As a founder you are always selling. You are selling to your customers, obviously. But you are also selling to your corporate partners and to your investors. You are also selling when you search for top talent to join your team as you hire them and then motivate them to stay and perform. We will explore this further in a separate post.

But what are you selling? Especially in the early days when there is as of yet no product/service to be shared?

You are selling your vision. You are sharing your personal “why?” and motivating people to support you in pursuing it. It can be as grand as you like. Actually, it should be almost unbelievable. But only “almost”. There needs to be a sense that the vision is rooted in reality, no matter how high the aspirations, so that it can be believable. We follow visionaries because we want to be a part of the type of world they describe and which we believe is attainable.

The first step is for you to understand your “why?” – why do you do what you do? Why did you decide to dedicate yourself to doing this? And why do it in this way rather than alternative options to achieving your goals? – Simon says: People don’t buy what you do, they buy why you do it…

Asking these questions should help distill the core purpose you are trying to achieve along with the core values that drive you achieve it in the first place. They will also allow you to map out the general path by which you decide to travel on your journey to make it a reality.

In their important article – Building Your Company’s Vision (Harvard Business Review, 2000) – James C. Collins and Jerry I. Porras build a two-layer framework in which to insert these answers as you create your company’s vision.

Collins and Porras define the first layer as your Core Ideology. This layer is comprised of your Core Values and your Core Purpose. Your Core Values are the handful of guiding principles by which the company navigates. They are used to weigh decisions on a moral level. E.g. – first do no harm. Your Core Purpose is your organization’s most fundamental reason for being. For example, when we started Sapir Venture Partners we first needed to answer the question – why does the world need another early stage venture fund? – This forced us to map out the ecosystem and define where we add value. From this we crafted our investment thesis against which we evaluate every investment opportunity we consider.

The second layer is defined as your Envisioned Future. This layer is comprised of your Monumental Goals and a Vivid Description of life once these goals are achieved.

The first layer, your Core Ideology is a fundamental part of your “why”. By layering in the Envisioned Future you are beginning to craft your story to be shared with the world.

The key word here is story. An audience can relate to a story. They can connect to it and even try to see themselves as a part of it. This is what happens when you read a good book. You can see yourself as the protagonist and experience the adventure first-hand.

Great storytelling is an art. It is a skill we all learn at an early age. But there is a difference between good storytelling and great storytelling. The key to great storytelling is connecting to people on an emotional level. Use your own feelings, dreams, aspirations to generate reactions from others. This will attract people who feel the same way and aspire to the same outcome.

Using a personal experience is the most genuine way to do this. Sharing an experience that made you feel a certain way will immediately create a “hook” for someone who can relate, either because they have been through it themselves or because they can empathize. But this can be a hard thing to do as it requires opening up about things that may not always be easy to share. For example, if you are driven to cure cancer because someone you love suffered from the disease or if you were driven to create change because of a personal failure you experienced in the past. Retelling this story in an inspiring way will surely be challenging for you emotionally as you relive the pain each time. It could certainly not be fun to tell this story hundreds of times before complete strangers while asking them for something in return.

Another key to great storytelling is iteration. Practice makes perfect. Each time you tell the story you get better at it. You learn from how the audience reacts to certain parts whether you are sharing too much detail (this is always the hardest part for me to overcome) or you rush the outcome to get to the punchline. Timing, pace and passion will reel your audience in.

Another important tip I recommend to all founders is that you create multiple “hooks” in your story. You usually will not know in advance which hook will catch any given member of your audience. By creating multiple hooks you are essentially spreading a wider net (see what I did there? Mixing fishing metaphors!) to catch more of your audience but also allow an individual to hone in on the element that is most attractive to them within your story. An investor is usually looking for a path towards outstanding financial returns. But they could also be interested in supporting a potential global change in a field that is dear to their heart or back a breakthrough cure to a disease that afflicted someone they care about. You never know. So add hooks to your story and then watch how they respond and listen carefully to their feedback so you can emphasize the elements that most appeal to that audience when you continue the conversation.

A founder telling a great story can inspire others to act – build, invest, buy, sell – so this is a critical skill for a founder/CEO to master.

Another blog?!

Why do we need another blog?

This is a good question and one I have been asking myself for a while. We already suffer from information overload. Entire industries have been turned upside down through the democratization of knowledge. And now we have crowdsourcing and AI and machine learning, etc. So do we really need another blog?

On the other hand, research has shown what we intuitively assumed regarding the positive impact of a good teacher. If you had one, you know what I am talking about. Mine was my eleventh-grade math teacher. Along those lines I truly believe in the power of a good mentor. Many will agree, but it is not always easy to practice. I have been lucky to have several special individuals to learn from in my life. I always tried to learn from each role-model, boss, commander and from my peers with whom I’ve had the privilege of working with or for.

A good mentor can truly make a difference. I have been practicing mentorship myself, in one form or another, since I was in high school when I became a counselor in the Bnei Akiva youth organization. But I was probably doing it even before.

I can clearly state that I enjoy it. I like to listen and learn. I love to analyze and brainstorm. This is what good mentoring is all about. A great teacher creates curiosity and a drive to explore by asking questions and challenging assumptions. A mentor can funnel this towards personal success, corporate success and exceptional achievement.

My personal enjoyment would not be a good enough reason to mentor (or blog about it) but over the past few years I have come to realize that I am actually pretty good at it. More and more people whom I have had the privilege to work with and mentor have shared feedback that is overwhelmingly positive. This led to the realization that maybe I should be doing this professionally.

That is why we launched Sapir Venture Partners. We focus on the types of companies – founders, stage, science, technology – where we can truly be of value as mentors. We are a mentorship driven firm and invest accordingly.

However a fund is limited in scale by design. There are only so many companies we can work with and provide the value we intend to before our team is overextended. And so on a recommendation from a few friends over at MassChallenge I have decided to share what I can through this medium. Everyone is always suggesting we grab coffee so they can get my thoughts on their company/product/career/etc. So hopefully I can share some of that here for even less than a cup of coffee.

We will write about our view of the world and share what we are seeing in the tech industry. Naturally our focus will be on early stage tech investing in science and technology companies with ties to Israel. But not just. We plan to share more on topics that apply generally but which we believe are important to founders at the early stages such as product-market fit, founding teams, HR, IP, innovation and fund raising (of course).

We would also like to hear from you. We welcome your questions and will hopefully be able to address them in future posts. Write to us at: [email protected]

Thanks for reading.

Aaron