Investor Stories 27: Exceptional Founders (Shah, Gurrieri, Penchina)

*Please excuse any errors in the below transcript

Nick: On today’s special segment, we have #Semil Shah of the Haystack Fund. Semil, have you had the pleasure of working with or investing in an exceptional founder? If so, can you talk about what made that entrepreneur so great and highlight the aspects that make founders exceptional?

Semil: I would say the C.E.O. of #Instacart, #Apoorva Mehta… When I look back on the emails of when I asked him less in the company they’re like embarrassing because I was asking him all these question and I just started investing. So I think it was like my third investment but having observed him before then and now, he’s extremely technical, he’s extremely data driven and he’s obsessive about company culture, he’s very focused in terms of like having a plan and just executing on it like he just doesn’t get distracted by other stuff. He is willing to do kind of crazy work like I think #Trader Joe’s in the beginning told Instacart to buzz off and they went and hired a contractor to buy every skew in Trader Joe’s and they set up an ad hoc photo studio and they took a picture of every item inside Trader Joe’s.

Nick: Wow!

Semil: And then when he says executive team rolls out other cities. Like I remember asking him like, “How are you going to roll out the other cities? Are you going to move there?” He says. “No, it’ll all be software.” He’s like, “Eventually, in the future someone opens up Memphis, I don’t even meet them. They go to Memphis, they open up the page and the software walks them through how to set up the city.” And then also just underneath the fund raising prowess, like he just knows how to tell a very crisp long term story to investors that he’s always had more money offer to him than he’s ever taken. So, he’s just in an elite… You know, has a potential for an elite player.

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Nick: On today’s special segment, we have Sergio Gurrieri of Tech Coast Angels. Sergio, have you had the pleasure of working with or investing in an exceptional founder? And if so, can you talk about what made that entrepreneur so great and unique?

Sergio: Of course. So, again, I like to go back to the Savara story. And, again, a strong company starts with a strong CEO. So the CEO of Savara is Rob Neville, and the reason why I think he’s been so successful so far is because, first of all, his personality. He’s definitely very knowledgeable, he reads a lot. Even if life science is not necessarily his background, you could never tell. You need to spend hours and hours of weeks with him to understand that he’s original. Maybe expertise was self-taught. You could never tell.

So he’s very knowledgeable about the space, very surprising for somebody coming from a different industry, but he’s also very charismatic but at the same time trustworthy. So charismatic sometimes comes with the mask, with appearance. He’s someone who’s really genuine. He really cares about his patients, because he’s developing a drug for cystic fibrosis patients, and also he cares about his shareholders. He—you know, if you hear him talk, he always talks about what’s in the interest of his shareholders. His morals and ethics are very, very strong, and that’s his persona. He always has a very clear plan that I right to be executed.

However, that’s not enough. Because you could have a beautiful plan, but your plan—sometimes, here, your plan isn’t necessarily gonna hold when actually you end up encountering your enemy, which is real life or your customers or in this case you’re real patient. So he’s really excellent in terms of risk management. Because there will be a rainy day, so what do you do when it rains? So he always, what I like about him, he always has a Plan B and sometimes even Plan C. so he wants to have multiple options so that one or the other’s going to work. We don’t know which one, but one or the other. Hopefully it’s gonna be Plan A, but if Plan A doesn’t work, we have other options.

And then his communications skills are just, really, really outstanding. Verbal skills, written skills. He’s very diligent. He will spend hours and hours with individual shareholders. And, by the way, because the company’s been so successful, I believe by now he has probably hundreds of shareholders. Very large number of angel investors. But that’s not it. He’s got a little scheme in the game. So that means he invested in Savara even before he became their CEO. So he had invested hundreds of thousands of dollars of his own cash when he became CEO.

And then, another factor which is important is history of success. So he was actually able to sell his previous company for over a hundred million dollars with a single round of angel financing of only two million dollars. So basically that venture results in a 27x return for the investors. So that was a great story, and I think he’s probably the best CEO I’m having the pleasure to work with.

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Nick: On today’s special segment, we have Gil Penchina. Gil have you had the pleasure of working with or investing in an exceptional founder? And if so, can you talk about what made that entrepreneur so great and unique?
Gil: Gosh, there’s so many. So I met with Slava at Indiegogo yesterday. And he was walking me through the company’s values and mission statement about—they’re a fundraising company. They help you raise money for almost anything. They had the first crowdfunded baby, where a woman raised ten thousand dollars for IVF. And they have movies and art and music being fundraised, and really good electronics toys, and drones, and all kinds of stuff. And what I found fascinating about Slava’s description was how early in the process they had missions and value statements. A lot of startups I work with, they find a customer need, they develop a product, they rate, they rate, they rate—they are a hundred people, and they’re like “Wait a minute, we have all these people and they don’t know what we’re about.” Whereas for Slava, I think the mission was sort of core to what Indiegogo was trying to do. And has been embedded in the company for a really long time.
And you can say the same thing about Reid Hoffman at LinkedIn, who when he started said it’s about the network. It’s about your relationships. People like Reid and I and others spend lots of time helping people and connecting people and trying to keep our social network, our business network active, and Reid’s whole point was we’re all doing this. If we could do it simpler and faster and easier, maybe more people could benefit from this because they could find a simple way to do it. So he had that mission early on of what his idea, what he wanted to do. I think that’s very powerful.
There are other entrepreneurs that are just more execution focused, and they’re like “I will run over people. Don’t—I’m just gonna keep doing and doing and doing.” And, you know, my joke is we throw spaghetti against the wall and we just we what sticks. And we throw more spaghetti and we throw more spaghetti. And all we do is, you know, throw spaghetti. And so I love people like that too because they have this drive and this grit and this inability to give up and my favorite quote on that one was—actually I was at a conference talking on a panel with Craig Newmark from Craigslist. And some reporter asked him afterwards “Craig, how do you account for your amazing overnight success?” and he looked at the reporter and said “Five years later, I’m an overnight success.” And when I talked about it with him afterwards, and I’ve since talked about it with a number of other entrepreneurs like that, came with this consistent story of “I worked for years in the desert. No one cared about what I did. My mom was embarrassed to tell people what I did. My friends thought I was lame. I got all this negative feedback from year after year after year. And then overnight something happened and I was a genius. And I haven’t changed. What I do hasn’t changed. And my company hasn’t changed. What changed?”
And, to some degree, sitting here in this interview, I feel like that too. Right, I’m still doing all the same things I was doing last year and the year before, but last year I was doing it—2013 I was doing it mostly by myself, today I’m doing it with two thousand people. And what I’m doing hasn’t changed.
Nick: Yeah, it’s kind of like when the startup becomes a success, then everyone gets it, and everyone all a sudden is onboard. But before, nobody believes it, nobody even acknowledges.
Gil: Yeah, it’s worse than that, right. So during that time in the wilderness, in the desert, everyone tells you you’re an idiot.
Nick: Yep.
Gil: I mean, like “What a dumb idea. Who would ever do that?” You know, like, it’s so easy. Nine people are gonna copy you and you go “Wait a minute, I’m confused. You told me it’s stupid and then you told me nine people are gonna copy me, which is it?” and the answer a lot of times is both. But—and it’s literally an exercise in grit, and determination, and inability to give up in the face of very clear signals from the universe that what you’re doing it a bad idea. And you just keep doing it because you believe.
Nick: Now it was Sam Altman, maybe, that said that all the best ideas are black swans in the beginning.
Gil: Yeah, well, because the obvious ideas are obvious. Lots of people go do them.