October 2, 2013
People love to complain about the constant moving around of talent within StartupLand.
It can indeed be frustrating…in competitive labor markets people are always looking for the new, shinier, more exciting thing, and sometimes it feels like loyalty and commitment is a concept that is no more relevant today than dot matrix printing.
But that mobility of talent is merely the other edge of the sword of company formation and growth, as every great new idea is hatched by someone who seconds before that eureka moment was doing something else. Every great co-founder and every critical early employee comes from doing great things somewhere else.
At the end of the day, this mobility of talent is a critical enabler of this ecosystem that drives our economy. Last week I had a series of reminders of that.
First, I learned that the VP of Engineering at one of our best performing companies was leaving. I originally was astonished that he would leave this awesome company where he played such a key role. Then I found out he was joining a good friend as co-founder of a new company that already had VC backing secured. The circle of entrepreneurial life continues. As a gear in the engine of innovation, I’d be kind of a hypocrite to criticize that choice, wouldn’t I?
Then later that day I had a great conversation w/ a new friend – Guy Livingstone, who is a co-founder of ToughMudder. (If you don’t know what ToughMudder is, go check it out. It’s a fascinating business and one of the fastest growing and most wildly financially successful startups you’ve come across in a long time. All built on precisely $0 of venture capital. Nice.).
ToughMudder has gotten to the point where it’s started to spin off talent who go on to form new companies. As Guy was speaking about the phenomenon, I was surprised to hear him speak not of frustration at losing some key talent, but rather describe it as one of the most satisfying elements of his experience as a co-founder. He spoke with genuine pride of the talent of this group of newly minted entrepreneurs, and said he was excited to invest with some of them and partner with them as they build. How’s that for embracing the circle of life?
Finally, and most significantly, a great new company called MakeSpace launched last week. If you want to know the MakeSpace story, go read Mark Suster’s great post from last Wednesday. We’re thrilled to join Mark as seed investors in MakeSpace and think it’s an ingenious model that will become an important business.
But for me, it’s much more than that. This investment was a very personal one, because of one of the MakeSpace co-founders, Rahul Gandhi.
I hired Rahul in late 2010 as an Associate at High Peaks. Rahul was a talented guy who was absolutely determined to get into the venture business. 2010 was probably one of the worst years in history to try to get a VC gig. A talented guy with a great background in banking and then big tech company corporate development, Rahul had graduated from Columbia Business School in May 2010 and turned down every non-VC opportunity that came along. He knew what he wanted, and was determined to hold out. This is not a guy with a trust fund to fall back on as he ran his process – Rahul needed to work. So he scrapped together some consulting opportunities, made a few bucks, and then walked into our office one day and all but insisted (in his unbelievably gracious way) that we let him start working for us. For free.
Seemed like a pretty good deal, so we did. And in about 6 weeks he made himself absolutely indispensable. So we hired him for real, and over the course of the next 32 months he busted his ass like nobody I’ve ever seen. He very quickly distinguished himself as hands down the hardest worker, the best attitude, the most helpful colleague I’ve ever had the pleasure of working with.
And over the course of those 32 months of absolutely killing himself for our firm, Rahul simultaneously became one of the most well-connected, respected, and just flat out best liked guys in the NYC tech scene.
He made an enormous impact on our firm, bringing in some terrific deals, connecting us with fantastic new people, and overall helping us raise the profile of the firm. I heard at least three times/week something along the lines of “man, what a great guy Rahul is!” I regularly told people that he was actually the most important person in the firm.
Then in June he told me that the MakeSpace opportunity had presented itself. In classic Rahul fashion, he got poached out of his own incredibly effective due diligence process. He had done such an amazing job of nurturing our firm’s relationship with co-founder Sam Rosen, and brought such insight to Sam through his work in helping him shape the business, that Sam finally (and very intelligently!) woke up and said “hey, I want you over here on this side of the table with me.” Could there be any more powerful statement of the effectiveness and value of a VC’s work with a company than that?
For me, it was a total kick to the gut. For about a day I thought he was insane, and I felt a little deserted.
But I quickly came to see things the way Guy sees them with his ToughMudder colleagues. Rahul had passion for this idea. He had a chance to be a co-founder at an exciting and well-backed opportunity. He had learned and grown a boatload in his time as a VC. But could I honestly tell him he would learn more over the next few years staying with us than jumping over with Sam? No way.
So I didn’t try that hard to talk him out of it, and ultimately I’m thrilled to see Rahul spreading his entrepreneurial wings further. I’m also thrilled for High Peaks to be a major shareholder. Trust me, buying a piece of whatever Rahul Gandhi is doing is a very good bet. While we had been doing our work and were interested in the business before Rahul decided to join, when he committed to joining, we stopped our work. Because in this business, it’s all about the people who make it happen. And we knew that with Rahul and Sam, we had a team for whom failure simply was not an option. I had seen it firsthand.
So I write this today to celebrate the launch of MakeSpace and the launch of Rahul & Sam’s entrepreneurial journey. But more than anything, I write it to celebrate the startup circle of life. This is an ecosystem built on talent, and great talent moves to great opportunities. As founders and investors, we need to acknowledge and celebrate that reality and, like Guy, look at it as an opportunity rather than a threat.