Six Sites

Today I had a meeting with an investor.

It wasn’t my first, nor will it be my last— well not unless this post earns me some “avoid” rating with the Secret Society of Investors. This meeting reminded me how much I hate investors. It had me second guessing what I’m working on, what I believe in and worse of all myself.

This seems to be what investors do. Well, not all of them, but the bulk of investors (or the people that like to pretend they are investors) that I’ve had the good “fortune” to meet. It seems like they take pleasure in cutting you down, making you feel as though you are somehow less important.

Like most things in my life, it reminds me of a Seinfeld episode, the one where George suddenly decides he wants to be an philanthropist since he has a check for $20,000 to the made-up Human Fund in hand.

He confesses his master plan to Jerry:
“I would have all this money, and people would love me. Then they would come to me… and beg! And if I felt like it, I would help them out. And then they would owe me big time! …first thing I’m gonna need is a driver.”

This pretty much summarizes my experience with investors so far: George Costanza’s on some sort of mission to prove their superiority simply because they have money and you don’t… and to be driven places.

I’m learning the hard way, that investors are like bad clients, but worse, they know even less. It seems like they think because they dumped a few million into a company a few times, and it got a good write up on TechCrunch, that makes them the supreme allied commander of the Web 2.0 army, that they are successful and I am not.

They assume if they haven’t heard of you, then you must be some yokel from Poughkeepsie just off the turnip truck. Surely I can’t know as much or more than you?

If I stuffed a Peugeot with $50 million dollars, does that make it a better car? Does it make me a genius because I could operate a shovel? No. It is still just a piece of shit car with $50 million dollars stuffed into it. The difference between me and an investor is I see a piece of shit car with a lot of wasted money. He sees it as a “good investment.”

I can’t tell you how many investment funded companies I’ve run into over the years that didn’t know the first thing about their business. But somehow they are getting millions and millions of dollars investment for some crappy idea that doesn’t have a chance in hell of being successful. I think investors like these types of companies because then they don’t look so bad.

On the other side I’ve seen of really great companies “fail” because the entrepreneurs just couldn’t play the game the way investors wanted. They refused to bend their vision to the will of whatever en vogue tech trend happens to be on CTO magazine this month. God forbid an entrepreneur tell an investor to take his horrible ideas and shove them up his ass where they belong.

Let’s take this completely bullshit conversation as a composite of the dialog between an investor and an entrepreneur:

Investor: “In order to reach profitability, we need to start making miniature giraffes.”
Entreprenuer: “You mean stuffed ones?
Investor: “No real ones.”
Entreprenuer: “Oookay. Lets talk about that. Tell me more about your idea.”
Investor: “Gartner has a new report (since the report cost $5,000, it’s got to be true) that says the miniature animals will be in high demand in the next three years. Everyone will want one. We need to be the market leader in miniature animals.”
Entreprenuer: “Well, I’m open to the idea. But—and hear me out here—we don’t make miniature animals. In fact we don’t even sell normal animals. We make software. “
Investor: “Yeah, so. Who doesn’t want a little tiny giraffe with every purchase?It will boost the bottom line.”
Entreprenuer: “Okay, let me look into that.”
Investor: “Great. So I should expect your execution strategy, say, next week?”
Entreprenuer: “Uh. Yeeeah. Sure.”

You know it’s true. You don’t think if we could make little cute giraffes that fit in our pocket, some investor somewhere wouldn’t be telling some poor schmuck to do it even though it had nothing to do with their business?

Which proves a theory I have, investors have no vision. None what-so-ever. How can I make such a bold claim without doing the required market research, writing a bullshit business plan, mission statement and execution strategy?

Because its simple common sense: if they had vision and money, then they would be fucking entrepreneurs!!!

The whole investor relationship is completely flawed. They have money and you don’t. That’s it. That is all there is to it. Money is the only thing they have to offer. I know they say they can provide a lot of advice and services as well. But the reality is that if you really needed those services, they probably wouldn’t be investing in you in the first place.

I’ve learned that money isn’t hard to get, in fact money is incredible easy to get. The hard part is getting the right ideas and the people to execute those ideas. If you have those two parts of the puzzle, money is easy part. The hard part is finding the right investor that believes in you and your company. It happens, but it isn’t easy.

Finding the right investor means you have to kiss a lot of frogs to find your prince. It means the startup is actually paying the highest cost of all, time. They are wasting their time kissing ass to a bunch of investors that don’t really give a shit, jumping through ridiculous hoops, like a trained monkey, to prove what most sane people already know.

Not to mention, chasing after investment means taking time away from the things that matter, having to work nights and weekends, being pulled away from our personal lives and families. Putting everything you have into an idea, a vision for a better world, at the cost of what? Watching your life pass you by.

Why? So we can give away 50% (or more ) of our company to some guys holding little bags with dollar signs on it? What the hell?

If you took out the passion for your product, for your work, and looked at the situation from a purely logical and business point of view, you’d see that it is insane to give up so much for so little. Selling off some of the greatest gifts mankind is endowed with, our spirit, our imagination, in exchange for a little bit a money, half your business, and having to listen to some douchebag tell you how to run your business.

Investors should be thanking us for coming to them. It won’t be long before the people with ideas won’t need investors at all. Seriously. It is a dying economy. I can build and get a product to market for next to nothing. If I have a good idea, and make smart decisions, I can be just as successful as the jerk that got $5m in VC.

Maybe I would be more successful if I had bags of cash, but I know at the end of the day that anything I earn is mine. The people that put their hearts and souls into it get their just rewards. I’m not doing this for the money, to create something new and wonderful, that might—just might—change the world.

That is the big win, not to have the big house, to have the nice non-Peugeot car, or to be bought by Google. But to have a legacy, to be able to point to something great, and say “I did that” “I helped people” or “I made the world a better place, by just a little bit.”

You may hate the idea of Apple’s App Store, this is the bit that I love the most, that is doesn’t take investment to innovate, to be recognized and make money from your work. That normal average guys with good ideas are rewarded handsomely, and at a rate much higher percentage than if they were investment funded.

Do you think the App Store will be the last model that builds an ecosystem that fosters innovation without needing investors? Hell no.

Anyway…

The funny thing is, I wasn’t meeting this investor to pitch anything. I wasn’t asking him for money, or even his advice. We were introduced by a mutual friend who thought we might enjoy getting to know each other. He showed up in sweatpants, I showed up in a suit coat. I listened patiently to his criticism as he belittled me in public telling me that “you can’t put lipstick on that pig.” The pig being my idea.

The quintessential investor meeting.

The irony is that he actually validated the need for the product that I was chatting about. One that attempts to foster the next generation of creativity and innovation, and taking dick investors like him, out of the equation entirely.

At any rate, I figure this post will probably kill my chances of getting in investment from 95% of the investors out there that belong to that Secret Society, which actually is fine by me. But if you are an investor in that 5%, one that wants to cut through the BS, change the world and make some money in the process, then give me a call and lets make it happen.

In the meantime I will keep doing what I’ve always done, continue to bootstrap innovation to build whatever is next.