The Thing We All Talk About That Nobody Wants to Talk About
November 21, 2014
Let’s try an experiment. Try to guess who made the following statements below:
I long for products with an important mission that I can be inspired by, and that…I hope will be not only hugely financially rewarding but also make that real change in the world that our industry always strives for.
Values matter. A lot….It matters and is at the core of building great companies. The kind of companies I like to talk about when people ask me about my best investments.
What I do like to see is a company that has a mission that transcends just making money. There’s a sense that if we don’t do it at this company, nobody will.
If you guessed something from the social enterprise, impact investing, philanthropic, double-bottom-line world, guess again. The above quotes come from Mark Suster, Fred Wilson, and Peter Thiel, respectively.
Because I tend to get the same set of questions in most meetings, I’ve started experimenting with terminology to see how people react to different versions of the same answers.
One of those experiments is around how I describe our investment thesis at Collaborative Fund, particularly how we define impact.
If I say “social impact”, I get responses like “Do you guys invest in nonprofits?”, “Do you look for financial returns?”, and “Wait, but you’re still a VC, right?”. The immediate assumption is that we’re making a financial tradeoff of some sort.
If I say “making the world a better place”, or “companies that are changing the world”, I get mostly eyerolls, polite smiles, or cynicism (“Don’t all VCs say that?”).
What I’ve settled on, for the time being anyway, is using terms that the startup ecosystem is used to, namely “mission”, “values”, or “vision”. I talk about founders who have a clear vision for where the world is going and how they will contribute, who form hypotheses proactively rather than reactively, and who have strong company values.
In short, we look for founders who stand for something. Not something they think they’re supposed to stand for (whether they’re a clothing company or providing microloans in Southeast Asia), but something that is uniquely believed by them. That’s the first step towards impact.
I have a couple of personal goals with my work, and one of them is to convince founders and investors that we are all, in fact, obsessed with (dare I say it?) social impact. It’s why we’re captivated by people like Elon Musk or Peter Thiel, who are working on big problems that shape society. It’s why VCs like Fred Wilson or Mark Suster are energized by founders who talk about mission and values.
I suspect that what Silicon Valley cares about isn’t actually so different from our nonprofit brethren after all. We just have to call it by the right name.