The Generalist - How VCs Build Soft Power
🌟 Hey there! This is a subscriber-only edition of our premium newsletter designed to make you a better investor, founder, and technologist. Members get access to the strategies, tactics, and wisdom of exceptional investors and founders. Become a member today. Friends, In the land of venture capital, not all dollars are created equally. Though every bill possesses the same lineny texture, coveted color, and sensitive etching, each is bestowed with a distinctive gravity originating from its giver. Which is to say that receiving a $10 million investment from Founders Fund differs from receiving the same sum from an unheralded firm. That entrepreneurs and the wider ecosystem feel this shimmering variance is a testament to soft power’s role in matching talent and capital. Even the industry’s best-resourced shops rely on voice, reach, reputation, influence, and storytelling to attract opportunities and outmaneuver rivals. In many cases, it is a fund’s principal weapon. If you were to strip Andreessen Horowitz of its platform team or Sequoia Capital of its senior talent, each would find a way to win, such is the strength of their soft power. Soft power’s potency is matched only by the torpor with which it develops. It may take decades to burnish a reputation into a high sheen or chisel out a zone of influence, but it doesn’t have to. By developing a distinctive voice, leveraging the distributive reach of the Internet, and publishing differentiated work, even VCs in their first acts have been able to contrive a special magnetism, to draw boundaries around the beginnings of a personal monopoly. To understand how different managers construct soft power, we interviewed 17 notable investors. Some have been running firms and writing in public for over 20 years. Others are newer capital allocators but have already succeeded in standing out from the crowd, leveraging modern mediums and strategies. By learning about their approaches – including the trade-offs made and lessons learned – you’ll be ready to accelerate your soft power campaign. Although today’s guide is geared toward investors, its lessons are applicable to anyone interested in developing unique personal magnetism at scale. What to expect
This guide is the result of months of interviewing and research. It is designed to deliver Silicon Valley’s practitioners’ best advice and strategies in a single edition. Brought to you by MercuryIf Jony Ive built a banking* experience… I think it would look a lot like Mercury. The Generalist has been a Mercury customer for years, and I’m constantly awed by the platform’s beauty, thoughtfulness, and power. It’s become a core part of how we run our business and is probably the only banking product I find a genuine pleasure to use. Mercury’s banking experience isn’t just loved by The Generalist. 200K other startups trust it to simplify their finances and power essential workflows, like paying bills or sending invoices. By using Mercury, customers save time, get granular visibility into their finances, and have finer-toothed control over money movement. Apply in minutes today at mercury.com to simplify your finances and perform at your best. *Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC. Table of contents1. Rules of thumb
2. Find the right medium
3. Find the right strategy
4. The magic of soft power
Thank you to Tomasz Tunguz (Theory), Frank Rotman (QED), Michael Dempsey (Compound), Nikhil Basu-Trivedi (Footwork), Niki Scevak (Blackbird), Rex Woodbury (Daybreak), Sajith Pai (Blume), Sarah Guo (Conviction), Sarah Tavel (Benchmark), Ann Miura-Ko (Floodgate), Charles Hudson (Precursor Ventures), Logan Bartlett (Redpoint), Zoe Weinberg (Ex/ante), Alex Taussig (Lightspeed), Kyle Samani (Multicoin) Nathan Benaich (Air Street), and Molly Mielke (Moth) for sharing their insights for this issue of the Investors Guide series. 1. Rules of thumbBefore learning how to generate soft power, understanding why it’s valuable in a venture context is worthwhile. For much of the asset class’s history, having a strong public presence wasn’t necessary, given the relative lack of competition. When Ann Miura-Ko and Mike Maples formed Floodgate, for example, little marketing was required: Floodgate
As the asset class has grown, inviting greater and fiercer competition, the need to differentiate has increased, too. Critically, firms must do more than distinguish themselves – they must message those distinctions memorably, at scale. It is no good to hold a unique perspective or run an unusual model if entrepreneurs don’t know about it. Frank Rotman of QED and Logan Bartlett of Redpoint articulated the importance of differentiation in today’s venture market. QED
Redpoint
Creating that differentiation does not come easily. Many find it daunting to start “thinking in public,” either through writing, podcasts, or another medium. A few rules of thumb can help overcome initial nerves, find your unique voice, avoid blandness, and initiate the alchemical process. I wish I had known these before starting The Generalist, and as it happens, much of the advice VCs gave echoed it.
Lower your shipping threshold to startThere will always be a good reason not to write an article or record a podcast. It takes time, focus, possibly social or financial capital, and a degree of vulnerability. What if you say something stupid? What if an investor you admire disagrees with your fundamental premise? In the short term, there seems to be much more to lose than gain. Because of that, lowering your shipping threshold in the early days can be helpful. If you try to create something utterly perfect out of the gate – especially if creating is new to you – you’ll likely stall out. A folder full of half-completed, unpublished blog posts is a sign that you’re stuck in this pattern. When you notice you’re falling into this kind of a cycle, narrow the scope of your project, lower your threshold for publishing, and get something out the door. As Steve Jobs told the Macintosh team in 1983: “Real artists ship.” Sarah Guo is the founder of Conviction and the popular AI podcast No Priors. When she and co-host Elad Gil first weighed starting a creative collaboration, they explicitly considered devising a project they could commit to consistently shipping – even if it wasn’t perfect. Conviction
As with No Priors, you may quickly find that even your “side project” generates meaningful interest. Thinking in public may appear especially daunting for emerging, unproven managers. Who cares what I, a novice next to the industry’s luminaries, have to say? Benchmark’s Sarah Tavel, who began writing her popular blog in 2006 (now a Substack), flipped that framing: Benchmark
If you do not have an existing profile, lean into the freedom such a position affords. Keeping your shipping threshold low may not be a practice to hold on to forever. Though it’s important to getting started, once you have more confidence in your creative abilities and have demonstrated your willingness to ship, you may find it’s more productive to raise your shipping threshold to maintain a high-quality bar. ... Subscribe to The Generalist to unlock the rest.Become a paying subscriber of The Generalist to get access to this post and other subscriber-only content. A subscription gets you:
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