There is a great post up on Techcrunch which gives Jack’s personal history and some of his views on founding companies and venture capital. There are also some quotes from his investor Fred Wilson which describe his view of venture capital as a service to entrepreneurs.
Their philosophy is to my mind very progressive. Not all VCs and entrepreneurs would subscribe to it, but in the majority of areas I most certainly would.
A few highlights
On Jack Dorsey’s attitude to stealth:
Jack pursued a strategy of: Don’t hide what you’re doing. If you think you’re doing something interesting, get it out in the open, shout it out from the rooftops, and solicit as much feedback and input as possible. This strategy was particularly relevant for an Internet-based consumer service like Twitter
Jack Dorsey on the importance of choosing a VC who you would like to have around the board table:
The way the company and the product gained traction was that we got the best people we could think of and we worked with them. And we wanted the same thing from our VC. We wanted the best person across the table from us. It was not where he comes from, but ‘Is this guy fun to work with? Is he going to challenge us? Is he smart?’ This person was going to take a seat on the board.
Fred Wilson on how he wants to be an entrepreneurs trusted advisor:
I want to be the person they call when they need some advice. Whether it’s ‘I’ve got a problem with sales’ or ‘We need to raise some more money. What do you think the right way is to go about doing that?’ Or, ‘I have this big deal. I’m nervous about it because I’m not sure we can actually meet the expectations. But I want the revenue. What do I do?’ Those are all big questions. The beauty of being a venture capitalist is we’ve seen all these issues a lot of times. I’ve been doing this business for a long time now and I’ve observed enough to know what’s happening and interpret it appropriately
Jack Dorsey on how he wants his VC to be deeply engaged in his business:
I would hate to have a VC investor to whom I just send an email to say, ‘I need a business development person. Can you make some introductions?’ I want a VC who is always thinking a few steps ahead of me. The type of VC who would say, ‘Well, I think we’re doing this, and therefore we might consider defining this new position in this way and therefore talking to this person”.
Jack Dorsey’s perspective on the value of open and direct dialogue with a VC:
We had a lot of conversations with people down in the Valley,” Jack said. “At the end of the pitch, the person across the table would say, ‘Well, we’ll let you know fairly soon, like in an hour or so. We just want to talk internally, but we’re really excited.’ We didn’t react well to that. We wanted to be questioned, we wanted to be challenged, and we wanted to see some of their thinking around actually developing this product.
For whatever reason, Jack found more of those challenging VCs on the East Coast than on the West Coast. “I think it was just an attitude thing,” he said. “I found the East Coast to be a little bit more aggressive. They say what they mean in the hopes of just moving on right away. On the West Coast, people were a little bit more laid back. If they thought we were going down the wrong path, they wouldn’t necessarily say it, but they might make it known in an indirect way. I just didn’t appreciate that at all.
Fred Wilson on the strange service relationship between VCs and entrpreneurs:
I think venture capitalists, first and foremost, need to feel like their job is to make entrepreneurs successful. So I think of venture capital as a service business. The entrepreneur is your client. It’s a very weird relationship because the entrepreneur is not exactly paying you, even though they really are paying you. But they absolutely can’t fire you. In fact, you can fire them. So it’s among the weirdest kinds of service relationships that one could come up with.
Most of the things here are challenging and hard to get right, for both the entrepreneur, but they describe the sort of relationship I aspire to and which I think gives both sides the best chance of success.