Which Curve Are We On? [A User’s Guide To VC Meetings]
Weibull analysis is a great tool and an even better analogy. Simply put, it addresses the question: “based on few, early data points, which curve are we likely on?” I think about it a lot when I have the chance to learn about a business or meet new people and think we all do to a large extent, even if subconsciously.
For us fans of data visualization, here’s an illustrative plot:
We all rely on first-pass filters when we are evaluating something new while at the same time leaving room for early false reads. When it comes to people, these filters might help us gauge things like expertise, enthusiasm, and ethical bearing.
For founders, meeting with potential investors, it makes total sense to think about things like:
- Is this investor responsive or do they ghost us for weeks on end?
- Do they do what they say they are going to do?
- Do they have a genuine interest in and understanding of what we are building?
- Does everyone on their team convey a dedication to world class performance?
This all may sound too “judgey” but—especially in the context of a profession where we are meeting thousands of people each year—it is necessary. We are both happy to be judged by the people we meet and are doing the exact same thing back. And this is where I’ll transition to sincere advice to anyone that relies on external capital to grow an enduring business:
Everything Is A Test
Starting a company is one of the hardest things someone can do. And we as investors are lucky to be a small part of the overall storylines of the businesses we work with. That said, many teams work against their own best interest by delivering poorly on what they might think are less consequential fronts. But in the context of Weibull, it all matters.
Here are a few suggestions to optimize your odds of early success:
Our prize as investors is the chance to work with a relatively small number of great teams—often for many years. And to do that, we need to make quick decisions about the vast majority of the companies we meet with; applying our accumulated judgment while always leaving room for early mis-reads (we all have bad days). To the extent that some of these small nits avert false negatives for the awesome teams we get to meet, then mission-accomplished for us all.