I am one of those people who, by nature, is fiercely independent. I was brought up this way, I continue to self-promote it by my view of myself in the context of the world, and I like other people who are also independent.
But with fierce independence comes a few challenges. One of them is stubbornness. The excessive belief that you know what you are doing can lead to an unwillingness to listen carefully to others. And this can hurt.
Even worse is when you combine fierce independence, with a distrust or dislike of competitors. Highly competitive people tend to be successful people because they are willing to fight harder and longer to "win" with competition they create in their mind. I used to be extremely competitive, wanting to really hit my opponents in lacrosse as hard as I could, wanting to be the absolute best in school, and refusing to believe I couldn't win by just trying harder than anyone else. But my desire for cooperation increased with time, and that's a really good thing for success in business today. But I will get to that.
Finally, I was brought up as a scientist (sort of) and educated as an engineer. With an academic bent, I felt as if the real value of new discoveries was in their publication for all to learn from. I was not and am not opposed to making money, and I think those that think up good new ideas should prosper as a result. We don't all work for all of us today, and likely never will.
In 1993 I came up with the technical idea of computer viruses and spent the next 9 years working to find effective defenses. Among the defenses I was aware of, published, and found great flaws, with was the use of filters to detect viruses. At the time I called it "pattern matching" and it is and was widely called virus scanning. The main problem with scanning for viruses is that it is largely a method for detecting what you already have figured out is a computer virus. Since there are an arbitrary number of different viruses and patterns for viruses, this means eternally chasing after the virus writers and always being behind, and it also means that eventually as the patterns are broadened to cover more and more viruses they will grow in number to slow the search process more and more and they will start to produce false positives if you try to make fewer patterns work to find more viruses. I started a business selling virus detection software (Integrity ToolKit) and made some money at it, but the virus scanning business always won out over the approaches I thought were better for the customers.
In the early to mid 1990s, having learned a bit from my past, I was dealing with the increasing number of remotely accessible vulnerabilities in computers attached to the Internet. So I came up with one of the first remote vulnerability scanners. In essence, anyone on the Internet could come to my Web site (all.net) and have the site they came from scanned by selecting a menu item. The scanner would use their source IP address as the target of the scan with their permission granted electronically. The results would take a minute or less and appear on their screen via their Web browser. At the time there were only a few hundred things to scan for, and my scanner found more of them than anyone else and do so remotely over the Internet, so I figured it would scale well and allow central control over the quality of the scans, thus solving a lot of the software compatibility, update, and distribution problems commonly faced by the industry.
I also built an internal scanner to detect internal vulnerabilities using similar methods, initially to support proper configuration of my own systems and then for properly configuring need-to-know in classified systems, and eventually as a product offering. But that's another story.
I got a call one day from a lawyer representing one of my then-rivals for the remote virus scanning service. In essence, he asked if I was interested in or had any intellectual property rights for remote vulnerability scanners. I was at that time very stubborn and highly competitive, and there had been various strong words exchanged in Internet forums between the individual he represented and me. I felt as if I didn't want to cooperate in any way with this competitor and person I did not like, even though we had probably never met in person. I also knew for certain of the ultimate weakness of scanning for known bad things because of my earlier views on computer virus scanning. I also knew, because I was starting to work on deception for protection, that such scanning would ultimately be limited in its utility, even though virus scanners were still the most successful product offerings. So I steadfastly said I was not interested in working together at all and that my only interest in remote scanners was as a scientific endeavor. The idea was too obvious to patent and barely good enough to warrant even publishing a paper.
By now you already know the outcome. About 3 months later a company was formed and announced to do remote scanning for vulnerabilities, within a year or two it grew and sold for something on the order of a billion dollars. I probably could have owned a substantial percentage of that company, been wealthy in a year, and so forth.
Balance and Patience
This was not the first time I would get this lesson, and not the last either. The challenge is not in getting the lesson, it is in learning it. One of the reasons it's hard to learn such lessons is that it's unclear what the lesson is. What would I learn from this that would help make me be more successful? "If I got rid of my demons, I'd lose my angels." [apparently from an interview Williams did with Playboy in 1973, reprinted in the book "Conversations with Tennessee Williams"]
Perhaps the lesson is that when you let people get you angry, you make bad decisions. Perhaps the lesson is that you should never turn down an offer before you know exactly what it is? Perhaps the lesson is that your personality dictates your responses and better responses come from changing your personality. Perhaps the answer is that it would have been a disaster the other way - the business would have failed instead of succeeding because the same traits that caused it to succeed as it did, would not be present if I were part of it, and would cause it to fail if I were there.
Self doubt can be a real killer, ultimately causing inaction which is a guarantee of failure. Sort of. Sometimes, merely waiting around and doing nothing can be a big win. The problem with looking back is that it's hard and often impossible to properly associate cause with effect. When people tell you they think they know better than you, they might, or they might not. The thing that makes you what you are, is you.
To be clear, I don't have sour grapes about it. I know I didn't become a billionaire, but I don't know what I might have changed to get to a better outcome. That's because, unlike science where you get repeatable experiments and statistical outcomes trying lots of different possibilities, in life you only get one shot at each experiment. I can't go back and try again, so I simply have to guess for the next try and see how it goes.
My decision was to learn about why I do what I do, to learn about how people manipulate others and get manipulated, and to believe that there is luck involved, but that "Luck favors the prepared". [Edna ("The Incredibles") but earlier "Chance favors only the prepared mind" - Louis Pasteur]
I chose an increase in patience for some things. For example, in one of my startups from a few years ago, the original plans didn't go as expected (there's a surprise), but I am now trying several other strategies. I'm not apparently in a race to market, as no competitors have apparently popped up, so I have decided to preserve resources instead of going all in and failing fast. I have intellectual property that combines trade secrets with patents pending, and a set of tradeoffs that favor my approach over others at scale, so if competition does appear, I have paths forward for more resources to go further faster. And I have some slow-burn very low resource approaches that I continue to pursue. I have thought about putting it out of its misery for the last few years and make an annual decision to keep it (at a cost of perhaps $1K/y) or put it into deep freeze - to be popped up again some day if opportunity strikes.
I also chose a balance between competitiveness / aggressiveness and cooperation / friendliness that seems to be working for me. I have decided that I can never have too many friends, and there is no reason to go making enemies. That is not to say that I back off of what I think is the truth, but rather that I say what I mean in a friendly way and try to make sure I mean it before I say it - at least in a professional context. Being too afraid of offense can stifle your feelings, and expressing yourself is, in my view, an important part of being honest with yourself and others. But that's not the issue I wanted to clarify today.
Investor vs. Startup
I certainly understand the perspective of an innovator and startup. I have been doing this since the 1970s with some successes and some failures along the way. I started and built one company from 8 to 250 employees in less than 6 months, and it was profitable every day of its operation. But at that point, I realized and decided that running a big company was not for me. I left it for other things. And generally this is true - people who start companies are not often the right people to run them once they grow beyond a certain size.
Fierce independence is somehow not possible when there are 250 people involved. Everyone is part of the success of the whole, and in order for the whole to operate well, the fiercely independent people have to be culled from the herd and allowed to succeed at their next fiercely independent thing. They should not be abandoned, because they are precious, but they also can't be reasonably managed by most managers and made to perform the same task day after day as a cog in a greater machine. It just won't work.
As an investor, I love the fiercely independent innovator, as long as they are innovating and not trying to run a company with a bunch of employees, or becoming full time sales people to generate money for the company, or doing any of the many other things required to succeed in business. "Horses for courses" is an Australian saying that I embrace in this regard.
Don't get me wrong. There are incredibly successful people who seemingly can do it all. And many people change roles over time very well.
But as an investor, I am betting my hard-earned after-taxes cash on a business. I am looking for a team that knows what they are doing, not just an individual who is exceptional. I want a team of exceptional people who can work together in the current stage of the business to build and grow it to the point where it can transition to the next stage successfully and, in the process, turn my entry investment into an exit return.
As an advisor helping early stage startups, one of the key things I think I bring to the table is helping the startup understand what an investor is looking for. Another is helping them build the winning team that will both get them investment and help them reach a good exit. And that means the willingness to listen to my advice and answer my questions in a way that I believe will lead to a successful outcome.
Of course I am not always right! So I don't expect that my approaches will be taken by companies much of the time. And plenty of startups are winning investments without, or in some cases against, my advice. But I think it's important to consider when you need that fierce independence and when you need that team player, and make sure that the transition of roles happens when it has to happen for success.
Copyright(c) Fred Cohen, 2016 - All Rights Reserved