Do the deal. Or don't.
#CapitalAtRisk
The need for speed
I listened to the following podcast, “The Social Radars”, from Jessica Livingstone and Carolynn Levy on a long run last weekend.
The part that really struck me was from around the 1 hour 5 minute mark:
One Friday afternoon Paul Buchheit1 emailed Mark Zuckerberg about selling his company, FriendFeed, to Facebook. On that Friday morning Paul had nothing. Then he emailed Zuck and they went for a walk. By the end of their walk that Friday they did a handshake deal. On Saturday the deal was written up by the lawyers, on Sunday it was signed and on Monday it was announced. When asked why it happened that way on the podcast Paul said:
"Speed — we believe in speed"
Remember, if people want to do the deal then they’ll find a way to do the deal.
That snippet made me think of a number of situations I or portfolio founders have been involved with in the past. Situations where the noises were encouraging — people said they wanted to do something, a deal, a collaboration, a partnership — but nothing got done.
Then there are other situations when I called it all off early in the discussions. In these situations it felt risky because there was no real hard data showing that the deal wouldn’t happen, but I just got a sense that nothing would materialise. If it feels wrong from the start then it probably is wrong.
Otherwise you’d be in the situation Paul described in The Social Radars, which just feels so right and is such a wonderful place to be — charging ahead knowing you’ll find a way that works; and fast.
So while I’m a fan of sleeping on things, letting thoughts settle and being patient, I’d say that’s for the 10%, at most. For the other 90% the speed should be almost-uncomfortably-fast, and if the other party can’t handle that then they don’t want to do the deal enough.
As Paul says, the longer something goes on then the probability of nothing happening increases with each hour and each day.
In other news
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Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.
#CapitalAtRisk
Creator of Gmail, Co-founder of FriendFeed and partner at Y Combinator.