After 20 years at Microsoft, Quentin Clark Has This To Share! “At the end of the day, you have no ability to win long-term unless you have the right people around you.”
Quentin Clark is a Managing Director of General Catalyst and David Hsu is the Founder & CEO of Retool
20VC: Lessons From Working with Bill Gates, How To Lead Without Authority and The Difference Between Leadership and Management & How Fundraising Changes In A COVID World with Quentin Clark, Managing Director @ General Catalyst
(December 28, 2020 - 36 minutes)
Quentin Clark is a Managing Director of General Catalyst, one of the most prominent firms of the last decade with a portfolio including Stripe, Airbnb, Snap, Anduril, Deliveroo, and Cazoo to name a few.
The Twenty Minutes VC - Venture Capital, Startup Funding, The Pitch
By Harry Stebbings - Founding Partner @ Stride.vc & Founder of 20VCMicrofund
From Microsoft into General Catalyst, how did it happen?
Following his time as an operator in Microsoft, Quentin found himself as the next CTO of SAP and had to relocate to Silicon Valley for work. His friends then encouraged him to meet venture capitalists, which led to a series of networking and understanding the landscape before pursuing it professionally after 2 and a half years at SAP.
What are the biggest takeaways from Microsoft?
Microsoft was a pioneer when building products, strategies, businesses, organisations, leading and managing people. Microsoft also thought Quentin that having the right people at the end of the day determines success in the long run. This can be achieved by aligning issues with the best person to solve the said issue.
Favourite moment with Bill Gates?
Being a conference room debating with Bill Gates and winning the said debate. The discourse not only took more than one meeting but it was regarding a complex topic regarding an ontology model.
How to overcome struggles with delegating tasks?
Quentin once took on the role of achieving matters his way and was reprimanded by his boss for it. His boss deemed his effort a failure as Quentin unknowingly robbed his collaborators of their learning opportunity and skill development. From then on, he realised that a manager is responsible for developing the capabilities of those under them. If one finds themselves without the right people then it is time to differently.
How does one differentiate leadership and management?
Leadership is more about followership and acquiring the best group of people that would stick with you through the same path. Management, however, focuses more on the cohesive system between these people. Leadership requires practise and time whereas management could be learnt theoretically.
Why General Catalyst?
Quentin was looking for a firm on the rise. Upon reviewing what the company has been doing and investing in, it was clear that it was in the industry for the long run. Another reason that enticed Quentin to the company was its culture and their keen sense of responsibility in wanting to be quality partners to approaching founders.
How did COVID change fundraising?
The COVID pandemic has primarily reduced fundraising timelines especially for the time taken to build deep and lasting trust with another founder.
How to build trusting relationships under short circumstances?
Get as many one-on-one moments with interested founders to know the person before the scheduled content meeting begins.
What works and does not when it comes to communication?
Quentin suggests using the phone when one is more comfortable with the founder. Although visual cues from video calls are insightful, using a phone requires more concentration from both parties onto what is being discussed and is, therefore, more intimate.
How does this change fundraising from here onwards?
With lesser time spent commuting to multiple physical meetings prior to the content meeting and being used more efficiently, fundraising could take lesser time to achieve whilst still successfully forging an equally trusting bond between founders and investors. In turn, the stakes for fundraising also evolve as well.
What are Quentin’s two ‘humps’ when entering venture?
Quentin describes the two ‘humps’ as two different periods upon entering the VC landscape which are 6 months and 2 years respectively. At 6 months, it is imperative to know what one is doing exactly and acclimatising to the shift in routines. At 2 years, one should not be itching to be in control and to lead without authority.
What is Quentin’s management style?
Quentin relies on his ability to support rather than impose help onto the founders and to know which role to play given the right circumstances be it VC or operator. He also believes in himself to know when to take the backseat when helping founders and giving them full reign over their penultimate decisions.
When to let go and assume the role of an observer?
Knowing how to do so stems from understanding what the desired outcomes are. From there, assist with forming the best possible framework and slowly incorporate those that will be bearing the framework while working out from being relevant in further engagements.
How to evaluate board membership?
Board memberships should resemble senior management roles. They should not be directly involved and will likely not have all the information but should be helpful in guiding the team to the answers, connecting the dots, supporting them with decision making as well as hiring. Board members should also exercise caution with their responses to avoid miscommunications.
How do founders best manage boards?
Founders should avoid surprising anyone even with good news as it will erode trust. They should instead, continue to reflect on their businesses and mitigate risks. Excellent founders should also avoid corralling board members, as they deserve their own space to contemplate, collaborate and contribute to the improvement of the business in a clear partnership.
What kind of projects are VCs funding today?
At present, the VC landscape funds multiple kinds of projects that in turn, generate a market for said projects. Although VCs are paid to underwrite risks, there comes a sense of unknown on how an investment will play out. Moreover, VC creates more creative possibilities and agility, which contributes to the expansion of the business.
How to evaluate market timing risk when investing?
To evaluate marking timing risk, one should deeply understand how the market would unfold with conviction despite it not being well codified. This could be said about the many things throughout history that were attempted but failed to succeed due to timing, which is a combination of engineering and economic risks.
What are Quentin’s thoughts on the sustainability of consumer demand?
Firstly, one should consider if there is acceleration for forced onboarding or if the product solely created just a specified environment. If not, is the product an acceleration of something that was beginning to flourish despite the circumstances? Should it flourish despite circumstances, then businesses should research more into it.
What does Quentin feel vulnerable about?
Quentin admits to being vulnerable about his complete shift in career and shouldering a new direction along with its many learning curves despite having many helpful experiences under his belt and being surrounded by the best kinds of people in the business.
What to change about the venture landscape?
Quentin personally would like to remove the FOMO dynamics from the landscape as it contributes to collective judgements out of fear, which is not ideal.
20VC: Retool Founder, David Hsu on Why YC Is Helpful Pre Product-Market Fit but Not Post and Why VCs Are Not Helpful Pre-Product Market-Fit but are Post, Why it is Difficult to Become Unprofitable if You Set Yourself Up For Profitability Early & Why VC Theory Around Ownership is Not True
(December 17, 2020 - 39 minutes)
David Hsu is the Founder & CEO of Retool, a company that allows you to build internal tools, remarkably fast.
The Twenty Minutes VC - Venture Capital, Startup Funding, The Pitch
By Harry Stebbings - Founding Partner @ Stride.vc & Founder of 20VCMicrofund
How Retool started
It initially started as some sort of a Venmo clone, but later proved to be a terrible business as the money was getting burnt too fast. Luckily for them, they already had most of the internal tools built but realised that for those who don't, it'd be a hassle to keep rebuilding; hence, Retool.
To pivot, or not?
When it comes to ideas, conviction is very important cause without it, things rarely work. However, you still need to be fairly open minded regarding what is and isn't going well. If something is not a good idea with very good reasons, it may be time to consider pivoting.
YC is useless post-product market fit?!
To David, the advice you obtain from YC isn't particularly helpful, but the networks you build are. However, those networks are useful mostly during pre-product market fit when things are still starting up. While he did sometimes receive good advice, once you have that fit, you don't really need to be talking to anybody.
The relationship between ownership and incentives
David doesn't believe that percentage affects how the investor helps your company. They would rather help the company that's doing incredibly well rather than the ones that aren't. While it's true that angel investors are a lot busier, if you do build a deep relationship with just 2-3 of them, they are very helpful.
Do we need VC's post-product?
From past experience, VCs did not particularly make a notable difference to David; more time spent with them doesn't actually translate to more results. That said, they are valuable when it comes to helping you scale and grow faster as they have seen more than the average first-time founder.
Taking on chunky capital
There's actually less of a divide between bootstrapping and raising venture capital than many think. It's about blending to bootstrap, then raising VC as a way to accelerate growth. If you're already profitable, raising money is easier as most VCs are interesting in companies that are already working.
Growth vs profitability
David and his team aim to be profitable in the sense that the basic business is fundamentally working and growing while allowing them to try new things and take more risks. Most of the value in raising money is to have the ability to make big investments when the time comes.
On spending on sales and marketing
It's important to prove things out before spending the money. So in most cases, you'd want to be more measured in your investments. As a startup, being fairly pessimistic and realistic can be helpful as well. It's important to be optimistic with the press, but you have to be very honest with yourself in order to make the right moves.
Go slow and build the right fundamentals
By doing everything yourself, you actually learn a tremendous amount in all areas of business. You will gain respect and knowledge that helps when hiring for these roles down the line. If you could secure early profitability and keep the growth rate up, it will be very hard to ever become unprofitable.
How to deal when things aren't great
A lot of it comes down to the internal culture of the company, in terms of the clock speed it runs. There are easy ways to increase that speed but without results, burnout can happen very quickly. Working hard isn't the issue, it's the lack of result.
Lessons from scaling too fast
Hiring the right people proved to be a challenge for David and his team. A lot of it has to do with some sort of cultural misalignment and because David was a technical founder, culture didn't matter that much to him then. But now he thinks it's absolutely critical and it may be one of the 3 defining features of Retool.
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