I invite you to sit back and relax as you read this post, probably the only one you'll read all summer that ties together the U.S. economy, Richard III, New York tabloids, neuroscience, venture capital and crowdsourcing.
OK, not just this summer. Ever.
I just won't have time to do that in a few sentences, however. Pascal-like I only have time to write about this at length.
So grab a cold drink, prop up your feet, and join me if you like.
The kernel of this post started with a simple Facebook post after a lovely evening of corn on the cob, ice cream on the deck, and relaxing with the family:
Just a lovely summer evening out there. Seems to happen every August: life seems so wonderful within the family and the world goes nusto -- the stock market goes screwy, some youths somewhere go all nuts (London's turn this year) and politicians become especially unsavory. I wish summer could last longer for us, but the world could use a good rain shower and some adult supervision.
I got a big response to that, which got me thinking -- using the parlance of the day -- that I might "unpack" that notion a bit here.
Let's start with the one everyone knows about, the stock market.
First, the NY Post put it best, the stock market was going up and down like a hooker's drawers.
What's going on with the market? I have no idea, but I have a hunch, however, that part of the problem is that all the grownups on Wall Street are on vacation, and a bunch of kids got a little carried away with themselves.
If that's the case, wouldn't we have seen this kind of thing happen in August before? Probably, and it turns out that's exactly what has happened. (Read this hilarious post about that.)
Of course, the market was also wacky because of the uncertainty created by the debt-ceiling shenanigans. My old boss, Kurt Andersen, is exactly right when he says that our politics these days is suffering from some kind of autoimmune disorder where the body mistakenly attacks itself.
All of those August events led some notable folks to start talking about something very much on my mind these days, investments in startup companies. I won't link to those posts, because I'm going to slam them now by pointing out simply that it's always easy to forecast doom.
What I didn't read anywhere was this: If the stock market sucks as a place to keep money, wouldn't that help startups and other alternative investments? I mean, only those with tinfoil hats are suggesting that you should take all your money out of the markets and put it in gold. You'd have to be exceptionally bad at math to keep it in a bank. Wouldn't all that money do better investing in something that actually has a chance to grow? Not to get preachy, but they'd be also be able to invest in the one thing that everyone says is the best way to create new jobs. I understand there's more risk, but with risk comes...
Ahh nevermind. Let's move on.
The good news for startups is that smart investors understand that market fluctuations are materially irrelevant to what they do. George Zachary made the case very clearly in a single tweet:
No matter what happens with public markets, my CRV partners & I will still be actively funding early stage founders pursuing the bold.
Adeo Ressi made the case, properly I think, that this is actually a time when we should have some cautious optimism. Brad Feld and Seth Levine of the Foundry group both made essentially the same case as Zachary and Ressi, but they did it in their own inimitable style, Brad saying "ignore the dow" and Seth with a long, reasoned post full of words like "numerator" and "capital efficiency."
The bottom line for all of them was the same bottom line I got reading about why love is the opposite of underwear: Do what you love so much that it doesn't get boring, and have grit about sticking with it. VCs and neuroscientists agree!
And so does the writer of this excellent story: "A Few Thousand Reasons to Be Optimistic."
Now, I know you are on the edge of your seat, wondering what all this has to do with Richard III.
The prognosticators who came out and said that the market volatility signaled the end of all investments in startups were, I think, essentially emulating Shakespeare in saying: "Now is the winter of our discontent." (One of them, whom I still respect a great deal, actually said "winter is coming.")
What they didn't do, however, was read the next line.
Now is the winter of our discontent
Made glorious summer by this son of York
You see that? What Richard is saying there is that the winter is now made into a glorious summer by the son (sun).
The doom-and-gloomers are missing that. They want you to believe that things will be bad bad bad.
This is something that was not lost, by the way, on Steinbeck when he wrote The Winter of our Discontent. That book centers on a man who worked hard, had strong ethics, but then let his ethics slip so that he could make a buck and get ahead. It was a cautionary tale that we've seen played out in everything from Glengarry Glen Ross and Bonfire of the Vanities through Gordon Gekko and right up to The Social Network.
Some people learn from these kinds of stories what not to do, and some learn the upside down lesson that if they cheat, if they worry about superficial gains, if they wear a hoody and tell people that a billion dollars is cool, that somehow they will get ahead. Those people might for a while, too, but for the world winter is a good thing because that hoody just isn't enough to get you through a winter.
Here's how this became concrete for me just yesterday.
Just by way of background, I'm the CEO of a startup that uses a crowd of writers to help businesses do the blogging that they don't have the time or ability to do themselves. We sometimes get criticized because we don't pay writers very much. As a former journalist, author and writing instructor, this pains me. I want writers to do well. I understand that for many aspiring writers, there are just no good opportunities to write professionally.
Blogmutt now has paying customers and a crowd of writers working for them. I sent a note congratulating one of the writers yesterday because in a single day she wrote awesome posts for four different customers ranging from a super high tech website to a local boutique retail store. She's never been a paid writer before, but she is now. She wrote back and told me that she would like to donate the money she's earned to Water for People.
I really just about cried. Why? First because it's such a great idea and it will be so wonderful to be able to help out some deserving non-profits. But I was also moved to tears because it confirmed what we've been saying all along: that there is a group of very talented writers out there who would love an opportunity to write something real, something that will be helpful to real people, and get a foot in the door of writing professionally.
I have to admit that I've perhaps spent a bit too much of the last few months getting too close to the world of the kid in the hoody talking about how a billion dollars is cool. I participated in a kind of beauty pageant for startups, I "took meetings" and I talked about valuations for Blogmutt with some pretty exuberant numbers given that at that point we didn't have any customers.
We are still technically fundraising. We are still taking those meetings and we certainly would love to have some more money in the bank. We'd also love to have the connection to real leaders in our world that comes in an unparalleled way with a real investment. But now that we have customers we are realizing firsthand the truism that the best kind of investment is a customer paying for something that provides value. We have those customers now, and we have freelance writers who enjoy writing for those customers.
Our plan is that the warmth radiating from delighted customers and writers will make a glorious summer out of whatever winter comes our way.
A glorious summer. Not the August zaniness, just the ice cream gloriouisness.
Mmmmmmm. Ice cream.