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Venture Profile: Andreas Stavropoulos, Draper Fisher Jurvetson
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: You began your career on the Management Consulting side; do you think that consulting provides good foundational training for success in venture investing?
Andreas Stavropoulos: Consulting is about interviewing people; learning to ask questions, listening and probing. The interpersonal side is obviously quite important and in a consulting role - you can’t do your work if you’re not good at learning to interact with many different styles. Certainly, those skills help in venture investing, when your having to work with entrepreneurs from different backgrounds and various management teams. However, I don’t think a typical consultant is necessarily a good fit for the Venture Capital world. The longer you stay in consulting, the more you are taught to think in a very structured way. That’s great when you’re trying to help large businesses improve by small increments, or extrapolate from where they are today. But that isn’t necessarily the best approach for venture investing, where creativity may be even more important than structured thinking.
Angel Mehta: You mean management consultants don’t think creatively?
Andreas Stavropoulos: I don’t care what they say, consultants are not creative, out-of-the-box thinkers. They are creative in incremental ways, but that’s it.
Angel Mehta: What do you mean by incremental?
Andreas Stavropoulos: A typical consulting background does not encourage thinking completely out of the box because it’s usually unrealistic to implement. Large Fortune 500 companies can’t go way over there where nobody’s been before (gesturing) – because in the Fortune 500 world, it is supposed to take 20 years to go way over there.
Angel Mehta: You mean in terms of doing things that are an order of magnitude different than the way they’re currently being done?
Andreas Stavropoulos: Exactly. But with a startup, you have to start thinking about how to go way over there from day one. Because if you don’t think about way over there, your idea is at best incrementally beneficial and at worst, ten other companies are already doing it. Consultants aren’t taught to think in these terms – they get paid for incremental improvements.
Angel Mehta: I want to talk about the process of selecting entrepreneurs. The more research I do, the more it seems like using track-record as the primary metric makes no sense whatsoever – primarily because the set of variables that conspired to make someone succeed in the past do not necessarily carry forward into the future. So what else beyond track record do you look for?
Andreas Stavropoulos: Focus, passion, anger. What I’ve learned, through making mistakes, is that it is really difficult to determine what or who would make a good entrepreneur because most of us tend to like people who are like ourselves. Don’t you agree?
Angel Mehta: I suppose.
Andreas Stavropoulos: Well, the people I could hang out with or enjoy a conversation with over a cocktail are usually not great entrepreneurs. The people I get along with are a lot like me and there’s a reason I’m not an entrepreneur. So it really doesn’t make sense for me to pick entrepreneurs based on whether I personally ‘like’ them or not. Instead, you want people who are relentlessly focused and passionate. You want people who are angry…almost pissed off about the way things are, and say to themselves: ‘I CAN’T BELIEVE THE WORLD IS DOING IT THIS WAY. I CAN’T BELIEVE WE DON’T HAVE SOMETHING BETTER. I KNOW I CAN DO IT BETTER’.
What we find around here is that the great entrepreneurs have this anger inside that serves as the primary driver.
Angel Mehta: That’s interesting because I find a correlation between that kind of anger and youth. Yet as people get older, they tend to become more accepting of the status quo. So does that mean, perhaps, that you are more open to considering young entrepreneurs?
Andreas Stavropoulos: Yes, absolutely. Young people aren’t jaded. You don’t know why it is that you can’t do something. As you grow older, you learn that there are a lot of things that you cannot do. You learn just how hard it is to build things, and just how challenging it is to run a business. I will say, however, that they must have the ability to recognize talent in others. If they have a huge ego and the vision is being fueled by ego, they are not going to attract top people. You want a person who cares enough about what they’re doing…who cares enough about the idea…who is angry enough to say, “The way to make my vision happen is I need to hire people better then myself”. The passion of the vision is what moves others. So recognizing talent in others and then delegating and letting go so that you’re not thinking of yourself before the company or the vision but rather the vision first and everything else second… that’s a critical part of making it happen. It shouldn’t be about your crusade as an individual.