Stanford ETL is the Entrepreneurial Leader Series led by STVP@Stanford. Each week during academic quarter, usually a guest speaker is invited to share their ideas and has some Q&As. This is also known as a course MS&E 472 at Stanford, followed by a seminar course MS&E 178 that allows students to discuss and ask more questions to the guest speaker.
During this period of unfortunate WFH season under COVID-19, Stanford ETL series has moved to streaming live through YouTube. On 04/15/2020, I attended live where guest speaker Heidi Roizen talked about her top 9 lists for entrepreneurs, under this situation of crisis. Heidi Roizen was back the third time sharing her insights on ETL series, and she herself is a Stanford undergrad and MBA alumni. She was VP of Worldwide Developer Relations at Apple, then co-founded T/Maker as CEO from 1980s, and now she is a partner at Threshold VC.
This post is a takeaway note from that event and some extended explorations beyond. I would say the talk by Heidi was really awesome and I would suggest myself to review the original content again and again, but as a takeaway I would also try to balance a little bit to keep it short.
Under this crisis, where Heidi has experienced several similar ones like dot com bust, Heidi gave 9 pieces of advice to entrepreneurs, which I summarize as:
- The best entrepreneurs not only focus on their products or competitions but also are aware of the broader world and potential massive change. At no fault of their own, entrepreneurs have to deal with any sudden crisis and adapt to the change. E.g. entrepreneurs at Threshold first saw data in Wuhan then Italy, from supply chain, and they were aware of that, planning how they might need to adapt.
- “So what – Now What” or “Valuation Nostalgia”: your last valuation is irrelevant to the world today. Now what you do about it?
- Great entrepreneurs learn from history whether they’ve experienced or not, by asking. VCs, like Heidi, have to watch the markets and stocks, which are tanking, meaning exit environments are worse; their benchmarks also change to be unclear. VCs don’t have to invest money right now, but for entrepreneurs they have to pay expenses like: to make payrolls every two weeks. To understand future recovery young entrepreneurs should also ask elders to get a sense what it actually feels like.
- All that matters right now is survival itself. “Must be present to win”, don’t die before recovery. Competitions are feeling the same.
- The best entrepreneurs understand what they can and cannot control, and they build a plan that allows them to survive with only what they can control. E.g.
- you can’t control the fundraise: you can only count the money you already have.
- you can’t control the revenue: people use to pay but now can’t count on revenue for sustaining
- But you can control spend
- The best entrepreneurs look beyond their own walls to understand the implications on everyone and everything else in their ecosystems. If your customers are in a bad industry, that is going to impact your business, even your working is fine. (Supply chain, ecosystem) E.g. some critical part suppliers experienced huge losses from tsunami. But not all changes are bad, it can be positive if you discover new efficiencies or get new customers.
- Successful leaders of past crises moved faster and cut deeper that most everyone else. It’s painful but we have to face it. Most venture-backed startups are not yet profitable, (either working on something big or trading profit for growth). Time is and costs money. You need to cut deep enough that you have a path forward to survive, which gives confidence to other employees.
- The best leaders don’t forget their empathy and their humanity. Often the decision really is look you can let 25 percent of your team go now or you can let 100 percent of them go later when you run out of money. There are things that companies and their investors can do to help people redeploy elsewhere or come back at a later time. You can have empathy while you’re still making difficult decisions. When things recover the people will determine whether they want to come back or even stay in follow you by the things you did as a leader during the difficult times.
- The best entrepreneurs actively observed both the good and the bad about the changes they are experiencing and look for the opportunity that change creates. E.g. CEO of Autodesk making masks; biotech companies pivoting to work on testing or vaccines or therapeutics. Not only dealing with COVID itself, (my own thoughts here: e.g. Zoom)
- (Bonus, personal) Heidi showed her bracelets. The sentence reads “Embrace Truth, Make Choices, Take Action”.
(To be finished …)
Of course I really like the talk. While I am still like a student, not entrepreneurs, I see those approaches and mindsets are general enough to be also applied to daily lives. I have to broaden my vision and horizon to perceive what’s going on in the whole world and try to understand them, including crises and economic cycles. And if one day I got the chance to hand on such things, I would learn from this and to summarize in one sentence: take action and ask experienced people for advice to make decisions.
In the following Q&A section, the professor also mentioned about mentorship that Heidi receives and gives. In around 2000, HBS has a case study on Heidi Roizen’ s philosophy of networking. I am currently reading it and hope someday I will also write a takeaway on that one.