Brad Feld, "Nietzsche for Founders"

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Angel Invest Boston is sponsored by Peter Fasse, top life science patent attorney.

Brad Feld and Dave Jilk bring the wisdom of modernity's most unsettling thinker to entrepreneurship.  Like the ancient Stoics, Nietzsche has much to add to the thought of people disrupting existing assumptions today. Brief excerpts from Nietzsche are paired with essays from founders who grapple with the ideas in question. 

Click here to read full episode transcript.

Highlights:

• Sal Daher Introduces Brad Feld, Co-Founder of Techstars

• The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors by Dave Jilk & Brad Feld

• “…for every two lines of Nietzsche, there's probably two pages of Brad Feld and another entrepreneur talking about something really important.”

• “…I thought I knew something about Nietzsche, and pretty much everything I knew about Nietzsche was wrong.”

• “…Nietzsche was a Nazi.” - "Don't believe everything you hear about Nietzsche."

• Nietzsche’s Sister and Literary Executor Was Indeed a Nazi Who Tried to Co-opt Her Brother’s Thoughts into Nazism

• “Dave [Jilk] and I met at MIT, we've been friends since college. I met him on the first day of college.”

• Product Placement for Toscanini’s Ice Cream in Cambridge ☺

• Dave Jilk Is the One Who First Became Hooked on Nietzsche

• Brad Fled and Dave Jilk Edited Quotes from Open-source Translations of Nietzsche’s Works to Make Them Intelligible to 21st Century Readers

• LinkedIn’s Reid Hoffman, Who Read Philosophy at Oxford, Wrote the Foreword

• “…page one would be the title page and would say The Venture Playbook, and the next 299 pages would be blank.”

• “The power of being an entrepreneur is finding your own way.”

• Nietzsche and Mentor Whiplash

• Silent Killers

• Fake It Before You Make – Bad & Good

• "If thou gaze long enough into an abyss, the abyss will also gaze into thee."

• Sal Daher Talks About Sponsor Peter Fasse of Fish & Richardson

• Brad Feld on Angel Investing

• “…of the 40 investments, 20 of them were zeros, 20 failed. Three of them were worth each more than a hundred times my money.”

• One of Brad Feld’s 100X Investments Was Harmonix (Guitar Hero)

• “…recognize that being an entrepreneur…will be more successful for you if you view it as a life journey rather than a single company.”

• “Don't ask people to be your mentor. Do things for those people that engage you with their world…”

• Brad Feld on Biotech: “…life sciences is so big…picking a couple of areas or types of companies, where you can start to build both expertise and real networking...an understanding of what's real and what's not real”

• Adam Grant’s Give and Take

Transcript of, “Nietzsche for Founders”

Guest: Founder and author Brad Feld

Sal Daher: This podcast is brought to you by Peter Fasse, patent attorney and Fish & Richardson. 

Sal Daher Introduces Brad Feld, Co-Founder of Techstars

Welcome to Angel Invest Boston conversations with Boston's most interesting angels and founders. I'm Sal Daher, an angel who's very curious to find out how to better build tremendous technology companies. Today, we are all very privileged to have Brad Feld. Welcome, Brad.

Brad Feld: Hey there. Great to see you.

Sal Daher: Yes, this is the Brad Feld of Venture Deals. The Brad Feld, who co-founded TechStars. By the way, TechStars Boston is an awesome thing. I'm very much interacting with them. It's really a privilege to have you on. 

The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors by Dave Jilk & Brad Feld

The main reason that Brad is on is to talk about this book that he and Dave Jilk have written together called The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors. It's a really interesting book. Before you start running to the hills saying, "Oh geez, Nietzsche," I would say that for every two lines of Nietzsche, there's probably two pages of Brad Feld and another entrepreneur talking about something really important.

“…for every two lines of Nietzsche, there's probably two pages of Brad Feld and another entrepreneur talking about something really important.”

Brad Feld: One of the things, and I'll emphasize that, in the book, this book is using Nietzsche and quotes from Nietzsche that Dave and I found interesting to provoke thought about entrepreneurship and disruption. It's definitely not a book about Nietzsche, it's a book that we would hope that Nietzsche would have liked in the context of his own behavior as an incredible disruptor in the second half of the 1800s, in terms of classical and contemporary philosophy and how he approached his own thinking.

“…I thought I knew something about Nietzsche, and pretty much everything I knew about Nietzsche was wrong.”

Add to that, I'm sure most people listening have heard of Nietzsche. Some people probably have a view. Some people may have strong views. When Dave and I started working on this, which now goes back to 2013, I thought I knew something about Nietzsche, and pretty much everything I knew about Nietzsche was wrong. He is one of these fascinating characters, who if for every quote that we include here, we've written a couple of pages plus a narrative about it from an entrepreneur, for every quote of Nietzsche, there's probably thousands of pages written debating and dissecting what he meant and what he said and why it was awesome or why it was awful.

He's a very interesting person because of his own experience, in the way that many entrepreneurs are very interesting, and he's extremely misunderstood, especially because of a number of things that people have tried to do to co-opt him.

Sal Daher: Yes. Would you care to unpack a little bit the things that surprised you that you thought were so about the Nietzsche that weren't?

Brad Feld: Yes. For starters, I didn't really understand at all how many people influenced his philosophy, and subsequently, how many people he influenced. We have a chart near the end of the book in one of the appendices, it walks through that. It's really quite remarkable the number of different aspects of human existence and thought that he's impacted, not just philosophical, but many other areas. Interestingly, I knew that Nietzsche was disdainful of business, at least I had this premonition that he was disdainful of business.

Sal Daher: Well, a German pastor's son is likely to be dismissive of business.

Brad Feld: Yes, and in 1860, when businesses, mostly local commerce, local sales of goods and services.

Sal Daher: Just for context circa 1860, corporations didn't really exist. You had to get a special charter from a political entity in order for you to become incorporated. It was really, really before the full flowering of markets.

Brad Feld: Well, and in the United States, modern corporation didn't exist until the early 1900s. That was the thing. Another one was, I'm Jewish and I hear it periodically from some of my Jewish friends or from people, Nietzsche was a Nazi.

[laughter]

“…Nietzsche was a Nazi.” - "Don't believe everything you hear about Nietzsche."

Brad Feld: I didn't know enough to know one way or the other, and Dave and I have an appendix in the book, I think it's the second appendix, that is literally titled-- I'll read it out directly, "Don't believe everything you hear about Nietzsche." We go through a series of things in that section that are common mythology about Nietzsche that's wrong. For starters, we talk about the actual challenge of interpreting Nietzsche, and part of it is because of the time he wrote, the way he wrote, it's German translated into English, and in fact, primary translations in English weren't really done until the mid-1950s.

You start digging into that and it starts to become unclear whether some of the views that are attributed to Nietzsche he actually held, because he often contradicts himself to be provocative. He philosophizes with a hammer, that's a cliché [laughs] or an aphorism, which is that he's very direct and he's beautiful with his language. He's very clever, and he hits you over the head, but he also doesn't spare himself. Many of his polemic outbursts have these contradictions. He calls himself out on stuff. He says it's his own only interpretation. He asks people to object to it and on and on.

Sal Daher: He was intellectually honest.

Brad Feld: He was intellectually blunt. I like intellectually honest. I'd to believe that, but I would go a step further and just say blunt. [laughs] Now, the other couple of things, let's talk directly about where I started, which is he was a Nazi. For starters, he wasn't, just simply. Next, he had an association with Wagner, who, of course, became the musician of the Nazi Party, but he ended his relationship with the Wagner because he was not happy with where Wagner was going in terms of his antisemitic viewpoints. He had this great line along the way in terms of something like-- try to find it in the text. "I took leave of Wagner in my soul." That's a good way to say I broke up with someone, right?

Sal Daher: Yes.

Brad Feld: "Took a leave of Wagner in my soul. I cannot endure anything double-faced. Since Wagner had returned to Germany, he has condescended step by step to everything I despise, even to antisemitism," another hint that Nietzsche was not antisemitic. He also had great disdain for nationalism. A lot of people think about nationalism in this sense, and we obviously have this in the US with the alt-right, and the rise of the alt-right and the alt-right trying to co-op Nietzsche.

Nietzsche’s Sister and Literary Executor Was Indeed a Nazi Who Tried to Co-opt Her Brother’s Thoughts into Nazism

He actually became stateless. He gave up his citizenship and was stateless for much of his adult life. There's all these fascinating stories behind the story of Nietzsche, which just adds to the interest and complexity of the man. One of the key parts of the interpretation is it turns out his sister was a Nazi, and Nietzsche died-- He went crazy in 1890 and he died in 1900. He was really under the care of his sister for the last 10 years of his life, and when he died, she inherited his literary estate.

She posthumously came out with a book that was supposed to be his definitive opus, genius, magnum, magnus, whatever people would call it, the ultimate book, and what the book was, was endless scribblings of his that she then put together with her own agenda.

Sal Daher: Right.

Brad Feld: It would be as though somebody took a stack of all of my email from the last 10 years of my life or 20 years of my life and all of the random notes I took and everything and they had a particular agenda. They could satisfy that agenda and then attribute to me after I was dead, and I'd be dead, and I couldn't say, "That's not me. That's a lie." That then became part of the mythology around Nietzsche as a Nazi. I give those couple of examples. There's a few more to play with.

Sal Daher: Sure. No, but I think those are very powerful examples that clarify why all the mythology has grown around it. I think we can all agree that Nietzsche, besides being someone who spoke with a hammer-- Was that the expression? He was a very astute observer of the contradictions that existed in Western Civilization at a time when they were confronting evolution. The domination of established religion had been under decline in Europe for several hundred years.

He was a very close observer of that and he really saw very deeply what that meant in terms of possibilities, but also the vacuum that it would leave. I think he is a tremendously valuable and astute observer and not to be discarded by just saying, "Oh, he was at this, he was at that"

Brad Feld: That's right.

Sal Daher: Can you tell me how this book came about? Because you've obviously gone to school on Nietzsche. Has Dave Jilk also, your co-author, done the same homework?

“Dave [Jilk] and I met at MIT, we've been friends since college. I met him on the first day of college.”

Brad Feld: Yes. I would say Dave did more homework than I and he did it deeper and he did it earlier. Dave and I met at MIT, we've been friends since college. I met him on the first day of college.

Sal Daher: Which house? Where did you guys live?

Product Placement for Toscanini’s Ice Cream in Cambridge ☺

Brad Feld: We lived at Alpha Delta Phi, 351 Mass. Ave. Right by Toscanini's, on the corner of Mass Avenue.

Sal Daher: Oh, lucky guys. I was in at Baker House. I had to walk a bit.

Brad Feld: We had Toscanini's every night, I think, for every night. That was long enough, I didn't gain any weight from that.

Sal Daher: I know, those days.

Brad Feld: [crosstalk] still the best ice cream.

Sal Daher: Oh. [laughs]

Dave Jilk Is the One Who First Became Hooked on Nietzsche

Brad Feld: We've been friends for 38 years and we're still extremely close friends. Our first business was together. It's a company that we ran in Boston from 1987 to 1993. We sold it to a public company called AmeriData in 1993. That was real success I'd had. Dave semi-retired a number of years ago and always evolved his intellectual exploration. He wasn't classical, "Okay, I'm a software engineer, I'm going to spend all my time in software." He would go deep on different things that were interesting to him, whether it was a particular philosopher, philosophy and read very deeply about it. He loves the outdoors, he developed just this incredible love of long-distance hiking.

He's written a couple of books of poetry. If you told his 22-year-old self that when he was in his 50s and 60s, he'd be writing poetry, he would have just laughed his ass off at you. My wife Amy and his wife Maureen are close, and the four of us would spend-- We had a ski house in Keystone for many years and we would spend the weekends, once a month at the ski house together.

Amy and I are both huge readers as are Dave and Maureen, and in the afternoons, after they would do whatever they were going to do, go skiing or hiking and we were doing whatever we did, we'd find ourselves laying around on the couches reading in the afternoon before we went to dinner. For a period of time, he had been reading philosophers and philosophy. He'd go very deep on a philosopher, and he started reading Nietzsche.

He remembers a day, I don't remember it as well as him. I vaguely remember some of these conversations, but he said we were laying around and he read me a Nietzsche quote. He asked to me while I was reading my book, he says, "Hey, Brad, does this sound like entrepreneurship?" He recalls that, I said, "Mm-hmm."

[laughter]

Brad Feld: He kept tossing Nietzsche quotes at me and I feel like at some level it was rhetorical because he knew it sounded like entrepreneurship. Then we started talking about it. We started bouncing this around a little bit. I've written a number of books, and at some point, we said, "That'd be fun to do a project together. How about we write a book and we take Nietzsche quotes and we apply them to entrepreneurship?"

Along the way, I had become friends with Ryan Holiday, who really brought the idea of stoics and stoicism to the contemporary fore, and especially in entrepreneurship. I think Ryan and the books he's written are phenomenal. In 2016, I think he came out with a book called The Daily Stoic. The Daily Stoic is a 365 stoic quotes from Marcus Aurelius and Epictetus and Seneca and a bunch of others.

He organized them into 12 themes by month, and each day he had, within whatever that month's theme was, a quote. Then he had a couple of paragraphs. It was always a page. A couple of paragraphs with his application of the quote and application of that element of stoicism to contemporary life. The Daily Stoic is a book I read over and over and over again. I just read a page a day and I just keep reading it. It's wonderful book, not because it tells you what to do, but because it provokes you to think.

Brad Fled and Dave Jilk Edited Quotes from Open-source Translations of Nietzsche’s Works to Make Them Intelligible to 21st Century Readers

When that book came out, Dave and I said, "Let's do the same thing with this book." We'd been writing stuff and trying to figure out what structure and form. We agreed pretty quickly that 365 Nietzsche quotes was too much to take on and the world didn't need 365 Nietzsche quotes, but we felt like we could find 52 of them. We didn't organize them at first. In the end, we organized them into five themes, but one for each week. We have a quote, we then rewrite the quote in contemporary English because they're very chewy often.

They're hard to understand, even the very short ones, you read it and you're like, There's nine different ways I can interpret that."

The commas are in a weird place and the words choices, it's translation from German, and we used all open-source translation, so it's typically older English translations from 75, 100 years ago of German from 150 years ago. Then we write an essay that's two to three pages long.

Sal Daher: If you don't mind a digression, why is it that you chose to read just open-source material rather than proprietary material on translations of Nietzsche?

Brad Feld: If anyone's ever written a book, getting rights to copyrighted material is a nightmare. We decided that because we were going to rewrite the quotes anyway, it didn't-- It mattered some We looked for good translations. I think we did a good job of picking translations, but having translations that were either common use, open-source or off copyright, just meaning that we didn't have to clear rights with anybody, like clearing rights 52 times for Nietzsche quotes. That seemed like just brain damage that was unwarranted.

We have the quote, we have our contemporary rewrite of the quote. We then have two or three pages of our explanation of what the quote provokes in us around entrepreneurship. We're not telling people, "Do this, do that." We're not trying to say, "This is the answer," instead what we're trying to do is provoke thought. We're trying to provoke thought from our frame of reference as well as from the reader's frame of reference.

Then, for about two-thirds of them, we have a narrative from a few entrepreneurs who are well-known, but many who people won't recognize their names. What we did was we gave the entrepreneurs the quote and we said, "Write a narrative that you think applies to this quote." In some cases, they wanted more, they wanted to see our draft of the essay and things like that, but we really wanted them to write their experience. Then these were very lightly edited. They're more like blog posts and they are tightly edited stories.

We moved commas around and we fixed a little bit of word choices when the word choices weren't very good, but we really wanted to be in the individual's voice, to bring alive this example that the person felt when they related to the quote and to our essay, partly to encourage other entrepreneurs to really do what we want with this book, which is not, "Here's a book full of answers," it's a book full of thoughts that will provoke you to think more and to be introspective about your own experience as an entrepreneur or your own experience as an early-stage investor, and what's working and what's not working for you and allow you to create a deeper version of your own view of how things go.

Sal Daher: Yes. It's very accessible to do it on a weekly basis as a way to expand your thinking about entrepreneurship, to have a routine once a week, you spend 20 minutes with the book, read it, and then stuff is going to happen, go off in your head for the rest of the week. By the way, I looked through the book and I read a good deal of it and I found it really polished. I couldn't find any typos, so you guys did a good job.

[laughter]

Brad Feld: I hope our part was polished. We tried.

Sal Daher: Would you care to give some examples, read the Nietzsche and then tell a little bit the story that comes behind it?

LinkedIn’s Reid Hoffman, Who Read Philosophy at Oxford, Wrote the Foreword

Brad Feld: Yes. Let me start with one that actually relates directly to the thing we were just talking about, which was the goal of the book. It's early in the book, and just let people know. We segmented the book into the five sections are strategy, culture, free spirits, leadership and tactics. In addition, the foreword is by Reid Hoffman and Reid coined the phrase that Nietzsche is the patron philosopher of entrepreneurs. He wrote a forward that's magnificent. I expect most people know, Reid, but Reid also studied philosophy for his masters when he was at Oxford.

Then we have three appendices. We have one for Nietzsche's life and legacy. Some history of Nietzsche. Again, we're not trying to be Nietzsche scholars here, but we decided to put enough in the book so that people could quickly get a view of Nietzsche. We have that appendix we were talking about, "Don't believe everything you hear about Nietzsche." Then, we've got a bunch of sources listed, so people can really track back to the books where the quotes came from, if they're interested in going deeper and actually reading Nietzsche and the original, which is challenging but powerful if you're willing to give it the time. We also have some linkages to other things about it and Nietzsche, in general.

Sal Daher: What is the passage? Do you have a page for it?

Brad Feld: Yes, let me start with that. I'm not going to have a page because I am dealing-- I'm in iBooks versus my own-- I'm on I'm online, but I'll tell the name. The name of the chapter is Finding Your Way. I'm going to read the quote and then I'll read our translation to the quote, and then we'll talk about it for a moment or two. The quote is, "This is now my way, where is yours? Thus, did I answer those who asked me the way? For the way, it does not exist."

In other words, people often ask me how to do something. I tell them how I do it, but then I ask them how they're going to do it, because there is no one way to do something. My guess is, everyone who's ever been an entrepreneur, had a board, raised capital from investors, talked to professional service providers around the system, investment bankers, whatever, has probably heard the word “playbook” used in the context of their company. "There is a playbook," or "You should follow the playbook," or "We have a playbook." My favorite playbook, and maybe someday I'll publish it as a companion guide to Venture Deals. Venture Deals is a book I wrote in 2010. It's about how to do-

Sal Daher: Very, very, very good book.

Brad Feld: Thank you.

Sal Daher: I remember reading in 2013. I found it very helpful. Thank you.

“…page one would be the title page and would say The Venture Playbook, and the next 299 pages would be blank.”

Brad Feld: Well, it's in its fourth edition. It's been an extremely popular book and continues to be a very popular book, which makes me happy because I feel like we contributed something meaningfully. The companion guide would be called The Venture Playbook. It's 300 pages long. The first page, page one would be the title page and would say The Venture Playbook, and the next 299 pages would be blank. [laughs]

It's like the thing in the Matrix, where the character, I can remember the name of the kid, in that scene with the spoon, where he's playing with the spoon and helping Neo understand that there is no spoon, and the spoon bends. Essentially, the line is there is no spoon.

“The power of being an entrepreneur is finding your own way.”

The power of being an entrepreneur is finding your own way. It's not that you should ignore everybody else. You should ask them how we do things. You should learn from other people. You should listen to the stories, and you should get feedback, and you should ask for, "What would you do in this situation?" but then as the entrepreneur, you yourself should think hard about what you're going to do and make your own decision.

Nietzsche and Mentor Whiplash

In the context of TechStars, you mentioned it earlier, we have a thing in TechStars we call mentor whiplash. Any entrepreneur who's been through a TechStars program knows that if they ask five mentors what to do in a particular situation, they're going to get a dozen answers because a lot of people are going to give you more than one answer, "You could do this, or you could do that, or you could do this."

This idea of finding your own way is so important. In that moment, in the 18-- I don't know whether he wrote this in 1859 or 1864, but in that timeframe, this was a pretty provocative idea. There was it was much more following than leading. The idea of the independent thinker was a privileged idea in the enlightenment in the age of reason. It was not an every-person phenomenon. That's one of my favorites. Again, it's one we lead off early that I think is strong.

Sal Daher: Well, it really addresses one of the frequent questions that I have as an angel investor, how do I interpret all the different advice that I get. And people… I try to tell them, "Well, you're discovering a new world. You're doing stuff that nobody's done before, you have to find your own way," but at the same time, I guess, there are some advice that can help-- Like if you need help with a real estate contract, it's good to have somebody who can give you some experience, or hiring somebody in a certain field, that kind of stuff, there's stuff where you can find help, but in your core business, gosh, you're alone. [chuckles] You have to discover your own way. Please go on. What's the other passage?

Silent Killers

Brad Feld: I'll do another one. It's a little bit later. It's a passage called Silent Killers. It's a label I like to use for a particular type of company, of which at Foundry Group, we've invested in many. The Nietzsche quote is, "The greatest events are not our noisiest, but are stillest hours. Not around the inventors of new noise, but around the inventors of new values does the world revolve. It revolves inaudibly."

In other words, the greatest events occur around quiet rather than noise. The world revolves silently around those who create new values, not those who produce an uproar. In my own experience as an investor, the most successful companies I've been involved in are ones that nobody really knows or pays attention to until suddenly they are everywhere and hugely successful because of the products that they've created, the customers that use their products, and the competitive moat they've created than the business.

Fake It Before You Make – Bad & Good

If you think about our current entrepreneurial landscape, especially at the early stages, many people spend an enormous amount of time promoting what they're going to do and many of those companies fail to ever achieve it. The phrase 'fake it till you make it' is one of the phrases that I find most in the entrepreneurial landscape. I understand the cliché, the cliché is fine, but the practical instantiation of it often is the difference between somebody who is significantly committed to what they're trying to accomplish versus someone who thinks that if they just say it loudly and often enough, they might be able to will it into existence rather than do the incredible hard work.

Sal Daher: It's funny you mentioned that because my longtime business partner, Bob Smith, used to say among the things, "Fake it before you make it, kiddo. Think Yiddish, dress British."

[laughter]

Brad Feld: I like that.

Sal Daher: Yes, oh he was a character. He was from a Maine. He's one of the first five people who created the whole access to the emerging markets out of his own personality, his own drive and so forth. There was a lot of making before he was faking it. Smitty, before he was faking it, he was making it. There was a lot of substance behind him. He used to say," Look at guy with a cheap suit from Filene's Basement and a cheap toupee, I got to fake it. I got to look like I'm a big player. I'm going up against JP Morgan and all these big players."

He was a very scrappy guy and so he had to project a much bigger image, but he wasn't faking it in the sense that he could deliver. The trade he didn’t deliver on was the last trade he did. Anyway, I just couldn't help but laughing. 24 years of hearing 'fake it before you make it' [laughs] very true, very true. 

Actually, what you're saying here is the inverse of what Hemingway said about, "How did you go bankrupt?" He wrote, "Gradually then suddenly." Your success is built very quietly, and then all of a sudden, talk about these nine-year, one-day wonders. They had nine years building the company, and all of a sudden, they managed to make it big.

Brad Feld: I would just add, I think the essence of it, again, the goal here is to provoke thought, not to say the answer.

Sal Daher: This is a very powerful thing to keep in mind, that building just takes a lot of time.

Brad Feld: The interplay between us is exactly what the goal would be of the book. My add-on to interplay would be, it's not that promoting what you're doing is bad, it's that you-- and your example of your partner Bob or Smitty-

Sal Daher: Bob Smith, yes. Smitty, yes, rest his soul. God rest his soul.

Brad Feld: -he felt the need to dress the part in the context of his competitive environment. That's a very valid construct. It's, "Look, I'm a serious player I can deliver. Take me seriously." That's different. Again, compare it to the bombast that we see from so many entrepreneurs, "I'm going to change the world with this thing that's utterly irrelevant. I don't even know what change the world means. Now I'm going to shoot out a bunch of words to be provocative and make a bunch of noise that nobody gives a ______ about, that has nothing to do with anything I'm doing just to get some attention for myself and my company." That plays out over and over and over again, especially on twitter.

Sal Daher: Those guys are playing a crowded market Smitty, when he was doing this, he was the only one, he was the only bid. He used to joke, "I know I'm in the right market when they call me Mr. Smith. I know I'm in the wrong market when they won't pick my phone call," because when they had an asset that he was the only bid for, they were very respectful, "Mr. Smith, we were really interested in the bid that you have," and so forth. He just knew. When the respect disappeared, he said, "It's time to move on to another market." Smitty would have appreciated this book. Any other quotes that you'd like to bring? Any other passages? This book is so rich.

Brad Feld: Let's do one more that's one of my favorites. I'm cherry-picking favorites, although there are many, again, good ones, but just to give people a flavor. Another one of my favorites is a chapter called Monsters. "He who fights with monsters should be careful lest he thereby become a monster. If thou gaze long enough into an abyss, the abyss will also gaze into thee." 1860-something.

In other words, if your opponents are bad people, there is a risk that you will also become a bad person. If you become too familiar with bad behavior, it may start to see normal and infect your own thinking. We lead off this section with the sentences, "Your moral compass is an important part of your identity. Similarly, company values are an important part of the identity and brand of the company, but there will be constant temptations to cut corners or make exceptions in this interest of expediency. You'll often find yourself faced with a choice between upholding an abstract ethical principle and achieving a tangible positive outcome for the business."

Lots of examples here, but let's play with some contemporary ones that we know really well. Google early on had a line, "Do no evil." Do we think that that is a consistently held moral compass executed across all of Google for the past however many years Google has been around, since 199-- whenever they were started '6, '7, '8, '9. I don't know when they were started. The answer is no. Do no evil quietly disappeared, I think, from the website a couple of years ago or some period of time, there's a bunch of articles about it, but it's a good example.

Another one that's very contemporary is Facebook, and the notion of Facebook for many years had a line that was approximately, "Our goal is to improve the world through enabling communication for all." That wasn't exactly a tagline, but that's how my brain processed whatever the tagline was. "We're going to improve the world; we're going to make the world better."

"If thou gaze long enough into an abyss, the abyss will also gaze into thee."

If you look at the second order effects or the direct effects of Facebook over the last five years, not just in the US but all over the world, Facebook as a tool has been used to perpetuate enormous amount of divisiveness, dissonance, falsehoods, corrupt behavior, reinforced corrupt behavior. If you then look at the company and how the company tried to navigate that, you can really hear these. "If thou gaze long enough into an abyss, the abyss will also gaze into thee." I'm not making a moral judgment about Facebook in a specific way, I'm just using an example, like, "Ask yourself the question."

Sal Daher: Well, in a way, I wonder if it just isn't the medium that does it. It's the industry they're in, the medium that they're in, it's pushes in direction, but can you give me an example of a company that has grown to a certain size that has not violated this precept?

Brad Feld: I think over the very long arc of companies, it becomes very difficult, especially as companies add on lots of other pieces to their business or buy other companies and acquire other companies. It becomes very hard to stay true to what their foundational values are. Actually, I have a contrapositive here that's an interesting one that I was thinking of as you were asking me.

A company like British Petroleum that for many years had a very clear ethical bent and focus and how they were distinguished from other extractive resource companies, but then over a period of time with a series of events, especially against the backdrop of more focus on climate change, more focus on extractive technologies, more focus on better forms of energy, if you think about the disaster that they had Deep Horizon and then you think of the advertising they had for the next couple of years after that, which was all about BP clean and trying to recast them as a clean energy company, there was almost no way to connect that behavior to anything other than to try to turn them back into something that was acceptable after this cataclysmic disaster against the backdrop of what was not something people wanted.

Sal Daher: Well, the BP example is a particularly unfortunate one because I think BP was basically greenwashing. They thought they could be like the Green Oil Company. I know some people in the oil and gas business, and BP was known for having very, very shoddy maintenance of its equipment. It's one of the reasons that Deepwater Horizon had the problem it had. They were just a bunch of fakes. They were a company with very crappy maintenance, that was projecting this image of being super clean. They were exactly opposite of what they were claiming to be. They were an oil company, but they were not a particularly good oil company. That's the problem. There were better oil companies that weren't claiming to be green. It's just the whole thing was so fraudulent. I don't know, I think Apple, of all these companies, probably does the best job of trying to stay true to its mission without just being completely ridiculously hypocritical.

Brad Feld: I was going to use Apple after BP. You said it with more of a hammer than I said it. I was trying to focus on, if thou gaze long into the abyss, the abyss will also gaze into thee. Post-Deepwater, the abyss very much gazed into BP and then their behavior to be a clean energy company was completely disingenuous. It was now the source of being a monster rather than being something good.

Apple, and I wouldn't put it on Apple on all dimensions of Apple, but privacy would be a good example. Apple has been, from a moral compass perspective, very clear and very consistent about their view on who owns the data, privacy, et cetera. They've made mistakes, and when they make mistakes, they generally allow themselves to be called out and then adjust.

The other side of it, which is interesting, though, is that's a positive, but is one that you can start to really see reinforced. Again, the goal of this a quote is to stretch it to different situations. Apple has defined the execution over a long period of time and instantiation of the creation of a walled garden. They have completely mastered that phenomenon, and to the extent now that there are places where lots of people are really buckling under that, in different ways, ranging from other companies that are part of the ecosystem competitors or individual users.

It's not so much good versus bad, it's where does the thing that you are so attached to with the other people that you were attached to it, how do those things create a reinforcing loop? That might not be the reinforcing loop over the long arc that you want your company to have or stand.

Sal Daher: I think that's really well spoken, really well said. 

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Brad Feld on Angel Investing

Brad, in the time that remains, I'd like to open things up for you to get across something that you think would be valuable for the listeners of this podcast, who are founders, people who are thinking of founding companies and angel investors. Then I have a question about my investing that I'd like your advice on.

Brad Feld: Great. Let me start with a quick anecdote or aphorism I like to use with angel investors. I've made many angel investments in my life. I don't know the number of hundreds of them at this point, but it's many hundreds. Angel investors are called angels for a reason, they were not labeled devil investors.

Sal Daher: [laughs] I've run across a few of those, unfortunately.

Brad Feld: That's the unfortunate part, is that a lot of angel investors don't really incorporate that into their whole being. I have a lot of lines about being an angel investor. A big one is to understand the difference between zero times your money and a hundred times your money. I made 40 angel investments between 1994 and 1996. I moved from Boston in 1995. I started in Boston and then I moved to Colorado, to Boulder. I continued to invest. I invested in Boston, New York, Colorado, obviously.

Sal Daher: 40 between-- What's the starting date?

Brad Feld: Three years. I did about one a month over three years. On the West Coast in Seattle and the Bay Area in San Francisco, Los Angeles. I was traveling the country and I was investing and my network was growing to expand to cover the whole country as I moved from Boston to Boulder.

Of those 40 investments, I invested about the same amount of money in every company. I invested either $25,000 or $50,000. [crosstalk] I took all the money I'd made from the sale of my first company and I turned around and bought a house in Boulder and I invested the rest in companies. My strategy was I would invest $25,000, and in certain situations, I would invest another $25,000.

“…of the 40 investments, 20 of them were zeros, 20 failed. Three of them were worth each more than a hundred times my money.”

Those were either because the company was making great progress and I just wanted to put another $25,000 in, or that first investment hadn't gotten the company to the new next stage, but I still believed in what was going on. I was willing to help them try to get to the next stage, but that was it. I didn't keep playing. I didn't get complicated about anything. In that, of the 40 investments, 20 of them were zeros, 20 failed. Three of them were worth each more than a hundred times my money.

One of Brad Feld’s 100X Investments Was Harmonix (Guitar Hero)

One of them, people in Boston may remember Harmonix, which was the guys that did Guitar Hero and Rock Band and Dance Central, are still around as a company. They got bought by Viacom and then the founders, Alex and Eran bought them back, and again, a couple of others. Of the other 37 companies, if they were all zeros, I still had a very successful portfolio of 40 investments. The other 17 of them returned somewhere between a fraction of my money back and two or three times or five times, a couple of cases, I got more than 10 times my money back. I think one was 50 times the money back.

The issue is that, even though half of those angel investments completely failed as financial investments, I tried my hardest with each of them to help the founders be successful. Many of those entrepreneurs, I then went and funded them the next thing or I became friends with them and we stayed in touch. Again, that characterizing this notion of being an angel, because many of the things you invest in won't work, but your goal as an angel investor is to do everything you know how to do to help the founders, help the entrepreneurs be successful, and embodying that is key.

“…recognize that being an entrepreneur…will be more successful for you if you view it as a life journey rather than a single company.”

For founders, and I say especially for founders at the early stage and for founders that are doing it for the first time, recognize that being an entrepreneur can be and probably will be more successful for you if you view it as a life journey rather than a single company. Occasionally, there's an entrepreneur who starts a company and that's the thing they do for their entirety of their life. Certainly happens. It's not that frequent. Even when it happens, there's a lot of examples where it's not exactly how the story played out. People create that narrative, but there was other stuff [unintelligible 00:42:58]

Sal Daher: [laughs] Revisionism.

Brad Feld: That's right. My own narrative, I talk about it, my first company, which was based in Boston, company very uncreatively named Feld Technologies. The one that Dave Jilk and I ran. By the way, don't ever name your company after yourself. That's another lesson. When our customers were unhappy with us, they didn't call for Mr. Jilk. They called and yelled at Mr. Feld when our clients weren't happy, even if they didn't know me.

The interesting thing is, I talk about that often and I say it without thinking hard about it, that's my first company, but it was really my first successful company. It was my third company. It was actually the second company that Dave and I were co-founders of. We co-founded in college with two other people a company called Martingale Software. That failed. It wrote graphing software for the Apple Macintosh when the Mac came out.

My second company was a company called DataVision, that made software for doing cephalographic analysis. If you say, what is cephalographic analysis? That will help you understand why that company failed, because we were doing a thing that was a customer base that may be one in the world at the time and couldn't actually build a company around it.

Viewing it as a journey over multiple stages rather than, "I'm starting this company and this is the rest of my life," doesn't mean you shouldn't be obsessed and fully committed to that first company, but it's just having a long-term view of the experience of entrepreneurship.

The other piece of advice, which I think is common advice today, but I would say it very pointedly, especially for first time entrepreneurs, when I was starting out and I started the first successful company with Dave in 1987, there was no information about entrepreneurship that was broadly distributed. There was the Boston Computer Society, and I could meet some people through that, heroes of mine at the time were people like Dan Bricklin or Mitch Kapor, I could know them from the community, from a distance. Maybe they talked to me if I shyly went up to them. I had heroic figures like Steve Case of AOL, who has become a very good friend and somebody I've learned a lot from.

When I was starting out, the idea of getting together with Steve or reaching out to Steve about anything, I would have been terrified of doing that. The only stuff to read was Lee Iacocca's biography, "Look at me, I'm this great guy and I created this, I created this, and then I turned around this. Look at me standing in front of my beautiful house with my--," whatever, the Talking Heads song, my beautiful house, my beautiful wife. Nothing that a 20-year-old first-time entrepreneur could relate to let alone learn from.

“Don't ask people to be your mentor. Do things for those people that engage you with their world…”

I would encourage all the first-time entrepreneurs listening, surround yourself with people who are mentors, who are experienced. Don't be bashful about developing those relationships. Don't ask people to be your mentor. Do things for those people that engage you with their world so that they then will want to be engaged with your world, and recognize that over a relatively short period of time, it's usually measured in years, sometimes it's measured in months, the best mentor-mentee relationships become peer relationships, where both of you are learning from each other.

When somebody says, "Well, I'm doing this for the first time, I have nothing to teach somebody. What would I teach that super experienced person?" or "Brad, what would I be able to provide value to you?" My first answer is bulls--t. Unless I'm calcified and I can't possibly think creatively about anything new, I'm constantly learning from new people, from new experiences, from their own life experiences, from different perspectives, from different experiences.

Most people who are entrepreneurial will thrive off that. As the experienced entrepreneur continuing to find people to learn from and situations to learn from is part of what makes the whole thing powerful. That would be what I give to the listeners as a couple of pieces of advice.

Sal Daher: I think it's all very valuable. I think that the last point you're making is really that an experienced person brings a different set of skills to the advisory relationship. Inexperienced person is bringing current experience, they're bringing the situation they're facing and the interaction of those two. It can be highly productive for both. You can discover things. This is what I do as a podcaster, this is why I do the podcast, is to learn. I'm talking to people, most of whom are younger than I am, and I'm learning from them all the time, all the time.

There are things that I can teach them, very well-established things, how not to trip on your shoelaces, that kind of stuff. The people who are struggling, who are out in the fight, they're bringing in really valuable things. 

Now, Brad, before we close up, I want to ask you a question. My angel investing started out basically focused on whatever was in front of me, and turned out to be a lot of software companies because I'm in Boston. After investing in 60 companies, it turns out that most of the value in my portfolio are the life science companies. I am now very much seized with the notion of how to better support life science companies.

I'm not talking about the Modernas of the world. Those companies are being supported splendidly by people like Noubar Afeyan at Flagship Pioneering and so forth. They basically get 97% of the funding, these companies that are formed entities coming out of the big VC groups. What I'm talking about is the other 90 odd something percent of the startups, because we're just at the start right now, is my experience, here in Cambridge. We're at, more or less, where software was back in 2011, in the life sciences.

There are whole bunch of technologies that are becoming accessible. You can do them. You have shared lab spaces, which is bringing down the cost of having a lab. There are all kinds of infrastructure that's been created and the technologies that matured at the same time are accessible. I've invested in a handful of companies, which has given me a hint of what it could be. I'm asking myself, one of the things that I know has to be done is that I cannot be a one and done angel investor, I have to stage my investments over a longer period of time. I have to slow my pace of investing. That is really obvious too.

Life Science companies take 10 times, 15 times the amount of due diligence that a software company does, mostly because I can piggyback on a lot of the people that I know, and there's a lot of principles that translate from one area to the other. In the life sciences, it's extremely localized, knowledge is very localized. You have to spend a lot of time building particular knowledge about a space.

My question is, money is a big problem, but way beyond money is people. How to attract people to this area that is extremely fruitful, but at the same time, just it scares people because it's so complex. Big pharma, the big company, those guys are scratching the surface of what's possible.

I'm involved, one company, for example, on the board of, $2.3 million, they've developed a particular technology for capturing rare cells and they have five strategic players now who are very actively interested in the company with not a lot of money. This is patented technology, but let me tell you, companies like that struggle to get people to work for them, struggle to get funding. I'm trying to figure out a way to better support these companies. I'd be really grateful if you have any thoughts on this.

Brad Feld: I'll try to provide one thing that could be useful, but with the introduction that I'm not a life science investor, so I don't have comfort or domain knowledge around it.

Sal Daher: I didn't start out as one, by accident, I became one, and every life science company is extremely particular. You have to create a body around it. Anyway, so please, what are your thoughts?

Brad Feld: I'm going to give it a piece of advice and I'll give two examples from my own experience that are very different examples. One example is 3D printing and the world of 3D printing. The other example is the experience I had moving to Boulder and being part of developing the startup community that really developed in Boulder. The starting point for each of those examples is, prior to me getting involved in 3D printing, I didn't pay any attention to 3D printing before 2010. There was a 3D printing industry, there were a number of public companies that had been around for many years, 3D printers, and industrial 3D printing had had some big successes and some big ups and downs.

I got involved in 3D printing because I started to believe that there would be a move of industrial products to the desktop. I was also fascinated with 3D, both physically and digitally, and my first 3D printing investment was in MakerBot, which really was the company that created the idea of desktop 3D printing. It wasn't the first ever thing, but it was the company that really that idea got associated with. My next investment after MakerBot got acquired by Stratasys was Formlabs, a Boston company that's doing extremely well, that really is the largest player now in desktop 3D printing and growing extremely fast.

The third company I invested in was a company in Seattle called Glowforge, which is a 3D laser cutter. It's subtractive technology instead of additive, but still in the 3D printing universe. Another company that's become a large company is growing very, very fast. Through that experience, when I started in 2010, what I did was I formed a view on what my actual thesis around the investing was. I didn't say, "I'm a 3D printer investor." Whether I said it loudly or not for myself, but my view was, my thesis was there's going to be a move of industrial products to the desktop, and 3D printing is the category I'm going to focus, and there have been historical moves from industrial to the desktop.

Mainframe computers to minicomputers to desktop computers is an example. Room-sized laser printers that sold for a million dollars that then became a $3,000 HP LaserJet in 1981 or 1982, that did two pages at a time down to today's $200 color printer that sits on your desktop that spits out 30 pages or 50 pages a minute, and is a fax machine and is a copy machine, and, and, and.

I had that mental model, and as a result, when I started looking at companies to invest in, it wasn't that I was looking at the entire population of 3D printing companies, hardware, software, materials, industrial, consumer, which was, all of a sudden, as desktop 3D printing became a thing, as MakerBot became a thing. Over the next five years, between 2012 and today, I've had hundreds of 3D printer, either printer, or material, or service business pitches. As investors, we've done a handful of them. Then we've done a couple of other investments that are part of that thesis around democratizing manufacturing.

Brad Feld on Biotech: “…life sciences is so big…picking a couple of areas or types of companies, where you can start to build both expertise and real networking...an understanding of what's real and what's not real”

One of them is Zoometry, which is a marketplace for small batch industrial manufacturing. Then we have a company in Brooklyn called Looking Glass, that's a 3D holographic display. The display version of it. The reason I give that example for you is it feels like life sciences is so big, and picking a couple of areas or types of companies, where you can start to build both expertise and real networking, where your network is a people-based network, and that expertise is not the technical or scientific expertise, but just an understanding of what's real and what's not real, and when somebody says, "I can do this in a month," and it's going to be seven years, you can have an intellectual response to it. That might or might not be right, but at least you can calibrate.

Sal Daher: What you're saying really resonates because one of the things that's been happening with my investing is, because of the people I bumped into, I've been focusing more and more on microfluidics, on stuff that happens within these small constrictions. I'm invested in three microfluidics companies, quite by accident, and then I began to understand a little more about the space.

You're absolutely right, you have to have an organizing principle so that you can develop a critical mass of knowledge about a space, so that then you can get the resources in place and time. I feel that maybe in certain aspects of the microbiome and in microfluidics, I have the connections that are needed to be helpful. Those are the two areas that I'm pushing. I think that's really very helpful.

Brad Feld: The last thing is here, which is a Boulder example, but I don't need to use the Boulder example because we totally captured it. That last thing you said is really important, which is you get a compounding knowledge benefit from the network connections you make. That compounding knowledge benefit is not just your direct knowledge, but you start to understand who are the influencers who have networks that are going to be additive to the network that you're building, who are going to be givers in that network versus takers?

Adam Grant’s Give and Take

It's not that you want to have no takers in your network, it's that you just want to calibrate the time you spend with the ones where you can be a giver and you can get benefit back versus you're a giver and there's no benefit that ever comes back because the person just takes whatever you'll give, as an example, to use Adam Grant's Give and Take, the great book; language around it.

It's that network has a geometric growth curve versus this linear thing which you would get by yourself if you were just studying or if you're just in one domain with one static set of people.

Sal Daher: Excellent. Very good. Well, I think this has been really very helpful.

Brad Feld: My pleasure. This was a ton of fun, Sal.

Sal Daher: [laughs] Let me just bring back here. We have been talking to this episode about the really fantastic and engaging book, Entrepreneur’s Weekly Nietzsche: A Book for Disruptors by Dave Jilk and Brad Feld. This conversation has been with Brad Feld himself.

Brad Feld: Hi.

Sal Daher: Yes, hi. It's been really a joy. It's been it's been tremendous. It's been yummy without calories. I love it.

Brad Feld: That's nice.

Sal Daher: I'm very grateful. I wish you all the best with this excellent book. Thanks a lot.

Brad Feld: Nice to talk to everyone.

Sal Daher: This is Angel Invest Boston. I'm Sal Daher. 

I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.

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