Twenty-five years ago, I walked across the stage at MIT’s graduation with homework and exams behind me and an exciting future ahead. I decided to return this June for my reunion, interested to see how my fellow classmates had fared: who was
immersed in successful careers, raising children and just a bit grayer? The commencement speaker was Dropbox CEO, Drew Houston, MIT 2005, eighteen years my junior but wise beyond his years. Drew spoke about his personal “cheat sheet” for life. While he was directly addressing the MIT graduates, I also felt a strong connection to his message. Drew’s speech was generally about life, but his points connect well to my own thoughts on investing and company growth. From graduation to finding a career, and to potentially growing a business, every entrepreneur should consider Drew’s “cheat sheet” as he/she navigates the path to success.
Here are the easy-to-remember life rules on Drew’s list:
1. A tennis ball.
2. A circle.
3. The number 30,000.
First you ask, why a tennis ball? Think about the energy a puppy brings to chasing a tennis ball. Certainly, the most successful people I have known are similarly driven and bring tremendous enthusiasm to the task. In my own life, my passion for an assignment, a product or a deal has been the key to ultimate success. Whatever you are doing should excite you enough to want to work on it, sometimes even obsessively. Drew recalled instances where his gut was telling him to work on something different, a distraction from his current project. But because of his passion for that “distraction,” his obsession grew to become a sole focus and ultimately, Dropbox. That passion is only found by some combination of following your head and your gut. Passion and determination to create a world class product or service is what sets people apart and is what drives companies forward. While we might not list it as a formal criterion, a team with passion is characteristic investors seek out before deciding to finance a company. This brings me to the next point.
Second on the list was a circle, this represents the human network from which one draws talent. Drew had heard a maxim that we are the average of the five people with whom we spend the most time. In a company setting, that means you likely count on five main people to help you get your job done. In a start-up company, the early team may not be much more than five or six for the first year or two. So, fill your company with “A” players. Seek out and get advice and counsel from others. When I was at my reunion, I took the opportunity to reconnect with past colleagues, some from MIT and some not. All of them “A” players who are all part of my “circle” and could very well be critical players on my “team” in the future. Drew’s initial early hires came from his college network; these people ultimately enabled the company’s success and pushed them further than they could have ventured alone. At Edison we have our own “circle,” the Edison Director Network or “EDN”, which was formally started about 12 years ago and now boasts about 300 executives. The EDN is made up of management team CEOs, CFOs, and functional experts that have worked closely with us often in multiple companies. EDN members typically serve on portfolio company boards and help our companies avoid the potholes and see around the curves as they grow.
Third is the magic number: 30,000. We each have about 30,000 days in our lives to make a difference and make a mark on the world. Time is a finite resource. Once spent, we cannot get it back, and unlike dollars, we cannot raise more time, so spend it wisely. Drew pointed out that college graduates have already used about 8,000 of those days. I am at a bit more than double that now. Companies may take thousands of days to grab the attention of an investor, if ever. And with the average venture investment hold period of seven years, a company has about 2500 days from investment to exit to demonstrate success. The lesson learned here is that each day is valuable, and for growth businesses, each day is another opportunity to advance forward.
So remember: tennis ball, circle, 30,000. Thank Mr. Houston for providing us with the simple, secret ingredients to his recipe for success.