“Young people are extremely capable, and a lot of people don’t take that seriously.” — Danielle Strachman
In our last workshop of January 2019, we were joined by Danielle Strachman, the co-founder of the 1517 Fund, a venture capital firm that invests in young entrepreneurs building tech startups.
Before founding 1517, Danielle worked for Peter Thiel (https://en.wikipedia.org/wiki/Peter_Thiel) at the Thiel Fellowship, and was the visionary behind the Thiel Summit.
Danielle joined us to talk about the world of Venture Capital, the work 1517 does to support young founders, what she looks for in companies she chooses to back, and what factors tend to make a startup successful.
Danielle talked about the work that led her to start a venture capital fund — the lack of partners in the space focused on supporting young founders, and the community building experience she gained at the Thiel Fellowship. In her work with Thiel, she and her co-founder Michael Gibson have built a Facebook community with over 1000 members, an active network of founders and mentors, and a regular series of events that they host in San Francisco.
Danielle talked extensively about the things she looks for in a company she’s considering backing:
- Lots of people have similar ideas for startups, and it’s a fine balance — if lots of people have similar ideas, it likely means that lots of people are identifying the same need in the marketplace, and no one person has come out as the leader in the category — but it also means there will be lots of competition.
- Communication between founding team members is very important. When resources get tight, tension and conflict tends to rise, and it’s important that founding teams have a stable internal structure and can work through strife (most companies fail due to internal error, not technical lack). When the going gets rough, founding teams that hold together tend to look at the problem as external to them as people, founding teams that have trouble tend to fight with each other instead of dealing with the problem.
- Hyper-fluency — the ability to talk about the area you’re working in forward and backward — is an indicator of proficiency and knowledge.
- Curiosity is another important trait. The company you try to start and the company you become are often very different, but a good founder is a curious person, and that helps carry them through all the changes.
- The market. Lots of people pitch interesting things, but from a marketing opportunity standpoint, the idea isn’t necessarily very scalable. A Venture Capitalist has to believe that every single idea they back is the big one.
“I don’t claim to have any superior knowledge of how the market works, but I do know that you start to get feedback by seeing what the market likes.” Again, market. It’s an important part of the founding process to put your ideas to the test in the marketplace and see if people are actually excited about the product you’re building.
She also talked about the things she’s learned in her time working with young founders and in the world of VC:
- When you’re in a position where you make lots of decisions on a day-to-day basis, having a system in place for making decisions, and making sure you maintain the quality of your decisions, is key.
- Mapping out your process for making decisions and having a checklist is very valuable.
- One of the things that makes 1517 special is the amount of mentorship they offer the people they grant funds to.
- Making sure you’re checking in with people is important.
“My whole lens of everything is learning and development.” — Danielle Strachman