Post #2: The Sophomore Slump
Four EIRs and Zero Companies
This post is essentially the second origin story for the Idea Maze. It’s about a series of conversations that took place around 2014 with a bunch of repeat founders.
For whatever reason, this was the time period when a lot of my friends were EIRs at VC funds. For those who don’t know what these are, and EIR is an “Entrepreneur In Residence”. These sorts of programs were somewhat more popular 10 years ago vs. today. These folks were usually repeat founders or repeat early stage operators who would get a paycheck to hang around a VC office and come up with ideas. The hope was that the VC might get first dibs on whatever company they start, and the entrepreneur would get the extra ideation inputs of being around a VC firm. Whether or not this is a worthwhile trade is the fodder for another post (TLDR, it’s not).
Anyway, during this time, I noticed something unusual. A surprising number of founders experienced what my Partner David started to describe as a “sophomore slump.” As successful founders, they had a lot of things going for them to start their second company, but for one reason or another, things don’t quite work out.
Classically, the sophomore slump is caused by many different reasons, but they all come down to not really knowing what problem to start solving. There are some different flavors to this that I can thumbnail using the experience of the EIR’s I mentioned earlier.
One founder just couldn’t say “yes” to anything. The main issue is that he was now older and wiser and lacked the blind optimism that he had when starting his first company. He started looking at new businesses much more critically, and was able to talk himself out of everything. It didn’t help that he was working quite closely with VCs that would help him come up with even more reasons why every idea wasn’t going to work. In the end, this founder ended up becoming a VC (and then expressed his entrepreneurial drive by starting his own fund several years later).
The second founder had the opposite problem. Investors so wanted to back him that everyone said “yes” to everything that he pitched them. At the same time, he spent most of his time exploring domains that were quite far from his previous area of experience. Similar to the first founder, he was so sour on his prior industry because he knew all of the hidden warts and challenges of building in that space. Instead, he ended up getting enamored by industries that were very foreign to him and where he had much fewer unfair advantages. But VC’s were so excited about HIM that they provided falsely positive signals every time he shared what he was working on. This founder ended up starting a company, raised capital with ease, and subsequently was never able to find true product/market fit.
Another founder became way too impatient. His EIR gig had a specific timeframe, and he felt the obligation to try to make a call on something by a certain deadline. I give him credit – he felt like if someone was paying him to start a company, he should have something to show for those dollars within the allotted time period. But that’s not really how things work. This founder ended up taking a CEO gig instead of starting something, and then moved on from that role relatively quickly afterwards.
Another founder encountered a problem of authenticity. Her first company was deeply authentic to her personal experience, and that connection allowed her build a unique product and overcome huge roadblocks. But in starting her next company, she was searching for a problem to solve vs. solving a problem she deeply experienced. She had many stops and starts, but to her credit, had the discipline to cut experiments off when she knew things weren’t working. Ultimately, this founder ended up taking a job at another company. This was very surprising to me, but when I asked about it, she said something that made a lot of sense: “People usually come up with company ideas in the course of trying to solve a problem. So I figured, why not spend some time solving other people’s problems, and maybe that will expose me to more problems worth building a company around.”
These four stories often form the backbone of my advice when I meet with a repeat founder. In a nutshell, I encourage them to:
1. Stay optimistic. Don’t start thinking like a VC.
2. Be patient. Don’t give yourself a finite window of time.
3. Try hard to build in your power alley.
4. Don’t go too long without actively solving someone’s problems.
But even if you follow this advice, figuring out what problem to solve is super hard and unpredictable.