As Homebrew ramps up its investing, I’ve been really impressed by the quality of founders we’re seeing raising seed rounds. Although any investor ends up saying “no” 99 out of 100 times, many of the companies that weren’t a great fit for us have gone on to raise strong rounds and I’m sure many will be quite successful. Satya and I enjoy being transparent about our values and happy to iterate in public, so here’s something we believe:
Founders who can answer “Why” have a competitive advantage over those who can’t, and tend to be better fits for Homebrew.
The average pitch contains substantial time dedicated to the “what” and the “how.” What is the market you’re serving? What is the product you’re building? What is the customer pain you’re addressing? How will you build your product? How will you recruit a team? How will you get customers? All of these questions are essential and certainly factor into any investment decision we make.
That said, “what” and “how” haven’t been sufficient to get us to YES. In the handful of investments we’ve made to date and the termsheets we generated this week (it’s been busy), there has consistently been a strong “Why” as well.
Why are you taking years from your life to work on this problem? Why does your company deserve to exist and why is the world a better place when it succeeds? Founders who can answer the “why” are usually called “mission-driven.” It doesn’t mean they’re necessarily curing cancer or solving global warming (although they might be). Rather there’s a deep conviction that they’re on a personal crusade, one which you need to get on board with RIGHT NOW.
Mission-driven founders energize us. Mission-driven founders also have a competitive advantage in the marketplace. We believe they are better recruiters – not just warm bodies, but the best, most talented people who have many choices and want to work for something which matters. Mission-driven founders seem to commit a little more to their startups because they are giving their heart, not just their brain to the effort. Mission-driven founders build strong cultures.
“How” and “What” can be logically derived. “Why” needs to be felt. And just like funk, it can’t be faked.
If you are a founder who knows Why and you’re working in the Bottom Up Economy helping SMBs, developers and consumers drive economic growth, Homebrew would be honored to hear from you.
If you’re a superstar working for a CEO who you think can’t answer the Why, we’re happy to try and find you a new home because, hey, why not? :)
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