When you’re running a company, you’re deep in your own narrative. Every decision feels unique. Every challenge feels unprecedented. You’re the protagonist in a story you’re writing in real time.
When you’ve invested in 200+ companies, you see the patterns.
The founder who won’t delegate? I’ve seen that movie a million times. It ends badly 999,000 times. The team that pivots every quarter? That’s not agility, that’s panic. I can spot it in the first board meeting.
The market timing that feels like genius? Usually luck. The grinding execution that feels like it’s going nowhere? Usually the path to something real.
Here’s what surprised me most: the best entrepreneurs don’t have the best ideas. They have the best response to failure. I’ve watched brilliant founders with mediocre ideas outexecute mediocre founders with brilliant ideas. Every single time.
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The difference? When the original plan fails—and it always fails—the great ones iterate. The rest rationalize.
I invested in a company that pivoted four times in two years. Sounds like chaos, right? But each pivot was surgical. They’d test a hypothesis, gather data, kill it fast, and move to the next. No emotional attachment to the previous version.
That’s not chaos. That’s discipline.
The company that raised at a $15M valuation because the pitch was flawless? Dead in 18 months. The scrappy team with the messy presentation but relentless customer focus? Acquired for over $200M.
Patterns. Once you see them, you can’t unsee them.
Hi Dave,
You know I love your blogs, posts and short stories. This is one is one of my favorite. Patterns, pivoting, chaos, response to failure, etc. All very true and I’ve learned a lot over the years from you and many of the companies I’ve encountered through TCA VG or Pismo Ventures.
Best,
JJ
As usual, good insight on what I takes to create wealth as well as identifying and managing the risks associated with change.
Having invested in many young technology companies, I agree, it’s been a very educational experience. And a greater appreciation of my own business (www.CAIL.com) !!
Out of curiosity, from investing in 215 early stage companies, what has been your ROI ?
Dave, my favorite quote was: “The best entrepreneurs don’t have the best ideas. They have the best response to failure. So true! m
Thanks, Dave for sharing the importance of both pattern recognition and subsequently “guided” perseverance. Then sharing your observations about converting approaching dead ends into new option gateways. Your observations also generate such interesting replies. These blogs are much appreciated by all of us investors, whether we’re investing our money, our time, or our energy, or all of them!
Execution is what separates successful exits from hoping to get your investment back.
I love this quote:
“ Here’s what surprised me most: the best entrepreneurs don’t have the best ideas. They have the best response to failure‘
John, glad you resonated with that line. (Me too of course.) – Dave
My company’s survival depended on amazing customer service. That got us renewals. We usually fixed software or courseware errors by the next day after they were reported. Sometimes we fixed them within an hour.
After 25 years, we know that only a major upheaval in science education will pave the way for investment by outsiders. We keep chipping away, trying every marketing strategy we can afford. Today, we have a marketing partner, but that’s not turning out well… again.
A customer achieved the highest average state science test scores in the history of that test. Yet, we continue to struggle. Education is a tough market.
Harry, Yes! Marketing partnerships require a dedicated person on the company’s side. That makes no sense if the other side doesn’t have one. And your 25 years of experience helps keep that antenna up and tuned. Best,
Dave