In the mid/late 90s, we had a venture capital firm called Flatiron Partners. Our primary investor was Chase Capital Partners (CCP) and for the first year of our existence we worked out of CCP’s offices in midtown manhattan. I learned a lot from the partners at CCP, they were experienced and disciplined private equity investors. One of the best of the group was Arnie Chavkin and he taught me something that I come back to often. Arnie told me “get the strategy right and the execution is easy.”
Up to that point, about ten years into my venture capital investing experience, I did not have enough appreciation for strategy. I came from the “work hard and surround yourself with smart people and you will succeed” school. That’s how I went about my job and that’s what I looked for in teams to back. But Arnie’s words got my attention. The idea that execution could be easy was tantalizing to me. And it made sense. If everyone knows what the company is trying to do, and what it is explicitly not trying to do, then they can be focused and efficient in their work. It also caused me to look at the companies that I worked with that were working really hard but not succeeding and I could see that many of them were not pursuing an intelligent strategy.
One of my favorite stories about getting the strategy right is TACODA, a company that Brad Burnham and I were angel investors in during the post bubble period in the early 2000s. TACODA made enterprise software for media companies that allowed them to understand their audience and serve more targeted ads to them. TACODA was one of the earliest, if not the first, behavioral targeting companies. TACODA was working extremely hard, with a very gifted and experienced team, and yet four years in, they were struggling to build a business. My partner Brad became obsessed with the strategy and go to market and told Dave Morgan, the founder and CEO, that he was “working too hard and getting nowhere” and encouraged him to rethink his strategy. Ultimately Dave decided to flip the go to market model to an ad network and within a year the business exploded and it sold a few years later to AOL for something like $275mm.
TACODA had the right idea, the right team, the right tech, but not the right strategy. When they fixed that, a ton of good things happened.
So if you are working really hard and have a strong team and aren’t getting where you want to go, take a hard look at your strategy. As Arnie told me, once you get that right the execution will be easy.
