Fishy Founding

10/24/12Follow @joechung

I have a confession to make. Much to my profound personal surprise, I have become seriously addicted to fishing. Mind you, not the idyllic fly casting on the Scottish Weirs clad in tweed over waders sort of fishing. We’re talking big tuna fish into the hundreds of pounds trolled up from the depths of the North Atlantic. The sort of fishing where you actually consider the consequences (and hopefully take some precautions) of being pulled overboard because it actually happens from time to time.

Last November, as my fishing buddy and I were scraping the ice off the windshield of my boat in preparation for heading out to sea before sunrise, I actually said something like, “Holy Sh-t—this is insane. It’s November. It’s five in the morning. It’s pitch black and freezing. We are actually scraping ice off the F-ING boat in the freezing dark to go fishing, and there’s like an 80 percent chance we’re going to come back with nothing. WHAT THE HELL IS THE MATTER WITH US?” My friend, a fellow serial entrepreneur, stopped scraping long enough to say, “That’s easy. We’re addicted to a high risk / high reward activity. In fact, the high probability of getting skunked is exactly what makes it exciting to give it another try. It’s just like doing a startup.”

Aha. Now we’re getting someplace. It doesn’t take the Brain of Britain to see the deep metaphor mine to be exploited comparing fishing and startups, but as someone even more addicted to starting companies than trolling for pelagics, I couldn’t help but consider some of the more interesting analogies as we bumped along for the next several hours. One thing about fishing—you certainly have plenty of time for musing!

To start with, I’ll recall the 3 “rules of fishing” that I devised after getting completely skunked several times with my sons and fishing compatriots when we were all just starting to learn.

1. You can’t catch fish if you don’t go fishing

I know. Kind of obvious, right? But this simple truism got us up and out the door on some days when we were feeling pretty discouraged about the prospect of walking back through that door empty handed. I see a great deal more applicability as applied to the startup world, where it’s pretty common to encounter lots of pretty earnest folks who really really seem to want to do a startup, but have yet to leave the dock. At some point, you have to stop contemplating and analyzing, cast off your lines, and get yourself away from safe, solid land. Your odds of success, especially the first time out, may not be great, but I can guarantee you will fail to create a successful startup if you never even try.

2. You can’t catch fish if the fish aren’t there

Again, a simple truism, but one well worth considering when investing the time, fuel (not cheap!), and risk involved in a day of tuna fishing. You can have everything just right: the right lures, the right colors, the perfect presentation, etc. etc., but if you don’t actually get those hooks within sight of a tuna, you will most definitely strike out. The analogous principle for startups is that your business must fulfill an actual market need. I’ve seen a lot of startups that outwardly seem to be doing everything right: raising angel money, scrumming, iterating, shipping, pivoting, etc., but they aren’t getting any nibbles of data that indicate significant value to customers or partners.

To stretch the metaphor further, when we head out to sea we typically go armed with as much intelligence as possible about where the fish were yesterday. The problem is, of course, that just as in the stock market, past results do not guarantee future performance. Tunas can swim up to forty mph in short bursts, but their normal “idle” speed is about five. So a school easily can (and do) move fifty miles away from yesterday’s sighting which can turn a banner yesterday into today’s longing disappointment. Likewise, startups tend to cluster around yesterday’s latest and greatest successes. Look at the number of new group buying sites that were launched well after Groupon had already achieved a dominant position. Foursquare single handedly created the Social/Local/Mobile space (aka “SoLoMo”). But like the fish, startup opportunities swim pretty fast and don’t sleep at night.

3. Be prepared to catch a fish

And lo and behold, it turns out if you get up enough mornings before dawn, set your lines, and manage to get yourself in the right place at the right time through intel, scientific reasoning, or just plain dumb luck, you will eventually find yourself with a big fish on the line. What happens next is kind of incredible: when the fish realizes it is hooked, it tears away from the boat with all its might, pulling line off the big reel as it dives. Tuna reels have a device which makes an audible click when it is losing line, and when you have a big fish on, the clicks come so fast together that the reel literally screams. I’m proud to say that when this finally happened to us, we knew exactly what to do because we’d talked it through a dozen times. I set the hook and put the boat on a slow safe course while my son reeled in the other lines. I fought the fish until we’d gained back the line we’d initially lost and then we traded places so I could take on the riskier task of actually landing it with a big handheld gaff. There was no shouting, panic, or confusion, and it wasn’t until the fish (120 pounder) was safely in the boat that we allowed ourselves to celebrate and congratulate.

The obvious parallel is that when things do start taking off in your startup, you want to have some kind of plan as to how best to capitalize on the opportunity, or at the very least, not to totally screw it up. High growth situations don’t leave a lot of room for error, and like the line screaming off the reel, there’s not a lot of time to deal with the sudden change in circumstances. Do you raise venture capital? Who do you hire? Who do you promote? Is the opportunity really something you want to pursue or are you actually better off cutting it loose? Obviously one can’t really plan for the unknown, but it’s absolutely possible to prepare by building a strong network of trusted advisors and fully understanding the strengths and weaknesses in your team and in yourself. When things start going crazy, there are going to be an amazing number of distractions masquerading as priorities, and it’s critical that you have the means to filter the noise.

Fundamentally, tuna fishing is a game of perseverance. You accept, especially when you are starting, that you’re going to fail 8 or 9 times out of 10. Coincidentally, those are exactly the same odds for a venture backed startup. But while failing to catch a huge fish may be disappointing, nobody questions your judgement when you want to head back out to give it another shot. Failure is just part of the process in a high risk / high reward game, which is why venture capital companies create broad portfolios over which they spread their risk. For entrepreneurs, however, a failed startup still carries enormous stigma, both social and professional, which is one of the truly idiotic things about this industry. Certainly there are poor entrepreneurs whose lack of skill undoubtedly contributed to a negative outcome. But there are also great entrepreneurs who happened to have set their hooks over barren water. In a game where the odds are against you, the only way to win is to take what you’ve learned from each failure and try, try again.

And yes, on that cold dark horrible November day, we caught a beautiful 65″ bluefin which we quickly measured, photographed, and released. He’s probably still out there now, well over 250 pounds, cruising the depths while scanning up towards the surface for his prey, poised to accelerate into a ferocious arcing attack that will burst him clear out of the ocean with his mouth clamped around a hapless mackerel, herring, or just maybe the lure of a lucky fisherman who was out there on a cold, dark dawn, persistent and prepared.

Joe Chung is Managing Director at Redstar Ventures, a company that creates companies, taking them from the earliest stages of ideation and growing them through their first institutional funding rounds and beyond. Joe tweets from @joechung. Follow @joechung

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  • Chris

    I don’t understand the pleasure of inserting a stainless-steel hook in the throat of a sentient animal, hanging it by its own weight out of the water, tearing the hook out, and throwing it back in.