As I'm writing this, I just finished a long email with a startup founder. This startup has a stellar team, and they quickly realized what didn't work. The company is going through a pivot. The CEO and I have been on the phone, on the email over the past few months, during which we have discussed, tested, and debated no less than five ideas.
I will be the first one to admit that, at times, as a VC/ advisor, it's tempting to jump in and offer one's own idea.
But that's not the right way to do it.
For one, VCs are generally good at observing the macro trends and betting on it - but terrible at originating great ideas. If we look at the iconic consumer tech companies over the past decades - Netflix, Uber, Airbnb, Twitter, Snap, TikTok, etc - none of those startup ideas come from VCs. Almost 100% of the time, these ideas were products of founders' own life experience and insights, which could be very different from a typical Sand Hill VC. That's why when the majority of great consumer companies get started, they had the most challenging time to convince others to invest. On the contrary, consumer startups who had an effortless time to raise money early on - thanks to VC hype - often turn out to be living short of the expectation and running of gas in the long term.
Secondly, VCs do play an important role and add value to a company's early life. Investors usually have the privilege to observe the macro market and study the ever-evolving dynamics by comparing multiple companies and tech. But VCs have to be very thoughtful about how an investor's insights can be translated into a company's actions. Over the past 10+ years as an investor, I've shared boards with both excellent and mediocre VCs. I learned that a good VC tends to ask great questions to provoke new thinkings from founders, whereas a bad one tends to force-feed his / her thoughts into the company.
During a startup pivot, the dynamics could be confusing and sometimes frustrating. And that's when a great founder / VC partnership is needed.