Reputation Latency

During my first ever job in venture, one of the things I learned about first and foremost was the value of reputation. Venture in particular is a reputation driven business. After not working in it for a while, I’m fond of describing it as if all of the popular kids in high school decided to play a betting game where they bet on the nerd’s career paths. Fortunately for the nerds, there’s a bit of a reverse selection process where get to pick who gets to bet on them too.

Reputation matters for VCs, because if you have a bad one you might not get into certain deals that will be valuable. Investors in the investors (yes, they also have investors) pay attention too and it’s important for their fundraising cycle.

After having done it though, starting my own company I had to un-learn the reputation lesson because being a founder usually means being contrarian and often unliked for a long period of time. This is especially true often for the people the most number of degrees away from you. The people who are in your 2nd, 3rd, and 4th degree network will look at it from the outside and think “what an idiot,“ “that could never work,“ or “that person is CRAZY“ and that’s the point!

If what you were doing was obvious, then everyone would be doing it. Now, you should care about your 1st degree reputation. If you have a reputation for doing shady things with the people closest to you - this matters a lot, because the reputation lags. All the other noise though, ignore it. If other entrepreneurs look up to you, usually that means good things. If the popular kids make fun of you, that’s also a good thing. There’s a reason they’re playing the betting game and not building themselves.

What’s funny is the 2nd, 3rd, and 4th degree reputation will lag by years often because most people don’t keep up. For me it’s funny because I sometimes find myself rehashing some stupid 1st time founder mistake I made years ago, and think to myself, if only they knew where I was now….