A Nice Ring To It

Posted December 18, 2012

I’ve been starting technology companies since 1999, which means for most of my adult life, I’ve been immersed in the process of trying to take an idea and turn it into a company.

I realized long ago that I had a knack for making something out of nothing. I had a knack for imagining the possibility of what an idea could become and then weaving together the pieces necessary to turn that idea into reality.

Like most entrepreneurs, I am far from perfect. I am good at some stuff, and bad at other stuff. But I have realized I seem to thrive and am best at the early stuff.

Shortly after Brad Keywell and I help launch a company, we recruit talented people to help us grow and build it. I’m especially proud of the track record we have established hiring amazing executives to run our companies. Our CEOs – from Eric Belcher at InnerWorkings, to Doug Waggoner at Echo, to Bill Wise at MediaOcean – are as good as it gets.

My role has always been more complicated at Groupon, as I am a co-founder as well as its first investor. Andrew has been the founder and CEO since Day One, which has permitted me to act more like a super-active investor and director than a member of the management team. So unlike our other companies, there was no CEO to recruit, so I could eventually move on as Andrew was always in that role.

In addition to managing Groupon’s meteoric rise, he has done an amazing job expanding the team over time as the Company grew. Just in the past 18 months or so, he has added:

Jason Child – former VP of Finance and CFO, International at Amazon
Veit Dengler – former Executive Director and General Manager at Dell
Jeff Holden, SVP – former SVP Consumer Websites Worldwide at Amazon
Faisal Masud – former General Manager of Global Fulfillment at Ebay
Kal Raman – former CEO of Drugstore.com; former SVP at Amazon
David Schellhase – former EVP and General Counsel at Salesforce.com
Brian “Skip” Schipper – former SVP Human Resources at Cisco
Brian Totty – former CEO of Ludic; former VP at Inktomi

Any entrepreneur can appreciate being understaffed, so in the early days whenever Andrew needed me, I would help out – typically with finance, operations and legal.

When Groupon was a “young” company, Andrew and I wore a lot of different hats. Every time we hired someone new, we gave up a hat. Given the breadth of the team today, everyone’s hat is planted firmly on the right head, which has allowed me to focus on doing what I do best.

I look forward to continuing to work with Andrew in my ongoing role as Chairman of the Board, but in the meantime, I’ve immersed myself in Lightbank and am focused on growing the company and working with Brad and the rest of the Lightbank team to try to define what it should be as it matures. For me, one of the best ways to do that is to start by defining what Lightbank shouldn’t be.

We shouldn’t be just another venture capital firm. The world has lots of those, and doesn’t need another.

We shouldn’t be a firm that is focused on volume. Since we don’t really have LPs and aren’t in the business of making money by charging 2% annual fees, there should be an artistic quality to the projects we work on.

We shouldn’t be solely focused on ROI or short term profits. We should be focused on creating and investing in the kinds of companies we wish existed, not just ones that will make us money.

We shouldn’t be forced to follow rules. The beauty of investing your own money is that you don’t need to live by other people’s rules. We invest in anything that makes sense to us. It might be early or it might be late; we might own it all or we might own a very small piece of it; we might be very involved or we might be completely passive – you get the point.

We shouldn’t give up easily. If we get involved in something because we believe in it, we shouldn’t lose conviction just because the business has trouble getting off the ground. We hear from other VCs all the time, that when something isn’t working it’s important to cut your losses and move on. We don’t like moving on.

We shouldn’t add value in conventional ways. There are lots of other VCs that do stuff to add value – they join boards, they make introductions, they act as advisors. We like to add value the old fashion way. We roll up our sleeves and actually do the work to build the business, just the like entrepreneurs we invest in and partner with.

We shouldn’t be small or small minded. We started Lightbank to accelerate our pace of disruption. The four companies we started in the ten years prior to Lightbank currently employ about 15,000 people and do about $8 billion in gross billings. If Lightbank is the follow up act, it better be big.

So when I started to think about all the things Lightbank shouldn’t be, it became pretty clear what it should be, or at least what I hope it one day will be.

Lightbank should be the Berkshire Hathaway of technology companies. I like the way Wikipedia defines it: “Berkshire Hathaway is an American multinational conglomerate holding company that oversees and manages a number of companies. The company averaged an annual growth in book value of 20.3% for its shareholders over the past 44 years.”

That has a nice ring to it…

-Eric Lefkofsky