We believe deeply in the work that we do. And at the same time, we believe deeply in the value of militant transparency. As a team, we’ve experienced a number of failures and false starts over the past few years. And to keep us humble and to ensure that we always learn from them, we enumerate them here.
Measuring Our Impact
We have been incredibly fortunate to attract some notable names to the Unreasonable Institute and score some great press (in places like the New York Times, Inc. Magazine, and the Wall Street Journal). But now that we’re three years old, people should no longer be impressed by big names and press. They should be asking what are our results are.
The truth is that we haven’t made it a priority to measure our results or impact to date. Some of it’s a bandwidth issue, some of it’s a lack of clarity about the best way to do it. But we’ve known for some time that we really need to get serious about it. So we’ve taken the first step and built this results page. It offers some basic information about the number of ventures that have come through, how many are active, and how many have raised money.
What we really care about when it comes to measuring impact is the number of lives that our entrepreneurs have changed and how the planet is better of thanks to their efforts. That data is a lot harder for us to obtain and measure effectively, partially because it will take some time before our entrepreneurs’ efforts translate into tangible outcomes for the people they serve and for the environment. We’re working, however, on a strategy to measure and to display that. We welcome thoughts and feedback on how to go about this as well.
The Unreasonable Marketplace
The Unreasonable Marketplace is the crowdfunding platform we used from 2010-2012 to select our entrepreneurs. It served as the final stage of our vetting process. And while it was an incredibly elegant solution to making the Institute accessible, to serving as our financial engine, and selecting strong entrepreneurs, it proved to be unfair to applicants from different countries. We detail the story in this blog post. Our failure here was not attempting the Marketplace, it was that we recognized it was unfair and failed to act sooner. It’s learning from this mistake that has led us to stop using the Marketplace as vehicle for selection in 2013. Instead, the Marketplace will be available for entrepreneurs once selected to raise funds they need to pay for the Institute, with some help from our team.
2010 and 2011 Investor Days in San Francisco
A big part of the Unreasonable Institute is giving our entrepreneurs access to funding. In our first two years, we thought that meant training our entrepreneurs to pitch incredibly well and then putting them in front of a room of investors.
We were wrong. In the first two years of the Unreasonable Institute, we took all of our entrepreneurs to San Francisco, the densest concentration of impact investors in the world, for a pitch day. Some notable funders showed up, but zero dollars were invested in our entrepreneurs as a consequence of these two days.
Why? We’ve learned since that pitching is a very small part of raising capital. The pitch is what you do to get an investor interested to meet with you. But that’s where they really want to get to know you as an entrepreneur and to get to know your business. We spent so much time preparing our entrepreneurs to pitch in our first two years, and very little time helping to build real businesses and to make the most from the one-on-one conversations with investors that might eventually lead to capital. We also didn’t properly “pre-dispose” the investors in the room. In other words, they came in relatively cold without knowing what the entrepreneurs were doing already. They didn’t know which entrepreneurs they should really pay attention to and which ones weren’t as relevant to them. And we didn’t set the investors up for success by giving them the chance to “syndicate” with other investors.
All these learnings, along with some inspiration from Startup Weekend, ReWork, and Unreasonable Mentor Tom Chi (of Google X), helped us to build the current version of Investor Days. In it, our entrepreneurs only pitch for 2 minutes each, specifically mentioning the challenges they are facing and what they need help with.
Then each entrepreneur hosts a “breakout session.” Investors, who have been provided with materials and summaries of the entrepreneurs before hand, attend the 45-minute sessions of the entrepreneurs they are interested in in groups of 3-7. As a team, we ask them to parachute into the role of “board members” for the entrepreneurs they are meeting with for the duration of the breakout session. In those 45 minutes, the entrepreneur explains the business, fields some questions, and articulates the key challenges they are facing, whether those are related to getting funding (including how to structure term sheets, how to spend the money, etc.) or operations (including how to scale, who to hire, etc.). The openness of the entrepreneurs and the invitation to solve challenges together brings entrepreneurs and investors to the same side of the table as teammates. And the results were extraordinary. 21 of 22 entrepreneurs left Investor Days with an average of 8 investors following up with them. In the month that followed our 2012 Investor Days, 11 ventures already secured firm commitments. Unreasonable Angel Elizabeth Kraus wrote this blog post about why she felt this year’s Investor Days was a success.
Each year, the entrepreneurs come together and feel like a family at the Unreasonable Institute. And while the strong relationships that entrepreneurs form with each other, with mentors and funders, and the team, sustain organically through the years, some of our alumni have told us they are disappointed we haven’t done more to support them after leaving Unreasonable Institute or to keep the sense of community as strong as it once was. In truth, over the past three years, we’ve been relatively unintentional about supporting our entrepreneurs into the long-term, even though one of the most frequent questions we get is “What happens after your entrepreneurs leave the Institute?”
That’s why, for the first time ever, we have a teammate who is wholly dedicated to alumni support and is rolling out a strategy to support our entrepreneurs into the long-term. That’s Cesar Gonzalez, VP of Fellows & Alumni. As these programs grow robust, we’ll update our website to reflect what we offer entrepreneurs after leaving the Institute. But this is a lesson we are not taking lightly. Our entrepreneurs deserve this support and we are looking forward to the day that we can provide it to them.
Treating Our Own Team Like the Messiah
There’s an old saying that the cobbler’s son has no shoes. While our first value at the Unreasonable Institute is to treat everyone we meet like they are the Messiah in the room, we have often failed to treat our own team with the same intentionality and respect. We love our team and spend most of our free time hanging out with each other. But we haven’t made sure that members of our team have health insurance or clear vacation policies. We haven’t always made sure members of our team have the tools, resources, and availability to other members of the team they need to succeed. We haven’t on-boarded nearly as well as we can.
In the coming months, this is a major priority for us and for our leadership on the Unreasonable Team. If this team is going to take care of our entrepreneurs, then we need to make sure that it’s taken care of incredibly well. We’ve spent the past few months reading books like Delivering Happiness by Tony Hsieh (on building a world-class team culture), learning from experts on building teams like Jerry Colonna, and dedicating board meetings to learning how to best support our own team. We have still have much to do.
Helping our Entrepreneurs Deal with Mentor Whiplash
Accelerator programs that bring in mentors suffer from a common affliction. TechStars calls it “mentor whiplash” (a term that we very much agree with). It means that an entrepreneur frequently gets completely contradictory advice from the highly-opinionated, though very intelligent, mentors that come through. Our own entrepreneurs have reported struggling with mentor whiplash since year one of the Institute and we have never intentionally helped them to navigate contradictory feedback.
In the coming year, we plan to lead a few workshops on how to absorb mentor feedback and lead more sessions on how to make the most of mentor meetings to start with. We’ve found that our entrepreneurs are not always quite sure how to make use of the time that they have with mentors, what advice to ignore, and what advice to retain.
Unreasonable Ventures that Failed
Of the 70 organizations that have come through the Unreasonable Institute so far, 10 have failed. The reasons these ventures have failed are varied, but are mostly due to co-founder struggles and running out of money. While we don’t consider the entrepreneurs who have moved on from their ventures failures by any means at all (in fact, some of them have gone on to greater heights), we want to recognize that some of the ventures that come through the Unreasonable Institute don’t survive. We spend most of our time and most of our marketing talking about all the our active ventures have raised, for example. But at the same time we know that this isn’t everyone’s story. We honor our entrepreneurs who had the courage to move on from their ventures. In every situation we know of, we stand by them and support their decision, believing they did the right thing. We’ll continue to support them as they move forward into other adventures because we believe in them. We know the work they do will be a manifestation of them and their beliefs.