How to add value?
Working in startups or venture capital can be a lucrative and rewarding career path. But what is the best way to break in or advance your career in these fields?
I clump startups and venture capital together because the functional roles contribute to the same financial outcome: make a small company more valuable.
Many people talk about “adding value” to both startups and VCs, but few specify what adding value is with precision. Many junior, but ambitious people subsequently run around trying to “add value”, but are not effective at it because no one tells them what exactly is valuable. I define this for you, so you can be valuable:
Don’t generate work
Some offer themselves up as a “free” unpaid generic intern. This is negative value. 99% of interns don’t add value, they in fact extract value. Non-expert interns take effort, time and overhead to train. This same effort is better allocated towards training a committed, full-time employee or any of the the myriad other tasks required for startup operations. An intern with no skill is essentially asking for a free summer school. This is no give; this is a take. Free interns are not free. Free interns cost the company time and money.
Don’t ask for coffee chats or calls. Successful people are busy, and generally don’t have time to chit chat. Just skip the pleasantries and go directly to stating how you imagine you can help the business. I delineate the ways you can help a business in this essay.
Every employee and intern ultimately has to answer this question: how do you make the company more money than it costs for the company to maintain you? You might be able to get away with this for awhile, but at some point (and for competent companies and operators, this timeline is very quick), you have to demonstrate why your personal P&L is positive.
So why do internships even exist in the first place? Well, internships are a recruiting pipeline and an employer brand marketing exercise. At scale, it is expensive to hire well and maintain a staff of full-time or contract recruiters and it’s especially time and effort intensive to interview and vet candidates. So internships are just one of many tactics to find good full-time employees, and the expected value of the individual intern is negative.
However, if you have skills and insight, offering “free” work can be a good approach to build new relationships. Let’s define types of work that is actually valuable.
Build
Every company packages up and sells some product or service i.e. a venture capital firm sells financial returns; W (getw.com) sells personal care products; Archive (archive.com) sells influencer marketing AI. So if you can help build the offer, then you are likely to be valuable. Unfortunately, most people cannot build and if they do have building skills, they likely do not have enough taste or domain expertise to know what to build for your specific customer base.
For investment companies, one might think that helping GPs find new investments is valuable. This is likely not the right approach for an aspiring investor to try to break into the industry. Helping GPs with the back office administration and helping them close more LPs is more directly valuable. If you believe your dealflow and initiative to create deal opportunity is strong, you should consider being an angel / solo GP yourself. Building a strong angel track record is likely a better path to attain a good GP role than working junior/mid-level roles at the average investment company. In truth, junior investors are cost centers because they have no taste and are adversely selected against. You’ll have to spend energy to put them on and teach them taste.
As important as it is to build, it’s equally important to have good taste. To develop taste, you have to talk to a lot of prospective customers and become an industry historian and prognosticator.
Talk to customers
Knowing who the customer is and what they will pay for is a constant, ever evolving battle. Most customers don’t actually know what they want and might actually tell you to build the wrong thing.
Hence, most novice entrepreneurs work on building things that don’t need to exist. They haven’t talked to enough customers nor do they have a deep enough understanding about the industry and market ecosystem in which they aspire to compete. A quick way to add value is to talk to more customers than anyone else at the company. This gives you a shot to have better taste to help determine what product to build and then how to package, sell, and market it.
It may sound low-level or rote to talk to customers, but this is actually the most important task that anyone can do. The person who understands the customer the best is likely the person who can best serve the customer. In business, the customer pays all the bills.
If you watch me on a typical work day, you'll just find me on the phone trying to better understand the customer: talking directly to customers or talking to partners and investors to better understand and support the customer.
Sell
If you know the customer well, then it carries that you should be good at selling them. Selling is the most important function at a company (with building a close co-equal) because making money is the existential purpose of a for-profit corporation.
If you can offer to sell on a commission or revenue share at no-risk to the employer, that’s an offer that’s hard to refuse as you make it risk-free.
For a venture capital gig, can you sell LPs on committing dollars to the firm? If you're already able to sell great CEOs of great businesses to take your money, you're already better than top quartile GPs, so you should revert to being a personal angel investor, build a track record, and raise your own fund. I will LP your angel investments as a Anti Fund venture partner/scout, etc.
Brand / Marketing
Do you have an audience that you can market against? Can you speak towards and have important people in your target demographic to pay attention to you? Do you have a good reputation that adds prestige to the company?
If you bring an audience with you, that’s valuable to a startup or a VC firm because you offer a new channel of distribution. Paying for attention is what marketing spend is. If you come with an ability to carry attention, you save marketing dollars and amplify the scarce budget that does exist.
I make content and write essays because I find it (1) personally amusing, and (2) it gives me a distribution channel that I otherwise would have to pay for.
Network
Can you plug me into networks that I want to have more access to? Usually these people fall into categories of customers, partners, and investors that help the business sell more product, save money, or gain more resources. Can you coordinate and host events where I can meet these types of people?
Business reverts to selling some thing to others, so the higher caliber people (whether they be customers, partners, or investors) you can bring into a startup’s ecosystem, the more valuable you are as a contributor.
I like hosting/co-hosting events and want to better systematize this process.
Build a new P&L and make your own job
Most people don’t know what they want to do and have no initiative to make something happen. Most companies don’t have a lot of time to figure out what you’re good at and try to figure out a role for you. Well-structured and thoughtful job descriptions and recruiting processes are rare.
The best jobs are not typically won through going through the front door.
My best suggestion to stand out and also accelerate your role within a job description is to bring an end-to-end project relevant to the company, and have the know-how and wherewithal to implement it. You essentially pitch your own P&L and de facto create and upgrade the role for yourself at the business.