The Decades-Long View
The gene carried by a small fraction of startup founders and CEOs, including some of the greatest.
Welcome to issue #49 of next big thing.
This week brought with it a few reminders of one of the genes I look for most in entrepreneurs I want to invest in: the ability to take a decades-long view in building the business of their dreams.
The first time I first-hand felt this gene present in a startup founding team was with ClassDojo, the community platform for teachers, kids, and families. We led the company’s Series A back in 2013 at my prior firm (it was the first early-stage investment I worked on!), and this week, ClassDojo has consistently been in the top few apps of the overall iOS and Google Play app stores. Its growth, engagement, and retention have snowballed since, resulting in it now having one of its strongest periods of performance in the 10 years since that investment, and 12 years since Sam Chaudhary and Liam Don founded the company.
In texting with Sam to celebrate and reflect on the week and the years of building, he shared with me the following quote from Amazon founder Jeff Bezos, from 2011:
If everything you do needs to work on a three-year time horizon, then you're competing against a lot of people. But if you're willing to invest on a seven-year time horizon, you're now competing against a fraction of those people, because very few companies are willing to do that. And just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.
From the earliest days of building ClassDojo, Sam and Liam have taken a very long-term orientation. They had (and still have) the mission to give every kid on Earth an education they love, and a long-term strategy for how their product could evolve to achieve it. It has grown from feedback to a communication app; from teachers to families and kids; from a network to an ecosystem of products and services that give kids learning experiences they love. The ambition of their mission, and their compounding plan for achieving it made them believe they could work on this company for many, many decades. I distinctly remember Sam saying that he would be content with this being his last job, on a walk we took together before signing that Series A term sheet in 2013, a sentiment he’s echoed several times in the past decade.
And when I look around the technology ecosystem, there are standout examples of companies with leaders that have had this uncanny gene. This has been another banner week for NVIDIA, the pioneering company in accelerated computing. NVIDIA was founded by Jensen Huang, Chris Malachowsky, and Curtis Priem in 1993. It went public and invented the graphics processing unit (GPU) in 1999. It launched the programming environment CUDA in 2006. It started pushing into enterprises and data centers (after being a predominantly consumer business) in 2009. It started talking seriously about artificial intelligence (AI) and the potential for its products’ use in AI in 2012. And 11 years on from that, as the world’s excitement for AI reached a fever pitch, it posted a $13B+ revenue quarter, up 2X year-over-year, with a 10% gain in its stock this week leading to it now having a market capitalization of $1.2 trillion. Jensen has been CEO for the whole journey, every day for 30 years.
It’s worth pondering the necessary conditions for a founder/CEO to be able to take a decades-long view.
First, the company they’re working on has to earn-the-right to be able to serve customers for decades. At some point in its “infancy,” a relative term when your company lasts for a very long time, it has to be winning. Customers have to absolutely love the product. The business has to have the momentum that feeds the founders’ and team’s belief that it is worth working on. The product and business model have to map to durability and sustainability. It is extraordinarily hard to keep something going and to build a timeless company if it doesn’t earn this right in the early days.
Second, the founders/CEO have to have a curiosity and desire to learn that keeps them fresh and engaged, many years in. When I think about the likes of Jeff Bezos, Jensen Huang, Elon Musk (of Tesla/SpaceX/PayPal), Mark Zuckerberg (of Meta), Patrick and John Collison (of Stripe), Sam Chaudhary and Liam Don, a common trait they all share is an insatiable intellectual spark and the ability to keep learning as their businesses and markets evolve.
Third, they have to believe in their bones in what they’re working on, and be all-in. There’s an obsession-level that I think founders who take a decades-long view have that others do not. I remember once chatting with Jensen and asking him if he invests in startups or venture funds. He said something like “Nikhil, I own my house, and I own NVIDIA stock. That’s about it.”
Others have written at length about this founder gene - there’s a good piece from 2020 by Michael Simmons titled Bezos, Musk, & Buffett See The World Differently, Because They See Time Differently, for example.
But my focus, and ours at Footwork, is on finding those founders who, even at the earliest stages of company building, exhibit signs of this gene. They are the ones who will build the next big thing, though it may take decades for the world to fully realize it.
I started next big thing to share unfiltered thoughts. I’d love your feedback, questions, and comments!
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Brilliant read - thanks for sharing Nikhil
Fantastic read! It’s such a tough balance to strike at the seed when clairvoyance is rewarded as much as the ability to adapt views to market feedback in a Bayesian way... but the determination to solve a problem large enough to sustain a generational company ought to transcend all the unknown unknowns along the way.