Podcasts: Your Key to Understanding Venture Capitalists


Get ready for some name dropping. How about venture capitalists Guy Kawasaki and David Morgenthaler? The rock star of the venture capital world, and the senior statesman of venture capital, respectively.

This little name-dropping saga starts this past week when Guy Kawasaki came to Cleveland, Ohio. He spoke at an event that I could not attend (because I was too busy working on the Silicon Valley startup that I am involved in, Creative Weblogging).

But I did manage to listen to the podcast of the local radio program that Guy appeared on while in town.

So what is the point of this post, you are wondering right about now? Like that famous line in the movie The Graduate, I have just one word for you: podcasts.

Venture capitalists seem a mysterious species to most entrepreneurs. That’s where audio is so beautiful. Audio helps de-mystify them. A radio podcast like this reveals subtleties and personalities you can pick up only by listening to their voices . It yields richer insights than mere text words convey.

That is one of the key reasons that podcasting has a growing following and will always have a place, despite some naysayer predictions that it would never take off. In addition to the fact that sometimes you are physically in a better position to listen (such as while running or working out) than to read, the spoken word simply adds a deeper and more personal dimension.

With podcasts, you catch interpersonal dynamics. You hear nuances that you might miss simply from reading text. You can take a measure of the man or woman from hearing his or her voice.

For instance, in this particular radio show we hear Guy Kawasaki asking questions of the several other guests on the radio show. Here is someone who has written a business best seller and writes essays on his blog, routinely laying down wisdom. Then consider what Guy Kawasaki does for a living — he is a VC, which to some seems kind of like a god with money. To top it all off, he truly has developed a rock star following among entrepreneurs. Yet, what you realize from the radio show is that Guy has huge curiosity and seems unafraid to show that he does not know something. It is a wonderfully genuine and unexpected side of his personality.

You even hear some fascinating interplay between the venture capitalists.

For instance, David Morgenthaler came on the show at one point. David is the Founding Partner of the well-known venture capital firm — Morgenthaler Ventures — that bears his name. Even if you don’t follow venture capital circles much, your first clue of the man’s importance comes when you hear Guy Kawasaki ask in semi-awe when Morgenthaler is announced, “THE David Morgenthaler?”.

It just goes to show: even in the world of venture capital there are rock stars and then there are the “old money” stars. And even rock stars can be impressed.

Fascinating stuff — I recommend listening to podcasts for the nuances. They tell you a lot about the man or the woman.

Here are some additional highlights from that radio show, just in case you don’t have time to listen right away:

Question: What’s the secret behind Silicon Valley’s success?

Guy Kawasaki: It’s many factors, but the single biggest factor was the presence of Stanford University and its engineering department. Investing in local universities is probably the single biggest thing a region can do to increase entrepreneurship. But that’s a long term strategy, not something that happens quickly.

Question: What about risk taking?

Kawasaki: In one sense being an entrepreneur is about taking risks. However, the myth of the swashbuckling entrepreneur taking high risks is absolutely false. Yes, you take risks, but you are also trying to lower risk because you are constantly taking steps to mitigate risks.

Question: Do venture capitalists take risks?

Kawasaki: Venture capitalists sometimes put their own money into an investment, but generally they are investing other people’s money, such as from insurance companies and pension funds.

Question: What does it take to create an entrepreneurial climate?

Kawasaki: (1) a willingness to fail, and (2) people who will forgive people who fail.

Question: When should a founding entrepreneur hand over the reigns to someone else?

Guy Kawasaki: When it stops being fun. Most entrepreneurs stay too long.

Question: What is the gating factor limiting venture capital investment: availability of venture capital or the availability of good ideas?

David Morgenthaler: the gating item is the lack of innovative ideas. Venture capital follows opportunity. Venture capital does not create innovation. When Ohio was the greatest opportunity in the country about a hundred years ago, there was no institutional venture capital — it sprang up in 1945. Then when the opportunity arose in Silicon Valley, venture capital followed there.

* * * * * * * * * * * * *Listen to the entire podcast (MP3 — roughly 60 minutes in length).

The event Kawasaki came to town for was put on by the Red Room Revolution with participation by NEOSA.


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