The Caller ID Test

When you take venture money, you’ve got to assume you’re signing up to work with someone for a period of years. The relationship better work because more likely than not, you’re going to go through some rough times together.

One quick test I think about (and I encourage entrepreneurs to think about as well) is to ask the question, “if I see this person’s caller ID on my phone, am I excited to pick it up or do I let it ring twice, take a deep breath and then answer the phone?”

Sounds trite, but it’s a good shorthand way of thinking about the issue of compatibility.

Another thing I feel I’ve learned over the years is that “every interaction is prologue” to the way a person will behave the in the future. What does that mean? I used to give people a lot more benefit of the doubt in early meetings if things didn’t go well. Let’s say the person didn’t pitch well. I used to have thoughts like “maybe they were nervous.”  If they got defensive when being asked tough questions, I used to consider that perhaps they were feeling unfairly pushed in front of a group of people.

I’ve come to realize that you’re much better off not making excuses for the person. In 99 out of 100 cases, if someone had a bad pitch, they likely don’t pitch well generally. If someone stumbled on a set of tough questions, then they probably aren’t good under pressure.

I know it can sound harsh, but this is a far simpler way of making decisions (and, IMHO, far more accurate). Make fewer excuses for people and you’ll make better choices about who you work with.

Lest you think this is about investors evaluating entrepreneurs, it should *definitely* go the other way. If your VC is late for your meeting, they probably don’t run on time. If they’re late replying to emails, that behavior will probably continue.

People are as they seem from the first interaction (for the most part). When deciding if you want to work together, make fewer excuses for them and remember the called ID test.

You’ll be much happier you did.

46 Comments

  1. Des says:

    Nice article Joe.

    “We are what we repeatedly do, therefore excellence is not an act, but a habit.”

    – Will Durant (rephrasing Aristotle)

  2. Ashtosh says:

    Really, awesome article outlining real struggle between dreamer vs venture capitalist. Irony is that “dreamer” wants to believe that dream can be made in real but VC thinks otherwise…once both agrees and start floating in middle we have witness miracle of believe success.

  3. Joseph Smarr says:

    When I was at Stanford in the last nineties, I remember Guy Kawasaki offering almost identical advice, except he called it the “Stanford Shopping Mall Test”, i.e. if you’re at the mall and you see the VC across the way, do you a) run over excitedly to say hi, b) think to yourself that you’ll say hi if you happen to bump into one another, but don’t go out of your way, or c) run for the exit. His advice was only to work with people you’d choose a) for. :)

  4. [...] blog today is called The Caller ID Test. TechStars Boulder Demo Day starts in 25 minutes and this post is super relevant for everyone in [...]

  5. We actually had two tests for judging our investors. First one was the shopping center test (http://blog.guykawasaki.com/2006/01/the_art_of_recr.html#axzz238xIHODc) that is normally used in hiring but in a sense, you are hiring your investor.

    The second one we had, which is more of a personal thing, was: Would I go out to dinner with that investor and take my wife?

    The idea there was to find out if the person is someone we would also like to be with outside of the entire investment theme. As they often say, you almost marry your investor, hence we should be able to connect outside of the board room.

    Oliver

  6. Len Kendall says:

    “When you take venture money, you’ve got to assume you’re signing up to work with someone for a period of years.”

    Even though this isn’t the focus of your post, it struck me as a refreshing statement. As someone who is relatively new to the startup space, I’ve felt like I’ve heard such consistent messaging around emerging companies being treated like elements of a stock portfolio or a vendor.

    A venture and a startup working together for years? The tech pundits lately almost make it seem like it doesn’t happen. That it’s all about massive traction and quick exits. But building a world class business should be the priority of both sides of the equation.

    Thanks for the reminder that that’s what it is all about and there are critical filters to consider when starting that long-term relationship.

    The one counter point I’ll make in regards to the crux of your article is the variable of time (or lack of it). When people see success, they often start to have less free time. This also can lead to less-disarable behaviors. Sometimes these behaviors don’t make themselves apparent at the start of the relationship. That’s why so many “good salesmen” can get through your caller ID test in the first place, but perhaps over time, become people you let go through to voivemail. I’d love to see a follow-up post on how to sniff out these more “talented” individuals.

  7. Thanks for sharing, I’m an Italian catholic priest involved in University Chaplaincy, but before become a priest I was an intellectual property lawyer… your ID test is also a very good auto test.. what my students will think when I’m ringing?

    All the best!

    don luca

  8. Kelsey Times says:

    Joe,

    What great advice for an a business student like me! I’m an undergraduate at Washington University in St. Louis and look forward to reading more of your writing.

  9. Becucamiu says:

    Very true, it makes sense for the business. I come from Vietnam, so the language is limited, please inform the author feels, thanks a lot

  10. James Salsman says:

    How much does support depend on the ability to pitch, compared to the investors understanding of the proposition?

  11. Lois says:

    Seek VC/partner for new tech..how do i contact you?

  12. Daniel says:

    fgsfg

  13. Edmund says:

    Thx for sharing~=)

  14. [...] blog today is called The Caller ID Test. TechStars Boulder Demo Day starts in 25 minutes and this post is super relevant for everyone in [...]

  15. As a prof. at the Leon Hess Biz School (LHBS) here at Monmouth, I’m having difficuty convincing our Administration that Google may or shall I phrase it DEFINITELY help us achieve our goals.

    Waz wondering if your team could help build a new deaprtment I tentatively named “Digital Business Department (DBD)”. I teach/research Management Information Systems (MIS), Data Mining, & Knowledge Management. However, I’m particularly interested in Radical Innovation, and am constantly IMPRESSED with the Goog models.

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  16. rob says:

    This certainly explains why the VC segment has outperformed over the last decade (Har har). And it certainly sets up the future working relationship where management has to deal with micromanaging VCs.

    A good founder and a good VC should exchange a 2 line email once a month- and meet in a board meeting once a Q. If they genuinely enjoy each other (rare) then lunch is appropriate.

    More than this it means the CEO is weak and doesn’t set boundaries or the VC is weak with nervous money (most have lost investors tons) and wants to know everything about everything, not recognizing that time is money. To a small team that monthly meeting takes up 20-30 man hours prep. time just so directors can gloss over the presentation and half listen while checking their emails.

  17. ad van gorp says:

    Dear Joe,

    my name is Ad van Gorp and I am co-founder and CEO of Lead pharma in the Nehterlands. LPH is developing new medication against heart failure and cancer. How can we get in contact with Google venture.

    Best regards

    Ad

  18. Seraj Ahmad says:

    In general, I agree with your idea but using just one data point or fewer data points to make the judgement may be short-sighted. Do you really think you can decide about a person’s attitude or personality in 25 minutes?

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  20. Jared Stenquist says:

    That’s a really good idea. And before you start doing those cold calls, be sure to double check that your callerID is showing the right name in the first place.

    At a prior company of mine, our sales team was making calls for over a month without realizing our callerID was showing the name of another company.

    This is the tool I use at work: CallerIDTest.com

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  22. jon online says:

    I just try to avoid the phone is much as possible

  23. Ivonne says:

    Nice info. Thanks

  24. Brad says:

    Great ! It’s nice to find your web

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