"Hard Startups" are Brands.

And why solving Real World Problems is about more than technology

Counterintuitively, successful (venture-backed) deeptech investing boils down to one core competency…brand building. That may sound strange, or even plain wrong, but taken in context of the outsized challenges these companies typically face relative to their software-only counterparts (specifically as it relates to talent and capital needs), it makes sense. Here’s Jeff Bezos on brand:

“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”

This idea of building a brand by doing “hard things well” resonates. It also makes me think of Sam Altman’s popular 2020 piece titled, “Hard Startups.” Here’s some relevant highlights from that piece:

“The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one.”

And here’s his core rationale that elucidates why we believe approaching Hard Startups as Brands is the way to success:

“The most precious commodity in the startup ecosystem right now is talented people, and for the most part talented people want to work on something they find meaningful.”

We think about these hard startups solving Real World Problems¹ as brands akin to Nike, Apple, and Google. Brands don’t just speak to consumers or customers, they are also critical to (current and prospective) employees and investors as well. It becomes a point of pride for each to be associated with companies or founders doing hard things well.

For Hard Startups facing scarce talent and fierce competition for limited investor dollars, building a brand with pragmatic ambition is key. It first must speak to the best talent, encouraging the exceptional to join the mission. Thereafter, the best capital tends to follow the best talent. And in our experience, the right blend of ambition, talent and capital is usually able to come together to build a product or deliver an experience that far exceeds expectations and delivers exceptional returns for investors, often on shorter timelines and on budgets far less than would be expected.

So the question we’re always asking ourselves, and what we look for in the founders we meet is, “are we/they prioritizing doing hard things well?”. All success starts there.

1. We generally think about Real World Problems as a category of challenges technology can solve that touch some element of the real world. It’s generally not Consumer Apps or Sales Productivity software. It tends to touch areas like more efficient communication, alternative energy, healthcare, AI, and similar.