I meet with a lot of people to exchange ideas and advice. Lately I have noticed a very powerful trait that the most authentic founders, investors, and advisors exercise. I call it the "DGF Principle." Since I come from a military background, I really love acronyms. DGF stands for "Don't Give a F#$k" (aka Direct Given Feedback). Despite containing a curse word, this acronym actually connotes a very positive trait that I've noticed in the most authentic people I've come across in Silicon Valley. DGF People are not insecure and they are willing to provide direct and honest feedback to you.
People who demonstrate the DGF Principle are always mindful of your time. Out of respect for you and for the process of *becoming* an entrepreneur, they don't waste your time by giving you mixed signals or blowing sunshine up your ass. If they don't like your product, they will tell you why. If they are concerned about your market or product they will explain their rationale. If they are concerned about your team, they will communicate this to you. Sometimes their criticism might come across as being harsh, but I have found that so long as they are authentic and honest, then the feedback is constructive at worst and empowering at best. You always walk away knowing where you stand with DGF people, which frees up mental bandwidth to focus on other priorities instead of attempting to second guess them.
When I meet with fellow entrepreneurs I try my best to exercise the DGF Principle. This motivation stems from my belief that you should strive to live the Golden Rule and "treat others as you would want to be treated." Although it seems simple enough, sometimes it can be hard to exercise the DGF Principle because delivering honest feedback can often be a bit uncomfortable in the near-term. But in the long-term it is the most efficient and valuable way to exchange ideas and feedback if you're an entrepreneur, advisor, or investor.
In the past I wish more people would have just told me if they thought my product sucked or if they would NOT use it rather than sidestep the issue. Sometimes giving or receiving a 'No' can be a blessing in disguise, especially when it's wrapped in a thoughtful explanation, which provides clarity on the issue. That's why it's important to seek out authentic people to exchange ideas and advice — because they are most likely to exercise the DGF Principle.
Case in point, a few years ago when I was raising capital for a software company, I had introductions and meetings with notable investors. One investor, in particular liked our market, liked our team, and appreciated our ability to execute with product and customers. He dug in to get more information about the deal, made great introductions, provided honest feedback, and most of all — he was *fast*. He did not waste our time. When he ultimately passed on the deal, he thoughtfully explained his rationale and thanked us for considering him. To this day, I still have a great relationship with this DGF investor. In fact, I have referred him good deals and recommended him to other founders raising capital.
In contrast, another investor strung us along, sucked our brains for market intel, and wasted our time before passing. I would *never* refer deals or make founder introductions to this investor who wasted our time. In fact, I have advised founders to tread cautiously or avoid them altogether. This is just one example, but the DGF Principle applies to any situation where ideas and advice are exchanged. Exercising the DGF Principle really means that you are taking the *high ground* and valuing people on a long-term basis.
In my experience the people who demonstrate the DGF Principle are the cornerstones of the Silicon Valley ecosystem. They are intrinsically grounded and confident in their individualism and rather than give you the run around or mixed signals, they will actually let you know what they think. Often times these people are just more confident in their skins due to experience or because they have reached a certain level of success and they are not afraid to rock the boat. In limited situations, these people can be younger, but guided by a sense of authenticity that might take years (if ever) for some people to develop. My theory is that the DGF Principle might come naturally/intuitively to some people, but it is a trait/skill that can be developed over time if one makes it a priority.
Silicon Valley is a special place because of the cultural treasure trove of entrepreneurs, investors, and tech people that are willing to give you their time, extend their networks, and exercise a certain degree of empathy that is unique to the global entrepreneur community. I hope more entrepreneurs, investors, and members of the startup community adopt the DGF Principle because being authentic and honest is the best way to help others in the long-term even if it might not be the most comfortable way of handling things in the near-term.
*** Special thanks to Nader Ghaffari and Daniel R. Odio for providing feedback on this piece before publishing. ***
Brilliant. Insightful. A principle that requires widespread adoption. Much appreciated!
Matt, thanks for taking the time to write this up. DGF is an attitude exhibited largely in the valley, and for those who aren't used to it (i.e., transplants from DC, where I moved from 2 years ago), it takes some time to get used to, but it's great once you get into the groove of the culture.
On the other hand, I have had experiences with prospective investors that didn't respect my time, and like you, I've sworn to never share any future investment opportunities with them. While I very much appreciate honest feedback from investors, I can never understand the motivations of those that don't provide a timely answer -- or worse, those that commit and then back out.
This is the first of a multi-part blog post I'll be writing over the next week that will chronicle my experience raising a $1MM round for AppMakr.
I'll be sharing my learning and experiences as a first-time fundraiser out here in the Valley. My goal is to provide pragmatic tips to help other entrepreneurs understand the process and short-cut the time fundraising typically takes. Think of it as download that condenses 4 months of learning into a series of blogs you can read in an hour.
Be sure to subscribe to the blog if you'd like to get those future posts. Also, we're throwing a party to thank the investors who made this round possible, and celebrating the fact that over 1,000,000 people have now used apps made through AppMakr. RSVP here to join us on 10/28 at 6:30pm. You'll meet Mitch Kapor, George Zachary, Pietro Dova, Ben Narasin and other AppMakr investors.
For this first post, I scored an interview with Naval Ravikant, one of the co-founders of VentureHacks, which runs AngelList. AppMakr went through AngelList, and intros from AngelList were responsible for 54.5% ($545k) of the $1MM we raised. Needless to say, these guys rock. I'd also like to give a huge shout-out to my brother Sam Odio and amazing entrepreneur James Hong, both of whom intro'd me to Nivi & Naval of AngelList at the beginning of our fundraising process.
Here's the video with Naval:
I mentioned last week that I had a deadline which I was working towards. I'm going to explain a bit more about this because a) it's consuming my life these days and b) I have the feeling this is going to be the beginning of something big. If it is something big, I think it might be interesting to hear it from the beginning.
What is Y Combinator?
Y Combinator is a "startup accelerator". Since that doesn't mean much, I'll explain how it works. You and your cofounder apply to Y Combinator. If they like you and your startup idea, they give you around $20k in exchange for a small piece of your company.