The best companies build worlds
Six months into investing full-time through my fund Common Magic. Wow. 2023 has been wild. I’m not sure I’ve ever been so broke, busy and happy all at once (and this time last year I would not have believed this trio of facts and feelings is the city I’d live in for so long).
Many reflections but one thing that’s been on my mind is how I know a company is for me. I don’t mean whether a company is “good” or “venture-backable”; I believe in investor-founder fit and am not a god or expert, just a person with opinions.
But I am a person out there doing a lot of first calls. As an optimist, I go into every call thinking this could be The One and very often I know in my gut in just a few minutes that either I’d like to dig in more or this isn’t for me.
What guides that sense?
Something Sublime’s Sari Azout said to me once after a call was that we had “thick conversations”. Like anyone who does a lot of short intro calls or experiences the trash fire of modern social media, I knew how the opposite felt. Thin conversations, chats when we’re rushed, dashed-off opinion. There’s a reason we call it “small talk”.
Beyond the mystery of connection (who you resonate with and why) her phrase made me realise something I look for in startups is the thickness of founder thinking.
I have the sense right from the start they’re building a world.
Worldbuilding is one of those frilly phrases that gets thrown around a lot in certain circles from fantasy fiction to the highs of 2021 crypto (this subreddit is a beautiful place to while away some time) but at heart humans have always wanted to build spaces to belong whether individually or collectively.
But how does this work in a startup context?
I think there are three ingredients.
(1) Firstly, a company needs a strong story that sets the tone.
(2) Then, secondly, this story helps build alignment both internally and externally (attracting talent + moving them in the same direction).
(3) Thirdly, together, these create the conditions for an ecosystem to thrive around your product (people who believe in and want to contribute to the world you’re building ). We might call this a community.
If that all sounds a little handwavy then let’s play it out using an ultra-practical example.
Take Stripe.
The story that anchors the world (1); Stripe exists to increase the GDP of the internet.
What Stripe actually builds and sells is a set of financial infrastructure products which naturally enable their customers to sell more….therefore increasing the GDP of the internet. But having a slightly grander worldview than ‘we sell financial infrastructure products” ensured the company attracted a distinct group of employees who then created a distinct set of cultural norms (2).
When I talk about cultural norms (I’m such a nerd for this topic overall) I mean how groups agree to work together; from company or industry specific slang to stylistic design choices to how decisions are made to communication styles. These become powerful reinforcing mechanisms that build alignment and enable groups to move forward effectively.
The cultural norms of Stripe are a larger topic than this humble post can support but a few artefacts that speak to the worldview include Claire Hughes Johnson’s working with me guide (obviously one person’s way of working but wonderfully telling when that person is the ex-COO) and the zines in Brie Wolfson’s Kool Aid Factory.
You could also include the existence of Stripe Press given how much this publishing house has articulated a worldview through physical books but I think this project belongs in (3). Beyond the pure utility of the products, you create an ecosystem around your products by articulating what you care about (whether through the product you interact with or the writers you publish — check out Berkshire mode on their latest book microsite for pure delight), attracting the right group of aligned builders, listening to their feedback to win trust and loyalty, and backing into larger and larger size customers.
Of course, it’s hard to compare what’s established in a huge tech company to a brand new startup so let’s also throw in as examples everything from Linear’s read me to Vision AI’s solarpunk manifesto to Browser Company’s weird cool launch video for AirMax (probably time to admit to myself I collect these kinds of examples).
Something I keep remembering in the first year building a sort of startup in Common Magic (and there aren’t many funds that have built worlds, although I’ve been tracking the beautiful jobs Compound and Spacecadet do) is that worlds rarely emerge fully formed. You have to think big while also working on + caring about the very small.
You have to be a little bit delusional to start anything new.
And how everything you see around you — from cities to parks to software, even this website — was probably once an idea that seemed unlikely to many that heard of it.
Everything starts with the story.
We live by the stories we tell ourselves whether those stories are motivating, inspiring, even limiting.
Tell your story to the right person and you might find yourself a true believer. Or a peer group who push you to work harder and do better (scenius = the idea of dense groups that build collective genius).
I’ll keep exploring this furrow but, for me as a learner, an enthusiast and also as an investor, the best companies build worlds.
