The Expectations One Has of Oneself Matter a Lot: Interview with Nick Cooney, Founder of Lever VC
I recently went one-on-one with Nick Cooney, founder of Lever VC.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Nick: Professionally I founded and serve as Managing Partner at the venture capital fund Lever VC, which invests globally in the Food and AgTech sectors. On the personal side, I spend most of my spare time working on and occasionally writing about effective charity and philanthropy work. While those may seem like two quite disparate bodies of work, there are similar threads that led to my interest in each.
I’m a very analytical person. Thinking through a scenario, quantifying the parameters, calculating the expected outcomes of various approaches, and from there strategizing the best path forward has always been highly interesting. At the same time, I’ve also been highly concerned about doing the right thing, by which I mean the ethically right thing. When we’re concerned with outcomes (like what reduces the most suffering in the world, or brings the most happiness), which I am, figuring out the ethically right thing to do is a lot more complex and challenging than it may seem, and my analytical side is regularly plugging away at trying to figure that out as best I can. Certainly, that’s what let me to write my most recent book, What We Don’t Do: Inaction in the Face of Suffering and the Drive to Do More. Lastly, I like creating new things that I think could work and should exist—turning a zero to one, to use Peter Thiel’s phrasing. Taken together, these threads have led to the professional work I do in the venture capital space as well as my deep personal interest in creating a better world through effective charity and philanthropy work.
I think the failures and setbacks that have been most instrumental to my own growth have generally shared a similar theme of running up against the hard wall of reality in one area or another. I wish that human culture was a certain way (more logically consistent, thoughtful, and selfless), and I wish that markets moved in the way they would if that were the case. I also wish that simply working hard in an area of value was enough to guarantee success. Routinely being reminded (through failures and setbacks) that reality is quite different, not only from what I would like it to be but also from what it is generally represented to be in popular culture, has over time helped me adjust my approach to be more pragmatic about what works and what doesn’t, about what is and is not possible.
Adam: What do you look for in companies you invest in? What are your best tips for investors and for entrepreneurs?
Nick: Ultimately the question for startups we at Lever VC are considering investing in is this: are you producing something that a meaningful chunk of people want and will pay money for, and that is not easy for many other companies to replicate? That “something” could be novel technology with intellectual property rights, it could be a product that is particularly delicious or nutritious (keep in mind I invest in the Food and AgTech space), it could be a brand with marketing that resonates really well with consumers, or some combination of these.
In addition, pricing (how expensive or inexpensive it is to buy equity in a company) and market size are also critical. Great companies can still be a terrible investment if the price is too high, and companies with excellent solutions can still be a poor investment if they are in a small market.
For both other investors and for entrepreneurs, I think one basic piece of advice is to understand at a granular level all the peers and dynamics of the category into which you are thinking of investing or launching a company.
Adam: In your experience, what are the key steps to growing and scaling your business?
Nick: This is going to vary from sector to sector, but a key first step is to figure out how to succeed at any level (even a small entry-level) with whatever it is you are trying to do. Importantly though, you’ll want to make sure that the approach you’re taking is one that has the ability to scale; ie by repeating a relatively similar approach you can generate 10x, 100x, perhaps 1,000x the sales you’re generating now. If you can’t (in theory) reach tens of millions of dollars in sales by replicating what you’re doing now, then either your business model or your market is not venture capital-backable.
Leaving aside business model and market size considerations, there are also some differences between companies that scale well and those that don’t in the same category. Intelligence (not book smarts but shrewdness of judgment, cleverness, etc) and work ethic make a big difference. Branding and marketing can make a major difference as well. The size of one’s ambition and the expectations one has of oneself matter a lot as well: those with high expectations and high ambitions can go a lot further a lot faster if the other requisite pieces are also in place.
Adam: What are your best tips on the topics of sales, marketing, and branding?
Nick: Lever VC invests in both b2b businesses (companies selling ingredients, software, hardware or services to other food or agriculture companies) as well as b2c companies selling packaged food products to. Sales cycles and the importance of marketing and branding are very different when you’re talking about b2b versus b2c companies.
For b2c companies, as a general point, I’d say it’s hard to underestimate the importance of good branding. Countless brands have become major successes in significant part because their packaging and their brand, in general, resonated with customers in a way that those of their peers did not. The challenge though is if you don’t have truly excellent aesthetic sense, it’s hard to recognize mediocre quality in your own branding. In the design space, there is a massive difference between someone who is top 1% in quality and someone who is top 10%. In my view, it’s best to assume that you are basically unqualified to assess questions like “Will this packaging design resonate with consumers” or “Is this designer a good designer for us to work with.” Instead of using your own judgment for such things, find multiple true experts in the space to give guidance, and use testing with the general public to get real-world feedback.
Adam: What do you believe are the defining qualities of an effective leader?
Nick: The dictionary definition of effective is “successful in producing a desired or intended result,” so the literal defining quality of an effective leader is how well they produce the desired outcome. I don’t mean to sound like a school child quoting Webster’s, but it’s an important point to make because discussions of effective leadership (or effective anything) often conflate actual effectiveness with possessing qualities that might correlate with effectiveness. Therefore results are pretty much the only thing we should look to in assessing if someone is an effective leader. (We can of course also assess leaders on other metrics, since effectiveness is critical but is not the only thing that matters in a leader).
Working in the venture capital space and tracking thousands of companies, some of which end up being big successes and most of which don’t, gives an interesting vantage point on what qualities seem to correlate with effectiveness. What has surprised me is that many very successful company builders lack one or more of the key traits often described as being important in an effective leader. I think being very strong in several key areas (and having some lucky breaks) is more important than being decently strong in all leadership areas. In terms of what qualities do tend to correlate with success, I would list intelligence, a very strong work ethic, and good communication and persuasion abilities as the most important ones.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Nick: To start with what not to do, I would say do not go to your local bookstore and buy books on how to be a more effective leader. Most of these consist nearly entirely of opinions wrapped in anecdotes. If you can find a book that is based on quantitative data, great. A book from someone who has built their own extremely successful company can also have some value (I drew some good lessons from Ray Dalio’s Principles for example), but keep in mind that everyone—even business titans—can draw inaccurate conclusions as to the reasons for their own success.
My best advice, besides looking at whatever studies and peer-reviewed literature are out there on the topic, would be to look for good models—people who are highly effective and who seem to possess the traits you want in yourself—and try to understand from their own work and words how they think, how they operate, and why they think and operate in those ways.
Adam: What do you hope readers take away from your new book?
Nick: While I hope a wide variety of people read it, one of the primary audiences I had in mind for the book was those who like me work in finance, business, or other higher-income professions, and who are used to thinking critically and systematically, but who may not yet have turned those skills and their ambition and resources toward helping those who are suffering greatly in the world around us.
As alluded to in the book’s title—What We Don’t Do: Inaction in the Face of Suffering and the Drive to Do More—I hope that readers take away two key realizations from the book. The first realization is that today by far the greatest harms we cause to others are harms that come from our own inaction, from failing to act to help others whom we have the ability to help. The second realization, and the flip side of the first, is that if we take a more thoughtful and deliberate approach to how we use the time, money, and energy we have, each one of us can dramatically improve the lives of thousands to millions of others. That is a pretty wild, jaw-dropping level of power and influence over the lives of others that those of us in the industrialized world have; it’s a level of power that prior to the past fifty years or so never existed in human history. The goal of What We Don’t Do is to help readers understand why and how we now have that power, and to provide motivation and guidance on how to use that power responsibly.
Adam: What is the single best piece of advice you have ever received?
Nick: When I was twenty years old I attended a conference where someone gave a rousing speech that included the following point, which resonated deeply with me and probably helped shape the trajectory of my life.
Right now, there are tens of millions, hundreds of millions of individuals who are just like us in all of the ways that matter and who are suffering in extreme misery when they need not be. Is there any better use of our time and energy, is there any better use of our life, than working to spare them from that suffering?
Adam Mendler is an entrepreneur, writer, speaker, educator, and nationally recognized authority on leadership. Adam is the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one-on-one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal-winning athletes, political and military leaders - for intimate half-hour conversations each week. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities, and non-profit organizations. Adam has written extensively on leadership and related topics, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. Adam teaches graduate-level courses on leadership at UCLA and is an advisor to numerous companies and leaders. A Los Angeles native, Adam is a lifelong Angels fan and an avid backgammon player.
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