Jul 6, 2018 · 31m · 20vc
20VC: Why Serial Entrepreneurship is Overrated, Why You Will Get Fired If You Listen To Your Board & How To Construct Investor Update Emails The Right Way with Joe Fernandez, Founder & CEO @ Joymode
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In this episode of The 20 Minute VC, serial entrepreneur Joe Fernandez, founder and CEO of Joy Mode, shares foundational insights on avoiding valuation traps, managing investor and board dynamics, and maintaining intellectual honesty while scaling startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 33.3% of the talking time here. How this is scored →
Harry as informed peer 3.4 Guest teaching 4.1 Guest disagreement 1.8 Harry pushing back 1.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 8:54 Serial entrepreneurship is overrated
Joe directly challenges the industry consensus, arguing that serial entrepreneurship is heavily inflated and causes founders to believe their own hype.
Hardest push from Harry ▶ 6:24 Direct probe on valuation mistakesHarry immediately follows up on Joe's reflection about Klout's high valuation by asking directly why he chose to raise at such an unsustainable price.
Biggest teaching moment ▶ 18:25 Board management reframeJoe reframes standard board advice with the aphorism 'if you listen to your board, you will get fired,' educating the host on how CEOs must synthesize data without being overly deferential.
Harry holds his own ▶ 17:58 Facebook mobile pivot contextHarry actively contributes to the discussion on 'burning the boats' by bringing up Facebook's strategic transition from desktop to mobile as a prime case study.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Early Entrepreneurial Roots and Unemployability | 3 | 2 | 1 | 2 | Harry introduces Joe Fernandez and asks about his early entrepreneurial background and Klout lessons. Harry cites investor Craig Shapiro to probe on key learnings, pushing slightly on why Joe took such a high valuation. | |
| Fundraising and Hiring Strategies: Joy Mode vs. Clout | 4 | 5 | 3 | 2 | Harry uses specific investor questions from Satya Patel and Hunter Walk regarding fundraising and hiring. Joe offers a contrarian reframe, asserting that serial entrepreneurship is overrated because founders get inflated praise for past outcomes. | |
| Ego Checking and Creating Feedback Loops | 3 | 4 | 1 | 1 | Harry asks how Joe keeps his ego in check and balances vision with reality. Joe shares concrete mechanisms like offering $10,000 bounties to employees who prove his strategic initiatives wrong. | |
| Frameworks for Lean Testing and OKR Execution | 4 | 4 | 1 | 1 | Harry brings up investor feedback from David Weissman regarding Joe's lean testing methodology. Joe outlines his structured testing process and how company OKRs flow down through individual levels. | |
| Making Big Bets to Win and "Burning the Boats" | 5 | 3 | 1 | 2 | Harry demonstrates industry expertise by suggesting Facebook's mobile pivot as a prime example of the 'burn the boats' approach. Joe elaborates on why founders fall into playing 'not to lose' after securing initial capital. | |
| Board Management and Knowing When to Push Back | 3 | 6 | 3 | 2 | Joe delivers an insightful lesson on board dynamics, noting that following board advice blindly gets CEOs fired. He illustrates this with a story of pushing ahead with a product release during a PR crisis despite board hesitation. | |
| Crafting Highly Effective Investor Update Emails | 3 | 5 | 2 | 2 | Joe describes his unconventional investor update philosophy of making investors 'terrified' rather than spinning good news. Harry follows up by asking whether Joe calls out individual investors publicly. | |
| Quick Fire Round: Silicon Valley, Culture, and Future Vision | 2 | 4 | 2 | 1 | In the quickfire round, Joe critiques VC elitism by recalling an investor who warned him he was 'not from the Academy.' He also shares a boxing metaphor for handling startup setbacks. |
Statements from this episode (13)
Joe Fernandez was fired from a dry cleaner in four hours
“I managed to get fired from a dry cleaner in four hours, so I've been very unemployable for a very long time.”
Raising too much money at high valuations is impossible to fix
“There was one mistake that was really basically impossible to fix, and it was raising too much money at too high of a valuation”
The social identity space should support a multi-billion dollar company
“The opportunity, I still believe, is huge in that space. Like, there should be a foundational, multi-billion dollar, like, fabric of the internet level company, and Doing what Cloud was trying to do.”
Klout's early hiring bar was simply a willingness to quit your job
“The bar to get hired at Clout was like willingness to quit your current job. If you were basically willing to quit your current job, you were on the team.”
Joe Fernandez argues serial entrepreneurship status is inflated
“And startups are just hard. And I don't think it matters how many times you've been through it. It's gonna going to be hard. And some of the serial entrepreneurship stuff, I think, is inflated, though I appreciate the benefit I get from it daily.”
Joe Fernandez suggests $10,000 internal bounties to disprove major startup initiatives
“So offering like almost a bounty of, you know, let's say, 10,000 dollars to somebody who could concretely say why this is a bad idea and why we'd be better off Putting our resources somewhere else is like a small price to pay to avoid taking that wrong turn.”
Fernandez: Joymode will iterate on its membership model until the company dies
“Like, there are things in our business, for example, we have this notion of a membership, which is kind of controversial in our structure, that I'm willing to basically kill the company to prove It is right, and I believe so strongly that that is kind of a cor…”
Startups need one initiative that investors fear will kill the company
“I think you should always have an initiative that you are working on that a huge portion of the team and investor base is afraid will kill the company. Like, that is a good barometer of, like, are you being daring enough?”
Founders who blindly follow board advice will definitely get fired
“If you don't listen to the board, you might get fired. If you do listen to the board, you will get fired. And I think that's true.”
Board input consists of data points, not instructions for CEOs
“Our, you know, provides data points that can be really helpful, but it's your job to synthesize those data points with everything else and with your vision and make decisions.”
Joe Fernandez spends six to eight hours writing each investor update email
“I write really in-depth investor emails, like spend 6:08 hours on one, They're all archived on a Google doc that is like almost 200 pages long.”
Investor updates should make investors terrified, not comfortable
“It's not at all about spin. It's not at all about like making them feel comfortable that they put all this money in the company. I want them to be terrified that they put money in this company.”
Founders should publicly praise helpful investors to subtly shame unhelpful ones
“I always want to create competition between my investors. I want the folks who have helped me to be recognized, to subtly shame the ones that haven't, and show appreciation for the people who are constantly going out of their way and making introductions and h…”