Excellent topic and balance of perspectives

Just a quick note to say that I admire all of your effort to maintain your show and the podcasts and the overall presentation of the Tech Angels. Sometime in the not too distant future, I’d welcome an opportunity to catch up.

Nothing like seeing two of my friends rockin' your podcast, Frank! I'm plugging this on Facebook & Twitter.

Woohoo,
Norris

Wow!!! Talk about a ton of work gathering up all this research and analyzing it, but not once did they say how this research will improve the bottom lines of Angels, but they're still going to do even more of it anyway.

But they say they have to first come up with an agreed upon definition of passion. How about first agreeing on the dollar value this research has for Angels?

Sounds like some Angels are still trying to figure out how to pick winning lotto numbers. If they just had this passion thing figured out, their returns over the past ten years would be a lot better.

So what happens when these two are successful in teaching entrepreneurs how to display passion? Angels will still be left right back where they started in trying to separate the wheat from the chaff.

I wouldn't be surprised if research shows that the Angels who are looking for these magic bullets, such as passion, that will lead them to good investments, have made their fortunes riding an economic boom probably created by an advancement in technology, rather than the more common lengthy process of building wealth over a long period of time.

Is this really where Angels are today, focusing on passion? It sounds like all that talk a couple months back about changing the investment approach was just talk?

Sudek sounds like the Titanic. He started this research a long time ago. The industry has crashed since then. But he doesn't have the ability to stop or make a u-turn. He says his research will potentially improve the Angel's evaluation process. That's just another way of saying he hasn't yet figured out if it matters.

Isn't passion another way of saying lifestyle investment? Not one word in this interview regarding the exit.

John Huston Has Told Us That It Is The Source Of Someone's Passion That Is More Important And That Passion Alone Doesn't Cut It.

Cardon mentioned that some Angels said theydidn'tt care about passion. Shouldn'tt the research have started with identifying which Angels are more successful, the ones that care about passion or the ones thatdon'tt? Shouldn'tt it have started with what tdoesn't
In a previous interview, John Huston discussed the questions he asks to help him discern an Entrepreneur's passion. He says he doesn't want the guy who is driven by money, the big score, the 10X exit. Of course he wants someone who has a healthy respect for money, but he says the venture seldom turns out to be as good as is hoped, or sometimes the business model has to change entirely. So he wants someone who is not going to become disenchanted when reality sets in. He wants someone with the discipline and common sense to see it through even after life throws you a few curve balls. If you have to take the walk, even if it means letting the ball hit you, then you take the walk. You keep moving forward and don�t quit on your team, the venture and the investors.

John Huston has told us that there are some types of passion that are to be avoided. It looks like some Angels have already got this passion thing figured out. But Cardon claimed that no one has ever defined it. It is the nature of the beast that researchers always need to claim to be breaking new ground.

Sudek talks about the different types of passion, saying not all show it extrovertedly. He says some who are passionate are not extroverted but their passion can be seen in their commitment. If we are to learn from what John Huston has told us, it is the source of one�s passion that is more important. Someone who is showing their passion by being committed might be committed just because he is looking at the venture a certain way and when things change so does his commitment/passion.

Sudek had mentioned that the Entrepreneur needs to have passion but still listen. He used the example that when an Entrepreneur hears patterns of people saying it won�t work. Maybe the business model does need to be changed or maybe the way it is communicated needs to be changed. It is ironic how this Angel researcher does not also put the shoe on the other foot. It is fair to say that Angels with their bad track record over the past 10 years need to learn how to better listen for good investment opportunities. Isn�t 10 years a long enough pattern?

As long as this passion research does not discern between the successful exits and the not so successful exits, it is just research on how to tell people what they want to hear. It is not going to help make the needed changes in the venture industry.

When It Comes To Passion, Angels Want To Have Their Cake And Eat It Too.

I've also studied passion. Nowadays one can go online and see the videos of pitches by those who have gotten funded. Some of these videos are old enough that those opportunities have since lost their luster or have failed.

What one can see from those videos is that many Angels have not followed the advice of John Huston who cautions to stay away from Entrepreneurs that are married to the idea/product or married to the belief that they are going to make a ton of money. Because more likely those things are going to change and if that is the source of the Entrepreneurs passion, his passion is going to fade.

What the videos show us is that it has been the bubbly cheerleader type personality that gets funded. What most Angels haven't realized is that they can't have a lean and mean venture and the happy bubbly CEO at the same time.

I work in real estate management of residential properties in a competitive market. If we are not keeping ahead of most of the competition the rents drop by $500 to as much as $1,250. Many of our clients run out of runway every month. We never know when a tenant is going to move out. It is a precarious time sensitive balancing act with the cash flow. I hire and manage the work of a wide variety of different types of contractors.

Just as Angels have to be concerned about the type of person they are investing in, I have to be concerned about the type of people I give contracts to. Some of the last things I need include:
1. People who say they know how to do their job. These people never give me quality work on time that I can sell. There are only so many customers on the market and we need to get them before our competition does.
2. People who walk around the property pointing out all the things that could be improved. Things can always be better, but there is no point in blowing the budget and not being able to pay the mortgage. None of the improvements matter when the cost of doing them puts us out of business.
3. People who are fun to be around. When I and the people I hire are on a jobsite, we're there to take the competition head on, not to party. Our joy comes from the fact that the properties we work on have shorter marketing times and get higher prices than the competition. We know we are still going to have a job tomorrow in this competitive market when we do that.

One of the things I've learned about guiding the quality of people's work is that there is only so much room in both people's minds and hearts at any given time. One might think that if workers are taught to see the big picture of the market or the overall design of the project, they take this knowledge and make better decisions in their work. The truth is that they come up with a good idea once in a while, which perpetuates this myth, but most often when dealing with a skilled workforce, it lowers the quality and efficiency of the work because it clouds their minds.

The converse is also true. The more highly skilled one is at a specific task, the less skilled they are at seeing the big picture. Each skill set requires a certain amount of time be committed to it. When time is put into one, the other suffers.

I am constantly correcting my contractors. No, do it like this, not like that; take this apart and redo it a different way; and so on. It's not that they lack the competence; they often feel they should have thought of it. The simple fact is that they are focused on time efficiency and the quality of how good their work looks. That requires a high amount of focus. Therefore they often don't have room in their heads to think about the big picture and overall design, and how it compares to the competition.

Whether it's Angel investing or managing any other type of workforce, one has to decide what skills they want the individuals to be best at. Like the old saying says, no man is an island.

In looking at the videos of Entrepreneurs online, one can find videos from before and after the Entrepreneur has received coaching from Angels. Many of the videos contain outlandish claims after an Angel gets a hold of the Entrepreneur. What Angels don't realize is that by requiring their Entrepreneurs to learn how to be bubbly cheerleaders, they are reducing the Entrepreneur's effectiveness in other areas that require his attention.

Having the bubbly cheerleader at the helm was important only during the time when almost anything got an IPO and almost anything got VC funding; it helped get a higher price. The IPO market hasn't been responding to the bubbly cheerleader for a while now, therefore Angels shouldn't be overly concerned with it either.

Regarding the implications of the Coding research:

Back in 2006, Ira Glass did a show called "The Sanctity of Marriage". It is my all time favorite. He had a PHD on his show who had done similar coding research, as Mr. Sudek. From his research, Dr. John Gottman created an algorithm in whereas he is now able to talk with a couple in a relationship for 15 minutes and predict with 85% accuracy if they will be happy and together in 5 years time. If he continues the conversation with them for another hour, his accuracy increases to 94% whether or not the couple will be "happy" and together in 5 years.

I would fair to venture, that when Mr. Sudek finishes his research it will have a PROFOUND impact on determining the future relationship between an Angel and an entrepreneur.

One can listen to the archived podcast here:
http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1021