Lessons Learned From Sports Hero Turned Venture Capitalist, Joe Montana
December 21, 2021
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Joe Montana is a football legend.
His NFL career started in 1979 in San Francisco where he played for fourteen seasons. He is a four-time Superbowl champion, three-time Superbowl MVP – just to mention some of his many accolades.
He was inducted into the Pro Football Hall of Fame in 2000. He then pivoted from a successful sports career to a career in venture capital and set up Liquid2 Ventures with Mike Miller and Michael Ma in 2015.
Not only by investing, but through mentoring and facilitating connections, Liquid2 Ventures supports its portfolio of companies, which includes Unit21.
We were delighted to have the opportunity to sit down with Joe and ask him about his football and investor careers, what he has learned, and how the world of sports and business share many of the same challenges and opportunities when it comes to building and leading teams, driving success, and handling challenges.
For anyone who is responsible for managing a team or looking to learn about creating a strong company culture, these insights provide lessons to help drive cohesion and effectiveness.
Joe’s first-hand accounts illustrate the profound role of culture and communication in all walks of life
and the impact of how a team responds to challenges and failure.
Here, you will garner insight from Joe’s experiences about what all teams and leaders – on or off the field – need to be successful.
Let’s jump in.
Fireside Chat with Joe Montana: A Recap
Important Characteristics of a Successful Team
In both your football and investing careers, you have experienced what it is like to be part of a winning team. You also engage with teams from a wide range of companies that you invest in, at various stages of their development. From your perspective, what do you think are the most important characteristics that go into making a team successful?
When it comes down to what drives success, Joe is quick to point out that it does not always come down to God-given ability to talent.
“It's about desire and work ethic and what you're willing to put forth.”
In some situations, there are just simply very talented teams, but that is not always the case.
For example, The 49ers ‘81 team had an incredible season, but they were not the most talented team, especially offensively. The defense was able to stop the opposition and give the offense the time to figure out how to get to the end zone. When Jerry Rice and John Taylor joined the team in ‘88 and ‘89 they brought some exceptional talent to the offensive side.
Also, if an individual is not aligned with the rest of the team, it can be disruptive to success. Joe recalls an instance when a newly drafted rookie did not feel that he had to do what was being asked of him to make the team better. Because he wasn’t able to collaborate and work toward a shared goal, he quickly became a distraction and was let go.
And even for a winning football team, building cohesion is a continuous process. Joe recalls how every Saturday after practice, fifty to a hundred walk-on players were brought in just to see if they could make the team better. When people understand the culture of a team, they know it when they see it and it is clear when somebody doesn't fit in - no matter how talented or driven they are as an individual.
Similarly, when a company is at the very early stage of development, many of the processes and procedures that a more mature company might have to facilitate communication and foster the corporate culture are not in place.
In a startup environment, people are always learning as they go, and without the formal structures there to keep people on the same page, keeping goals clear and plans well understood by everyone can be difficult.
That is why everyone on the team (be it sports or business) needs to be mindful of the shared purpose and their role in the effort. This does not mean that everyone has to become best friends, on the contrary. They must develop mutual respect to foster that professional relationship where ideas can be shared, approved, or even denied without judgment or hurt feelings.
Joe notes that it is what happens when people walk through the doors that counts. Looking back at the teams he played with, Joe admits that everybody most certainly did not hang out with each other.
In some cases, a lot of guys didn't even like each other. But, when they walked through the door of the building everything changed because everyone on the team was after the same goal.
“Building successful teams comes down to finding like-minded people with like-minded goals and the understanding of the sacrifice needed to achieve those goals.”
Thoughts on Developing Culture
Culture plays a key role in both a sports team and a company, what lessons have you taken from your sports career into your investment career?
When it comes to the role of culture in a team, Joe reflects on an early lesson learned from Bill Walsh.
When he left Notre Dame, having won the National Championship, Joe felt prepared for the next step in his career. He soon found out that when striving to be the best, preparation goes far beyond being ready on Game Day.
It starts with coming to work every day - not just the big days - and being focused on perfection.
Bill’s philosophy was “If you strive to be perfect and you miss, you're still pretty good. If you just want to get along and be mediocre and you don't make mediocre you won't be on this team very long.”
Listening is one of the hardest things to do according to Joe, and especially when you are hearing something that you might not want to hear.
However, in a lot of cases listening is key to helping a team get better, helping them to grow and understand each other.
“Don’t just come prepared, come prepared to be perfect.”
What Makes a Leader Great?
Who were the best leaders you worked for and what was it about them that made them so successful?
Regardless of whether a leader is loud or soft-spoken, Joe has seen one consistent attribute that has differentiated those that have been successful, and that is their willingness to actually do what they are asking of their team.
As loud as Ronnie Lott was in the locker room, he was as committed in the effort he gave at practice. In a similar way, Jerry Rice was quiet, but he spoke volumes with his work ethic.
Initially, nervous when he first joined the team, Jerry had trouble catching the ball. At practice, instead of returning to the huddle after a catch, he would run to the end zone - every time. It is no coincidence that Jerry's the NFL's all-time touchdown receiver by a large margin. In leading by example, Jerry’s work ethic became contagious.
“I don't think you can have a leader that doesn't lead by example; loud, quiet, or a jokester - it doesn't matter. If you're not doing, producing, and showing what's capable then I think you have a tough time as a leader.”
Reflecting on Failure
You have had enormous successes, but how has failure played a role in your success?
To harness failure as a driver for success, Joe encourages putting failure behind you and as fast as possible.
In football terms, he explains with the example of a player dropping a pass.
It is not his intention to drop the ball, but if he keeps thinking about it, the chances are he is going to do it again. The same can be said for all players, the quarterback does not want to throw an interception and a linesman does not want to miss a block.
It is how they respond to that failure that dictates what happens going forward.
Joe clearly recalls his first failure as it was also his first start - against Seattle.
He threw two interceptions that were run back to touchdowns. The second in particular left a mark and that feeling continued to drive him to prevent it ever happening again. In reality, a quarterback can do everything they can not to throw an interception, but at some point, it will happen.
Everyone makes mistakes.
What is crucial is how the team around you lifts you and helps you move on. If an offensive lineman misses a block, is there something that can be done to prevent this from happening again? The focus should be on figuring it out and finding ways to help each other.
Treating others as you would like to be treated goes a long way.
As a team, all individuals should be valued, regardless of their visibility or role. Bill Walsh viewed everyone as a 49er, no matter what their role in the organization was. He was hugely important to him and if a player could not follow this philosophy, he would find someone else who would understand where he wanted the team to go and how he wanted them to get there.
“We help each other and don’t ridicule each other. This is how we get better as a team and as a business.”
Maintaining a Positive Outlook
Everyone has been dealing with the pandemic in a different way. How have you dealt with it and how do you keep motivated and maintain a positive outlook?
Without warning, the pandemic forced people to change their lives dramatically.
Everything required more thought and effort to modify behaviors and actions to keep ourselves and everyone around us healthy. From the outset, Joe looked to figure out how to make life as normal as possible, but also as safe as possible.
He credits his wife with taking the initiative and getting the family together in different locations. Although they all live close by and do see each other regularly, being away gives them an opportunity to develop a new routine, working in the morning and surfing. For Joe and his family, adapting to new circumstances has required them to look at what is most important, and in their case, it is the health and wellbeing of their grandchildren.
Making the necessary adjustments, including heeding travel warnings from the US government and canceling vacation plans to France, and choosing to get outside and being in the fresh air instead of staying indoors all factor into creating a new normal that is both energizing and safe.
This positive response to the restrictions and limitations imposed by the pandemic has brought some unanticipated benefits to the way Joe and his family spend time together.
From Sports Legend to VC
Why did you decide to get into Venture Capital, and how do you decide what is interesting to invest in?
Joe’s initial involvement was with Ronnie Hill and Harris Barden focused on the fund to fund side. Through a connection with Ron Conway and learning from Y Combinator, Joe began to work more closely with the companies instead of the venture guys, finding that side of the table a lot more interesting.
Although confessing to being fairly untechnical, Joe says he loves technology and seeing where the world is going, as well as getting involved with the teams early and meeting the founders.
In terms of what Liquid2 Ventures invests in, its portfolio is diverse and business model / industry-agnostic - running the gamut from a simple marketplace to satellites and everything in between.
Having a diverse team has allowed them to look at the most unique opportunities that are coming up and some of the things that are needed. As the company has developed, Joe has structured it to ensure cohesion. Everyone on the team is on the same level and on the same page.
He is aware that they could go elsewhere for more money, but they are a good team and they are going in the right direction. Everyone adds a different element to the team and brings something unique to the table.
And when thinking about what to invest in, Joe notes that having your eyes and your ears open is important. The investor base is a critical resource and provides valuable insight into specific industry sectors, either directly or through other specialists in their network.
A good example is a company based in North Carolina that is looking at implants to grow cartilage. Already this is proving to be successful in dogs. In sports, the cartilage in the knee is usually one of the first things to go, and replacing it has never been possible. A contact in Seattle was able to send the details of the tests to experts he knew.
Having done the due diligence on the company, that individual became an early investor. Our investors are part of the team and add to its overall diversity - with expertise ranging from deep tech, SaaS to gaming and social. Joe sees his role as helping the companies as they mature.
Having just turned 65, Joe half-jokingly appreciates that he has exceeded the life expectancy for a football player and is keen to stay involved in the investing business - but maybe not every day. While he spends more time now with the companies in the portfolio, helping to make connections for them, and is still having fun doing so, he knows that there is more to life than business and intends to enjoy himself doing other things as well.
Lessons From a Sports Hero Turned Venture Capitalist: Final Thoughts
One of the constants in Joe Montana’s career has been people.
Working closely with individuals as a successful football player and then later in life as an investor and mentor, Joe has a lot to teach us about the importance of building a strongly aligned team, and we genuinely appreciate Joe’s guidance and willingness to work with us as we grow and scale.
Here at Unit21, we value many things including individual ownership, bias toward action, and collaboration. Our goal is to help our customers mitigate risk and fight financial crime. We recognize the importance of building a team that shares our goals, so if this sounds like you, we invite you to visit the careers page to view current job openings and learn how to start your next chapter at Unit21.
Who knows, maybe you’ll be the one to ask Joe Montana a question during his next visit with our team. #FingersCrossed
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