Archive for 2012
Rise Strange Thinkers, We Need YOU
I don’t know how to say this any other way, but things just aren’t awesome. This isn’t about bubbles, and it’s not about froth, it’s about people in our ecosystem moving at strange frequencies…it’s about healthy naïveté transforming into irrational confidence. It’s about founders not appreciating the risk and commitment of their chosen paths. It’s about the look in an average founder’s eye, lacking the edge that keeps one’s game tight. It’s about the fall of the letters CEO. No longer something to be placed on a pedestal, revered and wondered at…CEO is the new “Analyst.” It’s about the obvious thinkers…the ones who arrive at logical conclusions, the ones who think the same…getting into a game that used to be dominated by abnormal thinkers…it’s about a lack of soul searching…surface decisions driving surface thinkers into surface startups…it’s about nothing being new…me too…me too….me too…it’s about we’re different because we’re social…or you don’t understand we’re taking a traditional enterprise model and turning it on it’s head with…wait for it…a SAAS model…it’s about a new publishing platform…no a new publishing platform…no a new publishing platform…but this one is DRAG AND DROP…don’t you see…you can change the font without going into a drop down menu…it’s about what YOUR FRIENDS LIKE…don’t you get it…it’s not just what YOU like…you can actually see what YOUR FRIENDS LIKE…and SHARE what you like with your friends…REALLY REALLY…the big difference is that you can SHARE not just with your FRIENDS…but with your FRIENDS OF FRIENDS…get it…it’s like…people you should probably care about more than strangers…even though you don’t know them…It’s about CURATION…it’s UNDERWEAR commerce but for GUYS…CURATED…get it…Guys wear underwear…call it commerce 2.0….No it’s Socks for GUYS…no it’s BASICS for guys…no it’s GLASSES for GUYS… No COSMETICS for GUYS…don’t you see, it’s been tried before…but this one is really for what GUYS WANT and what GUYS care about…and…it comes in a BOX…are we qualified to build it…HELL YEA we are…you know why? Because we just quit our jobs in professional services…and…WE’RE GUYS…so we know what GUYS want…It’s about increments on increments on increments…it’s about capital markets getting lazy…about capital markets suffering from this biggest clusterfuck of FOMO in the history of FOMO…it’s about “I don’t know if this is going to work or not…but fucking XYZ is investing prelaunch…so it’s now or never…and I don’t see anything better coming down the pipe…because if it’s not this me too, my next meeting is gonna be a me too too…so what am I really choosing between…it’s about the NOISE…frankly…things aren’t hard enough right now. it’s making everyone sloppy….sloppy thinking…sloppy investing…ambition light…image heavy…uninspired entrepreneurship…we are wading through a see of uninspired activity…searching…endlessly for that glimmer of ambition…that crazy look in a crazy founder’s eye…that says I would not last 4 seconds at Bain Consulting and I might have killed a turtle when I was 7 to see if reincarnation was real…where are you strange thinkers? Where are you weirdo’s? For god’s sake, get weird. Do different…PLEASE…the fate of our ecosystem rests in your hands…in your mind lives the step function we desperately need…inspire us
Fuck Pride
About a month ago I was having lunch with my friend Michael Dearing at the Creamery in Palo Alto. If you don’t know him and you are raising seed money…you should, he’s a very good dude and super accomplished. I don’t remember how it came up (because MY MEMORY IS TERRIBLE), but I remember articulating to him that I was disappointed in myself for no longer “cold emailing” people that I admire. When I was younger with little or no cred in startupland, I used to email anyone and everyone who I thought was cool. I’d read an article about Elon Musk, craft a perfect email about why he HAD to meet with me, and then try every email combination known to man until I got through to his inbox. It was a low percentage game, but I was so inspired by the achievements of others and I just wanted to be as close as possible to the biggest most accomplished entrepreneurs (and more generally people) I could find. I’d send emails to Bill Clinton, Jay Z, Peter Thiel, it didn’t matter…it was just a game to me…all I wanted to do was sit down in the same room…pitch myself…not my idea…or my company (although sometimes I would)…but just myself…my entire goal was getting those amazing people to believe in me…to care about me…to be open to me the next time I would “need” them….if I’m really honest…I also wanted to see if I could hang…if I could keep up and if they recognized or saw me as a peer. How fast could I get the conversation to even…vs master/apprentice (although, I did appreciate the apprenticeship and was super respectful). But something changed as I got more mature in this space…I had met enough people and worked with enough people…that even the superduper fancy people became more accessable…no longer was cold emailing the best route to these folks…people were generally one or two hops away, and I guess introductions became a bigger part of how I reached who I wanted to meet…but even still…these types of meetings…and frankly this type of reaching…really slowed down for me. Maybe I became less wide-eyed as entrepreneurial “stars” revealed themselves as more human, or maybe I got too proud…
So anyway, I was sitting with Michael and I told him I was disappointed in myself for no longer cold-emailing people who inspire me…that maybe I was somehow embarrassed to do it because “I should be able to meet just about anyone now by relying on my friends and colleagues” or because “it’s entirely likely that I will meet the people I haven’t, and god forbid I would have subjugated myself to them via Gmail in advance” or some other stupid fucking reason that I got too proud to keep reaching…Michael sort of agreed with me, and so we both decided to cold email one person who really inspired us and ask for their time. I had recently watched this Charlie Rose video with Jack Dorsey and was very moved by it…so I opened up my iphone and emailed him right on the spot (I actually had his Gmail from 5 years ago when I talked to him as a young associate at General Catalyst…trying to get into the round USV ended up leading….but for all intents and purposes…this was still a cold email and there’s no way he would remember me I don’t think). Anyway, the text of my email was simple:
Subject: Hey dude
“I’d love to hang out with you sometime because you inspire me
somewhere along the way i stopped cold emailing people I admire, decided to change that today”
As I reread that right this second, it was actually sort of half assed relative to what I would have written 3 years ago…I should have referenced all our common connections and interests and provided more context for him to connect with…instead I thought my email signature with Hyperpublic and Lerer Ventures and my blog and twitter would suffice (again, maybe a victim of my own pride)…but it really wasn’t as much about getting the meeting as it was about the act of reaching…
Last night I got a note from Michael:
Subject: what ever happened?
From your Jack email. Mine to XXX XXXX went unanswered. 🙂
I sort of smiled to myself, thought for a minute, and wrote back:
“Unanswered as well. But I think we got more out of that rejection than we would have had they responded…that was kind of the point. Put ourselves in a position to be humbled…”
In summary: Fuck pride
Read Full Post | Make a Comment ( 7 so far )This Desk
This desk. I am so grateful for this desk. It is glass and large and clean. It lives in a giant loft with beautiful art work, air conditioning, cold filtered water, and a conference room. It shares space with bright people, motivated to make progress, driven by a need to feel as though they are accomplishing. It represents a home away from home, consistency, structure and purpose. But more, it represents belief…belief that I am, in fact, the best owner of this desk…it was given to me, first, at a time when that was not clear…not obvious…by a man who had an extra desk…I was living in a tiny apartment in Brooklyn…with no air conditioning…and not a lot of momentum…every morning I would wake up…strap my computer to my back…and head out to a café to claw my way forward…sitting amongst a mix of lackadaisical unemployed web surfers and hardened coffee shop warriors. Fighting for the corner seat with a plug, or the couch opposite the beautiful girl had it’s moments, but I longed to move beyond a “desk” that existed only in the company of a mandatory coffee or cookie purchase.
Then, one day…I went to interview for a desk at Polaris’ Dogpatch Labs. I sat down in a group of 6 or so young founders…all struggling to break free of the “coffee shop” stage of entrepreneurship…and explained to the then-reigning Jon Steinberg how I didn’t have a cofounder or a product or any money but regardless was most worthy of a spot that would bring me into a more legitimate phase of my business. He rejected me. Trips to the coffee shop started to get more frustrating…my back started to hurt from the shitty chairs and hunched over couch computing…regardless my business was making progress…slowly but surely.
Around the same time I visited Kenny in his office in the Meatpacking district…I’m not sure if he could tell how run down I was or not (I had about $1000 left in my bank account and had basically stopped going out to dinner, or movies, or any of the discretionary “luxuries” of life) but he didn’t seem phased by my messy hair and unshaved countenance. I would have worked for free…just to have a desk…a nice glass desk…in an open loft…with bright people…motivated to make progress…but then it was agreed…I would start investing with him and Benji…and build my company out of his space…and be a real partner…and say goodbye to the pretty girl on the couch….and just in time…I popped into a different sphere of operation…no longer at risk. I love this desk…while meant for sitting….it gave me something firm to stand on.
Read Full Post | Make a Comment ( 1 so far )Lessons from my Psychedelic Barber
Yesterday I got a haircut from a new barber. Kenny doesn’t believe me and says I look like an insane professor, but it’s true…I did. Conversation with the dude who’s cutting my hair typically makes me pretty uncomfortable…I’m always reaching…I’m terrible at small talk…how much eye contact do I need to make? Is eye contact through the mirror satisfactory or do I need to crank my neck every once in a while? Usually I end up silently nodding my head as the dude riffs on leftist ideals or the importance of the arts over business…but yesterday was a bit different…and weirder.
Somehow in the first 5 minutes of conversation, we arrived (not by my doing) at the merits of psychedelic drugs…for the first few minutes on this topic I thought to myself “great, my barber is a burnout…glad he’s got a straight razor to my neck…” but then he said something that made me pause: he said “it baffles me how most people go through life not even trying to tap into the brain…that’s where everything is happening…and most people don’t even try to explore it.” Granted…there are many different ways to explore the brain…beyond mind altering drugs (i.e. meditation)…but there was something intriguing about this spirit…it was suggestive of a non-software based incarnation of hacking culture…a culture pervasive in technology and startupland that to date hasn’t really reached the massive processor that is powering human experience…I think about all the experimentation that occurs on machine processors…how we poke at the limits of what a computer can do…experiment on the edges…to unlock previously hidden value or possibilities…and I wonder if my psychedelic barber isn’t just a different type of hacker…his curiosity around the experiences that his brain creates/experiences was very similar to a sentiment that runs through our engineering community…which leads me to wonder…how far am I pushing my brain? What can it do that I don’t know yet? How do I really “open up the engine” and experience it’s full potential? I don’t think I’m scheduling my barber’s recommended voyage to the Mayan jungle for a Shaman guided 7 day psychedelic trip…but I am going to start looking for other forms of experimentation on this “hardware” in my head…in some ways I think the quantified self if a form of measurement/scrutiny of this subject, that when coupled with corrective/transformative actions (my friend Andrew Kortina would call this hacking your brain) is a step in this bio-explorative direction…but generally speaking…we are pretty passively consuming or accepting the “applications” of our minds….perhaps it’s time to be more proactive…what can this thing do beyond what I am using it for is a question I will now ask myself every day.
Read Full Post | Make a Comment ( 9 so far )How to get out of tight spots
Yesterday I caught up with an entrepreneur who is in a pretty tight spot…typically when faced with a problem or issue…I like to cycle through every possible move and then pick the one that has the highest probability of solving the problem at hand. Usually there are 2 or 3 directions that seem viable and 2 or 3 that we can immediately throw out just by looking forward and playing out how all parties will respond to a decision…In this type of analysis I am rarely looking for a perfect solution or certainty…I don’t need to know for sure that a decision will solve the problem…just that it is the best of the available options…
Occasionally…however…a spot is so tight that none of the 6 options appear to have a high probability of success…it is very difficult to look at 6 alternatives, recognize that the best route is still only 15% likely to solve the problem…and still lean into that decision…but that is EXACTLY what you have to do as an entrepreneur…it is one thing to look for a 7th option…and sure…we can spend a few cycles trying to find it…but usually that which is not immediately apparent does not exist…it’s sort of like holding a crappy set of letters in scrabble…you can stare at the tiles for 10 minutes before you make your move…looking for that 40 point word that is going to get you back in the game on this hand…but the fastest way to a change is to play through the crap letters…make your 10 point word that doesn’t seem to help…but in doing so get yourself to a new context and a new set of letters…that present an option that is more attractive.
Our instinct when faced with 6 alternatives that seem unappealing is to freeze…not choose any because none seem forward moving…and we only want to move forward…but the reality is…something is going to happen if you make a decision…tomorrow or next week is going to look different than today…the tiles will shuffle…new words will appear…today’s decision is not your last decision…just a means to the next decision…when faced with 6 shitty routes…choose the least shitty…actively…lean into it as hard as you would a 95% solution…and wait for new words to emerge…they always do…companies only die when you stop reaching into the bag for new letters
Read Full Post | Make a Comment ( None so far )7 things I’m thinking about now and an invitation for computer scientists
This has been an interesting few months…after we sold Hyperpublic to Groupon, my calendar freed up pretty quickly…I had more time than I knew what to do with…I think I invested in 4 or 5 companies through Lerer Ventures, and spent a few months in San Francisco hanging out with our west coast portfolio companies and friends that we don’t get to see as much…but for the most part I just recovered…when people asked me what I was doing, my typical answer was “healing”…which is true…you don’t realize how much physical and mental damage you endure as a startup founder until you are abruptly pulled out of the fray…
Last week I moved back to New York City. I did enjoy the hiking and biking and reading and general calm of SF…but “relaxation” is not a comfortable state for me…during that time I kicked my lens out really far…read about things that won’t have an actionable application for 10-30 years, and generally looked at the world from afar (which is not something you get to do operating a company and living in “execution mode”)…I am done looking far out for a while…and am starting to reign it back in to some sort of actionable focal length…actually, to this day…focal length of vision is an area that is hard to get my arms around…with Hyperpublic, while we had really interesting thoughts about what we could grow into, we built something that had a pretty short time to maturity and market value…as I think about new projects, I am pushing to extend that vision and time to maturity by 3-5 years…but timing markets/trend/consumer curves is always a bit of a moving target…
Anyway, now is a pretty creative period for me…most of my thinking has been pretty insular and self-directed…but I’m ready to start thinking collectively again…and bouncing some things off other people…one thing I learned over the past two years at Hyperpublic is that I get the most value out of thinking and ideating with engineers…we were a 10 person company with 9 engineers and although I didn’t write a line of code at HP, our lead engineer, Eric Tang, recently described me as “conceptually technical”…which is a phrase that I definitely identify with…when I think about products, I don’t have a visual mind…I have a reasonable intuition around experience but not good enough to drive product/ux of a consumer application…when I think about product in my head I tend to see the plumbing…I visualize the back end…the api connections…the data structures…the algorithmic logic…etc…and it just happens that most frictionless conversation around these topics happens with engineers…
I am fortunate to have a lot of really creative engineers in my life, but sadly…many of them are now 3000 miles away from me in Palo Alto…so I’d like to build a new “study group” if you will…no agenda…come with your ideas, whatever you’ve been thinking about…happy to riff on it, help define it…talk about market potential…steps from here to there…I’m not looking for investment pitches…just creative thinking and some new people to think with. For ease, I have cleared my entire schedule next week in New York. If you are a computer scientist or data scientist and want to shoot the shit or just say hi…I have open office hours in Soho from 10:00AM – 6:00PM every day. Just mail Jordan.cooper@gmail.com with “day and time request” in the subject line…if you want to include a sentence about your background/interests/side projects etc…that’d be cool. Word
**Some themes I’ve been thinking about**
1) the interface layer between hardware/software and users
2) new applications of personal data exhaust
3) creative input mechanisms for non-sensor based information
4) wearable technology
5) intracorporeal (in body) hardware/software/sensor solutions
6) non-healthcare applications of physiological information
7) interfaceless software applications
Read Full Post | Make a Comment ( None so far )the bizarre social currency behind “hearts” and “likes”
Why do I “heart” some photos and not others? Why am i sparing? I know it will make the photographer feel good. it subtly strengthens my relationship with them. it doesn’t cost me anything…but why when I scroll through 10 photos on Instagram will i only “give out” one heart? Am I worried about being perceived as “loose” or “easy” with my hearts? Do I think they’ll have less positive impact or perceived value by my graph if I “heart” too much? Does what I heart say something about me to my graph? Do i want the publisher/content creator to appreciate my taste, think of me as discerning, or maybe I just want to have power and be judgmental…and dole out accolades only as I please…only when I feel like a piece of content or a photo is worthy…maybe it’s just about me and holding even the slightest modicum of authority over my friends and acquaintences…I spend my “likes” and my “hearts” like a spend money…only where i see fit, only when I see value…and what I spend it on says something about me and also says something to the recipient of that value…but if i spent money on everything I would be wasteful…and I don’t want to be wasteful with my social accolades…because they will lose their value from every dimension…so no…that awesome puppy you just published to instagram??? i’m not gonna heart it…because I hearted your sunset yesterday…and i’m not that easy
Fix your own fucking printer (a non-tech founder’s guide to starting up)
I’ve spent 4 years going from non-technical founder/CEO to reasonably technical founder/CEO…along the way I learned a ton of “business guy don’ts” that are common mistakes non-technical founders make that hurt engineering culture. Here are some of the biggies to avoid:
1) Don’t ask how long something is going to take to build. Just because you don’t understand the scope of the feature or build for which you are advocating doesn’t mean you are exonerated for your ignorance. You have to make an effort to get better at understanding the scope and challenges of software development even if you’re not programming yourself. Instead of asking how long something will take (which teaches you almost nothing), ask how hard something is to build and where the challenges are. Listen to the answer, understand which components are unknowns and which are easy plugins. It’s so disrespectful not to invest the minimal energy required to start answering your own questions…and you will suck as a CEO or founder if you can’t get a grip on the pace and predictability of your product cycles.
2) Don’t ask your engineering team to help you set up email on your iphone. Just because you don’t want to put the effort into googling “how do I set up exchange on my iphone” doesn’t mean it’s ok to ask your engineers to do it for you. Again, totally disrepsectful…these people on your team are Stanford educated computer scientists, not IT guys…one, it’s disrespectful of their time and two (and more importantly) it shows a lack of willingness to make yourself (even slightly) more technically competent than you are…just because you didn’t study C.S. doesn’t mean you get a “freebe” when it comes to anything with an on/off switch.
3) Don’t spit out every single product idea or feature idea you had on the walk to work during your morning standup. It’s great that you’re creative and thinking toward the future, but you’re engineering team has a very full plate all the time…each cool idea you have represents serious time and effort from the team…there can be a feeling of “we are already overwhelmed, you’re not appreciating the challenges of what we’re working on right now.” Very important to communicate what we’re building toward and to have an open dialogue about new ideas and directions, but how and when you present that information as well as how clearly you indicate importance and where in the roadmap these new ideas lie is super important to be mindful of.
4) Recognize and celebrate the wins (even if they aren’t customer facing). This can’t be bullshit…it’s not just “oh, today we say good job because you’ve been working so hard)….actually understand what the hell people are grinding on day in and day out…if someone has been working on deduplication for the past month…what are the metrics that we’re measuring progress based on…how are we doing, what’s good and what’s great? What are the approaches that others have used? Where’s our innovation? Did we do something smarter than state of the art? Understanding the build with this level of intimacy allows you to know where special things happen on the engineering side. When they do, we stop and show appreciation and respect. The sales guy who brings in $100K gets celebrated all the time because everyone at the company can comprehend his contribution…it is essential that everyone at the company understand the contributions of our engineers.
5) Minimize interruptions. Control yourself when you have ideas or questions that you want to discuss with your engineering team…just because you just thought of something cool, doesn’t mean it’s the right time to tap an engineer on the shoulder…not every engineer is the same, but many appreciate uninterrupted time to get through a challenge or problem…wait until the headphones are off or you are walking to lunch to discuss whatever you wanted to…tap an engineer on the shoulder every 30 minutes while their editor is open and you will officially be the worst person in the world
6) Don’t fake the funk. Pretending you understand things that you don’t is the worst. Don’t sit down with a new recruit and talk about the awesome technical challenges associated with your product if you have no fucking idea what they are and why they are interesting…just saying “obviously was have some awesome big data challenges” rings incredibly hollow if you don’t even know your own stack and what challenges your engineering team is actually tackling…let your engineers speak about what’s interesting technically. “I’ll let our VP Engineering tell you about all the interesting work we are doing” rings a lot more true than your BS attempt to check the recruiting box of “engineers are attracted to hard problems, show them your product presents interesting challenges.” Further, the quality of your engineering team will sell itself…know where your competencies begin and end and be ready and wiling to defer where appropriate. That demonstrates a healthy working relationship between tech and non-tech as well. That chemistry is perceptible and a positive to outsiders if you can show you have developed it.
7) Fix your own fucking printer
Read Full Post | Make a Comment ( 9 so far )Why Facebook really bought Instagram
NOTE: this is pure speculation, but I haven’t really heard this angle or read it anywhere, so I thought I’d take a crack (Fbook employees feel free to crush any/all of these assumptions):
A few weeks ago, I had a long talk with a smart investor and blogger about Facebook. He expressed a concern that Facebook was losing it’s intimacy, that the user no longer had the emotional connection to Facebook’s product that was once so central to it’s experience. He contrasted the current Fbook user experience to some smaller apps that he loved, and for sure he was right…my response, however, was that I don’t think this loss of intimacy is a problem…rather I think it is quite intentional…the reason? Because Facebook is a piece of infrastructure, and no longer a consumer application at it’s core. Facebook Connect and the graph have pushed the company downstack to a much more valuable and defensible position on the web…one where they are the broker of basically the entire online population’s personal and social information. They are plumbing, a point of connection for 3rd party applications and publishers to better understand users and customize experience as well as optimize revenue outside of the Facebook application. In Facebook’s push to this layer, they executed flawlessly…they became not just the platform, but the operating system for the social web…you cannot build a product today without connecting it to “the graph” and Facebook has the most comprehensive graph in the market. It seemed that this infrastructural path was the future of the company, which I believe it is for sure, but then something weird happened…about a year ago, Facebook and Spotify unveiled an INCREDIBLY deep integration…all of these “connected publishers” were doing well on the platform, but then…somehow…Spotify secured this unprecedented real estate inside the Facebook application…It was the first attempt to push back up stack to relevancy at the consumer application layer that I had seen in a very long time…why? Why did it all of the sudden matter if users were interacting heavily inside Facebook as opposed to inside 3rd party environments? Was it the ad revenue? Doubt it…I think Facebook may have realized that their “graph data” was getting stale…that it didn’t matter to me anymore if my Facebook graph/friend group was current, because the consumer app was declining in value relative to individual vertical Fbook connected applications…but if only 70% of my real graph was represented in my Facebook graph than their value at the more interesting “infrastructure layer” would decline…So Spotify gave me a new reason to keep my Facebook graph current…for the first time in a long time…I started friending people again…because I wanted to listen to their music…
BUT…why did it take music to reengage me with the Facebook app…what had gone away that used to be so fulfilling? I’ll tell you what…PHOTOS…where were all the photos in my stream…yes mixed in with an increasing amount of noise from 3rd party apps publishing to my stream (facebook, afterall, had to promise distribution to connected apps…and where better to offer hope than the stream)…but I have a theory that the avg number of photos per user was on steady decline…what’s the change? Why did people upload less photos than before? The answer lies in the death of the point and shoot camera. It used to be when I took digital photos, I would do it on a Sony Cybershot or something like that, then use the desktop software that came with the camera to get the photos off the camera and onto my PC. Once there, I could upload from my PC to the web easily, and that’s how photos got into Facebook. But as Facebook grew, so did smartphone penetration…all of the sudden, people were taking photos on their phones and not on their point and shoots…and guess what? They stopped downloading those photos to PC…so volume of photos going into the top of the FBook photo funnel starts to decline, and at the same time, not only are these smartphone photographers not uploading to PC…but because they were on connected devices…they started to upload directly to the cloud from their phone…and Facebook did not have a mobile UX that was oriented around photo capture and publishing…it was primarily a consumptive experience…Enter Instragram…all those photos taken with the native device, now pushed directly to the cloud, via mobile first experience optimized to steal users photos away from Fbook…and those photos never reached Facebook…So why did Facebook buy instragram…graph freshness…they need the consumer app to matter again because they can’t afford a stale graph…my guess is that we will see a Spotify-esque integration and INstagram will start repopulating Facebook’s consumer application with the the photos it was missing…Instagram = supply of photos = reengaged facebook app user = freshest most comprehensive graph on the web = MSFT like infrastructural position in the web ecosystem…and this @cdixon, is why I think MSFT is better comp that LNKD for public market in valuing Fbook…cc @om
Read Full Post | Make a Comment ( 24 so far )In Pursuit of “Brain Doppelgangers”
Every once in a while I run into someone in this business who’s brain works exactly the same way as mine. It’s not the norm, or even close to it, but when it happens, it is an incredibly refreshing experience. I tend to think in abstractions and rules. 999 out of 1000 times when I meet someone I need to hold back on speaking the way that I think. Most people don’t like to digest information in that format, so I end up translating my thoughts into whatever framework the other person is speaking in. Some people see the world through consumer experience, or user’s feelings. Others see the math and the numbers, others the simplicity or essence of an opportunity…I learn from those people, and we make progress as a pair or group…it’s become so common that I almost forget that the framework we are pushing forward in is really a second language to me…
But then, one in a thousand times, I sit down with someone who speaks in principles and rules. I like it when people string together conclusions as opposed to descriptions…state the inputs, agree on the conclusion based on known business/economic principles, and string conclusion into conclusion until we arrive at some place deep in the future that seems pretty sound. Back into the 1 or 2 unknown assumptions we made and then say “if this one thing is correct, we’re pretty sure things are going to land here.”
Yesterday I went up to Dartmouth for the day and met with a founder who’s brain worked the same way as mine. Every sentence that he said followed the exact order in which I would have structured my thinking around his space, and the conversation was basically a bunch of half finished sentences where he’d start, I’d say “yup” and we’d move on to the next thought…I don’t know exactly what type of relationship I want with this guy…I don’t love what he is working on…the single major assumption in his analysis I believe is false…but there must be some efficiency to working with a guy with whom we can both speak in our first language with absolutely no translation. The rate of progress and information flow was way faster than most discussions…
I don’t think surrounding yourself with like-minds is necessarily the right approach to making progress, but I am definitely going to try to allocate a distinct portion of my time to finding more “brain doppelgangers.” Truly a weird and awesome connection when you can find it.
Read Full Post | Make a Comment ( 3 so far )a disruption with implications as large as the advent of the internet
Today I read an article in the LA Times indicating that DARPA has created an unmanned aircraft that can travel at 22x the speed of sound. At the speed it would take 12 minutes to travel from New York to Los Angeles. The intended application of this aircraft is weapon delivery…and the promise is that you can strike any point on earth from the US in under an hour…but that is not what I am interested in. I have long been fascinated by advances in transportation and the movement of physical matter. I like to think about how innovations like the wheel, bicycle, automobile, ship, and plane have changed the way our physical/human system behaves and organizes. Each time we advance our ability to move physical matter the distribution of people across space takes a new form of optimization. Huge system level trends like cohabitation, urbanization, migration, etc…are all framed by our ability to move matter. We have achieved much greater architectural optimization within our communication systems than we have in our physcical systems, largely because there is little challenge in moving information from one place to another. It used to be that to exchange information required 2 nodes in our human system (people) to be in the same physical space. Advances such as written language, telephony, internet etc removed that constraint and enabled our system to better share learning and become more efficient.
Now, imagine if there were no challenge to moving physical matter from place to place. If instead of 5 hours, it took 5 minutes to transport a thing or person from New York to Los Angeles. The implications of that reality are almost impossible for me to wrap my head around. Geography would become irrelevant. We keep making the mistake of believing that trends are linear. It currently appears that the online world is consuming physical experience…I think it was Marc Andreesen who recently said that “software is eating the world.” …but if we are able to move physical matter as freely as information, I believe we may see a return to the real world…with instrant physical proximity, we will no longer be required to enjoy a digitized and diluted form of real life.
There’s more. The way we organize ourselves physically would be completely different. Currently it appears we are moving toward urbanization, but without the requirement of physical collocation in order to exchange goods, I believe we would see an emigration from cities back to less populated areas. Our output as a system would be unfathomable. Think about what happened to the speed of change/progress on the internet as we removed latency and achieved global broadband penetration. Innovation in the movement of physical matter is the equivalent of reducing latency associated with every action and process in the physical world. Talk about the world becoming flat…holy shit.
This all sounds like sci fi pipe dreams, but they JUST BUILT A PLANE THAT CAN GET FROM NEW YORK TO LOS ANGELES IN 12 MINUTES…so exciting
Read Full Post | Make a Comment ( 14 so far )The question you should never ask investors in a pitch (and my answer to it)
Last week I was talking to a friend who is in the midst of raising a pretty competitive seed round. Just a day into his process and he was already flirting with that magical line of “oversubscription” (you are ‘oversubscribed” when more money has been committed to you than you are willing to raise). He is an experienced entrepreneur but hadn’t raised capital in a while and he asked me if it was cool to ask investors “how do you add value?” My initial response was a knee-jerk…I told him it pisses me off when a founder asks me this question in a pitch meeting…he asked me why…and I took a pause to think about what was at the root of this response. Ultimately I didn’t like having to answer to someone who was asking me for money… I said if I spend an hour with someone and they can’t tell that I’m going to be valuable in the round without having to ask me explicitly, then I don’t want to be in business with them. I told him that that question comes across as naïve and amateur…which I think it does…that there are ways to direct a conversation to get the answers you are looking for without interviewing someone who you are asking to invest in you. I guess I felt that the question of “why are you value add?” lacked the humility I have always tried to show when raising capital myself. Or maybe it’s that anytime a founder asks me that question it suggests that they read some blog post about how “it’s not just about the money, it’s about the value that an investor brings to the table.” For sure that blog post is true, but you don’t need to prove that you read it in your pitch meetings.
I’ve raised seed capital twice and personally, I would never ask such an explicit question…I would do my homework in advance, study each potential investor’s backgrounds, read the content they have published online, learn the stories of their operational history, and usually talked with people in their portfolio well before I ever met them. I would know the answer to such a question, and never put them on their heels or in a defensive position when my only goal was to get them to lean in…It doesn’t come across as savvy or smart…just naïve.
All that being said, I have reflected on that conversation for three or four days, and found myself trying to isolate and answer explicitly what is my “value add” as an investor…I wanted to understand if part of my knee jerk was due to a discomfort with my own ability to answer the question…so I endeavored to really get it down to what makes my capital greener than the next guy’s or girl’s…I quickly arrived at what I have known for a long time…that the best investors I know all have one outsized talent that they have built a career around, and they compliment that with an astute awareness of where their excellence begins and more importantly ends…what was my outsized talent that I share with my portfolio companies…I’m not an ops mastermind, not a brand guru, no 30 year friendships with Larry Page or Zuck…what do I do that is different than everyone else? Sure I have some good playbooks, blocking and tackling kind of stuff…but at the end of the day I think my contribution lies at the nexus of emotional support and strategic thinking…Although some would say that I am a bit callous to the outside world, I am super in tune with the emotional states of those I work with…I am an introvert and pay really close attention to how I feel and have felt over the past 4 years running startups…it’s a very unusual set of feelings and pressures…people often talk about how lonely it can be…nothing new that I am saying here…but if I think about what I really give to the founders I am close with, it’s an empathetic ear…one that requires no filter…no fear of exposing vulnerability…That empathy, in and of itself can be hard to come by for founders and CEO’s. Sure, a spouse, or close friend can perform a similar role…but without a sharp strategic lens…it is not enough. It’s not just “I understand where you are, things are gong to be ok (although that is nice for sure)…it’s “I get where you are, now here’s what we do.” I often talk about Kenny as someone who helped me develop so much as a CEO…not because he taught me any particular skill, but rather he was just so in tune with where my head was at day to day, and had the experience to tell me how my mindset was either contributing to or fucking up my strategic decision making…I guess I endeavor to fill that similar role with my own portfolio companies…if you ask me how I’m going to add value, my new response will be “I’m going to tell you when your insecurity is fucking up your strategic decision making…like right now…you are asking this stupid question to change the power dynamic of this meeting…you are fucking up because you are not confident. Don’t do this with other investors and you’ll raise your round quicker.”
Read Full Post | Make a Comment ( 15 so far )3 Short Thoughts
A few random thoughts that aren’t full blogposts:
1) A while ago I wrote a post about the impact of the Occupy Wallstreet movement. I thought that although it might not end with specific legislation or immediate action to point to, Occupy’s impact might come in the form of a slight change in the collective conscious of our population…that perhaps everyone would shift 3 degrees left of where they were…After finishing the second book of the Hunger Games series this weekend, I began to wonder if the explosive penetration of this story through mainstream culture was not somehow attributable to this 3 degree shift…The paradigm of people vs. the capital certainly echoes the spirit of Occupy…why did a book that was written four years ago explode in the last 12 months…perhaps we as a population were just ready to absorb a story of the people’s rise against the establishment…(also didn’t hurt that big movie dollars got behind it…but I wouldn’t even be surprised if whoever was forecasting ROI on that production had an input in their model that said the population is empathetic to a left leaning story)
2) This morning I chilled out with one of the founders of General Catalyst who I’ve known for a long time. He was talking about the firms expansion west, the burgeoning ecosystem in NY, and the challenges with Boston’s startup ecosystem. None of this was news to me, having heard it many times before…but something happened a few minutes after leaving the office that crystallized a major difference btwn NY/SF and Boston…I was flipping through my Newsle and read of my friend Naimish’s whopping $8M financing to build his new company Gridco…I paused for a minute…wondering why such a mega-round hadn’t penetrated my twitter, etc…and then I realized where I was reading it…Boston Business Journal…and then I realized something else…that if you have news in Boston about your startup…the only real channels that I see stuff getting pushed to are Boston.com and the Boston Business Journal…Guess what…nobody outside of Boston reads those publications…One thing Boston is sorely missing is a strong relationship with national press channels…That’s a huge disadvantage at the consumer application layer. If you have news in NY or SF you can go to Techcrunch, AllthingsD, Business Insider, New York Times, etc. etc. etc…as a consumer facing company, building a brand and getting distribution are so closely tied to strong media relationships…and on that front, Boston seems to be hurting…If I were running a company in Boston, I’d be hanging out with journalists in NY and SF…too hard to build a brand through a platform like Boston.com. (no hate at all, I like what I read in both of those publications, it’s just not information that the rest of the market/country consumes).
3) Health is precious…I had dinner last night with a super thoughtful seed stage investor and the entire team of one of our shared portfolio companies in SF…Someone asked him if he’d ever return to operations as opposed to venture investing and his response was a very fast “no way”…when asked why, the first thing he cited was that it wasn’t healthy for him…I thought that was an interesting lens through which to look at career decisions…health is an input that doesn’t often weigh into professional planning (especially for younger folks)…I guess his was the type of insight you can only arrive at the hard way…with experience comes a more expansive outlook on professional planning I suppose…
Read Full Post | Make a Comment ( 2 so far )8 steps to building an A+ engineering team
One of my favorite new founders in the Lerer Ventures family just sent me a note asking for tips as he starts to build out his engineering team. As I’m sitting in an airport w time on my hands, I went long form. Thought I’d open source an early playbook. This advice is most applicable to recently funded seed stage founders:
1) only hire 9s and 10s. Dont just fill the seat, keep bar really high
2) make fast decisions. When you find a guy you like culturally, put him through half day interview process, test both technical aptitude and ambitions/ability to give everything they have to your co
3) if they pass both, offer next day, overpay on cash by 10k what you were going to offer, overpay on equity by 50% of what you were going to offer
4) give them no more than 3 days before offer expires and be ready to move on to new candidates if they don’t commit. Worst thing you can do is convince someone who doesn’t really want it to join.
5) with every hire ask yourself “is this someone who I can recruit against? Will every candidate going forward WANT to work with them? Do they demonstrate that we are a culture of excellence?”
6) create a culture of recruiting within your engineering team. Make sure everyone knows that “we are always recruiting A level engineers, independent of need, roadmap, or operational context.”
7) invest in teaching your entire engineering team how to be effective recruiters. It is a huge part of everyone’s job, not just founders…
8) contribute to the Enginnering community. Give talks, free advice, help neubs build their first rails app, open up your office to anyone that wants to come hack on whatever they are working on. The community is not some stocked pond that you can go fishing in when you need something built. Give to it before you try to take from it. Instill this ethos in your company’s culture.
Read Full Post | Make a Comment ( 4 so far )Fear not Zebras, I’m still resting
It’s still early…I’m just watching…observing…not really jumping in…two weeks into my move to San Francisco and I’m starting to isolate the factors that contribute to the way things are here…half of me is trying not to get sucked in…trying just to chill out and enjoy what my mom would hope is a break from the grueling hustle of startup life…but the energy here is calling to me…like a newly opened puzzle strewn across the kitchen table…waiting to be solved. I stand back from the table…riding bikes and hiking mountains…trying to relax and stay out of this mess of stealthy progress and 30 year old alliances built on the backs of now Fortune 500 megahits…but it calls me so hard…taunting me…I watch the way people move here, the hushed tones, muted enthusiasm and overly confident thought…a thin veneer of impenetrability masking a pretty average depth of thought. There is no humility here…no admittance of what is unknown…and an unwillingness to be vulnerable…to the outsider and to most a quite intimidating heir…but it is in this very heir that I see an Achilles heel…a point of weakness that I believe holds the key to defeating such a market. Just an early thought….i will wait, but I have found a chink in this armor…and I will strike.
On Heading West
Today was my last day ever at Hyperpublic Headquarters. You wake up every day, walk to work, pick up a coffee, swipe your key card, and focus every shred of energy you have on advancing one mission, and then…in the blink of an eye…it ends. Today I woke up, ate my breakfast, picked up a coffee, and got to the office…but not to push things forward…rather…to say goodbye. I said goodbye to what had become my home for the last two years…I literally spent more time in that office than I did in my apartment…but our space was home in more dimensions than simply time spent. A home is where your family lives…Doug and I started a family at 416 West 13th st…As two young Russian guys carted our furniture away, I poured through stacks of paper, scribbles and notes, and master plans…pitch decks, newspaper clippings, trinkets acquired along the way. A bottle of whiskey with a lego cowboy strapped to the mouth, a spinning mobile with the name Nina scrawled in white chalk…a set of objects that encased the stories of how our family was formed, and the way that we lived.
In the sheen of what I am humbled to call “success” I can’t help but admit an overarching feeling of melancholy…a bitter sweet…that on some days skews more bitter than sweet. Not every company operates like a family…it is a very particular style of interaction and culture that I think I saw glimpses of at General Catalyst, but really learned from Kenny…There are so many benefits to what I can only call familial execution, organic and filled to the brim with respect, where management is trumped by collective pride and shared values…it is the only way I will build going forward…but when your team becomes your family, it makes transition pretty emotional… this change represents the end of something…as long as we were Hyperpublic, our family would remain comfortable and in tact.
I am not sad about turning over our company to Groupon. I’d imagine it’s a similar feeling to sending your child to college. Rather, I am fearful of coming change to the chemistry of my family…but perhaps…I should not be…perhaps we are so strong…that we will remain family through the years…from company to company…life event to life event…and that this is the end of our family’s formation, but the beginning of it’s growth and maturation…If we did it right…this will be the way things go down…but still it hurts to move…to a new house…to a new neighborhood…and to a new phase of life that despite 2 months of negotiation and planning, seems to have snuck up on us so fast.
This is a wave that comes across me, one in a set of beautiful swells, and amazing feelings of happiness and excitement and perfect rides, but a wave nonetheless that crashes down as we continue to surf through the adventures of startupland.
Read Full Post | Make a Comment ( None so far )So you got written up in Techcrunch, now don’t be an idiot
Fred wrote a nice post today about “The Startup Curve.” He refernced Paul Graham’s startup curve reproduced below and talked about this reoccurring trajectory of momentum that most startups experience:
I’d like to focus on the “Techcrunch of Initiation” phase in a startups life because I constantly see founders fuck this part of the curve up. As if blind to the coming “Trough of Sorrow,” every so often you see hubris rare it’s ugly head during the “Techcrunch of Initiation.” No matter how hot you are, or how hot the press says you are, there is a fine line between perpetuating momentum and getting cocky…and 99 out of 100 times when Techcrunch blesses you as the next “Google killer,” 3 months later things are looking pretty dark. The only company I have seen in the last two years that carried the heat from inception to acquisition was Groupme…pretty much everyone else hits a wall after their initial burst of fame. I can’t stand founders, and especially naïve first time founders who big time their way through the “Techcrunch of initiation” phase, thinking that they are at the top of the market. During this phase, you have done almost nothing. Execution lies ahead. The market will punish you. No Mashable article about the cool kids in tech is going to fix the fact that the first version of your product doesn’t work. The culture you set and your behavior during the Techcrunch of Initiation” phase will define how your team reacts to the “Trough of Sorrow.” If you walk around like God’s gift to earth when the spotlight is on you, you will look like a moron when things get rough. Your team will lose faith in you, people will leave, and you will be embarrassed perhaps to the point of hindered execution. If you communicate with your team not to buy into the hype, stay focused, tell them things will be hard, and that it’s a long road ahead, they will be ready for the spotlight to fade, knowing it will return through hard work. If you stay humble to the market, be gracious and thank people for their congratulations, but maintain a level head and represent yourself at a sober level, you will maintain their respect for the life of your company. If you are the 23 year old flash in the pan first time founder who taps a vein with the press and acts immaturely and overly confident, you will lose the hearts of those who would have otherwise helped you through the “Trough of Sorrow.” I don’t care if God himself invests in your seed round, or if Arrington adorns you as the next Steve Jobs, stay humble…ESPECIALLY in the “Techcrunch of Initiation” phase.
Read Full Post | Make a Comment ( 3 so far )Screen no more
This morning I had the chance to talk with one of my favorite thinkers. We cycled from topic to topic, what’s next? What’s the future? This particular guy is a sort of 10-20 year thinker. He said to me that he was trying to understand how the world will change in 10 years when we spend 10 hours a day staring at our mobile devices. As he went on to articulate vertical by vertical, I interrupted him…”I disagree with your premise” … I explained that in 10 years we will not be spending 10 hours a day looking at our mobile devices, but rather the interaction currently housed within the mobile device will bleed out into the 10 hours we currently spend staring at “the real world.” It may seem that this a nuance…that his premise of 10 connected hours a day is still a valid structure on which to form vertical theses by market, but the difference between those two structures is much more than a nuance…it points to an augmentation of our normal daily lives…an enhancement…as opposed to a tectonic shift in behavior…it points to a reality of remaining human…of bucking what seems to be a linear digression into starting at backlit screens instead of peoples eyes. The change that I see coming is in the interface between human beings and the web/cloud/information backbone. It is no longer that we have to go “into” the web in order to retrieve information that can than be applied outside of the web, or “in the real world.” By the day, the information is jumping out of the web and into the “real world” in which we remain conscious and present. A thin layer of the web is quietly forming atop our physical lives, negating the requirement of moving through a portal such as our mobile device in order to consume and leverage what traditionally exists only on our screens. Often this layer becomes visible through the consumption of a physically proximate actor who themselves has moved through the portal of their own device, thus negated the need for you to do the same. Other times, a simple vibration in your pocket reminds you that you have a meeting in 10 minutes….again the information coming to you so that you do not have to go to it. The idea of online to offline still exists through the portal of a mobile screen, but sooner than you think the interface to our collective information will be inside of our physical human bodies. There will be no mobile device, just a cloud connected to our natural physiology. That is a “our lifetime” thought but not a 10 year thought…but there is a lot in between the chip in my bloodstream and staring at/banging on the glass of my iPhone. Even interfaceless UX like IFTTT, when coupled with passive and contextual triggers is a movement in this direction…I can’t wait to stop looking down and start looking out into the real world again. Google heads up display, microphone/auditory inputs into UX, etc, etc. etc…can’t wait
The Sky is Falling
Last night I ran into a new seed investor in San Francisco who I really like. I was asking him how he liked the move into venture and, as you might expect, his response was extremely positive. Beyond the standard awesome things about investing in early stage startups he capped his response with the phrase “and it’s the best possible time to be doing what we’re doing.”…I sort of paused for a minute… my response: “really dude, are you sure? because I’ve been mashing around a macro analysis in my head for the last year and a half, spending significant energy trying to understand the cycle we’re in, and I’m not sure you’re right”…I’ll caveat this analysis with a precursor that what I am about to say should in no way dissuade early stage entrepreneurs from starting companies right now, and in fact should not dissuade smart investors from deploying capital right now…but it may well change the profile and complexion of investments I make over the next 12 months…how…I am not 100% certain of, but I’ve got some ideas…anyway below is what I think is going to happen in our market on the next 12 months:
1) I used to think that that the public tech/ipo market would correct before the private tech market…I now think that is wrong
2) As I articulated in my 2012 predictions, I believe Facebooks IPO will be the top tick of the tech cycle, but here’s why:
- Facebook will crush their IPO, but it really doesn’t matter at what price
- A sea of scaled venture backed companies will go out in the months before (already happening), during, and after Fbook IPO
- The dumb, retail fueled public market will value this slew of tech IPO’s off of Fbook and Fbook derived multiples without an understanding of “social network A” from “social network B.” Said another way, with no understanding of true market position, actual value, and the difference btwn disruptive and disruptable…the public market will trade Carbonite for example along similar axis to Dropbox… (see Bill Gurley’s awesome post for more on this)
- 3-6 months post the flood of IPOs, the market will rationalize and stratify…smarter and more sophisticated analysis will buoy 15-20% of now public tech companies that deserve the “hot multiples” and the remaining 80% will take a beating and level at “true value”
3) Ok, so that’s the public market…3-6 months, might be 6-9 months (I wish I had seen previous cycles to know better)…but how will that impact venture and early stage venture? This link took me a long time to solidify, and this is still an assumption, but if this piece is true, I think the venture market becomes illiquid in December of this year…
- With a flood of public comps (as we know venture market valuations are largely irrational and often derived from market comp analysis that goes something like “if Instagram is worth $500M then AirBnB is worth $1 billion”)…but I digress…as I was saying…with a flood of public comps now “rationally valued”…the late stage private market will recalibrate…and all of the sudden all of the $300M-$750M fund size venture firms that got greedy buying hot assets at valuations north of $200M (especially writing $20-30M checks into them) will realize that they have a bunch of “underwater assets” on “their books” that will 1) not be able to raise another round of capital at a step up in price and 2) not be able to IPO or sell through M&A at a step up in price
4) Ok, so how does this affect early stage venture market?
- With underwater $20-30M checks on the books, even really good venture firms who traditionally play in early stage Series A type investments will develop a fear that their own fundraising efforts (in a market that is contracting organically anyway), will be harder because they made a bunch of bad bets and their LPs will know it…so when Princeton is deciding which 5 of the their existing 20 venture managers they will continue to support…the ass hole who paid up at $1B valuation for an asset that’s worth $150M is not going to make the cut
- This fear will lead to a massively slowed pace of capital deployment at all stages because the funds will not want to shut doors, rather they will try to “wait it out” or “wait and see” and a large volume of $ will dry up in all stages from Seed-Series D. Even though there will be many funds not really affected by the dynamic I just described, many of the thought leaders that the market looks to and follows will behave this way…and group think will have the “dumb 50% of the market” following the smart guys and slowing down as well…fear sets in…market dries up
5) So what does this mean for entrepreneurs?
- Already, you’ve gotten the advice to capitalize now and prepare for winter…but you’ve been getting this advice from “chicken littles” for a year and a half. Suster called bubble 18 months early, Fred was early…and frankly I may be early too…but if you think I’m right, then obviously you want to raise as larger a round as you can in the next 9 months…understanding that if 5% of the venture market is thinking like me today, and I am right, it will be a gradual shift, where 20% will be thinking like this in 4 months, 50% in 9 months, and then the rest of the ass holes will continue to be in denial until they read the New York Times headline that says “the tech world is melting”
- More practically, perhaps you want to think about building cash flow businesses. This thought makes me sad, because I prefer to think about world changing technology and huge disruption which tends not to generate cash flow in the short term…but sadly the change may support your focusing on “commerce 2.0” and other non-disruptive businesses that actually do make money…
- IF you’re raising money from large venture firms, ask them how they are reserving against your company. You’re gonna need their help to get through the illiquid period and into the next liquidity window
i. But when will the next liquidity window emerge? I don’t know…I think this driven by the amplitude of the correction…which should be less sever than 2000…because our industry is more mature, etc…but I’d say at a minimum 12 months…
I know people say you can’t time markets…Fred wrote a post to this effect that sort of pointed at Andreesen Horowitz…which like it or not, I think has sort of brilliantly timed markets…but what fun is this game if you’re not willing to put your name behind a thesis and make your call? Worst that happens is that you are wrong…so this is my guess as to when the world ends…please improve it or point out flaws in logic…it’s meant more as a catalyst for learning than a decree…
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Jordan Cooper's Blog: startups, venture capital, etc... 