Archive for November, 2016
Honesty is so hot right now
Just do something honest…it doesn’t even really matter what…just let it be you…authentic…if flawed…but also maybe great…reach deep…beyond what is working for others…beyond what is not working for you that you have somehow rationalized…be genuine…express yourself…neither in the face of, nor in the name of, economics, acceptance, or praise…what is something you can do that is simply true?…unquestionable…once released or completed…what can you look at without hesitation and say “yes…that is me…this is mine…and there is no ambiguity or regret about it.” That thing…or more precisely whatever you connected with to take that step, make that thing, be that thing…that thing is north…it is what gets covered up and obfuscated by keynote speeches, fireside chats, billion dollar deals, fancy invitations, top 10 lists, and manufactured heat…it is what you give up when your confidence is down…it is what you give up to pay your rent…it is what you give up to be understood immediately…to fit into something that sounds clean and attractive over cocktails…it is what gets drowned out by the hype machine, content marketing machine, megaround, marquis hire, ergonomically correct, cold pressed juice, gloss machine…it is the thing that let’s you make it…without faking it till you…nah…actually if you’re faking it…you’re never gonna make it…even if…somehow…you get so good at not being you…that you make some money and fool some people along the way…you will never make it…because you had something better in you…that was really you…that would allow you to live as yourself…without compromise…freely…and successfully…and you gave it all up to make a top 10 list…that somehow will sound and feel less good in a bio that reads “she was named to SA 100’s coolest people in tech” 6 years ago, and now is a product manager at Yahoo. What are you bleeding to express? Try to make money expressing it and the multiples will expand…economic, social, emotional…it is so rare to hit that sweetest of sweet spots where you can just wake up…be you…and let the world reward you for your honesty…but that is where it’s at…and if nobody sees you…for a very long time…that means nothing…as long as you see yourself in what you are doing…all those things that you admire from afar…some of them are for you…and some are not…and the fastest way to figure out which are which is to express yourself as honestly as possible in your work.
6 Considerations when buying Snapchat stock post-IPO
Snapchat is going public. As far as consumer technology IPOs are concerned, it’s a short list of scaled social applications that have been able to tap the public markets…but those that have, have been generation defining companies, achieving market caps in the tens, if not hundreds of billions of dollars post-IPO. The list is short indeed. It goes: Facebook, Twitter, Linkedin…that’s kind of it (tell me what i’m forgetting, if I have). You can’t swing a dead cat these days without hitting a social app in the Appstore, but those that achieve true, sustaining scale…that capture an enduring relationship with their user base, and that have the potential to say reach billions of people…the air is quite thin. These companies are important because they represent attention…they are part media company, part publishing platform, part social network…they are where large amounts of consumers spend their time, and that time is obviously valuable…to advertisers…to companies…to anyone who wants share of wallet.
Here are some things to think about when considering a purchase of Snapchat stock:
1) Brand: There is a lot to like about Snapchat for a day 1 buyer post-IPO. It is undeniably where the post-FB generation is expressing themselves, communicating, and frankly identifying. The brand is epic…Snapchat can’t make a move that is uncool…and there’s something to be said for that. That was not true of FB, Twitter, or Linkedin…for a long time it was true of Apple (which although not a social application company, is a good example of the power of brand). From an investors standpoint…brand is valuable and difficult to quantify, but assume there’s some upside here relative to what institutional investors are modeling.
2) Growth and user engagement: I haven’t dug into the numbers, but i’m sure they are staggering. As consumer apps go, i’m sure Snapchat will shine on metrics…as far as day 1 investors are concerned, i’d assume that these metrics will be fully recognized and valued by the instiutional money that drives the public markets. Investor have had enough time to understand how to value social applications at this point (which was not the case in the early days of Facebook’s and Twitter’s public lives)…so I’d assume there isn’t a lot of upside in unique understanding of Snapchat metrics…net-net no upside…everyone is going to be looking at the right numbers and understanding them…
3) Except: is Snapchat a social application or a modern day cable company (i.e. a platform where people consume 3rd party content and media)? this is an existential question Twitter has very publicly grappled with in the public markets. Twitter was constantly trying to tell the story of the lurkers and logged out users…consuming media on the platform but not being social…explaining that active users were more than just people who tweeted or even logged in…but the market didn’t know how to evaluate them…and frankly still doesn’t. Snapchat has some elements of this as well…depending on whether you are looking at their chat and user stories features (most valuable), or their Snapchat Discover feature (where publishers like Buzzfeed and ESPN reach Snapchat users)…there are sort of two stories being told. One is “evaluate us on our social activity”, and another is “evaluate us as a pipe for 3rd party content”…and both can be valuable, but only the first can be $400B market cap valuable…even Time Warner Cable is only valued at $68B last i checked…of course there is a symbiosis that social apps and modern cable companies experience…best realized in the form of Facebook today…and there’s a reason that the two go hand in hand…but explaining this nuance to the public markets is difficult…and i view some risk and market acceptance and understanding of “what is snapchat?” should the story evolve, or certain metrics outshine others quarter to quarter…from a day 1 investors standpoint, I don’t think this is an immediate negative…because i think the promise of being the next Facebook is what will drive early speculation in the stock…but 12-24 months out I can see this story being complicated to communicate.
4) On being the next Facebook: This is really where the action will be early ideas. Can Snapchat amass the next 2 Billion people…younger people…not living their lives on Facebook yet or maybe ever…is Snapchat where they will spend a similar amount of time and energy? I see no reason why the answer can’t be yes…and i think that’s the bull case…but there are some existential threats to the bull case that are worth noting…one of the biggest, i believe, is that Snapchat has taken a relatively isolationist approach to building their application and company. They have not opened up to 3rd party development at all so nobody else is (legally) building businesses or apps on top of Snapchat). They have taken a very controlled approach to opening up to outside publishers and content creators. carefully curating who gets to show up in Snapchat discover, and what type of content they can and should create for Snapchat. And they have done nothing to spread their tentacles across the open web. There is no Snapchat like button. No share to Snapchat. No login to this site with your Snapchat account. No oay with Snapchat…Snapchat is not baked into anything else…and very little else is baked into Snapchat. The positive side of this approach is that they have incredible control and stewardship over the Snapchat experience and brand. The product experience is delightful and unadulterated…and that is reflected in the metrics above…the downside is that Snapchat is not infrastructural in nature…it’s not a platform yet…it’s not an ecosystem…and that means it’s easier to rip out and replace in the world as a whole, than say a Facebook was when it IPOd. Now, the network of loyal users…who have built their identities on Snapchat and creating new social graphs there…that is very sticky…but Snapchat has not diversified it’s touch points to the users or enterprise…it is still subject to the ephemeral whims of an increasingly fickle consumer base with increasingly available alternatives coming down the pipe in the form of “the next hot app, that is cooler than Snapchat.” What this means in practice, is that they can’t ever lose their brand voice, and they can’t ever drop the ball on product…and history would say most other consumer applications do one or both of those at points in their life. When Facebook IPOd i used to try to explain to wall st types that they are thinking about FB all wrong…facebook is a piece of societal and enterprise infrastructure, it’s a platform, and that position is why it’s valuable…it’s not just eyeballs…Twitter had the same narrative available to it, and ultimately squandered it (although i believe that it is still available, and the only interesting investor narrative available at this point actually), but Snapchat does not yet have this narrative. Now maybe it will develop it over time…but today…Snapchat kind of is all eyeballs…and that’s not a super secure place to be. for day 1 investors…if you are long term value investor…this is a negative and one that will not be appropriately reflecting in institutional analysis
5) On revenue and financial opportunity: I haven’t dug in deep here. From afar, it seems that Snapchat is taking a pretty bespoke approach to monetization…and it also seems they are heavily inspired and influenced by the cable television model…I think this will evolve as they need to reach a different scale of revenue…so I wouldn’t really look at today’s business model as the one that will get them to a Facebook sized market cap…Facebook itself didn’t come out of the gate with their killer business model at IPO…the App install add didn’t come for 3 or 4 quarters after IPO, but it was obviously the unit and model that changed the trajectory Facebook’s story on Wall St…and Snapchat doesn’t really have an analagous opportunity visible today. There is no self serve, near-infinitely scalable way for Snapchat to make $ that is visible today…Google has this. Facebook has this…and if Snapchat wants to break into that stratosphere from a shear market cap standpoint…it’s going to need to find something similar…the good news: i think it can. the bad news: hard to see Wall st giving credit for that until it materializes…
6) Overall: I think I’m a buyer in Snapchat at any market cap under $40B…if for no other reason, than that there is no other contender to become the next Facebook…but I do not believe they will get there by being isolationist forever…and I see a fair amount of risk as they are pressed to give up some control in exchange for scale, diversification of touch points, monetization, and infrastructural position.
Read Full Post | Make a Comment ( 6 so far )what it’s like to meditate
Alarm goes off…what day is it? is it Sunday…mmm…no it’s Tuesday…get your ass out of bed…we are not going to snooze our way through this transition…it’s just not gonna happen. brushes teeth…showers…i don’t feel like meditating today…no we’re going to meditate today, 20 minutes, before coffee…like we do everyday…because you know we feel so much better and think so much more clearly when we meditate…yea, you’re right…sits on cushions…starts timer…closes eyes…darkness…familiar darkness…what do i hear? cars passing, refrigerator humming…what do i see? white light shining through my eye lids…small specs in a matted dark space that has some volume to it…what do i smell? nothing…mmm…maybe some maple syrup…no idea why…what do i taste? leftover toothpaste…maybe something sour…what do i feel? an itch on my neck…the feeling of the skin on my outer left foot pressed against our hard wood floors…ok…i am present…1, 2, 3, 4, 5, 6, 7, 8, 9, 10…10, 9, 8, 7, 6, 5…i wonder what kenny is doing right now…i miss kenny…4, 3, 2, 1….1, 2, ah, the matte like space looks a little different…3, 4, 5, 6, 7, 8… i really enjoyed my tea with Dearing…yes…he is an unusual guy…i think he’s good though…were my ideas good? are my ideas good? yes…they”re good…some are not correct, but always original…i’m so bored of unoriginal thinking…there are so many funds right now…so many derivative companies…it’s so noisy…are my ideas still valuable? yes? you just need to change your approach…a lot has happened in the market since you thought this way…ok, what’s a new appr…1, 2, 3, 4, 5, 6, 7, 8, 9, 10…10, 9, 8, 7, 6, 5, 4, 3, 2, 1…1, 2, 3, 4…remember Lois Ratner…she drove me to school every day growing up…that was so nice of her…5, 6, 7, 8, 9, 10…10, 9, 8, 7, 6…did she judge me as a child? maybe…i was the whacky one…her kids were much more together every morning…5, 4, 3, 2, 1…1, 2, 3, 4, 5, 6, 7, 8, 9, 10..10, 9, 8…shoulders drop…man…i was holding something that i just let go of…that feels good…7, 6, 5, 4, 3, 2, 1…do i want a job? maybe…but there are so few funds i’d be excited to join…and who knows if they are looking for new partners…probably not…i want to raise a fund..pick my partners…but there are so many fucking funds…does the world need another fund? yes…it just has to be different…that’s doable…i wish it didn’t have to be a seed fund. I’d rather have $300M than $30M…2, 3, 4, 5, 6, 7….chill out…take your time…let the world unfold a bit…you’re going to India…stay loose…it’s not time yet…8, 9, 10…10, 9, 8, 7, 6, 5, 4, 3, 2, 1…1, 2, 3, 4, 5, 6, 7, 8, 9, 10…maybe it’s time to start having coffees…maybe it’s time to let the world know you are ready to hustle…but your vision isn’t baked…and so much of what’s getting backed is completely boring…we need to get our arms around everything interesting…but the world is different…too many companies, raising too many rounds, from too many funds to build the mental map of the market…we need new tools…we need a new framework and process for keeping tabs…we need softwa…2, 3, 4, 5, 6, 7, 8, 9, 10…10, 9, 8, 7, 6, 5, 4, 3, 2, 1…1, 2, 3, 4 5, 6, 7, 8, 9, 10…10, 9, 8, 7, 6, 5, 4, 3, 2, 1…the dark matted space is a different shape…there is a light center in the midst of the darkness…is it someone i have known in the past…is it energy…focus on it…go deeper…it’s gone…2, 3, 4, 5, 6…it’s back…it’s peace…and lightness…and CHIMES…20 minutes…hold onto this lightness…opens eyes…stretches…fills tea pot…walks to front door to pick up the paper…sit’s down to begin day…the world is interesting…and in flux…and i am meant to do something…eyes open..embrace others…feel no shame…smile…let’s write something…
On Burning Out
Burn out is a real thing…in startups…it comes from carrying the angst and fear and frustration and hopes and wants of ~20 people for 3+ years. It comes from wanting so bad to fulfill your promise to your team and your investors and your cofounders and your family and your loved ones…it comes from breaking up with early employees who are also burnt out and ready to move on…it comes from a morning metrics reports that slowly turn from exciting to troublesome as 80% of your new users leave you over 30 days…it comes from a concerned phone call from your mom that your product isn’t evolving fast enough…or from a father in law who just can’t seem to get the search result he wants in your app…these little papercuts to your entrepreneurial soul that one by one harden you into the type of person who can execute while being cut…you build up this armor that allows you to walk through your days…but it doesn’t mean the cuts don’t draw blood…they are just internal…and as you bleed inside…to an ultimate outcome (whether that be success or failure)…at some point…you don’t have to execute anymore…and all of the sudden you are left with a body that is full of cuts that need to heal…each cut remains open until you go back to the point in time where it was first drawn…see that you were hurt…and somehow rationally and logically agree with your soul that you are no longer in that place…and that stops the bleeding.
Burnout is when you kept pushing your body and your mind to move forward…into a series of successive cuts…for so long…that you are too damaged to appreciate the pleasure and joy of moving forward at all…it’s like you’ve trained yourself to expect pain from forward movement…and therefore it’s not so much that you fear moving forward…as it is that you revert back to not feeling as you step…and that’s a pretty inertial place to be. Burn out is numbness.
I’ve been burnt out a number of times in my career. I was burnt out after Untitled Partners, I was burnt out after Hyperpublic, and I am slowly unburning out after Wildcard…the shitty part of being burnt out is that it’s hard to get excited…that numbnesss is real…but the good news is that it’s not permanent. Everyday it’s easier to attain glimmers of interest, moments where your heart races as you lock in on new thinking…
It’s not the most sustainable approach to life…to go through these cycles of 2-3 years burning out, 3-6 months unburning out, 2-3 years burning out, etc…you’d like to maintain yourself in a way where you don’t hit burn out…but i’m not sure that’s possible as CEO of a tech startup…at least not for me…having done that 3 times, over 5 products, and 8 years…and having invested in literally hundreds of my peers doing the same…i think if your signing up to start something…your signing up to burn out…and that’s just part of the deal.
Sometimes when burnt out, it can feel like the excitement to move forward may never return…but time and time again it does…so if your feeling burnt out…just know that it’s normal…and that good things are around the corner 🙂
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Jordan Cooper's Blog: startups, venture capital, etc... 