startups
One day I woke up and twitter sucked
Something has happened to my twitterfeed. I used to feel like twitter was a forum to share conversation. To discuss content and ideas with my friends and colleagues. I used to open the app when I wanted to engage. People used to take risks, share controversial ideas…there was an element of inside baseball to the conversation and in some ways it felt like Cheers…you’d walk in, the same crowd would be around, talking, and there was a sense of community…what’s more…there was a social structure…people could show affection and appreciation for each others ideas….
Today, I feel like I show up to a sanitized, communityless feed of news and promotion. I still visit, because my twitter graph is the best news filter I have, but my feed has lost it’s spirit. I don’t feel like there is a conversation here any more. There is no back and forth anymore. All good communities have hosts…whether explicit or implicit, a community is shaped by influencers who participate actively and set the tone for interaction. Why have the influencers abandoned this channel? Where is Fred? Sure, he’ll push a link to his blog, because twitter is an effective distribution channel for content creators, but his voice is gone here…Where is my “RT @username”? What happened to the letters RT? There used to be this subtle social currency, a recognition, an affirmation of voice…where you would look beyond the simple syndication button, go out of your way to copy/past a tweet, insert RT before, so that the speaker knew how you felt about what they said. Now, that gesture has been replaced with a cold, sterile “Retweet” button…the gesture buried in an “activity update alongside every other piece of crap that happens in the site. Even if I try to hold on to “RT,” twitter strips the link from my copied tweet. What the fuck? Why are you making this so hard for us?
My favorite personalities stopped speaking to each other and started speaking to a faceless mass…the concept of an audience replaced the faces in the community….twitter became a microphone instead of a public walkytalky…
Where has my community gone? Where can I find original ideas and not an RSS feed of admittedly interesting news mixed in with self-promotional spam. I miss the old twitter. I miss the voices behind the content. I miss Cheers…
Read Full Post | Make a Comment ( 8 so far )Victory is When UX Escapes the Walls of an Application
Today at dinner i realized that UX in great social applications begins long before a user opens an app. Users’ thoughts are influenced by the channel in which they plan to share them. Similarly when a user decides to create a piece of content it is influenced and shaped by the channel in which she plans to share. When I share a piece of content, like a picture, the flow is not capture a picture and then decide where to share it, it’s capture a picture based on where I intend to share it. Same thing with writing. I don’t write 2 sentences and then decided if it’s more appropriate for Facebook or Twitter, I write 2 sentences with the intention of pushing into a specific application and my knowledge of the dynamics within that application influence those two sentences. So I guess I believe that content, weather it be photo, text, or otherwise, is created in the mind before it is captured digitally, and that UX of the application for which it is intended begins at the point of creation (or thought). I think UX begins in the user’s mind and not on her iPhone. I’m inspired and in awe of applications that manage to shape my thought creation and that create flows that begin before I ever reach for my phone, let alone open their app.
4 Life Hacks derived from 7 Days without Internet
I just got back from 7 days rafting down Grand Canyon with no internet. I’m still processing what I learned on the trip, but Fall is here and it’s time to start hacking my brain again. You’re not going to learn anything from reading this post, but I decided to publish as a form of social governance to ensure I stick to what I’ve decided to attempt:
1) no email in bed in the morning: I’ve decided to cut the habit of rolling over and scanning my inbox first thing in the morning. I want to wake up, brush my teeth, shower and get dressed before absorbing the fire hose of new stimulus that is waiting for me on my iPhone. I realized during my time “unplugged” in the Grand Canyon that the first 20 minutes of a morning can be an awesome time for reflective thinking. An opportunity to digest the previous day’s information with the benefit of rest and a quiet mind, enables you to look at what’s going on in life through a slightly slower and more thoughtful lens. I don’t think anything is going to change with regard to my output or response if I delay my morning consumption of emails, but I’m looking forward to a couple light bulbs in the shower that have nothing to do with whatever unfiltered mail was sent to me overnight. My friend Andy Weissman told me once that he keeps a Crayon in the shower to write down the ideas that emerge during this super valuable thinking time…I’m going to quiet some of the noise of “post alarm clock stimulus” and arm my bathtub with a few Crayolas…
2) No news before 6:00PM: I went an entire week without a single piece of news, and again arrived at some insights that were much deeper and more interesting than my normal day to day thinking. I’m thinking that my current daily architecture of breakfast meeting, catch up on news and inbox, create and add to do list, execute on specific tasks and analysis is incorrectly ordered. I think I’ve been wasting high value bandwidth when energy and attention is very high in the morning on passive news and email consumption, while tackling more mentally intensive tasks late in the day when my mind is less sharp. News is never-ending, so I’ve decided to push all consumption of it to the less mentally productive portion of late day. If I fatigue I’d rather not get to that last article or two in tech crunch or hackernews in exchange for crushing the operations that can really move the needle early in the day. I haven’t decided yet if this means no logging into twitter before 6:00PM, but maybe…
3) Gym in the morning: ever aspired to and never realized, but I think I’m going to make another real run at exercising early in the morning as opposed to after work. When I was away, I spent a ton of time hiking and exercising and focusing on improving my physical state. No new surprises here, I’ve always known that a healthy body contributes to a sharper mind, but the last few months the gym has taken a backseat to late nights at work and late meals with slightly-neglected friends and family. So…in the gym by 8:00AM is the new plan. Doesn’t hurt that I moved to an apartment yesterday that is ½ a block from my gym and 5 blocks from work. Gained an hour in commute time, going to put it to good use. Maybe also some morning runs on the Hudson river if anyone wants to get into the mix, holler…maybe also some running meetings…a strategy pioneered by my college roommate and founder of the awesome @sonarme app, Brett Martin…
4) Experimentation: Abrupt changes in context and routine always unlock hidden and interesting things. If you have any life hacks that you’ve found particularly useful or interesting, please share with me or in the comments. I’d love to give them a whirl.
Not sure what other life hacks will emerge, but the most salient takeaway from rafting down a river with no internet for 7 days is that life in startupland in NYC is VERY VERY noisy. As a result, I’ve decided to experiment with the yield of building a little structured quiet into each day.
Read Full Post | Make a Comment ( 5 so far )Moving in Ambiguous Markets
I love times like this. It’s one of those times when markets don’t know what to do. Uncertainty in a market is code for all the fucking idiots that represent the middle of a market (aka the followers) don’t know what to do because the thought leaders have begun to diverge in their opinions of future direction and “what’s going to happen.” I love times like this because pricing starts to fluctuate, and opportunity becomes more accessible with the middle of the market sitting on the sidelines waiting for someone to tell them what to do. Even if the middle of the market is active, they still look to follow, and without a loud signal of consensus, 50% of that middle pushes their stack behind thought leaders who are thinking wrong. Again, markets become inefficient, and in that inefficiency lies opportunity. I love this type of market because it rewards conviction. Swift, decisive action, without looking over your shoulder at the guy or girl who disagrees wins the day when ambiguity is abound, and doubt is the equivalent of playing poker on “tilt.” Also, in times of ambiguity, markets move more predictably around events. In the absence of strong directional signal from the thought leaders in a market, the middle moves and overreacts to the sentiment of events, independent of their magnitude or actual implications. Again, opportunity follows.
To all you chumps who aren’t sure if now is a good time to start a company, or to be a seed investor, or an A round investor, or a last money in investor, or long public equities, or long internet stocks, etc. , etc., etc. sack up, there’s money to be made in every market all the time. If you were good when times were clear, you can be good now. Stop watching the game waiting to see how it ends, pick your helmet up off the ground, and run the fucking ball into the end zone yourself. God.
And to all you thought leaders out there, enjoy. Now is your time. Move fast, ignore signal from the middle of the market, it is the uninformed parrot of ambiguity.
Read Full Post | Make a Comment ( 1 so far )Building an engineering team from the bottom up
I was at lunch last week with a repeat entrepreneur turned VC , and I was talking to him about growing our team at Hyperpublic. I told him that we had been successful at building our team from the ground up, but that we had recently lost a very senior engineering manager to a larger, better resourced startup in NY. I talked about how nice it would have been to bring someone on who could blow out our engineering team quickly, and he shared a perspective that I hadn’t heard before but totally internalized. He said that in the long term, he has seen great engineering cultures ruined by the introduction of a fast influx of new, tightly networked blood (i.e. the 10 guys/girls who that senior engineer has worked with previously…aka “getting the band back together”), and that he prefers to back teams that develop the way we have grown to date.
I looked at the senior guy we lost as a sort of “shot in the arm” for our team that needs to grow from 7 to 25 in the next 18 months, but perhaps discounted the change that would come with that type of super-condensed growth. We have managed to assemble an incredible engineering team at HP over the past 10 months, but the process to get here was far from streamlined. We did not have senior DNA on our team who could build a 10 person team over night, but rather started with just Doug and I, both in our 20’s, with some awesome networks (Y-Combinator, LV, GC, UPenn CS, Carnegie Melon CS, etc…) but lacking a deep “stable” of talent accrued over 20 year careers. We built very organically, from the bottom up, relying heavily on our personal networks, one off hack challenges, and the help of our more technical investors, but it required massive effort and patience. My cofounder Doug was (correctly) adamant about not lowering our bar under any circumstance, and we chose to execute resource constrained (and by definition more slowly) as opposed to bringing on people who were not a perfect fit. Sometimes maintaining that discipline was challenging in the face of a never ending product roadmap and a fast moving market, but we shared a belief that to get the smartest people in New York to join us, we would show ourselves to be peers. Each time we added someone great, we became a more attractive team to join, and today things are a lot easier than they were 10 months ago. Granted, we’ve executed across other facets of the business and have matured as a company, but the smartest people we interview always seem to zero in on who they will be sitting next to if they join.
This dude’s advice, that I hope he won’t mind my sharing, was that “there are no shortcuts to building a great company.” I liked that concept. We continue to hire across the stack at all levels of experience, but perhaps now with an increased weariness for anything that looks like a shortcut.
Read Full Post | Make a Comment ( 2 so far )Keith Rabois says “great entrepreneurs don’t blog”
Last night I had the pleasure of meeting Keith Rabois for the first time. By his definition, at this very moment, I am wasting my time. It’s 6:35PM on a Wednesday afternoon, I have the Techcrunch Disrupt Demo’s ustreaming in the background (my roomate from college is in the finals), flipping back and forth between email and this blog post, and in Keith’s eyes, the yield on this time I am spending writing this post is so low, that he has taken the position that “entrepreneurs and VC’s should not blog.”
I talked about the blog as an enterprise tool. A way to amplify your voice if you have smart or unique thinking, and an effective distribution channel to reach the people that matter to you or your business. We discussed the “rise of Chris Dixon,” his emulation of Fred Wilson, the early writing of Paul Graham, Marc Andreesen, and so on, and as we went through the list of people who have effectively used the blog to enhance their market position, we realized that it is not that blogging is a waste of time, but rather that the majority of those who blog simply suck. And if you are great or different or continually creative enough to write fresh content effortlessly, then at worst (and in Keith’s opinion) it’s “no harm no foul” and at best (and in my opinion) it is hugely valuable.
As I left that conversation and continued to think about his distaste for this medium, I could not understand how someone so talented and accomplished in our space could be missing the boat on what seems to be such an obvious and valuable tool for young entrepreneurs, and then it hit me. “Keith Rabois doesn’t see the value of the blog as a platform because Keith Rabois is Ketih Rabois.” I played back the conversation and listened to him rattle off the top 10 entrepreneurs in the valley, none of whom blog, and it occurred to me that the blog is not a tool for the Keith Rabois’ or Steve Jobs’ of the world, who have decades of history to stand on. It is a tool for those who are making their mark in the present (I would put the Fred’s and Dixon’s of the world into that category). I now see why Keith pointed out the lack of blogging by market leaders on the West Coast…it is because on the West Coast, the market leaders are leaders who have earned that title for work they have done over the past 25 years. They are entrenched, their personal platforms built before blogging existed, and now they rest on those platforms, not needing to amplify their voice of prove that they are equal to or better than those that call themselves leaders. On the east coast, however, I look around at who is leading our market (many of whom blog), who is top of the pack, and they are all entrepreneurs and investors who are “famous” or respected for what they are doing RIGHT NOW. In New York we don’t have a 30 year startup history that defines who is who and who is best. It’s much more of a wild wild west. If you are making moves, changing markets, and better than the noise, the blog is an essential outlet for you to compensate where 30 years of word of mouth don’t proceed your every sneeze.
We had a new intern at Hyperpublic who started last week. I made a list of goals for him this summer, and one of my unconscious instincts was to have him “start a blog.” A blog is a way for small but smart voices to rise and be heard by loud and large incumbents. It is a way to communicate to the market that “I met Keith Rabois, he didn’t think I was dumb, and felt it worth his time to talk to me for 20 minutes.” Oh and look, I mentioned my startup in a post that got syndicated 10,000 times, 300 people clicked through to my site, 30 converted into users, 2 sent me emails and asked for meetings, one is a talented database engineer, and the other was some random kid in Nairobi. All that for 30 minutes of time, 30 minutes I didn’t spend emailing, or calling, or meeting, or whatever, but 30 minutes I did spend reflecting on a conversation that I enjoyed. Internalizing what I learned. Cementing my ideas as I movie forward. “And look Keith…I’m talking to you right now…you’re reading this. You will now remember me, vs. every other hand you shook at Conway’s party. In the next five years we will have an opportunity to create value together. When that day comes (and it may be soon because I’m fascinated by the intersection of transaction and geodata), if we aren’t already better friends, I will send you an email, with a link to this post, and you will take my call, because I think different, and I got creative, and this is how blogs work. Are you sure you don’t want one?”
Read Full Post | Make a Comment ( 4 so far )Twas the night before Disrupt
Twas the night before Disrupt and all through New York
Hackers were getting pumped to meet the mythed startup stork
Who would swoop down from the heavens swaddling cloth in his beak
On a mission to deliver the next Groupme so to speak
*
Hotels are all booked, Kayak can’t save you now
But thanks to AirB&B, you can unfurrow your brow
Yes, we are living in the future, hotels headed way of the finch
And Uber’s gonna make your transportation a cinch
*
So what’s going on here, we hear New York is on fire?
Is this boom for real, or simply a figmant of desire?
What I can say for sure is we’re crawling with VC
Fresh off the Acela from a tech hub that used to be…
*
Yes it seems things have shifted, Boston is shrinking
And West Coast dudes are clearly now into group thinking
That “maybe we need a presence” in the big apple
But khaki’s don’t fly hear, and with skinny jeans they can’t grapple
*
You see, startup world, who’s watching all this from far
This isn’t the valley and we don’t give a shit about your car
We are the creative class that’s been here for years
And now that applications are cheap and easy, we’re gonna leave you in tears
*
We may not have search engineers nor are we downstack
But web development is prevalent, and UX is the new black
So when you get off the plane and utter “Palantir”
We’ll smile kindly and reply, “can @Dens buy you a beer?”
*
But back to Disrupt, it’s a veritable who’s who
With Conway, and Fred, Moot, and maybe even you?
Yes you, Techcrunch reader, coming up through the ranks
With an app only on Testflight and no $ in the bank
*
You too, can rub elbows with the great Christopher “moot”
If you hack for 24 hours, and present to the suits
And if you are brave enough to use the new Hyperpublic API
Who has two thumbs and a Lerer checkbook? Yep… this guy
*
All joking aside, we welcome you all to NYC
Land of the Mets, MongoDB and Jay Z
Where “dreams are made” and dumb angel money lost
Strap into your seat and rise above the froth
*
Who will become this year’s bell of the ball?
Get Roelof on his knees reduced to a crawl
Who has a vision that will change life as we know it
The stage is set, Disrupt is where you can show it
Read Full Post | Make a Comment ( 3 so far )Whitespace for the taking
I want to build an app that let’s you share your dating life with your friends. I would estimate that conversation about dating and pursuits of the opposite (or same) sex represent a higher volume of conversation than just about any other topic. When you catch up with anyone you haven’t seen in a while, the order of questions is basically: 1) how are you (served by Facebook, Twitter, Blogs), 2) how’s work? 3) how’s your love life / are you dating anyone / are you getting laid.? Beyond that, maybe we touch “how’s your family” “what did you do today/last night/this week and a few others, but especially in small groups of friends ranging from 13-35 years old, the details of our romantic pursuits occupy a huge portion of our overall interaction. Typically, web products come along that tend to productize the most frequent of our offline interactions, but there seems to be something of a “whitespace” around this type of sharing/conversation.
The app that I envision is a forum for you to share and discuss your love life with your friends. I want to be able to send a photo of a girl that I really like or one that I just went out with for the first time. I want to tell a story beneath the photo, or just a short note that says “so pretty, but soooo boring” or whatever captures my impressions of this temporal but potentially permanent new entrant into my life. I want to make it easier to communicate my experience to my friends when I am not sitting in the same room as them and therefore capable of answering the all to frequent request “show me this new girl on Facebook.” I want to tell a story, get advice, brag, laugh, and maybe even lament with the people who I share these conversations with everyday, weather they live down the block from me, or across the country.
I want to leverage the best of the web, and API’s and pull in photos from facebook, the native app on my smartphone, or any other environment where content or representations of the characters in my dating life exist. If I’m explaining to my friends from college why this girl is so interesting and deeply thoughtful I want to send a link to her blog, and write a note on top of it, and include a photo, and see their responses and I don’t want to do it in a mass email. Similarly, I want to follow my friends as they go through the most fundamentally human pursuit on earth. I want push notifications that say “your friend Tim just went on a date with this cartoonist” or “your friend Brett just fell in love with this girl from the subway.” I want to auth with every major dating site and enable people who are dedicated to dating to share that strange and exciting odyssey with people. “Look at this kindergarten teacher I’m about to meet” and the follow up with “He was really sensitive, but his breath was fucking terrible. No go.” These are the conversations that we have every day, I want to enhance them with richer forms of media and concepts of following/updates/and mobility that the web and mobile web can deliver.
I want these conversations to be strictly private and I want them to expire within 24 hours. Shared only with the people who I share with in the real world. I want to grant access only to a small group, and request access from those who I care about. I want to let my friends who are now married live single life vicariously through me, and at the same time, perhaps provide a forum for them to share matters of the married heart. I want to build this app, but I don’t have time to build it. If you are a builder or designer and want to build this app with me, I might be able to give you some desks and some money . Holler.
Read Full Post | Make a Comment ( 5 so far )The Downside of “Demo Day”
Preface: I believe in accelerator programs, am an active mentor in more than one, and think they play a vital role in our ecosystem. If they are here to stay, which I hope they are, I think they need to evolve. There is room for improvement.
Lately I’ve been a little conflicted about accelerator programs. On one hand, I love the support network and education that they are providing to young entrepreneurs. Giving founders a platform to build on top of, a sense of community, and direction through the early days of product development is an incredible gift to our community. Where I’m getting a little caught up, is exactly there. Accelerators are so pro-entrepreneur, that we have almost positioned them as philanthropic entities when, in fact, they are definitely for-profit. As for-profit entities, we should be aware of how economics influence their curriculum and guidance.
When you join an accelerator, while you’re interests are definitely deeply aligned around value creation, there are some points where their economic interests are actually at odds with those of their founders. Here are some dynamics to be mindful of:
1) The accelerator is economically incented to get every single company in their class funded.
This may seem like a no-brainer, but there is actually an opportunity cost to your time. Starting a company is about having a thesis, building, testing, collecting data, and make decisions about the viability of the opportunity at hand. In many cases, founders enter into an accelerator in the most nascent stages of development. Having seen the results of these programs, I would estimate that 25-50% of the average accelerator class, does not, in fact, have a viable business worth pursuing. For this segment of a class, it is in the best interest of a founder to stop working on the project that they entered into the accelerator with and start looking at other career opportunities, whether they be starting a different company with different people, joining a company that you admire, or just realizing that the startup life isn’t for you. What I’ve seen from these programs is that every single company attempts to capitalize on or around demo day, and I think this is a problem. There is so much momentum around completing this rite of passage within the accelerator architecture that kids don’t realize with the acceptance of outside capital they are making a 3-5 year life commitment. If I were running an accelerator I would be brutally honest and advise the bottom 25-50% of my class not to move forward with financing post-demo day (I actually think this could still work within the math of an accelerator if you could effectively redistribute the talent into the top 50% of the class, but that’s hard to put into a model).
2) The accelerator is creating a market for the bottom half of their class by exposing them to weak investors.
There’s a reason that accelerators invite 300-500 investors to every demo day. It’s because that’s how many investors are required to make a market for deals that shouldn’t get funded. Accelerators mix professional investors in with valueless me too investors and almost confuse those me too investors into thinking the accelerator’s assets (each startup in an accelerator is an asset given the equity position that the accelerator holds) are attractive by seating Joe Shmoe next to Mike Moritz and suggesting that Joe Shmoe is now in the flow of tier 1 deals. The market created in the demo day accelerator environment is not reflective of the overall market, and this availability of capital mutes important negative input from the capital markets, therefore unnaturally deluding the bottom 50% founders into believing their company is worth that 3-5 year commitment .
3) Demo days create an environment for both entrepreneurs and investors that encourages unthoughtful partnership.
Big VC’s and dilettante angels alike approach demo days as though they are going to the supermarket. They listen to thirty 2-10 minute presentations and then are encouraged to “pick one or two” from the batch. The session breaks, founders and investors are thrown into a room together, and investors walk around committing $100K checks to their “favorites.” What a terrible way to enter into a 5 year partnership. As a rule, I will not invest in a single accelerator company without at least spending an hour or two talking through their business and getting to know them before or after a demo day. There is a manufactured urgency that comes with the demo day environment where I believe careless partnerships are being formed.
So yea, I’d like to see accelerators evolve from what I view to be a 1.0 model, and maybe the first place I’d start is with the destruction of “demo day mentality.”
Read Full Post | Make a Comment ( 21 so far )#WINNING @ SXSW and #LOSING in Japan
As I watched my twitter stream this weekend I was reminded, or should I say slapped in the face, by a war that has been stirring in my mind for more than a year. On one side: the all-consuming, constantly updating, soap opera that is internet/startup land. On the other side: everything else that matters in life. All weekend, my feed was split between media recounting the ongoing devastation in Japan and self promotional SXSW tweets recounting parties and relationship building between the who’s who of the internet and VC world. There’s something hard to swallow about watching a video like this: http://bit.ly/hySii6 and then immediately consuming a tweet like this:
“Ruh roh. Now SXSW is getting wacky. On a crazy bus to nowhere @abatalion (pic) @davemcclure @naval #winninghttp://plixi.com/p/83904094”
I couldn’t help but think to myself, “Great, I’m glad Mark Suster and the CTO of living social are #WINNING right now, because there are certainly a lot of people #LOSING.” Don’t get me wrong, there is absolutely nothing wrong with partying and having an awesome time at SXSW, but I look at self promotional hashable tweet after self promotional hashable tweet, and I am reminded how easy it is to get lost in the internet soap opera and forget that there is an entire world unfolding around it.
But again, this is only a salient example of a much more fundamental war for consciousness that I myself experience daily. At other times, I am as guilty as anyone else of hanging on tweets, dipping in and out of the fabric of the social stream, moving around the pieces, and allowing the soap opera to become my own reality. Just as I tweet something smart @fredwilson, there is an uprising in Tunisia where a reality exists that is so much more meaningful than anything I am thinking about or have to say.
I pass by 3, not 1, not 2, but 3 homeless shelters every time I walk home from the gym, and rather than take a minute to internalize what goes on within those walls, I am focused on how not to get hit by a taxi cab as I consecutively open Foursquare, then Twitter, then Instagram, and then Facebook, to make sure I am completely current and up to speed on what’s happening in the social media sphere.
My friend, Eric Ruben, who is a very deep philosophical thinker, dropped some heavy ideas on me last week around living and experiencing life in one of two ways: A) watching and objectifying those elements “external” to us vs. B) experiencing life connected to or internalizing those same elements. The reality is, we make decisions about where and what to focus on. This weekend’s twitter stream reminded me how easy it is to get lost in the bullshit, “externalizing” the rest of the world in the name of what’s right in front of our faces.
As I write this, I feel a little like that asshole musician, who preaches about politics or world hunger when all I came to do was watch the fucking concert, but so it goes. Kill it in internet land when you need to kill it in internet land, but remember to “zoom out” and experience the more fundamental elements of life as well. I write this advice to myself and anyone else who is similarly consumed.
Read Full Post | Make a Comment ( 5 so far )
Sharing the spotlight is the fastest way into the spotlight
I had dinner on Saturday night with my best friends dad. He is an extremely accomplished Surgeon at UCLA Medical Center, and typically has some nuggets of wisdom if you shut up and listen for a while. We spent a bunch of time discussing what he looks for when recruiting doctors to his practice, and the overlap in philosophy was striking. He talked a lot about hiring based on capacity vs. historical performance (which is a practice I employ both when building the team at Hyperpublic, and also when deciding who to invest in at Lerer Ventures). His reasoning was rooted in a concept that sometimes the real game changers need to enter an environment of increased challenge or competiveness in order to really step on the gas and outperform. So if candidates demonstrated competency at the lower rungs of their professional development, but showed a strong delta between performance and perceived capacity, they represented something of a “value buy” insofar as a new environment might unlock some pent up talent/performance.
The conversation carried on, and as the parallels between his experience building a team and a career in medicine continued to reflect my own experiences doing the same in tech, I found myself taking notes… I particularly liked his perspective that: “The more you give other people credit, the more likely you are to be successful.” It’s a counterintuitive concept in a world where everyone is trying to get ahead, and build a track record, and get recognized for their accomplishments, but I do think there is real truth to his words. Some of the most successful people I have met demonstrate the outsized skill of “lifting others up.” One of my mentors, Hemant, was fabulous at giving credit and recognizing the contributions of others. His ability to share the spotlight meant that there was always room in others’ spotlights for him.
Dr. Lawrence went on to observe what he described as an “I culture,” where everyone wants to talk about themselves and what they’ve done or are doing. He said that he finds the most productive conversations to be ones where the word I is not used, and challenged us to start replacing “I” with “we.” I think I may be guilty of subscribing a bit to an “I culture.” Social media only amplifies an individual’s voice and nurtures the concept of “I” vs. “we.” I recently gave a presentation in which one of the slides was titled “I have invested in 40 companies in the last 14 months.” The reality is that it wasn’t me who invested in 40 companies, it was “us” that invested in 40 companies. And by us, I mean Ken, Ben, Jonah, Eric, Moot, and me. In a world where personal branding is an ugly but potentially necessary element of day to day, I’m going to start making a more conscious effort to turn the dial to 11 on “collective (vs. individual) branding.” Thanks Dr. Lawrence for shedding some perspective on this subject, hopefully others will absorb your words as completely as I did.
Read Full Post | Make a Comment ( 5 so far )My “Golden Syndicate” & 4 Free Passes to Medieval Times for Your Great Employee #5
Lately I’ve had a few people ask me who are the most valuable investors in our syndicate at Hyperpublic. My first answer, before I get into specifics tends to be as follows:
“Entrepreneurs tend to overestimate the impact that their early investors will have on day to day operations of their startups. Especially relative to the impact of their early hires.”
Here’s the secret truth of a seed round syndicate: once you close your round, you get a big pile of money and then it is almost 100% on you to make a success of your startup. That’s a bit of hyperbole, but you get the point.
Even as we grow at Hyperpublic from our initial two (Doug and I) to hopefully 5.5 (if we get there on someone we’ve been getting to know for the last month), the impact of this 5th team member will be 500% more important to the ultimate trajectory of our company than any single investor has been or will be to the ultimate outcome of HP. The reason: because investors are there to enhance your team’s internal efforts, but they can only amplify the momentum, good decisions, and execution that you are generating from within your core team.
This may sound strange for me to say, as I myself am an active seed investor at Lerer Ventures, but I thought it worth debunking the myth that a “golden syndicate” is capable of getting an early stage startup to the promised land. I think of our investors at Hyperpublic, at least at this point in our development, as extensions of our core team. My job as CEO is to channel their domain expertise and experience into actionable efforts within our core team, but without an amazing group of people putting their blood and sweat behind our investors’ domain expertise and guidance, our amazing syndicate would be valueless.
So this is all to say, nobody is going to build value for your startup like your team. Bring in the best investors as you can, but understand that 99% of the work is going to get done by full time employees. Success rests not on the shoulders of your syndicate, but squarely on the shoulders of your team.
P.S. I’ll write tomorrow about all the amazing things our investors have done to help grow Hyperpublic, and also maybe I’ll cover the value we’ve added to our portfolio companies at LV, but I don’t think there’s an experienced investor on earth who will place their own impact in the same stratosphere as that of the early teams that they’ve backed.
Read Full Post | Make a Comment ( 1 so far )Was Your Decision to Read This Conscious?
A few weeks ago, I went through the psychotic effort of mapping my attention across all facets of life. This was not an analysis of how I spend my time, but rather an attempt at examining what facets of life capture the most mindshare. Not surprisingly professional subject matter dominates my attention at this juncture in my life, you can see the graph below for the ugly details.
Within each bucket outlined below, I went one level deeper. For example within Love, I estimated the attention I spent on searching vs. acting vs. indulging vs. analyzing, or within Professional I mapped the thought devoted to recruiting vs. administrative vs. distribution vs. product vision, etc. I’ll spare you the graphs for all 9 verticals and summarize by telling you that my life is pretty imbalanced right now, with more mindshare dedicated to Twitter than communication with my family (who I love and talk to all the time) and more attention devoted to administrative tasks for Hyperpublic than to discovery of love. Buy me a beer and I’ll share all the data if your interested. At each point within these 9 buckets where I felt I was spending a greater amount of attention than was consistent with my philosophical ideals (or concept of what I should be focused on), I circled the line-item and drew an arrow with an action I could take to directly increase or decrease this subject’s allocation in my mind. This experiment was an effort of life optimization.
Again not surprisingly, what became clear immediately, was that I wanted to add more attention to almost every bucket and almost every line item within each bucket. I found myself trading 1/10 of a percent of attention here for 1/10 of a percent there, without a whole lot of margin to work with (e.g. many facets of my life are close to optimized in terms of attention). The one glaring area where I found a large pocket of attention to steal and sprinkle on all the needy buckets and line items was actually in what I’ve defined as Unfocussed Attention. Unfocussed Attention is the state in which you are not actively deciding where to focus, but rather passively taking in stimulus and allowing it to route your attention in whatever direction it chooses. I’ve graphed the breakout of my unfocussed attention below.
You can see that nearly 70% of the time where my focus sputters, and I turn to some source of stimulus to “route” my attention passively, the channel for that stimulus is a mobile or web application. Products like Twitter, Facebook, Gmail, Instagram, and Foursquare all serve as routers, pushing my attention without my having to make an active decision. Television is the most prevalent example of this passive consumption/attention allocation, but more and more frequently mobile products are filling the blank spaces in our focus and our day with content that drives us in unconscious directions.
When I think about the mobile products that achieve everyday usage and “Homescreen real estate,” they almost categorically possess the attribute of attention routing. They provide a stream of constantly refreshing data/content that can serve up to the consumer a new object/concept/thought to focus on in moments without one. Andrew Kortina at Venmo once used the phrase “hacking my brain” to refer to the changeable nature of our thought patterns, and to borrow his phrase, I have hacked my brain with simple rules to redistribute my unfocussed attention toward the facets of my life more deserving of that thought. Everytime I have the seemingly physiological impulse to reach into my pocket and pull out my phone to check one of these attention routing services, I have trained myself to holster the iPhone, and then spend that moment focused on one of the many line items with a red circle that indicates “in need of more.” I am not swearing off these services (I still use them regularly), but rather only engaging in them when I have consciously decided to engage.
As an entrepreneur building a consumer facing mobile application, I am zeroed in on features that have the capacity to turn Hyperpublic into an attention routing application, but as a human being I feel slightly guilty about amplifying the unfocussed attention in the world. We should be so lucky to face this conundrum:)
P.S. We’ve been meeting with a handful of folks about leading our mobile development efforts, so now would be the time to say hello if that’s your fancy. Email: Jordan.cooper@gmail.com with “Mobile” in the subject line.
Read Full Post | Make a Comment ( 6 so far )Seed Stage Valuation Guide
I find it strange that with all the VC and Angel blogs out there, nobody seems to explicitly talk about the single most interesting term in startup financing: Valuation. Look no further than Chris Dixon’s blog for elucidation on such nuanced terms as founder vesting, convertible notes with caps, etc…but where do you go to find out how much you should expect to give up at various stages in your company’s development. In the past week alone, I’ve regrettably passed on more than one deal because the valuation the founder was seeking was an order of magnitude off from what was appropriate, and frankly I am pissed. I am pissed that the earliest “committers” to these rounds aren’t advising founders that they are pricing their rounds incorrectly. Notice I am not saying I am pissed that the early committers aren’t doing a better job of negotiating. It’s not about negotiation, it’s about pricing a round in a way that does not lead to adverse selection when a founder goes out to fill the rest of their round.
By definition, the investors with the best deal flow will have a higher bar on what they do and do not invest in, and will be less likely to pay 2x the appropriate valuation for a deal when there are 3 others they are looking at concurrently that are better bets from a risk reward standpoint. Conversely, the “me too”, “here today, gone tomorrow” early stage investor who is clamoring to get into a deal with the big name angel who committed early and independent of valuation will gladly pay up to play, but is that really the best move for a founder? Probably not. The reason that I’m not willing to overpay for an inflated seed round has nothing to do with returns for our fund. It’s not a math problem I’m trying to solve where I say at $3M premoney we’re going to make a lot of money, and at $5M premoney we’re not. Rather, I view a founder’s attempt at closing on their first round of financing at an out of whack valuation as a warning sign of a more fundamentally dangerous datapoint: bad judgment. Whether I bet at $3 or $5 doesn’t matter all that much, but whether I am betting on CEOs with good judgment vs bad is an extremely good predictor of our fund’s overall success. If you are raising your first round of capital, you should be pricing your round at the valuation where the absolute best investors in the market will all be excited and willing to participate, not at the maximum price where you can find some investors to participate. If you’re not sure what these numbers are, I thought I’d explicitly articulate some signposts. This is by no means absolute, and the market changes month to month, but here’s how I’d be thinking about it by stage of development and setup:
DISCLAIMER: this may vary by geography and past experience of founding team. I write this more to begin a public dialog and less to personally define the market. I welcome and encourage other investors to and entrepreneurs to explicitly publish what they’re seeing and feel is appropriate.
Still at your old job
You have an idea you’ve been thinking about, been working on it nights and weekends and maybe you’ve pulled together some folks to help you work on it. You may have a prototype, you may not. Everyone is ready to quit their jobs, you just need funding and then everyone is on board.
Valuation range: Don’t bother. There is no market for your deal. Nobody, not even friends and family should give you capital and you shouldn’t ask for it. If you’re not committed enough to take the plunge without financing in place, then you’re not committed enough to ask for investment. Quit your job.
Pre-product
You have an idea, and you’ve done a bunch of diligence but you haven’t begun to build anything. Maybe you have some wireframes or designs, maybe you don’t. Your idea is great and you’re chasing a big market. You might even have domain expertise in the space.
Valuation range
12-18 months ago: $0 (no market for your deal, only friends and family capital available) – $2M pre-money (you have a personal brand having either started and successfully exited something or been very early at a startup love story)
Valuation range today: $0 (no market for your deal, only friends and family capital available) – $7M pre-money
Appropriate: This deal should only be getting done with a founder who has a proven track record, and in that case $2-3.5M is the appropriate range. Everyone without a track record should be building prototypes and collecting data to validate their thesis and derisk the deal by showing an ability to execute.
Average Size of deal: $300K-$700K
Protototype Built and in the market
You’ve assembled a team that is capable of getting something tangible done. You’ve flushed out your vision and taken a first hack at realizing it through product. You’ve gotten deep enough into the weeds that you’ve already identified the first set of assumptions you made that were wrong, and might even have some early data that says a few assumptions were right (i.e. user feedback, early signs of growth, market praise, etc.). If you can make it here bootstrapped, this is I believe the optimal and appropriate time to raise a seed round.
Valuation:
12-18 months ago: $2M-$4M premoney
Today: $2.5-6M premoney
Appropriate: $3-4M
Size: $400-$1 million
Product in market and signs of growth or revenue
You pushed your product live 2-5 months ago. Users are using it and either spreading it or paying for it. You’ve build a team that is executing well and you are raising money to add resources that will support growth/expansion. Not quite at the point where you have a sick viral coefficient or hockey stick curve, but you’re on the verge of product/market fit. Questions are more about how big is the market and less about validating the earliest assumptions. This is really an A round, and you shouldn’t be calling it a seed round even if you haven’t taken previous capital.
Valuation: hmmm. Ask Fred Wilson, Bijan Sabet, Mark Suster, Roger Ehrenberg, and anyone else with bigger funds who are blogging about bubbles and valuations to publish their signposts. They’ll have a better sense than me.
Size: $1-5 Million
I think as investors we need to get transparent and explicit about what we think is appropriate and what we want to see from founders. There will always be exceptions, and obviously the guy who founded Mint is going to get a different deal than the guy who just quit his job in consulting, but I don’t really understand why we aren’t publishing what we want to see change in the market.
Read Full Post | Make a Comment ( 71 so far )Online We’re Googling, Offline Still Stumbling
Last week my upstairs neighbors Deeva and Sophie invited me over for a home cooked meal. When I arrived at their house, I met their brother who was in town visiting from LA. He had previously lived in New York, and I asked him which he preferred. We talked about driving vs. walking, the people, the culture, and ultimately population density. I argued that the most amazing thing about living in this city (and cities in general) is that we are so closely surrounded by millions of people. He responded with an observation that I believe is quite common amongst New Yorkers and visitors. He said, “that’s true, it is amazing to be surrounded by so many people, and so much action, but that can also make this an extremely lonely and isolating place.” He made the point that in moments when you are not engaged in the boundless opportunity of NYC (whether that be through spending time with others, visiting interesting places, or discovering new things), you feel like you are somehow deficient relative to the life you could be experiencing.
I think what he was articulating was a broader and more general human reality, which is that there is a delta between an individual’s actual experience and what is possible. New York may magnify this phenomenon, but I believe this is the case no matter where you live. Life is not perfectly optimized. You miss opportunities, make decisions that return some value to you, but not the maximum possible value, and this is simply a part of life.
If we are missing everyday opportunity here in New York, and beyond, I would point to an unevolved system of physical world discovery and organization as the primary culprit. I look at the headway online applications have made in organizing and surfacing relevant online data, and they far exceed the tools we have to discover what surrounds us offline. Online I am efficient at finding the value I seek and want. Google has indexed almost everything I seek, and my online social graph fills in the blanks. With intent, there is not much I cannot find and engage with online.
Offline, my discovery and engagement is not nearly as advanced. I’m moving through my online life with Google-esque precision, while offline my discovery is barely more efficient than Stumbleupon (online channel surfing). I am stumbling upon people, places, and things based largely on physical proximity to my home, my office, and my gym, and to a lesser extent the physical proximity of my friends’ and family’s homes, offices, and gyms. Stumbling is great where there is no intent, where all we seek is passive exposure and stimulus as opposed to utility or any other type of value/action, but there is so much more that we can be extracting and experiencing from all that surrounds us physically. Products like Yelp, Craigslist, and Milo have made inroads in building a data layer on top of the objects in your physical world, but there is so much more work to be done. You see how with organization and indexing of these physical objects you are able to act on the places and things and people nearby, but your physical world is nowhere near searchable. Not yet at least.
I think a lot about the mission behind Hyperpublic. Why do I care about building a data layer on top of your physical and local world? Why should you care about building a data layer on top of your physical and local world? Why should we collectively pull together to add, organize and index this information about who and what surrounds us? Because I see a world where you will be able to navigate the experience outside your door with the same ease and efficiency as you move through the web. And when we collectively illuminate and demystify the opportunity that surrounds you, the delta between your experience and what is possible will shrink, and we will move away from isolation, slipping deeper into the fabric of our local, physical, and social environment.
Read Full Post | Make a Comment ( 1 so far )Mentorship, Maturation, and Youthful Hubris
I had breakfast this morning with Hemant Taneja. He is one of the few people in this world I would call a mentor (I’d put Ken into that category, and maybe one or two others, but that’s it). Hemant has known me since the day I stepped foot into the startup world, and both watched and coached me through my development as an investor, a thinker, and an entrepreneur. Many of the lessons I’ve learned about balancing confidence and humility came from him. I remember in the first 6 months that I was at General Catalyst, I started to develop what I thought were really smart ideas and opinions about deals, investing, and what was the future. I’d speak with authority on what was “smart and stupid” for the firm to back, and felt fortunate that the guys at the firm gave me the time and thought it worth listening.
As a young guy, who’s only previous experience was working on wall street where nobody gave me any respect or cared at all what I “thought,” this newfound microphone became intoxicating. I was not mature enough to handle the shift in responsibility and status that I was experiencing, which was expressed in the form of a “swagger” that was not yet earned. I remember Hemant sitting me down one day and saying “listen, you’re really smart and creative. Your showing a ton of potential and you could be great, but you won’t know that for 5 to 7 years.” He was referring to the fact that venture investments don’t exit for a long time, and you never know if a bet was good or not till the money comes back in. He said, “make a spreadsheet, keep track of what you stood behind and what you passed on. Watch how those decisions play out and measure yourself objectively.” I internalized that advice and I believe it was one of the pivotal moments that began a practice of deeply objective and rigorous self analysis that is now core to my life.
As we ate breakfast this morning, I shared with him yet another discovery of my naïveté during the early years of my venture life that it took me 5 years to uncover. I used to (and to some extent still do) hang my hat on an ability to see large macro trends unfolding across markets. I used to scoff a bit at “experience” and believe that I could see the direction of a market better than most of the “old guys” at General Catalyst. That may have been partially true, but the variable of duration of a given trend or phenomenon was lacking. I had not been in the business long enough to see trends in the context of cycles, so in my mind every directional shift was linear and not-cyclical. If it appeared that the world was moving from “destination” site to “distributed UX,” the future 2, 5, and 10 years out was always “distributed.” A combination of spending a lot of time with Ken (who has seen a number of cycles in his career), and observation of the first inflection points in the trend curves I was watching five years ago, has humbled the early version of myself and warmed me to the value of experience as a complement to capacity.
It’s very strange to consciously watch yourself mature. I can now see my former self through the lens of a more experienced investor and entrepreneur and I must have been such a pain in the ass to the Partners as GC. Thanks for putting up with me guys. I owe you a lot.
Read Full Post | Make a Comment ( 6 so far )“Why We Shoot” (how smart phones are changing our concept of a “photo”)
I see a shift emerging in consumer mindset around the camera in mobile devices. Increasingly, whether through an app that takes control of the camera, or even more frequently within the existing photo app on smartphones, I see consumers using the camera not just as a means of photography in the traditional sense (snapping images for their aesthetic value), but also as a richer form of mobile data capture. Consumers are organically utilizing the camera to engage in more utility based applications where rather than typing to capture an observation or experience, they take a photo of an object that is not “photogenic” for lack of a better term.
I recently rented a short term apartment in another country, and rather than photocopying our passports, the proprietor of the flat simply snapped photos of our passports with their smart phone. Similarly, when my landlord leaves an invoice for rent at home, rather than write a note to my roommate, I just snap a photo of the invoice and email it to him. Evernote was an early pioneer in teaching users that the camera could be used to augment and support memory, and even my instagram feed comes not just with aesthetic vignettes that you would expect on a service like Flickr, but also images of objects which have a deeper or data “meaning” to them. Someone pushes a “screenshot” of their CallerID into my feed and it has no “photographic merit,” but the data that the image represents has a “meaning” that is captured and communicated through a mechanism with less friction than the user typing and tweeting “I never pick up calls from blocked numbers on Caller ID.”
The camera is increasingly becoming a means to capture digital information for record keeping, memory, organization, and communication of objects and data that lack aesthetically interesting qualities. I believe this year we will see a slew of applications that amplify this shift in the way consumers “think” about what a “photo” is and when/where in their life it occurs to them to capture one. I think this is going to a big year for applications that are pushing the limits of “why we shoot” and at least personally I am building and investing ahead of this storm. If you are interested in pushing these boundaries and want to help us build at Hyperpublic, we’ve got some interesting mobile development challenges ahead both from a UX and technical perspective. If you’re pushing these limits at your own startup (in some vertical other than local) I’d be interested in hearing about it and maybe even investing in you.
Read Full Post | Make a Comment ( 4 so far )MICROSOFT…Vincent Chase…Hyperpublic
Hyperpublic is about to go live with a local experience that is going to change things. From our secret loft in the meatpacking district, we have been mapping the DNA of your neighborhood. We’ve been quietly building something awesome, and in a few weeks we are going to be less quiet. When that happens, we’ve got a lot of work to do. We’re going to unleash a product that is going to make consumers swoon, and then, like all great products, we are going to need to claw our way toward distribution. That’s where you come in!
You are:
– The most creative, intelligent, hard working, hustling, day 1 marketer in New York City.
– You have experience taking a consumer facing internet product from launch to 100K users and beyond.
– You are a user of contemporary internet products and understand their adoption curves.
– You are not afraid to market against the likes of Craigslist, Yelp, Milo, or Google.
– You are versatile. As capable of executing on partnership marketing and guerilla efforts as you are familiar with demand side and self serve ad platforms.
– You are a doer, self starter, resourceful and hungry. You require little to no direction in order to achieve your goals. You demand and earn respect through performance and accomplishment.
– Like everyone on our team, you take extreme pride in your work and are motivated by personal excellence and achievement
– You are addicted to traffic and analytics
Seriously though, if you want to own this, be put in a position of extreme responsibility and visibility, and work along side really talented and inspiring people, we’ll give you a job, very competitive compensation package, meaningful equity, and the opportunity to contribute and define something that is going to touch millions of people and change the way we interact with our local environment. Email resume/online presence/products you’ve helped distribute to Jordan.cooper@gmail.com with “Day 1” in the header.
Read Full Post | Make a Comment ( None so far )The world can’t be 70% off forever, right?
Lately I’ve been thinking about the roll of discounting, flash sales, deals, and deep discounts in our economic recovery. It feels like consumers are being trained to spend again, under the veneer of some “new” concept where the entire world is 70% off, and as the purse strings loosen, while individual items may be cheap (er), total volume of discretionary spending is rising. Soon, if it isn’t already happening, I am guessing price of goods will begin to rise (with aesthetic discounts/deals still in place), and then eventually consumer spending will be strong enough that the 70% off sales are going to start to become 30% off and then eventually disappear. At that point the market will be efficiently priced, discounts/deals will die, and prices will continue to rise, testing the consumer’s willingness to go higher and higher with their buying confidence now restored. When the cost of living/goods exceeds consumers’ willingness or ability to pay, without the benefit of loose lending practices to defer the correction and enable continued spending despite a crossing of this threshold, we will again dip into some form of mild recession. When that happens people will freak out again, say it’s “different” this time, everyone will stop spending, discounts/deals will return, and so on and so on and so on. I haven’t read a single piece of actual economic data to support this, I have taken half of one economics class and read a little on Wikipedia in my entire life, so I have no idea if this is consistent or inconsistent with macroeconomic principles, but I am starting to wonder if the market’s hysteria and perceived future growth in the “deals” space is not a bit naïve with regard to our macro position in the broader recession/recovery cycle. The world can’t be on SALE forever, right?
People who are smart on economics, please chime in.
Read Full Post | Make a Comment ( 3 so far )
East Village Experiment
Note: This isn’t really a blogpost, but I couldn’t fit this in a status update or 140 characters and needed the real estate on my blog to explain why I am attempting to extract a local segmentation from my social/professional graph.
I want to make a list of all the people I know who live in the East Village. I want to be able to push to this list whenever I find myself doing something local that I’d prefer to do with company than alone. I want this list to know that they are all welcome to join me when I am grabbing dinner at 10PM on a Tuesday, or when I’m working at a café on Sunday at 5PM, or even when I’m sitting in my apartment thinking to myself “I’m bored, I wish someone would come by and entertain me.” I also want this list to know that I don’t expect replies. Not interested/can’t make it? No problem, I wasn’t expecting you to be available, that’s why I’m pushing the same invite to 25 other people. Really I want to fill my unplanned flex time with people who will enhance my experience. I want this list to be my, “are you around, I’m doing this in 10 minutes if you want to join” list, which I believe is only relevant to people who live in my neighborhood and can act immediately because of our physical proximity. I think they are the only ones who would view these “immediate invites” as truly actionable and relevant a high enough % of the time that they would not mind the interruption via SMS/Push Notification.
I tried to build this list with a Groupme, and then realized that Groupme is not the right application for this need because everyone on my list knows me, but not each other. This list doesn’t want to communicate as a group. I guess I want to push immediate invitations to a “local subset of my social and professional graphs” Is there a product out there that I can use to help manage this?
Also, if you are my friend/colleague/or just someone interesting who lives in the East Village and you want to be on my “immediate invitations in the East Village” list, send me a note, drop a comment here, or whatever and I’ll add you.
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