startups
Newly Seed Funded? Don’t Commit to Monthly Updates
Ok, you’ve been hustling for 2 months, selling the shit out of your vision to all of these amazing investors, trying to pickup a few nickels to rub together, and finally…finally, finally, finally, you have persuaded 6 or 7 very smart folks to cough up some seed capital. Today the money hits the bank. You did it! You got Keith Rabois, Ron Conway, Eric Schmidt, FirstRound Capital, and Jeff Bezos to give you $1 Million. You go out, drink 15 shots of Tequila, puke, wake up the next day, and you say to yourself “thank god, I can finally get back to thinking about my product. 30 days or so pass, you have a few conversations with one or two of your seed investors, and then you realize “hmmm, I have all these smart people around the table, I should probably try to involve them as much as possible in what we’re doing.” It has been about a month since you closed the round, and you say “I know! I will right a MONTHLY update.”
You sit down, and the first sentence of your update reads as follows:
“All, we are so excited to have everyone on board. This is the first of our monthly updates. Every month we will write to you and tell you what’s going on with the company and how you can help”
I know this is the first sentence of your update because it was the first sentence of my first update my first month after financing my first company. I also know this is your first sentence because of the 30 companies I have invested in the last 12 months, about 50% of them are run by first time entrepreneurs, and of those 50%, it is the first sentence of almost everyone’s first update.
Guess what? Of all those founders, myself included, who wrote this first sentence, not a single founder has actually sent an update every single month. When everything is new, you think you are going to have news for investors every month, but operating a business doesn’t happen in predictable 30 day cycles. The events, occurrences, accomplishments, and missteps that emerge when executing toward your vision unfold unpredictably.
Repeat entrepreneurs must have picked up on this unpredictability. I can’t think of a single second/third/fourth time founder in our portfolio who has committed to monthly updates.
My advice: Don’t set a precedent that you will be communicating on a monthly basis, because you’re simply going to look like a loser when you promise that and don’t deliver. Still send updates, engage your investors, make sure everyone knows what’s going on with the company, but do it organically, when you feel an update is warranted. It can be 17 days after the previous update, or 60 days after the previous update. You’ll get more out your investors this way and they’ll get more out of your updates.
Read Full Post | Make a Comment ( 2 so far )The Social Challenge of Releasing Early
A decision Doug and I made at the onset of our company was to work and build in public. Doug was lucky enough to participate in Y-Combinator and many of the ideals, this included, that we embody as a team stem from that influence. The natural tendency when building consumer facing products is to keep your product under wraps until it is “ready” for prime time. We come from a school where as soon as something is functional, we push it live, and begin to collect data as we iterate and improve. From an execution standpoint, this methodology has and continues to prove effective. From a social standpoint, however, it can be challenging.
The challenge is as follows: friends and family who are engaged and interested in your progress can only see what is visible to the public. They don’t understand that your product is literally a public construction zone, and that you know your UX isn’t compelling or “finished” yet. It has been an ongoing process for me to try to explain to my dad, for example, what it means to build a data layer on top of all the objects in a local environment. Or to help my ex-girlfriend from college understand how real estate is related to hyperpublic.com. Or to tell the litany of early and supportive users why it is that we haven’t given them something more to do on the site than what’s available today.
What I’m realizing is that if you are trying to execute on a plan that calls for Minimum Viable Product pushes with ongoing iteration and progressive layering in of feature sets and enhanced UX, you need to have strong resolve not to sweat the social challenges of this style. My partner Ben Lerer recently had a great observation about his own and many of our collective experiences as founders. He said, “Listen, at the end of the day, there is not a single person on earth that is gong to fully understand the vision in your head. Your team, your investors, your family, consumers, nobody can see the future of your company and product as clearly as you. That’s okay, your job is to keep communicating and clarifying it as best you can and keep executing toward what you see in your head.” I thought these were pretty insightful words and have shared them with a number of my peers.
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I am tired of reading blog posts from “bubble predictors”
I am tired of reading blog posts from “bubble predictors.” It’s such an easy position to say things are crazy, this isn’t sustainable, when you don’t set a timeline for when we will begin to see a correction. Oh really? You think valuations are eventually going to come down after a period of growth. That’s novel, way to go dude. Even better when you hedge your call and say “this isn’t sustainable, but I’m going to keep playing, just in a smarter way then everyone else who is doing the same thing.” I can’t wait for you to point back to your November 14th 2010 post 24 months from now and say “look, I called it, nobody listened.” If the market corrects in 6 months, you got it just right, if the market corrects in 24 months, you got it just right, what a cowardly position to take.
What pisses me off even more is that every time you voice your nebulous position on the trajectory of our market, you negatively impact it and contribute to the fulfillment of your prediction. What’s the best way to catalyze a bubble? Start talking about a bubble.
Generally I’m a fan of Suster’s blog and perspective, but I love how he complains that Angel investing is “driving up prices beyond their inherent value.” Guess what Mark, every single Angel deal that has been done in the last 10 years has been done above it’s inherent value. That’s because 2 guys and a dog don’t have an inherent value. Value is entirely market driven at our stage of investing, and if you think the pre-traction consumer facing web application is “inherently” worth $2M pre, but is not “inherently” worth $4M pre, you’re wrong. Guess how much it’s actually worth? About $60K, or whatever number you can arrive at by multiplying the number of man hours that went into it by the market rate of that labor elsewhere.
It also pisses me off that people are complaining about the number of angel investors that have entered the market. Sure, this makes it harder for you to generate returns as an venture investor, when prices go up, etc…but more angel investors mean more founders can start more companies, realize more dreams, and create more innovation than they could 24 months ago. Personally, I welcome anyone who wants to cut a $50K check to support a new product and pull a smart mind out of wall street or advertising or any other industry that is not pushing the limits of what can be. I’m not saying all these companies that are getting funded deserve the funding or valuations they are raising at, and many of them will die, but I’d rather see a slew of dead carcasses on the side of the road with a single world changing product leaping over them on the way to victory, than a road with no carcasses and a world that could have been changed but wasn’t because you scared all of the new angels out of the market with your fire and brimstone analysis of why “angel investors who think they are cool at parties aren’t really cool.”
So here’s the deal. I’m not saying that there is no funding gap, there will be. I’m not saying that people aren’t overpaying for deals, some are (and btw some are smart to overpay for deals. You would have said the Bijan overpaid for Twitter and David Sze overpayed for Facebook, and they are both laughing all the way to the bank at the slew of investors who sat on the sidelines when prices got high). I am simply saying that all of this entrepreneurial activity is a net-positive for the world. Founders and investors, take note that you are playing in risky waters and lots of you are going to lose lots of time and money over the next 5 years. Some of you are going to make gobs of money, change the world, and do it on your own terms. If you don’t like that setup, go be a lawyer. If you do like that setup, put your head down, make the smartest decisions you can, and play. Don’t complain about it.
P.S. I realize there is a very good chance I am going to have to eat these words in the foreseeable future, but I have no interest in hedging. Suster: it’s all love, but I hated your most recent post.
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Founders: Are you Leaning far Enough?
I don’t write very much about my relationship with my partner Kenny Lerer, mostly because he’s not really one for the spotlight, but lately I’ve been thinking a lot about the things I’ve absorbed from him over the past 10 months or so. Yesterday at a breakfast I caught myself advising a young Dartmouth graduate with words that were not in my vocabulary before Kenny became my partner at Lerer Ventures and Hyperpublic.
This particular breakfast, I found myself listening to a relatively analytical young guy who had obviously spent a lot of time thinking about his next moves. For some reason there was friction between his decions and subsequent actions. What I told him, which is advice that Kenny has given me and other founders I know repeatedly, is that he really needs to “lean into” the direction that he’s decided to go in.
It sounds like a minor point, but I believe that this mentality is the difference between grounding out to the short stop and hitting a line drive into left field. Many good entrepreneurs and strategists are able to assess a situation and make a good decision (let’s call that “pitch selection”), but that is only part of what makes you a great batter. I’ve always been good at deciding what pitch to swing it, but there’s another decision after “pitch selection” that is extremely important. Let’s call that decision “commitment to the pitch.” If you decide to swing but sit on your heels and slap at it, you’ll poke the ball through sometimes, ground out frequently, but often make contact. I’ll call that low commitment, low risk.
On the other hand, if you “lean into” the pitch, get on the balls of your feet, and swing hard and all the way through the ball without hesitation, your contact and results will be much stronger when you connect. Granted, you’re going to whiff more often, and that curve ball is going to leave you on your ass in the batters box, but generally speaking, I believe you’ve got a better chance of putting the ball where you want to with this approach.
What I’m seeing is that despite much nuance in the course that you charter for a go forward strategy, exaggerating the most important aspect of your ultimate destination sets a tone and point to drive to that may be a simplification of the vision, but a necessary means to landing where you want to land.
So Kenny would say, and I think I agree, if the most important thing at Hyperpublic is that we end up achieving hyperlocality, despite an incredibly complex path to get there, we as a company really need to “lean into” that aspect of our product and our future.
Isolate the goal, exaggerate it, and don’t be afraid to commit heavily to what you’ve decided is correct. Are you leaning far enough?
Read Full Post | Make a Comment ( 5 so far )5 tips for your first day at a new startup
First days at work can be weird. I remember my first day at General Catalyst. I got there super early because nobody told me what time to arrive, sat at my desk attempting to look busy and re-reading every page of the company website which I had already read 5 times, and sort of waited for someone to give me something to do. I remember thinking to myself, “my job for the next few weeks is just to build relationships with all these new people.” As much as I wanted to have an impact on day 1, find the next Google right our of the gate, and come up the curve faster than anyone before me, the reality is there is a period of acclimation and integration that precedes any truly meaningful contributions you can make to a new company.
Here’s a list of the top 5 things to do when you are starting someplace new.
1) Listen: Listen intently to everything anyone shares with you. You’ll have plenty of time to speak and show your talents, but the beginning is all about absorption of the culture, knowledge, and people that have to date defined the environment that you are entering into.
2) ASK QUESTIONS: Keep a note pad, write down every single question that comes up over the course of your days, and then corner somebody when they have a minute and get all your questions answered. No question is too stupid, admit everything you don’t know (even if you feel like you should know it already). Don’t waste time pretending to understand things you don’t. Nobody cares what you know the day you arrive, only how fast you pick up what you need to know.
3) Your work can wait: If anybody asks you to hang out and grab a beer or see a movie, even if you have a ton of work to get done, always say yes. Your work can wait, it’s super important to build relationships and get to know the people you’ll be working with every day.
4) Be yourself: It’s hard to let your guard down and be yourself on day one, but the sooner you can feel comfortable in your own skin, the better off your going to be. You have an opportunity and a responsibility to impact the culture of your company in a positive way. Allow the great aspects of your personality to shine, even if they are not represented or visible in the people around you.
5) TRY: The only thing you need to worry about in the first few months of a new job is putting everything you possibly can into it. This is a time to make sacrifices in all other realms of life until you have come up the curve and are contributing at a level that you are proud of. By definition, you are going to be inefficient at the onset of a new job. The best way to combat inefficiency is through effort and hard work. Long term, tunnel vision and an imbalanced work/life situation will catch up with you, but short term I think it makes sense to let your family and friends know that you are going to be MIA for a few months while you’re finding your groove.
I guess this is on my mind because we have two new team members starting today at hyperpublic. Welcome Eric and Jonathan. Can’t tell you how excited we are to have you both on board.
Read Full Post | Make a Comment ( 1 so far )A picture speaks a thousand words
I had a meeting on Friday with a super smarty. We were talking about hyperpublic and I was trying to explain what I wanted it to become. She sent me a note today saying that she spent all day walking around the city and couldn’t stop picturing small tag bubbles above people’s heads. Here’s a doodle she drew around one element of our vision, which I love…
Execution, Reflection, and the Friction Therein
I’m staring at a blank page of paper, trying to find my voice, searching for the window into my thoughts that allows me to write three paragraphs in 15 minutes, and wondering why it is so fucking hard to find right now. Galpert is sitting next to me, tapping away at his newsletter, 90 words a minute, and I can’t seem to hear myself. This has been a regular occurrence over the past few months. At earlier times in this blog, my thoughts and reflections flowed so freely, the commitment to post was not a commitment at all. But lately words have been slow to come.
I think it is largely because I am in a state of prolonged execution, not just professionally, but in all facets. These past few months have been about checking boxes and getting shit done, and I believe that state is at odds with deep reflection. Sometimes you are moving too fast to stop and think about your movement. This isn’t necessarily a bad thing. Execution can often be governed by intuition, a recipe which does not require nor even necessarily accommodate deep reflection, but the yield on periods of my life that are governed by one vs. the other are quite different. Right now, for example, I miss the deep analysis of myself. I miss the frequent attention to nuances of human experience, and generally floating 10,000 feet above ground level, looking at the world and population move by, not actively participating or engaging with it at ground level.
The past few months have been about to do lists, and moving, get the gas turned on, push the product, hire the people, buy a couch, get new clothes, find healthcare, etc. etc. etc. These are the things that need to get done, but when I find myself sitting in a café with a pot of tea, the music I’ve been waiting to listen to all week, and an opportunity to revisit interesting thoughts or observations that I’ve had over the past few days, I realize that I can barely recall them. It’s not because I am not having them, but more because “bookmarking” them and taking notice before they flea into the abyss that is my ADD black hole of a memory is not something that is easy for me to do when every pause in execution I have trained myself to glance back at the to do list instead of upward at the sky and the clouds, and inward at myself, my imagination, and whatever direction my mind would go if it wasn’t autofocussing on the next task ahead.
Every so often I notice friction points in my life, where a function doesn’t move as smoothly as it should. The shift between states of execution and reflection is a point of friction that I will now actively work to diminish. Like everything else with the mind, you can exercise the weak elements and build toward frictionless computation. Execution is the order of the day, but welcome back reflection. I missed you, let’s hangout again tomorrow.
Read Full Post | Make a Comment ( 5 so far )Living in a State of “Anonymity PLUS”
As I sit here on this train, bound for the Meadowlands where I will undoubtedly watch the Jets destroy Randy Moss and the Vikings, it occurs to me that although unnamed, I am not anonymous in this crowd. Miriam Webster offers the following 3 definitions of anonymous, none of which (save the most literal “not named”) describe my state on this train.
Anonymity would imply that I am unidentifiable, when that is not, in fact, the case. The people who surround me here actually have access to enough data that they are able to categorize and classify me. Despite the stigma around that concept, I am not concerned in the slightest. Why? Because I control the data I am sharing with the people on this train. In fact, because I control the inputs that define their impression or perception of me, I am actually excited for them to consume this “metadata on top of my physical presence.”
I wear a long sleeve green Rugby shirt in support of the Jets, which when paired with a time stamp (1 hour before game time) and location (on a train headed westward from Manhattan), identifies me as a Jets fan. I am proud of this facet of my identity and wish to communicate it to all who will observe. Why?
1) I guess I seek the camaraderie. Other Jets fans in my presence will recognize me as one of their own
2) I want to display that I welcome conversation and interaction with those who share my affiliation or interest
3) I want to further the facet of my identity that I am showing, spread it if you will. If I am able to convert others or strengthen/support the interest which I make visible, there is a reflective property where I actually strengthen my own identity (basic missionary theory)
4) I see myself publicly tagged as “Jets” and it affirms my concept of myself and my level of commitment to what it represents. The fact I make it visible to all reminds me that it is core to my identity
Clothes are but one example of a tool people use to communicate and control their public identity. The woman to my left smiles upon eye contact, publicly sharing a “tag” of friendly (the most frequent tag on hyperpublic.com to date, btw), while the drunk to my right sits face cringed, communicating “misery” or “inapproachable.” We were given the capacity to publicly display emotions through facial and body gestures, a sort of biological tagging system which non-verbally influences the level and type of engagement we have with our surrounding population. These signals are completely public, the fact that we share them with everyone is an almost biological recognition that there is, indeed, potential value waiting to be extracted from those with who we share a physical, but not yet social relationship.
Our everyday, real world lives, do not exist within the bounds of true anonymity, yet the majority of internet products that attempt to digitally replicate or enhance real world life, feel an obligation to preserve the veneer of this false ideal for their users. I believe we move through physical space in a state of “Anonymity PLUS.” This is a state where we are aware that we are visible to an unfiltered public eye, and thus control and define the data which it is to our advantage and pleasure to broadcast widely.
Hyperpublic is an experiment in recreating that state of “Anonymity PLUS”. There are no names unless you chose to tag yourself by one. There is no such thing as private data here, but there is also no data here that you have not actively decided to push to the public. There is undoubtedly value to be had by sharing that data which you want to be seen by all (think about the value of appearing at the top of Google results for example, how would you wish to define yourself to all who Google you). Our goal is simply to maximize that value by giving your public tags as broad a reach as we possible can. You choose your green Rugby shirt when you get dressed in the morning, why not choose to display all the data you wish to communicate publicly?
Read Full Post | Make a Comment ( None so far )Physical vs. Social Proximity at a Cafe
I’m sitting at a café on 10th street and 1st Avenue, sipping a tea and snacking on an amazing breseola and parmesan Panini. Until one minute ago, I was 3 sentences into a blog post about The Social Network and the concept of isolation in entrepreneurship (which I will write after this). As I gazed over the building line to a light blue sky, searching for the words that could best describe entrepreneurial isolation, something happened. Out of nowhere, a flock of let’s say 50 white birds, that I can only assume are doves, appeared in the margin between the buildings that line the north and south sides of 10th st. They began to circle inside the frame created by the tops of the brownstones and as they did, they waned in and out of visibility depending on weather they were facing a direction that allowed their white bodies to properly reflect the lowering sun behind me. The image of the white flock against the blue back drop was striking, bit it was really the prolonged movement in circles and repeated flashes of white disappearing and reappearing, coupled with the contrast between the silence and grace of their movement and the ambient conversation and city sounds of 1st avenue, that made this occurrence noteworthy. They circled for more than a minute, and as I watched their dance my immediate instinct was to Share.
I believe that instinct to share is not new, and if I were with someone at this table, I almost certainly would have pointed them to the scene and helped them to enjoy this beautiful sliver of life, but in the absence of a friend, I immediately reached for my mobile device. Between my iPhone’s camera, my Twitter Application, and my Facebook Application, I am so used to pushing out what I experience in life, that it was second nature to want to capture this moment and publish it. As I cycled through my sharing options, I realized that a photo wouldn’t really do this experience justice, “ok, how about video? But they are so far away, and the microphone on this thing isn’t going to work, and I have 270 degrees of perspective that it’s not going to capture, and the video can’t feel this breeze on my legs, this is not an experience that’s shareable.”
I put down my phone, and continued to watch the birds circle, thinking to myself, that “it’s okay just to have an unshared, personal moment of enjoyment.” In fact, I don’t have enough of these moments thanks to the share instinct that Twitter and Facebook have undoubtedly amplified in my mind. Just as I resolved to that point, I snapped out of my own head, looked around the café a bit, and saw a young woman who was methodically waiting tables, moving sugars from one table top to the next, picking up menus, washing down surfaces, and as she whisked by me, continuing in her routine, I grabbed her and said “Hey, look at that. And I pointed her to the birds, and directed her to watch as they changed direction and caught the sun in a way that would light up the blue backdrop white. She felt the breeze I felt, and experienced the contrast of their silent dance with the sounds of the city, and for 20 seconds, one other human being was able to experience 100% of what it was that I wanted to Share.
We watched for a bit longer, the birds fell below the building line, and then we returned to our respective lives. As I sit here now, I realize that as far as we have come in recreating offline human experiences through online products that harness the power of visual capture (photo and video), audio capture (microphone), textual description (text/blog/microblog), etc., everything that is shared and pushed through the social graph, and consumed or experienced by those with whom we share is some fraction of reality. If our goal is to truly Share ourselves, and more broadly the human experience as we live it, I find physical proximity to be a requisite, and almost urge the Sharing of experience with the strangers that surround you as a viable alternative to the sharing of diluted experience with those socially but not physically proximate. I am obsessed with improving how we interact with our local graph. It must happen.
P.S. (The birds came back, did my best to take the above photo)
Read Full Post | Make a Comment ( 4 so far )If you’re building for $1B, is “Focus” a Farce?
The word “focus” has been coming up a ton in my meetings lately. Like many product minded entrepreneurs, I have a ton of ideas about what Jumppost can become, and what we need to build to get there. As I begin to communicate those ideas to experienced folks around the table, I am getting repeated words of advice to “focus.” Today I met with one of our portfolio companies who’s product DNA was the main reason for our investment in them, and again I watched a conversation emerge around the balance between possibilities and focus on a single direction. I can think of at least 5 other examples where product minded founders are drawn toward rapid testing and iteration around a general direction as opposed to deep build around a more focused mission.
Conventional wisdom and the “smart money” seems to say that singular focus is the path to success in the startup game. When I started my first company, I eschewed conventional wisdom in the name of intuition, which was a strategy that worked occasionally, but more oft failed. I am now smart enough to know that I am not smarter than the composite operational advice of seasoned and accomplished entrepreneurs. As such, I have the word “FOCUS” written in digital permanent marker at the top of my to Google to do list.
That said, I find myself wondering if changes in the product development lifecycle are not giving birth to a new type of non-bootstrapped operation/execution that is more forgiving of experimentation at the expense of focus (think extension of the lean startup methodology). If it only takes two weeks to push a product that used to take 2 months to develop, does that not change the risk/reward around more loosely focused experimentation (especially in consumer applications where you are so heavily rewarded for tapping an unlikely/semi-predictable viral vein)?
I think it largely depends on what type of outcome you are shooting for. Is there an operator out there who is focused on highly experimental signal detection over linear progress that will discover the next viral consumer app? David Karp at Tumblr was building 4 other things when he decided to “focus” on just one. Facebook launched 3-4 distinct applications in the course of 4 months before running with the now behemoth. Twitter was a side project, etc. etc. etc.
If you are really shooting for the high risk, huge numbers, consumer app, how much resource/data is required to know if what your building is it or not? And if the answer to that is discoverable in short amounts of time through a team with low burn and efficient development cycles, is a deliberate “unfocussed approach” a more likely road to outsized numbers and a mega-viral product? (I don’t know the answer to this, but some of the smartest young founders I meet are intuitively drawn toward an approach that is inconsistent with the experience of previous generations of entrepreneurs. So either young founders always make this mistake and you can’t actively execute with an eye toward step function signals and virality, or a new style of early stage execution is emerging within consumer focused startups).
Read Full Post | Make a Comment ( 7 so far )NYT says Tech is Changing our Brains, but What About our Language?
Our language is changing. Words like “OMG,” “LOL” and “TTYL” that were spawned within a digital environment out of constraints translating verbal thoughts into online communication (the primary constraint being effort of typing), have somehow managed to cross the chasm from internet vernacular into physical world verbal communication. They have taken on a meaning that is distinct from the longer string of words which they were created to represent, and we have recognized them as enhancements in our person-to-person communication. They describe a concept, or feeling, or action that is more applicable to a given use case than any combination of letters and sounds that existed prior to their creation, and thus they have penetrated our lexicon.
The words “Text” and “cloud” have existed for centuries, but have taken alternate meanings in light of our relationship and engagement with technologies like SMS and Data. The phrase “text me” (or the use of text as a verb) alone, occurs in a frequency that I’m guessing has supplanted any other definition as the primary use of the word if we are measuring by volume utterance across contexts. “Cloud” on the other hand, as a reference to hosted data storage has penetrated small circles of tech-savvy consumers, but it may be 3, 5, or 10 years before general population’s concept of “the cloud” grows to the point where this usage will truly enhance our day to day experience in a way that is competitive with the value derived from describing a puffy white object that holds rain in the sky.
What I find fascinating, is that while our relationship with the internet and technology more broadly is redefining how we communicate with each other in it’s absence (changing our offline language structures), I do not see the same language change in our non-verbal communication patterns. Where did the “thumbs up” come from and how did it grow to represent approval or “good job.” How did a forefinger and a thumb come to signal “ok?” Was that a crossover from sign language which developed an application that was worthy of general population usage (like OMG, or LOL)? That would be an instance of a language created through a set of constraints (hearing impairment) penetrating a non-constrained environment. What about a wink or a smile, or any of the other physical gestures that countless online companies have tried to recreate on the web (Facebook poke, digital gifting, etc…)? We spend an increasing volume of our time with head tilted downward, eyes on screen, two thumbs on mobile device. Is there really not a set of non-verbal gestures that recognizes or applies to the fact that at any given moment 20-30% of the people we are surrounded by are engaged in this physical position and action? What about prompts for people to take this position when they are not in it?
The reason I ask how these physical gestures came into prominence, is because I see a new set of constraints in our communication for which adaptation of our physical non-verbal communication would strongly enhance our experience. Specifically, there is a set of use cases around real time mobile communications with people in physical proximity that requires multi-person synchronous or asynchronous engagement with an application or technology. The best way I can think of to open up that use case is to graft these applications to physical world non-verbal gestures (either existent or new). And what I don’t know is whether this type of communication is so slow to adapt that we shouldn’t even bother exploring it?? Anyone studied this? Isn’t linguistics a major in college? I’ll take you to good dinner if you can educate me here. And if you happen to be Product/UX minded, we can even splurge on dessert.
Read Full Post | Make a Comment ( 3 so far )How Many People Are You Consuming in a Day?
When thinking about product, I often find myself going down the path of trying to replicate/enhance offline behavior through software. Lately, I have been absolutely obsessed with the concept of productizing or at least enhancing offline, non-verbal communication. I’ve been thinking a lot about what people consume on a local level. It’s a question that is very important to our future at Jumppost and a question that is becoming increasingly interesting to investors and entrepreneurs as location based technologies change our capacity to segment users and build user experience by specific geographic parameters.
It is not surprising to me that much of the innovation we’ve seen in the last 12-24 months in the local space has been focused around the interaction between consumers and local merchants (restaurants, dry cleaners, etc.). If we map local consumption patterns, I would say that local goods and services are the second most frequent object of consumption in a consumer’s local experience. What I buy when I walk out my door definitely defines my local experience, and the things I consume in the largest volume have a great impact on my perception of my neighborhood, and as an extension, my perception of myself as a member of the community in which I live.
The only object(s) I see myself consuming that has a greater influence on my local experience, and as a derivative, my local identity, is the population that surrounds me. Although a very lightweight form of consumption, I have been trying to quantify the volume of people that I consume in a given day. I will call consumption any visual intake, and then value the volume of consumption by my level of engagement or interaction with each person I consume. I’ve been asking folks lately how many people they think they pass by or see in a given day in New York, and the answers are all over the place. Some people say 50, or 100, some say 500, and I personally would posit that the number is closer to 10,000. Of those 10,000, I think I probably consciously register 1000-2000, maybe I make eye contact with 500, and have some richer form of communication whether verbal or non-verbal (i.e. hold a door, smile, etc.) with 100-200.
What would a product look like that attempted to replicate or enhance the experience of human consumption at the 10,000 person level? I see elements of the answer in concepts like Chatroulette and Hot or Not, which take seemingly random consumption of other human beings, and then in both cases, push that lightweight (10,000 person) consumption down the funnel toward more active communication. But then I wonder if the product that will capture/reflect/enhance my consumption of local inhabitants needs to push our extremely lightweight relationship down the funnel into some more meaningful communication, or perhaps it is enough to simply overlay that consumption with some richer dataset. What if every person you consumed at the local level had a sign on their chest with a nametag? What would change? Would people say hi and push themselves down the communication funnel? Not sure. Maybe it’s not a nametag that people want. Maybe I’d prefer to see an image of everyone’s spouse/partner on their shirt? Or a floating sign with their occupation above their head? Would that enrich my local experience and consumption of the people that surround me in a way that would improve the quality of my local experience? Probably. I don’t have a ton of answers here yet, but super interested in wrapping with anyone who wants to think about this with me.
P.S. If you have a second to drop your estimate of the number of people you think you 1) consume, 2) communicate with, and 3) make eye contact with in a given day, please drop your answers and the name of your city in the comments.
Read Full Post | Make a Comment ( 8 so far )Product Genius
Product Genius / Designer
Craigslist is big. JumpPost is getting bigger. We’re fascinated by the economics around local supply and demand. We get off on the 2nd degree of our social graphs. We believe syndication of content will be followed by syndication of commerce. Elegant viral mechanisms are rewarded with firm handshakes. Cupcakes distributed to anyone who designs a flow that increases sharing. If my mom gets your design, you get a gold star. If my hipster girlfriend thinks it’s cool, despite the fact that we make money, you get a gold star. We’re just 9 months old, growing, generating cash, working in NYC out of killer loft space on W 13th between 9th and Washington, and having a ton of fun. All we want to do is delight consumers.
Here’s the setup. Doug rocks the Ruby on Rails, works across the stack, but let’s just say he’s no front end Picasso. Jordan loves product, but thinks in mechanisms not UI. We build and iterate quickly, and we believe that product and culture drive the company. We need help.
Enter new guy/girl:
– Fundamentally understands the way users interact with web based products
– Thinks visually, and creates beautiful, simple, engaging web products
– Breathes visual design and has the skills and discipline to rapidly create mockups and prototypes
– Doesn’t blink at HTML/CSS, and in our dream world has a command over Javascript, AJAX , JQuery, and cross-browser design (we know, if you can do all this, you can work wherever you want)
– Loves challenges, thrives independently, but is excited by collaboration
Bonus Round:
– Experience with Facebook Connect, Facebook Application Design
– Savvy on concepts of distributed UX, Widgets, Cross platform UX
What you win if you are the right fit for the job:
– The chance to work with a group of extremely ambitious, respectful, appreciative, and generally awesome young entrepreneurs here in New York.
– Ownership over your own projects and potentially the entire product if you rock
– Meaningful equity, competitive salary, and a complete willingness for you to impact our culture and company in whatever way you are capable
Check out our product http://jumppost.com/ (there’s more coming), check out our blogs (https://jordancooper.wordpress.com/, http://blog.dougpetkanics.com/, and then email jordan@jumppost.com with your resume/online presence and a line or two introducing yourself. If you were super early at Etsy, Kayak, Craigslist, Twitter, Facebook, Google, etc…that’d be swell. If we have to pay a recruiter to find you…so be it
Read Full Post | Make a Comment ( None so far )Offloading Human Memory to the Cloud
When I was young, my parents had two large brown photo albums that sat on our coffee table. We used to sit together and page through them, and they would point to washed out photos of my great aunts and uncles, and grandparents, and tell me who they were, what they were like, etc…we’d look at images of my 5 year old birthday parties and they’d ask “do you remember Hella? She was your Au Pair from Denmark?” Needless to say, the depth of perspective I was able to glean around my own early life and the past lives of my relatives was limited. The legacy of my grandpa, who I never met, is locked in paper documents now gone, my parents’ memories (now going), and scattered photographs and letters that have been stored through the years.
I think about what my grandkids are going to be able to see into my life and in many ways they will know me on a level that is impossible for me to know my own. The emergence of “life-logging” that has occurred over the last 10 years, across mediums, has begun to create a pretty comprehensive window into my existence. If you were to chronologically map my Facebook status updates, twitter updates, digital photos, blog posts, foursquare checkins, text messages, emails, venmo transactions, credit card statements, and then very importantly, do the same thing for everyone in my social graph and find the points of intersection between my footprint and those in my 1st degree social graph (which will happen, btw), you could write a pretty cohesive textual narrative of my existence. Almost an automated biography of who I was, what I did, what I cared about, who I liked, who I loved, where we went, what we did together, how I looked, what clothes I wore, who influenced me, who I influenced, my major accomplishments, my major failures, what made me special, how other people felt about me, what they loved about me, what they hated about me, and pretty much any other question one would ask when trying to get to know someone.
The interesting thing to me is that this shared digital backbone that runs across the human population, currently being enhanced and rapidly populated by the growth of mobile information capture, is not just enhancing the transference of knowledge and learning across geographies and socioeconomies in the present, but also across generations and time. In many ways, by participating in these forms of life-logging we are enhancing both our individual and collective memories. This freaks me out a little bit, primarily because of it’s implications around the importance of a physical body/presence [decreasingly fundamental to human experience], but I am absolutely fascinated by it.
Read Full Post | Make a Comment ( 3 so far )Memorial Day in StartupLand
It’s the Friday of Memorial Day Weekend. I was up at 6:30AM, working from my iPad in bed by 6:31, at the gym before 8, and at the office by 9:30. As I walked from the East Village to the West Village, I passed young professional after young professional carrying tote bags donning the words JPMorgan, KKR, etc… They all had their “summer weekend” outfits on. Sunglasses, newspaper poking out the side of their bag, boat shoes no socks, and a smile on their faces like they were going to coast through this Friday and “slip out” at 4 to catch the early train to the Hamptons. They walked with a cadence that said they’ve been thinking about this 3 day weekend for the last 2 months, and it occurred to me that the holiday weekend meant so much more to them than it does to me.
I remember when I used to work in finance (first job out of school), the briefest glimpse of a break from the grind and routine was a very big deal, and as I now watch what this holiday weekend means to these guys, it occurs to me that they are not really living. Every day I wake up and I am doing exactly what I want. Yes, I work hard. Yes, I am tired sometimes. But at the end of the day, I am not searching for a break from my everyday life. There is a fundamental problem with a life where a 3 day weekend puts a hop in your step that won’t return until Labor Day rolls around…
I walked by a 30 year old dude in a small BMW that said “I’ve been dreaming of this aspirational lease for the last 6 years in my cubicle,” and he had his “weekend bag” on the passenger seat, shades on, heading for the west side highway. I could see he was “sneaking out” Friday morning when all the other suckers were working a full day. It occurred to me that I don’t want to sneak out. I want to get to the office, write a blog post, focus on my to do list, get better, learn more, prepare, because all the work I’m gonna do while that guy is drinking Amstels by the pool of his shitty summer share is for me and my team. Not some 40 year old Managing Director who’s been in the Hamptons since Thursday morning at his place on the beach that this 30 year old guy would kill a 6 month old puppy to call his own.
So, I guess in some ways I pity that guy in the beamer who’s at this point probably at exit 63 on the LIE, salivating over the sign to Montauk Highway. Because Monday night is going to come around, and he will return to a life that I almost lived, that you couldn’t pay me $5 Million a year to return to.
Read Full Post | Make a Comment ( 24 so far )Fold often before going “all in”
Jon Steinberg wrote a post this morning exploring some of the parallels between business thinking and poker strategy. Much of his thinking focussed around changes in probability resultant from environmental (the flop) as opposed to operational (the player’s decision making) occurrence. His post reminded me of something I wrote nearly a year ago, in the midst of some very hairy career planning post Untitled Partners. In the height of macro decline, I found myself parsing through opportunities to work in VC, start a new company, etc… my approach, which is fairly unconventional during times of career transition, was to exercise extreme patience. My theory then, which is consistent with the career advice I give almost everyone who asks for it now, was as follows:
By definition, in our careers, we only get to make 5 or 6 “5 year decisions” in our lives. When faced with the prospect of unemployment, I think most people make these 5 year decisions around future direction quickly, in the midst of bias and incomplete data, in a sort of flight from uncertainty. In reality, much like in a game of poker, I believe the correct strategy is to let a ton of hands go by, watch the game, watch the players, wait for Aces, and then push your entire stack into the middle.
Below is a fairly unstructured account from the depths of a very intense poker game I was playing in late spring of last year:
Business and Poker 7/22/09
In my life I have won and lost surprising sums of money at the poker table. I don’t really play any more, mostly because I don’t have time, but when I did, there were 3 factors that affected my success, two of which were relatively constant and one of which was variable. My skill was relatively constant…I suppose with volume of hands played, pattern recognition and probabilistic intuition improved, but I was generally equally capable of winning every time I sat down at a table. Second constant was luck (or probability depending on how you want to look at it). With a large enough sample, good hands are evenly distributed across time played, hands that should win do win, etc…but in a small sample size, or an individual session as the case may be, these odds don’t always hold true…I recently heard some professional poker players refer to this concept of occurrence against odds as variance…so I will borrow it. The third factor, which was not constant, but in my opinion, the greatest predictor of my success or failure was my own patience…It takes tremendous discipline to sit at a table for 8 hours and not play a single hand…but commitment to playing winning hands is what allowed me to win more than I lost…sometimes I would get impatient, especially when I was younger, and played hands I shouldn’t have. Sometimes I won them, more times I lost them, but I craved opportunity to the point where even a 20% chance of victory was an opportunity to win, not a likelihood to lose…the real money was never won on flyers, or paying to see flush draws…it was won by waiting as long as it took to see winning hands, and maximizing my bets on those winning hands…
The last 3 months of my professional career has felt a lot like one of those 8 hour sessions…the kind where I’ve been tempted by 20% hands, but certain that they aren’t the right ones to play…My friend Andy suggested that maybe I am playing this game too tight…waiting for pocket aces to push my stack in, when Jacks is a really good hand worth playing…I can’t disagree that Jacks win more than they lose…the problem is Jacks aren’t even Jacks anymore. The rate of change in the venture capital industry, the startup ecosystem, the broader industrial landscape, and the global macro environment is so great that I don’t feel confident relying on Jacks right now…And it’s not just the rate of change, it’s the opacity of change that is commanding my absence from the action…the process of identifying opportunity for me is a combination of understanding the current state of things very well, seeing the direction of change, and determining the likely future state of things…as I try to go through this process, a major hurdle is the quality of data informing my understanding of the current state of things…traditional sources, such as media, academia, and industry thought leaders, don’t really have a clear picture of how there respective areas of focus have settled post meltdown…and the reason? Because things haven’t settled…still moving targets. Plenty of people are willing to admit that it’s too hard to see the future right now and how things are going to play out, but I’ve heard very few voices admitting that they don’t really see the present. A source of this opacity, I believe, is a reaction to loss in consumer (and enterprise) confidence. Everyone is so focused on affirming the security of their place in the future environment (both to outsiders and themselves), that they cannot stomach an objective present examination and communication of their own business, industry, country, etc…And I get that…there is an element of self-fulfilling prophecy when it comes to uncertain situations such as ours…those who claim to be the winners, gain traction and attention and support, and may become the winners for that reason, but everyone is not well positioned to emerge from this disruption to the context in which they previously existed and operated, and NOBODY has emerged because we are still mid-disruption.
Anyone who tells you they are playing 90% hands right now, likely had a 20-50% hand 18 months ago, that got a lot better when the flop came out “meltdown.” So I have some guesses as to where we are right now, and where things are going, and who is well positioned for the future…but they are 20-50% hands at best …and I don’t play 20-50% hands anymore…but shit…how long can someone possibly sit at the table and watch hands go by? After a certain period of time…your neck gets stiff, your legs and butt begin to cramp…and you need to either make a move or get up and leave the table…normally, I would get up and leave, but then there are these factors that are accelerating my need to play a hand: 1) boredom: I can’t stand not having something interesting to run at, things are getting too academic, not enough action; 2) money: I’m fortunate to have saved up some scratch over the years, so I could do this for a while, but the bank account is steadily declining…3) momentum: momentum in a professional trajectory is not to be taken lightly. Networks atrophy when not utilized. Action abstracts into theory, and the energy required to speed up a ball that has decelerated is much greater than the energy required to maintain a ball already in motion at desired pace.
You know a great place to sit around and watch a ton of hands go by without playing any right now? Venture Capital. Still collecting sweet management fees to eliminate factor #2 (money), no pressure to push the stack in on a hand (in fact LP’s would prefer it if you didn’t), and access to better data on the current state of things. So what’s the problem? Seems clear, go work in venture capital until you see a winning hand, and then leave and play it, right? Wrong..[truncated]
P.S. I ended up working with a VC for the summer, watched a bunch of hands go by, used that as a platform to find my “aces” in JumpPost, and only after did my gig with Lerer Ventures emerge…
Read Full Post | Make a Comment ( 4 so far )Where to focus when “dating” investors
One of the most important factors in the success or failure of a venture capital firm is their ability to attract and partner with entrepreneurs whose financings are competitive. These “top tier” entrepreneurs have either built an asset which is visibly valuable to the market (all investors) or achieved something in a previous endeavor which differentiates them from the average early stage startup. In this scenario VC’s are actually competing for the opportunity to invest in a company.
Last night I stumbled into a conversation between one of General Catalyst’s Limited Partners (LP) and a group of young entrepreneurs that broadly fit the bill of “top tier” founders. This LP is responsible for investing the endowment of a major university, and his job is to measure the efficacy and trajectory of the funds in which his endowment is invested. There are concrete metrics of success and failure in VC (namely returns and exits), but because those metrics don’t materialize for 3-10 years from the time a new fund is closed, LP’s must use softer metrics to measure the health of a fund. This particular LP, recognizing the importance of a firm’s brand in winning competitive deals, asked these 3 young founders the following question: “When you meet investors and are deciding who you want to work with, what factors influence your decision?”
In listening to their responses, many of which echoed the value propositions a fund would use to market themselves into a deal (i.e. team building, relationships, introductions, etc..), I realized that my view of what makes an interesting investor may be abnormal. To me, there are 3 things worth paying attention to:
1) Incremental data: as a founder, you are constantly making decisions based on incomplete data sets. An investor sits above your market, and through investments and involvement in companies adjacent to your product or market, or through past experience building analogous products or companies to yours, they represent access to a more complete dataset. With more complete data comes better decision making, so an investor’s ability to ethically and frequently improve your datasets is of real importance. If you’re building a company that is dependant or interfacing with the twitter ecosystem, there is an obvious advantage to having Fred Wilson or Jack Dorsey as investors.
2) Incremental thinking: When speaking with investors, my goal would be to communicate all of the important data I have as clearly and quickly as possible. More often than not, as a founder, you will have spent way more time studying and understanding your market than an investor, but I think the goal of getting to know an investor should be to learn how they think. Get them up to speed as quickly as possible, and then see if, based on a common dataset (or even better, with a common dataset, plus their incremental dataset), the investor identifies the 3-4 most important levers that impact your strategy and vision. Ideally, you will see eye to eye, but then you hope they will push you with new thinking and ideas that you would not have arrived at without their help. This incremental thinking and analysis will be something you can look for from an investor over the life of your startup. The more data you collect as you continue to execute, and as your market evolves, the more important it becomes to have an investor who will be capable and excited to help your interpret it when making directional decisions. (NOTE: I hear many founders talk about wanting their investors to give them money and then “get out of the way.” This is arrogant and an underutilization of a relationship that should be a major boon to your company)
3) Trust: I can’t stress enough the importance of trust in a relationship with investors. There are different levels of trust. First and foremost, you need to be able to look the guy or girl in the eye from whom you are raising capital and see that they are a good person. Ask yourself, “is this guy ethical? Do we share common values? Can I predict how he will react under stressful situations and do I trust that he won’t compromise our common values no matter what the circumstance?” If you can answer yes to that level of trust, the next layer of trust is trust that you can expose all the data you have without fear. Many founders feel like they have to “manage” their investors, share the good data, and deemphasize or mask the bad data. This feeling largely comes from a lack of predictability around an investor’s response to bad data. Personally, I would look for an investor who you feel comfortable exposing your weaknesses to. Trust them with the whole dataset and you can maximize the “incremental thinking” piece of the equation. Trust them with only a partial dataset and you reduce the likelihood of success. I guess I’m saying find someone you trust not to freak out when bad data emerges, because I can guarantee you…it will.
So to recap, look for data-driven thinkers with experience executing around dynamic and changing datasets in a fashion and cadence that is consistent with your personality and ideals.
Read Full Post | Make a Comment ( 7 so far )Lost In Translation
JumpPost is getting some nice love from the press. Here’s a sample of our coverage.
WPIX Eveneing News: http://jumppo.st/c3CZbQ (VIDEO)
New York Times: http://jumppo.st/cJ7lSS
NY Post: http://jumppo.st/bNbCp3
Gothamist: http://jumppo.st/aktNeD
Curbed: http://jumppo.st/aKa9AU
Generally speaking, I think the press is doing a great job of communicating our value proposition and story. We are supremely grateful for the attention and kind words.
One point of clarification: The NY Post said we are now raising $1 Million. That’s not true. I told Jennifer (who is awesome) that when we are ready to raise, we will likely shoot for north of $1 Million. We aren’t quite there yet. The time element of our fundraising goals was lost in translation. I only clarify because whenever I read in the press that a company is raising money, I interpret that to mean “the company has been in the market and is having a tough time raising money” (Foursquare type rounds excluded)
Not the case with JumpPost. We have not pitched a single investor for outside capital in our 7 months of existence. When we do, I probably won’t advertise it in the newspaper 🙂
A Parable for 3rd Party App Developers
It used to be that a startups were islands. At the onset of a venture an island consisted of a sandy beach, a jungle, 2 founders, and 2 computers. At first the founders, and then all those who came to work on the island (employees, management, investors, etc..) were focused on building the island into a city the size of Manhattan. Everything that was built on the island was 100% owned and operated by the island. Everything they learned, and everything they did stayed within the island. The reason: in order for any new island to become Manhattan, it had to compete to attract millions of people to its population (users/customers). In order to maintain an edge over the competition, islands did not open up their learnings (data) to new and competitive islands.
The islands that most quickly developed (built out indoor plumbing, public transportation systems, etc)…became the most desirable islands to live on, and their populations began to grow. The first island with a public transportation system began growing fast. As its population grew, the demands of inhabitants began to outpace the rate at which those working to build the island could develop solutions. Inhabitants demanded a hospital, but the founders and employees of the island were still building roads. The smart founders realized that they could not build a hospital fast enough on their own, so they sent a ship to Manhattan, found the guys who built Mount Sanai Hospital (3rd party application developers), and brought them back to the island to build one (3rd party applications) that would be owned by the hospital builders and not the island. The founders and the island supported the hospital builders with local knowledge (open API and dev support), the hospital opened, and the inhabitants were happy. Because they were so happy, inhabitants began to call their extended friends and families on other islands with invitations to come join the island with a new hospital. The island’s population doubled in 2 months, the public transportation system generated 2x the revenue it did pre-hospital, and the island flourished.
A neighboring island, who had not yet built a public transportation system, but that had the best local fruit of any island in the sea, saw the success of this new hospital, and inquired as to whether these magic hospital builders would come build a hospital for them. The hospital builders visited the island, saw that there were 1/10 the inhabitants on fruit island, and explained that they were concerned about their ability to operate a profitable hospital on an island with so few potential patients. The fruit island founders explained that the fruit on their island was going to attract 10 times the inhabitants of public transportation island. The hospital builders, lacking a competitive project at the time agreed to take on the new project, built the hospital, and fruit island’s population grew on a similar trajectory to public transportation island. They island sold 2x the local fruit, and they flourished.
All new islands began to perceive the value of having a hospital (3rd party application), and the hospital builders all of the sudden had more islands calling then they did time and bandwidth to complete the projects. The builders decided to prioritize the projects by which islands had the most inhabitants (user/customers) that would become patients the day the hospital opened its doors. These islands would be the ones where they could recoup their development costs the most quickly. As such, it became harder and harder for new islands to build hospitals, and thus harder for new islands to attract inhabitants.
Public Transportation Island saw a symbiosis in its relationship with the hospital builders, and decided to invite school builders, power utilities, and pretty much any builder from Manhattan to come and build out businesses and infrastructure. All visiting builders could own and operate their projects on top of the island. This time, every other island saw Public Transportation Island’s move, and now understanding the benefits of this concept, immediately extended the same invitation. Public Transportation Island had the largest population, and so had no problem attracting these 3rd party builders, and the question became: how do less scaled islands compete to create the necessary infrastructure to attract inhabitants despite the scale of Public Transportation Island.
Promises of future growth, like that of Fruit Island’s to the hospital builders, became a dime a dozen, and then a group of visionary islands had a break through. They said, “why do we ask these builders to come build our island, create the infrastructure that will help us scale our population, but still consider them visitors and not a part of our island? We believe in cementing our relationship with those that help us grow. From this day forward, those builders who build our hospitals and schools will become owners of our island, a part of our island, and enjoy not just the benefits of their own project’s growth, but the benefits of our entire island’s growth.
Public transportation was not prepared to match this offer because they were already so large, and builders started to leave Public Transportation Island, to build for islands that recognized them as true members of the community…The visionary island chain was able to attract builders who gave up near term revenue opportunities on Public Transportation and other scaled islands, for a piece of the visionary island’s growth (stock options), and this is how a small island was able to grow faster than a scaled island.
Lesson: It’s time for platforms to think of 3rd party developers as team members. Carve out a piece of the rock, reward those who create the most value in your ecosystem with equity in your platform…we understand that Twitter and Apple need to make money, but let the companies on who’s back you built enjoy some of the upside as your platform scales. If you don’t, they’re going to start scaling other environments to supplant you.
Read Full Post | Make a Comment ( 3 so far )Apple hit’s “RESET” on the LBS market
By now you have probably read Dave Mcclure’s post positing that Foursquare will lose to Facebook in the Location Based Services race. He argues that applications like Foursquare and Gowalla are not capable of scaling fast and cost effectively enough to beat out larger platforms like Facebook and Google, and delivers a sobering message to some of the more hyped early stage companies in the venture/startup community. I agree with Dave’s assertion that Foursquare is going to have a hard time winning here, but for a completely different reason than any he suggests.
I’ll start with the assertion that the location space will not be won or lost at the consumer application level. I was talking with my partners at Lerer Ventures a few weeks ago about whether or not I’d invest in Foursquare at the meteoric valuations being thrown around in the press, and my answer was yes…but not because I thought it was such an amazing consumer experience that it would grow to 400 million users and become the next Facebook. My thesis was that the first company in the “check in” space to build a critical mass of users and check ins would expose it’s API to 3rd party developers and become the default platform on which all future applications wishing to leverage the all-valuable location data point would build. Location is such a clean and highly monetizable dataset that I believe many applications will wish to use it as input in their services, and I thought Foursquare stood a decent chance of being the provider of this data, very similar to how Facebook has become the default API on which every developer wishing to leverage the “social graph” will build. Fred Wilson recently wrote a post which in my opinion correctly stated that in order for a platform to truly dominate, it must be successful in attracting 3rd party application developers to build out the surrounding ecosystem. Foursquare had the potential to do this.
I use the past tense in light of a recent announcement made by Apple, which I believe was largely overlooked by Mcclure, and to be honest I haven’t really seen anyone talking about what I perceive to be an overnight and massive disruption to the entire “check in” market. Foursquare and other “check-in” based applications were working toward the most interesting location dataset I know of, but even it is still quite incomplete. In the absence of “persistent tracking”, which would be a continuous line of a given users movement through the physical world, “check in” companies began to collect multiple location data points per user. If you mapped those data points, it would look more like a constellation than a smooth and continuous line. Apple just announced that with their new operating system, applications will be able to engage in “persistent location tracking.” Basically, they opened the door for any application that successfully acquires a database of “smooth lines” to supplant Foursquare as the default API on which other application developers will build. If I am a 3rd party developer, I would much rather build atop the “smooth line” database than a few spotty check-ins per user, and the “check in” is not a mechanism that was designed to capture “smooth line” data. If the LBS market were a game of Contra, Apple basically just hit the “RESET” button when Foursquare was on Level 7, and now Foursquare, like Facebook and every other platform chasing this attractive dataset, is back to “up up, down down, left, right, left, right, B, A, B, A, Select, Start.” Game On.
P.S. If I have misunderstood the implications of Apple’s announcement, please feel free to bombard me with insults.
P.P.S. Now that I think about it, if I’m Foursquare, this development would be an awfully good reason to take the early exit offer from Microsoft…
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Jordan Cooper's Blog: startups, venture capital, etc... 