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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 )Why We Connect
STOP: Play this song in the background while you read this post http://bit.ly/i3GYea
What is connection? Connection is an absence of solitude. It is a recognition, of varying depths, that we are not in this alone. It is not just a reminder that we can interact with others, but also a reminder that we are the same. That there is someone else out there who is going through this mind blowing experience of being human, and somehow the fact that this bizarre array of emotions and thoughts and events and actions is not completely unique gives us comfort, that we are somehow doing it right, or that we are normal, or at least that we can handle the next unpredictable turn that is upon us, because the guy to our right, or the person across the street, or our friend, or our mother, has experienced some aspect of our future and lived to breath another breath.
In connection comes a communication of experience that helps us to see where we overlap with the rest of the world. The closer our connection to another human being, the more of their experience we are able to observe, at closer range, with less filters. For most people family is the tightest connection we experience to other human beings. We are able to check the scariest parts of our experience against those of our family. We gain exposure to issues of health, emotional distress, financial pressure, and even mortality, all up close and personal because these tight connections communicate their own experience to us fully and without fear of judgment or disconnection.
One connective sphere out from family we have friends, who share a subset of their own experience, and remind us that we all are searching for love and success, that we all make bad decisions and have to pay for them, that it feels great to win a basketball game, and that watching a family member die can affect our professional performance. They are a barometer that communicates not only their experience, but an analysis of their experience that is incremental, educational, and softening to our own jarring life.
Push out further, and we enter the realm of loose ties and connections. This sphere can be approximated by our 500 Facebook connections, or even our 10,000 friends of friends. Our connection to these people is distant enough that their experience is heavily filtered when communicated to us. We only see the representation of them that they wish to project to the external world, but we are close enough that we ingest it repeatedly through sheer proximity. Although the communication is filtered, through repeated exposure we are still able to relate and analyze their experience relative to our own. We see what they wear, how they move, who they move with, and the various other attributes of their external profile, and yet again we are able to find overlap and similarity in these distant behaviors with our own.
Connection keeps us sane when faced with the aspects of our experience that are difficult to understand. “Where the hell did we come from?” No idea…this started to freak people out, and then religion comes along and institutionalizes a connection to others who are grappling with the same issue. It is not so much the answer that religion provided, as evidenced by the multitude of beliefs to which people subscribe, but rather, religion provided a recognition of the question that reminded people that they were not alone in this common human challenge. Imagine if I walked through life believing that I was the only one who was asking the question of human creation, or that I, alone, was grappling with the concept of God. That would be maddening, alienating, and potentially debilitating.
One of the oldest forms of connection that I can think of is our connection to our local community. Trends of cohabitation and urbanization reflect a recognition that the people who surround us can satisfy much of our connective need. I share space with people in my neighborhood and experience an extremely lightweight connection that in many ways contributes to my sanity. I am sitting in this café right now, writing this post, and the girl next to me is studying for a biology exam. I see the diagram of a heart and the path of blood into and out of it, and am reminded of my own high school education. I see her gaze away form the page, and we share a common affliction known as “distraction.” This observation of her is an extremely lightweight connection that reminds me that distraction is normal, and that I do not need to freak out just because I cannot focus for 2 hours at a time. I understand my own experience through the observation of my neighbor’s.
Various discovery and communication mechanisms have been developed to help people map, discover and strengthen their connection to the different groups I have touched upon in this post. I believe the local and hyperlocal experience has not been mapped, so we’re going to do it at Hyperpublic. As much as I hate to use the catch phrase, you could say we are building the “local graph.”
Read Full Post | Make a Comment ( 1 so far )Startup Networking Pro-Tip: How to Exit a Conversation
Last night I went to Charlie O’Donnell’s Shake Shack 3 event. As I bounced from person to person, as is the protocol for networking events like that, I stumbled upon a few very creative solutions to an often awkward occurrence. What do you do when your conversation with someone has expired, and you want to go talk to other people? It’s very difficult to gracefully say “okay, I’m done talking to you because I’d prefer to be talking to someone else, I don’t know who, but I’m going to walk around because I’m sure there is something better than prolonging this conversation.”
So, the most creative exits to an unproductive networking conversation that I heard last night were:
1) “I’m going to circulate a bit, very nice to meet you”: This came from a 60 year old super experienced guy. There was something about the word “circulate” which was unapologetic about his purpose of doing business at the event, and yet classy and not at all ingenuine. Left me feeling great about being “event dumped.”
2) “there are a couple of people here that I really want to hunt down”: Again, recognizing explicitly a purpose beyond socializing, this exit said “it’s not that I don’t think you’re interesting, I just have a very specific goal”
3) “I am on a mission to find [explicit name of person]”: Same gig as above
Personally, I tend to wait it out until someone else comes over, taps me on the shoulder, and I sort of “break off” from the group I’ve been talking to. It’s a much more passive style of moving through an event, where I probably don’t meet as many new and interesting people as I could, so I think I am going to take a page out of these creative networkers’ books, and be a little more active about how I move through a crowd in the future. Had I done this last night, maybe I would have met the one person I was hoping to see there: Marco Arment, you are going to be my [explicit name of person] at whatever the next thing I go to is. I am slowly becoming obsessed with Instapaper.
Nothing earth shattering here, just some reflection on being thrown into a 300 person professional pinball machine.
Read Full Post | Make a Comment ( 7 so far )Back to the Basics
Yoga has always been a practice that I dive into and out of depending on my state of mind. I will go every week for 3 months and then not once for 6 months. I first discovered Yoga when I was 23 years old and a freshly minted banker on Wall Street. The transition from a life of freedom and nourishment in college, to one of shackles and pressure was weighing on me to the point where I was modeling in my dreams and waking up stressed and exhausted. Days began to bleed together and I decided that I needed some escape from the job. Every morning I walked by a Yoga studio in midtown on my way from the subway to the office and one day I decided to wake up extra early and try it out before work. What I found was that most of the practice was about shedding context and devoting 100% of your attention inwardly to yourself. I would leave that class remembering that I existed independent of the loudest temporal influences on my time and mindshare, and that was super helpful in grinding it out.
Aside: I can’t discuss my experience practicing Yoga during that year without mentioning a short lesson on why exercise with colleagues is a risky pursuit. A few months into pre-work Yoga, I began to evangelize the merits of this practice to my fellow analysts at work. Everyone was experiencing the same pressures, so I would try to wrangle them into coming with me in the morning. I used to sit next to this incredibly sweet girl who was sort of soft spoken, extremely fair skinned, and easily flustered into a tomato red state. She finally agreed to join me one morning, and we met at the studio to begin her discovery of the calm that I promised. In a class of about 10 people, she lined up next to me and we began to move through the instructions of our teacher. After about 10 minutes the teacher called for us to spread our feet into a standing straddle, and bend at the waste to touch the floor (effectively propelling our butts into the air). At this juncture, my coworker let loose one of the loudest and most apparent farts I have ever heard in my 28 years on earth. There was no ambiguity around the culprit of this act, and she wore her guilt on her face to the tune of a beet red complexion and a countenance of pure humiliation. The next 50 minutes were incredibly awkward, she raced out as soon as the class ended, and we never spoke of it again. Needless to say, that was the first and last class she ever came to with me.
Anyway, back to business. After probably a year long hiatus, last night I dropped into the 9:00PM Yoga to the People session on St Marks between 2nd and 3rd. The teacher said something during the class which I found particularly interesting: “There is more power in harmony than there is in chaos.” I found it interesting because it was not a trite statement that “chaos is bad and harmony/calm is good,” but rather a recognition that there is, in fact, a real power in chaos. I think in a world of hyper-multitasking and constant frenetic execution, my natural inclination is actually more toward harnessing that chaotic energy into results, but her words reminded me to check back into harmonious (or calm) execution more often than I do. I think there is actually a place for both in the life of an entrepreneur, and it is worth becoming proficient in both styles. The New York Times has been running a series on how technology is changing our brains (MUST READ) under the basic thesis (with scientific support) that with increasing volume of data stimulus we are rewiring our brains toward attention deficit and away from focus and sustained attention. Similar to my Yoga teacher’s call for an attention and practice toward harmonious execution, I have begun to control the amount of twitter/SMS/Email I engage with, in an effort to strengthen and remain facile in both the style of execution that technology is mandating I master (hyper-multitasking), as well as the one it is slowly conquering.
If you feel like the startup game has got you wrapped up in context (which it probably has), drop in to Yoga to the People. It’s donation based, so even those bootstrapped to the teeth can enjoy.
Read Full Post | Make a Comment ( 4 so far )When The Dragons Emerge
I feel like partnering with an investor is a bit like searching for your dragon in the film Avatar. There are many dragons out there, all of which are capable of connecting to your strange hair braid or whatever that thing is, but there is only 1 dragon that perfectly complements you. You have to approach a bunch of dragons, look them in the eye, most will turn away, but one will get a crazy look in their eye and decide that they want to tangle. At that point, you need to fight them for a while, deflect their various attacks and attempts to kill you dead (they are just testing you), and then, if you survive the tussle, and earn their respect, you’ve learned how each other operate, and you can form a bond. That bond is a partnership. From that point forward, you communicate without effort, and fly or fight through your market as a team.
One of the most important things to look for in finding your dragon is a common language. You need to find investors who can process your thoughts in the language that you think in. If all of your ideas, learnings, and plans need to be translated into a different language that your investor thinks in, you are not going to benefit from the full brilliance or value of that investor. Something will be lost in translation, and re-translation when they guide you in their framework and you need to input their guidance back into your own. Frictionless information flow between you and your investors (or advisors for that matter) is key to maximizing such a relationship.
If you are building a syndicate of investors, not every member of the syndicate needs to have this frictionless transmittance. Different investors can offer you help in various facets of your business, but your key investor, or the guy/girl who sits on your board, or maybe a non-board member but your closest strategic confidant, must be someone who speaks and thinks in the same language as you.
Read Full Post | Make a Comment ( None so far )It Takes Confidence to Become King, but Humility to Stay King
I was talking to a very close friend yesterday who was pretty down, having fallen short of his own professional expectations of himself. He is an extremely high achieving guy, years ahead of himself in the professional realm, and like many folks in our world, he expects to crush any challenge in his path. After 4 or 5 months trying to turn a business around, the numbers aren’t what he hoped, and we talked about how to deal with professional disappointment.
Dealing with disappointment and executing both personally and professionally through it, is one of the few skills that I don’t think you can shortcut at a young age. For the most part, I like to believe that a brilliant 25 year old is capable of performing at the level of a less brilliant 35 year old, but there are some parts of business that require an emotional maturity that may only come with experience and time.
Specifically related to disappointment, what I’m starting to realize is that it is IMPOSSIBLE to never fuck up or fall short. If you don’t experience any disappointment in your professional pursuits, you are playing it way to safe.
The first time or two that you disappoint with a lot on the line, it feels like the end of the world. In fact, sometimes the consequences can be quite serious. Jobs are lost, money is lost, respect is lost, and without the benefit of 10 or 20 years seeing a healthy sample size of disappointments and how they pan out, those consequences are extremely hard to work through. As I approach the 6th year of my professional life, I think I am getting a little better at dealing with disappointment. My guess is when I’m 40 I will know exactly how to deal with it.
Disappointment is a part of life, no matter how good you are or how good you will become. We do our best to prevent it, and hopefully we achieve more than we disappoint, but with disappointment we also develop humility. It is this humility that allows us not to be shocked by future disappointment. Without shock, we become better at executing through the bad, and toward achievement. I’d be interested to hear from older guys/girls, but my sense is great operators learn over the course of their careers how to address disappointment effectively.
Read Full Post | Make a Comment ( 2 so far )Thoughts on classifieds, Craigslist and local
For no particular reason, I’ve been thinking about a question. If you wanted to become the next Craigslist, build a better matching mechanism between local supply and demand, and present local sellers, whether they be individuals, or independent service providers, with a better vehicle for finding buyers, what would you do?
1) You wouldn’t try to take down Craigslist out of the gate. Craigslist doesn’t topple in 12 months, craigslist slowly dies over 10 years. As long as they represent a high volume of local consumers, they will attract local suppliers.
2) You would build your UX under the assumption that your users will touch both your product and Craigslist in the same search for a local supplier or local buyer. You’d respect the incumbent.
3) You would focus on amassing an audience of local consumers that is large enough to provide incremental selling opportunities to local suppliers not achieving 100% success through competing channels (read: all local sellers)
4) You would develop a toe hold in a single vertical, and then start “inviting” that audience down adjacent vertical funnels (Craigslist started w local event listings)
5) You would buy traffic. I can’t see anyone becoming liquid fast enough without paying for audience.
6) You would take that bought traffic, and make sure each purchased user perpetuated your product beyond his own consumption.
7) You would figure out what socializing listings really means, and what incremental value consumers get from engaging their graph in their own local buying and selling.
8) You would figure out how to promise local suppliers higher close rates with less work.
9) You would create a user experience that engages local consumers, not only at the point of buy/sell, but across points where they seek to engage with a local population (whether they seek to communicate, publish, ask, answer, meet, watch, etc…that population).
10) You would recognize that buy/sell is not just buy/sell, but also search/find, speak/speak, give/take, trade/trade, and any other iteration of match between two complimentary local needs.
11) You would not require local buyers or sellers to repeatedly return to your destination. You would capture and categorize whatever they were buying and selling, go out, find the other half of their match where it existed, and deliver their match to them wherever they are engaged online.
12) You would not try to “own” your users. You would certainly service your users and build a relationship around that service, but you would allow anyone who is helping local buyers and sellers get together to pull your data into their environments. You’d be happy when one of your local sellers found their buyer, independent of who delivered it to them.
13) You would build a brand that focuses on the people behind the listings. A neighborhood or city is not defined by geography, but by the people that inhabit it.
Not that Jumppost is doing this, we are JUST focused on local real estate. Seriously. Jumppost.com is not just a revenue generating local funnel that pays back in 30-45 days and allows us to cost effectively buy a large local audience (see #5)…
If you want to change how people in a local environment find each other based on need, you should come work with us. jordan.cooper@gmail.com
Read Full Post | Make a Comment ( 4 so far )Privacy Going the Way of the [Finch]
I’ve been thinking a lot about the debate around privacy these days, and it occurs to me that the very concept of privacy is at odds with a much more powerful evolution in our species which I would broadly call systemic functioning. There is nothing new to the idea that humans are social creatures, and as I look over the course of our development as a species, individuals grouping together first in the form of family units, then groups of families cohabitating, all the way up to and through urbanization, it becomes clear that our ability to preserve and perpetuate our species, compete for resources, and generally further ourselves relative to competitive species within our environment is vastly enhanced when we work together.
Over time, as we have grown to become more collaborative, our duration of life and rates of reproduction have grown in kind, and there is undoubtedly a correlation between our advancements as a population and our progression to functioning in systemic ways.
Wikipedia defines a system as:
“System (from Latin systēma, in turn from Greek σύστημα systēma, “whole compounded of several parts or members, system”, literary “composition”[1]) is a set of interacting or interdependent entities forming an integrated whole.”
It used to be that our species operated in groups of small systems, and then advents of transportation mechanisms initially (wheel, boat, car), and the communication mechanisms such as the telephone began to connect these small systems and allowed them to become part of a larger system, where learnings, advancements, and general best practices for preservation and perpetuation of human life were shared across these small systems. Still, data was largely transmitted physically or verbally, and was not easily disseminated to all members within these small systems. In essence, there was still a massive chasm between the volume of data one member of a system in Mongolia learned and knew, and what another member of a separate system in Peru could leverage and implement.
Obviously, with a common backbone which enables all individuals to push data into and pull data out of a shared repository (the internet), our species has largely become networked into one giant system, sharing learning and data in a way that has already and will undoubtedly continue to enhance the metrics around preservation and perpetuation at the species level.
Given this trajectory, there is no evolutionary advantage to having an individual human being value their “privacy.” The idea that I am not a part of the system is not an idea that is “selected for” in a world where our species thrives and advances at a more productive rate as one collective system. Granted, as we, and Mark Zuckerberg, push the limits of this movement toward one singular and fully networked system, we will continue to come up against small backlashes (hi diaspora), but the general curve is going in a single direction both within the existent population, but even more prominently in new and future generations that are coming down the pipe.
Privacy is not just less important to younger generations, it is actually at odds with our advancement as a species. Younger generations don’t consciously view it this way, but that concept is digested by them through the everyday value they extract from parting with it.
My prediction is that 100 years from now people will look back at the concept of privacy as we know it today and perceive the societal and individual value placed around it as an absurdity.
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 )Experimenting on the Edges of Your Product
The other day I had the pleasure of spending some time with Joshua Schachter. Over the course of our conversation, I grew to really appreciate his perspective, to the point where I sort of opened up the kimono about the future of JumpPost and the vision that we are testing. What most see on our site today is a small fraction of the vision we are working toward. As I shared more of our thesis, it came out that he and I have been thinking about a very similar problem and some very similar potential solutions to that problem. As we rifled through the various concepts that could revolutionize online classifieds as we know them, we arrived at a point where I asked him the following question:
“so, you see how many untested assumptions we are making about the future of this market and what it needs. The product we’ve built so far has taught me 80% of what I’m going to learn from it, and now my question is how would you start building these new datasets while preserving an existing product that is growing and poised to generate nice cash flows?”
Internally we have been hesitant to run tests within our core product of JumpPost.com, for fear of confusing our community who is just starting to understand our existing value proposition. We were not sure if we should introduce new features or products under our current brand, or perhaps build independent micro-products to collect data that could inform the direction of the mother ship. Also on the table was the option to delay testing these new learnings and assumptions altogether, in the spirit of dedicating 100% of our effort to optimizing our core product and realizing its full potential in its current form.
He told me a story about how he once built 15 prototypes around a concept he was trying to figure out, before finally settling on a long term direction for the project. His advice was to build lightweight tests for all of our assumptions, in separate environments. The reasoning behind his advice was so smart. He said, “when you’re building a product, you come to realize that there are some fundamental design axioms, where you must choose to either go right or left. Rather than arriving at a compromise between the two, use these independent tests as an opportunity to crank the amplitude in either direction to 11 (on a 1-10 knob).” I had been talking to him about looking for signals (or blips) in our dataset, and he explained that when you pick a direction and max out a product based on one direction, you get very clear signals as to whether that was the right direction or not. These signals and learnings can than influence the direction of your core product, even if the appropriate amplitude for consumers within the mother ship is a 5 or 6 in that direction.
I loved this advice. It seems quite logical to me that we are at a point where we can either push our early product onto the market, or we can listen to the market and push it on our current and long term product vision. Many of the learnings we’ve acquired in the last couple months are around axioms that were not even a part of our original consideration for JumpPost. They have broadened our ambitions and exposed weaknesses in our market that we did not conceive of initially. Joshua’s advice helped guide us toward a plan for collecting a new data set not available through our existing product. It makes total sense to me. Why limit your decision making to a single silo of deep data and a ton of superficial market data when you can test the edges and limitations of your deep dataset with complimentary/adjacent product mechanisms?
If anyone has experiences or lessons learned either supporting or contradicting this strategy, please share.
Read Full Post | Make a Comment ( 4 so far )So You Signed a Term Sheet? You’re Not Out of the Woods Yet
The first time I raised capital, I remember negotiating my term sheet with Rob Stavis at Bessemer Venture Partners (who, btw is as straight shooter and transparent a VC as I know). The deal they gave me was completely clean and standard, but as a first time entrepreneur I scrutinized over every word of that term sheet, to make sure I understood exactly what I was signing and agreeing to. Once I got comfortable with every sentence in the term sheet, I signed it, and waited anxiously to receive their signature back. When it came, I breathed a massive sigh of relief, turned it over to our lawyers, and thought that I had successfully completed the negotiations around our raise.
What I didn’t realize, and what I think most first time founders don’t know, is that a term sheet is simply a guide that lawyers work off of when creating the final documentation around a financing. When you blow a 2 page term sheet up into 50 pages of documentation, it turns out there are a ton of specifics which are not addressed when a founder and investor first agree on a deal. These specifics, when addressed in the docs, can fall in the interests of an investor or a founder, and thus the negotiation you thought you were done with opens up for a “round 2.” This “round 2” can be awkward, because emotionally, you have already agreed to a deal and “partnered” with your investors. Everyone is happy and excited, and then you are once again put back on opposite sides of the table.
What I learned from Rob, was that negotiating a financing isn’t about winning and perfectly optimizing for your interests. It is an exercise in reasonability. Sharp elbows and hard lines on small (albeit important) points are a waste of time and good will between you and your future partner. Once you agree to partner, your collective goal should be to complete the deal in a way that is even, not self interested. My advice: don’t sign a term sheet with someone who you don’t think is capable of going through this exercise in reasonability with you.
P.S. JumpPost is looking for a legit UX/UI designer/developer for a small project. holler
Read Full Post | Make a Comment ( 1 so far )Seeding a Community…JumpPost’s Playbook
Seeding a community or marketplace is a challenge that many consumer internet companies face at the onset of a launch. You build a product, design an experience, but without a bit of liquidity in the platform, early users don’t get the utility they deserve. As such, this may seem like a very simple concept, but founders need to rely on their close friends and friends of friends to be the earliest users and evangelists of any product.
Even though we expect our friends to be our earliest advocates, you can’t just rely on them to “spread the word.” It’s not that they don’t want to help, but more that people are busy, and they don’t realize how important and valuable their early participation is to your success. Further, without a bit of structure, or a clear ask and guide to help them promulgate your product, your friends won’t know exactly what they’re supposed to be doing.
Late last night, we “pre-launched” my new company, JumpPost. I say “pre-launch” because we are only collecting inventory, and not exposing the “demand/browse” side of our platform for a couple weeks. I sent the following note to a small handful of people who I know would do just about anything I asked of them. In less than 12 hours, it’s amazing to see the level of response and activity that they have engaged in on JumpPost’s behalf. I will report back with more data on the success of this “seed strategy,” but feel free to take this playbook and implement it should you be building an early stage consumer internet product.
Email to close friends reproduced below:
Subject: the time has come…JumpPost.com
Imagine spending 6 months preparing to open a restaurant, building out the space, hiring the people, designing the menu, and on the day you open your doors, you have no food to offer your customers.
JumpPost.com has built out the space, hired the people, designed the menu, and now I need your help to make sure we have enough food when it comes time to properly open our doors.
Today, if you visit JumpPost.com, you will see we have revealed a portion of our site (yes, plenty of bugs…be patient w us). The purpose of this early site is to empower you, our closest friends, to create our first listings. I have one simple ask: if you are a renter moving out in the next six months, create a listing right this second.
I will now share with you the reasons why you should create a listing
1) I am calling in a favor. Create a listing on JumpPost for no other reason than because I am asking you to. It means everything to me and will take you 2 minutes.
2) If you demand a second reason, fine. Doing so will likely earn you $500 for almost zero effort.
3) If you demand a third reason, fine. When we open up our full site, your listing will be featured ahead of everyone else’s.
My second (i know i said “one simple ask”…i lied), and more important ask is that you become a voice for our product. I challenge and beg that each one of you personally recruit 10 of your friends to create a listing. You are not asking them to spend a dime, simply giving them the gift of a $500 payday.
The time has come for me to rely on my closest friends. As you all know, JumpPost is building a business to empower consumers and kill brokers. Please, become our early users and evangelists. Join us. Let’s [explicative removed] do this.
Oh, and as a special thank you for your efforts, anyone who can send me a list of 8 or more people they signed up to the site is welcome to join us at our “Peter Luger’s Launch Dinner.” Date and time TBD, but we’d love your help in celebrating once we open up JumpPost to the world.
Note to blog readers: The Peter Luger’s dinner is a simple calculation which estimates the value of an early listing based on assumptions around conversion of listings into revenue. Basically, I’m saying I am willing to spend ~$100/8 to acquire a supply side listing pre-launch.
Read Full Post | Make a Comment ( 4 so far )Newsflash: Your Startup Is Not In The Playbook
A former investor of mine, Fabrice Grinda, recently wrote a blog post enumerating the reasons why businesses that are started with two co-founders are more likely to exit big than are those with a single founder at the helm. That line of thinking seems to be the common sentiment at least in the venture world, and one which having seen more than a thousand founder/cofounder setups while on the venture side, I think I would tend to agree with. When I started thinking about leaving General Catalyst to start my first business, I mapped out a progression of events necessary to take the plunge and build a company. The planned progression of events went something like: 1) idea, 2) diligence, 3) cofounder, 4) quit job, 5)raise capital, 6) build product, 7) achieve seed stage milestones, 8 ) raise more capital and scale.
This play book is sort of a standard one that I had heard many entrepreneurs and investors tout, and not having been through it before, I largely executed according to plan (minus 7 & 8 that is). What I’ve learned, however, is that someone else’s play book is only a guide, and to execute against it without flexibility and recognition of your own context/data is a mistake. Nothing in startup world happens exactly as you expect it to. Sometimes a recognition that you need to write your own play book can prevent what I’ll call “inorganic progress.”
“Organic progress”, to me, is when the events in an operating plan occur as the result of successful completion of tasks/goals/learning on which that new event is dependent. In other words, progress that occurs naturally or without force. An example of organic progress would be when a management team builds a product, puts it out to consumers, people buy this product, and THEN they design a customer service program to support their newfound customers.
“Inorganic progress”, then, would be occurrence of an event ahead of completion of the tasks/goals/learning on which that event is dependent. Or, forced progress. The company builds a product, puts it out to consumers, and then designs a customer service program in anticipation of its first customers…although it may seem that management is getting ahead (or making progress) by finishing their customer service design quickly, they are doing so without the data/learning of customer feedback, and thus an event (the customer service design) occurs before it’s antecedent (inorganically).
It has been my experience that when progress is forced, although potentially forward moving from an aesthetic sense, this is progress in a wrong direction. The customer service design, when created through inorganic progress, will not address the needs of the company’s customers, thereby creating an operational inefficiency that would not have arisen had management allowed this piece of progress to develop organically.
As it turned out in our last company, steps 1-4 were in line with the concept of organic progress. My immediate instinct when starting JumpPost was to replicate a known play book: 1) idea, 2) diligence, 3) co-founder, 4) give up job opportunity in venture capital (replaced quit job), 5) raise capital. What I realized when I began executing on this play book, however, was that I had a previously non-existent understanding of the difference between organic and inorganic progress. Steps 1 & 2 were the same, but as I began to work on 3, I realized that recruiting A level talent, and especially a cofounder, could be a 6 month cycle. A number of people I am close with expressed an interest in cofounding the company, and had I been executing to “plan,” I would have taken one of them on before moving forward to step 4, but this didn’t seem “natural.” Why? Because I was missing two antecedents to this decision. The antecedents, in this case, being 1) an understanding of what domain expertise would become most important to our company, and 2) an understanding of what caliber of talent I could expect to bring on board pre vs. post venture financing.
So…I sort of tabled the old play book, continued to meet with interesting people, but began executing the subsequent steps before completing step 3 (cofounder)…As soon as I moved past step 3, another deviation from the play book arose. The play book would have said I needed to raise capital in order to develop the JumpPost product (especially without a technical cofounder), but again it didn’t seem natural…what I realized was that I wasn’t ready to commit to investors a single vision for the Company without the data of product/market fit behind us. So I read a lot about a new play book, rooted in the philosophy of customer development, and then began recruiting a team to build something ahead of financing. Now, we will begin to acquire the data needed to complete step 5 (fundraising) organically.
I ran into Chris Dixon on the street in our neighborhood a few weeks ago, and after chatting for a bit about this blog, he asked about JumpPost. His first question was “how are things going? still searching for a technical cofounder?” From an investor’s perspective (and Dixon is another example of a guy who has seen a thousand startup teams, and subscribes to the “cofounder law” for many of the reasons Fabrice articulated), acquisition of a cofounder (step 3) was a data point that would indicate where I was in the progress of a conventional startup play book. Although my answer to his question was, “yea, I guess so,” the reality was I was well beyond this step in the play book, but only because I decided a while ago that I would design a new play book, drawing on conventional wisdom for sure, but not without a few of my own creative plays mixed in.
So all this talk of organic and inorganic progress is just to say that while I recognize Fabrice’s points about the benefits of a cofounder, I will not take on a “cofounder” until it organically presents itself. As JumpPost progresses, I view every early hire, part time contributor, and even advisor as a founding member of our company and I rely on them all as a sort of “aggregate cofounder.” The interesting part is we are going to hit step 6 (product) and have a real good shot of hitting step 7 (achieve seed stage milestones) of the old play book, before executing on steps 3 (cofounder) and 5 (raise seed round). It just happens that this was the most organic and natural path of progress given all the events/goals/learning that we have experienced to date.
So, I guess my advice to entrepreneur’s considering Fabrice’s (and common wisdom’s) suggestion that “2 [founders] > 1” would be, “yes, a cofounder does represent a huge amount of value when starting a business…BUT there are many ways to skin a cat, just make sure you don’t do it inorganically.”
Read Full Post | Make a Comment ( 5 so far )The 3 Most Important Words in a Founder’s Vocabulary
I have always been amazed by people’s unwillingness to utter the words “I don’t know.” These three words have been, by far, the most important words in the course of my professional development. I remember working for a Hedge Fund when I was a sophomore in College, and being tasked with maintenance of a model that one of my bosses had developed to track financial performance of distressed public companies. I had “sold” my way into this internship leaning heavily on my previous “experience” interning at a Broker/Dealer in high school, but the truth of the matter was, I had no fucking idea what the numbers in this model meant. My high school internship had consisted of running tickets on a trading floor and picking up breakfast for a bunch of Boiler Room brokers. While I did get a taste for the “excitement of the markets,” I received absolutely no background in accounting, could not read a financial statement, and was ill equipped to be updating and “analyzing” the data in this model.
I spent about 2 weeks faking my way through this task (while working hard to add value in other places where I was more confident), and then I realized how inefficient it was for me to be performing it with my limited knowledge. I remember coming clean with my then boss, and saying, “I don’t know what any of these numbers mean.” I expected him to be extremely disappointed, but instead he sat down with me, spent a few hours explaining the basics, and I became infinitely more dangerous and valuable to the Company. I internalized that lesson early, and now I apply it on a regular basis.
Admitting that you don’t know something is by far the fastest way to learn it. When I got to General Catalyst Partners, I literally did not know the difference between an application and an operating system. I had to learn a whole new language, and the way I did it was by writing down every single word and concept I didn’t know, most of which were extremely basic and revealed my complete lack of experience, and then I would corner people in their offices and ask them to explain the items on my list. For about three months I was the kid who didn’t know anything, and then for the next two years I was able to speak intelligently across just about every industry and market to which we paid attention. I remember watching the learning curve of one of the guys who joined our team after me, and it was so much slower than it should have been. I realized the reason was because he never asked for anyone’s help. Never admitted when he didn’t know something, but instead sort of nodded his way through conversations about subjects he hadn’t learned. Had he sucked it up and admitted what he didn’t know up front, his learning curve would have been much steeper.
Especially as a non-tech founder (and as a tech investor) I am constantly dealing in realms where my domain expertise is a fraction of the folks’ with whom I work. SEO is a great example of an area where I lack the necessary domain expertise to be dangerous. I could either keep on referencing SEO as a strategy we are going to implement at JumpPost, without understanding how it works, or admit that I get conceptually why Search Engine Optimization is important, but to be honest, I have an extremely cursory understanding of how it works. As soon as I admit that, while potentially unimpressive to the investor with whom I am speaking, or the potential hire with whom I am recruiting, I am now able to sit back and listen as they explain the three pieces of “low hanging fruit” we can achieve while knowing nothing about SEO, as well as the three more complex concepts around the relationship between SEO and Product architecture that I can now implement during the build of our product. The alternative, of course, being that I could gloss over this “blind spot,” notice in 6 months that we are stinking it up on organic search traffic, and then admit that we don’t really understand SEO, at which point I’ll have to explain to said investor why I just wasted $XX of his investment building a non-SEO friendly product that now needs to be rebuilt/augmented at an additional expense to the Company.
When you expose a “blind spot” in your skill set/knowledge base, those who are in a position to teach don’t feel any need to impress you with their knowledge. Rather they speak to you like they would a first grader, which is exactly where you need to start when you are learning a new language. Imagine trying to learn Italian by sitting in an a 3rd year Italian course. It would be nearly impossible and you would immediately raise your hand and say “I think I’m in the wrong class, where’s Italian 1?” If you’re a non-tech founder, for example, not raising your hand when designing a product with your lead developer and saying “Where’s PHP 101?” is simply stupid. Your job may not be to write the code, but if you don’t understand the basics behind every layer of your product, how can you recruit intelligently, weight the effort of your design against internal resources, and contribute ideas to the development process in a method that is easily digestible to the rest of the team. Even in areas where you don’t need to become an expert in your Company, taking the time to learn the basic principles behind everyone’s efforts is essential for effective communication both within your Company and with parties outside of it.
Beyond product, this practice applies to marketing, fundraising, business development, and every other effort that you are pushing forward in your Company. I remember negotiating a business development agreement with Citigroup in my last company. I identified a natural partner for our business, got in front of the right people to pitch it, and got their verbal commitment to move forward with a deal. We sort of lingered in that realm of “ok, so we want to work together” for a couple of weeks, and then I realized that I didn’t know how to turn that sentiment into action. I remember calling Brad Handler, who is the founder of Exclusive Resorts (and at the time a very important potential investor and business development prospect himself) and telling him “listen, I have this deal with Citigroup that is within reach, but I don’t know what to do now.” He taught me how to write and deliver an LOI (Letter of Intent), described the process of turning that LOI into an Agreement, and coached me on how to get the deal across the finish line. Now, in the course of acquiring this knowledge, I exposed our inexperience to one of the most valuable companies for the future of our business, but I only had to do that once, and every business development effort I encountered from that point forward I came at from a position of strength.
So the moral of the story is, don’t fake it. When you don’t know something, admit it confidently, learn it, and move forward.
Read Full Post | Make a Comment ( 2 so far )The “Real” Behind Online Analytics (Entrepreneur’s Therapy Session)
Being an entrepreneur or an investor in consumer internet land, it is very easy to become jaded by 
big numbers. The metrics we use to track engagement with an online product or content are dehumanizing. People who interact with an online site are immediately transformed into statistics like “active users,” “clicks” and “page views,” and somehow they become less real. Mark Zuckerberg announces that Facebook has surpassed 350 Million “Users” and I am conditioned not to internalize just how many people are engaging in the action of Facebooking. I guess when I hear a number like that, I try to benchmark it against big numbers I am already familiar with, to get a sense of scale. I’ll say, “350 million people is 5% of the World’s population,” that is amazing market penetration. But still, that number may as well be written in cotton candy, hanging from a tree in The Cat and the Hat, puffing out plumes of saffron colored smoke into a balloon shaped like the letter R. That’s how far my perception of “350 million users” is from the reality of 350 million people performing one single and common action.
This only really dawned on me yesterday, when I stumbled into Madison Square Garden, sat down in the 8th row, and looked up into an endless sea of Knicks fans. I thought to myself, “there are a ton of fucking people, packed into this arena, all concentrating their attention on the same thing.” I leaned over to my friend, Phin (who has been kind enough to bring me to these games for the last 15 years), and for the first time I asked him “How many people does MSG hold?” Phin answered 19,763, and I was paralyzed. I thought to myself, “on any given day, I can write a blog post that reaches half of this arena, and it would be equivalent to calling a time out, handing out a piece of paper to the entire left side of the Garden, and having them read it in silence for 30 seconds, before the game resumes.”
Something is lost in the translation from a physical crowd to an online crowd. As I try to identify what it is about that arena that I find so impressive, despite the relative size of its audience compared to online crowds, I am drawn toward a few concepts: 1) concurrency, 2) time, and 3) friction.
1) Concurrency: I guess I have a newfound respect for a product that captures a high volume of concurrent users. The trend toward On Demand information consumption has removed a key constraint in attaining a volume of consumers. Live (in person) entertainment is one of the last frontiers where the concept of On Demand consumption is impossible. An event is only consumable in person during a specific window. Therefore, 19,763 represents a much larger market share (of attention) than does the same number in the online sphere. The potential volume of attention during the hours of 12:00-2:30PM is 1/12 the addressable attention of a piece of online/on demand content. Think about how asynchronous consumption has expanded the addressable audience of a television show. Between DVR, DVD, Hulu, and Cable On Demand, an episode of television has a near infinite number of opportunities to reach a consumer, as opposed to 10 years ago when an episode of Seinfeld could only reach the number of people sitting in their living room from the hours of 8:00-10:00 on Thursday nights. Madison Square Garden is still living within the constraints of concurrent consumption.
2) Time: this is a metric that actually translates well between the physical and online realms. A minute of someone’s time is a minute of someone’s time independent of whether it is spent consuming a product in the physical or online realms. The product of a live basketball game is significantly better than the product of a blog post, which is why the Knicks are able to capture a full 2.5 hours of 19,763 people’s time. I would have a very hard time convincing a reader to spend 2.5 hours reading this blog. Time on site is actually a great metric to bridge the disconnect between the online and physical worlds.
3) Friction: by far the most amazing thing about filling an arena with 19,763 people is the amount of friction the Knicks are able to overcome in order to reach their audience. Getting a consumer to move his physical location is probably 10,000 times harder than getting a consumer to move his online location (from one site to the next). Consumers drop off from any product when they encounter friction of experience. The amount of value on the other end of that friction determines how much friction a consumer is willing to endure before giving up and reallocating their attention/effort to an alternative. When you load a webpage and it doesn’t render properly, you will hit refresh. If you try again, and it fails, you might hit refresh. Try a third time and almost everyone will give up on that piece of content. If it was raining yesterday, I still would have gone to the game. If the subways weren’t running, I would have taken a cab. If there was a riot outside MSG, I probably would have passed. The fact that the Knicks are able to mobilize this volume of people to stand, clothe, travel, and congregate is a testament to the quality of their product relative to alternatives (Sunday afternoon football on TV, shopping at the Apple Store, etc..)
All that being said, Facebook destroys the Knicks with the time lever alone. It is a far superior product. The aggregate volume of human time that their 350 million people devote to a single experience is breathtaking (with or without the crutches of a low-friction environment and asynchronous product consumption). To all the web entrepreneurs out there, living in the analytics behind your product (especially if you haven’t broken out from 50,000 users to 350 Million): start visualizing your audience in the physical world. Size up a crowd in the most densely populated area in which you find yourself, and then remember that it is likely a fraction of the number of people you reach on a daily basis. It will make you feel good.
Read Full Post | Make a Comment ( None so far )Seed Investor’s Guide to Finding the Next Twitter
I had breakfast this morning with my friend Ben Lerer. He, and his dad Ken Lerer, have recently put together a seed fund to make angel investments in early stage consumer companies. He asked me a question, which two years ago, I would have been able to answer in a heartbeat, but today caused me a moment of pause. He asked me what companies are on Twitteresque growth trajectories that would be worth investing in regardless of price. The reason I paused was because working at a venture capital firm for a few years, you get to a point where your thinking is probably 6-12 months ahead of the curve. But lacking thousands of data points on blazing markets and the companies within them, I have probably lost that 6-12 month advantage. I still read a ton, and spend time with smart folks from the entrepreneurial and VC communities, but the fire hose of information isn’t quite as fat.
Part of the job of an Associate at a venture capital firm is to identify new and emerging spaces that are worth investing ahead of, and exposing those opportunities to the partnership. Microblogging in 2007 was one of those spaces. To this day, Joel Cutler (who happens to be absolutely brilliant) at General Catalyst will tell you he owes me “a good drink of wine” for passing when I insisted we should fight to bet on Twitter, despite what seemed like a hefty price tag in the first venture round that Union Square Ventures ended up leading (the round got done at a $20M valuation, and two years later Twitter was just valued at $1 Billion).
That’s sort of the nature of being a junior guy at a venture firm. Because you have less responsibility with the existing portfolio, you are able to spend more time than the old guys taking in new data and expanding the firm’s thinking into untouched markets. You develop theses around that data, and when you find something you truly believe in, you need to pound the table so that the Partners who have not spent the last 3 months learning this new space with you will listen and understand the opportunity. Even still, there is a very good chance that nobody will be willing to use one of their bullets on your idea. Each partner at a venture firm gets to make 3 or 4 bets a year (might vary a bit from firm to firm depending on size of fund and number of partners), and a firm probably looks at 2,000-5,000 deals a year. Passing on winners is part of the business. Bessemer actually has a great page on their site where they display the firm’s Antiportfolio. The Antiportfolio is a list of all the massively successful companies they could have invested in, but didn’t. A star studded list of billion dollar logos is accompanied by hubristic quotes from the “passing partners,” explaining why they would never invest in the likes of Ebay, Apple, Google, Intel, Paypal, etc…
So in the absence of an immediate answer to Ben’s question, I can perhaps supply a recipe for any early stage investor who is trying to get ahead of the curve. This is my process for finding the next Twitter:
1) Read: Macro (i.e. Economist) and micro (vertical blogs) content ingestion (30%)
2) Try: Personally experience as many products and services as possible in markets of interest, identify game changers (15%)
3) Experts: Develop and test theses with thought leaders from industry and academia (15%)
4) Entrepreneurs: Speak/meet with every entrepreneur attacking a given market, identify current state of the market and who is best positioned to capitalize on sea changes and future direction (40%)
5) Repeat steps 1-3 over time and across markets
Oh, and if you’re the next Twitter, and investors haven’t found you…you can email me, I’ll try to put you in touch with the right folks…
Read Full Post | Make a Comment ( 3 so far )“Open Sourced” Job Spec
On November 5th, almost exactly 3 weeks ago, 253 people read my first blog post. On November 25, 2 days ago, 4,730 people showed up. While I am excited by the growth, I am still searching for better ways to harness the collective knowledge within this new community. Despite more than 5,000 people reading the last post, only 8 decided to comment and continue the line of thinking. Less than 2/10 of a percent participation is not very good.
Today, I want to experiment with a new concept. I’d like to take a page from the open source software movement, and apply that spirit to the creation of a VP of Marketing Job Spec. For those not familiar, the theory behind open source software development is that much of the coding effort required to carry out development of a project overlaps with the effort required to build other similar (or not so similar) products. By openly sharing a body of code with everyone in a given community, all members within it are able to leverage what has already been accomplished/created, instead of reinventing the wheel from scratch. So if I’m building an e-commerce site and I want to include a shopping cart function, I could spend hours developing my own from scratch, or I could just plug in an open source module that another developer wrote, knowing that his code will do the trick. With the time I saved, maybe I will figure out how to build a feature on top of his code that reduces drop off, and then, if I’m cool, I’ll publish the code behind my enhancement back to the community (open source developers, if I butchered this, please chime in).
So now that I have all of you smart people reading this blog, I figured we could draw on some of your collective knowledge in an effort to create the ideal Job Spec. Whatever we create here, will hopefully be the result of years of experience and lessons learned by those who have hired well (and not so well). My hope is that the document we create will enhance our hiring at JumpPost, but also that it will serve as a template from which any startup recruiting a VP of Marketing can build.
I will start with a brief description of what JumpPost is, and then work into what I think we need:
JumpPost is somewhere between an online classifieds site and a low cost online real estate broker. So, if Craigslist and Redfin had a baby, it might look something like JumpPost. From a customer acquisition perspective, we are focused on general population consumers who are psyched about saving/making money during a change of residence. We’re not interested in reaching home owners (at least for now), and folks who live in cities are more exciting than suburbanites and rural dwellers. It’s a pretty wide net we can cast, and some of our value propositions are unique (read: won’t be competitive to acquire certain types of users), while others are highly competitive. In a VP of Marketing, we are looking for someone who has a play book for building a liquid online community through a series of paid and non-paid customer acquisition strategies.
I’d like to collect contributions to three lenses through which we can identify a star VP of Marketing:
1) General Personality traits: What type of person makes a great online/consumer marketer? ideas that might be right or wrong include:
– data driven thinker
– addiction to analytics
– detail oriented
– quantitative bent
– understanding of relationship between product development and marketing efforts
– what else? What personality traits do the best marketers you know exhibit? Any surprising ones? Any huge red flags that your bad marketing hires displayed?
2) Specific marketing skills and experience requirements:
A) What unique skills should this person possess? ideas include:
– fluency in Google Analytics
– proficiency with SEM keyword tools/models (i.e. Clickable)
– what else? (I actually don’t know what are best in class skills here)
B) What experiences and backgrounds best prepare someone for this type of gig? Ideas include:
– comes from an analogous market acquiring similar demo of user (in our case: online travel, online classifieds, online real estate, online jobs, marketplaces, etc…)
– managed SEM campaign of $XX million budget with XX level of success (what are the metrics to judge success here? What’s a good baseline to measure outperformance vs. underperformance?)
– designed and executed successful referral program alla Gilt.com, Jetsetter.com, etc…(again, what’s a good baseline for measuring outperformance vs. underperformance?)
– fluency acquiring customers from within larger platforms like Facebook, Twitter, etc…
– took an online consumer facing site from xx users to yy users in xx months (what’s best in class here, and how do we separate out the candidate’s contribution to that growth from all other efforts that played a hand?)
3) General traits and skills necessary for an early stage startup team member: What are the must haves and red flags when determining if a hire for any early role will be able to hack it in the beginning stages of a company’s development? Ideas include:
– previous experience growing a company from alpha product to exit
– effusive and clear communicator
– “roll up your sleeves” attitude, no job is too small (not going to try to hire service providers to do all the work)
– comfort with a lack of structure and ability to create and execute own initiatives
– what else? what are the best predictors that an early hire will be a star team member?
So, my suggestions are in no way exhaustive. Please, those who have successfully and unsuccessfully hired an online VP of Marketing, rip this apart and share your experience in the comments of this post. Where am I right on? What is way off? Let’s try to fill these three buckets and I’ll publish a composite spec for all to build off of going forward.
Read Full Post | Make a Comment ( 4 so far )Founders Need Rock Hard Abs
There are two primary reasons why a founder needs rock hard abs:
1) working out of cafes and apartments, hunched over 12″ screens in shitty chairs with improper lumbar
support is NOT good for your posture. A strong core will help…
2) in the early stages of building a company, it is absolutely essential that you learn how to take a punch to the gut.
I have two close friends from Dartmouth who got flown out to the Valley this past weekend for final round interviews with Y Combinator. Y Combinator is basically a hybrid venture capital firm/startup boot camp. A couple of times a year, they “admit” a class of very early stage startups, give them small dollars and a ton of advice and resources, and essentially groom them into venture-financable companies. It is a spectacular head start for first time entrepreneurs, who give up less than 10% of their companies, and graduate with an embedded network and a sharper set of skills to go make it happen.
I just got the news that said friends didn’t make it in. I thought for a few minutes about the implications of this data on the trajectory of their company, and realized that the actual value lost in that opportunity is minimal (a near commodity), but only if they replace that opportunity with something comparable, or even more valuable. Is Y Combinator a great head start? Sure. But so is the participation of some professional angels, or an early stage seed fund, or one of the 6 other clones of Y Combinator that have popped up in the last two years (Techstars, Dreamit, etc..).
BUT, it is not this value lost that poses the greatest threat to their business. The real danger lies in the impact that bad news has on a company’s culture, founders’ state of mind, rate of progress, and general confidence. After two months of product development, business planning, and strong forward momentum, my friends just got their first real “punch to the stomach.” And that, by the way, is exactly what bad news feels like when you are starting out. So much of your effort. time, and identity is wrapped up in this creation, that bad news can actually have a physical impact on founders. Much like getting dumped by a woman you love, entrepreneurs will speak of a pain in their stomach or chest that they just can’t shake.
So much of early success comes from founders evangelizing their efforts, and sharing their company with anyone who will listen. Momentum plays a huge role in a founder’s ability to do so, insofar as it is a lot easier to sell a vision that you passionately believe is going to come true, than it is to sell that same vision in a time of personal doubt. Customers, partners, investors, friends, and family can smell that doubt in a founder’s mind. This reality provides a positive feedback loop which furthers the doubt, and so on and so forth.
The same is 100% true for positive data…and therein lies one of the most important lessons I have learned about starting a company: No matter how bad the news, it is essential that you absorb that blow, deal with the immediate implications, and then do anything you can to generate some good news. The faster you can cut off that positive feedback loop, and shift the momentum of your company back in the right direction, the better chance you have of replacing that “lost value” with something of comparable or greater value. It is your responsibility as a founder, to turn this corner faster than everyone else in your company, and let them draft off of your forward momentum.
None of this is an argument for denial of the facts, and believe me, hindsight is 20/20 (there were days in Untitled Partners where I was not able to do this fast enough), but I think this skill, of taking a punch, and getting back up fast, is one of the most important to develop in a founder’s tool kit. And there is no “faking it.” You can’t just throw a smile on top of negative energy and sell everyone on “the positives.” It is about actually addressing bad news, developing methods to accelerate your personal recovery time, and then quickly taking steps to right the ship.
Think about how many times Rocky gets pummeled in that fight with the giant Russian dude who killed Apollo. Every time he gets knocked down to the mat, he gets back up faster…and at some point…the dude that’s throwing all the blows get’s tired, a window of opportunity emerges, and that’s when Rocky is able to start landing his jabs. Momentum shifts, the crowd rises to their feet, the right kind of positive feedback loop commences, and he achieves the impossible. Next time you watch that movie, take a look at Sly’s abs…rock hard, baby. Team Data Owl…start doing crunches. how fast can you flip this switch?
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