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Transformation of Innovation (Notes from Aug 12 to Aug 18, 2019) September 4, 2019

Posted by Anthony in Blockchain, Digital, education, experience, finance, Founders, global, Hiring, Leadership, marketing, NLP, Politics, questions, Real estate, social, Uncategorized.
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Hello! Hope Labor Day treated everyone properly, whether you snuck in some time-and-a-half pay for work, avoided it altogether or vacationed. I am going to keep the brief at the start short today because there’s a common theme. And I have been considering longer form writing without the notes on other topics maybe once or twice a week.

From last week – I still am working on the 13 Minutes to the Moon podcast – excellent. And it’s engaging as they went through the building and prep work that went in to getting there before decade-end.

The new segment that a16z has produced with the 16 minutes on the news has been fun, especially if you like an audio version of what’s been popular in tech/news. Sonal has done a great job leading most of them. I found the two that I listened it related to the title – transforming innovation. Software as eating the world (any company/product/service that can be digital will force the company to become software company), along with digitizing many of the slowest movers because the pressure has become high enough (re: Fed with ACH Now). At some point, in order to command more control or to make sure you aren’t disrupted out of the market, companies have to compete and give the customers or users what they want – faster, easier transactions in Fed Now’s initiative.

There were also some fantastic investors / founders that are included. How they developed and framed their careers to step from one thing to the next. If you noticed, many of the 20min VC episodes I listen to are in order from 2015 to now 2016. Fascinating to hear the comments made at that time to update to 2019 (as many of the same bullish comments are made with caveats that have yet to come to fruition – and valuations increased accordingly).

Hope you enjoy the listens!

  • 13 Minutes to the Moon
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    • Ep 05 – “The fourth astronaut”
      • Intertial navigation – if you have your speed and know where you are, can control where you’re going
      • Self-guiding ballistic missiles that couldn’t get thrown off course via radio or otherwise – knew where it was
        • GPS, primitive computer received navigations and could adjust course if necessary
        • Charles Stark Draper who founded MIT’s guidance instrumentation lab
      • Had been a grad of Stanford and went to MIT and became leading expert in aircraft instrumentation / guidance
        • Dedicated to the astronaut program, so much so that he applied – was turned down
          • Practical application with such sensors to be useful was his expertise – size / practicality in flight control systems
      • Had to convince everyone that the computers would work and be trusted
      • Apollo bought 60% of the chips that were out and being manufactured – huge boost for computer industry
        • Good hardware required good software (an afterthought)
      • Called on programmers for building the software Margaret Ate Hamilton (started as programmer, then was in charge as program manager)
        • Developed a system to write software so that it would be reliable and she sought out the bugs/errors – no way to do it otherwise
          • Right times vs wrong time, wrong data, wrong priorities (interface errors) – we take for granted everything we have now
        • No rules or field at the time (akin to “Do you know these English words?” – yes, you’re qualified)
        • Don Isles – math graduate looking for something to do next who joined in 1966, software had been written initially – app code to fly was starting
          • Lunar landing phase commanding – in retrospect, huge – but it was a job at the time
      • Apollo Guidance Computer – 70 lbs in 1 cu ft, 55 W with 76kb, 16-bit words, 4 kb were RAM R/W memory, rest was hardwired
        • Got to the moon on punch cards – 100 people working on it at the end – submit in one run overnight and run simulations
        • 2 women that worked to keypunch before working as full-time – printed lines of code to turn into punch codes
      • Noun-verb inputs for flying – lunar landing, for instance
        • Built the computer interface with idea of “Go to moon” and “Take me home” but it instead had 500 buttons and was much more interactive
          • First system where people’s lives were at stake with it – fly by wire system. Astronauts didn’t control it, they controlled the joystick, etc…
    • Ep 06 – “Saving 1968”
      • Armstrong and Buzz Aldrin
  • Fed reaction (a16z, 16min on the News, 8/12/19)
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    • FedNow – 24/7 open service for access to checks faster to launch in a few years
      • Half the population lives paycheck to paycheck and should care for the $30 overdraft fees that a ton of people do
      • Massive amount of losses to banks here in the US
    • ACH batches all payments in a day or maybe twice vs instant
      • Realtime payment network – 26 banks but need all banks to be a part of this network
    • Against Fed would say to just run the regulatory part vs the operational side
      • Obligate banks to join ACH, etc…
      • Infrastructure for checks has not updated to the tech advantages that we’ve gotten to now
      • Catching up to rest of world, which is 10 years ahead
    • Death of retail – Barney’s filing for bankruptcy, closing 15 of 22 stores
      • Been around since Great Depression
      • Ecommerce coming and direct to consumer is going toward market share
      • Highly leveraged fixed costs, inventory but can go sales to hemorrhaging money and become unviable
    • Grocery is largest single category of US retail, more than apparel and personal – completely immune to digitization historically
      • Inventory is better served close to consumer, physical grocery as distributed warehouse
  • Philipp Moehring, Head of Angelist EU (20min VC 1/6/16)
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    • First European hire for Angelist since Jan 14, venture partner at 500 Partners and Principal at SeedCamp
    • Angelist Syndicate for his
    • Worked for a bunch of startups during his studies, but realized he didn’t want to work for a large company or consultancy like when he started
      • Worked for a professor that was doing research on VC – did his thesis on same topic, asked for data
      • Fulltime job came from a guy who went off on his own to start firm and he was asked to join
    • MBA in Tech Management and Tech Entrepreneurship, where management is very different there
      • Analyst and associate work can be a great job but it’s not a quick way to partner or anything
      • Seeing founders doing a second business after 7-8 years, even after do great and get raises
        • People don’t usually stay at their first job for 8 years but starting at VC, people will jump to a startup second
    • EU vs US scene – SV where VC started and is much more advanced, simply due to a lack of epicenter
      • Angelist looking to get into Series A (not necessarily leading, though) – movement
    • Certainly London for VC – number one ecosystem in Europe, as the largest metro area, tech and VC and money
      • Hard to copy for other places – culture, politics and what makes the city to be interesting
      • Berlin has the momentum as the number two, as well as Stockholm or in Finland, maybe Paris (inward), Lisbon and distribution of eastern Europe
    • $400mln funding for Angelist from CSC Upshot into syndicates – GPs investing directly
      • Does his 500 Partners role on the side – usually someone with investing on the side and has more firepower
      • Wants the deal flow or coverage in the areas they won’t have
      • Knows an entrepreneur and can get in the chance on seed or small amounts to invest in
    • Known the partners at 500 Startups for a bunch of years and could invest similarly to his Angelist style
      • Could be flexible and born out of the way the fund is positioned and investing
    • Most exciting for him is having people that he’s invested in hitting their stride and succeeding
    • William Gibson as a writer who influences his thinking, Snowcrash as a book that depicts the future
      • Looks more at science fiction for tech advances now
    • Most read blog – too many to count, Brad Feld – has a tool called SelfControl against social media
  • Phil Libin (@plibin), co-founder and CEO All-Turtles (Mastering Innovation, 8/8/19)
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    • Discussing real problems with AI

 

 

 

  • Andrew Chung, Founder and CEO Innovo Property Group (Marketing Matters, 8/7/19)
    • Partner at The Carlyle Group, US real estate
    • Started IPG in 2015
  • Stefan Thomke, professor at HBS (Wharton Knows, 8/13/19)
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    • Discussing his paper on magic stick of customers
    • Online experiments – running them quickly and decisively

 

 

 

 

 

  • Ivan Mazour, (@ivanmazour) founder and CEO of Ometria (20min VC FF 029)
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    • Serial entrepreneur, author, investor – Ometria: predictive/marketing analytics platform
    • Born in Moscow, parents PhDs – mom brought him to UK to study math @ Cambridge
    • Started his first thing in property since that was biggest, public industry to get involved
      • Around 26, didn’t utilize any of his studies and data-focused nature, so he leveraged proceeds with his cofounder to make angel investments
    • Wanted to become relevant and learn about tech industry – made 30 investments in 4 years, stopped prop dev, did a Masters in App Prob
      • Refreshed knowledge to build a data company
      • Founding after investing – wrote a blog post as his approach to investment and his dream
        • Build a truly world-leading tech company but accepts lack of experience
    • Thought about how much capital to allocate to invest and how much to invest to be taken seriously – needs to be able to learn from it
      • Angel investor as $20-30k pounds
      • Received a second seed or extension round with Ometria – significantly bigger than seed, but reality is not enough for Series A
        • Hire more engineers, increase team from 20-30. But Series A would be to set up internationally and expand S&M
    • One-sided barbell – huge amount of funding on early, early stage investing
      • Anyone can work to get funding at early, small stage – lots of companies are vying for more eyeballs from bigger ones they need
      • At late stage, if you have the metrics, you’ll have the funding – growing 300%, hit $1m ARR and no question you’d get round, SaaS-wise
    • Launched as an ecommerce analytics company, wanted massive market for data – $3tn ecommerce and retail
      • Launching 2013, analytics was hottest thing (KPMG raised $100mln fund for this only) – by 2015 for big round Ometria, analytics wasn’t relevant/interesting
      • Fascinating to experience – marketing was far more important – actions engaging revenue and data, leveraged
    • First ones to come in were validating – people who he worked/invested with previously
      • Angels that were amazing, AngelLab’s Rachel that was meeting best founders and seeing best companies
      • Had tried to sell Phil as a customer on Ometria and he ended up investing – Alex is on board as 2nd largest institutional investor
    • Pitching angels vs other investors
      • With angels, he had engagement metrics, not revenues – introduced team and had beta user metrics (logging in 7x a day and loving it)
      • Four founders and engagement of platform that allowed closing of round
      • For VCs, chart of MRR that was up and right – increasing growth
    • Several funds liked the company and wanted to consider investing – said he should’ve held off, probably – got excited and continued conversation
      • Waste of time for both sides – hadn’t moved far enough on VC metrics to get a big enough investing for what you’re raising
    • Offline retail – stores won’t go away – thinks there will be an entire platform that will be an ecommerce platform that is based on personalization
      • Product recs, change website and order them – complicated and difficult – best platforms aren’t designed to do that – $1bn company
    • His highlight: sitting in his boardroom after increasing it, Elizabeth Ying (PayPal, head of D/S), Mike Baxter, Allie Mitchel (Huddle founder)
      Looking around that they were talking about his company and making a few investments that he was CEO of and they had 10-20 years experience
    • Favorite productivity tools: ToDoIst, Google Keep for managing main reports, HangOuts
    • Favorite books: Rich Dad, Poor Dad as formulating a way of thinking, and Dale Carnegie’s How to Win Friends and Influence People
  • David Tisch (@davetisch), MP at BoxGroup, Inc (20min VC 1/11/16)
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    • Also, cofounded Spring – brands to consumers via mobile with his brother, Allen
    • Coded as a kid, kept using the internet, entryway into internet and software – didn’t think of it as investor
      • Went to college and law school, became a lawyer and joined real estate finance in m&a but he did that for a year and wasn’t into it
      • Started a company, experimented and sucked – sold to a larger company and was there for 2 years at KGB
      • Went to TechStars – launched and run the NY program after he had made 3-4 investments
    • Cementing of the NY scene would be a magnet company like Amazon, Facebook, Apple, Google – huge magnet for talent
    • The Box in NY as a cool club that he hadn’t been to and his first investment was in a company called Boxy
    • A 20th employee is exponentially more valuable than a seed stage investor – tries to be an valuable investor, though
    • Magical utility or happiness for user or incredibly polished path to where you’re going – different from early days of mobile
      • Should happen soon – hasn’t happened since Snapchat/Tinder as consumer
    • Spring for him – exact opposite of sitting above the clouds as VC and strategy – incredible other side with his brother
      • Mall on your phone – 1200 brands directly (Etsy as maker’s story) – single mobile experience to make it better
      • Free shipping and free returns in 2015 for marketplace and working with their partners
      • VIP, customer service, making a single experience
      • Apparent that the opportunity was sitting there – he had told his brother “Don’t start a company”
    • Doesn’t read much – watches a lot of tv and consumes that as a way to learn
    • Finding his partner Adam at Techstars is probably the highlight
    • Reads online a lot – design blogs/architecture/city – Fred Wilson as successful VC in NY
    • Invested in SmartThings – sold to Samsung a couple years prior and built into products
      • Deep affinity for space, so he invested into Nucleus – video intercom in houses but it allows outbound, also
      • Uncomplicates the phone – primary thing on cell (voice, messenger and text bringing into house)
  • John Wirtz, CPO at Hudl (Wharton XM)
    hudl-logo.1de182540fb461fded02ad2cb75963d4945c560d

    • Coaching and products innovation – getting cameras at 50 yd line or in arenas
      • Not so much looking at point-to-point tracking or high speed for baseball, softball
    • More on tracking all high school players and colleges – uploading of highlights and working with coaches
    • 95% coverage now
  • Software has eaten the world (a16z 8/18/19)
    • Marc and Jorge Condo discussing computer science and its eating healthcare
    • Term from his essay in 2011 after starting firm, tech industry is 70+ years old after WWII, packing $500 that used to be $10-15mln
      • Pessimism after recession – Marc held opposite opinion as just starting (platform built)
      • 3 claims: any product/service that can be software product will be software (boomboxes, cameras, newspapers, etc…)
        every company in the world in those products will become a software co
        as a consequence of 1 and 2, long run the best software company will win
    • Incumbents in auto industry – cars are very dangerous, very hard and software companies think otherwise – value of car is in software (500 in 50 mi radius)
      • Surprising innovation fields: legal, insurance, real estate, education, health care
    • Never imagined investing in new car companies – new industry in 1890, 1920s Henry Ford
      • One new major car company attempt by Preston Tucker (Automotive – Tucker movie, catastrophe)
      • Went from hundreds in 1910s to 3 in 1920s and after
    • Profound technological revolutions as ML/DL/AI as incredibly innovative and cryptocurrency
      • Software founders for how to use and those that haven’t – can be quite transformative
    • Fundamental transformation with internet was music industry – triple whammy – people loved music (? Often dogs eat dog food? – not case in music)
      • Isn’t it great customers love music so much? They want the thing – showing consumption. Music executives said no. Suppliers refusing the demand increase.
      • Pricing issue – want 1 song vs 12 songs on label. Price-fixing collusion by the 4-5 labels. Could overcharge by factor of 10.
      • Consumers were breaking law but the correct reasons. Was immoral, illegal by price collusion.
      • Went from Napster, Kazaa, Limewire, Frostwire, BitTorrent (all investor catastrophes as too early since they couldn’t get pricing from labels)
        • Spotify as 15 years later where investors were scarred but time had come
    • When layer commoditizes, the next layer can become massively valuable – focus is on commoditized layer (contraction for recorded music purchases)
      • US market for live concerts grew 4x in aggregate demand – unlimited access to music, so fun is concert and experiences
    • Marc as serving on board of hospital – mission in terms of health care and medical research and school – nonprofit with highly motivated people
      • Design and build a new hospital – finally opening in 2019 (2005 green light)
      • Well-functioning boards that he sees as 7 people vs 25 or so in hospital
      • Quality problems in auto industry in 1950s / 1960s initially, unsafe at any speed – 70s/80s/90s was TQM – debug quality manufacturing
      • Medical compliance issues – 1/3 not filling prescriptions, 1/3 just take cocktails of them
        • Organ transplants are only 60% compliance
        • Assembly line requirements to motion – decode for running properly, maybe do that for hospitals and doctors – Purell, even
      • EMR at Stanford – $400mil one bid, $100mil to Epic and $300mil for implementation system Perot Systems
        • Interoperability and open source, building on everyone’s creativity (except Epic) and APIs
    • Eroom’s Law – price of bringing new device or drug to market doubles every 10 years – VCs in both decided the economic cycles were too different
      • Names now for VC are ones that aren’t the same big firms
      • Founders are different, as well – PhD in bio but programming since 10 or hybrid tech to pitch
      • Missing middle as converging of scientific domains and getting a16z’s new partner, former Stanford professor in the middle who helped spin it up
    • Digital therapeutics, cloud biology, IT applied to Healthcare
    • Defend market or advance innovate market but SV is starting from scratch – experiments in tech, or business (famous train wrecks)
      • Portfolio approach to experiments – 10 experiments in 10 different parts of biotech / industry – look at successes and asymmetric returns
      • If there are big companies that can do obvious things, they’ll be good at increment – industry does different ones
    • Need evangelical marketer or sales – Jobs’ saying how to envision the picture because consumers have no ability to project this
      • Elon’s Model S – no superchargers or charging at home – had to paint a picture to demonstrate it, get enough sales to build the chargers
  • Dan Granger, CEO founder of Oxford Road (Wharton XM)
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    • Advertising in LA helping acquire new customers and branding

Universal Laws: Parkinson’s Law (Notes from July 15 – 21, 2019) August 6, 2019

Posted by Anthony in Automation, Digital, experience, finance, Founders, global, Hiring, Leadership, marketing, medicine, questions, Real estate, Uncategorized, WomenInWork.
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I included in my thrice-weekly newsletter the blog post by Morgan Housel espousing some of the most common universal laws of our world today. Once you know of them, it’s tough to not consider them in your everyday life. I’ll be honest and say that I hadn’t heard / didn’t know the name or origination of a few, including Parkinson’s. However, I wanted to comment on it because of its commonplace position on my timeline (and in the way I generally price much of my consulting work).

Parkinson’s Law: Work expands to fill the time available for its completion.

ML and apps – attention. Phones and apps have stolen hours of attention over the last 3-4 years (Wharton XM blog) — 3 hours to 4+ hours for the average, now

How do they squeeze in more DAILY? Work efficiency, likely. Most probably don’t have 8 hours of real work – ask anyone. What do we think the % is? I understand there are roles that probably see a full day a few times a week or in certain weeks (looking at you, auditors/accountants/finance/strategy/consultants) where projects line up or during busy times. Even retail / seasonal / cyclical has busy seasons – boosts that require full focus. But generally, not.

Work time vs value – if you can finish a project in 24 hours, charge more because the allowable time outside of that is higher or do you take the full time or project out for time in case of a problem / feedback / there? See: consultants working with a client, maybe a new client? Value = price but want to keep them. Can’t do too low. Can’t go outside of the range. Sweet spot of pricing and expand the time. Expensing to look like the time is filling. I can’t knock any firms taking advantage of this, especially when most have derived the business model from value creation, but it does seem that as time goes on, keeping that price premium and time valued becomes less of an advantage used for good and merely an indicator of what they should bring.

Time will tell for those that hang on the longest. Hope you enjoy the notes.

  • Cynthia Muller, Dir. of Mission Investment at WK Kellogg Fdn (Wharton XM, Dollars & Change)
    • Discussing consulting and the people or culture parts (@cynmull)
      • Merger where everything, paper and number-wise, looked like a perfect match
      • Failed miserably – many of the top producers were unhappy and the merger allowed them to leave easily
    • Satya Nadella at Microsoft reimagining the purpose – got to everyone PC-front but had to overhaul
    • Measuring people – upper quintile in survey of 500k employees (~500 companies) – middle management ratings of purpose
      • 7% YoY performance over others – not lower or upper – middle management was determining factor
  • Scott Kupor (@skupor), MP at Andreesen Horowitz (Wharton XM)
    • Discussion of becoming full-shop, including investments and RIA
    • Value add other than capital is very important to him
    • Tries to make decisions and No comes with why?
      • Sometimes they are wrong, see founders again and some have come back with addressing the reasons “no”
    • IPO extensions to 10+ years vs 6-8 – private and liquidity-driven
      • Discussed employee needs as a big reason for why it will stay 10-12 and not increase
      • Can’t compete with Google or others if you aren’t liquid
      • Early on, private companies aren’t worried about that with the people that can take the risks
    • Secrets of Sand Hill Road book, going through that
  • Brian Kelly, co-founder of The Points Guy (Wharton XM)
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    • Selling to Red Ventures – taken private recently, also
    • Partnering with hotels and airlines to build an app in Austin – connect accounts, personalized, direct to airlines/hotels
      • Make it easier and hopefully change it for the better consumer experience
      • Turning it into a tech company moreso than a media one
    • Blogging initially, leaving Morgan Stanley – consumer-focused and not driven by partnerships
    • Only takes credit card partnerships instead of airlines or others
  • Benito Cachinero, Senior Advisor at Egon Zehnder (Wharton XM)
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    • Former CHRO at DuPont, ADP and leading succession processes
      • VP of HR for JnJ Medical, Corporate HR VP for MA Divestitures at Lucent Tech
    • Born in Spain, knew he wanted out at an early age
  • Eric Hippeau (@erichippeau), MP at Lerer Hippeau Ventures (20min VC 12/21/15)
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    • Chairman of RebelMouse, co-founder of NowThis Media
    • CEO in 90s of Ziff Davis initially as media company, the publisher of PC mags as well as conferences
      • Being in tech business moreso than media – sold to p/e firm before they sold to SoftBank
      • Before selling, they were about to be 2nd institutional investor in Yahoo but SoftBank made bid for 1/3 of Yahoo before IPO
      • He went to Yahoo Japan which allowed them to get a lot of source just due to the company
    • Sold business in late 90s, joined SoftBank as investor and opened firm in NY with them before his own
    • Backing company or business requires some business experience and growth/hiring and strategizing are all important
      • All partners at LHV have operating background – biggest difference is probably the time horizon (need really long view as VC)
      • Had just closed 5th fund, very satisfied with the work life instead of operating – running as a startup
      • $8.5 mln initially – no full-time employees initially, until the 2nd fund
    • First investments are at seed level, have always kept money in reserve for follow-on
      • 70% of co’s are in NY
    • Value add for LHV, generally – 2 levels of support
      • Product that is a technology platform that they plug everyone into
        • Recruiting and marketing database, best practices, current series A/B investors and what they’re seeking, Comms layer
      • Each company assigned to one partner and associate – bespoke plan and a to/do list for each company
        • Intros, branding, pricing, organizational structure and growth
    • Biggest problems for portfolio co’s – dependent on sector
      • Ex: SaaS: correctly size marketing opportunity for going after the right, big companies – largest/most important get a premium on the valuation
    • First check is typically $750k – $1mln – characterize this as collaboration between other funds
      • As long as terms are acceptable, let others lead or whatever is best when the companies are the best
    • Best pitch: what they’re looking for is the Big Idea – original, large market, tech-enabled, timing
    • Drone Racing League as public, recent investment: fantastic idea as drones are becoming more popular, variety of them, popularity of video games
  • Sumeet Shah (@PE_Feeds), Investor at Brand Foundry Ventures (20min VC 12/23/15)
    • Investments include Warby Parker, Birchbox, Contently
    • Grad from Columbia in 2008, biomedical and went to p/e through Gotham Consulting Partners (engineers at firm, diff industries)
      • P/E as two party system – deal team of firm and the client portfolio company
      • Lots of outside the box thinking, project work for 2 and B/D for 3 years
      • Met Andrew Mitchell who is the boss at Brand Foundry
    • July 2013 moved into start-up with friends with Gist Digital – help with bizdev
      • 6 months in, help with capital – Andrew reconnected – was offered a full-time job into vc
      • March 2014 was when he went full-time and after the first year is active – seed rounds, pre-seed occasionally
    • Paul and Sarah Lacey – series A crunch with tech/software/app-focused
      • Invested into Cotopaxi for $3mln seed round
      • Working alongside Indiegogo and Kickstarter and have invested in crowdfunding
    • Marketer, operator and technician and his due diligence takes between 2-4 weeks, typically
      • Take on doubles/triples compared to unicorn returns that are worth it – Eilene’s opinion to do unicorns
    • Believes over time that building reputation with doubles and triples, will stumble on a unicorn – those are the ones that can make the fund
    • Most value from investors – sign of weakness is not reaching out to investors
    • Different mindsets of East vs West coast
      • NY looks at building sustainable businesses, SV/SF is a $1 to a dream mentality (need this, still)
        • Want to look at revenue streams, traction, etc… but loonshots are ‘safer’ in SV
      • Founders as female-led – 7 of 13 of their investments have female founders and 3 of them are 2 co-founders female-led
    • No general people in the startups that may catastrophically fail in SV, so it’s okay for the funding to be gone
      • Bullish on TechStars Boulder, looking at ventures or accelerators that are growing in that region
    • Things A Little Bird Told Me as favorite book and most recent investment with LOLA – women’s biodegradable tampons
  • Carolyn Witte (@carolynwitte), co-founder & CEO of Tia Clinic (Wharton XM)
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    • Going from a tech AI program / chat – making women be comfortable with talking to a message
    • Before doctor appointments to after, and then having them bring her in with the doctors
    • How to interact – realized that they needed to complete the offering with their own clinic

 

  • Jessica Bennett, gender editor at NYT, “In Her Words” (Wharton XM)
    • Sympathetic attitudes and gender
  • Boris Wertz (@bwertz), founding partner of Version One (20min VC 12/28/15)
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    • Top early-stage tech investor, board partner at Andreesen Horowitz, COO of Abebooks.com that sold to Amazon in ’08
    • 2005 named Pacific EY Entrepreneur of the Year
    • Internet 1.0 in 1999 – wanted to be apart of it – started JustBooks with some friends
      • Built it to Europe’s market leader and then sold to competitor AbeBooks before Amazon
    • Took proceeds and put into 35 internet and mobile companies – early wins, early exits and decided to do it professionally
      • First fund was $18mln
    • Power of bringing together customers across the world and finding the book – buyers/sellers in small marketplace with hard-to-find
      • Years and years of book fairs or local inventories that they were limited to
      • Passionate customer stories and being part of the company – personal way to see how marketplaces are important
    • Transportation vertical with Uber as unlocked in marketplaces
      • Mobile first, others – and their investments
      • “A Guide to Marketplaces” book by VersionOne
        • Precision for a thought that may have been in your head when you write – clarity
        • As supportive as possible to the startup ecosystem and how to impact entrepreneurs in portfolio or outside
        • What does VersionOne get excited about and how do they contribute or help?
        • 50 page guide put together for a framework and concise – depth but not overly so
    • Attractiveness of marketplaces
      • Fragmentation of supply/demand – more people on either side of marketplace, buyers/sellers
        • Buyers/suppliers sometimes want a monogamous relationship – doctors, cleaning personnel – don’t want to get someone new
        • Cab driver / uber – doesn’t matter who drives A to B as long as it’s safe
        • Transactional relationships vs monogamous
      • Size of underlying market, ebay grew from collectibles to all sort of products
      • Specific niche market – what is the kind of market you can address – specially-crafted goods
        • When he looks – lens of VC that needs a return, so needs to see a return on capital in 5-7 years
        • Operators can be great in this case because it can be very profitable, bootstrapped or friends/family money to get and grow
    • Demand or supply first? Any marketplace chicken and egg.
      • Depends on marketplace but once you have network effects, it takes off
      • Uber paying drivers to be idle just to have people in the area and have the supply
      • Addressing supply – how much to have? Hotspots.
        • Which transactions work really well?
        • Price point? Vertical? Certain buyer/supplier? AirBnb doubled down in NYC higher value rentals. Just needed that initially.
    • Trust and safety becomes more important after some attention – supply side with hobby sellers with a little bit of their inventory
      • Power starters are the ones that are stronger. Professional sellers.
    • Mobile first marketplaces and on-demand marketplaces excite VersionOne the most.
      • Services / products as on-demand (Fueling of cars, for instance)
      • Fascinated by decentralized marketplaces built by blockchain – will they ever make money but can’t generate money on own?
    • Measuring as VC: how happy are entrepreneurs, were ones that they met with taking away stuff, serving/help them and get feedback
    • Favorite book: Hard Things, Blog/newsletter – Fred Wilson’s
    • Overhyped: on-demand, Uber for X thing – underlying drivers for Uber’s success, for instance
    • Underhyped: quicker hype cycles – blockchain, VR/AR, drones and anything new is all over it in few months
    • Marketplace Key Metrics: gross merchandise sales and take rate (revenues compared to the gross sales)
    • Recent investment: HeadOut mobile first marketplace for travel experiences (NY, LA, Chi, SF, LA, Vegas)
      • Upcoming experiences in next 24 hours in that city

Sharing, Building and Community (Notes from June 24 – 30, 2019) July 16, 2019

Posted by Anthony in Digital, experience, finance, Founders, global, Leadership, medicine, questions, Real estate, social, Strategy, Uncategorized, WomenInWork.
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If you hadn’t noticed or read from the start, you should know that I’ve gone in order from the start on the Twenty Minute VC episodes. Many of the conversations are from 2015 and 2016 so they end up as a bit of a history lesson and window into the mindset surrounding capital / founding at that time. Bubble discussions or higher capital raises are comical when we now know what today looks like – higher, still. Although I’d say geographically, expansion has exponentially grown as it’s become easier and more common for firms to seek out what they really believe is an edge for them. Interestingly enough, people also don’t stay where they were, especially over a few years. As I look them up to refresh and review for these posts, it can be very enlightening to see where they are currently – did they start a new project? Open a new fund? Move on to different industry?

David Teten was one of those switchers, as he was with ff V/C at the time, and now over at HOF Capital. Similar role but perhaps more focused on what he’d like to see. Also, many of the firm founders and partners aren’t heralded for having more than a few roles – some probably for different reasons, but I look at that for myself as a way to stay extremely excited about continuing to learn every day, every week. To believe in yourself to be capable of doing great work, helping to create as much value as possible in the most efficient manner, hopefully. Weird that many people receive flack for multiple positions when many of us strive to follow a few particular, but potentially different, things. For this, I admire David in keeping up with his roles, while keeping us all in the loop of his thoughts, generally, as well.

Next, there were two involved in real estate, housing and construction that were pretty much aligned. What do I mean? Both believed the rising housing (and estate, generally) costs have come as construction costs have increased significantly. This is creating unduly pressure, and making it more difficult for projects to get done. Maggie Coleman went through real estate differences for certain types, while John Rahaim of SF mentioned precautions that are being taken for the coastline and bay.

Then, we had Ryan Hoover, who runs ProductHunt, and is one of my favorite follows. He built what he and his friends wanted – a place to share ideas and products to try. And 5 years later, here he is. I won’t spoil some of the nuggets that he shared, including a few of his favorite books and monetizing once he knew it was real. Not to be outdone, a discussion with Phil Southerland covered how he has built a strong community of athletes born or having diabetes. To demonstrate how they can grow, he helped form a team of all diabetics and professionally rides to bring awareness and improve the lives and conversations surrounding them.

There is important work being done by many people, including ourselves. If we can better someone’s life, it’s likely worth doing it if you’re enjoying it. We can help by just being who we are and doing what we would like to do. I’d love to hear some of your ideas or thoughts regarding the people covered in this week’s notes.

  • David Teten@dteten, Partner at ff Venture Capital, founder and Chairman of HBS (20min VC 095)
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    • Alumni Angels of Greater NY, largest angel group in NY
    • How to Disrupt the Investing Business
    • Grew up in Marin Co, played with computers – consulted and taught Excel as a kid – bah mitzvah on knowledge test
      • Fired when he was 16 from financial services company because they figured out password was pw for admin
    • In college, worked briefly in strategy consulting before investment banking in tech – business school where he started multiple ventures in Israel and US
    • Joined ff VC in 2011 when it was 3 – now 27+ people, as largest headcount seed VC in Canada, Amsterdam, Israel, UK, US
    • Company ff should be generalists – broadest possible but don’t invest in life sciences due to no expertise there yet
      • Can’t predict in advance, so they want companies that are interesting with high growth potential
      • Admires outbound of TA or Summit, but something like SignalFire to look at data for high growth
        • Resources to help founders to reduce write-offs (1 in 6 fail for them) which attracts inbound (2000+ a year)
          • Filters down to ~12 a year to invest
    • Google Ventures / SignalFire and others as algorithmic approaches to source – increasing importance but not validated thesis
    • Loves their model as efficient – frustrations at other vc’s (80% of time with people / co you can’t invest in – partying and not meeting anyone)
      • Nobody at ff has a job as origination, Angelist as disrupting the generalist VCs (those that don’t have added value)
    • Top 3 Important Ways to Support Companies: capital raising, finance acceleration team – CFO acting, recruiting
    • How to determine value add as entrepreneur
      • Reference check
      • Do the math on portfolio: for ff, 60 portfolio co’s (active in 2/3), 24+ ee’s
        • How many people in the team? How many portfolio co’s? How many checks?
          • Use that to determine person-hours you can expect
        • What sort of technology platform to support the company?
      • A16z as huge operational side – finance, marketing, etc…
        • Short list for companies doing this – very capital intensive
      • Believes that there will be some shrinkage in the model in a downturn if it’s not fully thought out
    • Very illiquid asset class (mentioning to LPs) – 12 different academic studies for 18-54% median returns
      • 10+ years for cash returns, lot of institutions aren’t okay with that time range
      • David Swenson (head of Yale endowment) has argued long-lasting liquidity premium for illiquid asset classes
        • Even the most liquid asset classes aren’t liquid when you want them to be (2008, for instance)
    • Indiegogo as seed – crowdfunding space, competitors aren’t invested in – watch Angelist very closely, though
      • Services from Angelist as they look around at different parts of deal flow
      • Encourages member space to get involved in angel investing for next generation of companies – exposure to ecosystem
        • Promote economic growth
    • Research study: Disrupt investing – security, for instance
      • Secure (ID verification), Distill Networks (blocks bots), IONIQ (from Atl, secure cloud usage)
      • New processes and make them efficient: Addapar (Excel/PDF), Earnest Research (nontrad datasets eg: cc info, email receipt mining)
    • VC usage of social media: much more aggressive, judicious but no breakfast tweeting – sell
    • Edward Tufte – Yale prof, must read
    • PandoDaily as top blog – not afraid to make enemies, discuss what they do
    • SkyCatch as most recent – drone tech, set of tools for collecting data via drones – construction use case (Kamatsu client)
      • Monitor exact status of project, imperative they know where everything is
  • Maggie Coleman, MD and Head of Intl Capital at JLL RE (Wharton XM)
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    • Looking at different real estate measures – single family homes, for instance
    • Do different assets in real estate require a different measure to draw attention from foreign investors?
      • Didn’t seem so – would depend on where the capital was coming from (their own environmental basis)
    • Construction costs as outpacing many other costs – affecting many markets

 

  • John Rahaim, Director at SF Planning Dept (Wharton XM)
    • Having to adjust for the changing seaboard – will regulatory measures be taken?
      • No mechanical or living people in commercial buildings on the first floor, for instance
    • Says there are already precautions being taken on the bay – 5-8 feet, for instance
    • Construction costing so much already that it’s been very difficult to get building done post-land acquisition
      • Estimates of $600-800k for this due to inflationary and costs passed from the building companies
      • Said he had some 36? Projects that are being held up
  • Ryan Hoover (@rrhoover), Founder @ ProductHunt (20min VC FF026)
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    • Best community builder, Twitter engagement, winner of TC Best New Startup of 2014
    • Just wanted to build a consumer-focused thing to discuss with his friends about app ideas or companies
    • Put it on Quibb and Twitter – manual things initially, set up an email subscription, personal email connecting with people
      • Keep building communities otherwise it peters out
    • First iteration was RoR built over 5 day Thanksgiving holiday – core is the same, people using and community growth
      • Having people tell them and comment on ideas (used it as their new home page)
    • How to plan to go from early adopters to mass market?
      • Eager enough to participate, engage and not necessarily representative of the common users
    • Categorizing Podcasts and putting them on the home page – barrier before, now based on episodes
      • This Week in Startups, Startup Show (by Gimlet founders), Jake Gyllenhaal ep of Mystery Show (Gimlet media) – is he 6′ tall?
    • Worked on Hooked with Nir Eyal, using some in ProductHunt
      • Email digest is the trigger – action is to open / click on something to find inspiration or interesting
        • Built email variability – some consistency, surface different titles and content
      • Follow collection, clicking follow, reward is updates on the collections – permission for emailing to reinforce and come back
    • Ryan’s favorite collections: featured ones, Russ has game collections (browser ones), Julie created bakednight
    • Betaworks kept popping up on their engagement charts – Twitter very active, products (Without, where would he be?)
      • Always tagging the authors and being genuine, personable, funny or light-hearted
    • Monetizing PH – at its core, download/use/purchase products with the right intent
      • Over time, will explore more of this
      • Fundraising: first time for Ryan, different as a side project and growing
    • Quibb as newsfeed other than Twitter and also Crunchies where they announced Shipt but said “Actually, it’s PH”
    • Sunrise as calendar app, Pomodoro – no longer. Favorite book: Art of Game Design by Arty Shell
      • User psychology and game mechanics, how it applies to tech products as well. Game design not always thought about.
  • Brian Solis (@briansolis), author of Lifescale (Wharton XM)
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  • Survey on how social media has changed / warped views for girls
    • Hadn’t fully released yet

 

 

 

  • Phil Southerland (@philsoutherland), CEO of Team Novo Nordisk (Wharton XM)
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    • Living with T1 diabetes and bringing awareness
    • T1 and T2 can be helped, dealt with and he’s trying that
    • Cycling team focused on it
      • Full team is athletes with diabetes
        • triathletes, runners and cyclists
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