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Year: 2015

Happy Sweet ’16!

Happy Sweet ’16!

We are taking this opportunity to wish you all a fabulous New Year and a wonderful 2016. Since it is the end of the year, we would also like to take this time to look back and remember those we lost this past year. We know that it is by no means complete, but here is our list of 10 companies that are no longer with us:

Grooveshark, the free online music streaming service that allowed users to upload their own songs, $1.1M in funding lost

Zirtual, the virtual assistant service that raised $2M in funding, and suddenly vanished. Investors included Jason Calacanis, Tony Hsieh and Melo7 Tech Partners Read More...

We’re Making a List…

We’re Making a List…

The year is drawing to a close and while we’re not fond of doing Best Of lists, what better time to take an accounting of where we stand? So instead of focusing on one issue/person/company that we feel may deserve closer scrutiny, since this is our last newsletter of the year, we’ve decided to cut a broad swath. And have just a little fun…

Idiocracy in the age of social media. Smart phones, smart watches, smart homes – all well and good to be connected, but once you throw social media into the mix, giving us all a voice (some more dictatorial than others), is all of this connectedness leading to the homogeny, if not the dumbing down, of the population, or at least certain segments of it? It seems that Politically correct universities ‘are killing free speech’ and Students at Lena Dunham’s college offended by lack of fried chicken. That’s Oberlin, fyi, and “Students at (the) ultra-liberal Ohio college are in an uproar over the fried chicken, sushi and Vietnamese sandwiches served in the school cafeterias, complaining the dishes are “insensitive” and “culturally inappropriate” because they’re not authentic recreations of the original ethnic dishes.” Call us misinformed, but we didn’t realize that students are sent to colleges these days to study the meal plan. What we find interesting is that while this is a group that screams for diversity, this same group will not tolerate an opinion that differs from their own. The herd mentality is always dangerous, and there are people in this group who would happily give up their first amendment rights to keep everyone ‘safe’ and ‘happy.’  And these are Yale students in this case, mind you, who are probably blissfully unaware that it was Benjamin Franklin who said, “Any one who will trade freedom for security deserves neither.” The holiday season seems just such a perfect time to remember to be careful what you ask for.

There’s an apt for that. We live in NYC, where rents are out of proportion and apartments miniscule. Luckily, there’s a apt (‘apartment’ abbreviated, for those of us playing the home version) for that: Micro-apartments and according to this article, NY’s First Micro-Apartments Actually Look Kinda Comfortable. Note that it does say ‘kinda’ and it’s kinda like asking your back end coder to be your lead visual designer as well: you may get a design, but can’t guarantee the user experience. The apartments are 300 square feet. Then there’s Brad Hargreaves’s solution: co-living. Hargreaves is one of the founders of General Assembly, which started as a coworking space and pivoted to host classes in various subjects particular to tech startups. We personally knew that this was coming: the AlleyNYC founders had mentioned the idea of launching something similar en passant years ago. Of course, Startup Common, which offers co-living space, will soon be under the critical eye of the city’s Department of Buildings, and “with individual rooms running up to $1,900 at the Crown Heights building, that puts the monthly cost of a three-bedroom apartment between $5,400 and $5,850. Current listings on StreetEasy for three bedrooms in Crown Heights, on the other hand, averaged about half that price. (To put that into further context, StreetEasy rental listings tend to skew higher because it markets higher-end apartments.)” Still, interesting solution – and reaction from a city government that helped to contribute to the housing shortage – in a town rife with outrageously high rents. Equally of concern is what we’re willing to accept as the New Normal and our lowered expectations about what is acceptable. And if living in a space so small that you have to go out into the hallway just to change your mind is all right, happy hunting! Read More...

Startup Funding and the New Investment Landscape

Startup Funding and the New Investment Landscape

We have noticed in our travels that we encounter more and more strategic investors, aka corporate VCs (CVC), turning up at events – and even at our own Investor Breakfasts - as curious as anyone else about what’s being developed out there – and what they might find that’s under the radar.

Early stage and very early stage companies don’t seem to scare them off anymore.

Our friend and SOS reader Jessica Peltz-Zatulove– and CVC, who will be speaking at one of our breakfasts very soon, right, Jess? - co-authored an excellent piece that takes a look Inside the Minds of Corporate Venture Capitalists for CB Insights, and one thing is certain: CVCs are paying attention to the online world – and to startups in particular – as they never have before. “One-fifth of all venture deals in Q3’15 included CVC participation... Since 2014, over 127 new CVCs have been formed, further validating CVCs as viable and valuable sources of capital within the startup ecosystem,” the piece states. Read More...

May the Farce Be With You

May the Farce Be With You

It wasn’t a good week for women in technology. First, according to Sequoia’s Sir Michael Moritz, “for all the many smart, driven, capable young women interested in working in technology: apparently, you don’t exist.” Then, no sooner was she born that little Max Zuckerberg’s parents, Facebook founder Mark Zuckerberg and wife, Dr. Priscilla Chan, announced that they were giving away 99% of their Facebook shares (about $45 billion) to help make the world a better place for her.

The Pitch, Revisited and Revised

The Pitch, Revisited and Revised

As the year draws to a close, always good to look back and see where one is, and what one can do differently, and we recently came across an article that led us to believe that it may be time to disrupt the pitch deck. This is an industry that’s all about disruption, after all, and who better to give a lesson in that sort of disruption than Elon Musk?   You know the basic drill, although the order may vary:

  • Problem
  • Momentum, Traction, Expertise: Your key numbers
  • Market Opportunity: Define market size & your customer base
  • Current Solutions: What need do you fill? Other solutions
  • Product or Service: Your solution
  • Business Model: Key Revenue Streams
  • Market Approach & Strategy: How you grow your business
  • Team & Key Stakeholders (Investors, Advisors)
  • Financials
  • Competition

Déjà Vu All Over Again

Déjà Vu All Over Again

We were gutted by the news from Paris on Friday evening, when over a hundred people were slaughtered, and hundreds injured, including a hundred critically wounded, in a coordinated terrorist attack. All, in the shadows of a suicide bomber in Beirut who killed 43 and the explosion of a Russian commercial airline that killed 224 people.

While the world stopped to react – to mourn, sympathize, reflect, and express its outrage and heartbreak over the attacks, the world did not stop. People tweeted their condolences. French flags appeared across Facebook profiles – again - in sympathy and solidarity. And tech and other news was reported, even as the social media pipelines exploded.

An Inconvenient Truth

An Inconvenient Truth

Bill Gates decided that representative democracy is a problem – in the name of climate change - and announced his plan to spend $2 billion of his own wealth on green energy, calling on fellow billionaires to help make the US fossil-free by 2050 with similar philanthropy,   According to Gates, “the private sector is too selfish and inefficient to produce effective energy alternatives to fossil fuelsIf you’re not bringing math skills to the problem,” he said with a sort of amused asperity, “then representative democracy is a problem.”’

We take no sides in the climate debate, but since Gates brought it up, let’s do the math. Bill Gates is a Harvard dropout and one of the world’s most successful - and wealthiest businessmen, and he may be right that capitalism cannot save us from climate change - certainly not with people like Bill Gates calling the shots. Here's a look at the Gates Foundation's record: Report: Gates Foundation Causing Harm with the Same Money It Uses to Do Good. “the Gates Foundation’s humanitarian concerns are not reflected in how it invests its money. In the Niger Delta, where the foundation funds programs to fight polio and measles, the foundation has also invested more than $400 million in companies like Royal Dutch Shell, ExxonMobil and Chevron… which have been responsible for much of the pollution many blame for respiratory problems and other afflictions among the local population.

The Just Because You’re Paranoid Edition

The Just Because You’re Paranoid Edition

It’s comforting to envision a tech utopia, where our homes know our wants/needs; where our cars are self-driving and hot meals show up on our doorstep. Startup L Jackson referred to the on-demand economy as assisted living for the young, and no, this is not about Millenial bashing. This is a wake-up call.

In case you missed it: US Senate passes CISA, a very bad spying bill dressed up as a cybersecurity bill. We understand that it’s not law yet, that it has yet to pass the House, and for the record, the president is very much in favor of the bill.

According to an article in Wired: ‘…privacy advocates and civil liberties groups see CISA as a free pass that allows companies to monitor users and share their information with the government without a warrant, while offering a backdoor that circumvents any laws that might protect users’ privacy. “The incentive and the framework it creates is for companies to quickly and massively collect user information and ship it to the government,” says Mark Jaycox, a legislative analyst for the civil liberties group the Electronic Frontier Foundation. “As soon as you do, you obtain broad immunity, even if you’ve violated privacy law.”’ Read More...

At the Crossroads and In the Cross Hairs

At the Crossroads and In the Cross Hairs

Once upon a time, you could buy this device called a television, plug the power cord into the wall, hook it up to the antenna, turn it on, and entertainment appeared. It offered a variety of content, across channels. Oh, and there were commercials. That’s how broadcasters/content providers made money. It was referred to as a ‘revenue model.’ It worked well for a very long time.

Then cable TV came in, for which you paid a monthly fee, but at least there were no commercials, at first, but that didn’t last long. Suddenly, you were paying for cable and being subjected to commercials.  Some of us were being charged nearly $200/month for the privilege of being shown commercials. And you wonder why people started untethering en masse and turned to services like Netflix, Hulu, Amazon Prime, et al.

Now we’ve entered a new age of tech and online shopping/search/social and it’s all about Big Data. People are being tracked, scrutinized, targeted, marketed and advertised to – and discovering that all is not fair and equal in the online world, when it comes to pricing. Try ordering an airline ticket. Come back an hour later, and the price has gone up. Try it! Read More...

Airbnb’s first pitch deck

Airbnb’s first pitch deck

Airbnb's first pitch deck has been circulating of late, and while it's a great lesson in how to put together a deck and launch not only a company, but a viable business (Lessons From Airbnb's Investor Pitch Deck), remember - seven investors passed on it. Quelle dommage and for the record, we first heard about the company not long after it launched, when an early adopter frequent-traveler British friend put it on our radar. We thought it was a no-brainer (only couchsurfing had been around before that, which might have been their closest competitor, but that company had no revenue model. There's a non-starter for you).

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