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Year: 2016

The Top 10 Whines of 2016

The Top 10 Whines of 2016

2016 was not an easy year. It was one in which emotions ran high – to put it mildly. This considered, we decided to pay homage to some of those emotions and one thing is certain: it was definitely a vintage year for whines. While there might be a preponderance of Silicon Valley people, places and companies on the list, remember – California is known for its whines. Without further ado and in no particular order:

Elizabeth Holmes/Tim Draper: It was decidedly not a good year for tech’s first female unicorn, whose fortunes went from $4+ billion to zero. The company also left a trail of unhappy investors, but not Tim Draper, who whined about the unfair press that brought the company down. “Instead of those negative reports, he argued in ArsTechnica, people should focus on what Theranos is doing for consumers. They “love” the company, he added, despite the fact that thousands of consumers have had their blood test results—results that may have led to incorrect treatments—corrected or voided. And several consumers have filed lawsuits seeking class-action status against Theranos.” We know that Holmes idolizes Steve Jobs – who is also gone, but not forgotten.

Jack Dorsey: the CEO of Twitter and Square had a mixed year. Square is doing well, from all reports, but Twitter – not so much, with the stock price pretty much in la toilette and not a buyer in sight. One of the Golden Boys of Silicon Valley lost nearly 20% of his net worth recently, with his Twitter stock tanking, but as we always say, just because you can start a company, doesn’t necessarily mean that you can run one. Or two, at the same time, for that matter. For those unhappy shareholders who believed that wunderkind Dorsey was the exception, well, it might be just that you don’t know Jack. Read More...

The Emperor’s New, New Clothes

The Emperor’s New, New Clothes

The establishment of any new Industrial Age always brings with it the loss of jobs, or a shifting of them, at the very least, and technology is no exception. But the tech sector did come up with an ingenious solution for certain people who found themselves somewhat disenfranchised or in need of some quick cash: the sharing economy, which gave us the Taskrabbits, Airbnbs and Ubers of the world. Task-related solutions are one thing, but when it comes to a platform like an Airbnb, which enables one to rent out one’s abode for short term stays and a bit of dosh and which has blossomed into quite a cottage industry (pun unavoidable), it can become somewhat of a more thorny issue, and it’s not only due to regulations in certain cities around the world (Airbnb’s plan to compromise with cities as regulatory challenges pile up).

Tech has always had a bit of an ‘us versus them’ brashness to it, and again, Airbnb is the perfect example, disrupting the hospitality industry – and rental market – in ways that the founders, who started by renting out an air mattress and hence the name, had not foreseen. But given technology’s (and its investors’) insatiable appetite for more, more, more, at this stage in the game, as technology and platforms outgrow the startup phase and become seven- and eight-figure businesses, buyer – or renter – beware: it’s only ever really a matter of time before our so-called fellow conspirators become ‘them.’

According to Quartz, Airbnb is no longer the nice guy of the sharing economy. “For almost a decade, Airbnb has stuck carefully by that message, while maturing from a scrappy startup into the world’s fourth-most valuable private tech company. On paper, Airbnb is worth $30 billion, as much as Marriott International, the world’s largest hotel chain. At the same time, the company brands itself to hosts, guests, and investors as a champion of the middle class.” Read More...

Tech, Disrupted

Tech, Disrupted

Silicon Valley Has an Empathy Vacuum, according to Om Malik, whom we know personally (although it’s been a while) and for whom we’ve always had great respect, and who, in our opinion, was being kind, or at least diplomatic. “There is a new economic system emerging that is based on consumer capitalism, that innovates ways to eliminate friction of consumption — goods, services, and more than anything else, content — but is doing everything it can to diminish the consumer’s ability to afford the consumption,” says Malik. In explaining the results of the Presidential election (which shocked the tech sector and which we are not going to get into), said Malik, “Globalization is a proxy for technology-powered capitalism, which tends to reward fewer and fewer members of society.”

Tech loves to disrupt and disintermediate. At the same time, it disenfranchises, and people noticed. Except for those people in the tech bubble, and note that he did not say ‘problem:’ he said ‘vacuum.’ They’ve clearly dissociated from the world outside of their monoculture – a word often associated with Silicon Valley, although ‘cultural hegemony’ might be a bit more accurate, but we’ll let that one sit.

Tech’s language bubble may be part of the problem: It might help if we stop referring to people who utilize tech as users or the product and remember that they’re the customers, plain and simple, whether the product itself is free or not. Whether it’s investors or advertisers who are paying the bills, it’s still about eyeballs, which are almost always attached to people/customers, who are ultimately the reason why someone is paying your bills. Read More...

The Things to Do in December Edition

The Things to Do in December Edition

Due to the holidays, no editorial this week. Do hope you enjoyed yours, and a heads up: It’s the holiday party season, a time when things supposedly slow down, but do they really?  Reminder: it’s a very good time to get out there and meet new people – some of whom may be able to introduce you to people you need to meet in order to get you to the next level – and truth be told, investors never rest. They do like to kick back, however, and enjoy this time of the year as much as anyone else, but if you see them around town or at gathering, introduce yourself, get to know them, ask if it would be all right to follow up with them after the holidays – and do – and this above all: remember that tech never really rests, either. It is always moving…onward and forward.

The Lessons Tech Can Learn from the 2016 Elections

The Lessons Tech Can Learn from the 2016 Elections

The Presidential election is over. The electorate has spoken, and we do know that there is great discord in the tech sector that a particular candidate failed to win, and considering the shockwaves that went through that sector, in particular, we’ll take it as a sign that there is indeed a tech bubble. Has tech totally lost touch?

We thought it would be interesting to view the election as a lesson in brand-building and how to not simply launch a company, but some pointers on how to take it to the finished line.

Customers vs Investors. One of the investors who spoke at a recent SOS Breakfasts mentioned a company in which she had invested. The company had a growing sales pipeline – until the founder started focusing on raising the next round of funding. Fund raising is a full time job, as we know, and when you have a skeleton staff, hard to keep all of the balls in the air. Nor do paying customers understand it when they’ve purchased a product and have to wait for it, as the CEO is busy raising funding. The company was falling off the cliff, and the investor suggested that the founder focus on sales and put the fundraising on hold. Result: the sales pipeline grew to the point where the company no longer needed to raise funding. One candidate focused on wealthy donors, qua investor; the other crisscrossed the country relentlessly, reaching out to the electorate, qua customers. At some point, you have to stop fundraising and focus on business. Read More...

And the Number 1 Deal-Killer Question in Tech Is…

And the Number 1 Deal-Killer Question in Tech Is…

Full disclosure: the subject of today’s newsletter comes at the request of a number of investors, advisors and startup consultants whom we know.

We all know the old tech adage: if you want money, ask for advice. If you want advice, ask for money. Some entrepreneurs genuinely do want advice, especially from a consultant, advisor or investor, which is when they reach out and ask that question that is the #1 deal killer for d) all of the aforementioned:

“Do you mind if I pick your brain?” Read More...

How to Get Luckey in Silicon Valley

How to Get Luckey in Silicon Valley

That’s not a typo. We’re referring to Oculus co-founder Palmer Luckey and bear with us…

Silicon Valley is often referred to as a monoculture, and it’s something of a misnomer, as lately especially, it’s gone well beyond that. True, it’s basically a one-industry town, but in order to work in that industry, you also need to be of a certain mindset – and political bent. Of course, all are entitled to their opinions, and all well and good, even in Silicon Valley – as long as you move along lockstep with the accepted opinions.

Republican and staunch supporter of a certain candidate for President Peter Thiel comes to mind who, as a gay man, an immigrant and an extremely successful serial entrepreneur and investor, was practically a poster child for success/diversity/acceptance in Silicon Valley – until he expressed his political views and turned out to be – gasp – supporting a supposed homophobic xenophobe for President, who invited him to speak at the party’s convention – and Thiel accepted! Oh, wait, isn’t Thiel both homosexual and foreign-born? Never mind. Not all things have to track. Let’s stay on point here. Read More...

The Internet of Things and the Great Disconnect

The Internet of Things and the Great Disconnect

It’s been over a year since we sounded the alarm on the lack of security on the Internet of Things, and in fact, we first mentioned it when it was back in its extremely nascent stage. While it is arguably still early days, we now have connected toasters, home alarm systems, refrigerators – and heaven forfend we should be out grocery shopping and can’t ping our refrigerator to tell us which staples we need to replenish.

We have a digital native friend who is always trying to get us to download some app or other, every time we see him. We rarely comply – primarily because it seems to be the latest iteration of something we already use, and the differentiators are not great enough to convince us that the app/company are necessarily going to be around in the next few months. He’s a young entrepreneur, who is also big on having connected devices all over the home, to make his life as easy and as remotely controllable as possible.

And therein lies the rub. Read More...

Yahoo, Twitter and Inside Baseball

Yahoo, Twitter and Inside Baseball

We came across this piece that we just had to share: I’m Done Pretending SF Tech Is Visionary Welcome to Silicon Valley. We’re smart enough to solve real problems, but we don’t. Again, it reminded us of Startup L. Jackson’s reference to Silicon Valley as assisted living for the young, and truth be told, we now have pause to consider if those visionaries are true visionaries, considering that a number of the so-called visionaries have been having quite a few problems lately. For example, no one seems to want to buy Twitter, despite the fact that visionary CEO Jack Dorsey is back at the helm.

To wit,  “It’s been a banner year for corporate scandals in Silicon Valley and beyond,” writes General Catalyst Managing Director Phil Libin, (Rate company scandals with this handy five-point system.) “but until today there hasn’t been a crisp way to categorize them. Are all scandals the same? Hardly! When you’re experiencing these problems from inside a company, everything feels like the end of the world. Sometimes it’s not. For your convenience, and to put things in perspective, I hereby present my five-point scale for company scandals.” Of course, Theranos and Zenefits come to mind, and let’s not forget Yahoo! and Marissa Mayer’s failure to tell users – for two years – that their information had been compromised. Half a billion of them, to be a bit more exact, but when there’s money on the table, ah, details. Or maybe not, considering the fact that Verizon walked – so far – on the acquisition.

What should Twitter do to survive and thrive? For one, visionary Dorsey might want to try showing some vision. Twitter, you’re a publishing platform. So, why aren’t you a publisher? You might also want to consider rethinking the censorship of writers and articles that aren’t lockstep with the Silicon Valley talking points, or you will lose part of your audience, which is already happening (How a GIF of Aly Raisman’s Floor Routine Got Me Permanently Banned From Twitter Update: After this story picked up enough steam, my permanent Twitter suspension was coincidentally lifted. Funny how that works) “It’s disappointing that Twitter will throw users under the bus to do it by permanently banning the very users that built Twitter into the vibrant community it is today,” writes Jim Weber. “It’s even more frustrating that I didn’t have a single human interaction but was delivered form letters determining my fate — likely sent from somewhere halfway around the world… Not only do I not plan to start a new Twitter account, I’m hesitant to post anything to social media platforms such as Facebook, Instagram or Snapchat with the knowledge that they can and will permanently shut down your account with the snap of their fingers. As idealistic as social media platforms make themselves sound, at the end of the day, they’re just like every other business: They only thing they have to answer to is money.” Read More...

Just When You Thought It Was Game Over, Oh, Snap!

Just When You Thought It Was Game Over, Oh, Snap!

It wasn’t all that long ago that so-called ephemeral messaging app Snap (nee SnapChat and SnapChat is less private than you think, as we know) hit the zeitgeist, and quickly seized a sizeable share of one-time Facebook users – especially the younger ones. Now, as Business Insider notes, Snap is working on an IPO for March that would value the company at $25 billion, and “…as part of Snap’s evolution, it’s become an increasing threat to Facebook and Instagram in terms of both attracting younger users and chasing ad dollars. A Nielsen study from September 2015 showed that the company was reaching 41% of all 18- to 34-year-olds.

“That number is likely higher now. A recent eMarketer study said that Snapchat will have reached 58.6 million people in the US, or 31.6% of social media users, by the end of 2016.”

And to think that founder Evan Speigel was considered non compos mentis for having turned down a $3B offer from Facebook just a few short years ago, although as we ourselves reported back in 2013, “right or wrong, Snapchat skated to where the puck is going.” Read More...

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