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Category: Advice

The Founder’s Guide to the 2017 Investing Landscape

The Founder’s Guide to the 2017 Investing Landscape

Esther Dyson hit it spot on when she said that there are too many entrepreneurs out there, and way too many who don’t know the fundamentals of how to work and/or build businesses properly. Many young entrepreneurs have never worked for a company, or may have worked briefly for a startup that may or may not have gotten traction/funding, and that’s not the same as working for a company that is not dependent on funding – nor are you likely to learn the fundamentals of building a true, sustainable business that way.

We talk to investors all the time and count some as being among our closest friends/longest-standing acquaintances, and they tell us things – provided that they’re shared anonymously – that they would not ordinarily share with entrepreneurs. We’re going to share some of that information with you here and, for the record, with the prior consent of those investors, and a special thanks to Veronica Guzman of WAM Ventures, who did give us permission to mention her name, for her comments and insights.

Many founders – especially first-timers – believe that pitching to investors is a panacea. Note to self: we do attend many accelerator demo days and one investor recently told us that he was writing checks to companies he had met through the accelerator, which is why he goes to demo days: to suss out good companies. Mind you, he was writing those checks to companies he had met through the accelerator three years prior, and not that day. He had been keeping a watchful eye on them, and now that they were ready (meaning, had traction/customers/sales), he was all in. A company that has nominal revenues and has only been in business a few months is asking for major disappointments, if getting funded is their goal at that point, another investor recently noted. “Advisors are telling them to pitch angels this way,” Veronica noted. Read More...

The Innovator’s New Dilemma

The Innovator’s New Dilemma

It has been 10 years since the iPhone first appeared, and when it did, people frankly didn’t know what to make of it. . According to Quartz, “When Steve Jobs stood on the stage 10 years ago today at the MacWorld Expo in San Francisco’s Moscone Center, he started out by saying he was launching three new devices: “An iPod, a phone, and an internet communicator.” In fact, of course, they were a single device—the iPhone, which would lift Apple’s fortunes to unprecedented heights.” Of course, it was so novel, to many it was also the Blind Men and the Elephant.

Then there’s the new innovator’s dilemma, wherein one can innovate just so much, before one is in danger of running out of ideas, in which case, it’s a long-standing tradition in Silicon Valley to simply steal from a competitor, as in the case of Instagram Stories (Instagram’s shameless Snapchat knockoff is doing marvelously well) “Instagram Stories closely mimics Snapchat—users can broadcast short videos to their followers, which disappear 24 hours after getting sent out,” says Quartz. “Upon its launch, Instagram CEO Kevin Systrom said he felt no shame about playing the role of copycat. In an interview with TechCrunch at the time of its launch, he admitted that Snapchat “deserve[s] all the credit” for the concept, adding that copying ideas remains somewhat of a tradition in Silicon Valley. “Gmail was not the first email client. Google Maps was certainly not the first map. The iPhone was definitely not the first phone. The question is what do you do with that format?” Systrom said.”

The iPhone may not have been the first mobile phone, not was Facebook the first (essentially) phone book, but it was not a copycat. If there was one thing that Steve Jobs could do brilliantly, it was to think outside of the dispenser. With larger companies swooping in and literally stealing ideas from smaller players, is it game over? Even the iPhone is losing market share, as we’ve mentioned previously. Read More...

To Market, to Market

To Market, to Market

New years always herald prognostications from all quarters (comes with the territory) and of course 2017 is no exception. CB Insights noted that 2016 was not a good year in unicorn land & 7 Unicorns Stumbled, and that it looks grim for 2017. In fact, they noted, deals to unicorns were lower last year than in any year since 2012.

They also pointed out that a group of unicorns is called a fondle.

Before we read the tea leaves, good to look at some of the problems, including the fact that Silicon Valley doesn’t have a lot of respect for marketing, and considering that one of their very favorite mantras is ‘Fail Fast,’ well, disregarding marketing will certainly help to accomplish that, if that’s the idea: Read More...

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 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.

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...

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...

Trust, Transparency and Totalitarianism

Trust, Transparency and Totalitarianism

Don’t look at us: Mark Zuckerberg started it.

Last week, The Guardian published a piece entitled Facebook and Google: most powerful and secretive empires we’ve ever known, and, considering the power and reach of the platforms, they’re not merely tech companies: more accurately, they are perhaps two of the most powerful nation-states in the world at the moment and given how ubiquitous they are in our lives, they arguably wield more power/have a larger reach than any corporation or government that the world has seen, to date. As Ellen P. Goodman and Julia Powles state in the piece, “We call them platforms, networks or gatekeepers. But these labels hardly fit. The appropriate metaphor eludes us; even if we describe them as vast empires, they are unlike any we’ve ever known. Far from being discrete points of departure, merely supporting the action or minding the gates, they have become something much more significant. They have become the medium through which we experience and understand the world.

“As their users, we are like the blinkered young fish in the parable memorably retold by David Foster Wallace. When asked, “How’s the water?” we swipe blank: “What the hell is water?” Read More...

And the Silver Goes To…

And the Silver Goes To…

It’s August. The Olympics are on. Why not?

Americans – and tech entrepreneurs, in particular – are conditioned to always go for the gold in the winner-take-all world of tech, but there were two exits lately – both on the East Coast – where tech companies were acquired by corporates for $1 billion or more: Unilever’s acquisition of Dollar Shave Club, and Wal-Mart’s picking up Jet.com for $3.3 billion to challenge/defend itself against Amazon.

For the record, Unilever was also the fourth non-tech acquirer to buy a venture-backed U.S. company for $1 billion or more in the year, according to CB Insights data.  CB Insights goes on to say that “that’s compared to 2014 when tech giants including Facebook, Google, and Oracle made up five of the six acquirers of U.S. venture-backed companies for $1B or more.” Read More...