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An Archive of the SOS Email Lists.

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 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...