Reflecting on Month 13 in Venture

Today is my 13th month anniversary working in venture capital. The thing about getting past your one year mark is that it becomes a conversation piece – everyone asks how venture is going out of curiosity and probably out of a sense of social obligation as well. Regardless, I got to thinking about what I have enjoyed the most over the last year. I enjoy meeting entrepreneurs and hearing about their vision. I am honored by their willingness to share their passion with me, and inspired by the focus it takes to invest their lives in a vision. Of course, there are a lot of things going on in Silicon Valley that make me laugh inside. Companies seem to reject the use of spaces and vowels in their names – my cellphone won’t stop spell checking me when I type out notes. People drop terms like “critical mass” and “escape velocity” with straight faces (guilty as charged!). Seriously… everyone works at a start-up. But at the end of the day, the amount of innovation going on is astonishing, and I only wish I had more time in a day to dig in a layer deeper.

So here’s a shout out to all the entrepreneurs I’ve met over the last year – I appreciate meeting every single one of you, and only wish that we had more time to chat. 😉

Resource Share: Things to Know When Making a Web App

Things to Know When Making a Web Application in 2015

Last Friday, I shared a more coding-focused article with little commentary. Keeping up with that tradition (honestly, who can think on Friday afternoons?), here’s another good read with some pointers on things to think about when you’re building a web app.

Article Share: In Defense of the Deck

http://abovethecrowd.com/2015/07/07/in-defense-of-the-deck/

Just read this excellent piece on why entrepreneurs should consider bringing a deck with them when meeting VCs. I’ve definitely noticed a trend towards omitting the deck, especially if it’s a first meeting. In fact, I’ve taken a liking towards that trend. Sometimes I suggest a casual meeting first, and get confused if someone sends me too much information up front.

However, at the end of the day, not having a deck should really be limited to casual conversations only. When you have multiple people in the room, it’s hard to send a clear message, drive conversation, and share key numbers without one. As an entrepreneur, it’s important to communicate clearly and set expectations. Different venture firms are run differently – it never hurts to ask what to expect prior to a meeting. That way, we can all save time and reallocate awkward meeting time to building great companies.

Take your competitive slide, and fast forward it

I noticed on my nexus tablet today an option to cast my screen to a Chromecast. I used to think that Apple’s ability to cast screens to Apple TV was one of the value propositions behind using Apple products (aka deep integration across devices), but it appears that Google is similarly moving in that direction.This points to a deeper lesson to be learned about the competitive dynamics behind any market. Within grocery delivery, you have Amazon Fresh, Instacart, Google Express, etc. Within ridesharing, you’ve got Uber, Lyft, Sidecar, and now Google (with RideWith, which arguably isn’t really a competitor yet). Within food delivery, there are simply too many to name. On the enterprise side, you see AWS adding on new use cases with offerings like Kinesis. You have Salesforce.com moving into the analytics space with Wave. In all these industries, large companies are going after start-ups in markets that have gained traction.

I remember someone saying to me that large companies have the luxury of waiting on start-ups to experiment in a space before swooping in on the most attractive opportunities. I’d balance that statement by saying that companies that truly define a new category that is difficult to enter and benefits from natural stickiness can beat large companies in the long run. However, this also means that start-ups must prepare for and face the risk of larger companies encroaching on attractive markets.

The key take-away here is that you should take the competitive slide you have right now, and fast forward it. You are (obviously) in the top right quadrant right now, but who do you fear the most? Who do you think would eventually become interested in this area? Are your barriers to entry large enough? Can you do what you do better than they can? Is the market large enough for more than one player?

Using the answers to these questions, you can now better understand how to shape your roadmap, and how to start building up barriers to entry before large companies have time to realize just how attractive your market opportunity is.

Circa – Don’t go!

I’ve been subscribing to Quibb for the longest time, and almost never open the emails they send me. None of the content is ever really that interesting to me. Today, however, I was finally compelled to open up the email because the tag line mentioned Circa.

Circa is by far my favorite news app. In fact, it’s the only news app that has survived for more than 10 days on my phone. I’ve installed, uninstalled, re-installed, “re-uninstalled” Flipboard more times than I can count. I’ve had Circa installed since it came out, and when I got my new phone, it was one of the first apps I installed. Circa has always been the app I use to get the short snippet of news I need in order to not feel disconnected from the world. I’m incredibly sad that Circa is leaving, but I guess that’s how it is in start-up world. Circa, I’ll miss you!

Farewell to Circa

Article Share: The “Dry Bubble” We’re In

The “Dry Bubble” We’re In. What That Means.

Related to yesterday’s article share from a16z, here’s another article that similarly discusses the shift of funding from public to late-stage private rounds. The key point here is that although there are a lot of “unicorns,” many of them have gotten there by pushing back their IPO. At the end of the day, investors are still stuck in an incredibly illiquid asset.

Article Share: U.S. Tech Funding – What’s Going On?

U.S. Tech Funding – What’s Going On?

Slide 7 was pretty interesting (P/E levels), although I do think many technology companies are currently valued off AV/Rev versus P/E. It would have been interesting to see the breakdown of companies who were earnings positive versus negative.

Slide 14 had a comparison of 1999 versus 2014 stats. There was a big difference in how long it took to get to IPO in 1999 (4 years) versus in 2014 (11 years).

Slide 36 points out that large rounds often aren’t VC anymore – there do seem to be more funds crossing over into private rounds.

The shift of investments from IPO to late-stage rounds is another interesting data point here. Overall, great presentation with lots of food for thought.