Office Hours with an Engineer Turned VC

Last year, I experimented with VC office hours for the first time. People were invited for 25-minute sessions where they could ask me whatever they wanted for 20 minutes, and then they would teach me something for 5 minutes.

The experiment was a success and a lot of fun, so I'm going to repeat it this year. The first part of this post covers details for 2017 office hours, and the second part of the post covers some of the lessons that I learned while conducting this experiment last year.

2017 Office Hours

What?

40-minute time slots for office hours with me. I was a software engineer for 10 years (very early at LinkedIn and Factual, not-so-early at Google). I transitioned to venture capital about 5 years ago, and I'm a cofounder/partner at Susa Ventures, a $50m seed stage venture fund.

When and Where?

Becoming Your Future Self

In my five years as a VC, I've worked closely with the founders of 50+ companies. Many of these companies have grown headcount substantially since I first met them. One of the biggest challenges that founders and early employees face is scaling up personally to meet the ever-growing needs of a business. People sometimes gets stuck and become bottlenecks because they are reluctant to delegate the things they are great at, or they don't want their role to include new tasks that arise as a company grows. As executive coach Marshall Goldsmith says, "what got you here won't get you there."

Types of bottlenecks

There are three common ways in which startup leaders can fail to scale up:

  1. They're good at some parts of the job but bad at other parts. Jobs often require multiple skills, and key employees have to be great at all of those skills. Continue reading "Becoming Your Future Self"

Priceonomics Content Marketing Conference Notes (2017)

I've been a fan of Priceonomics for a long time. They publish thoughtful, data-heavy content and they've written some fun books.

This post is a collection of my notes from the 2017 Priceonomics Content Marketing Conference, which was held a few weeks ago. The content was very high quality -- not surprising given the theme of the conference -- and included a lot of useful advice on creating content, scaling content teams, and building an audience.

Table of Contents

  1. Audience Growth: The Little Things that Work by Sam Parr, Founder of The Hustle
  2. How to Scale a Content Team by Maggie Leung, VP of Content at NerdWallet
  3. BuzzFeed: How We Data Science by Gilad Lotan, VP of Data Science at BuzzFeed
  4. Why Data-Driven Companies Hire Economists by Jed Kolko, Chief Economist at Indeed
  5. Attract, Capture + Convert Customers by Shafqat Islam, CEO of NewsCred
  6. The Anatomy of Continue reading "Priceonomics Content Marketing Conference Notes (2017)"

Notes from Priceonomics’ 2017 Content Marketing Conference

I've been a fan of Priceonomics for a long time. They publish thoughtful, data-heavy content and they've written some fun books. This post is a collection of my notes from the 2017 Priceonomics Content Marketing Conference, which was held a few weeks ago. The content was very high quality -- not surprising given the theme of the conference -- and included a lot of useful advice on creating content, scaling content teams, and building an audience.

Table of Contents

  1. Audience Growth: The Little Things that Work by Sam Parr, Founder of The Hustle
  2. How to Scale a Content Team by Maggie Leung, VP of Content at NerdWallet
  3. BuzzFeed: How We Data Science by Gilad Lotan, VP of Data Science at BuzzFeed
  4. Why Data-Driven Companies Hire Economists by Jed Kolko, Chief Economist at Indeed
  5. Attract, Capture + Convert Customers by Shafqat Islam, CEO of NewsCred
  6. The Anatomy of Continue reading "Notes from Priceonomics’ 2017 Content Marketing Conference"

When is a Dollar not a Dollar?

"All dollars are equal, but some dollars are more equal than others."

- George Orwell's imaginary capitalist twin

In my college economics class, I was taught that money is fungible because there's no difference between one dollar and another dollar. Over the last five years as a VC, I've learned that that's not exactly true and that some dollars are much more valuable than others to a business.

From a startup's perspective, there are three common reasons why the value of a dollar can vary:

  1. Money has different marginal value to a customer depending on where it falls on their balance sheet.
  2. Some types of revenue require a lot more effort and resources to earn than other types.
  3. Timing matters, and a dollar today is worth more than a dollar next year.

This post offers several concrete examples of these principles. The goal is to encourage thinking about revenue, Continue reading "When is a Dollar not a Dollar?"

Behind the Scenes at a VC Fund, Part 3: Fund Structure, Fundraising, Investor Relations, and FAQs

VCs have 3 principal jobs: picking startups to invest in, helping startups after investing, and raising capital for investing. Each of these jobs will be covered in its own post. This post, the third and final one in the series, focuses on how VC funds are structured and raised. It also covers some venture capital FAQs, which were sourced from the following Twitter thread:

Table of Contents

Part 1: Deals, Deals, Deals

A post on how VC funds source, analyze, and choose companies to invest in.

Part 2: Helping Founders and Time Allocation

A post on how investors interact with companies after investing, and how they allocate their time on a day-by-day basis.

Part 3: Continue reading "Behind the Scenes at a VC Fund, Part 3: Fund Structure, Fundraising, Investor Relations, and FAQs"

Behind the Scenes at a VC Fund, Part 2: Helping Founders and Time Allocation

VCs have 3 principal jobs: picking startups to invest in, helping startups after investing, and raising capital for investing. Each of these jobs will be covered in its own post. This post, the second in the series, focuses on how VCs spend their time (charts and graphs included!), and how they help the companies they invest in.

Table of Contents

Part 1: Deals, Deals, Deals

A post on how VC funds source, analyze, and choose companies to invest in.

Part 2: Helping Founders and Time Allocation [this post]

Part 3: Fund Structure, Fundraising, Investor Relations, and FAQs

A post on the basic mechanics of how VC funds are structured and raised, how VCs interact with their own investors, and

Continue reading "Behind the Scenes at a VC Fund, Part 2: Helping Founders and Time Allocation"

Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals

My fund, Susa Ventures, just added Natalie Dillon to our team. She's our first-ever investment team hire and we're very excited to work with her. While speaking with dozens of wonderful candidates for the role, I was reminded of how opaque venture capital is as a profession. Many of the candidates asked what a typical day and a typical month are like for a VC. Is it schmoozing at parties for 40 hours a week? Taking back-to-back investment calls while lounging on some tropical beach? Making million-dollar decisions using coin flips? Reading technical research papers? (Answers: no, no, no, and hardly ever.) Now that I've been doing this job for a while, I thought it might be useful to document what working in venture capital is like for anyone who may be curious. This 3-part series is a summary of my experience being one of three partners at Susa Continue reading "Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals"

Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals

My fund, Susa Ventures, just added Natalie Dillon to our team. She's our first-ever investment team hire and we're very excited to work with her. While speaking with dozens of wonderful candidates for the role, I was reminded of how opaque venture capital is as a profession. Many of the candidates asked what a typical day and a typical month are like for a VC. Is it schmoozing at parties for 40 hours a week? Taking back-to-back investment calls while lounging on some tropical beach? Making million-dollar decisions using coin flips? Reading technical research papers? (Answers: no, no, no, and hardly ever.) Now that I've been doing this job for a while, I thought it might be useful to document what working in venture capital is like for anyone who may be curious. This 3-part series is a summary of my experience being one of three partners at Susa Continue reading "Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals"

A Return to Blogging

I'm embarrassed by how much I've fallen behind on writing new blog posts. I've been unusually busy at work for the last few months, but I am finally at the point where I can start writing regularly again. This is a short housekeeping post about recent things I've produced outside of this blog + upcoming posts that I'm finishing up.

Table of Contents

Upcoming Posts

Social pressure helps me get things done, so I'd like to publicly list the posts I'm planning to publish in August:
  • A post on the day-to-day work in a venture capital firm. I crowdsourced questions for this a few months ago, got many excellent suggestions, and have been working on the post ever Continue reading "A Return to Blogging"

A Return to Blogging

I'm embarrassed by how much I've fallen behind on writing new blog posts. I've been unusually busy at work for the last few months, but I am finally at the point where I can start writing regularly again. This is a short housekeeping post about recent things I've produced outside of this blog + upcoming posts that I'm finishing up.

Table of Contents

Upcoming Posts

Social pressure helps me get things done, so I'd like to publicly list the posts I'm planning to publish in August:
  • A post on the day-to-day work in a venture capital firm. I crowdsourced questions for this a few months ago, got many excellent suggestions, and have been working on the post ever Continue reading "A Return to Blogging"

Three Mathematical Models for Building a More Valuable Company

"All models are wrong, but some are useful." - George E. P. Box
It's very hard, maybe impossible, to create a mathematical model that describes how to build a successful company. Still, there's value in trying to come up with different models and thinking about their implications. This post describe three possible models for calculating a startup's value and the lessons that each model offers.

Model #1: A Product of Risk Multipliers

In How to De-Risk A Startup, I described nine major risks that most startups face, as well as how investors might evaluate each of those risks:
  1. Product/Market Fit Risk (is your product something that people want?)
  2. Product Quality Risk (can you build a great product?)
  3. Team Risk (do you have a great team for achieving your vision?)
  4. Recruiting Risk (are you able to grow your team effectively with strong talent?)
  5. Sales Risk
    Continue reading "Three Mathematical Models for Building a More Valuable Company"

Tit-For-Tat Office Hours with a Seed-Stage VC

For a while now, I've wanted to try holding office hours. I've been a big beneficiary of Silicon Valley's pay-it-forward culture, and I'd love to play a part in maintaining that culture. Winter holidays are a forced vacation for VCs*, so this seems as good a time as any to give office hours a try. The experiment that I want to conduct is "tit-for-tat office hours": each person I meet with can ask me whatever they want for 20 minutes, and then I can ask them to teach me something related to their professional experience for 5 minutes. I've never tried this before, but hopefully it'll be useful and fun for everyone involved. What? 25-minute time slots for office hours with a software engineer turned VC. When and Where? 10am-4pm on Dec 28 (Redwood City), Jan 4 (Redwood City), and Jan 11 (SF). Who is this for? Current and aspiring Continue reading "Tit-For-Tat Office Hours with a Seed-Stage VC"

How to Use Thought Experiments to De-Risk Your Startup

"In preparing for battle, I have always found that plans are useless but planning is indispensable." - Dwight D. Eisenhower
In the early days of building a company, it's hard to step back and think about the bigger picture when there are always so many fires to fight or opportunities to chase down. That's a shame, because looking at your business from a 50,000-foot view often reveals areas of misplaced focus or resource misallocation. One technique that can break through the bubble of always being in the weeds is conducting occasional thought experiments that give you insight into your company. This post is a catalog of sixteen useful thought experiments. Each experiment consistents of a thought-provoking question and an explanation of that question's purpose/motivation. Most of these thought experiments require a different frame of reference on your company -- either from the perspective of another person or another time
Continue reading "How to Use Thought Experiments to De-Risk Your Startup"

How to De-Risk a Startup

In a previous post, I wrote that startups are collections of risks, and that the best way to make progress on a company (and to get higher valuations from investors) is to address the biggest risks as quickly and thoroughly as possible. But how do you actually mitigate different types of risk? How do you convince yourself that you have product/market fit? How do you persuade investors and employees that you can build a lasting company? How do you demonstrate to early adopters that you're good at building products? This post contains a (non-exhaustive) list of common startup-related risks, the spectra along which those risks might be classified, and some tips and heuristics for mitigation. The further you move from "high risk" to "low risk" along each spectrum, the stronger your valuation, perceived progress, and likelihood of success will become. The entries on each risk spectrum are rated from Continue reading "How to De-Risk a Startup"

Startup Cargo Cults: What They Are and How to Avoid Them

"In the South Seas there is a Cargo Cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas—he’s the controller—and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things Cargo Cult Science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land." - Richard Feynman, 1974 Caltech Commencement Address
The passage above
Cargo Cult Segway made out of branches
Continue reading "Startup Cargo Cults: What They Are and How to Avoid Them"

Startup Cargo Cults: What They Are and How to Avoid Them

"In the South Seas there is a Cargo Cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas—he’s the controller—and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things Cargo Cult Science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land."

- Richard Feynman, 1974 Caltech Commencement Address

The passage above

Cargo Cult Segway made out of branches
Continue reading "Startup Cargo Cults: What They Are and How to Avoid Them"

Common Startup Timing Mistakes and How to Avoid Them

"The right thing at the wrong time is the wrong thing."

- Josh Harris

Unless an early stage startup is profitable, it's constantly working against the clock. A typical seed round provides 1-2 years of runway, and that runway is always shrinking. There's a lot of advice on the web about what to do once you've raised money, but not when to do it. This is unfortunate, because poor timing can kill a company.

Some timing mistakes are obvious in retrospect, like planning 18 months of work for a 15-month runway, or doing things serially when they could be parallelized. Other mistakes are more subtle, like misaligning seasonal demand with a fundraising cycle (e.g. raising 2-3 months after a peak season is tough because most of your key metrics are dropping just as you're starting to approach investors).

This post will describe some common timing issues, as well Continue reading "Common Startup Timing Mistakes and How to Avoid Them"

Common Startup Timing Mistakes and How to Avoid Them

"The right thing at the wrong time is the wrong thing." - Josh Harris
Unless an early stage startup is profitable, it's constantly working against the clock. A typical seed round provides 1-2 years of runway, and that runway is always shrinking. There's a lot of advice on the web about what to do once you've raised money, but not when to do it. This is unfortunate, because poor timing can kill a company. Some timing mistakes are obvious in retrospect, like planning 18 months of work for a 15-month runway, or doing things serially when they could be parallelized. Other mistakes are more subtle, like misaligning seasonal demand with a fundraising cycle (e.g. raising 2-3 months after a peak season is tough because most of your key metrics are dropping just as you're starting to approach investors). This post will describe some common timing issues, as well Continue reading "Common Startup Timing Mistakes and How to Avoid Them"

Common Startup Timing Mistakes and How to Avoid Them

"The right thing at the wrong time is the wrong thing." - Josh Harris
Unless an early stage startup is profitable, it's constantly working against the clock. A typical seed round provides 1-2 years of runway, and that runway is always shrinking. There's a lot of advice on the web about what to do once you've raised money, but not when to do it. This is unfortunate, because poor timing can kill a company. Some timing mistakes are obvious in retrospect, like planning 18 months of work for a 15-month runway, or doing things serially when they could be parallelized. Other mistakes are more subtle, like misaligning seasonal demand with a fundraising cycle (e.g. raising 2-3 months after a peak season is tough because most of your key metrics are dropping just as you're starting to approach investors). This post will describe some common timing issues, as well Continue reading "Common Startup Timing Mistakes and How to Avoid Them"