The 7 Cardinal Sins of Startup Founders

Cardinal Sin #1: Delusions of Grandeur

The worst kind of founder is one who thinks they are the second coming of Christ. NO, your company isn’t going to be worth billions. NO, your idea won’t change the world and feed the poor or stop climate change or bring peace to the Middle East or save the fucking whales. NO, your idea isn’t the next “Uber” or “Airbnb” of this or that.

In reality, your idea has as much merit as a Justin Bieber love potion or a testicle scratcher.

Just remember: you and your startup are not hot shit until it’s actually hot shit.

What you should do instead:

Leave your ego at the door and be prepared because I have a ridiculously oversized revolver that I am ready to use. And if you send me a bad pitch, you better hope I use it on myself first before I

image
Continue reading "The 7 Cardinal Sins of Startup Founders"

The 7 Cardinal Sins of Startup Founders

Cardinal Sin #1: Delusions of Grandeur

The worst kind of founder is one who thinks they are the second coming of Christ. NO, your company isn’t going to be worth billions. NO, your idea won’t change the world and feed the poor or stop climate change or bring peace to the Middle East or save the fucking whales. NO, your idea isn’t the next “Uber” or “Airbnb” of this or that.

In reality, your idea has as much merit as a Justin Bieber love potion or a testicle scratcher.

Just remember: you and your startup are not hot shit until it’s actually hot shit.

What you should do instead:

Leave your ego at the door and be prepared because I have a ridiculously oversized revolver that I am ready to use. And if you send me a bad pitch, you better hope I use it on myself first before I can use it on you. And if you somehow managed to dupe another VC to invest in you, remind me to shoot them instead.

Cardinal Sin #2: Being A Phony

I hate suck ups. I always get ambiguous emails from people who read my articles and it somehow magically changed their life enough to “reach out” to me. But it always turns out to be a bunch of BS because what they really want is my money. I can’t stand it when people beat around the bush about wanting funding because unclear intentions are a waste of my time.

There are dozens of articles that tell entrepreneurs to commiserate or praise in order to build rapport with VC’s, but that’s just awful advice because I already know all the tricks in the book. This isn’t a god damn high school romance where you are being shy and stuffing love notes in your crush’s locker.

What you should do instead:

Just stop being such a sycophant and grow some balls. Tell me about your startup and that you need funding. Just be straight with me and I will do the same.

Cardinal Sin #3: Not Paying Attention

If you look at my contact page, I have 3 simple steps that I require all founders sending me pitches to follow. There’s a problem though: out of the hundreds of email pitches I get every week, I have yet to receive one from someone who followed every single instruction.

You ask for a short pitch but get the National fucking Archive instead.

News flash: adding more words to your email won’t make you or your startup sound any better and it sure as hell won’t help convince me to give you my money.

If anything, I am deeply insulted every time this happens.

image
Continue reading "The 7 Cardinal Sins of Startup Founders"

Should VC’s Start Crowdshaming Shitty Startups?

Like most VC’s, I get carpet bombed with pitches almost non-stop. They can range from the benign and harmless pitches all the way to the ones that were clearly written by someone who had just discovered bath salts. Most pitches are just plain awful and seeing them infest my inbox has brought me to the breaking point.

It got me thinking about ways I could combat the problem: I could delist my email address? No, that would mess up my deal flow by making me less accessible.

I could write a detailed guideline of what I look for in a startup? Already tried that and apparently everyone doesn’t know how to read.

I could hire an analyst but I would be condemning that poor sap to a life of depressing pitches which could then lead to suicide.

But out of the blue I remembered watching a new show called Salem and in the very first scene, the village fornicator was being pilloried and brutally branded. This got me thinking: what if we could do something similar to bad startups?

Public humiliations have been around for centuries now. In pre World War Japan, adulterers were laid bare and publicly exposed. Dunce caps were placed on the heads of unruly school children. And if you really wanted to get medieval? "A butcher selling bad meat would have to suffer the offending piece of meat being tied under his nose whilst tied up in the town square for public ridicule."

But nowadays we have something called “human rights” which prevents us from using such barbaric forms of punishment so that’s one less way of stopping bad startups from pitching us.

But what if we did something similar instead? What if we could crowdshame bad startups the same way a judge shamed this bad driver?

If you think about it, crowdshaming bad startups makes perfect sense: there are dozens of online forums filled with investors who disparage bad stocks all the time. Jim Cramer even goes as far as smashing things to get his point across.

Hell, even startup entrepreneurs have a website they can use to bad mouth venture capitalists.

Why doesn’t the industry have its own online forum where we can pillory and flog the bad startups who pitch us? Why don’t we mention them in our blogs or our tweets? Why don’t we have a blacklist that’s available for all to see?

Here’s an idea: every VC firm should have a disclaimer on their “send your pitch” page which saids this:

"Follow our guidelines and don’t send us bat shit crazy pitches or else we will publicly shame you on our blog and Twitter."

However, crowdshaming bad startups could Continue reading "Should VC’s Start Crowdshaming Shitty Startups?"

The Upside & Downside of This New VC Firms Strategy

Silicon Valley has long prided itself for creating the “Pied Pipers” of the world but ironically enough, venture capitalists themselves have been reluctant to disrupt their own industry and the traditional 2/20 model.

But just recently, Kent Goldman, an ex First Round Capital partner, is trying something radical: he’s spreading the wealth with his founders.

It’s simple enough; all founders in his portfolio get a cut of the carry, something unheard of in VC.

I was a bit reticent when I read about his new approach so I decided to write up a list of the pro’s and con’s:

Pros:

-Collaboration on a whole new level. A lot of times, founders will remain one dimensional not because they are lazy, but because they only know so much. By fusing founders with different skill sets together, you can create an environment of cool ideas.

Don’t know anything about marketing? No problem, Continue reading "The Upside & Downside of This New VC Firms Strategy"

The Upside & Downside of This New VC Firms Strategy

Silicon Valley has long prided itself for creating the “Pied Pipers” of the world but ironically enough, venture capitalists themselves have been reluctant to disrupt their own industry and the traditional 2/20 model.

But just recently, Kent Goldman, an ex First Round Capital partner, is trying something radical: he’s spreading the wealth with his founders.

It’s simple enough; all founders in his portfolio get a cut of the carry, something unheard of in VC.

I was a bit reticent when I read about his new approach so I decided to write up a list of the pro’s and con’s:

Pros:

-Collaboration on a whole new level. A lot of times, founders will remain one dimensional not because they are lazy, but because they only know so much. By fusing founders with different skill sets together, you can create an environment of cool ideas.

Don’t know anything about marketing? No problem, just ask the founder who does. Need help with your coding? No worries, someones got your back.

-Everyone is in it for everyone else. The Amish people are renown for their sense of community - when everyone lends a helping hand, the entire village thrives. Upside is well on their way to creating their own little version of a Amish startup paradise.

This has one major implication: a very young startup in it’s infancy won’t have to hire as many people because all the founders can contribute to each others startups and lend a helping hand.

-Deal flow magnet. If startup founders knew they could get a piece of the action, why not take Upsides money? This model could be a great differentiator and help make a founders decision much easier. 

With that said, the skeptic in me still sees some potential hiccups:

Cons:

-How helpful can others founders actually be? If you throw a bunch of people into a room and ask them to assemble a rocket, chances are that the rocket scientist will be the only one who knows how to do it.

And this could be the same thing for Upside startups. With so many different types of companies doing vastly different things, you might not always get the synergy that you expected.

One founders unique skillset won’t be of much use if the other founders can’t take advantage of it.

-Conflict of interest: lets imagine a scenario where 2 different founders in Upsides portfolio (lets label them Startup A and Startup B) are helping each other out. The collaboration goes great and both companies go on to attract investors for a Series A round.

But here’s the problem: one investor (lets call him Big Wig VC), is deciding to invest in Startup A but discovers Continue reading "The Upside & Downside of This New VC Firms Strategy"

What The %$#*! Happened To Creativity In Silicon Valley?

Everyday I see the same things:

The same half assed startup names that take a perfectly normal word and bastardizes it by adding a “-ly” to the end; the same generic websites with screenshots of the startups app on a oversized iPhone; the same startups who proclaim they are the next “Uber” or “Airbnb” of this and that. And then there are the same cliched terms like “disruption” and “scaling” being thrown around incessantly.

So now I have a question: what the %$#*! happened to creativity in Silicon Valley?

In the valley, engineers and coders are the heroes. Even designers are getting more street cred now. But there’s always been something about this status quo that has bothered me: these same people don’t seem care about creativity anymore.

Our obsession with “coding”,”growth hacking” and “scaling” has turned us into a singular mind hive that I like to call the “Silicon Valley Blob”. Anything tech related gets sucked into the blob and everything else gets rejected.

Take for example Box and Dropbox - I can’t for the life of me see the difference between the two besides pricing and the logos. For someone of my basic cloud storage needs, which one should I pick? I can’t decide.

But let’s look at another example, this time between Lyft and Uber.

Although I am well aware of the key difference between the two, they offer essentially the same service. But without any hesitation, I picked Lyft. Why?

It’s simple really: Lyft just has more creativity. Their trademark pink mustache and fist bump was not only marketing gold, but a hit with users.

If you were one of the first investors being pitched Lyft and the co-founders told you that they planned on putting a big pink mustache on customers cars, you would have thought the idea was stupid. And then you would have started asking questions like “But what’s your scaling strategy?!! Revenue projections? Burn rate?”

But when was the last time a venture capitalist asked, "what’s your creativity strategy?"

In the past, a good tech startup could get by on their technical prowess and create awesome services like HootSuite but with increased competition, that is no longer the case. I get dozens of pitches from startups with identical products so deciding who to invest in has become an impossible task.

The truth is, any nitwit can get technical knowledge - all you have to do is go to school for that. Good engineers and coders are a dime a dozen nowadays. Even supermodels can learn how to code now. But the one thing you can’t learn is creativity - it’s something that you have to develop and nurture.

So why Continue reading "What The %$#*! Happened To Creativity In Silicon Valley?"

The Unusual Economics of My New Small Fund

Charlie O’Donnell wrote a short blog post of the economics of his fund and no surprise, it was representative of how a typical VC fund operates. But since my fund is far from being typical, I would like to share with you the weird, un-sanitized and detailed economics of it so lets get started!

Management fees: *UPDATE* I’ve decided to go with no management fees PERIOD! I am about to say something no other sane VC has said before: I dislike management fees. As a kid, I had no allowance so I earned every dollar I made. It’s a philosophy I carry with me to this very day.

Fees often provide improper incentives for VC’s so I decided to do something different: I came up with a one time management fee of 4% and it’s a lump sum paid out only in the first year. After that, no more fees.

My fund is about $25 million, so the fee works out to $1 million. Whoa, did I just hit the jackpot? Far from it. The life cycle of the fund is 5 years so I have to stretch out that million dollars. Startup costs aren’t cheap either:

Limited partner agreement. This is the fancy legal document that your investors sign. It’s typically 30-50 pages long and absurdly expensive - you can expect to pay anywhere between $25,000 all the way up to $100,000!

So how much will I be paying? $25,000. Yes, I know, that’s an insane amount of money to spend but an iron clad LPA is crucial because it helps you avoid legal headaches in the future.

Also keep in mind that the lawyer is not only drafting an LPA, but an subscription agreement and your standardized term sheet.

Back office: It works out to $100k every year and covers almost everything: accounting, audits, taxes, financial statements, capital calls, banking etc. In the end, that’s half of the $1 million fee already gone.

Staff: Just one analyst will be hired to help source & manage deal flow along with liaising with our existing portfolio companies. Salary will be 80k; 400k in total over 5 years so that leaves me with less than 100k in fees. P.S I’m still looking for an analyst so send me an email if you are interested.

Offices: I have a co-working space in Brooklyn that runs for about $6000 a year. It comes with a desk, computer, wi-fi and access to conference rooms for pitches.

Carried interest. Here is where I stray from the herd: 20% is standard but it’s based heavily on performance. Basically, if I make a 2x return, it is bumped up to 25%. A 3x return is Continue reading "The Unusual Economics of My New Small Fund"

What Barbara Walters Amazing Career Can Teach Us About Women in VC

Jeff Bussgang’s recent article about the lack of women in VC struck a nerve with me as this topic has always been near and dear to my heart so I want to share the story of Barbara Walters and show what it can reveal about the lack of women in VC.

Back in 1976, Barbara Walters became the first female co-anchor of the evening news for a major network (ABC). It was a big risk because sexism was still prevalent in the 70’s. Despite that, the show began well and ratings went up.

Regardless, Barbara’s co-anchor Harry Reasoner was well known for his dislike of Barbara. In her memoir, she spoke of how she was invisible to the predominantly male crew but read this passage which described a time when she tried to ingratiate herself into the group:

"The only way I could hold my own was with the New York Yankees. I was a big Yankee fan. Still am. In desperation I would come into the studio and make bets on the Yankees with Harry or the guys on the crew, and very often I won. For five minutes or so I could be one of the guys."

But the show started coming apart. The toxic chemistry between them had brought ratings down. The only saving grace was Barbara’s 4 one hour specials that she was required to do as part of her contract and they would prove to be a turning point in her career.

The very first one hour special was with the newly elected president, Jimmy Carter. During the interview, Barbara asked him an embarrassing question about the sleeping arrangement he had with his wife. Although widely criticized for asking such a personal question, Barbara said this of the incident:

"I cringe now at this exchange with President-Elect and Mrs. Carter, but it made them very human. It also painted an accurate picture of their close relationship, which would become apparent to everyone over the next four years."

But the one hour special was a smash success and The Barbara Walters specials would go on to become one of the most popular shows for the next 30 years.

A year later in 1977, the new president of ABC News said of Barbara, “She’s a great asset who has been mishandled.”

Mishandled? How did the worlds greatest female news journalist get mishandled?

What stopped Barbara from succeeding in journalism was her desire to become one of the boys - even going so far as to making sexist comments against herself. Barbara was trying too hard to play the game that the men had created.

But when Barbara accidentally asked the US president what Continue reading "What Barbara Walters Amazing Career Can Teach Us About Women in VC"

What Barbara Walters Amazing Career Can Teach Us About Women in VC

Jeff Bussgang’s recent article about the lack of women in VC struck a nerve with me as this topic has always been near and dear to my heart so I want to share the story of Barbara Walters and show what it can reveal about the lack of women in VC.

Back in 1976, Barbara Walters became the first female co-anchor of the evening news for a major network (ABC). It was a big risk because sexism was still prevalent in the 70’s. Despite that, the show began well and ratings went up.

Regardless, Barbara’s co-anchor Harry Reasoner was well known for his dislike of Barbara. In her memoir, she spoke of how she was invisible to the predominantly male crew but read this passage which described a time when she tried to ingratiate herself into the group:

“The only way I could hold my own was with the Continue reading "What Barbara Walters Amazing Career Can Teach Us About Women in VC"

From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC

SaaS, enterprise, and mobile all have one thing in common: they are the bread and butter of most VC firms and angel investors. You would be hard pressed to find a VC who doesn’t have a portfolio dominated by tech startups.

But as the global economy evolves, we are beginning to see disruptions in areas that were once ignored. However, there is still one industry that has yet to go mainstream with investors: fashion.

It’s no surprise that fashion isn’t on the radar of traditional Silicon Valley investors - VC’s aren’t exactly known for their expertise of haute couture. To most VC’s, they see the industry as gaudy, over the top and a domain reserved only for women.

But as a former fashion designer turned venture capitalist, I see dollar signs - and lots of them.

Let’s take a quick look at the numbers:

$1.2 trillion market size and Continue reading "From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC"

From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC

SaaS, enterprise, and mobile all have one thing in common: they are the bread and butter of most VC firms and angel investors. You would be hard pressed to find a VC who doesn’t have a portfolio dominated by tech startups.

But as the global economy evolves, we are beginning to see disruptions in areas that were once ignored. However, there is still one industry that has yet to go mainstream with investors: fashion.

It’s no surprise that fashion isn’t on the radar of traditional Silicon Valley investors - VC’s aren’t exactly known for their expertise of haute couture. To most VC’s, they see the industry as gaudy, over the top and a domain reserved only for women.

But as a former fashion designer turned venture capitalist, I see dollar signs - and lots of them.

Let’s take a quick look at the numbers:

$1.2 trillion market size and expected to grow to 2 trillion by 2018.

To put that into perspective, the global SaaS market is around 20 billion, cloud services is 131 billion, and enterprise software, 120 billion.

Overall, the fashion and apparel industry is a juggernaut and it’s easy to see why: everyone needs clothing and it’s a product that we use every day.

And that’s the beauty of fashion and why it holds untapped potential for VC’s; its the perfect combination of market size, unending global demand and it’s a industry that has yet to be fully disrupted.

As you are about to see, there are still many problems that need to be solved in the fashion industry and the payout for solving them will be significant:

-Affordability. It’s no surprise that people want to look good for less. Companies like FAB are trying to solve this problem but I believe they and many others are only beginning to scratch the surface.

Subscription boxes like StyleMint and Popbasic will continue to be popular but there is still room for innovation when it comes to affordable fashion. I also see a future where crowdsourced apparel will become mainstream.

-Big data. One of the most vexing problems that retailers continue to face is knowing what to buy and stock on their shelves. Unsold inventory costs retailers billions of dollars a year and only now are we beginning to see startups like EDITD take a big data approach to solving this problem.

With millions of retail stores around the world, a big data solution to fashion inventory can become a very lucrative market.

-Manufacturing. How can we make the best quality clothing while maintaining good profit margins? Companies like Nike and Lululemon have long struggled to balance both while trying to maintain a positive image of their overseas Continue reading "From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC"

From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC

SaaS, enterprise, and mobile all have one thing in common: they are the bread and butter of most VC firms and angel investors. You would be hard pressed to find a VC who doesn’t have a portfolio dominated by tech startups.

But as the global economy evolves, we are beginning to see disruptions in areas that were once ignored. However, there is still one industry that has yet to go mainstream with investors: fashion.

It’s no surprise that fashion isn’t on the radar of traditional Silicon Valley investors - VC’s aren’t exactly known for their expertise of haute couture. To most VC’s, they see the industry as gaudy, over the top and a domain reserved only for women.

But as a former fashion designer turned venture capitalist, I see dollar signs - and lots of them.

Let’s take a quick look at the numbers:

$1.2 trillion market size and Continue reading "From The Runway To Silicon Valley: Why Fashion is The Next Big Thing in VC"

Don’t Go Chasing Distribution Waterfalls: The Future of VC Compensation

Just recently I read Kanyi Maqubela’s post on distribution waterfalls and carried interest and felt compelled to write a rebuttal.

First of all, there is no such thing as a European style waterfall - not anymore at least. If anything, most American VC firms are the ones who use that supposedly “European” style waterfall where the principal must be paid back before any carry is made.

Since most LPA’s are bespoke agreements and highly individualized, a European or American style waterfall doesn’t really exist.

During the dot-com boom, VC’s were robber barons and had LP’s on their knees with deal by deal carried interest because times were pretty damn good.

But when the party ended, LP’s lost their collective shit and implemented the safer distribution waterfall that we now see commonly today.

Deal by deal carry is incredibly rare now and I doubt many US or European VC firms are able to convince their LP’s to agree to it.

Instead, we are now seeing more distribution waterfalls that directly rewards performance. For example, carried interest that incrementally rises based on return multiples (if the VC gets a 2.5x return on invested capital, the carry increases from 20% to 25% and so fourth).

But what I really want to expand on is the future of VC compensation.

Just recently a new fund called Maiden Lane emerged from the brain trust over at Angel List. Maiden Lane’s approach is simple enough: a 200k check for select angels to invest in a company of their choosing and 30 percent carry with no management fees.

It’s quite brilliant when you think about it: spread the money around to the best and brightest angels and let them invest in the next big startup.

And the implications of this new model are huge.

Instead of LP’s focusing on investing large chunks of capital in a small handful of funds, they can now leverage the talent and experience of multiple VC’s. And the best part is not having to pay those pesky management fees anymore.

I foresee a future where VC’s and angels make individual capital calls to LP’s. Found a new startup that you think will be hot? Pick up the phone or fire off an email to an LP requesting 250k. Rinse and repeat as needed.

Now VC’s and angels won’t have to go through the time consuming process of raising a multi-million dollar fund.

There is also the possibility of a new class of angels/VC’s that could be created.

If LP’s wrote smaller checks, they can try out new and emerging angels that have potential. A 250k bet on a new VC is certainly less risky than giving him $10 million for a Continue reading "Don’t Go Chasing Distribution Waterfalls: The Future of VC Compensation"

The Purple Cow, Startup Edition #2

image

In this 2nd post of the Purple Cow Startup Edition, I will be sharing some remarkable ideas for a startup I’ve admired for quite some time now. You might know Bark & Co as the group which owns Bark Box, a popular monthly subscription box for dogs. Here are a few remarkable purple cow ideas that I’ve come up with:

-Mobile pet neutering van. How cool would that be? Saves time and is super convenient. The idea is remarkable enough that it will be spread virally. Besides, what a better way to arouse the interests of people nearby when they see the BarkCare mobile pet neutering van pull into their neighborhood?

-Doggy dating/matchmaking. Sounds crazy? This kind of thing happens all the time and you would be surprised by how many eccentric pet owners are out there doing this. The point is to get people talking and what a better Continue reading "The Purple Cow, Startup Edition #2"

The Purple Cow: Startup Edition #1

image

As a purple cow evangelist, I always have a few crazy ideas that are percolating in my head which is why I started the Purple Cow, Startup Edition. I will take a fledgling startup and come up with a few remarkable ideas. My goal is to encourage creativity and motivate marketers to do something different.

I recently stumbled upon TheSkimm, a startup I think that can  change the way we read and absorb news.

-Highly localized skimming. World news is nice but knowing whats happening locally is even better. Maybe a new celebrity chef is opening up a new eatery in Soho. Or maybe there is a crazy dancing guy that started blazing a trail in Manhattan. I would love Skimms like that!

-Friends only Skimm newsletter. Most of the news I read actually comes directly from my Facebook feed so why not allow Skimm users to create their own Skimms that can only be seen by their friends?

-I love it when my friends post status updates about their new job or fancy new car. Create a platform that allows them to tell those stories using the Skimm template.

And of course, if you want your friends to know all the juicy stories of your life, you will have to tell them to download and use theSkimm app - as in other words, a great viral loop to increase the readership base!

-Good news only Skimm

-Genre based Skimms i.e Fashion, sports, art, music, tech etc.

-Surprise Skimms. Allow users to make special Skimms for things like marriage proposals.

-Comics. Yup, a news feed is not complete without a funny comic to compliment it everyday. Just look at how infamous the New Yorker cartoons have been. TheSkimm should have their own unique comics that matches their brand.

-Be outrageously opinionated. The former newscaster, Peter Griffin said it best when he openly asked “You know what really grinds my gears?”. TheSkimm should have its own version of this and do it in their own tongue and cheek way.

Chasing Unicorns #3 NYC Edition

image

Pijon, Modalyst and Kid & Coe are part of this weeks special NYC edition of Chasing Unicorns.

image

What

Kid & Coe is travel platform dedicated to families only

Problem

When you think of a family vacation, a trip to Ibiza or Cancun on spring break doesn’t exactly come to mind. In reality, it’s hard for hotels and resorts to be parent and kid friendly at the same time. If you stay at a hotel catered to adults, you can expect your hellraising kids to suffer a serious case of ADD and hyperactivity. If you stay at a place catered more to kids, well you can forget about having any sexy time with the wifey

Family vacations are also a huge market and yet no one seems to have a lock on how to serve both families and kids

Problem Solved

Kid & Coe offers a selection of travel destinations strictly catered to families. They will set you up with a host property that is family friendly

image

Secret Sauce

The properties are highly curated and provides an awesome alternative to resorts and hotels. Really great branding. Buy-out potential from big travel companies like Expedia

Issues

It looks like most of the properties offered are expensive and meant for more affluent families. Needs to offer more affordable properties in order to capture a bigger market

  Unicorn Rating

image

imageWhat

Modalyst is an online, wholesale marketplace where fashion designers can hook up with retailers

Problem

Imagine you are a brand new fashion designer with some swanky looking couture that’s looking to dress the right person. But there are literally thousands of boutiques and almost no way to reach them

Problem Solved

Modalyst is basically the middleman and matches those designers with stores who are more than eager to pad their inventory with the newest and trendiest designs

image

Secret Sauce

Modalyst levels the playing field by giving small, independent boutiques the same buying power as large department stores by creating the opportunity for boutiques to bulk buy alongside their other counterparts

Issues

The service might not be defensible in the long run because competitors can swoop in and create an equal or better service

 Unicorn Rating
image

image

What

Pijon is not just a monthly care package for college students – it’s a box filled with love

Problem

College students are often ill-equipped to handle campus life and lack the resources to make sure their transition from home to dorm room is smooth and easy

Problem Solved

Pijon sends college students boxes filled with love and awesomeness to ensure they have the shit they need to survive college. The box comes with an assortment of goodies like healthy snacks all the way to deodorant

Secret Sauce

image
Continue reading "Chasing Unicorns #3 NYC Edition"

The Most Important Takeaway of Todays Huge Buyout of WhatsApp

These days, the Zuck seems to be doling out cash and making it rain even better than the most eccentric Russian millionaires.

But Facebook’s monstrous buyout of WhatsApp also proves a few things:

  1. Zuckerberg is swimming in unhealthy sums of cash
  2. WhatsApp is probably the greatest messaging app of all time
  3. Startups don’t actually need a whole lot of funding to become a billion dollar company

Wait a second, what was that 3rd one again?

UPDATE: well, it turns out WhatsApp wasn’t that cash strapped after all with a reported 60 million in total funding over the years led by original investor, Sequoia. Still, turning $60 million in funding to a 19 billion acquisition is nothing to sneeze at.

Yes, today’s 19 billion dollar buyout was historical and unheard of, but the greater takeaway is the fact that WhatsApp was able to use their funds with such striking efficiency.

In a day and age when wee little startups with barely a product and no revenues are getting huge VC dollars and over the top valuations, the founders of WhatsApp managed to get by these past few years on just $8 million $60 million from Sequoia.

Although I am not privy to the inner workings of WhatsApp and its financials, the fact that they made it all work with a modest funding is a testament to Brian and Jan’s ability to run a tight ship. This is in stark contrast to most startup founders who instead, find themselves jumping off their ships while its burning due to dwindling cash reserves.

When we look at companies like FAB who received $336 Million in funding but are struggling to even stay in the black, its easy to see what happens when you are capital efficient.

Did I also mention that WhatsApp has only 55 employees?

It amazes me how the allure of large funding rounds continues to create spend happy startups who are more than eager to blow that first check on trendy, froufrou offices complete with the most expensive Apple products and company branded swag.

WhatsApp on the other hand, was not so easily seduced.

It’s graffiti filled Mountain View offices are sobering compared to the gaudy workspaces of most Silicon Valley startups. They don’t have a sign at the front door, no logos or branding of any kind that would indicate the existence of a fledgling startup, let alone one that is worth billions of dollars. 

image

Instead, the space was meant to focus its employees on building the best product possible without being in the spotlight.

And what a company they’ve built!

In the end, you can’t help but applaud the founders for what they’ve accomplished. The funding they received Continue reading "The Most Important Takeaway of Todays Huge Buyout of WhatsApp"

The Most Important Takeaway of Todays Huge Buyout of WhatsApp

These days, the Zuck seems to be doling out cash and making it rain even better than the most eccentric Russian millionaires.

But Facebook’s monstrous buyout of WhatsApp also proves a few things:

  1. Zuckerberg is swimming in unhealthy sums of cash
  2. WhatsApp is probably the greatest messaging app of all time
  3. Startups don’t actually need a whole lot of funding to become a billion dollar company

Wait a second, what was that 3rd one again?

UPDATE: well, it turns out WhatsApp wasn’t that cash strapped after all with a reported 60 million in total funding over the years led by original investor, Sequoia. Still, turning $60 million in funding to a 19 billion acquisition is nothing to sneeze at.

Yes, today’s 19 billion dollar buyout was historical and unheard of, but the greater takeaway is the fact that WhatsApp was able to use their funds with such striking efficiency.

In

image
Continue reading "The Most Important Takeaway of Todays Huge Buyout of WhatsApp"

Chasing Unicorns #2 STD’s & Mastering Time Edition

image

Welcome to the 2nd edition of Chasing Unicorns. Last week was the special Valentines Day edition and the first of many Chasing Unicorn features where I will be busting out my dealflow for all to see.

In this post, I will showcase 3 startups that are tackling problems like STD’s and rental management. There’s even a startup that can help you become a master of time!

Once again every startup is rated on a scale of 1-3 (think Michelin Stars for restaurants).


image


What

myLab is a subscription service that sends you a home kit to test for STD’s

Problem

Imagine you are one of the millions of libidinal adults out there trying to get lucky. After kicking back a few shots at the bar, you chat up the next girl you see and in your drunken stupor, convince her to go back home with you.

The problem is, you don’t know anything about her genitals and where they’ve been - she could be a floosie for all you know!

The fact is, most sexually active adults don’t often get tested because the process is time consuming, expensive and slightly embarrassing.

Problem Solved

A testing kit for STD’s that you can use with ease in the comfort of your own home.

Secret Sauce

Incredible branding opportunity. I can see myLab becoming a funny, tongue in cheek brand on the same level as Trojan and Lifestyle condoms.

myLab can create their own app that allows impassioned men and women to quickly screen their one night stand for STD’s. This can definitely make myLab a household name.

Issues

Might have to deal with the wrath of the FDA like 23andMe

myLab Angel List

  UNICORN RATING
image

image

What

Limitless is a Chrome plugin that helps you master time and to be more productive

Problem

Whether you are facebooking, tweeting, snapchatting, sexting or trying to conquer Flappy Bird, digital distractions cause millions of hours of lost productivity.

Problem Solved

Limitless is looking to be a modern digital tool to keep you from twiddling your thumbs and use your time more wisely.

Secret Sauce

Slick interface. Looks easy to use on a daily basis. Monetization could come in the form of gamification and offering sponsored rewards for achieving your time related goals.

My Remarkable Idea

Create a “Anti-Boredom” or “Procrastination Killer” feature that users can use to be productive in times when there is literally nothing for them to do. For example, it can link them to useful things like TED talks or ask them to do a random act of kindness.

Issues

Needs better branding and to establish its identity. User engagement is important too - don’t want the software to come off as nagging.

image
image
image
Continue reading "Chasing Unicorns #2 STD’s & Mastering Time Edition"

Just in time for Valentines day, this special edition of Chasing Unicorns is all about the business…

image

Just in time for Valentines day, this special edition of Chasing Unicorns is all about the business of love.

As always, ratings are from a scale of 1-3 like Michelin stars.


image

I’ve come across dozens of wedding startups and it’s easy to see why there are so many of them - weddings are big business. But the very appropriately named, Carats & Cake might be the one that makes the biggest splash.

Problem

It’s easy to look past the flowers, decorations and cheesy DJ - but all those things took months of meticulous planning and execution. Not to mention weddings cost an assload. So what are a groom and bride to do?

Weddings have many separate parts and they are all demanding your attention at the same time.

Problem Solved

Carats & Cakes helps you organize all those running parts together by providing a collection of vendors ranging from caterers to photographers. Just search for what you need and rest assured that you are getting exactly what you want thanks to vendor reviews by recent newlyweds.

Secret Sauce

Beautiful UI and design - you can’t get any better than this when it comes to branding. What stood out to me the most was Carats & Cakes focus on storytelling. It’s tough to visualize your own wedding so they put it all into context by showing, in great detail,  weddings from other couples. It’s the perfect way to get inspiration and cool ideas for your big day.

Even as a man in my late 20’s with no intentions of seeking wedded bliss anytime soon, I couldn’t help but get sucked into the website and browsing all the cool ass weddings.

Issues

There is still competition with dozens of other wedding startups all trying to get in on the action.

Could use more transparency when it comes to vendor prices because costs are a huge factor when it comes to wedding planning. I would like to see vendors publicly list their prices on the site to help steer couples towards the right ones.

   UNICORN RATING
image

image

I came across Dipify by pure happenstance - fitting considering what this startup is trying to achieve.

In a nutshell, the Thai team behind this app is trying to digitize serendipity by setting up strangers through coincidences.

Problem

Love is usually discovered in unusual and unexpected ways. The problem is, how can you engineer that process and use it to find meaningful connections?

Problem Solved

Dipify uses multiple data points such as your real time location, social media updates and even what you are watching on Youtube as a way to match you up with someone who is doing the exact same thing you are.

Secret

image
image
image
Continue reading "Just in time for Valentines day, this special edition of Chasing Unicorns is all about the business…"