Building Enduring Value

Jackson Square Ventures hosted our annual CEO summit on Thursday, Jan 28th.  We had many of our portfolio CEOs in attendance at our office in downtown SF.  We invited a guest speaker, Pat Connolly, EVP at Williams-Sonoma; we had a panel discussion with Mark Gainey, CEO at Strava, and Tom Gonser, founder of Docusign; small group discussions; and we had a happy hour with enduring brands Anchor Brewing Company and Boudin Bakery.   The theme of the day was “Building Enduring Value” and it resonated throughout our portfolio as every company in attendance deals with similar challenges, despite the wide array of company stages, industries, and sectors.  Pat Connolly spoke of his 37 year journey with Williams-Sonoma, growing the brand from a single store and a few million in revenue to the brand it is today, doing north of $4B in annual revenue with over $500M
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The Almost On-Demand Economy

Or… why you should stop trying to copy Uber and come up with a model that makes sense.   Obviously there are a ton of Uber for X startups out there.  It’s become fashionable to call everything part of the on-demand economy.   While the on-demand economy feels like all sunshine and roses for consumers, there lurks a danger of unsustainability in on-demand startups.  If we want some of these wonderful VC-funded miracles to last in our lives, we need to change the demands a bit as consumers.  And “on-demand” startups need to wise up and provide “almost on-demand” solutions that meet the needs of the consumer while enabling a profitable business model.  The joke around San Francisco nowadays is that there is a transfer of wealth going on from VCs to consumers because VCs are funding these negative gross margin businesses like free food, delivery, parking, rides, etc. 
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OfferUp Series A


The world just recently learned about the phenomenal growth of OfferUp, as reported last week at New York Times, Forbes, and Geekwire.  We at Jackson Square Ventures first met the founders Nick Huzar and Arean van Veelen over 3 years ago and later led their Series A round in August 2013.  We’ve been thrilled to be part of the incredible journey so far, and we’re confident that OfferUp is building one of the next great marketplace brands.  OfferUp’s vision is to revolutionize local buying and selling – making it simpler and more trusted than ever before.   I want to tell the story of their Series A financing.  Let’s rewind to 2013 and talk about why we invested and how we saw the early network effects of the business. In late 2012, OfferUp did not have significant traction. I met with Nick and talked about the business. Continue reading "OfferUp Series A"

Don’t Buy the Hype


“People calculate too much and think too little”  – Charlie Munger

One of the core principles of Jackson Square Ventures is that we don’t buy hype.  Don’t get me wrong – we love it when a company in our portfolio does exceptionally well and receives a lot of attention.  We try to avoid buying hype when there is no substance - we look out for it before we ever invest.  We try to avoid buying the sizzle when there is no steak.  Let’s talk about how to do that. First – let’s understand the source of hype in the first place.  Why does hype occur? How does it spread?   Incubators and accelerators are breeding grounds of hype - they put lists of companies out there and have a demo day to display their wares.  Angellist is a breeding ground for hype – so are Mattermark and CBInsights and Product
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Meet Jackson Square Ventures

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Today we announce Jackson Square Ventures.  We are an all-partner VC firm focused on Series A financings for SaaS and marketplace startups from our offices in the heart of the startup ecosystem in San Francisco at Jackson Square.
You may know a few of the companies in our portfolio, such as Docusign, Strava, and oDesk (now Upwork). You may know my fellow partners Greg Gretsch, Pete Solvik, and Bob Spinner. You may know the name Sigma West.   We spun out of Sigma Partners in 2011 and named ourselves Sigma West to hold the history of the firm, but it turns out that being tied to the legacy name created confusion.  We probably should have done this before, but now we are choosing a name that fits us.  We are Jackson Square Ventures.   There are three things you should know about Jackson Square Ventures. 1) We were all operators. Continue reading "Meet Jackson Square Ventures"

Hourglass of Focus

I’ve now been dispensing advice to startups for several years - whether they want it or not.  I’m sure at least some of it is good advice, and I’m equally certain that some of it has been bad.  I try to reflect on my feedback to see if it was helpful.   One thing I noticed is that I’ve given conflicting advice about focus. At times, I tell founders that they really need to focus more - you need a laser-like focus on your key goals.  Then, other times I encourage founders to do lots of new initiatives which is clearly defocusing.  At first I thought this was all contradictory advice, but in truth, it is not at all.  It is stage-dependent. And it looks like an hourglass.
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At the earliest stages of a startup, the founders are in an exploration phase.  The founder may have a fairly clear vision about Continue reading "Hourglass of Focus"

Vertical or Horizontal

People in the startup ecosystem have been heralding the “unbundling of Craigslist” graphic for years now.  This is the original from Andrew Parker.  The conventional wisdom is to say that horizontal marketplaces will be replaced by vertical marketplaces.  And why not – if you are designing a vertical marketplace you can have the user experience custom tailored to that vertical and provide a better experience.  In theory, that should win in the long run.  However, the reality is that many verticals will be better served by horizontal marketplaces for a long time to come.  

There are two factors that matter most when looking at whether a horizontal or vertical marketplace makes the most sense.  The size of the transaction and the frequency of the purchase.  

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These two factors combine to make a standard matrix.  The upper left is the high price vertical and the lower right is the Continue reading "Vertical or Horizontal"