Times have changed — going after dollars vs minutes

Just finished the first month back in the VC saddle at Greylock. After three and a half years away from the VC scene, I feel like I finally understand the description of “drinking from the firehose”. It’s amazing how much has changed in this short time.

To help get my footing, one of the first things I did when I got started was go through the top 100 US rankings in AppAnnie to see what I’d “missed” while I’d been heads down at Pinterest. I defined “missed” as independent companies that had their Series A from Jan 2012 to the present.

I counted seven companies that have managed to break through the top 100: Snapchat, Seriously, Ibotta, Draftkings, Dubsmash, Wish, and OfferUp.
To compare, I did the same analysis for when I joined Pinterest 3.5 years ago, and looked at companies that had raised a Series A since July
Continue reading "Times have changed — going after dollars vs minutes"

The Daily Startup: CarLister Joins Race for Car-Sales Tech With Seed Funding

dailystartup_D_20090806101628.jpgArt by Mike Lucas
CarLister, which was built by the company DreamWare Inc., has raised $6.5 million in seed funding from individuals and added former Morgan Stanley President Bob Scott as its chairman, Lizette Chapman reports for Dow Jones VentureWire. The startup will join TrueCar and Cars.com, and newer efforts by Beepi and Shift Technologies, as tech companies are providing platforms to enable easier and more-complete vehicle searchers, increased pricing transparency and speedier service for both buyers and sellers. CarLister’s service is designed to help dealers and individuals list cars for sale by providing VIN numbers and answering a series of questions. ALSO IN TODAY’S VENTUREWIRE (subscription required): Unum Therapeutics has raised $65 million in Series B financing to expand its pipeline of immuno-therapeutics for cancer. New investor New Leaf Venture Partners led the round, which also included new investors Brace Pharma Capital, Continue reading "The Daily Startup: CarLister Joins Race for Car-Sales Tech With Seed Funding"

"Did you learn anything useful in VC?"

It's been more than a year and a half since I left Bessemer to join Pinterest (not to mention blogged!). Since then, I've taken quite a few meetings and phone calls from junior VCs or MBAs asking about my transition from VC to operating. By far, the most common question I get from this bunch is something along the lines of "Did you learn anything actually useful in VC?"

Yes.

1. You learn how to ask the right questions. Anyone can ask questions. But learning how to ask the right questions -- to use questions as a mechanism to uncover the hidden truth in a company's business model, or the trade-off's in an engineer's architecture, that comes with training. VCs spend a huge amount of their time asking questions, and thus learn the craft of asking the right questions. This skill has been enormously valuable to me as I transitioned to Pinterest.

2. You learn how to read people. In my first performance review at Bessemer, people judgment was one of my weaknesses. I'd now say it's one of my strengths. As a VC, you're constantly meeting founders and building your pattern recognition for reading people. This skillset is particularly useful when you're in a business or corporate development role, but as with asking the right questions, it's one of those horizontal skills that will serve you anywhere.

3. You learn how to learn. In VC, you're constantly ramping up in a new area. Each company you evaluate brings with it its own ecosystem that you need to understand. Similarly, trends in the tech ecosystem turnover so quickly, that if you ever stop adapting and learning, you'll quickly become a dinosaur and won't know a Snapchat when you meet one. That drive to constantly learn will help you adapt to new environments and challenges.

There's a flipside to these three though:

1. In startups, you've got to answer the questions. One thing I learned early on at Pinterest is that my muscle for asking questions was a lot stronger than my muscle for answering them. As with asking questions, there's an art to answering questions well. It's been good to exercise this skill.

2. You don't learn how to read an organization. VC firms tend to be smaller partnerships. Although Bessemer was about 45 people when I left, I was never in an office with more than ten people. As Pinterest has grown from 30-odd people when I joined to more than 200, I've had to learn how to navigate a company. People who have come from larger companies definitely have a leg up in this regard.

3. You're not specialized. VCs rarely specialize. Sure - I knew the e-commerce ecosystem cold, met with countless consumer companies, and quite a few adtech companies, but that doesn't compare to spending several years working at Google. But you've got to start somewhere...

Good luck!

Hiring an Associate at Bessemer

We are looking to hire an Associate to join me and my colleague Jeremy Levine at Bessemer.  This is a Silicon Valley-based opportunity, though we anticipate that it will involve frequent and extended travel to New York, at least initially.

As an Associate you will actively participate in all stages of identifying and evaluating investment opportunities while supporting Jeremy and me in our ongoing involvement with portfolio companies. We spend most of our time looking at opportunities in the cloud computing, internet, e-commerce and consumer web space.

Here’s what we’re looking for:
  • Smart and Curious: You must have superior intellectual horsepower with a track record of good judgment and curiosity. As an Associate, you’ll be prosecuting all stages of due diligence from financial analysis to customer references. You’ll be writing investment recommendations for the partnership. You’ll be gathering and synthesizing data and analysis. You will be developing deep industry knowledge and contacts while creatively constructing new investment strategies. You’ll be doing all these things without a formal training program and limited supervision. 
  • Hungry and Driven: You must be hungry and driven but also a pleasure to be around. Most often, people who have always been hungry and driven attend elite colleges or accomplish unique and extraordinary things. But graduate degrees are purely optional; neither of us have an MBA, so you certainly don’t need one. In fact, our target is someone with as few as two years of experience after college or as much as six years (including a graduate degree).
  • Passionate, Humble, and Helpful: A lot of people want to work in VC for the wrong reasons. I regret to inform you that Bessemer does not have a corporate jet. Instead, a big part of this job is about getting out there in the community and networking to develop relationships with entrepreneurs and talented individuals. You must be passionate about start-ups to do this authentically. If you are excited about this opportunity because you love working with and helping entrepreneurs, analyzing businesses, or experimenting with the newest gadget, then let’s talk. 

Think this describes you? Here’s how to apply:

We’ve noticed that people who are successful in VC have already formed relationships with people in technology and are incredibly resourceful. Therefore, if you can manage a personal introduction to Jeremy or me from someone we know, we would strongly encourage it. Please include a resume with the introduction.

The Developer Renaissance

What an exciting time to be in this business.  The “post PC era” and cloud computing are colliding to create a perfect storm. First, thanks to the post PC era, demand for software is exploding. Second, thanks to cloud computing, software development is becoming increasingly accessible.

There's an interesting positive externality to these trends: The developer "citizenship" is exploding.  Consequently, developers are finally a large enough community with enough purchasing power that you can actually build a company just by selling to developers.  I'd love to invest in companies doing just that.

In this post, I'll provide a little color on the two trends, and then, in the interest of feedback or thoughts, I'll outline three areas in which I’m particularly interested.  This is an investment road map in progress, so would  truly welcome any feedback.

Exploding Demand

In the late Mainframe Era, developing an application was a real team effort, access to mainframes was restricted, and given the expense to purchase a mainframe, not to mention maintain it, the number of computers for every person was exceedingly low. Then the PC era came upon us -- computers got cheap enough that suddenly households could purchase them and the number of computers per person, while probably less than 1 computer:3 people, started to rise. With that increase in the number of computers, demand for applications started to tick up. People needed a word processing application, a browser, some games… you get the picture. But because there was a very small number of application platforms (Windows, Apple), and a small number of computers relative to the number of people, demand was capped.

Now we’ve entered a new, fascinating era in software development: the alleged “post-pc” era. Computers are now a fraction of the cost for a multiple of the power. Even the computers we hold in our hands (smartphones) are more powerful than the computers we once had on our desks ten years ago. Consequently, the ratio of computers to people is inversing. Whereas multiple people used to share a single computer, now it’s not uncommon for a single person to have multiple computers. Compounding this trend, applications are no longer limited to just Windows or Apple’s OS. Everywhere you look there is a new application platform. iOS. Android. Blackberry. Facebook. Force.com. Wordpress. Twitter. Drupal. Box. Shopify. Samsung. Heck – even automobiles like BMW are trying to get in the game!



Each platform requires its own suite of applications.  Consequently, the demand for applications has exploded.


“Democratization” of Software Development

Increasing demand by itself will always create an increase in supply. But there is another trend that is making this process happen even faster: software development is getting democratized. It used to take a team of developers to build an application, and software development was a highly specialized skill. Now, self-taught programmers abound, and developers can launch new applications after just a weekend’s worth of work. As my colleague David Cowan outlined back in 2008 his Internet Law:
“The Continue reading "The Developer Renaissance"