Three Not So Obvious Learnings from 8 Years in VC

Around this time 8 years ago, I joined Spark Capital and started this chapter of my career in Venture Capital.  About three years later, I started NextView with Dave and Lee.  I knew very little about VC when I started, and as the old adage goes, the more I learn, the more I realize I don’t know.

8 years is a decent about of time, and it’s been an interesting period. We had the tail end of Web 2.0, probably one of the biggest economic collapse I’ll see in my lifetime, and the current bull-market in tech and startups.  But I’m still relatively new to the industry so I have a ton more to learn every day.

As Tim Devane joined us recently, we’ve been talking a bit about lessons learned, and I’ve been thinking back a bit more on the non-obvious discoveries I’ve had since I entered this industry. Continue reading “Three Not So Obvious Learnings from 8 Years in VC”

Market Size

The number 2 more frequent reason why VC’s pass on an investment opportunity is some version of “it’s not big enough“. For a VC to generate a great fund-level return, they need to invest in companies that have billions of dollars of enterprise value. In order to do that, most VC’s decide that each one of their investments need to at least have the potential to have an exit of that size, even if it’s very unlikely to be the case for any single investment.

Here’s the thing, most really exciting companies seemed “not big enough” to a lot of investors, especially really early on. Chances are, your company will run into this objection when you speak to investors. The reason is that a lot of startups are going after markets that don’t currently exist. The other interesting thing is that when a fund does invest in something Continue reading “Market Size”

On Zirtual, the Market, and Back to the Future

It’s been an interesting few weeks in the startup world.  The chatter around Zirtual quickly moved on to the market correction and general nervousness all around.

During this time, I happened to catch the second half of Back To The Future II on TV (yes, I still watch normal TV now and then).  This made me think of an analogy that Angus Davis shared at an Angel Investing event a few years back. Angus is the founder of our portfolio company Swipely, and was the co-founder of TellMe Networks.

Angus’ analogy is that running an early stage startup can be compared to driving Doc Brown’s Delorean in Back to the Future. The Delorean can only travel through time if it reaches 88mph, but inevitably, there is a cliff or a brick wall or some other obstruction ahead. Can the car get to 88mph with the limited runway? Unclear, but the only chance

great scott

Continue reading “On Zirtual, the Market, and Back to the Future”

Announcing Our Investment in Scratch

I’m really excited to announce our recent investment in Scratch.  You can read some coverage here.

The problem that Scratch is solving is something that is quite near and dear to my heart. Since I’ve worked in the consumer internet space, I’ve been interested in the problem of product discovery. How do you select from the vast choice presented by the internet? How do you find the right thing in subjective, taste-driven categories? How do you shop for people when you don’t know exactly what they would want? And how do you do this all in a way that is fun, and doesn’t take forever?

This was something I thought about a lot at Ebay (12+ years ago). The beauty of Ebay was the vast selection of all sorts of products. But this selection was also the reason discovery was so difficult. Fast forward to day, and everyone buys online Continue reading “Announcing Our Investment in Scratch”

Voice

I’m starting to get really interested in voice as a major computing interface. Prior to my Apple Watch, I rarely ever used Siri. But I find I’ve been using voice more and more, and my experiences with the Echo and the rise of more apps that utilize a conversational interface make me pretty excited about this new communication medium. A couple thoughts/questions.

Interface: Voice is a funny interface. It’s super flexible in some ways, but really limited in others. It’s potentially insanely convenient, but also really clunky. I think that there are two shifts that usher in the more mainstream adoption of voice as an interface (in addition to improvements in the actual language processing and AI). The first is convenience and speed. I think that consumer adoption of new interfaces like these exhibit sort of a convenience tipping point. 20% more convenient drives next to zero usage, but perhaps

:)

Continue reading “Voice”

Diligence

When an investor “does work” on a potential investment, it usually means engaging in some form of due diligence.

One of my favorite VC sayings is from an investor that has said that “due diligence is something VC’s do very studiously when they want to kill a deal”.

I’ve often quoted this, half joking, half in truth. Especially in the early stages of investing, it’s super easy to do due diligence to the point where a “no” is obvious. There is always some major flaw in every company, and doing some cursory due diligence usually uncovers this. Too much due diligence creates conservatism which is poison to venture capital.

But as I mentioned in my last post, I’m trying to think more deeply about this these days. We talked about this as a team recently, and the opposite idea emerged. The point of “doing work” as a VC isn’t due Continue reading “Diligence”

Getting Beneath the Surface

I find that almost all startups look much worse beneath the surface than they first appear. I think this is particularly true of stuff with hyper-growth or really impressive top-line numbers. It’s also particularly true as founders have become more adept at telling their stories and communicating what they’ve done and what they plan to do to investors.

One of the things that you learn to do pretty quickly as an investor is get beneath the surface. You learn to pretty quickly uncover the hidden tells, or soft assumptions of a business or of customer data. As the venture market has gotten more efficient, many (if not most) investments get priced to the point where there is almost always heartburn around a decision. This is why for every great company, there are many investors that could have had a chance to invest but did not, at least at some point Continue reading “Getting Beneath the Surface”

Welcoming Tim Devane to the NextView Team!

Dave, Lee, Jay, and I are really excited to announce that Tim Devane has joined our team!  Tim is a Principal with NextView and is our first team member based full-time in New York.

Since the founding of NextView, we’ve been excited about the New York market and a big chunk of our portfolio is New York based. We’ve been fortunate to partner with some great entrepreneurs and invest in terrific companies like TapCommerce, Sunrise, and TripleLift, and bring on some great NY based advisors like Mark Josephson and Stephano Kim. Although we are excited about what we’ve done so far, we also know that there is nothing like having a permanent presence to be able to have the impact that we want to have in such a vibrant tech community. So bringing on someone full-time in NY and deepening our engagement in the NY tech market was a Continue reading “Welcoming Tim Devane to the NextView Team!”

Some Interesting Marketing Learnings from Naturebox (via our new podcast)

We recently launched our new Podcast “Traction”. Check it out here.

One of my recent interviews was with Ken Chen, the co-founder and CMO at Naturebox. The company is doing great and Ken is a very strong performance marketer. There were a couple interesting tidbits that I learned from our conversation that is particularly relevant to early stage companies, and I thought I’d try to crystallize a few learnings on my blog as a companion to the podcast.  The link to this specific episode is here.

Learning #1 was how to think about non-performance channels. I think it’s always a tricky question at the early stage how much to invest in stuff like PR, social, influencer marketing, etc.  Ken talked about how Naturebox invested pretty heavily in influencer marketing and other brand channels. The way he thinks about it is that these tactics help your marketing dollars “work harder”. The Continue reading “Some Interesting Marketing Learnings from Naturebox (via our new podcast)”

Introducing Traction, the NextView Ventures Podcast

This post was originally published on the NextView blog, The View From Seed.

Today, we are excited to announce the launch of our new podcast TRACTION. On the show, we’ll explore and share the stories of all the creative, unusual, and clever ways that entrepreneurs find early results.

We’ll talk to founders as well as executives, investors, and journalists, all of whom did something smart or sneaky or downright brilliant to go from zero to one in an important area of their business.

Everyone likes to say that startups should do things that don’t scale. So we wondered – what ARE those things?

You can subscribe via iTunes, SoundCloud, or Stitcher.

Traction - NextView Ventures Podcast

Why Does the World Need Another Tech Podcast?

Yes, there are other tech podcasts out there that do a great job talking about industry trends, strategy, and founders’ stories. We find that these are great, and I

:)

Continue reading “Introducing Traction, the NextView Ventures Podcast”

If This is a Bubble, Why Does It Feel So Damn Hard?

Are we in a Bubble? Maybe, maybe not. We are certainly closer to a peak than we are to a trough. You read about it, people talk about it, and it’s reflected in financings left and right.

Sure, companies are imploding or having troubles too. Newly public companies have big first-day jumps, and equally big first-earnings-call collapses. Overfunded startups fail to achieve their promise and people jump ship. But then, you hear about another unicorn, and other mega round, another company that seems to be getting traction when the underlying business seems to be a total head scratcher.

In the midst of all this, you are building your own company, and it’s hard as hell. It seems like there is a bubble, but then, why does it seem so damn hard?

It turns out, outside of a very small minority of companies, what you feel is probably more like what Continue reading “If This is a Bubble, Why Does It Feel So Damn Hard?”

My First Magic Moment with the Apple Watch

I’ve had the apple watch for a couple weeks now and my experience has been mixed. My quick initial thoughts:

  • It’s a beautiful watch. It feels great (I have the larger size screen, aluminum case, with the white sportsband). The band feels really comfortable, like the size and feel quite a bit.
  • The battery life on the watch is great, but the drain on my iphone so far has been noticeable. I think I’ve lost about 10% of my daily battery life since I’ve been using the watch, maybe more as I’ve started to rely on it a bit more.
  • The software is a bit sluggish. That includes both the speed at which the watch face actually activates as you turn your wrist to check the time, as well as the lag as the watch communicates with the phone to process most tasks. I often question whether I’m actually saving Continue reading “My First Magic Moment with the Apple Watch”

Building a Company With The Wind At Your Back

It’s immensely easier to get a company going successfully when the wind is at your back. I’ve heard a number of different investors say something akin to this, and I totally agree.

Some quick disparate thoughts:

1. Building a company with the wind at your back does NOT mean you aren’t being contrarian. Contrarians can see positive tailwinds when others miss them, or think that markets will shift differently from conventional wisdom. This is something that I’ve actually had a hard time understanding, because I am by nature one who tries to think differently.

2. Building a company with the wind at your back does NOT mean pouncing on emerging trends. I sometimes see founders highlight now their company is in lock-step of big trends, and then point to successful companies that are leading those trends as evidence. That does not make me think that the wind is at your Continue reading “Building a Company With The Wind At Your Back”

The Unexpected Benefits of Random Change

I had a meal with a friend of mine a few weeks ago who had been in a bit of a funk for the last year or so.  He has two young kids that take up a lot of time and he does great but emotionally exhausting work (he’s an oncologist).  I noticed that he was in a much lighter mood, and I asked him why that was the case.  He said that a few months ago (in the dead of winter) he decided to take stock of many areas of his life, big and small, and just make changes.  This included both mundane, routine stuff (what he did first when he got out of bed) to work behaviors (where he decided to focus his research efforts) to personal stuff too.  It wasn’t so much that any particular change was necessarily better, in fact, some were pretty random.  But the Continue reading “The Unexpected Benefits of Random Change”

What Have I Not Asked That I Should Be Asking?

Very quick follow-up post to my article on Techcrunch.

There was a discussion between @joshelman and @pingupceo who brought up a question that he was recently asked that goes:

“What have I not asked that I should be asking?”

Josh mentioned that this is something that he asks often, and my partner Dave asks this question occasionally as well.

The question can seem a bit tricky because it’s so open ended.  You don’t want to say the wrong thing, nor do you want to evade the question.  How does one handle this?

The question becomes much easier when you think of it as an opportunity, not a trick. The opportunity is to do one of the following:

1. Show off something great about your team or your business that hasn’t come up yet. Usually, something that isn’t obvious, but is totally to your advantage.

2. Bring up an obvious Continue reading “What Have I Not Asked That I Should Be Asking?”

Ain’t Nothing Like The Real Thing

A problem that I often see founders and investors make is to project their opinion on new products and ideas without really giving them a shot themselves. I see this happen in particular when something comes out that is threatening to one’s own efforts or one’s way of seeing the world.

I do this myself.  I’m actually not naturally an early adopter, and I’m pretty comfortable trying to mentally analyze a situation, and make conclusions of how things will unfold without needing to try stuff first hand. Sometimes I’m right, but I’m also often wrong.  I think it’s a weakness of mine that I try to over-think a situation rather than just learning by doing.

I made a resolution a few months ago to push myself to suspend judgement and just try new stuff more.  This includes using new services and technology, but also to “launch” stuff more often and more quickly Continue reading “Ain’t Nothing Like The Real Thing”

Technology Leverage

I hosted a group of HBS students in a tour of startups in downtown Boston a couple weeks ago. It was a fun trek, that had us visit Dataxu, Localytics, and near-unicorn DraftKings.  We ended the trek chatting  with Paul English, the co-founder of Kayak at his venture foundry Blade.

It was great to hear the inside story of some really interesting companies, including two that have just raised substantial dough and are looking to expand their business and teams significantly in the coming years. Some of these companies have extraordinary growth rates and are poised for really great things. Most are looking to have teams that will be over 200 people over the next year or two, probably quite a bit larger in some instances.

But what I was most struck by was a stat that Paul English shared. When Kayak went public, the company had one of the highest revenue/employee Continue reading “Technology Leverage”

Congratulations to Jay our VP of Platform

I’m excited to announce that we have promoted Jay Acunzo to Vice President of Platform at NextView.

When we hired Jay to be Boston’s first VC head of platform, we were super excited about what we thought he could do for the NextView portfolio and broader tech community. That said, it was an amorphous role for everyone, and an exploration as a team about what Platform ought to mean for a high-conviction hands-on seed investor like ourselves.

Jay hit the ground running. He has not only multiplied our activities and effort, he has helped us craft a focused strategy about the mission of our platform with a maniacal focus on results.  Rather than just throw a bunch of people in a room for random networking purposes, Jay has embraced our ethos here at NextView to be authentic contributors to the community and to be systematic in these efforts. He’s done a Continue reading “Congratulations to Jay our VP of Platform”

Feeling Blessed

I’m feeling particularly blessed today. And it’s not just because it’s Good Friday.

Nancy has been traveling a bunch the last month. I think she was gone 14 nights in the past 30 days. It was pretty tough with my own travel schedule, but we got through it and am really glad that she’s back for a while. I’m grateful that we have great help and support through my in-laws and our au pair who allow us to handle these sorts of life fluctuations.

My daughters have been amazing, and I’m shocked at how quickly they are growing up. Yesterday, I was knocked out with food poisoning. I was in rough shape. But the girls were really sweet. They brought me food and drinks. They checked in to see how I was, but didn’t try to pull me out of bed to take care of them. A couple times, they Continue reading “Feeling Blessed”

Disrupting Gillette

I found myself giving a couple different personal care companies a try recently. One was Harry’s, and the other was Walker & Co. These experiments stemmed not from my dissatisfaction with my current product (a Gillette Fusion pro-glide), but my general interest in disruptive innovation.

I am coming at this question from an interesting perspective. My wife is an alum of Gillette, and was around to see the transition of that company as it changed hands and became a part of P&G. As a result, I have a couple unique POV’s.

1. I happen to be pretty indifferent to price at the moment, given that I have a healthy supply of razors at home and my hair is such that I don’t really need to switch that often.

2. I have tremendous appreciation for the level of science and innovation that have gone into the best-of-breed Gillette products. As Jeff Raider from Harry’s remarked to me when we chatted on the phone, this isn’t like the eye-glass industry. There is real IP and decades of effort around optimizing performance that the new players need to deal with.

3. That said, I see P&G as struggling immensely to manage this business. Gillette was largely a performance and product driven company, and P&G is a mass brand-driven company. This has led to confusing market positioning, stalled innovation in product development, and a mega-mass market focus that I think make the category super vulnerable.

So, what did I think of these experiences?

I think Harry’s is a solid product, with beautiful branding. But there are a couple product issues that I know the team there is working hard to address. I believe these are solvable, and the fact that Harry’s owns their own facility gives them a shot to be a performance player over time. I haven’t tried Dollar Shave Club, but it will be interesting to see how this approach unfolds. DSC seems like the low-end player disrupting largely on price and go-to-market, and it seems to be working well given their recent market share numbers. But Harry’s is making the bet that ultimately, they can be the next-gen Gillette – a performance oriented product with a more aspirational brand (and hopefully, still cheaper prices).  Will Harry’s be able to deliver on this brand promise?  Will DSC need to start spending a lot more on product innovation or else see marketing efficiency and retention decline? Time will tell.

But I think the most interesting company in this category is Walker and Company. I gave their product Bevel a try, and found it really cool. When big incumbents are disrupted, the successful new company often goes after a niche market and beats Continue reading “Disrupting Gillette”