Who has time for meetings?

A lot of entrepreneurs assume that the initial way to engage with an investor is to *insist* on a meeting. It’s a relatively safe assumption that anyone on the buy side (an investor, an advertiser, an executive at a large company) receives far more requests for meetings than they can follow up on, and are constantly looking for excuses to say “no.”

Synchronous activities, such as phone calls, screencasts, videos, and webex conferences are almost as bad. If you’re trying to get the attention of an investor or exec at a major company, and don’t want to waste either your time or their time, pay very, very close attention to the cost of their time and you’ll fare better. In order of escalation, one should proceed as follows:

– Introduction – have your introducer send them an email *without putting you in the to or cc line.* That way, if the target does not wish to engage, you haven’t put them in the awkward position of having to supply an excuse or a turndown. The introducer protects their ability to be taken seriously this way.

– Once you have a response / interest, send something written for them to look over and offer a phone call, webex, or meeting as next steps. Written always beats a video or screencast, since most intelligent people can read a lot faster than they can listen. A webex demo is a crutch – if your product has to be explained, it probably isn’t ready for the average consumer. And if it’s in beta, you should at least know how to open up a password-protected demo version.

– If the target displays interest in learning more, then you can move to a call or in-person meeting.

People who insist on a webex demo or in-person meeting at the outset are forcing the target to make a high-cost decision, and are subtly signaling that they don’t value their own time, and certainly don’t value the targets’ time. They might think that they are demonstrating persistence, but one wants to see persistence in chasing the product, not in chasing dead-ends.

In short, your high-value targets don’t have time for meetings between un-screened parties, and since you’re busy building a company, you shouldn’t have time for them either.

The Ongoing Data Revolution

In early 2006, I wrote a post titled "The next generation web, scaling and data mining will matter."  In it, I highlighted some thoughts on the future:

I truly believe the next battleground will be based on scaling the back end and more importantly mining all of that clickstream data to offer a better service to users.  Those that can do it cheaply and effectively will win.  The tools are getting more sophisticated, the data sizes are growing exponentially, and companies don't want to break the bank nor wait for Godot to deliver results.

Ok, clickstream data and data mining sound kind of geeky, but with every one of our calls, clicks, and purchases being tracked and logged it is an important topic.  My friend Scott Yara, co-founder and President of Greenplum (full disclosure-my fund is an investor), wrote an interesting post the other day which is more mainstream calling this ongoing revolution the "Your Data" revolution.  

The point here is that data can be a wonderful thing if used the right way and if controlled by us.  For example, Scott points out;

Your Data can lead you home with turn-by-turn directions on Mapquest. It can find you love by sorting through the profiles of 20 million other lonely hearts on eHarmony. It brings you up-to-the-second stock prices, sports scores, and flight delay alerts. It helps doctors fight diseases and engineers design safer cars. It gives environmentalists the power to track the movements of endangered animals and biologists the tools to map the structure of our genes.

Your Data, in short, is transforming everything.

However, with all of this data comes great responsibility and opportunity.  As Scott points out:

We also need to make sure we can use all the information we're collecting. That means better schools that will turn out kids who are able to cope with the age of Your Data. And we need better, cheaper technologies to enable companies of all sizes, as well as organizations and individuals, to get all the information they want and do something useful with it.

Knowledge is power, and we know more than any previous generation could even conceive. We're moving into a world of infinite information. The challenge we face is turning all that information into insights, conclusions, and revelations — in other words, turning that knowledge into wisdom, without letting it be turned against us. We need to make sure Your Data doesn't oppress us, but serves us. And we need to do that fast, because the revolution is well underway.

From a VC and entrepreneurial perspective, what excites me is that we are just scratching the surface of what to


Continue reading The Ongoing Data Revolution

Is it a feature or product?

During the last month I have spent more time looking at Angel investments as I believe it is a great time to start a business.  However, one key question I keep asking myself after meeting with entrepreneur after entrepreneur is whether or not what they have is just a feature of a larger product offering, a standalone product in and of itself, or a business for the long term with multiple products.  Each path provides a unique risk reward perspective for both investors and entrepreneurs.

To be honest with you, many of the companies I have met with seem like features of a broader product offering.  That is not bad in and of itself as focus is key when starting a company and going to market. As a start-up, you always want to be the innovative player with the new easy to use technology.  However, just being the mobile version of what is already existing in the market is a cause for concern as it doesn't take much for a larger competitor to replicate that effort and use its marketing muscle and existing customer base to freeze a start-up out.  Sure, you may get some customers early on as you are the only one, but in the long run you need to think about what broader feature set you will offer to be a true standalone product. 

A product is typically a couple key features tied together to solve a problem for a customer.  This means that you can provide more value to your customer and consequently extract more dollars from your end-user.  The opportunity for many companies that are just features is a quick flip, but the risk is if that doesn't happen the large player may just develop the feature in-house leaving no exit for you.  The more seasoned entrepreneurs know that starting out with a killer feature is just a launching pad to bigger and greater things.  They know it is just a go-to-market strategy that is part of a larger vision and a step towards a broader offering down the line.  These entrepreneurs know that they may never get there, but also understand that without this they have a limited market and return opportunity.  yes, I know start-ups are inherently uncertain and many times it is difficult to even calibrate how big the market is, but don't forget to lay out the broader vision beyond the initial killer feature when building your company.

On the flip side, what I don't advocate is coming out of the gate as a complete and whole product solution.  This brings you right into the crosshairs of large, Continue reading Is it a feature or product?

MVPP: Minimum Viable Product Purchase and the lesson of the first trash talk T’s

MVPP: one slogan per shirt

When I was at AND 1 my job was to understand the customer and build product that he would love (and buy). In my role at First Round, I get to meet tons of smart people who are doing the same thing. I was making t-shirts, shorts and shoes and they are building technology, but at the end of the day, understanding what the consumer will love (and buy) is the essence of the work.

A popular framework for product development is MVP, minimum viable product as championed by Eric Ries. Iterative development is great because knowing your consumer is hard and it is tempting to cheat by throwing every feature you can think of into the product. At AND 1, when I was not sure what a consumer would love, I would add features to make the product “better.” A buyer at Continue reading MVPP: Minimum Viable Product Purchase and the lesson of the first trash talk T’s

Venture Hacks Meetup and Panel at SXSW

For those of you going to SXSW, I’ll be on the Seed Combinators Panel on Monday March 15 3:30pm. I’m joining Paul GrahamDavid CohenMarc Nathan, and Joshua Baer to talk about YStars, TechCombinators, SeedBoxes, and the like. Here’s the Plancast if you want me to “count you in.”

I’m also throwing a meetup on SundayMarch 14 5-7pm in the Four Seasons Lobby Lounge at 98 San Jacinto Blvd.

If you’re a Venture Hacker, please come talk to me about your startup and venture hacking at these two events. I’m looking forward to pressing the flesh and kissing some babies.

Please RSVP on Facebook xor Plancast so we can get a headcount. Gracias.

Altitude switching and development priorities

My post on saying “no” to grow generated some great conversation in the comments. It also got me thinking about the problem from the other side: How to find the right things to say “yes” to in your development plans.

I was out west this week for our E-commerce Summit and asked leaders from our portfolio how they manage strategic priorities. It was portfolio power in action and the thoughts below are the result.

When you dive down to the weeds, make sure you know how to get back up

Adjusting the focus from high-level corporate vision down to strategic initiative and on to project definition and then to tactical next action and back up as quickly as possible is something I wish I had been better at as an operator. Founders can get stuck firefighting and micro managing, for months on end because the company is an embodiment of Continue reading Altitude switching and development priorities

Docverse and Mixer Labs exit stage right

Congratulations to portfolio companies DocVerse (now at Google) and Mixer Labs (now at Twitter). The best part was getting to know and work with people that I genuinely liked and now consider friends.

Project Rifle: A quantified decision making framework

This post is by Khosla Ventures from Khosla Ventures

In this deck, get Vinod’s take on RIFLE strategy, a quantified decision making framework.

The post Project Rifle: A quantified decision making framework appeared first on Khosla Ventures.

The risk matrix

This post is by Khosla Ventures from Khosla Ventures

In this deck, get the KV perspective on how we assess risk.

The post The risk matrix appeared first on Khosla Ventures.

In order to grow, just say “No”

There are so many ways to say it, but none of them are easy.

In the world of agile development and minimum viable product, teams of really smart people can build, test, learn and repeat un-constrained by technical or financial limitations with little to no funding. Powerful learning organizations are being built and the impact on the start-up community has been significant. However, once the corporate mission has been established, the success of any lean start-up depends on the CEO’s ability to say “NO” more than any other factor.

Recently I was working with a company in the First Round portfolio that has fully embraced the lean start-up process. The company has a fantastic team of experienced engineers who embrace the process and actively seek to discover both consumer problems as well as product solutions. They manage their product cycles in hours, not months. They test more hypotheses in Continue reading In order to grow, just say “No”


BusinessWeek includes me on a “Smart Money” list. Thanks guys!

The iPad is imPortant

Perhaps not in this incarnation – remember the first iPod? But the concept is very, very important for two reasons:

– It’s the first computing device that’s social in the real world. The iPhone is something that one person uses at a time. The Laptop screen faces you – two people using it at one time is awkward. iPad style devices can be shared in the real world – imagine laying it flat and playing multiplayer games facing each other, or watching a movie together, or even showing someone a web page – far easier than on any other device.

– It runs the iPhone OS. Why do users need to know what a file system is? Or map the interactions of a moving block of plastic onto a screen (mice)? Or worry about memory management? Or multiple levels of trash-delete? Or the concept of multiple, mounted volumes? Or which network you’re connected to?

Basically, the iPad is (a) usable by the other 5.5 Billion humans, and (b) it can enhance real, physical human interactions. These two facts alone make it a worthy successor to the iPod and iPhone. Steve isn’t ready to start filling niche markets just yet. He’s still looking to rule the world.

Hello, my name is Phin and I am a sneakerhead VC

Sneakerhead (VC) Illustration by Sam Flores for LRG

I changed the name of my blog. I want to explain.

I have been collecting shoes since 1985. As a kid I would do jobs in the neighborhood to earn money for kicks. When the Air Max came out I had to have it and once they were dirty, I cut them apart to learn how they worked. My original Jordan 1’s suffered the same fate. I wore those with two pairs of socks so I could fit a 6.5 and get AJ’s, not the sky jordans that the rest of my friends had to wear in the kids size.

As a ball player I was in the sneaker culture and quickly moved from curious to addicted. Understanding the story behind the shoe, the inspiration, was always the best part. It was not enough to know they were hot, I wanted Continue reading Hello, my name is Phin and I am a sneakerhead VC

Y Combinator vs. Graduate School

Y Combinator* is the new Graduate School.

In some ways, it’s better:

– You pay to go to graduate school. YC pays you.
– After school, you get a job. After YC, you create jobs.
– You repeat the works of the greats in school. YC expects you to do original work.
– In school, you are graded on an arbitrary scale by arbitrary people. After YC, you are graded by the real world.

Some day, most schools in most disciplines will be like this.

* – Of course, “Y Combinator” is a generic term for Techstars, I/O Ventures, SeedCamp, Capital Factory, Founders Institute, and all of the other similar pre-angel incubators.

Rise of the machines (decision making when milliseconds matter)

One of the benefits of being part of a seed-stage fund is that we often get to see the next big trends before they become widely known.  For example, Josh has a widely known thesis on data-exhaust and the implicit web where he identifies the value of the data trail we all leave behind. This thesis supported multiple investments including our investment in Mint.

In the 200 milliseconds it takes you to draw your gun, my algorithmic gun slinger could make 39 profit maximizing ad insertions and shoot you dead

I believe we are now seeing a change in data processing and decision-making that will be equally significant for investors and entrepreneurs.

Historically, data analysis and computation was done on log files and stored data pools.  In these types of businesses, the data decisioning was done “out of band” — or not in real-time.  However, we’ve now started Continue reading Rise of the machines (decision making when milliseconds matter)

The Gartner Magic Quadrant – a necessary evil in IT

Lately, I feel as if I have been spending an inordinate amount of time with my companies talking about marketing.  Related to this, one of my portfolio companies recently received a number of nice emails from the board related to its new positioning in Gartner's Magic Quadrant.  We were all quite excited since we made demonstrable progress over the last 3 years from niche player to visionary and on the cusp of becoming a leader.  Yes, I know what you are thinking – this is all BS and how much did you pay them over the years.  And where there is smoke there is fire as those statements ring true but at the end of the day Gartner's Quadrant is important for anyone selling to IT professional because buyers of technology care about what Gartner has to say.  Technologists at corporations are not paid to take risks, but rather to not make mistakes, to make the safe choice.  And guess what, paying Gartner Group for an annual subscription to its content and for access to its analysts helps IT buyers make the safe choice.  Secondly, larger companies when looking to expand their product line or get better positioning in the market definitely do pay some attention to the start-ups on the quadrant. 

For those of you who are not familiar with the Quadrant, you can read more about it here.  In short, it is Gartner Group's proprietary methodology to rate IT vendors in a particular market based on Ability to Execute and Completeness of Vision.  Gartner-magic-quadrant1-530x485 In the end, every market is broken out into 4 quadrants, Leaders (top right), Challengers (top left), Niche Players (bottom left), and Visionaries (bottom right).  For the most part, Leaders and Ability to Execute comes down to number of customers and customer references that Gartner has done and the size of your company and ability to go to market.  Based on this criteria, you will never see startups in the Leaders quadrant on Day 1.  However, what you should expect from a startup is a visionary position meaning the company has some phenomenal technology that fits a market need and is leading the future of the industry but at the same time does not have the customer base or resources to go after the big boys today.  If you are in the niche category then good luck.

So how does a start-up navigate the Gartner waters?  First, I would read this overview from Gartner to understand how they think and rate vendors.   Secondly, I would contact the relevant analyst to set up a meeting to discuss further.  Given Continue reading The Gartner Magic Quadrant – a necessary evil in IT

Before you sign a termsheet, take your VC to the Chiropractor

get alignment, take your VC to the chiropractor

Alignment with your investors is crucial. Adjustments are available if you ask questions before you sign the term sheet

When you are fund-raising, your job becomes getting cash into your company. However, the best entrepreneurs don’t just get funded, but find funding alignment with their investors in terms of values, vision and approach. Since joining First Round Capital I have met with hundreds of entrepreneurs and many of them never ask me any questions about our process or our approach to working with our portfolio.

I know the fund-raising process is really, really hard. It is an emotional roller-coaster. It demands 100% of your energy, your time and your heart but you should be asking questions, interviewing your potential investors, and choosing your investors.

It is important to know you have alignment in terms of financial interests and that you are not only working toward the same outcome but also Continue reading Before you sign a termsheet, take your VC to the Chiropractor

Market positioning for startups – focus, focus, focus

I was on a call yesterday with an inspired and talented management team.  As we walked through the deck, one point particularly struck me as I listened to their well-honed pitch.  The company was trying to boil the ocean and do everything for its customers.  While it was great that the team seemed to understand the market and the problem that their customers had, I must say that I started to lose interest by the fifth differentiating feature of the product/service.  One slide really highlighted the problem for me – it showed a feature list of 10 features and then showed 3 different competitors who were either already well established public companies or well funded startups that only offered 30% of what this angel-funded startup would offer.  In my mind I was wondering how an angel funded company could go-to-market against companies with billion dollar market caps or with $30mm of venture funding which were highly successful because they were incredibly focused on a subset of problems that this start-up was trying to solve. I know, I know, I always like entrepreneurs to think big but that must be balanced with how a startup goes to market.

You see, it is always hard for a startup to enter a market with an end-to-end product positioning as most customers expect large companies to cover this territory.  What most customers expect from startups is innovation and breakthrough offerings, not end-to-end solutions.  Going back to the call, my humble suggestion was for the management team to complete their beta test with their handful of customers and figure out which 2 or 3 features were the most compelling and differentiated offerings with respect to their competition and market.  They should then plan their go-to-market strategy with a more focused approach that emphasized a new and innovative offering instead of a "we do it all for you" approach.  In the long run, if successful, the startup could always add another feature or two as they grew their customer base but keeping the message simple early on is imperative to drive a successful product launch.

The post Market positioning for startups – focus, focus, focus appeared first on BeyondVC.

2010: the year of “game mechanics”

Ryan Graves wrote a great piece on why Foursquare is his ride of choice. Worth a read as an overview of the check-in space>

I was taught to believe messaging matters and in my conversations with entrepreneurs, I always want to learn about their marketing strategy. A trending topic in my conversations about customer acquisition and loyalty is adding “game mechanics” to a consumer internet service. It reminds me of Josh’s post on viral marketing and the more recent article by Dave McClure encouraging start-ups and Vc’s to focus on marketing and design in consumer internet businesses.

Just like “viral” and “social” before it, GAMES ARE HARD TO BUILD and cannot be bolted on to the marketing strategy.

crack pipe

Well designed game mechanics are addictive

The ability to define value for the consumer with in-game rewards that motivate behavior that reveals consumer utility is the magic of game mechanics. Tony

good game design user experience

Continue reading 2010: the year of “game mechanics”

Why You Need to be in Silicon Valley

For years I didn’t believe this. I thought that you could take advantage of the benefits of Boston, Seattle, NY, Austin – cheaper talent, no echo chamber, local Universities, etc.. But I give up. I found myself telling an entrepreneur why he had to be in Silicon Valley if he wanted to succeed. Most of my points are about Consumer Internet businesses…

I won’t belabor the obvious reasons – the Investors are here, the best engineers and entrepreneurs self-select and come here, Stanford and Berkeley, yadda yadda.

Instead, here are some points that you may not have considered:

– Especially on the Consumer Internet, modern businesses are becoming winner-take-all (thanks to leverage and network effects). Therefore, if you’re 10% better than the competition, you win, likely the whole market. You need every possible edge…

– All of the companies that you need to partner with are out here. Business development doesn’t happen in formal meetings. It happens in informal coffees, parties, and relationships.

– If you are here, your network will be using all of the latest tools – Twitter, Foursquare, Quora, Nexus One, etc., before other networks in other cities will. These networks hit critical mass here earlier and are thus more valuable to the early adopters here. You’ll have a 3-month+ head start on people outside to see what’s coming next. Imagine trying to design next year’s clothing without firsthand immersion in this year’s fashion, in Milan or Paris.

Sure, it’s possible to build a great Consumer Internet business starting out somewhere else, but given that these are winner-take-all businesses, do you want to start out that far behind the curve?