Normally, I like to pounce on these big acquisitions quickly with some quick analysis, but big M&A in tech is happening too fast, and it’s graduation season for the toddlers, and family is in town, so for this installment of the blog, we will talk about both Looker and Tableau together, as they’re in the same space.
So without further ado, here are my quick takeaways from both acquisitions:
1/ “Not Another BI Startup?” This phrase is a common refrain among many startup investors. And, there is some truth to it — there are plenty of “BI tools” and “analytics/dashboard” companies that were started and funded. It was a red ocean. Fast-forward to June 2019, and two BI companies were purchased for close to $18B combined. Of course, Tableau and Looker do much more than just “BI” but I’m sure there are a number of early founding teams and Continue reading “Quickly Unpacking The Looker And Tableau Acquisitions”
Everyone talks about building minimum viable products (MVP) but a culture of minimum viable failure (MVF)is much more valuable. Identifying failure quickly and stopping is the key for founders at the earliest stages. Instead of wondering how you will know if a product feature or growth tactic is good enough, ask yourself, “What will it take for me to kill this idea?” and define the answer in measurable, objective metrics.
The purpose of an MVP is to test a hypothesis, to validate, de-risk or disprove your current mental model. When you build something that people want, you can tell. But how do you know if you built the thing that they want the most? How do you know if you have done enough? Defining success in something that has never been done before is really hard and full of mental traps and bias.
Believe it or not, this will now be the second blog post on this site about a billion-dollar exit for a shaving-related startup. It was just about three years ago when the startup world learned that Unilever had decided to plunk down a cool $1B to buy LA’s Dollar Shave Club. Fast-forward to today, and we have a smaller conglomerate, Edgewell, paying a mix of cash and stock for NYC’s Harry’s. Any billion-dollar liquidity event is a rare event, so it will get the Haystack blog treatment.
Here are five (5) quick takeaways from the deal:
1/ Double-Down: What were the chances that one of the first really big direct-to-consumer (DTC) startup outcomes would be for razors? Perhaps one could have had a 20% chance of predicting that. Okay, I’ll give you that. But then, what would be the chances that there would be yet another, second exit in the Continue reading “Quickly Unpacking The $1.4B Acquisition of Harry’s”
Last week, I was at a presentation by Professor James Schrager of Chicago Booth. He was on a board of directors and the CEO said that culture eats strategy for lunch. It got him thinking about the topic. So, which is more important, culture or strategy?
It’s a topic that has been written about a lot. In startups, oftentimes investors and CEO’s will worry an awful lot about the culture they are creating. We hear about work/life balance. We see the bro culture. We see the discriminatory culture at companies like Google. We hear about the culture at Uber. It’s top of mind.
What do you think is more important? Think about it for a hot minute.
Hello. It has been a while since I’ve posted here, nearly 3 months. My fingers are well-rested, but my writing prowess is likely rusty, so please forgive any rustiness in this post. I do plan to write a lot more this summer, so stay tuned. In March and April this year, I was on the road a lot — all fun and productive work trips, but also distracting; if the past two months were about being out there and extroverted, I feel a huge wave of introversion coming as the summer comes into focus. I’ve also been working on a project that I cannot yet discuss publicly, but that will be over soon, and we can resume regularly scheduled programming on this site.
Today, I am excited to share some data on the Haystack portfolio as it relates to geography. Over the past year, and especially over the last few
About 3.5 years ago, we met Michael and Lillian from SecondMeasure while they were in Y Combinator. We were lucky to invest not only during this time, but also doubled down in an extension. And this week, the company announced it had raised a super-sized $20M Series A financing co-led by Kent Bennett from Bessemer Venture Partners and also Goldman Sachs. (The round was completed last fall, but announced this week.)
SecondMeasure if a unique company that also boasts a unique customer set. SecondMeasure’s technology empowers its customers to drill into consumer spending behaviors from a number of angles. With over 150 customers now, they range from financial institutions such as VC and PE firms, consumer product companies, and media organizations. These customers leverage SecondMeasure to analyze and cross-analyze how consumers are spending their cash, but going deeper, the platform enables customers to analyze rate of growth, cohort Continue reading “The Story Behind Our Investment In SecondMeasure”
Start spreading the news, indeed. Today, Amazon announced it will entirely abandon its plans to build its second headquarters (a/k/a “HQ2”) in Long Island City, a residential neighborhood in the borough of Queens, New York City. There’s no need for me to mince words here: This is a huge, huge development. It is shocking, really. I believe this will be talked about for months, which in today’s news cycle is saying something. But, it happened, and we have to step back for a moment and reflect on what got us here. So, here is my attempt to do that — for the record, I believe NYC made a huge mistake, but also that Amazon should’ve picked a different (and smaller) city to begin with. Here is what I take away from this breaking news:
This is the story of how we invested in Fiddler Labs. At the beginning of 2018, we almost invested in a startup with two strong founders. To make a long and private story short, on the morning I was about to call the founders to let them know I was in, they decided to amicably part ways. I was stunned, but also relieved it happened then and not much later. A few months passed, and we ended up investing in the company with one of the original founders. And, a few months after that, we heard the other founder came up with a new idea, and we had to scramble to chase him down. I’m glad we did.
I’ve been traveling all week, digging out of email, and closing two deals and — hence — have been pretty quiet online. As I was scrolling through Twitter today and saw the rumors around Gimlet, the podcast media company, being acquired by Spotify for $200M in cash, I knew I had to stop, write this post, and share some thoughts on what’s going on. So, here goes…
Well, actually, before I begin, this post needs a few disclaimers. One, I am a huge podcast nut and listen to podcasts more than I watch TV or movies, and some weeks, even music. Two, despite my love for podcasts, I did not invest in podcast apps or companies (aside from Vsporto, which I was drawn to for different reasons related to app constellations) for reasons I’ll share below — including Gimlet. To underscore here, I hope I am proven wrong on these Continue reading “Quickly Unpacking Spotify’s Acquisition Of Gimlet Media”
Over five years ago, as I began to deploy the first Haystack Fund, I was lucky to select HelloSign as my sixth investment ever. I discovered the product much like you might have – I used it to help handle the paperwork and signatures for the new fund. I had a friend who worked there (thanks Joel Andren!) and he was patient and over time found the right time to introduce me to Joseph Walla, one of the company’s cofounders. I took Joseph out for lunch, told him about me and Haystack, and asked to invest in the company.
When I started out investing (via a fund — not my money), I was just investing based on a simple schedule: About once a month, invest $25K into one company I liked. Pretty easy. Over the years, that check size grew slowly to $50K, then a few $100Ks, and I followed-on into a few at the $250K level, with two outsized pile-ins at $400K and $600K total exposure, respectively. That escalation from $25K back in 2013 took a little over four years.
I consciously took that ramp slowly because I found it was easy to trick myself into thinking going faster and bigger would be straight-forward. As a result of going more slowly, I had the time to make a few mistakes to learn some lessons, but the mistakes were never too big to leave a massive crater in the total value of the portfolio. The trick with these experiments Continue reading “Fund Investing Versus Fund Management”
In gambling, particularly in sports, there’s a concept of “parlay.” The word can be used as a verb (“turn an initial stake or winnings from a previous bet into (a greater amount) by gambling”) or a noun (“a cumulative series of bets in which winnings accruing from each transaction are used as a stake for a further bet”). The more I discover about going beyond just writing checks into startups — concepts like portfolio construction, cross-fund management, and new fund formation — the more I realize how critical the parlay is.
Let’s focus on the noun first. In the NFL, for instance, you can make a series of connected bets that, if you’re right, can hit the parlay — the more games in the parlay, the bigger the payout. Picking the right 5 or 6 lottery numbers that show up on TV is a form of a parlay, albeit Continue reading “The Parlay”
When I moved back to the Bay Area in early 2011, the technology and startup sector didn’t feel as big or expansive as it does today. In that time, Twitter was just getting its sea legs, the Quora private beta was one of the hottest tickets in town, and TechCrunch was the de facto powerhouse in tech/startup media attention. During this time, when we didn’t really understand the stakes of what technology would hold for us all, it was relatively easy to know the investments made by the top VC funds — they’d either announce them on TechCrunch, or the early reporters at TechCrunch would somehow find out which deals were hotly contested and doing well.
Back then, there were fewer deals, smaller funds, and relatively speaking, more deal transparency.
Now, contrast 2011 with 2019, and we have an entirely different situation. Today, the stakes related to technology investment Continue reading “Deal Opacity”
Alright, here we go. My predictions for 2019. I am not great at these “looking ahead” posts. We all know the unknown will happen. Looking at my post last year, it wasn’t that great — and my take on crypto was proven wrong. Ok, let’s move on…for 2019’s prediction, I tried to keep it simple and cook up big questions that are on most peoples’ minds, and offer my two cents on them.
As to 2019…here are the big FAQs out there:
When will companies start going public? I predict: soon! Well, actually, quite a few tech companies IPO’d in 2018, though many of those are a bit underwater now given December’s public market volatility. That’s still OK given the IPO is more of a financing event than anything else, right? Many of the companies who are waiting for 2019-20 are likely wanting to file papers (or already have) and Continue reading “Looking Ahead, Predictions For 2019”
It’s that time of year, time to look back and reflect on the most significant storylines in the tech, startup, and VC world. A comprehensive post on this topic could be 5,000+ words, but we do not do such things here. We kept detailed notes month by month and today, I tried to organize them by key sections, what you’ll see below. There’s a good chance I’ve missed something — if you feel that way, by all means, please share your point of view on Twitter (or email) and link to the post.
And, with that warning, I offer to you, the big stories in the startup and investing ecosystem of 2018, written in ascending order of importance and magnitude…
In the lexicon of startup investors, there’s a term I’ve felt needs to be unpacked a bit: “A good deal.” What is a good deal, really?
Is a good deal one that’s hot or competitive? Is that a sign of goodness? Or ones that are proprietary, where one or a few investors see it before others and have the option to do it first? Are those good deals? Is it a good deal if an investor can buy ownership for a cheap or reasonable amount? Given that ownership and multiples are what drive venture portfolio returns, does that qualify as the most important marker? Or what about deals which have hung out in the market too long, gone stale, and which could be the victim of adverse selection?
You are the average of the five people you spend the most time with. You are what you eat. About a year ago, I tracked down a VC who gave a talk I heard about where he referenced the phrase “Your portfolio is your path,” it stuck out in my mind because amid all the noise, it was simple, brief, and yet still open to interpretation. We hung out and I asked him about the entire talk he gives (a subject for another post, if he agrees to it), but this one a small portion of it and I think OK to share.
“Your portfolio is your path.”
At least in the Bay Area, it’s now considerably easier to get into the investing ecosystem at some level and start to make small investments. It could be a micro-fund, or being a scout, or working at a larger fund with Continue reading ““Your Portfolio Is Your Path””
It’s an unusual time in the markets. With high levels of public market volatility — the first we’ve seen in the age of social media and true real-time information — it feels like everyone and their grandmom is expecting a downturn. “We’re in the nth year of an unbelievable bull market!” “Most of the country doesn’t have any savings!” “Multiples and valuations are out of control!” “When the tide goes out, we’ll see who is swimming naked!” Pick your favorite doomsday one-liner, and it’s likely to fit the conversation. Then you have real successful professional investors like Bridgewater’s Ray Dalio who can dig deep into “the why” of now — read his latest post here, it’s quite good.
The end of the year and holidays in general are, at least for me, a time to plan out the next year. Sure, as Mike Tyson mused, everyone has a plan until they’re punched in the face, but even if that punch is coming, having the time and space to let my brain rest a bit and mill around the house (even with kids and their chaos) let’s me think about what I want to focus on the next year and what I want to eliminate. I’m sure many of you reading this do some version of the same. It’s really the only time of year in the startup and investing world left.