Loving Products vs. Analyzing Cash Flows

Yesterday was an excellent day for reading.

First, Hunter Walk wrote a post on not worrying about market size when considering Seed Stage Investments. You should read that.

Then, you should read Aswath Damodaran burn down the house with his post on valuing young, growing companies.

I read both of these and was struck with something a mentor told me awhile ago: venture investing and equity investing are pretty much on opposite sides of the financing spectrum.

Did you know that most venture investors are admittedly bad public equity investors? It makes sense: the skills you need to be a great early stage investor have almost nothing to do with the skills you need to analyze a publicly traded stock.

At the early stage, you’re mostly interested in the team trying to solve a problem, and the problem they’re trying to solve.While that relates to a market and there are macro factors to consider, the bigger pieces are harder to incorporate into a framework for deciding if a Seed Stage investment is a good idea, mostly because there’s so much uncertainty around it — a market can completely shift between the time you make an investment and the time in which the broader dynamics of the market really matter.

Investing in equities, on the other hand, should be a disciplined practice of analyzing the present value of the discounted future cash flows of a business. There’s a lot more data to work with at the public equities (and probably a lot more noise), but the current market dynamics matter a ton. This is further compounded by the fact that companies are hitting the public market far later in their life cycles than they used to.

A lot of investors try to think about Seed Stage investing using the framework they learned as equity analysts. While that may work sometimes, those investors are likely to miss a bunch of opportunities by overlooking great teams building great products.

** This was originally published on medium.com

2017: Five New Life Hacks

With a new year upon us all, now seems as good time as any to pile on with everyone else’s reflections, predictions and life tweaks.

I’m a productivity enthusiast, which comes partly out of a passion for trying to extract the most ‘life’ out of my time here. Also, I find that I’m happiest when I’m slightly overwhelmed with goals. A few years ago I got into a phase of life where I was simultaneously in grad school, working full-time, interning for a VC fund, competing in triathlons and planning a wedding. I really enjoyed the discipline required to get all of that done. For whatever reason, operating at that pace makes me happy, and helps me enjoy downtime when I have it.*

As such, I’m always looking for new ways to make space on my calendar and in my head. These are a few things I’m doing right now to help with that:

1. Personal Quarterly Objectives

For the past five years, I’ve built out personal quarterly objectives for myself. I try to use the OKR format for these, taking a page out of business management frameworks for personal life management.

My objectives focus on career, personal relationships and health and wellness. Of everything I’ve done for productivity, this process is probably the highest leverage. Trying to figure out what you want to do for the next year, defining how the next three months can help get you there, and then reflecting on how you did, is simple and effective.

2. Reading and Listening > Browsing and Watching

I’ve been using most of my slack time to read books and listen to podcasts. given the choice between 15 minutes in a book versus 15 minutes browsing a social app, this one’s a no-brainer.

In terms of content, for books I’ve been mostly interested in narrative nonfiction (e.g. Michael Lewis), biographies (e.g. Walter Isaacson) and thought leadership pieces on politics, culture, technology and business. For podcasts, I’ve been listening to a lot of in-depth interview content that covers people’s life stories, or industry thought leadership. A few of my favorites right now are The Axe Files, FiveThirtyEight, a16z, and EconTalk.

It’s not easy to stay on this. The pull of scrollable content is strong. Here are a few tools I use to keep me on track:

  • I’ve got a book list list of about 50 books and I’d like to cover about eight every quarter. Having a goal gives me something to focus on, and having a list removes the ‘what should I read next’ friction.
  • I use Overcast to store podcasts on my phone for listening in the subway.
  • I deleted all social apps from my phone. I still occasionally load Facebook from my mobile browser, but it’s definitely helped to not have five different apps with feeds and notifications for me to check.
  • I use the Kindle App on my phone, and order paper books for home. I leave my phone in the kitchen at night so I’m not tempted to hop online.

3. Eating Less / Intermittent Fasting

This one is about a week old for me, but so far it’s been a great experience and I’m excited to share it. I read a blurb from Spring Chicken about the benefits of intermittent fasting, found some posts about how to do it and started trying it out. It’s shockingly simple — I don’t eat for 15–16 hours per day. I just stop eating around 9pm, and start again around noon or 1pm the following day.

A few observations:

  • My energy level is higher, not lower
  • I’m more focused and productive in the morning
  • I drink a lot more water
  • I find that even when I start eating, I’m not that hungry and I’m generally eating less throughout the day
  • I still get to drink black coffee in the morning (!)
  • I’m losing weight — but not a ton, and not in a way that feels unsustainable. This isn’t really a ‘diet’, or at least doesn’t feel like one to me. It feels more like a way to manage my energy.

4. Same Outfit

This one’s also easy, and removes another decision from my morning. At some point, I found an outfit that works for me and I bought five copies of it. Combined with skipping breakfast in the morning, I’ve removed the need to think through what to eat and what to wear when I wake up. While this sounds small, removing decisions from my morning allows me to focus on other things: planning my afternoon, spending time with my family, working out, etc. Easy win.

5. Paper for To-dos

I use a combination of Google docs and Evernote for taking notes, but I’m finding that running my personal to-dos on paper helps me remember them (because I have to write them), allows me full control (there’s no collaboration), and makes me feel like I’m making progress (crossing things off is amazing!)

That’s all I got. Happy optimizing and have a wonderful 2017!

(*As an aside, being a parent and running a company are exponentially more work than anything I’ve ever done, because both are endeavors in which your efforts are both high impact, and never sufficient. You’re never ‘done’ with either).

** This was originally published on medium.com

Producing vs. Supporting

I’ve been at Snaps now for seven months.

When I took the role, my primary interest in the opportunity was one of personal growth. Of course, I was excited to work with the team, and excited about the space and it was generally a great opportunity, but mostly I wanted to learn how to run a company by actually doing it.

I’ve read a variance of comments on this idea: taking a ceo role for professional growth reasons. Some of the better critiques of this idea go something like ” the best ceos don’t actually want to be ceos at all, they take the job because no one else is willing to step into it”.  It’s a romantic idea, the humble leader who quietly takes a leadership role without a hint of hubris or want of personal gain, who steps in and steadfastly inverts the org so that leadership sits on the bottom, supporting everyone on the team from below.

I aspire to do that, to be that.  I fail at it every day.

One of the hardest adjustments I’ve had to make, and I’m guessing i’m not alone in this challenge, is moving my mindset from ‘produce great work’ to ‘inspire and motivate others to produce great work”.

I think most highly productive people end up in leadership roles because they were really good at producing work, and so eventually graduated out of producing work and into a role of managing others who are producing work.  I’m not suggesting that I don’t produce anything, more that I’m finding the most effective use of my time is in supporting others to produce work, because that’s how organizations scale, how people grow and how leaders can create great results.

These two ideas: producing vs. supporting, require completely different skill sets. I am phenomenally weak in the second. I am impatient and intolerant of mistakes. I become frustrated when people don’t produce work in a way I would have done it, or as quickly as I might have.  At my worst, I can be pessimistic and dismissive, and that usually comes out when I can’t control situations, which is basically every day at my job, and I imagine every day in most leadership roles.

I am often reminded in my new role how  important is is to support others in producing great work, and I think that’s been my best lesson so far.

I’m joining the team at Snaps

Snaps is a creative platform for brands.  The Houston Rockets are using Snaps for fan engagement.

Like many of us in the New York tech and media communities, I’ve tried to invest my time working with world class entrepreneurs, incredible visions and great businesses. To that end, I’m thrilled to share that I’m joining the team at Snaps as its CEO.

When I first met Vivian Rosenthal, she described her view of a world where social communication had shifted from text-based, desktop conversation, to mobile-first visual channels like Instagram, Vine,Tumblr, Pinterest and others. We talked at length about how this shift will continue to create new opportunities and challenges for marketers, and how software can help create better conversations between consumers and brands in this new, visual space.

Our conversation didn’t end at mobile. We also talked a about where that visual world is headed. With the emergence of new platforms like Google Glass, Oculus Rift and Magic Leap, new channels will continue to emerge that will transform the way consumers and brands communicate, and they’re only becoming increasingly visual and immersive.

I believe that Snaps is perfectly positioned to help create, capture and amplify the visual conversation on the web. The current Snaps offering is a fun, engaging, creative solution that has already empowered some of the world’s best consumer brands in social media, including SecretKraft, Kate Spade, Sony Pictures, Nestlé and The Houston Rockets.

Snaps has made incredible progress towards becoming a robust creative platform for brands, but we’re just getting started. I’m thrilled to be joining the team at this phase, and hope to share more about our product soon.

Electronic Objects and the future of the web

Electronic Objects EO1 is a beautiful, connected frame for the home.

Sometimes the device is dumb glass, driven by the cloud. And sometime the cloud is dumb storage, driven by the device.

— Benedict Evans (@BenedictEvans) May 27, 2014

I’ve been having the ‘dumb glass or smart device’ conversation with a number of friends lately, and everyone seems to have a really strong opinion on this (I don’t, but I thought it was worth writing about since it’s come up so much).

The debate

The question most asked is if the future of the internet will be one of smart-clouds-dumb-devices, or if hardware is going to play a meaningful role in the future of the web.  To oversimplify with current companies, if you believe the former you’re probably long Google and short Apple, since you believe that all of the innovation and value will be created in the software layer. If you believe hardware really matters, you think Apple has a bright future, particularly in the short-to-mid term, because there are elements of physical products that make one better than the other, and software is a smaller piece of the equation.

My friends fall into two camps, with distinctly different views of the future:

Dumb Glass People are often software engineers, venture capitalists and technology enthusiasts. They make the argument that the cloud is increasingly where innovation is happening, and where iteration can happen quickly enough to find product-market fit faster than hardware designers and manufacturers can keep up. Therefore, software will ‘eat the world’ and reduce hardware to a commodity space of dumb glass.

There’s some strong evidence for this, notably this week Microsoft laid off 18,000 employees, mostly from Nokia, and Samsung has started bleeding.

Fred Wilson also often talks about fast replacement cycles for smartphones being a strong driver to keep larger devices (e.g. TVs) dumb, and allow them to be controlled by the smartphone.  This is a bit of a middle-ground thesis, but I’d place it in the dumb glass camp.

Smart Glass People are generally everyone who thinks about consumer products, and consumer motivations – marketers and product enthusiasts. While the hypothesis of the smart cloud makes a ton of sense form an efficiency standpoint, this camp believes that consumers want specific use cases for their glass. Electronic objects, I would argue, is in this camp, and their promotional video paints a great vision for use-case specific glass:

While it’s true that this device is generally dumb after its setup, most of the value is in the form factor, not the software. There is a specific use case for this unit, so it makes sense as a place to put artwork, and it makes sense as a piece of glass for your wall. Could we all have been doing exactly what EO offers for years with TVs and tablets? Yep. Does anyone ever do that? Nope.

The current device selection is insufficient for this use case – everything on the market is either to big, too small, too glossy, too clunky or just obviously designed for different purposes. It would look dumb on your wall and this looks beautiful. For a product like this, I think it’s probably that simple.

In the short- and mid- term I think hardware is about to explode. In the longterm we’ll probably drive towards some dumb glass standards, but until then, entrepreneurs are going to need to tell people what to do with their glass, and that’s going to open up tons of opportunity.




CrowdStream Is Joining RadioIO


In 2010, Brian Bason and I started building CrowdStream to help music artists and fans connect on mobile and in social media. It’s been a phenomenal experience working with some of our favorite artists as they forge into the mobile ecosystem to create experiences that weren’t possible just a few years ago. This week, we’re thrilled that CrowdStream is joining the RadioIO platform.

Over the past three years, and thanks to the help of an amazing group of advisors and friends, CrowdStream has been used by over 150 artists, including Mötley Crüe, The Smashing Pumpkins, the Neon Trees and J. Cole. We’ve reached over 100 million fans in social media and contributed to the success of hundreds of world tours for our artists. The most rewarding part of this journey has been hacking away to create a digital ecosystem that actually works for artists, helping them drive business goals and engage with fans in ways that are meaningful and rewarding for everyone involved. We believe artists create valuable content, and we’ve worked to help them realize that value through CrowdStream.

As part of RadioIO, CrowdStream will now reach an even wider audience, and offer fans even better ways to engage with their favorite artists through RadioIO’s consumer and B2B streaming radio services . RadioIO shares our vision to create a compelling value proposition for artists in digital, and we couldn’t be more excited to continue building towards that vision with the RadioIO team.

Maybe You’re Just Not Lucky

I just finished reading Fooled By Randomness, by Nassim Taleb. I loved the book, and if you’re interested in financial markets, behavioral finance, probabilities and statistics I think you’ll really enjoy it. Check it out if you haven’t already. Nassim has a section that talks about survivor bias and it got me thinking about how it related to startups.

I was recently at a conference for startups in San Francisco, a day-long chance to learn from people who had built and run massively successful businesses. The speakers were gracious, humble and offered the best advice they could for the young operators in the crowd. But I was particularly struck by one CEO, who was the only one to attribute much of his success to luck. When asked a question about what he would have done differently, he said that you can’t ignore the massive role luck plays in the success of most startups, and he tried to keep that in mind while he was going through growing pains at the company.

I looked out over the 400 people in attendance and noticed how young everyone was, and I thought about how few of them would still be coming back to these conferences after five years.

One problem with taking to heart advice from successful startup founders is that we run the risk of mistaking correlation for causation, and we ignore survivor bias when we internalize this information. Of 100 startup founders, maybe 10-20% will be truly successful at operating their company from an idea to an M&A transaction or IPO that generates a return for everyone involved. Of the 80% plus who fail, most of them will be exceptional entrepreneurs and operators who picked the wrong market, the wrong product strategy or just had bad luck along the way.

Venture investors place very few bets in a given year, and all of them are on top notch people who are vetted and have the potential to become great leaders. Of those 100 theoretical startups, 100% of them are founded by credible people who have already proven their potential, and often have a previous track record of success – they are already winners on paper or they wouldn’t be able to raise capital.

I don’t think the community likes talking about this very much. We like to put successful startup leaders on pedestals and assume that they’re successful because of the decisions they made. Success rates in early stage, venture-backed startups are very, very low. The cemetery of failed startups is filled with entrepreneurs who did literally everything right, but were just unlucky. I was reminded to keep this in mind, not only when looking at failed startups, but also when looking at successes. Operating advice can be invaluable, but keep in mind that for every successful founder you see on a stage, there are probably 80 others who are just as talented, just as smart, and just as good at operating, who were just a little less lucky.

Good Reading – 1.20.14

– Mobile messaging app usage grew by over 200% in 2013, beating out every other app category in both usage and growth. In my view, messaging apps are a fast, simple way of creating dark social networks. 1-1 and small group communication is the new social media broadcast.  My personal behavior mirrors this, and all of the research we’ve done in-house backs it up: large social networks are good for some types of content, but most of the communication we do isn’t designed to be shared with everyone. Because of the  fragmented networks involved, messaging app users will likely stay multi-home for a few more years. Link >>

– Charter Communications made a $61+ bn. cash offer to acquire Time Warner Cable. By itself, the transaction doesn’t mean a ton, but looking at the overall telco and wireless carrier consolidation over the past years in the U.S., coupled with the recent ruling against  the FCC’s Open Internet Rule, is it safe to think the balance of power is starting to go increasingly larger players in the space? I have no certainty on how all of this will affect innovation in the startup scene for media, but I have to assume that these trends are overall bad for consumers when it comes to content delivery innovation.  Link >>

– Andreessen Horowitz is in the process of raising t’s 4th round, another $1.5bn., the majority of which will be dedicated to early stage investments. Anyone who doesn’t already, follow Marc Andreessen on Twitter. Marc’s feed is optimistic, though-provoking and is evidence why his approach to investing has been so successful of late. This 4th fund is just anther supporting data point.  Link >>

– Dropbox raised $250mm at a $10bn. valuation. As a company I pay every month for a service that completely changed my life, my view is that Dropbox still has a ton of runway ahead of it and, in my opinion, is in the unique position of being better as an independent company than as part of a larger suite of solutions like Apple, Google or Oracle.  Link >>

– if you were under a rock , Nest was acquired by google for $3.2bn. No sense in writing about this, but in three years this is going to see like a very, very cheap acquisition. Link >>


This Week – 01.13.13

– CES was this past week and everyone already wrote about it, streamed it and talked about it. I liked Tomasz Tunguz’s summary – it’s short but insightful. Read it if you’re looking for a quick recap of what happened and what to look out for in the next year. Link

– Someone hacked Snapchat and leaked 4.6mm names, usernames and phone numbers.  I was one of the users who had their info leaked, and I have to admit that it changed my attitude towards security on web services. Perhaps as breaches increase over the next few years, we are going to trust this info to fewer and fewer services, creating a defensive barrier for companies that already have much of it (Google, FB, Apple). Existing incumbents are pouring resources against increased security; strategically a great place to invest if you’re one of the early winners.

– Biz Stone (Founder at Twitter and Blogger) released his new ‘social search’ app Jelly (Link), which uses images, location and users’ existing social networks to deliver answers on visual questions. The product seems early and I haven’t gotten great answers yet, but I’m going to keep the app around to see how the community evolves.

– AT&T unveiled sponsored data this week, in a move that would subsidize data costs for users, and simultaneously took a swipe at the open Internet. (Link). Albert Wenger from Union Square Ventures also wrote a great editorial piece encouraging us all to work to keep the Internet and open place in 2014. (Link). I get the sense that selling money via free sponsored Internet sponsored is going to be a huge hit and a strong headwind against the open Internet. If the markets are allowed to evolve naturally, this is going to be the end state – great for business, but questionable how this works out for humanity at large.

– Aereo raised an additional $34mm in Series C investment, as the great unbundling of media continues. With Aereo, Netflix and a few other packages I have very little need for a full cable package anymore (HBO the obvious holdout). With that said, making the assumption, as many of my colleagues have, that cable operators are going to lay down and die in the content delivery space is a huge mistake – if anything I expect to see the better companies raise their game significantly in the coming years. My prediction: the next five years will be epic for consumers.  Link

This Week – 01.05.14

After a brief stint on Medium, I’m back to my old WordPress Blog.  I didn’t really see the value yet, but I may be back at some point.

I am also making a few plans to change the format of the content of this blog. While I intend to continue posting original content, I’m going to start posting a weekly summary on Sundays of what I read during the week that I found interesting, and I may post a few upcoming events in New York that I’m looking forward to.  If people like this, I’ll start sending it out in a Newsletter.  Mostly, I intend to cover startups, marketing and marketing tech, management and some tech related industry items.  I’ll also have a New York Tech slant as that’s where I mostly operate.  I’d love thoughts and feedback on these moving forward.

On Twitter’s Average Revenue per user – There was a useful post on Quartz that did some quick math to calculate average quarterly revenue average per monthly user, landing on $0.55 in quarterly revenue per monthly active user on Twitter.  I’ve always found this metric to be a bit confusing as it uses quarterly revenue and monthly-active-users, so this helps break the calculation down to a fairly intuitive level. As a comparison, $FB was closer to $1.20.  Link

More On Acquisition Costs vs. Lifetime Value – Saar Gur from Charles River Ventures created a nice presentation on how to think about acquisition costs versus lifetime value. A lot of startups try to tackle growth before revenue, thinking about it as a sequential equation. While that’s tactically correct, it’s strategically a little lazy.  There are always bigger, publicly traded comps that can help you think about LTV, even if you’re pre-revenue. Link

 The U.S. Student Debt Bubble– Peter Thiel submitted his Graph of the Year for 2013,  choosing to highlight the growing student debt burden in this country juxtaposed against the average starting salary for a student fresh out of school.  This is going to come to a head at some point soon and it’s likely to be an ugly resolution.  It’s also a huge opportunity for disruption and innovation. Link

Kevin Rose’s Tiny New Prototype – Kevin Rose, founder of Digg, created a new blogging platform prototype and just put it out into the world to get feedback. Tiny gives a reader a live, obfuscated view of the author while they’re writing.  While Tiny probably needs some more refinement, I think Kevin’s decision to release a prototype to his audience was a really smart way to work on a product, and contrary to the way a lot of first-time entrepreneurs think about the world (fixed pie, hide your ideas).  I’m also a big believer in the space he’s shooting at, making the web more dynamic, richer and more live.   Link