When your heroes disappoint you…

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Kimbal & Wolfgang after lunch in 2012 at Spago

For the past decade I’ve watched my good friend Kimbal tirelessly build his brand of “farm to table” restaurants, simply called “The Kitchen,” into a movement.

Like his slightly more famous brother, he focuses on the details relentlessly and the results are just stunning. The Kitchen has seven locations, and is one of the most recognizable brands in the food industry. People are literally begging Kimbal to bring his brand to their hotels and residential buildings around the world — it’s that special.

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Kimbal has moved slowly and methodically, which is exactly the advice that was given to him by one of his all-time culinary heroes, Wolfgang Puck, when they dined three years ago at Spago.

(Side note: Spago is one of my favorite restaurants in Los Angeles, the schnitzel is better than any I’ve had — including in Munich, Bavaria, and Berlin).

The WSJ today outlines Kimbal’s meeting with Wolfgang, who sadly has decided to steal not only Kimbal’s locally-sourced concepts, but also, this is where it gets just bizarre, the brand.

“The Kitchen… by Wolfgang Puck” is launching soon with recipes that use “only the freshest, locally sourced ingredients.”

In the technology industry we have a long tradition of people mentoring each other, and sure, people riff off each other’s ideas, but the wholesale stealing of a brand and concept like this is just disappointing and strange.

Wolfgang is such a creative force I’m certain he could come up with a dozen viable names that don’t confuse the public and impede Kimbal’s ability to build his business.

I would love to say there is some grand lesson here about entrepreneurship, but I can’t find it. Sometimes your heroes just disappoint you, I guess.

A simple change like calling your efforts “Wolfgang Puck’s Kitchen” would do wonders Wolfgang — and it would trade on your legendary career, not Kimbal’s budding one.

This Week in Startups: Gagan Biyani, CEO & Co-Founder of Sprig

In episode 620 of This Week in Startups, Jason sits down with Gagan Biyani, CEO and cofounder of Sprig, formerly of Udemy and — Jason learns through the course of the conversation — Lyft. They discuss Gagan’s background in entrepreneurship and peer-to-peer services as a foundation for the work he’s doing with Sprig, a brand-new Sprig feature, and the tremendous future he predicts for the company. Here are a few other highlights from this episode.

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Technology Enables Innovation Upon Innovation

Jason and Gagan spend the first part of the episode discussing Gagan’s professional background and the elements that came together to lead him to co-found Sprig. In the course of this conversation, they mention how technology didn’t even present the opportunity for fresh, ready meal delivery a few years ago: without GPS, Uber and Lyft wouldn’t exist. Without driver-on-demand services, the idea for home delivery of meal delivery didn’t have a space to exist. They comment how this is often the case with major innovations: you don’t know what’s going to happen until the foundation is laid for an entrepreneur to take advantage of that opportunity.

Entrepreneurship Can Be About More than Just Making Money

At one point, Gagan makes a statement that may sound crazy to most entrepreneurs: he considers it his goal to be an activist, not just to make money. In that way, he says his personal mission as an entrepreneur overlaps with projects that help others: Udemy provided a new model of education, and Sprig improving the health quality of the food we eat. Especially for an entrepreneur with such an impressive track record (he also had a stints at TechCrunch and the aforementioned Lyft, as well as co-founding Growth Hackers Conference), it’s refreshing to hear that his ambition comes from a personal place.

Let Your Mission Drive Product Developments

During the episode, Gagan gives Jason a demo of a new feature in Sprig: labels on each meal that give deeper insight into the nutritional breakdown of that meal. The three labels “clean,” “balance,” and “fuel” help consumers gain information about the meal (calorie count, protein/carb/veggie breakdown) at a glance, and help distinguish Sprig on their mission and value proposition of providing healthier options to their users. Jason and Gagan discuss how this helps make a company stand out in a sea of competitors, too.

Continue reading This Week in Startups: Gagan Biyani, CEO & Co-Founder of Sprig

This Week in Startups: Brock Pierce, Blockchain Capital Managing Partner & Bitcoin Foundation Chairman

In Episode 618 of This Week in Startups, Jason sits down with Brock Pierce, Managing Partner at Blockchain Capital and Chairman of the Bitcoin Foundation. Together, they discuss blockchain protocol, bitcoin mining and scalability, innovative use cases, and the future of cryptocurrency. Throughout the episode, Jason asks Brock important questions about the technology and future of Bitcoin and blockchain; these answers provide insight into the cryptocurrency industry as a whole, and the huge potential it will have to change the world. Here are some of Brock’s most salient answers, if you’re curious to learn more about Bitcoin and blockchain technology.

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What is the difference Bitcoin and blockchain technology?

As a relatively new development, Bitcoin is not a technology most people understand at a basic level. Brock explains that blockchain technology is the way that data is stored and authenticated, and Bitcoin is one of the types of data that can be transferred across blockchain technology (in the example of Bitcoin, the data itself is given a monetary value, and called a cryptocurrency). He says, “it’s like blockchain technology is the operating system and Bitcoin is the first application on that operating system.”

Why hasn’t Bitcoin become part of our day to day lives?

Brock explains that for the most part, the technology and security solutions that Bitcoin provides aren’t necessarily big enough to change banking and financial behaviors in developed countries with stable currencies and trustworthy governments and banking systems. In countries or parts of the world that don’t have such services and systems, Bitcoin presents an opportunity to establish security and trust that isn’t currently there. Just because it isn’t being widely adopted in the U.S. doesn’t mean Bitcoin won’t change the way currency is exchanged in other parts of the world.

Why do we need to have mining at all?

Mining is integral to the trustlessness of the Bitcoin cryptocurrency, Brock says. While this may seem counterintuitive, the fact that you don’t have to trust the person you’re doing a transaction with (because the transaction is authenticated by ‘miners’ all over the globe) makes it a must more secure system. Just like reviews helped you feel better about not buying a fraudulent item on eBay, mining helps authenticate Bitcoin transactions so that everyone has access to the proof that they happened.

Continue reading This Week in Startups: Brock Pierce, Blockchain Capital Managing Partner & Bitcoin Foundation Chairman

Incubator hopping: Should you go to more than one incubator?

My pal Sam Altman wrote a post about a growing trend I’ll call ‘incubator hopping,’ in which he explains that going to another incubator may actually DECREASE your chances of getting into YCombinator, rather than giving you a better shot.

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Some incubator heads I spoke to read Sam’s post as a scare tactic designed to discourage founders from going to other programs. Let’s put that inside baseball stuff aside for now and focus on the actual question at hand:

Should you go to more than one incubator?

I’ll give you the correct answer, which is obvious, but dependent on your options. Specifically, it depends on a) how strong a reputation you have as founder, b) the overall strength of the business and c) how competitive a market there is for your equity (which is tied to points A & B above. At least in a rational market).

Here is exactly what you should do, in order of how strong you are (on a scale of “seemingly invincible” to “desperate”):

  1. (SEEMINGLY) INVINCIBLE: If you can raise an A-Round without ever going to an incubator, you should do that. You’re obviously awesome and don’t need help from an incubator. You can, and probably have, self-funded your MVP.
  2. VERY STRONG: If you can raise a seed round right now, you should only go to an incubator if you think it will increase your chances of getting an A-Round (which is very hard to do in 2016).
  3. STRONG: If you can’t raise a seed round, but you get into a high-quality incubator, do it quickly. Incubators are the way many angels and syndicates look for a signal that you’re worth a seed round — and they’re right! If you make it through a respected incubator, you should have been vetted to the point at which you have a working product, some customers and perhaps even revenue, which greatly improves the angel’s chances of getting a return.
  4. WEAK: If you can’t get into a ‘Tier One’ incubator, but can get into a second tier incubator in a second-tier market with second-tier mentors (i.e., folks without killer track records), well, that’s better than not starting a company in my book! Give it a shot, and if you fail, the only thing you’ve lost is six months of your life. You’ll have learned a ton and increased your chances of being part of the first three groups above!
  5. DESPERATE: If you went to an incubator and didn’t raise a seed round, or you did and you’re out of money, you’re going to want to take a deep look in the mirror and ask the following questions:

a) Does your product suck?
b) Does your team, ummm, suck?
c) Is your team awesome and you just picked a bad idea?
d) Is your team awesome and everyone else in the world is wrong about your idea?
e) Is your team awesome and you’re on the cusp of a breakthrough / pivot?

Continue reading Incubator hopping: Should you go to more than one incubator?

Build & fund a startup in 48 hours with this simple hack

Startups really need five things in their first year:

  1. Investment (or revenue!)
  2. Talent
  3. Feedback from investors
  4. An MVP
  5. Attention (press, buzz, users, etc.) 

What if I told you that you could spend 48 hours, over a single weekend, and make massive progress on, or even solve, all five of these challenges?

Might you be interested in that??!

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Well, I’ve seen startups form a team, build an MVP, get critical feedback from experts, raise money, get press, and get accepted into elite incubators using this one single hack.

What’s this amazing hack?

Hackathons!

In fact, not only did I invest in the last two winners at the LAUNCH Hackathon, Interviewed.com and WizzyWig, but they were also BOTH accepted to YCombinator.

I. Why Hackathons Are Your Secret Weapon

The reason hackathons are so powerful is because they force small teams to make something specific that the judges — who are founders, technologists, and investors — can easily understand and appreciate. 

Constraints not only make for great art, they make great startups. By only having 48 hours and 3-4 team members, you have to focus on what’s important. You’re not going to build 10 features, you’re going to build the most important one or two that you need to demonstrate your value to the judges — and that you can build quickly.

Angel investors love hackathons because they signal who is a serious founder who deserves funding. If you’re willing to give up a weekend and compete against other founders to impress them, angels will — correctly — believe that you’ve got the grit and tenacity to be funded.

Continue reading Build & fund a startup in 48 hours with this simple hack

The Controlled Deflation of the Bubble is Almost Complete

For the past three years, everyone has been kvetching about this fakakta bubble and, frankly, it’s annoying.

Today, I announced on CNBC that the two major bubbles we’ve all been so worried about — the early- and late-stage private company bubbles — have been successfully deflated in a very controlled fashion.

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Early Stage Comes Back to Earth

In the early-stage space, I’ve seen the uncapped notes and “12-15m cap” notes for YCombinator companies with 10 weeks of growth go away completely — and that’s a good thing!

In fact, I was laughing out loud with a founder about the uncapped note in 2015 at the Golden Globes on Sunday night. (Event drop is the new Name Drop!) The only thing funnier than the fact that serious investors gave him a mountain of cash without knowing how much they paid for their shares was Ricky Gervais taking apart Mel Gibson.

In the past couple of months, I’ve seen the early-stage pull back in a major way. Here are some common events I’ve witnessed (with specific startup names/details anonymized):

  1. Startups that are doing well having to meet with over 50 investors to close a flat round.
  1. Startups doing bridge rounds with a 2-3x liquidation preferences (this means those recent investors get a guaranteed return of 2-3x their money before any other shareholders get paid).
  1. Early-stage investors telling me they are “taking a pause” on investing in new companies for the next six months. In fact, two non-traditional, authors-turned-angels, Tim Ferris and Tucker Max, have both announced they’re hanging it up.
  1. Startups coming out of elite incubators that can’t hit their target valuations or raise amounts coming back to me six months after graduation with “rebooted” valuations.

Continue reading The Controlled Deflation of the Bubble is Almost Complete

We asked 6,491 founders what they’re buying next year … here’s what they told us

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We asked 6,491 (of the 15,000) people we plan on having at the Launch Festival this year what services they plan on buying in the NEXT YEAR.

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If you’re in the cloud computing, advertising, data analytics, legal, email, design, etc., space we’ve got thousands of folks who want to meet you.

In case you didn’t know, we run the event — which cost $1.5m+ to put on, at a break even (or sometimes slight loss), in order to support founders and inspire innovation.  

We can only make this happen because amazing partners like IBM, Sequoia Capital, Ludlow Ventures, WSGR, InVision, Localytics and SLACK help us throw the party.

You can join us as a partner by emailing me personally at jason@launch.co or filling out this form.

We really could use your support throwing the party … and hey, you’ll get a ton of customers for your product by helping us — that whole, win/win/win thing!

Snapchat is going to reach a billion users thanks to “Gen-S” — the smartphone generation


 

Snapchat is going to reach a billion users, challenging Facebook, YouTube, and mainstream media, for the attention of “Gen-S” — the smartphone generation.

I know this because this Christmas a bearded, chubby, and jolly fellow showed me the power of Snapchat.

No, not Santa Claus, the hip-hop version of Old Saint Nick — DJ Khaled.

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Every time this one-part Tony Robbins, two-parts Puff Daddy takes the screen, over three million views come pouring in. Yes, you read that correctly, three million views every time a DJ from Miami gets a massage, smokes a stogie, or shows you his shoes.

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Kim Kardashian and her clan get just under two million viewers per episode now, down from 2.5 – 3 million they used to pull in.

These are not apples to apples, with Khaled sharing 5-second clips, but it’s fair to say the viewership is similar. Where things diverge is the cost, with the Kardashians signing up for four more years of documenting their lives for $100m — and that’s just their salaries.   

What makes Khaled so watchable is that he is not obsessed with his own success (and what it buys), but his message of hope — he wants you to be as successful as he is. It’s a classic device, but it works.

In another year Khaled will, if he keeps this up, grow his audience by 10x, and have 30 million folks watch him pour Apple Ciroc vodka, “bless up” his audience, and give all of us the “major keys” to success.

Continue reading Snapchat is going to reach a billion users thanks to “Gen-S” — the smartphone generation

From 2012: There is no Series A Crunch.

I wrote this piece back in December 2012, when folks were in a panic over the “series A Crunch.”

Does/did my argument hold up, three years later?

best @jason

From November, 2012: The “Series A Crunch” refers to the fact that while angel-funded startups (think: $750,000 invested by angels in two founders) have grown five times-plus in the past three years, the number of Series A fundings (think: $3 million invested by a venture capitalist in a 10-person startup) has stayed the same.

I’m telling you right now this is a complete non-issue.

Many folks are obsessing over the supposed “Series A Crunch” because, quite logically, if there is a fixed number of Series A investments to go around and a lot more folks fighting for them, well, many folks will not get one.

Parents fleeing a public school system increase the demand for the (relatively) fixed number of slots in private education, making those slots more and more valuable. In fact, it only takes a percentage of actors to “switch teams” to cause an imbalance.

What these folks, largely journalists, who have no experience in business, fail to realize is that “things” do not always stay the same in an equation — and that founders should be wickedly good at adapting to changing conditions.

Fact one: The number of Series A fundings could dramatically increase.

The number of slots for players in the NBA this year was 435 (29 teams times 15 players). However, when the NBA started 60 years ago, there were only 11 teams, so the number of slots totaled just 165 (assuming 15-man rosters back then).

In the coming years, the NBA will, mark my word, add a half-dozen teams in Europe and Asia. It’s safe to assume there will be a 40-team league some day.

Additionally, after the shortened NBA season last year, fans, players, and the league realized 82 games were not as much fun as a condensed 50 to 60 game season. I believe the NBA will go to two shorter seasons a year: one US-only and one international.

With two seasons and a dozen more teams, it’s possible the number of slots will grow to 500 or 600 — or more.

Bottom line: Capacity increases along with opportunity.

VCs are a greedy lot (and us founders and GPs love you for it), and the world has mountains of money sitting in bonds, gold, corporate stockpiles, and plain old devaluing C-Notes (aka cash).

If 10 companies with the metrics of Fab, Dropbox, Yammer, Uber, or AirBnb were to walk into a VC firm with only the money to fund five, you know what they would do? Raise more money!

Capacity expands all the time, and it could turn on a dime. Look how quickly Marc Andreessen and Ben Horowitz raised fund after fund in the last couple of years.

Television is another wonderful example of capacity increasing.

Just 30 years ago, your chances of being an actor in a TV show was something like 20 shows on each of three different networks with seven characters on each. That means there were 420 slots available (20 shows times three networks times seven characters = 420).

Since that time, the number of channels has grown and therefore the number of shows with slots for actors.

Additionally, shows now have numerous plot twists per shows, which means shows need many more characters. Compare shows like “All in the Family” or “Happy Days” to more recent series like “The Sopranos,” “Game of Thrones,” or “The Walking Dead.” Tons of new characters are introduced into every episode of those later shows. I think you could count on one hand the new characters introduced on “Happy Days”: Pinky Tuscadero, Mork, and Chachi.

TV has experienced a double expansion: more shows and more characters per show.

This would be like the NBA deciding to make the court 20 percent bigger and putting 14 players on the court at a time rather than 10. (Wonder what that would be like?)

Fact two: A Series A is not the only option to grow a business.

Most pre-Series A companies have under 5-10 people and no revenue. Therefore they “burn” about $50,000 to $75,000 a month in my experience (think five people times $75,000 a year equals $375,000 plus $100,000 in other costs).

Here’s an absolutely crazy idea for folks “facing” the Series A Crunch: Make $2,750 a day (about $1 million per year). If you’re burning two or three times that amount, well, cut one-third your costs. VCs will fund any company with a Series A if they are making $2,750 a day.

If you can’t hit breakeven, well, shut your company down and go work for a startup that can. If you can only hit $1,000 a day, merge your company with another one that is making $1,000 a day and cut the bottom one-third of the staff.

Not willing to do that?

Well, if you’re not willing to give up your diapers and put on your big-boy undies, then you need to stay in nursery school for another year. Series A is for folks who don’t make wee-wee in the bed.

Fact three: VCs are not the only source of funding.

If you have some combination of solid growth, decent revenue, a great team, and a sexy product, you can easily — yes, easily — raise money from strategic investors or rich people. Is this ideal? Some have argued strategic money is bad, but those folks are usually VCs who are in competition with the strategics.

VCs really hate strategic money, because it is valuation insensitive and can result in an early exit (e.g., if Home Away had invested in Airnbnb, perhaps they would have been talked into selling in the HomeAway IPO).

If you went to Mark Cuban with a company making $25,000 a month, no or low burn, a big vision and a reasonable valuation, he will put money into it. I know, he invested in my last company — and many others — with that profile. Rich folks are very, very smart and they know that businesses that have money in their bank accounts and customers paying for their product rarely go to zero.

Bottom line: You’re in control of your destiny, and obsessing on the blogger-manufactured “Series A crunch” will only distract you from the work you need to do survive the winter. And winter always comes. Always.

Why I’m bringing back the Open Angel Forum

 

[ tl;dr: I’m bringing back my angel dinner, the same one Uber & Thumbtack pitched their seed rounds at, at my house on December 2nd, because startups really need help getting past their seed rounds. ]

Back in 2009, I started a dinner party called Open Angel Forum. The goal was to kill the Keiretsu Forum, which charged founders thousands of dollars to (supposedly) pitch angel investors.

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Using the term “supposedly” because many founders told me the only follow-up they got from these payola groups was from service providers who attend them pretending to be angels.

Open Angel Forum alumni include: Uber, Thumbtack, Backupify, Contently, Food52, Signpost, StyleSeat, and countless others. They all raised part of their first round of funding at this wonderful event.

Then AngelList came around and there were many more angels than startups. There was no reason to host Open Angel Forum, at least not in New York, LA, or San Francisco. (They kept doing it in Boulder, actually).

Now I see a need for the Open Angel Forum again, but not because there are predatory scumbags trying to trick unsuspecting founders into paying for access to angels.

The problem today is that there are some great angel-funded startups that are stuck between the angel-funded world and the VC world.

Continue reading Why I’m bringing back the Open Angel Forum

What I learned from passing on investing in Twitter & Zynga — & saying yes to Uber & Thumbtack

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This week I was asked to speak to a dozen billionaires at a secret meeting about putting $100b to work. They wanted me to talk about what I’ve learned over the past five years as an angel investor.

Well, here it is.

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It took me five years, but I’ve learned what the two most important factors are in the success of an angel investor. It’s not being smart, it’s not being diligent, and it’s certainly not being a visionary.

After passing on Twitter and Zynga, I invested in Thumbtack and Uber. Looking back, I knew Ev and Mark were winners, but I didn’t think their ideas — for “updates” and “social poker” — were winners.

I was wrong about their ideas, but I was right about them.  

When Travis and Marco came along with their ideas, I didn’t even try to judge if “on-demand drivers” and “a better craigslist” were winners, because I knew the individuals were winners.

That’s enough information to make a bet.

Which leads me to “Jason’s Law of Angel Investing,” which states:

“You don’t need to know if the idea will succeed — just the person.”

Continue reading What I learned from passing on investing in Twitter & Zynga — & saying yes to Uber & Thumbtack

FIGHT! FIGHT! My response to the CEO of Outbrain

[ tldr: The CEO of Outbrain sent me a choice email regarding AdReplacer, which might — at some point in the future — impact his business in some minor way. Here is my response. I’ll leave it up to him if he wants to publish his email. ]

Thanks for reaching out. Let’s split this into three issues here. First, my support of startups; second, how consumers feel about advertising (and your product); and third, the morality of adblockers.

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In terms of my support of startups, it speaks for itself:

  1. 150 angel investments
  2. almost 600 episodes of This Week in Startups
  3. 20,000 free tickets distributed for my events, Launch Festival, SCALE, etc., this year alone

To the second point, consumers are fed up with overbearing advertising. This is a problem that has been caused by aggressive marketers and the publishers who enable them.

Advertising inventory has exploded, but at the same time, consumers have become much more savvy about avoiding tricky ads. Which then requires marketers to get even trickier and more misleading.

This has resulted in the wholesale destruction of journalism’s famed “Chinese Wall” between editorial and sales, with even the New York Times trying to trick their customers into clicking on “native advertising.” It’s disgusting to anyone who cares about journalism and keeping the public well-informed.

Native ads are perhaps “Peak Deception” in this war between marketers and readers, with Google’s confusing search ads being a close second. (Reports show that up to 40% of Google users don’t know they’re clicking on an ad — something that has caught the attention of even the FTC, which is handing out warnings.)

Publishers will do anything they need to in order to survive. Except, it seems, charge for their content. They’re probably right not to charge, because most consumers don’t want to pay. And so the Cold War continues!

Continue reading FIGHT! FIGHT! My response to the CEO of Outbrain

Don’t bring a knife to a gun fight

Just like a @#$ to bring a knife to a gun fight
– Sean Connery, The Untouchables

We are living in an age of excellence, where the science of product design is churning out wave after wave of exceptionally well-conceived delights for consumers. Product is so important, in fact, that distribution is often drowned out by the popping of champagne corks, as founders watch their babies hit number one on Product Hunt and Hacker News.

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What a thrill it is to hit the top of the charts, a perfect peak, only to humble founders with the eventual and brutal pit of despair they will face in the coming days and weeks, as other products replace them at the top of the App Store.  

Lasting distribution, created by growth-driven teams that have exceptional products, are the big winners today. Airbnb built a killer tool for Craigslist, Uber mastered the referral system and ‘over the shoulder virality’, while Wealthfront took the referral system and content marketing strategies deployed by others to the next level. WhatsApp crushed it using the “phonebook social network” combined with relentless localization.

I’ve been looking through the 400 applications, and still growing, that have come into this year’s LAUNCH Incubator class, and I’m stunned by how many have exceptionally well-created products — with no consideration for distribution.

Great moves all, but with no marketing budget, target audience, titles, or tag lines.

Standing out today with investors requires great products, but that’s table stakes. To really stand out from the pack, bring a killer distribution hack that you refined and can speak about first-hand.

Continue reading Don’t bring a knife to a gun fight

When should you start meeting with investors?


 

One of the most frequent questions I get from founders, and one I had myself when I was founding companies, is “When should I approach investors?”

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It’s a tricky question, and the answer would be different in 1990, 1995, 2000, 2005, 2010, and 2015. The benchmark for when “you’re ready for a meeting” changes based on the competition in the overall industry (now at record highs), the profile of the investor you’re meeting with (first year investor vs. year 20 investors), and your track record.

One thing is for sure going into 2016: do not show up at a meeting without a functional prototype (aka an MVP, ‘minimum viable product’).

Simply put, showing up without product today is like showing up without a business plan in 1995 — you simply won’t be taken seriously by most investors.

There are two exceptions to this:

  1. You’re meeting an investor who worked with you previously and you set the meeting in the context of “can I float an idea by you?”
  1. You sold your last company and returned 10x for your previous investors, and you put this meeting in the context of “I sold Weblogs Inc. 18 months after I started it, for 10x the valuation at which Mark Cuban invested. I’m working on my next idea and I want to show you the research.”

[ Note: that is how exactly how I landed Sequoia Capital for Mahalo, and got two other offers from big firms. I showed them my research on search results. Wouldn’t work today. Folks don’t invest millions to make an MVP anymore. ]

The bottom line is, the MVP is the business plan and your resume. It’s the business plan because you can show it to customers and get feedback on it immediately, and it’s the resume because an investor can see if you know how to build a product.

Continue reading When should you start meeting with investors?

How to pick an incubator: YCombinator, Techstars, 500Startups, or Launch Incubator

As a follow up to my post on creating the best startup incubator in the world, I made a little video on why you should apply to the Launch Incubator and how we built upon the model of YCombinator, 500Startups, Techstars and others to build what is, far and away, the best incubator in the world.

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* Quick note: TechStars subscribes to my small class size theory as well, with a max of 10 startups per class.

** Quick note: if you’re a startup and you get into YC, TS or 500 you should go — these are all great programs. If you get into those programs and mine? Well, I think you should come to mine, but the best way for you to figure that out for yourself is to:

a) talk to the graduates of both programs

b) ask which partner will be your partner at the program (not just the figure head of the program who you meet 2-3x), and how do they compare to me. If you’re spending 12 weeks with Dave Cohen, PG, McClure, or Sam Altman directly, that’s a tough decision.

The Greatest Incubator Ever Created

For the past 20 years I’ve watched the power incubators have had in technology. I’ve taken notes diligently, spoken to my 100+ portfolio company founders and have been quietly developing what is, hands down, the greatest startup program ever created.

It’s called the LAUNCH Incubator and we’ve graduated 13 startups in the last two classes.

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We studied Bill Gross’ pioneering Idealab, which brought us eToys and PeoplePC, and Paul Graham’s gold-standard YCombinator, with its phenomenal scale and triplet of unicorns in Zenefits, Dropbox, and Airbnb, as well as David Cohen’s innovative Techstars, which has reached across many cities and corporate partners including Disney and Microsoft.

These three programs are all exceptional and we’ve looked at everything they’ve done right, and combined it with our huge platform which includes the LAUNCH Festival (15,000 attendees, the largest startup conference in the world), the SCALE conference (4,000 attendees and 50+ growth speakers) and This Week in Startups (500+ episodes and counting!).

We’ve come to the conclusion that the best incubator in the world needs to focus on five things:

  1. Small class size
  2. Early access for great investors
  3. A curriculum focused on tactical issues
  4. Accepting startups with finished products
  5. Relentless support post demo day

We’ve done two classes so far, and we are accepting applications for three remaining slots in our Winter Class, which starts the week of November 16th. Our first class had 150 applicants and our second class had 350. Our current class will have over 500.

Most people won’t get in, but we’re going to meet with the top 10% in person and give them as candid feedback as we can, in the hopes that we might have them join us for the Spring Class or LAUNCH Festival.

You can apply at launchincubator.co (November 10th is the deadline, applications are being reviewed in the order they come in).

Let me explain a little bit about each lesson and share with you what our founders have said.

Continue reading The Greatest Incubator Ever Created

Startup Time-to-Profitability Calculator

Startup_Growth_Calculator

A couple of months back I wrote a piece called “The Startup Martian,” and asked founders “Can You Get There on What You Got?”

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PG recently wrote a related piece, Default Alive or Default Dead, that referenced an awesome little web tool that I’m going to be using in every angel meeting I ever do again called the “Startup Growth Calculator (which here I’ve set at $30,000 a month in costs, $1,000 a month in revenue and 20% m/o/m growth — 1.5 years to profitability!”

I do these calculations in my head instantly when talking to founders by asking them a series of questions in our meetings:

1. “How many people do you need to build and maintain the product?” then…

2. “How much are you going to charge for the product?” then…

3. “How many customers do you think you’ll have at the end of year one … and two?”

Now I can just direct people to this simple page — brilliant!

Apple’s brilliant assault on advertising — and Google

For their iOS 9 release, Apple not only permits, but actively encourages developers to make Apps that remove advertising and tracking from the web. They added this feature deliberately; it’s not a hack by developers they’ve turned a blind eye to.

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HOW EFFECTIVE ARE MOBILE AD BLOCKERS

I’ve been using two Apps called Adblock Fast and Crystal for the past week and surfing the web on my iPhone has become delightfully fast and uncluttered. Blocking ads on your mobile phone is like moving from a crowded apartment complex in a polluted, violent city to a peaceful lake house.

It’s a massive, noticeable change for two important reasons that have to do with the device you’re holding: screen size and bandwidth.

Given the increasing size of our desktop monitors, multiple windows to choose from, and increasingly fast cable modems and fiber connections, ad blockers have been a minor innovation on the desktop this past decade. (We hate you if you have fiber, really.) On a desktop, you barely notice the ads are gone, because the ads weren’t laying on top of the content. They were typically around the content.

On an iPhone, well, you’re dealing with 5-10% of the screen size of your desktop monitors, so publishers putting up a roadblock on the content, then asking you to use your fat fingers to hit the tiny little X or ‘skip the ad in 4… 3… 2… 1…’ is just overbearing.

Mobile advertising is so ugly and intrusive, it actually makes people AVOID mobile browsing. That’s why the ‘read it later’ feature, pioneered by Marco Arment’s brilliant Instapaper and Nate Weiner’s Pocket, became so popular that Apple copied them. When a user hits ‘read it later,’ it means ‘read this when I don’t have to deal with all this bullshit.’

Continue reading Apple’s brilliant assault on advertising — and Google

You don’t have what it takes

“You don’t have what it takes,” I told the founder as he stared at me, crestfallen like a child who just found out that he didn’t make the team.

“I do, I’ve worked harder than anyone else…” he pleaded.

“It’s not about hard work, it’s about solving hard problems with the least amount of work,” I told him.

“So what should I do?” he asked.

“You should quit… and go work for someone who does have what it takes,” I told him, without a moment’s reservation or regret.

“You should do something that’s much easier and that allows you to refine your skills. Right now, you’re one of three people at a startup when you should be one of 200 people at a mid-sized company,” I added, ending the meeting.

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Most Folks Don’t Have What it Takes

You see, what I’ve learned after 25 years of doing this startup thing is that 99% of people simply don’t have what it takes to lead a startup — and thank God. Leading a startup is a brutal pursuit. Most days are a death march in which you work horrific hours under massive duress waiting for your chance … to join the 80% of startups that die off.

What person in their right mind wants to run marathons that 80% of the time ends in them falling between miles 18 and 25? You’d have to be an unbalanced and desperate person to want to run a marathon in which the last five miles are filled with people getting tackled and sucker punched to the ground.

So, if you’re reading this, chances are, candidly, you don’t have what it takes.

Said conversely, if you’re well adjusted, smart and not a masochist — congrats!

Continue reading You don’t have what it takes