The Last Mile (TLM) founder Chris Redlitz & graduate Kenyatta Leal on This Week in Startups

In-prison accelerator The Last Mile teaches inmates technology & entrepreneurship, giving them essential skills & the promise of a better life; Founder Chris Redlitz & graduate Kenyatta Leal explain exactly how

It’s one of Jason’s favorite episodes. In the studio is Chris Redlitz, Partner at Transmedia Capital and Founder of The Last Mile (TLM), a program that teaches prisoners technology and entrepreneurship to gain essential job skills and prevent recidivism. Joining as well is Last Mile grad Kenyatta Leal, former San Quentin inmate of 19 years and current Manager of Campus Services at RocketSpace. Chris shares his inspiration for The Last Mile, its incredible success, and ambitious & promising future, while Kenyatta describes in-depth the harsh realities of prison life, along with the critical skills/lessons he learned at TLM and the euphoric moment of experiencing freedom again. The three dive into many different riveting discussions, including the alarming incarceration rates in the U.S., the pathology of the broken the prison/punishment system, how programs like The Last Mile give great hope and purpose, and a vision for a better future. You don’t want to miss this!

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We’re gonna miss you, Goldie; R.I.P. Dave Goldberg

option 2

You meet a lot of people in this life.

Many are angry, most are anxious, and some are clueless. Few are content, very few care about others more than they care about themselves.

As you get older, your radar gets better and your time becomes precious. You narrow down the number of people in your life to only the good ones, trying as hard as you can to double down on the time you spend with them.

Dave Goldberg was the good guy at our poker game that everyone wanted to spend more time with. He was the guy we all wanted to be a little more like. He was a mensch amongst the good ones. 

He was a better friend, a better husband, a better father, a better leader, and a better person than all of us — and we knew that.

Goldie set the standard we all tried to reach.

He carried himself with an effortlessness that you can only have when you’ve found peace in your life. An effortlessness, a calm, that reminded you of a Priest or a Jedi Knight, who had seen it all and had figured it out.

He focused on his family, his friends, and his team at work. He had time for you, he listened, he considered things and spoke like an old, wise man. Wasn’t uncommon for him to take a moment or two to think through what he was going to say — and the impact it would have on the person he was saying it to.

Continue reading We’re gonna miss you, Goldie; R.I.P. Dave Goldberg

Let’s all laugh at my horrible 2006 post: “YouTube is not a real business”

There’s a great debate over at YCombinator about my blog post from 2006 titled, “YouTube is not a real business.”

What a horrible headline in 2015 — but I stand behind half of it to this day!

The fact that YouTube exists today is nothing short of a miracle. You have to give kudos to the team, Sequoia Capital and Google, for literally saving this business.

At the time I wrote that post, YouTube was not a real business; it was a very simple website largely built off copyright violations with unsustainable legal and bandwidth bills. The fact that they were forced to sell a business that is now worth $100-150b for $1.6b is a good indication for how close to the brink of destruction they were.

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There are three important lessons here for founders:

  1. Breaking the Rules Can Pay Off

Google made a sick, sick bet and won big by buying a huge lawsuit and a growing business. They broke a ton of M&A rules and got 100x on their investment. Given that Napster, Kazaa, and countless other “media sharing” services had been absolutely crushed, it is a true testament to Google’s legal and leadership teams that they took this risk. It was not clear that they would win their cases, but they did.

While the management team at YouTube might not have directly supported copyright violations, they did aggressively pursue a “we’re sorry that’s not our problem — we’re a platform” approach. An approach that is now the standard for disruptive startups.

  1. Content ID was a brilliant innovation

YouTube was able to calm down many a pissed off media holder when they showed them content ID: “Look, we know this is your video so we will shut it down or let you claim it — and the revenue from it — for all time! What would you like us to do?” Think of how fucking brilliant that was. That’s perhaps the biggest lesson: you can innovate your way out of legal trouble!

Continue reading Let’s all laugh at my horrible 2006 post: “YouTube is not a real business”

Welcome to SCALE

climbingHaving invested in over 100 startups, I’m always concerned when founders spend their time going to conferences. Most conferences are designed for some combination of schmoozing and panels of CEOs debating three or four inane questions provided by a subpar moderator.

My advice to founders has been: “Let’s not waste time and money on conferences until our startup is scaling.”

That’s when it hit me, no one is doing a conference about SCALING your company!!!

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So, last year I invited 900 founders to SCALE to learn, in detail, what they could do to grow their company. It was a huge success. In fact, many of the founders of my portfolio companies told me it was the best two days they spent all year.

We’re doing SCALE again this year, October 13-14 in San Francisco, and I’m inviting you to come!

If you are the founder of a company and you don’t have the money to attend, you can apply for a free ticket here. Like all of our events, we give 80% of the tickets to founders for free. Yes, free. We just ask that you fill out a questionnaire which helps us, you guessed it, convince sponsors to help us put on the show.

1. Free tickets for founders (with questionnaire)
2. Paid for everyone else (service providers, VCs, big companies, etc.)
3. Speaker proposals are being accepted

Every single speaker who makes it to the SCALE stage has to come to mandatory rehearsals with me, and if their presentation doesn’t hit our standards for being worth it for our founders, we don’t let them on stage. We require that our sponsors come to rehearsals as well!

Last year we asked our audience to rate the 54 speakers and we ranked them. The top 25 speakers are listed below in order (we won’t disclose the rankings of those numbered 26 to 54 — though we did send them their scores!).

Fascinatingly, five of the top 25 speakers (including #1!) were sponsors who really thought about how they could teach our founders something important. So, when Des Traynor from Intercom talked about maintaining product market fit and knowing when to kill a feature, and Paul Midgen explained how Message Bus decided to pivot based on five key guidelines, people got massive value.

Continue reading Welcome to SCALE

Amazing angels Joanne Wilson, Adeo Ressi, Gil Penchina & Naval Ravikant on This Week in Startups

Amazing angels Joanne Wilson, Adeo Ressi, Gil Penchina & Naval Ravikant on innovative investment, diversity, deal competition, failures, founder relationships & what truly makes a product angel-ready

Joanne Wilson, Adeo Ressi, Gil Penchina, and Naval Ravikant are four of the leading angel investors in the country. Joanne “Gotham Gal” has over 40 angel investments (75% of which are with women founders), Adeo is the Founder/CEO of The Founder’s Institute, Gil is the leading angel investor using the AngelList Syndicates platform with over 12 syndicates, and Naval is the Cofounder/CEO of AngelList. They all join Jason for a compelling panel discussion during Launch Festival 2015 on how AngelList continues to disrupt early-stage investing (although it is still an early adopter product), why Gil chose to use the AngelList platform instead of joining a traditional VC firm, how The Founder’s Institute is investing in entrepreneurs all over the world (and why it’s okay if they aren’t aiming for billion dollar exits), the state of gender diversity and equality in venture capital, how Joanne is empowering women founders with her investments and “Women’s Entrepreneur Festival,” why it is likely that 7 out of 10 angel investments will fail, what is wrong and what is changing with the current venture capital model, why founder/angel investor relationships is like dating, and each of the panelists tell us the one thing founders can do to make their product more angel ready.

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Why we invested $25,000 in Signpost in 2010 — and $500,000 today!

Back in 2010 the hottest startup on the planet was Groupon. It was growing revenues faster than anyone had ever seen, certainly faster than Google and Facebook.

Everyone you know had two or three Groupons they were waiting to redeem, and Living Social was booming as well. The country was beat up by the financial crisis, and many thought it was the “end of days.”

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Startups were taking a beating. In fact, they were unfundable and the great startups were raising their angel rounds at a $3-4m pre-money valuation.

At that time I decided I would invest in a few companies, and my first cohort included Signpost (then Postabon), Backupify, Chartbeat, Thumbtack, and Uber.

Now, back then you could only pitch to angels if you paid to do so. I found that so infuriating that I started something called the Open Angel Forum. [ You can read a post from Rob May of Backupify about that night, held at Matt Coffin’s old house. ]

The companies I mentioned above all pitched at the various OAFs around the country — for free of course.

Stu got up and pitched his vision for a crowdsourced Groupon called Postabon — as in ‘post a good thing’ — and it was such a horrible name!

To give you an idea of how long ago this investment took place, well, peep at the hysterical looking phones on the Postabon landing page — that’s the original iPhone!!!

Postabon Homepage

However, the product looked really slick and Stu presented it well. I remember thinking to myself, “I have no idea if that will work, but this guy is executing at a high-level and he sure is passionate about it.”

Continue reading Why we invested $25,000 in Signpost in 2010 — and $500,000 today!

WARNING: avoid the “Apply to Present” & “Angel Pitch Contest” event scams

follow the queen

A few days ago I talked about “doing the work” and skipping the party. Conferences tend to be one of the big things that people distract themselves with instead of doing the hard work of making a product that people actually use and get value from.

Some conferences will waste your precious time, but today I want to warn founders about an evil subculture of event producers who are designing events to scam founders — who are sometimes desperate for attention — out of their money! 

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The scams work like this:

  1. Apply for our Summit, Startup Showcase, or Angel Pitching contest.
  2. Founders spend hours and hours applying.
  3. Scumbag event producers call founders to “congratulate” them that they’ve been accepted and that the team is “super excited” about their prospects of getting press and investment from the event.
  4. Founders are stoked and start working on their presentation — investing days in the process!
  5. The signup package from the scumbag event producers arrives and it includes a $1,000 to $20,000 fee. Some true scumbags take 5% of the equity and angel investment raised at the event as a kicker!
  6. Founders are super vested at this point, and have been sold hard on the efficacy of the event. Typically the event producers share a long list of VCs and founders who have previously invested. These founders are desperate for attention and they are talked into spending the money.
  7. Founders demo at event, the room is half empty or worse — it’s filled with lawyers, headhunters, and other service providers who are pretending to be angel investors (they invested in their cousin’s company back in 1999!). Those service providers waste more of the founders’ time — and try and extract more money from them!

Grifters and scumbags have been using this scam on actors for so long that the Screen Actors Guild has rules against it!

Scam artists have been doing this for so long in the modeling space that the FTC — yes, our government’s trade agency — has issued warnings about it.

Continue reading WARNING: avoid the “Apply to Present” & “Angel Pitch Contest” event scams

Gary Vaynerchuck, CEO & Cofounder of VaynerMedia, on This Week in Startups

Gary Vaynerchuk on Crushing It in business, building a media empire, inspired investing, and making magic in the gray

Gary Vaynerchuk is an investor, author, CEO/Cofounder of VaynerMedia, Host of #AskGaryVee, and one of the most influential and dynamic voices in marketing, branding, and social media today. Gary joined Jason during the Launch Festival 2015 to share insights on his entrepreneurial journey, media mastery, and investing prowess. Some of the many gems from this conversation include: how Gary grew his family wine business from $3M to $60M within ten years, launching his public notoriety with Diggnation and Kevin Rose, why he didn’t want to be America’s “wine guy,” goals for VaynerMedia (hint: MUCH more than just building an agency), why you should only care about the “attention graph,” being very impressed with Taylor Swift and Taco Bell, the effort it takes to succeed and the importance of Twitter, the exact sort of hustle he looks for in founders he invests in, why he wakes up every morning trying to put himself out of business, why his dream of buying the New York Jets is his oxygen — and much more.

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Do the work, skip the party

drunken partyAs the money pool increases, the attention pool decreases

We talk a lot about bubbles in tech because, like real estate executives, we had our world turned upside down by one.

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Bubbles have popped five times in my life.

The 1987 crash and subsequent pullback in consumer spending largely caused my dad to lose his bar when I was 17. In 1990 the recession, driven by the Iraq war, terrorized everyone in college for years. There were literally no jobs for people with five to ten years of experience. With 0 years under your belt your options were to stay in school or be a waiter — if you were lucky.

Those two crashes were modest when compared to the big three.

First, the dotcom crash killed my magazine, Silicon Alley Reporter, and then 9/11 killed thousands of my fellow New Yorkers. As we rebuilt we got the biggest sucker punch ever from the “financial crisis” of 2007, which I refer to as “a-hole bankers fuck everyone in order to get bigger houses in the Hamptons” crisis.

Given these blow-ups, everyone is waiting for the stock market to crash today. Can’t blame ‘em, the movie seems to play out like clockwork. In fact, I keep asking my insiders to give me the top three reasons why things might blow up.

Best they can come up with right now:

  1. The crazy bear (Putin) does some crazy shit.
  2. China’s incomprensible economy suddenly becomes understandable — and it ain’t pretty!
  3. The maniac generals in Pakistan, who thought it wise to house Osama Bin Laden in their West Point, decide to jump the fence… with their nukes!

All of this is so outside of any of our control it’s not worth worrying about. Play a little defense is all we can do, so I’m refusing to pay $8-12m for brand-new startups and moving the majority of my personal net worth out of public stocks (especially in emerging markets).

Continue reading Do the work, skip the party

Professional skateboarder Tony Hawk & investor Chris Sacca on This Week in Startups

Two legends, skateboarder Tony Hawk & investor Chris Sacca, on their long-time friendship, taking huge risks, hustling to success, giving back, and defining legacy

Today’s episode features two superstars in their respective fields. Tony Hawk is the masterful professional skateboarder who catapulted his sport into the national spotlight, and Chris Sacca of Lowercase Capital is a legendary angel investor (Twitter, Uber, Instagram, Kickstarter). Tony and Chris have been long-time friends and both talk in-depth with Jason at the LAUNCH Festival 2015. It’s an awesome, dynamic conversation about their friendship, how each took massive risks to reach the top of their profession (eating ramen for years… borrowing money from assistants…), how Tony’s video game was a tipping point for skateboarding and why he he shows up unannounced to random parks to skate with kids, the amount of hustle it takes to be great, how moving outside of Silicon Valley actually helped Chris’s business, how Tony and Chris think about their legacies, what they are each looking forward to in the future, and how Tony uses Twitter for a worldwide treasure hunt, and how Chris is looking forward to another crash in tech so the pretenders clear out. Join us!

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The Startup Martian: Can You Get There on What You Got?

inters

I’ve been listening to a fabulous audiobook called “The Martian,” in which an astronaut is left behind on Mars with a limited amount of food. It’s riveting. *

The stranded botanist/engineer has to “make it work with what he’s got.”

This of course got me thinking, what if your startup was left behind? What if the eight months of runway you have was all you were going to have — would you survive?

[ * You can get “The Martian” free at audible.com/twist. Audible used to sponsor my podcast and they seem to have left this free audiobook promotion up. ]

In boom times most founders don’t think like this because, to continue the analogy, there is a never ending stream of resupply ships in our startup galaxy. Very few people are looking at “months until I run out” — let alone “days until out.”

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Most Founders Don’t Know When They Run Out

I’ve made it a mission of force that the founders in which I invest know — off the top of their heads — how many months of runway they have. It’s so important that I ask them to make it the first line of their monthly investor updates (I wrote a blog post on why investor updates are so important).

“How many months of runway do you have?” I asked one awesome founder.

“I’m not sure …” he replied.

“How much are you spending and making each month?” I asked.

“Umm … well, we don’t charge for our product yet since we’re going for growth, so I know one number perfectly: zero revenue” he replied.

“OK, so your spend is your burn — what are you spending?” I asked.

“Well, I think we spent like $60k or $80k last month … but we had the legal issue, so maybe $100k? But wait, we had to put down $50k for our office rental …” he blabbered.

“Stop.” I paused, before continuing, “It’s your job to know. Go back to your team, pull up every month’s P&L and review it with everyone. Every week get your balance from your bank accounts sent to you and know what you got!”

He nodded. He got it together and now he knows.

Continue reading The Startup Martian: Can You Get There on What You Got?

News Roundtable with Liz Gannes (Re/code) & Matt Mazzeo (Lowercase Capital) on This Week in Startups

News Roundtable! Ellen Pao vs. Kleiner Perkins: notes & lessons from the courtroom, gender bias in SV & VC culture, viva la mobile video live-streaming!, Jay Z’s Tidal polarizes

It’s the News Roundtable! Today Jason hosts Liz Gannes, Senior Editor of Re/code, and Matt Mazzeo, VC at Lowercase Capital. Liz covered the trial of Ellen Pao vs. Kleiner Perkins and shares her courtroom insights and analysis about the case and its ramifications. The trio then dives deep into a discussion of gender discrimination and unconscious bias in Silicon Valley and VC culture, and emerge with key takeaways and thoughts on facilitating dialogue and forward progress. And it’s off to the races with the latest in mobile live video and all the ways Periscope & Meerkat are creating content, forging new communities, and changing the social game … forever? (At the very least, you should follow @mazzeo to catch his daily Morning Coffee streaming sessions!) Stay to the end to see Jason wager a bet Matt over the upcoming Presidential election (will this be a Nixon/Kennedy moment?), a lively debate over Jay Z’s new music service Tidal, and further reflections and reactions from Liz on the jury’s verdict at the Pao trial.

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Periscope CEO & Cofounder Kayvon Beykpour on This Week in Startups

Periscope’s CEO/Cofounder Kayvon Beykpour on selling to Twitter, going supernova, and leading the future of live video streaming

Live-video streaming is shaking the tech world and today Jason talks to major player Kayvon Beykpour, CEO & Cofounder of the recently Twitter-acquired Periscope. Jason periscopes this rollicking conversation (see those hearts fly!), as Kayvon (@kayvz) shares his views on the perceived dogfight with Meerkat, why Periscope sold to Twitter before launching, his current & future product strategy, and why the time is now for live-video streaming. They also dive into Periscope’s lessons from early adopters, Kayvon’s inspiration for the product idea, where exactly monetization sits on his radar, how Kayvon’s Iranian-born parents sparked his entrepreneurial spirit, and much more. Tune in!

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Top accelerator CEOs Clara Brenner (Tumml), Brady Forrest (Highway1) & Halle Tecco (RockHealth) on This Week in Startups

Tumml CEO Clara Brenner, Highway1 CEO Brady Forrest & RockHealth CEO Halle Tecco share mission, strategy, diversity & what they look for in founders

Tumml, Highway1, and RockHealth are three of the leading startup accelerators/incubators in the country, each focusing on different verticals: urban problems, hardware, and healthcare, respectively. At LAUNCH Festival 2015 Tumml CEO Clara Brenner, Highway1 CEO Brady Forrest, and RockHealth CEO Halle Tecco all joined Jason for a fascinating panel discussion on their mission, strategy, industry trends, and the funding landscape. Among the many topics discussed: what it takes to be accepted into their accelerators, diversity in tech, is incubator-hopping good or bad?, the dangers of attending a predatory accelerator, why RockHealth is actually a seed fund, whether companies really need prototypes, having domain expertise versus fresh eyes, thoughts on co-investing with large venture capital firms like Andreessen Horowitz — and much more.

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What it’s Like to Work for Me (in 2015)

I’m hiring right now because things are going really well.

Instead of just throwing out a bunch of job descriptions I thought I would write a blog post to let folks who come work for me understand what they should expect from the experience.

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Now, a lot of people ask my former employees, many of whom are life-long friends, “What’s it like to work for Jason?”

The answer really depends on when you worked for me. In the first act of my career I was an adrenalin-driven founder, who demanded massive effort from everyone — including myself. We got a lot accomplished, but frankly, I burned people out because I was unreasonable, impatient, and brutal to non-performers.

When I was in my 20s I would have no problem telling someone who worked for me if I thought their idea was “stupid,” their effort “pathetic” or work product “terrible.” People who were tough thrived and the culture was intense.

However, I probably lost good people and there were many uncomfortable, and unnecessary, moments.

Such is the life of a young founder with no experience and who grew up working in a bar in Brooklyn. I don’t fault myself for it and I don’t have a lot of regret.

However, I’ve worked to evolve my sometimes brutal, samurai approach. In fact, these days I think a lot about my legacy, the enjoyment of working on my teams, and how many all-stars I can develop.

Continue reading What it’s Like to Work for Me (in 2015)

The Facebook Serpent and the Content Farmer (or how Google & Facebook can rebuild our trust)

“Farmer! Farmer! You are so wise and you work so hard on your content … we have so little, but we can offer you one billion members!” said the snake.

“But snake, I’ve spoken to the App developers and they told me that once they engaged you, you bit them something awful …” replied the farmer.

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“Oh, yes … we made a bit of a mistake there. They were too spammy and they got too much traffic, so we needed to throttle them down, and paying for installs was the only way we could manage it — that won’t happen here!” replied the snake.

“But snake, I’ve spoken to the brands and celebrities who spent millions building their fan pages with Likes. They say it was great for years, until you bit them with your venom,” replied the content farmer.

“Ohhh … yeeessssssss, that was unfortunate. You must believe me, we are not going to do that again! We learned our lesson and have taken the feedback to heart. This time it will be different,” hissed the snake.

“And you say you have billions of members? You’ll send them to us?” queried the content farmer.

“Yessssss …. yessss ….. and we’ll even split the money and send people back to your sssssssite!” said the snake.

“OK, I’ll try it … but I’m watching you, snake!” admonished the content farmer.

And with that, the farmer picked up the snake and put him in his pocket. He walked back to the farmhouse and said to his mother, “mother, mother, our hungry days are over … potato soup and stale bread no more!”

“That sounds too good to be true,” said mother, concerned.

Continue reading The Facebook Serpent and the Content Farmer (or how Google & Facebook can rebuild our trust)

Eric Migicovsky, Founder & CEO of Pebble, on This Week in Startups

Pebble smashes Kickstarter for the 2nd time as Founder & CEO Eric Migicovsky goes back to fans and comes up $20m

The Pebble watch made crowdfunding history in 2012 when it raised $10m from 69,000 backers on Kickstarter — and now they’ve smashed the record again, with $20m+ from 77,000 backers for their 3.0 Pebble Time. On the last day of his historic campaign, Pebble Founder & CEO Eric Migicovsky sits down with Jason to talk about his inspiration for creating the watch, why he went back to Kickstarter, Pebble’s amazing fan base, and his vision for its future (alongside the mighty Apple). It’s a fascinating discussion covering the signature developments in the new watch (hello, color!), lessons learned over each iteration of the watch, how app developers can use and optimize the platform and the massive opportunities in the Pebble Timeline API, what about Apple?!, including what Eric thinks of the Apple watch and why he hasn’t changed his strategy in its specter, the two metrics Eric cares most about, the company’s sustainability, profitability, future, community, and much more.

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The future of restaurants is no restaurant (or why we invested $275,000 in BENTO)

Here in San Francisco the future has arrived and it’s really awesome. You can get whatever you want almost instantly at a very reasonable cost. It’s called the on-demand economy, and it’s been driven by the phenomenal success of Uber (in which I was lucky enough to be one of the first angel investors).

The “Uber of…” is a common theme today and I think perhaps the next biggest entry into the space will be food and I’ve placed a bet on one of them: BENTO.

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Here’s how it works:

  1. You open an App and you pick your main course and four sides.
  2. In under 15 minutes someone is outside your house with a thin, rectangular box — the slickest packaging you’ve ever seen for delivery food.
  3. You meet the driver outside and get your food.

You just paid $12 per person for a generous dinner that took under two minutes to order, 15 minutes to get to your house, and you will probably have some leftovers for tomorrow.

How is this possible, you ask? Well, it’s not rocket science:

  1. A central kitchen makes “pods” of food and packs them into hot and cold bags.
  2. Those hot and cold bags plug into the cigarette lighter in the car so the food stays warm or cold.
  3. The driver assembles your BENTO box outside your house.
  4. Because you come and get your food at the curb there only needs to be one person in the car, they don’t have to park or risk a ticket. So, a quick walk to the curb combined with an iPhone App makes this business model actually work! If you had two drivers or had to park I’m guessing the price would be 30-50% more. In other words, you would have to pay $10 extra to have it brought to your door.
  5. There are a lot of types of Asian food that travel well and are delicious (soba, veggies, curry, etc.) and BENTO focuses on those.
  6. They obviously stay away from things that don’t travel well (tempura, fried dumplings — which get soggy).
  7. They don’t have the overhead of a storefront.

Continue reading The future of restaurants is no restaurant (or why we invested $275,000 in BENTO)

Mansplaining the Ellen Pao trial & fixing the gender issue in venture capital

In today’s edition of “mansplaining,” I’m going to talk about two topics I’ve been told never to discuss as a male angel investor: Ellen Pao & the lack of female venture capitalists.

In fact, I’m fairly certain that no angels or VCs are blogging about the Ellen Pao case — or tweeting about it. That’s the state of our industry and it’s sad.

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How strange is it that an issue as important as equality is not being talked about?

I think we need to talk about it, so in this piece I’ll address three things in the hope we can start a dialogue as the Pao case comes to a conclusion.

  1. The private conversations around the Ellen Pao case
  2. Why venture capital is a boys club
  3. The quickest way to solve diversity in venture capital
  1. Ellen Pao v. KPCB

For those of you who don’t read the news, Ellen Pao is currently suing one of the most storied venture capital firms in the world, Kleiner Perkins. The trial is heading into closing arguments, and almost everyone in Silicon Valley isn’t talking about it publicly.

Behind closed doors, the majority opinion from people in the know (male and female) goes something like this (note: this is not my take, this is what the majority of people are saying):

  1. KPCB hired a sexual predator who harassed women
  2. KPCB fired the bastard (and he’s on the lam, so he doesn’t have to testify!)
  3. KPCB has the largest percentage of female partners of any firm, and has actually worked hard on that issue (and to this day has a bunch of talented women at the firm)
  4. Ellen Pao is very hardworking, smart, and a little political

Folks are not really debating A through D above. It’s kind of a given, from the people I talk to.

Now, these folks in the know I’ve talked to are debating the following issues (again, note, this is not my take, necessarily):

  1. Was Ellen Pao actually harassed or denied advancement because of her gender — or was she just not a great partner/VC?
  2. Should Ellen’s experience be a referendum on the male-dominated VC industry? (Pao has said she is doing this to change the culture at KPCB.)
  3. What impact, if any, does Pao’s consensual affair with this man, before the (assumed) harassment started, have?
  4. Pao’s husband has a history of suing for discrimination, and some believe he’s putting her up to this in some Svengali kind of way. Does this matter? (Courts have said no.)
  5. Is this case going to cause VCs to hire fewer women because KPCB worked hard to include more women and it has blown up in their face?

Now, if you’re wondering what my position on all this is, here it is: I don’t know enough to make a judgement!

It’s super complicated, and that’s why there is a jury putting 100s of hours of their lives into sorting this mess out.

What is undeniable, however, is that venture capital is absurdly male-dominated and changing very, very slowly.

That sucks and needs to change.

Continue reading Mansplaining the Ellen Pao trial & fixing the gender issue in venture capital

Should you pick YCombinator or the LAUNCH Incubator — the shocking answer!

decisions

Someone on Quora asked, “What is Jason Calacanis’ Launch Incubator like and should I apply to that or YCombinator?

The easy answer to that question is, you should certainly apply to both because the chances of getting accepted to either program is low (like really, really, really low).

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Your Chances Are Low

For background, we had 150 folks apply to the 1st Incubator class and we wanted to accept 20 of them. We settled on seven. It was a 5% chance of getting into the first class vs. really, really tough competitors.

However, three of the startups accepted I had a previous relationship with. In truth, we only accepted four out of 150 people who came through the front door — less than 3%!

YCombinator probably has 1-2k applicants each cycle and they have accepted 50-100+ of these. So, 2.5-5% of applicants get accepted, I’m guessing.

Payoff is High, But Don’t Get High on Your Own Supply

Getting into either program will change your life forever. Acceptance ensures, unless you are a complete and utter screw-up, that you will land enough funding to go for at least 12 to 18 months.

Additionally, being anointed a YCombinator company means your valuation will be two to three times what you would get by not being a YCombinator company. Said another way, having the YC name means you can screw investors!

I say that in a joking way, but there is a serious anti-YC sentiment in the industry around the issue of valuation and entitlement. As one very, very prominent investor said to me recently, “Total public market cap of YCombinator companies? $0!”

Another VC, who made their bones doing elite-level growth, said to me that YCombinator’s scale has resulted in a cookie-cutter approach to growth that was easily detected if you did any level of diligence. He actually used the word “fraud” to describe the growth, before toning it down to “gamed growth.”

From my position, meeting with a half-dozen YC companies per month, I can confirm that they are “going for it” in terms of valuation universally, and yes, some are goosing their growth numbers by simply buying Facebook Ads and saying silly things like, “We’re growing 15% per week!” and “500% per month,” before backing off when asked for the actual numbers (i.e., we went from seven clients to eight clients — a big % on a small number).

All of this is to say that getting accepted to the elite YC program is a double-edged sword, which is not dissimilar to Harvard: you’re clearly smart, but you’re not that special.

Continue reading Should you pick YCombinator or the LAUNCH Incubator — the shocking answer!