Zuckerberg tries to buy off journalists with .3% of Facebook’s yearly revenue

Yesterday I wrote the first piece in a three-part series about how Facebook could turn around their “WORST. YEAR. EVAR!!!”

[ Click to Tweet (can edit before sending): https://ctt.ac/cRafE ]

The basic premise: share revenue with publishers, Instagrammers/influencers, App developers and anyone else creating content on the platform, just like YouTube, Airbnb, Apple and Google’s App Stores and countless other partnership platforms do.

Right on cue, Facebook does the most misguided, heavy-handed and unsustainable version of sharing the wealth, by sharing $100m a year — .3% of their yearly revenue — in a series of grants.

The cynical take is that these kinds of one-time payoffs, to highly influential media organizations, are designed to silence and tamper criticism — they’re buying off influential people for a pittance.

The most gracious take is that Facebook feels bad for being such a horrible partner to the press and democracy.

Either way, it’s not sustainable and it’s braindead stupid. Who on earth is advising Zuckerberg about this?!

In June of 2017, Apple reported they shared $70 billion with App developers.

Google doesn’t break out YouTube’s revenue, but everyone knows it’s tens of billions, and that they pay out 55% to partners. The rumor in 2015 was $9B in total revenue, and we can assume that has grown to $20b+.

If YouTube paid out 55% of even $10B that’s $5.5b to content creators — we’re talking Netflix-level spend, and 55x the pittance Facebook is splashing around a bunch of journalist nonprofits.

The data in this chart is from Forbes, not YouTube, so it’s likely incomplete, but if this is anywhere in the ballpark, YouTube is paying it’s top five stars MORE than what Facebook is donating to non-profit organizations.

Right now Facebook makes $33B+ a year, or almost $100M a day, off the backs of Instagrammers, Facebook users and publishers — they share zero point zero.

If I were running Facebook I would commit 20% of top-line revenue to creators, from the New York Times to podcasters to App developers, and splash $7B to creators — a fraction of what Apple pays out a year, but what would build a base of stakeholders in the future of Facebook.

Right now Facebook has zero friends in the industry, and legions of enemies and detractors, including the founders of WhatsApp and Instagram. Think about what a poor job Zuckerberg has done building goodwill with his juggernaut. Even the founders he made billionaires are attacking him on the way out the door with their paychecks?

Facebook Misguided Announcement

https://www.facebook.com/facebookmedia/blog/doing-more-to-support-local-news

Apple Inspiring Announcement

https://www.apple.com/newsroom/2017/06/developer-earnings-from-the-app-store-top-70-billion/

Saving Facebook, a Three-Part Strategy for the New CEO

Orson Welles Vintage GIF

Facebook’s self-inflicted wounds come from their founder’s obsession with growth, which at its core was based on three extraordinary tactics: removing friction, staying focused on global growth and stealing other people’s ideas.

[ Click to Tweet (can edit before sending): https://ctt.ac/NemMw ]

There is no debate over this.

If Zuckerberg had not set the tone of “move fast and break things,” the company would have been more thoughtful about their growth, and if they didn’t steal other people innovations so systematically — from Friendster to FriendFeed to Twitter to Snapchat — they would never have dominated the planet.

Of course, that obsession with speed and copying has resulted in — as Zuck himself instructed — the breaking of things, including our privacy and our democracy.

Well done!

In this three-part series, I’m going to outline what the new CEO of Facebook should do to reverse the massive ill will that’s built up with consumers, partners and governments. (At least the democratic ones; Facebook is well-loved by despots the world over.)

Step One: Share Revenue with Partners

When YouTube has PR issues, they have a large base of YouTubers — partners to whom they pay out billions of dollars — who will go to bat for them. These individuals are not happy with every decision YouTube makes, far from it, but they are loyal to the platform, even in the face of sometimes getting worked over.

Airbnb makes their share of mistakes and has been faced with crisis after crisis, but their Hosts are there to back them up. Heck, a portion of Airbnb’s customers feels so strongly about the company that they will fight for its very existence.

eBay and Etsy have their sellers to spread the gospel, and even Lyft and Uber have driver partners and customers who will sign petitions to bring or keep their services available in contested markets.

Apple and Google are “splashy cashy” with their App partners to the point of creating a category that, candidly, Facebook should own — or at least be a player in.    

Facebook?

Well, Facebook is so sharp-elbowed, that in addition to screwing users and our democracy, they have screwed over their developer and content partners multiple times over the past decade. Not only that, they’ve never built up a reservoir of goodwill.

Imagine if Instagram and Facebook shared revenue with their top users? How about if when you click on a new story on these services, it gave the publisher 70% of the revenue?

These partners would be out there saying “listen, I know Facebook has made mistakes, but Zuck is a good guy. I’m partners with Zuck, Instagram and Facebook, and so are over a million content creators. Trust us, we’re working with them to make this right.”  

Sharing revenue would be trivially easy for Facebook to do, certainly easier than reaching billions of users with their products.

Yet Facebook still has their wallet locked … Why?

It’s all top-down, Zuckerberg simply doesn’t want to share the wealth. We saw this when he deliberately screwed over the Winklevoss twins and his early partner Eduardo Saverin at Facebook (he settled those claims), and we see it now with his sinister pursuit of Snapchat at all costs.

The Snapchat pursuit reinforced Zuck’s “might is right” approach and has painted him as so cutthroat and arrogant — and perhaps clueless to this perception — that it is now easy to root for Facebook’s demise.

Instagram and WhatsApp founders criticizing Zuck on the way out only reinforces what we all know: business is personal and Zuck does not treat people well on a personal basis.

This needs to change when the new Facebook CEO starts, or when someone convinces Zuck to reboot his approach. The latter is a better solution, as you always want the founder to stay at the controls, but this requires the founder to evolve — something Zuckerberg hasn’t done (which reinforces the growing legion of “I’m quitting facebook!” and “I hope Facebook fails!”).

Easy solution: give Instagrammers and Facebook’s developers and publishers 100% of their year-one revenue to kick off the program, and then land on 55-70% going forward (like YouTube and the App stores do, respectively).

Can you imagine the goodwill that will grow out of Facebook sharing the wealth?

Zuckerberg can’t, but the rest of us can. Someone forward this email to Mark and say “something to consider, even if the messenger isn’t your favorite person.”

Bottom line: Sharing revenue with partners will give facebook amazing PR and those partners re-engaging the platform could reverse the “peak Facebook” and “Facebook is in decline” narrative.

A carry comp kerfuffle in Micro VC land

The SJW crowd piled on to a job posting for a part-time VC job at a micro VC yesterday. The job posting was for 20 hours a week and the compensation was based on a share of the carry.

[ Click to Tweet (can edit before sending): https://ctt.ac/4iUFB ]

Here is how carry works, briefly: if the Fund invests $2m on behalf of investors and turns it into $22M (11x, cash on cash) the gain would be $20M. The carry would be 20-30% of that gain, depending on the deal with LPs (limited partners), which means $4-6M in gain.

[ Note: A 10x fund is the outlier goal. ]

If the Fund manager gives this “Chief of Staff” position 20% of the carry it would be $800-1.2m for a part-time job. Note: 20% would be very generous if the person had cash comp, but if the person takes no cash I would say 20% would be in the ball part. Twenty percent of a 20-30% carry is 4-6% carry to the Chief of Staff.

If the micro VC did 3x “cash on cash” it would have $4m in gains and $800-$1.2m in carry. The individual in this back-end comp position would get $160-240k.

If this position vested over say four years, that would be something in the range of 4,000 hours of work for $160,000 to $2.4m — or $40 an hour to $600 an hour.

Of course, you wouldn’t have any comp today — that’s the trade-off you have the choice to make.

The argument here, of course, is that the micro VC, who is offering this partnership opportunity, and who gets zero cash comp himself, is taking advantage of the person who takes this part-time gig.

Oh lordy, lordy … I wish I had seen this job description when I was in my 20s! Please take advantage of me and take 10 or 20 years out of my career path.

The micro VC has since, under the weight of the social media mob, put the job up as cash and carry or just carry — at the candidate’s choice. CANDIDATES: take as little cash as possible and fight for every point of carry! The math above is going to change your life and the cash comp never will.

Seriously, if I were 25 years old and applied to this position I would rather sleep on my mom’s couch, drive for Lyft 40 hours a week and get all the carry I could. 60 hours a week isn’t a death sentence, and if you want to propel yourself to the next level the quickest way to do that is to get equity compensation.

Sure, a single parent with three kids is not going to be able to take this gig. Neither is a married couple with a $10,000 a month mortgage and three kids in private school — that couple needs to work at Yahoo! or IBM and take down big salaries — which is their choice for starting a family and buying a big house with a huge mortgage.

Certainly, my mom, who worked 4-5 jobs a week and clocked 70-80 hours a week to provide for our family, wouldn’t have been able to — but one of her three sons would have! That’s the American dream as far as it was taught to me: the parents bust their asses and give their kids the killer opportunity.

I look at an opportunity like this and compare it to spending $30,000 a year on college, or people staying at home playing video games/watching TV for 4-5 hours a day — which is the national average!  

Think about that for a moment, if your child presented you with the scenario of working 1,000 hours for no cash comp with lottery-ticket-level back end vs. four years of college and $120k in debt, which would you advise them?

If your kid is playing video games and/or watching YouTube/Netflix for five hours a day, getting them to pull the plug on that nonsense and invest in their career is a serious discussion some parents need to have.

Now, before you attack me as a cold-hearted capitalist (the latter true, the former only half true), you should know that we don’t do unpaid internships or free positions of any type. We don’t need to do that, as we have a modestly profitable business and, candidly, the risks around internships are too great these days (bad PR, a distraction for management and legal exposure).

Bottom line: the social media mob is giving really bad advice in this case. Trust me, someone who fought their way into the industry and became the GOAT angel: take the carry not the cash!

Why aren’t VC firms focused on slow/modest growth startups?

Yesterday’s post mocking the New York Times’ link-baiting story created a lot of debate on Twitter.

One thing that came up was, why don’t venture capitalists fund slower growth startups? Or, said another way, why don’t VCs invest in startups that grow at a normal pace?

[ Click to Tweet (can edit before sending): https://ctt.ac/sH8h8 ]

The number one job of a venture capitalist is to stay a venture capitalist.

This might sound cynical but, as a VC, if you don’t return enough money to your LPs (limited partners, a VC’s investors) you will not be able to raise your next fund. If you don’t raise your next fund, you’re not collecting management fees to pay yourself and your team, and you don’t have a chip stack to play in “the big game.”

If you want to STAY a venture capitalist you need to land these “dragon egg” investments — the ones that create enough value to give your LPs their money back. Dragon eggs are typically 20-40x your money back. So, you invest $7 million and get back $140-280 million.

That means, if you bought 20% of a startup for $7m, that startup was worth ~$35m, and then has to become a ~$700m to ~$1.4b exit for you to BREAK EVEN. Everyone makes money AFTER that investment, not before.

That is not easy.

VCs need to have double-digit returns every year (look up IRR for more on this) and essentially match stock market returns, with the chance of crushing them. If you match the stock market consistently, the thinking is you will eventually hit a Google or Facebook or Amazon.

“Stay in the game, stay in the game,” is the mantra.

The binary outcomes are just so yum yum, that you want to keep seeing flops (to use a poker analogy) and STAY. IN. THE. GAME.

So, the logical follow-up question is, why don’t LPs want to invest in VC funds that target slow growth startups?

That answer is even simpler, they have better options. If you want to return low single-digit returns, you can simply put your money in bonds, REITs or dividend-paying stocks — and not pay the significant fees associated with venture capital.  

What about you, Jason?

For background, I’m an angel and seed investor, so my job is much different than a VC’s. I invest in 50+ startups a year and 24 of 25 investments do not result in a meaningful return (i.e., zero to 5x).

I’m banking on hitting a serious return every 25 investments, with serious being defined as greater than 50x, cash on cash (REALLY HARD TO DO).

So far, after 200+ investments, I’ve got Uber, Thumbtack, Wealthfront, Robinhood, Desktop Metal, Datastax, and Calm.com as outliers, with a couple of dozen startups doing well to very well. I would expect one or two more of those to break out, putting me at eight or 10 outlier investments (one every 20 to 25 investments).

Bottom line: there are zero LPs interested in funding startups with modest to normal growth prospects, and candidly, I don’t meet many founders who don’t want to build large businesses (obviously some selection bias there, as a Mount Rushmore-level angel investor, people don’t come to me with dry cleaners and pizzerias that often).

WARNING: Venture Capital is for founders who want to grow fast (duh)

Once again, the press is here to remind poor, unsuspecting founders that venture capital can — GASP! — result in your startup trying to grow too fast. From today’s New York Times comes the link-baiting title: “More Start-Ups Have an Unfamiliar Message for Venture Capitalists: Get Lost:”

The V.C. business model, on which much of the modern tech industry was built, is simple: Start-ups raise piles of money from investors, and then use the cash to grow aggressively — faster than the competition, faster than regulators, faster than most normal businesses would consider sane. Larger and larger rounds of funding follow. The end goal is to sell or go public, producing astonishing returns for early investors. The setup has spawned household names like Facebook, Google and Uber, as well as hundreds of other so-called unicorn companies valued at more than $1 billion.

New York Times

[ Click to Tweet (can edit before sending): https://ctt.ac/96SIp ]

Wait, venture capitalists give you millions of dollars in order to get huge returns?! Capital can be used to grow faster than competitors — tell me more, New York Times!

But for every unicorn, there are countless other start-ups that grew too fast, burned through investors’ money and died — possibly unnecessarily. Start-up business plans are designed for the rosiest possible outcome, and the money intensifies both successes and failures. Social media is littered with tales of companies that withered under the pressure of hypergrowth, were crushed by so-called “toxic V.C.s” or were forced to raise too much venture capital — something known as the “foie gras effect.”

New York times

What!??! Startups burn through the money that investors give to them?! I thought startups were suppposed to put these funds in municiple bonds!

And social media is filled with companies that grew too fast … say it ain’t so, New York Times.

Everyone in Silicon Valley, the founders most of all, understand the deal: VCs give you the money to take a shot at changing the world. Most of the time it doesn’t work out and that’s OK because when it does work out the world’s greatest companies are built.

As far as I’m concerned, you live once and if you’ve got a shot at changing the world you should go big or go home — it’s not like VCs are going to ask you for their money back.

Can a great company be built outside of the venture capital industry? Of course!

Can a huge, billion dollar company be built without investment in a short period of time? It’s very uncommon.

If you want to bootstrap and/or build a boutique business, have at it, but the ground truth I see every day, and I invested in 50+ startups in 2018, is that founders love their angel investors and covet landing venture capitalists that will bet on them changing the world.

Venture capital is a giant, hard to understand and imperfect gift to humanity. It’s the best option for high-growth startups today, and while it might be hard to understand from the outside, it’s awesome that it exists.

When I travel around the world, everyone wants to rebuild what we have here in Silicon Valley, and many ecosystems are making serious progress.

If you don’t want venture capital and you want to grow slow, go for it. Use your credit cards, savings, revenue or bank loans (do those exist?) to get it.

If you do want venture capital in order to go big and change the world, gear up for battle, as you have to beat out hundreds of other founders to get it.

Bottom line: Founders are smart and it is no news flash to them that going big with venture capital is riskier than building a small business.

Podcast Recommendation: “Cafe Insider” & “Stay Tuned with Preet”

Yesterday I shared my personal theory on what makes a great podcaster and recommended “The Bret Easton Ellis Podcast.”

[ Click to Tweet (can edit before sending): https://ctt.ac/J3Ua8 ]

Today I’m recommending another person I think fits my three criteria, which are, as a refresher:

  1. They’re successful in their field, but not the most successful
  2. The have strong opinions and like to mix it up, but they know how to listen
  3. They don’t care what people think of them, but they want people to tune in

Preet Bharara was the former Attorney General for the Southern District of New York, was fired by Trump and is part of the composite that Brian Koppelman used for the brilliant and sharp-elbowed AG played by Paul Giamatti in the extraordinary “Billions”.

[It’s important to note the word composite in the previous paragraph, because as Preet hilariously told on an early podcast, he told his mother that the AG in “Billions” was based on him and — spoiler alert — in the first scene of the first episode of “Billions,” said AG is the recipient of a sexual act commonly referred to as being showered by a precious metal.]

Preet has two podcasts, the first is “Stay Tuned with Preet” and the second is “Cafe Insider.” It’s confusing, but stick with me. ST is a chart-topper, with the standard podcasting segments: news, interview and listener questions.

“Cafe Insider” isn’t available as an RSS feed but rather, on a landing page, and is unlocked for $5 a month or $50 a year.

In CI, Preet and Anne Milgram, the former AG of New Jersey, break down the news. Like Bret’s paywalled podcast, “Cafe Insider” feels more informal and freewheelin’. The hosts aren’t overproduced or edited, which is what makes for a great podcast in my opinion.

I’m not a fan of the overproduced public-radio style podcast, where the dual sins of audience manipulation (by audio devices, like music and pauses) and the shaping of narrative (with editing) often results in the obscurification of the messy reality of life.

Things just aren’t as [INSERT AUDIO DROP TO TUG AT LISTENER’S EMOTION, FOLLOWED BY A PAUSE] as simple as they seem.

I highly recommend listening to TuneIn and, if you like Preet’s soothing tones and front-line insights, pay for a year of “Cafe Insider.” Paying for content, if you have the means, is a vote of confidence that compels podcasters to keep going.

Links:

Yesterday: Podcat Recommendation: Bret Easton Ellis

Cafe Insider

Stay Tunned (on TuneIn)

Podcast Recommendation: Bret Easton Ellis

My theory of podcasting is that the best shows are hosted by iconoclasts who share three traits:

  1. They’re successful in their field, but not the most successful
  2. The have strong opinions and like to mix it up, but they know how to listen
  3. They don’t care what people think of them, but they want people to tune in

These people are unmanageable by the corporate entertainment complex, so you won’t find them on cable TV.  

[ Click to Tweet (can edit before sending): https://ctt.ac/bra99 ]

Sure, they would be great guests themselves, but only on a longer form talk show. If you run a network, you would never give them their own show, and if you did it would end in a barn fire.

One of my favorite podcasts is the Bret Easton Ellis Podcast, by the famous author of books like “Less Than Zero” and “American Psycho.”

He starts the podcast with a monologue, something he clearly puts a lot of time into. In these wonderful essays, he will weave together his thoughts on movies, directors and the culture we’re living in. He will get into his personal life, talking regularly about his video game playing, millennial boyfriend and his never-ending, career-long list of tv and movie projects that have failed to get off the ground (“Less Than Zero,” the TV series!).

Next up, he will talk to a guest for an hour or two, and maybe answer some listener questions from time to time. He recently had author Ben Fritz on (who I think used to work for me) and Rachel Kushner, as well as Andrew McCarthy and Nick Jarecki back in 2017.

He doesn’t care what you think of his opinion, and he is willing to change his mind. He appreciates talking to people he doesn’t agree with, and he frequently disagrees with guests.  

These days my movie programming starts with Bret’s suggestions, and then I go to Metacritic to fill in my programming lineup. (How do you make your picks? Comments are open below.)

He used to be on a podcasting network, reading ads half-heartedly (if not sarcastically), but now has a private Patreon feed. This means you have to pay for it, for $2-10 an episode, with higher prices getting you a couple extra minutes of content.

He’s controversial, non-corporate and articulate, and sponsors won’t touch him since he likes to touch the third rail. I don’t agree with everything he says, and sometimes he says stuff that is brutally candid and politically incorrect (his next book, non-fiction, is called WHITE), but he’s smart and entertaining and worth checking out.

Lean Management: The Power of the EOD Report

Wanted to talk to you today about a lightweight management technique I’ve developed over the years called “The EOD and EOW.”

When we hire someone, I tell them that we don’t have management at LAUNCH, that it’s a flat organization and our goal is to stay small but increase our efficiency.

[ Click to Tweet (can edit before sending): https://ctt.ac/Y3JIC

There isn’t a massive reporting structure and you have to manage yourself, and the primary way we do that is an end of day report called the EOD.

The implicit deal is that you’re not going to be micromanaged, or candidly, managed at all, but you will need to “put up numbers” and be accountable to the rest of the team.

The report format is simple and has the following characteristics:

  1. It’s a bullet point list of what you worked on today.
  2. It should take no longer than five minutes to write.
  3. It should include links (i.e., Google sheets, Asana projects, Squarespace, ad campaigns, video clips, etc.).
  4. It can include any blockers or challenging problems you’re facing.
  5. Bonus points if you include a graph, table or chart once and awhile.
  6. Bonus points if you educate the rest of the team in your email.

It’s at once deceptively easy and frustrating at times. If you’re in your email box all day, on social media or reading the news, you might find yourself with zero bullet points at lunchtime (we don’t put in stuff like “checked email” or “read the news” in our EODs).

If you’re not GSDing (getting sh@W$%t done) the EOD lets you know that. So, we now explain to new team members — especially “young guns” (people with under 10 years experience) — that if they are concerned about their EODs being light, to talk to some team members and say, “how can I help more? I’m concerned I’m not contributing enough.”

Ninety percent of the time the people we hire embrace this agreement and crush it. Ten percent of the time we have folks who “forget” to do their EOD, or they send their EOD the next day. Sometimes folks figure out that they’re not passionate about our mission and they’re not a culture fit for our company, and we part ways.

Other times managers realize that they made a bad hire because the person doesn’t have time management skills or, well, enough skills to GSD!

Senior folks in the organization (my top four people, whom I refer to as the “Fantastic Four”) do an EOW (end of the week, sent to each other and to me).

Folks in the organization added to the EOD process by creating a draft email at the start of the day with the top three bullets of what they want to get done.

This may all seem super obvious, but if you deploy the EOD/EOW system, at least in a small company, you’ll find out that performance increases and “lack of communication” errors and frustrations go way down.

You also inspire the ETBs (early true believers) and flush out the clock punchers.

The Ultimate Outsider’s Hack: Read All The Biographies

Something Like An Autobiography: Akira Kurosawa: 9780394714394: Amazon.com: Books

A waiter at Sugar Bowl this weekend recognized me from my podcast, and after a couple of meals in the dining room, got up the nerve to tell me he was a huge fan. This is, for the record, one of the most wonderful things a podcaster can hear.

If you see me out, even if I’m with my family, do not hesitate to say “hello,” give me a fist bump, take a selfie (if so inclined), and let me know what your favorite episode is. I like being a micro-celebrity and I love talking to people–don’t be shy!

[ Click to Tweet (can edit before sending): https://ctt.ac/3np2d ]

Anyway, he asked me for three book recommendations for a young person starting out.

When I was younger I wanted to be rich and powerful because I grew up poor and powerless. How anyone got rich and powerful was an enigma to me because I didn’t know anyone rich or powerful–until I started reading biographies.

Biographies are the ultimate outsider’s hack. They enable you to hear all the details of how powerful, important and rich people became those things. Often they will share what they learned, regret and would do differently.

I recently finished Mike Ovitz’s “Who is Mike Ovitz,” and I was blown away. I’m actually listening to it a second time, and he’s committed to coming on the podcast this year.

Ten other biographies I recommend:

  1. On Writing: A Memoir of the Craft by Stephen King
  2. Something Like an Autobiography by Akira Kurosawa (top three director for me).
  3. Born Standing Up by Steve Martin
  4. One of a Kind: The Story of Stuey ‘The Kid’ Ungar, the World’s Greatest Poker Player by Nolan Dalla and Peter Alson
  5. All Over but the Shoutin’ by Rick Bragg
  6. Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmull & Amy Wallace
  7. The Autobiography of Malcolm X by Malcolm X as told to Alex Haley
  8. Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
  9. Hillbilly Elegy: A Memoir of a Family and Culture in Crisis by J. D. Vance
  10. Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder

Some of these are amazing to listen to on Audible as well — get your free book at audible.com/twist (ohhhh…… auuuudible!).

Note: I realize I don’t have any biographies written by women on this list. Does anyone have a top ten for me to read next? I’ve got #Girlboss in my queue but could use some more. The comments are open!

The Three Vendor Rule

When I first started doing events in New York City in the 90s, the first one called “Ready. Set, Pitch,” I realized that vendors would give us wildly different quotes — often for the same exact thing.

That is when I came up with The Three Vendor Rule.

[ Click to Tweet (can edit before sending): https://ctt.ac/4Rbqa ]

I told my team to obtain three quotes for everything we did, from A/V to space to food to furniture rentals.

As anyone who has done any management will predict, I got pushback … but not from the vendors, from my own people!

Why do we have to do all this redundant work?

Why couldn’t we just use the same vendor as last year?

In my younger days I would simply say “do it” and walk away. Later on I would say “either you can do it or I will do it.”

Of course folks would take weeks to get this done, waiting on the third quote, melee fighting and more. “I love this vendor” and “they were loyal to us” and “this is a waste of my time.”

My team was fighting me on saving money. It was bonkers.

So, I re-stated my rule to be:

“Ask seven vendors for a quote, bring me the first three complete ones.”

The results were stunning across the board. We would have vendors we used last year charge us 2-3x as much for the same thing, a year later! Some vendors would charge us $1,500 to rent a monitor that costs … wait for it … $1,500! One vendor would charge $1,000 to rent a projector while another, $2,500 — for the same projector.

My team started to understand we were being ripped off and they started to join my team to work the vendors, as opposed to working their boss (me).

So, I further amended the rule to be:

“Ask seven vendors for an itemized, apples-to-apples quote, bring me the first three complete ones in a spreadsheet with the % difference in pricing highlighted.”

By doing this we immediately found a range of prices from, say … $15,000 to $50,000, for the same thing.

Then I would ask the team to work the quotes, pointing out things that were bonkers to the vendors. I would give them language to use that was non-accusatory, like:

“I notice that this projector is $2,500 on Amazon and you’re charging us $2,000 to rent it. Perhaps you can look into that for us?”

Or

“Right now your quote is amazing, thanks so much for the effort. As a final step I emailed you four items that are a bit outside of market pricing. If you could review them and make any changes before I submit my recommended vendor to my manager that would be great. Again, thanks so much!”

That’s called the shit sandwich in the business: say something nice, drop the bad news and then finish up with more pleasantries.

Of course, once vendors had completed two hours of work, they were more likely to come down on price because they were invested in working with us.

One time we had a surplus so I told the team “if we use that projector (or other item) 3x we can just buy it and own it. Look into that.”

Now we own our own video switchers and cameras. We can run our own events and we no longer have to ask for quotes on these items.

We could do this because we had the data.

As a final step, when we have two or three vendors in the same zone we simply ask them if they can do it for 10% less. This works every time, because we’ve created a competitive marketplace.

Now, the three vendor rule is a best practice more than a rule, stated as:

  1. Ask seven vendors for an itemized, apples-to-apples quote, bring me the first three complete ones in a spreadsheet with the % difference in pricing highlighted.
  2. Ask the vendors to update non-competitor parts of their quotes.
  3. Ask internally: Should we consider rolling our own (service) or buying this item outright?
  4. Have a second person ask the top 2-3 vendors to give us a 10% discount.
  5. Pick the most reliable vendor with the best product.

Now, when we onboard a new team member, we share the best practice with them and tell them “this is important work,” and they just do it.

This is the big lesson: Management is about explaining how to do things, why to do things and codifying everything. Then, refining it, repeating it and making your team feel 10 feet tall when executing.

When you become great at something and establish true understanding, you can name it well. In this case, my team will say “three vendor rule” at a meeting and we all know what that is and why it’s important.

Now that I’m older, and hopefully wiser, I try to focus some of my time on codification of the most important things we do. Writing is clarity of thinking, so being able to write this very post means I’ve obtained clarity.

This is why writing is such an undervalued skill in the world — and why I’m focusing on it so much.

[Wrote this on my iPhone, slopeside at Sugar Bowl in a blizzard. My daughter just showed up for breakfast, so I gotta bounce. Please say something in the comments, so I know people are reading and I keep the streak alive!]

Should I move my startup to Silicon Valley: the 2009 & 2019 answers compared

Often the best advice is situational, and the situation here in the Bay Area has changed dramatically in the past decade. Today I wanted to detail the two answers a founder would receive to the question, “Should I move my startup to Silicon Valley?” depending on if they asked it in 2009 or 2019.  

[ Click to Tweet (can edit before sending): https://ctt.ac/e9D6Z ]

Should you move to Silicon Valley: The 2009 answer

It was easy to give advice 10 years ago when founders asked me if they should move to Silicon Valley. The answer was a wholehearted “yes!” Given without reservation or consternation because:

  1. The sheer number of investors here
  2. The density of talented people here

High-growth startups, defined as the ones trying to hit $100M in revenue in under a decade (what you need to attract the elite investors and to achieve unicorn status), need talented team members and mountains of cash.

There is no place in the world with more of those two things than the Bay Area.

If you want to take over the movie business, you go to Los Angeles because that’s where the talent, money and distribution is. If you want to build a unicorn or decacorn, you come to the Bay.

It’s never really been a major debate.

Great founders can come from anywhere, but they build large businesses here.

Sure, we would see a Groupon (Chicago), Tumblr (New York) and Snapchat (Los Angeles), now and then, but we would see many more Ubers, Airbnbs, Facebooks, Googles and Teslas in the Bay.  

Supply and demand worked exceptionally well for Bay Area investors, who didn’t feel any FOMO by sticking to startups in the Bay Area. Candidly, most VCs still don’t want to get on planes and do board meetings in places that are more than 1-2 hours away from the Valley (read: Seattle to San Diego).

Should you move to Silicon Valley: the 2019 answer

Over the past decade the delta between running a business in the Bay Area and everywhere else expanded dramatically.

Apartments in the San Francisco and the Bay Area are two to five times that of other cities. Heck, I’ve been reading about American developers moving to Tokyo and Kyoto to work remotely while living epic, affordable lives in one of the highest-functioning cities in the world.

Compensation will vary 2-3x as well in many cases. Combine that with the short tenure of people in Silicon Valley, typically calculated in months/quarters, while talent in other cities settle in and stick around for years, and it’s no wonder that VCs themselves are changing their position on the location of your startup.  

Additionally, “remote work” has gone from a strange phenomenon a decade ago, to — at least for startups — commonplace today.

Add all this up, and I’ve seen the same VCs who insisted on founders moving to Silicon Valley in order to get funded, telling founders it’s great to come to Silicon Valley, but it’s also fine to stay where they are.

Often, the best advice is to split a startup’s office functions across geos, with corporate and product being in the Valley and everything else being “wherever makes things grow faster.”

I’ve seen startups raise $3m in the Valley with a plan to burn $250k a month, then move to Canada and have their burn drop by 75% — expending their runway by a couple of years.

If you do choose to be here in the Bay Area as a nascent startup, incurring the costs, you will be taken more seriously by most VCs — even though they will deny this. The thinking by some is that if you can’t figure out how to navigate the Bay Area you won’t navigate your business.

Talk about mixed signals!

Bottom line: Raising money is still much easier when your HQ is based in the Valley, but deploying capital across geos and embracing remote workers will stretch that cash meaningfully. Check back again in a year, if the economy and housing crash in 2020 the 2009 answer might be the correct one again!

How can I do an MVP for a delivery service I want to start?

ShaneRMTanner on Reddit asks: How can I do a MVP for a delivery service I want to start? The basic idea would is this: A delivery service for people who use Offerup and Letgo auction apps. I do and continue to get validation on this idea. It plagues me that I have thought and continue to think about a solution to this problem. Maybe it’s something I’m not seeing, but, I’m driven to find the answer or move on.

Shane: The concept of an MVP (minimum viable product) is to do the LEAST work to answer the HARDEST questions.

Click to Tweet (can edit before sending): https://ctt.ac/nc9bF

Before defining the MVP, you want to define the question(s) you’re trying to answer.

The questions I have about your business, as an investor, are:

  1. How much are people willing to pay for a delivery service, and can this amount build a highly profitable business?
  2. Can you acquire a customer profitably — and how.
  3. Finally, I would want to know what the scale of the business could be. Will one million people use it every month? Week? Day? Hour?

To answer number one and two, you could build landing pages using a service like Unbounce that say some something like

Offerup & LetGo users: Get Toronto delivery in under an [ hour/two hours/same day ] for up to 100lbs for [ $50 / $100 / $150 ]. Enter your email to schedule a shipment in under 10 minutes”

After you test that, you can see how many folks actually give you your email for same day vs. one hour, and for $50 vs. $150.

That data should give some really great insights on customer acquisition, like, what did it cost per click to the landing page and for each email submitted?

Depending on what data you get, you can start building the MVP or run another series of landing pages to answer even more questions.

This is your Captain speaking, I’m turning on the fasten seat belt sign

Friends,

This past weekend, I sent the email below to the 250+ founders I’ve invested in. The goal of this email was to prepare my founders for what happens to startups when a market corrects and then collapses.

I’m not calling a top to the market, or a crash, but rather giving my founders  a blueprint of how to survive and thrive in a down market.

I hope this is helpful to you as well. Feel free to forward it to a founder you know, as they might not be thinking about these issues.

Best, Jason@calacanis.com

[ Click to Tweet: https://ctt.ac/84ceF ]

—-

Launch Portfolio Founders,

We are in year 10 of the current bull market.

Chaos reigns from Washington to Moscow and all of you are all competing for attention for customers and talent with an unprecedented number of highly-skilled founders running impressive businesses.

Having seen this movie up close three times in my startup career, I wanted to take a moment to explain to you what happens to startups when markets correct — and sometimes collapse.  

In short, I want to explain to you how to avoid having your startup die when the stock market crashes — just in case the market turns.

In my estimation there is a 20-30% chance we could have “an event” in the near term (the next two years), and since there is never a bad time to make long-term plans you should read this email twice, and discuss it with your senior team.

Continue reading This is your Captain speaking, I’m turning on the fasten seat belt sign

Ian Bernstein :  Founder & Head of Product at Misty Robotics

On the latest episode of This Week in StartupsIan Bernstein, former Co-Founder & CTO of Sphero and current Founder & Head of Product at Misty Robotics stops by. Ian introduces his programmable robot, Misty II, and we discuss the current state of generalized robotics, as well as more advanced functionalities that seem to be just around the corner.

Join us for a glimpse into the future of consumer robotics, AI, the brain-computer interface, and more 🔥.

This podcast is brought to you by Weebly. A good looking website is great, but a website that turns into a successful online business is better.

With Weebly, you can manage inventory, collect payments, run promotions and even live-chat with customers. When you’re ready to grow, Weebly can help you get discovered on search engines, create marketing campaigns, and help you with retargeting customers.

Go to Weebly.com/twist today to learn more & receive a 15% discount on your first purchase.

This episode is also brought to you by LinkedIn. Get access to LinkedIn’s marketing tools and target your customers with precision.

Redeem your first free $100 ad credit by visiting linkedin.com/thisweekinstartups.

Show Notes:

01:50: Introducing Ian Bernstein, former co-founder and CTO of Sphero and founder and Head of Product at Misty Robotics. Ian talks about founding entertainment robotics company Sphero, the high cost of marketing, more.

05:48: Ian explains how adding character, personality, and gamification to Sphero’s robots led to a Disney-sanctioned BB-8 robot.

11:55: Thank you to sponsor, Weebly. Visit weebly.com/twist for 15 percent off your first purchase.

15:05: Ian talks about the history of generalized robotics and and the inspiration to create Misty Robotics. He also covers lack of consumer readiness as a cause for market failure. He says companies like Amazon are paving the way for more advanced home robotics by building useful AI and familiarizing people with it.

20:14: Ian demonstrates the Misty robot. Currently targets developers without robotics experience. The robot is programmed via JavaScript. He lists available functions, including 3D mapping, navigation, voice interaction, computer vision, more. Misty is designed to be hackable in terms of software and hardware. The company is letting developers build whatever they choose right now, but will establish a more controlled system later.

25:53: Thank you to sponsor, LinkedIn. Visit linkedin.com/thisweekinstartups for a $100 a credit.

29:00: Jason and Ian talk about marijuana use at work and the impact on productivity of getting into a flow or zone.

31:30: Ian says Misty I, the robot his company handcrafts in Colorado, is now available. Misty II will be available in December (on presale now through May 31). It runs $3.2k but it’s currently half off and TWiST listeners get another $100 off. Ian says one of the reasons Misty chose crowdfunding was to build a community, as, he says, most consumer robotics apps will come from third-party developers.

34:21: Jason asks when generalized robotics will expand from the hobbyist tinkerer space into useful functionality for average people. Ian says the tech required for general functionality is just now becoming affordable for consumers. Ian notes Misty will support Cortana, Google Assistant, and Alexa. Also has Arduino integrations. Ian and Jason talk about the power of having an assistant-equipped robot following you around. The pair discusses fun and practical applications.

44:52: Jason asks about Misty Robotics’ strategy in terms of funding, the pace of development, etc. Ian says that while hardware startups are still difficult because the development process is slow and requires several years of runway, investors are becoming more open to it right now. It’s very important to get the right people involved. He says Misty spun out of Sphero in order to focus specifically on home robots.

48:35: Jason lists a series of jobs, asking Ian which ones are best performed by a robot today. For jobs best performed by humans, he asks how long it will be before robots can take over. They discuss what’s currently (theoretically) possible and the importance of 100-percent functionality versus robots that can perform only some parts of a given process.

58:21: Jason asks about the state of robotic arm technology and notes the falling cost. Ian speaks about software improvements making lower-cost arms and hands more precise. Sensors and AI play a significant role in improving precision. Jason asks about advanced prosthetics and Ian talks about brain-computer interfaces for prosthetics and for home robots.

1:02:25: Jason asks Ian what robotics developments in the past year have impressed him the most. Ian says the space is accelerating quickly. Boston Dynamics’ engineering is incredible. The pair discusses applications for Boston Dynamics’ dog-like robot.

1:04:28: Jason asks about Misty in schools. Ian says that in 15–20 years, robotics will be critical for young people coming out of college, so it’s important that children today have some introduction — the same way he was introduced to computers as a child.

Reminder to listeners to visit mistyrobotics.com/thisweekinstartups for $100 off the Misty II.

Ryan Rzepecki – Founder & CEO of JUMP Bikes

On episode 820 of This Week in Startups, I sit down with Ryan Rzepecki, Founder & CEO of JUMP, the dockless, electric bike-share startup that Uber acquired last month for 9-figures. We discuss the many ways in which multimodal transit solutions can transform cities, the future of commuting versus denser cities, the regulatory changes needed to build the cities of the future, and much more.

Join us for a lively discussion about the challenges of transitioning from a car-oriented society to a multimodal society, and for a glimpse at the future of urban life.

This podcast is brought to you by Wordpress. Your business needs an online home, it needs a WordPress.com website. 28% of all websites on the web currently run on WordPress.

We use Wordpress at LAUNCH to host our This Week In Startups website, and Jason’s blog, Calacanis.com.

Go to WordPress.com/twist for 15% off your brand new website.

This episode is also brought to you by Walker Corporate Law. A boutique law firm specializing in the representation of startups & founders.

Walker Corporate Law Group encourages fixed fees, whether you’re starting a company, going through M&A, licensing agreements, terms of service, etc, you will always know the cost upfront.

Visit WalkerCorporateLaw.com or talk to Scott Walker, the founder, directly at scott@walkercorporatelaw.com or (415) 979-9998.

Show Notes:

00:47 – Jason, an Uber investor, introduces Ryan, founder and CEO of the Uber-owned dockless electric bike-share company, JUMP. Ryan talks about the conception and founding of his company.

03:15 – Ryan explains the electric assist feature of JUMP’s bikes and the regulatory benefits of limiting the fleet to Class 1 electric assist (no throttle, the motor only engages while the user is pedaling).

06:36 – Ryan explains the locking mechanism, which enables dockless sharing. He also talks about where users can leave the bikes, which leads to a conversation about cities making more space for electric bike and scooter parking/charging.

11:52 – Thank you to WordPress, which powers the TWiST site and Jason’s personal blog. Go to wordpress.com/twist to get 15 percent off any new plan.

14:51 – Ryan talks about the falling cost of electric bikes and battery packs. He covers the average income for each bike and the costs of operations and maintenance. He explains JUMP’s plug-free charging system. Currently, JUMP has to pick bikes up from drop-off locations and bring them back to a charging station. JUMP is currently expanding incentives for users to bring bikes to a station for charging. He and Jason also discuss the possibility of a standardized charging system, usable by bikes from multiple companies.

19:57 – Jason asks about bike thefts. Ryan says JUMP operates in multiple cities around the world and theft is immaterial to the business. There is no aftermarket for heavily branded and specialized bikes.

21:58 – Ryan talks about JUMP’s relationship with cities and says city governments benefit from JUMP’s data.

22:48 – Ryan talks about the need to scale its fleet, as San Francisco users find no nearby bikes for one-third of app opens. He also talks about people choosing JUMP over short Uber rides.

24:41 – Thanks to our sponsor, Walker Corporate Law, which focuses on serving founders and startups. Visit walkercorporatelaw.com.

26:33 – Jason brings up the Uber acquisition and says bike-sharing is exactly what Uber needs. Ryan says that for JUMP, the sale to Uber will enable rapid global expansion. They discuss the leadership skills of current Uber CEO Dara Khosrowshahi and the legacy of former CEO Travis Kalanick. They also discuss Uber giving its leadership in each city the power to experiment.

31:10 – Jason asks what a government would need to do for JUMP to reach scale in a given city, and what that would look like. Ryan says JUMP would need to track utilization rates but a city like San Francisco might support up to 10k bikes. That would require the reallocation of public space for parking and charging. The city would benefit as JUMP would pay for infrastructure and provide the city with data. Would also reduce congestion.

36:43 – Jason says Uber drivers could be paid to return JUMP bikes to charging stations or to areas where they’re needed. Ryan says Uber already has great tech for demand repositioning. He notes Uber’s multimodal partnerships and says the company provides an excellent alternative to car ownership.

39:49 – Jason asks about JUMP’s city permit fees and talks about how partnerships with transportation startups can be beneficial to cities, providing increased revenue, reduced pollution etc. Ryan says Copenhagen probably has the best bike lanes/bike-only roads.

41:39 – Ryan talks about his time working at the New York City Department of Transportation and the closure of Times Square to create pedestrian plazas. He and Jason talk about the increasing popularity of bikes in New York and San Francisco.

45:38 – Ryan talks about JUMP’s footprint (40 cities in six countries) and future expansion plans. He and Jason talk more about the utilization of public spaces, congestion, the inefficiencies of parking, the long-term trend of making streets friendlier to people, more.

50:06 – Jason and Ryan talk about how autonomous vehicles could change commutes, where people choose to live, etc. Those who can work while traveling to the office might be more likely to live farther away from their offices. Self-driving cars could reduce congestion and enable higher speed limits, possibly enabling sprawl, however, denser cities are likely the better solution.

56:08 – Jason closes the show by saying JUMP represents entrepreneurship at its rawest and best: years of passionately working on an idea without anyone taking much notice, followed by a great outcome.

Brendan Eich — Founder of Brave, Mozilla & Creator of Javascript

Episode 819 of This Week in Startups features a fascinating interview with JavaScript creator, Mozilla co-founder, and now Brave Software Founder & CEO, Brendan EichBrave Software offers a browser with built-in ad and tracker blocking. We dig into the details of Brave’s Basic Attention Token (BAT), the ethics of online advertising, the browser wars, the shady nature of many ICOs, and more.

Join us for an insight-rich conversation between two long-time web insiders.

Receive these episodes in your inbox

This podcast is brought to you by Asana, which gives teams everything they need to manage projects, tasks, and work productively to deliver better results, faster.

We use Asana at LAUNCH to manage our pre/post-production tasks for This Week In Startups, blog posts, incubator, event planning, and more.

Start using Asana today for free. Go to asana.com/twist to sign up.

This episode is also brought to you by Squarespace. Build beautifully designed websites in a matter of minutes.

We use Squarespace for all of our LAUNCH websites, such as LAUNCH Festival Sydney coming up in June 2018.

Visit squarespace.com and enter offer code: “twist” to save 10% on your first purchase of a website or domain.

Show Notes:

04:39Jason covers Firefox’s deal with Google search (before Chrome launched). The pair discusses the launch and dominance of Chrome.

00:42 — Introducing today’s guest Brendan Eich, the creator of JavaScript, Mozilla co-founder, and co-founder/CEO of Brave Software. Brendan explains the origins of JavaScript.

03:06 — Brendan discusses Brave’s motivation for creating a new browser. He says the current top browsers are essentially owned by advertisers. Brave includes ad-blocking and anti-tracking tech.

08:47 — Brendan talks about Brave’s launch, user experience versus publishers’ ability to advertise, the legality and ethics of ad-blocking, and a new model for publisher revenues.

11:32 — Jason thanks sponsor Asana. Visit asana.com/twist and try it for free.

15:32 — Jason asks about sites that either restrict ad-blocking users or that simply don’t function correctly with ad-blocking browsers. Brendan says Brave is developing machine learning and web crawling to automate exception handling.

16:09 — Brendan explains Brave’s Basic Attention Token. He says Brave will serve to prove the BAT’s value, and hopefully, other browsers will adopt the tech. Brendan says many ad-blockers don’t prevent tracking, and they receive substantial payments to let some ads through.

17:47 — Brendan demonstrates Brave and shows a graphic that details the ads and trackers that load at TMZ.com with other browsers versus what loads when using Brave. Jason and Brendan discuss how some trackers are used to work against publishers and users.

22:49 — Brendan says Brave hopes to launch its own ads, free of trackers, which can be targeted without compromising anonymity (using zero-knowledge proofs).

26:12 — Jason asks about how Brave handles Facebook and third-party tracking, says the Like button was a huge scam to gather publisher data and destroy publishers.

29:22 — Jason thanks sponsor Squarespace, which powers all of LAUNCH’s event sites. Use offer code “twist” to get 10 percent off your first purchase.

32:01 — Jason talks about the shady nature of many ICOs, then asks Brendan about the Ethereum-based Basic Attention Token (BAT). Brendan says Brave’s ICO helped to fund the project and supply users with BAT, which can be used to reward creators, more. Users can also fund their own wallets. He also demonstrates how Brave automatically rewards publishers based on user attention and how users can set budgets and only fund specific sites.

40:23 — Brendan says Brave has 16k publishers and 10k YouTubers on board to collect payments. The pair discusses YouTube’s biased demonetization practices and the effect they have on lower-level creators.

45:02 — Brendan says Brave’s top partner publishers are generating thousands per month from Brave. Jason asks about BAT support at various exchanges and what that could do for Brave. Brendan says Brave is building a long-term platform and BAT is a utility token (though some users are interested in the speculative aspects).

48:35 — Brave claims more than 2.2M monthly active users and expects 5M by fall. Brendan talks about advertising goals at scale.

50:42 — Brendan talks about Brave’s fundraising, the costs of operation, BAT’s value and potential beyond Brave. Jason talks about Mahalo’s virtual currency initiative.

54:34 — Jason and Brendan discuss fraud in advertising, then Brave’s rising profile among large companies.

57:12 — Jason asks why average consumers are finally paying attention to online privacy. Brendan says people aren’t just responding to big stories about data breaches; they’re noticing very specific ad targeting.

58:14 — The pair discusses major companies facing investigations, lawsuits, regulations, etc.

1:01:45 — Jason asks how Brave will know when it has succeeded. Brendan says standardization: when BAT is used by other apps. Standardization also applies to anonymous donations and anonymous ads revenue. Jason agrees that consumers should get some ad revenue for viewing or interacting with ads.

1:03:38 — Jason asks Brendan about Prop 8 and surrounding issues.

News Roundtable: Elon Musk rants, FB Dating, Telegram cancels ICO, CamAnalytica folds

Join us for another News Roundtable episode of This Week in StartupsDave MathewsAustin Smith, and I discuss an action-packed week of big news. Topics include Elon Musk’s earnings conference call, Facebook dating, Jan Koum’s departure, Telegram’s canceled ICO, and more.

Don’t miss the return of “Guess the fake Startup!”

Receive these episodes in your inbox

Timestamps:

01:23Jason introduces TWiST regulars, NewAer founder Dave Mathews and Inside.com President and GM Austin Smith for this news-packed episode.

03:07 – Tesla’s earnings conference call, in which Elon Musk dismissed multiple questions. Jason says Elon doesn’t have to play analysts’ games, and that some questions came from short sellers who are trying to manipulate the stock. Dave discusses robotics in auto manufacturing.

12:36 – Jason thanks sponsor Walker Corporate Law, which provides flat-rate pricing and focuses on founders and startups: walkercorporatelaw.com

13:50 – Guess The Fake Startup returns: Austin describes three dating app startups and Jason and Dave guess which one isn’t real.

  • Delightful.com: Match Group product with Steve Harvey serving as “Chief Love Officer”

  • HODL My Heart: Dating for cryptocurrency and blockchain early adopters

  • Clown Dating: Dating for clowns and clown lovers

27:52 – Jason thanks sponsor Athletic Greens. TWiST fans get 20 free travel packs with first purchase. Visit https://athleticgreens.com/twist

29:39 – Facebook’s f8 conference: Oculus Go, Clear History, and news of a coming dating feature (which punished Match Group stock). Dave notes the awkward timing of announcing the dating feature while the Cambridge Analytica scandal is still in the air. Jason isn’t sure users are concerned about it (Austin agrees), and says Facebook is already functioning as a dating site. He also says Facebook could block Tinder from using Facebook Login and use Instagram and other Facebook properties for dating.

38:19 – Jan Koum leaving Facebook: Dave talks about the passion he shares with Koum: air-cooled Porsches. After discussing Koum’s stated reason for leaving (Facebook’s business practices and weakening WhatsApp security), Dave says a source told him the app’s encryption keys are already compromised. Jason talks about data mingling between Facebook apps and says the company cannot be trusted. He advises founders to disbelieve any promises Facebook makes in an acquisition offer: do not sell to Facebook.

46:11 – Cambridge Analytica shutdown, bankruptcy.

48:28 – Telegram cancels public ICO after raising $1.7B via pre-sale. Jason says this is the kind of thing the SEC needs to investigate immediately. The trio discusses the practical applications of Telegram’s virtual coin and the considerations for ICO investors and LPs.

59:10 – Video of the Week: Puppy rescued from drain by drone with a custom-built crane.

1:03:24 – Scooter-rental bike wars in San Francisco. Jump Bikes, Bird, LimeBike, Spin, etc. The trio covers safety issues, including users riding on the sidewalk rather than in the bike lane. People are also keeping scooters locked up for personal use, removing them from the pool.

The groups also discuss other transportation issues, such as street congestion caused by cars and trucks competing with scooters and foot traffic.

1:20:27 – Jason talks about LAUNCH Festival Sydney and Founder.University.

Productivity for Your Startup: An Action Plan

In episode 816 of This Week in Startups, Mike Ghaffary, Partner at Social Capital, stops by LAUNCH Incubator to give a talk on productivity. He details techniques for reducing cognitive load, improving work proficiency, working almost 100 percent mobile, and more.

Join us for a discussion that addresses the unique challenges founders face in getting things done, as well as the importance of personal time and health.

Receive these episodes in your inbox

Timestamps:

00:48 — Introducing Mike Ghaffary, Partner at Social Capital. Mike lays the groundwork for the day’s talk by detailing the limitations of increasing productivity merely by working more hours.

04:18 — Mike covers his background in education, as a computer scientist, as an entrepreneur, and as an investor.

07:29 — Mike talks about the problem of inbox overload

08:00 — Thanks to our partners at Squarespace Inc., which powers all of LAUNCH’s event sites. Use offer code “twist” for 10 percent off from your first purchase.

10:09 — Mike discusses inbox zero, an email client that motivates the user to get through all messages. Mike says entrepreneurs don’t have to use that system, but they need some sort of system to prevent themselves from getting bogged down with email.

Mike recommends choosing from “The Four Ds” when going through email:

  • Do it (take an action, such as respond)
  • Delegate it
  • Delete it (read and archive)
  • Defer it (if it can’t be done now but requires an action, create a task or event)

14:13 — Mike explains the themes of the talk:

  • Attaining 50/50 proactive/reactive balance
  • Reducing cognitive load
  • There’s no time like the present
  • Be mobile — don’t put off tasks you think of as desktop activities

15:19 — Proactive vs reactive: Mike covers scheduling free time to think, using apps to simplify life.

24:12 — Mike says the most important tool relevant to productivity is a task list. The key feature requirement is syncing between mobile and desktop. He recommends no more than three prioritized tasks per day. Use actionable verbs. Create small tasks with urgency, not broad goals.

33:35 — Mike covers the importance of being able to do everything mobile and provides examples of how to perform tasks on mobile that people generally consider desktop activities.

35:55 — Thanks to partner Rxbar, a whole food protein bar company. Get 25 percent off your first order by visiting https://rxbar.com/twist and entering promo code “twist”

38:55 — Mike returns to discuss mobile productivity, starting with calendar use. He also notes that even spreadsheet work can be done while mobile. He says 99 percent of founder tasks can be completed while mobile. When you run into something that can’t be done mobile, create a task to find a new solution or to handle it later on desktop.

44:40 — Mike explains email bankruptcy: select all inbox emails, label them as “(month name) bankruptcy day” and archive them. They are still available when you have free time to go through them.

46:19 — Mike covers the benefits of using shortcut keys.

Questions:

47:45 — How does budget figure into radical delegation?

51:13 — What do you think about recruiters, cost taken into account?

55:10 — How do you avoid being on your phone non-stop and disconnecting from others?

57:24 — Jason recommends removing unnecessary social and entertainment apps from your mobile device. He also recommends putting the device away after work.

59:10 — Was there an A/B test or success that led you to sending recruiting emails on Friday evenings?

1:01:58 — Can you walk us through your typical Thursday when you were CEO at Eat24?

1:03:13 — Jason and Mike discuss the importance of getting a good night’s sleep and exercise.

01:06:39 — Mike details the best times of day for specific types of activities for maximum productivity.

1:10:08 — Jason concludes the talk by summarizing the goal: making the best use of your time given your company’s stage.

Female Founder University, June 4-6 in SF

Applications for the next Founder.University, taking place on June 4th, 5th and 6th in San Francisco, are now open.

[ Click to Tweet (can edit before sending): https://ctt.ec/v26lm ]

This class is for women entrepreneurs and it’s free to attend.

We are looking for founders with a product in market but pre-Series A.

To apply here for the June 4-6 class:
https://www.founder.university/june

The deadline to apply is MAY 8 (attendees will be informed by May 15).

Additional Founder.University classes in 2018 are as follows:

Please share with any founders you think will be interested.

All the best,
Jason + the LAUNCH team

PS – LAUNCH Festival Sydney has 1,500 founders coming for free for two days on June 19 and 20 and will feature three startup competitions: one for new companies (under a year old), one for crypto startups and one for frontier technologies (i.e., technologies that are not mainstream yet, like robotics, AI and new food technologies). http://launchfestivalsydney.com

PPS – LAUNCH Angel Summit in July is almost filled. This two-day event is for investors with one to 100 early stage investments, and we’re thrilled to announce David Sacks, of Craft Ventures (and previously Zenefits, Yammer, and PayPal) as our first keynote. http://launchangelsummit.com

Howie Liu, Co-Founder & CEO of Airtable

Howie Liu, Co-Founder & CEO of Airtable: a spreadsheet-inspired collaboration platform that enables users to create their own workflows and functionalities, joins us on episode 814 of This Week In Startups. Airtable recently raised $52m of Series B funding and introduced “Blocks” – apps that run on top of Airtable – add access to third-party APIs (such as Google’s Cloud Vision API) and a variety of additional features. Ultimately, the company plans to open its app store to third-party developers and split revenue.

Join us to learn about a fascinating, functional product that has found its place as an essential tool in diverse industries.

Receive these episodes in your inbox

Timestamps:

02:15 – Jason introduces Howie Liu, co-founder & CEO of Airtable. Howie says his team doesn’t think of Airtable as a productivity company but as a platform that powers creators. Jason lists some of the investors that have contributed $62M to date.

04:34 – Howie describes how different users employ Airtable, as he finds this more useful for prospective users than any single-sentence pitch. The platform includes a database, task management, pipeline visualization, more. It’s used by farmers to manage livestock, by media companies to manage their content-planning workflows, more.

07:11 – Howie explains that Airtable inherits the best aspects of spreadsheets, which are optimized for number crunching, but enables users to build custom solutions depending on applications. They can attach files, integrate tasks with calendars, more.

10:33 – Howie covers competition, noting there is no direct equivalent to Airtable. Google Sheets and Excel are the most obvious competitors, but they don’t really compare when it comes to features. Howie says Airtable’s solution is 10 times better for many use cases. In some cases, Airtable provides control and customizations that custom software solutions do not.

12:48 – Jason thanks sponsor WordPress, which powers Jason’s blog and the This Week in Startupswebsite. TWiST listeners can get 15 percent off any new plan at wordpress.com/twist.

15:03 – Jason asks how Howie became so interested in spreadsheets and improving them. Howie says he’s not excited by the spreadsheet itself, but by what people can do with them, including building custom workflows.

17:28 – Howie demonstrates Airtable, explaining the layout and detailing the features not found in other spreadsheet apps. His demonstration table is an events management project by a music festival company. He explains how Airtable can share and pull data so projects always access a canonical source of, for example, current staff (all projects referencing the staff Airtable stay up to date).

22:34 – Howie breaks down pricing: for self-serve: $10 per user per month for the Plus plan, $20 per user per month for the Pro plan (both tiers paid a year in advance); for enterprise: $60 per user per month. The enterprise plan adds expanded usage limits, additional administrative control, the ability to use the company’s authentication system so IT can provision users without creating new accounts, etc.

23:36 – Jason laments missing the chance to invest in Airtable’s early rounds. Howie describes the simple state of the app at the time of Series A. He says the team has been unhappy with the company’s valuation at each funding stage and still feels Airtable is undervalued due to the total addressable market and the company’s path to reach it.

28:08 – Jason thanks sponsor LinkedIn. TWiST listeners can get $100 in advertising credits by visiting https://linkedin.com/thisweekinstartups.

31:28 – Jason speaks about investors who spend too much time away from work and Jason and Howie recall their working vacations.

34:32 – Howie explains nonprofit Samasource, which works to create jobs in areas that need economic development. Samasource will, for example, outsource American digitization projects to computer labs in Uganda.

35:57 – Howie talks about the importance of the free version of Airtable in terms of educating the public on the product.

37:49 – Howie explains Blocks, which are apps that run on top of Airtable. Currently, only Blocks developed by Airtable are available. Eventually, the platform will be open to third-party developers. Howie demonstrates a Maps Block, which uses data from Airtable to auto-generate maps (can display locations of events, more). Blocks are embeddable and display up-to-date data.

44:29 – Howie covers a Block for designing custom print layouts that use database information and a Block that uses Google’s Cloud Vision API to label and describe images. He confirms Zappier and IFTTT integration. Users cannot email data directly to Airtable yet, but Zappier integration makes that possible.

53:17 – Howie explains Blocks that will enable Airtable to automatically send emails and SMS. For example, to remind an employee of the next day’s work schedule.

54:12 – Jason asks about the marketing strategy for a product that can be difficult to grasp for the uninitiated. Howie says word of mouth has been significant in Airtable’s success. Users who are enthusiastic about practical applications ultimately draw contacts and coworkers in.

57:16 – Howie explains why the Airtable app store is currently limited to Airtable-built apps: in part to establish a standard of quality. Ultimately plans to split revenue with third-party developers.

1:00:12 – Howie describes Airtable Universe: a GitHub-like public repository where users can share workflow templates. The layout encourages submitters to explain their use cases.

1:00:42 – Howie tells the origin story of his first company, Etacts, a personal relationship manager. The team saw a lot of acquisition interest early on. While the company had a vision for a big outcome, the team wasn’t seasoned and didn’t see a strong path to get there. So selling to Salesforce made sense.

1:06:08 – Jason asks Howie how he feels about founding teams selling stock for fundraising rounds. Howie says it depends on the motivations. When a company is definitely overvalued, it makes sense to partially cash out as insurance. When the company is undervalued, the seller just gets a bad deal. Notes that allowing the sale of common stock is bad for future employees.

1:09:21 – Howie says Airtable has an inbound sales team and probably won’t need an outbound sales team for some time. The company is confident in its projected cash flow.

1:12:05 – Jason talks about selling company shares too soon. He provides examples: someone selling Uber shares in the midst of rapid growth, someone who sold Facebook stock before the company went public.