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.

As an angel investor should I invest in a founder working on two projects (or working half time on one)?

Peter Thiel (in crown), playing multiple Paypal employees at chess — including Sacks (the only winner) and Roelof Botha (to right of Sacks).

Just got asked this question on Quora.

If it’s Elon Musk or Jack Dorsey, sure, go ahead and invest in them.

If it’s anyone else, it’s likely not going to work out well as an investment.

[ Click to Tweet (can edit before sending): https://ctt.ac/c1U8m ]

There are some serial founders who specialize in starting and handing off startups to exceptional managers; Sky Dayton (who founded Boingo Wireless, EarthLink and other startups) comes to mind, but these individuals are rare.

You need to ask yourself as an angel investor the following two questions when looking at a founder with “founder ADD”:

  1. Has this person managed multiple projects before and how did that work out? I’m going to assume they haven’t done this before or you wouldn’t be asking the question.
  2. Does this person really believe in this startup, product, team and market, and if they do, why are they distracting themselves with other projects?! Perhaps they are hedging their bets.

The second question is the important one here. Perhaps the person started the project, needs to spend time with a sick family member, and they have an exceptional President and management team. In that case, I would evaluate the performance of the team and the likelihood that the President can take over as CEO.

Bottom line: startups are absurdly hard. Running two at the same time is like winning two chess matches at once. Anyone can play two games of chess at the same time, but very few will win both. This is an imperfect analogy, of course, because startups are not “win/lose,” they are more like “win small/win medium/win big/win gigantic/lose.” Even if the person wins both games, perhaps they will just win modestly —- which will suck for you as an angel investor.

Chrome OS is the ultimate productivity hack & will exceed Mac OS marketshare — but can it challenge Windows?

The Acer Chromebox CXI3

I recently replaced all but three of the Macs in our office (the ones used for video editing), with ~$800 ACER Chromeboxes and the stunning, ~$900, USB-C powered Dell 38″ monitors (model: U3818DW).

[ Click to Tweet (can edit before sending): https://ctt.ac/877i9 ]

Google’s Chrome OS is an absurdly fast, stable and distraction-free operating system. Over the past seven years of its short existence, it has become world-class.

Here’s why Google has nailed it:

  1. As the world has moved to cloud-based software, running inside of browsers, the need to download client software has disappeared for almost every task. This means software startups don’t have to build clients for every desktop operating system anymore (some do, most don’t).
  2. The Chrome Browser has become the standard for cloud-based apps to be built on — because it has massive market share.
  3. Chrome Extensions are available for everything you need to do, from password management, Grammarly and advanced email with Superhuman (email jason@18.234.176.227 with “superhuman” in the subject line and I will help you jump the line).
  4. ChromeOS doesn’t have all the Mac and Microsoft cruft like iMessage, Apple Photos, iTunes and all the rest. It’s basically just a browser with a desktop.
  5. Chrome OS is an open source project, which is allowing folks to do insane things like making a version of ChromeOS you can install on your old iMac and MacBook Air, and because the OS is so light it makes those computers seem new again.
  6. Chrome OS now supports Google Play, so if you insist on using an App like Spotify, Instagram or Slack, you have the option of doing it in the browser AND in the app. It’s kind of mind-blowing to Instagram on your huge desktop.
  7. Hardware vendors are loving and investing in Chrome OS. The fact that Acer is making a machine that is, literally, the size of a ham sandwich with 16 Gigs of ram, 64 GIG SSD, Bluetooth, six USB ports, an Intel Core i7 processor, USB-C, ethernet, HDMI and an SD reader is bonkers.
  8. For bonus points, you can power the ChromeBox from the USB-C port on your Dell Monitor — which then acts as a USB hub, giving you another four USB ports. This means the whole setup requires one power plug (to the monitor, NOT the computer), which is really strange.
  9. The chrome box powers 3840 x 1600 resolution on the Dell Monitor — which is nuts. You can put three giant chrome browser windows side by side, which will make you and your team 10-20% more efficient.
  10. ChromeBooks are all over schools today.
  11. Google’s login system and browser sync let you log in to ANY ChromeOS device — so sharing a ChromeBook or ChromeBox is as simple as logging on and off.
  12. ChromeOS is so light that it updates and boots blazingly fast — like seconds.
The back of acer chromebox

For $1,700 you can give everyone in your startup a machine that is absurdly fast and a monitor that is just amazing.

The Chromeboxes actually start at around $200, and you can get a decent widescreen for $400… so in truth you can test this setup out at like $600 total and have your mind blown.

Prediction: Chrome OS, which had < 1% market share at the start of 2015 and is currently at 4.35% marketing share of all operating systems (desktops, tablets, and mobile phones) will catch up and surpass Mac OS in the next five years. [ Source: StatCounter, slicker chart by Statista. ]

Comparing just MacOSX and Chrome OS

Big Question: Will Chrome OS eventually dominate the Windows operating system juggernaut, at 60%+? Google did with browsers, which take minutes to switch, but can they do it with computers which commonly get switched every three to five years?

The Chrome browser has taken over the world.

Finally, the Google Pixelbook is a fantastic machine to pair with the Dell 38 monitor. You simply plug in the USB port and, again, the monitor will charge your laptop and sync up in seconds. The Pixelbook, and Chromebox setup above, are half the price of an equivalent mac.

Bottom Line: Google’s brilliant long game: Chrome, Android and ChromeOS (aka the Chromium Project) are all open source and free, driving consumers to give their data to precious data for Google to — essentially — resell to advertisers. This builds a massive moat around Google’s ad business while putting massive pressure on Apple and Microsoft’s franchises.

How do you get an angel investor’s attention?

Don’t say everything

Got asked this question on Quora. The answer for me, and for most angels, is easy: send a short email with a link to the product or a product video.

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

Protip: Do not email your life story or 3,000+ words on why you built your product. This will make you look deranged.

The goal of your email is to get the investor to a) understand what you’re doing and to b) respond.

You want to send just the most important thing, which is one of the following things 99% of the time:

  1. your product
  2. your traction
  3. your market
  4. your technology
  5. you

What you don’t want to do is send an angel EVERYTHING in the first email. Get them on the hook with the best thing (perhaps two things) and try and get them to ask you more questions.

As an example, Henry from Cafe X sent me a video of the prototype of the Cafe X machine, along with two sentences, while based in Hong Kong. Since then, I’ve invested millions in the company, I’m on the board and they have three locations rocking in San Francisco. Mission accomplished.

Note: I don’t respond to all my emails, I get around 300–500 per day… but I do open most of them, and I do click on links often.

PS – I’m going to try and write a blog post every day in 2019 and set them to publish at 7AM… consider this day one of 365.

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@18.234.176.227

[ 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”

Defending self-driving cars in the face of tragedy

Last month we reached the tragic, and long-dreaded, moment in the history of self-driving cars: the death of an individual who didn’t opt into using self-driving technology. (In this case, it was a pedestrian, but it could have been passengers in a non-self driving car).

[ Click to Tweet (can edit before sending): https://ctt.ec/A29R8 ]

This follows the May 7, 2016 Florida death of a driver using Tesla’s driving-assist technologies (“autopilot”), which are often confused with self-driving technology.

Since that time, two other deaths have occurred while autopilot was engaged, including a driver in China on January 20, 2016, and the recent crash here in the Bay Area on March 23rd.

Four tragic deaths, in four separate instances, using two different flavors of self-driving tech (driver assist & fully automated), but one common thread which we must, as a society and industry, address candidly: user error and — most confoundingly — the abuse or misuse of this technology.

I’m a strong believer, and investor, in self-driving technologies.

I’m a shareholder in all three of the major players in self-driving: Tesla, Uber and Alphabet (aka Google), which owns Waymo. Two of those names, I own blindly via my Wealthfront “robo-portfolio” (i.e., I don’t actively trade them and don’t know how much I own of each). I invested in Uber, which is still a private company, during their seed round.

I also own two Teslas with self-driving technology, the Model X and the Model 3, and I’ve logged over 20,000 miles on autopilot.

I use autopilot almost every day on the 101 freeway, the same road where the most recent death with autopilot engaged occurred. It’s important to note that I’m not saying “autopilot death” here, but rather a death that occurred with autopilot engaged.

This is an important distinction, because in all three autopilot cases — and I want to be careful to not blame the victims here — the users appear to have potentially misused — or perhaps even abused — the technology.

Continue reading “Defending self-driving cars in the face of tragedy”

“Why do you hate crypto, Jason?” (I don’t, but… )

“If you are right, that 90% of crypto projects are scams or incompetent, what do you gain by taking that position publicly?” asked a close friend.

I took a moment to think it through.

[ Click to Tweet (can edit before sending): https://ctt.ec/3a1P0 ]

Why was I sounding the alarm on Twitter, my podcast, and CNBC, that civilians should be very careful investing in virtual currencies that are unregulated, anonymous, easily manipulated, phenomenally hackable, global, and often run by bad actors or the incompetent?  

“To protect people from losing their money?” I answered.

I’ve got a complicated relationship with crypto, having monitored early projects like Bitcoin with enthusiasm.

Six years ago I wrote a piece called “The Most Dangerous Project We’ve Ever Seen,” that introduced many in the investment community to Bitcoin.
http://www.launch.co/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html

Full disclosure, while I don’t trade cryptocurrencies, I have a lot of exposure to it by investments in startups like Robinhood, Abra, and Talla.com (to name a few notable projects).

Here are five important points I would like to state for the record:

  1. This Will End Badly For Most

It would take me ten articles to catalogue all the risks and scams in this emerging space, but to give you the broad strokes here are the critical issues that most savvy people — including those with large positions in crypto — all agree on.

Billions of dollars in crypto have already been stolen, and *most* of the ICOs I see are horrible ideas run by people who have no track record or ability to execute.

Bitconnect is an instructive example that you can read about here:
http://nymag.com/selectall/2018/01/ponzi-scheme-bitcoin-site-bitconnect-shuts-down.html

Most importantly, you should watch this hilarious video:
https://youtu.be/lCcwn6bGUtU

And read about these pump and dump chat rooms, where thousands of people (it seems) are buying crypto coins before marketing them to the next group of suckers.
https://theoutline.com/post/3074/inside-the-group-chats-where-people-pump-and-dump-cryptocurrency?zd=1

Now, it is *possible* that while most projects fail, most of the money in crypto could wind up going to a smaller number of higher quality projects that become long-term successes — but that is obviously not guaranteed.

In fact, it’s possible that Bitcoin could go to zero (which I talk about below).   

Continue reading ““Why do you hate crypto, Jason?” (I don’t, but… )”

ANGEL in Miami 1/29-1/30/18

Friends,

I’ll be in Miami, FL, in a couple of weeks to talk about my book, “ANGEL.”

I hope you will join me at Refresh Miami on Tuesday 1/30 for a fireside chat and raffle. Raffle winners will join me for brunch the following day, Wednesday 1/31. Agenda & book tour itinerary are below.

Hope to see you there.

Best,

@jason

MIAMI ITINERARY: 1/30 & 1/31

TUESDAY 1/30:

12PM-2PM Private Lunch with Gramercy

6:30-8:30PM Public event: Refresh Miami fireside chat & raffle. Raffle winners to join Jason for brunch following day.
Purchase tickets HERE.  AGENDA:

6:30pm – 7:15pm: Networking, drinks and light bites
7:15pm – 8:30pm: Fireside Chat and audience Q&A. Jason will be interviewed by Melissa Krinzman, Managing Partner of Krillion Ventures

WEDNESDAY 1/31:

10:00AM: Brunch with raffle winners.

ANGEL Book Tour Dates (frequently updated)

The Seed Slowdown

My pal Fred Wilson wrote about the “Seed Slowdown” today. The numbers show two clear trends:

1. 2015 was the peak of angel investing in technology startups in terms of dollars and number of deals.

2. 2017 is crashing in terms of the number of deals closed, with dollar amounts off significantly — but not as much.  

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

Fred points out some of the reasons for the boom and bust, and I’m in agreement and expand a bit on what happened — since I lived it and recently wrote about it in my book (angelthebook.com).

There were two major trends contributing to the 2014/2015 boom:  

1. Facebook created a crazy number of new investors (e.g., Dave Morin, TWIST #216 and Chamath Palihapitiya TWIST #238 & #776), who were added to the legions of Google angels running around town (e.g., Andrea Zureck, ANGEL #3).

2. Coordinated seed efforts: These started after Web 2.0 (the 2002-2006 era) and created a professional class of early-stage investors. These efforts include stuff I was working on like TechCrunch50/LAUNCH Festival, Sequoia Scouts & the Open Angel Forum (where Uber Pitched), and notably, Naval’s work on AngelList (TWIST #244) and Paul Graham’s scaling of YCombinator to mind-blowing heights (TWIST #421).

The reason for the decline? I would sum that up in 3 points:

a. Indigestion
When you break into the 30, 40 or 50 angel investments like Matt Brezina (ANGEL #10), Joanne Wilson (TWIST #358 & Fred’s better half) and I have, you need time to digest these deals. As I describe in the book, your startups will start coming back to you 9-12 months after you give them money, and most will not be able to clear market with other investors. This leads to dozens of founders needing your help to raise funds or come to terms with the death of their startups. It’s exhausting, and most angels take breaks investing.

b. Startups Staying Private
By now everyone knows that startups can stay private indefinitely, and this is a bad, bad trend for the entire ecosystem — but more often than not it’s worst for the company, which loses the discipline and the maturation that going public cause. My pal Bill Gurley (TWIST #722), considered by many to be the best VC on the planet right now, outlined this in his infrequently– but poignantly — updated blog, “above the crowd” (he’s tall, he’s a brilliant strategist): http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/  

c. Angels Moving Downstream
Many angel investors learn their craft and get picked up by major firms. Cyan Banister was a frequent guest at the Open Angel Forum, and invested in Uber and Thumbtack at the events. Over the years she became one of the most respected investors in the world and Brian Singerman at Founders Fund recruited her. Joining a big firm is a better life for an angel investor because, well, you do fewer deals at larger dollar amounts. This leads to the opposite of the indigestion in point (a) above! Fewer, more meaningful bets is simply an easier life than being an angel, which at times feels like being a hospice worker — which it obviously isn’t! In fact, that’s a big part of the job of being a great angel investor: explaining to distraught founders that this isn’t life and death.

As Fred points out, being an early-stage investor is hard and some people are leaving to do later stage investing which means…it’s a huge opportunity!

Continue reading “The Seed Slowdown”

ANGEL media hits so far… thank you.

Wanted to say thank you to everyone who has had me on their podcast/networks/etc. to discuss my new book ANGEL.

Podcast/Radio: Guest Appearances on Angel
2CentDad: Interview by Mike Sudyk
Bloomberg Markets: Interview by Carol Massar and Cory Johnson
Educate Yourself: Interview by Ryan Carson
Forbes: Interview by Steven Bertoni
The Full Ratchet: Interview by Nick Moran
Inside Outside Innovation: Interview by Brian Ardinger and Josh Berry
Intercom: Interview by Des Traynor
The James Altucher Show: Interview by James Altucher
KindredCast: Interview by Alex Michael
The Learning Leader: Interview by Ryan Hawk
The Matt Report: Interview by Matt Medieros
The Meb Faber Show: Interview by Meb Faber
Mixergy: Interview by Andrew Werner
Success! How I Did It: Interview by Alyson Shontell
The Twenty Minute VC: Interview by Harry Stebbings

Media Hits

7/18/17: Cheddar TV (1 hour 35 min)
7/19/17: CNBC Squawk Alley
7/23/17: Salon
7/25/17: Bold TV
7/26/17: Fort Knoxx
8/25/17: Live Talks LA

If you would like to have me on your podcast to talk about the book, tech, angel investing and life, email me [ jason at calacanis.com ]