Running Startups

Is entrepreneurship only for rich kids?

The controversial claim has been made that our entrepreneurial adventure here in Silicon Valley is not built on the back of special risk taking entrepreneurs, but in fact it’s just a bunch of rich kids with little to lose by taking risks. The article makes some interesting points and has some data to back it up, and is worth reading. At the core, I disagree — I think it’s right but incomplete — and lay out my thinking below.

I don’t entirely agree with this. There is an element of truth, but I think that in Silicon Valley, the landscape is changing.

Startups fail. Choosing a career as a founder exposes you to the risk that, in a year or two, you will be out of a job. Who takes this risky path?

People with a higher tolerance … Read More »

A Startup CEO’s Guide to Burn Rates and Vaporization


The alarm has sounded.  A three-alarm fire, with alarms named Bill, Fred and Marc.  Burn rates are too high, change course or risk the consequences.

A CEO might be forgiven for asking: “that advice might have been more helpful before I hired those extra hundred engineers, and leased the fancy SOMA exposed-brick office to house them in.  Changing course on burn-rate now will be a lot harder than it would have been a year ago.”

To which I would say: suck it up and go run your business.  The past is past, and the decision you need to be focused on as the CEO is:  what should I do now?  The board is not running your business, they merely advise you, and you are ultimately responsible for making the correct decisions.

The question remains:  What should I do now?


The Past is History, … Read More »

Box, Uber and 29-cent Tacos

My twitter is alive today with stories of Box, now offering *unlimited* file storage for just $35.  What a deal!  Consumers love the idea of getting storage, which we all know costs real money, for a low fixed price, right?

Almost as much as I like me some UberX for half the cost of a crappy taxi.  And given that the price drops a further 25% with every new fundraise, we are asymptotically approaching free car service.  Who doesn’t like free transportation?

Still, I’m reminded of my view when Taco Bell offers a value menu with 29 cent tacos:  beware buying ‘food’ at a price for far less than it would obviously cost to make food.  If it’s too good to be true, it’s probably not true.

What do I think on Box?   I think maybe … Read More »

What’s the Big Idea?

“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” — Steve Jobs

Conventional wisdom in the entrepreneurial community says that ideas are not valuable.

Let me tell you, as a wannabe entrepreneur without an idea of what you want to do … it doesn’t feel easy. I’ve started two businesses, and in both cases it took about 18 months for me to get from “I wish I had a good idea for a business to start” to actually starting a business.

Part of the reason for the conventional wisdom is the higher success rate of businesses started by operating executives, who see an unmet need in their domain or a chasm their employer can’t cross, and they go start that business. As an investor, I would prefer to back a business started by … Read More »

Regulation and Startups


This post originally appeared in PandoDaily.

How should entrepreneurs (and investors) factor the risks and challenges of regulation into their decision to start a company or invest in one? It doesn’t come up very often — regulation rarely intrudes on the fate of startups. Even if you are in a regulated industry, generally you can fly below the radar for quite a while.

Lately regulation has been in the news with discussions around a number of industries. Drones have entrepreneurs salivating at the disruptive opportunity for unmanned flight to empower delivery of goods, aerial surveillance, and more. Yet, the FAA is concerned about flying objects weighing several pounds or more crashing and injuring people or property. In the automotive industry, Tesla wants to sell cars directly to consumers, arguably in violation of long-standing franchise … Read More »

That’s a nice little $40M ecommerce company you have there. Call me when it scales

It will surprise a lot of entrepreneurs to learn that building an e-commerce business with $10 million to $20 million in revenues is not that hard. It also surprises many to learn that it’s not actually that valuable. This is in stark contrast to, say, a SaaS business, which is very difficult to build to that level but valuable when you do.

As I read this week’s board deck for one of our portfolio companies, JustFab, I was struck by one of the reasons this discrepancy exists: marketing leverage. Most retail businesses (traditional or online) have to spend marketing money to acquire a new customer at scale. Small e-commerce companies can be exempt from that – if you fill a niche and you have distinctive product-market fit with a set of customers, you can and should land them Read More »

Opportunities in Digital Gambling

For those who don’t know, I co-founded the company that became Betfair, and have a keen interest in the space of online gambling.

I continue to wonder how opportunities are going to develop for startups in this space in the US.  Outside the US, most of the companies that have been built have pretty much been an online representation of what takes place offline.  (Betfair being one of few exceptions).  Consequently, most of the spoils have gone to pre-existing (pre-internet) companies who leverage their brand and presence to build an audience.  If all everyone does is put blackjack online, it boils down to a game of  customer acquisition and those with big brands have an unfair advantage.

Which bring me to the question of: what, if any, is the opportunity for startups in the USA if gambling gets legalized?

First, an aside for … Read More »

The “Bad News” Call

One of my CEOs just surprised me!  I just did a pre-board meeting call, scheduled at the last minute.  Actually, I just did two of these in two days.

I think of this as the “bad news call” — when the CEO sends me an email and says he just wants to catch up on something before the meeting, but gives no indication of what it is, I’m left speculating:  who’s quitting?  who did we fire?  how badly did we miss the quarter?

It’s borne of a good impulse: if you have bad news, you should absolutely get out in front of it, and diffuse it 1-on-1 with individual board members.  If you don’t, you risk the conversation going in a way you didn’t expect, or the group getting in a downward spiral.  It’s absolutely best practice to handle it this way.

But … Read More »

Treat your Angels Right

Before joining Matrix, I’ve had some experience with seed investors — I had a dozen or so of them at Betfair (Flutter), my first company, and then made a number of investments myself when my entrepreneurial investments began to bear fruit.  The following advice comes out of my experience, and while I was not terrible at it, I can’t claim I did this perfectly as a founder — you learn from what you do wrong as well as right.

Seed investors generally have little information rights, and that’s as it should be — as CEO you shouldn’t be spending a bunch of time updating these guys.  However, I’d argue it’s in your best interest to make at least a minimum of effort in communicating with your early supporters.  You should do this on a regular basis, whether … Read More »

US Gambling goes online?

Thoughts below are my personal opinions as a VC looking to invest in internet startups, and do not reflect any views on Betfair or its strategies, intent, or prospects in regard to the US gambling market.

All forms of online gambling, with the exception of horseracing, have been effectively treated as illegal in the US for the last decade or so. (Before that, they were essentially ignored).

The reasons for this effective illegality were somewhat murky.  After all, gambling is traditionally a state issue, where we leave states to decide what kind of regulation their citizens want.  Utah can ban it, Nevada can permit it, and everybody’s happy.  In 1961, however, Congress passed the Wire Act, in an attempt to control the spread of the mob, who at the time controlled the illegal betting industry.  The Wire act … Read More »

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