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Winning Slowly

Marc’s tweet today was timely, as this is an issue I have thought a lot about through my career (both entrepreneurial and investing.

Silicon Valley has embraced the idea of early testing and market feedback wholeheartedly, and ushered in a much more capital efficient era of startup building.  It used to take $10M+ to get a website off the ground, now it is generally live before the first outside capital comes in.  While this speaks volumes about the state of programming tools, cloud services, and other catalysts to development, it also speaks to the ethos of getting a “minimum viable product” live and in consumers hands.  Once out in the world, best practices of the lean startup encourage you to analyze the metrics and iterate on the product based on what you learn.  Startup construction has moved from … Read More »


#TBT – What Series A Fundraising Looked Like in 1999

Times have changed pretty dramatically since I started my first business in 1999, and I thought for throwback Thursday it would be interesting to share with the young’uns what Series A fundraising looked like back in 1999.

My business was then called InsightMarket, as a placeholder, and we thought we would call it WannaBet. We eventually launched as Flutter.com and it became Betfair when we merged with our biggest competitor.

I think our financing was extremely typical of the era — but how does the Series A process of 2014 compare with fifteen years ago?

Take a look through this fundraising deck and marvel at how risky a Series A investment was in 1999 – how little we knew about the product, the customer, acquisition, product-market fit.  This 14 page deck was the entire fundraising pitch — there was nothing else, no model, … Read More »


Foreign Exchange

As a bunch of you asked for it, my recent discovery on moving large ($10K+)  chunks of money from British Pounds or Euros to Dollars (and back).  (For smaller amounts, I’m told PayPal works well but I haven’t tried it.)

Here’s the challenge I have had:  if I want to move it from a bank in the UK to a bank in the USA, I have to go through a complicated process to initiate the movement – often requiring me to be in the country where the money is, which is rarely where I am.  So I am in the bank’s office in London, or on the phone with them at 3am, and go through an hour of bureacracy (ID checks, paperwork, waiting) until the money is ready to be wired.  Then, they call their exchange desks … Read More »


Where Insights Come From

I’ve always learned by doing things. Trial-and-error may not be the best way to learn a known answer, but when you’re inventing (as entrepreneurs must do), you gain insights as you go and change the plan accordingly. One of the tough challenges in moving from entrepreneurship to VC is that my actual operating and market experience decays over time. You get a lot of new knowledge from seeing hundreds of presentations from entrepreneurs, and to some extent from the investments you have made, but you don’t accrue a lot of experience from hands-on activity. And there is no pivot in VC: I have to commit upfront to an investment, and back that entrepreneur come what may.

Nevertheless, I think you can learn from experimentation in this job. So I’m going to deliberately … Read More »


When will Craigslist be disrupted?

Craiglist has been disrupted, it’s just not obvious yet. And the world will be a better place for it.

Craigslist has fewer unique visitors today than it did at this time in 2009.

Bad sites with network effects show much slower decay in use than they should based on their absolute quality. (think eBay.) Bad sites who price most of their product at free show incredibly slow decay in use. (think Craigslist). But make no mistake, it is happening.

The evidence of their poor quality is so obvious it’s hardly worth stating. Suffice it to say, if I’m looking to rent an apartment, it would be nice not to see the same listing reposted every day, and having to re-read it and figure out if I’ve called them before. It might be even nicer to view them on a … Read More »


Do investors ever invest in a pre-revenue and pre-product company?

All the time!

Historically (i.e. before ~2006) this was the explicit role of angel investors in the startup financing ecosystem. Rarely, in fact, would angel investors have an opportunity to invest after a product and revenue were in place.

For consumer internet and SaaS enterprise deals, a lot has changed in the last few years. Technology has moved on, and for a host of reasons a lot more can be accomplished with 1-2 engineers and little or no cash. Now angel investors expect to see product and customers before writing a check, and to an extent, founders expect to own more of the company after that first money comes in. Everybody wins.

As a general rule today, angel investors are expecting to see a product, and customers (or at least users) in place before they invest.

However, there is still a role for angel … Read More »


Life threatening software bugs?

I thought the internet panic over the new TSA pat-downs and body images was a bit of an overreaction. It turns out that the pat-down may be much better than the alternative, going through the back scatter imaging system. It seems the science is very untested on the risks of this system, and those risks could be quite real.

Check out this letter from concerned scientists to the government urging more testing.

Some key points they make:
– people compare the level of radiation to exposure in a chest x-ray or cosmic rays. But this is a totally different radiation. By design it doesn’t penetrate the skin — so while a chest x-ray just flies through you, this all just stops in the skin.
– all the analysis compares … Read More »


Should you keep the founder title?

When I founded my first company, I referred to myself as “founder and CEO”, and in retrospect, I believe it was a mistake. Were I to do it over again, I would de-emphasize my founder status.

The benefit of keeping the founder title accrues more notably to more junior founders: if the company grows and over time people are hired above you, it offers ego compensation to keep that founder tag on your business card alongside “product manager”, if you’ve effectively been demoted from VP of Product. This seems less relevant for a CEO, who should get sufficient ego out of that title alone.

The reason I think it was a mistake to emphasize founder status is that I was essentially implicitly trying to say I was better than the other, non-founder employees. That I was special, and … Read More »


Mixing Entertainment and Commerce: Show Me the Fun

Anyone who knows me well always points me to new deals that look like Swoopo – I have a weakness for things that are clever. A lot of these new deals aren’t great venture investments, some might be good “lifestyle” businesses, but most of them prove to be neither great nor good. In the end, maybe a bit too clever.

But that doesn’t change the fact that the thesis of “entertainment commerce” is a compelling one – buying on eBay was once a thrilling experience where people ended up buying stuff they didn’t need just for the fun of the chase, or overpaying because they couldn’t stand to lose the bidding war. These days, buying on eBay seems a chore to me, and I suspect it does for most users. But the idea of making shopping fun – a … Read More »


A/B Testing: Can you iterate your way to great products?

Jeff Atwood’s (@codinghorror) blog about the movie “Groundhog Day” got me thinking much more deeply about A/B testing, a powerful tool in a set of tools that enable a new generation of nimble startups to compete effectively against the big Internet players.

For example, Match.com is stuck on a decade-old architecture and would be hard-pressed to create dozens of unique traffic funnels and ruthlessly tune them to extract optimal performance from each acquisition channel. Hence, the window is open for new competitors who can use these tools to develop products from the get-go.

But what are the limits of iterative optimization?

Split testing is, in my view, no substitute for product vision.

Human beings are probably the ultimate result of great product development through split testing – evolution is one giant iterative experiment. Unfortunately for Internet startups it took millions of years … Read More »




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#TBT: Whatever happened to… B2B Marketplaces

When the bubble began to really inflate in 1998-1999, an excess of venture capital and would-be entrepreneurs latched on to Business to Business (B2B)...

Winning Slowly

Marc’s tweet today was timely, as this is an issue I have thought a lot about through my career (both entrepreneurial...

#TBT – What Series A Fundraising Looked Like in 1999

Times have changed pretty dramatically since I started my first business in 1999, and I thought for throwback Thursday it would be interesting to...