YC’s FFC was one of the more enjoyable conferences I’ve been to in a while. The attendees were great, the format was brisk, and the content shared was by and large very helpful.
At one point, there was a panel of founders discussing the topic of fundraising. Two things hit me:
- It was weird. I have never seen an all-female panel before, especially not at any previous tech conferences. The fact that seeing an all-female panel seemed strange surprised me in and of itself – even I, as a female technologist of sorts, had become used to and complacent of the male-dominated nature of my field.
- It was enlightening. As a VC, I rarely hear such candid tales of fundraising from the entrepreneur’s point of view. Since I learned so much from this short session, I would definitely encourage any entrepreneur, aspiring or otherwise, to sit in on a couple VC-focused events. After all, EdTech vendors often attend Educator conferences and likewise, many industry conferences include both vendors & customers as attendees. In a way, VC’s and entrepreneurs are simultaneously each other’s customers – so why not get to know your customer better?
- It was inspiring. All of the female founders speaking at the conference were extremely humble – they had a “if I could do it, so could you” attitude, and many went at length to highlight their failures and inadequacies. It was a great reminder that I should probably be building, too.
With PG in the spotlight, many people forget that Jessica Livingston was also a co-founder. She shared her story her responsibilities as the sole nontechnical co-founder (delivering AC units to YC companies!) and juggling being a founder and a mom. She also highlighted that YC has been trying to fund more female founders over the years.
TaskRabbit is getting disrupted, in the same way craigslist was just a few years ago. Andrew Parker at Spark Capital once posted this graphic showing how craiglist is being replaced by a host of startups, a single vertical at a time.
The market of low-skill services is also being displaced by a crop of new entrants:
- Postmates: getting food delivery from any restaurants
- Washio: drycleaning and laundry delivered to your door
- Homejoy: professional home cleaning for $20 / hour
- Shout: location-centric marketplace for intangible goods (such as your spot in the Cronut line)
It has always been surprising to me that TaskRabbit never caught on as much as it should have. There are tons of daily tasks everyone goes through that nobody necessarily enjoys: picking up dry cleaning, mowing the lawn, putting together IKEA furniture… When I propose TaskRabbit to my friends, however, there is always a lukewarm reception even though I believe the monetary trade-off is a no-brainer for them. A couple of reasons why I think folks are slightly fuzzy on the whole concept:
- Unclear use cases: the TaskRabbit landing page doesn’t have key examples on how you can use TaskRabbit. I think a great example of demonstrated use cases is the Venmo homepage, where they show a live stream of transactions their users are completing.
- Friction in negotiation:The beauty of mobile apps lies in their simplicity in getting a task done – there is no back-and-forth, no talking to a human. The one-time I used Taskrabbit, I had to evaluate all the offers I received and also discuss the task with the selected TaskRabbit. For apps geared towards single use cases, this friction is reduced dramatically.
A suggestion for TaskRabbit is to perhaps go the Uber route and do some fun, single use case promotions for holidays like Valentine’s Day – something like a flat $20 delivery fee for a box of chocolates.
In today’s world, the cost of switching from one service to another is almost frictionless for the consumer. It makes very little difference to me to switch between something like Postmates and Homejoy instead of using a generalist application like TaskRabbit.
When the HTC First was released in early 2013, critics scoffed at the idea of a so-called “Facebook Phone”. It didn’t help that the product appeared half-baked – and many considered it to be Facebook’s first flop. AT&T quietly dropped the phone from its offerings mere months after launch.
Today’s announcement of Facebook’s $19B acquisition of Whatsapp reveals that Facebook hasn’t given up on taking over our phones – but taking a much more hacker-like approach. It went from a standalone, all-encompassing app to a network of apps, including Instagram, Messenger, Paper, and now Whatsapp. That’s not including other mobile assets that Facebook attempted to buy (Snapchat, Waze, etc.) On Messenger, one of the coolest, least-known features is the Talking Heads. It allows you to include a contact on your Android home screen, to quickly launch a conversation with him/her.
The platform wars are over – iOS and Android have emerged as the winners. But true to its hacker DNA, Facebook still wants to take over the mobile experience, one product/feature/use case at a time.
For me as an investor, the much more interesting question is, what’s next?
- Storage: The idea of storing files/messages/photos/etc. is central to the phone experience. Facebook acquired the now defunct Drop.io team in late 2010 as most likely an acq-hire. I think they’re still looking for this functionality – maybe Dropbox or Hightail?
- Location: Gowalla and Hot Potato were two other acq-hires, but Facebook places never took off and they were outbid for Waze. Perhaps Foursquare, Factual, Yelp, or PlaceIQ? This one I’m unsure about, since I don’t have visibility into how robust the Facebook Places data set is.
- Music / Video: Google has Youtube, and Apple has iTunes. Consuming media is a highly social experience, so will Facebook want a content distribution platform as well? Hulu, Soundcloud, Rdio, and Oyster come to mind.
- Commerce: The shopping experience on mobile is incredibly compelling and we already know how CTR and conversion rates can be higher than those on the desktop. There are a few startups powering commerce on Facebook’s native platform, such as Soldsie and Chirpify. Short of purchasing another asset like Pinterest, I’m curious to see how Facebook will proceed in this vertical.
- Calendar / Events: When I think about what products I use the most, Google Calendar is a top contender. Facebook Events haven’t integrated with my calendar app very well – and there’s definitely an opportunity to better discover events, a la Eventbrite
- What else do you use your phone for?
10% of Facebook’s market cap is a lot to pay for an acquisition (of only 32 engineers!) But when I start thinking about paying 10% for a messaging platform that is so core to our mobile experience – it starts looking like a steal.
I wrote a post this week and Alex published it as a guest post on his blog. Go check it out!
Jordan Kong is an Associate at Institutional Venture Partners, a late-stage venture fund in Menlo Park. She previously studied at Columbia University, interned at several NYC tech startups, and did a two-year stint on Wall Street. Jordan blogs regularly, tweets frequently, and takes photos
Hardware as Software and the Business Model Revolution
There’s been tons of emotional outrage and blog posts on the repercussions and implications of Uber’s price surges. Uber’s been addressing this criticism with the protest that price surging is just a result of free market forces. As an Economist by training, I can’t help but add my two cents, because as an Economist by training, I also know that free market mechanisms rarely work as perfectly as they do in textbooks.
- Inelastic Supply: Uber explains that by raising prices during demand peaks, they are “putting more Ubers on the road” by increase driver incentives. Uber supply, however, is not perfectly elastic – there is a limited supply of Uber drivers in a given location and each driver is often faced with other constraints that doesn’t let her respond immediately to increased demand. (In Economic terms, while Uber attempts to move the supply curve to the right, it can mostly only move along the same supply curve.) If Uber’s market mechanics were elastic, when we would see price surging for just the amount of time it takes supply to increase to meet demand. Instead, I’m pretty sure price surging typically occurs for the entirety of a peak demand period.
- Driver Incentives: I’m not even certain that price surges align driver incentives properly. Sure, getting 3x the fare seems great, but I would imagine that demand probably drops materially during price surges. Perhaps not enough to completely off-set the fare multiple (ie. demand doesn’t drop 66% in a 3x price surge situation), but probably very close to it.
- Income Targeting: While this is a minor point, income targeting may help explain some of the supply inelasticity. Economic research has shown that taxi drivers tend to be target earners – meaning that regardless of demand, taxi drivers tend to work until their daily income target are met. By the same token, drivers who have already hit their daily income targets will likely stop working, instead of increasing their hours to meet higher demand.
Uber also insists that price surging assures rides to those who need the rides the most, but it’s difficult to take that statement at face value. For one, Uber’s price surging is done as a multiple of the base fare, but a more accurate way of pricing according to demand would be as a % of income. The latter is an obviously more difficult methodology, but wouldn’t automatically out-price lower-income customers who may just “need” that ride more than someone with more purchasing power. At its core, Uber’s price surging is essential to its mission of guaranteeing rides when you need it, only because it out-prices the majority of the market.
I’m disappointed by Travis Kalanick’s comparison of Uber’s price surging to the high cost of air travel during the holidays. Sure, the supply/demand mechanics work in a similar way, but airlines are faced with constrained supply in a way Uber insists it’s not. Moreover, airlines probably have one of the lowest customer satisfaction ratings and probably isn’t and shouldn’t be what Uber aspires to be.
I’m an avid Uber user in San Francisco and will continue to be. I have, however, been surprised by some friends (mostly in NYC) who have decided to no longer use Uber due to the politics of price surging.
With all that’s been written about the Series A crunch, it’s no secret that series A investing has become more difficult. I would argue that it’s become more difficult because the definition of traction (a key decision factor in Series A investing) has changed dramatically over the past decade. In short, industry conditions have made it much harder to determine if a product is truly getting traction, or will only be a flash in the pan.
Increased Eyeballs: There are countless charts which show how new applications are acquiring millions of users in record time. It could be that today’s consumer startups have a high value prop and a better user acquisition strategy. But the underlying driver is that today’s populations are more plugged-in than ever, creating an easier climate to acquire those millions of users. Charts comparing such user acquisition rates are not apples-to-apples are don’t take into account macro conditions.
Ease of adoption: With increasingly better mobile infrastructure, downloading a new app has become effortless. With several services offering one-click sign-up (Facebook, Twitter, Google+ integration), user registration has become more frictionless as well. This is a double-edge sword – it’s never been easier to both acquire and lose users.
Duplicated Data: In the wake of social network proliferation, personal data is no longer a proprietary asset. A picture taken on mobile can be simultaneously sent/posted/shared to dozens of apps (Twitter, FB / Instagram, Tumblr, to name a few). For all pitch decks showing user data metrics, it’s helpful to keep in mind the Venn Diagram intersection of this user data with existing applications and platforms.
Network Effects as the New Norm: Social as a necessary feature has allowed most app to instantly on-board your entire network when you sign up. Even if you don’t like to use Facebook or Twitter sign-up, most mobile apps will also have access to your phone address book, making it easier to find friends and to invite other contacts to the service.
Which metrics should matter, then?
- Relative traffic: Measured on a relatively basis and keeping in mind that Facebook has 150mm MAU and Youtube gets 1bn unique visits per month.
- Engagement: Today’s consumer startups are not only competing for wallet-share, but for attention-share as well.
- Real business moats: the more things change, the more they stay the same.
I don’t know what to write about today, so here are four ways to use Wolfram Alpha for VC analysis—one of my ninja tricks.
TIP 1: Compare web statistics on any domain.
TIP 2: Find fundamentals and recent returns of your favorite public company.
TIP 3: See what the financial analysts are recommending.
TIP 4: Compare total funding of your favorite startups.
Awesome tips, thanks Brian!
Recently, before starting at DFJ Esprit, I had some time to think about which investment themes interest me most as I look for investment across Europe. Of course, to be honest, this is just what I think I’m looking for…until the right entrepreneur shows me something new and amazing I had no idea…
As a junior VC, I find that looking at investment themes is one of the easiest way to start thinking about what opportunities make sense for my firm’s portfolio and which opportunities are exciting for society, in general. At IVP, we already plays in several of these verticals (Cloud infrastructure, online finance, mobility, digital society, to name a few).
The areas that I’m looking forward to exploring are sustainability and pervasive computing – not surprisingly, these two themes also have the highest potential to improve consumers’ standard of living.
Yankee Sabra Limey: So what am I looking for? Thinking about VC investment themes
A couple of days ago, I attended a #devden talk at Atlassian featuring Chris Chambers, head of Engineering at Uber. He walked us through many of the challenges that Uber faced in its early days and the subsequent improvements they’ve made to their stack and UI.
While most people tweeted about the Google + Uber partnership as the beginnings of a fleet of self-driving cars, Chris focused more on the maps and infrastructure aspect of the business. The ETA’s calculated by Uber’s platform were more precise than those calculated by Google Maps. In fact, Uber’s back-end totally blew me away. It was incredibly interesting how they were trying to forecast demand, in real-time, as well as supply matching & positioning.
I couldn’t help but think how this commercial technology can also serve the public / non-profit sectors. People often complain about policy / ambulance / fire dept. response times – imagine if Uber can help reduce that by better positioning patrol cars. Maybe even effectively reduce crimes and accidents by having patrol cars positioned pre-emptively. Effectively dispatching help would also be crucial during states of emergency, such as national disasters.
How do you see Uber’s technology deployed in other areas?
I’ve been on a long search to find a replacement for Google Reader – which, coincidentally, was shut down on my last day as a banker. (Google Reader was one of the few “social” websites that wasn’t blocked at work, so I took it as the Universe being kind to me.)
I have tried several alternatives, including NewsBlur, CommaFeed, Feedspot, digg reader, the Old Reader… but found each of them lacking in some way. I’ve finally settled on Feedly, mostly because:
- It’s fast. Not necessarily fast in the sense that it pulls in feed updates quickly, but in the sense that it doesn’t lag when I toggle between feeds, which I do frequently as I have 500+ RSS subscriptions.
- It’s organized. One of my gripes with the old Google Reader was how slow/difficult it was to organize/re-org my feeds. Feedly has a virtually effortless organization UI (drag-and-drop between folders). The index is super helpful in seeing all the feeds you’re subscribed to, especially if you’re a power reader.
- It’s well layed-out. Feedly was the only RSS aggregator that gave the option of viewing the RSS posts as titles, “magazine”, cards, or full articles – all of which utilize screen space very well. I also like how the sidebar auto-hides when I’m reading a feed.
- It incorporates discovery. Categorizing feeds in broader interest categories, Feedly can help suggest new feeds to follow.
- It has a mobile app!
Some additional thoughts:
- Would love to see how they can make this more social. One Google Reader feature that I really miss is the ability to add specific posts into a customized feed. Posts that I like would then be used to create a feed for others to follow my interests / what I’m reading.
- A use/dis-use function, in which feeds that I rarely read or interact with could be suggested for unfollowing.
- Twitter started grouping tweets that are in a conversation – I wonder if there is a way to group blog posts in that way. Would be cool to see how writers / columnists are responding to each other’s thoughts, but not sure if an RSS aggregator can do this, or even if it’s the place for that.
What’s your default way of getting / reading news?