For Yo, All It Takes Is A Little Push

It all started as a harmless addition to the Product Hunt feed, a little lightweight mobile app which just does one thing — we all know what that is now. But, it can be so much more, and the sheer ridiculousness of the app’s simplicity somehow managed to generate a high level of chatter about the app “Yo” to the point of it being comical. Underneath the jeers and laughs, however, lies something worth paying attention to.

First, we must consider how frustrating Yo’s rise is to others. Think of all the other technology entrepreneurs and investors who are building complex systems for mobile devices. It’s very hard work. And, then, a couple of folks not only have their dead-simple app explode, they also capture the scarce attention of the major tech blogs and influential people on Twitter.

Second, speaking of distribution – mobile distribution is a bitch. I’ve written about this too many times. See here for more details, but TL;DR, only a handful of apps get to experience true mobile distribution, and this is one of them. Additionally, a smaller handful of apps touch on the zeitgeist of consumer word-of-mouth, and Yo was able to do that.

Third, we’ve been beating a dead horse about apps needing to do one thing, and to do that one thing well. And, well, Yo takes that to the extreme. But, then again, why not? A step further, there’s the well-known post about big breakthroughs initially looking like toys (by Chris Dixon). It’s worth reading that post again.

Fourth, push notifications and the notification screen are becoming increasingly important. Most people who mock Yo likely do not have any clue about the changes afoot on the notification screen, how younger users tend to view notifications as media (versus in-app experiences), and how the mobile gatekeepers are planning to modify their operating systems to allow for a range of actions within push notifications themselves, removing the need of opening an app entirely.

And, fifth, we have all seen this movie before. In late 2012, a little app called Snapchat was growing fast, and people couldn’t understand why this simple app with a gimmick built around expiring images could fetch millions in venture capital. Even when I wrote this column a few months later, it generated an unusual amount of feedback for something I write, and to this day, is the most popular post (by traffic numbers) I’ve written. Only now with hindsight do more and more people understand how Snapchat provided a channel for people to share mobile photos without the fear of having recipients “Save To Camera Roll” on their phones. Dead simple, and now, genius. Most recently, the folks at Betaworks have joined a small group to invest in Yo. If there’s one group who understands native mobile consumer products, it is Betaworks. Rest assured they all see a larger opportunity, and not a “simple, stupid app.”

That which is dismissed or overlooked can often hold deep, insightful meaning. What looks simple and not valuable could, actually, be the first step in a more complex architecture and, over time, accrue real value. The line between uselessness and usefulness can be razor thin. While critics pen premature obituaries, it is the builders here who get to write the future. Yo has distribution, has the right location, and now the right timing with push notifications poised to change dramatically. Maybe, we should think of Yo, to date, as a very, very, very v1.0 product. The future may hold many versions.

At the end of “The Dark Knight,” Batman traps The Joker by a cable, dangling his enemy, upside down, from the top of a large skyscraper. The Joker, floating in the air, face to face with Batman, muses, “Madness, as you know, is like gravity…all it takes is a little push [notification].”

Notes From The 2014 Pre-Money Conference

Right before the July 4th holiday, Dave McClure and 500 Startups put on their second annual “Pre-Money Conference.” I was lucky to attend as part of my work with the folks at Bullpen Capital, and it was a great conference and day of running into old friends and making new ones. I finally have a chance to jot down my notes from the event, so here goes, in no particular order — and, while entrepreneurs and founders won’t think about these issues on a day-to-day basis, I do believe it’s worthwhile to be somewhat aware of the world in which technology investors live in, because when one starts to peel back the layers, it quickly becomes apparent much of the propaganda shared online and on Twitter about investors is often off the mark. This isn’t meant to imply any of this is bad — it’s just reality, a reality founders may find useful to keep as context as they’re thinking about or actually raising that next round of funding:

A Select Few Raise Quickly, The Rest Are Always Raising: Having worked in a variety of early-stage startups and having helped many folks raise funds, I myself am continually surprised to learn how much time professional investors spend raising dollars for their investment funds from LPs. The bigger funds we all know by name — they raise money quickly. The rest of them have to constantly readjust to the market, think about the composition of general partners, and many have had to withstand haircuts from the billion-dollar club to more modest levels of assets under management. For an entrepreneur, this means most of the investors they’re courting or pitching are likely to be switching context between finding new LPs and evaluating new potential investments. It’s not an excuse, but it may be part of the reason why many are slow to respond to email (or don’t respond at all), and always seem to be in a rush.

In The Short-Term, Investors Are Much More Accountable To Their Own Investors: There’s a lot of good chatter online and on Twitter about behavior among investors, and that investing teams need to be more diverse (on many dimensions). There’s also no shortage of blogging and tweeting by investors marketing themselves as the best choice for founders. What we see online often doesn’t translate offline in real life, but by now, we shouldn’t be surprised by that. Again, for the majority of investors, while their job is to give capital to founders, they’re held much more accountable to their own investors. It makes sense when you think about it, but I’m not so sure most founders (who, likely, don’t care about this world) realize that, depending on the moment, they are not the immediate priority — no matter what all the blogs say.

Up And Down The Stack, It’s A Noisy Market For Capital: Ask anyone who has been investing for a while and is at least good (or great) at it, and they’ll say a version of the same thing — they’re not resting on their laurels. It is a brutally competitive market to invest dollars into private companies, and seed-stage firms which like to lead rounds as well as traditionally growth-stage investors are feeling the heat from all sorts of angles. As a result, investors are resorting to all sorts of branding tactics (PR, for example) and operational techniques (scouting, for instance) to get their names in front of the best opportunities. In a noisy market, attention is the scarcest resource, and because attention is a function of time, it can (somewhat) be purchased with money. Somewhat.

Successful Angel Investors Are Seen As Rock Stars: With public markets tightening and high-growth companies staying private longer, there’s tremendous pressure worldwide for those holding high beta-seeking capital to pump it into early-stage technology. This trickles down from the top, all the way to the long-time angel investors, who are now seen as being ahead of the curve, and rightfully so. It’s hard to prove it, but it just feels like more people are getting more serious about trying to invest small amounts of capital in very early-stage ventures. They come to a conference like this, in part, to better understand what method might work best — whether to raise an actual fund, or to just be an angel, or to try to be an LP, or to use a platform and run syndicates or trade using data. It’s easy to monitor this uptick in activity and conclude it’s a frothy time — yes, it is, but there’s also less of a game for these investors to play in the public markets, so they spillover into another section of the casino.

Seed “Rounds” Are In The Past, Now Things Roll To A Close: I’ve mentioned this to founders often lately…even just a few years ago, the founder would open a process to raise a seed round, and it would close within a finite period of time. No more. While it happens on occasion, the majority of founders are collecting checks at different valuation caps over a longer period of time, holding off on converting the caps to priced rounds until they find a lead investor. What this means is founders have had to collect smaller checks along the way, continuing to build their businesses, and keep momentum moving with the hope of convincing someone to lead and/or price the round and convert. There are some advantages and disadvantages of the new world, but on the whole, I believe it’s better for founders net-net as they don’t have to price their round too early — the cost is that it’s harder to find leads who hold the proper incentives to ensure the early-stage venture is on the right track for downstream investing.

It’s Not A Bubble, But That Doesn’t Mean Some People Won’t Get Burned: Have you noticed some people have been talking about a “bubble” since 2009? That’s because the time in which we’re living in is, for all intents and purposes, quite crazy — the proliferation of technology both to the mainstream (in the form of mobile phones and Facebook and social mobile apps) as well as those reinventing industries like transportation, food, and retail has not only shifted market value from incumbents to new entrants, it’s also increased the overall size of the market. When you look at the data — the amount of money spent in venture capital by quarter, or the number of IPOs, or even just the tightening of the IPO window of late — it’s clear that some big private companies are way overvalued, but it’s also clear that any shrapnel from any fallout won’t affect a wide swath of people. In Oliver Stone’s “Wall Street,” Gordon Gecko mocked a fellow investor who kept predicting doom by retorting: “Like a rooster who takes credit for the dawn.”

The Decacorns

A few weeks ago, I wrote a post called “Baby Unicorns,” where I was extending the meme about billion-dollar companies to try and create a list of companies at earlier stages that could, potentially, mature into unicorns. I know that whenever one creates a list, they’ll miss things and people will disagree. At a few events over the past few weeks, people would come up to me and ask questions about the post. “Hey, I read that post — good stuff, but tell me, how did _____ make your list?” Those led to some interesting (and some uncomfortable) conversations. Then, last week, a friend said — “OK Semil, so what are the ‘decacorns’?” What?

My friend, a former VC at a big fund, mentioned that he’s most interested to know which companies can enter the league of Airbnb, Dropbox, and Uber — the companies which have achieved $10b+ of enterprise value (even in private market valuations). And with technology pervading more and more into society, and more and more people starting companies, the number of unicorns will increase, but limited partners may now be more interested in having their GPs stake out big positions in companies that can be Decacorns.

It’s a good question, and a harder one. Without thinking about it too much, I called up the original post on my iPhone and scrolled through the list with him. Here are the companies and I came up with and my brief justification as to why — companies that have the potential to reach $10bn+ of value and sustain as independent companies over many, many years. The common thread among these: They’re platforms, where we can envision other people leveraging or building on top of the network in new ways. Again, I’m going to miss some, so please tell me what you think: There’s no specific order to this list, so I made it alphabetical:

Airware: Why? The market for drones could reach over $100bn+ over the next decade. Airware is one of the few companies positioned to write and distribute an OS for these “flying cell phones,” and with a market so big, and looking at what mobile phones did for Apple and Google (as rough examples), Airware has a chance to be on a Decacorn-trajectory.

AngelList: Why? The best companies are now staying private longer, and with so much corporate growth occurring in the private sector, funds and retail investors that would traditionally play in the public markets will face more pressure to invest earlier. However, in order to do so, they’ll need access to companies in the absence of publicly-available data, as well as mechanisms to create liquidity for these holdings. In such a heavily regulated world upended by new companies with lighter structures, a company like AngelList has the potential to reinvent everything from sourcing to investment banking.

Coinbase: Why? As Bitcoin grows outside U.S. borders in places where the rule of law is weak, and as more and more retailers accept these “coins,” Coinbase has captured the consumer-facing position where most normal people will start a wallet. For a while, things were unclear with Apple blocking these types of wallets, but those days are over now. Additionally, there are many powerful and influential people who are wholly committed to attacking every ounce of unnecessary fat that bankers have baked into transaction fees, and a digital currency like Bitcoin is what can cut into that fat. Beyond payments (and stored value), the added benefit of Bitcoin for Coinbase is the protocol upon which the system runs on — one I believe can be leveraged by developers to reinvent 101 business processes.

Lyft: Why? Lyft is often (unfairly) compared as Uber’s second-fiddle, but I’ve always felt their model is slightly different. Uber began as a network built around existing private car dispatching systems, using mobile to offer consumers order control. The Lyft vision, on the other hand, is pure P2P ridesharing. To date, Uber is playing the game very well, but I do not believe this is a winner-take-all market, because the market is way too big. So, I can see Lyft growing as well, as more people move to cities, as more municipalities grow cash-strapped and transit infrastructure fails to keep up with demand, and as the bottom-third of the economy looks for jobs that are not just “hourly.” Ultimately, I believe state and federal governments will elect to create huge economic incentives for us to rideshare as an alternative to costly infrastructure projects that would likely not be passed and/or would be too slow to develop. In such a world, governments could offer huge incentives for everyone to give everyone else a Lyft.

Pinterest: Why? I’ve detailed that here before. In my opinion, currently undervalued.

Snapchat: Why? A long road to get there, so I’ll just point to my previous posts on Snapchat as a marker.

Wealthfront: Why? This one is straight-forward: Software applied to a trillion-dollar market. To date, private wealth managers cull lists and network to find clients with net worth over $1m+ to manage their money. Why not use software instead? Part of this is a demographic change, where generations coming up might likely prefer their banking experiences to be automated and accessed through a desktop or mobile native interface. Beyond the UX, Wealthfront could provide more transparency around allocations and use math to power software that more efficiently balances stocks, bonds, and other assets according to an individual client’s particular tastes. Wealthfront could harness software to make Modern Portfolio Theory even more efficient, and that alone gives it a chance to be massive.

F-ing Up Innovation

The FAA recently laid down a ruling restricting some drone use cases. The FCC is not adequately defending the citizenry’s right to a neutral Internet. And, the FDA makes it painfully hard for all sorts of health-related startups, from hard science to wearables, to get into the clinical phase. And this doesn’t even begin to cover what the legislation of another acronym (SEC) has done to capital markets, most notably encouraging today’s most dynamic companies to stay private longer, to forego public markets, and to reward private investors in the name of protecting the public.

What The F?

The spirit of these bodies is to protect the public. That, however, was when our economy was working well. Today, despite what you see in the DOW or jobs reports, the economy has fundamentally shifted. This is, in part, why so many startups can provide local services — they have access to labor and routes (smartphones) to engage and manage that labor. But, people don’t want to be delivery-people all their lives. The economy, which has undergone a massive structural change, likely needs to loosen the noose around regulation and carefully let innovators push on the boundaries of what is possible. The hope here is harm is limited (if any) and the potential upside of a breakthrough could ignite new jobs and building blocks of a new economy.

That’s the theory, though. The reality is quite different. The leaders and team members of these Federal Agencies are politically appointed operatives, and they, just like elected officials, have twisted incentives. I won’t go into those here, but think of a revolving door where people give each other money in a never-ending merry-go-round. Anyway, we all know this. So, what to do? Outside of innovators leaving the country (a real threat), I think we all need the big technology companies (Amazon, Apple, Google, Facebook) to use their lobbying power to sway the regulators on specific cases where innovative ideas are explored. Clearly, some of these companies have major interests in what the FDA, FCC, and FAA have struck down or frowned upon. In a way, these technology companies transform into our politicians, lobbying on behalf of creators and the folks who back them. The technology sector has to play this game, has to collect and organize its financial power into these efforts, to make sure regulators don’t go so far as to reward the old incumbents, which would surely be a strategy for more lethargy in the labor markets.

The 411 On Turning Naysayers Into Believers

One of the best feelings an entrepreneur can experience is turning a naysayer into a convert. Well, I wasn’t a naysayer necessarily of The Information, but I will admit that I wasn’t sure it would be worth it for me to pay for a subscription. Information (no pun intended — really!) is supposed to be free, right? Well, I was wrong. Now, I won’t say that this is for everyone, but after meeting the team, talking to a few friends who did subscribe, and mulling it all over, I plunked down my credit card and signed up. In two days, I realized I was wrong. I have a peculiar reading pattern where I send all must-reads to my email, so they all get attention. Lately, my Pocket queue has just collected dust. In two day, The Information passed the test for me. I had originally assumed the publication would be about inside information about the startup world, but no — that was a bad assumption. Rather, it felt like a newsroom that was focused largely on two angles: (1) Who are the big technology players, what are their strategies, and who is making moves within those companies? and (2) How does the advent of today’s technology interplay with government and society? The best way for me to characterize the result is like a 60/30/10 split between The Economist, Fortune, and The Wall Street Journal style of writing, with the WSJ being the 10% of the equation. Most recently, a reporter for The Information profiled a big whig technology executive of one of the major tech companies, and it finally dawned on me: I needed to be aware of this person and the company, and I wouldn’t have found this information and level of analysis on any of the blogs nor any of the outdated financial or technology periodicals. The takeaway here (for me) is that there have traditionally been three big content verticals — sports, entertainment, politics. Now, we must add technology, as tech pervades society.

The larger story here, though, is about identifying, engaging with, and (hopefully) converting naysayers into believers.

So many people are trying to build cool new things (look at the rate of information flow on Product Hunt, for instance), and yet the competition for attention gets more brutal. The natural inclination is to enter into a sales pitch of sorts about why someone should try the product you built, or the product you invested in, or the product that you sourced and/or brought to Product Hunt. The incumbents usually learn to tune out these pitches. But, conversely, what about intensely engaging the naysayers? I’ve seen founders of some startups who are well-known but early monitoring threads and subtweets to find fans and the non-believers. I myself reached out to a well-known reporter who didn’t quite understand why a bunch of startups were in a space, emailed him, and he was kind to write back. Hopefully he follows through, and I’ll be watching. I’ve also noticed other reporters who berate a space but don’t engage back to learn more. Their reporting will suffer in the long-term, I’m sure of it. Anyway, the point of this all is that some naysayers hold clues for those who are creating something, and its a puzzle to figure it out. Additionally, some of the naysayers who do convert will end up being huge fans, so even on that count, it’s worth seeking them out on the chance you find someone invaluable to put into your corner. We have seen this happen with Swell (a radio pioneer in London is now one of our biggest fans) and I’ve heard other founders explain that some of their social media “whales” were groomed through this process. Not only does it feel good when it happens (endorphins!), it’s also a good strategy all around.

A Brief Survey Of The Block Chain And Business Processes

This post is meant to be a simple, brief survey of the block chain, from the point of view of an investor in the space. For someone who has read widely on all aspects of Bitcoin, this will feel rudimentary, but my goal here is to explain the idea of the block chain’s potential to a ore lay business audience. It will lack technical depth and instead focus on business applications that are likely to be created in the next few years.

Post #1: The Business Of The Block Chain (A Survey)

Over this summer and spring, I’m going to write more about Bitcoin and the block chain, specifically from the vantage point of founders who are working in the space right now and those investors who are interested in products that could arrive on the market in the next 2-5 years. The first post in this series was more of a preface, which you can read here. This post and the subsequent ones will presume some basic knowledge of the block chain. One of the best primers I’ve found (and please suggest more in the comments) is by Antonis Polemitis, which you can read here.

Back to the block chain. After reading as much as I can, and after talking to many smart folks in the space, I’ve come to a few conclusions: (1) The block chain as a computer science innovation is for real; and (2) there are 101+ business applications that can be rewritten by harnessing its attributes; but (3) it is very early days and right now, most of the best minds working in this space are focused on payments and stored value.

Put another way, it is very early for the block chain, which is a bad thing for a momentum or inflection investor, but a great thing for an investor who believes in the power of the block chain and wants to lay down an early, early bet. (If you are working on the block chain right now, please do get in touch with me.)

So, what can the block chain do, theoretically? Too much to list here. “A 101 things,” is my standard answer. This is a primer on a few areas, and then I plan to dig into each one with more detail in the summer. Regardless, I’ll offer some ideas as examples of new business processes that excite me specifically, in no particular order:

Smart Contracts

Many of the smart folks working in the space cited the idea of “smart contracts” as the one area which posses the most widely-applicable aspect of what can be “on-chain.” A smart contract acts as a specific protocol which helps parties create, validate, and enforce contracts without the need of expensive human overhead costs. Contracts that become interesting when “smart” could be DRM, derivatives, P2P commerce, and other business processes. All this said, there are some folks working on block chain-related ideas that, at least today, do not seem to be solving a big problem. Of course, it is early days, so who knows. (Earlier in the year, Naval and Balaji posted on Appcoins, which poses thoughts for how block chains could change the financial side of starting a business.)

Proof Of Work

The block chain can be leveraged to verify, attribute, timestamp, and prove, irrefutably, that work has been done at a specific point in time with specific characteristics. These record-keeping capabilities could open the door to a more transparent form of governance. This has been referred to as the public ledger. Today, we hold people and entities accountable to the fact that we can point to something that shows commitment or promise — in the future, work verified by the chain would be theoretically immune to disagreement (but I’m sure there will be “Chain Deniers”). Just like in smart contracts, there are a few companies working in the space, but not many.


This is the space that is currently in play and has real players most of us recognize by name, such as BitPay, Coinbase, and Circle, among others, which are leading the way to bring Bitcoin to the masses and financial mainstream. Someone will win this space and they will all also provide their own APIs to empower other developers to build on the block chain, but it remains to be seen if independent developers will want to use their APIs versus building on a neutral platform like Chain, which is sort of like an AWS for the block chain.

An Important Caveat

A good percentage of block chain enthusiasts I spoke with cautioned against a mentality of “Block Chain For X,” in the same way we all do this with “Uber For X.” They believed this will also generate very bad ideas that either don’t make sense in practice or that look cool but don’t really solve a big problem. While some of these solutions will be technically feasible with the block chain, they said to expect a period of crappy ideas before someone or a group of folks hits it big. And when they mean big, they mean trillion dollar market big. With that caution kept in mind, however, everyone admittedly is very bullish on the block chain. Today, it is early. Outside of a few teams, I have yet to see it. I would love to see it, and I’m sure I’m not seeing it all. Finally, there are of course many other use cases, but these seemed to be the big ones that resonated with everyone I spoke with, and underneath them, undoubtedly lie fascinating new ideas.

Online Condolences

I am 37. To date, I have been very fortunate not to personally encounter too much tragedy in my life, family, friends. Lately, on Facebook and a bit on Twitter, I have seen people publicly share bits of their bad news. It is hard to read. On a tweet, I’ll open the replies to see how people respond to their IRL friends or Internet friends; on Facebook, I’ll occasionally open up the comment threads to see what people are saying. The phrase I see the most is: “So sorry for your loss.”

I am compelled to write this post because in two instances, I saw this phrase so many times, it stuck with me. Everyone says the same thing, more or less. What can one really say in such a sad situation? Yet, I felt as if something is missing. I know there are some sites and apps out there that anticipated this social media need, but I haven’t seen any in the wild at work. I recall 1000memories was acquired by, which makes sense.

So, the question I pose is – are we left to just tweets and short comments on Facebook that mostly say “so sorry for your loss”? Is that all the grieving want? Does it make them feel good? Is there anything more we can really say or do? Facebook is just 10 years old and I don’t see it going away anytime soon. There’s tons of debate and rules around what happens to a user’s data when they pass away, but what about an online memorial? Will people be able to attend an Irish Wake of an old friend via virtual reality?

“So sorry for your loss” seems too easy, too short, often devoid of meaning. There must be something better out there, or to be built, something that can be collaborative and last forever. I’d love to hear your opinion about this, to the extent you can share or feel like sharing.

“The [Fleeting] Knowledge”

Of all the places in the world where Uber really gets under the skin of others, London takes the cake. Why it does so warrants more examination. In London, cabbies are required to master the old city’s streets, all the nooks and crannies, if you will. It can years (and lots of pounds and sterling) to obtain this knowledge.

In fact, that’s what London cabbies call it: “The Knowledge.”

Now, that knowledge is under attack. Cabbies were tested so as to have maps and turn-by-turn navigation capabilities in their brains. Each cabbie, in turn, had to do the hard work of writing this information to each of their “disks.” While the streets are static, the navigation is dynamic. Then, companies like Google (and others) started brings maps online, followed by directory services (search) and turn-by-turn directions (navigation). But, up to a point, the convergence of those technologies only disrupted the old external GPS providers like Garmin, TomTom, and so forth.

Mobile, of course, changes everything. Mobile now places “The Knowledge” in everyone’s hands, and by proxy, in everyone’s brains. You can see why London cabbies are worried. I heard one on the radio this past weekend. He doesn’t like Uber. He feels that it’s unfair that his knowledge is now obsolete, or at least commoditized. He feels part of being a cab driver is maintaining a character of person that is higher, though I’m sure cuddly behavior exhibited by cabbies varies on a case-by-case basis. In a matter of 15 years, Google mapped the world, and Apple put those maps in the hands of everyone, complete with static street knowledge and powered by the most dynamic, real-time system consumers have ever enjoyed.

The result is what we see on the news and on the streets of London. Up to a point, human knowledge created a moat for some to earn a steady living. But along the way, machines maps combined with cloud computing on handheld devices created a mechanism to democratize and distribute (in real time) the knowledge that had been trapped inside the heads of a few select London cabbies.

It’s not just cabbies in London who hold “The Knowledge.” Many people in other jobs believe they worked hard to accumulate “The Knowledge” in their own fields, but many of them, too, will experience something akin to what these London cabbies are feeling. Think of mobile developers who have been grinding out cycles of Obj-C only now to have to learn Swift to write apps again. Think of those who report and analyze the tech and startup landscape for a living now having to compete with forums and blogs maintained by those who are in practicing their craft in the arena. Think of the venture capitalists who were trained in their craft for decades and over funds to manage large sums of money, only now to see upstarts leveraging platforms like AngelList and resources like Mattermark to invest smaller amounts earlier into startups.

What was once difficult (and costly) to obtain is now more likely to be commoditized, provided for free, and distributed at the touch of a fingertip or even before we know we need it. It happened to these cabbies in less than a decade. Keyhole (which became Google Maps) was founded in 2001 and acquired in 2004. And, it will happen to many others in different fields. This specific case was only really fueled by machine learning, cloud computing, and mobile networks. What happens when vehicles drive themselves? What about the block chain applied to supply chain management? What about the economic effects of 3-D printing on today’s manufacturing industry? Questions like these are never-ending, and, unfortunately, the answers are going to piss off a whole lot of people.

Sunday Conversation #10: Keith Rabois, Khosla Ventures (Round 3)

Welcome to the 10th Sunday Conversation. For this year, Rabois and I sit down once every 2-3 months and talk about a variety of topics. In this installment, there are five separate videos below where we discuss Bitcoin (a second time, now that things have cooled off), the many drivers behind valuations we see today, new types of strategic and late stage investors, additional details on his company, Homerun, and more. Note that full audio of the conversation is at the bottom, via SoundCloud. ♦

Part I, Revisiting Bitcoin (6:56). Late last year, when Rabois and I discussed Bitcoin’s potential, he made some strong statements about the currency’s viability in the United States, but also mentioned two important caveats — that Bitcoin could very well grow first in regions of the world where the rule of law is weak, and that the underlying protocol warrants deeper examination. We discuss this and more about the regulations around currency, the idea of stored value, and what investors look for in products that leverage the block chain.


Part II, From Disbelief To Belief In Stripe (7:43). Years ago, Rabois infamously tweeted his opinion of Stripe. “It turned out to be an expensive mistake.” In this words, Rabois offers the back story of how he came to eventually invest in Stripe, a breakout company, and from here, we talk about how investors maintain relationships and even invest after saying “no” initially. We also discuss the payments landscape in general, and in particular, what Facebook may have up its sleeves — this conversation was recorded before PayPal’s David Marcus left to join Facebook.


Part III, Dissecting Valuations (10:03). This segment is more of a quick survey about how valuations come together, how non-VC investors think about valuations (strategics, hedge funds, mutual funds, etc.), and the challenges and opportunities facing entrepreneurs who may have a choice of different sources of capital.


Part IV, OpenDoor, Part 1: The Product And Market (5:24). Rabois discusses his new company, OpenDoor. We explore the market, the product, and how these types of solutions could help the overall economy.


Part V, OpenDoor, Part 2: Incubating Companies As A VC (4:51). Here, we discuss how VCs can potentially incubate companies while also being full-time investors, sharing precedent with a few other well known investors who have gone on to fund companies such as Palantir and Workday. VCs who can incubate companies theoretically have a better shot of controlling and preserving equity stakes and can leverage their networks more efficiently.


A special thanks to the team at Scaffold Labs for sponsoring the Sunday Conversation series on Haywire. Scaffold Labs is a boutique technology advisory firm based in Silicon Valley which designs and builds scientific and predictable talent acquisition programs that helps technology startups hire great people. Scaffold Labs has previously partnered with companies such as Cloudera, Appirio, and Nimble Storage, among others. For more information, please visit

“Write Your Own Story”

Every week, there is someone or some entity in the tech world that had a story written about them that as just a bit off-message. It may not appear to be much to the audience, but it happens to strike a deep chord with the folks who are mentioned, who provided interviews, and so forth. Folks like to beat up on press for getting a story wrong, or for reporting it incorrectly (in their eyes), or for mischaracterizing their contribution to the overall subject. Earlier this week, when it happened yet again, I instinctively tweeted: “Write your own story.”

The original sin here is clear: People and organizations outsource their stories. Instead, people should write their own stories.

Writing your own story is hard. This applies to individuals, to companies, to firms, and everything in between. First, it can come off to others that you’re only talking about what’s central to you or your colleagues, etc. Having someone else write or say something may come off as more real. Maybe. Or maybe it strokes the ego. Second, the finished product is likely not part of the “official record” like it would be if it ended up written about by the NYT, or by Wired, or by Re/code, etc. Third, it can be hard to build up an audience. It takes time, effort, mistakes, pissing off some people. And, fourth, you have to own it — a misstep, a typewritten slip of the tongue can be screenshot, bookmarked, and saved for eternity until someone wants to dig it up and revisit your fumble.

There’s another slightly more subtle reason why one should write their own story — the decline of the influence held by reporters, journalists, and writers. Now, of course, some publications and writers will not only maintain their authority, they could actually boost it. But, for the overwhelming majority of them, whatever inherited influence they wielded before is eroding, and eroding fast. Stories on most topics are virtually indistinguishable from others. People will grow less willing to link out to other sites, especially how difficult it is to navigate sites on the mobile web or insider other reader apps. Additionally, the audience often expects to be able to directly engage with the writer of a story — on very public tech blogs or formal publications, those forums can degrade quickly or be quiet enough to hear all of the crickets.

Writing one’s own story isn’t just about controlling a message — if done well, it’s also an invitation for another person to comment, disagree, or help out. Writing a story isn’t about text or prose — it could be pictures, or Vines, or a collection of things. This actually gets to the heart of the problem some create and the opportunity others embrace. The opportunity is that each interaction, no matter which kind, is a way to engage and reengage a person in the audience, and over time, they become loyal, bring in others, and so forth. People fundamentally want to be a part of something, and those feelings are shifting more to the online world. On the flip side, the problem is that many people or organizations with big brands, big brand names, and “famous” people use online media to broadcast their message — they talk “to” their audiences. Yet, the opportunity, what what readers or watchers want is to be part of a conversation. They want to feel that they, too, are being heard. That’s the way I believe online attention has been shifting, and I have no reason to believe the pendulum will swing back in the other direction any time soon.

Haywire is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2014 Semil Shah.

“I write this not for the many, but for you; each of us is enough of an audience for the other.”— Epicurus