New Series: Blogging On The Business Within The Bitcoin Blockchain

In the back of my head, I’ve been wanting to write a series on the blockchain. Every Sunday, I write a weekly column on mobile for TechCrunch. I’ll continue to do this, and mobile is so big and so mainstream (and moving so fast), that this cadence helps me stay on top of it all. Or, at least try to. For Bitcoin, the motivation is both personal and a bit different. I’ll write the series here, on my blog (Haywire), and I won’t be on any schedule, so that will be nice. I’d mentioned to friends in NYC this week that I wanted to do this, and with many of them also invested in the BTC ecosystem and close to the financial services world, the response was very positive, more than I thought it would be.

At a high-level, the goal of doing this is mostly selfish — I’m fortunate to be exposed to some very sharp BTC founders and engineers, and have been monitoring the space actively for over a year now. That said, there are true limitations on what a non-technical person like me can come to understand about the intricacies of the network. I won’t go into that territory. Rather, I will try to look at the business implications and opportunities presented by the blockchain. This is something I can both understand and will be of use (I believe) to the tech community more broadly. I’ll explain why.

Almost over a year ago now, when I started my fund. I made my first investment in what is now Hired. For investment #2, I was interested in Bitcoin, but not for reasons you’d assume. At that time, I started buying individual Bitcoins, and one of the Haystack LPs even suggested that I take a portion of the total fund and invest it directly in BTC. I elected not to do that (potentially reckless), but the LP was right…I would’ve returned the fund and more in a few months and then been playing with house money. Additionally, I thought of BTC as a currency, and I asked for an intro to a specific company based on those grounds and I should’ve been more prepared and aggressive about investing in them, but I was blind to the opportunity. My mistake. With history in the rearview mirror, it turns out I was on the right track, I was just facing the wrong direction. Underneath the currency of Bitcoin was something more powerful, and I had to make this mistake in order to understand it.

After my mistake and short-sightedness, I began reading about BTC and investing in companies in the space, in part as a way to expose myself to such interesting people and technologies. I’ve read so much on Bitcoin, but it isn’t clearly mapped in my head, so that means I need to write about it. I need to write to bring some order to the disorganized chaos that is the BTC world that swirls around my head. Because I have access to some interesting companies in the ecosystem as a small investor, like Gyft, Gliph, Vaurum Labs, and most recently, BlockScore, I’m going to try to combine my ability to put some of this in plain(er) language with their collective insights into the blockchain.

What I’ve noticed is that there are quite a few people who are technical by background and in the business of being on top of technology trends who don’t yet fully grasp the transformative power of what this protocol and blockchain can do. While nothing is certain in this world, the most basic way to think about the protocol and corresponding blockchain is that it presents yet another way for computers to communicate with the Internet, with the caveat that newer systems (if built correctly) on the blockchain could survive (and thrive) without a central authority, which in turn opens the window to an entire Pandora’s box of possibilities. It is precisely these possibilities, from the POV of a founder, investor, business, and startup, that I will seek to decipher and then share with you all in the simplest way I can. Thanks in advance for your ideas and guidance. Again, I want to underscore that this effort is mainly for me to finally internalize this complex new opportunity. There will be mistakes and corrections needed, so if you felt compelled to share those as we go along, I’d be most grateful.

One Tactical Path Into Working On Product

I don’t know why, but I get this question a lot: “How do you get into a product role?” Well…

I am not the most-qualified person to answer this, yet I’m receiving this inquiry now about 4-5x per week, so I’ll offer my two cents on what I’d do:

  1. First, find a product, or few products, that you truly love. True love means that you use them daily, or at least 3-4x per week.
  2. Start taking notes on each product, especially the elements you love and the elements that frustrate you and/or you’d change.
  3. Start collecting feedback from other people outside the company that makes the product, and try to record it in some structured fashion. For instance, this means going through how others onboard in the app, what pieces may be broken, or confusing, and so forth.
  4. Unify this information and take it to the company, so that you can structure your conversation (or interview) with them around the product. This is critical because it will help differentiate you from others who just want a job, it will help filter out companies or people that don’t value this kind of engagement, and you’ll learn through the process, even if you don’t get the first or second gig.

Ultimately, the reason #4 is important is because it sets the tone for a conversation that is not about you or what you want, or about the company or the person you’re talking — it’s about the product. In that discussion, if you can’t show a mix of enthusiasm and depth about digging into the specifics (even just from a user’s perspective), it means you need to do more investigation. I was able to shortcut this because I had the fortune of being at a venture firm for six months and invited mobile founders to come in and pitch all day, nearly every day. Without that, there’s no way I would’ve been able to talk to the Swell folks about radio and podcasts, and to start building a relationship with them around product feedback. That’s how I’d answer the question, but take this with a grain of salt. Good luck!

Thank You, NYC, From 35k Feet

I’m on the plane early headed back to SFO, and now that I’ve shifted my airline loyalty from United to Virgin America, treating myself to some WiFi while the seat next to me is unoccupied. This was a very quick trip to NYC. I wish it was longer but it’s hard to be away from a certain little critter at home. As I’m half awake and preparing to dig back into email on this flight, I can’t help but reflect on how much fun I had on this trip to NYC. For the past few years when I visited NYC, it was always around a holiday or during some rushed event. This time, my goal was just to hang out with a few people and enjoy myself, hang out with family, and have a bit of time to myself. What I can’t get over is just how open and inviting everyone was in NYC. I used to live in NYC years ago, but was in a different world. So, I’m always comfortable in NYC and on the subways (but not super-crowded areas), but on this trip, all of my friends went out of their way to accommodate me and make me feel welcomed, almost as if I was going home again.

In no particular order, thanks to David and all the entrepreneurs from the Columbia network for our breakfast meeting earlier this week; a big thanks to Shai for putting together a big interactive mobile meetup with Steve, Sarah, and Jordan, and thanks to Ryan, Chris, and many more for attending and participating (aside: here’s a terrific, detailed summary post on the event by Cezary Pietrzak, good details for mobile founders in here); was great to just hang out with Zach, Albert, Andy, and Brian, and to Steve for bringing even more great people into the fold last night for drinks — I had a blast, and I’m already planning my next trip to NYC in my head. Thanks for making me feel like it was home.

UberRUSH Raises Three Critical Questions For The Future Of Mobile On-Demand Services


Last week, my column discussed how on-demand mobile services — Tap Your Phone, Get Stuff — are ripe for venture capital investment. In the seven days that have passed, more startups in this category have been handsomely funded by some of the best investors in the world. And, to cap off the week, the leader in this category, Uber, announced UberRUSH, its local courier service. After years of savvy, brilliant PR campaigns to deliver ice cream via old-school ice cream trucks, Christmas trees, kittens and cupcakes, and most recently, the ability for Silicon Valley entrepreneurs to hail a black car and directly pitch some of the partners at Google Ventures for possible investment, Uber has finally signaled (publicly) that it’s a company that its ambitions are much broader than just transportation. For a mobile company on a roll like Uber, it is a captivating move, yet also raises critical questions related to other on-demand startups, their specific business and operational models, and ultimately, how consumers may behave in the future.

There is huge potential locked inside the “Uber” brand. Just like Google wants us to visit its home page, enter a term, and then leave, Uber wants people around the world to open its app, tap a few buttons, and then leave the app, get in a car, and go on with life. While the Bay Area, New York, and other select cities around the country host a slew of mobile on-demand service startups, Uber is the one mobile consumer brand which has painstakingly carved out great geographical penetration. On top of this, Uber’s daily active use case means people are using the times multiple times per week, if not per day, meaning they could leverage that consumer attention for other offerings. With RUSH, smartly, they elected for a more business-focused solution, extending their expertise into a naturally adjacent use case which occurs in every city worldwide and is often, like cabs, run by smaller companies with outdated networks.

Let us see how RUSH evolves. It will take time. And while I wouldn’t bet against Uber on anything, there may some underestimation of just how hard this kind of horizontal expansion can be. While we can certainly envision opening the Uber mobile app in five years and seeing a menu of choices beyond cars, making those additional services a reality is excruciating work and could take years to form. Lucky for Uber, it has time, money, and the brand to make it happen.

In the meantime, the introduction of RUSH raises large questions. It’s too early to what will happen and know what the answers will be, so in the meantime, we can debate what path other local service models powered by mobile may do to keep things competitive. Here are the three big questions triggered by Uber’s expansion into RUSH:

First, from the perspective of business and operations, should various mobile on-demand services remain verticalized and standalone, or does it make more sense to consolidate? It might be seductive to assume, in the name of efficiency, that it will make the most sense to consolidate these mobile on-demand services, but the reality is that each of the growing services — for grocery, for deliveries, and so forth — run on different business and operational models.

Second, are all mobile on-demand services created equally? After Uber, what do the gross margins of other mobile on-demand services look like, and given those other offerings, how does one think about ranking the opportunity ahead of each one? RUSH makes a great deal of sense to me because it already happens ad-hoc in every city and extends Uber’s offering to a clear business use case, but it’s unclear what they’d offer next.

And, third, perhaps the most critical question: Will the consumer masses prefer to have all of these types of services under one umbrella, or would consumers prefer more choice within verticals? All the strategy whiteboarding in the world won’t be able to predict the answer to this question, and that, combined with the ripe funding environment for such businesses, is a very good thing for consumers, for those looking for jobs, and the entrepreneurs who may just uncover the next great mobile on-demand service.

Photo Credit: Francisco Anzola “Hermes” / Creative Commons Flickr

The Precise Location Of The Downturn In Mobile

Like many of you, I read every blog written by Chris Dixon and Fred Wilson. In the last 24 hours, they’ve both written posts which nicely summarize the problem in investing in consumer mobile apps, and also discuss the implications associated with them. Given my interest in mobile (both in work and investing), I wanted to unpack their arguments a bit, and also suggest a slightly modified definition of *what* is in a downturn mode in mobile.

Chris Dixon, implications are serious for investors. [post] Dixon asserts “new mobile incumbents” will have outsized power, making distribution — which is already hard — even harder for upstarts, that the mobile gatekeepers show little incentive to loosen their grip, and it could even result in blocking new frontiers like Bitcoin-related apps. To take it a step further, Fred Wilson dubs it “The Mobile Downturn.” [post]

From an investment perspective, it’s important to keep in mind that these statements are very valid in the context of venture capital and returns. What I’ve observed in mobile technology is that “mobile” can mean different things to different people, and it’s important to define the terms up front so as to limit any confusion. Dixon and Wilson are likely referring to consumer mobile applications in their critiques, which are valid — even most of the larger funds have elected to sit back and wait to see what breaks out on consumer mobile and they paying up to invest into growth versus trying to predict what will be the signal in a noisy app market. I have been trying to write here and on my Sunday column that for consumer mobile, it’s usually one of four categories that has a chance to win — games, apps leveraging the camera, network effect products, and online-offline services.

So, I think Wilson is right about a “downturn” in early-stage consumer mobile apps. The scale possible (as exemplified by Whatsapp) is real, yet achieving that scale or anything close to it — which is a requirement of institutional venture capital — is getting harder for all the reasons Dixon rightly pointed out. The end result in the market is that there are lots of mobile startups that end up as acqui-hires or small cap exits and then a few in the billion-dollar+ plus range, and some out of orbit. The grass can be so green on the other side that people (and investors) have flooded the market with both money and apps — a trend Facebook (and soon Twitter) is capitalizing on all the way to the bank.

All this said, there are, of course, many other areas of mobile that aren’t effected in this way. Think of middleware companies which help mobile developers optimize integration processes, or development cycles, or streamline SDKs. Or, think of items that can extend from the phone (usually through hardware) that may become a new wave, though requires a lot of money to compete in. Down to the hardware level, just think about how much innovation Apple is cramming into their next generation of iPhones with M7, TouchID, and Beacons…we are literally in the first inning of this specific game around these new sensors.

The business model of venture capital is to time investments ahead of the market such that at least one (or hopefully more than one) deliver the outsized return to create that grand slam and/or to return the fund with high performance. In this context, a “downturn” in consumer mobile could be perceived as something where some investors view the space as “mature” in the sense that breakout opportunities are potentially constricted. In those instances, as he writes, venture capital will seek higher beta outcomes, especially in places that don’t have gatekeepers like Google and Apple. However, this is not to say that mobile on the whole is in a “downturn” — it’s just the consumer application side, specifically those apps which are not in one of those four categories listed above. Of course, consumer mobile apps get a LOT of attention, so maybe this is the beginning of the correction the market needs in order to improve its vision about both the possibilities and the challenges ahead. While Apple and Google control so much of this right now, things could change in the future (I don’t know how), and distribution channels for consumer apps may open up again.

Homescreens And Lockscreens: Cover, Aviate, And Facebook Home

Cover Screen Android

This morning, Cover (maker of an intelligent cover screen for Android phones) was acquired by Twitter. Terms weren’t disclosed. Earlier in 2014, Yahoo acquired Aviate, an intelligent home screen for Android phones — again, terms weren’t disclosed. All of this after Facebook launched “Home,” an ambitious idea which may have been a bit ahead of its time. With Android, the customizability of the mobile canvas has attracted the interest of a range of creative developers and larger technology companies, each one trying to figure out what novel hook they can leverage inside Android, one of the world’s most important technology platforms.

A company like Facebook is such an outlier, they can conceive of a product like “Home” and noodle on it for years. They have the distribution power and financial might to muscle their way onto phones, if they so choose. For a company like Yahoo!, which hasn’t been shy about using a mix of stock and cash to acquire mobile talent, a pick-up of Aviate gives them exposure to one of the next platform frontiers — yet, while they don’t own the distribution channel, they could theoretically drive lots of existing Yahoo! Mail users to Aviate. Let’s see.

With Cover, Twitter has purchased a great team and interesting asset. I’ve been using Cover for a few months now — what I love about it is that it harnesses implicit signals from how you use your phone to create a profile that intelligently presents with the user with a choice of 4-5 apps that you are likely to use at any given time. So, instead of having to swipe open your iPhone, unlock it, and then hunt and peck to get inside an app (or opening the phone via a push notification), Cover empowers the user to slide right into the app of choice. It’s quick, and it rewards true engagement of an app — not just deadpool downloads. If people open their phones about 150x per day, that’s actually meaningful seconds being saved. But, Cover doesn’t control their destiny entirely. They’d need to find distribution on Android, and we all know how hard mobile distribution is. So, now with Twitter, perhaps they can get distribution on Android somewhat similar to how Vine achieved lift-off enjoying Twitter’s distribution might.

All in all, while Android is a fun, malleable sandbox to play in, all of a sudden it’s in the news again. The myth of Android first — which is, of course, very true for early-stage technology startups. Or, how much power the two mobile platform gatekeepers truly wield — despite all the innovation possible on Android, an app like Cover, no matter how slick or innovative, isn’t likely to grow on its own, but rather be subsumed into a larger company which has its own channel. These are the realities of the bi-polar (in a geopolitical sense) mobile world we live in today — governed by two great powers, each with their own strengths and weaknesses, who make it easy for the next photosharing sensation to scale the charts, yet also make it quite difficult for users to discover the apps they may love. I don’t think that is intentional, by any means, but given how much we look at our phones, and given the growth of Android, and given Cover’s novel, simple, elegant solution, it’s telling that it’s best home now is another technology company. I think it’s a smart pickup, but everyone in mobile should be aware.

Tap Your Phone, Get Stuff (Including Funding)

Uber Economy by Schalf

Earlier this week, Steve Schlafman, an investor with RRE in New York City, created this imageabout all the various startups that offer consumers the ability to order goods and services directly from their phones. These startups — Uber is the prime example — turn our phones into remote controls. I call it, “tap your phone, get stuff.” And if we look at the list, we see many startups that have not only raised decent early-stage rounds of financing, but some of them are quite big. I’m writing this week’s column for people who want to build mobile businesses.

Right now, this seems to be the best category to start building in mobile today. I’ll explain why below. Briefly, it’s hard to breakout with a game, and less likely to be funded early. Photosharing and location-based apps need something special out of the gate to get funded, but then require explosive growth — I can already think of one seeded photosharing app that raised about $2 million from Valley angels, launched after a private beta, and is most certainly in a deadpool right now. Messaging apps or other apps with network effects (like marketplaces) could use a jolt, and I think we’ll see more rolling out soon, but those require time to build liquidity, especially across two mobile platforms. And, then, we have this category — “tap your phone, get stuff.” Out of the box, it just works.

Investors are voting with their dollars. Look at the image above. How many names you not only recognize, but how many of these apps you use. Investors want to fund these apps!

Investors are really only following consumer demand. Consumers want to be able to order stuff from their phone, quickly. They’ll often pay a premium (in-app) to do so.

The consumer-facing products for this class of apps doesn’t take as long to build. Apps in these categories are often more straight-forward. I do not mean to suggest this is all easy, but beyond a few screens and settings, consumers often don’t need more than that.

The consumer doesn’t need to spend much cognitive energy on these apps. Once a startup presents a service to the consumer, grabs their payment and credit card information, and accepts the promise of the user, most of the work to fulfill that service is done without the consumer knowing or seeing anything. Yes, I know you can see Ubers and Lyfts driving around on your phone, but most often, consumers leave the app in which they initiated the transaction and are kept up-to-date through a mix of text messages and/or push notifications.

Software here is mostly a back-of-the-house operation in these apps. On the backend, the best startups in this category build different forms of software to manage these logistics and keep things efficient. This usually includes systems that route requests to those who will fulfill them, crossing the web to mobile and back again.

Speaking of fulfilling requests, those are usually completed by humans enabled by software. Right now, with the bottom-third (or so) of the labor force in a mix of freelance, hourly, or contract employment (if employed at all), startups are competing for labor at a fierce rate. In the Bay Area, where many of these services start, it’s not unusual for companies in this category to have more consumer demand than they can handle, all constrained by the fact that they can’t hire enough drivers, enough skilled workers, and so forth. With mobile, thankfully, workers can work when they choose, and startups can access labor at the edge of the network, often at will.

These mobile apps often control the financial transaction. Businesses in this category that can use mobile to find equilibrium in the market for specific goods and services can be rewarded with decent margins, and if there’s enough market activity, those margins can add up quickly and snowball — just ask Uber and Lyft.

And, voila, there you have a mobile-first business. Now, I don’t mean to trivialize that each step of the process is easy, but given the conditions in mobile right now, these are the businesses that are working earlier in their life cycle, these are the businesses that consumers understand, want, and talk about with their friends, and these are the businesses that investors have figured out fast enough to open their checkbooks if they see things working in real life.

Yes, serious long-term questions persist. Will only a few special startups figure out how to optimize their local models and expand them geographically, like Uber masterfully has? Will all these swiss army knife services consolidate into a single brand eventually? With fewer barriers to entry, will competition fragment services geographically, stifle expansion, and ultimately reduce the size of the pie? In the face of such competition, what will keep consumers (and employees) loyal? But, in the long-term, we’re either all dead — or your mobile company will be. Either way, when it comes to mobile-first, and given the funding climate, I can’t think of a better category to launch in. As you see on Schalfman’s chart, many categories are crowded, so if you venture down this path, make sure to present a different kind of solution or different market. I know it seems crowded, but I’m convinced other non-obvious opportunities exist. If you see them, please do get in touch.

Concerned About Twitter, Concerned About Design

I am concerned about Twitter. I write this as someone who loves the service, but lately, I can’t say the same for the product. I know people lament about Twitter every three months, but it’s different when it’s coming from me — that’s because I literally filter the entire web through Twitter, and I have for the past six (6) years. I also tweet — a LOT. I’m closing in on 60,000 tweets. That means I’m “all-in.”

Yet, I’ve caught myself tweeting a variant of this line often lately: “I don’t use any native Twitter products.” That means, specifically, I do not use the mobile (iPhone and iPad) nor the website (Chrome browser) that Twitter produces in-house. Instead, I use TweetBot for all iOS, and on the web, I use TweetDeck in the browser, which I know Twitter HQ manages now, but still, it’s not normal, regular web-based Twitter.

There are myriad concerns about the company overall. I won’t go into all of them here, other than to suggest that while Wall Street and public investors push Twitter to grow their user base, I don’t think Twitter is a mainstream product in terms of absolute users — instead, I think Twitter should focus on extracting value from the users (like me) who are wholly addicted to the service. Sell me things, point me to apps I’ll buy, or tickets, or items. Allow me to pay for premium services and even ads. Anyway, back to native products…

The native products made by Twitter just don’t work for me, and I think they’re going to change even more as the company searches for growth. As a result, the visual design of the website, for instance, is nearly unworkable for me. For instance, if I search for a popular term, my feed consists of the following, in order: a promoted tweet, a random tweet related to the search term, a collage of 4-6 large photos, and then, after scrolling through an entire screen on my laptop, I then finally see what I’m looking for. That’s no bueno. On their native mobile apps, the sliding screens and buried functionality makes it hard for me to go through, not to mention that preloaded images, while annoying on the web, are really bad on an iPhone. If I come across two tweets with images, it can take me three phone-screen’s worth to get to the next non-image tweet. No bueno, tambien.

I don’t know what the solution is. I’d guess the simple answer is that, right now, the end result of the design just doesn’t work. An editor-in-chief, focused on design, might not be a bad idea.

Language And Leverage On Twitter

If you’re reading this, you know I tweet often…a lot. I’m approaching 60,000 tweets, after opening my twitter account in mid-2008. Despite the noise I create, twitter has been critically important for me to shape and test my ideas, to share my ideas with others, and to meet other people across networks interested in technology, startups, and investing. Recently, I found that I made a list — I know what you’re thinking, “Lists are silly.” They usually are, but this one seemed different. It was created by a startup called PeerIndex. They picked about 75,000 accounts in the space of technology, startups, and venture capital, and then monitored how all 75K accounts shared content and interacted with each other in order to find which accounts drove the most attention and influence. [Click here to see the full PeerIndex list and methodology.]

The list is below, and while I did come up on the list, I thought it was a better exercise to show how the top accounts stack up in terms of number of tweets and number of followers — note, the study did not take into account the number of followers a person has, so that anyone can move up (or down) on the list over time.

For me, that was the insight, that despite the noise I create on twitter, it is an important medium to participate in — it is through twitter that someone like me, with very limited experience, was able to learn, interact, and be a small part of the conversation with some of the most-respected minds in technology and investing on the medium that commands everyone’s attention today.

And, as someone who loves language and words, I wanted to list out the Top 10 accounts and briefly unpack the style in which each person uses this medium to their advantage. Naturally, nearly everyone on here is a current investor, analyst, writer (some all of the above), as most operators wouldn’t have the time to do this — Levie being the exception. As you’ll see, the styles are very different — of course, this isn’t a list of real “influence,” it’s only looking within twitter so it’s imperfect but fun nonetheless:

Aaron Levie (~2,700 tweets, 94,000 followers)
Levie has won twitter through humor, mixing the timeliness of pop culture news with a smart brand of nerd swagger. His tweets are so funny and/or insightful that they’re retweeted and favorited at a high rate each time. He focuses on broadcasting, using interesting images, and doesn’t engage in @replies or conversations.

Marc Andreessen (~12,000 tweets in less than 4 months, 96,000 followers)
Out of nowhere this year, Andreessen decided it was time to tweet. And, wow, he’s extremely active and engaged. He also replies to many and favorites tweets all the time, each time firing a signal to the creator as if to say “Marc Andreessen is listening.” He’s almost branded his signature “1/…, 2/….” tweetstorms (which are mini blog posts), and naturally, everyone pays attention to him because of his extremely high influence based on outstanding career contributions (Netscape, a16z, etc.).

Hunter Walk (~20,000 tweets, 61,000 followers)
Walk smartly mixes links to his site and firm (which contains his original content) with fast-paced, news-driven @replies with nearly everyone in the community. As Levie uses humor to cut through the noise, Walk uses transparency.

David McClure (~49,000 tweets, 207,000 followers)
McClure is high-volume, with brash tone, and lots of conversation. Oftentimes, it can feel as if he’s sharing his inner-most thoughts, fuck-ups, controversies, and all highs and lows with everyone. He’s also cultivated a truly global audience through his global firm, 500 Startups, which helps him have a broader network (geographically speaking), which help him spread his ideas. You could say McClure wears his heart on his tweets.

Benedict Evans (45,000 tweets, 31,000 followers)
Evans is a long–time mobile thinker, consultant, strategist. He’s expert at thinking about the mobile technology landscape, so good that he was discovered by Andy Weissman, and investor at USV in NYC. In turn, Fred Wilson wrote about Evans regularly, and Evans grew his tech readership, and has now been hired by a16z. Evans uses twitter to think out loud, as if he’s forming his next blog post in his head, a deeply analytical feed which engages selectively.

Om Malik (~37,000 tweets, 1.38M followers)
Malik is the experienced, old-school journalist, gumshoe, reporter, and now investor, a long-time tweeter with a big audience, the former head of an influential blog and series of conferences around the world. His feed is mainly about curation, about using his experience to signal what is actually important in a noisy world.

Paul Graham (~1,400 tweets, 161,000 followers)
Perhaps one of the truly most influential people in the space, online and everywhere else. Anything PG tweets or links to is analyzed. He has generated a movement and uses twitter to curate a few things, share notes about companies in YC that are doing well, or use his influence to share thoughts about the ecosystem, especially through his blog.

Brad Feld (~25,400 tweets, 168,000 followers)
Feld is an OG entrepreneur and investor, and is very active on twitter, sharing links to his ideas, books, blogs, and more. He’s built up an engaged audience online, but also offline through his evangelism of the power of offline community building, which in turn translates into more attention online.

Fred Wilson (10,300 tweets, 327,000 followers)
Again, OG investor and tweeter, one of the original investors in twitter and a board member there. Like Paul Graham, a must read for everyone in the industry, though he doesn’t tweet often, choosing instead to link to his posts daily — and less of a broadcaster.

[no title]

I don’t know why, but two unrelated ideas/themes have been on my mind…no title to this post, because I can’t think of a good one…

The first is about “entrepreneurial journeys.” I know, that is a cheesy term. Believe me, I cringe writing it. Anyway, semantics aside, this term came up in an interesting conversation I had with a close friend. We were discussing how we both haven’t seen a close mutual friend recently. This friend is building his own company, his first time in a founding/CEO role. The conversation ended with something like this: “Well, Semil, I guess he’s on an entrepreneurial journey.” I don’t know why, but that phrase has stuck in my head. It’s slightly different than saying “he’s building a company,” or “he’s really busy,” or “entrepreneurship is all-consuming.” As I’ve been thinking on this, it struck me that everyone in and around technology startups are on journeys of different speeds, directions, and arcs. Even though so many of the people we know best who are all crammed living in proximity to each other can actually drift apart because the trajectory of the journeys each person can be very different. It’s like a diaspora, of sorts, excepts the physical distances traveled aren’t great — but in the mind, those distances can feel vast.

Now, next, unrelated…

The second thing that’s been on my mind is about the word “empathy,” particularly in the context of what I hear (and read)  founders discuss they want in their investors. Disclaimer, I’m no expert here and have limited experience. Caveat out of the way, it seems most people equate empathy with having been a founder/CEO of a startup before. Unfortunately, I’m not sure that’s true in practice. In the dictionary (Merriam-Webster), “empathy” is defined as the feeling that one can “understand and share another person’s experiences and emotions.” The ability to share understanding is important, but longer-term investments seem more like business partnership, and the good ones seem to be more driven by an honest alignment of interests among both parties versus whether one side is empathetic or not. Empathy may help in the sales process of investing, when an investor courts a founder. And if empathy is important (to a point, right?), it can be gained in different ways in and around startups. Some investors with deep operating experience (but no founding experience) can breed their own style of empathy; some investors without any real experience whatsoever can build empathy as they continue to invest; some people pick up empathy by doing something hard and getting their butts kicked, repeatedly, and surviving; and some investors who have been founders even more than once may not be empathetic as investors. On a different plane, empathy can also be gleaned from trying, difficult experiences.

And while empathy may work up to a certain stage or maturation of a company, after a while it may diminish in utility — think, for instance, of entrepreneurs who have shepherded their company through a Series A round only to be stuck without Series B offers — at that point, “empathy” doesn’t really creep into those conversations. Of course, people are human about those discussions, and some of those discussions can be hard, but empathy only goes so far. Empathy is something folks to should ideally show to everyone — not just investors in a sales process with founders, or founders managing their key employees. Empathy is cheap to deploy. It’s quite cost-effective. What isn’t cheap is a partnership where parties’ interests are aligned. Sometimes that means difficult conversations. Sometimes empathy may take a back seat to the truth — even a harsher truth the investor may need to hear from a founder. Anyway, I know everyone talks about “empathy” and I know it’s generally important on an interpersonal level (way beyond startups), but it has lately struck me as an abstract word people think they want or need, perhaps distorting reality — a reality we all need — as a cost.

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