Earlier today, I caught up with an old friend and we were talking about the current state global affairs, and all the political change sweeping through different parts of the world. Driving into work, my mind started to wander about all of these movements, and then I started to think about companies — specifically, startups — that were in fact bigger than just a company, but were actually movements. So, I blasted out a few tweets about startups that, to me, seemed like they were movements. As I learned quickly, the word “movements” means different things to different people, and passionately so. (Scroll to the bottom for a custom timeline of my tweets and some select replies.)
While I have my own opinion of what constitutes a startup movement, upon reflection, I don’t think it’s my place to define what one is for everyone else. That’s because movements exist in the mind of the beholder. Some movements are outside of technology companies and startups. Some people truly believe their fledgling idea is creating a movement, and I am certainly not the one to say “No, it is not.” Who knows? What’s clear, though, is that a movement — as a word — describes something we don’t discuss often enough as it relates to startups. For example, it’s one thing to say that Coinbase is growing — it’s entirely another thing to assert that Coinbase is helping lead a movement, a movement that’s bigger than its own company, a movement that is creating other companies with real revenues and drawing in the curiosity and time of some of the most creative computer scientists in the world. What’s nice about a movement is that it doesn’t need much to grow. It doesn’t need to be hacked that much, because it has its own mass, its own density, its own vector, all of which create a kinetic energy that attracts the right people to its mission and makes things better for a greater number of people.
Coinbase (and other companies) are part of a movement because they enable transactions that were once not easily executed and because the helps provide financial services to the once-underbanked. Kickstarter is a movement because it created a platform that allowed everyday people to transform into investors of other peoples’ projects to help make ideas turn into reality. Etsy is a movement because it created a platform for people who make things to earn a living in a vibrant marketplace and reach more customers. Airbnb and Couchsurfing are movements because people need extra income, people want to travel differently and make new friends, and consumers want more choice in their styles of travel. Facebook is a movement that started by connecting people 1:1; then Twitter became a movement connecting 1:many; and then Snapchat became a movement by people rejection the notion of having their images appear on Facebook and Twitter and other parts of the web. Oculus Rift is a movement, attracting some of the best talent in gaming and computer vision to bring the next level of virtual reality not just to gaming, but potentially other applications. Shapeways and MakerBot are movements that draw in mechanical engineers and designers to create hardware, software, and materials for people — like those on Etsy and Kickstarter — to create their own things. Companies like Tesla and SpaceX are movements because they’re ushering in new modes of transport never seen before, modes that could only occur through private innovation, and ones that will attract scientists and engineers and designers who may have been stuck in universities and other government agencies. Wealthfront feels like it could be a movement as the next generation of middle to high net worth individuals choose to trust their personal finances to an algorithm over humans. AngelList has already kickstarted a movement toward the democratization of investing in startups, and many “crowd” based companies have leveraged the power of groups to finance projects in nontraditional ways. There are also movements within enterprise or developer environments, such as Heroku, Docker, Vagrant, and GitHub, among others.
I could go on and on. Startup movements are rare. We all recognize the names above today. But, perhaps we didn’t in the early days. Yet now, very little can stop them. They have their own momentum. ‘What will be the next great movements in the startup world”? It’s a great question, and I don’t know the answer.
I’m probably going to keep writing about the ripples from the Whatsapp deal. Lots going on here…
It’s no secret that many entrepreneurs and investors are seduced by the specter of network effects. Walk around any young company fine-tuning their product to fit their market or any early-stage investment committee meeting, and inevitably, network effects will be discussed. “How do we tweak the product to ignite a network effect?” “They’ve built a great product, but can it find a network effect to grow?” On the web, the right answers to these questions have created enduring global companies and handsomely lined many pockets. On mobile, we all knew — intuitively— that this would be the case, but perhaps we didn’t have a good sense of where the floor would be or how high the ceiling could rise. Now, as “The WhatsApp Effect” takes root, the picture is beginning to get clearer, and the result will impact early-stage tech entrepreneurship moving forward.
There are different kinds of network effects, but as it pertains to mobile software, this specific network effect is not just about how services improve as more people join — it’s also about the speed with which mobile software can proliferate and spread, with minimal friction, through various networks. Speed is critical, because quite often, these races can end in winner-take-all outcomes, and the minimization of friction is critical because it not only increases speed, but potentially reduces capital requirements to get there. When it comes to early-stage mobile products and the competitive environment to fund them (to a point), these elements are not only critical — they’re seductive. Mobile valuations will continue to rise, technical and design talent will continue to shift over to the mobile platform, more and more apps will build native messaging backbones into their products, and the competition for a mobile user’s attention and credit card will get even more intense.
This is “The WhatsApp Effect.”
We all now see the heights to which mobile software values can reach, with hits like Instagram, Angry Birds (and more recently, Flappy Birds), Uber, and now WhatsApp, and now more and more people worldwide are going to attack these categories and emergent opportunities in mobile gaming, transportation, payments, m-commerce, and much more. The opportunity here is so big, it’s like a “Voltron of Network Effects,” where mobile devices, mobile platforms, social graphs, address books, and applications themselves form a system where the whole is greater than the sum of the parts. It’s not always classy to admit, but the price of the WhatsApp deal matters greatly. Yes, the $19b number is better analyzed as what this particular product was worth to its acquirer, not the broader market, but like a fancy piece of real estate, market price is ultimately what the highest bidder is willing to pay. it doesn’t have to “make sense” to the rest of us.
In a global economy where capital is concentrated among a few, and where a good portion of that capital seeks high-growth opportunities, we can expect more and more activity now that investors of all stripes — from early-stage tech investors all the way to retail investors — see the allure of mobile software and the quick, stratospheric returns it can generate. And, as it becomes harder to identify who the winners in mobile will be, and as those winners require less capital to begin and maintain operations, the competition to invest in potential breakouts and winners will only intensify. We’ve already seen a bit of this with Snapchat going from venture capital to hedge funds in the span of a calendar year. The creator of Flappy Birds could’ve raked in a huge bounty and only paid a toll to device-makers for the access to the user network — he had no need for private investment. This is just the beginning.
Dating all the way back to the original telephone all the way up to influential global companies like Microsoft, Google, Facebook, LinkedIn, and Twitter, among others, the dream of network effects is to create value for users by adding more users to the service. These products often empower users to send and receive packets of information, in various forms, from something as complex to private payment keys to as simple as a text message inside WhatsApp. Eventually, networks can grow so large as to confer lock-in, where the software traps the user into its experience and creates a barrier to entry for competitors. This is the dream for mobile app makers, too, to harness the combination of these massive network effects and have their software spread faster than has ever been possible.
However, we should remain cautious, too — the recent $19b representation of what mobile network effects can generate will intensify interest in the category, but mobile discovery and distribution still present serious hurdles, and while the number of mobile users coming online will continue to rise, these users’ hours per day will not increase. I don’t mean to imply there won’t be terrific opportunities for SaaS products or other infrastructure or enterprise IT products and services, but when it comes to reaching consumers en masse and looping them into a network effect product, the market has confirmed what we’veknown all along — that we are all building and investing into a platform that can reach heights we may have never seen before. That, to me, is “The WhatsApp Effect,” and there’s no turning back now.
It’s rare for one of my weekly columns to go viral, but this one did. Would love to hear your reactions…
Silicon Valley and the tech world at large are filled with a variety of conventions. These conventions are now created, captured, and shared ad nauseam disguised as blog posts, tweets with links, and countless message boards. The benefit of such a canon is we all have access to a rich repository of knowledge — the cost, however, is we all, perhaps unwittingly, are exposed to the same suite of playbooks, which contain the same conventions, which could, if we’re not paying close attention, and especially when amplified in an echo chamber, trick us into believing a certain reality which, in turn, script our actions and lives down a path of predictability, or worse, mediocrity.
Like many of you, the entire story around WhatsApp’s acquisition this week has captivated my attention. It might be easy to quickly dismiss this whole event as an extreme outlier (which it is). Of course, this is a big outlier event, but that doesn’t mean it shouldn’t be examined. The reality is that this week’s news was like Haley’s Comet, a once-in-a-lifetime event where everyone who works in and around startups stopped what they were doing, went outside, and looked up at the sky to catch a glimpse of something they’d only read about online. In situations such as these, my mind scans back over all the “lessons” or conventional wisdom that swirls around the atmosphere, and the story of WhatsApp does call on us to examine and challenge (yet again) some of those conventions:
“Yahoo! doesn’t have talent.” For a variety of reasons, Yahoo! gets beaten up by the press and in social media. The company has problems and is working through them, but as a result, employees and alumni have kind of been a soft target. The two WhatsApp founders worked at Yahoo! They built a native mobile product at scale, across many mobile platforms, and assembled a team to build a complex, global telephony system.
“Companies like Facebook have the best talent.” One of the WhatsApp founders applied for a job at Facebook and was rejected. I’ve seen countless startups get star-eyed trying to recruit “so-and-so” from a big name company, but all that glitters isn’t always gold.
“The center of gravity for consumer products has moved north from the Valley to San Francisco.” Well, that’s largely true, but WhatsApp remained headquartered deep in Silicon Valley. They didn’t even have an office sign. Hidden from the city’s bright lights, the company didn’t seek out PR coverage or any of the other trappings in today’s startup lifestyle culture.
“The best founders are relatively young.” The WhatsApp founders were in their mid to late thirties.
“Mobile products should be delightful, beautiful.” I often shudder when I hear this refrain. Of course, apps should look nice, but at minimum, they should work to solve some problem or provide some service or entertainment. WhatsApp simply worked for people. It didn’t have fancy features. It solved a problem at scale, building products for the following platforms: iOS, Android, Blackberry, Windows Phone 7, Nokia, S40, Symbian S60, and others.
“Be mobile-first, build for iOS and Android.” The Whatsapp team took on the challenge of building products for all sorts of phones, many of which readers of this blog wouldn’t ever touch, even those running J2ME on older Nokia and Samsung handsets.
“Personal branding is important.” The WhatsApp founders did not have any personal brand. I would guess if 1,000 tech insiders were polled, less than 5% could’ve named the founders or anyone at the company.
“Preserve your startup’s equity.” In my opinion, many early-stage founders over-value the equity in their startups. Yes, a lot of sweat, blood, and tears go into starting even the smallest outfit, but an environment so competitive for products and so fragmented for talent, what was once conventional in terms of equity for early or key hires may now be outdated. Given this, I respect Zuckerberg’s aggressiveness to give up a really large chunk of Facebook to partner with WhatsApp, and to add one of WhatsApp’s founders to his Board of Directors. Instead of hoarding this equity, Zuckerberg realizes he must partner for the battles ahead.
“Don’t worry about making money, just grow big.” WhatsApp did both. Depending on what platform a user downloaded the app on, WhatsApp would charge them about $1 or, at times it was free — they also charged a $1/year subscription fee after the first year. WhatsApp was expensive to run, so it wasn’t breaking the bank in revenue, but they at least had cash flows, and one might conclude from this that such inflows helped them pace their operations and not get enamored, enveloped, and distracted by the pomp and circumstance of a modern-day fundraising process.
There are more conventions that were broken here. How about the fact that WhatsApp was a tiny company compared to their footprint, at only about 50 employees, mostly split between engineering and support? Or, how one of the Valley’s most successful venture firms — Sequoia — was quietly the major outside investor across a few funding rounds at the company, electing to not use their networks and celebrity to announce such deals or trumpet the company’s growth trajectories? Or, speaking of venture, how this particular VC firm missed the first wave of social networks, invested a large sum in the debacle known as Color, and then, in about three years’ time, turned their investment in WhatsApp into one of the great IRRs in the history of venture capital?
There are countless angles to examine, but the meta-point of this exercise is to use this rare, brilliant event to briefly hit the “pause” button and reexamine if we ourselves or our products or our companies are following a conventional path, one we’ve been told, or exposed to, or read somewhere.
I’m not suggesting we throw out all the rules and engage in chaos. But, it is a good time to reexamine them. Do we take these conventional biases into our work, into our lives? Do these conventions inform our recruiting strategies, our paths for monetization and/or growth, how we think about product design? It’s easy to start to believe something once you’ve heard it enough, or if it shows up in your Twitter feed often. It has to be true! Or, perhaps not…perhaps WhatsApp became a mega-outlier because it either consciously bucked or unwittingly ignored so many of the popular conventions we hear of today.
I wrote this in January 2013 — now will revisit the topic shortly, a year later, but worth reading how long ago a year seems…
When the iPhone launched in 2007, Jobs proclaimed when it came to phones, Apple was likely, at that time, five years ahead of the competition. Well, those five years are up, and all of a sudden, as if on cue, many of the Valley’s smartest technology minds and observers have begun to slowly split up their attention between their primary mobile devices (iPhones) and the most recent Samsung lines of Android phones. How will the growth of Android affect the priorities of developers, which mobile platforms they chose to launch on, and the monetization formula for hardware (with Samsung’s ability to capture value) and software (apps) in a state of flux?
There’s so much great analysis out there as to “Why?” and “How?” Android is gaining steam, so I won’t regurgitate all of that here. Either way you slice it, the typically iPhone-centric and iPhone-obsessed Valley is starting to pay more attention to the new Samsung Androids, everything from the tactile design to app performance and all things in between, include Android’s growth rate and projections. This isn’t to imply Android is on even par with iOS, but being “good enough” may be all that it needs given Google’s strategy so far.
To date, most mobile “app-first” successes have been born on the iPhone, the most notable including the likes of new media darlings Instagram, new marketplaces such as Uber, and apps with freemium business models such as Angry Birds. All of these apps were launched a few years ago and enjoyed tremendous growth as the iPhone improved with each new version. Then, at a point when these apps felt the core product was solidified (and after raising serious venture capital), the companies applied resources to build for Android and dramatically increase their engagement (and revenues) with an audience hungry for apps they were excluded from enjoying. During this evolution, Apple squeezed the lion’s share of hardware profits from this industry, and also helped iOS developers earn billions of dollars in their app store marketplace.
Now in 2013, people are starting to imagine the next five years of mobile, and it’s clear Google will have many things going for it. The number of Android handsets will be huge. Developers will be enamored by the size of the potential audience. Android is more “open” and may encourage a different style of app innovation that’s gated off from iOS. Of course, all is not rosy: It’s yet unknown how much money Android users will spend on apps and through app-actions, Android developers will need to make hard choices about developing for so many different types and sizes of devices in Android, and users may determine they want more consistent experiences across devices rather than ones that are skewed by Android. On top of this are the mega-unknowns, such as “What will Samsung do?” and “What to make of Google’s integration of Motorola?” and “How many Android devices run the latest OS updates?” Fun, indeed.
Finally, we must follow the money.
On devices, Apple continues to squeeze out almost every available inch of profit. This certainly won’t last forever, as reflected by recent corrections to Apple’s stock price to start 2013, though I suspect their stock will snap back to high levels soon given the company’s iPhone-based revenues alone (not including any other products or services) eclipses the total annual revenues of other major tech companies. Samsung will surely take more hardware profits as a percentage than they have to date, but we will have to wait and see just how much. When it comes to native services, Google is in a good position to monetize all types of search, either through their phone browser, voice control, maps, or anticipatory systems. I’ve heard Google knows a thing or two about how to monetize search.
And, what about the money around and within third-party apps? Historically, most of the profits here have been routed through iOS, with the parent taking a nice 30% cut. There’s no doubt we’re going to start to see Android-first apps being built at faster rates, increasing the percentage likelihood that an Android-first app goes mainstream. The device fragmentation will be a huge burden for individuals and smaller companies (though I’m starting to see super-innovative solutions around apps and operating systems, which I’ll touch on in another post), but larger companies with resources and growth (and investment) may be in a better position to apply resources to Android to capture the growth curves in adoption.
While it remains to be seen how dramatic this shift in devices may be — it’s way too early to tell, and I’m personally not giving up my iPhone until they pry it from my cold, dead hands — there’s no question the scale of Android, even with all the old devices and outdated software updates, will be at a scale. And, while it remains to be seen just how consistent an Android user’s willingness to run transactions within apps is, application developers, such as those creating new mobile-to-offline marketplaces, will likely be able to not only begin Android-first, but also extract revenues and profits once reserved for iOS.
Jobs was right (if not conservative) about his “five years ahead” statement in 2007, though my bias is iOS is still miles ahead of Android today. But, no doubt Android is growing in numbers and performing well on Samsung. I wonder what he would predict about the next five years if he were alive today. I’ve tried to lay out an analytical view of what could happen as audiences grow and simultaneously shift, but the Apple loved by Silicon Valley and Wall Street alike is probably looking for something entirely new, something we don’t even know about yet. Will it arrive from Cupertino? Google is flush with cash, operating at tremendous scale with room to grow, showing no signs of slowing down, and even the most iPhone-loyal folks around the Valley are starting to take notice and envision a future many of them couldn’t see five years ago.
It’s an annual tradition around technology startups and investing to bash MBAs. I don’t have a strong opinion on the matter because, as I’ll share below, I likely took the worst educational path given the choices I had. That said, expecting any non-technical people (MBA or not) to create new technologies and bring them to market is like expecting a father to be able to be impregnated and give birth to a child. The implication behind this criticism is that the venture capital market has a preference for investing in technical founders and fundamental technology.
Now, I didn’t go to business school, but I used to work for one, have taken many classes at one, and used to develop educational materials for four of them, as well. My wife has also worked directly for two business schools for the last eight years, so I know little something about the environments, the culture, the curriculum. While there’s much truth to the critique that non-technical MBAs seeking a business education as a path to entrepreneurship may not find acceptance easily in today’s culture of technology, it’s also not entirely certain that the next decades of disruptive company formation will necessarily require the type of technical skills espoused by the investors who either critique or defend the value of an MBA. Snapchat, for instance, is successful more because of its creators’ product vision and mobile software literacy versus the deep technical acumen many investors may covet. As technology becomes more pervasive and fully-steeped into mainstream culture, some of the exhaust of this engine will result in, as Andy Weissman artfully explains, “new stacks” for the development of new startups. If Andy is right, the founder archetype is going to get a lot flatter, well beyond entering in a silly debate about whether MBAs make good founders or not. (Please make sure to read Andy’s post, click here. It’s very good and provocative.)
What this debate triggered for me was the chance to reflect upon my own educational path. It’s a path that I’ve been privileged to go down (and one I never take for granted), yet I’d be lying if I said that it was a defensible choice to ignore certain subjects once I got to college. In high school, I had such a heavy dose of math and sciences that I quietly rebeled by focusing on the social sciences (broadly) in college and graduate school. I was privileged to finish up with calculus and physics requirements in high school (I also took a year of “computer aided design” if you can believe it!), and aside from chemistry (which I failed), the classes where I struggled the most — English, History, Political Science, Economics — is what I turned my focus to.
It wasn’t a conscious choice, but it happened. It’s now history. And, looking back on it, now given the world we live in, my choices weren’t wise. The best argument I’ve come across for an education that includes understanding even the basics of computer science is that those are not “technical” skills, but rather it’s about “literacy,” just like being able to read is important and how it’s important to be able to understand personal financial documents. That said, and not without plenty of struggle, I have somewhat managed to zig and zag my way around the technology startup world, though I wonder sometimes if I’m running on borrowed time. All of the noise in the chatter forced me to reflect on what I actually did study, and how a few teachers and classes made a truly deep impression on me, an impression that I carry with me every day, that seeps into my writing (blogs and Twitter), and helps inform how I interact with new people that I meet with, work with, invest with, and want to work with in the future. To come up with this list, which is intentionally short, I tried to think very deeply about what classes I still draw upon for guidance today, which lectures that still carry on in me today. Here’s what I distilled, five classes that I think about daily — I’ve also included some links to the corresponding syllabus, where available:
The Economic Strategies Of Nations, Bruce Scott
I’d heard about Scott’s class from many classmates who were taking healthy doses of macroeconomics classes. Scott’s thesis was to examine the economic strategies of nations with different political economies by looking at their macroeconomic balance sheets as if they were corporations. The key point he tried to drive home was to look at the percentage share of total gross domestic production of a country that goes to wages. As we went around the world, from democracies to autocratic regimes to quasi-states, it became clear that capitalism was the overarching system of political governance. What made this class even more special is the first lecture began in January 2008. Scott repeatedly criticized the U.S. economy at the time (he kept wondering why there was $45 trillion unaccounted for) and the political structure of the country which forced candidates to go to extremes in primaries where only certain people voted and how the Supreme Court was turning into a legislative arm of government. Most of what he predicted during these lectures actually came true, so I have to give him a lot of credit for reshaping my macroeconomic view of the world. One fun caveat — Scott had a small curmudgeonly streak, and the week before spring break, he randomly stopped his lecture and barked up to the folks in the back row of class and encouraged them to not only think about “Plan B” when they were drinking their martinis over the holiday, but also “Plan C” because Wall Street was likely to collapse. I remember everyone laughing, but he was exactly right. Even in his old age, he was sharp as a tack and would playfully rag on students. My wife worked at HBS and when he put two and two together that we were married, he slapped me across the back (in front of her) and said, “Nice job, kid!”
Industrial Structure and Strategy, F.M. Scherer
I didn’t know what to think of this class before entering, but I’d heard Scherer was a quirky guy. It was a pretty standard class. We had one textbook, and he wrote it. The book was classified into key national industries, and it was his syllabus for the class. Each class, for three hours, we were expected to have read the corresponding chapter, along with some recent articles about the specific corporations in said industry, and Scherer would then dissect the various technology and business strategies used by the market leaders. After a few disjointed classes, the themes started to come together, and patterns between seemingly unrelated industries started to take shape. This has helped me glean a better understanding of what larger players do within an industry, to better understand their core motivations, what may drive their long-term strategies, and how this may impact startups.
Public Narrative, Marshall Ganz
Ganz is a famous political organizer (with Cesar Chavez, and most recently, helping Barack Obama in his runup to 2008) known for his mastery of the “public narrative.” This means, being public, telling your story. It was one of the most popular classes at school, year in and year out. It did attract many people who perhaps one day wanted to hold some type of elected or appointed public office, but there were people like me, too, who were curious about storytelling, organization, narrative techniques. As part of the class, each person had to deliver three videotaped live “narratives’ to their peers and get feedback in real time and later through video. It was brutal, not only to hear yourself speak, but also to come to understand how others interpreted your words, your body language, your tone, or what was expected of you, how to use elements of surprise, and other techniques. Taking this class definitely broke me down but then, through speaking often in public, gave me the confidence to not only be more open, but to get over any fears of sharing my thoughts with others, either through the written word or in real life, in person. I never got to know Marshall that well, or as well as I would’ve liked to, and that was my mistake, but I still got a lot out of his class.
The Works Of Primo Levi, Ralph Williams
Williams was one of the most popular, visible professors on campus in Ann Arbor. He was famous for teaching lectures on The Classics and Civilization, on The Bible and World Religions, and A Survey of Shakespeare. He was a true intellectual polymath, fluent in over 15 languages and much more. His knowledge was encyclopedic, and he was a gifted orator. I took the latter in my first year on campus. I could barely keep up. What I learned from Williams oratory style is that he outlined his lectures on the board in what he called “rubrics.” I had to look up that word, “a set of instructions at the beginning of a book, or a test, etc.” It took me years to figure out why that was key. In reading tons and tons of text, he wanted his students to strip away the noise and pull out key themes, and he wrote them on the board, underlined them, and lectured around them so precisely, many of them I can still recall by memory. So, when senior year came around, I wanted to make sure I took his seminar on The Works of Primo Levi. Given the demand for his course, a seminar in which we had the read (slowly) all of Levi’s books, Williams kept the class at the standard 4-credit pace but only offered it as 1-credit. To be in the class, you implicitly had to take on the work of what would be a normal class, with attendance and discussion, with writing due weekly, scored by him, but only get a quarter of the credit. It’s a difficult topic to just casually discuss, but in my opinion, Levi is a genius. For those who don’t know, he was an Italian chemist (and Jewish) and he was sent to Auschwitz. Because of his technical prowess, he was kept alive by the Nazis and tortured in a different way. His written work was his attempt to share his story and try to comprehend the arc of his life, what he saw, and what he lived through. In his books, with Williams rubrics burned into my brain, it turned into a course into the deep, meticulous study of interpersonal relationships. I didn’t realize it at the time, as a 22-year old, but now as I get older and recall the lessons from the books and lectures, I try to take conversations with people to heart, to listen more, to not judge too quickly. (My #1 book by Levi is The Periodic Table, one of the most original pieces of writing I’ve ever read.)
Mind, Brain, and Spirituality, Richard Mann
I took Dr. Mann’s class in 1995, my last semester of college. You had to write him a letter about why you wanted to be in his class. It was competitive. I can’t remember what I said to convince him, but I’m sure it wasn’t original or totally honest. The truth was, I’d heard great things about him and just wanted to be in the class. At a big school like Michigan, with all its red tape, you had to find out where the good stuff was and then jam into situations you wanted to be in. Mann relented and accepted me into his class, Psych 401, a seminar with no desks, no syllabus, no structure, no rules. You didn’t have to show up. You gave yourself your own grade. Each week, you had to write something about yourself on a broad topic and share it with Dr. Mann, or a classmate, or no one. It was up to you. The guiding principle in the class, though we didn’t realize it at the time, was to put yourself on a path of self-realization. Mann’s style in reading our work wasn’t to critique, but he’d just highlight some text and write a question mark, as if to say, “That’s interesting. What did you mean by that? Please, tell me more.” Mann himself has a curious background. He is one of the foremost academic leaders in psychology and was part of all the experiments done at Harvard with the Merry Pranksters and the like. He also suffered some personal tragedy, left his profession, lived in India for years, and returned back home to Ann Arbor to teach and begin anew. I spent a lot of time with Mann and my classmates. Tne nature of the conversations in and around that class were totally different than what I’ve ever experienced. Now, years later, the key lesson from that class was to always be alert about what could be causing me — or people around me — to struggle and learning the intellectual and tactical tools to work through those challenges without ignoring them, probably fueled by the fact that Mann set up his class to have no rules or administration — it was entirely self-directed, and now years later, the gift of being self-directed is helping me survive and enabling me to work with who I want on what I want to.
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I stopped fiddling with computer programs after age 17. I didn’t take a science class since finishing physics before high school graduation. I didn’t understand how learning these languages was more about literacy than it was about “taking an interest in a subject.” But, I also believe that people will continue to add real, long-term value at sale to society by taking different educational paths and cobbling together different experiences. The links in Andy’s post above shows the beginnings of those seeds. I entered graduate school thinking I’d work on macroeconomic-related work in India, but then I decided I just wanted to move back to California even though I had no idea what to do. I’m sure many people enter MBA programs with the desire to start a company, and many have — and quite successfully. And, they will continue to, because even if someone isn’t deeply technical, or if they don’t an MBA, it often comes down to an individual’s human desire, their drive to do something — anything — despite what one investor may say. Technology alone isn’t a prerequisite for creating sustained value or disrupting an incumbent situation. In some situations, initial branding and marketing matter a great deal, or the development of a new business model creates an opportunity to build something new. In these cases, advancements in underlying technologies may or may not driving these opportunities, but the value may often be captured by the creative person who stitches together the disparate pieces, who grabs different off-the-shelf stacks and positions them in a way no one else has thought of, who motivates people around them to innovate, who attracts talent and inspires them to stay, who knows how to bring new things to new markets. For me, that is the deepest insight of this whole recurring debate.
I have often argued (perhaps incorrectly, time will tell) that mobile apps which truly achieve breakout status come from one of a few buckets. There’s gaming, of course. After that, it’s apps that leverage the phone camera in some way (Instagram, Snapchat), or apps that benefit from network effects (Whatsapp and other messaging apps), or apps which aggregate consumer demand through the phone but fulfill the demand offline (Uber). Otherwise, most apps that do well have an influential “parent” with a web audience that helps move that audience to another platform.
So, with that context, we have the buzziest new app du jour: Secret. There’s no denying it’s a slick, well-designed, Instagram UI-influenced, well-thought-out app. No doubt. It’s also the talk of the town now, largely because it created a clever semi-anonymous network on the back of users’ address books, masking identity but creating an atmosphere where you’re likely to know the person posting that sultry or racy “secret,” along with ability to comment with others or “like” the status update, which sends a signal to the app to consider propagating that content throughout the system should enough people “heart” it.
Like Snapchat, Secret has started by using our mobile phone books as the main rails — not our existing social graphs like Facebook or Twitter. Like Snapchat, content on Secret never touches the web, unless through a user taking and posting screenshot — which is interesting, because I wonder if they’ll make secrets expire? On top of this, instead of email engagement, Secret is being very aggressive with push notifications, sending (at least to me) around 30 (??) push notifications a day. Like Jelly, the app doesn’t allow the user to control notifications from within the app, so a user would have to go into iOS settings and configure them for Secret — or delete the app altogether.
I don’t know what will happen to Secret, though on the surface, it’s easy to have a knee-jerk reaction to say “but, it can’t grow viral” because of the nature of it, though I wouldn’t bet against that reality if it’s able to spread by word-of-mouth into the right networks. The app has done a great job of encouraging users to create original content through text, creating an entirely new kind of newsfeed — the SecretFeed, if you will. And, people who like social media are addicted to newsfeeds. Combine the new, novel content with the flurry of push notifications, and the app feeds an addiction into the seven deadly sins, all represented in the confessions and secrets people blurt out on the app. As someone who is curious about mobile apps, distribution, engagement, retention, and attachment, here are the aspects of Secret that I’ll be keeping an eye on:
Push Notifications: What is the consumer threshold for “too many” push notifications? Do consumers actually care if an app doesn’t provide an advance control to rate notifications?
Community Norms: How will the app creators police Secret, or empower their users to police it before “Eternal September” rolls around? Will Secret allow users (maybe after behaving for a while) to take original pictures from their phone, which could be more engaging?
Network: After propagating the network with 2nd degree connections, will they reign it in and only make it people you’re likely to know?
Veracity of Information: Will true secrets “leak” into the app and then become verified in the press? (This is most interesting to me because it could transform the app into a Twitter-like information source, less about real-time, and more about the currency around proprietary information.)
Whatever your take on Secret is thus far — game-changing, or spammy; creative, or degenerative — I’ve gotta tip my hat to the creators of the app. It’s really hard to create something that people care about, if even for a period of time. Even harder to get them to create content, talk about it on other networks, and to change behavior. It’s a well-crafted app and deserves the attention it’s getting. Other good apps like Confide and Wut are in the market, but probably not catching on like this one is right now. Well, let’s see if it can buck my thesis above and grow to the next levels. It just might have the juice, brand, and word-of-mouth cache to do it.
I normally don’t read mainstream articles about the current state of Twitter as a media service, usually because they’re either rehashing the same old arguments, extrapolating from one person’s perspective, or both. This morning, however, an article penned in The New York Times bubbled up into my feed and some good friends throughout the day shared the same link, all saying, to paraphrase: “Yes, this is the problem with Twitter today.” While I engaged in a bit of banter this morning, I wanted to make sure I read the article, titled “Valley Of The Blahs,” by NYT technology writer Jenna Wortham, before writing my own views — and kudos to Jenna for engaging me without blasting her point of view.
Here are my reactions after digesting her post, which on this particular topic, is thoughtful, well-written, well-argued, and quite provocative:
When it comes to news and information online, Twitter controls the lions’ share of that attention today, and at least from my vantage point, the activity on the service seems to have increased just in the last year, even as more and more users came onboard or became more active. As a result of all the attention, Jenna is right that people have a twisted incentive to throw in their own witty comments and jokes about mainstream or industry-related events as a situation is unfolding. That desire to get noticed creates noise, and for others who are there to either dip their toes in the water or get into other more valuable conversations. (I will admit I have, as well, jumped into the fray on occasion, lobbing in a funny tweet here or there — not to look for a retweet, but more out of a desire to just participate in the conversation that’s developing, though reading Jenna’s piece, I can see how someone else could perceive that.)
As someone who views the web through Twitter (like Jenna does), I felt the medium largely became a self-promotional and marketing tool years ago. In fact, some of the most technically accomplished founders I know who used to use Twitter back when it was really just about human-level status updates abandoned the platform years ago. I’ve felt the same over the past few years, so I’ve made some tweaks such as creating lists (more on that below) and trying to get into the stream during “off-peak” hours.
When these critiques surface, two or three common fixes are usually suggested by apologists (like me): One, refresh the list of people you follow on Twitter, and two, create lists to focus on specific people in groups, which cuts down on the noise. (There’s a third option, which I’ve done, which is to go through your entire follow list and manually disable a good chunk of folks from retweeting anything into your stream, because let’s face it, there are some people who just retweet self-promotional garbage into your stream.) I have come to realize there are problems with these suggestions. One, even though there shouldn’t be any stigma attached to “unfollowing” a person, I believe the stigma is real and has grown as Twitter commands more attention and importance. Two, most people (even techies or power users) aren’t going to create lists. I have a few private lists I follow, and I use the stream-focused web version of TweetDeck in the browser — the redesign for the normal Twitter website (which broke chronology) was too much for me to handle. (On three, I doubt people will go into each profile and disable retweeting, so we’re stuck with it.
OK, so what then to do? Here are the options I came up with, each one plausible in the right situation:
Unfollow everyone and start over again. Steve Schlafman did this and documented the process (including scripts) here. Why not? Why not just follow 10-20 people whom you know will behave on Twitter in a way that’s attractive to you? It sounds appealing to me! Even though there is a stigma around unfollowing, I agree it needs to be broken and challenged. I’m sure many folks follow me because they know me or we are friends, but they’d probably like to unfollow me. (Tweetbot offers a muting option across clients, but native products do not.)
Set aside 1-2 hours and create lists. Yes, it’s work and changing habits, but I did this about two years ago and there’s no way I could now use Twitter without lists. No way. I would just stop or unfollow everyone to rebuild the graph slowly.
Approach Twitter with more Zen. That is, you open the app/site, you jump in, and if you don’t like what’s in the water, jump out. However, there is a risk here…
Stop using Twitter entirely. Even though I love Twitter, I can completely understand why someone who just wants to find good links and chat with friends or colleagues would feel like, after trying to be “Zen” inside Twitter, to just junk the whole thing. This is the time we live in, where people just get fed up and turn off this stuff and then realize, “Yes, this is better.” Even though the tools are there for users to do all of these, it may just feel easier to let it go. And, that could happen as Twitter struggles to grow its user base (which precipitated many of these recent design changes). It’s hard for the product in its current form to encourage users to cull their graphs, or create lists, or to just jump in and jump out of the water…the product’s incentives are to keep us there all the time, and when folks are there all the time, the number of tweets may increase, yes, but the quality of them may not. In the heat of that moment, even as a Twitter addict, I can see how someone could just say, “I have to move on.” Good luck getting those users back.
In this post, I’m going to oversimplify decades of academic research to make a more colloquial point. I’ll also ad-lib a bit, so even though these thoughts below are not mine, they’re my own interpretation, for better or worse. In this post, I’ll try to weave together two lines of thought.
The first concerns information theory, where one believes that often the most valuable information to an individual sits on the edge of their own networks (work, personal). The everyday example I would use here is a site like Craigslist — every time I’ve had to move, I’ve been able to get free moving boxes or get rid of them within minutes of checking or posting to Craigslist. While I don’t have connections with these people, in that moment, our interests are aligned and what’s most valuable to us for this use case lies at the very edge of our networks, helped out by Craigslist’s ability to route supply and demand. (Rohit’s blog post here gives an interesting take on information theory and networks as it applies to venture capital.)
The second is about the strength of weak ties, which I’m sure many have been exposed through in Adam Grant’s “Give And Take,” which features a living master of this art, Adam Rifkin. The idea is pretty straight-forward: There is enormous value in the weak ties we have with acquaintances, people we sort of know but don’t really know or may never know. You’ve probably heard many stories (or experienced it first-hand) where someone meets their significant other, or finds a job, or a great apartment in NYC simply by intensely connecting with a “weak tie” in their network — the value did not arise from the people they know best.
In early-stage investing, it’s important to gather, sort, and process information that other people do not have (yet). While many groups try to figure out how to see every deal or opportunity that exists, I do not believe that’s possible. Rather, I believe investors can see more opportunities the more they work the very edges of their network (and their partners’ networks), and this is why professional investors are always in meetings, including when pitches where investors carry little to no intention of ever funding that particular company. (One classic investor trick is for him/her to ask someone about the companies or apps they like, a continuous hunt for actionable information on the edge of their networks.)
In a game where information isn’t evenly distributed and knowing pieces of information even hours before others can be critical, information theory applied to early-stage investing is, indeed, critical — and I have experienced this myself, first-hand.
For someone like me, I haven’t been around for too long. I don’t have deep networks. Most people build their networks through traditional jobs, collecting trusted people as they move from one to another. Today, people (like me, for instance) also have the opportunity to compress time and build new networks around online interest graphs (like Twitter), which in turn helps someone share their thoughts (as I blog) and have those thoughts distributed to others who may have valuable information to add to that canon (distribution, following, asymmetry). While these types of networks aren’t defined by depth of relationship (which carries its own value), they can be defined more consistent relevance and immediacy.
All this said, none of this works unless a person creates and maintains good relationships with others. This is where the strength of weak ties come into play. A person who is savvy at collecting information on the edge of their networks also has to make sure they are able to act on it in an actionable way, and quickly. Put another way, simply learning that a new team is forming or that a product is growing well only informs — it does not translate into access. What can translate into access, however, are the ties — even if weak — people can form with others. Those ties can be forged quickly by things like shared interests (especially through online networks like Twitter, Quora, Disqus, Facebook, and others), the precedence of a person’s reputation, and offering to help others (and following through on those overtures). In those moments, what is considered a weak tie can be — for even a few minutes — a very strong tie, one strong enough to help overcome the problem of sitting on inactionable but valuable information.
I have been thinking about the intersection of information theory, networks, and weak ties for some time, probably because I spend time thinking about investing and meet lots of new people. There is definitely a science to explain how all of this happens, but there is also art involved in making the theories come to life in the real world, and it is that art which interests me most — and which I’ll write about more as I continue to share the stories behind the investments I make.
Bill Gurley wrote an interesting post today on “bubbles.” While many of his posts are widely shared, for whatever reason, this one didn’t fly off the shelf, but after reading it twice this morning, I think it’s very important, so important for people to read that I’ve reproduced it here with my own six (6) annotations, which I try to unpack below. If you work at or invest in early stage startups in the Bay Area, it’s worth giving this a few minutes of thought:
January 24, 2014: Over the past few months, many journalists have begun to ask the question that no one really wants to hear; “Is Silicon Valley in another technology bubble?” It’s a dangerous question to ponder – especially out loud and especially here at ground zero. Silicon Valley thrives on optimism, and anyone waving the bubble flag is auditioning for the title of nonbeliever or party pooper.
There is another reason it is dangerous to predict the arrival of a bubble. It was 1996 when Federal Reserve Board Chairman Alan Greenspan first uttered the now historic phrase “irrational exuberance.” Even though things were frothy enough that the head of the federal reserve felt the need to talk down the market, the top was in fact many, many years away. And the venture capital firms that pulled back in 1996 missed the best three years of return in the history of venture capital industry. All of which makes predicting market tops a delicately tricky business. 
Warren Buffet has a famous quote, “Be fearful when others are greedy and greedy when others are fearful.” Using this traditionally contrarian investment mindset, one would certainly tread with trepidation in today’s market. Although we may have not reached the level of observing obvious greediness, there is most certainly an absence of fear.  Those that managed companies in 2008 or thirteen years ago in 2001 know exactly how fear feels. And this is not it.
There is another way to think about identifying bubbles.  Occasionally you will hear sophisticated investors talk about the notion of “discounting risk.” They might suggest that certain investors in a certain sector are discounting risk. The implication is that they are not properly accounting for the risk of the given situation.  Investors are not the only ones that can discount risk; executives and employees can discount risk as well. This happens anytime someone is operating in a situation where their assessment of risk is far lower than the actual risk to which they may be exposed.
All of which leads to my “discounted risk of employer profitability” theory. Ask yourself this question. What is the percentage of employees in Silicon Valley that are working at profitless companies (i.e. companies that are losing money or have negative cash flow)? And how has that trended over time? What was that percentage in 1999? What was it in 2003? And what is it today? An employee’s decision to work for a company that is losing money is an implicit decision to discount risk. If the macro environment changes, that company is under much greater stress than one that is profitable. Yet many individuals are making just such a decision today. 
Through this lens you can also see why markets are cyclical, precisely because the willingness for people to take on such risks happens gradually over time. Like the boiled frog, the employee base as a whole does not perceive that anything is changing. Yet, at a micro level, one person’s decision to get comfortable with this risk is based on the fact that someone else did it earlier, which was based on someone else even before him or her. And as more and more people make that decision, the risk is constantly increasing.  No one makes the implicit decision, “I am going to go to work for a money losing company!” However, slowly over time, a large portion of the employees in the area inherently are. And then, when the bubble bursts, the consequences are far greater.
Its not just employees that take on this incremental risk. I am just highlighting that looking at this particular detail is one way of measuring the discounting of risk. Obviously, venture capitalists, investment bankers, public market investors, founders, and executives are all part of the game, and they all play a role in the acceptance of more and more risk over time. There is value to knowing where you are, even if you play the game on the field.
Disclaimers:I do not know Gurley, but like many of you, follow his tweets and blogs closely given his experience and ways with words. Therefore, I don’t mean to imply this is what he was getting at, but rather, this is my interpretation, my reading between the lines. I also don’t mean to sound an alarm bell, but rather capture the sentiments I see and hear around me.
 Gurley’s post hit the web on the morning of the biggest little market corrections of late. Today, the DJIA dropped a bit over 300 points, and the tech sector was not spared. What I believe Gurley is saying is that those private investors who pull back now may, in fact, miss out on tremendous venture scale opportunities over the next few years.
 There is, indeed, an absence of fear in and around the Valley, though you can see some parts of it creeping up. The first signs of this are related to the delta between salaries and rents. Disciplined “value” investors are also concerned about the delta between what they perceive to be fair prices and the intense competition among big, established firms to offer higher prices.
 Yes, people often forget that there are bubbles with a big “B” and then ones with a small “b.” Even if a small “b” bubble occurs, it can affect startups and the folks who invest in them.
 The notion of “discounting risk” takes many forms. I’ll give you one example, based on deals I’ve looked at in a specific sector — the number of companies which offer an offline service based on online demand, who think they can grow geographically in the same manner Uber has. Here, the “execution risk” can, at times, be discounted, and with enough money going around, founders can sometimes take what the market bears.
 OK, this is the money shot of the post. There are TONS of people who are now in the Bay Area living month-to-month off a salary that entirely driven by venture capital investment into nonprofitable companies. Some of these companies are early, or some of them never get to the point where they can figure out how to earn money. Because I help a lot of people move in/out of many jobs, I hear the concerns, and of the biggest concerns I hear, after working at a startup that never makes money, is: “I am looking to join a company which is more stable, which has product-market fit.” That is code for, “Hell, no, never again.”
 I hear stories of people bunking up to 4 in a 2BR cramped apartment in SF (and the like), eeking out a salary and hoping to keep riding the wave. Many of these hyper-growth companies, truth be told, probably employ too many people, and at the first sign of any trouble, you can bet either hiring will slow, freeze, or worst, slight downsizing will occur. Age is a factor here. Folks can do anything when they’re 22, they don’t really care about what they have and where/how they sleep; folks who are 32 sure, do, and with so many jobs wiped off the dockets in the last five years, it’s a scary thought to think where those folks who want to get into a more stable company go. Maybe it will all work out because people will go work at the unicorns, and there is an entire stable of unicorns in the Bay Area’s barn right now.
This is a transcript of an old conversation I had with @Poornima. There’s been a lot of chatter over the years about how to get more women into the technology field, but Poornima actually is building a business around it and delivers (below) one of the best rationales for why computer science and development is a great career choice for women. This is worth a close read.
@semil: We’re in the studio today with Poornima Vijayashanker. She is the CEO and founder of BizeeBee, focusing on management, membership services, and software for small-medium businesses and she’s also the second employee at Mint.com. Welcome to the studio, Poornima.
Poornima Vijayashanker: Thanks for having me.
@semil: So, one of the largest issues in the Silicon Valley, the tech world and the startup world, is this issue of women and technology, including women founders and technical women in the industry. I think would be helpful to start off the conversation if you would dial the clock back a little bit and explain to the audience how you got into technology to begin with.
Poornima: Sure. Well, I was a bit fortunate growing up, because my dad’s actually a hardware engineer. Around the dinner table we always talked about the big tech companies that he worked for, like Sony, TI and Samsung. I grew up with that. I got to see my first fab when I was about eight years old and my brother and I did zany things, like take our computers apart. Growing up, there was a lot of tech focus. That’s not to say I wanted to be an engineer. It wasn’t until I got to college and took my first computer science class that I actually got interested in technology as a career.
@semil: As you were growing up in middle school and high school, were you exposed to computers? Were you learning programming at that time or only when you applied to college and enrolled?
Poornima: I did do some basic programming in HTML and, back then, we had geocities. I did that sort of stuff, but…
@semil: But for how long?
Poornima: Probably less than six months. I never took a high school CS class and I certainly wasn’t sitting there hacking away at my laptop. It was the kind of thing I only learned to do when I got to college.
@semil: How did you decide from the moment when you graduated high school and you were going to go to college that you were going to focus on electrical engineering and computer science? How did you decide that’s it, or did you pick a number of different majors?
Poornima: I wanted to be a lawyer. All through high school I did speech and debate. When I got to college, though, I wasn’t too keen on becoming a lawyer, because I felt like I wasn’t going to be building something and I really wanted to build. Computer science gave me that outlet. Once I started, then I just fell in love with building software. Then, I realized I really wanted EE, because I really wanted to know not only how to build to programs, but how to build computers and systems. That’s why I decided to do the double major.
@semil: What did you do after college? What was your next career move?
Poornima: The minute I decided I was going to be an engineer I knew I wanted to be in California. One, because it’s the tech capital of the world and two, I was always fascinated by the startup scene, as well as the fact that there are so many companies that form here all the time. So, I made the long trek out from Duke to California, and my first job was actually as an R & D engineer at Synopsis, which does CAD tools. It was a good integration of my CS and EE background and I spent about two years working there.
@semil: What was your next move?
Poornima: Then I went to Stanford. Actually, while I was still at Synopsis, I did a part-time Master’s. I did that partly because I really wanted to get into the startup scene and I thought it was the best way because so many Stanford grads, starting with the HP guys all the way to the Google guys, were from Stanford. I thought, there’s got to be something in the water there. Maybe if I start taking classes or meet people, I’ll be able to get into this scene.
@semil: Then you dropped out of the program at Stanford to join Mint as their second employee. Walk us through that decision. Did you agonize over leaving your Master’s program or did you just say, “This is what I’m here for and I’m going to go for it?”
Poornima: Since I only went to the program because I wanted to get into the startup scene, it was a pretty simple decision, in that I wanted to be at Mint. I loved the idea from the minute Aaron introduced it to me and I also really just wanted to be building and be in industry. Leaving wasn’t really hard because I’d taken a few classes, gained some skills in web development, and now I wanted to put it into practice.
@semil: Now you’ve founded your own company, after Mint was acquired by Intuit. You’ve obviously been noticing a lot of the debates around women and technology. It seems to come up again every three or four months and it seems to get louder and louder. And, so, maybe something is happening. You do a lot of work outside of BizeeBee, outside of being an engineer and founder, to mentor and interact with the community. Can you share a little bit about the types of things you do, how long have you been doing it for and what you’ve learned from it?
Poornima: Yes. Right about the time I started at Mint, I was on an all guy team, which wasn’t a new thing to me. I was used to that in college and at my first job. I really wanted to have a forum where I could showcase that you can be a girl and be in engineering. So, I started my blog, femgineer.com, and the whole purpose of it was not to bitch or gripe. It was just, “Let’s talk tech and let’s talk about what it’s like to start companies and build products.” That became the focus, and it’s been going on for five years now. Just over the course of writing the blog, people were contacting me and asking me questions and asking me to come speak. So, it basically morphed into me becoming a lot more of a role model or a figure in the area.
What I do now is go to conferences, like the one I went to on Saturday at Stanford, C++. There was one at Berkeley, as well, about a month ago. I talk about what it is like to be in tech, the jobs that are available to you and how you set yourself up. Whether it’s a CS degree or product design, I try to give people who are in college an understanding of what the major is going to translate to in terms of practice in the industry.
@semil: So, you’ve been blogging for five years and you’ve been very generous with your time, in speaking with either students or post-grads who are looking for advice. What are the common types of questions that come up? What do you hear most often and how do you respond to that?
Poornima: People just have no insight into what a software engineer does or what other jobs there are in tech. A lot of it is, “Look, here’s what startup life is like, here are the kind of skills that you need,” and they’re not just coding in Rails or Java or anything like that. There’s more; there’s being able to wire-frame, do visibility tasks.
A lot of it is just getting people acquainted with, “Here’s what life is like.” And then the other part of that, is there is a lot of anxiety. A lot of people come in and they say, “Well, I don’t know if I want to work for a startup or a big company. What’s the different dynamic?” It’s also exposing; what is it you want out of your career? Do you want to be an entrepreneur or are you really happy being specialized or solving big problems in the world?
@semil: What are the questions that come up with technical women who are in high school, college or just leaving college?
Poornima: Some people ask some pretty hard-hitting questions. There’s this phenomenon right now going on, that I think happens with both women and men, which is that first-year CS class that they take. They come in and say, “I’ve never coded before, so I have no idea to begin. I’ve done these Google searches, but there’s just so much content out there and I don’t want to appear dumb in the class.” So, part of it is just me saying, “Look, take that first project, learn that first language, and then build upon it.” No one is going to look at you and say, “Why don’t you have an entire string of keywords in your resume from your first CS class?”
You also aren’t expected to know everything when it comes to attending that class. It’s really meant to be an intro level. Part of it is just reducing their anxiety and telling them it’s a building process. You learn your fundamentals, and then you’re going to learn actually how to create a program. From there, you’re going to learn the entire computer architecture. Really, the focus is just saying, “Take a class; see if you like it.”
If you like to cook, programming is a lot like cooking. You grab your ingredients, you read a recipe. That’s what an algorithm is. Making it that simple helps them understand, “Okay, I’m willing to take a shot. I’m willing to sit through this first class and then go from there.” That is a lot of what I do when I mentor. The blog itself, though, is a little more focused on things like, “Here’s what it’s like at a startup.”
@semil: Let’s dig into that other side of the coin, such as more personal things and lifestyle things, that you’ve noticed being in the startup world. Obviously, it’s male-dominated. What are some lessons that you impart from your experience to people who maybe ask you about that?
Poornima: I would say a lot of it is, what is it that you want in your life? If you want to be at that startup that’s really changing the world and really going at a fast pace, there are a lot of those to choose from in the Valley. It’s up to you to get out there and promote yourself, either as the developer or the designer, or whatever your skillset is.
There are also a number of startups that are bootstrapped or that have been around for a while and are making a lot of progress. So, if you don’t want to be on that fast track and you would rather still have the ability to make a change in the world, you could choose from those. I think a lot of it is exposing that there’s not just one type of startup out there. If you want to have the freedom to affect your end-users and make change, that’s what a startup is for. It’s to be able to do that. It’s to be able to have that immediate connection with the customer, which you don’t necessarily get working with a larger company or if you have more specialized skills.
@semil: What about the more personal side of it, such as lifestyle choices that either that you’ve made or that your career has afforded you?
Poornima: When I left Mint, it was pretty much to start my own business. I had the experience as a founding engineer and liked seeing the evolution of an entire product from prototype to launch and then acquisition, but I wanted something different. I wanted to build a business that would grow with my lifestyle.
And at the time, I had a lot of different interests. I liked to mentor; I liked to speak on a number of topics; I loved yoga; and I wanted to spend time with my friends. I didn’t want to be at another startup where I was forced to go by whatever the founder’s schedule is. I wanted something where I could establish a business, one that’s still going to become big, but that’s operating on my timeframe.
@semil: How do you think a career in technology affords that, specifically for women?
Poornima: The first way is that I have a remote team. And my remote team is primarily on the West Coast, but I’ve noticed that my employees are really happy when they don’t have to commute. Everybody logs in, they do their work, and then they can go out and do what they need to. I think flexibility is really important, especially for women and especially for that group that is 20-30. They might be starting families, they might even be thinking of starting families. They want some freedom and they don’t want to be chained to a desk or even chained to particular environment that they have to be somewhere. Instead, they want to get work done still, they want to be productive, they want to be contributors. Technology and being able to log-in from anywhere and work from anywhere gives them that ability to do so.
@semil: You’re saying this specifically about people who are working in technical professions.
Poornima: Right. That can be anything. That can be marketing. That can be software engineers. It doesn’t have to be one versus the other. Being in a startup or being in a tech company gives you a lot more flexibility, just given the way that they think about how work is going to be done. It’s a pretty progressive industry when it comes to making sure there is work-life balance and also in making sure that you’re working when you are most effective, rather than punching a clock.
@semil: Let’s wrap up and talk a little bit about what you’re working on right now; where the majority of your focus is on BizeeBee. You mentioned that, and we were talking about it earlier, that it’s a software company helping small-medium businesses manage their memberships. Tell us a little bit about BizeeBee, who’s using it, and dig in a little bit as to what it’s like to actually build a company.
Poornima: Well, the first thing is that it’s extremely gratifying to see an idea start from nothing and have it affect hundreds, if not millions, of lives. I’ve always been a fan of that and with BizeeBee I get to do that. BizeeBee itself is member management. We basically help small businesses or organizations, like fitness studios, and even continued education and professional services, like acting coaches and writing workshops.
The big problem these folks have today is that their data is everywhere. There’s too many different tools. It really makes it hard for them to keep track of their customers, get them to come back, and even do simple things, like get paid on time. BizeeBee just streamlines the process, puts all of that into one product, and then let’s them do what they do best, which is teaching and interacting with their customers.
@semil: How did you get the idea for BizeeBee? How did it come about?
Poornima: So, I’ve been doing yoga for about eight years and I just kept seeing the same problems no matter where I went, whether it was in the US or outside. All these yoga studios I went to couldn’t get their people to come back after an introductory special or they just couldn’t get paid on time or were using software that was really old or had an install base. I thought, there’s got to be a better way. I looked around for some products, even consulted for a number of those businesses and found out there wasn’t a lot in the space. That was the inspiration to start BizeeBee.
@semil: How much do you think that idea process to get to BizeeBee was also influenced by your time at Mint, which is focused broadly on finance and then was acquired by Intuit? How was that experience formative for what you’re doing now?
Poornima: The first thing is that Mint taught me how to build a product from scratch. That really helped tremendously and that’s one of the reasons I went there. That’s the first. The second is, at Mint, I learned so much about financial tech, which is becoming more and more prevalent in the industry today. I learned everything from managing a transaction stream and the growth of that, to a lot around security. Mint was really the forefront of managing people’s personal, confidential data. I learned a ton of security information.
Then the other thing was, how do you take complex data? Personal finance, lotto numbers, people hate doing these kinds of things. Make it interesting, make it fun, and, most importantly, make it simple, right? People don’t want to do their taxes. They don’t want to do their accounting. So, what can you do to make it really push-button? Those are the same lessons I apply at BizeeBee. It’s “How do you take that business management, the hard parts of managing a small business, and make it super simple for these people that are super-strapped by cash and by time?”
@semil: You’re doing a lot of mentorship and you’ve touched a lot of people already through the blog and through the speaking. This conversation is another chance to talk to the audience. What would you say if someone’s out there just on the verge of wanting to join a startup or wanting to start their own thing, like you finally did? What would be your parting advice to them?
Poornima: I think the most important thing is, don’t overthink it. I think people sometimes worry, “Well, I don’t have all the pieces in place.” You need to just go for it and you need to make sure you’ve got a good support system. That can be advisors, mentors, even other founders out there. I think that it’s a really nurturing community. Being able to just say, “Hey, I’m stuck,” once you get stuck is great, but there’s never going to be a good time. You might as well just jump in if you are excited about an idea and if you think you can make it happen.
@semil: Alright. Thank you very much, Poornima, and good luck.