Posts from June 2012

Albert’s Talk At Velocity

My partner Albert delivered a really excellent 20min talk at the Velocity conference last week. His talk was about the threats to the open internet, why they exist, and what we can do about them. Regular readers of this blog will be familiar with all of the themes in Albert's talk, but his framing of the issues is really well done.

If you have 20 minutes this weekend, I strongly suggest you watch it.

Fun Friday: Italy vs Spain

Since AVC has a global audience, we are going to talk about the global sport today – football, or as we call it in the US, Soccer.

My son and I have been watching the EURO 2012 games since the early matches. When we got over to europe, we scouted out the best sports bars and have been going to them after dinner to watch the games. We've been taking an "anyone but Spain" approach as we like to root for the underdogs (we are Mets & Jets fans in NYC).

Portugal was our team but Spain took them out in a shootout on Wednesday night. Balotelli's big game last night was enough to get us onto Italy's bandwagon. So we'll be rooting for Italy on Sunday.

How about you?

Roamline

Yesterday I traveled from Amsterdam to Berlin and ended my day in Paris. Three countries in one day. And I did it all with just one data only sim card in my phone.

I've been trying out a new data only service called Roamline while I've been in europe. It works great and allows you to roam from country to country in Europe, Canada, and the US with a fixed rate on data.

It works great, but it is not cheap. At .39euro per MB, I feel like its a luxury. It's much more cost effective to buy a sim card in each country. In Denmark, I was able toget a 1gig sim for 48krone which is something like $8US. So that would be .8cents per MB. In london, I paid 20pounds for 1gig of data so that is 3cents per MB. Roamline's cost of .39euro per MB is something like 50cents US per MB.

But what you get in return is convenience. I needed to be in three countries in one day, I wanted data to work on my phone from the moment I landed, and I did not want to be running around looking for a store to buy a local sim card.

Of course the other option is to just use your US phone service and get the biggest data roaming plan you can. With AT&T Mobile, you can get 800MB a month of international roaming for $120. That is 15cents per MB. But after that you pay some crazy number like $20 per MB (at least that's what the AT&T customer service person told me when I called a few weeks ago to inquire about this stuff).

If Roamline were about half the price, somewhere around $0.20per MB, I think it would be an awesome service. And operating in data only mode is not a big deal. I use skype and a sip client called Bria for voice and I use Kik for messaging. Everything else is data.

You'll need an unlocked iPhone or Android to swap out sims like this. But I don't buy locked phones and never have. I think the lock+subsidy is a bad deal and I don't like being told what I can and can't do on my phone.

In any case, I think Roamline is an interesting option for people who do a lot of international business travel in europe, canada, and the US. If they can lower the price by half, then I think its a great option.

Dropbox to Google Drive Sync

A number of companies send me documents in Dropbox. I am happy to get them that way. Most of these documents are .doc, .xls, and .ppt files. Since I don't use word, excel, and powerpoint anymore as part of my committment to move my entire computing experience to the cloud, I end up doing a hack which involves downloading the files to my desktop, then emailing them to myself in gmail, then opening them as google docs in google drive.

This convoluted process has the added benefit of then being able to share these documents freely with the USV team in our shared google drive. Many of the documents that are shared with me on Dropbox are shared in folders that I don't control and the rest of the USV team doesn't have access to.

What I am currently looking for and doing a fair bit of research on is the available services out there that sync Dropbox to Google Drive. I want to find one that works easily and reliably, and that allows me to automate the syncing of various dropbox folders to my google drive and then be able to open the file as a converted google doc.

I'd be grateful for advice on services that all of you are using to accomplish this task. If you are an entrepreneur who has built such a service, feel free to advocate for your service in the comments. We won't accuse you of spamming us with your marketing pitch.

Once I select a service to use, I will post about it here.

Audience Measurement Across Web and Mobile

With leading web properties like Facebook and Twitter now seeing up to half of their traffic on mobile, it's hard to get a sense of what is going on with their audiences by looking at Alexa, comScore, Quantcast, etc. The same is true of our portfolio companies and their competitors. Gone are the days when we could pull up several of these third party measurement services, put in a few URLs, do a little triangulation and see how our companies are doing against the competition.

Today its a hodgepodge of web audience measurement (done the way I described above) and app audience measurement. App audience measurement is tougher. Services like appannie will tell where an app ranks in the app store based on download activity. Services like appdata will tell you how many facebook logged in sessions a mobile app and web app get but it doesn't break it down between web and mobile. And some popular mobile apps don't support login with Facebook so they don't even show up in appdata (our portfolio company Kik is an example of one).

As far as I know, there isn't a consolidated audience measurement services across web and mobile that can tell you how an app is doing in the absolute and against its peers/competitors. There should be.

comScore is in a good position to provide such a service. I used to be an investor and board member of comScore so I know the company well. I still have a small position in comScore stock. The recently launched Mobile Metrix 2.o is the analog to comScore's market leading Media Metrix web measurement product. If they combined the data into a single audience measurement product, that would be what I am looking for.

There are some other potential providers of a service like this. Quantcast could team up with Flurry (a USV portfolio company) and provide self reported data on a combined basis for companies that run Quantcast and Flurry on their web and mobile apps. But that would not be a comprehensive data set.

It's not easy to deliver a third party measurement service across web and mobile. If it were, it would have been done by now. But we neeed one, badly. I hope someone brings it to market soon.

MBA Mondays: Retaining Your Employees

I hate to see employees leave our portfolio companies for many reasons, among them the loss of continuity and camaraderie and the knowledge of how hard everyone will have to work to replace them. Many people see churn of employees in and out of companies as a given and build a recruiting machine to deal with this reality. While building a recruiting machine is necessary in any case, I prefer to see our portfolio companies focus on building retention into their mission and culture and reducing churn as much as humanly possible.

There isn't one secret method to retain employees but there are a few things that make a big difference.

1) Communication – the single greatest contributor to low morale is lack of communication. Employees need to know where the company is headed, what they can do to help get there, and why. You cannot overcommunicate with your team. Best practices include frequent one on ones between the managers and their team members, regular (weekly?) all hands meetings, quick standup meetings on a regular basis for the teams to communicate with each other, and a CEO who is out and about and available and not stuck in his/her office.

2) Getting the hiring process right – a lot of churn results from bad hiring. The employee is asked to leave because they are not up to the job. Or the employee leaves on their own because they don't enjoy the job. Either way, this was a screwup on the company's part. They got the hiring process wrong. The last MBA Mondays post (two weeks ago) was about best hiring practices. Focus on getting those right and you will make less hiring mistakes and experience less churn.

3) Culture and Fit – Employees leave because they don't feel like they fit in. Maybe they don't. Or maybe they just don't know that they do fit in. Another post in this series on People was about Culture and Fit. You must spend time working on culture, hiring for it, and creating an environment that people are happy working in. This is important stuff.

4) Promote from within. Create a career path for your most talented people. The best people are driven. They want to do more, develop, and earn more. If you are always hiring management from outside of the company, people will get the message that they need to leave to move up. Don't make that mistake. Hire from within whenever possible. Take that chance on the talented person who you think is great but maybe not yet ready. Work with them to get them ready and then give them the opportunity and then help them succeed in the position. Go outside only when you truly cannot fill the position from within.

5) Assess yourself, your team, and your company. We have discussed various feedback approaches here before. There is a lot of discomfort with annual 360 feedback processes out there. There is a growing movement toward continuous feedback systems. Whatever the process you use, you must give your team the ability to deliver feedback in a safe way and get feedback that they can internalize and act upon. You must tie feedback to development goals. Feedback alone will not be enough. Build a culture where people are allowed to make mistakes, get feedback, and grow from them. I have seen this approach work many times. It helps build companies where churn rates are extremely low.

6) Pay your team well. The startup world is full of companies where the cash compensation levels are lower than market. This results from the view that the big equity grants people get when they join more than makes up for it. There are a few problems with this point of view. First, the big option grants are usually limited to the first five or ten employees and the big management positions. And second, people can't use options to pay their rent/mortgage, send their kids to school, and go on a summer vacation with the family. Figure out what "market salaries" are for all the positions in your company and always be sure you are paying "market" or ideally above market for your employees. And review your team's compensation regularly and give out raises regularly. This stuff matters a lot. Most everyone is financially motivated at some level and if you don't show an interest in your team's compensation, they won't share an interest in yours (which is tied to the success of your company).

I believe these six things (communicate, hire well, culture matters, career paths, assessment, and compensation) are the key to retention. You must focus on all of them. Just doing one of them well will not help. Measure your employee churn and see if you can improve it over time. A healthy company doesn't churn more than five or ten percent of their employees every year. And you need to be healthy to succeed over the long run.

Fast Followers, Copy Cats, and Ripoffs

I was reading about Judge Posner's decision to throw out Apple's patent case against Motorola on CNN Money and came upon this by Florian Mueller:

Apple's "rip-off" claims are right. Judge Posner's decision doesn't prove that there was no "rip-off". He just cannot see that the patents that were shown to him, and the related infringement allegations and damages theories, substantiated a "rip-off" of the illegal kind.

I went on to read a study of accelerator programs on RRW and came upon this:

Finally he had enough data to come up with a ranking. At the top: TechStars, Y Combinator and Excelerate Labs.

Android is very much a iPhone knockoff. And TechStars and Excelerate Labs are very much YC knockoffs. I've written before that I much prefer the opportunity to invest in the innovator not the knock off. But that doesn't mean I don't appreciate the value of a good knockoff. 

Knockoffs create competition for the innovator and keep them honest. And they provide an opportunity for those that cannot, for some reason, work with the innovator.

Think about the startups that could not get into YC but did get into TechStars or Excelerate and went on to get funded, build a business, and create value for the entrepreneurs. That's a good thing.

Steve Jobs and Paul Graham are the innovators in these two markets and appropriately get the credit for their innovations. Innovators are often outraged when someone rips them off. This is from that CNN Money post on Apple vs Motorola:

This is a useful paragraph because it separates the legal issues at stake from the palpable sense of injustice Steve Jobs felt when he threatened to "go thermonuclear" and told his biographer: "Our lawsuit is saying, 'Google you f***ing ripped off the iPhone, wholesale ripped us off."

I have often felt that "palpable sense of injustice" when our firm is an investor in the innovator and a copycat competitor shows up. But there is a difference between being pissed and having a legal claim. If the innovator keeps innovating, as Apple and YC have, they will do fine and will enjoy the spoils that come from creating the category and leading it.

I think it is best to understand that all great innovations will be copied, expect it to happen, and understand that the best response is to go out and out-execute the copycat. Getting stuck in time and money losing litigation may be emotionally satisfying for a while but it often doesn't end well for anyone.

Being Naked Online

I saw this tweet from the start of Howard Lindzon's talk in Boulder yesterday:

 

 

I don't know exactly what Howard means by "naked" but I feel the opposite way. I have always tried to be naked online. To me that means real, authentic, and who you are.

I suspect that is what Howard is talking about but he will have to stop by and comment to explain his meaning to us.

We've talked about this ad naseum here at AVC, but the blogging revolution is more than a free publishing platform and a new model for media. It is self expression at its core. It is people being who they are, talking the way they talk, and doing it in public.

I have an agenda. I do not hide it. I wear it on my sleeve. I believe in certain things. I want the world to be a certain way. I make investments. I promote them. I want them to be successful. And hopefully everyone knows all of those things when they show up here. I think that is being naked online and that's how I want to be.

Feature Friday: Mobile Data Usage Tracking

Sometimes an app can be a feature that is missing from the OS, or a feature that isn't well implemented in the OS. Flashlight apps are a great example.

Another example are apps that track mobile data usage. If you have unlimited mobile data, you might not care how much mobile data you are using. That's my behavior when I am at home.

But when I travel, I am either using a prepaid mobile data card (which is what I am doing now – 1GB for 48 krone/$8US), or using a mobile roaming package from my US carrier (my wife and kids are on a 800MB roaming plan from ATT Mobile).

In either case, it is critical to know how much mobile data you are consuming, per day, per week, per trip, and per plan term.

My favorite app to do this is called My Data Manager and it is free and available for iOS and for Android.

My Data Manager has three tabs to show you how much data you are consuming on your carriers's mobile data network, how much data you are consuming by roaming on other networks, and how much data your are consuming on wifi. It also shows you what apps are consuming the most data for each tab.

You can set up your mobile plans in the app so you can see how you are doing for the current plan term.

I have been in europe since Monday morning (four days now) and I have consumed 128MB on my prepaid 1GB danish sim and I have consumed 155MB on wifi. I haven't had to roam since I have a local data sim. My wife and kids have similar data usage except that they are all roaming on other data networks and are well within their 800MB cap.

If you have a cap on your mobile data usage or if you are roaming on other data networks, I highly recommend getting My Data Manager to keep track. Mobile data is expensive when you go off plan or above plan. Keeping track gives you peace of mind and that's a valuable thing.

The art of important work, of making a ruckus and of inventing the future

Entrepreneurs teach VCs, not the other way around. And I was lucky early in my career to back Seth Godin, who taught me a lot. When I met Seth, he was writing books and building a web company. I backed that web company, Yoyodyne, which exited to Yahoo! a few years later. But books were always Seth's passion and he's written a bunch of them. He's also deconstructed the book publishing business and pushed it to do things that were considered unacceptable. I recall when he put out a free pdf of one of his books six months before the book came out. And increased the book's sales numbers in the process. He did that in the 90s.

It is old news now that Seth is doing a Kickstarter for his next book. I've thought for a long time that authors should take their advances from their avid readers on Kickstarter instead of from book publishers who will lock them up and hold them back. In something like four days, Seth has taken an advance of $216,000 and there are 26 days to go. Who knows, he might get a seven figure advance if this keeps going like this.

I am sure Seth is happy to take the big advance he is getting. But I am also sure that he is doing this, like everything he does, to make a bigger point. And in Seth's words, this is the bigger point:

But what is the book about?

It's about the connection economy and the value created when we give up doing what we're told (and avoiding what we fear) and start making art instead. The art of important work, of making a ruckus and of inventing the future.

Making art is writing a song and recording it with your friends in your bedroom. Doing what we are told is getting a label deal for your music. There is a big difference and they are not at all related to each other.

Making art is a fundamental part of being human. Consuming art is a fundamental part of being human. I am doing the consuming part as I write this. I may be doing the making part too but I am not sure.

The digital revolution has made it easier for all of us to make art and consume art. It is challenging the notions of "doing what we are told." And while I am biased because of our investment in Kickstarter, I think that Kickstarter is opening up the possibilities for artists to make the art they want to make and take it to market the way they want to to as well.

Once Seth gets his advance, he is free to do what he wants with his book. He will have thousands of people that he will need to send the book to (the folks who backed his project) but beyond that he can do what he wants. He can make the book freely available. He can decide never to publish the book. He can make it into a movie. He can make a ruckus and invent the future. It's all up to him. Artistic freedom and control.

And in a weird way, that investment I made in Yoyodyne back in the mid 90s allowed me to understand Kickstarter. Seth started programming my brain with new ways to think about making and commercializing art way back then. I've taken those new ways of thinking to other places, made them my own, and so when Perry came to see me back in 2009, I was open to his ideas in ways that I might not have been had I not had the experiences I had.

There are special entrepreneurs who teach you so much. Seth and Perry are two of them. I've been blessed to work with dozens in my career. Like Seth and his big advance, it is not the money that is the big payoff in the work that I do. It is the people and the ideas that enter your life and change your world. It is the art of important work, of making a ruckus and of inventing the future.