I sent this out last night. In case you missed it, I thought I’d share it with all of you this morning.
A book that has really stayed with me since I read it is The Prize, the story of the attempt to reform the Newark public school system.
And there is a particular scene in that book that really sums it up for me.
The author is at an anti-charter school protest and meets a woman who had spent that morning trying to get her son into a new charter school that had opened in Newark. The author asks the woman how it is possible that on the same day she would spend the morning trying to get her son into a charter school and the afternoon at an anti-charter protest.
The woman explains that most of her family are employed in good paying union jobs in the district schools and that the growth of charters is a threat to those jobs.
As I read that story I was struck by how rational the woman was acting. She was helping to preserve a system that provided an economic foundation for her family and at the same time opting her son out of it.
In some ways that story is a microcosm of what is happening in the economy right now. Many people in the US (and around the world) are employed by (and trapped in) a system that no longer works very well. And although they realize the system is broken, they fight to support it because it underpins their economic security.
My partner Albert argues for a universal basic income to replace the old and broken system so we as a society can free ourselves from outdated approaches that don’t work anymore and move to adopt new and better systems.
I think it is worth a shot to be honest.
I saw Joe Fernandez‘ tweet a few days ago and thought “he is making an important point.”
too many young entrepreneurs talk about vc’s like they’re heroes and their blog posts are scripture
— Joe Fernandez (@JoeFernandez) August 19, 2016
VCs are not heroes. We are just one part of the startup ecosystem. We provide the capital allocation function and are rewarded when we do it well and eventually go out of business when we don’t do it well. I know. I’ve gone out of business for not doing it well.
If there are heroes in the startup ecosystem, they are the entrepreneurs who take the biggest risks and create the products, services, and companies that we increasingly rely on as tech seeps into everything.
VCs do have a courtside seat to the startup world by virtue of meeting and getting pitched by hundreds of founding teams a year and sitting in board meetings for many of these groundbreaking tech companies. We get to see things that most people don’t see and the result of that is that we often have insights that come from this unique view we are given of the startup sector.
Another thing that is important to know about VCs is that we operate in a highly competitive sector where usually only one or two VC firms are allowed to make a hotly contested investment. So in order to succeed, VCs need to market ourselves to entrepreneurs. There are many ways to do that and the best way is to back the most successful companies and be known for doing that. There is a reason that Mike Moritz and John Doerr were invited to lead Google’s initial VC round. By the time that happened, they had established themselves as the top VCs in the bay area and their firms, Sequoia and Kleiner Perkins, had established themselves as the top firms in the bay area.
Another way that VCs market ourselves to entrepreneurs is via social media. And blogging is one of the main forms of social media that VCs can use to do this. And, given that VCs have this unique position to gather insights from the startup sector, we can share these insights that we gain from our daily work with the world, and in particular entrepreneurs. If anyone has played this blogging game well enough to get into the top tier, it is me. I know of what I speak.
So how should entrepreneurs use this knowledge that is being imparted by VCs on a regular basis? Well first and foremost, you should see it as content marketing. That is what it is. That doesn’t mean it isn’t useful or insightful. It may well be. But you should understand the business model supporting all of this free content. It is being generated to get you to come visit that VC and offer them to participate in your Seed or Series A round. That blog post that Joe claimed is not scripture in his tweet is actually an advertisement. Kind of the opposite of scripture, right?
But you should also know that there is data behind that blog post, gained from hundreds (or thousands) of pitches and dozens (or hundreds) of board meetings. If VCs are good at anything, we are good at pattern recognition and inferring what these patterns are leading to. And so these blog posts that are not scripture, and are in fact advertising, can also contain information and sometimes even wisdom. So they should not be ignored either.
What I recommend to entrepreneurs is to listen carefully but not act too quickly. Get multiple points of view on important issues and decisions. And then carefully consider what to do with all of that information, filter it with your values, your vision, and your gut instinct. That’s what we do in our business and that is what entrepreneurs should do in their businesses.
If you are at a board meeting and a VC says “you should do less email marketing and more content marketing”, would you go see your VP Marketing after the meeting and tell them to cut email and double down on content? I sure hope not. I hope you would treat that VC comment as a single data point, to be heard, but most likely not acted on unless you get a lot of similar feedback.
VCs are mostly not idiots and can be quite helpful. But we are not gods and our word is not scripture. If you treat us like that, you are making a huge mistake. And I appreciate Joe making that point last week and am happy to amplify it with this post.
The New York Times has a piece today about how bay area tech companies are giving the Phoenix Arizona economy a boost.
I think this is a trend we are just seeing the start of.
A big theme of board meetings I’ve been in over the past year is the crazy high cost of talent in the big tech centers (SF, NYC, LA, Boston, Seattle) and the need to grow headcount in lower cost locations.
This could mean outside of the US in places like Eastern Europe, Asia, India, but for the most part the discussions I have been in have centered on cities in the US where there is a good well educated work force, an increasing number of technically skilled workers, and a much lower cost of living. That could be Phoenix, or it could be Indianapolis, Pittsburgh, Atlanta, and a host of other really good places to live in the US.
Just like we are seeing tech seep into the strategic plans of big Fortune 1000 companies, we are seeing tech seep into the economic development plans of cities around the US (and around the world). Tech is where the growth opportunities are right now.
A good example of how this works is Google’s decision to build a big office in NYC in the early part of the last decade and build (and buy) engineering teams in that office. Google is now a major employer in NYC and the massive organization they have built has now spilled over into the broader tech sector in NYC. My partner Albert calls Google’s NYC office “the gift that Google gave NYC.”
We will see that story play out across many cities in the US (and outside of the US) in the next five to ten years. It is simply too expensive for most companies to house all of their employees in the bay area or NYC. And so they will stop doing that and go elsewhere for talent. That’s a very healthy and positive dynamic for everyone, including the big tech centers that are increasingly getting too expensive to live in for many tech employees.
I am fifty five years old today.
I have always loved having a birthday in late august.
It’s a time of year when things slow down.
It’s a time of year to be surrounded by friends and family.
It’s a time of year that begs for reading a good novel on the beach.
And I am doing all of those things.
What I am not doing is letting the aging process get me down.
I am enjoying getting older.
I particularly enjoy watching things I helped create grow into amazing things.
I am mostly talking about our three children.
But I am also talking about the companies we helped get started over the past twenty years.
And I am also talking about philanthropic and civic efforts we have helped get off the ground.
Time has a way of revealing who you are and what matters to you.
And, at age fifty five, I have put in enough time on planet earth to have those revelations.
And that feels great.
It’s funding friday. Time for some crowdfunding. Here are three projects I like:
- American Red Cross fundraiser for Louisiana Flood Relief on Crowdrise
- Greycork (low cost home furniture for millenials) convertible note on CircleUp
- The New York Fabric Convenience Store on Kickstarter
I have backed the first and last projects and think the Greycork deal looks interesting.
I went for a bike ride this morning and while I was riding I thought of something I need to do today. I didn’t want to stop, take out my phone, remove my sunglasses, and type in the “to do” into my calendar.
So instead, I took out my phone, opened up a calendar entry, hit the microphone button, and spoke into my phone, then hit save. I did all of that in about three or four seconds. When I got home and looked at my calendar, the entry was perfect.
But you know what? I rarely, if ever, do that. I could do it all the time. But I don’t. I think I use voice input on my phone a few times a year.
I am not sure why that is. The voice input on Android is very good. I suspect the same is true on iPhone. And I am increasingly using our Amazon Echo for information. So why don’t I talk to my phone more often? I am not sure.
So I started a Twitter poll this morning to see what others do.
Here it is:
Do you use voice input on your phone?
— Fred Wilson (@fredwilson) August 18, 2016
Please participate in the poll and/or leave a comment. I am curious to see what people are doing these days with voice input.
Four months ago, I blogged about our portfolio company Kik’s chat bot platform.
If you believed the hype around chat bots, you would have expected every mobile developer to quit developing for iOS and Android and start developing for these new new chat bot platforms.
But that has not happened.
I would be hard pressed to name a super popular chat bot on Messenger, Kik, Slack, and Telegram.
It is not for a lack of trying. There are over 300 chat bots listed on botlist right now. Many from well known companies. And over 20,000 chat bots have been built on the Kik platform since it was launched.
So what is going on?
Kik CEO Ted Livingston addressed some of that yesterday with a post describing what has not worked and what has.
His big takeaways are that AI driven chat bots have underwhelmed and that conversational UIs are not what users are looking for.
He suggests that developers should look at bots as a low friction way to get new users to try out and use their service instantly:
When you look closely at WeChat, the chat app that has completely taken over China, you see that its success as an ecosystem of services comes down to the same things: low-friction access to apps; sharing-related discovery (as well as QR codes); a common interface; and messaging as the front door to a world of digital experiences. In fact, there’s no major conversation-based service in WeChat. Instead, there’s just a whole lot of instant interactions.
I think chat bots will find their place in the mobile user’s daily habits. I have encouraged several entrepreneurs who have pitched me on new projects to consider starting with chat bots instead of mobile apps. And we have seen at least one of our portfolio companies move from a native mobile app to a chat bot as their primary go to market strategy.
New user behaviors take time to develop and sometimes require a breakthrough app to get things started. That’s where we are with chat bots. The hype phase is over and we are now into the figuring it out phase. That’s usually when interesting stuff starts to happen.
ScriptEd is a non-profit organization that equips students in under-resourced schools in NYC with the fundamental coding skills and professional experiences that together create access to careers in technology. It brings its tuition free program directly to schools, where classes are taught by software developers on a volunteer basis. Classroom volunteers commit to teach for the entire school year (late September through late May) two times a week. Each volunteer is part of a four-person team, and is supported by ScriptEd’s staff members.
As the end of summer approaches, ScriptEd is gearing up for the 2016-2017 school year. The organization is looking for software developers in NYC to help to serve 900 students in 37 under-resourced high schools.
Volunteering with ScriptEd is a great way to meet like-minded people while increasing inclusionary access to the tech work force in NYC.
If this is interesting to you, you can apply to volunteer at this link: bit.ly/ScriptEdVolunteer.
A ScriptEd staff member will reach out and schedule a time to discuss the volunteer commitment further once an application is submitted.