Posts from Books

One of the many great things about vacations is reading books. Vacation is the one time that I can really prioritize reading books (as opposed to everything else I read).

I just finished Scott Kupor‘s Secrets Of Sand Hill Road, a book for entrepreneurs about rasing capital from venture firms.

Scott makes the point numerous times in the book that the capital raising process is asymmetric for entrepreneurs in that they do it a few times in their career and VCs do it every day.

That is true for the pitch meetings, the negotiation process, and the post financing relationship too.

What Scott does in this book is break down every part of the process and explain it in plain english so that entrepreneurs can understand what’s going on and why it matters to them.

That last part is important, this book is written for entrepreneurs, not VCs.

Scott uses real world examples, mostly investments made over the last decade by his firm A16Z, to make the lessons he is delivering more “real.”

And he uses spreadhseet examples in one chapter and shows how various events can change the cap table for everyone.

It’s very much a “how to” book, more practical than theoretical.

There have been other books written about this topic, I like Brad Feld and Jason Mendelson’s Venture Deals, which is on its third edition now.

Jeff Bussgang’s Mastering The VC Game is also great.

You could teach an MBA or undegraduate course on capital raising for entreprenuers with these three books.

It would be a great course.

If you plan to be raising venture capital for your startup and don’t have the benefit of experience or a fantastic course on the topic, I would strongly recommend you pick up Scott’s book, or all three books, and spend some time reading them now or on your next vacation.

I have had this book, A Man For All Markets, on my kindle for the past year. I can’t recall who recommended it, possibly my friend Jeremy, but I can’t be sure.

A couple weeks ago, I had lunch with my friend Harry and he again suggested it to me. I decided to put it at the top of my to read pile (a virtual pile) and have been reading it for the past week.

It’s a terrific book, nominally the life story of Edward Thorpe, the math professor, blackjack card counter, and hedge fund manager.

The book is a reminder that math, particularly the highly agile mathematical mind, is a very powerful thing. But it is also full of amazing insights on risk and return, from gambling to investing.

I particularly liked this observation that Edward makes after testing his “ten count” system with the the backing of some less than reputable characters:

For the second time, the Ten-Count System had shown moderately heavy losses mixed with “lucky” streaks of the most dazzling brilliance.

My person experience with investing includes plenty of moderately heavy losses and the occasional “dazzling brilliance.

I am pleased to know that pairing is common in all sorts of risk taking ventures.

If you like math, cards, and/or investing, I am sure you will enjoy this book as much as I am.

Last week during our CEO Summit, we had the opportunity to hear my partner Albert interview Angela Duckworth, author of the book Grit.

Angela is a Professor of Psychology at University of Pennsylvania and founder and Scientific Director of The Character Lab.

Angela has the ability to make complex concepts simple and combines her expertise in human behavior with a wicked sense of humor.

She is a great public speaker and everyone enjoyed hearing her talk to our group.

Her book Grit is about the power of perseverance.

It explains why some people have grit and how you can recognize it in people.

She also explains why grit is more important than talent in many cases.

If you hire and manage people, if you run start and run companies, if you invest in people and their projects, then Grit is a book you should read.

Our portfolio company Wattpad, which allows people to write and read stories on their phones, recently launched an entirely new mobile reading (and writing) experience called Tap. In Tap, the stories unfold like you are watching someone text with you. It’s an entirely new way of writing and reading stories and I haven’t seen anything take off like this in a while.

In just a couple weeks since launching, Tap has achieved all of this:

• Over 100 million taps in the first week

• 25,000 user-generated Tap stories created in the first weekend

• 40 Tap by Wattpad stories already have more than 1 million taps each

• #2 – Top Free Apps (Books Category) in the U.S. App Store (and as high as #1 in the books category and Top 40 overall)

• #7 – Top Free Apps (Books & Reference Category)  in the U.S. Google Play Store

While Wattpad replicated the feeling of writing and reading traditional stories (like books) on a phone with its Wattpad app, the Tap storytelling is an entirely new experience and replicates how people communicate on phones. It will be interesting to see how the two separate experiences (Wattpad and Tap) perform over time and whether there is any movement by writers and readers back and forth between the two.

I don’t do this very often, but I am going to break a rule and recommend a book that I just bought and have not yet read.

My friend Joi Ito, along with Jeff Howe, a professor at Northeastern, have written Whiplash. It comes out tomorrow.

Here’s my edited version of the blurb:

The world is more complex and volatile today than at any other time in our history. The tools of our modern existence are getting faster, cheaper, and smaller at an exponential rate, just as billions of strangers around the world are suddenly just one click or tweet or post away from each other. When these two revolutions joined, an explosive force was unleashed that is transforming every aspect of society, from business to culture and from the public sphere to our most private moments.

Such periods of dramatic change have always produced winners and losers. The future will run on an entirely new operating system. It’s a major upgrade, but it comes with a steep learning curve. The logic of a faster future oversets the received wisdom of the past, and the people who succeed will be the ones who learn to think differently.

In WHIPLASH, Joi Ito and Jeff Howe distill that logic into nine organizing principles for navigating and surviving this tumultuous period. From strategically embracing risks rather than mitigating them (or preferring “risk over safety”) to drawing inspiration and innovative ideas from your existing networks (or supporting “pull over push”), this dynamic blueprint can help you rethink your approach to all facets of your organization.

Joshua Cooper Ramo was introduced to me a few years ago by my friend Joi Ito. I’ve gotten to know him a bit and he’s one of those people that knows a lot about a lot of things.

Earlier this year he told me he was writing a book. I wrote it down and finally got around to reading it this weekend (after another friend mentioned it to me).

The book is called The Seventh Sense and it is about everything that I think about and talk about here on AVC.

The tag line for the book is “Power, Fortune, and Survival In The Age Of Networks.”

I am enjoying it and think you all will too.

One of the things I am most proud of about our portfolio at USV is that we have invested in a handful of companies that are slowly but surely changing the way content creators reach their audience and make money doing that. I like to think of it as the evolution of the studio model that has prevailed in content for as long as I’ve been alive. Some of the companies that would fit into this category are Kickstarter, SoundCloud, YouNow, Splice, VHX, Mediachain, and Wattpad.

Wattpad is one of the most interesting of the bunch. Wattpad is a community of readers and writers that operates natively on the web and mobile devices. It is, along with Kindle and Audible, one of the “big three” in the Books category on mobile phones.

Wattpad has a global monthly audience of 45mm people, mostly young and trending female, that read stories that are written on Wattpad for the community of readers that is there. That’s a big number. And that has gotten the attention of the film and television business. In 2014, Wattpad author Anna Todd’s serialized story After (over 1.3 billion reads and more than 6 million comments) was optioned by Paramount and is now being developed into a feature film (it has also been published as a book by Simon & Schuster).

So Wattpad has created Wattpad Studios to help other authors on Wattpad do the same thing. And yesterday Wattpad Studios announced a partnership with Turner to create stories for Turner’s Tales From The Crypt.

The global internet allows anyone to be a writer and anyone to be a reader. The stories that emerge from this community powered content creation and consumption model on Wattpad are rich and diverse. And so it makes a ton of sense that Wattpad would help these emerging storytellers reach a broader audience through the power of film and television. This should be a good service to the Wattpad writer community and a good business too.

I am reading my friend Ashvin Chhabra’s book The Aspirational Investor. I am not much of a fan of business books or books about investing so you might ask “why are you reading that book?” And that would be a great question.

I studied finance at Wharton and learned a bunch of modern finance, investing and portfolio theory. I understand how people on wall street and the world of modern asset management approach investing but we have never embraced it on our own investing.

We earned all of our wealth taking highly concentrated positions in startups. We gave most of it back in the 2000 crash which is what happens when you take highly concentrated positions in risky assets. Then we earned it back the same way. We have diversified over the past decade but almost entirely into self owned and operated real estate and cash. We don’t own public stocks other than shares of public companies we backed when they were startups and Google. We don’t own bonds.

So I was attracted to Ashvin’s thinking on finding a wealth creation and management strategy that aligns with your own personal goals and needs and desires instead of one that is cookie cutter, formulaic, and generic. That is what we have done. And I am seeking to validate our strategy or at least understand what is right about it and what is wrong about it. After all, we created it on our own based on what felt right to us.

Ashvin’s Wealth Allocation Framework “shifts the focus of investment strategy from portfolios and markets to individuals and the objectives that really matter: things like protecting against unexpected financial crises, paying for education or retirement, and financing philanthropy and entrepreneurship”.

That sounds smart to me and so I am reading his book and enjoying it very much. If you think about investing differently or want to, you might enjoy it too. You can find it on Amazon.

I’ve been reading The Business Blockchain this weekend. It was written by AVC community member William Mougayar.

This book started out as a Kickstarter project which I blogged about at the time. If you backed that project you will get a copy of this book. If not, you might want to get a copy on Amazon.

I am not done with it yet, but the book makes a complex subject, blockchain technology, accessible for the non-technical. It also lays out some of the more obvious uses cases for the technology and explains how the blockchain technology market is evolving.

If you think you might want to start a business based on blockchain technology or if you think blockchain technology is going to reshape a market you are working in, or if you just want to understand this thing that your son or daughter is obsessed about, then this is a great book to read.

I am also quite proud that the conversations we have had on this blog on this topic over the past five years have shaped William’s work and certainly had something to do with his interest and his growing expertise and reputation in this area.

This blog community is a talented group and we have helped each other grow and develop. This book is just one of many examples of that.