Posts from entrepreneurship

MBA Mondays Illustrated

I’ve encouraged folks to use the MBA Mondays content in whatever ways they want. It is all creative commons licensed and available to be used freely as long as there is proper attribution. This past week Jason Li emailed me about his illustrated version of MBA Mondays. I took a look and was very pleased to see a curated version of the work with fun illustrations on the table of contents and every post. He also included the best of the comments!

This is an example of why creative commons is such a powerful model. He didn’t have to ask my permission to do this. He added value to my work and created a new and possibly better version of it. His work is also creative commons so anyone can take what he did and add to that.

This is how knowledge should work in the digital age. It should be fluid and iterative. The text book is the old model, GitHub is the new model. So thanks Jason for doing exactly what I had hoped would happen with MBA Mondays.

The Buffalo Bet

Last year I went up to Buffalo and talked to their startup community and got a tour of the emerging startup community there. I was impressed by what I saw. Like many cities around the country, Buffalo is betting on tech and tech startups to give their economy a boost.

Part of this bet is the $5mm startup challenge called 43North. I wrote about this last year and it is happening again.

43North is the world’s largest business idea competition. Once again they are awarding $5 million in cash, in the form of a $1 million grand prize, six $500,000 prizes and four $250,000 prizes. Winners also receive space in the 43North incubator, mentorship and access to START-UP NY, which allows companies to operate free of New York State taxes for 10 years.

The competition is open to applicants ages 18 and over from anywhere around the world, in any industry, with a few exceptions, like bricks-and-mortar retail and hospitality. It is free to apply and the first round application is a high-level business summary that takes 20-30 minutes to complete. Applications are due at by June 24.

Last year’s winners hailed from places like Taiwan, Miami, Brooklyn, Toronto and Atlanta and had businesses ranging from biotech to a virtual fitting room. All 11 winners are located in Buffalo and most of them in an incubator facility located in the heart of the Buffalo Niagara Medical Campus in free space with services, classes, training, support and mentors.

This is all part of NY State Governor Andrew Cuomo’s Buffalo Billion, a huge investment in Buffalo, which once was the 8th largest city in the US. The decline of the manufacturing and related transportation businesses in the midwest in the 20th century changed all of that. But we are in a new era, one defined by technology, and Buffalo wants a part of that. If you want to be part of that resurgence and get some much needed capital for your business too, check out 43North.

Rinse And Repeat

I’d like to call out a really great blog post (and talk) my colleague Nick Grossman delivered last week. He called it Venture Capital vs Community Capital, but to me its about the endless cycle of domination and disruption that plays out in the tech sector. This bit from the post rings so true to me:

So there’s the pattern: tech companies build dominant market positions, then open technologies emerge which erode the the tech companies’ lock on power (this is sometimes an organized rebellion against this corporate power, and is sometime more of a happy accident).  These open technologies then in turn become the platform upon which the next generation of venture-backed companies is built.  And so on and so on; rinse and repeat.

So, all that is to say: this is not a new thing.  And that seeing this as part of a pattern can help us understand what to make of it, and where the next opportunities could emerge.

Nick wrote the post and did the presentation for the OuiShareFest, an international gathering of folks interested in the peer economy. Nick starts out noting that the early enthusiasm for the peer economy has moderated with the understanding that a few large platforms have emerged and have come to dominate the sector.

Nick’s presentation and post, therefore, was a reaction to those emotions and a reminder that what goes around comes around eventually. That is certainly what I have observed in the thirty plus years I’ve been working in tech. Rinse and repeat. Same as it ever was.

Women Entrepreneurs

There is gender bias in the startup sector. Anyone who believes otherwise has their head in the sand. And yet there are vast numbers of women entrepreneurs out there. The Gotham Gal has been profiling one a week on her blog (Women Entrepreneur Mondays) for five years and never has a shortage of women entrepreneurs to profile. So the truth is women are starting companies every day and participating in the startup sector. But it isn’t easy to be a women entrepreneur and they face a set of challenges that is unique to their situation.

Sukhinder Singh Cassidy, a serial entrepreneur in Silicon Valley and a former Google executive, surveyed a bunch of successful women entrepreneurs and penned a post with all that she learned from that work. It’s a good read and full of stats about the differences between men and women entrepreneurs. It also has a great list of actions we can all take at the end to make things a bit easier for women in startup land.

Through the work of women, like Sukhinder and Sheryl Sandberg, and my favorite – The Gotham Gal – women are making their voices heard in startup land and things are changing for the better. But there is still a lot of work to be done and Sukhinder’s list is a good place to start if you want to help make a difference on this issue.

The No Stack Startup

There’s been a lot of discussion in recent years that the “full stack approach” is the future of startups. My friend Chris Dixon articulated the reasons for going “full stack” very well in this post from last year. But like many things, the best approaches are at both ends of the spectrum. Either go “full stack” or go “no stack.”

My partners Andy and Albert have been writing about the no stack approach this past week and it is the topic of the week at

At USV we have never been excited by the full stack approach. It is well suited to investors who have unlimited amounts of capital to invest and a need to put all that cash to work. We aren’t that kind of investor. We like low capital requirements and low burn rates and extremely high rates of return on invested capital. So no stack seems like it will suit us well.

Our partner Brad said in an internal email about this today, “We need to think through defensibility, margin sustainability, and not having control of some infrastructure.” So that’s what we are doing now. And if anyone would like to weigh in on this, the comments here at AVC is a good place as is the topic of the week conversation.

Well That Sucked

I just wrote a longish post on the plane to SF this morning, hit publish, and lost everything.

Normally WordPress autosaves the post when an error happens but it did not this time.

So I’m not going to have time to rewrite that post today.

So maybe we can talk about the topic instead.

I wrote about the best legal/tax structure for social entrepreneurs. I am seeing more and more social entrepreneurs adopt the for profit corporation for their social enterprise. With innovations like the B Corporation for aligning interests, and with more investors understanding that financial returns and social impact are not mutually exclusive, it seems like this may be the better structure for social enterprises that can create a sustainable business model.

Valuation As A Scorecard

When you set out to build a great company, it’s hard to know how you are doing along the way. There does come a time when you know you’ve done it. Apple, Google, Facebook, Amazon, Salesforce, Tesla, etc got there. We know that. And the founders of those companies know that too.

But two years in, three years in, four years in, it’s hard to know how you are doing. The market moves quickly. Customers are fickle. Competition emerges. Trusted team members leave. Your investors flake out on you. And so on and so forth.

So entrepreneurs want something they can hang on to. They wants a scorecard. A number. Validation that they are getting there.

And that thing is often valuation. If the “market” says you are now worth $1bn versus $500mm a year ago and $200mm two years ago and $50mm three years ago, then you are making good progress. The numbers tell you so. And it feels good.

Valuation can also be used to compare how you are doing against your friends. Your YC classmate got $100mm and you got $200mm. You are doing twice as well as she is. That feels good, at least it feels good to you.

Valuation is an entrepreneur’s scorecard. It has always been this way in startup land, but it is even more so these days when financings and the valuations are reported every day as the most important news items in the tech blogs. Tech blogs are the stock ticker of startup land. And entrepreneurs and everyone else around them watch the ticker waiting for the next “unicorn” to be printed.

I hate the word unicorn. It’s using fantasy to describe something very much reality. But I don’t want to digress from the larger point I’m making to go down the unicorn rat hole. Just please don’t use that word around me. I will likely throw up and that won’t be pleasant.

This obsession with valuation as the thing that tells you and the world how you are doing has a dark side. And that is because valuation is just a number. Unless you sell your business for cash at that price, valuation is just a theoretical value on your company. And it can change. Or you can get stuck there trying to justify it year after year all the while doing massive surgery to your cap table to sustain it.

And the markets can move on you and one day you are worth $2bn and the next day your are worth $500mm. Did you just mess up by 75%? No. The market moved on you.

The message of this post is don’t let yourself get sucked into a world where a number is your measure of self worth. Because you don’t control that number. The market does. And some days the market is your friend and other days it is most decidedly not your friend.

Measure yourself on whether your employees are happy. Measure yourself on whether your customers are happy. Measure yourself on how much free cash flow your business is generating. Measure yourself on how your brand is known and appreciated around the world. Measure yourself on how your spouse and children feel about you when you come home from work each day. You control all of those things, at least to some degree.

But please don’t measure yourself on valuation. It might make you feel good today. But it won’t make you feel good every day.

Taking Inspiration From Failed Projects

It’s easy to dismiss ideas after the first attempt fails, but I don’t think we should do that. Instead we should learn from what worked and what didn’t.

I saw the news that the Mayweather fight was watched on Periscope by many people and thought “that was the same thing that used to happen on” failed, or actually pivoted into a big success, but did not work as a business. I’m not saying Periscope or YouNow (our bet in that sector) will be successful but if they have learned from what worked at and what did not, they will have a better chance of success.

I’m reading Nathaniel Popper‘s excellent history of Bitcoin called Digital Gold (out May 19, available for pre-order) and he goes all the way back to the mid 90s to tell the story of the development of Bitcoin. In 1997, Adam Back invented Hashcash as an early attempt to create a digital currency. It failed as a digital currency in its own right, but later emerged as the proof of work algorithm in Bitcoin.

It’s easy to look at Bitcoin and say “that came out of nowhere”, but the truth is Bitcoin emerged from several decades of work in cryptography, peer to peer networks, and digital currencies. Satoshi had some breakthrough ideas in his white paper, but much of it was inspired by earlier work done by others.

That’s the way it always is. In tech, in literature, in the arts, and in most everything.

Having Empathy For Your Users

My partner Albert has a great post up today on the limitations of data and A/B testing in managing a product. He strongly advises that product teams do two things that many don’t do

1) do in-person product testing sessions to see users interacting with the product and develop an understanding of why users struggle with aspects of the product

2) use the company’s product (really all employees should do this)

I want to echo Albert’s point and suggestions. I feel like the companies we meet with and work with generally do a good job of instrumenting their products and collecting on data on what is working and what is not working. But they often don’t have good answers for why the behavior they are seeing is happening. It’s hard to fix something you know is broken unless you understand why it is broken.