Posts from August 2012

Google has announced they have made a change to their algorithms to include valid DMCA takedown requests as a negative signal in their search results. I believe this is a step in the right direction and I am pleased to see Google do this.

It's hard to argue that the Internet can regulate itself when content owners point to Google search results that show blatant copyright violators on the first page and fully licensed services buried four pages down. So Google is addressing that. That's a good thing.

But I think we can do more. In the world of spam and malware, there are third party services that provide whitelists and blacklists that are used by various services and platforms to help them keep their services clean. I would like to see this approach extended to copyright.

It would be best if a competitive marketplace developed for copyright whitelists and blacklists. The list providers would use signals like number of valid takedown notices and a host of other data points, ideally provided by the marketplace of services and platforms, to produce real time lists of what services are fully compliant (whitelist), what services are blatantly violating copyright (blacklist), and everyone else (greylist).

Being on the greylist would not hamper a new service from entering the market. All new services built by three engineers in a loft would start out on the greylists. But over time they could get onto the whitelists by properly respecting copyright in their service. Whitelisted content services would benefit in the same way that whitelisted services benefit in the word of email.

Google effectively runs their own whitelists and blacklists in their email business and in their search business. But if there were truly independent and competitive providers of whitelists and blacklists for copyright, the entire market could do this sort of thing. And ideally Google would participate by providing data to these third parties and using the third party lists in their algorithms.

When I think about solving thorny problems like copyright, I like to look at how the Internet has solved similar problems and think about how these approaches can be extended to solve new problems. Whitelists and blacklists have been very effective in areas like spam and malware and I think they would be a great approach to address the copyright issues as long as they are built and managed by independent competitive third parties.

I love quotes. Back in the early days of Twitter, we used to tweet a quote of the day. And I tumbl a lot of quotes I find on the web. So when Max Yoder suggested to me a week or so ago that we do a fun friday on quotes, I was sold before even fininshing his short email.

The idea is you comment on this fun friday post with a favorite quote of yours.

I will start with this gem from my all time favorite person to quote, Winston Churchill:

It is a good thing for an educated man to read books of quotations.

Now it's your turn.

I wrote a post about Bitcoin last November wondering if it was over or if we were just in a down phase in the hype cycle (http://www.avc.com/a_vc/2011/11/bitcoin.html).

In the nine months since that post, Bitcoin has made a nice recovery. The price is up and volume of transactions is increasing.

Bitcoin is still very much a fringe thing and is tiny as these things go. Compared the the volume of transactions Square will do with Starbucks, Bitcoin looks like a joke.

But I like to pay attention to the jokes, the laughing stocks, because occasionally they get the last laugh.

I am curious what the AVC community thinks about Bitcoin these days.

I have said many times, here and elsewhere, that I read every comment left on AVC. That is a true statement and remains true to this day. But I can also tell you that it is a struggle and gets more so every day.

Yesterday on my flight to the bay area I was able to go through a week of backlog of comments and get caught up on a bunch of conversations that were sitting in my inbox unread. I don't know if anyone noticed that I had not been that engaged in much of last week's conversations, but the truth is I had been mostly absent.

If nobody noticed or cared, that is a good thing in my book. The community here is large and engaged. They can have a great conversation without me. So that feels good. But I still feel that as the conversation starter it is just not right to be absent from the conversation. And so it bugs me when the unread comments pile up.

I have long made peace with not reading every email that is sent to me. I bet I don't read more than 25% of the emails sent to me these days. I still manage to read every email my wife and kids send to me. And I still manage to read most of the email my colleagues at USV send to me. And I still manage to read most of the email our portfolio companies send to me. Beyond that, it's a crap shoot. I've written about that and most folks know that's how I'm managing email nowadays.

But I don't want to go there with blog comments. I figure that if you take the time to leave a comment, I should take the time to read it. And so I try to get through as much of the prior day's conversation as possible before I start a new one. That's what broke down last week and required a plane ride across the country to get caught up.

I mention all of this because I want folks to know that I remain committed to reading a comment if you take the time to leave one and because I wonder if there has been a noticeable falloff in my engagement. I am feeling the struggle and I am curious if it is obvious.

Last fall I wrote a post on Sustainability and ended it with this thought:

I am tempted to develop a course on this topic. I think we need a lot more of this type of thinking in business. It seems in such short supply these days.

So I am excited to announce that I am going to teach a class on this topic. It will run the entire month of October and it will be integrated into MBA Mondays for the month of October.

I am using our portfolio company Skillshare's brand new Hybrid Class model so that anyone in the world can take this class.

Here is how it works (taken from this page outlining the course):

– This is a project-based class. You’ll work collaboratively with other students to complete your project at your own pace. Along the way, you’ll have project milestones, weekly resources, and office hours to help you with your project. Our project will be to build a "Sustainable Business Model Canvas."

– Every Monday morning, you’ll receive a weekly email with resources, readings and questions to guide you through your project. This will also be my weekly MBA Monday blog post for those who are regular AVC readers.

– Use the Discussions tab in the Skillshare class page to ask questions, share resources, and get feedback on your projects. You can also host or join a Local Workshop in your city to meet with other students in person.

– I will will host weekly livestreamed online Office Hours where I will answer questions, give feedback, and guide you to successfully complete your project.

If you want to take this class, you can sign up here. If you are a regular AVC reader or regular MBA Mondays reader, you are going to at least audit this class because it's going to be taking over the monday posts for the entire month of October. Either way, I am excited to do this. Sustainability is a big issue in business today and I think this is a great opportunity to get the key ideas and issues out there in a way that as many people as want can consume them.

When I introduced this series on People, I stated that it was going to have a bunch of guest posts because there are many people who know a lot more about the people side of business than I do. One of them is Susan Loh who is Head of Talent at Foursquare.

I asked Susan to write a guest post explaining how they manage both recruiting and HR at Foursquare. And she has done just that.

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Foursquare’s approach to Recruiting & HR

In Fred’s previous post, he described the importance of having a tight relationship between culture and hiring. I agree 100%, which is why I’ve always struggled with HR and recruiting being separate teams. At my previous companies, Google and Yelp, there was always a swift hand-off from recruiting to HR on the new hire’s first day. It made life easy for each party, but was it the best for the employees? For this post, I’ll describe the challenges I experienced with having split teams and how I’m trying something different at foursquare.

Recruiting vs HR

As a recruiter, the most important part of the job is to close offers. This often means setting high expectations for how wonderful the new opportunity will be. Whatever it takes – always be closing. But what if we over-promised? At previous companies, it was tough to keep tabs on my new hires because I was so focused on the next set of recruits. Sometimes I didn’t know what team they landed on. Often, I didn’t know if they were happy and engaged. There was no feedback loop for me to know that what I was selling to my candidates was actually true. This is risky and has potential to cause serious turnover.

On the flip side, as an HR manager, your ultimate goal is to retain great talent. You build compensation structures, learning & development programs, performance management systems, and rewards programs to help you achieve this goal. But to succeed, you have to gather feedback from employees and know what they need. You have to be accessible and provide a safe haven for employees to come vent to you. You have to have a pulse on the entire organization.

But in reality, think about how often the average employee interacts with HR. Based on my experience, I only saw HR on my first day and on my last day. If I had a question, I emailed a ticketing system and they got back to me a couple days later. There is no feedback channel or safe haven. For so many reasons that could warrant a separate post, traditional HR departments have a tendency to be pushed to the side, disconnected from the organization, and as a result, ineffective at having a positive impact. And this is a huge bummer because every HR manager I’ve met wants to do so much more.

A new approach

When the time came to figure out how to scale HR & Recruiting at foursquare, I felt that I could solve the above issues by merging the two organizations into one unified Talent Team. I view the Talent Team as a full service organization that is with you from the day you apply to the company to the day you leave the company. We are responsible for recruiting, onboarding, training, developing, and retaining great people. Our performance is measured by the performance of the people we hire, not by the sheer number of people we hire.

In practice, this means recruiters need to be so much more than just recruiters. My team meets monthly to find ways to tweak and refine the onboarding experience for new hires. We schedule regular check-ins with each person we hired to see how they are doing and figure out how we can better support their career growth. We come up with innovative programs to develop and motivate employees. We escalate feedback we’re hearing to the executive and management teams. Above all, we provide one trusted point of contact for all candidates and employees to turn to when they need something.

The Talent Team in action

Here are just a couple of examples of where I’ve noticed the advantage of a Talent team over Recruiting/HR.

1) Fulfilling promises – When recruiters have to play the role of HR, they are held accountable for fulfilling the promises they made during the closing process. For example, many of our candidates have strong entrepreneurial spirits and talk of founding their own company. To close them, I sell them on how much they will benefit from being part of the foursquare story, helping us get from small startup to big successful company. It’s these ambitious, entrepreneurial employees that become the stars of your company, so the more you make good on this promise, the longer you’ll retain them. So how do you do it? The company has to be transparent on everything – company decisions, user growth metrics, competitive threats, etc. It’s ultimately up to senior management to lead by example but the Talent Team serves as a gut check. If we notice the culture changing, or morale dropping, or frustrations building, we have a vested interest to inform management immediately and help them troubleshoot the situation.  

2) Compensation reviews – In the traditional model, recruiting determines the starting compensation package, usually working within bands provided by HR. When review time comes, HR works with management to determine performance-based raises. Some companies have standard percentage-based raises for ‘meets expectations’ and ‘exceeds expectations’ but there’s a key piece of information missing. How hard did the employee negotiate their initial offer? Some candidates accept on the spot while others push their recruiter so close to the edge that the recruiter almost gives up and walks away from the negotiation table. If HR works purely off a compensation analysis spreadsheet and assigns standard raises, the candidates that accepted on the spot will always be paid less than their tough-negotiating peers. This is unfair. Recruiters have to be part of these conversations and with the Talent Team model, they are.

3) The little details – During the traditional hand-off between recruiting and HR, you are at risk for dropping the ball on something. There are just too many moving pieces in the onboarding process – start date, offer paperwork, relocation, immigration, IT preferences, team allocation, and more. With the Talent Team model, you have fewer cooks in the kitchen. The recruiter should know everything the new hire needs so it’s more efficient and reliable for the recruiter to be responsible for the onboarding process. First impressions do matter – do everything possible to ensure your new hire’s first week goes smoothly.

Upcoming challenge

The Talent Team model is still new and we haven’t figured everything out yet. So far, what I love most about this model is we have such a strong pulse on the organization. If employees are unhappy about something, we are usually one of the first to know, and employees look to us for help.  And the best part? We can help. Information and feedback from all directions flow through the Talent Team, and we are uniquely positioned to take everything we are hearing and turn it into constructive action.

Our biggest challenge is staying small and lean, while the larger organization continues to grow at a quick pace. The only way we can keep up is if we do a good job of building the foundation. Off the top of my head, I think that means a culture based on open feedback, strong hiring values that sync with company values, and a well-trained management team that we can leverage for help. But I’m sure I’m missing pieces of the puzzle and I look forward to continuing the conversation with you. Thanks for reading!

I've written a fair bit about how we are using technologies like Bluetooth and Airplay in our homes and cars to connect our tablets and phones to our cars and home entertainment systems.

I've thought Airplay was the winning model because Apple is pushing it hard and integrating it into their product line across the board. Plus Airplay supports higher bandwidth applications like video and covers greater distances.

But an experience I had this week makes me take pause on that assumption. Our newest car has excellent bluetooth audio capabilities. Everyone's phones are paired to it and anytime anyone wants to take control of the car audio with their phone (iPhone or Android), they can play any audio app they want on their phone and the music plays in our car. This is true of most of the cars coming off the factory floors these days.

My son is particularly fond of taking control of the audio in the car and DJing. Yesterday he asked me why he couldn't do the same thing with our home entertainment system, which is built on Sonos. We have an airport express in the line-in on the Sonos and we can Airplay from iTunes. But that doesn't support Android phones and not all third party mobile apps support Airplay. Airplay is not ubiquitous in the way that Bluetooth is.

So I just bought this logitech bluetooth audio adapter and am going to swap out the airport express for this bluetooth adapter and see how my family reacts to that. I am betting that by replicating the experience they have in the car in our home, they will take control of our home music system with their phones in the same way they do in our car.

This shows the power of an open protocol like Bluetooth vs a proprietary protocol like Airplay. Airplay is a superior technology but it's lack of ubiquity may mean that it doesn't win the market in the end. We will see.

Ron Lieber has a column in today's New York Times called "A Financial Plan For The Truly Fed Up" where he lists some alternatives to investing your savings with the banks and brokerages that make up Wall Street.

His roadmap is basically what the Gotham Gal and I have been doing since the aftermath of the financial market meltdown in 2008. We invested pretty heavily in the stock market as the market was melting down in 2008 and I blogged actively about that here at AVC. But we took our gains early, in the first half of 2009, and then have more or less stayed out of the stock and bond markets since then (we do use our portfolio company Covestor's service).

We are in cash, real estate, venture capital, and private investments centered around our neighborhood and city (retail, restaurants, etc). Other than cash, we are invested in things we can touch and/or impact and understand.

As Ron talks about at the start of his piece, the never ending blowups on wall street are eroding confidence in that system. It certainly has eroded our confidence in that system. So we are staying out of it for the most part.

We do have our cash at a large money center bank. Ron advises credit unions instead. We haven't made that move and I am not sure we will.

Ron also advises people to check out peer to peer lending markets and mentions our portfolio company Lending Club. I was very happy to see that Ron has come around on peer to peer lending. Our firm is a big fan of these markets, having invested in two of them and looking at others.

And he describes a movement he calls Slow Money described in this way:

“Let’s just take some of our money and invest it near where we live in things we understand, starting with food,” as the movement’s founder, Woody Tasch, puts it. He describes returns as being in the “lowish single digits,” ranging from roughly 3 percent to a few percentage points higher.

The Gotham Gal and I are big fans of this approach. We have invested in a number of busineses in our neighborhood and city with expectations properly set for the occasional loss and in general low returns on the portfolio. But we are helping folks start their own businesses and create establishments we can use and that we want to see in our neighborhood. It feels good and I think it will turn out to be as good an investment as cash in the bank. At least I hope so.

As one system seems to be failing on a regular basis, it makes sense that there are new systems that operate differently that are emerging. We are seeking to invest in the ones that can scale at USV and the Gotham Gal and I are also looking to support these efforts in our personal investing. I am optimistic about this emerging movement and I am pleased to see mainstream media starting to talk about it.

This isn't exactly about a feature. Features are the verbs of a web/mobile product. Objects are the nouns. And one thing I always like to think about is what is the most fundamental object of all in your service. I like to call this the "atomic unit."

Here are some examples:

In Twitter, the atomic unit is the tweet

In SoundCloud, the atomic unit is the sound

In Turntable, the atomic unit is the room

In Tumblr, the atomic unit is the post

In Codecademy, the atomic unit is the lesson

In Wattpad, the atomic unit is the story

In Etsy, the atomic unit is the item (although one could argue it is the seller)

In Kickstarter, the atomic unit is the project

In Disqus, the atomic unit is the comment (although one could argue that it is the thread)

In Instagram, the atomic unit is the photo

In Kik, the atomic unit is the private message

In LinkedIn, the atomic unit is the resume

In Foursquare, the atomic unit is the checkin (although they may have just moved it to the venue)

In Gmail the atomic unit is the email, in Gcal the atomic unit is the appointment

In Brewster, the atomic unit is the relationship

In Dropbox, the atomic unit is the file

In Google Docs, the atomic unit was the document, in Google Drive, they would like to it to be both documents and files. And that creates some cognitive dissonance.

I could go on and on, and I apologize to all the USV companies I left off this list. I am not picking favorites. I am just doing stream of consciousness examples.

When you think about an MVP, it's really important to identify the atomic unit and make sure you focus the product crisply and cleanly on that object. If you think you have three or four atomic units, you are going to end up with a clunky and bloated experience and that is what you want to avoid at all costs with your MVP (particularly if you are mobile first).

Can you identify the atomic unit of your product or service? If you can't, then you might want to sit down and think about why you can't and what you might be able to do to address that.