Posts from October 2012

Scoot Networks – A New Way To Get Around SF

When I come to SF, I generally don't rent a car. I've used cabs and more recently Uber to get around. But many times I just walk from meeting to meeting around SOMA where most of the tech companies are.

This week I tried something different. The Gotham Gal is a seed investor in a company called Scoot Networks who has launched a service that is best described as "zipcar for scooters." My colleague Nick and I rented scooters yesterday and used them to get back and forth to our meetings. I have my scooter until tonight when I am going to return it.

Here's a photo of me on a Scoot:

Fred on a scoot

The scooter is electric and very light. It is only 50 cc. It has enough speed and acceleration to get around SOMA easily. It is not as powerful as the 150 cc Vespa I ride around NYC, but I was totally comfortable on it and it worked great for me yesterday.

Your phone is your "key". You join Scoot Networks and use their web app (native apps are coming). You place your phone in a bracket on the handlebar and connect an iPhone or USB connector and that turns the bike on and off.

Android on scooter

Then you can drive around from meeting to meeting, parking the bike on the street.

Scooter in street

Scoot Networks is currently only operating in San Francisco, but they are planning a larger rollout in the future once they get San Francisco working well. If you like to ride a scooter and travel to SF frequently, I suggest you give it a try. I am really enjoying it.

USV Identity Talent Audition

As we have blogged about, we are working internally to update our web presence. We've hired a part time software engineer who is helping us build something that we hope will better leverage the network that exists inside and outside of our firm, portfolio, and relationships.

As part of that work, we have decided that our identity could use a refresh too. So we've partnered with our portfolio company Behance and are conducting an online talent audition to design our new identity.

Here's how this design competition works:

To participate, simply submit your best brand/identity design work from your portfolio for consideration by our panel of judges (Note: this is NOT a “spec contest,” just submit a past project that best exemplifies your brand/identity work). The top 5 projects will be deemed “winners,” and their owners will be invited to take on USV as a client, proposing a new identity for USV, with a $1,500 guaranteed payment for responding to the brief. If your initial proposal is selected, USV will provide an additional payment of $12,500 for the completed work.

If you are interested, please visit the Behance page and click on the big green "submit your project" button. If you know someone who might be interested, please send them the link and ask them to submit their project for consideration.

My partner Albert, who is on the Behance board, has a longer post on the USV blog explaining why we are doing this and why we partnered with Behance to run this competition.

Help Wanted: A Gmail Hack To See Only Replies To My Sent Messages

I get behind on email a lot. I am right now actually.

At times like this, I often want to use gmail hacks to make sure I am seeing the most important email. I have some that showcase the messages from my most important contacts (my wife, my kids, …).

But another super important cohort of email messages are the replies to the emails I have sent in the past few days (or up to a week).

I'm wondering if anyone has a good hack that will reveal only those messages in the inbox. I'd be super appreciative.

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How To Be In Business Forever: Week Two

First we'll take care of some logistics and then we'll get to the post of the week in my Skillshare Class on sustainability in business.

Office hours will take place at 6pm eastern today. The link to the hangout is here. I don't like the way office hours worked last week and so I am changing them up. I will start by asking people to post questions in this discussions section. Then I will review a few business model canvas projects live for everyone to see. Then I'll finish up the 30 minute session by answering as many questions as possible while time lasts.

There are roughly 80 business model canvas projects posted so far. You can see them here. Since I will only be able to review a few of them today in office hours, it would be great for anyone who is taking this class to stop by and pick a few to give comments on.

If you are looking for a web-based tool to build and share your business model canvas, this thread mentions several of them.

OK. Now that we are done with the logistics, I will move on to my second post in this series.

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Last week we talked about long term thinking vs short term thinking. But sometimes, no matter how long term you are thinking, things happen that you didn't plan for and they can impact your business. Actually, this always happens. And that is when you need to adapt.

You will not stay in business forever if you don't adapt to changing market conditions. This doesn't mean adopting the "business model of the hour" model and this doesn't mean pivoting either. What I am talking about is the once every few years "oh shit moment" when you realize that the path you are on isn't going to work in a year or two and that you need to make some changes.

This is a frustrating realization. I have a good friend who has been running a business for more than a decade. He told me a few weeks ago that he thinks the market he has been operating in is changing and it is starting to impact his business. And just when he had everything firing on all cylinders.

That's how it is in business. Just as you are taking the victory lap for the kickass execution you and the team have delivered, the track takes a tilt and things start getting harder. Businesses don't operate in a vacuum. They operate in a dynamic ever changing market that is going to make things difficult for you, especially if you want to be in business forever.

I think some examples will help. The one that comes to mind front and center is Microsoft. By the middle of the 1990s, Microsoft had it all. They had a dominant share in desktop operating systems and a dominant share in desktop apps. They were literally printing money. Then the commerical internet happened. Netscape showed up. And Microsoft's market changed, forever.

Microsoft did adapt. They built Internet Explorer in reaction to Netscape and then used their desktop dominance to push it into the market, hurting Netscape so badly that it had to sell to AOL. That got Microsoft into trouble with the Justice Department and they were investigated as a result.

But what Microsoft didn't see in 1995 was Google because it didn't exist. And they didn't see the emergence of cloud based productivity apps because they didn't exist. In hindsight, it is pretty easy to see how fundamentally transformed Microsoft's business has been by the Internet and it is also pretty easy to see that they have not been able to adapt sufficiently to maintain any semblance of the dominance they had in the mid 90s. This stock chart tells you everything you need to know about what the Internet did to Microsoft. They may be surviving but they are certainly not thriving.

Microsoft

Another great example is RIM. I don't even need to tell this story. Everyone knows that the dismissive tone and stance that RIM's management took toward the iPhone and what it represented was essentially the death knell of a great company. I suspect they wish their stock chart looked like Microsoft's.

But let's look at a more positive example. As Ron Ashkenas points out in this HBR article, IBM saw that the hardware market was changing and their competitive position in it was changing with it. They sold their PC hardware business in 2005 to Lenovo and doubled down on consulting and related services. Their stock chart tells the rest of this story.

Ibm

Adapting doesn't always mean exiting a business that you decide has issues. You can also retool, reshape, and refocus the business. A company that I've worked with for more than a decade saw the industry it services go through some painful transitions in the 2008/2009 downturn. They built an entirely new line of products that service the growth part of the industry while working to maintain the older products through an orderly and gradual decline. It's been a difficult transition because it has meant that the company's top line hasn't grown during this transition. But the company is still in business and the new products are growing quite nicely.

Every situation is different and I don't have some "silver bullet" to help you all think about how to figure out when to adapt and when to stay the course. But I do have some observations. The comfort of a strong balance sheet (and a nice looking stock chart) is often your enemy not your friend in these situations. The most agressive CEOs I've seen in these situations are often the ones with less than a year of cash in the bank and survival instinct in full on mode.

Another observation is that getting your organization to adapt is harder than you might think. Organizations have inertia. The bigger they are the more inertia they have. If you think you need to adapt your business quickly, you will need to figure who is in the boat with you and who is not and make the changes you need, particularly on your senior team, to align the team with mission and get going.

Finally, you cannot be in adaptation mode all the time. If you map out long living successful businesses, you will see they go through periods of great stability followed by periods of great change and then move back into stability mode. You have to know when to get into which mode and you need to see each one through to its logical conclusion.

Given how hard all of this is, you might wonder if you really want to stay in business forever. The answer may be no. But even if it is no, you had better plan for and act like you do. Because I am certain that if you don't, you won't.

Don’t Believe Everything You Read

I read most everything written online about the sectors and the companies we invest in. I know the truth about many of these stories. And I am constantly shocked about how wrong the media gets it. I am not going to call out any specific journalist or story but I would simply advise folks to take everything they read with a big grain of salt. 

I would be particularly cautious when the subject of the story does not make themselves available for the journalist. The journalist can get pissed and take swipes.

It's important to stay abreast of what's going on. I am not saying don't read the stories. I am simply saying that you should not take them as gospel. Treat them for what they are; a mix of facts, gossip, and fantasy. The fantasy quotient is particularly high these days, for some reason.

And the publication standing behind the journalist doesn't seem to matter a bit. Techcrunch can be really good, and it can be really bad. The NY Times can be really good, and it can be really bad. I have read pure fantasy in both.

I often wish I could write the truth. But the truth is often told to me in strict confidence. So I can't and won't. The media's job is to find out the truth and print it. I am glad we have a media in society whose job is to do this. I'm just shocked at how often the truth is missing and fantasy is told in its place.

Video Of The Week

I was walking through Union Square this past week and I bumped into my friend Clay Shirky. We had a nice chat and I got to thinking that I ought to catch up on his talks and writing. So I did that over the past few days and came across this Ted Talk from this past summer.

It's called "How the Internet will (one day) transform government."

It's great. I hope you like it.

Fun Friday: Jokes

In a comment thread last week Raju said:

Fred
I would like this community involved by sharing the best jokes they have heard in their lives or sharing the best incidents happened to their lives. Wouldn't that be great?

Best incidents in our lives is a big one. We might go there.

But jokes are a lot easier. So I will give you all one and then you can share yours in the comments, as is the Fun Friday norm.

One ask – keep it clean (ish). Don't tell any jokes you wouldn't tell in the company of five year olds.

Here's mine, which hopefully won't be a metaphor for this thread. It comes from the awesome and almost never clean Richard Pryor.

I'd like to make you laugh for about ten minutes — though I'm gonna be on for an hour.


Metainstability

I had breakfast yesterday with a friend who had recently relocated to NYC from SF. He told me he was taken with the hyperactivity of NY'ers. I asked him where he thought it comes from. He had a great answer and I am going to share it with all of you.

He said that NY is "meta unstable" meaning that it is inherently unstable and therefore in a constant state of imploding on itself. And NY'ers implicitly understand that. So they only way we can keep the city functioning is to be constantly seeking to upgrade it in real time. So that's why the city is in a constant state of construction. That's why NY'ers are always looking for a better way to do something and a faster way to get somewhere.

This may sound like psycho physics babble. In fact it is. But it also captures something inherent in the NYC psychology that I have felt since the day I arrived here in 1983. This city is in a constant state of seeking to get to a better place. And that is why it is such a great place to be an entreprenuer despite all of the challenges of operating a business in NYC. And it is why I felt at home here the day I arrived and why I suspect I always will.

I'd also like to wish a happy birthday to my partner in our Big Apple adventure. The Gotham Gal. Who brings a measure of stability to our metainstability.

Opening Up Our Research

When Brad Burnham and I started USV back in 2003 and I had just started blogging, we spent a lot of time talking to potential investors in our first fund. One of their big questions we got from them about the kind of open firm we wanted to create was "how will you be able to make money if you share all of your proprietary insights?"

We really didn't have a good answer to them but our bet was that by sharing our ideas and insights broadly with the market, we would attract entrepreneurs to our firm who shared those insights and ideas. And we thought the startup community would engage with us around these insights and ideas and make us smarter in the process.

It was a good bet. That is exactly what happened. I think it is now best practice in VC and possibly some other investment disciplines to be broadly open with your investment ideas and insights. At least I hope it is.

But we are not as open as we can be and should be. We get together as a firm roughly once a month to do a "deep dive" on a sector that interests us. We work as team to produce a reading list and some preliminary research on that sector. And we identify a couple people who are deeply involved in that sector to come sit with us or skype with us. These sessions last roughly two hours but can often go on longer.

Christina decided last week that we should put all of this "research" out there on the Internet. And of course she is right. She has posted the first set of research on usv.com today and we will continue to do this under the "Researching ……" headline. I think this will be really useful for us and everyone who enjoys participating in a dialog about new ideas and insights in the tech startup market.

A Changing Tablet Market?

I saw this in a story I was reading this morning about mobile reading habits:

A year ago, the iPad accounted for 81% of tablets in circulation. That has fallen to 52%, with Android-based tablets grabbing a 48% share of the market. Amazon’s Kindle Fire accounts for far and away the largest slice of those: half of the Android tablets in use are Kindle Fires, and they represent 21% of the overall tablet market.

If that's true, that is a big deal. Our family has moved from iPads to Nexus 7s in our home but I didn't think the rest of the world had moved to Android tablets too.

I am curious if others are surprised by this. I honestly had no idea that Android had made such a big move in tablets. I realize Kindle Fire is hardly Android. More like a third tablet OS. So it's really like iPad 52%, Android 27%, Kindle Fire 21%. But even so, this is a big deal and I am surprised.