Posts from December 2012

Putting 2012 To Bed

I'm typing this on my phone as our plane is starting to descend into the NY metro area. We will land at JFK within the hour.

I've wanted to write a year end post for days. I actually wrote one and stored it as a draft. But it comes across as a whiny complaint about the shitty year that 2012 was. And it was in many ways a shitty year for me. But the reason I couldn't publish that post is it didn't capture the greater picture that 2012 represents for me.

I moved every year as a kid. Throw away the old. Start with the new. That is etched indelibly in my psyche.

My venture investing career has three phases all roughly 6-8 years long. The first, at Euclid, was software to internet. The second, at Flatiron was internet to bubble. And the third, at USV, has been web 2 to mobile. I have always used a new firm to denote a new investment phase for me. Throw away the old. Start with the new.

And I feel that 2012 is the next demarcation year for me but this time I have to do it in an existing firm with an existing portfolio. That is new for me and I don't have a model for how to do it.

It was reported a few weeks ago that I had not made a single new investment in 2012. That is true. In fact, I have not made a single new investment since the summer of 2011. Fortunately my partners have picked up the slack and we have made a dozen or so terrific new investments at USV during that period.

I have been working on a new investment and I hope it will close in early 2013. So it is likely my 18 month dry spell will end soon. And I am going to treat that dry spell like a new start. I don't want to invest in the same stuff today that I invested in five years ago. I want to do new things, learn new lessons, and share them with you.

The funny thing about 2012 is that our firm made more money in 2012 than ever, with some huge carry producing events. And yet I think of it as a wasted year professionally. I don't like harvesting, I like planting the seeds, and helping them grow into fully flowered plants. That's where I get joy from my job.

So as I put 2012 to bed and think about 2013, I am happy to see this past year enter the history books. I didn't get much joy from it. And I am looking forward to doing new stuff in 2013, learning new things, and working with new people.

Happy new year everyone.

#VC & Technology

Fun Friday: Secluded Getaways

We are staying at a Ryokan in the woods on a river and it is beautiful and peaceful and about as far away from NYC and work as can be. We had dinner in robes last night and slept on tatami mats. And I’ve been reading more and writing less. All of which is a very good thing for me and our family. I will upload a photo of this place if I can get a decent internet connection. That in and of itself is a feature and not a bug of this place.


So in the spirit of fun friday, where do you all go to find seclusion, peace, and solitude? Post a picture with your comment if you can.

#Blogging On The Road

Single User Utility In A Social System

The first web 2 style social network we invested in at USV was delicious. We learned a lot from that one even though it was a short investment for us.I still wonder what might have been. But that’s not the subject of this post.

One of the most important lessons we took from delicious was the value of single user utility in social systems. It might seem odd that systems designed to leverage interactions between people can have (should have?) single person utility. But I strongly believe they should.

The first users of delicious were barely aware of and rarely used its social aspects. They just wanted to store their bookmarks in the cloud instead of in their browser. And they liked the tag based classification system. And they liked being able to use their links from any device. That was the single person utility delicious was built on.

But because bookmarks were public by default which resulted in most links being shared with others, a large social system developed. The delicious popular page was an important web destination in its day and most of those visitors never posted a link to delicious. They consumed others’ links.

I was reminded of delicious this week as I used foursquare to plan out a bunch of single day itineraries for our family visit to Tokyo. I use foursquare to do this because it works great on all of our phones, the lists automatically geosort depending on where we are, and because the map view of lists makes a great walking map of a neighborhood or city. This is all single user utility for me (or small group utility for our family).

I was surprised to see folks saving these lists to their foursquare accounts. I can understand why someone might want to save a “best of Tokyo” list but saving our day’s itinerary wasn’t an obvious move to me.

I put together my best of lists on foursquare specifically for others. I put these single day itineraries specifically for me and my family. But big open data rich social platforms are interesting places. One man’s single person utility is another man’s social value.

And, as I have said before, network effects help on the way up and hurt on the way down. If I get great single person utility from your service, it is less likely that I will follow my friends out of it when your service ends its stay on the hype cycle and the iTunes leaderboard.

So I encourage the product teams in our portfolio to think hard about building single person utility into their products. Its a paradox of sorts but by making sure its useful to just one person you are insuring its useful to tens of millions of people.


Advice for 2013: Deliver On Your Promises

There has been a lot of discussion out there about the Series A crunch, the consumer sector falling out of favor, VCs getting more conservative, the need to focus on revenues instead of users, and so on and so forth.

All of this is going on and the environment is certainly getting tougher for entrepreneurs. As I have said before, we have had the wind mostly at our back for the past seven years and I feel the winds changing on us. They are headwinds not tailwinds right now.

At times like this I think it is critical to focus hard on the most important things for your business. That could be revenues but may not be. That could be user traction but may not be.

I would like to tell a story. The company in this story will go nameless. It is not material to the story. We met the team a year ago as they were just launching. They had huge ambitions for 2012 and we thought they were delusional. We passed on the investment even though we really liked the team and the market. They came back in a month or two ago. And not only had they accomplished everything they said they would do, they got done a few things that were not even in their plans at year end 2011. We committed to lead their next round at a full valuation. There will always be money for teams and stories like this.

But as I look around the broader startup market (and certainly in our portfolio too), I don’t see a ton of those stories in 2012. I see delays in getting important new product initiatives out. I see revenues coming in well below plan. I see new ankle biter competitors emerging and taking share causing a loss of focus and missed numbers. I see “black swan” events that could not have been predicted causing short term disruptions.

None of these are fatal to a startup but in the environment we are in they will not help you. Investors are not giving the benefit of doubt in markets like this. And your employees aren’t going to be patient forever either.

So if I can give entrepreneurs a single piece of advice for 2013 it would be to deliver on your promises. Not just to your investors but also to your team and ultimately to yourself. This is no time to be in denial. That is a lethal attribute in times like these.

> composed in chrome on my nexus 4. excuse the typos and lack of links.

#VC & Technology

Merry Christmas Everyone

It's mid afternoon on the east coast as I write this. The time difference between Tokyo and NYC means I am eary or late to most things this week.

Christmas isn't much of a thing in Tokyo so I am mostly getting my holiday cheer from Tumblr and Instagram. Though our family hasn't celebrated Christmas at home in over a decade, I still miss it. We did celebrate it with the Gotham Gal's family last year in Utah which was nice.

Christmas to me is family time. And our family has made it a tradition to go away somewhere far away for two weeks every Christmas for the past decade. So like most families, we have amazing Christmas memories. But ours don't include Christmas trees, holiday music, opening gifts, and family feasts these days.

So I'd like to wish my family and friends and all of you a merry christmas. I hope you are able to spend it with loved ones.

With that I am signing off so I can grab a livestream of the Lakers Knicks game. Thanks to the wonders of the Internet, you can watch the NBA anywhere in the world these days.

#Random Posts

No MBA Mondays This Week or Next

Although I plan to blog during my vacation, I am not going to write MBA Mondays posts until I get back in the new year.

So as a placeholder, I am re-running the video of the Skillshare class I did on Employee Equity in April of this year. If you haven’t seen it, I think it’s a good primer on how entrepreneurs should think about managing the employee equity in their companies.

#MBA Mondays

Jet Lag

It's 3am in the morning and I'm wide awake in a hotel room in Tokyo, having slept for about five hours. My head is pounding because I haven't had coffee in 30 hours. I'm fixing myself an espresso and getting out my Nexus 7 for some reading. Emily suggested I read A Visit From The Goon Squad so that's first up on my vacation reading list.

I struggle with jet lag. Whenever I talk to someone who travels frequently to Asia or some other far off destination, I always ask them how they deal with it. Most tell me drugs, which I refuse to take. I don't want to go there.

When our family traveled to Australia a few years ago, I was so knocked out by the jet lag that I felt physically ill for the first couple days of our trip. I think I'm in much better shape on this trip, but it's still a struggle for me to get out of my circadian rhythm and into another one.

The jet lag advice I have taken is to sleep as much on airplanes as possible. That makes sense to me but I don't sleep well on planes. I got about four hours on the thirteen hour flight from NYC to Tokyo. The Gotham Gal and the girls barely slept on the plane and I think they are doing better with the jet lag than I am. So I am questioning that advice a bit right now.

So, what do all of you in the AVC community have to advise me on this one? I'd like to get better at it because I love traveling to far flung parts of the world and plan to do a lot more of it in the coming years.

#Blogging On The Road