Video Of The Week: Yancey Strickler at TOA 2016
Yancey Strickler, CEO and co-founder of Kickstarter, gave a keynote at Tech Open Air in Berlin last month.
He talked about some issues facing entrepreneurship and society today. It is an important talk.
Saw Yancey give a similar talk at O’Reilly NextEconomy. I appreciate that he’s consistent in his value system/declarations and is trying to move the culture in that direction. Unfortunate thing about prevailing systems is that they expunge new approaches/subsystems with different incentives. Rooting for Yancey and Kickstarter! If only more of the projects I support could deliver on time or at all 🙂
“Infinite growth for infinite riches”. Or is it to solve a problem for people. If you aren’t turning a profit, it’s a hobby. Capitalism brings the level of standards for all people up faster than anything else. It’s core to human nature. Kickstarter enables capitalismIs it bad that Amazon Prime delivers products I want to remote locations no one else will deliver and that I use it? I don’t feel guilty. I have a different perception of why businesses exist.
I am a big fan of Amazon in the sense that I buy everything I can through them because it’s convenient, predictable and I am used to the UI. The pricing is also cheap enough. That said Amazon is in the business of being the last man standing. Scorching the business earth to achieve world domination in ecommerce by putting everyone they can out of business (same thing as Walmart did) by sustaining heavy losses. Quite a bit different than Whole Foods that while still a business allows many small vendors to survive and I would imagine prosper. Not that that was the intent at the start it’s just the byproduct of the way they make their living. When they put most others out of business I would imagine they will begin to ratchet up pricing obviously.
You misunderstand Whole Foods strategically.They fill the uneconomic holes of customer want with artisanal brands and build their own 365 and now cofunded brands to capitalize on the best sectors proved by those same brands.I’m a big fan of them and they make life better for me. They are a great channel for change but altruistic, not at all.You might want to understand the nuances of the the organic, wellness market as it is much more complex than meets the eye. Fascinating segment and huge.
I never said they were altruistic nor did I think that. I fully recognize they are a business and have a particular business model. I am in no way fooled (bad choice of words..) by Whole Foods and I shop there because I like the experience and the products and at least at the one I shop at the staff. (As mentioned it’s not “supermarket” grade staff..) I was merely contrasting them with other large companies (another example is Walmart) simply because they allow smaller companies an outlet.Of course I could have been cynical (which I normally am) and spun my comment a different way. I could have said they make their living on the backs of these smaller vendors of artisanal products because there are things that a small vendor can do labor wise that a larger company can’t.Bottom line is that a business does what it needs to do to fullfill their business model. We both know that if Whole Foods was filled with mainly non-artisanal foods (things you see in a regular supermarket) we probably wouldn’t shop there or enjoy the experience.
You are ignorant when it comes whole foods. Independent food manufacturer faired much better before whole foods than after.
Read my other comment clarifying my point.
They’ve changed the landscape of food and life in urban areas for ever.There’s good and no so but they are the channel for organic in this country. 37% of UNFIs revenue comes from Whole Foods. Can’t get over that fact.
“Capitalism is the worst economic system, apart from all the others”–Michal Scott
Blockism is new.
Amazon is now powerful enough that it could get away with being nasty sometimes. There are hints that maybe Bezos is being nasty, e.g., some recent comments about US workers v immigrants.Bezos is a bright guy with a good background, IIRC Harvard CS major and some time in Wall Street.He saw one heck of an opportunity: At first I looked at Amazon and saw them selling just books and records. My thought was, buying on-line instead of in brick and mortar stores mostly won’t work because on-line can’t provide information enough to do good shopping, e.g., enough, good pictures.I believe I was correct — then, say, the days of the Internet data rates of dial-up modems. Then sending a lot of pictures good enough to permit good shopping WAS too slow.What I didn’t see that apparently Bezos did was that the 9600 bits per second end user dial up Internet data rate would grow quickly to 1 Mbps (million bits per second) to 22 Mbps (enough for some video) to 50 Mbps (enough for good, high definition video) to 1 Gbps (billion bits per second) enough for about anything currently we have to send for good shopping.Gee, growth from 9600 bps to 50 Mbps? Where did Bezos get his crystal ball to see that that growth would get deployed over nearly all of the US as needed for the Amazon growth and get deployed about as fast as Amazon could set up the server farms and write the Web site software to use that data rate growth?Moreover, Bezos got a lot of venture funding that, IMHO, could not have been justified by his book and record business and needed that growth. So, how the heck did Bezos talk his equity investors into believing that all over the US consumer Internet data rates would grow from 9600 bps to 50 Mbps, a factor of ballpark 5000, in time to justify the checks the equity investors were writing?But, wait, there’s more: To justify his equity investments and for his current success, he also needed the fantastic, beyond belief, drop in the costs per processor cycle, storage byte, and communications bit per second.Or, for the user end, Bezos was starting in the days of, say, a $10,000 home desktop computer with a single core processor with a clock of maybe 33 Mhz (million Hertz, million clock ticks per second), 50 Mhz, 90 Mhz or some such while now 4 cores at about 3 Ghz (billion Hertz) are standard and about needed for the current success of Amazon.And for his server end, he has no doubt needed the full power of Cisco’ LAN switches, Intel’s Xeon processors, maybe 24 cores per processor, 64 bit addressing, TB (trillion byte) main memories, very flexible exploitation of virtual machine, lots of rock solid operating system progress, lots and lots of system management progress, some astounding software development management progress, actually enough of a high end server farm that he could just as a by-product and sideline be a major player in high end cloud services.It’s amazing that Bezos saw all of that coming. To me it’s beyond belief that at the beginning he talked his investors into all of that.Or, early on a skeptical investor could have said:Your ideas are all simple. You have no protected intellectual property ideas that give you a proprietary advantage. That is, you are just using the products of others, e.g., Cisco, Intel, Kingston Memory, Western Digital and Seagate, the Internet backbone providers, the Internet last mile providers, the user PC suppliers, etc. So, any good software house with good funding could do what you plan to do.Next, as you grow, you are going to be noticed by every major retailer in the US. In particular, you will be noticed by Wal-Mart. You don’t have anything they can’t buy for what is to them pocket change, i.e., chump change. Moreover, you will have to ship all that stuff you sell. So, that’s a huge problem in physical distribution, that is, a logistics problem. There is an easy solution: Just use USPS, UPS, and FedEx. Okay. But that’s expensive, often costs more than what you are shipping. You are new to this logistics problem, are starting at zero, while Wal-Mart and more have made lots of progress. E.g., they ship by truck, which is MUCH cheaper, to local distribution centers, and then distribute from there.Next, for what you want to sell, you are manufacturing none of it. For all the other retailers, they already have deals with the manufacturers and/or are doing their own manufacturing. Why do you believe you can get good product selection, wholesale prices, delivery times, etc. from that existing group of suppliers that has existing, highly coveted channels?But, he did.Q 1. At the beginning, how did he know about all the future developments he would need?Q 2. Also at the beginning, how did he convince his equity investors?
Moore’s law, good timing, being a precursor. Those are my guesses Dr. Sigma.One truly amazing thing he did with only a few other dot coms was to survive the bubble burst and live through the change of the century.Amazon built upon the remarkable infrastructure that only the US had in place in those those days: the mail order business, distribution and delivery. I don’t know any other country in the world where delivery is so visible and functional. We are playing catch up.
Yes, BUT!!!! Sure, early on he was GO for an on-line book and record store. Fine. But that would hardly be worth a $1 million Series A if that. But Bezos was clearly aiming for much more, well beyond what the hardware, for both clients and servers, could then do.So, sure, Moore’s law. Right. For processors, main memory, disk drives, and communications data rate. Okay.But as I mentioned, it’s been a multiple of 5000 in performance with a fall in price per bit, etc. by some multiple of several times that, and for what Bezos has now all that was needed.That was one heck of an extrapolation. Even if Bezos believed it, I’m surprised his investors did.There is a guess: We weren’t getting the information on the real stuff. So, we didn’t get an up close and detailed description of what Applied Materials was doing, how soon they were moving from line widths of 1 micron = 1000 nm down to 90 nm, …, 14 nm.Once, maybe 1990, in the airline seat next to me was a guy back from talking microelectronics with some of the leaders of the latest stuff. He told me the line widths being implemented in the labs. My jaw dropped as I estimated the number of atoms across one such line. He was well down in the lower nanometers or some such. Maybe Bezos knew that.Also maybe he knew what giant magneto-resistive disk heads and vertical recording were doing and on the way. Maybe Bezos knew that, also.Then there were the chips for the high end routers, for IP or BGP, from Cisco or Juniper, with chips likely from IBM. So, maybe Bezos knew that, too.Then for DWDM on the optical fibers, 40 Gbps per wavelength on the way to 100 Gbps per wavelength, with dozens of wavelengths per fiber.Then, some chatting indicating that GbE was on the way to cheap mobos.Then chat with the makers of the modems to be installed at the client ends of the coax for cable TV and see that they were shooting for 1 Gbps per house.And, sure, chat with the leaders of the IEEE standards on wireless and see what was coming there.With all that, I, too, would have been confident. Maybe Bezos had all of that.But for Moore’s law, ballpark the diameter of a silicon atom is 200 picometers. So, one nanometer is 5 silicon atom diameters. A line of 5 nanometers (nm) is ballpark 25 silicon atoms.I’d like to hear a lecture on (A) his use of virtual machine and (B) his RDBMS architecture!
That’s what makes places like San Francisco, Seattle and New York City great. There are a lot of chances you may meet people such as the one you met in the plane, or at a conference, or at work, doing relevant things. Bezos met people, built the right teams, got inspiration. Maybe, as you say, he knew things in advance by being in the right place and at the right time and networking with the right people, connecting the dots.
Is Kickstarter a b corp?
It is a Delaware Public Benefit Corporation. That is way more than a B Corp which is just a certification. Being a PVC takes the commitment to entirely new level
Thanks. Is a PBC a not for profit entity?
No. It is a for profit company
We went the same way… Delaware PBC 🙂
Disgusting Kickstarter and its homosexual sympathies, driving the human society straight into the ground. Yancey is a faggot.
A gravitational move to Berlin ? rubbish
This was a great talk I enjoyed it.That said I think one thing that bothered me is the characterization that an organization driven by profit (or a person) is somehow bad and a person who is driven by other things is good/better. Or the idea that you need to be a B corp because all C or S corps or sole props must not have as much societal value or most must be evil in some way. It reminds me a bit of how people think that because you go to church or synagogue every week you will do less wrong and be a better person (whatever that is) than someone who does not. That is not something Yancy said. It’s something that I think is implied by the way he presents his point. (So anyone who wants to argue I am reading into it, fine..)I had a situation just last night when with relatives I was taken to task for suggesting that someone could charge more for what they did (fortune telling) than they were currently charging.It involved a clairvoyant  who was charging $125 for 30 minutes and apparently had a 2 year waiting list for her services. More popular than Hamilton it seems. Hearing that I remarked something like “well she can certainly afford to charge more …. you know balance supply and demand” if she has a 2 year backlog… I was immediately taken to task by a young female relative who said quite directly “you know not everyone is motivated by profit!” kinda snidely and then others chimed in about how this fortune teller is doing god’s work or something like that. That of course is not the case. Why charge $125 then. Why not $75? Can I see your “overheads” and then decide for myself? Oh yeah people have to earn a living, right?. The young couple is having their first baby soon, they will find out real quickly how their money needs change with offspring, particularly living in NY metro area.The irony of all of this is that I provide free services to both this female and her husband even though they can easily afford to pay the small amount (long story as to why).Nothing is wrong with being in business and making money. Charging less money doesn’t make you a better person or a better company. Charging the correct amount for what you do as you see fit makes sense and is more necessary today than it ever was. Being driven by profit in itself is not a bad thing. The devil is in the details. Making money allows you to run a better business typically and invest in the future and to pay people well. (The Fortune teller has a secretary apparently I wonder how much she pays her?)Everyone wants to make the Epipen Lady a villain (especially after hearing about her bonus) and all of their arguments are touchy feely bullshit. None mention that there are other alternatives to her high priced product which people can and do use. My guess is that in her defense she doesn’t mention those for good reason. Why? Because to do so would give her a “Barbra Streisand” problem and less sales and profit. Not up to the peanut gallery to determine what is the proper way for someone else to run their life or their business. Of course it is definitely their right to voice their opinion. Which I called ‘bullshit’ which set off a shitstorm at the table. Or alternately charge $125 for only 20 minutes you get the point. https://en.wikipedia.org/wi…Edit: Another Streisand effect (‘quack doctors’ draw more attention to themselves)http://www.phillyvoice.com/…
“Not wanting to sell out”.Doesn’t that create a challenge for VCs?
Yeah I was thinking the same thing. Where does the beef come from?
Not for VCs that share those values
1) Do the LP’s share those values as well?2) Do they know this upfront? (Written into a contract…)3) Or, is this seen as a cost of doing business with AVC for those LP’s, that is you will put a portion of the money towards investments that don’t have a clear payoff or return? Or the return of “good” is recognized in itself.4) Or is the money AVC house money that isn’t linked to LP’s.Would make a good blog post.
You don’t have values. Kickstarter lives off the back off the original Fundable and uses Perry Chen’s patent as an excuse for not compensating us. We have the word “crowdfunding.” It originates from Fundable. You are a shark venture capitalist. Don’t delude yourself. You aren’t helping the world that includes me; you harm the people who preceded Kickstarter.-jprattx.com
Yancey implied that Brexit means an influx of capital into Berlin, instead of London.I’m not sure that we know the full implications of Brexit yet, but I can’t totally agree with that statement. Berlin is Berlin. London is London. Each one grows in their own ways.
It’s not yet knowable. It depends on what incentives a future UK government may wish to offer to entrepreneurs and investors. Right now I would put my money on Berlin.
If I think about an european HQ or associate now after Brexit, I would look in Switzerland, not London. Even considering Switzerland is not a EU member.This meanwhile the ‘full implications’ develop.Maybe Berlin could be an option too.
We’ll see. London was London prior to the EU and it will continue to be, IMO.
No doubt about it. The only thing that has changed until now is that some certainties that existed now don’t exist. In my mind, for things to clarify a bit, US citizens first have to answer what kind of country they want. If Mr. Farage and Mr. Trump ideas prevail, I believe that would probably lead to a form of ‘anglo-isolationism’.
.The comments on Brexit were ill founded. London will always be a money center. There is something about being an island.JLMwqww.themusingsofthebigredc…
And there’s something about being able to run an empire from that island. London ain’t going nowhere.
Anyone wanting to explore Yancey’s point about the monoculture in NYC storefronts, a website I saw yesterday for the first time, vacantnewyork.com reminded me of a film made (by a friend) about 10 years ago, http://twilightbecomesnight……
I kind of rejected in total his characterization about banks taking available space and driving the small stores out because landlords are driven by profit and shouldn’t be. If you’ve ever owned commercial real estate that is the business, to find tenants who will pay the market rent for property so you can handle the debt service and earn a living. Someone may not like that small stores are being driven out but that is the reality of the business model. You also want a credit worthy tenant. If a bank takes your space (or another credit worthy tenant) you don’t have to wonder if the rent will be paid. I don’t think it’s right for someone who is not impacted financially to vilify someone who is by making it seem easy to do the right thing.
I don’t think that he said — or implied — that it was easy. I don’t think that anyone thinks it’s easy.My friend Virginie’s film highlights the question: what do we lose when our neighbors are no longer the merchants at street level?One example that sticks with me, I lived close by the WTC in 2001. Many of us were out of our homes for weeks. (Some for longer.) When I got back home, there had been no power for some time; I had to throw out everything in the refrigerator and restock. At the little health food shop near by, the credit card machines didn’t work — all of the phone lines weren’t working yet. At the cash register, the owner gave me the receipt and the stuff I had been attempting to buy, and she said, “Come back when you have cash. We know you.” Today, that little shop is gone, many many storefronts are constantly empty in that neighborhood now. And the local Whole Foods can’t possibly act like they’re my neighbor…
That’s nice but people as a collective group will always tend to gravitate toward the place with the lowest price. And they will forget (or at least enough of them will) nice little things like that. So people have short memories. So the blame lies actually in the consumer (once again the collective group) because they are driven by low prices and typically volume operations can and do give lower prices. I am old enough to remember when a man could earn a living as a salesman in a store. Don’t think that happens today with big box (ironically going out of business).Nobody is doubting that there is a benefit to having small merchants.This morning I had a garage door repairman come to my house to repair my garage door. The spring had broken yesterday in the afternoon right as I was leaving to go somewhere. So I called the small company and the man said “how about Monday” and I said “anyway you can come out tonight or tomorrow” and he said “I wasn’t planning to work this weekend but I will be there Sat at 9am.” And he was. He probably overcharged me but I was glad that he could come out. I even gave him a $20 tip. He looked at that tip and probably laughed thinking he was already overcharging for replacing a spring on the door. He also said I needed pulleys and probably didn’t. On purpose I let him “get away” with it. I wanted him to make money and come back quickly if I ever need him again.A large company? No way they would have come out like that. Small guy (like your story), yeah. But you know the reason I use him is because there aren’t enough people to supply his service. If a larger person put him out of business I’d have to wait until they could “schedule it”. So yes I know where you are coming from.Note to Phil Sugar. Asked him who he is supporting and like you had said before, it’s “Trump” “to many illegals in this country, I don’t like Hillary”.
The only good thing that came out of 9/11 (and I’m loathe to use the word “good”) is how the people of NYC came together. There was a sense of civility, respect, consideration and common ground that cut across every race, gender and socio-economic strata. Sadly, it didn’t take too long for the city to resort back to “normalcy.” Coming up on 15 yrs. Crazy.
NY today is not the same as 15 years ago.I can’t attribute the changes to 9/11 (I lived on Broome Street then) but we live in an incredible open, safe albeit crazy expensive place.I remember riding the subway with my grandfather as a young kid after spending the day with him in the Garment District and him lecturing me part yiddish/part english and which subway stops were safe to get off at.All of them are now.
We have way too much wealth and incentives built into real estate. High commercial real estate prices are nothing more than a tax on main st.
I’d travel to witness Yancey share a stage with Andy Swan debating the merits of ‘free market’ capitalism.
The truth is that in business very few people get to be “Yancey”. Kickstarter is a fabulous idea that is truly unique and apparently has allowed that. As such he has the opportunity to operate with a higher set of values. Most people grinding it out in business don’t have the same luxury. There is always someone ready to (sorry about this) “cut your balls off” and put you out of business. (Noting that Rackspace is selling to PE as a result of AWS and the other dwarfs…most certainly layoffs are forthcoming..)
Oh yes, and a glass of whiskey.
In the video, some of his points are to me a bit too close to some Utopian, socialistic, moonbeam, smoking funny stuff dreaming that are so far vast goals with half-fast planning, a long walk on a short pier, a path to new definitions of pain and suffering.I can have a lot of sympathy for his stuff about the importance of being a founder, important for the founder personally and also for effectiveness for everyone.Why?The usual technique of organization is hierarchical where the supervisor knows more and the subordinate is there to apply muscle to the work of the supervisor.So, all the thinking, for good or bad, is that of the supervisor, and that’s poor for all concerned.E.g., there was the TV series Band of Brothers about Easy Company in the 101st Airborne Division of the US Army from Normandy through VE day.For that, Google searchBand of Brothers Sobelwill return URLs of YouTube video clips of the more important parts of the series having to do with Sobel’s leadership of Easy Company near the beginning, during training, before Normandy.The hero of the series was Richard Winters, and during much of the training and Sobel’s leadership, Winters reported to Sobel.Soon Sobel noticed that Winters was admired by the Major Sobel reported to. So, Sobel carefully, deliberately cooked up a 100% false way to sabotage Winters and, in particular, have Sobel lead Easy Company to Normandy and leave Winters behind in England.Such sabotage is well known: In the topic of organizational behavior, it is an example of goal subordination common in mid-level management in nearly all organizations.In response to Sobel’s false accusations, Winters was smart enough to ask for a court martial. Soon the Major saw that Sobel has lost the respect of the men of his company, especially the NCOs, and that the charge against Winters was cooked up and false. The Major then transferred Sobel to some training slot a long way from the Major’s regiment.The new leader of Easy Company was killed at Normandy, and Winters was the leader of Easy Company for the rest of the war.Sobel was so bad he was a serious problem for all of Easy Company and the whole regiment. The Germans should have loved him, by ruining a whole company of the 101st, one of most effective soldiers for Germany. In strong contrast, Winters was terrific.Lesson: The usual hierarchy is too often wildly dysfunctional and ineffective and makes way too little use of the potential of the people involved.Four times in my career I had supervisors doing basically what Sobel did with two of the situations very close to the Sobel situation in the movie.Dad never much explained such facts of life to me except once simply stated to Mom that, sure, in all of his career he had been under attack continually from above, below, and all sides.One quite general solution is to have more founders not throttled by incompetent supervisors.But solo founders? Okay, see the currenthttps://techcrunch.com/2016…https://news.ycombinator.co…with evidence that being a solo founder is on average from fine to much better.
Very idealistic, in reality however very few companies can implement those tenets unless their biz is a non-profit. Most companies today are modeled for economic gain, for their founders, employees and their investors. KS is unique, with altruism being a huge part of the company’s DNA. If Yancey didn’t reach profitability in 14 months, and kudos to him for doing so, would he have continued to be so righteous had biz realities steered him in a different direction? Would he have been willing to pivot and be far more beholden to outside influences for the sake of the company’s survival, or would he have folded the tent rather than, as he calls it, “sell out”? KS is very much an outlier for a variety of reasons, including its value prop and relatively early (and enviable) success.
Really appreciated the talk, I suspect Yancey will be one of the great visionaries in the future, he’s consistent and drives an endearing vision of our combined future. Thanks for sharing @fredwilson
Very inspiring talk! I’ll have to think about it. (That’s basically the best compliment I can give.) – Thanks
very interested in this but not getting the ‘open source’ part of the “…sustainable clothing initiative.”
Wearing my Patagonia surf shorts as I type 🙂
Ok–finally get it.To this industry open source mean open access to sources.Have to wrap my head around how this can work where tying down production is key to meeting demands during seasonal businesses but I’ll noodle on this.
Got a yellow pair. Too revealing. Can’t wear them in public. L O L.
Price is not the top item for many.There is a consumer ethos that is a massive driver in the wellness and organic markets. The top driver (besides ubiquity) for Whole Food.It the natural/artisanal wine market this is the prime driver.http://arnoldwaldstein.com/…
For the masses, price is what matters (which was my point).
A few leads for you:http://www.philly.com/phill…And I was told by a realtor that this company is snapping up locations and building out stores in South Jersey:http://royalfarms.com/
Define mass market.I have less and less an idea of what that means. As a marketer, as a term, means nothing really.
What do you define as “many”? It’s not higher income or higher value people ‘like us’?. It’s people buying the brands sold by the major manufacturers. True for beer as well, no?Look at the chart here, other than Trader Joe or Whole Foods, who else service a market where price doesn’t matter? (Serious question for my education, not a challenge).https://en.wikipedia.org/wi…
Say something made by Kellogs and sold by Kroger.
This type of logic in market segmentation is not valid as a generalization any longer.The size of your market not the % of the total is the only thing that matters.
The size of your market not the 5 of the total is the only thing that matters.What in the world does that mean?
Super interested in this so I’ll check it out.There is a renaissance in specialized sustainable ecommerce clothing going on that is really inspiring. I’m going to look at it in this light.