Posts from Dave McClure

Mobile & Conversations

One of the great things about the web is the ability for people located all around the world to be having a public conversation in real time in a single place. We see that in action here at AVC with the Disqus comment system. But it also exists on Twitter, Quora, Stack Overflow, Reddit, Hacker News, and a host of other places on the web. This kind of open public discourse is quite important and leads to greater understanding and ideally a progressive society that moves forward as new ideas and new ways of thinking propagate.

As the web is increasingly moving to mobile, there are opportunities and challenges. The opportunity is simple. Folks don’t need to be in front of a computer to be able to participate in a real-time discussion. The challenges are harder. Who here has tried to comment on AVC from a mobile phone or tablet? It’s not as easy. And what would a mobile app look like for commenting?

Those who solve these challenges will be the leaders in real-time discussions in the coming years. Because taking our conversations with us in our pockets will be critical.

I say all of this because of an experience I had yesterday. I had to take my son to take a test yesterday afternoon. As I left our home, I saw a tweet from Dave McClure responding to my post yesterday:

I responded to his tweet and then took my son to his test. A half hour later, after I dropped off my son, I checked Twitter and there was a lively discussion brewing. I responded to a few tweets and started driving home.

Every twenty blocks or so I would pull over, check twitter, reply to a few more tweets, and then start driving again. By the time I got home a half hour later, there was a full blown Twitter discussion.

Mark Ury did us all a favor and Storified the discussion for posterity. Mark Suster also contributed a curated version of the discussion on his blog.

What’s the takeaway from this story, other than investors get pretty emotional about things like convertible notes, priced equity, discounts, and signaling?

Mine is that I could have never participated in that discussion in real time had it not been for the Twitter client on my Android phone. But it was simple, in some ways simpler than doing it on the web, in Twitter’s mobile client.

So it’s high time for all those companies out there that are in the business of hosting and facilitating live real-time public conversations to do what Twitter has done and make your products work well in mobile. If you don’t, others will.


Helping others to achieve greatness as I attempt a bit of my own

Like many of my friends and colleagues, I was touched by this heartfelt post by Dave McClure yesterday. This part really rings true to me:

and so here I am: still standing in the arena, in hand-to-hand combat with demons mostly of my own making, aiming to make a small dent in the universe. nowhere near a great success story, yet fighting the good fight and perhaps helping others to achieve greatness as I attempt a bit of my own. I’ll be 46 in a month, well past the age when most folks have already shown what they’re made of. but I’m still grasping for that brass ring.

That one paragraph packs a lot of emotion and pattern recognition for me in it.

Going hand to hand with demons of your own making. Check.

Nowhere near a success story. Check.

Well past the age when most folks have already shown what they are made of. Check.

Still grasping for that brass ring. Check.

I could have written this exact post five years ago. When I was Dave's age.

Venture capital doesn't create 20 something millionaires. The prime of your career in VC is the late 40s. Right where Dave is.

I am not exactly sure when I stopped feeling all these things that Dave is feeling. But I did. It happened sometime in the past few years. And I am happier for it. But also worried that I don't have that big chip on my shoulder anymore. We will see.

But the best line of all is the one that I ganked for the headline of this post. Helping others to achieve greatness is what VC is all about. If you do it well, you achieve a bit of it yourself along the way. But you have to do the first to get the second. Dave understands that. And so I think he'll get his brass ring soon enough.

#VC & Technology

Dave McClure's Investment Thesis

I’ve been a fan of Dave McClure since I met him some time ago. He has strong opinions, he shares them liberally, spices them up with foul language, and finds himself involved with a lot of interesting entrepreneurs and companies. In a nutshell, he’s my kind of investor.

Yesterday he outlined his investment thesis on his blog. I’ve heard this thesis verbally from him a few times now, but I am so happy to see him write it all down for everyone to see. If you are a web/mobile entrepreneur, go read it.

Dave clearly articulates the new realities of tech investing. Here is the way he puts it:

Fast Forward to Twenty-Ten, and let's take a look at these fundamentals, with a specific lens on the consumer market & internet startups:

•    PRODUCT now typically means a website or service, run on low-/no-cost open source software, hosted in the cloud on low-cost servers, developed in a few months (or a WEEKEND!) by a small team of 1-5 developers, who continuously test & iterate in real-time with online customers

•    MARKETing now typically means using a variety of online distribution channels via paid & organic search (SEM/SEO) on Google, viral/social amplification on new media platforms & social networks like Facebook, Twitter, & YouTube, and the quickly-growing mobile platforms of Apple iPhone & Google Android. With the exception of search, most of these distribution channels didn't exist 5 years ago, yet they now easily reach over 100M-500M+ users, with very low cost and measurable marketing campaigns such that even a small team can reach billions of people globally.

•    REVENUE can now be collected easily via a variety of online payment, transactional e-commerce, digital goods, subscription billing, lead generation, CPM/CPC/CPA advertising.  Many people buy things online now, and many companies are even bought for usage & users ahead of revenue.  

Longtime readers of this blog will recognize all of these themes but even so, I like the way Dave lays them out. The world has changed a lot for tech entrepreneurs and VCs are adapting to the new realities. Some VCs will adapt. Others will decide not to raise another fund, spend the next five to ten years winding up their older funds, and then retire.

Dave’s thesis is different in some ways than our thesis at Union Square Ventures. We are not as interested in smaller revenue focused companies that aim to be sold for $25mm to $50mm. We’d like to see our portfolio companies aim a bit higher than that. Even so, we will certainly end up with more than a few companies that will sell in that range. That is a successful outcome for us too if we can own 15-20% of the business and have less than $5mm invested, which is the case for many of our companies.

We tend to favor big networks of scale, like Etsy, Meetup, StackOverflow, Twitter, Zynga, Foursquare, Indeed, Tumblr, Disqus, among others. We believe that there are going to be a lot more opportunities like these that we can invest in.

But regardless of whether you are Dave McClure or Union Square Ventures, you need an investment thesis and you need to stick to it. And I believe that you need to make it public, articulate it well, and make sure everyone, particularly your target entrepreneurs, know what it is and why.

Dave did that yesterday and he did it well. Kudos to him. I think it will serve him very well.

#VC & Technology