Tag Archives: Tech

How I Decide to Double Down

Many startups I invested in are coming back and asking for more. So how do I decide to double down — or cut my losses?


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Here’s how I approach follow-on funding:

Performance

I want to see startups triple revenue year over year after I invest. This level of growth shows they’re finding product market fit.

The best companies grow fast. Meanwhile, those with weak products or a poor sales strategy struggle to sign new customers.

But growth has to be efficient. I like to see a startup burning no more than $2-3 to add $1 of new Annual Recurring Revenue (ARR).

New Investors

Are any new investors joining this round? Or are existing investors just hoping to save a failing company?

If the founder could not find a new investor who wanted to make a bet on the business, that’s a strong negative signal.

Runway

This fundraise has to give the company enough money to ride out today’s tough market. I like to see startups raise enough cash for 24 months or more.

If the founder is only raising a small round to survive another couple of months, it’s likely a bridge to nowhere.

The Founder

Has the founder shown good leadership in these tough times? Has he taken responsibility for mistakes and kept investors updated?

If so, that makes me a lot more likely to open the checkbook.

How Much to Invest

I recently re-invested in a startup I first backed in 2021. They increased revenue by 5x in a year and brought in a new lead at a higher valuation.

Re-investing was a pretty easy choice. But how much should I put in?

I Invested about 2.5 times as much as my initial check. If the company keeps performing like this, I want to do about the same in their next round.

In all, I like to invest 4-5 times as much money in follow-on as I do in the first investment.

This lets me concentrate capital in winners. I also avoid major exposure to companies that are struggling.

The Human Factor

It’s very hard to say no to a hard working founder who’s trying his best.

Unfortunately, it’s also our job. If we don’t want to make tough decisions, we shouldn’t be in this business.

Even if I can’t re-invest, I’m happy to support the founder in other ways. I can introduce them to potential employees and business partners, provide advice, etc.

Done right, follow-on funding is a super power.

It increases my exposure to the best companies while minimizing my exposure to struggling ones. It gets money to the companies most likely to change the world.

How do you think about follow-on investments? Leave a comment and let me know!

More on tech:

The Hard Thing About Hard Things

I Like Big TAM’s and I Cannot Lie!

GPT-Powered Search with Perplexity AI

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

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The Hard Thing About Hard Things

“As a start-up CEO I slept like a baby. I woke up every 2 hours and cried.”

Ben Horowitz

Today, Ben Horowitz is the billionaire co-founder of a16z and one of the most important people in tech. But 20 years ago, he was the CEO of a penny stock startup called Opsware.


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By persevering through layoffs and withering criticism, Horowitz built his company into a colossus. In 2007, Opsware sold to HP for a cool $1.65 billion in cash.

Horowitz’s most important lesson: no matter what happens, don’t give up!

“Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be remarkably consistent in their answers. They all say, “I didn’t quit.'”

How to Lead

Horowitz often had to bet the company’s future on a decision made with limited information. As a founder, that’s all you’re ever going to get.

He also didn’t shy away from getting involved in details. Companies tend to stand still unless someone forces them to move.

“…when you are a startup executive, nothing happens unless you make it happen.”

Above all, a leader has to put the company and his people first. If you take care of your customers and employees, success will follow.

Finding the Right People

Horowitz dedicates much of the book to how to find and train the right people.

Horowitz favors team-oriented hires. He looks for people who rarely say “I” or “me,” even when discussing their own accomplishments.

Once you have those great employees, Horowitz urges you to invest in them:

“Training is, quite simply, one of the highest-leverage activities a manager can perform.”

In fact, no one at Opsware could even start looking for an employee until they had a training plan ready for that person.

Layoffs

Many startups are facing layoffs today, as Opsware did.

Horowitz advises CEOs to first speak to the entire company, making clear that the company has failed. Then, managers must lay off their own people.

Be sure to treat the departing staff well: the rest of your employees will be watching closely.

Lessons for Investors

When he started a16z, Horowitz wanted to change one icky thing about venture capital: forcing founders to wait forever in the lobby.

Horowitz made a simple rule.

Anyone late to a meeting with a founder would be fined $10. A minute.

“We wanted the firm to respect the fact that in the bacon-and-egg breakfast of a startup, we were the chicken and the entrepreneur was the pig: We were involved, but she was committed.”

I’m instituting this rule in my own meetings with startups, with the fines going to charity.

Horowitz also provides some great guidance on finding promising founders.

He notes that successful CEO’s he’s met all have different styles. There’s no one type to look for.

But one thing all great leaders share is a desire to improve. So I’ll be asking “How could you improve as CEO?” a lot more frequently.

Horowitz’s memoir is a window into what life as an entrepreneur is really like — at turns, nerve-wracking and exhilarating. It makes great reading for founders and investors.

What do you think of Horowitz’s advice? Leave a comment and let me know!

More on tech:

Zero to One

The Power Law (Part One)

Amp It Up

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PandoMonthly – June 2012 – Sarah Lacy interviews Ben Horowitz” by thekenyeung is licensed under CC BY-NC-ND 2.0.

I Like Big TAM’s and I Cannot Lie!

I just passed on a company growing 80% month over month. Instead, I chose one growing more slowly. Have I lost my mind?

Not yet.


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These two companies illustrate one of the most important principles in venture capital: market size matters. Without a large enough Total Addressable Market (TAM), a startup can only grow so big.

Company A

Company A is a fantastic consumer subscription company. It has an awesome product and growth rates you rarely see anywhere.

So they’re scaling like crazy — but for how long? To answer that question, I did a little back of the envelope math.

They have about 25 million potential customers, according to my research. At their average revenue per user of $10/mo, that’s $3 billion a year in potential revenue.

And unfortunately, like many consumer companies, churn is heavy. So the company has to be rebuilt every year or two.

Company B

Company B handles international corporate money flows. And while A has a substantial market, the potential for B is staggering.

Corporations move $23.5 trillion across borders every year. At B’s take rate, that alone is a $60 billion a year revenue opportunity.

Better yet, B also charges SaaS fees! That expands the TAM to around $70 billion.

If B takes even a small slice of the market, it could exceed $1 billion in revenue. At a typical 10x multiple, that means a $10 billion company.

And just because B isn’t growing as fast as A doesn’t mean it’s not growing! Revenues jumped 10x year over year, an amazing performance.

Why We Hunt Elephants

VC’s and angels are obsessed with big markets because the largest outcomes matter most. In venture capital, they drive almost all of our returns.

Let’s look at 3 examples: a company that’s acquired for $100 million, a startup that IPO’s for $1 billion, and another that IPO’s for $10 billion.

Assuming 50% dilution from the time we invest until exit, here’s what our returns look like:

That $100 million outcome, as big as it sounds, accounts for less than 1% of our returns! Meanwhile, the $10 billion Big Kahuna makes up fully 90% of all our gains.

If one type of company gives you 90% of your gains, that’s where you have to focus.

Expanding Your TAM

Let’s say your market is small. But you love your business and you don’t want to shut it down!

Think about how you can sell your product to more customers! Can a product that’s useful for auto garages also work for cleaning services?

There’s nothing wrong with focusing on a small market in the beginning. You have to start somewhere.

But if you want to build a venture scale business, you also have to think big!

Best of luck to all startups, big and small!

How do you think about market size? Leave a comment at the bottom and let me know!

More on tech:

Google is Losing the AI Race

GPT-Powered Search with Perplexity AI

Me vs. ChatGPT: Who’s a Better Blogger?

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Misfits Market

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Major Hedge Fund Down 54% — Survival in Doubt

In a brutal year for hedge funds, few have suffered more than Light Street Capital. The fund lost 54% in 2022, over $1 billion.


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From a report out last night in Bloomberg:

Light Street Capital Management’s hedge fund tumbled 54% in 2022, according to a person familiar with the matter, one of the industry’s worst performances last year. 

That drop rivals the 56% decline for Tiger Global Management, and is steeper than Lone Pine Capital’s 36% loss and Whale Rock Capital Management’s 45% slide.  

Light Street was the classic crossover hedge fund. It made big bets on technology companies, both public and private.

Many of those bets were at eyewatering valuations. Tech was crushed in 2022, pushing many such funds to the brink.

What strikes me is how simple Light Street’s strategy was. Its biggest holdings were a who’s who of growth stocks:

Anyone could’ve bought Tesla and hoped for the best. Why should investors pay Light Street 2% of assets and 20% of gains to do what they could do themselves?

Light Street’s 54% loss is abysmal even compared to benchmarks. The S&P 500 lost 18% last year, while the NASDAQ lost 33%.

Investors could’ve bought index funds and avoided hundreds of millions in losses, not to mention outrageous fees.

No wonder the California Public Employees Retirement System (Calpers), one of the most astute investors in the market, hasn’t invested in hedge funds since 2014.

The future for Light Street is bleak. It cannot charge a performance fee again until it more than doubles its fund.

That’s extremely hard to do. And without those juicy performance fees, the best traders will leave.

This is the kind of spiral that took down Melvin Capital. Light Street could be next.

I’m a huge bull on technology. But no stock is a good buy at any price.

What do you think the future holds for hedge funds? Leave a comment at the bottom and let me know!

More on markets:

Tiger Global Losing $185 Million a Day

As Fed Rates Peak, Are Markets Ready to Take Off?

Is SBF Laundering Money As We Speak?

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This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

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Misfits Market

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Photo: Glen Kacher, Founder of Light Street Capital

GPT-Powered Search with Perplexity AI

For all its powers, ChatGPT has a fatal flaw: its training data only goes through 2021. Ask about anything recent, and it’s stumped.


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But a new tool lets you use the power of AI to find up-to-the-minute information. It’s called Perplexity AI, and it might be the best search engine ever.

Just a month old, Perplexity AI looks like a traditional search engine. But it uses AI to answer your question, instead of just providing links.

Its answers are pithier than ChatGPT’s — usually about a paragraph. And unlike ChatGPT, Perplexity cites its sources.

This helps us confirm the results are accurate. The lack of sources is a serious problem on ChatGPT, since it occasionally produces incorrect answers.

Let’s give this baby a test drive!

So Perplexity, how’s the market doing so far this year?

The answer isn’t perfect — it’s leaving off today’s return. But it’s accurate enough to be useful.

Meanwhile, ChatGPT is stumped:

Google doesn’t even seem to understand the question. It returns today’s performance only:

Let’s try something a little less time sensitive: what are the best selling albums ever?

Perplexity nails it, giving us a complete answer with excellent citations.

ChatGPT’s answer is restricted to US sales. It’s a decent response, but not as complete an answer as Perplexity’s.

In all, Perplexity seems better at answering questions than ChatGPT. But if you want to generate content, like a blog post or a screenplay, ChatGPT is the right choice.

Where does this leave search giant Google?

Microsoft plans to integrate ChatGPT into its search engine, Bing. Perplexity has already produced something similar, and there will surely be many more.

Meanwhile, nearly two months after ChatGPT’s release, Google has shipped….nothing.

If Google continues to stand still, its competitors will pass it by. And if people lose the habit of Googling, they won’t be back.

I remember the first time I used Google. It was so clearly better than other search engines.

Perplexity feels that way now. The results trounce Google, giving me a direct answer to my questions instead of a page of links.

Search meaning “a page of links” is dead. The question is, will Google die along with it?

What do you think of AI search? Leave a comment at the bottom and let me know!

I’m off tomorrow, so there will be no blog. See you on Wednesday!

More on tech:

Google Books on Steroids with Allsearch.ai

Me vs. ChatGPT: Who’s a Better Blogger?

VC Funding Down 67% in December

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

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Google Books on Steroids with Allsearch.ai

Another day, another Generative AI breakthrough! The latest: a search engine that queries thousands of books to answer any question.

It’s called Allsearch.ai. And it just might change research forever.


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I tested it out this morning with three prompts. Let’s see how it does!

I’ve been hopping into an icy shower every day this week. So first, I asked about the health benefits of cold plunges.

The response wasn’t great, with numerous health benefits ignored.

I don’t think cold exposure protects you from catching the cold. And why Allsearch assumes cold plunges involve a race, I don’t know.

Meanwhile, it missed the benefits to alertness, sleep and hormone levels.

On to prompt # 2…

I decided to go with something more straightforward and historical. This time, Allsearch was on point.

Allsearch correctly notes that the USSR economy was in shambles, which led the government to collapse. Students are going to love using this for their papers!

For the 3rd and final prompt, I dug into the world of technology:

Again, Allsearch’s answer is excellent. It covers personal computing, the space race, and the computer revolution in business.

Where Allsearch beats ChatGPT hands down is in citing sources. If you want to know more about a topic, you have a reading list right there on the page!

You also trust results more when you see where they came from.

I think this is an amazing tool. The results aren’t perfect, but for a version 1.0, it does a great job.

Never one to miss an opportunity, I just contacted the creators to schedule a meeting. This might make a juicy investment. 🙂

What do you think of Allsearch and generative AI? Leave a comment at the bottom and let me know!

Have a great weekend everyone!

More on tech:

Me vs. ChatGPT: Who’s a Better Blogger?

VC Funding Down 67% in December

How Startups Change Lives

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

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I wrote a detailed review of Misfits here.

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Photo: Image of Arnold Schwarzenegger holding a book, by DALL-E 2

Me vs. ChatGPT: Who’s a Better Blogger?

ChatGPT, the hot new tool from OpenAI, excels at writing. So is it time for me to pawn my laptop and ride off into the sunset?


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Today, I decided to see who’s the better writer, me or ChatGPT.

Let’s take a post I wrote about the 6 essential elements of a startup pitch. Could ChatGPT come up with something better?

You be the judge….

My post from April 2022:

Last Thursday, I was preparing to judge a startup pitch competition. I thought to myself, “How can I make sure every startup hits the key points?”

Then, it came to me: a checklist!

Every time you pitch investors, you need to give them certain key pieces of information. Without those details, they may just move on to the next company.

Make sure that never happens to your business! Whenever you pitch, make sure you check off these 6 key elements:

1)  Problem. What problem do you solve? For example, Uber solved the problem of expensive, hard to get taxi rides.

2)  Solution. How do you solve that problem?

Uber makes it easy to get a ride with a simple smartphone app. You always know exactly what you’re paying and where your driver is.

3)  Traction. Show us a chart of your revenue, broken down monthly or quarterly. Also, compute a growth rate using a tool like this.

Investors want to see a strong growth trend. Make absolutely sure you give them that, if at all possible.

Don’t have revenue yet? Show us monthly active users, signups, etc.

4)  Market + Competitors. How big is your market? Who do you compete with?

I don’t get too hung up on complicated market size calculations, but here is a resource on how that is typically done.

I’m more interested in your competitors. Who do you lose deals to? Who do you beat for deals? And why?

Hint: “we don’t have any competitors” is rarely the right answer. Maybe no company does exactly what you do, but who is close?

5)  Team. This is especially critical for early stage startups. At this point, there usually isn’t a ton of performance to sell.

So you have to emphasize the quality of the team. Why are these the best possible people to take on this challenge?

6)  Ask. Here’s one of the strangest things I see: a founder telling a great story with solid traction, and then saying “thank you” and sitting down.

Umm, don’t you want something from us? 

Never forget to tell the investors exactly what you’re asking for! Tell us how much you’re raising, at what valuation, and specify if that’s pre or post-money. (If the valuation includes the money you’re raising, that’s “$X post-money,” also referred to as “$X cap.”)

It’s also good to specify what type of fundraise you’re doing. Is it a SAFE, a priced round, or a convertible note?

Say something like this: “We are raising a $1 million SAFE at a $10 million cap.”

If you hit these 6 key elements, you’ll have a solid pitch that gives investors the details they need. You’ll also have a leg-up on other founders who provide incomplete or unhelpful information.

Best of luck on your fundraise!

Next, I asked ChatGPT to write an article on the same topic:

Here is its answer:

Raising money for a startup can be a daunting task, but having a solid fundraising pitch can make the process a lot smoother. Here is a checklist of items to include in your pitch to give investors a clear understanding of your business and why it’s worth their investment:

  1. Problem: Clearly articulate the problem your business is solving and why it’s important.
  2. Solution: Explain how your product or service addresses the problem and how it’s different from other solutions on the market.
  3. Market size: Provide data on the size of the market you’re targeting and how you plan to capture a share of it.
  4. Traction: Share any traction your business has already gained, such as customer testimonials, partnerships, or revenue.
  5. Team: Introduce the team behind the business and highlight their relevant experience and qualifications.
  6. Business model: Explain how the business will make money and provide financial projections.
  7. Use of funds: Clearly outline how the funds will be used, such as product development, marketing, or hiring.
  8. Ask: End your pitch by clearly stating the amount of funding you’re seeking and the terms of the investment.
  9. Bonus: Show a clear path to exit and give an idea of what investors can expect to gain from the business.

By including these items in your pitch, you’ll be able to give investors a comprehensive understanding of your business and why it’s worth investing in. Remember to keep your pitch clear, concise, and visually engaging.

A strong pitch will also demonstrate that you understand your market, your customers, and your competition. It will also show that you have a clear vision, a solid team, a scalable business model and a sound plan for using the funds.

What strikes me most is how similar they are! 

ChatGPT included all 6 of the items on my checklist. It also added 3 more.

For the most part, I think ChatGPT’s answer is excellent. Clearly stating a problem, showing how you solve it, and showing your traction are critical.

But at certain points, ChatGPT gets sidetracked. It suggests showing projections, which most investors discount pretty quickly. 

It also tells us to show how the company will exit. This is wildly premature for most startups.

An exit is often 10 years off or more. There’s no telling how it will shake out.

What’s more, a founder who’s too focused on an exit is a red flag to investors. 

Are they just looking for a quick win by flipping the company to Big Tech? If so, this will only be a small outcome for the VC’s.

Also, ChatGPT doesn’t provide examples. Examples are helpful in knowing how to frame a problem simply or how to describe the terms of your fundraise.

Moreover, ChatGPT lacks a personal tone. I describe experiences meeting actual founders, which a computer program can’t do.

Sometimes, you want a little of that human touch!

In all, ChatGPT’s writing was surprisingly good. But I think it has a way to go before it puts me out of business. 🙂

Which post did you like better, mine or ChatGPT’s, and why?

Leave a comment at the bottom and let me know!

More on tech:

THE STARTUP PITCH CHECKLIST

VC FUNDING DOWN 67% IN DECEMBER

HOW STARTUPS CHANGE LIVES

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This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

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Use this link to sign up and you’ll save $15 on your first order. 

VC Funding Down 67% in December

Tough times in startupland show no signs of ending. Venture funding fell 67% in December from a year earlier, according to a new report by S&P Global:


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The aggregate value of venture capital-backed funding rounds worldwide dropped 66.7% year over year in December 2022 to $19.71 billion, which is around the same level of annual decline seen in November 2022, according to S&P Global Market Intelligence data.

The number of completed rounds fell by 57%.

These grim stats match what I’m seeing in the market every day. Far fewer deals are getting done, and those that are take longer to close.

The weakest companies have left the market.

The $100 million “seed” rounds in crypto startups with no product or customers were everywhere in 2021. Now, those companies have either given up on fundraising or gone out of business.

The good news is that good companies are still getting funded. I’ve been a part of several multimillion dollar seed rounds in recent months.

These companies have annual revenues in the hundreds of thousands, growing fast. They also have a head start in huge markets.

Even for these companies, rounds take months to close and sometimes don’t fill completely.

If your startup doesn’t have rapidly growing revenue, your chances of raising today are slim. Instead, I’d focus on getting more customers first, which will make your fundraise much easier.

If you are fundraising, you want to raise enough to give yourself runway for two years at least. The 18 month standard I used in 2021 just isn’t enough in this bleak environment.

And don’t count on all that “dry powder” saving you. VC funds may be sitting on a lot of cash, but they’re also deploying more slowly.


As for me, I’m investing in about one company a month, same as I always have.

A few great companies are born every year. In venture, our only job is to own a piece of them.

What do you see in markets today? Leave a comment at the bottom and let me know!

More on tech:

They Passed on Apple, Google and Facebook…Here’s Why

How Startups Change Lives

Entrepreneurial ADD: The Startup Killer

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

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I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order. 

Photo: “The-Movement LosAngeles Graffiti Art” by anarchosyn is licensed under CC BY-SA 2.0.

How Startups Change Lives

Many founders work incredible hours. So what’s all this for…just to make someone like me money?

Hardly.


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I know startups can change lives because I’ve seen it happen.

My mom lives in a small town in Wisconsin. Getting around without a car is nearly impossible — but she can’t drive.

She was born blind in one eye, making depth perception a mess and driving a nonstarter. The basic things we take for granted — getting groceries, making a doctor’s appointment, or just grabbing coffee at Starbucks — are very difficult for her.

Or were…until Uber and Instacart!

When I was a kid, we often waited over an hour for a taxi home with our groceries. And we did that outside in frigid temperatures, lest we miss the car.

Now, neatly packed bags appear on Mom’s doorstep, like magic.

We stood in deep snow waiting for the bus if we wanted to go anywhere. I think I spent half my childhood saying “Where the heck is this thing?”

Now, an Uber glides up in minutes, taking Mom wherever she likes.

One of my companies got acquired today. It made me think that despite this financial win, we do this job for a lot more than money.

Whether you’re a founder, investor, or startup employee, we want to make something amazing! We want to make a nicer life for other people.

So the next time you’re staring at your computer at 3am, remember this: what you do matters. You’re creating the future, and it’s going to be awesome!

What motivates you? Leave a comment at the bottom and let me know!

More on tech:

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They Passed on Apple, Google and Facebook…Here’s Why

“Kid, haven’t you heard of Friendster? Move on. It’s over!”

VC Jeremy Levine passing on Facebook, 2004 (speaking to Eduardo Saverin).

Ouch.


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Bessemer Venture Partners passed on Apple, Google, Facebook and countless other highly successful companies.

In what they’re calling an “anti-portfolio,” the venerable firm explained their reasons for turning each founder down. How they arrived at these decisions can teach us investors a great deal.

I noticed a few themes:

Valuation: Bessemer passed on Apple, Airbnb and Atlassian because the valuations were too high. All went on to become massive companies.

The very best startups tend to go for a premium price. Google’s Series A valuation was around $100 million – scandalous at the time.

If you know you have one of the hottest companies in Silicon Valley, why sell cheaply?

I expect valuations to be reasonable. But focusing too much on price can lead us to “value traps.”

These companies are cheap for a reason and never go anywhere.

Founders Too Young: David Cowan had incredible luck — his friend was renting her garage to Sergey Brin and Larry Page.

The two young comp sci students were working on a new search engine called Google.

The Bessemer partner was unimpressed with these student founders. And who needed another search engine?

“How can I get out of this house without going anywhere near your garage?”

David Cowan

What if Cowan had been willing to take just a 20 minute meeting with Sergey and Larry?

Too Much Competition: Bessemer passed on Facebook and Zoom partly due to competition.

There were already so many video conferencing tools. And haven’t you heard of Friendster?

What the Bessemer partners missed is that being first doesn’t mean you win. The best tool wins, and it’s often not the first.

General Hubris: Now, we come to one of venture capital’s worst scourges.

Sometimes VC’s are so overconfident they can’t imagine being wrong.

You see that in Levine’s treatment of Eduardo Saverin when he passed on Facebook. He knows everything and this “kid” is deluded.

You see it again in David Cowan’s rejection of eBay:

“Stamps? Coins? Comic books? You’ve GOT to be kidding. No-brainer pass.”

David Cowan

We investors must always remember that we do not know the future. The best we can do is take an educated guess.

We will be wrong most of the time. And we must never forget that.

So I try to keep an open mind. And even when I pass on a company, I try to be polite.

With all these misses, you’d think Bessemer is the worst venture firm in the world, right?

Wrong. It’s actually one of the best!

That’s the magic of our industry. We can be massively wrong almost all the time, and still be a huge success.

Bessemer was an early investor in LinkedIn, Twitch, Shopify and many other iconic companies. They may have missed Apple and Google, but they didn’t need them.

I applaud Bessemer’s candor in assessing its mistakes. That’s how we learn!

What mistakes do you see investors making? Leave a comment at the bottom and let me know!

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The Power Law (Part Two)

Entrepreneurial ADD: The Startup Killer

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If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order. 

Photo: Google founders Larry Page and Sergey Brin. “File:Google page brin.jpg” by Ehud Kenan is licensed under CC BY 2.0.