8 steps to building an A+ engineering team

Posted on April 16, 2012. Filed under: Hyperpublic, startups, venture capital | Tags: , |

One of my favorite new founders in the Lerer Ventures family just sent me a note asking for tips as he starts to build out his engineering team. As I’m sitting in an airport w time on my hands, I went long form. Thought I’d open source an early playbook. This advice is most applicable to recently funded seed stage founders:

1) only hire 9s and 10s. Dont just fill the seat, keep bar really high

2) make fast decisions. When you find a guy you like culturally, put him through half day interview process, test both technical aptitude and ambitions/ability to give everything they have to your co

3) if they pass both, offer next day, overpay on cash by 10k what you were going to offer, overpay on equity by 50% of what you were going to offer

4) give them no more than 3 days before offer expires and be ready to move on to new candidates if they don’t commit. Worst thing you can do is convince someone who doesn’t really want it to join.

5) with every hire ask yourself “is this someone who I can recruit against? Will every candidate going forward WANT to work with them? Do they demonstrate that we are a culture of excellence?”

6) create a culture of recruiting within your engineering team. Make sure everyone knows that “we are always recruiting A level engineers, independent of need, roadmap, or operational context.”

7) invest in teaching your entire engineering team how to be effective recruiters. It is a huge part of everyone’s job, not just founders…

8) contribute to the Enginnering community. Give talks, free advice, help neubs build their first rails app, open up your office to anyone that wants to come hack on whatever they are working on. The community is not some stocked pond that you can go fishing in when you need something built. Give to it before you try to take from it. Instill this ethos in your company’s culture.

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Newly Seed Funded? Don’t Commit to Monthly Updates

Posted on November 20, 2010. Filed under: startups, venture capital | Tags: , , |

Ok, you’ve been hustling for 2 months, selling the shit out of your vision to all of these amazing investors, trying to pickup a few nickels to rub together, and finally…finally, finally, finally, you have persuaded 6 or 7 very smart folks to cough up some seed capital.  Today the money hits the bank.  You did it! You got Keith Rabois, Ron Conway, Eric Schmidt, FirstRound Capital, and Jeff Bezos to give you $1 Million.  You go out, drink 15 shots of Tequila, puke, wake up the next day, and you say to yourself “thank god, I can finally get back to thinking about my product.  30 days or so pass, you have a few conversations with one or two of your seed investors, and then you realize “hmmm, I have all these smart people around the table, I should probably try to involve them as much as possible in what we’re doing.”  It has been about a month since you closed the round, and you say “I know!  I will right a MONTHLY update.”

You sit down, and the first sentence of your update reads as follows:

“All, we are so excited to have everyone on board.  This is the first of our monthly updates.  Every month we will write to you and tell you what’s going on with the company and how you can help”

I know this is the first sentence of your update because it was the first sentence of my first update my first month after financing my first company.  I also know this is your first sentence because of the 30 companies I have invested in the last 12 months, about 50% of them are run by first time entrepreneurs, and of those 50%, it is the first sentence of almost everyone’s first update.

Guess what? Of all those founders, myself included, who wrote this first sentence, not a single founder has actually sent an update every single month.  When everything is new, you think you are going to have news for investors every month, but operating a business doesn’t happen in predictable 30 day cycles.  The events, occurrences, accomplishments, and missteps that emerge when executing toward your vision unfold unpredictably.

Repeat entrepreneurs must have picked up on this unpredictability.  I can’t think of a single second/third/fourth time founder in our portfolio who has committed to monthly updates.

My advice: Don’t set a precedent that you will be communicating on a monthly basis, because you’re simply going to look like a loser when you promise that and don’t deliver.  Still send updates, engage your investors, make sure everyone knows what’s going on with the company, but do it organically, when you feel an update is warranted.  It can be 17 days after the previous update, or 60 days after the previous update.  You’ll get more out your investors this way and they’ll get more out of your updates.

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The Social Challenge of Releasing Early

Posted on November 19, 2010. Filed under: startups, venture capital | Tags: , , |

A decision Doug and I made at the onset of our company was to work and build in public.  Doug was lucky enough to participate in Y-Combinator and many of the ideals, this included, that we embody as a team stem from that influence.  The natural tendency when building consumer facing products is to keep your product under wraps until it is “ready” for prime time.  We come from a school where as soon as something is functional, we push it live, and begin to collect data as we iterate and improve.  From an execution standpoint, this methodology has and continues to prove effective.  From a social standpoint, however, it can be challenging.

The challenge is as follows: friends and family who are engaged and interested in your progress can only see what is visible to the public.  They don’t understand that your product is literally a public construction zone, and that you know your UX isn’t compelling or “finished” yet.  It has been an ongoing process for me to try to explain to my dad, for example, what it means to build a data layer on top of all the objects in a local environment.  Or to help my ex-girlfriend from college understand how real estate is related to hyperpublic.com.  Or to tell the litany of early and supportive users why it is that we haven’t given them something more to do on the site than what’s available today.

What I’m realizing is that if you are trying to execute on a plan that calls for Minimum Viable Product pushes with ongoing iteration and progressive layering in of feature sets and enhanced UX, you need to have strong resolve not to sweat the social challenges of this style.  My partner Ben Lerer recently had a great observation about his own and many of our collective experiences as founders.  He said, “Listen, at the end of the day, there is not a single person on earth that is gong to fully understand the vision in your head.  Your team, your investors, your family, consumers, nobody can see the future of your company and product as clearly as you.  That’s okay, your job is to keep communicating and clarifying it as best you can and keep executing toward what you see in your head.”  I thought these were pretty insightful words and have shared them with a number of my peers.

Anyway, in an effort to help communicate the bigger picture for Hyperpublic we just threw up V1 of an about page.  Notice that it isn’t styled, isn’t succinct, and is definitely a work in progress.  True to form, we thought why not push early, get feedback, and iterate.

 

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I am tired of reading blog posts from “bubble predictors”

Posted on November 15, 2010. Filed under: startups, venture capital | Tags: , |

I am tired of reading blog posts from “bubble predictors.”  It’s such an easy position to say things are crazy, this isn’t sustainable, when you don’t set a timeline for when we will begin to see a correction.  Oh really? You think valuations are eventually going to come down after a period of growth.  That’s novel, way to go dude.  Even better when you hedge your call and say “this isn’t sustainable, but I’m going to keep playing, just in a smarter way then everyone else who is doing the same thing.”  I can’t wait for you to point back to your November 14th 2010 post 24 months from now and say “look, I called it, nobody listened.”  If the market corrects in 6 months, you got it just right, if the market corrects in 24 months, you got it just right, what a cowardly position to take.

What pisses me off even more is that every time you voice your nebulous position on the trajectory of our market, you negatively impact it and contribute to the fulfillment of your prediction.  What’s the best way to catalyze a bubble?  Start talking about a bubble.

Generally I’m a fan of Suster’s blog and perspective, but I love how he complains that Angel investing is “driving up prices beyond their inherent value.” Guess what Mark, every single Angel deal that has been done in the last 10 years has been done above it’s inherent value.  That’s because 2 guys and a dog don’t have an inherent value.  Value is entirely market driven at our stage of investing, and if you think the pre-traction consumer facing web application is “inherently” worth $2M pre, but is not “inherently” worth $4M pre, you’re wrong.  Guess how much it’s actually worth?  About $60K, or whatever number you can arrive at by multiplying the number of man hours that went into it by the market rate of that labor elsewhere.

It also pisses me off that people are complaining about the number of angel investors that have entered the market.  Sure, this makes it harder for you to generate returns as an venture investor, when prices go up, etc…but more angel investors mean more founders can start more companies, realize more dreams, and create more innovation than they could 24 months ago.  Personally, I welcome anyone who wants to cut a $50K check to support a new product and pull a smart mind out of wall street or advertising or any other industry that is not pushing the limits of what can be.  I’m not saying all these companies that are getting funded deserve the funding or valuations they are raising at, and many of them will die, but I’d rather see a slew of dead carcasses on the side of the road with a single world changing product leaping over them on the way to victory, than a road with no carcasses and a world that could have been changed but wasn’t because you scared all of the new angels out of the market with your fire and brimstone analysis of why “angel investors who think they are cool at parties aren’t really cool.”

So here’s the deal.  I’m not saying that there is no funding gap, there will be.  I’m not saying that people aren’t overpaying for deals, some are (and btw some are smart to overpay for deals.  You would have said the Bijan overpaid for Twitter and David Sze overpayed for Facebook, and they are both laughing all the way to the bank at the slew of investors who sat on the sidelines when prices got high).   I am simply saying that all of this entrepreneurial activity is a net-positive for the world.  Founders and investors, take note that you are playing in risky waters and lots of you are going to lose lots of time and money over the next 5 years.  Some of you are going to make gobs of money, change the world, and do it on your own terms.  If you don’t like that setup, go be a lawyer.  If you do like that setup, put your head down, make the smartest decisions you can, and play.  Don’t complain about it.

P.S. I realize there is a very good chance I am going to have to eat these words in the foreseeable future, but I have no interest in hedging.  Suster: it’s all love, but I hated your most recent post.

 

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Living in a State of “Anonymity PLUS”

Posted on October 12, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , |

As I sit here on this train, bound for the Meadowlands where I will undoubtedly watch the Jets destroy Randy Moss and the Vikings, it occurs to me that although unnamed, I am not anonymous in this crowd.  Miriam Webster offers the following 3 definitions of anonymous, none of which (save the most literal “not named”) describe my state on this train.

Anonymity would imply that I am unidentifiable, when that is not, in fact, the case.  The people who surround me here actually have access to enough data that they are able to categorize and classify me.  Despite the stigma around that concept, I am not concerned in the slightest.  Why? Because I control the data I am sharing with the people on this train.  In fact, because I control the inputs that define their impression or perception of me, I am actually excited for them to consume this “metadata on top of my physical presence.”

I wear a long sleeve green Rugby shirt in support of the Jets, which when paired with a time stamp (1 hour before game time) and location (on a train headed westward from Manhattan), identifies me as a Jets fan.  I am proud of this facet of my identity and wish to communicate it to all who will observe.  Why?

1)   I guess I seek the camaraderie. Other Jets fans in my presence will recognize me as one of their own

2)   I want to display that I welcome conversation and interaction with those who share my affiliation or interest

3)   I want to further the facet of my identity that I am showing, spread it if you will.  If I am able to convert others or strengthen/support the interest which I make visible, there is a reflective property where I actually strengthen my own identity (basic missionary theory)

4)   I see myself publicly tagged as “Jets” and it affirms my concept of myself and my level of commitment to what it represents.  The fact I make it visible to all reminds me that it is core to my identity

Clothes are but one example of a tool people use to communicate and control their public identity.  The woman to my left smiles upon eye contact, publicly sharing a “tag” of friendly (the most frequent tag on hyperpublic.com to date, btw), while the drunk to my right sits face cringed, communicating “misery” or “inapproachable.”  We were given the capacity to publicly display emotions through facial and body gestures, a sort of biological tagging system which non-verbally influences the level and type of engagement we have with our surrounding population.  These signals are completely public, the fact that we share them with everyone is an almost biological recognition that there is, indeed, potential value waiting to be extracted from those with who we share a physical, but not yet social relationship.

Our everyday, real world lives, do not exist within the bounds of true anonymity, yet the majority of internet products that attempt to digitally replicate or enhance real world life, feel an obligation to preserve the veneer of this false ideal for their users.  I believe we move through physical space in a state of “Anonymity PLUS.”  This is a state where we are aware that we are visible to an unfiltered public eye, and thus control and define the data which it is to our advantage and pleasure to broadcast widely.

Hyperpublic is an experiment in recreating that state of “Anonymity PLUS”.  There are no names unless you chose to tag yourself by one.  There is no such thing as private data here, but there is also no data here that you have not actively decided to push to the public.  There is undoubtedly value to be had by sharing that data which you want to be seen by all (think about the value of appearing at the top of Google results for example, how would you wish to define yourself to all who Google you). Our goal is simply to maximize that value by giving your public tags as broad a reach as we possible can.  You choose your green Rugby shirt when you get dressed in the morning, why not choose to display all the data you wish to communicate publicly?

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NYT says Tech is Changing our Brains, but What About our Language?

Posted on August 26, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , |

Our language is changing.  Words like “OMG,” “LOL” and “TTYL” that were spawned within a digital environment out of constraints translating verbal thoughts into online communication (the primary constraint being effort of typing), have somehow managed to cross the chasm from internet vernacular into physical world verbal communication.  They have taken on a meaning that is distinct from the longer string of words which they were created to represent, and we have recognized them as enhancements in our person-to-person communication.  They describe a concept, or feeling, or action that is more applicable to a given use case than any combination of letters and sounds that existed prior to their creation, and thus they have penetrated our lexicon.

The words “Text” and “cloud” have existed for centuries, but have taken alternate meanings in light of our relationship and engagement with technologies like SMS and Data.  The phrase “text me” (or the use of text as a verb) alone, occurs in a frequency that I’m guessing has supplanted any other definition as the primary use of the word if we are measuring by volume utterance across contexts.  “Cloud” on the other hand, as a reference to hosted data storage has penetrated small circles of tech-savvy consumers, but it may be 3, 5, or 10 years before general population’s concept of “the cloud” grows to the point where this usage will truly enhance our day to day experience in a way that is competitive with the value derived from describing a puffy white object that holds rain in the sky.

What I find fascinating, is that while our relationship with the internet and technology more broadly is redefining how we communicate with each other in it’s absence (changing our offline language structures), I do not see the same language change in our non-verbal communication patterns.  Where did the “thumbs up” come from and how did it grow to represent approval or “good job.”  How did a forefinger and a thumb come to signal “ok?”  Was that a crossover from sign language which developed an application that was worthy of general population usage (like OMG, or LOL)?  That would be an instance of a language created through a set of constraints (hearing impairment) penetrating a non-constrained environment.  What about a wink or a smile, or any of the other physical gestures that countless online companies have tried to recreate on the web (Facebook poke, digital gifting, etc…)?  We spend an increasing volume of our time with head tilted downward, eyes on screen, two thumbs on mobile device.  Is there really not a set of non-verbal gestures that recognizes or applies to the fact that at any given moment 20-30% of the people we are surrounded by are engaged in this physical position and action?  What about prompts for people to take this position when they are not in it?

The reason I ask how these physical gestures came into prominence, is because I see a new set of constraints in our communication for which adaptation of our physical non-verbal communication would strongly enhance our experience.  Specifically, there is a set of use cases around real time mobile communications with people in physical proximity that requires multi-person synchronous or asynchronous engagement with an application or technology.  The best way I can think of to open up that use case is to graft these applications to physical world non-verbal gestures (either existent or new).  And what I don’t know is whether this type of communication is so slow to adapt that we shouldn’t even bother exploring it??  Anyone studied this?  Isn’t linguistics a major in college?  I’ll take you to good dinner if you can educate me here.  And if you happen to be Product/UX minded, we can even splurge on dessert.

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How Many People Are You Consuming in a Day?

Posted on August 25, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , |

When thinking about product, I often find myself going down the path of trying to replicate/enhance offline behavior through software.  Lately, I have been absolutely obsessed with the concept of productizing or at least enhancing offline, non-verbal communication.  I’ve been thinking a lot about what people consume on a local level.  It’s a question that is very important to our future at Jumppost and a question that is becoming increasingly interesting to investors and entrepreneurs as location based technologies change our capacity to segment users and build user experience by specific geographic parameters.

It is not surprising to me that much of the innovation we’ve seen in the last 12-24 months in the local space has been focused around the interaction between consumers and local merchants (restaurants, dry cleaners, etc.).  If we map local consumption patterns, I would say that local goods and services are the second most frequent object of consumption in a consumer’s local experience.  What I buy when I walk out my door definitely defines my local experience, and the things I consume in the largest volume have a great impact on my perception of my neighborhood, and as an extension, my perception of myself as a member of the community in which I live.

The only object(s) I see myself consuming that has a greater influence on my local experience, and as a derivative, my local identity, is the population that surrounds me.  Although a very lightweight form of consumption, I have been trying to quantify the volume of people that I consume in a given day.  I will call consumption any visual intake, and then value the volume of consumption by my level of engagement or interaction with each person I consume.  I’ve been asking folks lately how many people they think they pass by or see in a given day in New York, and the answers are all over the place.  Some people say 50, or 100, some say 500, and I personally would posit that the number is closer to 10,000.  Of those 10,000, I think I probably consciously register 1000-2000, maybe I make eye contact with 500, and have some richer form of communication whether verbal or non-verbal (i.e. hold a door, smile, etc.) with 100-200.

What would a product look like that attempted to replicate or enhance the experience of human consumption at the 10,000 person level?  I see elements of the answer in concepts like Chatroulette and Hot or Not, which take seemingly random consumption of other human beings, and then in both cases, push that lightweight (10,000 person) consumption down the funnel toward more active communication.  But then I wonder if the product that will capture/reflect/enhance my consumption of local inhabitants needs to push our extremely lightweight relationship down the funnel into some more meaningful communication, or perhaps it is enough to simply overlay that consumption with some richer dataset.  What if every person you consumed at the local level had a sign on their chest with a nametag?  What would change?  Would people say hi and push themselves down the communication funnel?  Not sure.  Maybe it’s not a nametag that people want.  Maybe I’d prefer to see an image of everyone’s spouse/partner on their shirt?  Or a floating sign with their occupation above their head?  Would that enrich my local experience and consumption of the people that surround me in a way that would improve the quality of my local experience?  Probably.  I don’t have a ton of answers here yet, but super interested in wrapping with anyone who wants to think about this with me.

P.S. If you have a second to drop your estimate of the number of people you think you 1) consume, 2) communicate with, and 3) make eye contact with in a given day, please drop your answers and the name of your city in the comments.

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Where to focus when “dating” investors

Posted on May 5, 2010. Filed under: startups, Uncategorized, venture capital | Tags: , , , |

One of the most important factors in the success or failure of a venture capital firm is their ability to attract and partner with entrepreneurs whose financings are competitive.  These “top tier” entrepreneurs have either built an asset which is visibly valuable to the market (all investors) or achieved something in a previous endeavor which differentiates them from the average early stage startup.  In this scenario VC’s are actually competing for the opportunity to invest in a company.

Last night I stumbled into a conversation between one of General Catalyst’s Limited Partners (LP) and a group of young entrepreneurs that broadly fit the bill of “top tier” founders.  This LP is responsible for investing the endowment of a major university, and his job is to measure the efficacy and trajectory of the funds in which his endowment is invested.  There are concrete metrics of success and failure in VC (namely returns and exits), but because those metrics don’t materialize for 3-10 years from the time a new fund is closed, LP’s must use softer metrics to measure the health of a fund.  This particular LP, recognizing the importance of a firm’s brand in winning competitive deals, asked these 3 young founders the following question: “When you meet investors and are deciding who you want to work with, what factors influence your decision?”

In listening to their responses, many of which echoed the value propositions a fund would use to market themselves into a deal (i.e. team building, relationships, introductions, etc..), I realized that my view of what makes an interesting investor may be abnormal.  To me, there are 3 things worth paying attention to:

1)      Incremental data: as a founder, you are constantly making decisions based on incomplete data sets.  An investor sits above your market, and through investments and involvement in companies adjacent to your product or market, or through past experience building analogous products or companies to yours, they represent access to a more complete dataset.  With more complete data comes better decision making, so an investor’s ability to ethically and frequently improve your datasets is of real importance.  If you’re building a company that is dependant or interfacing with the twitter ecosystem, there is an obvious advantage to having Fred Wilson or Jack Dorsey as investors.

2) Incremental thinking: When speaking with investors, my goal would be to communicate all of the important data I have as clearly and quickly as possible.  More often than not, as a founder, you will have spent way more time studying and understanding your market than an investor, but I think the goal of getting to know an investor should be to learn how they think.  Get them up to speed as quickly as possible, and then see if, based on a common dataset (or even better, with a common dataset, plus their incremental dataset), the investor identifies the 3-4 most important levers that impact your strategy and vision.  Ideally, you will see eye to eye, but then you hope they will push you with new thinking and ideas that you would not have arrived at without their help.  This incremental thinking and analysis will be something you can look for from an investor over the life of your startup.  The more data you collect as you continue to execute, and as your market evolves, the more important it becomes to have an investor who will be capable and excited to help your interpret it when making directional decisions. (NOTE: I hear many founders talk about wanting their investors to give them money and then “get out of the way.”  This is arrogant and an underutilization of a relationship that should be a major boon to your company)

3) Trust: I can’t stress enough the importance of trust in a relationship with investors.  There are different levels of trust.  First and foremost, you need to be able to look the guy or girl in the eye from whom you are raising capital and see that they are a good person.  Ask yourself, “is this guy ethical? Do we share common values? Can I predict how he will react under stressful situations and do I trust that he won’t compromise our common values no matter what the circumstance?”  If you can answer yes to that level of trust, the next layer of trust is trust that you can expose all the data you have without fear.  Many founders feel like they have to “manage” their investors, share the good data, and deemphasize or mask the bad data.  This feeling largely comes from a lack of predictability around an investor’s response to bad data.  Personally, I would look for an investor who you feel comfortable exposing your weaknesses to.  Trust them with the whole dataset and you can maximize the “incremental thinking” piece of the equation.  Trust them with only a partial dataset and you reduce the likelihood of success.  I guess I’m saying find someone you trust not to freak out when bad data emerges, because I can guarantee you…it will.

So to recap, look for data-driven thinkers with experience executing around dynamic and changing datasets in a fashion and cadence that is consistent with your personality and ideals.    

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Lost In Translation

Posted on April 21, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , |

JumpPost is getting some nice love from the press.  Here’s a sample of our coverage.

WPIX Eveneing News: http://jumppo.st/c3CZbQ (VIDEO)

New York Times: http://jumppo.st/cJ7lSS

NY Post: http://jumppo.st/bNbCp3

Gothamist: http://jumppo.st/aktNeD

Curbed: http://jumppo.st/aKa9AU

Generally speaking, I think the press is doing a great job of communicating our value proposition and story.  We are supremely grateful for the attention and kind words.

One point of clarification: The NY Post said we are now raising $1 Million.  That’s not true.  I told Jennifer (who is awesome) that when we are ready to raise, we will likely shoot for north of $1 Million. We aren’t quite there yet.  The time element of our fundraising goals was lost in translation.  I only clarify because whenever I read in the press that a company is raising money, I interpret that to mean “the company has been in the market and is having a tough time raising money” (Foursquare type rounds excluded)

Not the case with JumpPost.  We have not pitched a single investor for outside capital in our 7 months of existence.  When we do, I probably won’t advertise it in the newspaper :)

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Apple hit’s “RESET” on the LBS market

Posted on April 11, 2010. Filed under: startups, venture capital | Tags: , , , |

By now you have probably read Dave Mcclure’s post positing that Foursquare will lose to Facebook in the Location Based Services race.  He argues that applications like Foursquare and Gowalla are not capable of scaling fast and cost effectively enough to beat out larger platforms like Facebook and Google, and delivers a sobering message to some of the more hyped early stage companies in the venture/startup community.  I agree with Dave’s assertion that Foursquare is going to have a hard time winning here, but for a completely different reason than any he suggests.

I’ll start with the assertion that the location space will not be won or lost at the consumer application level.  I was talking with my partners at Lerer Ventures a few weeks ago about whether or not I’d invest in Foursquare at the meteoric valuations being thrown around in the press, and my answer was yes…but not because I thought it was such an amazing consumer experience that it would grow to 400 million users and become the next Facebook.  My thesis was that the first company in the “check in” space to build a critical mass of users and check ins would expose it’s API to 3rd party developers and become the default platform on which all future applications wishing to leverage the all-valuable location data point would build.  Location is such a clean and highly monetizable dataset that I believe many applications will wish to use it as input in their services, and I thought Foursquare stood a decent chance of being the provider of this data, very similar to how Facebook has become the default API on which every developer wishing to leverage the “social graph” will build.  Fred Wilson recently wrote a post which in my opinion correctly stated that in order for a platform to truly dominate, it must be successful in attracting 3rd party application developers to build out the surrounding ecosystem.  Foursquare had the potential to do this.

I use the past tense in light of a recent announcement made by Apple, which I believe was largely overlooked by Mcclure, and to be honest I haven’t really seen anyone talking about what I perceive to be an overnight and massive disruption to the entire “check in” market.  Foursquare and other “check-in” based applications were working toward the most interesting location dataset I know of, but even it is still quite incomplete.  In the absence of “persistent tracking”, which would be a continuous line of a given users movement through the physical world, “check in” companies began to collect multiple location data points per user.  If you mapped those data points, it would look more like a constellation than a smooth and continuous line. Apple just announced that with their new operating system, applications will be able to engage in “persistent location tracking.”  Basically, they opened the door for any application that successfully acquires a database of “smooth lines” to supplant Foursquare as the default API on which other application developers will build.  If I am a 3rd party developer, I would much rather build atop the “smooth line” database than a few spotty check-ins per user, and the “check in” is not a mechanism that was designed to capture “smooth line” data.  If the LBS market were a game of Contra, Apple basically just hit the “RESET” button when Foursquare was on Level 7, and now Foursquare, like Facebook and every other platform chasing this attractive dataset, is back to “up up, down down, left, right, left, right, B, A, B, A, Select, Start.”  Game On.

P.S. If I have misunderstood the implications of Apple’s announcement, please feel free to bombard me with insults.

P.P.S. Now that I think about it, if I’m Foursquare, this development would be an awfully good reason to take the early exit offer from Microsoft…

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So You Signed a Term Sheet? You’re Not Out of the Woods Yet

Posted on March 27, 2010. Filed under: startups, Uncategorized, venture capital | Tags: , , , , |

The first time I raised capital, I remember negotiating my term sheet with Rob Stavis at Bessemer Venture Partners (who, btw is as straight shooter and transparent a VC as I know).  The deal they gave me was completely clean and standard, but as a first time entrepreneur I scrutinized over every word of that term sheet, to make sure I understood exactly what I was signing and agreeing to.  Once I got comfortable with every sentence in the term sheet, I signed it, and waited anxiously to receive their signature back.  When it came, I breathed a massive sigh of relief, turned it over to our lawyers, and thought that I had successfully completed the negotiations around our raise.

What I didn’t realize, and what I think most first time founders don’t know, is that a term sheet is simply a guide that lawyers work off of when creating the final documentation around a financing.  When you blow a 2 page term sheet up into 50 pages of documentation, it turns out there are a ton of specifics which are not addressed when a founder and investor first agree on a deal.  These specifics, when addressed in the docs,  can fall in the interests of an investor or a founder, and thus the negotiation you thought you were done with opens up for a “round 2.”  This “round 2” can be awkward, because emotionally, you have already agreed to a deal and “partnered” with your investors. Everyone is happy and excited, and then you are once again put back on opposite sides of the table.

What I learned from Rob, was that negotiating a financing isn’t about winning and perfectly optimizing for your interests.  It is an exercise in reasonability.  Sharp elbows and hard lines on small (albeit important) points are a waste of time and good will between you and your future partner.  Once you agree to partner, your collective goal should be to complete the deal in a way that is even, not self interested.  My advice: don’t sign a term sheet with someone who you don’t think is capable of going through this exercise in reasonability with you.

P.S. JumpPost is looking for a legit UX/UI designer/developer for a small project.  holler

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“Pull” Your Ideas from the Ether

Posted on March 25, 2010. Filed under: startups, venture capital | Tags: , , , , |

Sort of the nature of being an entrepreneur is that you see opportunity all around you.  The question “what if?” comes into your head 10 times a day, and most of those what ifs exist for a moment and then dissipate back into the ether.  What I’ve learned over thousands of what ifs is that if you don’t grab those ideas, almost right at the point of conception, and forcefully pull them from the ether into reality, most of them will never return to your consciousness.  A lot of building companies is about making concepts and ideas real…bit by bit.  You write an idea down on a napkin: slightly closer to reality.  You test it on a friend: slightly more real.  You test it on 100 friends: slightly more real.  You incorporate: slightly more real.  You build a product: MUCH more real.  You get a customer: really real., etc…

The mechanisms of making an idea real are learned with practice.  I remember quitting my first banking job out of school, thinking “I am an entrepreneur.  I have a ton of ideas.  I quit.  I am going to start a company.”  That quitting part was easy.  And then, at 23 years old with not a shred of experience executing…I found myself paralyzed in the effort.  I literally had no idea how to put one foot in front of the other to make these ideas I had been cultivating into real things.  The chasm between the stage I was at and operation appeared infinite.

I was not as resourceful then as I am now, and I more or less resolved that I needed to learn how to put one foot in front of the other from people who had achieved what I wanted to accomplish.  My route was to join General Catalyst, where I would work with a bunch of successful entrepreneurs that I could literally study.  This was the right move for me, although in hindsight, it turns out I could have used this magic machine called “Google” to figure out the first 10 steps to making my ideas real.

Different entrepreneurs have different styles of thinking.  Some go deep in a vertical, understand everything about a market, and then figure out what it needs.  I am much more of a horizontal thinker.  Ideas tend to come when I see similarities between markets, and the opportunity to apply successful models or concepts from one market to another with analogous characteristics.  One easy practice I have developed for capturing these ideas and pushing them slightly closer to reality is simple:  I keep a spreadsheet with everything I think is interesting, and force myself to power rank my conviction around each one.  My best ideas earn a 1 and sit at the top of the sheet.  My worst ideas earn a 4 and are waaaaaay below the fold.

Once the ideas are captured, making them more real than that becomes a bit of a bandwidth issue.  With only 19 working hours in a day, I find myself constantly pulled between JumpPost (85-90% of my bandwidth), and the myriad of other concepts that deserve to become real.  Taking on an investing role with Lerer Ventures has allowed me to use that remaining (10-15%) of my energy to make a whole lot of great ideas a little more real.  Now instead of building all the 1’s on my spreadsheet (which I could never do), I let those ideas influence where I spend time investing the fund, and more often than not, I am able to find people smarter than me who have recognized similar opportunities.

My advice to those who are thinking creatively: start tracking and ranking even the faintest of dreams.

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The Blurring Line between Commerce and Ad Models

Posted on March 11, 2010. Filed under: startups, venture capital | Tags: , , , |

A lot of different ideas are converging in my head right now, largely as the result of two discrete conversations.  The first, is more of a broad thesis I am developing about alternative revenue streams for publishers, and how niche publications are thinking about monetizing their audience and assets beyond “ad models.”  The second is a thesis I’ve been kicking around in the realm of Charlie O’Donnels NextNY conversation last night on “Disruptive Commerce Models” or “E-Commerce 2.0.”

Until last night, I largely viewed realms to be separate, but a conversation this morning with a very bright guy named David Cho made me realize that one of the fundamental drivers influencing my thinking in both realms is related  to a broader phenomenon:

Phenomenon: The line between commerce and advertising is blurring.  Think of the relationship between the below monetization mechanisms as a spectrum, where both ends of the spectrum are losing $ volume to the middle:

The Commerce/Ad Spectrum

Commerce 1.0 (buying inventory, taking risk, reselling at a premium to consumer)

“Commerce light” (no inventory, really brokerage between suppliers and consumers)

CPA (performance)

CPC (performance)

Brand Advertising

I see tons and tons of niche publishers looking to “transform” their model away from “ad models” toward “commerce models” (largely chasing what they perceive to be the strategy that made Gilt grow like a weed).  David Cho was the first niche publisher I have met since I started investing who said “fuck that, the ad-model isn’t broken, I just need better units to monetize my base.”  I actually think he may be right…but those better performing units are going to start to look more and more like commerce functions.  Kayak.com is a perfect example of an ad based model that really operates and feels like a transaction/commerce model to consumers…now, think about a world where widgets being distributed onto publishers sites, are capable of performing transactions and transaction like events within the ad unit…and you start to see where I’m going with this.  So that’s advertising bleeding up the spectrum into commerce…

Now let’s look at commerce bleeding down spectrum to advertising.  Last night’s conversation at NextNY was theoretically about Commerce startups, but in reality, I didn’t know how to define “Commerce” or an “e-retailer” any more…the reason is because so many of the folks in the room pursuing flash sales, group buying, etc…aren’t really retailers at all.  They are more like brokers, bringing together suppliers and consumers.  Is a broker a retailer?  Because these brokers are similar to retailers, but brokers also look an awful lot like ad units…bringing together suppliers and consumers for a fee (without taking inventory risk).

All of this is to say I don’t think there is a hell of a lot of difference between Ad models and “commerce light” models when applied to an audience aggregated through some sort of editorial voice…so I’m interested in talking with people who are pursuing the nexus point of these two worlds, especially if you are packaging that together into a “turnkey” monetization mechanism and selling into publishers.  If you are…and you’re smart…I’m interested in learning from you and maybe even investing in you.

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Stress = |Expectation – Actuality|

Posted on March 10, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , |

It’s 1:14 AM on the morning of my company’s launch.  I am sitting at my desk, in a giant empty office…more or less waiting…everyone has gone home for the night, there is no panicking, no last minute hiccups…a couple loose ends to tie up with our lawyers, but oddly enough…we are ready.  This is what’s boring about working with Doug Petkanics… he is painfully reliable.  30 days ago we designed a product development roadmap that predicted we would launch our company today, and sure enough…we are launching our company…today.  Not 1 day late, not 1 hour late…right on freaking schedule.

I often write about the ups and downs, the unpredictability of startup execution, and stupid Doug Petkanics is screwing up my whole shtick.  Prior to bringing Doug on, an early member of JumpPost, Mike Weaver, defined stress to me as “the result of any disconnect between expectation and actuality.”  He said it is in these moments where an event occurs contrary to expectation, that stress is born.  Finally, Mike argued that in order to live a stress free life, we must shed all expectation, and simply live in the moment.  I thought about this for a minute, and then rejected his argument in favor of another that also seemed consistent with his definition of stress.  I said “in order to live a stress free life, you just need to be accurate when defining your expectations. “

Doug seems to have mastered the alternate theory I put forth, and it is reflected in his consistently cool demeanor under pressure.  I’m not sure I’ve ever worked with someone with such a firm grasp of their own capabilities, but day in and day out, he perfectly calibrates our collective expectations.

Our value proposition is going to hit ~250,000 in boxes in the next 24 hours…should be an interesting first day live for JumpPost.com :)

Update: well, not quite 250K…about a 1000 people clicked through to a shared listing we had in NYC’s Thrillist…it’s a start :)

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Co-Founder + Seed Fund = Acceleration

Posted on March 3, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , , |

So, yesterday I mentioned that we “pre-launched” JumpPost.  I will get back to more theoretical/functional analysis on this blog tomorrow, but I’ve been dying to share the following additional news:

1)      I am super excited to introduce my new(ish) co-founder, Doug Petkanics.  Doug was the technical lead on the founding team at Frogmetrics (Y-Combinator & Founders Fund backed analytics company).  I spent 6 months recruiting and waiting to bring on the right partner, and couldn’t be more excited and pleased to have Doug on board.  In short, he borders on genius…so that’s nice.

2)      I am equally excited to share the news that I have become a Venture Partner at Lerer Media Ventures (LMV).  JumpPost has relocated to Betaworks, with whom LMV shares space, and we are excited to build our company on top of the fund’s platform (see previous post on the value of a platform).  Check out our new digs:

Of these two pieces of news, the first one doesn’t require a hell of a lot of explanation.  Of any decision we have made in the last 6 months, the decision around recruiting a co-founder was by far the most important in the trajectory of our company.  I wrote previously about patience in this process, and how I decided to execute without a technical co-founder until a true superstar emerged…that strategy panned out.

The second piece of news regarding my role in our new seed fund is worth exploring in more detail.  It is not common for a full time CEO to take on the role I have at a venture fund, but there is some precedent.  Rich Barton is the Chairman & CEO of Zillow and a Venture Partner at Benchmark Capital.  Toni Schneider is a Venture Partner at True Ventures and is concurrently the CEO of Automattic (creator of WordPress).  I’m actually pretty sure that Tony Conrad and Om Malik are also both Venture Partners at True and running Sphere and GigaOm respectively.  Chris Dixon is CEO of Hunch and a Partner in Founder Collective, and my guess is if I kept digging the list would grow.  If done properly, this setup can be hugely accretive to a CEO’s efforts.  If done improperly, it poses the risk of distraction.

The second analog that has some similarities to what I’m doing would be an Entrepreneur in Residence program.  The New York Times actually just wrote a great piece examining the theory behind an EIR program.  The benefits described in that article are quite similar to those that JumpPost will enjoy through my participation in LMV.  The synergies between my fund activity and operational activity are primarily in the areas of recruiting, strategic direction, and fundraising.  Let’s explore each:

1)      Recruiting: ~30% of the founders that pitch us for seed funding are working on projects that will not exist in 9 months.  Building a map of talent in New York, and getting to know great people working on not-so-great projects is hugely accretive to JumpPost (and the fund).

2)      Strategic/Product Direction: Many active CEO’s make angel investments or help invest venture funds for exposure to new data and thinking.  For example, when I meet with 5 companies raising capital that are pushing on the bleeding edge of Facebook Connect, their experiences inform how JumpPost approaches its Facebook strategy.  The stimulus and learning derived from early stage investing is an impossible advantage when building a company.

3)      Fundraising: I have for a number of years, and continue to share thinking with an incredible group of investors.  In a world where almost every deal we look at is syndicated, I am fortunate to get to think alongside some really bright investors (some of whom I didn’t previously know).

There are two major differences between my role as a Venture Partner and that of an EIR.  One, EIR’s are expected to leave the venture firms with whom they are spending time, whereas I have made a long term commitment to build and invest LMV with Ken and Ben.  Second, there is an expectation at the end of an EIR gig that the fund will invest in an EIR’s project.  It is entirely possible that JumpPost’s capital requirements will not be consistent with the thesis of our fund.  As such, there is no expectation of partnership between the fund and my company.

So, lots going on…first 30 days both working with Doug and working with the new fund have been awesome.  Life is good.

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“Minimum Viable Lawyering”

Posted on February 26, 2010. Filed under: JumpPost, startups, venture capital | Tags: , , , |

So today I was talking to a new lawyer at my law firm, Cooley Godward, about a terms of use for JumpPost and things started to go down the road of a custom contract.  I said to him “Eric, are you familiar with the concept of a minimum viable product?”  He said yes, to which I replied “That is what I am releasing on Monday.  I want the ‘Minimum Viable Terms of Use’ that will support my minimum viable product.  When we get to the point where it makes sense to have something more elegant, we’ll refine it.”

For founders, working with lawyers can be extremely challenging…if done properly, there is a tremendous amount of value in the time you spend with your lawyers…if done improperly there is a tremendous cost.

When I first started to engage with counsel (in my last company), I was constantly worried about the ticking clock (“this guy is $600 an hour, we’ve been on the phone for 30 minutes…I just spent 1% of my monthly burn in the blink of an eye”).  Unfortunately this mindset causes founders to try to speed through calls, avoid asking important questions, and generally fosters a dynamic that is “watchful” as opposed to “collaborative.”  Although the legal line item can often be the largest expense in an early stage startup’s budget, I have found that getting comfortable with this expense and being conscious of it, as opposed to fearful, will maximize value and minimize waste.

Before we get into how to manage cost, let me start by saying that one of the most important things you can do when working with a law firm is invest in building a real relationship with your lawyer.  Don’t worry about the clock, just worry about getting to a point of real trust and mutual respect.  It will pay for itself 10x.

Then, once you have gotten to know your lawyer, don’t incur costs until they are absolutely necessary.  You may have a “legal roadmap” that requires an incorporation, option pool creation, terms of use, privacy policy, proprietary contractual agreement with a vendor, etc…and the cost of all of those efforts may total $50K.  Most founders just want to check every box on their plan, so they dump all the work on their lawyers desk and say “go.”  A month later they get a $50K check and then have to explain to their investors why their first months burn is so high.  What I’ve learned is that you can line up these expenses with your operating plan, and only ask your lawyer to begin working on them when they become a stop gap to further execution.  So, day 1 you need them to incorporate (free to $1K depending on the firm), but hold off on that option pool until you have a better sense of your hiring timeline.  Why spend a $1 today, when you could wait until tomorrow.  When building my first company, I said “go” to a $20K customized legal contract in the first two months of operation.  I knew we wouldn’t need that contract until our product was live 6 months later, but I wanted it “in place.”  That contract never got used once.

So the lesson is, don’t invest in a whole lot of legal infrastructure ahead of need, but rather approach your legal strategy the same way as you would your product strategy.  Only spend what you have to when you have to.  Get something out the door, acquire new data, and then iterate on what you have in place.

Note: There is an element of “protecting against future occurrence” when it comes to the law that sometimes commands more of an up front investment than is consistent with lean product development philosophy, but this is where having a lawyer you categorically trust is extremely important.  Pat Mitchell at Cooley understands my lean startup philosophy and only advises me to spend when it is critical.  Make sure your lawyer is giving you the advice that’s best for your company, not his/her near term cash flows.

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The Emergence of VC/Angel Syndicates

Posted on February 23, 2010. Filed under: startups, venture capital | Tags: , , , , |

So I’ve been spending a bit more time than usual talking to entrepreneurs raising capital and venture capital firms investing in early stage companies, and there is a trend that I am trying to wrap my head around.

The trend: large venture capital firms are issuing term sheets committing to invest between $500K and $1.5M in early stage companies, and then offloading anywhere from $100K-$500K of the round to professional angels and seed funds.

So the question is, why are they doing all the work to find/negotiate/invest/and then shepherd these investments, only to let smaller guys piggy back on their deals?

I’ve got a couple potential answers:

1)      They want to reduce their exposure to the investment by syndicating the deal, but as capital requirements come down for building companies, there isn’t really room for the syndicate of yesteryear.  It used to be that a Series A round would frequently be split between two large venture firms, each invest half the capital with the confidence that future funding requirements would be high enough that they’d both be able to put real money to work behind their bet.  But now that the $2M A round is being replaced by $500K seed rounds, and the $10M B round looks more like a $2-5M A round…VC’s are choosing to syndicate with partners who can afford to invest in the first round, but whose coffers aren’t deep enough to go heads up in the second.  What that means is that the VC leading the deal, should this deal be a winner, doesn’t have to fight with another deep pocketed investor for an outsized portion of the next round (read: they’ll have an early option to increase their ownership).

2)      They see the level of activity occurring in seed stage financing, but haven’t found a great way to participate in it.  A VC with a $600M fund and 5 partners has a very hard time making small bets, getting small bets through their process, and putting proper internal resources (partner bandwidth) against those bets…so now, if they are no longer the first investors to not only see promising new companies, but also see the data on which promising new companies are “breaking out,” it is becoming increasingly important for them to “make friends” with the investors who are seeing those companies and data.  The notion that angels and seed investors are a source of VC deal flow is not new, but the change in funding landscape and emergence of seed/feeder funds and super angels is cutting into VC’s deal flow.  So when they do find a deal they want to put real money behind, they invite some smaller guys in as a sort of barter chip which says “I give you a piece of my deal, and you give me an early heads up on which of your deals are breaking out.”

3)      They perceive some unique value, domain expertise, or relationships unique to the angels/seed guys they let in that will increase the value of the asset they have just invested in.  Example: Big VC commits $2M to a mobile payment company, the former CEO of Paypal is an angel investor, it’s worth giving up a piece of my deal to have his expertise and relationships behind my new investment.

4)      5 networks are better than one.  No matter how good a VC is, no fund’s network is complete.  Expanding the number of networks a founder can tap, assuming the angels or seed investors will be active, can only help.

5)      The founder/entrepreneur sees the value in #’s 3 and 4 and requests/demands the carve out.

My guess is that it’s probably a combination of all of these, but regardless of the reason, I think it’s a positive trend in the fundraising landscape for all parties involved…always nice to see a market evolve the way it should.

Anyone see downsides to this trend or other potential causes?

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5 Reasons Founders Hate the Question “So What Do You Do?”

Posted on February 16, 2010. Filed under: startups, venture capital | Tags: , , , |

I was at dinner last night with my family, my cousin (who is a PhD biologist), and a friend who is building a very cool tech startup here in New York.  My cousin asked my friend what he did, and the response was as follows: “I have a startup in the advertising market.”  Obviously this response told my cousin absolutely nothing, and so my cousin began to “pry” a bit… “can you tell me what the model is, how does it work?” Again, said entrepreneur sort of deflected the question: “I help take an offline process in the advertising market online.”

Watching that interaction, I realized something that I have found to be true in my entrepreneurial endeavors: founders don’t like talking about their companies with what Chris Dixon would call “normals” (non-startup/tech types).  If I think about why this is, a few possibilities come to mind:

1) We assume that an audience of non-startup types (in this case a biologist, a psychologist, a real estate guy, and a fashion guy) doesn’t have the context around our market to appreciate the “coolness” of what we’re doing.

2) Because of 1, we’re faced with this choice of the elevator pitch which tends to draw a bunch of shoulder shrugs and “sounds cool(s).”  Or a half an hour explanation of the supply chain in our market and where we fit into it.  We assume nobody wants to hear about our work for 30 minutes (there are more interesting conversations to be had).

  1. The problem with this assumption, is that “normals” are actually fascinated by the idea of a startup and entrepreneurship (it’s a dream that many, many people have), so when a founder chooses not to engage in this conversation, it can come across as rude or aloof

3) Especially with early stage startups, there is no brand equity attached to our companies.  When meeting for the first time, people typically want to come across as being successful or impressive (basic human need)…this is easy to do when you have a brand like Goldman Sachs behind you…all you have to say is “I work at Goldman Sachs” and you have satisfied this human desire to be perceived as successful…Even if Philip Kaplan says “I work at Blippy,” which in our community would satisfy this need, in a room full of “normals,” this statement requires some qualification.

  1. The level of qualification required then depends on how much shared context exists between the “normals” and the founder.  Obviously a founder focused on building optical networking infrastructure is going to need more qualification than a founder building “an ebay for food,” and it is in this volume of qualification that we start to become a bit self-conscious.

4) Founders spend an inordinate amount of time every day thinking about, talking about, and really pitching our companies to investors/partners/customers/etc… Sometimes at the end of a long day, the last thing we want to do in our “socializing time” is run through another pitch.

5) Founders end up having extremely similar conversations over a period of time.  People tend to respond to startup ideas in 3-4 distinct ways…and once you talk to 500 people about what you’re doing, 80% of conversations about your company fall into one of those 3-4.  When focused so singularly on one subject, founders have an outsized appreciation for new conversations and stimulus…

What I have learned is that it is important not to assume a “normal’s” level of interest or context around your project.  If you really don’t feel like getting into it with someone new, extend an invitation to talk about it in the future: “I run a startup in the ad space…it’s a longer conversation, but if you are really interested, we can get into it later.”  Now, if someone you meet wants the 30 minute version, they’ll remind you later, and you can go from there.  My advice to founders is go the extra mile to evangelize your company to anyone who is willing to listen…it makes you better at selling your product and every person you talk to has the potential to provide unique insight into what you’re doing.

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35 Gut Checks When Founding Your First Company

Posted on January 31, 2010. Filed under: startups, venture capital | Tags: , , , |

If you are thinking about founding your first company, standing at the edge of the entrepreneurial swimming pool, trying to decide if you should dive in, here is a checklist (sort of a Meyers Brigg for founders) to help you figure out if this life is for you. It is based on my observations of the thousands of entrepreneurs who I have gotten to know over the past 4 years.  I would say, if you’re answer is “No” to more than 10 of these statements, think very carefully about making the jump.  There is no science or data to support this checklist.  Strictly my own observations of what is required to enjoy and excel in this experience.

1)      I tend to thrive in an unstructured environment

2)      I am capable of teaching myself almost anything I want to learn

3)      I do not need positive reinforcement from others in order to be happy/effective

4)      I am primarily competing against myself

5)      I am completely self-motivated

6)      More often then not I get what I want

7)      Money is not the primary metric by which I measure my professional success/progress

8)      I am comfortable living a life that most of my friends and family will not understand or be able to relate to

9)      I am a fantastic listener

10)  I seek out help at the first sign that I need it

11)  Work is by far and away my greatest passion

12)  I handle disappointment well

13)  I have more energy than most people

14)  I love to win and hate to lose.

15)  The concept of “the path” revolts me

16)  I am above no task or role

17)  I have friends and family who will support me even if I do not give them as much attention as I should

18)  I have no fear of running out of money

19)  The word “can’t” is not in my vocabulary.  There are things that are extremely difficult to achieve, but nothing is impossible

20)  Pressure does not derail me

21)  I am not intimidated by anyone

22)  I enjoy solving hard problems

23)  I do not frustrate easily

24)  I exercise regularly

25)  I fundamentally believe in myself

26)  I am highly experimental

27)  I am a doer, not a manager of doers

28)  Laziness and complacency disgusts me

29)  I am an excellent judge of character and talent

30)  I am rarely tricked.  It is very difficult to deceive me.

31)  I have an extremely low tolerance for incompetence

32)  I have an extremely accurate perception of my strengths and weaknesses

33)  I am not too proud to admit what I don’t know

34)  Everyday accomplishments bore me.

35)  I am going to change the world

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Charles Darwin Would Have Loved the Mobile Internet

Posted on January 27, 2010. Filed under: startups, venture capital | Tags: , , , , |

Lately I’ve been thinking a lot about the human population as a system.  I’m assuming there is a large body of work and thought that has been devoted to this subject matter.  I have read none of it.  I tend to subscribe to the concept that our species is acting as a whole, and from an evolutionary perspective, most of the changes/advances that we are experiencing are the result of our mental (as opposed to physical) capacity.  So instead of growing a longer beak to adapt to secure food in a changing environmental context, we are genetically engineering corn to secure food in a changing environmental context.

With that in mind, I can see no greater step function in the advancement of our species than the rise of an information architecture that enables seamless transference and sharing of learnings between individuals and groups within our broader 7 billion person population.  I’ve been thinking a lot about how the existence of this central data infrastructure is impacting our individual experiences and contributions to the system as a whole, and at the simplest level I’m arriving at the subject of decision making.

I’ve asked a bunch of people to estimate the number of decisions that a human makes in a day, and the responses have ranged from 100 to 1 Billion.  I’ve googled this question and can’t find a generally accepted answer, largely because it hinges on one’s definition of a decision.  These conversations quickly arrive at the question of conscious vs. unconscious “decisions,” and for the purpose of this discussion, let’s say that a decision requires conscious thought.  Even by this definition, life looks a lot like one giant decision tree, and by that thinking, the optimization of decision making is an optimization of human life (and if the species is a system made up of 7 billion human lives, the optimization of individual decision is an optimization or evolutionary advance that will sustain our species)…I think

So I would argue that the development of a central information system shared by all humans within our system has fundamentally changed the way we make decisions…It used to be that there were two fundamental inputs into the decision of an individual: 1) that individuals prior/internal past experience and knowledge, and 2) the data readily available in his/her physical environment.  So a caveman is deciding where to hunt for food: he 1) references his past experience of where the animals tend to hang out, knows he needs to find a watering hole, etc… and then 2) surveys his physical environment for data to inform his decision.  The data readily available in our physical environment is absorbed through our senses, and manifests itself primarily in audio/visual/olfactory inputs.  So after referencing his internal experience/context he looks for animal tracks (visual data), listens for calls or rustling in the bushes (audio data), and smells for scents and their relationship to the direction of the wind (olfactory data).  The combination of these physical data sources and step 1 leads him to a decision to walk North.

Now let’s take the Cave man’s experience in 2010.  Same goal: find a place to hunt…what’s his process for decision making?  He still engages in step 1, and references his past experience and knowledge, still engages in 2 and take in the data readily available in his physical environment…but all of the sudden there is a 3rd readily available data source on which he can rely to find the animals.  The mobile device in his hand is a gateway into a shared information system in which he can reference the real time experience and learnings of the other hunters in the area.  He read’s his twitter feed, and see the Caveman 2 just killed a zebra 700 yards west of him, references his internal experience to know that zebras move in packs, and now he is in a position to make a better (optimized) decision on what direction to walk.  Blow this experience back up to the system level, and now our species is more efficient in securing food and sustaining itself.

So now, there are two types of data ingestion that impact the optimization of our decision making processes and our lives: 1) a “pull” scenario like the caveman and the zebra, where we are actively seeking a piece of information to influence an immediate decision (the most clear example of the information architectures impact on our decisions), and 2) the “ambient data ingestion” scenario, where in the absence of a data requirement for a specific decision at hand, we are pulling on data with our excess bandwidth at any given moment (we can process something like 126 bits per second) that while not applicable to an immediate decision, is applicable to future decision within our day/week/month…An example being, I have a minute that I am waiting for the subway, I may be consuming less data in my physical environment than I am capable of, and I decide to read my blog reader.  I ingest textual data in the form of a restaurant review, and when I get home an hour later, and it is time to make the decision of where to eat, I am better equipped to do so (with that piece of data pulled from the central and shared database).  So the presence of a central data source is optimizing present and future decisions.

I think subconsciously, it is the availability of this data and it’s impact on the decisions in our life that is driving the “addiction” to mobile devices, and to a lesser extent the internet at a whole.  Watching for that red light on your blackberry, waiting for the next email, is not necessarily a human waiting for an answer, but maybe just a human looking for a new piece of data, and a new decision to address.  Which brings me to a broader question of the effect of this central database on the volume of conscious decisions we make in a day (my guess is it has increased that number), and more broadly the effect of an increased volume of decisions in the system on the output of our species as a whole…

anyone have any good reading on this stuff (ideally articles, not books)?

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    I’m a NYC based entrepreneur. I think there is one metric that can be used to measure the value of a human life and that’s impact. How did you change things? How many people did you touch? How different is the world because you lived in it and how positive was the change that you affected? (p.s. i don’t use spell check…deal with it) You can email me at Jordan.Cooper@gmail.com

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