By Joseph Flaherty, Director of Content & Community
How many $100M+ startups are just waiting to be founded? Cameo, the celebrity selfie service, just announced a monster $100M+ GMV for 2020. It’s an impressive number, but it makes you wonder why now? Why not 2015? Or even in 1995? How early could Cameo have been started?
Theoretically, this type of service could have existed before the internet, and indeed it did. The social primitive is fan conventions, where b-list celebs would take photos with fans for a fee. But coordination problems limited scale, and lack of internet vitiated virality.
A mail-order version of Cameo could have existed in the pre-internet era — pick a celeb from a catalog, Fill out a form, send a check, and 8–12 weeks later, you’d get a VHS tape. Acquisition and logistics would have hurt margins, but it was theoretically possible. …
By Micah Rosenbloom, Managing Partner
We recently hosted a workshop where our portfolio founders had an opportunity to spend time refining their brands with JB Osborne and Marni Kane from legendary creative firm Red Antler.
Here are some of the insights we gleaned from the session:
“Branding is an exercise in prioritization” was the most common piece of feedback shared with our portfolio. The Red Antler team fashioned a great heuristic to aid in this process — “If your baby can fly, lead with that!”
The point is to focus on what you do better than anyone else. The one thing that your customers would *love* about your product. In short, a single differentiated message is better than half a dozen banal brand promises. …
By Joseph Flaherty, Director of Content & Community
💻 We’re 40+ years into the PC revolution
🕸️ Web 2.0 is old enough to drive
📱 Smartphones are over a decade old
If a market is still inefficient, it’s probably *not* just because no one has thought to fix it with technology yet.
Before embarking on a journey that may consume years of your life, it’s a worthy exercise to ask *why* something hasn’t been done yet, or if several startups have tried, why it hasn’t worked to date?
“Chesterton’s Fence” is a principle that you shouldn’t start making changes to something until you understand the decision-making process that led to it. Practically, don’t remove a fence until you know why it was built in the first place. …
By David Frankel, Managing Partner
Imagine you are seated next to the CEO of your dream customer for dinner. Over the course of the evening, you’ll likely have 20 minutes to chat with this person about your startup. How do you make the most of this scenario (Or its socially-distanced simulation?)
A perk of raising from VCs is that investors often host dinners, office hours, and convene groups of high-level decision-makers. You’ll likely have opportunities to meet C-level execs in your industry earlier than the state of your business might dictate.
These are the closest thing you’ll find to cheat codes in the business world. An email from the CEO to a VP or director in her organization, endorsing your startup, however slightly, is a powerful door-opener. …
By David Frankel, Managing Partner
Working with a board of directors is one of the key challenges facing founders. While tech has an egalitarian mien, there are material power imbalances and they can cause tremendous stress for founders. Some thoughts on how to manage those concerns:
There’s a belief that VCs are keen to replace founders at the first misstep. Nothing could be further from the truth. The reality is that you are more likely to be replaced if your startup *succeeds* than if it struggles.
At the early stage, investors know that firing a CEO is likely to kill the company. Practically speaking, it’s also very hard to find talented outside CEOs who are keen to take over an unprofitable business with an uncertain future. …
By Joseph Flaherty, Director of Content & Community
Many founders seem to think VCs are purely rational beings who can be convinced to invest if the right logical arguments are made and the correct fact sets are assembled. The reality is that most VCs are more Epicurean than Aristotelian — especially at the early stage.
I have the honor of reviewing a lot of Series A decks and it’s shocking how often the actual product the company sells isn’t shown until halfway through the pitch. Strategy, team, sales, etc., are all important. However, remember that VCs are consumers too.
🚗 Would you buy a sports car based entirely on its 0–60 time? …
By David Frankel, Managing Partner
Granting options to your employees is a wonderful perk of being a startup CEO. It’s a rare thing to be able to offer an employee a potentially life-changing sum of money! But in order to get options approved you need to work with your board.
Here is how to do it right.
Discussions around options shouldn’t be confusing, but they can easily become so if the spadework isn’t done ahead of time. At the early stages, there is no reason for this process not to be crystal clear.
There are plenty of times where you’ll need to activate a sense of urgency among your investors. Getting stock options approved should never be one. It’s a sure way to signal to your VC’s that things aren’t running smoothly. …
By Micah Rosenbloom, Managing Partner
Entrepreneurs are often so fixated on “getting to yes” with a VC — and will go to great lengths to answer any question posed to do so — that they forget to ask the VC any questions.
Here are 12 questions that founders should ask potential investors more frequently:
You want to start your process by finding a lead investor. If a given fund doesn’t lead deals, keep talking to them, but prioritize finding a partner who will. Many processes die because founders can’t find a lead funder.
I can’t stress this enough. It’s easy to find a dozen firms that want to fill out a round, but most will want someone else to lead first. A lot of founders will get 3+ meetings into a process before discovering this fact — a HUGE waste of time. …
By David Frankel, Managing Partner
The range of fundable startup ideas has expanded over the last decade to encompass everything from Slack to slacks. Now, the challenge is separating interesting, but niche markets, from those that are weird and wonderfully profitable.
A few thoughts on an imperfect science:
We’re open to entertaining the most fantastical sounding markets if the founders employ a vanilla commercial strategy. We’re not looking for conservative approaches, just paths to market that don’t require massive leaps of faith.
We’ve luckily backed everything from aquaculture to zoological testing and while we cover a lot of unique markets there is a common thread: commercially-minded founders obsessed with monetizable customer use cases. …
By Eric Paley, Managing Partner
🤖 Product-first companies are inspired by a breakthrough in technology or UX.
Awesome!
📈 Market-first startups are built in response to glaring inefficiencies.
Awesome!
🤑 Capital-first startups are catalyzed around access to capital.
Beware!
Capital-first startups start with a hazy sense of a problem, a rough idea about how a product could solve it, and a crystal clear conception of why they should raise maximum money, now, and at the highest possible valuation.
Spotting these startups is easy:
🏀 They build teams before they’ve tested a hypothesis
🏙️ Space is leased before wireframes are crafted
📜 Press releases are issued before customer personas are fully…
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