tag:chadbyers.com,2013:/posts Chad Byers 2016-11-22T07:18:43Z Chad Byers tag:chadbyers.com,2013:Post/696960 2015-01-13T18:40:05Z 2015-01-16T05:44:13Z VCs can make great LPs

I have noticed a growing trend with new seed stage venture funds - their Limited Partners (their investors) tend to be, in part, other VCs. 

At Susa Ventures, we are no exception. We have some great LPs that are later stage VCs. 

This makes sense for so many reasons, but until starting Susa, I never thought about how great this can be for the entire value chain. 

- They understand VC. The good, the bad the ugly. You can skip the generic stuff during your fundraising pitch, and once they fund you, they are some of the most helpful LPs. They can send deals, share trends, make introductions, and more.

- The fund's portfolio companies can gain access to these LPs for follow on funding, and likewise, these later stage VCs get and eye into an early stage portfolio in hopes of funding a couple of them.

Although I am a huge fan of this, you have to be careful to manage expectations and conflicts of interest. As long as the later stage VC knows that you will make decisions first and foremost on behalf of your companies, I think you can avoid problems. 



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tag:chadbyers.com,2013:Post/696956 2015-01-12T19:22:45Z 2015-01-12T19:23:48Z Sales best practices for non-sales people

Everyone should work in sales at some point in his or her career. It doesn't matter what you sell. Knives, office supplies, paint, phones, software, whatever - it really doesn't matter. Sales jobs teach you valuable lessons. 

Everyone in a company, regardless of role, is a sales person in one form or another. Sure, sales people actually sell the product, but CEOs sell investors on the vision, CTOs sell the CEO and board on technical direction, engineers sell their managers on realistic milestones and expectations, HR sells the CEO on new perks they want to provide to attract better talent, etc. 

Click here to tweet this, you can edit before posting: http://ctt.ec/96QdV

I have worked in both sales and marketing roles for a number of years, first at Silver Spring Networks, and then at Integrate. I learned many valuable lessons both in direct selling as well as managing a sales team. 

But because not everyone gets the opportunity to work in sales, here are three best practices I learned that I think can benefit anyone in an organization:

1. Know your customer. Since everyone is really in some form of sales, then everyone has a customer. Know your customer. Personality, likes, dislikes, what motivates them, what problems they have, etc. The most effective sales people sell to people, they don't just talk about the product. They sell to the customers' wants, problems, and aspirations. For example, if you are a developer looking for more responsibility, don't sell your VP of Engineering on the fact you have free time to work on more stuff; instead, know exactly what makes your VP of Engineering nervous about the next build and sell him on why you are the best person to work on that. Know your customer. 

2. Business people are people, too. Sometimes we forget that behind that business title, there is a person who has interests, worries, a family, stresses, insecurities, etc. It's always important to build a personal and human relationship with people before you ever try to get something from them, sell them something, or work with them. It doesn't mean you have to get to know them for a year, but trying to connect with people on a human level never hurts. Also, just like our significant others and moms, business people like knowing you care and think about them. Send them an article you think they might like, a card, etc. 

3. Sell them oxygen, not aspirin. Oxygen is something you can't live without; aspirin just masks the pain, but doesn't fix the core problem. For example, if you are selling enterprise CRM software, it would ineffective to pitch it as 'this software will make sure you build stronger relationships'. Perhaps a more effective way to pitch it would be 'this software will increase revenue, help you grow faster than your competition, and become profitable/hit your earnings targets'. Said another way, sell why you do what you do, not what you do. What you do might be relationship management software, but why you do it is to help businesses utilize the tools to grow revenue and become more efficient. 


*As always, please subscribe on the left to receive these posts in your inbox*


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tag:chadbyers.com,2013:Post/793860 2015-01-09T17:51:26Z 2015-01-09T17:51:27Z Funding University Research

Yesterday I tweeted this: 

The productization of university research is fascinating. Would be cool to see a list of all of them that raise VC: http://techcrunch.com/2015/01/08/machine-learning-startup-graphlab-gets-a-new-name-and-an-18-5m-check/ …

I googled around yesterday and couldn't find anything. If anyone can point me to one, that would be great. Or maybe we need to put it together. 

The best example I can think of is Google. Larry and Sergey began developing a search engine called BackRub in 1996 that ran on Stanford servers. They would later rename it to Google. They were both doing research in Computer Science. 

If you can think of others, feel free to leave them in the comments. 

As a VC, I think there is opportunity here. I used to hear that VCs in the early days (70-90s) used to crawl universities searching for new technologies. I don't know if this is true, but I think there was a greater % of new tech coming from universities at that time than there is now. Because computer science was new back then, universities, such as Michigan were some of the first to really make progress in this new world. Fast forward to today, and building SW is cheap and easy. Everyone can do it.

I for one have spent little time mining university research for potential spinouts. Perhaps I should spent a little time thinking about what that would look like. Everyone complains the Valley is no longer creating 'real' tech, maybe they are just looking in the wrong places. 

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tag:chadbyers.com,2013:Post/709629 2014-07-01T18:11:21Z 2016-11-22T07:18:43Z Announcing Susa Ventures

June 30, 2014

Note: * Denotes Susa portfolio company

We are excited to officially announce the launch of Susa Ventures, a $25 million seed fund that invests in data-centric founders and businesses.  We started Susa as four friends with the shared belief that despite the hype, the multitude of companies being formed, and the hilarious acronyms, the data revolution is underappreciated.  We have barely scratched the surface of how a focus on leveraging data to make critical business decisions, automate processes, and inform new product creation will disrupt incumbents and create new industries.

Companies with a maniacal focus on data have become the breakout stars by amassing a moat of increasingly voluminous and complex assets.  Examples range from companies like Twitter, which evolved from a communication tool to being the dominant keeper of the world’s most valuable real-time social data, to Waze, with crowdsourced maps, directions, traffic, and incident reports.  Whether generated by machines or humans, companies like Climate Corp and Quora have shown that their ability to aggregate, analyze, and deliver actionable insights yield increased defensibility and significant competitive advantages.

In Health, there is immense value in combining existing data (claims, EMR, genomics, gov’t, trials) with new sources (sensors, mobile, social feeds) to enable better diagnostics, decision support, precision, and preventative medicine -- both at the individual and population level.  Data-centric companies like Flatiron HealthZephyr Health*, and SolveBiothat have set out from the start to create one or more connectable repositories of critical and relevant information (i.e. data on people, lifestyle, drugs, procedures, microbes) that will help us much more rapidly discover treatments, cure diseases, and extend life.

In Banking and Finance, sophisticated machine learning models applied to vast data sources (e.g. social, purchase histories, events, biometrics) are making it possible for young companies like LendUp*, Addepar, and Wealthfront to break down current monopolies like FICO, Fidelity, and First Data to reinvent everything from credit scoring and ID verification to fraud detection.  Startups like Standard Treasury* are helping traditional banks move money and data more efficiently through APIs and digital gateways, while companies like Robinhood* are eliminating friction from equity investing.

In Education, there will be vast improvements in K-12, higher ed, and adult learning.  Overall access to global coursework is improving rapidly via the efforts of 2UUdemy, and Code Academy.  Additionally, Panorama Educationand Clever are making all the data produced by parents, teachers, schools, and students more digestible and usable, enabling easier analytics for a variety of critical use cases.  On the other end, Declara* is helping adults in the workforce perform their jobs more effectively by connecting them to the right content and people on a collaborative platform.

These are just a few illustrative examples across a handful of industries.  Everything from legal to manufacturing to commerce will undergo a step function improvement by collecting, analyzing, and applying data in smart ways.  We hope we can help many of these companies jumpstart their vision to become the market leaders in their respective fields.  Check out our portfolio here, with a few stealth companies still to be launched.  

While there is a proliferation of seed funds of late, Susa Ventures is different in a few critical ways: a) we’re the only $25M seed fund with four operating partners - giving us the ability and capacity to really work with founders in a meaningful way, b) all four partners have either been founders or operators, and bring complementary skills and expertise in areas ranging from product marketing to software engineering to customer acquisition, c) our team consists of both male and female partners, and d) we cover three major geographies - Bay Area, LA, NY.  We feel these differences are our core strengths, enabling us to create a fund that is truly founder friendly in all the ways that matter.

Lastly, a big thank you to our incredible group of LPs for joining us in this journey -- we would not be able to do what we love without them.

If you share our enthusiasm for data, please contact us!

Warmest, Eva/Chad/Leo/Seth

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tag:chadbyers.com,2013:Post/704609 2014-06-17T13:59:05Z 2014-06-17T14:22:29Z SongHunt

When I saw this I got so excited. We all know that music discovery is a pain. Everyone has their own homegrown strategies. It feels like note taking in that sense. Everyone uses a different process - smashed together apps, manual processes, etc. 

The major music platforms launched 'radio' features, which is just okay. Many others swear by Hypem which is better, but still just okay. 

But this idea of SongHunt, a 'ProductHunt for songs', a daily leaderboard of the best songs got me so excited for a couple of reasons. 

1. Its daily - It would be different everyday. The 'radio' feature on most music platforms will begin to repeat pretty quickly, and will even play similar playlists if you play the same station. 

2. Community driven - I tend to trust highly curated communities more than recommendation engines. If you curated the community in the right way, a la how Ryan has curated the PH community, you would truly get great content. 

3. Diversity - music, even more so than products, comes in more flavors. Music discover is all about exploring the different types, sounds, genres, cultural roots, etc. 

I can't wait for people to tackle this. My friend Jeff and I might take a crack. 

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tag:chadbyers.com,2013:Post/704225 2014-06-16T14:39:53Z 2014-06-16T14:39:54Z Data Science for Social Good

The technology sector can be a rather insular and homogenous establishment. Your success, failures, impact and legacy are always compared in a relative fashion to the other apps, founders, and investors. 

That's why when I read this article about Data Science for Social Good I got really excited. For all the crap the technology sector gets for cranking out 'yet another photo sharing app', we produce exponentially more meaningful technology that never gets the attention it deserves. At Susa Ventures, we tend to look at data intensive businesses and founders. The technologies that we see everyday are amazing, and usually include some form of data science, machine learning, and or NLP.

I've always wondered what it would look like if we pointed some of that tech directly at social good issues that were not constrained or burdened by the need to build a company or make a profit. This program is the answer to my curiosity. 

Although I am a passionate capitalist at heart, and often feel that for profit entities are a better way to solve problems than non-profits, I am all for experimenting with what I would call 'technical non-profits'. 

I suspect the output of this organization will be orders of magnitude larger than its counterparts. 

I hope Data Science for Social Good changes my, and many others', perspective of what a non-profit can look like and the impact they can have. 


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tag:chadbyers.com,2013:Post/699556 2014-06-03T15:17:53Z 2014-06-07T19:27:44Z Verticalization of Pinterest, Reddit, Facebook

Inventing new UIs and UXs on the internet is hard. 

But every once in a while, companies develop and entirely new experience that immediately captures the love of users. The facebook news feed, the leaderboards of Reddit, or the pin board layout of Pinterest are all great examples. As I read this post yesterday, about Houzz raising a massive round, I couldn't help but think it looked similar to Pinterest, which also raised a massive round of it's own not so long ago, however both companies took very different approaches to the unicorn club

Houzz feels like a vertically focused Pinterst board with some tools to help you act on your inspiration. That's it. Pretty simple. But pretty powerful. 

What's amazing is that Houzz raised at a valuation that is almost half of what Pinterest raised at. Pretty incredible to think that they peeled off a single vertical, really nailed it, and built a very large business in a short amount of time. 

It's a great reminder that you can build incredible value with a vertical play.

I think part the reason why vertical plays can be valuable is that you can build specific tools tailored to that vertical. For example, it's easier to build a lead generation funnel on a single vertical than a lead generation funnel for everything that on Pinterest. Furthermore, I think a single vertical has a better chance of building a really strong community. 

I think Hacker News and Product Hunt were great examples of vertically focused r/reddits. Furthermore, there are many companies that have copied Pinterest for a specific verticals, and don't even get me started on the number of sites that have been inspired by the newsfeed for sports, politics, etc. 

For me, the important take away is not to discount vertically focused companies or ideas. Often times, really knowledgable founders, such as those from Houzz, Product Hunt or Hacker News, see an opportunity in a very large and neglected market and can build a great business with tools specifically tailored to that industry. 



*reminder, you can subscribe to get these posts in your inbox. you can do this over on the left.*

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tag:chadbyers.com,2013:Post/696659 2014-05-27T15:10:10Z 2014-07-09T21:03:25Z Something that should exist: smart phone-enabled sports lockers at public gyms, parks, fields and courts

I wrote a great tweet yesterday that no one commented on. So naturally, I am going to blog about it. 

"If it's a great idea, and no one wants to listen, keep telling people until they listen." -me

I live in NYC. Like most New Yorkers, I love exploring everything this city has to offer. One of the very best things is the public space - the gyms, parks, fields and courts.

But buying and carrying around a basketball, tennis racket, soccer ball, or bocce ball set can be a burden. Just like the Citi Bike ride sharing program, I want a 'play sharing' program for all the things that make public spaces so much fun. 

I think the city would be willing to sponsor this, or at least put a grant toward it. It would help maximize the utilization of the public spaces. Never again would I have to see a sad tennis court on West Side Highway go unused, or a basketball court on Canal go untouched just because the great citizens of NYC can't find a ball. 

So what would this look like? One possibility:

Imagine a BLE-enabled locker that can be opened by a smart phone. Each item inside (balls, rackets, frisbee, etc) have a RFID tags so you know exactly what was removed when opened or put back in. Users would create an account and add a credit card. They could walk up to any of these lockers at fields, courts, parks, or gyms and rent a item for $5/hour or whatever. Then just return it when they are done. 

Most of this technology exists, and I have seen the RFID stuff work for other applications, namely for inventory tracking. The lid could be controlled in a similar way to some of the new smart bike locks or even Citi Bike. This is doable. 

I think this would be awesome. If you think this would be awesome too, hit me up and we can build it. 

Here is a really accurate and colorful drawing of what it could look like: 


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tag:chadbyers.com,2013:Post/695564 2014-05-23T23:48:58Z 2014-05-23T23:48:59Z VCs should be more like Elon Musk

My friend Joe recently posted this story to facebook. 

It reminded me about all the other crazy stories I have heard and read about Elon Musk. From funding his own crazy ideas to get them through tough times, to attempting to build the first private space transportation company (SpaceX), to reimagining transportation (Tesla) and renewable energy (SolarCity). Elon has always made bold bets. 

As I think more and more about the best VCs, they too have always made bold, often crazy looking bets. Unicorns usually don't start off looking as magical as they end up. Early investors in Google looked crazy. At the time, Google had no business model, inexperienced founders, and were playing in a very crowded market. The examples are endless. 

At Susa, I want to make sure we are thinking big enough. Making bets that may look questionable at the time, but have the potential to be category creators or winners. 

I think the same kinds of people that make great founders, make great investors. And the inverse seems to be true as well. Just look at founding partners of A16Z, Khosla, Sequoia, etc. There are obviously exceptions, but people who see the world differently tend to make the biggest splash. 


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tag:chadbyers.com,2013:Post/695127 2014-05-23T02:48:59Z 2015-01-10T04:17:46Z On Demand Everything - what comes next?

Steve Schlafman from RRE put together a great presentation called On Demand Everything. If you haven't checked it out, do it. I always appreciate when people share their great research. It's how we all move this thing forward. 

I have reviewed his presentation a number of times. At Susa Ventures, we see a ton of companies building on demand services, and his presentation is always a great starting point when thinking about how a new business fits into the space. The key enabler to the on demand economy is the mobile phone. 

Smart phones are relatively new. Although it seems like we have had them for decades, remember that the iPhone came out in 2007. Apps in the early days primarily just delivered content for this new platform; however as smart phone penetration reached a critical mass, building on demand services became viable. We are now at a point, where essentially overnight, a company can build a product and enable millions of people to book a car (Uber), book a cleaning (Homejoy), order some food (doordash), or get groceries delivered (Instacart). 

While I think we are still in the early days of imagining and re-imagining what services can be changed with the advent of mobile, it's fun to look a step beyond that.

As a consumer, I am already starting to get lost in all the app choices. In the food delivery category alone, you can choose between doordash, munchery, zesty, spoonrocket, fresh direct, sprig, seamless, grubhub, etc. Add in the growing choices in home cleaning, dry cleaning, and grocery delivery and you start to get a bit overwhelmed. 

I think there is a need for a 'service layer' for the on demand economy. Alfred is a great example of a company that can sit above all these great services and provide a unified customer experience, especially for more repeatable and recurring services.

There is a ton of value to capture if you can pull that off. The company that does will understand the customer better than anyone. What they eat, what they wear, how often they travel, etc. But it won't be easy. 

Just last week, Uber went after 'supply side platform' Breeze. Although slightly different, it's a good example of the big on demand players wanting to own/collapse the entire value chain (as Steve writes in his presentation), and control the user experience end to end, including who is providing their service to customers. 

I look forward to tracking this space and watching the emergence of the on demand economy's 'service layer'. Thanks Steve for starting the conversation. 


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tag:chadbyers.com,2013:Post/694518 2014-05-21T22:49:10Z 2014-05-23T15:16:27Z Product Hunt

If you haven't checked out Product Hunt, I highly recommend you venture over to their corner of the internet. 

Product Hunt is a dead simple way to discover new products (mostly digital products). That's literally it...for now. 

As a VC, the value of Product Hunt is obvious. It's a window into new product and technologies, ideally before they scale. I don't even need them to keep building new stuff and I will use it for years to come. But the team over at PH is hungry. And they tweet a lot, which pretty much means they are up to no good. There is something brewing over there.

So what are they building and what comes next? 

Here are a couple things I would love as the product evolves:

1. A product feed - the idea of a 'feed' dominates the most popular consumer products. Facebook pioneered this with the news feed, and others such as Twitter, LinkedIn, and even newcomers like Secret have followed suit. It's used by literally thousands of products today. Although they would have to break away from the current model of a voted list everyday (which I do very much enjoy), I think a product feed would be freaking awesome. (the PH twitter feed gives you a taste for this and it's amazing)

2. Product store - much like Birchbox sends out samples in a box but then users come back to buy the full size item, I think PH is well positioned to be a great storefront for products that they have covered. Perhaps it will look like FindTheBest for products. The data they collect about the products and user feedback won't hurt either!

3. Organic product launches - Most of the products on PH are added by the community, but I see that shifting to more and more founders as it becomes more popular. Launching a product is painful. Talking to reporters, herding media outlets, blogs, blah, etc. PH is a great way to organically launch a product and get real users feedback almost immediately. I love trying stuff out far more than reading a journalists spoon fed story. Maybe PH will allow a founder to just: tell a authentic story and press submit. Then let others reporters write stories based on the communities feedback around that product. 

4. Beta platform - one of the most valuable assets PH has created is the community. No one has really cracked the nut on helping companies find really passionate users to try new features and products before they launch. Building a way to connect companies with users in the PH community for feedback would be awesome. 

I could go on and on, but what this boils down to is two things: community + data. 

PH's community is extremely valuable. They are early-adopters, eager, smart, passionate, real, authentic and respectful. Pointing this community at any new feature or product that PH creates will be amazing. 

PH's dataset (although small today) will become increasingly more valuable. They created a simple way for users to give them data about new products that are launching, what those products do, and how popular they are. As that dataset grows, the possibilities are limitless. 

I'm excited to watch PH grow and I'm glad there are some great guys behind it. 


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tag:chadbyers.com,2013:Post/693657 2014-05-20T17:07:57Z 2014-05-20T17:33:54Z What is a Special Purpose Vehicle (SPV) and how did SV Angel lead a $200M round in Pinterest?

News broke last week that SV Angel led a massive $200M growth round for Pinterest. For those of you that scratched your heads, you are not alone. 

How did a seed fund lead a growth round many times the size of their entire fund?

People who do early stage private investing do it because they love it, but not necessarily because it's the most lucrative stage or asset class. Given seed fund economics, there is only so much upside when you have a fund of $10M-$40M. This upside is not only capped for the General Partners, but also for the fund's investors, the Limited Partners. So seed VCs have found other ways to make economics better for themselves and their LPs. One of those ways is through Special Purpose Vehicles. (it's worth noting that SPVs are used by other investors at various stages). SPVs are used by seed VCs when the investment they are making falls outside the stage, size, or strategic focus of the core fund. 

Simply put, a SPV is an investment vehicle set up for single, special purpose. Picture a stand alone bank account set up just for a single investment. In this case, SV Angel would have gone to their Limited Partners (family offices, institutions, fund of funds, endowments, etc) and asked if they wanted to invest more money into Pinterest. If so, they would collect their money into a SPV and make the investment via that special entity with it's own governance and terms. 

Although other investor types use SPVs, it suits the seed VC asset class very well for three reasons. 

1. It allows a seed VC to put more $$ to work - in a single investment, SV Angel essentially doubled or even tripled the amount of capital invested this year, creating more upside for them and their LPs

2. Seed VCs often build very strong relationships with management teams because they are involved early. This is the only way and seed VC to pull off a late stage SPV like this. The management team at the company must really trust and value the investor.

3. Seed VC funds are typically much smaller than some of the other funds that their Limited Partners may be involved with (Series A/B VC funds, growth VC funds, PE funds). If the LPs really like what a seed fund manager is doing, they will want to put more money behind them but are often limited by the size of the fund. SPVs are a great way for an LP to put more money to work behind a great seed fund manager that they really believe in. 

I wasn't surprised by the investment, but rather I was surprised by the nature in which is was reported. Very rarely are these deals reported publicly. Twitter, for example, raised a ton of money from SPVs late in its life, but only a tiny bit of that was ever covered publicly, and even then it was only during the S-1 filing and IPO given the hood was lifted on its fundraising history. I suspect that we may see more public disclosure of SPVs, especially as companies are taking longer to IPO, since SPVs are a great way to raise capital from people you already know and trust. 

Kudos to the team at SV Angel. They really are a great firm with a 'founder first' mentality. It's nice to see that paying off. It's a great lesson for all seed VCs that if you work very hard for your founders and portfolio companies then special opportunities like this can pop up. This seems like a win-win-win for Pinterest, SV Angel, and SV Angel's Limited Partners. I hope we at Susa Ventures are lucky enough to be able to do this one day with a great portfolio company and our LPs. 


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tag:chadbyers.com,2013:Post/693276 2014-05-19T19:42:03Z 2014-05-19T20:23:43Z Feature Monday

Foursquare recently split their app in two. It has been covered a number of times. 

I am not here to talk about that, or app constellations, although both are indeed interesting topics. However there is a new little feature that popped up in the new Swarm app they launched that I think is pretty neat. It's called 'Nearby Plans' and I think it's awesome. 

I have always longed for a product to allow me to push my plans out and just let people indicate their interest in joining. Plancast tried this, but it never really took off. I suspect there will be other attempts at this problem too. 

'Pushing' out your plans to friends is a much more efficient model then individually 'pulling' people by emailing, texting or calling given most of the time people are busy. What can sometimes take an hour to plan is solved with a single post. In a way, this isn't too different than posting on facebook that you want to grab dinner, but that always feels out of place and foursquare has a simple advantage in that it easily limits the posts' reach to nearby friendly only. 

I am excited to see if this feature takes off, or maybe just like the 'lists' feature in the old foursquare app (that i used all the time), it will remain a very cool little feature that never really takes off. 

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tag:chadbyers.com,2013:Post/693235 2014-05-19T18:30:34Z 2014-05-19T18:30:34Z Frontback

Frontback is a new photo app that I love. 

There are a ton of photo apps - probably a thousand or more across the various mobile platforms - however very few ever get significant traction. 

Frontback is one of the few that people are flocking to. 

For those not familiar with Frontback, it is an app whereby a user takes one picture with the forward facing camera on a phone, and then one photo with the backward facing camera. It creates a simple, yet powerful image. Two photos can tell a story. 

image

Either one of the photos above is an okay photo, but neither is great. However together, it’s a much better photo. It tells a story: a group of friends on the field before the 49ers game. There is human emotion, context, and feeling that you are at the game with us. 

Most users have multiple photo apps on their phone. In the US, the two most popular are Instagram and Snapchat. I think Frontback will become the third pillar. It fits between these two products. It has the authentic feel of Snapchat, such that it often captures human emotion void of filters and curation, with the openness of Instagram, given that the product revolves around the newsfeed and photos are all shared publicly. It’s a simple yet elegant product. 

It’s the simplicity that gets people to try it, but it’s the authenticity that keep people coming back.

I think it’s up and to the right for this one.

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tag:chadbyers.com,2013:Post/693234 2014-05-19T18:30:22Z 2014-05-19T18:30:23Z You had one job

I really like the ‘you had one job’ meme. There are a number of sites that have them now. The idea being that someone messed something up that was fundamental to the project they were working on. 

image

This happens in technology too. 

Building great products is hard, but sometimes I see something out of companies that should be better than that. Startups can get away with a ton of mistakes, but bigger more established companies are held to a higher standard. 

This is the most recent one I came across from Spotify:

image

Again, building great products is hard, and a music recommendation tool is no exception, but making sure that the outputs are different in a ‘Since you follow X, you might like Y’ feature seems pretty damn basic. That should be one line of code. 

Not sure what happened here, but I did get a pretty good laugh out of this one. I’m sure Spotify will fix this pretty quick. 

*note: I do in fact like parachute. don’t judge me. 

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tag:chadbyers.com,2013:Post/693233 2014-05-19T18:30:02Z 2014-05-19T18:30:02Z Delightful product

Every once in a while, a product truly delights me. Sometimes it’s when i use a new product, but more often it’s when a product gets a little new feature that just nails it.  

This happened the other day when I was flying from NYC to SF. I was searching gmail for my flight confirmation email to check the time and airport. Once I found the email, a little product feature that I have never seen before delighted me.

Here is a screen shot of a bar that was inserted above the confirmation email. 

image

Gmail must have added this recently as I have flown many times in the last couple months and have never seen this. 

This is live flight status information displayed directly into my confirmation email. What a brilliant product/feature. This is why I love Google - they build products that are very relevant but stay out of your way. From their roots in search, they build products that try to give you the information you want at the time you want it, all without being annoying. 

  • Great products are not easy to build. They take great people, great ideas, and great execution. Sometimes people scratch their heads when Google doessomething, but it’s products like this that make us realize we are all just a couple years behind their master plan. 
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tag:chadbyers.com,2013:Post/693232 2014-05-19T18:29:41Z 2014-05-19T18:29:41Z Right Person, Right Place, Right Time...Right Biosignals - The Fourth Dimension in Advertising Could be Deeply Personal

Advertising is one of the oldest industries. From the first paid ad in the French newspaper La Presse, in 1836, to the Don Draper age on Madison Avenue, to today’s giants like Facebook and Google, the holy grail of advertising has always been to understand as much about the consumer as possible, so that your ads can get in front of the right person, at the right place, at the right time. These three dimensions (right person, right place, right time) are no longer sufficient. 

In the early days, getting in front of the right person was hard. Before television, radio and the internet, ads appeared in newspapers and on billboards - formats that reached broad audiences with little room for targeting. As technology evolved, so did advertising. With the introduction of radio and TV, advertisers could target based on channel, segmenting the population to deliver more targeted messaging. For example, delivering beer advertising to male audiences on sports radio and TV channels. 

Although TV still accounts for 50%+ of advertising dollars, the Internet was a transformation for the advertising industry. For the first time ever, not only could we get in front of the right person, but we could do it at the right time. The Internet captured eye balls better than any other medium before. People spent more time online than watching TV, reading the newspaper, or walking by billboards - combined. With eyeballs stuck to the web, and search becoming the entry point for most users, advertisers could target customers further down in the purchase funnel right before they made a purchase decision - the right time . 

Recently, we entered the age of ‘mobile’. Mobile unlocked the ability for advertisers to target at the ‘right place’. Today, not only can we easily target a 20-30 year old female (right person), who is in the process of buying a new pair of shoes (right time), but we target her as she is walking right by a Macy’s or Payless (right place). This ability to target ads across all three dimensions is transforming the industry. 

But there is another wave of innovation that is just starting to emerge - and no, it’s not ‘social’ (I see ‘social’ as helping better inform advertisers to all three dimensions previously covered). In my opinion, the next dimension will be a biological layer - it will be a way of not only targeting the right person, at the right time, and the right place, but it will allow advertisers to target users based on their historical and real-time physical state (such as walking, running or biking) and biological state, using biosignals (such as heart rate, blood pressure and other vitals). By combining these physical and biological signals you could get a new dimension on customers. 

Think about the simple example of Glacier Water being able to target you with a $1 off coupon to a local grocery store given they know you just had an sustained, escalated heart rate over the last 30 min from data coming from a Nike+ Fuel Band, Fitbit or a some new gadget not yet launched. Sure, they could use mobile phone location and gyro data to guess you were running; but, by layering this new dataset advertisers will have a more accurate and complete picture of what the consumer is doing and in the mood for.

Most people will probably push back and say this is too futuristic, too hard or will never be legal - and some of that may be true. There are some large hurdles for this to become a reality, but my bet is that within the next ten years,  physical and biological data collected from the explosion and constantly improving ‘quantified self’ devices (Nike+ Fuel Band, Fitbit, apps) and connected medical devices will be somehow used in advertising.

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tag:chadbyers.com,2013:Post/693231 2014-05-19T18:29:21Z 2014-05-19T18:29:21Z Time to first venture round increasing

Today I read an interesting article about the time it takes angel-backed companies to raise their first venture round, commonly called the series A round. The article, based on Crunchbase data, states that angel-backed companies in 2013 take, on average, 526 days to raise a series A from the date they closed their seed round. This is roughly 90 days longer than the average in 2012, which was 434, so roughly a 3 month difference. Here is the chart. 

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So what does this mean? Well, I think it all boils down to a combination of three things:

1. Series A Crunch - As early as 2011, but particularly over the past year, the phrase ‘series A crunch’ has crept into investors' and journalists' vernacular. Although perhaps overhyped at this point, the problem is real, and there isdata to support it. The series A crunch is the idea that there is a great deal of capital available for seed stage rounds but a relatively small amount of institutional capital available for series A rounds; therefore, many seed-funded companies have a hard time raising series A rounds and eventually run out of money. Because of this, many investors, including our team at Susa Ventures, advise startups to take larger than normal seed rounds in order to increase ‘runway’. Runway is the time (often expressed in months) a startup can operate before needing more capital. By doing this, they give themselves more flexibility and insurance just in case it proves difficult to raise the series A round. So, investors’ advice plays a role in the data above. 

2. More Seed Capital Available - Related to the point above, there is a record breaking amount of seed capital available today. This increases the demand for seed rounds. In past years, a $1M target seed round might only get $1M of interest, but today, it is common for seed rounds to get oversubscribed ($ total committed exceeds what the company wants to raise). What ends up happening is that founders increase the size of the round, to $1.5M for example, thereby extending the runway of the company. When startups have a long period of runway, they typically won’t raise additional capital as quickly, hoping to get further along, and give away less of the company in the next round of financing. So, the ballooning angel investing market plays a role in the above data. 

3. Developer Productivity/Lower Development Costs - Developer productivity has increased 10X in the last 10 years with the introduction of tools such asGitHubAWSStackOverflowParse, among many others. Couple this with the fact that we have more ‘platforms’ today than ever before - mobile platforms such as Android and iOS, data platforms such as Factual, and social platforms such as Facebook or LinkedIn - on which developers can build low cost applications. All this leads to the fact that it is cheaper today than ever to build a company, specifically software based companies. This proliferation of tools, platforms and APIs enabled companies to build and iterate with only seed capital for much longer, theoretically extending the time between the seed and series A rounds. So, increased developer productivity and decreased development costs plays a role in the data above.

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tag:chadbyers.com,2013:Post/693230 2014-05-19T18:28:45Z 2014-05-19T18:28:46Z The four pillars of venture capital

Venture Capital is an interesting business. My friends ask me questions like ‘what is VC’, ‘what do VCs do all day’, so I set out to simplify VC into its core elements. 

VC in an interesting mix of PR, company building, finance, legal, fundraising, investor management, operations, marketing, people management, human relations, etc. 

However everything boils down to four core pillars, and it should be noted, that they are interrelated: 

1. Deal Flow - deal flow is the most important aspect of venture capital. It can be thought of as everything that goes into the top of the investment funnel. If you don’t fill the top of the funnel with great deals, you have no chance of investing in great companies - you are only as good as the deals you see. Although many things go into getting great deal flow, the very best way is by building a great reputation among entrepreneurs you have worked with. VCs such as USVFRC and IA Ventures have done a great job at this in recent years. Word-of-mouth has always been the best form of marketing.

2. Investment Decisions - if you have good deal flow, then there is no shortage of good deals to choose from. But good deals don’t return funds, great deals do. If deal flow is everything that is added to the top of the funnel, then making an investment decision is the process of selecting the few deals that make it. 

3. Post-Investment Support - every VC should spend as much time as they can helping their existing investments. Current investments should always be more important than the investment you are about to make. Startups are risky, and it’s the job of a good VC to do everything they can to de-risk an investment and help the founders build a big company. 

4. Limited Partner Management - VCs are money managers who just happen to have company building skills. The money they are managing comes from LPs, or Limited Partners. LPs range from individuals, to family offices, to endowments, and even to corporations, such as the case at Google Ventures or Intel Capital. Managing these LPs is one of the least visible aspects of VC, but it’s an unavoidable aspect of the business. 

Venture Capital is a mix of many skills and industries. I believe this is the reason there are so many different types of people in VC. Although this may cause confusion for outsiders looking in, the good news is that entrepreneurs get a wide variety of people in which to choose from. As the VC industry continues to evolve, change is certain, but I believe the four pillars above are here to stay. 

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tag:chadbyers.com,2013:Post/693229 2014-05-19T18:28:19Z 2014-05-19T18:28:19Z Waze - an acquisition gone RIGHT


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As reported in June, Google bought an Israeli mapping company called Waze.

As a user of both Google Maps and Waze, I was excited about the potential of this acquisition, as both products have inherent advantages.

What I was concerned about, however, is the fact that many acquisitions never live up to their potential. That is why, when only two months after the acquisition, I saw Google Maps already starting to pull accident data from Waze (see above where it says ‘reported via Waze app’), I got excited.

Although I am still waiting for Google Map’s directions and navigation to get smarter using better traffic data from Waze, I am delighted and encouraged by the fact that Google is putting the acquisition to work immediately.

This is the way to do Corp Dev. This is the way to do acquisitions. Don’t spin your wheels trying to do a massive overhaul. Pick the low hanging fruit and continue the integration form there. It’s a great way to delight your customers.

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tag:chadbyers.com,2013:Post/693228 2014-05-19T18:27:57Z 2014-05-19T18:27:57Z SW is eating the world, but it needs to eat faster

In a WSJ post by Marc Andreessen in 2011, he said, ‘software is eating the world’. 

In short, this phrase refers to the idea that “software companies are poised to take over large swathes of the economy. More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense.”

I couldn’t agree more. And as an investor and consumer, this excites me. 

But it’s not happening fast enough. 

Yesterday I was walking into a friend’s building in the Financial District of Manhattan and passed a polling booth for NYC’s Mayoral Democratic Primary. Not only did it look unorganized, but watching volunteers slip pieces of paper into manilla folders seemed so archaic and stone-age; not to mention the margin for error seemed rather high. 

I would assume someone has looked into this to make sure we are not making mistakes all over the place, but I would be shocked if there weren’t some ballots misplaced or unaccounted for. In a world where I see software replacing traditional mail, which is one of the oldest and most archaic business in America, I can’t help but think it needs to hurry up and eat this vital part of what makes America, America: our democracy. 

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tag:chadbyers.com,2013:Post/693227 2014-05-19T18:27:27Z 2014-06-12T19:58:55Z StartX is the future of accelerators

StartX is a relatively new accelerator out of Stanford University. I believe that their model is superior to the leading accelerators that exist today, including YC, TechStars, DreamIt, AngelPad, etc. Not only are they competitive on industry table stakes, they also have key advantages that put them out ahead: 

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Accelerator Table Stakes

1. Mentorship - Perhaps the most valuable aspect of accelerators is the access to top tier mentors and founders. YC is known to have the best mentors in the game; however I feel that over time, Stanford will have access, through their alumni network and deep connections, to an equally respectable roster of mentors.

2. Resources/’Back-office’ - Another perk of accelerators is the access to office space, legal and HR resources, food, etc. All the top accelerators in the world provide this, and StartX is no different. 

3. Investment/Seed Capital - Almost all of the top accelerators provide some nominal investment (typically $10k-$50k, sometimes more) to pay the founders a small salary, pay for company expenses, etc.; however this obviously comes at a significant cost in terms of equity. More on that later. Although StartX doesn’t do this, they do provide the option to apply for financial aid (a small living stipend of sorts). An interesting approach indeed, and one that I think is advantageous for founders. 

4. Demo Day/Access to Capital - The best accelerators provide a big stage for their startups to meet prospective investors. The best investors go to the best Demo Days. How do you get the best investors to attend your demo day? You earn it. StartX is well on its way. StartX companies have raised $350M in follow on funding from the likes of A16Z, Google Ventures and Greylock in just four short years, with $1.8M being the average. TechStars for comparison, often considered the 2nd best accelerator to YC, has an average of $1.5M raised/company. Furthermore, this recent news doesn’t hurt. Having one of the largest endowments in America cutting checks should help out significantly. 

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So if StartX is competitive on table stakes, what is different about StartX? Why is it better?

1. Equity - StartX doesn’t take equity. This is huge. As I mentioned, most accelerators give participating startups a small investment. This at first may seem great, but this small investment comes with a significant cost in terms of equity. Traditionally, startups will give up 2%-15% of their company. The reality being that the equity taken is not only an exchange for the investment, but an exchange for mentorship, the back-office, and access to follow on capital. 

However if you talk to most founders, this investment is less valuable than the mentorship, access or connections, and often times the capital is not even needed. They typically see the equity they are giving away as a trade-off for these non-monetary benefits.

So if I offered you all these things without taking any equity, wouldn’t that be a better offer? That is what StartX is working towards. 

2. University Research - Some of the best technologies and breakthroughs have been the product of university research. Universities have long been a hot bed of innovation in America, and especially top universities such as Stanford. Having an accelerator closely working with a research university is an immense value add, especially in the fields of biotechnology, computer science, and material science, where the leading minds in those fields are typically in universities, not in the private sector. 

3. Alumni - University alumni networks are one of the strongest social and business networks in the world. If you are founder that is attending or attended a university that has a StartX of their own, it would be a compelling offer. Connecting your company to a network of alumni could help pave a path to mentorship and fundraising. In my own personal experience, I have found alumni more eager to help out than even close business connections. 

Although I believe this model is extensible to other universities, Stanford is a perfect place to test it. Its location, history and alumni are more involved in technology than any other institution. Plus, its alumni raise more venture capital than any other school. 

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In summary, I am not arguing that StartX is currently the best accelerator in the world, but I am arguing that because of this superior model, it could be someday. However these things take time develop; it’s still early. And though some of the points above are specific to Stanford, I in no way believe this model is limited to just Stanford. This model could be successful in the many great universities across this country.

The simple idea of providing mentorship, access to follow on capital, small living stipends, and a back-office, all without taking equity, is a powerful one. And colleges are a great place to enable this. With a relatively small investment from Stanford in terms of resources, they gain startup cache, attract better applicants, and with the option for Stanford to invest directly into StartX companies, the potential for significant financial gain. 

It should be noted that StartX is also partially funded by Kauffman Foundation, Microsoft, Blackstone Foundation, Cisco, Intuit, Greylock Ventures, and AOL, which further helps to reduce the cost to run this program for the university. 

I look forward to watching the accelerator wars and seeing how this industry evolves. 

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tag:chadbyers.com,2013:Post/693225 2014-05-19T18:27:06Z 2014-05-19T18:27:06Z Productive Exercise

I try to stay healthy. Exercise is an important part of that. Most often, exercise comes in the form of running. 

Like most, I typically run to music. There are obviously many reasons for this. It is distracting, motivating, and can help the time pass. 

However recently I decided to try something else. Instead of listening to music, I load up a interesting talk, interview, audio book or podcast. In the last week, I have listened to a PandoMonthly interviewa TED Talk, and part of 'Hot, Flat and Crowded', by Thomas Friedman. It’s great. 

Although you might not run as hard, as long, or as intensely, I have found that the time passes even faster than when listening to music. Try it for yourself. You might be pleasantly surprised.

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tag:chadbyers.com,2013:Post/693224 2014-05-19T18:26:34Z 2014-05-19T18:26:34Z Welcome

This is the personal blog of Chad Byers. I plan on writing things that I care about. Maybe others will care about them too. 

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