Problems Require Passionate Solutions (Notes from Oct 22 - 27)

This was a week for venture, seed investing combined with a number of episodes diving into psychology and differences of people.

Week of October 22, 2018

• Jeremy Gilbert, Strategy and Product Initiatives at WaPo (Work of Tomorrow, Wharton XM)
• Talked about how automation has helped free up some of the repetitive processes for journalists and editors
• Can never have too many editors - who say that there can always be more journalists
• WaPo has looked to scale the number of stories, and that's allowed them to provide smaller stories to more people
• Automation in the form of Heliograph system for the election - newsy material that updates automatically Don’t want journalists spending time on curation or number-gathering, should be on analysis and interviews and getting the story
• Defy.VC co-founder, KP Trae Vassallo (WhartonXM)
• Talking about seed stage venture and series A - 7 in less than a year and closing fund Doesn't care if bootstrapped or crowdfunding, though her and partner have invested/worked with 5 of 7 founders teams
• Institutional start-ups have boards that could be very beneficial in identifying business models, proper ear but doesn't exclude others
• Co-wrote Elephant in the Valley, on women / diversity harassment in the Valley
• Did a short poll of other women ~50 when she realized she wasn't alone for the culture in the valley
• Not a feeling exclusive to SV - very prominent in Hollywood, Madison Ave, Wall St, etc…
• Doesn’t care about failures if founders have generated a learned knowledge for how to avoid or change what went wrong
• Using Facebook to Understand Depression, Andy Schwartz and Johannes Eichstaedt (Wharton XM)
• Surveyed some 1500+ people, actual data and analysis in World Well-Being Project
• Went through Facebook to determine usage of certain words and language that gave indicators of depression
• Ex: me/I when used often typically signified a higher sign of depression
• Usage of the word 'alone', at all, may be a signifier (but multiples didn't seem to enhance case)
• Data questions of health - if you assess the subjects' mental health status (or in general), that information becomes subject to HIPAA and other privacy laws
• Had to control who is looking, every stroke gets logged and people must be hyper aware of what it is they're a part of
• If this can be used for treatment or further diagnosis, ramifications of data privacy and health are a big challenge
• Debra Mashek, Professor of Psychology at Harvey Mudd (Women @ Work, WhartonXM)
• Talked about how 60% of college students are women but not taking the higher-paying wages still (or majors that'd pay that) Mentioned HMC's success: Dean/President is woman and 54% of CS and 56% of Physics majors are women, going to better things
• Often, women were deterred by initial hurdles
• Survey/study where an online course had a pre-quiz: women that performed poorly would drop the course; males - no such thing
• How to fix this, and make it so they aren't put off
• Online platforms enable women professors to be scaled (women will take a course or be drawn to it with a woman professor) Easier because there still aren't enough or haven't been enough women in the field to draw the necessary influx of women talent
• Javier Sotero, Corp VP of Outlook @ Microsoft (20min VC FF012)
• Moved to Outlook after his startup, Accompli, was acquired by Microsoft for $200mln
• Was chief architect at a startup, where he partnered with other 4 engineers at the company to buy out the product they built (for $1)
• Company was failing, but they believed in the product and market there and transitioned into that
• Company was called Hypeeric (sp?) Sold in 2009 when they had 1000s of customers, $10mln+ in revenue, to VMWare and wound up as CTO
• Accompli started as EiR at Redpoint, failure was Covalent (tremendous amount of capital)
• New game, new rules (but they fell prey to old stuff - top down, Seibel-style business) Showed him that you can have top tier money and intelligent people and actually fail still
• Bootstrapped for multiple years before taking institutional money
• Good investor for him: pushes founder to think and achieve more than you may have thought
• Growing business with 0 capital, $15million to build already and got it for $1
• Respecting the amount of capital brought in
• Investors as being very helpful through the crash in 08 - maintaining build, product and the customers
• Find a simple, straight forward approach: vitamin product, painkiller product, viagra product (blog post, not his)
• Vitamin: not felt immediately - felt down the line (hygiene for instance)
• Painkiller: attractive (everybody needs to fix pain) but "tolerance" or how "long-lived" product is - churn issues
• Viagra: previously thought impossible become possible
• His belief: venture capital as fun sheet bs and an illogical attraction toward terms
• Remembered at Hypeeric that people would ask about valuations and he hated it
• Incestuous, passing deals back and forth ("VC is not a true market") - limited number of players managing flow Amazing part of US and global economy - "great valuation" not a marker for anything from the business side
• Reasons for selling to Microsoft - middle of transition from deeply loved, widely-adopted to enterprise business (and really make money)
• Fortunate to already have multiple $ of sales and customers - 2 in Europe, 1 more in UK, and 2 in US to work closely and craft Accompli service He was already familiar with that and growing up as team/company
• Says nobody was searching app store for Accompli, so they needed to somehow deal with marketplace, such as Microsoft
• Wait But Why blog
• Jeff Clavier, King of Seed Funding (20min VC 069)
• Founder and Managing Partner of SoftTech VC, closed 150 investments
• Born and raised in France, did a start-up in fin services that was acquired by Reuter's in the UK
• Moved in 2000 to SV to a venture capital firm - partner at Reuters Partners fund
• Started SoftTech in 2004, focused on early stages of industry - gap for people in few $100k's for funding vs millions ($10mlns)
• Been working for a few years, FitBit was his investment - ~15 per year
• Asked if it was efficient to build hardware companies on cheap capital - introduced to founders as he was finding out about this
• 250 microVC funds have gained $4b in funding Thus, understand the type of company, location and market of your start-up This should narrow your VCs that you want to target for funding/partnership (~5-10) that should have interest in what you're building
• SoftTech is a B2B and SaaS investor, vertical/horizontal/mobile and marketplaces, as well as connected devices (home, payments, healthcare) See 3000 companies and only invest in 10-15 of them Prioritize deal flow, typically, with in between connections (can get on calendar much easier with them)
• It's been said they've "forced" larger seed rounds - they look at roughly an 18 month runway (hiring eng, product to market, traction, few iterations) Growth path should follow and clear the series A hurdles - ($2mil - $4mil - hardware taking more time, usually)
• Only build a start-up about something you're very passionate about
• Best thing about being a VC - seeing the world through the lens of some of the most crazy and expansionary minds