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Veteran VCs will often recall their first venture investment with a sense of fondness and I will likely be no exception. After being named a Venture Partner at Polaris in April of this year, I’m thrilled to announce the firm’s Series A investment in Lob - the web’s print API layer. Polaris is leading Lob’s $7M round with a great group of co-investors including Rob Hayes at First Round Capital and MIke Maples of Floodgate and I’m joining the company’s board of directors.
Even if this wasn’t my inaugural deal at Polaris, I would still be extremely excited about this company. I first met Lob’s founders, Harry and Leore, in the fall of 2013. They had just completed YCombinator and were raising their seed round. I had just sold my company, Spindle to Twitter and was looking to make angel investments. In our first phone call, I knew I liked the team and wanted to engage further with them. Leore and Harry were hyper focused on validating their market, hiring against a plan, and building a beachhead. I invested in Lob’s seed round, as did Polaris, and an amazing set of other angel investors.
It’s a cliché, but entrepreneurship is about teams. Everyone knows a team needs to be functionally complete, but I have come to appreciate that teams are about individual relationships. As an investor, not only did I assess if Harry and Leore could carry Lob forward, but I also assessed whether I would want to join the effort and work with them for years to come to build something really important.
Harry and Leore pulled me into their company. As I learned more about them, I became compelled to work with them. Many entrepreneurs underestimate how important it is to bond with a prospective investor and are hurt when they treat a Series A transactionally. Harry and Leore didn’t make this mistake. They focused on enhancing their team through this financing. Early on, they identified their core challenges and sought help from their angel investors. This transparency was an instant draw to the company as its impossible to help people who don’t seek it. It also gave me great exposure to the technology and business model, which helped me appreciate how robust and scalable their solution is. Their maturity and rigor in gathering the right people to support their vision was extremely impressive. I’ve taken away a great deal from Leore and Harry already and am honored to join them for the journey ahead.
At Polaris, in addition to finding teams we want to work with, we seek out companies that we can contribute to in meaningful ways. With over 40 SaaS companies in our portfolio, we believe we can help Lob package software on top of its printing capabilities. We also focus on innovative business models that have the potential to disrupt inefficient processes. With Recurly, Bitium and other fast growing API providers in our portfolio, we’re confident we can help Lob explore new and innovative ways of delivering value. And I’m thrilled to marshal my colleagues’ experience, specifically Dave Barrett and Gary Swart, as we help Lob scale its sales and marketing efforts to realize the company’s enormous potential.
Print is an entirely untapped opportunity for software developers. Today’s applications can spread globally and scale wildly in short order. To leverage print, developers need a highly scalable solution that works everywhere. By offering a developer friendly, pay-as-you-go service, Lob has helped developers realize print is an important and easily achievable part of their application or service. With Lob, it is now trivial for developers to blanket a zip code; print and mail checks, documents, postcards, and other items; and integrate trigger-based documents into their service.
When I spoke to Lob’s customers, it became quickly clear that most of them had been waiting for Lob. They knew print could be a transformative addition to their product, but never tackled it. Developers are simply too busy and ill equipped to find vendors, negotiate contracts, guarantee order volumes, process and batch jobs, source global availability, and ensure quality. But Lob eliminates all of this needless complexity and hassle. As is true for most API solutions, many of their customers registered for Lob, experimented with its APIs, and deployed new Lob-enabled capabilities without ever having to speak to the company. These developers have been able to seamlessly build scenarios on top of Lob that are more diverse than I imagined. And they are thrilled with the results so far.
Developers will do amazing things with a powerful API. Through Lob, I believe that print is about to become a major component within the software ecosystem. I couldn’t be happier to help lead the charge alongside such an amazing set of founders.Tweet Vote on HN
Market sizing is an incredibly important task for both entrepreneurs and investors. It helps you decide which markets to prioritize and helps you better understand how your application [or someone else’s] is fairing in a particular area.
At Spindle, our application needed to be enabled and launched city by city. This is an increasing trend. Uber, Lyft, Drizly, Washio, Spoonrocket, and countless other services need to launch their transportation, alcohol, laundry, or meal delivery service incrementally. Like Spindle, expanding these services requires significant effort in each city. It’s incredibly important to prioritize which cities you tackle first. And once off the ground, it’s equally important to know how much of the market you’ve captured.
When we were trying to create our prioritized city list at Spindle, we looked at every possible piece of data: population, population density, income, inbound migration [Marc Cenedella of The Ladders told me that inbound migration equalled new people looking for jobs/things to do/etc - good tip!], age, and other demographic information. We had a mountain of things to consider, but still felt we had no real insight.
Although we knew how many people lived in a particular city and how many people were of a certain age, the data was disjoint. We lacked the ability to perform complex queries that would consider multiple factors. Applications are often directed toward very specific sets of early adopters and we needed more granular data.
Enter Facebook Ads Manager.
While experimenting with buying ads, it struck me that Facebook’s Ad Manager is the key to market sizing. Facebook’s penetration is so great that it’s safe to assume they represent the US internet population. They know which devices people use and which interests and behaviors people have. What’s more, it’s all easily queryable. Facebook will tell you how many people match your criteria in each city. Because these people are actually acquirable via Facebook ads, I believe this is a tremendous way to prioritize cities.
Let’s say you’re building a dating application that enables people to meet while trying restaurants they both want to visit. You’re located in San Francisco, but think there might be a better city to launch your application. You’re early version is iOS only.
Visit Facebook’s Ad Manager and select App Installs.
Under Audience > Platform select iOS only
Under Interests select Family & relationships > Dating
Under Behaviors select Purchase behavior > Buyer profiles > Foodies
For age, let’s say you require 18 minimum
* There are other interests and behaviors you can select, but these are sufficient for this exercise
Now that you’ve identified the type of people you’re targeting (dating foodies), where should you launch?
Under locations, entering a few cities will reveal:
- San Francisco, CA + 10 mi = 4,800 people
- San Jose, CA + 10 mi = 1,960 people
- San Diego, CA + 10 mi = 4,400 people
- Los Angeles, CA + 10 mi = 10,200 people
- Portland, OR + 10 mi = 3,200 people
- Seattle, WA + 10 mi = 3,400 people
Now you know which cities have the most people that match your criteria. San Francisco and San Diego are roughly equivalent, but I can guarantee you the cost of acquiring a user in San Francisco is higher than in San Diego.
Once you reduce your list to a few cities, the next step is to run some test ads in each city. Within about 24 hours, you’ll be able to estimate the cost per install for each city. From there, you’ll know which city has the most people and is cheapest to pursue = your launch city.
Finally, these numbers give you a way to benchmark your success. If your dating+dining app launches in San Diego and has 2,000 active users… you’re doing much better than you might have realized without this data.
I should also note this data is valuable for entrepreneurs as they communicate with VCs. If your application is focused on a niche like in this example, you will need to contextualize the number of users you have. Saying you have “2,000 users” or “half of the targeted early adopter market” in San Diego are very different things. From there, you’ll need to experiment with expanding out of the targeted niche into broader audience segments and into launching in other geographic areas.Tweet Vote on HN
This concept, by Jay Machalani, is pretty much exactly what I want. Especially on the iPad.
It won’t happen in iOS 8, of course. But let’s cross our fingers for something like this in iOS 9.
[via 9to5 Mac]
I have long since believed there are serious challenges with the query “What’s Nearby?” Although I’ve taken my shots at Foursquare, they do have the greatest chance of realizing the social+local vision and I’m rooting for them. I’m encouraged that they’re willing to take a bold step and split their service into Foursquare and Swarm.
I’m going to ignore Swarm for now. They believe that generalized location sharing will be more appealing than pinpoint tracking. That’s a theory I’m not able to comment on so I’ll take a wait and see approach.
They didn’t reveal much about what the new Foursquare will become, but they dropped a few clues.
As I stated, I don’t believe the “What’s nearby?” query is compelling enough to drive meaningful query volume. People just don’t ask where they should go that often.
Passive queries are part one of the local query volume solution. I’ve held this view for a long time and Spindle was way ahead in this realm (See this TC article - Local Discovery App Spindle Debuts Google Now-Like Search Alerts). I frequently said the future of search is a phone in your pocket, location, and a search service always running on your behalf to push you what yo need to know. Foursquare clearly shares this world view.
Foursquare tips are part two. As I said in my post a few weeks ago, “Generating proprietary data is compelling and Foursquare excels here with their Tips.” There are many services with POI data, but no other service has the tips like Foursquare.
It’s the combination of these two ideas that is so powerful for Foursquare.
Rather than asking “Where should I go nearby?” what if your phone constantly told you “What do I need to know about this place?” The first query happens infrequently. The second query happens all day long as life takes you in and out of restaurants, coffee shops, train stations and every venue imaginable. As someone who has inspected the hell out of Foursquare, I can tell you they have excellent tips for all of these places.
The first query is infrequent and competitive as hell. The second query is a greenfield opportunity.
So, we’ll see how well Foursquare executes, but I’m very excited if this is their new direction for discovery. Regardless, kudos to the team for the bold step.Tweet Vote on HN
I’ve spent the last year meeting with entrepreneurs at varying stages. I’ve been struck by how frequently a company’s product practices and product organization are lacking - and how they’re in complete shambles more often than you’d think.
It’s a boring position to take, but I am proud of and thankful for my experience as a PM at Microsoft. I learned a great deal about software development practices as a whole… and how to develop, articulate, and shepherd a product vision. Sure, Microsoft takes it too far and slows down development, but there’s a ton of good in knowing how to lead rigorous product exploration and development.
The lean startup movement combined with lower costs of development has been fantastic, but it has come at the cost of best practices. Whether it’s poorly written code or poorly considered product road maps, many of today’s companies are cutting corners across the board. Taken as a whole, this is fine because the ecosystem lets a thousand flowers blossom and we celebrate the few that survive. My point isn’t that these companies should be judged, but I’ve observed that these companies face serious challenges as they mature.
We are all familiar with the concept of technical debt. I believe startups have debt across every discipline and product debt poses as great a risk as technical debt.
Like a movie with an interesting premise but no real story (Hot Tub Time Machine), many startups shoot out of the gate with early, but limited traction and raise money. As these companies begin to scale, they can quickly find that their product isn’t as appealing as broadly as they had imagined. Their story starts to fall apart. There are an infinite number of challenges with an equally large universe of solutions. Although founders brought the initial inspiration to the table, many often lack the skills to understand their customers’ competing needs, maintain the big vision, and balance this tension to prioritize development efforts to refine and grow a product. What’s more, product problems typically arise at the same time teams have just scaled. With an elevated burn rate, it’s extremely important to make the right product decisions.
While I’ve been surprised by how many companies have these problems, I’ve been equally encouraged by how many founders openly acknowledge them. In almost every case, hiring “a great VP Product” is the solution they’ve identified. Unfortunately, this also presents enormous risks.
Given today’s startup environment, truly great product leaders are either starting their own company or being chased by top tier companies. If you want to hire one of these people, good luck. Get in line. Presuming you have the tenacity to prevail, a few words of advice…
There are two gaps you need to fill: product management and product vision. It’s important you understand what your organization lacks and how a candidate fits in.
Many startup founders believe they’re the visionary and only want help with product management. As the engineering team grows and is capable of completing more tasks, a startup will say, “we need someone to manage the list!” This comes with its own risks. The problem with lists is that they put things in an order. The problem with inexperienced people taking over the list is that they become a target for other employees to get their pet projects prioritized. Before you know it, you’ve handed over prioritization to someone else and the politics are out of control. If you do go this route, it’s extremely important to maintain a leading role in prioritizing tasks and maintaining your position within the company as the setter of the road map.
Fewer founders admit they need help with Vision than ought to. Putting YOUR talents aside, I would argue that most people are not capable of defining a winning vision in a hyper competitive market AND managing a company’s operations and strategic relationships/opportunities. Some founders (ie David Karp at Tumblr) offload operations to focus exclusively on product. Others remove themselves from day to day product to focus on operations and high level strategy, interfacing with the product team by setting strategic milestones. As a founding CEO, you need to be great at one of these disciplines and should relinquish the other. At any startup, someone needs to have the entire product in their head. If it was you, but you’ve become too busy and can no longer do it, it’s time to supplement yourself and hire for operations or vision.
Hiring for vision is one of the hardest things you’ll ever do. First and foremost, it’s incredibly important that the person isn’t just a project manager who wants the VP Product role. Domain expertise is a must, but I believe curiosity and fearlessness are most important. A good VP Product will research the hell out of your business and your competitors. They will know your customers intimately. They will be bold in their recommendations. One of the most dangerous mistakes a startup can make is to hire someone for vision that is too timid or too focused on project management. In these scenarios, the founder will relinquish vision and task prioritization and the new VP Product won’t grasp the baton. The company will seem to be making progress, but they’ll be working off a task list that fails to advance the company strategically.
Any healthy product organization should be able to answer three questions:
Who are you building your product for and what is their pain?
What would address your customers’ pain and improve their lives?
What will you actually build?
Unfortunately, many startups can answer the last question, but fall apart on the first two. Their task list is a poorly considered jumble based only on gut instinct. At the earliest stages, it can be great to throw a half-formed concept against the market to see what sticks. But this will only take you so far.
Big companies teach employees to think about their products in terms of a Market Requirements Document, Product Requirements Document, and Technical Specification. By no means am I advocating that a startup should be this rigorous, but they should understand why these documents are written in this order. They’re a tool for understanding your customer’s needs, coming up with ideas to meet them, and then planning a release to get there. Working in the other direction is foolish.
If your product org is struggling, I seriously suggest you get your house in order. It’s an obvious statement, but the most important thing you do in a software company is decide what to build. Because (nearly) anything is possible, what you build is what will determine your company’s success. If you do need to improve your product org, perhaps the right solution is to hire “a great VP Product.” Given the risks in hiring the wrong person, I think most teams can and should solve these problems themselves. Although writing the big company product docs is too much, there’s no excuse for not getting in a room and talking about your customers’ pain.Tweet Vote on HN
I’m excited to announce that I will be staying on at Polaris and will be investing in early stage technology companies as a Venture Partner.
When I joined Polaris as an entrepreneur in residence last August, I was exhausted. I had just sold Spindle to Twitter. After nearly three years of work and months on the road, I desperately needed to recharge physically, emotionally, and creatively.
From day one, Dave encouraged me to reconnect with other entrepreneurs on both coasts. He felt my experience developing complex software in big and small companies would really resonate with other entrepreneurs. Dave was right and I’ve been able to roll up my sleeves to help a few early stage teams.
What’s surprised me is how much I’ve enjoyed this process. I am a “project person” and love to sweat through a complex problem. To my surprise, I’ve found that there are companies that need this help AND it has been extremely satisfying to dive in and help in a supporting capacity.
So, what type of investor will I be?
I’ll share more later about the specific areas that excite me, but above all else, I’m looking to combine capital and sweat to really dig in and help a few companies. My plan is not to be a high volume investor, but a high impact one instead.
My time at Polaris has convinced me that this is an incredible time to be a Series A investor. Given the surge of early stage companies looking for Series A capital, it’s an awesome time to partner with great companies that also interest me personally. I’ve searched through a lot of corners this past year and see so much opportunity.
I have greatly enjoyed the last eights months. I’ve learned a tremendous amount from the team at Polaris and the entrepreneurs I’ve met with. I will be drinking from the fire hose for some time to come. I’ll share more thoughts in a bit, but my experience as an investor has already fundamentally shifted how I evaluate risk, opportunities, and how to plot a path toward success. I aim to pair my experience as an entrepreneur with a broader vision of the market to help other entrepreneurs build world-class companies.
I look forward to meeting with more of you. I’ll be based out of our new office in downtown Boston, but will frequent SF and NYC as well.
Don’t be a stranger. firstname.lastname@example.orgTweet Vote on HN
I see it time and time again… an entrepreneur with an amazing vision and a beautifully designed app, but no plan at all to get the app to its successful state.
Too many entrepreneurs imagine how amazing their app will be at scale. For example, there were several geo targeted local Q&A apps that launched a few years back. They all shared the incredible vision that you could ask anyone a question at the exact right time and place. These teams focused like mad on the interaction between asker and answerer. They focused on amazing UX to discover relevant nearby Qs. If there were ever tons of questions, these apps would have been brilliant. Despite all of this hard work, most of them never succeeded in getting people to actually ask and answer questions. We see this time and time again across so many different types of products.
Products are usually built by teams. Teams use their products together. Although it’s great to eat and breathe your own product, it’s dangerous to focus only on what your product will do once people are bought in. Because you, the developing team, never needed to be convinced of your product’s value… it’s especially important that you focus on everything that must happen before someone actually does what your product intends. If you’re focusing on everything someone can do once the product is alive and populated with other people and content, you’re headed for a bumpy road.
I’m finding that many entrepreneurs get frustrated when they’ve fallen into this trap. They pitch the massive vision. I get it. Sticking with the example above, it would be incredible to target questions at people by time and place. But anyone can say that. What are you going to do to earn that opportunity and create that experience?
I’m learning that I’d much rather hear how someone plans to introduce their product than what it will do when the vision is fully realized.Tweet Vote on HN
My friends are sick of hearing it, but I believe everything is being documented and discussed on the social web. Yes, I believe every person, place, event, and subject is being discussed… but more simplistically, EVERY LINK IS BEING SHARED.
When Twitter first exploded, there was a surge of companies trying to make sense of the torrent of links being shared. Tweetmeme was an early example that comes to mind. I don’t know if it’s due to Twitter’s ever-changing attitude toward data access, but I can’t think of any major, remaining effort to help people discover the most interesting and important shared links.
For those of you unfamiliar with the idea and opportunity, Tweets are like votes. If a link is shared 10 times, it gets 10 votes [not unlike Digg]. Add in the ability to understand what the links are about so people may discover by topic, place, media type, etc. and you have an amazing way to discover what’s happening across the internet. Given the breadth of Twitter, it should satisfy any interest.
… Even more narrowly, Twitter could just show you “top links” your friends have shared Today / This week / Since you last visited. It would just find the links your friends had shared and rank them by the links’ popularity across all of Twitter. Duh.
Quibb is a great product that’s built around links. Their proposition is “share what you’re reading for work.” It’s a great way to discover content across the web. I want the same thing for Twitter.
Please build it.Tweet Vote on HN