(Zoom, focus, zoom, focus, that’s how we gain clarity)
One of the magics of Silicon Valley is that it is such a dense area of talent. Talented individuals that have amazing skills to build the next best thing. This is truly what being a VC is all about, living and breathing in this aura, it makes even a dumbass like me feel smart. It is truly a great experience to learn from everybody, and just about every new person I meet, there is always something new to learn. After all being a generalist VC, there is just too much information out there to get familiar with everything.
However one of the most interesting things about this community is that it can also become distracting. Everyone’s brother, friend, neighbor, etc. etc.. is doing a startup, whether they should do a startup or not that is the question. They no doubt have skills for but do they have the expertise in the market? This latter point is often where I think people get confused about, or lack.
To run a startup itself is pretty damn hard, but to run a startup that you have no expertise in is even harder. People often find their passion from past experiences that they worked with extensively. Lyft for example found out from their experience in Zimride, that 80% of all cars seats are empty which lead to the birth of Lyft. It is an example of talented founders finding their secret.
In a world where public media is dominated by Twitter, facebook, Google and Amazon it is too easy to get tempted to start another company that is just another “facebook for xxxxxx”. To save your time and enjoy your work (not saying you can’t succeed doing something you have no expertise in, it is just harder) take some time to discover yourself. After all, how do you plan to understand your customers if you can’t fully understand you!
Zoom, focus, zoom, focus, that’s how we gain clarity.
One of the most talked about tech innovations recently is definitely Bitcoin and its profound uses for many verticals. It is and will always be a hot debate on whether it will be the next big platform, the most notable being Warren Buffett Vs. Marc Andreesen. I won’t talk about which side is right and wrong, but I will devote this weeks post to what should be known.
I think as we continue to further immerse ourselves with the digital world, there is simply no way around a virtual currency (Think Ghost in the Shell). It is after all our job to predict what is to come in the next 5-10 years, which brings to the question is the world ready for a globalized digital currency?
One of the biggest support for bitcoin is users that use it as an alternative investment, after all bitcoin is very similar to gold. Both have a finite volume thus making it a highly desired product. It is simply human nature. The biggest problem with this mentality is that you are being fooled! Unlike gold, a majority of the total ownership is not owned by a small group of individuals. Over 25% of all bitcoin in the market is currently owned by 50 individuals, not 50%, but 50 individual people! In fact over 50% of all bitcoin today is owned by less than 1000 individuals! Source:Business insider
If you are an investor and trying to hold on to bitcoin for the long term potential you should be crapping your trousers! The simple fact that it is a volatile commodity deserves a post of its own. But to get back to the point of why it is dangerous is that unlike gold, these 1000 individuals have the power to manipulate the market and the value. If they sold off all their shares, the value of each coin will plummet to scrap metal.
What a lot of people do not realize is that even though the cryptocurrency have been around for over 5years, we are still at the beginning of the virtual currency revolution and to figure when it will be widely adopted is a nothing more than a fools game. I strongly believe that the future of bitcoin is it underlying blockchain and the myriad of services and technologies that can be built around it.
Until next time chow!
I visited a friends office this past weekend and had a run in with one of the most high-tech refrigerators I have ever seen. It had a touch screen display and with options for ice cubes, to semi crushed, semi semi crushed and crushed. The options weren’t the problem and in fact I love! crushed ice, its the touch screen interface that makes want to scratch the screen to oblivion! It makes me wonder, did the UI/UX tester even tried to use it before shipping it out to the mass market?
Which brings me to the point of, when does technology and integration of internet of things become overly smart and complicated that it becomes useless? I believe that this is a very important factor to consider as we continue to see more and more startups turning things that weren’t smart into smart devices. In this case, having some many different sized ice cubes was probably unnecessary for the general consumer market.
This week, I chose to use Robot Santa as the blog gif theme and the reason for that is he is an extreme example of the dangers of being too smart.
I grew up in a family that has been serving the service industry for over 20 years now. I have worked in his restaurant in Lancaster Pennsylvania since the age of 7 and pretty much know the in’s and out’s of a restaurant business. This has taught me priceless lessons on building a business that lasts.
One of the most fundamentally important aspects of any business is making money and it is actually extremely easy. Think about those days when you had a lemonade stand or shoveling snow off your neighbors yard. In essence, that is an entrepreneur, taking the skills you have and turning that into something that people would pay for. What is important is that there is a huge difference in “making enough money” versus making the “most” money. It is all really important concept and really shapes your business on day one based on your perspective.
To put things in perspective, my parents combined, make a high six figure salary per year and they are completely satisfied with it! Why? Because they have since diversified their own portfolio, that now they do not have to work any more and still enjoy a great set of income. What this has taught me is “let your money work for you!” Specifically, build a company that can keep your bills paid the first day so that you don’t have to rely on funding.
Everyone wants to be the next hot shot facebook and snapchat but the harsh reality is that most likely you are not going to be it. The reason being is companies that solely rely on users as a measurement of value is dependent on venture funding. This is a task that, in my opinion, is more luck than than actual foresight. Think about the many facebook predecessors that have failed, or even the many snapchat copy cats that still pop out in the app store every day.
The founders of imgur.com have bootstrapped their company since day one and they fully use the concept of making money so that you don’t need investors. This forces the company to stay lean and focused on building the best damn image sharing community!
I often get asked: “do you think this idea is feasible and that I should fully commit to it?”
My response: “have you ever asked yourself what type of entrepreneur you want to be?” “The ceo of an unknown company that makes millions per year or a Mark Zuckerberg?”
Often times the response is “no”.