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There’s only a few ways to scale user growth, and here’s the list

There’s only a few ways to scale user growth, and here’s the list Andrewchen Jul 8, 2014

Scaling growth is hard – there’s only a few ways to do it When you study the most successful mobile/web products, you start to see a pattern on how they grow. Turns out, there’s not too many ways to reach 100s of millions of users or revenue. Instead, products mostly have one or two major growth channels, […]

Here’s Why a Booming Tech Market May Fool You into Thinking You’re Successful Bothsidesofthetable Jul 22, 2014

Since 2009 we’ve been in an unequivocal bull mark […]

The Changing Structure of the VC Industry

The Changing Structure of the VC Industry Bothsidesofthetable Jul 23, 2014

There has been much discussion in the past few years of […]

Growth is a Commodity Thisisgoingtobebig Jul 21, 2014

If there's one thing we've basically figured out in the digital world, it's marketing. There's no more well tread aspect of building an online business than marketing. We've got more channels, tools, and analytics to tell you weather or not it's working than you can shake a stick at.

It's table stakes. You spend some dollars to get more dollars out. It's not complicated.

That's why I care much more about engagement--do people like what you built, versus whether or not more people used it today than they did yesterday. Plus, the startup world is littered with companies that grew exponentially without becoming successful--Fab, Turntable, Dailybooth, etc.

If people engage regularly with your product, but you can't get more people to use it, you've got a marketing problem. Marketing problems, for the most part, are solvable by a very distinct set of best practices. You've just got to figure out why the current set of people like it, and find more of them. Now, maybe there just aren't that many people out there, but for the most part I see a lot of low hanging fruit ways that marketing could improve.

On the other hand, if people are coming, but they're not engaging, you've got a product problem. Sometimes, it's easily fixible. Other times, you're just so way off on product/market fit that you've fallen into "bad idea" territory, and there's really no timetable for fixing a bad idea.

On top of that, there's another problem that startups have more trouble figuring out than marketing--scaling. What do you do when you actually start getting people in the door? How does your sales support staff change? Where's the first bottleneck? Does the experience in your marketplace suffer at all because you've got an influx of too many sellers, or buyers?

In a seed round, I think it's safer to prove engagement and the ability to create a scalable process, than to load up on customers. This way, you know that you've got enough in place not to fall apart when you do grow [...]

Towercutting with goTenna Thisisgoingtobebig Jul 17, 2014

I'm excited to share that goTenna, a Brooklyn Bridge Ventures portfolio company, has launched the presale of its point to point communications device.

Have you ever texted anyone in the same room and thought about the infrastructure behind it--about where that message travels to, the great distances it gets bounced around, all to travel ten feet, in just milliseconds.

It's pretty magical.

It's also pretty stupid, technically speaking.

When you can literally see someone else's phone, even a three year old would suggest that the message should go from point A to point B on a pretty straight line.

There's a lot of other things about telecommunications that a three year old would probably agree with--that no one should ever be able to read your message, except the person who sent it to you.

And if you go on a remote camping trip and one of you gets lost on your way to the hole in the ground behind a tree, you should be able to contact each other if you both have phones.

These situations--the lack of coverage in emergencies, the need for privacy, and the ability to offload point to point communications--make goTenna a pretty handy device to have around. It is a small piece of hardware that syncs up with your phone, freeing it from the carrier network and enabling point to point communication.

But handy isn't why I backed it. Handy is the first step to gamechanging.

I met Daniela Perdomo over a year ago at SXSW. I was scanning the SXSWSocial network for anyone that had tagged themselves "Brooklyn". Daniela's profile came up and I noticed that she was involved with NYC Resistor, the hardware hackerspace that Makerbot came out of. I tweeted at her in response to a post about cheese.

@danielaperdomo That is serious! BTW... Putting together a little dinner of folks Sun night. Would love to meet a Bklyn maker/Resistor.

— Charlie O'Donnell (@ceonyc) March 9, 2013

We agreed to meet up and she told me what she was working on. I had no ide [...]

My Role as a VC: What I am and what I am not. Thisisgoingtobebig Jul 16, 2014

There's been some writing about how VCs and founders interact with each other and it inspired me to take a step back and reflect on what my role is supposed to be with regards to the investments I make and the founders I deal with.

Here's what I came up with...

First, I have a fiduciary responsibility to my investors who entrusted me with money in the first place. If I don't do right by them, then I have no money, no fund, no career, full stop. They count on me to be a good steward of their capital, and to take reasonable and appropriate risk with the expectation of a certain level of returns.

That also means that I need to act in a way that ensures my ability to get future opportunities to invest their capital in attractive deals. Rather than using my investors as an excuse to be short-sighted and screw over the first entrepreneur that works in the door, I need to balance their need for return with the long term viability and reputation of the fund and the firm. I believe that ethics and opportunity for investors will go hand in hand over the long term--and opportunity drives returns.

It also means I need to be really careful about how I'm spending my time. I want to be helpful to a lot more people than I'm able to spend time with, but I can't distract myself too much from this clear and primary mission.

Second, I am a provider of capital--so my check needs to clear and I need to be transparent about when and if I plan to invest, or if entrepreneurs should look elsewhere.

Third, I try to help my teams be the best company managers they can be--because ultimately, no matter how much help I can be, it's up to them to do most of the heavy lifting. That does not mean telling them how to run the company, but to help them create a management discipline--a framework for thinking about problems and solutions. I am there, along with other investors and board members to audit their thinking--to make sure they were considerate about the plans *they* came up w [...]

The Gentle and Visual Guide to Startup Marketing Onstartups Jul 8, 2014

There are two things in my professional life that I'm passionate about.

Reservationhate Thisisgoingtobebig Jul 7, 2014

Just to be clear, Reservationhop--the line jumping fake name reservation making most hated startup idea on the internet right now--is not a particularly good idea.

- It's too small of a market with too little monetization per transaction.

- It's rather easily foiled by ID checking.

- It doesn't provide restaurants with any value.

It is not, however, any more morally bankrupt than what a lot of other startup people fawn over. I'm finding all the ethical hemming and hawing over this to be rather inconsistant.

Let's recap...

Napster was totally cool because you got free music, which all us regular people and poor college kids love, while sticking it to The Man (record labels). Totally illegal, but I don't remember too many internet people questioning its ethics.

YouTube was totally cool because "Look, video! And no plugin!" Remember all those things you haven't seen in forever? Yeah, all here. Yay free copyrighted material! Did I miss the ethical posturing at the time?

And when affordable housing advocates complain about Airbnb, they're just standing in the way of innovation, right? Screw the law!

Tor's cool, right? Go Tor! IP masking FTW! Because it's not like we're all using it to watch things we're not legally allowed to because of broadcast rules.

And damn that Supreme Court for forcing Aereo to pay for TV rights the same way all the other TV providers need to!

But, God forbid anyone should mess with Opentable. Jesus, Mary and Joseph! People are up in arms over Reservationhop--the service that sells off hard to get reservations made under assumed names. It's ruining the restaurant business! How dare they!

Ok, let's get something straight. No one funded this thing. There's no board. It's just a guy poking holes in a system testing out demand.

We normally ok this kind of startup tactic. "Don't ask for permission. Ask for forgiveness."

We tell startups to poke the bear and become a thorn in the side of big companies so that th [...]

Lessons learned adding messaging to a notes app (Guest Post)

Lessons learned adding messaging to a notes app (Guest Post) Andrewchen Jul 1, 2014

[Today we have a guest post from Alex Schiff, who's a co-founder and CEO of Fetchnotes, which makes simple, smart tools that help people work together and get things done. Fetchnotes graduated from Techstars Boston in November 2012, and is currently a team of 5 in Cambridge, Massachusetts. -Andrew] Alex Schiff, CEO of Fetchnotes: There’s a […]

Joe Perez, Founder of @tastemade, On What Makes a Great Product Manager & More Bothsidesofthetable Jul 1, 2014

Update: Bothsides TV is now available on iTunes, Soundc […]

Want to Know What Marc Andreessen’s Magic on Twitter is? Hint: It’s Not Tweetstorming Bothsidesofthetable Jun 30, 2014

By now almost everybody knows that Marc Andreessen has […]

Why Venture Capital is So Much More Compelling Now Bothsidesofthetable Jun 29, 2014

It’s not hard to find people willing to write the […]

The Power of Getting the Band Back Together

The Power of Getting the Band Back Together Bothsidesofthetable Jun 22, 2014

Startups are hard. You’ve heard that a million ti […]

Officially Announcing Bothsides TV Bothsidesofthetable Jun 25, 2014

For 2 years I interviewed VCs & founders for a show […]

The Strong Rejection Thisisgoingtobebig Jun 23, 2014

When I turn down the opportunity to invest in a startup, I really turn it down.

I try and say exactly what I don't believe will happen, or why I don't believe in what you're doing. In essence, I'm setting myself up to either be spectacularly wrong or to be right.

The last thing I want is to not have a view on the space. My job is to have views--because not making a bet is making a bet. If I don't have clarity on something, it means that I don't think the space and the opportunity size is big enough to get clarity.

What I never say is "I love what you're doing, but...". Sugarcoating isn't helpful to entrepreneurs. You never want to get a rejection and scratch your head over why the person turned you down.

I'll tell you right now that I don't think a new form of video messaging is either a) something that consumers really want or b) a great way to make money because monetization just creates friction in the communication process.

I could be 100% wrong about that, but that's my bet. We'll know in a few years if I was right or wrong. In my mind, uncertainty should never be a reason for an early stage investor to turn a deal down. The world is uncertain and making bets in an uncertain world is what risk is all about.

So, I'm certain that I'll either be certainly right or certainly wrong--but I'm always certain.

I've been helping to syndicate a few opportunities lately and what has really surprised me was how wishy washy the turndowns were. Entrepreneurs are sending me back notes saying "They turned it down, but I'm not sure why." It's unclear what piece of information they were lacking or how someone could have gotten them over the hump. It doesn't help them improve their pitch or adjust their model. It just feels like the VC wasn't that interested in the first place and so they're not sure what the interest was in the first place. If you take a smart home pitch, and you turn it down because you're not certain how the smart home segment will play out [...]

Why I Doubled Down on YouTube Investments with MiTú

Why I Doubled Down on YouTube Investments with MiTú Bothsidesofthetable Jun 20, 2014

Yesterday MiTú Networks announced that Upfront Ventures […]

How to Kick Start Your Community’s Startup Scene

How to Kick Start Your Community’s Startup Scene Bothsidesofthetable Jun 8, 2014

I just returned from 3 days in Cincinnati including att […]

Retention is King (Guest Post)

Retention is King (Guest Post) Andrewchen Jun 3, 2014

This is a guest post by a friend of mine on retention. Jamie Quint is Managing Partner of Quint Growth, a full-service growth consultancy that works with companies like Twitch and Hipmunk. Previously, he was the PM of Growth at Swipely and a Y Combinator alum. -Andrew Jamie Quint: There are too many companies asking, […]

The Business of Who Makes is Changing Thisisgoingtobebig Jun 19, 2014

The 1970's was a boom for minicomputers. Minicomputers were "midrange" machines that were used in all sorts of industrial applications--manufacturing process control, telephone switching and to control laboratory equipment.

"In the 1970s, they were the hardware that was used to launch the computer-aided design (CAD) industry," according to Wikipedia.

"The first commercial applications of CAD were in large companies in the automotive and aerospace industries, as well as in electronics. Only large corporations could afford the computers capable of performing the calculations. Notable company projects were at GM (Dr. Patrick J.Hanratty) with DAC-1 (Design Augmented by Computer) 1964; Lockheed projects; Bell GRAPHIC 1 and Renault."

Those were basically the makers of the time--only big Fortune 500 companies had the resources to create at scale, so if you were building tools for makers, it was a B2B sale involving a lot of big iron.

Microcomputers gave way to desktops and software made great advancements. It is perhaps not surprising that both Autodesk and Adobe--the two software companies probably most responsible for digital first creation, were both founded in 1982. Their tools brought creation ability out of labs with expensive hardware to masses of professionals in both large and small companies.

Still, users of creation tools were mostly professionals. It takes a fair bit of skill to be adept at Adobe Illustrator or to use AutoCAD. What we're seeing now is a third shift in the maker market--to individuals and hobbyists, i.e. everyone. Quirky helps you develop and market your product ideas. Companies like Makerbot and Shapeways bring physical production to the masses. Etsy is a marketplace for things you make.

There are also places to deposit what you've built or designed--Thingaverse is a core component of the 3D printing ecosystem. GrabCAD helps CAD designers collaborate and leverage off of each other's libraries. Splice is doing similar work in t [...]

How early should you connect to a VC? Here's some data. Thisisgoingtobebig Jun 16, 2014

How long does it take from first meeting a VC to getting cash in the bank?

That's an interesting question. Theoretically, someone could meet you, sign your document, and write you a check for deposit that day, but that's not how it usually works.

It's also not the best way to create a helpful syndicate of investors that share the founder's vision for the company.

Examining the actual data not only gives me some insight into my close process, but it helps me calibrate around relationship building. If all my deals came as intros from trusted connections that I know for years versus at founder pitch events that's interesting data. I might decide that I'm not mining one side or the other, or I need to redouble my efforts to build relationships with the people I know longest.

It also helps me figure out who I should be spending my time with. If it turned out that the best experiences I've had as an investor come from knowing someone a long time, I might go to events that are more around a specialty, like software development or design. In this case, I'd have the benefit of knowing someone long before they created a company. If you meet someone at a pitch event, they've already got a company and they're looking to close as quickly as possible.

In fact, that's what I tend to do--at least, what I say that I do. The way I choose conferences and events, and my strategy once I'm there, is based more around who I'm going to back two years from now than it is who is raising now.

But does the data play that out? How long in advance did I know someone, or know about a deal before I wired money? What led me to knowing about that deal in the first place and when did that event happen?

I went back across the 21 investments I've made both at First Round and at Brooklyn Bridge Ventures--a period that dates back to January 28, 2010, when I closed on Backupify. I looked at how I got the deal, when I first met the company, when it closed, and then what connection I ma [...]

Brooklyn Bridge Ventures invested in Ringly because being present is fashionable Thisisgoingtobebig Jun 10, 2014

A year ago, I wrote a post about how I was trying to keep my phone away during meals--No Phone with Food. These days, we've got so much that can distract us, being present has become a rare feat. I've tried to stick to it, but it's hard. I run my own business and I try and make myself available whenever my entrepreneurs need me. I also have a lot of family responsibility--with parents getting older and my grandmother making her way ever closer to 100, there are a few important folks I always want to stay connected to.

The problem is that the phone is a rabbit hole. With just a few app installs, the notification screen quickly becomes short attention spam theater. Sometimes, I wind up in Twitter or Instagram on my phone without even remembering why I pulled the phone out in the first place.

For a guy, it's just too easy. With my phone in my pocket, it might as well come out of a holster.

For women, its worse. Either you dump your phone into the black hole known as your bag, never to be heard from again, or it sits right there on the table as the third wheel. There's nothing more distracting than having a phone buzz on your table or needing to walk around with it all the time.

It says a lot about the evolution of mobile technology. Cameras, for example, got smaller and better to the point where we didn't need a seperate device--and they just wound up in our phones. Same thing for GPS. Now, your phone is everything to everyone--a device you're always attached to. What's lost in that process, however, is matching right interaction with the right time and place. That's part of the promise of wearables, the connected home, and devices in cars. I don't need a phone to provide me every notification and every tool all the time, but different devices have their difference place in my life.

Ringly is a platform for fashionable wearables, enabling them to filter your world for what you care about. It's all about getting notifications in the right moment, without [...]

A Sign of the Times: Why Saving the Kentile Sign is Important #savekentile Thisisgoingtobebig Jun 8, 2014

There's a 60+ year old sign in Brooklyn leftover from a company that went bankrupt years ago. The current owner of the property wants to take it down and has every right to do so.

So what's the big deal?

The Kentile Floors sign has become a mainstay of the Gowanus area. F train riders pass by it everyday on the way to and from work. It has its own Twitter personality. There are Tumblr accounts of people taking pictures of it everyday as a routine. It has even made it to a t-shirt designed by a company specializing in iconic Brooklyn images. Not only does it give people a sense of familiarity and comfort in a constantly changing city, but it serves as an important reminder of Brooklyn's history as an industrial community--a place where things got made. This is especially important as Brooklyn appears on the verge of an entrepreneurial explosion--one rooted in the maker and craft movement.

Brooklyn is attracting a generation of entrepreneurs who never saw Brooklyn in its industrial heyday, but feel like the borough is uniquely positioned and a historically fitting place to produce their products and serve creative communities. Makerbot has a factory in Industry City. Maker marketplace Etsy has agreed to take a huge space in the new Dumbo Heights complex. Refactory is trying to create an end to end process from design to manufacturing for hardware on Sackett Street. Distilleries, bakeries, ice cream manufacturers--all across the borough, it seems that someone is making something. Even the old Pfizer headquarters, active as recently as 2008, is now home to the production of everything from microchips to pickles. In the Navy Yard, they're making body armor to product our troops and solar streetlamps to light our streets.

So while it's easy to think that the Kentile sign is a relic of a bygone era, it may actually be the symbol of a bright future for a growing manufacturing base. It is a reminder to those who dare to create that yes, things can get made here-- [...]

The Most Important Thing to Do Before Building Your Startup Onstartups Jun 3, 2014

We failed.

After 6 months poring over the code quality and refining the design of our mobile app, my partner and I finally launched it in the app store and the downloads started coming in.

Then after a few days, BOOM. We got punched in the face by reality. No users returned to the app. This was a devastating shock, since most people we spoke to were excited about the idea. Our app allowed you to take photos and ask questions to learn about what you were looking at. It had all the traits of the most-hyped startup trends that year: mobile, social, local. It was early 2011.

5 Mistakes Every Startup Founder SHOULD Make Onstartups Jun 2, 2014

“It’s fine to celebrate success but it is more important to heed the lessons of failure” - Bill Gates

Much digital ink has been spilled trying to caution startup entrepreneurs against making mistakes. Type "mistakes entrepreneurs make" into Google and you'll find thousands of articles, sternly forewarning against the most prevalent pitfalls and errors that stand between you and your startup's success.

Why Your Startup is More Likely to Succeed if You’re Authentic and Passionate

Why Your Startup is More Likely to Succeed if You’re Authentic and Passionate Bothsidesofthetable May 19, 2014

In my Twitter bio is says that I’m “looking […]

Why consumer product metrics are all terrible

Why consumer product metrics are all terrible Andrewchen May 13, 2014

The reality of consumer products I’ve never met an entrepreneur who’s happy with their metrics. Whether you’re talking about sign up rates, retention rates, or how often your users create content – on face value, the metrics always seem terrible. The secret is, almost everyone’s consumer product metrics are horrible, so once you start to […]

Founders. Run. Amok. It Starts With a Term Sheet. Thisisgoingtobebig May 27, 2014

Last week, for just the second time ever, I passed on an investment opportunity because of the terms of the deal--both the price and the legal structure of the agreement. It was a company whose product I believed in and whose founder I liked, but a firm lobbed in a term sheet at a price 33% higher than what I had offered using a very light agreement meant for a much earlier stage company. This was a company that had successfully bootstrapped itself to real revenues, employees and cashflow and I thought it deserved the structure of a going concern, not a flier.

At first, I thought I was making a mistake. After all, I understood that when these types of deals pop, the initial price you pay tends to matter very little--and it matters much more that you're in the deal versus not. I remember back in the Union Square Ventures days when we had an internal debate over the price of the first round of Indeed. A billion dollars later, it didn't much matter.

Then, I read about the idiotic comments made by a co-founder of Rap Genius...

which is not long after the recent debacle at Github...

and then there's the nightmare at RadiumOne...

Founders. Run. Amok.

And even when they're not disrespecting murder victims, creating hostile work environments for women or literally beating women, they're running amok in other, less violent ways... raising over $300 million, flaunting the epic winning, only to watch the whole thing go up in flames, like at Fab...

...or sticking your head in the sand while fraud occurs on your platform, like the way Indiegogo watched Healbe Gobe get torched in the media. They even tried to change their Terms of Service in the middle of the alleged scam.

No wonder people are questioning where the boards of these companies were.

Founders. Run. Amok.

Three of the aforementioned companies have taken investments from Andreessen Horowitz--probably the hottest firm on the planet right now. They got that way due in large part t [...]

Tinybop and Crafting a Brand Thisisgoingtobebig May 22, 2014

I could spend a lot of time writing a long diatribe about what it means to create a brand, or I could just show you three videos that Tinybop, a company I seeded in 2012, made as part of the marketing for their new app, Plants.

Consider the bar raised... As a biased investor, I not-so-humbly submit that this is the most creative thing any startup in New York City has ever produced as part of a launch:

Plants by Tinybop from Tinybop on Vimeo.

Paper to Plants: Behind the Scenes from Tinybop on Vimeo.

Paper to Plants from Tinybop on Vimeo.

What Something Isn't Worth Thisisgoingtobebig May 16, 2014

Dollar Tree.



If the Bloomberg story is right, all three of these companies are now worth about $10 billion. I don't know about you, but I'm pretty sure I'd rather own Uber than all of the crappy Dollar Tree stores or a peanut butter company.

Plus, I'm more of a almond butter guy anyway.

I don't totally understand why people get obsessed with valuations--especially given that the complete lack of context around a deal. There are so many factors that play into valuation that the big headline number is completely meaningless.

First off, if I buy one billionth of your company for a dollar, does that mean your company is worth a billion dollars? Technically, that's exactly what it means, if you price your company's shares on the value of the last trade. That doesn't seem reasonable, though, does it. When does that become meaningful? At 1%? 5%? I'm not totally sure.

What about if you think about how much money the person writing the check has? When Apple bought beats for less than 2% of its cash, do you think they were really paying that much attention to the price? Think about what you could buy for 2% of the cash in your bank account.

If the investment in Uber was $500 million put in by a middle east oil family who has $50 billion in assets, is 1% even meaningful for them?

And what return are they seeking? If I'm looking for a 10% annual return, what I could be saying is that Uber is going to go public in three years at a valuation of about $14 billion. That doesn't seem particularly unreasonable. If I was looking for a 30% annual return, and I invest. I'm saying that Uber is going to be worth $22 billion in three years. That's obviously a bigger future.

We don't know the terms of this deal. If the company is getting preferred shares, they're also the first money out--so they don't need it to be worth $10 billion to get their return. Maybe there's a dividend that starts kicking in. You don't know.

Plus, there's the quest [...]