The Rise of the New Edtech

Edtech used to be this sleepy, backwards corner of the technology industry where idealistic entrepreneurs with fantastic ideas and even fantastic products would try to make enterprise sales to impossible educational bureaucracies – I saw this firsthand when I sat on the Wharton Technology Advisory Board, and we were relatively one of the best technology organizations out there - only to burn out or sell for disappointing outcomes in the best cases. 

In recent years though a couple of factors have pushed ed-tech forward to the point where LinkedIn would pay $1.5Bn to acquire Lynda.com:

Why Innovation In Payments Is So Rare

I think a lot about payments, even though I haven't worked in the sector for over five years. I just think it's mind-blowingly cool that this abstract concept we call money manages to work, everywhere around the world, in mutually recognizable forms, not with perfect interoperability but damn near close to it on a local level, with universal understanding that it is simultaneously a medium to measure value (a price); a medium to transact (making a purchase); and at a minimally higher level of financial literacy, a value store (an account).

Yet as cool as a concept as money is, retail payments in the US haven't changed all that much since the advent of credit cards. Your options are basically check, card, or cash. I was reading an interview this morning that StrictlyVC did with Todd Chaffee of Institutional Venture Partners, that goes a long way towards explaining why.

How to Handle VC Rejection

"I see an opportunity here, but it wouldn't be an opportunity if everybody saw it."

Brand Is the Key to Scaling

The startup world loves to talk about the ability of a company to "scale." "Scale" doesn't have a precise definition, but it roughly means growing the business really big, with increasing, non-linear returns on headcount and equity capital. There are many levers for scaling - product, marketing, customer service, partnerships, etc - but they all boil down to one thing, regardless of product or industry: brand.

14 Ways VC Fundraising Is Like Dating

A lot of first-time entrepreneurs scrutinize the web-o-sphere and the blogs of folks wiser than I like Fred Wilson and Mark Suster for advice on how to come up with the perfect pitch to VCs, but they miss the most basic truth: VCs are people too, and people are all about relationships. So, in honor of February 14, Valentine's Day, I've put together a list of 14 ways VC fundraising is like that oldest of human relationships: dating (or love, if you want to get all historical on me):*

1. You start with coffee.
2. There are lots of "dates."
3. If you're not interested you try to let the other side down gently - "I don't want to lead you on."
4. The side that starts off aloof can be the side that ends up falling in love - and the one that gets its heart broken.
5. Begging the other side to give things another chance rarely works.
6. You can't reason your way into a relationship (aka He's Just Not That Into You)
7. There may be numbers involved but ultimately it's based on a feeling.
8. Timing is everything - "This just isn't the right time for me to get into a relationship."
9. "You remind me of an ex" (another company/investor that left a bad taste).
10. It's not about one side choosing the other but about both sides finding the right match.
11. You hope it's about more than the money.
12. The holy grail is a true partnership.
13. When the relationship is ready to be consummated there is paperwork to sign.
14. Moving too fast often produces bad results.

Happy Valentine's Day!

* Please have a sense of humor when reading these. They were written to play off of well-known stereotypes about dating rather than any opinion of how dating should be.

Knod.es: A Tool to Find the Most Relevant Person in Your Network to Talk to About Anything

This story about using Knod.es is pretty awesome. Knod.es (and SnapGoods) was co-founded by a friend and classmate of mine from Brown, so I'd heard about it, but I never really got it until I read this post. These use cases blew my mind.  It's exactly what you wish you could do with your social network but couldn't if you were a mere mortal without a million Twitter followers. I will follow up w/ some of my own use cases once I get an invite code.

What Makes A Startup Successful? 14 of the most interesting trends identified by the Startup Genome Report

Every once in a while an article comes along that is just so awesome you want to quote it in its entirety.  I haven't read through the methodology so take all these findings with a grain of salt.  The most interesting finding for me was that "balanced" teams (one technical founder and one business founder) significantly out-perform business-heavy and technical heavy teams.  To often I think technical founders question the value of a business co-founder, to their detriment.  Build it and they will come only works in the movies and exceptional cases.

The below is quoted directly from the TechCrunch article "What Makes A Startup Successful? Blackbox Report Aims To Map The Startup Genome"  the Startup Genome blog (it looks like TechCrunch ripped this off as their own):

• Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
• Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.
• Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.
• Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)
• Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.
• Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.
• Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.
• Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.
• Most successful founders are driven by impact rather than experience or money.
• Founders overestimate the value of IP before product market fit by 255%.
• Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.
• Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.
• Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.
• B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.

The full report is available here.

Notes on the August New York Tech Meetup (#NYTM)

I finally got to go to the NYTM yesterday, for the first time since December.  I can't quite remember the format from last time, but I really liked this one: domes were done in groups of three, making it easier to remember your questions; big companies were allowed to present their tech innovations (although the focus remained on startups, as it should); the event featured a really fun hack demo of a web-controlled helicopter (that was not allowed to go higher than 10 feet to avoid setting off the sprinkler systems, which apparently cannot differentiate helicopters from fires); and the happy hour was held in a hall on site, which allowed presenting companies to set up "booths" for interested members of the public, and avoided the loss of people that shifting venues inevitably entails.  

Here are my notes on the presenters, taking in real time on my dinky little QuickOffice app on my Android phone.  Audience questions were jotted down and have the presenters answers in the same bullet point, following the end of the question.  I may edit and/or add more thoughts later if I have time: