Once in a while I find myself in a product or strategy or biz dev discussion at a startup which goes something like: “we are doing xyz to defend against ”. My reaction is to ask whether xyz is also part of what the startup was trying to build in the first place. If the answer is no, then I will argue strongly that they shouldn’t do it at all. Why? Startups have very limited resources. They succeed by putting all of those resources into a singular effort. That means being on the offense and bu...

Once in a while I find myself in a product or strategy or biz dev discussion at a startup which goes something like: “we are doing xyz to defend against ”. My reaction is to ask whether xyz is also part of what the startup was trying to build in the first place. If the answer is no, then I will argue strongly that they shouldn’t do it at all. Why? Startups have very limited resources. They succeed by putting all of those resources into a singular effort. That means being on the offense and bu...

When Larry Page became CEO, I set out my hopes for how Google might evolve its role in the Internet marketplace under his leadership. In particular, I was hoping that Larry would be:Supporting independent third party services instead of either trying to acquire them or competing head on with them. Figure out how to succeed by making others succeed.While the purchase of Zagat is a rounding error for Google it still shows that Google is going in the exact opposite direction. As I tweeted yester...

When Larry Page became CEO, I set out my hopes for how Google might evolve its role in the Internet marketplace under his leadership. In particular, I was hoping that Larry would be:Supporting independent third party services instead of either trying to acquire them or competing head on with them. Figure out how to succeed by making others succeed.While the purchase of Zagat is a rounding error for Google it still shows that Google is going in the exact opposite direction. As I tweeted yester...

There were a lot of really interesting comments to my question about retail trends earlier this week. Thanks to all who contributed to the discussion. As I am thinking about how to organize all of these, I am reminded that it is often (always?) a good idea to try to reason from first principles. In other words, what are the underlying characteristic of the Internet that are driving these trends? I intentionally said “Internet” (as opposed to “web”) because I mean for that to be an all encompa...

There were a lot of really interesting comments to my question about retail trends earlier this week. Thanks to all who contributed to the discussion. As I am thinking about how to organize all of these, I am reminded that it is often (always?) a good idea to try to reason from first principles. In other words, what are the underlying characteristic of the Internet that are driving these trends? I intentionally said “Internet” (as opposed to “web”) because I mean for that to be an all encompa...

I have written previously that given the huge scale of the Internet, services that might historically have been considered a feature can now be companies. There is a critical success factor though to achieving Internet scale that I think is being widely ignored: intentionally keeping a service “underdetermined." What does that mean? A service is underdetermined if it allows for many use cases including ones that were never possibly anticipated during the creation of the service. Conversely, a...

I have written previously that given the huge scale of the Internet, services that might historically have been considered a feature can now be companies. There is a critical success factor though to achieving Internet scale that I think is being widely ignored: intentionally keeping a service “underdetermined." What does that mean? A service is underdetermined if it allows for many use cases including ones that were never possibly anticipated during the creation of the service. Conversely, a...

Weekends seem to bring with them at least one or two good blog debates. This last one was no different with Chris Dixon’s post titled “SEO is no longer a viable marketing strategy for startups” and Danny Sullivan’s response “SEO remains a viable marketing strategy for anyone.” I am not going to comment on the merits of SEO per se (check the comments on both posts + twitter for more on that), but rather on the distinction between strategy and tactics. My own history trying to understand strate...

Weekends seem to bring with them at least one or two good blog debates. This last one was no different with Chris Dixon’s post titled “SEO is no longer a viable marketing strategy for startups” and Danny Sullivan’s response “SEO remains a viable marketing strategy for anyone.” I am not going to comment on the merits of SEO per se (check the comments on both posts + twitter for more on that), but rather on the distinction between strategy and tactics. My own history trying to understand strate...

Historically in the software business high gross margins were considered essential. It is not clear to me that the same logic will apply for cloud-based services. Their cost structure might wind up being quite different. Much smaller development teams can accomplish amazing things on top of a cloud stack substantially reducing the fixed cost component. On the other hand, COGS may increase significantly as the underlying cloud services are paid on a variable basis. With that in mind, it could ...

Historically in the software business high gross margins were considered essential. It is not clear to me that the same logic will apply for cloud-based services. Their cost structure might wind up being quite different. Much smaller development teams can accomplish amazing things on top of a cloud stack substantially reducing the fixed cost component. On the other hand, COGS may increase significantly as the underlying cloud services are paid on a variable basis. With that in mind, it could ...

A while ago I wrote a post where I argued that it can be a good idea for entrepreneurs to go for a transformation instead of grinding it out. But that post was a generic consideration of risk/reward. Recently I have noticed a trend though that at first seems to perfectly illustrate this idea. A number of consumer sites that were trying to build their own brand and destination are switching to a whitelabel business model instead. This transformation is motivated by slow growth of the consumer ...

A while ago I wrote a post where I argued that it can be a good idea for entrepreneurs to go for a transformation instead of grinding it out. But that post was a generic consideration of risk/reward. Recently I have noticed a trend though that at first seems to perfectly illustrate this idea. A number of consumer sites that were trying to build their own brand and destination are switching to a whitelabel business model instead. This transformation is motivated by slow growth of the consumer ...

Chris Dixon has an intriguing blog post titled “Timing Your Startup” which ends with the following quote:One way to mitigate timing risk is to manage your cash accordingly. If you are trying to ride existing trends you should ramp up aggressively. If you are betting on emerging trends it is better to keep your burn low and runway long. This takes discipline and patience but is also the way you hit it really big.I generally subscribe to the same theory. But I have recently heard some people I ...

Chris Dixon has an intriguing blog post titled “Timing Your Startup” which ends with the following quote:One way to mitigate timing risk is to manage your cash accordingly. If you are trying to ride existing trends you should ramp up aggressively. If you are betting on emerging trends it is better to keep your burn low and runway long. This takes discipline and patience but is also the way you hit it really big.I generally subscribe to the same theory. But I have recently heard some people I ...

Yesterday we had our portfolio company summit with the CEOs of most of our active investments in our office. It is always a really fun day because there are great discussions about a far ranging set of topics from hiring to business models. This year as an opener we went around the room and everyone talked briefly about a lesson learned in the last 12 months. There were a ton of really good insights there and some really funny ones, such as “it is better to have a hole than an asshole” (about...

Yesterday we had our portfolio company summit with the CEOs of most of our active investments in our office. It is always a really fun day because there are great discussions about a far ranging set of topics from hiring to business models. This year as an opener we went around the room and everyone talked briefly about a lesson learned in the last 12 months. There were a ton of really good insights there and some really funny ones, such as “it is better to have a hole than an asshole” (about...

I started out in business selling development services. OK, so that’s hugely glorified. I was a teenager desperate to get my driver’s license in Germany where that is a costly process (lots of mandatory lessons). So I figured out how to make money programming custom applications for people, including a driving school. Ever since then I have had a love/hate relationship with sales. The hate portion is easy to understand for any engineer. The things you have to do in selling run counter to a lo...

I started out in business selling development services. OK, so that’s hugely glorified. I was a teenager desperate to get my driver’s license in Germany where that is a costly process (lots of mandatory lessons). So I figured out how to make money programming custom applications for people, including a driving school. Ever since then I have had a love/hate relationship with sales. The hate portion is easy to understand for any engineer. The things you have to do in selling run counter to a lo...