When It Comes To Television Content, Affiliate Fees Make The World Go ‘Round by Bill Gurley
More often than not, we here in Silicon Valley are prone to idealism. We see a scenario the way we want to see it, and make predictions that fit our view of how we think the world should work, or perhaps even how we would like the world to be. This is especially true when it comes to technology. Outsider “luddites” who do not immediately grok the remarkable disruptive power of our latest and greatest technologies are doomed to the business trash heap – driven there by obsolescence and an obstinate refusal to accept their fate. Often times, our version of them “accepting their fate” would require them to abandon everything they know, walk away from the majority of their revenue, and terminate 80% of their employees. But hey, that’s their problem, not ours. We love disruption. It serves our purpose.
This is part of my startup advice series. This post isn’t going to be popular. I’m sure of that. That’s OK. It’s still important advice for startup founders and something that I’m passionate about. And I care more about the debate than trying to be popular. And it’s important because it’s true.
I never hire job hoppers. Never. They make terrible employees. I can tell that the heat is going to fly from people on this post. It all started yesterday when Jason Calacanis sent a Tweet telling GenY’ers / Millennials or whatever people under 30 want to be called these days that job hoppers look like “flakes.” I simply sent a supporting Tweet saying that I agreed. He specifically called them “trophy kids” a reference that this is the first generation in which everyone got a trophy as Bill Sledzik outlines in this posting, “Dear Millennials: Your Parents Lied to You.” One simple Tweet and I started getting flack (Trev, if you’re a founder and have tried to build 3 companies you get a carve out) on Twitter (Sumit, your business school professor was wrong).
Never Hire Jobs Hoppers. They Make Terrible Employees by Mark Suster
I get asked a lot about being a woman in technology and its various niches–social media, open source, entrepreneurship, blogging. Interviewers want to know whether or not things are getting better for women, why there aren’t more women here or there, what women should or shouldn’t be doing, and what the future holds for those of us in tech who happen to have the XX chromosome. When I get these questions, I never know what to say. Being a woman doesn’t make me an expert on gender. I can only draw from my own subjective experiences during what’s been a very charmed career. But folks keep asking. So, here’s my official line on the topic, which I sent off to an interviewer just this week.
In both offline and online life, women are more visible, respected, and accomplished than they’ve ever been before. At the risk of sounding like a Pollyanna, I believe now is a golden time for women in technology, a time when an awareness of the need for diversity in our field is at its highest. Conference organizers, editors, journalists, and CTOs are desperate to get knowledgeable women onto their speaker rosters, mastheads, source lists, and staff. (I know, because they ask me!) There are many opportunities for those of us who don’t look like Bill Gates, but it’s up to us to make ourselves visible, eligible, and take them.
Keep Reading A Word about Women in Technology by Gina Trapani
Here is an interesting article on whether or not Microsoft’s “.Net” technology is attracting the interest of the venture capital community.
As a platform company, Microsoft has reaped huge benefits from the formation of vibrant application opportunities on top of its OSes. In the 80’s, the Microsoft desktop OS was the breeding ground for such successful application companies as Lotus, Borland, Adobe, and many more. Many of these companies were very successful stand-alone public companies. In the 90’s, many enterprise software startups were successful by betting early on Microsoft NT. IPO’s resulted here as well.
Keep Reading Do VCs Help In Building A Technology Platform? by Bill Gurley
From what I see, most technology startups are founded by quite good (but not great) software developers. Founders are seldom very, very good developers because the very top percentile of coders are usually too geeky, socially inept, and bad at making and understanding what normal people want. But still, startups are usually founded by developers that are pretty good at writing software but are also good at program management. What is program management? Much of program management is about prioritization: it’s about creating an idea, and allocating your own or other people’s time to making it happen. Product Managers worry about the user’s needs and building “value”. If you’re not good at being user-focussed ideas and prioritization, you’ll be a bad PM, and you probably won’t ever get to the point of being a founder.
So anyway, the stereotypical startup begins with a program manager / developer hybrid that makes a proof-of-concept that people really like. Then she thinks to herself: I need more developers to make this real.
A few people have asked me to try and define the perfect startup organization chart. I don’t believe that one exists. Every team configuration is different. But I do have more insight into understanding your startup team. This time I thought I’d try and address engineering talent. Often I’m asked by startup CEO’s about how to best build an engineering team. I have much experience in this domain.
Because more technology people probably read startup blogs I’m guessing this post will come under more scrutiny. The terms “CTO” and “VP Engineering” have such stigmas associated with what they are that I’m sure some people will feel uncomfortable with the definitions I’ve put forward. Still, I believe I’m offering an accurate representation of the ideal configuration of the main technology leaders.
Keep Reading Want to Know the Difference Between a CTO and a VP Engineering? by Mark Suster
How I Invest by Roger Ehrenberg
As part of my year-end reflection and 2010 road map, I have been thinking deeply about how exactly I invest. How do I pick the companies and sectors on which to focus? I quickly realized that the principles I applied in the math of derivatives are the same ones I use as a venture investor. In short, I look at everything as a limit: “What does this (company/sector) look like at infinity?”I see most progress as being asymptotic, e.g., there is a period of accelerated development and rapid growth, beyond which gains are much harder and more costly to achieve. The goal is to find businesses at the early part of the rapid growth phase, but where they are close enough to rapid growth that they don’t require decades of funding to get there. For instance, if you had invested in machine learning in the 1960s (or natural language processing in the 1980s) back when it held so much promise, you’d have gone bust many times over waiting for commercial success. Does it mean that machine learning and NLP are unattractive fields? No. But if you were 20-40 years early then I’m sure it seemed that way. My goal as an investor is to avoid such delayed gratification.
While other investors invariably have their own language to describe this exercise, I find calculus to be a helpful tool for testing one’s assumptions around a particular investment and for providing valuable discipline to avoid “style drift.” Though I make the occasional investment to learn about an interesting business or to work with a particular group of investors, my investing is largely characterized by the discipline noted above.
A lot of VCs dress casually, speak casually and encourage the companies in which they invest to have casual board meetings and casual discussions with investors. They say things like, “We’re part of the team with you and we’re building this together, so no need for formal behavior, formal thinking, or unnecessary preparation.” This would all be terrific—if it were actually true.
In reality, the entrepreneur is building the company, and I’ve yet to see a VC who shows up in the company’s office at 8 am and works until 11 pm 7 days/week, so no: they are not “part of the team”. More importantly, VCs invest other people’s money into their companies and have a strong fiduciary responsibility to make sure that the entrepreneurs run their companies properly. Sure, casual board meetings might be fine as long as the company is delivering terrific results. However, at the first sign of trouble, I hear things like: “The founder is not really capable of being CEO. He doesn’t even present critical information in an organized fashion at the board meeting.” Well, maybe he would have done that had you not instructed him to “keep things casual”.
Keep Reading Four Things Some VCs Do That I Don’t Like by Ben Horowitz
Products with so-called networks effects get more valuable when more people use them. Famous examples are telephones and social networks.
“Complementary network effects” refer to situations where a product gets more valuable as more people use the product’s complement(s). Two products are complementary when they are more (or only) useful together – for example, a video game and video game console, or an OS and an application for that OS. Microsoft Windows gets more valuable the more apps are made for it, which in turn makes Windows more popular, which in turn leads to more apps, and so on. Microsoft Windows is not more valuable simply because there are more copies of Microsoft Windows in the world, but because there are more complements to Windows in the world.
Keep Reading Six Strategies for Overcoming “Chicken and Egg” Problems by Chris Dixon
Organic Startup Ideas by Paul Graham
The best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you?
There are two types of startup ideas: those that grow organically out of your own life, and those that you decide, from afar, are going to be necessary to some class of users other than you. Apple was the first type. Apple happened because Steve Wozniak wanted a computer. Unlike most people who wanted computers, he could design one, so he did. And since lots of other people wanted the same thing, Apple was able to sell enough of them to get the company rolling. They still rely on this principle today, incidentally. The iPhone is the phone Steve Jobs wants.
