Category: Product

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2020 Year in Review

I’ve written 102 essays on this blog in the past year, plus some change, spending an average of 1-2 hours per piece and a range from 30 minutes to 2 weeks. An average of 1,200 words per post. While not mutually exclusive, over half of which were on startup topics. One in three described the venture capital landscape. 36 (excluding #0) #unfiltered blog posts, where I share my raw, unfiltered thoughts about anything and everything. 16 on mental health. A surprising 13 on cold emails and its respective ecosystem. And my first public book review. Some didn’t age well, like The Marketplace of Startups. Some will stay evergreen.

25% of my blog posts I started writing at least 48 hours before the publish date. 1 in every 3 (-ish) of the afore-mentioned, I rewrote because I didn’t like the flow. For every 2 essays I wrote, 1 of which I had to wrestle deeply with the thought of imperfection. In effect, half of my essays were a practice to overcome my own mental stigma of “writer’s block.” Yet after over a year of writing, I realize that I’ve become prouder of my writing than when I started.

So, as the year is transitioning into the next, I thought I’d take some time to reflect on my growth 100 (+2) posts after starting this blog. Let’s call them superlatives.

Top 10 most popular

Ranked by total views per post, the 10 posts readers visit the most.

  1. #unfiltered #30 Inspiration and Frustration – The Honest Answers From Some of the Most Resilient People Going through a World of Uncertainty – I asked 31 people I deeply respect to share some of their greatest drivers and darkest moments in life and how they got through them. You can find part 2 here with 10 more thoughts.
  2. My Cold Email “Template” – My friends have asked me for years what I write in my cold emails, and now, what and how I write my cold outreaches are available for your toolkit.
  3. Fantastic Unicorns and Where to Find Them – An essay on the parameters and the mental models investors use to find “unicorn” startup ideas.
  4. When Investor Goodwill Backfires – What It Means to be Founder-Friendly and Founder-Investor Fit – How founders can do investor diligence before signing the term sheet and also how to best manage founder-investor dynamics
  5. #unfiltered #24 How long do you take to prepare for a talk? – A Study about Time Allocation
  6. How to Build Fast and Not Break (As Many) Things – A Startup GTM Playbook
  7. 10 Letters of Thanks to 10 People who Changed my Life – Every holiday season I write thank you letters to the people I deeply respect. It’s one of the best times of the year to reconnect. These are the letters I wrote in 2019. Here are also some I wrote this year for more context.
  8. #unfiltered #18 Naivety vs Curiosity – Asking Questions, How to Preface ‘Dumb’ Questions, Tactics from People Smarter than Me, The Questions during Founder-Investor Pitch
  9. #unfiltered #11 What I Learned About Building Communities through Social Experiments – Touching Jellyfish, Types of Social Experiments, The Thesis, Psychological Safety and Fairness
  10. The Marketplace of Startups – While many of the remarks on this blog post are now obsolete, largely incited by the 2020 Black Swan event – COVID, the two questions at the end of the blog post are the two I still like to ask founders today.

Personal favorites

While not every one of these got the limelight I had hoped, each of these are ones I felt great pride in being able to write on.

Most challenging to write

I had been wrestling with how vulnerable I can allow myself to be in the public space. Writing this post was frightening, but I’m glad I did. It cascaded into deeper conversations with my friends, colleagues and readers, but also inspired more blog posts after this about mental health.

#unfiltered #26 Am I At My Best Right Now?

In closing

I first started this blog with the intention of chronicling my own learnings in the amazing world of venture. While I couldn’t guarantee it would be helpful to every individual reading my humble meandering, I could, at least, guarantee what I write has been or continues to be instructive for me.

Within the first month it had evolved into an FAQ and a means to provide value to as many founders as I can when one day the number of people I want to help exceed my available bandwidth. Wishful thinking at the time, but a cause that inspired me forward. After the first six months, with the introduction of the #unfiltered series, I began to write to think – a way to flush out simple, unrefined ideas to more robust concepts. While I’ll forever be a work in progress, I began to make new dendrite connections that never existed before. In a way, I was and am still chronicling my own journey in hopes that it will continue to guide people beyond my immediate sphere of influence.

Thank you, each and every one of you, for accompanying me on this journey we took yesterday and the one we’ll take tomorrow. And I hope this cognitive passport will continue to serve as your cup o’ Zhou (/joe/) weekly.

Cheers, and I’m excited for the adventure ahead!

Photo by Ray Hennessy on Unsplash

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#unfiltered #35 How Do You Know When You Click?

Over the weekend, my friend and I had this fascinating conversation about how we found our other friends. I know, metaphysical, nerdy even. But nevertheless, I thoroughly enjoyed it. She posed the question: “Is it just based on how long you’ve known each other? And how often you see each other?” For most of my life, I would have said yes. Classmates that became friends were people I met and could chat with over lunch or after school. The same is true for colleagues. And strangers. Some happened exceedingly fast – within 24 hours. Others have taken over half a year before we “warmed up” to each other.

Unsurprisingly, it gave birth to the question: At what point does an acquaintance become a friend?

The PMF parallel

To be honest, I didn’t have a good answer then, nor do I have one now. Part of the reason I’m sharing this is to open up dialogue and draw inspiration from you, my readers.

Pushing up my glasses, which I’ve got to get a new pair (open to any recommendations), I couldn’t but analogize it to startups finding product-market fit.

How do founders know when they hit product-market fit? The TL;DR version: when you’re too busy to even ponder if you have product-market fit. Or simply, you’ll know it when you have it. For the longer, less nebulous answer, I recommend checking out Lenny Rachitsky’s piece on it, and some of other essays I’ve written on the topic:

Or as Casey Winters, Chief Product Officer at Eventbrite, says:

“Product-market fit isn’t when your customers stop complaining, it’s when they stop leaving.”

Some more examples include, when:

  • You’re focused on upgrading your servers rather than acquiring customers.
  • There’s so much demand, you’re writing “I’m sorry” and “Not yet” emails to your customers who are asking when can they get off the waitlist.
  • Laggards on the adoption curve start using your product and saying wow. In Airbnb’s case, that was Joe Gebbia‘s mom using the product.
  • There are handwritten love letters in your office mailbox.
  • Customers are asking how they can pay (more) for your product.
  • You’re feeling the pull of the market rather than pushing your product in front of people.

Friends

On a similar note, when the entropy of a relationship and the subsequent conversations break into an impetuous nature that eclipses the inciting reason for the relationship, you might have something going. Or in simpler words, you can’t stop the momentum of the relationship. “What about this?” “Let’s do that!” “Ahhh, not enough time!” Of course, as all relationships go, it takes two to tango. Just like product-market fit, when you don’t have it, it’s not obvious what you need to do make it click. But when you do have person-person fit, everything makes sense. And quite obvious, in retrospect.

While the above was my answer on Sunday, I’m not completely sold it’s the end all, be all. And as I continue to find new sparks and rekindle old flames, I’m sure I will learn more about myself and others. A provocative question that may require a more provocative answer.

Top photo by Tyler Nix on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

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How to Build Fast and Not Break (As Many) Things – A Startup GTM Playbook

The tech world, particularly Silicon Valley, in the past 2 decades, has accelerated its growth ’cause of one mantra: “Move fast and break things.” Some of the most valuable products we know today were built because of that. Facebook, whose founder coined the phrase. Google. Amazon. LinkedIn. Uber. The list goes on. In sum, be “agile”. Simultaneously, I see founders, on the regular, take this mental model too far. They move fast, but they rarely give enough time to test their hypotheses.

Equally so, some companies cannot afford to “break things”. Take Dropbox, for example. Ruchi Sanghvi, founder of the South Park Commons Fund, former VP of Operations at Dropbox, and Facebook’s earliest female engineer, told VentureBeat in 2015, “Quality is really, really important to Dropbox, and as a result we needed to move slower — not slowly, but slower than Facebook.” Ruth Reader, who wrote for VentureBeat at the time, further extrapolated, “What was right for Facebook — fast-paced iteration and fixing bugs in real time — didn’t work for DropBox, an application people entrusted with personal documents like wedding photos or the first draft of a novel. What was valuable to DropBox was the details.”

On the other extreme, there are founders who spend day after day, week after week, and sometimes year after year, pursuing the “perfect” product before launching. If they were right on the money before, by the time they launch 6 months later, they might be 6 months off the money. Take the situation we’re all in today for example – the pandemic. No one could have predicted it. In fact, I had many a few predictions before the pandemic, which all proved to be unfortunately wrong.

  • The Marketplace of Startups, written on February 24, 2020 – I alluded to an opinion I held that consumer social was almost dead. The consumer app market had become so saturated that it was hard for new players to play in.
  • Myths around Startups and Business Ideas, written on October 12, 2020 – Pre-COVID, I was more bullish on Slack than Zoom as a public stock investment. History proved otherwise.

… and more to come. Mistakes are inevitable. And “the rear view mirror is always clearer than the windshield”, as Warren Buffett would describe. Seth Godin said in his recent interview on The Tim Ferriss Show: “Reassurance is futile because you never have enough of it.”

At the end of the day, as a startup founder, your raison d’être is creating value in the world where there wasn’t before. As Bill Gates puts it: “A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it.” Analogized, your startup is that platform.

So, in this post, using the lessons from other subject-matter experts (SMEs), I’ll share how startup teams can balance speed with intentionality in their go-to-market (GTM) strategy.

Continue reading “How to Build Fast and Not Break (As Many) Things – A Startup GTM Playbook”
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Fantastic Unicorns and Where to Find Them

As a venture scout and as someone who loves helping pre-seed/seed startups before they get to the A, I get asked this one question more often than I expect. “David, do you think this is a good idea?” Most of the time, admittedly, I don’t know. Why? I’m not the core user. I wouldn’t count myself as an early adopter who could become a power user, outside of pure curiosity. I’m not their customer. To quote Michael Seibel of Y Combinator,

… “customers are the gatekeepers of the startups world.” Then comes the question, if customers are the gatekeepers to the venture world, how do you know if you’re on to something if you’re any one of the below:

  • Pre-product,
  • Pre-traction,
  • And/or pre-revenue?

This blog post isn’t designed to be the crystal ball to all your problems. I have to disappoint. I’m a Muggle without the power of Divination. But instead, let me share 3 mental models that might help a budding founder find idea-market fit. Let’s call it a tracker’s kit that may increase your chances at finding a unicorn.

  1. Frustration
  2. The highly fragmented industry with low NPS
  3. Right on non-consensus
Continue reading “Fantastic Unicorns and Where to Find Them”
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Myths around Startups and Business Ideas

In a number of recent conversations with friends outside of venture and “aspiring entrepreneurs”, a couple myths, which I’m going to loosely define here as popular beliefs held by many people, were brought to my attention. 4 in particular.

  1. If I have a great idea and build it, it’ll sell itself.
  2. That idea/startup is over-hyped.
  3. The startup/venture capital landscape is over-saturated.
  4. If it doesn’t make sense to me, it’s not a good idea.

Quite fortuitously, a question on Quora also inspired this post and discussion.

If I have a great idea and build it, it’ll sell itself.

Unfortunately, most times, it won’t. As Reid Hoffman puts it: “A good product with great distribution will almost always beat a great product with poor distribution.” As a founder, you have to think like a salesperson (for enterprise/B2B businesses) or a marketer (for consumer/B2C businesses). People have to know about what you’re building. ’Cause frankly you could build the world’s best time machine in your basement, but if no one knows, it’s just a time machine in your basement. Probably a great story to tell for Hollywood one day (even then you still need people to find out), but not for a business.

That idea/startup is over-hyped.

I’ll be honest. This really isn’t a myth, more of a common saying.

Maybe so, at the cross-section in time in which you’re looking at it. But if you rewind a couple months or a year or 2 years ago, they were under-hyped. In fact, there’s a good chance no one cared. While everyone has a different technical definition of over- and under-hyped, by the numbers, time will tell if it’ll be a sustainable business or not. If it’s keeping north of 40% retention even 6 months after the hype, we’re in for a breadwinner.

Take Zoom, for example. Pre-COVID, if you asked any rational tech investor, “would you invest in Slack or Zoom?” Most would say Slack. Zoom existed, but many weren’t extremely bullish on it. Today, well, that may be a different story. As of this morning (Oct. 12, 2020), while I’m editing this post before the market opens, the stock price of Zoom is $492 (and same change). Approximately 343% higher than it was on March 17th, the first day of the Bay Area shelter-in-place. And, right now, the price of Slack is $31. Approximately 56% up from the beginning of quarantine.

Neither are startups anymore, but the analogy holds. Also, a lesson that predictions, even by experts, can be wrong.

The startup/venture capital landscape is over-saturated.

“There’s too much money being invested (wasted) on startups.”

From the outside, it may very well look that way. Every day, every week we see this startup gets funded for $X million or that startup gets funded for $YY million. According to the National Venture Capital Association (NVCA), $133 billion were invested into startups last year. Yet, it pales in comparison to the capital that’s traded in the public markets.

VC funds see thousands of startup pitches a year. Per partner (most funds 2–3 partners), they each invest in 3–5 per year (aka about once per quarter). Meaning >99% of startups that a single VC sees are not getting funded by them. That doesn’t mean 99% never get funded, but it’s just to illustrate that proportionally, capital isn’t being spent willy-nilly.

If we look at it from a macro-economic perspective, if we are reaching saturation in the startup market, we should be getting closer to perfect competition. And in a perfectly competitive market, profit margins are zero. The thing is profits aren’t nearing zero in the startup/venture capital market. In fact, though the median fund isn’t returning much on invested capital. A good fund is returning 3–5x. A great one >5x. And well, if you were in Chris Sacca’s first fund, which included Uber, Twitter, and more, 250x MOIC. That’s $250 returned on every $1 invested.

If it doesn’t make sense to me, it’s not a good idea.

Finding Product-Market Fit and “Idea-Market Fit”

Revolutionary ideas aren’t meant to conform. If an idea is truly ground-breaking, people have yet to be conditioned to think that a startup idea is great or not. As Andy Rachleff, co-founder of Wealthfront and Benchmark Capital, puts it: “you want to be right on the non-consensus.” Think Uber and Airbnb in 2008. If you asked me to jump in a stranger’s car to go somewhere then, I would have thought you were crazy. Same with living in a stranger’s home. I write more about being right on the non-consensus here and in this blog post.

Frankly, you may not be the target market. You’re not the customer that startup is serving. The constant reminder we, on the venture capital side of the table, have is to stop thinking that we are the core user for a product. Most products are not made for us. Equally, when a founder comes to us pre-traction and asks us “Is this a good idea?”, most of the time I don’t know. The numbers (will) prove if it’s a good idea or not. Unless I am their target audience, I don’t have a lot to weigh in on. I can only check, from least important to most important:

  1. How big is the market + growth rate
  2. Does the founder(s) have a unique insight into the industry that all the other players are overlooking or underestimating or don’t know at all? And will this insight keep incumbents at bay at least until this startup reaches product-market fit?
  3. How obsessed about the problem space is the founder/team, which is a proxy for grit and resilience in the longer run? And obsession is an early sign of (1) their current level of domain expertise/navigating the “idea maze”, and (2) and their potential to gain more expertise. If we take the equation for a line, y = mx + b. As early-stage investors, we invest in “m’s” not “b’s”.

In closing

While I know not everyone echoes these thoughts, hopefully, this post can provide more context to some of the entrepreneurial motions we’re seeing today. Of course, take it all with a grain of salt. I’m an optimist by nature and by function of my job. Just as a VC I respect told me when I first started 4 years back,

“If you’re going to pursue a career in venture, by nature of the job, you have to be an optimist.”

Happened to also be one of the VCs who shared his thoughts for my little research project on inspiration and frustration last week.

Photo by K. Mitch Hodge on Unsplash

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How to Identify Market Opportunity and Recognize Market Inefficiencies

round gold colored pocket watch

I was raised a swimmer. From 4 years old, my parents sent me to take swimming classes for 2 primary reasons:

  1. Learn how to not drown.
  2. If we (my parents) are ever going to drown, you’re going to save us.*

*Note: I’d like to point out the irony is that both of parents know how to swim themselves. Not at a competitive stage, but enough to survive from drowning.

Oddly enough, I learned how to swim by drowning. Over the years, like many other children around me, on top of swimming, I also played ball in its various sizes and ran. And I learned that swimming and running are of the 2 purest forms of athleticism and exercise out there. There’s very little margin for error, if any. A tenth of a second is the difference between Olympic gold and not even qualifying for the semifinals. Because of that, in swimming, we’re taught to be efficient. We learned to maximize for our distance per stroke (DPS). And I believe in running, it’s distance per stride.

Efficiency. The ability to do more with less.

The market of efficiency

These days, getting from point A to B isn’t as difficult as it used to be. Cars made travelling miles easier. Planes, for hundreds to thousands of miles. Bikes and scooters, for last mile transportation – distances too close to drive, but take twice as long to walk. Outside of transportation, career development, information and skill acquisition have all seen massive developments not only in the last hundred years, but especially in the last 10 years. Online platforms, like Coursera, Masterclass, Google, and Wikipedia, helped us all shave off months, years, even generations of legwork and information acquisition. They made so many things more accessible.

Accessibility

Accessibility is platformitizing and democratizing information. What Yellow Pages did for services. Reddit for knowledge acquisition. Amazon for shopping. Google for information. And Food Network and food media did for cooks. The average person today is more knowledgeable about the culinary process and its accessories than someone two decades back. Laughable now, but 8 years ago, it’s how I learned not to burn frozen pizza. I could go on and on.

But, in the next ten years, accessibility may not be enough. Though there are many populations in this world who still have yet to access the knowledge I can readily find on my laptop, accessibility provides people with the tools, but not the means to use those tools effectively.

Ease

Ease does. Lower the barriers to entry and bundle the entire knowledge acquisition, or otherwise, what I would call onboarding, in an intuitive manner. Like what WordPress did for websites. Instagram for photos. Opendoor for home-buying/selling. TurboTax for, well, tax.

It’s a messy web of information out there. As economist Herbert A. Simon puts it:

“A wealth of information creates a poverty of attention.”

Here’s an easy way to tell which industries and processes lack ease. Find where people have created hacks to solve a problem.

  • Using multiple tools/software to solve a single problem;
  • Using a “temporary” solution to solve a repetitive problem. Like a basin to catch the rainwater that leaks through the roof;
  • A public forum, like Reddit or a Facebook group or multiple similar questions on Quora, where people share their “life hacks”.
  • A How-to YouTube video that has tens/hundreds of thousands, if not millions, of views.

And to know if you hit the nail on the head, you’ve got crazy pull. Product-market fit. PMF. When you don’t even have the luxury of time to worry if you have PMF ’cause your customer success inbox/sales inbox is filled to the brim. Or you’re getting so many new users that you’re figuring out how to upgrade your servers before your servers go blank. For more on PMF, I highly recommend checking out Lenny Rachitsky‘s recent post surveying 25 of the most successful companies on when they realized they had PMF.

In closing

Tools and platforms that make it easier for an individual to go the distance, to be more efficient, carry 2 traits: accessibility and ease. With each stroke, with each action one takes, they can go further. They can do more. With less. Technology, in the incoming years, will further do so.

And as a VC scout, I look for, what I call – distance per action. Or DPA, for short. So, if you’re working on something that will enable people to have higher and greater DPAs, I wanna talk.

Photo by David Bartus on Pexels.com

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#unfiltered #27 The Impetus of My Social Experiments – Higher Research and the Application to Startups

bunny, egg, curiosity, curious, social experiments

People seem to love origin stories – both in theatre and in life.

“How did it all start?”

“How did you get into this career?”

Or…

“How did you meet your wife/husband?”

And well, I can’t say I’m one to push back on that.

There’s something truly magical about “Once upon a time…”. And I’m no stranger to fairy tales. Growing up, I was largely influenced by older female cousins and family friends. As soon as our parents left to their wine-sipping adult gossip around a table of blackjack, my cousins and older female friends would drag us to watch their favorite Disney movies on the VCR, namely princess movies. I’m not exaggerating when I say I’ve seen Beauty and the Beast more than 100 times or Cinderella more than 50 times. In fact, my friends in elementary school would talk about their favorite movies – Transformers, LEGO Bionicles, Peter Pan, and Tarzan. Yet, mine was Disney’s 1998 Mulan.

And they all started with “Once upon a time…”

So, it was no surprise when friends, colleagues, and then strangers started asking me:

“How/when/why did you start hosting social experiments?”

Continue reading “#unfiltered #27 The Impetus of My Social Experiments – Higher Research and the Application to Startups”
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On Scale – Lessons on Culture, Hiring, Operating, and Growth

flower, scale

One of my favorite thought exercises to do when I meet with founders who have reached the A- and B-stages (or beyond) is:

“What will his/her company look like if he/she is no longer there?”

The Preface

While the question looks like one that’s designed to replace the founder(s), my intention is everything but that. Rather, I ask myself that because I want to put perspective as to how the founder(s) have empowered their team to do more than they could independently. Where the collective whole is greater than the sum of its parts. Have the founders built something that is greater than themselves? And is each team member self-motivated to pursue the mission and vision?

It reminds me of the story of a NASA janitor’s reply when President Kennedy asked: “Hi, I’m Jack Kennedy. What are you doing?”

“Well, Mr. President,” the janitor responded, “I’m helping put a man on the moon.”

From the astronaut who was to go into space to the janitor cleaning the halls of NASAs space center, each and every one had the same fulfilling purpose that they were doing something greater than themselves.

And if the CEO is able to do that, their potential to inspire even more and build a greater company is in sight. Can he/she scale him/herself? And in doing so, scale the company past product-market fit (PMF)?

For the purpose of this post, I’ll take scale from a culture, hiring, operating, and product perspective, though there are much more than just the above when it comes to scale. Answering the questions, as a founder:

  • How do you expand your audience?
  • How do you build a team to do so?
  • And, how do you scale yourself?

And to do so, I’ll borrow the insights of 10 people who have more miles on their odometer than I do.

While many of these lessons are applicable even in the later stages of growth, I want to preface that these insights are largely for founders just starting to scale. When you’ve just gone from zero to one, and are now beginning to look towards infinity.

The TL;DR

  1. Build a (controversial) shocking culture.
  2. Hire intentionally.
  3. Retaining talent requires trust.
  4. Build and follow an operating philosophy.
    • Create, hold, and share excitement.
    • Align calendars.
  5. Upgrade adjacent users as your next beachhead.
  6. Capture adoption by changing only 1 variable per user segment.
Continue reading “On Scale – Lessons on Culture, Hiring, Operating, and Growth”
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Video Games – Evolving from Social Networks to Ad Marketplaces

video games, startup gamified models, startup gamification, ads, advertisement market

With the 2020 series of events, many of us have started to look for other ways to pass our time. Some have looked towards Netflix and Disney+. A number, baking (even ice cream making; thank you to everyone who got an ice cream machine before me). And others, gaming. The number of friends, who had no track record of gaming and suddenly started talking about how to farm iron nuggets in Animal Crossing: New Horizons, skyrocketed. Anecdotally, more than 3-4 fold more.

Games = social networks

Games have become the new social networks. I’m not even talking about the gaming subreddits on Reddit or the Discord channels out there. And much like how social networks are communal hubs of interaction, games, like:

…*deep breath* just to name a few, offer just as much, if not more. People spend hours indulging on the platform and interacting with friends. Not only that, because content is native to gaming platforms themselves, it makes it easier for friends to connect and share content on progress and goals. Much like groups and communities on social networks, many games have clan systems that increase retention and engagement on the platform. Games are just sticky.

By the numbers

They aren’t discrete “one-off” purchases, like my old Nintendo 64 cartridge games, but evolving engines of narrative and relief, or as Andreessen Horowitz calls them – living franchises. What started as “one-off” buys became downloadable contents post-launch (DLCs). And looking at games like World of Warcraft, Fortnite, with constant monthly updates, patches and hotfixes, the games you buy “in the box” are no longer the same beast as before. And now we have a term for it all – Games-as-a-Service (GaaS).

In 2019, there were over 2.5 billion gamers in the world. That’s about 1 gamer out of every 3 people in the world. Together, they spent $120.1 billion on games and grew the market 3%, in a study by SuperData. And you know even Neilsen wants a slice of the pie when they acquired SuperData in 2018, a research company dedicated to tracking the game and e-sports markets. No surprise, Neilsen’s not alone. 44.2% of Tencent’s investments have been into gaming – owning 100% of Riot Games (League of Legends), 40% of Epic Games (Fortnite), 81.4% of Supercell (Clash of Clans), 10% of Bluehole (PUBG), and even 1.3% of Roblox and 2% of Discord. Sony, Microsoft, Apple, and many others are no stranger to putting their dollar into gaming as well.

Though many in 2019 weren’t bullish on the 2020’s growth numbers, in hindsight, we’re seeing a whole different wave of optimism. Hell, March 2020 was a real winner for gamers, spending $1.6 billion on games, their hardware, software, accessories and game cards, thanks for COVID. Needless to say, Animal Crossing topped the charts. I can’t imagine the number at the end of 2020.

Social athletes

You also have Twitch streamers, YouTubers, mods, and creators who become the local/global authority on the market and often ubiquitous with the games/genres they play. Who can actively and passively sway how a community thinks and acts, just like big-time influencers on social media. They have effectively become, what I call, social athletes, turning their hobby into a full-time pursuit. And earning paychecks by representing the brand/team they love most, as well as through sponsorships and partnerships. Shroud, a former competitive e-sports athlete, now one of the biggest streamers in the industry and formerly exclusively streaming on Microsoft’s Mixer, took a 1.5 month break after the Microsoft shut down its Twitch competitor, Mixer. And on his first day back recently, he had half a million viewers tuning in to watch his revival on Twitch.

The next frontier

Just like how social networks evolved into ad-based revenue models, games are evolving into a similar beast, as well. Mobile games have been no stranger to advertisements for a long time. But we’re now seeing the change now on PC and console games. And in a slightly different nature. Where the ads are embedded into the game experience itself, rather than the pop-out kinds.

Epic Games’ Fortnite definitely took it all to the next level – from their live, in-game events to their virtual cosmetic options that acted as film promotions. The latter, much like, how LEGO releases a whole series of movie-related sets to help with promoting it. And their live events are no joke, whether it was:

  • Their live Marshmello concert (with 11 million attending live),
  • Their Marvel crossover event where players could play as Thanos,
  • Or, when 3.1 million players got a sneak peek into a never-before-seen scene in Star Wars: The Rise of Skywalker before it came to theaters.

As expected, many other games are following suit. Recently popular PC game, Fall Guys, is now hosting a “battle of the brands” on their Twitter – a bidding war to have your brand featured as a cosmetic in the game towards a good cause of donating to Special Effect, a charity dedicated to helping gamers with physical disabilities.

Last I checked, the bid is at $420,069.69. And yes, I’m sure the numbers were intentional.

So, what’s next?

Well, it’s an exciting time. Not too long ago, influencer marketing blew up. And now brands/games are becoming influencers in and of themselves. Whether that fall under influencer marketing or a new bucket, I don’t know. What I do know is that though we are all far apart right now, the world of media is bringing the larger world closer together. As more games:

  • Go cross-platform,
  • Are discovered organically and socially,
  • And are fueled and accelerated alongside co-creaters, influencers and user-generated content…

… while technologies, like 5G, virtual and augmented/mixed reality (VR/AR/XR), cloud gaming, and blockchain, bring more interactions into each game, building larger and immersive worlds, I’m quite bullish on the growth of the gaming industry. And as the gaming industry evolves, their learnings will bleed into other industries, via gamified models – from Pioneer gamifying the process of building a business to Superhuman gamifying productivity, first through emails.

Why? They’re sticky – high engagement and retention cohorts. And I dare say, sexy, as well. Frankly, game companies don’t just launch with minimum viable products (MVP), but minimum viable happiness (MVH). Or as Jiaona Zhang, VP Product at Webflow and lecturer at Stanford’s School of Management Science & Engineering, calls it: minimum lovable products (MLP).

If you’re interested in a deep dive on how to offer MVH or build an MLP, check out my previous post on the topic:

A Reason to Stay

Photo by Florian Olivo on Unsplash

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#unfiltered #21 The Recipe for Personal Growth – Thomas Keller’s Equation for Execution, The VC/Startup Parallel, Helping Others, La Recette Pour La Citron Pressé

lantern, personal growth, light

Over the weekend, I was brewing up some mad lemonade. ‘Cause well, that’s the summer thing to do. Since I’m limited in my expeditions outdoors, it’s just watching the sun skim over the horizon, blossoming its rose petals across the evening sky, in my backyard, sipping on homemade lemonade. If you’re curious about my recipe, I’ll include it at the bottom of this post.

When I’m cooking or performing acts of flavor mad science, I enjoy listening to food-related podcasts, like Kappy’s Beyond the Plate, Kappy’s CookTracks or Bon Appétit’s Foodcast. Unfortunately, all are on a temporary hiatus. So, I opted for the next best – YouTube videos. And recently, a curious video popped up in my Recommended feed. A 2010 TED Talk with Thomas Keller.

Thomas Keller. An individual probably best known, among many others, for his achievements with The French Laundry. Needless to say, I was enamored by his talk. But the fireworks in my head didn’t start going off until the 12:46 mark.

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