Category: Product

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Looking at Business Models – Consumer Behaviors and Gross Margins

startup business models, waves, consumer behaviors

While sipping on my morning green tea, I’m inspired by Venture Stories’ recent podcast episode where Erik was interviewing Charles Hudson of Precursor, where they codify Charles’ investment thesis, markets, business models, among many other topics. A brilliant episode, if I say so myself! And it got me thinking.

Some market context

In the past few months, I’ve been chatting with a number of founders who largely seem to gravitate towards the subscription business model. Even pre-COVID, that seemed to be the case. And this notion was and is further perpetuated where a plethora of VCs turned their attention to XaaS (X-as-a-service).

Why? Pre-COVID, the general understanding was that consumers were:

  1. More expensive to acquire,
  2. And, harder to retain,

…which I shared in one of my February posts. I’d even heard some investors say: “Consumer social is dead.” Although I personally didn’t go as far as to illustrate the death of a vertical, I had become relatively more bearish on consumer than I did when I started in venture. Clearly, we were wrong. The question is: how much of this current situation will still hold true post-COVID? And honestly, your guess is as good as mine. But I digress.

Given the presumption that the consumer industry was faltering, many VCs re-positioned their theses to index more on enterprise and SaaS models. Models that had relatively fixed distribution channels and recurring revenue. It became some form of ‘guarantee’ that their investments could make their returns. And as the demand for startups shifted, supply followed.

The Business Models

Though there seemingly has been an overindexing of subscription models in the consumer space, I’m still an optimist for its future. The important part is to follow consumer behavior.

  • What do their consumption patterns look like?
  • What do their purchasing patterns look like?
  • How do customers think about value?

Here is a set of lens in which I think about business model application:

Subscription“One-off”
Continuous consumption patterns
>3-4 times in a month
(Ideally, >3-4 times per week)		Discrete consumption patterns
~1-2 times a year
Extremely episodic in nature
Proactive, expectant behaviorReactive behavior
Examples:
Food
Groceries
Music
Education		Examples:
Moving homes
One-off Conferences
Travel
Car
Note: The examples are generalized. The business models will depend on your target market. For example, travel for the average family may not happen on a recurring basis, but travel for a consultant happen weekly (pre-COVID).

The Extremes of Gross Margins

Of course, I can’t talk about business models without talking about profits. The ultimate goal of any business model is to realize returns – gross margins. Unfortunately, there’s no silver bullet on how you price your product. While you find the optimum price (range) for your product A/B testing with your customers, here’s a little perspective onto the two extremes of the spectrum.

  1. If you have insanely high margins, expect lots of competitors – either now or in the near future. Expect price-based competition, as you may most likely, fight in a race to the bottom. Much like the 1848 California Gold Rush. Competitors are going to rush in to saturate the market and squeeze the margins out of “such a great opportunity”.
  2. If your margins are incredibly low, as Charles said on the podcast, “there better be a pot of gold at the end of the rainbow.” You need extremely high volumes (i.e. GMV, “liquidity” in a marketplace) to compensate for the minimal cut you’re taking each transaction. A fight to monopolize the market. I’m looking for market traits like:
    1. Growing market size.
      • Ideally heavily fragmented market where you can capture convoluted, antiquated, and/or unconcentrated processes in the status quo.
      • Why unconcentrated? Don’t underestimate the power of your incumbents’ brands and product offerings. Like don’t jump in ad tech if you’re just going to fight against the Google and Facebook juggernauts, who own 80% of the ad market.
    2. Insane network effects.
    • For example, payments or food delivery. Food delivery is one where you have to reach critical mass before focusing on cash flow/profitability. I get it. It’s a money-eating business… until network effects kick in. Sarah Tavel wrote a Medium article about this where she explains it more elegantly than I have.

In closing

I’ve seen many founders end up taking their models for granted or sticking to a single generic revenue structure. But the best founders I meet make this a very intentional part of their business. Sometimes, even having different revenue streams for different parts of the business. If that’s the case for you too, Connie’s piece about multimodal models may be worth a read.

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Competitive Awareness as a Founder

sailing, competitor analysis, competitor awareness

For a while, I’ve been publicizing one of my favorite questions for founders.

“What unique insight (that makes money) do you have that either everyone else is overlooking or underestimating?”

I first mentioned it in my thesis. And, which might provide more context, was quickly followed by my related posts on:

For the most part, founders are pretty cognizant of this X-factor. B-schools train their MBAs to seek their “unfair advantange”. And a vast majority of pitch decks I’ve seen include that stereotypical competitor checklist/features chart. Where the pitching startup has collected all the checkmarks and their competitors have some lackluster permutation of the remaining features.

There’s nothing wrong with that slide in theory. Albeit for the most part, I gloss over that one, just due to its redundancy and the biases I usually find on it. But I’ve seen many a deck where, for the sake of filling up that checklist, founders fill the column with ‘unique’ features that don’t correlate to user experience or revenue. For example, features that only 5% of their users have ever used, with an incredibly low frequency of usage. Or on the more extreme end, their company mascot.

To track what features or product offerings are truly valuable to your business, I recommend using this matrix.

And, I go into more depth (no pun intended) here.

Competitive Awareness > Competitive Analysis

I’m going to shed some nuance to my question in the words of Chetan Puttagunta of Benchmark. He once said on an episode of Harry Stebbings’ The Twenty Minute VC:

“The optimal strategy is to assume that everybody that is competing with you has found some unique insight as to why the market is addressable in their unique approach. And to assume that your competitors are all really smart – that they all know what they’re doing… Why did they pick it this way? And really picking it apart and trying to understand that product strategy is really important.”

So, I have something I need to confess. Another ‘secret’ of mine. There’s a follow-up question. After my initial ‘unique insight’ one, if I suspect the founder(s) have fallen in their own bubble. Not saying that they definitively have if I ask it, but to help me clear my own doubts.

“What are your competitors doing right?”

Or differently phrased, if you were put yourself in their shoes, what is something you now understand, that you, as a founder of [insert their own startup], did not understand?

In asking the combination of these two questions, I usually am able to get a better sense of a founder’s self-awareness, domain expertise, and open-mindedness.

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Tracking What Customers Love

focus, lens, product-market fit is fluid, how to find product market fit

Product-market fit is fluid. Just because you’ve attained it once doesn’t mean you’ll have it forever. The market is constantly changing. And that means the intersection where supply meets demand will always be changing as well. That said, regardless of how and where you move to, you’ll always have a subset of your customers who aren’t happy. Who might miss the old ways. Who might wish for something else entirely.

To put it into perspective, I’m going to quote Casey Winters (his blog), the current Chief Product Officer at Eventbrite:

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

Retention and its Touch Points

If you run a business, you’re going to have a leaky funnel. Your job is to minimize the leaks. Double down on not just adoption, but especially retention. What does that mean? Engagement and the often, overlooked category, for many early-stage teams, re-engaging those that have become inactive over a set period of time. Whether 30 days or 7 days. It depends on what solution your product is providing for the market and how frequently you normally expect them to use the product. For example, for most consumer apps, as investors, we expect a minimum of usage for 3 days out of the 7 calendar days a week. So I characterize inactivity aggressively as after a month of inactivity.

In the past few months, since the health and economic crisis began, the conversation has shifted from ‘growth at all costs’ to profitability. And similarly, from an overemphasis on adoption to a better understanding of retention.

Speaking of retention, 2 days ago, the afore-mentioned Casey Winters and Lenny Rachitsky published their homework on the the dichotomy between good and great retention, which you can find here and here, respectively. Their research provides some useful touch points about “golden” numbers from some of the smartest people in the industry. Of course, as their research suggests, everyone’s “golden” number is different. At different points in time.

So, how are you tracking how lovable your product is?

One of my favorite ways to track what keeps users coming back for more is the Depth vs. Breadth graph. Plotting how long people use certain features and how often they click into it. You can easily substitute length of time (depth) with the number of actions taken for each product feature you have. Or as you grow into having multiple product offerings, this graph works just as well.

depth vs breadth graph, retention, product features

Below are just a few examples of breadth and depth metrics:

BreadthDepth
# of logins/week# actions/session
Session countSession time length
D1/D2/D7/D30 sessions# concurrent devices logged in
Platform-specific sessions
DAU/MAU
# paid users/ # total

The above graph should also help you better optimize your features/offerings. For instance, let’s say you’re a startup in your growth stages. Going by Reid Hoffman‘s rule of thumb for budgeting, spend:

  • 70% on your ‘popular‘ product offerings,
  • 20% on your ‘niche‘ product offerings,
  • And 10% exploring your any hidden gems in your ‘broad‘ quadrant.

In closing

If you have your finger on the pulse about what your customers love about you at all times, you’ll be able to create a more robust product. As a final note, I want to add that while this piece has been dedicated to what your customers love, please always keep in mind what they hate as well. And why they hate what they hate. Who knows? You might discover a larger secret there.

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Finding the Sweet Spot – Iterating What and How You Measure Product Metrics

iterating product metrics, measure, measuring tape

Many founders I meet focus on, and rightly so, optimizing their core metrics – a set of units that surprisingly don’t change after its initial inception. But metrics and the way you measure them should undergo constant iteration. Metrics are a way to measure and test your assumptions. 9/10 assumptions, if not all, are honed through the process of iteration. And by transitive property, the metrics we measure, but more importantly, the way we measure them, is subject to no less.

Though I’m not as heavily involved on the operating side as I used to be, although I try to, the bug that inspires me to build never left. So, let’s take it from the perspective of a project a couple friends and I have been working on – hosting events that stretch people’s parameters of ‘possible’. Given our mission, everything we do is to help actuate that. One such metric that admittedly had 2 degrees of freedom from our mission was our NPS score.

The “NPS”

“How likely would you recommend a friend to come to the last event you joined us in?” Measured on a 1-10 scale, we ended up seeing a vast majority, unsurprisingly in hindsight, pick 7 (>85%). A few 9’s, and a negligible amount of 5s, 6s, and 8s. 7 acted as the happy medium for our attendees, all friends, to tell us: “We don’t know how we feel about your event, but we don’t want to offend you as friends.”

We then made a slight tweak, hoping to push them to take a more binary stance. The question stayed the same, but this time, we didn’t allow them to pick 7. In forcing them to pick 8 (a little better than average) and 6 (a little worse than average), we ended up finding all the answers shift to 6s and 8s and nothing else. Even the ones that previously picked 9s regressed to 8s. And the ones who picked 5s picked 6s. Effectively, we created a yes/no question with just this small tweak.

There’s 3 fallacies with this:

  1. Numbers are arbitrary. An 8 for you, may not be an 8 for me. Unless we create a consolidated rubric that everyone follows when answering this question, we’re always going to variability in semi-random expectations.
  2. It’s a lagging indicator. There’s no predictive value in measuring this. By the time they answer this question, they’d already have made their decision. Though the post-mortem is useful, the feedback cycle between events was too long. So, we had to start looking into iterating the event live, or while it was happening.
  3. Answers weren’t completely honest. All the attendees were our friends. So their answers are in part, a reflection of the event, but also in part, to help us ‘save face’.

In studying essentialism, Stoicism, and Rahul Vohra‘s Superhuman, we found a solution that draws on the emotional spectrum that answered 1 and 3 rather well. Instead of phrasing our questions as “How much do you value this opportunity?”, we instead phrased them as “How much would you sacrifice to obtain this opportunity?” Humans are innately loss-averse. Losing your iPhone will affect you more negatively and for longer, than if you won a $1000 lottery.

So, our question transformed into: “How distraught would you be if we no longer invited you to a future event?”, paired with the answers “Very”, “Somewhat”, and “Not at all”. Although I’m shy to say we got completely honest answers, the answers in which we did give allowed for them to follow-up and supplement why they felt that way, without us prompting them.

The only ‘unaddressed’ fallacy by this question – point #2 – was resolved by putting other methods in place to measure attention spans during the event, like the number of times people checked their phone per half hour or the number of unique people who were left alone for longer than a minute per half hour (excluding bio breaks).

Feedback

“How can we improve our event?” We received mostly logistical answers. Most of which we had already noticed either during the event or in our own post-mortem.

In rephrasing to, “How can we help you fall in love with our events?”, we helped our attendees focus on 2 things: (1) more creative responses and (2) deep frustrations that ‘singlehandedly’ broke their experience at the event.

And to prioritize the different facets of feedback, we based it off the answers from the questions:

  • “What was your favorite element of the event?”
  • And, “How distraught would you be if we no longer invited you to a future event?”

For the attendees who were excited about elements closely aligned with our mission, we put them higher on the list. There were many attendees who enjoyed our event for the food or the venue, though pertinent to the event’s success, fell short of our ultimate mission. That said, once in a while, there’s gold in the feedback from the latter cohort.

On the flip side, it may seem intuitive to prioritize the feedback of those who were “Very distraught” or “Not at all”. But they exist on two extremes of the spectrum. One, stalwart champions of our events. The other, emotionally detached from the success of our events. In my opinion, neither cohort see our product truly for both its pros and cons, but rather over-index on either the pros or the cons, respectively. On a slight tangent, this is very similar to how I prioritize which restaurants to go to or which books to read. So, we find ourselves prioritizing the feedback of the group that lie on the tipping point before they “fall in love” with our events.

Unscalability and Scalability

We did all of our feedback sessions in-person. No Survey Monkey. No Google Forms, Qualtrics, or Typeform. Why?

  1. We could react to nuances in their answers, ask follow-up questions, and dig deeper.
  2. We wanted to make sure our attendees felt that their feedback was valued, inspired by Google’s Project Aristotle.
  3. And, in order to get a 100% response rate.

We got exactly what we expected. After our post-mortem, as well as during the preparation for our next event, I would DM/call/catch up with our previous attendees and tell them which feedback we used and how much we appreciated them helping us grow. For the feedback we didn’t use, I would break down what our rationale was for opting for a different direction, but at the same time, how their feedback helped evolve the discourse around our strategic direction. Though their advice was on the back burner now, I’ll be the first to let them know when we implement some element of it.

The flip side of this is that it looks extremely unscalable. You’re half-right. Our goal isn’t to scale now, as we’re still searching for product-market fit. But as you might notice, there are elements of this strategy that can scale really well.

In closing

Of course, our whole endeavor is on hold during this social distancing time, but the excitement in finding new and better ways to measure my assumptions never ceases. So, in the interim, I’ve personally carried some of these interactions online, in hopes of discovering something about virtual conversations.

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A Reason to Stay

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In the first startup I joined, we messed up our initial business model by not providing a reason for small- and medium-sized business (SMB) owners to stay. We created a marketplace between SMBs to transact with each other. But, after the first one to three transactions, they had no need for our platform. The scary thing about marketplaces isn’t that you’re connecting suppliers to their demand network, but not providing any bonuses after onboarding – a reason to stay.

Some of the stickiest companies are marketplaces because they provide that reason to stay. More often than not, providing a lovable product so convenient, it’s much easier to use the marketplace platform than to do the transaction themselves, and an easy, passive way to be discovered by future clients/customers that would be much more difficult on their own.

Why Multiplayer Video Games Work

In his book The Messy Middle, Scott Belsky, Chief Product Officer at Adobe and founder of Behance (acq. by Adobe), a discovery platform where creatives can showcase their portfolios and engage with others’, shares that when crafting the ‘first mile’ experience, you need to optimize for three questions:

  1. Why are your customers here?
  2. What can they accomplish?
  3. What can they do next?

Arguably, I believe that founders should always have these three questions hovering above their product strategies, beyond the ‘first mile’, only embedded more implicitly. Video games do an amazing job in this regard, especially massively multiplayer online role-playing games, or MMORPGs for short.

Why play the game? Find escape and sanctuary to be someone players want to be but can’t in the confines of reality.

What can they accomplish? Achieve that endgame that players see in the trailers and in the tutorial (the onboarding for an MMORPG user). The endgame is self-defined as well. Of course, the game optimizes for the power creep meta endgame. Yet, players can always opt for a ‘destiny’, a story, they find compelling, like becoming a fashionista, a wealthy merchant, a mentor, a content creator, and with faster computing systems and more robust infrastructure, a contributor to the game itself, through user-generated content (UGC). The Steam Workshop is an excellent example of UGC.

What can they do next? Level up their character and gear. Tackle the next quest – main or side – towards something larger than themselves. There’s always a defined goal, as well as actionable steps and additional incentives laid out for the players. This creates high retention value – a reason to stay.

The same is true for many other types of genres of multiplayer games – multiplayer online battle arenas (MOBA), battle royale (BR), first-person shooters (FPS), and more. It’s just the narrative of the endgame may change a little towards leaderboard domination. E-sports, content creation, and live streaming then offers a new tier of recognition and endgame for many veteran players.

Back to Marketplaces

I’ve always argued that as a founder, you want to focus on unscalable wins before thinking of scale pre-product-market fit. Focus on the individual experiences. As Li Jin, partner at the reputable a16z, wrote in a post about the passion economy, “[great founders] view individuality as a feature, not a bug.” The best marketplaces, like Uber, Airbnb, and Medium, started off focusing on the unscalable wins for a small individual subset of their potential users. These products offered their early users a reason to stay:

  • (Additional) Incentives and tools, to make their stay worthwhile;
  • Discovery platform to help them grow their brand and customer base, actively and passively;
  • And, subsequent community and network effects.

Early adopters jump on a new product, as fast as they jump off one. They’re finicky. They’re window shoppers, but at the same time, the most willing and likely to try out your product. Luckily and unluckily, the San Francisco Bay Area has no shortage of these folks, and being a tech startup, with its initial user base here, often inflates your early metrics. In short, the goal of your product is to make these technological butterflies fall madly in love with you and your product. That’s the tough part, but it’ll also mean you’ve found product-market fit (PMF).

Where do we find ‘love’?

Instead of a minimum viable product, or MVP, Jiaona Zhang, Senior Director of Product at WeWork, in her First Round Review piece, chases the “pixie dust”, or what I like to call the secret sauce – a truly unique, money-making insight. This magic is found through diligent iteration on consumer feedback, especially in the beta stages of a product. During the beta, users have the serendipity to discover “that magical moment in the user journey where the user realizes that this product is different from anything else they’ve ever experienced”. Her framework, designed from the perspective of the consumer:

Wouldn’t it be cool if users could [a process/action that would 10X their lives]?

What We Learned

The same was true for us at Localwise. Of course, we were motivated by poor retention metrics. But, we learned what businesses truly needed by asking each of them in person, as well as flyering (and getting rejected, or worse, ignored) to college students and to shops. So, still deeply in love with the community we built, we found that need when connecting local talent to SMBs. For businesses with high churn rate with temporary employees and a need to build a brand, that was their reason to stay.

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

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I was recently inspired by a fascinating conversation between Mike Maples Jr., co-founder and partner at Floodgate, and Andy Rachleff, co-founder of Benchmark Capital and Wealthfront, but more interestingly, the founder of the term, product-market fit, or PMF – a term that signifies when a product is recognized by a strong demand in the market. Over the years, there have been various ways entrepreneurs, go-to-market strategists, and investors have defined when an idea reaches product-market fit. But before I dive into the PMF, let’s take a look at market definitions first, which admittedly is a step off the beaten path.

The Markets

How I Like to Think about Market Sizes. *Not drawn to scale

Traditionally, the total addressable market (TAM), serviceable addressable market (SAM), and the serviceable obtainable market (SOM) are defined according to the geographic location of your market. It makes sense – your market is as big as where you can offer the service. But now, in an increasingly connected world, technologies are less and less inhibited by the geographical boundaries that plagued the decades before. That said, there are still cultural, social and economic differences when accessing new demographics, which is why I like to characterize the TAM, SAM, and SOM by psychological resistances to new ideas. The TAM is still defined by the total upside potential of a product, where it still excludes laggards, or folks who would most likely never (seek to) use your product. The SAM is construed of people who would use the product after three to five friends in their network recommend and are using the product themselves. And finally, the SOM consists of customers who are desperate, as Andy Rachleff called it, for your product. They have spent sweat, blood, and tears finding or building their own solution. They have already traversed the idea maze themselves and put the dollar (or the euro, peso, krone, pound, yen, RMB, BTC, ETH… you get my point) here their mouth is at. And here, in the SOM, is where you find your product-market fit.

Product-Market Fit

PMF is most noticeable on the hockey stick curve. Before PMF, traction is slow and looks very much like the blade of a hockey stick. And after PMF, traction skyrockets and exemplifies exponential growth.

The Hockey Stick Curve

While there are many heuristics to assess PMF across different verticals, I’m the most fluent in consumer tech where I’ve spent most of my time in. And in consumer tech, I’d like to underscore the notion of ‘exponential organic growth’, and subsequently, a short analysis on each word of that phrase.

Exponential is probably the most straight-forward, where at the early stages of a business, we’re looking for rapidly compounding growth.

Organic growth, as opposed to paid growth, is a measurement for word-of-mouth. Investors tend to measure the effectiveness of a product by its virality from its initial customers to its nth customer – growth that is achieved without directly spending (ad) dollars on acquiring the new customers.

Growth is something I break down into – retention and adoption. Increasing adoption is great as measured by the growth of total users on consumer platform or for a consumer product, but focusing only on adoption leads to a leaky funnel, or in my case, trying to hold too many groceries in my hand without a shopping cart. Every time I grab another item on the shopping list, I drop some other item I was already trying to balance and hold. Of course, focusing only on retention means there’s no growth, which for keeping your best friend circle is fine (unless you want a thousand BFFs), but not for growing a startup.

Below are some growth signs to pay attention to signify that your product is near/at PMF:

RetentionAdoption
> 25% DAU/MAU 100s of organic signups/day
40% are active day after signup> 30% MoM growth
Usage 3 days out of every week

“Idea-Market Fit”

As a founder with an ambitious idea, reaching product-market fit is a great goal to have, but the truth is PMF is a mystical beast – a chimera – in and of itself. Market demands change; what satisfied the definition of PMF a decade ago may not satisfy it now and will most likely not satisfy it ten years from now. Many studies have shown that most startups don’t fail from technological risk, but rather the inability to reach PMF, which ends up leading to lack of investor interest, demotivation, and the founding team falling apart. And quite obviously, before you reach PMF, the hardest part about starting a business is reaching PMF, or what Peter Thiel and many call the Zero to One. I’ll dive into the lessons I learned about the journey to “1” in future posts, but for the purpose of this post, I’m going to focus on the “0” – or what I like to call, “idea-market fit“, or IMF.

What differentiates a good idea from a great money-making idea? I’m going to borrow Andy’s thought calculus exercise. In a 2×2 matrix with right/wrong on one axis and consensus and non-consensus on the other, “you want to be right on the non-consensus.”

Andy Rachleff’s 2×2 Startup Idea Matrix

Why? Discounting the situations where you’re wrong (because you don’t make much, if any money), if you’re right on consensus, it means the market’s already mature, and perfect competition in a capitalistic market squeezes you out of your profit margins. If you do pursue this option as a founder, you’re more or less tackling an execution risk. On the other hand, if you’re right on the non-consensus, the market is still nascent, and you have the potential for monopolistic control of the market. In other words, you’re taking a market risk.

It definitely isn’t intuitive. At the very least, it wasn’t to me when I was on the operating side of the table. I wanted validation. When I was at Localwise helping build a community of local talent, I wanted people to say “I totally agree” or “You’re onto something.” But often times, I just received friction and resistance, with the toughest to receive from some of my friends.

“No one would ever buy that.”

“You’re wasting your time.”

“When are you going to get a real job?”

And at some points in time, I did think, “Maybe they’re right.” Until I started meeting a few people who thought a hiring destination for local mom-and-pop shops wasn’t a bad idea, and especially when small business owners started opening up about their frustrations. Hiring platforms, at that time, focused on the sexier brands and companies to get more demand side traction – the Googles, the Big Four’s, or the Bains, but had seemingly completely underrepresented the population of local businesses. Even if these SMBs were on these other platforms, they were overshadowed by the presence of bigger brands.

When validating startup ideas, you don’t want consensus. If your idea is truly revolutionary, people have yet to be conditioned to accept the idea. Take Uber or Airbnb, for example. If you asked the average person if they would use such a product, most would have thought that you’d be crazy to have a stranger sharing a car ride or home with them. These days, take e-sports or streaming. If someone told me in my pre-teen days that I could make a living off of playing video games, I’d most likely think I was dreaming. After all, I grew up playing Snake on my dad’s Motorola Razr, which admittedly seems to have made a return to the markets.

IMF is about challenging convention and the status quo. That’s what makes an idea revolutionary, or as people in Silicon Valley like to call it, disruptive. A crazy good idea challenges the explicit and implicit biases we have about society and ourselves. In other words, we have to detect the deception we bestow onto ourselves to find the gems in the rough, which Josh Wolfe of Lux Capital explains in his 2019 Lux Annual Dinner Talk – one of the best VC thesis-driven thought pieces I’ve ever seen.

In closing

As a geeky quote collector, I’d like to close this piece not in my own words, but in the words of three brilliant investors who have a few more patches of scar tissue on their back than I do now.

“Some of the best ideas seem crazy at first.”

– Curiosity, in my Thanksgiving blogpost

“Most of the big breakthrough technologies/companies seem crazy at first: PCs, the internet, Bitcoin, Airbnb, Uber, 140 characters…you are investing in things that look like they are just nuts… it has to be something where, when people look at it, at first they say, ‘I don’t get it, I don’t understand it. I think it’s too weird, I think it’s too unusual. “

– Marc Andreessen

“Breakthrough ideas have the traditionally been difficult to manage for two reasons: 1) innovative ideas fail far more than they succeed, and 2) innovative ideas are always controversial before they succeed. If everyone could instantly understand them, they wouldn’t be innovative.”

– Ben Horowitz, in his new book What You Do Is Who You Are
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