Every time I think it’s easier to say “pass on the good to make space for the great”, the world says you’re wrong. Last week, once again, I realized how hard it was to say “No”.
We’d been chatting for a few months now. They were raising a pre-seed. And they checked most of the boxes I look for in an epic founding team:
Spent time in the idea maze and deep domain expertise,
Had a unique insight which led to innovation in their business model,
Because I didn’t know their market well enough, I hesitate to say if this was an earned secret or just a lesser-known fact that an outsider would never hear about. The difference between, what Kanyi Maqubela at Kindred Ventures, a mystery and a secret.
Consistently followed through with their promises and commitments (to me),
Dreamed big – big TAM, big vision,
Hustled to build relationships with some of the largest enterprise customers in their sector (though, yet to close any contracts),
Onboarded some incredible talent,
As I heard on my buddy’s podcast recently, “you can only learn from experience, but it doesn’t have to be yours.
Over the past few months, I asked for more time in hopes to find something more. Admittedly, I could think of a million excuses. And I have. I could have said:
They’re too early, since I rarely do pre-seed deals these days.
Or it’s the lack of traction.
Maybe that they could be more articulate about their go-to-market and product-market fit.
Maybe it’s the fact that at an early stage, that they have both a CEO and president. In other words, competing personalities in leadership.
Surprisingly large team for pre-seed startup.
Or, simply, I don’t know their space well enough, albeit adjacent to mine.
The more I thought about it, the more I realized I was just making excuses. I could circumvent most of these “reasons” with just a little effort on my part. And the fact that I was introduced to them by someone I really respect in the industry didn’t make it any easier. In fact, that alone was one of the strongest driving forces for me to want this deal to work out. The truth is, I just wasn’t excited about the product. And I had been spending time – arguably wasting theirs – trying to find my excitement. But I couldn’t, no matter how hard I tried.
I know it may be completely self-serving here. Call it immaturity or naivete. As a scout, I live by a self-imposed rule that every deal I refer, I want to be their greatest champion – their greatest evangelist – when I do so. In other words, if I had the capital, I would invest in each and every one I refer. On the same token, every deal I refer is just the start of an exciting long-term relationship. Post-referral, during diligence, post-investment and even if the deal doesn’t close. But for this startup, I just felt myself dragging my feet through knee-deep water just to meet with them over time.
Thinking I was in over my head, I hit up two mentors of mine in the space to give me the reality check I thought I needed. I thought and was, borderline, hoping they’d say, “You’re a sucker to bring personal emotions into an investment.” Or “Suck it up. Stop being a millennial/snowflake.” But neither did. I also told another friend last night and she replied, “It’s what makes you human. And I think people need to know about this side of VC.”
So, I’m writing this now in hopes that it will contextualize some of the decisions we make on this side of the table. I made the decision with the expectation that I’d be forgotten or passed on by them when they raise a future round. If they ask me again, it’ll be an honor and a privilege. And maybe my disposition will change in 1-2 years’ time. But it’s naive of me to expect that. Nevertheless, I still wish them the absolute best, and I hope they become the rock-star success they set out to be.
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As part of my work, I talk to many seed-stage SaaS founders. At the seed, most of these founders are thinking about how to get to product-market fit. The one in zero to one. They’re launching their product with a select few companies to really nail their pain points. And often times, pricing and the business model take a backseat when they offer their customers the product for free or at an extreme discount. While investors don’t expect founders to nail pricing at the seed, it’s useful to start thinking about your revenue model early on. After all, pricing is both an art and a science. And with the right pricing structure, it can also be your proxy for assessing product-market fit. Here’s how.
Every product manager out there knows that customers don’t always know what they want, so asking them for a solution rarely nets valuable feedback. Rather, start with the problem. What are their frustrations? What sucks? What’s the last product they bought to attempt to alleviate their problem? Subsequently, what’d they like about that product? What didn’t they like?
There are two perspectives you can use to approach pricing: cost-plus and value-based. Cost-plus pricing is pricing based on selling the product at a given markup from its unit cost. The biggest mistake founders often make here is underestimating how much it costs to produce a product.
On the other hand, there’s value-based pricing. An approach where you determine the economic value of the service you are providing and give it to your customers for a bargain. Superhuman, for instance, prices the fastest email experience at $30/month. Or in a different light, a dollar a day. If you are saving more than a dollar of economic value a day by responding to emails faster than ever, then the product is worth it. The biggest pitfall here is that founders often don’t fully understand the value they’re bringing to their customers, which is a result of:
They don’t understand your value,
Or you can’t convince them of the value you think you offer.
To visualize both of these approaches better, let’s use the pricing thermometer, as YC calls it.
The greater the gap between two nodes (i.e. value and price, or price and cost), the greater the incentive. If you’re selling at a price far greater than its unit cost, you are far more motivated to sell your product. On the flip side, if your product is priced far below the value and benefits you provide, a customer is more motivated to purchase your product.
Buyers vs Customers
To take it a step further, if you’re planning to scale your startup, what you’re looking for our customers, not buyers. Buyers are people who purchase your product once, and never again. They learned from their mistake. Your product either didn’t deliver the value you promised or the value they thought you would deliver. Customers are repeat purchasers. Why? Because they love your product. It addresses your customers’ needs (and ideally more) again and again. Your customers’ satisfaction is evergreen, rather than ephemeral.
When you only have buyers, you have to push your product to others. It’s the epitome of a door-to-door salesperson. Think Yellow Pages.
When you have customers, you feel the pull. Customers are drawn to you. They come back willingly on their own two feet. As Calvin French-Owen, co-founder of Segment, once said: “The biggest difference between our ideas pre-PMF vs. when we found it was this feeling of pull. Before we had any sort of fit, it always felt like we had to push our ideas on other people. We had to nag people to use the product.”
Value-based pricing is playing to win. Cost-plus pricing is playing to not lose. While the latter is convenient strategy when you’re a local business not looking to scale (i.e. coffee shop, local diner, local auto parts store, etc.), it’s incredibly difficult to scale with, especially as customer needs evolve. As you scale, your customers might include anyone from Microsoft who wants you to bring a sales engineer to integrate your product to a 5-person startup team who’s just testing your product out. With cost-plus pricing, you’ll be forced to determine price points on a case-by-case scenario. With value-based pricing, you can systemize dynamic pricing based on evolving customer needs. As their value received goes up, the price does too.
As the name suggests, to generate pull, we have to start from value. In this case, your value metric.
Life is not measured by the number of breaths you take but by the moments that take your breath away. – Maya Angelou
Year 24 was a mediocre year. I was too ambitious, having made my birthday resolution public for the first time the year before. Not in the sense I tried to bite off more than I could chew. But in the sense, I lost focus. In trying to focus on everything, I focused on nothing. In my pursuit of hitting all the marks, I became mediocre at all of them.
Don’t get me wrong. Despite the pandemic, which may have hindered some of my goals, namely:
Getting two startups from 0 to 1 in a year,
And sleeping earlier,
… I did “succeed” in all of my other endeavors. Frankly, some hit, some missed. Nevertheless, I didn’t become stellar in any one of them. Looking back, I’m almost embarrassed to say any of my resolutions were defining of my 24th year being alive on this planet.
So, no concrete compartmentalized goals this year. I will be living day-to-day with one goal in mind: I have to seriously impress myself at least twice this year. While I may not have “actionable” goals to head towards this year, in order to impress myself, I have to, what some might call, “risk it for the biscuit.” I have to take leaps of faith. I have to be willing to try and fail and try and fail. Because without trying and taking risks, I know for a fact, I can and will never impress myself.
Of course this goal is subject to change, although I imagine not by much. The past year has taught me how unpredictable our future is. Who am I to predict what I will do the rest of this year when even the best fortune tellers and professional investors cannot forecast with certainty what will happen next week. Be it $GME or the pandemic, I’m sure life will constantly throw us curveballs we will never be able to forecast. But that’s exactly why living is fun. The future is not the present we are gifted, but one we chase not knowing what’ll come of it. And the gift is in the adventure.
I quoted James Stockdale – for which the Stockdale paradox is named after – in a post last year, “You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they may be.”
To confront myself and the most brutal facts of today, I will take the risks that will mold who I am tomorrow. The discipline of saying yes. It’s not about my batting average, but about the magnitude of the home runs I can get.
I’m confident that this year, I will continue many of the habits I picked up in the past year – writing weekly, exploring creative projects regularly, etc. But I won’t hold myself to promises that’ll lead me to mediocre, or at best, good, results. But rather, like in venture, I have to be willing to pass on the ‘good’ to make way for the ‘great’.
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Founders often ask me, what slides on my pitch deck do I have to make sure I get right? The short answer, all of them. Then again, if you’re focusing on all of them, you’re focusing on none of them. So I’ll break it down by fundraising stages:
Pre-seed/seed (might as well include angels here too)
Series A/B
Since I spend almost no time in the later stages, I’ll refrain from extrapolating from any anecdotes there.
If you’re using DocSend, you already have the numbers for your deck viewership in front of you. As DocSend’s CEO Russ Heddleston said in his interview with Jason Calacanis, VCs often spend ~3.5 minutes on your deck. Though I’ve never timed myself, it seems to be in the same ballpark for myself as well. After all, it’s the deck that gets the meeting, not the deck that determines if you get funding or not.
Nevertheless, I hope the below contextualizes the time spent beyond the numbers, and what goes on in an investor’s head when we’re skimming through.
Pre-seed/seed
Team
What is the biggest risk this business is taking on?
Is the person who can address the biggest risk of this business on this slide?
And does this person have decision-making power?
Let’s say your biggest risk is that you’re creating a market where there isn’t one. Do you have that marketing/positioning specialist – either yourself or on your team – to tackle this problem? As much as I love techies, three CS PhDs are going to give me doubts.
Similarly, the biggest risk for a hypothetical enterprise SaaS business is often a sales risk. Then I need proof either via your network/experience or LOIs (letters of intent) that you have corporations who will buy your product.
Or if it’s a tech risk, I’ll be hesitant if I see two MBAs pursuing this. Even if their first hire is an ML engineer, who owns 2% of the business. Because it doesn’t sound like the one person who can solve the biggest risk for the business has been given the trust to make the decisions that will move the needle.
This might be a bit controversial, but having talked with several VCs, I know I’m not alone here. I don’t care about quantity – number of years in the industry or at X company. Maybe a little more if you were a founding team member who helped scale a startup to $100M ARR. I do care for quality – your earned secret, which bleeds into the next slide.
Solution/product
The million-dollar question here is: What do you know that makes money that everyone else is overlooking, underestimating, or just totally missed? If you’re a frequent reader of this blog, you’ll be no stranger to this question. I’ve talked about it here and here, just to name a few.
Or in other words, having spent time in the idea maze, what is your earned secret? Here are two more ways of looking at it is:
Is there an inflection point you found, as Mike Maples Jr. of Floodgate calls it, in the socio-economic/technological trends that makes the future you speak of more probable?
Is it a process/mental model that you’ve built over X years in the industry that grafts extremely well to an adjacent or a broader industry?
I believe that’s what’ll greatly increase the chances of your startup winning. Or at least hold your incumbents at bay until you reach product-market fit. If you’re able to find the first insight, then you’ll be able to find the second. And by pattern recognition, you’ll be able to find the third, fourth, and fifth in extreme velocity. It’s what we, on the VC side, call insight development. And your product/solution is the culmination of everything you and your team has learned faster and better than your competitors.
Of course, your product still has to address your customers’ greatest pain points. You don’t have to be the best at everything, but you have to be the best (or the only) one who can solve your customers’ greatest frustration. So VCs, in studying how you plot out the user journey, look for: do you actually solve what you claim this massive problem in the market is?
Series A/B
Traction
What are your unit economics? I’m looking for something along the lines of LTV:CAC ~3-5x.
Who’s paying?
For enterprise, which big logo is your customer? And who are your 5-7 referenceable customers?
For consumer:
If it’s freemium, what percent of premium users do you have? I’m looking for at least a 3-5% here.
If your platform is free, how are people paying with their time? DAU/MAU>25-30%? Is your virality coefficient k>1? 30- and 90-day retention cohorts > 20%, ideally 40%.
What does your conversion funnel look like? What part of the funnel are you really winning? Subsequently, what might you need more work on?
The competition
95 out of every 100 decks, I see two kinds of competitor slides:
2×2 matrix/Cartesian graph, where the respective startup is on the upper right hand corner
The checklist, where the respective startup has all the boxes checked and their competitors have some percentage of the boxes checked
Neither are inherently wrong in nature, but they give rise to two different sets of questions.
The former, the graph, often leads to the trap of including vanity competitors. For the sake of populating the graph, founders include the logos of companies who hypothetically could be their competitors, but when it comes down to reality, they never or rarely compete on a deal with their target user/customer. April Dunford, author of Obviously Awesome, calls these “theoretical competitors.”
A simple heuristic is if you jumped on a call with a customer right now and ask: “What would you use currently if our solution did not exist?”, would the names of the competitors you listed actually pop up during the call? Or with a potential customer, what did they use before you arrived? For enterprise software, Dunford says that startups usually lose 25% of their customers when the answer to the above question is “nothing”. When your greatest incumbent is a habitual cycle deeply engrained in your user’s behavior, you need to either reposition your solution, or find ways to educate the market and greatly reduce the friction it takes to go from 0 to 60.
The latter, the checklist, usually sponsors a second kind of trap – vanity features. Founders often list a whole table’s worth of “awesome features” that their competitors don’t have, but many of which may not resolve a customer’s frustration. And on the one that does, their competitors have already taken significant market share. The key question here: Do all features listed resolve a fundamental problem your customers/users have? Which are necessary, which are nice-to-have’s? Are you winning on the features that solve fundamental problems?
The question I ask, as it pertains to competition, in the first or second meeting is: What are your competitors doing right? If you were to put yourself in your competitor’s shoes, what did they ace and what can you learn from the success of their experiment?
Financial projections
What are you basing the numbers off of?
What are your underlying assumptions?
How fast do you claim you can double the business growth? Is it reasonable? If we’re calculating bottom-up, can you actually sell the number of units/subscriptions you claim to? What partnerships/distribution channels are you already in advanced talks with? Anything further than 2 years out, for the most part, VCs dismiss. The future is highly unpredictable. And the further out it is, the less likely you’re able to predict that.
I also say financial projections for Series A/B decks is because only with traction can you reasonably predict what the 12-month forward revenue is going to look like. Maybe 18 months, depending on your pending contracts as well. In the pre-seed/seed, when you’re still testing out the product with small set of beta users, it’s hard to predict. And pre-seed/seed decks that have projections without much traction are often heavily scrutinized than their counterparts that don’t have that slide.
In closing
Of course, that doesn’t mean you should neglect any slide on your deck. Rather, the above is just a lens for you to see which slides an investor might allocate special attention to. If you can answer the above questions well in your pitch deck, then you’re one step closer to a winning strategy not only in fundraising, but in building a company that will change the world.
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Over the past few months, I’ve been slowly experimenting with how I can take Hidden Questions online, while not sacrificing the intimacy of the relationships it builds as well.
Hidden Questions started as a question game I played with friends and colleagues, which eventually expanded to other strangers. The goal of which was to deepen our friendship within minutes rather than weeks, months, or even years. In sum, a game where each person has to answer the question truthfully, but is not required to reveal what the question is. The catch is that if the person decides to conceal the question, they have to take a “punishment” (i.e. crazy hot sauce, disgusting foods, durian, Beanboozled jelly beans, etc.). Before they decide to or not, other participants can ask clarifying questions, as long as it’s not “Is X the question?”, and bet additional units of “punishment” if the answeree chooses to conceal the question. Of course, if the answeree does reveal, the people who bet will take the “punishment” instead.
After over 30 sessions in the past 3 months, a few things have been hotfixed since the in-person game:
One-time perishable links – While not the be all end all, vua.sh lets us create a “secret messages” where only the people with the link can access the question – and only once. Once the link is opened once, it’s dead. So, this gives folks a peace of mind knowing that no one can go back and find out what the questions are. The people who create these questions are the last group/individuals who play.
One-slide Powerpoint presentations, reminiscent of Jeopardy, with increasing risk/depth factor of questions, scaling punishments with question difficulty/depth.
Mailing the “punishments” to the people I’m playing with, like Sean Evans and his team does for their show, Hot Ones, where they mail their 10 hot sauces to their guest before the interview. This way, I can keep people accountable to the punishments
Zoom, or an equivalent web conferencing tool – Social distancing at its best. Even better now, ’cause I get to play with people outside the Bay Area as well.
In the past few months, Rolling Funds by AngelList have been the talk of the town. Instead of having to raise a new fund every 2-3 years, fund managers can now continuously accept capital on a quarterly basis, where LPs (limited partners, like family offices or endowments or fund of funds (FoF)) typically invest with 1-2 year minimum commitments. Under the 506c designation, you can also publicly talk about your fundraise as a fund manager. Whereas the traditional Fund I typically took 11 months to fundraise for a single GP (general partner of a VC fund), 11.9 if multiple GPs, now with Rolling Funds, a fund manager can raise and invest out of a fund within a month – and as quick as starting with a tweet. AngelList will also:
Help you set up a website,
Verify accredited investors,
Help set up the fund (reducing legal fees),
And with rolling funds, you can invest as soon as the capital is committed per quarter, instead of waiting before a certain percentage of the whole fund is committed as per the usual 506b traditional funds.
Moreover, Rolling Funds, under the same 506c general solicitation rules, are built to scale. Both for the emerging fund manager playing the positive sum game of investing upstream as a participating investor, and for the experienced fund manager who’s leading Series A rounds. In the former example with the emerging fund manager, say a solo GP investing out of a $10M initial fund size, 20 checks of $250K, and 1:1 reserves. Or the latter, $50-100M/partner, writing $2-3M checks. Maybe up to $7-10M for a “hot deal“, which by its nature, are rare and few in between. In the words of Avlok Kohli, CEO of AngelList Venture, Rolling Funds are what funds would have looked like if they “were created in an age of software”.
I’m not gonna lie, Rolling Funds really are amazing. Given the bull case, what is the bear case? And how will that impact both emerging and experienced fund managers?
Humans are one of the most awe-inspiring creatures that have ever graced this planet. Even though we don’t have the sharpest claws or toughest skins nor can we innately survive -50 degrees Fahrenheit, we’ve crafted tools and environments to help us survive in brutal nature. But arguably, our greatest trait is that we’re capable of writing huge epics that transcend our individual abilities and contributions. And share these narratives to inspire not only ourselves but the fellow humans around us.
A member of the our proud race, founders are no different. They are some of the greatest forecasters out there. To use Garry Tan’s Babe Ruth analogy, founders have the potential of hitting a home run in the direction they point. They build worlds, universes, myths and realities that define the future. They live in the future using the tools of today. In fact, there’s a term for it. First used by Bud Tribble in 1981 to describe Steve Jobs’ aura when building the Macintosh – the reality distortion field.
Yet, we humans are all prone to anxiety. A story nonetheless. Simply, one we tell ourselves of the future that restricts our present self’s ability to operate effectively. Anxiety comes in many shapes and sizes. For founders, one of said anxieties is attempting and worrying about the future without addressing the reality today. In the early days, it’s attempting scale before achieving product-market fit (PMF). Building a skyscraper without surveying the land – land that may be quicksand or concrete.
Here are four signs – some may not be as intuitive as the others:
This week I revisited David Sacks’ essay Your Startup Is a Movement. It was first brought to my attention during my conversation with Yin Wu, founder of Pulley. And again, with a friend who recently jumped into venture after an operating career, particularly around the topic of our investment theses. Our conversation underscored his fourth point in his Movement Marketing playbook.
It’s much easier to compete in the market of one – the only one – than in a market to be the best one. As some VCs call it, companies that are “allergic to competition.”
Why?
The goal for any startup is to achieve product-market fit before your competitors, especially your incumbents, notice the market opportunity. Frankly, the incumbents have more cash, more talent, more resources, more in every regard except one… problem obsession. Insatiable desire to fundamentally change the way we live. And with that desire comes speed.
It reminds me of a time over a decade ago, right after the spectacular Olympics which put the greatest Olympian of all time on center stage. Our swim coach asked the team, “How do you beat Michael Phelps?”
A few of my teammates suggested we work longer and harder. Another suggested that we should’ve started younger. And another suggested we wait till he retired. But my coach responded, “Just don’t race against him in butterfly. Race him in breaststroke.” While Michael Phelps is by no means slow in breaststroke, still faster than 95% of swimmers out there in it, the theory holds. It’s the stroke one would have the best chance to beat him in. But what stood out to me most was what the wisecrack on the swim team shouted out as an answer.
“He can swim while I run.”
And he was right.
Another fascinating aspect I realized in hindsight was that no one suggested the question was impossible.
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Not long ago, I was asked: “Why do founders often fail as CEOs?” A rather provocative question. I wouldn’t go as far as to say founders often fail as CEOs as a blanket statement. Equally so, the question isn’t “why”, but “where”. People can “fail” in their positions for any number of reasons. “Why” is simply that they didn’t perform well under the expectations of the role. The better question comes down to “where” might they need to watch out for. Still so, there are many. But one that often catches founders by surprise is: the (in)ability to scale themselves with the company.
Founders often make great CEOs at the beginning. What I’ve seen and heard more of is the inability of founders to scale at the same pace as their company. As the company grows, the job description of the CEO changes as well. The same is true for all executive/leadership positions in a company. Something I personally love is at Shopify, every year the executives have to requalify for the position they hold, and that includes the CEO.
In the early stages, the CEO is a maker. They’re the most obsessed about the problem space. Their main job is to get the product to market. And test if it resonates. They get shit done. As the company scales (post product/market fit), the CEO is a manager. They’re no longer working on the daily/weekly updates of the product at a granular level, but making sure the entire organization functions as a well-oiled machine. How can the CEO enable their team members to be greater than the sum of their parts? To quote Paul Graham of Y Combinator, it’s the difference between the maker’s schedule and the manager’s schedule.
When you’re a small team of 5 or even 20, you’re the product lead. You decide the direction in which the product will go and you’re involved in the day-to-day nuances of the product itself, from the UI/UX to talking to customers to discover pain points, etc. When the company grows to 50 – give or take, you have already hired or are going to hire your first product manager, which means you won’t be involved in the day-to-day anymore, but rather in the larger strategic directions of the company and the product. As a maker, your decisions are tactical. On the other hand, as a manager, your decisions are strategic.
Similarly, Ben Horowitz, the second name in the investment firm, Andreessen Horowitz, wrote about peacetime and wartime CEOs. In the early days of a company, you’re at war. You’re selling; you’re networking. You’re fighting in a competitive market of attention. Not only from your customers, but also potential hires and investors. As your company scales past $100M ARR (among any of the other heuristics when you stop being a “startup”), you’re now a category leader and possibly a market leader as well. As the market leader in “peacetime”, you decide the rules of the game. You’re working to maintain your market position. You focus on the masses, and not the niches as much. And therefore, the job description of a leader born in an era of war is different from a leader born to maintain peace.
Many founding CEOs understand that their role will evolve over time, but unfortunately, many are still unable to keep up with the pace at which the company evolves. Effectively, CEOs have to always be one step ahead of the company’s growth to prepare the infrastructure for the rest of the team to grow into.
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Predictions are in season. It started back during the holidays. A number of my friends, colleagues and folks online have been making predictions of what is going to happen this year. And I’m sure some are sure to hit. Many to miss. Since I’ve been reasonably active on Quora and given my role in the startup community, many people have asked me: “What are some of the best startup ideas to start in 2021? In 2022?”
Over the past year, the pandemic became a forcing function for late majorities and laggards of the adoption curve to pick up newer social and technological trends. Subsequently, accelerating many timelines. Timelines that would have otherwise been realized two, three, maybe even five years out.
Social is back.
Consumer social has been back. The pandemic has saved on average 2-3 hours of travel time per day for the average worker, job-permitting. At the same time, quarantining has reduced, if not eliminated, many in-person interactions with friends. More time means people seek to find more places to place their attention.
Enterprise social is here. The pandemic has forced many businesses to go remote. Similarly, there’s been a migration away from metropolitan/urban areas to save on rent, as well as an opportunity to not be shackled by geography in the past few months. Now, as well as “post-pandemic”, businesses, as well as individuals, are looking for new ways to improve efficacy, communication, and culture at work. In efforts to both retain and attract talent.
Impact-driven and socially-responsible businesses are hot.
Diversity in the board room is gaining traction. And it’s created ripple effects in the financial world. LPs are demanding venture funds to invest in diverse founders. At the same time, when diverse founders consider which investors to bring on, they look at if the checkwriters at the firm are diverse. Some investors have acted proactively; some reactively. Nevertheless, the cogs are moving.
E-commerce, entertainment, streaming, gaming, remote tools, edtech are all up.
SPACs and 2020’s string of IPOs have created many “overnight” millionaires.
Investing in the stock market, in alternative assets, in syndicates, and more mean more capital is being recycled back into the economy at various stages.
There is more capital available at the early stages. New angels. More startups. Just like pre-seed/seed is the Series A from a decade ago, more institutional investors will move upstream. Who knows, there may be a pre-pre-pre-seed round one day.
Innovation around the home office space is building momentum.
Unsurprisingly, Zoom fatigue is real, which will only led a hand in hybrid work-life models post-pandemic. Equally so, innovation around virtual meetings is only a matter of time.
Oculus brought down the price of a VR headset to be as much as a video game console, which means more people can and will adopt VR. Leading to larger markets and more diverse consumers for VR/AR. More startups.
Mental health has taken center stage, where it had previously been overlooked or disregarded.
When will the pandemic end? I don’t know.
When will we get vaccines? While experts have given us an expected date, I also don’t know.
When will “normal” return? I’m willing to bet it’s on the magnitude of years rather than months. Then again, will “normal” ever return? I might be completely wrong, but I’m willing to bet the “normal” we knew will never return. But instead, we’ll have a normal 2.0.
In truth, I can only answer what I see in my very narrow periphery. And by definition, there are a hundred-fold more that are in my blind side. And the thing is, what I’ve thought of I guarantee many other founders have already seen, tried, or are trying. What I’m looking for this year, and every year, is what I haven’t thought of yet. But when I hear and see it, it’ll click. Everything I know will make sense.
Investors are lagging indicators of innovation.
Founders are the leading indicators. Listen to them.
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