Tag: lunchclub

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The Cure to the Loneliness Epidemic

lonely, alone

This past weekend, in my endless doom-scrolling, I stumbled across one of Olivia Moore’s amazing threads.

The most provocative part was when she posed the question: If you need an app to make friends, is that a negative signal?

The solution, in her words, “the long term winner here is likely to be… interest-graph social networks.” Furthermore, “platforms that give people an ‘excuse’ to gather, either IRL or digitally” are immensely powerful. Where friendship is a byproduct of usage but not the main or sole purpose of being on these platforms.

I agree that dual-purposed social networks and platforms are a wonderful solution, but, and I may be biased, I don’t think it’s the only solution.

As a former power user of networking or friend apps like Shapr and Lunchclub (yes, I used an app to make friends), I’ve made some great friends via both of those platforms. But at the same time, I was an early user for both. Both had yet to be widely adopted at the time.

For Lunchclub, I was using it at a time when everything was in-person, and you only had the option to meet people on Fridays at 2PM or 5PM at either Sightglass Coffee on 7th Street or Caffe Centro in South Park in SF. The latter unfortunately closed recently. And that was it. There were no other options. I had often joked with friends that as you were meeting your friend match that week at Sightglass, you would be sitting next to the person you would match with next week AND the person sitting five feet over would be who you matched with last week. It was a tight community, even if it was an unintentionally designed community. A group of hackers, early adopters, investors, and people just doing cool things.

Then, as Lunchclub pursued scale, quality declined. And as Olivia shares in her thread above, bad actors ruined the experience altogether. The same was true for Shapr. For Clubhouse. Just to name a few.

But dating apps nailed it. They’ve reached widespread adoption. Olivia postulates it’s because they offer data points and filters that you can’t find anywhere else. For instance, who’s single. She’s right. But there’s another reason. These apps promote interest in others. Or amplifying inherent motivation to be on said apps.

Let me elaborate.

Be interesting and interested

I’ve written about the above line before. Here. And here. And likely a few other places that’s escaping my memory at the time of writing this piece.

The thing is most platforms promote being interesting. The heavy profile customizations. The ability to share your own thoughts. Platforms that incentivize you to go from a consumer to a creator. A lot of it is about me. Look at me. Look at how cool I am. How cool my life is. The strive for perfection.

How can I ever be like the person I’m following? My life is nowhere near as awesome as her/his is. Most social platforms prop users up as a point of comparison.

All that to say, there are a lot of apps that help you be interesting, but not enough that help you be interested. The latter takes work. There’s a line that Mark Suster recently shared on a podcast, and I love it! Citing the late Zig Ziglar (which by the way, is an awesome name), Mark shared, “People don’t care how much you know until they know how much you care.”

I want to underscore that line one more time.

“People don’t care how much you know until they know how much you care.”

It’s why I love my buddy Rishi’s recent piece on how to build and maintain meaningful relationships.

Source: Rishi Taparia’s Building Relationships Through Research

In Rishi’s essay, he shares that there are three levels to doing your homework — each deeper than the last — and show that you care:

  1. Level 1 – The Basics: LinkedIn, Common Connections, Google, and Company Website
  2. Level 2 – Digging in: Social Media
  3. Level 3 – Going Deep: Podcasts, Writing, YouTube et. al

The purpose isn’t to be all-encompassing, but to show that you care for the human sitting across from you. It’s the intention that matters.

The late David Rockefeller built prolific Rolodexes to show that he cared. In fact, it’s cited that his handwritten notes on others stood five feet tall and accounted for 100,000 people. Alan Fleischmann once wrote in reference to David Rockefeller that, “If you were so fortunate to be a fly on the wall for any of his countless meetings and interactions, you would hear him inquire about the smallest details of his guest’s life, from a child’s ballet recital to a parent’s recent health concern. Rockefeller’s interactions were said to be ‘transformational, never transactional.'”

And it’s also the small things that matter.

In closing

The reason why I think Lunchclub was so popular in the beginning is in two parts:

  1. The platform reduced the friction — the back-and-forths — of scheduling. They gave you two times, and you either made it or you didn’t.
  2. The platform’s early users were innately curious individuals. When I was invited on the platform, my friend pitched it as, “I’ve learned so much from the people I met.” And my friend was and is already one of the foremost subject-matter experts in her field. The same was true when I began using the platform. People spent more time asking questions than talking about themselves. In fact, in many conversations, it’d be a battle of who can delay talking about themselves more than the other.

People were simply interested. There was no agenda. And no agenda was the best agenda. No one was trying to peddle anything to you. No one was trying to ask you for money or intros. People were the ends in and of themselves, and not a means to an end.

All in all, while there are incredible platforms that help you build friendships through interest and hobby alignment, I do believe there is room for a friend app for the curious. Or at least to help you be a really good friend.

So if you’re building something there, ring me up. That said, no matter how great technology is, with AI and all, every great relationship still needs that human touch. AI and platforms and apps might be able to get you 90% of the way there. But if you don’t complete that last 10% trek, 90% is still incomplete. For those of you reading who are American football fans, running the ball 90 yards from one endzone is still an incomplete. It’s still not a touchdown. You need to run the full 100.

If there’s anything to take away from this blogpost, it’s to be both interesting AND interested. Emphasis on the latter.

And in case you’re curious as to how I approach caring, these might be helpful starting points:

Photo by Lukas Rychvalsky on Unsplash

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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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How to Best Send Email Forwardables

flower, letter, email

Whether you’re a founder or investor or just friends of the afore-mentioned job titles, you’ve most likely been asked for warm intros. The sage advice in the world has always been, that it is better to ask for warm introductions than send cold outreach, leaving the latter to be severely underestimated. Anecdotally, some of my best friends and mentors today came and continue to come from cold outreach.

Most people in this world love to help others. They derive joy and fulfillment in doing so. It enriches their life just as much, if not more so than, it does yours. There are a number of academic studies, like this 2020 one, that show positive correlation between giving kindness and your own happiness. The Ben Franklin effect extrapolates that you are more likely to like someone by doing them a favor. In sum, people want to help others. Investors (and friends of investors) are no exception.

But… the world does not make it easy to do so.

I’m not here to preach kindness. Nor do I think I need to. There are plenty of more incredible individuals in the world who are more capable of relaying that message than I am. But as the title of this blogpost alludes to, what tactical advice is there to:

  1. Help friends of investors/investors help you
  2. Get investors excited to meet you

Why even bother with a forwardable

Founders often ask me: Do you know any investors you can introduce me to? Which, in fairness, is an understandable question when you don’t know who you don’t know. In a world where I’m only helping 10 or less founders total, it’s a great question.

The problem is I, like many other people in the venture ecosystem, am often trying to help more than 10 founders. For me, I’m helping founders I’m actively advising, On Deck founders, Techstars founders, Alchemist founders, founders who are intro-ed to me, founders who cold email me, and founders who come to my weekly office hours. The number varies, but in any given week, I’m sending between 20-40 founder intros. And given that, I face a few obstacles:

  1. The colder the connection and the longer the time since we last spoke, the more likely I am to forget what you’re building. I’m sorry; I wish I had photographic memory.
  2. As much as I would like, I physically don’t have time to write a curated intro to every person who asks me.
  3. I don’t want to ping the same investor/advisor multiple times in a week without clear reasons why. The investors who have more social clout get more intros than others. And they only have so much time and attention they can give in their inbox/socials to new people.

Rather, I flip the question on founders. Build a preliminary list of people you would like to chat with. See who you know that’s connected with these individuals. Do note I did not say firms. Long term marriages begin with each human not their last name. If I’m a 1st degree connection to them, then reach out to me and ask:

“I’m currently raising for [startup], [context]. I saw you’re connected to [name], [name] and [name]. Would you be comfortable reaching out to them for a double opt-in intro? And if so, happy to send you forwardable to make your life easier.”

To which I respond…

What goes into a forwardable

While everyone has their own preference, I prefer all the forwardables I send to have three things – nothing more, nothing less. Nothing more, since busy individuals don’t have time to read essays. Nothing less, well, it is what I call the minimum viable forwardable. And yes, I just made that term up.

  1. The one metric you think you’re doing better than 95% (99th percentile is ideal) of the industry. On the off chance that the afore-mentioned metric isn’t obvious as to why it’s crucial to the business, spend another sentence explaining why. For example, if you’re a marketplace, the metric you’re slaying at might be the percent of your demand who organically converts to supply. While it may not be obvious to most, it is one of the earliest signs of network effects. Your customers love your product so much they want to pay it forward.
  2. 1-2 sentences as to what your startup does
  3. Why this recipient would be the best dollar on your cap table

The first two are things you, as a founder, should have readily on hand. The third is often the one I get the most questions on. What does “the best dollar on my cap table” mean? And how would I find that?

Why the best dollar is important

Fundraising is often seen as a numbers game. Analogously, so is networking. Both of which I agree and disagree with. I agree with the fact that you have to engineer serendipity. You have to increase the surface area for luck to stick. And to do that, you need to talk to a s**t ton of people. I get it. The part I disagree with is that a game optimized for quantity is often conflated with templated conversations. Or worse, purely transactional ones. Relationships don’t scale if you approach it from scale.

… which is why I need the third point in every forwardable. If you are unable to provide why an investor would be the best dollar on your cap table, then:

  1. You don’t need a warm intro. And that’s fine. Some investors’ inboxes are less saturated than others. If it might help, here is also my cold email “template.”
  2. I’m not your person. I, like any other person facilitating an intro, am putting my social capital on the line to get you in front of the person you want. And if you don’t think it’s worth the time to tailor your email to one that I would be comfortable sending, then I just can’t be your champion.

Examples of the best dollar

Predictably and unpredictably so, there are many ways to make someone feel special. While I will list some of my favorite that I’ve seen over the years, the list is, by no means, all-inclusive. In fact, I’m sure some of the best and most timeless ways to showcase an investor’s value add is still out there waiting to be discovered. And for that, I leave it to you, my reader, to surprise me and the world. The below, hopefully, serves as inspiration for you to be tenaciously and idiosyncratically creative.

I’ll break it down into two parts: (1) what do you need help on, and (2) what help can they provide.

  1. What is the 3 biggest risks of your business? The biggest one should be solved by you or someone on the team slide. The biggest risk should be the minimum viable assumption you need to prove that people want your product. At the early stages, sometimes that’s showing you have a waitlist of folks begging for your product. Sometimes, it’s just proving you can build the product (i.e. a deep tech product or AI startup). The next two risks, which aren’t as great in magnitude, but still prescient, requires you to be scrappy and at times, bring in external help.
  2. What are your potential investors’ value adds? Where does their tactical expertise lie in? There’s no one-stop shop for every investor for this… yet (hit me up if you’re building something here). But nevertheless, I find it useful to search “databases” of value adds on:
    1. Polywork
    2. Lunchclub profiles under “Ask [name] about…”
      Note: I forget if Polywork and Lunchclub are still invite-only, but if they are, feel free to use my invite codes here for Polywork and Lunchclub. For those curious, this is not a sponsored post.
    3. Doom-scrolling to the bottom of their LinkedIn profile and reading their references
    4. Looking through their portfolio and “ex”-portfolio and reaching out to said founders and asking:
      • Who, of their existing investors, if they were to build a new business tomorrow in a similar sector, is the one person who would be a “no brainer” to bring back on their cap table? And why?
      • Who did they pitch to that turned them down for investment, but still was very helpful?
      • Subsequently, referencing (with the founders’ permission) those founders when reaching out/getting introed to those VCs.
        Note: Generally, Crunchbase and Pitchbook has more exhaustive lists of portfolio companies oftentimes than their website of “selected investments.”
    5. Any publication/press release (i.e. Techcrunch, Forbes, etc.) where founders share how helpful their investors were. This may require a bit of digging.

As a general rule of thumb, the more specific you are, the better.

On the flip side, some examples of lackluster “best dollars” include:

  • Just stating which industry they invest in
  • Stating that they’re ideal because they work at X firm. You’re drafting individual team members for your all-star team, not brands.
  • Stating that they’re ideal because they USED to work at X firm
  • Using the recipient as a means to an ends. In other words, you want to get in touch with someone they know rather than they themselves. No one feels special when you like them only because they know someone else you like more. Either find a warmer connection to the “end” person or cold email.
  • Being generic

In closing

As my friend “James” says, “Do all of the leg work. Help them help you as much as possible. Everyone wants to be the hero that helps someone else, but people have lives – and if you’re the one that is getting the value, bring the value as much as possible.”

If you were the recipient of said email, what would make you say: “Absolutely?”

Photo by Kelly Sikkema on Unsplash

May 9th, 2022 Update: Added the “Why even both with a forwardable” section

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

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How to Develop Intuition as a Rookie Startup Investor

intuition, how to develop intuition

In the month before I started this blog in 2019, I had written 20 odd blogposts as a safety net in case I ran out of ideas in my weekly cadence. Most of which never had the chance to stand in the limelight, including my first one on intuition. Particularly, my one on intuition. Over the years, I’ve honed my own “intuition” – if I may be bold enough to call it that – on vetting startups. My intuition today is very different beast from my intuition 2.5 years back. This essay is a product of such constantly evolving self-discovery.

The spark of my intuition

When I first started my career in VC at Berkeley’s SkyDeck, I reached out to about 70-80 investors for a coffee chat, in which I posed one of my now favorite questions. What is the difference between a good and a great VC? Unsurprisingly, but frustratingly enough, most of the answers came in the form of “intuition.” Or its cousin, “pattern recognition.”

To me, who was still so new to venture, that was the best and worst non-answer I could get. Yet despite knowing that there was truth in their answer, I was still directionless. It wasn’t until an afternoon walk through San Francisco’s South Park with a very generous, but curt gentleman who carried quite the luggage beneath both of his eyes that I got the answer I wasn’t looking for.

“See a shitload of startups. When you see 10, pick your top 2. Then see 100, pick your top 2. Then see 1000, and again, pick your top 2. You’re going to notice that your podium will look quite different the more founders you meet with and the more startups you see.”

Recently, Plexo‘s Lo Toney told our fellows at DECODE the exact same thing:

And so, in hopes to guide someone in my shoes when I first started, here’s how I think about building intuition. Of course, I am a human and will always be a work in progress. It’s likely that next year I will see things differently than I see them today. Nevertheless this essay is a record of my thoughts today in early 2022.

Where to find a “shitload” of startups

There are multiple avenues these days for deal flow, including, but not limited to:

When I first jumped into venture, I used to ask my friends who I knew were early adopters (a product of going to a school in the Bay Area, like Berkeley) of products to recommend me 3-5 startups/products every other week. When they did, I would treat them out to boba. And if they introduced me to the founders for those products that I’d be excited to talk to, I’d treat my friends out to a small meal – around $10-15. At the same time, at SkyDeck, I tried to sit in on as many meetings as I could, particularly the ones around deal evaluation at the beginning of every cohort.

While I do recommend all of the above, the best training grounds for developing intuition is when you talk to founders yourself.

The five senses

Google defines intuition as “the ability to understand something immediately, without the need for conscious reasoning.”

Source: Google

So, by definition, intuition is subconscious – built upon the brain’s natural ability to recognize patterns. An apt synonym, according to the trillion-plus dollar company… “sixth sense.” A sixth sense birthed from the intense neural processing of the five other senses. So, it was only logical for me to understand the sixth sense by first fully comprehending my five others. That said, I use the five-sense nomenclature loosely, but it nevertheless has become my guiding framework for venture decisions over the years.

Smell

“I invested based on my sense of smell.” These are the very words Softbank’s Masayoshi Son shared about his early investment in Alibaba. And he said the same about his investment into Yahoo! In fairness, his words make for good PR. And may just seem like smokes and mirrors. But for Son to have chosen Jack Ma out of the 20 prospective Chinese entrepreneurs he met with to invest in, he must be onto something.

There are two ways to develop an acute sense of smell as an investor, which you can develop in tandem.

  1. Spending a lot of time looking into the market
  2. Talking to many founders

On the former, we’ve been seeing a number of funds incubate their own startup ideas as a result of investors becoming deep subject-matter experts, but are discontent with the current ideas or teams on the market right now. Two examples include General Catalyst and Founders Fund. Draw market maps. Write research reports. Follow the experts on socials or on their blogs. Even better, talk to them as well. As a general warning, it’s hard being a generalist here. I would pick a few industries and/or functions you’re excited about or knowledgeable in already. Go deep before you go wide.

A few questions that have served me well include:

  1. What kind of inflection points are we at in the market? In what areas have headwinds become tailwinds?
  2. What are the technological, political, and/or socio-economic trends to be aware of right now? And where do these trends set up the world tomorrow to be?
    • I really encourage investors here to dream a little bit. To envision a world given these trends in which you’d be excited to have future generations live in.

On the latter, while Masayoshi talked to only 20, you can assume you he went through at least ten times that number of decks and business ideas. There’s no better practice than being in the field. Assuming you’ve taken step one (i.e. researching the market), one of the best litmus tests I’ve used to gauge a founder is their ability to riff on adjacent subjects to the business with me. Are they capable of going on tangents that really demonstrate domain expertise? Or are they caught up in the myopia of just their business?

Taste

There’s two kinds of tastes in which I look for, almost subconsciously, now.

  1. Have they tasted excellence?
  2. Have they tasted blood?

On excellence, many investors out there look for prior success in the field. For instance, previously founder of a unicorn exit, early employee or key executive at a now-successful company, or former big-time investor. Admittedly, there are only a small handful of these individuals out there. But I knew in my early days of scouting, I was at a massive disadvantage here for two major reasons.

  1. I didn’t have strong connections with most of this subset of the entrepreneurial market.
  2. This was also a founder persona I didn’t have unique insight to. In fact, it was general consensus to always take first meetings with these individuals in the venture industry. And as I learned early in my venture career, you make money either if you’re right on consensus or right on non-consensus. The latter of which is counted in multiples instead of percentages, which I’ve written about here and here.

In knowing so, I look for excellence, period. Have they tasted earned glory in any discipline? Do they know what it’s like to succeed in their field? And do they know what it takes to get there? On the flip side, do they know how hard it was to get there?

On the other hand, for blood, I want to know a founder’s propensity for conflict resolution. When was the last time they fundamentally disagreed with their co-founders? And how did they resolve it? Conflicts are inevitable. They’re bound to arise when you’re putting so much at stake for a common goal. I care less about the fact that they do come up, but more about that when they do, the team doesn’t just fall apart.

Every once in a while, I might disagree with the founder as well. And hear I look for the founder’s knee-jerk reaction and their ability to engage in thoughtful discussion. That does not mean they cannot disagree. Neither am I looking for another yes-person. But are they capable of helping me, and themselves, explore new horizons? Are they open-minded enough to entertain new possibilities, but still hold a remarkable level of focus to their 12-month horizon?

Touch

How high-touch or low-touch is this business? How much legwork does an investor need to do for this business to 10x its KPIs (within the next 12 months)?

For me, during my first meeting with the founder, ideally before, I try to answer two very simple questions:

  1. What is the biggest risk of this business?
  2. And is the person who can solve this risk on the team slide/in the room?

99% of the time, the person who can solve the biggest risk of the business has to be in the room. For instance, if it’s a machine-learning (ML) product, it’s a technical risk. So at least one of the co-founders must be a technical genius, not three MBAs. If it’s a B2B SaaS product, it’s a distribution risk. Meaning someone on the team must have deep connections to key decision makers to their target customers. In the early days, that’s really just at least one to two big-name customers. And ten other referenceable businesses. The second biggest risk is sales, and that I count on the founders’ ability to hustle.

1% of the time, and this is probably an exaggeration, you just have to really believe in the founder AND the product or market.

Hearing

Do founders spend more time talking, or more importantly, listening to their customers than they do in Rapunzel’s tower?

While I don’t ask all of them (since we’re guaranteed to run out of time before we run out of topics), here are the questions I consider when assessing how boots-on-the-ground a founder is:

What are customers saying about their product? The good? And the bad?

How did they acquire their first users/customers outside of their existing first degree network? Where from? What messaging do they use?

What is their customer win rate? In knowing so, what worked and what didn’t? At what point in the onboarding process do customers churn? What are their assumptions for why churn happens?

Do they know the numbers of their business (and ideally the market) like the back of their hand? For numbers of the market, are they able to recall the sources of most important numbers? For product metrics, how well do they know the main ones, like engagement, churn, monthly growth rates (over the past 3 months), net retention, and so on? Every so often, there’s a number or two, the founders are not aware of. And it’s fine. The test is once they realize their blind spot, how quickly do they move to patch it up? Subsequently, report back to me about their updated data measurements.

Of course, my job is not to distract founders. And I really try my best not to, so I don’t ask they measure superfluous metrics, unless I really do believe they’re crucial to the business.

Because I usually talk with founders who are pre-product-market fit, I usually lead with the question, “what does product-market fit look like to you?” Are they able to arrive at an actionable and measurable metric to optimize for? And can they back up why that metric is a good proxy for product-market fit?

(In)Sight

Can this founder teach me something new? Something that I never thought of or heard before, but makes complete sense. Is it a preposterous idea but backed by logic? Or does the founder have an original (and money-making) angle to what is already unoriginal? As an investor, especially as you see more startup ideas, the latter question is likely to surface more than the former.

Once the original insight is uncovered, it is then up to me to figure out the potential energy of the insight. How far can this insight take this team? Is it likely that this insight will uncover more insights down the road?

As an investor, you want to be right on the insight and team, not one or the other. Mike Maples Jr. articulates it best when he said, “We realize, oh no, this team doesn’t have the stuff to bend the arc of the present to that different future. Because I like to say, it’s not enough. […] I’d say that’s the first mistake we’ve made is we were right about the insight, but we were wrong about the team.”

“I’d say the reverse mistake we’ve made is the team just seems awesome, and we just can’t look past the fact that they didn’t articulate good inflections, and they can’t articulate a radically different future. They end up executing to a local maximum, and we have an okay, but not great outcome.”

In closing

Seedscout’s Mat Sherman wrote a great Twitter thread last month to help founders who are outsiders raise venture funding.

The fact of the matter is that despite the venture industry being a rather well-connected circle of individuals and firms, most entrepreneurs – both currently and aspiring – are outsiders. If you can’t hit up a close friend to write you a couple million dollars, you’re an outsider. This essay, while written for new investors, hopefully, is equally useful as a guide for founders looking for some insight as to how investors think. Or at the very minimum, how I think.

Photo by Liam Shaw on Unsplash

Any thoughts here are mine and mine alone. They are for informational and entertainment purposes only. None of this is legal or investment advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

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