Work Like You Mean It: Why I backed Wethos to change the future of work.

If economists tried to measure the cost of the malaise that the election of 2016 left, we'd undoubtedly see billions, if not more, lost in worker productivity. 

At the same time, I don't think I've ever seen more political engagement in my lifetime--and not just political engagement, but all sorts of action around causes they care about.

These two realities are linked.  If you're not doing something to positively affect the world around you, you've likely been overcome by a lack of motivation.  You're realizing that passing your work hours for pay alone, without meaning and impact, just isn't cutting it anymore.  

We've seen the move towards more flexible work, but I think it will pale in comparison to the shift towards meaningful work.  The best and brightest are going to need a much better reason to work for your company than the perks and benefits--the work itself is going to have to be meaningful. 

That meaning isn't going to be something you search for on a traditional job board branded around impact--it's going to be an inherent part of the way you search.  What you care about is going to be a filter as important as geography.

That's where Wethos comes in.  I met Rachel Renock a few months ago at a SheWorx pitch event.  I got what she was doing right away.  Starting with freelancers, she was creating a place where impact was the guiding principle by which talented people sought ways to share their professional talent.  

It reminded me of when I first heard the pitch for Kickstarter and then witnessed what it would become.  While it may have been the way some bands would start funding their next album, it would go on to affect and inspire a whole generation of not only creative projects, but business plans as well.  Pre-sales would enable companies to exist off the financing of the fans most passionate about their vision for products.  

I was reminded of that when I interviewed Rachel's co-founder Kristen about how she hired their first two developers on the Startup Recruiting Podcast.  What struck me was how they were bought into the passion of the team so early on--almost in a way that made it seem all too easy to hire them.  That's going to be the case in the future.  If you're not convincing someone of the impact they can make doing their primary job, you're going to have to overpay to make up for the lack of meaning you're providing.  While they're focused on just freelancers today, still a huge market, I'm convinced they'll not only expand to all meaningful work in the future, but they'll help turn more work meaningful by changing the way companies design roles for their talent.  Eventually, they'll impact how companies design their own goals--because otherwise they'll die from lack of talent.  

I look forward to working with the Rachel, Kristen, and Claire, as well as some fantastic co-investors, like Flybridge and Corgin.  Jesse Middleton at Flybridge led their investment--and Jesse knows a fair amount about seeing the future of how people work from his days as the founder of WeWork Labs.  Also joining our round is Fabio Rosati, who was CEO of Upwork/Elance.  Together, we'll help impactful organizations find the talent they need to make a difference--and help talent find work that makes a difference in their lives.

Introducing Petal, Providing Access to Credit to Thin File Consumers

One of the biggest fears about the future of data is that everyone will turn into a number--that algorithms will turn everyone's personal experience into a single score that will decide whether or not you get what you want, a job, a house, a car, financing for a new business etc. or whether you get shut out.

Actually, you don't have to wait for that to happen.  Consumers have been living this reality since 1956.  That's when a company called Fair Issac, or what we now today as FICO, started selling consumer credit data to lenders.  A four billion dollar publicly traded company basically decides who gets credit and who doesn't--and if you don't already have credit and you're invisible to FICO, you're going to get financially left behind.  As they say, it costs money to make money, and without access to credit at key moments in your life, you're going to wind up on the wrong side of the growing gap between the rich and the poor.

Just because you're invisible to FICO doesn't mean you haven't been doing anything financially.  You've been paying your bills on time, socking some money away for savings--you just never had a credit card or took out a loan.  Maybe you immigrated from another country.  Either way, this shouldn't stop you from being able to get credit when you need it.

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That's what I believe and that's what Petal believes as wellBrooklyn Bridge Ventures led their seed round last winter.  

Petal is a simple, no fee credit card that looks at the money you make and the bills you already pay to help you qualify instantly. That means you can get a great credit card and start building your credit history, even if Petal is your first credit card.  You can sign up to be one of their first customers here.  

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It's not only about building up a score--it's about learning how and where to use credit appropriately.  Petal provides transparency to consumers through their technology to help them make smart credit decisions.  What card do you know tells you how much you'll pay in interest *next month* based on what you pay now?

I first got introduced to them by my friend Kevin Marshall back in March of 2016 when they were Creditbridge (Petal is to Creditbridge what Frogger is to Highway Crossing Frog, I suppose).  He sent me a pitch and I didn't quite understand the issue, so I passed.  Undeterred, they kept plugging away, working on the brand and the message.  They got mentioned to me again by Nan Li at Obvious as an interesting team he had just met.  When you start to hear of a team multiple times from multiple people (which is the same thing that happened to me with Canary and The Wing), you take notice.  I don't mind cold intros, but market buzz helps push things over the line to at least take a meeting.  

In our first meeting, which was theoretically scheduled for 45 minutes, I sat down with co-founders Jason and David for more than two hours.  What sold me was their fluency in this market.  It was obvious that they had spent most of the year becoming the smartest possible founders they could in their space--and talking to every founder who had done anything adjacent.  That's important for a VC.  You don't want to be able to be smarter than your founder about a pitch after an hour of Googling around.  

In the last ten months since I've invested, I've seen them execute in the most organized and professional way possible--it's not easy to stand up a consumer credit card company from scratch.  They've gained the attention of large players in the space and attracted some high quality talent to their team.  

As we saw with the Equifax breach just yesterday, the monolithic world of centralized control over your financial life is being disrupted more and more each day.  New consumer friendly brands are being created and new products are coming to market.  It's a dynamic space and I'm excited to have gotten the opportunity to back Jason, Andrew, David, Jack and Berk and the rest of the team in their mission to bring credit and financial opportunity to underserved "thin file" consumers.  

Not Interested: How to know whether you've actually got an investor on the hook.

I don't think there's ever a time when I feel more like I'm raining on parades as when founders tell me how interested other VC firms are in investing.  I've seen it time and time again where founders, understandably apprehensive about fundraising, read too much into their engagement with investors--especially non-partners at firms.

The founders will say things like the following--and then comes my splash of cold water, which is honest, but also makes me feel like the bad guy, or not enthusiastic about the company.  In reality, I just don't want the founder spinning their wheels and wasting their valuable time.

"They're interested, but it's too early."

There are tons of examples of later stage venture firms not only placing seed bets, but also skipping right to Series A with huge "seed" rounds right out of the gate.  If Mark Zuckerberg was going to start a new company tomorrow, do you think he'd be too early for anyone?  No.  There are also lots of examples of companies who get funded by later stage firms that don't have the metrics that we've been told you need--$150k in MRR, a million users, whatever. 

"Too early" is a pass.  

You might take enough risk off the table for them in the future and they might come in at a later right, sure... but if they're not writing a check now, they're passing.  When you get a pass, move on, don't keep your hopes up, and go back to work.

"They're very interested if you can get a lead."

There are some firms that, as a policy, don't lead.  That's fine, but saying you're interested pending a lead is not saying you're committed.  Committing is saying "If you find a lead, we'd like to come in for $200k, assuming standard terms and the price isn't anything more than X."  Even better is when that firm reaches out to firms that do lead and says, "We've committed, but we need a lead."  Those people are basically in, and everyone else is just sitting on the sidelines with their thumbs in their butts wasting your time.  Many of those people are assuming you won't get a lead, and they're just being polite, and if you do get one, it's a good way to cover themselves in case they missed something.  This way, they try to guarantee that if someone else jumps in, they get a second look.  It's a free option, so why ever give a definitive no?

"[Non-partner] is really excited about it and is going to bring it to their partner meeting."

Listen analysts and associates...  I've been in your shoes.  I've been the junior person around the table trying to get partners excited about a deal.  The absolute worst thing you can do is fail to be transparent with a founder as to where your team is on a deal, and to lack the firm awareness to realize whether you have any internal traction.  It wastes founders' time and ruins your credibility.  So, when you know that founders are going to hinge on every little indication of interest, you should be straight with them about your process and who gets to make the decisions.

Unfortunately, even when you are transparent, the words "partner meeting" make founders think they are just a week away from a term sheet when, in reality, they're one of many line items likely to be passed over. 

What you really need is partner interest.  Even when you've got a principal, like I was at First Round, who can do deals, you still need partner interest to get the check approved.  So, realistically, unless you've got partners showing up to meetings with you, staying the whole time, and engaging with you after, taking multiple meetings, you really don't have anything.

Two things to watch out for:  The partner who gets dragged into a meeting.  Who set this meeting up?  Does the partner leave after ten minutes?  Do they engage with you after?  Do they show up in the next meeting?

Two is the partner cc'd on e-mail while the junior person does all of the talking.  This happens a lot with growth stage firms that do a lot of random cold calling.  I'll bet these firms have a special account or filter that allows them to ignore that CC, but it makes you feel like the partner is interested.  

"We want to see you get up to X milestone."

First off, like I said before, there are plenty of examples of firms that invest before conventional milestones if they really like something.

Second, this isn't a progress.  It's "come back to us when you get there".  If a firm really thought you had a 100% chance of getting there, why would they wait, potentially risk losing the deal, and pay up for it later?  The reality is that they're just setting a time for a check in.  It really doesn't mean interest at all--especially if they're not engaging.  Engagement means continued customer introductions, or potential talent introductions.  They start acting like an advisor--maybe even having regular calls with you.  

So how can you tell whether or not a firm is actually interested in investing?

a) They give you a term sheet or actually start discussing not only the terms of a deal, but how much they'd like to put to work.

b) You've met all of the people necessary to put a deal together, and those people take initiative to be engaged with you, multiple times.

c) You actually get invited to an official weekly partner meeting.  That's a thing.  

d) Senior people keep hounding you--like, daily.  

How else would you know?  You ask them.

Founders should be asking filtering questions--the kinds of questions designed to kick investors out of their pipeline.  I know it feels good to have a lot of names in a Google sheet, but a lot of those leads are cold or dead.  Find reasons to knock them out by asking questions like "By when can I get a firm yes or no?"  "Who needs to sign off on this?"  "What are your remaining issues?"  "Who in the firm has said they'd like the firm to invest?"  "Who is against the deal that I need to work on?"

Better to be positively surprised that someone came up with an offer than to feel like you're going to get something done and then have your pipeline fall apart.  

On No Sides...

On no sides is genocide an ok thing to promote with your free speech or to organize a group around.

On no sides is the Confederacy, the sole purpose of which was to defend the institution of slavery, a thing to be admired.

On no sides is the eradication of Nazis and the KKK a slippery slope to the end of free speech in our country.  It is perfectly right and acceptable for a society to draw lines--to point to levels of despicable behavior and say "No--in no uncertain terms.  No way.  Not here."  We certainly do this around the abuse of children.  These things do not belong in any kind of healthy, functioning society.  They have no more right to be here than anyone would suggest that cancer cells are a living part of your body that deserve a home.  I'm perfectly ok if a corporation decides that they don't want to be in the business of working with the Daily Stormer--and no, telling a Jewish software developer that they don't have to work for a company protecting Nazi websites is in no way anywhere near the same as saying it's ok for a florist not to do the flowers at a gay wedding.  If you think that a hate site promoting genocide is on the same level as two people who come together because they love each other, I'm at a loss for words for you.

Millions of patriots have already lost their lives in our history fighting these kinds of cancers--cancers that grew or persisted far too long because we didn't draw the kinds of lines that a healthy society should draw.  They didn't die on the beaches at Normandy to allow Nazis to march on our streets here.  They didn't die at Gettysburg to see Confederate soldiers memorialized in our parks.  To argue that removing these groups and movements is desecrating history would be to desecrate the memories of all those who made the ultimate sacrifice protecting us from them.  

Let's talk for a moment about false equivalency and the agenda of the right.  There is a narrative that stretches as far back as slavery itself that blacks are angry, savage, and need to be checked.  Even when the law said we were all equal, our society went down a path of "Yeah, but let's keep them over here."  The country needed a savage narrative to justify that--and it persists today.  Countless media studies have proven that the images we see of people of color in the media are disproportionately skewed.  "Whites represented 43% of homicide victims in the local news, but only 13% of homicide victims in crime reports. And while only 10% of victims in crime reports were whites who had been victimized by blacks, these crimes made up 42% of televised cases."  

When someone tells you that Black Lives Matter is a hate group and uses police shootings in Dallas as their proof, get smart about their agenda and the facts: 

1) First, the Dallas police shooter was not associated with Black Lives Matter.  He interacted with other extremist groups on social media, but not BLM.  

2) Second, the BLM movement has been quick to denounce racially charged violence, unlike the hate groups protesting in Charlottesville where *leaders* of these groups have, on multiple occasions, supported or praised the death of Heather Heyer.  

3) Third, just look at the reasons why these groups exist.  Black Lives Matter started after the acquittal of a man charged with killing an innocent black teen. It was *in response* to violence against black people.  There's no equivalent origin story around white supremacy--of whites being oppressed or being unfairly treated that any rational person would give equivalence to.

4) It has been shown that stories of mass violence on behalf of BLM protestors are either inaccurate anecdotes or cherry picked stories of what winds up being self-defense.  People think they've seen lots of images of angry BLM protestors when the reality is that hundreds of peaceful protests go on in its name with no incidents whatsoever.  The same cannot be said for white nationalism gatherings.  

It's all too easy, though, for working class whites to accept the narrative of angry masses of African Americans pitched against them in opposition.  It's the culmination of the media narratives they've grown up consuming--narratives driven by the agenda to keep working class people divided against each other.  Without division and fear, why would the masses of working class people ever cede the kind of power held by wealthy white people?  You'd never vote to allow corporations to run unchecked or for the gap between the rich and the poor to grow so large unless it was bundled with a set of fear driven policies meant to keep "law and order" by unfairly targeting and keeping down people of color, immigrants and other minorities. 

So while we tear ourselves apart, the rich are picking our pockets.

Slavery is like having a flood in your house.  You don't just pump the water out and call it a day.  You have to throw out every single thing that got wet, otherwise you can get mold.  Slavery was just the water, and by ending it, all we did was get rid of the water.  It's still damp, and we didn't really throw anything out.  

You want to know what this kind of mold does to a society?  Read The New Jim Crow and watch 13TH.  Our society is sick from the mold of racial prejudice.  It's in walls.  Read and watch.  I dare you to and not have your mind opened up just a little bit.

No matter how crappy you think your life is as a working class white person or how much more you deserve, people of color, on average, start out with less than you, have a more difficult time getting a job despite the same qualifications, get pulled over more than you, and get arrested and charged more often for lesser things.  It's a stacked deck.  

For example, there's no difference among drug use rates across races, but blacks get imprisoned for drugs six times more than whites.  

These aren't made up facts like you or I may have heard on some cable news program.  They're from real studies you can learn from reading a whole actual book--in fact, several of them.  

People may spit on CNN, but perhaps not getting 100% of your information from social media and cable news would be more productive.

It's hard to attempt this conversation without going down lots of rabbit wholes and never quite feeling like you made the whole point you were trying to make.  These issues are so intertwined.  They touch the core of people's identity and their skewed perceptions of the way things are.

If nothing else, I feel like I'm at a place where I've examined my views and been open to changing them in the face of new information.  That's what strikes me about these arguments.  You see lots of examples of people with privilege opening their eyes to what they have, how they got it, and the unfairness of social systems.  

You don't really see that too often on the other side--because generally the more you know, the more you realized that there aren't sides to this.  

Only right and wrong.

Turns Out I Wasn't Crazy: Tinkergarten Raises $5.4 million

I send out a monthly mailer of deals that I'm investing in that I'm looking for co-investors for.  Because I'm investing so early, a lot of times these companies are not only pre-revenue, but they might also be pre-product.  I also invest in a really wide range of opportunities, so many of them don't look like you're typical venture deals.

Tinkergarten is one such company.  At the end of 2015, I backed a husband and wife team expecting their third kid to build a network of outdoor kids classes--not an Uber for kids classes, Classpass for kids classes or Airbnb for kids classes.  Actual kids classes: finding teachers, vetting them, training them, creating content--all of the unscalable things you'd never want your tech startup doing.  They barely had any tech and I think they had maybe three teachers at the time I backed them.  I couldn't even get the round closed and had to send a second, slightly desperate note to my co-investor list:

We did eventually get the round closed and today, I'm excited to announce that they've raised a $5.4 million Series A led by Owl Ventures.  This year, they'll reach 1000 leaders and they're currently in 48 US states.  They have an amazing tech platform managing the whole process, from recruitment to class management to parent communications.

There are a lot of models out there that investors would think is unscalable that I'd say if you actually figured out a way to do economically, just means you've built a better moat.  When you actually offer a service or product you built and own your customers directly, loyalty goes up, brand value goes up, and you can be your own platform to launch a lot of different opportunities--if you can do it well.

These days, while you'd maybe rather be Classpass than you're average, run of the mill cycling studio or a faceless big box gym, I'd argue that you'd rather be Soul Cycle than Classpass.  Same goes for Shake Shack, Seamless and your average deli.  If you're not a special brand, you'd rather be software, and if you're software, you're always fighting to hang on to your network advantage as tech likes to disrupt networks and middlemen.   

Excited to see Tinkergarten get recognized as a special brand.