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This blog represents my own views, not those of my employer, Brooklyn Bridge Ventures.

Do not pitch me a story or book review for me to write about. This is my personal blog. For more info on that, see this post.

 

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If you'd like to pitch your startup to me, there's no such thing as too early to talk. Drop me a line at charlie@brooklynbridge.vc or see if I want to meet in person at http://meetme.so/ceonyc.

 

 

 

 

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How do others hear your story?

Storytelling is one of the most important skills you can have as a founder.  You tell stories to investors, customers, potential new hires, the press and partners.  The key to telling a good story, and what I find most often lacking, is the ability to put yourself in someone else's shoes.  

Who is this person and what about this story are they going to care about?  

You can, and should, tell the story of your business a hundred different ways if you're telling it to a hundred different types of people.  An investor wants to understand how this is going to make them rich.  A potential hire wants to understand why this is going to be a cool place to work.  A reporter needs this article to turn into pageviews.  Every line in your story needs to be delivered with that context in mind. 

Key to that is realizing your role.  When you get into a pitch meeting, it isn't a press conference.  It's a campfire.  The story doesn't move forward based on the questions from the audience--bobbing and weaving at the whim of the investor.  It moves because you move it.  You're walking them through, telling the story that you know will excite them.  You need well timed exclamations, pauses--it's a production, not an inquisition.  You drive.  I want to get taken for the ride of my life.  All day, people send me boring stuff--be the most exciting thing I've seen today.  Be the thing I can't wait to tell my significant other about.

If you're not literally imagining this investor opening the door to their place and tripping over themselves to tell their significant other about your company, then you're never going to capture your attention.  You need to understand why that particular person will get excited about what you're doing.  A good storyteller tailors to their audience and knows what will excite and delight them.  

 

Resolve to Be

Last night, at a New Years Eve party, I asked a few people if they had any resolutions for 2014.  It was a mix of the usual--get more sleep, wake up early, eat better, go to the gym, get something accomplished at work, etc.

No matter what people said, though--it all seemed kind of... well... fragile.  When you resolve to do something, so many things could get in the way, not the least of which is a change of priorities.  Maybe running a marathon isn't going to be nearly as important to you by the time November comes. 

That's why instead of resolving to *do* anything, I'm thinking about the ways I could resolve to *be*.  I may or may not break 2:30 in my triathalon, but I can be more attentive, be a better friend, be more organized, more thoughtful and more curious.  

Goals about what kind of person I want to be keeps me focused on the drivers and intentions, not the results.  If you can change your intentions, it's like fixing the operating system versus changing up the apps--and everything will run closer to the way you want it to.

 

Paul Graham and The World Out There

There is a controversial interview with Paul Graham floating around and I'm left to wonder why we're still paying attention to guys like him.  He is accused by people of being, at best, oblivious and at worst, sexist.  I've never sat down with the guy, so I can't speak to that, but I'm tired of hearing about the same voices over and over again when I'm not even sure they're relevant.  

Why give more airtime to someone whose peak of influence, and perhaps success, is clearly behind him--especially to talk about topics where he clearly isn't adding value to the conversation.  Every time he opens his mouth about founder diversity, he seems completely out of his league to address the topic.  I want to hear Paul Graham's thoughts on gender equality and inclusive participation in the Valley as much as I want to hearCharlton Heston's thoughts on gun control.  

"God knows what you would do to get 13 year old girls interested in computers. I would have to stop and think about that," he offers.  

Clearly he's never heard of littlebitsGoldieBloxRoominate, or Hopscotch--not to mention Codecademy [EDIT: Codecademy is a YC company, so duh on my part] or Makerbot.  

Well, maybe he should do that... Stop--AND think.  As a guy, I know how hard it is for us to do either of those things, let alone do both at the same time.  However, in this moment, I think one's career in venture capital depends on changing your perspective.  

The biggest question I think VC's face right now is whether or not, in the future, the best founders will look and act like the best founders of the past.  Will they come from the same places as today's industry leaders, or from the far corners of the earth and from underrepresented groups?  The world is getting flatter than ever before and the white American male is exerting less and less influence over it each day.  

If you are a venture capital investor and you're not preparing yourself to succeed in a more diverse ecosystem of entrepreneurs, you're just going to get left behind.  

Considering the myopia at the top, it's not surprising that turning point may have already happened for YCombinator.  YC's best investing days may be behind it.

YCombinator had a great run from 2007 through early 2009 investing at a time when there weren't nearly as many seed funds and accelerators as there are now.   They picked up Airbnb, Heroku and Dropbox. 

Since Airbnb, however, it feels like not only is YC missing another billion dollar plus home run, but the percent of companies worth $40 million (a standard YC has used in the press), either by financing or exit, seems low.  I'm thinking maybe I found about three dozen companies worth that much in the nearly 400 companies that have been through YC since Airbnb.  That's less than 10%.   The classes got too big and quality was diluted because, by PG's own admission, YC "grew too fast."  

You could argue that the recent companies are too early, so I'll take that challenge and compare it with my own portfolio.  Given that they do $17-20k per founder across 350+ companies, we're in the ballpark of the amount of money we're invested--just south of $10mm.  

My own track record as a VC across First Round Capital and Brooklyn Bridge Ventures actually starts in January of 2010, *after* the Airbnb class of Winter 2009.  I've closed on about 20 early stage investments and, by comparison, 5 of my investments are now worth $40 million or more either via financing or exit (with three more over $25 million).  That's 25%...  a far higher rate than YC has appeared to have done since then.  My total valuation multiple across that span is nearly 4x and the return rate is up over 110% IRR.  The initial base of capital has already been returned in those investments, so it's not a made up return based on just paper gains either.

Most relevant to this conversation, though, is that I didn't do it by only funding only hacker dudes in the Valley:

  • Nine of my twenty investments have female founders or co-founders--nearly 50%.
  • All of the companies but one were funded in NYC, with the other in Boston.  
  • Of the 20 teams, only half count an engineer as a founder or co-founder.

A couple of years ago, I went to a networking event sponsored by a top tier VC firm.  It was held at a trendy Lower East Side bar where the price of the drinks made it the kind of place that a typical NYC entrepreneur would never actually go.  The invitees were a who's who of the NYC tech scene--all the most visible folks.  

It was exactly how you'd imagine a venture firm to throw a party.  You could see that conversation happening:

"Hey, let's reach out to the community.  What's the coolest place to go to?  Let's invite all the important venture and startup people people we know of--and don't forget to throw in a few women, too."

You wind up a far cry from Shake Shack when that happens, I'll tell you that.  

That's when I realized what separates how the next generation of successful VCs will look at the world.

That party was a bet that the best future opportunities would come from an insider network of people already connected to the establishment--that getting the next Google or Facebook meant connecting to the people "in here".  

I'm certain, however, that the more interesting stuff is going on "out there".  I believe that the most successful companies that I will get to work with over the course of my career will come from people not currently connected to the insider ecosystem, and from people who don't look like yesterday's notable founders.  I'm making a huge bet on the people "out there" because they have new ways of looking at things, new approaches to running businesses and are tackling problems being felt most deeply by the people outside the inner circles.  

If I'm going to be successful in that world, I better damn well have a view on how to make the ecosystem more inclusive.  I need to watch my style to make sure I appear approachable versus authoritative.  I need to learn from my mistakes where I may not have done all I could to make people feel welcome and respected--and surely I've made 'em.  

My brand needs to be one of a dutiful civil servant in a welcoming city rather than what I see from certain investors--acting like royalty in a place that investors believe is the only one that matters in the world.  

The media needs to do it's part, too.  Let's stop paying so much attention to what old voices are saying about the establishment, and instead strive to seek new voices and new perspectives.  Otherwise, we risk signaling to future generations that these are the people in charge and that nothing is going to change.  

We need to send a strong, clear message to that 13 year old girl, the 13 year old black kid, and the 13 year old growing up outside of anywhere anyone thought to call a venture hotbed to tell them that they can be successful and that they'll get the help they need from openminded professionals.

Why Floored is Awesome, and Not Just for the Real Estate Industry

The other day, I looked at some real estate on behalf of one of my portfolio companies.

The owner sent me this...

 

 

 

Maybe I just don't have enough imagination or lack the requisite architecture degree.  At least it's better than showing an actual picture of what the office looks like now, after the last tenant trashed the place on their way out.  Or, if they didn't trash it, they subdivided it for a colony of bees and painted it what can best be described as neon beige.  

This is what Floored does, with a turnaround time of just a few hours... 

If you don't understand the value of that to anyone who sells space, you probably also read the directions on toothpaste. 

But it's not just selling space--it's what goes inside the space, too.  Floored's technology isn't just going to help you imagine your new office or new home, but walk through and buy all the furniture, paint, flooring, etc that goes into it.

That's exciting--and I'm glad RRE and Greycroft felt the same way.  They just led a $5m+ seed round in the company.   It's a nice bump for my seed portfolio (I invested about a year ago) and a big win for the company, which is already on a serious revenue ramp.

Congrats Team Floored!

Disrupting the Whole Damn Thing

Last night, I went to go see Dallas Buyers Club.  It's a very powerful movie.  Whether it's accurate or not, is debatable, but it's theme is something that resonated with me.  

We, as a society, put in place structures like government and big corporations largely as an organizational efficiency.  By pooling our resources and centralizing control, theoretically, we can more effectively do things like police neighborhoods, manufacture things and defend our borders.  Still, these entities are supposed to work for us and in our best interest.

Not surprisingly, these entities become quite powerful over time--and not just the entities, but the people working at them.  When technology comes along and improves the way we organize, making some of these structures less efficient, or even wholly unnecessary, not surprisingly, they don't go quietly.  Because of their power and influence, they also know how to protect themselves through legal and regulatory methods quite well.  

They're all part of the same machine--record labels, cable companies, drug companies, credit card companies, telecom companies, taxi commissions, hotel lobbies, defense contractors, prisons, big pharma, tobacco, big food, etc.  They got bigger than we ever needed them to be and the more that we can seamlessly connect to each other, understand each other, and mobilize our numbers, the less we need them.  Still, expect them to dig in their heels.  

Peer to peer lending, community supported agriculture, ride sharing, house sharing, fans supporting artists directly, bike share--even the growth of healthy lifestyle activities like yoga and running--it's not just about new business models.  

It's a war.

I mean, don't you feel like we're losing a battle when Pepsi has a bigger presense in our schools than phys ed?

This is us collectively flipping off those institutions and saying, "Fuck you, we'll take care of ourselves."

And it's only begun.

How about truly local enterprise zones where chain stores that take more money out of communities than they put in are either outright banned or must keep profits reinvested in the community?  It's not just about supporting small business--it's about profit staying with your neighbor who owns the coffee shop and then spends it back in your community.  

What about programs like Defy Ventures that turn convicts into entrepreneurs?  Wouldn't it be better if someone gave you a shot to employ your peers when you got out of prison than to return to a life of crime?  Just because the government labels you as the worst thing you ever did doesn't mean the rest of the world does--and your local network should care more about what you do than what you did.

When do we get a farm on every rooftop and in every school?  Instead of shipping Twinkies across the country to put into our kids, let's have them grow veggies right on top of the school.  Well, it's coming.  

Forget cord cutting.  How about tower cutting?  Take the network out of the network and enable truly peer to peer communications.  It's coming.  

How about voting off your handset--for everything?  There's a zoning law being written about your own street.  You'll get a notification on your phone and get to weigh in, and influence the way your neighborhood is changing.

If you lived during the Industrial Revolution, the world was completely reinvented during your lifetime.  I feel like we're on the verge of reinventing society--that the shifts we see in power are only the beginning.  Peer coordination and network of individuals are real.  It's going to result in a lot more than just photosharing.  

Powerful structures are crumbling and it's bigger than even we can imagine.  I'm psyched to be a part of it.