Congratulations to the Stanford BASES Final Winners May 23, 2012
Posted by Barry Eggers in Entrepreneur, startups.add a comment
Yesterday afternoon, I had the opportunity to join the Business Association of Stanford Entrepreneurial Students, known as BASES, as a judge for its end of the year finale in which student-run start-ups compete for $150K in prizes. This was my third year as a judge. As with prior years, I was impressed by the quality of the presentations and teams this year.
Congratulations to all of the finalists and this year’s winners:
- Calcula Technologies – an innovative treatment of kidney stones that are traditionally determined to be too small to be operable, but that are very painful for patients.
- RAVEL – a legal search platform for lawyers and law students that helps reveal the most important cases, the connections between cases, and the evolution of legal principles over time.
- Wello – an online marketplace that connects consumers with fitness professionals over live, interactive video for group and individual workout sessions.
Lightspeed has been a proud sponsor of BASES for the last few years and continues to be impressed with their impact on the start-up community at Stanford and beyond.
Two is a good number of founders May 14, 2012
Posted by jeremyliew in Entrepreneur, founders, start-up, startup.1 comment so far
I’ve long held that two is a good number of (co)founders. One is difficult because you don’t have a true thought partner to talk to, or to tell you when you might be being crazy. To everyone else, you’re the CEO and the boss, and that power dynamic mitigates what they are willing to tell you.
Three can lead to a “two on one” situation, which can be destabilizing. It doesn’t always have to be unstable, but it is a risk.
Four or more and the equity cuts start getting pretty small for cofounders.
Douglas Merrill (CEO of Zestcash, one of our portfolio companies) has a nice post in HuffPo about how to work best with a cofounder that is well worth reading in its entirety. I paraphrase his five rules as follows:
- Be different, but not too different
- Share core values
- Compromise on work styles
- Overcommunicate to the team about your relationship, agreements and disagreements
- Find a trusted tie breaker
The Enterprise Flash Market is Taking Off May 10, 2012
Posted by Barry Eggers in enterprise infrastructure, flash.add a comment
Congratulations to Lightspeed portfolio company XtremIO and founders Ehud, Shuki, and Yaron for their acquisition which was announced today. This is another reminder of just how fast flash has gone from promising consumer technology to mainstream enterprise building block – primarily fueled by the proliferation of virtualization, BI, and Big Data coupled with the rapid decline in flash pricing.
We made our first investment in an enterprise flash company (Pliant Technology) in 2007; in 2008 we blogged about the potential for this technology to disrupt the storage market and in 2010 predicted that it could be the next $10 Billion dollar IT market.
Venture dollars have flowed into the enterprise flash market over the last few years and, to date, there have been 7 major liquidity events for venture-backed companies: FusionIO’s IPO (a Lightspeed portfolio company), Pliant (a Lightspeed portfolio company acquired by Sandisk), Sand Force (LSI), Anobit (Apple), IOTurbine (a Lightspeed portfolio company acquired by FusionIO), Flashsoft (Sandisk), and XtremeIO (a Lightspeed portfolio company). There are also a number of promising companies emerging in this market, including Violin Memory, Nimble Storage (a Lightspeed portfolio company), Pure Storage, Solidfire, Tintri (a Lightspeed portfolio company), Avere, Kaminario, and Nutanix (a Lightspeed portfolio company) as well as many others in development phases.
Despite all of the exit activity, we are in the early innings of this market – stay tuned for more fireworks…
More on data enabled underwriting April 30, 2012
Posted by jeremyliew in big data, financial services.add a comment
Check out my guest post on data enabled underwriting at American Banker.
How to Build the Next Huge Mobile App April 19, 2012
Posted by Bipul Sinha in discovery, distribution, location, mobile.4 comments
The advent and growth of social networks such as Facebook, Twitter, Tumblr and, now, Pinterest has heralded a new era in the Internet where people are connected to one another to share, discover, curate, and collaborate. The mobile applications are fast becoming the primary vehicle to access what I call “connected services” to discover people, information and entertainment. However unlike the intent oriented desktop Internet search, the mobile platform is about discovery. Thus the application developers would have to think differently about getting user attention and engagement.
User Time Slices
I view smart phones as bite-size infotainment consumption devices. Users launch different applications for short spurts during the day to interact live, get updates, transact, share experiences, and generally play. I call these 2-5 minute spurts “time slices” and examples of these time slices include waiting for a coffee, a short break from work, waiting for everyone to gather for a meeting etc. Users typically don’t have any fixed plans for these time slices and they like to discover infotainment through their applications. To build a mass market application, developers should consider two core factors: a unique discovery oriented infotainment experience and a bite-size time slice filler. An application that fits this paradigm would get huge user attention and engagement. Pulse News* is a great example of such an application. It allows users to discover news and information in a bite-size consumption format – you launch your Pulse when you have a few minutes and would like to be in the know.
How do you think about building the next large scale mobile app? I’m all ears.
* Lightspeed Portfolio Company
People who feel guilty over mistakes make better leaders April 18, 2012
Posted by jeremyliew in leadership, management.add a comment
Just read an interesting article about some research coming out of the Stanford Business School that suggests that feelings of guilt may signal leadership potential. Some excerpts below, but I’d urge you to click through and read the whole thing – it is pretty short.
When we think of a typical leader, most of us picture a person who’s sociable and upbeat. But new research puts a wrinkle in that stereotype, revealing an unexpected sign of leadership potential: the tendency to feel guilty. “Guilt-prone people tend to carry a strong sense of responsibility to others, and that responsibility makes other people see them as leaders,” says Becky Schaumberg, a doctoral candidate in organizational behavior who conducted the research with Francis Flynn, the Paul E. Holden Professor of Organizational Behavior…
Schaumberg first began investigating a possible link between guilt and leadership when she noticed that driven, hard-working people often mentioned guilt as a motivator. “You don’t usually think of guilt and leadership together, but we started thinking that people would want individuals who feel responsible to be their leaders.”…
There are many ways of responding to mistakes or other problems, Schaumberg says, including blaming others and blaming yourself. But the most constructive response, and the one people seem to recognize as a sign of leadership, is to feel guilty enough to want to fix the problem. “When thinking about what traits are important for leaders to possess, there tends to be a focus on what people do well. But we know that people make mistakes and mess up, and it’s important to look at how people respond to those mistakes because that’s a clue to who they are.”
If you read the whole article, you’ll see how it talks about the specific experiments and research that she did to come up with this finding, and also about how guilt (as distinct from shame) is a better predictor of leadership than how extroverted you are.
This reminded me of Carol Dweck’s book, Mindset:
Dweck explains why it’s not just our abilities and talent that bring us success–but whether we approach them with a fixed or growth mindset. She makes clear why praising intelligence and ability doesn’t foster self-esteem and lead to accomplishment, but may actually jeopardize success. With the right mindset, we can motivate our kids and help them to raise their grades, as well as reach our own goals–personal and professional. Dweck reveals what all great parents, teachers, CEOs, and athletes already know: how a simple idea about the brain can create a love of learning and a resilience that is the basis of great accomplishment in every area.
The takeaway is similar. Dweck says that people who have a growth mindset regards abilities and actions as changeable, and think that through more work they can improve. So they embrace learning through failure, and when something goes wrong, they keep working to make it right, to learn. People with a fixed mindset regard ability as innate, and so avoid situations that could lead to failure.
Schaumberg comes to a similar conclusion from a different direction. She says that people who feel “guilty” feel guilt about an event or action, and work to make it right, whereas people who feel “shame” feel it about themselves, and remove themselves from the opportunity.
Whichever way you come at it, others recognize when someone works to make things better, and they look to those people for leadership.
Direct Selling; Is it the Next Driver Of Startup Commerce Companies? April 14, 2012
Posted by jeremyliew in Uncategorized.Tags: commerce, direct selling, ecommerce, startups
3 comments
I just wrote a guest post on TechCrunch asking. “Is Direct Selling The Next Driver Of Startup Commerce Companies?” We’re seeing lots of exciting startups using this old channel to drive very fast growth.
How will Tablets and Kindles change reading? March 26, 2012
Posted by jeremyliew in Uncategorized.Tags: eBook, iPad, kindle, reading, tablet
6 comments
The first attempts to capitalize on a new medium are always simple ports from an old medium. The first TV shows were newscasts – basically the same as radio, a guy reading the news. The first e-commerce sites were cataloges ported to the internet, with the same copy and a single picture. But over time, content that is customized to each medium comes to the fore. Now we have the sit com, the police procedural and the reality show on TV, and flash sales, subscription commerce and daily deals online. So how will Tablets and Kindles change the way we read?
The first generation of eBooks were simply ports of regular books. But Amazon has already started to experiment with a new format, the Kindle Single:
exceptional ideas–well researched, well argued, and well illustrated–between 5,000 and 30,000 words.
They recognized that the economics of print publishing have forced books to be 80-100,000 words long. Anyone who has read a business book knows that this does a disservice to both reader and writer. Some ideas have a natural length less than 100,000 words, and extending them to book length does no good to anyone. But the economics of book publishing, and the public’s willingness to pay for a “small book”, forced this convention. Ebooks have no such constaints, and allow authors to write at any length. Byliner is taking a similar approach, trying to build an eBook centric publisher.
Other companies are recognizing that eBooks lowers the barrier for self publishing more than ever before. Companies like Blurb and LuLu both started out supporting physical book self publishing and now also support eBook selfpublishing. Fan Fiction is another related opportunity.
The WSJ noted another unexpected consequence of tables and kindle reading that is emerging, more to do with content and genre:
Electronic readers, and the reading privacy they provide, are fueling a boom in sales of sexy romance novels, or “romantica,” as the genre is called in the book industry.
As with romance novels, romantica features an old-fashioned love story and pop-culture references like those found in “chick lit.” Plus, there is sex—a lot of it. Yet unlike traditional erotica, romantica always includes what’s known as “HEA”—”happily ever after.”
Kindles, iPads and Nooks “are the ultimate brown paper wrapper,” says Brenda Knight, associate publisher at Cleis Press, of Berkeley, Calif., a publisher of erotica since 1980.
Why has tablet reading unleashed a surge in the erotic romance genre? Because online commerce has made buying the books less embarassing:
Ms. Benson says the digital format helped her get over her embarrassment. She reviews romance books for Smexybooks.com and erotica for the website Heroes and Heartbreakers. Even so, she says she wouldn’t read these books in print if she were in view of anyone. “Some of the covers are very explicit,” she says.
Erotica on the Mischief Books site is tagged with icons. Handcuffs denote “kinky”; an upraised palm means “discipline.” The HarperCollins imprint says it plans to publish at least 60 e-titles a year. “It used to be a long walk to the counter with an erotica selection, but now that’s a thing of the past,” says Adam Nevill, Mischief Books’ editorial director. (HarperCollins, like The Wall Street Journal, is owned by News Corp.
Another dimension for innovation has been around engagement. Many children’s books and apps have become highly interactive, including those from publishers like Callaway, Duck Duck Moose, and Oceanhouse Media.
I’m really excited about the ongoing innovation in reading and expect to see some very valuable companies created in this area. We’re seeing experimentation around length, authorship, genre and interactivity. What do you see as the most innovative companies in the eBooks space?
Financial services disruption sneaks up from below. March 19, 2012
Posted by jeremyliew in Uncategorized.Tags: big data, financial services, machine learning, startups, unbanked, underbanked
3 comments
A couple of weeks ago I did a guest post on PandoDaily about how big data + machine learning is creating new opportunities in lending. What’s interesting is that most of the disruption is starting in the bottom end of the market; unbanked and underbanked lending and payments. That is not an accident. I did another guest post today at PandoDaily explaining why disruption in financial services comes from below.
Subscription business models are getting their day in the sun March 7, 2012
Posted by jeremyliew in Ecommerce, subscription.5 comments
Today’s NY Times notes that subscriptions are all the rage in ecommerce. It features three of our portfolio companies. Alex Zhardanovsky, cofounder of Petflow*, and Azoogle before that, is one of the people interviewed:
But he had an idea to build the business by taking a different approach to sales. While selling online ads, he had seen other companies, like Netflix, persuade consumers to lock in monthly fees for repeat orders. Those companies, he believed, were generally more successful and thus bought more of his ads. For his new business, Mr. Zhardanovsky’s plan was to sell dog food on a subscription basis. He figured that other pet owners had experienced the same frustrations keeping the food stocked and might be willing to sign up for a monthly delivery service as well. “Dogs never stop needing to eat,” he said….
In its first month, July 2010, the company shipped about 60 orders; by January of this year, that number had leapt to 27,000. In 2011, PetFlow exceeded $13 million in revenue — with 60 percent of its sales coming on a subscription basis — and it projects revenue will exceed $30 million this year. “I’ve come to appreciate,” Mr. Zhardanovsky said, “that subscription models are, in so many ways, the holy grail of business.”
Brian Lee, cofounder of Shoedazzle* with Kim Khardashian, is also quoted:
“A subscription model allows you to establish long-term relationships with customers as opposed to selling them one pair of shoes and hoping they come back,” said Mr. Lee, who also was a founder of LegalZoom. It was his experience at LegalZoom, a legal-document business based on single transactions, that prompted Mr. Lee to look for recurring revenue: “I wanted to start a business where you didn’t have to worry as much about whether the customer would come back.” The idea of using a subscription model to sell shoes came to him, he said, after he realized how many shoes his wife was buying on a regular basis.
The Times also notes where the subscription model works best:
Given the experiences of companies like PetFlow, ShoeDazzle and BabbaCo, it is tempting to wonder why not every company is trying a subscription model. And, in fact, Brian Lee, the founder of ShoeDazzle, said he frequently heard pitches from entrepreneurs who wanted to create the ShoeDazzle of wine or underwear or some other product. “I think subscription models work best in two instances,” he said. “Where the product is a necessity or when it’s an absolute passion. It stops making sense when you try to do something like a tree-of-the-month club, which doesn’t fit either of those categories.”
Taking his own advice, Mr. Lee recently founded another subscription-based business, this one with Jessica Alba, the actress. It is called the Honest Company*, and it ships diapers and other baby products.
We’re proud to be backing such great companies and entrepreneurs.
* Lightspeed Portfolio Companies
