Jason Ball's TechBytes

Technology & Venture Capital. Early stage venture capital news mixed with personal views and comments

How to get a job in Venture Capital

I get asked this question a *lot*. I wrote a post about it back in 2006 on the topic that I could point people to, but it looks a little light, so I thought I’d post an update.

There’s no set way to get into VC – it really depends on what you’re starting with (and what role you’re shooting for). So, these are some of the things that are good to start with:

1) Be an entrepreneur. Successful or failed. I helped torpedo a few companies back in the dot com boom. Learned first hand what doesn’t work… This is a sub-optimal path, but it’s valid. Being a wildly successful entrepreneur turned awesome VC is clearly the preferred route. (Reid Hoffman comes to mind here…)

2) Work at a startup, then migrate. Or, work at a big Tech company (Google, Facebook, Twiter, etc), then migrate. Product, Marketing, Sales. You’ll have insight into big company M&A (they will be your customer as a VC) and you’ll have some operational skills. Bonus points if you’re a ninja in your field of expertise.

3) Work in the industry - Accelerators, PR, HR, Design, IP – whatever. Get yourself into the mix, get to know lots of people at various firms. Then transition.

4) Fix a portfolio company- This works if you have operational skills. Every VC has at least one portfolio co that’s not doing well.  Probably more. If you can fix one (or more) venture backed co’s, you will be loved and will probably find yourself a more permanent role.

5) Professional Services – These are the old stand-bys: Investment Banking, Strategic Consulting, Freshly Minted MBA (from a top school usually), Technical background

6) Be lucky. Right place, right time. This applied to me. I had a mix of some the above (startup, MBA, sales, VC intern) when I rocked up in London. And then happened to be in the right place at the right time, so I got my official start as a VC…

I think this pretty much covers the various paths into the industry as an investor… Depending on what level you’re looking to enter at will drive which set of skills you need. Analyst, Associate, Principal, Venture Partner, General Partner, Managing Partner – all require different amounts of the above.

Good luck!

Filed under: Venture Capital

Investing in Grand Cru

Following my previous posts on why I decided to make any given investment, I thought I’d share briefly why I decided to make an investment into the gaming space – an area where many investors fear to tread. The first game from Grand Cru, Supernauts, has been in further development for 1 year since we invested. Without the product in the market, this post was largely meaningless. (You can grab the Supernauts game here and give it a whirl. Just be warned, you might get addicted and end up spending your entire pay check on gems: http://www.appstore.com/supernauts)

Looking at my Three P’s of Venture Capital:

People: The team at Grand Cru has enough successes behind them to warrant an investment on their own: Markus Pasula (ex Mr Goodliving) and Mikko Wilkman (ex Habbo Hotel) are two of the co-founders behind the company (and the ones I interacted with the most during the investment process). We had zero scalability issues at launch (some secrets here)- testament to Mikko’s work behind the scenes for Supernauts. We had great featuring from Apple – testament to Markus’ (and the Marketing team’s) ability to engage with great partners.

Product: When I saw the Supernauts demo, my mouth fell open. Literally. It was easy to see how it could be a hit game – tried and testing building mechanic, coupled with cool space characters and a very user friendly, mass market game play.

Potential: Games either take off like a rocket, or  do a belly flop. Time will tell what happens to the Supernauts, but with 1M downloads in the first 6 days, it looks like they may be taking off…

This is a case where, despite having a great first product to go to market with, I had to take a bet on the team. Grand Cru is a games studio, not a product. They are in the game making business, and I have to trust that the water in Helsinki will continue to produce the types of games that millions of people want to play, and pay for. Supernauts is only the first in a string of titles the Company plans on producing…

Finally, I think a big congratulations to the entire Grand Cru team is in order (not just the two co-founders I single out here) – there has been an incredible effort to bring Supernauts to market.
Blog-photo2-620x413 <– Happy Cru

Filed under: Venture Capital

3 Traits of Successful Founders

Last week I was asked what I look for in Founders/CEOs by some LPs (limited partners, the people that actually give VCs the money they invest). I gave them three characteristics that I think are critical to success:

1) Tenacity. Starting a company is hard. If anyone could do it successfully, everyone would be a successful multi millionaire/billionaire entrepreneur. As we all know, that’s not the case. What separates the wheat from the chaff? The ability to fight long after others have gone home. And wake up again, take on Goliath, and fight until you bleed. And then do it again the next day. And the next.

2) Self-sacrifice. Being successful doesn’t happen overnight and it doesn’t come for free. Many founder/CEOs I’ve worked with have been the first to cut their paycheck to zero, to invest their last dollar and even end up in divorce.  I’m not suggesting that level of sacrifice is what it always takes, but if you’re going to get in the water with sharks, you’d better be willing to lose a leg. Or more. If you can’t deal with that level of risk (commitment), you’d probably better stay on the beach. Something will definitely be lost along the way (and other things gained).

3) Salesmanship. Two words: Steve Jobs. Greatest salesman of all time. He had ability to outsell everyone. Has to be like that with a CEO too – sell the vision, sell the product, sell the company, etc…

There are other qualities I look for as well, like the ability to select a crisp font or color palate for corporate presentations, or possibly impeccable taste in hot dogs, but those are slightly further down the criteria ladder…

Filed under: Uncategorized

Women and Tech

Women and Tech. It’s an area that’s been getting a lot of attention lately- especially the conversation around Twitter’s board.

I realized a few months ago that Qualcomm Ventures has a significant percent of female co-founders, CEOs and Chairwomen in our portfolio. For Europe, it’s 50%+. That’s right – over HALF of our companies… are founded, co-founded or chaired by women [blippar, CTC, ip.access, Rockpack , Grand Cru, Everplaces and Arieso (now exited)]. There wasn’t a decision to actively target female led companies, it’s simply a pattern that emerged. And it’s an impressive one.

My last post was about why we invested in Rockpack, where I highlighted the founder and CEO, Sofia Fenichell as a key part of that decision making process, saying “…as a [female] tech entrepreneur, she’s already the top 2%. You have to fight hard, and after you meet her, you realize she’s top 1%.”

A recent study carried out by Carnegie Mellon and MIT professors showed that teams that contain at least one female outperform male only teams in collective intelligence tests.

Start-ups are a team effort… The data shows the more women on the team, the better. That, plus the fact that most of the tech success stories are around companies that focus on a female demographic, or are widely adopted by a female demographic (Pinterest, Facebook, etc). So, who better to run these companies than female entrepreneurs? (Several of our portfolio companies customers skew female as well – FitBit, Wrapp, Rockpack, etc.)

Women in tech have historically been too few an far between. However, this is changing and there are clearly some shining stars right now – Sheryl Sandberg and Marissa Myer are probably the most visible. In London, there’s a host of local female heros as well – Jessica Butcher from Blippar, Divinia Knowles of Mind Candy (Moshi Monsters), Joanna Shields of Facebook, TechCity and Future Fifty fame, Sitar Teli, Partner at Connect Ventures, Reshma Sohoni, Partner at Seedcamp… and the list goes on, and on… and on.

Women are starting, funding and floating companies. This is an awesome change. One that’s been a long time in the making… and a change whose time has come.

(P.S. Tip of the hat to all the Techbikers crew, guys and girls. A group of 70 of us raised $75,000 for charity cycling 200 miles from Paris to London in September. More in the Techcrunch article here).

 <– The Awesome Techbikers Female Contingency

Filed under: Entrepreneurship

Investing in Rockpack

Earlier this summer, I posted on why I led our investment in Wrapp. I promised as part of that post to circle back around with a post on a seed investment, to compare the two since they’re clearly at different stages. Here then, are my thoughts on Rockpack, and how they relate to my previous posts Three P’s of Venture Capital and Terminal Velocity. Looking at each post in turn:

Three P’s of Venture Capital

1) People. First off, Sofia Fenichell is female. That means, as a tech entrepreneur, she’s already the top 2%. You have to fight hard, and after you meet her, you realize she’s top 1%. Always on, always connected, always pushing, always asking questions. Very intense. She’s managed to assemble a list of rock stars to help her build out her vision. She possesses a rare ability to get in front of people for meetings as well (Stephen Fry, Jamie Oliver) and get them on board with her vision. There is a reason Rockpack has been featured in both the US and the UK App Stores the day after launch, and featured by Wired. That reason is Sofia Fenichell (and the Rockpack team).

2) Product. Simple, clear use case. The company has designed away as much of the interface as they can – but when we invested, there was only a vision of curated content. As I tweeted a while back – “in the age of the infinite, curation is king”

3) Potential. Video is a huge market. If Rockpack can crack it with a great UI/UX, they will be very successful. That, or they will fail. Customers will decide.

Terminal Velocity

a) Lots of funding. $2M seed round, it’s a good start.

b) Office in the US. Not yet. NYC is on the horizon though.

c) Connections. I’m not even going to start- there are too many to list. And they’ve all been drummed up since we invested in December, even though the list of contacts started before then.

d) Chutzpah. I think if you look up Chutzpah in the dictionary, you see a picture of Sofia. She’s charming though… and super smart.

That’s it. I took a view to write a relatively small check pre-product, when there were only mock-ups of what it would look like. The product that launched last in June looks *nothing* like what I invested into. So, that means I invested in People. I realize this post is focused on the CEO vs the team – and that belies the huge effort they’ve put in to make Rockpack a reality. Without them, Sofia would only have a vision… but without Sofia, I wouldn’t have invested.

Filed under: Mobile, Venture Capital

Migrating your Photos to Dropbox

I’ve recently migrated my entire photo collection to Dropbox, and thought I’d share my thoughts on the experience.

First, photos are such precious parts of our lives, if you don’t have a backup plan for yours, you should count on losing them.

Second, I’ve lived in an Apple world since 1998, and have used every version of iPhoto produced, and finally moved over to Aperture because my library had grown to big, and I’d bought a DSLR, so wanted something more “professional” and responsive. Moving to Aperture was a mistake, and moving backwards to iPhoto was painful. I was ready to leave Apple’s solutions behind.

Third, setting Apple issues aside, I set out to find out if it was possible to have one single unified photo album that’s accessible from all my devices (for editing, maintenance and sharing)? The answer to this one came in the form of Dropbox, thanks to a few changes earlier this year.

Dropbox now pulls all images from inside your dropbox into a single view, aptly named, “Photos”. Photo management abilities are currently minimal – you can make and share Albums- but that’s plenty when your photos have been locked on a hard drive for years. The key for me is having ALL my photos in a file structure that I can easily navigate and manage. Dropbox provides that – and they’re backed up/duplicated on multiple machines. My photo management and photo sharing are now one and the same – this is a huge simplification. And it’s online, so handy tools like IFTTT can play nicely.

One unexpected key thing did happen during this process – my photo collection was cut in half size wise. Aperture uses Preview Photos, which duplicates your entire collection… After getting rid of those and some other trimming, I ended up with a much smaller total libarary size (which means it can grow significantly before hitting my storage threshold on Dropbox).

There are two tutorials that I used for the process (and it IS a process- one that’s taken a long time to complete): MacStories and SimplicityBliss . If this looks like too much pain; fear not. The latest experimental builds of dropbox have direct iPhoto import functionality, so it will be a simple process, and ready for prime time soon- no betas and no tinkering around to get all your photos into Dropbox. Last year, Dropbox acquired Snapjoy, with a view towards offering more photo management tools- which are now starting to see the light of day.

Filed under: Software

Investing in Wrapp

As part of an ongoing effort to be more transparent and open about venture and investing, I thought I’d set out a few reasons for why I led the effort behind Qualcomm Ventures’ recent investment into Wrapp (great interview with Carl where he discuses product and roadmap).

Looking back at my recent posts, The Three P’s of Venture Capital and Terminal Velocity, let’s look at how Wrapp fits those criteria:

1) People. The team has a vision, is passionate and can execute. I’ve known co-founder Andreas Ehn for many years, I’ve worked with Creandum at Videoplaza for the past 18 months, I knew Hjalmar Winbladh, Niklas Zenstromm and Reid Hoffman by reputation. All star line-up of team and investors.

2) Product. Simple, clean app with a razor sharp mobile focus. Easy to use and easy to like (really, who doesn’t like to get a gift?). While considering whether or not to invest, I talked to quite a few users who didn’t like the product- they LOVED the product. (I also talked to quite a few users that hated it. Everyone has an opinion.) I listened to the 1 million+ people that have downloaded the app, and the 15 Million gifts that have been sent.

3) Potential. Wrapp crosses the digital/physical divide- they can move people into stores, gyms, restaurants, etc and convert those feet into purchases. That is potentially huge. It’s still early days, but that conversion cycle is very compelling for brands and retailers. The market for gift cards is $110 Billion in the US alone- disrupting that market is a major opportunity. Marketing is a hard space to be in… and it’s not getting easier. Brands and companies need to engage with customers, and Wrapp offers them a great way to do that on a deeper basis.

4) Terminal Velocity. Subcategories were:

a) Lots of funding. $15M Series B. Check.

b) Office in the US. Wrapp is roughly split between Stockholm and San Francisco. Check.

c) Connections. Spotify, Microsoft, Skype, Linkedin,Creandum, Atomico, Greylock, American Express. Check.

d) Chutzpah. Being Swedish, not so much… they’re too understated, but there’s certainly a lot of charisma and charm.

Clearly, the company’s metrics and performance were very compelling as well – growth, retention, engagement, etc.

I could go through this exact same list for our investment in Waze back in 2010 and have very similar answers for each point above. Critically, Waze had hit the 1 million user mark; that’s a fundamental milestone that’s very indicative of a company’s success. Granted, you need many, many green lights to all work in your favor to get to a successful result, but the raw materials for success were there.

Also, I recognize this is for a Series B investment, so I’ll do the same exercise for my latest seed investment once that’s announced in a few weeks.

Filed under: Mobile, Venture Capital

Terminal Velocity

I posted my Three P’s of Venture Capital a few weeks back – Product, People and Potential.

There’s another component that I take into consideration as well: Terminal Velocity

The terminal velocity of a falling object is the velocity of the object when the sum of the drag force (Fd) and buoyancy equals the downward force of gravity (FG) acting on the object. Since the net force on the object is zero, the object has zero accelerationWikipedia

E.g. you need to be going fast enough to overcome the Earth’s gravitational pull. Or, for startups, you’ve got to have enough momentum and acceleration to break away… There are several components to this, and they don’t all have to be there, but one of them gives you the fuel you need….

1) Lots of funding. This is pretty straight forward – you have cash to do everything fast – and if you really raise a lot of money, implement the King Maker Strategy, e.g. raise so much funding you can guarantee your own success.
2) Office in the US (or plans to have one quickly) – either NYC or SF. Depending on where customers and partners are. This also gets you closer to your most likely acquirers. Keep R&D wherever you have it, and head West.
3) Connections. You need intros and doors to be opened. What’s that you say? “But that’s your job Mr VC to make intros” True, it is, and it’s something that all VCs do to varying extents. But you need your own networks – maybe you’re an ex-Googler or you went to Stanford, Oxford, Cambridge, Harvard or your co-founder did, etc. The old adage “it’s not what you know, it’s who you know” still matters. More than you possibly realize. You can borrow this from your investors, but you need to bring some of your own connections to the party. If you don’t have them, start making them. You will need them.
4) Chutzpah. Use this if you’re short on any of the above. With enough will, charisma, sheer determination and a bit of luck, you can break away. But this one is more of an art, but I have seen it in action – and it’s impressive.

I’m sure there are a few more I could add (great design comes to mind) – and feel free to add any in the comments below.

Hopefully this gives more color on what’s going on inside my head when I’m thinking about an investment…and what you need to make it as an entrepreneur.

Filed under: Entrepreneurship, Europreneurship, Technology, Venture Capital

The Desktop is Dead

Just to qualify the title, the desktop is dead if you’re under 20 years old.

Screens are migrating from living room to desktop to tablet to mobile. Depending on which generation you belong to, one of those screens is your home screen.

I made a heretical statement 2 years ago in this post - “Facebook is going to be irrelevant in 10 years”, which was true, but the unspoken part which was omitted was “Facebook ON THE DESKTOP is going to be irrelevant”. FB positions itself as a mobile company – they are doing their best to remain relevant in a post PC world. They bought Beluga – one of the companies I predicted to overtake them. Instagram was another good choice- so smart acquisitions by FB. (Although you could argue that FB will be irrelevant irrespective of anything it tries to do to change it’s fate- but that’s a separate post).

Another stat that I tweeted last fall was that Qualcomm’s market cap had passed Intel’s – another sign that the desktop was dead/dying. The two firms are at parity right now – but over the next few years term, mobile wins…

The key take away here is that we’re in the middle of a major transition (no real surprise) but most people out are still thinking web – in design terms, product terms and functionality terms. There are more third wave of mobile companies being launched, and they will be the ones to succeed. They aren’t written for the web, and aren’t written by or for generation web.

I realize some of this is stating the obvious- but if you’re reading this on your desktop/laptop “go directly to jail; do not pass go, do not collect $200

Filed under: Mobile

It’s not easy being green

This may seem odd, but one of my favorite new companies sells laundry detergent. As an entrepreneur (or investor) there’s a lot to be learned from the Company…

First a preface: I’m not a crazy tree-hugger, but I’m fortunate enough to live in a place where being green is relatively straight forward- central London. I don’t own a car (it’s impractical), I ride a bicycle and take public transportation, there are recycling containers in my apartment building, most of the lights in the house are eco lights, I shop locally and try to buy local, in season foods, when possible, etc. Most of this is a by-product of where I live vs some deep belief that cycling in the cold rain is better for mother earth than driving in a warm, dry car (traffic in London is a nightmare).

Back to the story – a few months ago I stumbled across a company called Splosh.com. They have introduced an environmentally friendly detergent brand. The concept is simple: you buy a few empty bottles, they sell you a few refills, you add water and presto magico: you have your cleaning product.

Why did this impress me so much? In a nutshell, it’s a very innovative solution to a problem the founding team felt strongly about, and they did an amazing job convincing me I should part with some of my money on their website. Here’s part of the story, straight from their site:

The logic of recycling is not consistent across different material types. For example, it makes a good sense to recycle aluminium cans, but the logic for recycling plastic homecare bottles is less clear.

Let’s see what happens to that plastic washing up liquid bottle you put out for recycling.

And finally these pellets are re-manufactured into another washing up liquid bottle? No.

Owing to ‘taint’ (the residue left from home and personal care products) only bottles containing drinks can be recycled into other bottles. So your washing up liquid bottle gets turned into something like a fleece or a road traffic cone. In other words it’s not recycled, it’s ‘down-cycled’. And when this new product comes to the end of its life? It can be down-cycled no further and ends up in landfill.

The sad fact is: every plastic home cleaning and laundry bottle ultimately goes to landfill – and that’s not something you would imagine happens from looking at that neat little recycling logo.

So when a bottle is made from recycled material, the material used is usually either ‘pre- consumer’ waste (in other words un-used bottles) or former drinks bottles. Milk bottles are often used as they provide a consistent source of material with little contamination. This means that a recycling logo on a home cleaning product bottle does not stop the manufacture of another home cleaning bottle the next time you buy the product. It’s an illogical system and we can do so much better.

After reading that, you’re kind of hooked. But then enter splosh’s killer reflill approach: they sell small refill sachets that can easily be shipped via regular mail. They cost <$5 per order. That’s less than you’d pay for the competing product on grocery store shelves, and you don’t have to lug it home (remember, I ride a bike). Plus, they’ve done this enough that you get a refill reminder email a few weeks before you run out….which is just plain smart. Re-ordering is a simple process that results in 2-3 clicks max. I’ve used up my intro pack and have placed a few refill orders already. I will be a long-time customer because the products deliver, I save money and it’s environmentally sound. Talk about win-win-win.

Building a D2C brand on the internet isn’t simple, and we can learn a lot from the company:

1) Focus on a real problem

2) Be PASSIONATE about what you do

3) Find a great business model – you may have to borrow from other industries (classic razor blade model at Splosh)

4) Storytelling is a power brand-builder

5) Offer an introductory special – anything to get the ball rolling. If you can charge for this, even better.

6) Use your data to provide a better customer experience

7) Go for green bonus points!

So, if you live in the UK, go grab some splosh. Or buy it for a friend as a bizarre birthday present. Mother Earth will smile on you (even if your friend thinks you’re odd).

Filed under: Entrepreneurship, Venture Capital

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