NextWala

Vision with a Vengeance

[Also published on Startup Weekend Delhi]

Founders start companies for many reasons.  They want to build something useful. They have identified a specific pain point in their personal or professional lives and the status quo causes them pain. They have analytically spotted a specific business opportunity. They are inventing something that is a leap forward in their industry or disruptive in general. Or perhaps, they see everybody else doing the same thing and want to jump on the bandwagon!

No matter how small or big the initial idea is at startup, the best founders step back and ask themselves what the high-impact success scenario is for them and what the purpose and vision of their project is.

Yet, why is it that, time after time, many founders fail to communicate this high-impact scenario and sense of purpose and vision? Time after time, the first words uttered by founders to the press or investors or recruits is what they did in the past month or the recent milestones that they have hit or the numerical goal they have in mind. I believe these things are necessary, but not sufficient, to drive a company to high-impact greatness.

Having been a founder myself, I know that the day-in and day-out focus on getting things actually done (considerably higher friction in India than in many other countries) is all-consuming (and appropriate). Yet I think it falls on the founders and management team to have a deep sense of purpose and vision and communicate that to the whole company, through words and through translation into what-does-it-mean for-me for their team. And I believe this translates into better decision-making and execution through your startup.

My goal with this post is not to drive you to spend a bunch of time creating vague marketing-speak vision statements like “Invent” or “The best technology services provider in the world” or “The largest ___ in the country.” My goal is to drive you to think through your high-impact scenario and actively drive toward it with a vengeance.

So, consider the questions below early during the life of your startup and perhaps weave the answers into your execution as well as the (hopefully reality-based!) story you communicate to your stakeholders, whether they be the press or investors or recruits or regulators or others:

• What is the purpose of my startup and how does this connect to the impact I want to have? 
• If my startup achieves its purpose and vision, how will my industry or people’s lives have been meaningfully impacted? 
• How do I work backwards from this purpose and vision to instantiate a specific execution plan? 
• Why is my team the best team to deliver on this vision? If not the best team, how do I build this purpose-focused team? 

Here are some purpose/vision statements that resonated with me. And lest you think that these are just purposes dreamed up after the companies had succeeded, please think otherwise. These companies had this in mind from day one.

LinkedIn 

“Our mission is to connect the world’s professionals to make them more productive and successful… Our solutions are designed to enable professionals to achieve higher levels of performance and professional success and enable enterprises and professional organizations to find and connect with the world’s best talent.” ~ LinkedIn Annual Report

Indian Energy Exchange (a Lightspeed portfolio company)

“We envision an India where the quality of life of the common citizen, rural or urban, is not compromised as a result of power shortages. We indeed envision a power-surplus India and a concomitant healthy competition in the electricity market for the ultimate benefit of the consumer, domestic and industrial… We will help accomplish the above vision by providing the nation with – and enhancing the utility of – our robust, scalable, and customizable electronic trading system with integrated solutions for trading, clearing, risk management, surveillance and counter-party trade guarantee.” ~ IEX website

Square

“Several years ago, PayPal pioneered a new method of person-to-person transactions. Square takes this to a new level of personal accountability by enabling card present transactions with known payers. This is the next step in the cashless society.” ~ Jack Dorsey speaking

Learning from Slideshare's Founders

(Source: Marttj)

[Published on VCCircle]

I have worked with the Slideshare team, as a user, investor and board member at different times, from 2008 till late last year.  After the Slideshare + LinkedIn announcement last week, I have been reflecting on how much has changed and how much (or little, depending on your perspective) I have learnt from this experience since starting out in the venture business several years ago, as well being a founder myself in the late 1990's.

Here's what I learnt from Rashmi, Jon and Amit about best practices of founders.  I appreciated their willingness to work with me and be patient. 

Passion & Focus

• Passion about your userbase is contagious. It impacts the employees and their retention, it impacts your core user base and their retention, it impacts customers and their retention.
• Focus, focus, focus on honing the product – UX, scalability, security, data, analytics and more – but keep trying new product angles quickly to iterate toward high engagement and clear value.
• Focus on crystallizing value to paying customers – make it easy for customers to understand value (packaging, positioning, messaging), connect value to price, and make it easy to pay as customers receive value. To do this, understand who your super-user segments are and why.

Growth and (or versus) Monetization

• Be frugal (if possible) but keep innovating, so you are around when lightning strikes in terms of user growth, revenue or outcomes.
• It’s tough to balance growth versus monetization versus profitability. There is definitely a trade-off. Get lots of input on this from people who have made these trade-offs successfully.
• Understand path from user acquisition to engagement to retention to monetization early on and track associated actionable metrics (a la Dave McClure’s AARRR). Especially for user-generated content, there’s no automatic connection between usage and revenue.

The Outside World

• Acquisitions and successful partnerships take time to develop.  They generally come from engaging over long periods of time. At the end of the day, it’s about people getting to know people.
• Keep tabs on competition, don’t obsess about them though – most companies die of self-inflicted wounds, not because of competition.
• Investors are people. Sometimes your investors and board members know what they are talking about, sometimes they don't, hopefully more of the former.

Becoming a Better Board Member

Through hits (and misses), I also learnt some lessons on how to become a better board member over time:

• Be respectful w.r.t. founders – they known their business better than you do.
• Be patient – there’s no such thing as an overnight success – don’t get too impatient but still hold management’s feet to the fire
• Be thoughtful and have a high bar when suggesting workstreams for the company – their time is precious, don’t waste it.
• Focus on strategic impact – as an investor, focusing on daily management decisions (i.e. micro-managing) will not have a positive impact on the company (and may have a negative impact). Focus on strategic changes, such as building the best management team, making the right bets on monetization, making the right introductions to partners/acquirers, holding people accountable for outcomes.
• Conduct board meetings for the right reasons. Board meetings should not primarily be about reporting only but also about trying to solve problems together and laying the groundwork for scale.  The real action happens outside of board meetings though.
• Align with founders on outcomes. Understand your goals and risk-profile as an investor early on relative to goals and risk-profile of the founders & management team.  Align.
• Angels and VCs are not at loggerheads. As long as companies continue to build value in a large enough market, angel investors and venture investors are aligned.  All the media hype about the two communities being at loggerheads with each other is overdone.

Congratulations to Rashmi, Jon & Amit at Slideshare for LinkedIn sale

I am incredibly happy to see Slideshare's founders - Rashmi, Jon and Amit - find such great validation for their vision of bringing together the world's professionals through their content. Congratulations also to Ross and the rest of the team in the US and India.

LinkedIn's acquisition of Slideshare is a great outcome and I'm sure both organizations will grow symbiotically together.  As an avid user of both, I look forward to many more technical and product achievements over the coming years.  

I remember meeting Amit in Delhi on one of my visits from the Bay Area in August 2006 as he was blogging at Webyantra.net about the web in India.  We kept in touch - he told me to keep a lookout for something they were about to launch.  And then Yee Lee reminded me of Slideshare when they were starting on their fundraise. We got to meet Rashmi and Jon at that time and appreciated not only the care that they had for the Slideshare community but also the power of the content to draw you in for long periods of time. Subsequently, David Siminoff and I led the Slideshare Series A financing at Venrock.  After the fundraise, we got to know many other people in and around Slideshare, including the inimitable Dave McClure, Ross Mayfield and many others at Slideshare in San Francisco and Delhi.  The rest, as they say, is history.

One other note: I am excited that this upcoming transaction will do a lot to boost the entrepreneurial eco-system in India. A good portion of the Slideshare team is based in Delhi - they have proven that teams in India can innovate on product at a world-class level.  In addition, given the relative newness of the venture eco-system here in India, it is great to have so many people find value in their stock options - hopefully this continues to prove to aspiring entrepreneurs and employees at startups in India that their equity can pay-off handsomely.

For old time's sake, here's the presentation that Slideshare put out publicly in May 2008 after the Series A funding. Brings back some good memories...

Meet Dave Meet SlideShare

View more presentations from Rashmi Sinha

Looking for: Utility App for User-generated Local Content Aggregation

[Source: deepatheawesome]

[Published on VCCircle]

Having recently moved to a new area of New Delhi, I am familiarizing myself with everything around me and trying to get the general vibe of what's going on around my local area.  

User-generated content has been quite useful in this regard.  I'm somewhat surprised (although I shouldn't be) with the volume and frequency of locally-related updates on Twitter and the lack of services to curate these in a meaningful manner. I have made "Defence Colony" a saved search on Twitter and check into that once a day in the morning. It's been quite useful.  I see a fair amount of posts related to local photos, crime reports, road traffic, weather, sales/deals, job openings, vendor/restaurant reviews, events etc.  

While each of these categories has been targeted through stand-alone apps, many of which have uncapped upside in large corresponding markets i.e. local traffic/navigation only from Mapmyindia/Inrix/Waze or local services through TaskRabbit (a Lightspeed portfolio company) or local reviews through Zomato/Yelp, I haven't seen the aggregate woven together in a compelling manner.

So I'm looking, as an end-user, for any small utility that weaves this togther. IMO, if a hyperlocal mobile (or web) app can classify these real-time local posts into these separate categories, roll-up the last 24 hours of posts in each category and then let me browse them at will or perhaps even subscribe to specific content as mobile notifications, that could be a useful and engaging service (perhaps notifications with geofencing as per a post I did last year on 'Why geofencing & opt-in notifications could save Foursquare'). Local content would be drawn not only from Twitter but also from Facebook,  (perhaps) LinkedIn, Foursquare, Gupshup and other mobile local services with APIs, using aggregation services such as Gnip.  

Caveat: I haven't seen this sort of service yet but I've learnt to be skeptical about my own ideas as there are invariably several other people who've been thinking far more deeply about these problems and have already gone out and solved them. So please tell me where you've seen what I have described - I'm interested as an end-user.

Here's a sample screenshot for a local search on the phrase 'Defence Colony.' You can see posts around restaurants/deals and local photos:

There is a depth-of-content difference between what I see here in Delhi versus what I saw in San Francisco - however, it's not that different.  This local content is available in most of the big metros of the world today and increasingly in suburban and rural areas.

There is a disambiguation problem that needs to be solved. For example, Defence Colony is a neighborhood not only in New Delhi but also in Bangalore and Lahore, as you can see in the screenshot below.   Perhaps geo-stamped status updates can be used to disambiguate. There is also disambiguation that needs to be done between content categories (crime versus sales/deals versus job openings).

So what's available today? You can of course use Twitter search using the modifier 'nearby:'. There are several tweet curation services like Sulia that could provide local Twitter feeds on a whitelabel basis.  There are also local Twitter feeds like from some local newspapers (e.g. Xtra Toronto here) and Schmap's local feed network here.   I haven't seen anything compelling from Citysearch, AOL Patch, Topix etc either.

Disruption in the Location/Local/LBS Stack

Photo source: Dave Mathis

I moderated a panel on location platforms this past Saturday at Cyberposium, a tech conference organized by students at Harvard Business School.  On the panel were: Evan Cohen, GM, Foursquare; Ted Morgan, CEO, Skyhook Wireless; Tom Sexton, VP Sales, Inrix (a Venrock portfolio company); and Stephane de Messieres, Founder, Citizens Market.

I have distilled what I learnt from this panel into the following set of questions that I believe founders of location startups should ask themselves:

1. What market are you in? If you think you are in the location-based services market, think again. Location or LBS is not a market or an industry other than perhaps at the pure infrastructure level where positioning technologies such as GPS chips or location servers are licensed/sold.    You might be in advertising, automotive, retail, enterprise software, local media or something else.  Your business models and go-to-market need to be adapted to which eco-system you are in.
2. How many other similar companies are there in your portion of the eco-system?  Given the hype cycle in location, I'm observing dozens and dozens of me-toos in each segment.
3. What do you do to escape commoditization from the platforms (Apple, Facebook, Google, maybe Microsoft)? And a corollary: how much will your success depend on successful integration, distribution and/or monetization through the platforms (e.g. will you have to give up 30% of your economics like Zynga did to Facebook)?
4. How will upcoming changes impact your business?  including perhaps privacy-related regulation from the FTC; litigation between and from the platform players; and cost-effective availability of positioning for featurephones.

How the market has evolved

Software that derives a majority of its value from incorporating location fixes or location-based data has been around for a while but only in pockets where the Web/Internet had not intruded until a few years ago.  Examples include:

• Automotive navigation solutions: Tier 1 automotive suppliers, auto OEMs, QNX/WinCE as OS
• Digital maps & POI data: Navteq, TeleAtlas, InfoUSA, many other POI providers
• Enterprise/government GIS: ESRI, Autodesk, Oracle/Sybase spatial servers
• Pre-smartphone mobile navigation: Telenav, NIM, many others
• Personal navigation devices: Garmin, TomTom, Navigon, many others

The Google Maps API launched earlier this decade really opened the floodgates to innovation.  And then the arrival of smartphones and always-on broadband connectivity has revved up the developer eco-system even more.  

There is somewhat of a top-of-the-hype-cycle feeling to parts of this market, especially at the apps layer.   In addition, under assault by "free" developer platforms, ad-supported business models, social, "free" location fixes, commoditized location data and always-on connectivity, many of the companies in the segments above have retreated to their high-margin bastions (e.g. automotive OEMs for Navteq) and are facing continual erosion of their markets from startups (or Google in many cases).   However, I believe location will continue to work its way into more and more segments and will become an ingredient in almost every web & mobile service/app.

Here's how I break out the market.  There are of course companies that span multiple layers but I have tried to place companies in their core layer.  Of these, I think augmented reality, while a very early space, has the potential to produce a platform play as it fundamentally changes user behavior and can be a container for a whole set of new apps/experiences.  I also excited about new companies at the data layer and in local commerce/mcommerce.

Layer 1: Positioning Technologies

We've seen offdeck locationing services (based on Wifi or cellID triangulation) emerge - Skyhook, Google, Ekahau etc.  GPS has worked its way into many smartphones through the likes of CSR/SiRF and Qualcomm. And there is IP-based locationing offered by Quova and others.  An exciting development is carrier-provided location fixes, aggregated by Location Labs, Loc-aid and others.  I've seen a lot of indoor positioning technologies in the past year, however almost nothing that's gotten beyond very niche use-cases (i.e. firefighters fighting building fires) and the requirement of changing network infrastructure as well as client-side infrastructure/software (expensive!).

Layer 2: Location-based Data & APIs

The base data layer consists of digital maps, provided by Navteq (now Nokia), TeleAtlas (now TomTom), AND, Autonavi (China) and Satnav (India).  New entrants such as Openstreetmap and Waze have the potential to change the game although Google's move into creating/owning its own map data is a threat.  Social/crowdsourcing is the new trend here in addition to monetization not through licensing of map data but through other models such as advertising and freemium subscription-based applications.  

On tops of maps, there are layers of slow-changing POI data such as from Wcities, Axciom, InfoUSA, AT&T Interactive (Yellow Pages) and others. Even this area is under attack from crowdsourcing-based solutions. I would argue that the real asset that Foursquare, Yelp, Google etc. are building is a proprietary POI database that is far deeper and more up-to-date than conventional sources.  There is an ongoing battle for the best POI database.

And on top of this are dynamic data providers such as road traffic speeds, gas prices, weather, events etc.  Inrix (a Venrock portfolio company), Navteq/Traffic.com, Zvents, Weather.com, Plancast etc. are some of the vendors in this area.

There are a set of location data aggregation services, including Location Labs, SimpleGeo, Factual, Xtify, PlaceIQ and Locomatix (covered in my previous blog post on geo-fencing and opt-in notifications).  Many of these companies not only aggregate but also provide data manipulation APIs of various kinds, including geofencing.

Layer 3: Developer Platforms/Monetization

Platforms provide an audience, distribution, monetization and enabling technologies.  By this definition, one has to include the device OEMs as platforms, including Apple/iOS, Google/Android, Microsoft/Windows Phone, Nokia/Symbian/Meego, Samsung/Bada etc.  

I think media properties such as Facebook Places, Google Maps/Earth, Bing Maps and Mapquest are platforms, not only providing geospatial services but also bringing an audience to consume developer applications as well as potential monetization capabilities.

And finally, I would include enterprise platforms (such as ESRI, Pitney Bowes/MapInfo, Weogeo etc.). and location-based promotions/advertising firms such as Placecast, Where Ads and others in this category from a monetization perspective.

Layer 4: Applications/Services

It's almost impossible to categorize the thousands of location-enabled apps.  Local search (Google, Microsoft, Where - a Venrock portfolio company) is an established category as are local reviews (Yelp, Urbanspoon) and navigation (Telenav, NIM, Waze, Skobler).  

Upcoming areas include social (Foursquare, Gowalla, Facebook Places), augmented reality (Layar, AcrossAir, Sekai Tonchidot), local product search (Milo, Google, eBay/Redlaser), local transactions (Redbeacon - a Venrock portfolio company, Opentable), indoor maps (PointInside, Micello) and digital car (Pandora, Aha Mobile - a former Venrock portfolio company, Trapster, VoiceontheGo). [Addendum: Awarepoint, a Venrock portfolio company, provides a healthcare IT solution that uses location for hospital asset tracking.]

Addendum: Layer X: Monetization

It almost does not make sense to include monetization in this post since there are lots of different revenue models, some B2B, some B2C and most of them not having anything specifically to do with location.  Business models range from per-device fees, per location-dip fees, CPM-based advertisement, annual subscription fees, local transaction fees, software licensing and every other model on earth.  However, the industry sometimes discusses location-based advertising as part of the 'location industry' - so I would include location-based promotions/advertising firms such as Placecast, Where Ads and others in this category from a monetization perspective.