What we’re reading at Flatiron Investors…
Imran Ghory formerly of Index Ventures crunches the numbers on startups that go through multiple accelerators in response to Sam Altman’s claim that startups that go through multiple accelerators are less successful than startups that go through Y Combinator alone.
Ali Hamed writes about why over-valued markets hurt seed funds less than funds doing Series A and beyond. Seed investing is about finding deals, according to Hamed, while Series A rounds are about ‘winning deals’ based on factors like brand, adding value, and price.
Michael Pao of Greylock Partners discusses three lessons he learned about marketplaces while he was at Uber. First, don’t focus on demand so much that supply takes a back seat. Second, be careful about listening to users. They do not always know what’s best. Third, even though marketplaces are governed by simple rules, there are an infinite number of ways to approach the goal of balancing supply and demand.
In another Uber-related post, Sarah Tavel writes about the importance of price in Uber’s business.
The challenge is that many took the wrong lesson from Uber. Yes, convenience is huge, but it was only part of the picture. The magic of Uber is that it used mobile to create a 10x better product than the incumbent (taxis), and did so at a lower price. The “and” is everything.
This post on the Version One blog discusses the rise of the vertical reputation graph. Digital footprints are becoming more important than traditional resumes, and new vertical platforms for specific industries are become useful networking and job-hunting platforms.
Mahesh Vellanki provides a great analysis of internet stocks and their valuations. He shows that digital media and gaming stocks held up best out of any sector.
With regards to marketplaces, Yelp, Just-Eat, Shutterstock, Zillow, GrubHub, LendingClub and Etsy are all down, with the latter few down as much as 25–50%! It’s a bit shocking to see LendingClub being worth a modest $3B, and large scale businesses such as GrubHub and Yelp only being worth $1.6B. If Etsy were a private company again, it wouldn’t even be a unicorn!
Leo Polovets of Susa Ventures gives his thoughts on investor relations questions for post-seed startups. Some of the questions he addresses: Should you meet with investors when you’re not fundraising? How frequently should you reach out to any single investor? How should you respond to feedback?
Michael Preuss discusses how to model the total addressable market and gives a useful template. The article uses Uber as an example and addresses the importance of knowing where a market begins and ends:
“Sequencing markets correctly is underrated, and it takes discipline to expand gradually. The most successful companies make the core progression — to first dominate a specific niche and then scale to adjacent markets — a part of their founding narrative.” — Peter Thiel, Zero to One
Talia Frenkel of L. talks about moving from concept to company in The Macro.
Tom Perrault of Rally Health makes the case for digital companies to hire liberal arts majors.
If you are interested in blockchain technology, venture advisor and author William Mougayar is launching a Kickstarter to sell a primer for how blockchain can be applied to business.
Sha Hwang, an information designer at Nava, writes about the history of GIFs and how the format has created an entire ecosystem of “experimentation and juggling around constraints.”
In a great HR related post, Beth Sheffner Scheer writes about doing away with the “maybe pile” when you are hiring. Tell candidates ‘yes’ or ‘no’.
Dan Wang of Flexport writes a fascinating post on Dole, “the world’s full stack banana company.”
Elon Musk shares his predictions for AI, renewable energy, and space exploration.