Collision Conference – Day 1
Posted on May 17, 2014
I had the opportunity to attend the Collision Conference in Las Vegas which was the first time the team behind The Summit brought their conference to North America. It was held in Downtown Las Vegas and spoke to much of the revitalization that is happening with the Downtown Project. The conference is a blur of activity with numerous speakers for very short bursts along with startups pitching, showcases and tons of networking. I tried to attend as many of the sessions as possible.
Hiring and Firing: Lessons Learned – Keith Rabois and Jonathan Krim
-why come work at a startup?
-the best way to recruit someone is based on the vision and how you will change the world
-do you want to learn? And then evaluate answers and determine what motivates them.
-don’t screen based on affinity. Screen based on tenacity and relentlessly resourceful characteristics
-where do you look for talent when early?
-look for pools of people others aren’t looking for
-hacker right? Piazzo? Tools to help.
-some companies have seen success on AngeList
-how do you retain them?
-keep the company growing and people will stay
-ensure the individuals with the most ability are constantly pushed to grow.
-you don’t want the people who are the most motivated by money. Lol VC saying that.
-how do you handle letting people go?
-admit that you will make mistakes
-move quickly within first 3 months
-don’t procrastinate. If you ever ask yourself if you should fire someone then the answer is yes.
-there is no obligation to “fix” the person
-discriminate if this is a motivation problem or a skill problem. Skill problems you cannot fix.
-personality issues may be correctable if you can move them around. Diagnose the underlying challenge.
-be definitive and don’t be vague. If you can be constructive that is great but tricky if it requires you to betray confidences of others.
-give them advice on next steps and where they could find a good fit (eg. Become a founder) if appropriate.
-fundamentally experts are poor at making judgements so looking for tools and software to help replace them.
-Max Levchin at PayPal did 99 percent math and 1 percent human judgement. Humans are very adept at identifying patterns. So Keith looking to do that same thing elsewhere.
-doctors make poor decisions. It is a practice not a science. Math will play a much bigger role. Allows you to take into consideration more rare cases. Checklists can help the triage strategy. Since 2007 all patient records have been public to allow you to train the algorithms.
-starting his own company. Sell your house within 30 seconds. Homes are biggest asset and takes a long time, very expensive. Real estate agents make poor judgements.
-no negotiating. Do it in 30 seconds and one shot. You need to be decisive.
-using data to value the house. Is there enough data in the world to value the house unseen? How often will you be wrong? What are the downsides of being wrong?
-homes are more of a commodity than people think
-further enables trading up
-very expensive inventory…
-assembled 3 co-founders and one he has been recruiting for the past 3 years
-looking to launch in June or July
Growing Pains: Hacking the myth – Stan Chudnovsky, Rob Goldman, Darian Shirazi, and Parmy Olson
-look at current user metrics to bring in five more people.
-then have other people looking at the customer acquisition side. Separate them because they need to have completely different approaches.
-try something, if it gets better, do it some more. Just a general way of thinking.
-growth team shouldn’t be pushing users to do things they do want to do. Short term thinking.
-grow it in a sustainable way
-GoodReads made a change where they started displaying reviews based on their relevance to the person looking (friend for example) in comparison to showing by date/timestamp
-if you know people in your class will review it then you are more likely to write the review. Also allows you to show how smart you are to your friends.
-for B2B you need to analyze the network around the decision maker. More complicated and requires more people but triangulation helps quite a bit. Don’t sell one to one. Influence the people around the decision maker on LinkedIn.
The Devil’s in the Detail: From idea to exit – Aaron Patzer and Rob Coneybeer
-suggesting PhD candidates to drop out because you won’t solve an end human goal
-very into utilitarian inventions
-why a consumer startup after the deep tech work before?
-solve a real problem in a big market sustainably
-the big tech was to categorize people’s transactions. Then you could set budgets, perform alerts, etc
-haven’t talked about the acquisition. 170M outcome in late 2009 when nothing was being acquired.
-company was right on the cusp of profitability and Mint was very frugal. Always worried they were on the cusp of failure.
-Brad Smith from Intuit called his mobile and they weren’t going well. Didn’t even occur to him they would look to acquire. 100M was the offer and it was an insane offer. Ton of money.
-he said no twice which was scary
-valuation is a bullshit art and so petrifying because big money could go down the drain if you say the wrong thing
-VCs were very keen to return money but some funds have different perspectives depending on the stage/size
-there is a conundrum when the entrepreneur wants to sell even if the investors aren’t ready
-then after the acquisition went to work for Intuit. How was that? Intuit treated him well, paid him well but don’t work for a big company. Got hauled into the CEO’s office for bad behaviour.
-3 year contract which was backloaded so he became VP Product and engaged.
-working on something not publicly disclosed. Leonardo is the code name and Shasta (Rob) is investing. Put you in touch with an expert in under 5 min through voice, video, etc.
-how hard can this be? Seems like micro-consulting. Marketplace will take forever to build. But they are using tech to determine what the human question is using deep natural language processing.
-if you don’t know what to look for it can be really hard on Google.
-why take a co-founder and investor money on the next venture? VC money makes you accountable. Doesn’t want to waste money.
Road to Success – Dave Goldberg and Bruce Upbin
-the only way to learn is by doing it.
-with that experience, being a CEO and working with a founder was nerve-racking.
-it has worked really well at Survey Monkey where the founder didn’t want to be day-to-day involved
-as the CEO he needed to be much crisper about the vision upfront and getting people to buy into it
-as founder you don’t need to be that articulated
-founder decided on his own that bringing someone else in could make it go bigger
-raised over 1B of capital but the company has been profitable since the beginning. 113M revenue and 16M EBITDA. Raising money to allowing investors and employees to sell their shares.
-not averse to going public. There are downsides and upsides. The costs are very great in how they run/manage the business especially when they aren’t struggling to get capital.
-liquidity itself is not a good reason!
-moving towards filling the need to find people who can fill out surveys for people you don’t know yet. SurveyMonkeyAudience who take money for charities rather than profit. They do it to ensure that the quality of the data is robust. Not skewed by money. Self serve!
-Google launched Google Consumer Surveys which are just banner ads or 1 question surveys. Not the same at all.
-is freemium going to stay the same?
-comparing notes with others who have great freemium tools.
-free product must be very good.
-add enough value so that some portion of people will pay you
-helps if there is a viral nature to it. Taking a survey helps people learn about the product.
Leaping Ahead – Michael Buckwald and Jen McCabe
-LeapMotion sold 500K of their units
-first look at their new unit and API going live tomorrow
-want to bring the experience of reaching into the computer and use your hands.
-believes innovation is being held back because input hasn’t changed in 30 years
-100K developers and a video demo
The end of plastic payments – Ben Milne, Bill Ready, and Sarah McBride
-plastic payment a thing of the past
-Dwolla is a payment network to replace the card with the internet
-Braintree runs a platform (VenMo person to person payment) now part of the PayPal family since last year
-will there be tons of options or a single one?
Ben – tons of options. Many people will create new experiences. There won’t be just one.
-NFC is dying out even though it was all the rage. Mobile is growing with things like Uber and PayPal beacon. It will be a mixture.
-in the world of mobile payments becomes a network effect.
-users are much more picky about the buying experience on mobile.
-let’s talk about security. How do we make people more comfortable?
-source of problems are 16 digit numbers and thankfully Dwolla doesn’t use it. Build a new network to solve the problem.
-security is a trade-off between ease of use and security. Chip and pin is more dominant everyone else because of the security but the conversion is lower.
-what can you do to balance the info you are collecting?
-internet has set standards for privacy
-give people access to bill you (do it specifically) and revoke it when they want. Give the user full control.
-sadly Dwolla is still only available in the USA
-google RTGS because people don’t know that we are already living in a virtual economy where physical cash isn’t moving around anymore
-Bitcoin overestimate the near term and underestimate the long-term. The currency isn’t nearly as interesting as blockchain and distributed trust. Far more expansive than a currency.
-core customers for Dwolla was dollars not Bitcoin but have built it to support it. We will have more than one currency in the future and not all mandated by governments.
A life less ordinary – Chamath Palihapitiya and Evelyn Rusli
-doing really well at making money. Working with some iconic companies. But most interesting thing is redefining what it means to do this work. We need to question how Venture should work.
-never wants to be forced to play the game how others define it.
-doubling down in education and healthcare since those take a lot longer. If you behave too predictably then the companies that need to be built won’t because they don’t meet some checklist
-let the other things pay off!
-seem like you are a contradiction looking for outside plays and the Tinders with a really good return. One is a necessary evil and one gets him out of bed every day.
-worried that we have replaced checklists (MBA, etc) with new ones (Kickstarter, incubator, etc)
-replaced one set of pressures with a different set of pressures. But where are the people who never fit into the boxes? Aren’t we just doing the same thing again and doesn’t the Valley become a sell out place. Will they go elsewhere?
-make sure it is ok to be different
-be disciplined when not confirming
-there is some skepticism by investors. There is blood in the water. Valuations are going down. This is healthy for everyone. The employees always get the hurt the most when these things fail. Fundamental re-rating of growth stocks. The employee gets stuck with the bad deal. It gets everyone back to a rationale state. Floor is roughly now that there is no real growth and central banks are opening the spigots. Money will come back. Will people be more circumspect because of more discipline? It seems so. Rational value. It doesn’t mean cheap. It just means fair.
-used the term “baby Berkshire” to describe what they are doing.
-“I want to be a brown Buffett”
Changing Lanes – Tony Conrad and Om Malik
-talk about selling about.me and then buying it back
-acquired by AOL and it happened very fast. Tim had just taken AOL public and looking to take some risk. A year into it AOL was going through challenges and it didn’t seem that the integrations weren’t coming
-approached them to say maybe it isn’t a fit and that’s ok. So AOL let them buy it back but paid less to buy it back.
-been working on exposing who has been interacting with their pages. Notional compliments that are helping too.
-business side is building out where people are able to use the product to get jobs. Not a replacement for LinkedIn but shows a different side of the person especially at college level.
-people are interested in promoted profiles. Some revenue (meaningful but not strategic).
-how is identity evolving on the internet?
-2005 you didn’t know if FB or LinkedIn would be public or private. Not looking for people you don’t know. So what is your digital business card? You don’t want to be defined by Google. The web has an about.you page that will define you.
-you don’t want to be defined by your tweets or professional accomplishments.
-is it a good time to invest?
-every year is a tricky year to invest and a great year. One of their best years was 2008 and 2009 especially when people said they should be investing.
-expecting to see normalization in the Series A and B round.
-what is with all of the big funds? Will they still slow down?
-there is a mature investment market. There are plenty of people who can do the A and B rounds while also participating in the C and D rounds
-where are you not investing?
-we don’t think of that. FitBit, MakerBot, 3D Robotics, Blue Bottle Coffee
-what is happening in hardware?
-impact of drones is profound. It changes every industry from real estate and agriculture.
-wearables is massive but going to get crowded.
-consumer adoption and the novelty factor will be there but will it drive long-term behavior and change. How does it last?
Tearing up the rule book – Ryan Smith and Bruce Upbin
-based out of Provo and raised the largest club deal between Sequoia and Excel
-have done everything/wrong based on Silicon Valley premise.
-came out of academia, ran in-house, no freemium, no marketing.
-trying to make it a little sexier. But successful because of many factors. Pushed it hard uphill for a long time. Profitable and bootstrapped for 10 years.
-where did you get the common sense? He calls it the magic pony ride. You just have to go through it and learn from it. A lot of people shortchange themselves by trying to rush through the challenging years. You will need those years to help guide future decisions.
-own higher education market for surveys but can use it in business where majority of revenue comes from
-moving opposite direction as survey monkey going from hard-core tooling to making it more accessible
-100M+ run rate. Where is the growth coming from? Opening office in Dublin and trying hard to hire to catch up on that front.
-it was slow to get going but speeding it up now
-how loyal are customers? Very like many other SaaS companies.
-positioned to go public but not doing it. Why not?
-the bigger they get the more they have to think about it.
-really likes options and keeping them available
-you run the business differently
-transparency is very important. Very flat organization.
-helps you scale the business. If you fail it is because of what happens in the org not markets or customers. You need to execute.
-if you get internally focused then you can make mistakes. Make everything public (goals, expense reports, paid time off, etc) to house all of that. It creates the ultimate meritocracy allowing people to follow the most competent people. Sending out board minutes to the whole company.
-internal execution is the key. Are we going to do what we set out to do? That is the major issue.
-how do you shift from consumer to enterprise?
-you can’t just throw your hat in the ring
-it has to be a different experience.
-the expectations are higher and totally different. It means more security, admin functionality, and much more. You may even have to completely re-architect the product or the experience.
-direct selling is shifting. People are closing deals over the phone. Big deals.
-engaged employees takes a ton of money and time so developing a lot to ensure they have the best solution.
-created a marketplace where you can publish content that you generate.
Making ideas happen – Scott Belsky
-how do you help creative people create stuff?
-most ideas never happen
-talked about project plateau with many projects that die. Desperately want to escape this place by coming up with a new idea. This explains all of the half written novels out there. 🙂
-how do you push to completion? Get out of the idea to idea syndrome!
-lack of accountability is an issue
-lack of leadership capability
-disorganized and isolated networks
Behance – to help turn ideas into reality
-Making ideas happen – order this book!
6 insights to consider
1. Overcome reactionary workflow
-endless stream of data coming in
-reacting instead of being proactive around what we want to work on
-no more forced disconnection
-last place to just think is the shower
So you need to create windows of non-stimulation. A list of 2-3 things you want to make an impact on. Force yourself to do this.
2. Seek competition
-it will force you to move faster and do better
-knowing someone else will do it is important
-even the greatest creative will pace themselves against others. Seek it!
3. Fight your way to breakthroughs
-fighting should be part of your culture
-you should care enough to engage in a debate on the best outcome. That way everyone is forced to explore the solution space. Apathy should never be allowed. Leaders need to fight apathy ruthlessly and keep them engaged. Explain that we fight here to new people to see if they will be a good fit.
4. The dreamers, the doers and the incrementalists.
Dreamers – happy with something new to introduce to the team.
Doers – Debbie downer. Happy with no new surprises.
Incrementalists – can rotate between the two.
-value the team’s immune system. Build something to attack the new things. Doers are the immune system. Solving new things is rare (idea generation) you need to suppress the immune system. The problem is that many of us are dreamers. You need to get stuff done. Cultivate a strong immune system. Know when the roles are important.
5. Seek and keep the free radicals.
-seek people who want intrinsically rewarding work. Make stuff often and therefore fail often.
-little tolerance for friction of bureaucracy, old boy networks, be fully utilized, etc
-networking is sharing.
-we insist on meritocracy.
This is the manifesto of the free radicals.
6. Gain confidence from doubt
-the more people who told him he was making a mistake then you might really be onto something
-society will shun people before we love them
-gain confidence from the doubt. Seek constructive criticism.
-nothing extraordinary is achieved through ordinary means
Scaling without derailing – Bryan Meehan and Tony Conrad
-blue bottle coffee
-set solid goals and make sure that they are easily understandable. “Delicious, sustainable and add hospitality to the brand”
-the ethos ensures that everyone knows what to do. Stay true. It also enables you to hire the best people.
-why penetrate new markets?
-like to do things that aren’t easy. Like going to Japan which is crazy given the more obvious opportunities.
-lots of Japanese tech in what they do. So it makes more sense for them.
-not doing the obvious
-what can you do now that you have raised 30M?
-putting the money back into the coffee. Invest money into making a much better product. Investing in culture and people. Acquiring companies like subscription based coffee services or other coffee chains.
-digital business is 7X what is was last year through acquisition of Tom’s?
-bringing engineers into Blue Bottle has been going really great.
-pushing the company to think longer term. To take on more cash for the bigger picture.
Making a dumb industry smart – Jeff Clavier and Bastian Lehmann
-looked for a trojan horse to originally enter the market to enable people to buy from merchants and have it delivered
-so started by signing up merchants and hopefully they would use their product to ship product. Lots of waiting… had a major demand issue.
-figured out that just a logistics layer was insufficient. They needed a payment layer.
-the trojan horse was the network not the merchant.
-did deliveries for over 50K merchants and many had never done deliveries before
-expanded and extended the network for many of the merchants
-whale is someone who use it more than 10 times per month but accounts for 28 percent of revenue
-but others become addicted and if you use it four times then you will use it at least 1 time per month
-tons of competitors now compared to when they started. It is very busy!
-15K deliveries per week and 3rd largest transportation startup behind Uber and Lyft
-most in this space don’t want to own the logistics part of the business. There is also a geographic aspect to the competition.
Moving forward: The knowledge economy – Joe Heck, Stan Chudnovsky, Phil Libin and Joe Green
-for.us discussion around immigration reform
-make it easier for people to come to the country and fix the enforcement of immigration issues
Competing with the Real World – Philip Rosedale
-lots of people use video conferencing but many don’t like it because of the delays and that people don’t look right at you
-hardware is improving to make avatars that can manage this process for us
-demo’d it out – couldn’t capture video in a way that it made sense 🙂
-reminiscent of second life
Now it’s just technical: Marijuana on the Map – Justin Hartfield, Allen St Pierre, Bryson Rast and Parmy Olson
-discussion of cannabis and marijuana. Two types – one has THC (gets you high) and the one that doesn’t which is more medicinal (CPD version)
-there are new opportunities here now with two states (Colorado and Washington) legalizing it
-22 states and DC have medical marijuana
-16 states have decriminalized it for small amounts
-2 states have legalized with Alaska, Oregon and Florida pushing it forward
-huge explosion of dispensaries largely with huge changes in culture more than law changes
-who makes money?
-consumer side vaporizers and e-cigarette tech is doing really well
-LED and lighting on the growing side is exploding
-good software for dispensaries to help them manage customer and their needs/preferences
-this is extremely main stream. 35 to 40B illegal market will condense down to a 10 to 15B legal market in the USA
-sales tax (35 percent) is a main driver for the legalization of this product
-Colorado seeing 15 to 20M in tax revenue this year!
-first time ever that the government is participating in the action
-what about big tobacco? Not now but perhaps once it is legalized.
-there are a number of flavors and effects through the different strains with no regulation on it today. Lots of innovation going on here and similarities to wine.
-evolution will be similar to beer in that there will be micro-growers and then high volume lower cost generic products
-very difficult to grow it yourself. Even though you can (similar to beer) but few do that today.
-opportunities now in potency and quality testing for chemists and scientists for quality insurance
-expect marijuana to be discussed heavily during the 2016 election cycle
Taking Note: The Future of Now – Phil Libin and Jessica Lessin
-100M users announced today!
-thinks that the world is going to change with wearables. Our access to digital intelligence is vastly increasing.
-this will change what it means to be human when you always have access.
-so starting integration Evernote with wearables to see what might add value
-Evernote rejects indirect revenue (ads, data mining, etc). Business model is old-fashioned to make money when customers want to pay them.
-IPO is 2-3 years away. Don’t deserve to be a great public company and fortunate they don’t have to rush. Want to be ready with the best team and repeatable revenue.
-Phil does angel investing and claims he is really bad at it. Only angel invests in things he loves and would use himself.
-2-3 companies per year
-Evernote is shifting towards adding more elements/features around working with friends and colleagues. Less of a solo experience.
Creating Practical Magic with the Internet of Things – Chet Pipkin
-pushing WeMo hard and Internet of Things
-iDC predicting 30B devices by 2020
-want to build an ecosystem that can learn our behaviors and anticipate needs for users
-have a module called WeMo spark that can be easily embedded into products they don’t make today from coffee machines to crock pots
-talked about WeMo maker inventor program at wemo.is
-WeMo Water – sensing tech to monitor, measure, and manage your home water consumption.
-hilarious chart showing percentage of flushes to sink usage at the conference. Also time spent washing hands.
The Role of the COO – Keith Rabois, Ryan Graves, and Marcus Segal
-importance of operations and COO
-the processes and people behind the processes is one way of thinking about being a COO
-each usually have their own strengths and hence the type of structure to support it that is needed
-founders will know when they need to bring on a COO as you hit pain points
-who you bring in at these points of friction will be absolutely critical
-if half of your schedule is booked going into a week then you need some executive support.
-depending on the skills and interests of the CEO then defines the role of the COO
-if you are a solo founder a COO can also help mirror yourself without doing that at a VP type role
-it also depends on how fast you are growing and scaling
-dating is a better analogy rather than interviewing for this type of a position. You must be close on your thinking and alignment.
-you can’t be debating everything everyday
-process doesn’t have to be the enemy of creativity. If that happens you should fix it. Check out Reed Hasting’s culture slides especially on the process ones
-really feel like culture is a key area that you need to get right. Spending time on the hiring and people building processes. Unfortunately you have to do pruning which is a brutal process. Pruning sends a message to the team that they are the very best and there are very high expectations.
-everyone complaining that there is no good software for managing culture, managing people effectively, etc.
-if you have a really well-defined culture then 80 percent of decisions just get made because everyone understands the goals
-watch for over tilting at the start
-at 20-30 people don’t let the CEO become the bottleneck. Don’t let them meet with you all the time because you can’t hold them accountable
-keep your personal growth curve ahead of your company’s growth curve
-managing people can’t be automated because of complexity, cultural differences, etc
-teams you build are the companies you build. Great line by Keith.
-soft skills are very, very important.
Skycatch Demo: Attack of the Drones – Christian Hanz and Marcus Segal
-been working on drones for 1.5 years
-working on autonomous landing so they can start to automatically change the battery
-realized that construction workers needed help on the job checking and comparing work
-training costs were surprising and in some cases took 2 weeks
-“dull, dirty and dangerous” summarizes the types of places where the drones get used
-product will continue to get more reliable. That is a key area of focus.
-how tough was it to raise money?
-very tough. People didn’t believe this would be viable.
Internet of Things: Connecting the Dots – Rob Chandhok, Jason Johnson, Shwetak Patel and Spencer Reiss
-panel on Internet of Things
-progress has been slow as people still experiment with the user experience, demand for it and building on top of existing technology/standards
-there aren’t a lot of different systems still and the ecosystem is still lacking
-but as we start to add intelligence to your lock or your thermostat it is becoming much more exciting
-how we deal with security?
-one of the ideas is to have a properly segregated network at home or in the office
-part of the security element is educating people on the actual risks (eg. Smart locks vs. Breaking the window)
-proximity can also be used to provide credentials or authorization for accessing services or products
-what are the big exciting categories that could use more focus?
-lighting is about to explode from being vertical brands to an ecosystem
-media is likely the other or conservation of energy/water
-health care is another option for ensuring that the house becomes a safe place.
-software tooling improvements will also be key to expanding the reach of IoT products to larger numbers of people
Slotting everything into place – Joe Kaminkow and Marcus Segal
-casino games are interactive, multimedia, multi-player and kick ass graphics
-casinos moving to social slot machines
-ultimately pin ball also moved to a virtual layout with many similarities to slot machines
-culturally in the company everyone is a game designer. Everyone had two titles.
-you need to ensure that there is buy-in from everyone in the company. The ideas have to pass the janitor test. Can the average person understand what we are doing.
-secret to success 9 words “I am in trouble I need your help please” is the way they have built their business
-don”t put someone on your board who you are afraid to ask for help. That isn’t useful.
-get out of your office and get off your ass as a manager
-know what your people are working on. Ask them about their life and build a loyal workforce
-there is nothing more satisfying than seeing your product being used and being loved and being part of their daily lives
-“funny makes money”
-slot machines are still highest revenue generating items in casinos and coming to your phone
Y Combinate – Sam Altman and Laurie Segall
-why does PG say you are the right guy?
-anyone of the first founders could have done it but Sam had been close to it.
-startups can save the world and that is what he wants to work on
-increased money they would invest and trying to find a good balance
-want to fund a broader swath of companies like biotech, older entrepreneurs, etc so want to widen the field of companies they can fund
-why give the money to Quora?
-secret to YC is tight community of founders who help each other. Adam (Quora) is a great asset as part of the network.
-whatever is the current hot trend has companies from 2 years ago. Not sure which will work and which won’t right now. Synthetic biology company in the next batch that can manipulate DNA.
-what is the one thing founders need to rise above? We have to fall in love with the idea and the team. Contention is ok. If any one partner loves a company they will fund it even if the rest don’t like it.
-YC model is high failure but some multi-million dollar outsized successes
-always thinking could this be the next Airbnb.
-relentless determination is so key
-funded more than 700 startups and so have a ton of data. Smartest people aren’t the most successful. Most determined and not giving up is more important.
-how do you effectively determine how determined someone is?
-if you lack passion you won’t get funded or if you act like an asshole.
-amazing to hear about all of the data YC captures about their teams if they include things like founder personalities