Musings of a VC in NYC

Feature Friday: The Checkout Form

One of the most aggravating things about commerce online and on mobile is the inconsistent checkout experience site to site and app to app. It's one of the many things that keeps me shopping at Amazon and clicking on the PayPal button when its available. That and stored payment credentials.

Last week I saw something that makes me think we may be heading in the right direction. Stripe, the fast growing payments company, introduced Stripe Checkout. Now, if you choose to use it, Stripe will give you a standard checkout form for both web and mobile. It's a few lines of code in your app and Stripe takes care of the rest. It is optimized for the user experience and for the device. And they plan to keep optimizing it so that developers who use it will see better and better conversion rates.

But this is also great for the buyer. Now when I see this button below, I know I am going to pay with Stripe and I know what I am in for in terms of user experience.

It's like the good housekeeping seal of approval. I know I am going to get a simple and easy checkout flow.

The next thing I'd like to see from Stripe is stored payment credentials. Then they would enter the land of Amazon and PayPal for me for sure.

Feature Friday: The Explore Page

At USV we invest in a lot of networks and marketplaces. These are messy places where anyone can post most anything and it can be hard to find the good stuff. Enter the explore page. Using data, analytics, social signals, and often some human element, the explore pages are incredible places to discover amazing stuff. Here are some of my favorites:

SoundCloud Explore

Tumblr Explore

Kickstarter Discover

Foursquare Explore

If you are building a service that empowers people to post all sorts of things, I encourage you to create an explore page where your users can make sense of it all.

Voomly

AVC regular and all around fun and smart guy Andy Swan and his brother Landon have built Voomly. Andy came into USV yesterday to tell me and Andy about it. As you would expect, he also brought a signed bottle of Pappy. As JLM would say, it was well played.

Voomly is a service that folks who have expertise can use to build followings and sell subscriptions to newsletters and Q&A services. I joined the service during our meeting yesterday but I chose not to sell any Q&A services at this time. I did pay and subscribe to Andy and JLM on Voomly and have already asked both of them a question and received a reply.

The service is not (yet) a marketplace. It is really just a utility today. But it can certainly become a marketplace over time if this idea takes off.

I can see this being really useful in high value applications like stock trading (a web native GLG?) and betting (a web native tip sheet?). I also think tech support is an interesting category. I am sure there are many others.

Anyway, I like what they have built and think the AVC community ought to know about it. Check Voomly out.

Guest Post: Startup Business Development 101

Holger Luedorf has been doing business development in the web/tech/mobile sectors for almost 15 years. He currently leads Business Development (BD) for our portfolio company foursquare. Holger has contributed a guest post with a bunch of great advice for startups that are just getting around to BD and what they should do and what they should not do. His views and opinions are his own and not those of foursquare.
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The Beginner’s Guide to Start-up BD: 15 Basic Rules

A lot of the rules below will seem like no-brainers to any seasoned business development manager, but I think it is worth putting them together in one list.  I hope that they will be useful for teams that are building up BD teams from scratch or to those start-ups without a dedicated BD team and in which for example the founders or others take on BD as an additional responsibility.  I don’t think this list is complete and I am planning to add additional rules over time.  If you have any direct feedback, please tweet me at @holger.

Create clear BD targets - This goes without saying, but it is worth repeating.  Without clear targets, a BD team will aimlessly chase deals and in the worst case have a distracting effect on the rest of the organization by creating deals that are not core to the company but take up valuable executive, product, and engineering resources.  Ideally, BD targets are a subset of the overall company goals (e.g. grow the user base, expand internationally, outsource a critical technology etc.) but they could also be outside the core company goals, like exploring alternative business opportunities, seeking M&A opportunities etc.

Structure your approach – Don’t just run off and randomly approach partners.  Once the goals are set, the first thing the BD team or person should do is set priorities in terms of who your ideal partners are.  This includes market sizing, market and competitive analysis, and a clear timeline.  If you are new to the industry you better start researching yesterday.  There is nothing worse than being pitched by someone who did not make the effort to understand your business and the challenges you are facing.  Secondly, you need to put a lot of work into figuring out how to approach these partners (more to that in point 3). Finally, you have to make sure you have all the necessary contacts to approach your target partners.  If not, work your network.  Cold calls are rarely effective.  Unless you come recommended by a trusted source, chances are very low that you will get someone’s attention.  Ideally, you have built up a ton of what I call “good karma” by helping out others friends in the industry in previous situation so that you can call in some favors and ask for introductions.

Solve problems, help partners reach their goals – This is one of the most critical business development tasks.  Partnerships never work when the benefits are one-sided.  In addition to helping you reach your own targets, you really have to figure out how your proposal helps the potential partner reach their goals.  Again, you would think this is a total no-brainer, but this does not seem to be the case judging by the large amounts of proposals that I get that are not really solving any of my company’s problems, or are so obviously mass-emails without any direct relation to myself or my organization.  I consider these proposals to be spam and will refuse even reading those emails once I realize what they are.

Be prepared, research the companies you want to partner with – In addition to a well thought out, mutually beneficial proposal, it is important to research your target partners.  To me this is like prepping for an interview.  Nothing worse than realizing that the person you are interviewing knows nothing about your company or the issues you are facing but at the same time tells you how “passionate” s/he is about your business.  Try to figure out what is top of mind for your potential partner. Is it facing a particular competitive thread, has it had a major product launch failure, has the team that you are speaking to experienced a recent change of executives etc. There are so many possible reasons that might make you want to tweak your approach, change your timing, etc.  It is always hard to know for sure what matters most, but I am a firm believer that solid preparation will help you produce better partnerships.  I am literally spending 15-20% of my work time researching the mobile, location, advertising space etc. to understand what our partners are most likely thinking of our product and our company.  This means scanning a lot of industry press and frequently meeting with peers to share information.

Understand the partner organization – This is related to the previous point, but focuses on a different aspect.  Especially when trying to partner with a large company, you want to make sure you have as complete of an understanding of the organizational structure as possible.   Who are the decision-makers, which teams or managers are heavily weighing in, who is responsible for the long-term execution of the partnership etc.  This organizational understanding will help you address the right people in the partner organization and help you identify additional contacts you might want to connect or back-channel with.

Build a hierarchy of touch points – Ideally, a start-up BD team does not act in a vacuum but is able to tap into various levels of its own managers and executives.  I am fortunate that our CEO and other execs realize the value we can drive via partnerships and that they support the BD efforts in building additional touch points between our company and that of certain partners.  For high-value partnerships, I always try to build a relationship on multiple levels, e.g. between the two day-to-day partnership managers, between the two VP-level managers responsible for those partnership, and ideally also between two or more C-level execs.  Having these multi-level relationships gives you more flexibility in dealing with your partners.  In certain scenarios bottoms-up approaches might work better and you want to convince the ground-level partner managers first but in other cases it might be better to pitch top-down knowing that an executive is passionate about certain topics and will strongly influence the decision making process of her organization.

Always be responsive – A pet peeve of mine.  I think it is disrespectful not to respond to companies or people reaching out for various reasons.  The only things I usually do not respond to are blatantly obvious sales pitches.  But if people are reaching out asking for jobs, with a partnership proposal, or some simple user feedback, I will always try to reply within 48 hours, sometimes much faster.  In many cases my answers are a short but polite “No”, but at least I acknowledge their message or request.  This is how I expect to be treated, and that is why I tend to spend a good amount of time responding to incoming email, twitter, and Linkedin messages, etc.  I am pretty sure that there are a lot of people who disagree with me on this, but that is my personal modus operandi, which I think this also creates “good karma”.  (side note: I do not connect with people on Linkedin unless I had at least a few minutes of personal interaction).

Don’t rush, don’t annoy – Always remember that you are working in a dynamic start-up while some of the bigger organizations you are trying to partner with have heaps of processes and check-points that decisions have to go through.  I remember from my time at two of those large organizations, in my case Deutsche Telekom and Yahoo!, that people in those organizations could get frustrated with impatient partners banging on their doors all the time.  My mantra: Pitch, have a solid follow-up providing additional data points or whatever else were the action points, but then let it sit for a period of time, before sending a reminder.  There might be legitimate deadlines that you want to be clear about but otherwise give your partners enough time to make their decision, at their own pace. Appearing over-eager never helps from my experience.

Can’t close? Regroup, analyze, and adapt if possible – Don’t beat a dead horse.  If a deal cannot get done, and there might be many good reasons, regroup and think why the partnership did not make sense for the potential partner.  Did you have the right partnership concept in the first place, were you talking to the right potential partners, did you talk to the right people in the organization, did the business model make sense for both parties etc.  There can be hundreds of reasons why a deal did not work out and it is important to really try to understand why and come up with an alternative approach.

Own your partners, not just deals – There is a fundamental difference between Business Development and Partner Management.  In many large organizations you have a dedicated BD team that flies in to negotiate and close a deal and then moves on to the next deal with another partner. On the other hand you have Partner/Account Management that identifies potential deals, brings in BD for potential negotiations, and then takes over full responsibility for the deal implementation and on-going partnership.   In a start-up with potentially no dedicated BD team or at best a very small one, you have to double-up and take responsibility for both the deal making and on-going partner management.  This can be tricky as in the BD negotiations you want to be able to get the best possible deal for your company and this can create friction with your partners, while as a partner manager you want to be as close to your partner as possible to understand what is going on and in order to smoothly execute the partnership. When BD is a separate function from Partner Management, it is easy to play good cop, bad cop.  The BD guys are the bad cops haggling over the best possible deal while the partner manger is the good cop back-channeling with the partner organization trying to create a positive, productive setting for the partnership.  In a start-up you really have to bridge those attitudes, which takes some experience.  In the end solid knowledge about the partner’s organization and goals will help you find that right balance.

Don’t over-commit, internally or externally – With many partnership opportunities, you only have a few potentially only one shot at getting it right, so it is critical that what you commit to towards the partner is actually something that your company can deliver.  This might be in the form of a product feature, launch timeline, support function etc.  Do not over commit as you run the risk of killing the short-term opportunity and long term relationship.  The same is true for internal commitment.  Make sure that deals are signed off by and have commitment from all internal parties involved. This includes the management team, which has to ensure that a deal is in line with the overall company objectives.

Build strong relationships with key partners over time – What goes around, comes around.  A strong working relationship with partners will help you build trust over time.  Don’t forget that industries tend to be very small so having a solid reputation for being a trustworthy, proactive interface and partner will help you when partners research you and your company.   Also keep in mind that many times, people will stay involved in a single industry over decades, so how good your relationship with someone 5 or 10 years ago was does matter in a new setting, maybe after that person joined a new company that is a potential partner of yours. Strong relationships with business partners will help getting deals done and in some cases can be the deciding factor that a decision-maker on the partner side chooses your company over another.  Following many of the points above is what creates such strong relationships.

Be present as a company – In some cases your start-up is doing so great that you are getting a ton of positive press and interest from companies who want to partner with you.  But these scenarios are rare and can change.  One factor that will support your BD efforts is that your company has a positive image in the market.  In addition to your start-up’s marketing & PR functions, BD can play an important role to represent the company to the outside world.  Participation in conferences or other speaking engagements, hosting university student visits, or providing quotes and insights to journalists are all things that can help your company and your efforts as a BD team.  Of course this should never become a time-suck for you and others on the BD team, but especially when it can be done mainly locally and without much travel involved, it can be a good way to make your company be “part of the conversation”, gain valuable market insights, and network with other people and companies in the industry.

Relay partner feedback back into your own organization – The BD team is usually one of the most outward facing teams in a start-up and as such you will be able to collect a ton of valuable feedback for company.  A lot of partner meetings generate a lot of information like product critique, observation of what the competition is doing, insights into what partners would like to see in terms of product innovation etc.  Make it a point to regularly pass this knowledge on to the respective teams in the organization as it will help educating the organization and making more informed decisions.

Make sure you have solid legal support – I have been fortunate to have had outstanding, dedicated lawyers to work with on deals in all of my past jobs and as well as in my current role at foursquare.  Having experienced legal support that really understands the big picture and has a good balance of risk-averseness and business acumen will help getting better deals done faster. Weak legal support can kill or create weak deals.

Fun Friday: Favorite Productivity Hack

We all have tools that keep us focused, on schedule, getting stuff done. This thread is going to where we share our favorite with each other.

Mine is Lasso.

Disclosure: The Gotham Gal is an investor in Lasso's parent Edison Jr. So I have a financial interest in its success. That said, I think it's awesome.

Lasso is one of those "less is more" hacks that just works. You sync your calendar to Lasso and anytime you have a phone number in a calendar event, Lasso calls you on one of more of your phones, you pick up, and you are connected. It is particularly helpful with conference calls when you don't want to type in all the codes and such. Lasso does it for you.

Lasso is in beta and is a paid service. So it has a few kinks every now and then. But it's still great.

Lasso comes from the same people (in a different life) who brought us phonetag, another amazing productivity hack that I love.

What is your favorite productivity hack?

Feature Friday: Privacy

The Gotham Gal and I went out with friends last night. As can happen, we got talking shop towards the end of the night. And specifically we were debating the significance of Snapchat. The debate was about whether the feature that makes Snapchat special (you know your photos won't end up on Facebook) is the basis for a standalone app and business. My view, having lived through this debate with Twitter and Foursquare, is that mobile apps are features in the mobile OS and that Snapchat can and likely will own this feature in the leading mobile operating systems even though institutionalized copycats (ie Facebook who copies everything) can and will copy it. The irony that Facebook has copied a feature that is specifically designed to avoid Facebook is precious in and of itself.

But I digress. The thing I want to talk about here is the emergence of privacy as the defining feature of the next breakaway app on the social internet. What does this mean for where we are and where we are going? Is open social out and closed private in?

At times like this, I like to talk to my kids and their friends. Here is a typical college aged woman I know. She uses Twitter, Instagram, Cinemagram, Foursquare, iMessage, and Snapchat. And Facebook too. She uses each of them for what they are good for. Each of them is on her home screen - one click and she is sharing something with someone. Each app offers a different graph - that she has curated specifically for that app - and each app offers a different type of engagement. If it is something silly that she wants to share with a friend but would be mortified if it ended up on Facebook, its Snapchat. If it is something she wants out there broadly, it is Twitter. If it is something she wants to share with a wide group of curated friends, it's Instagram. She has a private Instagram account so she controls who follows her there. She is a sophisticated user of social media. She was on Facebook in middle school and has grown up with this stuff. She knows how to use social media and she adopts whatever is useful to her. Snapchat is useful to her. Privacy is an important feature at times and she is happy to have an app with that as the central value proposition.

So that is my way of saying that I think privacy is an important feature and kudos to Snapchat for figuring that out. Further they invented a mode of engagement (the photos self destruct) that is new and novel. And the result is they are on the home screeen of millions of mobile phones and that number is growing by the day.

I expect we'll see a rash of copycats and other approaches to leveraging privacy as the central value proposition in the coming months. I am not sure that is the right thing to learn from this though. I think the right thing is to think about what other features are missing in the mobile OS and figure out the right mode of engagement to implement that feature. That is what Twitter did with status, Foursquare did with location, Instagram did with photo sharing, and Snapchat did with privacy. That got each of them on the home screen. Figure out what the next thing is.

Video Of The Week: The Golden Rules

Here's an oldie but goodie. I think it is as true of mobile apps as web apps.

The 10 Golden Principles of Successful Web Apps from Carsonified on Vimeo.

Single User Utility In A Social System

The first web 2 style social network we invested in at USV was delicious. We learned a lot from that one even though it was a short investment for us.I still wonder what might have been. But that's not the subject of this post.

One of the most important lessons we took from delicious was the value of single user utility in social systems. It might seem odd that systems designed to leverage interactions between people can have (should have?) single person utility. But I strongly believe they should.

The first users of delicious were barely aware of and rarely used its social aspects. They just wanted to store their bookmarks in the cloud instead of in their browser. And they liked the tag based classification system. And they liked being able to use their links from any device. That was the single person utility delicious was built on.

But because bookmarks were public by default which resulted in most links being shared with others, a large social system developed. The delicious popular page was an important web destination in its day and most of those visitors never posted a link to delicious. They consumed others' links.

I was reminded of delicious this week as I used foursquare to plan out a bunch of single day itineraries for our family visit to Tokyo. I use foursquare to do this because it works great on all of our phones, the lists automatically geosort depending on where we are, and because the map view of lists makes a great walking map of a neighborhood or city. This is all single user utility for me (or small group utility for our family).

I was surprised to see folks saving these lists to their foursquare accounts. I can understand why someone might want to save a "best of Tokyo" list but saving our day's itinerary wasn't an obvious move to me.

I put together my best of lists on foursquare specifically for others. I put these single day itineraries specifically for me and my family. But big open data rich social platforms are interesting places. One man's single person utility is another man's social value.

And, as I have said before, network effects help on the way up and hurt on the way down. If I get great single person utility from your service, it is less likely that I will follow my friends out of it when your service ends its stay on the hype cycle and the iTunes leaderboard.

So I encourage the product teams in our portfolio to think hard about building single person utility into their products. Its a paradox of sorts but by making sure its useful to just one person you are insuring its useful to tens of millions of people.

NY Enterprise Technology Meetup

Next tuesday evening, I am giving at talk at the NY Enterprise Technology Meetup. I will talk about networks in the enteprise. I plan to use USV investments like WorkMarket and Pollenware to discuss how entrepreneurs can use networks to build powerful enterprise oriented businesses.

If you plan to attend that meetup or if you are interested in networks and enterprises, I have created a hackpad where you can introduce suggested topics for me to touch on in my talk. This hackpad is totally open and anyone can contribute to it.

I know that the meetup is almost completely sold out and that many of you who might want to attend will not be able to. I hope the meetup organizers will record the talk so I can post it here for everyone to see after the fact.

Mary Meeker's 2012 Internet Trends

Mary published this presentation this past week. I love these "state of the internet" presentations Mary does. There is so much useful information and insights in them. I encourage all of you to work your way through it this weekend if you haven't already done that.

2012 KPCB Internet Trends Year-End Update from Kleiner Perkins Caufield & Byers