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- @nikhilkal
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- VC at SoftBank CapitalVenture Capital & Private Equity | Greater New York City Area, USSummary
I'm an engineer, UX designer, and entrepreneur-turned VC. I invest in startups via SoftBank Capital in NYC. In our most recent fund (2010), we've done 45+ investments including BuzzFeed, Buddy Media, Huffington Post, OMGPOP, Zynga, Gilt Groupe, and we've been investing since 1995.
I've also invested at the seed level in companies like The New Hive, Virool, ClassicSpecs, SellerCrowd, & Levo League.
I love to invest in commerce, connected devices, mobile tech and startups with wild ideas and unfair advantages.
Previous:
Military intelligence (4 yrs)
Founded and ran a hedge fund (3 yrs)
Localytics, mobile app analytics (2 yrs)
UX designer/developer (life)Experience- Jun 2010 - PresentPrincipal / SoftBank Capital
Leading early-stage venture capital investments in digital media, mobile and ecommerce.
- Apr 2009 - Jun 2010Director of Business Development & Marketing / Localytics
Localytics builds software platforms and tools for the developers of smartphone applications (BlackBerry, iPhone, Android, Windows Mobile, Symbian)
- Jul 2005 - Jul 2009Senior Design/Dev Engineer and Project Manager / The MITRE Corporation
Leading decision support research and performing engineering consulting for several MITRE sponsors, including the Intelligence Community, Air Force, Dept of Homeland Security, and FAA. Responsibilities span engineering expertise, program management, and business analysis. Projects include chairing Customer Relationship Management initiatives, ROI analyses, process modeling, & workflow analysis. Industry domains include software design engineering, intelligence analysis, organizational change management, and R&D portfolio analysis
- Dec 2006 - Jan 2008Co-Founder, Managing Director / Partner6
Set strategic vision and goals for Partner6 Investment Group. Managed team of 4 Fund Managers for Partner6's entire investment allocation.
Identified and implemented enterprise-wide standards for financial analyses. Served as primary lead between Partner 6 and trading platforms.
Education- Harvard Business SchoolMBA
Activities: TechMedia Club Co-President - Tufts UniversityMS in Engineering Management
- Tufts University
Additional Information-
Websites:
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Honors:Command & Control Center (C2C) Award (MITRE, 2008) E543 Spot Award (MITRE, 2007) The deFlorez Prize in Human Engineering (Tufts University, 2005)
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Tweets
- An oldie Goldie from Howard Morgan @firstround on the "Work Work Balance" http://t.co/PMtnKu2qCp
- some light weekend reading. #VirtualCurrencySchemes http://t.co/eSJ5Uf3qis
- @Besvinick yes
- why is the $3.6B Y! acq of Geocities (both SoftBank pf companies :) ) trending on Hacker News? http://t.co/V4ILE0PkhLMay 17, 13 from web Reply, Retweet, Favorite
- @davidcohen congrats!!
- @jbloomgarden @Square yet isn't it magical when it remembers you?
- RT @waxpancake: Virgin America flight attendant on landing: “If your mobile device is within reach, you can stop pretending it’s turned off…
- @andreahong mmkinda
- @LDEZEN stop talking about me on twitter
- RT @NatGeopix: You're drunk, rainbow. http://t.co/J4pWXrpTG9
- @coreyjstanford @Blazetrak @FashAdv thx pleasure was all mine. @jacobbrody says he got his voice back today.
- @gregisenberg cool guys.
- Lunch w Prince Harry and David Cameron :) http://t.co/ADv76c5ez9
- RT @birsic: My Medical Choice http://t.co/0OfaIw7yj9 Powerful and brave
- @utekkare @sourceasy was a pleasure
- RT @Frendorsedguy: “@shaig: 3 VCs and @snoopdogg Ventures // @nikhilkal @jacobbrody #snoopify http://t.co/MWmwV09GdC http://t.co/l5zl7eYB7…
- @bcdsays yes, not to me though
- Protip: don't do a pitch call while using your breast pump. They have a sound.
- Obama, prince Harry and Cameron in town. I am in traffic.
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Posts
- When to hire your your first salesperson (by Tom Tunguz)
http://tomtunguz.com/when-to-hire-a-salesperson
To many entrepreneurs, hiring the first salesperson is a mystery. When should I do it? How much should I pay this person? How do I structure the work?
The great part about sales teams and sales departments is that they quantitative - sales teams thrive on numbers. At the most fundamental level, sales productivity has to exceed costs.
So let’s answer the question of when to hire an salesperson by understanding the financial mechanics of a sales team. When building a sales team, there are three things to consider:
- The costs of the sales person - salary and performance pay
- The output of that salesperson - sales productivity
- The inputs required to make a salesperson successful - lead volumes
Let’s discuss each point in order.
Costs
Assume it costs $70k annually to hire an inside sales person: $30k in base salary, $30k in on-target earnings/performance pay (or OTE) and $10k in benefits. This means at the very least, your first sales person must close $70k in business for you to break-even on the hire.
But in the early days of a sales team it’s typical to see a sales-quota-to-earnings ratio is about 1:2 or 1:3. As a sales team and product matures and price increases, this ratio can grow further. I’ll use 1:2 or $140k annual quota for this example.
Outputs: Sales Productivity
Sales productivity has two components: average deal size and deal velocity.
Our hypothetical salesperson must sell $140k of products each year or about $12k per month. There are many ways of accomplishing this goal. At one extreme, our salesperson could close one $140k deal each year. At another, she might close twenty-four $500 deals each month. Any permutation in between meets the quota requirement.
Selling a $140k contract is a very different sale to a very different customer from a $500 contract. Most enterprises won’t buy $140k worth of software over the phone from your inside sales person. They want to meet someone, build a relationship and trust and negotiate a contract. You’ll need a field or outside sales person for that and they fetch salaries of $250k+!
Additionally, pursuing a few very large contracts introduces huge variance in sales forecasting. It’s called elephant hunting for a reason - high risk, high reward.
As a startup with presumably constrained finances, the ideal first sales person produces predictable and consistent sales. This is better for performance measurement (understanding how well the sales person is doing) and cash flow management (ensuring sales is filling the coffers early and often).
As a result in addition to a quota, sales managers often prescribe a sales velocity or the number of deals closed within a period. Sales velocity is dependent on your product’s price and the total number of customer contacts a salesperson can make in a month.
At best, the average salesperson has the time to convert 60 leads to customers. Assume a sales person works 20 days per month for 9 hours per day. Assume each sales call takes 45 minutes of time, 15 minutes of preparation/followup and each sale requires 3 calls (introduction, product demo and close) and voila - 60 leads.
But not all leads convert. Typical conversion rates for inside sales teams are roughly 20 to 30%. Of the 60 leads, only 15 should convert to customers. Those 15 customers need to produce about $12k in monthly quota to pay for our sales person which implies a pricing floor of $800 per month or $9600 per year.
Unless your product can fetch that price, a sales team structured in the way outlined above would be unprofitable.
Inputs: Leads
Our sales person must contact 60 qualified leads, users with intent to convert to paying customers, to achieve quota. To satisfy that monthly demand, the product and marketing teams must attract enough new users and qualify leads through the funnel. Otherwise, the salesperson will lack the leads to be successful.
Freemium businesses convert about 2 to 4% of new user accounts into paying customers. More traditional enterprise sales tend to convert 10 to 15% of leads (people signing up on the home page asking for information).
A freemium business needs to generate about 3000 users that could pay $800 per month to gin up 60 qualified leads each month. And a traditional enterprise software startup needs to create 400 signups. Until your startup is filling the top of the sales pipeline with roughly these numbers, you risk hiring a salesperson too early.
Other things to consider
There are many other factors to consider when laying the foundation for your sales team including customer churn rates, customer costs to serve (account management), payback periods, contract requirements, sales person experience, internal time allocation and so on.
But when your startup’s software can command a high enough price and when your lead volumes reach a certain threshold, you should have the confidence to hire your first salesperson.
Reading old posts and saw this startup poetry from Ben Horowitz. And if you are wondering, I’m not tearing up, I just got something in both my eyes.
The Struggle is when you wonder why you started the company in the first place.
The Struggle is when people ask you why you don’t quit and you don’t know the answer.
The Struggle is when your employees think you are lying and you think they may be right.
The Struggle is when food loses its taste.
The Struggle is when you don’t believe you should be CEO of your company. The Struggle is when you know that you are in over your head and you know that you cannot be replaced. The Struggle is when everybody thinks you are an idiot, but nobody will fire you. The Struggle is where self-doubt becomes self-hatred.
The Struggle is when you are having a conversation with someone and you can’t hear a word that they are saying because all you can hear is The Struggle.
The Struggle is when you want the pain to stop. The Struggle is unhappiness.
The Struggle is when you go on vacation to feel better and you feel worse.
The Struggle is when you are surrounded by people and you are all alone. The Struggle has no mercy.
The Struggle is the land of broken promises and crushed dreams. The Struggle is a cold sweat. The Struggle is where your guts boil so much that you feel like you are going to spit blood.
The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.
Most people are not strong enough.
Every great entrepreneur from Steve Jobs to Mark Zuckerberg went through The Struggle and struggle they did, so you are not alone. But that does not mean that you will make it. You may not make it. That is why it is The Struggle.
The Struggle is where greatness comes from.
- Principles of Ecommerce
- The future is e-commerce; offline commerce will serve only two purposes: immediacy (stuff you need right away), and experiences (showroom, fun venues).
- The role of offline lies in the value of the “showroom” and “entertainment” aspects to places like Williams Sonoma. The future of commerce is a hybrid model with (entertaining) showrooms + online fullfillment
- The future of e-commerce is combining online and offline experiences in disruptive ways. (Chloe + Isabel, Warby Parker, Everlane, and Stylemint)
- There is no such a thing as e-commerce any more. There’s just commerce. You can innovate in commerce with technology, but the e-commerce silo is dead/dying (mobile payments are disrupting/removing the online/offline divide).
- The future of e-commerce is vertical integration in markets where there is significant markup in both wholesale and retail (think Shoedazzle, Bonobos, J Hilburn, Warby Parker, IndoChino).
- Few successful e-commerce companies were started in the early 2000s, although a slew of recent new entrants appear to be getting traction - flash sales, social commerce, subscription commerce and other new “content + commerce” models
- The first wave of e-commerce was about commoditization this wave online and offline is about being a “merchant”(point of view, authority, experience etc).
- The key equation driving e-commerce is: profit = lifetime customer value minus customer acquisition costs
- “If it has a UPC code, Amazon will beat you.” Before you enter the e-commerce game, visit an Amazon warehouse.
- E-commerce is good for two things – price and exclusives. Amazon will beat you on price, so you have to beat it on exclusives.
- The only way to escape commoditization and catalogue commerce dominated by Amazon is to a) sell used stuff, or b) make your own products (or provide a marketplace for those things), or c) (possibly) offer customisation
- Be wary of e-commerce businesses based on customization – they’ve existed for a decade (cafePress, Shutterly, Vistaprint) and yet none are thriving. Customers don’t want customization, they want great brands and great design, and they want to be told what they want.
- The e-commerce opportunity is to contribute to the e-commerce ecosystem rather than sell directly yourself; four opportunities – 1) supply chain innovation, b) marketplaces, c) e-commerce solutions for small businesses, d)mobile payments
- There’s room for innovation in the space as long as the ecommerce company creates value for all participants – the retailer, the supplier and the customer
- Compete in an industry with a grey market, where consumers are willing to pay higher prices for reducing risk, for authenticity, and warranties
- There are opportunities to venture into segments where Amazon won’t go (adult, arms… !)
- The opportunity for e-commerce success is a) sell to iPad owners (iPad owners are 10x more valuable than non iPad owners), b) mobile commerce (nobody owns this yet), and b) target your customers who use social features (3 to 4 x more valuable)
- You can’t sell to people who know exactly what they want – Amazon owns that; focus instead either a) ‘discovery‘ (“the best place to discover the stuff you don’t know you need”) or b) deep domain expertise
- Amazon is not a store, it’s the world’s best supply chain and logistics company. Amazon is transforming from a retailer to a marketplace+services provider over time.
- Domain expertise, live assistance, and overall experience are the critical success factors for success in a market where price-competitiveness and scale rule
- Necessary (but not sufficient conditions) for e-commerce success are a) remarkable, unique and branded experience and remarkable, unique and branded service; do what Apple, Tiffany & Co., Coach, Lululemon do in bricks and mortar commerce, but online
- It's not me, it's you.
About a year ago I wrote a post entitled “The VC I Want to Be” (highlights pasted below). I believe every word of it. There’s things I’ve done well, and far more things I need to work on, but I’m proud of the friends, companies, and mentors I’ve been fortunate to work with in the last year. There’s also a few close friends that I never get to thank enough for the opportunities I’ve had. These people mean more to me than they’ll ever know and I’m proud to share that with the world.
Joe Medved, SoftBank Capital - You gave my first real opportunity in venture and have been my champion in Boston, NYC and at SoftBank since day one. I quote and emulate you incessantly. You are my greatest influence.
Ann Miura-Ko, Floodgate - You told me I was better off starting another company, paying more dues, and coming in later in life. I said you were wrong, but you still sent me back to the east coast. When I got your email the next morning about how you got the same advice, threw it away, and were on my team, I was thrilled and inspired.
Jeff Bussgang, Flybridge - One dinner can change a life and I owe that to you.
Shawn Broderick and Brad Feld, TechStars - Shawn, you advised me on my first tech company, welcomed me to the TechStars family and made the intro to Joe. Around the same time I met Brad. I obsessed with your blog, and today am proud to share a board seat with you.
Steve Schlafman, Lerer Ventures - You are my confidant, friend, and I admire you.
- Nikhil Kalghatgi, Principal, SoftBank Capital
I LOVE my job and want to be great at it. I’ve spent several days over the last few months reflecting on where I’m heading and the person I’d like to be. Much of that will be reflected in my professional style and brand, So here’s a very public stake in the ground which should help me both commit and reflect back in a few years. Thanks to @bussgang and @joevc for inspiration.
The VC I Want to Be follows a few principles to guide behavior and decision making.
1. Earn trust, don’t expect it. In first meetings it’s easy to list hashable cred and who you know in order to impress people, but by the end of any relationship, people will remember you for the way you treated them. For my style, this translates to demonstrable integrity and honesty. I’ve been able to witness our partners give advice to entrepreneurs that is entirely opposed to SoftBank’s interests (e.g. don’t take our money, investor xyz would be a better fit), but is the right direction for the startup. In every case you earn the respect of the entrepreneur, which is more valuable professionally AND financially in the long run.
2. Understanding the entrepreneur. I am a bit fearful of becoming an arrogant prick, which I hope is key to avoiding becoming an arrogant prick. Sure, VCs are busy but the person on the other side of the table has spent countless hours preparing for a meeting in which to talk about what could be his or her life’s work/passion. At one point in time I was turned down by many VC’s. However, those that said ‘no’ in the right way are now my colleagues, friends and even co-investors. This level of professionalism and humility is never negotiable, and stems from a keen sense of empathy.
3. Be self-aware. Do I honestly know what my value add is to startups today? I’m fully aware that today my value add is minimal compared any VC veteran, but that it grows each day. I believe my pitch for differentiation today is: my training as an engineer doing UX and front end design, working with startups and mobile apps since pre-App Store, and having a sense of entrepreneurship from TechStars, my ventures and my father’s biotech startups. I’m also aware that all of that can be worth jack if it’s not applicable to your specific startup. So, every month I intend to pick a startup and ask for feedback on my ability and value as a VC.
“Path was the missing link between me and my mother. I left Paris two years ago to come to Silicon Valley. I’ve lived abroad before in London and Berlin, but never this far. My mother is the person I used to interact with the most on a daily basis. Of course she was excited about the…
Great post by Roger McNamee and Mike Maples on the shifting digital landscape from the internet to the hypernet (web + cellular + wifi) and the hyperweb (new UX’s built on nodes and clouds not apps, browsers, and pages).
by @m2jr
Big Change #1: The Hypernet Emerges from the Web + Cellular + WiFi
It’s hard to believe that only 5 years ago, Microsoft Windows ran on over 95% of Internet-connected devices. For all practical purposes, smart phones were not even web capable. There were no tablets as they are currently conceived. It was a pretty simple Internet world. PCs with browsers and windowed interfaces and applications accessed a single worldwide web with linked pages indexed primarily by Google….
http://rogerandmike.com/post/16817783610/exploring-hypothesis-1-next-web-architecture
Avichal Garg, co-founder of Spool (www.getspool.com) writes an amazing post on focusing on teams, not #s of developers or hiring just for best available athletes.
Focus on building 10x teams, not on hiring 10x developers
There are a lot of posts out there about identifying and hiring 10x engineers. And a lot of discussion about whether or not these people even exist. At Spool, we’ve taken a very different approach. We focused on building a 10x team.
We believe that the effort spent trying to hire five 10x developers is better spent building one 10x team.
http://avichal.wordpress.com/2011/12/16/focus-on-building-10x-teams-not-on-hiring-10x-developers/
Alex Taub, Alex Taub. A name so nice I had to say it….again. Here he talks about the best venues in NYC for stuff. If you need help connecting with any of these folks feel free to reach out to Alex or myself.
People always email me asking about securing venues for events they are organizing. This post will include all the potential locations in NYC for events, how many people they can hold, the point people there, and the general feeling of what type of events make sense there.
Entrepreneurs are sales people. They mostly sell vision, but they have to sell themselves, their people, product, business and everything in between. My buddy @scottbrit nails it on helping you be a better salesperson, for anything. In this case he uses a Skillshare course as a metaphor, but it could be an event, your product, or pitch. Listen up.
I thought it’d be cool to expose some of the less obvious tactics I used to get people to sign up for my Skillshare class. A tweet here and there just doesn’t cut it for the young and hungry. Sometimes you need to put the warpaint on.
http://life-longlearner.com/post/11907107755/guerilla-tactics-selling-a-skillshare-class-case-study
potential cover of our upcoming book entitled Adventure Capital. amazing work conor! #BFFphotographer
NYC Earthquake Devastation
(via http://jmckinley.posterous.com/dc-earthquake-devastation)
- scared investors + your failing startup = #nycwinning
Seems to be an unending supply of first-time nyc entrepreneurs. Some are building products, some are building businesses. All are getting awesome experience under their belts that, due to recent market, economic, and technical infrastructure conditions have encouraged people to start something baller. But to build a prosperous and long-term startup-ecosystem we all know we need 2-3 big companies to exit and for their key talent to do it all over again. But where does that initial talent come from? History indicates that they come from BOTH failed startups and successful ones. Case in point- almost every rockstar entrepreneur out there, failed significantly in at least one of their first few ventures.
So, back to the title. The immediate impact of the down market is that some angel investors are now unable to invest at the rate/level they would like to. Oh noes. More for me. Seriously though, I would argue this is not a major detriment to the ecosystem. Here’s why:
+Cheaper to do a lot with less money
+Many investors have moved earlier stage
+Super Angels/MicroVCs emerged to fill-in the seed investing gapSure there is less venture money and firms and more entrepreneurs than there were 5 years ago, but that is in aggregate. In early stage, NYC has seen a dramatic increase in early stage dollar and number of investments on a per entrepreneur basis (note: this includes unfunded entrepreneurs!)
For the most part, the investors unable to invest due to current market conditions are likely unsophisticated investors that don’t know the difference between a convertible w/ a cap and the new roadster drop top they can no longer afford.
Don’t take their money. You don’t need it. You’ve really learned a ton during your recent entrepreneurial endeavor and there is smart money to be had. If this is longer term down-turn, then there is NO BETTER TIME to launch a startup. Google it. Cliffnotes: talent is cheaper/available, customers are willing to explore cheaper options, incumbents are hampered with paying for 25000 mouths to feed while you are still barely (not) feeding 5. Lastly, if your venture has run it’s course you can still be a part of this ecosystem in a larger and more successful startup. You can be a part of the management team that seeds hundreds of new startups! Every one of these options is awesome and I can’t wait to see which one you take.
- Interviewing: Come Bearing Gifts
My buddy Steve Schlafman at Lerer Ventures is awesome. You should bring him a gift.
via schlafnotes:
I’ve been wanting to write this post for a while and Tristan Walker’s latest post on how he got his job at Foursquare inspired me to take the plunge this weekend. Interviewing is a necessary evil in our society and we all need to go through the process at some point in our lives (unless we’re born entrepreneurs). There are countless books written about the topic and thousands of self-proclaimed experts who try to prep us so we’re ready to handle any conceivable question. There are even entire MBA courses devoted to the subject. Those types of resources have certainly helped hundreds of thousands if not millions of job candidates around the world land the job of their dreams. The reality is, however, that jobs are more competitive than ever before and the traditional interview is changing, especially in the startup world. You’re not going to land the perfect job by just having a solid resume anymore, you need to find ways to differentiate yourself.
Throughout my career, I’ve learned, first hand, that the best resumes don’t always win. The people who win interviews, more often than not, are the ones who run through walls to demonstrate that they’re deeply passionate about the role and the company. They go the extra mile. The winners track down colleagues and acquaintances who are connected to the company and hiring managers. They also send catchy and convincing emails like the one that Tristan sent to Dennis and Naveen. Most importantly, they bring gifts to the interview and shower the hiring manager with confidence. What do I mean by that?
Gifts, in an interviewing context, are the things that resumes will never be able to communicate. They’re the ideas, the relationships, the execution, the intangibles that are impossible to capture on paper. There are a variety gifts that a candidate can bring along to an interview and here are some of them based on my experience.- Be a power user: Over the weekend, I was enjoying a cold beer with “Mike Karnj” Founder and CEO of Skillshare, and he explained that he would rather hire one of his teachers or community members over a random candidate. “You know they’re already passionate about the product and engaged with the community which is a huge advantage, he told me.”
- Come with prospects: If you’re in Business Development or Sales and interviewing for a role, you should prepare a high level sales plan, develop a target customer list, and be prepared to make introductions to high quality prospects. In the last four months, I’ve seen several startups hire VPs of Business Development who brought customers in the door during the interview process. That’s how competitive it is our there. In fact, when I was going through the Lerer Ventures interview loop, I connected the partners with several entrepreneurs who weren’t on the firm’s radar.
- Share fresh ideas: When prepping for an interview a candidate should spend at least twelve hours studying the company, the market and the product. Seriously. It takes that much time and more. At the conclusion of this deep dive, you should have a solid understanding of what the company does well, where they need to improve, how they’re vulnerable and a sense of what the short-and long-term strategy should be. You should then pull together a handful of PowerPoint slides which includes an analysis of the product / business and provides actionable recommendations. This will demonstrate to the hiring manager how you think about their business. You’d be shocked how few candidates actually do this.
- Demo your work: Come prepared to show your demos, code, and / or portfolio of work. Paper and ink can’t and will never be able to bring your past projects to life (unless you’re Steve Jobs), so compile your best work and let it stand on its own.
- Offer a free trial: Following the interview, ask the hiring manager if you can help him or her with a small project to demonstrate your competencies. For example, when I was interviewing for my role at The Kraft Group, I asked Mr. Kraft and Jonathan if I could analyze an investment to show off my skills. Without much haggling, they agreed. The opportunity that I analyzed and recommended was Quattro Wireless which was acquired by Apple last year.
- Become fluent: Learn how to speak their language. For example, Zynga works in “Zynga time” and there are hundreds of other examples. I particularly liked this post by Adam Ludwin who touches upon this point.
If you take anything away from this blog post, do everything in your power throughout the interview process to prove that you can do the job better than anyone else starting immediately. Show you can deliver value even before you leave your first interview. If you’re successful in doing this, the hiring manager will have confidence in you and you’ll make the hiring decision more difficult. As you can see from above, there are many different gifts (and probably many more) that you can offer to separate yourself from the pack. The next time you’re gunning for your dream job, bring gifts and you’ll be at an advantage. Good luck!
- The VC I Want to Be
I LOVE my job and want to be great at it. I’ve spent several days over the last few months reflecting on where I’m heading and the person I’d like to be. Much of that will be reflected in my professional style and brand, So here’s a very public stake in the ground which should help me both commit and reflect back in a few years. Thanks to @bussgang and @joevc for inspiration.
The VC I Want to Be follows a few principles to guide behavior and decision making.
1. Earn trust, don’t expect it. In first meetings it’s easy to list hashable cred and who you know in order to impress people, but by the end of any relationship, people will remember you for the way you treated them. For my style, this translates to demonstrable integrity and honesty. I’ve been able to witness our partners give advice to entrepreneurs that is entirely opposed to SoftBank’s interests (e.g. don’t take our money, investor xyz would be a better fit), but is the right direction for the startup. In every case you earn the respect of the entrepreneur, which is more valuable professionally AND financially in the long run.
2. Understanding the entrepreneur. I am a bit fearful of becoming an arrogant prick, which I hope is key to avoiding becoming an arrogant prick. Sure, VCs are busy but the person on the other side of the table has spent countless hours preparing for a meeting in which to talk about what could be his or her life’s work/passion. At one point in time I was turned down by many VC’s. However, those that said ‘no’ in the right way are now my colleagues, friends and even co-investors. This level of professionalism and humility is never negotiable, and stems from a keen sense of empathy.
3. Be self-aware. Do I honestly know what my value add is to startups today? I’m fully aware that today my value add is minimal compared any VC veteran, but that it grows each day. I believe my pitch for differentiation today is: my training as an engineer doing UX and front end design, working with startups and mobile apps since pre-App Store, and having a sense of entrepreneurship from TechStars, my ventures and my father’s biotech startups. I’m also aware that all of that can be worth jack if it’s not applicable to your specific startup. So, every month I intend to pick a startup and ask for feedback on my ability and value as a VC.Lastly, I’d like to ask for your help in achieving these goals. I welcome unsolicited feedback and suggestions to be a great VC. I respond to EVERY email (I try for within 48hrs), live at General Assembly, and can be found on the interwebs via @nikhilkal and nikhil@softbank.com.
- When to launch?
An entrepreneur asked me a question today, “Should I launch this NOW or in a couple months once it’s a little more polished.” Often, sooner to MVP the better, but most importantly you can be shielded by Moore’s “Chasm.” In other words, early adopters are a small % of your customer/user population. They have a huge tolerance for crappy products and, ultimately, are not the mass audience you are seeking. Don’t fear the no-man’s land between early adopters and mainstream. Use the Chasm Shield.
Some thoughts from Tom Eisenmann’s course on Launching Technology Ventures and Eric Ries’s Lean Startup Methodology:
Launch now (obvi):
- With high uncertainty about problem and solution you need to LEARN, and market feedback is an excellent professor.
- A radically new product must be observed in use in order to refine it
- Stealth not needed. ”I dare you to try to get a big company to steal your idea.” -Eric Ries
Hell no:
- Disruption of mission critical activity (e.g. Dropbox vs IMVU)
- Early adopters’ needs don’t match mainstream’s needs
- Reputational risk, especially with viral consumer products or highly concentrated market
My friend robgo has an amazing post about entrepreneurial advice to students. I know he’s honest because it wasn’t too long ago I was going to Rob for advice on startups and venture. This topic really hits home for me because I’ve been a student launching a finance firm, a student at TechStars at a tech firm, and a student trying to engage the VC community on both coasts. Rob really hit it on the head:
1. Get out there.
2. Use all the resources.
3. Take a risk.
4. Build something. No build anything.
5. Be authentic. #5 is most important in my book, although so hard - You can many learn new things about yourself from doing #1-4.
I was inspired to write this post after speaking with a group of students at Northeastern this past week. What was most impressive was that this group of ~20 aspiring entrepreneurs actually came out and engaged in a great dialog while most of their peers were engaging in St. Patrick’s Day…
Great visualization of when and how valley VC invested in some of the leading consumer web services.
