AGILEVC My idle thoughts on tech startups

June 17, 2015

playtimeI’ve observed what may be an emerging trend, at least in some startups, that I find somewhat unsettling.  It has an impact at an individual level, a company level, and an ecosystem level.  This is not an easy topic to discuss without coming off like a jerk or a crusty old dude, so I wanted to share two quick stories about my own career below.  But I think it’s important to discuss, particularly given today’s heady environment for startups.

My first startup job was as an early employee at PayPal, where I took a job at the end of ‘1999 and started a few months later in 2000.  When I first started working there, I only made it home for dinner with my cohabiting girlfriend (now wife) probably 3-5 times a month.  I worked, usually at the office not remotely, at least part of every weekend for the first year or so.

I started off as a product manager and while I never actually slept over at the office, there were frequently late nights.  One of my fellow PMs did sleep  routinely under his desk in a sleeping bag he kept there for that purpose.  On multiple occasions I’d get in to the office in the morning and find our CEO (Elon Musk at the time) asleep on the couch in our little product team lounge from the night before.  The company held holiday parties at the end of each year and lots of friendships were spawned from work collaborations.  But the first real time we had a big celebration and folks felt like we’d “made it” was the party we held in the parking lot on February 14, 2002 when PayPal went public.  We were a profitable company at that point with nearly $200M annualized revenue, one of the first tech companies to IPO after the dot-com bubble.

When we started LinkedIn, it was a similar situation.  As a founding team we were a reasonably experienced and close-knit group already.  Nearly all of us had worked with Reid Hoffman at either PayPal or SocialNet before so there was zero concept of “face time” or having to establish trust or work ethic with one another.  We started working nights and weekends in late 2002 when some of the founding team were wrapping up their prior day jobs and then everybody was full time on LinkedIn by January 2003.  Yet absent a family obligation or something similar, nobody left until 7, 8, 9pm, or later even though we were too cheap to provide dinner for employees back then in the early days.

My point and the trend I’ve noticed and felt we should start discussing more publicly:  I fear a meaningful number of people are “playing startup” today.

Paul Graham used this phrase in an essay, albeit making a slightly different point.  What I mean is that people are joining startups because working in a startup seems cool or lucrative, not because they want to change the world and they’re fundamentally committed to putting in all the blood, sweat, and tears that entails.  We’re hearing more about people new to startups asking their seed stage company how many months of severance is included in their package.  We see co-working spaces where the ratio of work to non-work (ping pong, beer, startup talks, etc) is pretty low, while elsewhere founders enamored with the lifestyle or perception of being an entrepreneur, believing they’ve made it once their company raises a Series B.  Entire startups exude a rah-rah environment during the all hands, and then at 5:15pm the office is a ghost town (even though everybody rolled in after 10am).

FWIW I do firmly believe that everyone deserves and should work towards finding work + life harmony as Brad Feld has described it.  The reality is a startup career path entails a variety of sacrifices, but I don’t believe it should preclude a rich family life, involvement in one’s community, or otherwise seeking a well-rounded human existence.  And even when working hard, there should always be moments of fun and close relationships that are formed from working in startups.  Back in the early PayPal days Jeremy Stoppelman and I used to go hit golf balls during lunchtime at the Palo Alto muni driving range across the street from our office on Embarcadero Rd, which was a nice break in a long day and helped form a long-lasting friendship.

Additionally, a lot of people today work in startups or want to work in startups or want to be founders, which overall is a great thing.  A lot more companies get started today than 10 or 20 years ago, which overall is a great thing.  And a lot of big, meaningful companies have been created just in the last couple years which is nearly unprecedented.

But I’ve witnessed more and more “playing startup” in recent months.  And to be clear I split my time between Boston, New York, and SF and I’ve seen this across a broad swath of startups and individuals… both outside NextView’s portfolio and occasionally within it.

So why should I or we collectively care?  Because while lots of startups will fail in spite of the hard work and zealous commitment of the whole team, pretty much none succeed without it.

I’d like to think that I worked hard, but I was probably in the middle of the distribution of my colleagues at both PayPal and LinkedIn in terms of work ethic… neither the slacker nor the hardest worker.  More important than simply hours worked though, I perceived a zeal in my colleagues that translated into an overwhelming commitment in each of them to do whatever they could to incrementally drive our company closer to success.  It motivated me to do the same.  In addition we all realized that failure is always an option, success is hard won, and recognized the difference between progress towards a goal and achievement of that goal.  So we acted accordingly.

I don’t always see that today unfortunately.  At times I see of sense of entitlement when perhaps it’s not merited.  I see a lack of commitment and hard work, especially when the work isn’t fun but is still of critical importance.   I see people taking their eye off the ball when it’s still in midair or worse, not having a clue which of the juggling balls actually matter.

To be clear I don’t want to paint all employees, founders, and startups with a broad brush.  I still think most of the startup ecosystem has a healthy attitude, focus, and commitment to the unique challenges of throwing yourself off a cliff and assembling an airplane on the way down (as Reid describes the startup experience).  A few months back I saw a founder/CEO with nearly all of his ~100 person SaaS company hard at work, closing their final deal of 2014 at 11:00pm New Years Eve.  Last fall I saw a startup with it’s back against the wall, days from shutting down, pull off a new financing round and what looks to be a promising pivot.  And just the other weekend I bumped into a founder hard at work on a Sunday afternoon when I stopped by my office building.  I still see lots of things which give me reassurance even as I see some things that give me serious concern.

Perhaps it’s just a symptom of where we are in the cycle.  But there’s still a lot of “playing startup” going on.  I commit myself to help however I can to foster and support the true commitment of entrepreneurship in my small corner of the startup world.  But let’s start the dialogue of what we do from here.

May 6, 2015

walkaboutSome VCs describe themselves as “thematic” or “thesis-driven” investors.  These folks typically hone in on an industry sector or type of company, immerse themselves in the subject, meet as many similar companies as possible, and then invest in some.

Other VCs can be described as “opportunistic” which sounds like they have no particular strategy or rely on random chance, which isn’t really the case.  The reality is that there’s countless really smart founders out there thinking about a particular market opportunity 110% of their time.  So “opportunistically” being open minded about all the great teams of co-founders and broad range great market opportunities makes some sense.

There are great VCs of both stripes and in practice most fall somewhere along a continuum where purely opportunistic and purely thematic are at opposite ends.  I certainly am somewhere in the middle.  There are times when I’m focused more intently on a thesis but I always have my antenna up for great founders working in areas that I haven’t been thinking about as much.

I’ve been exploring a new theme recently… I’ll talk more about it publicly as my thinking evolves further. But I was trying to relate what this exploration has been like to someone this morning.  The best way I could describe it was as a “walkabout”.  This market opportunity isn’t entirely new to me, but it’s not a core area of expertise either.  So I’ve been educating myself about this market as much as possible, I’ve been meeting as many smart folks as I can in this space, and I’ve been trying to systematically map out where there’s room for disruption and where there isn’t.

So the best description was that I’ve embarked on a “walkabout” in this market space.  The end result might be nothing, it might be that I lead investments in one or more new startups in this area, and there’s even a chance we might look to incubate a company to go tackle this.  My journey is already underway and I’m excited…

February 19, 2015



Today Konekt announced their $1.3M seed round.  We were pleased to lead this round along with a great group of other co-investors.  And I’m excited to collaborate with co-founders Ben Forgan and Patrick Wilbur as they build their IoT connectivity platform.

Konekt is creating a turnkey platform for makers of internet connected devices to integrate cellular connectivity.  While some devices in the IoT world will utilize short-range connectivity options like WiFi or Bluetooth tethering, a great many will need the flexibility and ease of deployment that connecting directly to cellular data networks can provide.  This need is doubly true when you consider dramatic growth of both the number of devices and breadth of applications for IoT.

As it turns out, whether your building and deploying 100 devices or 100,000, getting your device to connect via wireless data networks isn’t so simple.  You first have to figure out which hardware module to integrate into your device to get a cellular radio in it.  Then you have to strike a deal with a wireless carrier or MVNO to provide service.  Finally you typically use antiquated protocols to try to provision each device and actually get the data back from it in an intelligent fashion.  It’s all doable… just hard, full of friction, and particularly challenging for small and medium sized device makers.

Konekt takes care of the full “stack” for you from the hardware modules to connectivity with major carriers to a simple to use REST API to manage all your devices and pipe the data back into your core application(s).  It was possible 5+ years ago to integrate payments into your software app… it was just a pain in the ass to connect to a gateway, get approved for a credit card merchant account, figure out PCI compliance, etc.  Then Stripe built a big business eliminating much of that friction.  We believe Konekt has the potential to similarly take friction out of IoT connectivity, in cellular data today and potentially other emerging data networks of the future.

The IoT space has been of interest to us for some time.  We’ve invested in some companies making an internet connected device, but I had been looking in particular for what we call “picks and shovels” businesses riding on the platform wave of IoT.  Just as Levi Strauss realized he could build a great business as the enabler of gold prospectors, we want to be investing both in companies creating devices and those enabling other IoT companies.  So we were pleased to meet Ben and Patrick last fall and are very excited about the future of Konekt.

February 10, 2015

As the holiday season is behind us and 2015 is firmly underway, we wanted to take a moment to both announce and celebrate the collection of top entrepreneurs who have agreed to return as our Entrepreneur Advisors. These individuals have all graciously agreed​ to continue their prior commitments to NextView-backed startups and entrepreneurs.

We’re excited and feel incredibly lucky to have them back on board:

  • Niraj Shah & Steve Conine – Co-founders of Wayfair
  • David Cancel – Co-founder/CEO of Driftt (Co-founder/CEO of Performable at the time he first joined our group of advisors, after which he became HubSpot’s Chief Product Officer following and acquisition of Performable.)
  • Mike Baker – Co-Founder/CEO of DataXu
  • Brian Shin – Founder/CEO of Visible Measures
  • Stephano Kim – SVP & Chief Data Strategist of Turner (President of [x+1] at the time he first joined our group of advisors)


​The Purpose of Entrepreneur Advisors​

We frequently tell entrepreneurs that advisors who are just names on a page are kind of a waste of time. We believe the same is true for us here at NextView, which is why we think it’s important to take a second and explain what NextView’s own “Entrepreneur Advisors” do.

When Rob, David, and I started NextView nearly five years ago we thought it was important to enlist a small group of talented entrepreneurs as we built and helped our portfolio over time. These were all folks we’d known for a number of years, and people we respected deeply. Their expertise is focused across the range of software ​and​ internet sectors that we focus on here at NextView​ –​ from SaaS to e-commerce, ad-tech to mobile.

At their core all of ​the folks ​listed above ​are builders​ — the​y​ have all founded and run exceptional software and internet companies, in some cases multiple times. But we also believe in the ​”​keiretsu​”​ principle here at NextView. In parallel with their entrepreneur advisor role​s​ with us, many of these individuals are also active angel investors themselves independent of NextView​,​ or​ else they​ have relationships with other companies or investment groups. ​Thus, we can all work in concert within the broader startup ecosystem.

So if they’re not just names on a page, how are these entrepreneur advisors involved with us at NextView and our portfolio companies? Practically speaking they help us in three ways:

  1. New Investment Opportunities – These advisors sometimes introduce us to new entrepreneurs and new companies we might invest in​.​
  2. Insight During Our Due Diligence – We frequently touch base with these people when we are looking at a potential new investment where the advisor has unique insight. In some cases​,​ the advisors’ companies form business relationships with startups NextView is ​vetting​.
  3. Advice Post​-​Investment – All of these individuals are busy people with limited bandwidth, but they​’re generous enough to periodically ​provid​e​​ advice and mentorship to founders in the NextView portfolio.

We’re pleased that as NextView has grown, all of these original entrepreneur advisors have extended their relationship with us.

But ​… ​we plan to expand this group slightly with a handful of other high quality folks​ which we’re equally as excited to introduce publicly​. So keep an eye out in the coming weeks and months when we’ll talk more about these additions.​

January 21, 2015

keep-calm-cause-we-killing-it-Note: This post also published at NextView’s blog for seed stage companies The View From Seed.

The startup ecosystem is often full of hyperbole, which is perfectly understandable when you think about it.  A population of founders, employees, investors, advisors, and others all aligned in trying to build large disruptive businesses is naturally prone to lofty, even over-the-top language.

But the reality of tech entrepreneurship is that not everyone is “killing it,” and certainly not all of the time.

Not every startup is going to “crush” their original milestones and financial projections.

Not every round of funding is closed at a “monster” valuation.

And even acquisitions painted as successes may look very different below the (typically confidential) surface.

This has very real consequences that founders should consider — both for their relationships with investors and for the success of their current and future ventures (and therefore the many people likely tied to these ventures).

The Power of Perception 

I saw this firsthand with my own experience as an early PayPal employee.  PayPal ultimately became a very successful company.  We went public in 2002 and eBay bought the company later that year for over $1.5 billion. Today, PayPal is poised to become a very large standalone company again.

But during the year 2000, we went through three different CEOs, fraud nearly killed the company, our revenue was negligible and unproven, and at our worst point, the company was burning well over $10 million a month — A MONTH!

As a VC investor, I’ve seen numerous other companies face challenges too — both in businesses that were ultimately successful and those that ultimately failed.

Our industry is so enmeshed in TechCrunch headlines, the Twitterverse, and offline chatter at networking events that it’s easy to believe that everyone else is killing it.  This is the vernacular of today’s startup ecosystem, for better or worse.

But here’s the very troubling byproduct of this: I’ve met plenty of entrepreneurs who, surrounded by this hype, find it hard to manage when their own startup hits challenges, which are inevitable in any startup (even successful ones like PayPal). If you perceive everyone to be “killing it,” then it’s nearly impossible to speak up as the “only” person that isn’t.

How can we put things into context?  And when and how should founders communicate challenges with their employees, investors, or other stakeholders?

Since this hyperbolic culture can and does prevent founders from seeking help — despite all founders needing it at some point or another — these questions are actually worth answering today.

It seems simple, but the first step is being honest with yourself as a founder, and being honest with your co-founders.  Don’t shrug off poor sales or user growth, a dysfunctional team, a wave of bad PR, or other challenges confronting the business.  If you’re in denial, it’s hard to overcome any challenge.

Then, it’s time to speak up and work past your challenges.

Communicating with Your Team

While there’s no precise formula for when and how to share challenges with your employees, given how varied each situation can be, I’d recommend the following guidelines to do so:

1. Do No Harm

Unfortunately, some startup CEOs convey perpetual crisis mode to their team.  Every small issue is portrayed as a firestorm, real or not, and the steady stream of scary news can easily distract employees from both their day to day execution and the company’s long term goals.  Know the difference between being honest with your team versus sowing unnecessary panic.

2. Frame the Solution and Involve Your Team

In addition to being candid about the challenges facing the company, talk with your employees about what the possible solutions may be and how they’re likely to be involved.

3. Don’t Blindside Them

As a startup exec or employee, one of the toughest things to experience is for your CEO to share bad news in a way that blindsides you.  Folks can feel taken by surprise when they suddenly hear about things that they never expected or (more commonly) that a CEO let fester for a long time in secret.  Odds are good that at least some folks on your team already know or suspect when challenges hit the company, so hiding stuff is usually counterproductive.

Communicating with Investors

Some of the same principles apply when sharing difficulties with investors, but the nature of the relationship is obviously different.

A few guidelines that might help when communicating challenges to your board and investors:

1. Be Direct

I find both the challenge at hand and the long term relationship work best when CEOs communicate challenges directly and promptly with their investors.  Most good VCs will seek to help and advise where possible, and founders who put off sharing bad news or beat around the bush only frustrate others and reduce the amount of time they can work together towards a positive solution.

2. Communicate Challenges 1-on-1

Difficulties are easier to communicate privately with your board members or key investors.  The topic may be revisited later in group settings like a board meeting, but breaking bad news should almost always be done 1-on-1 where possible.  This helps mitigate the risk of groupthink or “pile-on-the-CEO” discussion … which benefits no one.

3. Be Decisive About the Way Forward

If you have thoughtful investors in your company, hopefully they’ll provide useful feedback about how to deal with a difficult situation.  And it’s okay if you as the CEO don’t have all the answers when confronting a challenge.  But you have to be prepared to map out the options of how to move the company forward, and it behooves you to have a strong recommendation and rationale for your plan.

It’s Never Easy — It’s Even Harder When Avoiding It

Facing difficulties and sharing bad news is never fun.  But the reality is that not every startup is killing it, and even the ones that seem to be growing quickly aren’t actually succeeding all of the time in everything they do.

Successes may define us to others more than failures, but great entrepreneurs distinguish themselves by how they handle those situations when the chips are down.

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  • I'm a former Silicon Valley entrepreneur turned East Coast VC. I co-founded NextView Ventures, a seed-stage VC firm based in Boston, in 2010. Read More »



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  • Lee Hower
     - 1 day ago
    @epaley in June 223K new jobs, but 432K people dropped out of labor force… participation fell to lowest in nearly 40 yrs
  • Lee Hower
     - 1 day ago
    @epaley doesn't make sense when lower unemp % being driven mostly by ppl dropping out of labor force, not getting new jobs
  • Lee Hower
     - 1 day ago
    @epaley but some have suggested US is moving to a lower equilibrium for full employment, e.g. "normal" unemp % is now lower than historical
  • Lee Hower
     - 1 day ago
    @epaley yes net job creation is obviously good… monthly avg in 2015 slower than 2014, but still a bit over 200k/mo thus far thru 1H
  • Lee Hower
     - 1 day ago
    @shaig most fintech focus on pymts & lending, I'd also try to include speakers that can touch on insurance too (will think on suggestions)