Category: Startups

Transactional Angst

~ michael_msft ~ Leave a comment

I think nary a week goes by where someone doesn’t ask me how VC is going and when am I going back. I guess back means to return to building something, joining a company or working on a product.

It’s normally something that requires a longer answer but usually I say ask me in 10 years. That’s cause it will probably take me that long to see if I am any good at this VC thing. 

That being said I think people ask this due to the very nature of VC being somewhat transactional and maybe building something is more of a co-op approach since there are teams involved all working together to ship. It is a sentiment I think about a lot.

Saw this tweet the other day and was thinking about it even more:

https://twitter.com/joshelman/status/1109497183445803008

However I always consider that there may be a better way but I am not saying I discovered it but highlighting that each and every craftsman in the world can approach their craft with a new frame of mind. With VC I think about what that means often. 

Let me run down a few areas I think as a VC I can be more like the product person still living inside me:

  • Be open and transparent. Of course not everyone reacts well to this but I find a certain amount of it works
  • Be humble 
  • Be helpful
  • Have empathy for the founder and the other people/organizations in the mix
  • Try to write often enough so people can see what’s on my mind and how I feel about something
  • Continue to focus on doing the right thing – it may not payoff immediately but I believe it will win in the end
  • Learn to listen more – speak less. I am terrible at this but I am very conscious of improving it. That’s a start right? 😉
  • Foster an ecosystem since everyone will benefit (https://alpha.seedplus.com)
  • Be company friendly. This is a long one to explain but I think the right folks now what I mean

I don’t intend to go back as some people call it since I think I moved forward while still getting better at my craft. I see my craft as helping build great companies by being their investor and whatever else they need me to be while I am in that role. 

Pretty sure that is similar to what I did as a product person but I am not an employee or a founder.

However the North Star feels similar to me.

Your mileage may vary.

Walmart International spent $16 billion to go big in India. CEO Judith McKenna has to make it work – CNN

~ michael_msft ~ Leave a comment

Walmart International spent $16 billion to go big in India. CEO Judith McKenna has to make it work – CNN

Was talking to a friend about India and VC – one thing we all agree on is that the monster exit of Flipkart has done wonders for the scene. Lots of people made money and it is going to new firms and new startups which helps to compete with the old guard. More foreign funds will pay attention now knowing exits can and will happen.

However – making investors, founders and employees rich has nothing to do with Walmart turning Flipkart into a money machine.

On this part -I think they will struggle long-term against Amazon.

Get the popcorn.

(My take) Grab vs. Go-Jek: Inside Asia’s Battle of the ‘Super Apps’ | Fortune

~ michael_msft ~ Leave a comment

Grab vs. Go-Jek: Inside Asia’s Battle of the ‘Super Apps’ | Fortune

Much to talk about with this subject. I don’t know where to begin. Let me first state that what’s happening in the SEAsian ecosystem is amazing and of course these 2 players are a massive part of that. I won’t knock that but I also still feel inclined to talk about how I feel about it or how my product head reacts to it.

First off:

With a 2017 GDP of $2.8 trillion, Southeast Asia, were it a single country, would be the world’s seventh largest economy; at its current growth rate, it would rank No. 4 by 2030. But for investors, market size is only part of the appeal. Super-apps promise a new mode of connecting with customers and an opportunity to amass a vast data trove about their preferences and purchasing behavior. It’s a model pioneered in China by Alibaba’s Alipay and Tencent’s WeChat; Mark Zuckerberg, in a recent blog post, hinted that he hopes Facebook can emulate it. Many believe revenue from super-app services and the data they generate will prove to be more stable, more profitable, and easier to scale than revenues from ride-hailing—where profits have been elusive even as growth skyrockets.

I am incredibly lucky to be doing what I am doing at a time like this. SEAsia has many more laps to go for the “race”. Most of the big companies will tell you that the bulk of the business right now is in the tier 1 and 2 cities and heavily slanted to tier 1. Imagine how big some of these businesses are when tier 2 and beyond start to kick in – and eventually they will.

The other thing to take note of is that for Google and Facebook, SEAsian revenue is already massive but yet ARPU is some 25% of what they see elsewhere which means the revenue will only get bigger. Couple ARPU growth with more users out of tier 2 cities and beyond and basically you haven’t seen the how big it will go.

Let’s discuss G and G more. First off I challenge the premise of the super-app. I am quite vocal in my view on this, super-apps work in China because of China. The density, the lock-in by the Chinese giants and the government aiding the growth of the Chinese giants has to be taken into account. None of of those traits are in SEAsia apart from the density but even the density is not quite the same. To constantly keep thinking that the super-app is what users want will eventually backfire on them since the rest of the traits are not here – users have choice.

I for one pretty much hate the super app concept. I am so sick of the steps I need to take to book a ride for example with Grab. I have to play wack-a-popup with promos and getting through stuff I don’t want or need to simply book a ride. Due to this I use Comfort and Gojek more. That’s Grab’s fault though – they could provide me with a better experience. They could simply let me set a preference that instructs the app to default to the ride screen for example. I know they won’t but they could. What’s interesting is with Gojek offering rides only in Singapore, then I only deal with that UX. I love it but my guess is Gojek will eventually ruin this for me in Singapore as well. 

I had a conversation once over Twitter with a VC from the USA who is funding Grab and I realised he has no sense of what I am talking about since he has never really used the app. They simply apply the China lens around super-apps to SEAsia and assume it will work. It may, I don’t know yet but I think unbundled apps are much better for users. This is actually where I would like to add that neither of these companies is answering the siren call of user needs, they are just shoving down our throats the UX we think we all want. I tend to vote with my behaviours. I don’t use anything from Grab but rides.

The other day I was in the situation of needing to use GrabPay to pay for lunch and when I clicked on it I was sent through some verification loop and was never able to add any money to my wallet. Keep in mind my wallet worked before and I had a credit card attached to it – seems all that was gone and I was starting over. Just silly. Why would I even bother – since NETS and ApplePay work well and once setup I never even think about them. These apps continually test user patience with experimentation, bad UX and constantly forcing users to start over. It is ridiculous.

I used cash BTW – it sill works for now.

I have problems with Gojek as well but of a different nature. First off the tech is just way behind Grab’s. This has gotten more apparent as I use both in Singapore. The other day I booked a Gojek ride and noticed the car driving away from me and getting farther away. I tried to message, a pain cause there is no in-app chat – but the driver did not reply. Then the car stopped and wasn’t even moving. I called the driver and he said he was picking up Jan or something at an apartment. Essentially the app was matching me to a car that wasn’t picking me up. The driver was annoyed, I was annoyed and then I had to cancel and start over – with Comfort. 

There is a litany of tech issues – no expense management, no ability to use credit cards across other regions and the app just feeling slow. It sucks – I had high hopes but I think if this is a race then Grab is winning for sure. That’s obvious.

My biggest gripe with Grab though is their origin. They started as a taxi company which is fine but it is what they inherited with that origin story. Taxi companies are notorious for terrible customer service – probably to riders and drivers alike. I only know the customer vantage point which is one with normally bad customer service and I have numerous experiences myself. No point in going into it since it is what it is. 

I think the larger question though is ride hailing profitable? My guess is that it is not which is why these two players are going into everything and calling it a super-app. Only time will tell since autonomous vehicles, government run transport and the remaking of cities will radically alter the ride hailing playbooks. As the companies look to other products they will either be able to use ride hailing to entice users into their other products or they will need to unbundle and compete with other, better products. Again, it is too early to tell and investors are pouring money into G & G hoping that the super-app is the model with one of these guys owning the region.

I am not so sure it will work.

More on the know how VC works…

~ michael_msft ~ Leave a comment

Well – clearly this is the most incendiary post I have written in a while.

https://seedvc.blog/2019/03/02/know-how-vc-works-before-asking-for-money/

The traffic is reminiscent of when I would write my Yahoo flame posts. Or should I say my thoughts about Yahoo management posts.

I was wondering if I took too hard a line given some of the tweets like this:

If people really think that we should just let founders think it’s a charity business – well I rest my case then.

I was heartened to know that my favourite Singapore super angel, Shao Ning, told me that she agreed and couldn’t understand when founders press her and husband just to give them money cause they want it versus having a great business to invest in.

She may have couched it better than me but it goes back to my case – we are looking for great investments, not just places to park money cause it looks like we are doing our job or something.

Anyways.

Let me see who else I can stir up with my next post. 😉

How to Stop Your Board Meeting from Going Down a Rat Hole (The list is awesome)

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How to Stop Your Board Meeting from Going Down a Rat Hole

I think this is one of the best in the series – I love the “characters”.

  1. “The detail merchant” — Some people are just wired to want to ask 55 questions and understand every last detail. They don’t have a strong sense of “aperture” of their responsibilities. If they thought about it they’d realize that asking 55 questions is wasting the time of every board member and they probably don’t mean to do it — it’s just in their nature. A great way to deal with the “detail merchant” is to say, “these are great questions, how about if I put in a pin in it and you and I huddle up post meeting and I can walk you through it details. These are great questions. I’m just concerned we may not get through the agenda.” Most good natured people get the super polite hint — especially if you have a reputation for actually following up.
  2. “The negative nelly” — These are people who can’t help but find fault with anything you present. You might have 5 really positive signs but his or her mind is wired to find the one thing that didn’t go well. If that thing is truly more important than others — fair enough. But if it’s just catching you out for the sake of it to make the negative nelly feel good — it’s your job as CEO to stop it.
  3. “The distracted, senior person” — We’ve all been on boards with super senior investors or executives from companies who don’t read the materials in advance or are on their phones so they miss the tenor of the conversation. They ask 101 questions that were in the deck or they ask about topics you’ve already covered. Listen, it happens. As a fellow board member I try not to get too upset. But what drives me bonkers is when the CEO caters to this bad behavior by spending valuable time going through information that was already available. It is disrespectful of the time of the people who did do the pre-read and pre-call. If somebody isn’t paying a attention I would probably re-answer the question in the first instance to be polite. If it persists I would revert back to, “we covered that point a bit earlier. If it’s ok with you I’d really love to move on but I’m making a note to come back to it at the end of the meeting and make sure you get that answered.” (and actually write it down so they see it)
  4. The ADD Director — This is near and dear to me because this is, well, me! I can’t help it. I sometimes get distracted by what you’re talking about and really want to ask you a question about something not on the agenda. I don’t mean to do it and if I get a gentle brush back I will gladly say, “oh, yeah, you’re right. I’m sorry. Let’s cover that later.” The problem with the ADD Director is that we literally can’t stop ourselves from asking whatever we want. The definition of somebody with ADD is somebody who has “impulse control” issues. Save us from ourselves. Politely answer any one line questions but don’t let us take you off track.
  5. The Ally — This is what you need the most. You need an ally. You need a non-executive board member who is your point person to help keep the meeting on track. This is the person who will step up when you can’t. Have a code word so they know when to help. This is the person who says, “Steve. Your questions are great and I have some similar questions, too. I see Mary trying to stay on agenda and I think this is the agenda we all agreed. Would you mind if we just note that topic and try to come back to it at the end of the meeting? I’m really sorry but I just don’t have time to overrun and I’m worried this is taking us off track.” I’m this guy. I do it without being asked. My ADD is prewired to be super annoyed when meetings waste my time. I start mentally struggling to pay attention because I become distracted by the fact that we’re talking about something completely non-strategic and off agenda. Obviously if it’s a great question and a worth debate and needs to be covered — I’m in. But mostly it’s just somebody’s pet interest to talk and talk and TALK about and it’s off topic. A good CEO finds allies and gets help keeping meetings from going down rat holes.