Five Questions With Jeff Berman (Public Defender Turned Kardashian App Builder)

I met Jeff Berman during my YouTube years. He was an exec at MySpace and we were probably talking about a host of different partnership-type ideas that I don’t believe went very far. Fortunate for me, the collaboration of our friendship has been more enduring. Jeff is huge brain, huge heart, huge presence. Involved across a variety of commercial and non-profit efforts, he’s quick to volunteer his help and always lives up to his words. It gives me great pleasure to introduce you to him as well via Five Questions.

Hunter Walk: You’ve got a perfect “dinner party” background – begins as a public defender, then Counsel to Senator Chuck Schumer. Transitions to social media with MySpace at their peak, and then, um, the less peak part. Then working with capital T talent at the NFL and helping the Kardashians create their digital empire. If someone just looked at your resume, what narrative do you think it tells?

Jeff Berman: Well it certainly seems random. And it definitely wasn’t planned. The reality is I made the leap from law, politics, and policy to the intersection of media, tech, and commerce because I fell in love and moved to LA to be with my wife. That required a hard reboot of my career. Over time, I realized one of the core skills I’ve learned across these industries is how to build teams capable of attacking problems that don’t have obvious solutions. I’ve also learned that I’m best when I have 14 plates spinning and 18 balls in the air at once. So I’m drawn to opportunities full of those challenges.

HW: Having been at MySpace 2006-2009 do you have empathy today for what Facebook, Twitter and YouTube are trying to solve (safety and abuse, manipulation)? Do you think regulation should play more of a role in guiding their forward plans?

JB: There’s a degree to which I have empathy and a degree to which I’m exasperated.

There’s a lot of grey in this. You have unwitting bad actors who should not be banned from platforms because of the honest mistakes they make or because they adhere to fringe ideologies which, while often odious, have a legitimate place in the public square. It is exceedingly difficult to establish clear policies to deal with that grey. So there’s empathy.

You also have a set of repeat bad actors where the only logical conclusion is that they intend to spread disinformation — where it’s patently obvious their mission is to sow hatred, fear, and division. Those parties are actively attempting to subvert our democracy and the platforms aren’t doing nearly enough to stop them. So there’s exasperation.

More broadly, this speaks to these corporations re-evaluating where stakeholders sit relative to shareholders. Reid Hoffman is among those who have argued that at a certain point in a company’s lifecycle, society becomes a key stakeholder. The major platforms are undoubtedly at that stage and their missions, values, policies, staffing, and investments need to reflect that. They have a long long way to go.

This only gets fixed when it’s properly prioritized by the CEO. Even then, it cannot be solved by algorithm alone.

You need clearly articulated policies and human beings exercising actual judgment in the process. You cannot be paralyzed by fear that your judgment may be criticized. It will be. And sometimes legitimately because your judgment will be imperfect. But it will be a heck of a lot better than it is today.

On the regulation front, there’s good and there’s bad. When I went to MySpace, Chris DeWolfe, our co-founder and CEO, made safety a company-wide priority and we owned up to what we were doing poorly. Then we proactively worked with Congress, state legislatures, state attorneys general, public interest organizations, and others to develop internal policies, promulgate best practices, and partner to craft regulation that would help protect customers without strangling business. That’s the best scenario.

Unfortunately, there come times when an industry is being irresponsible and facilitating such harm that government has to step in and act. Regulation can have major unintended negative consequences so it’s generally best when government can work with industry and public interest groups to craft solutions everyone buys into. I’m a born optimist and my hope is that as governments move to regulate the platforms, everyone will get onboard to craft the best solutions.

I’m also a realist and, like it or not, regulation is coming.

If industry won’t participate collaboratively and constructively and if we keep heading in this direction, that regulation is increasingly likely to be draconian.

HW: Whalerock, where you were President, is one of those stories where millions and millions of consumers have touched your products – such as the Kardashian apps – but probably never heard of the company itself. What did you do over there and how did it influence your understanding of what “influencer” means today?

JB: I’ve been incredibly fortunate to see how brands are built in a number of different contexts — politics, music, sports, celebrity, and even law. There are those who say that brand is dead in the age of Amazon. I would argue that reports of brand death are greatly exaggerated.

Identity is a core element of humanity and how we align with (or against) brands speaks to who we are. The music we listen to, the shows we watch, the teams we root for, the clothes we wear, the campaign bumper stickers on our cars, even the food we eat — these are all examples of how brands help us express identity. This is especially the case in the era of ubiquitous photo taking and social media.

The paradox of the current era is that it’s never been easier to build a brand (because the traditional gatekeepers have been swamped by the Internet) while it’s never been harder to build a brand (because it’s never been more crowded). At Whalerock, we were working with creative talent (you can call them influencers) who could organically break through the noise while working to build businesses that leveraged both the traditional and new worlds of media and commerce.

HW: Now you’re on to Magnet – I know you want to keep this answer high level (we’ll do a follow-up once the covers get pulled off), but what is it and why are the three of you working on it together?

JB: The next generation of great brands and businesses will be built on three pillars: content (watch, read, listen), community (engage, share, identify), and commerce (buy). My partners and I have all worked with transformational creative talent to do versions of this before and we came together with a very smart, very patient financing partner who agreed that the best way to do this in the 2020s will be a hybrid of venture and private equity. So we are set up to buy, invest in, and start businesses that will pull all this together. That’s about all we’ll say for now. More to come.

HW: You’re active in progressive politics – do you think the Democrats 2020 race will be about a person or a platform? That is, will the party’s platform ultimately be decided by whichever candidate catches momentum, or will the question of “centrist” vs “leftist” be answered first, and then a candidate selected from that ideological group?

JB: Modern politics really started in 1960 when television came into the mix. Since then, almost without fail, we have elected the president we more prefer in our living rooms. Social media only makes that relationship feel more intimate — for this new era, we are now more prone to elect the president we want two feet from our faces. We want an authentic and passionate communicator who says things that make us feel something real.

There’s a policy baseline, of course. But ultimately, it’s far less likely to be about which version of expanded health care she/he supports; it’s far more likely to be about whether we feel the candidate is genuinely committed to — and can communicate why we must have — high-quality, affordable, widely accessible health care.

At the beginning, middle, and end of the day, it’s about nominating someone who captures the energy of the moment not just to turn the page, but to start a whole new book. It cannot happen soon enough.

Thanks Jeff! To get posts from this blog emailed to your inbox, just sign up here.

Five Questions With Adam Davidson (New Yorker Journalist, Planet Money Cofounder & Generally Smart Person)

In the design of social apps, we’ll sometimes talk about how there’s a Friend Graph and an Interest Graph, and they don’t always mix. Well for my personal Venn diagram of those two, Adam Davidson sits squarely in the the overlap. We first got connected via a mutual friend around the cause of independently funded journalism, but found the topics of mutual joy (and distress) to be even broader. This is a longer Five Questions but I think an absolutely spectacular one and I hope you enjoy it.

Hunter Walk: You were one of the first reporters to focus on Trump’s money trail instead of his tweets, in both longform New Yorker articles and your Swamp Chronicles series. Are you still convinced that his downfall will be tied to these issues versus other accusations?

Adam Davidson: Donald Trump has spent the vast majority of his life–even the vast majority of the time he was running for president–doing business, not politics. His clear overriding ambition throughout his life has been to be celebrated as a rich person. Power and politics have never been a major focus of his. So, it seems to me, the money-trail is a great place to look to find out what is driving him and what he has done.

As it happens, the Trump money trail is fascinating. He ran a business that has long been famously riding the edge of legality, working with people that few other business folks would work with on deals that bear many of the hallmarks of financial crime, such as money laundering, foreign corrupt practices, and tax evasion.

So, yes, I think it all comes down to money. I think Trump is driven by money or, more precisely, driven by the desire to be perceived as someone who has money. I think Trump has shown himself quite willing to take enormously risky moves when he thinks he can get money. I think that his greatest legal liability–by far–is in his business deals. I feel confident that money was his motivation in running for President and in doing whatever it is he did with Russia.

I feel confident that money was his [Trump] motivation in running for President and in doing whatever it is he did with Russia.

If I were on Mueller’s team or if I were working for one of the many other federal, state, and local prosecutors looking in to Trump, I would spend around ninety-nine per cent of my time following the money. Which is, roughly, how I do spend my time.

I also imagine that Trump would choose impeachment and removal from office over losing money or being revealed to have far less money than he claims. If he were impeached, he could spin it to his base as proof positive that he’s their hero. But if he loses his money or is revealed not to have much, he will be laid bear in a way I imagine would be truly unbearable to him.

It would take many, many years for any prosecutor to actually get his money. That’s hard to do, even in non-political prosecutions. But the threat must feel terrifying, I would guess.

HW: I’m mostly an optimist, but sometimes when reading your Trump coverage, I think “yeah, that’s all true but the average person just thinks this is how all rich people act” and/or “this is just evidence of how the system is rigged in general.” So the greater risk beyond just Trump is severe mistrust in institutions – perhaps deservedly! Adam, respond to this question with something encouraging!

AD: Overall, I think it is important to see the Trump era as a net-negative. America is worse than it was before and, probably, worse in a semi-permanent way. Trump has revealed deep structural problems and has created to a path that a more careful politician can take advantage of. We are far more like a corrupt developing country than we had realized. And the shameful behavior of the GOP suggests that our assumptions of political party self-preservation were wrong (it feels a bit like the mistaken assumption that big banks, or the people who work for them, wouldn’t take company- and economy- destroying risks for short term profit).

So, I am deeply, deeply upset. But I am, somehow, also optimistic. Genuinely! And not just when forced to be in a Q and A. There is a good (though far from great) story to be told about the global fight against white collar crime, money laundering, and other financial bad behavior. Much of what Trump has done financially is extreme but far from unique. One of the main lessons of this period is that it is very easy to commit blatant international financial crime and get away with it. Just look at what Michael Cohen and Paul Manafort have admitted to, activities that wouldn’t have been prosecuted if they didn’t work for Trump. There are tens of thousands, maybe far more, doing the same. However, we know about their crimes–and Mueller was able to quickly suss them out–because of a transformation of global financial enforcement.

It’s hard to believe but up until 1986, money laundering wasn’t a crime in the U.S. Right through the 1990s, money laundering and foreign corruption were barely ever prosecuted. There were few tools prosecutors had access to, even if they suspected someone was up to no good. But the U.S. and British governments have forced much of the rest of the world to create a more transparent financial system in which bad actors are more likely to be reported to authorities. Most offshore jurisdictions have had to shift their businesses away from helping

I don’t want to jump up and down and say: problem solved! The current enforcement is both infinitely better than what existed before and only a tiny step in the right direction.  It is still very, very easy for people of means to launder money. But we now have some very good tools and there are some others that could be implemented. We just need political will to increase enforcement and to public will to ostracize those who engage in illicit finance. It may never be a fully solvable problem, but it is addressable and I allow myself to believe (or hope) that we’ll have reforms not unlike the post-Nixon reforms in the US, that make it slightly harder to do bad financial dealings.

I don’t know if this counts as optimistic, but recognizing you have a problem is the first step and boy oh boy do we have a problem and far more people recognize it.

HW: How’s the 2019 Twitter Resolution holding up? Spending less time tweeting? Fewer battles with trolls?

AD: It is amazing how great it is to be far less active on Twitter. I can’t think of anything I’ve done in years (aside from getting married and having a kid) that has brought me so much concrete happiness so quickly. I’m not joking. I was a frequent twitterer and a regular arguer with others on Twitter. It was often exciting, but also stressful, enraging, distracting. It’s embarrassing to admit, but I have more hours in the day, more focus on my work, more time with my family and more time when I’m not obsessing over some slight from someone. I feel pathetic to admit that I had that problem. But I feel like an evangelical with some good news: you, too, can break free of the clutches of evil and immediately have a better life.

It is amazing how great it is to be far less active on Twitter. I can’t think of anything I’ve done in years (aside from getting married and having a kid) that has brought me so much concrete happiness so quickly. I’m not joking.

I do still use twitter. I post random thoughts. I find many people on twitter to have great thoughts when news breaks. And I probably type and delete 10 vicious attacks on my enemies every week. But I don’t send them. And that is great.

HW: You were co-founder and longtime co-host of Planet Money, one of the most successful podcasts out there. You’ve also hosted a podcast on Gimlet. What’s a “commonly held belief” in the podcast industry that you disagree with?

AD: Oh, boy. So, so many.

I guess the biggest one is that there is a thing called “podcasting” or the “podcast industry.” It is still such a vague, umbrella term that covers an enormous spread in quality and nature of content. We don’t talk about the  “video industry” to refer to everything from your cousin’s bar mitzvah video to some random unboxer on YouTube to Better Call Saul to the latest Marvel blockbuster. Similarly, we don’t talk about the “print industry” to refer to holiday cards, kids books, The New Yorker, and a Dan Brown thriller.  We recognize that video media and print media are divided into many, many categories and industries that barely overlap. They have different business models, different companies, different creators, etc.

Quality long-form audio was an obscure business a decade or, certainly, two decades ago. Very, very few people cared about it or learned how to do it. It strikes me that, over the first 40 years of a national public radio network, starting in 1970, there was a new big, successful, enduring long-form shows about once or twice a decade: Fresh Air and Prairie Home Companion in the 1970s, Car Talk in the 1980s, This American Life in the 1990s, Radiolab in the 2000s. There are others but not many.

There were other audio formats, of course. Talk radio was huge. Public radio also developed the magazine style show, comprised, mostly of short produced pieces of 3 to 5 minutes in length. But those short pieces and the magazine show have been largely irrelevant in podcasting. (This has been a pet peeve of mine for years, that NPR is still obsessively focused on the 3 minute reported story, which is entirely a terrestrial radio product. The skills required to produce a 3-minute story are wildly different from those required to produce a sustained podcast of, even, twenty minutes, let alone 60. Some can make the transition–like commercial directors who make movies–but many can’t.)

So, I think podcasting is going through a very natural maturation and segmentation right now. There are the equivalents of talk radio–Joe Rogan being the big hit. There are a bunch of great interview shows, especially WTF and How I Built This. And then there are the highly-produced shows, like This American Life, Serial, S-Town, and many of Gimlet’s shows, like Heavyweight.

I find, when talking to people without audio experience, they are not all that sensitive to the differences between these formats.

Highly-produced shows cost a fortune: tens or hundreds of thousands of dollars per episode. They are like quality TV, requiring highly skilled production staff and a business model that can reward that level of effort.

The high quality interview shows are much cheaper to produce, but their success is tied to a host who then has enormous bargaining power and can capture much of the profit, so it’s hard for big companies to make money from them (a fact I like!).

Then there are the many, many other podcasts–half a million or more–that really are more like blogs or twitter feeds. They are small, inexpensively produced content for a narrow audience of friends or a small business network. These are more like hobbies or business promotion tools and most disappear fairly quickly.

I would like all the people entering the space–from VC investors to big media companies and others–to understand the different segments or categories of podcasts, to recognize that each has a different path to listeners and profitability, and, most crucially, each requires a different sort of talent.

A very common mistake that has happened again and again is that somebody–a news outlet, a media company, a celebrity–decides they want a podcast but doesn’t recognize there are different segments of podcasting. They try to do something like This American Life and learn, too late, that there are not that many people in the world who know how to produce audio at that level of quality. It’s not like TV or movies, where there is a long-standing, massive ecosystem of DPs and editors and producers. There’s, like, 20 people who are true pros in long-form podcasting/audio production and pretty much every one of them has a job they like and isn’t going to do work for hire.  

There are some–though not that many–solid, experienced radio producers, mostly from public radio, who can do a solid, if unexceptional job. And there are thousands of young folks who are working hard to acquire those skills and many of them will, so this problem will solve itself eventually. But there are very, very few audio producers who can do work at the highest level, work that has repeatedly proven itself with audiences. So, right now, the demand for quality podcast production is far, far greater than the supply of podcast production talent. But many people don’t understand the vast gulf between different levels of talent and, so, they hire incorrectly and are disappointed and conclude that podcasting doesn’t work.  

Just as understanding of podcast production is immature, I think the podcasting business model is quite underdeveloped and too much of an ad-driven monoculture. I would expect subscriptions, long-term IP value creation, overlapping podcast universes–like Bill Simmons–and other models, familiar to Hollywood, will become more common in podcasting.  

This is self-serving, because I will say, obnoxiously, that I do see myself as one of that small group of veterans who has proven an ability to create compelling produced audio that finds an audience. Though I definitely am not at the top of that list. There are several folks who are much better than me. I started to list them but then realized I’d inevitably hurt someone’s feelings by not including their name. But I do think that, if you asked the people who have created podcasts that consistently stay in the top 10 or 20, they would all give you the same dozen or so names, again and again, as the top talent in the field.

One other and related misunderstanding/pet peeve: podcasting, of any sort, can’t just be a quick add-on to whatever else you’re doing. Don’t just buy a USB-mic for $50, record yourself and a friend for sixty minutes, and then wonder why nobody listens. I am launching a podcast in May and I–along with a team of three–have already spent several months and well over a hundred thousand dollars getting ready and we feel way behind. Good podcasts are as hard to make as any other creative endeavor.

I find the telling example is the many celebrities who have failed in the space. The ones who succeed: Chris Hayes, Rachel Maddow, Conan O’Brien, stand out because they didn’t rest on their fame and built-in audience. They spent time and effort and had real pros helping them.

HW: Given that more people know your voice than your face, how many times a year does someone stop you midsentance and say “i just realized why you sound so familiar!”

AD: It’s probably happened a half-dozen, maybe a dozen times in my life. I’m always shocked.  

Thanks Adam!

Five Questions With YA Author Rebecca Hanover

My friend Rebecca is pretty awesome. She’s a writer and recently published her first YA novel – The Similars. I was curious about her writing process, role of social media in book promotion and consumer fandom, so thrilled Rebecca let me ask her Five Questions.

Hunter Walk: Earlier this year your first book, The Similars, was published. What’s more difficult – writing a book or promoting a book? My understanding is that, like many content industries, book publishing has become more open/inclusive, but also more difficult to breakthrough to find an audience?

Rebecca Hanover: That’s an easy one. There’s no contest; writing the book was the hardest part, because a first novel is a mysterious, stubborn beast of a project, and there’s nothing else you’ll ever do that’ll be quite like it. This book was like my third child—it had to be conceived, birthed, reared, loved, nurtured and disciplined. But it was more like a first child in that I had no idea how to do any of those things and was completely making it up as I went along! That’s not to say that promoting a book isn’t challenging—it absolutely is. And you’re right, though social media and sites like Goodreads have enabled authors to reach their potential readers in a truly revolutionary way, there are a lot of fantastic books out there, in every genre, and so it’s hard to stand out. Still, in book promotion there’s so much that’s out of your control.

Most authors I know do the best they can—guided and supported by their publishers (and my publisher, Sourcebooks Fire, has been an incredible partner)—but then they try to focus, first and foremost, on the work itself. The best thing an author can do while waiting for her book to launch is to write another book. And the best thing an author can do while promoting her new book is… to write another book.

Of course, it’s vital you connect with readers and fans and the author community. But my advice—and I’m completely borrowing this from other, much more seasoned authors—is to set aside time each day for promotion and outreach, and then close the tabs so you can focus on that next writing project. You can control how strong your next book is; you can’t control how many Goodreads reviews you get, or how many followers on twitter.

HW: How have the different tech platforms played a roll in your outreach? Did you start with a social media gameplan or is it more organic?

RH: Some of both. I knew I’d need to up my social media game and that I wanted to connect with the author community in a way I hadn’t been able to before, simply because of life and time constraints. So I chose to focus on Instagram and twitter, specifically, and I’ve been overwhelmed by the enthusiastic engagement I’ve found on both platforms.

My publisher also sent out some special SIMILARS swag boxes to bookstagrammers and influencers, and the bookstagrams that resulted have been truly exceptional—and they’ve helped spread the word about THE SIMILARS (you can check out some of these here). The boxes even included a Darkwood Academy scarf.

HW: Does YA have fan conventions – like, ComicCon type stuff where you go and do book signings, panels, etc? Are you ready for The Similars cos play? It would blow my mind if I saw kids dressing up as characters I created.

RH: YES! There are so many dynamic conferences for booksellers, book bloggers, educators, librarians, publishers, and—of course—fans. I’ve been lucky enough to attend BookExpo at the Javits Center in New York City, ALA (American Library Association) Midwinter in Seattle, and several other regional events where I’ve had the chance to meet all the champions of young adult literature and sign my book for them. Librarians and bookstore owners are the most generous and thoughtful people, and it’s always a treat to talk to them about their favorite books in the genre and hear about their strategies for engaging teen readers.

I got a small taste of SIMILARS cos play at my book launch party. When I suggested folks dress up in “boarding school chic” (because the book is set at a New England boarding school), I had no idea how seriously some of my guests would approach the assignment. Seeing the iron-on Darkwood Academy crests on blazers, and the knee-socks, suspenders and ties was such a trip. It was so thrilling to watch the world of the book come to life in that way! (You can get a taste of the Darkwood Academy vibe here, in THE SIMILARS book trailer.)

HW: What was your writing ritual – did you try to block out time each day and hit a certain number of words, or pages? Or more organic? Listen to music or silence? What software?

RH: Writing THE SIMILARS was an incredibly non-consistent process. A little like riding a ski lift that keeps stopping, leaving you hanging in mid-air (and even going backwards, if that were a thing). From what I hear from author friends, this is quite typical for a first book. No matter how much writing you’ve done in your life, there’s nothing like outlining, structuring, drafting, and revising your first novel. It’s bound to be full of fits and starts and moments when you think you’ll never finish it. For first-time authors, novels are only sold once they’re completely written, so at that point you’re your only boss—and toughest critic. It’s easy to set aside your work, question it, and throw half of it out the window when no one’s waiting for it on the other side. Personally, I had a lot going on during those years that made the process all the more complicated. The baby and toddler years are tough for literally everyone, and it took me a while and find the right balance in my life of motherhood and writing.

Luckily, drafting the sequel to THE SIMILARS, which publishes next January, 2020, was a completely different experience. After spending a few months solidifying the outline (which was forty pages by the time I was done), I set a daily word count for myself that I tracked in a Google spreadsheet. Once I saw I could pretty easily hit my target of 1500 words per day, I increased it. By the end, I was writing five to seven thousand words a day. (That’s not healthy or sustainable; I needed a week-long nap and a caffeine infusion when I was done). It’s worth noting that it’s a lot easier to write swiftly and efficiently towards a deadline when your editor is expecting a draft. Fear is a great motivator!

I’m afraid I’m a very practical writer. I sit at my laptop in my sweats (or, let’s be honest, pajama pants) in total silence—I find music with lyrics distracting, so I don’t have any writing playlists to share, except for the hum of my clothes dryer, which I find soothing and non-disruptive. As for software, for Book 1 I used Scrivener, but for my second book I used good, old-fashioned Microsoft Word.

HW: You are an Emmy winner, for your work on the daytime drama Guiding Light. If I had an Emmy it would be in the background of every photo I took. Have you ever used it in an argument with your husband Ethan, or your kids? Like, “look, just do what I say. Have YOU won an Emmy?”

RH: Ha. I don’t think my kids really get what it is, though I did once overhear my seven-year-old showing it to a classmate who was at our house for a playdate. That classmate proceeded to argue that another friend’s mom’s very successful start-up also won a (presumably, better) award. The whole interaction made me laugh out loud. Honestly, the Emmy’s mostly a book-end at this point.

Someone once suggested I bring it to a drinks meeting, but I think/hope they were kidding. In all seriousness: the award serves as a wonderful reminder that I got to do one of the most exhilarating jobs on the planet—write stories and dialogue with some of the most talented writers out there—so it mostly just gives me warm fuzzies about that time in my life, where I learned nearly everything I know about storytelling. I’ll be forever grateful to my Guiding Light family for that.

Thanks Rebecca! Everyone please buy one or more copies of The Similars now!

Will Seed Funds Be Multigenerational?

“There are now more seed funds whose names begin with the letter ‘F’ than there were seed funds [in total] when we started our firm!” A great line uttered at dinner last night by one of the senior GPs at one of the best early stage funds. Also, a partner who is transitioning into a non-FT role going forward.

Photo by Rod Long on Unsplash

One question that’s been on my mind since we started Homebrew in early 2013 was whether seed venture would end up being multigenerational or not. It’s a question that, even six years later, is still unanswered. The first real institutional funds in this segment of the market are starting to reach the back half of their original partnerships – where some combination of age, wealth effect, changes in personal goals, etc have started the transition. New GPs are hired or grown, and in several cases, the bench strength seems to be there. In others, TBD.

You also have a version of strategic expansion (or scope creep if you’re less kind), where some firms started as focused 1-2 GP shops but are now 3-7 GPs, with operational staff and increasingly large fund sizes. They become platforms and the goal/need to look more like a multistage fund plays out in their portfolio model – 20% ownership targets, entering at A round instead of just seed. Again, none of these evolutions are bad (or good) per se, just the nature of fund stewardship and the winner’s curse.

But once you’ve upsized, can you ever go back? Usually not – too much complexity. As Fred Wilson says:

When Satya and I started Homebrew we did so without a succession plan. Not just because it would be premature but because our thinking was that when we’re done, Homebrew is done. Now hopefully this isn’t for quite a while – my standard joke now that we’re on Fund 3 is that Homebew is “post viable, pre excellent” – and as the owners of our business, we get to revisit this decision, but it helps to keep us focused on our primary job: investing in and supporting great founders. Not recruiting new Partners, not chasing LPs so that we can raise several hundred million dollars more next time around.

Some of the seed investors that I enjoy working with most are sole GP firms. My guess is that when they’re done, they’re done. Some of them could have “wealth effect retired” a while ago – or maybe we need to wait for the 2019-2020 IPO boom 🙂 – but they’re doing this because they love founders. When they’re done will we have a replacement class of seed firms that (a) stay small and focused, (b) lead rounds, and (c) are institutional LP backed? Or will there be an early stage bifurcation into multi-GP platforms and smaller syndicate-sized funds. In the 2020s will Homebrew be an anomaly? And will the needs of VCs drive these changes or the needs of founders? If it’s the latter, I feel great about Homebrew’s future, even if we’re planning to turn off the lights when we’re done (MANY MANY YEARS FROM NOW) rather than hand the firm off from Satya and Hunter to Susan and Heather.

How I’m Handling The First Phase Of 2020 Dem Presidential Candidates

November 3rd, 2020 might be 600+ days away (638 actually), but I’m, gulp, looking forward to a process to select the Democratic party nominee. The next few quarters are likely to be a lot of noise, some surprises, fleeting fascinations and a ton of infrastructure built to support a full campaign. One perspective would be to just wait this phase out unless there’s a single candidate – or issue – you overwhelmingly believe in, but that’s a bit too reactive for me. So instead here’s what I’m doing:

Support Multiple Candidates With Small Money: I’m contributing $50-$500 to any candidate who I personally find to be compelling. So far I’ve made three donations : Cory Booker, Pete Buttigieg and Kamala Harris.

Learn More About Candidates Personal Stories & Leadership Style: Booker, Buttigieg and Harris are all familiar’ish to me from their positions on state and national stages. Elizabeth Warren I’ve never met, but feel like I understand her motivation for running and respect her public service. Although they haven’t declared yet, I’m intrigued by Amy Klobuchar and John Hickenlooper.

Help Grassroots Groups Continue to Scale: One of the most encouraging reactions to the 2016 election was the emergence of new energy in the progressive base. There are many groups which deserve our time and dollars. For me, Flippable, Swing Left, Indivisible, and Run for Something are the platforms I’ve been most involved with.

Use My Wiccan Magic To…

  • Tank Sanders: Really, come on dude.
  • Convince Biden to Run… 
  • …and Bloomberg To Not (but fund DEMS)

Keeping My Mueller Candle Wick Dry

I’ve got an early prediction on what the ticket will be, but that’s just for my Slacks with Satya.

Podcast Discovery Tools: Here Come The Transcripts

In January I told you “Podcast Discovery Is A Problem (For Consumers) But It’s Not a Company.” That post ended with a brief tease

Oh, and I do think podcast discovery is problem for CREATORS and there are some interesting business models there, but that’s another post

Well, this isn’t a full next post on Creator-Side Discovery Tools, perhaps more of an amuse bouche. The NYTimes has a titan of a show called The Daily, one of the most popular news pods. For those unfamiliar it’s a ~20 minute interview between host Michael Barbaro and the author/journalist of a day’s lead story from the paper. Then there’s five minutes at the end of top headlines but I’m told lots of people drop off for those (I do).

Photo by Simone Acquaroli on Unsplash

Since if you’re a newspaper, eventually all roads lead back to text (philosophically and culturally if not literally), it makes perfect sense to read that The Daily is now experimenting with episode transcripts. Designer Dalit Shalom writes

What makes podcasts so special, also renders them inconvenient: they can only be heard. … Over the past few months, we’ve been experimenting with ways to make our audio content more accessible to readers.

And it’s not just a flat file document, although even that would be an improvement over a no-transcript world

In future releases, we are planning to build in functionality that allows readers to click on a line in the transcript and be taken to that segment of the audio. We are also exploring ways that our readers might share specific clips of the podcast on social media.

Yes! Shareable, embeddable transcripts with links to timed audio!

Why do I believe every major podcast should be taking the trouble and cost of creating transcripts for their creations, even if it’s just text without timestamps?

  1. Makes sharing key passages/quotes so much easier on social
  2. Gives additional SEO data to the pod URL, which hopefully turns into evergreen search traffic, especially for mid/longtail queries
  3. Is an additional piece of content to provide related links, show notes, promotional material – a newsletter sign-up. Especially if these promotional links can be dynamically updated across all your episodes’ transcripts, you might have a interesting marketing tool to slot into any current campaigns.

Platforms serving podcast creators (such as Anchor and RadioPublic), are all thinking about how to give podcast creators assets they can use to help promote their pod to their community. Transcripts are a great step in this direction and I’m excited to see NYTimes leading the way.

Books I’ve Read 2019

Just a post I’ll update throughout the year. Here’s 2018.

  1. Friday Black – Nana Kwame Adjei-Brenyah (fiction): Really good and creepy book of short stories with a race + dystopian bent. Author is a young black man and his POV is powerful. Here’s what NYTimes said about his character development: “Each of these individuals carries a subtle clarity about what matters most when nothing makes sense in these strange and brutal worlds he builds.” Definitely recommended.
  2. The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World – Charles C Mann (non-fiction): Really enjoyable look at two men who had distinctly different ideas of how to ensure humankind’s survival in the face of earth’s growing population in the 1940s. The Prophet urges conservation and the Wizard science. Definitely recommended.
  3. Hunger Makes Me a Modern Girl: A Memoir – Carrie Brownstein (non-fiction): One-third of Sleater-Kinney pens her very personal story of how a band saved her and how she then broke it up (spoiler: they get back together, kinda, a few years late). If you’re a SK fan, worth reading without a doubt. Otherwise you can skip it.

Two Portfolio Tips for First Time Seed Funds

Six years ago this week Satya and I took our Homebrew deck on the road (as far south as the Rosewood!) and began raising Fund I. Despite now being on our third fund, we still approach our work with a beginner’s mind, working hard to get better at what we do every day. But there are some things we’ve learned and frequently new/aspiring managers hit us up for advice.

Each firm is its own special animal, adopting some industry best practices when there’s no reason to reinvent, but also trying a handful of new approaches that make them who they are. This is certainly the case with Homebrew. That said, there are two portfolio modeling/management tips that I do think are valuable exercises for every Fund I. And since I find myself repeating them frequently on advice calls or coffees, let’s jot them down here so I can send a URL over instead of a meeting invite 🙂 Note: The two points below are most applicable for, say, funds under $25m where you’re trying to prove yourself in order to raise a larger, institutional second fund.

This cat has nothing to do with this post. I just didn’t want to use a stock photo of a laptop.

If Your Portfolio Model Assumes Outperformance Across Multiple Metrics, I Don’t Believe It: Every VC fundraise has an Excel sheet that forecasts the performance of the fund. It’s pretty basic but is meant to give managers (and their potential LPs) a sense of how many companies will be in the fund, ownership targets, dilution assumptions, reserves strategy, exit expectations and ultimately, a target return for the fund. This exercise is also known as “let me show you how we get to 3-5x net.”

Often I see the forecast models constructed with a bunch of assumptions that are totally out of whack with historical norms and current trends – often dramatically underestimated dilution pre-exit, zero failure rate in the investments or outcome modeling suggesting every one in 10 backed startups will be a $1b+ exit. Sometimes new VCs think this conveys confidence and high standards for themselves but in reality it shows sophisticated LPs that you don’t really understand venture. Or at the very least, you have a model requiring a high degree of difficulty to succeed. It’s better to show a reasonable way to get to expected returns and then if there’s upside surprises from there, fantastic. I think you can get away with forecasting *one* factor being better than average, so long as that is backed up by a hypothesis as to why you can achieve it relative to your peer managers.

For Fund I, It Is Better To Get Into Great Companies With Less Ownership Than You’d Want (Or Without Reserves To Protect Pro Rata) Than It Is To Be In Mediocre Companies: Unless your strategy is to show you can lead rounds, in which case you should really have a larger fund anyway, I’m going to advocate something perhaps controversial here: focus more on company quality than ownership targets. Better to have a range – say 2-5% (and get as much as you can in each deal you do), than have a min (5%) and walk away from deals where you can’t get that much.

Why do I say this, especially since our own fund strategy is fewer investment with concentrated ownership? Because I think it’s easier to make the case to future LPs that a larger fund means you’d be able to get, for example, 4-8% of ownership in these great companies you backed in Fund 1, and/or protect ownership in your winners, than it is to convince LPs that a larger second fund is going to make you a better picker.

The one caveat here – it’s hard to jump more than one weight class per fund. What I mean is, if you were writing $50k checks in Fund I and then tell LPs you intend to write $1m checks in Fund II, they’re going to be skeptical that you will get the same access. Your competitive set changes, your operational support expectations change, your follow-on strategy changes, etc. Too much. But if you show adeptness at writing $50-$100k checks and do right by those founders, an LP will believe that, with more dry powder, you can write $250k checks into those companies initially and then use another $500k to protect your ownership in the best ones. That’s how you ladder from a $20m fund to a $50m fund responsibly IMO.

Anyways, your mileage may vary, and we’re still very much in a “prove it out” ourselves phase, but I believe these two things to be true and hope they help you out!

“Podcast Discovery” Is A Problem But It’s Not A Company

I love podcasts. Basically they’ve replaced satellite radio in my car and airpods + apple watch combo make it near frictionless to listen while walking between meetings. I’m also a believer that there’s money to be made in podcast businesses – most of it not “venture scale” but lots and lots of opportunities for founders to build meaningful SMBs here. And undoubtedly some will prove me wrong and break through to levels of success I didn’t expect [disclosure: we’re investors in Anchor, which I believe is one of these examples]. However, let me tell you about a problem that founders occasionally tell me is the basis for their startup: podcast discovery.

The startup usually pitches something like this: There are lots of great podcasts and most people can’t find the best ones for them so we’re building an app that solves this for them. How? Insert one of the following: bootstrap from social graph, bootstrap from interest graph, bootstrap from what they’re currently listening to, etc etc etc

These are all wonderful ideas but they are at best features, not products or companies. It’s true that at any given time there’s probably a podcast (or at least podcast episode) that I don’t know about and would enjoy. But while it’s a persistent problem (true of almost EVERY media type), it’s not an especially valuable one in a standalone business. You’re not going to get to a critical mass of users and if you do, trying to sell Promoted Pod slots (or other ads) around the recommendations isn’t substantial enough to build a business. And people won’t switch their podcast client to your just because you do discovery “better.” Inertia is too strong and companies like Spotify, which solve this via search, curation and personalization, are increasing their share of podcast market.

So what are some businesses to be built here if you are passionate about this challenge? You could try a theSkimm for podcasts – newsletter based summary and recommendations for target demographic or content vertical. There’s an app called Wilson that some folks have recommended to me which does podcast curation, almost magazine style. Oh, and I do think podcast discovery is problem for CREATORS and there are some interesting business models there, but that’s another post 🙂

If you think I’m wrong about all this, I’d love to hear why (@hunterwalk on twitter).

Being Promoted Into a Job That Makes You Miserable

Rising to your level of misery” is how Arthur Brooks puts it. The first 20 minutes or so of his podcast with Ezra Klein [link – play button at bottom of page] is one of the most well-articulated descriptions of an affliction which hits many tech leaders, especially those in product/design/engineering.

Brooks describes the “trap” of being good enough at your job to continue taking on new responsibilities, eventually leading to significant management tasks. Along the way you picked up material gains (salary) and emotional ones (power), so you never said “no, I don’t want the promotion” but eventually you find yourself doing a job that you no longer enjoy. Unable to imagine giving up the place in the organization (who proactively moves downward in American culture?) you end up miserable and unproductive.

This was an ALL THE FEELS discussion because I experienced my own version of this at Google. What I loved most about working in product was being on a whiteboard with teammates, but my job eventually became dominated by resource planning and managing upward. However I had (have?) too much ego and control-orientation to step backwards into an IC role, even if day-to-day it would have likely made me happier.

Anyway, worth a listen IMO, especially if you’re someone who aspires for “leadership roles” because of what they represent and not what they are.