Why a Paid Newsletter Won’t Be Enough Money for Most Writers (And That’s Fine): The Multi-SKU Creator

Photo by Ibrahim Rifath on Unsplash

A number of reporters and columnists these days are “going indie,” detaching from their previous employer and signing up with a site like Substack, Patreon or Medium to get paid for their writing by their readers. The motivations are usually blends of seeking freedom (to write at their own cadence and on whatever they want to cover) and the accelerating austerity at media companies from ad supported business models collapsing. Friends of mine like tech journalist Casey Newton have recently made this transition (he left Vox to launch Platformer) so I’ve gotten a bit of insider perspectives on the ambitions and economics of these launches.

Much of the discussion around the sustainability of this movement is focused on the math of converting readers (or followers) to paying subscribers. “If she can get just 10% of her 500,000 Twitter followers to pay $100/year…” is the type of simple analysis that accompanies both the glass half-full and glass half-empty outlooks, benchmarked against either their previous salary or some notion of what economic success looks like. And while this framing isn’t wrong, it’s very incomplete. It’s my belief that very few “Substack writers” will make 100% of their income from their newsletter and this won’t be a failure of the platforms but instead related to the nature of creation itself. Enter, the Multi-SKU Creator.

The biggest impact of someone like Casey unbundling himself from The Vox is that he is now an entrepreneur with a product called Casey. His beachhead may very well be a paid newsletter (it’s very good by the way) but the newsletter is just one SKU. Maybe the SKU he cares most about. Maybe even the SKU that makes him the most money. But it doesn’t have to be the only SKU. There could be a podcast SKU. A speaking fee SKU. A book deal SKU. A consulting SKU. A guest columnist SKU. And so on. And if he does several of these over the next few years, it won’t be about the success or failure of Substack (for him) but a mix of creative, economic and lifestyle goals. In fact, I’m such a believer in the Multi-SKU Creator that we backed a startup company called Stir.

Stir is kinda of like Square, if Square was built for digital creators instead of coffee shops. Their first products include a dashboard which allows you to combine your multiple sources of income into a single view, tools to support automatic revenue sharing among creative collaborators and an experiment to let you charge Twitter followers for access to a separate private feed. Even in their early days we’re seeing creators who span multiple platforms (YouTube, Instagram, TikTok, etc) and multiple teams/brands/partners. The end result is that there’s no one platform, no one product that fulfills all their needs. And no matter where they are creating, Stir can help them keep their head above water. It’s an exciting future and one that I believe will lead to all sorts of new voices finding their audiences.

Oh and if this sounds cool, you can sign-up for early access to Stir and they’re also hiring.

Notes and More

💰to Fair Fight supporting voter rights ahead of Georgia Senate Runoff

📦 Things I’m Enjoying

It’s turning towards winter which means less sunlight/outdoors. Please make sure you’re getting enough Vitamin D, which in some studies has been show to also be effective in keeping your immune system tough against COVID.

🏗 Highlighted Homebrew Portfolio Jobs

Outlier uses software to help companies find unexpected insights from their data. Sometimes I call it “AI for BI” because it’s not just about graphs and data for your analysts to pour over but it’s about telling them what’s happening and what’s likely to happen next. Post-Series B, well-funded and a great place to continue your career — they’re hiring.

Working In Tech & Worrying About Getting “Too Old”

The above tweet seemed to resonate with folks, and sometimes when that happens, I like to expand in a post, since the tweet willdisappear in 30 days.

Ok, let’s talk about working in tech and feeling like your best years are perpetually behind you. It screws with your head! This was part of the reason I spent almost two decades metaphorically being chased by failure tiger. No bueno for one’s health and wellness. Why does this feeling exist and what can we do to help ourselves and others navigate?

It exists because it’s true and part our popular mythology! Ahh you didn’t think I was going to start there did you? Seriously, any discussion of this topic should acknowledge that there’s an incorrect (and sometimes illegal when it plays a role in hiring) age bias in our industry. “Pattern recognition” of a what a founder looks like still gravitates towards, as one VC said (and I’m paraphrasing) “pasty young white males.” This is changing as women take their companies public and people start multibillion dollar companies in their — gasp- 40s But to write a post confronting the “I’m too old” anxiety and not recognize all of this would be dishonest.

But let me tell you what does get better as time passes: the relationships, the accrued knowledge, your own self-awareness. These compound like high-interest investments, as you shift from early career (time to learn) to later career (time to earn)2009 blog post. Especially during a year of social distancing, I’m reminded of the value in possessing 20+ years of relationships and learnings.

In these few weeks left of 2020, what can you do to manage your own “I’m too old” fears?

CHILL OUT. YOU GOT THIS. Pick one or two things that you want to “invest in” that pay future dividends — skills, people, networks, your own health. Pick an incremental improvement for each of these. You don’t need to go from 0 to 100 right away, just take a few steps forward. Create the habit. Do this for the next 60 days. Then email me or tweet at me whether it made a difference and what you’re still struggling with. We’ll work on it together!

Notes and More

💰to Fair Fight supporting voter rights.

📦 Things I’m Enjoying

Salonpas patches for back pain because I’m old, Andytown coffee and this GQ article about a band of watch thieves.

🏗 Highlighted Homebrew Portfolio Jobs

Orum is a NYC-based financial technology company that makes money move fast. Experienced leadership, well-funded, and hiring in engineering, product and operations.

The Essential Nature of In-Person Work For Early-Stage Startups

tldr: instead of choosing between in-person or remote, your seed stage company (or team) should be more hybrid, tied to the type/phase of project going on. With in-person being used during periods of intense team ideation, collaboration or debate. While remote is best for execution sprints and concentrated individual problem solving.

2020 has turned out to be a really interesting test of what happens when people stop being polite and start getting real. The Real World. Uh, sorry, as a MTV generation kid, that reality show opening is hardwired into my brain. What I meant to say is 2020 has provided us a bunch of forced learnings around collaboration given that much of the tech world shifted from “mostly together in offices” to “mostly apart, at home, supported by software.” While we all agree that ‘apart’ is best right now for reasons of safety, the discussion around what a post-COVID world seems to be largely bifurcated into Office vs WFH/Distributed. More recently there’s some acknowledgment that maybe a hybrid will be the path back, where different people are in the office for 2–3 days/week to take into account social distancing and give people productive time away from the office sans commute. But these aren’t the discussions I enjoy most.

Instead what I prefer are conversations around linking team presence (being together, whether it’s in an official office or just somewhere) to the nature of the work to be done for a period of time. Within the world of tech it’s my overwhelming experience that work which involves collaboration around new ideas; team building; or bursts of execution involving cross-functional participants, all benefits from being together, in-person IRL. We’re human beings who still require up close interaction to build ties. And group creative work (as opposed to solo creative work) is hard to force into tight meeting windows and collaboration SaaS. Look at many of the tech companies who do remote right and you’ll see they allocate budget and staff to ensuring people get together as a company and as teams. At Google, when I was managing and/or working with teams across the world, we often would pick opportune points in project lifecycles to come together — kickoffs, planning and milestone celebrations.

None of this should be read as “in-office teams always beat remote teams,” or “Hunter won’t invest in remote-first companies.” But the nature of early startup work does lend itself to enough of the in-person conditions discussed above for me to believe that having meaningful time together *is* a competitive advantage. This does err towards founders in the same city and if not, then founders who have worked together before and know how to manage the distance.

Where do I hope this heads? Well, that forward-thinking project management tools like Asana start to learn about the type of work being done and recommends best periods for teams to be together vs apart. The first generation of “future of work” software products were largely IQ-tools — utilities that moved information efficiently. We’re starting on a next set of FoW software which I’d call EQ-tools, and these are more attuned to ‘HOW’ we all work together, productivity gains from feedback, emotion and preventing burnout. We happen to have invested in several of these and I’ll be excited to talk more about them in a future post!

Notes and More

💰to Fair Fight supporting voter rights.

📦 Things I’m Enjoying

Salonpas patches for back pain because I’m old, Andytown coffee and this GQ article about a band of watch thieves.

🏗 Highlighted Homebrew Portfolio Jobs

Orum is a NYC-based financial technology company that makes money move fast. Experienced leadership, well-funded, and hiring in engineering, product and operations.

Is It Fair To Tell Founders “Just Execute And You’ll Be Fine” When We Know It’s Not A Level Playing Field?

So I recently re-shared a 2019 blog post where I’d basically advised founders who’ve raised seed capital to worry less about “how will I raise the next round” and more about “how will I execute my plan?” The post’s kicker said it was “rare for a company that’s executing well to fail to raise a Series A” based on my early experiences in venture.

Some of the responses highlighted that this wasn’t true of companies with founders who didn’t fit the traditional male, usually white, usually straight, founder stereotype. That those founders had personally experienced challenges in what the “executing well” bar meant for them in the eyes of future funders, not to mention that getting funded to start with, and then executing well, was usually already from a disadvantaged position due to the structural issues in tech.

Since I’ve never been a non-white, non-male, non-straight founder of anything, I wanted to learn more about this criticism and how to navigate delivering advice that might not be universal or comes from a privileged vantage point. Kristen Anderson, CEO/co-founder of Catch Benefits, was one of the people in my responses asking me to look at my post through this lens, and she was also generous enough to agree to have a conversation with me about it, that we could share as an update to the original post.

Hunter Walk: Thanks for doing this with me Kristen. So the message of my post, in my mind was, once you’ve raised seed dollars, focus on executing, not worrying about what investors think. That the real power in fundraising comes from a business that’s kicking ass and that I rarely see post-seed businesses that are succeeding fail to raise additional capital. I took your feedback to be “I understand you think this is generally simple and true, but let me tell you, for many of us, it’s not.” Is that a fair starting point?

Kristen Anderson: Yes. I think that there’s nuance, but the thing that stuck with me is the idea that “kicking ass” is some sort of metric that is universally agreed upon. I’ll start by saying my own investors have shared this advice with me, including VCs who are women and people of color who know all too well about systemic bias in their own efforts raising funds. The difficulty, though, is that everything is subjective. So when you — or my investors — say that I need to execute more/better/faster/whatever, what does that actually mean? Has any pre-Series A company succeeded on every metric month after month? Have they definitely de-risked every part of their business? Are their metrics infallible and would every single person in the world agree that they’ve cracked the code? Not a chance. Is there bias in that founders who are willing to say that they’ve crushed it with confidence and leave no margin for doubt are more likely to be white, straight, and male? How about that women are less likely to be believed than men even if they say the same things? Investors will be the first to tell you a Series A is not based on a single metric of growth, revenue, or traction, but that it’s about the whole picture. Well, unfortunately, that ambiguity leaves a lot of room for the milestones to be moved just one inch farther again and again because of implicit, unintentional bias.

Is there bias in that founders who are willing to say that they’ve crushed it with confidence and leave no margin for doubt are more likely to be white, straight, and male? How about that women are less likely to be believed than men even if they say the same things?

HW: All fair points. We’ve backed female founders at 4–5x industry average, so I at least have some visibility into the experiences they have when fundraising, which can be very frustrating for sure. But what trips me up is I’m specifically saying “once you’ve raised seed funding, focus on executing, not pleasing investors.” I’m not saying it’s a meritocracy, I’m not saying you should pretend to be “killing it” because that’s the startup narrative. I’m saying the thing that is most in your control is can you build your business. And to have confidence that if you do that, the probability of other good things will go up. Do you think I should asterisk these types of posts with a “YMMV, if you’re a non-white male founder all these things will be harder?” To some extent that feels like a disclaimer that could apply universally! Does reading that make you think I get it, or at some point are you tired of being spoken to as a “FEMALE CEO” and just want to be thought of as a “CEO” and you can decide what advice is applicable or not?

at some point are you tired of being spoken to as a “FEMALE CEO” and just want to be thought of as a “CEO” and you can decide what advice is applicable or not?

KA: It’s a great question, and where I should interject that I am responding here as a white, straight founder. I recognize my experience is particularly privileged even among underrepresented founders. I’ve also asked myself the question of when I write about my own experience or point of view, when and where do I need to caveat my privilege, or highlight that I live in the United States which gives me immense access that founders all over the world have to work harder for. There’s not an easy answer, especially if you’re trying to be brief and action-oriented in your guidance. The answer is even less simple when you compound your “reach.” I think if you’re in a coffee shop telling 1 or 2 people, the need to caveat is a lot less. If you’re speaking broadly to the public or on Twitter and you’ve got a mere 10k followers like I have, there’s some explanation needed. When you’re a full-blown public figure, the standard is different. As an aside, I’ve had this conversation with my executive coach before: what is the weight of your voice and as an individual how do you recognize when that weight changes? We have different expectations of people in a position of power and influence, and so the pushback may seem unfair because we’d never hold small-scale conversations or personal interactions to the same standard. A question I have for you, then, is how do you think about addressing feedback? When is it important to engage vs. when is bad faith pushback a waste of your time? I think anyone who pays attention to your writing knows that you value equality, diversity, and mutual respect.

HW: It took me a while to understand the ‘public figure’ assumption because despite having some reach, I never think of myself that way compared to the bold faced names in our industry. That said, I’m not naive about the benefits of having reach — or at least influence — so I try to be respectful, responsible and promote other voices. Starting with the assumption that all feedback is valuable, I respond fastest when it’s from people who have been following me for a while and engage directly. Even if I don’t immediately agree or understand, it’s important to assume good faith and be open to learning. Separately, I’ve had pieces of content undergo “context collapse” — when something gets shared to people who don’t know me and, either because it was literally a joke that they take seriously, or because as a white male VC, it’s riskfree to punch up at me, they come back with fire. When it’s specific and informed, I actually respond kindly to those because they don’t know who I am, and I find the interaction a chance to build bridges! I’ll tell you what really gets me though — at a gut emotional level — and I had some of these with this post: when you follow me, and instead of replying, you put me on QT dunk blast. That drives me nuts and makes it really hard for me to assume good faith. I hate QT!

Let me turn the question back on you — when do you engage vs ignore?

KA: I have a guy who follows me on Twitter, and any time I say anything about fundraising being more difficult for women, he comments that VCs are after money and fund whatever gets them the best return, full stop. The implication that hurts is that women would be funded if they could get returns. No matter that statistics show female founders outperform by 63%. I tried early on to engage him with data and conversation, but got nowhere. It caused a huge amount of stress. Now, I don’t respond and I haven’t blocked him, because I derive joy from knowing that his comments are meaningless and not worth my attention. It’s anecdotal, but this reflects my general approach to engagement on Twitter. If someone has said something that I think misses a key point of view, and I believe it comes from simply not knowing or recognizing the gap, I’ll try to engage. If it becomes clear that logic and reason don’t matter, or there is a bad faith effort to drag me into a reply war, I ignore. It’s interesting you mention the QT, because that was actually the reason I responded to your post. That person is someone I follow, and I thought it was massively unfair given the (albeit limited) context I know about you. I think that’s one of those lines that starts to draw out what a “public figure” is. Most people don’t bother to QT anything angry about my posts because no one in the real world knows who I am. Sometimes I think those with less societal power feel the QT is a way to have their voice heard when they otherwise feel ignored. Sometimes, of course, they’re just trying to antagonize and get an audience response. I use the QT if I think the person is too “famous” to respond to a comment, or there’s a broader point about society I think people should see. Recently though, I did get one QT that called me stupid, and wow, I did not realize how hurtful that would be. It was a silly, meaningless incident, sure, but one that has made me reconsider the QT as a tool for criticism.

If someone has said something that I think misses a key point of view, and I believe it comes from simply not knowing or recognizing the gap, I’ll try to engage. If it becomes clear that logic and reason don’t matter, or there is a bad faith effort to drag me into a reply war, I ignore.

HW: I have this term for those sorts of interactions on Twitter: “paper cuts.” None of them cross any lines that violate their Community Standards, but each one of them stings. And if you’re active on Twitter, the paper cuts add up! And the women, activists, etc that I know get 100x the paper cuts I do. I really appreciate this chat. Since we’re talking about how we use our public voices, maybe we can wind it up celebrating some folks who we appreciate online? Here are a few from my own follow list: @Hypatiadotca@jewelmelanie@laura@dansinker

KA: Thanks for the opportunity to talk about some of the shades of gray. Some of my favorite tech/VC voices are: @dunkhippo33@ArlanWasHere, and @lolitataub. And a few founders you should know of who are doing really cool things: @rachelren1@ShannonCGoggin (who I know is a portfolio founder for you, Hunter!), and @isadwatson.

Notes and More

🇺🇸 Thank you for voting!

📦 Things I’m Enjoying

These microwave plate covers, SF’s Dandelion Chocolate, and Miley Cyrus’ Midnight Sky live performance.

🏗 Highlighted Homebrew Portfolio Jobs

Sitka is a telehealth specialist network which allows any health provider/system to access a deep set of specialists to augment their own patient care models. They’re hiring remote roles in engineering and product design.

Never Become The Person Your Twitter Followers Want You To Be

Something happens on Twitter after you’ve gathered enough followers to become at least a “semi-public figure” and I don’t think it’s healthy. Expanding outside your immediate social circle of IRL friends and into URL friends tends to include what I’d call “tribe followers” — an increase in the number of people who are expecting a certain type and tone of content in-line with whatever the tweet was that caused them to follow you. “Hate followers” usually come next, which are basically the same but opposite: accounts waiting for you to say something they can fight about, even if they have to misrepresent the meaning or context of your words. This interplay, plus the basic physics of the system (RTs, RTs w comments, Likes increase tweet reach), tend to implicitly and explicitly shape *what* you tweet and how emphatically you say it. And the followers are waiting to high-five or poke you in the eyes, depending on why they’re there. And the cycle repeats.

So after a lifetime on the social web, and 14 years on Twitter, I have one piece of advice: Never Become The Person Your Twitter Followers Want You To Be. Don’t be egged on by the adrenaline rush of online fights or the euphoria of being applauded. Don’t measure your success by the popularity of what you say or the attention it receives. If you do, you’ll slowly be pulled to the extremes of any position.

Now please note, I’m not saying bite your tongue or temper your beliefs. I’m not saying don’t be expressive or contrarian. I’m not saying abstain from discussion, even defending your position in the face of resistance or accusations. I’m just saying check yourself that you are expressing what *you* care about and not just cooking up meals for an audience. You don’t need to drag yourself into the mud with bad faith repliers. And you don’t need to put more hate or anger into the world over stupid shit.

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I’m writing this not because I’m above it but because I used to fall victim to it! How’d I find my way out of this Twitter trap? A few suggestions:

  1. Auto-Delete Your Tweets: I use TweetDelete on a rolling 30-day delete option (ie my tweets get deleted 30 days after they were originally sent). When I first turned this on folks thought it was because I didn’t want my history public forever. That’s actually not it — I stand behind everything I said when I said it. My tweets autodelete because it protects me from getting too enamored with whether or not something went viral because I know regardless it’s gonna disappear. The ephemeral nature is freeing in that it limits the performative nature of tweeting.
  2. Turn On Notifications Quality Filter: A few years back Twitter gave us more control over our Notifications stream. You can turn on a blackbox quality filter, which hides replies from your notifications stream that the algorithm deems low quality. This removes many of the “ha ha cuck” replies.
  3. Be Careful About QTs: Ah, the QuoteTweet. So many unnecessary QTs when a reply would have sufficed. The sender always feels like they’re punching up at some horrible take, or calling their followers to see what kind of bs is taking place in the world, but it also injects the dumbass content into everyone’s feed and often turns into tribe vs tribe. These escalations then force each person into a more extreme version of their argument and before you know it, it’s a bunch of time and emotion wasted. Try QT’ing only for positive amplification and see how it feels.

Any other tips on being an active, engaged and productive user of Twitter?

Notes and More

🚫 If you want even more control over your Twitter experience, request an invite to Block Party, an app that helps you manage harassment and nonsense on Twitter. [Homebrew is an investor]

📦 Things I’m Enjoying

These microwave plate covers, SF’s Dandelion Chocolate, and Miley Cyrus’ Midnight Sky live performance.

🏗 Highlighted Homebrew Portfolio Jobs

Sitka is a telehealth specialist network which allows any health provider/system to access a deep set of specialists to augment their own patient care models. They’re hiring remote roles in engineering and product design.

Coinbase’s Culture Memo: Not Good, Not Bad, But I Reject ‘Mission-Focused’ Framing

Looking at my 26-day-old Tweet, it feels certain I was going to write *something* about Coinbase’s culture memo. Now in late October, we’re far enough removed to see initial reactions have play out, and that’s left space to see what has remained tumbling in my head.

What’s the “Best” Version of What Coinbase is Attempting to Do?

I’ve observed a tendency to label corporate cultures “good” or “bad” based on whether the critiquing individual agrees with the company’s professed values or could imagine themselves working there. While there are certainly “bad” cultures, I believe that label most accurately applies to organizations that have either (i) inconsistently executed their values, (ii) a set of professed beliefs that are strategically at odds with the company strategy or (iii) ingrained practices which cause unethical or illegal actions to flourish with management approval.

Outside of these situations company cultures translate more simply as “appeals to me” or “doesn’t appeal to me.” From what I’ve read recently, I don’t believe a company like Coinbase would appeal to me as an employee, but that doesn’t make it “bad.” Similarly, I don’t know enough about their current team and their practices to suggest that any of my earlier “bad” culture framework conditions apply, and I’ve certainly respected many of the folks who have worked there over the course of its life.

What I would like to understand over time is whether Brian’s vision for a company that doesn’t want to broadly engage in societal/political issues is the best version of its own playbook. That is to say, it’s unlikely Coinbase’s first stab at implementing this is the perfect way to address the concerns he outlines since we’re always learning and evolving. I’m curious how he and other like-minded CEOs will analyze where they were right, where they were wrong and how this collective knowledge will get shared. A non-zero percentage of companies over time will likely have their own version of Coinbase’s strategy, and for their benefit, I’m hoping he’ll engage in measurement and reflection. There are probably better versions of what Brian wants to implement and worse versions. My assumption around a stable future state for Coinbase and others would be they offer a “good” version of this approach, and then employees vote with their feet — some people will love it, others won’t, and that’s ok in the scheme of things (as Brian has noted himself).

What’s the “Best” Version of a Corporate Culture That’s Societally Aware, Politically Active and High Performing?

Separately, I’m personally not a believer that an organization’s political and societal engagement needs to come at the expense of company execution. In fact, and maybe this is my optimism about people (plus projection of my own personal preferences), I hope the best version of this type of company has a higher ceiling than the version Brian is laying out. Also I recognize that “societal” and “political” are getting conjoined here in a way that’s problematic. Perhaps a company can decide it won’t be broadly political but can’t avoid societal questions, no matter how hard it doth protest, so long as it employs, you know, actual human beings. Hold “societal != political” aside for the moment because it’s likely a post all its own, better written by someone more deft on these issues than I am.

What I hungered for after reading Brian’s memo was bringing likeminded people together to build the best playbook for the opposite approach. Founders who desire embracing stances on the other side of the spectrum need some guidance too. Because it’s messy right now in many companies and we shouldn’t be glib to just assume “hire good people” is the solution for anyone who wants to be the “anti-Coinbase.”

Who has built the model for high performance societally-active corporate success? What tech companies should we be studying, while knowing that no company is perfect? Twilio and Salesforce come to mind. Others?

Sorry, You Don’t Get to Own “Mission-Focused”

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So if I’m pretty even-keel on this issue overall is it weird that what *actually* bugs me is an attempt to claim “mission-focused” as the way to describe Coinbase’s culture? To say that, as a company, you’re “mission-focused” if you try to reduce the footprint of corporate time and energy spent on broadly societal issues seems unfair. It reflexively turns alternative POVs into “non-mission-focused,” which has all sorts of pejorative connotations. It’s one thing to use this language internally but it’s clear — from for example the tweet above — Coinbase wants to make it the external phrasing for their culture as well. And that to me feels like an overreach that I want to try and prevent. To me, mission-focused means having, articulating and living your mission, *not* any one point on the spectrum Brian is articulating. So dear reader, do me and George Lakoff a favor, and don’t blindly accept anyone else’s framing techniques.

There we go, three things that I wanted to get out. Probably disappointed the folks who wanted to see me slag Coinbase but at same time questioning enough to keep me in the SJW box for those who prefer to accuse me of performative wokeness. Mission accomplished!

Notes and More

📚 George Lakoff’s “Don’t Think of an Elephant” is a solid overview on how language frames moral issues, through a lens of why Republicans are so good at this and Democrats so bad.

📦 Things I’m Enjoying

Passenger Coffee from Lancaster, PA; Our Fake History podcast; single serving oatmeal cups

🏗 Highlighted Homebrew Portfolio Jobs

Stir is building software and financial tools to help creators manage their business. They’re hiring in design, engineering and also letting you create your own role.

You’ll Need At Least Two of These Four Qualifications to Get Hired By a Venture Firm

Disclaimer: I’ve never been hired by a venture firm.

Ok, now that’s out of the way, here’s the advice I give folks who have 2–3 years of work experience and are looking to get an entry-level role at a venture firm (typically called an Analyst or Associate).

“Hi, thanks for reaching out. Since I need to prioritize my family and my fund, I might not have time to jump on a call to answer your questions about breaking into venture. Instead I’ve written some stuff down — take a look and if you have any follow-up maybe we can handle over email. Good luck!

So I’ve found that when you’re not already ‘in the door’ at a firm (ie went to school with the senior GP’s kids, worked at a startup they backed) that there are four different types of “qualifications” they are seeking. Each one can be more or less important depending on role or firm, but generally let’s say these four matter and you need to be strong in at least two of them to distinguish yourself against other applicants.

Qualification #1: You know how to do something specific that is valuable and needed often in pursuing a deal or servicing the portfolio.

You’ve got some operational superpower. Maybe it’s statistical analysis, growth marketing, or deck making. Whatever it is, it helps diligence opportunities, win deals or service the portfolio in ways that make the founders and GPs feel good. In exchange for doing this repeatedly, you get to learn the rest of the business.

Qualification #2: You have access to a particular network of potential dealflow that is additive to the firm’s current strengths.

The school you went to. The company you’re currently working at. The cultural group or demographic you’re a part of. Some other ‘birds of a feather’ community you’ve cultivated. You have access and relationships with a pool of talent that will produce founders.

Qualification #3: You understand a specific complex technology that is a current or emerging investment theme for the firm.

Synthetic bio. Blockchain. Real AI. Climate sustainability. All of these areas require real understanding of core underlying technology, not just pattern matching against a business model applied to a vertical. If you are deep in an area that is heating up at the point where a firm wants to investigate or build out a practice area, you’re in a very good position.

Qualification #4: You have an emerging track record as a good angel investor.

Yes, I know in most cases it’s easiest to become an angel investor if you have money or are already connected to the venture industry as someone’s scout. This is the *least* important of the four (some firms won’t even care) but I’m keeping it here because it will be a qualification that at least some applicants bring to the table. So if you aren’t yet versed in this area, knock it out of the park in some of the others.

There you are, the 15 minute phone call we were going to have instead summarized in an email. If you want to chat more, or want me to keep you in mind for anything that is opening at friends’ firms (Homebrew isn’t currently hiring), please reply back telling me which of these superpowers your possess, or telling me a different qualification you have that doesn’t fit under the umbrella of these four.

Good luck!

hunter”

Notes and More

📚 Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist (Feld; Mendelson) is the best book to read if you want to understand venture capital, term sheets, etc

📦 Things I’m Enjoying

Onyx CoffeeMoo NotebooksJames Vorel’s Horror Movie essays

🏗 Highlighted Homebrew Portfolio Jobs

Noyo is working on making health insurance and benefits easier for everyone via APIs and data! Hiring for many roles in SF, North Carolina or Remote.

“Coming for the Content, Staying for the Community” Started With Video Games (Or Maybe Religion?) But Will Define Media This Decade

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Photo by Ian Schneider on Unsplash

Watching a half dozen French Resistance soldiers standing around debating whether Taco Bell is “authentic” teaches you some things. First, that most people have no idea what real Mexican food tastes like. Second, that community is the most powerful retention mechanism available to game developers, because you see, these “soldiers” were players in an online WWII multiplayer simulation. While the chance to shoot some virtual Nazis was likely the original motivation to sign-up, it was the presence of other people which brought them back each day (and bill their credit card $12.95 each month). As I looked around for more examples of this I found that the introduction of connectivity to gaming (hello internet!) had really emphasized how much play was about community. Whether the MMORPG guilds hanging out between dungeon raids, or casual sites like Yahoo Games where the checkers, backgammon, and so on were really just something to do while you text chatted, there were numerous examples of people talking more and more about how the game was a ‘third place’ for them.

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Second Life inhabitants, just hanging out

Working on the virtual world Second Life at the time I had the proverbial “front row seat” to what online interaction could look like down in the future. It was, or rather is, a fully user-constructed shared virtual world. Think Minecraft but like 100x less successful! Although to be fair, (i) Second Life is still around and profitable and (ii) many of the design choices we made were quite influential on later products. Anyhow, we over-indexed on the community and left the content largely up to the inhabitant which was only appealing to a limited number of passionate users (about half a million). I spent about three years as part of that team and the notion of “staying for the community” lodged itself deep in my cranial matter. Then my time working on AdSense and YouTube for nearly a decade gave me other vantage points from which to see where eyeballs and dollars traveled in media.

If Second Life was 20 years ago, what’s happening today? Over the last year I’ve started paying more indie creators directly for their work — heavily biased towards podcasts and newsletters/blogs. The other night I was wondering which ones I’d likely still be subscribing to a year or two from now. The “absolutely yes” category was dominated by creators who had branched beyond their initial piece of content and created some persistent space for the community to aggregate. Most typically in Slack, Facebook, WhatsApp or Discord. What they’ve done is use their content to assemble an audience and then create a space for that audience to create content with each other — aka community. In some cases the space is an extension of the content, talking about that week’s newsletter or podcast. But the most interesting ones broaden to envelop the general common interest areas of the group. For example, Lenny Rachitsky writes a newsletter devoted to technology and product development. It’s good. But he also runs a paid-subscriber-only Slack group [Friends of Lenny’s Newsletter, partial screenshot below] that has channels for job openings, startup advice, technical talk and so on. He moves from author to convener and his newsletter subscription is auto-renew because I don’t want to lose access to the group.

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Friends of Lenny’s Newsletter

I’m of the belief that “Come for the Content, Stay for the Community” will be one of the dominating themes for media this decade. As more creators break away from companies to go subscription indie, they’ll find it to be an effective and rewarding strategy to think of ways to build ‘whole is greater than the sum of its parts’ experiences and even perhaps subscription tiers based on access to these events, community spaces and chats. A slew of platforms and apps are letting creators do this without large event staffs, logistics or the costs typically associated with physical gatherings (although getting your fans together IRL will still be a thing post-COVID).

So it’s not a question of “how many newsletters can one person pay for?” it’s “how many communities does someone want to be a part of?”

Notes and More

✍️ Other examples of content + community

Lean Luxe (business of commerce and brands) has a newsletter and Slack group

The Profile (news and bios about successful, interesting people) has a newsletter and a WhatsApp group

My Climate Journey (climate and sustainability) has a blog, a podcast and a Slack group

FinTech Today (financial technology and startups) has a newsletter and a Slack group

Culture Study (what it sounds like) has a newsletter and a weekly subscriber forum topic

2PM (commerce) has a newsletter and upsells a community of industry leaders you can join

📦 Things I’m Enjoying

Onyx Coffee, Moo Notebooks, James Vorel’s Horror Movie essays

🏗 Highlighted Homebrew Portfolio Jobs

Noyo is working on making health insurance and benefits easier for everyone via APIs and data! Hiring for many roles in SF, North Carolina or Remote.

If Your Pitch Deck Has a Competitive 2×2, I’m Going to Ask You This Question

As an early stage investor I look at A LOT of pitch decks. In the seven years since we started Homebrew there has been some evolution in this area – Docsend, videos, the occasional memo – but the lingua franca among founders and investors is still largely 10-25 slides with several expected sections. And while some of us have very strong personal reactions to certain portions (seed decks should never include an exit slide), we’re generally aware these are lowest common denominator methods of ordering and conveying thoughts in a consistent format. But there’s one common slide that I’m *always* going to offer the same question about – whether you’re building a spaceship or a shoe. If you show me a competitive 2×2, I’m going to ask you what the competitors on the slide would say about it if they were critiquing the matrix categories and their placement.

https://www.crayon.co/blog/competitive-matrix-examples

You see, I’ve never been presented one of these slides where the startup pitching isn’t in the “upper right” (canonical best) square. Sometimes alone by themselves, incumbents and adjacent startups spread elsewhere. Often with another logo or two, but with the startup in an advantaged differentiated position. Very occasionally with a simulated time lapse – ie “Pitching Startup 2020” located one place and “Pitching Startup 202X” located elsewhere, to depict how, over time, the company will move from an unassuming position to one of dominance.

So I’ll review the slide, grok what they’re basically trying to convey and ask “what would your competitors say about this slide?” It’s not meant to be a gotcha! If it was, I just kinda blew it by publishing this post. Rather it hopefully leads to an interesting conversation about how the entrepreneur sees the market. Or how articulate (and intellectually honest) they are about why they selected the two matrix attributes versus any other comparative set. When the discussion falls flat it’s often because the slide isn’t based in reality, the matrices are swerves made to enhance the startup’s position but with very little actual connection to customer needs or strategic advantage. Or it reveals a lack of understanding of the competition.

This is one of those pitch deck slides that’s similar to an iceberg — 90% of the the mass is below the surface. And if we’re going to work together for many years, it’s worth including a thoughtful understanding of your market. Otherwise you’re better off leaving it out – or just taking money from someone who will focus only on the iceberg’s tip.

Homebrew Turns Seven!

April 26th, 2013 was the day we closed Homebrew’s initial fund and we consider it our ‘birthday.’ The firm’s why and how were previous blog post topics and I won’t rehash them here, but first I want to share my 2013 Homebrew ‘premortem‘ with you.

When Satya and I started Homebrew together it was with full intention to be our ‘last career,’ what we’d be doing for the next 20 years or so. And if this *wasn’t* the case, my POV was it would be explained by one of these three reasons:

  1. I didn’t like venture
  2. Satya and I didn’t get along
  3. Satya and I weren’t good at our jobs

So where are we now, with approximately 2,500 days of evidence?

Well, turns out I don’t generically like venture *but* I do love Homebrew. That is, it’s difficult for me to imagine being part of someone else’s fund. Even with the firms I respect tremendously, I have little desire to be the third, seventh or 14th partner around their table. I like our size, our strategy and the shared, equal responsibility Satya and I have to deliver against our promises to founders, LPs and one another.

And my relationship with Satya? It’s great – the whole is greater than the sum of its parts. Partnerships are dynamic and neither of us take the harmony for granted, but I’d be very surprised if there was ever an issue between us that could cause Homebrew to dissolve prematurely.

Number Three, are we any good? There’s a tendency to pronounce victory prematurely in our industry. Here’s how I define GOOD in venture: multiple consecutive funds where you’ve beaten your benchmarks while employing a repeatable strategy. By that measure it’s too early for me to answer but we’ve gotten off to a nice start. I’m confident that founders and coinvestors trust us. The founder feedback surveys we run every other year via a 3rd party give us positive indications that we’re living up to expectations (and of course, always a few things we could do better). Entrepreneurs are our customers and they keep us in business.

We’re investing out of our third fund now (which should take us to 2022) and have a solid group of institutional LPs backing us. Our first fund has already returned over its original principal to investors and we’re fortunate to have quite a bit of value still on paper (which we never assume means anything until it’s liquid). So by my own criteria, I’m not yet ready to say we’re “good” — won’t know that until mid-decade – but I can say we’re “not bad.”

Some of you know I have the Homebrew logo tattooed on my right shoulder. I did this to capture the creation of something meaningful. Thank you to Satya, our team, the companies we’ve backed, the coinvestors who work with us and our partner LPs for being the meaning behind the ink.

(Part 2 of this post will be responding to my AMA tweet and I’ll try to get it out within next few days. thanks for patience)