“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.

Want To Write More in 2019? Become My Writing Buddy!

I’m going to be throwing 30m and 60m “writing times” on a shared calendar as an experiment to see if it helps other people find time/inspiration to write, knowing that they’ll be part of a group doing the same thing. “Writing” can be anything you’d like – a blog post, letters to friends, book proposal, journaling, etc.

There are a whole bunch of features that I can think of to make this more effective, but here’s the MVP:

  1. Join this Google Group: Hunter Walk’s Writing Buddies OMG
  2. Add this Shared Calendar: Writing Buddies OMG

When you do, you’ll get notices about new writing sessions scheduled and see them pop up on your calendar like so —

I’m Pacific Time Zone but will try to spread Writing Sessions around at various times/days, but apologies in advance for the California-bias.

Depending on how this goes and whether others want to help out, I can imagine a post-MVP future involving knowing how many other people RSVP’ed for a session, group chat via Discord/Slack/other, a place for people to link to what they wrote during the session and so on. Just didn’t want to deal with abuse or trolls, etc right away and give the group a chance to gel.

Note: If you’re one of the people who signed up when I tweeted in December, I’m adding you to the group, but can only do 100/day (Google Group spam limits). If you haven’t received a Welcome Note from the Group, feel free to add yourself. Otherwise I’ll have you added by ~Wed.

If you have ideas or comments, please tweet them to me @hunterwalk

Oh, and I wrote this during our first session Sunday night 9pm Pacific 🙂

Fertility Health, It’s Not Just About Women

If you are a man and intend to procreate at any time in your life, you should get your sperm checked out. It’s non-invasive and quite easy (some might even say pleasurable). Just as women are freezing their eggs and getting a baseline on their reproductive health ahead of having a child, so too should us guys. The fact we don’t talk about this more openly and often is a disservice to our gender and perpetuates the myth/stigma of a fertility burden on women.

Let me tell you a personal story – we have a lovely daughter who was the byproduct of a successful IVF. My wife and I were trying naturally for about a year but it wasn’t working out. Not the “timing cycles and rushing home at 12:04pm to bop” trying but still, trying. So we went to our respective fertility doctors. The wife discovered she had the eggs of a woman a decade or more younger than her actual age – ie fertile as heck. I had a normal sperm count but lower than average motility (ie slow swimmers). The doc told me we could try for another year and perhaps it would work or we would be excellent candidates for IVF. And we were!

It was a great outcome but I still ask myself why I didn’t get checked out at 20 and every few years after (we conceived at 37)? If the motility issue was known at the very least I could have reduced any concern my wife had during the “year of trying” that it might be “her” issue.

So dudes, do yourself a favor. Get your reproductive health checked out in 2019 – whether you’re planning on fatherhood this year, or 10 years down the road.

Do You Search For Your Name When You Join a New Slack Group?

Slackenfreude – the joy in knowing that as a Slack group grows, the likelihood of a new member searching their name and finding they’ve been slagged on in earlier conversations reaches 99.9%

There’s increasing punditry consensus that “small group” products will be one of the beneficiaries of the backlash to public, scale social media. There’s a design constraint in these products that I’m curious about how people would approach: how does a participant make decisions around “appropriateness” of topics/comments (and privacy) if the group composition isn’t static? That’s to say, imagine you’re added to a 10-person group to chat about startups. And then you slag on a particular company in a way that you might not do publicly, but then as the group grows to 100 people in size, someone from that company joins and is pissed off at you?

Some product attributes that one would take into play to determine how they use these “smaller, private groups:”

  • Group composition and process for adding new members – is it static from point of creation, or can it change, and how?
  • Default visibility/relationships of any two members in the group – does every group member automatically have the same system-specified relationship with each other or do bidirectional relationships need to be approved
  • Discoverability, persistence of content – is old content available for new members, visible to all members?

“Solving” for this can escalate quickly into complexity that no group wants to deal with so my guess is that different spaces will have consistent, easy to understand rulesets and that users will manage their voices in these spaces accordingly.

For example, there can be products that with persistent, fully visible content to all in the group, but where no new group members can be added after initial creation. Or spaces where, as a new member, you can never see archives, only the content created from the moment you join (these systems would also need to “announce” new members in some way).

Basically I’m interested in how different designers have thought through this issue across different enterprise, consumer products.

3.5 Notes From Our Most Substantial Venture Exit So Far

BuildingConnected, a leading construction tech SaaS startup, was acquired for $275m as part of Autodesk’s push into the vertical. I strongly believe the detailed story of the company’s success is the founders’ one to tell if they choose to do so, but at the risk of excessive inside baseball, I’ll share my perspectives from the cap table.

Solid Example of Why We Picked Concentrated Seed as Our Model For Homebrew: This acquisition is our largest return thus far (on a total cash basis – Cruise Automation’s acquisition by GM beats it on multiple of return). BC sits in Homebrew I, a 20 company fund of $35m with initial investments made 2013 – 2015. We concentrate our time with companies, entering at seed stage and working with them most proactively until ~Series B – in this case that’s when I stepped off of BC’s Board into an Observer role. We tend to spend less 1:1 time with the CEO after this point but continue to lean in and do whatever we can to support the company.

Because we focus our time, we also focus our dollars, typically taking a 10-15% ownership stake during seed and then investing into subsequent rounds, which we did here into BC’s Series A (Crosslink) and Series B (Lightspeed). The combination of a modest fund size and meaningful ownership means we stay very aligned with founders for the formative years of their company and can have great outcomes along a spectrum of outcomes (you can do the math).

The biggest risk to this model of course is that you are able to find great startups and that those founders want to work with you. Power laws drive venture fund outcomes, but your fund size and ownership targets influence how outsized the outliers need to be. While we don’t set a “lower bar” on what we hope a company can achieve (Homebrew I includes three companies with $1b+ valuations – Cruise [realized], Gusto [private], Plaid [private]), it does mirror reality, where “just” a $250-500m outcome can be a fund-mover for us.

A Good Cold Email Beats a Weak Warm One: Our relationship with BuildingConnected began with a cold, inbound email. And I’ve written before about how founders can mistake an intro for a vouch, which is why a Strong Cold Email Always Beats a Warm Weak One.

So founders, please don’t let lack of existing relationships deter you from reaching out to us. Contact info is on our website.

Aligned Cap Tables Are a Godsend: Especially when the founders are considering an early acquisition, aligned cap tables are a godsend. Could an even bigger business been built here? Absolutely. But when an aggressive offer is on the table and for a variety of very legitimate reasons, the founders want to take it, our job is to help them.

Even more that just this single decision, the BuildingConnected cap table was trusting of one another and worked hard across the rounds to support the founders. That’s the way it should be! Thank you to Dave Samuel of Freestyle VC, Omar El-Ayat of Crosslink Capital and Nakul Mandan of Lightspeed Venture Partners. Also Darren Bechtel of Brick & Mortar Ventures was essential on this one.

I Can See Why VC Congrats Twitter Is Horrible: The day the deal was announced there were a lot of inbound and outbound “congrats” tweets. I’m totally guilty. Sorry.

“Generational Transition:” Old Industries Are Changing Because The Youngs Are Taking Over

Once Is Chance, Twice is Coincidence, Third Time Is Truth.

We’re fortunate enough to be working with some intriguing startups serving industries which pre-date the PC – construction, industrial maintenance, agriculture, nautical shipping & logistics. Across multiple independent conversations with these founders, one of the structural reasons they give for their success is a “generational transition” within a meaningful segment of customers.

Namely, privately-owned businesses that were in the hands of a family patriarch are now being passed down to the next generation. This group of 30-50’something men and women have smartphones in their pockets and are more eager to adopt technology than the previous owners. You don’t need to educate the market on why SaaS, sensors, machine learning and so on are good investments. Or why a spreadsheet might not be the most dynamic dashboard available to them in 2018.

Anecdotally we’re seeing an adjacent trend where, when the business isn’t handed down, it’s sold to private equity style buyers who are also very interested in technology as a cost cutting mechanism, so our companies are getting called into these situations as well.

This is all very consistent with my framework that favors problem size over market size. Is this problem large? Is this problem valuable? Is this problem urgent? Urgency catalyzed by a change in ownership structure and demographics is an interesting dynamic and one I hadn’t considered at scale until the past few years.

Some Homebrew Portfolio News

Cribbing from the Homebrew blog to just share some nice portfolio news:

“Proud to have supported this company since their earliest days” is how VCs coyly signal that they were in early before the rocketship company was off the launch pad. Well, three startups that we’re proud to have supported since their earliest days announced substantial financings recently. Yeah, we had conviction years ago. And yeah, they’re all looking like great, savvy picks. But the congrats goes to these teams, not us. From the CEOs on down, these teams have been working incredibly hard to build companies they’re proud of. Durable companies delivering real value to customers. And eventually, outcomes that will change the lives of their teams, not just their investors. Congrats to the teams at Bowery, Plaid and Weave!

Bowery – The Modern Farming Company

Raised $90m Series B

They’re Hiring (NYC/NJ)

Plaid – The Technology Layer for Financial Services

Raised $250m Series C

They’re Hiring (SF and Remote)

Weave – Patient Communication Software

Raised $37.5m Series C

They’re Hiring (Salt Lake City, UT)

NETWORKING: The Intro vs The Vouch (and why the difference matters a whole lot)

My tweets autodelete after 30 days, so when one starts a good discussion, I try to expand/archive it here. 

NETWORKING: The Intro vs The Vouch

So the “intro w/o vouch” is a double-opt in that looks something like “hey, I know you were looking to hire a BizDev lead. This guy is someone I worked with a few years back. Seemed pretty good but we’re not that close, so take a look and if you want intro, just let me know.”

The vouch version of this is more like “I strongly recommend you take a look at this gal for your BD role. Even though she might be on the junior end with regards to years of experience, she’s amazing. Worked for a friend of mine and was the star of their team – in fact, was the one behind the XYZ deal.”

Why Makes Intros At All If They’re Not Vouches?

Because they can still be mutually valuable in many contexts. I just try to tell the person looking for the intro the extent to which I can (or cannot) vouch and let the recipient know if I’m vouching or not (because I expect my vouches to be taken seriously as high signal). 

Are There Types of Intros You’ll Only Do As a Vouch?

Yes, one which comes to mind is the Investor introduction. I won’t make casual intros to investors unless I can speak to the quality of the company I’m intro’ing. I’ll also make a case-by-case judgment based on how valuable I think the intro might be to both sides and the nature of my relationship with each individual. 

I’m Asking For An Intro, How Do I Know If They’ll Vouch For Me?

You can frame it as such: “Hey, I’m looking to get introduced into XYZ because I heard her talk about how their marketing team is hiring an agency to do influencer work with them. I see you two are connected on LinkedIn. Do you know her well enough to make an intro if I forward you a note to pass on? And do you feel like you’ve got enough recent context on my work to endorse us? Thanks, much appreciated.”

Is a Vouch the Same as a Favor?

No, these are different things. For me a Favor is when I need someone to take an intro even though it might not be worth their time or ROI but it would be really meaningful to the other side of the intro. When I’m asking for a favor I’m very specific about it. I’ll also often stress when I’m *not* asking for a favor just so someone doesn’t take action on an intro request simply to please me. 

You Know, Vouching Sounds Like “Sponsorship”

Yes, I was excited to get introduced to this concept via a tweet from Lara Hogan where she links to a 2017 blog post called “What does sponsorship look like?” It’s a very good read and makes the point that most of us don’t get past mentorship when trying to support marginalized or underrepresented groups. I recommend you read it.

Vouch Or No Vouch, Should I Ever Make An Intro Without a Double Opt-In?

Fine, I Get It. Are There Any Good Blog Posts On What a Good Intro Looks Like?

Yes! Here’s one. And here’s another

A Small Change Seed Funds Can Make To Their Websites To Help Founders (and Themselves)

Here at Homebrew, we’re pretty into the idea of constant improvement. Our years of product management experience taught us that often the best insights can come from your customers. In our case customers = founders, and supporting the ones we’ve backed is our firm’s #1 priority. But you can also learn a ton from the folks you didn’t back and sometimes even from the ones you’ve never met!

What do I mean by that last point – how do we learn from people we never talked with during their fundraise? Well, we frequently diligence those deals after the fact – the startups we think we should have seen during their fundraise but for one reason or another – in order to better understand why we didn’t find each other. How are these learnings actionable? They can help direct our proactive networking – ie maybe there’s a university campus where Homebrew isn’t well-known so we try to figure out how to solve that problem. 

Given the work we’ve done understanding the patterns of seed fundraising, we wanted to share an insight to benefit our venture peers: Your Portfolio Page Is Your Thesis – Founders will often look first (and sometimes only) at your website’s portfolio page to assess whether or not you invest in their industry, business model, geography, etc. You might have detailed these ideas lovingly in a blog post or elsewhere on your site but almost all the time, your portfolio page helps teams decide if they should reach out to your or not. 

Given that more early stage startups are staying quiet about their financings (not stealth per se, just not announcing they’ve raised money), there can be a substantial lag between a firm’s investments and the display of these logos on their website, sometimes sending incomplete signals to new founders about what the fund is seeking. “Oh we love Homebrew but looked at your portfolio page and didn’t see any XYZ companies, so didn’t think you’d be interested” was something we heard from a few founders we wished would have pinged us. 

What did we do with this feedback and what do we recommended to our peers? When you make an investment, you can put a placeholder slot on your portfolio page which generally describes the company. For example, here are two examples of “placeholders” we use on our website. 

The only downside we’ve considered is whether any potential founders would see something and erroneously consider it a “competitive investment,” (since our descriptions are so general) but most folks will ask. Or once they share their startup with us, we’ll tell them we’re competitively blocked in the very small number of cases where that occurs.

Just a small thing we’ve done that could be helpful to others out there and make sure founders are finding the best funders for their startups.