Read more about how we’re thinking and where we’re investing here.

<p dir="ltr">It was my first day at Version One when I realized that finding “<a href="https://www.versionone.vc/the-only-2-ways-to-build-a-100-million-business/">VC-fundable</a>” startups would not be easy.  Aileen Lee, founder of Cowboy Ventures, posted a <a href="http://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/">brilliant analysis</a> on why VCs have to look for billion dollar companies (“unicorns”) to deliver acceptable returns, and how rare it is to invest in one: “The odds are somewhere between catching a foul ball at an MLB game and being struck by lightning in one’s lifetime.”</p> <p dir="ltr">However, despite these kinds of odds, I’ve learned there are several things we can do to improve our chances of finding the elusive unicorns:</p> <p dir="ltr"><strong>1.  Data helps filter through the noise</strong>.</p> <p dir="ltr">With nearly 30,000 startups on <a href="https://angel.co/">AngelList</a>, there’s a lot to sort through. Nowadays, we can learn virtually everything about a company online, from its tagline to founder backgrounds, fundraising history, current investors, and social media traction. However, while data is ubiquitous and free for the most part, it is also fragmented, inconsistent, and seemingly disparate. This makes it laboriously difficult to identify rising stars and make comparisons within a specific vertical.</p> <p dir="ltr">Fortunately, web apps like <a href="http://mattermark.com/">Mattermark</a>, <a href="https://www.datafox.co/">DataFox</a>, and <a href="http://pitchbook.com/">PitchBook</a> wrangle, clean and organize the data so that we can focus on analyzing it. We can whittle down those 30,000 companies to a more manageable number by filtering for business models, regions, state, co-investors, Twitter mentions, Facebook likes, LinkedIn connections, iTunes downloads, unique website visitors, and/or other criteria that align with our investment thesis.</p> <p dir="ltr"><strong>2.  Be thesis-driven</strong>.</p> <p dir="ltr">We are often asked what industries we invest in, but it is more important to have <a href="https://www.versionone.vc/key-investment-themes/">theses</a> on business models that serve as strong filters. At Version One, we have 6 investment themes (and more to come - stay tuned):</p> <ul> <li><em>Vertically integrated commerce</em>.  Controlling the entire supply chain brings unique product lines directly to the consumer at lower prices and better margins.</li> <li><em>Vertical SaaS</em>.  This approach helps capture the market more quickly with lower CAC and capital requirements.</li> <li><em>Online education</em>.  Mobile and social product experiences are making learning more affordable, efficient, engaging and effective.</li> <li><em>Hardware renaissance</em>.  Numerous innovations (e.g. Raspberry Pi, Arduino, etc.) are making it easier to develop hardware products.  We are interested in platforms that power this space.</li> <li><em>Mobile marketplaces</em>.  The ubiquity of mobile makes it quicker and cheaper to connect buyers and sellers.</li> <li><em>B2B marketplaces</em>.  There has been a lot of focus on B2C marketplaces, but there are still tremendous opportunities left in the B2B space.</li> </ul> <strong>3.  Manage your time wisely</strong>. We challenge ourselves to think about tools that we can use to organize and manage our meetings, events, pipeline and readings.  To reduce redundancy in deal flow, for instance, we collaborate online as much as possible with web apps like <a href="https://www.relateiq.com/">RelateIQ</a>.  To consume content quickly, I am a power <a href="http://cloud.feedly.com/">Feedly</a> user and <a href="https://twitter.com/ATKingyens">Twitter</a> discoverer. <strong>4.  Be kind and generous.</strong> When most of your time involves working with others, perhaps the most important thing you can do is build genuine relationships.  Because every meeting is a learning opportunity, I make the effort to thank others for their time by being generous with my own.  With entrepreneurs, I try to provide thoughtful feedback, always remembering that they are hardworking individuals with the courage to build a company.  With colleagues, I take note of their interests and share articles or startups with them. Also, in a world dependent on introductions, I often thank those who make them on my behalf.  For example, in addition to writing the common email line, “Thanks for the intro to Cassidy, David (moving you to bcc)”, I follow up with the “Davids” after meeting the “Cassidys” with notes like “Hi, David.  Thank you for connecting me with Cassidy.  I learned about x, y, and z from her.”  This is a tangible display of appreciation that helps keep me in mind for future connections and deals. Since writing my blog post on “<a href="https://www.versionone.vc/why-venture-capital-is-the-perfect-fit-for-me/">Why VC is a perfect fit for me</a>” on my first day, I have enjoyed every moment of this work.  I owe this to everyone who has contributed to my learning.  Thank you.  Now to get back to looking for unicorns...

Last week, I attended a fascinating talk about Customer Obsession given by Kim Rachmeler at version one’s portfolio company, <a href="https://frontdeskhq.com/">Frontdesk</a>. Kim spent 10 years at <a class="zem_slink" title="Amazon.com" href="http://www.amazon.com/" rel="homepage">Amazon.com</a>, where she served as VP of Worldwide Customer Service, CIO International, among several other critical roles. While it’s no secret that Amazon.com is a customer-centric company, Kim shared a few interesting insights into the role of customer service at Amazon. In particular, I took away three key points: 1. Empower customer service to do whatever is best for the customer: Customer service is a company’s direct link to the customer, yet in many organizations, customer service is positioned as a “reactive” department – just there to field queries and complaints. At Amazon.com, customer service has the ability to take a product out of catalogue if they see it doesn’t meet customer expectations. The merchandising manager then needs to fix the product before it can be returned to the catalogue. 2. Focus on a simple measure of customer service quality: Amazon.com includes the question “Was this answer helpful?” at the end of every email that gets sent out. This question focuses the entire team on a single, one-dimensional metric. And the simplicity of the question means that more customers are likely to answer, providing feedback from more customers than trying to get responses from a lengthy survey. 3. Drive customer service into the whole company: At <a class="zem_slink" title="AbeBooks" href="http://www.abebooks.com" rel="homepage">AbeBooks</a>, we had everybody work in customer service from time to time and Amazon.com has a similar policy (although given the sheer size of Amazon, they need to limit the program to just managers). Having everyone wear the customer service hat accomplishes two things: 1) Participants get reconnected to customers and actual customer needs and 2) Managers view customer service as an important source of knowledge about customers. In a customer obsessed organization, customer service isn’t viewed as a cost center or simply measured on a P&amp;L report. Customers are valuable assets, and each interaction is an opportunity to improve not only that relationship, but improve your product, processes, and company mission.

If we look back ten years, the venture world was quite different. Investors weren’t too keen on investing out of town. And given the fact that the majority of top investors were congregated around Silicon Valley, many entrepreneurs felt compelled to move to the valley to start their business. It was much harder for a “remote” company in the Mid West, Europe, or Canada to draw any attention to themselves. A recent <a href="http://business.financialpost.com/2013/10/21/how-the-internet-changed-the-venture-capital-landscape-albert-wenger/">interview</a> with <a class="zem_slink" title="Union Square Ventures" href="http://unionsquareventures.com/" rel="homepage">Union Square Ventures</a>’ <a class="zem_slink" title="Albert" href="http://www.continuations.com" rel="homepage">Albert Wenger</a> reminded me how much things have changed in the past years: <blockquote> I’m less interested in the regional differences than I am in the fact that it’s now possible to build very large, global businesses from anywhere in the world…The Internet is global. Geography is no longer the destiny it used to be.</blockquote> And what is true for start-ups is also true for venture capital firms. The Internet has disrupted traditional geographic barriers for venture capital in the same way and world-class investors are emerging outside of Silicon Valley. <i>Look global and local</i> What does this new dynamic mean for today’s start-up seeking funding? In short, you’re going to want to look for the best funding partner (or collection of partners) possible, rather than just focusing locally. Many firms have developed specific areas of focus and these type of investors can be extremely helpful in strategic matters. For example, NYC-based Union Square Ventures has built up the most experience around "large networks of engaged users"; Berlin-based <a href="http://www.pointninecap.com/">Point Nine Capital</a> is one of the strongest early-stage SaaS investors; and version one ventures probably has more marketplace investments than most seed funds. <a href="http://www.avc.com/a_vc/2009/11/thematic-vs-thesis-driven-investing.html">Thesis-driven investors</a>, like USV or version one, can be instrumental in helping you navigate questions like product roadmap or fundraising because they work with similar start-ups in your space and really understand the area. Likewise, local investors are usually better positioned to provide more hands-on help. One of the biggest advantages here is in hiring: you can pull from their local network and local investors can even interview key hires in person. At the end of the day, you’ll want to find the best partner(s) that meets your specific needs and situation. In some cases, this is local; in others, it’s a remote expert; or a mix of both. One final word of caution: if you’re going to go with out-of-town investors, you’ll want to see that they have already made investments outside of their own location, so you know they can communicate and operate well virtually (and are willing to travel to their portfolio companies). In other words, you don’t want to be the trial run for a remote investment. N.B.: <a href="http://angel.co">AngelList</a> is a great way to identify investors that might be a good fit for you but it is probably not yet the best way to pitch and close them. <a href="https://www.versionone.vc/best-way-approach-investors-four-tips/">Getting warm introduction from a trusted source</a> still has a much higher likelyhood for conversion that simply sending messages on AngelList. &nbsp; <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://business.financialpost.com/2013/10/21/how-the-internet-changed-the-venture-capital-landscape-albert-wenger/">How the Internet changed the venture capital landscape: Albert Wenger</a> (business.financialpost.com)</li> <li class="zemanta-article-ul-li"><a href="http://venturevillage.eu/usv-the-football-app">Union Square Ventures is back in Berlin: $7m Series B for THE Football App</a> (venturevillage.eu)</li> </ul>

At any stage of a start-up’s life, there are dozens, if not hundreds, of different directions to take. In the early phases, you need to pick the right product direction and find your product-market fit. Later, you may wonder which marketing channels will work at scale and which ones won’t. Since you never want to approach each crossroad blindly, the key is to continually test out the options. Success is often defined by how well you hone these experiments and learn as an organization. What separates great start-ups from the rest is how many experiments they can run at the same time, and how effective each is experiment is. <strong>Building out your test</strong> Approaching your experiment is not that much different than creating an A/B test – although you’re testing for a much bigger matter than tweaking the font and image choices on a landing page. Any experiment needs to be well planned, grounded in a specific hypothesis and potential outcomes. Follow these steps to create your test: 1. Define the problem. <i>What are you trying to fix or improve?</i> 2. Define potential solutions. <i>What are all the different possibilities that could solve the problem?</i> 3. Define potential outcomes. <i>What do you expect will result from your solution? What’s the best case scenario? The worst?</i> 4. Run the experiment. 5. Analyze the results. 6. Double down on what worked, drop whatever didn’t. If the results were inconclusive, run another experiment. For example: Let’s say you want to figure out if paid search marketing can help you scale your business profitably. <span style="text-decoration: underline;">Wrong approach</span>: You might be tempted to dive right in…start small by investing $50/day on <a class="zem_slink" title="Google" href="http://https://www.google.com" rel="homepage">Google</a> to buy a few keywords and look at the results over the next few months. This strategy won’t work for a few reasons. One, $50/day is too small an amount to derive any meaningful conclusion at scale. Second, it’s far too general: there’s no defined timeline and no defined outcome. <span style="text-decoration: underline;">Right approach</span>: Follow the steps above to fully define all aspects upfront: Define a meaningful budget (i.e. $500/day); define a specific timeline (i.e. one month); define the outcome (i.e. need to have a CAC of $50, otherwise this won’t be a profitable acquisition channel); and define different solutions (i.e. bid on general search terms vs. long-tail keywords). Too many start-ups fall into the pitfall of running experiments for the sake of running them, and then never actually learn anything since the parameters were too fuzzy. Drive your activities toward reaching tangible learning milestones…as many as possible, as fast as possible.

I recently spoke with a founder and CEO of a start-up that had just crossed the 200-employee milestone. Like so many others lucky enough to reach that level, he was complaining about how progress was coming to a halt as the organization grew and became more complex. I myself experienced this as COO at <a class="zem_slink" title="AbeBooks" href="http://www.abebooks.com" rel="homepage">AbeBooks</a>. It’s a cruel irony in business: the more people you add, the slower you get. To help overcome this scale stagnation, I have three pieces of advice: <b>1. Overinvest in your management team</b> An ineffective employee is bad for the company, but the impact of an ineffective manager reaches across the organization, multiplied by the number of people he/she manages. For this reason, you need to hire the absolute best people you can get for managerial positions. Invest both money and time in developing their managerial skills, and have a strong employee feedback system in place to make sure you can identify and correct the “bad apples” right away. <b>2. Listen to Amazon: two-pizza teams and internal APIs</b> Few would argue that Amazon is one of the most entrepreneurial companies around and CEO <a class="zem_slink" title="Jeff Bezos" href="http://www.crunchbase.com/person/jeff-bezos" rel="crunchbase">Jeff Bezos</a> has an uncanny ability to see patterns long before others. Two of the reasons Amazon is able to keep its momentum even as a 97,000-employee giant are pizza teams and APIs… <ul> <li>“Two-pizza teams”: Bezos structured Amazon as a decentralized company where small groups can innovate on their own and be free from the inherent problems of groupthink. Company-wide, he introduced the principle of the <a href="http://www.fastcompany.com/50106/inside-mind-jeff-bezos">two-pizza team</a>. If a team can’t be fed by two pizzas, then the team is too large.</li> <li>Internal APIs: Every internal product should have an API, just as if it were developed for an external client. This decouples the speed of development between different product teams, as you can have a clean hand-off between the two.</li> </ul> The added bonus is that APIs lay the groundwork for the productization of internal tools. Bezos mandated that all IT assets be exposed as APIs. To quote a <a href="http://www.forbes.com/sites/ciocentral/2012/08/29/welcome-to-the-api-economy/">Forbes article</a>, “That single, simple declaration created an IT (and cultural) architecture that catalyzed and stoked the stunning growth of Amazon Web Services, which is thought to be a billion-dollar business unit after only a few short years of growth.” In short, small teams can run fast and innovate because of their size and the fact that they’re not reliant on the technology from other teams. <b>3. Focus your culture on speed over perfectionism</b> <a class="zem_slink" title="Facebook" href="http://https://www.facebook.com" rel="homepage">Facebook</a> has created a culture of agility with a philosophy to “move fast and break things.” <a class="zem_slink" title="Mark Zuckerberg" href="http://https://www.facebook.com/zuck" rel="homepage">Mark Zuckerberg</a> explained the company’s Hacker Way in a letter to investors included in <a href="http://www.sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm">Facebook’s filing</a>: “Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once…We have the words ‘Done is better than perfect’ painted on our walls to remind ourselves to always keep shipping.” Prioritizing speed over perfection can be a very powerful way to keep momentum up as you scale, particularly as you add layer upon layer to the organizations and require multiple signatures to get things done. One key message that can apply to any start-up is to never end a meeting without a decision (unless everyone determines that more data is needed to make that decision). If a meeting begins to succumb to groupthink and indecision, you need to ask why we can’t make a decision today instead of another day. After all, you just need to move forward. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://www.embargozone.com/2013/09/25/the-3-books-amazons-jeff-bezos-asks-his-senior-managers-to-read/">The 3 Books Amazon's Jeff Bezos Asks His Senior Managers To Read</a> (embargozone.com)</li> </ul> &nbsp;

Conventional wisdom says that web-based companies must be scalable on all levels. Start-ups should avoid any kind of manual intervention or heavy lifting to acquire, onboard or retain users… after all, users automatically flock to, sign-up to and stay with great products. However, as we’ve seen time and time again, conventional wisdom doesn’t always know best. <a href="http://paulgraham.com/ds.html">Paul Graham</a> recently noted that early phase start-ups often NEED to do things that aren’t scalable in order to gain traction. He argues that companies usually need to start recruiting manually and then as things get going, can switch over to less manual methods. <a class="zem_slink" title="Airbnb" href="http://www.airbnb.com/" rel="homepage">Airbnb</a> is a prime example – in the early days, the founders went door to door in New York to recruit new users and help existing ones improve their listings. What is true for acquiring users in the early phases might also be true for <a class="zem_slink" title="Onboarding" href="http://en.wikipedia.org/wiki/Onboarding" rel="wikipedia">onboarding</a> customers throughout the lifecycle of a SaaS company. High onboarding costs are often seen as detrimental to the long-term scalability and profitability of an enterprise business but it is worthwhile taking a second look - here are some of the advantages of investing in an extensive onboarding process: <ul> <li>Reduce churn as users better understand the depth and breadth of the product, and are therefore “hooked”</li> <li>Provide an opportunity for upselling</li> <li>Reduce future customer service incidents (since users are more familiar with the product and know how to use it from the start)</li> <li>Shorten sales cycle. For example, scheduling a demo as part of onboarding can result in a faster customer sign-up</li> </ul> If you do a good job on scaling your onboarding, all these benefits will more than make up for the additional costs. Of course, you can’t just assume that’s the case based on this post or any other blog. You should always be aware of your metrics: <ul> <li>What are the added onboarding costs? Add them to your initial customer acquisition costs to get a total CAC amount.</li> <li>What’s the change in Lifetime Value (LTV) because of a better onboarding process?</li> </ul> Understanding these metrics should give you the confidence that you’re on the right track, even if your onboarding costs seem unsustainable at first glance. In short, don’t be deterred from doing “non-scalable things” just because conventional wisdom says not to. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://sixrevisions.com/user-experience-ux/onboarding-techniques-examples/">Onboarding Techniques and Examples for Your New Users</a> (sixrevisions.com)</li> <li class="zemanta-article-ul-li"><a href="http://www.growhack.com/2013/08/20/the-best-in-user-onboarding/">The Best in User Onboarding</a> (growhack.com)</li> </ul>

A key investment thesis here at <a class="zem_slink" title="Version One Ltd" href="http://www.versionone.co.uk" rel="homepage">Version One</a> is that we like to invest in companies that “sell to many” over companies that “sell to few.” This preference isn’t necessarily due to market size, but rather the structure of the market: <i>are there only a few dozen customers that might buy your product or are there thousands, or even tens of thousands of potential customers?</i> Practically all consumer companies fall into the “sell to many” category, but what about on the enterprise side?  How do we differentiate between B2B start-ups that sell to many vs. sell to a few? <span style="text-decoration: underline;">1. “Sell to few”: Traditional enterprise sales</span> Start-ups in this category typically have a target market composed of dozens to low thousands of large (Fortune 500) companies. Selling into this market requires the traditional enterprise sales approach, comprised of a large ‘boots on the ground’ field sales team that works with key decision makers (e.g. CTO, VP of HR) in the customer organization. These are long sales cycles, often with multiple departments and stakeholders involved. And often, enhanced business services – such as custom product development or professional installation and consulting – are involved to complete the sale. Startups that succeed with this approach tend to have founders with deep connections in the industry they serve, and often previously worked for one of the large incumbents in the market. <span style="text-decoration: underline;">2. “Sell to many”: the scalable SaaS approach</span> Selling to many in the enterprise typically involves selling either to SMBs (where the owner/operator makes the decision on their own) or selling directly to end users (employees) in the organization. Yammer and <a href="http://unbounce.com/">Unbounce</a> are perfect examples of SaaS tools that are adopted directly by the end users. In these cases, employees feel a particular pain point and find a solution to address it. Based on the lower price points, these employees often pay for the product with their credit card, without asking IT for permission or assistance with implementation. These acts can often be start of a <a href="https://www.versionone.vc/can-enterprise-saas-products-be-viral/">viral growth</a> curve in the enterprise. Enterprise products that present a high-value daily utility for the people involved can have a high virality potential. The SaaS model, with its inherent low customer acquisition costs (CAC) and ease of deployment, makes it possible for companies to be successful when focusing on the SMB market, as well as <a href="http://techcrunch.com/2012/07/28/vertical-is-the-new-horizontal-how-the-cloud-makes-domain-expertise-more-valuable-in-the-enterprise/">niche verticals</a>. While traditional software monopolies needed to be “all things to all people,” cloud start-ups can focus on one area and do it extremely well. <b>Final thoughts</b> Both approaches can create large and important companies, but they require different kinds of founders and investors that understand the nuances of each approach. At Version One, we’ve identified that we’re a more effective investor when focused on the ‘selling to many’ approach. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://blogs.wsj.com/cio/2013/09/09/the-saas-manifesto-navigating-the-departmentalization-of-it/">The SaaS Manifesto: Navigating the Departmentalization of IT</a> (blogs.wsj.com)</li> <li class="zemanta-article-ul-li"><a href="http://techcrunch.com/2013/09/01/why-internet-companies-dont-buy-from-the-enterprise-kings/">Why Internet Companies Don't Buy From The Enterprise Kings</a> (techcrunch.com)</li> </ul>

Looking to sell into an industry that’s currently undergoing disruption? At first glance, it sounds like a great idea. After all, companies getting disrupted are experiencing some very real challenges and pain points; they need to adapt quickly and could be looking for that silver bullet to save them. During my time at <a href="http://www.techvibes.com/blog/boris-wertz-departs-abebookscom">AbeBooks</a>, I was working in the book industry when it was undergoing a major disruption from <a class="zem_slink" title="Amazon" href="http://amazon.com/" rel="homepage">Amazon</a>. And many entrepreneurs thought at that time that they could offer products and services to offline bookstores to compete against Amazon’s growing power. Likewise, over the past 5 years, I’ve seen dozens of start-ups trying to sell different tools and technologies to help newspaper companies keep up in an online world. However, selling into a disrupted industry rarely works for three key reasons: 1. Whenever there’s a complete disruption of the business model, it means that the underlying rules for that vertical have dramatically changed. Just adding a website to now offer books for sale will not suddenly make an offline bookstore a serious competitor to Amazon. Likewise, a recommendation engine that tries to keep readers on a specific online media site does not change the fact that most users today now use aggregators like <a class="zem_slink" title="Twitter" href="http://twitter.com" rel="homepage">Twitter</a> or <a class="zem_slink" title="Google News" href="http://news.google.com/" rel="homepage">Google News</a> to find stories from a wide range of sources. 2. A company that’s being disrupted certainly feels the pain that their business model is under attack. Yet, at the same time, they most likely also have declining revenue and profits. In other words, they don’t always have the money to invest in a new solution, no matter how promising it may be. 3. Companies that get disrupted are often disrupted for a reason: they failed to be proactive enough to changing conditions. In many cases, this means they didn’t invest enough in technology or other solutions in the first place. It’s hard for slow adopters to change their culture, so you’ll need to be prepared for long sales cycles and indecision with these customers. In short, while selling into a disrupted industry seems like a great opportunity, the reality is much harder to pull off.

When you’re on the hunt for funding, it’s natural that you want to get things moving as quickly as possible. However, identifying and approaching the right investor should be a measured process. Blasting the same quick email to a dozen investors will never work in your favor. The average investor receives hundreds of pitches each month – making your approach all the more critical. In my experience, there are four key ways to improve your chances when approaching investors: <strong>1. Get a warm introduction from a trusted source</strong> Identify the strongest “in” to the particular investor. This often means not jumping on the first person who can introduce you. The best introductions come from people who have brought good deal flows to investors in the past. Savvy entrepreneurs put in the time doing their due diligence on potential connections and then ask the strongest connector for the introduction. Speaking of referrals, you don’t want to be introduced by an investor who has passed on you. Whenever one investor gets a referral from another investor, their very first question will be “are you investing?” As the entrepreneur, you need the answer to help, not hurt, your case. The one exception to this rule is if the investor making the introduction has a completely different investment focus than your company and there’s a clear reason why he/she is not investing. <strong>2. Build a relationship over time</strong> If your network isn’t strong enough to provide a warm introduction from a strong source, you’ll need to build your own relationship with the investor over time. Interact with the investor through social media: follow them on <a class="zem_slink" title="Twitter" href="http://twitter.com" rel="homepage">Twitter</a>, read their blog and make <i>thoughtful</i> comments. However, never comment on a blog post just for the sake of getting your name out there. Only comment when you’ll be adding value and relevance to the conversation. <strong>3. Ask for advice, rather than money</strong> Most investors are not looking to write a check right away, so you should get in touch with them well before you are raising a round. Initially, you can approach an investor soliciting advice on something specific, such as feedback on your marketing &amp; sales approach, business model, or long-term product vision. Then, if it makes sense, execute on the investor’s feedback and circle back after, always showing your appreciation for their guidance. <strong>4. Be personal</strong> The most important rule is to only target investors when your company fits their specific area(s) of focus. Otherwise, you’ll be wasting your time (and theirs). Research a potential investor’s current portfolio. Read their blog posts and Twitter stream. And, when you do reach out, be specific in your communications. Just like in the job search, generic emails that could be sent to anyone are ineffective. Show how you understand each investor’s areas of interest, strategic vision, etc. <strong>Final thoughts</strong> If you choose to seek funding, remember that it takes patience, and lots of preparation. There’s rarely a shortcut to easy money, so be ready to develop your strategy and put in the time.

<p dir="ltr">If you told me a few months ago that the next chapter in my career would be in venture, I may not have believed you.  But now, it makes perfect sense.</p> <p dir="ltr">Working on my PhD was often a lonely activity.  I found myself seeking human interaction by leading every committee, captaining every team, and teaching every course that I possibly could.  Through these experiences, I discovered my passion for leadership development and championed it into University of Toronto Engineering in two ways:  a <a href="http://lot.utoronto.ca/grad/">program</a> that equips graduate students with leadership theory and practice, and what is now an <a href="http://www.lot.engineering.utoronto.ca/ilead.htm">institute</a> for leadership education in engineering – the first of its kind in Canada.</p> <p dir="ltr">This crusade was fun and absolutely rewarding, but certainly affected my academic productivity.  Fortunately, I was able to make a move to the Bay Area after getting married.  With over 4000km between me and my family and friends in Toronto, I was determined to write my thesis without distractions.</p> <p dir="ltr">And I did!  With an interest in quantifying qualitative factors, I proved bankruptcy prediction models are more accurate when variables reflecting managerial decisions are included with financial data.  I also learned how to draw actionable insights:  to not just focus on the numbers (i.e. output), but to address the cause of a problem (i.e. input and process) in order to offer tangible targets for improvement.  Overall, I gained a great appreciation for data science.</p> <p dir="ltr">With high enthusiasm after graduate school, I partnered with the founder of <a href="http://insightdatascience.com/">Insight Data Science</a>, and together, we launched a training program that places PhDs as data scientists at the top tech firms in the Bay Area.  Running and growing a company was an incredible experience, but as the PhDs ramped up on their math and programming skills through the data projects that they worked on during their training, I felt the urge to be a nerd again.  I was inspired by the ability to create products from openly accessible datasets and open source tools, and how this can empower anyone, located anywhere, at anytime, to make a difference.</p> I left Insight to search for opportunities to work at the intersection of data science, people development and entrepreneurship.  Along the way, I met Boris and knew that joining Version One would be the best move forward.  Today is my first day, and I’m very excited about identifying up-and-coming startups with a data-driven approach, interacting with and supporting portfolio companies, and working on a small team where I can make the greatest impact in a rapidly changing world. Above all, I’m looking forward to learning from the brightest minds while pursuing the things I’m most passionate about. P.S. Follow me on <a href="https://twitter.com/ATKingyens">Twitter</a>, connect with me on <a href="http://www.linkedin.com/pub/angela-tran-kingyens/31/621/382">LinkedIn</a>, or find me on the field playing Ultimate Frisbee in <a href="http://www.meetup.com/MoVi-Disc/">Palo Alto</a> and <a href="http://npultimate.herokuapp.com/">San Jose</a>. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="https://www.versionone.vc/introducing-version-ones-new-analyst-angela-kingyens/">Introducing Version One's new analyst: Angela Tran Kingyens</a> (version1v.wpengine.com)</li> </ul>

At the recent <a href="http://techcrunch.com/2013/08/18/grow-vancouver-2013/">GROW Conference</a>, I caught up <a href="https://twitter.com/anulman">Aidan Nulman</a> of <a href="http://fleetbit.com">Fleetbit</a>. We were talking about one of Version One’s portfolio companies…<a href="http://www.talentbuddy.co/">Talentbuddy</a>. If you’re not familiar with Talentbuddy, it’s a platform where programmers can post and solve programming challenges, covering all different areas and difficulty levels. It’s exercise for a programmer’s brain. During our discussion, Aidan reminded me how Steve Jobs <a href="http://www.brainpickings.org/index.php/2011/12/21/steve-jobs-bicycle-for-the-mind-1990/">once described computers as the bicycles of the mind</a>, referencing a study that measured the efficiency of locomotion. On our own, humans are way down on the totem pole compared to others in the animal kingdom when it comes to efficiency of locomotion. However, put a human on a bicycle and he or she is the most efficient creature out there. Jobs’ point was that we’re tool builders. According to him, the computer is the most remarkable tool we’ve ever come up with and “it’s the equivalent of a bicycle for our minds.” Aidan took this comparison one step farther, saying: “Minds, like bicycles achieve massive efficiency gains as you ascend to higher gears. [At the same time], impactful education products seem to come from a focus on either adding an ever-higher gear, or on easing the transition to the next-highest gear.” And that perfectly sums up the future of education, learning, and the Internet. The Internet is making it easier and easier for people to find just the right gear. Through the Internet, we will have more gears available than ever before; we will have higher gears available than most people ever had to access to; and people and platforms will help us know when it’s time to switch from one gear to another. It is exciting times in online education.

It has not been a great couple of weeks for the Toronto-Waterloo area as BlackBerry, the big anchor tech company of that region, is struggling with its turn-around and just put itself up for sale. But where a giant tech company struggles, one of the most exciting startup ecosystem in North-America has emerged over the past 5 years: <a href="http://500px.com">500px</a>, <a href="http://www.achievers.com">Achievers</a>, <a href="http://www.desire2learn.com">Desire to Learn</a>, <a class="zem_slink" title="FreshBooks" href="http://www.freshbooks.com" rel="homepage">FreshBooks</a>, <a href="http://kik.com">Kik</a>, <a href="http://www.thalmic.com">Thalmic Labs</a>, <a href="http://www.tophat.com">Top Hat</a>, <a href="http://www.tulipretail.com">Tulip Retail</a>, <a href="http://www.upverter.com">Upverter</a>, <a href="http://www.vidyard.com">Vidyard</a>, <a class="zem_slink" title="Wattpad" href="http://www.wattpad.com/" rel="homepage">Wattpad</a>, and <a href="http://well.ca">Well.ca</a> are just some of the thriving start-ups in that area. Three years ago, I didn’t have a single investment in Toronto. Today, I have four: <a href="https://tophat.com/">Top Hat</a>, <a href="https://upverter.com/">Upverter</a>, <a href="http://www.wattpad.com/">Wattpad</a> and one yet-to-be-announced. In fact, Toronto is now the most important geographical market for version one ventures. Top tier U.S. funds are beginning to take notice of this area now too.  Whenever I talk to NYC- or Valley-based investors these days, they all want to discuss what’s happening in Toronto and most have made investments in a Toronto or Waterloo startup. What’s driving all these activity in the area? It’s people. The Toronto-Waterloo cluster has an incredible talent pool. First, the <a class="zem_slink" title="University of Waterloo" href="http://maps.google.com/maps?ll=43.4705555556,-80.5472222222&amp;spn=0.01,0.01&amp;q=43.4705555556,-80.5472222222 (University%20of%20Waterloo)&amp;t=h" rel="geolocation">University of Waterloo</a> (ranked among the top 50 engineering schools worldwide) has been churning out talented engineers that have been highly prized in Silicon Valley and other tech hotbeds. The University is well known for embracing innovation, featuring cutting edge research in quantum physics and nanotechnology. In addition to top notch engineers, the area has a great number of high tech senior marketing and sales professionals that can be recruited from larger tech players in the area like BlackBerry, <a class="zem_slink" title="Eloqua" href="http://www.eloqua.com/" rel="homepage">Eloqua</a>, and Kobo among others. The continued downsizing at BlackBerry has released a lot of talent into the local tech community. It’s an exciting time to be participating in the area, whether as a startup or investor. Tech hubs like New York and Los Angeles may be getting most of the media coverage as alternatives to the Valley, but attention is starting to move northward. This is the time for Toronto startups. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://techcrunch.com/2013/07/08/canadas-growing-tech-startup-hub-in-kitchener-waterloo-to-be-profiled-in-new-documentary/">Canada's Growing Tech Startup Hub In Kitchener-Waterloo To Be Profiled In New Documentary</a> (techcrunch.com)</li> <li class="zemanta-article-ul-li"><a href="http://www.betakit.com/jack-dorsey-to-speak-in-waterloo-and-toronto-on-september-19th/">Jack Dorsey to speak in Waterloo and Toronto on September 19th</a> (betakit.com)</li> <li class="zemanta-article-ul-li"><a href="http://www.theglobeandmail.com/report-on-business/waterloos-tech-industry-moving-on/article13719157/?cmpid=rss1">Waterloo's tech industry moving on despite BlackBerry upheaval</a> (theglobeandmail.com)</li> </ul>

Are you focused on new sales or bringing in loyal, repeat customers? Whenever a business is completely dependent on new customers, it’s vulnerable. Not only are customer acquisition costs high, but new customers are just as likely to turn to any new competitor that enters the market. The better a company is at turning one-time customers into repeat business, the more successful they will be in the long-term. Many startups already understand this, but aren’t quite sure how to make it happen. For most businesses, there’s often a single point in the customer engagement lifecycle where there’s a higher likelihood that a one-off purchase will turn into a loyal customer. This is what I call reaching the ‘engagement threshold.’ I was first introduced to the concept of an engagement threshold from <a class="zem_slink" title="eBay" href="http://ebay.com" rel="homepage">eBay</a> years ago. The online marketplace had discovered that a first-time buyer who makes a second purchase in another category within two weeks of their initial purchase is 70-80% likely to become a repeat buyer in the future. As a result, eBay focuses considerable energy to re-activate their first-time buyers within those first two weeks. Likewise, I once heard that new <a class="zem_slink" title="Twitter" href="http://twitter.com" rel="homepage">Twitter</a> users need to follow at least 7-8 relevant people before they end up “adopting” the service. That’s why Twitter’s “Who to Follow” feature actively suggests people/accounts you might want to follow and the service is particularly eager to get new users to follow others. Every product will have its own version of this threshold point when a one-off user becomes a loyal customer. For enterprise software, it’s the moment where the software becomes so useful that it becomes entrenched in the user’s daily workflow. It’s crucial for startups to understand where this threshold point is for their business and then focus extensive energy and resources on crafting the right user experience at that point in time to guide users across the threshold. When done right, payback will be rapid and there’s nothing more valuable than a lifetime customer.

People say that hindsight is 20/20. After working knee-deep in the trenches for a year or two, you gain a better appreciation of where to focus, what to let go, and how you can do things (or should have done things) better. There’s no shortage of advice out there for startup founders. But since entrepreneurs are usually the best qualified to give fellow entrepreneurs advice on how to deal with the challenges of the job, I’ve asked several portfolio founders to share the invaluable lessons learned from their own journeys. What follows below is a snapshot of insight and advice from these great individuals. I’ve divided their thoughts by topic: company focus, scaling the organization, firing, metrics, diving deep as a CEO, and listening to advice. Enjoy, and feel free to continue the conversation in the comments area… &nbsp; <strong>On product/company focus:</strong> “One of the things I've learned is that as an early stage start-up, you have to do only one thing well and one thing that connects with the users. There is no need to build something that will overtake the world right away. The vision has to be there, but to get started you only need to get one thing right.” - Ethan Song, <a href="http://www.frankandoak.com">Frank &amp; Oak</a> &nbsp; “Don't obsess over competitors. In the early days we used to panic when someone popped up with a similar offering. However, we can't be everything to everyone and others will come in to pick up the pieces of the market that you are not addressing (or not addressing well). Rather than worry about this, obsess over your customers and stay focused on addressing your most profitable growing customer segments.” - Rick Perreault, <a href="http://unbounce.com/">Unbounce</a> &nbsp; <strong>On scaling the organization:</strong> “As we scale, I've realized how important it is to go from a founders led company towards a management led company by bringing the right guys on board. That’s where hiring guys that are smarter and more experienced than I am has made a huge difference.” - Ethan Song, <a href="http://www.frankandoak.com">Frank &amp; Oak</a> &nbsp; “You probably need to hire your Director / VP-level executive team members much earlier than you think. As the CEO, you are the least scalable part of your company, and if you're in rapid-growth mode you'll find your time will rapidly evaporate as your growing team seeks your input and advice on key decisions. So, hire excellent lieutenants that you can trust as early as possible, and trust them to execute. Hire the best people you can afford in these roles, as you need to trust them to run with and execute on their mandate. Focus on high-level goals and vision, and trust your team to execute.” -        Jack Newton, <a href="http://www.goclio.com/">Clio</a> &nbsp; “Building a team and keeping the entire team motivated and aligned towards the vision is also much harder than it seemed. I wished that I had put more focus on this earlier on.” - Ethan Song, <a href="http://www.frankandoak.com">Frank &amp; Oak</a> &nbsp; <strong>On metrics</strong> “I wish I had understood the importance of reliable business metrics earlier on (and I don't mean Google analytics). We were in business nearly 18 months before we realized that we were losing money on one customer price plan.” - Rick Perreault, <a href="http://unbounce.com/">Unbounce</a> &nbsp; <strong>On firing</strong> “You may find that you've made a bad hire, and you'll know it in your gut just a few weeks or months into their time with your company. First time CEOs (and managers in general) are much too reticent to part ways with bad hires, and err on the side of giving the new recruit too many chances to improve or change. I've found you rarely, if ever, see the turnaround you're looking for - you're much further ahead making a quick decision if it's not working out, and part ways.” - Jack Newton, <a href="http://www.goclio.com/">Clio</a> &nbsp; <strong>On diving deep</strong> “You don’t get to deep dive on things as a CEO, but you have to do everything to the right amount of depth.” - Kyle Vucko, <a href="http://www.indochino.com/">Indochino</a> &nbsp; “The most difficult balance to strike as CEO is deciding what level you need to be involved in various decisions - not micromanaging (because you can't scale), but not completely abstracting yourself from key aspects of your business, or putting blind trust in your executives. As CEO, you need to deeply understand every area of your business: sales, accounting/finance, support, product, marketing, etc. You simply can't afford to have any ‘black boxes’ in your org chart.” - Jack Newton, <a href="http://www.goclio.com/">Clio</a> &nbsp; <strong>On listening to advice</strong> “You will be most successful if you lead from a place of self.  Everyone has opinions on what you need to do, where to focus, what to hire for, how to approach tough decisions, how much/little info to share, etc. Their opinions are generally true, but you have to put your unique spin on it. The ‘what’ can be learned from others; the ‘how’ is unique to you and must be honed and honoured.” - Kyle Vucko, <a href="http://www.indochino.com/">Indochino</a> &nbsp;

I recently turned 40, which many consider to be a pretty significant milestone. Entering a new decade of life sparked a few reflective moments where I thought about what truly matters and what I’ve learned over the years, both in my professional and personal life. To that end, here are seven key life lessons I’ve learned over my first 40 years. 1. <b>Always have options</b>: The best decisions are made when you feel that you have options. Never get too dependent on anything (be it a specific job, project, or idea) to the point where you feel like it’s your only path or opportunity. 2. <b>Find your passion: </b>You will only be successful in something that you are truly passionate about. If you haven’t found your passion yet, keep searching. It is worthwhile to find the one thing that you truly care about. 3. <b>Avoid the assholes:</b> Life is too short to spend time with people that show no respect to fellow human beings. 4. <b>Don’t look for silver bullets: </b>Success is ultimately the result of many small steps over a long period of time. If you believe in silver bullets, you should play the lottery. 5. <b>History is underrated: </b>History can teach us a great deal about the future, but we are often too lazy to go back and understand what happened in the past. 6. <b>Spend your money on experiences, not stuff</b>: Buying a new product will create a short burst of excitement and happiness. However, investing in an experience will remain with your forever. 7. <b>It’s your family and friends that truly matter: </b>You need a few great friends that you can truly rely upon. Choose them carefully and keep them for a long time. And, the most important life decision you’ll ever make is who to marry. Believe me, there can be no compromises on this decision…

Every venture capital firm narrows its investment focus one way or another…perhaps by geography, sector, and/or stage. In some cases, it’s the result of conscious planning; in other cases it’s a natural evolution as a fund starts making investments. For example, at version one ventures, we’re focused on early-stage (seed and Series A) opportunities in e-commerce, SaaS, and marketplaces/platforms across North America. Even that categorization covers a rather large swath of today’s start-ups, and it was only natural that this broader focus was narrowed down to several particularly strong opportunities and areas of interest. Looking back at the past 18 months of version one’s activities, five key themes have emerged: 1. <i>Vertically integrated commerce</i> (investments: <a href="http://www.julep.com">Julep</a>, <a href="http://www.frankandoak.com">Frank &amp; Oak</a>): Last September, I wrote an <a href="http://techcrunch.com/2012/09/29/the-next-big-e-commerce-wave-vertically-integrated-commerce/">article for TechCrunch</a> outlining why vertically integrated retailers represent the next wave in e-commerce. By controlling the entire supply chain, these companies bring products directly to consumers from the factory without the bloat of the traditional retailer. This translates into high-quality products (whether eyeglasses or t-shirts) at significantly lower prices and better margins. In addition, a unique product lines means no competing with Amazon. 2. <i>Vertical SaaS</i> (investments: <a href="http://www.frontdeskhq.com">Frontdesk</a>, <a href="http://www.getjobber.com">Jobber</a>): In the new era of enterprise software, the winners will be purpose-built, vertically sliced tools. Why? The <a href="http://techcrunch.com/2013/03/23/narrow-focus-is-helping-verticals-win-enterprise-software-but-it-challenges-remain/">vertical approach</a> helps companies capture market share more quickly than if they were trying to build out a broad, all-things-to-all-people solution. It also means lower customer acquisition costs and lower capital requirements. 3. <i>Online education </i>(investments: <a href="http://www.tophat.com">Top Hat</a>, <a href="http://www.talentbuddy.co">Talentbuddy</a>): There’s a big opportunity to disrupt the current education market. Mobile and social product experiences are making learning more affordable, efficient, engaging, and effective for all involved. 4. <i>The hardware renaissance </i>(investments: <a href="http://www.upverter.com">Upverter</a>, <a href="http://www.tindie.com">Tindie</a>): Hardware start-ups have long taken a back seat to software, but today it seems that everybody is talking about the Maker Movement. Numerous innovations (like <a href="http://arduino.cc/en/Main/Robot">Arduino Robot Kit</a>, <a href="http://www.udoo.org/">UDOO</a>, and <a href="http://www.sparkdevices.com/">Spark Core</a><span style="text-decoration: underline;">)</span> are making it easier than ever to develop hardware. Today an entrepreneur can walk into a VC meeting with a prototype from a 3D printer and proven market interest on <a class="zem_slink" title="Kickstarter" href="http://www.kickstarter.com" rel="homepage">Kickstarter</a>. While version one hasn’t directly invested in a hardware start-up, we’re focusing on the platforms that are powering this hardware revolution. 5. <i>Mobile marketplaces </i>(investments: <a href="http://www.clarity.fm">Clarity</a>, <a href="http://www.instacanv.as">Instacanvas</a>, and one soon-to-be-announced investment): The near ubiquity of mobile is reshaping the way marketplaces are created and operated. As <a href="http://techcrunch.com/2012/09/27/mobiles-hidden-opportunity-marketplaces/">Matt Cohler noted</a>, mobile devices make it “vastly quicker and cheaper than ever before to ‘wire up’ both sides of a market.” I am still excited about the potential of all five themes, but it’s inevitable that in the coming year, some areas will evolve and new ones will be added.  Stay tuned…

In an effort to spur on their local economies, many provincial and city officials have been wondering what it takes to create the next Silicon Valley. From cities in Canada, the U.S. and worldwide, we’ve seen the emergence of numerous policies all designed to encourage start-up activity. There have been taxpayer-sponsored VCs, mentoring programs, generous tax credits and direct subsidies, accelerators, incubators, and co-working spaces. These may all be important programs that have some effect on changing the trajectory of a local ecosystem, however they neglect one key fact: great companies are built by great entrepreneurs who succeed <i>despite</i> an imperfect ecosystem, <i>despite</i> a lack of local capital, and <i>despite</i> the absence of good mentors. In other words, great entrepreneurs make it happen in unlikely places. A prime example is how <a class="zem_slink" title="Greg Zeschuk" href="http://en.wikipedia.org/wiki/Greg_Zeschuk" rel="wikipedia">Greg Zeschuk</a> and <a href="http://en.wikipedia.org/wiki/Ray_Muzyka">Ray Muzyka</a> built <a class="zem_slink" title="BioWare" href="http://www.bioware.com/" rel="homepage">Bioware</a> in Edmonton (a city that had no gaming talent or large tech ecosystem to speak of). Bioware was later <a href="http://www.gamespot.com/news/qanda-bioware-on-the-ea-buyout-6180866">sold to Electronic Arts for $860M</a>. So does this mean that local governments are powerless when it comes to attracting special entrepreneurs like Zeschuk and Muzyka? Should they just sit back and see what happens? Not necessarily. Lately I’ve been wondering if there’s a role for a local Chief Talent Officer, whose focus is to attract the best and brightest to their cities and municipalities? For example, some of the questions for a Chief Talent Officer to consider include: <ul> <li>How can you implement (or lobby the federal government for) entrepreneur-friendly immigration policies like the <a href="http://venturebeat.com/2013/04/19/the-startup-visa-why-canada-made-it-a-priority-why-the-u-s-should-too/">Startup Visa</a>?</li> <li>How can you contribute to make the local universities best in class?</li> <li>How can you support local accelerators / incubators whose focus is to bring in talent from out of town?</li> <li>How can you brand your city / province as a desirable place to live for the creative and entrepreneurial people you are targeting?</li> <li>How can you make it as easy as possible to start a business in your city?</li> </ul> This is no easy task, as all these areas span the authority of many different institutions and organizations. I’d imagine the Chief Talent Officer would spend the bulk of his/her time persuading other people and departments to do the ‘right’ thing. Yet I’m growing increasingly convinced that this is the only lever for large-scale, long-term results. Helping an area’s local entrepreneur community is important, but that along won’t change the game or spark the next hotbed of innovation. Attracting the best and brightest from all corners of the world will. Globalization and immigration are often hot button issues, but they can be crucial to local economies. Over the coming months, I’d like to think deeper about how local municipalities can spur a tech upsurge, and welcome your thoughts as well. Stay tuned.

It’s the age-old debate among start-up circles: which is more important to the success of a start-up: the strength of the sales/distribution strategy or the quality of the product? On one end of the spectrum, many start-ups think that great products sell themselves, while the other camp argues that it’s the channel and monetization that define a company’s success. The simple answer to the question is you need both. To be successful, a stand-alone company needs a top-notch product <i>and</i> a clever distribution/sales strategy. However, there are a few nuances to add to the discussion. 1)  <i>Start-ups are generally more successful when the founders are product-driven</i>. It’s typically much easier to add sales expertise to a product-driven organization than it is to add product focus to a sales-driven start-up. Sales is more of an execution game, meaning a start-up can hire senior executives to shape and refine the sales and distribution strategy. On the other hand, a great product requires great leadership with the right product instincts. Those intangibles are usually much harder to add. 2) <i>Sales-driven companies can turn into service organizations. </i>Sales-driven companies are often focused on maximizing short-term return on investment and this mindset can shape product decisions. The natural consequence is that sales-driven companies can evolve into service companies as they are stating to build every feature that clients are asking for instead of following a long-term product vision. 3) <i>The consumerization of IT is putting more emphasis on product. </i>Historically, software and products were sold to a company’s purchasing agent and CTO. The sales cycle hinged on the ability of the vendor’s sales team to make the right contacts and manage the sales process and relationships from start to finish. Today, it’s a different story. The CTO and other management no longer serve as gatekeepers for which products are used in the organization. Products are now introduced directly to end users. This trend has a double impact (and both in the product-driven start-up’s favor): <ul> <li>Small start-ups that don’t have a large sales force can now sell their products in the enterprise.</li> <li>The enhanced role of the end user in buying decisions makes the product experience all the more important. Good products that are easy to use take hold in this environment.</li> </ul> While the sales cycle may be changing, start-ups still need to focus on their sales and distribution strategy. Products, no matter how great, usually don’t make money on their own. As a result, product-driven companies need to focus on distribution in order to succeed in the long-term.

It has been almost a year since the <a href="https://www.versionone.vc/announcing-version-one-ventures/">initial launch</a> of Version One Ventures and the first 12 months have been very <a href="https://www.versionone.vc/2012-recap-and-final-close-at-19m/">busy</a> with about a dozen Seed and Series A investments. So it is time to get some help to manage the fund and I am excited to announce that Version One is hiring an analyst. The analyst position is a two- to three-year role where you will learn about what the venture capital business is all about and get the chance to work with some <a href="https://www.versionone.vc/portfolio-type/current-portfolio/">interesting startups</a>. The primary responsibility of the analyst is to help manage the day-to-day activities of the fund, including: <ul> <li>Helping to identify new and interesting entrepreneurs and companies in the 3 focus areas of the fund (e-commerce, SaaS, marketplaces/platforms)</li> <li>Performing market research and due diligence for potential investments (interviewing customers/users, testing products and services, and/or financial modeling)</li> <li>Helping with reporting for our investors, including writing quarterly updates and preparing LP advisory board meetings</li> <li>Working with existing portfolio companies, including helping out with hiring, financial modeling, and research</li> <li>Executing projects of your own direction that help Version One and/or our portfolio companies</li> </ul> We're looking for someone who demonstrates: <ul> <li>Native understanding of the ecosystem of web and mobile products</li> <li>Strong written and oral communication skills</li> <li>Good product instincts - you get what a great web or mobile product is made of</li> <li>Strong interpersonal skills - you'll often be talking to entrepreneurs and other investors</li> <li>Good Excel modeling skills</li> <li>Ideally, prior design or programming experience or work in an investment or internet-related position</li> </ul> As Version One is investing across North-America and has portfolio companies from New York to Seattle, Los Angeles to Toronto, you should also be excited about travelling and "airbnb'ing". If you're interested in the position, please send me an email at bwertz [at] versiononeventures [dot] com. Your email should contain 2 things: First, I am looking for links that represent you. Linkedin is good but I am generally more interested to understand how you think and what you do: your Twitter account, your blog, a website you built, a project you helped. Second, I would like to get your take on 3 questions: "Why do you want to work at Version One Ventures?", "Which web and mobile products most inspire you and why?", and "What is the biggest insight you recently had about start-ups?". Please limit your answers to 2-3 sentences per question. Applications are open until Friday, June 21. The position is available immediately and is based in <a class="zem_slink" title="Vancouver" href="http://en.wikipedia.org/wiki/Vancouver" rel="wikipedia">Vancouver, B.C.</a> If you have questions, please leave them in the comments below. Looking forward to hearing from you!

<blockquote><i>The easiest path to growth and profit is up, and the most deadly attacks come from below </i></blockquote> This quote from Clayton M. Christensen's <a href="http://www.claytonchristensen.com/books/the-innovators-dilemma/">The Innovator's Dilemma</a> perfectly encapsulates how startups can find success over incumbents in their markets. Incumbents often look left, right, and above – yet sometimes they’re most vulnerable from below. The tiny market niches and startups who play there are often too small to capture an incumbent’s attention. However, it’s these small startups that begin in the long tail that have the capacity to disrupt over time. For example, <a href="http://hootsuite.com/">Hootsuite</a> started as a free Twitter tool for small/medium business and casual users; it’s now a social media dashboard serving <a class="zem_slink" title="Fortune 500" href="http://en.wikipedia.org/wiki/Fortune_500" rel="wikipedia">Fortune 500 companies</a> like Seagate and Pepsico. <a href="http://www.zendesk.com/">Zendesk</a> initially focused on tech startups and now has more than 30,000 clients including global giants like Disney and Vodafone. For startups, the message is that you should develop your business in the long tail, focusing on those customers in your market that the incumbents don’t care about. For example, <a href="http://www.goclio.com/">Clio</a>, a company in my portfolio, first focused on providing legal practice management for solo lawyers and very small firms (today, Clio is now serving firms with over 50 lawyers). Narrowing your focus to a smaller piece of the pie offers several advantages. First, customers in the long tail usually require a smaller feature set which means that you can get a MVP into the market faster. Second, you have the unique opportunity to tailor your solution for a few particular use cases… and thus make a superior solution for a certain segment of the market (one that’s much more useful than a one-size-fits-all tool from an incumbent). This will enable you to build a community of loyal, passionate customers. In addition, by focusing on selling to smaller companies in the long tail, you’ll benefit from shorter sales cycles. Smaller businesses are far more agile when it comes to purchasing and deploying a new technology than Fortune 500 companies. It would have been a much different story had Clio first tried selling a cloud-based management tool to large legal firms (which are notoriously slow to adopt anything new). As you build out your product and develop a brand in the long tail, your reputation in the market will spread. <a href="https://www.versionone.vc/can-enterprise-saas-products-be-viral/">Enterprise SaaS products can be viral</a>, as companies are tightly connected to dozens/hundreds/thousands of suppliers, customers, and partners. High utility products are shared, enabling you to extend from the long tail to win larger accounts and move up.