Disqus - Latest Comments for bussgang

Re: Birth of An Entrepreneur

bussgang — Sat, 23 Mar 2019 17:20:21 -0000

I love this story! Somehow I ended up with both a 1978 Krugerrand AND an Apple computer after my bar mitzvah. I still have the former but not the latter!
https://uploads.disquscdn.c...

Re: Reading Memoirs

bussgang — Fri, 07 Sep 2018 14:11:17 -0000

Hey Brad - First, glad to hear you're doing better health-wise. That sounds like quite a scare and I'm glad you're on the other side. Coincidentally, I read one of Mark Epstein's other books this summer - Going to Pieces Without Falling Apart (https://amzn.to/2wP7VaE), which I loved. That led me to a book by Dr. Tara Brach - Radical Acceptance (https://amzn.to/2Cs84Ge). Anyway, thought I'd throw these two into the mix. I just ordered Advice Not Given and look forward to it. This blend of Buddhist philosophy and the wisdom that comes from being a psychotherapist is truly fascinating.

Re: New Adventures: Joining Union Square Ventures in NYC

bussgang — Sat, 21 Oct 2017 08:00:35 -0000

Spectacular news. Super excited for the impact you will make and for us to continue collaborating with you and USV.

Re: Preparing for Superintelligence: Living the Values of Humanism Today

bussgang — Sun, 13 Aug 2017 17:16:53 -0000

Read John Rawls' A Theory of Justice (https://www.amazon.com/Theo... and Michael Sandel's Justice (https://www.amazon.com/Just... and Communitarianism ()

Re: Preparing for Superintelligence: Living the Values of Humanism Today

bussgang — Sun, 13 Aug 2017 12:57:43 -0000

Albert - Have you spoken with our old philosophy prof, Michael Sandel, about your thoughts on humanism and the new era of human relations and the frameworks that govern how we treat each other? Some of your writings remind me of his Communitarianism philosophy.

Re: Boston Nerd Tour

bussgang — Sat, 12 Aug 2017 07:34:07 -0000

Spectacular, sweeping tour! I loved every entry. Thanks for taking the time to share it!

Re: Our Zero Tolerance Policy On Sexual Harassment

bussgang — Mon, 26 Jun 2017 16:32:53 -0000

This is terrific, FG. Thank you for doing this. We (the New England Venture Capital community) took a similar stance in our policy statement this morning: https://medium.com/@NewEngl...

Re: Venture Capital Funnel Shows Odds of Becoming a Unicorn Are Less than 1%

bussgang — Mon, 17 Apr 2017 10:54:14 -0000

This is a great analysis, Anand. Thanks for sharing it as you're doing entrepreneurs a great service by helping them understand the long odds to building a billion dollar company. If it were easy, everyone would be doing it!
One aspect of this analysis that is worth highlighting is that these are the companies that attract institutional, serious seed money. There are (my rough estimate based on doing this for 25 years) 100:1 companies that don't even achieve this milestone. Thus, the odds are actually 100x worse than you show if you're just at the stage of thinking of starting a company. I tell entrepreneurs that if they were to do the probabilistic-weighted expected value analysis of starting a company, they would never do it. It's empirically irrational! Thus, you better be really, really convinced your idea (and your team) is special enough to beat the odds before you embark on the journey. One of my recent, entrepreneurial HBS students came back after raising VC capital and being in the midst of building her venture and said, "Jeff - I'm kind of mad at you. You told me starting a company would be really, really hard. You lied to me. It's harder."

Re: Seeing Both Sides: The Secret Weapon to Scaling: Sales Operations

bussgang — Thu, 19 Jan 2017 08:08:40 -0000

There's definitely more energy around the function but I still find it's not well understood and the role varies widely across companies and functions. I am working on writing something in that field that I look forward to speaking more about in the coming months - stay tuned!

Re: USV 2016

bussgang — Thu, 23 Jun 2016 06:27:15 -0000

There is no question the firm is in very good hands. Albert and Andy are very special investors and people.

Re: Seeing Both Sides: Why Every Company Needs a Growth Manager

bussgang — Tue, 22 Mar 2016 07:02:29 -0000

Most of the org structures I see have the growth manager operating outside functional structures and working closely with the founder/CEO to influence actions across teams. It's a great question, Sam, and I'm planning on doing more research on org structures in the weeks ahead.

Re: Seeing Both Sides: Why Every Company Needs a Growth Manager

bussgang — Tue, 08 Mar 2016 20:55:18 -0000

Here are the folks we interviewed: John Adams/Dropbox, Pratik Agarwal/AirBnB and Remind, Brian Balfour/Hubspot, Matt Boys/Stripe, Shaun Clowes/Atlassian, John Egan/Pinterest, Barry Malinowski/Wealthfront, Mark Roberge/Hubspot, Brian Rothenberg/Eventbrite, Eric Wullenbaecker/Shift, Josh Yang/Twitter, Matt Zeigler/Double Dutch, Adelyn Zhou/NextDoor, Julie Zhou/YikYak and Nadav Benbarak/Okta was my co-author.

Re: Seeing Both Sides: Impact Entrepreneurship

bussgang — Thu, 07 Jan 2016 20:55:38 -0000

Thanks for this pointer. It is so important for the startup community to get engaged in civic affairs. I have written about this a lot and am really passionate about it, which is one of the reasons I helped start a progressive policy-focused business group to attract innovation community leaders: http://alliancebl.org/

Re: Seeing Both Sides: Impact Entrepreneurship

bussgang — Thu, 07 Jan 2016 20:53:45 -0000

Fantastic pointer - thanks for it. I wasn't aware of the program.

Re: Seeing Both Sides: Impact Entrepreneurship

bussgang — Wed, 06 Jan 2016 08:18:08 -0000

Agreed. At the risk of being controversial, I would put charter schools (e.g., KIPP, MATCH) in that arena as well.

Re: Seeing Both Sides: Analyzing Boston's Reindeer (Not Unicorns)

bussgang — Fri, 25 Dec 2015 13:38:15 -0000

All 99 members of the reindeer pipeline? You'll need to get a Mattermark subscription for that. ;-)

Re: Seeing Both Sides: Analyzing Boston's Reindeer (Not Unicorns)

bussgang — Fri, 25 Dec 2015 13:37:38 -0000

Based on my knowledge of the nine reindeer investors, I don't think that's right - nearly all of them had Boston-based VCs among the lead investors.

Re: USV Thesis 2.0

bussgang — Fri, 18 Dec 2015 16:28:12 -0000

Great framing, Andy. I love your notion of non-obvious network effects. It succinctly captures our own investment thesis and excitement around machine learning. Many observers would relegate network effect businesses to the B2C realm only but there are many case studies of B2B platforms and infrastructure businesses where subtle network effects can be very powerful. MongoDB, Codecademy and Firebase are three nice examples of companies we are in together with you where there are reasonably interesting network effects that are being exploited that were not as obvious at the beginning.

Re: What’s your TRUE customer lifetime value (LTV)? – DCF provides the answer

bussgang — Mon, 14 Dec 2015 07:16:29 -0000

As you know, entrepreneurs are perennial optimists. I recommend using 30% as the standard until the company is public. When you are dependent on the private market to raise capital, you need to be more conservative about your cost of capital and its impact.

Re: What’s your TRUE customer lifetime value (LTV)? – DCF provides the answer

bussgang — Sun, 13 Dec 2015 15:37:32 -0000

Hi David - Terrific analysis and spreadsheet. Rhymes with the post I did on "Your LTV Math is Wrong" - http://bostonvcblog.typepad.... To your question about cost of capital, I suggest start up founders use 30%. 10% is too low and results inover investment in sales and marketing before truly achieving product-market fit. IBM's cost of capital is 10%. The startups that we deal with that are most focused on the LTV vs. CAC dilemma have never been FCF positive, never mind consistently FCF for decades, and need to raise capital from VCs at a much higher cost in the form of equity dilution. The other approach is to use probabilities against the cash flows to capture the riskiness of those cash flows and calculate an expected value of cash flows. But the assumptions are too generous if you assume both 100% probability that the cash flows remain constant (startups operate in a very dynamic and competitive a market) while assuming only 10% weighted average cost of capital (raising capital is much more expensive to startups). Anyway, that's my two cents!

Re: Re-entry From Sabbatical

bussgang — Wed, 09 Dec 2015 22:07:31 -0000

Welcome back! We missed you! I saw on your goodreads list that you read Defending Jacob. The author, Bill Landay, is my brother in law and the murder takes place in the park that sits near our home in Newton. Curious whether you liked it or not?

(and congrats on Foundry Next. Brilliant idea!)

Re: Seeing Both Sides: Humility in Entrepreneurs

bussgang — Sun, 06 Dec 2015 14:39:16 -0000

Jim Collins' research would suggest no. Trump's enduring appeal is a mystery to me, frankly, Josh.

Re: Power Law And The Long Tail

bussgang — Tue, 24 Nov 2015 20:30:43 -0000

Great points, Fred, although I would suggest that there is a third way. There are many companies where patience is a virtue. Rather than force an exit on a team that is happy and engaged and chugging along, I think investors can take the approach of remaining supportive and (perhaps, realistically, more reactively than proactively) engaged and helpful along the way. I have a few good teams operating in niche markets that will never be unicorns but will be solid outcomes if I just remain patient and helpful. Forcing exits just because I want to "free up my time" isn't a good enough reason to force outcomes on the entrepreneurs.

Re: Seeing Both Sides: Your LTV Math is Wrong

bussgang — Fri, 30 Oct 2015 15:46:19 -0000

Good question, Pito. You are trying to determine the number of
months of revenue you should be counting. To get to that number, sum up all
your revenue months, factoring in the churn rate, with a cap of 36. In
other words, take your churn rate (c) and attrit your revenue over 36 months.
Sum up that series of numbers. The formula provided is the formula
that gets you that number. Then, factor in a cost of capital and then use gross margin, not revenue, to multiply all that by.

Re: Seeing Both Sides: Your LTV Math is Wrong

bussgang — Fri, 30 Oct 2015 15:44:51 -0000

oops - good catch! thanks, Brian!