I purchased Mastering the VC Game after Fred Wilson blogged about it at avc.com. I thought the book was entertaining and well-written. Having followed vc blogs for quite some time now, I can’t say that there was a lot of new information in the book, but I did think that it brought clarity to some issues that I didn’t completely understand.
For example, in valuation there is a common misconception that the higher the valuation, the better the deal is for the management team. The problem is that entrepreneurs often forget to factor in the size of the option pool set aside for future employees. To account for this, Bussgang introduces a metric called the ‘promote’, which is the (founding team’s ownership percentage)*(post money valuation). Even though the book’s explanation is nearly identical to the explanation on Bussgang’s blog a year ago, it made so much more sense this time.
The reason for this newfound clarity is that the book introduces topics in a natural way. Bloggers often have trouble doing this and can seem random and haphazard. So when the ‘promote’ is explained in the context of an entire chapter about valuation, suddenly it makes sense.
Another reason I was able to appreciate the nuances in the book is that I’ve been following vc/entrepreneurship blogs obsessively for two years now. What I most appreciate is that the book was able to touch upon so many pieces of information that I had to internalize bit-by-bit over two years. In just a few hours, you can get a broad overview of vc, dive into interesting stories, and get surprisingly detailed information that isn’t widely available except in blog posts.
This immediately reminded me of Rework by the guys at 37signals. I was really disappointed by that book and thought it was a waste of time. It was incredibly repetitive and at some points I felt like I was re-reading a combination of the 37signals blog and Getting Real. Bussgang’s book is still derived from blog posts, but rather than being a rehash, it brings clarity to a scattered body of knowledge. If you’re interested at all in vc/entrepreneurship, and especially if you’re new to blogging, I highly recommend the book.
WARNING: This is a long rambling post with no clear structure. Read only if extremely bored.
After visiting GoodCrush at Dogpatch Labs in NYC yesterday, I thought I would finally take the time to write down some of my thoughts on online dating.
When I was interviewing with venture capital firms in September last year, I started investigating online dating as a way to generate investment pitches that I could give in my interviews. It seemed like an area that was profitable and quickly growing. Also, it was something that embarassingly, I could relate to. Though I have never used online dating platforms beyond experimentation and research (of course), I was confident that I could take on the mindset of a real user that was thinking about spending money on these services. I could completely understand that for the right situation and person, jumping a virtual paywall could be irresistible. If people are willingly shelling out money for fake cows, there would surely be people willing to buy a dollar-date.
In thinking about services, I always approach things from a user perspective, I don’t think that you can even begin to understand the subtleties of what it means to use virtual currency in Facebook for example, without trying it yourself. I don’t think you can compare lala and iTunes without trying them side-by-side. I’ve tried all of these services and will even admit that I’ve spent money on Farmville just to see how it would feel (it really wasn’t not as bad as I thought, it was almost enjoyable).
There are few things that I think would drastically improve the online dating experience and they all have to deal with increasing the success rates of the matching mechanisms in each platform. Success rates aggregate a combination of many important factors:
Time spent between matches (Can I do this really quickly? Is it all guys and no girls?)
Match Quality (Am I finding the right kind of person?)
Experience quality (How is the UI compared to other platforms? Am I having a good time? Is it spammy?)
User spend per match (How much money did I spend to get this date?)
Number of matches (How many dates have I gotten and how many do I expect to get?)
I’ll focus on only one factor here that I think is the most important and feeds into everything else, Match Quality. This factor is so important that it can cloud the other factors. If you get really great matches, you’re more willing to deal with other problems.
Many people don’t use online dating because they think there are already a lot of high potential prospects in their immediate social network; namely friends, acquaintances, and friends of friends. The problem is, there is no good way to get to these people beyond Facebook. This is where Zoosk and Goodcrush come in. They tap into your existing networks to generate high-quality leads; this increases the match quality.
This is a big step for online dating and is a digression from the older players like eHarmony and Match.com. Still I think there is tons of room to improve. The most obvious thing to improve this is to combine these existing networks with better personality matching. Pictures and videos are good enough to judge physical attractiveness, but there hasn’t yet been a good way to control for personality risk. Sites like eHarmony have questionnaires, but I think the level of detail can be so much higher. An obvious solution would be to combine Hunch with all these dating services. Hunch could charge a fee to the dating sites to allow them to access Hunch data. To protect Hunch users from unwanted advances, there could simply be an opt-in at sign-up: “Are you interested in getting matches from Zoosk, Woome, etc?”
The value proposition for this new generation of dating sites could be very powerful. Exhaust your existing networks first with extremely detailed personality/behavioral matching and only then go after complete strangers. This not only improves matching quality, but also does something else that is extremely important; it removes a lot of the creepiness factor that exists in online dating. Now online dating isn’t about trawling the web hoping to find a lucky break, it’s simply a friend that sets you up with their friends. Maybe it shouldn’t even be called online dating; it’s more of a facilitator and tool vs. singles marketplace.
This is one of my favorite spoofs already. I think the best part is the very first word, “yeauuuuh.” These guys have talent! Check out their startup at www.grasshopper.com. Remember chocolate covered grasshoppers?