I'm a partner at Redpoint
. I write daily, data-driven blog posts about key questions facing startups. I co-authored the
book, Winning with Data
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Last week, I shared a presentation with an executive team at a large public SaaS company on everything I've learned about pricing. Here's a summary of the frameworks and theory that I've aggregated over a decade of investing in startups.
In December 2017, the amount raised in ICOs nearly equaled the amount raised by Series A investments globally. The technology innovation catalyzed by Bitcoin and Blockchain is creating many multibillion dollar economies quickly. The ICO market today bears many similarities to the dotcom era. Startups can raise hundreds of millions of dollars on an idea. Twenty years ago, the idea had to be sketched on a napkin. Today, the protocol must be detailed in a white paper. But the ability to access huge amounts of capital at a similarly nascent stage is identical.
Below are 7 predictions about the startup software ecosystem. How many of them do you agree with?
There's a crisis in the scientific academic world. It's called the [Replication Crisis](https://en.wikipedia.org/wiki/Replication_crisis). Scientists have found that they cannot replicate the results published by many scientific studies. The same thing is happening in the world of business.
When negotiating your next fundraising round, should you talk valuation in premoney terms or postmoney terms? Premoney is the valuation before the investment, employee stock option pool (ESOP) expansion, debt-to-equity conversion and investment. Postmoney is the value of the business after all that.
A friend suggested that I read the Five Dysfunctions of a Team over the weekend. Though I'm passionate about business books, I rolled my eyes. I had seen this one on best seller lists for a long time, and never thought it would have much to offer. I admit my book-cover bias was wrong. The author has a counterintuitive assertion. Meetings shouldn't be boring.
"Evidence from science suggests that business people must be insane to use brainstorming groups." That's a shocking statement. Adrian Furnham, a professor of organizational and applied psychology at University College London, said it. It turns out it's completely true.
How quickly do the fastest growing software companies build their teams? The answer is incredibly quickly. In fact, this data bolsters the notion that management team's top priority is recruiting, especially after the business has reached product market fit and capitalized itself well.
There's a parallel between cryptoassets today and the British colonial period predating the US. In the late-1600s, colonies began to print their own money. Today, we're seeing many startups coin their own money, creating an explosion in the number of new (crypto)currencies.
I'm grateful for all the entrepreneurs who have spent time teaching me how to build their companies. Over these past few days, I have been reading the book Antifragile written by Nassim Taleb. In the book, he writes about many provocative things, but the one that sticks out with me this holiday is about innovation, and it harkens back to the original title of this blog that I chose nearly 10 years ago - ex post facto.