I'm a partner at Redpoint
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Michael Porter wrote the seminal book on strategy in the early 1980s. Called Competitive Strategy, I think it should be required for anyone starting a company. Strategy is a seemingly murky amorphous intangible concept, but Porter brilliantly prescribes the five questions strategy should answer. What are the answers for your business?
A friend died this week. It's the first time I've lost a friend of a similar age. I don't often see the fragility of life first hand, but this is one of those moments. I've felt many different emotions after I received the news - despair, grief, fear. The one I'm currently experiencing, though, is gratitude. And I hope that's the feeling that persists. You will be missed, my friend.
One typical Friday morning in 2004, I walked into a government building and headed to work. I was a junior Java engineer and part of a hired team building an internal system for a government agency. We were a few days behind on schedule, and a technical issue arose. During the morning team meeting, we made a plan to refactor a small key part of the codebase - an effort that should have taken just the morning. And I made a classic mistake.
In the Wide Lens, Dartmouth Entrepreneurship professor Ron Adner explores the risks associated with innovation. Execution risk is the obvious one. Then there's co-innovation risk, what might be called chained technology risk. For example, to build a new ML focused microchip, a startup relies on the chip fabrication plant to develop 7nm equipment. But the most interesting of the three is Adoption Chain Risk.
In software, we've moved from a world where a customer buys a piece of software to run on their own infrastructure, to a world where a customer pays a vendor to run software on the vendor's infrastructure. With machine learning, we may see another evolution of this. Machine learning startups create models based on data provided by customers. Should customers be compensated for their contribution?
Amazon's acquisition of Whole Foods is notable for many reasons. Of course, there's the magnitude $13.7B. The second is the shockwaves reverberating through the grocery industry. Costco fell 10% and Kroger almost 25% on the news. Third, the acquisition underscores the importance of physical retail even to the largest American ecommerce giant. Those are all remarkable in their own right.
I've been reading Fred Kofman's book, Conscious Business. Written in 2006, the book summarizes Kofman's experiences as a management consultant to some of the great leaders in technology and other industries. In the book, Kofman lists 12 questions Gallup used to identify great managers in one of the largest management surveys conducted.
Earlier this week, I spoke at 2U's annual employee conference. We partnered with 2U at the Series A, and they are now a $2B publicly traded education company that powers online degree programs for Georgetown, USC, Syracuse, Berkeley, and Yale, among others. It was an inspirational moment for me because I observed the intense power of developing strong company culture.
When I analyzed the SaaS fundraising market in 2016, three trends emerged. The number of SaaS companies raising rounds had stalled, while the total number of dollars plateaued. Meanwhile, round sizes swelled. In other words, there was a concentration of capital in an increasingly small number of names. A year later, those trends have continued to converge, and SaaS valuations have resurged, reaching their highs of the 2014-2015 boom.
I am most grateful for my work experiences that were apprenticeships. Whether it was Philip who taught me how to write a proper Java function (10 lines or less), or Kim and Scott who are great managers, or the partners at Redpoint who invested a huge amount of time to educate me, those collections of experiences have taught me far more than I could've expected.