Monday, December 08, 2014

Favorite business writing linked to - on venture capital

I made reference to the concept in a post just done on great business-related health care writing and the second category of great business writing I've come across and posted on in the past is venture capital... with the following being those stories (or in one case my notes on a video interview) that struck me as excellent:

"The Zen Master of Silicon Valley Chatter" by Max Chafkin for Fast Company in Jan 2013 – on Kevin Rose, the Digg founder and now internet investor as part of Google Ventures.

"Social+Capital, the League of Extraordinarily Rich Gentlemen" by Drake Bennett for Businessweek in July 2012 – profiles the Venture Capital Fund led by former Facebook employee Chamath Palihapitiya and backed in part by Silicon Valley heavyweights Kevin Rose and Peter Thiel. Solid piece on an interesting fund build on the idea of backing companies trying to accomplishing something good.

"8 Visionaries on How They Spot the Future" by Joanna Pearlstein for Wired in Apr 2012 – written as a wisdom compilation story and the following are the people and their insights that struck me the most. Paul Saffo (Technology Forecaster) - looks for things that seem out of place as an indicator of events to come. Chris Sacca (Venture Capital investor) - you don't need to be a seer, prophet, soothsayer, diviner, or clairvoyant to spot and potentially invest in the companies that could be poised for success. Barriers to entry are low enough in many technology realms that evaluation decisions can be made based on the actual product or service experience (or at least an early stage iteration of it).

"How to Get Started as a Business Leader" by Mitch Joel for the Twist Image blog in Feb 2012 – contains an embedded video interview with investor Chris Sacca, head of the venture capital fund Lowercase Capital. I first heard of Sacca from a Feb 2010 Businessweek piece "And Google Begat..." on investing by Google alums and have since come across a number of interesting things noted and linked to by Sacca on his Twitter feed. The recent interview, though, particularly stood out as it's an hour-long conversation between Sacca and Kevin Rose (who founded Digg and hosts for another of his companies, Revision3, an interview series with business leaders). The interview with Sacca has a short introduction by Twist Image President Mitch Joel and my notes (which of course may differ from what someone else gleams) from the actual Rose-Sacca interview are as follows.


Sacca went to the School of Foreign Service at Georgetown and then started down the road of graduate school. However, rather than completing grad school at the time, he received the school loan checks and used the money to start a business with the intention of aggregating class action lawsuit information. The business didn’t do much, but the story probably serves as an early indicator of his entrepreneurial bent. He then began day trading online and during this heyday period went to being up $12M, but then found himself down $4M in the market crash around 2000. With this roller coaster ride in his background, he proceeded to get his law degree and came to Silicon Valley. While having a day job as a lawyer, Sacca did lots of outside of work business hustling and attended all the networking events and worked hard to build a network. He was at the law firm for 13 months before getting laid off and then created a company that didn’t do a heck of a lot, but having that company helped him land a job at Spedera and from there got hired into Google. Sacca was brought into Google to buy data centers for server housing and negotiated with local officials on the space Google was looking to take. This role was part of the core engineering function at the company and exposed him to some of the brilliant people working there. He then became Head of Special Projects and worked on initiatives such as free WIFI for Mountain View and the $4.7B bid by Google for wireless spectrum. Sacca came to Google too late to get insanely wealthy, but did do well enough to pay off his day trading debt and return to even by Feb 2005. He then saw Google becoming more territorial and a harder place to get into new areas so left the company in 2007.

Twitter investment

He then started writing small angel investor checks to startups with Photobucket his first investment and Twitter his second. This initial investment in Twitter was done with founder Evan Williams while Sacca still at Google and his relationships there run deep and included other key leaders Jack Dorsey and Dick Costello. While out on his own after Google, Sacca started accumulating additional stake in Twitter (speculated, but not confirmed to now be around 10% of the company). This obviously makes the guy look brilliant in hindsight, but the important thing is the reasons Sacca notes for believing in Twitter as a business. Along with his firm belief in the brilliance of Evan Williams is the appreciation of how things there monetize with ads able to be sold based on actual math and ad conversion rates rather than conjecture of what the ad buy is worth. Additional value offerings noted were the component of mobile that Twitter provides and ability to work within Social Networks and promoted tweets / promoted trends.

Other investments

Sacca put together his Lowercase Capital LLC fund and other investments have included FanBridge (which he found from sending out a tweet asking about entrepreneurs working late on a Friday night), Instagram, turntable and Kickstarter. He notes doing less startup investing now due to the high valuations and focuses on companies and areas where he can be helpful. It’s also noted that VC investing not an exact science and there being a number of now successful companies that he could have invested in, but didn’t due to a lack of familiarity with the space in which they operated. Also brought up in the interview is how VCs make their money when they reinvest in companies already involved with.


Sacca describes himself as someone who grew up tenacious and determined, but along with that notes the import of building yourself through being helpful to others. To this point, he brings up that you often don't know where you're going to be able to contribute the most until you get in there doing things. The phrase used by Sacca was “create value before you ask for value back” and at this point, his interviewer, Kevin Rose, related his own story of wanting into Square so producing a demo video of how the product works and Sacca told of Ryan Graves, current GM at Uber who hustled and demonstrated helpfulness to get himself into foursquare. In terms of people he looks to work with, these ideas of contribution and hustling definitely come up as valued traits. Additionally, Sacca extols the idea of people who have had crappy jobs they had to grind at as well as those who are rounded enough that they have things outside of work. This last point being about working with people that he wants to spend time around as well as invest with.

Overall, it was a terribly interesting interview with someone who seems to have combined together the elements of skill/intelligence, hard work and good fortune. I say good fortune because the concept of "in the right place at the right time" often part of many success stories... but, Sacca's story from the interview shows effort getting him to the places where good decisions and solid work would pay off. In short, you gotta make your own luck.

"The Logged Out User (continued)" by Fred Wilson for his venture capital focused site AVC in Sept 2011 – on Twitter usage and how the service is used in different ways by different people, and what a great thing that is for the company.

"Ten Rules for Web Startups" from Twitter founder Evan Williams on his blog in Nov 2005. Williams’ track record is remarkable in that he co-founded both Pyra Labs (parent company that created Blogger) and Twitter. The rules as laid out in the blog post from Williams were all interesting, but what really stood out to me was number one... "Be Narrow" with the first few sentences "Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do." This brought to mind the excellent Ken Jennings book Maphead, in which a collector was quoted saying "if you're going to specialize, specialize as much as possible." It's a tremendously interesting (and logical) concept that applies to map collecting, business creating and I'm sure many other ventures.