This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. This article was intentionally removed because some of the data has become confidential. Thank you for understanding.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
This article was intentionally removed because some of the data has become confidential. Thank you for understanding.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. A fair bit of ink has been spilled with VC recommendations to startups on how to best confront the business challenges catalyzed by the covid-19 crisis. In fact, it’s practically compulsory writing for any VC on social media these days. Rather than write yet another of one of those posts, I’m taking a different angle. The preponderance of the various VC tips permeating the ether these days — worthwhile as they are — tend to be fairly prescriptive in nature. So, in complement to all that good wisdom out there and rather than preach from the perch of my Peloton®, I’m going to highlight some best practices from the people on the front lines of this economic crisis, i.e. our portfolio company CEOs. Here is an extract of some of the most concrete and actionable…
This
guest post is authored by Mark Bivens. Mark is a Silicon Valley native
and former entrepreneur, having started three companies before “turning
to the dark side of VC.” He is a venture capitalist that travels between
Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
Image credit: Pxfuel
A fair bit of ink has been spilled with VC recommendations to startups on how to best confront the business challenges catalyzed by the covid-19 crisis. In fact, it’s practically compulsory writing for any VC on social media these days.
Rather than write yet another of one of those posts, I’m taking a
different angle. The preponderance of the various VC tips permeating
the ether these days — worthwhile as they are — tend to be fairly
prescriptive in nature. So, in complement to all that good wisdom out
there and rather than preach from the perch of my Peloton®, I’m
going to highlight some best practices from the people on the front
lines of this economic crisis, i.e. our portfolio company CEOs. Here
is an extract of some of the most concrete and actionable ideas which
have been initiated by a variety of our investments. [I have
restricted my own comments to brackets.] Hopefully some of these
initiatives will inspire ideas that are more directly relevant to
your own unique situations.
Anticipating that things will get worse before they get better. Erring on the side of abundant caution and taking measures early even if they seem excessively prudent.
Holding candid discussions with their investors, early and often, to find out whether they have the capacity, the will, and the dry powder to provide some bridge financing in the event that things do get worse.
Providing their employees the tools to work from home. Not all of them rock the same home office crib that the CEO does. Those who could afford it have given their employees a “work-from-home stipend” to enable them to purchase the equipment they need to be productive. [Not only is the productivity boost covering the expense, but I have a feeling that the staff loyalty they generate from moves like this will probably prove priceless
Designating to each employee a special additional role during the crisis [hat tip to Eric Ries for this idea], for example
A person who contacts suppliers, customers, and partners purely to check in on their well-being
A point person to keep up with the evolving dynamic of local government subsidies for which the startup might be eligible
A person who posts any good news on a regular basis about covid-19 developments
A person to ensure there’s adequate supply of hand sanitizer in the office
[an initiative like this brings several benefits: it gives every employee a clear responsibility; it aligns employees with the problem-solving mission; it relieves much of the burden on the CEO (if you haven’t learned how to delegate yet, now would be a good time, and quick); it enhances productivity; etc.]
Giving themselves some time (usually two weeks) to brainstorm with all staff on how to creatively generate more short-term revenue, free of ideological mindset constraints. [if you’re product purists, could you provide some services ? are there any work-for-hire opportunities ? could you monetize some of your company’s talents or technologies in a different way ?]
Over-communicating with transparency and candor to all employees about the potential financial challenges
Leading by example first, by postponing 100% of their own salary and then asking employees to postpone 50% of theirs. In the event that layoffs are absolutely necessary, finding the most humane manner possible to do them [extending option exercise periods, offering to re-hire, granting use of facilities, etc.]
Postponing fees to external board members [exploring the postponement of such fees could hardly be considered offensive if you have already established a relationship of transparent communication with your board.]
Pursuing every possible government aid available [government-backed loans, partial unemployment subsidies, tax deferrals, etc.]
Generally extending the same level of transparency to their suppliers, sharing openly their financial predicament and exploring potential flexibility in payment terms [I know of one startup who told their landlord with sincere apologies that they will temporarily need to stop paying rent for a few months, were prepared to accept the consequences, and genuinely hope that the landlord
understands their situation.]
[On a related note, I recall one CFO
from a portfolio company in the distant past who found himself forced to navigate crises on almost a bi-annual basis. I’m going to
dedicate a whole future post to this individual one day. One of his
most creative ideas when in a cash crunch was to approach each
supplier with a proposition of flipping a coin: heads he pays them
within 30 days; tails he postpones payment for 60 days. I love
trotting out this anecdote every time a startup manager tells me that they’re in a cash crisis and they’ve tried absolutely everything.
“Have you really tried everything? If you haven’t flipped coins
with your suppliers yet, then you haven’t tried absolutely
everything,“ I like to respond.]
A healthy company culture will be one of your greatest assets to
navigate this crisis. Leverage it.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. Japan witnessed its first successful unicorn take flight this week in the IPO of Mercari. Since its launch in 2013, Mercari has become Japan’s leading online flea market platform, allowing people to buy and sell secondhand items on a smartphone app with a brilliant UX. In just five years, the startup has reached a valuation of $6 billion, the largest IPO for a tech company since Line Corp. went public in July 2016. Hats off to the investors who backed Mercari, especially East Ventures who subscribed to the vision during the company’s seed round. And deep bow to the tireless leadership of Shintaro Yamada and his team at Mercari for your collectively heroic efforts! My hope is that Mercari represents a watershed moment for tech innovation in Japan. I’ve encountered mixed prognostications here in Tokyo…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
Image credit: Bakhtiar Zein / 123RF
Japan witnessed its first successful unicorn take flight this week in the IPO of Mercari.
Since its launch in 2013, Mercari has become Japan’s leading online flea market platform, allowing people to buy and sell secondhand items on a smartphone app with a brilliant UX. In just five years, the startup has reached a valuation of $6 billion, the largest IPO for a tech company since Line Corp. went public in July 2016.
Hats off to the investors who backed Mercari, especially East Ventures who subscribed to the vision during the company’s seed round. And deep bow to the tireless leadership of Shintaro Yamada and his team at Mercari for your collectively heroic efforts!
My hope is that Mercari represents a watershed moment for tech innovation in Japan. I’ve encountered mixed prognostications here in Tokyo this week. Some view it as a game-changer. Others remain skeptical, contending that Mercari remains an exception in a culture which stigmatizes failure.
Numerous people in both camps have told me that the absence of unicorns in Japan has been an embarrassment to the world’s third largest economy and former technology powerhouse viewed with intimidation in the West.
True, the U.S., Europe, and China possess herds of tech unicorns. Even today, I would submit that Europe punches above its weight in its proportion of unicorns. As I had explained in a recent interview to ITmedia News, Europe now counts about 30 technology unicorns, over 25% of the U.S. figure, which is impressive given that Europe only receives 1/10th of VC funding with substantially lower fundraising rounds compared to the U.S. As a VC during the breakout years of Europe’s tech sector, I have been fortunate to witness and invest in this magical phase.
And magical it is. The birth of unicorns in Europe has awakened international investors to the Old Continent’s potential. Capital from America and China has found it way into Europe. Now it appears that a few savvy investors from Japan are discovering the potential as well. Perhaps Mercari can unleash a similar stampede.
Granted, the term unicorn is annoyingly overused and increasingly inaccurate. However, investment bankers, research analysts, and investors love it (not to forget tech journalists, of course). Government officials across the globe have also almost universally adopted the unicorn mantra. Some use it as a metric on which to score points in petty rivalries about whose nation boasts the best tech ecosystems. One could also argue that a proliferation of unicorns is a sign of inefficiency in the capital markets.
Although I am hopeful that Japan will produce more tech unicorns in short order, I submit that the real litmus test will come in the form of a more macabre milestone: Japan’s first unicorpse.
Now please don’t misunderstand me. I applaud each and every aspiring unicorn venture, and I wish them no harm. I also salute the as-of-yet unsung heroes: the entrepreneurs who are still struggling out of the spotlight to reach escape velocity. Some of you will hopefully join the unicorn club, whereas many of you will not cross the $1B barrier but still build great companies of lasting value. Just as I wept at the end of Seabiscuit, I would not take pleasure in seeing a bunch of dead unicorn carcasses.
However, although Aileen Lee’s term refers to an arbitrary valuation threshold (remember: $1B is just another number), there is something stratospheric, ostentatious, and memorable about the $1 billion mark. On today’s scales, when you’ve crossed $1B, you’ve made it beyond the big leagues; you’ve become a near-mythical creature.
By the same token, a $1B failure will also be monumental. The topic of faltering unicorns is still a bit taboo, and the projected “dying unicorn lists” are not publicized (I know of one in particular that has recently attracted Japanese VC funding to the surprise of the local insiders).
But make no mistake, there has been and will be more blood. Probably several more unicorpses around the world. Such is the nature of venture building. This is actually a good thing, because global success stories of game-changing disruption cannot exist in an environment devoid of colossal failures.
Japan’s first unicorpse, whenever it happens, will represent a new inflection point. How the community reacts will reveal the true potential of Japan’s innovation ecosystem.
The article was authored by Jun Hasegawa, CEO of Bangkok-based FinTech startup Omise, and was first appeared on his own Medium feed. It has been reproduced by The Bridge with the approval of him. See also: Omise acquires dtac’s payment services provider Paysbuy to accelerate growth in SEA (e27) Omise Supplements VC Funding Through Abstemious Token Offering (ETHNews) Japan, Thai startups unite to support younger selves; Inaugural meeting held with ministers Omise secures $17.5M to become Southeast Asia’s largest online payments gateway While ICOs have been around for a number of years, only until 2016–2017 did we start to the a whole hosts of ICOs and ICO funded projects entering the mainstream world. I for one have made the decision to step into the center of the ICO activities with hopes that through this unprecedented experience I would challenge myself to learn and grow, while also contributing back to strengthen the blockchain ecosystem in the long run. How did I get here? In 2013 I founded Omise as an e-commerce platform based out of Thailand. Though the efforts to grow out this business I experienced first hand how outdated payment processors, gateways and financial institutions impeded e-commerce growth across the…
Omise CEO Jun Hasegawa
The article was authored by Jun Hasegawa, CEO of Bangkok-based FinTech startup Omise, and was first appeared on his own Medium feed. It has been reproduced by The Bridge with the approval of him.
While ICOs have been around for a number of years, only until 2016–2017 did we start to the a whole hosts of ICOs and ICO funded projects entering the mainstream world. I for one have made the decision to step into the center of the ICO activities with hopes that through this unprecedented experience I would challenge myself to learn and grow, while also contributing back to strengthen the blockchain ecosystem in the long run.
How did I get here?
The Omise team introduced their beta service at Echelon Thailand in 2014.
In 2013 I founded Omise as an e-commerce platform based out of Thailand. Though the efforts to grow out this business I experienced first hand how outdated payment processors, gateways and financial institutions impeded e-commerce growth across the Asia-Pacific region. In realizing this, my co-founder and I pivoted Omise to became a fully-devoted fintech company focused on providing the most reliable and secure online payments services.
About a year after we launched Omise payment I stumbled across this technology called blockchain, and more specifically Ethereum-based blockchain. This was back in early 2015 when ETH 1 was valued less than US$ 1. I immediately became fascinated by this technology and the promise it brings to scaling Omise’s business.
Since my introduction to the blockchain technology, Omise has committed itself to supporting and strengthening ways to bring this promising technology into mainstream business.
Blockchain community
There are several aspects of what makes blockchain technology so attractive to me personally. The first is, of course, the technological potential. However, there is also another very important aspect that often is glazed over by mainstream world but I feel deserves a greater spotlight: the blockchain community and its ecosystem.
Having submerged myself in the open source technology world both through OmiseGO blockchain and Omise payment, I am truly convinced the unique value of open source technology is its surrounding community. With this, I believe it is Omise and OmiseGO’s responsibility as a member of the wider community to help contribute to and grow it.
From the very beginning of OmiseGO (initially called Omise Blockchain Lab) Donnie and I took the approach of viewing community contribution, sustainability and scalability as a core part when benchmarking our “return on investment”. For instance, Omise provided funding to support the Ethereum’s DEVgrants as well as to DEVCON 1 and 2. Every time we decided to provide funding to support a community initiative,
I’m certain our board members were thinking to themselves “Crazy Jun, here we go again”. However, I fully believe in the community approach and I do believe our contribution, though modest, have provided us with the opportunity to build stronger network of relations amongst the blockchain and Ethereum community.
I would like to reaffirm that Omise and OmiseGO are committed to continuing it’s support to the blockchain and Ethereum community as we move forward into the future.
One example is our long-term supportee “Raiden network” which has been based on Ethereum (Git link). Heiko Hees, CEO at Raiden network, is a distinguished person who has been taking an approach, from an early stage, to the problem of transaction speed (known as “TPS”) that Ethereum will sooner or later be confronted with.
Subsequently, we continued to build more and more relationship with other members including founders of Ethereum and other leading roles in this community-crypto society.
Have you ever attempted to take apart the field of finance? Today’s society employs cash, credit cards, points and other units which both express and alternate primary values in a real form. Thanks to a variety of units, it enables us to make an exchange from one unit to another. Because barter trade was often difficult to apply a measure properly to every single value, people were willing to make a common system that we all agree on.
Accordingly, community was born and currency as a common system was invented. (You can imagine a situation like “This chocolate is worth $1. Do you agree on a price?”) The idea of currency began to widely spread and the society admitted the use of currency as a measuring tool for measuring thousands of values.
Nevertheless, the political (“centralized”) orientation favoring some particular belief by each nation led to produce separate currencies which are in need of some form of administration. As it turned out, the society found a value-alternative method in a temporary sense but ended up with more complicated societies and stood too far from the establishment as a united world.
Furthermore, a form of cash advance into credit cards and other convenient figures. If you are ought to take apart credit cards, they project the amount of money he or she could afford for in advance and gather used-values into one place. In spite of this, due to the spread of the internet across the world, our societies were in search of more convenient methods.
After all, that is where cryptocurrencies came in. The cryptocurrencies were epoch-making architecture which remedies a problem caused by the centralized authority that human history has been facing for a long time. Thanks to its architecture, they make a progress of decentralized system in the true sense.
The other side of the coin is that, this unique system requires greater coordination amongst multilateral participants since participants could influence on the system itself. To put it shortly, participants in the community are really important. It has to be designed to ensure that decision-making is based on whether a majority of participants in the community agree on.
The standard practice is that we can hardly claim a majority of the population becomes the thief in our society, in the same way, wholesome and right decisions are almost surely made for the community.
Yet it is no longer the case with ICO; ICO could potentially demolish the ecosystem in the society & in the community. You might come up with the question “Why OmiseGO is associated with ICO then? We consider ICO as a revolutionary method to raise funds in the next generation and it has an unbelievable potential unless we mistake the method of investment.
Therefore, OmiseGO conducts ICO. In the meanwhile, we are aware of some points.
Ensure many participants can participate.
Raise funds only we need.
“Giving without expectation in return” mindset.
Always stay close to the community (pre & post ICO as well)
Transparency.
We came to the conclusion with these elements in accordance with the active discussions in Slack, Twitter, Reddit, and so on. On the basis of the above, we have been updating our ICO, including a shift form Public ICO to Private ICO.
It is quite possible to raise xx M USD in 30 seconds from a viewpoint of a demand in the current market if we release the address to the public. Still, we cannot leave the theory “rich grow richer” in this manner. Therefore, we decided to take an opposite direction, departing from a conventional wisdom in terms of the ICO. Of course, we neither treat our approach as consensus -gaining among all, nor wish that will happen. However, after all things considered with a decent amount of time we spent on the discussion on how to wholesomely sustain the ecosystem, we arrived at such conclusion.
A method of ICO will keep progressing and come into common. It is not surprising that a government will engage into ICO one day. Yet until then, testifying whether ICO is a better solution over the conventional methods in terms of the fund raising will ultimately affect our society in the future. Moreover, it is essential for a new society of the cryptocurrencies too.
We don’t mean to mention their names, but if you are the member of the society, you should keep in mind that disruption only occurs in a state with “already-developed”, not with “under developed.” We are meant to raise the standard in order to develop an ecosystem by coexisting and less conflicting each other. Harmonization is the key success factor. Personally, I am not very pleased with the ICO that seemingly intends to raise a mint of money in one year or money with no upper limit because it might corrupt the ecosystem.
(I do not deny the projects. All projects seem interesting and splendid.)
Ecosystem by OmiseGO
OmiseGO has set a goal: Online payment for everyone. Throughout our experience as a business operator in the past two and a half years allows us to explore pain points of customers and infrastructure providers. In order to solve their problems, we kept running full speed. And then we realized that in order to achieve our goal in a true sense, we are in charge of building our ideal ecosystem. Some may say our proposals are quite unrealistic and other giant corporations with sufficient financial resource will eventually take actions instead.
But what is the most important is how fast to put it into practice. It is certainly possible that only we cannot achieve that. But as stated above, if we work together in the society in full harmony, our idea is more likely to become reality.
Omise boosts to our full speed ahead in a true sense. Omise payment continues to provide business and individual customers an acceptance that can receive values. OmiseGO constructs a network as it will serve as a useful venue for exchanging values.
And above all, we are looking forward to making a more exciting announcement in Q3/2017.
This is a guest post by Tim Romero. Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor. The Japanese translation of this article is available here. There is a common misunderstanding among Japanese startups that is causing many of the to go out of business just as they should be hitting their rapid growth phase. Correcting this misunderstanding would do more to promote the success of Japanese startups than all of government startup programs and academic accelerators combined. the difference between a relationship based company and a product based company is important, often not obvious at first. All famous consumer brands are product companies, Facebook, Nike, Honda, Apple, Seiko, Google. Customers are attracted to them, because of the product they make. On average customers feel a greater loyalty to those companies than those companies do to their customers. Sure, all of these companies developed a brand that acts as a kind of halo, that lets them charge a premium price…
Tim Romero
This is a guest post by Tim Romero. Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor.
The Japanese translation of this article is available here.
There is a common misunderstanding among Japanese startups that is causing many of the to go out of business just as they should be hitting their rapid growth phase. Correcting this misunderstanding would do more to promote the success of Japanese startups than all of government startup programs and academic accelerators combined.
the difference between a relationship based company and a product based company is important, often not obvious at first. All famous consumer brands are product companies, Facebook, Nike, Honda, Apple, Seiko, Google. Customers are attracted to them, because of the product they make. On average customers feel a greater loyalty to those companies than those companies do to their customers.
Sure, all of these companies developed a brand that acts as a kind of halo, that lets them charge a premium price and sell a greater range of products than their competitors. But, in the end, it’s all about the products they make. Product based companies can scale globally. But, just because you make a product, doesn’t mean you’re a product based company.
In fact, most Japanese companies with products are not actually product based companies at all. They’re relationship companies. This is slowly starting to change, but the cultural importance of relationships has a long history here. When I started my first Japanese company back in 1998, the goal of almost every startup was to become part of a large company supply chain. Having that kind of relationship guaranteed a steady, if low margin, stream of business.
These relationships were more important back then, because although the keiretsu were starting to crumble under their own weight, most companies still preferred to business within their own corporate groups. And, small to medium enterprises had very little independent buying power. In fact, these captive, protected keiretsu micro-markets, is one of the big reasons Japan did not develop a globally competitive software market in the ‘80s and ‘90s.
At the time an independent Japanese company that would sell its products across multiple keiretsu groups, was a rare and powerful beast indeed. For the most part, the way to survive was to build what your client, very often your only client, to build what they told you to build.
Things have improved a lot in the last 20 years, but still a huge number of Japanese startups are really firms that have one major client and no hope of scaling. They have a relationship that guarantees a certain level of orders, but they have no product that can stand on its own in the marketplace.
Don’t get me wrong, although way too much importance is placed on relationships in Japan, it’s great to have those relationships. Knowing the right people can give you a huge head start in getting your first customers and in getting distribution. But, your product has to be more important than any single customer you have or things are going to break down eventually.
Now, it can be hard to tell if a company is truly a product company or if it’s a relationship company in the early stages. And, nearly all companies with a product will insist that they are product companies. But, a few giveaways are:
If you are still, or if you are planning on doing custom development work after you receive funding, then you’re almost certainly a relationship company.
If your product requires extensive customization and you’re the only company doing that customization, than you’re probably a relationship company.
If your product started out as a project you did for one customer and then you decided to turn it into a mass market product, then you are most likely a relationship company.
If losing your two biggest clients would put you out of business, then you are certainly a relationship company.
There’s nothing intrinsically wrong with relationship companies of course. In fact, in the early stages, relationship companies often see traction sooner and grow faster than product companies. But, relationships don’t scale and growth will eventually be limited by the strength of the CEO’s industry connections. Of course, relationship companies can still make a lot of money. And, powerful, well connected CEOs can even take a relationship company public, but they can never scale to be a global player.
Actually, relationship companies are fine, if you have strong relationships and want to leverage those into a company, do that. More power to you. The real problem is that this relationship thinking is holding back Japan’s startup community.
The tendency to value relationships over products, is probably the single largest obstacle preventing Japan from really developing a pay it forward startup culture. I see it constantly. Far too many people view their connections and their network as something to be jealously guarded, as some kind of competitive advantage. And, people who think along these lines are unlikely to make introductions without trying to extract value from them.
Of course, there are plenty of Japanese who have, or at least try to, embrace the idea of open networks and paying it forward. But, we’re in the minority. At least, for now. But, we’re going to change that. So, advice number one for Japanese startup founders comes in two parts.
Part A, never pay for an introduction of any kind. Never agree to let an organization take a percentage of financing that might result from an introduction to a VC or from coaching you on how to present to them. Most of these people are trying to scam you anyway. Likewise, never give someone a percentage of a deal that might result from introducing you to a potential customer. Of course, affiliate programs and reseller programs are powerful tools. Use them when appropriate. But, as a startup founder, if someone ever tells you that they know a prospect that you should approach, but will only make that introduction if they get a percentage of the deal, politely walk away. You’re dealing with a gatekeeper or a parasite and their opinion is probably not highly valued by the person that they are promising to introduce you to.
Part B, let’s all start making a conscious effort to pay it forward. Promise yourself that at least once a week, no matter what, you’ll introduce two people who would benefit from knowing each other. Or, recommend another startups product to a potential customer. Now, I’ll warn you in advance, if you do this right, it will feel unfair. You’ll feel like you’re making five times as many introductions and ten times as many recommendations as you receive. But, that’s fine. It means you’re doing it right and you’ll greatly benefit from this in the long run. I promise.
And, best of all, if all of us commit to this, open networks will win and we can put the gatekeepers and the parasites out of business.
Now, I sometimes get accused of being a cheerleader for Japan and it’s true. I’m quite optimistic about the future of Japan in general, and Japanese startups in particular. I suppose part of the reason it looks that way is because so many people, including the Japanese themselves, are often hesitant to point out all the things that are going right in Japan. People also tend to ask me about top down ways of improving things for startups in Japan, but top down things are going pretty well. The trends are all moving the right direction and there’s only so much you can do top down anyway.
The real power for change in startups is and will always be bottom up.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. There seem to be an abundance of blog posts lately advising on how to get a job in venture capital. Or perhaps more have just come across my desk. One of the recent themes centers on the concept of drafting sample investment memos of potential startups to gain the attention of a VC fund by showcasing your deal screening chops. This is not bad advice. Drafting a hypothetical investment memo could demonstrate not only your ability to think critically about an opportunity, but also your ability to reason thoughtfully on an investment thesis about a market. However, I hold a slightly different view on the most effective way to beginning a career in VC, at least from a European perspective. A common misconception of VCs in Europe is that they spend the bulk of their…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
There seem to be an abundance of blog posts lately advising on how to get a job in venture capital. Or perhaps more have just come across my desk.
One of the recent themes centers on the concept of drafting sample investment memos of potential startups to gain the attention of a VC fund by showcasing your deal screening chops. This is not bad advice. Drafting a hypothetical investment memo could demonstrate not only your ability to think critically about an opportunity, but also your ability to reason thoughtfully on an investment thesis about a market.
However, I hold a slightly different view on the most effective way to beginning a career in VC, at least from a European perspective.
A common misconception of VCs in Europe is that they spend the bulk of their time reviewing new investments. Some prolific investment funds (Kima Ventures in France comes to mind) bear this out, and to their credit have honed their investment process into an efficient machine. The vast majority of European VC funds, however, invest in a relatively limited number of new companies each year on a per partner basis.
Funnel math of course means that for each new deal, probably hundreds of pitch decks were skimmed and dozens of meeting sessions were held. Still, I would posit that the investing partners of the major VC funds spend more time helping their portfolio companies than on any other activity.
I personally spend 1/2 to even up to one full day, per week, on each of my portfolio companies. People tell me that’s on the high side, but we lead deals and always take active board positions in our investments. With that comes a certain level of commitment and responsibility.
So if the principal activity of the job is supporting the venture portfolio, then as an aspiring candidate for a job in VC, your appreciation of this aspect is what interests me most.
Being an effective venture capitalist usually requires drawing upon a diverse set of talents to help your investments overcome obstacles. I like to think of it as a combination of experience, moxie, and humility.
Experience
Have you started companies before? Do you have experience operating and scaling small ventures into large ones? Is there particular industry expertise in your background relevant to our investment sectors? Beyond the obvious domain knowledge, do you have experience in fostering diverse points of view? Do you have experience making decisions under conditions of extreme uncertainty? Are you comfortable being uncomfortable?
Moxie
How will you convey your message and if necessary be persuasive to a management team over whom you hold little official authority? Have legitimacy when holding those difficult conversations with a portfolio CEO? Be your portfolio company’s best unpaid salesperson? Can you be an iron fist wrapped in a velvet glove?
Humility
The VC is not the hero, but rather enables heroes. Are you willing to play this role, or do you prefer to own the glory? Are you willing to be a fixer, clean up messes, soften up arch rivals, handle nasty litigations, and in general play the Michael Clayton on behalf of the portfolio company? Are you intellectually curious and willing to recognize that often, you are not the expert? Are you argumentative, or rather, inquisitive? Are you attached to academic theories, or rather, pragmatic and willing to simply get things done?
The VC industry is changing, no doubt about it (although it’s evolving much more slowly in Europe, I would argue). New models are emerging. There is no universal truth, such as “Only experienced entrepreneurs can become VCs,” or “Journalists and lawyers will never make it unless they come from money.”
On the contrary, practically anyone can become a VC. It’s easier today than ever before (unless of course you’re a woman or minority, but that’s a topic for another rant). There even seems to be a proliferation of self-annointed VCs these days. However, I submit that becoming a VC should not be your goal. Your goal should be to fulfill the role well, to selflessly support and add value to your portfolio companies, and to be a good steward of your own investors’ capital.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. The other day a tech CEO that I admire and keep in touch with occasionally mentioned something that really resonated with me. The guy is a fantastic entrepreneur, one of the best I know, as well as an excellent visionary in his marketspace. Like most CEOs in a fast-growing technology venture, this one finds himself on the road often, striking business development deals and generally evangelizing his company all over the world. Following one particular stretch in which this guy was traveling for an extended period, some members of his staff remarked how refreshing it was to have him back in the office to re-energize their motivation levels for their relentlessly demanding jobs. I find this totally unsurprising. It isn’t that his employees are not self-starters lacking the ability to work without daily guidance. On…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
The other day a tech CEO that I admire and keep in touch with occasionally mentioned something that really resonated with me. The guy is a fantastic entrepreneur, one of the best I know, as well as an excellent visionary in his marketspace. Like most CEOs in a fast-growing technology venture, this one finds himself on the road often, striking business development deals and generally evangelizing his company all over the world.
Following one particular stretch in which this guy was traveling for an extended period, some members of his staff remarked how refreshing it was to have him back in the office to re-energize their motivation levels for their relentlessly demanding jobs.
I find this totally unsurprising. It isn’t that his employees are not self-starters lacking the ability to work without daily guidance. On the contrary, employees in a startup are by definition talented and ambitious, and this group was no exception. They simply experienced withdrawal symptoms from going too long without being reminded in person of how they fit into this radically innovative company in a way that only a founder can convey.
Indeed, only candidates of a certain profile are attracted to work in a startup. Stability, predictability, and a comfortable salary are certainly not the lures. Rather, it is the opportunity to achieve fulfillment.
People need to feel a part of something bigger
This is human nature. It’s the top chunk of Maslow’s pyramid. Without this feeling, we lose our souls. We become zombies in mindless corporate careers where the sky has been blotted out, so hopelessly dependent on the “system” that we later fight to protect it.
If your motivation level at work is chronically sub-optimal, or you feel that your career is drifting sideways, think about the underlying issue. Look around your work environment. Do you have autonomy? Do you work for an inspiring leader? Are you surrounded by colleagues with infectious enthusiasm? Do you have the chance to succeed or fail on a daily basis? Are you made to feel like you are a key component of a larger vision?
Feeling a part of something bigger can be the most fulfilling reason to work in a startup.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. One of the most powerful yet understated human emotions is under threat. Empathy is the capacity for understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another. In contrast with its close cousin sympathy, empathy approaches a truer shared experience. It is more credible because the empathizer has been in your shoes, and thus shares your experiences and values. The trouble is, businesspeople are glamming onto the concept of empathy in order to self-promote or simply sell more crap. Purveyors of cars, cat food, and coffee are increasingly telling us not only which brands we should buy but how we could live our lives based on collective shared values. On-demand transportation services commiserate with our suppression by the transportation incumbents and entice drivers to break free of their…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
One of the most powerful yet understated human emotions is under threat. Empathy is the capacity for understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another. In contrast with its close cousin sympathy, empathy approaches a truer shared experience. It is more credible because the empathizer has been in your shoes, and thus shares your experiences and values.
The trouble is, businesspeople are glamming onto the concept of empathy in order to self-promote or simply sell more crap.
Purveyors of cars, cat food, and coffee are increasingly telling us not only which brands we should buy but how we could live our lives based on collective shared values. On-demand transportation services commiserate with our suppression by the transportation incumbents and entice drivers to break free of their shackles. Travel and lodging services remind us that by staying at their properties we celebrate the aiding of refugees, or help the world come together. Even VCs are clamoring to express how much empathy they have for the entrepreneurs in whom they invest.
Admittedly, I’ve been guilty of this last one. I used to emphasize how my three prior startups, which included two flame-outs, make me a better VC.
I’ve been in your entrepreneurial shoes, with some success yet not devoid of frequent struggle and disastrous failure, so this makes me a better financial partner for your startup.
I would claim. Actually, I genuinely believe this, but it now feels contrite when I say it.
Perhaps the extent to which empathy as an advertising technique has become fashionable is best demonstrated by this video ad from the InterContinental hotel brand. Stories of the InterContinental Life Presents: Empathy – A Bespoke Connection.
The accompanying podcast’s episode notes characterize it as a “chat with a pair of philosophy experts about the rewards of empathy in our daily lives.”
As this trenchant piece in The Atlantic sums up perfectly, current ads that evoke the ethic of empathy reflect not only our cultural moment but also our technological one. They focus on empathy-infused user experiences which put the “sell” in the celebration of human connection.
I fear that empathy is jumping the shark, and that triggers my profound sympathy.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. This week we have the Mobile World Congress in Barcelona and the Game Developers Conference in San Francisco. Both major technology conferences; both happening at the same time. So difficult to choose… So it’s no surprise then that mobile gaming is on my mind. Truth be told, I was never much of a gamer myself, yet the industry has always fascinated me from an investment perspective. In fact I can only think of three video games which hooked me over the course of my life. Perhaps symbolically, each corresponded to a different stage of my life as well. First there were the Nintendo Game & Watch devices which I collected as a young boy. My favorite was Fire, but I managed to amass games like Octopus, Helmut, Parachute, and then later the double-screened Game &…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
Image credit: Masaru Ikeda
This week we have the Mobile World Congress in Barcelona and the Game Developers Conference in San Francisco. Both major technology conferences; both happening at the same time. So difficult to choose…
So it’s no surprise then that mobile gaming is on my mind. Truth be told, I was never much of a gamer myself, yet the industry has always fascinated me from an investment perspective.
In fact I can only think of three video games which hooked me over the course of my life. Perhaps symbolically, each corresponded to a different stage of my life as well.
First there were the Nintendo Game & Watch devices which I collected as a young boy. My favorite was Fire, but I managed to amass games like Octopus, Helmut, Parachute, and then later the double-screened Game & Watches like Donkey Kong and Mario Bros. My version of Fire still has the dents from when I hurled it across the room in frustration, but the others remain in practically mint condition. That’s how I know that Fire was my favorite. A stroll in Tokyo’s Akihabara district the other day made me realize how valuable these collector’s items have become.
In the modern era, a game consultant in Japan introduced me to GungHo’s Puzzles & Dragons in 2012. This mid-core smartphone game fascinated me in two ways. First, the combination of a Match-3 game with a dragon battle game represented a level of sophistication that I had never seen in the West. Additionally, the innovation around the gacha monetization technique opened my eyes to the business potential of mobile gaming in Japan. Although after five years PazuDora is finally in decline, the game is the most profitable F2P game ever. (Incidentally, I’ve written previously about the present-day threats to the gacha technique).
For the decade in between, i.e. around the turn of the century, the game that hooked me was Snake on my Nokia feature phone. Remember those old Nokia feature phones? A Nokia was my first mobile phone, and I must have cycled through half a dozen of those reliable devices during this period. That was of course before the smartphone revolution, back when we still used mobile phones for talking. Navigating through the memorized key sequence to Snake probably fell second only to checking voicemail among my daily routine.
The union of the snake is on the climb
Two major announcements broke this week for nostalgic fans like me: At MWC, HMD Global (which now owns the rights to make Nokia phones) announced that they are bringing back the classic Nokia 3310 phone. They announced the retro re-launch as a “One More Thing,” underscoring the only three things that matter: its battery lasts a month, it has Snake, and it has the Nokia ringtone.
And on the other side of the world, our portfolio company CoolGames announced that they’re bringing Snake into the new generation. CoolGames is launching Snake on Facebook Messenger’s Instant Games, a harbinger of the next form of disruption in mobile gaming in my opinion.
Perhaps I fit perfectly into the demographic motivated by nostalgia. I for one look forward to the return of Nokia’s 3310, to the return of Snake, and to how this future paradigm of mobile gaming will entertain us while still letting us hold on to the things we cherish.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. I like to preach that Silicon Valley no longer has a monopoly on tech innovation. Startup ecosystems around the world have emerged and have produced many game-changing innovations over the past couple decades. Yet in one area several of these communities (not all, but many) remain in the dark ages relative to North America: employee incentive management. Readers of my blog know that one of my recurring gripes is the regulatory difficulty in granting equity to stakeholders of French startups. France, however, is not uniquely guilty. The government in the Netherlands, for example, has made granting stock options in startups so fiscally unappealing that the instrument is useless. Between bouts of complaining though, I had also promised to expand on some of the lessons I’ve learned over the years on establishing non-monetary incentives in venture-backed…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
I like to preach that Silicon Valley no longer has a monopoly on tech innovation. Startup ecosystems around the world have emerged and have produced many game-changing innovations over the past couple decades.
Yet in one area several of these communities (not all, but many) remain in the dark ages relative to North America: employee incentive management.
Readers of my blog know that one of my recurring gripes is the regulatory difficulty in granting equity to stakeholders of French startups. France, however, is not uniquely guilty. The government in the Netherlands, for example, has made granting stock options in startups so fiscally unappealing that the instrument is useless.
Between bouts of complaining though, I had also promised to expand on some of the lessons I’ve learned over the years on establishing non-monetary incentives in venture-backed startups across Europe. Many of these lessons could be applicable to innovators in any geography.
A personal story
First, a detour into a personal anecdote. When I first graduated from university with a degree in Electrical Engineering, like most clueless 22 year-olds I didn’t know which career to pursue. I just knew that I didn’t want to become an electrical engineer for a living. This was in the 90s, a period in which the default career step for new grads who didn’t know what to do was… consulting.
Despite not really understanding what management consultants actually did, I miraculously received a handful of job offers from the main firms and decided to join one which seemed like the best fit for me. No offense to this firm, which is world-class, but within three months of my first job out of college I realized that I was not the best fit for consulting.
I began spending spare weekends (spare evenings were non-existent) with a former classmate brainstorming on new business ideas. The positive energy from these sessions drew a stark constrast with my day job. I almost resigned in anticipation, but then my employer pulled a jedi mind trick on me which completely shifted my momentum:
They gave me a prize.
The partners of our firm’s office presented me with an award of recognition for my purportedly extraordinary efforts on a client engagement. It was a glass trophy, with no monetary award attached, but a plaque inscribed with my name and the words, “extraordinary achiever” or something like that.
And you know what, it worked. This glass trophy (which probably cost a mere dollar to manufacture in China) re-energized my motivation and loyalty to my firm for another year. Crucially, I was presented this award during a quarterly all-hands meeting, on a stage to the applause of the entire office. This event motivated me more than any bonus or raise ever could have. Even when I try to look back on the occasion with detached hindsight to laugh, I can still sense some of the residual pride I had felt that day.
With this demonstration of human psychology as a backdrop, and in the spirit of spurring creativity among all company-builders reading this, here are a handful of ideas to attract, motivate, and retain your employees on a startup budget.
12 cost-effective ideas to motivate your team:
Give awards. Recognize performance in a manner visible to the whole company. Prizes could take the form of inexpensive trophies, French Open or Stade de France tickets, Michelin restaurant vouchers, etc.
Hold internal competitions. For example, create an 8-week internal hackathon comprised of cross-functional teams (1 salesperson, 1 developer, 1 designer) to produce a viable new revenue line for your company. Teams present their creation in front of the company at the end of the period. Allocate one hour every Friday morning on company time for teams to collaborate. Pride and ego will probably encourage teams to work on their project outside of company time. The winning team receives a prize, but the real winner will be your startup.
Invite a star performer to join a board meeting on occasion (for those whom would enjoy this and not feel intimidated by it).
Grant extreme flexibility in work arrangements: let employees work the hours they wish, from the location they wish, and measure them solely on deliverables, not “office time”.
Create a warm and fuzzy office environment where employees enjoy spending time. Let employees decorate their own desk, provide free monthly catering from a company like La Belle Assiette (I’ll even give you a 40€ voucher if you’re in Belgium, France, Germany, or UK). Or consider relocating your office to a place like Station F. I recently visited one office that put a barbershop in a side room with a barber on-demand which I thought was really cool.
Invite a visiting speaker once a semester, such as a Silicon Valley type on vacation, or a developer to talk about the latest techniques in Rails, or anyone that might be of interest to the staff.
Be creative in granting job titles. Job titles cost the company virtually nothing yet can deliver immeasurable perceptual value to the employee.
Give employees the latest iPhone. As with job titles, there’s an arbitrage opportunity here between the perceived value vs. cost of free smartphones.
Hold periodic company retreats to brainstorm on strategy in a remote environment like a wine-tasting outing, a farmhouse, a kayaking trip, etc. The key is that everyone be invited to contribute to the discussion. You can abandon company hierarchy for a day.
Empower your employees. Give them some autonomy and the ability to fail without repercussions. To the extent possible, allow them to control their own budgets up to a certain limit.
Communicate as openly as you can about the opportunities and challenges facing your business. Twitter and Medium founder Evan Williams is frequently praised by his employees who remain fervently loyal to him. Keeping employees in the dark is a recipe for underperformance.
Make your employees feel that they’re a part of something big. Treat your employees like fonctionnaires if you want to run your startup like a government agency and go nowhere.
The Bridge
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at 
