David Lee

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Ten Things I Think I Think - 2014

With a hat tip to Peter King, whose format I’ve used before:

1. I think 2014 was a great year for Bitcoin.

No major security failures. No systemic loss of confidence, i.e., price dropping to single digits.

Increased merchant adoption:

Healthy regulatory scrutiny:

...

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The Do’s and Don’t’s of Venture Investing

When I first started investing, I got a lot of advice. Most people had the same thoughts on what to look for - the “Do’s” of venture investing. None of these were surprising and remain the case today. Do:

  • work with great founders;
  • look for big markets;
  • yada yada

And many gave me advice about what not to do - the “Don’t’s.” Here are some the “Don’t’s” that I’ve heard along the way. Don’t:

  • invest in married founders;
  • invest in single founders (i.e., no second founder);
  • invest in non-technical founders;
  • invest in founders that you can’t drive to;
  • invest in a company where the person who came up with the idea is not the person who executes on the idea;
  • invest in music startups;
  • invest in hardware.

I learned the hard way that there are no “Don’t’s” in venture investing. If you take this advice literally and categorically, you can miss on the companies that really matter. These...

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More on Biz Dev Intros…

We frequently get asked for email introductions to business development partners. Inspired by Roy Bahat, I wrote a tweetstorm on some best practices. See below.

In general, you should assume that the business development partner has (1) very busy people and (2) most likely, little incentive to meet you (unless you are the Startup Du Jour that everyone wants to meet). If they have any decision-making authority or key influence, these people have their OKRs and are motivated to execute on those. Your idea may in fact be incredibly lucrative or “strategic” to that partner - but if that idea doesn’t resonate with that executive’s 3 top goals, you may not get much mindshare. (The previous two sentences apply mostly to big companies). That said, there are ways to capture their attention and maximize chances of meeting. Here’s the tweetstorm with some additional color:

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Good Listeners

“Entrepreneurs are often given two pieces of contradictory advice: persistence and flexibility. Have a vision and pursue it through years of people telling you you’re out of your mind. Or, be flexible: look at data, iterate, and change based on the signals you’re getting. There isn’t an actual algorithm. You have an investment thesis about why this project is likely to work and have some outside result, and usually that’s expressed in a set of statements and hypotheses, that if you’re right about, adds up like a logical proof and gives you the output you’re looking for. And you can have varying level of confidence in how these pieces are adding up and supporting your theses.” “The challenge is to follow them both, but know which advice is most appropriate for which situation. You must know how to maintain flexible persistence.” -Reid Hoffman

I spoke at Startup School a few weeks...

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Under the Radar

I would rather be in the cycle when people underestimate us, because I would rather be underestimated. Then we can really excite and amaze people. I think a lot of people are underestimating us.

-Mark Zuckerberg, Sept. 11, 2012

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Inflection Point

People ask us all the time if we’re in a “technology bubble.” I’m not sure what that question means so I try to think about it through a different lens. The key question I ask is whether one should be optimistic or pessimistic for the near- and long-term trends in technology. Peter Thiel has some incredible thoughts on optimism versus pessimism.

When it comes to the long-term, I’d argue that there has never been a better time to be more optimistic about technology. But that’s just one opinion. Hard technologies like drones, virtual reality, cryptocurrencies, life extension and others are like a Rorschach Test - one can be either optimistic or pessimistic of whether they will be valuable and/or create value.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into...

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My Favorite Quote, Recently

“I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.”

-Charlie Munger

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Shameless and Shameful

I tweet frequently about our portfolio companies’ products. It’s a little shameless and shameful at the same time. I get annoyed when others do it so I don’t know why I still do it. But whatever.

The main reason why one would get annoyed is two-fold. First, there’s an obvious financial self interest in doing it. Second, you don’t know if the person actually likes or even uses the product s/he’s tweeting about. So there’s that.

Having said that, here are a few products built by SV Angel portfolio companies and why I like them and use them every day.

Snapchat

The first app update that I love is Snapchat’s new text feature. I use Snapchat regularly even though I’m of American Beauty age. Communicating with pictures was a fun way to chat (along with Stories, which I like). But by simply swiping right, I can text as well as snap.

The prior two sentences sound like marketing BS. But I’m...

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The Best Thing I Learned in Law School - David Boies

David Boies is one of - if not the - most brilliant lawyers in the past 20 years. He’s certainly one of the most celebrated, having argued US v. Microsoft, the landmark case that decided that Microsoft was liable as a monopolist and Bush v. Gore, which effectively decided the US 2000 Presidential election.

I can’t remember where he said the following. But I recall his saying effectively that he would take any complex litigation and boil it down to five key issues. If he didn’t win on those, the rest didn’t matter. He needed to master those issues, understand the other side’s arguments better than his and win on those issues. The rest didn’t matter.

That left a lasting impression on me. Boies essentially made the complex simple - something that is really hard to do without making it simplistic. For example, not that I am a master negotiator but the first sign of an inexperienced...

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Back to the Future

The number of startups doing really hard stuff has skyrocketed recently. Bitcoin, drones, food substitutes, 3D printing, bioinformatics, deep learning. We used to see these “science fiction” or “moonshot” startups only occasionally. Now it feels like every other startup (or at least 30%) is working on something pretty wacky.

These ideas are like old school Silicon Valley startups: Fairchild Semiconductor, Intel, Sun and Silicon Graphics. In order to work at those places (let alone start one), you needed to have one big brain - and back then, that was usually validated by an advanced technical degree. Deep technical expertise and know-how (i.e., being a smart motherf*cker) created a barrier to entry.

Similarly, the startups in today’s “moonshot” areas require unique intelligence, dogged patience and deep domain expertise (or at least, the capacity and patience to acquire that...

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