Mattermark Daily – Wednesday, September 2nd, 2015

Introducing the Mattermark Private Venture Funding Index (read more)

Yesterday, we spoke with Emily Chang at Bloomberg West about the impact of public stock market volatility on the financing options and liquidity for startups. Today, we’re releasing the initial version of the Mattermark Venture Funding Index to simplify communication of the health of the startup funding ecosystem.VentureBenchmarking_09022015.001

Read more and see additional graphs in “Introducing the Mattermark Private Venture Funding Index (^MPVX)”

From the Investors

Patrick Mathieson of Toba Capital highlights the power of Quora as a platform and twelve steps to growing an engaged community in “A VC’s Guide to Building a Startup Community on Quora

Josh Kopelman of First Round Capital realizes that in 35 years, people may never learn to drive and expands on three reasons why in “300 Baud Modems and Autonomous Vehicles

Ali Hamed of CoVenture surfaces blog posts written through 2014-15 about the pre-seed investing space to explain what it is and how we got here in “What is Pre-Seed Investing? How Did it All Get Started? What Does it Mean Now?

Elizabeth Kraus of MergeLane provides an overview of what startup accelerators are and the value they offer startups in “What Is An Accelerator and Is It Right for Your Startups?

Fred Wilson of Union Square Ventures encourages founders to figure out where they are taking their company to build a loyal, hardworking, and motivated team in “What Are We Doing?

Angela Tran Kingyens of Version One Ventures and Jonathan Libov of Union Square Ventures look at what it means for developers to create health apps, and consumers to make their choices in a sea of apps vying for their attention in “On Digital Healthcare: Part III – Health Apps

From the Operators

Julie Zhuo of Facebook describes what it means to design the beginning and why she believes it’s so important to the success of a product in “Design the Beginning

Ali Powell of HubSpot focuses on a specific feature of Mattermark that saves her time as a sales rep in “One Simple Thing That You Can Do When You Decide to Work a Lead by Using Mattermark to Follow Trigger Events

Jareau Wade of Tilt/Open details the history and future of merchant underwriting for marketplaces in “Underwriting Marketplace Merchants

Shin Inoue of ForUsAll reviews the consumerization he believes is driving innovation in the small company HR/Benefits space in “Simple, Consumer-Friendly 401(k)s Empower Small Businesses

Tim Rodber of Instant Offices offers research that shows technology startups as the fastest growing business sector in London in “The UK SME is Alive and Kicking and Driving Growth This Year.

© Mattermark 2015. Sources: Mattermark Research, Crunchbase, AngelList.

A VC’s Guide to Building a Startup Community on Quora

This guest post was written by Patrick Mathieson, who works at the venture firm Toba Capital. Feel free to reach out to him via Quora or via Twitter with feedback on this blog post.


Did you know that Quora is the #137th (and climbing) most-trafficked website on the entire Internet?https___mattermark_com_app_companies_30436

That’s approximately the same amount of traffic as Yelp, Etsy, and Flickr — and significantly more (25+ Alexa spots) than SoundCloud, StackExchange, SlideShare, and TripAdvisor. At its current growth trajectory, Quora will surpass BuzzFeed and the Huffington Post within a year.

More importantly for investors, the discussion on Quora skews heavily towards topics that are highly relevant to startup investing. Technology (5.3 million followers), Science (4.4 million), and Business (3.8 million) are the #1, #2, and #4 most-followed topics overall on the platform. Startups, Computer Science, Entrepreneurship, and Software Engineering are all in the top 35. Outside of Twitter and the comments section of Feld/Suster/Wilson blog posts, Quora is probably the number 1 place on the Internet where startup investing discussion should be taking place.

And yet, Quora is somewhat of a ghost town when it comes to investment professionals. Check out this list of the most-read venture capital writers on Quora. A few things should immediately jump out at you:

– I’m in the top 5 (as of this publication), which is absurd since I am decidedly not an authority in this field.

– Many of the folks who you would expect to be on the top of this list are nowhere to be found.

– It only takes 900 daily pageviews to crack the top 10. Not so much. You could write something in the next ten minutes that goes viral and puts you on the list by tomorrow morning.

Most_Viewed_Writers_in_Venture_CapitalWhy is the VC presence on Quora so lackluster? It appears that most of the big-name VCs joined early in 2009/2010 when the website first launched, and then mostly abandoned the network by 2011 when they realized it wasn’t growing as fast as, say, Twitter or LinkedIn. But now it’s 2015 and Quora is prospering on its way to becoming a top 100 websites in the world. Quora is the value stock of social networks, and if you’re looking for an entry price — that time is now.

But what’s the point?

Well, there are actually a ton of awesome reasons to become an active Quoran (yes, that’s actually what we call ourselves). You can:

– Meet a ton of really bright investors and entrepreneurs (both digitally and in real life).

– Learn more about technology and investing (and plenty of other things).

– Build a reputation for being helpful and insightful.

– Identify & conduct diligence on potential investments.

– Write something that can be discovered and read by people all over the world.

– Put on a huge conference attended by thousands of people.

– And so on…

To summarize everything I’ve written up to this point: Quora is an egregiously under-utilized platform for VCs and angels to interact and contribute to the broader startup community. And not merely for the purpose of building a large following. Whether you write popular answers that get read by millions of people; write surgical answers that are immensely valuable to just a few people; or merely contribute by commenting and sharing — it all deepens your connection with the community and consequently makes you a better-connected and better-informed investor.

To help you do just that, I’ve sketched out some tips below that you can employ in your Quora journeys.

12 Steps for Building a Startup Community on Quora

1) Start by lurking. The tone of the Quora community isn’t obvious from the get-go, and it’s a very different vibe than other networks like Twitter and Facebook. There’s a weird mix of earnestness and dorkiness that becomes second-nature over time (just like how people get used to the sarcastic observational brevity on Twitter). So start by spending some time reading others’ material and getting a feel for the place. There’s a ton to learn just from consuming content as a lurker for awhile.

2) Ease your way into writing. Start with topics that are decidedly non-professional. Do you run marathons? Play backgammon? Ever broken a bone? Been to Zimbabwe? Answer questions about those things. Don’t put a lot of pressure on yourself to be a thought leader in your field from day one. Benedict Evans might be a famous pundit at a16z, but most of his best writing is about history. Not only is it more interesting for him personally, but it conveys to the rest of the world that he’s, ya know, a real human being.

3) When you’re ready to write about professional topics, be ambitious. If you answer questions that are super obvious and ho-hum (“What’s a term sheet?”) then you’re really providing no more value to the world than a 2 second Google search. Instead, seek out questions that scare you. The best unanswered Quora questions should make you feel like, “Wow, I barely know anything about this — there’s no way I could write a whole post on the topic.” The right thing to do when you encounter these questions is to actually attempt to answer them.

The reason behind this is twofold: First, because the effort of filling in our personal knowledge gaps is an example of deliberate practice that helps us become better writers and investors. And secondly, because it forces us to write something thoughtful, non-obvious, and (hopefully) original. So it leads to value for both the writer and the community at large.

4) You are not the PR department for your venture firm. If you only write about how your firm “delivers value through a unique blend of operational experience, investment know-how, and entrepreneur friendliness”, you will be 1) boring, 2) inauthentic, and 3) a liar. People want to listen to actual human beings, not whitewashed venture capital robots. You know what’s way more interesting than a list of all the reasons why your venture firm is awesome? A list of all the reasons why your venture firm is horrible. Try that instead.

5) Be humble. Be brave. A big reason why more people don’t write on platforms like Quora is that they’re afraid of appearing dumb, or getting something wrong, or pissing off their boss. These fears are far out of proportion to the actual risk involved. If you get something wrong, all you have to do is edit your answer and leave a correction (don’t forget to thank whoever pointed it out!). If you annoy your boss, then just apologize afterwards. Nobody is expecting you to be perfect. And if your writing causes some readers to criticize you… well, that might actually be a good thing if it means you struck a nerve. I’m still getting hate mail for this one.

6) Identify a whitespace. Figure out what nobody else is doing (or doing well) that other people would find valuable, and do precisely that. In my case, I noticed after a year of lurking that there were practically no junior venture investors who were candid, informative, and relaxed enough to occasionally lampoon the industry. It was basically Andy Manoske and then air. So I decided to fill that void. And it wasn’t even that hard a void to fill! Most of you reading this post could spend a few months writing better answers and blow me out of the water.

The nice thing about Quora in 2015 is that there’s still a ton of white space. Want to be the VC who knows everything about healthcare IT? The #1 expert on drones? The grizzled old angel with an axe to grind? These are currently vacant positions… come on board, and they’re yours.

7) “Brand” yourself accordingly. I don’t necessarily mean this as an overt “branding” exercise. I’m just saying that you should be mindful of the impression that you want to give, and how it meshes with the white space you’re trying to fill. Example: To emphasize that I’m not overly rigid, I use a photo of me wearing obnoxious oversized glasses. If you wanted to emphasize that you’re the world’s foremost expert in _______, the text in your profile page or topic biography is a great way to communicate this.

8) Identify and replicate the commonalities in highly-upvoted answers. Most of them use bullet points, bold and italic text, short sentences, pictures, charts/graphs, and an authoritative tone. Bonus points for citing sources and/or including a “recommended reading” list at the bottom.

9) Be accessible. Readers really appreciate authors that are responsive. Advertise in your header that you welcome messages and comments, and try to reply to as many as you can. If nothing else, leave an upvote on answer comments to acknowledge that you’ve read them.

With that said: Be careful with this. If somebody’s DM or comment makes you think “hmmm, this person kinda gives off a Ramsay Bolton vibe”, it’s best to not engage. There’s such a thing as “too accessible”.

10) Engage directly. This means upvoting, commenting, and following. If you read something that you enjoyed, let the writer know. Send targeted DMs if you have something precise and specific to discuss. Be positive and polite and contribute to the conversation.

11) Pretend that you’re a professional writer. You certainly don’t have to be the next James Joyce, but having the ability to write clear & concise prose goes a long way. What do professional writers do to ensure that their work is high quality? Well, they:

– Read a lot.

– Study the style of writers they admire.

– Force themselves to write every day.

– Notice which conditions (time of day, amount of coffee, etc) elicit their best work.

– Edit.

– Edit more.

– Edit one more time after that.

A quick note on editing: The ability to revise & collect your thoughts before hitting “publish” is the dirty little trick of all writers. If you just submit your answers immediately without doing this, you’re missing an opportunity to sound way smarter than you actually are.

12) Focus on the process, not the results. A sure-fire way to lose your confidence is to obsess over pageviews, upvotes, and followers. While these things are important, they’re entirely outside your control (unless you call your mom twice a week with demands for upvotes, like I do). And even worse is to start comparing yourself against highly-followed investor-writers like Jason and David, and becoming too dejected or intimidated to even get started.

Don’t worry about any of that. Trust in karma. If you deliver value to the community repeatedly, you will be rewarded accordingly. Spend your time constructing a system that allows you to ship quality material on a regular basis, and goal yourself in terms of output (i.e. the number of informative, well-researched Quora answers per month), not the recognition you get in return.

I don’t attribute my modest following on Quora to being a good writer; I attribute it to a process that permitted me to write ~1,000 posts in the span of 12 months. This is certainly more effort than I would expect from anybody reading this article (and should tell you a lot about my inability to do anything in moderation) — but hey, if you just start with 1 post per week, you’ll have fifty within a year, which is a pretty excellent start. And if that sounds like a reasonable goal to you: How about getting started right now?

In Conclusion

Another nice thing about Quora is that you aren’t really expected to be any good at writing conclusions. Therefore, I still suck at them. The end!

This guest post was written by Patrick Mathieson, who works at the venture firm Toba Capital. Feel free to reach out to him via Quora or via Twitter with feedback on this blog post.

© Mattermark 2015. Sources: Mattermark Research, Crunchbase, AngelList.

Introducing the Mattermark Private Venture Funding Index (^MPVX)

This post is part of our Startup Funding Benchmarking Series exploring the allocation, concentration, and macro trends in the financing of high growth startups.


Yesterday, I went on air with Emily Chang at Bloomberg West to talk about the impact of public stock market volatility on the financing options and liquidity for startups. Today we’re releasing the initial version of the Mattermark venture funding index, to simplify communication of the health of the startup funding ecosystem. In researching the creation of this venture funding index, there are two graphs that provide insight into the impact of public market movement on private financings.

Over the coming weeks, months, and years we will continue to update these graphs and also begin to release more sophisticated indexing of this information (selecting a smaller constituency of companies like a “Mattermark 500″, weighting by stage, weighting by seasonal trend, and other approaches are all on the table). We look forward to building this index in public with input from our readers. Please send your feedback to editor@mattermark.com

VentureBenchmarking_09022015.001

To simplify communication, indices like the Dow Jones Industrial Average and Standard & Poor’s 500 have been created in the public markets, using various methodologies to help people easily talk about overall market movement. For now, rather than abstracting away the actual numbers into a weighted index (something we might want to do down the road to balance out the various funding stages) I will be reporting on the raw numbers and exploring the relationships between the public and private markets.

The graph above compares five years of quarterly movement of the public market, through the lens of the S&P 500 Index, with total U.S. venture funding allocated to private companies in the respective quarters. To help us zoom in on more recent market movement, I have also created a weekly view of the same information, along with a 12 week moving average to help visualize the trend.

VentureBenchmarking_weekly_09022015.001


 

Methodology Notes: ^MVPX is not yet recognized as a ticker symbol by any U.S. or foreign equity exchange. Private funding events are rarely disclosed exactly when they happen. Where possible, we have used dates provided on regulatory filings, however the majority of funding events are recording as news announcements and may take place weeks or months after the funding has closed. Aggregate numbers for past weeks may change slightly as new information is learned.

For the most up-to-date information, we recommend creating a free trial of Mattermark Professional where all this data and much more is available for download to power your own analysis.

© Mattermark 2015. Sources: Mattermark Research, Crunchbase, AngelList.

Mattermark Daily – Tuesday, September 1st, 2015

From the Investors

Mahesh Vellanki of Redpoint Ventures talks about the benefits of going public and discusses the step-by-step process required to actually go public in “The Key Advantages to Going Public and What It Takes to Get There

Zach Hamilton of Venture51 discusses options for making the growing on-demand fleet of cars more efficient in “The Second Wave of Optimization for On-Demand Drivers

Angel Investor Pascal Levy-Garboua expands on four key questions startup founders, investors and the Fortune 1000 ‘need to ask themselves’ in light of the “Uberization of everything” in “Will Your Company Exist in a Post-Uber World?

Paul Bennetts of AirTree VC covers how to avoid losing momentum by focusing on the right things at each stage of the startup game in “Avoiding the Durkin Opening in startups

Angel Investor Jocelyn Goldfein offers startups advice on how to structure their own software release process in “The Right Way to Ship Software

Leo Polovets of Susa Ventures recommends that founders have to put what’s best for the company ahead of what feels most comfortable for them in “The Road to Success Is Paved With Discomfort

From the Operators

Josh Miller, formerly of Facebook announces his new role at the White House serving as their first Director of Product in “The White House

Karen Roter Davis of Urban Engines shares some critical things to think about when changing jobs to improve the odds of your success and happiness there in “Finding ‘Good People’ When Changing Jobs

Yilun Zhang of Carvana provides a comprehensive guide with curated resources for aspiring product managers in “A Hitchhiker’s Guide to Product Management

Matthieu Vaxelaire of Mention details how diving into Monthly Recurring Revenue and churn metrics vs. marketing metrics sparked growth in “4 Ways to Increase MRR 3x in Less Than a Year

Pulkit Agrawal of Chameleon declares that ‘every product needs sophisticated onboarding’ and highlights two big problems if you believe otherwise in “The Best Onboarding Is NOT Just An Intuitive Product

In The News

Mattermark CEO Danielle Morrill discusses what the recent market volatility means for tech startups and comments on the class action suit against Uber in “What the Stock Selloff Means for Tech Startups” (Source:Bloomberg)

Nick Bilton, Columnist and Author tackles the tech bubble debate and explains why “countless people from all over want this to be a bubble and they want it to burst” in “Is Silicon Valley in Another Bubble… and What Could Burst It?” (Source: Variety)

Justin Fox of Bloomberg View wonders if the recent global market slowdown is ‘mainly the tipping point from a goods/manufacturing economy to a services economy in “Maybe This Global Slowdown Is Different”(Source: Bloomberg View)

From Mattermark

Join Mattermark’s COO and co-founder, Andy Sparks​ in Toronto, for a special fireside chat and networking event discussing SaaS growth, what a startup COO does, and how to use Mattermark for leads generation or deal sourcing.

Register to attend Monday, September 21st, at 6pm EST in Toronto

© Mattermark 2015. Sources: Mattermark Research, Crunchbase, AngelList.

Mattermark Daily – Monday, August 31st, 2015

From the Investors

Paul Graham of Y Combinator encourages founders to be as nice as they want, so long as they work hard on their growth rate to compensate in “Why It’s Safe For Founders to Be Nice

Sarah Milstein of Indie.VC describes the relationship between VCs and their LPs and why it’s important for startups to understand in “Startups Almost Never Talk About This – But They Should

Kanyi Maqubela of Collaborative Fund explores how VCs serve multiple customers, and must keep a balance between deploying capital and managing their portfolio in “Double-Sided Service Business

Boris Wertz of Version One Ventures says ‘the bootstrapping VC’ is made possible by micro-funds and provides a non-traditional route in “How to Bootstrap Your Way Into Becoming a VC

Samir Kaji of First Republic Bank believes too many founders forget to write regular investor updates and outlines the ‘appropriate communication etiquette’ in “Investing in Your Investor Updates

From the Operators

Falguni Desai of Future Asia Ventures researches the growing corporate accelerator trend and what it means for innovation at large companies. Her new study looks at corporate accelerators around the globe and also provides entrepreneurs a few pointers on what to consider before joining an accelerator. To read the report visit www.futureasiaventures.com

Serial Entrepreneur Dan Martell leans on his experiences raising venture capital to educate founders with five strategies to raise money faster in “How To Raise Venture Capital” (video)

Eric Jorgenson of Evergreen details the ‘right mindset’ for strategic alliances and how to make the tough decisions in “How to Think About All Strategic Alliances

Joseph Walla of HelloSign declares belief (even if you only have one believer) as the most important component for a startup and explains why in “Your Job As a Founder Is to Create Believers

Nate Weiner of Pocket in the First Round Review shares how keeping a team small can be an invaluable guiding principle in “The Story Behind How Pocket Hit 20M Users with 20 People

From Mattermark

Join our Mattermark 101 webinar to get a quick and fast walkthrough of all the ins and outs of the Mattermark Pro platform.

Register to attend Wednesday, September 9th, at 10:30 am PST

group

© Mattermark 2015. Sources: Mattermark Research, Crunchbase, AngelList.

Get The Information Edge

Start Your Trial Now