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Dropbox hires a new VP of product and VP of product marketing
After a largely successful IPO, Dropbox is adding another couple of hires today as it looks to continue its consumer-slash-enterprise growth playbook: bringing on a new VP of product in former CEO and president of Wealthfront Adam Nash; and a new VP of product marketing and global campaigns in Naman Khan.
Both have extensive experience from products that span multiple different verticals, with Nash previously working at LinkedIn and eBay and Khan spending time with Microsoft Office and Autodesk. The company went public earlier this year to a pretty successful IPO, though the stock hasn’t seen any dramatic fireworks, and has accumulated more than 500 million registered users in its decade-plus life. But it’s also gone through a kind of transition as it starts expanding into more enterprise-focused collaboration tools as it looks to woo businesses, which represent a substantial opportunity for growth for the company that started off as a dead-simple file-sharing service.
Previously an entrepreneur-in-residence for Greylock, Nash is now going to oversee a wide range of products that span consumer-focused file storage and sharing services all the way up to its Google Docs competitor Paper — each of which has a kind of consumer-born aesthetic that’s targeting use cases within enterprises, whether that’s building tools to get documents into its service or to actually helping teams spec out products within a kind of continuous document like Paper. But as it focuses on simplicity, Dropbox has to take care not to end up feature-creeping its way out of what made it successful initially, so the final product decisions may be a bit different. Naman will also inherit that challenge of marketing a consumer-oriented product that’s targeting businesses.
As Dropbox looks to continue to mature as a public company, it has to ensure that it still brings on talent that understands where it’s going now as it tries to wrangle larger enterprise customers that have a complex set of needs beyond just the typical consumer. Going public certainly helps with that credibility a little bit, but it’s hires like these that will determine what kinds of products actually make it out the door and the messaging that goes with them — and whether larger enterprises will actually adopt them.
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Nextdoor CEO is stepping down
Nirav Tolia, CEO of Nextdoor, is stepping down from his role, Recode reports. For those unfamiliar with the company, Nextdoor is like a social network for your neighborhood. Though, over the years, there has been controversy around Nextdoor’s role in promoting racial profiling. Nextdoor later rolled out a new tool to address some of the issues around racial profiling.
In an email sent to the team today, Tolia said he’s starting to look for his replacement and once that happens, he will move into an active chairman role on the board, according to Recode.
Here’s a nugget from the email, obtained by Recode:
Yet as Nextdoor evolves, the role of the CEO needs to evolve as well. The size of our footprint is growing larger and our organization is growing more complex. The time is right to find the next CEO for Nextdoor. With our board of directors, I will be leading the search to recruit a proven operator who can take our company to the next level. We will take our time to find the right person, so this process will likely take several months. During that period, I will continue to lead as CEO. When the next CEO is selected, I will become Chair of the Board where I will continue doing whatever I can to help us succeed.
Nextdoor raised $75 million at a $1.5 billion valuation last December, followed by an expansion into France in January.
Update: The company has since posted on its blog the full email:
Just over eight years ago, I was blessed to be part of a group of seven friends who conceived of the idea behind Nextdoor. We were a tight-knit, ambitious group of co-founders who believed deeply in the power of community and dedicated ourselves to helping neighbors everywhere create stronger, safer, happier places to call home.
It is amazing to see how this simple but powerful mission has inspired the company that Nextdoor is today. That first year, we worked tirelessly to convince 176 neighborhoods to adopt our platform. Since then, we have grown more than 1000X – we now serve over 200,000 neighborhoods across five countries – including nearly 90% of all neighborhoods in the U.S.
All of this has been made possible by the passion and hard work of each of our employees. Their dedication and commitment energizes me every single day. I’ve never been more excited about our team, including our recent additions of Chief Financial Officer and Chief Legal Counsel. It has been the honor of a lifetime to lead this company as CEO.
Yet as Nextdoor evolves, the role of the CEO needs to evolve as well. The size of our footprint is growing larger and our organization is growing more complex. The time is right to find the next CEO for Nextdoor. With our board of directors, I will be leading the search to recruit a proven operator who can take our company to the next level. We will take our time to find the right person, so this process will likely take several months. During that period, I will continue to lead as CEO. When the next CEO is selected, I will become Chair of the Board where I will continue doing whatever I can to help us succeed.
The future is exceptionally bright for Nextdoor. We’ve never been more well-positioned to achieve our potential, both as a business and force for good in the world. Thank you for the last eight years, this has been one of the best experiences of my life. I will always be inspired by the amazing opportunity – and worthy mission – that makes our company truly special.
With gratitude,
Nirav
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Google Cloud’s COO departs after 7 months
At the end of last November, Google announced that Diane Bryant, who at the time was on a leave of absence from her position as the head of Intel’s data center group, would become Google Cloud’s new COO. This was a major coup for Google, but it wasn’t meant to last. After only seven months on the job, Bryant has left Google Cloud, as Business Insider first reported today.
“We can confirm that Diane Bryant is no longer with Google. We are grateful for the contributions she made while at Google and we wish her the best in her next pursuit,” a Google spokesperson told us when we reached out for comment.
The reasons for Bryant’s departure are currently unclear. It’s no secret that Intel is looking for a new CEO and Bryant would fit the bill. Intel also famously likes to recruit insiders as its leaders, though I would be surprised if the company’s board had already decided on a replacement. Bryant spent more than 25 years at Intel and her hire at Google looked like it would be a good match, especially given that Google’s position behind Amazon and Microsoft in the cloud wars means that it needs all the executive talent it can get.
When Bryant was hired, Google Cloud CEO Diane Greene noted that “Diane’s strategic acumen, technical knowledge and client focus will prove invaluable as we accelerate the scale and reach of Google Cloud.” According to the most recent analyst reports, Google Cloud’s market share has ticked up a bit — and its revenue has increased at the same time — but Google remains a distant third in the competition and it doesn’t look like that’s changing anytime soon.
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Sprinklr hires former fed CIO Vivek Kundra as COO
Sprinklr, the unicorn startup best known for helping customers interpret social signals has been moving into the broader customer experience market in the last year. Today it announced is was hiring a heavy hitter as Chief Operating Officer, bringing in former federal CIO and Salesforce executive Vivek Kundra. He began working at his new position just this week.
Kundra says that he sees a company that is in a good position and poised for growth. It will be part of his job to work with CEO Ragy Thomas to make sure that happens. “When I look at the 1200 customers we have today, I see a massive opportunity to provide technology to change the way [our users] interact with customers,” Kundra told TechCrunch.
He says that, with his background, whether working under President Obama or with Salesforce CEO Marc Benioff, the focus has always been on the customer, however you defined that, whether in the context of delivering government services or selling cloud software.
He said that to achieve that you have to be ruthlessly focused on execution. “Ideas are cheap, but how do you bring them to life in a way that inspires and motivates? I think that’s really important,” he said.
It’s worth noting that Kundra is not the first COO, however. The company hired Tim Page, who was a founder and COO at VCE before joining Sprinklr in 2016. That was apparently not a good fit.
Thomas says that landing Kundra was part of an extensive 9-month executive search where they looked at people who had worked at SaaS companies that had scaled over a billion dollars in revenue, concentrating on Salesforce, Workday and ServiceNow. “If you look at people in the driver’s seat at those companies, there is a finite number of people. Salesforce is a great company and a great partner. That experience is relevant and unique,” Thomas said.
Kundra pointed out that as part of his responsibilities at Salesforce he built a business unit from scratch that included driving adoption for the company’s Government Cloud and other verticals. “Now I have ability to draw on those experiences,” he said.
Firming up the COO position, much like the CFO, is crucial ahead of going public. With the company valued at $1.8 billion in 2016, they would seem to be of sufficient size to make that move, but Thomas wasn’t ready to commit to anything definitive (much as you would expect).
Instead, he talked of building a strong foundation as preparation to become a public company at some point. “It’s a question of when, not if [we go public], but for a company of our size and scale, it’s logical for us to go public. We aren’t talking about when and how, and we are trying to pour a strong foundation [before we do]” he said. Bringing in Kundra appears to be part of that.
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Facebook united
Facebook was a mess. The independence it dangled to close acquisition deals with Instagram and WhatsApp turned the company into a tangle of overlapping products. Every app had its own messaging and Stories options. Economies of scale were squandered. Top innovators led mature products already bursting at the seams with features while new opportunities went unseized.
Facebook was effectively drowning in its own success because the different arms couldn’t coordinate to paddle in the same direction.
But today Facebook announced its biggest reorganization ever, which could cut the redundancy, apply talent to fresh problems and unite the company under a common banner.
Putting the family first
Chris Cox, Facebook’s chief product officer, will fly that flag. He now oversees the “Facebook Family of Apps,” including Facebook, Messenger, Instagram and WhatsApp. Messenger’s VP of Product Stan Chudnovsky will take over as head of Messenger, replacing David Marcus, who’s moving to lead a new blockchain group at Facebook (more on that later).
Facebook’s head of News Feed Adam Mosseri is taking the Instagram VP of Product role, taking over for Kevin Weil, who’s going to Marcus’ project. Mosseri is replaced by Facebook VP of Product Management John Hegeman. Meanwhile, Facebook’s head of Internet.org Chris Daniels will take the lead role at WhatsApp, recently vacated by Jan Koum as he departed the corporation altogether.
Image via Recode
These changes could reduce the autonomy of Instagram and WhatsApp, at least in philosophy if not in formal hierarchy. That might make them less appealing places to work, after WhatsApp veterans like Nikesh Arora were passed over in favor of an installed Facebook exec. It could spook future acquisition candidates, who might see the reorganization as Facebook reneging on its promise of independence. And it could hinder the apps’ role as hedges against harm to Facebook’s core brand. Many users don’t realize they’re owned by Facebook, and therefore didn’t extend to them the backlash about recent privacy scandals.
But Facebook will gain the ability to execute a more coherent strategy. Mosseri, a long-time member of Mark Zuckerberg’s inner circle, will bring to Instagram his experience turning News Feed into one of the world’s most popular inventions as Instagram is hoping to ramp up monetization now that it’s achieved utter dominance over Snapchat in photo sharing. Few know the Facebook playbook better than Mosseri, who could help Instagram get out ahead of problems he’d been in the thick of, like fake news and declines in original sharing.
Daniels’ days connecting the developing world fits well at WhatsApp, whose users across the globe often deal with slow mobile networks. This also leaves room for new blood at Internet.org. It’s now connected 200 million people to some form of the internet, but its Free Basics app has been banned in several countries over net neutrality concerns and partners have pulled out over sustainability concerns. WhatsApp, too, is ready to monetize, having recently launched its WhatsApp for Business product, and Daniels’ background in biz dev and partnerships at Facebook around the IPO could serve him well.
Mark Zuckerberg discusses the Facebook family of apps at F8 2015
But more important than their siloed efforts is what a more unified family under Cox could accomplish. Over 2016 and 2017, all four apps launched isolated Stories products. While Instagram’s and WhatsApp’s took off, Facebook’s and Messenger’s felt absurdly redundant and underpopulated. It took until late 2017 for Facebook to realize it should synchronize Stories across Instagram, Facebook and Messenger so users could post once to their audiences everywhere.
The reorg could prevent Facebook from haphazardly tripping over itself in an attempt to seize on emerging trends. As visual communication becomes the new Facebook mandate, the company could similarly align its efforts in augmented reality, ephemeral and encrypted messaging and e-commence tools. Mosseri and Daniels can implement the Facebook strategy and shield their apps from the same old pitfalls. Instagram and WhatsApp have instituted themselves in their respective markets, and now have the leaders to make them well-oiled cogs in the Facebook machine.
Move fast and shake things up
Few hires have had the impact at Facebook of Marcus and Weil. The former president of PayPal, Marcus has brought Messenger from 200 million monthly users in 2014 to more than 1.3 billion now. He successfully managed the forced migration of users off Facebook’s chat feature to Messenger, laid the foundation for advertising and business tools and turned the app into a platform for games and useful utilities (beyond the initially half-baked bots).
Weil, formerly SVP of Product at Twitter, where changes came at molasses pace, turned Instagram into a rapid-fire launcher of new features. Most significantly, he implemented Zuckerberg and Instagram CEO Kevin Systrom’s plan to copy Snapchat’s Stories. Instagram was growing stale, showing just the occasional highlights of users’ lives. Instagram Stories solved that, and Weil grew it to more than 300 million daily users — much bigger than Snapchat’s whole 191 million user audience. Meanwhile, using Stories to spark conversation, Instagram Direct grew into one of the most popular messaging apps.
But today, Messenger and Instagram have begun to feel bloated. Marcus had to announce a plan to simplify the chat app at the start of 2018 after its version of Stories, called Messenger Day, steamrolled the rest of the product’s design. The camera, games and bots got as much space in the navigation bar as the core chat product. Last week Messenger revealed a redesign that refocuses on… messaging, giving the app a sensible roadmap. Instagram, now having effectively won the Stories war with Snapchat and having acclimated users to an algorithmic feed, left Weil without as many urgent changes to make.
If Facebook wasn’t careful, it could have lost these leaders to the CEO or COO role of a growing startup, or seen them leave to launch something of their own. Marcus had already taken a board seat at crypto giant Coinbase, while Weil took one at exercise community Strava.
Kevin Weil (Instagram) at TechCrunch Disrupt NY 2017
That’s why it was so wise to give Marcus the latitude to build a new team of fewer than a dozen, including Weil, focused on finding how Facebook could take advantage of the blockchain. It’s a massive, open new problem space in which to operate. One that needs visionaries in both product and business.
It’s unclear what they’ll build together, but there are plenty of opportunities.
They could explore payments facilitated by the blockchain’s lack of transaction fees. Messenger and Instagram both added native payment systems recently. Cutting out the credit card companies could be a lucrative shot for Facebook. And micropayments could open new ways to tip creators or compensate news outlets. Cloud storage based on blockchains could help Facebook cut its massive server bills. And the decentralized nature of the blockchain might unlock new paradigms for social networking with increased autonomy that might threaten Facebook if invented elsewhere.
Perhaps they’ll conclude Facebook doesn’t need the blockchain. That’s fine. The risk would be leaving the space unmined and ripe for someone else’s taking.
Facebook has lasted this long by identifying new threats of disruption, and thwarting them with its build, buy or copy strategy. Streams like FriendFeed and Twitter? Facebook built News Feed. Photos and chat? Facebook bought Instagram and WhatsApp. Ephemeral content? Facebook copied Snapchat.
The reorganization recognizes how Facebook had become a danger to itself — disruption through internal redundancy and wasted chances. It saw the discombobulated wings of Google lead it to massive failure in messaging, with a half-dozen chat apps all competing while confusing users. And it saw how internet giants like Microsoft and Apple ignored social because it was outside their wheelhouse, only to end up sharing the titan’s table with Facebook.
Zuckerberg loves to say the journey is 1 percent finished. Today Facebook proved it’s always looking for a new finish line.
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WhatsApp CEO Jan Koum quits Facebook due to privacy intrusions
“It is time for me to move on . . . I’m taking some time off to do things I enjoy outside of technology, such as collecting rare air-cooled Porsches, working on my cars and playing ultimate frisbee,” WhatsApp co-founder, CEO and Facebook board member Jan Koum wrote today. The announcement followed shortly after The Washington Post reported that Koum would leave due to disagreements with Facebook management about WhatsApp user data privacy and weakened encryption. Koum obscured that motive in his note that says, “I’ll still be cheering WhatsApp on – just from the outside.”
Facebook CEO Mark Zuckerberg quickly commented on Koum’s Facebook post about his departure, writing “Jan: I will miss working so closely with you. I’m grateful for everything you’ve done to help connect the world, and for everything you’ve taught me, including about encryption and its ability to take power from centralized systems and put it back in people’s hands. Those values will always be at the heart of WhatsApp.” That comment further tries to downplay the idea that Facebook pushed Koum away by trying to erode encryption.
The move comes 3.5 years after WhatsApp’s acquisition, meaning Koum may have vested much of his stock and have fewer financial incentives to stay. It’s currently unclear what will happen to Koum’s Facebook board seat that WashPo says he’ll vacate, or who will replace him as WhatsApp’s CEO.
One possible candidate for the CEO role would be WhatsApp business executive Neeraj Arora, a former Google corporate development manager who’s been with WhatsApp since 2011 — well before the Facebook acquisition. A source described him as the #4 at WhatsApp.
Values misaligned
Koum sold WhatsApp to Facebook in 2014 for a jaw-dropping $19 billion. But since then it’s more than tripled its user count to 1.5 billion, making the price to turn messaging into a one-horse race seem like a steal. But at the time, Koum and co-founder Brian Acton were assured that WhatsApp wouldn’t have to run ads or merge its data with Facebook’s. So were regulators in Europe, where WhatsApp is most popular.
A year and a half later, though, Facebook pressured WhatsApp to change its terms of service and give users’ phone numbers to its parent company. That let Facebook target those users with more precise advertising, such as by letting businesses upload lists of phone numbers to hit those people with promotions. Facebook was eventually fined $122 million by the European Union in 2017 — a paltry sum for a company earning more than $4 billion in profit per quarter.
But the perceived invasion of WhatsApp user privacy drove a wedge between Koum and the parent company well before the Cambridge Analytica scandal broke. A source confirms that Koum had been considering leaving for a year. Acton left Facebook in November, and has publicly supported the #DeleteFacebook movement since.
WashPo writes that Koum was also angered by Facebook executives pushing for a weakening of WhatsApp’s end-to-end encryption in order to facilitate its new WhatsApp For Business program. It’s possible that letting multiple team members from a business all interact with its WhatsApp account could be incompatible with strong encryption. Facebook plans to finally make money off WhatsApp by offering bonus services to big companies like airlines, e-commerce sites and banks that want to conduct commerce over the chat app.
Jan Koum (Photo: TOBIAS HASE/AFP/Getty Images)
Koum was heavily critical of advertising in apps, once telling Forbes that “Dealing with ads is depressing . . . You don’t make anyone’s life better by making advertisements work better.” He vowed to keep them out of WhatsApp. But over the past year, Facebook has rolled out display ads in the Messenger inbox. Without Koum around, Facebook might push to expand those obtrusive ads to WhatsApp as well.
The high-profile departure comes at a vulnerable time for Facebook, with its big F8 developer conference starting tomorrow despite Facebook simultaneously shutting down parts of its dev platform as penance for the Cambridge Analytica scandal. Meanwhile, Google is trying to fix its fragmented messaging strategy, ditching apps like Allo to focus on a mobile carrier-backed alternative to SMS it’s building into Android Messages.
While the News Feed made Facebook rich, it also made it the villain. Messaging has become its strongest suit thanks to the dual dominance of Messenger and WhatsApp. Considering many users surely don’t even realize WhatsApp is owned by Facebook, Koum’s departure over policy concerns isn’t likely to change that. But it’s one more point in what’s becoming a thick line connecting Facebook’s business ambitions to its cavalier approach to privacy.
You can read Koum’s full post below.
It’s been almost a decade since Brian and I started WhatsApp, and it’s been an amazing journey with some of the best…
Posted by Jan Koum on Monday, April 30, 2018
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mParticle hires Adobe’s John Sedlak as chief revenue officer
mParticle, which helps companies like Airbnb and Spotify manage their customer data, has hired four new executives — including John Sedlak, most recently a vice president at Adobe, who’s joining the company as chief revenue officer.
In addition, Kiran Hebbar (formerly CFO of Social Tables) is joining as chief financial officer, Will Rogers (previously an engineer at Etsy) has been named chief information security officer and Aurélie Pols (who worked as data governance and privacy advocate at Krux Digital) is the new data protection officer.
Sedlak told me that in his roles at Adobe and Oracle (which he joined through the acquisition of BlueKai), he saw how the big marketing software players are trying to build comprehensive marketing clouds, often created through multiple startup acquisitions.
“They would constantly go to market and tout the benefits of the end-to-end stack, when I began to notice that there were many best-of-breed point solutions out there,” he said. “I got to see the power of standalone companies who are innovating ahead of what the big guys were doing. I’d put mParticle on that list.”
In the years since I first wrote about mParticle in 2014, a handy acronym has emerged to describe what the company does — CDP, short for customer data platform. Basically, CDPs like mParticle allow companies to unify all their first-party data, creating a single view of the customer.
Sedlak contrasted mParticle’s approach with older data management platforms, which he said weren’t built to connect customer data across all their interactions on different devices.
“They were originally built to ingest first-party cookie data coupled with third-party data,” he said. “They never fully contemplated the notion of a true cross-device world and I think [co-founders Michael Katz and Andrew Katz] knew that in 2013 and said, ‘You know we’re going to start solving for that now.’”
As for what hiring Sedlak will do for the company, he said one of his goals is to bring on even bigger customers: “I think mParticle can drive incremental or discrete value … to Fortune 50 marketers who I personally have done business with in the past, where I see an opportunity for us to significantly augment their current investments in the marketing cloud platforms.”
CEO Michael Katz, meanwhile, pointed out that two of these hires are focused on security. With the recent Facebook scandals discussions and Europe’s adoption of GDPR protections, there’s “a really healthy conversation around the importance of data control and governance,” and he said these hires will help mParticle build the tools that allow businesses to “put customer privacy and data security at the forefront of their business practice.”
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Former DreamWorks exec Shawn Dennis joins GoldieBlox as president
GoldieBlox, a startup looking to get girls hooked on engineering and other STEM fields, has hired Shawn Dennis as its first president.
Dennis was most recently the head of brand and franchise development at DreamWorks Animation and also worked as the chief marketing officer at Mattel’s American Girl. She’s also been on the GoldieBlox board of directors since 2016 — founder and CEO Debbie Sterling told me she’s been “not-so-secretly hoping all along that one day Shawn would come and help me run this thing.”
Sterling said that while GoldieBlox is usually described as a toy company, she’s always had a vision for the Goldie character to become someone who would “inspire girls around the world.”
“I started it really as a social mission: I wanted to close the gender gap in STEM,” she said.
And yes, selling toys where girls can build their own machines is part of that mission, but so is the GoldieBlox YouTube channel and a partnership to produce chapter books with Random House.
Part of Dennis’ role at GoldieBlox will be to lead licensing and partnerships (apparently there’s an animated show in the works, as well) and to create what she described as “an ecosystem with girls at the center.” She added that things like YouTube are key for helping the company open “two lanes of communication,” so that it’s not just talking to parents but girls as well.
“It’s time again to reinvent what girlhood means,” Dennis said.
In addition to handling licensing, she said she’ll be managing much of the company’s day-to-day operations, freeing Sterling to focus on the long-term vision and on advocating for that vision. Dennis’ tenure at both DreamWorks (where she was involved in launching franchises like Trolls) and American Girl has given her plenty of experience with building brands for girls, but she added,” I will be running the business and building the business. I will not be the face of the company — that needs to be Debbie.”
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Here’s what you’ll learn at Atrium’s fundraising workshop
Justin Kan is qualified to teach you how to pitch, and isn’t shy about it. Having raised about $90 million for a few companies and sold his startup Twitch to Amazon for almost a billion dollars, not being shy is actually part of what Kan teaches. His legal services startup Atrium today officially launches Atrium Scale, its free Series A fundraising workshop that’s helped eight startups raise $100 million since it started in beta five months ago. The two-day in-person seminar includes pitch coaching, intros to investors and mentors, follow-up online pitch deck help, legal advice, Amazon and Google Cloud credits and tax and accounting services.
I went through Atrium Scale myself, pretending I was the founder of a hypothetical startup that replaces your phone’s contacts app. While the lectures were full of valuable tips, you can get a lot of those from instructional blog posts by Kan and other VCs. But the small group Q&A and coaching with entrepreneurs who’d successfully raised did a remarkable job of improving attendees’ pitches and the esoteric song-and-dance necessary to get investors to part with their cash.
Atrium co-founder Justin Kan
Here’s a breakdown of how Atrium Scale works:
- When: Once per quarter over a Saturday and Sunday
- Where: Atrium’s offices in downtown San Francisco
- How much: Free, but Atrium hopes you’ll end up using its legal services
- Who: Startups planning to raise their Series A in the next six months, the sooner the better, who fly themselves in from all over the world
- Who gets in: Atrium selects the 10 percent of applicants most ready for venture funding. Applications can be submitted here
- Investors involved to date: Sequoia, General Catalyst, Accel, Venrock, Social Capital, Signia, KPCB, Lightspeed
- Mentors: Justin Kan (Atrium, Twitch), Holly Liu (Kabam, Y Combinator), James Richards (Teleborder, TriNet), Andrew Trader (Zynga), Ashu Desai (Make School)
What Atrium Scale teaches
The Atrium Scale method revolves around the concepts of how to pitch and when. While there are plenty of ways to show off a business, Kan recommends a calculated approach to storytelling. “When should you raise? When you can convince investors to give you money and when cash is the constraint to scaling your business,” Kan said to kick off our program.
The song
“It all starts with a narrative — 99 percent is the work of building the business, but an important 1 percent is convincing people,” Kan relays.
First, explain how the world is a certain way. Describe the problem, why it’s big and who in the market would pay for a solution. Demonstrate that you’re an expert.
Second, explain how the world is changed by your solution to the problem. Frame what’s possible for businesses or consumers once they have your product.
Third, explain how the world is new now that your solution exists. Provide metrics on traction and mechanisms for growth, and show why your team is uniquely equipped to succeed. Identify adjacent markets your product will conquer.
Unlike the frothy days of yore, “people are no longer willing to lose money on a per-unit basis,” says Kan. VCs will demand to understand your unit economics and scalable customer acquisition strategy that turns cash invested into more cash earned.
Perhaps the most important part of the pitch is practice, though. Pitch to fellow founders, investors or angels, but explicitly tell them you want feedback, not money. Running through the pitch over and over boosts confidence, A/B tests narratives and unearths questions. Know your numbers by heart so you always seem sure of where the business is heading, and define a personal pitching style that plays to your personality strengths.
Kan says it all comes down to making investors see your vision for how you’re going to become a massive company.
Atrium Scale helps here by letting you pitch in groups, as well as one-on-one with mentors. Simply being surrounded by people all trying to improve creates an atmosphere conducive to progress rather than getting defensive about criticism. There could be better homework or takeaway materials to help startups continue to improve after the workshop ended, but I heard entrepreneurs work out kinks and trim off tangents that could have derailed their pitch during a real meeting.
The dance
Where Atrium Scale shined brightest was digging into the cadence of the fundraising process. Anyone can work out a decent pitch in their garage, but it takes special know-how to navigate turning that pitch into money in the bank. This is the kind of in-group knowledge that often makes it tough for outsiders to break into Silicon Valley.
You should pitch wide, planning to talk to at least 10 to 20 investors, but knowing it can take 100 ‘nos’ to get a ‘yes.’ Pick investors not based on their firm’s name recognition but their expertise and track record in your industry. Contact investors at least three to four weeks out and schedule meetings in as rapid succession as possible. The goal is to be able to get term sheets back at the same time so you can play firms off each other and pick the best deal.
You’ll start with single partner meetings. You’ll hear back within 24 to 48 hours if they go well, and you can assume they didn’t if you don’t hear back soon. Those that like you will set up multi-partner meetings, and you should ask them what their colleagues will want to know. If that goes well you’ll be brought in for an exhaustive full-partnership pitch where they’ll try to poke holes in your business. Lots of questions means lots of interest, while few questions and VCs bored on their phones means you’re toast.
If the partnership believes in you, you’ll quickly receive a term sheet, but you don’t have to sign it right away. Since you can’t fire your investors, be sure to call their references so you’re sure which you want to work with forever. This also gives you time to go back to other firms you’ve pitched. Don’t say who it’s from, but use your existing term sheet as leverage to get them to give you one or one with a better deal.
Aim for a lead investor that will put in at least 25 percent of the round volume and then fill it out with other firms, strategics and angels. Know that the median delay for investor due diligence is 41 days, so make sure you have enough runway to wait that long after you complete the pitch process. The fundraise should last you 12 to 18 months, but be careful because your spending will expand to take up what’s in the bank. Be ready by then to show you’ve hit new milestones that de-risk your business.
The program also reviewed more advanced topics like raising money from strategic investors, equity versus SAFE financing, crooked deal terms like ratchets and liquidation preferences and how to manage your board. That one-size-fits all info is certainly helpful, but thanks to the small class size, Atrium Scale’s Q&As let founders get answers to industry-specific questions and their own edge cases.
There are plenty of people looking to help startups in Silicon Valley, but few are giving away this high-quality of education for free. Accelerators can charge 7 percent of equity and advisors can charge a percentage point or two. That can be worth a lot if the startup does well. Consultants want cash that pre-A startups rarely have. But Atrium is merely looking for lead generation and it needs them to raise money to be able to afford its legal services. That aligns the workshop well with the outcomes for the companies.
If you have a dumb business idea, no amount of turd polishing will get you legitimate funding. But for startups on to something that just need help communicating, Atrium Scale could be a quick and cheap way to boost their chances of getting picked from the crowd.
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Twitch lays off some employees as part of ‘team adjustments’
Twitch, the Amazon-owned live-streaming platform for gaming, laid off “several” people yesterday, Polygon first reported.
It’s not clear how many people were let go, but according to Polygon, probably no more than 30 people. Twitch has since confirmed the layoffs to TechCrunch.
“Coming off the record-setting numbers shared in our 2017 Retrospective, Twitch is continuing to grow and advance with success stories from Overwatch League to Fortnite’s milestone-setting streams,” a Twitch spokesperson told TC. “In order to maintain this momentum, we have an aggressive growth strategy for 2018 with plans to increase our headcount by approximately 30%. While we’ve conducted team adjustments in some departments, our focus is on prioritizing areas most important for the community.”
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