Team is everything – and the best team of my life

by abby Posted on May 17, 2012

This semester, I have had the life-changing, perspective-altering experience of working with Rachel Gross and Bilawal Sidhu in the best team in my life. I learned a crucial startup lesson: Team is everything.

To demonstrate how fantastic our team was, just take a look at a few of these pages, which we put together in just a few days for a special talk called “TEDxDSP: Lifehacker.”

The images are crisp and beautiful. They’re funny. They are vivid and realistic. Yet they have been thoroughly manipulated – as anyone could tell you, after a second glance. They are images that I could never recreate (on my own). They are a product of this amazing team.

Our presentation, which walked through a day in the hacked life of Alex Park (a rockstar in his own right), was only a small part of our team’s function. In fact, our major work was an unrelated program – Internship Boot Camp, a 5-week program that transformed 16 energetic, yet inexperienced USC students into driven, savvy professionals whose ability to build relationships will yield careers.

Both TEDxDSP: Lifehacker and Internship Boot Camp (IBC) were created in service of our professional business fraternity, Delta Sigma Pi. However, the question remains: why would the same team work on such divergent projects? And why were we the right team?

I think that there are several key lessons that can be drawn from our success, with a simple underlying concept: Team is everything.

1. Common values unite different personalities.
During this experience, I had the rare fortune of hand-picking my team from a pool of a dozen committed, passionate applicants. With this sort of organizational SWAT team (details of the left image will be a future entry… maybe!), commitment to the wellbeing of the fraternity was a given, but I made a point to look for immutable character traits: ability to inspire, ambition demonstrated by accomplishments, and a profound desire to give back and change lives.

Aside from those fundamental values, however, I sought everything I lacked. Personally, I am hyper-analytical and ruthlessly logical. Both Bilawal and Rachel are much more intuitive and empathetic, focusing on people instead of tasks. Their natural inclinations are to foster growth, whereas my inclination is to seek results. Bilawal and I are obsessed with technology, but he gravitates towards user experience and design and I gravitate towards functionality and logic. Rachel and I bond over social impact and entrepreneurship, but she focuses on tangibility, like a restaurant or hotel, whereas I focus on scalability, like a web service. Yet our common values allowed us to actually use the differences in our personalities.

2. Team precedes mission, but not vision.
After our team was finalized, we were tasked with figuring out what we were going to do. We literally spent weeks thinking about how to address the fundamental issues that our organization faced.  We experimented. TEDxDSP: Lifehacker was an experiment. When brainstorming for IBC, we went through countless different iterations – should it be internal or external? Should it include the entire organization, or should it be opt-in? Would we elect leaders aside from ourselves?

Ultimately, we settled on these two ideas for our semester plan, from a slate of infinite options. The two programs looked completely different from each other, but they were born from a unified vision for professional excellence and constant learning.

The Team!3. Teamwork should be joy.
Most importantly, this experience taught me what it feels like to work on a great team. Every meeting was a joy. Even when we were floundering or confused, our unique mix of personalities united by common vision meant that every meeting was tremendously productive, yet completely stress-free. Even spending 8 hours working was fun together. Teamwork was a complete joy.

Lastly, for anyone curious about the apps that we recommended in TEDxDSP: Lifehacker…

Posted in Inspiration, My Life, Startups to Watch | Leave a comment

Education is here… it’s just not well distributed (yet)

by abby Posted on March 27, 2012
Kids catch on to technology fast!

In Piriati Embera, kids have access to education up to high school.

Piriati Embera is a rural community of indigenous people in East Panama where most homes have dirt floors and reed roofs, electricity is intermittent, and entire families live on about $20 per day. Yet they have high school through Telebasica, a television program for rural communities that requires only a supervisor to go through workbooks matching the curriculum.

During spring break, I worked closely with several families in Piriati Embera on a Global Business Brigade, serving as a business and financial literacy consultant. With increasing pressure from the “outside world,” the previously independent Piriati Embera society must develop to keep up while also maintaining their unique culture. There were tons of lessons that came out of the trip, but I constantly returned to how education would be critical for the community. And how technology could facilitate that.

Telebasica is one wonderful example of how technology is distributing education, but there is more change to come. Several weeks ago, I attended an event with X-Prize CEO Peter Diamandis where he mentioned one of the latest education prizes. The vision is beautiful. Imagine a teacher that not only knows your academic progress, but also your interests and your preferences – so it can teach you on your terms, whether that is in terms of baking or baseball.

Education Game X PRIZE

There is a global shortage of great teachers. If an online or mobile gaming platform existed that was able to reliably teach students in a compelling and engaging fashion, it would transform education around the world for anyone with a smart phone. Imagine if learning a subject was fun and done with your best friends.

Is this vision too far out? Not at all! When I was in Panama, we saw that people had Blackberrys… despite not having electricity to charge them (spurring an industry in itself). Telecommunications technologies are absurdly pervasive in developing nations. Moreover, there are increasing efforts to conquer the “digital divide.” One Laptop per Child has already put laptops in the hands of over 2 million students and teachers in 42 countries.

We aim to provide each child with a rugged, low-cost, low-power, connected laptop... With access to this type of tool... they become connected to each other, to the world and to a brighter future.

In the words of William Gibson, “The future is already here. It’s just not very evenly distributed.”

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Using TripIt to connect a generation of jetsetters

by abby Posted on December 3, 2011

By the end of my semester in Milan, I will have visited 18 different cities in 10 different countries. It has been an insane amount of travel, but it is only the extreme case of a larger, much more pervasive trend in my life – in our lives.

Even in my normal life, I am constantly on the move. Home is Chicago. School is Los Angeles. Summers are Shanghai, New York, San Francisco. Week-long trips to Nicaragua, Panama, and so on. And I’m not the only one – my friends are equally mobile. The 200 students who made up my high school class have scattered across the country, and are now floating around the world.

This creates two simple desires:

  1. When I get wherever I’m going, I want to know if any of my friends are there.
  2. If my friends have been where I’m going, I want to know what they thought.

Of course, I’m not the first person to recognize these desires. There have been a deluge of startups dedicated to solving these problems. Arrived, a startup that I have watched excitedly for months, just launched and is tackling the first desire. During my travels, I have tried Trippy with some success, though it seems to require too much effort from the recommender when addressing the second desire. The latest I’ve seen, TripBirds, is set to launch soon and will be joining me at LeWeb.

But these startups are missing something very powerful, and that is my favorite travel app of all: TripIt.

Using TripIt is a wonderfully simple process:

  1. I book a travel arrangement, like a flight, train ride, or hotel stay, and then forward the confirmation email to TripIt.
  2. TripIt translates the email into an event, which is automatically imported into my iCal (or other calendar), including confirmation numbers, seat numbers, etc.
  3. When I travel, I have the information at my fingertips exactly when I need it.

TripIt is the most powerful travel application that I’ve seen, and it isn’t just because it has made my travel so much more convenient. It’s because TripIt has data, on the city/region level, of where I am and where I’m going.

Of course, these days Facebook has a lot of the same information, and it is Facebook that drives Arrived, Trippy, and TripBirds. Facebook, with a user base exceeding 550mm users, is obviously a gargantuan source of data as well. But TripIt distinguishes itself by automatically collecting predictive data on where their users will be. Plus, its information is more complete; in my case, TripIt knows a lot about every time I make a major move.

In other words, TripIt has data on the future. What a great basis for making plans! Sure, it’s not as big as Facebook, but it represents an extremely valuable additional layer of data.

I want to spend more time learning about TripIt and the data available through its open API. I’ve contacted TripBirds already about the possibility of adding TripIt (currently, they have Facebook, Foursquare, Instagram, and Gowalla), but more broadly, if anyone is building tools for travelers, take a moment to think about TripIt – and get in touch with me, because I would love to help you think through it.

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Goal reached. See you in Paris!

by abby Posted on November 11, 2011
Eiffel Tower Snack Bento by Sakurako Kitsa

With the combination of dramatically reduced costs (e.g. free ticket!) and the incredible generosity of a few friends, I’ve reached my goal! Exceeded it, in fact, with plenty of time to spare.

Thank you so much to all the wonderful people who made this trip possible. I’m insanely excited to attend LeWeb. During the conference, I’ll probably have quick updates on Twitter, but as someone who values thoughtfulness over expediency, the real good stuff will probably appear on this blog afterwards.

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I’m going to Le Web!

by abby Posted on November 9, 2011

No, I haven’t reached my target yet… but it has gotten a whole lot easier.

After starting to fundraise, I sent another email to Geraldine Le Meur, who is organizing Le Web, explaining that I was trying to raise money – but if I volunteered at the conference, could I earn an even further reduced price? She didn’t put me to work. But she did one better – she gave me one of her personal invitations, meaning that I can attend for FREE!

Of course, there are still the other major expenses of airfare and hostels, but I have never been so happy to revise down a fundraising goal:

Thank you SO much to all the people who have ALREADY contributed to making this dream come true! Now, with the help of Geraldine, I am so much closer to my goal and I am dead set on making it to Paris in December. Where there is a will, there are wonderful people who will help you along your way.

Posted in Uncategorized | 2 Comments

Le Web: Chasing the dream… all the way to Paris

by abby Posted on November 8, 2011

Update: Thanks to the generosity of Geraldine Le Meur, I have revised down my fundraising goal!


Hello friends!

My dream is to improve the world through technology, internet, entrepreneurship, and finance – and I am sitting on an incredible opportunity to chase that dream. I recently found a way to attend Le Web, the biggest tech event in Europe, but I need $1000 by Nov 11. And I’m hoping that you can help.

Why Le Web?
Le Web is Europe’s largest and most influential tech conference. The lineup is unbelievable, including rockstars like Eric Schmidt (Exec Chairman and former CEO of Google) and Sean Parker (co-founder of Napster, founding president of Facebook… you know, Justin Timberlake in The Social Network). I know that this conference would be absolutely incredible for me.

The Details
There’s a deadline because I need to buy my student ticket by Nov 11, and I can’t afford to front the money if I’m not sure that I can pay for the entire conference. The $1000 will cover the conference fee (€300), airfare to Paris (~€200), a hostel for three nights (€30-40/night), and misc. travel expenses like the annoying €12 airport shuttle.

You’ll notice that this doesn’t add up to $1000, even given the weakening dollar. During my trip, I’ll carefully track my conference-related expenses (excluding personal stuff like food), and if I’m fortunate enough to raise extra money, I will donate it to a charity yet to be determined. I’ve set a $1000 goal partially because I want to make sure I can cover everything, even if prices fluctuate – but more importantly, because I believe in setting (and achieving) high goals.

If you are able to help out a little, please leave a comment – I’m not sure that ChipIn (the free service I’m using) allows me to track who’s contributing, and I want to make sure I know who to thank. Words cannot express how grateful I would be for the opportunity to go to Le Web.

Thank you so much!

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Why Not Invest with Debt?

by abby Posted on September 29, 2011

In establishing a VC fund at USC, my partners and I are constantly asked about how we want to invest. Inevitably, we are asked about debt. I suspect it is even more frequent for us because “socially conscious” startups are often non-profits, which cannot be financed through equity. Admittedly, I’m quite biased because I’ve always thought equity is “sexier” than “boring” debt. But I am convinced that equity logically makes much more sense.

Let’s start with a few basic definitions:

Debt: A method of investing where the investor has a contractural right to pre-determined payments (e.g. bank loan).
Equity: A method of investing where the investor is a partial owner of the company and is compensated as a percentage (e.g. stocks).

Obviously, this is an over-simplification, but from an investing perspective, these definitions capture the core differences.

Generally, people ask us about debt because it is considered “less risky.” After all, you are guaranteed payments, whereas equity is subject to market randomness. For startups, however, this simple comparison isn’t appropriate. Instead, let’s look at outcomes in terms of upside and downside potential.

Downside Upside
Equity Very Exposed Very Exposed
Debt Some Exposure Not Exposed

Downside
As a debt investor, you might think you are not exposed to downside risk at all, since you have a legal guarantee of payment. However, in reality, a worst-case scenario is rough for debt investors too. If a company goes to 0 and defaults on their debt, no one gets paid anyway. Moreover, in a rough patch, a company often negotiates with its debtors to reduce payments. Things are not quite as “guaranteed” as they seem.

Notably, being early-stage changes the game a little. Since these companies are “do or die” compared to large corporations, the risk of default is much higher. Thus, the downside risk profile of debt and equity is actually quite similar. At the end of the day, if the company flops, everyone is in trouble.

Upside
If the company does well, you want to hold equity. Why? The upside of debt investors is capped; the most you can make has already been negotiated through your interest payments. For equity investors, however, the sky is the limit – you get your percentage regardless of whether the company is valued at $100 or $100mm.

Interest Payments as a Disadvantage of Debt
There is one final reason equity is superior to debt for our fund. At the most basic level, debt imposes interest payments on a company that probably has no revenue, let alone cash flows. For a high-growth company, that money would be best spent reinvesting in the company. Why would you pull cash out of a company that you just invested in?

At a deeper level, equity more easily matches a startup’s needs. Typically, debt requires regular interest payments regardless of how the company is doing, whereas equity allows the company to retain capital until some future exit. The trajectory of an early-stage company is not predictable, and through equity, entrepreneurs and investors can continually make decisions that offer capital for the startup and returns for the investor when appropriate.

I hope this provides a compelling rationale for using equity-only investments for the fund. Equity offers maximum upside potential with comparable downside potential, while also better aligning with the entrepreneur’s interests.

Of course, all of this is me theorizing, so I would love feedback – especially cases of debt or equity investments that went south.

EDIT: In venture capital, liquidation preferences definitely change the nature of this upside/downside analysis. Going into detail about liquidation preferences might be a little too technical for this blog, but for anyone really interested in VC, it’s definitely worth learning about. Here’s a video with some information about liquidation preferences… can’t remember where exactly, but the whole video is a good primer on VC.

Posted in USC Fund | 1 Comment

Becoming a 30-Second Genius

by abby Posted on September 25, 2011

Next spring, I’m expecting to join the Marshall Case Team (MCT), which travels the world competing in case competitions on behalf of USC Marshall.

Why? For me, it’s simple: mental models.

There are a million other reasons to join MCT or even work at a management consulting firm: prestige, networking, all-expense-paid travel, and tremendous diversity of experience. But my answer is that if you’ve decided it’s time to learn, rather than earn, there is no better place to learn a bunch of mental models that may drive your success in the future.

Warren Buffett once said that his partner Charlie Munger has “the best 30-second mind in the world.” How? As Munger said at USC (video|transcript):

You’ve got to have models in your head. And you’ve got to array your experience—both vicarious and direct—on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life.

Munger has collected a broad network of mental models that allow him to quickly assess and understand a variety of situations. If you accept that, the next question becomes: how do I acquire all those mental models?

My theory is working through tons of cases. For example, simply preparing for Marshall Case Team has given me a tiny sliver of insight into the mental exercises that consultant perform every day. On any given case, you must quickly assess what is or is not important, which means that you eventually develop models to efficiently guide you through the process.

Are cases a complete education? Of course not. Munger uses models from many different schools of thought, from physics to philosophy. I want to do the same. But cases are an amazing way to train yourself on the mental models in business. Even if I never actually pursue management consulting as a career, the preparation alone will help me gear up to become a 30-second genius.

As an aside, the article that I linked earlier (Is it time for you to earn or to learn?) is about working at a startup, not as a consultant, as an opportunity to learn. Nevertheless, I think the learn/earn dichotomy is a useful tool. Mental model, if you will.

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Chris Sacca on Foundation

by abby Posted on August 28, 2011

Bouncing from a $12mm to $-4mm net worth and back, leading Google’s stealth data center grab, and ultimately becoming a venture capitalist, Chris Sacca is one of the most fascinating people I have encountered online.

He was recently featured on Foundation, a show produced by Kevin Rose (founder of Digg) with high-quality, in-depth interviews with entrepreneurs like Jack Dorsey (Twitter, Square) and Tom Conrad (About.me).

Here are a few key segments particularly applicable to venture capital:

Getting startup cash through law school financial aid (1:30)
From $12mm to $-4mm (4:45)
Creating a random company to get legit work (9:50)
Building a fund for the deal of a lifetime (29:00)
What to look for in a startup (45:03) – notes below

  • Is this a product I can be helpful with?
  • Focus on entrepreneur as a person
    • Has had a shitty job
    • Lived, traveled, or studied abroad
    • Play sports, have balance in life
    • College isn’t a prereq, but there’s a correlation between doing well in college and afterwards
    • Would I have these guys up at my house?
  • Money is really made by doubling down on follow-on rounds
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Feature vs. Company

by abby Posted on August 24, 2011

Since reading Mark Suster’s post, Explaining FNAC: Feature, Not a Company, I’ve been thinking about the concept of feature vs. company as well as Skype’s acquisition of GroupMe more. Then, finally, I think it clicked.

There are two things at work here: 1) Scale, which determines what is, and 2) Competence, which determines what could be.

1) Scale
Scale is the easiest to understand. A feature is small; a company is big. As Mark mentions in his response to my comment:

I think any time you have such a big & monetizable revenue stream you’ll always view less monetized portions of your business as features until such time as they add meaningful revenue. I saw this first hand inside Salesforce.com. The company I sold to them in its own right could be a company (we did what DropBox does) but inside Salesforce it has remained a feature since their core business monetizes so well.

In other words, Mark’s company became a feature because it was so much smaller than Salesforce.com. And frankly, when all these valuation numbers are flying around, it’s easy to forget the relative sizes of companies if you have no context.

The most recent number I’ve seen for GroupMe’s acquisition price is $43mm, or maybe as high as $85mm. Even Foursquare, which was recently valued at $400mm (5-10x GroupMe), is pretty small. When I put my investment banker hat on, even $400mm is microcap, meaning it’s the kind of company that would struggle as a hardly noticeable investment in public markets (hence little serious discussion of an IPO… to my limited knowledge). In contrast, Skype was acquired by Microsoft for $8.5bn, which is 20x Foursquare. Regardless of whether Microsoft overpaid for Skype, there’s no doubt that’s a real company.

However, the key for me is the second sentence of Mark’s response: “The company I told to them in its own right could be a company.” When it comes to scale, management/investor goals are more important than absolute numbers. Check-ins at Foursquare are certainly could be a feature (e.g. Places), but Foursquare is certainly working hard to differentiate as a sustainable business model.

2) Competence
With features, incumbents have an advantage because of established competencies; a company creates its own competitive advantage by developing unique competencies.

To illustrate my point, I’ll talk a little about an idea I’ve had for a long time – or rather, a problem I’ve had for a long time.

I travel a lot. My family is in Chicago, school is in Los Angeles, and summer is always somewhere different (last 5: New York, Shanghai, Chicago, Lubbock, and Palo Alto). Plus, my friends are all in college and travel all the time too. With a peer group as mobile as mine, it can be difficult to remember who is where – which means I often miss opportunities to catch up with friends when our cities finally overlap. My need, therefore, is very simple – something that organizes what geographic regions my friends are in, and for how long. I don’t need the granularity of Foursquare. I just want the general area.

This is a feature. Why? Because incumbents have an advantage based on data – companies like Facebook, Foursquare, LinkedIn, TripIt, etc. have easy access to the locations of your friends, unlike me or any other potential founder. In fact, Facebook might be doing something like this with Nearby. If someone tried to fill this gap with a company, they would be crushed once an incumbent became a competitor.

Although, to be fair, Arrived is working very hard to prove me wrong. And the rise of data as a service may eventually erode the incumbent advantage, leveling the playing field for new companies where once existed only features.

In this context, GroupMe is not just a feature. In my view, its acquisition by Skype does not trigger any significant incumbent advantage. (In consultant-speak, the only synergies I see are typical SG&A synergies, but nothing more significant than that.)

Final Thoughts
Scale, though important, is ultimately relative. Competence seems more robust – and I don’t think anyone is more competent in group messaging than GroupMe. But again, scale determines what actually happens, which means that while I maintain that GroupMe could have been an independent business, just like Mark Suster’s company, it is more likely that Skype incorporate GroupMe as a feature.

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