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I’ve been wanting to write on the topic of gender for a long time now, but haven’t been able to find the words. And admittedly, I’m still trying to find my position in all this. It’s a tricky subject for me to navigate: on one hand, sharing challenges might paint me as weak, a victim, or a radical feminist (even the word “feminist” seems to have a negative connotation). But on the other hand, not talking about the challenges – or even sharing positive experiences – can mean that I don’t recognize the real struggle and don’t support other women. <span style="font-weight: 400;">I’m sure I’m not the only woman who feels this way.</span> <span style="font-weight: 400;">Most of my life, I have been one of the few girls in the room. I was my grandparents’ only granddaughter, growing up with my brother and three male cousins. For me then, being the only girl was a badge of honor. I gravitated toward STEM as a child, which led me to pursue degrees in engineering. I moved to the SF Bay Area where the ratio of men to women is 121:100, entered the entrepreneurial world, and then joined VC. </span> <span style="font-weight: 400;">Throughout this time, I never thought about how being a woman could be a barrier. I let my work speak for itself. And while my experiences have been far from perfect, they thankfully, have been far from awful. </span> <span style="font-weight: 400;">I know this is not the case for everyone. Like you, I’ve read the stories. And like you, I want to work at making sure that everyone is judged on his/her merit. That no one feels discouraged or intimidated to pursue a certain career path. That no one stops speaking because they feel their voice has been ignored one too many times.</span> <span style="font-weight: 400;">I know we have a lot of conscious and subconscious biases in the workplace and society at large. We still have a lot of work to do to get to gender equality, but I am optimistic that we are moving in the right direction. The discussion that I’d like to have today is how we can get to the right place faster. </span> <span style="font-weight: 400;">Last week, I attended a Women in Tech</span><span style="font-weight: 400;"> night. This event was special in that it was the first Women in Tech night that I’ve attended where men were included in the room and where we talked about actions we all can take to make the tech world more inclusive. The experiences shared were powerful, as were the compassionate, positive, and action-oriented responses that filled the room that night. The nature of Women in Tech nights means that we keep all stories and anecdotes confidential. But, I can share some of the high level points…</span> <b>Building yourself up: negotiate, build your network, and don’t be naive</b> <span style="font-weight: 400;">Yes, there are many factors contributing to gender inequity in the workplace. However, women often don’t get what they deserve because they never ask for it. </span><a href="https://hbr.org/2003/10/nice-girls-dont-ask"><span style="font-weight: 400;">Studies have shown</span></a><span style="font-weight: 400;"> that women are less likely than men to negotiate for what they want. And unfortunately, it’s not enough to just put your head down, work hard, and expect to be rewarded. You need to advocate for yourself.  </span> <span style="font-weight: 400;">Some of the best advice I have ever received in this area is to build a case for myself. Dedicate a couple of minutes at the end of each week to compile a list of all the things you have done and the impact you have made. This will give you the confidence you need to negotiate. If you’re uncomfortable talking about yourself, you can always lean on these facts.</span> <span style="font-weight: 400;">Also remember that you don’t have to go it alone. I am fortunate enough to have an incredible group of people surrounding me. Who’s in your network? Are they positive influences? Do they elevate you? Are there people you can trust to stick by you when the going gets tough? Who are your best advocates and who can help you fight the good fight when you feel mistreated? It’s important to build your network (your foundation) so they can help lift you up.</span> <span style="font-weight: 400;">My last piece of advice around building yourself up is to not be naïve. I know, this is an incredibly controversial thing to say, because I am putting the onus on women to protect ourselves from being mistreated or discriminated against. However, at this stage, I see this to be an important solution. For example, I have a rule not to hear pitches after 5 pm over drinks because I don’t want it to be misconstrued as anything more than business. Maybe I’ll miss a deal or two, but I don’t think there’s anything that can’t be done during business hours. Similarly, I know other women have rules like “don’t ever serve the coffee.”</span> <span style="font-weight: 400;">Feel free to stay true to yourself, but be aware that we still live and work in a world where we have to take charge of where we are and what is happening around us.</span> <b>Bringing others up: making our voices heard</b> <span style="font-weight: 400;">Have you ever been in this situation? You make a pretty good comment in a meeting or on Slack; you’re ignored. Five minutes later, someone else makes the same comment and the whole room thinks it’s the greatest idea. If you’re a woman working in a male-dominated field, I’m guessing you know exactly what I’m talking about.</span> <span style="font-weight: 400;">To help ensure that their voices are heard, female staffers in Obama’s White House adopted a </span><a href="https://www.washingtonpost.com/news/powerpost/wp/2016/09/13/white-house-women-are-now-in-the-room-where-it-happens/https:/www.washingtonpost.com/news/powerpost/wp/2016/09/13/white-house-women-are-now-in-the-room-where-it-happens/"><span style="font-weight: 400;">practice called amplification</span></a><span style="font-weight: 400;">. From The Washington Post: “</span><span style="font-weight: 400;">When a woman made a key point, other women would repeat it, giving credit to its author. This forced the men in the room to recognize the contribution — and denied them the chance to claim the idea as their own.</span><span style="font-weight: 400;">”</span> <span style="font-weight: 400;">Amplification is a great example where women can band together to improve the condition for everyone. We can’t bring about meaningful change on our own; we need to advocate for others.</span> <span style="font-weight: 400;">It’s important to speak out and reach out when you see someone being mistreated, disrespected, or discriminated against in the workplace. Sometimes, just a small gesture as letting your colleague know that you saw what happened and understand how they must feel can mean the world of difference. Empowerment wanes when someone hurting wonders if they are just “imagining things” and don’t have the backing of others.</span> <b>Championing for the future</b> We’ve made tremendous strides over generations, but it will still take time. My grandmother, who was one of the few women who went to university before the Chinese revolution, inspired my mother. And my mother, who was a refugee of the Vietnam war and worked everyday of her life when she set foot on Canadian soil for 35 years, inspired me. And likewise, we need to set the example for the young women of the future. <span style="font-weight: 400;">What can you do? Tell young girls that they are smart. Compliment them on their accomplishments and not just their appearance. Reiterate that they are capable of anything. Encourage girls to pursue STEM, as well as embrace their creative side, which is why I’m super excited to see initiatives like </span><a href="https://www.versionone.vc/announcing-canada-learning-code-supporting-bottom-innovation/"><span style="font-weight: 400;">Canada Can Code</span></a><span style="font-weight: 400;">. Lastly, we need to empower our girls with tips on how they can advocate for themselves and others.</span> <span style="font-weight: 400;">We need to keep paying it forward. As my “champions” did this for me, I hope to be a champion for my nieces, Cassidy, Katelyn, Cayley and Charlotte. There’s still a lot of work to be done, but I am optimistic we can get there. </span> &nbsp;

We’re enjoying the first few weeks of Fall and before we know it, 2017 will be upon us. It has been a busy summer for our portfolio companies - here’s a quick recap of some of the highlights from Q3. <strong>Portfolio companies in the news</strong> <strong> </strong>Several V1 portfolio companies were recognized for their growth. <strong><a href="https://tophat.com/">Top Hat</a></strong> was named the <a href="http://www.profitguide.com/microsite/profit500/2016/">12th fastest growing company</a> in Canada by PROFIT 500, with a five-year revenue growth of 5,359%! Seattle-based sales tech company <strong><a href="https://outreach.io/">Outreach</a></strong> was named one of <a href="http://www.forbes.com/sites/alexkonrad/2016/09/07/cloud-100-rising-stars-of-cloud-computing/#2f916bca541f">Forbes Cloud 100 Rising Stars</a>. And, <strong><a href="https://www.headout.com/">Headout</a></strong> was named one of the <a href="http://www.businessinsider.in/10-most-promising-Bengaluru-basedstartups-to-watch-in-2016/Headout/slideshow/53155357.cms">10 most promising Bengaluru-based start-ups</a> to watch by Business Insider. Canadian retailer <strong><a href="https://www.frankandoak.com/">Frank + Oak</a></strong> launched its highly anticipated <a href="https://www.frankandoak.com/women">Women’s collection</a>, which is based on its core principles: affordability, accessibility and simplicity. More styles will debut throughout October, and a holiday collection is set for early November. <strong><a href="http://clio.com/">Clio</a></strong> wrapped up its <a href="http://www.lawsitesblog.com/2016/09/clio-cloud-recap-news-clios-data-report-legal-trends.html">fourth annual Clio Cloud Conference</a> last month. This conference has been called one of the best legal technology conferences ever, and Jack Newton and team do a phenomenal job blending the right mix of educational programming and a good time. In funding announcements, <strong><a href="http://umi.kitchen/">Umi Kitchen</a></strong> (a <a href="http://ny.eater.com/2016/9/13/12700418/umi-kitchen-home-cooking-app-nyc">home cooking delivery app</a>) announced a <a href="http://www.businessinsider.com/umi-kitchen-brings-home-cooking-to-masses-2016-9">$1.4m seed round</a> led by Box Group's David Tisch and Adam Rothenberg. Personal finance bot <strong><a href="http://www.asktrim.com/">Trim</a></strong> announced the <a href="http://venturebeat.com/2016/07/31/personal-finance-bot-trim-says-its-saved-users-6-million-and-counting/">close of a $2.2 million seed round</a> which we co-invested with Eniac Ventures. And, <strong><a href="https://goshippo.com/">Shippo</a> </strong><a href="http://venturebeat.com/2016/09/09/shippo-raises-7-million-to-further-its-goal-of-being-twilio-for-shipping/">announced a $7 million Series A</a> led by Union Square Ventures for its shipping for business platform. Beauty brand <strong><a href="http://www.julep.com/">Julep</a> </strong><a href="http://www.ulta.com/brand/julep">launched at Ulta</a>, rolling out a lineup of color kits and all-in-one-place makeup boxes developed exclusively for Ulta. And <strong><a href="https://handup.org/">HandUp</a></strong> continues its very important mission to help San Francisco’s homeless population with its new Gift Card program. HandUp gift cards can be purchased on <a href="http://www.handup.org/giftcards">HandUp’s website</a> and redeemed at Project Homeless Connect’s office in San Francisco for things like food, clothing, transportation, or pay bills. These cards are a great answer to the common question if it’s better to give money or food to someone in need. <strong>Looking ahead: what we’re excited about</strong> We still love <a href="https://www.versionone.vc/our-refocused-investment-thesis/">network effects</a>, and are always looking for awesome founders working on cool ideas that leverage network effects… whether that’s in marketplaces, social platforms, or AI/ML. Thematically, we’ve been spending time on Blockchain/Ethereum (Boris) and healthcare/genomics (Angela). <strong>Marketplace Meetup in SF on October 20</strong> Next week, we’re hosting a private marketplace-themed event on October 20 in SF: <strong>The Holy Grail of the Marketplace:  The Virtuous Cycle</strong>. We will have lightning talks given by <strong>Slava Rubin</strong> (Founder of Indiegogo), <strong>Mikhail Ledvich </strong>(Head of Marketing at Shippo),  and <strong>Anthony Marino</strong> (CMO of ThredUp). These will be followed by a fireside chat with <a href="http://andrewchen.co/"><strong>Andrew Chen</strong></a> who runs growth at Uber. There will be food and drinks, and the opportunity to connect and socialize with founders and leaders building marketplaces. If you’re interested in joining us, please email us (<a href="mailto:angela@versionone.vc">angela@versionone.vc</a> or <a href="mailto:boris@versionone.vc">boris@versionone.vc</a>) for an invite code. <strong>Read our blog</strong> And lastly, in case you missed any of our posts this summer, here’s a quick recap of some of our posts: <ul> <li><a href="https://www.versionone.vc/get-sense-inevitability-founders-pitch/">When you get a sense of inevitability from a founder’s pitch</a></li> <li><a href="https://www.versionone.vc/3-things-3-years/">Three things I’ve learned in three years</a></li> <li><a href="https://www.versionone.vc/build-right-management-team/">How to build the right management team</a></li> <li><a href="https://www.versionone.vc/v1-bot/">The Version One website now has a bot, powered by Ada</a></li> <li><a href="https://www.versionone.vc/healthcare-update/">Is it time to rethink the healthcare marketplace model?</a></li> <li><a href="https://www.versionone.vc/sixth-factor-marketplaces/">Unlocking new value: adding the sixth factor in our marketplace criteria</a></li> <li><a href="https://www.versionone.vc/multibillion-dollar-china-question-mid-sized-tech-company-tempt-fate-china/">The multibillion-dollar China question:  should a mid-sized tech company tempt fate in China?</a></li> <li><a href="https://www.versionone.vc/marketplace-fundraising/">Raising capital for marketplaces in 2016</a></li> <li><a href="https://www.versionone.vc/is-social-dead/">Is social dead?</a></li> </ul>

As the global economy shifts from analog to digital, I’ve been thinking a lot about how I can help others thrive in this digital world and make the transition a success. <span style="font-weight: 400;">There are several ways one can help build a strong tech ecosystem, be it in your city, local region, or country. First, you can serve as a role model and inspire others by doing the best job possible - either by building your own company or by investing in others. You can help shape public policy to create the right type of environment to foster entrepreneurial growth. And, you can also support those organizations that create “bottom up” innovation.</span> <span style="font-weight: 400;">As an investor, the first point is an ongoing project for me. But over the past few years, I’ve increasingly focused on sparking bottom-up innovation. A few years ago, I started supporting <a class="zem_slink" title="Science World (Vancouver)" href="http://www.scienceworld.ca/" rel="homepage">Science World</a> here in Vancouver (both as a board member and donor), particularly their</span><a href="https://www.scienceworld.ca/futurescienceleaders"> <span style="font-weight: 400;">Future Science Leaders</span></a><span style="font-weight: 400;"> project.</span> <span style="font-weight: 400;">And, it’s in this spirit, that I am super proud to see</span><a href="http://www.canadalearningcode.ca/"> <span style="font-weight: 400;">Canada Learning Code</span></a><span style="font-weight: 400;"> go live.</span> <span style="font-weight: 400;">Canada Learning Code is a national initiative that works with all sectors to increase access to coding education, computational thinking, and other 21</span><span style="font-weight: 400;">st</span><span style="font-weight: 400;"> century skills across Canada.</span> <span style="font-weight: 400;">Launched by the team behind</span><a href="http://ladieslearningcode.com"> <span style="font-weight: 400;">Ladies Learning Code</span></a><span style="font-weight: 400;">, Canada Learning Code’s mission is to make sure that every Canadian has the opportunity to build technology, not just consume it. By 2027, they will provide </span><span style="font-weight: 400;">10 million Canadians access to meaningful technology education experiences. Just think about the possibilities.</span> <span style="font-weight: 400;">Tobi Luettke of <a class="zem_slink" title="Shopify" href="http://www.shopify.com/" rel="homepage">Shopify</a> and I started looking for a platform to push a national coding initiative for Canada, in the same way that</span><a href="https://code.org/"> <span style="font-weight: 400;">Code.org</span></a><span style="font-weight: 400;"> has taken the lead in the US. We got to know Ladies Learning Code and threw our support, time, and money behind this amazing team.</span> <span style="font-weight: 400;">Technology can level the educational playing field, creating important opportunities for all members of society. As our economy transitions, it’s critical to give everyone access to develop their talents and skills to build our future. I’m so excited to see the impact that Canada Learning Code will have in the coming decade, and hope to see more examples of ambitious bottom-up innovation projects.</span>

Very often, start-ups fail at the earliest stages. They might get the wrong advice at a critical point, or they can’t raise the first hundreds of thousands of dollars required to move from prototype to initial product. This problem is relatively minor in large, vibrant ecosystems like Silicon Valley, but can be more pervasive in smaller locations that lack the depth and breadth of experienced start-up advisors and angel investors. It is also especially prevalent in companies that create “hard tech.” Since being founded by Ajay Agrawal a few years ago at the <a class="zem_slink" title="Rotman School of Management" href="http://www.rotman.utoronto.ca" rel="homepage">Rotman School of Management</a> at the University of Toronto, the <a href="http://www.creativedestructionlab.com/">Creative Destruction Lab</a> has done an amazing job filling this void for <a href="https://www.versionone.vc/something-special-is-happening-in-the-toronto-waterloo-area/">the Toronto / Waterloo ecosystem</a>. CDL provides milestone-based coaching with the goal of maximizing equity-value creation. The program’s coaches are successful entrepreneurs with years of experience in building and scaling technology-oriented companies. These are <a href="http://www.creativedestructionlab.com/people">founders</a> like <a href="https://twitter.com/ted_livingston">Ted Livingston</a> (Kik), <a class="zem_slink" title="Michael Serbinis" href="http://en.wikipedia.org/wiki/Michael_Serbinis" rel="wikipedia">Michael Serbinis</a> (Kobo), <a href="https://www.linkedin.com/in/geordie-rose-a53abb">Geordie Rose</a> (<a class="zem_slink" title="D-Wave Systems" href="http://en.wikipedia.org/wiki/D-Wave_Systems" rel="wikipedia">DWave</a>), or <a class="zem_slink" title="Daniel Debow" href="http://www.crunchbase.com/person/daniel-debow" rel="crunchbase">Daniel Debow</a> (Rypple). CDL start-ups have gone on to raise hundreds of millions of dollars in funding and include success stories like <a href="https://techcrunch.com/2016/09/19/thalmic-labs-teases-new-products-with-120m-raise-from-amazon-alexa-fund-and-more/">Thalmic Labs</a> and our own portfolio company <a href="https://www.versionone.vc/introducing-latest-investment-perceptiv-labs-future-smart-drone-technology/">Vertical.ai</a>. CDL has also turned into one of the most important feeder programs for Y Combinator. I have been involved in the Toronto program for the past two years and have been incredibly impressed by the quality of the entrepreneurs, companies, and fellow coaches. I am therefore very happy that CDL will expand west and <a href="http://news.ubc.ca/2016/09/28/ubc-and-university-of-toronto-partner-to-launch-western-arm-of-leading-tech-venture-accelerator/">start a similar program</a> at the <a class="zem_slink" title="University of British Columbia" href="https://ubc.ca/" rel="homepage">University of British Columbia</a> starting in January 2017. I am currently helping them to put together an equally strong group of coaches for CDL West and am very grateful that we already have commitments from successful entrepreneurs like <a href="https://en.wikipedia.org/wiki/Jeff_Mallett">Jeff Mallett</a> and <a href="https://ca.linkedin.com/in/jeffdbooth">Jeff Booth</a> with many more to follow in due course. Software is eating the world and I hope that the CDL programs in both Toronto and Vancouver will create their share of disruptors.

I recently tweeted… <a href="https://www.versionone.vc/get-sense-inevitability-founders-pitch/screen-shot-2016-09-20-at-6-49-22-am/" rel="attachment wp-att-2650"><img class="aligncenter size-full wp-image-2650" src="https://gregburnison.ca/code/version1v/images/Screen-Shot-2016-09-20-at-6.49.22-AM.png" alt="screen-shot-2016-09-20-at-6-49-22-am" width="588" height="204" /></a> Getting this sense of inevitability from a founder is incredibly powerful. I instantly start believing that their vision is going to happen. As an investor, I want to get on board and help propel the team to their destination. So, what exactly do I mean by this? What are some of the strongest signals that come from a pitch to indicate inevitability? The first signal is passion. The founder or founding team demonstrates that they truly care about the problem they are solving, and often have been going at it for a long time. Some of our founders have been thinking about a particular problem for years. Some have launched different products/solutions and tried different approaches in the past to solve the problem. Some have bootstrapped their company when they couldn’t get money in the first place. It’s very powerful when you see that the founding team is so passionate about solving a problem that they won’t stop until they get there. The other key ingredient is seeing that the founder/founding team have done their homework. They’ve thought through the problem in incredible detail and have answers for every question. They have run through the playbook many times in their heads and haven’t left a stone unturned when thinking about the problem, market, and customer needs. It’s when I see these two pieces come together that I really get excited. I’m not saying any of this to encourage founders to start tweaking their pitches to look “more inevitable.” Rather, I want to encourage founders to focus on an idea or area where they are truly passionate. You do your best work when you truly care about the problem you are solving. That’s the best way to make your start-up inevitable!

<span style="font-weight: 400;">We’re excited to add another great marketplace to the V1 portfolio and announce an investment we made last November. </span> <a href="http://www.umi.kitchen/"><span style="font-weight: 400;">Umi Kitchen</span></a><span style="font-weight: 400;"> is home cooking delivered. The platform connects talented home cooks with families and individuals who crave a home-cooked meal but don’t have the skills or time to spend in the kitchen. </span> <span style="font-weight: 400;">The platform empowers culinary entrepreneur, including full-time and part-time chefs, students, and stay-at-home parents who might be looking to share their passion and make additional income. With Umi, these chefs can focus on doing what they love (cooking great meals for people), while Umi takes care of all the logistics of running a business (marketing, packaging, delivery, fulfillment, etc.). </span> There are a lot of marketplaces out there to bring you groceries or baked goods and meals from a restaurant. But, Umi is all about home cooking. Umi is Arabic for “my mother,” which perfectly reflects their belief that a home-cooked meal made personally and with care, is the best meal out there. We all strive to eat better...healthier and fresher, with more delicious and diverse food. But in many cases, we just don’t have the time to make it happen. And food has always been an important part of our culture, but somewhere along the way this has gotten lost with heavily processed and generic meals. That’s where Umi comes in: there’s a person and story behind every Umi meal. We also love that Umi menus are data driven. They can fill local gaps in neighborhoods where certain food categories are missing, so if your neighborhood lacks a good Lebanese option, there’s hope. Umi can also dynamically control its offerings based on local demand. Last, but definitely not least, we continue to be impressed by Umi’s founders. Khalil Tawil is a graduate of West Point and a veteran of three deployments to Afghanistan. Hallie Meyer is a serial home cook and food entrepreneur, having founded a catering company in partnership with the Yale Sustainable Farm. What makes these two different is that they have a huge passion for building communities through food. Early chefs and customers have absolutely loved their experiences with Umi. <span style="font-weight: 400;">Umi is currently in Manhattan and the Northwest Brooklyn community.  To learn more and taste these incredible meals, visit </span><a href="http://www.umi.kitchen"><span style="font-weight: 400;">http://www.umi.kitchen</span></a><span style="font-weight: 400;"> or follow them </span><a href="https://twitter.com/umi_kitchen"><span style="font-weight: 400;">on Twitter</span></a><span style="font-weight: 400;">.</span>

<span style="font-weight: 400;">It’s hard to believe that it has been three years since my first day at Version One. As I look back, I realize how much I’ve learned and grown in this short time. In this post, I’m going to share three important lessons that have not only made me a better investor, but a better person. These learnings aren’t necessarily specific to VC, so whether you’re an investor, founder, or employee, I’m hoping they have some relevance to you and your own journey.</span> <b>Lesson 1:  The importance of learning how to learn</b> <span style="font-weight: 400;">The job of a VC is to learn… ALL the time. As a result, I’m constantly thinking about how I learn and whether I have the right processes in place to learn effectively and efficiently. I’ve become cognizant about two aspects:</span> <i><span style="font-weight: 400;">Top-down vs. bottom-up learning</span></i> <p style="margin-left: 40px;"><span style="font-weight: 400;">I tend to take a more academic approach and get down and dirty with the fundamentals before the applications. For example, when I set out to understand machine learning, I jumped into its first principles (read: math with letters, not numbers) before market mapping the use cases or what problems need to be addressed. </span></p> <p style="margin-left: 40px;"><span style="font-weight: 400;">There’s no right or wrong approach, but it’s critical to understand the difference between the two approaches and how they impact your goals. Do you want to be effective or efficient first? Whether you learn top-down or bottom-up, I believe you’ll gain depth and breadth as the two ends converge. </span></p> <i><span style="font-weight: 400;">Active vs. passive learning </span></i> <p style="margin-left: 40px;"><span style="font-weight: 400;">We can read an endless number of articles to stay on top of the startup ecosystem, but how do we apply this information so we’re not just learning for the sake of learning? And, how do we evaluate our success as VCs when the VC cycle is 5 to 10 years out?</span></p> <p style="margin-left: 40px;"><span style="font-weight: 400;">At Version One, we actively develop our thesis and then create internal frameworks that encourage a constant review of this thesis, our investment decisions, working relationships, and how we manage our time. Every quarter, we ask ourselves: what did we learn? What did we do well? What can we do better? What should we focus on? And then, we hold ourselves accountable.</span></p> <p style="margin-left: 40px;">We also actively look to improve through feedback we elicit from our LPs by regularly reporting fund performance (so they can benchmark us against our peers); and by surveying founders who pitch us (so we can get our NPS). And, we blog a lot so that we can learn from the community.</p> <b>Lesson 2:  The importance of paying it forward</b> <span style="font-weight: 400;">The most beautiful thing about our industry is how generous people are with their time. Time is our most scarce resource (it’s why this business is hard to scale) and I’m constantly blown away by how willing everyone is to give feedback on a product, make introductions, or spend time helping in other ways. We all know these favours won’t be repaid directly, but the energy we put into the world does come back to us in some way.</span> <span style="font-weight: 400;">I would not be where I am today without this pay-it-forward mentality. When I first started in VC and had zero network, I definitely took more than I could give. But if there’s one thing I could offer, it was to be as responsive and as respectful of others people’s time as possible. </span> <span style="font-weight: 400;">At some point, the balance began to shift. Now I remind myself that others need help, advice, and feedback just like I did. At the same time, I try to get face time with people I admire who have better things to do than to meet with me. After all, if you’re not getting No’s on a regular basis, then you’re probably not being ambitious enough. And one day, who knows, some super high profile Silicon Valley founders and investors will make time for coffee with me :)</span> <b>Lesson 3:  The importance of team and developmental leadership</b> <span style="font-weight: 400;">When I was in grad school and took a course on leadership taught by my then-professor and now-mentor </span><a href="http://ilead.engineering.utoronto.ca/people/david-colcleugh-faculty-leadership-development-professor/"><span style="font-weight: 400;">David Colcleugh</span></a><span style="font-weight: 400;">, I learned the theory of developmental leadership</span><span style="font-weight: 400;">:</span> <p style="margin-left: 40px;"><i><span style="font-weight: 400;">The developmental leader is a competent teacher who provides direction but who also provides space and opportunity and encouragement to the followers so that they can develop themselves to make positive changes in the organization.</span></i></p> <span style="font-weight: 400;">I didn’t realize what those words meant in practice until I started working with Boris. From the moment I walked into our office, he immediately started sharing ownership of Version One by making reference to </span><i><span style="font-weight: 400;">our</span></i><span style="font-weight: 400;"> fund,</span><i><span style="font-weight: 400;"> our</span></i><span style="font-weight: 400;"> portfolio, </span><i><span style="font-weight: 400;">our</span></i><span style="font-weight: 400;"> LPs, </span><i><span style="font-weight: 400;">our </span></i><span style="font-weight: 400;">brand</span><i><span style="font-weight: 400;">, our everything</span></i><span style="font-weight: 400;">… despite the fact that he had started it all on his own and had made many decisions before my time. I felt a sense of “team” knowing that I could have a direct impact on achieving </span><i><span style="font-weight: 400;">our</span></i><span style="font-weight: 400;"> vision together on Day 1.</span> <span style="font-weight: 400;">Working as a team and talking as a team (using “we” and “our”) is tremendously important.  We care and work harder when we believe there is something at stake for every member.  So whether you are a founder, project manager, think about how you can be more inclusive and how you can develop people on your team to reach their highest potential. </span> <span style="font-weight: 400;">Another lesson I learned about the importance of team: all the rumours about venture capital being a lonely business are true. It’s highly intellectual work and it’s important for you to be challenged with diversity of thought. Some of the best advice I have gotten is to surround myself with a tribe - some of my best sparring partners are friends at other funds. Also, work to build a community around you and think of ways in which you can elevate and develop others.</span> &nbsp; <span style="font-weight: 400;">So thanks to each and every one of you in the ecosystem who have taken the time to teach me, support me, and develop me. And a special shout out to Boris who not only took a risk on someone without any prior VC experience, but also invested the time and effort to develop me personally and professionally.  Three years later, I’m more excited than ever to build </span><i><span style="font-weight: 400;">our</span></i><span style="font-weight: 400;"> future at Version One together.</span> <span style="font-weight: 400;">-ange :)</span>

There’s a lot of debate surrounding the right time to bring executive level hires into your start-up. But one thing is clear: how you build your team over the first few years can determine the trajectory of your company more than any other decision you make. There are no right answers here. Every start-up is unique so the same path won’t work for every company and management team. With that said, here are some general guidelines I have developed over the years for building a management team. First, your hiring/team building strategy should follow two key rules. Founders should focus their time and efforts on the areas that create the most value. They also shouldn’t spend much time in those areas where they face a huge learning curve and better outside talent is available. Next, the DNA of the original founding team plays an enormous role in shaping the culture and essence of a start-up. When debating whether to hire in one area versus another, you should prioritize based on founders’ interest/knowledge in certain areas. To dive into more specifics, I’ve found that building out a strong management team should typically follow this progression: <strong>1^st hire: VP Engineering </strong> Building an efficient engineering organization takes more science than art and adding an experienced VP of Engineering to your team will maximize your chances of being able to execute on product development in the most efficient way. <strong>2^nd hire: VP of Finance</strong> Brad Feld has a great post on the importance of hiring a VP of Finance <a href="http://www.feld.com/archives/2016/07/hire-vp-finance-sooner-rather-later.html">sooner rather than later</a>. If your start-up has at least 15 people, you should hire a VP Finance/VP Accounting. <blockquote>At 15 people, you want someone who will do all the work, but also has the ability to scale up and manage a small team. You want someone who reports directly to you (the CEO) and is able to handle a wide range of administrative stuff beyond the accounting, but doesn’t need to hire a bunch of direct reports to manage the people who do the actual work.</blockquote> <strong>3^rdand 4^th hire: VP Sales/VP Marketing</strong> It’s important that founders stay involved early on in sales and marketing as the company tries to find product-market-fit, define its pricing and develop the product roadmap. But once an early playbook emerges, it is time to add more experienced sales and marketing leaders to scale up these functions. Even after you hire your VP Sales, founders should stay involved in "experimental" sales, situations in which you sell either new products or into a new vertical. <strong>5^th hire: VP Product</strong> I recommend that founders stay involved the longest in this area, since they’re often the ones with the product vision and the best understanding of customer needs. However, you will need to bring a VP Product in at some point in order to scale this area. But, realize that this is usually the most difficult to position to hire, both because of its impact on company performance and the limited number of great people available to fill it. Any thoughts or lessons to share? If so, please leave a comment below. I’m interested in hearing from others about any experiences with their first few VP-level hires.

<span style="font-weight: 400;">A few weeks ago, we quietly launched a really cool bot on the </span><a href="https://www.versionone.vc/"><span style="font-weight: 400;">Version One website</span></a><span style="font-weight: 400;">. Its goal is to help you navigate our content in a more interactive, and hopefully, faster way.</span> <span style="font-weight: 400;">Look for and click the red help button in the bottom right corner and a chat panel pops out.</span> <img class="aligncenter wp-image-2638 size-large" src="https://gregburnison.ca/code/version1v/images/Screen-Shot-2016-08-20-at-2.31.52-PM-700x315.png" alt="Screen Shot 2016-08-20 at 2.31.52 PM" width="640" height="288" /> <span style="font-weight: 400;">What can you do with this bot? Ask it the best way to contact us, or what our investment thesis is, </span><span style="font-weight: 400;">or what our portfolio looks like, or what we know about marketplaces.</span> <span style="font-weight: 400;">Give it a try and let us know what you think!  The bot is still a work in-progress but its accuracy improves the more it is used, so we appreciate everyone’s help in making it smarter :)</span> <span style="font-weight: 400;">This bot is powered by </span><strong><a href="https://ada.support">Ada</a></strong><span style="font-weight: 400;">, one of our portfolio companies, who is working on automating customer service.  Ada is currently in private beta with some great companies such as <a href="https://www.kik.com">Kik</a>, <a href="https://medium.com">Medium</a>, and <a href="https://www.wattpad.com">Wattpad</a>, as customers.  Check out those in-app help or support experiences and if you’re interested in learning more and getting up-to-date news on when their technology will be ready for you, please sign up </span><a href="http://works.us9.list-manage.com/subscribe?u=925f30a4f8bf20bf5eaab3dd7&amp;id=8ef33e7c6b"><span style="font-weight: 400;">here</span></a><span style="font-weight: 400;">.</span> <img class="wp-image-2632 size-large aligncenter" src="https://gregburnison.ca/code/version1v/images/image2-576x1024.png" alt="kik" width="576" height="1024" /> <img class="wp-image-2633 size-large aligncenter" src="https://gregburnison.ca/code/version1v/images/image1-576x1024.png" alt="medium" width="576" height="1024" /> <img class="wp-image-2634 size-large aligncenter" src="https://gregburnison.ca/code/version1v/images/image3-576x1024.png" alt="wattpad" width="576" height="1024" /> &nbsp;

<span style="font-weight: 400;">It’s been a year since we published our series </span><a href="http://ondigitalhealthcare.com/"><span style="font-weight: 400;">on digital healthcare</span></a><span style="font-weight: 400;"> which I co-wrote with </span><a href="https://twitter.com/libovness"><span style="font-weight: 400;">Jonathan Libov</span></a><span style="font-weight: 400;"> of </span><a href="https://www.usv.com/"><span style="font-weight: 400;">Union Square Ventures</span></a><span style="font-weight: 400;">. The reception was overwhelmingly positive (we’re thankful to all of you who gave us feedback) and opened up the floodgates to patients, medical professionals, entrepreneurs, and investors who still reach out to us with their pains, thoughts, experiences, and goals for the healthcare system.</span> <span style="font-weight: 400;">As you’d imagine, these conversations continuously inform our thesis on healthcare… yet, since investing in</span><a href="https://figure1.com/"> <span style="font-weight: 400;">Figure 1</span></a><span style="font-weight: 400;"> in August 2013, we haven’t pulled the trigger on a second investment in this space. Why not? Aren’t there</span><a href="https://www.versionone.vc/our-refocused-investment-thesis/"> <span style="font-weight: 400;">network effects</span></a><span style="font-weight: 400;"> in healthcare that we get excited about? </span> <span style="font-weight: 400;">Back in 2014, we wrote about our interest in </span><a href="https://www.versionone.vc/thesis-update-healthcare/"><span style="font-weight: 400;">patient-doctor networks and patient health data</span></a><span style="font-weight: 400;">. This still holds true today, but we’ve learned a lot over the past few years.</span> <span style="font-weight: 400;">We’ve seen social and crowd-sourced communities like </span><a href="http://healthtap.com/"><span style="font-weight: 400;">HealthTap</span></a><span style="font-weight: 400;"> that enable patients to receive opinions free-of-charge from doctors who are happy to share their knowledge for both altruistic and lead generation purposes. We’</span><span style="font-weight: 400;">ve also seen marketplaces that can help you find a doctor and schedule an appointment (i.e. Zocdoc); provide house calls (i.e. Pager); and immediately connect you with a medical professional via telemedicine (i.e. Doctor on Demand).</span> <span style="font-weight: 400;">And while these networks, services, and products are helpful to patients, we as investors can’t help but ask if we can do more beyond solving the “efficiency problem.” What </span><a href="https://www.versionone.vc/sixth-factor-marketplaces/"><span style="font-weight: 400;">new value</span></a><span style="font-weight: 400;"> can be created?</span> <b>A new thesis for healthcare marketplaces</b> <span style="font-weight: 400;">As we survey the current healthcare marketplace landscape, we see the limitations. Today’s networks focus on connecting patients and doctors, with the hope of capturing data from the interactions between members. However, most of these companies have similar challenges:</span> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">There is low frequency and high unpredictability of use because thankfully, we’re not always sick.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">People typically prefer a monogamous relationship with their doctors, meaning once they find a doctor, there’s little reason to return to a marketplace.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Many transactions are still offline so that data is not captured by the marketplace, leading it and potential insights to stay siloed with doctors or clinics.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">And in those cases where patients don’t mind “playing the field” and finding a new doctor, the transaction is often very simple (acute) and any engagement is ephemeral.</span></li> </ul> <span style="font-weight: 400;">It’s hard to build a true marketplace against all these factors. So perhaps the answer is to flip the model. Instead of focusing on making connections first with the hope of then capturing data from interactions, healthcare marketplaces and social platforms should first engage individuals with their health (find a daily use case) and then offer the network as an additional service to that daily use case.</span> <span style="font-weight: 400;">So, the question is… what is the daily use case? I’m not sure, but we’ve met with founders working to break down the silos of data through the aggregation of EMRs and medical devices (i.e. BloomAPI, HumanAPI, Validic). In addition, Apple has HealthKit and Google has rolled out a new symptom-related </span><a href="https://googleblog.blogspot.com/2016/06/im-feeling-yucky-searching-for-symptoms.html"><span style="font-weight: 400;">search engine</span></a><span style="font-weight: 400;">. As all these pipes and infrastructure are laid down, and knowledge is being highly curated, I’m curious what healthcare app layer will emerge to keep people engaged with their health.</span> <span style="font-weight: 400;">If you had access to all this health data, what would you do with it?  I imagine a world where we solve the efficiency problem (e.g. use machine learning to take care of simple cases or offer pricing transparency), which in turn, allows doctors to spend their time on the most important cases where they can provide the most value.</span> <span style="font-weight: 400;">In short, we’re excited about companies who can flip the model around. It’s not just about matching patients with doctors. Instead, we should be capitalizing on all the health data already collected and aggregated by others, to build apps that keep us engaged daily, or at least weekly. Then, once you have the daily use case down, you can build networks that people will naturally go to. </span>

<span style="font-weight: 400;">We are often asked what we look for when evaluating marketplaces. Typically, we list out five main factors:</span> <ol> <li style="font-weight: 400;"><span style="font-weight: 400;">High fragmentation: a lot of suppliers and buyers</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">A “playing the field” relationship between buyer and seller, as opposed to monogamy where the seller doesn’t have any need to visit the marketplace after the first time</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">High frequency: buyers need to use the service often</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Total Available Market (TAM)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Transactional: if the marketplace can be part of the payment flow</span></li> </ol> <span style="font-weight: 400;">We discuss all five in the first chapter of our </span><a href="https://www.versionone.vc/wp-content/uploads/2015/11/Marketplace-Handbook-11-08-2015.pdf"><span style="font-weight: 400;">Guide to Marketplaces</span></a><span style="font-weight: 400;">, and many are based on Bill Gurley’s great post: </span><a href="http://abovethecrowd.com/2012/11/13/all-markets-are-not-created-equal-10-factors-to-consider-when-evaluating-digital-marketplaces/"><span style="font-weight: 400;">“All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces</span></a><span style="font-weight: 400;">.”</span> <span style="font-weight: 400;">Recently, we have been thinking a lot about the </span><b>new value that is created</b><span style="font-weight: 400;"> from marketplaces. And so, we’re adding a sixth factor to our list of criteria:  the ability to expand the overall market and create value.  We recognize that Bill addresses this point as well but we’d like to add more colour in this blog post.</span> <i><span style="font-weight: 400;">Good marketplaces connect supply and demand in a more efficient manner, but great marketplaces create new transactions, and add new value to the entire market.</span></i> <b>The value of marketplaces</b> <span style="font-weight: 400;">The Internet created a more connected world and this had an enormous impact on the way goods and services are bought and sold. In the past, search costs for both supply and demand were high because we were limited by our geographical reach and only saw local offline ads for our region. Now, today’s online and mobile marketplaces are able to connect people with products and services from all around the world with a push of a button.</span> <span style="font-weight: 400;">As geographical barriers come down and the cost of search and accessibility nears zero, more sellers are encouraged to join marketplaces since they see a clear, reachable demand for their supply. In this way, marketplaces aren’t just improving the efficiency of connections, they are also increasing the number of participants in the overall marketplace. </span> <span style="font-weight: 400;">To break it down: </span><b>more liquidity = more transactions = new value</b><span style="font-weight: 400;"> for the entire market.</span> <span style="font-weight: 400;">Take Boris’ AbeBooks as an example. Before the Internet, the only way for a booklover to find a rare book was to stumble across it at a local bookstore. But with an online marketplace, local bookstores could go online – and then suddenly, individual book owners could also start putting their rare books online. This unlocked entirely new supply around the world. Without the online marketplace, these individuals never would have sold their books because there was no distribution channel.</span> <span style="font-weight: 400;">Likewise, the sharing economy is a great example of creating value as these markets are effectively new altogether. For instance, people who never thought they’d be landlords or hotel proprietors are now hosts on Airbnb; people who never thought they’d transport people for money are now drivers on Uber. These platforms empower whole new groups of people to become sellers. </span><i><span style="font-weight: 400;">More sellers = more participation on the platform = more liquidity = more transactions = more overall value</span></i><span style="font-weight: 400;">.</span> <b>But wait… don’t all marketplaces create new value?</b> <span style="font-weight: 400;">Virtually all marketplaces create efficiency:  they make it easier for buyers and sellers to find each other and complete a transaction. But, not all marketplaces create value equally. For example, marketplaces may connect schools with substitute teachers, visiting doctors with hospitals, commercial landlords with retailers interested in setting up pop-up shops. These all certainly increase efficiency, but they might not necessarily expand the market.  The likely reason is because there’s finite supply and finite demand.  In other words, a new marketplace won’t create a new crop of teacher or doctors, or school and hospitals.  And in the absence of a new online marketplace, both sides would probably find each other eventually, albeit in an inefficient way (such as Craigslist).</span> <span style="font-weight: 400;">When a marketplace doesn’t naturally create new supply and demand, it’s not likely that there will be more transactions in the overall market. In short, the marketplace’s ability to expand the total available market is limited. This means that the marketplace’s growth potential is limited as well.</span> <span style="font-weight: 400;">As you’re building your marketplace or evaluating potential, think about efficiency </span><b><i>and</i></b><span style="font-weight: 400;"> value. You want to create efficiency and bring search and distribution costs down </span><i><span style="font-weight: 400;">and</span></i><span style="font-weight: 400;"> you also want to tap into new groups of participants, grow the overall number of transactions and increase value. The best marketplaces can do both!</span>

Didi Chuxing, the largest ride-hailing service is China, confirmed today that it <a href="http://www.bloomberg.com/news/articles/2016-08-01/uber-said-to-merge-china-business-with-didi-in-35-billion-deal">will acquire Uber China</a>. According to reports, the two companies will keep distinct brands, apps, and business operations, but the backends will be merged. The deal ends a long, costly battle between the two rivals: Uber had been spending $1B + a year to gain traction in China, while Didi Chuxing had been offering subsidies to its drivers and riders as well. This news means that we can now add Uber to the <a href="https://twitter.com/bwertz/status/759967976409866240">long list of U.S. companies</a> that couldn’t make it in China: <a class="zem_slink" title="eBay" href="http://ebay.com" rel="homepage">eBay</a>, <a class="zem_slink" title="Google" href="http://www.google.com" rel="homepage">Google</a>, <a class="zem_slink" title="Faceboo" href="http://www.facebook.com" rel="homepage">Facebook</a>; the jury is still out on what Amazon’s eventual fate will be. Yes, <a class="zem_slink" title="Yahoo!" href="http://www.yahoo.com" rel="homepage">Yahoo</a> got a multibillion-dollar windfall from its investment in China (<a class="zem_slink" title="Alibaba" href="http://www.alibaba.com/" rel="homepage">Alibaba</a>), but it never built a successful standalone product/company there. It seems like hardware companies (Apple) are the only ones with a chance of making it in China. There are many factors behind this string of failures. Companies operating in China face strict regulation/censorship (Facebook, Google, Twitter). There’s tough local competition (Uber and eBay). And there are cultural challenges that make it tough for a foreign company. But, the China prize is so huge that every single large tech company will try to succeed despite the spotty history of its peers. China is a must-do for large public companies, but it’s a much more difficult question for mid-sized tech companies. About 10 years ago, I traveled to China, South Korea and Japan for <a class="zem_slink" title="AbeBooks" href="http://www.abebooks.com" rel="homepage">AbeBooks</a> with my co-founder Hannes to understand our expansion options. We ultimately decided against going into China for three key reasons: <ol> <li><strong>Very different economics</strong>. The average selling price for a used book in China was $1, compared to about $24 on the AbeBooks platform. We’d need to sell many, many more books in China than the rest of the world to get the same revenues.</li> <li><strong>Very different culture. </strong>We had already expanded into a number of European countries over the years, but China seemed much more challenging to conquer – from the way our potential sellers thought about doing business with us to the lack of employees with the right profile to head up the initiative.</li> <li><strong>Risk relative to size. </strong>Ultimately, we were too small to take the risk. We would have to invest at least $8-10 million in this market which was simply too large of an investment relative to the size of our company (a very profitable $30-40m revenue business).</li> </ol> Does this mean that all mid-sized tech companies should stay out of China? Not necessarily. It’s an enormous opportunity and you can be successful if you have the following two things going for you. <ul> <li>You can find a trustworthy and powerful local partner</li> <li>Your outsider status (e.g. your Western brand) is a competitive advantage, and local competitors would be at a disadvantage for being “local.”</li> </ul> In the end, every founder and CEO will look at the China question, see the track record of every company before him or her, and decide for themselves what’s best.

<span style="font-weight: 400;">A question we’re often asked during conversations with early-stage entrepreneurs is “What do investors look for when considering a Seed or Series A startup?” At some point, this question might be followed by “What does it take to get to Series B?”</span> <span style="font-weight: 400;">The expected trajectory takes a startup from Seed to Series A, Series A to Series B, and so on. But as our good friend Christoph Janz at </span><a href="http://www.pointninecap.com/"><span style="font-weight: 400;">Point Nine Capital</span></a><span style="font-weight: 400;"> points out, “</span><span style="font-weight: 400;">financing rounds are obviously not a goal in itself. They are a means to a bigger goal.”</span> <span style="font-weight: 400;">Two months ago, Point Nine put together a very helpful chart linking important milestones and fundraising stages for SaaS companies: </span><a href="http://christophjanz.blogspot.com/2016/05/what-does-it-take-to-raise-capital-in.html"><span style="font-weight: 400;">“What does it take to raise capital, in SaaS, in 2016?”</span></a> <span style="font-weight: 400;">We recently collaborated with them to create a similar framework for marketplace startups which you can access <a href="https://docs.google.com/spreadsheets/d/1DaRrcgYXKJIzjgTK_rgGfaRLIU3LTdVTa3kfMEmCCK8/edit#gid=0">here as a Google Sheet</a> or in stylized <a href="https://gregburnison.ca/code/version1v/images/Marketplace-Napkin.pdf">Marketplace Napkin</a> form :)</span> <img class="aligncenter wp-image-2615 size-full" src="https://gregburnison.ca/code/version1v/images/Marketplace-Napkin.001-1.png" alt="Marketplace Napkin.001" width="1556" height="1951" /> &nbsp; Investing is part science and part art – as such, there will be exceptions to every rule here. Some startups can raise a big round early on (for example, when the founding team already has large exits under their belts), while other startups feel the frustration of struggling to raise money when they’re hitting every milestone on the chart. <span style="font-weight: 400;">Yet while it’s generalized, this chart can be a useful framework for founders to understand what benchmarks we as marketplace investors look for, and when we look for them. </span>

<span style="font-weight: 400;">Last week, in our blog post </span><a href="https://www.versionone.vc/is-social-dead/"><span style="font-weight: 400;">“Is Social Dead?”</span></a><span style="font-weight: 400;">, we wrote about the excitement surrounding messaging as a platform/conversational commerce. But, we also cautioned that messaging isn’t always the optimal way to get things done.</span> <i><span style="font-weight: 400;">One of the big unknowns is if the command line (or chat bubble) of a chat app is going to offer a better experience than an app. In some cases, the conversational approach of chat is the best solution for accomplishing a task; in other cases, it’s cumbersome and inefficient. After all, there’s a reason why we moved from DOS to Windows.</span></i> <i><span style="font-weight: 400;">Conversational commerce might be best when 1) it’s a completely new use case (e.g. it’s not already defined like hailing an Uber), and 2) it’s not all that complex of a transaction.</span></i> <span style="font-weight: 400;">These thoughts make the perfect intro to our latest investment, </span><a href="http://www.asktrim.com"><span style="font-weight: 400;">Trim</span></a><span style="font-weight: 400;">, which we believe is ideally suited for conversational commerce. Trim has built a money-saving robot that starts by cancelling those unwanted subscriptions.</span> <span style="font-weight: 400;">We’ve all spent money on subscriptions that we don’t need. In some cases, it’s due to procrastination (after all, companies make it much easier to sign up than to cancel their service). Other times, we simply forget about an old recurring payment as it quietly sneaks money away away from our account each month. For example, Trim co-founder </span><span style="font-weight: 400;">Daniel Petkevich realized he was still paying renter’s insurance for an apartment he no longer rented. We’re all guilty of these lapses – no matter how financially savvy or responsible we might be.</span> <span style="font-weight: 400;">Trim removes all the friction from identifying and cancelling unwanted subscriptions. First, it pulls in your data from bank accounts/credit cards and identifies your subscription payments. It then sends you a text message of all your listed subscriptions followed by instructions on how to unsubscribe from those you don’t really want or use any more.</span> <img class="size-medium wp-image-2610 aligncenter" src="https://gregburnison.ca/code/version1v/images/trim-example-371x300.png" alt="trim example" width="371" height="300" /> The simplicity and approachability of messaging are what make Trim work so well. There are no complex pie charts or long-term budgeting projections to pore over. Instead, Trim is more like a non-judgmental and really helpful friend who not only makes good suggestions but then can act on these suggestions (cancelling, negotiating, etc.) on your behalf. Going back to our thoughts about when conversational commerce is best:  Trim offers a completely new use case and doesn’t involve that complex of an activity. <span style="font-weight: 400;">Co-founders Thomas Smyth and Daniel Petkevich think of Trim as a proactive financial advocate for the average consumer…aka the 99% of the population who don’t have accountants, financial advisors, or personal assistants.</span> <span style="font-weight: 400;">Since Trim launched in November 2015, it has saved users more than $6 million in unwanted subscriptions alone. The average Trim user has 10 subscriptions and cancels two of them for an average annual savings of $383.</span> <span style="font-weight: 400;">Trim is our first Fintech-related investment and we’re very excited about it. Since Mint launched in 2007, people have become more comfortable sharing financial information with a third-party / tech company. There are so many untapped opportunities in Fintech right now, particularly in building solutions for the overwhelming majority of people who don’t enjoy pie charts and have never had a financial advisor. Average consumers may have good intentions surrounding their finances, but they don’t always have the right tools or resources at their disposal to take the best actions.</span> <span style="font-weight: 400;">If you’re interested, try out Trim: </span><a href="http://asktrim.com/"><span style="font-weight: 400;">http://asktrim.com</span></a><span style="font-weight: 400;">.  You can also find them on FB Messenger as they are the first personal finance bot to be available on the platform.</span>

<b></b><span style="font-weight: 400;">At Version One, we’ve centered our </span><a href="https://www.versionone.vc/our-refocused-investment-thesis/"><span style="font-weight: 400;">investment thesis</span></a><span style="font-weight: 400;"> around companies that leverage network effects. We have talked at great lengths about them in marketplaces and in </span><a href="https://www.versionone.vc/favorite-investment-themes-right-now-ai-machine-learning/"><span style="font-weight: 400;">artificial intelligence and machine learning</span></a><span style="font-weight: 400;"> startups.</span> <span style="font-weight: 400;">Social platforms can have incredibly strong network effects, but we’ve been relatively quiet on the subject. And, we’re not alone. It seems like a long time since anyone has given social much attention. Is it possible that this space has peaked?  </span> <span style="font-weight: 400;">The fact is that strong network effects make it hard to unseat the incumbents. It’s difficult to convince someone to leave their 300+ friends on Facebook and start over on a brand new platform. It’s this moat that makes network effect companies so attractive to investors and entrepreneurs. Once incumbents establish themselves, there’s little room for newcomers.</span> <span style="font-weight: 400;">However, we don’t believe that opportunity in social networking is dead. There are still possibilities out there for good companies to ride out the last vestiges of the original social wave through vertical niches, to build on the current wave of messaging as a platform/conversational UI, or to jump on a brand new social wave sparked by AI/ML.</span> <b>Riding out the old wave: new or under-represented verticals</b> <span style="font-weight: 400;">Over the years, verticalization has been a big trend in the social space, with niche sites catering toward interests, locales, professions. It seems like every week, TechCrunch writes about the launch of a new “Instagram for X” or “LinkedIn for X” where X ranges from doctors, teachers, finance professionals, academics, dog lovers, travelers, etc. It appears that much of the white space has already been filled in.</span> <span style="font-weight: 400;">However, there’s still opportunity through a vertical approach if 1) the underlying market is big enough and 2) there isn’t already a social network catering to the specific user group. </span><a href="https://figure1.com"><span style="font-weight: 400;">Figure 1</span></a><span style="font-weight: 400;"> (a V1 portfolio company) found this opening in healthcare.</span> <span style="font-weight: 400;">In addition, verticals themselves aren’t static. There’s always a potential to build a social network around an emerging vertical; for instance, Twitch rose with eSports’ popularity.</span> <span style="font-weight: 400;">And, the enterprise is still a nascent area for social networking. Clearly, Slack has made some big strides in this category, developing into a true platform with both integrations to other services and a growing ecosystem of apps created on top of it. However, tools like Slack are still very much focused on productivity and workflow first, with social and collaboration being unlocked as an outcome.  As a result, we believe there is strong potential to build social in the enterprise, but have a few unanswered questions:</span> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">How can you actually unlock collaboration in the enterprise setting that is targeted?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Is collaboration vertical and/or horizontal? Does it touch many parts of the organization or just a specific department/team?  </span></li> </ul> <b>Building on the current wave: Messaging as a Platform</b> <span style="font-weight: 400;">There is a lot of excitement around Messaging as a Platform right now. In China, WeChat users get movie tickets, check their bank statements, reserve a hotel room, and schedule an appointment with their doctor, all through the “messaging” app. But a dominant messaging app still hasn’t emerged in North America – and companies and investors are eager to replicate WeChat’s success in China.</span> <span style="font-weight: 400;">However, Facebook Messenger, Google Allo, and Apple iMessage are all opening up their platforms. This doesn’t leave much of an opportunity for a newcomer to build a new messaging platform, although there are still plenty of opportunities to create products that leverage the existing messaging apps as an interface.</span> <span style="font-weight: 400;">The key question is: where is messaging the optimal way of getting things done?</span> <span style="font-weight: 400;">One of the big unknowns is if the command line of a chat app is going to offer a better experience than a native app. In some cases, the conversational approach may be better for accomplishing a task; in other cases, it’s cumbersome and inefficient. After all, there’s a reason why we moved from DOS to Windows.</span> <span style="font-weight: 400;">We have no doubt that we’ll be interacting with brands and companies via a messaging app much more in the near future. However, just because something happens inside a chat app doesn’t necessarily mean it needs to take on a pure conversational UI.</span> <span style="font-weight: 400;">Conversational commerce might be best when 1) it’s a completely new use case (e.g. it’s not already defined like hailing an Uber), and 2) it’s not all that complex of a transaction.</span> <b>Creating a new wave: the future</b> <span style="font-weight: 400;">As with any industry, the biggest opportunities are typically found at the cusp of a new wave of innovation. The emergence of augmented reality and vertical reality will most likely change how we interact with others.  </span> <span style="font-weight: 400;">It’s still too early to predict exactly how social will manifest itself in this new AR/VR age, but we’re interested in seeing how a more immersive social experience can lead to new ideas and products (more Pokemon anyone?).</span>

Hope you had a great Canada Day and Fourth of July weekend! <span style="font-weight: 400;">Here’s a quick recap of some of this quarter’s news clippings for V1 and our portfolio companies. Keep in mind that these are just the things that have been announced publicly; other equally important and interesting things have been happening behind the scenes too.</span> <b>Funding announcements</b> <span style="font-weight: 400;">We made three new investments this quarter. They are all yet to be announced but include our first Fintech company, a dev tool company and knowledge management company.</span> <b>Portfolio companies in the news</b> <span style="font-weight: 400;">Seattle-based sales tech company </span><a href="https://outreach.io/"><span style="font-weight: 400;">Outreach</span></a><span style="font-weight: 400;"> raised more </span><a href="http://www.seattletimes.com/business/technology/seattle-startup-outreach-pulls-in-175-million/"><span style="font-weight: 400;">$17.5 million in Series B funding</span></a><span style="font-weight: 400;">. Outreach is used by sales professionals at companies like Adobe and Zillow, giving them a customizable workflow to communicate with clients and prospects. It integrates with Salesforce’s CRM solutions, with plans for Microsoft Dynamics in the works too. </span> <span style="font-weight: 400;">Retailer Frank + Oak, known for making high quality fashion for millennial males, announced its plans to </span><a href="http://www.instyle.com/news/frank-oak-launch-womenswear"><span style="font-weight: 400;">launch a womenswear</span></a><span style="font-weight: 400;"> collection this fall. The collection (which will comprise of clothing, outerwear and bags), is said to have “functional, modern-day classics that stay true to Frank + Oak's masculine origins, but with a feminine touch.” </span> <span style="font-weight: 400;">In other news, Shippo announced new partnerships with both </span><a href="https://goshippo.com/blog/stripe-shippo-partner-streamline-ecommerce/"><span style="font-weight: 400;">Stripe</span></a><span style="font-weight: 400;"> and </span><a href="https://goshippo.com/blog/introducing-uberrush-shippo-demand-delivery-network-powered-uber/"><span style="font-weight: 400;">UberRUSH</span></a><span style="font-weight: 400;">. This means that businesses using Stripe can get discounted shipping rates and purchase labels directly from Shippo. Businesses using Shippo in San Francisco, NYC, and Chicago now can offer local customers on-demand delivery via UberRUSH.</span> <span style="font-weight: 400;">And in June, Figure 1 – which started out as a photo-sharing app and network for medical professionals – announced it’s adding direct messaging to its platform. In the </span><a href="https://techcrunch.com/2016/06/06/photo-sharing-app-for-health-professionals-figure1-adds-direct-messaging/"><span style="font-weight: 400;">words of TechCrunch</span></a><span style="font-weight: 400;">, “showing signs the startup wants to be more of a Facebook and less of an Instagram in its field.”</span> <b>Looking ahead: what we’re excited about</b> <span style="font-weight: 400;">Back in February, we published a more </span><a href="https://www.versionone.vc/our-refocused-investment-thesis/"><span style="font-weight: 400;">focused investment thesis</span></a><span style="font-weight: 400;"> centered on network effects. We still like marketplaces (and recently syndicated our </span><a href="https://www.versionone.vc/marketplace-handbook/"><span style="font-weight: 400;">marketplace handbook</span></a><span style="font-weight: 400;"> in </span><a href="https://www.versionone.vc/marketplace-deck/"><span style="font-weight: 400;">deck form</span></a><span style="font-weight: 400;">), but we’re also looking toward the </span><a href="https://www.versionone.vc/favorite-investment-themes-right-now-ai-machine-learning/"><span style="font-weight: 400;">AI/ML space</span></a><span style="font-weight: 400;">. Some themes that we’re currently exploring include:</span> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Autonomous vehicles and drones</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Commoditized robots with command line in the cloud</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Automating enterprise processes</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Data analysis for large verticals</span></li> </ul> <span style="font-weight: 400;">Moving forward, we’re excited to meet great founders working on interesting ideas that leverage strong network effects – including marketplaces, social, SaaS, or AI/ML. </span> <span style="font-weight: 400;">And finally, this has been an emotional quarter for the V1 family, as we are heartbroken by the passing of Jon Zimmerman, founder of <a href="http://www.frontdeskhq.com">Front Desk</a>. For those of you lucky enough to have met or known Jon over the years, you know that he was an </span><a href="http://learn.frontdeskhq.com/blog/remembering-jon"><span style="font-weight: 400;">amazing entrepreneur and even better person</span></a><span style="font-weight: 400;">. We are all better for having known you, Jon. </span>

About two to three years post launch, companies typically undergo an interesting transition: they’ve made it through the survival phase and are maturing. It’s time to focus on building a company long term. <span style="font-weight: 400;">For most companies, this is a hard transition to make. In the early days, the goals were crystal clear: Survive! Find product-market-fit! Get to the next funding round! This is a very short-term oriented phase; there are emotional ups and downs with each win and loss, along with an incredible sense of urgency. During this stage, employees form a close knit team. Everybody is involved with a little bit of everything. There’s excitement every day.</span> <span style="font-weight: 400;">Then, somewhere between the A and B round, a company starts growing up. The super motivated team of “swiss army knives” starts settling into more specialized and compartmentalized roles. It’s usually around this time that a start-up brings in senior management, adding a brand new layer and hierarchy. There’s more process, less excitement. And, the focus inevitably shifts from daily survival to quarterly goals and yearly budgets.</span> <span style="font-weight: 400;">It’s only natural that some of the earliest employees will leave during this phase, either because they prefer the rush of an early start-up to the stability of a larger company; they’re bored or unhappy with their new (and specialized) position; or they simply can’t scale in the same way the organization scales.</span> <span style="font-weight: 400;">With all these growing pains, it’s very important that the founder/CEO can step up and steer the transition from short-term survival to long-term company building. A few things become extremely important at this stage:</span> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Clear company vision and mission: Why are we doing this and why does this company matter?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Rhythm: How do we find the right rhythm for setting and executing against quarterly goals?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Accountability: How do you drive accountability, when the layers and process of a larger company can make people feel less accountable? How do you break down the company goals into Objectives and Key Results?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Talent/employee development: How can you grow, develop, and motivate employees so they stay engaged for a long time?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">How do you celebrate the little wins and the continuous (but small) progress? How do you recognize all the people who make the company a little bit better every day?</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">How do you as the founder/CEO set Big Hairy and Audacious Goals (BHAG) from time to time to push the organization and maintain the sense of urgency that can so easily slip away with long-term goals?</span></li> </ul> <span style="font-weight: 400;">From AbeBooks, I know first-hand how difficult this transition can be – and, it’s a very common discussion topic with our later-stage portfolio CEOs. You can breathe a sigh of relief if you’ve made it out of the early-survival stage, but recognize that this next stage brings a unique set of challenges. It may be difficult, but it is possible to keep things meaningful and people engaged as you grow.   </span>

<span style="font-weight: 400;">At Version One, we take a thematic approach to investing and are very focused on <a href="https://www.versionone.vc/our-refocused-investment-thesis/">start-ups with strong network effects</a>, like <a href="https://www.versionone.vc/marketplace-handbook/">marketplaces</a> and social platforms. This year, we’ve been writing about the power of Artificial Intelligence and Machine Learning, and the potential for </span><a href="https://www.versionone.vc/whats-your-data-strategy-defining-the-data-hierarchy/"><span style="font-weight: 400;">strong data network effects</span></a><span style="font-weight: 400;"> to emerge with these companies – particularly when start-ups can build </span><a href="https://www.versionone.vc/data-not-algorithms-is-key-to-machine-learning-success/"><span style="font-weight: 400;">proprietary data sets</span></a><span style="font-weight: 400;">.</span> <span style="font-weight: 400;">Here are some of the AI and machine learning investment themes that we are actively interested in right now (and have already made a few investments):  </span> <b>Autonomous vehicles and drones</b> <span style="font-weight: 400;">Recent advances in computer vision and AI have been accelerating the development of autonomous vehicles and drones. Everybody has probably heard about Cruise and GM by now, but there is much more potential in this space. We’ve invested in </span><a href="http://vertical.ai/"><span style="font-weight: 400;">Vertical AI</span></a><span style="font-weight: 400;">; they’re using computer vision guided robotics to turn drones into aerial filming tools.</span> <b>Commoditized robots with command line in the cloud</b> <span style="font-weight: 400;">Amidst all the advancements in robotics, there are many applications that are still conducted manually, or rely on very expensive machinery. </span><a href="https://techcrunch.com/2016/02/01/opentrons-aims-to-be-the-pc-of-biotech-labs/"><span style="font-weight: 400;">Startups like OpenTrons</span></a><span style="font-weight: 400;"> are democratizing these tools. For example, OpenTrons offers a $3000 robot for life science applications that’s controlled by a web browser and doesn’t require complex coding on the backend. There is a strong opportunity here to move many current industrial and research robots from the mainframe age to the Cloud/PC age.</span> <b>Automating enterprise processes</b> <span style="font-weight: 400;">Every single function in the enterprise can be reinvented by AI. We are looking at </span><a href="https://www.versionone.vc/the-big-opportunity-for-bots-in-messaging/"><span style="font-weight: 400;">highly vertical applications</span></a><span style="font-weight: 400;">, and have already made investments (yet to be announced) in the customer service and enterprise knowledge space.</span> <b>Data analysis layer for large verticals</b> <span style="font-weight: 400;">Drones and commoditized sensors are making data capture cheaper and better. And as a result, data analysis is more powerful and important than ever before. In some cases, drones/sensors are charting new territory and capturing data that was never before possible. In other cases, data is more granular or captured at greater frequency. </span> <span style="font-weight: 400;">For example, drones with cameras can perform routine inspections on crops or oil and gas assets. Sensors can continually monitor the status of production line machinery (think Industrial IoT). And, fixed cameras are used for security applications. In every case, there’s a strong need to add the right data storage/analytics/search layer to help businesses get the most value from all this new data.</span> <span style="font-weight: 400;">We’ll be making some investment announcements later this year regarding machine learning and AI-driven start-ups. And, we’re always looking for start-ups who are doing great things (or have the potential to do great things) in these areas. </span> &nbsp;

The ability to make fast decisions often means the difference between good and great – this is true for both entrepreneurs and investors. <span style="font-weight: 400;">At Version One, we usually know within a few days whether we should invest in a company or not. After we get this initial feeling, we can spend weeks doing more due diligence, but the benefits will only be incremental. If we know the company probably isn’t a good fit for us, delaying the decision with added research and deliberation just eats up everyone’s time.</span> <span style="font-weight: 400;">It’s the same for entrepreneurs. It’s usually better to make a decision quickly – even if it’s the wrong decision – than sitting too long. When you try to reach 100% certainty before acting, you slow everything and everyone down. And most likely, your decision won’t be any different or better than the action you would have taken at 80%.</span> <span style="font-weight: 400;">Of course, not every decision can and should be made quickly. Jeff Bezos refers to</span><a href="http://www.businessinsider.com/jeff-bezos-on-type-1-and-type-2-decisions-2016-4"> <span style="font-weight: 400;">two types of decisions</span></a><span style="font-weight: 400;">. Type 1 decisions are consequential and irreversible, or nearly irreversible. Type 2 decisions can be easily reversed; they’re like walking through a door…if you don’t like the other side, you can always go back.</span> <span style="font-weight: 400;">Bezos’ message is that business leaders often use the heavy-weight Type 1 decision-making process on too many decisions, including those that could be easily changed. As a result, organizations are too slow and risk averse to truly innovate.</span> <span style="font-weight: 400;">I couldn’t agree more, but what about those decisions that really belong in the Type 1 category? How should we approach the major decisions that will have a big impact on our personal lives or business? For example, a business model change, pivot, branding decision, or major career change.</span> <span style="font-weight: 400;">The common approach is heavy deliberation involving a pro/con list – it’s often a very internal process. However, I’ve found it more helpful to seek out people with very different perspectives on the situation. The biggest (and least obvious) insights have always come from a conversation with someone else.</span> <span style="font-weight: 400;">When you’re faced with a major decision, look inward, but also be sure to see the situation through multiple eyes and perspectives. The right path to take will become obvious.</span>

It’s typically a binary outcome for marketplace start-ups at the beginning: either you figure out the chicken-and-egg problem or you don’t. But, marketplaces can face a binary outcome at the other end too: either you scale your marketplace into a large, stand-alone company that can go public, or you find yourself with few other exit options. <span style="font-weight: 400;">This reality is quite different than the exit opportunities for SaaS companies. It’s common for SaaS start-ups to be bought by large enterprises for the technology/product. The acquiring company can just plug that product into their existing distribution channel to help round out their current product suite and grab more market share (and some <a href="http://fortune.com/2016/06/06/why-saas-consolidation-is-not-happening/">might argue</a> that even this is happening less frequently).</span> <span style="font-weight: 400;">However, in the case of marketplaces, it’s much harder to leverage existing distribution or find synergies between the acquirer and acquired company:</span> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">A marketplace’s technology/product is often custom and proprietary, making it tough to replace with existing technology and save costs.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">It’s hard to transition buyers and sellers over to the acquirer’s marketplace, as I’ve seen first hand. When</span><a href="http://www.prnewswire.com/news-releases/amazoncom-acquires-exchangecom-adding-more-than-12-million-book-and-music-items-for-sale-and-auction-74232082.html"> <span style="font-weight: 400;">Amazon acquired Bibliofind</span></a><span style="font-weight: 400;"> (a competitor to my company <a class="zem_slink" title="AbeBooks" href="http://www.abebooks.com" rel="homepage">AbeBooks</a>) in 1999, they expected to switch all of the Bibliofind sellers over to Amazon. Instead, most of the sellers left the platform and signed up with AbeBooks, giving us a huge boost.</span></li> </ul> <span style="font-weight: 400;">So, if an acquiring company cannot fundamentally change the economics of the marketplace they acquire and if it’s tough to switch over the new buyers and sellers, that leaves little incentive to acquire a marketplace.</span> <span style="font-weight: 400;">In fact, the only reason you’d ever acquire a marketplace is if it were a large, standalone unit that could grow on its own. <a class="zem_slink" title="eBay" href="http://ebay.com" rel="homepage">eBay</a> was relatively successful when it acquired marketplaces like Rent.com (2005) and <a class="zem_slink" title="StubHub" href="http://www.stubhub.com/" rel="homepage">StubHub</a> (2007). But, the universe of eBay-like buyers is limited, as is the number of marketplaces that build platforms with several billions of GMV.</span> <span style="font-weight: 400;">This means that an IPO is the exit option for the most successful marketplaces. Over the past few years, we’ve seen this with Alibaba, <a class="zem_slink" title="Lending Club" href="http://lendingclub.com" rel="homepage">Lending Club</a>, and <a class="zem_slink" title="Etsy" href="http://www.etsy.com/" rel="homepage">Etsy.</a> And, we will most certainly see this with Airbnb, Uber, and Lyft.</span> <span style="font-weight: 400;">In short, it’s a binary outcome for most marketplace start-ups at both the beginning and end. Be sure to set your expectations and business model accordingly.</span>