Nic Brisbourne's view from London on technology and startups

Google is the new Microsoft – musing on the meme

By | Google, Uncategorized | 2 Comments

We have just learned that over half of Google searches are now on mobile which has got me reflecting on where the company is going.

Before I go any further I should say I’m a massive fan. Google has had an amazing run as a company, built many amazing products, is pursuing lots of super interesting and brave projects, and generally handles itself well. Moreover, I’m a very happy customer both professionally and personally and I have many friends who work there.

However, the world has turned decisively in directions that don’t favour them. The Apple driven smartphone revolution has taken attention from the open web where Google is strong to apps, the Facebook inspired social media revolution has taken traffic from the open web to closed ecosystems which Google can’t access, and they are haemorrhaging search volume to Amazon.

Microsoft’s monopoly on desktop software looked unassailable until the internet came and similarly Google’s monopoly on desktop internet looked unassailable until a couple of years ago. Microsoft invested big in the internet with Internet Explorer and their MSN portal (remember that?) and now Google is investing big in Google Maps and Android and has numerous failed attempts in social. In an interesting parallel, Microsoft’s internet products were free just as Google’s mobile products are free. Both wanted to protect their core business model.

In another interesting parallel both launched lots of new projects in an attempt to build new revenue streams. Prosaically they both moved into enterprise and more radically Microsoft achieved good success with Xbox whilst the jury is still out on Google’s self driving cars and other Alphabet projects.

Despite all these similarities the companies feel very different. In the 1990s Microsoft was an aggressive monopolist and few people liked them. In 2015 Google has a mix of supporters and detractors but to my mind at least the company has many endearing qualities, as I’ve said.

It’s unclear how much that will matter though. In the arena of business profits count, and whilst feelings might buy Google some loyalty from people like me that won’t be enough to save them from being the next Microsoft. In fact, as I write this it’s difficult to see what will.

I would love for their autonomous cars to become a serious business, or maybe project Loon, but if they do they will become Google’s equivalent to Microsoft’s Xbox, thus completing the parallel.

Finally – being the next Microsoft is far from a fate worse than death. As of June 30th they were still the world’s second most valuable company, and on top of that they are now enjoying a resurgence.

Talk about what you’ve done – pitch advice

By | Startup general interest | No Comments

This advice is from a 2008 post by Jason Calacanis (hat tip Founders Notebook):

4. Talk about what you’ve done, not what you’re going to do.
Weak startups and their leaders seem to immediately start talk about “what’s next,” as opposed to focusing on the core product. Anyone can say we’re going to add: a mobile version, collaborative filtering, an advertising network, visualizations, a marketplace, a browser plugin, a browser and a social network to their product. In fact, given the amount of open source and off the shelf software out there, combined with the large number of developers in the world, anyone can bolt these things on to their service in a week or three.

Jason was advising on how to demo a product, but this applies equally to investment pitches.

Only people with good stories can talk about what they’ve done. Anyone can make up stuff they are going to do in the future. Obviously the more mature a company is the more stuff there is in the past that can be talked about, but founders of super early and idea stage companies can still follow this advice. They should put their plans into context by talking about the things they did to inform them.

Two examples from founders we’ve backed. First was Matt Fox, founder of Snaptrip. When he told us about his plans for a last minute cottage holiday site he referenced his previous experience at Pure Holiday Homes, describing what he’d done before gave us a lot of confidence that he could do something similar again. Second was Ben Farren, founder of Spoke. The thing I remember most from our first meeting was him describing his customer service challenges in a previous iteration of the business and the insights they gave him into what men want from a clothing brand.

When an idea is ready to become a business

By | Forward Partners | No Comments

As regular readers will know Forward Partners invests in companies at idea stage, when there is literally nothing more than an entrepreneur and a plan. I’m frequently asked how we can do that and hope to make great returns given the risks of investing at this stage.

The answer to that question has many parts, not least that we have a product and growth team with a lot of experience helping entrepreneurs turn their ideas into great companies, but the one I’m going to focus on today is how we assess whether an idea is mature enough to take significant investment and become a business.

The following list is adapted from a post my colleague Matt Bradley recently wrote a post on the Forward Partners blog.

  1. There’s a great product idea – typically an exciting use case or exciting solution to a difficult problem, backed up by some objective desk research
  2. There’s a deep understanding of the market – customer behaviours and motivations, supply chain, pricing, go-to-market etc.
  3.  The competitive environment is benign – competitors are properly understood and differentiation is clear (note the properly…)
  4. Business fundamentals are strong – there’s a clear picture of how margins, customer acquisition costs, and customer life time value will look at scale
  5. Basis for long term competitive advantage – barriers to entry are clear, at least at scale
  6. Right skills – the founder is well suited to the opportunity
  7. Compelling plan for the first year

It took us a while to understand the importance of this last point. Venture capital works best when execution is fast and progress is rapid. Every founder goes through a period of exploration and in most cases there are periods that I characterise as ‘meandering’ – new ideas are explored, information is gathered, connections are made, but there’s no clear progress. Then (for the lucky ones at least) the stars align, a strong hypothesis emerges and a plan naturally comes next. That’s the point when we like to invest and help companies accelerate. We will help founders on their journey up to that point, but investing before the hypothesis is strong enough to generate a clear plan creates challenges because the idea isn’t yet ready to become a business and progress won’t be rapid.

European venture growing nicely – UK remains strong

By | Venture Capital | 2 Comments

Gil Dibner just published this great analysis of Q3 venture activity in Europe and Israel. It’s very comprehensive and well worth flicking through the full 55 pages if you are investing or raising money over here.

Here are the seven points that stick in my mind.

  • Investment activity is growing fast – up roughly 2x year on year (slide 4)
  • UK and Israel dominate with France and Germany next at approx half the size (slides 10 and 11)
  • UK saw $897m of investment in Q3 – ($622m if you exclude the $275m investment in Fanduel) (slides 10 and 11)
  • The number of $100m+ ‘mega-rounds’ is increasing with 4 in Q3 and 6 in Q2
  • US VCs participate in around 20% of European deals, with a heavy skew towards later rounds (slides 18 and 19)
  • Consumer investments are the biggest sector – likely because consumer markets are local markets and therefore less vulnerable to competition from Silicon Valley backed startups (slides 22 and 23)
  • Fintech is the largest sector, particularly in the UK (slides 36 and 41)

Sustainable engineering – avoid big re-writes

By | Forward Partners | 4 Comments

Last week friend of Forward Partners Douglas Squirrel published a post about Sustainable engineering on The Path Forward in which he advises founders on how to scale their engineering effort. When the focus is on validating the idea and building first versions of the product it usually makes sense to take shortcuts in code and process quality to accelerate learning, but when the focus shifts to scaling the company it’s important to shift to scalable and sustainable software development practices.

Squirrel’s advice is to eschew ‘big bang’ changes such as re-writing in a new language or framework in favour of incremental changes using techniques like ‘inline’ refactorings and ‘spike stories’. ‘Big bang’ changes nearly always come in late, over budget, and under specification whilst incremental techniques have lower risk and keep the feature set moving forward. Interestingly given he’s an experienced startup CTO himself, Squirrel says to be wary of the advice of developers who “always want to re-write everything”.

If you are in this situation, or think that you might be I highly recommend you read the full post.

Our plan is that more and more authors like Squirrel will become Pathfinders and contribute to The Path Forward. Squirrel is actually our second Pathfinder, the first was Matt Buckland, who used to work here but is now Head of Talent at Lyst. He wrote a about How to read a CV and we have more articles from him coming in the near future.

If you would like to become a Pathfinder let me know via the comments or otherwise reach out.

Transport for London’s ‘Private hire proposals’ make me mad

By | Announcement | One Comment


Many of you will have seen this already, but Transport for London’s ‘Private hire proposals’ are so loaded in favour of protected interests and against consumer choice that I’m cross enough to have a moan here. Hopefully this post will make a small contribution to the debate and increase the chances of a sensible outcome.

There are 25 proposals in total. The five below seem to do nothing for the consumer and are only explainable as an attempt to make Uber less attractive. If they go through 10m+ Londoners will have less choice, wait longer for their cabs and probably pay higher prices so that a small number of taxi drivers can be better off.

How can that be right?

  1. Operators “must provide booking confirmation details to the passenger at least five minutes prior to the journey” – should be a matter of consumer choice, and who wants this when you can have a car in 2-3 minutes?
  2. Companies “must not show vehicles being available for immediate hire either visibly or virtually via an app” – hard to see how this hurts anybody, and again should be a matter of consumer choice
  3. Operators “must offer a facility to pre-book up to seven days in advance” – consumers should be able to decide whether they value seven day advance bookings 
  4. Drivers may only work for one operator at a time – doesn’t seem very fair on drivers to restrict their employment options
  5. There should be “controls on ridesharing in public vehicles” – targets UberPool, a ridesharing service

This list is taken from an article on the

Bill Gurley’s insights into the future of ecommerce – know your customer and personalise

By | Startup general interest | One Comment

A Fireside Chat with Bill Gurley of Benchmark: The Future of Ecommerce — September 15, 2015 from Sailthru on Vimeo.

Gil Dibner recommended this video with Bill Gurley in a recent post about the five forces of venture capital. It’s 50 minutes and I very rarely watch videos this long (the opportunity cost is too high), but I’ve been consistently blown away by Bill’s insights on his blog and decided to at least start this one. That was a good decision because I stuck with it to the end.

If you’ve got the time and you’re interested in ecommerce I highly recommend watching it yourself.

If not these were the points that stood out for me:

  • Google is vulnerable to Amazon because Amazon has become the first place people search for products. Bill calls this ‘funnel reversal’. Google used to be at the top of the funnel, but Amazon has now taken that place for ecommerce searches. That’s significant because the top of the funnel is the most valuable place to be.
  • Future ecommerce opportunities are in areas where the customer experience can be so radically better that people similarly go around Google. Amazon Prime is a night and day better experience than starting on Google. Creating new experiences like that going forward requires a deep understanding of the customer. That experience can manifest itself in product customisation (Bill gave the example of Warby Parker, Spoke and Lost My Name are good examples from our portfolio) or in amazing services (Bill gave Uber as an example, Thread is a good example from our portfolio). He noted that Uber has succeeded in going round Google to the extent that the search term ‘limousine’ is tracking at 20% of it’s peak seven years ago (probably for San Francisco searches).
  • One key to understanding customers is what Bill calls ‘money balling’, i.e. knowing everything that every customer does in your business, running the deep analytics and employing data science to draw insights.
  • Customer retention is where a lot of companies could do better. Many businesses are great at acquiring customers, but leave money on the table when it comes to keeping them. This comes back to knowing your customer.
  • Anxiety relief – humans will love it when you take anxiety away, and offering anxiety relief is a key benefit that ecommerce companies can offer. When we order from Amazon anxiety is minimal because we have a very high degree of trust that the price will be fair and the delivery will arrive on schedule.
  • He mentioned a couple of times that Google playing is playing defence in important areas and that large companies are much stronger when they play offence. There’s a growing number of smart people who are concerned about Google’s prospects.

Old European brands aren’t cool anymore

By | Startup general interest | No Comments

Screen Shot 2015-09-29 at 16.10.55

This is Coolbrands 2015 list of the top brands, chosen by a panel of experts and 2,500 members of the British public. They don’t disclose the weighting.

What’s striking about this list is the prevalence of new(ish) digital brands and relative absence of classic brands, particularly big fashion houses. It really is out with the old and in with the new. I make it seven tech brands and, being generous, five classic brands (Ray Ban, Alexander McQueen, Chanel, Aston Martin, and Liberty). Sony, Bose, Rolex, Dom Perginon, and Selfridges all fell out of the list.

There’s also a shift towards US brands. Apple has been top for four years in a row now.

Looking at the types of brands that are doing well I’m struck by the extent they are rooted in great product. I like to say that the essence of a strong brand is a good promise delivered and companies like Apple, Instagram, YouTube and Spotify all deliver in spades. That contrasts with some of the brands that are falling off this list which are rooted in prestige.

Ad-blockers and product quality

By | Advertising, Startup general interest | One Comment

The rights and wrongs of ad-blockers have been debated for years. My view is that people who block ads are choosing to free-ride on users who don’t, and whilst I would stop short of calling it immoral, I don’t think it’s good behaviour. However, the number of people blocking ads has always been relatively small and the subject has mostly been of academic interest. The interesting thing now is that post iOS 9 that might change.

Three forces are at play here:

  • The trend to mobile – smaller screens and slower connections make ads more intrusive
  • Growth in support for the the anti-ad/pro-privacy meme
  • It’s getting easier for users to block ads

The Apple vs Google battle is an important part of the backstory. As Jason Calacanis details here, Apple’s assault on ads and its pro-privacy position helps in the iPhone vs Android battle and is a direct attack on the core of Google’s business.

Also important is that the online advertising industry still hasn’t got it’s act together. Ten years ago I was hopeful that the adtech was on a trend to become more about product, less about relationships and in the process would shed a lot of it’s shadier practices. That manifestly hasn’t happened and we still have an over-complicated landscape characterised by opaque relationships and misaligned incentives that doesn’t serve advertisers as well as it could.

Meanwhile larger advertisers have been moving an increasing percentage of their budgets online (they have to go where the audience is) which is crowding out startups.

It’s still early days for iOS 9 ad-blockers, but it seems likely we will see an acceleration of the trend of startup founders focusing on product quality as a way of rising above this mess. Since the advent of social media native advertising, earned media, and customer referrals have been growing in importance as part of the startup advertising mix and they work best for high quality products.

Moreover, the products that really win in this environment aren’t simply of high quality, they are also noteworthy, delivering moments of ‘wow’ that stick in the mind.

The mindset of a good investor

By | Uncategorized, Venture Capital | One Comment

There were two articles on my Twitter list today about the mindset of good investors. The first was a Techrunch article explicitly about bias in VC decision making. They identified six cognitive biases investors suffer from (similarity bias, local bias, anchoring, information overload, and gender bias) and offer some tips for making bias free decisions. I’m fascinated by cognitive bias because by definition it’s hard to weed out, and reading the Techcrunch article this morning I wondered if that fascination is rooted in a subconscious desire to keep working on myself to be a better investor.

Stepping up a level, the conclusion I’ve come to over the years is that the key to avoiding bias and making good investment decisions is total objectivity. No emotions, thorough analysis, and clearly understood reasons.

The tips in the Techcrunch article are in fact all tactics for keeping discipline in these three areas. Documenting decision making processes, establishing and constantly refining investment criteria, and following principles are all ways of taking the emotion out, making sure the analysis is thorough and the reasons understood.

I haven’t thought of it in this way before but a number of the things we do at Forward Partners serve to bring thoroughness and clarity to our investment analysis. The most important are clearly understood deal criteria (top of the list: every deal must have the potential to return the fund), standard format investment papers, and a culture of open debate and shared ownership of deals.

The second article was an Economist review of Superforecasting: The Art and Science of Prediction. By Philip Tetlock and Dan Gardner, which details the characteristics of people who are good at predicting the future. They drew on a contest run by American spies in the wake of the Iraq debacle:

Begun in 2011, it posed hundreds of geopolitical questions (“Will Saudi Arabia agree to OPEC production cuts in November 2014?” for instance) to thousands of volunteer participants. A small number of forecasters began to pull clear of the pack: the titular “superforecasters”. Their performance was consistently impressive. With nothing more than an internet connection and their own brains, they consistently beat everything from financial markets to trained intelligence analysts with access to top-secret information.

Tetlock analysed the superforecasters and found they shared the following characteristics:

  • clever, but “by no means geniuses”
  • they viewed the world as complex, requiring different approaches to understand different areas (no simple rules or models)
  • comfortable with numbers and statistical concepts like regression to the mean, but not statisticians
  • hungry for information
  • willing to revisit predictions in light of new data
  • able to synthesise material from sources with very different outlooks on the world
  • self aware and reflective
  • willing to learn from their mistakes
  • more interested in why they are right or wrong than whether they are right

All of these traits are learnable and for the investors amongst you this is a good checklist of things to be doing and/or to work on. Investing, after all, is about predicting the future.

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