Category Archives: Uncategorized

Disney’s new streaming service is the way of the future

By | TV, Uncategorized | One Comment

I’ve long thought that producers of TV and movie content should build direct relationships with their customers over the web. It’s been slow to happen though, largely because the content producers were wary of retribution from their cable, satellite and IPTV partners if they launched properties that competed with them. So instead of content owners moving to the web we got new web companies stepping into the void – largely Netflix, Amazon and Hulu. To start with they were aggregators in the same way as cable companies were aggregators and they competed with traditional TV companies for content – a happy world for content producers like Disney.

But then Netflix and Amazon started commissioning their own content and it started to look like the traditional TV content companies had missed a trick and left the door open for new players.

But now Disney is pushing back. They’ve just launched a direct to consumer streaming service, DisneyLife, for their content here in the UK. HBOGo is similarly a direct to consumer streaming service from a major content creator, albeit in the US.

You might be wondering, where does this all go?

I think we will see more TV content companies build direct to consumer propositions. That seems pretty certain.

The more interesting question is what happens to the consumer proposition. At the moment most people buy a subscription service from a cable or satellite provider which includes connectivity and a menu of options, maybe have a Netflix or Hulu subscription on top, and probably buy the odd movie from iTunes or Google Play.

Going forward the number of places where consumers can go to buy TV content is going to increase. There’s really value to subscription services which allow for a low effort, lean back TV experience where nobody has to think about whether it’s worth paying for the next show, but there’s a limit to the number of services anyone is going to subscribe to. That points to a significant part of the market going on a pay-per-view model. Maybe that will continue to be aggregated on iTunes and Google Play, but maybe new aggregators will arise which take the show from the content owners site and charge a lower margin. Maybe they will also offer superior browse and discovery.

Finally – this is a cord-cutters vision of the future where access is unbundled from content.

Similarities between raising a venture fund and raising for a startup

By | Uncategorized, Venture Capital | No Comments

It’s becoming a cliché that read raising for a VC fund is like raising for a startup. I know this because fur much of this year I’ve been on the road for Forward Partners and when I tell entrepreneurs what it’s like they smile, give me a knowing nod like we’re insiders together, and say “it’s just like raising for a startup”.

The basic similarities are lots of meetings, unpredictable processes, lots of wasted time, and a feeling that there really ought to be a better way.

I’m at the Super Investor conference in Amsterdam, which is the main event each year when private equity and venture capital fund managers and their investors (Limited Partners out LPs) get together. At the Fundraising Summit yesterday LPs repeatedly made the following points which really cemented the point:

  • LPs receive around 400 fund pitches per year and invest in 8-10. Comparable numbers at VC funds are 1,000 pitches for a around 10 investments (Forward Partners will have received a little over 2,000 pitches this year and will have made 6-7 new investments).
  • A major complaint from fund managers is that LPs don’t reply to their emails and let them know how their investment case is progressing. Forward thinking LPs are saying they understand this and work hard to get a quick ‘no’ to funds they aren’t going to back. Entrepreneurs say the same.
  • Like top startups, the top funds have it easy. LPs all want to invest in them, their fundraising processes are short, and they can command good terms.
  • Other funds find it much more difficult, with fundraising taking 15-18 months, which is 5-10x as long as it takes the top funds.
  • LPs are working hard to differentiate themselves so they can get into the best funds.
  • Relationships are important, and they want to invest in managers they trust.
  • LPs are starting to advise find managers on what to put on their investment decks and how to present themselves generally.

Those are the similarities. One of the big differences if that LPs benefit less than VCs when they are innovative and take risks with new funds. That makes it harder to be a startup fund and harder to get traction with new VC models.

The new Nexus5x is a good workhorse

By | Uncategorized | 2 Comments

I got the new Nexus 5x Google phone on Sunday and have been using it for five days now.
I like it.

It’s a bit bigger than my old iPhone 6 and I was worried at first that would be a problem, but I can still use it one handed and it fits in my pocket OK.

Whilst we’re on the negatives the software mostly isn’t as pretty as iOS and I find myself stabbing frustratedly at the screen a little more often than I used to. I think the battery drains a little faster too.

But the swipe-to-type keyboard works much better, and for me that’s a huge bonus. Writing an email of any length was always a pain for me on my iPhone. Non-swipe typing is too slow and the third party swipe keyboards were glitchy and even when they’re working they don’t seem to work as well as on Android.

In contrast the native swipe keyboard works brilliantly on the Nexus 5. So much so that I feel comfortable processing loads of email on the device and writing long notes (including this blog post).

The other good thing about this phone is the finger print sensor on the back. It’s a fast and convenient way to wake up the phone that has been very reliable so far. More so than the finger print sensor on my old iPhone.

Beyond that the apps are much of a muchness. My password app Lastpass auto-fills inside apps on Android, which is nice, but I miss being able to text from my laptop like I could when I had an iPhone.

So I’m happy to be back on Android (although I will have to buy a new watch…) but reading this post back the striking thing is how little there is to choose between the Nexus 5x and the iPhone.

Developments in discovery on mobile

By | Uncategorized | One Comment

In August I wrote posts about the gap between browsing and purchasing on mobile and solutions for closing the gap. The problem is that filling out forms on mobile web sites is too painful for most people and that apps aren’t good for occasional purchases because people forget they have downloaded them.

Two recent developments may be changing the game.

First, announced today, the latest version of Chrome for iOS has a form auto-fill feature which, if implemented well, might get people checking out on mobile much more. Admittedly this feature has been available on Chrome for Android for some time.

The second is deep linking into apps. Spotlight searches will now show results from apps on the device. The picture below is from an investor update our shoe-commerce portfolio company Stylect sent around earlier this week. It shows how a search for Laboutin on Spotlight returns a result from inside the Stylect app. That brings the customer back to the Stylect app without them having to remember to look there.


One of these developments favours the mobile web, whilst the other favours the app economy. That’s the Google vs Apple battle playing out right there.

Frugality is a virtue

By | Uncategorized | 2 Comments

Sam Altman of YC posted a long tweetstorm yesterday on the theme of frugality in startups. In short he thinks it’s a virtue we’re in danger of losing. That’s more true in the US than over here where there’s still less money in the market, but it’s a point worth repeating.


The positives of frugality are that working with the constraint of limited capital forces creativity and sets the culture right for the long term. Investors love companies that have achieved a lot with a little.

The negative of anti-frugality (if that’s a word) is that even with the best of intentions it can quickly lead to premature scaling, which is one of the biggest causes of startup failure. I like to describe premature scaling as growing functions before they are working. The result is that the inevitable mistakes are more costly and slower to fix. The classic version of this mistake is launching in multiple geographies before the first one is working well enough and repeating mistakes simultaneously in more than one place. Another is growing the team quickly when the jobs that need doing are still evolving rapidly.

The challenge, of course, is balancing ambition and a desire for rapid progress with prudence. For every business at every phase there is an optimum speed. The trick is to find the optimum, and not just go all out.

For most businesses that optimum speed should be at least partially independent of the amount of money that can be raised (assuming sufficient capital is available). Doubling the amount of cash in the bank doesn’t mean the company should grow twice as fast. It’s rare that doing twice as much of anything results in twice as much output – doubling marketing spend won’t double sales, doubling the tech team won’t halve development times etc. Rather, growing fast requires experimentation and experiments take time.

I agree that if investors are offering money it generally makes sense to take it rather than risk not being able to raise cash when you need it. The trade off (and there is a trade off for everything) is that it takes extra discipline to remain frugal. Best to go into this trade off with eyes open.

Key tweets from Sam’s tweetstorm below.

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.

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.

When planning and modelling the process is more valuable than the answer

By | Startup general interest, Uncategorized | No Comments

This morning I was reading from the OSF Playbook about how they have built an ‘open source decision making model’ for investing in deep science startups. That’s a worthy endeavour, but what stood out for me is this quote:

we gained the most insight from the process of building the model, not from an absolute output number

There are two interesting things about this.

Firstly, building a model is the much more valuable than using somebody else’s. If the folks at OSF got value from the process not the answer then anyone who plugs in their own assumptions to the model and gets their own answer will be missing out on the most important insights.

Secondly, it’s also true that when startups build financial models they learn more from the process than from the numbers that come out at the end. A model can be tuned to give any answer its author wants and founders often question why investors want to see them. Here we have the answer – investors value the process of creating the model rather than the output number (although seeing the level of ambition in a startup is important).

In more detail, the value in building financial models mostly comes from being explicit about key assumptions. What are gross margins today and how will they evolve? Same for customer acquisition costs, salesforce effectiveness, account management costs and customer service costs. Eyeballing these assumptions gives a detailed understanding of how the business is expected to evolve and where the risk points are.

Tips for productive advisor-entrepreneur conversations – argue intelligently and criticise kindly

By | Startup general interest, Uncategorized | 4 Comments

A couple of days ago I wrote that startup advice should focus on the ‘why’ and the ‘what’. Today I’m going to write more about how to do that.

A common pattern is for advisors to pattern match with something they’ve seen before and come quickly to a piece of advice that feels right to them. That’s great and hugely valuable when it chimes with the entrepreneurs intuition, but when it doesn’t the dialogue can deteriorate to brute force persuasion and sullen acceptance or passive resistance.

Focusing on ‘why’ the advice is appropriate is a big help, as I wrote about last time, but getting into the right frame of mind emotionally and attitudinally is also a big deal:

  • Think of areas of disagreement as opportunities to learn. Don’t avoid difficult conversations for fear of getting advice you don’t wan’t to implement or having your advice ignored.
  • Make it your goal to find the best solution, not to win the debate.
  • Listen first and then debate second. If you can summarise what you’ve heard in words the other side would use, list your points of agreement, and note anything you’ve learned before you go to say your piece.

Not every conversation can end productively, but the hit rate can be increased, and with that comes learning, better insight and ultimately business success.

This post was inspired by a summary of philosopher Daniel Dennett’s thinking about arguing intelligently and criticising kindly.


Using The Path Forward to determine fundraising strategy

By | Forward Partners, Startup general interest, Uncategorized | 2 Comments


As you might have seen we launched The Path Forward last week as a guide for ecommerce and marketplace entrepreneurs in their first year (diagram above). We’ve been using it internally for a while and we’ve noticed that we find it easiest to get excited about startups that are at Step 1: Valid Idea, and Step 3: Valuable Business. When we meet new companies at Step 2: Valued Product, entrepreneurs have made choices and started down a path which inevitably shuts off some opportunities that were there earlier but they haven’t got far enough along to know whether those choices are good.

It turns out we’re not alone. I saw this on Founders Notebook earlier today:

You can only raise money by pitching the “Dream” or by selling “Traction”. So either bootstrap your startup, or raise money in the early “dream” (no code, no plan, just a dream) phase or in the “traction” (the model is working) phase of your business.

The Path Forward is a good tool for understanding what makes a good dream and what qualifies as good traction. To summarise what’s on the site, pitching a “Dream” works best when the need has been proven with customers and a prototype really resonates, whilst pitching traction works best when the business looks set to scale. If you want more detail go to The Path Forward, click on the ‘About the Path Forward’ button and check out the definitions of Step 1: Valid Idea and Step 3: Valuable Business and associated Waypoints. (“Waypoints” is the name we’ve given to the sub-steps you can see in the graphic above.)



Get Social

Blog Newsletter Sign Up

Enter your Email:
Preview | Powered by FeedBlitz