Recent Posts



Google acquires the most, Apple hasn’t bought big (until now)

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Tomasz Tunguz of Redpoint ventures posted this table as part of a long analysis of M&A by leading tech companies over the last 15 years. Here are the takeaways:

  • Google comes out as the most prolific acquirer by far, with almost twice the number of acquisitions per year as Facebook who sit behind them.
  • Most surprising for me was that with the exception of the $3bn acquisition of Beats (which is missing from the analysis above) Apple hasn’t paid more than $390m for a company in the last 15 years. Beats may be a one off, or their acquisition strategy may be changing under Tim Cook. One to watch.
  • Of particular interest to us as an ecommerce investor is that Amazon is the most infrequent acquirer. Other data in the post shows that the bulk of their acquisitions fall in the $100-300m range.


Lost My Name on Dragons’ Den


Ever wondered how much of a difference it makes going on Dragons’ Den?

Our portfolio company Lost My Name found when they pitched their magical children’s book to the Dragons whilst I was away on holiday last week. You can see the relevant section of the show in the YouTube clip below with realtime analytics super-imposed in the corner of the screen. At the start of their pitch they had 36 users on the site and by the end they were up to nearly 13,000, and they sold thousands of extra books. Additionally the longer term benefits of the brand exposure are still to come.

However, none of this comes without risk. It worked out well for Lost My Name who walked away with a £100,000 investment from Piers Linney at the highest valuation ever seen on the show, but that might not have happened. The Dragons might not have liked the company and even if founders Asi and David pitched flawlessly there was a chance that final edit portrayed them badly. We thought long and hard about these risks before deciding to go on the programme. Fortunately it worked out.

If you’re now wondering what it felt like to be there check out David’s story from the inside.


Don’t let post event rationalisations ruin your future decisions

Putting a favourable gloss on events even when it isn’t merited is in many ways a healthy part of human nature. It helps us preserve our self confidence and lets us move on. However, it can lead to a history being mis-remembered and then future decisions get made using bad data. That’s dangerous.

I often see this when good people leave a company. Before long their little faults are remembered as much as their contribution and everyone starts to think it was a good thing that they left. Then replacements are hired without addressing the reasons that the previous person left.

A common example at VC funds is to analyse investment decisions based on how companies fare rather than on whether the analysis behind the decision stands the test of time. This can make good investment decisions look bad when companies have either unlucky or lucky runs and undermine future investment decisions.

Another example is when good candidates don’t accept job offers. Pretty quickly people decide they wouldn’t have been good after all and that the company has ‘dodged a bullet’. Often without questioning whether that means they made a mistake offering the job in the first place, or whether there is something wrong with the role or package. That’s what’s on my mind today.

The challenge is the dissonance between what helps us function well as human beings and what helps a company to perform well. Eliminating falsely positive post event rationalisations and maintaining a positive and happy company culture is what we should all strive for, but requires over-riding human nature and isn’t easy. Going all in to eliminate any favourable gloss can hurt morale and be as damaging as sitting back and allowing it to happen. As with many aspects of corporate culture the key is to know where you are trying to get to, where you are today, and then be realistic about how quickly you can move. In this case holding regular post event ‘retrospectives’ and documenting the good and the bad is a good practice, maybe starting in the area that’s core to your business and then spreading to the rest of operations once the process is honed.

Her – a movie about artificial intelligence


Last night Fiona and I watched Her, a kind and sensitive film about love between a human and an artificial intelligence. I’ve embedded the trailer above in case you want to take a look.

It’s a great film on two levels. Firstly as a modern era human love story and secondly for the way it shows what artificial intelligence will bring to society. Her shows how powerful artificial intelligences will be, the range of emotions they will have and how they will evolve and explores issues of mutual dependency. All of this is played out without the usual ‘machines vs humans’ narrative which allows for a more nuanced investigation of the issues. It’s powerful stuff. I’d love to say more, but won’t for fear of ruining the film.

We will most likely have a $1,000 computer with the power of a human brain before the end of the next decade so the stuff of science fiction could be with us very soon. It’s impossible at this stage to say how it will play out, but I’m excited to see it. Will the machines have personalities? Will they have soul’s? Will they treat us well?

For better or worse we will have answers to all these questions inside the next twenty years or so.

Making it easier to buy stuff online will drive growth

Kieran O’Neill, founder of our portfolio company Thread likes to quote Paul Graham saying ‘if you make something easier for people to do, they will do more of it’. At Thread Kieran is making it easier to buy fashion and as a result the majority of his customers report that they spend more on clothes after becoming Thread customers than they did before. Amazon’s ‘One click purchase’ is another great example of a service that gets people to buy more by making it easier.

Yesterday Twitter and Facebook made separate but similar announcments that customers will be able to buy stuff directly from Tweets and their Facebook newsfeeds. Here’s how Facebook described their ‘Buy button’:

With this feature, people on desktop or mobile can click the “Buy” call-to-action button on ads and Page posts to purchase a product directly from a business, without leaving Facebook.

The purchase will be made using credit card and presumably shipping address data stored by Facebook. It sounds like it could be as easy as buying something on Amazon.

Twitter’s announcement was that they have acquired a company called Cardspring which has payment technologies, and they have outlined how merchants will be able to interact more with customers within Tweets, although they have stopped short of announcing a ‘Buy button’ of their own. I suspect it’s just a matter of time before they do though.

All of this is similar to a ‘buy in the page’ service offered to media companies by Lyst that allows people to buy items they are reading about without clicking to a different site.  (Lyst was one of my portfolio companies when I was at DFJ.)

For me these services which take a step or two out of the process of buying stuff online represent an important evolution. Ecommerce is slated for massive growth and making it easier to buy will be one of the drivers.

Startups: make your sites responsive

Google has upped the intelligence of it’s mobile search and now indicates when sites won’t render well on a mobile device. It’s a short step from there to not putting those sites in the top search results. This comes in the year when Google expects mobile search volume to pass desktop search volume, and makes it clear to me – responsive design is the only option for startups now. That can be difficult when resources are tight but without responsive design half of search queries won’t find you. The result: your V1 website is much less likely to get the traffic you need and you will have a hard time knowing whether your idea is working.

I’m sure that many of you have been building responsive sites for some time, but we have now reached the point where for the vast majority of startups there is no sensible alternative – and that includes B2B startups.

$1bn invested in UK startups in last six months

In June I shared some CBInsights data on investment into London startups through Q1 under the headline London: A startup ecosystem in the making. This week TechCrunch published Crunchbase data for the whole of the UK showing a similarly strong picture.

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Success begets success in the startup world and these investment figures wouldn’t be happening if it weren’t for the success that has been enjoyed by companies like Just Eat,, and Zoopla. That’s not the whole story though, because confidence also breeds success. That’s why it’s important we keep shouting about the things that are going well.

I’m pleased to say that the last week has seen Google Ventures arrive in the UK and Seedcamp announce their new fund. They will help keep the investment rate growing.

How 20 customer interviews enriched Lexoo’s strategy

We recently invested in Lexoo, a marketplace connecting SMEs with legal services. We were attracted to the opportunity because there are an increasing number of freelance lawyers who are doing equivalent quality work for startups at 20-30% of the cost of working with a big law firm. The founder, Daniel van Binsbergen, is an impressive individual so we backed him to build a marketplace to help SMEs and freelance lawyers find each other. You could think of it as like Elance or oDesk for the legal sector.

Lexoo is one of our very early stage deals, and as was the case with our other early seed deals SnapTrip and Parcelbright the CEO worked with our Product Partner Dharmesh to conduct a structured set of customer interviews. Taking inspiration from Rob Fitzpatrick’s The Mom Test we are careful to ask questions that reveal customers’ true feelings and motivations and avoid vanity conversations.

And the findings were remarkable.

It turns out that the price of legal services is important to SMEs, but that there are some bigger issues at play. Most people hate buying legal services because they don’t know what they need, don’t really know what questions to ask, and are afraid that if they make a mistake it will cost them big time down the road. Moreover, recommendations from friends don’t work very well because most people aren’t sure whether their friends really know a good lawyer from a bad one and because it’s hard to ask difficult questions or negotiate with a lawyer that’s been introduced by a friend.

These findings have transformed Lexoo’s strategy. The plan had been to be efficient at matching SMEs and lawyers and build some workflow into the platform to make it sticky – e.g. for invoicing. Now we will build education into the platform so SMEs can be smart in their procurement of legal services and get over the difficulties described above. Daniel likes to give the following example:

SMEs use lawyers a lot to review employment contracts, but the cost of doing so can vary from £300 to £1,400 depending on the complexity of the situation (options, founder status, restrictive covenants etc.). On Lexoo we will build functionality so our customers can work out where on the range they should position themselves and understand the questions they should ask. And then we will connect them with a range of suitable lawyers.

Lexoo will now be adding much more value to it’s customers. That’s exciting!

Finally – some of you who read this blog helped out with the customer interviews. Thank you!

Bitcoin: things only grow this fast when something important is happening

Coindesk just published their quarterly ‘State of Bitcoin‘ presentation. This slide stood out for me:

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Looking at the massive year on year increases in most of these metrics I’m reminded of some wise words from Jeff Bezos. In around 2002 I was stuck in my hotel room in Egypt due to food poisoning and the only English TV available was an American business channel. I forget which it was. In fact the only thing I can remember from 48 hours of television is an interview with Jeff Bezos. When asked why he founded Amazon he said that he was working on Wall Street in the early 1990s when someone showed him how fast the internet was growing he knew that something very important was happening. Otherwise you just don’t get growth like that.

You can see from the chart below that the number of internet hosts grew 10x from 1989 to 1993 – that’s roughly 2x a year. Bezos founded Amazon in 1994, so this was the data he was looking at. You can see from the table above that Bitcoin adoption is growing faster than that – 3x to 685x depending on which measure you choose. As with the internet back then major use cases are still unclear, but as with the internet they will come.


Great slides showing the potential in ecommerce

Business Insider has just published a great deck showing the potential in ecommerce. We’re focused on the ecommerce ecosystem, so I guess I would say this anyway, but the opportunity is truly exciting. TL;DR ecommerce is a juggernaut already, still growing fast and with miles to go. Billions of dollars of retail are coming online for the first time each year and will do for some time to come.

These are my two favourite slides:

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Sad as they are for the companies involved and the high street generally these store closures suggest very fast movement from offline to online in specific sectors. Our challenge as investors and entrepreneurs is to find the sectors where this will happen next.