Dec
23
13



A Look Back at 2013



Launched just 18 months ago by sister-brother duo Adora and Aaron Cheung, Homejoy has quickly emerged as the leader in the on-demand home services market. Read why we invested.


A few months ago, Redpoint backed the CyanogenMod team on their Series A, and Scott Raney explains why we supported their Series B this month.


Founded only a year ago, DraftKings is a leader in the emerging space of real-time fantasy sports, awarding over $50 million in prizes this year in its first full year of operations. Read why we made the investment.



Partner Chris Moore and the Redpoint team were thrilled we had the opportunity to invest in Refresh’s vision for digital dossiers for the people you meet. Check out Chris’ blog on why we backed Refresh.
Check out some of our favorite partner posts and interviews from this year.

Geoff identifies You Tube’s “Bay of Pigs” Moment.
Satish gives his best advice for startups in the WSJ.
Ryan featured on Bloomberg West & talks about becoming a VC.
Chris Moore discussing adtech investing on TechCrunch Ask A VC.
Tomasz explains how much it costs to take a startup public.
Scott discusses trends in Android, Big Data & more.

  • Docker
  • Tapingo
  • Oculus
  • Snapchat
  • Nextdoor
  • Coinbase
Quarterly Workshops for our network to learn from one another: Next up Content Marketing with Scripted & Marketing. After that stay tuned for workshops about everything from building great apps to hiring engineers.
Upcoming Series on Big Data’s Next Iterations
from Scott Raney and John Walecka.
Partners at CES, SXSW
drop us a line – we’d love to see you there.
Dinners with Founders & leading voices in the Valley kicking off in January.

Dec
5
13



Backing Homejoy – the “Get Help” Button for Your Home

 

We’re pleased to announce our investment in Homejoy.  Launched just 18 months ago by sister-brother duo Adora and Aaron Cheung, Homejoy has quickly emerged as the leader in the on-demand home services market.

Initially focused on home cleaning, Homejoy delivers to consumers a hassle-free, quality cleaning service at a fraction of the cost typically seen with traditional maid services. As they grow, Homejoy has the opportunity to become the go-to company for a multitude of services associated with the home Homejoy is a perfect example of a company that has significantly reduced the friction associated with a traditional consumer service by wrapping together provider sourcing, credentials assessment, price negotiation, availability/scheduling, service delivery, payment, and customer service all into a single experience.

We believe that Homejoy is part of a broader trend to on-demand consumer services.  By integrating mobile and web technologies, consumers can get fast and efficient services with a touch of a button from vendors with whom they have a trusted relationship.  Over the years, the consumer services landscape has been shifting from pure listings models (v1.0), to listing + review marketplaces (v2.0), and now to on-demand, branded consumer services delivered directly to the end consumer (v3.0).  Companies like Homejoy will build sustainable brands and customer relationships that can be extended over time to related services.

With presence in over 30 markets, Homejoy is well on its way to transforming the $400B home services market.  We believe in Homejoy’s mission of happy homes and vision of becoming the ‘get-help’ button for your home. We look forward to supporting the team in its global expansion.

Geoff and Pueo

 

 


Nov
6
13



Twitter Is No Leap of Faith

From Wall Street to Silicon Valley, it’s hard not to hear chatter about Twitter, the most highly anticipated initial public offering since Facebook.

Skeptics abound, questioning the company’s fundamental metrics. Where are the profits? What will the price-to-earnings ratio be? What has this company done so far that could possible justify a projected valuation of $16.5 billion? And, understandably, could Twitter’s offering be a rerun of Facebook’s, a financing blooper that will long be remembered as the Rodney Dangerfield of IPOs?

These would all be reasonable posits if Twitter was just another run-of-the-mill company. But it is not. Twitter is a very rare commodity. For investors, this little tweeting upstart, with its 232 million active users who share thoughts and ideas in just 140 characters at a time, is one of the pure bets on the future of the Internet. More than that, it is a bet on the handful of core platforms that reach, connect and engage billions of people across the globe.

Looking around, fewer than 10 public companies in the world fit that bill and are therefore reliable indicators for anyone mulling Twitter’s valuation prospects. They are Google, Tencent, Alibaba, Baidu, Amazon, Facebook, LinkedIn, eBay and Apple.

These are the primary platforms on which the public depends for Internet and mobile use. The mean market cap for these companies: $160 billion. The median market cap: $100 billion.

You can see where this is going. If Twitter has the potential to be the next Google or Amazon or Tencent, what would you pay for that option value?

The naysayers will argue that the same case could have been made for Facebook when it went public in 2012, only to see its stock price sag 52 percent from its offering price over the subsequent three months. They are right, of course. But the difference now is that Twitter has learned from Facebook’s missteps, and is determined not to repeat them.

For instance, Facebook arguably waited too long to go public because it was already a really big company, thereby making it difficult to predict substantial growth in its future. By contrast, Twitter is still relatively close to the start of its formidable growth curve. Whereas Facebook flooded the market with available shares, driving down demand on its opening day, Twitter is keeping the size of its offering small. And, while Facebook priced its IPO for maximum value, Twitter is keeping its valuation in the modest range, hoping to see a pop in share price when it finally opens for trading.

To be fair, it needs to be said that Facebook’s stock has flourished since its anemic debut. The company’s share price is up 87 percent since the first of the year, and 31 percent above its IPO price. Moreover, Facebook is among the Top 4 best-performing large-cap technology stocks in the U.S. so far this year, according to Morningstar research.

Facebook’s stock surge bodes well for those underwhelmed by Twitter’s current revenue sources or nonexistent profit. History tells us that when any new platform emerges, it takes some time to figure out how best to make money in ways that are endemic to that platform.

Think LinkedIn. Think Amazon. Neither company was profitable when it went public, but I bet you wish you’d have had a piece of them then.

For those who still aren’t convinced, let’s throw in one more bit of information. Twitter’s revenue over the next 12 months is expected to surge some 85 percent, from $535 million to $990 million. When Facebook went public, its projected 12-month revenue growth was a comparatively paltry 36 percent.

Bottom line: Twitter’s growth prospects today dwarf those of Facebook at the time of its IPO.

Twitter simply is not the leap of faith many would have you believe. If you are a portfolio manager with holdings in technology, you need to be betting on the future of the Internet and mobile. If you are betting on the Internet and mobile, you need to own the platforms. If you own Google, Facebook, and Amazon, then you will need to own Twitter, too.

You don’t need 140 characters to understand that.

*Originally posted in AllThingsD, here

Full disclosure: Though not a direct investor in Twitter, Redpoint does own stock in the company thanks to two acquisitions, Bluefin Labs and Posterous.


Oct
1
13



Reinvention at Redpoint

Welcome to Ryan Sarver and Jamie Davidson, and Congrats to Tomasz Tunguz

Today, we’re welcoming two new partners and a senior associate to the Redpoint team. We’re thrilled to promote Tomasz Tunguz to Partner and are excited to bring Ryan Sarver on board as a Partner. Lastly, we’re welcoming Jamie Davidson to the team as a Senior Associate. All three have an invaluable mix of experience in the most important emerging trends in the consumer Internet, and are part of our continued work to evolve to meet the demands of a changed investing landscape.

Since we founded Redpoint in 1999, we have been focused on supporting exceptional founders with industry defining visions. Fourteen years, 375 investments and 120 IPOs & M&As later our approach on zeroing in on the industry’s boldest and brightest founders and supporting them as a team has stayed constant. It’s paid off – companies that defined markets like Netflix, HomeAway, Heroku, Fortinet and Juniper are all part of our history. And we’re proud to back some of the market’s most promising and innovative teams at companies including Sonos, Twilio, Stripe, Infer and Curious today.

Over the past few years, the business we’re in has changed. The markets have become broader, successful founders are discovered in new and unexpected places (and are often first timers), and the pace of innovation is faster than ever. All of this means the old way we invested, with a small, proven team applying decades of experience and a tight-knit network isn’t all it takes to discover the next set of revolutionary companies. We need more coverage, more direct experience with the latest trends and more perspectives.

This is the reason that as we continue investing with our latest early stage fund, Redpoint V, it’s come time for us to grow our Partner team again. By combining our established Partners — who have done hundreds of deals and learned the lessons only decades of experience can provide — with a new set of Partners that bring direct experience at some of the industry’s most influential technology trends today, we can bring startup founders a unique mix of investment insights with an understanding of what it takes to go from bold startup to successful exit.

Our new partners

We apply the same diligence to bringing new members on board that we do in reviewing potential investments – and we’re confident that Ryan and Tomasz will be successful new members of our team. Ryan joins us after running Twitter’s platform and Tomasz has been a Principal at Redpoint for three years – proving himself as an advisor to recent investments like Looker, ERPLY, Electric Imp and Axial Market. Both Ryan and Tomasz will bolster Redpoint’s work to identify and support standout founders and startups working in the rapidly evolving landscape of mobile services and social platforms. In addition to Tomasz and Ryan, we’re also bringing Jamie Davidson (formerly VP Product at Hotel Tonight) on board as a Senior Associate.

Tomasz, Ryan and Jamie will focus on investments along the following categories:

* Sarver: social applications and platforms, SaaS

* Tunguz: marketplaces, SaaS, analytics

* Davidson: mobile-first applications

As we continue to grow and evolve Redpoint, we’re looking forward to supporting the next generation of founders and are excited to promote Tomasz and welcome Ryan and Jamie to the team.


Aug
2
13



CEO Playbook for Early Stage Board Meetings

Generally, board meetings of early stage companies tend to resemble staff meetings. There are too many people in the room (try someone from every function?) and much of the discussion is around operational issues — from signing a new lease to branding and logo discussions.

Sure, many companies have limited staff during the first year, and I’d say they have a free pass for the first 6-7 months, max. After this period, critical mass is established and it’s time for the CEO and the company to evolve. Board meetings shouldn’t be operational, rather they should focus on the overall strategic direction of the company.

Seems obvious, right? While every founder and CEO of an early stage company starts with the best intentions of moving forward, sometimes they get into the early stage company slump and never evolve the meetings they way they should.

Let’s start with the functions the board serves: corporate governance, strategic counsel to the CEO, an outside perspective on strategy and direction, and responsibility for the hiring and firing of the CEO.

When you have the board’s attention, it’s important to keep the meetings focused and strategic.

Here’s my playbook for early stage board meetings:

Frequency of Meetings

For the first year or two, board meetings should be once per month. After this initial phase, they should occur every six weeks, and eventually work towards 5-6 meetings per year.

Length of Meetings

Meetings should be a minimum of 2 hours and a maximum of 3 hours. If you need more time, it’s best to check in with board members separately before the meeting, or have a pre-meeting the day before.  In my experience, people can’t concentrate more than 3 hours.

Board Size

I like a minimum of three people and a maximum of five. Two is too few, while three is only getting to critical mass. When the number climbs above five, the meeting looses its effectiveness. Additionally, there should be no more than two from the company present at the meeting; otherwise can turn into a staff meeting (which is a waste of everyone’s time). 

Meeting Flow

  • The CEO should begin with a closed session to preview the meeting and key issues with the board.
  • Review of key performance indicators that define the health of the business.
  • General review of the various aspects of the business focusing on the most important (typically sales, development, strategic partnerships).
  • Deep dive on one particular functional area or issue (e.g. competition, marketing and positioning, operations, etc.)
  • Financial review
  • Closed session to discuss board business or meeting review with the CEO. At this point the CEO should review what the 3-4 key issues facing the business are (i.e. what keeps him/her up at night). This is also a good time for the CEO to review the upcoming period and goals until the next board meeting.
  • Finally, a private session for the outside directors to discuss any outstanding issues and decide upon what feedback they should provide the CEO. A spokesperson should be chosen to deliver the feedback following the closed meeting.

You might be wondering, how am I really supposed to cover everything I need? How am I supposed to share everything that is happening in the business? Well, you’re not. The board and these meetings should be viewed as a resource for you, the CEO. These meetings will provide valuable insight from outsiders and will help drive the strategic direction of the company, not the day-to-day decisions that must be made.

If you do need more time, it’s not only appropriate but it’s encouraged that you check in with your board outside of the meeting to give them a heads up on what will be covered or topics of concern.

Remember, the board is there to help you and by focusing on the strategic direction of the company, you’ll only help yourself.

 

*Follow Geoff and view this post on LinkedIn here.


May
23
13



Class of 2013: Write Your Eulogy, Then Live the Life You Want

There’s always so much encouragement for graduating classes. “You are the generation.” “You will change the world.” I’m sure you are and you will, but how? How will you make a difference? I’m not going to tell you how to change the world; that’s up to you.

What I am going to give you is my advice on what will help guide you to make that difference. In my 30-year post-grad career, these are the words of wisdom that helped guide me—both personally and professionally:

Life is short. As you embark on the rest of your life, consider what you want it to be like and what you want to accomplish. Pretend for a moment that rather than graduating, starting your career, and moving on toward the rest of your life, you are at the end of it. How would people remember you, as both a person and a professional? Write your eulogy now. Think about how you want to be remembered by your family, friends, and colleagues. Let this shape you.

Do something you’d do even if you didn’t get paid to do it. If you don’t, then life will end up a chore. My dad was a chemical engineer who designed large-scale process plants. I remember seeing him get up every morning and go to work, and I don’t think he passionately loved what he did. He did it because he felt it was his responsibility. Life will be more fulfilling if you do what you love.

When I was finishing my MBA, the highest paid jobs were in investment banking and consulting. They were also the jobs with the highest prestige because they tended to attract the best and the brightest. Because of this, they were alluring for many graduates—when you have been out of the job market for a couple of years racking up student loans, working for a top-tier company with a solid paycheck made sense. I knew that neither of these routes was right for me. My choice to go a different direction ended up serving me well in the long run. I’m lucky enough to have found something I love doing. Not to say that it’s not work and it’s not tiring. It is. However, I constantly think about how lucky I am to do what I do—and get paid to do it.

It’s OK to be impatient, but don’t rush things. There’s a fine line between chasing your dreams and not being willing to lay a long-term foundation for success. When I finished graduate school, I saw a few people in my class who wanted a shortcut to success. They suffered from the “get rich quick” syndrome. Early on, they took risky bets with second-rate companies in hopes of accelerating success. With very few exceptions, that strategy did not work. Unfortunately, when they wanted to return to the mainstream, they didn’t have the foundation of success upon which to build.

Take risks with smart people. It’s fine to take calculated risks with your career, but when you do, make sure you understand the risks along with the reward. Make sure you take risks with the best people you can find. It will make all the difference in the end. If you want to start a company, recognize the risks you’re taking and do a gut check about how much you believe in what you’re doing. If you passionately believe in it, then do it with your eyes wide open and surround yourself with the smartest people you can find.

There is always next year, but at some point you start running out of next years. As you move forward in your career and in life, you’ll find yourself putting things off until next year. But there are only so many next years in your life. I’ve generally never passed off an opportunity to have a great life experience—be it travel, learning how to fly or play piano, or taking courses that weren’t directly relevant to the path I was on. The more you can do to round out your life outside of work, the more fulfilled you will feel in the end.

Don’t be one-dimensional. Life is more than your career. Life is about being a responsible, interesting person, and in my opinion, one of the greatest gifts in life is having close friends. As you move forward on your journey, you’ll find good friends are few and far between. I am fond of saying that I don’t need more friends, I just need more time to spend with the friends I already have.

Best of luck in your journey—and don’t forget: The journey is its own reward.

 Photo: Blue~Canoe/Flickr

Apr
5
13



So You Want to Start A Company? Here’s 9 Attributes You’ll Need

Successful founders – the ones that eventually become serial entrepreneurs – are a breed of their own. After almost 28 years of meeting, partnering with, and coaching some of the most amazing founders of today, I’ve discovered a pattern of several significant attributes that lead to success.

There are no ordinary founders, they are all extraordinary in some way, and the most successful founders are usually exceedingly extraordinary. Whether it’s their personal story about how they got to where they are (child prodigy, perhaps? Or a unique personality that overcame the odds?), or their unequivocal passion to change something for the better – there are unmistakable qualities that define the founders I am more inclined to back.

If you have an idea and want to start a company – you’re one step ahead of the pack. To get even further, I’d suggest applying these 9 key attributes into your founder’s toolbox.

1. Have a positive motivation

You’d be surprised the number of people who come to me and say, I want to start a company — without an idea for a company. This isn’t enough. The most successful founders have a driving passion and are compelled to change the world. Time and time again I’ve found the serial entrepreneurs are the ones who have this desire to change the world and have a clear vision on how to do it. The motivation cannot simply be a desire for the prestige of starting a company or the success. This is the foundation for a horrible company culture that will never survive. It has to be about having the vision, the passion, and the belief that they will change the world. I promise you, if you build a great company, the rewards will follow.

If you don’t have an idea or a passion – then my advice is to go work with someone else for a while. Learn about how to steer an engineering team, how to motivate and manage people, or how to spec a project on from concept to launch. The ability to do this on someone else’s dime is an incredible luxury. It’s also an opportunity to expand your network (which you’ll need when you eventually start that company).

2. See patterns where others see chaos

Part of my job as a venture capitalist is to identify patterns before they become clear. I try to see what’s happening on a macro level and identify the right themes in which to invest. The best entrepreneurs are the ones who come in and not only see but also articulate the patterns in the market when around them is chaos. Opportunities arise out of emerging patterns before others can see them. If the path were clear, everyone would do it. Chaos is a good thing. In the midst of confusion, great entrepreneurs see the future as clear as day and they feel compelled to realize that future. They’re the ones who come in and complete the sentence, “Imagine a
world where…”

3. Contagiously believe

In the beginning, there really isn’t anything but the idea. All founders have is their belief that their idea is right. They can’t have any doubt, because if they do, people won’t follow them. If there is one inch of doubt in your mind, you won’t be successful at assembling a team of people to jump on board with you – from investors, to rock star individuals that likely already have a better paying job. You have to show them that without a doubt, this company and this team will be a success.

This is a big hurdle to overcome, and it only comes with having a passion and clearly understanding the pattern (vs. getting lost in the chaos). You need to convince people that what they’re doing isn’t nearly as exciting as what you’re doing. You have to have to clearly articulate your vision like an evangelist. You have to will the company into existence.

If someone comes in to meet with me and says, “I’m not sure I’m gonna do this. Are you interested in it?” (Which, believe it or not, happens), I know it won’t work. I have to get infected by their passion. I have to want to be on their team.

4. Sweat the details

All too often people will say, “How do I do market analysis on a market that doesn’t really exist?” In my opinion, when you’re putting your time, energy, and reputation into starting a company, arguably you’re making as large an investment if not more, than I am. You owe it to yourself to do your homework. You need to find out what the competition doing, how big the market is, what the 20 obstacles that you must overcome for success are, and, of course, why you will succeed. It’s important to put together the whole landscape of what you’re counting on for this to be a successful venture.

If you don’t do that, you’re cutting yourself short. I mention this because it’s kind of amazing to me when I meet entrepreneurs and they really haven’t done any homework on how big the market size is. Or, you ask them about what is this person doing, or what is this company doing, or have they heard of this or heard of that, and they say, “No, I haven’t really done any of that research.”

5. Lead by example

Not all entrepreneurs make great leaders. The ones who clearly articulate a strategy and a purpose are the ones who generally surface as long-term leaders. Great leaders and leadership happens by example. If you take off for a three-hour lunch or leave everyday at 3:00pm to hit the gym while your team toils away through all hours of the night, you’re not setting a good example and it’s a short-term recipe for disaster. If your team sees you working just as hard or even harder than they are, they’ll be more willing to put in the long hours and support you on your journey.

6. Never compromise on the team

As the saying goes, there’s no “I” in team. You’ll also note there’s also no “I” in founder or entrepreneur. However, the most successful founders recognize that they win when the team wins. I can’t stress how important it is to be able to understand that you win as a team and are productive as a team.

Hire great people, give them the responsibility to succeed, and recognize them when they do. Don’t compromise on people. Great people want to work with other great people. If you want a mediocre company, just hire a few mediocre people and step back and watch it dwindle out. Great companies come from great people and great teams. It seems obvious, but I’m amazed how often CEO’s don’t act on marginal performers. They can become a cancer to an otherwise healthy company.

7. Solicit advice and be decisive

The most successful founders are the ones who ask for advice on key decisions and come back with their own, well-reasoned decision. The ones who end up being less successful are the ones who either ask for advice and do as they’re “told,” or on the flip side, are the ones who don’t ask for any advice at all. A great CEO will solicit opinions from differing points of view, process the information and make a decision. The key, ultimately, is to make clear, timely decisions with as much relevant information as possible. It’s important to also understand that not making a decision is in itself making a decision. You won’t always be right, but being decisive
is important. When you’re wrong, fix your mistake as quickly as possible and move on.

8. Commit to the vision

I’ve seen some amazing results that have carried the culture of a company simply from founders and CEOs committing to the vision. John MacFarlane, the CEO and founder of Sonos (one of our portfolio companies) has a vision of filling every room in the house with music. He is passionate about wanting people to rediscover the joy of music.

John is incredibly committed to the vision and is willing to do whatever it takes to fill the Sonos customer value proposition. He’s able to hire some of the best people around the world purely based on his commitment to the vision. Despite having been extremely successful as a company, it all happened because John is determined, focused on the vision and leads by example.

9. Never ever, ever give up

There are so many reasons why a start up company should fail. Larger companies have the resources, the people and the money to survive. The reason why start-ups do succeed is because someone has a nugget of an idea, a passion to make it work, and the people who are dedicated to the vision, as well as dedicated to adjusting along the way to make it work. It’s rare that a company we invest in turns out exactly the way the original business plan envisioned.

The most successful founders are the ones who, when up against a wall, will stay up all night trying to figure out how to get through it, and when they wake up in the morning they’ve scaled the wall and figured out the solution.

Exceptional founders are those who go on to become serial entrepreneurs. They are able to do so because these essential attributes afford them the skills and practice to be successful for the long haul. They are the visionaries, evangelists, innovators, leaders and team players that make tomorrow better.

*Originally posted by Geoff Yang on The Next Web, here.


Mar
4
13



Redpoint Invests in Tastemade

Today we are excited to announce our investment in Tastemade.  When we first met the founders of Tastemade, they had left Demand Media as founders to pursue their dream of building a modern media company built on content native to todays social platforms, innovative technology and a disruptive content creation platform.  They believed that by initially targeting a new content network built for the Internet around food and food lifestyle, they could create what traditional networks like Food Network, Cooking Channel, or Travel Channel did – with one difference: building it for a connected, broadband world.

We believe Tastemade represents the best of the new breed of Internet video networks, and will deliver exceptional content and services to consumers worldwide.  In the short 6 months they have been in business, Tastemade has 100 channel partners, 9 million monthly viewers, and 1300 hours of compelling content.  And that’s just the beginning.

Congratulations to Larry Fitzgibbon, Joe Perez, Steven Kydd, and the entire Tastemade team on your coming out party.  I can’t wait to see what the future brings.


Feb
6
13



Congratulations to Bluefin Labs – acquired by Twitter

Today, our Redpoint portfolio company, Bluefin Labs, is announcing its merger with Twitter.  When we invested in Bluefin about two and a half years ago, we bought into the vision of matching and measuring social response to TV viewing; and deriving insights into engagement and reactions to ads and programs.  A spinout out of the MIT Media Lab, Bluefin uses heavy data science to gain never before available understandings to reactions to TV by matching millions of people’s social postings, such as tweets, to actual programs and ads.  By doing so, Bluefin is able to create the world’s largest and first ad hoc, real time focus group.   This information can then be measured and mined for deep insights that can help brands, agencies, and TV networks make actionable, and valuable decisions.

The combination of social and big data coupled with the largest audience and advertising market (ie TV) was what we got excited about, particularly in combination with the rapidly evolving entertainment industry. This is a space we have been excited about for years, from early investments in Netflix and Tivo to more recent investments in Fanhattan, Machinima and Sonos.

Bluefin was a classic start-up story.  Founded by an MIT professor, Deb Roy, and his principal PhD researcher, Michael Fleischman; Bluefin started in a small space in Cambridge, MA.  Later, JP Maheu joined as CEO as Bluefin began to transition from a science and development project to revenue producing business scaling to multiple large accounts.  Today, Bluefin has an excellent professional management team anchored by Jeremy Rishel, Tom Thai, and Anjli Midha.

I will miss working with Bluefin so closely, but am confident that this partnership with Twitter will change the landscape of understanding TV viewership and interaction.  I can’t wait to see what the future holds.  Thanks for letting me be part of the journey.