My prime essays/tweetstorms in 2019 on product/market match, investing, KPIs, YouTubers, and extra at andrewchen

My top essays/tweetstorms in 2019 on product/market fit, investing, KPIs, YouTubers, and more at andrewchen

Dear readers,

I’ve solely been writing sporadically just lately on right here — largely as a result of I’m engaged on a brand new e-book challenge (extra to return quickly on that!!) which has been taking all my time. In the interim, I’ve stayed fairly lively on Twitter, writing tweetstorms that generally flip themselves into essays on right here.

For a fast abstract of the essays that did make it onto right here, together with a pair visitor collaborations, right here’s a simple set of hyperlinks:

  • The Passion Economy (visitor essay by Li Jin, a16z). How the work of the long run will come from new instruments, new media codecs, and new monetization codecs — and the way the Passion Economy is completely different than the Gig Economy. Complementary, however completely different.
  • 10 classes from a serial entrepreneur – Justin Kan, Atrium, YC, and Twitch. I interview Justin Kan, co-founder of Justin.television which was Twitch a few years later. Fascinating dialogue about what it’s like for a serial entrepreneur to boost cash, function a startup, classes realized, and many others.
  • 28 methods to develop provide in a market (visitor essay by Lenny Rachitsky, ex-Airbnb) I’ve been brainstorming and speaking to Lenny, who frolicked at Airbnb doing a lot of the identical type of work that I did at Uber. He put collectively this excellent piece on rising provide
  • Why startups are onerous – the mathematics of enterprise capital tells the story. My associate at a16z, Scott Kupor, wrote a e-book just lately and I excerpted it right here, and talked a bit about why startups are a tough trade, wanting on the numbers. Tldr; half of startups fail, and a small portion – 6% – make all the cash.
  • The podcast ecosystem in 2019. A very detailed 68 web page evaluation of the podcast market. Yes, that is the kind of trade deep dives we generate at work! It’s tremendous enjoyable. Really fascinating report when you’re all for podcasting/audio and the rising trade round it
  • The dumb thought paradox. Why a number of the greatest concepts begin their life by sounding dumb. Started as a tweetstorm.
  • What do you search for an funding? How lengthy ought to a founder be with out wage? And different Q&A. I did a Q&A on Quora about investing, development channels, metrics, and life as a startup CEO — it was enjoyable, and a number of the solutions ended up getting 1,000,000 views!

OK, and now for the tweetstorms. Here are all of the tweetstorms I’ve written within the final yr or so, multi functional place. Hope you take pleasure in!

Thanks,
Andrew
Lower Pac, San Francisco, CA

1. American children wish to be youtubers, and the Chinese children wish to be astronauts.

More from the article right here.

2. Is your startup thought already taken? And why we love X for Y startups

I turned this from a tweetstorm right into a for much longer dialogue, and wished to share it there! Here’s the hyperlink.

3. Cameras versus smartphones.

The iPhone comes out in 2007 and modifications the digital camera trade. Amazing to see a 90% decline in simply 10 years after development for many years

Amazing that one thing can go from peak to trough in actual 10

Makes you ask- What’s the following product the place this can occur?

4. 2019 state of tech investing:

Pre-seed- Bet on the entrepreneur 👨‍💻
Seed- Bet on the staff 👨‍👩‍👦‍👦
Series A- Bet on the traction 🏒
Series B- Bet on the income 💸
Series C- Bet on the unit economics 💰

5. Did you realize: 61% of all meals supply is pizza 🍕.

The common American eats 23 kilos of pizza per yr. 93% of usa citizens eat pizza each month. Omg proper?

6. Dashboard muddle

Dashboard muddle – the addition of extra KPIs over time – results in technique muddle.

The extra you add, the much less you (and your staff!) understands your online business. Then individuals return to creating selections on instinct not knowledge.

Via this 😂 comedian by @tomfishburne under!

7. Fascinating infographic: Top grossing media franchises of all time.

Pokémon, Hello Kitty, Mickey Mouse, Star Wars, and many others

Observations:
– many of the cash has been made in merchandise and video video games
– so many Japanese manufacturers! 5 out of the highest 10
– many created previously decade

8. The web tradition provide chain

The web tradition provide chain works like this:
Asia ➡️ US teenagers ➡️ Adults ➡️ B2B.

Multiple knowledge factors on this already: Emojis, video streaming, esports…

Emojis are a traditional instance. First it was massive in Japan, then teenagers. Now all of us use it. Then it was baked into Slack and the whole lot else. (Btw, that is an incredible learn of pre-smart telephone Japanese cellular: https://en.wikipedia.org/wiki/Japanese_mobile_phone_culture …)

Want to know what B2B communication/collaboration will appear like in 5 years? It’s inevitable that livestreaming, digital items, asynch video, and many others all ultimately find yourself within the enterprise. There’s a 3-5 yr lag, nevertheless it undoubtedly occurs

TikTok is a superb instance that’s mid-phase. Crossing from Asia into US teenagers, and we’ll see if it’ll be the best way we do standing updates at work in a number of years 🙂

9. Magic metrics indicating a startup most likely has product/market match

1) cohort retention curves that flatten (stickiness)
2) actives/reg > 25% (validates TAM)
3) energy consumer curve exhibiting a smile — with an enormous focus of engaged customers (you develop out from this sturdy core)

3) viral issue >0.5 (sufficient to amplify different channels)
4) dau/mau > 50% (it’s a part of a day by day behavior)
5) market-by-market (or logo-by-logo, if SaaS) comparability the place denser/older networks have larger engagement over time (community results)

6) D1/D7/D30 that exceeds 60/30/15 (day by day frequency)
7) income or exercise growth on a *per consumer* foundation over time — signifies deeper engagement / behavior formation
8) >60% natural acquisition — CAC doesn’t even matter!

Having even one is spectacular — it’d make me sit up!

10. What’s your largest miss up to now in tech?

In phrases of a very incorrect / unhealthy prediction. This was mine from years again — not getting Facebook and the way massive it was going to be: https://andrewchen.co/why-i-doubted-facebook-could-build-a-billion-dollar-business-and-what-i-learned-from-being-horribly-wrong/

Also for the primary few years, I assumed Uber was a bizarre area of interest service for tremendous wealthy individuals to get limos. I managed to repair that unhealthy prediction 😎

11. What is your least standard however deeply held opinion on tech/startups? Lively dialogue right here

12. The Law of Shitty Cohorts.

It’s common for a startup to have “meh” retention. But then often, staff says it is going to enhance retention by way of higher activation, lifecycle advertising and marketing, bettering product options, and many others.

But the legislation of shitty cohorts says that is unlikely to occur.

The motive is that the early cohorts of customers — let’s say the primary couple million or so — are often your greatest cohorts. They discovered you by way of phrase of mouth, they’re the early adopters of tech, and you don’t have any market saturation but.

However, as you scale, every cohort will get worse

In rideshare, all of the city dwelling energy customers who don’t have automobiles, and use apps day-after-day – they’ve all signed up. Now we’re buying rural/suburban customers who’ve automobiles and solely use it to get to the airport. Huge distinction.

When you purchase customers with paid advertisements, it’s even worse

So even whereas groups enhance their product, activation, and lifecycle, there’s an reverse (and generally even stronger pressure!) of worse cohorts becoming a member of your product over time.

(Inspired by the Law of Shitty Clickthroughs)

13. My order of operations once I sit down with a startup to determine how you can develop their new product.

1) first, is it working?
Usually the reply is not any 🙂 I take a look at retention charges, DAU/MAU, session lengths, what number of visits are pushed by way of push notifs, and many others and many others. Lots of benchmarking

2) whether it is working, then how can we scale it?
I take a look at the acquisition combine — how are new customers discovering the product? Are they utilizing all of the channels that different comparable merchandise are already doing?

If there’s one thing that’s working, can we scale it to be a lot, a lot bigger?

3) what can we do within the product to amplify all the above?

Since product is pricey to construct, let’s concentrate on prime of funnel and work all the best way down. Optimizing acquisition, then activation, then retention/churn, then reactivation (for later stage)

Tbh, #1 is the toughest!

Longer dialogue on this right here.

14. The Head/Heart/Hands framework

Or in emoji type, 👩/❤️/✋- for firm cultures and personalities at work. The thought is that each work tradition might be described as a pie chart of those three components. (credit score to my mates/coworkers at Uber who first described to me)

Not solely does every firm have this breakdown, so does every particular person on the staff. And the extra their particular person profile matches that of the general firm, the extra in sync they’re, the simpler it’s to get issues accomplished. Or that’s the speculation.

👩 Head = how a lot of the tradition emphasizes analytical skill, technique, planning, and many others. Cultures which might be sturdy at this do loads of evaluation, info gathering, and many others to try to make the best selections, however generally at the price of shifting rapidly or bringing everybody alongside

❤️ Heart = how a lot the tradition emphasizes staff cohesion + happiness. Teams that do that make investments so much on inside values, having a transparent mission, making selections that take into account the staff’s views, not simply enterprise outcomes. Lots of apparent downsides when this goes too far, too

✋Hands = how a lot the tradition emphasizes motion, and getting issues accomplished. Cultures that do that can transfer rapidly, are iterative, and are agile out there. But they break issues, can have a “hearth first, goal later” mentality the place loads of power is wasted

People mentioned Uber 1.Zero was a 30% head, 5% coronary heart, 65% arms type of place. Ridiculously listed on motion. Often doing the incorrect factor for the primary few iterations, however with a lot exercise, issues would get found out later. Needed extra love for drivers and staff although

Another startup that I’m shut with, which can be unnamed, is extra like 30% head, 50% coronary heart, 20% arms. Great tradition, individuals had been shut mates, didn’t get a lot accomplished. Yet one other is 70% head, 20% coronary heart, 10% arms. Incredibly clever however doesn’t ship.

I like this framework in that it says, hey, there’s no proper tradeoff – it’s simply completely different. Some industries require hardcore orientation in a method, and others in one other means. The VC trade doesn’t want 75% arms, for example

Similarly, if somebody’s not figuring out in a single culture- they could in one other tradition, the place issues resonate. Perhaps they’re too action-oriented in a spot that requires much more deep pondering as a result of selections are onerous to reverse. Again, there’s no “greatest” working model

As with Myers-Briggs, this train is extra for enjoyable, than science. However, you’d be shocked by how fascinating of a dialog it generates. Ask somebody to interrupt down their firm’s head/coronary heart/arms, and press for examples. You’ll be taught a ton

When you’re interviewing at an organization, this could be a enjoyable factor to ask. Otherwise when you ask “what’s the corporate tradition like?” you’ll usually simply get generic stuff like, “oh persons are are so sensible and good.”

A associated query is: “What’s one thing that occurs on this firm tradition that doesn’t at different locations?” Or, “who’s the kind of one who’s profitable right here who may not be at different locations?” (or the reverse). Interesting to know the contrasts

15. the LA client startup ecosystem

the LA client startup ecosystem is coming into its personal — Honey, Snap, Riot Games, Tinder, Bird, Dollar Shave Club.

The most $1B+ client startups exterior of the Bay Area?

A number of years again, I might need guessed that NYC could be the rising chief. But fairly clear it’s LA.

16. “The One That Didn’t Work Out.”

Startup founders, you realize what I imply: We spend years on a product – beginning it from scratch, recruiting mates, getting it off the bottom. We assume we’ll spend years on this. This is the one. We inform that to ourselves, buyers, and mates

We have a good time all of the milestones we’re imagined to. The first workplace. First verify in. The product launch. Fun emails from the primary customers. An essential rent. Team dinners. These are great, nice recollections!

When it’s time to boost cash, we inform potential buyers that that is it. We’re gonna work on this for years, as a result of we imagine. And we do! But that’s not what occurs…

There’s a messy second yr. Traction’s not so good as what we would like. Or possibly new customers are exhibiting up, however retention sucks. Some of the important thing hires depart. Fundraising isn’t as straightforward accurately. Monetization is gradual. It’s powerful

When issues get onerous, it’s straightforward to enter hermit mode. Don’t go to tech occasions, as a result of individuals will ask how issues are going, and also you don’t wish to fake it’s nice. Because it’s not. Easier to remain at residence and watch Netflix

You know the tip of this story: A number of years in, the as soon as shiny new startup acquired by a bigger firm. Or it’s shut down. People possibly even make a ton of cash. But the staff splits up. The product that you just stared at, day-after-day, for years, will get shut down. It’s time to maneuver on

But it’s onerous to maneuver on. It feels bizarre to stroll previous your outdated workplace. You don’t discuss to your staff anymore. You transfer your outdated photographs, outdated decks, outdated prototypes right into a folder deep in your Dropbox drive. Better to not give it some thought!

Yes, this can be a story of my very own journey for a startup I had years in the past that didn’t work out. But I do know it’s not simply me. It’s a lot of my mates, and lots of of you, who’re on their new startup, or a brand new massive tech job, however nonetheless keep in mind the one which didn’t work

You might have seen the great tweetstorm by @dflieb about Bump from 10 years in the past. You can see how a lot he grew from his journey. Even although Bump didn’t thrive, it’s now a part of Google Photos and the concepts impression tons of of hundreds of thousands of individuals. He needs to be proud! https://twitter.com/dflieb/standing/1050990035892199424

The latest @andrewmason interview on Groupon is similar. You can inform how a lot he each cherished his expertise and likewise how tough it was. Worth studying: https://twitter.com/andrewchen/standing/1051576009454116867

There’s an exquisite journey that occurs within the creation and ending of recent merchandise. The majority of startup journeys appear like this – even within the success case – and all of us be taught a ton from constructing them. It’s an incredible expertise, but in addition, it may be tough.

If you have got the identical Dropbox folder I do, it’s time to open it up. Scroll by means of the outdated photographs, open up the outdated decks. It will be the startup that didn’t work out, nevertheless it’s additionally the one which made you stronger and smarter.

17. Uber alumni and the following era of founders

There’s a TON of recent startups coming from Uber alumni – I do know of a half dozen in stealth, and Bird is already a breakout. It’s obv that the creativity and hustle required to make Uber work in its early years has skilled tons of of entrepreneurs. Very bullish on this group

As y’all know, Uber had a really decentralized mode of operation with every metropolis being run as its personal firm. Each GM owned their P&L, employed their very own individuals, and within the early years, would simply put Facebook advertisements and different bills on their bank cards! Great background

The product groups seemed like this too. We had a “Programs and Platforms” mannequin courtesy of Amazon / @jeffholden the place every program was full stack, and the PMs ran onerous once more their mission/KPIs with out introducing interdependencies

For everybody who joined within the early years – 2010 to 2014 – they’ve already hit their Four yr mark and lots of are spinning out. The actually early of us are investing. Folks like @williampbarnes @joshmohrer have shaped angel teams supporting alumni spinouts (and different startups too!)

From an investor standpoint, myself, @fffabulous @akad have all joined enterprise companies able to put money into the following era

The ATG / Otto of us are making strikes as effectively. My good good friend @drewjgray joined as CTO of the autonomous startup @voyage with @olivercameron. Also Kodiak, Kache, and lots of others.

Let’s speak about my fav matter, 🛴. @limebike has of us like my good good friend @uber_ed_baker as an advisor, and is slowly accumulating ex-Uber alumni (and Lyft! And different on-demand of us). Bird’s exec staff consists of Uber’s prev “Supply development” staff – @travisv, RF, Schnell, others

Not everyone seems to be doing startups, in fact. Lots of parents on “sabbataquit” – Uber’s coverage of permitting sabbaticals after Three years of labor implies that individuals usually do that earlier than leaving. And then they maintain touring, generally for a yr+. Many of us doing that

Whether they’re beginning, becoming a member of, or on sabbatical, it’s clear that this group is aware of loads of essential, venture-fundable markets effectively. There’s now 10,000s of focus who’re consultants on transportation, marketplaces, mapping, autonomous floating on the market. This is the following gen.

Very enthusiastic about my ex-uber colleagues! Looking ahead to what y’all do 😎

Finally…

Of course, if you need extra of those as they arrive in real-time, observe me at @andrewchen! More in 2020.

PS. Get new updates/evaluation on tech and startups

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