Silicon Cabarete MVP

November 20, 2014

It is common knowledge that it’s unwise to fight Russia in the winter. As such, I have been trying to convince my programmers in Ukraine (and Romania) to move to Cabarete. The setting and quality of life are extraordinary in Cabarete. Besides, I would much rather fly to Cabarete for in person meetings and have everyone on New York’s time zone, rather than have to deal with a 7 hour time difference and flying 11 hours on Ukrainian Airlines several times a year.

To help sway them, I decided to build a really contemporary office center whose design is inspired by WeWork and Neuehouse, but adapted for the Caribbean and integrated in nature. The idea is not only to house the developers for my projects, but also to offer great co-working space in Cabarete open to all entrepreneurs around the world. Living in Cabarete can cost as little as $1500 per month with everything included. This is a great combination for entrepreneurs who are short on cash and want to be close to New York for potential meetings with investors and clients.

The project is called Silicon Cabarete and is part of a playground I am building at La Boca.

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DO_FabricelandGR_9300_Office_001_140701_01d_ts

Sadly things in the offline world don’t move nearly as fast as in the online world. I bought the land two years ago and am still impatiently waiting for the permits. As entrepreneurs we know that we don’t start with the final product, but rather build an MVP (minimum viable product) and launch an alpha, then beta product. I decided to do the same here and to already start the process of moving programmers here in more a humble setting.

Quite appropriately, I transformed the garage at Embocca where I am staying in Cabarete into a small open space. I already had 8 team members come visit for a few weeks.

The bottom floor in the picture below is said “garage”.

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The team seems to have had a great time and we were the most productive we’ve ever been.

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I suppose the view from the office did not hurt.

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Various locations became fun work spaces with Bagheera clearly becoming a productive member of the team.

We got to Read More →

Yahoo to acquire Brightroll for $640 million in cash!

November 12, 2014

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Sometimes you just bet on people. I mostly invest in consumer facing startups, especially marketplaces. However, in July 2006, my good friend Auren Hoffman introduced me to Tod Sacerdoti who was CEO of POSTroller, a video ad company (which became Brighroll in November 2006).

I have to admit I did not know much about the video advertising market and had limited expertise in ad tech. It was obvious that video advertising was eventually going to be big, but I was not sure what the best way to tackle the market was.

Fundamentally, I really loved Tod. He was super sharp, passionate, confident, very honest about the status of the company and their market. It was clear to me that he had the grit and tenacity to stick it out and figure out how to make it. I just had to back him!

Over the years, as we interacted in more personal and intellectual settings (e.g.; he hosted a dialoging session I attended on “”How do you live forever?”), I have only gotten to appreciate what a smart standup guy he is, on top of being a passionate entrepreneur.

I was fortunate to have liquidity at the time (coming on the back of the sale of Zingy) which led me to make a bigger bet than I usually do. I ended up investing $100k at $4 million pre back in August 2006. Based on the public information it looks like Yahoo bought the company for $640 million, which post-fundraising dilution should turn into more or less a 60x return for me, my most successful exit to date!

Thanks Tod, you rock!

Correlation is not causation!

October 29, 2014

Always look at correlations in a critical light!

US spending on science, space, and technology
correlates with
Suicides by hanging, strangulation and suffocation

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Number people who drowned by falling into a swimming-pool
correlates with
Number of films Nicolas Cage appeared in

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Per capita consumption of cheese (US)
correlates with
Number of people who died by becoming tangled in their bedsheets

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Divorce rate in Maine
correlates with
Per capita consumption of margarine (US)

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See all at: http://tylervigen.com/

Not a bad list to be part of :)

October 28, 2014

Techcrunch recently covered the venture investments of various investors in the fashion space. It’s funny that it’s basically a bunch of venture firms and me :)

The table is actually missing my investment in Rebagg. I also have 3 pending investments in the space that will be announced shortly.

You can read the full article at:
http://techcrunch.com/2014/10/21/venture-investors-get-fashion-fever/

What if is an absolute must read!

October 14, 2014

WhatIf2I absolutely LOVED this book. Randall Munroe’s scientifically accurate answers to ludicrous questions are absurdly funny, well written and extraordinarily well researched. I laughed out loud throughout most of the answers. It’s funny how he destroys the world and/or humanity in half of the answers. I kept wondering who are those people who send these insane questions? I particularly loved the answer to the question of what happened if you put a hair dryer in a 1 square meter indestructible box, but frankly I laughed out loud so many times I lost count (and I can’t remember when is the last time that happened!).
 
My only disappointment was that the book ended! I can’t wait for the next installment! If you have not done so yet, read the book. Your inner nerd will love you forever!
 

Update on The Very Big Downgrade

When people successfully sell their company, they typically acquire stuff.  Instead I gave up my house, apartment and car and gave most of my material possessions (furniture, clothes, books, etc.) to charity in December 2012. It was my Very Big Downgrade.  Two years in, it’s time to take stock of what happened, especially since it has not gone entirely as expected.

When I decided on my Very Big Downgrade, I felt my possessions were anchoring me, keeping me away from the important relationships in my life. I was spending so much money and time maintaining my place in Bedford, I started thinking I had to use it thereby committing the gross fallacy of focusing on sunk costs rather than NPV (net present value). We should spend time somewhere because we want to and it maximizes our happiness, not because we feel we have to spend time there to justify the spending we incur by owning that possession!

Having successfully freed up a lot of time, I embarked on a mission to reconnect with my friends. I naively thought that if I spent a few weeks on their couches or their guest bedrooms, we would be able to reconnect the way we connected while we were in college spending hours sharing stories, dreams and remaking the world. If you spend a few days sleeping on friends’ couches, they do have a tendency to open up and you rekindle that level of intimate conversation that started the friendship in the first place. However, I soon realized that Benjamin Franklin was right: “Guests, like fish, begin to smell after three days.”  This is especially true if your friends have a day job and are married with kids, while you are single, with no explicit time commitment other than to manage inbound investment opportunities while looking for “the new new thing.”

It did not take very long to realize that I was rapidly overstaying my welcome everywhere. As my dreams of couch surfing the world for weeks on end while reconnecting with my friends rapidly crashed and burned, I chanced upon a more effective solution of achieving both goals.

I laid out fun personal objectives and iterated through them until I found things that resonated. I rekindled my love affair with skiing. I tried various skiing destinations until I found Mica, which turned out to be skiing heaven. After I Read More →

Infrastructure for Marketplaces: The Shovels and Picks of the End-to-End Marketplace Gold Rush!

September 8, 2014

by Guimar Vaca Sittic

Building marketplaces is really hard. The hardest nut to crack is building liquidity: having a critical mass of buyers and sellers. One of the main reasons marketplaces fail is that they don’t live up to the expectations of their buyers, and consequently, of their sellers. Buyers typically not only expect the type of quality of service to be comparable to that of an Amazon or Zappos, but also, they are unaware that the service in a marketplace is provided by a third party rather than by the company itself.

Given these high expectations, marketplaces work hard to improve the quality of their suppliers.  Many marketplaces have regular training seasons to do so. Airbnb teaches its hosts how to treat their guests upon arrival, how to promote their home on their website, and how to optimize prices depending on the season, etc. Skillshare trains their teachers how to manage student expectations, how to choose the right venue and select the right schedule for the class, etc. Marketplaces make their suppliers do a lot of work!

People tend to mimic each other. If there are a few sub-par sellers who write lousy descriptions and take low quality photos, then often the supply quality of the marketplace as a whole starts declining as other suppliers think it’s ok to do the same (which is less work than doing a good job). Airbnb realized hosts were really bad at taking high quality photographs of their homes, so they hired professional photographers to raise the bar. Although any user can request to use the photography service for free, even hosts who take pictures by themselves improved their quality significantly by mimicking the work of the pros. It’s crucial to provide guidance to sellers in a marketplace. Airbnb competes against Booking.com and hotel experiences; as such they need to provide a superb experience for renters pre-booking and during their stay.

Building an infrastructure around marketplaces is crucial since it enables new markets to arise. OpenTable and Mindbody created the marketplace at the same time as they created its infrastructure. OpenTable could not operate their marketplace efficiently if restaurants did not have a proper reservation management system, so they created one alongside with the marketplace itself. These are concrete examples in which the infrastructure the marketplace needed was very Read More →

One Step Closer To Streamlining the Car Buying and Selling Process

As an entrepreneur and investor, I am fortunate enough to collaborate with startups on a regular basis, learning about their ambitions and plans to shake up their respective industries. In my previous blog post, The used car buying and selling process is broken and we are going to fix it!, I discussed how one of the startups I work with, Beepi, is streamlining the process of buying and selling cars by removing the labor and hassle for the consumer – with the click of a mouse.

Less than five months since launching, Beepi has surpassed all our expectations ten-fold. We recently integrated with bitcoin, becoming the first peer-to-peer marketplace allowing people to buy cars with the crypto currency and notably and we are set to hit $10 million annualized sales run rate by the end of this year. Today, I’m pleased to share that we have just expanded operations to the Los Angeles region in conjunction with launching Beepi Prime!

It should come as no surprise that residents in L.A., one of the biggest driving cities in the nation, are hungry for new ways to purchase and sell cars easily. A direct response to consumer demand, the new regional expansion coupled with Beepi Prime, a new personalized service that guarantees vehicle delivery within five business days or less for $999, are the next phases in eliminating pain at every step of the car buying and selling process. The service is currently available within 140 U.S. cities including Phoenix, Scottsdale, Las Vegas, Portland and every city within California. To celebrate the launch, buyers in California will even receive the Beepi Prime experience for free!

Extending upon our commitment of offering the best car buying experience possible, Beepi cars come with all the fixings – including a fully-detailed vehicle upon delivery, a 10-day money back guarantee, and a 3 month/3,000 mile warranty. Beepi Prime buyers also receive daily updates on the whereabouts of their car during delivery and a personal car tour from a Beepi inspector upon arrival. Should a buyer for any reason have the need to return their Beepi car, they pay zero fees – not even the shipping.

Check out the video below to get a sense of the full Beepi experience:

Beepi has no plans of slowing down and I can’t wait to share what we’re Read More →

Farewell Harvard!

August 28, 2014

Even when I was little I knew I wanted a dog, preferably a Labrador. I remember begging my parents to get one. They finally saw the wisdom of my request and Ucla joined our family. For 16 years, he was a constant fixture in my life with his wonderful almond eyes and insatiable thirst for life. Despite lacking proper training, he always instinctively knew what to do. He always ran to the right of my bicycle on open roads going exactly at my speed. We played a game where I had to steal a ball from him through whatever means possible for us to play fetch. Should I fail in my attempts, he would start putting the ball on the side of his mouth to make it easier for me to steal it from him. We had a blast!

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Once you have been blessed by the love and companionship of a dog, you can’t quite imagine living life without it. I pined for a new Labrador for years. However, I knew it would be unfair to the dog and to me should I get him while living in a tiny apartment in NY while completely overworked from McKinsey or whatever startup I was running. I bided my time. Finally, post selling Zingy I could afford to have a country house with a big garden and could indulge my childhood dream!

My girlfriend wanted a Rottweiler so we wisely compromised and got both! She looked for breeders, read books on how to select amongst all the puppies, while I was tasked with rolling around the mud and playing with them. I can’t tell you how adorable Rottweiler and Labrador puppies are. It’s a miracle we ended up with only two dogs! Harvard was born on March 2, 2005 and I first met him 5 weeks after that. He was so white he had been nicknamed “snowball”. I have to admit that he was not the puppy we picked. When we came back 2 weeks later to get our dog, he was the only one left. We had driven all this way and he was just too cute not to take home. And thus Harvard entered my life.

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My father had named my first Labrador Ucla because it was supposedly the year of the “U” in Read More →

My friends are the best!

August 4, 2014

40 of my best friends and family prepared a wonderful and very touching video for my 40th birthday.

Special thanks to Anne Hamilton for directing and producing it.