Ventureminded: Startups, Tech, and VC

‘Perfect Is 5 Times a Year’

Last night, I had the opportunity to sneak over to an undergrad event at which Andre Agassi was speaking. I went to the talk as a tennis player and fan, someone who, at 12 years old, vividly remembers witnessing Agassi complete the career Grand Slam at Roland Garros, breaking down in tears. I left having heard exactly what I needed at this inflection point in my life. What follows are some of those lessons…

Believe it or not, there isn’t much difference between a professional athlete, a top student, a savvy businessperson, or a brilliant developer. At some point (or maybe all points) in their lives, they have expected perfection from themselves. And, perhaps more importantly, numerous others have expected perfection from them. They have become prisoners to perfection. I know that this expectation of myself has manifested itself in debilitating ways, whether it was in the middle of a junior tennis tournament or learning a new concept at school.

Many think being called a perfectionist is complimentary — it’s not. As Agassi pointed out last night, there is subtlety and nuance between perfectionism and choosing carefully how to live one’s life, being competitive with yourself in a healthy way. This feeling of internal competition is natural and can be useful. It is OK to be stressed, to feel overwhelmed. You wouldn’t even know to sense this pressure if you didn’t have the skills and tools to overcome it.

Ultimately, as Brad Gilbert, Agassi’s former coach, told him during their first meeting, “perfect is 5 times a year.” What matters is how you engage with the other 360 days when things aren’t “just right.” It is during these moments (more than any others) that you should allow yourself to be a work in progress, recognizing that how you handle what comes your way next — whether a serve up the T or a difficult conversation — is vital.

Your Time Tells Your Story

As I wrap up my last month of school ever and enter the “real world” for good, I’ve begun to think carefully about where I’d like to begin my career, or more broadly, how I want to spend my time.

Over the last 2+ years, I’ve devoted myself to making a fairly substantial professional transition from finance to startups. Hundreds of cold emails, thousands of Tweets, and over 100 blog posts later — with unique opportunities at Lowercase, Gumroad, and others along the way — have taught me an immense amount. And, perhaps more importantly, all of these activities have indicated to observers what I care about, what my passions are, what my story is. Consequently, I have acknowledged that whatever I choose to do professionally after graduation will be evaluated in this context. Wherever I go to work after school should be in-line with the current trajectory I’m on if I want people’s perception of me to be consistent with my own. 

However, in a more general sense, this concept of amount of time spent on a pursuit indicating one’s level of passion or interest could (or should) be applied to personal endeavors as well. It may seem excessive or overly self-conscious, but how you spend your time — whether it’s Tweeting, exercising, coding, attending sports events — shows others, quite clearly, what matters to you. Being aware that your use of time, whether professional or personal, alters people’s perception of you and provides fodder for the story they’ll craft about you is the first step to ensuring you’re pursuing your passions logically and consistently.

The S Word

For many people, the word “strategy” conjures up images like this one (an actual slide from my strategy professor last year): 

Strategy is theoretical. It’s amorphous, intangible, and fluffy. It’s a presumptuous MBA drawing red lines connecting concepts and assuming that their work is done. It is the complete opposite of what startups and their founders stand for and prefer — execution, “doing things,” “getting shit done.” Diagrams like the one above give strategy, per se, a bad name. It’s associated with the b-school student who’s trying to break into the startup scene but doesn’t really have any “true value” to add. Strategy has become a taboo word to mention around an early stage company, particularly one for which you’re trying to work.

However, despite the knocks on strategy and the people who want to “do it,” there is a meaningful place for it in a startup environment. It is on the same level as execution for the simple fact that you shouldn’t have one without the other. We saw this firsthand at Gumroad when determining which verticals and specific content creators to approach. Each choice was evaluated closely prior to sending those initial emails to managers, agents, label execs, and creators themselves. This statement will sound self-evident, but all decisions are inherently strategic. And if you don’t consciously think about the strategic aspects and implications of a decision prior to executing, you’re doing your company a disservice.

Re-thinking Venture Capital, from the Beginning

A couple days ago, I sat in on a course entitled, “The Coming of Managerial Capitalism,” during which the class discussed a case on Georges Doriot, commonly known as the “Father of Venture Capital.” Towards the end of class, comparisons were made between Doriot’s fund, the American Research and Development Corporation (ARD), and modern venture funds. The differing structures have significant implications on the types of investments they make as well as who invests in these funds.

For some background, in 1946, Doriot helped launch ARD, the first venture capital firm. ARD was formed as a closed-end fund, which meant it raised capital by selling a limited number of public shares. As opposed to VC firms today, there weren’t LPs, and the shareholders were primarily individuals — not institutions. Investors were given shares in this closed-end fund that could initially be traded over-the-counter and eventually, in 1961, on the New York Stock Exchange.

Over time, the LP / “2 & 20”structure that we’ve come to know and love came to the fore, ultimately forcing out ARD. But is there room for the Doriot-style fund today? And if so, are there enough benefits for it to be something worth pursuing?

Currently, venture funds tend to operate on a 10-year lifecycle with the first 5 to 6 years reserved for initial and follow-on investments and the last 4 to 5 years set aside for “harvesting” as well as beginning to raise another fund from LPs. This arrangement requires funds to return capital to LPs, implicitly meaning that they can’t always back the most revolutionary, and inherently risky, ideas. Certainly, today’s top funds back audacious entrepreneurs, but the current setup compels these investors to still place some relatively “safer” bets.

However, I’d argue that the closed-end structure, essentially a publicly traded venture fund, would incentivize more risk-seeking behavior. This style would allow for a focus on the more extreme long term, not just 10 years as we’ve grown accustomed to, as there would be no obligation to return a pool of capital to investors. Without this concern hanging over the heads of a fund’s GPs, I believe more SpaceX’s and Tesla’s would receive venture funding. Many VCs have disbanded their clean tech practices, while others have abandoned biotech, health care, or intensive hardware investing. While a lot can be accomplished in 10 years, as we’ve seen with Elon Musk, many of the most promising and significant advancements in the aforementioned sectors cannot. A closed-end fund would go a long way towards increasing the chances that these businesses get properly funded.

When it comes to some of the more practical questions, such as payouts to shareholders and evaluating the fund’s performance, this publicly traded fund could take a page out of ARD’s playbook. To return capital to its investors, it would issue dividends when possible. And just as today’s VCs must raise new funds from LPs, this publicly traded fund would simply issue new shares when it was running low on capital. Both types of funds are judged on prior performance when this fundraising occurs – it’s just a different method from different investors.

And speaking of investors, this stark difference between the closed-end fund and the now traditional venture fund carries some interesting benefits as well. A publicly traded venture fund would give retail investors, accredited and unaccredited alike, the opportunity to participate in this arena of (potentially) outsized gains. While the JOBS Act was supposed to allow unaccredited investors the opportunity to invest in startups, that still hasn’t come to fruition, and this model would be a safer way to let these investors participate in this sector. Moreover, their investment would be inherently diversified since they’d own a piece of an entire fund as opposed to merely a piece of one company.

The closed-end fund structure certainly has its flaws – no fees, which may lead to lower salaries, no automatic carry, which may lead to lower overall compensation, and difficulty around valuing portfolio companies, and thus the fund’s share price – but ultimately I believe there is a place for this structure in the current venture ecosystem given the aforementioned benefits, particularly if there is going to be sufficient support for an influx of truly world-shaking ideas.

Fab.com: Making Culture Cool

Despite the fact that “design” in and of itself is ubiquitous, owning well-designed products still seems out of reach to most people. However, Fab.com is seeking “to help people better their lives with design.” While the site may be riding an e-commerce wave, it is definitively influencing culture as opposed to merely capitalizing on a popular trend. The site boasts more than 11 million members in 26 countries – Fab’s focus on “everyday design” and culture is more than a niche interest or passing fad. So, how has Fab been able to make culture cool?

Given its tremendous growth, Fab has undoubtedly succeeded as an intermediary, uniquely introducing customers to design, instructing them, and curating products, including only items that will appeal to the site’s members. But it has built functionality and features to drive transactions and make owning well-designed products something to which a mainstream audience aspires – an additional difficult step beyond merely being an intermediary. It has done so and maintained its impartiality by turning members into the influencers. A persistent feed on the site shows all the products being “faved,” commented on, or purchased in real-time, implicitly urging users to make a purchase of their own. Fab’s integration with Facebook’s Open Graph alerts friends whenever a person faves an item or makes a purchase. This consistent presence from Fab in the News Feed contributes to the perception that the products are indeed part of “everyday design.” This social commerce feature influences people to join Fab (it drives 50% of membership sign-ups) or make a purchase, as they see that a friend (i.e. “someone just like them”) is embracing design and culture.

Fab has become a preeminent intermediary in the design world, providing a connection between creators and consumers. Previously, the notion of design was nebulous, and items that fell into this poorly defined category were considered rather esoteric. However, Fab, as an intermediary introducing customers to design, has made it accessible in a number of ways, even producing a commercial, which makes the company feel like a retailer of more “traditional” products. The items run the gamut of price points, ranging from Warhol calendars to original Warhols. Similarly, there is a wide variety of products for sale, from the Beardo, a “bendable mustache hat,” to bcalm, a drink described as “mental clarity in a can.” In short, Fab has broadened the definition of design to be as accessible as possible to as many people as possible. Beyond introducing millions of people to a new element of culture, Fab instructs its members by providing complementary content alongside every item. These unbiased descriptions are written in such a way that a potential customer can relate to almost any product. Lastly, Fab assumes the role of curator, including goods that will resonate with its members, a critical function as many of these customers previously did not consider themselves consumers of design. Fab has simultaneously leveraged technology and social commerce while fulfilling the duties of an offline intermediary to make culture cool.

My Mailbox Conversion

I was #7,892 in line. I saw the awesome demo video and was instantly in love. I saw people with beta access proudly proclaiming on Twitter that they had reached “Inbox Zero.” I was jealous of their Mailbox access. 

Then, after waiting about a day and a half “in line,” the velvet rope was lifted and I entered Club Mailbox. However, I was immediately disappointed, even Tweeting out my frustration:

Anyone else thoroughly underwhelmed by Mailbox so far?

February 8, 2013

Now, just a mere 10 days later. I’ve not only been converted into a believer — I’m a veritable evangelist for the product, goading numerous people to give it a chance. So how did it happen?

My entire “email career,” I’ve either deleted messages or kept them in my inbox. So, when I naively clicked the button to get help reaching inbox zero, I was in disbelief when my thousands of emails from 3 different Gmail accounts disappeared into the “Archive,” a location that had previously been uninhabited. I then sheepishly moved about 100 emails into my inbox. Problem solved…until I complained on Twitter to the Mailbox account that I couldn’t re-sort my emails using drag-and-drop, bemoaned the inability to save drafts, and questioned whether I would use this app ever again. 

However, I have seen the light; Mailbox has actually made productivity fun. The app isn’t about reaching “Inbox Zero.” It’s about helping you focus on what matters. Why should you keep stale email threads cluttering your inbox? Just keep what matters. If a thread gets restarted, it’ll make its way back to the inbox. As Gentry (Mailbox’s CEO) told me on Twitter, dragging-and-dropping with over 50 emails is meaningless — it’s a feature that’ll never happen. At the time of hearing that, I was angered. Now, I completely understand. How you can truly prioritize when there are that many options to prioritize? You can’t. This is just one example of this team’s great attention to detail. Another small one, which I love, is when you email yourself, it shows up as “Note to self” in your inbox. A nice touch. Saving drafts isn’t an essential feature because when you’re on your iPhone, should you really be drafting the next Ulysses? If an email needs to be that long, just swipe left and have Mailbox send it to you later that night. In fact, I find myself writing more concise, punchier emails because of the lack of drafts, small text box, and “conversational” UI. 

Now, of course, there are some features and enhancements I’d like to see (e.g. Exchange, ability to add email address to my contacts more seamlessly from the app), but I have no doubt that the product will evolve, and I look forward to continuing to be an active user.

Monetizing YouTube: Invest for the Long Term or Capture Value Now?

In October 2011, YouTube’s CEO Salar Kamangar and the rest of the executive team announced a major initiative in which they would advance $100 million to content creators and invest another $200 million in promotional support. These creators ranged in fame from YouTube celebrities like Ray William Johnson and Phil DeFranco (via their respective studios) to stars like Shaquille O’Neal, Madonna, and Ashton Kutcher. The objective was to jumpstart content creation by a variety of people, particularly mainstream celebrities who would increase YouTube’s brand equity and credibility in the eyes of advertisers and other media properties who may put content on YouTube. About a couple months ago, Kamangar and his team decided that they would be doing another round of investing; however, only 30 to 40% of the original partners would be receiving funding. While this reduction in funding is indicative of what Kamangar has learned from the program’s first year, it is still a clear message from YouTube signaling its desire to become a venue for mainstream content and top-tier advertising partners, and ultimately a money-maker for Google. This strategy favors a long-term monetization model using advertising as the primary driver, a rather conventional model for media, as seen in radio, print, and television. Rather than renew any portion of the program, I firmly believe that Kamangar should have focused on supporting creators in a way that was aligned with Google and YouTube’s core competencies, which would lead to multiple, more immediate revenue streams – not just advertising – and a more defensible position going forward.

Investing in creators may build platform loyalty and credibility with brands

Kamangar and YouTube’s decision to invest in content creators is certainly logical. Intuitively, it should lead to higher quality content on the platform and more people watching for an even longer amount of time. These $5 million experiments (the amount of money advanced to each creator) would serve as individual proofs of concept for various types of content. The YouTube executive team would then know which content works best in terms of not only attracting viewers but also top advertisers. Despite choosing to renew only 30 to 40% of the original content creators in the program, Kamangar and YouTube’s remaining committed to this strategy would accomplish several objectives. First, investing in these creators requires them to create YouTube-specific content for a full year. This commitment from the creators is matched by YouTube’s commitment to provide capital for promoting the content. This symbiotic relationship is critical to forging loyalty to the YouTube platform, as this strategy inherently is focused on a long-term monetization model centered on advertising. When deciding which channels to renew, Kamangar and his team intentionally focused on “watch time,” an engagement metric – not financial performance – an admission that advertising, particularly from big brands, is still a work in progress.

This bet on rights-managed online content and video advertising is certainly a long-term play, and while I am rather skeptical of its being a massive revenue driver, it is difficult to argue with the fact that these trends are coming to fruition, albeit slowly. With regards to rights-managed online content, viewers are watching more of it than ever, leading to 17% year-over-year growth. Moreover, the market for video advertising (as measured by video ad view volume) is outstripping video viewing gains with 49% year-over-year growth (Exhibit 1). It does not appear that there will be a reversal in either of these trends any time soon, so Kamangar’s strategy may eventually pay off in the long run. While this model allows YouTube to place opportunistic bets on content creators, choosing whom to support and how to support them carries some negative externalities.

Investing in creators may have unintended consequences and may even be redundant

While backing content creators can be helpful for the various reasons mentioned above, there are some unintended consequences of this approach. First, the initial decision to hand-select certain creators is a signaling effect to all content producers, both mainstream and long tail. It indicates that these are the types of people, content, and organizations that are most likely to prove out the YouTube model. And while that may indeed be the case, it potentially stifles the creativity and motivation of people who normally would put content on YouTube. Furthermore, it may lead to conflicts of interest. YouTube is committed to promoting the content of these creators whom they have chosen, but what happens if numerous creators whom YouTube is not officially supporting become popular? How does YouTube balance its allegiances to the creators it has invested in with rising popularity of obscure creators? Choosing to invest in certain people implicitly carries this weight and puts Kamangar in a precarious situation. In addition to these challenges, YouTube networks have become fraught with controversy as of late. Toby Turner, a YouTube star, was recently fired from his own show, and Ray William Johnson, arguably the first “YouTuber” to make it big, recently had a very public falling out with his production company, Maker Studios. These controversies and generally “unsavory business practices” are not something with which YouTube should be associated for brand equity and reputation reasons. Moreover, essentially paying people to use the platform implicitly taints the purpose of Kamangar’s program from the outset.

While $300 million is not a significant amount of capital for YouTube and Google more broadly, it is worth examining whether this strategy was even necessary. Certainly the logic was to provide a proof of concept for creators of varying fame and advertisers, but it may have been redundant. Without investing any money, the power of the YouTube platform itself had already turned long tail content creators into veritable stars and mainstream content was already being uploaded. Ray William Johnson, a prominent YouTuber since 2007, is believed to be the first “YouTube millionaire,” and in June 2012, he signed with William Morris Endeavor, the largest talent agency in the world. Alex Day, a musician from the UK, created his YouTube account in 2006 and has had two UK Top 20 hits, including a Top 10 song which made him the first unsigned artist to have a song place in the Top 10 of the UK Singles Chart. These two creators are far from the exception, as 16 of the top 20 most subscribed video producers are not “mainstream” – only thelonelyisland and the three VEVO producers would be classified as mainstream. Well-known creators have had significant success as well, though. VEVO, a joint venture between Sony Music Entertainment, Universal Music Group, and Abu Dhabi Media, accounts for 18 of the top 100 most subscribed channels and 26 of the top 100 most viewed producers. So, if YouTube should not risk investing in creators and may unnecessarily be spending money, how should Kamangar proceed?

YouTube should leverage core competencies and pursue other monetization strategies

Rather than placing bets on content creators, Kamangar and his team should take advantage of two attributes that are unique to YouTube, compared to the site’s competitors. First, venture capital (VC) funds and corporate media investment arms recognizes the power of YouTube and the future of content creation and dissemination, so there is no shortage of money flowing into this space. Second, YouTube should significantly leverage the Google product portfolio and its technological advantages to attract and monetize content creators.

Regarding the first factor, venture funds were backing YouTube producers even before YouTube itself was. In April 2011, Greycroft Partners and GRP Partners invested a total of $4 million in Maker Studios; in December 2012, media conglomerate Time Warner led a $36 million round of financing in Maker. Meanwhile, YouTube network Machinima has now raised nearly $50 million. While some of the capital comes from Google, it has also raised several million dollars from MK Capital and Redpoint Ventures, two VC funds, from as far back as November 2008. Lastly, Peter Chernin, the former COO of News Corp and CEO of The Chernin Group (TCG), recognizes the importance of YouTube, as his firm has invested $10 million in Base 79, a YouTube agency that previously raised traditional venture funding from MMC Ventures, and $3 million in MiTú, a Latino-focused YouTube network that was overlooked by YouTube’s funding program. Aside from funding, YouTube networks have also formed partnerships with mainstream media. For example, Fullscreen, which TCG incubated, has built a side business, Channel Plus, that works with NBC, Fox, and FremantleMedia, instructing them on how to distribute content on YouTube.

The Google platform is perhaps the most valuable asset that YouTube has at its disposal. If used well, it will lead to more immediate and significant monetization and defensibility against video competitors such as Facebook and Vimeo, which is specifically recognized for having higher quality content on average. YouTube needs to create stronger ties with the Google product portfolio, such as Google+ Hangouts, Wildfire (for social marketing analytics), and Google Wallet. For example, Google just made “it easier to share new public videos to Google+ after they are uploaded and by highlighting users’ public YouTube videos on their Google+ profiles.” Google Wallet could be used with YouTube’s new Merchandise Annotations program, an initiative that allows creators to annotate their videos to sell products to viewers, thereby allowing YouTube to capture an affiliate fee.

The ability to create phenomenal premium features for creators is one of YouTube and Google’s core competencies. Given the data at YouTube’s disposal, Kamangar should implement packages to upsell networks and individual content creators. These packages could include A / B testing, improved search engine optimization, better targeting of specific demographics (a feature that networks desperately want), and a dashboard with advanced analytics to help content creators make informed decisions about how to best acquire, engage, and retain viewers and appeal to advertisers. YouTube could also allow creators to pay for additional features for their viewers to enhance the viewing experience. Features such as improved sharing, voting, and a real-time chat room are a major advantage over traditional TV that will attract mainstream content creators. These features also increase the amount of data on YouTube’s audience and enable other types of advertising and sponsorships besides stale pre-roll videos.

If the goal is for YouTube to become a profit center, the 2^nd strategy should be implemented

The strategy articulated above that involves multiple monetization paths and capturing value in the near-term is not without its pitfalls. Relying solely on other firms to invest in networks and content creators implicitly means YouTube will relinquish some control. Of course, Kamangar and his team will not be able to hand-select their preferred creators, thereby having less influence over picking the “winners.” However, there are potentially other consequences. For example, upselling networks and creators for premium features as described above fundamentally changes the value proposition to them and the YouTube experience, which may appear too data-driven or analytical for people in the creative industries. Moreover, the audience-facing features alter viewers’ respective experiences on the site and may detract from the simpler user interface that YouTube just rolled out. Proper positioning of such changes will be critical.

While these are considerations that Kamangar should take into account, I believe that the ultimate decision comes down to Google’s desire for YouTube to become a massive profit center. Spending $300 million and subsequently renewing a portion of this investment is logical for a long-term monetization play centered on advertising from top-tier brands. However, it makes little sense as a means of developing a proof of concept given the successes described and puts YouTube in a tough spot because of signaling issues and conflicts of interest. Kamangar’s central objective is to turn YouTube into a money-maker for Google. By leveraging the site’s momentum, as recognized by VC funds and media conglomerates, Kamangar will be able to monetize YouTube most effectively through a more robust feature set and analytics package for which studios and creators will pay and better synchronization between YouTube and other Google products, both of which will lead to more unique and immediate advertising opportunities.

Exhibit 1

**A modified version of this post was previously submitted for a course entitled, “Strategic Marketing in Creative Industries.”**

Lessons Learned During an Introspective Return to San Francisco

Last January, I spent a week in SF / Silicon Valley meeting with companies and venture firms - it was my first taste of tech’s Mecca. I made another trip in March before spending 3 months out west during the summer. Making semi-frequent trips to the west coast is critical as I seek to “stay relevant beyond Twitter” (as one person put it), and as Fred Destin Tweeted when I was out west, going to “SF makes you step your game up.” So, earlier this month, I made another pilgrimage, jamming nearly 30 meetings of various sorts into 5 days (resulting in the flu, which I’m just getting over). Here are a few of my takeaways, both personal and from meetings with people who were generous enough to make time to chat with me.

On career:
“In the tech and startup world, you can’t engineer your career.”

Throughout my life, I’ve followed a very structured route. Graduate from high school, attend college, do a banking analyst program, attend business school. So now what? As the speaker of the above quotation also said, it’s important to “embrace the chaos,” as I enter arguably the “most productive and creative time of [my] life.”

On choosing a role / company:
“Figure out what you want to be great at.”

As one person told me during my trip, a resume shows what boxes you’ve checked and hopefully which skills you have, but it’s up to you to determine which skill you want to cultivate to be great at. And then leverage that skill to separate you from the pack and be an asset to a company. Once you know what you want to be great at, you should choose a company / firm that will help you develop that skill to the fullest extent possible.

“Know what it feels like to win.”

This above statement was the most common refrain during my trip. Whether you ultimately want to be a founder, an employee at a very early stage company, or a VC, when coming out of school, it is critical to know what it feels like to win. Oftentimes, this means joining a company that may already be fairly well-established, but it is still growing at a significant clip. As one person told me, it is less about the company’s particular stage and more about its rate of growth. Knowing what it feels like to win is vital because when you start that company later on or are investing in startups several years down the road, you’ll know the ingredients that make for a successful company. You’ll know the right culture, the winning attitude, the “vibe.” Knowing what it feels like to win is more about recognizing the intangibles. I was told by one person that from his experience at successful organizations, he can know almost immediately upon walking into an office if a startup is “winning” or on the right track. It’s no different than walking into the locker room of a sports team and sensing how they’re doing.

On mindset / approach:
“Think like a CEO but act like an employee.”

When talking to companies / firms and when on the job, it is important to constantly maintain a high level view. Understand the implications of all your decisions, no matter how small, as they ripple through an organization. However, at the same time, it is equally critical to maintain humility and quiet confidence as you think tactically and execute on a daily, if not more frequent, basis. While this balance may be hard to strike, following the guidance above will significantly aid in fostering it.

The Great Re-Branding: MBAs at Tech Startups

As I enter my final semester of business school and get ready to head out to the Bay Area for a week in early January, I can’t help but think about how MBAs are received by the early stage tech community. Last spring, Ben Horowitz wrote a post asking whether it was time to hire MBAs at startups again (as if it ever stopped). He argues that ambitious MBAs gained a sense of entitlement during the late ’90s and early ’00s but got a dose of humility in the aftermath of the bubble and are now actually undervalued. But is it really true that the damage MBAs caused over a decade ago has carried over to now, a time in which MBAs are still regarded with skepticism in the startup community? For a sense of what I’m getting at, see this Tweet from Sarah Lacy after a post was published on PandoDaily. I asked Ben during his PandoMonthly interview what it would take for MBAs to gain more respect in the startup world (jump to around 1:56:10 to see the question), and he cited Tristan Walker, a Stanford MBA whose hustling to get a job at foursquare, is well-known and well-documented. Though, Ben even added that Tristan likes to “keep it a secret” that he went to Stanford GSB, and it would take “one MBA at a time.”

While many people cite similar explanations as Ben or mention the stereotype of the “d-bag MBA” as to why MBAs aren’t more prevalent at startups, I’d argue that the primary reason many current MBAs trying to enter the startup world aren’t getting respect is because former MBAs who have been successful to varying degrees in early stage tech have, whether purposely or not, re-branded themselves - no one even knows they have an MBA.

The French poet Charles Baudelaire (and Kevin Spacey as Verbal Kint in The Usual Suspects) famously said, “The greatest trick the Devil ever pulled was convincing the world he didn’t exist.”

Now, MBAs aren’t the Devil (though there are some in the Valley who would disagree with me), but when it comes to former b-schoolers entering the startup community, they seem to have pulled off a similar trick, suppressing their degree and dispelling a number of myths along the way.

Myth 1: No one technical gets an MBA.

Contrary to popular opinion, not every single business school student worked in finance or consulting prior to going back to school. In fact, there is a sea change being undertaken at top b-schools to admit students with engineering / CS backgrounds or product managers who are seeking business expertise to complement their technical skills. For example, I have been surprised to realize how few people know that Chris Dixon has a MBA from Harvard Business School. Adam Nash, now COO of Wealthfront, earned a BS and MS in computer science from Stanford before getting his MBA at HBS. Or more recently, Amanda Peyton, a mobile and web designer and co-founder of multiple startups, graduated from MIT Sloan in 2010. Currently, I have several friends who have CS degrees and/or were product managers at startups and large tech companies before entering b-school, including one (Nick Patrick) who’s set to work at foursquare as a PM and even built an app for foursquare Superusers.

Myth 2: MBAs can only be founders - they don’t know how not to be in charge unless they’re in big companies.

Somewhere along the way, a stereotype emerged that MBAs don’t know how to work well in teams or deal with not being “in charge.” Aside from Tristan Walker joining foursquare, there are countless examples of MBAs at startups. Hunter Walk, another Stanford GSB grad and author of this amazing post about having an MBA – not being an MBA, led product at YouTube from 2007-2011 after being on the founding team at Linden Lab, which created Second Life. Sheryl Sandberg joined a small company called Google in 2001 and of course joined Facebook in 2008. But before that she earned an MBA from HBS. More recently, I look at Chris Kurziel, who graduated from Cornell’s Johnson School in 2011 and worked at Shelby.tv for much of his 2 years in school, Matt Hunter, who graduated from UVa’s Darden in 2010 and now does software product design at Jawbone after founding a couple startups, and Justin Overdorff, who graduated from Wharton and then spent time at TechStars in NYC before joining Yelp. Additionally, Andrew Rosenthal joined Massive Health as Chief Strategy Officer, Cynthia Samanian is now a PM at Path, Josh Yang works on product at thredUP, and Jon Dick does business development at Klout – all of whom graduated from HBS last year. This list is far from exhaustive and isn’t just a result of companies thinking MBAs are undervalued.

Myth 3: A “real” entrepreneur wouldn’t get an MBA.

This may be the most laughable of all three myths. I can’t tell you how many times people told me not to even bother going to business school if I ever intended on founding a company. Ryan Allis, the founder and CEO of iContact and Connect.com and a current first year student at HBS wrote a phenomenal post on how valuable b-school has already been to him. Aside from the aforementioned MBA founders, few people realize that Kevin Ryan has an MBA from INSEAD. Or Eric Paley, who graduated from HBS in the same class as Chris Dixon, founded a company before returning to b-school. Or Jeremy Stoppelman, a CS major, dropped out of HBS during the summer between his first and second years after founding Yelp. Or Mark Pincus graduated from HBS well before launching Zynga. Mark Suster, graduated from Chicago GSB (now Booth) before founding a couple companies and Jeff Bussgang, a CS major, graduated from HBS before founding Upromise. And more recently, Scott Belsky graduated from HBS (and even worked for Goldman Sachs after undergrad) before founding and exiting Behance and Josh Kushner co-founded Vostu before earning his MBA at HBS (forgetting the success he’s had as an investor).

Side note: Or this list of companies, founded by recent MBAs, that I came up with off the top of my head: Warby Parker, BirchBox, Streak, RelayRides, Gilt Groupe, Rent The Runway, BabbaCo, Kiwi Crate, Insight Squared, RallyPoint, Handybook, Snapette, LearnVest, thredUP, Take The Interview, BaubleBar, StyleMusee, Zumper, Quincy, Locu, FashionStake (acquired by Fab), EverTrue, Shoptiques, Tough Mudder, Trendyol, Baby.com.br, Peek, SilverLining Systems

To those who have been dismissive of MBAs joining or founding startups, I hope this sheds some light on those people who made a name for themselves to the point that they aren’t defined by a degree – and I haven’t even touched on phenomenal investors like Bill Gurley (a CS major who went to UT’s McCombs), Fred Wilson (an engineer who went to Wharton), or Roelof Botha (who went to Stanford GSB before joining PayPal).

In the end, I go back to Ben’s post on hiring MBAs and agree with him that many are great fits at early stage tech companies provided they have the right kind of ambition – they just need to be given a chance. For those founders who are skeptical about MBAs, you may very well be passing on the next Tristan Walker, Hunter Walk, or Sheryl Sandberg. Evaluate the person’s skills, personality, drive, passion – not their degree.

The Paradox of The Long Tail

Creating content of all types has never been easier. An increasing number of people are becoming “creators”—it’s cheaper than ever to create something, there are more homes for distributing and discovering “long tail” content, and, perhaps most importantly, numerous tools are emerging to monetize this content. The paradox which arises is I think that the odds of long tail creators breaking through and becoming well-known are simultaneously significantly improving.

First, the cost of content creation has decreased dramatically over the last few years due to significant technological advances. Articles, such as this one from “Digital Trends” have cropped up showing how to make a DIY recording studio. Even prominent actor and director, Ed Burns has embraced this trend. He recently filmed a movie with a $9,000 budget—he used Twitter to crowdsource ideas and then shot it using a Canon 5D. And it premiered at the TriBeCa Film Festival. If a content creator is unable to finance his/her project, Kickstarter and Indiegogo have emerged to solve this problem (along with many others). Indie artist Amanda Palmer raised over $1.2 million this summer on Kickstarter to finance a forthcoming album and tour.

Not only is it cheaper and easier than ever to create content but there are also now more places than ever to showcase it. Behance and Dribbble provide online portfolios for photographers, illustrators, and designers to display their work. GitHub allows developers to share what they’re working on with peers or prospective employers. YouTube and Vimeo enable filmmakers, videographers, and anyone with a video camera to show off their talents (or lack thereof) from virtually anywhere. SoundCloud does for music (and sound in general) what YouTube did for video, giving a voice to anyone with a microphone or recording device. The very fact that these venues (and numerous others) exist implicitly encourage more and more people to create content because they know there is a public place for their work. Startups like Spotify can also push long tail content into mainstream consciousness. Indie artists know that Spotify provides them a forum to potentially build an audience and get discovered. For example, Foster The People “blew up on the service” according to Spotify’s CEO, Daniel Ek. This rise in prominence is partly due to the music streaming service but also likely due to the ability to share and distribute content so easily on Facebook and Twitter, the two avenues by which content is increasingly traveling up from the long tail to the head of the content spectrum. Quite simply, you don’t need to be on a busy street corner peddling a mixtape or in Central Park showing off your photography when these democratizing forces exist.

However, at the end of the day, for many of these creators, the aforementioned factors are of little consequence if they aren’t able to monetize their content easily. Increasingly, a larger number of companies are focusing on this democratization of content creation, as they seek to democratize content monetization. Chill has pivoted into letting creators sell their videos directly to fans. VHX has emerged as a way for creators to sell video content directly to their audience, as they began by working with Aziz Ansari to release his comedy special. Vimeo recently announced a Tip Jar and Pay-To-View videos as a way for creators to monetize their content, and YouTube has a Pay-Per-View option for those who live stream video. In the music world, Topspin and Bandcamp work with artists of varying import from mainstream to long tail to help them sell content directly to fans. And then there’s a whole swath of competitors that are trying to provide a simple, flexible tool to make selling content as simple and easy as sharing it. This group, led by Gumroad, includes numerous competitors / clones, such as Ameroad, Ribbon.co, Sellwire, Pulley, Quixly, TLJ.cc, EasyPay.jp, Stufflix, Fol.io, and Instamojo. All of these players fighting for content creators’ mindshare is great news for this new long tail, as they are receiving an unprecedented amount of attention and have an equally unprecedented amount of leverage.

Ultimately, I believe that this new long tail is different for a couple reasons. First, this long tail is getting even longer, as all of these tools provide never-before-seen support (and confidence, quite frankly) to many up-and-coming creators or those who may not have seriously pursued their talent. Second, and more interestingly, I strongly feel that this long tail is new because more and more of these creators will work their way up towards mainstream recognition because of these previously described products and services, particularly those that foster distribution and monetization.