Some gems from @MacConwell of @RarebreedVC in Clubhouse right now:

Saturday thoughts on market pull. What is it? How is it different from Total Addressable Market (TAM)? And what ideas tend to have strong market pull?

A thread >>

1) First: "Market pull" != market size.

IMO (and most VCs will disagree!!), market size (TAM) doesn't *really* matter. But market pull DEFINITELY does. For that reason, I've almost never asked a startup about TAM.

Why?

2) First, what is TAM?

TAM is a sizing of how big your market is. A good way to estimate this is - if you can get to all potential buyers and based on how much $$ they are worth to you, how much money can your company make if you took the whole mkt?

3) An example: Say we run an e-commerce site that sells hippo food. TAM in the world:

-1000 zoos have on average 3 hippos = 3000 hippos.
-Each hippo eats $100 worth of food each day
-365 days * $100 * 3000 hippos = $110m per year globally

4) But, we'll come back to this.

Why I don't like TAM - it doesn't take into acct a few things:

A) how hard it is to get customers
B) how much more you can upsell once you have customers
C) how fast the mkt is moving up or down

A thread on employee equity in early stage startups -- what are the compensation norms? What every early employee should ask? Some thoughts on whether the structure is fair.

Read on >>

1) First, there are NO NORMS! Hah. I have literally seen everything from giving early employees no equity to giving employee #1s near co-founder level of shares.

But what is more common than not?

2) In the Silicon Valley, if you're hiring your 1st employee, & you've raised NO $$ & are paying very little (e.g $0-$10k / yr or thereabouts), your first employee is basically a co-founder.

And the equity tranche for employee 1 should be closer to a co-founder level.

3) For ex, a friend of mine gave his employee #1 10% (vesting over 4 yrs of course) of the business. This employee was only getting his housing paid for. And this was 10 yrs ago, so it was during the bust.

4) On the flip side, if you have raised some $$ & are paying employee #1 near mkt rate, typically I see around here ppl get 1-5% (w/ vesting).

Caveat - near mkt rate doesn't mean compared to Google or FB salary rates. I mean compared to "normal big cos"

Saturday thoughts on funding: Where it helps. Where it doesn't. And how it affects team, success, and PM fit.

This is just my $0.02 after looking reviewing 30k+ early stage startups personally and having led 350+ investments across 2 VC firms & as an angel.

Let's begin! >>

1) Money is great to have in building a startup (for the least dilution and pain possible) That's true and always will be true. 😆

But just like how money can't buy you happiness, it also can't buy you PM fit.

2) PM fit is the holy grail for software startups. (we're not talking biotech - if you have a cure to cancer, I guarantee you everyone wants it).

But for software startups, it's unclear if ppl want your product at your price pt.

3) If you don't find PM fit, in this day and age, you will be able to get some sales. Maybe even say $1m in sales (or more!) per year, and you can still make a living.

But having sales does not mean that you have a repeatable customer acquisition process that can be sustainable

4) As an aside, that is why we invest at pre-seed & don't care about startup traction, because I don't believe traction at the earliest stages suggest PM fit. Traction only shows that a founder can execute (& that's impt too) but there are other ways to assess execution earlier.

Last week, I wrote a thread about generating momentum for startups.

Today's thread is on how emerging fund managers can generate momentum for their fund.

Whatever you do, momentum is so impt to get ppl onboard -- for hiring, for sales, for fundraising.

Read on >>

1) First, why does momentum matter?

Think about it from the "buyer's perspective" -- it is almost ALWAYS better to wait and get more information if you can get the same deal. Right?

More info on a potential investment. More info on a new product. Etc.

2) There are few situations where it's impt to be a first mover.

If you're a product buyer, it could be you have a dire situation at your company that alternatives can't handle.

But if you have a decent alternative (alternative product or alt investment), it's better to wait.

3) That means it's YOUR JOB to create momentum. Whether for fundraising, sales, or hiring.

So with that in mind, how do you generate momentum for fund fundraising?

4) In a prior tweet about generating momentum for startup fundraising, essentially I said to limit your supply (the amnt you are raising) in tranches AND to increase demand by packing in mtgs.

Unfort this doesn't quite work well for funds.

Today's thread is a continuation on *how* you generate momentum in fundraising.

Here's a rough conversation I had with a founder (called 'C') over the course of days a few months back.

Read on >>

1) C: I'm having trouble raising. VC A and VC B are taking so long to get back to me.

Me: Oh, when did you meet w/ them?

C: 3 weeks ago.

2) Me: Oh, are you mtg w/ anyone else?

C: No, I got busy working. I had all these sales calls to make.

Me: That's the problem - there isn't a reason for them to move quickly. There's no investor at the table.

3) C: But I have all these sales calls to make!

Me: I really don't have a great answer for you here. This is probably the hardest part about fundraising - juggling your actual job w/ your fundraising job, which is full-time too.

4) Me: You need to hand off your sales calls to your co-founder. And then you can do mtgs back to back.

C: Ok...

[some time passes]

C: Ok - I'm ready.

Me: How much do you want to raise and what are you using the money for?

In my quest to write a fast IPv4+6 parser, I have written a slow-but-I-think-correct parser, to use as a base of comparison.

In doing so, I have discovered more cursed IP address representations that I was previously unaware of.

A thread!

We start out simple, with IPv4 and IPv6 in what I'll call their "canonical form":

192.168.0.1
1:2:3:4:5:6:7:8

Various specs call these "dotted quad", dot-separated fields each representing 1 byte; and "colon-hex", colon-separated fields each representing 2 bytes.

The first bits of complexity come from IPv6. In canonical form, common addresses would end up with long runs of zeros in the middle. So, "::" allows you to elide 1 or more 16-bit blocks of zeros:

1:2::3:4 means 1:2:0:0:0:0:3:4

Next up, for cursed historical reasons, IPv6 permits you to write the final 32 bits of the address in dotted quad form. Effectively, you can splat an IPv4 address onto the end of IPv6 addresses!

1:2:3:4:5:6:77.77.88.88 means 1:2:3:4:5:6:7777:8888

And of course, you can combine the two!

fe80::1.2.3.4 means fe80:0:0:0:0:0:102:304

Yoga employs more Americans than coal. But compare and contrast 1/2

and 2/2

I think many of us carry in our minds an image of the US economy that looks like this

when the reality is this

and this

I'll touch upon few different types of cyber frauds and few possible ways in which we can avoid ourselves to be duped of money, time & energy.

Will also attach few real registered FIRs showing that most of the times such crimes happen with educated & learned people.

1/16

Cyber Fraud type 1 - Facebook/Instagram

Profile cloning -Fraudster will make exact same profile like yours - using pictures from your own profile. They will then message to your contacts asking for money immediately for the surgery of mother or similar emotional lie

2/16

Always verify before sending money.
Don't verify by calling that person, instead, call a common friend or family member of that person. Don't think you can't be fooled - I know at least 20 people working in Top IT MNCs becoming victim of this fraud. Lock your FB/Insta.

3/16

Cyber Fraud type 2 -OLX/Quikr
This generally happens while selling something on OLX/Quikr & similar platforms. In such cases, people will fraud in the name of paying money by asking to scan the QR code or click a link.
NEVER scan the QR code to receive money, give your UPI

4/16

Cyber Fraud type 3 - Fake SMS & Call from unknown numbers
Fraudster will send fake SMS showing amount credited to the account - with correct account number in SMS. Then they will call from unknown numbers asking for money.

ALWAYS check your bank account first via bank app.

5/16

Today WhatsApp wished it's users good morning. Accept the updated terms and conditions or say goodbye. (Thread 1/n) It is effective from Feb 8, 2021.

There are seperate hyperlinks for terms and privacy policies. Both these hyperlinks lead to multiple pages of contracts written in a very jargonised language. A few things I noted :

The information 'we' provide to #WhatsApp include our messages. Also WhatsApp claims that it is end to end encrypted BUT,

BUT if your friend / enemy / boyfriend / family or anyone is offline and your message sent to him cannot be delivered #immediately, it will be saved on #WhatsApp servers for 30 days.

Also: When you forward media msg in #WhatsApp that media is stored temporarily in encrypted form on it's servers to aid in more efficient delivery of additional forwards. Tada! (Consider a thousand times before sending any images; news anchors can officially read your chats.)