What I Learned Negotiating With Steve Jobs


Fresh out of Stanford Business School, I started a software company, T/Maker, with my brother Peter. He was the software architect and I was, well, everything else. Our little company was among the first to ship software for the Macintosh, and we developed a positive reputation among the members…

Negotiating w Steve Jobs

Introducing Conversations

We first invested into Conversocial in 2011 and the company has more than doubled their revenue each year since we invested. They are now starting to grow at an exponential rate due to a number of initiatives led by their young CEO Josh March. These include opening their first US office in NYC last year, spending a lot of time nailing sales execution and acceleration, and continuing to listen to their 150+ enterprise customers on continuing to develop the best platform for customer service.

As a result of putting the customer first and listening to their needs, its exciting that they recently launched their latest feature called ‘Conversations’. Conversations enables enterprise’s to manage social media based customer inquiries directly from the contact center. This empowers businesses to elevate social media from a marketing tool to a strategic business operation owned by the customer service department. This workflow threads together related customer interactions from different channels and allows large scale customer service teams to see the complete picture of an outstanding customer service issue. It makes it easier and much faster for the agent to resolve a particular query which in turn, satisfies their own customer.

There has been a shift in social customer service away from traditional marketing and into the contact center over the last 6-12 months and Conversocial has dedicated a lot of resources to educating large enterprise customers on how to handle the transition from on-premise software used to track emails and calls to their cloud based offering.

Over the next few months they have a few more major features that they will be releasing that will make their large enterprise customers and new potential customers even more able to handle the number of customer service issues at scale. You can read more about Conversations here.

Backing Campanja to Continue their Global Expansion

For years, advertisers have used Google to drive traffic to their websites and sought to convert that traffic by getting customers to purchase a product or service. Several companies grew along alongside Google (as well as Baidu, Yandex etc) allowing advertisers to access more granular data to understand their value per click.

During the summer of 2010, Google made it possible to do API calls without a transaction fee on Adwords. That move was the genesis of Campanja, a Swedish based adtech startup. They built a system for advertisers to be “real time” from the ground up, enabling profit optimisation based on real time dynamics, second by second, something that was not possible with companies who built their systems on SQL databases. It changed even further last year when Google introduced “Enhanced” campaigns which made it possible to optimise for location, time and by device.

So how do marketers actually benefit from Campanja? The technology allows them to identify the value of an individual visitor and use this information to purchase search engine advertising on Google Adwords, on a high-frequency, real-time basis. Campanja’s product gathers data from other sources and makes an instant ROI analysis to apply changes to the auction process to optimise ad spending. This is technically very demanding and Campanja refers to this as “adding business intelligence to search engine marketing” (SEM). Campanja can demonstrably make smarter bidding decisions, enabling advertisers to increase their performance. In short, Campanja has the most superior SEM bid management product on the market.

This is a really big deal because Campanja is allowing very large companies with monstrous marketing budgets to both save money and increase their revenues. That is why we’re pleased to announce that we are backing the Campanja team alongside Hoxton Ventures, Google seed investor Ram Shriram and David Axmark, co-founder of MySQL in a $5m funding round.

Campanja is another European-to-US success story. Co-founders Marcus Anzengruber and Berner Setterwall, (CEO and CTO) have built up one the strongest technical teams we have ever seen in Europe and their determination to keep investing in hardcore research and development is one of the attributes that makes us believe that their product is going to shift the advertising industry into the next generation. And some of their largest US and European customers agree.

Personally, I am just as excited to be investing alongside Hoxton Ventures, who first invested into Campanja in 2012 and have been instrumental in supporting the company’s ambitious growth strategy (Hoxton is the latest early stage fund to launch in London by Rob Kniaz and Hussein Kanji). This round will help Campanja continue to build out teams in Palo Alto, London and Stockholm and continue to hire some of the best talent in the industry.

Global online advertising is currently a $100B-per-year industry that has enabled around $1 trillion in market capitalization (both public and private companies), half of which sits with Google and Facebook. The space is growing at around a 20%-25% CAGR and has around 1 billion users, mostly PC based. The $100B in ad spend facilitates around $1 trillion in global transaction GMV across all categories of retail, travel, consumer internet services. This solid and established ecosystem is on the brink of a major platform transition as consumers shift their behavior from PC to mobile (smartphone and tablet). With any technology shift, we expect new entrants to challenge incumbents, new gatekeepers to emerge and significant economic value to shift.
Deutsche Bank Securities

Keep it SaaSy Berlin

I’ve been going to Berlin for nearly 4 years now scouting for new deals and I’ve just returned from my latest trip. Normally, out of 10 meetings, 9 would be with consumer internet companies. This time around, 80% of the companies I met were SaaS / big data / security products. The other interesting trend was that the vast majority of the new founders that I met at one point in time were working for Rocket Internet.

I’m probably one of the only people in the tech industry who thinks that Rocket has been a positive thing for our industry - not only for the people that live in emerging markets who now have better access to more products online, but for the thousands of people that they have trained to work at internet businesses.

A lot of people learn by imitation. Copying a business model that has already proven to move beyond the product market fit stage into the growth phase may be unethical by some people’s standards, but it certainly has trained hundreds of people how to acquire customers, scale their operations, hire talent, build systems that can scale etc. I won’t get into whether or not the Rocket model is sustainable, but one thing is for sure, the majority of the people that work for Rocket-backed companies are not incentivised to stick around for the long-term (I also won’t make claim on why).

This has been great for the Berlin tech scene. It’s full of highly-skilled international workers, has a great internal infrastructure, is well connected to other major European cities and has a growing VC supply base which is growing in-line with the demand for VC. I’m glad to see Berlin is getting stronger as an ecosystem which means that the whole of the European tech ecosystem will also continue to flourish.

SportPursuit Takes Gold

Most founders of growth stage companies spend at least a little of their time on weekends catching up on sleep. Not the founders of one of my favorite ecommerce sites in Europe. The founders at SportPursuit cycle from Paris to London, hike up Britain’s most challenging peaks and are generally seeking adventure in the outdoors. These adrenaline junkies, who used to advise some of Europe’s most iconic brands in their previous jobs, have also built one of Europe’s fastest growing ecommerce sites. Today I’m pleased to announced that we have led a £5m growth round into SportPursuit, which is the UK’s leading ecommerce site for sports-men and women.

The round was led by DFJ Esprit and saw participation from numerous UK based angels including Will Reeve (co-founder of LoveFilm - a former DFJ Esprit-backed company), Alex Saint (CEO of SecretEscapes) and Alex Chesterman (CEO of Zoopla) and Silicon Valley Bank.

Adam, Victoria, Rhys, Luke, Bryn, Steve and the whole SportPursuit team, which is currently based in Clapham, London, have driven the company’s momentous growth since we invested back in 2012. With nearly a million customers, hundreds of the world’s top sporting brands and customers from all over Europe and Australia, we are excited about this next phase of growth for the company. 

We initially backed SportPursuit because like so many other retail verticals, the sport apparel and kit industry is so highly fragmented, both off-line and online, that we bought into the vision that they would create a one-stop shop for sports-men and women who were fanatical about buying the world’s best sport brands. It is possible to build very large ecommerce companies serving the European market which has more affluent shoppers online than the whole of the US market. Europe is just as large as the US population-wise and it is possible to serve other markets such as Australia (which SportPursuit launched last year and has had great early success).

When we invested, the company was only months into having a functional website, had just tens of thousands in revenue per month, but it already had an incredibly ‘sticky’ user base who kept coming back to access stock from some of the best brands across Europe that are either hard to find or not selling anywhere else in the UK. It’s been a fun journey working closely with the management team as they have grown the company from eight employees when we invested to around 50 today.

Here’s to another year of mega-growth and serving even more customer journeys in 2014 in the UK and beyond.

…I realized the world of business really separates into…two groups. The attackers are the entrepreneurs who are disrupting the status quo, trying to change the world, take the hill, anything is possible, and have nothing to lose in most cases. They’re driven by passion and the idea and intensity. Large organizations — and it’s true of Fortune 500s and it’s also true of governments and other large organizations — are defenders. These guys aren’t trying to pursue the art of the possible, how to maximize opportunity. They actually are trying to minimize the downside, and hedge risk. They’re trying to de-risk situations. Entrepreneurs can’t even think this way. It’s not even a concept they understand.

this is very true and is the reason my business is such a good one

Steve Case (quoted by Adam Bryant in There Are Only Two Kinds of Companies. Which One is Yours?)


Landscape of the bitcoin industry.


Landscape of the bitcoin industry.

Killer Questions for SaaS Companies

Every startup needs a list of killer questions that they can pose to new customers. They need them because it turns their potential customer away from one or all of their competitors. If you already have a small sales team that is effectively closing deals then you may have already figured this out. If you’re just starting to get some traction on the sales front, then this is something you need to be prepared to do to win deals.

Killer questions are the main attacks or criticisms that you can pull out of a bag if necessary when speaking with potential customers. Sometimes you will slip these in if you are on the offensive, like in cases where they have told you that they are also trialling competing products. Other times you will use these from a defensive standpoint. But the main objective is to raise uncertainty and fear in the mind of the buyer about your competitors abilities. Its often during these discussions when you will tease out the one or two core features that your product needs to be able to solve and then you use this to your advantage.

Best case scenario, if your product is superior and you know that your customer is speaking with your competitor - then give the customer a killer question to ask your competitor about a specific feature.

Here’s how it can work.

Startup: “Hey John, just following-up as you told me to call you this week once you had a chance to speak with your CMO. How was your discussion?”

Customer: “It went well but he’s now wanting to bring in [biggest competitor in the world as well as the 2nd biggest who we heard was days away from going out of business] to pitch for the business.”

Startup: “Cool, we’ve just brought on another customer that was looking at those exact same products and they’ve been really happy so far with ours. You told me that real-time updating is an absolute must-have for you guys, is that right?

Customer: “Absolutely, you have no idea how big of a pain this is right now.”

Startup: “Awesome, well ask [insert competitor 1] about their real-time capabilities and let me know what they tell you. Also, ask them when they will be releasing their API as you told me that was also important to you guys, wasn’t it?”

Customer: “Yeah absolutely, but hold on what have you heard about [competitor 1]?”

Startup: “Well I know that they don’t have the same real-time capabilities as we do which is evidenced by the fact that we have only lost to them once in the last 6 months. But you should ask them yourself as they may have had a product release recently (knowing full well that they haven’t) and then get back to me when you’re ready to make a decision. Sound good?”

Boom. You need to be confident and know for a fact that your product is superior to your competitors because of x, y and z and not be afraid to use this when you’re trying to close a deal.

Startup Sales: Trend Analysis for European SaaS Companies

So you’ve hit product market fit, you’re generating inbound leads to your product, you’re starting to realize that your 25 year old Harvard MBA intern doesn’t know how to close deals, but you have some semblance of a process to get deals over the line (legals, invoiced and collecting cash). You then raise a Series A and decide to hire a VP Sales to scale your sales ops. Six months later you still don’t understand why you don’t have a regular and measurable sales cycle, your board is starting to breath down your neck to see granular sales data from Salesforce, sales is blaming marketing for lack of leads, marketing is blaming product and product is blaming sales.

This is one of the most common pitfalls we see in B2B startups. I would argue that once you have closed you first 20 or 25 customers you should start measuring your sales data very closely. The most basic chart that you can create is measuring trend analysis.This trend analysis, for whatever reason (possibly founder cognitive bias of a market that he thinks he should be serving) is not entirely obvious to build in the first place.

I would start with the market segments or verticals on the left hand side. For example, retail, banking, services, ecommerce. Then on the top, put the country - UK, Ireland, Germany, US etc. Then create three cells for each pairing and put in the number of existing customers, the average contract value, and then the number of targets that your have currently in your pipeline that you are actively engaged with. 

It’s amazing when we do this analysis with startups how clear it is which markets they should be going after in the short term. If you think that you should be serving enterprise customers in the banking sector in London but for some reason you only have one existing customer that fits that profile and you have 19 SME’s in the retail sector out of Germany, then you should probably be focusing your attention on the market of customers that are most likely trying to find your product.

This basic trend analysis doesn’t take into account things like, who is the ultimate decision maker, what is the process of getting this signed off by procurement, who are we competing with? You will figure these items out when you start scaling up your sales team and start doing win/loss analysis’ every week.

For the time being, make sure you understand who is getting the most value out of your product and where to go after the low hanging fruit to continue getting market validation.