Monthly Archives: May 2015

Joy’s Law

I recently came across Joy’s Law by Sun Microsystems co-founder Bill Joy.

“No matter who you are, most of the smartest people work for someone else.”

The consequence of Joy’s Law is the following.

“In any given sphere of activity most of the pertinent knowledge will reside outside the boundaries of any one organization, and the central challenge is to find ways to access that knowledge.”

This reminded me of what I believe is the second of the two most important attributes of successful VC’s.

The first is an ability to pick winners. This requires having insights about how technology will impact different markets or create new ones, and being able to identify the people that will make these changes happen.

The second attribute is helping your chosen winners achieve their goals. This is where Joy’s Law comes into play. Startups need to access the knowledge of the smartest people that work for someone else either directly, by hiring them, or indirectly, by partnering with them. A VC’s second role is to help make these hires and partnerships happen.

Fundraising on tech news websites

I saw the sponsored post below from Sporsonik on Webrazzi yesterday. Sporsonik is a sports nutrition content and e-commerce site looking to raise money. What’s interesting is that they’re using a tech news website to do so.

Screen Shot 2015-05-29 at 11.45.15 AM

I thought about why a startup would choose to advertise its funding round on a tech news website rather than by reaching out directly to investors. After all the latter is much more targeted and can be done for free. The most likely reasons I came up with are that the startup has already exhausted all of its top investor prospects or that it’s looking to differentiate its approach to attract attention.

The first isn’t a good sign. Regarding the second, they grabbed enough of my attention to write this post but not enough to try to learn more.

Hemenkiralik’s new round

Our investment Hemenkiralik recently announced that it has raised a new $2.5M round of funding. This is a very important round for the company as it deepens its strategic partnership with the world’s leading vacation rental company HomeAway through a $2M investment. Existing investor 212 also contributed to the round with a $0.5M investment.

Together with the new round, Hemenkiralik will expand its existing partnership with HomeAway which helps it attract foreign tourists to vacation rentals in Turkey. The company will also use the capital to expand abroad with a primary focus on serving the Middle East market.

The fact that HomeAway has chosen Hemenkiralik as its partner to expand in Turkey and the Middle East is a reflection of what the company’s founders Remi Onur, Rina Onur, Mehmet Ulku, and Alper Kaya have achieved so far, and the even greater potential that the company holds in the future. We’re fortunate to be part of the journey.

Meal Box franchisees

Meal Box is our investment in the food delivery space. Meal Box is building a great delivery-only business based on 3 pillars

1. Great tasting Turkish food

2. That’s also healthy

3. Delivered to your doorstep in under 30 minutes

The company is expanding very fast through a franchising strategy. While franchising growth results in lower short term margins than owning each delivery location, if you can grow fast enough your volume growth more than makes up for this shortfall.

Meal Box recently opened its 18th delivery location in Icerenkoy and will be growing to 40 locations by the end of the year. The company is actively looking for franchisees and you can view their franchisee presentation here.


The rise of on-demand services which send customers a driver, a meal, groceries, or pretty much anything else they want has produced a step-change increase in convenience for consumers. These services are effectively providing consumers with on-demand labor to perform a specific task.

Similar services providing on-demand labor for businesses have so far focused on tasks that can be completed remotely. Freelancer platforms let companies access developers, marketers, business students, and other on-demand labor sources who can work for them on a project basis. But what about work that requires an on-site physical presence?

E-commerce companies looking to staff their warehouse, supermarkets looking to staff their checkout counters, and hotels looking to staff their reception desk during times of peak demand still largely depend on staffing agencies. However, this no longer needs to be the case. Equipped with smartphones, individuals should be able to make their short-term on-site labor directly available to businesses.

This is exactly what our new investment Wonolo (short for Work Now Locally) does. Founded by AJ Brustein and Yong Kim, the platform has thousands of vetted workers available on-demand for the temporary staffing needs of companies. Current customers include Coca Cola, The Home Depot, and Zenefits.

Wonolo’s impressive traction since their December 2013 launch, combined with the attractiveness of a large unaddressed market, makes us optimistic about the company’s future.

Modanisa’s offline store

Modanisa opened its first offline retail store yesterday. It’s at 154 Alemdag Caddesi in Umraniye, Istanbul.

I think it’s important for clothing e-commerce startups that pass a certain threshold to complement their online presence with offline locations. First of all, it’s a way to attract new customers. It also helps increase online purchases by giving customers the opportunity to try on different types of clothing before they buy. Finally, it can also help with processing exchanges and returns more cost effectively than through cargo shipments.

On the flip side, offline retail requires a new skill set to operate. For example, it’s important to bring onboard the right store managers to ensure that the operation runs smoothly. These people are rarely found in the tech sector. It’s also very important to pick the right location for your store based on factors like its proximity to where your customer base lives and shops, its accessibility by public transport, and real estate costs.

I think that Modanisa is launching its offline retail presence at the right time for the company, and at the right location. If this first store is successful, new stores are likely to follow.

Here are some pictures of the new store from yesterday’s opening.

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Obvious questions

Each time I’m in a conversation, reviewing a presentation, or reading an email, and something obvious seems like it’s not being addressed, my initial reaction is to think that others must already know the answer. This must explain why no one is raising the issue.

I’ve discovered that a small fraction of the time this is indeed true and you simply weren’t there when the issue was being discussed. This could be that you weren’t physically at the meeting or that you had mentally checked out. The first suggests that others decided to meet without you and the second that you weren’t paying attention. Since both reflect badly on you, you think that it’s best to be quiet and not raise the issue.

However, a much larger fraction of the time, the reason why something obvious isn’t being addressed is either because no one wants to admit that they don’t know the answer, or because they know the answer but their self-interest benefits from concealing it.

In the first case, it’s beneficial to discuss the issue even though you may not arrive at an answer. Simply by laying out everyone’s views on the table and debating, you’re likely to make progress towards the solution by coming up with a framework to address the problem together with assumptions which need to be tested to arrive at the answer.

The second case is more dangerous. If someone knows the answer but prefers to conceal it, this is a strong signal that the information will impact your view about the problem to the detriment of the concealer. This makes it even more important to ask the obvious question.

Situations where something obvious isn’t addressed occur often when the parties involved have asymmetric information. This is why they take place frequently when entrepreneurs talk about their startup to VC’s.

If you’re a VC faced with this situation, you need to ask the obvious questions. Give the entrepreneur the benefit of the doubt that it’s a case where they don’t want to admit that they don’t know the answer, rather than a case where they’re concealing information. If you discover that they’re concealing information, you may want to give them a second chance. But if the same thing happens again, it’s best to walk away.

If you’re an entrepreneur and you find that you’re concealing information often, you probably want to question the merits of what you’re doing.

Mobile app development prices

TechCrunch recently published an article about mobile app development prices offered by app development agencies in different countries. The article was written by Ashwin Ramasamy, the founder of ContractIQ, a marketplace connecting companies with app development agencies.

As Ashwin points out, although there are significant differences across countries, the hourly rate charged by mobile app development agencies is pretty high compared to average wages no matter where you are in the world. The same is true in Turkey where good app development agencies charge upwards of 75 TL, or $29, per hour. Turkey lies in the middle of Eastern Europe and the Indian Subcontinent and this figure is pretty consistent with the hourly rates in these regions.

The reason for these high rates is that, together with the rise of mobile platforms, demand for app developers has significantly outpaced supply. Our startups face a chronic shortage of mobile developers. Since the sale and usage of smartphones shows no sign of slowing down, and since it takes a long time for knowledge-based labor markets to adjust supply, this gap between supply and demand will likely grow even wider in the future.

It’s a good time to be a mobile developer wherever you are in the world. If you’re a great mobile developer in Turkey and you want to work at one of our startups, you can apply here. And if you’re a technical student looking for a promising career, consider becoming an app developer.


I was speaking with the founder of one of our startups recently. We were discussing the terms of an investment offer which the startup received. The founder shared that for the second time in a row he had discussed a specific condition with the investor and stated that the condition was a deal breaker for the company. After their conversation, the investor shared their revised offer which, once again, contained the original version of the condition.

We were discussing how the founder should respond, and I recommended that he reply by reiterating that he wouldn’t be able to accept the condition. The founder had a different view. He said that he wasn’t going to reply. He had already stated twice that he wouldn’t be able to accept the condition, and he viewed the fact that the investor was ignoring his stance as a lack of respect. He therefore decided to be silent and not respond to the offer.

A few days later, the investor reached out to the founder again, stating that he would modify the original condition to reflect what the founder requested. Sometimes silence is the best answer.

Mobile local goods marketplaces

We believe that there’s a big opportunity for a mobile-first, and perhaps even mobile-only local goods marketplace in Turkey. Successful examples in the US include OfferUp and VarageSale. Both appear to be doing very well.

Mobile apps make it very easy to take photos of what you want to sell and to list these items. They also make it very easy for buyers to quickly browse a visually appealing set of photos and indicate interest in an item or complete a purchase with a single click. Finally, if the item in question isn’t suitable for cargo shipping, or needs to be seen before purchase, the location capability of mobile devices makes it possible for you to easily arrange offline meetups with buyers and sellers in your chosen geography.

We’ve been looking for a startup pursuing this model in Turkey for quite some time. Although there are a few players with apps available in the space, we want to see initial traction. We’re looking for at least a thousand users and listed items, and hundreds of transactions per month, independent of monetization. If you’re pursuing a startup that fits this profile, or you know someone who is, please reach out to us from our Contact page.