Monthly Archives: January 2016

Steve Jurvetson from DFJ

Steve Jurvetson is a VC at Draper Fisher Jurvetson (DFJ). His investments include Hotmail, Tesla, and SpaceX.

In the video below from This Week in Startups, Jason Calacanis interviews Steve on a range of topics including his current investments in Tesla and SpaceX, his time working with Steve Jobs at NeXT, and the future of biotech.

Two very interesting parts of the interview are when Steve reveals that he never sells the shares of the companies he invests in (unless the company is bought by another, as in the case of when Microsoft purchased Hotmail), and that he doesn’t use lawyers when performing Series A investments. He simply reads the term sheet and trusts that the entrepreneur will reflect the clauses of the term sheet in the Shareholders’ Agreement.

Not selling shares of the companies you invest in is a great way for an investor to align their interests with those of entrepreneurs. However, if you’re investing through a fund, it requires that you be under no pressure to return capital to your LP’s. And if you’re investing your personal wealth, it requires that you have no personal liquidity requirements. I don’t know which is the case for Steve but both are great positions to be in.

Steve has two reasons for not using lawyers to make Series A investments. The first is that the investments are a small enough percentage of the total amount he invests that he doesn’t need to protect himself against the downside. The second is that, if an investor is going to be burned by an entrepreneur, it’s better to be burned when the stakes are small rather than after you’ve invested more money in the company in the future. Although this approach won’t work for small funds where investments at the Series A and earlier stages account for a majority of the fund’s investments, it may make sense for large late stage funds which allocate a small fraction of their assets to earlier stages.

You can watch the full interview with Steve below.

Hasan at Kolektif House

A few weeks ago, Hasan participated in a talk at co-working space Kolektif House. Here are some of the topics covered in the talk:

  1. Hasan’s thoughts on his ventures Tazedirekt and Webnak, and our investment Kapgel
  2. Why he believes that companies with global ambitions need to locate in advanced startup hubs like Silicon Valley
  3. Our current focus on supporting our existing portfolio companies
  4. His belief that the biggest risk in startup investing isn’t an investment that goes bust but passing on an investment in a great company

You can watch the 30 minute video in Turkish below.

Paying to meet investors

I was recently invited to join a startup pitching event where entrepreneurs need to pay a fee to present to investors. Basically, the event organizers claim that they offer entrepreneurs access to investors who they otherwise wouldn’t have access to, and use this theory to justify extracting a fee from the entrepreneurs.

Entrepreneurs, don’t fall for such events. The way to get in front of investors is to work hard, show that you can build a big business by demonstrating some traction or at least a prototype, and be resourceful in your approach.

Investors want to meet great entrepreneurs. In fact, our success depends on it. If an investor charges to meet entrepreneurs, they’re unlikely to meet the best ones. This will prevent them from backing the best companies necessary to be a great investor. So great investors won’t charge you to meet them.

The corollary is that investors who do charge to meet entrepreneurs aren’t great. And the entrepreneurs who accept to pay to meet these investors are also very unlikely to be great.

Our share of Turkish startup investments

We recently reviewed our direct investment amounts in Turkish startups since making our first investment 3 years ago. We invested $32.8M in 2013, $10.9M in 2014, and $17.0M in 2015, for a total of $60.7M. These figures don’t include our investments in Turkish funds and our US investments.

During these 3 years, Turkish startups received a total of $144.4M in funding. This figure is thanks to Serkan Unsal from This means that we invested 42% of the total.

When looked at this way, this isn’t good news. A healthy ecosystem requires more diversified sources of capital.

However, looking at the data on an annual basis tells a different story. Of the $144.4M total, $57.6M was invested in 2013, $31.1M in 2014, and $55.7M in 2015. So our share of the total investment amount dropped from 57% in 2013 to 35% in 2014 to 31% in 2015.

The fact that 31% of the capital invested in a country’s startups comes from a single source still isn’t healthy. Ideally, we’d like even less concentration.

However, the evolution of this figure since 2013 is in the right direction. It shows that other investors are increasingly investing in Turkish startups. And this is great news.

What inbound interest from a large company really means

Our startups regularly receive inbound interest from large companies. Sometimes this interest is genuine and the large company is really looking to partner with, invest in, or acquire the startup. However, most of the time it’s not.

Most of the time, the large company is simply looking to get the startup’s data to identify new market opportunities for themselves, protect themselves against the startup potentially entering their space, or see if they can acquire the employees and assets of a startup that’s nearing the end of its runway for a bargain. Since most founders are getting inbound interest from a large company for the first time, and since this is flattering, they mistake these motivations for genuine interest.

This post by Brenden Mulligan of LaunchKit does a great job of translating the different forms of inbound interest that startups get from large companies into what they really mean. Reading Brenden’s translations and following his recommendations can save you a lot of time when responding to inbound interest from a large company.

Tracking phone leads

Dugun, where we’re investors, is an online wedding marketplace connecting couples with the full range of merchants they need during their wedding planning process. These include wedding venues, organizers, and photographers.

Until recently, Dugun used to connect couples and merchants through the use of a text-based online form. Once the couple discovered a merchant that they’re interested in on Dugun, they would fill out a text-based form to get in touch with the merchant.

While text is a means of communication, it isn’t the only one. Many people prefer to speak over the phone rather than through text. This is especially the case for a couple’s interactions with merchants during their wedding planning process. Most couples are going through this process for the first time and therefore have a lot of questions. Speaking over the phone is the fastest way to get answers.

Since Dugun relies on merchants for most of its revenue, it’s important that Dugun be able to track the leads it is sending to merchants. If Dugun were to display a merchant’s phone number on its website, it wouldn’t be able to track these leads. In the past, it therefore wasn’t showing merchants’ phone numbers on its website. While some couples who would have preferred to place a call chose to fill out the form instead, our hypothesis was that most couples simply typed the merchant’s name into a search engine to find the merchant’s phone number on its own website. When this happened, although the couple actually discovered the merchant on Dugun, Dugun and the merchant didn’t know this.

So Dugun recently launched its own set of merchant-specific phone numbers. In addition to a text-based form, Dugun now lists a phone number for each of its merchants. You can see an example below.

Screen Shot 2016-01-19 at 10.03.38 AM

If a couple calls this number, the call is routed through Dugun’s call center to the merchant. This lets Dugun keep track of the phone leads that it sends to merchants, while not losing these leads to a merchant’s own website. The result is that Dugun delivers more value to merchants, and is also able to show the value that it is delivering.

If you operate a marketplace where the ultimate transaction takes place offline, it isn’t always possible to monitor the transaction’s completion. Monitoring the leads you send to suppliers is the next best option. And if users are used to interacting with suppliers over the phone, routing calls to them through your call center is a great way to accommodate this user preference while retaining your ability to track the leads you’re sending.

Gut feeling

I took a course called Data and Decisions in Business School. The course covered many areas like probability, statistics, and regression analysis. I’ve always enjoyed math and I did well in the course.

As the name of the course suggests, its goal is to get you to make decisions based on data. The opposite of this is making decisions based on intuition, or gut feeling.

After leaving business school, I soon discovered the limits of data-based decision making. Specifically, I discovered that the more important the question you’re trying to answer, the less likely you’ll be able to arrive at that answer using just data. Startups serve many great examples.

When a startup is building its product, it’s pretty straightforward to A/B test different versions of the product to see which one creates a better experience for users. By showing different versions of the product to randomly selected groups of users, you can see which version produces the best results for the metric(s) that you’re looking to optimize.

However, when a startup is deciding how to position itself in a market, the answer is a lot less clear. For example, our startup Mobilotoservis (“mobile auto service” in Turkish) is currently a car repair and maintenance service that sends a mechanic to your home or office to perform the service. Customers don’t need to go to the service location and this saves them a lot of time. However, in its former life, Mobilotoservis was called Ottopot and it was a marketplace that connected car owners with existing mechanics.

What makes more sense, an asset light marketplace that connects existing supply and demand, or an asset heavy mechanic that offers a premium service? Data won’t get you very far in making that decision. The company chose to pursue the former because it was more capital efficient, but discovered that most customers are unhappy with the service offered by their existing mechanic and instead want a premium service.

How to position yourself in a market is a more important question than which product version you should select for your next iteration. As this example shows, the more important the question, the more you need to rely on your gut feeling to make the decision.

This doesn’t mean that you shouldn’t look at the data. In fact, data helps inform your gut feeling. The more relevant data you look at, the more likely your gut feeling is to be correct.

However, in the end, most important decisions boil down to your gut feeling. So it’s important that you be comfortable identifying it, deciding based on it, and trusting it.

Facebook Sports Stadium

Facebook recently launched Sports Stadium in the US. It basically aggregates content posted by users on Facebook together with content off of Facebook to offer users a second screen experience around sporting events. The launch is taking place with American football and it will be expanded to other sports soon.

Most people following a sports game currently use Twitter as their second screen. In order to improve this second screen experience which used to only be delivered in chronological order, Twitter released Moments last year. Moments curates the best content on Twitter irrespective of the time when it was posted and delivers it to users. Sports is just one of the verticals Moments serves, but given how frequently people use their smartphone while following sports games, it’s a very important one.

Facebook currently doesn’t have as many users posting about sporting events on its platform as Twitter does. However, its Sports Stadium launch includes a lot of important off-platform content, like live scores, stats, and a play-by-play, that’s currently missing from Twitter’s Moments. This could help it attract users who then start to post more about sports games on Facebook.

Establishing partnerships to secure off-platform content like live scores and stats is much easier than getting users to post content on your platform. So Twitter currently has the content that’s difficult to replicate, while Facebook has the commoditized content. However, users want both at the same place. I don’t want to check the basketball game’s score and play-by-play on while following the banter around the game on Moments. Unfortunately, Moments has so far failed to deliver this seemingly easy to secure off-platform content. And Facebook is looking to seize this opportunity.


Louis C.K.

Louis C.K. is one of my favorite comedians, and this is one of my favorite Louis C.K. performances.

I’ve watched it many times and it cracks me up every time.

It also helps set things in perspective. We can’t change everything. If we’re fortunate enough to have an impact on people through what we do, we need to choose where to focus our limited time and efforts. For everything else, all we can do is laugh at how funny things are.


How to choose a job as a recent graduate

Earlier this week, I spoke with a student who recently completed his graduate degree. We spoke about his career plans in general and what his first post-graduate degree job should be in particular.

Rather than evaluate specific options, I shared a framework for how he could think about his alternatives. The same framework is valid for recent undergraduates.

Specifically, I think that there are four factors which matter when choosing a job. These are what you’re doing, who you’re working with, what you learn from the work, and how much you’re paid.

If you know what you want to be doing, the first factor is the most important. Unfortunately, most recent graduates don’t have a lot of work experience so it’s unlikely that they can accurately assess what they want to be doing.

Of the other factors, the easiest to measure is how much you’re paid. Because it’s easy to measure, it’s also easy to compare across jobs and across your friends. Therefore many recent graduates use it as the most important factor in their job selection. I made the same mistake.

Although they’re more difficult to measure, who you’re working with and what you learn from your work are much more important. Even if you work just 40 hours a week, this is at least a third of your waking hours. So who you work with during these 40 hours matters. The people you work with can be the difference between whether you live a happy or an unhappy life.

And the younger you are, the greater the importance of what you learn from your work. At a young age, you’ll get more from investing your time to acquire new skills that you can successfully monetize later than you’ll get from poorly monetizing your existing limited skill set at present. So it makes sense to work in an environment where you’ll be challenged, learn a lot of functional skills, and grow as a person.

The bottom line is that if you’re a recent graduate who knows what they want to be doing, you should go out and find a way to make it happen. If you don’t know, you should choose your job based on who you’ll be working with and how much you’ll learn. If you do, the pay will eventually take care of itself.