Monthly Archives: September 2016

Thankful for being alive

Some days, you just feel thankful for being alive. Today is one of those days.

The difference between being alive and not is so great that anything you add on top of being alive is small in comparison. Being alive and able to feel, think, and move, is like the cake. All that you do on top, like the people you meet and the goals you achieve, are simply the cherries on the cake. The cake is the 99%, the cherries are the 1%.

The cherries sometimes come, and sometimes they go.

Remembering how fortunate you are to, even if for this short period of time, have the cake feels great.

Trustworthy, hands-off venture capital

I recently came across “The VC-CEO Brand Gap” chart in this study on the role of brand in venture capital. The chart shows the attributes which startup CEO’s seek in venture capital firms, and those which venture capitalists emphasize when trying to convince startups to take their money.

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The biggest gaps in what entrepreneurs really want and what venture capitalists think they want are in the areas of trustworthiness and hands-on input. Specifically, entrepreneurs want trustworthy investors a lot more than investors think they do, and they want hands-on investors a lot less than investors like to think.

When I first started investing, I also thought that I could deliver the greatest value to our startups by being hands-on. I wrote them lengthy emails about the strengths and weaknesses of specific product features, shared articles about what their competitors were doing, and constantly thought about people I could introduce them to. Even though I was performing each of these activities with positive intentions, after several years of pursuing this hands-on approach, I discovered that my efforts didn’t help our startups.

The startups with great founders who ultimately became successful were already aware of the product changes they needed to make, were informed about what their competition was doing even before an article was released, and proactively reached out to me when they wanted me to introduce them to someone. In other words, my proactive inputs in these areas weren’t valuable to the founders. In some cases these uncalled for interventions even created additional unnecessary work and stress for them.

A byproduct of my hands-on approach was that I invested in several companies where I didn’t have a very strong initial conviction because I falsely believed that I could fix the company’s shortcomings after making the investment. In other words, my hands-on approach was not only not benefiting the startup, it was also harming the quality of my investment decisions.

With experience, I’ve learned that the entrepreneurs in The VC-CEO Brand Gap study are correct. A hands-on approach by investors harms both startups and investors. What the best entrepreneurs need is not hands-on involvement but a trustworthy relationship. This means two things.

First, investors need to trust that the entrepreneurs they invest in will work hard and make the right decisions on daily activities like developing specific product features and being aware of their competitive environment. This approach not only enhances the productivity of the entrepreneur, but also improves the quality of a VC’s investment decision making.

Second, entrepreneurs need to trust that their investors will be transparent and fair in their interactions with the entrepreneur. This doesn’t mean that investors will always agree with what the entrepreneur thinks, or that they will always act according to the entrepreneur’s wishes. However, they must always be upfront in sharing their thoughts and the underlying reasons behind their actions with the entrepreneur. Examples of such trustworthy behavior include following up on commitments to engage potential employees, investors, business partners, and acquirers, clearly communicating what performance targets the investor needs to see in order to make a follow-on investment in the company, and not harming the company’s chances of finding funding elsewhere if the investor decides not to invest in the company’s next round.

By replacing the effort which I used to dedicate to pursuing a hands-on approach to the daily activities of our startups with a new focus on building trustworthy long-term relationships with our entrepreneurs, I’m now able to contribute far more to the success of our startups than I was contributing in the past. The better investment decisions which result from this approach are also a valuable bonus.

Repeating actions

Everything that you do has repercussions. Depending on the action, your action impacts you, those around you, and perhaps society at large. It’s therefore important to act in a way that produces the best overall outcome given the relative weight that you assign to a particular action’s impact on each of these groups of people.

The complication is that, because of factors beyond our control, the same action will produce different repercussions at different points in time. This is what’s known as luck.

As a result of the presence of luck, it’s tempting to act in a way that overlooks some of the repercussions that you would normally expect from a given action. What if this is the one time where the repercussions you’d normally expect don’t happen, or happen slightly differently?

One way that I find particularly effective to avoid the temptation presented by one-off thinking is to ask what would happen if I repeated a particular action over and over again. This approach helps you drown out the noise created by “what if” thinking to focus solely on the expected outcome.

Once you have the expected outcome of a particular action crystallized in your mind, you might still decide to take your chances on the “what if” outcome. That’s part of being human.

But if you do, you’ll do so with the knowledge of what you’re doing. As a result, you won’t be confused if you don’t like the outcome. And that makes all the difference.

Mistakes and learnings

I was recently working on the investor presentation of one of our startups together with the startup’s founder. The company is currently back on its growth track but experienced a few turbulent months earlier in the year when revenue fell short of our expectations. We correctly identified the problems behind the months of lower performance and have applied or are currently in the process of applying remedies to each problem.

During our conversation, our founder asked whether we should explicitly highlight the months of lower performance in the presentation. The founder was concerned that highlighting these turbulent months would draw attention to the mistakes we made, and that these mistakes could scare off investors.

There are two problems with this line of thinking.

The first is that investors are very good at uncovering problems. We’ve read thousands of investor presentations and had discussions with hundreds of entrepreneurs. As a result, we know that what’s not said in a presentation or discussion carries at least as much signal as what is said. We don’t always find out but we often do. And having an investor unearth a problem is much more damaging to an entrepreneur’s chances of getting funded than having the entrepreneur preempt this damage by sharing the problem themselves.

The second problem with an entrepreneur not drawing attention to the mistakes they made is that it means they miss out on the opportunity to highlight their learnings from these mistakes. We all make mistakes. So if an entrepreneur states that they haven’t made any, they’re either deluding themselves or hiding something. Both are dangerous. But if an entrepreneur shares the mistakes that they made and shows how they’ve taken actions to address these mistakes, this signals that they’re both self-reflective and open to learning. And entrepreneurs with these traits eventually win.

For these two reasons, I recommend that entrepreneurs not only share the mistakes they made with investors, but also use them as an opportunity to highlight how they’ve learned from these mistakes to build a stronger business.

Sinemia’s new app

I wrote about our portfolio company Sinemia’s content site Sinemia Sosyal in an earlier post.

In the post, I described how Sinemia Sosyal offers its users editorial content about movies, actors and actresses, and all else related to the cinema sector. It also offers users a smart lookup feature to discover current movie screenings in a way that I find more aligned with how I go about looking for movies to watch at the theater.

Sinemia recently released new versions of its mobile apps (iOS, Android, and Windows Store), and, in doing so, it made three big changes which build on Sinemia Sosyal. There are other new features, but these are the ones that stood out to me.

The first is that the content of Sinemia Sosyal is now available to all mobile app users. In the past, in order to access Sinemia Sosyal through the app, you needed to be a member of Sinemia’s subscription service that lets users watch a movie a day at theaters across Turkey. Sinemia has repositioned its membership club as a premium service, calling it Sinemia Premium, and the Sinemia app which is based on the content of Sinemia Sosyal is now accessible to everyone. This means that Sinemia can now serve more movie goers than before.

The second big change is the introduction of an in-app feed. The app lets you follow the profiles of movies, actors and actresses, and other users in order to stay up-to-date on the news about them and the in-app actions which they take. It then consolidates and displays this information in a personalized feed. This lets users get more value out of the app without having to spend unnecessary time searching for content that they find interesting, and thereby keeps users engaged with the app. Screenshot_20160905-155119

The third big change is the introduction of non-movie privileges to Sinemia Premium members. In addition to watching a movie a day, Sinemia Premium members can now access discounts at over 400 restaurants, cafes, and merchant partners. Most of these merchants, like restaurants located close to movie theater locations, complement the movie going experience. This makes a Sinemia Premium membership that much more valuable for movie goers.


If these developments sound exciting, I encourage you to give the new Sinemia app a try.

Turkey’s startups following the coup attempt

I try to post original content during the week, and link to external content that I find interesting on the weekends. However, this weekend there were three pieces of external content that I wanted to refer you to. I think that this third piece is worth reading now rather than later, so I’m sharing it on a Monday.

In particular, this weekend there was an informative Techcrunch piece by Elmira Bayrasli on the impact of Turkey’s 15th of July failed military coup attempt on the country’s startup ecosystem.

The article highlights the thoughts of several entrepreneurs, investors, and other ecosystem members. The overall opinion seems to be that local entrepreneurs and investors accept that political and economic unpredictability are part of doing business in Turkey, and that while this has caused some fear among Western investors, there hasn’t been much of a change in appetite from local and Eastern investors.

You can read the full piece here.

How Turkey can become an integral part of the MENA region

I participated in a panel entitled “How Turkey can become an integral part of the MENA region” at the Step conference in Dubai a few months ago. The panel was hosted by Khaled Talhouni from Wamda Capital, and the other panelists were Kerim Ture from Modanisa, Hande Cilingir from Insider, and Numan Numan from 212.

In the half hour session, we cover a wide range of topics including:

  1. How MENA funds can invest in Turkish startups and vice versa
  2. The challenges faced by Turkish startups when expanding to MENA
  3. The similarities and differences between the MENA and Turkey startup ecosystems

You can watch the full video below.

Alexa and Amazon Echo

I received my Amazon Echo order earlier last week. Amazon doesn’t ship the device to Turkey yet so I had to order it from a seller on the N11 marketplace. The cost of buying the device this way is about twice the $180 list price on Amazon.

The Alexa app (Alexa is the voice assistant that powers the Amazon Echo) which you need to set up the Amazon Echo is also not available in Turkey, so I downloaded a prior version from the APKMirror website.

Fortunately, after going through these troubles to buy and set up the Echo in Turkey, I discovered that the experience is well worth it.

The main use case I found for the Echo is having it play music. I connected my Spotify account to the Alexa app and, simply by saying “Alexa, play X by Y on Spotify” (where X is the name of the song and Y is the name of the singer), I get to listen to all of the songs available on my Spotify account. The speaker quality is great but that’s just table stakes. What differentiates the experience is the ability to listen to music by simply saying what you want to listen to. That’s a much more fluid experience than looking for music by typing and clicking on your smartphone or laptop.

I also used the Echo to get weather forecasts for the upcoming day before heading out in the morning. Once again, it’s a much better user experience to get the weather this way than by typing and clicking on a smartphone or laptop screen.

Alexa is currently an example of weak artificial intelligence (AI). It only understands and responds to a narrow range of requests which are communicated to it with a predefined syntax. And the range of requests that it responds to (like playing music and sharing the weather) are indeed pretty narrow. For example, Alexa isn’t able to share what’s showing on TV. Whenever you make a request that its current capabilities cannot respond to, Alexa simply states that it can’t carry out the task. And since it delivers such a great experience in areas like music and the weather, you’re quick to forgive its lack of performance in other use cases.

However, it’s easy to imagine a future where Alexa is integrated with a much broader range of data sources like TV guides, restaurant discovery and reservation platforms, and travel booking sites. And Alexa will become more and more useful with each new integration. We’re in the initial innings of a ball game where Alexa can develop into an irreplaceable household device by simply accommodating more and more weak AI tasks.

The holy grail will occur when we eventually develop strong AI (that is, a machine with the intellectual capability of a human), but Alexa and the Amazon Echo are already very useful in its absence.

The lean startup method

Wikipedia describes the lean startup as “a method for developing businesses and products [where startups] shorten their product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and … validated learning”.

While the rise in the popularity of the lean startup method has increased startups’ execution speed and the rate at which they bring to market valuable new product features, it has also misguided many entrepreneurs who misunderstand the method. Specifically, many entrepreneurs use the lean startup method’s recommendation for shortened product development cycles as an excuse to test product features that don’t technically work.

There’s a difference between a product feature that doesn’t work from a technical perspective and one that doesn’t work because it isn’t adopted by users. The lean startup method advocates for fast discovery of the latter without explicitly passing judgment on the former. But it’s clear that you need to avoid the former in order to have a chance of testing the latter. You can’t test user reactions to an experiment that the user can’t properly experiment with.

So if you explain why certain product features don’t technically work by pointing to the lean startup method, you not only don’t understand the method, but also eliminate any chance of applying it.