Tag Archives: Taylor Davidson

kbs+ Ventures: Creative Entrepreneurship

Just last week, we launched our first book at kbs+ Ventures.  The book was derived from the insight that our agency‘s staff wanted to learn more about innovation frameworks and what entrepreneurs have to do in order to build a business.  You can download the book here (more formats for the book coming in the near future, follow me on twitter to find out when launched).

Creative Entrepreneurship Books

Last summer, Lara, Eugenia, Taylor and I embarked on the process of creating this book with the support of our agency and MDC Partners.  A few months later, we had a finished product of the book in-hand and were ready to launch it.  We turned the book around in about four weeks.

We decided not to re-create the wheel and write all new content.  Some friends of ours are top venture capitalist and entrepreneurs who already write amazing content online so we asked them to donate some content to our book.  And they did;  some old posts they had written and some brand new content for our book.  A huge fist bump to all the contributors including Blake Masters, Tim O’Reilly, Paul Graham, Jay Jamison, Sarah Lacy, Felix Salmon, Mark Suster, Steve Blank, Marc Averitt, Fred Wilson, Charlie O’Donnell, Chris Dixon, Andrew Chen, Seth Levine, Scott Weiss, Babak Nivi, Matthew Waterman, Dave McClure, Dan Shapiro, Adam Penenberg, Robert Ackerman Jr., Walter Kortschak and Rutul Dave.

We plan to use this book for our Fellows Program.  We also plan on making the book much more widely available – it’s free to you.  We will be distributing the book thru different accelerators, incubators, venture capital offices and other places of entrepreneurship.  Reach out to me if you want to put a bunch in your office or in a place which could reach many entrepreneurs.

Here are some pics of our launch party for the book.  It was a blast.  And here is the writeup on our Tumblog.

We believe this book can have an impact and I’m super proud of the team who made it happen.

 

Building a Data Empire On Your Back

This post was inspired by an email conversation between Taylor Davidson, Adam Liebsohn, and myself early this morning.  Taylor works at kbs+p Ventures and Adam is the founder/ceo of a startup called VoyURL.

“The best way for a startup to get a dataset like that is to create some sort of self-expression platform, a way to express what you’re into …,” says Lavingia, who also designed the Turntable.fm iPhone app. “You can’t directly ask users, ‘Hey we’d love all of your data! List the songs you like and the albums you’ve bought and the places you’ve visited and the food you’ve eaten.’ But you need these answers to ultimately make money.”

The above quote comes from a post on TechCrunch titled Pinterest Joins Twitter and Facebook As The Newest Self-Expression Engine.  It’s hot on the heels of a few other posts (BloombergBetabeatUncrunchedTechCrunch) that talk about how Facebook and the like are building massive data assets on the backs of consumers and reselling them to advertisers.  Consumers for the most part, are not fiscally compensated, but some of the technology services can argue that they are getting value in exchange for their data.

Bloomberg’s latest headline, “Getting Rich From Others Has Never Been Easier,” pretty much sums it all up.

I think there’s an expression, “there’s no free lunch in life.”  When was the last time you signed up for a service and wondered how it was making money?

For the next 24 hours, look at all the sites you visit.  Are they collecting your data and reselling it?  Are you making any money off of your data?

I think we are going to see some sort of reform in this area.  Imagine going to a website and seeing a “ratings” of some kind which shows what they are doing with your data, similar to how the movie world uses different types of ratings (G, PG, PG-13, R, MA).  A little icon or graphic which shows if your data is being sold, transferred, stored, etc.  I think I’d like this – and folks like Apple who take leadership positions with App Stores would have to roll this out next to each app I download.  I’d like to know what’s happening with my data.

Just some food for thought on this Tuesday morning.

Investing in Startup Index Funds

This is one of the first guest posts I’ve had in a long time, potentially years.  It’s by Taylor Davidson, who is my colleague at kbs+p Ventures.  It originally appeared yesterday in his premium newsletter entitled, “From Me to You.”  I highly recommend that you subscribe to it, if you are interested in startups, finance, and digital media.

I got Taylor’s permission to take his post outside of his paywall ($4/mo) to put live here.  It is on a topic that we spend time thinking about:  Index Funds of Startups.  Enjoy the post and leave comments as always.

[From me to you] 74 – Investing in Startup Index Funds

“The thing people don’t realize about SecondMarket, it’s not about fucking Facebook and Twitter stock.” (link)

Every so often I get an email from SharesPost updating me on news and implied valuations of the most active companies on SharesPost’s secondary market for private company stock.  And every time I look at their venture-backed index

… I wish I could buy shares of the index without having to place individual bets on the companies composing the index. Why?

Darren and I talk often about our investment philosophy and why we focus on specific areas within that philosophy.  A topic that often comes up is the difficulty in picking winners in crowded spaces with undifferentiated companies, even if the area is growing and drawing significant spend and investment dollars. We often say “I love the space, and if I could invest in an index in the space, I would, but because it’s very difficult for us to pick a winner in the space, we don’t invest in that space.”

Accredited investors can directly invest in private companies and buy traded shares of private companies on secondary markets, but there are very few ways for accredited investors to make index investments in venture-backed companies. *

One way is to simply invest in a ton of deals with minimal oversight and a filtering system that focuses on a particular stage, area, or type of investment opportunity. In my mind, the closest we have to “venture index funds” today are:

- 500 Startups: perhaps the most intelligent “index fund” of startups, investing $25K to $50K (approximately) in companies that need design, data and distribution to make a breakthrough.  Dave McClure and Paul Singh invest early in a ton of companies, and then double-down (participate in follow-on funding) in the most promising companies.  In essence, their focus on stage and the company’s big need is what creates their “index”.

Start Fund: A joint venture between Yuri Milner and SV Angel (Ron Conway), the Start Fund gives $150K convertible notes to every company that makes it into Y Combinator. In essence, getting into Y Combinator is the filter and the base of the “index” that the Start Fund is investing into.

- TechStars: TechStars recently announced they will offer every accepted company a $100K convertible note, in addition to their standard $18K for 6% equity investment. Getting into TechStars is the filter and the base of the index that TechStar’s investors are betting on. Not quite the same as the first two, but close.

But few investors can create the structure and the access to deal flow to create their own index. That’s why SecondMarket and SharesPost have the opportunity to create indicies of the overall venture-backed market, and then build separate indicies of different areas of venture-backed companies: adtech, greentech, edtech, govtech, socialtech, ecommerce, phototech, entertainmenttech, B2B, B2C, European, Latin American, etc.  Accredited investors could then invest in indicies in certain areas of venture-backed private companies, supplementing their direct investments with their indirect index investments in areas where they may not be able to a) pick winners directly or b) get direct access to startup investment opportunities.

Granted, these secondary markets are still relatively immature and may not yet have the volume or liquidity to support any index funds, but it’s the type of evolvement that we are bound to see in the secondary markets as they mature and grow.

And there are some industries and hot areas of venture-backed startups where I would love to be able to place index bets.

* A topic first discussed in letter #27, I’ll buy shares in a SecondMarket index fund. Who will be the first to create one?