FundersClub Weekly Newsletter - August 25, 2016

FundersClub Portfolio News

Instavest closed a $1.7 million round of seed funding, with participation from Y Combinator, Skype co-founder Jaan Tallinn, Cherubic Ventures and others. The site offers investors trading advice and strategy from expert traders, and it now includes integration to 10 of the most popular online brokerage firms, so users can easily implement any chosen strategies from the site. Social investing site Instavest raises $1.7M in seed funding

Coinbase has been added as a payment option on Twitch, the video game streaming service owned by Amazon. The move restores the option to use Bitcoin for Twitch gamers and users, as the cryptocurrency has gained major traction within the gaming community. Amazon-Owned Twitch Re-adds Bitcoin Payments Using Coinbase

Gitlab launched Issue Boards, an open-source task-management tool that will be integrated into Gitlab's current web service. The tool is free for all users, and offers teams the ability to invite whomever they want to view and edit listed projects, as well as the ability to create unlimited numbers of lists and work items. GitLab launches Issue Boards, an open-source task management tool that resembles Trello

Zum has expanded its rideshare program for kids five and older from its Bay Area base to Orange County. The service, which parents access through a mobile app, features driver/caregivers who are vetted through Trustline, fingerprinted and interviewed. Parents can also use the app to track wherever their child is while with Zum. Rideshare, Childcare Service For Kids Launches In Orange County

Investor Thoughts

Christopher Steiner of FundersClub puts forth a guide to all-hands meetings. The meetings, which can be simple and frequent affairs early on in a startup's life, grow more complicated as a company adds employees. The guide taps the experiences of those at FundersClub as well as dozens of founders who have found novel ways to keep the meetings interesting and meaningful. Founder's Guide to All Hands Meetings

Dave McClure of 500 Startups writes that it isn't startups and venture capital riding a precarious bubble right now, but old-line public companies, whose P/Es are 3x as high as they should be. The real story, McClure says, is that "senile, senior-citizen Fortune 500 CEOs & out-of-touch Gordon Gekko private equity 'Barbarians at the Gate'" will get "beat like a drum by tech startups and VCs half their age and twice as greedy." The Unicorn Hedge

David Skok of Matrix Partners writes about his firm's recent collaboration with The Bridge Group to create a report detailing sales metrics and compensation data. This report provides valuable benchmarking data showing how metrics and compensation have changed over time for sales development teams. Results include data on on-target earnings, SDR ramp time, and variable compensation contstructs. Bridge Group 2016 Sales Development Metrics and Compensation Benchmark Report

Fred Wilson of Union Square Ventures writes that VCs aren't heroes. They're cogs in an ecosystem that, because of their place, get an inside view on the trends powering tech. VCs write blog pieces that reflect some of these views, and many of the pieces provide valuable reading, but it's also important to understand that these pieces also serve as marketing for VCs. Understanding VCs

Elizabeth Yin of 500 Startups writes about convertible notes versus a priced round, from a founder's point of view. Convertible notes are cheap, fast, and flexible, but they can get a little messy—for lawyers—when untangling them for a subsequent equity round. Should you raise on convertible notes or do an equity round?

Natty Zola of Techstars says that a lot of startups are confused about the expectations investors have at different stages of the fundraising process, which leads them to misalign funding efforts with the present state of the business. Zola provides clear graphical explanations of where startups should expect to be according to the kind of funding they seek.Fundraising Round Expectations: A Graphical Explanation

Chris Dixon of a16z says that self-driving cars, clean energy, VR/AR and flying drones are all among the reasons we should feel buoyed about the future of technology and how it will change our lives. Eleven Reasons To Be Excited About The Future of Technology

Founder and Operator Thoughts

Ash Rust of SendHub writes that founders should push their first product out the door when it's not ready, because it will never be totally ready. But the feedback founders receive on that first iteration of what is likely a ghastly product will be far more valuable than putting another month of work into it. Your First Product Should be Terrible

John Vars of TaskRabbit, who was the lead singer of two successful bands in the 1990s, writes that rock bands and software teams operate similarly, and what's good for one is usually good for the other. Bands should play a lot of gigs, because it's one of the main avenues through which to get better—and software teams should release often, as waiting longer slows the team down and stymies consistent feedback. What Playing in a Rock Band Taught Me About Product Management

Sofia Quintero of NomNom Insights writes that it's hard for startups to be as data-driven as they might like, because they lack dedicated data scientists and the proper frameworks to organize the data. But small companies can start early by using the tools they can afford and answering the most pressing data-related questions right away. From there, startups can keep building their data analysis infrastructure. Power to the data-poor

Ry Walker of Astronomer makes the argument that many companies who need enterprise integration are far better served by a package of SaaS + custom work by humans, departing from the trend in the space that has focused on self-service due to the VC preference for scaling purely on software. Machines + Humans = Future of SaaS

Jonathan Golden of Airbnb writes about how flexibility can help push products forward, by allowing managers to reimagine solutions. The key is to build teams and ideas around outcomes, not features. That way, teams and PMs can find the best way forward, even if it utilizes features or paths that weren't initially part of the plan. The Power of the Elastic Product Team — Airbnb’s First PM on How to Build Your Own

Mark Birch of Enterprise Sales Meetup says that sales jobs might look ideal for lone wolves who relentlessly hunt and close on their own, but it's the organizations that embrace true team approaches that will fare best in the future. It's too costly to hire sales people and let them simply figure it out. It's a threat to revenue, and a backwards approach given the optimized technology and processes now in place. Sales Is Community

In Other News

Uber lost $1.2 billion in the first half of 2016, according to a conference call hosted for major investors. Subsidies to drivers are responsible for most of the spending that has driven the company far into the red. U.S. operations, which flirted with profitability in the first quarter, slanted toward a larger loss in the second quarter. Uber Loses at Least $1.2 Billion in First Half of 2016

Google is working on ways to harness the power of Neural Networks, a major building block in modern AI systems, to make images smaller without sacrificing any quality. This theme might sound familiar to those who watch popular television. Google is using AI to compress photos, just like on HBO’s Silicon Valley

WhatsApp will begin sharing some personal data with its parent company, Facebook, reversing on its longtime stance. WhatsApp has fiercely guarded its users' privacy, and it doesn't collect the level of personal data that Facebook does. WhatsApp's co-founder, Jan Koum, said at the time of its acquisition by Facebook in 2014, that the company wouldn't change its policy. Relaxing Privacy Vow, WhatsApp to Share Some Data With Facebook

Ant Financial, the parent company of Alipay, the finance affiliate of Chinese commerce giant Alibaba, is weighing a 2017 IPO in Hong Kong. The company was most recently valued at $60 billion in June, when it raised $4.5 billion. Alipay Owner Said to Plan Hong Kong IPO in First Half of 2017

Did You Know?

Another planet suitable for human life may be closer to Earth than most had imagined, as astronomers at the Southern European Observatory have found an Earth-like planet just 4.2 light-years away. The planet, which is in the closest neighbor to our solar system, may change the face of space exploration. One Star Over, a Planet That Might Be Another Earth