# Wednesday, 20 July 2016

I was recently in an Uber on the way to the airport when I started chatting my driver up. It turned out he had three similar on-demand kind of jobs—none of which were stable, traditional gigs.

This got me thinking: Many of today’s workers, and the younger ones in particular, are more entrepreneurial than their predecessors—despite the fact that they aren’t necessarily bona fide entrepreneurs.

More than 20 years ago, I landed my first real job: a full-time entry-level position on Wall Street at Fidelity Investments. Remember? Young professionals used to be able to get entry-level jobs at good companies and climb the ladder. But today, those jobs simply don’t exist, as many lower positions are outsourced or automated with technology. The economy has changed and new hires are expected to come to the job and start producing on Day 1. Hard to do with only a university degree.

Altogether, these trends have led to a generational bulge of middle-tier jobs. This area of the workforce is now occupied by people who usually would have moved out of those jobs faster, allowing the younger generation to advance sooner. But now they can't get move upward at all, since folks in the middle tier stay there forever it seems. As a result, more and more people are leaving the lower rungs of traditional employment and are deciding to take part of the gig economy. That way, they’ll get the requisite experience to hit the ground running on Day 1 should they be offered a regular job by an established company.

How Young Workers Get Ahead in the Gig Economy

Want to land a job at Pixar? You’ll probably have to freelance for a while (think: YouTube design videos). Should you perform well in that role, you might get picked up full-time.

Within the next 5 years, many project as much as 50% of the US workforce will be made up of freelancers. This is both a blessing and a curse of the gig economy—especially as it pertains to younger people just entering the workforce. In the past, even those without a career path would fall into a nice profession simply by following the standard track. But today,you need to be more hustle-oriented and driven to reach just the first rung of many corporate ladders.

To be fair, there are exceptions to the rule. The career paths for lawyers and doctors might be the same due to the advanced education and certification required for those professions—and the free market probably won’t (and shouldn’t) change that. Nobody really wants a doctor who’s pieced together experience by performing operations on a gig-basis, right?

The Disruption of Venture Capital

While the rise of the gig economy has shaken up traditional career paths, it’s also enabled younger workers to make inroads into previously exclusive industries—like venture capital.

It used to be that, to get into VC, you needed an introduction from a family member or friend to land an internship. After that, you’d become an analyst. Do well there, and you’d earn your VC stripes. Then leave and go to a fancy Business School and go to a new VC fund as an associate. The better the MBA, the better associate job you’d get and so on.

That’s not true any longer.

Nowadays, there are several hundred VC firms. And hiring managers there are looking for entrepreneurs or former founders with operating experience. For example at my fund, Fresco Capital, we have three partners and three associates, and I am the only one with an MBA -and that was by accident! :)

What the Gig Economy Means for Young Workers

But remember, thanks in large part to the gig economy, there are other ways to meet that entrepreneurial criterion or grab that operating experience that don’t involve b-school.

Just take a look at Elon Musk’s story. When he started out, the serial entrepreneur had his sights set on working at Google. He waited outside the company’s Mountain View campus hoping to talk to people and was eventually rejected. Of course, we know how Musk’s story has turned out. He’s started a bunch of big-time businesses, which just goes to show that there are very non-traditional ways to cut your teeth nowadays.

At first,the gig economy looks scary. There’s no traditional go-to school to attend to land your dream job. But the gig economy does provide a democratization of talent—work is there, so long as you’re willing to hustle. Graduating seniors should consider the gig economy as a viable means for getting those tougher jobs.

The first step to landing your dream job starts with understanding that the economy is changing. The second step? Realizing you need to work harder and harder to beat out the next person.

What the Gig Economy Means for Employers

If large companies decide to hire kids right out of college simply because of where they went, they’re going to miss out on the best and brightest workers—it’s as simple as that.

More and more young workers are getting their first experience in the freelance economy. If you’re afraid to tap into this pool of talent, it’s only a matter of time before your company will lose all of its competitive advantage.

We’re going through a transitional period in the economy, and the traditional means of getting a job doesn’t apply anymore. The sooner both young professionals and their prospective employers understand this, the better off all parties will be.

 

posted on Wednesday, 20 July 2016 16:53:27 (Eastern Daylight Time, UTC-04:00)  #    Comments [0] Trackback
# Tuesday, 05 July 2016

Logs










A lot of startups—even ones with enormous valuations—are really just two-sided marketplaces.

eBay connects buyers and sellers. Uber connects drivers with those who need rides. Airbnb connects homeowners with travelers who need a place to stay. YouTube connects content creators with those looking to be entertained. Dating sites—like OKCupid—connect daters with dates. The list goes on and on.

In each of these two-sided marketplaces, there is supply and demand. There are a finite amount of people selling memorabilia on eBay, a finite amount of drivers on Uber, a finite amount of hosts on Airbnb, a finite amount of (quality) videos on YouTube, and a finite amount of “dateworthy” individuals on dating sites.

When companies are just starting out, there comes a time in every founder’s life when he or she has to ask themselves whether their startup is going to focus primarily on enhancing the supply side of the equation or nurturing the demand side. When I mentor early-stage companies just getting started out, it’s a question I get seemingly every day.

So which is it?

Why You Need to Focus on Supply

There’s only one clear answer to the question: Follow the pattern of the most successful startups, and focus like a laser on supply.

Why? Switching costs, or the costs incurred—money, energy and time—when a supplier or consumer switches platforms.

There are a lot of barriers standing in the way between a seller on eBay and the potential buyer, for example. The seller needs to create an account. Then he or she needs to take pictures of whatever’s for sale. Next, it’s time to create a listing. Finally, the seller needs to cross his or her fingers and hope that a buyer is interested in conducting a transaction with someone who hasn’t been reviewed by peers.

Over time, if the seller conducts successful transactions, his or her rating will go up. All of this, of course, doesn’t happen overnight.

But once a seller commits to establishing a presence on eBay, it’s unlikely he or she will abandon the platform and set up shop elsewhere. The switching costs are too high.

Why You Shouldn’t Focus on Demand

Thanks to technology, the switching costs associated with customers not finding what they want are negligible.

Imagine a customer goes to eBay and finds only one seller offering the item he or she is looking for. Unfortunately, the item appears to be extremely overpriced. To solve the problem, the customer simply needs to click on the search bar of his or her browser and navigate over to Amazon. Should that fail, the person might head toJet or conduct a simple Google search. They might seek out even other alternatives.

The associated switching costs are infinitesimal. All shoppers need is a few seconds.

Examples of Startups Targeting Supply

Need a little more convincing on the virtues of focusing on the supply side of your platform? Consider these three cases:


  • Airbnb works super hard to get its hosts online. It providesfree professional photographers to help make listings beautiful. The company also provideshelpful advice (e.g., provide soap!) that hosts can leverage to increase the chances their guests have enjoyable stays. This handholding helps bring hosts into the Airbnb family. Which is a good thing, considering how boring the site would be if it only had three hosts (i.e., three suppliers) in each city.


  • YouTube helps content providers produce better videos. The site offers a ton of free tools, including digital studios, editing support, and analytics. It also offers revenue sharing. Altogether, these perks translate into the reality that there are practicallycountless users uploading infinite hours of footage to the site. Not only can you make better videos, you can make money.


  • Ashley Madison, the online dating site that encourages infidelity, infamously went as far as creating fake supply to encourage users to engage with the platform—something that was uncovered when the company’s private data was posted online. According to its own statistics, Ashley Madison had 31 million male users and 5.5 million female users. Turns outup to 95% of those female users weren’t real, but the site’s owners had to figure out how to keep the male users coming back.


If you build it, they (customers) will come—assuming there’s enough supply of whatever it happens to be. By focusing on the supply side of the equation, it becomes that much easier for your startup to reach the next level.


posted on Tuesday, 05 July 2016 21:32:32 (Eastern Daylight Time, UTC-04:00)  #    Comments [0] Trackback
# Friday, 01 July 2016

Last weekend in Pune, India, Fresco Capital along with our longtime partner, e-Zest, produced a 24 hour hackathon about building bots. A few weeks ago, I explained why a Venture Capitalist is running a developer hackathon in India. Our main goal was to learn about bots by seeing what developers are currently doing with bots and using that to look into the future of bots. 

 

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The Current State of Bots

At the hackathon, we had over 125 developers pounding away at the Facebook, Microsoft, Slack, and other bot frameworks. After looking at over 50 bot applications, we learned a lot.

The most common thing that stood out was that most of the users interacted with the bots in some form of chat client. Facebook was by far the most popular interface for the bots, however, we saw a lot of Slack, Microsoft (Skype), and even a few using Hipchat. One team wrote their own chat interface to interact with the bot.  

The second common thread was that for these chat interfaces, most apps integrated some form of natural language processing (NLP) into their interface. Very common, but not nearly as ubiquitous as NPL, was a voice interface. 

We also started to detect some common categories of bot applications. While not all of the 50+ bot applications we saw fall perfectly into these three categories, the most common categories are: 

  • API bridge: the ability to interact with a 3rd party application
  • Interacting with hardware 
  • Tools

API Bridges

By far the most common bot category, we saw integration with many 3rd party tools. For example, Hotel booking with Trident Hotels API in Slack, Skype integration with an internal timesheet application, Pipedrive integration with Slack, Glassdoor integrated with Facebook Messenger.  One very creative bot consumed the API of the host and gave you many useful statistics about the conversation thread you are in. These are the most common bot application as 3rd party integration is the logical use of bots based on the current technology and user comfort level with bots today.

Interaction with Hardware

We saw a few bots, including the overall winner, interact with hardware such as the Raspberry Pi. Still interfacing via a char client, but controlling external hardware. This is part of the future of bots, allowing a bot to interact with your TV, music player, and car.

Tools

While you can build bots with traditional software development tools, we saw a few tool oriented bot applications. One of the finalists was called "Magic Bot” and they would build your bot for you if you gave the tool your API and a list of commands. We also saw some home grown interaction clients that would also learn you behaviors. Clearly these developers view a future where everyone will be rushing to release a bot, similar to a time where everyone wanted a web site or mobile app. 

Startup and Developer Ecosystem

Our interaction with the Indian ecosystem was very fruitful. I got to meet over 25 startups at the Startup Pitch event that was co-located at the Hackathon. Big trends were team collaboration tools (not surprising in a market known for remote development), health care, and consumer based apps. Startups seem to have access to early stage capital, but mid to later stage capital is hard to find. Indian startups can be categorized into something that is either hyper local or something that is very global from the onset. I was not expecting to see such a mature ecosystem and was blow away.

We learned a lot at the hackathon and it was a positive experiment. Look for our next experiment somewhere around the world. :) 

 

posted on Friday, 01 July 2016 14:03:01 (Eastern Daylight Time, UTC-04:00)  #    Comments [0] Trackback