New Investment: Breather

Two years ago I was introduced to Julien Smith, Founder / CEO of Montreal and NYC-based Breather, by my good friend Taylor Davidson. Taylor explained that Breather was building a new type of private cafe that could be accessed via mobile app. I thought the concept sounded crazy and unique at the same time so I agreed to take a meeting with Julien. When I first met Julien and he explained the concept to me, I believed he was absolutely nuts. For those of you who haven’t heard of Breather, it’s a network of private spaces you can access by the hour through an iPhone and Android app. Think of Breather as productive and private space on demand. 

Breather quietly launched in NYC earlier this year and Julien encouraged me to give it a shot. I believe I was one of their first customers. In fact, I was so pleasantly surprised by the experience I decided to write a detailed post about what it’s like to work in a Breather space. I had never experienced anything quite like it. The company created a “full stack” experience that felt like magic. Pull out my phone. Activate the Breather app. Pick a location. Reserve a time slot. Invite colleagues. Turn by turn directions to the space. Arrive at the door. Access the space via the Breather app. And presto! I now have private space all to myself. Here’s where Breather is different: they own the end-to-end experience from the app all the way down to the look and feel of the spaces. The experience is carefully crafted and consistent throughout the network. You can tell the team deeply cares about the user experience. A well-known investor used the service after I encouraged him to give it a try. He texted me immediately afterwards and simply wrote, “It was flawless.”  

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Tinybop: Educating Kids In Every Country

Several years ago when I was at Lerer Ventures, Sam Gerstenzang, our summer intern, recommended  that I meet with Raul Gutierrez, Founder CEO of a Brooklyn-based creative studio called Tinybop.  When Sam explained that Tinybop was building educational apps for kids, I was immediately skeptical because I’ve seen hundreds of companies in the space and my identical twin brother founded a children’s media studio, CloudKid.  After some back and forth with Sam, I begrudgingly agreed to meet with Raul but promised that I would keep an open mind. Over the course of the next two years, Raul and I spent countless hours talking about the future of children’s media and his vision for building the next great education brand.  To Raul’s credit, he was able to transform me from a skeptic to a believer.  Despite the space being hyper competitive with thousands of app publishers, I truly believe that Tinybop is the one percent of the one percent.  That’s why I’m incredibly excited and proud to announce that RRE has led Tinybop’s Series A Financing with participation from TwoSigma, KEC, Brooklyn Bridge Ventures and Kapor Capital.  

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Standards of Performance & Organizational Values

I recently finished reading the seminal leadership book, The Score Takes Care of Itself, by Bill Walsh, the legendary 49ers Head Coach. In 1979 when Walsh took over the 49ers, the franchise was the laughing stock of the NFL as it managed to win only two games that season. However, in less than two years, Walsh led the 49ers from last place to Super Bowl Champs. A true Cinderella story. When Walsh left the franchise ten years later, the team had won three Super Bowl Championships and completed perhaps the greatest run in NFL history. 

How did Walsh fuel this transformation and build one of the great NFL dynasties? He credited his “Standards of Performance” as the catalyst for driving organizational change and maintaining a high level of performance during his tenure with the team. Walsh codified his “Standards of Performance” and drove them throughout every level of the organization including the administrative staff.  Within the first year, there was a dramatic shift in the way that everyone approached and performed their jobs.  Nothing short of excellence and a team first attitude would be tolerated.  

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On Demand Everything

A few weeks ago, I wrote about the “Uberfication” of the U.S. service economy. Given the positive response from founders, investors and the broader tech community, my partners at RRE invited me to speak about this investment theme at our annual meeting this afternoon.  As part of my talk, I prepared a high level presentation which summarizes the opportunity (see embed below).  As always, would love to hear your questions, comments and / or feedback.  We’re always looking to get smarter about how mobile is simplifying our lives and reshaping our economy.     

https://www.slideshare.net/schlaf/on-demand-everything

The Era of Decentralized Computing

Over the last three months, my partner Adam Ludwin and I have been spending a good chunk of our time researching and thinking about decentralized technologies and networks.  I’ve just started my quest to understand exactly what’s going on but believe ‘decentralization’ will emerge as a mega trend in the next two to three years.  We’re not only seeing decentralized innovation around the block chain and mesh networks like OpenGarden (global) and NYCmeshnet (local) but also around storage and content delivery. My Spidey Senses tell me implications of this trend will fundamentally transform the way in which we all connect to the internet and exchange value.  It’s pretty hard not to get excited about this shift. 

RRE is actively making bets in these types of emerging technologies so I’m trying to learn as much as I can by devouring blogs, talking to founders and listening to podcasts every night.  In my quest to learn the basics, I recently stumbled upon a great podcast titled Let’s Talk Bitcoin and was pleasantly surprised when I discovered the latest installment features David Irvine, Founder / CEO of MaidSafe, one of the leading proponents for decentralized computing. In his talk David explains why decentralized architectures are good for the internet, the story behind MadeSafe and his philosophy on building a platform that creates rather than extracts value.  

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Update My VC

Today we are launching Update My VC - a modern guide on how founders can easily update and keep in touch with your investors. At RRE we always strive to provide the best possible support to our companies, but we realize you’re slammed building product, growing your business and recruiting the best talent. We also understand the last thing you want to think about and have time for is sending a lengthly update to your investors. 

To make this process easier for you, we’ve created a Tumblr blog that outlines the perfect investor update. Our template includes Highlights, Lowlights, Product, KPIs/Core Metrics, Business Development, Hiring, Financing, Press, Help Wanted, and Kudos. The site even has an Email Template button that auto generates a blank investor update as a new email message.

Additionally, we’ve included a library of resources including useful blog posts, slideshares, and Quora discussions.  Our expectation is to update this library so the most useful content and advice is all in one place.  We view this as an evolving site and community so feel free to share your questions, comments and feedback with community@rre.com

Finally, I’d like to thank Amrit Richmond and Kane Hsieh from the RRE team for their help in launching this site. 

Uberification of the US Service Economy

Since I joined RRE Ventures last fall, I’ve spent time researching mobile on-demand services that we are able to access with a push of a button. “On-demand mobile services” (ODMS) is a broad category so I believe it’s important to start with a definition.  My friend Semil Shah defines ODMS as “apps which aggregate consumer demand on mobile devices, but fulfill that demand through offline services.”  I’ll take it one step further:  ODMS deliver a “closed loop” experience by collapsing the value chain including discovery, order, payment, fulfillment (offline but within owned network) and confirmation. In the pre-mobile era we had to search yellow pages (or google), find a provider, call  or email that provider, wait to connect with someone, schedule a convenient time, hope the provider arrives on time, and then pay with a credit card or cash.  Thankfully, a new array of mobile services removes all of that friction we were used to experiencing. Welcome to the uberification of our service economy.

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What Jeff Bezos Thinks Is Cool

I just finished reading the book, The Everything Store, which chronicles the life of Jeff Bezos and the rise of Amazon.  Towards the end of the book, the author, Brad Stone, tells a story about Bezos’s quest to understand how Amazon could be admired and not hated as the company raced past $100 billion in annual sales.

As part of this process, Bezos delivered a memo, titled Amazon.love, to his leadership team at a retreat. In essence, this memo outlines how he wants Amazon to conduct itself and be perceived by the world.  Bezos wrote, “Some big companies develop ardent fan bases, are widely loved by their customers, and even perceived as cool. For different reasons, in different ways and to different degrees, companies like Apple, Nike, Disney, Google, Whole Foods, Costco and even UPS strike me as examples of large companies that are well liked by their customers." 

Bezos then went on to make a list of why some companies are admired and others are loathed: 

  • Rudeness is not cool.

  • Defeating tiny guys is not cool.

  • Close-following is not cool.

  • Young is cool.

  • Risk taking is cool.

  • Winning is cool.

  • Polite is cool.

  • Defeating bigger, unsympathetic guys is cool.

  • Inventing is cool.

  • Explorers are cool.

  • Conquerors are not cool.

  • Obsessing over competitors is not cool.

  • Empowering others is cool.

  • Capturing all the value only for the company is not cool.

  • Leadership is cool.

  • Conviction is cool.

  • Straightforwardness is cool.

  • Pandering to the crowd is not cool.

  • Hypocrisy is not cool.

  • Authenticity is cool.

  • Thinking big is cool.

  • The unexpected is cool.

  • Missionaries are cool.

  • Mercenaries are not cool.

Jeff’s "cool” list struck a nerve because I’ve recently been spending a lot of time thinking about branding in the context of both RRE and the companies I’m fortunate enough to work with. Building an enduring and admired company regardless of stage and sector requires not only innovation but also strong values and morals to guide the way. 

What I've read so far in 2014

One of my 2014 goals is to read at least one book per month. To help me achieve this goal, I decided to buy a Kindle Paperwhite so I could read on the subway and have an uninterrupted reading experience while at home.  Like many people, I’ve struggled reading books on Apple devices because the screen isn’t optimal and I’m constantly being distracted by notifications. The Kindle, which I think is the ultimate single purpose device, has changed my life because I’ve honestly never enjoyed reading so much. While I still have ten months until I achieve my goal, I’ve already read more books in 2014 than I did in all of 2013. Here are the books I’ve read so far this year: 

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Why Saying No Is Hard

Being an investor isn’t easy for a number of reasons. But the hardest part for me is saying “No.” I meet hundreds of entrepreneurs each year, and at RRE Ventures we invest in only a small percentage of them. VC’s generally invest in less than 1% of companies they meet. So if you do the math, you know I have to say “No” a lot.

There are countless reasons why we choose not to back an early stage venture. Market size. Wrong team. Bad timing. Competition. Traction. Lack of monetization. Little or no competitive advantage. Outside our expertise. Valuation. I could go on. 

But regardless of whether I exchange a quick email with a founder or spend hours getting to know him or her, passing is the worst. It’s the only part of my job that I truly hate. And it’s not just because I lose the option to invest down the road. I hate passing because my daily work with entrepreneurs has given me a good look into their struggles…what founders sacrifice daily to ensure that their company is in a better place tomorrow than it is today. It becomes personal, emotional…it's only human to feel for the founders who…

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Breather - Peace & Quiet on Demand

On Friday, all of my meetings were downtown but I had a two hour open window in the late morning.  Instead of schlepping to RRE’s office in Midtown East or sitting in a noisy Starbucks with spotty wifi, I decided to give Breather a try.  Breather is a newly launched mobile app that provides on-demand rooms in large urban areas. It is the brain child of Julien Smith a Montreal-based writer and entrepreneur.  The service currently operates in Montreal and NYC, costs $25 / per hour and is available seven days a week from 6am to 10pm. 

The main goal of the app is to provide a quiet place to hold a meeting, work in private or just take a break for an hour or two. While the service is perceived as “odd,” novel and unproven, I can imagine a growing market for this type of flexible space. Demand will likely come from small companies with virtual organizations, freelancers, visiting executives and employees and even tourists. The timing for something like Breather to emerge couldn’t be any better since asset sharing, co-working and freelancing have become important pieces of the innovation economy for nearly a decade. 

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Nail Your Seed Round

Several years ago I started teaching a class on raising seed capital at General Assembly and Skillshare.   I initially created the class because friends and founders were coming to me for fundraising advice and I was answering generally the same questions over and over.  

A few months ago, I realized the initial slideshare that I used for dozens of classes was good as long as there was a voiceover but not great as a standalone guide. I decided to speak with a handful of my students and founders to see what they would want in a v2 fundraising resource.  

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Life is Interrelated

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“It really boils down to this: that all life is interrelated. We are all caught in an inescapable network of mutuality, tied into a single garment of destiny. Whatever affects one directly, affects all indirectly. We are made to live together because of the interrelated structure of reality. Did you ever stop to think that you can’t leave for your job in the morning without being dependent on most of the world? You get up in the morning and go to the bathroom and reach over for the sponge, and that’s handed to you by a Pacific islander. You reach for a bar of soap, and that’s given to you at the hands of a Frenchman. And then you go into the kitchen to drink your coffee for the morning, and that’s poured into your cup by a South American. And maybe you want tea: that’s poured into your cup by a Chinese. Or maybe you’re desirous of having cocoa for breakfast, and that’s poured into your cup by a West African. And then you reach over for your toast, and that’s given to you at the hands of an English-speaking farmer, not to mention the baker. And before you finish eating breakfast in the morning, you’ve depended on more than half the world. This is the way our universe is structured, this is its interrelated quality. We aren’t going to have peace on Earth until we recognize this basic fact of the interrelated structure of all reality.”

-Martin Luther King Jr. in a 1967 speech 

What Startups Can Learn from Bill Belichick

“There is an old saying about the strength of the wolf is the pack, and I think there is a lot of truth to that. On a football team, it’s not the strength of the individual players, but it’s the strength of the unit and how they all function together.“ 

-Bill Belichick

This Sunday The New England Patriots are playing in their 8th Conference Championship in the Bill Belichick era. During this fourteen year span, The Patriots and their legendary head coach have not had a losing season and won an NFL-best 163 regular season games, 3 Super Bowls, 5 AFC Conference Championships, 11 AFC East Division Championships.  These numbers are especially impressive since the NFL is designed for parity in the salary-cap era.    

I’m sure you’re asking yourself, how are The Patriots able to maintain excellence over a long period of time while other teams slide up and down the standings?  The answer lies in how Bill Belichick recruits, motivates, and compensates his coaches and players.  And I strongly believe that startup founders can take away some important lessons by studying how The Patriots handle HR and personnel decisions.

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Nuke Your Twitter Feed In The New Year

One of my 2014 goals is to remove clutter in life and focus on quality. This doesn’t just include physical items like clothing and other random “stuff” but also digital things like the number of apps on my phone or the blogs I actively follow. 

A few weeks ago I realized my Twitter feed was becoming unbearable.  Since 2007 I had followed more than 4,000 individuals, startups, established brands, parody accounts, celebrities and media companies.  The signal to noise ratio had pretty much hit zero. I couldn’t keep up. 

I finally decided to search for a solution that would help me quickly unfollow everyone so I could rebuild my follower list from scratch. The rationale was simple: start over and carefully curate the accounts I follow so my feed would become relevant once again. After all, Twitter is only as good as the people you follow. 

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My Goals for 2014

A mentor once told me that I should always jot down my intentions and goals so I can hold myself accountable and track my progress in life. Despite this sound advice, I’ve never taken the time to write down my personal and professional goals even though I always enjoy discussing them with others during the holiday season.  

With 2014 less than a day away, it’s time to finally buck this trend and put the proverbial pen to paper.  I’m doing it for three reasons.  First, I intend to check this list throughout the year to see how I’m doing relative to what I think is important right now.  Second, if I make my goals public, I’ll likely feel a big sense of failure if I don’t tackle everything I set out to accomplish.  Finally and most importantly, I hope you’ll get to know me better based on the areas I’m focused on and the things I’d like to achieve in 2014. 

Without further ado: 

Life    

  1. Read one book per month: Because reading tech and business blogs alone doesn’t really feed my brain.   
  2. Travel to two new countries: I’ve found the best way to learn about the world is by experiencing it. 
  3. Volunteer twice per month: Adopt a non-profit and contribute on a monthly basis so I can give back and feel good about it. 
  4. Attend two intensive classes: Explore areas of interest such as painting, cooking, and graphic design.  
  5. Spend less time working at home: Throughout 2013 I spent more time at home working than being focused on my life. 
  6. Get rid of clutter and focus on quality: I find the more “stuff” I get rid of the happier I become (e.g. clothes, twitter followers, etc.).
  7. Build a long term financial plan: I’ve been fortunate to save some cash but now I need to devise a long term investment plan. 

Work

  1. Blog monthly: I’ve had a longtime phobia of writing and it is time for me to get over it. 
  2. Take fewer meetings: In 2013 I took thousands of meetings so I’d like to cut that number in half and spend more time thinking, researching and creating. 
  3. Find a coach / mentor: It has been years since I have had a formal mentor and my gut tells me now is the time to find one. 
  4. Help a founder daily: assist a new founder every single day and expect nothing in return.  
  5. Launch a resource for NYC Tech: I’d like to create a new resource for the NYC tech ecosystem (think online community, newsletter, etc.). 
  6. Invest in fewer companies: I plan to be hyper selective in 2014 so I can focus on providing high-touch support to my founders. 
  7. Build RRE brand: I’m going to implement a half dozen ideas to foster community within the RRE portfolio as well the NYC tech ecosystem. 

The Guide to NYC Tech 2.0

At Lerer Ventures I created the first version of The Guide to NYC Tech after dozens of people asked me the same dozen questions, over and over. What are the best co-working spaces? Which lawyer should I hire? Where are good places to take a meeting? Who are the key investors to know? How do I find out about cool events?  

As much as I enjoy helping people one-on-one, I find it far more satisfying when I’m able to develop and share a resource that can be enjoyed by all New Yorkers and those in other tech communities interested in our ecosystem.  

Eighteen months after publishing V1, and just four months into my role at RRE Ventures, I’m pleased to present The Guide to NYC Tech 2.0.  Yes, it’s a guide to NYC Tech; and yes, it’s a bit of a love letter as well. But, I’ll say this: NYC is better poised now than ever before to make a global impact through entrepreneurship and innovation.

The goal of this guide is to raise awareness of the NYC tech ecosystem and help newcomers (and veterans) navigate the ever changing landscape.  Additionally, I hope it inspires everyone to give back to their own tech communities on a weekly basis. 

Finally, feedback is greatly appreciated so feel free to email me at schlaf55@gmail.com and I’ll try my best to incorporate your suggestions. 

I'm Joining RRE Ventures!

After two exceptional years of seed investing at Lerer Ventures, I’m excited to announce that I’ll be joining RRE Ventures in September as a Principal focused on Series A investments. 

RRE has been at the center of New York’s start-up community since the early 90s and now manages approximately $1 billion in committed capital across five funds.  There are very few NYC-based firms today with more experience finding great founders, helping entrepreneurs, and building awesome businesses. The partners at RRE have invested in innovative companies like Betaworks, Makerbot, WisdomTree, Vine, Paperless Post, Quirky, Bark Co. to name a few. 

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The Era of Pervasive Computing

Seed investors are in the unique position to spot trends early. Over the last twelve months I’ve noticed a new crop of startups coming in the door at Lerer Ventures and am confident we’re in the early days of the next major shift in computing -  the Era of Connected Devices.   It might still be five or ten years from now - but when it hits the impact will be huge.

These connected devices will be everywhere and enriching our lives in more ways then we can comprehend, today.  No, I’m not taking about a toaster that’s connected to the net.  I’m not even talking about like the Xbox in your living room or the iPhone on your desk. I’m talking about sensors and devices that will monitor and sense our environments, collect data and provide timely and critical feedback. If you think mobile is big right now, wait until the “edge of mobile” is fully developed.  A tremendous amount of value will be created at the “edge” (e.g. sensors, appcessories, etc.) because unfathomable amounts of data will originate here and will then be routed to other devices, applications, services, etc.  In order to support truly pervasive computing, the tech stack - hardware, software, services, infrastructure - will likely undergo significant changes and new value will be created at each level. I believe the companies that own the hardware, software and service in a given market will create significant barriers. 

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