4 ms·

Pitching Sequoia? Here’s the big question you’ll need to answer

15 points by _pius 14y ago

pg 14y ago
This is actually one of the most important questions.
yid 14y ago
Skipping the cruft, the question is "Why now?"
mindcrime 14y ago
Now that was a good PandoDaily article. Short, succinct, but valuable. I wish we got more of this kind of article on HN! Personally, I've spent a lot of time thinking about various "important questions" that I've gleaned from sources like: watching videos of pg doing office hours, reading pg essays, reading VC blogs, reading Steve Blank's material, etc. Also my $DAYJOB boss, acoliver, is big on harping on the question "what problem does this solve?" (a pg favorite) and "who can the business owner fire if they acquire your solution"? And despite all that, I'd never encountered this question before, at least not in this form. It certainly isn't one of "the questions" I try to have an answer to. It will be now. Of course, it isn't about Sequoia, or any other specific firm... it's a good, solid question that helps you focus on important aspects of your business. Is it a technology thing? Is it a market thing? Is it a public opinion or demographics thing? Something regulatory? Whatever "it" is, you should probably know about it if you have really figured out your market, your technology, etc. I'm looking forward to digging deep on this vis-a-vis Fogbeam Labs, but here's quick, off the cuff answer for us: "Because the world is moving towards Open Source software and we believe that most important self-hosted enterprise software is going to be OSS in the future. Additionally, computing power and scalability necessary to do the complex machine learning operations that we need, are now widely available and affordable. And finally, because improving internal knowledge transfer and process efficiency is one of the few remaining areas to gain a sustainable competitive advantage". (Aside: for anybody who doesn't know what we're working on, it's OSS software that works at the intersection of Knowledge Management, Information Retrieval, Social Networking and BPM. Think "Facebook for the Enterprise" (kinda like Jive or Yammer) but with a much deeper level of integration into business process and workflows.)
- thoughtcriminal 14y ago
  the world is moving towards Open Source software... I'm not so sure, and if it is, it's happening slooowly. I've read other (insightful) comments of yours about Flogbeam Labs and you sure are passionate. So much so you might be seeing trends that aren't there. All I'm saying is beware of that cognitive bias.
  - mindcrime 14y ago
    I'm not so sure, and if it is, it's happening slooowly. Oh, absolutely. But this isn't entirely a case of wishful thinking with no foundation. I'd have to stop and spend time to dig up the links, but there have been more than a few analyst reports and what-not, including by the big boys like Gartner and so-on, saying the same thing. We've also heard this from customers. Just to give one example... we sat down with some people from a major bank (they're in the Fortune 250) and asked them some of these questions. What we heard was "5 years ago, OSS would have been a non-starter. Now, we're actively looking to use more OSS because we believe it delivers better value". That said, we're not saying that Oracle is going to go away anytime soon, but there are a lot of signs there. Going back to Oracle for a minute, their acquisition of MySQL says something. And Red Hat breaking the billion dollar mark in revenue last year is also an encouraging sign. All I'm saying is beware of that cognitive bias. Well said.
chacham15 14y ago
This question seems important if the startup is the first to move into a specific area, but ones that improve execution IMO dont really answer this well. For example, what would the answer have been for Google?
- pg 14y ago
  Actually Google would have had one of the clearest answers: that the web is growing to the point where (a) search matters a lot and (b) ranking results based on textual similarity is no longer enough.
vannevar 14y ago
This a typical example of VC rationalization, built on a sandy foundation of survivor's bias. YouTube's 'Why now?' might more accurately be answered, "because we just made people a ton of money on PayPal and there's a lot of venture capital sloshing around looking for a credible home." The company lost money for five years, so without the Google buyout, 'now' might not have turned out to be such a great time. Just ask MySpace, the number 2 video-sharing site when YouTube got snapped up. Good thing Moritz was on the Google board at the time of the investment. I wonder how many times Hurley and Chen had to rehearse to pitch to Sequoia?

15 points by _pius 14y ago

pg 14y ago

This is actually one of the most important questions.

yid 14y ago

Skipping the cruft, the question is "Why now?"

mindcrime 14y ago

Now that was a good PandoDaily article. Short, succinct, but valuable. I wish we got more of this kind of article on HN! Personally, I've spent a lot of time thinking about various "important questions" that I've gleaned from sources like: watching videos of pg doing office hours, reading pg essays, reading VC blogs, reading Steve Blank's material, etc. Also my $DAYJOB boss, acoliver, is big on harping on the question "what problem does this solve?" (a pg favorite) and "who can the business owner fire if they acquire your solution"? And despite all that, I'd never encountered this question before, at least not in this form. It certainly isn't one of "the questions" I try to have an answer to. It will be now. Of course, it isn't about Sequoia, or any other specific firm... it's a good, solid question that helps you focus on important aspects of your business. Is it a technology thing? Is it a market thing? Is it a public opinion or demographics thing? Something regulatory? Whatever "it" is, you should probably know about it if you have really figured out your market, your technology, etc. I'm looking forward to digging deep on this vis-a-vis Fogbeam Labs, but here's quick, off the cuff answer for us: "Because the world is moving towards Open Source software and we believe that most important self-hosted enterprise software is going to be OSS in the future. Additionally, computing power and scalability necessary to do the complex machine learning operations that we need, are now widely available and affordable. And finally, because improving internal knowledge transfer and process efficiency is one of the few remaining areas to gain a sustainable competitive advantage". (Aside: for anybody who doesn't know what we're working on, it's OSS software that works at the intersection of Knowledge Management, Information Retrieval, Social Networking and BPM. Think "Facebook for the Enterprise" (kinda like Jive or Yammer) but with a much deeper level of integration into business process and workflows.)

thoughtcriminal 14y ago
the world is moving towards Open Source software... I'm not so sure, and if it is, it's happening slooowly. I've read other (insightful) comments of yours about Flogbeam Labs and you sure are passionate. So much so you might be seeing trends that aren't there. All I'm saying is beware of that cognitive bias.
- mindcrime 14y ago
  I'm not so sure, and if it is, it's happening slooowly. Oh, absolutely. But this isn't entirely a case of wishful thinking with no foundation. I'd have to stop and spend time to dig up the links, but there have been more than a few analyst reports and what-not, including by the big boys like Gartner and so-on, saying the same thing. We've also heard this from customers. Just to give one example... we sat down with some people from a major bank (they're in the Fortune 250) and asked them some of these questions. What we heard was "5 years ago, OSS would have been a non-starter. Now, we're actively looking to use more OSS because we believe it delivers better value". That said, we're not saying that Oracle is going to go away anytime soon, but there are a lot of signs there. Going back to Oracle for a minute, their acquisition of MySQL says something. And Red Hat breaking the billion dollar mark in revenue last year is also an encouraging sign. All I'm saying is beware of that cognitive bias. Well said.

chacham15 14y ago

This question seems important if the startup is the first to move into a specific area, but ones that improve execution IMO dont really answer this well. For example, what would the answer have been for Google?

pg 14y ago
Actually Google would have had one of the clearest answers: that the web is growing to the point where (a) search matters a lot and (b) ranking results based on textual similarity is no longer enough.

vannevar 14y ago

This a typical example of VC rationalization, built on a sandy foundation of survivor's bias. YouTube's 'Why now?' might more accurately be answered, "because we just made people a ton of money on PayPal and there's a lot of venture capital sloshing around looking for a credible home." The company lost money for five years, so without the Google buyout, 'now' might not have turned out to be such a great time. Just ask MySpace, the number 2 video-sharing site when YouTube got snapped up. Good thing Moritz was on the Google board at the time of the investment. I wonder how many times Hurley and Chen had to rehearse to pitch to Sequoia?