Stealing Signs - Issue 29
VC Wins & Losses, They Myth of Blackness in VC, Snapchat = WeChat?, Evaluating New Tokens, & The Du Bois Spiral
Worth Reading
Issam Freia: Winning & Losing in VC
Issam Freiha, Reshape Ventures & Mario Gabriele, Charge VC
Earlier this year, Touch Surgery was acquired by Medtronic. The terms were undisclosed, but it was a significant, meaningful exit. The error we made, I think, is that we underemphasized how remarkable it was that this company had built a truly viral product in the healthcare space. That just doesn’t happen often. Even if monetization hasn’t been figured out yet, when there’s such clear product-market fit, when a brand has been built in a difficult to penetrate sector, that deserves a huge amount of credit. We should have paid more attention to that.
Issam Freia is manning Reshape Ventures as the youngest GP in the country. The fund’s investing thesis is focused on software adoption in the real estate industry and working with companies to optimize their physical/offline strategies. Issam mentions an increasing focus on hybrid models as well, where a company’s growth is dependent on physical space but brand building and digital offerings can help speed up their growth flywheel.
A particularly interesting story in this piece is how Issam got access to and became an investor in EquipmentShare, a marketplace for commercial construction equipment. Even though it was a hot deal with an impressive cap table, including Insight Venture Partners and Y Combinator, and required swift action to be a part of, Issam and team went to great lengths to demonstrate the value Reshape could provide to the company. The ability to balance moving quickly and proving value as a new investor is impressive.
The Myth of Blackness in Venture
Reggie James, Founder of Eternal
There is a need to paint an ideal image of a Black person within firms. Often times it being someone who’s primary contribution is being vocal about diversity.
But change comes when Black people that are doing the work to build and craft views on technology/design — are being held equal in thought by our white peers.
Through a series of powerful, eye-opening stories and personal experiences, Reggie identifies three primary actions that can drive the most significant changes to the structural inequality in venture capital: 1. Hire black associates, 2. Afford black people the same opportunities their white peers have to build and craft views on technology and design, and not just on diversity and equality initiatives, 3. Give black entrepreneurs the same room for failure (+ repeated failure) and assumptions of success their white peers enjoy.
The story of Tristian Walker, founder of Walker & Co., a health and beauty brand for people of color, and former Entrepreneur In Residence at Andreessen Horowitz is particularly powerful:
Perhaps the other things he was playing around with, weren’t very good. Perhaps he was coming to the end of his EIR-ship and this was the most viable idea, that also had support from the firm…
When the acquisition was announced, the entire tech Twitter community was applauding the deal. According to Vox — most of the money invested in Walker & Co. was recouped. $40m invested, and an acquisition cost that is pinned between $20-40m.
So, failure. Yet we applauded. Why? I think the answer is because he was able to get that far. There should be a sense of sadness here.
Process for Evaluating New Tokens
Nick Tomaino, Founder of 1confirmation
All token-based networks require buy-in from a broad-base of people globally and the founding teams must operate in a balanced, transparent manner and understand the ethos of the broader blockchain community to gain global buy-in. This is different than the case of traditional companies, where founders can build a great product without worrying much about transparency or fostering a healthy and vibrant community.
Nick outlines crypto investment firm 1confirmation’s evaluation process for new token-based networks. It boils down to 4 categories: Team, Product, Community, and Token Mechanics. Save for the token-specific criteria, this framework is useful for just about any investor. I appreciate its simplicity and it’s an interesting read even for those with limited knowledge of cryptocurrencies.
One criterion I did not expect was the ability of the founders to build a community — Nick suggests the founders of token-based networks must be inclusive, objective, transparent, and capable of fostering a vibrant global community. He starts the piece touching on memes and their place in crypto, which cannot be understated, and says memes are just ideas that spread from person to person in a culture. He then suggests cryptocurrencies and memes are too often one and the same. While concerning, I think this comparison is effective in understanding the community dynamics in crypto. Just as important as technology and infrastructure supporting a cryptocurrency is the perceived value by users and willingness to share with other users. The community supports it as much as the technology it seems, which is why some crypto’s can reach billions of dollars while ignoring business fundamentals.
Do Westerners Want SnapChat to be WeChat?
Josh Constine, SignalFire
“When we talk about WeChat, understanding how it became so successful is also key to understanding why there hasn't been a Western equivalent: Most Chinese consumers accessed the Internet for the first time on their smartphones, and WeChat capitalized on its lead as the dominant messaging app to build out the mobile ecosystem in its earliest days.
Mobile evolved very differently in the Western world, where online services were already well-established and became individual apps on our phones. No one service has the level of distribution and dominance that WeChat enjoys in China, making all-encompassing platforms difficult, if not impossible, to pull off.
Snapchat is the most promising candidate for the western version of WeChat, or a super app. Josh explores the importance of Snap’s recent announcement that it will begin hosting third-party developers’ apps within SnapChat and to what degree this sets them on the path to become a super app. He also identifies products and strategies Snap may leverage to achieve super app status like a Snap wallet.
While Snap may be the best candidate to become the western super app, I don’t think it’s likely nor do I think users are passionate about it becoming one. As quoted above, the super app approach requires mass adoption on a scale no U.S. app has, not even Snap. Further, I’m not convinced users want one app for everything — though I do think there is significant potential for industry-specific super apps, bringing together users, services, and discovery, in industries like real estate and healthcare. These industries suffer mightily from inefficient service provider discovery and siloed, antiquated technology systems, but stand to benefit the most from the centralization of users and service providers.
<stuff> Weekly
LOL Weekly: So You Think You’re a Tech Company
Lolllll
Funding Weekly: Play One Up
Brandon Pitts founded Play One Up in 2018 to give XBOX and PlayStation gamers a way to compete for money while playing Madden NFL, NBA2K, FIFA and Fortnite. He describes it as a mobile third-party facilitator that essentially “helps gamers earn income through video game skills through the tap of a button” via its app, One Up.
Play One Up raised $3.1M from Three Curve Capital, Victor Oladipo, Denzel Ward, and others. Play One Up boats impressive traction with 130,000 registered users and $1M in processed wagers per month, and has seen tremendous growth since the pandemic started with over half of their users signing up in the last 90 days.
Baseball Weekly: African American MLB Players on Race, Baseball, America
Ken Rosenthal & Doug Glanville, The Athletic
LaTroy Hawkins: Every city I played in, I always immersed myself into the police department just so they could see my face, get to know me and what type of person I am and understand that I am not a threat. I did that here in Prosper (Texas). I had the guys come over, asked them who their favorite baseball players were. Nolan Ryan? Well, I’ve got a Nolan Ryan ball, here you go. I did the same thing with the fire department, just so they understood that I’m not a threat. I’m on your side. I understand you’ve got a very tough job to do. Every day.
A powerful discussion about race and baseball in America from some of baseball’s greatest players — Doug Glanville, Jimmy Rollins, Dontrelle Willis, Ryan Howard, Torii Hunter, and LaTroy Hawkins.
Art Weekly: How W.E.B. Du Bois Used Data Visualization to Confront Prejudice
Jason Forrest, Musician and Data Visualization Designer
In 1900, Du Bois had the opportunity to design and curate “The Exhibit of American Negroes” for the Exposition Universelle in Paris. He writes in his autobiography: “I wanted to set down its aim and method in some outstanding way, which would bring my work to the thinking world. The great World’s Fair at Paris was being planned and I thought I might put my findings into plans, charts and figures, so one might see what we were trying to accomplish.”
Similar to a stacked bar chart, the Du Bois spiral takes disproportional data and angles (or wraps) them to point out the inequalities in the data. Each acute angle highlights the change in category, while the largest number is so grossly disproportionate that the bar is coiled into a spiral. It’s really an interesting solution that is as beautiful as it is effective for the right data.
