Analysis of’s penetration into Japan and relevant mobile behavior on crowded trains observed to have significantly penetrated Japan.

A quick study shows significant levels of liquidity on both the supply and demand side for this two sided market place in major cities of Japan.

  • Tokyo
  • Kyoto
  • Osaka

Acquisition model attributes

  • Primary acquisition channel: SEO
  • Primary use case: interest groups as an excuse to practice English.
  • Retention pattern: Weekly recurring usage

Other noteworthy mobile user behavior

Primary data observed glancing over the shoulders of mobile users in crowded trains

recurring use cases

  • Reading comic
  • playing mobile games
  • reading up news on Google News
  • social media (Facebook)
  • No significant usage of music listening via ear phones on trains.



Examples of various networks failing at scale

Most solutions will inevitably break when used at scale. These are two recent examples.

AirBnB’s network scales to extend it starts disrupting entire neighborhoods

Political campaigning on social media gets way out of control after politicians attempt to scale up the method which got President Obama elected to office

Technology eco-system scales up operations in California thereby triggering the housing crisis.

Moderation and self restrain is not common when caught up in a winner takes all situation


Crypto-currency exchanges

Business model

  • Pricing model
    • USD 80K initial listing fee
    • fees on each transaction
  • Enterprise sales acquisition approach
    • acquisition channels
      • LinkedIn
      • Crypto-conferences
    • Cost
      • USD2500/month for sales staff
      • USD4000/month for engineers


  • Over supply of exchanges versus crypto projects
    • Crypto-currencies have tanked in 2019
    • There are more than 2000 exchanges right now
    • 20 new currencies are minted each month
    • There is a lack of differentiation between exchanges
  • crypto projects are reporting an exceeding high level of failure rates
    • due diligence traditionally handled by VCs for traditional startups are left to end consumers for crypto projects
    • most projects do not have a sound use case
    • teams tend to be poorly managed
  • Uneven playing field
    • US media’s extensive distribution network is the primary advantage of US based exchanges
      • Binance is the largest exchange
      • Binance ability to tap into engineering talent in US has allowed it to be the trail blazer helping it garner constant media attention
    • Chinese crypto-currency companies are attempting to penetrate US and Europe by hiring talents with fluent in English

Complementary assets for Biki

  • Parent company’s crypto news portal
  • Parent company’s engineering knowledge in building exchange software

Microsoft university penetration strategy

Tools of the trade

  • content marketing like documentation and tutorials on how to use tools
  • Speaking at events as first point of contact for lecturers and TAs
  • Sponsorship through hackathons
  • direct outreach to educational TAs
  • support for student mentorship programs


  • Reach to TAs to try out tools for free
  • Setup booths at hackathons and conducting workshops
  • Train student on the use of MS tools so that they can become successful mentors – GitHub strategy
  • Provide budget for student groups who want to organize learning sessions involving how to use the tools

Feedback mechanism /

  • track the conversion rate of documentations visit to corresponding sign up levels
  • track time on documentation
  • listen for feedbacks when interacting with students during hackathons to figure out portions of the documentation that are confusing


  • track YoY student traffic usage during lull periods to determine if baseline is improving.

Growth Leaders Cocktail Hour & Modern CMO Panel


  • Todd Wilms, Fractional
  • Lauren Vaccarello, Talend
  • Matt McAllister, Mobile Tech RX
  • Carilu Dietrich, Classy

Key take aways of being a CMO

  • Counter-intuitively – the higher you are in the hierarchy the more silo-ed you become
    • average tenure 18 months
  • Alignment is the most important thing
    • your primary team is the executive team
    • Always figure out what the CEO is reading
    • Start thinking about needs of board, investors and C-Suit
  • strategic mindset:
    • start thinking in terms of framework
      • step away from the minute details
      • it is the job of the VP of marketing to fill in the details within the framework
    • look across various functions for solutions
    • move beyond your own functional area when required
    • as opposed to marketing which is
      • minding the day to day activities
      • moving the levers to drive conversion rates
  • Growth mindset
    • be ready to go where the business needs you
    • Be hypothesis driven
  • market focus
    • actively monitor the markets
      • define a new category
      • size of market
      • competitors
      • disruptors
    • read earnings report of company and competitors
    • read more Wall Street Journal
    • Understand the P&L so as to understand how money is flowing through the company
  • Important allies
    • Someone on the sales team
    • Someone on the finance team
      • they know where money comes from and where money is spent
  • Brand values
    • clarify the narrative for your team to do their job
    • quite similar to core values
    • the personality that will dictate how interaction occurs at all touch points
  • Creating the customer communications play book
  • Analytics
    • on users
    • secondary data from researchers
    • to gain influence to own the P&L
  • Perpetual learner
    • The new paradigm
    • AI disruption: Department of defense using AI to parse through PHD thesis to figure out new technology to defend against
    • start utilizing the services of coaches for private help as the stakes are high
  • Marketing
    • demand generation
    • digital marketing
  • On hiring
    • ask about topics not related to their area of interest
    • see if they crumble under pressue
    • how did they turn a crisis into an opportunity.

Related readings

  • The hard thing about hard things, Ben Horrowitz
  • Beyond Product, Todd Wilms

An unchanging constant as the source of trust

Trust is the ultimate source of wealth in any society. The level of manifested physical wealth correlates positively with the level of perceived trust members of society have for an entity.

When an entity, be it a phenomena or a behavior, is observed to be consistent across time without much falter, it soon becomes accepted as the norm. Overtime this norm gets deeply embedded within a society and becomes an integral part of its culture. It thus becomes trusted and a source of credibility.

Societal commerce is built on trust. Trust accumulated through consistency overtime can be converted to other forms of tangible currency. These currencies can then be used to direct resources within the society towards the achievement of very material goals.

When comparing between two entities that are embedded within the cultural fabric of society, the one that exhibits a higher level of consistency inevitably gains more trust. This explains why while fiat currencies comes and goes, the value of gold remains consistent across time.

While it might be tempting to equate trust with value, there is a subtle difference. While trust elicits value, value need not necessarily elicit trust.

Expressing the entire civilization’s undertaking at any point in time as an linear equation, any essential variable that happens to be the most restrictive in supply at that point inevitably becomes the most valued. However wide fluctuations in value does not elicit trust in the long run.

Sources of trust

  • the rotation of seasons and our subsequent practice of agriculture
  • the constant speed of light and it’s use in Einstein’s theory of relativity
  • gold with its scarcity and it’s persist use as a store of wealth
  • well run institutions with well defined constitutions
  • fiat currencies with under sound government regimes
  • individuals who exhibit consistent behavior overtime

Qualities of viable currencies

  • Ability to be divisible
  • Ability to be moved
  • Ability as a store of wealth overtime
    • consistent levels of supply
    • scarcity

Functions of currencies

  • a means to facilitate transactions
  • a store of wealth

Examples of trust erosion

Example 1: Michigan Pulls $600 Million From Ken Fisher an individual After Lewd Remarks

Example 2: 1918 Germany as an institution, towards the tail end of WWI.

When it became evident that the country will loss the war, it experienced increased inability to raise debt to in domestic currency denomination to continue financing its war efforts. It’s currency soon lost it’s reserve currency status and it was increasingly forced to denominate debt in foreign reserve currencies.

Post WWI debts denominated in domestic currency where inflated away through printing of cash by the  German government to pay of debts denominated in foreign currencies.

Example 3: Africa use of glass beads as a failed form of currency

Europe was able to cheaply produce this in abundance . Europeans for a period were able to exploit this asymmetry by exchanging cheap glass beads for valuable natural resources. When value within the African society became depleted,  Europeans were eventually able to subjugate the entire African population and exploit them through the slave trade.

Example 4: Wall Street crash and the Great Depression of the 1930s.

Bankers increasingly became concern of easy credit driving share prices to stratospheric valuations. An eventual tightening of credit lead to rapid deleveraging within the system. The lack of trust within the system prevented the circulation of money and credit. The central bank ultimately had to step in to restore trust.

It did so by first preventing the flight to value. This was achieved through the banning of conversion of USD dollar to gold.

Example 5: An ongoing slow erosion of fiat money

With the deliberate pursuit of constant 2% yearly inflation by central banks around the world current fiat money are failed stores of wealth .

The currency of the Roman Empire is a perfect example of where we will be headed. Overtime less gold per coin is used. Their currency was ultimately replaced by paper which allowed rampant printing by the government during times of war. The effects of inflation eroded the Roman empires currency as a long term store of wealth.

Examples of persistent sources of trust

  • The institution of the Catholic Church
  • The consistent adherence to a set of sound principles by Berkshire Hathaway’s reinsurance business over multiple decades. 
  • Federal reserves consistent adherence to the dual mandate of 2% inflation and low unemployment rates


To build trust is to build wealth. The key to doing so is to adhere and operate on a consistent set of sound principles over across time and in all environments. Being slow and steady is a pre-requisite of this process.

Related readings

Launch Scale conference with Jason Calcanis Day 2

    Jason does an impression of Trump

Brandon Brown, Grin

The founder needs to sell the product first before bringing onboard any sales representatives. We need to build out the play book first. PlayBook must help uncover the pain and map the pain to the problem and sell the solution to the company

Need to figure out how to spend money in the engine to generate more than proportionate sales. Sales Pods proposed winning by design. Individuals from sales and marketing functions that are depending on each other and grouped together as a team. Around 35K per month to build out a sales pod. Growth rate doubled.

Yosiat Gimbernard, Odoo

Presentation format

  • Describes the difference between traditional ERP and single use case apps.
  • EPR has high implementation cost. Single use case apps are all over the place
  • Describes the pain of managing all the single use case apps.
  • Focuses on product and usability
  • 150,000 companies using Odoo

Roland Ligtenberg, Housecall Pro

The Viral evangelism loop characteristics. Always ask them how they hear about the company?

Once you have a base of users that are interacting more frequently with you, do start thinking about how to implement the evangelist program.

  • buys product
  • loyal customer
  • helps you find other customers
  • and helps find other evangelists.


Written component
  • Title of program
  • Who we are targeting
  • What they need to do to qualify
    • needs to be objective / quantitative
      • 100% profile complete?
    • challenging but not unobtainable. Only the top 10% can qualify
      • minimum 15 reviews with a 4.5 star average
    • hijack the endowment effect
  • Why should they do it
    • exclusive. Its earned and not bought
    • priority access
    • generate status
    • make sure you are listening to them and show them respect
    • make sure you respond fast
Visual component

A soldier will fight long and hard when given a piece of ribbon. Give me enough medals and I will win the war.

  • Need to give them a badge
  • recognition
    • offline: see them face to face so things are more impactful
      • example
        • meetups
        • events
        • Conferences
        • Tradeshows
      • mastermind events
      • recognized in front of their peers
      • small little tokens make it feel real
    • online
      • internal and external communities
      • FB groups
      • Forums
      • Directory
      • Spotlights
      • Case studies
  • Create assets
    • makes it easy for them to brag
    • leverage curiosity to increase virality
    • allows for easy to reuse
    • physical User certificates that is hand signed.
      • they build shrines?
    • give them Stickers they can put on their physical accessories
      • their customers see it
      • their competitors see it
    • Create Facebook and Instagram content they could reuse

Ashley Whitehurst, Syndicates Launch

The investment funnel

  • Online/Written Content
  • In-Person Education
  • Accelerator
  • Syndicate – funding size 100K – 650K
    • Lead
      • 20% carry
    • Backer
      • well connected high network individuals
    • Startup

Syndicates are useful for closing the current round. Flexible investment amount.

Keeps your Cap table clean.


  • Fees range from 10-15K so if lower than 250K not suitable
  • Too slow 1month to close
  • If privacy is an issue then don’t use it.

Minimum viable metric

  • has syndicate lead
  • investors lead for the round
  • 50%+ of the current round closed
  • 18-24 months of runway
  • 50K MRR w/50%+ Mom Growth
  • 10,000+DAUs w/5% + WoW growth

Due diligence

  • P&L
    • not tracking revenue
  • Org chart
  • Cap Table
    • Lack of vesting schedule
    • Founders is fully vested
    • Dead weight on the cap table – owns more than 10% of the equity that is no longer contributing
    • founder is the only full time employee
  • Detailed bank statements
    • low bank balance
    • paying personal rent out of the company
    • slow growth
  • Founder Q&A via webinar
    • 70+ investors
    • Need a FAQ documentation
      • 30% about product
      • 25% about performance

Why syndicate investors are passing

  • usually just invest in the founder
  • lack of moat
  • valuation is too high
  • market is not too big
  • not part of his investment thesis

The wire and sign for banks it a painful process. Vacations and burning man get in the way.

Investor qualification

  • making more than USD200K per year or
  • asset has more than USD1million

Aileen Lee, Cowboy Ventures

Worked with Mary Maker who is one of the world’s class research analyst. The willingness to have conviction and willingness to standup on what you think when no one else believes it. The early believer of Amazon.

Current trends

While software is eating the world. A lot of the companies that do not have profit margin structure of software companies are being invested as if they are software companies. WeWork is one of those classic examples. Its becoming hard to raise money for businesses and for certain people. Ratios will collapse.

We are in major tech trend right now. Priorly was social which made marketing easy. Cloud, SaaS and mobile made it easy for people to dislodge competitors. These trends are around 15 years old already. Investors are always ready to deploy cash.

War chest strategy

Real Estate Tech was an up and rising trend which allowed the ability to deploy capital. There is too much money chasing too little opportunity. WeWork has something physical so it feels easier to value, aka real world virality like Uber.

For 5 to 10 years the ecosystem has been in this war chest strategy paradigm. Investors invest in growth. They were willing to fund 20% growth  versus 10% while burning more. It pushes the founders to take the money and promise the moon or blow up trying.

The risk is asymmetrical between investors versus founders and employees, since investors just need to make sure one company makes it while the latter group are all in.

Slow and steady growth

The slow and steady growth examples. Founders firmly believe their products are differentiated and don’t want to pretend to be something they are not.

  • PagerDuty
  • DatatDog

Choice between these two tracks is based on personality of founder and investor expectation.

Due to the prevalence of war chest strategy the environment has became really sharky.

Dollar shave club

What is the biggest risk and who can address the risk. Micheal the cofounder was able to address the risk for the consumer digital marketing company. The category was open for disruption due to the way its currently being sold. Razors were easy to ship. Patents were expiring.


Just find one or two of the right investor to invest in the company. Don’t have to waste time listening to how other founders are killing it. Just focus on the batting average.

Need to have a unique insight into the market or a technology twist. A lot of the markets are well understood.

Lack of diversity in the VC

Most funds right now are private and very small.  Most VCs don’t have friends who are not white and not male.

The easiest way to fix the problem was to start her own firm. She was a venture backed CEO. Sales reps report progress and attend a lot of meetings but didn’t close.

Lots of people rejected her while raising money for CowBoy ventures. Most have never invested in a single founder and single GP fund. The three funds are from the same set of LPs so not much need to look for new LPs.

White men are hired on a promise and women/minorities are hired from the past.

Founders need to consider how they signal the market to change this trend.


Hiring female partners who don’t have cheque writing ability.

Macro economic trends

Concerned about our industry taking money from Saudi Arabia

Investor assessment criteria

  • tight presentation
  • founder understands product and market
  • Clear revenue model
  • huge potential market

Guillaume Cabane, Growth Advisor at G2

Key to success product and distribution

For distribution, create a distribution moat.

Distribution channel saturation.

Google CTR is dropping

Facebook has finite inventory. Cost per click has increased by 50% within the past 5 years. Not going to be viable comparing against LTV of customers.

Move beyond average. Forecast the value of each customer in the funnel and choose the right acquisition approach.

  • Self service
  • Enterprise
  • Budget per lead


Levels of influence in a purchasing decision

  • business colleagues
  • community
  • marketeer
  • sales person

outbound emails need to inject personalization by using their logo, their font, their screenshot.

Use clearbit to predict who is coming to the site. If potential high value customer make chat available. Drive engagement to hijack reciprocity.

Create an engagement that is cheap, qualified and memorable.

If selling complex product, remove pricing to avoid anchoring which makes it hard for sales people.

Test different UVP with very different valuation.

Enterprise B2B hard to use Facebook. Send data back to Facebook to train their ML ad model using our forecast.

Once converted users to dollar, then instead of tracking number of people converted then track how much dollar converted.

Nate Smith, CTO Lever

how to hire people?

Don’t write job description. It’s useless. Candidates just ignore them. Write the impact overtime. 1 month, 3 month and 1 year.

Hiring the candidates for roles once you understand. Helps interviewers evaluate

Saves time.

What they will own. What they will teach. What they will learn.

Really need to horn your pitch and track them via a  CRM. Keep selling them the culture. Make sure to chat verbally before providing a written offer.

Sara Deahpande, Maven Ventures

Levers to optimize funding round


process is in your control. Leverage momentum. Keep the investors informed in the process. You are always raising.

investor fit:

individual partners and firms reputation/brand as a working partner. stage and sector focus for the investor. chemistry

size of round:

start with how much you need. What milestones you will hit and how long that runway will be.


make sure not too high otherwise will be hard to justify the valuation of the next round. They might have ownership level requirements and how much they need to deploy


10% ownership at seed

20-25% ownership at A round

Trade offs.

valuation versus investor fit. Round size vs valuation. Speed versus valuation.

The success of the underlying business is the most critical criteria to even consider raising money.

VC operations

Assuming 50 million USD fund.

  • First 3 years to deploy
  • 10 years to generate returns
Fund allocation
  • 20% for operating costs and fees (USD 10 million)
  • 40% reserves for follow on rounds (USD 20 million)
  • 40% for writing initial checks to spread over 20 companies to generate yield for LPs. Aka USD1 million each. (USD 20 million)
  • LP expect 3X returns on the original 100% investment
  • 20% carry on returns
Industry benchmark

A strong return of an upper quartile VC firm for USD50 million injection will return 175 million which is 4.4X returns.

viable exit scenarios

Scenario 1 for USD50 million returns

  • zero dilution
  • 500 million exit
  • 10% ownership

scenario 2 for USD50 million returns

  • 50% dilution,
  • USD1 billion exit,
  • 10% ownership



Thoughts on excessive use of leverage

One of worst mistakes I made was during the 2015/6 Oil crash. I bought into shares of oil exploration companies instead of buying the oil directly. 

It was a very painful and expensive mistake. While the price of oil made a nice recovery since then, the exploration companies never made it through to the other side. Majority of them filed for bankruptcy during the height of the crisis. Unfortunately they took on too much debt when the times were good and were unable to finance the debts and ongoing operations through the continued sales of their inventory when situations turned south. 

The lesson learned is that when buying the dip, it’s important to make sure that not just yourself but the underlying assets you hold are resilient to the environment shock. Utilization of excessive leverage reduces the resilience. Over expansion into fancy offices and overstaffing is another form of excessive leverage. Tech startup founders are often caught red handed committing these mistakes. 

With regards to oil, until the world stops relying on plastic, chemical lubricants and switches completely to alternative forms of energy, we should not expect the price of oil to fall to zero anytime soon. 

A simple acid test to figure out the intrinsic value of oil is to ask your neighbor for his tank of gasoline for free. The most likely response you will get from him is a suggestion to go f**k yourself…?!?

Launch Scale conference with Jason Calcanis Day 1

Jason Calcanis on finding investments

Jason like Money. He believes it’s the fuel that make product and services that change the world. Looks for someone understand the customer, the product and the compound annual growth rate. Usually funds USD1 million for USD25K revenue?!? Is concerned about people who are high on the entitlement spectrum. Always prefer founders who are biased towards action instead of procrastination.

When dedicated event is created for under represented demographics, the diversity of founders brought into the pipeline increases.

Always ask how much have you raised and how much did you make last month.

He ensures his operation are cost effective and looks for founders who are equally scrappy.

Stay focus. The founder needs to be relentlessly focused on consumers and product.

Happy to start the conversation when already have 3-4 customers.

Jason Calcanis on PodCast

Create 2 pod cast per week where he interview founders. He builds an audience of startup tech listeners who want to find out how other founders succeed while stroking the ego of the interviewed founders.

Experiment with selling ad placements during within podcast.

Once its been the viability has been proven, hire a sales representative to do the selling.

For every 10 emails sent out 1 company will respond. For every 10 companies that responds 1 will sign up to do an ads placement for USD7500. That equals to a USD120,000 per month cashflow with a by-product of further entrenching Jason into the angel investing network.

Donna Boyer, VP Product Stitch Fix

Always ensure process is set up to allow for inclusion Pixie Dust. A process can scale if as it includes more users, you don’t need to manage larger excel sheets.

Always keep in mind why you are doing something – the vision.

Crystal, CEO Ruby Love

A financial controller by profession. Uses the same approach for interacting with people. Never took on any personal debt.

For bootstrapping use disadvantaged as advantages. Always do the math.

Watch what you are spending on.

Understand that potential users are searching for information on the web so use SEO to acquires users free.

Ignore media coverage on the competition. Everybody has issues. Just focus on ur product and not get distracted.

Focus on you people believes in you and ignore those that don’t.

You don’t need a cofounder if you do feel you need one.

Always think bigger.

Kept the efficiency while driving revenue during the first phase. Once the organization scales you need to build up an organization. Never loss sight of your customers along the way.

Don’t hire someone to interface between you and the customer. Always understand her emotional needs. The chat window she responds 24 hours a day. That is what drives her roadmap.

Hire using Fiverr all the time. First time hire was only done after hitting USD10 million revenue.

  • Potential product video: Voice Jungle

Zander Lurie, CEO, SurveyMonkey

Markets are volatile with trade war and recession coming soon. WeWork is an Enron like environment. Companies with bad governance will be punished by the public markets. IPOs are going to pull back now.

When building the board determine what is the role of the board of directors?

  • for younger companies, maybe use them for marketing plan
  • they play fiduciary type role as you mature

Very important to build trust as the CEO. You are asking people to work for you and people to invest in you.

Founders who ask for total control of board and then subsequently blow up is a failure of governance.

We are in an environment with endless capital for great ideas.

On WeWork

USD47Billion is a valuation that requires 10 plus years of successful execution. USD1 billion is probably a more reasonable IPO valuation

VC payout 2% management fee, 20% carry. That structure requires growth. So the gross profit (revenue – operating cost) is very import.

We need to institutionalize the systematic use of listening. The web is a really efficient place for feedback to surface.

99% of in-house designs within Apple never made it to the public.

Mar Hershenson, Pear VC

Need to show that a product is really sticky amongst a pilot user instead of having a few pilot users that try and leave.

Need to come to the VC with a team with the necessary skill set to execute on

If app is changing UVP to acquire or retain a customer, it is a 0.5% criteria for seed round. The next 0.5% is showing that you have a growth engine that works.

5K-10K revenue MRR to raise USD1million round.

To show a few thousand users that have high retentions. Doing cohort analysis.

Need to have really scrappy operations and iterate fast.

Ignore fake signals

To prove if I spend $X in Ads, I will get Y number of new users and $Z increase revenue.

Series A investors do not want to have product risk. So there needs to be a strong product manager.

Growth alive. If shut down acquisition, then

3-5X growth in the next 18th months. Venture wants to be able to get investment money back within 12months.