ADVENTURE-BACKED

Startups (mine = Zylie), thoughts & things that inspire me. - Matt

[mattmccrty-blog]

The Magic of Magic

You know you’re at the crest of the on-demand wave when your girlfriend uses a concierge service to “mariachi-bomb” you and your buddy at a bar on a Tuesday.

Once I got over the fact that mariachi-bombing was now a thing, and once my buddy and I got comfortable with the fact that all of Croxley’s Ale House in Williamsburg had ceased watching the Rangers game and March Madness basketball and instead were eying us with the sort of bewildered curiosity one generally reserves for those who choose to eat hot, messy, open-faced sandwiches on the subway, I turned my thoughts to how this group of fine, charro-suited musicians ended up at our bar booth.

The answer, of course, was “Magic.”

Magic is the latest in—and I think the most literal interpretation of—the “Uber for X” startup gold rush. The on-demand economy is giving birth to so many iterations of this concept, it’s hard to keep up. But Magic caught my eye, and not only because they dropped a Mariachi band on top of hockey night. No, it was after I got a text from the girlfriend with a simple “So? What did you think?” that I sat back and marveled at the ease with which she had dreamed up, organized, and executed such a bizarrely hilarious experience on a complete and utter whim. I had to know more.

It turns out that Magic was born out of a weekend side project that a small team of YC founders hacked together while taking a break from their main startup idea, an app to monitor and improve your blood pressure called Bettir. It was something co-founder Mike Chen said he had always wanted for himself, a service you could shoot a text to and get *anything* you wanted.

The fact that you had to SMS your “order” was clearly a function of the constraints they were operating under, but to me (and probably them and many other users as well) it’s a great feature. Texting “someone” gives the service a feeling of humanity. In a world where things happen instantly at the push of a button, this felt different, more personal (yet still immediate). Because there was a real live human at the other end using natural, casual language and actively “working” on finding me a solution to my “problem”—whether it be mariachi-related or something else equally dire and pressing—I felt like this was a true concierge, and my subconscious was already accepting a premium price because there was nothing transactional feeling about the experience. Justin Kan had some interesting thoughts on this in a recent episode of Ryan Hoover’s Product Hunt Radio (starts at 3:38). Even when the price is brought up before confirmation, it’s part of a sentence written by a human, and it, at least for me, reduces the friction between acknowledging that price and replying “Yes.”

Of course, this service also crystallizes a lot of what’s crazy about startups at the moment (the fact that there were rumors they were raising $12M at a $40M valuation from Sequoia ratchets up the crazy a bit more too). The reactions have been mixed, pointing out that this feels like just another niche product catering to the valley’s elite and nothing more; that it’s solving a problem a million other companies already solve; and that it illustrates how lazy and entitled we as a society have become that we all need personal butlers at our fingertips 24/7. Some of those reactions are below:

The MVP approach of the product mixed with the massive virality it achieved (and the explosive demand it received) also raises concerns of:

1) Scaling - obviously there needs to be a good amount of automation introduced so they can move away from relying on humans for every request. As one HN commenter noted, if they could get the automation such that 90% of the requests were handled by computers and 10% were handled by humans (allowing for a true hands-on, above-and-beyond experience), perhaps then will their costs be manageable enough to scale to a real business. This would also help manage churn, because this is definitely one of those products where one bad experience could lose a customer immediately. Low response times and consistency are key in that case, as with any on-demand service, and the more technology is driving that, the better.

2) Pricing - While bundling their premium into the quoted price does reduce friction in the moment, their markups seem arbitrary and not clearly defined; better transparency and communication about that—a la Uber and its surge pricing issues-—would be important for gaining and maintaining customer trust.

3) Competition - I had forgotten that a few months ago I’d signed up to be notified when Operator, at the time a stealth startup coming out of Garret Camp’s Expa “startup lab,” launched. In the midst of the Magic hoopla I got an email alerting me that Operator’s beta was now live. I downloaded the app, flipped through a few How To Get Started slides, and realized Operator was a slicker, better-funded version of Magic. Except it was really pushing fashion as it’s primary use-case, at least to me. It was interesting to explore, because I could see they were trying to “inspire” me to ask for specific things, and they had a whole Discovery section to reinforce that nudge to get started. I actually didn’t even put a request through, because I didn’t need any clothes and I got kind of confused what else I should ask for. Nevertheless, they had a splashy article announcing their launch and amassed an impressive 80,000+ waitlist. I’m curious to see where this and other competitors take things.

4) Use-case - What Operator was trying to do got me thinking about intent when it comes to these concierge layers built on top of the on-demand ecosystem. When faced with an empty text box, what do you ask for? Is this a utility, a luxury, or just a novelty? I think what all these on-demand products are selling, when it comes down to it, is time. And how you position your product as it relates to time is important.

Most of these on-demand things follow a similar path across the spectrum of importance to daily life. They start out being viewed as a novelty (as Travis Kalanick says a lot, with Uber him and his buddies just wanted to be “baller in SF,” and Uber did that at the push of a button). Then it shifts to a mere time-saving luxury (it’s Saturday night and we’re late to a party, I’m willing to pay a little extra to get the four of us there on time in an SUV because hailing a cab right now will be a nightmare). Then it shifts to a basic utility, where Uber is the defacto choice for getting around a city (Hailing a cab? Calling a car service? What’s that?). The pricing tends to reflect this shift: as volume goes up and efficiencies increase due to better technology and operations, margins improve and pricing can decrease without killing the business, further increasing volume, etc. Obviously the current availability of growth capital to companies on this trajectory accelerates this process by allowing market leaders to decrease pricing substantially in order to capture more market share and squeeze competition.

(Chris Dixon wrote a great post about this phenomenon of important new innovations often looking like “toys” early on: “The next big thing will start out looking like a toy”)

But jumping the gap between novelty and utility (utility’s not the right word but something along those lines where a service goes from serving an occasional splurge to serving a routine need) is a difficult maneuver. There’s also an inherent catch 22 in the spread of these things: the novelty of the product or service is often what gets people talking, but redefining the value you deliver from novelty to “oh, I actually need this” is where the magic happens (sorry, I got this far without doing that, it was inevitable). I’ll be interested to see if Magic (and Operator, and any other startups that jump into this layer of the on-demand ecosystem) can find their use-case that demonstrates a more utilitarian value than simply “get anything on-demand.” As Ian Hunter, one of the founders of Zaarly, mentioned on Magic’s ProductHunt discussion, “the problem is quite obviously fulfilling blank slate requests.”

[elleluna]

Manta

[mattmccrty-blog]

Sometimes a piece of art just puts you at ease and you let out a smiley sigh. This is one of those pieces.

[mattmccrty-blog]

"Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn't really do it, they just saw something. It seemed obvious to them after a while. That's because they were able to connect experiences they've had and synthesize new things."

- Steve Jobs

Ever since I heard Steve say these words through a garbled recording of some design awards conference in the early 80’s (on a remarkably great playlist Ashton Kutcher made on SoundCloud to prep for his role in that awful jObs biopic), I see these words everywhere.

The most recent manifestation of them is this Beats Music/Apple news, and the origin of the whole Beats brand. There was the Monster Cable technology that Kevin Lee had chased for years before finally striking a deal with Beats that ultimately screwed his and his dad’s whole company out of any ownership. There was the purchase of MOG to power the me-too streaming service that became Beats Music. The crowning of Dr. Dre as the face of the headphones and thus making them a must-have fashion accessory. The shouting of the word “curation” at every turn with the launch of the streaming service with Ian Rogers doing most of the talking. And the deep music industry connections from the man behind the curtain, Jimmy Iovine (it didn’t hurt that he had convinced Universal and some executives at Warner to invest in the venture, making them a nice windfall profit in the process).

All of those components would seem disparate at the get-go, but came together as one big money-making symphony with Jimmy as the conductor last week with announcement of Apple buying the company for $3.2 billion.

Two people I love who cover the media industry—Jason Hirschorn and Bob Lefsetz—both invoked this wisdom from Steve in their reporting on the news. And examples like these just make that wisdom all the more crystallized. That’s some pretty good connect-the-dots work right there.

[continuations]

I have been writing a lot about wealth and income inequality and I am readingThomas Piketty's Capital in the 21st Century (review forthcoming as soon as I am finished). So it seems appropriate to ask how I feel about the wealth being created by tech startups for entrepreneurs, early employees and investors (which of course includes VCs like myself). I have hinted at this here on Continuations in the past in a post about Twitter but it is worth clarifying. I believe that a large component of this wealth is random — or if you so want: luck.

Maybe the perfect illustration of that random component is Brian Acton, the co-founder of Whatsapp. He famously tweeted about being turned down by both Twitter and then Facebook as an engineer in 2009. If either one of those jobs had come through it seems highly unlikely that Brian would have joined Jan Koum in the fall of 2009 to work on Whatsapp. Which in turn would have made it pretty unlikely that Brian would have made hundreds of millions of dollars when Facebook acquired WhatsApp.

My personal story is similarly full of randomness. I spent all of 2003 trying to buy a traditional software company with the goal of then Internet enabling it. Together with a friend and partner we got super close to buying the leading trucking software company in the US which was headquartered in Cleveland. The deal fell apart at the 12th hour over a sales tax liability (that later turned out to be trivial — I will at some point blog about the details). In any case, had that deal happened I would have been in Cleveland instead of teaming up withJoshua for the wild ride that was delicious and subsequently joining USV.

If you want to argue that this entrepreneurial or investor wealth creation is not random to a large degree, then you would have to believe that people like Brian (or myself) have some skill or ability that is thousands or even millions of times larger than that of others. I personally find that preposterous. Just to be clear, I am not denying an element of risk taking, smarts, etc. — clearly you have to work for a startup or become and investor to begin with if you want to have a shot at this (as in the joke of the person praying for years to win the lottery only to finally hear God speak “buy a lottery ticket”). Beyond that though much depends on being in the right place at the right time.

At the moment  randomness is amplified significantly by the winner-take-all characteristic of many markets. The leading service or app in a category with network effects can be an order of magnitude or more larger than the next competitor and can do so on a global scale. Or put differently, the potential size of the lottery tickets has increased substantially. We have had a similar period in history during early industrialization.

PS Some further clarification on the randomness aspect. I am not arguing that the emergence of a company such as WhatsApp is unlikely (in fact the opposite). I am talking about the probability of a particular startup becoming that and of a particular person to be a founder of or investor in that startup.

[mattmccrty-blog]

Had this same discussion over Easter dinner yesterday and we came to the conclusion that generally people who acknowledge that at least a portion of their great success is the result of a "lucky break" somewhere along the way are much more tolerable/humble/fun to hang out with than people who attribute 100% of their success to their hard work/smarts/genius. Those people tend to be assholes.

Not to say the girl or guy with the lucky break didn't work their ass off to make the best of it, and of course they did, but there are also a heck of a lot of smart, hard-working people who haven't had the same kind of success, however they define it.

[xlrecordings]

JACK WHITE - LAZARETTO. The new album, 9 June on XL / Third Man Records.

[mattmccrty-blog]

Just relax...

credit: /u/Aaragon

[corealiscreative]

Ira Glass | The Gap (Advice)

To all of you new designers who are wet behind the ears, just starting off in your careers. Listen to this advice, it might be the best bit you’ll ever get.

via: vimeo

[mattmccrty-blog]

Yes. Yes. Yes.

[maxistentialist-deactivated2020]

I pictured how people play, one hand holding the train strap. When you play game on a smartphone, the simplest way is just tapping.

Dong Nguyen, on designing Flappy Bird (via maxistentialist)

[everythinginthesky]

One of the first items sold on [eBay] was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer was broken. In his responding email, the buyer explained: “I’m a collector of broken laser pointers.”

eBay - Wikipedia, the free encyclopedia (via lauraolin)

The internet, ladies and gentlemen.

(via mikerugnetta)

[maxistentialist-deactivated2020]

According to Matt Groening, [John] Swartzwelder used to write [Simpsons] episodes while sitting in a booth at a coffee shop ‘drinking copious amounts of coffee and smoking endless cigarettes.’ When California passed an anti-smoking law, Swartzwelder bought the diner booth and installed it in his house, allowing him to continue his process in peace.

Wikipedia, John Swartzwelder (via maxistentialist)

[kenyatta]

Every airline flight in the world over 24 hours

via airtrafficlive and washpo

[mattmccrty-blog]

Wow, such flights. Much awesome!

[seymour---krelborn]

LIFE HACK IF SOMEONE IS REALLY EXCITED ABOUT SOMETHING TRY TO BE EXCITED FOR THEM OR AT LEAST PRETEND TO BE AT LEAST SLIGHTLY INTERESTED BECAUSE NOTHING FEELS WORSE THAN EXPRESSING SOMETHING THAT MAKES YOU HAPPY ONLY TO HAVE PEOPLE TELL YOU TO CALM DOWN OR IGNORE YOU COMPLETELY

[mattmccrty-blog]

My underlying concerns in the book are issues that I struggle with in my own life: How do you do meaningful creative work while also earning a living? Is it better to devote yourself wholly to a project or to set aside a small portion of each day? And when there doesn’t seem to be enough time for all you hope to accomplish, must you give things up (sleep, income, a clean house), or can you learn to condense activities, to do more in less time, to “work smarter, not harder,” as my dad is always telling me? More broadly, are comfort and creativity incompatible, or is the opposite true: Is finding a basic level of daily comfort a prerequisite for sustained creative work?

Daily Rituals: How Artists Work by Mason Cure

A book detailing the daily routines of people like Kafka, Wolfe, Karl Marx, Agatha Christie, Woody Allen, Dickens, Picasso, Gershwin? Yeah, I'm sold. Just got bumped to the top of the list.

As someone who, no matter how busy, is constantly inspired to fiddle with some side project but finds too many excuses to dive deep enough, this topic is important to me. And if Anthony Trollope could write 3,000 words every morning before leaving for work at the Post Office, where he held a job for 33 years while writing more than 2 dozen books, then what's my excuse?

[mattmccrty-blog]

This is a gosh darn terrific presentation. Bravo.

[mattmccrty-blog]

The moment that you feel that, just possibly, you’re walking down the street naked, exposing too much of your heart and your mind and what exists on the inside, showing too much of yourself. That’s the moment you may be starting to get it right.

Neil Gaiman's Commencement Speech at the University of the Arts, 2012

Was reminded of this in an email from Tim Ferriss today, referencing his incredibly honest "Productivity" Tricks post from last month. It doesn't get much more inspiring than that!

[mattmccrty-blog]

The safe (simple agreement for future equity) is intended to replace convertible notes in most cases, and we think it addresses many of the problems with convertible notes while preserving their flexibility. In addition to being simpler and clearer, we intend the safe to remain fair to both investors and founders.

Paul Graham - YCombinator Announces safe, an Alternative to Convertible Notes

Haven't read any of the documentation yet, but knowing YC's propensity to innovate their "product" to find a happy medium between investors and entrepreneurs, I'm excited about this!

[maxistentialist-deactivated2020]

Cards Against Humanity’s “$5 More” Black Friday Sale

A lot of people have been curious about how our “everything costs $5 more" Black Friday sale worked, and if it was successful for us.

...

We initially started talking about doing a Black Friday sale over the summer, and came up with the idea of a “$0.01 off” coupon. I liked the idea, but have always maintained a policy of no deals, no discounts, and no sales  for Cards Against Humanity, even during our Kickstarter. To me the game is always $25, it’s never another price, and doing any kind of deal or discount undermines the simplicity and honesty of the game.

...

Execution

Nothing crazy here. I put together a landing page and we replaced all the “buy” buttons on our site with the new pricing. I edited the FAQ to include:

Why do all of your products cost more today?

We’re participating in the tradition of “Black Friday,” an American holiday celebrating a time when the Wampanoag tribe saved the settlers of Plymouth Colony with incredible deals. All of our products are $5 more today only, so you can enjoy buying them that much more.

I’m mad that you’re making a joke about Black Friday.

You’re probably a bad person.

...

Reception

The sale made people laugh, it was widely shared on Twitter and Tumblr, and it was the top post on Reddit. The press picked it up, and it was reported in The Guardian, USA Today, Polygon, BuzzFeed, All Things D, Chicagoist, and AdWeek. It was even the top comment on The Wirecutter’s front page AMA, which had nothing to do with us.

I was pretty sure that our fans would be into the “$5 more” sale, but I had no idea that it would turn a day where we’d normally be totally overlooked into a huge press hit for the game.

Sales

So how did we do? A little better than last year. We kept our position as the best-selling toy or game on Amazon. My guess is that peoples’ buying decisions just weren’t that affected by $5.

The interesting thing to note is that we got a nice lift in our sales the day after Black Friday (“Regret Saturday”). That might be from people who were waiting to buy the game until it came back down in price, or, more likely, those are sales from people who heard about the game after our Black Friday press. Not bad for an ad that paid us to run it.

[mattmccrty-blog]

This is just terrific. Was equally stoked on Everlane's Blackout for Black Friday stunt last year. We had shut down our site on Thanksgiving this year because, well, it's just ridiculous that people were getting up from family meals early wait in line at Walmart to get a "deal" on a TV they didn't want or need in the first place.

But Cards Against Humanity really pulled off a winner here with a campaign that was as simple and clever as their product. Brilliant!