Thursday, February 25, 2010

Pitch Deck Study Hall

There has been a lot of chatter in the NYC VC ecosystem lately about Office Hours. The idea is a VC hosts a 1-2 hour time in which entrepreneurs can stop by and spend 15 minutes with the VC to get some feedback on their startup.

I love the idea of Office Hours, but my firm is based in leafy Larchmont, so I'm not sure anyone would make the trip. :)

Not to be deterred, here's my Manhattan-challenged twist: Pitch Deck Study Hall.

If you would like confidential feedback on the structure of your pitch deck, the content, a section, the idea itself, or anything else, send me your deck. I'll block off 2 hours on my calendar next Friday to go through as many decks as possible (first come first serve).

I'll send any notes I scribble on your deck your way, as well as any other quick thoughts I may have.

I promise to keep the deck (and my feedback) completely confidential.

And in case you're wondering what's in it for me, I will direct you to my blog post on VC's freemium model.

So if you're interested, please feel free to shoot me an email at sarah [at] bvp [dot] com.

Sunday, February 21, 2010

Why aren’t there more women in startups? Some new data.

(Hat tip to Christine -@cklemke, COO of Sense Networks- for help on this post!)

It’s become a common question: Why aren’t there more women in venture funded startups? I speak to venture backed startups all the time. Unfortunately, more often than not, I don’t see a single female on the executive team roster. Over time, I’ve developed a hypothesis. For some reason, in the rare occurrence when I speak to a female CEO, it’s felt to me that I’m much more likely to find another female face on the company roster. It got me curious: Is this true? Are there actually more female executives in female-CEO led companies than male-led companies? If so, there are a number of implications.

To answer this question, Christine and I have done some good ole fashioned data collecting. Unfortunately, this has been a much more time consuming task than we had expected, so we’ve only gone through the US portfolio of three VCs: Accel, my firm Bessemer, and Sequoia (210 companies in total).

Given the small sample size, and the hot-button nature of the subject, let me first disclose what this data set is *not*:
  • It is *not* statistically significant. There were only eight female CEOs in the sample set.
  • It is *not* a complete data set. 210 companies out of several thousand.
  • Christine and I originally pulled this data Sept-Oct 09, so some of it may already be out of date.
  • Also note: I only counted VP and higher level executives and I excluded companies that didn’t list their executives team on their website *and* didn’t have a LinkedIn profile for the company (i.e. I couldn’t get accurate data). I also excluded companies that only had one executive (the CEO) for the obvious reason they haven’t hired any executives.
Given all those caveats, why publish the data? I can’t help but think this is an interesting dataset to understand, and the initial results are intriguing enough that I think it is worth trying to get more data. That said, Christine and I just can’t do it ourselves. So this blog post is actually a plea for help: I’m posting the data set in Google Docs here. It’s read-only for everyone, but if you’re interested in contributing to the document, please email me and I’ll invite you.

Okay, okay. It’s not complete. You get it. So what did I find in the intial sample?
  • There were 1219 male executives (90% of sample) vs. 134 female executives (10% of sample).
  • 3.8% of the CEOs were women (8 out of 210). (Which coincidentally, is around the percentage of women who are CEO of a Fortune 500 company – 3%.)
  • 125 of the 210 companies (60%) did not have a single female on the executive team.

For the 134 female executives, the breakdown of the executive roles held by those women is (I thought this was interesting and not what I expected):

Now the money question: In male-led vs. female-led companies, if we exclude the CEOs in both cases, what percentage of the executive team is female on average?

If this turns out to be directionally correct, there are a number of repercussions. But in the absence of a more complete data set, I'm reserving judgment for now. If you're interested in helping flesh out the data set, please drop me a line!

Wednesday, February 10, 2010

Poking the bear: Twitter should eliminate its 140 character restriction

140 characters. This is the number that Twitter will both live by, and die by. Its simplicity is on the one hand, part of the reason why Twitter has exploded the way it has, but on the other hand, I believe it will ultimately limit Twitter’s potential US audience (and equity value). Sooner rather than later, I think Twitter should eliminate its 140 character restriction in the US.

First, let’s remember the reason why Twitter was restricted to 140 characters: SMS. Twitter was envisioned as a SMS service to communicate with small groups. Because SMS had a 160 character limit, Twitter took 20 for itself and the 140 character limit was born.

This turned out to be a genius move. In a world where efficiency and attention are in short supply, there was something immediately refreshing about Twitter and its character restriction. It created a culture in which people got to the point. You had to. So what started as a limitation necessitated by SMS, became an integral part of Twitter’s identity and culture even as people in the US increasingly consumed tweets via apps or the web. SMS or no SMS, 140 characters it was.

But has the 140 character restriction outlived its purpose, at least in the US? Increasingly less people use SMS to tweet. And 140 characters is, well, restrictive. Facebook, by comparison, is a free world. I don’t know about you, but I love the feeling of “tweeting” in Facebook. I don’t have to edit an update by changing “great” to “g8” or, I’ll admit, condensing two sentences into one. Add to that Twitter’s foreign language of @’s and #’s, and it’s just easier (and less intimidating for a newbie) to type a status update in Facebook than Twitter.

Consumer adoption is all about easy. How do you make a web or desktop as stupid simple to use so that it can jump the shark from techies to mainstream? Facebook wins that battle easily. Meanwhile, Twitter’s adoption has stagnated.

Don’t get me wrong (before I lose all my twitter followers!): Twitter and Facebook are fundamentally different platforms. For one, you can’t follow people asymmetrically in Facebook like you can in Twitter. Add to that the way Facebook threads comments versus the @ nomenclature of Twitter, and Facebook lacks the feeling of an open community that Twitter has in spades. But my premise here is that people either primarily Tweet or write Facebook Status Updates, not both. While it’s not a zero sum game, Twitter should want to get the Facebook users that are already posting status updates to make Twitter their primary base. Once you do, you get sucked in by Twitter’s community.

To this end, there are several things Twitter can do to improve Twitter’s ease of use. One of those things is to eliminate the 140 character restriction.

What would happen if Twitter eliminated its 140 character restriction?

First, let me admit that the Twitter community would throw a sh*t-show. Changing how RT’s were done was enough. Can you imagine eliminating the 140 character restriction?! Hah! But Facebook has gone through these types of backlashes several times (remember when they rolled out the newsfeed?) and look at where it is now. So let’s imagine for a second that Twitter decided to throw caution to the wind and eliminate the restriction. Would the characters hit the fan?

Facebook should be a good indicator. There is no character restriction (or even concept of characters) on Facebook. Even so, the longest status update I see in my newsfeed right now is exactly 200 characters. Could that message have been pared down to 140? Sure. But it’s not like people are writing novels in my news feed, making me wish I could enforce a 140 character restriction on them. I doubt I have a unique Facebook experience. Instead, I think a “status” culture has been established. Facebook status updates aren’t a diary or a blog entry. Neither is Twitter, with or without any character restriction.

Even if all of a sudden the floodgates opened and Twitter became overwhelmed with new members writing long tweets, you don’t have to follow those people. And anyway, if some of the people you do follow start breaking the 140-character rule, is that really more annoying than the automated spitter you see in your stream? I would take a 200 character tweet over a new badge update (~64 characters) any day.

What it comes down to is, would the elimination of the 140 character restriction (at least in the US) ruin the Twitter we know and love? I just don’t think so, and I’ve been wavering on publishing this post for a couple weeks now. In the end, what makes Twitter so enjoyable is not really its short-and-sweet, get-to-the-point feeling. It’s about the community, the conversations and interactions. That won’t change if people can tweet more than 140 characters, but the community should grow.