Network Updates, 8 August 2017
Welcome to our brief, weekly Network News Update. If you would prefer to receive the monthly eBulletin only, email firstname.lastname@example.org.
Log into TENx for complete details and RSVP information for all KF events, unless noted.
- August 13-15: Singularity University Global Summit, SF (special KF discount)
- September 14: KF Women’s Group breakfast. Hosted by Miriam Rivera (Class 15) at her private residence.
- September 22: NY Regional Chapter breakfast
- September 24 – November 13: Venture Deals online course (free)
- October 5: Defy Ventures visit to California State Prison – Solano
- October 22-27: Modules 2 & 5
Intercontinental Hotel, San Francisco
- December 8: NY Regional Chapter breakfast
- January 21-26, 2018: Modules 3 & 6
Convene, 101 Park Ave., NYC
- International Summit, April 22-27, 2018: Tel Aviv & Jerusalem, ISRAEL
- Greg Horowitt (Class 15) gives reasons to go for the bold in Entrepreneur video …
- In CNBC Africa article, Lexi Novitske (Class 22) explains how African entrepreneurs are solving data collection problems …
- Collin West (Class 17) says there’s a better way to build a network than by networking, and it’s based on science …
- Justin Hall (Class 20) speaks to CNBC on the difficulty of regulating ICOs without destroying the privacy that makes cryptocurrency tick …
- Class 19 Mentor–Fellow duo Ami Dror and Forsan Hussein collaborate in Chinese–Israeli EdTech startup for kids, coding, and cooperation …
- On the move:
- Yinglan Tan (Class 15) has left Sequoia Capital India to start his own fund
- Mamoon Hamid (Class 11) is moving from Social Capital to KPCB
- Lisa Skeete Tatum‘s (Class 4) LandIt is in the inaugural cohort of Morgan Stanley’s Multicultural Innovation Lab
- Speakers: Watch Clint Korver’s (Class 14) and Susan Mason’s (Class 2) PitchPerfect “VC Chat,” about the issues facing startups
- Job opportunity: (CONTINUING) Kauffman Foundation seeks a Senior Content Marketing Specialist; find the full details online.
This week’s blog selections:
- Keith Harrington (Class 20): “Filling the Entrepreneurial Finance Gap: Investing Where VCs and Banks Can’t,” about his firm’s revenue-based financing model for entrepreneurs not in the market for venture funding.
- John Kim (Class 20): “Culture, Power, and Doing Business in Asia,” about doing deals in Asia, where published financial information is scarce.
- Hana Yang (Class 20) co-authors an interview with Michael Staton and Jennifer Lee of Learn Capital as part of the First Republic Bank’s “Client Spotlight” series.
Greg Horowitt (Class 15) Delivers Nuggets of Networking Advice in Entrepreneur Video
Greg Horowitt (Class 15) delivers sound networking advice to kick off the month of August in an Entrepreneur video, “Need a Network? Be Bold.” In this short but informative clip, Greg reminds viewers that savvy networking includes—but should extend beyond—the readily accessible: People who limit their networking scope to a narrow radius are missing out: “What they don’t realize is that some of the most important people in their business are not going to be in town, or even the next town over. Use of social tools to grab their attention will be quite important.”
“Entrepreneurship is so important now that people will be willing to give you a few moments of their time,” Greg adds, “but entrepreneurship definitely favors the bold.”
Lexi Novitske (Class 22), Principal Investment Officer at Singularity Investments, co-authored “Africa’s Big Opportunity Lies in Data” for CNBC Africa. The zettabyte (ZB, a billion terabytes) may not be familiar to many people, but if the International Data Corporation’s prediction is correct, it will be. The venerable market research company estimated last year that by 2025, the amount of global data generated annually would increase from 10ZB in 2015 to 180ZB in 2025. Of course, generating vast quantities of data is easy, but collecting and analyzing it is not. Africa, as the world’s second-largest and second-most-populous continent, generates its fair share of data, but “although billions of data points are created on the continent every day as billions of cash transactions are made, only a minuscule amount is recorded in any way.”
The first task for entrepreneurs across Africa is to figure out how to collect that otherwise-lost data. Nigerian car-buying service Cars45 uses its inspection centers to gather data on used cars, which will eventually give it “enough data points to create an African version of the Kelley Blue Book”—and sell that data to other parties. In Kenya, mSurvey specializes in enabling businesses to contact customers to “develop detailed customer profiles and deliver targeted information to assist each customer cohort in making decisions,” but also develops mobile platforms and applications for other companies to gather data. One example is the online, mobile platform “Consumer Wallet” it developed with Safaricom to “capture information from daily text messages to monitor and map cash-based spending on Safaricom mobile subscribers. Preferences and expenditures will be pegged on housing, transport, food and education, to name a few.” To find the next billion-dollar success stories in Africa, venture capitalists need to find the best data scientists.
Collin West (Class 17), Venture Partner at Kauffman Fellows, wrote “How to Build Real Relationships, Rather than Networking, According to Science” for Venture Capital Journal, in which he describes networking as “stilted chit-chat with strangers wearing name tags and strained smiles.” He doesn’t enjoy it. The good news, he says, is that there is a better way to build those quality connections so critical to a VC—a way that is supported by science.
Read Collin’s full article to learn his four principles for building real relationships. He starts with the following maxim: always give first, without expectation of a return. Psychology’s Law of Reciprocity says that “when someone does something nice for you, you will have a deep-rooted psychological urge to do something nice in return.” Collin goes on to cover the nature of one’s professional network, as well as ways to build bonds quickly, even with introverted people. Collin’s approach demands more time and effort than traditional networking, but the science says it’ll pay off.
CNBC article, “It’s a Very Good Time to be a Money Launderer, and You Can Thank Cryptocurrencies,” quotes Justin Hall (Class 20), Principal at Golden Gate Ventures. We’ve reported in recent weeks on the basics of blockchain technology and ICOs along with the advantages and promise they hold. In the first six months of 2017, startups raised a record $1.27B using ICOs, and perhaps even more significantly, FinTech startups raised far more through ICOs than through VC investment. The chief concern lurking behind all this activity is that “anyone with an internet connection and a digital wallet can be part of a coin sale event,” making it easy to engage in fraudulent and otherwise illegal activity. So it comes as no surprise that the SEC recently issued an Investor Bulletin “to make investors aware of potential risks of participating in ICOs.” Singapore’s financial regulatory body and central bank, the Monetary Authority of Singapore (MAS), has issued a similar statement of concern.
Inherent to every blockchain system is the permanent, publicly-visible recording of every transaction, but the identity behind a transaction is only as traceable as that exchange operator makes it. Furthermore, companies and exchanges can pop up and disappear before governments have time to investigate, enabling transfer of large sums of money for the purpose of money laundering or terrorism. As ICOs become more prevalent, less-sophisticated investors are likely to participate “without necessarily being aware of the risk or challenges behind some of the platforms” and could easily be defrauded.
One key challenge for regulators is that the value of the tokens issued in an ICO can vary widely, from a functional action like executing a smart contract to a claim on an underlying asset like fiat currency. Some tokens come with associated rights that qualify them as a security, but many do not, making it difficult to craft widely applicable investment rules for ICOs. Justin points out that while the creators of blockchain and cryptocurrencies don’t trust central governments and banks—thus the role of third parties in enforcing trust in a blockchain—that decentralized system is what makes others nervous. As with many Internet-based innovations, the battle to come will be between those who advocate for the largely anonymous, distributed nature of blockchain technology and those who work to protect the public from the abuses that its very nature enables.
A recent Israel21C article, “Chinese-Israeli Ed-Tech Startup Teaches Kids to Code,” spotlights LeapLearner, the first Chinese–Israeli startup producing interactive software for children that teaches coding while developing interpersonal skills such as collaboration, creativity, and self-directed learning. “I had the idea for a company that teaches kids soft skills, and I wanted to start with coding because the process teaches children how to innovate and problem-solve,” says CEO Ami Dror (Mentor Class 19). “Whether you want to be a philosopher, doctor, lawyer, artist or banker, you must be literate in the language of the future.” LeapLearner, created in 2016, stems from Zaitoun Ventures, which is itself co-founded by Mentor–Fellow duo Ami and Forsan Hussein (Class 19). Ami is based in LeapLearner’s Shanghai office, while Forsan works from the Zaitoun Haifa office.
At first, LeapLearner’s pitch was met with some hesitation, as Chinese education firms believed the idea, while innovative, would be hamstrung by cultural differences. For Dror, these differences were key to the firm’s success, since the program combines “the Israeli ability to solve problems and deal with challenges from different angles, and the Chinese way of dealing with conflicts very harmoniously and getting things done quickly.” The multilingual educational software is slated for release in markets such as China, Latin America, India, and the Middle East; another goal is to make the software available free-of-charge to children in European refugee camps. Ami Dror and LeapLearner were also covered by CNBC earlier this year.
- Yinglan Tan (Class 15) has left Sequoia Capital India to start his own firm, Insignia Venture Partners, and is in the midst of closing his first round. More details to come on the size of the fund and its investment focus.
- Mamoon Hamid (Class 11, KF BOD) is moving from Social Capital to KPCB and will be a General Partner and Managing Member, investing in early-stage tech investments, with a focus on enterprise software. Partner Ted Schlein says, “[Mamoon] has emerged as one of the most respected venture capitalists in the Valley and has developed an impressive approach to investing and company-building. … He is distinguished not only for his investment acumen but also for his ability to work with founders and their teams.” [KPCB announcement] [TechCrunch article] [Forbes article]
- Lisa Skeete Tatum’s (Class 4) firm LandIt has been selected as one of the first 5 firms in Morgan Stanley’s Multicultural Innovation Lab to help propel minority-led tech startups. During the 4-month program, firms will work out of Morgan Stanley’s NY office, able to “tap into the bank’s networks to identify potential customers and investors.” The goal of the incubator is to “help entrepreneurs of minority backgrounds, who are often ignored by venture capital firms, scale and grow.” [Business Insider story]
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