Why Most Demos Confuse

Imagine you walk into that customer meeting, or come pitch us at Bloomberg Beta, and it’s time to show off what you’ve built.

So you start, where else, at the homepage of the site, or the home screen of the app, often using a demo account of a user enjoying the product… and chances are, if you’ve done your job well, that site or app is compelling.

Problem is, we’re already lost.


Because we’re people before we’re investors, or customers. And that means we’re imagining how we would experience your product, as a real user in the wild.

You, who have thought about this service 10,000 times more than we, arrive at that homepage with all kinds of context. You know why everything is there. We, seeing it for the first time, are usually just overwhelmed.

Demoing a product by starting with the home page (or, actually, starting anywhere on the website or in the app) is like a realtor showing you a house starting in the living room. What is this place? Why am I here? What is that funky sculpture?

This way of demoing seems backward. (Maybe we should rename home pages to something more accurate — they’re for experts, not beginners.)

Consider, instead, walking through the front door — having come from somewhere, paid attention to the neighborhood, the cars on the street, the front porch.

Start with the first moment a user might learn of your product — maybe it’s an email invite, or a text from a friend, or a notification of a forced install from their IT department, or they heard about the app from someone. Then show what that first-user experience looks like.

Better yet, invite us ahead of time so we can see it for ourselves. Let me explore, and in our demo ask me questions, delight me with elements I’ve missed, or tell me about other users doing cool things.

Yes, like a cooking show, you’re entitled to can some things to save time (example: skip the sign-up mechanics or, if you like, or show off your craftsmanship of an elegant sign-up flow).

If you think about the demo this way, you’ll gradually open the eyes of your audience so that when you do arrive at the actual service, they’ll be more likely to have that ah! moment.

And this goes beyond just the demo: most of us think of the entire product as what’s really only the “interior” of the house — the features, look, and flow of your site or app. We might be better served thinking of the product as including the “exterior” of how users will encounter it in the course of their day (the recommended text for sharing on Twitter, the email invites, etc.). We often think of that exterior as merely marketing, something to be added after.

One of our portfolio companies had this realization recently, when thinking about their daily email to users summarizing the insights produced by the service — something they’d created, as many emails are, to get you to click over to their website. But users love the emails so much they may never need to visit the site at all. As the founder said, “it turns out the email is the product.” [Update: This is ThinkUp and, in their continuing openness, they had shared this themselves.] Newsle, a personal news service in which we’re investors, focused almost exclusively on email at first and is only now really tapping their web presence.

Everything a user experiences about your service, inside the walls of your app or out, is part of the product. Put differently, the product isn’t the features you’ve built or code written, but the experience the user has with it. Some people would, correctly, simply call this “good design.”

To be clear, many products suceed despite an awful first-user experience or invitation flow. League of Legends, a beloved (if difficult!) PC game, tortures you before you get to play (interminably long download, etc.). Yet gamers have heard so many good things before they start that download that they’re willing to tolerate pain. So, your reputation with potential users is part of “the product,” too.

If you come in to demo to us, I hope you’ll consider walking us through the front door. Essays like this are part of how we create a context for you before you arrive, as is Bloomberg Beta’s full internal operating manual posted in public. The person who introduced you to me did the same for you. Why not give your product the same treatment…

P.S. While I was drafting this, my wife was sitting next to me. I asked her to look it over, and handed her my laptop. Before she started reading, her first question was “where will you post this?” She knew the reader’s context would differ depending on whether this piece was hanging in the living room or the front hall.

Exposing ourselves

Values are about taking chances — if it were an obvious choice, you wouldn’t need a value to guide you on how to make it. Value choices are rarely about right vs. wrong, they’re more often about one right vs. another.

To clarify our approach and our values, we (the Bloomberg Beta team) wrote up a few practices – effectively, the first draft of an internal operating manual.

Today, we’re taking a chance and publishing our internal operating manual, in its entirety.

One of the things we believe at Bloomberg Beta is that the current process for raising money in startups isn’t as good as it could get. For example, we’re a little confused as to why funding for startups comes in discrete rounds vs. being more continuous. We wonder why so much of the process is kept secret.

We value openness, because we believe we all make better choices when we expose ourselves to the input of others. We were one of the many who invested in AngelList because we philosophically support what they are doing to make early-stage investing easier to understand and do. 

In part, we’re inspired by what Bloomberg’s product did in its earliest days — it took previously-controlled financial data (the prices of bonds) and posted them on a system where everyone could see the same price. At the time, that was daring. Plenty of people made their living by controlling that information. Being transparent is chancy. 

You can gain advantages by keeping information to yourself. Though, as we thought about it, more and more of those advantages to secrecy — at least in the world of startups — seem like mirages.

We started asking ourselves why startups and investors generally keep the terms of their investments confidential. We didn’t have a great answer. We think that more shared data on funding startups will make us all better at it.

Around the same time, we started writing up our emerging practices for how we were running our fund — our “internal manual” — and then we wondered why we had to keep that to ourselves. So many of the questions we answer — what are we looking for in an investment, how long does it take to figure out whether we want to work with a startup, even whether we expect a formal slide presentation, etc. — are ones we found ourselves repeating in meeting after meeting. Some of it we think is distinctive, some of it totally commonplace, but it all reflects how we work.

We admire the success and support of more established venture investors; we also think we want to try things our own way.

We’re putting our manual on Github because we want it to evolve, on the record, over time and — to the extent others have input — we think it’s a way to collect comments and proposed changes. (We also think there is a trend of practices invented by software engineers — version control, in this case — taking over other aspects of work life.) Who knows, maybe someone will take us up on the open license to fork, remix, and make the manual their own.

As part of our effort to be transparent, in our manual we’re disclosing the average price of our investments to date. (You’ll have to read the manual to know.)

And we also started telling entrepreneurs that we’d be delighted to disclose, jointly with them, the specific terms of our investments. No pressure. But one intrepid team took us up on it.

Gina Trapani and Anil Dash are building ThinkUp, and they shared their plans earlier this week. ThinkUp helps analyze your participation in social networks so you can see yourself more clearly and participate online in a more honest, authentic way. ThinkUp is an active open source project which Anil and Gina helped create for the White House, and now they’re making it more accessible (today, to use it you have to install it on a server… not what most consumers are prepared to do). Gina and Anil are known to many in the startup community, and stand for much of what we stand for — trying to get it right, sharing your views in public, and bringing humanity back to our experiences online.

We invested $200,000 in ThinkUp in a convertible note with a 20% discount and a $6 million conversion cap. There, we said it.

We’re open to ideas for other ways we can make the process better, and be more transparent. We’re doing this so we can all get better at making startups work.

Some thoughts on where I think the world of work is going… 

A dumb question to ask an entrepreneur

“How’s it going?”

Seemed so innocuous, the first thousand or so times I asked it. Just curious. But 19 out of 20 times the answer was meaningless. Killing it, or crushing it, or whatever the expression of the moment was.

It wasn’t until I took a few bruises of my own, unable to close that one deal that you banked it all on, failing to raise money for something I believed in, not seeing the world unfold according to plan — that I realized why the question is inane.

How can you answer, with a straight face, how it’s going when at the same time you:

* Only have a few months of cash left, but are starting to see the first real signs you might be on to something

* Just had the hire you fought to win walk out on you, but are reading tweets from people who think the thing you just gave them is their <3 <3 <3

* See all the arrows pointing down, but someone smart is taking you seriously on giving you millions of dollars

* Had yet another article written about how you’re disappointing everyone, while you’re spending every day working on making your corner of the world a little bit better

* You can’t even get the numbers, so you have no idea how it is actually going!

The “how’s it going” question is impossible to answer because almost every startup is both thriving and dying at the same time.

Thriving because it is in the small minority defying gravity simply by continuing to exist, let alone grow — and dying because it would take so little to turn off the music with no chair left for you.

I found that entrepreneurs’ answers, including mine when I sit in that seat, depend more on personality than on any actual facts about how it’s going. And I was one of many who exhaled when I read Joe Fernandez’s piece, lifting the mask that entrepreneurs (and, often, so many others) wear to pretend we’re succeeding, instead of asking for the support of those around us — support that our families, friends, colleagues, and even strangers would be more than happy to give.

I’ll try to avoid asking the dumb question from now on — but I also invite anyone out there who feels like they’re having one of those days, to reach out or at least if you happen to see me that day, share. It’s part of the path.

Help deliver the smartphone of your dreams?

It may feel like our mobile phones are getting better all the time. But a few years from now, we’ll wonder why it took so long for them to have crackproof screens, plug into our desktop monitors and keyboards (bye bye PCs, or as Steve Jobs called them, “trucks”), and be free of pre-installed bloatware apps and showy animations.

For those of us who make apps, we wonder why we can’t get the mobile operating systems to do just what we want them to do – help us get access to the “guts” of the phone, so we can make our apps sing.

If you want that moment to arrive faster, there’s a bet to place.

Imagine if there were a high-end smartphone – a “superphone” – built as a reference for more mainstream phones to copy. With a can-only-be-harmed-by-diamonds screen. Now imagine that phone came with a truly open OS that was lean enough to be clean, and a chipset powerful enough to double as the engine for a desktop PC.

That’s the story Canonical is telling in their campaign for the Ubuntu Edge – their “Formula 1” smartphone, designed to inspire others to up their game. Ubuntu took it to the crowd – and they have 21 more days to complete a $32 million campaign on Indiegogo. They’ve already had the biggest week for any crowdfunding campaign ever, so far as I can see, raising almost $8 million.

Why should we care?

Not because Ubuntu Edge will ever be a mainstream phone (it won’t) or because Ubuntu will ever be a mainstream phone operating system (it almost definitely won’t).

Not because Ubuntu is technically “better” than Android (even if this is true, it doesn’t matter if it never gets critical mass).

Not because Ubuntu is a safe bet to deliver the hardware even if they do get $32 million (hardware, still hard).

Not because Ubuntu is a joy to use. I’m not technical enough to be on the Ubuntu train myself — I tried to install it on an old laptop, and as much as I wanted to love its spare cleanliness and speed, the applications kept crashing and the switch never stuck. I remain Ubuntu curious.

We should care because it just might help make all smartphones better.

Like in the web browser wars — Internet Explorer and Netscape before Firefox— open solutions embraced by hackers bring the future here faster. Android is one wonderful version of that — as is the new Firefox OS (targeted at more mass market uses). The Ubuntu Edge takes us a step further, especially on pushing what the features of a modern phone could include.

If we want mobile phones and software to be better, faster, we should all think about backing the Ubuntu Edge campaign.

If Canonical really wants to speed things up, they should go further and commit to open source the hardware: publish schematics, reveal production techniques they use to make the phone, share the specifics of their supply chain. They could do for the hardware what Ubuntu does for an operating system: harness the power of others.

The other reason to back this is to reward Canonical’s courage. They’re the first established company to really push a crowdfunding campaign for a new project. Until now, crowdfunding has been for individual creators and newly-formed startups who can’t get funded any other way. But crowdfunding is an honest and straightforward way to pay for a new project — ask real people if they want it. If they don’t, good thing you found out before you spent $32 million. Those people will also keep companies honest in a way that no investor (myself included) ever could.

Some believe this project won’t hit its funding goal. (If the Ubuntu Edge doesn’t get at least $32 million, it gets zero.) These crowdfunding campaigns often go on a funny curve—they start fast with all the initial excitement, slow to a crawl, then they kick into a sprint for the last leg as everyone takes their last chance to participate. They can jump to a different curve—but only if a new audience embraces them. And the more backing this project gets, the more it will inspire other handset manufacturers, OS developers, application developers, and maybe even consumers to want more.

So I backed Ubuntu Edge. Whether they make it or not, it feels like an important moment.

I’m curious where the great intellectuals of the Internet stand on this issue – so far, the discussion has mostly been on very technical blogs and trade publications. Let’s find out whether this matters.

Bloomberg Beta!

A few months ago, I quietly started working on something new. Today, show and tell.

It’s a fund, done differently – on the idea that entrepreneurs and investors aren’t so different after all. And it has one, special, backer: Bloomberg L.P.

The conventional wisdom is that creating a company and investing are not at all like each other. Investors put their entrepreneurs (appropriately) on a pedestal. Entrepreneurs know their sweat just smells different.

But this wisdom seems hollow. Some of the most helpful investors in startups I see are not only the former founders and CEOs — but current founders and CEOs. Venture gets more operational every year, with some of the bigger firms building out operating divisions that look eerily like shared central services in big companies (recruiting to be sure, but also marketing, business development, even product design). First-time funds go through some of the same pains as first-time entrepreneurs. Some experienced entrepreneurs are starting invest-and-make vehicles where they take multiple bets at a time, and funding or stopping their bets — a lot like early-stage investors. I used to call my former company, IGN, a “bet factory” – probably not so different from how a venture firm would describe itself.

The investors I most admire and the entrepreneurs I most admire even have similar personalities: curious but stubborn, humble but a little renegade, deeply principled, storytellers who also can spot when a pixel is out of place.

Bloomberg L.P. was itself created by just that kind of team, and has just that kind of culture. Many of the things we now see as central tenets of startups – a team with a controversial insight on a big market (in Bloomberg’s case, that transparency would transform finance), founder control, a living memory of hard-won customers in the early years – have all been part of Bloomberg from the beginning. They invested in an open office layout and even free snacks, decades before that was “invented” elsewhere.

Today a Bloomberg terminal, and news supplied by Bloomberg, informs the decisions of some of the most influential people in the world. As I got to know Bloomberg, it looked like no organization of its size that I had seen. They were willing to go to fascinating technical places (still make hardware!), in a surprisingly modern way (maybe more lines of JavaScript than anyone in the world!). They waste few movements, and can therefore really move.

Feels like a place to try something new. I admire the leadership team, and can learn from them. They approached me about how Bloomberg could use investing to have a stronger relationship with early stage technology companies, and agreed the way to do it was with a true fund, investing for financial return. The best entrepreneurs want their investors to be on the same side of the table, and need a structure that ensures that.

Bloomberg Beta is that structure. We are grateful to the first entrepreneurs taking this bet with us. And today we are sharing a few: Ron Palmeri (MkII), Jon Lee (ProsperWorks), Jonah Varon and Axel Hansen (Newsle), Paul Dix and Todd Persen (Errplane), Charlie Robbins (Nodejitsu), and Zach Sims and Ryan Bubinski (Codecademy). This pioneering little group has already made this a ball.

And a wonderful team is now working alongside me. Ultimately, entrepreneurs will decide whether to work with us based on their relationships with me, Karin Klein in New York, and James Cham, Shivon Zilis, and Dan Strickland here in San Francisco. 

As an investor, I’m planning to roleplay being the kind of investor I myself would want as an entrepreneur — as useful per minute spent as possible, low on the nonsense index, and aware of what I don’t know. Starting with that I don’t yet know how this will all unfold, and I’m eager to find out.

P.S.  Yes, I’ll still be involved with OUYA, the first-of-its-kind "unconsole" that Julie Uhrman, Yves Behar, and gang have created — in the same way, as chairman. The investors in OUYA have already taught me much about how to support a company, and I’m planning to learn more from them, too.

Being Present

Got this email from a CEO I respect. Struggling with one of the essential issues for any working person.

Respect went up 2x when I got it:

Team — Now that some of the chaos is over, I need to focus a bit more on the family — or at least give them the time they deserve.  To that, I am going to try the below schedule.  Of course, doesn’t apply to emergencies/time sensitive things but if you could help me out (remove my anxiety) I would be incredibly grateful.

8am - 5pm — 100% available
5pm - 8:30pm — radio silent (going to try no electronics)
8:30 onward — will catch up on emails/texts/calls, etc.
I’m just trying to be present with the family.  There will be occasions when we have a meeting run late or a call which is totally fine.  I can communicate this so it’s ok if we have a meeting that starts late — this is just a general guideline.
Feel free to ping me with any concerns about the above — obviously when I’m traveling I’m always available and again call with emergencies.

The Time for Parallel Entrepreneurs

The “parallel entrepreneur” idea has been around for a long time — since at least Edison. Even in technology, it’s been around since the beginning of the commercial Internet and even before.

But it seems to be intensifying now.

With betaworks, Science, Obvious, and others, some great entrepreneurs are making more than one thing at a time. They’re also investing while they build, and being flexible on the ownership and corporate structure for the products and companies they count as affiliates. Why?

The obvious: finding a new product’s market keeps getting less expensive. No need to commit to a single instantiation of how your product must be if you can try dozens of meaningfully different variations and get real user data. The Lean Startup movement has only accelerated this. Now, I’m side-stepping a lot of valid questions (some discussed in this wonderful Branch thread) about how to balance focus with the create-lots-of-things-in-parallel world.

Maybe less obvious:

The lines between products and companies are blurring. It used to be a product was owned by a company, and a company had one or more products — that was it. Now, with APIs, open source tools, products being launched before companies are formed, this rigid one-to-many mapping has broken, in a good way. The company itself is an old institution, it works well for many things (clarifying ownership and accountability) and less so for others (shepherding the messiness of new creation).

The professional divide between “operator” and “investor” is dissolving. Most entrepreneurs I know also invest in startups. Most full-time investors I know were previously operators. Many great talents I respect now have some-of-this-some-of-that professions (a fund that also builds startups, a side gig as a partner in a venture fund, etc.). Big venture firms now have substantial operating practices that recruit, market, design and do other day-to-day tasks once reserved for their portfolio companies. I do sometimes hear people saying “being an investor is a truly different set of skills from being an entrepreneur” — that may be true, but it is becoming less so every day.

There are natural reasons why both investing and operating is a good thing to do. Great operators allocate resources to different tasks — one of the most important resources being capital. Great investors have a deep understanding of the fabric of how stuffs get built.

Talent is getting more sophisticated, so companies can now recruit on messages other than “here’s our product vision.” A single emotionally (or financially) compelling hypothesis is still a great recruiting tool, especially for drawing the talent that likes to work on things where they feel a sense of purpose (the best talent!). But there are other recruiting tools: force of personality (or better, reputation) of an entrepreneur can really work now. And the evolving notion of a career — as a portfolio of activities vs. a succession of full-time jobs — means that talent is happy to pop in and pop out on projects in different and uncertain phases. This blurriness of professional affiliation is a real positive for parallel entrepreneurs.

The cost of specialists — and their value — keeps rising. Whether its A/B testing, acquisition marketing, SEO, not to mention software engineering — there are now phenomenally wise experts in each of these areas (and plenty of snake oil salespeople, of course). The right expert is worth it, but expensive, and may not be needed full time — so much easier to justify across multiple products. (This is a point Mike Jones of Science made in that Branch thread.)

Early-stage consumer products have become so competitive, that the “lottery” effect of finding a winner is becoming more pronounced. It’s just so hard to find a new vein that isn’t yet tapped. Early stage products, today, are a Plinko game.

That said, as with anything, true greatness may require that focus thing. I’ll leave that debate to… others, another time, something other than right now. Can’t focus enough to write that part up :)

Why I Liked Working for News Corp.

For longer than I worked anywhere else, I worked at News Corp. — and, with so much ink and so many pixels spilled saying this and that about the company, I thought I’d just add one closing note on my experience there. It was wonderful. At the risk of getting flamed, I was grateful to work there, and learned a tremendous amount.


The company gives its people room to do what they think best. I ran IGN for five years, and in that time felt my team had complete freedom to launch the products we thought best, kill the products we thought needed to die, partner with anyone we chose, and so on. We felt on the hook for our financial performance, but free to decide our own plans on how to achieve that performance. This was especially true for taking risky bets — zero feeling that one shouldn’t, praise when bets worked.

There wasn’t much nonsense. Whatever one part of the company might have been experiencing (and there was always something popping somewhere), we continued our work. I spent relatively little time making files ending in .PPT, I don’t think I ever got invited to serve on any committee, and generally my time was spent doing real work. Communication was informal and trusting.

There’s a sense of building to something more. It’s really hard to describe this one, but I never felt it was “just a job” or “just a company.” I also never felt any pressure to conform, ideologically or politically, or in any other way — just to do my best work, and try to help our audiences understand and enjoy their world. A collegiality emerged out of those of us working for News, across different countries and industries, some with the company for five weeks and some for fifty years.

Rupert. Could write a whole book here, and others have. I won’t say more other than that I so appreciated seeing him in action.

It wasn’t perfect, and of course all big organizations develop nutty dysfunctions, but it worked well most of the time.

I don’t think I’m the only one who felt this way. Just in the world of digital, look at all the people who took a step forward after working at News or are still there: Jeff Berman who just joined the (no-relation) BermanBraun today, Mike Jones and Peter Pham of Science, Twitter’s Adam Bain, Gravity’s Steve Pearman and Amit Kapur, Gogobot’s Travis Katz, Bleacher Report’s Brian Grey, Rovio’s Andrew Stalbow, Jorge Espinel, Jason Hirschhorn, Chris DeWolfe and Tom Anderson of course, Jon Miller, Jeremy Philips, and I’m sure many more will occur to me and they’ll email me to say I left them out. Yeah, you too.