Roy Bahat
Head of Bloomberg Beta & lecturer at UC Berkeley
Discussion
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Roy Bahat
@roybahat · Head, Bloomberg Beta
Hi I’m Roy Bahat... I invest in companies that make work better, and think and write about the future of work. The fund I started, Bloomberg Beta, open sourced our whole operating manual, so I already said most of the things. Before becoming a VC, I tried to make my own work better, mostly while I ran the videogames media company IGN. I hired engineers without looking at their resumes. I also co-founded the Kickstarter-backed game console, OUYA. In my next life, I play Werewolf every day.
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Anil Dash
@anildash · Cofounder, ThinkUp
What was the business case behind you choosing to be so transparent about how Beta works?
@anildash As a founder, I wanted investors to be less secretive. I'd wait a week to get a meeting with someone just to feel dumb that I asked them to fund something they didn't want to fund. I'd burn valuable time talking to them about things that were just obvious to them -- "how big a check do you like to write." So, when I found myself repeating things in meetings, I realized it was time to fix that problem.
Also, we try to think like a founder here -- so many are software engineers, and if they repeat themselves, they automate it. Our manual, posted in full on GitHub (http://tiny.cc/manual) is our attempt at DRY -- don't repeat yourself -- we're automating the boring parts of our work away, which is sharing the basics.
@anildash And, Anil, we so appreciated you taking us up on the offer to make our investment in you transparent, talking about terms, and how it came together. I took a page from you on how open you always are in your thoughts on things. #proudinvestor
Ryan Hoover
@rrhoover · Founder, Product Hunt
Roy! I remember when we met nearly two years ago when Product Hunt was a side project. I asked you for fundraising advice (I was still debating what to do with this thing) and your response was very different than what someone might expect from an investor.
Of course, the decision to fundraise is entirely contextual but in general, what advice would you give someone who's considering it?
@rrhoover I remember it vividly, since you knew so well what you wanted to do :) I often ask founders why they want venture money. The answer to that question is the number one reason why I do or don't fund someone... because so many people want it by default.
You ask them and they have this stunned look like, what do you mean? That's the way to build a company! So many companies -- Bloomberg LP! -- were built without VC. There isn't some rule that if you want to build a company you need VC. The time to take VC is when it's the only way to build the kind of company you want -- one that puts growth above everything else, usually, and one that can't be funded another way (revenue, your own $, borrowing money, etc.).
You knew you wanted to build this kind of business and, hats off to you, you did. Thanks for inviting me!
Erik Torenberg
@eriktorenberg · Former Product Hunt
Roy - Welcome!
What's something you used to fervently believe that you now see as misguided?
@eriktorenberg When I started Beta, I was also working as chairman of the company I co-founded, OUYA. I used to think that was doable -- two jobs at once, really, in some ways (though my day job was v. clearly building Bloomberg Beta). Now, I realize that if you want to take care of yourself, and your family, then you have to just focus. It was grueling to do both together, and I wouldn't repeat that.
Kieran Snyder
@kieransnyder · CEO, Textio
Bloomberg Beta does some interesting annual research on the next set of founders likely to emerge. Can you say a little about your methodology? What variables do you model?
@kieransnyder Hi Kieran... we tried to predict who would start a company in the future, and it's a much more diverse group than the founders of today. (Yay.) We worked with UC Berkeley on it and the grad student who did the analysis basically found as many variables as he could that you could get consistently across everyone who works in tech -- professional history, education history, AngelList presence, etc.
The #1 thing that mattered: had you worked in a venture-backed company before?
teropaananen
@teropaananen
@roybahat @kieransnyder Doesn't concentrating on people who've already done the thing more than once just risk you missing the true "come out of left field" type of ideas?
@teropaananen @kieransnyder This is people who *worked for* a venture-backed company vs. starting one. I do think that startups are a profession, and this myth of coming out of nowhere is basically that. Still, of course the Zuckerbergs of the world are out there, and we need to find them, too. I hope that by expressing our intent to get to know people before they start companies, they'll seek us out. And I'd love to find a better way.
I also think most of the best startups are *not* "come out of left field" ideas. They are steady iterations on the status quo. Facebook was one of many college social networks. Tesla was one of many attempts at an electric car. The doing is audacious, not the conceiving.
Eric Soelzer
@esoelzer · Product at Howdy.ai
Hey Roy! It's really hard to define a company culture while feverishly working to launch a product in a new startup environment. What advice do you have for people in this situation?
@esoelzer Awesome question. I think that when we talk about culture in companies we usually imagine lots of different things that Big Companies do... mission statements, written values, review processes, the physical look of the office, what events feel like, what language people use, etc. And, of course, culture *is* all that.
At a startup, though, you can only do so much. So you have to layer it in... first, you start with the story of why you started the company. That's somewhat irreversible :) Then, it's the people you hire. Then, the software you choose to organize yourself.
I shared this short presentation with some folks at Stanford about the choices you make to start layering in your culture gradually... curious what you think.... https://www.dropbox.com/s/hb4ql4...
Lejla Bajgoric
@lejlahunts · Intern, Product Hunt
Thanks for being here :)
Is there an end-goal you hope to achieve with the work you do?
Melissa Joy Kong
@melissajoykong · Content, Product Hunt
I love Werewolf! @micah is DA BEST at it.
In your opinion, what is the most inefficient thing companies in the B2B space currently do? B2C?
@melissajoykong @micah played with us last time, it was great. Hit me up if anyone wants to play... I'm a villager.
Least efficient thing companies do is think wishfully when they could just test. As much as we've all read Lean Startup, and all, often we avoid testing things simply because it's scary -- the whole thing you've been pitching to yourself, your team, etc. might just. be. plain. wrong. Can't fear being wrong.
Melissa Joy Kong
@melissajoykong · Content, Product Hunt
Bloomberg Beta's GitHub page, under "What We Look For," says:
"We recognize that seeing early signs of an outlier is hard, and nobody’s cracked how to do it reliably. What we want is a reason to tell ourselves that a startup has a chance to be extraordinary. There are a few areas we search for signs: certain qualities of a founding team, an early product, and the right moment in a company’s life."
It *is* notoriously challenging to find an outlier early—probably because there are too many confounding variables. But, what do you think the difference is between the success trajectory of two competing companies—like Uber and Lyft—both of which are doing well, but one far outpacing the other?
Is it the board? Investors? Grit of a founding team? So curious to hear your thoughts on what makes a startup surpass a tipping point.
@melissajoykong So unknowable, and the game isn't over yet for them or any of those horseraces. I think it's more like a stew, where you can't point to one ingredient. That said, if you had to pick a single thing, I do think it's the CEO. The person who is ultimately in charge, whose (professional) life is on the line. That person's personality become the company's values, style becomes culture, preferences become policy.
(And I'm a skeptic that it's the investors, even though I am one. We help, we push, we provide emotional support -- but the founders are the engines. They deserve every ounce of glory and more, and sometimes succeed despite us.)
Kevin Ayuque
@kevinayuque
What do you think is the hardest part of building a video game console?
@kevinayuque Capital. A low-margin hardware business is hard. A software platform business is hard. Videogame consoles combine the two. We eventually had more games on OUYA than any other game console ever, but financing it proved to be the work of big companies (like Razer, that bought OUYA).