Bringing Silicon Valley thinking to Sacramento

Overheard

• One helluva footnote: Take a quick glance at Bird's SPAC presentation and you'd see 114% in a large font under its revenue growth. But the tiny footnote indication next to it pointed to what the 114% actually meant: the revenue growth between 2021 estimates and 2022's estimates. How's that for some SPAC math?
• Passing the Sunday test: "FWIW, we even had an explicit name for the 'No jerks' rule at Stripe. We called it the Sunday test--as in, would you be willing to come in to work on a Sunday to work with this person?" tweeted Saikat Chakrabarti. Antonio García Martínez, who Apple allegedly fired this week after thousands signed a petition, was someone who would not pass the test, Chakrabarti claimed.
• No such thing as a Shopifam: "Shopify, like any other for-profit company, is not a family. The very idea is preposterous. You are born into a family. You never choose it, and they can't un-family you," wrote Shopify's CEO Tobi Lütke in an email to managers.
• TikTok of the week: It looks like A-Rod is coping with the Bennifer reunion news by producing a series of TikToks on investing. Turns out he's actually quite good at explaining what private equity does.

Biz on Biz

Is the government really as fast as Google?

This week, I asked former GV partner Rick Klau what shocked him about joining the government after 13-plus years at Google. Instead, it was his answer that shocked me: "I think the shock is the pace at which we execute; it's at least as blistering as anything I've ever experienced at Google."

Many VCs may be leaving the state, but Klau instead went to work for it. In February, he was sworn in as the state's new chief technology innovation officer.

• He joins a growing list of technologists who have left years of work in Silicon Valley for government service, like Katie Jacobs Stanton (Google to White House to Twitter to VC), Matt Cutts (Google to U.S. Digital Service), Megan Smith (Google to White House) and Todd Park (health care entrepreneur to HHS to White House). And there are plenty of folks, like Airbnb's Chris Lehane, who did the D.C. to Silicon Valley migration.
• To Klau, it was a familiar opportunity from having spent years as a VC: "When I think about the work that I used to do in venture capital and before that in product management, you look for those green-field opportunities where you couldn't imagine what the ceiling was or where it was. And this just looked really familiar. So, I didn't hesitate," Klau told me.

Klau doesn't want to Googlify the government, but he does want to bring a bit of Silicon Valley thinking to his new role as chief technology innovation officer.

• Part of it is helping teams operate and build at scale for the 39.5 million Californians. In some ways, companies like Amazon might have it easier because they won all their systems whereas California has to connect to 58 counties, hundreds of local governments and then agencies at the federal level.
• There's also a need for product ownership over consensus-driven thinking, Klau said. He's hiring a chief product officer to be in charge of building and shipping products, and also a deputy director to be his No. 2.
• The biggest surprise has been the speed. Having experienced rocketship startups and 13.5 years at Google, Klau was used to moving fast, but the pace still came as a shock. "This feels like any one of those busiest days is a typical day here," he said.

One thing that won't transfer from Silicon Valley: You don't get to pick and choose who you're building for.

• Klau used the example of Clubhouse finally adding Android support this week: "When you're a tech company, you can make a decision that I'm only going to focus on a slice of my potential market to minimize distraction and to say, 'Look, I'm only going to be iOS only until I hit some milestone.' We don't get to make those choices. We meet the 39.5 million Californians where they are."

For more, read our full conversation on Protocol.

A MESSAGE FROM LINODE

DevOps and the Alternative Cloud provides insight into the capabilities and priorities developers expect from cloud infrastructure providers. In a market where hyperscalers dominate, a small band of alternative cloud providers — which includes DigitalOcean, Hetzner, Linode, and OVHcloud — is having an outsized impact.

Learn more

Inside Track

• Talk about work-work balance. Casey Caruso works full-time as an engineer for Google while also investing for Bessemer. Here's how she manages her schedule.
• If you're looking for impact, try investing in ESG upstream, wrote Obvious Ventures's Gabe Kleinman.
• The Thiel Fellowship has an insane track record, according to Sacra's Walter Chen, who published a Twitter thread on its biggest hits.
• How much capital does it take to break even? Earnest Capital's Tyler Tringasmade a calculator to figure it out.

Need to Know

• SoftBank's no longer in the valley of coronavirus. Last year, Masa Son had unicorns falling off a ledge as part of his investor presentation. This year, he has posted the biggest profit in company history after Vision Fund investments like Coupang and DoorDash paid off.
• BLCK VC launched a scout program, backed by Sequoia and Lightspeed. It will mentor 20 scouts, twice a year, in a six-month program. Meanwhile, Google announced its own investments into Black-led funds and startups.
• There's a new acquirer in town. Twitter has been on a shopping spree with its most acquisitions since 2015, according to Bloomberg.
• SPACs are dead. SPACs are booming. SPAC deal volume is falling as SEC scrutiny and lackluster investor demand make startups consider other paths. But there's still a lot of SPACs out there hunting for deals: This week, Better.com and Bird both announced they're going public via SPAC.
• The new conflict over SPACs: PPP. The government bailed them out, then they went public with a SPAC. Now executives disagree on whether startups should pay back the loans after their turnarounds, according to The Wall Street Journal.
• Blackburn's boomerang: Amazon vet Jeff Blackburn joined Bessemer, but only lasted a short five weeks as partner before returning to be its global media guru.
• From Protocol: Instead of crowdfunding startups, VCs are crowdfunding themselves.
• Also on Protocol: How Discord wants to conquer music.
• This week in VC history: Apple had 1 billion apps served in 2009, but maybe made around $20 million in revenue. That's changed as the App Store is now on trial.
• Your weekend reading: I'm personally a bit sick of the tech versus media wars, but New York Magazine has a deep dive on how the fight between venture capitalists and reporters got started.

Five Questions With...

Canvas Ventures's Mike Ghaffary

A partner at Canvas, Mike Ghaffary has a particular love of marketplaces, proptech startups and productivity companies. He had previously invested in companies like Strava, Superhuman and CloudKitchens and was a partner at Social Capital. He joined Canvas in 2019, where he's invested in companies like Darwin Homes and Flyhomes.

What's your favorite pandemic meal?

Before the pandemic, I used to eat a salad at Mixt Greens or Sweetgreen daily, usually seated outdoors. So I had a very COVID-friendly lunch plan even before 2020. In March 2020, I had to start making salads at home every day, and at some point, I realized it would be better to make them in bulk. Now I feel like I work at Sweetgreen, and I "mass" produce seven salads for a week in an assembly line fashion, put them in storage containers, then eat them one by one. I've optimized my salad over the years to be as healthy as possible; the current ingredient list is: spinach, pumpkin seeds, walnuts, carrots, avocado, beans and olive oil only for the dressing. The founder of Mixt Greens put one of my previous versions of the salad on the menu, called the Be Well, and it became their top seller. They gave me free salads for about a year when I came by as a thank you — that was nice.

What problem do you want to see a startup solve?

Vocational training and placement. How do you educate, train and then help employ millions of Americans who don't want to go down the traditional college path and aren't interested in a coding camp. There are many other vocations.

What's a secret obsession of yours that most people don't know about?

I love maps. I have maps up on the walls in nearly every room in my house, I've even talked my kids into putting a large world map on their wall. I laminated and posted up a Bay Area mountain biking map on one wall, converted the Trailforks app's mountain biking routes into a map, purchased the oldest U.S. map of San Francisco from 1848 from a specialty map store, Schein & Schein, in San Francisco, and I'm constantly looking at digital maps on my phone and laptop. I've loved maps since I was a kid, and when I worked at Yelp and did deep partnerships with Apple Maps and Google Maps, it only furthered my interest in cartography.

What company, outside of your portfolio, have you been most impressed to watch this year?

DoorDash's growth has been phenomenal, as they accelerated past Uber Eats to become No. 11 in a highly competitive industry. Maybe because I used to run a food delivery business, Eat24 (first we acquired it at Yelp, then GrubHub acquired the Eat24 business and merged it in), but I'm very impressed with its execution. Obviously the food delivery boom due to the pandemic helped a lot as well.

What book do you think every startup founder should read?

"Getting to Yes" is the best book I've read on negotiations, which is a key discipline for any founder. "Average is Over" is important for understanding what the economy and labor market might look like in 20 years. "Give & Take" is a great book by my friend Adam Grant on having a giver mindset.

A MESSAGE FROM LINODE

DevOps and the Alternative Cloud provides insight into the capabilities and priorities developers expect from cloud infrastructure providers. In a market where hyperscalers dominate, a small band of alternative cloud providers — which includes DigitalOcean, Hetzner, Linode, and OVHcloud — is having an outsized impact.

Learn more