What’s In My Blood – Q4 2016 Edition

I’ve been doing detailed blood tests every quarter for the past year. The first test was a part of a 30 day measurement experiment to quantify the impact of eliminating alcohol from my system. Oddly I haven’t had a drink since that first day.

I use WellnessFX for testing. In Q2 I tried another service which I didn’t like as much so this September I went back to WellnessFX.

The testing takes 10 minutes and can be done at any local Quest Diagnostics Center. I do comprehensive testing which means I have to give lots of blood. This center had epic views of LA to distract me.

August and September were bad months for my diet and exercise lifestyle. Until July I was a machine. Then I fell off the wagon, at least relative to my current standards. While I don’t believe travel or stress are acceptable excuses for unhealthy living, I leaned them to eat lots of tacos and ice cream.

So the general trend in my blood data shows multiple signs of a higher presence of fat and the physiological reactions to processing it. Left unchecked these behaviors will most certainly lead to an increase in general inflammation, something I focus heavily on avoiding.

These deviations from norm are expected when you cram as many tacos down your throat as I did in August and September. So the test date served as a solid reminder to reset and get back on track. Small deviations can easily become large problems if left unchecked for long periods of time.

Here’s my blood. More context on my lifestyle and past testing is here.

[pdf-embedder url=”” title=”lab-results-wellnessfx”]

Hardcore History

Recently I’ve been enjoying the Hardcore History podcast from Dan Carlin. It’s an odd podcast as each episode averages 3-4 hours. Each episode is the equivalent of a short audiobook.

I listen to spoken word when driving and at the gym. Often books. But my compulsive need to highlight passages and take notes when listening to audiobooks via Kindle is incompatible with most activities and borderline dangerous (especially when driving). It also gives me a headache.

I initially didn’t believe that I would enjoy four hours of history. And now I’m addicted to it. It’s taken me about a week to listen to one episode and I’ve found that frequency sufficient.

The first in a series of episodes about the series of random events that led to World War I is fascinating and, frankly, timely. It’s incredible how similar so many events of that era are to today, especially the media’s treatment of facts.

Here’s the first episode of Blueprint for Armageddon.

Founder Health

A journalist emailed me a question about our view that founder health is as if not more important than anything else.

From Our View:

Healthy people build healthy companies.

A healthy body creates a healthy mind. Healthy minds build better companies. If you’re eating a microwave burrito at your desk at 2am on a Saturday you’re doing something wrong. We prioritize our physical, mental and emotional health over everything else and push our companies to do the same.

Unfortunately, sometimes a healthy body isn’t enough for a healthy mind. Being a founder is hard and lonely and can bring you to a dark place. We’ve experienced some of these demons personally and with our friends and companies. It’s not a taboo topic to talk about with us. We’ve been there.

The journalist’s question:

Did any founders/funds inspire you in your new outlook/rebrand?

Is there any data out there that shows healthy entrepreneurs <> healthy returns? Or how investor/entrepreneur relationships built on open and honest communication leads to higher returns? I imagine that sort of data is hard to quantify, as so many factors, internal and external, affect whether a company succeeds or not.

It took me a while to formulate a response. In all things I am quantitative but in this area I have a binary, unshakeable view. It’s a sacred cow. Sacred cows are difficult to justify. They are visceral in nature. That’s what makes them sacred and often dangerous.

Here was my response (which I also emailed to our portfolio founders):

Thanks for the question. We didn’t consult any data sets to arrive at our strong position that the health and balance of founders & teams is of the utmost importance. It is simply clear that it is the right way to do business as a human.
It is often difficult for founders to remember that the world is not a better place if you build a billion dollar company that kills you.
As for triggers or inspirations for this view, it was most directly triggered by my personal founding journey during which I did not give any attention to health. And I experienced two hospital stays, was on prescriptions for high blood pressure, anxiety, and depression, developed a coping mechanism dependency and finally received wake up call from my doctors that I had a high probability of dying within a few years if I did not take corrective physical and mental action. As an investor I want to do everything in my power to minimize the probability another founder will have my experience.
By elevating our belief in focusing on health and wellness and being transparent about our personal experience, we’ve found that our founders are more comfortable discussing their challenges. And we are aggressive in holding our leaders accountable to this standard.
I do not yet have a body of data to establish a positive correlation between health and authentic relationships with founders and company performance. And honestly I’m not seeking it. It’s just the right way to do business.

Investing in Asana

Here’s another email I sent to our portfolio company leaders last week.

When I checked in last week I failed to include an additional company we’ve had the pleasure of working with over the past few months.

We had an opportunity to join a highly non-traditional Series C of investors, customers and leaders that Justin (cofounder/CEO) and Dustin (cofounder) assembled earlier this year. The round was led by Sam Altman personally and provided an opportunity for us to more directly support a company that we respect tremendously. See Sam’s note here.

A couple of years ago I accidentally stumbled into a talk at Web Summit. Justin was the speaker. His talk led me to skip the final day of Web Summit spending the day in my Airbnb planning how I was going to implement what I learned. This was the talk. It was the genesis for many things, including the events that would lead to our joining as an investor.

To understand my view on Asana you need only spend a few minutes talking about how I architect my work and my life around clarity of purpose, plan and accountability. And there’s a high probability I’ve shared my architecture for communication systems with you. Asana is a critical factor in making the world more contextual and less noisy.

My appreciation for Asana extends well beyond the tool. Its greatest influence on me and how I do things stems from how Justin and team manage their company, their planning processes and their culture.

We continue to be amazed at Asana’s progress and their team.

**Note: **For those interested in Asana the product, please feel free to reach out to Shannon who has offered to answer any questions you have. I also highly suggest checking out The Guide, which I think is the best customer help resource I’ve seen in the productivity space.


I’m en route to spend a week with startups in Tbilisi, the capital of Georgia (the country not the state). I was invited to join a group from Silicon Valley by friend I’ve wanted to collaborate with for a while.

Through the week I’ll be working with Tbilisi entrepreneurs. I’ll also be getting to know Georgia, a country rich in history (and wine). At some point we’ll also be meeting the Prime Minister.

On the way back I’ll be jumping through London for 18 hours and hanging out with the badass guys behind Butterfly Twists.

The journey to a not-often-visited place is always interesting. I travel about 25% of the time and am overseas several times a year. Each time I leave the US I wonder why I don’t do it more frequently.

Traveling helps me reform my world views. I am a better, more grounded person because of these experiences.

When I travel I do weird things. I take weird flight routes. I try to stay in neighborhoods instead of hotels. I buy my weird food in local grocery stores. I workout at local gyms.

When I travel to a new city I usually take a full day and explore, mostly walking. In the growing number of cities with bike share, I do that too.

I don’t buy guidebooks. I don’t hire tour guides. I did this before one could travel with a data-enabled cell phone. Google Maps and T-Mobile have radically transformed this experience.

I think as a result of just getting lost and finding my way I’ve been able to discover things I wouldn’t otherwise find. Today on a six hour layover in Athens, Greece, a city I’ve spent time in before, I grabbed a cab to a neighborhood I enjoyed on my last visit. It’s not a neighborhood the guide books care to include.

While en route I found a restaurant with a lot of great local reviews. Then it was back to the airport for the next leg of the journey to Tbilisi through Kiev.

All of this might sound exhausting to some. It’s not. But to be able to flow naturally in unfamiliar countries you have to suspend the need for complete clarity. I do not do unsafe things. I am as vigilant about safety internationally as I am walking through Las Vegas or New York. You can be in danger anywhere…if you do dumb things.

To enjoy unplanned travel you must resist what I call life seizures. This is the mindset of a person who walks into an airport and immediately is anxious.

You’ve seen those people. They are the ones looking frantically for their gate without looking at the departure signs and looking around to figure out how the gates are numbered.

They are the ones who immediately walk to the boarding door the moment anyone starts talking on the PA system.

They often speak loudly, move nervously. They exhaust you just looking at them.

They would never take a taxi to an unfamiliar part of town because how would they, I mean, getting back, what if, oh god. WHERE ARE THE…WHERE IS MY BAG? I’M JUST…WHERE’S MCDONALD’S?

Life seizures are equally possible no matter a person’s age. They happen at home and abroad. People have them in grocery stores. And old people don’t have them any more frequently than young.

For these people everything is hard. I have never been one of those people even though I have definitely been lost in lots of places, usually while trying to find a bathroom.

It’s generally true that if you assume something is going to be hard, it will be. Remember Henry Ford’s perspective: “Whether you think you can, or you think you can’t–you’re right.”



I spotted this little gem during lunch in Athens and sent it to a friend at TOMS. It is a small world.


A Few New Investments

I sent this email to our portfolio company leaders today.

Hi everyone,

I hope you’re having a great summer.

I wanted to take a minute to welcome a few new friends to the VTF Capital family. We do a miserable job sharing new investments with you. That’s partially because we prefer to focus our time inward, helping entrepreneurs build great companies. Most things that aren’t that get cast aside, mainly PR.

But there are tons of potential collaboration opportunities between our portfolio companies. The first step to unlocking that value is making sure you know each other. This email is 90% longer than future ones with new investments will be.

We will do better. And we’ll do it by email since our attempt at building a healthy Slack channel was about 50% effective. This DL includes the leaders of every company you see here. We’ve also built a few narrow subject DLs…we’ll get to those.

As we shared earlier this year our investment thesis is highly focused. We make fewer but deeper investments because we have a much clearer sense of where we believe we add the most value as seed investors and a clearer definition of what we believe the future of global commerce will be. I’ve never been more optimistic about the future of our organization’s ability to help entrepreneurs build great companies.

Like software our thesis is versioned. We make predictions about what will work, test it, collect data and refine.

As a result of this increased concentration our quantity of new investments is slower than you might have observed in our earlier, less disciplined years.

In 2016 we planned (and so far are on track) to invest in 6-10 new companies while also allocating for follow-on opportunities when the company’s growth and the round economics make sense. We expect to do the same in our current funds for the next few years.

To that end I’d like to catch up on some of our activity in 2016 and introduce you to a few new entreprenuers we now work with on a regular basis. We’ll do this one at a time in the future as we recognize there are tons of opportunities for collaboration within our portfolio.

For those keeping score at home, in 2016 we have closed investments in five new companies, participated in nine past investment growth follow-on rounds and evaluated investments in approximately 25 companies per week.

Without further ado, please meet your new portfolio cohorts.

Thrive Market – We met Nick (co-founder, co-CEO) through a mutual friend. As we got to know Nick and Thrive we became believers in their vision and amazed at their execution. Many of you know I spent more time working in grocery than I have in technology alone. I believe that they have cracked the market to bring healthy, clean and affordable food to millions of families. We’ve grown quite close and I look forward to continuing the journey. Thrive Market is based in LA. Nick is cc’d. (Primary Partner: Zach)

Ink – Will asked me to meet with Jonathan and casually described Ink as a kiosk company that wants to displace Kinkos (Fedex Office for those under 30). I had zero interest in having a conversation. My scheduled 30 minute meeting with Jonathan Manzi (Founder/CEO) lasted almost two hours. What he’s done in a year makes me feel worthless about my own work. The team he’s assembled is perhaps the best team possible for the problem he’s tackling. Ink is based in Oakland. Jonathan is cc’d. (Primary Partner: Will)

The Renewal Workshop – A number of you may have met Nicole and Jeff via their time at The Mill. We decided to make a significant and direct investment before the end of their first tenure in The Mill. Their experience in the apparel industry us unparalleled. I am convinced they will reshape the supply and refuse chains of the apparel industry. Their operations center in Oregon is live, the supply partnerships they have in place with key suppliers would blow you away. They are starting in the outdoor apparel space (gear junkies celebrate). They launched an Indiegogo campaign recently to build an army of advocates and will start shipping this fall. TRW is based in the Portland area. Jeff is cc’d. (Partner: Zach) – Those of you with whom I work closely know I HATE ecommerce marketplaces. It’s a great way to invest and lose a lot of capital should the random events that lead to a well-timed massive exit not align just right. is the reincarnation of a massive first dot com bubble bust. Justin (an experienced, exited entrprenuer) acquired the idle remnants about two years ago and has quickly turned it into something incredible. Ice fills the gaps between the jewelry consumers and manufacturers. It manages the entire customer relationship including acquisition, marketing, merchandising, customer service, shipping and returns, leaving the manufacturer to simply put the unit in the box and put it on the loading dock. I’m not doing it justice. Justin is cc’d. (Partner: Zach)

Exact Media – ExactMedia helps brands in the US and Asia connect with consumers using in-box marketing inserts. They help brands (like some of you) avoid the wasteful spray and pray marketing approach instead targeting interesting offers and product samples to people whose purchasing behavior matches that of the brands trying to reach them. The consumer experience is positive and the ROI for brands is staggering. Ray co-hosted an event with us earlier this year during Shop Talk, some of you may have met him there. He’s a textbook giver who always has a great idea for how he can help you, not just how his company can help you. Ray is cc’d. (Partner: Will)

I hope you all have a great Labor Day weekend.

Setting Milestones for a Series A

As commerce seed investors an important factor for us to consider is whether the company will be able to raise a later Series A. This isn’t a popular thing to talk about but it’s reality.

Why do we care? Because when you are a large investor in a seed round you are investing in a stage that has an expiration date. Seed investors rarely have the capital to fund a company through a 5-10 year growth cycle. This is especially true in commerce companies with physical products or operations.

We need to be cautious and minimize the probability of finding ourselves in a sunk cost dilemma 1-2 years in the future when a company has no traction, no cash and no potential investors.

We’ve been right about 60% of the time. It is still very early.

VTF Capital Seed Follow-On

Smart investors think of a company’s life story in milestones. Milestones are fundraising related, metrics related and product related and they occur at sporadic points in a company’s growth.

We have the same conversation with every founder we invest in. What’s the next milestone? What does the company need to look like at that point to achieve that milestone?

This is not an evaluation question but rather a collaborative one. It is natural for founders to want to do 4-5 things in the next year. In my view, it is better for a company to be healthy and growing in five years than for it to do 4-5 things in one. As an outsider I have the benefit of keeping that restrained view.

There are rare times when a company can do it all. But often the 4-5 things are aspirational goals a founder sets for the company. On deeper study, I’ve generally found that those 4-5 things are what the founder actually sees the company doing over the long-term. In the hype of pitching investors, he/she believes she must put it all on the table right now. It’s helpful to recall that humans are generally bad at estimating what they can do in a year.

But regardless of capacity, the question one must ask when setting milestones is whether or not all five things are relevant to achieving the company’s goals between now and the point of the milestone (e.g. end of cash runway).

Let’s say your vision for your company is to be the end to end marketplace platform for consumers who buy eggs. To achieve that vision you will build strong technology that manages:

  • egg production
  • egg distribution
  • egg retail sales
  • egg feedback ratings
  • payments for eggs

Today you have 20 farms and 400 retail customers and you are raising a $1M seed round. That money will last you 18 months.

The two things you want to focus on are:

  • What will the company do at the end of the cash runway?
  • What will the company need to look like in order to do that?

Fundraising stages, from early to late, exist on an investor motivation spectrum of faith to spreadsheet. The earlier the investment, the more the investment is a faith investment in the market and the team. The later the investment, the more the investor is concerned with spreadsheets. That is to say, for example, how their capital turns $1 of sales into $4.

If you are planning to raise a Series A, then you must consider what your company needs to look like to Series A investors at the point you need to raise capital from them.

Series A investors invest in both but are to the right of the midpoint preferring companies that show strong metrics-based performance. Yes, some Series A investors say they are more focused on the team and the vision than performance. This may be true for some but my experience in dozens of post-seed financings is that Series A investors overwhelmingly look at data first.

  • What metrics will matter to them?
  • What metrics will they use to determine if their capital can be used as an accelerant to growth?
  • Will your metrics demonstrate strong adoption and product market fit?

The more disparate metrics you have, the lower the probability your performance of each will demonstrate dominance (aka traction…a word I hate).

Investors can connect dots and see what’s possible. When deciding what the company should look like at the next milestone you should err on the side of highlighting your ability to execute.

You want to be able to say (using the egg example:

  • We set out to onboard and process retail orders for 2,000 retail customers. We did that and here’s the data. (note this is not necessarily a revenue/monetization requirement. We’re using an egg example where a successful transaction is someone buying an egg. Active users, participating users, etc. are similarly useful metrics depending on your business.)
  • The next step if for us to own these three parts of the market. You can tell that we can execute, you are investing in that growth.

Conversely you can say:

  • We want to own the entire egg market so we built the technology that does all of these things.
  • We have 100 retail customers, three distributors and are in final talks with 3-4 farms.
  • The market potential is about 50,000 customers and we have a plan to go after them. We have less than 100. But here’s our sales funnel. The ones noted as “pre-qualified” are ones I have email addresses for. I’m confident they’ll close. (this is a real example)

In the latter, the Series A investor sees undisciplined product development and mediocre results.

In the former, she sees restrained, patient product development, exceptional execution and demonstration that people want what you’re putting out.

For most investors, the former will be a better investment.

In my past life as a founder, I ~~just~~ knew I would raise Series A capital when I needed it. I never stopped to consider how.

At SHIFT we had exceptional technology to manage a large fleet of on-demand cars, bikes and multi-passenger buses. We were the first and still only outside company to build access control and telematics systems for Teslas and smart cars. We built the hardware and software in-house. Our customers could access one of 98 cars within five minutes using iOS and Android apps. Our backend automation systems powered a 24/7 recharging and rebalancing operation for an electric fleet in the largest centralized electric vehicle charging station in the US. We were a fantastic engineering operation. We demonstrated we could execute. If only our business goals were to be the best vehicle fleet operator on the planet.

I came away from meetings with large Silicon Valley VCs with a set of metrics related to the business we were actually in. “If you get to 5,000 paying members in 8 months we’ll invest $5M” one of them told me. “Show 4,000 paid transportation uses in three months and we’re in for $4M,” said another.

We were asking them to help us become a billion dollar company. The question they were considering was whether there was reasonable demand for this to be a billion dollar company. We presented ourselves a consumer transportation product, not a backend vehicle operations company. The funny thing is, we put 99% of our effort towards being the latter, not building traction towards demonstrating that we could actually build the consumer side of the business.

In the process of building great technology and a great operation I forgot to focus on what we needed to look like to the person who would get us through our next milestone. And by the time I realized that, I didn’t have two more years to build the company towards that outcome.

Be the founder that thinks this through. Proactively share your plans with your investors. It will help you separate the smart investors from the not.

Thanks to Will Young and Patrick Olson for reviewing drafts of this post.