Several New York InSITE Fellows (Brian Ballan, Brian Galgay, Nir Sandbank, Craig Wilson, and myself) had the opportunity to visit the Square office in San Francisco. The company is known for its credit card reader used with smartphones and tablets.
Square, founded in 2010, has changed the way small businesses accept payments and entrepreneurs think about payment platforms (the reason why there are so many new startups in the space!). The company has captured three million merchants in over two years and has processed over $10 billion dollars in payments. For reference, Visa and MasterCard are accepted by eight million merchants. Square is projected to grow from 450 employees to 1000 by the end of 2013 and this is just the start for the company.
Aside from these impressive stats, we learned more about the company through our chat with Naeem Ishaq, Head of Finance and Strategy, Prateek Alsi, Director of Distribution Partnerships, and Dash Victor, Accounting Manager. They spoke to the group about how the company is able to retain the startup community despite the large growth. There are weekly Townhall meetings led by Jack Dorsey where the employees learn about new projects and strategy and a rule that meetings notes must be sent out to the entire office if three or more employees are present. A lot of trust is placed in each employee to keep project details within the company.
I was excited about the company before visiting and this meeting confirmed the hype about Square. Each person I met was not only passionate about their work but they strongly believed in the mission of the company. It was refreshing to hear personal stories of employees who moved from the East Coast to join the company. We always hear the advice to entrepreneurs “do something you love, something you wake up each morning trying to solve.” It was so great to see this advice in action.
Founders by Brian Ballan
A small group of InSITE Fellows made our way out to SF in early January. We were trying to learn more about how the tech economy works in the place where it is most important. Along the way, we met with a number of awesome people.
We had great discussions over lunch with Brian Rothenberg (InSITE ’11) and Kapil Kale. Brian is the founder of Skill Slate, which sold to Task Rabbit. Kapil is the founder of Gift Rocket, which came out of Y-Combinator. They have had very different experiences and we were lucky to hear both of their stories.
Starting a company is hard and there are a number of different ways to go about it. One thing that both founders stressed to us is that you should have a potential outcome in mind. In addition to being extremely hard, raising funds from external investors changes your potential approaches to the business. It is important to think through the implications of the decision to seek and, hopefully, accept outside funding. As an entrepreneur, your challenge is hard enough. It would be silly to seek to introduce additional complexity when it is unnecessary.
In addition, when starting a company, they stressed the value of giving serious consideration about your personal circumstances. What are your goals? What is your living arrangement? How much personal runway and flexibility do you have? Outlining these factors up front can help you identify a better path forward and the right partners for your goals.
Thanks again to our guests. We learned a lot from them. More importantly, they helped us with useful frameworks to consider tough questions about starting our own ventures.
Andreesen Horowitz Visit by Brian Galgay, @BrianGalgay
Rounding off a great trip to the Bay Area, some of the New York InSITE Fellows (Brian Ballan, Thilmin Gee, Craig Wilson, and myself) had the opportunity to visit the Andreesen Horowitz office in Menlo Park on the famous Sandhill Road.
Andreesen Horowitz got its start in 2009, when Marc Andreesen and Ben Horowitz, both seasoned early stage investors, teamed up to found the venture capital firm. Since then, the firm has invested in many of the top startups in and out of the valley, such as Instagram, Skype, Twitter and Zynga — among many, many others. Beyond providing capital to their portfolio companies, the firm also provides other services to help enable their successes. In 2011, the Andreesen Horowitz ranked #1 on both Investor Rank and CNET’s most influential investors list.
Our group was very excited to meet the Andreesen Horowitz team, which included Shannon Callahan (Head of Talent Acquisition), Ashvin Bachireddy (Late Stage Investment Manager), Frank Chen (Early Stage Investment Manager) and Chaz Flexman (Portfolio Manager).
Shannon led off by explaining how the firm achieves greater success through programmatically developing its portfolio companies and by focusing early stage investments only in the Bay Area. By being geographically clustered, Andreesen Horowitz can bring together founders from its portfolio companies and rapidly discuss and resolve issues as a peer group. Each founder benefits, but is entrusted with secrets that cannot leave the group. Not only is this approach more efficient for solving problems, but it also forms a tightly knit community — strengthening the portfolio.
The conversation moved on to founders’ successes. While moments of the conversation drilled into the founder type (see Missionary or Mercenary?) and the right product/market fit (see Founder/Market fit), the importance of a firm’s culture was really the bulk of our conversation. Firm culture is not the perks of “Beer Pong Fridays” but rather how a company provides feedback and approaches decision-making. This culture is tested and experiences growing pains as the company scales. The advice was that a founder should list out the 4 important elements of that culture, and then hire 4 people to drive those areas.
I was impressed how a marquee firm such as Andreesen Horowitz continues to raise the bar, not only in terms of selection criteria but also in value-added services. Over the past few years, venture capital has become increasingly more competitive — yet Andreesen Horowitz has stayed on top. Trying new things, hiring strategically and constantly improving has clearly kept them in front of the pack.
Miso Visit by Sanjay Amin
In January, a group of InSITE Fellows visited Miso, a startup founded three years ago that is building second screen apps for users to “check in” to content and create discussion around TV, films, and other content. We met with Tim Lee (CTO/Co-founder), Katie Smillie (Product Manager), and Jesse Geller (Product Designer) to talk about their experiences and their general thoughts about entrepreneurship.
Tim told us the story of how they got started. He and his co-founder saw an opportunity in the web/mobile app space over three years ago and decided they wanted to make a mark. They were bootstrapping the idea for Miso (their 3rd idea) on the side, dedicating 20 hours or so a week while keeping their jobs. It soon became apparent to them both that to be successful, they would need to quit their jobs, and they did just that. They got their first angel investor, and in Tim’s words, the other investors just started falling into place like dominoes.
If you want to be an entrepreneur, Tim stressed the importance of communicating your product vision and visual design, even if it’s just a Keynote mockup. Tim also mentioned that if you’re selling opportunity rather than involved new technology, you don’t necessarily need a technical co-founder to raise capital.
We next talked about the future of TV and how there’s no clear winner in the second screen space at the moment. After this, the conversation shifted to philosophy and approach for being an entrepreneur. Tim stressed the concept of having a “True North,” i.e., something you believe in, and working backwards from this. Always ask yourself if you are creating value in the Universe. Tim also pointed us to resources such as Paul Graham’s startup ideas post and Dave McClure’s startup metrics for pirates.
Overall, the visit was a great glimpse into the mind of a founder and how resilient an entrepreneur must be even as his or her company is on the decline.
Special thanks to Thilmin Gee and Derlen Chiu for organizing the visit.
Square by Thilmin Gee