The Jobs Act — not so fast

The Jobs Act has done good things to jump-start funding.

Title II, already in place, has led to a dramatic increase in crowdfunding. However, only accredited investors (i.e. rich people) can invest.

Title IV (popularly known as Reg A+), set to take place in a couple of months, opens the field to non-accredited investors (i.e. everyone else). This is what people are talking about. (There is no Title III. While Title III significantly broadens the field for startups to raise capital, it is still not finalized.)

Among some breathless enthusiasm for Title IV are some facts that aren’t broadly understood by both investors and startups.

To explain, there are two levels to Title IV:

  • Tier 1 allows companies to raise up to $20 million.
  • Title 2 allows companies to raise up to $50 million.

Tier 1 companies do not need audited financials. However, they will still need to file their offerings in every state where the securities are offered. This could cost startups tens of thousands of dollars in legal and compliance fees (if you’ve ever been through this process, you’ll know it’s really not a big deal, but it just costs money for lawyers to file the paperwork).

Tier 2 companies don’t have to register with each state, but will have the requirement to have audited financials. Now, this is where it gets tough: audited financials for a startups are about as rare as a brass monkey’s bottom. And if they do get audited financials, it is quite expensive. (In a side story, two states have filed lawsuits against the SEC over the state exemption. They want some control over the process.)

For startups, this is tough, which means the primary beneficiaries will be companies that can actually afford these fees or have audited financials. And those companies, of course, may be just what the SEC wanted in the first place: to protect the grandmothers and orphans who may lose their money in these investments (putting aside the fact that there is actually a cap on how much a non-accredited person can invest anyway, no more than 10% of their income/net worth on a deal).

So, I don’t see the funding world changing overnight with this change, although I do think that we will see some impact.

However, another side of me can’t help but worry that we have opened a pandora’s box with all of these new investment vehicles. In fact, I’m actually glad that the SEC is being so cautious. They, like me, are quite concerned about creating a funding bubble. But that horse may have already left the proverbial barn door (pardon the mixing of metaphors).



Facebook’s move to animated gifs — what it means

Hey, you want to post an animated gif on Facebook?

Just post the url and *poof*, you’ll get your animated gif.

Animated cat viceo1231203909


However, for marketers, this is gold.

Animated gifs are easy, fast and effective ways to get a message across. People do love them (especially cats, Carlton, Will Farrel and Jonah Hill). They create an emotional response that’s hard to get with other mediums.  

And users share them, increasing the network effect of your advertising.

But they will make your Facebook page look like something similar to a Korean candy store.


More on the Tom Cruise redesign of the NASA website

A bit of news going around that Tom Cruise helped redesign the NASA website.

From CNET:

O’Keefe, who was NASA administrator from 2001-2005, said that Cruise is a “big space nut” and that when he paid a visit to NASA offices, the actor said the agency’s website wasn’t really designed for the masses. He then offered one of his “tech heads” who worked on his movie trailers to help the agency out by redesigning the site.

“So I took him up on the offer,” O’Keefe says in the video, “and it changed the appearance of that website in a way that made it inviting, interesting. Folks wanted to participate — you know, here it is, it jumps out at you.”

The work by Cruise’s team was done for free to the government, and was a major improvement.  It’s worth noting that Cruise never mentioned this to anyone or attempted to take any credit. It was mentioned by O’Keefe 13 years later.

Keeping in mind that this was done in 2002 (before a lot of current thinking in web design), here’s the original (and truly wretched) site:





Ugh. Memories of Geocities!

The new website was substantially better.

Getting past a Flash intro (hey, it was 2003…), we can see the changes: 


You had the ability to actually navigate the site, find what you needed, and it didn’t look like someone just threw up on your screen. In short, a very credible improvement.

You can enjoy it all yourself at

Of course, NASA went through evolutions, and the current website is a whole world different than the past.

In short, Cruise should be thanked for pitching in to help this very valuable agency.


Leading in a time of crisis


An excellent overview of crisis management, complementing a few earlier posts by me on this blog.

There are two rules to follow in a crisis. Rule number one is this: Protect other people first – customers, employees and citizens. Not your shareholders or yourself. Protect the public and your customers, and the shareholders will follow. Why? Because the longterm reputation and goodwill of your organization are more important than any shortterm risk to shareholder value or your own job security.

Rule number two is a corollary to the first: Be prepared to reframe and expand your level of responsibility. In other words, accept responsibility even if you’re not at fault. This may feel counterintuitive, especially when someone else is clearly culpable. But reframing and expanding your level of responsibility will help lead you out of the crisis.

PDF link here.


How about a BMW laptop?


Here’s a reply I used recently to an Apple fanboy just dying for an Apple car (because it would be sooo cool):

Me: “What’s your favorite car.”

Fanboy: “BMW”

Me: “How about a BMW laptop?”

Fanboy:  (silence)

What was the first thing Jobs did when he came back to Apple? FOCUS.

He was killing more products than he was making.

And now, amidst Apple car rumours, we have Carl Icahn in a one-man bozo explosion today, urging Tim Cook to get into making cars.

As autonomous driving would release drivers’ attention from the activity of driving and navigating, and perhaps even increase the time people actually want to spend inside a car, both an automobile and the services provided therein become even more strategically compelling. While Apple currently addresses this market with CarPlay, it seems logical that Apple would view the car itself as a the ultimate mobile device to which it could bring its peerless track record of marrying superior industrial design with software and services, along with its globally admired brand, and offer consumers an overall automobile experience that not only changes the world but also adds a robust vertical to the Apple ecosystem.  And for Apple, the car market is more than big enough to “move the needle” significantly, even as the world’s largest company.

All great ideas, but as I’ve said in a previous blog post, it would be a deadly move, due to something called the Line Extension Trap (a term originally coined by Al Ries and Jack Trout).

That’s when a company says “Oh, our brand is so powerful, we’ll extend it to other completely unrelated products”.

As Ries says:

Bayer non-aspirin. Dial deodorant. Life Savers gum. Kleenex towels. Eveready alkaline batteries. A1 poultry sauce…

If everyone in an industry line extends their brands (as happened in the beer business) then it’s not an issue at all. The winner will be the leading brand and its line extension (Budweiser and Bud Light) regardless of what the competition does or doesn’t do. (And in the cola business, Coke and Diet Coke.)

The case against line extension is a philosophical exercise. For a brand to exist, it needs to be filed away in the mind. And where does a consumer put your brand in the mind?

If you say, “Would you like a Budweiser?” the consumer thinks “beer.” Why is this so? Because apparently the Budweiser brand is filed in a mental category called “beer.”

Or if you say, “Xerox this document,” the consumer thinks “make a copy.” The Xerox brand is apparently filed in a mental category called “copier.”

So what happened when Xerox, the copier company, introduced Xerox computers?

Nothing. And Xerox went on to lose billions of dollars.

It is not only an issue of focus, it’s also an issue of brand extension into an unrelated area. I’m no saying it won’t work. But history is not on Apple’s side in this argument.

(Oh, and yeah, there is no big-screen Apple TV on the horizon.)

I like Icahn, for odd and various reasons. But as a marketer, I would give him a fail.


Using Google Image Search to filter out scammers

We all get invaded with friend requests on Facebook, LinkedIn and whatever else. Sometimes, it’s difficult to figure out if the person is kosher.

I got a very pretty woman friending me on Facebook recently. I don’t get pretty women friending me on Facebook, apart from my wife (yup, I’m playing to the crowd here!). Anyway, she looked familiar… and it turned out it was someone using Taylor Swift’s photo.

This is very common.

So… one quick way to check to see if someone is a scammer is by right-clicking on the photo image of the person, and choosing Search Google for this image (you need Chrome for this).

I’ve found two of these scammers in my LinkedIn inbox just today. Here’s one:



We simply search for the image…



And find he’s a complete fake. Probably some guy in India.


Be careful out there.



Calculating MRR correctly

As more business go to subscription and SaaS models, they incresingly report to investors MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue).

But it’s not a standardized method of reporting (it’s not GAAP or IFRS), and I’ve certainly seen some serious mistakes myself.

Eric Yu does a good job of breaking the problem down.  Link here.




If you haven’t seen the article on Andreeson Horowitz over at the New Yorker, it’s a worthy read.

This is priceless:

A16z was designed not merely to succeed but also to deliver payback: it would right the wrongs that Andreessen and Horowitz had suffered as entrepreneurs. Most of those, in their telling, came from Benchmark Capital, the firm that funded Loudcloud, and recently led the A rounds of Uber and Snapchat—a five-partner boutique with no back-office specialists to provide the services they’d craved. “We were always the anti-Benchmark,” Horowitz told me. “Our design was to not do what they did.” Horowitz is still mad that one Benchmark partner asked him, in front of his co-founders, “When are you going to get a real C.E.O.?” And that Benchmark’s best-known V.C., the six-feet-eight Bill Gurley, another outspoken giant with a large Twitter following, advised Horowitz to cut Andreessen and his six-million-dollar investment out of the company. Andreessen said, “I can’t stand him. If you’ve seen ‘Seinfeld,’ Bill Gurley is my Newman”—Jerry’s bête noire.

I can’t help but feel that this firm has a bit of the high-flyer in it, that’s a bit reminscernt of the Robbie Stephens of the 90s. Time will tell. They are making some very sharp investments, but they sure are paying a price for them.

Link here.




SaaS funding trends

Good breakdown of the current environment over at CB Insights.

BI, Analytics and Perf management lead the pack.


No surprises in big deal sizes.


More here.




Canva’s story on massively increasing blog traffic

AsfasdfasdfasdfAs a veteran blogger, I admit I was impressed with this overview of how Canva increased their traffic by 226%. Solid block and tackling backed by analytics and a bit of ingenuity.

A good read, here.


The rich untapped power of Pinterest

Consider this: There is a website that 28% of adult internet users and 22% of the entire adult population use. That’s bigger than Twitter. And yet to some, due to its quirkiness, it’s not fully understood.

Of course, I’m talking about Pinterest.

Now, Pinterest is an interesting animal. It’s heavily female-dominated (over 70% of users are female), and it’s heavily foodie, crafts and home decor oriented. But that’s the fat tail. Look at the top categories of Pinterest:


There’s gold there. Certainly, housewares and food are top. But consider that photography, which makes up a smaller proportion, is still massive when taking into account the sheer scale of Pinterest.

And the average spend on conversation is higher than Facebook.


QuickSprout has a lot more in their useful infographic, here.


The democratization of the MBA


Pstt… wanna a free MBA? You can get one at the University of Illinois Urbana-Champaign. Without putting up with the cold winters.

It’s a bit nuanced, but basically here how is how it works:

  • You sign up for the online MBA at Coursera.
  • If you want to be actually matriculated at the University, you pay the $20k fee for the MBA (you will have to go through the acceptance process).
  • But there’s a twist — you can just take the courses for free. You won’t get the level of classroom involvement, but you’ll get the core information.

If you go the free route, you can always apply later, building credits as you go along. But if you just want the information, then you can get it. And not pay through the nose (even though $20k is very reasonable for an MBA).

This is not a little thing — Urbana-Champaign is one of the top MBA schools.


10 ways to piss off David Ogilvy

David-ogilvyWarms my heart, this blog post by Demian Farnworth. If you know me, you know I’m a massive fan (earlier in my career, I would require all marketing employees who worked for me to read Ogilvy on Advertising).

Ogilvy was the first real data-driven marketer and that was the simplicity of his power: He knew what he was doing, because he had the data to back it.

So here are 10 ways to piss off David Ogilvy:

1. Be boring
2. Sling mud at competitors
3. Write copy that lacks charm
4. Break a promise
5. Use jargon
6. Be a weasel merchant
7. Feature self-justifying research
8. Write copy that fails to make the cash register ring
9. Demonstrate incompetence in the advertising business
10. Be an obstinate creative person


You can get a poster with these maxims here.

10 Ways to Piss Off David Ogilvy (Free Poster)



Goldman Sachs: No bubble trouble


In a briefing to its wealthy clients, Goldman continues to be sunny on equities.

With the Nasdaq Composite Index surpassing its former March 2000 peak and closing the week with a year-to-date total return of 7.9%, bubble concerns are dominating the headlines once again. After all, both the Nasdaq and the S&P 500 Index closed at new all-time highs on Friday. Not surprisingly, concern about a significant downdraft has increased among investors. These concerns have been exacerbated by the expectation of disappointing first quarter earnings, which have been revised down steadily since last fall partly as a result of falling oil prices. In line with these worries, year-to-date flows into US equity mutual funds have been negative, as shown in Exhibit 1.

We have been on the lookout for bubble valuations since 2013. In our 2014 Outlook, Within Sight of the Summit, we dedicated a notable portion of our introduction to explaining why we did not think US equities were in bubble territory. With the market making further gains since, we are even more vigilant in our search for bubbles today.

Yet, we still believe that US equities broadly, and the technology sector more specifically, are not in bubble trouble yet.

We will first clarify what we mean by “bubble territory.” We will then explain why we do not share the view that US equities are in bubble territory—notwithstanding the impact of a stronger dollar, slower first quarter US economic growth, and pending Federal Reserve interest rate hikes later this year.

We will conclude with our key investment takeaway which is to maintain one’s full strategic asset allocation to US equities.

The presentation can be viewed, Still No Bubble Trouble.pdf (377 KB).


“Why, dear God, haven’t you started marketing yet?”

Great post by Gaurav Jain at Founder Collective on marketing. It backs-up my zero-budget marketing post with some striking examples.

  • Mint is the classic case study in this area and got people excited about banking software by pioneering the use of infographics and content marketing with nearly no budget.
  • SparkFun/AdaFruit/iFixit built marketing into their product. All three are part of the “maker movement” and created high-quality tutorials featuring the components they sold which were passed around eagerly by hackers.
  • Wayfair is now a massive player in e-commerce, but built its business through smart Search engine marketing, buying up over a hundred domains with exact matches for popular searches.
  • HubSpot became a billion dollar company by blogging and producing content that complemented their core marketing software.
  • GoldieBlox created a web video that went viral and founder Debbie Sterling hustled to the point where she earned a Super Bowl spot, worth $4 million dollars, for free.
  • Tinder co-founder Whitney Wolfe evangelized the dating app by going door to door at fraternities and sororities, tripling the user base in the process.
  • ProductHunt is the new gold standard in early-stage, budget marketing. Before there was even much of a product, founder Ryan Hoover managed to whip up an energy around the concept like a latter-day PT Barnum.
  • Plated, one of our portfolio companies, appeared on Shark Tank, sending tens of thousands of viewers to their site.

More here.