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How I Got My Startup Funded By Jason Calacanis

How to Build a Company in Highly Regulated Marketplaces: 8 Things to Consider

Every great empire in the history of mankind eventually disintegrated and fragmented into smaller states. Some of those states became empires of their own, sometimes larger than the predecessors. This is equally true in the business world. Airbnb is a well-known Silicon Valley unicorn and it makes $2.9B in revenue. It's most famous for turning the hotel industry upside down as it opened up an entirely new class of accommodation previously unavailable on the market. But few people know that Airbnb is an example of a much larger and more significant process: unbundling of online platforms. Airbnb is an offspring of Craigslist,  often dubbed "the most universal answer to all problems of humanity". Craigslist has been unbundled in many platforms (Airbnb being one of them, as an unbundler of the short-term rental market), whose combined revenue is now almost 20 times bigger than Craigslist itself. These challenger platforms, however, are no way secured from being unbundled themselves. One of them, , captures 80% of the revenue, while Airbnb commission is only 6%, which makes it particularly interesting. Another one, , targets long-term stays, which makes its business streams more stable and predictable. Le Bijou Sonder Will the grandchildren of Craigslist, Airbnb rebellious offspring grow even bigger than the last disruptor? Why you should care about unbundling Investors who understand the process of unbundling well, like , taught themselves to spot promising ventures at a very early stage, long before their merits become widely recognized. Such a skill gives those investors a competitive edge. Imagine what wealth would you amass if you recognized the unbundling of Craigslist early on and managed to invest at least 100K into Airbnb, Uber, Zillow or Indeed in the first year of their existence, becoming a major shareholder. Andreessen Horowitz So what is Unbundling? Unbundling describes the process of fragmentation of an existing market into many smaller and independent components. The main dominant market player is thus under assault from an inflow of newcomers who specialise in sometimes completely new sub-segments. The key to entry and success is often technological in nature. The newspaper industry is a good example. Before the advent of personal computers (and more specifically tablets and smartphones), the newspaper was the primary medium for information exchange. But the sudden emergence of the Internet completely changed everything. The newspaper’s role as an information exchange terminal was completely replaced by a variety of different and specialised tools (see below). As a result, many papers were shut and the surviving ones had to compete for a much smaller audience. The industry as a whole remains on a trajectory of decline. In almost all cases of unbundling, technology has played a prominent role. The reason why newspapers enjoyed such a long era of dominance is due to the high barrier of entry, erected by the high professional network (a pool of journalists and reporters covering a multitude of topics across the world) and distribution (getting the paper into as many households as possible across the country) costs. The Internet completely changed this by dramatically lowering the cost of both. Many journalists, including foreign reporters, work as freelancers and can be recruited easily on a per-project basis without having to be employed full-time. More importantly, the cost of distributing content in front of viewers has practically fallen to zero as news (and, in its broader form, social media information) is now accessed via smart devices. Unbundling of newspaper industry [ ] 1 The lesson of the story is that unbundling can happen to any player in any industry, so companies and investors need to be constantly alert for emerging threats to their market (which incidentally usually comes from out of the market). The new class of hospitality business Airbnb massively disrupted a stuffy, conservative hotel industry that had not changed in decades. Their software lets users of vacant properties (or rooms) with travelers who need one. It essentially brings two related issues together and solves them in a single stroke: The supply of hotel rooms in any given city is limited and travelers are forced to pay a premium on short-stay accommodation Many existing property owners have spare rooms/properties that are under-utilized and under-monetized. This is a classic case of matching demand with supply and taking a commission from each transaction. Airbnb is now the go-to platform for short-term travelers with a huge market value of $35 billion. How is Airbnb being unbundled? Of course Airbnb is not immune to unbundling, in fact it began quite some time ago already.  So the real question is how do you unbundle a multibillion-dollar unicorn? Just like most of the blue-chip juggernauts of the past, Airbnb was always going to be ripe for unbundling.  It typically takes place when a dominant company overlooks an emerging market segment (usually inadvertently due to their sizes or deliberately as a result of their strategies) which is then served by a new enterprise that quickly satisfies pent-up demand. Here are three growing market segments Airbnb isn’t catering for. Challengers in the luxury short-term rentals segment Airbnb dominates the mass market for short-term rentals and its target audience is the budget-conscious traveler. However, it is unable to cater for the high-end luxury travel segment because it lacks qualitative value in three core areas: security, brand, and service. Firstly, Airbnb is a technology platform rather than an accommodation provider. It relies on the owner of properties (hosts) to complete the final-mile service delivery. As a result, it has very little direct influence on the quality of service. There have been numerous incidents where guests’ financial and even physical securities were compromised by disreputable hosts. This is clearly a no-go for the luxury segment. Secondly, due to the mass-market nature of Airbnb, the brand is considered generic and rather low-end. To mention one is staying in an Airbnb property is like admitting that you fly with Ryanair. This is a particular turn-off for the luxury market. Lastly, most Airbnb hosts simply offer accommodation and do not provide any bespoke services (e.g. concierge, gourmet meals). Consequently, Airbnb is never going to penetrate this meaty new market of high-net-worth travelers who demand elegance and luxury in private apartment-style accommodation, without sacrificing any of the high-end services and features they could previously only find in 5-star hotels. Here are a few of the challenger brands in the ultra-high-end travel accommodation market that are looking to unbundle Airbnb. Website: HQ: United States 1. Sonder link Sonder is a Silicon Valley company that takes on multi-year leases on prime properties in many of the major cities of the developed world. It converts them according to their own unique specification and provides travelers with high-end hotel-style services. Remote customer support is available 24/7 and amenities are freely available to ensure the comfort of guests. "Given that there was such a movement from traditional hospitality to alternative hospitality, we saw that there would be an opportunity at a really massive scale to provide a customer experience that essentially resolves the two problems of consistency for the sharing economy and authenticity and uniqueness that is lacked in the traditional hotel model," Davidson, Sonder’s CEO. The investors . says valued the company at $1B Website: HQ: Switzerland 2. Le Bijou link Le Bijou is a Swiss property technology business with a valuation north of $900M that disrupts the travel industry. By taking on long-term leases on luxury properties across major Swiss cities and refurbishing them according to its precise specification, it controls the end-to-end customer experience. It uses cutting-edge technology (e.g. virtual assistant James, a combination of artificial intelligence and human-powered assistance) and ensures the security and privacy of the guests with zero human contact, something that Airbnb misses out on. According to Moonshot, a Hong Kong-based investment firm, “Le Bijou, with its perfect product-market fit and a powerful entry barrier (scale, brand, and technology), is well-positioned to reap high profitability and deliver a significant return for investors.” No wonder it has a large fan base that Steve Wozniak, John Sculley, a couple of royal families and even Jordan Belfort. Unlike most early-stage companies, it is open for private investors. reportedly includes Website: HQ: United States 3. Luxuryretreats link Luxuryretreats is a market leader in the global ultra-luxury travel sector. By matching some of the world’s most stunning villas with high-end travelers, it solves the property under-utilization problem for homeowners and provides high-end property accessibility for travelers. With a 24/7 concierge service, it is hard to go wrong. It is therefore hardly a surprise that Airbnb decided to acquire this company for over $200 million back in 2017. Challengers in the camping segment Long gone are the days when the only camping adventures you could have involved lugging around tons of heavy gear. Welcome to the new era of glamorous camping. Every year millions of people go on camping holidays where they can relax and enjoy getting immersed with nature again. Yet the Airbnb platform is ill-suited for the needs of campers (due to its property-centric business model). Fear not, there are now many superior alternatives ready to fill its place. Website: HQ: France 1. Gamping link A Paris-based company started by a group of friends who love camping. It is a platform that matches landowners with campers (and thus taking a commission in the middle). It operates predominantly in Western Europe and aims to provide a seamless, private and yet intimate experience for campers to enjoy nature whilst taking the hassle out of camping. Website: HQ: United States 2. Hipcamp link If Gamping is the entry-level land-matching service, then Hipcamp is the premium offering that brings campers close to nature without compromising on comfort. A predominantly US-based platform, it contains thousands of luxury camping accommodations (huts, yurts, tents, RVs) in some of the most stunning locations in the world. A true getaway portal to immerse yourself deep in nature and find inner peace. Website: HQ: United Kingdom 3. Camptoo link A highly specialized niche for matching mobile camping van (e.g. RVs, caravans) owners with renters. It provides a useful portal for road trippers who do not wish to fork out on expensive equipment whilst still enjoying the freedom of being on the road. Challengers in the medium to long-term rentals segment The rental market is ripe for disruption. Millions of tenancies globally still take over a month to sign, with tons of paperwork and even the need to witness signatures, even though almost all of these tasks can be performed digitally. Airbnb, being a short-term property sharing platform, therefore won’t be of much assistance. But these contenders might help. Website: HQ: United States 1. Rentberry link A platform that covers most large cities in the US and Europe, it provides a digital experience for tenants who wish to apply for tenancy. Instead of preparing tons of paperwork to prove identity and income, this process can now all be done digitally (including signature) in the comfort of one’s home. This saves time and cost for both landlords and tenants. Website: HQ: Netherlands 2. HousingAnywhere link Predominantly a European operation (however there are a few selected cities in the US), HousingAnywhere markets itself as having a premium pool of prospective tenants. As well as automating the tenancy application and payment process, it taps into a market ill-addressed by many players, namely mid-term renting (i.e. between 1 and 11 months). Website: HQ: Germany 3. Nestpick link Nestpick is a property amalgamation platform that aggregates listings on major property platforms (e.g. Airbnb, Spotahome) and presents users with a uniform view. It has a global reach and directs users to the relevant platform once selected. It does not hold any listing inventories by itself. The narrow opportunity window Unbundling is a natural course of action as a company expands and the industry mature. It is perhaps ironic that Airbnb itself started off as a result of unbundling and now it is subject to the same onslaught from challengers in areas it neglected. Consequently, smart investors are always on the lookout for assets that have proven profitability and delivers excellent ROI, as well as being future proof. The challenge is to enter the market just at the right time - when you already can recognize the future market-makers, but before it appears on the radar of big venture firms and spoiled with cheap money. In a world where , entering the market before it’s too late becomes harder and harder. the cash is trash Sources Andreessen Horowitz fund - Crypto is financial unbundling - https://a16z.com/ https://haseebq.com/crypto-is-financial-unbundling/

Unbundling New Markets: Who is Doing What Airbnb Did to Craigslist?

Setting clear diversity targets has become a common practice in tech, whether it’s to ensure that women of color make up half of the speakers at a conference, or that 25% of a company’s interviews be with black and candidates. latinx When it comes to , many companies are implementing diversity quotas. However, it’s unclear how effective they are, what hidden costs they might have, and if they’re necessary to achieve more diverse and inclusive workplaces. hiring Truthfully, I didn’t know how to even start answering these questions myself, so I set out to learn more. To be better informed, I reached out to thought leaders and experts in the diversity and inclusion (D&I) space. I share their thoughts below: “Companies need to use quotas in their hiring process in order to promote diversity and inclusion.”Agree or disagree, and why? Steven Huang Head of Diversity and Inclusion at . Culture Amp Disagree, but obviously the real answer involves a lot of nuance. Companies need to have a portfolio of diversity management strategies in order to achieve their goals. Quotas and targets can be a part of an effective strategy, but will have limited effect if done in isolation. For example, we’re beginning to fully understand the psychological processes behind stereotype threat. If you have employees that don’t understand why setting targets and quotas are effective at making up for systemic discrimination, they are likely to believe that a “white disadvantage” exists in the organization; one that threatens their livelihood. “Modern Racism” is the belief that Black people and other minorities are no longer the disadvantaged group in society and they receive unfair advantages. It sounds wild to me, but it’s a prevalent racial attitude in America today. Alex Rose People Programs at . DataDog Two years ago, I would have said that I unequivocally disagree: setting hiring quotas shifts the attention from building a diverse and inclusive company to doing whatever it takes to hit another number. I later learned about affirmative action plans for federal contractors and realized that quotas in some instances are actually required. After seeing various stages of D&I initiatives at Series A-D companies, I now think setting quotas is a good place for companies to start. By setting goals at the beginning, companies can build momentum behind their D&I efforts from the get-go. Research your industry and the locations where you pull talent from to understand the general demographics of your talent pool. Use those benchmarks to set your quotas company-wide, and once you hit those, turn your attention away from the numbers and towards becoming a truly diverse and inclusive company. Cut the data by department, location, and tenure. Challenge your team to think about diversity in terms of underrepresented people in tech instead of diversity candidates. Redefine demographics in an inclusive way by researching the latest categories and even ways to define those that are already commonly measured like gender, age, and level of ability. It’s important to remember that D&I work never stops — quotas or not! Bill Umoff Director of Technical Recruiting at . Flexport Agree. If you don’t have some type of goals in place, whether it’s at the top of the funnel, bottom, or both, you will default to what is easiest and/or in greatest supply. Aline Lerner Co-founder and CEO of . interviewing.io What do we want to accomplish with diversity quotas in the first place? Are we trying to level the playing field for marginalized groups? Or improve optics so the press can write about how good our company’s diversity numbers look? Unless diversity quotas are truly an exercise in optics, I firmly believe that they are a band-aid to cover up the underlying problems in hiring. In their worst cases, they do more harm than good, keeping us complacent about finding better solutions, and paradoxically undermining the very movement they’re meant to help. at best From a practical perspective, one of the downsides of diversity quotas is the tokenization of candidates, which often manifests as stereotype threat, one of the very things we’re trying to prevent. I can’t tell you how many times people have asked me if I thought I got into MIT because I’m a girl. That feels like shit… in large part because I DON’T KNOW if I got into MIT because I’m a girl. Stereotype threat is a real thing that very clearly makes people underperform at their jobs… and then creates a vicious cycle where the groups we’re trying to help end up being tokenized and scrutinized for underperformance. Practical failings aside, let’s pretend that quotas work perfectly and bring all the desired results. We still have to ask ourselves if we did the right thing. Any discussion about leveling the playing field shouldn’t just be about race, but also socioeconomic status, age, and the myriad of ways people are marginalized in tech. Since we can’t ask, “Were your parents poor?” in applications and it’s illegal to ask about age, we often focus on race and gender because they’re relatively easy to spot. So even if quotas worked perfectly, they’d still be a band-aid solution that’s not doing enough and ultimately covering up the fact that your hiring process sucks. Instead of trying to manage outcomes by focusing on quotas, we should get at the root of the problem and create the kind of hiring process that will, by virtue of being fair and inclusive, bring about the diversity outcomes we want. I already wrote at length about how to support diversity initiatives, but the gist is that fixing hiring is way harder than instituting quotas. Low-hanging fruit isn’t going to get us to a place of equal opportunity, but better screening and investments in education will. At interviewing.io, we rely entirely on performance in anonymous technical interviews — not resumes — to surface top-performing candidates, and 40% of hires are people from non-traditional backgrounds and underrepresented groups. The companies that we’ve hired for that have benefitted from access to these candidates have been willing to undergo the systemic process change and long-term thinking that effecting this level of change requires. We know our approach works. It’s hard, and it takes time and effort, but it works. engineering hiring/interviewing needs to change and Michael Kyle Jane Nguyen Manager of Talent Success and Head of People Development and Impact at , respectively. Redbubble Intentions are only worth something if you can hold yourself accountable to them. We do not expect our products to be better just because we intended them to be. We set KPIs, milestones, and release deadlines. There are rewards for exceeding expectations and consequences for missing the mark. The same level of accountability that we place on the development of our products and user experiences needs to be placed on making an impact with our objectives with building more diverse teams if progress is to happen faster. We believe in a diverse “top of funnel” strategy that helps us avoid the inherent problems of gaming in a quota environment or tokenizing individuals. When talent is done right, you are cultivating a community for the long term, so focusing top of funnel AND in your actual hires helps sustain progress. Diversity hiring takes longer (because the system wasn’t created overnight), and it can get more efficient with time if you invest in the appropriate short and long term mechanisms to attract people to your brand. Amy Cherette Talent and People Operations Lead at . Hipcamp I agree that companies need to make a real effort and be held accountable to goals and metrics that you’re reporting on. It’s important to remember that no one person is “diverse,” and to avoid language such as “this person is a diverse person.” I think the better language you can use is “this person will help contribute to building a more diverse team.” Anyone can be diverse in the context of different groups. As for metrics, you can start with something simple like the . Rooney Rule I am not a fan of end of the funnel hiring number quotas as I think it can have the potential to dehumanize a person and make them a number. I do think you can have quotas when it comes to different metrics throughout the recruiting funnel such as how many underrepresented candidates come through your pipeline, how far they make it, where do they fall off, how many did you interview before you made an offer? I also think you can place sourcing metrics around the top of the funnel to again, make sure you’re casting a wide net. Liz Kofman-Burns Sociologist at , a D&I hiring platform. TalVista If you believe the current system is biased, that diversity is beneficial, and you want to increase the representation of underrepresented groups then you should consider using quotas. Call it something else if you want — guidelines, goals, targets, the Rooney Rule — but don’t ignore the concept completely just because it’s uncomfortable. There is a that bias exists in hiring, performance evaluations, promotions, and pay. That means tech jobs are not currently distributed based on merit alone. Research also shows that diversity produces positive outcomes for . So more diversity would raise the bar in tech. Quotas seem to work in increasing diversity (for example, female representation in government is almost among countries that have some kind of gender quota compared to countries without quotas). mountain of evidence teams and companies twice as high The current tech jobs landscape is broken. It will take radical changes to make things better. That said, I think the impact of quotas on inclusion is still an open question. It’s possible that quotas will lead to a backlash and feelings of tokenism in the short-term. But that short-term pain might be worth the price of more inclusion in the tech industry in the long-term. Amber Madison Founder of , partnering with companies to build inclusive workplaces. Peoplism Messaging is so important when it comes to any D&I initiative. The second you use the word “quota,” you not only risk alienating many people at your company, but you also risk undermining the ability of people in underrepresented populations to do their job well. There is no point in building a diverse workforce if it’s not going to be inclusive. If team members think that someone was hired to fill a quota, they aren’t going to be as inclusive of that individual because they aren’t going to be able to fully trust that individual’s talent, intelligence, and expertise. If you care about diversity, the most important question to be asking is, “Why are some populations being systematically left out of our company?” Want to change the demographics at your company? Good. But then you have to address the root cause of why your company looks like it does…otherwise you’re trying to fill a leaky bucket. Considering quotas because you want a more diverse company? I’d recommend these steps instead: Work to confront, challenge, and change your own biases — not just become aware that biases exist. If you’re a recruiter, commit to filling the slate of candidates for any given role with at least 2 people of underrepresented genders and 2 people of underrepresented races/ethnicities. Make D&I a priority and set goals for yourself. Maybe some of those goals are around increasing representation, but take a wholistic approach to achieving that goal by seeking to understand why certain groups are underrepresented in your company (or on certain teams) and taking a range of actions to address the issue. If you are reading this with a face palm thinking, “Damnit…we just put quotas in place,” balance this out with lots of messaging to your workforce that “the best person for the job is always who we hire,” and then go through the above steps. Before you go… Several people that I reached out to didn’t feel comfortable sharing their views on this polarizing and sensitive topic. In some cases, they failed to get approval from their legal and HR teams to comment. For these reasons, I’d like to give an to the folks who did contribute to this piece: extra big thanks Your stories, experience, and insights have helped me become a more informed member of the tech community, and will encourage more open discussions about how we, as an industry, can become more diverse and inclusive. Originally published at www.keyvalues.com .

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