Above: One of my favorite moments in 2018, with the a16z team and POTUS44.
Dear readers,
Wow, so 2018 was a year with a lot of change – I started a new job, recommitted myself to writing (and tweeting), traveled a little too much, moved back down to Palo Alto (temporarily!), and much more. And in one of my favorite moments of the year, the office got swarmed by the Secret Service because Barack Obama came to visit – that was fun.
I’m also happy to redouble my efforts to writing and publish more, which I can do my new role as an investor at a16z. Previously, my pace was maybe once every other month – things were always too crazy at Uber, and it didn’t directly help my job there, so I couldn’t carve out time. These days, I consider writing as part of my work and dedicate time to it, blocked out on my calendar. As a result, I’ve been able to publish a few times a month lately – I want to continue pace into 2019!
In the spirit of trying something new, I decided to take all of my 2018 essays and turn it into an ebook PDF that you can read at your own leisure. It’s over 50 pages, includes all my essays, and alongside 200 slides in decks I published this year, you should have more than enough content to read through for a while. If you have feedback on this format, shoot me a tweet! And as always, you can get future updates by subscribing to the newsletter or follow me at @andrewchen.
Thank you for reading! And happy 2019.
Best,
Andrew
Download a PDF with 2018 essays
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Links and notes
The red flags and magic numbers that investors look for in your startup’s metrics – 80 slide deck included! I put together a deck that summarizes the way that I think about evaluating the “quality” of growth for a new product. The deck unpacks a lot of different topics: How “growth accounting” metrics are great, but are lagging indicators. How to think about acquisition loops and engagement loops, and how to look for red flags like being overly dependent on a channel, or abusing notifications, to artificially boost metrics. The deck was designed for investors, but for every entrepreneur that wants to honestly evaluate where they are, it’s a good read too.
Consumer startups are awesome, and here’s what I’m looking for at a16z (70 slide deck). For the a16z annual summit, I put together a presentation introducing myself and what I’m excited about in the consumer investing world. It goes over historical precedents for give/get referrals, content marketing, and trying to bootstrap two-sided marketplaces. The deck also explains some of the big technologies and platforms coming down the pipe, and why I’m particularly excited about esports/gaming, offline experiences, and much more.
How to build a growth team – lessons from Uber, Hubspot, and others (50 slides). For a recent conference, I put together a series of lessons for companies that are looking to start growth teams. It starts simple, with the question of what growth teams are meant to solve, but also goes into organizational structure, ideal profiles/backgrounds for the team, how to ideate and prioritize projects, and more.
How startups die from their addiction to paid marketing. It’s so easy to get your product jumpstarted by buying ads to drive users, and hey, the LTVs and CAC ratios are working! But as I describe in this essay, it’s also easy to get addicted and ride the cost curves all the way up to the point where it makes no sense, and the degradation of these channels is a given.
What’s next for marketplace startups? Reinventing the $10 trillion service economy, that’s what. Co-authored with a16z partner Li Jin, we write about the next generation of marketplace startups. Whereas the previous generations have been about getting “stuff” to people, the next big opportunity will be to get services. The essay talks through why this has been so hard in the past, the benefits of having software intermediate the interactions, and the various ways that supply can get unlocked using technology platforms as the foundation.
Required reading for marketplace startups: The 20 best essays. This one’s not included in the PDF since it’s just a bunch of links, but wanted to include it here anyway. It’s a collection of links about marketplaces – from solving the cold start problem to metrics on marketplaces to specific case studies. It’s a must-read for anyone working in the space.
Why “Uber for X” startups failed: The supply side is king. One of my big lessons from Uber is that the supply side of the market is critical for any startup. I explain in this tweetstorm-turned-essay why the various “Uber for X” startups did a poor job satisfying that side of the market, even as the promise for us as consumers sounded great.
The Power User Curve: The best way to understand your most engaged users. At a16z, we often use frequency histograms – aka “Power User Curves” – to evaluate whether or not there’s a core community of users who are highly engaged. In this essay, co-authored by Li Jin from a16z, we break down what we look for, the variations on the curves you might see, and how this curve relates to the popular DAU/MAU we also ask for.
DAU/MAU is an important metric to measure engagement, but here’s where it fails. The DAU/MAU metric is an important measure of usage frequency, and was popularized by Facebook from the early days. This essay breaks down when its history, when it’s useful, and where it breaks down.
Conservation of Intent: The hidden reason why A/B tests aren’t as effective as they look. Everyone’s had the frustrating experience of running an A/B test, seeing a big lift, closing it out, and expecting the top level metrics to move a lot. But they don’t. This post explains why – “user intent” can be thought of as a fixed amount of energy as they approach the top of your funnels, and it’s hard to move it a lot.
The Startup Brand Fallacy: Why brand marketing is mostly useless for consumer startups. One of the opinions that always stirs up the hornet’s nest on Twitter is my opinion is that startups should do less brand marketing, PR, and other related activities and instead just focus on product/market fit and highly accountable performance metrics.
The Scooter Platform Play: Why scooter startups are important and strategic to the future of transportation. I’m a big fan of scooters, and here, I unpack why I’m excited about the entire category. Because scooters are used more frequently, and for shorter trips than rideshare, it creates a huge opportunity to be the “starting point” for transportation.
The IRL channel: Offline to online, Online to offline. As digital customer acquisition channels become saturated and easily copyable, one of the unique opportunities is the “IRL Channel” where people engage your product in their everyday, physical lives. Whether it’s a group of people walking around playing Pokemon Go, a microwave that has Alexa embedded, or scooters, this is one of the opportunities to combine our offline and online worlds.
I’m joining Andreessen Horowitz!. Here’s the initial announcement I made about joining a16z! Includes a few notes on how I know the folks at the firm, and what prompted my decision.
Podcasts
I didn’t include any of the podcast transcripts into the downloadable PDF, but wanted to include the essays here for completeness.
a16z Podcast: Why paid marketing sucks, Network effects, Viral Growth, and more. An interview with my a16z partner Jeff Jordan (who led our investments into Airbnb, Instacart, Pinterest, etc.) and we discuss some of the nuances of growing marketplaces, how to measure traction, and things to watch out for.
a16z Podcast: When Organic Growth Goes Enterprise. In this podcast, a16z partner Martin Casado and I talk about the intersection of enterprise sales and consumerized growth tactics. He’s on the enterprise team and I generally focus on consumer, but we look at a lot of companies together.
Product Hunt Podcast: Silicon Valley network effects, OKRs for your personal life, and more. My sister Ada (ex-Linkedin, SurveyMonkey) talk about life in the tech industry together, why we moved to the Bay Area, using OKRs to set goals, and a breadth of other topics.
