Tommy Nicholas

CEO @ Built (Time Magazine top 50 of 2013) to help people be more creative.

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Why is raising pre-launch often easier?

Investors love traction. Even at the early seed stage, almost every investor has “traction” near the top of their list for what they look for in an investment. And for good reason! Even with a great founder, a plausible idea in a big market, and a team to execute on the vision, there is a lot risk that nobody actually wants what the founders are building. A “launched” product with some early growth is considerably less risky than a pre-launch product. Entrepreneurs have heard the call for “traction” many times and naturally assume it is always better to launch before trying to raise VC or angel money.

There are two problems with this assumption. First, launching isn’t the only way to get traction. Second, and more importantly, there are real risks involved in waiting to raise money until after your product is fully launched. In reality, there are two types of companies

  • Companies that

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Why simple is better: people need to know what they are buying

In 2010, a multi-featured location-based app called Burbn pivoted and became a simple photo-sharing app called Instagram. Less than 2 years later, Instagram sold to Facebook for 1 billion dollars, and may be worth as much as 35 billion dollars today. Many people hailed as victory for the lean startup method1 of product development, where launching quickly, learning, and iterating is said to be the key to startup success. And those people were right! The Burbn founders launched (although not quickly), observed via analytics that the photo-sharing features were the most popular, and doubled down by iterating into an app (Instagram) that contained ONLY photo sharing and commenting. Classic lean startup story.

However, there’s another equally important takeaway from the Instagram story: Burbn had every single bit of functionality that Instagram has and more, and yet Instagram is the better

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Odd bedfellows: the strange history of VISA and bitcoin

When the founder of VISA Dee Hock joined the advisory board of Bitcoin startup Xapo, it seemed pretty strange to me. After all, Bitcoin’s very existence appears to be a reaction to VISA’s shortcomings. VISA represents everything bitcoin fans hate: fees, centralization, archaic design, and more. The VISA network, it seems, is designed to make the banks more money by charging high fees to businesses that have little choice but to accept them. Bitcoin, on the other hand, is designed to empower people to use their money with no intermediary, no fees, and no central authority to get in the way. So what could the founder of VISA want with Bitcoin, and more importantly, what could Bitcoin want with him? It turns out the story of Dee Hock and VISA is more complicated (not to mention stranger) than the dominant narrative today would suggest. In fact, VISA is arguably the best example in the

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What’s stopping users from loving fintech?

Average people do not love fintech. In fact, in many cases they hate it. I’ve seen this first hand since I took the (currently on pause) dive into fintech a little over two years ago, but two posts by Pascal Bouvier of Route 66 Ventures got me thinking about how deep this problem really is. Pascal’s example of the relative lack of progress in modernizing remittances (sending money home from, for example, the US to Mexico) is a great one: remittances SHOULD be done electronically, they ARE incredibly horrible/expensive/broken, there are MANY players trying to disrupt the market; yet, the incumbent (Western Union) is still cleaning up. Why? Because nobody is winning their users’ hearts. Nobody loves their bank, but nobody LOVES fintech startups either.

This is a problem in almost all of the major markets getting disrupted right now to some degree: banking, money transfer, credit

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What success looks like (what investors don’t tell you)

What does my company need to look like to raise X amount of money?

Almost every founder I know has this question. The founders have a vision and some unique knowledge of the market, investors have heuristics derived from the market as a whole that they use to make investment decisions. Coming to terms with these two things to define “success” for your next round of funding is critical, and founders are looking for an answer. Here’s the thing: investors won’t tell you. It is the exceedingly rare case when an investor is willing to say “if you have 10 more customers in the next 2 months, I’ll invest”. Why? Two reasons: they don’t know the answer and they want to see if you can figure it out.

 Investors don’t know what success looks like

Investors aren’t omniscient geniuses, even the great ones. Further, very rarely does any single investor have the ability to define what they would

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Fan Death

I’ve been thinking about fan death a lot lately. Many of the recent news stories I’ve been following have centered around powerful cultural myths and institutions, with defenders of the entrenched cultural forces dismissing the critics outright as ridiculous or evil. Each time I find myself caught up in these conversations, I find my mind wandering back to “fan death” and how so many people can’t shake their belief in it.

Sorry: let’s back up. What the hell is “fan death”?

“Fan Death” or “Sudden Fan Death” is a widely believed urban legend that running a fan in a closed room can kill you. I’ve heard multiple second hand accounts of a Korean person explaining their relationship with the fan death myth, each following this format:

I know fan death isn’t real, it’s ridiculous of course…… but you know it does happen sometimes right?

They are acutely aware that fan death is absolutely

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You should be trying to die

In Paul Graham‘s classic essay “How Not to Die”, PG described success at a startup like this:

If you can just avoid dying, you get rich. That sounds like a joke, but it’s actually a pretty good description of what happens in a typical startup. It certainly describes what happened in Viaweb (the startup he sold to Yahoo!). We avoided dying till we got rich.

This “figure out how to survive and you will succeed” concept is phenomenal advice - simple yet powerful - and the entire post is worth reading. However, there’s a problem. I talk to founders/potential founders all the time who have internalized the “just keep swimming” mantra and I have realized they largely don’t understand what “surviving” means. In most situations, survival has less to do with the stubborn perseverance most people seem to automatically associate with “not dying” and more to do with the brutal destruction of bad

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Why you should give your engineers more equity

Scaling hurts. For the first time in my life, I’m scaling a startup with significant hype from funding/launch to prodictable, measurable growth. The only way to do this is with a killer team, and with building a killer team comes hard questions about compensation and equity. I’ve believed for a long time that everyone at an early stage company shouldn’t just get equity - they should get a LOT of equity. I think it’s good for the company because I believe people with significant equity do dramatically better work. However, in all discussions about equity for new hires the question has to be asked: what makes you so sure that people with more equity do better work. As I was pondering an answer to this question yesterday, the perfect example of why you should give engineers more equity played out right in front of me.

Before founding Knox, I helped start, a popular ambient

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Please publicly disavow Tom Perkins at your earliest convenience

Tom Perkins continues to embarrass the VC business, the startup community, and everyone in Tech with his insensitive and selfish comments. He is constantly referred to as a “Venture Capitalist” or a “Founder of KPCB”, associating him with things he hasn’t been a part of for years. I’m sure many of you are like me and are having non-tech friends using this as the latest example of the rotten Silicon Valley culture (and rest assured: that culture does have it’s own problems), and I’m tired of discussing it. Please join me in publicly disavowing his relationship to our community and his words at your earliest convenience.

Talk to me on Twitter if you have any questions or concerns.

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The male-only version of the Female Founders Conference

Today, Jessica Livingston and Y-Combinator announced the Female Founders Conference, a conference designed to help female founders be better prepared to build successful startups. This is is presumably somewhat a response to some of the bad press (misleading though it may have been) Paul Graham recently got in response to some statements he made about female hackers, although I would not be surprised if this is something Jessica and Paul have considered doing for a while now.

Predictably, people on Hacker News immediately started in on the same argument one hears every single time a “women only” event is introduced. “This is gender discrimination,” they say, “if we had a Male Founders Conference, would THAT be acceptable?” The presumption is of course, that the male version of the “Female Founders Conference” would be the “Male Founders Conference” - a conference focused on improving

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