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small habits

I’ve been trying more intensively in the last months to factor this in my day-to-day routines. With some success, actually!

This is a good read from a cool newsletter and podcast (The Knowledge Project) done by Farnam Street:

Here’s how the math works out: if you can get 1 percent better each day for one year, you’ll end up thirty-seven times better by the time you’re done. Conversely, if you get 1 percent worse each day for one year, you’ll decline nearly down to zero. What starts as a small win or a minor setback accumulates into something much more.

Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.

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Cloud Judgement

The Q3 Report

A very detailed and relevant method of assessing the value of SaaS public companies. Worth a read.

Link to blog post – Cloud Judgement 

“Q3 earnings season for cloud businesses is now behind us. The 61 companies that I’ll discuss here (which is not an exhaustive list, but is still comprehensive) all reported quarterly earnings sometime between October 26 – December 9. New additions to the analysis from Q2 include Snowflake, Asana, JFrog, and Sumo Logic.  In this post, I’ll take a data-driven approach in evaluating the overall group’s performance, and highlight individual standouts along the way. As a venture capitalist, I naturally cater my analysis through the lens of a private investor. Over my ~4.5 years at Redpoint Ventures, I’ve had the opportunity to meet with hundreds of entrepreneurs who are all building special companies. Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback).”

Dive in!

Q2 Report also available here

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Inside Pixel HoHoHo

Hit me baby one more time!

I don’t know if you remember, but by this time, last year, we launched 20by20. A brilliant (we believe) initiative that gathered several players from the Portuguese entrepreneurial ecosystem to give their vision on what would be the trends for 2020. As you can expect, none of us predicted that the trend would be … well … hell.

Don’t get us wrong. Our guest writers were actually really good predicting the technological trends and the pandemic accelerated the adoption of some of the solutions we’ve all been preaching about for some time now. Let’s take a quick look to the macro topics highlighted last year:

· 5G – it seemed that the new generation of broadband cellular networks was getting in shape in the beginning of the year, but it seems like we will have to wait a bit more while companies and regulators find a deal. Meanwhile, several industries are already preparing their products with software that benefits from this technology (e.g. ultra connected cars), so, we think it’s safe to say that we’re not that far.

· Cybersecurity – definitely a trend, but not a winner. Companies had major difficulties protecting their assets with the transition to home offices. Many still had on-premises servers and had their workers accessing them via VPN. It’s crucial to prevent and people are more aware of that, which led to a hot November for this industry.

· Sustainability – a strong (but no one expected to be this stronger) winner. Airplanes grounded, cars in garages and people consumerism at its minimum level. No one expected this. The planet gained a few days, and so the future generations.

· The gig economy – well… not a good year for it. Let’s skip this.

· Technology at the service of the humans – ding ding ding. Ladies and gentleman, we have a winner! We never saw so many developers, founders, creatives joining forces to create technological solutions to respond to so many different challenges of the societ

So, let’s do it again! Now with a special guest.

As you see, we really liked this concept. So, this year we invited 21 people to set 21 trends for 2021 – introducing 21by21. Excited, yet? First of all, who are they? They are founders, investors, businessmen and women, from different sectors and with different backgrounds. A conclusion that we always find interesting is that, even though we all belong to the same industry, one way or another, all of us have a very personal perspective and that brings value to it.

So, without further ado, the bets for 2021 are on:

·   Sustainability – elected by the second time in a row. No one expects consumer habits to go back to be the same, and people are more severe when choosing brands that show concerns with the environment and a transparent supply chain.

·   Short video will dethrone YouTube – new generations don’t have the same attention span, they don’t need more than a few seconds of video to know the highlights. Let’s see if this is the year of short videos and how influencers and entertainment industries will adapt to that demanding new process.

·   Brain food – mental health is now one of the biggest concerns of people and companies for 2021, and it is expected that more and more consumers will look for products that help them stay focused and fight anxiety, and that more companies will launch products with L-Theanine, caffeine and cannabinoids.

·   Hybrid work – All of us have already experienced the benefits (and challenges) of home office, but organizations are facing some additional adversities in transmitting their culture to their workers, so hybrid methodologies are being highly praised by leaders across industries.

·   Data – 2020 locked us down, so all we had was the internet. Companies collected years-worth of online growth and client & sales data, and they can now use them wisely (if they know how to…).

·   VC investors are hopeful – startups will have a major role in the recovery of economies worldwide and our part as investors is to boost them up. Governmental entities may also find in these private, agile companies a faster way to innovate and solve society’s new challenges.

Last but not the least, we invited a very special guest to participate: AI. GPT-2 wrote a very clear text of what it expects to be the trends for 2021. Curious? We were too.

Read more! and the past editions are also cool!

Thanks to all the participants of this initiative. It couldn’t have been possible without you. Let’s hope we don’t mess up next year too!

Thank you to those who followed our endless thoughts throughout the year. If you want to catch up, you can see what we’ve been talking about here…

March – Investment: “You can do anything. But never go against the family”

April – The unexpected new world

May – The winner takes it all

June – I want damage modeling

July – When the going gets weird, the weird turn pro

August – The bright new days

September – We’re chained

October – The perfect storm

November – Everybody be cool, this is a robbery!

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Birth of the Frankenfirm

I think the Frankenfirms trend will not affect the Big Tech (FAMGA) that are already too big to have UE or US (perhaps only China can…) impose anything major that will cause a real dent in their market positions.

It’s easier to attack TikToks or impose things to companies like ARM in a M&A scenario, than to split Amazon or impose change to Google or Facebook.

We are going perhaps to see an economic cold war between China and US but these Big Tech are meta-state companies. It’s going to affect a lot more the rest of the pack… I believe.

Great article from The Economist:

Will TikTok survive?

The contortions at TikTok and Arm are an unfortunate sign of things to come

On august 6th, when the White House told TikTok that it had 45 days to shut down or find an American buyer, there was a risk that the Chinese-owned video app would disappear from America, infuriating its 100m users there and destroying billions of dollars of investors’ wealth. Now a last-minute fudge seems to have been found. TikTok has said it will enter a complex partnership with Oracle, an American tech giant, that is designed to show it is more under American sway. The day before Nvidia, an American semiconductor company, bid $40bn for Arm Holdings, a British-based chip-design firm, triggering a storm in Britain about how to stop its tech champion from being dragged into America’s trade war. Far from being oddities, the two episodes offer a preview of how the new age of nationalism will change the way multinational firms are run—for the worse.

Both companies straddle geopolitical divides and are at the heart of the digital economy (see article). TikTok is owned by ByteDance, a Chinese tech star. The White House says it fears that users’ data are being sent to China, where Big Brother can spy on them, and that the algorithm which selects videos is vulnerable to Chinese manipulation. Arm’s designs are used worldwide, not least in America and China, its two largest markets. Britain’s government worries that a takeover will see key activity shifted abroad (in 2016 Arm was bought by SoftBank, a Japanese firm, which promised to keep the firm’s base in Britain until 2021). A further concern is that, under American ownership, Arm will no longer be a “neutral” supplier, instead becoming an instrument of Uncle Sam’s expanding sanctions regime.

Throughout history companies have adapted to geopolitics. In the freewheeling era of globalisation that began in the 1980s, the idea took hold around the world that all firms should be treated equally, regardless of their nationality. That made it efficient to operate as a global firm with a unitary management, capital structure and system of production. By contrast the 1930s and 1940s were plagued by wars and protectionism. Businesses such as General Motors responded by allowing their foreign operations to become semi-autonomous. Rather than merge, many firms co-operated across borders through alliances and cartels.

The proposed TikTok deal shows how business is heading in a 1930s direction. Although the details are not yet public, the firm’s ownership will probably change, with American shareholders, including Oracle, and possibly Walmart, holding a large minority stake, perhaps with rights to veto some decisions. The location of key assets will shift, with the headquarters moving to America and Oracle managing the data-storage there (and monitoring the algorithm). Arm, meanwhile, has already contorted its structure once to deal with geopolitics: in 2018 it sold a 51% stake in its China operation to mainly Chinese investors, including state-backed funds. Now it may face a new metamorphosis. The British government, for example, may demand further legal guarantees that it is run autonomously in Britain. That would be part of a push to bolster the country’s industrial base, which has triggered a row with the European Union (see article).

Continue reading “Birth of the Frankenfirm”

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chained

In the last few years, multiple transformations in the service and product industries linked to information technologies have taken place – all at a frantic pace as the web 3.0 evolved, matured, and found its place in the market. However, when considering the one that has the potential to be the most disruptive, blockchain is definitely in the spotlight. Nevertheless, since its announcement, there’s been ups and downs and it hasn’t exactly lived up to the hype.

Many factors make the world question if blockchain will effectively be part of our daily lives. Yet, at the same time, there’s already enough proof that the technology is more than Bitcoin and it can actually have a positive impact across different sectors. But don’t let us preach to you about it, let us show you what’s coming next.

Way beyond Bitcoin…

The popularization of blockchain happened mainly due to the use case of digital assets, commonly known as cryptocurrencies. In the aftermath of the 2008 crisis, Bitcoin was created in a totally decentralized approach without requiring governance from any formal entity. In an almost utopian yet controversial way, it poses as a mechanism for transferring and saving “value” in a fully digital and distributed format. Nonetheless, there’s a myriad of other applications aiming at changing the world:

  • Insurtech has stepped up the game and is using blockchain to reduce fraudulent claims and ease a process that typically takes up a lot of time and energy (checking evidence and making reinsurance more efficient). Lemonade is the reference startup (which has become the best IPO in 2020), but several other startups are disrupting the space with P2P Insurance (such as Teambrella or, once again, Lemonade) and Claim Management & Risk Assessment (Tierion is improving claims processes while Cropt is supporting insurers with satellite data to confirm the actual damage presented by farmers, and machine learning algorithms to predict the yield of crops and the risk associated).
  • Supply chains have been drawing a lot of attention with blockchain solutions being deployed to keep track of the goods’ route and also optimize logistics. We don’t have to go far for this one. Both Auchan and Lidl Portugal announced they’ll be tracing the origins of all food with blockchain as a quality control measure to meet the growing demands of today’s consumers. As for some of the hottest startups, it’s worth highlighting:Everledger, Provenance and  TE-Food.
  • In the civic domain, a lot is going on. Startups like WalliD, which is turning to blockchain to privately store users’ ID documents in a digital wallet and design a global protocol for digital ID transactions, and Civic, which has the same principles but applies them to the management of digital currencies, are exclusively focused on identity. Plus, if we take a collective standpoint, there are many other compelling initiatives such as Follow My Vote, which is fighting to bring more transparency to polls and put an end to election fraud, or, speaking of transparent voting, TAIKAI, born in our MVP program as a blockchain-based platform for hackathons, which is fostering open innovation by connecting tech enthusiasts to companies that have challenges and are desperate to solve them.
  • Regarding security, decentralized storage platforms are picking up steam. Nowadays, data is seen by many as more valuable than money, so hackers are sort of modern pirates. To avoid being looted, or in other words, to prevent breaches and better safeguard data, decentralized storage platforms such as the ones that are being built by SIA, Storj or FileCoin (based on IPFS) look like a good option because, instead of having all files stored at the same place, they’re broken apart and scattered across multiple nodes on a network, making it impossible to read the entire content from one fraction.

Blockchain can be set up to operate for a variety of purposes, and its community is committed to expanding the technology’s level of influence. Judging by its success and increased use, I would say it seems that blockchain is poised to rule the digital world soon.

Continue reading “chained”