Move forward to 47:18 for my segment:
In 3 weeks, the founders of Yardsale built and launched the first version of FOBO (Free or Best Offer). A lot of startups talk about launching fast and iterating, but sometimes you see a company doing it extremely well. Just watching this team execute, I felt like there were lessons worth writing about.
How FOBO works: everyone has something that you'd like to give away or sell, but don't have time to research and optimize price, deal with dozens of emails, and coordinate pickup, or ship the item, in the case of eBay. You post it on FOBO and they instantly price it (using a catelog of eBay historical sales) and they guarantee that your item will sell in 97 minutes.
My take: I have things I'd like to get rid of, but I'm too busy to post and negotiate for things on Craigslist. Some of the things are really valuable, so I'd love the option of at least making some money on it.
Here are the things that impressed me about their execution:
1) The founders built the first version 3 weeks. They didn't spend weeks debating color gradients. They know that gradients won't create product / market fit, so they're focused on the things that matter. In fact, they found out fast that many of their original assumptions were wrong (which is the case for most first versions of products), but since they built it in 3 weeks, they had plenty of time to iterate.
2) They forced every new feature to fit in a 2-day spec. So, they avoided long (and dangerous) development cycles. The version that you’re seeing launched on TechCrunch is version 262.
3) They didn’t launch with payments. They manually sent all payments via paypal.
4) They used old code whenever possible and built everyone on Parse. With no back end coding they just focused on user facing functionality.
5) The founders did everything they can to make sure their initial users are happy. Ryan (one of the founders) listed his personal cell phone number in the app and all newsletters. When I reported a bug and then didn't reply, they contacted me several times, sometimes over text, until the bug was fixed. (He's a friend, so he has my number).
5) It's a two sided marketplace and they're doing everything they can to seed the marketplace with buyers and sellers. The founders offered to come over and help me post things. They're also buying and selling products themselves.
6) They have a revenue model. In the event you sell something, they take 15%, which is completely reasonable. They're building a real business immediately into the product. I'm glad they're not telling users that they'll get paid on the credit card fees at volume. Ryan just told me that they’ve paid for rent with it several times over.
7) It's hard to put my finger on it, but there's something really creative and compelling about the product. It makes me think about how Twitter and Vine took off. I find myself checking FOBO daily to see what's available.
I think it can be valuable to write about companies after they're multi-million dollar companies, but sometimes, it's interesting to see how a team operates to get initial product market fit.
If you'd like to try it out, go to fobo.net!
I'm always curious about the rationale behind investment decisions. Semil Shah has been writing posts about why he made each of his investments. Here's his post about us:
I met up with someone who had raised over five million dollars with almost zero effort. He sent off a few emails with the terms that he wanted and the investors agreed. The round was done. It was incredible to see.
When you raise from angel investors, they need to be 'accredited' investors. That means they make $200,000 / year or have over $1 million in net worth. If you have a spouse, that's $300,000 / year. 
Under the new law, it's now the company's obligation to verify that someone is an accredited investor. One way to do that is to ask for an investor's tax returns. Not only is that difficult to ask, it will increase the time to raise, plus the due diligence process, which also increases legal fees. Imagine getting the tax returns from 20 people while trying to close your round. Naval, CEO of Angel List, has a great post on the implications of the Jobs Act.
Note, you can chose to keep your fundraising private, which allows you do to verify accreditation the old way. However, it's now unclear if events like Demo Day, a post on Facebook or other pitch events would count as 'general solicitation'. You don't want to run afoul of the SEC.
 SEC rules on accredited investors: http://www.sec.gov/answers/accred.htm
In Silicon Valley, you can make verbal agreements representing tens of thousands, hundreds of thousands or even millions of dollars. Before you sign a document or transfer money, you can have an extremely high level of confidence that the investor will follow through with the investment. These are called 'commitments.'
There are a few reasons why commitments work well here:
- Reputation is important. Usually the best companies can choose their investors, so founders tend to pick those with the best reputation.  For those who invest often, there's an incentive to protect your reputation and follow through.
- Standardized terms. Terms have become fairly standard in startup investing in the Valley. Especially for seed rounds, which narrow down the area of agreement to the amount invested, the price of the round and the potential discount. 
A founder and investor could disagree over whether they actually committed. This is the main risk of handshake agreements. Paul Graham recently wrote a post suggesting how the handshake agreement process should work, which minimizes that risk.  You can see the email above that we started using for commitments. It worked great.
With that said, being highly confident that someone will invest isn't the same as the actual investment; it's not your money until it's in the bank. As one example, Modista had $600k in commitments; they were hit with a patent lawsuit and none of their investors followed through with the investment.  During the financial crisis in 2008, many investors withdrew their commitments. That was just 5 years ago. Commitments work, but they are never the same as an actual investment.
 When Dropbox raised their $250m round, they were able to pick the investors they wanted the most. This would also apply to other companies that are high in demand. It helps for an investor to have a great reputation to be able to participate in these deals. Someone without a good reputation wouldn't be invited to invest: http://dealbook.nytimes.com/2011/10/18/dropbox-confirms-250-million-investment/?_r=0
 For seed rounds, convertible notes are relatively standard. There are also standardized series A docs, which are still more complex than a convertible note. In that scenario, you sign a term sheet with general terms and then refine the details afterward.
 Paul Graham has a helpful post about the commitment process: http://ycombinator.com/hdp.html
 Modista was sued by Like.com before they collected their commitments: http://www.k9ventures.com/blog/2011/04/27/modista/
When I went out and raised the first time, there was a company that had raised just before us. I didn't know the company, but apparently they pushed potential investors very hard. They had a mentality that you were in or out, which turned a lot of investors off, even the ones that ultimately invested. Regardless, they were in high demand and closed their round quickly. When we raised, I found myself having to explain that we were different, that we were looking for investors that would be long term partners.
Some founders have been asking me about fundraising, so I thought I'd start writing about the tips I've collected from other founders. Some of the best advice I received were procedural. This one was from Jude.
If you're raising in the Bay Area, you know that it takes about an hour to go between San Francisco and the Peninsula (Menlo Park, Palo Alto, Mountain View). If you have to drive up and down multiple times in one day, you won't be able to have as many pitches.
To the extent possible, make sure all of your meetings are in the south or in the north in any given day. When I look back I my calendar, this allowed me to have 5+ meetings per day during the fundraising process.
Building a great company is about predicting the future. You build something people want now and predict they'll continue to want it in the future.
There's something Garry Tan sometimes says: he starts a sentence with "if you live in the future…" and completes it with a prediction about how the future will look.
Things that seem unlikely to happen tomorrow, but could happen years from now, start to seem plausible.
Steve Jobs might have said, if you live in the future, the file system will be less important. He built iOS devices to not have a central file system. 
Drew Houston might have said, if you live in the future, you will have a file system that's accessible anywhere, from every device. He built Dropbox.
Elon Musk might have said, if you live in the future, cars will be electric. He built Tesla.
Dean Kamen might have said, if you live in the future, you won't drive short distances. He built Segway.
Bill Gates might have said, if you live in the future, there will be a computer on every desk. He built Microsoft.
While seemingly simple statements, they produce high stakes decisions. You bet your company or product on it. It creates focus.
I think the minimum viable product has made us so effective at thinking short term that we spend less time thinking long term. We talk to customers and iterate daily. But, we may forget about this future world in which our products exist.
Before you build, it's worth making a guess about the future, even if it seems obvious. Don't think about switching costs, moats and other barriers to entry. Just think, if you live in the future, what does it look like? When you see it, that's what you should build.
Comments on Hacker News: https://news.ycombinator.com/item?id=5799838
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 Steve Jobs discussing the file system in 2005: