Mobile messengers and the post-app world

May 17, 2017

It’s no secret that I’ve been a believer in the inevitability of a swing back toward centralized architectures in mobile. Although I probably mis-timed my call of the HTML5 inflection point, I remain convinced that it is approaching, and I believe Facebook is leading the way.

Facebook has now almost completed its initial worldwide rollout of its Instant Games platform on Messenger. Today, a closed club of about 30 publishers have released approximately 50 games on Messenger. Our portfolio company CoolGames is fortunate to be part of this closed curated platform, and with 4 games live, ranks neck-and-neck with Zynga (who has also engineered an admirable comeback of their own recently) as the number one games publisher on FB Instant Games.

When the post-app world arrives, I believe it will be thanks to the mobile messenger platforms leveraging their social graphs to deploy interactive ‘apps’ on the basis of a sufficiently mature HTML5 technology. I’ve long argued that messenger platforms like LINE and WeChat were miles ahead in innovation over the alternatives in the West. On this trend, however, they’re playing catch-up to FB Messenger. Make no mistake though, they will catch this wave too.

Nightmare scenario: Ransomware-as-a-Service

May 13, 2017

The paralysis of the UK’s National Health Service’s computer resources caused by the WannaCry ransomware this week is perhaps the scariest example of the malicious software at work. (I used to joke about ransomware by telling the anecdote of a friend who was ‘caught with his pants down’ by ransomware while surfing porn sites).

However, rumors that the vulnerability exploited by WannaCry had been previously identified by America’s National Security Agency has turned amusement into terror. It’s not far-fetched to see such malicious code factories take a cue from AWS or VPN services and offer Ransomware-as-a-Service.

Post-election wish list to help France’s startups

May 8, 2017

[screen shot from Japanese TV news where a picture of Macron “マクロン” pops out of the giant macaron “マカロン”]


Now that the French Presidential election is complete, it feels like we can all get on with our lives in thinking about Europe’s startup ecosystem. In proportion to the triumvirate of Liberté, Egalité, Fraternité, here are three regulatory reforms I’d like to see to support startups. Admittedly, the ability for France’s new Président, Emmanuel Macron, to effect substantial reform remains to be seen, so consider this a wish list to foster constructive discussion.

1. Make it easier to grant equity to startup employees and boardmembers

Readers of my blog know this as one of my pet peeves. As investors in French startups, we place a lot of value on equity compensation tools for reasons of improved alignment among company stakeholders, and the affordability of recruiting talented, driven people without an unwieldy up-front cash outlay. I’ve written in the past about how the French government rendered stock options ridiculously unappealing, how issuing fiscally acceptable warrants works but not to non-executive directors, and how one of the only functioning tools are free shares (rendered palatable by the aptly-named Loi Macron) though not immune to constraints and bureaucratic blundering. From a VC perspective, I generally favor ‘option-like’ instruments (e.g. options or warrants) rather than free shares. Here, the closest functioning instrument in France today is the BSPCE (founder warrants); however, outside directors or other non-execs are not eligible for BSPCE. With a nod to the government’s fear of abuse of such instruments, I acknowledge that the definition of an eligible startups will need to be properly scoped.

2. Reduce the cost and complexity for startups to restructure their workforces

Whereas incumbent organizations may excel at incremental innovation, startups are often better positioned to uncover the disruptive innovations which can usher in exponential progress. The thing about such innovation is that it usually requires agility and risk-taking. However, when startups are hamstrung by rigid labor laws — structures whose original intent in protecting workers’ rights was laudable — they are required to hedge their experimentation efforts because the cost of employee restructuring forces excessive prudence in hiring. Let’s give the French workforce some credit: I submit that there is a segment of the working population who would willingly accept the perceived lower stability in a French startup in exchange for the higher potential rewards. The rewards are both monetary and non-monetary, whereas the former could be greatly enhanced with measures in item 1 above. As in the first item, properly defining an eligible startup will be key.

3. Re-label social charges as “taxes”

I’m not even lobbying for a tax cut nor a reduction in social charges, both of which are always welcome of course. I’m merely requesting that we call a spade a spade. Social charges represent real out-of-pocket costs to companies and employees. For example, on a hypothetical 100k€ gross salary, the actual cost to the employer is 145k€, while the net salary to the employee is a mere 78k€, and that’s net before income tax. This 67k€ in lost surplus captured by the government should be called a tax (22k€ of which was paid by the employee, 45k€ paid by the employer). Labeling this a tax under international fiscal treaties could allow foreign nationals who are taxed on their worldwide income (e.g. Americans) to apply for a rebate on foreign taxes paid. As it stands now, any American citizen working in France is subject to a double taxation on their income, since the IRS does not consider most social charges as “foreign tax.”

I wish the fresh Président all the best in his new adventure.


April 26, 2017
Image credit: peshkova / 123RF

先日、私が賞賛していて、時々連絡をとるテック CEO が、実に心に響く発言をした。彼は素晴らしい起業家で、私が知る中でも最も素晴らしい起業家の一人で、その業界では優れた先見の明の持ち主だ。成長の速いテクノロジー企業の多くの CEO と同様、彼はしばしば旅に出かけてはビジネスの話を決め、世界中に会社のことを知らしめている。






職場でのモチベーションがいつも最適な状態ではなかったり、キャリアがぐらついていると感じたりする場合は、根本的な問題について考えてほしい。職場環境を見渡してほしい。自己裁量は与えられているだろうか? 奮起させてくれるリーダーのために仕事しているだろうか? 熱意あふれる同僚に囲まれているだろうか? 毎日のように、成功や失敗を繰り返せる機会があるだろうか? 自分が、大きなビジョンの重要な要素であると感じられているだろうか?


Panel discussion on hardware investing

April 20, 2017

The other day Yohei Sawayama (500 Startups) and I gave a panel discussion on hardware investing at the DMM.Make hardware incubator in Tokyo. Some people requested a recap of our points, so here are some of the key takeaways. I’ll post the video when I get it.

Thoughts for hardware entrepreneurs

  1. IoT is not the future. It’s the present.
  2. IoT is not a trend. It is a technological shift.
  3. The opportunity in enterprise is monumental compared to consumer.
  4. Hardware is hard. People that suggest otherwise are doing a disservice to entrepreneurs.
  5. Large firms have an advantage in hardware innovation. It’s no coincidence that few genuine VCs invest in hardware startups. VCs prefer hardware-enabled software, which is different.
  6. It’s cheaper than ever to start a hardware business, but:
    – contract manufacturer selection, quality control
    – distribution costs
    – slotting fees
    – channel management
    – inventory holding fees
    – working capital challenges
    – maintenance / support costs
    –> this is why large companies are generally better at bringing hardware products to market
  7. Consider crowdfunding as a tool for marketing campaigns more than as a sole funding source.
  8. Explain how your business could scale (subscriptions, product extensions, etc.).
  9. Find the right positioning and partner with a deep-pocketed VC to have staying power.
  10. Every hardware entrepreneur should visit SXSW at least once.

General closing advice

  • don’t be afraid to try. to experiment. to be wrong.
  • don’t be afraid to engage with people outside your comfort zone. there’s value in diverse perspectives.
  • don’t be afraid to ask for help. assemble a diverse collection of advisors and solicit their advice.

So you want a job in Venture Capital?

April 13, 2017

There seem to be an abundance of blog posts lately advising on how to get a job in venture capital. Or perhaps more have just come across my desk.

One of the recent themes centers on the concept of drafting sample investment memos of potential startups to gain the attention of a VC fund by showcasing your deal screening chops. This is not bad advice. Drafting a hypothetical investment memo could demonstrate not only your ability to think critically about an opportunity, but also your ability to reason thoughtfully on an investment thesis about a market.

However, I hold a slightly different view on the most effective way to beginning a career in VC, at least from a European perspective.

A common misconception of VCs in Europe is that they spend the bulk of their time reviewing new investments. Some prolific investment funds (Kima Ventures in France comes to mind) bear this out, and to their credit have honed their investment process into an efficient machine. The vast majority of European VC funds, however, invest in a relatively limited number of new companies each year on a per partner basis.

Funnel math of course means that for each new deal, probably hundreds of pitch decks were skimmed and dozens of meeting sessions were held. Still, I would posit that the investing partners of the major VC funds spend more time helping their portfolio companies than on any other activity.

I personally spend 1/2 to even up to one full day, per week, on each of my portfolio companies. People tell me that’s on the high side, but we lead deals and always take active board positions in our investments. With that comes a certain level of commitment and responsibility.

So if the principal activity of the job is supporting the venture portfolio, then as an aspiring candidate for a job in VC, your appreciation of this aspect is what interests me most.

Being an effective venture capitalist usually requires drawing upon a diverse set of talents to help your investments overcome obstacles. I like to think of it as a combination of experience, moxie, and humility.


Have you started companies before? Do you have experience operating and scaling small ventures into large ones? Is there particular industry expertise in your background relevant to our investment sectors? Beyond the obvious domain knowledge, do you have experience in fostering diverse points of view? Do you have experience making decisions under conditions of extreme uncertainty? Are you comfortable being uncomfortable?


How will you convey your message and if necessary be persuasive to a management team over whom you hold little official authority? Have legitimacy when holding those difficult conversations with a portfolio CEO? Be your portfolio company’s best unpaid salesperson? Can you be an iron fist wrapped in a velvet glove?


The VC is not the hero, but rather enables heroes. Are you willing to play this role, or do you prefer to own the glory? Are you willing to be a fixer, clean up messes, soften up arch rivals, handle nasty litigations, and in general play the Michael Clayton on behalf of the portfolio company? Are you intellectually curious and willing to recognize that often, you are not the expert? Are you argumentative, or rather, inquisitive? Are you attached to academic theories, or rather, pragmatic and willing to simply get things done?

The VC industry is changing, no doubt about it (although it’s evolving much more slowly in Europe, I would argue). New models are emerging. There is no universal truth, such as “Only experienced entrepreneurs can become VCs,” or “Journalists and lawyers will never make it unless they come from money.”

On the contrary, practically anyone can become a VC. It’s easier today than ever before (unless of course you’re a woman or minority, but that’s a topic for another rant). There even seems to be a proliferation of self-annointed VCs these days. However, I submit that becoming a VC should not be your goal. Your goal should be to fulfill the role well, to selflessly support and add value to your portfolio companies, and to be a good steward of your own investors’ capital.


Emerging sectors in Japan: interview with FrenchWeb

April 7, 2017

France’s tech media site FrenchWeb visited Slush Tokyo last week. Here’s an interview I gave them about Japanese innovation in IoT, AI, Fintech, and Agtech (in French).

Also joining were: Benjamin Joffe of HAX, Jean-Dominique François of LaFrenchTech Japan, Vincent Bruneau and Steve Furukubo of Magency, Yan Fan of Code Chrysalis, and a demo with Touchy.

Special thanks to RougeFrog for compiling this.


‘Empathy’ is jumping the shark

March 31, 2017

One of the most powerful yet understated human emotions is under threat. Empathy is the capacity for understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another. In contrast with its close cousin sympathy, empathy approaches a truer shared experience. It is more credible because the empathizer has been in your shoes, and thus shares your experiences and values.

The trouble is, businesspeople are glamming onto the concept of empathy in order to self-promote or simply sell more crap.

Purveyors of cars, cat food, and coffee are increasingly telling us not only which brands we should buy but how we could live our lives based on collective shared values. On-demand transportation services commiserate with our oppression by the transportation incumbents and entice drivers to break free of their shackles. Travel and lodging services remind us that by staying at their properties we celebrate the aiding of refugees, or help the world come together. Even VCs are clamoring to express how much empathy they have for the entrepreneurs in whom they invest.

Admittedly, I’ve been guilty of this last one. I used to emphasize how my three prior startups, which included two flame-outs, made me a better VC. “I’ve been in your entrepreneurial shoes, with some success yet not devoid of frequent struggle and disastrous failure, so this makes me a better financial partner for your startup,” I would claim. Actually, I genuinely believe this, but it now feels contrite when I say it.

Perhaps the extent to which empathy as an advertising technique has become fashionable is best demonstrated by this video ad from the InterContinental hotel brand. Stories of the InterContinental Life Presents: Empathy – A Bespoke Connection.

The accompanying podcast’s episode notes characterize it as a “chat with a pair of philosophy experts about the rewards of empathy in our daily lives.” Seriously?

As this trenchant piece in The Atlantic sums up perfectly, current ads that evoke the ethic of empathy reflect not only our cultural moment but also our technological one. They focus on empathy-infused user experiences which put the “sell” in the celebration of human connection.

I fear that empathy is jumping the shark, and that triggers my profound sympathy.

Sumo in Osaka: Time for Spring Renewal

March 26, 2017

Since I’ve started the habit of posting on sumo championship days, I figure why not keep the momentum. This Osaka basho was especially significant for a few reaons:

First, it was Kisenato’s first tournament as a newly-minted grand champion Yokozuna. The first Japanese native Yokozuna in 19 years, “Kise” set out to prove to the skeptics that his promotion after his first and only basho victory was merited. His consecutive Emperor’s Cup with an exciting playoff victory coupled with his consistent sumo over the past year makes it hard to dispute his talent. In a nod to the skeptics, however, the way Kise was mowed down by fellow Yokozuna Harumafuji on Day 13 allows for some lingering questions.

Additionally, this tournament represented former Ozeki (and January 2016 winner) Kotoshogiku’s last chance before permanent demotion. The “Giku” needed 10 victories to automatically bounce back up to his Ozeki rank. He fought well but came up short. Athough no announcements have been made yet, I fear this may be the last we see of Kotoshogiku in the dohyo.

Once Ozeki Goeido pulled out in the first few days, only Terunofuji remained at this rank. And boy is “Terror-nofuji’ back! This was the Terunofuji I admired from 2015, before he became dogged by injuries. During this basho, Terunofuji looked stronger than every other rikishi, all three Yokozuna included. He will definitely be one to watch at the Natsu basho in Tokyo in May. I also look forward to seeing more from Mitakeumi, Ikioi, and Ishiura.

Finally, it feels like sumo is transitioning into the end of the era of Yokozuna Hakuho’s dominance. Hakuho pulled out with an injury and an early loss. If a change of reign is approaching, Terunofuji strikes me as the only prospect to take over the mantle, but that’s only if he remains consistently healthy. More likely is we enter an area of relative parity among the grand champions, which will make for more suspenseful sumo.

You can’t manage what you can’t measure (or, How to enter the multiverse)

March 15, 2017

I just read a sci-fi thriller about parallel universes that may be a candidate for this year’s summer reading list. Part of the plot invokes the Heisenberg Uncertainty Principle.

In the past I’ve reflected on the impact of the Heisenberg Uncertainty Principle in journalism, but this novel in combination with this excellent interview with Chris Anderson inspired me from another angle.

Quantum physicists have identified the principle of superposition, illustrated by the thought experiment of Schrödinger’s Cat. Austrian physicist Erwin Schrödinger posited that a cat locked inside a steel chamber along with a quantum particle will remain in quantum superposition until it’s state is perceived by an outside observer.

In the novel, a scientist discovers a way to travel into parallel universes by using a drug that inhibits his ability to observe his state, thus allowing him to maintain a state of quantum superposition.

In other words, he overcomes the Heisenberg Uncertainty Principle by not collapsing the channel to parallel universes because his mind cannot measure the state.

So if the act of measuring something changes its attributes, what about the inverse?

In order words, can you change an object’s attributes without measuring them? I would agree with Chris Anderson that the answer is not much. In business parlance, you can’t manage what you can’t measure. Or at least you cannot optimize the management of something without having the capacity to measure it. As an entrepreneur, how do you optimize your company’s growth if you can’t know the results of your actions?

In the digital world, where concepts like A/B testing, click-through rates, user acquisition costs, lifetime values, etc. are ubiquitous, precision measurement has now become commonplace. Using multivariable analysis on big data sets, one can determine how likely you are to click on an ad, whether you qualify for a loan, or what kind of movie you’re likely to enjoy next.

Experiment, measure, and adjust

The startups on whose boards I sit know that I’m a stickler for measuring: experiment, measure, and adjust is my favorite rant. Perhaps it’s driven by my fear that if we don’t make a habit of doing it, our competitors that do will eat our lunch. They will be running what people in robotics call closed-loop systems, while we’re running an open-loop one.

Now the amazing thing about the internet of things is that the proliferation of sensors will enable better measurement in the physical world. As Anderson puts it, “We are going to be able to close the loop in industry, agriculture, and the environment. We’re going to start to find out what the consequences of our actions are and, presumably, we’ll take smarter actions as a result.”


Back by popular demand: Buy, Sell, or Hold

March 9, 2017

A year ago I played Buy, Sell, or Hold on a trip home to Silicon Valley (the logic being that not all but many global trends start in California). The post proved so popular that I decided to play the game again last week.

(For those not familiar with the game: Buy, Sell, or Hold? is quite simple. If <X> were a stock, would you buy, sell, or hold ?)

1. Buy, Sell or Hold on… Snap – Buy at the IPO, Sell on the short-term gains

Wisdom suggested that the investment bankers would assure a first day IPO pop whereas the business fundamentals would weigh down the long-term prospects for the stock. I blindly followed the advice, which paid off. However, this eagerly-anticipated milestone may not open the flood gates for tech IPOs as many VCs had hoped.



2. Buy, Sell or Hold on… Paying extra for avocado – Buy

Until innovation in agriculture can reduce the water consumption of avocado cultivation in drought-stricken California, paying extra for guacamole is here to stay. The phenomenon has apparently reached prime-time with American late night talk show hosts finding fodder in it for their stand-up jokes.



3. Buy, Sell or Hold on… The white alpha male – Sell

Consensus was that this beast’s days are numbered. Feels like each early morning Tweet and afternoon HR scandal corroborates this hypothesis.


This week’s conferences on Mobile and Gaming trigger a nostalgic trip down memory lane

March 3, 2017

[Note: this is the English version of yesterday’s piece I wrote for Japan’s publication, The Bridge. The Japanese version can be found here.]

This week we have the Mobile World Congress in Barcelona and the Game Developers Conference in San Francisco. Both major technology conferences; both happening at the same time. So difficult to choose…

Although never a hard-core gamer, I can think of three video games which hooked me over the course of my life. Perhaps symbolically, each corresponded to a different stage of my life as well.

First there were the Nintendo Game & Watch devices which I collected as a young boy. My favorite was Fire, but I managed to amass games like Octopus, Helmet, Parachute, and then later the double-screened Game & Watches like Donkey Kong and Mario Bros. My version of Fire still has the dents from when I hurled it across the room in frustration, but the others remain in practically mint condition. That’s how I know that Fire was my favorite. A stroll in Tokyo’s Akihabara district the other day made me realize how valuable these collector’s items have become.

In the modern era, a game consultant in Japan introduced me to GungHo’s Puzzles & Dragons in 2012. This mid-core smartphone game fascinated me in two ways. First, the combination of a Match-3 game with a dragon battle game represented a level of sophistication that I had never seen in the West. Additionally, the innovation around the gacha monetization technique opened my eyes to the business potential of mobile gaming in Japan. Although after five years PazuDora is finally in decline, the game is the most profitable F2P game ever. (Incidentally, I’ve written previously about the present-day threats to the gacha technique).

For the decade in between, i.e. around the turn of the century, the game that hooked me was Snake on my Nokia feature phone. Remember those old Nokia feature phones? A Nokia was my first mobile phone, and I must have cycled through half a dozen of those reliable devices during this period. That was of course before the smartphone revolution, back when we still used mobile phones for talking. Navigating through the memorized key sequence to Snake probably fell second only to checking voicemail among my daily routine.

The union of the snake is on the climb

Two major announcements broke this week for nostalgic fans like me: At MWC, HMD Global (which now owns the rights to make Nokia phones) announced that they are bringing back the classic Nokia 3310 phone. They announced the retro re-launch as a “One More Thing,” underscoring the only three things that matter: its battery lasts a month, it has Snake, and it has the Nokia ringtone.

And on the other side of the world, our portfolio company CoolGames announced that they’re bringing Snake into the new generation. CoolGames is launching Snake on Facebook Messenger’s Instant Games, a harbinger of the next form of disruption in mobile gaming in my opinion.

Perhaps I fit perfectly into the demographic motivated by nostalgia. I for one look forward to the return of Nokia’s 3310, to the return of Snake, and to how this future paradigm of mobile gaming will entertain us while still letting us hold on to the things we cherish.


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