Happy September everyone!
That marks the end of my first summer in London. It was definitely one to remember. My networking kicked up a notch, I made plenty of friends and I even managed to escape to France during August to get some well-needed sunshine. See holiday spam below:
At Kennet, we experimented with targeted networking events over the summer, where we invited CEOs for a fun day out. The events were great for attracting and getting to know company leaders. The attendees seemed to enjoy them too.
Cap Table/Round Model
Knowing your way around a cap table/round model is a useful skill for any investor/CEO. When I first started in VC I figured any excel activity would be a walk in the park compared to the much later-stage models I had worked on at a previous role. I remember being rapidly humbled by an attempt to create a waterfall on day two of my new job. It took me a few months to figure out how to create a truly dynamic model. The plan is to share my learnings here.
If you are not fully comfortable with circular logic and round models then be sure to watch this video. I will take a look at some more complex situations in the next video. As always, feel free to get in contact if you want the excel sheet.
Productivity Tech
Five Books is not exactly productivity tech, but a worthy carve out I came across during the month. It is a website that recommends five books for any given topic you want to research. All recommendations are created by domain experts to give peace of mind on investing the time to read each book. As a recent, somewhat consistent reader, I find it very useful for building my non-fiction reading list.
Books & Podcasts
Influence: The Psychology of Persuasion - Robert B. Cialdini
Influence brought back great learnings from my door-to-door sales career selling credit card machines in Vancouver when I was 19. Robert Cialdini did some impressive first-person research working at different sales organisations to help tease out 6 principles as to why people say yes (Reciprocity, Commitment, Social Proof, Authority, Liking and Scarcity). Although the book was written in the 1980s, the principles have stood the test of time.
With many jobs, the more senior you get, the more important sales skills become. Whether it’s winning a deal, closing an investor or hiring high-calibre talent, having experience or at least reading up on persuasion/sales principles is worth the time investment.
16 Minute News by A16z - Tiktok and 'Seeing Like an Algorithm'
16 Minute News by A16z is a spinoff from the A16z podcast which covers tech headlines during the week in bite-sized episodes.
The speakers look at social media platforms through an interesting lens. The original social media platforms like Facebook and Instagram show you content based on who you follow and who your friends are. In other words, they use a social graph to understand your interests. This has downsides if your friends are car enthusiasts and you do not even hold a driving license. Also, these platforms give strong bias to creators who have already amassed large followings, making it very tough for new creators to attract a following.
In contrast, TikTok has pioneered a new social media model. They completely ignore your social graph and feed you content solely based on your interest graph. Depending on your interaction signals with each video, they understand your preference and feed you optimal content. TikTok is also set up to help new creators. Instead of distributing content based on your follower count, they test each video on a small batch of viewers. If the video performs well it gets shown to a larger batch, then a larger batch and so on. This means anyone with genuinely good content can go viral.
If you have ever used TikTok, you will realise they are onto something good given how addictive and entertaining the experience is. I prefer the TikTok model. It feeds me better content and is a fairer platform for new creators. It is also a bellwether of things to come. I think we will start seeing fairer and more interest graph focused social media platforms in different mediums. Watch out Zuckerburg.
Kennet Partner’s Investment Target
Kennet Partners is a Growth Equity investor with over 20 years of experience partnering with European and US SaaS companies. If you know any companies which fit our criteria, please reach out.
Investment size: $8m - $30m
Maturity: Over $3m in ARR
Growth: > 30%
Type: Bootstrapped and capital-efficient B2B SaaS businesses
Geography: Europe & US
Novice Investor #8 - Circular References, a New Social Media Model and Five Books
I'm really enjoying your excel tutorials, keep up the great work!