The End of the Funding Boom?

Here’s a post I recently put up on the Fishburners Facebook Group that I thought would be good to repost here.

Keen to hear people’s thoughts.


Some really interesting data out of the US.

“Seed stage investments fell 64 percent in dollars and 41 percent in deals with $125 million invested into 41 deals in the first quarter.”

I suspect that the Series A crunch is finally playing out on earlier stage investors and there will be limited money going forward for mediocre companies.

This will likely be compounded by the hammering that tech stocks are getting ATM, which may make many early stage investors think that the IPO window is about to close as an exit path for some time.

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I loved this piece in Wired I read over the weekend. Based on the book No Exit by Gideon Lewis-Kraus it highlights the harsh, harsh reality of startup life.

This is not me having a pessimistic view of the startup world. Nor is it some sort of schadenfreude. Completely the opposite. I’m delighting in some real context of the startup experience filtering through to the masses. Particularly the growing masses of startup founders in Australia.

Startup life is not easy. It’s hard. Like any path in life it’s particularly hard for those who neither have the aptitude nor the passion to do whatever it takes to be better. To do better.

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Global vs global

Conventional wisdom says that any startup worth its salt ought to be globally focused from day 1.

At a high level that makes sense as the Internet is a global marketing, payment and distribution machine that gives domestic entrepreneurs easy access, for the first time, to huge markets around the world including emerging markets, where much of the growth in internet users will come from, like China or India.

But what does that mean and how real is that opportunity?

We know that the US/UK/Canada etc. opportunity is a real global (little “g”) opportunity but what about the Global (big “G”)  opportunity that includes emerging markets.

2 examples from corporate giants, Facebook and Unilever, and their experiences in emerging markets are enlightening:

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I read a great Techrunch post just over a week ago.

Semil Shah highlights how the WhatsApp story challenges some of the Valley’s conventional wisdom e.g.:

  • Yahoo doesn’t have talent
  • The best founders are young
  • Mobile products should be beautiful/delightful
  • Personal branding is important
  • Don’t worry about making money. Grow big

Now, you can argue that there are many more cases supporting that specific set of conventional wisdoms, or that there are many more conventional wisdoms that weren’t challenged by the acquisition.

That’s not really the point. Continue reading

Role Model Investors

Hunter Walk wrote a post recently about his VC role models. It made me think who my investor role models would be.

I’ve written about Cargo Cults and Straw Planes, or how a lack of context in decision making and action can be a killer, in the past. The importance of context over and above most other things is something I believe deeply in. As such, while it would be easy for me, having come from an accelerator background to praise Paul Graham or Dave Cohen, I simply don’t have enough personally derived context to know if they truly are valid role models.

So what then?  Continue reading

The real value of Bitcoin (Hint: It’s not bitcoin)

There have been some awesome posts lately on the real value of Bitcoin (big B: the protocol) and it’s clear that bitcon (little b: the currency) is merely a use case perhaps best described as the killer app that proved the value of the protocol

I won’t go further but will leave it to 2 of my favourite VC bloggers to explain.

Please read the articles. The quotes below are just a small sample of what is discussed in them and TBH miss most of the value.


Fred Wilson:  Bitcoin – Getting Past Store Of Value and Currency (make sure you read the comments!)

As one can see from the current Bitcoin ecosystem map ( that there are almost no start-ups, which solely use the protocol without using the ‘coin’ or the ‘currency’ as a function. 2014 will be the first year to see some of these. (Source: Lightspeed India as quoted by Fred Wilson)

Marc Andreesen: Why Bitcoin Matters

Bitcoin is an Internet-wide distributed ledger. You buy into the ledger by purchasing one of a fixed number of slots, either with cash or by selling a product and service for Bitcoin. 




NSW Government and Startups

I had a particularly disappointing meeting with NSW Government last week.

I’ve been a strong supporter of Government’s role in the formation of a sustainable startup ecosystem where others have pushed much harder for a laissez faire approach. That has extended to dedicating time and resources to helping with the creation and promotion of government activities.

Implicit in my position, however, was an assumption that this engagement with the startup community was being led by people with an understanding of the needs of startups and the startup community more generally and that those people were working hard to address those needs within the confines of Government process and structure.

In the past this was the case. Now it’s the exception.

There are still some fantastic people trying to make a difference but the meeting I had last week was farcical. It’s now clear to me that NSW Government’s broad digital innovation agenda is to do as little as possible but to stay engaged enough to try and hang their hat on any possible successes.

I feel sorry for those good people inside NSW Government who really do believe deeply in the role that tech startups can can play in our state’s future and who are trying hard to gain the industry a higher priority. If I was in your position, I would have quit a long time ago.