President Obama recently weighed in on the Federal Communications Commission’s (FCC) net neutrality proceedings, basically endorsing a government takeover of the internet. Given the president’s predilections for executive orders, the decision is not surprising. Imposing sweeping new regulations on the internet would continue the expansion of the administrative state that the president favors. But new regulations come at the price of reduced innovation and lower levels of capital investment, which is unfortunate, because neither the administration nor the FCC have yet to make the case that…

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We all know that the American energy revolution, led by the new technologies of hydraulic fracturing and horizontal drilling, has created a flood of new shale-oil and natural-gas production that has overwhelmed world markets and driven prices down by roughly 40 percent. End-of-week crude oil closed near $57 a barrel, and the national average gasoline price finished at $2.60.
No matter what the naysayers are trying to sell, the new energy reality is unambiguously good for the U.S. and global economies. There may be some dislocations among countries, sectors, or companies, but the overwhelming…

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I just read Wyatt Jenkins’ 10 A/B testing lessons I learned the hard way. Here’s number one:

1. It’s a hypothesis. Don’t fall in love. Most tests don’t turn out the way you plan them. There’s a roughly 70% chance that you are wrong. Try lots of ideas quickly and cheaply. Consider excluding difficult browsers like IE and excluding customer segments that introduce lots of edge cases. Do what it takes to get a test out fast.

In common with many people in the startup ecosystem we are big believers in keeping things lean. At it’s heart this means being clear about your assumptions and viewing the startup process as a learning journey. We even structure our due diligence process to tease out all the assumptions a startup is making and then help build a workplan to validate them.

What we’ve seen is that despite best intentions it’s incredibly easy to become fixed on a given strategic choice – e.g. which customer segment to go for, product features, company positioning, tone of voice, or elements of the visual identity. My colleague Dharmesh is fond of saying that it’s important to test every new idea within a couple of weeks because after that the brain somehow starts to see it as permanent and stops wanting to test it. I like to explain aversion to changing plans as an emotional version of the sunk cost fallacy – where the cost is the emotion we’ve invested in arriving at and supporting the idea.

It is easy to write a blog post saying we shouldn’t fall in love with our hypotheses, but in practice it’s difficult not to, constantly questioning everything is tiring, and when we pitch our ideas we want to stay consistent with them. As with many aspects of good execution the key is discipline, in focusing in on the most important assumptions and leaving the rest till later, and in staying with it even when you’d rather be doing something else. Having other people in your team to keep you honest also helps.

But even if it is hard, Jenkins is right, we shouldn’t fall in love with our hypotheses. Keeping our decision making rational massively increases our chances of success, and remember that our hypotheses are hypotheses is one way to do that.



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One significant factor where I find myself in total agreement with the monetarists over at the FOMC is that “reserves” are meaningless in every context but the setting of monetary policy. This is not uncontroversial terrain, but it should be. Banking is not what most people think of it and in the modern “shadow” (wholesale is a better word, as is “eurodollar standard” for the global end of it) system there are far more important settings. The liability created by the Federal Reserve, titled “reserves”, is only a byproduct of whatever it is the Fed is trying to influence through the Open…

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Representatives from the U.S. and 195 other countries are meeting in Lima, Peru for the 20th Conference of the Parties of the United Nations Framework Convention on Climate Change, hoping to lay the foundation for a major treaty to reduce global greenhouse gas emissions. But evidence shows this is the wrong approach to address climate change and negotiators would be better off focusing on market competition and innovation, which have proven able to reduce emissions intensity and promote economic growth.
The U.S. is seeking an agreement based on voluntary reductions in carbon dioxide emissions…

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2014 has been a great year for social media marketing. A number of our companies have enjoyed great success advertising on Facebook and they’re not alone. Facebook is forecasting Q4 revenues of $3.6-3.8bn, up 40-47% on the year ago quarter. Yet, paradoxically in some markets social network usage is starting to drop:

weekly social network access

As you can see from this chart it is in the US, China, and particularly the UK that consumers are turning away from social networks, and it’s a fair bet that the trend in these countries will be seen more widely next year.

The best guess is that users are shunning Facebook et al for messaging apps, which goes a long way to explaining Facebook’s $19 billion purchase of WhatsApp earlier this year.

This means that we can expect Facebook advertising to become more competitive next year. Buoyed by the success stories from 2014 bigger brands and bigger budgets will come to the platform whilst inventory remains the same or declines, at least in the UK or US. That means higher prices. We’ve seen the same trend play out on Google over the last few years where paid search in many categories is now too expensive for startups.

As this plays out entrepreneurs will be forced to look at newer platforms and one of the interesting things will be whether messaging apps emerge as an interesting advertising category.



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All too frequently of late, economists claim that simply putting more demand into the economy will drive growth, and that a reduction in demand is a scary thing that will reward us with stagnation. A recent article published in the Wall Street Journal titled “Baby Bust Threatens Growth” claimed that “if fewer women have children, there’s less buying of diapers, school supplies, and homes to accommodate growing families.” Fewer people means less demand, and economic decline if mainstream economists are to be believed.
But if we go back to Economics 101, economic growth is simply about making…

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Forward Partners is a venture firm, but the size of our startup team and the way we support our partner companies makes us very different from conventional venture capitalists. One of the exciting aspects of that for me personally is that if we are going to deliver on our mission of delivering amazing help to amazing startups we need to think of ourselves as a company that attracts and retains great people, rather than a partnership of investors.

Firstly, we offer a promise of inspiring work – the chance to have a hand in some amazing startup success stories, to touch the lives of founders and their employees in a very positive way, and to enjoy an unparalleled learning opportunity.

But secondly, it’s important that Forward Partners is a great place to work. To that end we’ve spent a lot of time over the last six months thinking about the sort of company we want this to be and the things we look for in ourselves and our colleagues. Last week my colleague David Norris published our Culture Deck (embedded below) and wrote a great post detailing our journey up to this point.

It’s been an interesting ride, and we are much stronger already for having been on it. Having a clear sense of who we are is immensely powerful. The journey doesn’t stop though. Culture doesn’t live in a deck or a set of values, it lives in the actions and decisions we take every day, and every week we ask ourselves if there are things we could do differently that would make us more like the company we want to be, as described in the deck below.

I’m writing all this partly for the benefit of prospective partners who can now get a better feel for who we are and what we are like to work with, and partly for entrepreneurs everywhere who want to go on a similar journey. At many startups codifying culture never makes the top of the priority list, I think largely because it’s hard to do well and because the benefits are intangible. Those benefits are real though, and having a great culture should be viewed as an execution challenge equivalent to having a great product or great sales and marketing. We started our process by identifying the archetypes we relate to (explorer and sage, represented by Indiana Jones and Yoda, hence the whip and the light sabre) and then went from there to our values. I think that’s a good process that other firms could copy, and which is explained in more detail in David’s post.



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Do regulators actually care about the fate of U.S. companies on the world stage? Recent experience indicates no.
Three years ago, the Federal Communications Commission (FCC) blocked AT&T’s proposed merger with T-Mobile. Instead of making a statement regarding the poor analysis by AT&T’s surely superb legal team, the FCC’s then-Chairman Julius Genachowski issued a one sentence statement that the merger did not meet the FCC’s standard for approval, injecting ambiguity and exemplifying enforcement on the part of the government when it came to big-stakes mergers. Adding insult to injury, AT&T was…

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This past Thursday, the Service Employees International Union (SEIU) organized a series of protests across the country demanding higher minimum wages. This is of course not a new push: President Obama backed a 40% increase in the federal minimum wage earlier this year. Senate Republicans successfully blocked the passage of a bill along those lines, thereby keeping the 500,000 jobs, the Congressional Budget Office estimated it would have cost, from being destroyed. With the elections over, and Republicans securely in control of both House and Senate, we can probably rest assured that the…

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Just as many failed to see the Crash of ‘29 as the byproduct of a fiscal policy and regulatory blunder - the Smoot-Hawley Tariff Act - and not a monetary event (the Federal Reserve providing too much liquidity), there exists similar confusion over the solution to reversing the Great Recession. The Great Recession was an economic contraction caused by a monetary policy blunder (the dollar de-linking from gold) which led to a distortion in market activity. As more and more capital funneled toward hedging the risks of inflation and deflation, as opposed to the production of goods and services,…

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UK-Unique-VCs-Q314

Here in the UK we’ve been working away building our startup ecosystem for 15-20 years (just 15 years for me) and it’s only recently that I’ve felt we are finally reaching critical mass. That’s a subjective assessment combining strength and depth of the angel and VC markets, number of quality investment opportunities, number of exits (including £1bn+ exits), strength of our startup hubs, and quality of support from advisors, lawyers, real estate agents and so on. I haven’t put a number on all these things but we’ve seen great progress on all fronts over the last couple of years.

This chart from CBInsights is another piece of encouraging data. There has been a lot of talk about new UK funds coming online in 2014, but we can see that the trend has been going for a couple of years already. The YTD 2014 data goes up to the end of Q3, and if we assume the same rate for Q4 which is traditionally a big quarter for venture, then we will end up with 170 unique investors this year.

Looking at where the investors come from is interesting too. The percentage from the UK has increased from 30% to 47% since 2010 – that’s an increasing percentage of an increasing number – which is a sign that our local VC industry is building some strength now. That’s great because strong local investors are a critical ingredient of a sustainable ecosystem.

This data shows that the breadth of the UK venture market has increased. Couple that with the fact that the volume and value of investment is also increasing and it’s fair to say that we are making great progress on both breadth and depth. Exciting times.



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As is well known now, Japan’s economy recent entered into a “recession” of the fraudulent Gross Domestic Product (GDP) kind. Importantly, the downturn proclaimed by the astrologists who populate economics, along with their confused Keynesian enablers in the press, isn’t really a recession.
As Internmarket Forecasting’s Richard Salsman has pointed out, the Japanese “recession” merely proves what is plainly obvious to the mildly sentient: governments can’t create economic growth as much as they can reschedule it. GDP is a Keynesian creation of the first order, and as it’s focused on…

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We all want to be happy, don’t we? Well, if you’re dissatisfied, frustrated or downright miserable, cheer up. There’s apparently a cure for you. Even better, it will materialize automatically. Just sit and wait; the very anticipation of its arrival might improve your spirits. The remedy: getting older.
It’s counterintuitive. In our mind’s eye, old age is to be endured as much as enjoyed. People fear declining health, growing dependence and increasing social isolation. But on average, they also count themselves happier. Consult public opinion surveys, and that’s what you find. Almost…

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The Affordable Care Act (ACA) was intended to increase access to quality and reliable healthcare, partly through the employer mandate. However, the ACA may inadvertently push small firms toward riskier activities by financing their own healthcare plans.
In the past, most large firms took the risk of financing their own healthcare programs, rather than buying traditional insurance. By contrast, self funding has historically been limited to 8% to 16% of small firms - defined as 1 to 100 full-time employees (FTEs).
In the future, these statistics may change dramatically because the ACA creates…

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