Chris Dixon is one of my favorite people in tech and writes one of the few blogs I read religiously. If you don’t read it and you care about tech & entrepreneurship, you should.
He’s thoughtful about markets, investors, products and is always very well reasoned in his arguments. I’ve also found him to not be dogmatic either. He and I once took different sides of an debate about whether “VC signaling” in early-stage deals is a serious problem or not. We had a very sensible debate on the topic on VentureHacks sponsored by Nivi and including Naval Ravikant. If you haven’t checked that out you really should.
He is the CEO of Hunch, company that I believe is solving a very big problem that I have been telling entrepreneurs needs to be solved for the past 2 years. If he implements it well I think it will be a very big business.
Chris runs a popular web interview series on TechCrunch so is used to being the guy asking the questions. So it was fun to turn the cameras on him for 45 minutes for a special “NY edition of This Week in VC” and hearing his views. I think you’ll really enjoy this video, but as always I have summary notes for those with less time. Hopefully it will entice you to come back and watch the show at a later time!
These notes graciously provided by Adam Besvinick, who is a summer associate at ff ventures run by the affable John Frankel, who will also be on the show soon. If you like the quick summary notes, please check out Adam’s blog on tech, entrepreneurship & VC as a thank you.
1. We discussed Chris’ background as a philosophy major and how that has contributed to the way he works now. Such that during that time, Chris “learned how to learn.”
2. Chris then discussed his time as founder and CEO of SiteAdvisor, his first venture-backed startup. He explained how users at the time were encountering “social engineering threats” rather than “technical threats” and that his company took an “East Coast” approach to the problem as they built an automated system that rated websites. This method was in deference to a riskier, more crowd-sourced way (i.e. “West Coast”).
3. We then addressed competition in the context of SiteAdvisor and how it is important for journalists, customers, and the companies themselves.
4. This mention of journalists and how they frame stories led to a quick discussion of how it is important to build meaningful, real relationships with the press (i.e. “be the guy that provides them quotes”).
5. We then went back to talking about how to choose the space in which your startup is operating. When starting SiteAdvisor, Chris believed there was inherent value in the security space despite it not being “hot” or “sexy.” They agreed that it makes sense to “scratch your own itch,” or start a company that solves a problem that you have. I commented that this concept may be what has led to the market being overweight in music and restaurant/bar apps, as a lot of young founders have gravitated toward these spaces. I went on to say that the ideal position for a startup is at the intersection of an underserved market and something about which you can be passionate for 6 years or so.
6. Chris then discussed his current approach to angel investing in that he tries to do everything through Founder Collective (FC), unless it is out of the purview of the firm’s investment thesis, then he’ll do it on his own. The firm focuses on early stage companies in the Northeast but occasionally invests in California startups. FC has a policy of not doing follow-ons because they don’t want to signal, and they’d prefer to specialize in a particular stage. Prior to starting FC, he was co-investing with David Frankel and Eric Paley as individuals.
Regarding the NYC market, Chris says there are lots of companies being started, and a good amount are interesting, adding that he hopes that the trend is here to stay and not just run-off from Wall Street or overall frothiness of the tech market. He added that current Internet trends favor NYC, given the reliance on creativity, design, and the importance of consumers – all areas in which NYC excels. Lastly, he touched on the distrust of equity following the bubble in 2000, and that, particularly on the East Coast, people need to see good exits and good exits that reward employees.
7. After McAfee bought SiteAdvisor, Chris worked there for 15 months. Then he thought something dealing with artificial intelligence could be a cool space to operate in and that was the beginning of Hunch, a recommendation system that is a consumer-facing application and an API with commercial relationships. He believes that Hunch is great for e-commerce because it can help to remedy the “cold start problem,” as the product is great with taking a sparse amount of information and coming up with a targeted recommendation.
Chris feels that all sites will become more personalized through either behind-the-scenes cookie-ing (i.e. an opt-out method) or through an opt-in method like Hunch, which stores users’ taste profiles. He believes that users would rather control their personalization, adding that there is an active contributor community at Hunch.com to improve the API and keep it fresh. Chris went on to talk about how Hunch does a lot of correlation analysis to provide recommendations, such that “Likes” are actually more predictive than your friends. Lastly, he touched on a product that they are working on which can reorder Yelp reviews based on who is most relevant to you.
8. In closing, Chris said he believes in the future there will be a data services layer to the Internet, and he hopes that Hunch is the one predicting people’s preferences.