Ryan Sweeney's Ode to Qualtrics

Sometimes the best love stories are those that you only catch a glimpse of from afar.

I had the pleasure of meeting Ryan Smith, the co-founder and CEO of Qualtrics, in 2013 at Founders (thanks, Paddy!). And I met Ryan Sweeney briefly when I worked at Accel in 2012. Exceptional people.

Now Qualtrics has been acquired by SAP for $8 billion (21x LTM revs!) and it has defined a new category: experience management. 

But what struck the deepest chord in me is Sweeney's poetic post about the acquisition. It's unlike anything I've seen a VC write about an exit. A founder relationship with soul indeed. 

The full post is here on Accel's website


Defending the indefensible & the state of the media

Hussein Kanji is a prolific social media link poster. Next to his side gig as perhaps Europe's most underrated unicorn maker at seed stage with Hoxton Ventures (Deliveroo, Darktrace, Babylon), his main endeavour day in and day out is the curation of my Facebook feed. I have no idea how he does it - I'd usually wager some sort of combination of Zapier and Buffer, but perhaps he actually does read all of the stuff. In which case he's the most well-informed person I know. This post is not about him.

Sometimes something so egregious slips through the cracks of my Facebook newsfeed that it bears mentioning. This post is about that. It is on the border of not wanting to comment on politics (I did last week and it went poorly). 

The once venerable Newsweek has a piece on the Acting AG of the US, Matthew Whitaker, with the salacious title ACTING ATTORNEY GENERAL MATTHEW WHITAKER ONCE SAID JEWS, MUSLIMS AND ATHEISTS SHOULD NOT BE FEDERAL JUDGES. Yes, all caps. 

Wow, I think, and take the clickbait. The article, written by Nicole Goodkind, starts off promising:

New acting Attorney General Matthew Whitaker said in 2014 that judges without a New Testament “biblical view of justice,” should not serve on the federal bench and suggested that he would block the appointment of non-Christian judges if given the chance.

While Whitaker singled out atheists in particular as being unfit to serve, his comments also extended to Jewish and Muslim Americans.

Woah, I think. Really? That a man of such blatant bias would make it so far in the Justice Department is unfathomable. But these are strange times, aren't they? I read on.

Whittaker's two competitors [ed.: in the Republican primary for Iowa Senator], Sam Clovis and Joni Ernst, said that they would use faith-based criteria and make sure they acknowledged “natural law.”

Natural law is the belief that legal rights and systems of morals were given to humans by God and were not derived from the rules of society. The concept is often used in religious communities to deem certain acts immoral and “unnatural” like the use of contraception or same-sex relationships.

Oof. Dear Newsweek, that's not actually the definition of "natural law" at all. I mean, Wikipedia knows more about it than you. The point of natural law is that it derives from, well, nature. It does not comment per se on the metaphysics of that nature, if any. And atheist derivations of ethics from natural law abound, from Plato and Aristoteles onwards. Jewish and Islamic and Catholic philosophies of natural law exist. 

And - dare we say it - much of common law jurisprudence is founded on natural law. The Declaration of Independence bases its validity, the entitlement of the "separate and equal station", on the "Laws of Nature" (and to be fair, "of Nature's God").

Take "Thou Shalt Not Kill." A common view in theology is that this is a natural law, God-given perhaps not so much via a miraculous event involving stone tablets but because it was discovered as a central natural rule without which humans could not live together. Every fiber in our being knows it's wrong to kill another person. If we permit it to happen, "society" fractures (also, you get Horcruxes). That is the meaning of "natural law."

Reading on, we learn about Matthew Whitaker's criteria for selecting judges to the federal bench:

"What I’d like to see is things like their worldview.… Are they people of faith? Do they have a biblical view of justice? I think that is very important.”

The moderator interrupted Whitaker and asked “Levitical or New Testament?” which is an indirect way of asking whether people of the Jewish faith should be banned from serving as federal judges.

“I’m a New Testament,” responded Whitaker to laughter. “And what I know is as long as they have that [New Testament] worldview that they’ll be a good judge.”

One wishes Newsweek had expanded that first elipsis. We would know more about what Whitaker actually said. But by substituting [New Testament] in brackets, the journalist Nicole Goodkind is putting words into his mouth and then determines that those words are anti-semitic. 

As an aside: the interjection of "Levitican or New Testament" is a reference to the (wrong-headed) view that the God of the Old Testament is a vengeful deity and the God of the New Testament is forgiving and loving. It's a frequent Christian trope, hence the laughter. 

But back to the main event. Yes, Whitaker seems to have said that he wants to understand a potential judge's worldview. Clearly a person of faith is something he likes because he believes they understand the concept of natural law. But his framing it as "person of faith" sounds quite inclusive of other religions, to me at least.

But then he drops the big one - do they have a "biblical view of justice"? Obviously that's something that plays quite well with the conservative base in how it sounds (remember, these are Republican primaries). But Newsweek uses it to suggest that this excludes in Matthew Whitaker's view anyone from serving as a federal judge who is not Christian. 

Let's take a step back. First of all, nowhere does he say that people without a biblical view of justice won't make good judges - it seems to him a shortcut to determine a worldview that would make for a good judge. But more importantly, the journalist is once again confused about what is actual a technical term.

"Biblical justice" is a well-defined concept and has a rich tradition, something that Nicole Goodkind apparently does not realize. It starts with the Judaic concept of mishpat, to treat people equitably regardless of social status, class, race, or gender. Biblical justice is in fact directly opposed to the bias that Newsweek's headline wants to attribute to Whitaker.

But biblical justice goes further by extending mishpat to tzadeqah, perhaps best translated as "righteousness." This means a justice not limited to righting wrongs, but extended to preventative and restorative acts like generosity and charity. 

The reference to the New Testament means Whitaker personally believes that a charitable, generous, equitable justice should apply especially to those who have broken laws. But a biblical view of justice does not require the belief in God. And it certainly does not require a person to be Christian.

Oh wow, someone who wants unbiased judges that are charitable? Get out the pitchforks! 

This article is everything that is wrong with the media today. It oversimplifies. It tries to identify prejudice where there is none. It demonizes a possibly good person. It does not do its research. It simply assumes that someone is not "on the right team" and declares them fair game. 

And so I find myself defending the indefensible. I do not know whether Matthew Whitaker is a good person or the right pick for AG. But for the purposes above, it does not matter, because he did not actually say what Newsweek heard or pretended to hear. 

I do care when media tries to fan unnecessary racial and religious and political divides. Newsweek would do well to practice a bit of biblical justice. Whether it calls it that or, you know, "humanist." Because they are exactly the same damn thing.

Ex Machina (2015)

I had never watched Ex Machina, a 2015 film about the development of AGI, so I did last night. 

It's a good movie. Visually polished, engaging, sparse but well executed. I was a bit disappointed it co-mingled AGI with robotics so quickly, and except for the Turing test reference there wasn't any depth to the science behind the story. But that's expecting too much of a cinema feature.

What the film did do well was raise questions of power, creation, human frailty, gender, and manipulation. And the score was great. I think I'll watch more Alex Garland going forward. 

Arts & Letters Daily

For a very long time, Arts & Letters Daily (aldaily.com) was my favorite website. I think I discovered it around 2000, two years after it had launched.

It was founded and edited by Dennis Dutton, a philosopher at Christchurch (NZ) and one of the great thinkers on aesthetics. 

Its genius is simplicity: three links a day - an article, a book review, and an essay, unceasingly with a great short caption. And then a short Nota Bene section, with some current news or events, and a long list of links to other sites which, for a while, was the best blog roll out there. 

When Dutton passed away in 2010, the quality of the posts declined and it felt like ALDaily was no longer at the forefront of the more interesting debates of our time: Pinker, Hitchens, Chomsky, Singer, et al.

Over the past few weeks I feel the quality has noticeably improved, though nothing has changed (the editor, Evan Goldstein, has been in the post since 2011). 

Nevertheless, it is worth a visit especially on a weekend.

Much love,

Max

An introduction to our framework for assessing consumer companies

My colleague Yacine has a short post on Medium about our current framework for assessing consumer internet companies

It's based on Clayton Christensen's 2016 thesis of consumers using products to get a certain job done

While that's a great starting point, we added to this four major functional differentiators: price, time, quality, and user experience. And six emotional aspirations: the desire to be special, to improve, to escape, to belong, to be safe, and to be free. 

In conjunction, these dimensions of a consumer product represent the consumer surplus derived from purchasing and using it: the delta between its cost to the consumer (not just the price!) and its benefits (not just the functional ones!). 

We'd love to know what you think about our framework. It's definitely work-in-progress. 

Please read the post and discuss with Yacine and me on Twitter. 




Ana Luisa - Jewelry for Womankind

Hot on the heels of a record female congress, I wanted to talk about a seed investment we quietly made earlier this year. It's the first investment I've ever led that's the result of a cold inbound email in response to a blog post. In this case a post about our digitally-native vertical brand (DNVB) thesis.

Ana Luisa makes direct-to-consumer jewelry that is purposefully inclusive, empowering, and accessible. 

From the same designers that previously designed fashion jewelry for brands like Kenzo, Tory Burch, Alexander Wang, and Ralph Lauren, Ana Luisa uses the same materials, manufacturing processes and suppliers as the large brands. The only difference is that they cut the brand and retail mark-up and, yes, "pass those savings on to you" :)  

High-quality pieces like these mini 14K solid gold hoop earrings start at just $65. 

I'm a sucker for value, but even more so for brands that are starting to have equitable, conversational relationships with their customers. And that are using their business to promote a particular view of the world. Ana Luisa encapsulates this in their tagline: jewelry for womankind.

From their commitment to responsible production, exceptional craftsmanship, commitment to quality, and transparent pricing (read more here), they're on to something big. Did you know that high-fashion jewelry is marked up 10-15x on production cost?

But even more than that I'm looking forward to the customer stories, the non-profit partnerships helping a diverse set of incredible women, and more product that explores the many facets of femininity and its modern interpretations.

From a venture perspective, backing a narrow vertical brand in a single market can be a tough proposition. What really excited us here was that customers are buying for themselves (most jewelry is gifting), they're returning in record numbers after a short period of time, and are telling their friends about the brand. Retention and referral are the key hallmarks of building a passionate community of customers that can be the basis for a very large company.

It doesn't hurt that jewelry, while intensely competitive, is massive global market. Fashion jewelry alone is $9.4 billion, while adding bridge jewelry makes it $20 billion in annual value. And it is growing at >10% per annum. 

So check Ana Luisa out - the discount code WELCOME15 gives you 15% off orders over $80 and the company ships globally. 

P.S. This is our first co-investment with Eutopia, the former consumer brand investment team of Otium. Really thrilled to be partnering with them. 
 

Decentralized software to power uncensorable free media

If you haven't, A Declaration of the Independence of Cyberspace by John Perry Barlow in 1996 is one of those early internet documents that you should read. 

From today's vantage point, JPB's words almost seem naive. The internet is increasingly regulated, monitored, censored, adulterated. Commentary of the effects of internet media on the "real" world is nearly always some lament about its pernicious influence.

I believe social media will eventually reveal itself as an overwhelmingly beneficial invention. But for that to happen, it must free itself from the shackles of political and commercial control. 

Attempts like Gab replace a flawed centralized network with another. Tools like Diaspora turned out to be incredibly difficult to use. The jury is out on Mastodon (I have not used it extensively yet). 

A new network should take some cues from WhatsApp. End-to-end encryption. Mobile first. Low, low bandwidth. No ads, with an option to subscribe. 

And then it should be open source, do all its computing at the edges, and devolve all power to the end user. 

There are some promising beginnings out there, things like Mind, Sola, Memo, Steemit. I'm going to spend time using all of them over the next few weeks and report back. If you have one that you like in particular, let me know.

Why are contacts still such a mess

I’m not a particularly organized person. I’m organized where it matters and the rest sort of… decays slowly. Especially physical documents are a mess. I forgot who said it, but someone called it the “first unused surface method of filing.”

The same is true for my computer file systems. Squeaky clean where it matters, total mess where it doesn’t. 

I’m in awe of those people who have everything squared away in an orderly folder structure. I’ve always relied on search. When Spotlight didn’t cut it, grep was my friend. It has saved my butt a number of times. 

One area of my life that reflects this organizational pattern is my address book. It’s perfect for the 100 or so people in my life that I actually reach out to. The rest are emails, randomly scanned business cards, stuff entered by an EA ten years ago, sync’d Facebook contacts, LinkedIn imports, what have you. Over 10,000 contacts.

Back when we were doing Qwerly (now a part of LinkedIn), we thought a lot about contacts sync as a v2. We ended up doing a B2B play that, if we were still doing it, would look a bit like FullContact in Colorado (they’re the ones that bought Mattermark). 

It’s crazy to me that 7 years later, contacts isn’t a solved consumer software problem. Everyone is running around with these partial, out-of-date, redundant databases in their pocket. And they’re the original social network.

vCard is a horrible format for a whole number of reasons. Contacts sync doesn’t work well (ever had the duplicate problems?). Facebook and others don’t really seem to sync down to device well for me (maybe it’s a permissioning issue); everyone is more interested in sucking up contacts and doing God-knows-what on the backend. 

When I think of building contacts consumer software, I think it should be fully decentralized. Everyone should have their own record and permission who gets to see what (name, email, phone number, postal address in increasing level of sensitivity). An app sounds like the right way to do that. 

Then scale it via OAuth to other apps: if you’re in contact with a person in Gmail, call them on the phone, meet them in person as tracked by calendar, prompt a data access permission flow. 

And don’t even think about replacing the address book. Just build it alongside it, without touching the old world. 

The nice thing about contacts, of course, is that you can grow virally (carefully, without spamming the world). 

For some reason every company we have ever seen try to build something like this has failed. I’m not sure why. 

If you are thinking about taking a crack at the problem, talk to the folks who did Bump, Brewster, Plaxo, who are now doing FullContact. I’m sure there’s a wealth of knowledge there.

And then if you are still crazy enough to try this, come talk to me. 

We're hiring an intern in our Paris office

A few months ago our colleague Yacine Ghalim moved to Paris to open a new Sunstone office there.

We love working remotely in venture as it's a great way to get full coverage of the European market. But the volume can be overwhelming and so Yacine is looking to add to the team in Paris by hiring an intern for 6-12 months. 

Clear track to a full-time analyst position with us, an apprenticeship model of development, and a chance to look at a high volume of French and European Series Seed and A stage companies. We're working out of Station F in the heart of the Paris ecosystem. 

You can read more here and apply via this Typeform

Reality as a series of connected graphs - Neo4j, the graph database, raises $80 million

Emil Eifrem and his team at Neo4j, the world's leading graph database company, today announced a Series E of $80 million, co-led by One Peak Partners and Morgan Stanley. You can read Emil's blog post here.  

Sunstone first invested in Emil and his company in 2009 in a $2.5 million seed round and has since supported the company in every financing, totaling $160 million in overall funds raised. 

We have believed in Emil's mission for a long time. Graphs are often a better way of modeling reality and certainly computationally cheaper when it comes to e.g. deeper level join operations. This advantage grows significantly with the complexity of queries. 

But graphs are more important than that. The relationships between people and between people and things are often a much better predictor of behavior than a lot of data points about a single object. 

This is not just true when you want to manipulate elections (ha!), but when you want to make purchasing recommendations, prevent fraud, analyze complicated networks in terrorist financing or money laundering, or simply power social networking applications.

For instance, Neo4j was instrumental in analyzing the Panama Papers, but it is also used by Walmart to drive personal recommendations or by eBay to speed ecommerce delivery routing

We're thrilled that Neo4j now has the funds to help power applications that go well beyond its original vision. Graph databases are a key component of predictive computing and we're excited for what the company will announce next.