Beyond "authenticity" and towards transcendence: what is your true inner self and what if you ran your company (and your life) that way?

What is your true inner self? Of the many viewpoints you’ve adopted, the thoughts you now have that aren’t originally yours, the mental models and patterns that were given to you by birth, by teachers or through circumstance, what below all that is really You? 

It’s easier to say what the true Self likely isn’t. It’s not the fear that makes us lethargic. Not the anger that makes us lash out. It isn’t the ego that makes us greedy. Those are layers we’ve built up to deal with a world we have been taught is a place of scarcity and violence. Of winners and losers. Of right and wrong. 

What are the masks you wear? What are roles that we just act out? What if you strip away the protective layers, the self-destructive patterns, the conditioning and reflexive reactions?

When you peel away at that onion of Self, what is there in the end? It begins, perhaps, with taking responsibility for ourselves in a world that just seems to compete on victimhood. Taking responsibility not just for our situation, but also for our perceptions. If psychedelics have taught me anything, it is that perception is a choice, and so we are responsible for how we view the world. Remember that next time you read an article that is trying to scare you, whether it is to entertain you or to rally you to a cause.

Taking responsibility for even our unconscious reactions (id), learning to practice circumspection and tolerance, breeds cooperation. This is the logical approach to surviving in a social species. You can’t do it alone. It is still egoic ambition, but rationally channeled.

As you gain self-mastery and the needs of the ego change - isn’t it insidious? - we develop compassion. Emotionally such empathy allows us to operate from a place of genuine concern or care. In service to others, rather than ourselves, or so it would have us believe. The motivation is too often that we want to be liked, accepted, perceived as better, in a position of power over others.  

As you approach authenticity in individuals, the perspectives of "responsibility-for" and "in-service-to" are reconciled by discovering a wider purpose to dedicate yourself and your organization to. This purpose suffuses the world with meaning. It creates opportunity everywhere. It inspires others. It is perhaps egoic in its need to achieve, but in its creativity is is an extension of the true “authentic” Self. 

So what lies at this very core, once we have shed all the layers of id and ego? There was a time we used to call this the soul, atman, spirit, anima… Liberated from a conditioned self, the mystic-sage is in essence Being, life that has consciousness. 

Authenticity is when this true essence of ourselves shines through the layers. The leaders we follow, the causes we support, the purpose we find it meaningful to dedicate our lives to - these all touch our true authentic selves, our “soul.” All wisdom traditions encourage the transcendence of the outer layers of “self” to live from the inner core of “Self.”

Authenticity, viewed in this way, isn’t a canvas of tastes, styles, or fashions. Authenticity isn’t “personality”, but how true people are to their real inner selves. It also isn’t relativistic - it is a firm absolute: there is, really, only one one true inner Self. It can find different expressions, can create in different ways. But the core is the same for everyone and, most importantly, it is a shared core.

The consequences of operating from this realization, both personally and as an organization, are radical. I hope to meet more startups and founders who do. 

May 2018

Be Here Now

I saw this photo on Reddit today. Part of my practice for the past few weeks has been to be more in the moment. Less in the story. More like her.

Tech will move into the background as the backlash against its ubiquity grows. I hope voice and AI will help. And I hope that we relearn to: be still (Ps 46:10). 

Sent from an iPhone on night shift at 9:48pm while my 2yo daughter is asleep on my tummy (Ps 8:2) 

The DNVB Cambrian Explosion: an unprecedented opportunity to build category-defining consumer companies for the 21st century

Over the last decade, technology has become ubiquitous in our lives. Internet connectivity has grown to over 90% in the US and Europe. There are now over 4 billion people connected to the internet globally; 3 billion use social media, 90% of them from their mobile device. As a species we are well on the way to being always on, always connected.

As a consequence, the consumer economy has been changing dramatically. Retail is being radically reorganized, from the paradigm of the 20th century, the automobile, to the paradigm of the 21st, the smartphone. Footfall at malls and big box stores in developed countries is down. Ecommerce continues to grow at a brisk 20% globally, now well above its ceiling penetration projections. Amazon is emerging as a possible monopolist, likely to take up to 10% of all retail sales. Selection, convenience, and price looks set to dominate all commodity categories.

And yet… consumer preferences seem to be fragmenting. Big is less and less better. Emerging tastes skew small, local, authentic, purpose-driven. Consumers used to trust big brands. Scale conferred huge advantages in pricing power, margins, access to supply chain, and ubiquity on the shelves of retailers. No longer. An increasingly economically, commercially, and environmentally literate and conscious younger consumer increasingly distrusts big brands. The 2008 financial crisis exacerbated feelings of being cheated and precipitated a flight towards authenticity and perceived value for money. In conjunction with the hyper-growth of natural, organic, and wellness (see LOHAS), consumers are flocking towards brands that either confer meaning or are fully utilitarian.

At the same time, the rise of ecommerce means shelf space is no longer a moat. Educated by Amazon et al., consumers are comfortable buying online and companies can sell directly over the internet. What’s more, over the last 20 years an ecommerce infrastructure has been built  that is able to perfectly serve even the smallest of players. Third party logistics providers (3PL) operate massive warehouses that offer full pick-and-pack services and integration with last mile delivery companies that can service consumers almost anywhere in the world.

The flip side of the logistics revolution is that supply chains have become increasingly accessible. Shenzhen as the belly button of our global materialist culture is open for business to the entire world. Increasing competition and decreasing prices are forcing original design manufacturers (ODMs, as opposed to OEMs), to accept smaller batch orders, albeit for prepayment. China has quietly morphed from a merely inexpensive to an extremely sophisticated, high-quality manufacturing hub. In response, European manufacturers focused on luxury, fast fashion, and core product innovation (for example, tech athleisure) are also accepting smaller clients. The decreased cost of doing business globally, along with well established container and air shipment routes, are making product sourcing accessible to any well-financed or well-networked startup.

The upshot? It used to take millions of dollars and several years to launch a brand. Now it takes weeks and $25,000. The result is a Cambrian explosion of new brands in nearly all consumer categories.

Our thesis is that there exists, certainly in the next five years and perhaps well into the next decade, an unprecedented opportunity to build new category-defining digitally-native, vertically-integrated brand (DNVB) companies that dominate specific verticals or niches within verticals.

If that's what you're building, come and talk to us. will find me.

After Authenticity by Toby Shorin: if you want to understand new brands, it's the most important essay you'll read this week

I am quite serious: go read it. And reflect on the rise and (proposed) fall of authenticity as a central driving force of culture. Because most of the authenticity we come across is as faux as the top-down mass media broadcasts that came before it. Worse: it pretended to be something different. 

What Shorin proposes, and what rings true to me, is that network effects of meaning are emerging. Under authenticity, scale decreases value. But for a connected consumer, this is clearly not true - we revel in the memes, the hashtags, the shared experiences. 

"We live in a time where brands are expected to not just reflect our values but act on them. Trust in business can no longer be based on visual signals of authenticity, only on proof of work."

Amen. You can follow Toby Shorin on Twitter here.  

Yanxuan, the "knock-off" marketplace, shows you why the luxury emperor is wearing no clothes

The wonderful Forerunner Ventures newsletter (new website, check it out) brought to my attention Yanxuan, an incredibly rapidly scaling marketplace by NetEase. Check out the front page (Google translated):

The concept is simple: source unbranded product from manufacturers that also produce for large brands. Use same or similar designs and much lower price points. Will they eventually get in trouble with the brands or lose some ODM manufacturers because of their claims? Possibly. But until then it feels like a scaled Chinese Everlane... and it also does $1.8 billion in revenue :)

Good life, less expensive indeed. Did you know that Prada already sources 20% of its range from China (WSJ paywall)? Chinese manufacturing isn't just cheap, it's also gotten incredibly high-quality. While Europe was mucking about with its Euro bs. 

If you are thinking about launching a Yanxuan type of business in Europe or the US, get in touch. will find me. 

Fail_Succeed: an interview exploring how to overcome failure

A few years ago, when Harry Stebbings got started doing The Twenty Minute VC, I turned him down for an interview because I'm generally not happy to make the story about me. I like putting founders front and center. But over the years I've learned amazing things from Harry's podcast. 

So when Dom Fendius, a fairly new podcaster, got in touch about an interview exploring how successful people overcome failure - the focus of his podcast Fail_Succeed, I hesitated again but ended up saying yes. 

I was very open with Dom and what we talked about makes me feel vulnerable. I hope some of you like it.

MindTheLeader by Jenny Jung, ex-VP People & Operations at EyeEm

The startups that successfully scale in our portfolio consistently invest in leadership development. It's probably the most impactful thing you can do as a CEO. 

The problem with most generic leadership training programs is that large companies are so different from startups. That's why I was very pleased to hear that my friend Jenny Jung has started MindTheLeader, a program run exclusively by coaches and professionals with operating experience in startups.

MindTheLeader is running its first program focused on HR & People Operations professionals, offering a six month leadership training group with peer coaching, guided introspective work, and case studies. This will be a serious, senior group that comes together not just for the program but is designed to be a lasting network of peers. 

Kick off is in Berlin on June 29. You can apply here before May 31 (I've heard they're almost full). We're recommending this to all our portfolio companies with more than 50 employees. 

Open Position: VP Product, Travelperk (Barcelona)

Following its Series B led by Felix Capital and Target Global, and with participation from Spark Capital and yours truly, Travelperk is starting to scale. The company is now looking to complement its wonderful Barcelona-based management team with a VP Product. We’ll happily relocate you from less sunny places around the world like the Bay Area or London. 

The low-down:
  • Massive opportunity: $1.25 trillion annual corporate travel market
  • Incredible growth: 1,200% last year (fastest growing SaaS company in Europe, #4 in the world)
  • “Hottest startup to watch” by Forbes and Wired
  • Deep domain expertise in a team led by and Skyscanner folks
  • 5 stars on Glassdoor
But perhaps most importantly, corporate travel is a segment with historically low product innovation. A few large incumbents that are far from digitally native. High frequency/repeat rate of customers, with high brand loyalty. A quasi-zero-sum market. The ability to massively improve the experience for hundreds of millions of people worldwide. And hence a unique opportunity to build a very large, category-defining company that changes things for the better. 

Go hear to read more about the opportunity to be Travelperk’s new VP Product. The entire team at Travelperk and I can’t wait to meet you. 

Starting with the Who (and the Why) rather than the What

A few years ago, Simon Sinek's "Start with Why" re-introduced the age-old idea of purpose. We're big fans of purpose at Sunstone, so much so that the dolphin emoji is part of my fave lists (it's a porpoise!). 

I believe everyone shares the same inner purpose, but that we translate that into different outer purposes. 

For us, starting with the Who and the Why means: we believe the founders and their purpose should be our primary reasons for backing the company. The What (the idea, the market, traction, IP, etc.) is secondary.

But when founders pitch us, we also listen to their Who: the customer. How deep is their customer insight? Do they understand them intuitively? What data do they look at? What hypotheses do they test?

If you start with your Who in a pitch with me, you're very often on a good trajectory to allowing me to appreciate the depth of the work you've done on the opportunity so far. I had a great conversation yesterday with an entrepreneur I initially believed had bad "founder/market fit." Turns out I was super wrong. He had a deep, intuitive understanding of his customer despite being a different gender as well as socio-demographically and ethnically fairly distinct from them. Certainly made me check my biases (again). 

The pleasure of focus

On February 5 this year I wrote about narrowing my focus to consumer investing. Within consumer, I focus on marketplaces (e.g. GetYourGuide), new platforms (e.g. Dubsmash), and direct-to-consumer (DTC) brands (e.g. Lillydoo).

Since that time, we've worked internally on sharpening that investment thesis, paying special attention to what kind of consumer propositions we want to back. I hope to share some of that work in the coming weeks. We have led one large investment in a digitally native vertical brand (DNVB), are in the process of closing another, and just yesterday made a third commitment. The latter two are both seed (€250K-€1M).

Technology's ascendance over the last decade has left everyone I know distracted. There's so much going on, so many things and people vying for your attention in different ways, that it's hard to gauge what's important. And the temptation in venture is to stay horizontal. After all, I used to say, if I wanted to be focused on a vertical I'd be a founder. 

I also used to believe that since we're mostly picking founders/teams, ideas were secondary. That's probably wrong - ideas are pretty crucial. And I do think a deep understanding of the idea/market makes me a much better partner. 

But the other thing that makes me a better partner, and one that I underestimated, is being able to say "sorry, that's not what I'm focused on" to most things that come across my desk. All the while being able to spend real time on the things that I am focused on. There's a lot of beauty in reducing the noise. 

So the benefits of focus are immense, and getting bigger. I'm about to invest in my first ever company that reached out cold to me. No network introduction, no warm lead. Just an email. That's a direct result of the blogging about DTC investing that I've been doing. So I'll try and keep doing that every day (in true OKR fashion, 70% complete is a win!).