New year, new blog

Well it has taken me about two years to start writing again (thanks, pandemic stress syndrome!). The new blog is at and you can sign up for email delivery there, if you still want it. 

The main reason to switch platforms is that I wanted to truly own my own writing and not be dependent on a social platform (Medium) or email service (Substack). 

I will be removing this blog shortly and redirecting the URL to the new one. 

Thanks for being along for the ride. I appreciate you :) 

What's next for this blog

I have left much of social media and am also no longer posting here. Instead, I am running a small personal email list to which I post the occasional essay or thought. You can join here if you like. 

I am also working on a site that feels to me to be a better fit for the strange times we are living through - likely a collection of longer essays and investment theses. This will replace the blog as my public place online.

Thanks for visiting here and for your support in the last few years. Stay safe!


The Heartcore Capital Fellowship

We announced a new investment program today, the Heartcore Capital Fellowship (see Steve O'Hear on Techcrunch here). It's pre-pre-seed financing for consumer tech founders in "lockdown." 

The offer is €100,000 per founder for a 7% total equity stake per company. The investment instrument is a convertible note. The company does not need to be founded yet, nor is an idea required to apply (we have many). The only restriction is that the focus be consumer technology (B2C/B2B2C) and that the base of operations be Europe. 

The goal of Fellowship financing is to build a prototype, with a view to raising a seed round when lockdowns are lifted and travel restrictions eased.

We don't yet know what the "new normal" will look like. But we do know that many great potential founders are currently stuck at home. And we know that some truly exceptional people have lost their jobs and are wondering what's next. 

Our desire is two-fold: we want to offer these folks the chance to get going right now, without needing to put their entrepreneurial career on hold. And we want stay true to our mission in the face of adversity: to help build global, category-defining consumer technology brands from Europe. 

For all their awfulness in human suffering, crises like the pandemic are opportunities for growth (Heartcore foundational principle #16). The current period is a chance to re-examine our life, including our life's work. Great businesses have always been founded in uncertain times. We are keen to get to work with you. 

You can apply here: It's a simple Typeform followed by conversations on Zoom with the Heartcore investment team. 

The big one

Well, it's here. The big one. The one we've all been waiting for.

And it looks different than we thought. We also knew that that was likely. So let's not act surprised.

When the markets came tumbling down in 2000, I was an intern at a hedge fund in NYC. It was an exciting time, not least because it was a commodities and cyclical equities focused firm that felt like it was in the process of being proved right. 

When the twin towers fell, I was sitting in a finance lecture at university. We asked the professor to switch to CNN (back when CNN was watchable). A friend of mine - now Managing Director at a major investment bank in Europe - whispered to me: "this means war." I thought it was prescient, and it was, and there are still lives being lost in Afghanistan (and for what?).

In 2008 I had just been in venture capital for a year in London. My friends were out of work and their world came tumbling down. But we had a fresh fund and just kept going, and honestly early-stage venture felt a very insulated place. Some growth financings fell through, some M&A deals seized up, but that was about it. 

2000 and 2008 felt like corrections, like something within the system had gone awry and was righting itself. 

9/11 on the other hand felt like a paradigm change - like the world had changed in a key way and it was no longer clear whether our existing mental models could last.

Today feels more like 9/11. It's a shock that's external to the system but that strikes at its very core. It changes some assumptions that everyone was operating on. And what's worse is that there is no quick resolution to that uncertainty - no enemy to strike back against, no cause to rally behind, no quick fix to assuage emotions. 

I wish I were an optimist, but I'm not, and that's probably why I'm a person of faith. I like to try and control the things I can. To do them to the best of my abilities. But I have also learned over time to let go of the stuff that I can't control. And I often get lucky and I'm grateful for that.

If you want my personal prediction, things will get very ugly. Our healthcare system will be overwhelmed. Quarantines will be draconian. Too many people will die. The most disadvantaged will suffer disproportionately. And those of us who have the means available should help - with their time and their treasure.

COVID-19 will reveal a world without slack, one that's too interdependent, and too optimized for efficiency. 

This is a time to keep a level head while others panic. To share when others have little. To be the best person you can be. 

Stay thoughtful, industrious, courteous, honest, loyal, and brave. Love your neighbor. Control what you can, and let go of what you can't.

COVID19 and the 2020 travel industry

There's a lot of speculation about how serious the coronavirus pandemic will be. But it's already clear that the risk of infection as portrayed in the media is eviscerating the travel industry.

Travel is by most measures the largest market globally, a testament to human curiosity and thirst for adventure and experiences. In 2019 Skift estimates there were 1.3 billion departures with an estimated $2.9 trillion total spend - the largest travel and tourism year on record. 

Travel is super-correlated with the business cycle. It’s what consumers spend money on when there’s discretionary income to spare, but it’s also the first big ticket item that gets cut in a downturn. Travel is also highly susceptible to external shocks: war, political instability, trade disputes, terrorism, and disease.

The industry was generally projecting around 3% growth this year. That doesn't sound huge, but it's about 40 million additional departures, or about $60 billion in spend. The ongoing spread of COVID19 - as small as it currently is relative to influenza - means not only will there not be growth, but we're likely facing a year unlike any other that the industry has faced before.

About 2/3 of the industry is consumer, and 1/3 is corporate. Corporate is already projected to be down as much as 40% in a recent poll conducted by GBTA (slide deck in PDF form is here, Skift coverage is here). I haven't seen any consumer numbers, but my guess would be that overseas and air travel will be significantly down. 

Of course it all depends on which regions will be most affected. In that view, we have been very unlucky. China is the largest source market, and Italy is one of the largest destination markets in the world. Just taking those out of the market means travel will be down >15% this year (chart again courtesy of Skift in their Global Travel Economy Outlook 2020 - subscribe here):

There are too many headlines to list, but Saudi Arabia is closing the hajj, Booking Holdings put out guidance about "significant and negative" impact, Marriott put out a warning, and pretty much every airline is revising its forecasts. Depending on how long the pandemic lasts, we could see travel overall down by a third or more this year.

In an industry that is largely predicated on managing capacity well, and with many of the largest players in air and accommodation operating with a significant fixed cost base, it will be interesting to see what happens. I expect some government intervention to prop up weaker airlines in an attempt to retain infrastructure post recovery. Hotel chains will surely put a damper on the incredibly aggressive expansion plans for new rooms.

OTAs operate without the large fixed cost block, so while they will suffer because overall volume is down, their profitability may not suffer as much. And they will be the intermediary that is able to direct travelers to the best prices. Desperate operators will start pricing on margin, so we may see some amazing deals later this year (if any of us still feel up for traveling at that point). 

It will also be fascinating to see whether the alternative accommodation players like Sonder, Lyric et al. can survive this. In their fundraising decks, they've always made the point that they can price below hotels in a downturn because their required RevPAR is so much lower. This is likely to be tested hard this year.

I have no idea what happens to Airbnb. It may be disproportionately affected because hotels are perceived as "cleaner." It may suffer drops in supply as hosts don't want strangers to stay with them. Or it may be the smart alternative for people who want to avoid crowds. I wouldn't be surprised if the Airbnb IPO is put on hold.

That's all I've got for now. Remember that for startups, these crises are always opportunities. Opportunities to hunker down and learn, opportunities to improve operating quality and efficiencies, opportunities to quickly iterate towards what travelers want in this brave new world of COVID19. I just hope they don't need to raise money in the next six months.

Copyrighting melodies - AllTheMusic

I'm a fairly big fan of capitalism. Money as a tool for the exchange of value is one of humanity's greatest civilizing inventions after language. 

Greed may be evil. But greed is much older than money and has less to do with it than you think. You can hoard many things - power, adulation, dependence. Money just happens to be a very good way of keeping track of a specific value.

I'm less of a fan of patents and copyright. We can recognize the importance of creativity and invention in many different ways. Bestowing an artificial, government-granted monopoly is only one way to let creators profit from them. In general patents and copyright have been lobbied to be much stronger monopolies than they need to be to encourage new work.

So I was quite happy to hear that some folks had algorithmically generated a metric ton of 610GB of MIDI melodies and made them freely available. Their work is downloadable on their site AllTheMusic and you can see it in detail on Github/allthemusic

I don't know the legal intricacies here. It's not prior art (that's patents) and it's not public domain (that would be if a previous copyright expired). There may not even be "an author." But it may well be used as proof that melodies are just math, which could prevent the sort of frivolous "inspired by" lawsuits that we've seen in the recent past

It's a smart thing to do and I hope it gets tested in court soon.

Working under or above the API - the demand side of the new economy revisited

One thing we didn't talk about in Heartcore Capital's consumer technology report is the changing nature of the demand side of the consumer economy. 

Heartcore's macro thesis is that the internet-bestowed power of the end user is reshaping all value chains. It's why we're seeing niche use cases support small but cool brands (see Shopify). And why broad use cases are resulting in dominant incumbents of awe-inducing scale, like Amazon. The changed transaction costs coupled with end user empowerment is enabling both.

There are some indicators that we are in the middle stages of a transition to a different kind of middle class wealth-building. Ribbonfarm in their premium mediocre post called it "the terrifying structural boundary of our times"... either you tell the robots what to do, or they tell you what to do." 

In an older Forbes article Anthony Wing Kosner (@akosner) calls this transition line "above the API versus below the API." Either you design the Uber API, or it's the Uber API that you work for. 

As we approach increasing automation, the surplus that accrues to those above the API would grow exponentially, while those below the API will be pushed out of work. That's the core argument of UBI. 

Real life, and the real economy, turns out to be more complicated. As the last few years have shown, we are quite far from automation in key sectors - autonomous driving is further away than we thought (closer in trucking than taxi). Many areas we thought might be commoditizable - cleaning, maintenance and repairs, beauty/wellness - turn out to be unique services with a high degree of personalization and dependent on the actual service provider. A lot of the Uber for X approaches have failed. I'm happy to get a lead for most of these from Yelp, but I'm also keen to establish a longer term relationship with them when I've found an acceptable one. 

On the other hand, highly professional services that were thought to be very protected (legal advice, financial advice, perhaps venture capital) might be more automizable in more use cases than assumed. Transaction contracts can be standardized. Robo-advisors do a decent job for a certain class of investor. 

This doesn't solve for inequality of job outcomes, of course. The only things that do that are (1) redistribution (make people give other people their money), like UBI, and (2) restricting labor supply (primarily through stopping unskilled immigration). Those seem to be the battle lines of our politics as well.

Of course, there's a third path: more entrepreneurship. The amount of people that I'm seeing with small companies that are making a good living in online niches is significant. Veils by Lily is a business that sells Catholic women head scarves for church and really driven by trad Catholic Twitter. Talongrips makes stickers that let you grip your firearm better and they got their start on/with YouTube's shooting community. Those are some nichey niches indeed. Neither would exist at their current scale without the internet. 

This, of course, along with the hopefuls that move to SF and NYC and Berlin and London in order to get some equity in tech startups is the "bootstrapping logic" that powers our internet-enabled economy. They are the new paths into the middle class. 

It's a more precarious route than the previous college-to-corporate path, and it might well require some Uber-driving along the way. But I'm wondering whether automation won't actually enable larger swathes of the population to become unique service providers and thus entrepreneurs in their own way, rather than "slaves to the API." And I'm also wondering whether the ubiquity of being able to easily switch into API-based work won't actually provide a solid bottom for those that fall out of traditional employment. 

From a consumer economy perspective, all three new "classes" of consumers are interesting - the very rich lords of the cloud, the middle-class precariat that's working in tech or with tech to try and succeed, and those that are job-takers in an economy that requires them to think more like franchise-owners than employees. 

Brands with love and empathy at their core should exist for all three. I'd like to think that Heartcore should back some of them. 

Heartcore's first annual report: Consumer Technology Trends 2020

After a lengthy blogging hiatus following our rebrand as Heartcore Capital, I'm thrilled to be able to share our first annual Consumer Technology Trends report with you.

To whet your appetite, we dove into relevant spend categories for the European consumer - retail, food, travel, real estate, finance & insurance, health, media & entertainment, as well as mobility & energy. And each partner contributed the trends they saw play out over 2019 and how those might continue in 2020. 

We hope it's a must-read for each founder and investor in these verticals. 

Following the verticals, we posit some key horizontal trends for the current year. Top of the list is sustainability, followed by rentals that broaden access to previously owned assets, and then the general malaise of uncertainty and confusion that consumers feel and what that might mean for operators and investors.

We'd love your feedback, either here in the comments or on the various social platforms. Thanks for reading and do please pass it on if you like it. 

Much love,


Two things destroy companies: mediocrity, and making it all about yourself (#12)

I really enjoyed the TV show Halt & Catch Fire. I've watched it twice over the last few years. If you work in technology and you watch TV, I recommend it.

The early story is based on the founding of Compaq Computers, but it segues into shareware, the web, online communities, the search engine wars, venture capital, and so much more. It's a great way to feel how far this industry has come in the last forty years.

One of my favorite quotes from the show comes from its early protagonist, Joe MacMillan:

"Two things destroy companies: mediocrity, and making it all about yourself."

There's a lot of ways mediocrity can creep into a startup over time. But the biggest problem is when, from the beginning, the bar on decisions and outcomes isn't very high. This is always a problem of leadership: recognizing quality in product and people is a key trait of founders we like to back. 

Average just doesn't cut it if you want to build a large business. Your product needs to be extraordinary (in some way). And the way to build an above-average product is to hire great people. Execution advantage is a key differentiator we look for in companies.

But it's the second quote that really rings true based on my last decade in venture. Great founders are often perceived as having huge egos. But there's nothing that destroys a company as quickly as a selfish, power-hungry, greedy, or prideful founder.

The best founders we've worked with are natural servant leaders. They put the company above themselves, their people above the company, and the company in service of its mission (rather than just chasing cash). 

These are the people we seek to back, and this is why we've made this quote one of the foundational principles of Heartcore Capital


Read one for more on our principles:

#1 No fear, no greed 
#2 We're the coach, not the athlete 
#3 It is only with the heart that one can see rightly
#4 Energy attracts like energy
#5 “Success is not final, failure is not fatal: it is the courage to continue that counts.
#6 "Love people, not things. Use things, not people.
#7 Ask, don't tell.
#8 "Be gentle and you can be bold; be frugal and you can be generous; avoid putting yourself before others and you can become a leader among men."
#9 The best way to teach is to listen. The best way to lead is to be.
#10 “Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”
#11 "Great product wins"

Great product wins (#11)

If you haven't seen it, check out Ben Evan's presentation The End of the Beginning. When we pivoted Heartcore Capital to "Europe's consumer-only VC", we heard quite a bit of "but isn't consumer dead?" 

Ben nicely makes the point that given the ubiquity of connected devices and high-bandwidth networks, we're really only just getting started.

The internet significantly lowers transaction costs, particulary those needed to search for and purchase products and services. We have much greater visibility today on what exists for a given "job to be done", whether it's eating, traveling, playing, working, or dating. 

Combined with low friction to trial and adoption - all you need is a credit card and sometimes not even that - older and much more oligopolistic consumer spend categories like housing or healthcare are poised to change dramatically.  

All of this is good news for consumers. When competitors and substitutes are "only a click away", competitive pressure increases. And hence product innovation cycles are more rapid, service gets better, prices drop, and consumer surplus overall increases. 

The internet has put the "end user" in the driving seat of purchase decisions. No longer are we beholden to what an existing supply chain has decided to put in front of us. And hence value chains across the economy are being rethought from the point of view of this new, powerful consumer. 

In this new world, great product - as in, a great offering including price and distribution - wins. 

In the words of Bill Campbell, the Trillion Dollar Coach:

"Great product wins. Great product is the result of great execution. Great execution is the result of great teams."

At Heartcore we care a great deal about product. We think product is how small companies beat big companies, how they build brand, how they create the momentum needed to first survive and then thrive. 

Great product doesn't "just happen." And while we believe a visionary founder is a necessary condition, we don't for a second believe that this one person is sufficient. Great product is the outcome of processes, sometimes well and often less well defined, of people coming together with an overarching goal of not compromising the end consumer experience. 

This quality of execution necessitates great teams. Such teams are constituted of individuals that are both technically proficient at their respective domains (design, coding, product management, marketing) but are able to internalize the overall vision and then collaborate to make it a reality.

If you've ever worked with people who are very, very good at what they do (rare!), you realize that incredibly talented people that also work well in a group setting are even more rare. Thankfully, very good people like working with other very good people. Unfortunately, very good people often don't work well with fairly average people.

This takes management. At a startup, you can be much less tolerant to the genius-but-a*hole personality than a large company like Google. So your job as founder is recruiting the genius-but-also-pleasant personalities. One tip: some great people mellow with age and experience (or at least their personalities crystallize and there are references).

Building great product is much harder than it looks. The complexity of building software has both decreased due to open source and frameworks and increased because of competitive pressure. A big advantage of Silicon Valley here is the depth of the talent pool that has participated in or managed large software projects. 

Until a few years ago, Europe has had a dearth of great product people. We probably still have less than a few hundred. The same is true for designers and, depending on what it is that you're building, programmers. 

A thing we tell our founders early on in the journey with us is to move their view from "building the machine" to "building the machine that builds the machine." In other words, design your organization in such a way that it self-perpetuates execution quality. Who do you need that you can delegate product to without worrying? Marketing? Customer support? 

That's the type of people you need to attract to your team early on. To speak with another VC cliche: they need to get on the bus before there even is a bus. That is, in my view, a key element of being a great founder and one that I pay more and more attention to when looking at very early stage companies.


"Great product wins" is the 11th of Heartcore's foundational principles. You can find links to the previous posts here: