Progress Report

by Craig Shapiro Founder & CEO at Collaborative Fund

Artwork by Hiking Artist

The first question we ask ourselves when evaluating a new investment opportunity is: 

If this company becomes successful, will it make the world a more interesting, better and/or vibrant place? 

It's critical for us not to get caught up in short-term thinking and to instead look down the line and imagine a world where the founder’s vision has come true. Is that a world we’re inspired by? Is it a world that’s improved by the company and its products? Who, in particular, is benefiting from the success of this company?

Second, we believe that the best for-profit investments are in businesses where the mission of the company and the revenue model are aligned. 

We recognize that this principle limits the number of companies in which we are willing to invest. We know that, in order to stay true to our own investment criteria, we will miss out (and we have!) on several winning, profitable companies while also investing in some companies that fail. 

by Team Collaborative Fund

Image by Brooke Kao

We like to experiment at Collaborative Fund. We’ve experimented in the ongoing development our investment thesis, creating and fostering an online community of people who share our values, and from time to time we develop side projects that benefit our community and causes we care about.

Today, we’re excited to introduce our newest project: PlayAlong!

PlayAlong is a lighthearted game that we hope will raise awareness and funding for childhood education around the world. We’ve teamed up with Sesame Workshop, MailChimp, and Philosophie to put together an enjoyable game for you.

So how does it work?

Simple. Go to letsplayalong.com, read the questions and answer “True” or “False.” We guarantee you’ll learn an interesting fact or two!

And here’s the best part: For every question answered correctly, Collaborative Fund pledges to donate 1¢ to Sesame Workshop and support its efforts to improve childhood literacy and education, up to $1,000.  

But this is only the beginning. As this experiment spreads, we plan to bring on more partners who share our values to help increase the amount that we’re able to raise. But that can only happen with your support.

by Craig Shapiro CEO/Founder at Collaborative Fund

A little more than three years ago, we launched Collaborative Fund with the goal of “investing in startups focused on two themes: collaborative consumption and those which use their values as a competitive edge.” We continue to believe that the underlying values of collaboration are core to successful 21st century businesses and hope our portfolio is a reflection of that belief.

Within a few months of our original launch, the sharing economy became a very hot topic, showing up across mainstream media and in many venture capital investment theses. Some of our early investments have started to drive real impact, for example: Kickstarter is closing in on $1B billion dollars of total fundings, TaskRabbit is helping employ more than 20,000 people in twenty cities, and Lyft is arranging over 30,000 rides per week.   

And since then, we’ve had the privilege to invest in more than 30 other exciting companies, including Codecademy, Hampton Creek Foods, AltSchool, and DIY.

Today, I am excited to share that we’ve quietly continued to build out our portfolio, our team, and investor base, resulting in a second fund, $33 million in size.

One of the things I am most proud of is the fact that our original investors were the driving force behind this second fund. Their belief in our mission and thesis has provided a sturdy foundation for Collaborative Fund to build on for many years to come.

It is not often that venture capital funds talk about where their capital comes from. In our case however, we think it is an essential ingredient to who we are as a team and where we are headed as an organization. Our Limited Partners provide a sense of origin and purpose.

With our second fund, we’ve added several new investors that each bring a unique perspective and set of experiences into our group, ranging from a former Sequoia Capital General Partner, Tom McMurray, to the iconic artist, Shepard Fairey. (**note this is the first time in history these two people were ever mentioned in the same sentence!)

In addition to welcoming new investors, we have grown the investment team. Specifically, Jungju (Jay) Kim has joined us as a Venture Partner. Originally an investor in Collaborative, we’re delighted  to have Jay take an active role -- working out of our New York office, evaluating new investment opportunities and providing support to our portfolio companies.

It is hard for me to capture the impact of Jay’s involvement and experience. Having founded Nexon Corp in 1994, Jay built a game publisher and developer which released a few titles at a time, slowly building momentum into a business that went public on the Tokyo Stock Exchange as the second largest technology IPO worldwide in 2011. He never took venture capital, and to-date is a majority shareholder in his business, twenty years later. Along the way, Jay became one of the most well-respected entrepreneurs in the world, and a thought leader whose perspective on building businesses for the long term has already shaped our thinking.

Jay complements and deepens our diverse team. It only seems natural that a prolific Korean entrepreneur would fit so perfectly with a South African-born philosophy major, a machine-loving design teacher, a Brazilian technologist, and a recovering graffiti artist.

Beyond the day-to-day expertise that we have gained from having Jay come aboard, his decision to join us is another signal that our investment thesis resonates on a global scale. Consumers are evolving and businesses have to rapidly adapt in order to keep up. Brands, products, and company strategy all factor into consumer choice more than ever. Our purchasing behavior tells a story about how we align our values.

Our weekly update highlighting new products and jobs in our portfolio.

Growth 

Grand St. launches a self-serve marketplace for hardware makers to list their goods: http://j.mp/1e7ONRv 

UpCounsel launches an outside general counsel program for companies needing long-term legal help: tcrn.ch/1b2H3Fr

Over 700 educators have applied to teach at AltSchool. Here’s how new teachers are selected: hub.am/1fIdiJ8

In just a few short months, Sherpaa Health will be open for business in San Francisco! http://bitly.com/1bGYlIN

Hampton Creek Foods raises $23M, strikes deals with major stores: http://on.recode.net/1iZpHtp + coverage in The Wall Street Journal and New York Magazine!

Congratulations!

Yahoo acquires Wander, makers of Days – a social photo diary on the iPhone: http://tcrn.ch/1bGRi2S

MyFitnessPal acquires coaching app Sessions to bring accountability to your workouts: http://bitly.com/1gHhJ87

Kickstarter wins the 2013 Crunchie for “Best Overall Startup” by leveling the maker playing field: http://tcrn.ch/1dEWBi1

Business Insider names Codecademy 1 of 11 app developers to watch in 2014 for their Hour of Code iOS app: http://read.bi/1dEYUSc

Upstart celebrates over $3,000,000 in offers from backers to upstarts! http://bitly.com/1cSuiZl

Collaborations 

Lyft launches a coalition to bridge ride-sharing insurance gaps: http://bitly.com/1cSFXHQ

Maker Studios joins a collective of YouTube channels to help drive video advertising: http://bitly.com/1cSzKve

How Maker’s Row is facilitating connections between designers and small-batch American manufacturers: http://j.mp/1d8QU7j 

Kaplan Test Prep partners with Upstart to fund future software developers: http://j.mp/1exfuj1 

Awesome

White House to announce its first-ever Maker Faire this year: http://j.mp/1amigf9 

Why Silicon Valley wants to hack the food industry, featuring Hampton Creek Foods: ”This isn’t just going to happen in San Francisco, in a world of vegans. This is going to happen in Birmingham, Alabama. This is going to happen in Missouri, in Philadelphia.” http://j.mp/N3ZRJn

The Guardian: “Reddit is home to everything the web likes best, from kitten gifs to breaking news. What draws its 7m daily users? And what does it take to make it to the site’s highly prized front page?” http://bitly.com/1dF2hZs

Press & Interviews 

Bevel by Walker & Co in The New York Times: “Search for a market niche, and you might find a crowd.” http://nyti.ms/1cSymce + coverage in Fast Company, MSNBC and TechCrunch!

Fast Company on subscription retailers and how Quarterly frees customers from the tyranny of choice: http://bitly.com/1dF040b

Forbes on how Quarterly is deepening relationships between influencers and fans: http://onforb.es/1dF1TKp

Bloomberg on how filmmakers are using Kickstarter to fund and distribute films: http://bloom.bg/1cSGY2r

How MakeSpace is a “closet in the cloud.” – New storage service lets you use an app to retrieve items: http://bitly.com/1cSOSsB

Fast Company names Hampton Creek Foods as one of the top 10 innovative companies dedicated to social good: http://bitly.com/1dEYuvh

Upstart on CNN: “Rachel Kim raised $100,000 on Upstart — and will pay investors 6% of her earnings for 10 years.” http://cnnmon.ie/1bGRXRZ

Q&A with Lyft co-founder John Zimmer: “I want to make sure we save Lyft in Seattle.” http://bitly.com/1dEZfob

Progress Report & Reddit

Craig Shapiro on how investing in your employees can help your bottom line: http://bit.ly/1flFIsa 

Kanyi Maqubela identifies the different technologies that enable the Internet of Things: http://j.mp/MyAMpM

Ryan Jacoby encourages designers to disconnect and observe: http://j.mp/N9NdZZ

Alberto Escarlate asks how workers can stay relevant when their jobs become obsolete: http://j.mp/1ftbJyw 

Craig Shapiro profiles Collaborative Fund LP Chuck Templeton: http://bit.ly/1ghqLI0 

We hosted a Reddit AMA last week with Scott Heiferman, CEO of Meetup: http://j.mp/MW5f1f 

Job Opportunities

Hopscotch is looking for someone smart and idealistic to join their team on the operational side of things, based in New York: gethopscotch.com/jobs/ops

Codecademy is hiring a Product Marketing & Community Lead in New York: codecademy.com/jobs

Kickstarter is hiring a Product Designer in New York: kickstarter.com/jobs

Skillshare is hiring a General Manager in New York: jobs.lever.co/skillshare

Simple is hiring a Data Visualization Engineer in Portland: simple.com/careers

Good Eggs is hiring a Head of Business Operations & Finance in San Francisco: goodeggs.com/about/jobs

Gumroad is hiring a Payments Engineer in San Francisco: gumroad.com/jobs

TaskRabbit is hiring a Product Manager, Mobile in San Francisco: jobscore.com/jobs/taskrabbit

Lyft is hiring a Director of CRM and Engagement, a Creative Copywriter, and a Senior Data Scientist in San Francisco: lyft.com/jobs

MindSnacks is hiring a Game Designer in San Francisco: mindsnacks.com/career

by Kanyi Maqubela Venture Partner at Collaborative Fund

Image Via

Lately, crowdsourcing is almost a dirty word. It wasn't too long ago that crowdsourcing was all the rage, but more recently, online communities have become much more sophisticated. They increasingly want to be participants in the experiences they contribute to online, not just products.

Lyft drivers have self-organized on Facebook, over the airwaves using Voxer, and their voice has great agency in how the corporate team makes business decisions. Peers catalyzes Etsy sellers, AirBnB hosts, and Getaround drivers to lead public policy. Amazing businesses we look up to like Kickstarter, GitHub, and Meetup are member-powered companies today; marketplace decisions made by their management teams consider those members as citizens, rather than simply users, or worse still, as the product itself.

As I've considered marketplaces and peer networks as Internet cities, I've realized that tools to empower the citizenry of these cities is one of the most exciting opportunities and challenges we face today. We have invested in Guild to insure platforms that face underwriting challenges in p2p transactions, in Modria to create infrastructure for dispute resolution on these platforms, and in a few very exciting other projects that we will announce soon.

And here's the exciting part: we're just getting started. If new online communities are Internet cities, we will increasingly see the crowd have formal agency, and even stake, in the platforms where they work. Crowdfunding is only at the tip of its iceberg, and has already affected culture across categories, and will continue to do so. One can imagine where Alphaworks takes their product. The concept of a mutual company, provocatively described by some friends across the internet, will get more air time in the coming years.

There is a path forward where genuine crowd participation in every business will be the norm, rather than an experimental feature. That path is an exciting one, indeed.

by Craig Shapiro CEO/Founder at Collaborative Fund

I’ve started writing about how our Limited Partners (LPs) shape and influence us. They inform our sense of purpose, support us, and inspire us.

Today I’d like to write about Chuck Templeton -- another LP that we’re proud to have on our team.

Chuck is a relentless entrepreneur. Since founding OpenTable, Chuck has focused his ambition on working to solve some of the world’s most pressing problems. He shares our belief that mission and profits are not mutually exclusive.

Here’s an excerpt from an interview where Chuck talks about the startup scene in Chicago and the companies that excite him:

Via

And he’s been a willing mentor by serving on the boards of a number of Collaborative Fund portfolio companies, including TaskRabbit and Getable.

Beyond that, he’s used his influence and his network to help impact entrepreneurs succeed. Impact Engine, an accelerator program co-founded by Chuck, helps young businesses that address today’s most pressing societal and environmental challenges -- ranging from climate change and poverty to education and public health. Their startups are tackling some of the world’s most challenging, but critical, problems.

On a personal level, it continues to drive me crazy that Chuck can run further and faster than I can. One of his goals for 2014 is to run a 50k, a 50 mile, a 100k and a 100 mile! Mind-blowing.

We’re very fortunate to have Chuck working with us. He brings a passion and perspective that is as rare as it is valuable.

by Kanyi Maqubela Venture Partner at Collaborative Fund

Picture Via

There are a number of ways to connect hardware to the internet. Each of them has its pros and cons. Understanding the differences between them is useful for makers, manufacturers, and it will soon be useful to you, too. I'll list them briefly below.

First, there is cellular. You know what this is. This technology is remote, tends to always be on, and requires a high revenue stream to justify the cost of service. The technology requires pinging the nearest cell towers, which send data packets to satellites for global positioning system (GPS) and geolocation, which are obviously fairly expensive functions.

Second, you have mesh networks. The best way to understand a mesh network is that each device on the network has a couple of radios, which tether to the other radios on the network to create a closed connected system. Wireless mesh technology costs have plummeted in the last 10 years, thanks to military technology advancements, so the applications of this technology should increase soon. The problem, however, is that each device on the network needs to be enabled, so it requires fixed, closed systems in order to work well.

Third, you have WiFi. WiFi requires a network access point, like a router, to connect it to an internet network. You can use WiFi to create an ad hoc network between two devices, but if you want to use WiFi to connect to a server, or to the cloud, you need a router connected to ethernet for this to be most useful, so mobility is limited.

Finally, you have Bluetooth. This is similar to a WiFi adhoc connection, allowing you to connect two devices that are a relatively short distance from each other (measured in feet). Lately, Bluetooth low energy, a protocol that uses the same technology but in a low-power mode to protect battery life, has become a popular application of this technology, connecting phones to other devices. This only connects one device to another at a time, and also needs additional hardware to connect to the cloud.

The question you may be wondering: Why has BLE (Bluetooth low energy) gotten so much attention lately, when there are other ways of connecting?

If you look at what BLE offers, it is the most simple for mobile app-based solutions, because it can run in the background, sending data between a phone and another device near it, without much of a power drain. So for home locks, fitness tracking wristbands, or car sound systems, bluetooth is the most effective way to connect the data on a mobile app to an outside device.

But if you want to connect a number of devices at once, want to push data to the cloud, or stay permanently connected to the cloud, you may need one of the other use cases. We have had the opportunity to back a number of companies that are experimenting with ways of connecting all sorts of hardware to the Internet, starting with the Karma WiFi device, which creates a local hotspot for devices within WiFi range by creating a cellular connection. It's a very elegant and smart way to create a hotspot on-the-go.

There are obvious implications for the connected home in security, telephony, networking, and so forth, and we are excited about how these tools can bring the offline world online, or the online world offline, so as to impact communities around the world.

Stay tuned for more on this subject!

by Ryan Jacoby Venture Advisor at Collaborative Fund

Great product design starts with understanding context, behavior, and motivation. With digital experiences in particular, it can be hard to understand context or observe the triggers that signal motivation from behind a big monitor in your office. If you’re not "getting out of the building" to test assumptions with real people you should be. You should also be doing this to help spot needs and opportunities.

Whether or not I'm looking for new ideas or testing new concepts, I like to get out without any agenda at all except "to notice." It helps keep me inspired and to hone my observation skills. The benefits of slowing down, wandering, and disconnecting are become more widely known. Why not combine disconnecting and observation?

So stop for a second. What’s happening here?

I captured some more snapshots below for you to practice this yourself right now. Ask yourself, what are people doing and what are they trying to accomplish? Where are they headed? What’s helping them or standing in their way? How are they using objects or their environment? What’s happening in the foreground and the background?

Really force yourself to go deep:

Spot details AND the whole scene

Look for what’s common and what’s different

Tell yourself a story of what's happening

Discover what's missing, or as my colleague Janvi described recently, the negative space.

And if you want to learn more:

Listen to this Design Matters podcast with esteemed designer Bob Gill, one of the founders of Pentagram, describing how he "listens" for ideas that lead to amazing logos.

Check out On Looking by Alexandra Horowitz and reviewed here by Maria Popova.

Track down an original treatise on reading the environment, How to See: A Guide to Reading Our Man-Made Environment, by designer George Nelson.

by Alberto Escarlate Venture Partner at Collaborative Fund

Artwork by Hiking Artist

If you search your memory (aka the web for some of us) for careers that don’t exist anymore you’ll end up with a long and interesting list. Elevator operator, milkman, video store clerk, telephone operator...the list goes on and on.

Some careers are gone because of changes in modern culture. But in the last decade or two a large number of jobs were replaced by machines or because entire industries turned obsolete by modern technology. Computer operators and data entry workers were professions that came with computers, but are already gone.

Of course, you could argue that some professions will never change. Lawyer, doctor, chef, plumber. Which is true…until they change.

Skill requirements have always changed over the years, but not at the pace we see now. We hear that technological evolution has been happening exponentially. Does that mean that new types of jobs are being created and killed just as fast? It seems likely (although I have no data to prove it—and I’d love to see some research if anyone has any).

Empirically, we can look at AngelList. It currently lists 84 startups hiring Growth Hackers. Even Monster.com has Growth Hacker listings. But we don’t know how long growth-hacking is going to be a thing. At what point do you decide to be a growth hacker before no one needs one?

The question for the new workforce is then how to prepare for constant change and acquire skills that will get them ready for multiple waves of change.

How do you cope with the change and avoid becoming obsolete along with your job?

by Craig Shapiro CEO/Founder at Collaborative Fund

Artwork by Hiking Artist

In a recent New York Times article, Adam Davidson talks about two very different trips he took to Ikea five years apart from one another.  

Why so different?

In between the trips, Ikea invested in improving the working conditions and opportunities for their employees. And not just for the sake of the employees, but also because the investment can lead to increased profits.

The research backs this up. New employee management software draws on the work of academics like MIT Sloan professor Zeynep Ton. She’s found that the relationship between worker management and profit should not be focused simply on decreasing employee costs.

In fact, the opposite is true according to a study by Wharton professor Marshall Fisher. In the case of one retailer, every every dollar of increased wages brought in $10 more in revenue. For smaller stores, that figure jumped as high as $28.

Davidson breaks it down:

“Even the most coldhearted, money-hungry capitalists ought to realize that increasing their work force, and paying them and treating them better, will often yield happier customers, more engaged workers and — surprisingly — larger corporate profits.”

Businesses that align the incentives of all stakeholders -- founders, shareholders, employees, customers, community -- are finding that the extra costs that go into the business are yielding impressive returns. Studies like these, which we expect to see more and more of, only reinforce that this is where businesses are headed. And that’s a movement we’re excited to be a part of.

by Kanyi Maqubela Venture Partner at Collaborative Fund

Artwork by Hiking Artist

On peer-to-peer platforms, trust and safety is of paramount importance. After all, they are intended as safe spaces on which certain categories of transactions can be made. But trust and safety isn’t perfect anywhere, and particularly not on marketplaces. Uber recently was in the news for one of their drivers having a criminal record without them being aware of it. Thumbtack has thorough automated background checks, but that is a defensible competitive advantage for them, rather than a de rigueur feature for the industry.

I recently met with a startup who has automated the seller fraud detection process for inventory on their site, by using machine learning on certain sets of behaviors and language that a given seller uses. In the event that a seller fails in certain among these criteria, they are prompted to take a CAPTCHA and other fraud-deterring steps, to ensure the integrity of the products that are sold on the site. Lyft has more stringent driver vetting processes than the livery industry, but they don’t have as strict a process on the passenger side. If a driver has a bad ride, the passenger is automatically blocked from that driver permanently. If it’s a bad actor, I assume they eventually kick them off, but I haven’t seen evidence of it (and, hopefully, neither have they). All of this is to say, technology can enable a bevy of automating processes which can prevent fraud, take steps to ensure user identity but also product integrity. And yet the backbone of eBay’s service is still, to date, human reviewers, not so different from Yelp.

Why?

Truth is, at least as it relates to product integrity, because they don’t want to. In 2008, eBay lost a lawsuit against LVMH, who sued them because of the sale of counterfeit goods on the eBay platform. According to details of the suit, more than 75% of the LVMH goods sold on eBay were fraud or fake. Tiffany’s has said that 80% of their goods sold on eBay are counterfeit. The pieces eBay has put in place now to create trust and safety on the platform around product integrity were done reluctantly, however. The bad goods were driving revenues on the platform, so why get in the way of that?

Interesting example of where being an “amoral” peer-to-peer platform can be dangerous, when the revenue leads the strategy…

Discuss on our subreddit. 

Our weekly update highlighting new products and jobs in our portfolio.

Launches & Product Updates 

Codecademy’s Hour of Code app is now available on the iPad: http://bitly.com/1ayL0BR

Skillshare launches an Activity Feed on the web for users to follow classes, skills, and friends: http://bitly.com/1gdMILl

AngelList creates a new universal investor accreditation form: http://tcrn.ch/MbTNP6

AngelList tests charging for job listings, for successful hires startups will pay 10% salary or .25% equity: http://tcrn.ch/1mSTnLm

Balanced unveils new transparent pricing for volume card processing: http://tnw.co/1e8qSVW

Balanced will soon allow customers to push payments directly to debit cards. This new feature was crowdfunded by Balanced users: http://tcrn.ch/1dEMNj9

Kickstarter now allows crowdfunders the ability to generate targeted updates to backers: http://bitly.com/1feITlT

Lyft updates donations vs. set pricing for specific cities: https://www.lyft.me/help?article=1415358

Growth & Collaborations

On January 22 Upstart hit a new high of 50 upstarts in funding! https://twitter.com/davegirouard/status/426142075109654528

Lyft hires Google X Legal Director David Estrada as its VP of Government Relations: http://tcrn.ch/1d2RvqR

Rap Genius strikes a deal to license Universal Music's lyrics: http://bitly.com/1ayLnwm

AngelList recruits Philipp Moehring from Seedcamp to launch syndicates in Europe: http://tcrn.ch/1dYAX9L

Job Opportunities

Makr is hiring a VP of Growth in Brooklyn: http://j.mp/1aVt8vx 

MakeSpace is hiring a Mobile Developer (iOS) in New York: angel.co/makespace/jobs

HelloSign is hiring a Head of Sales in San Francisco: http://bitly.com/LXimyJ

Gumroad is hiring a Product Designer in San Francisco: http://bitly.com/1feKw2X

TaskRabbit is hiring an Online Marketing Manager in San Francisco: j.mp/1eeVu4N

Soma Water is hiring a Design Director in San Francisco: http://j.mp/1ihTVHw

Offline 

Creative Mornings is recruiting new organizers in San Francisco, Boston and Milan: http://j.mp/1kExscb

Emily Castor, Director of Community Engagement at Lyft, will be speaking at the upcoming CMX Summit in San Francisco: j.mp/1ea4wmi

The first Gumroad Creators Studio is on February 13th in San Francisco: http://bitly.com/1mIb3X7

Awesome 

Codecademy is featured on Apple's timeline of the last 30 years: http://bitly.com/1dENqct

Lyft highlights its quirkiest drivers for promotion at Sundance: http://on.mash.to/1mYftfp

This ad agency wants to help make your Kickstarter campaign a hit: http://bitly.com/1dEO5L8

Explore (and rent!) a desk at Soma Water's office in San Francisco: http://bitly.com/1fmesZa

Business Insider Q&A with Lyft driver Deco Carter, a.k.a Hip Hop Lyft: http://read.bi/1d2ScRe

"Doctors should be curators of the internet for their patients." – Jay Parkinson, CEO of Sherpaa: http://bitly.com/LXdppE

Community

We hosted an AMA on Reddit yesterday with Zach Klein, co-founder & CEO of DIY.org redd.it/1w1v5a 

We announced the winners of our Skillshare x Seth Godin scholarship contest! Winners received a Skillshare gift card to enroll in Seth Godin's entrepreneurship class.

New on Collaborative Market – XO Tablet by OLPC, Bevel by Walker & Co., Hello Ruby by Linda Liukas, Sugru, Behance notebooks + more: www.collabmarket.tumblr.com

Press & Interviews 

AngelList in Bloomberg Businessweek – "AngelList, a four-year-old startup based in San Francisco, is starting to open things up with a social network for the kind of people who create and invest in social networks." http://buswk.co/1eSObTk

Kickstarter in Wired – How Kickstarter has changed indie moviemaking for good: http://j.mp/LW3QYJ

Zach Sims, CEO of Codecademy, spoke on a panel about higher education at this year's World Economic Forum in Davos: http://youtu.be/d4y5QDxts28

How technology is helping Blue Bottle Coffee serve up a great cup of coffee – Hunter Walk interviews CFO David P. Bowman: http://j.mp/1eFjssS

Inside the world of one-click grocery delivery, featuring Good Eggs: http://j.mp/1fbQrE0

MakeSpace in Apartment Therapy – "MakeSpace is a startup that promises that you'll never have to visit a storage unit again." http://bitly.com/1e5ysB3

Simple in Business Insider – "Why I stopped using regular banks for two weeks." http://bitly.com/1iyqK5I

Progress Report 

Ryan Jacoby on simplifying data networks to make them more usable: http://j.mp/1eh2dek

Craig Shapiro on transparency - "When you update your investors, be honest, tell the whole truth, and give context." http://j.mp/1aLmYOH

by Ryan Jacoby Venture Advisor at Collaborative Fund

I saw this tweet over the weekend and thought it was pretty cool:

A year ago I made an @IFTTT recipe to show @instagram photos of fortune cookie fortunes on @Tumblr. 10k posts later: http://t.co/f9gPQDAnTN

— Josh Cook (@TheJoshAbides)

January 17, 2014

IFTTT is a powerful tool. Simply by creating a recipe, someone was able to passively compile an enormous library centered around a single idea.

It got me thinking about the myriad things we could track, content we could capture, insight we could glean, or fun we could have with super easily configured algorithms.

It makes me want this powerful capability to be dead simple and instantly accessible to more people (come on Linden!). It feels like, maybe, this is about to tip.

Everyone knows that Google already has interesting data that is driven by search terms (for example, signs of an upcoming flu epidemic). But could we, in a more networked way, also start to make this analysis happen on our own without relying on Google or expensive software platforms?

Seems to me that the tools are there. Let’s start making them more usable.

by Craig Shapiro CEO/Founder at Collaborative Fund

Artwork by Hiking Artist

One of the best pieces of advice I ever received came from an investor in Collaborative Fund. He was ready to invest in our fund, but he wanted to make sure I understood something.

Mistakes happen. It’s inevitable and everyone makes them. But it’s important to be transparent and not sweep those mistakes under the rug.

In my case, he was telling me:

“Some of your investments will fail. That’s okay. What isn’t okay is you pretending like everything is going well when it isn’t. You might be able to get away with it for a short period of time, but it will eventually catch up to you. We will find out and you will have made a much bigger mistake than a poor investment.”

I give the same advice to our portfolio companies.

It’s hard to be an entrepreneur. I know that one of the most difficult things to do is to report bad news, especially to someone who has trusted you with their money.

When you update your investors, be honest, tell the whole truth, and give context. Your investors want you to succeed and they understand that virtually all mis-steps can be fixed. But that means they need to know what challenges you are facing, if there’s going to be any chance of fixing them.

It concerns me when I get consistent updates that all is well only to hear later that a problem has been allowed to grow and snowball into something much bigger and less fixable. I try to think of that feeling when I have to update Collaborative Fund’s investors and have less than rosy information to share.

So this is what I try to do: Be up-front. Figure out the problem. Create a plan to reverse or minimize it. And own up to it.

by Kanyi Maqubela Venture Partner at Collaborative Fund

Artwork by Hiking Artist

It is instructive, when thinking about venture capital, to consider a venture firm as a two-sided marketplace.

On the one side, the firm is selling its capital to entrepreneurs. It has to demonstrate that the brand, services, and relationships that come along with an investment will have a greater material impact on the business than another firm at a similar (and in some cases worse) price. And so they will build platforms, blog, sit on boards of directors, and serve as formal advisers to startups. At Collaborative Fund, we do all of these things to serve our customers on this side of the marketplaces: the entrepreneurs.

The other-side of the marketplace is very important for entrepreneurs to understand as well. Limited Partnerships are structures where everybody, including the General Partnership, invests in a fund, and the Limited Partners hope that at the end of the fund, they will be returned their capital with some gain.

Many, but not all, limited partnerships consist of institutional investors -- endowments, pension funds, fund of funds, foundations, et cetera. For these institutions, there are a number of asset classes where they invest, and venture capital tends to fall under the "alternative investments" asset class. That is, we are lumped alongside hedge funds and later stage private equity. Alternative investments, for most portfolios, are the highest risk in the portfolio, and so often represent only a small percentage of the total assets the institution has under management -- usually less than 10%, and often less than 5%. As an institutional investor, the hope in this allocation is that the high-risk nature of the category will result in a commensurate high-yield. The most successful venture capital investments, then, are those where the yield was abnormally high - and the risk was abnormally high.

These two sides of the equation should inform each other. Smart institutional investors look for venture capitalists who create a support system for their founders, so that they will drive returns by better serving their portfolio companies. And entrepreneurs should seek venture capital when they are building "high-beta" concepts.

These are concepts that, in the early stages, have a very high risk of failure, but by their nature have the ability to become so big as to transform culture.

Software and internet businesses have served as excellent venture capital investments because the barrier to entry for millions (and today billions) of users is incredibly low. The likelihood for the winners to become truly extraordinary, is astronomically low, but far higher than in any other type of company.

To be honest, entrepreneurs (and venture capitalists), in the spirit of mitigating risk in the very early stages, often aim too low in dreaming up their products, or making investments. While there are many ways to make substantial revenue in the medium term, there are fewer ways to change culture through technology. And it is only the culture-changing products -- the Googles, Oracles, Facebooks -- that will keep this industry in balance the way it is today.** 

VC associates are trained to ask: Can a scaled-up version of this vision change culture? Because those are the companies that drive the necessary returns.

The moral of the story, for both the founders and the venture capitalists, is dream big. Make bets. When Josh Tetrick decided that he could invent a solution to replace all eggs in food with Hampton Creek Foods; when John Zimmer heard his urban studies professor at Cornell describe a transportation future that was truly, completely revolutionary, they were making bets. 

They had no idea if they were crazy, and were likely told along the way that their ideas were unlikely to succeed, but they were compelled by their conviction in wanting to change the culture. 

And as venture capitalists, we ought to do the same in backing entrepreneurs such as these. Most of the best early stage venture investments aren't speculative, small, "risk-adjusted" bets, but significant investments, with real allocations. And most of the best early stage venture investments happen when the investor sees an idea that's "so crazy it might work". 

**It is worth noting that as an asset class, the venture industry doesn't perform better than the public stock market, so there is a question as to whether the industry's balance today does make sense.

Our weekly update highlighting new products and jobs in our portfolio.

Launches & Product Updates 

FOBO (formerly YardSale) launches on the iPhone as the easiest way to sell old electronics: http://tcrn.ch/1eXr3lk

Walker & Co. launches to build a Procter & Gamble for people of color: bloom.bg/1cs4Z3p

The Days asynchronous photo diary launches version 2.0 with easier discovery and sign-up: tcrn.ch/1d4EsIT

Grand St. will soon launch community profiles – reserve your username today! https://grandst.com/reserve

Skillcrush launches a new online course >> Skillcrush 102: JavaScript, jQuery & APIs: http://bitly.com/LgDu2s

Awards & Honors 

Neverware wins the UPS ‘Savings Side of Business’ GOOD Maker challenge: http://bitly.com/1dCloEv

Hopscotch wins the 2014 KAPi Award for Best Educational Technology: http://bitly.com/1eRhCGb

SAT Vocab by MindSnacks wins Best Secondary English Language Arts App of 2013: http://prn.to/LgDijS

Hampton Creek Foods and Lyft are highlighted by Forbes for their achievements in 2013: http://onforb.es/LraKET

FoxNews highlights Good Eggs as 1 of 5 most exciting food delivery services: http://fxn.ws/1hyT70K

Awesome 

20 Kickstarter-funded projects are heading to the Sundance Film Festival: j.mp/1a7J3fp

Georgia Tech study finds marketing language plays major role in the success of Kickstarter projects: http://b.gatech.edu/1awhpUb

Teacher and author Wesley Fryer has written an eBook of Hopscotch challenges for students to complete: http://amzn.to/1awNEpo

BuzzFeed and IBM collaborate on a list of the 10 coolest things happening in Silicon Alley, featuring Hopscotch, Kickstarter and Maker’s Row! http://bzfd.it/1jbxKWh

Upstart now has a professional tennis player, a competitive swimmer, and a professional racecar driver on the platform. 

Press & Interviews

Hampton Creek Foods in Forbes India – Making the Egg Obsolete: http://bitly.com/1eRfr5t

Upstart in Fast Company – Upstart offers venture capital for humans, not just the companies they'll start: http://j.mp/1cqF1ZS 

AltSchool in Fast Company – "How a former Google exec is reinventing elementary education." http://bitly.com/K0PoN7

Fortune interviews Courtney Holt, COO of Maker Studios: http://bitly.com/1hyQJHc

Zach Sims, CEO of Codecademy, on gaining respect and making good hires: http://on.wsj.com/1awKDoY

Would you rather chew cinnamon or plastic? Learn why Simply Gum created the first 100% all natural gum: http://t.co/AOoP0UJlmt

Naval Ravikant, co-founder of AngelList, on how to find and attract the right hires to your startup: http://on.wsj.com/1df9MB5

UpCounsel in Business Insider Australia – How UpCounsel helps anyone get a lawyer: http://bitly.com/Lr6TrF

Quarterly on WSJ – "New ways to give yourself a gift every month." http://on.wsj.com/199TQF9

Collaborations

Getaround strikes a deal to offer discounted leases for Smart Cars listed on its rental platform: http://u.getaround.com/smart/

Maker Studios and Warner Bros. will co-produce a comedy created and written by 'Friends' producers: http://j.mp/1dRnr2p 

Walgreens taps TaskRabbit to deliver cold medicine to shut-ins: http://on.mash.to/1aDi1a1

Maker's Row and Cotton Incorporated partner to bring back Made in the USA: http://j.mp/1djKiWJ

Gumroad creators can now use Zapier to automate with hundreds of web services: http://j.mp/JeWXAf 

Growth 

Balanced grew 784% in 2013 and is now processing $370M a year: http://tcrn.ch/1gW8uzq

Nathan Barry has made $355,759 self-publishing his books through Gumroad: http://t.co/Oo3k5HP7gB

Hundreds of Skillshare teachers earned five or six-figure incomes in 2013: http://t.co/1a6pixFAKW

The Kickstarter community pledged over 1,000,000 every day in 2013: http://bitly.com/1dYBoeQ

Maker Studios hires former AOL executive Rene Rechtman to lead international operations: http://bitly.com/1hyRsZ7

Codecademy surpasses 24 million unique users for its free online coding courses: http://t.co/AlZ5EsLVaV

Reddit in 2013, by the numbers: 56 billion page views, 731 million unique visitors, and over 40 million posts: http://bitly.com/1dtsDcr

Progress Report 

Sebastien Park on how Quarterly has become a platform for empowering creative entrepreneurs: http://j.mp/1at0o05 

Alberto Escarlate on how kids begin building their online reputation through gaming:http://j.mp/1do0yac 

Kanyi Maqubela on why convenience isn't enough for on-demand service companies: http://j.mp/Kbc1i1 

Craig Shapiro on celebrating strong roots and the story of our Limited Partner Chris Cerf: j.mp/1aIAvWI

Ryan Jacoby on building products from insight: http://j.mp/1gdSSHC

Portfolio Job Opportunities

Gumroad is hiring a Data Scientist in San Francisco: gumroad.com/jobs

Quarterly is hiring a Director of Buying and a Curator Talent Manager in Los Angeles: quarterly.co/careers

Maker Studios is hiring an Art Director in Los Angeles: makerstudios.com/careers

MindSnacks is hiring a Senior Game Engineer in San Francisco: mindsnacks.com/careers

Skillshare is hiring a Full-Stack Marketer (Growth) in New York: skillshare.recruiterbox.com/jobs

MakeSpace is hiring a Brand Ambassador and a Customer Happiness Agent in New York: makespace.com/jobs

AltSchool is hiring a Curriculum Director in San Francisco: http://bitly.com/1eHcJx3

Kickstarter is hiring a VP of Operations/Finance in New York: kickstarter.com/jobs

by Sebastien Park Analyst at Collaborative Fund

I recently discovered that Magic is Art created a thirty second video promoting his Quarterly subscription. I loved it.

You can see it here:

It reminded me that Quarterly was borne out of the desire to empower creators to deepen the relationship with their audience and bridge a digital relationship with the real world.

Quarterly preserves the romance and impact of a well-crafted package, serving as an homage of sorts to “the power of packages and the triumph of the postal service”. Going against the steadfast trend of digital experiences replacing cherished analog ones, founder Zach Frechette reached out to friends like Cool Hunting, Swiss Miss, and Jason Kottke to make mail the medium, and object as expression.

Drawing from his tenure as editor of GOOD magazine, and in helping launch a print magazine during a time when counterparts were going online, Zach saw how the physical object sent through the mail could create a deeper bond with readers. By providing a tangible offline experience, the object became less about the information it contained and more about the role it served as a symbol of participation and belonging.

Starting with friends, and begetting more friends, the cast of Quarterly curators coming from creative disciplines like art, culture, and food grew from a handful to over 50 tastemakers. From musician/artist Pharrell, to television/food/travel guy Andrew Zimmern, more and more creative entrepreneurs became Quarterly curators.

But why?

Taking both Pharrell and Andrew Zimmern as examples, with a combined Twitter following in the millions, they took on qrtr.ly/pharrell-williams and qrtr.ly/andrew-zimmern as part of their identity so that they could offer the world something tangible that “mirrored our interests, reflected our values, and made us feel like a part of something bigger than ourselves”. You can see the magic unfolding for their most recent issues, documented on Twitter by their respective issue numbers: #IAO02 and #ZIM01.