There have been some problems with my WordPress blog, but hopefully we’re back in action!
Ok I’ve got to brag a little here. OfficeDrop recently launched our newest mobile app, the OfficeDrop Android Paper-to-Go app, and we’ve had great success with new users and downloads. I’m working on a post about how SEO may be dying, at least for SaaS services, since the huge majority of our new users are coming from app marketplaces these days. I really think we are undergoing a significant shift in the way people find and buy software and web services… and I’m personally having a ton of fun trying to figure it out!
Anyways, here is some of the recent press OfficeDrop has gotten on our new Android app:
May 18, 2011
OfficeDrop: Scan Docs, Turn Them into PDF & Make Searchable (Android)
Using Paper-to-Go you can scan physical documents using your smartphone’s camera and store these documents … other file formats can be uploaded and processed as well. Read OfficeDrop’s Paper-to-Go Review on makeuseof…
May 16, 2011
Android app OfficeDrop Paper-To-Go turns paper documents into electronic ones.
Just snap a photo with your phone, then sit back while it converts the page into a searchable PDF and uploads it to cloud storage. How crazy-handy is that? Read OfficeDrop’s Paper-to-Go App on bNET…
May 13, 2011
OfficeDrop’s Paper-to-Go for Android Scans Your Documents
Paper-to-Go is a document scanner that uses your device’s camera and converts the image into a PDF. The app is directly tied to OfficeDrop’s cloud service, where the PDF documents get processed with Optical Character Recognition (OCR) to make any text in them searchable. Processed documents can be searched from both the app and through the web site at any time. Read OfficeDrop’s Paper-to-Go App on LifeHacker…
May 12, 2011
Digital Filing Service OfficeDrop Now on Android – this one also got reposted on the New York Times
OfficeDrop, an application for scanning, accessing and sharing paper and digital files via the cloud has been rolling out onto a variety of platforms. The company has announced that the OfficeDrop Paper-to-Go app for Android is now available, in addition to existing applications for Mac Windows and iPad. Read OfficeDrop Now on Android…
I’m not really sure how I came across this piece of academic research, but Rebecca Zarutskie of Duke University published a research piece in May 2008 called “The role of top management team human capital in venture capital markets: evidence from first-time funds.” Basically, she looks at various qualities of the partners at first time venture capital funds and runs regressions to see if any of those experiences impact fund performance.*
She concludes that VCs with previous venture capital experience, previous experience as startup execs and experience as management consultants make for better funds. Ok, so other than the last piece, this isn’t too surprising. She also looks to see if other things like having a PhDs or law degrees help as a partner, and she doesn’t find a statistical improvement in exit percentages.
But there is one finding that is statistically significant that I find a little funny:
Funds with MBAs perform WORSE
That’s right, if the partners of a fresh fund have MBAs their fund is likely to do worse than a fund without! The finding is statistically significant.
Is it possible that MBAs make you a worse investor? That would seem like a real problem, since something like 59% of the investors in her sample had them.
Rebecca isn’t really sure how to interpret this finding:
However, I do find, perhaps counter-intuitively, that management teams with more general human capital in business obtained through MBAs perform on average worse than other fund management teams. A possible explanation for this result is that there is an oversupply of individuals of possessing MBAs relative to those with other educational backgrounds who are typically candidates to enter the venture capital industry.
My gut would be that, no, being an MBA does not make you a worse potential investor, but that it might make it easier for you to raise that first fund. And, since the bar may be a little lower for first time funds if the partners have MBAs then the group as a whole may under perform. The reason I’d think it would be easier to raise a fund if you had an MBA is 1) better connections, 2) LPs may like the brand associated with people who have HBS type degrees and well, that’s the two reasons.
Forgive me if someone already wrote about this research a while ago, I just discovered it over the weekend.
*(Her definition of fund performance is the % of deals in the fund that were exited, which is a crude but decent enough metric to make her research interesting.)
Dan Primack at Fortune has a new piece on Union Square Ventures – the fund is out on the prowl for a new fund, and has a great IRR from their first fund. He links to data from a bit limited partner (investor in VC funds) and points out that the other great returns fund in the report is The Foundry Group.
What do these two funds have in common? Well, one key piece is that they both have great bloggers as investors.
So, my question is this a coincidence? Or is there a correlation between venture capitalists who have thoughtful and proflific blogs and good returns?
On the one hand, there is some data here to suggest that these good bloggers are also great investors. I”m sure they boost their visibility with their blogs, and thus their deal flow and overall sexiness as an investor.
On the other hand, a) they also both invest in early stage internet deals, and blogging really appeals to these types of businesses. b) And if the hype on a little bubble in the early stage internet investing world is true then their funds may be enjoying returns from focusing on this space, and thus the blogs may contribute nada. c) And as some of the earliest spotters of the “capital gap” they may be benefiting from the first mover advantage of supplying just the right amount of capital needed by internet companies these days d) And it is possible that people who are good bloggers may be somehow just smarter than average investors (i.e. the two skill sets are just correlated and not causal really).
I’d guess if blogging really helped investors then we’d see more life science VCs and more growth/PE funds blogging. So my thesis would be more that the two funds I just mentioned are doing well not because of blogging, but that blogging was a symptom of all the good things that enabled them to do well recently.
My friend from business school, Matt Soldo, has a well written post on MBAs in the tech startup world, “In Defense of the MBA.”
Matt has held positions with a few different internet companies, and is currently with Box.net. I also know he seriously batted around a few legit startup ideas while getting his MBA as Wharton. So I respect his opinions.
As OfficeDrop has grown I’ve found my MBA more and more useful. Basic stuff like statistics, pricing strategies, etc are particularly useful. I sure that I could have learned this in a book, but there is something about the classroom learning environment that is good for the way I acquire knowledge.
The connections I made during the MBA are very useful. For example, I wanted to test out an idea for a new verticalized product offering at OfficeDrop. I glanced through LinkedIn, saw several classmates who were in the targeted field and had some quick conversations. I could have done this without the MBA, but it was nice to know that there were people who would pick up the phone. And of course the connections were helpful during our fund raise.
I’ve said it before, but my Managing People at Work class was really good. People, outside of the greedy finance world, are pretty fun to manage because it’s not just about the money. My MBA has provided a structure for me to think about this.
I still wish there had been more emphasis on leading sales teams at Wharton. How is this not the most important skill for almost anyone running a company?
The environment of business school is a real problem for people thinking about starting their own company. So many MBAs run for the safety of things like consulting, banking and big corporate positions (and have their post-graduation jobs sewn up with high salaries by the early part of their second year) that you feel strange trying to do anything different. I know for a fact that this atmosphere pulled some potentially great startup people into the boring safe jobs. My friends at Stanford and Harvard who started their own companies said they felt this pressure there too, so I think it’s safe to say this is a pretty standard MBA program problem.
And, finally, business school loans are the bane of anyone looking to start a company because they destroy so much free cash flow.*
Those are my current, unfiltered, thoughts on my MBA. Just as my position has changed over the past year I’m sure it will change again. Would love your comments, and don’t forget to read Matt’s post!
*On a somewhat unrelated note, does anyone else think that student loan situation in the US is the major cause of the educational cost inflation that we have here? In other words, because the federal government makes loans so easily available it is driving up the cost of higher education? I’m starting to think that government policies may be part of the reason that education is becoming so expensive – flood a market with cheap financing and the asset prices will go up??