As More Workers Go Solo, the Software Stack Is the New Firm

Creator economy is a buzzy, often catchall term used to describe independent contractors. But in reality, most of the innovation has revolved around passion-project content (Substack for writing, Teachable for courses, etc.) and niche side projects. To date, “creator” tools have largely been quasi-horizontal, designed to serve broad categories of largely creative pursuits: writing, podcasting, course creation, and the like.

Lost in all this talk of digital nomads and side gigs, however, are the masses of independent professionals who are working on their own and making a living, but not necessarily pursuing their creative passions. Not everyone’s talents lay in the creator class. A lawyer, a recruiter, or even a venture capitalist may not recognize themselves in this new creator economy, but since the onset of the pandemic they are “going solo” — performing the work of existing professions without the infrastructure of a firm — at an astounding clip. 

There’s a pressing need — and an opportunity — to build vertical-specific tools for workers striking out on their own. Much has been written about the proliferation of vertical software tools that help firms run their businesses, but the next generation of great companies will provide integrated, vertical software for individuals going solo.

Read more at a16z with Seema Amble and Alex Rampell

The Next Wave of Marketplace Startups (Podcast)

Marketplaces encompass a huge swath of services we use every day, from grocery delivery to online shopping to remote learning. How have marketplace dynamics changed since pre-pandemic, and what COVID-propelled consumer behaviors will persist into 2021 and beyond? In this episode, we discuss the most promising companies and categories on the rise, based on data from the Marketplace 100, a ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies.

Slack Debate on Competing vs Unbundling in Social

The Big 3 social networks—Facebook, Twitter, and Instagram—are massive and horizontal: everyone goes to the same place. So should entrepreneurs attempt to steal away a chunk of that market or rip it apart and go vertical? An a16z consumer team Slack debate.

Read more at a16z with Jeff Jordan, Connie Chan, Andrew Chen, D'Arcy Coolican, Jonathan Lai, Bennett Carroccio, and Anne Lee Skates

Community Takes All: The Power of Social+


There’s one rule of thumb that’s proven true over and over again: the best version of every consumer product is the one that’s intrinsically social.  

Tiktok. Fortnite. Minecraft. Pinduoduo. These phenomena are what I call “social+” companies: companies that take a single category—from gaming to music to ecommerce—and build an integrated social experience around it.  

Any product that has a social component baked in has fundamental and asymmetric advantages over competing non-social products in that category: better growth loops, better engagement, better retention, better defensibility. And because social+ companies are network and community driven, that advantage accumulates over time. 

The key isn’t the rule itself, but the implication for founders trying to compete: No category is really won until the social product is built. Even seemingly entrenched incumbents in big, enticing categories like personal finance and real estate are surprisingly vulnerable to scrappy upstarts if they’ve failed to make their products sufficiently social.  

Herein lies the opportunity. Not every product category has had its social moment—yet. Just as every industry makes the crucial transition from analog to digital, nearly every category of company will eventually make the fateful transition from single-player to multiplayer, from company-driven to community-driven, from individual to social.

Through the inevitable cycles of consumer social, there is enormous opportunity for founders who can thoughtfully build social+ companies.

Read more at a16z

'Deep' Job Platforms and How to Build Them


Looking for a job in the 2020s will be very different from looking for a job in the 2000s, or even the 2010s. In this new era of reduced budgets, open-ended hiring freezes, and a shape-shifting workforce of career changers, relocators, and solopreneurs, the concept of a resume and a job board seems comically antiquated. This antiquated system plays no small part in the current crisis, as millions of talented, hardworking people are in jobs (or, worse, without jobs) that leave them underutilized, under-engaged and undercompensated. We need to do better. 

While COVID-19 has thrown the labor market in a state of chaos and uncertainty, it has also accelerated an evolution that has been years in the making: the rise of the “deep” job platform.

We previously espoused the need to transition from traditional job platforms like Indeed and LinkedIn to “vertical” job platforms that address the specific need of a particular industry or candidate. This vital focus is complemented by an expansion in services provided: from mere job matching to deeper platforms. These platforms not only connect candidates with employers, they also offer additional features designed to create long term success for the candidates, companies, and the platforms themselves. These features range from training to community to—in some cases—financial services. 

In the wake of COVID-19 and the Great Rehiring, these deep job platforms will play a critical role in getting people back to work as soon as possible, in the best jobs possible.

Here, we expand on our vertical jobs thesis by revealing what this deep platform revolution looks like in labor and talent marketplaces, from the founder’s perspective. Below, we identify four tactics for entrepreneurs to pinpoint their offerings, develop their product, and successfully build the career platforms of the future. 

Read more at a16z with Jeff Jordan

When Social Meets Fintech (Podcast)

The last financial crisis prompted many consumers to reassess their banking expectations—none more so than millennials and Gen-Z-ers. While revealing one’s financial information was once considered taboo, now consumers are more apt than ever to openly discuss money and debt on online platforms. It’s a trend that’s evident on both ends of the spectrum, whether that’s people divulging their crushing levels of debt on Twitter and Instagram or bragging about their credit scores or stock trades. The repercussions extend far beyond social media.

In this hallway-style conversation with fintech general partner Anish Acharya, consumer tech partner D’Arcy Coolican, and host Lauren Murrow, we discuss why the “holy grail” of social plus fintech is both so challenging and, potentially, so rewarding. We cover which products and companies are taking advantage of it (some in rather novel ways), how it’s being driven by various subcultures online, and why this shift is happening now.

Listen at a16z

13 Metrics for Marketplace Companies

Every company tracks certain success metrics—commonly accepted criteria for the health of a business. But when it comes to marketplaces, those measurements can often be imprecisely defined or muddled in their interpretation. Of course, as marketplaces vary widely in their product category and customer base, so do their benchmarks. But the following list serves as a primer for the key metrics marketplace founders should be aware of, both to calibrate their performance and evaluate future potential.

Read the full post at a16z with Jeff Jordan, Li Jin, and Andrew Chen

Four Paths to Marketplace Success

When building a marketplace, most companies strive to excel on all fronts: high frequency, high retention, and (relatively) high transaction values. Like a hybrid between Amazon and Airbnb, they want to build the kind of habit-forming product users can’t help returning to—and spending lots of money on. It’s the holy grail of marketplaces, and with good reason. It’s not only difficult to achieve, it takes a lot of time.

Luckily, it turns out there’s more than one way to build a successful marketplace. While frequency of use and transaction size are common metrics for determining a product’s potential, the a16z Marketplace 100 revealed some interesting trends.

Four segments emerge.

Read full post at a16z

2010 vs 2020

We react against unintended consequences & blind spots of previous generations. Nothing catalyzes energy quite like it. It’s core to product/zeitgeist thesis It’s why generational companies built in 2020’s will be reaction against those from 2010’s Theory on 2010s vs 2020s:

If the 2010s were about the demand side, the 2020s will be about the supply side. Making it easier for people to uplevel skills and find great jobs. Differentiating the supply rather than commoditizing it.

If the 2010s were about the gig economy, the 2020s will be able the “real jobs” economy. Helping create full time careers with higher long term earning potential. Stability over flexibility. True economic mobility not just side hustles.

If the 2010s were about ‘I want to build something that billions of people use’, the 2020s will be about ‘I want to build something that changes thousands of people’s lives’. Focus on changing lives in a big way not just building product in a big way.

If the 2010s were about building the next Uber, the 2020s will be about building the next Lambda or Incredible Health. Founder's North Star will change. In a lot of ways it already has.

If the 2010s were about “amazing, look at what they can do with all my data”, the 2020s will be about “yikes, look at what they can do with all my data”. Privacy will become a vector for every consumer company.

If the 2010s were about the attention economy, the 2020s will be about the value economy. Business models will shift from ad-based to transaction or subscription based to better align incentives.

If the 2010s were about coming to terms with the unintended consequences of social media, the 2020s will be about re-inventing it. Networks will be smaller, safer, more purposeful, and more private.

If the 2010s were about social **media** and vanity, the 2020s will be about social **communities** and authenticity. These networks will feel very different from today's giants.

How else will 2020s be different?

Also @remindmetweets to come back to this in 2030 (if twitter still exists)

(Originally published as a tweetstorm on Jan 24, 2020)

Are ISAs the Solution to Student Debt? (Podcast)

A bold proposal: You go to college for free, then pay back the school after graduation—but only if you get a job in your field of study and make a high enough salary to afford it. It’s called an income share agreement, and Austen Allred, the CEO and cofounder of Lambda School, thinks it’s the future of education.

Student debt currently stands at more than 1.5 trillion dollars, which makes it the second-highest consumer debt category behind mortgage debt. The crisis has saddled much of a generation, with far reaching effects. Income share agreements, or ISAs, have been put forth as an alternative to the current system. Put simply, an ISA is an agreement between a school and a student for the student to pay a defined percentage of income to the school, for a particular period of time, up to a certain cap. It’s a seemingly simple conceit with complex design considerations, and it’s spurring debate across media and politics.

In this episode, Lambda School CEO Austen Allred, a16z partner D’Arcy Coolican, and a16z editorial partner Lauren Murrow delve into the greater implications ISAs may have for education and the economy. The discussion covers both the promise and the challenges of ISAs—why they’ve been relatively slow to gain traction, why they’ve failed in the past, and why some in the political sphere are still skeptical.

Listen to the podcast at a16z with Austen Allred and Lauren Murrow

Platform vs. Verticals and the Next Great Unbundling

One of the holy grails in the newco world is to build out a digital platform that successfully serves the needs of a broad number of adjacent verticals, and become the definitive platform in its space. We know the now-canonical early examples of this: Amazon, eBay, Craigslist. And we also know that once that holy grail of a new digital platform is attained, competitors quickly come a’ callin’. 

One of the most effective forms of that competition often comes in the form of newcos who aspire to take chunks out of that emergent platform by better addressing the needs of a specific vertical within that platform—by creating a user experience or business model that’s much more tailored to the unique attributes of that vertical. StubHub, for example, took a big chunk out of eBay by creating a ticket-buying experience that was so in tune with the needs of those specific buyers and sellers—with ticket verification, venue maps, and rapid shipping—that they were able to get strong traction in spite of the fact that their fees were substantially higher than what eBay was charging (which likely motivated eBay to buy Stubhub in 2007). 

Read the full article at a16z (with Jeff Jordan)

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The Next Social Networks

If I were starting another company today I’d probably build something around social networks.

I think we’re at an inflection point with the legacy platforms, but still lots of open space for upstarts to figure out what’s next.

Rationale for why and thoughts on how:

Social connection is a core human need. It’s universal and not going anywhere. Essential needs are the best use cases to be building into. This is the #1 reason why this space is so full of opportunity.

Second, incumbents are unpopular and proving themselves incapable of change. While their usage metrics keep going up, there’s an underlying emptiness and unhappiness with the experience. This means the shift won’t happen, then it will happen all at once. Outside of the network effects, users have very little loyalty to the incumbents. When network effects flip negative, they unravel faster than people imagine.

Third, compared to other markets, there is relatively little innovative competition. FB has used its distribution advantage to replicate a lot of social network products (e.g. Snap). Has disheartened a lot of would-be challengers. But that's more open space to innovate.

Last but not least, fixing social media feels like an important enough mission that you’d be able to recruit some extremely talented people to work together on it. Having that is always an accelerant.

That said, I don’t think it would look anything like an existing social network (IG, tiktok, FB, Snap, etc.)

First off, it would be tailored to a specific vertical community. Think urban millennials, retired boomers, fitness fanatics or new moms. Each one of these is will be their own network. A user's future network is more like a series of Reddits than a consolidated newsfeed.

Legacy behemoths often fall prey to a pack of vertical players that provide a more tailored (and obviously better) experience for a subset of users. ebay and Craigslist have been fertile ground for a while. IMO the broad social platforms are next.

The experience will feel more like a “product” than today’s “social networks”. Games like fortnite or roblox are one example of this. People think of them as games, but it’s the social element that makes them really work.

Many of these social networks will have significant IRL elements because that’s what certain vertical communities want. The Wing is one example where their community wants genuine IRL interaction. Give the people what they want!

I also think it's unlikely the business model would be ad based. Why build on a premise that is driving so many of the problems in the incumbents? Also a differentiated business model makes it harder for incumbents to copy you.

Would have to pick a business model that is consistent with the product and community, but memberships, tipping, and in-app purchases are all models I'd explore.

Interesting side effect of this is that it makes these models more likely to stay as pure social networks, rather than grow into social media like the last generation.

I'm excited for the founders building these new social networks.

They say timing is always the hardest thing to get right, but their timing feels Massive opportunity that IMO will feel obvious in hindsight.

Bright days ahead.

(Originally published as a tweetstorm on July 22nd, 2019)

Prioritizing Investor Meetings

As founder I prioritized meeting investors who would jam with me on product. I thought they "got us." I wanted to work with them for 10+ years.

I was totally wrong.

Should have prioritized ones that asked the frustrating, hard, uncomfortable questions.

Here's why:

When I'd meet someone who grokked Frank (our startup) I'd walk out super energized. I thought we'd found our sympatico partners! I imagined every board meeting, investor update and phone call being like that.

When they'd ask about our next product feature I'd instinctively start my response with "that's a great question." Turns out those weren't great questions. Or for us at least they weren't.

As a 1st time founder, I was completely naive.

All the investors who just talked product eventually passed. They were intrigued by our idea but didn't take us seriously as an investment. I spent a lot of time that I didn't have trying to get them beyond product ideas.

The fact that they didn't push us on the hard parts of the business (looking at you go to market plan) was the tell I didn't see. They'd probably already decided to pass, I just didn't know it yet. Maybe it was subconscious and they didn't know it yet either.

On the flip side, the ones who only focused on our GTM strategy were trying to convince themselves to invest. They only had an hour, why waste time jamming on product when they already understood it?

They were in a check writing mindset not a brainstorming one.

Those meetings were a lot less exciting. We didn't have all the answers. The ones we did have were kind of flimsy. Everyone pointed that out. But we were a start-up that needed capital to go figure these answers out. Everyone has to start somewhere.

Didn't they get that?

We'd usually walk out a little bit smarter but a lot more discouraged. It reminded us that we had a lot left to figure out. And it wasn't obvious that anyone was willing to take that risk with us.

In retrospect I should have prioritized *every one* of those meetings.

These were the investors that eventually supported us. They knew we hadn't de-risked everything, but they were willing to take a calculated risk. As one told me, that's why it's called 'venture' capital.

So when you're deciding which investors to prioritize, give a little thought for the ones that don't "get you." The ones asking the demoralizing, frustrating, unanswerable questions.

These might be just the people you need!

(Originally published as a tweetstorm on April 23rd, 2019)

What's Next For Education Startups

Everyone expects schools at all levels — from pre-school to post-graduate universities — to change fundamentally as software turbocharges both students and teachers, enables new business models, and brings scale to an industry that often prides itself on its cottage-industry status (think about the debate over classroom sizes).

So in this a16z hallway conversation, consumer team partners D’Arcy Coolican and Li Jin chat with deal and research team operating partner Frank Chen about the future of education. How long will it take for a traditional 4-year undergraduate program to not be the main path for students? What should we make of Income Share Agreements (ISAs), where the school owns some of the risk if their curriculum and instructors don’t generate employable graduates? Given how hard it is to find a reputable, caring pre-school, what can we do to open up more qualified pre-schools? Beyond STEM courses, what other areas will are well suited for disruptive education?