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Give me Integration or Give me Death
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The Longevity of Icons – A Picture is Worth More Than One Word
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How Mountain Climbing and Negative Churn Are Related
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The Differences Among Junior & Senior Developers & Architects
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What Are The Prerequisites For a VC Job?
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Give me Integration or Give me Death

If you are a SaaS business, heed this warning: Integrate. Or die.

At OCA, we continuously evaluate our investment themes. We look for long-term, sustainable macro trends. If we are right about these themes, it gives us two advantages: (1) our companies will have more margin of error in execution. In niche markets, a company has to execute flawlessly but in large and growing markets fueled by macro trends, you can screw up a couple of things and still achieve a good exit for all shareholders. And (2) once educated in a theme, there are great economies of scale in due diligence, exits, recruiting, deal sourcing and other areas.

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The Longevity of Icons – A Picture is Worth More Than One Word

One of my biggest issues with iOS7 is that Apple is fairly inconsistent with the use of iconography vs. text. Take the email app, for example. If you swipe left in the listing view, it gives you options using text like “Trash”. But in other instances (like looking at a specific message), there is a trash can icon. Even though it didn’t need to use icons for screen real-estate purposes, iOS6 used icons more often and more consistently. Icons transcend language and makes translating an app into a different language a much easier endeavour. I have always admired LEGO instructions since they never need translation. Why can’t software be the same?
 
Icons are much more powerful than using words. Some people’s associations with icons are so strong, that even after the obsolescence of the item the icon is depicting, the icon persists. What icon do you click to save a document in Word? A diskette. When was the last time you used a 3.5″ floppy disk? My kids, the oldest of whom is 8, all know that’s what you click to save but they have never seen a diskette in their lives (and may never). 

“Starting a company is like getting married. Most of the problems are discovered after the honeymoon is over.” — General Georges Doriot (1899-1987), American Research and Development Corporation 

How Mountain Climbing and Negative Churn Are Related

I am a huge fan of For Entrepreneurs’ seminal work on SaaS metrics. I’ve read it several times over the years, I require our interns to read it and it’s a suggested resource in my class. If you are an entrepreneur running a SaaS business or even considering it, do yourself a favor and stop reading this post and read that post immediately.
One “state” that is mentioned in the post is “negative net churn”, which is when additional monthly recurring revenue (MRR) from existing customers (“expansion MRR”) exceeds MRR that is canceled from customers that are leaving (“churned MRR”) and customers that are downgrading (“downgrade MRR”). There is no doubt that negative net churn is a good thing, after all, the name connotes a negative bad thing (churn) so it must be good, right?  But I’ve heard several entrepreneurs mention negative net churn as the nirvana. That if the company achieves this milestone it will be in great shape and churn will be in check.

The Differences Among Junior & Senior Developers & Architects

Last week I had a conversation with a founder about hiring development talent. It’s no secret that there is a shortage of software development talent in Chicago and throughout the country. A natural response to the constrained supply of developers is to widen your net, increase compensation and/or lower your standards. None of those are fun but it is a reality in today’s world. 
 
We talked about the pros/cons of hiring junior development talent versus senior development talent. The question posed was is it better to hire two junior developers or one senior developer? It occured to me during the talk that the essence of the difference between junior and senior developers is this: an ability to understand tradeoffs. 

What Are The Prerequisites For a VC Job?

I get this question a lot. Usually it comes in the form of “do I need [x] experience to get into VC?

The answer is an unequivocal “no.” If you don’t believe me, do look at the backgrounds of VCs across several firms. You’ll see they are quite varied. There are former journalists and lawyers. My firm includes a number of former floor options traders. So there are no prerequisite experience to break into the industry. This does not mean, however, that there aren’t some backgrounds that are more prevalent. Former entrepreneurs, engineers, and executives are very common. Perhaps those backgrounds may be more in demand, but the point is that the lack of one of these backgrounds does not count you out.

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“A real entrepreneur is somebody who has no safety net underneath them.” — Henry Kravis, Founder KKR

Copyright © 2014 Jason Heltzer