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    - Venture Capitalist @ GGV Capital
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“This is Not Just for the Menlo Mom”

I read an article by Nick Bilton this week in the New York Times entitled “Disruptions: The Echo Chamber of Silicon Valley.” I think he makes some solid points, and it reminded me of my first meeting with Mauria Finley, founder and CEO of Citrus Lane.

Citrus Lane FBOne of the first things Mauria told me when we met was “Citrus Lane has to be about products and a community that is not just for the ‘Menlo Mom.’  We have to reach the Nebraska Mom, the Tennessee Mom – the broader audience of moms around the country and eventually the world.”

Mauria and her team had spent a ton of time talking to moms around the country as well as the brands behind the products they buy. They learned a ton, and applied it towards their business strategy and business model. There are 10,000 babies born every day in the US, and the average first time mom spends more than $12,000 on her child in the first year (think diapers, baby food, strollers, etc.). If Citrus Lane had started out with a product mix focused on moms from Silicon Valley (or the “Menlo Mom”), chances are the company would end up reaching a very small percentage of those 10,000.

Everything the company does reflects this thinking. I won’t give away all the secrets, but the company’s $25 price point, the product mix, the content and engagement models (heavy on mobile and Facebook, for example, given that many moms spend their days out and about – not sitting in front of a desk) are all designed in the context of how the majority of moms throughout the US think, not just those based in Silicon Valley.

Citrus Lane Sold Out Tweet

The results speak for themselves. The company has grown more than 10X from when we invested a year ago, and has sold out 6 months in a row. Click here to view a recent presentation from Mauria on how she’s building Citrus Lane and why “Social is the Very Essence of our Brand.”

In contrast to the data points in Nick’s article, Mauria and her team launched with a product offering that appeals to the market at large, avoided getting overly focused on the early adopter crowd in Silicon Valley, and they nailed it. Maybe a good topic for Nick’s next article :).

Good Karma

When I tell people I spend 25-50% of my time with early stage entrepreneurs and companies, most think I am crazy – GGV  is a growth/expansion stage investor.  Yesterday I got an email from an entrepreneur that really made me happy – and validated a lot of what I spend my time on.  In short, I’ve been there as an entrepreneur, and I know how helpful good introductions can be.  I really liked what this entrepreneur is doing (though we haven’t met), and introduced him to a few angels who I thought might like it as well.   Per his email below, the intros really helped.

To be fair, it’s not all about good karma – hopefully my intros and his angel funding help him create a great company that GGV and other VC’s can fund 1-2 years from now!

From: <> [mailto:name@name.com]
Sent: Wednesday, December 15, 2010 7:23 AM
To: Jeff Richards
Subject: Thank you

Jeff,

Just wanted to thank you for your introduction to <<Name>>.  When you and I first spoke, you said “I want to help you finish out your round”.  Well sir, you were incredibly instrumental in making that happen and I wanted to say thanks!

<<detail on names / amounts of investment>>

Basically, I’m way oversubscribed and wanted to thank you very much for the connection.  You and I haven’t met so it’s especially important for me to let you know how much I appreciate the good will you showed me.  Please let me at least take you to an amazing dinner the next time I’m in SF.

Regards,

 <<Name>>

This is a Big Deal – WSJ Article on Google Search Results

This is a big deal.   The Wall Street Journal today has an article titled “Rivals Say Google’s Search Results Play Favorites” that I suspect will generate quite a bit of chatter in the media over the next few weeks – and it should.

Here is Google’s rebuttal post on its public policy blog – titled “It’s All About the Best Answers for Users.”

From a personal standpoint, I have to admit I find Google’s new search results easy to use and helpful when searching for a restaurant, etc.   Rather than getting a morass of SEO’d links from all over the web, I get clean and concise results which are much more relevant to my search.

On the other hand, as a free market consumer, an entrepreneur and a VC, I find it troubling.  If regulators didn’t like what MSFT was doing with IE a few years ago, they’ll have a field day with this topic.  Throw this in with the Net Neutrality discussion and it’ll make for decent fireworks on Capitol Hill in 2011 (though I think we all find those public floggings to be more about publicity than anything else).

GGV Mobile Commerce Dinner

We held our quarterly CEO dinner on Tuesday night in Menlo Park, CA.  This quarter’s dinner was focused on mobile commerce + mobile payments.  Terrific group of companies/CEOs in attendance (see below).  A few takeaways:

1) Belief that NFC is going to “be for real” in 2011, with notes of caution.  “Embedded in phones doesn’t mean widespread user adoption.”  “Will take time for users and retailers to embrace.”  “Most likely will see things other than payment as first wave of feature adoption for NFC – think of what Bump does for communication/collaboration.”  This last point was reinforced this week with Google’s rollout of NFC-enabled Places check-in kits.

2) Widespread discussion of how to create value for consumers and retailers.  This crew gets it, IMHO.  “Taking pain out of the transaction for retailers and credit card companies does nothing for consumers.”  “Winners will focus on how to create new transaction value for retailers and ease of use functions for consumers.”  Think – in-store advertisements, offers, prioritized payment options, etc.

3) Our straw poll of “hot company, not your own” revealed a number of really cool companies in the mobile space.  After several years of hope, it feels like we may start to see some scalable businesses built in the mobile business (by startups).  My bet’s on one or more of the companies at our dinner!

4) Like it or not, the “elephants” of the industry will play a key role – banks, carriers, Visa, Mastercard, etc.

Companies attending the GGV Dinner included:

Billing Revolution

BlingNation

Lookout Mobile

LocationLabs

BillShrink

PayNearMe

MopedPayments

PlacePop

Sparq

TrialPay

TapJoy

Trumpet

Dilemma

Vesta

Amazon

RIM

Dell

PayPal

Steelheading on the Klamath

Great trip this past week with Ken Loveless (SVB), Tim Connors (new seed inv fund TBA), Justin Fitzhugh (Mozilla), Brian Lillie (Equinix), Chris Barbin (Appirio), Earl Rennison (Trovix) and Bruce Helberg (SVB).  Lots of great fish caught on 5 weight rods and guide Chuck’s “Roach” fly.  30 degrees and snowing – not for the faint of heart!

Recently Read: Delivering Happiness (Tony Hsieh, CEO, Zappos)

Really enjoyed reading Tony Hsieh’s book Delivering Happiness, the story of how he funded, became CEO, and sold Zappos for over $1B to Amazon.  It’s a great story if you are interested in entrepreneurship, and a well-written read (not all great stories are told well) – 225 of the 238 reviews on Amazon are either 5 or 4 stars. 

Although it gets a little preachy on the customer service angle (there’s a reason – Zappos is one of the best in the world at it), there are some great lessons for entrepreneurs on a) how to build a winning and customer-centric attitude within your company, b) what it takes to survive 10 years of ups and downs in the e-commerce space (might be a good read for entrepreneurs with companies started in the last 18 months), and c) some of the pros and cons of raising venture capital (although Hsieh personally made $200M+ on the sale to Amazon, the book described a scenario where he did not want to sell). 

Although the part about selling under duress from his investors garnered all the headlines, this is actually a good read throughout, with some great lessons on how to build a winning culture that will stand the test of time – whether you get acquired by Amazon for $1B or go it alone.  I’d put it up there with Danny Meyer’s book Setting the Table and Howard Schultz’ Pour Your Heart Into It as recommended reads for entrepreneurs.

Great Quote

Great quote from an entrepreneur we met with recently:

“I can’t figure out Facebook’s privacy policies, so I’m just going to live my life in a good and wholesome way and assume it will all work out…”

Recently Read: Recommended Reading

I decided to make my first post on the new blog one that I would look back on and always feel good about.  Hence, a list of a few of my favorite books.

In an Uncertain World – the story of Robert Rubin, Secretary of the Treasury under Clinton; great read no matter your political views

Freakanomics – makes you think

Too Big to Fail – a riveting blow-by-blow account of the US financial crash of 2008

The Snowball – a bio on Warren Buffett / long read but good if you are a fan

Setting the Table – a must read for entrepreneurs, written by über restaurant entrepreneur Danny Meyer

Lone Survivor – unbelievable but true story of a US Navy SEAL in Afghanistan

Dream Golf – the story of the making of Bandon Dunes by entrepreneur Mike Keiser

Moneyball – terrific book by Michael Lewis about playing the game differently – and winning

House of Mondavi – good history of CA wine, for those who like wine

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