STARTING LINE WRITINGS

Wednesday morning, a day after announcing subscriber growth that outpaced both AT&T and Verizon combined, T-Mobile Mike Seivert joined CNBC for a recap of the earnings call and the Company’s impressive quarter.

Over the past several months, after a year of unprecedented levels of money printing and consumer stimulus in response to the pandemic, totaling over $5T in the United States alone, the media has started to utter whispers about “inflation.”

Eighteen months ago, Starting Line came out of stealth in order to share that we’d closed a $17M pilot fund to back early stage consumer startups building products and services for the 99% economy – companies that leverage technology to be cheaper and better, open up access, and, ultimately, expand markets. Today, we’re pleased to announce that we’ve raised an additional $30M second fund to continue executing on that mission.

Today, I am joining Starting Line as a Venture Partner. Over the past five years, I have helped a lot of founders raise money. Ezra, and now Starting Line, have always been the first place that I send them. They are world class investors, deeply relatable, and they just want to see founders take big swings and win.

Something that most people don’t know about e-commerce companies is that, in their natural state, they are generally not healthy economic businesses. That might not be intuitive given that there seem to be an endless pool of new e-commerce merchants in your Instagram feed and that Amazon is one of the most highly valued companies in the world!

The day that Groupon died was the day that Andrew Mason was fired. While it’s true that post firing, it took a full two years for the stock to recede to Mason era lows and the better part of a decade to fully drift towards irrelevance, his departure removed one of the few technology CEOs who has ever had near prescient understanding of the mobile app ecosystem and the consumers that depend on it.

For much of the past several decades, our economy has been built on “productivity gains,” enabled by the significant growth in the service economy. Since 1980, the number of Americans performing service labor jobs has grown by 25% to represent nearly three quarters of all jobs in America. These service jobs are important because they enable other workers to outsource elements of their lives, which in turn provide more time for the pursuit of productivity and prosperity across all workers. But the fallout of COVID-19 may change this trend markedly.

Every few years, as if on cue, the conversation and media narrative in the startup ecosystem decides to challenge the prevailing wisdom that growth is a startup’s most important function, instead suggesting that startups should prioritize profitability and unit economics, even at their earliest stages. These conversations have historically been driven by a highly visible external catalyst – Fab.com’s implosion in 2012, the 50% multiple contraction for public SaaS companies in January 2016, and, most recently, WeWork.

Today, I’m pleased to share that we’ve closed $17M to discover and fund early stage consumer startups building products and services for the 99% economy – companies that leverage technology to be both cheaper and better, open up access, and ultimately, expand markets. We’re proud to headquarter our fund in Chicago, the heart of the Midwest, and innovate our new brand of geo-inspired investing.

Much of the value in the early web era was unlocked by aggregating data into holistic platforms that improved transparency and made purchasing substantially easier. For example, Expedia, Priceline, and Kayak aggregated data for flights and hotels from across airlines and hoteliers into one centralized experience. Amazon aggregated products that were previously dispersed across retailers and Google aggregated data that was otherwise opaque.

Starting a company is the single hardest professional endeavor anyone can undertake. And I would know. I borrowed against nearly every asset I had in order to launch Starting Line, and, in the summer of 2018 when it appeared my fundraise was stalling out, came within a single month of defaulting on the majority of what my family owned.

There is a growing cancer in many emerging startup ecosystems: a glut of self-congratulatory awards shows and banquets that honor both local advocates of entrepreneurship as well as early stage startup success stories.

Humans are generally stubborn. And changing behaviors is harder than it should be. Yet it turns out there is one proven antidote: actually making that behavior enviable or desirable.

I was listening to Steven Galanis, CEO of Cameo’s, interview on the Tech in Chicago podcast last week and one thing in particular stuck out to me: his emphasis on seeking out world class mentors and his consistency in honing in on particular pieces of advice that became global priorities for the business.