Democratizing VC Investing in Africa

Featured by Aadil, posted in Ideas and Mental Models, Investing

Most people don’t have access to investment opportunities in either emerging markets or private markets. Access to early-stage investing (venture capital), in particular, requires prohibitively high minimum amounts of capital, and emerging markets investing requires specific knowledge and access. While it would be rational (both for diversification and long term gain) for many investors to have part of their capital allocated to these segments, most investors are over-exposed to both traditional asset classes (public equities/bonds) and their home markets and lose out on the benefits of diversification. This needs to change. 

I strongly believe that there is a tremendous market opportunity in African entrepreneurship and technology over the next decade. I’ve been an active angel investor in Africa for six years (and a global angel investor for ten years). I’ve set up a rolling fund focused on Africa to offer more investors in my extended network access to early stage investing in Africa. 

This new fund is my small contribution towards democratizing access to global, private markets which have long been difficult to access. It has some additional benefits, including over 10x lower minimum commitment amounts and 10x lower management fees, and I am personally one of the largest investors, which is all atypical in the industry. 

access to private and global investments

Over the last decade, technology has enabled many notable trends towards democratization and decentralization — in publishing (blogging), television (YouTube), and radio (podcasting) to name a few. As platforms and tools continue to evolve, I believe this trend will extend to more industries (including private investing), and I’m excited to contribute towards this movement.

Access to private investments is becoming increasingly relevant and important; public equities are now more concentrated than ever, and actively managed public funds have been replaced by ETFs. This Morgan Stanley report summarizes the increased capital allocations over the last decade towards private investments driven by technology investing — and these investments have historically been impossible to access for all but the very wealthy, or large institutions (pension funds, endowments, etc).

Source: Morgan Stanley

Most individual investors have a more limited set of assets that they can access and are excluded. This results in individuals being overexposed to the most liquid, tradable assets (e.g. public equities in the USA). 

In addition, individual investors are typically over concentrated in their home markets (real estate, stocks, etc) relative to their net worth – foreign markets are harder to understand, and can be legally complex. I believe that there will be significant value created in global, and particularly emerging markets over the next decade. The data point to more and more entrepreneurs building businesses in their home countries (even after a tier 1 US education) versus trying to build their companies in entrepreneurial hubs like Silicon Valley and the USA. Over 40% of Y Combinator founders are now international, and the vast majority want to build their businesses in their home markets. This trend has been accelerated by Covid 19, and the rise of distributed work which allows for much better labor mobility regardless of physical location. 

Source: Vanguard for public equities 

AngelList (Rolling Funds) have built tools for angels to accept small amounts of capital from external investors, and invest this capital globally which was very hard and expensive previously. My rolling fund was developed to democratize access to investing in private markets (venture capital) in Africa; more details in the next section. 

Investing in VC in Africa

There is significant market potential in Africa – many young people ready to work (median age of 19), increased urban mobilization (45% living in cities by 2025), high smartphone penetration (50% and growing fast) with digital finance access, and increasing capital and talent flows into African technology hubs (e.g. Nairobi, Cape Town, Lagos).

This year we finally saw the beginnings of of technology company exits where seed investors realized over 30x their capital. Stripe bought Paystack ($200M), WorldRemit bought SendWave ($500M) and GoDaddy bought Over.

I am passionate about advancing the technology ecosystem in Africa. I was born and raised in Mombasa, Kenya where my family has lived for five generations. I have a strong network of co-investors and local entrepreneurs, several of whom are investors in this fund. I’m a Kenyan, a product manager, and an entrepreneur, and my experience (including building technology products in Africa as an operator) allows me to have empathy for founders on their journey. 

I’ve been personally investing in technology companies in Africa since 2014 through Musha Ventures, and am now excited to allow others to participate in these deals. Over the last six years I have backed 35+ African companies in 8 countries with an IRR of over 36% (based on future fundraising rounds) and MOI of 1.7x. The portfolio includes companies like Flutterwave, mPharma, Sokowatch, Branch, Twiga and Kobo360.

Here are some of the important details:

  • 10x+ Lower Investment Minimums: Investors are able to invest in this fund with as little as $2.5k per quarter whereas most VC funds have a $250k+ minimums for LPs. Investors in the fund will need to meet US-Accredited Investor requirements to participate. 
  • 10x Lower Management Fees: The fund has a management fee of 0.2%, to cover basic running costs, which is 10x lower than the industry standard. This further helps to align incentives; I earn carry when investors make positive returns. 
  • Alignment of Incentives: I’m personally one of the largest investors in the rolling fund, as this is an extension of my existing angel investing. This is not funded through deferred management fees, it is capital that I wire into the fund just like every other investor.
  • Consistent Investment: I intend to invest conservatively and consistently into companies across Africa over many years. It’s very hard to ‘time the market’ and so we will instead focus on factors we can control like amazing entrepreneurs, evidence of traction, product quality and delighted customers.
  • Investing in B2B: We are focused mainly on startups that serve other businesses — particularly fintech, marketplaces and software as a service technology companies. We may make the occasional consumer investment, but think that business is the foundation that comes first.
  • African Entrepreneurs’ Fund: For entrepreneurs building businesses focused on Africa (and particularly portfolio company CEOs), they are able to invest in the fund with no fees or carry. This is my attempt to pay it forward, and also get even better deal flow from my network due to further aligned incentives.

I believe in the power of being transparent, which I hope will allow me to build new relationships and deepen my current relationships – it’s why I’m publishing this openly. 

Want to learn more? 

If you’d like to get in touch please fill out this short form and I’ll reach out to you so we can get to know each other better. 

If you’d like to see more detail on the fund (market opportunity, detailed investment history and fund terms) please check out the rolling fund page (https://angel.co/v/back/musha-ventures). 

Creating Liquidity in Private Markets

by Aadil, posted in Ideas and Mental Models, Investing

Two of the most significant issues with private market investing are their inherent illiquidity and the unpredictable nature of exits. It means that you need to ‘invest and forget’ when investing in private markets, and is particularly true for angel investing. This problem also applies to equity based compensation for employees at startups, where employees are unable to realize value even when the business has increased in value.

I believed this problem will be solved over the next few years. There will be a number of new options for liquidity in the private markets and early stage investing is going to become even more attractive to even more people. I also think that the US government will make further relaxations to the accreditation rules that restrict investors from making certain investments based on their net worth or income (originally intended for their protection).

For late stage (pre-IPO) private companies there are a number of platforms (e.g. Forge, EquityZen) working on the liquidity problem, but very little is automated. Typically ‘blocks’ of equity become available either in secondary offerings (existing holders, like an early employee selling their stake) or when early investors have pro rata rights to a future fundraising round and can’t fill it themselves. I’ve used these platforms from a buyer’s perspective (and explored as a seller) and it’s all fairly manual right now, and the products are mostly a nice user interface. There are also more traditional alternatives like Setter Capital who don’t claim to be a technology platform.

In real estate, companies like Cadre are both providing access to large real estate projects to small investors (breaking up allocations into smaller chunks), and providing “windows” where investors on the platform can sell portions of their positions (every 6 months or so). This both increases the number of investors who can invest in the asset class (lower minimums) and improves the exit options for investors who would typically have to hold their equity position for 5-10 years.

In the future, I expect platforms like Carta and AngelList to lead the way in creating a true ‘marketplace’ for private securities. Carta just announced their new liquidity platform CartaX, a private stock exchange which is an awesome innovation launching in January 2021. It’s a natural extension of their business model, and I’m excited to try it out. Angellist will also continue to innovate, especially because of their SPV and fund offerings, as they hold a lot of private company stock (and have access to a lot of data).

There are some problems that need to be solved such as restrictions on employee stock, rights of first refusal and companies at the early stages desiring control of their cap table. I think these are all surmountable, and most of the trading will start with late stage private companies first, where these concerns are less relevant.

Overall, these developments make me even more excited to continue angel investing; as private company stock becomes more liquid, it’s value will increase (in addition to normal value creation through growth). Ultimately, it means that more investors will invest in private companies and they can have more of their capital ‘working’ (and need less of a cash buffer) because they know that there will be a liquid market in case they need the capital.

Making a VR Film

by Aadil, posted in Product Management, Projects

In 2017, I made a virtual reality (VR), live action series with a friend (who I worked with at Pocket Gems) who was the creative visionary and conceived the idea. I was new to both VR and filmmaking and this was a cool opportunity to learn a lot in a time boxed project (8 months) with a concrete deliverable.

We made a 4-part series called ‘Playback‘, which was fully funded by Oculus Studios (Facebook). Over 15k users downloaded and watched the series and it was one of Oculus’s featured projects in the Oculus App Store. We were also selected for the Google Jump Start Program and which gave us access to a Odyssey 360 Camera.

Thesis

Our thesis had a number of components, and we were trying to figure out if we could drastically improve the quality to cost ratio for VR film production by introducing constraints. Ultimately we were looking to create a platform and process for profitable VR content creation (‘Netflix for VR’).

  • First Person: The series is shot primarily from the perspective of the protagonist, which allows the viewer to experience the story from their perspective. We thought that stereo (both eyes have a different video) was important for realism as it mimics our own eyes.
  • Narrative Stories: Focus on storytelling and include some light interaction and choice to give the user agency and improve immersion. Black mirror tried this approach with their Bandersnatch Series (which was produced after this).
  • Freemium: Start with episodic content with the first episode free, together with an upgrade path to unlock the rest of the experience (learned from our time working on Episode)
  • Technology: Build software to create proprietary production techniques that increase the quality and reduce the cost for even low end Android devices (increase the size of the audience).

Pitch

This was our short pitch for the production, called Playback:

“Playback is a revolutionary VR miniseries that pushes the boundaries of narrative storytelling and viewer interaction. It’s a cautionary tale about life-changing technological advancement and the personal and societal implications of its adoption.

You experience life through Alex’s POV as his company is about to launch their new, groundbreaking product: a device that records moments and allows people to re-live those moments in all five senses

As the story progresses, the boundary between Alex’s technology and his own reality begins to fall away, pressing the viewer to question what their own reality will mean as our world becomes increasingly virtual.”

Process

The entire process took around eight months and was broken up as follows:

Month 1: Pitch and Funding

  • High Level Pitch: We wrote up a high level pitch and deck for the Oculus team who then approved a $50k budget for Playback (over another Zombie concept).
  • Budget: Prepare high level budget to make sure that we could actually produce the experience with the $50k.

Month 2-3: Writing and Production Process

We split up the creative part (writing and character development) with the production part (technology, team, production process) and worked on each in parallel:

  • Overall Workflow: How would our overall process work from the point of filming to getting it in a users hands. We went through this entire flow, including creating an app and deploying it to the app store.
  • Vertical Slice: We picked a single scene and tried to make it look ‘production ready’ with a very short test clip. This set the quality bar for the production:
  • Story arc and characters: The pitch needed to be broken down into a story, and the characters needed to be developed.
  • Detailed Script: After the story, a detailed script with dialogue was prepared for 4 episodes, including choice/branching narrative.
  • Core Team and Contractors: We needed to assemble a small team (which was mostly unpaid) and the core team included our Directors of Photography (Sensorium) an NYU film student, and a visual designer who worked with us at nights and weekends.
  • Technology experiments: We ran lots of experiments with both hardware (e.g. cameras, rigs, lighting etc) and software (e.g. Depthkit) to figure out some of the tools that we could use during production.

Month 4: Pre-Production

  • Casting: We decided to hire SAG Actors (under New Media) which meant we had access to better actors, but had to follow certain guidelines. We looked at 100+ audition tapes and 3 finalists for each major role.
  • Prepare for shooting: This required a lot of work – we needed to pick venues, rehearse with actors, design the sets, and create very detailed shot lists to make sure we got all the footage we needed.
  • Shoot week: We planned to shoot the whole series in one week. This was a very structured and organized period starting early in the morning and ending late at night. Our “team” included over 30 people working at different points during the week and this was the most “expensive” part of the production process.

Month 5-8: Post Production

Post production took almost half the total time, and we underestimated how long this part of the process would actually take by a fair bit.

  • Shot selection: We reviewed all the raw footage and picked the shots that we wanted to use for the series.
  • Stitching: For stereoscopic VR, we needed to ‘stitch’ the video and image files together and make sure that each eye had an image that did not make it look like the user was seeing double (very off putting) which was difficult and time consuming.
  • Engineering: We added components like a ‘cyber world’, user AR interaction, branching narrative, and a number of performance improvements which required focused engineering and design time.
  • Film festivals: We chose a few festivals and created pitch decks and submission entries for them.
  • Launch and review metrics: Once launched we needed to analyze the metrics and user behaviour and compare to our original hypotheses.

Bugdet

We had a strict budget, and part of our thesis was to see how high we could push the quality bar with a fixed, restricted budget (comparing ourselves to experiences with 20x+ bigger budgets). We raised $50k from Oculus (as a grant), and we ended up very close to our original budget.

We prepared a detailed budget with 10% flex built in, and tracked the costs vs estimates meticulously in a spreadsheet. Most creative projects go over budget, and having this kind of discipline allowed us to keep costs under control and scrutinize all expenses carefully.

Given that our thesis was to try to create high quality content for a fraction of the price that was typical in the industry, it was important for us to control for costs carefully.

Technology

AR Interaction
Photogrammetry – texture mapping to create a ‘cyber world’
Stereo rig for filming

We tested out a number of different technologies in the production:

  • Stereo 4k footage: Each eye has a different video (mimicking our normal eyes) at 4k resolution which makes it feel more real to the user. This is hard to achieve on low end devices.
  • Proprietary image + video cut out system: In order to get the quality of video that we wanted, we built a system to constrain the ‘action’ to a small part of the scene and overlaid video on top of a still image. This required a very precise shooting and post production process that we created ourselves.
  • Photogrammetry: We mapped the inside of one of our scenes (3d + textures) to allow transition between live action scenes and a computer generated world seamlessly.
  • Volumetric video: We used Depthkit to capture volumetric video (3d), for a scene with a ‘ghost’ in the virtual world.
  • AR Interaction: At the start of the first episode we created a HUD which the viewer could interact with – read emails, the news etc which added to the sci fi and first person interaction.
  • Branching Narrative: We created choice where users could send different texts (via their AR HUD) which changed the outcome of the story depending on the choices they made.

Festivals

We created something that was both innovative in the way it approached story telling, as well as the technologies that we implemented for VR. We decided to apply to a few film festivals (Sundance, Tribeca) in their VR experiences segments. We got fairly far with Sundance but were ultimately not selected.

I went to Sundance in 2018 anyway, and had a great time skiing and watching movies. Our Directors of Photography (Sensorium) had another VR experience which was featured, so it was fun to see them experience some of their other work.

Outcome

Here is a short video showcasing the first episode (although it’s much better experienced in VR).

We released the final product in the Oculus App Store. We were featured and had reasonable download and view rates (over 15k people). Users got the first episode for free, and had to pay to unlock the next three episodes. There were some bugs in the upgrade process that negatively impacted our ratings but for people who were able to upgrade, many seemed delighted.

We were still a step function off in terms of both addressable audience as well as conversion to payer rates to justify our original hypothesis and invest further. Neither of us are still working in VR.

Learnings

  1. Scope creep: This was a classic mistake that we should have realized earlier (as we’ve done this many times in games) but we got too excited about some of the tools and technologies and probably added too much (e.g. volumetric video capture, branching narrative) that was not necessary to test our original hypothesis.
  2. Stereoscopic vs. Monoscopic: I think we should have killed the stereoscopic requirement early in post production. Stitching of video so that it does not look warped or incorrect for both eyes is a real pain, and this would have saved us a few months as well as allowed us to ship a more polished experience overall.
  3. Developer experience: We built most of the application in Unity and used tools like Blendr, Adobe Premiere Pro as well. The workflow was pretty cumbersome and it was fairly manual to create scenes and test out in VR. We could have built a lot of automation ourselves but it was not worth it if we were just doing it for one series.
  4. VR User Experience: At the time, we were optimizing for users using Oculus Go devices (Android phones strapped to your face) and this entire UX was terrible (buggy, battery hog, performance and storage issues etc). Standalone devices have improved the experience substantially, but we’re still not at the stage where this will be mainstream.
  5. Running out of energy: Towards the end, it became a real grind to get it out the door. Everyone was tired, and the project took 30% longer than any of us expected.

Overall it was a great learning experience but it made me realize I don’t want to work in the ‘content creation’ business especially in entertainment. I much prefer working on tools for entrepreneurs and business, and hope to spend more of my career building technology for this audience.

Hiking the Annapurna Circuit

by Aadil, posted in Travel

My wife and I hiked the Annapurna Circuit in April 2018, and it was one of the best trekking experiences of my life. Each day felt different, there was sheltered accommodation, and the hiking through the largest mountains in the world was truly epic. On the highest day we hit 5,416m (17,760 ft) via the Thorong La Pass. We preferred this trekking experience to Mount Kilimanjaro because it was less of an ‘up and back’ and felt more relaxed.

Here are a few recommendations:

  • Guide/Porter: You don’t really need a guide or a porter but it’s a nice way to support the locals, and is inexpensive. A porter is more useful than a guide. On some of the harder days, carrying a day pack makes the hike a lot easier than carrying all your gear. You can sort this out easily when you arrive into Kathmandu, through your hotel.
  • Gear: Don’t overpack. You can re-use good quality ski gear (here are my tips – make sure to layer) and the packing list is similar for clothing for Kilimanjaro. A good sleeping bag is essential to stay warm on the huts on the way. Pack some blister pads. Use hiking poles.
  • Add on the Ice Lake day hike in Manang: Stay two days in Manang. You can do laundry here and watch movies at the ‘cinema’. The Ice Lanke was a really awesome day, albeit a little challenging (4,600m and about 8 hours long). One of my favourite days of the trip. We were supposed to go to Tilicho lake but the path was closed because of avalanches.
  • Complete the “half circuit” and fly back: Our trek was 15 days, and we started in Besishar and ended in Jomsom, where we flew to Pokhara a little over half through the full circuit. A lot of the research shows the last half of the circuit as a bit of a ‘grind’ with cars on the road adding to a less pleasant, more dusty experience.
  • Hang out in Pokhara after to relax: This is a chill, hippy city in Nepal. We had massages, good food, did some yoga and a few relaxed hikes and boat rides. We also treated ourselves to a nice hotel. It was wonderful to spend 2-3 days here relaxing after the trek.
  • Lodging: Accommodations are all pretty similarly priced in the villages along the way. If you arrive earlier, you’ll get a better pick of the available rooms. We were also able to “shower” (mostly out of a tap or bucket) every few days.
  • Food: Pack some chocolates, or other tasty snacks but know that you’ll have hot meals for lunch and dinner along the way and plenty of places to stop for tea. I’d recommend eating mostly vegetarian, and mostly Dal Bhat.
  • Leisure: Get a local sim card so you can communicate on the trail (no-wifi) and bring your Kindle to read in the evenings. Bring a deck of cards too. The scenery is epic but modern phones can probably suffice, unless you’re an avid photographer.

I also like the Kathmanduo blog which is well written and has a lot of details, but is a little old (2011).

Here are some photos of the trip!

‘Fresh Faced’ early in the trip
K2 In the Background (I think)
Ice Lake Hike

Epic Views Every Day
Vistas
Tea House Life
Little Bridges on the pass
Throng La Base Camp – cold!
Throng La Pass – the highest day
Throng La Day
Last few days of the trek
Unhappy to be on the tiny plane

Productivity Tip – Text Shortcuts

by Aadil, posted in Stuff I Like

My favourite recent productivity tip is using text replacement which is built into to MacOS natively (System Preferences -> Keyboard -> Text). These rules also sync with iOS so you can use it on the go with your iPhone. It’s native in the operating systems so you can use these shortcuts in whatever program you’re using (iMessage, WhatsApp, Email, Google Docs etc).

I’ve set up about 20 text shortcuts and use them many times a week. I set up the shortcuts to begin with “>” which makes them hard to trigger accidentally and also lets me to use words/phrases that are easy to remember. Some examples:

  • Phone number: >ph
  • Address: >add
  • Intro thank you and to bcc: >intro1
  • Intro nice to meet you: >intro2
  • Schedule a call with me: >schedule with Calendly link

I had Alfred (paid product) for this previously, but it’s a step function worse because it’s not deeply integrated with both MacOS and iOS. The only benefit from Alfred is that it supports Rich Text (formatting) and the ability to add text with links – I now just put links in brackets. I has previously also used canned responses in Gmail but this method is superior.

It does take a little bit of time to set up and get familiar to using the shortcuts but once you get going it’ll save you a ton of time.

Trends Accelerated by Covid-19

by Aadil, posted in Distributed Work, Ideas and Mental Models

Covid-19 has led to significant changes in how we live, work, and interact with each other. In some cases, they have accelerated trends that were already in motion, and in other cases forced changes that we did not anticipate or expect.

In the next few years, I think we will go through a rapid pace of innovation and re-imagination powered by entrepreneurs, and here are a few trends I’m excited about and interested in exploring further.

Distributed Work

The best summary I’ve read on the acceleration of distributed (not in person) work is this one from the CEO of Automattic, Matt Mullenweg where he talks about change happening slowly, and then all at once driven by this catalyst. Automattic has been fully distributed since its inception, and Matt has been a champion of distributed work for years and the benefits of accessing a global talent pool, and working asynchronously.

The #WorkFromAnywhere Podcast series led by the folks at Greylock is also excellent and CEOs of companies like Box, Quora, Okta, Figma and Zapier speak about their transition to working from anywhere.

I’m particular excited about the tooling that will be developed, both in terms of specific software as a service products to drive much better distributed collaboration, but also the underlying plumbing that ties all these tools together.

ECommerce

This article from Ben Evans on the growth of eCommerce is a must read. The UK went from 20% to 30% eCommerce penetration and analysts say that Covid has accelerated the growth of eCommerce by 5 years. This is dramatic, and will change the way may of us purchase, discover new products, and how creators distribute their products.

This also changes the nature of distribution/logistics and the entire supply chain. Companies like Shopify and Amazon have doubled their market cap (adding over $60BN, and $850BN (!!) of value respectively to shareholders since mid March 2020).

Major Cities

The nature of major cities and concentrated urban areas is going to evolve. I wrote about my thoughts on megacities recently here, and I also liked this piece from Fred Wilson about how a reset was much needed in NYC and how the city could evolve into something better. Many of my friends have ‘accelerated’ moving to their ideal living areas and and left places like NYC and London. My wife and I, having just had our first baby, are asking ourselves the same question – is it worth staying in NYC if we don’t intend to stay longer term? The pandemic has forced a conversation we likely would not have had for a few years.

Flexible Work

I believe that the best creators and experts are no longer going to need a ‘normal job’ and will be able to work flexibly and monetize their unique skills talents much better than before, and this will be socially acceptable and maybe even celebrated. I like the writing from Li Jin (Atelier Ventures) about the Passion Economy and Unbundling of Work from Employment (which I also opined on here).

Startups will create innovative tools, and platforms to help craftspeople to discover projects, collaborators and showcase their work (e.g. Contra). Much of the benefit that we get from a ‘normal job’ (e.g. competitive healthcare insurance plans, retirement accounts, etc) will also be available to creators through saas products.

Building Relationships

As humans, we yearn to build new relationships and deepen relationships with folks that we already know. Traditionally we’ve built these relationships in person with repeated interactions and meaningful collaboration on projects. Being forced into lockdown has forced us to explore alternatives.

I’ve personally been experimenting with platforms like Enrich (curated network of similar executives), Fractal (1×1 matching with other product people), Village Global Events (with startup founders and investors), and am starting the On Deck Angel Fellowship soon. These are all digital communities with fairly niche audiences, which I think will become more common.

I’m hoping that these will lead to meaningful relationships and collaboration and also improve the chance for serendipity despite not being able to spend time with folks physically. I’m excited that these platforms could open up the possibility of meeting interesting people all over the world, and not just limited to my place of residence.

I’m not sure how this will play out with larger conferences, where most of the value is in relationship building and improving the probability of serendipitous connections often through extended hang out time (often over meals and drinks). I expect that recreating much of the value will be possible, but will require some first principles thinking.

In my own recent experience, I wrote about how the funeral for my grandfather was actually much more inclusive and rich because it was virtual and allowed for more people to attend that were close to him (like his sisters).

Personalized Services

Folks who provide coaching, classes or specialized services are all going through a similar, accelerated transition.

Companies like Peloton have successfully taken spin classes and made them virtual, allowing both synchronous and asynchronous (on demand) classes with world class instructors. Each class can now be attended by step function more people which greatly improves the ROI for each class.

Experts providing specialized, personalized services like physiotherapy, child psychology, lactation consulting can all increase their addressable customer base and people who are in need of very specific services can access a larger pool of specialists which is better for both groups. They both need tools to make it easier to discover each other, and improve the experience of booking and transacting (e.g. Ribbon Experiences).

Digitial Payments and Services

Digital payments and digital services (e.g. digital hr, or payroll) to help businesses transact with their customers and run their teams will also see more new users, and increased adoption. I think these products will be ultimately sticky even after Covid-19 because they function better both in person and remotely, and allow for more flexible customer and employee interactions. In my personal investments in these areas I’ve seen increased volumes and good retention through the pandemic.

These are just a few areas where I’ve personally observed changes in my own life or with folks close to me, and I’m excited to learn more and closely track how these trends evolve.

Hiring Product Managers at Scale

by Aadil, posted in Distributed Work, Product Management

In this post, I summarize a process that I recommend for hiring product managers at a midsize or growth company, adapted for a distributed hiring environment (most applicable to a company that will hire multiple product managers).

I’ve hired and trained over 40 product managers over the course of my career, and this draws on my experience as a product hiring manager and team lead.

Internal buy in and scope of role

When hiring product managers (PMs) at a mid size company the most important thing is to have internal support from the executives and the design and engineering partners. There should be a strong desire to hire PMs to help build better products in a better way and to bring in more structure and systems to the product development process.

Once there is buy-in from these stakeholders, organize the teams into sensible working groups (e.g. by user journey such as onboarding/growth or by key metrics such as conversion/retention or by product line).

I prefer a matrix structure (although has tradeoffs) where PMs ‘own’ each of these areas in partnership with a design and engineering lead (with around 5-10 engineers per PM, depending on the project). I also suggest that engineers and designers report into their own functional leads and PMs direct the scope and priorities of the projects.

Hiring process

It’s essential to have a clear hiring process and system both for the sake of your internal team and for the candidates. Most companies are incredibly disorganized about hiring, but a little bit of work can save a lot of time in the future, especially when hiring many folks for the same role.

Internal Team 

  • Recruiter: There should be a consistent point of contact for the candidate during their application process – ideally a recruiter. The recruiter communicates with the candidate, lays out the hiring process clearly, and moves them through the process. They act as a liaison between the hiring manager(s) and the candidate. They often do the initial resume screens and have an essential input into hiring because they get to know the candidate so well. 
  • Hiring Manager: The hiring manager is the person that is hiring for the role. They are the person who ultimately makes the decision to recommend the candidate as a ‘hire’ or ’no-hire’. This is typically a senior product leader.
  • Interviewers: Each interviewer should have a clear set of criteria that they use to evaluate the candidate. The interviewers should be excellent at the functional areas that they are evaluating candidates and hold the quality standard for the organization. The best people should be involved in late-stage interviews and this should be a core part of their job description.

Hiring Process

  • Resume screen: Internal and external candidates should submit a Resume / LinkedIn profile which should be screened upfront (recruiter + hiring manager). Candidates who pass this phase should move to a conversation with the recruiter, followed by the hiring manager.
  • Interviews: Interviews should consist of a standard set of, very well calibrated questions that can be asked by a variety of interviewers representing the different development functions (e.g. design, engineering, product, marketing). A structured hiring guide improves consistency and calibration, and can reduce bias from the hiring process. 
  • Central Tool/ATS: Interview feedback should be stored in a central place/tool (e.g. Greenhouse or Lever) and each interviewer’s feedback captured clearly (with a hiring recommendation). This allows us to both evaluate interviewers and the candidates – e.g. some interviewers bias towards higher or lower scores.
  • Written Exercise: If you are hiring in a distributed environment, try to find candidates with strong communication skills (particularly written skills) and clarity of thought. All candidates should complete a written exercise as part of their recruitment process which could include:
    • Break down a product you love – what you like, what you don’t like, how you would make it better (1 page)?
    • What is your favorite technological shift and why?
    • Write a ‘product spec’ to address a specific problem that the company has (better if it is a real problem).
  • Trial: If possible, ask the candidate if they would be open to a two-way trial (which is compensated) where they try and solve a real problem and collaborate with an internal team. This is time consuming (20-40hrs for the candidate, 5-10 hours internally) so very few candidates should go through this process if you decide to incorporate trials. You may filter out some good candidates because of the time commitment, but candidates who join are more likely to be successful.
  • References: I think that final candidates should be referenced checked by the hiring manager, especially if there are open questions. Backchannel references are the best (but avoid people at their current company) otherwise, ask the candidate for references. Here are some questions that I like:
    • How do you know the person? (gauge depth of relationship)
    • What are their strengths?
    • What are their areas for development?
    • What percentile would you put them in relative to similar folks in their position?
    • Would you hire them again?
  • Decision: For borderline candidates, the panel of interviewers should have a sync or async discussion – e.g. a private recruiting slack channel for hiring. The hiring manager is ultimately the decision maker. From start to finish, try and keep this process fast (e.g. under one month, and track the throughput).

Candidate experience

Candidates should have a great experience, understand how they are being evaluated and have consistent clear communication through the process.

  • Hiring Criteria: Candidates should understand the criteria by which they are being evaluated and the steps in your hiring process – this should be a templated email or a public blog post that you can send to product candidates.
  • Point of Contact: Candidates should have a clear point of contact (ideally the recruiter), to ask any questions about timelines and next steps.
  • Acceleration: If a candidate performs very well in early interviews or comes in through a trusted referral, they should be bumped up to the top of the queue or potentially skip steps so you don’t lose great people because of slow process.

How to Assess

When hiring, it’s important to be explicit about the skills you are looking for, and get a sense for where candidates are truly exceptional.

Here are the dimensions that I think you should use to assess candidates in the interview process:

  • Analytical Ability: AB Testing, Interpreting metrics, Data-informed decision making.
  • Product Judgment: System design, UX design to solve user / business problems.
  • Leadership: Inspiration, Influence, Empathy, Communication.
  • Execution: Prioritization, Getting things done when you say you will.
  • Technical Ability: Earn trust and respect from engineers as partners. Some roles will have a higher technical bar than others.

Each person on the interview team (3-5 people) should be responsible for evaluating the candidate along a subset of the interview criteria to create a balanced view. Ideally interviewers would ask the same questions to each candidate to calibrate their answers. I suggest that each interviewer test at least 2 dimensions of the list.

I suggest looking for candidates with an exceptional ‘A’ level strength, particularly in harder to learn skills like analytical ability and product judgement. I much prefer ABC candidates over BBB candidates because it’s possible to design complementary teams with AAA skills in aggregate.

Candidates should also demonstrate strong domain knowledge, and passion for the product, company and the customer. If they have prepared, it goes a long way (and it’s surprising how many candidates are ill prepared). If a candidate teaches me something new, or helps me challenge my own assumptions, that is wonderful. 

Appendix: Other resources

Google Criteria

  • Product Design: User experience, Design driven problem solving.
  • Analytical ability: Fluency with numbers, Using data to drive product decisions, dashboard design.
  • Technical ability: Understand technology and fundamental computer science principles.
  • Strategy: Go to market, Competitive analysis.
  • Culture: Googliness, Kindness, Leadership, Empathy.

Facebook Criteria

  • Leadership and Drive: Influence, Self-starting, Motivation, Persistence.
  • Execution: Goals, Metrics, Prioritization. Understand, Identify, Execute.
  • Product Sense: A design exercise to solve a specific user or business problem.
  • Engineering fit: Do engineers want to work with you?

Product Manager Articles

Here are a few articles about product management as an appendix, in case they are useful.

Hiring your First Product Manager

by Aadil, posted in Product Management

When you’re running a small startup, you may ask yourself when to hire your first product manager and what you should look for in the candidate. This is a question I get from founders fairly often.

Startup founders in technology companies usually are great at least one of the following things; making stuff and selling stuff. Few individual founders are great at both, but most successful founding teams are excellent at both.

In the early stages of your startup, when you are trying to find product-market fit, you do not need a product manager. As founders (at least one of) you should be the product people at the company – obsess about the product, spend time with customers, drive the product roadmap, etc.

When you have found product/market fit and you are starting to scale, is when you should hire your first product manager. This person can run the day to day product development and allow you (as the founder) to step back and focus on fundraising, product strategy, hiring, and important partnerships. This person should bring you significant leverage. 

Many founders think they need a ‘Head of Product’ first – I don’t think that is right. I would not hire a super experienced product person who expects high compensation, owning the entire product vision and strategy or brings in ‘this is how we do things’ from their background.

Instead, I would look for an early/mid stage in their career, who is a strong executor and is high potential and can grow with the company. This person should be passionate about your product, users and you should be excited about mentoring and working closely with them (as founder/CEO). 

If this person ends up doing a great job at the execution, they can take on more product strategy from you as you build mutual trust and respect. If they are not able to scale in this role, you can bring in more experienced folks to lead the organization. Replacing a product manager is much easier and less expensive than a head of product.

My Home Office Set Up

by Aadil, posted in Distributed Work, Stuff I Like

My current home office set up is a little bit makeshift as we are living with our in-laws (temporarily). I figure that a lot of people would be in a similar situation and thought it would be worth documenting and sharing as I’ve already helped a few friends and family members with their home office.

I’ll share the details of my set up and then summarize some practical tips that apply to most people.

Home office Front View
Home Office Side View

My Set Up

My set up is optimized for using a Macbook Pro 13 inch as the computer, and so this will only really apply to mac users.

  • Monitor: In my opinon, this is the most important part of your setup. I have an expensive LG 5k monitor with a built in HD camera ($1,300). If I had a less generous monitor budget from work, I’d get a 4K monitor, like the Dell one ($500) I recommend below, with an additional HD camera clipped to the top.
  • Keyboard: I use a mechanical keyboard as I like the action, and it makes me feel like more of an old school gamer. I use the Keychron K2 Wireless Keyboard ($80) with a red switch which is a bit quieter than the blue switch (although the louder ones are more satisfying).
  • Mouse: I use the Logitech MX Master 3 wireless mouse ($100). It’s super comfortable, has lots of customizations and is way superior in ever way to the Apple mice in my opinion.
  • Headphones: A great pair of headphones is essential. I use Bose QC 35 II noise cancelling bluetooth headphones ($280) just because I’ve had them for 5 years. They are really comfortable and have great sound, but the microphone sucks so use them with the wired mic if you are not going to get an external mic. If I was to replace them, I’d go with the Sony WH-1000XM3 ($240) which seem to be a one of the better picks in the market right now.
  • Samson G-Track Pro mic: I’d recommend either my Samson G-Track Pro ($130) or the Blue Yeti (Nano, Yeti or X are probably all fine) which are USB condenser mics and easy to set up and use with great audio. Watch out for room echo – if this is an issue, switch to a USB headset mic, like a recommend below.
  • Desk mat: I really like having a desktop mat. They are inexpensive and increase the friction for your keyboard and mouse keeping them in place while giving you a nicer surface to rest your hands. I use this Yikda Leather Pad ($14).
  • Stand for monitor: It’s important to have your monitor a t the right height and I like a stand that lets me put my laptop under the monitor to save some desk space. I just picked one from Amazon and ended up with this AboveTEK Stand ($45).
  • Wireless charger: I use this Anker one ($12) which is useful to charge my phone and AirPods without a lot of additional cable clutter. I like just being able to drop my devices on the pad to charge.
  • Desk plant: Plants can apparently reduce stress and improve mood. I got these succulents from Lula’s Garden as a gift and like having them on my desk as they are low maintenance as well.
  • Candle: I love having candles on my desk. I find them soothing and like the smell. I like the Aquiesse candles ($32) as they are both high quality and last a really long time. Highly recommend.

Note: my desk and chair were already in the house, and repurposed for my home office.

Universal Advice

Here are a few of my most practical tips when setting up your home office:

  • Monitor: Get a decent monitor (4k), you can get pretty excellent ones for the Macbook Pros like this 27 inch Dell 4k (~$500) with a USB-C cable that can be used to both charge your computer and be the display/data connection. I bought this for my father in law and think it’s great. This is the thing you stare at all day, so don’t skimp here. Make sure the monitor is positioned high enough so your eyes are in the center of the screen when you sit upright.
  • Video camera: Good quality video helps you seem clearer because you are! The cameras on Macbooks suck, and are 720p, not even HD, so if you do get an external monitor then definitely get a camera that clips to the top of your monitor. I use my fancy camera or the built in camera on my monitor. The one I see most recommended is the Logitech C920, but I’ve not used it myself.
  • Light source: Face a light source with either a lamp on your desk to light your face or a window. If you are by a window, make sure that the sunlight does not hit your face directly as it’s annoying and distracting.
  • Audio: Good audio is so important for distributed work. I did a full write up comparing a bunch of options here. A wired USB headsets with a mic that is a consistent distance from your mouth is the best option for most people. This is one we recommend at Automattic. Here is another audio comparison from Matt, the CEO of Automattic.
  • Chair: I’m still researching the best value chairs (my current one was lying around the house), so don’t have a practical suggestion but you sit in this all day, so get something comfortable and adjustable that allows you to have good posture.

The rest of the stuff is really dealers choice in my opinion, and icing on the cake. For a long time I did not have an external keyboard and mouse and just used my Macbook keyboard (or mouse), which worked really well and was space efficient (see below).

Using the Macbook as a second screen and keyboard

I also use a mirrorless camera (see below) but it’s a bit less frictionless so I don’t use it all the time. I set up the camera above my laptop screen, with the camera above the screen because this keeps my eyes closer to the lens without it looking like I’m very close to the floor. It also helps me focus on the conversation better.

With the mirrorless camera setup

Hope this helps you level up your WFH set up, and let me know if you have any tips for me. Oh. and make sure you have good internet, or none of this really matters 🙂

Evolution of Megacities

by Aadil, posted in Ideas and Mental Models, Investing

I live in New York City, and have been thinking about how I think large, densely populated cities (in developed markets) will evolve after Covid-19. I don’t think the soul of the city will change, and reading Here is New York (by E.B. White) from the 1940’s affirms this, but I do think the city will go through an evolution over the near to medium term.

New York City has gotten more and more expensive which has resulted in it shrinking (net population loss). The growth of the suburbs continues to be good (across the US) particularly from immigrants who tend to have less disposable income and seek better value for money. This podcast episode with Alex Danco and David Perell also is a fun discussion on the subject that is worth checking out if you’re interested in the subject.

The continued rise of eCommerce/delivery, distributed work and autonomous vehicles, are all shifts that are likely going to accelerate changes in megacities (some of which were catalyzed by physical distancing).

Fully distributed or partially distributed is a particularly powerful trend as many technology and finance jobs may no longer require living in places like NYC as a prerequisite but can still pay the same wages.

Here are a few of my predictions:

  • Offices centered around collaboration, not individual contribution: Office in the future will look different. I imagine they will have more meeting space, and more collaboration space versus single person desks designed for individuals. These collaboration spaces will be shared, and only a portion of the company will be in the office on any given day.
  • Less office space, more (and larger) residential spaces: Individual contribution work will happen outside the office, and much of it from home or other flexible work spaces (coffee shops, shared office space). Office space will be repurposed into residential space or other gathering (e.g. bars or restaurants) or ‘multipurpose’ spaces. Homes will be larger to accommodate flexible working spaces or dedicated offices.
  • More young people, more old people and fewer families: Young people love densely populated places, and so do healthy empty nesters. Megacities will have more of them particularly as empty nesters are fitter and healthier for longer. The food, culture and nightlife scene will become even more vibrant.
  • Growth of the suburbs around megacities for families: Families all move outside the city epicenter, where dual-income parents can still easily go to their offices for occasional collaboration sessions (e.g. 1-2 times a week) but spend most of the time working from their home. The quality and comfort of these homes becomes even more important for families. The transport from homes to offices becomes even easier and faster because of driverless cars (5-10 years away).
  • More pedestrianized, car free zones, and even more delivery: Purchase of ‘staples’ happens more and more via delivery vs. in person and ares of the city (e.g. Flatiron) become fully pedestrianized and cycle zones with delivery permitted during certain windows.

I don’t have any real unique insight into this topic, beyond personal interest. I’ve spoken to a number of business owners who are not extending their office lease, and also a number of friends (particularly with families) who are leaving the city for the suburbs.

I would personally not invest in real estate in Manhattan over the next few years until we see how it’s going to shake out. I think that investing in the city suburbs, and in ‘up and coming’ cities with net population growth, growing income/capital and with great culture but lower cost of living is likely still a solid call.