June 6th, 2013 NYMobile Startups

On Thursday, June 6, 2013, OLC attended NY Mobile Startups event featuring Josh Kopelman of First Round Capital, a venture capital firm that specializes in providing seed-stage funding to tech companies. First Round Capital was founded in 2004 and its headquarters is currently located in Philadelphia. Chieh Huang was the moderator.
Josh Kopelman is known as the founder of Half.com, which has since been acquired by eBay for $350 million in 2000. As the Managing Director of First Round Capital, he is an investor, director and advisor to a variety of businesses.
Chieh Huang: Can you tell us about Half.com and how you went about it?
Josh Kopelman: I became a VC almost accidentally. I was a huge user of eBay in the early 90s. eBay was the most friction-filled platform and it was the most painful process ever. This was back in ’98. The No. 1 area on the internet is ecommerce. We kind of said, “Wouldn’t it be neat to bring p2p marketplace to books, music and movies?” It was basically Amazon, except not warehouses.
CH: You led the way in guerilla marketing. What are some examples?
JK: I ran an ecommerce company with virtually no ads. We were competing with Pets.com, who had the sock puppet and was spending almost $500 million on ads. We orchestrated from start to finish to push our company out into the media. We did all types of crazy things trying to figure out the right type of media.
CH: How has the entrepreneur world changed?
JK: You have the ability to do things at scale far easier than before. You have cloud, SSDs—the tools entrepreneurs have at their disposal is so powerful. I’ve seen the democratization of entrepreneurship. You can get something to market for so cheap. That has changed the balance.
CH: How do you see wearable technology changing the world?
JK: I think that Google Glass will be successful in niche verticals before it comes commercially successful. But there aren’t any customer use cases yet. Powerful carriable computers are changing the way we live.
CH: Most startups these days are all about software—what do you think about it bringing prices down?
JK: We are all about lower cost efficiency. We’ve stayed away from hardware-based companies and games. We thought it’d be better to find game companies in later stages. But now, we’re seeing the price of hardware go down. We’re really seeing interesting advances in hardware.
CH: What’s your favorite early-stage mobile app that you didn’t invest in?
JK: Have you heard of Dark Skies? It changes the way you think about going outside. It warns you 15 minutes before it rains outside. Apps like this and Uber are doing something fundamentally different than what a PC can do. For us, when we look at a purely mobile play, we’re looking at what they’re doing different.
CH: What are your deals that slipped away?
JK: No VC talks about deals that’s gone away. Venture business is a humbling business.
Q: How do you pick the right VC?
JK: You reference check the person. Do it a lot. You can’t fire your VC. It amazes me how few people vet their VCs. The second thing is to get alignment. It’s important to figure out the expectations. Never be afraid to ask.