20VC From Netscape To Friendster To Nuzzel Jonathan Abrams on A Silicon Valley Adventure

Summary Notes


In this episode of "20 Minutes VC," Harry Stebbings interviews Jonathan Abrams, the influential founder and CEO of Nuzzel, a social news service. Abrams, who has an extensive background as a software engineer and serial entrepreneur with ventures like Friendster and Hotlinks, shares insights from his journey in the tech industry, including lessons learned at Netscape during its heyday. He discusses Nuzzel's unique approach to combating information overload by curating personalized news without user effort and hints at future features designed to empower users to create and share newsletters. Abrams also reflects on the evolution of VC firms, contrasting his experiences with traditional larger firms and newer, more agile outfits like Homebrew, Softtech, and Lowercase, emphasizing the benefits of working with engaged investor teams. Throughout the conversation, Abrams touches on the changing landscape of technology and startups, the importance of timing, and the ongoing relevance of social, mobile, and cloud trends.

Summary Notes

Introduction to the Episode

  • Harry Stebings is the host of the 20 minutes vc podcast and can be found on Snapchat.
  • Jonathan Abrams is the founder and CEO of Nuzzle, a social news service.
  • Abrams has a history of founding companies like Socializer, Friendster, and Hotlinks.
  • He has experience as a software engineer with companies like Netscape and Nautil.
  • Abrams is involved in the tech community as a board member, advisor, mentor, and angel investor with over 50 startup investments.

"You're listening to founders Friday of the 20 minutes vc with your host Harry Stebings, who you can also find on Snapchat at h stepbings. That's h stepbings with two b's, where you'll be taken inside the world of the best vc and startup offices, with a few mojito sessions on the side."

This quote introduces Harry Stebings as the host of the podcast and his presence on Snapchat.

"Now for today's founders Friday, we have a very special guest recommended by the main man himself, Matt Mazio. So I'm delighted to welcome. A true visionary of the tech industry tree is Jonathan Abrams, founder and CEO at Nuzzle, the entirely awesome social news service, which you must try, by the way."

Jonathan Abrams is introduced as a visionary in the tech industry and the founder and CEO of Nuzzle, a social news service.

Jonathan Abrams' Background

  • Jonathan Abrams started as a software engineer in Canada at Nortel.
  • He moved to Silicon Valley to work at Netscape.
  • Abrams founded his first company, Hotlinks, during the dot-com boom and bust.
  • He also founded Friendster and recently co-founded Founderstin.
  • Abrams is currently focused on Nuzzle and has made around 50 angel investments.

"Well, I started off as a software engineer, so I started off working in Canada at Nortel doing telephone software, and then I moved to Silicon Valley to work at Netscape, which was a pretty exciting company and had a lot of ups and downs, giving me a sneak peek into a lot of other things around."

Jonathan Abrams shares his early career as a software engineer and his move to Silicon Valley to work at Netscape.

"Two years after I came to America, I started my first company, which was called Hotlinks. That was in the.com boom and then bust era, and Hotlinks was sort of a social bookmarking company way too early, trying to help people share cool links with each other."

Abrams discusses founding Hotlinks, a social bookmarking company during the dot-com era.

"And now I'm very focused on nuzzle. And as you mentioned, along the way, I've done some angel investing and some other stuff. I've been involved in a lot of things."

The focus of Abrams' current activity is on Nuzzle, alongside his angel investing.

Lessons from Netscape

  • Working at Netscape provided Abrams with insight into Silicon Valley culture and influenced his path to entrepreneurship.
  • Netscape was a major player in the Internet's commercialization but missed several opportunities.
  • Abrams learned the importance of focus, as Netscape had many strategies and interests, which he believes should have been more focused.

"Being at Netscape and being exposed to those kind of people probably was important for me, becoming an entrepreneur and sort of understanding the way things were done in Silicon Valley."

Netscape's influence on Abrams' entrepreneurial journey and understanding of Silicon Valley is highlighted.

"But I think Netscape had a lot of opportunities it didn't actually successfully achieve, because if you think about so many of the things that came after, you think, why wasn't Netscape the company that did webmail and instant messaging and just so many of these different things while I was there?"

Abrams reflects on the missed opportunities at Netscape, questioning why the company did not pioneer certain Internet services.

"So I'd say probably one of the lessons would be trying to be a bit more focused."

The lesson Abrams took from Netscape is the importance of having a focused strategy.

  • Abrams has tried to maintain focus throughout his entrepreneurial career, considering the low likelihood of startup success.
  • He applies the lesson of focus from his Netscape experience to his startups.

"I think I've tried to be focused probably throughout my entrepreneurial career, because if you're working on something at a startup, the likelihood of being successful is so low."

Abrams emphasizes the need for focus in startups due to the high risk of failure.

Introduction to Nuzzle

  • Nuzzle is a service that helps users cope with information overload by providing personalized news recommendations.
  • It was created to address the problem of too much content and social media noise.
  • Nuzzle offers a website, mobile website, iPhone and iPad apps, Android app, and email digest.
  • The service integrates with Twitter to find relevant content for users without requiring effort on their part.

"So nuzzle helps people currently get personalized news recommendations without having to do any work."

Nuzzle is described as a tool that provides personalized news recommendations effortlessly for users.

"But a lot of people use nuzzle as a tool to tie into their twitter stream and find really relevant content without having to do any work."

Nuzzle's integration with Twitter is highlighted as a key feature for finding relevant content easily.

Value Proposition Validation

  • Friends and family often provide positive feedback, but it's not always reliable.
  • Actual user behavior, such as repeat usage and sharing, is a more accurate measure of a product's value proposition.
  • For consumer products like Nuzzle, creating a prototype MVP (Minimum Viable Product) and observing user engagement is critical.

"Asking people what they think is a lot less useful than seeing what they're actually doing and if they're coming back and using it every day, I think that's a really strong sign."

This quote emphasizes the importance of observing user behavior over simply asking for their opinions. It suggests that repeat usage is a strong indicator of a product's value.

Fundraising Strategy

  • Fundraising strategy for Nuzzle involved targeting investors who are active users of the product.
  • This approach ensures investors have a personal understanding of the product's value.

"And then in terms of the fundraising strategy for nuzzle, we've consistently gone after investors who are using our product a lot."

The quote outlines Nuzzle's fundraising strategy, which focuses on engaging investors who are frequent users of their product, ensuring they have a vested interest in the product's success.

Competitive Landscape

  • The news aggregation space is crowded, with many apps coming and going.
  • Despite the competition, Nuzzle's approach to handling information overload remains unique.
  • Nuzzle aims to be more than just a news app, seeking to differentiate itself in a crowded market.

"All the other news apps as well as all the other social networking services aren't really doing what nuzzle does."

This quote highlights Nuzzle's unique value proposition in the crowded news aggregation market, focusing on managing information overload differently from competitors.

Growth Challenges and Strategies

  • Growing as an app in the App Store is challenging.
  • Nuzzle started as a website and expanded to include email digests, Android, and iPhone apps.
  • Cross-platform presence, including web and email, is important for SEO and virality.
  • Nuzzle is exploring features that enable power users to curate newsletters, potentially increasing virality.

"I think just being an iOS app or iOS Android app alone, it's harder to grow."

The quote addresses the difficulties of growth for standalone apps and the importance of a cross-platform strategy for reaching a wider audience and improving growth potential.

Empowering Users and Beta Testing

  • Nuzzle is working on new features to empower users to create newsletters.
  • These features are in early beta testing and aim to leverage user engagement for growth.
  • The strategy is to lower the barrier to entry by making it easy for less engaged users to access curated content.

"Well, we're actually working on some new features to do that right now that are still in early beta testing."

This quote reveals that Nuzzle is developing new features to enhance user engagement and content curation, which are currently being beta tested.

Technological Shifts and Innovation

  • Jonathan Abrams, as an engineer, focuses on building rather than predicting technological trends.
  • He acknowledges the ongoing significance of mobile, social, and cloud trends.
  • There is skepticism about the immediate impact of emerging technologies like drones and virtual reality.
  • Timing is critical in technology, with the risk of being too early or too late.

"On one hand, I feel that the social mobile cloud stuff is still just beginning. On the other hand, I think some of these sort of like hot little trendy areas maybe are too early for really being ready."

This quote reflects Jonathan Abrams' perspective on the current state of technology, suggesting that while some areas are still developing, others may be prematurely hyped. Timing is crucial for success in technology markets.

Venture Capitalist Styles and Relationships

  • Jonathan Abrams discusses his experiences with different styles of venture capital firms and how they have invested in his company, Nuzzle.
  • He mentions the mix of "old school" and newer VC firms that have backed Nuzzle, including big names like Andreessen Horowitz and smaller, more engaged firms like Lowercase, Homebrew, and Softtech.
  • Abrams highlights the streamlined decision-making process of smaller VC firms and contrasts it with the more complex and political process at larger, traditional firms.
  • He notes that with smaller firms, the entire team tends to be more engaged with the portfolio company, using Nuzzle as an example of this engagement.
  • Abrams touches on the potential future growth of these smaller firms and whether they will evolve to resemble the larger, more traditional VC firms.

"We actually do have some old school...VC investors in nuzzle as well...But CRV I would consider more of a classic VC firm." This quote explains that Nuzzle has a mix of investors from both traditional, established VC firms and newer, smaller ones.

"There is a big difference between these newer, smaller firms and the bigger VC firms." Abrams is noting the operational and relational differences between newer, smaller VC firms and larger, established ones.

"We've also noticed that both Hunter and Satya at Homebrew, all the folks at Softtech, Matt and Chris at lowercase are all engaged with nuzzle." Here, Abrams provides specific examples of smaller VC firms that are actively engaged with their investment in Nuzzle.

"What happens in five years or whatever it is, when those firms become bigger and bigger and bigger in fund size?" Abrams is contemplating the future of small VC firms as they grow and whether they will change their operational models.

Venture Capital Fund Size and Strategy

  • Brad Feld and the Foundry team are mentioned as an example of a VC firm that has chosen to keep their fund size consistent to maintain their operational model.
  • Abrams notes that some firms choose to grow their fund size over time as they become more successful, while others, like Foundry, choose not to scale.

"Brad Feld at foundry...in terms of raising the same size fund every single time, not scaling, only having kind of operational assistance helping them." This quote references Brad Feld's strategy with Foundry Group to maintain a consistent fund size and lean operational structure.

Mentors and Influences

  • Jonathan Abrams reflects on his lack of traditional mentors throughout his career, with the exception of his first manager at Nortel.
  • He mentions Steve Blank, author of "Four Steps to the Epiphany," as someone from whom he has learned a lot, though not in a formal mentorship capacity.
  • Abrams also talks about Jerry Kaplan's book, "Startup: A Silicon Valley Adventure," as a virtual mentorship that inspired him to move to Silicon Valley.

"I actually don't think I've really had a lot of traditional mentors." Abrams acknowledges that he hasn't had many traditional mentors, highlighting a more self-directed path in his career.

"One book that in some ways is a know, sort of was in some ways a bit of a mentorship thing for me was Jerry Kaplan's book start up a Silicon Valley adventure." Abrams describes how Jerry Kaplan's book served as a form of virtual mentorship and inspiration for his career.

Entrepreneurship Challenges and Inspiration

  • Abrams discusses the common issue he sees with students in entrepreneurship classes, which is the lack of irrational dedication and fervor that is often necessary for entrepreneurs.
  • He shares that the highest high in his career was during the dot-com boom when he was a first-time entrepreneur with his company Hotlinks, and the lowest low was the subsequent dot-com crash.

"I think the biggest problem sometimes is they're taking a class, but they're just not truly irrational dedication and fervor that an entrepreneur has." Abrams points out that entrepreneurship students often lack the extreme dedication required to pursue their ventures.

"I think Mark Andreessen is the one who said that entrepreneurship is like a roller coaster." This quote is used to illustrate the highs and lows of entrepreneurship, as experienced by Abrams during the dot-com era.

Initial Funding and the .com Crash

  • Jonathan Abrams received a couple of million dollars as initial funding, which was substantial at the time.
  • After raising more, the .com crash led to a merger and most of the management team moving on.
  • Abrams was left questioning if the peak of his career had passed due to the .com crash.
  • This period of downturn led to the conception of Friendster amidst the uncertainty.

It started off with a couple of million, which was considered a very lot back then. And then we raised another large amount after that. But after the.com crash, we merged hotlings with another company.

This quote highlights the initial success in funding and the subsequent challenges faced due to the .com crash, leading to a merger and management changes.

So that was a real low, the.com crash period, because you were left wondering, was that experience of me having my own company the highlight of my career?

Abrams reflects on the emotional impact of the .com crash, questioning his future success in entrepreneurship.

Friendster: A Roller Coaster of Success and Struggles

  • Friendster was a major success initially, leading to many opportunities for Abrams.
  • The company faced difficulties with venture funding and management, going through six CEOs in six years.
  • Abrams experienced being excluded from board decisions and saw the platform's software deteriorate.
  • Despite the frustration, these experiences are seen as typical in an entrepreneurial journey.

And obviously friendster was both a high and a low.

Abrams acknowledges the duality of Friendster's impact on his career, with significant early success followed by challenging times.

I was sort of routinely excluded from board decisions, and our software was rewritten into worse software.

This quote details the internal struggles within Friendster, highlighting poor management decisions and software issues.

The Daily Life at Nuzzle

  • Nuzzle faces daily fluctuations between criticism and praise.
  • High-profile endorsements, like from former Obama advisors, contrast with the negative feedback received.
  • These extremes are seen as a normal part of running a startup like Nuzzle.

I mean, every day with nuzzle, somebody gets angry about us for some really ridiculous reason and sends us a bunch of mean emails.

Abrams describes the negative aspect of daily operations at Nuzzle, where they receive unwarranted criticism.

And the next day, we see that Jon Favreau and Dan Pfeiffer, two former Obama advisors, are talking about Nuzzle on Twitter and in a podcast and raving about nuzzle.

This quote highlights the positive recognition Nuzzle receives, showcasing its impact and reach.

Nuzzle's Vision and Roadmap

  • Nuzzle aims to filter the internet noise and connect users with essential content.
  • There is a demand for Nuzzle-like services for different media, such as video and podcasts.
  • Nuzzle remains focused on news despite potential expansion due to their lean team size.
  • The vision includes empowering influencers to curate newsletters, addressing content overload.
  • There is a significant opportunity in curating content from major publishers to reach interested audiences.

Well, our vision with nuzzle is really to connect everybody on the Internet with just the stuff they really need to know about.

Abrams outlines Nuzzle's mission to simplify information discovery on the internet by filtering out the noise.

We are not one of those unicorns that was worth 4 billion and is now only worth 2 billion. We are still a very lean company, and so we have to be very focused.

This quote emphasizes Nuzzle's strategic focus on news due to their limited resources, contrasting with larger, more bloated companies.

Potential Influencer Engagement with Nuzzle

  • Jonathan Abrams expresses interest in having high-profile influencers like Donald Trump, Hillary Clinton, Bernie Sanders, and Kim Kardashian use Nuzzle.
  • The idea is to create curated newsletters for their followers, which could be highly appealing to many people.

Or how about Kim Kardashian? I mean, these people have huge audiences, and if you're a Donald Trump or Bernie Sanders fan, would you be interested in getting a curated newsletter of sort of the most interesting news stories that Donald Trump or Bernie Sanders supporters would be interested in?

Abrams speculates on the potential impact of having influential figures curate content on Nuzzle, appealing to their large fan bases.

Appreciation for the Podcast

  • Abrams expresses gratitude for being on the podcast and mentions enjoying previous episodes featuring his investors.
  • The host thanks Abrams for his participation and encourages listeners to follow the podcast and sign up for updates.

Yeah, I mean, it's my pleasure. I've been enjoying your podcast.

Abrams appreciates the podcast and the opportunity to share his experiences, indicating that he is a listener himself.

And a huge thank you to him for giving up his time today to be on the show.

The host thanks Abrams for contributing his time and insights to the podcast, valuing his participation.

Lisa Mattress Advertisement

  • Lisa aims to revolutionize the mattress buying experience with an online end-to-end solution.
  • For every ten mattresses sold, Lisa donates one to a shelter.
  • The mattresses are designed with unique layers, including memory foam, and are engineered to keep users cool.
  • They offer a 100-night trial and free shipping to the UK, US, and Canada.

Well, having created an awesome online endtoend mattress buying experience, replacing the worst ever experience of buying and testing a mattress in the showroom, that still is not enough for them as they like to give back.

This quote explains Lisa's business model and philanthropic efforts, differentiating them from traditional mattress retailers.

And they have a 100 night trial. So what's the risk?

The host highlights Lisa's customer-friendly policy, which allows for a risk-free trial of their mattresses.

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