General Catalyst Partners

Flightcar Raises Fresh $20.7 Million, Amid Major “Restructuring”

Imagine a young startup where two of three founders are pushed out the door. Imagine that this same startup parts ways with its COO, its SVP of Finance, its VP of Guest Experience, its VP of Engineering, its VP of Marketing and roughly half its other full-time employees, all within a period of months. Not last, imagine that the remaining cofounder, who is 20, has never before held a full-time job.

Sound like a great company into which to sink a small fortune? Investors in Flightcar, a 3.5-year-old, San Francisco-based startup, apparently think so. In fact, Priceline Group, Tencent Holdings, and earlier backers GGV Capital, General Catalyst Partners, Softbank Capital and First Round Capital came together last month to quietly provide the company with $20.7 million in Series B funding. It has now raised roughly $40 million to date.

Flightcar was formed to address a very real problem: the hassles involved in airport parking. The idea: while you’re away on a trip, someone else arriving into town can use your ride. You leave your car with a valet and skip the process of schlepping back and forth to a far-flung lot. You also avoid parking fees that can add up fast. Your car, meanwhile, gets insured against theft and damage, it’s thoroughly cleaned, and you’re given a little cash for every day your car was rented.

The idea isn’t foolproof for many reasons, including growing competition from Uber. But Flightcar had been ticking along just the same, striking deals with three airports – San Francisco, Boston, and L.A. — by September of last year and raising $13.5 million in the process.

Then, encouraged by investors to start scaling as rapidly as possible, the figurative wheels began to come off.

More here.

With $2.5 Million from VCs, Mapsense Charts Its Next Steps

Mapsense, a 12-person, San Francisco-based company that’s been quietly producing map analytics tools for corporate customers, is today revealing that it has raised $2.1 million in funding led by General Catalyst Partners, with participation from Redpoint Ventures, Formation 8 and Amplify. LA.

The announcement is interesting for a few reasons, starting with what Mapsense is at its core: a modern API for geo data visualizations. Indeed, according to the company, it can cater to any customer wanting to make better sense of the many billions of location-based data points being streamed constantly from a wide variety of sources, including smartphones, connected cars, cheap satellites, commercial drones and smart grids, to name a few.

Mapsense co-founder and CEO Erez Cohen puts it in perspective, noting that “there was more location data produced in 2014 than in all of time until then.”

Mapsense counts as customers, for example, two publicly traded credit card companies that respectively see 10 percent and 50 percent of the transaction data in the U.S. While they’re (hopefully) mindful of using the data they collect in a responsible way, Mapsense is helping them help their customers. For instance, they can show restaurateurs what people are paying for Thai food in certain neighborhoods, and how their competitors down the street fared last Tuesday (and how they fared the next town over, and around the country, if they really want to know).

Others of Mapsense’s customers include mobile ad companies looking to better target potential customers.

Obviously, Mapsense is well-timed, particularly given growing corporate interest in mapping technologies. (Nokia’s mapping division has become a particularly hot commodity of late.)

Starting today, Mapsense — which charges its enterprise customers a yearly average of “six figures” based on the amount of data they push to Mapsense — is also hoping to sell its analytics tools to developers.

They won’t be paying as much to use Mapsense’s technology, but it’s a way to accelerate its growth, says Cohen, who adds that anyone can upload their data for free if they’re willing to make it public.

Worth flagging, particularly for StrictlyVC readers: Mapsense is announcing its newest funding today but actually sealed up the round a year ago. (It has raised $2.5 million to date.)

Cohen – a former Palantir Technologies engineer – insists the company’s funding announcement has nothing to do with its future fundraising plans. But if it did, Mapsense would be among a growing number of companies to go public with their funding just as they begin looking to the next round.

(By the way, here’s a rough video demonstration of how Mapsense’s technology works.)

Pushbullet, Beloved by Users, Shoots for Fresh Funding

Pushbullet, a San Francisco-based, six-person software startup whose free app makes it easy for users move notifications, links, and files between devices, is announcing $1.5 million in seed funding from General Catalyst Partners, SV Angel, Alexis Ohanian, Garry Tan, Paul Buchheit, and other angel investors.

It’s in the market again, too. As is often the case with today’s startups, Pushbullet is announcing a round that came together some time ago – 10 months ago in this case – as a way to kind of raise its flag. Says founder Ryan Oldenburg, a former Android developer at Hipmunk who formed Pushbullet with several former Hipmunk colleagues: “We don’t need a giant round to power a sales force – just a standard Series A. Everyone here has two jobs and I’d like to start making that not be the case anymore.”

VCs could certainly do worse. Since launching in 2013, Pushbullet says it has distributed “tens of millions” of notifications and transferred hundreds of thousands of links, files, and text snippets across users’ various devices, garnering rave reviews from CNet, Wired, and LifeHacker in the process. Just this morning, GigaOm described it as “one of those rare apps where, once you start using it, you’ll likely begin wondering how you lived without it for so long.”

Now, it’s a matter of raising user awareness, preferably before Apple and Google find other ways to better tie together their operating systems across devices. (With Pushbullet ranked far below the most downloaded productivity apps, according to both App Annie and Android Rank, the race is on.)

We talked with Oldenburg about the company last week.

What compelled you to start Pushbullet?

It started about a year-and-a-half ago. I had a smart phone, but as a programmer, I spent a lot of time working on computers, which traditionally didn’t work with smart phones, nor did anyone think they should. As a result, people were doing odd things, like emailing themselves to get their files on their phone. A world where people have both smart phones and tablets is great, but nobody had been acknowledging the opportunity to make it much better.

How did you know you’d struck on something?

It was just a side project, but it had an unexpectedly awesome reception. The first 15,000 [users] signed up within a couple of weeks without any PR. I just submitted it to Reddit and it struck a nerve.

You then headed to Y Combinator. What did the program do for you?

Y Combinator has a way of making you feel not good enough and like you have to work 10 times harder – which isn’t a bad thing. If you’re the right person [to lead a startup], it makes you want to do what it takes to grow beyond tens of thousands of users to tens of millions. It got us to think much bigger.

How much bigger? Will we see an enterprise version of Pushbullet?

At this point, we’re focused on building it for consumers. But as we get later stage, this [technology] is definitely something that will fit into enterprises and [where we’ll probably get the most financial support]. Dropbox [straddles] both worlds, too, and that model works for us.

Mithril Capital Bets Big on Diabetes

Mithril Capital Management prides itself on funding unique “growth companies regardless of sector or geography,” says Ajay Royan, who founded the San Francisco-based venture firm with investor Peter Thiel in 2012. Last month, for example, it backed a Berlin-based, publicly traded company with an approved treatment for brain cancer.

Fractyl, a company aiming to better control type 2 diabetes, also fits the bill. In fact, Mithril — which has just led a $40 million financing for the three-year-old, Waltham, Ma., company – thinks Fractyl might become the “single most impactful company in our portfolio,” says Royan.

Certainly, the market opportunity Fractyl is chasing is enormous. More than 350 million people around the world suffer from type 2 diabetes, and as many as one in three U.S. adults could have diabetes by 2050 if current trends continue, according to the Centers for Disease Control and Prevention.

While the disease is usually managed through exercise regimens, oral medications, and insulin shots, in more extreme cases, bariatric (weight loss) surgery is recommended, and it’s here where things get interesting.

Bariatric surgery has been shown to return a person’s blood sugar levels to normal roughly six months after the procedure. Traditionally, it was believed the surgery is effective because the size of the stomach is reduced, but researchers and doctors have begun to believe it owes to a change in gut metabolism.

“The [first section of the small intestine] contains cells that function as chemical sensors,” explains Royan. “As you eat food, a portion of your small intestine anticipates the food’s composition and signals a hormonal response to start preparing insulin or whatever is appropriate for that food.” In diabetics, that portion of the gut is scarred, so the body’s response is off.

The big idea of Fractyl cofounder and CEO Harith Rajagopalan — a cardiologist and medical device entrepreneur — was to address the issue by altering the physiology of the gut. Specifically, Fractyl has created a device that’s inserted into the small intestine using an endoscope; after expanding and smoothing out the targeted part of the tract, it applies heat via a catheter balloon filled with hot water that kills the surrounding layer of skin. If all goes correctly, the old cells slough off and new cells with hormone receptors are generated in their place.

So far, the idea is looking spot on. Thirty-five patients have participated in trials, with the results validating the company’s approach. Still, it’s early days. The trials began just eight months ago, meaning no one yet knows how effective the treatment will be over a longer period of time.

There’s also competition to consider. Though Fractyl has some deep-pocketed venture firms, including earlier investors General Catalyst Partners, Bessemer Venture Partners and Domain Associates, the kind of skin ablation done by Fractyl’s device isn’t unique, even if no one is doing it precisely the same way.

Royan says he isn’t concerned about potential copycats, pointing to Fractyl’s “significant IP filings.” More, he insists, Fractyl’s design will be very hard to beat. Asks Royan,“Were there cell phones before and after the iPhone? Yes.” But the iPhone’s design has kept it at the fore. For his money, so will Fractyl’s specific approach to fighting diabetes.

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A VC for Hard-Core Developers

StrictlyVC recently visited General Catalyst Partners in Palo Alto, Ca., as readers who’ve caught our interviews with Niko Bonatsos and Neil Sequeira know. Today, we conclude our General Catalystorm™ with Steve Herrod, a managing director who joined the firm last year after spending a dozen years with VMWare, the software giant that specializes in virtualization.

Herrod was VMWare’s chief technology officer for his last five years with the company; he also has a PhD in computer engineering from Stanford. Thankfully, he can also speak plainly when seated opposite an English major. Here’s a bit of our chat, edited for length:

You invest solely in companies that sell products to enterprises. What’s your primary focus right now?

Mobile-first infrastructure. Everyone talks about apps in the consumer world, but enterprises still don’t think about every one of their customers accessing their information through a mobile device. Knowing that all enterprises will move to mobile in a very aggressive way, [I think a lot about] what are the second and third order changes that have to happen.

What’s among the biggest of those changes?

How companies actually write applications. Every company has a Web application; it’s what you use when you ask for help or your HR report. But when creating new mobile applications, companies and vendors quickly realize that they have to do something different with all the data and systems behind it — that more formal APIs [or side doors for developers into their machinery] are essential. To create a formal way that a mobile app and a Web app can access customer data is a pretty big transition, so I’m focusing on tools that help people create and use these APIs for the first time.

What’s a portfolio company that illustrates your point?

Runscope is helping companies formalize how they create and test and make these APIs safe for the rest of the world.

I think all the core assets of companies are going to be things they can monetize or [otherwise make more accessible to external parties], so it’s a bet that formal APIs are the future for all companies.

Who are Runscope’s customers?

It just signed a great deal with Adobe as Adobe becomes a cloud company that provides a lot of access to things [on a subscription basis]. [The wearable device company] Fitbit uses Runscope. Target is another example [of a customer]. All are trying to formalize access to use of their data safely and securely. In the traditional world, you own an application and are responsible for it working. When you move to an API world, you have all these external people who are accessing your stuff, and if you do something that breaks it, you’ve now broken a bunch of other people’s stuff. So it’s almost more important that you use new tools on these APIs to prevent the external world from falling apart.

You were with VMWare for many years. Has it been easier or more difficult than you’d imagined to transition into VC?

My first few months [as a VC] was a tour to meet other VCs and ask [their advice], and everyone was very collaborative and helpful. [But] I definitely wanted to take a different angle to venture than I’d seen in my own work on the M&A side at VMWare. I come from a very technical background . . .I don’t think too many [other VCs] come from that background . . so [I] end up bringing hopefully something unique to the table . . . In the enterprise world, it’s amazing how many people make investments without actually trying out products.

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VC: Opportunity for New E-Commerce Brands is “Endless”

In recent years, a seemingly unending procession of direct-to-consumer companies that make and sell everything from men’s pants to eyeglasses to snack foods has sprung up and nabbed venture capital. Think Bonobos,Warby Parker, and HelloFresh, among many others.

In fact, based on venture cycles, one might be inclined to think that it’s time for investors to move on to the next thing. But Neil Sequeira, a managing director at General Catalyst Partners, heartily disagrees. Sequeira, who sits on the boards of NatureBox (healthy snacks) and the Honest Company (environmentally friendly products), cites startups’ ability to reach customers more quickly, easily, and cheaply as just a few reasons why he thinks the trend of new brands selling directly to shoppers is “endless.”

Sequeira told us more last week at General Catalyst’s new Palo Alto office, a traditional pale yellow home that features whiteboard walls and polished concrete floors (a “home away from home” for founders, says the firm).

You’re very bullish on so-called alternative commerce. What does that mean exactly?

Historically, e-commerce has been defined by the Amazons of the world, where they take a product and resell it via the Web to a consumer. But the reality is that commerce – through online, mobile, and multichannel – is changing. It’s no longer about selling a product and taking a thin margin. It’s about creating your own products and brands and selling them on a subscription basis via [multiple] channels, so you’re mobile, you’re online, [and] you’re opening stores.

Wasn’t the idea to not open stores to keep costs down? And is there a danger that consumers can only absorb so many new brands?

These are multichannel businesses. The stores of Warby Parker [which General Catalyst has backed] do incredibly well. The company started online and created a brand. Now, its stores probably perform better than any optical store in the world.

[As for your second question], I think historical big box retailers are in a heap of trouble. Their infrastructure and distribution systems can’t keep up with what consumers want. They have to make deals with manufacturers, their products go through a distribution facility, then to a store. If the products don’t sell, they have to be sent back. They have to do big-brand advertising and marketing. That’s why you’re seeing a lot of these places struggle. Consumers want their specific needs addressed, versus [the old model of] Proctor & Gamble and Kimberly-Clark and those companies doing things on a macro basis. There’s a lot that incumbents can’t do because of their legacy infrastructure.

How big do you think the opportunity is?

I think the trend is endless. It’s a trillion dollar industry. Of course, it means you have to do things differently – acquire customers differently, market differently, build brand differently – but that’s what great companies will do.

How do you, as an investor, sort through what’s great in a market that’s attracting so many startups?

It has to start with a mission — that can’t be manufactured. NatureBox’s CEO was an obese young man who started eating healthier and who wanted to create something to help kids like him. When [actress] Jessica [Alba] started Honest Company, she had already campaigned on Washington for three years to try to change what goes into kids’ clothing and food. Nobody listened . . .so she started a company. I think consumers hear authenticity.

You also have to find creative acquisition channels. Banner ads and Google clicks aren’t going to work. If [my colleague] tells me to buy something, that’s how you sell it. Beyond social, I think mobile is the next real killer. Having that [purchasing power] in [a consumer’s] pocket and figuring out what they really want will be [increasingly powerful].

How so, outside of a retailers’ ability to send a customer information or a discount based on their location?

There are just so many more applications and data on mobile, and those will continue to proliferate, whereas online [retailers are limited to] a certain amount of traditional marketing channels. Then there’s ease and convenience; you don’t have to sit in front of a computer; you can just “one click” from your mobile. So there’s traditional, there’s social, there’s mobile, there’s on-demand. Meanwhile, the incumbents have to go to buy pre-roll on TV. They aren’t going to be able to change fast enough.

Are there any businesses or segments you might avoid at this point because they seem saturated?

Is there a lot of room for another Warby Parker? I don’t think so. But consumer products that are serving niches? Probably. Maybe you don’t want to compete with Google on last-mile delivery. When you have folks who have unending resources and they’re going after a market hard, it can be a challenge. But I don’t worry about the retailers. I don’t think there are that many areas that are shut off.

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The Beauty of Annoying Apps

Earlier this week, I stopped at the Palo Alto offices of General Catalyst Partners, an East Coast heavyweight that’s been politely muscling its way into more West Coast startups since planting a flag in the Bay Area in late 2010. One of those companies is Snapchat, the popular mobile messaging startup, and one of the investors I sat down with was Niko Bonatsos, who first brought Snapchat to General Catalyst’s attention. Among other things, we discussed why Snapchat’s most popular feature is no longer “snaps.” Our conversation has been edited for length.

Snapchat users appear to be less and less interested in the company’s “ephemeral” features. Is that a concern?

It’s the same thing that happens with other software products. When they get started, they’re very simple. Over time, their user base diversifies. So with Snapchat’s newest release, you can basically do a live video chat with others on Snapchat rather than one message at a time. And that’s fantastic. In the past, Snapchat was the icebreaker; now you can do much more. It’s still probably the fastest-growing app out there.

What early signals do you look for when it comes to non-transactional products like Snapchat?

If there’s anything that people are talking about in online communities, or if in reviews of apps, you see polarizing reviews, these are good signals.

When you’re controversial, it fuels word of mouth, which also gets amplified by the media. Back in the early days, for example, Snapchat was perceived as the ultimate tool [for lascivious] texting; it wasn’t true, because 75 percent of the user base was girls. But the media picked it up. Later, Facebook launched Poke, which was characterized as a Snapchat killer. Most people didn’t know Snapchat [at that point], and they looked it up and downloaded it. Controversy is great when it comes to building a brand and acquiring users for zero marketing spend. Obviously, you have to graduate from one controversy to another, or three to six months later there’s fatigue, but it can be controversy because of behavior, content, or because your product annoys people.

So investors should be looking for annoying apps.

Yes. With Snapchat, a lot of parents were very annoyed with it. With [anonymous messaging app] Yik Yak, a lot of schools and parents were annoyed. With [the mobile dating app] Tinder, people were telling their friends, “There’s an amazing app where I can check out girls and if I like them and they like me back, maybe we can start chatting and hook up later.” Meanwhile, older people were like, “This is terrible. What are young people doing these days?”

Secret and Whisper, apps where people share confessions and gossip anonymously, are controversial and, to some, annoying.

But their word of mouth isn’t as strong. Things don’t spread quickly from one community to another. Secret hasn’t managed to break out of its techie, Silicon Valley roots. You can see that it has something like 100,000 Android downloads. It launched on Android [in mid-May], but for a company that has raised so much money and been so [buzzed about], you’d expect some more.

I’m also a little hung up by the names Secret and Whisper. How many secrets do you have, really? Maybe one a day? Three times a week? I get the value proposition of the product; it’s like a Twitter parody account. But most content is, “My girlfriend just broke up with me,” or “I hate my boss.” It’s heartbreaking and after a couple of weeks, you don’t want to go back.

Before I go, what’s one last trend you’re seeing?

How fast we’ve gone from single apps to portfolios of apps. Google now has 150 apps between iOS and Android. Facebook has about 40. The world basically saw what happened in China, where companies like Tencent [the Chinese Internet company] now have [hundreds of] apps and do a lot of cross promotion and [essentially] game the app store. Mobility into the top 100 has become much harder for early-stage startups as a result, and if you aren’t in the top 100 app [download rankings], no one can find you. That’s the opportunity and the challenge.

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That’s It?

Almost a week ago, some odious years-old emails written by Snapchat CEO Evan Spiegel were leaked to the media, and it’s a wonder how quickly their content seems to be have been swept under the rug.

It’s understandable, to a point. Spiegel’s emails were written when he was a college student trying to impress his fraternity brothers, not the CEO of Snapchat. Emails are also private communications that, very arguably, should remain private.

Besides, it isn’t like Spiegel holds public office. He never signed up to be a role model. He certainly shouldn’t be held accountable for a culture in which objectifying women not only remains socially acceptable but, for some, seems to border on a competitive sport.

Still, Spiegel’s lone public apology, in which he said he was “mortified and embarrassed,” didn’t go far enough. How about some response from others close to the company, the same people who blog and tweet and talk so openly with reporters about how Silicon Valley is changing the world?

On Friday, Stanford Provost John Etchemendy emailed the university’s student body to say the school is “positively ashamed” that the emails were sent by a Stanford student.

If Snapchat’s influential investors are also ashamed of the noxious attitudes toward women that were conveyed in those emails, they should also say something. It’s easy enough to condemn their content without hanging Spiegel out to dry. And frankly, not doing anything seems like an implicit endorsement, as if what Spiegel wrote isn’t that bad. (It is.)

“We can choose to turn a blind eye to such statements and chalk them up to youthful indiscretion,” wrote Etchemendy to Stanford’s undergraduates. “Or we can be more courageous, and affirmatively reject such behavior whenever and wherever we see it, even — no especially — if it comes from a friend, a classmate, or a colleague.”

Nobody’s going to change Silicon Valley’s attitude towards women overnight, but here’s hoping Etchemendy’s message resonates not only with the men and women of Stanford but with Snapchat’s board, as well. A few choice words could help send the message that objectifying women isn’t okay, no matter how “hot” your company might happen to be.

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NatureBox Shows Why VCs Are Rushing to Back Food-Delivery Companies

Venture capitalists have seemingly gone bananas over food startups. According to VentureSource, in the last 14 months, 15 companies that deliver restaurant meals have been funded; meanwhile another 11 startups that sell general food products were funded last year – an industry record.

Are investors overdoing it? Perhaps, though a peek into the business of NatureBox, a two-year-old, San Carlos, Ca.-based snack-delivery company that has raised $28 million to date, highlights the opportunity they’re chasing. Earlier this week, I spoke with CEO Gautam Gupta, a former investor with General Catalyst (which is among NatureBox’s backers), about his 60-person company. Our chat has been edited for length.

How fast is NatureBox growing?

I started the company with a friend of mine from college two-and-a-half years ago. That first year, we shipped 50,000 [boxes of snacks to customers]. Last year, we shipped a million and we’re on track to triple that this year.

Who, and where, are your customers?

We have customers in all 50 states. We do skew toward a female audience. The largest segment is moms looking to find healthier options for their family and school lunches. Half of our customers are on the coasts; the other 50 percent are in the Midwest, where people don’t have access to Whole Foods or Trader Joe’s.

How much are they paying for their Naturebox deliveries?

We have three different offerings, so $20, $30, or $50 a month [based on how much you’re ordering]. You can choose the items yourself from 120 different options in our catalog, or we can select them for you.

From where are you shipping the products?

We work directly with almond and fruit growers across the country to source the ingredients. We then have a network of contract manufacturers who work on the product across the country and who send the product to our two fulfillment centers in California. We’re also about to launch an Indiana-based fulfillment center, which is a big undertaking for us and will enable us to get our boxes to our East Coast and Midwest customers much faster.

What convinced you that this was a big opportunity?

The traditional model, through retail stores, really involves a fight for shelf space, with [food companies] having to develop products based on the retail calendar. What we’ve done is take a product development cycle that’s one to three years and condensed it to the point where an idea can be made into a product that’s in customers’ hands in two or three months. More, as soon as it reaches that customer, we’re getting feedback about what they like and don’t like to eat and what makes products more or less successful — data that drives the business [forward].

What have you learned about your customers so far?

We’ve learned how important the aspect of familiarity is to a new product. We have four or five flavors of wheat fig bars available to customers on our site, for example, because the taste is very similar to Fig Newton [cookies], though our products are made of whole grain and without any fructose syrup.

You spent eight years working at General Catalyst. Do you think VCs are beginning to plug too much money into me-too food startups?

From an investors’ standpoint, the industry we’re going after is a trillion dollar market. It’s one of the last industries to be disrupted by the Internet.

Will you be back in the market in 2014?

We’ve had a lot of folks reaching out to us and have a lot of options. We’re kind of heads down, building the business, but if it continues to grow and we’re in a good position, it’s [possible].

Before you go, which is better, life as a VC or as an entrepreneur?

I started with General Catalyst when I was in college, and it was the only real job I had before starting NatureBox . . . I’ve now learned that building a company is so much of a team sport, versus investing, which is more about being an individual contributor. I’m definitely learning a lot, but I also really love the aspect of being able to do something and see the impact of that and really playing in the game. This job is a lot more fun.

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Innovation in Snapchat Time

There’s been a lot of talk of “ephemerality” in tech circles lately, driven in part by the rise of Snapchat, the popular mobile app that allows users to send self-destructing messages and images. But Niko Bonatsos, a principal at General Catalyst Partners — which participated in Snapchat’s A and B funding rounds — thinks the trend is becoming ubiquitous and that Internet startups have less time than ever to prove themselves before their window of opportunity slams shut.

Yesterday, I chatted with Bonatsos about the “rapid decay” of so-called digital assets, with Bonatsos noting that our loyalty to digital products is at an all-time low. To prove his point, Bonatsos ticked off a list of “digital” companies to fall from their perches, many disrupted in the span of five years or less (think MySpace, Blackberry, and Firefox, among others).

Bonatsos also pointed to mobile phone apps, noting that more than half the top 100 Android and iOS apps today didn’t exist just a year ago, and that the lists are almost entirely different than two and three years ago.

“Unlike 10 years ago, when we still had product life cycles, today, [users migrate to a new technology] as more of an impulse, and there isn’t a lot of time to act if your product isn’t perfect. People will just migrate to the next form factor, the next paradigm.”

I asked Bonatsos how this constant migration of users is impacting the way he invests. After all, what’s to say people won’t move on from Snapchat to some other app that gains their confidence? He said Snapchat serves a core human need right now – to be authentic and express ourselves privately — which is one of his firm’s criteria. Bonatsos said another buffer against fickle consumers is to back companies that are “used every day to solve a real world problem.” Here, he pointed to Uber, which has largely replaced the frustrating process of calling a cab, and the travel metasearch engine Kayak, a General Catalyst portfolio company that was acquired by Priceline last May.

Still, he noted that it’s never been so important for digital startups to “be on top of their numbers” to “deeply understand the intensity of [their users’] engagement,” and to “be smart [and] leverage user acquisition channels really early on, when they are cheap.”

Bonatsos – who was raised in Athens and holds engineering degrees from Stanford, the University of Cambridge, and the National Technical University of Athens — acknowledged that all of it is “easier said than done.” He also said that startups typically have “some time” to take action if their metrics aren’t heading in an ideal direction — but not much.

“Even when something becomes mainstream,” he said, “the clock is ticking.”

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