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Tom Tunguz

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29
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2016-09-12
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2016-09-12
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1
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  1. “Yeah, the last public investment is a company called Dremio. It's a data middleware company founded by the chief architect and the head of product from MapR, which is in the Hadoop world. They basically allow you to move data in really beautiful and seamless ways, and they allow people inside of companies to find the data they need access to. I'm really excited about them because they solve this data discovery problem, not the analysis and exploration part, which companies like Looker and Tableau and others are solving, but it's the next step. It's, hey, within this company, we have 10,000 different data sets and I'm looking for this particular one. I'm looking to understand which customers came from which marketing campaign. How do I connect the two? And so they're solving that problem.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “We've been looking a lot at software companies in the human resources world, and it used to be that the two people inside of a board meeting that didn't have data at the board meetings were the head of marketing and the head of people. And now the head of marketing and the marketing team's been fully instrumented. And so the next great opportunity is helping the head of people with data.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Yeah, I think company that I work with that meets that is a company called Threatup, which is the world's largest secondhand clothing store. And they process 20 to 30,000 items of clothing per day that go into four distribution centers. And the people who built the DVD facilities at Netflix are building the same things at Threatup. I first got introduced to Looker because during one of the board meetings, James, who's the ThreatUp, one of the board members asked him a question and he pulled up a looker and he answered the question on the spot in 45 seconds. Literally everything at Threatup is measured. A piece of clothing coming off of FedEx truck to being categorized, itemized, photographed through the facility, then back out being shipped, everything, everything is data-driven. And the incredible part there is the impact on the financials of the business, particularly the margin structure is, I can't disclose it, but it is impossible to overstate.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “My biggest takeaway is nobody knows how to do all this stuff right, and it's always changing, that's the thing that kind of stunned me. I was reading, there's one story about in the Second World War, the Americans were losing all these planes because the Germans were shooting them down and these planes were coming back and only armor them on a certain pieces of the plane. And so the colonels of the Air Force said, well, why don't we just armor it where all the bullet holes are? And then you had this guy named Wald who came in and said, no, that's the whole point. The planes that come back have holes in the places where the planes can survive with those holes and the planes that don't come back are the ones that have bullet holes in all the other places. So, you know, the planes that were coming back had holes in a few solage. And so you don't need to armor the fuselage. You need to armor the wings or whatever it was. And that was in the 50s, right? And so statistics is really only like 50 or 60 years old and even this world of like business intelligence and data analysis is only that old. And nobody really knows how to do it inside of company. So that was the most exciting part for me.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Know there's this great software called Scrivener. Hemingway is great too. The great part about strivener is it breaks things down into individual blog posts and then it kind of compiles them up. And so you can reorganize a table of contents changes. You can do indexing.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Yeah, sounds great. Yeah, it's much different than writing a blog post. The way I thought about it was it's a $50,000 book, so it was about, it is about 100 blog posts. Yeah. The biggest challenge was trying to figure out how do you go deep enough into a topic to be interesting to the reader, but not so deep that you're bored. And you don't have instant feedback like a blog and you can't correct it, so you just don't know.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Yeah, I think what you do is Google does or did when I was there, which is you create a hypothesis and you say, let's run a small scale experiment just to make sure that it's true. Because basically what you want to do is you want to test your assumptions. And most of the time your assumptions are probably right. If you look at it, most of the time your assumptions are probably right, but you definitely want to certify them. And that's the way you get rid of that illusion of validity.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Of validity in this case is that Kahneman and his assistant thought they could predict when in fact they couldn't, right? They had no idea.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Yeah, yeah. So the illusion of validity is, okay, so Daniel Kahneman, Harvard academic, he goes to West Point and he looks at all the different cadets. And he and his colleague, they go in with the goal of identifying who will be the leaders of the brigade three or four years from now by looking at the cadets during the first couple of weeks. They take 12 cadets and they give them an enormous log and they put a six foot wall on a grass field. They tell the cadets, your goal is to lift this log and get it up and over the wall without it touching the ground or without it touching the wall. And in either case, if it touches the ground or the wall, you have to bring it back. And so they watch how this group of cadet self-organizers, there's two or three people who negotiate a strategy, then they kind of tell the other people what to do. And so they get it over. And so the whole time Kahneman and his assistant are taking notes and they basically stack rank all these different cadets to kind of predict who is going to be a leader. It turns out they're dead wrong. All of them. They couldn't predict at all. And so do you...”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yeah, the availability bias is basically, this was founded by Daniel Kahneman, it's basically if it's something that's easily remembered, then you perceive it to be more likely. So there's a reason that when somebody wins a powerball lottery, which tends to be the biggest lotteries in the U.S. or like El Gordo in Spain, that there's as many camera crews as possible, there's a person who's got a ludicrously large check who comes to the front door and hands it, and then this person is celebrated all over the place. And that's because that gets everybody who's playing the lottery to remember that moment and imagine themselves as receiving that check. And because it's so easily remembered, people perceive it to be far more likely than it actually is.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, and then the second one is this notion of anchoring bias. And anchoring bias is, you know, if I ask you, Harry, a question, like, how much are you willing to pay for this map listed at $20? Telling you that number and putting a number in your mind ahead of time, you're already thinking around that number and that kind of biases you. And it can either bias you high or it could bias you low”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “So numbers can be really confusing. There was this woman who wrote about the Monty Hall game. Well, the Monty Hall game is a game where you pretend you're on a game show and the host is called Monty Hall and there are three doors in front of you and behind two of the doors there's a goat.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “So, all these psychologists really wanted to study him because they thought he was going to be an unbelievable decision maker, because here was basically a human computer, right? There was no fuzzy element to his decision making. The inverse turned out to be true. He actually couldn't make a single decision. And what they realized is that we never have perfect information. And the way that we get from not making a decision to making the decision is we use our emotions. So emotions are a really important part of the decision-making process. That's kind of the moral of the story. And I remember at Google when we were interviewing product managers, we would take these packets and we would have all these different, we were doing structured interviews at the time. It was on a 4.0 scale. You need to discore above a 3.5. And if you had a 3.9, it was really terrific. But during these calibration sessions, people would argue. And I think that's when the, you know, you're not hiring exclusively based upon the metrics that are coming out of the interviews. There needs to be an advocate inside of the hiring committee and people need to argue back and forth. And I think that's where the emotional component definitely comes in.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “So there was this guy in Germany who was struck by lightning, and the part of his brain that created emotions was destroyed. And so there were all these psychiatrists.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “You did. Okay, yeah. I believe it. And his head of VP and strategy is a friend of mine from college. Her name's Maya. She's a skydiver, amazing background, wool traveler. She has these five key metrics that all recruiting teams should use. We had her at office hours at the Red Point San Francisco office. And the most interesting one, or the most surprising one for me was basically the recruiting sales cycle. How many days from first contact to offer letter? Basically, she said, if you can minimize that and there's this sub 30 days at Greenhouse, then you have a far more effective recruiting cycle. And so if you can take a really structured interviewing process plus a metrics driven recruiting platform, then she said, you know, and I believe it. They're incredibly successful with recruiting.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Also in the book, there's this company in New York called Greenhouse, which is a really fast growing applicant tracking system. And the hit, yes, yeah”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, so I was stunned to hear this. I remember going for a walk in San Francisco and this product manager and this SaaS company told me that only that unstructured interviews, which is when we interview people by asking them just kind of the typical questions, can only predict success in about 8% of the cases, which is far worse than a coin flip. And so what Adam Grant, who's a professor in this field, recommends is the first thing you do is you perform a structured interview. Everybody asks the same set of questions. And those questions are based upon the characteristics they're going to find success in this role. So the right way to recruit somebody is first, you define the role, you define what success looks like, and then you create a set of structured questions that the four or five people are going to be interviewing this person all ask and I'll rank on the same scale. And then Professor Grant also recommends doing actually basically a standardized test, like an IQ test. If you do those two things, then you go from about 8% predicted predictive capability to more than, I think it's 54%, which is a huge increase.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “It is, yeah, but the important thing about not listening to your boss is really coming to your own conclusions, using data to support your conclusions, and then having a point of view. That's the catchy headline, and that's the takeaway.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “I think the first thing is the leadership decides to start asking questions and they ask open-ended questions. So they ask things like, how can we improve sales? How can we increase our price point? How can we differentiate relative to this competitor? How can we hire better? How can we retain people? Questions have this unbelievably empowering aspect to them, which is if you ask one of your lieutenants an open-ended question, they feel a sense of responsibility and they're going to rise to the occasion. And the best way to answer those questions, a lot of times people answer it with opinions, but the best way to answer it is finding data and building a case and making an argument. And so that's going to create the need and the volition inside the company to use data to answer questions. I think that's how it starts. What ends up happening then is that the senior leadership of the company infuses the whole company, bottoms up with data. Sometimes it happens that there's a couple of individuals who come in and say, hey, this is, you know, we need to use data in order to solve this problem, but it has to come both from the top and from the bottom in order to be successful.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “It's a really hard question. I think the companies that are really data driven have cultures, they have a questioning culture. There's this famous quote that said, it basically said, if we have data, let's go with the data, but if we have opinions, let's go with mine.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “The key metrics for the business once and for all. And then the third thing is what we call in the book at the data pipeline, which is a way of getting the data from the deep recesses of”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “He was doing a bunch of analysis internally. Two different teams internally, they had the same metric, but they had defined it differently.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Like office hour Tech talks and that kind of thing. The second thing is a product of the data team. It's this data dictionary.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Their indust Are three things they do? The first is they have a data team, and this exists at Facebook, it exists at Zendesk, and these data teams, they're structured a little bit differently, but they all basically do the same thing. They're the experts.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “We had all this wonderful material to kind of illustrate and narrate the way that all these transformational companies are”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “You would invest in a software company, what would it be? He had this amazing response. He said, I would ask the CEO, how many meetings the sales team needs to set up so that the company hits its bookings number next month? He asked that question because it shows a really deep understanding of the way that a company works. That kind of insight, that's when you know you have a data-driven business, and so that's really attractive.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “We wrote it because, like you said before, this data driven theme, I've really been excited about data for a long time. And one of the benefits of working at RedPoint is I've been able to see the differences between data-driven companies and companies that are less data-driven. The biggest difference among them is that data-driven companies tend to iterate faster. Like, you know, I was talking to an angel investor the other day, and I was asking him.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “At that point, right? It was crawling all the world's information. And I was working in the AdSense team, and we were kind of neck and neck early 2005. We were neck and neck with Yahoo, which was the big competitor trying to run ads on other people's websites. And we were trying to figure out who had the lead and which sites would be a good list to target for us to compete for that business. And so a friend of mine in the engineering team named Sanjeev, he and I built a tool using the Google search index to figure out exactly where Yahoo ads were running, where Google ads were running. And basically every day we could tell you exactly what the competitive market share would be. And so those are probably the two big points that really kind of changed the way we operated.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Yeah, well, so it's more of a sequence of aha moments, but the very first one was when I was 17. I was living in Santiago, in Chile, and I was working for a law firm at the time. And the managing partner said, hey, we're three months behind in our bills. And so one thing led to another, and I ended up founding a company with my dad. I remember sitting down on this one Tuesday afternoon with the managing partner of the law firm, and I told him, I said, here are your top performing attorneys, here are the ones I don't think are doing so well. And he got up in the middle of the meeting and he walked me into another senior partner. And he said, this 17-year-old knows exactly who our best performing attorneys are. And he's been here for four weeks. And I was like, wow, with just a little bit of data, the stuff that we were collecting about who was billing hours and the interactions between the attorneys and the clients, we knew a whole lot. That's when I was like, maybe there's something to this. And then I remember at Google, you know, I started in Google in 2005, and it was kind of the center of the world for data.”

    2016-09-12 · The Twenty Minute VC · 20VC: Redpoint's Tom Tunguz on Winning with Data: How To Gain A Competitive Advantage & Dominate Markets with Data and 5 Steps To Create A Data Driven Company · IDENTIFIED FROM THE TRANSCRIPT · source