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Marc + Mark
The Hustle, aka. your new best friend
to me
Mr. Andreessen was advising Mr. Zuckerberg when he was supposed to be looking out for investors. Whoops.
The Hustle Fri, Dec 9

Who are you really working for, Andreessen?

In the wake of Facebook’s stock restructure, a clause that would allow Zuckerberg to run for public office has shareholders sweating.

And now, it’s looking like Zuck had a man on the inside (Marc Andreessen) to get it past the board.

Andreessen, meet lawsuit

Investors are now suing the venture capitalist and long-time Facebook board member for advising Zuck during the restructure, when he was supposed to be looking out for them.

During the negotiations, Andreessen had been chosen to be part of a special committee to represent shareholders, specifically because he would be the most impartial in the decision.

Bit ironic, huh?

How did he break the rules?

Umm, among other things, live-texting Zuckerberg with advice during his meeting with the board. And not just subtle hints, either. More along the lines of “NOW WE’RE COOKING WITH GAS” and “This line of argument is not helping 😊 .”

Yes, Marc sent Mark a smiley face emoji mid-meeting. That happened.

And it’s not like he didn’t know what he was doing…

This guy’s been around the block. Not only did he help invent the first popular web browser, he co-founded VC firm Andreessen Horowitz, which invests in Airbnb, BuzzFeed… and of course, Facebook.

Plus, he’s been accused of sabotage before. Just a few years ago, he “stepped” off the board of eBay after fighting for the company to drop PayPal as its payments platform… all while investing in its competitors.

Andreessen fiercely denied these accusations, but the point is he should know better than to play both sides.

Okay wait, back to that clause… is Zuckerberg running for prez?!

We’re still hung up on it too, and it’s entirely possible.

On a high level, the restructure lets Zuckerberg keep voting control of the company, even if he sells most of his stock (for example, to help the Chan-Zuckerberg Initiative).

But, it also contains a caveat, which allows him to remain CEO in the event that he runs for public office. Meaning he could be the first president to wear a hoodie on the campaign trail (seriously, try to picture him in a suit).

Spotify doesn’t want Soundcloud’s mixtape

Just months after being in “advanced talks” to buy SoundCloud, Spotify has decided against it, due to concerns that an acquisition would negatively impact its planned IPO.

This is the third time in two years that Spotify’s backed out on the ‘Cloud, with price being the sticking point on the previous 2 occasions.

Wait, Spotify is going public?

They haven’t made an official announcement, but there’s been plenty of speculation. Plus, back in March, the Sweden-based company raised $1B in convertible debt with terms that make a 2017 IPO much more favorable.

Here’s TechCrunch to explain:

“TPG and Dragoneer get to convert the debt to equity at a 20% discount of whatever share price Spotify sets for an eventual IPO. And if it doesn’t IPO within the next year, that discount goes up 2.5% every extra 6 months.

Spotify also has to pay 5% annual interest on the debt, and 1% more every 6 months up to a total of 10%.”

IPO or not, this is probably the right move by Spotify

Look, SoundCloud is great. Music fans love it, independent artists love it, and that bright orange color scheme is lit.

But at the end of the day, it’s a money-losing operation, having lost nearly $15M year over year since 2013.

Sure, annual revenue for 2016 jumped 43% to $28m thanks to its new $9.99 subscription service and for that, they deserve a gold star. However, given the scale of SoundCloud’s prior losses, they’re still probably light years away from breaking even.

That makes an acquisition risky. And, it gets worse…

Our friends over at Mattermark wanted to determine the actual business value of SoundCloud, so they did a market comparison to Pandora. Check it:

Pandora is worth $3.26B, and in its last 4 quarters, did $1.33B in revenue. That’s a revenue multiple of 2.45.

By that math (remember, SoundCloud did $28m), SoundCloud is worth $68.6m. That’s less than a third of the total money it’s raised and about 10% of what it was valued at when Twitter invested in June. Yikes.

Coming to a computer near you…

Apple wants to convince Hollywood to let them release movies on iTunes while they’re still in theaters.

And studios like 21st Century Fox, Warner Bros., and Universal have already pledged to offer rentals as soon as 2 weeks after their release… they’re just not saying through whom.

This isn’t a new battle for Apple…

In fact, they’ve been trying to be a contender in the streaming space for a while now. Unfortunately, they’re not the only ones vying for Hollywood’s attention.

Sean Parker (founder of Napster) wants to create a “premium service for home entertainment” called Screening Room, but it’s gonna set you back about $25-50 (gotta make up for that popcorn somehow).

At least one of these services will likely be available by 2018, which is great for us, but kind of a bummer for theaters, right?

Actually, they had a pretty raw deal to begin with…

Traditionally, studios give theaters exclusive rights to their films for at least 90 days before releasing them online.

However, they have to lease the physical film from a distributor in exchange for a percentage of their ticket sales, which decreases over time (75% in the first 2 week, 50% in the next two, etc.).

Wait…

So theaters only get to keep 25% of ticket sales for a new release?

Yep, and that’s not even the worst part. People just aren’t going to the movies anymore. Ticket sales have been on a steady decline for the past 15 years and they’re not showing any signs of stopping.

Sadly, the future of movie dates is looking grim. But, if Apple has anything to say about it, the era of “iTunes and chill” may be well on its way.

Willingness to learn > business acumen

Investors want to back people who they can mentor. Why? Because most of them believe (rightfully so) that their time and expertise is just as valuable as their money.

Plus, let’s be honest, nobody wants to write a check to a know-it-all who thinks taking someone else’s advice is a sign of weakness.

What does this mean for all you entrepreneurs out there?

Well, according to several academic studies, it means that the more willing you are to “accept feedback and engage with suggestions” during a pitch, the better chance you have of getting funded.

In fact, one study concluded that coachability has an impact “regardless of how strongly investors rank a business’ economic fundamentals or the competence of the team.”

In other words, learning to be more open to advice could actually have a greater impact on your business than, say, perfecting the art of marketing… which should excite you because only one of those things can be done overnight.

How do you ensure that your coachability comes across?

Since demonstrating a “willingness to learn” is easier said than done, both during a pitch and directly after it’s over, here are a few pro tips:

  • During your pitch, take an interest in the investor’s perspectives and ask for advice based on their past experience. This will make them feel valuable and wanted — who doesn’t like that?

  • After the pitch, follow up with the steps you plan on taking based on their feedback. This shows an ability to not only listen to advice, but actually act on it.

  • Hire people who are equally coachable and encourage that quality in your current employees.

No witty conclusion here, just wanted to say congrats! You read at least 1,300 words today. Way to go, winner.

What sucks and rhymes with Bob Merch?

If you answered job search you are absolutely correct! And if you said Simon Birch… good movie. Anyway, are you in the market for a new job, friend? If so, you should probably enter your email to win:

Grand Prize: The Muse’s Ultimate Job Search Coaching Kit, which includes an assessment to understand your career goals, a resume/LinkedIn review, and in-depth interview prep with a Muse-certified career coach.

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THE FINE PRINT: Ends December 14 at 9pm EST, gotta be a human 21 or older

friday shower thoughts
  1. What if only the labels are made in China.
  2. Spiders probably get intimidated when they see a guy laying in a hammock.
  3. Clothes that are too dirty to be in the closet yet too clean to be in the laundry basket: Welcome to the chair.
  4. Letting your date use your phone charger, even though you’re at 10%, is the modern day equivalent of putting your coat over a puddle.
  5. Even though I’m on a computer most of the day, I’m never on a computer in my dreams.
  6. via Reddit
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