The 'Mattress Test' for the Value of Any New Business
How does venture capitalist Ben Lerer decide which opportunities are worth investment? Lerer follows the inevitable path of disruption, targeting areas of the world that have not yet been disrupted by the internet but soon will.
Ben Lerer is a Managing Director at Lerer Hippeau Ventures and co-founder & CEO of Thrillist Media Group. Lerer was among Ernst & Young’s 2013 Entrepreneur of the Year Award Winners, Vanity Fair’s Next Establishments, Crain’s “40 under 40”, Forbes list of “Most Powerful CEOs Under 40”, AdWeek’s “Young Influentials,” Entrepreneur Magazine’s “Top 5 Entrepreneurs of the Year,” and Silicon Alley Insider’s “100 Coolest People in Tech”. He chairs the Board of Directors for the East River Development Alliance, a New York non-profit organization, and is an Associate Member of the International Academy of Digital Arts & Sciences (IADAS). Mr. Lerer is an active mentor for NYC Venture Fellows, TechStars and E[nstitute].
Ben Lerer: Probably the easiest way to think about how we think about opportunity is any area, any sector, any business that has not yet been totally disrupted by the existence of the internet will be. And so as we meet people who are starting companies, one obvious place to focus on is what has changed about the way that business gets done in that category since the internet has existed and since sort of the world has gotten smaller and smaller and smaller with each passing minute; what has changed and what could change that hasn’t? And so I’ll use a great example of a company I invested in recently. It’s a mattress company and it’s a really — it was a really easy investment for me to make because as I spent time with the founders of this business, the thing I kept going towards in my mind was shopping for a mattress totally sucks and the way that I would shop for a mattress today is basically the same way that I would shop for a mattress five years ago or 10 years ago. Maybe I’ll go online and read some reviews but I don’t trust the places that sell me mattresses. I don’t really understand the difference between them. Lying down on one for 10 seconds at a mattress store does not tell me if it’s going to be a comfortable, good mattress for me long term.
And for us, before we identified that there was — that the solution that this company we invested in — that they had the right solution, what we had first identified is that there was a problem and that the business was solving a real problem. And I think that as we look at companies you always want to make sure that the founders are building a product that solves an actual problem that exists. Make people’s lives better with what you’re building and generally you’re heading in the right direction. You see lots of people starting companies because it’s cool to be an entrepreneur. And a business could exist to do something. The idea between a business could exist and a business should exist — there is a gap between those two things and if you ultimately think about who you’re servicing and if there’s a market where you’re going to make someone’s life significantly easier, that’s probably a pretty good direction to go in. And so I don’t know that we — when we think about investing at LHV we say, "Well we think healthcare or we think financial technology or we think media or we think commerce." We think all of those things. But within those big sectors, there are lots and lots and lots of solutions to problems that need to be invented. And so as long as we stay diligent about making sure that the companies we invest in are truly solving problems, I think we’re going to win more often than we lose.
How does venture capitalist Ben Lerer decide which opportunities are worth investment? Lerer follows the inevitable path of disruption, targeting areas of the world that have not yet been disrupted by the internet... but soon will. Lerer seeks out sectors with glaring problems, major holes that need to be filled. By projecting the path of eventual disruption, savvy investors can make prescient decisions ahead of the curve. They're also able to identify startups set on solving real problems rather than existing for the sake of existing.
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Astronomers spot an object heading into Earth orbit.
Minimoons<p>Scientists have confirmed just two prior minimoons. One was <a href="https://en.wikipedia.org/wiki/2006_RH120" target="_blank">2006 RH120</a>, which orbited us from September 2006 to June 2007. The other was <a href="https://en.wikipedia.org/wiki/2020_CD3" target="_blank">2020 CD3</a>, which got stuck in the 2015–2016 timeframe, and is believed to gotten away in May 2020.</p><p>2020 SO, the new kid on the block, is expected to arrive in October 2020 and pop out of orbit in May 2021.</p><div id="37962" class="rm-shortcode" data-rm-shortcode-id="f4c0fc8a2cba6536ea4cd960ebed3e6e"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1307729521869611008" data-partner="rebelmouse"><div style="margin:1em 0">Asteroid 2020 SO may get captured by Earth from Oct 2020 - May 2021. Current nominal trajectory shows shows capture… https://t.co/F5utxRvN6Z</div> — Tony Dunn (@Tony Dunn)<a href="https://twitter.com/tony873004/statuses/1307729521869611008">1600621989.0</a></blockquote></div>
Identifying 2020 SO<p>The first clue 2020 SO isn't your ordinary asteroid is its exceptionally low velocity. It's traveling much more slowly that a typical asteroid — their <a href="https://www.lpi.usra.edu/exploration/training/illustrations/craterMechanics/" target="_blank">average rate of travel</a> <a href="https://www.lpi.usra.edu/exploration/training/illustrations/craterMechanics/" target="_blank" rel="noopener noreferrer"></a>is 18 kilometers (58,000 feet) per second. Even <a href="https://en.wikipedia.org/wiki/Moon_rock" target="_blank">moon rocks</a> sent careening into Earth orbit by impacts on the lunar surface outpace pokey 2020 SO.</p><p>For another thing, 2020 SO has an orbital path very similar to Earth's, lasting about one Earth year. It's also just slightly less circular than our own orbit, from which it's barely tilted off-axis.</p><p>So, what is it? <a href="https://cneos.jpl.nasa.gov/ca/" target="_blank">NASA estimates</a> that the object has dimensions very reminiscent of a discarded Centaur rocket stage from the <a href="https://en.wikipedia.org/wiki/Surveyor_2" target="_blank" rel="noopener noreferrer">Surveyor 2 mission</a> that landed an unmanned craft on the moon. Back in the day, rocket stages were jettisoned as craft were aimed toward their desired position. This stuff, if released high enough, remains in space. It appears that this Centaur rocket, launched in September 1966, is now making its way back homeward, at least for a little bit.</p><p>When 2020 SO arrives at its closest point in December, the rocket is expected to be about 50,000 kilometers from Earth. Its next closest approach is much further: 220,000 kilometers, in February 2010.</p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQzMDk3NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyODg1MTQ1MX0.HGknDwqp0GmeuczKY_AS7vrPG7KMFUc_XO95tNoI2xo/img.jpg?width=980" id="e5cda" class="rm-shortcode" data-rm-shortcode-id="85eb1f790d8c3ee5b261f7ba13eaa5e1" data-rm-shortcode-name="rebelmouse-image" alt="Centaur rocket stage" />
Centaur rocket stage
What we may be able to learn<p>Earthly space programs being as young as they are, scientists would love to know what's happened to our rocket during a half century in space.</p><p>While 2020 SO won't get close enough to drop into our atmosphere, its slow progress has scientists hopeful that they'll still get some kind of a decent look at it.</p><p>Spectroscopy may be able to reveal what the rocket's surface is like now — has any of its paint survived, for example? Of course, being out in space, it's likely to have been hit by lots of dust and micrometeorites, so the current state of its surfaces is also of interest. Experts are curious to know how reflective the rocket is at this point, valuable information that can help planners of future long-term missions anticipate how well a craft out in space for extended periods will remain able to reflect sunlight.</p>
Yet 80 percent of respondents want to reduce their risk of dementia.
- A new MDVIP/Ipsos survey found that only 35 percent of Americans know the symptoms of Alzheimer's disease.
- Eighty percent of respondents said they want to reduce their risks.
- An estimated 7.1 million Americans over the age of 65 will suffer from Alzheimer's by 2025.
Credit: logika600 / Shutterstock<p>Remaining healthy requires regular screenings. Here again we see a disassociation between risk reduction and proactivity. Seventy-seven percent of respondents don't talk to their doctors about lifestyle habits that support brain health; 51 percent have never been screened for depression; 44 percent have never had a neurological exam; and 32 percent have never been screened for hearing problems. </p><p>Common early warning signs of dementia, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">according to</a> Dr. Jason Karlawish, co-director of the Penn Memory Center, include repetitive questions and stories, difficulties with complex daily tasks, and trouble with orientation. </p><p>In terms of intervention, <a href="https://bigthink.com/21st-century-spirituality/does-lack-of-exercise-lead-to-dementia" target="_self">exercise</a>, <a href="https://bigthink.com/surprising-science/obesity-dementia" target="_self">diet</a>, building a <a href="https://bigthink.com/mind-brain/brain-reserve" target="_self">brain reserve</a>, and challenging your brain (such as learning a new language or musical instrument) are all proven methods for staving off the ravages of Alzheimer's. Oxytocin has also <a href="https://bigthink.com/mind-brain/alzheimers-oxytocin" target="_self">showed promise</a> in brain-addled mice, while researchers found positive results for a <a href="https://bigthink.com/mind-brain/intermittent-fasting" target="_self">group of intermittent fasters</a> in promoting neurogenesis. </p><p>Epidemiologist Bryan James says that dementia is <a href="https://www.npr.org/sections/health-shots/2013/04/15/176920391/how-exercise-and-other-activities-beat-back-dementia" target="_blank">not an inevitable result</a> of aging. </p><p style="margin-left: 20px;">"It's simply not pre-destined for all human beings. Lots of people live into their 90s and even 100s with no symptoms of dementia." </p><p>Professor of neurology at Boston University School of Medicine, Andrew Budson, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">recommends</a> aerobic exercise and the Mediterranean diet. As has long been known, whole grains, fruits and vegetables, fish and shellfish, and healthy fasts like nuts and olive oil seem to have brain-boosting properties. </p><p>To learn more, take the <a href="https://www.mdvip.com/brain-health-iq-quiz" target="_blank">Brain Health IQ quiz</a>.</p><p><span></span>--</p><p><em>Stay in touch with Derek on <a href="http://www.twitter.com/derekberes" target="_blank">Twitter</a>, <a href="https://www.facebook.com/DerekBeresdotcom" target="_blank">Facebook</a> and <a href="https://derekberes.substack.com/" target="_blank" rel="noopener noreferrer">Substack</a>. His next book is</em> "<em>Hero's Dose: The Case For Psychedelics in Ritual and Therapy."</em></p>