Brandon Gadoci

Husband & Dad. Director of Sales, Services & Research for Disruption Corporation. Principal for Crystal Tech Fund.

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Valuing Blackswans

I originally posted this on the Disruption Blog.


Black Swans are mysterious, rare, and elusive. As are some of the biggest valuation jumps in early stage growth companies. Take Quora, for instance.

In April of this year Quora raised a Series C round at $80MM on a $900MM valuation. That is more than double its valuation for its B round in May of 2012. And yet, Quora doesn’t make any money and doesn’t release any specific usage or user growth numbers. How could a third party ever predict that type of valuation increase?

At Disruption Corporation we attempt to do just that. Our research team rates companies across 13 metrics. These metrics include team strength, market momentum and unique advantage, to name some. We also look at market comparables, historical funding events, industry funding events, and actuals we find on a company. That research, combined with some...

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Q&A: Unique Investment Needs of Family Offices.

Below is a Q&A I did for our recent Disruption Corporation article Wealth of Opportunity: The Unique Investment Needs of Family Offices.

What makes Family Offices unique as investors?

Family Offices are unique because they are part of a small group of Advisors who are directing private client assets toward private market investments. Most of the major financial services firms prohibit their advisors from commenting on, recommending, or selling investments that their firms do have in their systems. This includes almost all early stage growth companies. For wealthy individuals this leaves a gap in their investment opportunities and more importantly their allocation. A gap that is emerging as a true way to shift the efficient frontier. Institutions have long allocated portions of their assets allocation to this asset class but individual investors, those like the ones that Family...

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Wrong

We’ve reached an interesting and exciting stage at Disruption. It’s the stage where everything is wrong, and I couldn’t be more excited about it. Here is what I mean.

Our product offering is likely wrong, but we have a product offering. Our sales process is probably not right, but we have a process. The newsletter frequency and content could be improved, but we have a daily and weekly newsletter. Our blog content should be more frequent, but we have blog content. Inbound marketing could be optimized, but we have inbound leads. We probably need to track different metrics than we are now, but we are tracking metrics. You get my point.

Before you can be wrong you have to have something to be wrong about, whether an opinion, a stance, a product or service. Something that says this is how we think our value is best brought to market, here is how we think we can let...

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Unqualified

As an early hire to a startup you will likely find yourself in a position where you are under-qualified for a certain job. Strike that. You will probably find yourself under qualified for several different jobs at the same time. Breathe. This is a good place to be; you will learn and grow. It’s usually just a matter of demystification and context awareness. That said, it can be intimidating when you have such a responsibility to keep the company afloat and manage expectations. For those who are up for the challenge but feel under-qualified, here are three things I’ve learned from being in a similar position.

Make sure you have a chance to win.

A lot of time failure occurs because it was the only option. The scope of the project was too big or the success was not properly defined. As you get handed a project, problem or department, know whether or not what you are trying to...

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Playing Company

When I was 10 years old I got my two younger brothers in a room and told them that we were going to start a company. We were to call it BWG, Inc. (my initials of course). All I needed was some business cards, memo pads, and to choose which of our bedrooms would be our HQ. We didn’t have a product or service to sell, but that wasn’t important to us yet. First and foremost, we needed to have meetings. So we grabbed our chalkboard-easel and huddled up in my room (since I was the CEO and all) and we were officially in business!

Surprisingly, BWG, Inc. didn’t last very long. We never created, offered, delivered or sold a thing. In fact we never even tried… but why would we? We weren’t interested in being a company. We just wanted to play one.

Playing company is easy.

Playing company is fun because you can do things like make t-shirts, throw parties, and...

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Tap The Data Brakes

A batter steps up to the plate and a coach signals to the pitcher to throw an inside curve ball. Why? Because the coach knows that the hitter swings and misses 75% of the time when the first pitch is an inside curve ball. The pitcher nods, tucks his chin, and throws the pitch. The batter hits a home run. Two innings later, the same coach has a decision to make. Does he stick to the statistics or consider the other variables at play tonight?

Data has different degrees of utility; it can be predictive or misleading. The degree to which data can be predictive or misleading is correlated with the control that one has over the experiment that is producing the data, i.e. control over the variables in the experiment. As control of the experiment decreases, the value of the expert increases.

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When a UX Designer is trying to figure out how to entice more people to click a signup button, data...

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The Invisible Game

In life there are two games that are always being played. One you can see and one you can’t.


Let The Games Begin!

In 2009, I hung up my cuff links and fake Rolex and decided to leave the world of financial advising. Prior to my time in wealth management, I was an entrepreneur, and I wanted to get back to those roots. At 30 years old with a nine-month old son, I changed direction. (you can read the rest of my story here and here).

In the following five years I returned to web design, taught myself Ruby on Rails, and launched a handful of products. For two of them, I tried to raise money. I met with the who’s who of investors through the network I’d gained as an advisor, including names like Mike Maples Jr., Kent Goldman, Silverton Partners, and Austin Ventures - the list goes on. Being new to the game, I read every article, tweet, and book on how to raise money and...

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Evolving The Hack

A friend once told me that a company is simply a conversation. More specifically I think he meant that a company is made up and guided by the conversations that take place within it. As a company evolves, it’s important that its conversations do as well.


What Is The Hack?

When founders launch the first version of their product and/or service, it’s almost always a hack. Most founders know this, some don’t (but realize it later). The hack is the version of the product that is held together with duct tape and sweat. It’s the version that looks like more than it is. It’s the version that might not work, and when it does it’s more of a surprise than expectation. The hack is hustle packaged up and made for sale.

We Like The Hack

In an early stage startup there is nobility, relatability, and opportunity in the hack. We love stories about garages and...

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Three Quick Tips on Selling

Most of the talk nowadays is about growth hacking and inbound marketing. I get it. They’re sexy; but let’s not forget about good old fashion sales. The truth is that we are all selling something.

As founders we are selling our vision to recruits, investors, and partners. As investors, we are selling ourselves into deals. As employees, we are selling our ideas and solutions.

This week I stumbled across a cold-call role play session from one of our portfolio companies. For fun I asked if I could have go as the cold caller. That simple exercise reminded me of three important concepts when selling just about anything. This week I thought I’d take minute to go old-school on some sales tips which I learned from my time leading a 60 person sales team at one of the world’s leading wealth management companies.

In any sales call there are three basic rules to keep in...

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Is It Time For Another Buttonwood Tree Meeting?

On May 17, 1792, twenty-four stockbrokers stood underneath a buttonwood tree and agreed upon two things: (1) They would only buy and sell securities through other brokers, and (2) each trade would cost 0.25%. Twenty-five years later this group of stockbrokers called themselves the New York Stock & Exchange Board (later shortened to the New York Stock Exchange). Two hundred and twenty-two years later, is it time for a buttonwood tree meeting for the private market?

History has taught us that when the buy side of a transaction gets solved (i.e., people can buy shares), then the sell side (i.e., people can sell shares) is solved soon after. We saw this with the societates publicanorum of ancient Rome, the East India Trading Company, the NYSE, the NASDAQ, etc.

I recently read an article from StockTwits co-founder Howard Lindzon where he was commenting on Uber’s 17 billion...

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