Watch: Why Are Tech Markets Booming While the Economy Reels?

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Watch: Why Are Tech Markets Booming While the Economy Reels?

Why is the stock market up if the economy is getting crushed? With so many people out of work, how is it that the market is soaring, by some estimates, to its highest point ever?

Spencer Rascoff, executive chairman at dot.LA, spoke with senior tech-focused executives at investment firm Evercore to discuss what's behind the trends. John Scuorzo, Evercore's senior managing director joined Zaheed Kajani, senior managing director at Evercore to break down Wall Street's perspective on what's happening in the current tech capital markets.


The two say there are several factors contributing to Wall Street's optimism. First, the enormous stimulus coming from governments.

"I think that the biggest and probably the most important driver of this is just the massive stimulus that all the central banks globally have put into the economy," Kajani said. "There is somewhere where this money has to go. If you've got more money chasing fewer assets, that drives price up."

Copy of dot.LA Strategy Session: Wall Street's Perspective

Also contributing, the two said, are several other factors, including low interest rates, international investment, and optimism for what cutbacks and introduction of new technology will mean for many companies' future profits.

"People generally have an allocation towards equities and bonds," said Kajani. "And because the rates are so low, your bonds just don't give you the same return. And that's driven even more capital into the equity markets."

That's been true overseas as well, where investors are looking for safe places to put their money, and the U.S. market appears like a good bet.

"If you have capital in Europe, or in Asia, which other market do you feel is the most stable in the safest market?" Kajani said, "And so, many people who follow the market closely often see the futures up every morning when you wake up. A lot of that money is coming from overseas capital that's entering the U.S. market."

Companies who have made cuts and had to incorporate new technology into their workflow as part after the lockdowns, may also be finding themselves becoming more productive as a result, even with a (temporary or permanent) reduction in staff.

"I think a lot of companies have realized they're being as productive with fewer people and using technology," Kajani said. "I think that actually may increase profits."

All that together, along with optimism that a vaccine will eventually solve many of the problems the world is currently facing, is helping to create the frenzy that the world is seeing on Wall Street, the two said.

Scourzo said that Evercore's projections point in that direction as well.

"Our data suggests that we exited the recession in May, and we're back to an expansionary period, though the cut was deep," he said. "We think we think we're moving in the right direction with the economy only, we estimate, 35% reopened,"

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About the Speakers

Senior Managing Director of Evercore John Scuorzo

​John Scuorzo , Senior Managing Director of Evercore 

John Scuorzo is a senior managing director and the Head of Technology Equity Capital Markets at Evercore, with responsibility for the origination and execution of equity and equity-linked transactions for the firm's global technology clients.

Mr. Scuorzo has been a trusted advisor to technology companies for nearly 20 years, most recently as managing director with Citigroup, where he ran its technology equity capital markets business.

Mr. Scuorzo has been at the forefront of the evolution of capital formation for most of his career and is recognized as one of the most experienced and innovative capital markets professionals in the Technology sector. Mr. Scuorzo has advised hundreds of leading companies across the globe, including Alibaba, Broadcom, CoStar, Despegar, Dynatrace, Facebook, Fastly, Globant, GoDaddy, GoPro, Grubhub, Guidewire, Microsoft, Ping Identity, Paypal, Palo Alto Networks, Pinterest, Presidio, Sailpoint, Slack, The Trade Desk, Uber, Upwork, Roku, Vmware, Wayfair and Zillow.

Mr. Scuorzo graduated from Georgetown University with a B.S. in business administration with a major in finance.

Zaheed Kajani, Senior Managing Director of Evercore

Zaheed Kajani, Senior Managing Director of Evercore

Zaheed Kajani is a senior managing director in the firm's technology corporate advisory business and leads the global internet and digital media practice. Zaheed was most recently a managing director and global head of internet and digital media at Citi. With almost two decades of experience, Zaheed has advised on over a 100 transactions in the sector. He has worked with companies raising private capital, public capital through IPOs, follow-ons and converts, as well as M&A.

Zaheed has an M.B.A. from UCLA's Anderson School of Management, a J.D. from UC Berkeley's School of Law and a B.A. in political science from U.C. Berkeley.

Spencer Rascoff, Executive Chairman of dot.LA

Spencer Rascoff, Executive Chairman of dot.LA

Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at TripAdvisor. In the fall of 2019 Spencer was a visiting executive professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' best seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.

https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la

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How To Startup Part 7: Scaling Your Business

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

How To Startup Part 7: Scaling Your Business
Image by SvetaZi/ Shutterstock

Congratulations – you’ve found a startup idea, learned how to name your business and successfully pitch to investors and employees, survive a downturn, build a Minimal Viable Product and find Product-Market Fit. Now it’s time “to scale," which is just tech-speak for growth.

When scaling your business, you are setting the stage to enable and support growth in your company for the long run. While rapid growth can be exciting, founders often place their focus on achieving it quickly and lose focus on what matters most. Scaling a business is very difficult, which is why the scaling stage should be thoroughly mapped out. When planning, here are the most important things to consider.

Hiring and Structuring Your Team

So you just raised your Series A or B, and now you’re looking to expand your team for the scaling stage. First, you need great leaders at the key functional areas of your company: product, engineering, marketing and sales. Of course you’ll also need great leadership at the other more support-oriented functional areas – HR, legal, finance, corporate development – but these can come slightly later. Once you have leadership in place in the core functional areas, the scaling stage requires a great recruiting function which allows the company’s headcount to grow. Recruiters are like flag-carriers or drummers in the infantry of an army.

In addition to having great recruiters, it’s important at this scaling stage that the relationship between the three core teams – product, engineering, and sales & marketing – is excellent, since this can make or break a company. Issues almost always arise when there is a lack of trust, failure to assume positive intent, lack of respect for other people’s functional areas and big egos.

Remember that employees who passionately share your vision and feel valued will work hard to help your business thrive. You’ll be able to grow by retaining and attracting top talent, who are loyal, feel fulfilled by their work, and as a result, work harder and smarter.

Building Your Go-To-Market Strategy

So you’ve come up with a startup idea, named the company, raised money, launched a minimum viable product with product-market fit and hired a team with enough organization and motivation to keep the company going. Great work, but you aren’t done yet. Now you need a go-to-market (“GTM”) strategy.

Think about a recent product you bought or an app you downloaded. How did you discover the company? Have they been able to retain you as a customer or user? Maybe you saw a TikTok from an influencer about the product or were referred to a business from a friend. These are examples of conscious GTM strategies devised by the company.

A go-to-market strategy is a step-by-step plan created to successfully launch a product to market. GTM helps you define your ideal customers, coordinate your messaging and position your product for launch. Examples of GTM strategies include creating referral programs for early users to bring in new ones, utilizing channel partners to push a product or service through an existing sales network and mobilizing social media influencers to promote a new product.

Product and Strategy Iteration

Once your product is on the market, you must continuously look for ways to improve it. Here are several common places to look for ideas for improvement:

- User activity. By following how people use the product, you can gather useful data such as what features are used most frequently, which are most avoided, and any unexpected uses of a feature.

- User problems. Even if you think your product is perfect, users will find problems for you. Learn what the major challenges holding back growth are and figure out how to solve them.

- TAM expansion. Ask yourself if there is a new product or feature that will expand your total addressable market.

- Cost and efficiency. Determine whether the benefit of developing a feature or product makes sense from a financial and efficiency perspective.

Other Resources

Looking for more info on scaling? I’ve had some great conversations with successful CEOs about their growth stories and scaling advice on the Office Hours podcast. Listen to my chat with Microsoft CEO Satya Nadella to learn more about the importance of a mission-driven team and leadership mindset plus my talk about growth through adversity with Slack CEO Stewart Butterfield.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la

B Capital Group’s Raj Ganguly on Investing in Global Tech

Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+ Shift.com, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
B Capital Group’s Raj Ganguly on Investing in Global Tech
Photo by Ian Schneider on Unsplash

On this episode of the L.A. Venture podcast, B Capital Group co-founder and partner Raj Ganguly talks about the new early-stage fund B Capital closed this week, as well as his outlook for startups in this rocky investing environment.

B Capital’s new $250-million, early-stage fund launched on Tuesday. The firm writes checks of between $250,000 to $8 million from its venture fund. From its growth fund, it writes checks of between $10 million and $100 million. Since launching, the group has backed 130 founders and now has over $6 billion in assets under management.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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