B4| Saturday/Sunday, October 19 - 20, 2019 ** THE WALL STREET JOURNAL.
for a lifeline. The founder of the Y
Combinator incubator had helped
fund and develop young tech firms
including Dropbox Inc. and Door-
Dash Inc.
Before the meeting, the founders
created Obama O’s and Cap’N Mc-
Cain’s for the 2008 election cam-
paign, selling 500 cereal boxes at
$40 a pop to help pay off a binder
of maxed-out credit cards. But they
still needed more capital. At the
end of the meeting with a skeptical
Mr. Graham, the home-sharing
website’s co-founder, Joe Gebbia,
handed him a box of cereal.
“We had proven to him we had
hustle, we had grit,” Mr. Gebbia
said years later, acknowledging
how weak the financial case was.
“If we could figure out how to sell
breakfast cereal for $40 a box, we
could figure out how to make our
website work.”
Airbnb, which expects to go
public next year, was valued at $
billion as of March 2017 and has
driven big global changes to the
hotel and travel industries.
Data and analytics are only go-
ing to keep growing. As legendary
management consultant W. Ed-
wards Deming said, “In God we
trust. All others bring data.” But
you might want to pack a box of
cereal, too.Cassie Kozyrkov, Google’s chief
decision scientist (yes, such a job
exists at Alphabet Inc.), warned in
a recent Harvard Business Review
piece that data isn’t infallible.
Much like intuition, it’s malleable
and can be distorted to confirm
pre-existing biases.
An overreliance on data can
also numb the intellect and dull
decision-making skills. Multiple
studies suggest that managers who
bury themselves in data lose their
ability to see how their decisions
play out in the real world.
I’ve talked to several venture
capitalists who say that criticism
is inevitable when it comes to de-
cisions like the ones Mr. Son took
over WeWork. Upfront Ventures, a
Los Angeles firm, expects only a
handful of its three dozen or so in-
vestments every three years to de-
liver a meaningful return.
Many investment decisions are
made with precious little informa-
tion to work from. You’ve got to
be willing to deal with the multi-
ple swings-and-misses that come
on the way to a home run.
“I’m essentially looking at a 15-
year-old ballplayer and projecting
he’s going to be the next Mickey
Mantle,” said David Brophy, a fi-
nance professor at the University
of Michigan’s Ross School ofKPMG LLP’s recent global CEO
survey shows just 35% of execu-
tives highly trust their organiza-
tion’s data. Two-thirds of CEOs ig-
nored insights provided by data
analysis or computer models in
the past three years because it
contradicted their intuition.
Brad Fisher, KPMG’s U.S. leader
of data and analytics, said compa-
nies beefing up their analytics
units must also find ways to
sharpen executives’ instincts.
“You should collect as many
data points as you can,” he
said. “But don’t throw out your
intuition.”
Mr. Schultz’s intuition has been
cited in business schools as the
reason Starbucks successfully en-
tered new markets that experts
said would be impenetrable. Like-
wise, Bill Belichick, the New Eng-
land Patriots’ head coach, has said
he always prefers to “evaluate
what I see” over analytics.
Of course, Messrs. Schultz and
Belichick would be out of luck
without scouting reports, statis-
tics, growth forecasts and market
data. But neither of them are wait-
ing for a bean counter’s green
light to act.
Why? For starters, data can be
manipulated, hard to interpret or
impossible to apply.The Phone Call Isn’t Dead.
It’s Evolving.
Here’s a crazy idea: What if people started using their smartphones
to actually speak to each other again?
TECHNOLOGY|KATHERINE BINDLEY
EXCHANGE
PHOTO ILLUSTRATION: DAVE COLE/THE WALL STREET JOURNAL; PHOTOS: ISTOCK (3), GETTY IMAGES (2)
However, as his Vision Fund’s
high-profile bets onUber Technol-
ogiesInc. and WeWork stumble,
his reputation for valuing gut in-
stinct over cash-flow analysis has
sparked questions. Would a more
disciplined approach help him
avoid big losses?
Maybe. But the reason we’re
even paying any attention to his
predicament now is because of the
big wins he racked up before.
In 2013, for instance, I covered
Mr. Son’s risky $1.5 billion invest-
ment in an unknown Finnish mo-
bile game developer, Supercell. At
the time, people close to Mr. Son
told me he felt chemistry with its
founder. Mr. Son’s instincts were
profitable, selling his stake in the
“Clash of Clans” maker for $8.
billion less than three years later.
Mr. Son isn’t alone. Research
shows that most business leaders
trust intuition over analytics.Continued from page BAs Data Rises,
Instinct Is
Still the Key
Business and an adviser on ven-
ture-capital and private-equity
strategies. “If it doesn’t pan out,
well, that’s why they call it ven-
ture capital.”
Amazon.comInc. founder Jeff
Bezos is well known for encourag-
ing employees to avoid making
decisions without consulting
mounds of data. Companies want-
ing to work with the e-commerce
giant know not to make a pitch
without abundant data to support
their claims.Still, Mr. Bezos acknowledges
the need for a reliable gut. “If you
can make a decision with analysis,
you should do so,” he said during
a speech I attended last year. “But
it turns out in life that your most
important decisions are always
made with instinct and intuition,
taste, heart.”
The creators of a nascent
Airbnb Inc. used breakfast cereal
to appeal to investor Paul GrahamCollect many data
points, ‘but don’t throw
out your intuition,’ says
an analytics consultant.wouldn’t have as many friends on
TTYL as on Facebook or Insta-
gram—only people you’d actually
want to hear from.
“What our app allows you to do
is in a single tap, jump into some-
one’s ears and start a conversa-
tion,” says Mr. Ma.
Another new app called Chalk
allows users to combine a text
chat with the ability to quickly
switch to a voice conversation.
They can also go into listen-only
mode, where they can hear every-
thing but can’t talk back. (They
can text back, or quickly turn their
microphones back on.) The idea is
to reduce the time and effort it
takes to switch back and forth be-
tween communication modes.
“People were designed to have
voice conversations,” says Juyan
Azhang, 28, co-founder and CEO
of the company behind Chalk. “I
don’t think we were designed to
have phone calls, and I think peo-
ple lump those things together
and I guess our goal is in some
ways to peel that apart.”
Mr. Azhang thinks live chat has
more of a future than voice mes-It takes time for people to ad-
just their behavior. He acknowl-
edges it might even still be too
early for TTYL. For a voice plat-
form to really take off, Mr. Hoover
says, it’ll have to reduce as much
of the existing friction as possible
and be faster and easier than
what people can do now—kind of
like what Snapchat did for send-
ing photos.
Karsten Weide, an analyst with
International Data Corp., says he’s
not convinced there’s enough de-
mand for messaging services with
additional voice functions.
“Sure, you have teenagers or
people in their early 20s hanging
out in voice chat rooms with their
friends maybe but I don’t see this
as a mass phenomenon,” he says.
“I’m 56 and I hate using the phone.”
Mr. Weide says that in most
cases, text is going to be more ef-
ficient.
Peter Rojas, a partner at Beta-
works Ventures, a seed-stage ven-
ture-capital firm, says there’s a
benefit to not just tacking voice
onto a text chat app. It’s hard
enough to nail the user experiencewhen you’re focusing on audio
first, let alone making it a second-
ary consideration.
“You have to balance the things
that are special and better about
audio with the things that are an-
noying,” he says. He thinks it’s
worth a try, in part because of
this new generation of talkers. “If
you have never really spent a lot
of time using phone calls, your re-
lationship to audio is going to be
different,” he says.
Betaworks Ventures recently
announced an 11-week Audiocamp
that includes mentorship and
funding for startups focused on
audio, and the firm is in-
vested in Yac Chat, an au-
dio-messaging platform
for remote workers. Voice
messages are sent and
received the way instant
messages are, but the
person can listen to the
message whenever they
choose.
Mr. Rojas sees voice
messaging as a better fit
for the workplace. “Most
people don’t want to be on
a conference call all day,”
he says. But he thinks that
it does work with social
groups gathering to pay
attention to the same
thing, like a videogame.
Gaming pretty much set
the stage for modern-day
audio chat.
Chalk’s founder, Mr.
Azhang, is a former gamer
who was using a handful
of different platforms to
communicate with his
friends while playing
League of Legends. They’d
hop between texting in
iMessage and Messenger
and video calls on Skype.
Then, in 2015, Discord
launched as a platform for
people to communicate
through text and audio
while playing videogames.
It has since has grown to
56 million monthly active
users, many of whom
aren’t gamers.
Discord’s chief execu-
tive, Jason Citron, says
that one third of users
communicating through
voice chat on Discord
aren’t playing a game at
the same time.
“As more people have
adopted Disord, we keep
finding more and more
people using it for non-
gaming purposes,” says
Mr. Citron. “Perhaps it
was a leading indicator of
how people wanted to communi-
cate in general.”
Mr. Citron says he’s seen non-
profits offering mental-health ser-
vices like talk therapy on the app.
One Discord server has 450 trom-
bone enthusiasts who used voice
chat to make music together.
The company’s Twitter profile
no longer mentions gamers.
“We’re going through an exercise
now about how are we going to
talk about ourselves,” says Mr.
Citron. “It’s very much all-in-one
voice and text and video chat.”
Meanwhile, Epic Games ended
up launching a voice chat feature
that lets users talk, even when
they’re not playing “Fortnite.”
Facebook doesn’t share the
number of voice-only calls made
on its platforms though it did say
400 million people connect via
video and voice on Messenger
each month. A spokeswoman
didn’t divulge any plans for forth-
coming audio-specific features,
but she did note one finding: On
longer calls among teens, the
phone’s camera is often pointed at
the ceiling.saging, where people sling record-
ings at each other. That is already
a function of Apple Inc.’s iMessage
and Facebook Inc.’s Messenger,
WhatsApp and Instagram. This
type of voice messaging is popular
abroad but hasn’t really taken off
in the U.S.Voice-first platforms have
launched—and failed—many times
over the years, some of them not
too long ago. Ryan Hoover, who
invested in TTYL and runs the
startup-tracking service Product
Hunt, says there’s a graveyard of
audio-based apps on his website.
“Part of it is simply the tim-
ing,” he says. “AirPods did not ex-
ist. Bluetooth headphones were
far less prominent. Very few peo-
ple had smart speakers.”Not even half of
cellphone owners used
their phone for an actual
phone call this week.When researchers
at Yahoo Labs
wanted to learn
more about how
young people use
video chat, they
asked 16 teenagers in
the greater San Francisco Bay
Area to keep a diary for two
weeks. The subjects liked to multi-
task, cleaning their rooms and
scrolling through social media,
while talking with friends. Chats
sometimes lasted almost all
night—teens would go down for
dinner with their families, only to
come back upstairs and resume
the conversation.
“They would turn on a
video chat and then just
throw their phone some
place,” says Yahoo principal
research associate Frank
Bentley. “They’d basically
use it as open audio be-
cause the camera would just
be pointing at the ceiling.”
“Open audio” sounds a
lot like making phone calls.
But don’t tell those teens.
“It’s almost seen as rude to
call someone,” says Mr.
Bentley, who worked with
lead author Mia Suh, a
Ph.D. candidate at the Uni-
versity of Washington. It’s
as if they’re saying, “I am
going to disturb someone
and make their phone ring
and interrupt them and
kind of force them to pay
attention to me,” he says.
Talking was the most
popular way to communi-
cate via cellphone in the
fall of 2012, with 94% of
survey respondents having
done so in the prior week,
according to consumer-re-
search firm MRI-Simmons.
By the spring of 2019, talk-
ing had fallen to least pop-
ular, behind texting, email-
ing, posting to social media
and using chat apps, with
just 45% reporting doing it
in the prior week. In other
words, less than half had
used their phone for an ac-
tual phone call.
Multiple people I inter-
viewed said when the
phone rings unexpectedly,
they assume someone has
died. But some app devel-
opers and investors think
voice communication over
the phone isn’t the prob-
lem, just the act of making
a phone call itself. Between
the rise of smart speakers
and Apple’s wireless AirPod
earbuds, and the ubiquity
of group messaging and video
chat, they’re betting now might be
the time for voice to make a
comeback.
“Calling is fundamentally bro-
ken,” says Alex Ma, 26, co-founder
and CEO of the company behind
audio-chat app TTYL. “We went
from landlines to the iPhone X but
we haven’t changed the way we
call people.”
After Mr. Ma graduated from
college, he found it hard to keep
in touch with friends; texting
didn’t make him feel connected
enough so he started calling them
weekly. But the calls felt like they
had to be scheduled events.
The app he launched last summer
is like a voice-only version of
Houseparty, the popular video hang-
out app recently acquired by Epic
Games, the maker of “Fortnite.”
With TTYL (as in “talk to you
later”), you put your earbuds in
and open the app, then your
friends get notified you’re free to
talk. People can either keep a
“room” open for others to join, or
lock it for privacy. The app is de-
signed for small, close groups: You