Watch Me Use A Glowforge

If you’ve been following our Glowforge investment you will be familiar with the pre-order campaign they are currently running. Halfway through (with 15 days to go) they are now at $7.8 million.

Glowforge pre-order 15 days in

Yesterday, Dan Shapiro and I did a video of me creating a Foundry Group coaster out of a piece of wood. It was done remotely – I did all the design work on my computer in Boulder, uploaded it to the Glowforge cloud, and printed it on a Glowforge in Seattle. As a bonus, you get to see a VC (me) struggle with Adobe Illustrator, which – while being ubiquitous – is one of those pieces of software that can only be described as “a beast.”

If you haven’t ordered a Glowforge yet, use my referral code to get 50% off + another $100 dollars off. Given my experience with Dan and team so far, I think this is going to be one of the amazing products of 2016.

What Do You Want Your Legacy To Be?

Yesterday, I gave a talk and then did two breakout Q&A sessions at EO Alchemy 2015. It was a lot of fun and many of the questions were thought provoking to me, which I enjoy greatly.

One of them caused me to pause and answer extra deliberately. Near the end of the second breakout session, I was asked “What Do You Want Your Legacy To Be?

I don’t think I’ve answered this question before publicly and I realize I never think about it, so I took a few seconds to roll the question around in my mind and make sure I agreed with what was about to come out of my mouth.

“I don’t care about what my legacy is.”

My original thought was “I don’t give a shit about legacy”, but it came out a little cleaner and crisper. I riffed for a little while on why I didn’t care and gave evidence of me not caring. Two big things are (a) Amy and I don’t have any kids and (b) we plan to give away all of our money while we are alive. But there were some others, especially around intrinsic motivation (which I’m driven by) vs. extrinsic motivation (which I’m not).

When I got home last night, Amy and I talked about our respective day over dinner. I mentioned this question to her and asked her what she thought. Her immediate response was “You and I don’t care about legacy.” She then when on to explain this in detail, which mirrored most of what I had said earlier in the day.

I was clear in my answer that this wasn’t a judgement. Some people care deeply about legacy. That’s great. But others, like me and Amy, don’t. The more interesting thing to me is how one’s view around legacy drives behavior. The question stimulated a lot of thought by me over the last 18 hours – I hope it does with you also.

The Long and Winding Road to Rock Band 4

It’s here. And you know you want it. You can buy just the Rock Band 4 software (if you have your old instruments) or, if you are like me and you’ve given your instruments away, you can buy a new full bundle of everything.

And, in case you missed it, Spark Capital joined us an investor last week with a few other long time friends in a $15 million round.

I originally invested in Harmonix as an angel investor in 1995. It’s rise was well chronicled in this awesome Inc. Magazine long form story titled Just PlayBasically, Harmonix tried to go out of business every year between 1995 and 2005 and just managed to fail at that, always coming up with a new revenue deal or a small amount of financing to stay alive before it became an overnight success in 2005 with the original launch of Guitar Hero.

MTV acquired the company in 2006 for $175m plus an earnout, which after a long “discussion” that ended in 2013, resulted in a total purchase price over $700m. MTV decided to get out of the video game business in 2010 and sold the company back to the founders (Alex and Eran) and a small investor group.

In 2013 Alex and Eran asked me to join their board. We arranged a financing that made sense for both parties so Foundry Group could invest. Harmonix is easily the most accomplished video game company in the world around music and rhythm games and with the eventual, and long awaited emergence of VR, I can think of no better company around our HCI theme to work with. Spark Capital, which was one of the original investors in Occulus, agrees, which makes me very happy.

Rock Band 4 is now out. In states like Colorado where a certain substance is now legal, I expect we’ll have a new marketing tie in. In the rest of the world, let me just suggest that having played the new game, you’ll want to get a copy and dust off your old equipment.

And get ready for some stuff that is just going to blow your mind – now and over the next 12 months – from my friends at Harmonix in Boston.

Deal Certainty

We’ve seen several M&A deals collapse unexpectedly in the past two months. Each was at the signed LOI stage. There was no warning or evidence of an issue until the moment the CEO got the phone call from the acquirer saying the deal was off. In both cases, the explanation was vague.

I’ve also seen several financings fail to close recently. Two of them were late stage financings that were pulled by the investor at the last second. One of these investors is highly visible for doing late stage deals. The other was an investor I didn’t know much about. The explanation I heard from the founder in each case was again vague.

In contrast, we closed a deal in two weeks last month. The person on the other side was willing to give us a lower price in exchange for “deal certainty”, explicit words that she used. We are very pleased with the deal and the price and appreciated that our reputation for just getting it done resulting in a significantly lower price. Deal certainty has always been important to me and I expect it’ll become even more important in the next year.

You will be seeing a lot more deals that don’t get closed after the handshake, verbal agreement, or even a signed non-binding LOI. This is natural in this part of the cycle, when prices feel high to investors, there is a lot of competition for deals, and a goal of some investors and acquirers is to get an LOI or term sheet signed with an exclusivity period in order to give them time to make a decision.

There are also a lot of unsophisticated buyers and investors out there. They generally don’t value deal certainty, especially if they come from other industries where lots of deals fall apart.

At this stage, it’s very important that the founders, whether they are selling their company or raising money, know the experience of the buyer or investor. You need to know their process. You need to know their investors, especially if it’s a private company buying another private company. Understand the history of their deal execution. Ask about, and understand the process from LOI / term sheet to close.

Basically, don’t be naive. There are lots of investors and acquirers out there who have low to medium deal certainty. There are others how have high deal certainty. Do your work and know who you are dealing with before you engage in the process for real.

Are Things Moving Faster Than In 1999?

I spent the day yesterday doing Denver Startup Week stuff. I was on a bunch of panels and during one of the Q&A sessions someone asked something to the effect of:

“Now that things are moving faster than ever before, how do you deal with / keep up with them?”

I thought about it for a second and responded that I wasn’t sure the assertion was correct. I don’t think things are moving faster than ever before. I paused to make sure I believed that. Then I continued with my answer.

I was a freshman in college in 1983. It felt like things were moving at an extremely fast pace. I started my first real company in 1987. The pace of things was incredible. After I sold my first company, I started a company called Intensity Ventures to make all my personal investments from. The name kind of says it all. When I started making venture capital investments in 1997, the pace of things, and the amount of work I did, was massive. In 1999 things were moving so theoretically quickly that everything was a total blur.

After riffing on this for a while, I suggested we approach it differently. It’s not that things are moving faster, it’s that information is much more available and there’s much less friction around communication. My communication mechanisms in 1983 were a landline telephone, letters, newspapers, magazines, and an airplane. The only constant in that equation 32 years later is the airplane, and as far as I can tell it takes about the same number of hours (six) to get from Boston to San Francisco that it did in 1983.

By 1987 I was regularly using faxes and Federal Express (the only overnight mail I was aware of), but a mobile phone and email didn’t really show up until around 1993 for me. The web appeared in 1994 and a completely different method of communication started its long march into integrating in our universe.

While all of this was different, the pace of things – at least the intensity of how work got done – didn’t feel much different. I was young and had a huge amount of energy and ambition, so 100 hour work weeks were typical. Redeyes were the norm for me as I wanted to spent the least amount of waking hours on airplanes. By 2001 when the Internet bubble burst, I was completely exhausted, and then I began a relentless grind for several years of cleaning up the mess I had created, followed by another relentless grind of working to get Mobius Venture Capital into a steady place and ultimately starting Foundry Group.

I never once felt that things were moving slowly. Instead, as time passed, my approach to communicating with people changed, although lots of humans in my world still want to get together face to face or fly to meet me for 30 minutes when a video conference would be perfectly adequate.

But more significantly, when I calmly observe the world around me, we want to feel, like every other generation, that what we are facing right now is more complicated, more important, and changing faster than ever before in human history.

On an absolute basis, it might feel this way because of communication mechanisms. But if you take the first derivative, I think you’ve got a flat line, as the relative pace (when normalized for communication mechanisms) feels constant to me, at least during the 1983 to 2015 time period that I’ve experienced as an adult.

Remember – All this has happened before and all of it will happen again. Ponder this the next time you get on an airplane, even if it has WiFi.

Agree or disagree?