Brad Feld

Tag: mobius

I’ve made a lot of major decisions in my life – both personal and professional. For the professional ones, I’ve come up with an approach that I now use consistently. I try on the decision for a period of time – the more significant the decision, the longer the period of time. For the really major decisions, I try them on for 30 days.

Here’s an example. In 2003 I seriously thought about quitting Mobius Venture Capital. I was tired, burned out, and very frustrated. While I’d been a partner in Mobius from the beginning, I hadn’t really been engaged in managing the overall firm. I had my office and a small team in Boulder. I did my deals. I flew to the bay area often (where everyone else was located) but focused most of my energy on the boards I was on and the investments I’d made.

My whole world blew up in 2001. My portfolio melted down with the bursting of the Internet bubble. I was on way too many boards (over 25 – including four public company boards) so the entire thing was a total shit show. In addition to being miserable at work every day, I was 30 pounds overweight, drinking too much, traveling constantly, and involved in laying off thousands of people and shutting down over a dozen companies.

Then, on 9/11, all Americans participated in a massively traumatic event. I was in New York for it, having taken a redeye the night before from San Francisco. I was never in harms way, but 9/11 triggered a major depressive episode for me. When I got home to Boulder the night of 9/12 (after driving all night on 9/11 and all day on 9/12) I shut down all travel through the end of the year.

The depressive episode only lasted three months, but the shit show continued through 2002 as most VCs and Internet companies suffered a massive collapse. While my world started to settle down in mid-2002, the rest of Mobius started to more aggressively fall apart. There was no joy anywhere.

In early 2003, I started to think about leaving Mobius. While I was trying to be helpful in general to the firm and my partners, I didn’t like the way we were operating. I felt like we had way too many people, too much denial about the reality of our situation, and were making many bad decisions simply to defer the inevitable pain that was resulting from the collapse of the Internet bubble.

I woke up one morning in February 2003 and decided to spend a little time each day pretending like I had quit Mobius. I allowed myself to think about it twice a day – when I first woke up and when I went to bed at night. During the day I continued to work my ass off on everything I was doing for Mobius. But I gave myself two periods a day where I contemplated what a different work life might look like.

During these periods, I wrote down what I was relieved about. As the month went on, at the end of the day I started writing down what I was unhappy about at Mobius. In the morning I’d clear my mind as though I didn’t have anything in front of me to deal with that day, and then go into battle and deal with whatever was in front of me. At the end of the day, I’d repeat the thought process. And, at least once a week, I talked to Amy about what I was thinking about.

A clear pattern emerged for me. I didn’t dislike the work, even though most of it was not very fun. I felt a strong sense of responsibility for Mobius since I had helped create and contribute to the mess we were in. I felt a deep obligation to all the various people involved – the founders we had invested in, our LPs, and all the people who were still working for Mobius. But I didn’t feel engaged in the decision making that we – as a firm – were doing to get out of the ditch we were in.

After 30 days, I had a clear understanding that quitting Mobius was not the right answer for me. Instead, I needed to commit to engaging completely and taking responsibility for the whole firm, not just my corner of it. This didn’t mean taking over everything, but it did mean going all in on trying to make things better, whatever that meant.

In March 2003 I fully engaged in Mobius. While 2003 – 2006 was an incredible grind, I look back on that time period as one that I am satisfied with as we did manage to get Mobius to a stable place. I learned an incredible amount about running a VC firm through the work I did in that time period. And, with my partner Jason, we still manage what is left of the portfolio (still several hundred million of assets) simply because it is the right thing to do for the LPs.

When I reflect on the decision, I was only able to make it because I gave myself 30 days to really consider the decision and the various options. I’ve used this approach many times since, for decisions large and small, and it has served me well.


Yesterday I read Kara Swisher’s post What Does the Recent Tech Stock Downturn Mean? The Truth Is Nobody Knows. It’s great. Go read it – I’ll wait for you.

In the last two weeks there’s been a flurry of articles about the implications of a 25% decline in the public market value of a bunch of Internet stocks. They range from “the sky is falling” to “the IPO market window is closing” to “there will be more stupid television shows about Silicon Valley” (I prefer Game of Thrones and 24, thank you very much.)

As many of the Cylons from BSG are fond of saying, “All this has happened before, and all of it will happen again.”

I remember a moment in time in 1997. We were in the middle of fundraising for Softbank Venture Capital (which became Mobius Venture Capital.) It was the first VC fund I’d helped raise. We probably had about $150m committed and were running around trying to get to $300m for what we had positioned as a dedicated Internet VC fund. I can’t remember the month, but I think it was in the summer, that all the public Internet stocks dropped a bunch (probably 25%). Suddenly every meeting we had turned cold with all of our potential LPs either asking how we were going to make money on the Internet or asserting that there was no way that we’d make money on the Internet. A few months later the public markets for Internet stocks turned around and we closed a $330 million fund which ended up doing extremely well.

In 1999 we filed an S-1 to take Sage Networks public. I was a co-founder and co-chairman. We were planning to go public in the early spring, but in February we acquired a company called Interliant which doubled our side. We had to grind through a refiling of our S-1 which cost us a month. We finally hit the road with the intention of going public by the end of April. Our underwriters (Merrill Lynch) told us not to worry that the SEC hadn’t cleared our filing yet – they always did it a few days before you went public. I spent three weeks on a road show with our president and CFO building the book. Day after day passed and we didn’t hear from the SEC. Two days before we were supposed to price, the book was 10x oversubscribed and our $9 – $11 price looked like it could move up meaningfully. They day we were supposed to price we still hadn’t heard from the SEC. “Don’t worry” said the banker at Merrill Lynch, “We’ll get it done.” The next day, when we were supposed to be trading, a fax came through from the SEC. It was 20 pages long and had about a month’s worth of work to pull together on the F-pages of the filing (we had acquired 20 companies.) That night we all drank a lot of scotch – we knew the IPO wasn’t going to happen that week and we’d just wasted a road show. I remember being completely numb the next day as I flew home from NY to Boulder, not completely understanding how we had just blown the IPO.

A few weeks later Internet stocks started to fall. I vaguely recall that eBay was one of the bellwethers at the time and I think it had a big drop. Suddenly the IPO market window closed. No one was interested in Internet stocks, let alone one that was being tortured by the SEC for accounting disclosure on a bunch of acquisitions of tiny companies.

At the end of June I went to Italy for a week vacation with my wife Amy and my parents. We did a walking trip which I remember being wonderful – 10 miles a day finished off with lots of food and wine in a beautiful Italian countryside. No phones, no email. Until Thursday, when I got a call at the villa we were staying at from one of my board members who said “you have to come home right now.” I responded with “I’m flying home Sunday and will be back on Monday.” He said, “No – now – the road show starts again Monday and you have to be at the printer on Saturday to sign off on the filing.”

I scrambled to find a flight home from the middle of Italy, got to NY by Saturday mid-day, re-started the road show on Monday, and we were public by the end of the week. We went out at $10 and traded up to $15. When I checked the market indexes, they were basically the same as they were two months earlier before things dropped.

Lots of folks are going to pontificate about what is going on in the public markets. Most have an agenda or a vested interest.

If you are an entrepreneur, ignore the pontification and go build your business. Pay attention to the dynamics in the macro, since they will impact you, but don’t get caught up in. Don’t create a narrative to justify something that is going on. Focus on the reality – your reality – and do your best operating in the context in which you can’t control.

All this has happened before, and all of it will happen again.