Brad Feld

Month: November 2004

Ok – Amy’s been making me watch too much Jeopardy these days (although I’ve had a blissful week off from it since I banned TV from this trip.) Fortunately, I can read while it’s in the background (plus Ken just wins all the time – what’s the fun of that.)

So – I picked up Getting Everything You Can Out of All You’ve Got with my typically cynical point of view toward marketing. As I wrote in my post Your Marketing Sucks (the title of my favorite marketing book to date), I expected very little from this book even though it was recommended in a comment to the forementioned post by Troy Angrignon (who I don’t know, but did appreciate the comment.) Troy highly recommended this book so it went into the “read some day pile.”

Some day came. For a marketing book, it was a notch above sucking. The pretty little “bonus star” on the cover says “21 Ways You Can Out-Think, Out-Perform, and Out-Earn the Competition” – never, in my mind – a particularly good sign. However, while the book was pretty simplistic, I found myself getting into it after about 100 pages. Jay Abraham (the author and self proclaimed “master motivator”) loads it up with examples – many of them commonplace ones that ironically made me think “oh – that makes sense – duh – why aren’t we doing that at company X.”

The chapters on Internet and email marketing were pretty lame, especially in contrast to the final publisher proof of Sign Me Up! by Matt Blumberg and the Return Path folks that I read earlier this week. But the rest of the book had plenty of straightforward but useful ways to out-think, out-perform, and out-earn the competition.

Ok – I’m done with business books for a while – time to go for one last run on the beach this trip and then disappear into The Runes of the Earth – Stephen Donaldson’s first book in The Last Chronicles of Thomas Covenant.

My official best book of Thanksgiving week is Hackers & Painters by Paul Graham.

I know Paul Graham indirectly through his role as founder of Viaweb, which was bought in 1998 by Yahoo! for $49m in stock. Viaweb was a startup in Cambridge that was down the block from NetGenesis (when I was chairman) and was part of the first wave of Cambridge/Boston-based Internet companies.

While I never knew Graham personally, I’d heard that he had a provocative personality (“provocative” in a good way – typical of the Cambridge / MIT / Harvard software set.) A look at his web site confirms this.

Hackers & Painters is a collection of Graham’s essays woven together in a captivating book. While I don’t agree with all of his thoughts – the book makes you think – which is refreshing. Blogging has helped stimulate the re-birth of the personal essay – which I love to read (and am trying to be effective at writing.) Graham’s book is 200 pages composed of 14 essays (at least half of which are likely to be interesting to anyone that is in the computer business, half of which are likely to be interesting to anyone that likes to think, half of which are likely to be interesting to people involved in startups, and half of which are likely to simply be – interesting.)

My favorite paragraph in the book is about startups in the essay titled How to Make Wealth. “A startup is a like a mosquito. A bear can absorb a hit and a crab is armored against one, but a mosquito is designed for one thing: to score. no energy is wasted on defense. The defense of mosquitos, as a species, is that there are a lot of them, but this is little consolation to the individual mosquito.”

Back to the beach for another day of running, reading, and thinking.

When some people think of Thanksgiving, they think of turkey and football. I think of sleeping late and reading a book a day.

Amy and I are in Cabo San Lucas and off to a good start. Beach running is much different from mountain running, but when you net everything out, it’s about the same effort.

I’m tracking to a book a day this trip. I started with The Dinner Club which is the story of a bunch of DC-area Internet heavy hitters – including Ted Leonsis, Art Marks, Mario Morino, Russ Ramsey, John Sidgmore, Rajendra Singh, Steve Case, Raul Frenandez, James Kimsey, Bill Melton, Michael Saylor, and Mark Warner – who started an angel group called “Capital Investors.” Their investments stunk, but the story of their dinners, the thought process at the time, and their respective struggles with the ending of the Internet-bubble was a nice “recently passed current events retro-read.”

The Warren Buffet Way was what you’d expect – a solid treatise on Warren Buffet by Robert Hagstrom. As one of the many people on this planet that are simultaneously fascinated by and in awe of Warren Buffett’s investing skill and style, this book exceeded my expectations and is a must read if you are into Buffett.

The best book so far is Raising The Bar – the story of Gary Erickson and his company – Clif Bar Inc. The first chapter starts off with the story of him deciding to walk away from the sale of Clif Bar for $120m on the day they were signing the definitive documents. He tells an awesome entrepreneurial story – both of the run up to this amazing decision to not sell – as well as the aftermath as he buys out his parter and recreates the magic of Clif Bar. Erickson is a great storyteller, adventurer, and entrepreneur – this one is an inspiration for anyone creating a company.

Enjoy your turkey.

Adam Bosworth – one of the dudes behind a bunch of software products (including Borland Quattro, Microsoft Access, Microsoft Internet Explorer and BEA WebLogic application server), gave a brilliant speech at ICSOC04 which he posted on his weblog. He espouses his idea of KISS as it pertains to the Internet (and modifies it to “keep it simple and sloppy.”) It’s a must read for any exec of a software company.


Nov 20, 2004
Category Random

My week felt like frame 3 of these pictures. Fortunately the weekend came just before frame 4.

A long time friend and entrepreneur – Terry Gold (Gold Systems CEO) – has started a blog.

I met Terry several months after I moved to Boulder in 1995. As part of starting up the Colorado chapter of the Young Entrepreneurs Organization, I had an initial meet and greet event for at The Boulderado for about a dozen local entrepreneurs that were referred to me by a handful of lawyers and bankers that I’d met shortly after I’d moved. Terry – along with Paul Berberian – were part of the group that night.

A few weeks later, Terry and his partner Jim Fudge came out to my house in Eldorado Springs. We went for a long walk (three miles round trip) in my backyard and I listened to them talk about the struggles they were having with their 15 person consulting firm. They were both on edge and in a not-so-good place I’d been many times when running my first company (Feld Technologies). I can’t remember the exact advice that I gave Terry and Jim, but shortly thereafter I joined the Gold Systems board and helped Terry assemble a true outside board of directors.

It’s amazing to me to look back and realize that I’ve been working with Terry for over eight years. While his company has grown nicely over this time, it’s been even more rewarding to experience Terry’s personal growth – both as an entrepreneur and a friend. I’ve always been a huge fan on Terry’s, but it’s remarkably easy for me to publicly say that I’d “go to the ends of the earth for him.”

Terry – welcome to the blogosphere.

I had a meeting yesterday with the VP of Consulting for one of my companies. The ostensible agenda for the meeting was to discuss how to accelerate their consulting / professional services business, which is a small, but growing and highly relevant part of what they do.

As we got into the discussion, I realized that the construct of “consulting and professional services” was bothering me. A pet peeve of mine is that “consulting” and “professional services” are fundamentally different things, even though many people and companies interchange them. I once had a company that had a group called CompanyX Consulting and Professional Services – I could never figure out why we didn’t call it one thing or the other (CompanyX Consulting, or CompanyX Professional Services.)

Professional Services is easier to define – in my little universe it’s what software companies do to implement and support their software products. One of my companies – Channelwave – provides professional services as part of their PRM software product. When you buy Channelwave’s PRM product, you also purchase professional services from them to help deploy and implement their product. This activity is almost always in support of a pre-existing product that addresses a well-defined need.

Consulting is a little harder to define, partly because it has a broader range. One of the large clients of my first company (Feld Technologies) was a strategy consulting firm – they typically did work for Fortune 1000 companies. Some of the work was high-end, CxO level consulting and business transformation (before that buzzword became popular) – this was clearly consulting. The Feld Group – now part of EDS – provided “CIO outsourcing” work to Fortune 100 companies – again – clearly consulting as Feld Group took responsibility for managing and running the IT organization for an F100 company.

It gets tricky when you mix both Professional Services and Consulting within the same company. Return Path has a young consulting group (which they refer to as strategic solutions) that helps companies understand how to be more effective with their email marketing. This is not in support of any specific Return Path product, yet in encompasses all of the capabilities that Return Path can bring to a customer, along with others from Return Path partners and complimentary providers. However, within Return Path’s Delivery Assurance products, there is a professional services component – as many deliverability customers want help interpreting and understanding the information they are getting as well as learning how to take action on it. In this case, there’s a clear consulting group that engages with customers independent of the specific products that Return Path sell and a professional services group that helps support the specific Return Path products being used by their customers.

The nuance seems important to me – especially given how severely I react to the phrases being mixed casually. I’m curious how y’all think about this – please comment freely (hence providing me free consulting.)

I’ve been having this weird conversation lately. Last week, it happened again when I was being interviewed for an article titled Betting on Tools that Power Blogs in Businessweek Online.

During the interview, the writer asked something like “so, why are you investing in this blogging thing where no one knows what the business model is yet.” My pithy reply, among others, was “Anybody in the industry who says people haven’t figured out how to make money on blogging is [are] being ridiculous.” After I hung up the phone, I went and banged my head against the wall a few times, fortunately missing the nail that was sticking out of a stud.

We’ve made three investments in RSS/blog related companies: NewsGator, Technorati, and MessageCast. NewsGator sells software. Technorati is a search engine. MessageCast is a next generation ESP (an email service provider, but for multiple channels such as Instant Messaging.) Another high profile blog investment that we aren’t a part of is Six Apart which – voila – sells software – either on a stand-alone license or a hosted basis. Oh – and they are starting to help bloggers monetize their traffic with paid ads.

Please tell me these are well understood business models. I mean, there are at least 10 (or is it 10,000) software companies in America at this point, even with Oracle’s best efforts to force consolidation. And search – well – even Microsoft is working on a search business. Last time I checked, there were even a number of on-demand (or hosted, or whatever you want to call them software businesses.)

As a VC who does a lot of software deals, I seem go through this every time there’s a new technology standard (or protocol) that catches fire. In the early 1990’s, SMTP enabled a raft of companies that built businesses around all aspects of Internet-based email. Shortly thereafter, HTTP enabled – well – an entire industry. SMTP and HTTP are really simple protocols (and – when they were first created – had a slow initial commercial adoptions that suddently went non-linear and became pervasive.) We are seeing exactly the same thing with RSS – and blogging is simply the first broad-based instantiation.

I’ve looked at a lot of RSS/blog related startups in the past 12 months. They bifurcate into two categories – those with a well-defined, easily understandible business model and those without. The vast majority – with a little effort – can fall into the first category. Now – like with everything – a bunch of the ideas are either stupid, small, or disorganized. But – once you filter these out – you are faced with traditional businesses based on a new emerging protocol. The good news – and the bad news – is we know how the game will play out – so with RSS it’ll just happen faster than with SMTP and HTTP. I expect the victors will be the early birds that have a combination of conviction, compentence, and agility.

Those that come up with “new business models” – please don’t call me.

After sitting through five horrible previews, we totally dug The Incredibles. I imagine you’ll be hearing that plenty – if you haven’t seen it, go. I had to drag Amy (c’mon, can’t we go see Ray instead), but she was bouncing up and down as we left the theater.