Month: October 2009
Yesterday I mentioned my strong support of Net Neutrality. As part of this, I signed on to a letter from a bunch of VC’s and entrepreneurs to Julies Genachowski, the chairman of the FCC. Fred Wilson reprinted the letter (he also signed it along with his partners at Union Square Ventures) in his post Net Neutrality.
Not surprisingly I received some emails and had a few conversations with folks that amounted to “I don’t really know anything about this Net Neutrality thing – can you explain it.” I did my best but after the third time decided to pull together a few public posts that might provide some perspective on the debate.
First, Ivan Seidenberg, the Verizon CEO slamming Net Neutrality. I have trouble reading this stuff (and am glad I wasn’t at the Supercomm speech) as I just violently disagree with his perspective. But – it’s useful context. One thing you’ll notice if you read across a bunch of this is that it’s pretty consistent language from the CEO’s of broadband providers, which is usually a clue as to how politicized this stuff is.
Next, you get a very interesting post from Eric Schmidt (Google CEO) and Lowell McAdam (Verizon Wireless CEO) titled Finding common ground on an open Internet. I’m not sure this post actually resolves anything, but it does a useful job of setting up the conversation and reinforcing the key principles being discussed and debated. It’s also ironic (or perplexing) given McAdam’s statements given the position that Seidenberg takes.
The best article is My chat with Google’s Vint Cerf in the Washington Post. If you don’t know Vint Cerf, he’s also commonly referred to as “the father of the Internet” It’s a great, clear interview that expresses the position I support.
I expect there will be an incredible amount of rhetoric around this over the coming months. Buckle up.
Wow – I guess Web 2.0 is happening somewhere (fortunately I have a delegate there – my partner Ryan McIntyre). That not withstanding, the tempo of stuff going on today is staggering. I’m having a blast sitting here in Boulder just trying to stay mildly ahead of all the stuff flying around. I thought I’d share some of it with you in case you need a fifteen minute break like I do.
Angels Weigh In on Net Neutrality: The WSJ has an article talking about the letter a bunch of VCs (including me and my partner Jason Mendelson) sent Julius Genachowski in support of Net Neutrality. I’m seriously bummed out that my good friend and Representative Jared Polis is opposed to Net Neutrality – if you are in Jared’s district (or any district) fill out the FreePress Save the Internet petition and have it sent to your congresspeople. (update: it looks like according to the OpEd that Jared wrote yesterday that he supports Net Neutrality.)
Incubating Change to Immigration Law with the Startup Visa Movement: Mark Hendrickson over at TechCrunch has a nice post up on the Startup Visa Movement.
Lijit contributes analysis to Technorati State of the Blogosphere 2009: If you are a stats geek, Lijit has some great info for you including Search Engine Referral Data (some of it is surprising), average blogroll size, the impact of Twitter, and some special ad tag info.
When you need an “app for that”, Slice of Lime can build it: My friends at Slice of Lime are now building iPhone apps built on the NewsGator TapLynx framework (more on that soon). If you’d like to carry me around in your pocket, give the Foundry Group iPhone app a try.
Music Hack Day Boston: Ian Rogers, the CEO of Topspin Media point this out to me. It’s happening on 11/21 and 11/22 in Boston at Microsoft NERD and includes plenty of friends (such as Harmonix, Sonos, and Boxee). If you are into music + tech don’t miss it.
I just punked my partner Seth (I expect he’ll figure it out before he reads this) and had my first good run in about 30 days. Now if the sun would come out I’d be uber-happy. Back to work.
I’m getting three to five Startup Visa stories a week at this point. A few are straightforward but most are complex and intellectually frightening, including one I read through yesterday that almost caused my head to explode. When I was in Boston a few weeks ago I met with someone who told me their particular story very passionately and clearly. He then followed up with a short essay that he asked if I’d post publicly. While the story is a general one, it is short and sweet and nicely captures the sentiment that I’ve heard so many times since writing The Founders Visa Movement post.
Every night after I’ve checked off the task list for the startup I work on, followed-up with the people I’ve networked with, finished all my school work, I’ll stay up reading documentation on how I can stay in the country I have fallen in love with over the last nine months. I come from a culture in Sydney where my peers will become doctors, bankers and lawyers; where the idea of being a startup founder is correlated with merely being unemployed. Being familiar with the first generation immigrant story of my own parents escaping poverty in Communist China to Australia, where they’ve created wealth and jobs from their small grocery business, I was inspired to adopt my own journey to a foreign country. When I came to the United States, to take an opportunity to do a one year study abroad at Babson College, a school with a premier entrepreneurship program, I was optimistic.
Being in Boston, having visited both Silicon Valley and the Research Triangle, I mourn the fact my visa expires in December, the conclusion of my studies. Why is it so good here? How is it so different to back home? It’s not about the number of venture dollars, or the size of the business plan competitions, it’s not even the size of the market. It’s about an intangible in the ether. It’s about culture. For a first-time, young entrepreneur, environment is so fundamentally key. The couple of web tech, social media, or general startup networking events I go to every week act as shots in the arm. I always come back that much more energetic; that much more inspired. I speak with a serial entrepreneur who has seen the pattern many times before and provides me advice and encourages me to keep fighting. I meet another first-time entrepreneur suffering my pain, sharing that experience is motivating. I come across someone passionate about their vision, that energy is contagious. The startup journey is rarely a straight line and this keeps me going as a first-time entrepreneur.
And I’m one of the lucky ones. Currently I am looking at all options, but because I’m an Australian citizen, I’m most likely to immigrate to Toronto, as it’s the closest city with an entrepreneurial community to Boston. Many of my international peers at Babson, who hustle, who fight, who innovate and create, are forced home every year. Do they go and create wealth and jobs in their home country? This would be unfortunate for America not to capitalize on the investment in education. Worse still, because they no longer are tapped into the unique American culture of risk and creation; are we as a global society just entirely worst off?
As Stephen Colbert might say, “America, we are blowing it.”
We are doing another TechStars 2009 Demo Day, this time in Seattle on 11/4/09. It’s part of a two day TechStars mini-reunion across all three TechStars years – part retreat, part spend time with a bunch of Seattle colleagues, and part party – TechStars style. The agenda for the Investor part of the event on the after of 11/4 follows:
2:30 PM – Investor Panel – You’ll hear from some of the top angel investors and venture capitalists in the country, including Brad Feld (Foundry Group), Greg Gottesman (Madrona), David Cohen (TechStars), Andy Sack (Founders Co-Op), Stephen Hall (Vulcan Capital) and many more. They’ll discuss their investment philosophies, emerging trends, and innovation.
3:30 PM – State of TechStars – David Cohen and Brad Feld will talk about TechStars past and future. This is your chance to learn a little bit about the first three years of the program and how we’re thinking about the future.
4:00 PM – TechStars Demo Day. Each year after the TechStars summer program ends, we do an investor/demo event. This year, we’re bringing the event on the road. You’ll hear 10-12 companies describe their businesses in fun, entertaining 8 minute pitches. Many of these companies are still raising capital, so it’s a great chance to look at some of the best opportunities from TechStars companies.
6:00 PM – The Mixer. Stick around and meet the companies, share a beer and a snack, and catch up with friends old and new.
If you are an accredited angel investor or VC in the Seattle area or if you know someone who might like to attend on November 4th, just drop me a note and I’ll be sure to get you an invitation to the event. I hope to see you there – it should be a great day.
If you’ve been watching the TechStars Founders video series, you’ll love the Behind the Scene (aka “bloopers”) episode that just came out.
Watch otherwise chatty people be speechless, learn more about the use of the word “fuck”, try to figure out which one is Nate and which one is Natty, see Canadians sing and learn what happens when they get nervous, and go on a rocket ship. Great stuff Megan (and TechStars).
Mark Suster, a partner at GRP Partners, has an outstanding post up this morning titled VC Seed Funding is Dead, Long Live VC Seed Funding. Mark started blogging recently and has quickly turned into my second favorite VC blogger (after Fred Wilson) – if you don’t subscribe to his feed, you should.
Mark just did his first seed deal, a $500k investment in a company called Ad.ly, and his post is a long essay on how he’s thinking about seed investing these days. He makes the appropriate warning (and differentiation) between VC investors who view seed investments as “options” on future rounds (e.g. they toss a little money in and then generally ignore the company until the next financing) and “active seed investors” (like First Round Capital, SoftTechVC, True Ventures, Union Square Ventures, and O’Reilly AlphaTech) who view the seed investment as their first round of several as they help get a company up and running.
I’ve been making seed investments since 1994. I don’t know the actual number that I’ve done, but as a VC (starting in 1996) it’s probably more than 25. In our most recent fund (Foundry Group) that we raised in 2007, we’ve made six seed investments (AdMeld, Gnip, Lijit, Next Big Sound, Standing Cloud, and Trada ) out of 17 investments in the fund to date and have one more that we expect to close this week. Interestingly, we did only two of these by ourselves; the other four included co-investors such as First Round Capital, Spark, SoftTechVC, Boulder Ventures, and Alsop Louie.
In my world, there is no real difference between a seed investment and a “Series A investment.” Ironically, when I started doing this, seed investments were the Series A investment; at some point in the last decade a bunch of VCs started saying “we only do Series A investments” so the seed investment became “less than the Series A” investment, although it never got relabeled so you see a lot of Series A (seed) and Series A-2 (the next round after the seed) investment rounds these days. Regardless, in my world, a seed investment is the first round – when I make a seed investment I’m committed.
VC’s keep reinventing seed programs. In 1994 when I was first making angel investments with my own money that I got from selling my first company I encountered several VC firms that had “seed programs.” These firms had an accelerated way to invest $250k in an entrepreneur to help him get up and running quickly. These investments were always convertible debt that converted into the Series A round at a discount. The entrepreneur quickly got $250k, the VC got a seat (usually a controlling seat) at the table for the next round, and off they went. I participated in a few of these – some that worked (e.g. a new VC came in and led the next round) and a few that didn’t (no new VC showed up, the entrepreneurs and the seed VC watched tensions escalate, and eventually there was an unhappy ending.)
Over time, I soured on the “convertible note seed funding” approach. I’ve written about this in the past, but at the minimum I think it misaligns the entrepreneurs and the early stage VC. More importantly, in my experience, it’s a signaling device – the seed VC isn’t as committed in a convertible note round as they are when they price a seed round and do it as a typical VC preferred financing, albeit with lighter terms.
One key thing for an entrepreneur to test with a potential seed round VC is whether or not the VC will invest in the next round by themselves. The specific question is “Do I need an outside lead for the next round, or will you do it yourself?” While either case is fine, this sets the ground rules clearly for financings going forward. In our case, we are perfectly happy to do the first few rounds of financing ourselves. Some other great seed investors, especially those with smaller funds need a new investor to lead the next round. Then there are traditional early stage VCs who have specialized seed programs where the rules of engagement are that there needs to be a new investor to lead the next round. Knowing where you stand and what the ground rules are before you consummate the seed round is important.
With the emergence of pre-seed programs like TechStars I’ve had more visibility into VC seed investing activity from other VCs. In Boulder, we just finished year three of TechStars and while plenty of the TechStars companies have their first round of financing include angel investors, I think six of the ten companies this year have (or will) close VC-led seed rounds. I haven’t decided if there is actually more seed activity in 2009, or if VCs are focused on hunting for seed deals in more qualified places. Regardless, being a great VC seed investor isn’t a no brainer and I encourage entrepreneurs to make sure they know how their VC investor is going to behave when it comes time to raise the next round.
Periodically I get way behind on my “daily routine” and skip my RSS feeds for a while (up to a week). This week was one of them – I had two 4am wakeups that led me to the airport followed by a 7am wakeup (due to me being glued to my bed) followed by a 8am board meeting. So – no RSS feeds. This morning, after sleeping 12 hours, I spent an hour and read through what I missed this week. There’s some great stuff that came out of it (most from the last few days) – here you go.
GigaOM Special Event: What Comes Next for the Web? October 19, 2009: 9.30 AM: Om has a great live discussion of what comes next for the web that includes Caterina Fake (co-founder, Flickr & Hunch), Tom Coates (Yahoo), Bret Taylor (Facebook & co-founder, Friendfeed), Jeff Veen (TypeKit), Doug Bowman (Twitter) and Dave Winer. It’s a three hour detour from the discussion of the “real-time web” that explores the implication of (a) super-speed broadband and (b) the growing pervasiveness of super phones (e.g. the iPhone).
The making of Zyng’a’s Cafe World, the fastest growing social game in history: I am extraordinarily proud of everyone at Zynga for the amazing company they have created. Their newest game, Cafe World, is now the fastest growing social game in history (eclipsing FarmVille, the previous leader, also a Zynga game). I’m a huge FarmVille and Cafe World (and Mafia Wars) player, and not just because I’m an investor in the company.
The History of SharePoint: SharePoint 2010 is going to be disclosed at the SharePoint Conference starting Monday. Because of my investment in NewsGator and our huge success with NewsGator Social Sites (Enterprise Social Computing built on top of SharePoint), I’m deep in the SharePoint mix (and use it daily at Foundry Group.) This post walks through the SharePoint history starting in the last 1990’s.
The End is Not Fixed: Short and sweet advice referenced by Ben Casnocha. Remember, the lights will go out at some point and you never know the exact moment.
Boston startup events, resources, people you need to know: I spent plenty of time in the past year in Boston in and around the entrepreneurial community while I helped get TechStars Boston up and running. I lived in Boston from 1983 to 1995, started my first company there in 1987 (sold it in 1993), and made my first angel investments there including NetGenesis (IPO), Thinkfish (acquired by CA), and Harmonix (acquired by MTV). In the past year a bunch of people have worked hard to re-energize the Boston/Cambridge software / Internet scene with great results. Don Dodge from Microsoft (who has been an important part of all of this) has a great summary post up about this.
Small c: The penis post: I’m a huge Jeff Jarvis fanboy. We’ve only met a few times and haven’t ever worked together, but I’ve always found his writings at BuzzMachine to be interesting, informative, and insightful. His recent post about his penis is extremely personal, but shows the power of how you can “let it all hang out” when you blog.
My life as a one-armed man: Jeffrey Kalmikoff showed up in Boulder a few years ago and immediately became deeply involved in the startup scene here. He left a few months ago to go to San Francisco (I hear there’s a girl involved) and is now at Digg (Jeffrey – we miss you – a LOT). He posts a very personal story that describes the “almost loss of his arm” around 2003 along with some other health issues. If you’ve got alphabetical order figured out, you’ll realize that I read about Jeff’s penis and then Jeffrey’s arm close to each other. Wait, that’s not what I meant. As a special bonus, take a look at this amazing video on Jeffrey that I found via Andrew Hyde’s blog post titled Brilliant Short Film on Jeffrey Kalmikoff.
Nowhere: I told Amy that there is nowhere I’d rather be today than in Eldorado Springs with her. I hope she doesn’t read xkcd.
Videos: Google Wave Acts Out Pulp Fiction and Good Will Hunting: I continue to really struggle to understand Google Wave. Joe Sabia tries to explain it. As a bonus, take a look at the Good Will Hunted trailer.
The ‘We Need to Own’ Baloney: Fred Wilson aggressively (and appropriately) calls bullshit on the VC’s nonsense on insisting they own a certain percent of a company. Josh Kopelman follows up with a great post titled “Company Math vs. VC Math.” If VC’s said “I want to own” they’d be expressing a rational and honest perspective. By saying “I need to own”, the entrepreneur should respond with “why are you starting this relationship out with a lie?”
The VC Gender Gap – Are VCs Sexist? More provocative and appropriate VC fodder from a VC. This time Jeff Bussgang asks why there are so few female VCs. His conclusion – “Otherwise, our industry is tragically losing out on 50% of the world’s best talent!” is the same we reach at NCWIT for why there are such a lower percentage of female software engineers. This isn’t about feminism, it’s about getting a whole bunch more smart people involved in what we do!
Well – that should keep you busy for a while. Time to go for a run – my first in a couple of weeks since I’ve been apparently struggling with a bacterial infection.
I spent the morning at an NCWIT (National Center of Women & Information Technology) board meeting where I’ve been chairman for the last few years. NCWIT’s mission is to increase women’s participation in IT. We focus across the entire pipeline (K-12, higher ed, industry, academic, and entrepreneurial communities) and – in addition to having a number of our own programs – work hard to leverage the efforts of other organizations around the country. We’ve got a superb board of directors and executive advisory council and an incredible staff which I’m especially proud of. For a quick overview, take a look at the Fact Sheet and the FAQ.
In today’s board meeting we spent a lot of time talking about computer science among high school kids, especially girls. The stats are depressing and unambiguously point to a massive shortfall of computer scientists in the US in the next decade. Having spent some time discussing the current AP Computer Science curriculum with some people I consider experts, it’s clear that it sucks and probably hurts the cause of educating kids in computer science more than it helps. There is uniform agreement that AP Computer Science (and high school computer science in general) needs massive reform, but the time frame is painfully slow (2014 before the new AP Computer Science curriculum is deployed.)
All is not gloom and doom for high school kids. When I think about my experience with “computing” in high school, it involved an Apple II computer and a TRS-80, along with a bunch of BASIC programming. My 300 baud modem with acoustic coupler (eventually upgraded to 1200 baud) gave me access to BBS’s which I explored the nooks and crannies of endlessly. When I got to college, I learned the joy of Unix and DEC-20’s (did you know the DEC-20 was a 36-bit computer – go figure.) The experience today of “computing” is radically different and integrated into the “life flow” of most kids so that the leap to “computer science” from “computing” is not an unnatural one.
Two years ago the Bank of America (one of NCWIT’s investment partners) and NCWIT created the NCWIT Award for Aspirations in Computing. The video about the award is awesomely inspiring and the award has served to begin creating a real community of young women engaged in computer science.
The award recognizes high-school level girls for their computing-related achievements and interests. All US high school young women (grades 9-12) are invited to apply. Awardees are selected for their demonstrated, outstanding aptitude and interest in information technology/computing; solid leadership ability; good academic history; and plans for post-secondary education.
Each qualified national awardee will receive $500 in cash, a laptop computer, provided by Bank of America, a trip to attend the Bank of America Technology Showcase and Awards Ceremony, March 27, 2010, held in Charlotte, North Carolina, and an engraved award for both the student and the student’s school.
As of this afternoon we’ve received 450 applications in the first week that applications were open. If you are the parent of a high school girl who is interested or involved in Computer Science, please spread the word. Applications are open until November 15th.
This year I’m the interviewer for the Silicon Flatirons Entrepreneurs Unplugged series. On Monday @ 6:00 pm I’m interviewing David Cohen, the founder of TechStars at the Wolf Law Building in Room 204 on the CU Boulder Campus.
I’ve known and worked with David for about four years. Prior to starting TechStars, he started three companies – two that were successful and one that failed. Since starting TechStars, he’s had an incredible impact on the Boulder Entrepreneurial Ecosystem during that time, is an awesome entrepreneur, and can be hilarious. Come watch me pry some great stories, anecdotes, and advice out of him. Register here.
Including Monday’s interview with David, there are five more interviews in this year’s series. On 11/2, I’ll be interviewing Steve Halstedt, the co-founder of Centennial Ventures. On 11/4, Brad Bernthal will be interviewing Nir Barkat, the Mayor of Jerusalem and a special guest of the State of Colorado at the Denver Art Museum. On 11/13 I’ll be interviewing Ted Turner (yes – the Ted Turner), and then on 12/7 I’ll be interviewing Tim Enwall, the founder and President of Tendril. Please come join us.
Dell has put up a new site called Motherboard that I don’t totally understand the point of, but I very much enjoyed the interview with Ray Kurzweil.
Kurzweil has always been a hero of mine ever since I first hear of him when I was at MIT in the mid-1980’s. I’ve never worked with Ray although I got to know his business partner Aaron Kleiner near the end of my time in Boston. I’ve observed Ray from afar, read his books, and thought about his thinking. I find all of it, including the notion of the Singularity and his goal of living long enough to be able to live forever, very compelling.
Watching the interview I realized that I’ve been out of the flow of an area that is really interesting to me. I have no idea how much, if any, will show up on this blog (or in our investing), but look for more of it.