Month: August 2011
Today we announced that we’ve led a $10m round for MakerBot Industries and I’ve joined the board. I’m super excited to be working with Bre Pettis, Adam Mayer, Zach Smith, and the rest of the MakerBot gang to create consumer-grade 3D printers.
When I first met Bre, Adam, and Zach at the Botcave in Brooklyn, it was love at first sight for me. The entry way to the BotCave has a series of Thing-O-Matics (the current MakerBot 3D printer) printing out all kinds of things. A display space of 3D things sits next to a vending machine with 3D parts in it, which all open up into a warehouse space full of tiny little parts neatly arranged and being put together in kits to be shipped. At the back were a bunch of people banging away on computers.
I took a deep breath and at that moment thought “I have to invest in this company.” I spent a few hours with Bre, Adam, and Zach and came away even more excited. I knew I had a massive nerd crush on them, but I also felt like if anyone was going to create a self-replicating machine that my father would buy, these were the guys. It’s well known by now that I believe the machines have already taken over – investing in MakerBot seems like another way to help them out.
Fortunately my partners loved the MakerBot gang as much as I did. But, rather than just theorize, I bought a MakerBot Thing-O-Matic and Jason, Ross, and I put it together. It’s been busy printing out all kinds of things for the past few months. The day we signed the term sheet, I made some Foundry Group coins (with the Foundry Group logo on the front and a $ on the back) and fedexed them to Bre. I wonder what he’ll make and send back to me now that we are investors.
I believe that we’ll look back in 20 years and 3D printers will be as ubiquitous as laser printers are today. We aren’t yet at the point that is equivalent to the first HP Laserjet in 1984, but I think we’ll see a comparable product from MakerBot within a year. In the mean time, I’m going to keep downloading 3D things from the Thingiverse and keeping my Thing-O-Matic busy.
Over the weekend I read Running on Empty: An Ultramarathoner’s Story of Love, Loss, and a Record-Setting Run Across America written by Marshall Ulrich. Ulrich is one of the most amazing ultra-distance runners in the history of man and turns out to be a great story teller as well. I founding his book to be riveting and subsequently downloaded the movie about the run across America that he did called Running America 08.
The movie was dynamite. The run across America took place between September 2008 and finished (coincidentally) on November 4th, 2008. There were three stories woven together in the movie: (1) Marshall’s success effort to run across America, (2) Charlie Engle’s unsuccessful effort, and (3) a backdrop of interviews with American’s all across the country during the time of the run.
In Marshall’s book, there was plenty of discussion about the original partnership between Marshall and Charlie which led to the join effort to run across America in world record time. However, Charlie stopped a third of the way through due to injuries and some drama ensued, which wasn’t covered in the movie but was reasonably well explained in the book. All of this just added to the remarkable feat of accomplishment by Marshall Ulrich.
I’ve been running a lot in Europe this summer and am starting to feel another level of base building. My friend, and CEO of SendGrid Jim Franklin did the Leadville 100 this weekend and another friend just asked if I want to do a 50 miler with her in the spring of 2012. I’m also thinking about spending a month running the Colorado Trail next summer. First up however are four marathons in September and October.
I love running and reading about amazing running accomplishments. It’s even more inspiring to realize that I’m not washed up at 45 as many of the great ultra-runners are cranking well into their 50’s and 60’s.
Amy and I collect contemporary art. We often make friends with the artists who we collect. Occasionally people who are our friends become artists. Jessica Schallock fits into this category
We’ve been friends with Jessica for a decade. Her family lives next door to us in Homer, Alaska and we’ve known Jessica since she was 12. We’ve watched, with much joy, as she’s grown into an amazingly talented young women.
One of those talents is art. Every year she gives us a drawing as a gift. It’s been amazingly fun to watch her get better at drawing, as she turns it from a childhood hobby to a profession. She’s currently experimenting with of realistic portions of a face that blend into “unfinished” sketch-like outlines.
The piece in this post is called James and is 16 1/2″ x 20″, graphite on Bristol board. Jessica is looking for a gallery to work with along with people that are interested in her work. If you are interested, please email me and I’ll put y’all in touch.
David Cohen, the CEO of TechStars, is doing a weekly show called ThisWeekIn TechStars. Episode 3 – which is now up – is the story of the making of the Bloomberg show “TechStars” which premiers on September 13th.
David interviews Elizabeth Gould, the Bloomberg Executive Producer for the show. I’ve gotten to know Elizabeth over the past few years and she’s really incredible. While I’ve been interviewed for TV plenty of times, I’ve never participated in a long form show. In this case, the TechStars show will be seven episodes that are each 30 minutes long. While I play a small part, watching the process unfold, the work required to put together a show like this, and the effort that Elizabeth and her team put into this was remarkable and really cool to see and experience.
The interview with Elizabeth is a chance for David to turn the camera on her for once. Watching the interview makes me even more excited to see the series when it comes out. As a bonus, David also interviews David Tisch, the TechStars New York Managing Director, for his feelings on the experience of being filmed 24 hours a day for three months. While it’s all it a little meta, it’s good meta.
For a limited time, Occipital’s Panorama 360 is free. If you don’t know why this is such an awesome app, watch the short video demonstration below.
We closed our investment in Occipital last week and I wrote about it in the post titled The World Is Just A Bunch Of Pixels. The Occipital gang is going to create a bunch of amazing stuff and now’s your chance to get on board with a one minute iPhone download. And, if you are reading this after the free offer expires, it’s still worth getting for the couple of bucks they are charging.
Today on Brad Feld’s Amazing Deals, we are featuring the Urban Sherpa Strap from Go Gaga. Sherpa Straps distribute the weight from laptop bags, gym bags, and briefcases that take straps, across your back and shoulders. I’ve been using the Sherpa Strap for a while – it’s dynamite.
With today’s deal, you can get the strap and free shipping for $19, a discount of 50%.
If you have a bag that you love, but are tired of having it cut into your shoulder as you are traveling from DEN to LGA, check out Sherpa Straps. For each purchase, Go Gaga will make a donation to The Mountain Fund, helping some real sherpas.
Also, check out today’s deal deal on your iPhone or Android. Deal Co-op recently launched the Feld Store web app, a full touch site for mobile buyers. Once you store a credit card in your account, you can check out my deals each week on mobile, and buy future deals with one click.
I’ve always loved getting books signed by the author. As an author of two books, it makes me smile a huge smile when someone asks me to sign a copy of my book for them.
With Kindlegraph, I can finally sign my Kindle books. I met the founder, Evan Jacobs, at Glue a few months ago. He had just started putting books up on it and I immediately told him that I was game to put Do More Faster up. I tweeted about it and signed a few.
Now that Venture Deals is out I’ve got them both up on Kindlegraph. If you have a Kindle version of either book, or you are buying one, and want me to sign it, just go to my Kindlegraph author page and request for me to sign the book.
And if you haven’t bought the Kindle versions of Do More Faster or Venture Deals, what are you waiting for?
Mark Suster interviews Ian Rogers, the CEO of Topspin Media, on ThisWeekIn Venture Capital. We’ve been investors in Topspin since early 2008 and I’ve got a huge man crush on Ian. I find him incredibly passionate and articulate about what he does – he exemplifies the kind of entrepreneur we want to back in our Distribution theme. Oh – and Ian was the original webmaster for the Beastie Boys – how cool is that? And, in case you were wondering, the original Beastie Boys website was at https://www.cs.indiana.edu/~irogers/beastieboys.
When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. While they’ve been hard at work on their product, they’ve also incorporated the company, now named SayAhh (thanks Mac!) as a C-Corp in Delaware. They’ve done a bunch of other mundane things, such as establishing a business checking account and depositing Jane’s $50k in seed capital, but like all good early stage entrepreneurs, they’ve spent most of their time obsessing about their product, talking to a few potential early customers about what they needed, and coding away on their MVP.
Dick and Jane had limited formal business accounting experience, but they both knew how to balance a checkbook. They reached out to their friend John, a CFO at a late-stage VC-backed company in Boston that was about to file an S-1 to go public. John took an hour out of his day to do a conference call with Dick and gave them advice on how to set up their accounting system. His advice included the following,
- Set up a double-entry accounting system and use it to track all financial transactions.
- Build a financial model that forecasts the P&L. Revenues and costs should both be based off of a robust set of assumptions. This should tie to your GL for “Actuals” (i.e. historical data).
- Be sure to use accrual accounting, not cash accounting.
- Tie the P&L forecast to the Balance Sheet and Cash Flow Statement and generate snapshots of what the Financial Statements will look like each year for the next 5 years. Create monthly snapshots on a rolling 12 month basis.
- Anytime the financial model indicates that SayAhh will run out of cash, determine how you will raise capital to ensure liquidity and be sure to properly account for the debt or equity transaction on the balance sheet and Cap Table.
- Tie each round of funding to a set of key milestones in the development of your product/business.
John also mentioned a bunch of other stuff that Dick didn’t write down because they weren’t really sure what it meant, but it included phrases like 409a and VSOE. Feeling overwhelmed, Dick emailed his friend Josh, the CEO of an early-stage startup in Boulder, to see how they figured out all of this stuff. He summarized Dick’s advice and Josh replied: “That’s great advice and you should do all of that stuff – eventually. But, for now, focus on the following:”
- Make sure you both have business credit/debit cards and that you use them (or checks) for all transactions.
- Setup a simple accounting system like QuickBooks and sync it with your bank account. At the end of each week, make sure you’ve properly labeled each transaction using the QuickBooks Chart of Accounts. This takes a little getting used to, but you’ll pick it up. Ask me if you have questions.
- QuickBooks allows you to forecast expenses. Think through all of the expenses that you anticipate over the next 12 months and enter them. Update this every time you become aware of new transactions and maintain this on a rolling basis. QuickBooks will show you if/when you will run out of cash within the next 12 months.
- Build a plan as to how you will inject more cash into the business any time QuickBooks shows you running out of cash, and be sure to start raising any needed cash well in advance.
Dick and Jane followed Josh’s advice. It required a small investment of time and money to get QuickBooks up and running, but it was a manageable distraction from building SayAhh’s core product.
To be successful, you need to know about a wide range of issues affecting your business. However, you do not have to become an expert on each and the degree to which you need to understand various issues evolves along with your business. It is easy to get caught up in all the administrivia of of forming a company, building a business plan, and developing financial forecasts that you fail to spend time building your product.
How do you know what matters most when? This is where developing a network of trusted and qualified mentors comes in handy. While John was trying to be helpful, his advice missed the mark because he didn’t have a lot of experience at the early stages. In contrast, Josh was an experienced entrepreneur who had started several companies and likely learned his lessons through experience. As you build your business, surround yourself with as many Josh’s as you can. And, as you grow, make sure you find mentors like John to help you at at the appropriate stages.
As Josh suggested, when you first start your business you should focus on building systems and processes that allow you to accurately capture as much data as possible from the start. QuickBooks and other accounting software programs will do this for your finances, but you should also implement tools for tracking other key metrics (e.g. customer behavior, support inquiries, marketing analytics). You can and will become increasingly sophisticated in analyzing and interpreting that data over time, but you cannot analyze it if you do not have it.
Additionally, at all points in the development of your startup – including on Day 1 – you should focus intently on forecasting your cash flows as accurately as you possibly can. Running out of cash will either kill your company or force you into a very painful financing round. Know exactly when you run out of money, well before the time you hit a wall and go splat.