Month: May 2012
The Founder’s Dilemmas by Noam Wasserman is another book that belongs on every entrepreneur’s bookshelf. It’s excellent.
I met Noam for the first time last week when I was at HBS. I was on a panel of VCs (me, Mike Maples Jr., Kate Mitchell, and David Frankel) talking to a room full of HBS alumni who are VCs. Noam and I had exchanged several emails over the past few months and he sent me a review copy of the book but it got lost in my infinite pile of books to read. After seeing him and talking to him briefly, I decided to put it on the top of the stack. I laid on the couch all day yesterday with Amy and the dogs and demolished a pair of books. The Founder’s Dilemmas was the first.
I get asked endless questions about founder dynamics, solo founders, optimal number of founders, equity allocations between founders, roles of founders, alignment between founders, and investor – founder relationships. I’ve been involved in many conflicts between founders, transition in roles between founders, emotional struggles with founders as businesses grow and change, investor conflicts (other than me) with founders, and the list goes on and on and on.
I’ve never seen a book before that was particularly helpful – to a founder – about the wide range of issues a founder will face. There are plenty of books lots with stories, anecdotes, and suggestions, but none that are particularly systematic about going through all of the issues. Noam’s book is the first I’ve read – and he totally nails it.
He covers it three ways – with data, with analysis, and with stories. He’s done a ten year quantitative study that he follows up with his own analysis and then intermixes this with actual stories from a set of founders, including two that I know reasonably well – Dick Costolo (FeedBurner – I was on the board), Genevieve Thiers (Sittercity – we looked hard at investing but ultimately didn’t) and many I know from a distance. As a result, I was able to back test the stories and anecdotes and they were completely factual in contrast to many other books like this where the qualitative stories are embellished to fit either the ego of the participants or the point being made by the author.
Noam systematically marches through all of the major dilemmas I could think of for founders: career, solo-vs-team, relationship, role, reward, hiring, investor, failure-vs-success, founder-CEO succession, and wealth-vs-control. I believe he’ll coin several new reference phrases, including my favorite around wealth-vs-control (“do you want to be king or want to be rich?”) He looks at each of these from all sides (e.g. yes – you can be king and rich, but there are other options that may get you where you want to go faster and with a much higher chance of success) and uses a great blend of data, analysis, and anecdote to make and support his points.
If you are a founder, or considering being a founder, a board member, or an investor, buy The Founder’s Dilemmas right now. One of your goals should be to do everything you can to maximize your chance of success. This book will help a lot and you won’t regret the time you invest in it.
Jason and I got an email this morning that said the following:
Hi Jason and Brad,
Just wanted to thank you for writing the book ‘Venture Deals’. The advice in the book seriously helped my startup get a great term sheet on the table on Friday.
We get an email like this often. They come in different forms – some are longer than others – but they always have the same message. “Thank you for helping me.” And that feels awesome. It’s not the extrinsic motivation from the praise, it’s the intrinsic motivation that comes from knowing I’ve put together a book on a difficult topic that is useful.
I’ve currently written three books: Venture Deals, Do More Faster, and Burning Entrepreneur. This summer I’m going to write four more – Startup Communities, Startup Life, Startup Boards, and Startup Accounting. They are all in process and at different stages of completion – by the end of the summer they’ll be largely done and will come out quarterly starting in Q3. My goal is to cover a broad range of Startup topics in the same format that Jason and I did with Venture Deals.
Every time I get an email like the one above, it’s a little more fuel to keep on writing.
Once again we are in a zone where hiring software developers is incredibly challenging. The market is fully employed and while there is some movement between companies, great developers tend to be decided to what they are doing for a while, especially in an entrepreneurial context.
Last night I was at Angel Boot Camp in Boston. It was a dinner for about 50 angel investors – a mix of experienced ones and new ones – organized by Jon Pierce. A few of us (including me) gave short talks and there was a long, vibrant room wide group conversation.
Angus Davis followed me for the short talks. He had a bunch of great ideas, but one stood out. He said something like:
“If you want to recruit great software developers, show up at the computer science lab with a bunch of pizza the night before a major project is due.”
While he said this in the context of recruiting software developers, I think this is true of building relationships with anyone in college you are interested in working with. Just show up and bring pizza. Just show up and do something memorable that is helpful in the moment. Just show up and be generous with your time. Engage and go to where the people are, rather than wait for them to come to you, because they won’t.
This afternoon I’m teaching a class at Harvard with Jeff Bussgang and then tonight I’m teaching a class at MIT with Ken Zolot. I haven’t decided what version of pizza I’m bringing, but Angus’ line made me think about always showing up with something that everyone will remember, in addition to simply showing up in the first place, which is probably the most important point of all.
Today SEOMoz announced that Foundry Group has led an $18 million financing and I’m joining the board. Rand Fishkin (The Wizard of Moz) has an incredibly detailed post up titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future describing the financing process and company history in great depth. In it, he includes all kinds of numbers that people writing articles about financing are always asking for but never getting – it’s an extraordinarily (in my experience) transparent description of what, why, and how it went down. My partner Seth Levine also has a nice post up about our previous miss on financing SEOMoz titled Getting It Right The 2nd Time. And the official press release has a bunch of Internet Memes (thanks to Cheezburger) along with the liberal use of the word fuck.
Instead of going through the history of the financing, which is amply covered in the other posts, I’m going to talk about TAGFEE. What’s TAGFEE? It’s the tenents of SEOMoz. From the SEOMoz website:
Our goal is to have everything we create and cultivate – be it software, content, corporate culture, or professional relationships – live up to these tenets. We acknowledge that we are entirely responsible for SEOmoz’s reputation; the level of success we achieve, the brand image we create, and the contributions we make to the marketing industry are a direct reflection of our ability to uphold the TAGFEE code.
At my first company (Feld Technologies) we had a set of precepts and at Foundry Group we have a set of deeply held beliefs. When I first saw TAGFEE I immediately flashed to these two concepts. As I got to know Rand, Sarah Bird (COO), and other Mozzers, I realized they lived by TAGFEE. I loved it and it was one of the big factors that attracted me to the company. Following are my observations of how TAGFEE works in practice at SEOMoz.
Transparent and Authentic: Just go read Rand’s post Moz’s $18 Million Venture Financing: Our Story, Metrics and Future. The next time someone says that they are being transparent, call bullshit on them and point them at Rand’s post as an example of real transparency.
Generous: Everyone I talked to about SEOMoz reinforced that the company consistently goes above and beyond the expectations they set with customers, partners, and each other and hold themselves to an incredibly high standard in terms of interacting with and giving back to the industry that allows them to exist.
Fun: When I showed up at the company a week before the financing closed to say hi, everyone was gathered with margaritas and cupcakes. We did a 30 minute Q&A thing where Rand and Sarah went through in detail the deal that was happening and how it impacted everyone. The cupcakes were yummy and there was much laughing after everyone realized I wasn’t the homeless person that Sarah suggested I was (as in “Brad isn’t here – this is just some homeless person who wandered in.”)
Empathetic: I saw this in my interactions with Mozzers, Rand, Sarah, and people near to the company. I also see it in the Moz community. Amazingly direct, clear, and emotionally enlightened responses and interactions to everything, regardless where on the spectrum of “awesome” to “shitty” an issue lands on.
Exceptional: This is one exceptional company, in everything they do. They aspire to build something incredibly important and durable. And exceptional.
I’ve watched Rand and SEOMoz from a distance for a while. I know many people who have worked closely with the company. And I’ve been able to spy into Rand’s life a little through the lens of his wife Geraldine (who we call the hilarious cupcake blogger woman in my house). It’s one big TAGFEE universe and I’m spinning around in circles chasing my tail in happiness that I get to be involved in it.