tl;dr – If you are a CEO and want to take an amazing online course about being a CEO by Return Path’s Matt Blumberg, sign up for Startup CEO from NovoEd now.
Yesterday, I wrote about Rand Fishkin of Moz falling out of love with the CEO role. Today I read Jason Goldberg of Fab’s great post on his struggles as CEO in 2013 and what he learned from it. This topic is front of mind for me as many of the companies I’m on the board of are growing extremely fast and the demands on the CEOs are significant.
It’s really hard to be a CEO. Becoming a great CEO takes a lot of time, work, focus, coaching, and introspection. I’ve had the privilege of working with some incredible entrepreneurs who, over many years and several companies, became remarkable CEOs. Dick Costolo (Twitter CEO) immediately comes to mind. While I didn’t work with him at Twitter, I was on the board of FeedBurner and worked with him and his three founders (Eric Lunt, Steve Olechowski, and Matt Shobe), who are all still close friends. I learned an amazing amount from each of them, but especially from my time with Dick.
Another great CEO I’ve had the honor to work with is Matt Blumberg who has led Return Path since founding the company in 1999. Matt is a first time CEO and has a fun blog titled Only Once which references the idea that you can only be a first time CEO one time. In a delicious twist, he’s now been a first time CEO for 14 years. While Return Path has had countless twists and turns along the way, Matt has been CEO from inception and presides over a large and significant company that continues to be a leader in a market it helped create.
Fred Wilson, who is on the board of Return Path with me and Matt (along with the FeedBurner board, and the Twitter board) had a frank and insightful post about turning your team three times through the life of the company to meet the different challenges that face a company from its journey from sweat driven startup to massive scale. Often this process of turning the team includes the CEO; other times it doesn’t. In Matt’s case, there have been plenty of team changes along the way, but Matt has demonstrated an impressive ability to scale and adapt himself in the evolving role of a CEO of a rapidly scaling company.
As a result, when Matt started talking to me about writing a book about the role of a Startup CEO, I was super excited. I encouraged and supported this, and it resulted in another book in the Startup Revolution series that I’ve done with Wiley. Matt’s book, Startup CEO: A Field Guide to Scaling Up Your Business, is a must read for any CEO.
Last summer, Matt began exploring doing an online course around the content in Startup CEO. He teamed up with the Kauffman Fellows Academy to put together a course titled Startup CEO, an online class that really drills into the important material of the book. It’s the real deal with hours of video, Q&A that Matt did in front of a live studio audience of NYC startup CEOs, as well as engagement with the teacher through the NovoEd platform.
I’m encouraging all the CEOs in Foundry Group’s portfolio to take the class, and I encourage you to take the class as well.
The class starts on January 20th on the NovoEd platform. You can learn more about it on Matt’s blog post about the Startup CEO course.
I was a CEO once. In my first real company, Feld Technologies, there were two founders – me and Dave Jilk. I was President (we didn’t use the CEO title then, but as the President, I was the “chief executive officer”) and Dave was Vice President. As we grew, other people had different titles, but the two of us ran the business.
I’ve been told that I was a good CEO, but after about ten people I didn’t like the role of CEO. But we stayed after it and built a successful company that was consistently profitable and acquired by a public company in 1993 for a few million dollars.
At the time it was acquired, we had 20 people. For the next nine months, I ran the consulting group of this public company. I reported to the two co-chairman and we quickly scaled up to 50 people in two offices. By the time we got to 50 people, I hated being the CEO of consulting group (I have no recollection what my title was, but again my role was the CEO role of this group.)
The parent company acquired a much larger consulting company – about 200 people – and I quickly handed the keys over to the new CEO (well, President) allowing Feld Technologies to become two of the branch offices of what ended up being AmeriData Consulting.
I have never wanted to be a CEO since. It’s a really hard job. Some people love it. Some people are outstanding at it. Everyone I’ve ever worked with in the role has struggled immensely at different points in time.
And some people grow to hate the role.
Recently, Rand Fishkin, the CEO of Moz, took an incredibly brave step. In his post Swapping Drivers on this Long Road Trip Together, he handed the CEO role over to his long time business partner Sarah Bird. As of January 15th, Sarah will formally become CEO and Rand will become an individual contributor on the executive team, reporting to Sarah.
We invested in Moz in April 2012. Rand wrote an epic blog on the financing titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future. It was so epic that the mainstream tech press didn’t really want to report on the financing since there was no new information they could discover, since Rand blogged every last detail.
Since that date, I’ve developed a professional love affair with Rand and Sarah. As an investor, I have no hesitancy to become close friends with the entrepreneurs we invest in. Rand and his wife Geraldine have become extremely good friends, and I have deep respect and affection for Sarah.
In the middle of 2013, Rand called me up and said “What do you think of the idea of me handing over the CEO reins to Sarah?” I reacted immediately with “That would be awesome.” There was silence – I don’t think Rand expected that reaction.
I knew Rand was unhappy as CEO. He was exhausted in his role. He had a strong senior team but carried around every ounce of stress and responsibility for all aspects of the business. He traveled constantly evangelizing Moz, SEO, and marketing. He loved certain aspects of what he was doing, but hated others. And many of the ones he hated were the ones that a CEO of a scaling business is responsible for.
I recognized this. It’s the same stuff I would hate if I ran a company the size and stage of Moz. It’s the stuff I hated when I was co-chairman of a 1,000 person public company and effectively acting CEO since the CEO we had recruited bailed after accepting the job, leaving us with a four month scramble to find a new CEO. It’s the stuff I remember hating leading a company of 50 people.
Now, Rand and I are different people. But he’s special. And magical. And amazing. And his special, magic, amazingness was being squandered as CEO, especially when he sat next to Sarah, who will be an awesome CEO while allowing Rand to be special, magical, and amazing in the next chapter of Moz.
I’m so incredibly proud of Rand for how he’s approached this, talked openly about it, and dealt with his own emotions, insecurities, and fears around this decision. And I’m extremely excited about Sarah become CEO and unleashing her talents on the new wave of growth at Moz, while Rand spends his time being true to what he loves in the context of Moz.
Building a company is hard. Being a CEO is hard. Working with people you trust, admire, and adore is a delight.
What better way to start off a new year than by closing a new investment. This morning we announced that we have closed a financing in OnTheGo Platforms via our FG Angels syndicate.
On October 1st, 2013 we announced that we’d be forming an AngelList syndicate called FG Angels and making 50 seed investments through AngelList by the end of 2014. We committed $2.5m from our Foundry Group funds for this effort and decided to max out the syndicate at $500k / investment, or $25m total. So $2.5m would come from us and $22.5m would come from syndicate participants.
We knew we had a lot to figure out around how the AngelList syndicate would actually work. We also knew that AngelList had a lot of work to do to get all the software and legal dynamics working properly. We’ve spent the last three months working with AngelList, our lawyers (Cooley), and a few other experts to make sure everything was set up the correct way. It was much more complicated than we expected, and we’ve learned a lot more about 506(b), 506(c), what the JOBS act made better, what the JOBS act made worse, and the general insanity of unscrambling new government regulations that purport to make thing easier, but actually make things harder.
But we’ve figured it out. And are psyched to have led a seed round in OTG Platforms. We’ve also got a healthy AngelList syndicate called FG Angels ready to roll. And we’ve got a second investment in the final stages of closing and a third one getting ready to launch. We expect to be in a 2 – 4 investment per month tempo for Q1.
The OTG Platforms gang has been incredibly patient with us. We were originally planning to announce things at the Defrag Conference in November but at the last minute realized that we’d blow all the 506(b) exemptions and generate a huge pile of work for everyone, so we held off until things closed. As we ran into issue after issue with the AngelList syndicate process and docs, they hung in there patiently as we worked it out, being willing to be the test case. They are just an awesome team – exactly the kind of people we love to work with.
The AngelList gang was equally amazing. We’ve loved what they are up to from the beginning. I’ve given Naval and Nivi lots of feedback over the years and have been active on a few non-tech angel investments through AngelList. We knew going in that the AngelList Syndicate process was a new thing and figuring out how to do it correctly, via a VC fund, was going to be a challenge. But we’ve mastered it and the AngelList team continues to be well ahead of the curve on all fronts.
Over time I’ll write more about what we’ve learned and what the issues are. But for now, congrats to OnTheGo Platforms – we are psyched to be partners with you. And thanks AngelList.
Just before Christmas I ran a week long pre-order campaign for my new book Startup Boards. It’s officially shipping at this point so if you are interested in it but haven’t yet ordered it, give your friend Brad a solid.
The winner of the campaign is Angie Lawing from Mercury Labs in St. Louis. I’ll be hosting her and her board in Boulder for a board meeting whenever she wants.
Thanks to all who participated. And, if you’ve read the book and have any thoughts about it, toss a review up on Amazon or Goodreads!
“History is written by the victors” – maybe said by Winston Churchill
“History is Written By the Winners” – George Orwell
“To the victor belong the spoils” – New York Senator William L. Marcy
Yesterday I wrote a post about my first experience as a venture capitalist. I didn’t try to dramatize anything – I just wrote what I remembered. I got a handful of emails from people involved in some way.
One line that jumped out at me was “Nice to see at least one guy who is not into rewriting history.”
Another that jumped out at me from a different person was “I didn’t know the history with you and Netgen. Sorry that it was a hard experience. The ironic thing is I have always considered you one of the three fairy godfathers of Netgen.”
Today Fred Wilson wrote a fantastic post titled “My First Investment“. He bluntly referred to it “a shitshow” in a comment on my post. Joanne Wilson also wrote about her first angel investment (Curbed) which recently had a nice exit.
I love these origin stories – both the successes and the failures. While I didn’t experience Fred and Joanne’s, they both write from the heart so I expect they are their truthful stories. But as I read so many other origin stories, especially those that are presented by third parties as histories or by respected thinkers, politicians, or journalists as justification for their current position, I’m reminded of the quotes at the beginning of this post.
I ran across a great juxtaposition of this today. On Twitter, I saw a link to a NY Times OpEd from David Brooks on marijuana titled “Weed: Been There. Done That.” I normally don’t pay any attention to what Brooks writes, but I clicked since it showed up in my Twitter stream and read it. It felt like bizarre, sanctimonious bullshit, especially the punchline “In legalizing weed, citizens of Colorado are, indeed, enhancing individual freedom. But they are also nurturing a moral ecology in which it is a bit harder to be the sort of person most of us want to be.”
So I tweeted something about whether Brooks still drinks alcohol in an effort to be amusing. I was then pointed on Twitter to an amazing post by Gary Greenberg, who was one of the people Brooks referred to in his OpEd about the kids he used to get high with. It was titled “I smoked pot with David Brooks.” Now, I don’t know Brooks or Greenberg, nor do I really have any stake in the discussion between them, but I thought it was an amazing example of how as humans we tend to rewrite history to fit our current circumstance.
Now, I don’t really care about the legalization of marijuana. I don’t smoke pot and haven’t since the one time I tried it in college and hated it. But I also don’t care if others smoke it – I have a lot of friends who enjoy it. And since I’m ignoring politics in 2014, I’m not going to pay attention to the legalization discussion.
But I do find the dissonance in origin stories to be fascinating. Maybe Brooks is remembering things differently. Maybe he’s limited by the number of words the NY Times allows him. Maybe he cares more about making a point about society linked to the legalization of marijuana. Or maybe he was drunk when he wrote this OpEd. I don’t know – that doesn’t really matter.
What does matter is that it’s important to always remember how origin stories get rewritten by the winners, by people in power, by people trying to justify their position, or just because it’s human nature. Being TAGFEE is really, really hard.
I often get asked how I ended up becoming a venture capitalist. When people ask me how they can become a VC, I point them to my partner Seth Levine’s excellent blog posts How to become a venture capitalist and How to get a job in venture capital (revisited). But it occurred to me today – after getting another email asking me how I’d become a VC, that I wasn’t really answering the question.
Amy likes to remind me that when I was an entrepreneur, I used to regularly give talks at MIT about entrepreneurship. I’d say – very bluntly – “stay away from VCs.” I bootstrapped my first company and, while we did a lot of work for VCs, I liked taking money from them as “revenue” (where they paid Feld Technologies for our services) rather than as investment.
Feld Technologies was acquired in November 1993. Over the next two years, I made 40 angel investments with the money I made from the sale of the company. At one point in the process, I was down to under $100,000 in the bank – with the vast majority of our net worth tied up in these angel investments and a house that we bought in Boulder. Fortunately, Amy was mellow about this – we had enough current income to live the way we wanted, we were young (30), and generally weren’t anxious about how much liquid cash we had.
Along the way, a number of the companies I had invested in as an angel investor raised money from VCs. Some were tough experiences for me, like NetGenesis, which was the first angel investment I made. I was chairman from inception until shortly after the $4m VC round the company raised two years into its life. Shortly after that VC investment, the VCs hired a new “professional” CEO who lasted less than a year before being replaced by a CEO who then did a great job building the company. During this period, the founding CEO left and I decided to resign from the board because I didn’t support the process of replacing this CEO, felt like I no longer had any influence on the company, and wasn’t having any fun.
But I still wasn’t a VC at this point. I was making angel investments with my own money and working my ass off helping get a few companies that I’d co-founded, like Interliant and Email Publishing, off the ground. I was living in Boulder at this point, but traveling continuously to Boston, New York, San Francisco, and Seattle where I was making most of my investments. During this time, I started to get pulled into more conversations with VCs, helping a few do some diligence on new investments, encouraging some to look at my angel investments, and investing small amounts in some VC funds whenever I was invited to invest in their “side funds for entrepreneurs.”
One of the VCs I overlapped with while in Boston was Charley Lax. Charley was a partner at a firm called VIMAC and was looking at some Internet stuff. I was one of the most prolific Internet angel investors in Boston at this point (1994 – 1995) so our paths crossed periodically. We never invested in anything together, but after I moved to Boulder, I got a call from Charley one day in early 1996. It went something like:
“Hey – I just joined this Japanese company called SOFTBANK and we are going to invest $500 million in Internet companies in the next year. Do you want to help out?”
Um – ok – sure. I didn’t really know what help out meant, but on my next trip to San Francisco I had a breakfast meeting with Gary Rieschel and Jerry Yang. SOFTBANK had recently invested in Yahoo! and presumably the breakfast was to vet me. I remember it being pleasant and ending with Gary saying something like “welcome to the team.”
I still didn’t really have any idea what was going on, but I was making angel investments and having fun. Charley proposed being a “SOFTBANK Affiliate” which had a small monthly retainer, a deal fee for anything I brought in, and a carry on the performance of any investments I sourced. Informal enough for me to play around with it for a while.
I was in Boston the following week so Charley emailed me and said “can you go check out this company Yoyodyne and tell me what you think?” So I went to a generic office park near Boston and met with two people who would become close friends to this day. The first was Fred Wilson, who had just started Flatiron Partners (SOFTBANK was an investor in Fred’s fund) and the other was Seth Godin, the CEO of Yoyodyne. I vaguely remember a fun, energetic chat as we met a few people at Yoyodyne, ran through the products, and talked about how amazing the Internet and email was going to be as a marketing tool.
My formal report back to Charley was short – something like “Seth’s cool, the business is neat, I like it.” SOFTBANK and Flatiron closed an investment in Yoyodyne a few weeks late.
Suddenly I was a VC. An accidental one. And it’s been very interesting since that point back in 1996.
I’m glad it’s 2014. Last year was a difficult one for me as I hit a wall of depression that completely surprised me. I was over it by mid year and, while the second half of the year was better, I still struggled with figuring a bunch of stuff out about what I cared about as I turned 48 years old.
I stopped doing a few things last year. I stopped traveling for business. I stopped working on Saturdays.
I discovered great relief, and happiness, from stopping doing these things.
As I start 2014, I’ve decided to continue to stop doing things that are neutral to negative utility to me, in an effort to spend more time on the things I want to do, and do them more deeply.
Some of the things I’m stopping are ones that down deep I know are unsatisfying to me. Interacting with government at any level – federal, state, or local – has been a huge negative emotional drain. I’ve put a lot of energy into two issues over the past seven years – startup visa/immigration reform and patent reform. There has been almost zero change in either of these and the experience has been deeply unsatisfying. I’ve been incredibly distressed and agitated by the NSA / Snowden revelations. The idea of municipalization in Boulder, and my interactions around it, bums me out. I’ve realized that it’s not a game I like at all and that whenever I spend time on it, I’m a less happy person. So I’m not going to engage in 2014 and see how that feels.
For the past 25 years, my week days have started at 5am. I started experimenting with that a few months ago and, even though I’ve had some stretches where I’ve gotten up at 5am, I realized the thing I didn’t like was the oppressive crush of scheduled stuff that started at 9am and didn’t end until 6pm. I’ve lived an adult life of “manager mode” with only a few stretches of true “maker mode” and I desperately need – and want – more maker mode. So I’m stopping doing anything scheduled before 11am. I’ll get up whenever I want and my mornings, until 11am MT, will be unscheduled for me to do whatever I want with them.
I’ve been deeply conflicted with alcohol in 2013. I grew up in a house with no alcohol – neither of my parents drank. I drank plenty in college, but limited myself to just booze – no drugs (my parents scared my brother and I straight at an early age.) Over the years, I’ve gone through dry phases – up to five years – where I didn’t drink. In other time periods, including around the Internet bubble and 2013, I found myself drinking more than I felt was ok as I used it to dull the edges of the stress and anxiety. In addition to the negative physical effects, I spent a lot of mental and emotional energy thinking about “am I drinking too much.” I’ve always struggled with abstaining vs. moderating, so 2014 will be a year of abstaining from alcohol.
Many of you out there provided great support, friendship, and advice in 2013. I treasure all of it, even when it’s hard to hear, something I disagree with, or when I am simply not in a head space to act on it. As 2014 begins, I look forward to another year that is an interesting one on this journey called life. And by doing less of the stuff I don’t want to do, I hope to have more time to go deep on the things I want to do.
Happy new year!