Month: March 2014
I’m going to start doing something new on my posts. Rather than having separate posts promoting stuff I’m up to, I’m going to begin including a short header in each post with either a thing I’m involved in or something I read recently that I think is particularly germane. For now, I’ll style these in italics – at some point I’ll come up with some new CSS to set it apart more clearly. Feel free to offer any/all feedback on this. Today’s tip is from Alex Iskold, the Techstars NY Managing Director and is 7 Calendar Tips for Startups. If you struggle with your calendar, it’s highly recommended.
Last week Amy and I went to our favorite place in Cabo San Lucas for our Qx vacation. We went off the grid (no phone, no email). I ran a lot, slept a lot, and ate a lot. I watched all of Orange is the New Black and almost all of Caprica thanks to hotel WiFi and Neflix on my iPad. But most enjoyably, I read a lot. Following is a summary with links.
Is Amazon Bad For Books?: What a yummy article that gives a lot of history about what has been going on between Amazon and the traditional publishing industry. Highly relevant for a lot of our thinking around FG Press.
The Science of Battlestar Galactica: I listened to this on Audible while running. If you are a BSG fanboy like me, this is a must read.
How To Defend Against Patent Trolls Without Breaking The Bank: Ken Bressler has been super helpful in one of the more vexing and annoying patent troll cases I’ve been involved in. As the Supreme Court once again has a chance to do something about software patents and patent trolls, I remain cynical and pessimistic that this gigantic tax on innovation will get resolved anytime soon.
The Underwriting: More Startup Fiction – this time in a weekly serialized format. I paid for it before I left but for some reason I only had two episodes. I just paid for it a second time so hopefully they’ll start coming in a steady stream. It’s pretty fun – a little too much sex and investment banking for my tastes, but we’ll see where it goes.
Battlestar Galactica Series Bible: The original series bible written by Ronald D. Moore. Another BSG fanboy must read.
The Secret of Raising Money: Seth Goldstein and Michael Simpson have written a really strong book on how to raise money from angels and VCs at the early stage. I’ve known Seth since the mid-1990’s and think he and Michael did a great job of capturing the essence of this very hard and often complex process.
Who Says Elephants Can’t Dance?: I hadn’t read this since it first came out a year or so after Lou Gerstner retired as IBM’s CEO. This is his memoir of his experience at IBM and was a fantastic history lesson. While some of the strategic advice felt a little dated and “big corporate”, there were endless gems throughout the book, including a clear view on key decisions that Gerstner made relatively early which dramatically changed IBM’s downward spiral into the depths of mainframe doom. I’ve felt for a while that Microsoft is having its “IBM moment” that occurred for IBM in the early 1990s and to date have been uninspired with how they have approached it. I don’t know Satya Nadella but I hope he’s read this book.
Giving 2.0: Transform Your Giving and Our World: Amy and I plan to give away all of our money while we are alive. We’ve been active philanthropists since the late 1990s and are always trying to learn more. Laura Arrillaga-Andreessen’s book is a wonderful combination of personal history, advice, and storytelling about what other people are doing. I was especially pleased to see a long chapter on our friends Linda Shoemaker and Steve Brett’s efforts in Boulder around their philanthropy.
The Trial: I’ve been describing our annual fund audit process as “Kafkaesque” to whomever I talk to about it. I realized I had never read The Trial so I grinded through it. I thought I knew what I was in for, but the copy I read fortunately had a Kafka history as well as a history of The Trial with a short summary at the beginning, so it made a lot more sense as I read it. And yes, the audit experience is still something I believe is Kafkaesque. Hopefully they won’t kill me like a dog at the end.
Orange Is the New Black: My Year in a Women’s Prison: I randomly watched Season 1. I figured I’d bounce after a few episodes but found myself deeply engaged in it. So I grabbed the book and read it. The book was even better than the show. Piper Kerman blew my mind – both with her experience and her writing about it. So powerful, depressing, upsetting, and enlightening, all at the same time.
Neuromancer: I read Neuromancer my in college shortly after it came it. I loved it then. I haven’t read it since so I decided to listen to it my iPhone while running, just like I did earlier this year with Snow Crash. Like Snow Crash, it somehow felt richer when I listened to it during my long runs. Case, Molly, Wintermute, and the Dixie Flatline still delight, as does Gibson.
I just got back from a much needed vacation – the sort of vacation you kind of think you need and then on day three of 14 hours a night of sleep you realize you really needed it really badly. We got home yesterday after a solid week off the grid and I was having trouble sleeping so I got up early to spend some quality time with my computer.
In the middle of a bunch of email I came across a gem from Elke Govertsen, the CEO of Mamalode. I met Elke in 2012 the weekend I was in Missoula to run the Missoula Marathon. She, along with some of her colleagues, were awesome hosts and while our relationship has been email only since then, I always smile when I get something from her.
The gem of an email was a link to a TEDxWhitefish talk that Elke just gave. Her note said is was on “self esteem, perspective and some of my struggles and solutions.” I fired it up and sat back to watch.
Fifteen minutes later I felt I needed to share it with you. Elke starts off strong and asserts that 85% of the world at any given moment is struggling with low self-esteem. Whether you agree with the 85% number of not, she analyzes self-esteem in a unique way. And then goes on to tell an extremely poignant story. Her story which includes a really shitty 2013, during which she completely wore herself out and then almost destroyed herself. During this time, she had to slow down, lie really still, and think a lot.
She came up with tiny little trick. Rather than try to “fix” your worst, she started to think about worst and best as a circle of goodness. Your best is your worst, and your worst is also your best. Instead of focusing only on your best, or trying to project a world to others that is your best, be authentic and actually explore both your best and your worst.
A line at 10:45 that I loved was “At a dinner party, instead of asking ‘what do you do’ ask what’s your best quality and how at some point has that been your worst?”
Elke continues to make the circle between best and worst, rather than have them on a line from best to worst. She has some powerful moments near then end, where she suggests we all “forgive and believe” and “live in the inverses where your best is your worst and your worst is your best.”
Enjoy 15 minutes of Sunday inspiration which will make you think a little differently today. Elke – thanks for sharing this with us.
If you are interested in learning about Venture Deals, my partner Jason Mendelson and I created a course with the Kauffman Fellows Academy on NovoEd which is running for the first time from 3/31/14 – 5/19/14. The course will demystify venture capital deals and startup financings and give both first-time and experienced entrepreneurs a definitive guide to secure funding. Both Jason and I will be participating in the course. If you want to sign up for the course, use the discount code of “ventureds” to get 20% off the price.
Mid-day yesterday I did a 30 minute fly by for the new Techstars NY class. Alex Iskold, the new Techstars New York Managing Director asked me to talk about “Top Mistakes Entrepreneurs Make.” It morphed into a fun 30 minute rant about a bunch of things that I thought Techstars founders should make sure they pay attention to during the program, and in life in general.
Reflecting on the talk, the most important thing I said was “Do One Thing For Yourself Every Day.” It can be 5 minutes, 30 minutes, or an hour. If you like chocolate ice cream, find an ice cream place and go get a scoop every day. If you do yoga, do it every day. If you like to go to the gym, go to the gym. If you are a reader, spend 30 minutes a day with a book. If you are a BSG fan, start at the beginning and watch all four seasons one episode per day (they each last about 45 minutes.) But be selfish and do one thing for yourself each day during the program.
Afterwards, Alex sent me an graphic that one of the founders at Hullabalu did. I thought it was awesome and captured some of the highlights, including “don’t believe your own bullshit”, something a lot of people are forgetting right now. And I described my favorite long distance relationship trick – the magic post card a day maneuver.
You may noticed from prior posts that we’ve had a difficult time at Foundry Group managing our growing portfolio of WordPress sites. We are not alone. You would think that by now, managing websites would be a solved problem, but that’s just not true.
Talk with any professional marketer about their websites and two things will become clear: 1) websites are absolutely central to how digital marketing gets done and 2) websites are a giant pain in the ass.
In our portfolio of startup companies, following is how websites usually get managed.
When companies are just getting off the ground, the founders often build the websites themselves, increasingly with flat HTML because it is simple and efficient. The websites are usually thought of as simple extensions to the product themselves.
At some point (hopefully) the business starts growing and a professional marketer is brought on board. In order to do their jobs marketing needs a content management system, often WordPress for simple use cases.
This is where things start to break down. Startup engineering teams are now tasked with managing a CMS system. This may be simple at first, but things get complicated very quickly. Hosting offers little beyond just hardware and maybe some server configuration. Professional website developers need much more than that — they have to collaborate in teams, work with version control, deploy changes, and as the company grows scale their site and make sure it is running fast 24×7 — aka website DevOps.
Guess who’s responsibility this becomes? The startup’s ops and engineering team. Every hour invested in this marketing infrastructure comes directly out of the bandwidth available for product improvements. Total break down.
At Foundry Group we went through a similar pattern, but here at Foundry it was Ryan (a co-founder and former engineering leader at Excite) who played the role of VP Eng. He spent too many hours over the past year baby-sitting our WordPress mess. He eventually got sick of me texting him that there was a problem somewhere.
This is why we are so excited to announce that our portfolio company Pantheon now supports WordPress. Over the past two years they have worked entirely in the Drupal ecosystem (their roots) and now run over 55,000 sites. They have built an incredibly powerful multi-tenant platform with the best set of website developer tools in the world and a container based run-time that can scale sites from 0 to >100M page-views entirely in software. All of their technology is now available to WordPress developers.
We like many of their customers were begging for some time for them to support WordPress. That day has finally come. Ryan is retiring the website pager and I’ll have to find some other way to annoy him on a regular basis.
Last year Inc. Magazine invited me to write a quarterly article for them for both Inc. Magazine and Inc.com. I wrote three – this is my last one. I’ve enjoyed writing for Inc., but earlier this year decided to stop writing for other web sites, at least for a while, as it had become a burden with all the other writing that I’m doing. I thought it would be fun for my last article in Inc. to be self-referential, so I wrote this article about why I write. You can find it on Inc.com at The Best Way to Improve How You Think.
I set out to be an entrepreneur and then an investor. I became a writer almost by accident. Now, I can’t imagine not writing–it’s something I do daily. It’s how I problem solve. And it’s crucial to my continued learning and growth.
In the late 1980s, I started my first company, Feld Technologies, which wrote custom software for companies. This was back when personal computers were becoming popular in a business context. But they were complex. Computer salesmen hawked them speaking a language you didn’t understand, in a style that could have worked equally well on a used-car lot.
Our clients wanted to understand what they were buying. They didn’t care about RAM or CONFIG.SYS settings. So I started writing memos about how the computers and the software they were buying would solve their business problems.
I moved my writing online in the mid-1990s and eventually to my own blog, Feld Thoughts. I had become an angel investor using some of the money I’d made from the sale of Feld Technologies, and those experiences provided plenty of blog fodder. My partner Jason Mendelson and I even churned out a series on venture capital financing. This was during a time when venture funding was in the dumps, and the process was opaque. In about 30 posts, we demystified it. Finally, after almost 20 years of writing, the light bulb went on for me.
I write to think.
Forcing myself to sit down and work through these ideas in a logical sequence for an audience of readers required me to refine my thinking on how I invest in startups. How could I make the financing process more efficient? What’s the best way to structure a deal? I learned a lot, both from my writing and my readers’ responses.
As a result, my approach to VC deals changed after those posts. I simplified my deal terms. I stopped negotiating over nonsense. I had no patience for long arguments over things that didn’t matter.
My thoughts really began to crystallize when I started writing books. In 2010, I co-wrote Do More Faster: Techstars Lessons to Accelerate Your Startup, with Techstars CEO and co-founder David Cohen. During this process, David and I nailed down many of the startup strategies that had been rolling around in our heads. I don’t think it’s a coincidence that Techstars’s growth accelerated, as did the growth of the companies we worked with, after publishing that book.
This is not to say that everyone should write books. But some form of regular writing is one of the best ways to give yourself time for reflection and analysis. It could be any kind of writing. Consider Jeff Bezos’s approach to meetings. Whoever runs the meeting writes a memo no longer than six pages about the issue at hand. Then, for the first 15 to 30 minutes of the meeting, the group reads it. The rest of the meeting is spent discussing it. No PowerPoint allowed. Brilliant. (I’ve long felt that PowerPoint is a terrible substitute for critical thinking.)
As helpful as I find writing daily to be, it doesn’t always come easily. I often go through long, dry stretches where my writing is uninspired. I stare at the screen, pecking out a few words hesitantly. This used to frustrate me, but now I realize it’s just part of the process. Part of the trick is figuring out your most productive writing conditions; for me, it’s early in the morning or late at night, preferably with Pink Floyd, electronic music, or classical piano blaring.
Many people might find a blank screen with its blinking cursor terrifying. Where do I even begin? you might ask. These days, I much prefer staring at that screen to standing up in front of a crowd. I think better, and I learn much more.
Suddenly anonymous apps are all the rage again. Secret and Whisper are the two that have recently made headlines, but there’s a cockroach like proliferation of them being funded by VCs.
As one of my favorite BSG quotes goes, “All this has happened before, and all of it will happen again.”
I was generally ignoring this until I read a long post by Austin Hill titled On your permanent record: Anonymity, pseudonymity, ephemerality & bears omfg! It was outstanding and referred to a tweet stream by @pmarca on the same topic.
I’ve been trolled since I first started interacting with other humans online in the mid-1980s. The first time it happened was shocking to me. I was young (under 20), on a Usenet thread, and was part of what I thought was an interesting conversation. I no longer remember what the comment was that shook me up, but it was the equivalent of “go fuck yourself with an axe, chop out your liver, and die.”
Yeah – I wasn’t ready for that. After a few years of being trolled, I learned to completely ignore it. I recall discovering “anonymous coward” on Slashdot and – after thinking someone had come up with a particularly clever user name, I realized that was their label for all “guests” who commented anonymously.
When FuckedCompany.com came out in 2000, it was startling at first, but then it quickly became predictable. If you were part of a company that was fucked, you knew it. But when confidential information started appearing on a daily basis, especially in contexts where companies were trying to do the right thing, it became upsetting. Eventually, like being told to go fuck yourself with an axe, I became numb to it and started ignoring it.
At this point in my life, I realize that it is all just noise. So, for me, I just ignore it.
It’s the same kind of noise that destroys lives. It’s so much easier to be cruel when hiding behind a wall of anonymity. We already know how much easier it is to be cruel over email versus in person. Now put up an anonymous wall. Say anything you want. Release any confidential information you want. Lie about anything, since there is theoretically no way to trace it back to you. You are no longer accountable for what you say or do. You can say whatever you want, whether it is true or not. You can perform systematic character assassination without any consequences.
Every now and then one of the anonymous apps gets hacked. All the user data gets revealed. In the past, there wasn’t enough critical mass of this for anyone to care. But this time around, there might be. And, and Austin says in his post, there is merely the illusion of anonymity here.
“FALSE EXPECTATION OF ANONYMITY: The security model for both these applications is horrendous and irresponsible. The give the user an illusion of privacy, encourage users to say things without the burden of identity (both in good or bad cases) — but then provide no real anonymity or privacy is deceptive.”
Go read the whole thing – I won’t repeat it here. But if you think what you are putting up on these apps is really anonymous, then keep doing it at your own peril.
But why are you doing it? What is the value to you? What is the value to society? What is the value to anyone else? And what is the cost?
This isn’t a moral question. Do whatever you want. But ask yourself the question “why”.
If you think this is new and exciting, just remember all this has happened before, and all of it will happen again.
As we roll into the weekend, and I start another digital sabbath, I’ve got the question “what really matters about being human” rolling through my mind.
I spent the afternoon at the Silicon Flatirons conference SciFi and Entrepreneurship – Is Resistance Futile? I thought it was phenomenal and remarkably thought provoking. I came back to my office to find Dane and Eugene playing TitanFall on my 75″ screen. In a few minutes I’m heading out to dinner with my parents, Amy, and John Underkoffler of Oblong who was in town for the conference. The juxtaposition of another intense week rolling into the weekend and a day off the grid intrigues me.
The first panel was a fireside chat between me and William Hertling. William is one of my favorite sci-fi writers who I think has mastered the art of near term science fiction. If you haven’t read any of his three books, I encourage you to head over to William’s website or Amazon and grab them now.
At the end of our fireside chat, we were asked a question. I heard the question as about mortality so I went on a long space jam about how I’ve been struggling with my own mortality for the past 18 months since having a near fatal bike accident (one inch and it would have been lights out.) Up to that point I felt like I had come to terms with my own mortality. I would often say that I believed that when the lights go out, they go out, and it’s all over. And I’m ok with it.
But last fall I realized I wasn’t. And during my depression at the beginning of 2013 I thought often about mortality, how I thought about it, whether I was bullshitting myself for the previous 25 years about being ok with it, and what really mattered about being alive, and being human.
I then handed things over to William. He proceeded to answer the question that had been asked, which was about morality, not mortality.
Oops.
When he finished and I’d realized what had just happened, I emitted a gigantic belly laugh. And then for the next couple of hours I kept applying the lens of “what really matters” to the discussion about science fiction, entrepreneurship, and the human race.
From the meditation I’ve been doing, I’m definitely exploring “listening to my thoughts” rather than obsessing over them. I’m recognizing that the narrative I’m creating in my brain is just my narrative and doesn’t necessarily have any real meaning, or importance, at all. 150 years from now, I don’t believe any of it will matter. And then, suddenly, the great John Galt quote “It’s not that I don’t suffer, but that I know the unimportance of suffering” comes to mind.
Sometime during the fireside chat, the statement popped out that “I believe the human species dramatically overvalues its importance to the universe.” I think this is going to be a radical point of conflict with the evolution of machines over the next 50 years. At this stage, it’s a part of what gives our lives meaning. There are so many complicated things that happen on a daily basis that create stress, conflict, controversy, and emotional responses. All of them theoretically generate meaning, but when I “listen to my thoughts” I recognize the unimportance of them.
And then I start searching for what really matters. Both to me, and about being human.
See you Sunday.
It’s been a blast to get to know and work with Eliot Peper. His book, Uncommon Stock, is the first one that we published at FG Press. If you want to read – and comment – along with me, grab a copy of Uncommon Stock on BookShout.
I asked Eliot to write a short post about how he’s feeling and thinking about the category of “startup fiction” now that the book is out in the wild and he’s getting some great feedback.
Following are his thoughts.
Business case studies have wrestled through many different components of entrepreneurship. Bloggers and Quora have picked up the slack for the situations those case studies miss. Management books delve into every nook and cranny of strategy and tactics. Talking heads discuss the ins and outs of everything from product development to investment theory. Gurus wax lyrical about vision and lean, focused execution.
But there’s one critical piece of entrepreneurship that these experts miss. Their analyses emphasize the rational. They draw out lessons-learned from business experiences and try to share best practice with aspiring entrepreneurs. Knowledge is important and many experts are happy to share their thoughts (whether you want to hear them or not!). But they too often focus on the brain at the expense of the heart.
Building a business is a human experience as well as an institutional one. That’s why I love Brad and Amy’s frank discussions in Startup Life. In thinking about growing an organization it’s easy to forget that it’s all made up of individuals. These people lay the groundwork and set the course for the companies they found. They also struggle constantly with work/life balance, relationships, burnout, and team dynamics.
It’s a truism in venture capital that startups fail most often not because their product explodes, but because their team implodes. If you think high-school had a lot of drama, try a high-speed tech startup. Inspiration, betrayal, falling-outs and last-minute-comebacks are par for the course. Everyday I’m blown away by the incredible entrepreneurs I know and work with. Their passion fuels them through the equally challenging rational and the irrational halves of company building.
The emotional reality behind the scenes in every startup is what inspired Uncommon Stock. I thought that fiction could give an intimate peek into the minds of founders. Early readers have pointed out something that I find hugely cool: the other benefit of Startup Fiction is that its so damn accessible.
People who read non-fiction books about entrepreneurship tend to already be engaged in the startup world in some way. We’ve worked for a startup. We read Techcrunch regularly. We go to SXSW. Living and breathing that world, it’s easy to forget anyone else is out there. But readers that aren’t engaged with tech and picked up Uncommon Stock simply because they wanted a good page-turner are reaching out to say how awesome it is to steal a glimpse into our startup boudoir.
We are blessed to live in a magical world filled with some of the most talented people on Earth. Hopefully together we can help to illuminate the heart of the start.
Today, Rover announced that Menlo Ventures has led a new $12m round of financing. As is our style, we participated, but we’re excited to have a new partner to join us, Madrona, and Petco in this fast growing adventure.
Lots of VC firms are once again talking about online marketplaces. Some get it; many don’t. Being systematic about what it takes to build and scale a marketplace effectively and make it an enduring enterprise is difficult.
We learned this dynamic in the early 2000’s with our investment in ServiceMagic. We invested in the company in 1999 during the ascension of the Internet bubble. We loved the two founders, Michael Beaudoin and Rodney Rice, but knew very little about marketplace businesses or the home improvement category. But a lot of people were funding marketplaces and other online “things” in this arena – well over $500 million of VC capital went into the home improvement market alone.
It was an unmitigated disaster for almost every company except ServiceMagic. In 2000, Michael and Rodney cut the business drastically, changed the business model to a lead-fee system, which they pioneered online. By 2003 nearly all of their competitors had failed, the companies that went public pre-bubble were trading sub-$1 / share, but ServiceMagic was growing like crazy and was very profitable.
Before ignoring vanity metrics became trendy, ServiceMagic ignored them. Michael and Rodney were data obsessed, getting hourly reports with key metrics. They understood the different dimensions of the business and were laser focused on drivers of supply and demand in each market they operated. They eschewed slick marketing, were systematic about growing headcount, learned how to master local expansion models, and stayed obsessively focused on the quality of transactions, instead of simply the quantity, moving through the marketplace.
We invest early in the life of a company. While we weren’t the first investor in Rover, when Madrona partner Greg Gottesman called and told me that I had to meet Aaron Easterly, the co-founder of Rover, I happily obliged on my next trip to Seattle. In ten minutes I knew I wanted to back Aaron as he had the same characteristics as Michael and Rodney. And, while after 10 minutes I knew nothing about the dog sitting market, as a dog owner I instinctively understood and appreciated the problem.
So – our first order sort in the case of Rover was Aaron and the team. We loved what we saw. No bullshit. Total quants. Deep domain love. Complete lack of interest in marketing nonsense and overpromotion.
And yes – after a little more exploration it was clear that Rover had a huge addressable market. Current commercial solutions are generally despised and the opportunity for a two-sided marketplace is enormous. Best of all, there are very obvious RAM (remnant asset monetization) dynamics to the marketplace.
Sure enough, a year after our initial investment, our premise for the investment in Rover shows clearly in the data. All of the underlying marketplace metrics – including activation, fill rates, and repeat usage – are accelerating rapidly. Dogs owners trying the service now will spend twice as much monthly as those trying the service 18 months ago. Sitters joining the marketplace now will earn 50 times more money in their first three months than those signing up 18 months ago.
Oh – and Michael Beaudoin from ServiceMagic joined the board last year as one of our outside board members.
If you are a dog owner, or want to be a dog sitter, try Rover out today.