Month: July 2016
I thought this was outrageously brilliant. Thanks to Andrew Hyde for sending it to me.
For a long time I’ve ranted against naming your startup community “Silicon Whatever.” Instead, I believe every startup community already has a name. The Boulder startup community is called Boulder. The LA startup community is called LA. The Washington DC startup community is called Washington DC. The Seattle startup community is called Seattle. You get the idea.
I expect many people in the San Francisco startup community tire of being told they are in Silicon Valley, or maybe they enjoy the halo effect enough to overlook it.
Regardless, Christoph Sollich totally nails how to brand a startup community – in this case his home town of Berlin.
Many cities around the world have bike to work day. We take it up a level in Boulder and have an annual tube to work day which occurred today.
The gang at Sphero went all in and decided to make it a Raft to Work day. They tried hard, but ended up with a classic FAIL blog experience.
Enjoy a laugh at the end of the week after a troubling few days in the world.
I woke up feeling subdued this morning. I didn’t know why but after talking to Amy I realized that the emotional impact on me of the horror in Nice is weighing on me. Amy described her connection to it to me – she’s been physically in the same spot that the tragedy happened – and even though we are far away, something very personal hit home about the whole thing.
We are long-time friends with Fred and Joanne Wilson. After my call with Amy, I did my daily news routine, which includes a few minutes in Feedly skimming all the blogs I subscribe to and reading the ones that catch my attention. Both Fred’s and Joanne’s did today.
I read Joanne’s post from yesterday titled Pledge 1% first. It perked me up a little and made me smile, as Pledge 1% is the evolution of the Entrepreneurs Foundation of Colorado which I co-founded in 2007. My partner Seth Levine took the lead a few years in and, with a few other people including Ryan Martens, the co-founder of Rally Software, have evolved our model into a national one. It makes me very happy to see it expanding to NYC in a significant way with Joanne supporting it. If you are in NYC and interested in learning more, attend the Pledge 1% Happy Hour on July 27th.
I then ended up on Fred’s blog. He wrote What Do You Do? What Do You Say? about Nice. In many of the recent attacks and violent situations I’ve felt emotional kinship to Fred. He’s written about things right away in words that are heartfelt and reflect my emotions. I’ve commented on the posts, supported the charities Fred has pointed out, such as the Fund for Nice, and occasionally written a post pointing at them. But I’ve definitely been more reserved about my emotions as it takes me at least a day or two to process them, and at that point the world has often moved on from the immediate aftermath of whatever happened.
Today I didn’t feel like waiting. Amy and I have a quiet weekend together and plan to have dinner with my parents and aunt Cindy/uncle Charlie on Saturday and then brunch with David and Jill Cohen on Sunday. These are all people we love deeply and we get to be with them in a very safe and comfortable context. I’m going for two long runs, will spend time finishing up the third edition of Venture Deals, and just being with my beloved.
Against the backdrop of this, the Nice events are extremely unsettling. Fred ended his post with a powerful introspection / call to action:
There is an epidemic in the world, a sickness that is spreading and afflicting more and more people. It is mental illness. We need to diagnose its cause and treat it. Until we do that, we will be facing more of these mornings. I think many of us are wondering what we can do to help with that. I certainly am.
I hear entrepreneurs use the word disruption on a daily basis and continuously hear the cliche change the world. In entrepreneurial circles, it’s clear to me that violence, hatred, and discrimination or whatever you want to label it is another category where we need to pay attention to disruption before it changes the world in ways we don’t want it to. Or that we need to change the world away from the themes that are starting to appear on a very regular basis. I don’t have answers, but I know I’ll have reflections this weekend.
If we fund an early stage startup company today and it’s hugely successful, it’ll be coming into its own in 2025. Ponder that for a moment.
That’s how our business – and entrepreneurship – really works. With all of the excitement around entrepreneurship in the past few years, there has been a lot of shorter term thinking. I’m seeing and hearing a lot more of it these days. This is dangerous, especially for founders.
I was in Boston at the end of May and had three separate experiences in one day. The first was with a company started in 2011 that is now a real business. The second was Techstars Boston Demo Day, showcasing 14 brand new companies. We started Techstars in 2006 and ran the first Boston program in 2009. The last was dinner with Alex Rigopulos, the co-founder of Harmonix, which he co-founded with Eran Egozy in 1995, sold in 2007, bought back in 2010, and is still running today.
We have three typical units of measure in business today: a month, a quarter, and a year. Many companies measure things on a daily basis, but decision making at this level is particularly difficult, especially as you add people to the mix. Most of the monthly measurements are either backward looking (e.g. financial reporting) although some are cadence generating (product release cycles, which can be continuous, but with significance once or twice a month for many companies.)
You get a little planning in the mix on a quarterly cycle. If you are on a leadership team, the question “how did the quarter go?” is likely a common refrain you hear four times a year. If your company has a good planning rhythm, you are reflecting on the quarter while simultaneously planning and adjusting for the next one. We are in the second week of Q316 – if you’ve rolled out your Q3 plan or your 2H plan to your team then you know what I mean.
The annual cycle is very predictable and omnipresent. I don’t think it merits much comment here.
While these are all important, none of them matter nearly as much as a long-term aperture. If you limit your thinking to one year, you are screwed in the long term. Humans are particularly bad at non-linear thinking which is at the core of any innovation process. If you want to understand this better, go soak in Ray Kurweil’s classic essay about The Law of Accelerating Returns where he discusses the intuitive linear view versus the historical exponential view.
Now that you’ve spent a few paragraphs thinking about days, months, quarters, and years, consider a decade. Can you even imagine your company over the next decade? While it’s easy to feel like we are compressing time with extreme success cases like Facebook and Twitter, consider Nike from 1964 to 1974 or Starbucks from 1971 to 1981 (Howard Schultz didn’t even join until 1982.) For perspective, explore any successful company’s first decade.
While there is a ton of variability in the trajectories of various successful companies, my favorite personal example is Harmonix, which spent a decade trying to go out of business every year before its “overnight success” of the launch of Guitar Hero. From the epic Inc. Magazine reflective history of the company in 2008.
It all easily might never have happened. “We were on the brink of death, I don’t know, 10 times over those 10 years,” Rigopulos says. Harmonix missed the cash gusher of the Internet bubble almost entirely while it pursued ideas that bombed miserably, one after another. In 1999, the year an online pet store fronted by a sock puppet raised $50 million, Harmonix was laying off staff. Its founders sometimes give the impression of still being a bit shaken. Last year, when fawning organizers of a video game conference asked Rigopulos to give a speech about “living the dream,” he wistfully marked up a PowerPoint chart of Harmonix’s annual profits and losses. He labeled the company’s breakout year, 2006, as “The Dream.” The years 1995 through 2005, shown almost entirely in red ink, were “The Part Before That.
I turned 50 in December and have been thinking more about the passage of time recently. I’ll be 60 in 2025. That’s a good marker for many of the early stage companies I’m involved in. “You’ll be the real deal when I’m 60” is a powerful way for me to frame the time commitment it takes to create something substantial out of nothing.
The next time we talk, tell me what your company will look like in 2025.
I had a two hour run scheduled today that’s not going to happen. I’m nauseous, tired, stuffy, and fuzzy feeling. It’s all because of something that happened on Friday.
I turned 50 in December. A right of passage in America when you turn 50 and have good health insurance is a colonoscopy. I wasn’t thinking very hard about this until a friend of mine had one a few months ago (at 51) and discovered she had colon cancer. A week later she had major surgery and today she’s doing fine as they “got it all out.” Another friend had one at age 42 since his family had a history of colon cancer and they discovered a major pre-cancerous tumor. His view is that he’d be dead if he hadn’t had the procedure.
So – in I went on Friday to have my colonoscopy. I have another friend who turned 50 within a month of me who was also having his first colonoscopy on Friday. As we drank our pre-colonoscopy “cocktail” which will be familiar to anyone who has had a colonoscopy, we joked about spending the evening on the toilet getting empty. Little did we understand the magnitude of what we were joking about – that only hits home around 4am on your 11th trip to the bathroom.
The procedure went well and I’m all clear (excuse the double entendre). Amy took a few pictures of me after the procedure. Here I am peacefully enjoying my fentanyl induced nap. I can’t tell whether I’m napping next to a machine running Windows Vista, XP, or 7, but given the various end of life for each it doesn’t give me a lot of comfort.
I’m always fascinated by the dedicated monitors in a hospital. Non-standard cables, funny button shapes, odd LED colors, and lots of extra controls. On the other hand, my 15 years of running is paying off, as demonstrated by a resting heart rate of 50 and a blood pressure of 105 over 67.
I slept all afternoon Friday and then went to bed early Friday night. I’d fasted all day on Thursday (part of the process) so my body was extremely uncalibrated. I have no idea what I ate on Friday or Saturday, but when I went to sleep yesterday my stomach was singing strange gurgling sounds. I slept in again today and am pondering taking another nap soon (it’s 10am).
I look forward to feeling normal again tomorrow.
One of the consistent characteristics of the tech industry is an endless labelling of technology and approaches. Some of it is foundational resulting from some entirely new. Much of it is re-categorizing something, either because it is suddenly trendy again or because a set of ideas have been organized in a new way. When I was in my 20s, I found this exciting. Now that I’m in my 50s and am used to this, I find it relaxing, as it makes me feel at home.
An example of this is artificial intelligence (or AI). If you teleported here from another planet yesterday, you’d think we just discovered this thing called AI and were creating bots to exercise it while others were writing philosophical treatises to try to figure out how to prevent it from exterminating the human race. If the following names – John McCarthy, Marvin Minsky, Allen Newell, Arthur Samuel and Herbert Simon – don’t mean anything to you and you think you know something about AI, I encourage you to go buy a copy of The Society of the Mind and to set your DMC-12 with a flux capacitor to 1956. If you still don’t know what I’m talking about, that’s cool – just ignore me.
Another example is big data which became all the rage around 2012. I keynoted an Xconomy Conference on Big Data with the opening line “Big Data is Bullshit.” My real quotable comment was “Twenty years from now, the thing we call ‘big data’ will be tiny data. It’ll be microscopic data. The volume that we’re talking about today, in 20 years, is a speck.” Nonetheless, hundreds of big data companies were created and funded.
Within the past two years, the phrase machine learning has taken over as the label de jour. Any reader of science fiction knows that the phrase – and the activity – has been around for a long time. If you have a Tesla, you are probably telling all your friends about how it uses machine learning. There’s even a Stanford course on Coursera about Machine Learning. But, what does it actually mean?
I ran into two awesome blog posts the other day titled Machine Learning is Fun! and Machine Learning is Fun! Part 2. Adam Geitgey, who I don’t know, did a wonderful job of writing about this in an accessible way while evolving examples that includes Super Mario Brothers (from 1985) that goes very deep by way of demonstration.
If you’ve got other great introductory resources for Machine Learning, I encourage you to put links in the comments.
I think Shoe Dog by Phil Knight is the best memoir I’ve ever read by a business person.
I consumed it in a day last week. It’s about the origin story of Nike, which started out as Blue Ribbon Sports.
Unlike so many memoirs, it’s not an equally balanced arc through Knight’s life. It’s not an ego gratifying display of his awesomeness, heavily weighted in the success of the company and all the amazing things that went on around that. Instead, it’s a deep focus on the beginning years of Nike especially around the first decade. It quickly gets to 1964 and the equal partnership between Bill Bowerman and Knight. But then it takes it’s time, year by year (each chapter is titled with the year number only) through the first decade of the company.
It’s an incredible story. I didn’t realize that for the first five years of the company, Knight had to work full-time – mostly at Price Waterhouse and then Coopers & Lybrand as an accountant – because the company didn’t have any resources to support him and his new family. He used nights, weekends, and in all the gaps in between to get Nike (the Blue Ribbon Sports) up and running. Year one revenue – in 1964 – was $8,000. Year two revenue – with one full time employee (not Knight) was $20,000. Year 41 revenue (2015) was $30.6 billion with a net income of $3.3 billion.
Knight covers all of it in detail. The ups and the downs. The many downs. The moments where he felt like he could lose it all, which seemed to happen at least once a year. His personal struggles as a leader and a manager. The people that drove him fucking crazy at the beginning, but were ultimately indispensable to the company. His momentary conflicts about whether or not the struggle was worth it. The breakthroughs – mostly understood in hindsight – when he realized they had gotten to another level.
The thread of financing the company, especially through the first decade, was just incredible. His only real source of financing was tradition banks (who sucked) and partners (playing the float). The company had literally no equity available to it, but was growing at a rate that would put most of today’s VC-backed startups to shame. He made it work and how he did it was awesome.
It’s incredible to get inside of a man now worth over $25 billion and the founder of one of the most iconic brands on the planet at the very beginning of his story. If you are a founder, this is a must read.
My partner Lindel Eakman wrote a post a few days ago about his transition from Austin to Boulder and a really helpful one about how to work with him titled A Human User Interface….with lots of quirks. This prompted me to poke around for other content from the limited partner (LP) side of the LP/VC/entrepreneurship universe.
I think the first LP blogger was Chris Douvos who periodically puts up an instant classic post at Super LP. I fondly remember a meeting with Chris in NY at the end of the day when we were raising our first Foundry Group fund. I was tired and dragging a little from the fundraising, but Chris’ energy and enthusiasm around VC picked me back up in advance of dinner. He didn’t invest in our fund, but he made a strong impression on me.
OpenLP is a new site moderated by the gang at Sapphire Ventures that seems to be a collection of all the LP stuff floating around the web. They are also promoting the idea of an #openlp twitter hashtag. It does appear that they need to work on their SEO so they don’t get confused with Free Open Source Church Worship Presentation Software
The team at Notation Capital is doing a really good podcast with interviews with LPs. Sapphire Ventures is again in the mix as a sponsor and – no surprise – episode 3 is with Chris Douvos.
My current favorite podcast, Harry Stebbings 20 Minute VC, is starting to have some LPs on it, including the omnipresent Chris Douvos and Sapphire Ventures Beezer Clarkson. I sense a pattern.
As I continued poking around, I found a few LP firms hosting blogs on their websites. I never find this as compelling as when an individual LP has their own blog, but it’s better than nothing. A few blogs I found include Top Tier Capital Partners, Weathergate, and Sapphire Ventures (on Medium).
I wish more LPs would blog to help VCs and entrepreneurs understand them better. If you know of any, please leave them in the comments.
Tell All Books are nothing new and some of the most explosive ones of all time have already come from California (in and around Hollywood). Suddenly, tell alls are focusing on high tech companies instead of movie stars. So far this year two have been published with a lot of fanfare and I bet there are several others that are under contract from major publishing houses.
The first was Dan Lyons book Disrupted: My Misadventure in the Start-Up Bubble which is about his time at Hubspot. I love that the very first review on the Amazon page for the book is from the Los Angeles Times and says “Disrupted by Dan Lyons is the best book about Silicon Valley today” as it is indicative of the content of the book, which I’d categorize as ironic at best and notionally confused. Why? Because, ahem, Hubspot is in Boston, where the majority of Lyons’ book was based.
The second, which I gobbled down on Friday and Saturday, is Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcia Martinez. This book actually takes place in Silicon Valley and we get to spend a lot of time at Y Combinator, Twitter, and Facebook.
Both books are classic tell alls, which is to say that they are juicy, salacious, sarcastic, nasty, critical, provocative, self-effacing, cringeworthy, and generally an effort in both education (“let me tell you how the world works”) and self-justification (“look at the injustice visited on me by how the world works.”) Each will titillate, depress, sadden, frustrate, and amuse you. Each will likely cause you to have conflicting feelings about the authors. I expect both authors view this as “the truth – at least my truth – is more important than being liked.” Or maybe they just got healthy advances from their respective publishers (Hachette and Harper).
While I have no interest in debating either Lyons’ or Martinez’s personal truth, I fell like their excessive cynicism and general loathing of most of the people they worked with undermined their stories. While big swaths of each books were fun to read, some parts of them didn’t ring true to me, especially in the case of Lyons, where I felt like I was reading the words of a sad and angry person trying to justify – in hindsight – what had happened to him. Occasionally there would be a bright spot and I’d feel like the story had turned a corner and was going to have some positive content, but in both cases they turned dark quickly again.
Having read my share of tell alls over the year, including some that were passed off as autobiographies, I mostly feel sad – sometimes for the writer and sometimes for all the people in his way. I hope that the process of writing the tell all gives some release and closure on what clearly was an unpleasant and unfulfilling life experience. Or, I’m hopeful it leads to more enlightenment, or a more satisfying role in life for the person, as it appears it has for Dan Lyons from a casual read of his blog.
I don’t know Lyons or Martinez, but I know plenty of people in each of their books. Sometimes I share their view of the people they write about. Other times I don’t. But I kept searching for some optimism somewhere in each of these books and found none. Ultimately, that is what disappointed me about each of the books.