Month: August 2016

Aug 21 2016

VC Bootcamp – January 2017

The second Reboot VC Bootcamp is happening at my place from January 19th – 22nd, 2017. The reactions to the first VC Bootcamp were awesome and I’m excited about doing this again with my friends at Reboot. Apply here.

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Aug 20 2016

Book: String Theory: David Foster Wallace on Tennis

I love tennis. I love David Foster Wallace. And I needed a book on the couch day after a gruelingly long week where I started feeling better and then was flattened this morning by a few spoons of my yogurt and peach breakfast.

String Theory: David Foster Wallace on Tennis was the second book I read today (the first was Dark Matter by Blake Crouch – more on that in another post) and it was delightful.

DFW was a tennis player and a pretty good one, especially as a junior player. If you’ve read Infinite Jest, you know that in addition to playing tennis, he is uniquely remarkable in how he writes about it.

String Theory was a collection of five prior long essays (or whatever the long essay equivalent of a novella is) about tennis. The first is about his childhood tennis experience titled Derivative Sport in Tornado Alley. Next is a delicious, curious, and sad essay titled How Tracy Austin Broke My Heart. The meatiest story is the third one titled Tennis Player Michael Joyce’s Professional Artistry as a Paradigm of Certain Stuff about Choice, Freedom, Limitation, Joy, Grotesquerie, and Human Completeness. I could have read this one twice and still not milked all the juice out of it. I paused after it and got some pretzels to munch on.

Having been to the U.S. Open a half dozen times, I completely identified with Democracy and Commerce at the U.S. Open. And the I remembered reading the last essay – Federer Both Flesh and Not – when it was published in 2006 as Federer as a Religious Experience in The New York Times PLAY Magazine. It used the Federer / Nadal Wimbledon 2006 final as the backdrop for its focus on Federer.

Once again, the footnotes are often better than the essay/story, as DFW lets his hair down (such as it was) and really lets loose on what is going on – unfiltered – between his ears.

I loved this book. If you are a tennis player or fan, do yourself a favor and get String Theory: David Foster Wallace on Tennis (it’s only in hardcopy and worth reading the old school non-digital way.) If you are a DFW fan, you’ve probably already read it (if you haven’t, prioritize!)

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Aug 17 2016

Seth Asks Me Difficult Questions in Minneapolis

On Tuesday 8/23, my partner Seth will be doing a Q&A with me at Beta.MN at the Target Plaza Commons in Minneapolis from 5pm – 8:30pm. He refuses to discuss anything about the questions he’s going to ask in advance, so I expect it will be spicy.

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Aug 17 2016

Fitbit Pole to Pole Badge

I love getting this in my inbox. Over the past few years I’ve walked from the North Pole to the South Pole. That’s 12,430 miles.

Pole to Pole Badge

If you are counting steps, it’s 23,882,806 as of this morning. And my best step day ever was April 7, 2012, when I ran a 50 mile race and covered 96,442 steps.Lots of Steps

Ok – back to work …

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Aug 16 2016

Deleting Crappy Draft Posts

In the cold light of morning, I just deleted three draft blog posts that I wrote last night during a bout of insomnia.

Their titles are telling about what was on my mind at 1am in the morning.

  • SaaS + Transaction Fees
  • Games Are a Hits Business, But B2B SaaS Is A Grind
  • The B2B SaaS MRR Funding Dead Zone

I usually write posts in real time (like this one). I don’t have a lot of drafts stored up nor do I spent a lot of time editing and trying to get the posts just right. Instead, I use my posts to think out loud as I play with ideas, explore my thoughts, or just write what is on my mind. I generally do one edit pass after I’ve written the post and then hit publish.

When I have a thought that occurs to me during the day and don’t have time to write a post, I toss a title into my WordPress Drafts folder and add bullet points on what is in my mind to the body of the post. Each of the three posts above were in my WordPress Draft folder (which had 18 this morning and now has 15) which accumulated over the past two months. The number ebbs and flows as I use a draft about once a week to stimulate a post.

I jammed through all three of these last night – it was probably an hour of writing. I just read through them to see what I had written. I found a bowl of illogical word soup mixed with random crap. While there were plenty of interesting thoughts, the sum total of them was a giant pile of incoherence.

I started rewriting SaaS + Transaction Fees and then got bored. I realized it’d be better to just delete the crap and start over some time in the future when the urge to write about this hit me again.

Over the last twelve years of blogging I’ve deleted many draft posts. When I think about the books I’ve written, it probably takes 150,000 – 200,000 words to get a 50,000 page book. Highlighting something and hitting Cmd-X is second nature.

I often get asked how I write so much. As any writer knows, the answer is to write a lot more than you actually publish. Accepting that part of the process of writing is deleting a lot of what you write is soothing, at least to me.

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Aug 16 2016

Dear Insomniacs: You Have My Empathy

It’s 1:34am in Boulder. I’m normally asleep by 10pm. However, since I returned from Australia, I’m up until – well – now.

For most of last week, I still felt shitty from the salmonella poisoning I got two weeks ago. I rationalized that it was ok to take an ambien every night since I was still sick. But, I’m not a fan of ambien or how it makes me feel, so I stopped on Friday. Since then, I’ve crawled into bed around 10pm with my beloved, tossed and turned for about an hour, and then gotten up and either read or typed on my computer.

I have several close friends who are insomniacs. Over the years I’ve heard their stories about being up in the middle of the night, completely awake. I see them yawn at 11am and know that regardless of what they are doing, they’d probably rather be in bed sleeping. I’ve always had sympathy for them, but I’ve never really understood it.

I have trouble sleeping maybe one night a year. On that special night, I get up and read on the couch until I fall asleep.

I’ve four nights into this no-sleep craziness on the heals of ten days of what is called gastroenteritis in polite society. It is exactly zero fun.

With that, my whining is over. I’m giving my insomniac friends virtual hugs wherever they are in the world. I’m going to crawl into bed and try again to go to sleep. Maybe I’ll feel like writing something actually useful to the universe tomorrow.

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Aug 15 2016

The 2% Change

Here’s something actionable for you on a Monday morning. If you want to improve your business, in addition to all the other things you are doing, focus on changing thing by 2%.

For example, raise your prices 2%. Eliminate 2% of your variable costs. Focus on the bottom 2% of your team and ask yourself if you really want them on your team. When you cater in food for a meeting, arrange a long term relationship and ask for a 2% discount. Take advantage of any pre-pay or early pay opportunities from vendors who offer a 2% or greater discount. Go through all of your recurring payables and ask yourself the question “do we need this?” and see if you can cut at least 2% of them. The next time you buy something from the Apple store, ask if you are getting a business discount and, if not, ask for one. If you get paid online using credit cards, explore options that are 2% less expensive. If you travel a lot, consider doing 2% more video conferences.

This works for your personal life also. Do you want to lose some weight? Eat 2% less and exercise 2% more. Are you tired? Sleep 2% more. Track your heart rate and see if 2% more sleep will lower your resting heart rate by 2%. Cancel 2% of your meetings. Spent 2% more time each waking day with your spouse, kids, and parents. Take a 2% break during the day and spend it alone going for a walk, fishing, or just sitting quietly on a bench.

You get the idea. As entrepreneurs we spend much of our time on transformative change. When I was president of Feld Technologies, I remember putting energy with my partner Dave into incremental change, especially when we were running short of cash. Don’t forget the 2%. It almost always flows directly to the bottom line.

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Aug 12 2016

First Seven Jobs

I’m going to play follow the leader this morning and blog my #firstsevenjobs on the back of Fred Wilson’s Fun Friday: First Seven Jobs post. I saw this meme go around last week while I was doubled up in the bathroom in Australia and thought it was cute but had no energy to participate. After telling my origin story during several interviews last week, I covered some new ground around first jobs so I thought it’d be fun to put it in one place.

#1: Curb Address Painter / Window Washer: I partnered with my tennis doubles partner Jon Zeitler and we painted street numbers on curbs for $2 / curb. There were lots of new houses being built in our neighborhood so we had plenty of leads, but we had to go door to door to sell, which was painful for two thirteen year olds. As a bonus, we occasionally washed windows. I remember procrastinating a lot. It was a hot and not very lucrative summer.

#2: Maintenance Worker: North Dallas Racquet Club: I cleaned the locker rooms, painted the building, picked up trash on the tennis courts, and knocked down wasp nests. My friend Jon (and others) got to work in the grill (which was probably 120 degrees, so I’m not sure that was a box of joy.) I got fired after two weeks for having a bad attitude.

#3: Fast Food: Potatoes, Etc.: The honors kids took over the Potatoes, Etc. in the Prestonwood Mall food court for a summer. I’d work for three hours and then go downstairs to the video game place and spend the $12 I made playing Tempest and Defender. I got fired for calling my manager a bitch in a moment of fury.

#4: Retail: Rave Electronics / Texas Instruments Retail Store: I spent 12 hours selling TVs one long summer day. I think I was on a combination of a very low salary and commission that theoretically would add up to something interesting. I quit after one day – I couldn’t stand it. I decided to try retail one more time with my best friend Kent and got a job at the Texas Instruments Retail Store (I think it was at Northpark Mall.) I thought I’d like selling computers more than TVs. Of course, I was selling TI 99/4A’s, which other than having sprites totally sucked, so that only lasted a day or two.

#5: Math SAT Tutoring: As a junior in high school I started tutoring for the Math SAT. I charged $30 / hour (instead of the $3 / hour my friends got working at retail stores) and had so much demand that I decided I would only tutor girls. Since I was a high school boy that seemed like a logical segmentation strategy. As a bonus, I was a junior and most of the girls I tutored were seniors. In addition to making a lot of money and only working a few hours a week, I ended up getting an 800 on the Math SAT.

#6: Programmer: Centronics (London): If you remember the parallel printer, you might remember the Centronics printer port (they invented the parallel printer port). My favorite dot matrix printer of all time was the P351 which I got as payment for spending the summer in London. living in Northfields and working in South Kensington, writing a character set generator for the P351 (and other Centronics printers) on an Apple II. It was a great job and the first work I ever did that I loved. I was lonely at times, being between my junior and senior year living far away from home, but it was an awesome adventure that shaped me in many ways.

#7: Programmer: PetCom Systems: I was the first employees of a husband and wife founded software company. At a time (1983) when almost all business software for the oil and gas industry was on minicomputers and mainframes (lots of IBM System/3xs), we wrote software for the Apple III and the IBM PC. I ended up writing two products over several years – PC Log and PC Economics – both of which I got paid $10 / hour + 5% of gross revenue. I learned about equity from this job, as I’d get monthly royalty checks in my first few years at MIT for amounts ranging from $1,000 to $10,000. It’s pretty awesome as a freshman, after getting the shit beat out of you in 8.02, to go to your mailbox and get a blue PetCom check for $5,000.

That was a fun walk for me down memory lane. I knew I sucked at working in stores but this reinforced it. To this day, I have trouble actually walking into a store to even shop. The web has been very good to me.

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Aug 11 2016

Love and Venture Capital

If you’ve missed me, it’s because I spent a week in Australia. Ten days ago, after being there for a few days, I came down with salmonella poisoning. I’m finally starting to feel normal again although I’m still exhausted. This has easily been the sickest I’ve ever been.

While I was gone, the gang at Reboot put up the Reboot Podcast #45 – What’s Love Got to Do with It?- with Fred Wilson and Brad Feld which was a delightful conversation between me, Fred, and Jerry Colonna.

The three of us have a 20+ year history that gives me joy every time I think about it.

I first met Fred in the suburbs of Boston at Yoyodyne in 1996. It was also the first time I met Seth Godin. I had just started working with Softbank and had been commanded to go to Yoyodyne and do “due diligence” by Charley Lax. I had no idea what Softbank or Charley wanted in the way of due diligence, so I went, hung out with Fred and Seth, and wrote Charley an email after saying “Looks great – Seth is awesome” or something like that. Softbank (and Fred – via his new firm Flatiron Partners, which was partially funded by Softbank) invested.

I first met Jerry in a conference room at NetGenesis in Cambridge. I was chairman and we has three product lines at that point: NetForm (an HTML form filler that was getting its but kicked by Allaire), NetThread (which was super cool but getting its butt kicked by something – maybe again Allaire), and NetAnalysis, which was the first weblog analysis tool and became the focus of the company. We sold NetForm to a company called Virtuflex (which went on to become Channelwave, which I became an investor in) and NetThread to eShare. Jerry, again through Flatiron (he and Fred had become partners), was an investor in eShare. I joined the eShare board as an outside director. eThread was acquired by Melita International in 1999 after a crazy ride that included a midnight negotiating session on the 173rd floor of some building in midtown Manhattan to try to merge with iChat. I remember walking about at around 2am with Jerry, completely wasted and frustrated. Welcome to 1999.

Over the last 20 years, the three of us have worked on lots of things in different configurations, but I’d put the deep friendship we’ve developed ahead of all of our business deals. We’ve won and lost together, had great moments as well as deep disappointments. But throughout, we’ve stayed best friends.

I enjoyed making the podcast, I hope you enjoy listening to it.

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Aug 4 2016

Formlabs $35 Million Financing

We just led a $35 million financing at Formlabs. In case you were wondering, lasers are super cool.

In 2010, when we invested in MakerBot, the maker movement was just beginning. While 3D printing technology had been around for 30 years, there were no desktop 3D printers. The concept of using an additive process for 3D printing, where you built up a 3D object from continuous extrusion of a material such as ABS or PLA (plastics) was well understood. But this technology had not been brought to the desktop at a $2,000 price point. MakerBot did that and created an entirely new market segment within the 3D printing industry.

Last year we invested in Glowforge, a company playing into the same trend that made MakerBot successful but in an inverse way. Instead of an additive process, Glowforge uses a subtractive process to create objects. Glowforge has a product that uses lasers to perform the subtractive process. In the same way that MakerBot completely disrupted the 3D additive manufacturing industry, we believe that Glowforge can completely disrupt the 3D subtractive manufacturing industry. Last week we announced that we led a $22 million financing for Glowforge.

In 2011, at about the same time that MakerBot was starting to scale, another new company – Formlabs – was founded with the vision of also creating a desktop 3D printer. However, unlike the technology that MakerBot used which was called FDM (Fused Deposition Modeling), Formlabs used a technology called SLA (Stereolithography) which has many advantages over FDM, but is more complicated to implement. As a result, it took Formlabs longer to get their product into the market.

In the fall of 2012, Formlabs did a $2.95 million Kickstarter campaign. In the early summer of 2013, around the time Stratasys acquired MakerBot, Formlabs started shipping their Form 1 printer. By the end of 2015, Formlabs shipped their Form 2 printer, which is a spectacular product.

While we knew Formlabs because of our MakerBot investment, we didn’t meet Max until after Stratasys had acquired MakerBot. I knew Max from a distance because we were both in the Netflix documentary Print the Legend. Even though there are many cringe-worthy moments, it’s a powerful story about the creation and emergence of MakerBot, Formlabs, and desktop 3D printing.

In 2014 Max hunted me down at a talk I did in Boston hosted by Katie Rae and Reed Sturtevant with my uncle Charlie about his book The Calloway Way: Results and Integrity. We talked for a little while and he made a powerful impression on me that I tucked away deep inside my brain.

This spring, Max and his cofounder Natan Linder reached out to me about having Foundry Group lead a financing. The company had only raised one major round of $19 million, led by Barry Schuler at DFJ Growth. Barry had a long history with 3D printing and he had put in a term sheet to lead the round Makerbot was considering. When Stratasys acquired the company, Barry invested in Formlabs. I’m on the board of littleBits with Barry and have loved working with him so between Barry’s encouragement, Max’s direct approach, and my love of lasers, we dug into Formlabs.

In the past two years, 3D printing has gone through the classic Gartner Hype Cycle bottoming out in the trough of disillusionment.

hype-cycle-for-3d-printing

At this point, we think there is an enormous void for a new market leader as we move into the slope of enlightenment. We are honored to get another shot at this with our investment in Formlabs.

Oh – and lasers are super cool.

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