Brad Feld

Month: January 2021

I expect we’ll be exploring, unscrambling, pontificating, and dealing with what is happening with GameStop (GME) for a while.

If you are reading this in the future and want some historical context for the rest of this post, this chart from the last 30 days of trading is instructive. At the end of 2020, we start at $20 / share.

30 days later, it’s at $238 / share with a high of $482 / share.

I’m not going to analyze this. I know what I think GME is worth, and it’s not $238 / share.

This morning, Fred Wilson wrote a post titled The Revenge Of Retail. It’s got a lot of good stuff in it, but plenty of things that are very different than what I’m actually thinking about today.

He ends with a recommendation.

What we need to do is stop printing money to stabilize the economy. And start addressing the real economic issues that exist on main street, not wall street. Monetary policy is not the answer. Fiscal policy is. That won’t stop more Game Stops from happening. They are a by-product of markets. But it will get the money to where it is needed versus where it is just gameplay.

I’m more interested in the 2nd, 3rd, and 4th order effects instead of the financial and market dynamics. For example, from Fred’s post.

The generational aspect of this is important. Boomer hedgies getting crushed by young folks self-organizing in social media. It feels like a moment where you realize that the power structure has shifted and things won’t be the same.

But hang on. Is that actually what is happening? Let’s go to something Fred says in his next paragraph.

The financial system in the US, and in other developed countries, is a rigged system and has been for a very long time. Only big institutions can get into hot IPOs. Only rich people can invest in startups. Many of these rules are designed to protect “widows and orphans” but all they really do is make the rich richer and keep those without money out of the game.

Rather than keep quoting Fred, I encourage you to go read The Revenge Of Retail post and then come back to the rest of what is on my mind this morning.

When I was an undergraduate in college (age 17 – 21; 1983-1987), I was interested in business and read three magazines: Forbes, Businessweek, and Fortune. I learned about the stock market by reading those magazines. That period was full of pump and dump schemes, especially on the pink sheets.

There have been periodic articles about the pump and dump activity in crypto. With the introduction of frictionless (e.g., free trading), a coordinated online crowd of millions of people, and low float stock (either highly shorted or not much supply in the first place), the setup for a classic pump and dump exists.

The regulatory environment has no capacity to keep up with something like this.

A combination of factors has created an environment where completely different behavior is possible. Today’s news is that it is happening in the financial markets. We may be talking about it here because we are now on the other side of 1/20/21; our prior President is no longer on Twitter and Facebook, so there’s a new sandbox to play in.

The dynamics are the same. Sentiment is manipulated. There have been endless discussions about this around politics over the past few years. Welcome to another part of our world (financial markets), where the unintended consequences of technology wreak havoc.

I expect we will see many more and many different examples emerge over the next few years. Governments trying to regulate it each time will be slow, and all will fail to do what they want to do while creating other unintended consequences.

We are living in a complex system. Technology has increased the velocity of change. It’s recursive, as the velocity of technology is changing faster than ever.

I have no idea what’s next. That’s the reality of a complex system. All I know is that it is going to get much wilder.

And, the best picture of the day is linked to a txt thread I’m on with Amy (we both love Capybaras) that includes the phrase “PhD in the madness of crowds.”

Minor change: I initially titled this “The Gamestop Phenomenon.” That’s a nice error on my part (freudian slip maybe)?

False Reassurance

Jan 27, 2021

The Covid crisis has generated an extraordinary amount of what I like to call “false reassurance.”

Consider how many times you heard something general like the following some time in 2020.

  • Everything is going to be ok.
  • We will get through this pandemic.
  • Things will go back to normal.
  • You’ll look back on this as a unique time in your life.

Or, consider all of the messages you heard about the severity of the disease over the past year. Most of the messaging, until recently, was not “79,000 people in the US are going to die of Covid in the first 26 days of 2021.”

Or, “By the end of January 2021, over 425,000 people in the US will have died of Covid.”

It’s tough to focus on what is actually happening and what to do when bombarded by false reassurance. It doesn’t matter what the context is – Covid, business, relationships, health, sports, …

Pema Chödrön’s book, When Things Fall Apart: Heart Advice for Difficult Times is a powerful place to start when considering false reassurance. But, an even more grounding place is Jerry Colonna’s comment that “things are falling apart all the time.”

I’ve always loved the clichés about mortality, such as “Life is a fatal disease” or “Life is a process of continual oxidation.” I’m sure the physics majors out there can add to the clichés, especially since entropy always wins in the long run.

Amy and I work hard to eliminate false reassurance in our life. Instead of saying, “It’s going to be ok,” we try to address what is in front of us. Instead of denying reality, we deal with it. I try to do this in my work, although it’s much harder as the number of people in a system increase beyond two.

2020 has been brutal for many people, on many different dimensions. I expect 2021 will continue to be brutal, in some similar ways, but many that are different. There will be wonderful things mixed in, but they won’t be distributed evenly or equitably.

If you defer your own reality because of false reassurances, consider what would change if you deleted the false reassurance and started considering what was directly in front of you.

Last week I participated in a virtual tour of the Media Archaeology Lab. Amy and I are financial supporters, I gave them my vintage computer collection several years ago, and we’ve underwritten their acquisition of several collections. I believe the Media Archaeology Lab is now one of the largest collections of working vintage computers.

“Working” is an important part of the phrase. The team at the Media Archaeology Lab, including Dr. Lori Emerson and Dr. libi rose striegl are magicians who, along with many student volunteers, loving take care of, well, everything.

When most people who had an Apple ][ or Apple //e think of Zoom, they think of Zoom Telephonics or WGBH-TV’s Zoom.

When I saw bpNichol’s Computer Poems streaming on Zoom, I responded with, “Holy shit, this is awesome.” Yeah, that wasn’t very poetic of me.

Lori Emerson and an Apple //e being streamed by Zoom

A few minutes later, we saw Super Mario Bros. running on a Commodore 64. We talked about the history of Nintendo not liking this and their subsequent DMCA takedown notice. Some companies have no sense of nostalgia.

Here’s how you stream from an Apple //e to Zoom.

  • The Apple //e has an RCA jack for the monitor, so all you need to stream is an RCA cable and an AV to USB adapter.
  • Run the RCA cable from the Apple to the converter.
  • Plug the USB into your computer.
  • When you open your preferred video streaming software (Zoom, OBS, Twitch), the converter will show up as one of your camera options. 
  • Audio with the Apple //e is a little more complicated. You need an upgrade to the sound card, such as a ReActiveMicro Mockingboard v2.2, to get an audio line out. The Mockingboard has a 3.5mm audio jack, so you need a 3.5mm – RCA splitter from that to the AV converter.

Here’s how you stream from a Commodore 64 to Zoom

  • The Commodore 64 has an RF jack on the back that carries both image and sound, requiring something that can convert that signal to split audio and video channels.
  • A VCR is faster, easier, and more reliable than any other converter, but you can also use an RF modulator.
  • The RF cable runs from the back of the Commodore to the Coax-IN on the VCR via an RF-Coax converter.
  • Then connect RCA cables from the AV-OUT on the VCR to the AV-USB converter.
  • As with an Apple, when it is all set, the AV-USB converter shows up as a camera in your camera menu on any streaming software

If you want to see the full poem by bpNichol, here it is on Youtube.

If this is interesting to you, please consider making a cash donation to support the Media Archaeology Lab‘s operations. If you have vintage computers you’d like to donate, drop me an email.

I’m working on a new book with Dave Jilk, my first business partner. It is titled The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors. We are in the home stretch (it’ll be published sometime in the second quarter), and I’m adding a little connecting tissue to the major sections this morning.

The third major section (of five) is called Free Spirits. Dave had already written the section introduction, which meant that I had 20% less writing to do this morning than I expected.

As I read through what he had written, I remembered the story of Nietzsche’s “The Three Metamorphoses,” which I’ve been using a lot lately to think about my own life. Following is an appetizer from the upcoming book.

For Nietzsche, the best human beings are what he calls free spirits. Early in Thus Spoke Zarathustra, a section called “The Three Metamorphoses” describes three stages a free spirit must pass through in its full development: the camel, the lion, and the child.

The camel is a dutiful beast of burden, in a humble but not humiliating way. It is virtuous and willing to bear any difficulty to accomplish what is needed. But the camel is isolated from those who choose the comfortable and easy, leaving its spirit in a “desert.” In this desert, the camel transforms into the lion, which actively opposes tradition, taboos, and the status quo. In particular, the lion responds to the “Thou Shalt” of the world with a “Holy No.” The lion is a contrarian, an isolated iconoclast. But a spirit cannot create new values simply by saying “no” to the ways of the world. For that, it must become the child, which has a “beginner’s mind,” sees the world as play, a fresh start, as perpetual motion. The child speaks a “Holy Yes” which enables it to dictate its own will, not in reaction to the world but independently. As spiritualist Ken Wilber puts it, these transformations do not each supersede their preceding stage but rather they “transcend and include.”

It is not hard to see how this maps to disruptive entrepreneurship. The camel gets things done but is too embedded in the tasks of the moment to produce more than incremental change. The lion sees what is broken in the world and refuses to just go along, but has no way to find a truly novel path. The child frees itself of its attachments and starts fresh, enabling it to create an entirely new way of doing things that shakes an industry to its foundations.

If you are a free spirit, what stage of metamorphosis are you in: Are you a camel, a lion, or a child?

Poetry is complex, beautiful, and mysterious. My wife Amy writes poetry. So does my first business partner Dave Jilk (Rejuvenilia, Distilled Moments). There is a lot of poetry in my house.

Both Amy and I had tears in our eyes after listening to Amanda Gorman yesterday. I knew America had a national poet laureate, but I didn’t know we had a national youth poet laureate. We’ve now had four; Amanda was the first.

Even if you heard her read The Hill We Climb yesterday, I encourage you to listen (and watch) again this morning. If you want to go on an intellectual exploration of it, the New York Times Lesson of the Day is Amanda Gorman and ‘The Hill We Climb.’

If, for you, like me, reading is a more powerful way to absorb or learn something, the following is the poem.

When day comes, we ask ourselves, where can we find light in this never-ending shade?
The loss we carry. A sea we must wade.
We braved the belly of the beast.
We’ve learned that quiet isn’t always peace, and the norms and notions of what “just” is isn’t always justice.
And yet the dawn is ours before we knew it.
Somehow we do it.
Somehow we weathered and witnessed a nation that isn’t broken, but simply unfinished.
We, the successors of a country and a time where a skinny Black girl descended from slaves and raised by a single mother can dream of becoming president, only to find herself reciting for one.
And, yes, we are far from polished, far from pristine, but that doesn’t mean we are striving to form a union that is perfect.
We are striving to forge our union with purpose.
To compose a country committed to all cultures, colors, characters and conditions of man.
And so we lift our gaze, not to what stands between us, but what stands before us.
We close the divide because we know to put our future first, we must first put our differences aside.
We lay down our arms so we can reach out our arms to one another.
We seek harm to none and harmony for all.
Let the globe, if nothing else, say this is true.
That even as we grieved, we grew.
That even as we hurt, we hoped.
That even as we tired, we tried.
That we’ll forever be tied together, victorious.
Not because we will never again know defeat, but because we will never again sow division.
Scripture tells us to envision that everyone shall sit under their own vine and fig tree, and no one shall make them afraid.
If we’re to live up to our own time, then victory won’t lie in the blade, but in all the bridges we’ve made.
That is the promise to glade, the hill we climb, if only we dare.
It’s because being American is more than a pride we inherit.
It’s the past we step into and how we repair it.
We’ve seen a force that would shatter our nation, rather than share it.
Would destroy our country if it meant delaying democracy.
And this effort very nearly succeeded.
But while democracy can be periodically delayed, it can never be permanently defeated.
In this truth, in this faith we trust, for while we have our eyes on the future, history has its eyes on us.
This is the era of just redemption.
We feared at its inception.
We did not feel prepared to be the heirs of such a terrifying hour.
But within it we found the power to author a new chapter, to offer hope and laughter to ourselves.
So, while once we asked, how could we possibly prevail over catastrophe, now we assert, how could catastrophe possibly prevail over us?
We will not march back to what was, but move to what shall be: a country that is bruised but whole, benevolent but bold, fierce and free.
We will not be turned around or interrupted by intimidation because we know our inaction and inertia will be the inheritance of the next generation, become the future.
Our blunders become their burdens.
But one thing is certain.
If we merge mercy with might, and might with right, then love becomes our legacy and change our children’s birthright.
So let us leave behind a country better than the one we were left.
Every breath from my bronze-pounded chest, we will raise this wounded world into a wondrous one.
We will rise from the golden hills of the West.
We will rise from the windswept Northeast where our forefathers first realized revolution.
We will rise from the lake-rimmed cities of the Midwestern states.
We will rise from the sun-baked South.
We will rebuild, reconcile, and recover.
And every known nook of our nation and every corner called our country, our people diverse and beautiful, will emerge battered and beautiful.
When day comes, we step out of the shade of flame and unafraid.
The new dawn balloons as we free it.
For there is always light, if only we’re brave enough to see it.
If only we’re brave enough to be it.

The Hill We Climb
Amanda Gorman

In the US, we are currently getting a master class in “how not to lose.”

When I was young, my parents regularly said to me, “Don’t be a sore loser.” I was a serious tennis player between the age of 10 and 14. John McEnroe was my hero, so, not surprisingly, I had a temper on the court. I threw my racket, screamed a lot (mostly at myself), and moped around when I lost.

I also played soccer. For a few years, I was a goalie until one fateful game. I remember it being a big game – whatever our equivalent of a championship or playoff game was. I was a good goalie – quick, pretty fearless, with excellent hand-eye coordination. The game was a tie and went into a penalty kick shootout, which was a particularly cruel thing to do to a bunch of ten-year-olds. I can even remember the name of our team’s star (Scott), who missed his kick. I then missed the save on the next shot from the other team, and they won the game.

I walked off the field sobbing. I’d let my team down. If only I could have saved that goal. Why didn’t Scott make his shot? It was all my fault. I sucked.

My mom put her arm around me and said, “Don’t be a sore loser.” She hugged me. I still remember that.

When I play tennis, I still mutter to myself, but I no longer scream, throw my racket, or swear at the other player. I’ve won a lot in my life, but I’ve also lost many times. And, when I reflect on losing and tennis, I think of the two people who model losing and winning better than anyone I’ve ever seen.

Rafael Nadal and Roger Federer.

Following is an example from the 2017 Australian Open.

Nadal is exhausted from the tournament. And he lost. And yet, grace. Minute 1:45 – 2:00 of the video is delightful.

Winning gracefully is equally powerful. Following is Roger Federer from 2017. Minute 2:15 – 2:30 is beautiful.

This is how you lose. This is how you win. And then you get up the next day and try again.

At lunch today, Amy said “Welcome to January 112th.”

I just got an email from a friend that included the line, “I’m writing off the first 20 days of the year, so here’s to a much different 2021 starting next week!”

I didn’t really mark the end of the year as the “end of this phase.” The Covid crisis continues. The economic crisis continues. The mental health crisis continues. The racial equity crisis continues. Economic inequity is accelerating at a crazy pace. We just had an armed insurrection in the United States. 4,406 people died of Covid in the US in the last 24 hours.

I’m a long term optimist. But I’m also from Generation X, with the typical Gen-X characteristics of being cynical and disaffected. I embrace my slacker tendencies.

We are experiencing the culmination of many things. Amy and I have been talking about them each morning over coffee. In the midst of this, we are trying to stay centered, calm, and grounded. It’s hard.

Today, Techstars announced that Maëlle Gavet has joined as CEO

When David Cohen, David Brown, Jared Polis, and I started Techstars in 2006, we could have never envisioned what it has become. Today, Techstars is a global organization with around 300 employees, invests in over 400 new companies each year, and has invested in more than 2,300 companies worldwide. In 2006, an accelerator was a new idea; today, it is an integral part of the global entrepreneurial ecosystem. Entrepreneurship, which in 2006 was just starting to become talked about again after the collapse of the Internet bubble, is a global phenomenon. 

Maëlle is joining Techstars at an exciting time. David Cohen led the growth of Techstars from inception in 2006 to about 30 people. David Brown joined full-time in 2013 and did a spectacular job of growing Techstars to around 300 people and expanding it globally. Maëlle joins us to lead us on our next 10x growth.

David Cohen is taking a new role as Chairman of the Board. David Brown and I are each board members, joined by Stephanie Copeland, John China, Shanel Fields, and Maëlle. Having talked to many great potential CEOs, we are incredibly excited about working with Maëlle.

In 2010, when the world began to emerge from the global financial crisis, Techstars started its first wave of real growth. At the time, the regular rap on entrepreneurship was, “If you are serious about starting a high growth company, you should move to the bay area.” As expressed in my book Startup Communities: Building an Entrepreneurial Ecosystem, I took the opposite view, where I asserted that every city with at least 100,000 people could build a thriving startup community and needed to do this as an important component of the socio-economic health of their city. As Techstars expanded throughout the world, we helped prove this. 

Today, there are fantastic startup communities everywhere, and great companies created in many different places. Given the Covid pandemic’s impact on society, we are experiencing a new geographic distribution of people and entrepreneurs. Remote and distributed work is now a given as part of our entrepreneurial ecosystems. The need for entrepreneurship, innovative thinking, and transformation of traditional systems is more apparent than ever before.

Our society doesn’t merely need “more tech,” as evidenced by the growing backlash against Big Tech. A few days before meeting Maëlle for the first time, I read her book Trampled by Unicorns: Big Tech’s Empathy Problem and How to Fix It. I did my first call with her with an enormous smile on my face, as I felt immediate alignment with her value system before we even started talking. She reinforced our values’ alignment through our conversations and her actions while recruiting her to be CEO.

Maëlle – welcome to Techstars. I’m ready to help you in any way I can on the next phase of our journey.

Gramercy Park in June 2015

After 89 years on this planet, Len Fassler passed away on Friday.

Len was my Yoda. As a paternal figure, he was a close second to my father. I loved him deeply. And I will miss him every day.

We were introduced in the spring of 1993 by Jim Galvin, CEO of Allcom, which had just been acquired by Len’s company Sage Alerting Systems. Feld Technologies worked with Allcom whenever we needed a network installed for a client. At the time, the state-of-the-art was a wired 10BaseT ethernet network, so Allcom did the wiring, and we did everything else. After Jim’s company was acquired, Len asked him who else he should talk to in the Boston area. Jim introduced us, and that led to lunch near our office in downtown Boston.

Soon after, Len called me and asked if I’d be interested in selling Feld Technologies to Sage Alerting. It took a while for me and my partner Dave Jilk to decide to do it, but we closed the sale in November 1993.

Len and I ended up working together on many things over the past 27 years. I still have the Brooks Brothers striped shirt that Len and his partner Jerry Poch gave me when we signed the documents for Feld Technologies to be bought by Sage Alerting Systems (which changed its name to Sage Technologies and then changed it to AmeriData). When I started making angel investments in 1994, Len invested alongside me in many companies, including NetGenesis, Harmonix, and Oblong. We then co-founded Sage Networks (which changed its name to Interliant) with Raj Bhargava (NetGenesis co-founder) and Steve Maggs (whose company was also acquired by AmeriData.) At Mobius, we invested in Vytek, another company Len co-founded. As an angel, I personally invested in CoreBTS, the company Len co-founded after Vytek was acquired.

There’s an enormous amount of my business history packed in that paragraph. Rather than go through a bunch of things we did together, I want to list some memories that will stay with me until the end of my life.

Len loved to smoke a cigar. I’d never smoked, but for several years, while we were co-chairs of Interliant together, we had a tradition of going for a long walk at the end of the day when we were together. We both smoked a cigar during this walk and talked about whatever had happened during the day and anything unresolved. Len’s cigars were omnipresent – I still remember his Lexus’s smell, which was pleasant because the cigars smelled like Len.

Going for a walk was a foundation of our relationship. Whenever we were in the same office, I knew we had something to figure out if Len came by my desk and said, “Brad, let’s go for a walk.” When we weren’t together, the phone call was the equivalent of a metaphorical walk. He had a remarkable talent for bringing up issues directly yet clearly, and working through them quickly.

Everything I learned about buying a company, selling a company, or doing a deal came from Len. If you’ve ever worked with me in any deal capacity, I’m channeling Len. I learned how to be a board member from Len. I learned how to complete a negotiation, walk away from the table, be empathetic, and be available. He also taught me how to move on when something didn’t work out or go my way.

From 1996 to 2001, I spent a lot of time with Len in New York, where Interliant was headquartered. I stayed in an apartment near Lincoln Center that I shared with the CEO of another company Len was on the board of, or at Len’s house in Harrison, NY. I felt safe in that house, loved by Len and his wife, Bunny, tucked in and comfortable in the upstairs bedroom, and part of their family at the breakfast table in the kitchen. I’m pretty sure I could find my way without Google Maps from the Interliant office in Purchase to Len’s house as well as from Dewey Ballantine’s office in NYC to Len’s house. That house was full of love.

The photo above is from the day before Fitbit went public in June 2015. I had breakfast with Len at the Gramercy Park Hotel, where I was staying. I told him I had the morning off and asked him what he wanted to do. He said he’d never been in Gramercy Park since it was a private park, so we got the key to the park from the concierge and walked around it and talked for an hour. We then wandered around the Baruch College buildings talking some more. We ended that morning with a big hug like we started and ended all of our days together.

I remember clearly a phone call on 12/1/2000 where Len called me from NYC. He told me that Cable & Wireless wasn’t moving forward with the acquisition of Interliant – the deal was all but done. Rather than approving the deal, the C&W board decided to stop all M&A activity given they just found out they would have their first quarterly loss in many years. That night, Len joined about 50 friends at the Greenbriar Inn in Boulder for my surprise 35th birthday party, which Amy had arranged. He had a remarkable ability to take every setback in stride.

I remember his signature. I saw it for the first time on the back of a manila envelope where he jotted down the terms we had just agreed to for Sage Alerting Systems to acquire Feld Technologies. Under the terms, he signed his name. I remember signing document after document with him at Interliant and remember sitting at the Interliant office in Purchase after the IPO roadshow, waiting for the SEC to clear our filing so we could price. We were waiting for one document, after which we’d sign one more thing, and the bankers would price the offering, and we’d go public the next morning. When the fax machine printed ten pages (instead of two) that were additional comments on our SEC filing (that same one that Merrill Lynch had said three weeks earlier “we are good to go on the roadshow – the SEC always clears this on time”), we knew we weren’t pricing that night. Our order book collapsed two days later. We went public two months later, but there was a lot of Scotch drunk the night we got that fax from the SEC. I didn’t get to see Len’s signature next to mine that night.

I loved the way Len put his arm around me. I loved the hug he always gave me. I loved his relationship with his son David, who also became a good friend. I loved how we said “I love you” when we said goodbye in person or on the phone.

Len changed my life. He gave me my second favorite quote, “They Can’t Kill You And They Can’t Eat You” (my dad gave me my first favorite quote, If You Aren’t Standing On The Edge You Are Taking Up Too Much Space“)

My parents were good friends with Len. Every time I was together with all of them, I was exceedingly happy.

Dinner in 2018 with Len, my parents, and Amy at Taste in 1 Central Park Hotel

My long publishing relationship with Wiley began with a breakfast meeting that Len arranged with Matthew Kissner, who was a Wiley board member.

If you’ve ever heard me say, “Would you buy it for a dollar?” I learned that from Len. His influence on me formed the basis of my business philosophy, now called #GiveFirst. He was one of the first lawyer-turned-entrepreneurs I worked with, which helped me appreciate the importance of law in business and the importance of business judgment in the law.

The ultimate brilliance of Len was his ability to build deep emotional and enduring relationships. The number of people he influenced and who loved him is extraordinary.

The last time Len and I talked live was in October when he called me to say goodbye. Since then, his daughter Ellen has been my conduit to him, via emails that I’d been sending a few times each week. Ellen read them to Len and then sent me back a note with his response. Ellen, thank you.

On Friday morning, when I heard that Len passed, I immediately reached out to Frank Alfano, Jenny Lawton, Bruce Klein, Steve Maggs, Jerry Poch, Raj Bhargava, and Jerry Lebow. Some of them I talk to regularly. Others, like Bruce, I haven’t talked to in a while. But when Bruce and I got on the phone to talk about Len, it was like we were together the day before, working on something at Dewey Ballantine’s office, with Len at the other end of a long conference room table working on something else at the same time.

Len – I love you. I will miss you and think about you every day. Thank you for the sensational gift you gave me of your friendship. When it’s safe to travel to New York again, know that Frank, Bruce, Jenny, and I will be having dinner at Cellini’s together with a place set for you.