Month: June 2021

Jun 14 2021

Summer Vacation

This blog has decided to take a summer vacation.

I’ve been blogging regularly since 2005 (typical 15 – 20 posts a month.) I’m going to take a break for a while.

Now that The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors is out, I’ve started working on my next book. I’m trying some different stuff with this new book and decided to focus all of my writing over the summer on it.

If you want a hint, I’m taking inspiration from two books. The first is one of my favorite books: Zen and the Art of Motorcycle Maintenance. The other is from Michael Lewis’ awesome new book The Premonition: A Pandemic Story

Whenever I’m writing a lot, I read a lot, so you can follow along with what I’m reading at Goodreads if you want.

In the meantime, enjoy the summer. I’ll be back in the fall.

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Jun 11 2021

Why Philosophy and Entrepreneurship?

Since releasing my newest book The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors I’ve been continually getting the questions “Why Philosophy and Entrepreneurship?” and “Why Nietzsche?”

Dave and I cover this right off the bat in the book, so I thought I’d toss up an excerpt that addresses the question with part of my own origin story with Dave. It follows.


Nietzsche? For entrepreneurs?

It was the end of January 1988, about nine months since we had embarked on turning Brad’s solo consulting shop, Feld Technologies, into a real business. We were fraternity brothers and close friends and opened our first office directly across the street from our fraternity chapter house in Cambridge. We planned to use smart yet inexpensive software developers to build business application software. We employed half a dozen programmers, most of whom were undergraduates from our fraternity working part-time. We didn’t have any financing except for Brad’s credit card and the $10 with which we had purchased our common stock.

Dave walked into Brad’s office after calculating preliminary financial results for January. Up to this point, we had mostly broken even, but the news was grim: we had lost $10,000 in one month. We had not seen it coming, and it took some effort for us to untangle what had gone wrong. Dave had been spending most of his time managing the part-time developers, who were primarily working on future products, instead of billing hours to clients. Brad had been selling computer equipment, which had low gross profit margins, instead of billing hours to clients. Much of our revenue for the month had come from one highly productive though erratic undergraduate developer, Mike, who was working on a billable client project.

Before we had a chance to figure out what to do, Mike quit, citing a need to focus on his studies. Now we had no choice: we fired everyone, shut down our month-to-month office, sold all the office furnishings, and moved the business to our apartments in downtown Boston. It was gut-wrenching. Brad wondered whether we had failed just as we got started. Dave worried about paying rent. We had long discussions about the future of the business, including whether or not to continue.

But we did have billable projects. We no longer had to spend our time managing people and had figured out where our bread was buttered. Results were good enough in February to calm our nerves and even better in March. Just as important, we had learned some crucial lessons and settled on a very different idea about how we would move forward with the business. The experience of hitting bottom and the lessons we learned became deeply ingrained in our brains and our company culture as we more methodically and progressively built the firm.

Fast-forward thirty years, when we were in the midst of writing this book, and Dave was reading Thus Spoke Zarathustra. He encountered a passage that said the highest mountains rise from the sea, and that fact is “inscribed…on the walls of their summits.” Because of our experience at Feld Technologies—and many times since—we knew immediately that this had to be a chapter in the book. We imagined the solace and instruction it might have offered us to have seen (and understood) this quote, to have read a short essay like the one in our chapter Hitting Bottom, where the starkness and promise of the situation are presented in black and white, or to have heard Walter Knapp’s story of the crash and rebirth of Sovrn, a genuinely disruptive company.

That is how we wrote most of the chapters and how this project began. In reading Nietzsche, we noticed ideas that reminded us of situations, questions, and concerns that frequently arose in our entrepreneurial and venture investment experience. Nietzsche had a way with words, and we found that some ideas were nicely encapsulated and phrased. We started playing with expanding upon his pithy aphorisms and gathering stories from entrepreneurs, and it clicked.

Feld Technologies never became a disruptive company, despite our ambitions. It plateaued at around $2 million in revenue before we sold it in 1993. Because we had built a solid foundation for a certain kind of success, we never again hit a deep low point, and consequently never again had the painful opportunity to rethink our premises. This point, too, is covered in Hitting Bottom and illustrates why we did not just skip Nietzsche, write some essays, and assemble some entrepreneur stories. Nietzsche—sitting or walking alone, in pain, almost blind—thought deeply and managed to share these thoughts with the world. We tried to follow his lead, thinking hard and pondering additional angles and situations to which the quote might apply. We want you to do the same, as you keep in mind that Nietzsche’s works have been highly influential throughout the 20th century and into the 21st.

In business and entrepreneurship literature, inspiration is sometimes more helpful than instruction. Though there is plenty of how-to information in this book, we aim to give you food for thought from a different perspective. We address issues of leadership, motivation, morals, creativity, culture, strategy, conflict, and knowledge. We push you to think about what you and your enterprise are made of. We expect you to question and ponder these ideas, not just put them into action. If we are successful, you will sometimes get angry and at other times feel pride. At times you will wonder what you really know, and at other times you will charge forward. We hope that the combination of Nietzsche’s colorful language, our elaborations, and some stories from entrepreneurs will offer you intellectual, emotional, and entrepreneurial inspiration.

Nietzsche was not a fan of commercial activity or businesspeople. He saw the former as crass and the latter as lacking nobility. However, we suspect that if Nietzsche were alive today, he would view entrepreneurs differently. He adored intensity and fervor, deeply valued those who create things, and wrote at length about “free spirits” who do not feel bound to tradition or cultural norms. Nietzsche viewed his mission as the “revaluation of all values,” and he intended to disrupt the entire moral tradition of Europe in the late 19th century.

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Jun 9 2021

Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams

Matt Blumberg has a new book out titled Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams. It’s a follow-up to his previous book, Startup CEO: A Field Guide to Scaling Up Your Business.

I’ve been working with Matt since 2000. That year, we merged two companies: Return Path and Veripost. Matt was the co-founder/CEO of Return Path. Fred Wilson was his lead investor. I was the lead investor for Veripost. The two companies did the same thing and were the only two competitors in a nascent category called “email change of address” (Veripost’s original name was IECOA which stood for “Internet Email Change of Address”). They were bashing each other over the head in a non-existent market as the Internet bubble began collapsing.

The founders of each company talked and, in between efforts to decimate the other, agreed it might be worth merging to survive. This guy named Greg Sands at a firm called Sutter Hill had met with both and was interested in the category and encouraged them to merge, at which point he’d fund the combined company. Fred called me and said, “Let’s figure out a deal.” I said, “They are both worthless right now – how about 50/50?” Fred responded with, “I have more money invested in Return Path than you do in Veripost – how about 55/45.” I answered, “Deal.” So for the deal, investors on both sides converted to common, we split the combined company 55/45, Matt became CEO, and Greg led a new Series A financing into the combined company. Twenty years later, we sold the business, a $100 million, profitable company, to Validity. Matt was still CEO. Fred, Greg, and I were still on the board.

Last year, Matt started a new company called Bolster. He co-founded it in partnership with High Alpha (we are LPs) and SVB. Soon thereafter, USV (Fred’s firm – we are LPs) and Costanoa (Greg’s firm – we are LPs) invested. It’s off to a great start. If you are looking to expand your leadership team or board, are looking for a part-time executive role or board role, or are an investor looking for fractional executives to join your portfolio companies, you should become part of the Bolster network right now.

I’ve worked with Matt for over 20 years and have experienced many ups and downs. His hard-won lessons from Return Path show up in Startup CEO: A Field Guide to Scaling Up Your Business.

For lessons from Matt and his Return Path management team, many of who are now execs at Bolster, you want to read Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams. When I saw the outline for Startup CXO, I grinned a wry smile. The book is 132 chapters broken into 11 sections. After the intro, the following sections are written by each exec.

  • Finance – Chief Financial Officer – Jack Sinclair
  • People – Chief People Officer – Cathy Hawley
  • Marketing – Chief Marketing Officer – Nick Badgett and Holly Ennerking
  • Sales – Chief Revenue Officer – Anita Absey
  • Business Development – Chief Business Development Officer – Ken Takahashi
  • Customers – Chief Customer Officer – George Bilbrey
  • Product – Chief Technology Officer and Chief Product Officer – Shawn Nussbaum
  • Privacy – Chief Privacy Officer – Dennis Dayman
  • Operations – Chief Operating Officer – Jack Sinclair

There’s a final part on The Future of Fractional Executive Work with a chapter by a different leader for each area above. Matt’s writing shows up regularly throughout, including an ending chapter for each section titled CEO-to-CEO Advice.

Each chapter is two to five pages long. It’s tons of information, organized well, in tight, bite-sized chunks. For example, here are the chapters in Part Five: Sales by Anita Absey (p. 247-302)

  • Ch 54: In the Beginning: From Prospect to Customer
  • Ch 55: Hiring the Right People
  • Ch 56: Profile of Successful Salespeople
  • Ch 57: Some Myth Busting
  • Ch 58: Compensating Sales Team Members
  • Ch 59: Pipeline
  • Ch 60: Scaling the Sales Organization
  • Ch 61: Scaling Your Team Through Culture
  • Ch 62: Scaling Sales Process and Methodologies
  • Ch 63: Scaling the Operating System
  • Ch 64: Marketing Alignment
  • Ch 65: Market Assessment and Alignment
  • Ch 66: Expanding Distribution Channels
  • Ch 67: Geographic Expansion
  • Ch 68: Pricing and Packaging
  • Ch 69: CEO-to-CEO Advice

The brilliance of this book is that everyone on your leadership team, including the CEO, should read it and then discuss it. Pick one section each week. At the end of a quarter, the entire team will have discussed all the functional roles, have a deeper understanding of expectations and responsibilities, use a common language for talking about what people are doing, and be able to adapt things to your own company. Also, if you aspire to be a CXO – you can figure out your career path by understanding the whole functioning of the relevant and adjacent departments.

I’m going to encourage every leadership team I work with to take this approach with Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams.

Matt and team, thanks for writing this!

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Jun 8 2021

Investment vs. Speculation

I reread Enough.: True Measures of Money, Business, and Life by John C. Bogle over the weekend. I’d read it in 2012 and it had a huge impact on me.

If you aren’t familiar with John C. Bogle, he founded The Vanguard Group, is credited with inventing the index fund and is a spectacular writer (every one of his books is worth reading.) He passed away in 2019 at the age of 89, but I expect his legacy will last a very long time.

I was pondering some things that were bothering me, specifically about crypto, but more generally about current themes around investing. I thought I’d revisit Enough. to see if it helped me work them out. I found my answer in Chapter 2: “Too Much Speculation, Not Enough Investment.”

Let’s start with Bogle’s definition of Investing and Speculating.

Investing is all about the long-term ownership of businesses. Business focuses on the gradual accumulation of intrinsic value, derived from the ability of our publicly owned corporations to produce the goods and services that our consumers and savers demand, to compete effectively, to thrive on entrepreneurship, and to capitalize on change. Business adds value to our society, and to the wealth of our investors.

Speculating is precisely the opposite. It is all about the short-term trading, not long-term holding, of financial instruments — pieces of paper, not businesses — largely focused on the belief that their prices, as distinct from their intrinsic value, will rise; indeed, an expectation that prices of the stocks that are selected will rise more than other stocks, as the expectations of other investors rise to match one’s own.

What was bothering me was simple: the narrative around many things has shifted to the far end of speculating. I don’t participate in this particular type of narrative, but I’m surrounded by it. I don’t behave as a speculator. While I invest in many things, I rarely sell anything until there is a “defined exit,” where I have a very explicit internal definition of “defined exit.”

As someone who has held private company stock in companies for longer than 20 years, been in many situations where there were no exit opportunities until suddenly there was an exit, I understand and am completely comfortable will illiquidity. And the idea of an investment.

I’m completely uninterested in speculating. In the mid-1990s, when I had a bunch of money after the sale of my first company, I bought and sold some public company stocks. I got sucked into giving some of my money to a money manager at Goldman Sachs and one at Lehman. They happily traded equities for me, which mostly just cost me fees in the end, although I covered it all with a crazy transaction into a weird Exchange Fund that GS created in 2000. I put a bunch of Exodus stock I’d gotten from the sale of a company into the fund. Exodus went bankrupt, so my contribution to the exchange fund was $0, but when the exchange fund paid out seven years later, I got 1.5x my investment. The only reason I got to play in the exchange fund was I had the GS account where they were trading stocks, and the guy I worked with offered up access to it. Totally random and completely dumb luck as I would have likely held the remaining Exodus stock I had all the way to $0. In hindsight, even writing this paragraph is more reinforcement to me of my ultimate lack of interest in this stuff.

As I watch crypto speculation expand into retail stock speculation, which then gets amplified broadly by zero-fee trading apps that aren’t really zero-fee and watch the SEC tangle itself up trying to figure out how to monitor Twitter and Reddit accounts of high profile people who clearly are playing age-old promotion games, regardless of whether or not there are actual pump and dump schemes behind their actions, I become extremely bored. This boredom has a layer of annoyance coating it, especially given the extraordinary 15 months of Covid we’ve just gone through.

Maybe as sports come back, some of this energy will shift back to sports. Now that proxy betting online has become essentially real cash betting online, even though the laws around this (at least in the US) haven’t really resolved, and everyone online has figured out how to get around all the rules, the speculating can become called “betting” again. Or maybe “betting” will just become speculating. It doesn’t really matter since they are fundamentally the same thing.

Let’s go back to Bogle. “Investing … adds value to our society, and to the wealth of our investors” and “Speculating is precisely the opposite.”

Ask yourself, “Is what I am doing adding value to our society?”

Enough has three sections: Money, Business, and Life. While I found the answer to what was bugging me in Chapter 2, the section on Life is awesome. The three chapters are:

  • Too Much Focus on Things, Not Enough Focus on Commitment
  • Too Many Twenty-First-Century Values, Not Enough Eighteenth-Century Values
  • Too Much “Success,” Not Enough Character

Bogle completely nails this topic without being preachy, annoying, arrogant, or directive. As writing goes, it’s as beautiful and powerful as it gets. I strongly recommend Enough.: True Measures of Money, Business, and Life, especially if you have enough but don’t realize it.

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Jun 7 2021

Twitter Spaces and Nietzsche

Last week I was scheduled to do a live interview with Eliot Peper about The Entrepreneur’s Weekly Nietzsche. He opted to use Twitter Spaces and diligently tested it out a couple of days beforehand to confirm that it would work. Nevertheless, we immediately ran into difficulties, and after ten minutes, we decided to bail on the interview and reschedule.

This reminded both me and Dave about our chapter in the book, “Play to the Audience.” Nietzsche says:

It is not sufficient to know how to play well; one must also know how to secure a good hearing. A violin in the hand of the greatest master gives only a little squeak when the place where it is heard is too large; the master may then be mistaken for any bungler.

Our translation to contemporary English is:

In other words: Performing well is not enough; the audience must experience the performance well. If the venue has bad acoustics, even a great violinist sounds terrible. A virtuoso can be mistaken for a novice.

Our essay in the book discusses the importance of a speaker having empathy for the audience, not just in terms of the content but also in the communication medium. For example, is the phone connection clear? If you have an accent, are you speaking slowly enough for your audience to understand? Ben Casnocha’s excellent narrative emphasizes audience engagement and interaction, which is crucial in our era of short attention spans.

This was one of the first chapters we wrote, so it was before the pandemic and the enormous shift toward videoconference and online interviews. In keeping with our view that Nietzsche’s observations are mostly independent of time and technology, it can be applied here.

For example, if you are communicating, selling, interviewing for a job, or promoting a message, you need to make sure you will be heard. Your own preferences for technology platforms can get in the way of a successful meeting if the customer prefers a different system or is not set up on it. If you are getting a message out, using the newest or trendiest technology may draw listeners, but they will not hear the message if the system doesn’t work. Make sure your lighting, Internet connection, and camera angle are appropriately professional. Don’t walk around with your phone while you are on a videoconference unless the call is explicitly casual. 

Feel free to disagree with these particulars, but think through your own version of “securing a good hearing.”

It turns out that Eliot and I are good friends, and I’m pretty patient with new technology, though those who tried to attend our interview may not have been. Eliot decided to try again, but with an upcoming interview posted on his website.

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Jun 2 2021

Colorado Startup Summer 2021 – Request for Companies

CU’s Silicon Flatirons Center Startup Summer is back!

Startup Summer provides a fantastic experience for college-age students and interns interested in entrepreneurship and the Front Range emerging company scene.

Startup Summer is a free offering that enhances your company’s internship program. Your company hires and pays your intern(s). You can hire an intern out of your own pool of candidates or, alternatively, let us know and we will get you student resumes from individuals who have reached out to us.

This program is free – there is no charge for companies or interns. Now in Year 10, Startup Summer is one of CU Boulder Silicon Flatirons’ most popular programs.

Startup Summer pulls college-age students together on Tuesday nights from 5:30 – 7:30 pm during the summer. Startup Summer students and interns get to (1) meet leaders in the Front Range emerging company community, and (2) build their own startups on the side. More info is available at our website Startup Summer page.

If your company is interested in Startup Summer, please reach out directly to Sara Schnittgrund (Sara.Schnittgrund@Colorado.EDU) and Brad Bernthal (Brad.Bernthal@colorado.edu) at Silicon Flatirons by Thursday, June 3.

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Jun 1 2021

No TV Summer

“Turn off the TV and go outside and play.”

I expect these are words that have been said in almost every household in America.

Amy and I hit the bottom of the TV barrel last week while watching Army of the Dead. It was so awful it was good. But it was awful.

And … It’s June 1 and I’m done for the summer. No TV until Labor Day weekend. And then, maybe no TV after that.

TV is a weird construct since I can watch videos on my laptop or my iPad. But, that’s a different thing, since they are generally short and a deliberate thing that I’m watching on video, vs. just vegging out in front of the TV watching whatever we found on Netflix, Amazon, Apple TV, or whatever we eventually found surfing around on DirecTV (last night’s movie was Drive.)

While I was totally fried this weekend from the cumulative working and running I had done the preceding few weeks, I would have been better off napping or reading during the movie time. And, while I know there is a new wave of stuff coming out this summer, I’m going to assume that Army of the Dead sets the tone so I’ll wait until the fall in case anything good makes it through and then watch it then.

For now, I’m spending my TV time running, reading, writing, or just enjoying being outside with Amy and Cooper.

Welcome to summertime.

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