Author: Brad Feld
We are in the middle of the budget planning process at many companies. This is a recurring Q4 event that spills over into Q1. Budgets for the next year (2020) get finalized between December 2019 and February 2020.
As I was daydreaming the other day during a budget discussion, I thought to myself “there has to be a better way.”
Since I started investing in private companies 25 years ago, I’ve been experiencing the same cycle over and over again.
The normal situation is end of year budget planning. Q1 performance on plan. Q2 performance slightly different from plan. Q3 and Q4 performance divergent from plan.
Occasionally companies completely miss their Q1 plan. I’ve always viewed the Q1 plan as a competency test – if you can’t make your Q1 plan, something fundamental is wrong with the business. Of course, when you blow your Q1 budget, the plan goes out the window and gets redone.
Occasionally companies far exceed their budget in Q1 or Q2 or find themselves on a positive trendline that has nothing to do with the original budget. Or, the opposite.
The budgets also have huge variability after financings, when suddenly the budget gets recast given the new money in the bank, or the constraints against hiring are removed and costs increase suddenly, even if this is only to “catch up” with the budget that was underhired to.
It’s all lagging indicators anyway when looking at performance to budget. By the time the November financials are reported, we are already deep into December, and that assumes there is a robust discussion around the monthly company performance.
Some companies are excellent at managing this process. Most are not.
I know of a few very companies, including one very large one (Koch Industries), that famously run without budgets. I’ve tried lots of small incremental things over the years, such as 1H, 2H budgets (running on a six-month budgeting process) and having an expense only budget that lags revenue by a quarter, but I’ve never really landed on something that (a) works, (b) is materially easier, and that (c) management accepts.
When you add up all the time spent on budgeting across all the organizations on the planet (including government), the human species wastes an enormous amount of time on a thing we don’t do very well.
There must be a better way.
My partners at Foundry Group have decided to bring the Helium Network to Boulder. We’ve ordered 50 hotspots and, with your help, will set up a LongFi network throughout Boulder.
If you are asking, “What’s Helium?” here’s a fun video to get you started along with a deeper explanation of the technology.
As an LP in USV, we are small indirect investors. But, as a way to engage with a particular blockchain-based application/technology that we think has meaningful real-world potential, we thought we’d help enable a network in Boulder and see how it works.
We are looking for about 40 locations throughout Boulder (not just downtown) to set up hotspots. All you have to do is connect the Helium hotspot to the Internet. We’ll handle the rest.
If this is interesting to you, please fill out the Boulder Helium Hotspot Application. We are only choosing 40 locations, and we are going to spread them out as best as we can, so if you aren’t chosen, and you still want to be part of this, you can always buy a Helium Hotspot directly.
It’s that time of year again where we like to shop at our portfolio companies.
We thought it would be fun to highlight some of our direct investments and partner funds’ portfolio companies this holiday season.
You can check out the full Foundry Group Gift Guide here.
If you want even more gift options, Techstars also has an awesome gift guide.
If you have an office in Denver, just five miles away from you is a food bank operating out of a warehouse month to month just so it can help anyone who comes through their doors.
Community Ministry of Southwest Denver has provided food, children’s clothing, school supplies, energy assistance, food boxes, and holiday gifts for young children for over fifty years. Nice.
But, the building and land that Community Ministry has leased for decades is up for sale.
To avoid losing their location, they are raising $800,000 which would cover the cost of the building, parking lot, closing costs, and some much-needed renovations.
They are a little over $600,000 on their way to $800,000 of their fundraising campaign. Every bit helps, so instead of buying a coffee at Starbucks (or your favorite coffee shop) today, consider making a donation to them. Any amount helps.
I love origin stories.
David Brown, Techstars CEO and co-founder, just updated his and published a new edition of No Vision All Drive. It’s the story of Pinpoint Technologies, his first company with David Cohen, one of the other co-founders of Techstars.
As an origin story, it’s a detailed autobiography of what David learned from the experience of his first company. In this edition, he’s added some linkages into Techstars, and how his learning around entrepreneurship and leadership has evolved since the experience of Pinpoint.
I’ve read the book three times (for each edition – the self-published 1st edition, the FG Press 2nd edition, and the Techstars Press 3rd edition) and I learned lots about David Brown – and David Cohen – each time. In addition to plenty of fun little anecdotes, my current experience with the David(s) nicely intertwined with what I was reading, as I was able to time travel back to them during their formative entrepreneurial experience.
No Vision All Drive is particularly fun for me since the time frame overlapped with my first company – Feld Technologies. There are great overlaps like incorporating with The Company Corporation (for $99), remembering the joy of Btrieve, struggling with Microsoft Access with significant simultaneous users and endlessly rebuilding the database (Rome was lost for a simple reindex), and working through the endless issues around growth for a self-funded business.
As a bonus, I finished Sweating Bullets: Notes about Inventing PowerPoint by Robert Gaskins. This was the origin story of PowerPoint and Forethought, the first acquisition Microsoft ever made. It’s long, but as Gaskins rolled through the Forethought history in the mid-1980s and then his time at Microsoft from 1987 – 1993, I was able to once again time travel back to Feld Technologies, which was an independent company from 1987 to 1993 (when we were acquired by Sage Alerting Systems, which became AmeriData Technologies.)
While I’m not inspired to write the Feld Technologies origin story at this point, it’s a lot of fun to remember it, against the backdrop of what others were doing at the time. And, I know David Brown a little bit better today than I did yesterday.
Simply begin again.
I turned 54 today. I’ve always marked the start of a new year on my birthday rather than January 1st. As part of my birthday tradition, I write myself a letter about my upcoming year. I started posting these publicly when I was 51 and they serve as a nice reminder of where I was at v52 (focusing on what I want to do ) and v53 (exploring what I want to be).
I established a daily meditation practice during v53 after many years of fake meditation and several years of reactional meditation. I used to believe that my running was equivalent to meditation, which I’ve since discovered was completely incorrect. During v48, I learned how to meditate, but ended up only doing it when I was stressed, anxious, or depressed. After 192 days in a row in v53, meditation is now a real daily practice, first thing in the morning, every morning.
For v54, I’ve decided to have no goals. Sure, I’ll do a lot of things. I expect that I’ll accomplish plenty and fail at some while declaring victory on others. However, I’m not going to focus on outcomes.
Instead, I’m embracing the moment. Every moment. Simply being in the moment. Being present with whomever I’m with or whatever I’m doing. But that’s not a goal. I know I’ll drift – regularly – just like my mind does when I meditate.
And that’s fine because I’ve learned that when my mind drifts during meditation, I acknowledge it and simply begin again by bringing my focus back to the breath.
As I embark on my mid-50s, my mantra is Simply Begin Again.
Ryan Holiday’s newest book, Stillness Is The Key, came out at the beginning of October. I ended up with two copies and thought I’d read it over the weekend after they showed up at my house. The weekend slipped by and I didn’t pick it up until mid-day on Thanksgiving.
It was pouring rain in San Diego all day so it was a perfect laying on the couch reading afternoon. I just finished and, once again, Ryan delivered with this book.
Ryan divided the book into three sections: Mind, Spirit, and Body. He has a thorough exploration, broken up into about a dozen chapters, for each category. As is his style, there are many detailed and powerful examples.
He leads with Seneca, a friend of all Stoics and a frequent visitor in Ryan’s writing. He tells a short story around apatheia, or upekkha, or aslama, or hishtavut, or samatvam, or euthymia, or hesychia, or ataraxia, or aequanimitas – a word that finally comes closer to translation into English.
That word is stillness. In the intro to the book, Ryan says,
“To be steady while the world spins around you. To act without frenzy. To hear only what needs to be heard. To possess quietude—exterior and interior—on command.
Buddhism. Stoicism. Epicureanism. Christianity. Hinduism. It’s all but impossible to find a philosophical school or religion that does not venerate this inner peace—this stillness—as the highest good and as the key to elite performance and a happy life.
And when basically all of the widom of the ancient world agrees on something, only a fool would decline to listen.“
I thought the chapters in each section were extremely well-titled and are listed below. Like reading a poem, slow yourself down and, instead of skimming the next three paragraphs, read them aloud.
Mind: The domain of the mind, Become present, Limit your inputs, Empty the mind, Slow down think deeply, Start journaling, Cultivate silence, Seek wisdom, Find confidence avoid ego, Let go.
Spirit: The domain of the soul, Choose virtue, Heal the inner child, Beware desire, Enough, Bathe in beauty, Accept a higher power, Enter relationships, Conquer your anger, All is one.
Body: The domain of the body, Say no, Take a walk, Build a routine, Get rid of your stuff, Seek solitude, Be a human being, Go to sleep, Find a hobby, Beware escapism, Act bravely.
If even one chapter in each section strikes a chord with you, I encourage you to grab a copy of Stillness Is The Key.
Ryan – thanks for adding another phenomenal book to my bookshelf.
My partner Lindel pointed me at the Lux Capital 2019 Annual Dinner Talk. I watched it the other day and thought it was one of the best examples of a VC think piece that I’ve seen in a long time.
Lux‘s premise is that technology evolves out of the infinite arms race between deception and its detection. It touches on many contemporary ideas about truth and lies and the use of data in the pursuit of outcomes based on humans’ perceptions of truth and lies.
You don’t need to go very deep to understand how, as humans, we are regularly and continuously manipulated by the way information is presented to us. This isn’t a new phenomenon. What is new is how rapidly technology is evolving both in ways we understand as well as ways we don’t comprehend.
The optimist views this as innovations that will improve our species. The pessimist contemplates that this is a path that will diminish us, subjugate us to machines, or possibly even eliminate us.
Are you an optimist or a pessimist?
Amy and I have been watching The Handmade’s Tale. Simultaneously, I’ve been listening to the book on Audible while running. Last night I said, “The Hulu adaptation of the book is really good.” And then we both grimaced, as we’ve each commented many times over the past week about how incredibly bleak the show is.
A different dystopia is coming to our TVs soon.
As we roll into the end of 2019, almost all of the new near term sci-fi I’m encountering (reading and watching) is dystopic. And many of the people around me have pessimistic views of the future.
Amy and I are fundamentally optimistic people. But I wonder whether it is easier to be optimistic if you’ve had a lot of good fortune.
My year begins again on December 1st (my birthday) rather than January 1st. I’ve been in my head a lot the past few weeks as I finish out my year. My v53 was complicated and had a lot of ups and downs. I have been re-evaluating some of my premises, based on the poem Old Maps No Longer Work by Joyce Rupp that Jerry Colonna pointed me to earlier this year.
I’m rebooting as v54 in a few days. With new, and hopefully improved, software.