Category: Entrepreneurship
I’m not a sports fan, but wow, this is good.
On Tuesday, David Cohen (Techstars co-founder/chair) and I did an AMA for Techstars founders about the SVB crisis. The team at Techstars turned it into a podcast for our Give First series.
The teaser from the podcast follows:
The fall of SVB will go down in history as one of those ‘where were you when …’ moments. For David Cohen, he was sitting at a sporting event when his phone began buzzing incessantly. For Brad Feld, he was couch shopping with his wife.
Feld is no stranger to crises and his instincts kicked in quickly.
“I shifted into problem-solving mode,” says Feld.
But then, almost as quickly, the government stepped in and money began flowing. Crisis averted. It was time to reflect.
Listen as Feld and Cohen share insight into what they saw in the VC and startup community, how communication made all the difference and how many came together to support each other.
They also tackle the looming question weighing heavy on founders’ minds: how will this affect the future of startups.
As for the couch? Tune in to find out.
GlueCon will occur for the thirteenth time, on May 24th-25th, in Broomfield, Colorado.
My Foundry partners and I helped Kim and Eric Norlin create Gluecon in 2009 because we saw the need for a developer-focused event to explore emerging technologies around the cloud and APIs.
The first year that GlueCon occurred, it seemed like nearly every session began with someone defining “what cloud computing is.” In the interim years, dozens of products and startups have launched or used GlueCon as one of the venues for their early premieres. Twilio, Docker, and Kubernetes all appeared on the GlueCon stage long before they were known by the wider tech community.
GlueCon has always prided itself on being a welcoming community that seeks quality interaction over being lost in a sea of people on an expo floor. We’ve long held GlueCon at the Omni Interlocken — a space that allows the attendees to come together in an informal fashion, making it easy to meet just about anyone you’d like to while at the event.
It’s always been fun to host a national tech conference in Boulder. In addition to bringing in plenty of people from around the country, we always get focused attendance from a bunch of tech leaders in Boulder and Denver.
Some of this year’s presenters include:
- KellyAnn Fitzpatrick and Kate Holterhoff from Redmonk
- Adrian Cockcroft, ex-Cloud Architect (Netflix) and VP (AWS)
- Dormain Drewitz, VP, PagerDuty
- Alex Williams (interviewing an industry leader) from The NewStack
Topics cover everything from Observability to WebAssembly to Generative AI for developers to Microservice architecture. You can view the full agenda here.
We hope that we’ll see you at this year’s GlueCon. Use “feld15” to grab 15% off of your registration.
For those of you older than 40, it sort of felt like 2000.
If you are younger than 40, a massive tech bubble just burst. I expect you know that. For the past six months, many VCs have been podcasting, tweeting, publicly writing, … and generally prognosticating about what you should do and what’s going to happen next.
I think the best VCs didn’t prognosticate. They knew what was going to happen next. Instead, they worked with each company to help them deal with reality as it unfolded. Each company is different, and the dynamics of the bubble bursting were not generic.
For example, one of the companies I’m on the board of grew by over 30% last year. Its revenue grew by 30%+. Its gross margin grew by 30%+. Its EBITDA grew by 30%+. Its FCF, before debt service, grew by 30%+.
Another company had a revenue decline of 25%. However, their GM% increased, and their GM$ stayed roughly the same as the prior year. Their EBITDA loss decreased by 50%, and FCF was close to $0 in Q422.
I have 14 other stories from the companies in our portfolio that I’m responsible for. My partners have another 50+. Each one is different. Each one took a ton of work from the leadership team. Many of these teams took on a set of intense challenges as early as Q122 when it was clear that whatever was unfolding was not what they had just finished planning at the end of 2021 when they came up with their 2022 plans.
Almost all of the prognosticating I heard in 2022 was similar to what I heard and often said in 2000. I was 35 at the time and rationalized continually that things would magically and suddenly change for the better. I was wrong, and then 9/11 happened, and then Enron and Worldcom happened, and business kept getting worse. 2001 was a dreadful year for me. 2002 sucked, but it wasn’t as dreadful. But it still sucked. 2003 was hard. 2004 was the beginning of what I now refer to as “the grind,” which ended for me around 2007.
Nothing is going to magically and suddenly change for the better. No one is going to raise a $100 billion VC fund and start spraying money around at fantastical valuations, followed by everyone else suspending disbelief and believing companies, regardless of their businesses, are worth 50x next year’s revenue. No one will value a company with a GM% of 10% at the same as a company with a GM% of 80% just because they are growing revenue at the same rate. Boxes full of magic beans are going to result in jail time. Interest rates aren’t suddenly going back to 0%.
If you are a fan of Harry Potter, think of 2022 as the sorting ceremony. When you put the 2022 hat on your head, did you end up in Gryffindor, Hufflepuff, Ravenclaw, or Slytherin? Did you address reality early in 2022? Are you just now addressing reality? Are you considering what reality might be and hoping it doesn’t happen? Or are you looking around saying, “Huh, what?”
Whatever it is, there’s no looking back and hoping something different happens.
The 2nd Edition of my book Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors launched today.
My co-authors, Matt Blumberg, the CEO of Bolster, and Mahendra Ramsinghani, were a joy to work with.
While the 1st Edition was a good book, I wasn’t particularly proud of it because I didn’t feel like it was my best writing. We worked hard on this edition, and I now feel like it’s equivalent in quality to my other books.
Effective boards are critical at this moment in the entrepreneurial ecosystem. While I hope this downturn is short, I think it will be long and painful. In either case, highly functioning boards can help startups navigate this moment, while dysfunctional and weak boards can accelerate the demise of startups.
If you have a board of directors, want to have a well functioning one, are a director, or want to be a director, I encourage you to grab a copy of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors.
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.
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.
I was talking to a friend yesterday and he said, “Just another Monday.” But yesterday was Tuesday. I asked him what he meant. He said, “Every day feels like a Monday – I just get up and do it again.”
It has been 427 days since I mark the start, for me, of the Covid crisis (March 11th – the first day I stayed home.) As the world, at least in some places, loosens up a lot, people are anxious to get back together in physical form. I see it everywhere around me – dinners, meetings, people in Zoom in offices, background noises, air travel, and endless requests to get together in person.
Fred wrote an interesting post titled In-Person vs On-Screen that starts out:
Last week I spent three hours with my six partners in a conference room talking through what we are investing in and why. It was a terrific session and I had more “ahas” in those three hours than I have had in many many months. There really is no substitute for sitting together with your colleagues working things out face to face.
The post describes his thinking around remote, hybrid, and in-person. He talks about his, and his partners, current dynamics. He ends with a strong assertion.
Each company needs to figure this out in a way that works for their team and culture and I believe that there is no “right way” for everyone. But I also believe that in-person interactions remain critical to making better decisions, better products, better cultures, and better companies and so I would encourage everyone, including the fully remote teams, to figure out how to make in-person interactions happen on some regular cadence.
I see this in my own partnership. Several of my partners are regularly getting together in person. While I’m supportive of that, I have no interest in it and would rather continue to be fully remote for now. Fortunately, they understand. We are working on understanding and implementing our own hybrid dynamics that work for each of us and the team as a whole.
While we are privileged to be in a business and an industry where this is something we can explore, I immediately think of Susan Cain’s essential book Quiet: The Power of Introverts in a World That Can’t Stop Talking. When I read it in 2012, a few puzzle pieces slid into place for me.
I strongly agree with Fred’s statement:
Each company needs to figure this out in a way that works for their team and culture and I believe that there is no “right way” for everyone.
Since the beginning of the year, I’ve been in numerous “back to the office” conversations. I’ve participated in public discussions about remote vs. hybrid vs. in-office. I’ve talked with almost every CEO and board that I work with about this topic.
I’ve been asserting, like Fred, that this is a custom answer for each company. However, I’m adding a twist. I encourage the CEOs not to let their personal bias drive the answer. For some CEOs, that’s intolerable. For others, it has been enlightening.
I know several CEOs who are desperate to get back to the office. They hate working at home. They struggle not traveling around and being with their team. They are miserable with remote work. So, regardless of what anyone on their team says or wants, they will not have a remote work option. And, in one case that I’m aware of, there is not going to be any semblance of a hybrid option.
I know several CEOs who have let their leases end or sublet their offices. They love working at home. They have no interest in going to the airport. They deeply embrace remote work. No matter what, they are going to be a remote-first company in the future. And, in more than one case, there is no plan ever to rent any office space again.
When you suspend your individual bias, I expect you’ll find interesting and unexpected answers from different people in your company. When you ask them for approaches, you might find some that you hadn’t thought of. Knowing that there is a wide spectrum of desires among your current team, especially after 427 days of Mondays, is an important starting point for figuring out the best configuration for your company going forward.
Over the past year, we’ve seen an increase of people from across the business and political spectrum join the fight against climate change and pledge to support a greener, more sustainable future. Investors are seeking both financial returns and environmental impact and looking for opportunities to partner with ventures that are working to tackle our world’s biggest energy and environmental challenges.
Enter Cleantech Open, the world’s largest and oldest cleantech accelerator for cleantech, climate tech, and sustainability startups. Through Cleantech Open, startups can build their entrepreneurship skills and professional networks, access expert mentorship, and connect with potential investors, partners, and customers. Cleantech Open is currently accepting applications for its 2021 cohort, and you can learn more and apply here by April 18.
Beth Zonis, the Director of Cleantech Open Northeast, and my wife Amy Batchelor met through a mutual connection. They are both Wellesley College alumnae (Amy is a Trustee of Wellesley College, and Beth is Vice President of her graduating class.) They hit it off right away and found a lot of common ground, especially in their shared passions for Wellesley, the environment, and innovation. This led to our foundation (the Anchor Point Foundation) partnering with Cleantech Open Northeast, the northeast region of Cleantech Open, managed by NECEC as the on-the-ground affiliate.
Cleantech Open is like a mini MBA for startups. Its mission is well aligned with ours, as Cleantech Open is focused on combating climate change, growing the green economy, and improving Environmental Justice through innovation and entrepreneurship. We are staunch advocates for the environment, and we believe that innovation is critical to addressing many of the world’s challenges.
Cleantech Open has a particular focus on incorporating diversity, equity, and inclusion (DEI) values into its program. It is working to increase the diversity of startups, mentors, and partners engaged with the program. In 2020, 63% of the startups in the Cleantech Open Northeast cohort were founded by women or BIPOC leaders. This year, the accelerator plans to offer programming to educate startups on incorporating DEI values into their ventures.
Cleantech Open Northeast is also creating new curriculum content for this year’s cohort to enable startups to measure their greenhouse gas emissions and carbon footprint to help them build a measurement mindset from the beginning. This is an effort in collaboration with NYSERDA, the New York State Energy Research and Development Authority.
Over the years, many Cleantech Open alumni have progressed to be accepted into other accelerator programs, including Techstars. A few examples of recent Techstars alumni who have participated in both programs are Virimodo, Sunthetics, and SparkCharge.
Virimodo is reducing greenhouse gas emissions in cities by making it simple for buildings to become carbon neutral. Virimodo was a 2018 Cleantech Open Northeast Winner and a Cleantech Open National Finalist and participated in the 2020 Techstars EnergyTech accelerator in Birmingham, Alabama.
Sunthetics is developing software in tandem with electrochemical equipment for more sustainable and efficient chemical manufacturing. Sunthetics was a top 10 team in the 2020 Cleantech Open Northeast accelerator and a participant in the Techstars Heritage Group Accelerator for hard tech.
SparkCharge is making the world’s first mobile and intelligent on-demand EV charging network with a portable, ultrafast charging unit for electric vehicles. SparkCharge participated in the 2016 Cleantech Open Northeast accelerator and Techstars Boston in 2018 and recently had a chance to pitch on Shark Tank, where the company signed a $1 million agreement with Mark Cuban and Lori Greiner.
Cleantech Open is a nonprofit accelerator that takes no equity in its participating startups. This year, Cleantech Open Northeast will award $50,000 in cash prizes, including $10,000 for a carbon sequestration startup that completes the accelerator, and more than $300,000 in goods and services, including incubator and co-working spaces, consulting services ranging from marketing and communications to accounting to assistance on special projects, software packages for startups, and even financial assistance for startups participating in certain states.
To learn more, register for a Cleantech Open kickoff event between now and the April 18 application deadline. These are great opportunities to meet the Cleantech Open team, entrepreneurs, and mentors. Startups will have a chance to pitch!
Cleantech Open Kickoff Webinar 11, April 13 @ 7:00 PM Eastern, Register here
Cleantech Open Kickoff Webinar 12, April 16 @ 12:00 PM Eastern, Register here