Category: Investments
Last Thursday, my good friends at Standing Cloud (we are investors) got a nice (and their first) write up in TechCrunch titled Standing Cloud Gives You One-Click App Installs Across Multiple Hosting Providers. I’m proud of the Standing Cloud team as they’ve resisted all the cloud hype and just stayed heads down and built out some really cool stuff that they are now rolling out. I tuned into the TechCrunch article and scanned the comments and lo and behold, Standing Cloud seemed to have a giant issue being called out – namely the font of their logo.
Who knew that Papyrus was so hated by TechCrunch readers? Who knew there was a Papyrus Watch website for font offenders? All I could think of was that the Standing Cloud font was better than the old Feld Technologies font, which was in Bauhaus.
I laughed for a while, then laughed some more at several good natured emails between me, Dave Jilk (the Standing Cloud CEO), my partner Jason, my partner Seth, and Todd Vernon (Lijit’s CEO who is on the Standing Cloud board.)
Then Dave turned himself into Papyrus Watch and posted a comment about it in the TechCrunch comment stream:
“I failed to heed prior warnings about this issue and we will now have to pay our debt to society. In response to your comment and others, I have voluntarily turned myself in to the authorities at PapyrusWatch (https://www.papyruswatch.com), and we are already making plans to update the logo to something attractive and sensible. I hope you favor rehabilitation over punishment and would be willing to try the service, or at least read the article, despite our aesthetic transgression.”
Papyrus Watch did their part with a post titled The Story of Standing Cloud. In it, Standing Cloud announced that they have put up the job of designing a new logo for Standing Cloud on 99designs for $395. Please, no Bauhaus.
In March I wrote about Standing Cloud‘s public launch of a free service to test drive open source applications. As reported today in TechCrunch, Standing Cloud has now launched it’s Business Edition, a service that enables users to also host applications on any of four cloud providers. As with the free edition, they have made it remarkably easy to get started: you register (including providing payment information), select your cloud provider and application, and go. Currently, the easiest setup is with Rackspace, where Standing Cloud can automatically assign a billing account to you; this easy setup is coming soon for GoGrid and Amazon EC2.
In the Business Edition launch, the Standing Cloud service provides fast and simple installation, automated regular and manual backups and simple application monitoring. Importantly, the backups can be restored to any cloud service, not just the one where you started. You can also easily reboot the application if it seems troubled, upload text files (including templates or other customizations), and if you are so inclined, access the server command line through a terminal window that operates within your browser. Through September 30, the only fees Standing Cloud is charging is for the server time and bandwidth usage; after that it will cost an additional $19.95/month for their service – which by then will include a number of additional features.
There are now more than fifty open source applications available in Standing Cloud – so they’ve organized them in a searchable list format. There is also no technical limitation requiring that the applications be open source, so if you are looking to promote or enable users to host your commercial application, send me an email and I’ll connect you with the right person at Standing Cloud.
When I arrived at my house in Homer, I hadn’t been here for two years. It took me one phone call to get Internet (DSL) working again (ACS had to reset my password) and within about 15 minutes everything was working just fine. Except I couldn’t print. I have an old HP 3330 with a JetDirect USB to Internet print server. The printer doesn’t have many miles on it – I’ve only used it for a total of about three cumulative months. It took me about thirty minutes to fight through all the nonsense of the Internet to figure out how to set it up as a print server for my new Mac (which I’ve never used with it before) and for Amy’s Windows 7 computer. It turns out that nothing really works except hard wiring its IP address into our printer setup. Um – yeah – that’s obvious – especially for someone who doesn’t know what an IP address is.
We had a Pogoplug board meeting at our office two weeks ago. For each company we invest in, we try to have a board meeting with all four Foundry Group partners attending at least once a year. This was our “group Pogoplug board meeting” (although I missed the best part – which is the dinner the night before – because I participated in Governors VC Roundtable at the Governors Mansion.)
At the board meeting, Daniel, Jeb, Brad, and Smitty (actually, mostly Jeb) showed off the new Pogoplug “print anywhere” function. They printed a document from an iPad to an Epson printer. Boom – paper came out of the printer. The Pogoplug had two things connected to it – the Epson printer (via a USB port) and our network (via a 10BaseT connection). The iPad was connected to the AT&T 3G network. Did I mention that they printed a document via the iPad? When was the last time you saw someone do that? Yeah, it could have been a web page via an iPhone also.
My immediate thought was how cool it would be to start printing porn on my partner Ryan’s printer connected via Pogoplug since he’d shared his Pogoplug-connected hard drive with me and would probably share his printer also. But then I undermined my evil plot by mentioning the idea. Oops.
If you already have a Pogoplug, this will be a simple free software update coming later this summer. If you don’t have a Pogoplug, seriously, why not? The thing is magic.
We recently invested in a Seattle company called BigDoor Media. The founder/CEO Keith Smith wrote a wonderful love story about the deal which was picked up by the WSJ VC Dispatch in a post titled A Summer Romance Between Founder And Venture Capitalist. Yes, I’ve fallen in love (in a very non-sexual way) with Keith, his co-founder Jeff Malek, and BigDoor.
Over the past year I’ve become increasingly obsessed with the idea that the computers are going to take over. I’ve even begun to think that we are already working for them. So – why not have fun while we are at it? By using a light weight API approach, BigDoor enables any non-game publisher to quickly integrate game mechanics such as points, badges, levels, leaderboards, virtual currency, and virtual goods into their web and mobile applications. They’ve already rolled out integrations with Cheezburger Networks and BuddyTV and have a pile of additional publishers launching in the next 90 days.
BigDoor straddles our Glue and Distribution themes. While Glue may be familiar to you, Distribution is a new theme that we’ll be talking about soon when we re-segment Glue into a couple of new themes to more clearly delineate what we’ve been investing in over the past two years.
I’ve already been spending plenty of time in Seattle due to Gist, Impinj, TechStars Seattle, and some other good friends that I have there. In fact, according to Daytum, I’ve spent 14 nights there in the past eighteen months. I expect I’ll be spending plenty more there soon, including a few next week on my way to Alaska.
If you are a web publisher, take a look at what BigDoor can do for you. And, while you are at it, check out Lijit if you haven’t already incorporated the slickest publisher search on the planet – now with an ad network and a fresh $6m – into your site.
I’m on an Acela train between Boston and New York (listening to Boston’s More Than A Feeling – how recursive) on my way to the TechStars Boston 2010 Investor / Demo day. I wasn’t able to make it to Boston yesterday for the Angel Boot Camp as I was running around NYC with the CEO of a company I invested in last week introducing him to a bunch of potential customers and partners.
It sounds like Angel Boot Camp rocked. My long time friend and co-angel investor Will Herman wrote a post titled Angel Investing that summarized some of his advice. Will is finishing up his 31st angel investment (we’ve done a bunch together – including my very first one – NetGenesis in 1994) and he walks through what he’s learned from 16 years of angel investing. Don Dodge also has a great post up titled How to be an Angel Investor…and make money.
On the eve of the graduation of the TechStars Boston 2010 class, I thought I’d weigh in with some additional advice to anyone who either is or wants to be an angel investor. Some of this repeats what Will and Don said, but I’ll try to be additive (and specific). For context, I’ve made over 75 direct angel investments primarily in two time periods – 1994-1996 and 2006-2007. I’m out of the angel business as all of my investments go through Foundry Group (the VC fund I’m a partner in) but I’m an investor in a number of “super angel funds” as well as a co-founder of TechStars and I continue to regularly make seed investments from Foundry Group alongside of angel investors.
So – here’s the advice:
1. Be promiscuous: To be a successful angel investor, you have to make a lot of investments. I generally made about one investment a month when I was active as an angel. While this pace may not be right for everyone, if you are doing less than four investments a year, I don’t think you are making enough. Play the field – it increases your chance of hitting a monster and it’s a lot more fun.
2. Have a long term financial strategy: Early on I decided that I was going to write the same size initial check in every angel investment. In the first phase (1994-1996) this was $25k. In the 2006-2007 phase this was $50k (although I broke this rule by occasionally doing $25k or $100k and in several cases, even more.) I always assumed I’d double down on each investment before the company either raised a VC round or was acquired (so – when I put $25k in, I was really allocating $50k to the company.) Then, I decided how much I was going to invest over a particular time period. In the 1994-1996 time period I decided to invest $1m in angel investments. So – that gave me capacity for 20 investments (I did more – oops.) In 2006-2007 I allocated more (and did more). However, since I had a time frame and an amount per company, I had a baseline pace that I could go at before I got uncomfortable with how much I was investing.
3. Understand the difference between 0x and 100x: I’ve had two of my angel investments return over 100x each. Since I had a strategy of investing the same amount in each company, all I needed was one 100x to allow me to have 99 companies completely flame out and return 0 and I’d still break even. With two investments at over 100x, I now have a built in gain of significantly over 3x across all of my investments since I’m made about 75 of them and I’m now deliciously “playing with house money” on all of the rest.
4. Choose people over ideas: I have never regretted making new friends through an angel investment that failed. I have always hated working with people I didn’t like, or didn’t think were A+. It’s an easy filter – use it.
5. Decide quickly: My best investments as an angel were made after one meeting and I’ve often committed in the meeting. Sometimes it has taken me longer – usually a second meeting or a long meal. But there’s no reason for an angel investor – especially an individual one – to drag the entrepreneur through a long, protracted due diligence process.
6. Don’t torture entrepreneurs: Remember, you are supposed to be an “angel investor”, not a “devil investor.” If you really want to be a great angel investor, decide quickly and then help the entrepreneur get their financing done! Be a force for good in the universe.
7. Run in a pack: The best angels run in packs. They share deals. They love to work together. They don’t feel obligated to invest in each others stuff, but they often do. And they communicate with each other. If you run in a pack, different people will take the lead role in different cases – sometimes I’d be the lead investor in an angel deal and – with a $25k check pull together a $500k round. Other times I’d just be one of the $25k checks in the $500k round and pawn off the work on one of my friends. Either way, I have a lot more fun playing with others – especially when the companies win!
I’m sure some of these don’t work for everyone so I’d love to hear any criticism from other angels out there. And – feel free to add your own tips, especially about – ahem – working with VCs.
Trada – one of our investments that is based in Boulder – is absolutely killing it. It was started by Niel Robertson, who we’ve worked with in various forms going back to the mid-1990’s. When Niel first came up with the idea, he and my partner Seth Levine spent a few months really going deep and figuring out how (PPC) pay per click marketing campaigns (e.g. Google AdWords) worked and whether a crowdsourcing approach could materially improve their performance. It turns out that it does – if you are doing any sort of PPC marketing you will see dramatic improvements by using Trada’s service. And – if you are a PPC expert, you can make extra bucks by being one of the optimizers for Trada’s service. But don’t take my word for it, hear it directly from Niel the scarf maker.
Recently, Trada announced that in addition to Google and Yahoo, they now support Bing. Rather than putting out a turgid press release, Niel and Seth made a second video in a series that continues the saga of Niel the scarf maker.
If your company does anything around PPC marketing, take a look at Trada. And – if you run into Seth on the street, ask him what he thinks of the Yankees.
Jon Pierce of BetaHouse has decided to organize an Angel Boot Camp in Boston on June 1st. The idea is that anyone interested in learning more about how to get started with angel investing can attend and learn from some people who’ve been there and done that.
David Cohen at TechStars wrote about why he thinks it’s important. Jon Pierce also wrote about why he’s doing Angel Boot Camp as well as listing some of Boston’s Best Angel Investors.
While June 1 is still several months away, sign up and put Angel Boot Camp on your calendar now.
How could you not fall in love with a company named AgileZen? Today, Rally Software – a company I’ve been an investor in since 2003 – announced that they have acquired AgileZen. If you are an Agile software development shop, or follow ALM, Rally just added Kanban to the mix.
This is the second acquisition Rally has made – the other was 6th Sense Analytics which they acquired at the beginning of 2009. If you follow this blog, you know that I’m a big fan of having established companies I’m an investor in buy smaller companies to help build out their product road map. I’m explicitly not a fan of rollups – I’ve had my share of investments in rollups that didn’t work. But I love targeted acquisitions that build out specific capabilities on an established company’s roadmap or add key people to the team. If you are looking for recent examples of this in my world, two others are NewsGator’s acquisition of Tomoye or Zynga’s acquisition of Serious Business.
Both companies have detailed blog posts about the deal – Welcome AgileZen! and We’ve joined Rally Software. If you are a company operating in one of our themes, don’t ever hesitate to reach out to me if you think you might fit with a company we’ve already invested in – you never know where the conversation might lead.
And congrats to both Rally and AgileZen – I’m excited for you guys.
My first company, Feld Technologies, didn’t have contracts. Instead, we had a one page PSA (professional services agreement) that spelled out in English that we charged $X per hour, would do our best, and our invoices were due upon receipt. We never had a single legal issue with a client, although we had a number of tense moments which we almost always solved successful by “doing our best.” There were a few cases where this wasn’t enough and our clients effectively fired us, but we always made it easy for them to walk away if they weren’t happy.
Since I started investing in 1994, I’ve been on the giving and receiving end of an endless number of contracts which often include SLA’s. I’ve seen every type of agreement you could imagine and at this point have become completely numb to the dance of a buyer and a seller of any type of product or service trying to get to a legal contract. As I’m sure many of you have experienced, the business terms are simple to work out, especially between rational people that want to work together. But once things get into “legal” or “procurement”, it’s a whole different issue.
The other day, I was on an email thread between Gnip and a new customer. Gnip recently launched v2.0 of their service and it rocks. They’ve held off on adding new customers for the past few months as they relaunched their service and are now starting to add new customers at a steady clip. In the email thread, they quickly agreed on pricing with the customer who then asked “what’s your SLA.” Eric Marcoullier, Gnip’s CEO, responded with the following:
Our SLA is fairly simple (and I’m happy to write it up for you in more official language):
- We can’t control data publishers’ availability, but if they’re up, we’ll get the data.
- Machines and clouds fail, even on EC2. If Amazon is up, we’ll get the data.
- The best way to guard against machine failure is duplicate hardware. We offer highly discounted backup boxes.
- You’ll always have my cell phone number — if our software breaks, you can call me 24/7 and I’ll get my team on it.
- If we aren’t living up to our end of the relationship, you can cancel the contract with no penalty.
The customer’s response was “You are class act! I wish all legal issues can be handled like this.”
Now, Gnip is young so Eric is in a position where he can still talk to any customer that wants to talk directly to him. However, as they grow, I expect this tone will exist throughout the business since it’s Eric’s style. Basically, keep it simple, be clear about what you will do, be available, and take responsibility for your service. I’m sure more formal contracts will find their way into the business but wouldn’t the world be a better place if more business was conducted this way?