We’ve just made a modest investment in Slice of Lime. We’re excited – but Kevin Menzie, Jeff Rodanski, and their team are “extremely excited.”
Before you say “hey Brad – why are you making an investment in a small, local, web design and development firm”, stay with me for a second. Put your Warren Buffett “I invest in great people that I like in businesses I understand that can make money over a long period of time’” hat on, and try to remember a little about my past.
I first met Kevin when he was working for Return Path. At some point, he went to part time (Return Path didn’t need a full time person in Kevin’s role) and he worked out a deal with Matt Blumberg (Return Path’s CEO) to start Slice of Lime with Return Path as his first client. As part of this, we introduced Kevin to a few of our portfolio companies and he was off to the races.
He reminded me a lot of myself when I was starting my first company (Feld Technologies.) Hungry, smart, willing to do anything to satisfy a client, unusually responsive, and a complete sponge for new information. I loved his style and we were (or at least I’d like to think we were) continually helpful – for no reason other than we thought Kevin did great work. Over time, I got to know Kevin’s partner Jeff – who also is a stud – and my respect and enthusiasm for them grew.
Over time, they did a lot of work for companies I have invested in, including Return Path, NewsGator, and Collective Intellect. They also did work for some of the other organizations I’ve been involved in, including the Boulder Museum of Contemporary Art, the Women’s Wilderness Institute, and Blink Gallery. They did a bunch of work for me also, including the Feld Thoughts and AsktheVC sites.
Thanks for staying with me. If you know me, you know why we made this investment. Kevin and Jeff have been running a nice, small, cash flow positive business. They have been in the good position of having too much demand for their services. They also have built some great frameworks that allow them to do stuff very economically. Over the last year we’ve spent some time with them giving them advice on how they could expand their business.
One of the biggest stresses of trying to grow a small professional services business is to hire slightly ahead of demand. If you do this too fast, you’ll run out of money. If you do this too slowly, you’ll choke on the work and go through a classic feast and famine dynamic (too much business one month, not enough the next.) If you are capitalized the way Feld Technologies was (e.g. with ten dollars), there is no buffer.
We decided to provide a little bit of buffer for Slice of Lime. While we would never force any of our portfolio companies to work with them, we obviously endorse them and recommend them highly. And – as a number of other people did with me early in my first business – I hope when Kevin and Jeff look back 20 years from now they view us as key mentors for them.
One of my favorite CTO’s (Tim Wolters – CTO / co-founder of Collective Intellect) is on the road fundraising and has some posts out on the process and terms he’s starting to see as they move from foreplay to term sheet. Me and VC is a great quick rant on feedback (“why would you even meet if you knew geography would be an issue?”, Term Sheet Terms: On Good Terms is a setup (hopefully) for some additional posts on Term Sheet terms, and Travails of Travel is a priceless post channeling whatever anyone who has been on the road recently has been feeling (including yet another example of the business value of a Slingbox.)
Since I’ve been working with and investing in Internet-related companies, I’ve always been fascinated with what creates a community. Most of my investing activity has been around the infrastructure side of this problem – most notably companies that create the Internet substrate for creating, engaging, and managing community. Occassionally I’ll venture into a company that is trying to do something with an actual community.
Recently, my head has been in this in two dimensions. I’ve got a couple of “substrate” investments, including Me.dium and Lijit. They started in different places but addressed a similar problem. As they have evolved, they are diverging even more, but helping me really understand two sides of a very complicated issue.
The stimuli for thinking about both of these came from my realization – mostly through playing with MyBlogLog and talking to Fred Wilson – that I already had an actively engaged community on Feld Thoughts (yes – that would be you.) My playing around with coordinating the FeedBurner VC Network helped me understand the dynamic even better. But these were all self-referential communities – ones that were oriented around “Planet Brad” (I like to describe my own little world – the one that I’m at the center of – as Planet Brad – to distinguish it from the real universe), rather than ones that I joined because of affinity.
I’ve had a couple of investments around actual communities, including Judy’s Book, Enthusiast Group, and Dogster. I’ve learned different things from each of these, but the most from Dogster about how a high affinity community actually grows. When I first heard of Dogster, my reaction was probably the same as most investors (“social networks for dogs? That’ll be a dog.”) Wrong. Ted and his gang get it and are masters of Planet Dog (and Planet Cat). They’ve got a great quick presentation up that they did at CommunityNext titled Community Is Your Most Valuable Asset that is worth a look if you care about any of this stuff.
If you don’t, just remember that for those of us with mild dyslexia (or compulsions), we occassionally confuse dogs and gods, which occassionally turns into a really religious experience.
If you go to Feld Thoughts, you’ll see a little widget on the right hand side that looks like the following:
This is my “badge” for the FeedBurner Venture Capital network. This a network of all of the Venture Capital bloggers that I could find – I’m the coordinator so if you are a VC blogger and not part of the network, drop me an email. There are now 62 VC bloggers in the network with a daily subscriber reach of over 150,000 people (if you are an advertiser and want to target this audience, my friends at FeedBurner will be happy to help.)
This morning, I noticed a new shiny box in the widget that says “search this network.” That’s the integration of Lijit and FeedBurner which allows you to search across the entire network of VC bloggers. Type “term sheet” in “search this network” and hit go to see how it works. Or try “Apple DRM”. Or maybe “Google Youtube” (or ”Sequoia Envy”). Or even “Suck” (a favorite word of several VC bloggers – ostensibly linked to one of my favorite mottos – “We Suck Less.”)
Vertical search across venture capital blogs. Automagically brought to a computer near you by Lijit and FeedBurner.
One of my core strategies as a VC has always been to aggressively facilitate conversations between the entrepreneurs that I work with. Over the last 13 years, this has paid off in numerous ways, endless times. A while ago I realized that, in addition to being a lot of fun (usually for all involved), it was a way for me to learn an incredible amount by just watching where the entrepreneurs took the conversations.
I’ve always been fascinated by “CTO’s talking.” Whenever two or more CTO’s are in the room, I want to be part of the conversation. Some of that may have come from my pre-VC life, but I think it’s because there is rarely any gloss on the thought processes as my CTO friends dig deep into whatever topic they are discussing.
It’s even more fun when the CTO turned CEO hangs out with his CTO and talks with another CTO (did you follow that)? Todd Vernon and Tim Wolters two great, experienced CTO’s in Boulder. Todd is now CEO of Lijit (after being the CTO and co-founder of Raindance) and partners with the founder / CTO – Stan James. Tim is the co-founder / CTO of Collective Intellect (after being the co-founder / CTO of Dante Group which webMethods acquired in 2003). Yesterday, Todd, Tim, and Stan spent some time together and “the long tail of vertical search” popped out. Lots of people have been working on “vertical search” – but not many (as far as I can tell) are really focused on the second order effects of vertical search, which is where I think the real money is. Yeah – that’s an abstract statement – but that’s the fun of it.
Todd and Stan’s business (Lijit) is banging away trying to figure this out, as is Tim’s business (Collective Intellect). I’m an investor in both of them and am fascinated and delighted with the evolution of their ideas and products. The are working on fundamentally hard stuff – both conceptually and functionally – and when they deliver it in a way my dad will understand and use it – they’ll be on to something really big.
My friends at the Enthusiast Group are about to launch a new series of sites over the next two months to add to their growing network of enthusiast web sites. YourCycling launched today and is edited by Enthusiast-in-Chief Whitey Debroux, a Boulder, Colorado-based professional road and cyclocross racer who is riding for Team Einstein this season.
YourCycling joins YourRunning (check out my running blog – 50×50 if you care about such things – especially if you want to be amused by my challenges of maintaining any sort of base while traveling non-stop), YourClimbing (for rock climbers), and YourMTB (for mountain bikers.)
If you are into any of these sports, come join the fun.
My friends Alan Shimel and Mitchell Ashley from StillSecure are at the annual RSA security show (“the” show for the security industry) and are reporting and podcasting from the front lines. In addition, Alan has a great rant about booth babes which the feminist in me wholeheartedly agrees with. If you are into security or anti-booth babes, check the posts out.
I was trying to come up with a clever title for the superb week that Me.dium had, but I lamed out. Me.dium had their public launch this week at Demo (although they are still in a controlled user rollout as one of the extremely hard challenges in what they are trying to do is to infinitely scale the service.) Kimbal Musk – the CEO – gave a great demo at Demo.
I was neutral to positive that Demo would be the best place to launch. I was wrong – it turned out to be spectacular. The initial feedback has been great:
As I was writing this post and surfing around to collect the sites, one of my Me.dium friends (brandonh) opened a chat window within Me.dium with the following.
All those other links are here on del.icio.us.
Me.dium is one of those special companies that gets better every week. I committed to participating in the financing in the first meeting I had with them and have never regretted it. They’ve assembled an incredible team and have just blown away all my expectations in terms of what they have built so far. It’s still really early – the stuff in development is incredible (hint: look for something fun on my blog soon.) Me.dium was one of the hottest Boulder companies to get funded in 2006 – it’s living up to its billing.
If you want to join and see what it’s about, you can get an invite via my link code. You need to be using Firefox (the IE plugin will be out next month) and remember that the invites are still being rationed out to make sure they handle scaling effectively.
Wallstrip continues to crack me up – almost daily. I’m a small investor in the angel round and Howard and Lindsey are just a riot. Jack in a Box was roll on the floor funny but today Lindsey was trying to interview a random who turned out to be Dylan Ratigan (CNBC’s anchor) – for The Super Bowl Indicator episode – that paid her a compliment. Lindsey didn’t recognize Ratigan (don’t worry Lindsey – I didn’t either) – and her reaction is hysterical.