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We had our Foundry Group annual meeting yesterday. I enjoy our annual meetings – we get to spent a focused chunk of time with our investors. We have a straightforward meeting – a dinner for our advisory board the night before, drinks after for all LPs, our advisory board meeting first thing in the morning, and then the full meeting until lunch time. There’s no crazy party, no big events – just substance on our part and direct interactions with the investors supporting us. Our goal is simple – provide a clear update about what is going on in our funds, talk about what we are thinking about, and get direct feedback from our investors.
We spend the day before the meeting as a team putting the final touches on our presentation and reflecting on the previous year. We always talk about our key principles that we established when we started Foundry Group in 2007. One of these key principles is a “thematic investing approach.” An important part of our themes is that they are continuously evolving (if interested, we publish details on how we are currently thinking about themes on our Foundry Group website.) Our LPs understand this well and always like to hear how we are currently thinking about themes at our meeting.
On Tuesday, we realized that we have made several investments yesterday that have a concept in common – that of raving fans. I first thought of raving fans when I read Ken Blanchard’s book by the same name in 1993 when I was CEO of Feld Technologies (my first company). The message rang true for me then and still does today. The tl;dr version is “Your customers are only satisfied because their expectations are so low and because no one else is doing better. Just having satisfied customers isn’t good enough anymore. If you really want a booming business, you have to create Raving Fans.”
Our investment in Sympoz (owners of Craftsy) is an example of a company built on raving fans. Craftsy is a community of people who love to make things – knitters, quilters, sewers, jewelers. If you know a knitter (I do – Amy is a fanatical knitter as is my mom Cecelia) you know that knitters are “raving fans of knitting.” We invested in Sympoz in our Distribution theme, but it has this special characteristic around its community that felt a little different to us.
We classify our investment in SideTour as “Other”. We say that we aren’t slaves to our themes – we’ll occasionally do something outside of a theme if we love the entrepreneurs and have a special connection to them. In the case of SideTour, they were one of our favorite companies in their TechStars New York class and we were infatuated with the types of experiences they were talking about providing in their marketplace. As we were talking about Sympoz (which is doing extraordinarily well) and SideTour, we realized that the “raving fans” concept applies to each of them.
I had a call yesterday with another entrepreneur running a company that we passed on the seed round. We all like the entrepreneur a lot, but the company didn’t feel like it fit in any of our themes and was too vertically oriented for us. The company is doing great and as we were talking about it a week or so ago we said “it feels a little like Sympoz, but has some characteristics of SideTour.” Yesterday, when I was talking to the entrepreneur, I realized it also was about a community of raving fans.
I love raving fans as the phrase for this theme since it sets an incredibly high bar of the dynamics of the people in the community these companies appeal to. These aren’t “vertical social networks” or “vertical exchange marketplaces” – there is something deeper going on in the relationship between the people and the company, and the people and community. And it’s something that is magically enabled by the current state of technology – mobile, video, real-time social – a bunch of things have come together than make this work.
Look for more on raving fans from us as it evolves. For now, you have a little bit of a window into how we think about themes.
Update – My partner Seth reminded me that our investment in CrowdTap (in our Adhesive theme) is all about helping brands interact with their raving fans, Todd Sawicki said “dude – how about Cheezburger” (in our Distribution theme) and Jeff Malek, the co-founder of BigDoor (in our Glue theme) said “ahem!” So it seems like we’ve got a lot companies involved in the construct of raving fans!
I am so psyched about the launch of Sphero. I’ve got mine (one of the first 10 made) and the line is gearing up to start shipping them out soon. Today I saw some of the new things getting cooked up to add on to the product and they are super amazing fun.
Today Sphero was awarded one of Popsci Best of What’s New 2011. They are joined by our friends at Sifteo who also won one of Popsci’s Best of What’s New Award.
Sphero Specs and Sphero Apps are now announced.
Order yours now.
Public Service Announcement For Entrepreneurs: Ignore the Dow
Today is Finance Friday and post #2 has been drafted by the Finance Friday team from University of Chicago Booth and is waiting for my edits. I’m procrastinating so I thought I’d write one of my periodic public service announcement for entrepreneurs. This one is more specific than “ignore the macro economy” – instead, it’s “ignore the Dow and the stock market and get back to work on your business.”
Tom Evslin had a post up this morning titled Don’t Watch The Dow! that caused me to say “right on.” In 1999, 2000, and 2001 I had a my.yahoo.com page up with a bunch of stocks, including a number of companies I was an investor in, as my home page. I’d hit refresh 5,321 times a day, generating plenty of CPM-based revenue for Yahoo. I’ve written about the emotional ups and downs in the past so I won’t repeat myself here other than to say this activity had zero impact on the stock market (I couldn’t do anything about it), it didn’t change my short term decision making (I’m not a trader), and all it resulted in was sucking a huge amount of emotional energy out of me.
When the market went down, I felt sad. When it went up I got the emotional equivalent of a sugar high. When it went back down again, I was bummed. Up – smile. Down – depressed. Up – happy. Down – cranky. And this was all before lunch time. Maybe it was too much coffee or not enough sleep, but it got even worse when the market shifted from 1/8s too 0.01s.
As an entrepreneur, this was all noise. As a long term VC investor, it was also all noise. Sure – the broad cycles had impact, although lots of people disagree on what they actually mean (e.g. do VCs actually benefit long term from down cycles, are the best companies started in recessions when everything is cheaper and more available).
Over time, I’ve learned that none of the short term moves in the stock market matter at all in my life. It’s occasionally entertaining to turn on CNBC and see my friend Paul Kedrosky in the octobox telling all the other people that they don’t actually understand macro-economics, but it’s no different than watching McEnroe when he’s announcing a Nadal – Federer match. It’s just sport.
So – for all the entrepreneurs in my world, take Tom’s great advice. Don’t Watch The Dow! And if you think Scott Kirsner is being sarcastic in his post titled How the players in the innovation economy rationalize away stock market dives, take a deep breath and consider whether the use of the word rationalize is correct or not.
Now, get back to work on something you can have an impact on!
Today on Brad Feld’s Amazing Deals I’m bringing you another offer from the online academy Udemy.com. A few months ago, Udemy was responsible for one of my most popular deals to date, a suite of deals relating to startups. Today they are offering your choice of two courses for $75 (normally $250). Pick either Learn to Develop an iPhone or iPad application in 4 weeks or Learn Python the Hard Way. Both courses include multiple videos, lectures, and code examples.
If you were one of the 100+ people that bought the last Udemy deal, I’d love to hear your feedback on the course.
Last summer, my long time friend Martin Babinec and his colleague Nasir Ali asked me if I’d come spend a few days in Upstate New York talking about TechStars and entrepreneurial communities. I first met Martin around 1990 at one of the very first Birthing of Giants events and we were both early YEO members together. At the time, Martin had recently started a company called Trinet which today is a large and successful PEO. We’ve been friends for 20 years so it was easy for me to say yes to spend two days with Martin in Upstate New York and help him further his mission of expanding the entrepreneurial communities throughout the region.
Martin’s organization, Upstate Venture Connect, is hosting me on February 2nd and 3rd in Ithaca, Rochester, and Syracuse. The full agenda is on the website and the public events include:
2/2/11: 4:30p – 5:30p: Sage Hall Room B9, Cornell University, Ithaca, NY
2/2/11: 6:00p – 8:30p: UVANY Capital Forum, Ithaca Country Club, 189 Pleasant Grove Road, Ithaca
2/3/11: 11:30a – 1:30p: Somewhere in Rochester (TBD, hopefully by 2/3/11!)
2/3/11: 3:00p – 4:30p: Rochester Institute of Technology, Rochester
If you are interested in getting together, go check out the agenda which lists who to contact and how to register for the various events. If you bring a copy of Do More Faster, I’ll happily sign it. And yes, I realize that it is very cold in Upstate New York in February. Hopefully we’ll generate some entrepreneurial heat together.
David Cohen and I will be hanging out at the Boulder Book Store from 1pm to 5pm on Thursday 11/4/10. Come see us, buy a copy of Do More Faster (and we’ll sign it), and ask us any questions you want. It’ll be a chaotic version of my Community Hours – instead of having 15 minute slots I’ll just talk to whomever shows up.
If you are based in Boulder, come support your local community bookstore and have some fun with us.
I periodically write the first column for PE Hub. Dan Primack, who is now writing a great column at Fortune called Term Sheet used to do this; there are now guest writers (including me) who do this column. Yesterday, I wrote a column about the book that David Cohen and I just wrote called Do More Faster. Enjoy!
Writing a book is hard. Really hard. Much harder than I thought. So I’m extra satisfied that “Do More Faster: TechStars Lessons to Accelerate Your Startup” is finished.
Ive been helping create software and Internet companies for over 25 years, starting with my first company, Feld Technologies, in 1985 when I was in college. By 1987 I had a partner, a mentor (my father) and a company that was capitalized with $10. (Yes, 10 dollars.) We bootstrapped the business because we had to and by 1993, when we sold the company to a large public company, we’d built a nice, consistently profitable business.
Since then, Ive been involved with creating and funding hundreds of companies both as an angel investor and a VC (now at Foundry Group). Four years ago I co-founded TechStars with David Cohen (CEO of TechStars) to help first-time entrepreneurs create new software and Internet companies while simultaneously working to energize the Boulder, Colo., entrepreneurial community, which was vibrant but small. Boulder’s population is just 100,000.
Over the past four years, my partners at Foundry Group and I have spent a lot of time talking about, thinking about, and studying how software and Internet companies get started. We’ve done this through our seed investments as well as through our activity at TechStars, starting in Boulder, then expanding to Boston, Seattle and New York.
A year ago, David and I decided to try to put our thoughts down in a book. Ive been blogging–along with my partners–for a number of years. So it seemed logical to organize some of our thoughts into a book. One weekend about a year ago, David and I holed up at my house in Keystone and sketched out the first draft of what became “Do More Faster.”
We decided to write a book by entrepreneurs for entrepreneurs. Rather than preach, we gathered first-person accounts from the entrepreneurs who have gone through the TechStars program and their mentors. It is primarily made up of 80 short chapters (two to three pages each) and organized by seven themes: idea and vision; people; execution; product; fund-raising; legal and structure; and work/life balance. David and I then wrote a bunch of connective tissue between each chapter to create a cohesive narrative.
The title of the book comes from a common phrase heard around TechStars. Startups have an important advantage over larger companies when they use the philosophy of doing more faster. By trying more things in a short period of time, they can adopt their product better to the market and their customers. It’s also related to the idea that TechStars is a three-month program and doing more faster is a survival skill for both the program and for early stage entrepreneurs.
“Do More Faster” is also the title of one of the chapters, while the other 79 take as their titles other one-liners from TechStars, such as “Trust Me, Your Idea Is Worthless,” “Usage Is Like Oxygen For Ideas,” “Hire People Better Than You,” “Be Tiny Until You Shouldn’t Be,” and “Seed Investors Care About Three Things.” Each of the chapters stands alone and includes a first-person account from me, David, a TechStars entrepreneur or mentor. While we originally envisioned that “Do More Faster” would target first-time entrepreneurs, now that it’s finished we are hopeful that it is valuable for any entrepreneur, investor, and early employee of a startup.
When I reflect on the process of writing this book, I realized that I accomplished several goals at the same time that are all related to my lifetime commitment to continually learn, with a specific focus on entrepreneurship. At the most obvious level, I learned what it took to write a book and become a published author. But the process of writing the book gave me a lot of time to reflect on what it takes to create a new company, the attributes of a successful entrepreneur and how entrepreneurial communities work.
Most importantly, it exposed me to the deep thoughts of over 70 other entrepreneurs and mentors who contributed to both TechStars and the book. Hundreds of companies later, I’m still learning all the time from other entrepreneurs, especially those doing it for the first time. I hope you will also.
One of the events on our Do More Faster book tour will be something we are calling Angels in the Architecture. Mike Platt from Cooley (one of our book tour sponsors) came up with the idea of doing an hour long session with a panel of entrepreneurs, angel investors, and VCs discussing the dynamics between angels and VCs. Having been all three, I find this a particularly important topic and it’s something we spend a lot of time discussing at TechStars in the third month as the teams gear up for their financings.
We originally had these as closed events, but we ended up with some additional space and decided to open them up. While the west coast ones are short notice (e.g. Tuesday in Palo Alto, Wednesday in LA, and Friday in Seattle) if you are interested I hope you can make it. The Eventbrite signups are below:
Palo Alto: Tuesday 10/12/10 – 5pm – 6pm: Angels in the Architecture
Los Angeles: Thursday 10/14/10 – 4pm – 5pm: Angels in the Architecture
Seattle: Friday 10/15/10 – 4pm – 5pm: Angels in the Architecture
I hope to see you there!
Looking For A Startup Job in Boulder – Come to TechStars Smackdown
Want to work for a startup?
Have you ever wanted to work for a web startup, but aren’t sure where to look or how it might be different from a big company gig? Come check out the TechStars Smackdown event on October 12th in Boulder.
It’s not a typical job fair. The event starts with a panel of entrepreneurs that will answer questions about what it means to work for a startup – common questions such as salary levels, equity versus salary compensation, work/life balance, and job security. Then 12 Boulder companies (Vacation Rental Partner, ScriptPad, Rezora, SendGrid, Omniar, StatsMix, Spot Influence, Graphic.ly, Snapabug, Next Big Sound, Orbotix, BlipSnips, and Gnip) will each get 5 minutes to sell you on why working for their startup will be a great career move.
The event ends with networking so you can meet the founders of these companies in person.
It’s free and open to the public, but requires a reservation. Check it out – you might be the key employee that helps propel that company to stardom.