I love origin stories. Some of them glorify entrepreneurship in a way that makes them challenging to parse, as the struggles of our heroines and heroes gets romanticized in a way that tastes sugary sweet. But, when they are written in first person, unedited, on a blog, they are often delicious in a tasty and fulfilling way.
Jud Valeski, the co-founder of Gnip, wrote a great one a few days ago. It’s titled How Did Gnip Get The Twitter Deal? and does a thorough job of telling the story from Jud’s perspective. If that’s all that was there, it’d be a solid origin story.
But then Doug Williams, who was on the Twitter side of the Gnip / Twitter origin story, weighs in with a comment that is the same length as Jud’s post. And now we get Doug’s view. Not the official Twitter view. Not the C7H5NO3S version that has been denuded of anything challenging and controversial.
The combination is delicious and worth reading. I lived it as an investor and only have two categories of things to add. The first is that the most important role of the investor in deals like this is to talk your team (in this case Jud and Rob) off the cliff. Or, more likely, to take the flamethrower out of their hands before they started spraying it on everyone in sheer frustration. The other is a few well timed phone calls to key people (in this case, Dick Costolo, who totally saw the value of the relationship but at the time was trying to navigate whatever the current version of Twitter dynamics were.)
The end of Jud’s post has two extremely important points in it. The first to play by the rules of your partner.
“This conflict between your product and the publisher, is real, and it can make or break you. On one hand, you want revenue, and if you break/bend the rules, you can get more of it. However, doing so puts you at odds with the publisher (arguably your bread and butter). Take your pick. We chose to play by the rules and were able to navigate to a successful partnership and outcome. We firmly believed that breaking/bending the rules would yield an incrementally small amount of revenue, and never actually let the business get as big as it could. Think about it this way, black markets exist, and always will, but they’re never as big as the open market. Pursue the open market, sure, it’s harder, but the rewards are bigger. If the only way you have a business is by breaking rules, stop what you’re doing and go do something else; that’s ultimately lame; explain that one to your kids.”
The other is what we called “Be Everywhere That Twitter Is.”
“We spent years cultivating relationships inside Twitter (from the CEO, which changed a few times during our efforts), to mid-level, to developers, to BD, to on and on and on). When we were at a conference and there was a Twitter person there, we elbowed our way to them to get a word in. When Twitter put on conferences, we were there. When Twitter wouldn’t answer the phone because we were that annoying gnat in the swarm, we backed off the calls until we had something significant to put in front of them (a new feature, a new business milestone). Partnership negotiation is a fine line between expressing your need for the other partnership, and illustrating your ability to be independent.“
And Doug, in his conclusion, reinforces the value of that approach.
“I’ll leave you with this final anecdote. While in the midst of the start of our initial term sheet negotiations with GNIP, my team was moved under a new executive. After bringing him up to speed, he told me he didn’t like the strategy and called it off. That day, he and I were to meet with Jud and push things forward. I had to break this news to Jud that the exec had pulled the plug and wouldn’t be at the meeting. It’s difficult to say who was more heartbroken at this point. In his patient and persistent way, Jud keep calling. He kept asking questions. He kept showing up at the office. We kept working on the term sheet and he motivated me to go to bat again. Again, we eventually got the nod. Luck, timing and patience paid off, but more than all kept Jud showing up. That is the ultimate lesson he taught me, one that I carry with me every day.”
There’s a lot of healthy and tasty juice in this origin story. Jud / Doug – thanks for putting it out there.
This morning, Mapbox announced a $52.55 million Series B financing. We’ve been on a wonderful ride with them ever since we led their first financing – a $10 million round – in October 2013.
Let’s start with the simple stuff. My partners and I have a massive founder crush on Eric Gundersen, the CEO of Mapbox. My partner Ryan McIntyre was introduced to Eric by another CEO we’ve backed, Zack Rosen of Pantheon. I remember Ryan raving about Eric and pushing me to squeeze in a meeting before I had to run out of town one day.
Zack is also a total star who I connected with immediately so his referral carried a lot of weight. I first met Eric in the summer of 2013 on a trip he took to Boulder to buy imagery from a satellite company in the area. I remember feeling super rushed at the end of the day and wasn’t in the mindset to sit through a presentation. Eric clued on in this immediately, or maybe Ryan warned him, so rather than drag me through slides Eric just started showing me stuff that Mapbox did.
He started with an algorithm that made clouds go away. He then launched into a custom map design tool which Foursquare had just used to switch out Google Maps. By this point my jaw was on the floor. Words kept tumbling out of Eric’s mouth and amazing maps kept appearing on our large conference room monitor. I looked over at Ryan and he gave me that “yup – I wasn’t kidding – this is fucking awesome, isn’t it” look that we share between ourselves when we see something beautiful, incredibly hard to do, presented by an entrepreneur who is completely and totally obsessed by what he is doing.
I knew Gnip was doing some Twitter data visualizations with Mapbox, so I asked Jud Valeski, the technical co-founder of Gnip, to see what he thought. Jud responded with something akin to “Mapbox is amazing.”
Even better, Eric and team had been at it for several years bootstrapping development and had just decided to raise their first outside capital. They had done this amazing amount of stuff with no investment. No hype. No bullshit. Just crazy deep tech abilities.
In 2013, the mapping space was in yet another wave of turmoil. Waze had been snatched up by Google for over a billion dollars just a few months earlier, further consolidating a space dominated by a few giants. Those giants were investing billions a year in maps. And we were still getting over our fresh scars that confirmed how hard the geo technology was after our failed investment in SimpleGeo (acquired by Urban Airship). Mobius, our prior firm, had been a long time investor in deCarta (now owned by Uber) and had been mostly recapped out of the investment after years of struggle. So mapping didn’t feel natural to us.
But in 15 minutes of watching and listening to Eric, I realized something Ryan already knew. Mapbox is an API company, not a mapping company. The map simply was the output of the API. And, like the best API companies we’ve been involved in, such as Gnip (now part of Twitter), it was right at the intersection of our Glue theme and our Protocol theme.
Seth and Jason had similar reactions. So we invested. Since then Eric and team have built an incredible company that is the foundational building block for any developer, large and small, who wants to include mapping in their product. In case there is any question about scale, MapQuest, which still has 40 million active users, confirmed it was switching all of their maps to Mapbox.
Eric and gang – we are buckled up and ready for the next part of the ride!
Behind the stories of most first-time venture-backed CEOs building startups and attacking markets at breakneck speed, there is usually a tight network of mentors and peers showing them the ropes of company building. That’s certainly been my experience at Pantheon—we likely would not exist if not for the crucial help of James Lindenbaum, Adam Gross, Steve Anderson, Ryan McIntyre, Brad Feld, and all of the advisors who have assisted us on our journey.
However, I’ve found there is a hard limit to how much you can learn about building a company from speaking with advisors. Before deciding on how to go about building your company, it is critical to build an understanding of other companies’ paths to success and learning from their mistakes along the way. I’ve found to really do that, often times you need to be there—out of your own office and physically present in theirs—to see with your own eyes how a company actually works.
That is the goal of CEO shadowing: to put you in the shoes of another CEO, let you observe, ask questions, and form a rich and detailed mental model of how another company operates. I’ve done it twice so far, and both times have learned more in a day of shadowing than I do in months of working sessions with mentors and peers.
My first time CEO Shadowing: Jud at Gnip in 2012
The first CEO I shadowed was Jud, who then ran Gnip which has since been acquired by Twitter. Foundry Group is a mutual investor of ours, and Jud and I met at an event in Boulder that they organized for portfolio CEOs.
In Boulder I ran around asking a number of CEOs and Foundry Partners for company management advice—how to run one-on-ones, structure executive meetings, manage my board, etc. Three times in row an answer to my question was prefaced by:
“You should really ask Jud this question because they just did this at Gnip and did a fabulous job.”
We were a 20-person company at the time, and Gnip had hit its stride and was growing very quickly. They were 50, soon to be 100—about a year and a half ahead of us in terms of scale. Gnip was known for being a very well-run company.
I cornered Jud at the event and soaked up as much data from him as I could. Then I went home, and realized how much more I really needed to learn from him and Gnip. The only way I thought I could really get answers to my questions was to go to Gnip and observe how Jud and his team ran the company.
So I sent this email:
“Can I fly to Boulder and shadow you for a day, and be a fly on the wall in yours and your team’s meetings?”
This was his response a couple of hours later:
“Fun! You bet! Only question is timing. Thoughts?”
Jud invited me to attend his management meetings and let me interview anyone on his entire team at will. In one day on-site I was a part of his exec kick-off meeting, attended a company product strategy meeting, and interviewed two executives, two engineers, and individuals from their sales and marketing team. I took notes, asked questions, and tried to fit in. I approached it like a journalist whose goal it was to write a profile on how Gnip, the company, worked.
I found the Gnip team to be incredibly focused and busy—while still gracious, helpful, and happy to talk at the same time.
What I learned
At the time I shadowed Jud, Pantheon had a very early executive team and not much in terms of process or structure. We operated on tribal knowledge and had the benefit that everyone implicitly knew what the others were doing. We knew we needed to build our team and create more structure, but how were we going to do that without screwing up what was working so naturally?
What I learned at Gnip was:
1) It was absolutely possible to build a 100-person company that operated as efficiently, or even more efficiently, than our 20-person company.
2) Process and structure could be additive to company culture, because it forces you to get specific about implicit assumptions that are so important to a company’s future (values, strategy, management philosophy, etc.)
3) There is good management and bad management, and you need effective leadership and stiff penalties when you fail to lead. It was up to us to build the company right. Gnip was built right, and it worked.
On top of that, I learned many, many small tactical things—from how to structure the agenda of an executive meeting, to how to arrange teams and desks, to optimizing how the people worked together.
But the tactics were built on the big learnings, which were important for this reason: seeing how Gnip worked gave me confidence to trust my gut in building my company. To be clear, Pantheon is built very differently from Gnip. Many of the things that worked for them won’t work for us—we picked our own path. But there are so many internal obstacles to building structure in a startup as it undergoes massive change, and to know that it could work because I saw it work enabled to me to keep my head down and keep working towards my goal without getting blown off course.
Visiting Gnip in 2012 was like visiting the hopeful, successful, parallel future to Pantheon. It was like getting to travel to a foreign, and more advanced planet, and then getting to return and apply what I learned.
Want to do this? Here are my suggestions for how to get the most out of CEO shadowing:
- Find a CEO at a company that is approximately 1-2 years ahead of yours (if you are $1M ARR, then $5-10M; if you are $10M, then $30-$60M). Ideally this is a CEO you admire, and one you already have a relationship with.
- Confidentiality is incredibly important. You should probably sign an NDA.
- Book a full day in the office with the CEO. I highly recommend visiting the day the CEO does the most “management” in a workweek—when executive meetings, planning, strategy, etc are scheduled.
- Get yourself invited to everything. Everywhere the CEO goes, you go. This requires the CEO to warn their company ahead of time and get the OK of their execs and team members.
- Spend half of your time observing in meetings, and half in one-on-ones with their team.
- Meet one-on-one with execs, managers, and individual contributors, ideally from numerous different teams.
- Ahead of time, prepare a list of questions with the CEO that you can ask of their team members, or research topics you can report back on that CEO wants to know (while respecting anonymity). Example questions:
- “What do the values of this company?”
- “What are the company priorities? Your team’s priorities? Your priorities?”
- “What did this company get right that has enabled it to succeed?”
- Take copious notes during all meetings and interactions. Anonymize feedback and send a full report of what you learned back to the CEO (this can be partial repayment for letting you shadow them).
- Keep asking questions and observing until you feel like you could give a valuable five-minute presentation on “how the company works” to your team and the CEO you are shadowing.
Asking to shadow a CEO of a company is a big ask. It’s out of the norm, and it takes time from their team. You can repay some of that by offering to share useful observation or doing outside research as part of your time there, but at the end of the day this may be the ultimate “pay it forward” generous act the startup community is willing to take on for fellow CEOs.
Investors: I believe this could be one of the most valuable things you could help facilitate for your portfolio company CEOs. If anyone else has shadowed a CEO, I’d love to hear how you approached it and how well it worked for you.
Foundry Group has now been around for over seven years and I’ve been working with my partners for 14 years. We’ve started to develop some traditions.
One of my favorites is exit gifts. When a company has an exit that generates a return for us, we give a gift to the partner who served on the board. These gifts are generally tuned to what the partner loves such as musical stuff for Ryan and Jason, bike stuff for Seth, and art for me. They are modest, but very thoughtful and something the partner wouldn’t have just gone out and done for himself. They are often self referential, such as the Makerbot sculpture of me created by an artist and printed on a Makerbot after Stratasys acquired MakerBot.
A few weeks ago Seth, Jason, and Ryan corralled me in our small conference room. Whenever they do this, I’m never sure if it’s going to be a happy thing or an intervention. Ryan was holding the following 2′ x 3′ framed print.
To get a better sense of this masterpiece, let’s zoom in on the G and the N.
This is a list of every tweet I made at @bfeld from the day of our investment in Gnip to the day that Twitter acquired Gnip. This first one is from 2/29/08.
The last batch is from 4/14.
Ryan told me that Gnip was used to generate the tweet list for the poster. And Postertext was used to print it. Thanks guys – this one made me smile a huge smile. I love this tradition.
A couple of weeks ago, I wrote about an event a bunch of us in the Boulder startup community are putting together called #BoulderWin, a celebration for the sale of Gnip to Twitter. Instead of having a secretive closing dinner for a small number of folks, we are going to have a big party to welcome Twitter to town.
#BoulderWin is happening on June 4th from 7pm – 10pm at the Boulder Theater.
You must register to attend and tickets cost $20 per person. All of the proceeds are going to Entrepreneurs Foundation of Colorado. There are a limited number of tickets available and it’s first come first served.
In addition to the proceeds from the sales of the tickets, I’ll be matching the $4,000 with a personal gift of $4,000 from me and my wife Amy Batchelor to the Entrepreneurs Foundation of Colorado. And, my partners at Foundry Group are sponsoring the event, along with a bunch of other local companies including:
These companies represent a big part of what makes Boulder such a great place for entrepreneurs. Thanks for everything you do!
Once again, you can get your tickets here.
Whenever a company gets acquired or goes public, there is often a fancy closing dinner. It’s usually at a nice restaurant in a private room. The wine is expensive and the toasts are many. The people in the room are the founders of the company, the executives, the board members, other major investors, the lawyers who worked on the deal, and the investment bankers – if any were involved.
I’ve been to more of these than I can remember. They were fun at first, but now they feel strange to me. The group celebrating is often a very small subset of the people who were involved in helping the company reach its success. I can have a exotic, over the top dinner with friends anytime I want, so it often feels like a burden to me to do yet another fancy dinner. If I’ve been deeply involved in a company, I always look around the room and notice at least one key person missing. Enough time has passed that the celebration seems a little stale.
As Boulder Startup Week kicks off today, I woke up thinking about how many people lead, and contribute to, the Boulder Startup Community. This magic of this place is not top down control, a singular leader, or a grand plan. Instead, it’s the organic beauty of a messy network of people, all who are contributing their own talents and energy, in an ongoing, continuous effort around entrepreneurship.
Kind of like how Twitter grows and evolves. Twitter’s acquisition of Gnip is a big deal for Boulder as it brings one of the most interesting and creative companies in the world to our town as Gnip will serve as the foundation for the first Twitter office in Colorado. This is a #BoulderWin.
So, instead of having a closed, inward facing closing dinner for Twitter’s acquisition of Gnip, a bunch of us in the Boulder tech community are throwing a celebration on the evening of June 4 at the Boulder Theater to welcome Twitter to town. We’ll have food, drinks, entertainment, and lots of mingling with folks in the Boulder Startup Community.
Tickets will be available for purchase the week of May 19 with proceeds going to Entrepreneurs Foundation of Colorado. And, as Gnip was a member of the Entrepreneurs Foundation of Colorado, there will be a special gift that night.
Come celebrate with me the hard work of the 90 people who helped make Gnip a reality.
FSA (Feld Service Announcement) – my version of a “public service announcement”: Moz is on the hunt for a VP of UX and Design. This role is one of our most crucial hires this year. The ideal candidate will come to us with experience and examples to show of very complex, technical projects that s/he made simple and fun. I would love for you to share this job description with your network or if you have anyone in mind I would love for you to send them our way.
Yeah, it’s been kind of busy the last week. Congrats to my friends at Gnip on becoming part of the Twitter flock. I have a great origin story about the founding of Gnip and the first few years for some point in the future. But for now, I’m just going to say to everyone involved “y’all are awesome.”
Last week Manu Kumar had a spectacular post titled The New Venture Landscape. While it’s bay area centric, I especially agree with the punch line:
Pre-Seed is the new Seed. (~$500K used for building team and initial product/prototype)
Seed is the new Series A. (~$2M used get for building product, establishing product-market fit and early revenue)
Series A is the new Series B. (~6M-$15M used to scale customer acquisition and revenue)
Series B is the new Series C.
Series C/D is the new Mezzanine
Today at 5pm I’m doing a fireside chat with Eliot Peper, the author of Uncommon Stock, the first book published by FG Press. Join us for some virtual fun and a discussion about fiction, books, and startups.
And – if you miss that, Eliot is doing another event on Friday at 5pm at Spark Boulder.
I’ve written before about hiring for cultural fit, and about the importance of prioritizing cultural fit over competence when hiring at startups. I started thinking about it again when I saw this Dilbert comic, because it pokes fun at the culture of startups and their propensity only to hire people who fit into them. But what are we talking about when we talk about cultural fit, anyway?
You’re probably familiar with some of the stereotypes around startup culture (free massages and dry cleaning, craft beer, cool art on the walls and dogs at the office, pulling all-nighters to ship on time) and the kinds of people who work at startups (according to Dilbert, “self-conscious hipster” types with “an earring and headphones.”) Stereotypes like these give you a picture of what startup culture might look like to an outsider, but they don’t reflect the intrinsic values that define startup cultures.
Gnip CEO Chris Moody explains this distinction really well when he talks about values vs. vibe. He defines values as “the guiding principles or code-of-conduct” that inform a company’s daily operations, whereas vibe is “the emotional side of the company … highly influenced by outside factors.” To figure out whether an aspect of your startup culture is a value, he says, try asking yourself these questions:
– Is this aspect of the company important to our long-term success?
– Does this aspect need to be maintained forever and is it sustainable?
– Does this aspect apply to all areas of the company and to all employees?
– Will establishing this aspect help us make important decisions in the future?
So, for example: riding your fixi to the office or playing foosball between coding sessions are vibes. Treating people with respect or being passionate about your work? Those are values.
Your company values should be clear, accessible, and pervasive – take, for example, Zappos’ 10 core values. Having clearly defined values is important because they drive your company culture, not the other way around. It’s also important when you’re hiring for cultural fit, because without clear company values you run the risk of making poor hiring decisions: hiring people because they look or act or talk like you, and not hiring people because they don’t.
Here’s an example: Businessweek says hiring managers are now asking candidates questions like, What’s your favorite movie? Or, What’s the last book you read for fun? If you’re asking interview questions like these at your startup, you need to make sure you’re screening for values and not for vibe. Just sharing your love of The Big Lebowski doesn’t make someone a good cultural fit for your company: in fact, it’s often the people who give unexpected answers who end up being your company’s most creative problem-solvers.
I chair the board of directors for the National Center for Women & IT (NCWIT), whose Entrepreneurial Alliance works with startups to help them recruit and retain more women in tech roles. There’s strong ROI for including more women on technical teams: women improve collective intelligence, make startups more capital-efficient, and bring the perspectives of half the population. But if you’re a “dude brew” startup, you may not even know why you don’t hire more technical women, and you might need help from NCWIT removing gender bias from its portfolio companies’ job ads.
Gnip recently told NCWIT that they added three women to its engineering team. They credited this in part because the VP of Engineering, Greg Greenstreet, attended every local women-in-tech networking event, recruited on campus, and talked to as many female candidates as possible. But fundamentally they succeeded in hiring more women because, like Etsy, they made diversity a value. Gnip assigned strategy, money, and resources to their recruiting efforts, and factored diversity into evaluations of cultural fit.
Every startup is going to have a company culture, by design or by default, so you might as well design yours with values that attract and keep the best possible talent. Once you’ve distinguished between your values and your vibe, hiring for cultural fit won’t just be easier; it will give you better – and likely more diverse – employees.
If you’re interested in more information about joining NCWIT’s group of startups, let me know.
Our investment in Gnip keeps getting better and better. While the company is growing like crazy and the financial results would make any investor giddy, what really gets me excited is to see how Gnip is disrupting how business decisions are made. Gnip believes that someday every significant business decision will include social data as an input and they’ve been working hard for the last five years to make this vision a reality.
Last week, Gnip made another significant step forward towards their ultimate vision. Foursquare and Gnip just announced an exclusive partnership that allows Gnip to provide full coverage of anonymized Foursquare check-in data to Gnip’s extensive network of customers. Gnip is delivering over four billion social activities to their customers every day and their distribution network is delivering insights and analytics to over 95% of the Fortune 500. As much progress as they have made, location-based activity is one area of social data where the ecosystem has lacked significant coverage. Companies wanting to analyze geo-based activities around locations have been begging for more location-based activity. With the partnership between Foursquare and Gnip, the entire social data ecosystem gets a big win with this key signal of physical presence.
I’ve been a user and believer in Foursquare from the earliest days. It will be fascinating to see what types of analytics are built upon this new data. Both Foursquare and Gnip discuss some examples in their blog posts. It doesn’t take much imagination to think about how businesses can capitalize on this unique data set. And with this partnership, we no longer have to imagine!
Following is a guest post from Chris Moody. Chris is president and COO of Gnip, one of the silent killers in our portfolio. Once the main stream tech press starts noticing Gnip, they will be blown away at how big they got in such a short period of time by just executing. Chris is a huge part of this – he joined Gnip when they were 10 people and has been instrumental in working with Jud Valeski, Gnip’s founder and CEO, to build a mind blowing team, business, and market leadership position.
Following is a great email Chris sent me Friday night in advance of the Foundry Group “Scaling Your Company Conference” which we are having this week for CEOs of companies we are investors in that are on the path from 50 to 500 people.
Startups that experience success are typically built upon a strong foundation of trust among the early founders/employees. This trust has been solidified through long days/nights in small offices working on hard problems together. The amazing thing is that the founders don’t always realize that their company is even operating under an umbrella of trust or that trust is one of their core values. Instead, they just know that it feels easy to make decisions and to get shit done.
When companies try to scale, one of the biggest mistakes they make is trying to replace trust with process. This is rarely a conscious decision, it just feels necessary to add new rules in order to grow. After all, there are a lot of new people coming into the company and it isn’t clear who of the new people can be trusted yet.
A startup obviously needs to add process in order to scale, but if you replace trust with process, you’ll rip the heart right out of your company. When adding processes, ask yourself the following questions:
- Does this new process help us go faster?
- Does this new process help us be more efficient?
If the answer to these questions is “yes” you are off to a great start.
Now ask yourself “Are we adding this process because we don’t trust people to make decisions?” If the answer to this question even has a hint of “maybe” you need to stop and really consider the cost of that process.
Replacing trust with process is like a cancer that will spread quickly and silently throughout the company. One day you’ll wake up and think “this place doesn’t feel special any more” or ask yourself “why is it so hard for us to get stuff done.”
Trust could be one of your most valuable company assets. As a leader, you need to fight like hell to protect it. If you are successful protecting trust, you’ll actually grow much faster and you’ll still have a place where people love working.
I’ve seen trust work at a 700 person company. Trust can scale.