Brad Feld

Tag: internet bubble

My friend Dave Jilk recently shared the following Robert Frost poem with me.

by Robert Frost

The rain to the wind said,
‘You push and I’ll pelt.’
They so smote the garden bed
That the flowers actually knelt,
And lay lodged–though not dead.
I know how the flowers felt.

That perfectly describes how 2001 felt to me.

We now have at least one generation of VCs and entrepreneurs who didn’t experience the collapse of the Internet bubble. Fred Wilson wrote a great post this morning titled Diversification (aka How To Survive A Crash). Fred does a great job of covering the financial dynamics around a crash.

But he didn’t really address the emotional dynamics.

In 2001, I was on the board of four public companies (and was co-chairman of two of them which I had been a co-founder of.) Sometime in the spring of 2000, all of them hit their peak stock price. By mid-2001 I think all of these were sub-$1 stocks and – if they weren’t – they would be soon.

The rain to the wind said,
‘You push and I’ll pelt.’

I knew my work world was totally fucked. I was working as hard as I knew how to work, dealing with a steady stream of failures. Amy and I were in a better place than the one I talked about in the beginning of our book Startup Life where we almost split up, but everything was still very rough around the edges.

My moment of capitulation came sometime in the early summer of 2001. For months, I was going to bed each night with the thought “tomorrow will be better.” By summer, it was warmer, but one night, as I was crawling into bed, I realized that each day had been worse, and often much more punishing than the previous one. The cumulative impact of what by that point was over a year of an intense, downward spiral in every aspect of my work world, was undeniable.

Forget about the paper money, much of which had vaporized. I was just completely exhausted hoping that something would break my way.

They so smote the garden bed
That the flowers actually knelt,
And lay lodged–though not dead.

That night, I changed my perspective. Instead of hoping the next day would be better, or easier, I went to bed thinking, “Fuck it – let’s see what the world will throw at me tomorrow…” If you’ve read my post from 2015 titled Something New Is Fucked Up In My World Every Day, you will recognize this philosophical shift.

I know how the flowers felt.

Eventually, it got better.

I wasn’t dead. Someday I will be, but I wasn’t then. The pelting eventual stopped. Lots of things I was working on were smote, but the sun came out and I kept at it.

Every successful entrepreneur I’ve ever met has stories like this. Every successful long-term VC has had these moments, sometimes for extended periods of time.

Just like Fred suggests you diversify financially, you should diversify emotionally. I have no idea how I would have survived this period without Amy. When I reflect on my relationship with Seth, Jason, and Ryan much of the intense loyalty between us was forged in the period during and after the debacle that was the collapse of the Internet bubble. Some of my lifelong friendships, with people like Len Fassler, Dave Jilk, Rajat Bhargava, Jenny Lawton, Will Herman, Ilana Katz, and Warren Katz were solidified by the intensity of this time frame.

Until that day in the summer of 2001, my emotional well-being was much too connected to my financial well-being. The day after, not so much …

I’ve made a lot of major decisions in my life – both personal and professional. For the professional ones, I’ve come up with an approach that I now use consistently. I try on the decision for a period of time – the more significant the decision, the longer the period of time. For the really major decisions, I try them on for 30 days.

Here’s an example. In 2003 I seriously thought about quitting Mobius Venture Capital. I was tired, burned out, and very frustrated. While I’d been a partner in Mobius from the beginning, I hadn’t really been engaged in managing the overall firm. I had my office and a small team in Boulder. I did my deals. I flew to the bay area often (where everyone else was located) but focused most of my energy on the boards I was on and the investments I’d made.

My whole world blew up in 2001. My portfolio melted down with the bursting of the Internet bubble. I was on way too many boards (over 25 – including four public company boards) so the entire thing was a total shit show. In addition to being miserable at work every day, I was 30 pounds overweight, drinking too much, traveling constantly, and involved in laying off thousands of people and shutting down over a dozen companies.

Then, on 9/11, all Americans participated in a massively traumatic event. I was in New York for it, having taken a redeye the night before from San Francisco. I was never in harms way, but 9/11 triggered a major depressive episode for me. When I got home to Boulder the night of 9/12 (after driving all night on 9/11 and all day on 9/12) I shut down all travel through the end of the year.

The depressive episode only lasted three months, but the shit show continued through 2002 as most VCs and Internet companies suffered a massive collapse. While my world started to settle down in mid-2002, the rest of Mobius started to more aggressively fall apart. There was no joy anywhere.

In early 2003, I started to think about leaving Mobius. While I was trying to be helpful in general to the firm and my partners, I didn’t like the way we were operating. I felt like we had way too many people, too much denial about the reality of our situation, and were making many bad decisions simply to defer the inevitable pain that was resulting from the collapse of the Internet bubble.

I woke up one morning in February 2003 and decided to spend a little time each day pretending like I had quit Mobius. I allowed myself to think about it twice a day – when I first woke up and when I went to bed at night. During the day I continued to work my ass off on everything I was doing for Mobius. But I gave myself two periods a day where I contemplated what a different work life might look like.

During these periods, I wrote down what I was relieved about. As the month went on, at the end of the day I started writing down what I was unhappy about at Mobius. In the morning I’d clear my mind as though I didn’t have anything in front of me to deal with that day, and then go into battle and deal with whatever was in front of me. At the end of the day, I’d repeat the thought process. And, at least once a week, I talked to Amy about what I was thinking about.

A clear pattern emerged for me. I didn’t dislike the work, even though most of it was not very fun. I felt a strong sense of responsibility for Mobius since I had helped create and contribute to the mess we were in. I felt a deep obligation to all the various people involved – the founders we had invested in, our LPs, and all the people who were still working for Mobius. But I didn’t feel engaged in the decision making that we – as a firm – were doing to get out of the ditch we were in.

After 30 days, I had a clear understanding that quitting Mobius was not the right answer for me. Instead, I needed to commit to engaging completely and taking responsibility for the whole firm, not just my corner of it. This didn’t mean taking over everything, but it did mean going all in on trying to make things better, whatever that meant.

In March 2003 I fully engaged in Mobius. While 2003 – 2006 was an incredible grind, I look back on that time period as one that I am satisfied with as we did manage to get Mobius to a stable place. I learned an incredible amount about running a VC firm through the work I did in that time period. And, with my partner Jason, we still manage what is left of the portfolio (still several hundred million of assets) simply because it is the right thing to do for the LPs.

When I reflect on the decision, I was only able to make it because I gave myself 30 days to really consider the decision and the various options. I’ve used this approach many times since, for decisions large and small, and it has served me well.