I got an email from Matt Blumberg this morning with the above image that said,
“We have been blogging for 19 years. I can remember sitting together above Super Liquor futzing with Typepad like it was yesterday.”
“Super Liquor” is Superior Liquor in Superior, Colorado, which was on the first floor of the building off of Hwy 36, which was my office at the time. There was also a pizza restaurant on the first floor.
I asked Matt if we started on the same day because I couldn’t remember. He said,
“Literally the same day. We sat at a desk right outside your office in Superior, pulled up our laptops, and taught ourselves Typepad together and created our templates. Fred had already been blogging for about 6 months, and we had dinner the night before (can’t remember where, think The Med) and decided we would give it a try. We couldn’t find other good examples of VC or CEO blogs. “
I went and looked at some of those first few posts. Matt’s was You’re Only a First Time CEO Once. Mine included To Blog or Not to Blog (which called out a handful of VC bloggers who started before me), Blog tools – Newsgator and Moveable Poster, TDC (Thinly Disguised Contempt), and my first book review: Free Prize Inside the Radioactive Boy Scout Rate Hikes.
My favorite of those was TDC (Thinly Disguised Contempt).
As was the tradition at the time when new bloggers appeared on the scene, Fred Wilson wrote nice posts linking to each of us. His welcome to Matt was Welcome to the Blog World Matt, and his welcome to me was This Is Going To Be Interesting.
This post wouldn’t be complete without my hat tip to Fred, who, in my view, is the OG VC blogger. His first post was creatively (well – not really) titled MY First Post.
19 years is a long time to do anything. It’s close to my board service record, which ironically was on Matt’s company Return Path with Fred. The ending of Fred’s first post resonates with me today as it did 19 years ago.
“I have no idea if i’ll write a lot in my blog or rarely. I hope its a lot, because i have a lot to say. But we’ll see about that.”
Matt Blumberg has a new book out titled Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams. It’s a follow-up to his previous book, Startup CEO: A Field Guide to Scaling Up Your Business.
I’ve been working with Matt since 2000. That year, we merged two companies: Return Path and Veripost. Matt was the co-founder/CEO of Return Path. Fred Wilson was his lead investor. I was the lead investor for Veripost. The two companies did the same thing and were the only two competitors in a nascent category called “email change of address” (Veripost’s original name was IECOA which stood for “Internet Email Change of Address”). They were bashing each other over the head in a non-existent market as the Internet bubble began collapsing.
The founders of each company talked and, in between efforts to decimate the other, agreed it might be worth merging to survive. This guy named Greg Sands at a firm called Sutter Hill had met with both and was interested in the category and encouraged them to merge, at which point he’d fund the combined company. Fred called me and said, “Let’s figure out a deal.” I said, “They are both worthless right now – how about 50/50?” Fred responded with, “I have more money invested in Return Path than you do in Veripost – how about 55/45.” I answered, “Deal.” So for the deal, investors on both sides converted to common, we split the combined company 55/45, Matt became CEO, and Greg led a new Series A financing into the combined company. Twenty years later, we sold the business, a $100 million, profitable company, to Validity. Matt was still CEO. Fred, Greg, and I were still on the board.
Last year, Matt started a new company called Bolster. He co-founded it in partnership with High Alpha (we are LPs) and SVB. Soon thereafter, USV (Fred’s firm – we are LPs) and Costanoa (Greg’s firm – we are LPs) invested. It’s off to a great start. If you are looking to expand your leadership team or board, are looking for a part-time executive role or board role, or are an investor looking for fractional executives to join your portfolio companies, you should become part of the Bolster network right now.
I’ve worked with Matt for over 20 years and have experienced many ups and downs. His hard-won lessons from Return Path show up in Startup CEO: A Field Guide to Scaling Up Your Business.
For lessons from Matt and his Return Path management team, many of who are now execs at Bolster, you want to read Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams. When I saw the outline for Startup CXO, I grinned a wry smile. The book is 132 chapters broken into 11 sections. After the intro, the following sections are written by each exec.
There’s a final part on The Future of Fractional Executive Work with a chapter by a different leader for each area above. Matt’s writing shows up regularly throughout, including an ending chapter for each section titled CEO-to-CEO Advice.
Each chapter is two to five pages long. It’s tons of information, organized well, in tight, bite-sized chunks. For example, here are the chapters in Part Five: Sales by Anita Absey (p. 247-302)
The brilliance of this book is that everyone on your leadership team, including the CEO, should read it and then discuss it. Pick one section each week. At the end of a quarter, the entire team will have discussed all the functional roles, have a deeper understanding of expectations and responsibilities, use a common language for talking about what people are doing, and be able to adapt things to your own company. Also, if you aspire to be a CXO – you can figure out your career path by understanding the whole functioning of the relevant and adjacent departments.
I’m going to encourage every leadership team I work with to take this approach with Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams.
Matt and team, thanks for writing this!
Historically, almost everything I do uses a network model. Foundry Group runs as a network. If you take a look at the Foundry Group partner funds or talk to us about our investment strategy, you’ll immediately see the texture of a network. Techstars is a worldwide network that helps entrepreneurs succeed. All of my ideas around Startup Communities incorporate network theory. If you are involved in any organizations I’ve helped create, such as Energize Colorado, you’ll immediately recognize the network model underlying them.
For me, a network is very different than a social network such as Facebook, Twitter, and LinkedIn. Now that my entire life has shifted to a virtual one, I’ve been playing around with a lot of new network concepts and how they apply to work.
My long time friend Matt Blumberg just launched a new company today called Bolster. It’s a new way to scale your executive team and board. Fred Wilson, also a long time friend of Matt’s, has a great detailed post up today about it titled Bolster Your Management Team And Board that goes through Bolster in detail. A key section from Fred’s post is:
The Bolster team believes that scaling a high growth company means that you need to adapt, grow, and supplement your management team continuously along the way. And a big part of doing that is accessing “fractional talent” which means people that don’t work for your company full-time and permanently. All of this is outlined in the Bolster Founding Manifesto which explains why they started this company.
Sign up for Bolster if you:
While we are not direct investors in Bolster, we are indirect investors in three of Bolster’s investors: High Alpha, USV, and Costanoa. It’s a great example of our investment strategy around a network model.
I know the near term plans for Bolster and there’s an enormous amount of value coming quickly around executive and board hires, especially on the dimension of networks, inclusion, and diversity. I encourage you to give it a try and get involved at the beginning.
Seven years ago this week, I posted about a new book in our Startup Revolution series called Startup CEO: A Field Guide to Scaling Up Your Business, by my friend Matt Blumberg, then CEO of email marketing company Return Path in the Foundry portfolio. Today, with more around 40,000 copies sold all over the world and in multiple languages and formats, Matt and our publisher Wiley & Sons in partnership with Techstars have published a Second Edition of Startup CEO, which you can pre-order here.
Matt and I originally conceived of Startup CEO when I was writing Venture Deals where Matt organically ended up writing a sidebar for many of the chapters which we called “The Entrepreneur’s Perspective.” At the time, we talked about him writing a full “instructional manual” for first-time CEOs, and that’s what Startup CEO became, with over 50 short chapters with practical “how to” advice on everything from Fundraising, to People issues, to Board management, to Self-Management.
In the Second Edition, Matt, who led the sale of Return Path last year, added six new chapters on Selling Your Company, which really rounded out the book.
I have given or recommended Startup CEO to hundreds of CEOs over the years. Matt has been very generous with his time in mentoring other entrepreneurs or bringing his book to life in online education and webinars. Today, he posted one of the new chapters from the Second Edition of Startup CEO on Techstars’ blog, TheLine, on Preparing Yourself for An Exit: How Do You Know It’s Time to Sell? which is a great example of the new material in the book.
I’ve been involved in Return Path as an investor since 2001 when Return Path and Veripost merged as part of a funding done by Sutter Hill (Greg Sands), Flatiron Partners (Fred Wilson), and Mobius Venture Capital (me). I wrote the very long story in a post titled Return Path Acquires Netcreations in 2004. This post has a ton of Return Path history in it in case you want to go back in time 20 years. And, if you want to only go back in time 10 years, take a gander at Happy Birthday Return Path which is a post about Return Path’s 10 year anniversary and includes the story of the negotiation between me and Fred to merge Return Path and Veripost.
I count my involved in Return Path for 20 years since my investment in Veripost (which became my investment in Return Path) was done in 1999.
Today, Matt is one of my closest friends. In addition to our personal relationship, we’ve had a number of other work experiences besides Return Path. Matt has served on two boards of companies I’ve invested in – FeedBurner (acquired by Google) and Moz. Matt was an early, and engaged mentor in Techstars. Matt introduced me to Scott Dorsey, which led to our investment in High Alpha. Finally, Matt – working with Andy Sautins, Cathy Hawley, and Tami Forman – co-founded Path Forward which was spun off from Return Path.
I’m proud to have been involved in all of these companies with Matt.
Twenty years is a long time to be involved in anything. When a VC talks about a quick exit, you can mention that you know a few (Fred, Brad, and Greg) who has a 20-year board experience. As Fred says, “entrepreneurship and startup investing is a long game. It requires patience, resilience, capital, commitment, and much more.”
Matt – and everyone at Return Path – thank you for letting me be part of your journey.
Matt Blumberg, the CEO of Return Path, has an outstanding post up this morning titled The Difference Between Culture and Values. Go read it, I’ll be here when you get back.
If you liked that, go get a copy of Matt’s book Startup CEO: A Field Guide to Scaling Up Your Business. It’s one of the books on my list of books all CEOs should read.
Matt distinguishes between culture and values. His punch line, which he reveals early, is:
Values guide decision-making and a sense of what’s important and what’s right. Culture is the collection of business practices, processes, and interactions that make up the work environment.
At Foundry Group, we have a slight modification to how we think of values. Supporting our values are a set of “deeply held beliefs.” These deeply held beliefs tangibly define our values and give us a frame of reference to operate.
For example, one of our deeply held beliefs is that “we will never grow.” Each of our funds is $225 million, we have four partners and no other investment staff, and we work out of the same office we’ve worked out of since we started in 2007. We’ve had opportunities to raise much larger funds and have considered it in the past given a variety of factors. But, we kept coming back to this deeply held belief and realized that raising a larger fund would violate our brand promise of only raising $225 million funds.
Our deeply held beliefs are fundamental to our values, although we are comfortable challenging them regularly to make sure they are deeply held, and make modifications on occasion when we learn new things but only after a lot of thought and discussion, among ourselves and with several of our very close limited partners.
For example, when we started we said “we’ll make around 10 new investments a year.” This came from a belief around the importance of time diversity of investing – we have a three year time horizon for making the 30 or so initial investments in the companies we want in each fund.
Until 2013, we made between 8 and 14 a year, which is close enough to 10 (although the year we did 14 was a year where we all said “too much – slow down.”) But at the end of 2013, when the JOBS Act became official and AngelList created Syndicates, we decided to understand the phenomenon better by participating in it. So, rather than sit on the sidelines, observe, and prognosticate about angel / seed investing, we created the FG Angels Syndicate on AngelList and have done around 60 seed investments in the last 18 months.
Another example of a re-evaluation of a deeply held belief was our decision to create our Foundry Group Select Fund. Until we created this fund, we limited the amount that we could invest in a company to $15 million. We would occasionally go a little higher (the most we have invested in a company from one of our funds, other than Select, is $17 million) but, especially with successful companies, we were limited to what we could do in the later rounds. During a particularly challenging financing for Fitbit, which we believed deeply in at the time as an unambiguously successful company, we were frustrated that we couldn’t write a big check in the financing. We talked to our LPs about what we were thinking, quickly raised a late stage fund to invest on in our later rounds for our portfolio companies, and made our first investment from that fund in the last round Fitbit did in 2013. With Select, we are no longer limited to investing $15 million per company.
Matt states in his post:
“A company’s values should never really change. They are the bedrock underneath the surface that will be there 10 or 100 years from now. They are the uncompromising core principles that the company is willing to live and die by, the rules of the game.”
I strongly agree with this, although I have one nuance. It’s hard to be absolutely correct at the beginning of the journey. So, instead of being dogmatic about values you created when you were three founders in a cafe somewhere, make sure you have one layer of abstraction about how you implement them, that can be tuned over time. For us, these are our deeply held beliefs, which support our values, but can be tuned as we learn new things. But, because they are deeply held, they can only be slightly modified, rather than torn up and replaced.
On Saturday, I polished off Hot Seat: The Startup CEO Guidebook. I started it last weekend at the tail end of my Weekend Reading on Startup Communities but four books weren’t in me so I didn’t finish it.
It was excellent and is now on my “all startup CEOs must read” list. My recommended book list for startup CEOs is very long, but there are only three books on the must read list.
and now #3: Hot Seat: The Startup CEO Guidebook by Dan Shapiro.
All three are from experienced CEOs. Each is a delightful mix of stories, advice, and experiences. They are all contemporary, highly relevant, and fun to read. Regardless of the number of times you’ve been a startup CEO, from having started ten companies to being an aspiring CEO/founder, you will learn a lot from each of them.
I don’t think I’ve ever physically been in the same place as Ben, but we’ve exchanged emails in the past and he was willing to allow me to republish his classic essay The Struggle in the book I wrote with my wife Amy – Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur. In contrast, I’ve known and worked with Matt since 2001 when I first invested in his company Return Path (well – it’s a little more complicated than just an investment – see my post Return Path Launches Email Intelligence from 2012 where I recounted some of the story.)
Return Path is an extraordinary company that I’m proud to have been involved with for the past 12 years. At our board meeting last week, Matt gave me and Fred Wilson our 12 year anniversary gift – a pair of red Return Path-branded Adidas sneakers. I still vividly remember the phone call Fred and I had where we cut a deal to merge two nascent companies – Veripost and Return Path – in what became Return Path. We cut a deal in 10 minutes – I offered up a 50/50 merger and Fred suggested he wanted a little more since Return Path had raised 3x the money Veripost had. I responded with “how about 55/45″ and Fred said “it’s a deal.”
Matt has become one of my best friends and I treasure every minute I get to spend with him.
Dan is a new friend. The first email I remember getting from him was from 9/3/13, titled My new project: Robot Turtles, and he acknowledges in Hot Seat that it’s the one time he spammed everyone in his address book. I don’t know why I was in his address book, so I asked Dan, and he dug up his very first email to me, which happened to be about the term sheet series that my partner Jason Mendelson and I wrote that lead to our book Venture Deals.
The first substantive email exchange we had was on 3/18/15, as a result of an intro from Ben Huh, the CEO of Cheezburger and another long time friend. We went back and forth on a rapid fire thread about Dan’s newest company Glowforge and the round he was starting to raise. We agreed to terms on a financing on 4/20/15 and closed a $9m financing with True Ventures on 5/8/15, at which point Amy and I went to Paris to celebrate (actually, we just went on vacation for one of our quarterly off the grid vacations.) There were a number of articles around the financing, but the best – and most thorough explanation of the company – was in Natasha Lomas‘s Techcrunch article Seattle’s Glowforge Is Building A Maker Machine To Challenge Amazon Prime.
Suffice it to say that in 75 days, I’ve gotten a good dose of Dan and am having an absolute blast working with him. He’s definitely got a healthy dose of evil genius combined with deep wisdom from being around the startup block a number of times. He’s tireless, intense, but delightfully funny and witty. He’s got extremely broad range as a CEO and entrepreneur, which comes through in his daily activities as well as his writing.
Which brings me back to Hot Seat. Like Matt and Ben’s books, it’s very fast paced. The chapters are short, written in first person, and easy to read. He’s not shy about calling things out clearly, including his own crazy experiences, especially the things he totally fucked up or had no idea about when he first encountered them. His examples are great, including some from mutual friends including Rand Fishkin and Ben Huh. The book is well organized and easy to dip in and out of. He flogs Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, which I put in the flattering special bonus category. And – he’s got great footnotes in each chapter which give you a special dose of his sense of humor.
I hope to get to work with Dan for a long time on Glowforge. But, regardless, I know I’ll be regularly recommending Hot Seat: The Startup CEO Guidebook to every CEO I know.
tl;dr – If you are a CEO and want to take an amazing online course about being a CEO by Return Path’s Matt Blumberg, sign up for Startup CEO from NovoEd now.
Yesterday, I wrote about Rand Fishkin of Moz falling out of love with the CEO role. Today I read Jason Goldberg of Fab’s great post on his struggles as CEO in 2013 and what he learned from it. This topic is front of mind for me as many of the companies I’m on the board of are growing extremely fast and the demands on the CEOs are significant.
It’s really hard to be a CEO. Becoming a great CEO takes a lot of time, work, focus, coaching, and introspection. I’ve had the privilege of working with some incredible entrepreneurs who, over many years and several companies, became remarkable CEOs. Dick Costolo (Twitter CEO) immediately comes to mind. While I didn’t work with him at Twitter, I was on the board of FeedBurner and worked with him and his three founders (Eric Lunt, Steve Olechowski, and Matt Shobe), who are all still close friends. I learned an amazing amount from each of them, but especially from my time with Dick.
Another great CEO I’ve had the honor to work with is Matt Blumberg who has led Return Path since founding the company in 1999. Matt is a first time CEO and has a fun blog titled Only Once which references the idea that you can only be a first time CEO one time. In a delicious twist, he’s now been a first time CEO for 14 years. While Return Path has had countless twists and turns along the way, Matt has been CEO from inception and presides over a large and significant company that continues to be a leader in a market it helped create.
Fred Wilson, who is on the board of Return Path with me and Matt (along with the FeedBurner board, and the Twitter board) had a frank and insightful post about turning your team three times through the life of the company to meet the different challenges that face a company from its journey from sweat driven startup to massive scale. Often this process of turning the team includes the CEO; other times it doesn’t. In Matt’s case, there have been plenty of team changes along the way, but Matt has demonstrated an impressive ability to scale and adapt himself in the evolving role of a CEO of a rapidly scaling company.
As a result, when Matt started talking to me about writing a book about the role of a Startup CEO, I was super excited. I encouraged and supported this, and it resulted in another book in the Startup Revolution series that I’ve done with Wiley. Matt’s book, Startup CEO: A Field Guide to Scaling Up Your Business, is a must read for any CEO.
Last summer, Matt began exploring doing an online course around the content in Startup CEO. He teamed up with the Kauffman Fellows Academy to put together a course titled Startup CEO, an online class that really drills into the important material of the book. It’s the real deal with hours of video, Q&A that Matt did in front of a live studio audience of NYC startup CEOs, as well as engagement with the teacher through the NovoEd platform.
I’m encouraging all the CEOs in Foundry Group’s portfolio to take the class, and I encourage you to take the class as well.
The class starts on January 20th on the NovoEd platform. You can learn more about it on Matt’s blog post about the Startup CEO course.
Over the past two years I’ve been struggling mightily with the dynamics of “classical VC funded board of directors” and how these boards work. When I hear a VC say “I’m an active board member” it gives me the same nauseous feeling I get when someone says “I’m a value added investor.” I’ve been on some awesome boards, some terrible boards, and everything in between. Today, I refuse to be on a shitty or dysfunctional board and I’m proud that every board I’m on is one that I’d consider to be effective, although they all operate in different ways.
I’ve experimented with a bunch of different approaches across a lot of boards and have been thinking hard about this lately. I’m working on a book called Startup Boards with Mahendra Ramsinghani and have done some interviews about this topic lately, including a chaotic one the other day with James Geshwiler on the Frank Peters Show.
My long term friend Matt Blumberg (Return Path CEO) and I were going back and forth about his recently board meeting (which ironically I missed) and he wrote some kind words about me and his other board members (Fred Wilson – USV, Greg Sands – Sutter Hill, Scott Weiss – A16Z, and Scott Petry – Authentic8.) I asked him if he’d write a guest post about what makes an awesome board member. He was willing – it follows.
I’ve written a bunch of posts over the years about how I manage my Board at Return Path. And I think part of having awesome Board members is managing them well – giving transparent information, well organized, with enough lead time before a meeting; running great and engaging meetings; mixing social time with business time; and being a Board member yourself at some other organization so you see the other side of the equation. All those topics are covered in more detail in the following posts: Why I Love My Board, Part II, The Good, The Board, and The Ugly, and Powerpointless.
But by far the best way to make sure you have an awesome board is to start by having awesome Board members. I’ve had about 15 Board members over the years, some far better than others. Here are my top 5 things that make an awesome Board member, and my interview/vetting process for Board members.
Top 5 things that make an awesome Board member:
My interview/vetting process for Board members:
I asked my exec team for their own take on what makes an awesome Board member. Here are some quick snippets from them where they didn’t overlap with mine:
Disclaimer – I run a private company. While I’m sure a lot of these things are true for other types of organizations (public companies, non-profits, associations, etc.), the answers may vary. And even within the realm of private companies, you need to have a Board that fits your style as a CEO and your company’s culture. That said, the formula above has worked well for me, and if nothing else, is somewhat time tested at this point!