I just finished Joel on Software. It is fabulous! Joel Spolsky – CEO of Fog Creek Software – has written a must read book for everyone in the software industry.
Joel has a popular blog by the same name as the book. While some of the book is a simple refactoring of his blog posts over the past few years, don’t be fooled – this is a well organized, often hilarious, and always insightful compendium of Joel’s thoughts. It’s fresh. And relevant. And – almost always dead nuts on.
If you are a software developer, I expect you’ll roll around on the floor in empathy while simultaneously gleaning new insights into why the world are you is so bizarre and the marketing people in your company are so stupid. You’ll gain a deeper understanding of the cause of the general cluelessness of venture capitalists and still wonder why Microsoft doesn’t have a .NET linker (but it’ll inspire you to go searching for one on Google.)
If you manage software developers, or are a manager in a software company, you’ll end up with a much deeper understanding of what a typical software developer worries about when he’s not smirking at the last thing that came out of your mouth. You’ll learn why you should never try to set software development strategy based on what you read in airline magazines and why it’s just fucking dumb to create incentive programs for software developers that treat them like they are still in kindergarten.
If you are the CEO of one of my companies, don’t bother buying this book. You’ll get one in the mail from me in the next week or so. However, if you are someone else, and want to learn about – in Joel’s words – “on software and on diverse and occasionally related matters that will prove of interest to software developers, and managers, and to those who, whether by good fortune or ill luck, work with them in some capacity”, buy it now.
P.S. I don’t know Joel, but I respect him, even if he worked at Juno.
My NewsGator Keyword Search Feeds picked up a couple of new blogs from employees of two of my portfolio companies. I posted recently about a few new Mobius VC bloggers – it’s fascinating to see the spread of blogging to our portfolio companies.
First up is Sandy Hamilton. I’ve known Sandy for several years – he’s worked at a couple of my portfolio companies. He’s currently the SVP of Sales and Business Development at NewsGator where he’s kicking butt. He just started two blogs – the first on his personal musings on business and life and the second on corporate applications of RSS.
Next up is Jason Groshart, one of the software engineers at Gold Systems. Gold Systems CEO – Terry Gold – recently started blogging. It’s neat to see Jason follow.
Welcome guys!
Jeff Nolan beat me to it with his “Attn PeopleSoft Employees” post, but he’s right on the mark. Given Oracle’s announcement that they are laying off 5,000 people today, a lot of experienced IT folks will be hitting the streets in the next few weeks. Like SAP Ventures, we’ve got a number of enterprise software companies that would love to talk to experienced sales, marketing, and engineering ex-PeopleSoft folks.
Email me if you are ex-PeopleSoft and are looking for a new gig and I’ll hook you up with some of our relevant companies.
My friends at Return Path just released a book called Sign Me Up! : A marketer’s guide to creating email newsletters that build relationships and boost sales. We’re really excited about it – Matt Blumberg does a nice job talking about it in his post today. I read the final draft a few months ago – if you care about email marketing in any way, this is a must read.
Writing a book is a bitch. I was involved in one of the first books on the web called Build a Web Site: The Programmer’s Guide to Creating, Building and Maintaining a Web Presence (Practical Programming). I was chairman of Net.Genesis at the time – we managed to get a book contract with a publisher called Prima (who now appears to be part of Random House) – they paid us a whopping $25,000 advance and we committed the book in a few months (three or four – I can’t remember.) I remember the Net.Genesis guys torturing themselves to get this done with a Prima-sponsored writer who had minimal technical chops, but was a good person and forced the beast out. It’s pretty cool to look back and see one of the first web books with a publishing date of April 1, 1995 (no – it’s not an April 1st joke, but it sure felt like one at the time.)
For some unknown reason, the memory of this experience had the same half-life as childbirth, and the Net.Genesis guys wrote a second book called Build a World Wide Web Commerce Center: Plan, Program, and Manage Internet Commerce for Your Company – this one was even more painful (I remember Raj Bhargava and Eric Richard surrounded by piles of paper pulling all nighters as they tried to grind it out in the midst of running a rapidly growing software company) – and I can’t even remember the size of the advance. Its publication on June 1, 1996 was the end of Net.Genesis’ book publishing career (although they went on to publish plenty of software.)
I’m proud of Matt and crew for getting this one out. Matt and his team didn’t seem to lose their minds writing this book – in fact, Matt’s ends his post by saying “boy was the experience we had different than it would have been 10 years ago.” No doubt (and thank “whatever diety you worship, if any!”)
I love my T-Mobile Sidekick (powered by Danger’s hiptop platform) – which you can currently get for free on Amazon.com with all the rebates. Of course – since Danger is one of our portfolio companies – I’m supposed to love it. But – I really I do (I’ve been a handheld user forever and have a closet full of Palm’s and RIMs, including a Palm VII (yuck-o-loa – remember that dog?.)
I’m not alone. Danger just announced that over three billion (3B!) IMs were sent and received over the hiptop wireless platform in 2004. For perspective, there were 22.8B SMS messages sent across ALL OF the carriers in the US last year. If you’ve ever sent an SMS message on a cell phone and had the opportunity to send an IM on a hiptop, you’ll understand why IM’s on hiptops represented 10% of the total SMS traffic on cell phones (a huge percentage of traffic on a small percentage of enabled devices when you count cell phones + Sidekicks.)
IM just keeps on rolling.
BusinessWeek Online just launched a blog called Deal Flow – Inside the World of Venture Capital and Startups. It’s fun to see Main Stream Media get in the blog game.
In our series of posts on Term Sheets, Jason and I thought we’d take on a relatively easy one today. In our previous posts on Price and Liquidation Preferences, we discussed the key economic terms that VCs care about. In this post, we tackle one of the two primary “control terms” that matter to VCs.
VCs care about control provisions in order to keep an eye on their investment as well as – in some cases – comply with certain federal tax statutes that are a result of the types of investors that invest in VC funds. One of the key control mechanisms is the election of the board of directors.
There is no secret science in the board of director election paragraph – it simply spells out how the board of directors will be chosen. The entrepreneur should think carefully about what they believe the the proper balance should be between investor, company, founder and outsider represenation should be on the board. There are many existing VC (and entrepreneur) posts concerning the value of a board, the desired composition of the board, and what a board is responsible for. This post doesn’t delve into those issues – we are simply addressing how the board is selected.
A typical term sheet looks as follows:
Board of Directors: The size of the Company’s Board of Directors shall be set at [n]. The Board shall initially be comprised of ____________, as the Investor representative[s] _______________, _________________, and ______________. At each meeting for the election of directors, the holders of the Series A Preferred, voting as a separate class, shall be entitled to elect [x] member[s] of the Company’s Board of Directors which director shall be designated by Investor, the holders of Common Stock, voting as a separate class, shall be entitled to elect [x] member[s], and the remaining directors will be [Option 1: mutually agreed upon by the Common and Preferred, voting together as a single class.] [ or Option 2: chosen by the mutual consent of the Board of Directors].
If a subset of the board is being chosen by more than one constituency (e.g., two directors chosen by the investors, two by founders / common holders and one by “mutual consent”), you should consider what is best: (a) chosen my mutual consent of the board (one person, one vote) or (b) voted upon on the basis of proportional share ownership on a common-as-converted basis.
VCs will often want to include a board observer as part of the agreement either instead of or in addition to an official member of the board. This is typical and usually helpful, as many VC partners have an associate that works with them on their companies. While there’s rarely any contention about who attends a board meeting, most VCs will want the right to have another person from the firm at the board meeting, even if they are non-voting (an “observer”).
Many investors will mandate that one of the common-stockholder chosen board members be the then-serving CEO of the company. This can be tricky if the CEO is the same as one of the key founders – often you’ll see language giving the right to a board seat to one of the founders and a separate board seat to the then CEO – consuming two of the common board seats. Then – if the CEO changes, so does that board seat.
While it is appropriate for board member and observers to be reimbursed for their reasonable out-of-pocket costs for attending board meetings, we rarely see board members receive cash compensation for serving on the board of a private company. Outside board members are usually compensated with stock options – just like key employees – and are often invited to invest money in the company alongside the VCs.
I can’t claim credit for this one – it was the header of an invite I just got to an upcoming ThinkEquity Software Research and Banking Team’s lunch. Their suggestions are:
- Join the gym
- Buy my competition
- Shift to “On-Demand” model
- Re-architect my product
- Leverage more open source
- Outsource development – India? China?
- Figure out that Sarbanes-Oxley thing
- Discover the next “Killer App”
I’m definitely up for join the gym.
I’m an unapologetic conservationist. I remember – during my first trip to Alaska in 1992 – Amy turning to me and saying as we were driving through massive open spaces on the Sterling Highway – “New England looked like this 200 years ago.” While I understand the conundrum of being an environmentalist while owning an SUV (for a provocative and fabulously fun book on this top, try Michael Crichton’s latest masterpiece State of Fear), I’ve focused my “environmental” activity on land conservation.
While I live in the Republic of Boulder, home of Open Space, I was inspired to have an active, positive impact on conserving the front range mountain backdrop – the region of land in Colorado about 150 miles long and about 5 miles wide where the mountains meet the plains (from the top to the bottom of the state – it’s what you see if you look west from I-25.) In the mid 1990’s, the five counties in this stretch of land (Larimer, Boulder, Jefferson, Douglas, and El Paso) started a “Front Mountain Backdrop Study” to try to figure out how to have a multi-regional coordination effort to preserve this land. In the late 1990’s, it disappeared into the bermuda triangle of unfinished government projects.
I was inspired to act – rather than simply think or talk – in 1999 when I found out that a plan for a 142–acre open-pit mine was being proposed on the back side of Eldorado Mountain. I live behind Eldorado Canyon (part of the Front Range Mountain Backdrop near Boulder) and was blown away that anyone thought it would be reasonable to build a quarry on the back side of this mountain. Fortunately, I wasn’t alone, and the initiative was defeated.
Within a year, I heard of a proposal to put three 500’+ towers on the top of Eldorado Mountain ostensibly for HDTV transmission. I thought the whole proposal was absurd and was incredibly riled up when I started hearing broad statements like “the tech / business community was creating all of these environmental problems.” I gathered up some of my Boulder-area entrepreneurial friends and formed the Front Range Alliance (FRA) – a 501c(3) aimed at educating the tech and business community on issues and projects that affected the Front Range Mountain Backdrop. At the time, I was a compete newbie with regard to the conservation and environmental infrastructure in Colorado, so as part of my activities I got to learn an incredible amount about what people were doing, what worked, and what didn’t work.
FRA was actively and visibly involved in helping defeat the tower rezoning initiative. We looked at getting involved in a number of other projects and realized we needed to get smarter about the entire problem. As part of this, we worked with a group called the Colorado Conservation Trust on a study to map the Front Range Mountain Backdrop. As we began to understand the magnitude of the issue, we correspondingly saw the size of the opportunity.
We spent a year puzzling over how to co-exist within the existing environmental and conservational non-profit infrastructure of Colorado. At some point, the FRA board reached a critical juncture where we had to decide whether or not to functionally scale up Front Range Alliance beyond the small organization that it was. As we struggled with this, the notion that the world (specifically the Colorado Front Range) didn’t need “yet another environmental non-profit” started to dawn on us. We concluded that – like many for-profit companies – we could achieve our objectives faster and with more impact if we joined forces with an existing, significant, functionally and philosophically aligned organization.
Fortunately, the Colorado Conservation Trust (CCT) board agreed. CCT acquired FRA at the end of last year, I joined the CCT board, and two of my fellow FRA board members (Ryan Martens and Liz Jacques) became trustees. Last week, I sent out the following letter to the members of the Front Range Alliance, signalling the end of FRA as a stand-alone organization while reinforcing its potential future impact on the Front Range Mountain Backdrop through the ongoing efforts of CCT.
Since the founding of the Front Range Alliance (FRA) in 2001, my involvement in preserving the natural beauty of Colorado’s Front Range Mountain Backdrop has evolved in exciting and innovative ways. This evolution continues today with the recent announcement of the Front Range Alliance Board’s decision to join forces with the Colorado Conservation Trust (CCT).
Our strong desire to continue FRA’s success prompted our decision. The Front Range Mountain Backdrop is increasingly threatened by growth pressures and, at times, poorly planned development. We face limited resources and feel that our partnership with CCT can only expand the impact we can have in preserving the natural landscapes of the Front Range.
CCT’s goals are based on the premise that additional conservation investment from both the private and public sectors is necessary in order to preserve the land of Colorado. CCT focuses on securing new conservation dollars from untapped sources and leveraging investments in order to maximize the effectiveness of donors’ gifts. By working with CCT’s staff and Board and the influential circles of which they are a part, I am confident that FRA’s conservation goals will be accomplished at a higher level than if we were to continue to work on our own.
CCT is a lean, effective organization – over 96% of every dollar donated last year was invested directly into land conservation. CCT has raised nearly $6 million in the last three years, matching these funds with more than $12 million in other public and private dollars, and has reinvested those contributions in 25 conservation projects throughout eight regions of our state.
CCT has a proven commitment to preserving threatened lands in the Front Range Mountain Backdrop. CCT is currently collaborating with a number of funding agencies and non-profits to complete a $22.3 million preservation project in Larimer County. This project will result in the protection of approximately 55,000 acres of ranch lands with significant wildlife, scenic, recreational, agricultural, and historical values. Just recently, the CCT Board awarded $220,000 to jumpstart this project, expand the capacity of the local land trust and help to address the complicated system of severed mineral rights in the area.
The Board of FRA has unanimously agreed to join CCT and I am pleased to become the newest member of CCT’s Board of Directors. FRA Board members, Ryan Martens and Elizabeth Jacques, have also joined CCT as trustees.
I encourage you to continue your meaningful involvement in land preservation by making a contribution to CCT in support of its work in the Front Range of Colorado. CCT and FRA have, together, accomplished a great deal for the Front Range. But there is much more to do – achievable only with the engagement of people like us who are passionate about the beauty and character of our state’s landscapes.
Thank you for all that you do to preserve the Colorado we love.
Sincerely,
Brad Feld
Member, Board of Directors, Colorado Conservation Trust
Founder, Front Range Alliance