My friend Jim Lejeal just launched his blog.
Jim is a very accomplished entrepreneur. His first company – Link-VTC – was acquired by Frontier Communications (now part of Global Crossing). His second company – Raindance Communications – went public (I was an investor/board member in Raindance). Jim’s current company is Oxlo Systems – I’m also an investor/board member.
In addition to being a successful entrepreneur, Jim has also been an active angel investor and board member for early stage companies. One of his angel successes was Dante Group (now owned by webMethods), which he introduced to us and helped guide the founders through a venture financing. He’s also on the board of a couple of my companies (Gold Systems and Rally Software).
Jim has seen the process of creating companies through many phases (initial startup, early financing, product development, growth, IPO, exit) and many angles (entrepreneur, angel investor, VC, board member). Jim’s also a great, honest soul that is very introspective (and a pretty good poker player), so I expect his blog to be full of insight for anyone interested in creating companies
Welcome Jim!
I’m a cell phone junkie. For years, I switched every six months or so as the newest thing came out and I had to try it.
I’ve been in love with my Sidekick since the first one came out. Now – it’s one of our investments – so I was obviously biased to liking it – but I loved it. Nine months ago I got an early beta of the Sidekick II. I’ve been using it since and it’s incredible. My beta model has a lot of miles (and minutes) on it and it’s held up extremely well as both a phone and a data / email device. I’m still in love (to the extent you can be in love with an inanimate object, which the nerds in the crowd understand, but my wife Amy doesn’t and just looks at me with amusement whenever I say something like that.)
Mark Cuban – of Broadcast.com and the Dallas Mavericks fame – just wrote a rave review of his new Sidekick II. He feels the same way I do – “To all you corporo types out there that like the Blackberry, you have no idea what productivity is like ‘till you play with one of these bad-boys.”
To all the folks at Danger and T-Mobile – congrats on an amazing new Sidekick.
MessageCast announced that its LiveMessage Blogger alert service has gotten 10,000 subscribers in its first week. Some cool blogs such as Bink.nu are using it.
To see how it works, you need to have Microsoft Messenger running on your computer. Go to a site running LiveMessage and click on the appropriate link (e.g. Bink.nu has a LiveMessage button, Flexbeta has a Flexbeta Alerts button, Feld Thoughts has a LiveMessage button, and OnlyOnce has a LiveMessage button.)
If you have a blog consider trying out the LiveMessage Blogger alert service as an option for your blog subscribers.
Paul Berberian, chairman and founder of Raindance, wrote a provocative post today called Free Conferencing is Theft. Paul knows this business extremely well – I was an early investor in Raindance (I left the board two years ago and am no longer involved in the company – but I continue to be a strong supporter and fan of it).
While Paul’s position is influenced by his role as a major investor in a leading web conferencing company, he describes clearly how the regulatory economics of the conferencing business works as well as the loophole that free conferencing companies are taking advantage of. He makes the point that someone is paying for this and – eventually – if the cost gets big enough – “someone” will notice and the dynamics will change.
Paul refers to the free Internet access business as an example of a bad business model that wasn’t sustainable that tried to take advantage of a shifting a cost disparity. I know this all too well as an early investor in PeoplePC (now owned by Earthlink and a paid service) – we spent a lot of money and acquired 600,000 customers on the path to having a non-sustainable business model. Part of our problem was the cost arbitrage we were trying to take advantage of – we thought we could provide retail ISP services at free prices but make up for it through our share of margin on computer sales, partner rebates, pull-through e-commerce sales, advertising revenue, and credit card incentives (all of these were revenue opportunities that we had that were associated with each new subscriber we acquired.) While we weren’t arbitraging regulatory issues (as with free conferencing), we applied a business model that required scale to a well-established business infrastructure, and ultimately failed. In hindsight, if we’d merely charged a commodity price for Internet access, we would have likely had a sustainable business.
Ironically, one of the very visible free ISPs (NetZero) has turned into a very successful paid ISP (United Online). The successfully transitioned enough of their large free customer base to a paid customer base – along with some smart financial engineering and good operational management – to use their initial “free” arbitrage position to create a sustainable and successful business. For those of you enjoying “free conferencing calls” today – don’t get too used to “free”.
We’re back home in Colorado. It’s radically different to wake up in Eldorado Canyon instead of Homer, but equally beautiful, in a different way.
Last month Mediathink published a White Paper title RSS: The Next Big Thing On Line. It’s the best starter piece that I’ve seen so far for people – especially in a business context – that are trying to figure out the answer to the question “what is this RSS thing and why do I care.” It’s a short piece (seven pages) – about a third is an intro to RSS, a third talks about aggregator technologies (and gives my favorite – NewsGator – a great review), and the final third talks about implications of RSS on marketing, email, messaging, search engines, and rich media.
Remember – it’s an introductory piece – so if you are an RSS / blogging pro it’s unlikely that you’ll see any new information. But – if you are either trying to figure out RSS or trying to help explain to collegues or customers why they should care about RSS – this belongs in your document toolkit.
I was on a board call for a company today that pays their employees bi-weekly (every two weeks). At some point in time there was a rationale for this since this company has a lot of hourly employees and there was a perception that folks would want to be paid every two weeks. So – presumably this was a logical decision at the time.
However, it creates havoc with our monthly reporting and forecasting as we have at least two months per year with three pay periods. This adds an extra pay period to our expense structure for those two months (and lowers it correspondingly for the other months where we only have two pay periods). As a result of this, we are constantly backing out expenses (or adding it back in) to get “apples to apples” monthly comparisons.
The vast majority of the companies I’ve been involved with pay employees semi-monthly (twice a month – usually on the 15th and last day or the month). While you obviously can do the work to “normalize” month to month expenses if you pay your employees bi-weekly, do yourself and your investors a favor and pay semi-monthly. It’s so much easier to deal with.
Fred wrote two stories on the cliche “if it looks too good to be true, it probably is.” I saw it right after I responded to a few comments on my To Participate or Not post and was chewing on the notion of the behaviorial dynamics and mismatch that often occurs between investors and entrepreneurs, even when both sides are behaving as rational actors.
Amy and I have a saying that “The fantasy is better than the reality.” It comes up when incongruent situations appear in our life, where something that hasn’t yet happened appears irrationally magnificent in comparison to something that already either exists for us or something that is also a good thing and more achievable, but not as magnificent. After we chew on it for a while and think about the unintended consequences and side effects, we often conclude that we’ll stay with what we have, but enjoy thinking about the fantasy. Now – I’ve never been accused of not “going for things”, so you need to imagine “big fantasies” here.
This is a corollary to Fred’s anecdotes – which rang true with me this morning.
My friend Paul Berberian and his friend Paul Wareham did a round trip from Colorado to Alaska earlier this month. They stopped off and visited us for a few days which included a trip to Anchorage for sushi (ironically, we don’t have much sushi in Homer, although we have an endless supply of halibut.)
PaulB took some incredible photos – many from the plane. Here’s the view from my house in Homer, which we’ve enjoyed most of the summer. After we landed in Anchorage for our sushi run, PaulW captured me kissing the ground – not because of pilot issues – but because the passenger is a weenie. And – if you wondered what my friendly neighborhood glacier looks like, here it is.