At Foundry Group, while we live and office in Boulder, Colorado, we invest all over the United States. In the last 18 months, we’ve invested in companies based in Seattle, New York, Boston, Los Angeles, San Francisco, and Colorado. My partners and I are regularly exploring new entrepreneurial communities, thinking about what makes them unique, and trying to figure out what makes them sustainable over the long term. Last week, Jason took a trip to Ann Arbor, Michigan – the home of his alma mater. He spent a couple of days talking to folks throughout the university and the community about entrepreneurship. He summarized his trip in his post titled Entrepreneurship in Ann Arbor, Michigan and Mark Maynard of the University of Michigan TTO wrote a comprehensive post on Jason’s talk titled Building an Entrepreneurial Community: Lessons from Boulder, CO.

Q109 is over. The numbers are starting to roll in. After all the gloom and doom at the end of 2008, I’m very pleased with the performance of most of the companies in our portfolio. As I mentioned the other day, some struggled, but many met or exceeded their Q109 plans, and several of them destroyed them (sandbaggers, how I love thee.) There is nothing easy about operating a young company in any environment. It’s especially difficult in a downturn (or a recession, or whatever you want to call this.) If you haven’t managed to turn off TV news, stop reading the newspaper, and are still listening to NPR instead of the XM Chill station in the morning, you are likely continuing to get whipped around emotionally. So are the people in your company that are listening to all this crap every day.

One of the neat things about business is that it runs in cycles. I’ve been involved in the software business since 1985 when I started my first company. Since then, I’ve seen numerous cycles with a wide range of amplitudes. I don’t try to time any of the cycles, the peaks, or the troughs; rather I just invest and work hard all the way through each of the cycles. Given the negative sentiment across many parts of the business universe (e.g. the NY Times headline this morning Jobless Rate Hits 8.5%; 663,000 Jobs Lost), I’ve been pleasantly surprised by the Q1 performance of many of the companies I’m an investor in. Several had record quarters, most made or beat their Q1 plan (obviously the easiest plan of the year to make since it’s usually baked near the beginning of the quarter), and a couple had extraordinary growth that surprised everyone. Some struggled, but when I look at the overall distribution of behavior across our entire portfolio, it was kind of what you’d expect from a typical economic environment versus one that is either distressed or bubbly.

Today, my partner Seth Levine, Eric Norlin, and I cooked up the idea to Pitch Brad and Seth at Glue. If you are an entrepreneur working in the area we define as Glue we’d love to spend some time with you at the Glue Conference. Here are the rules according to Eric: Register for Glue. (use “pitch1″ to take $100 off of the price.) Shoot me [enorlin AT mac.com] (or Brad) a paragraph describing what you wanna pitch. Brad and Seth will pick 6 startups. Your pitch will be 5 minutes (in a room with just them; no “big stage” pressure), and 5 minutes of honest feedback. If you register and don’t get picked, fear not — the guys have vowed to make themselves uber-available during Glue (for a hallway pitch). If you aren’t aware of the history of the Glue Conference and the Defrag Conference, they both came out of our desire at Foundry Group to participate in focused conferences around themes that we are currently investing in (Defrag emerged from the Implicit Web theme; Glue emerged from Glue theme.) We couldn’t find any conferences like this so we decided to try to create them. We got lucky and found Eric Norlin (or – more accurately – he found us) and he has turned out to be a master at putting these types of conferences together.

Eric Norlin, producer of the Defrag and Glue conferences, has a phenomenal rant up today titled An Open Letter to Technology Startup Marketers*.* We had an email exchange the other day about how self-limiting the phrase “I’m being cautious” is. I put it in the category of “I don’t want to think so I’m just going to defer any decision and judgment, which I’ll rationalize as being cautious rather than passive.”

I met with an entrepreneur yesterday that I hadn’t seen in a few years. I originally met with her about five years ago when she was starting her company. She’d been a very successful executive at a large company and had decided to jump into the entrepreneurial game and re-invent herself. Her business has grown nicely – and profitably – without having raised very much money. We mostly just caught up on how things have been going (we email back and forth periodically, but it had been a while since we had met in person.) After about ten minutes, she asked if she could tell me a story about the first time we met. Always game for a good story, I said sure. It goes something like this.

Several months ago my friend Ben Casnocha sent me an article from Boston.com titled How the city hurts your brain… And what you can do about it. The article starts out strong and continues all the way through. “Now scientists have begun to examine how the city affects the brain, and the results are chastening. Just being in an urban environment, they have found, impairs our basic mental processes. After spending a few minutes on a crowded city street, the brain is less able to hold things in memory, and suffers from reduced self-control. While it’s long been recognized that city life is exhausting — that’s why Picasso left Paris — this new research suggests that cities actually dull our thinking, sometimes dramatically so.”

From April 30 to May 2, the 10th annual Nantucket Conference is happening on Nantucket Island in Massachusetts. I haven’t been to a Nantucket Conference, but I’ve heard of it and have considered going in the past. This year Scott Kirsner invited me to be on a panel and I happily accepted as I was already going to be in Boston for the TechStars Boston Mentor Dinner on April 30th before heading to Cincinnati to run the Flying Pig Marathon on May 3rd. 

F3EL7-T3YL2-MBN5P-ZQI6R-YE8PI Ever type that into a pop up box on your computer when installing software? If not, you’ve never installed anything from Microsoft (or many other companies) – at least not legally. This morning I was copied on an email from my partner Ryan McIntyre to a company we are talking to about funding that said: “I use Pro Tools and other pro audio software regularly and since the SW is quite expensive, the SW vendors go to great lengths to use copy-protection, and most audio plugins and applications (and there are dozens) have some sort of authorization code scheme, ranging from friendly to downright byzantine. It drives me nuts, but my constant exposure to it means I’ve formed some opinions about what is “easy” when it comes to entering authorization codes. The easiest plug-ins (authorization-wise) in the audio world use alphabetical codes broken up into strings of words, so instead of the longs strings of numbers, you get long strings of words, which are much easier for a human to enter without a mistake. A couple code examples might be: HOUSE-BIRD-TRUCK-DRUM FLINT-TRUE-SWORD-CALL You get the idea. I’m assuming third-part auth-gen packages must exist to generate codes like these that give you a big enough address space yet also make guessing authorizations relatively difficult. And that you could relatively easily change your process at the manufacturer for associating MAC addresses with device IDs.”