I love origin stories. Some of them glorify entrepreneurship in a way that makes them challenging to parse, as the struggles of our heroines and heroes gets romanticized in a way that tastes sugary sweet. But, when they are written in first person, unedited, on a blog, they are often delicious in a tasty and fulfilling way.

Jud Valeski, the co-founder of Gnip, wrote a great one a few days ago. It’s titled How Did Gnip Get The Twitter Deal? and does a thorough job of telling the story from Jud’s perspective. If that’s all that was there, it’d be a solid origin story.

But then Doug Williams, who was on the Twitter side of the Gnip / Twitter origin story, weighs in with a comment that is the same length as Jud’s post. And now we get Doug’s view. Not the official Twitter view. Not the C7H5NO3S version that has been denuded of anything challenging and controversial.

The combination is delicious and worth reading. I lived it as an investor and only have two categories of things to add. The first is that the most important role of the investor in deals like this is to talk your team (in this case Jud and Rob) off the cliff. Or, more likely, to take the flamethrower out of their hands before they started spraying it on everyone in sheer frustration. The other is a few well timed phone calls to key people (in this case, Dick Costolo, who totally saw the value of the relationship but at the time was trying to navigate whatever the current version of Twitter dynamics were.)

The end of Jud’s post has two extremely important points in it. The first to play by the rules of your partner.

“This conflict between your product and the publisher, is real, and it can make or break you. On one hand, you want revenue, and if you break/bend the rules, you can get more of it. However, doing so puts you at odds with the publisher (arguably your bread and butter). Take your pick. We chose to play by the rules and were able to navigate to a successful partnership and outcome. We firmly believed that breaking/bending the rules would yield an incrementally small amount of revenue, and never actually let the business get as big as it could. Think about it this way, black markets exist, and always will, but they’re never as big as the open market. Pursue the open market, sure, it’s harder, but the rewards are bigger. If the only way you have a business is by breaking rules, stop what you’re doing and go do something else; that’s ultimately lame; explain that one to your kids.”

The other is what we called “Be Everywhere That Twitter Is.”

“We spent years cultivating relationships inside Twitter (from the CEO, which changed a few times during our efforts), to mid-level, to developers, to BD, to on and on and on). When we were at a conference and there was a Twitter person there, we elbowed our way to them to get a word in. When Twitter put on conferences, we were there. When Twitter wouldn’t answer the phone because we were that annoying gnat in the swarm, we backed off the calls until we had something significant to put in front of them (a new feature, a new business milestone). Partnership negotiation is a fine line between expressing your need for the other partnership, and illustrating your ability to be independent.“

And Doug, in his conclusion, reinforces the value of that approach.

“I’ll leave you with this final anecdote. While in the midst of the start of our initial term sheet negotiations with GNIP, my team was moved under a new executive. After bringing him up to speed, he told me he didn’t like the strategy and called it off. That day, he and I were to meet with Jud and push things forward. I had to break this news to Jud that the exec had pulled the plug and wouldn’t be at the meeting. It’s difficult to say who was more heartbroken at this point. In his patient and persistent way, Jud keep calling. He kept asking questions. He kept showing up at the office. We kept working on the term sheet and he motivated me to go to bat again. Again, we eventually got the nod. Luck, timing and patience paid off, but more than all kept Jud showing up. That is the ultimate lesson he taught me, one that I carry with me every day.”

There’s a lot of healthy and tasty juice in this origin story. Jud / Doug – thanks for putting it out there.

This morning, Mapbox announced a $52.55 million Series B financing. We’ve been on a wonderful ride with them ever since we led their first financing – a $10 million round – in October 2013.

Let’s start with the simple stuff. My partners and I have a massive founder crush on Eric Gundersen, the CEO of Mapbox. My partner Ryan McIntyre was introduced to Eric by another CEO we’ve backed, Zack Rosen of Pantheon. I remember Ryan raving about Eric and pushing me to squeeze in a meeting before I had to run out of town one day.

Zack is also a total star who I connected with immediately so his referral carried a lot of weight. I first met Eric in the summer of 2013 on a trip he took to Boulder to buy imagery from a satellite company in the area. I remember feeling super rushed at the end of the day and wasn’t in the mindset to sit through a presentation. Eric clued on in this immediately, or maybe Ryan warned him, so rather than drag me through slides Eric just started showing me stuff that Mapbox did.

He started with an algorithm that made clouds go away. He then launched into a custom map design tool which Foursquare had just used to switch out Google Maps. By this point my jaw was on the floor. Words kept tumbling out of Eric’s mouth and amazing maps kept appearing on our large conference room monitor. I looked over at Ryan and he gave me that “yup – I wasn’t kidding – this is fucking awesome, isn’t it” look that we share between ourselves when we see something beautiful, incredibly hard to do, presented by an entrepreneur who is completely and totally obsessed by what he is doing.

I knew Gnip was doing some Twitter data visualizations with Mapbox, so I asked Jud Valeski, the technical co-founder of Gnip, to see what he thought. Jud responded with something akin to “Mapbox is amazing.”

Even better, Eric and team had been at it for several years bootstrapping development and had just decided to raise their first outside capital. They had done this amazing amount of stuff with no investment. No hype. No bullshit. Just crazy deep tech abilities.

In 2013, the mapping space was in yet another wave of turmoil. Waze had been snatched up by Google for over a billion dollars just a few months earlier, further consolidating a space dominated by a few giants. Those giants were investing billions a year in maps. And we were still getting over our fresh scars that confirmed how hard the geo technology was after our failed investment in SimpleGeo (acquired by Urban Airship). Mobius, our prior firm, had been a long time investor in deCarta (now owned by Uber) and had been mostly recapped out of the investment after years of struggle. So mapping didn’t feel natural to us.

But in 15 minutes of watching and listening to Eric, I realized something Ryan already knew. Mapbox is an API company, not a mapping company. The map simply was the output of the API. And, like the best API companies we’ve been involved in, such as Gnip (now part of Twitter), it was right at the intersection of our Glue theme and our Protocol theme.

Seth and Jason had similar reactions. So we invested. Since then Eric and team have built an incredible company that is the foundational building block for any developer, large and small, who wants to include mapping in their product. In case there is any question about scale, MapQuest, which still has 40 million active users, confirmed it was switching all of their maps to Mapbox.

Eric and gang – we are buckled up and ready for the next part of the ride!

Following is a guest post from Zack Rosen at Pantheon about his experience shadowing Jud Valeski, founder and then-CEO of Gnip for a day in 2012.

Behind the stories of most first-time venture-backed CEOs building startups and attacking markets at breakneck speed, there is usually a tight network of mentors and peers showing them the ropes of company building. That’s certainly been my experience at Pantheon—we likely would not exist if not for the crucial help of James Lindenbaum, Adam Gross, Steve Anderson, Ryan McIntyre, Brad Feld, and all of the advisors who have assisted us on our journey.

However, I’ve found there is a hard limit to how much you can learn about building a company from speaking with advisors. Before deciding on how to go about building your company, it is critical to build an understanding of other companies’ paths to success and learning from their mistakes along the way. I’ve found to really do that, often times you need to be there—out of your own office and physically present in theirs—to see with your own eyes how a company actually works.

That is the goal of CEO shadowing: to put you in the shoes of another CEO, let you observe, ask questions, and form a rich and detailed mental model of how another company operates. I’ve done it twice so far, and both times have learned more in a day of shadowing than I do in months of working sessions with mentors and peers.

My first time CEO Shadowing: Jud at Gnip in 2012

The first CEO I shadowed was Jud, who then ran Gnip which has since been acquired by Twitter. Foundry Group is a mutual investor of ours, and Jud and I met at an event in Boulder that they organized for portfolio CEOs.

In Boulder I ran around asking a number of CEOs and Foundry Partners for company management advice—how to run one-on-ones, structure executive meetings, manage my board, etc. Three times in row an answer to my question was prefaced by:

“You should really ask Jud this question because they just did this at Gnip and did a fabulous job.”

We were a 20-person company at the time, and Gnip had hit its stride and was growing very quickly. They were 50, soon to be 100—about a year and a half ahead of us in terms of scale. Gnip was known for being a very well-run company.

I cornered Jud at the event and soaked up as much data from him as I could. Then I went home, and realized how much more I really needed to learn from him and Gnip. The only way I thought I could really get answers to my questions was to go to Gnip and observe how Jud and his team ran the company.

So I sent this email:

“Can I fly to Boulder and shadow you for a day, and be a fly on the wall in yours and your team’s meetings?”

This was his response a couple of hours later:

*****“***Fun! You bet! Only question is timing. Thoughts?”

Jud invited me to attend his management meetings and let me interview anyone on his entire team at will. In one day on-site I was a part of his exec kick-off meeting, attended a company product strategy meeting, and interviewed two executives, two engineers, and individuals from their sales and marketing team. I took notes, asked questions, and tried to fit in. I approached it like a journalist whose goal it was to write a profile on how Gnip, the company, worked.

I found the Gnip team to be incredibly focused and busy—while still gracious, helpful, and happy to talk at the same time.

What I learned

At the time I shadowed Jud, Pantheon had a very early executive team and not much in terms of process or structure. We operated on tribal knowledge and had the benefit that everyone implicitly knew what the others were doing. We knew we needed to build our team and create more structure, but how were we going to do that without screwing up what was working so naturally?

What I learned at Gnip was:

1. It was absolutely possible to build a 100-person company that operated as efficiently, or even more efficiently, than our 20-person company.

2. Process and structure could be additive to company culture, because it forces you to get specific about implicit assumptions that are so important to a company’s future (values, strategy, management philosophy, etc.)

3. There is good management and bad management, and you need effective leadership and stiff penalties when you fail to lead. It was up to us to build the company right. Gnip was built right, and it worked.

On top of that, I learned many, many small tactical things—from how to structure the agenda of an executive meeting, to how to arrange teams and desks, to optimizing how the people worked together.

But the tactics were built on the big learnings, which were important for this reason: seeing how Gnip worked gave me confidence to trust my gut in building my company. To be clear, Pantheon is built very differently from Gnip. Many of the things that worked for them won’t work for us—we picked our own path. But there are so many internal obstacles to building structure in a startup as it undergoes massive change, and to know that it could work because I saw it work enabled to me to keep my head down and keep working towards my goal without getting blown off course.

Visiting Gnip in 2012 was like visiting the hopeful, successful, parallel future to Pantheon. It was like getting to travel to a foreign, and more advanced planet, and then getting to return and apply what I learned.

Want to do this? Here are my suggestions for how to get the most out of CEO shadowing:

• Find a CEO at a company that is approximately 1-2 years ahead of yours (if you are $1M ARR, then $5-10M; if you are $10M, then $30-$60M). Ideally this is a CEO you admire, and one you already have a relationship with.
• Confidentiality is incredibly important. You should probably sign an NDA.
• Book a full day in the office with the CEO. I highly recommend visiting the day the CEO does the most “management” in a workweek—when executive meetings, planning, strategy, etc are scheduled.
• Get yourself invited to everything. Everywhere the CEO goes, you go. This requires the CEO to warn their company ahead of time and get the OK of their execs and team members.
• Spend half of your time observing in meetings, and half in one-on-ones with their team.
• Meet one-on-one with execs, managers, and individual contributors, ideally from numerous different teams.
• Ahead of time, prepare a list of questions with the CEO that you can ask of their team members, or research topics you can report back on that CEO wants to know (while respecting anonymity). Example questions:
  • “What do the values of this company?”
  • “What are the company priorities? Your team’s priorities? Your priorities?”
  • “What did this company get right that has enabled it to succeed?”
• Take copious notes during all meetings and interactions. Anonymize feedback and send a full report of what you learned back to the CEO (this can be partial repayment for letting you shadow them).
• Keep asking questions and observing until you feel like you could give a valuable five-minute presentation on “how the company works” to your team and the CEO you are shadowing.

Asking to shadow a CEO of a company is a big ask. It’s out of the norm, and it takes time from their team. You can repay some of that by offering to share useful observation or doing outside research as part of your time there, but at the end of the day this may be the ultimate “pay it forward” generous act the startup community is willing to take on for fellow CEOs.

Investors: I believe this could be one of the most valuable things you could help facilitate for your portfolio company CEOs. If anyone else has shadowed a CEO, I’d love to hear how you approached it and how well it worked for you.

Foundry Group has now been around for over seven years and I’ve been working with my partners for 14 years. We’ve started to develop some traditions.

One of my favorites is exit gifts. When a company has an exit that generates a return for us, we give a gift to the partner who served on the board. These gifts are generally tuned to what the partner loves such as musical stuff for Ryan and Jason, bike stuff for Seth, and art for me.  They are modest, but very thoughtful and something the partner wouldn’t have just gone out and done for himself. They are often self referential, such as the Makerbot sculpture of me created by an artist and printed on a Makerbot after Stratasys acquired MakerBot.

A few weeks ago Seth, Jason, and Ryan corralled me in our small conference room. Whenever they do this, I’m never sure if it’s going to be a happy thing or an intervention. Ryan was holding the following 2′ x 3′ framed print.

To get a better sense of this masterpiece, let’s zoom in on the G and the N.

This is a list of every tweet I made at @bfeld from the day of our investment in Gnip to the day that Twitter acquired Gnip. This first one is from 2/29/08.

The last batch is from 4/14.

Ryan told me that Gnip was used to generate the tweet list for the poster. And Postertext was used to print it. Thanks guys – this one made me smile a huge smile. I love this tradition.

A couple of weeks ago, I wrote about an event a bunch of us in the Boulder startup community are putting together called #BoulderWin, a celebration for the sale of Gnip to Twitter. Instead of having a secretive closing dinner for a small number of folks, we are going to have a big party to welcome Twitter to town.

#BoulderWin is happening on June 4th from 7pm – 10pm at the Boulder Theater.

You must register to attend and tickets cost $20 per person. All of the proceeds are going to Entrepreneurs Foundation of Colorado. There are a limited number of tickets available and it’s first come first served.

In addition to the proceeds from the sales of the tickets, I’ll be matching the $4,000 with a personal gift of $4,000 from me and my wife Amy Batchelor to the Entrepreneurs Foundation of Colorado. And, my partners at Foundry Group are sponsoring the event, along with a bunch of other local companies including:

• Cooley LLP
• Dfuzr Industries
• Galvanize
• KKO
• SVB
• Dfine Branding
• dojo4
• EKS&H
• SendGrid

These companies represent a big part of what makes Boulder such a great place for entrepreneurs.  Thanks for everything you do!

Once again, you can get your tickets here.

Whenever a company gets acquired or goes public, there is often a fancy closing dinner. It’s usually at a nice restaurant in a private room. The wine is expensive and the toasts are many. The people in the room are the founders of the company, the executives, the board members, other major investors, the lawyers who worked on the deal, and the investment bankers – if any were involved.

I’ve been to more of these than I can remember. They were fun at first, but now they feel strange to me. The group celebrating is often a very small subset of the people who were involved in helping the company reach its success. I can have a exotic, over the top dinner with friends anytime I want, so it often feels like a burden to me to do yet another fancy dinner. If I’ve been deeply involved in a company, I always look around the room and notice at least one key person missing. Enough time has passed that the celebration seems a little stale.

As Boulder Startup Week kicks off today, I woke up thinking about how many people lead, and contribute to, the Boulder Startup Community. This magic of this place is not top down control, a singular leader, or a grand plan. Instead, it’s the organic beauty of a messy network of people, all who are contributing their own talents and energy, in an ongoing, continuous effort around entrepreneurship.

Kind of like how Twitter grows and evolves. Twitter’s acquisition of Gnip is a big deal for Boulder as it brings one of the most interesting and creative companies in the world to our town as Gnip will serve as the foundation for the first Twitter office in Colorado. This is a #BoulderWin.

So, instead of having a closed, inward facing closing dinner for Twitter’s acquisition of Gnip, a bunch of us in the Boulder tech community are throwing a celebration on the evening of June 4 at the Boulder Theater to welcome Twitter to town. We’ll have food, drinks, entertainment, and lots of mingling with folks in the Boulder Startup Community.

Tickets will be available for purchase the week of May 19 with proceeds going to Entrepreneurs Foundation of Colorado. And, as Gnip was a member of the Entrepreneurs Foundation of Colorado, there will be a special gift that night.

Come celebrate with me the hard work of the 90 people who helped make Gnip a reality.

FSA (Feld Service Announcement) – my version of a “public service announcement”: Moz is on the hunt for a VP of UX and Design. This role is one of our most crucial hires this year. The ideal candidate will come to us with experience and examples to show of very complex, technical projects that s/he made simple and fun. I would love for you to share this job description with your network or if you have anyone in mind I would love for you to send them our way.

Yeah, it’s been kind of busy the last week. Congrats to my friends at Gnip on becoming part of the Twitter flock. I have a great origin story about the founding of Gnip and the first few years for some point in the future. But for now, I’m just going to say to everyone involved “y’all are awesome.”

Last week Manu Kumar had a spectacular post titled The New Venture Landscape. While it’s bay area centric, I especially agree with the punch line:

Pre-Seed is the new Seed. (~$500K used for building team and initial product/prototype)
Seed is the new Series A. (~$2M used get for building product, establishing product-market fit and early revenue)
Series A is the new Series B. (~6M-$15M used to scale customer acquisition and revenue)
Series B is the new Series C.
Series C/D is the new Mezzanine

Today at 5pm I’m doing a fireside chat with Eliot Peper, the author of Uncommon Stock, the first book published by FG Press. Join us for some virtual fun and a discussion about fiction, books, and startups.

And – if you miss that, Eliot is doing another event on Friday at 5pm at Spark Boulder.

I’ve written before about hiring for cultural fit, and about the importance of prioritizing cultural fit over competence when hiring at startups. I started thinking about it again when I saw this Dilbert comic, because it pokes fun at the culture of startups and their propensity only to hire people who fit into them. But what are we talking about when we talk about cultural fit, anyway?

You’re probably familiar with some of the stereotypes around startup culture (free massages and dry cleaning, craft beer, cool art on the walls and dogs at the office, pulling all-nighters to ship on time) and the kinds of people who work at startups (according to Dilbert, “self-conscious hipster” types with “an earring and headphones.”) Stereotypes like these give you a picture of what startup culture might look like to an outsider, but they don’t reflect the intrinsic values that define startup cultures.

Gnip CEO Chris Moody explains this distinction really well when he talks about values vs. vibe. He defines values as “the guiding principles or code-of-conduct” that inform a company’s daily operations, whereas vibe is “the emotional side of the company … highly influenced by outside factors.” To figure out whether an aspect of your startup culture is a value, he says, try asking yourself these questions:

–      Is this aspect of the company important to our long-term success?

–      Does this aspect need to be maintained forever and is it sustainable?

–      Does this aspect apply to all areas of the company and to all employees?

–      Will establishing this aspect help us make important decisions in the future?

So, for example: riding your fixi to the office or playing foosball between coding sessions are vibes. Treating people with respect or being passionate about your work? Those are values.

Your company values should be clear, accessible, and pervasive – take, for example, Zappos’ 10 core values. Having clearly defined values is important because they drive your company culture, not the other way around. It’s also important when you’re hiring for cultural fit, because without clear company values you run the risk of making poor hiring decisions: hiring people because they look or act or talk like you, and not hiring people because they don’t.

Here’s an example: Businessweek says hiring managers are now asking candidates questions like, What’s your favorite movie? Or, What’s the last book you read for fun? If you’re asking interview questions like these at your startup, you need to make sure you’re screening for values and not for vibe. Just sharing your love of The Big Lebowski doesn’t make someone a good cultural fit for your company: in fact, it’s often the people who give unexpected answers who end up being your company’s most creative problem-solvers.

I chair the board of directors for the National Center for Women & IT (NCWIT), whose Entrepreneurial Alliance works with startups to help them recruit and retain more women in tech roles. There’s strong ROI for including more women on technical teams: women improve collective intelligence, make startups more capital-efficient, and bring the perspectives of half the population. But if you’re a “dude brew” startup, you may not even know why you don’t hire more technical women, and you might need help from NCWIT removing gender bias from its portfolio companies’ job ads.

Gnip recently told NCWIT that they added three women to its engineering team. They credited this in part because the VP of Engineering, Greg Greenstreet, attended every local women-in-tech networking event, recruited on campus, and talked to as many female candidates as possible. But fundamentally they succeeded in hiring more women because, like Etsy, they made diversity a value. Gnip assigned strategy, money, and resources to their recruiting efforts, and factored diversity into evaluations of cultural fit.

Every startup is going to have a company culture, by design or by default, so you might as well design yours with values that attract and keep the best possible talent. Once you’ve distinguished between your values and your vibe, hiring for cultural fit won’t just be easier; it will give you better – and likely more diverse – employees.

If you’re interested in more information about joining NCWIT’s group of startups, let me know.

Our investment in Gnip keeps getting better and better.  While the company is growing like crazy and the financial results would make any investor giddy, what really gets me excited is to see how Gnip is disrupting how business decisions are made.  Gnip believes that someday every significant business decision will include social data as an input and they’ve been working hard for the last five years to make this vision a reality.

Last week, Gnip made another significant step forward towards their ultimate vision. Foursquare and Gnip just announced an exclusive partnership that allows Gnip to provide full coverage of anonymized Foursquare check-in data to Gnip’s extensive network of customers.  Gnip is delivering over four billion social activities to their customers every day and their distribution network is delivering insights and analytics to over 95% of the Fortune 500.   As much progress as they have made, location-based activity is one area of social data where the ecosystem has lacked significant coverage.  Companies wanting to analyze geo-based activities around locations have been begging for more location-based activity.  With the partnership between Foursquare and Gnip, the entire social data ecosystem gets a big win with this key signal of physical presence.

I’ve been a user and believer in Foursquare from the earliest days. It will be fascinating to see what types of analytics are built upon this new data.  Both Foursquare and Gnip discuss some examples in their blog posts. It doesn’t take much imagination to think about how businesses can capitalize on this unique data set.  And with this partnership, we no longer have to imagine!

Following is a guest post from Chris Moody. Chris is president and COO of Gnip, one of the silent killers in our portfolio. Once the main stream tech press starts noticing Gnip, they will be blown away at how big they got in such a short period of time by just executing. Chris is a huge part of this – he joined Gnip when they were 10 people and has been instrumental in working with Jud Valeski, Gnip’s founder and CEO, to build a mind blowing team, business, and market leadership position.

Following is a great email Chris sent me Friday night in advance of the Foundry Group “Scaling Your Company Conference”  which we are having this week for CEOs of companies we are investors in that are on the path from 50 to 500 people.

Startups that experience success are typically built upon a strong foundation of trust among the early founders/employees. This trust has been solidified through long days/nights in small offices working on hard problems together.  The amazing thing is that the founders don’t always realize that their company is even operating under an umbrella of trust or that trust is one of their core values.  Instead, they just know that it feels easy to make decisions and to get shit done.

When companies try to scale, one of the biggest mistakes they make is trying to replace trust with process.  This is rarely a conscious decision, it just feels necessary to add new rules in order to grow.  After all, there are a lot of new people coming into the company and it isn’t clear who of the new people can be trusted yet.

A startup obviously needs to add process in order to scale, but if you replace trust with process, you’ll rip the heart right out of your company.   When adding processes, ask yourself the following questions:

• Does this new process help us go faster?
• Does this new process help us be more efficient?

If the answer to these questions is “yes” you are off to a great start.

Now ask yourself “Are we adding this process because we don’t trust people to make decisions?”  If the answer to this question even has a hint of “maybe” you need to stop and really consider the cost of that process.

Replacing trust with process is like a cancer that will spread quickly and silently throughout the company.  One day you’ll wake up and think “this place doesn’t feel special any more” or ask yourself “why is it so hard for us to get stuff done.”

Trust could be one of your most valuable company assets.  As a leader, you need to fight like hell to protect it.  If you are successful protecting trust, you’ll actually grow much faster and you’ll still have a place where people love working.

I’ve seen trust work at a 700 person company.  Trust can scale.

I’ve written a lot in the last year about how fast Gnip is growing and how they continue to lead their industry. Many of Gnip‘s customers and partners are in the bay area and they have decided to begin adding people in San Francisco to better support those clients.

They’ve just posted their first position in San Francisco to help manage and grow existing customers. If you have the appropriate skills and want to join a truly incredible company, I encourage you to apply.

Today’s guest post from Chris Moody, the COO of Gnip, follows on the heels of the amazing Big Boulder event that Gnip put on last Thursday and Friday. To get a feel for some of the speakers, take a look at the following blog posts summarizing talks from leaders of Tumblr, Disqus, Facebook, Klout, LinkedIn, StockTwits, GetGlue, Get Satisfaction, and Twitter.

• Transition at a Massive Scale with Ken Little of Tumblr
• From Monologue to Dialogue with Daniel Ha and Ro Gupta of Disqus
• Measuring Engagement on Facebook with Sean Bruich
• Measuring Influence Online with Joe Fernandez and Matt Thomson of Klout
• Data Science at LinkedIn with Yael Garten
• Industry-Focused Social Networks with Howard Lindzon of StockTwits
• Distributed vs. Centralized Conversations with Jesse Burros of GetGlue 
• Engaging with Customers Online with Wendy Lea of Get Satisfaction
• Creating the Social Data Ecosystem with Ryan Sarver and Doug Williams of Twitter 

The event was fantastic, but Chris sent out a powerful email to everyone at Gnip on Saturday that basically said “awesome job on Big Boulder – our work is just beginning.” For a more detailed version, and some thoughts on why The Work Begins When The Milestone Ends, I now hand off the keyboard to Chris.

We’ve just finished up Big Boulder, the first ever conference dedicated to social data.   By all accounts, the attendees and the presenters had a great experience. The Gnip team is flying high from all the exciting conversations and the positive feedback.   After countless hours of planning, hard work, and sleepless nights, it is very tempting to kick back and relax. There is a strong natural pull to get back into a normal workflow. But, we can’t relax and we won’t.  Here’s why.

As a company it is important to recognize the difference between a milestone and a meaningful business result.  Although it took us almost nine months to plan the event, Big Boulder is really just a milestone.   In this particular case, it is actually an early milestone.    The real results will likely begin months from now.   All too often startups confuse milestones for results.   This mistake can be deadly.

Milestones Are Not Results

Milestones represent progress towards a business result.  Examples of milestones that are commonly mistaken for results include:

Getting Funded.  Having someone make an early investment in your company is positive affirmation that at least one person (and perhaps many) believe in what you are trying to accomplish.  But, the results will come based upon how effectively you spend the money; build your team/product, etc.  Chris Sacca has tweeted a few times that he doesn’t understand why startups ever announce funding.  Although I haven’t heard him explain his tweets, I assume he is making the point that funding isn’t a meaningful business result so it doesn’t make sense to announce the news to the world.

Signing a partnership.  Getting a strategic partnership deal signed can take lots of hard work and months/years to accomplish.  Once a partnership deal is finally signed, a big announcement usually follows.  The team may celebrate because all the hard work has finally paid off.  But, the obvious mistake is thinking the hard work has paid off.  Getting the deal signed is a major milestone, but the results will likely be based upon the amount of effort your team puts in to the partnership after the deal is signed.  I’ve never experienced a successful partnership that just worked after the deal was signed.  Partnerships typically take a tremendous amount of ongoing work in order to get meaningful results.

Releasing a new feature.   Your team has worked many late nights getting a new killer feature in to the product.  You finally get the release out the door and a nice article runs in TechCrunch the next day.  The resulting coverage leads to your highest site traffic in a year.   But, have you really accomplished any business results yet?  Often the results will come after lots of customer education, usage analysis, or feature iterations.   If no customers use the new feature, have you really accomplished anything?

Is it okay to celebrate milestones?  Absolutely! Blow off steam for a half-day or a long celebratory night.  Take the time to recognize the team’s efforts and to thank them for their hard work.   But, also use that moment to remind everyone that the true benefits will happen based upon what you do next.

Results Increase Value

Unlike milestones, results have a direct impact on the value of the company.  Results also vary dramatically based upon different business models.   Examples of common results include: increasing monthly recurring revenue, decreasing customer turnover, lowering cost of goods sold (increasing gross margin).

Announcing a new feature is a milestone because it adds no value to the company.  On the other hand, having customers actually adopt a new feature might increase customer retention, which could be a meaningful business result.

The Work Begins When X Ends

When I worked at Aquent, there was a point in time when we were doing lots of tradeshows. We noticed a pattern of team members taking months to prepare for an event and then returning from the tradeshow declaring the event a success.   They would put a stack of business cards on their desk and spend the next several weeks digging out from the backlog of normal work stuff.  The business cards would begin to collect dust and the hot leads from the show would eventually become too cold to be useful.

In order to avoid this phenomenon, someone coined the expression “the work begins when the tradeshow ends”.  This simple statement had a big impact on the way that I think about milestones versus results.  Since that time, I’ve used the concept of this phrase hundreds of times to remind my team and myself that a particular milestone isn’t a result.    You can substitute the word “tradeshow” for whatever milestone your team has recently achieved to help maintain focus.

The most recent example?  The work begins when Big Boulder ends.

This week I’ll be kicking off the second day of Big Boulder with a talk about how the Boulder startup community has come to be what it is today. Big Boulder is a conference on social data held by our portfolio company Gnip.

Last year Chris Moody wrote a blog post about how companies should pursue thought leadership. To me, Big Boulder is the embodiment of this. Gnip believes that social data will change the world. To that end, they’ve brought together some of the biggest players from social media publishers including Facebook, Twitter, Klout, LinkedIn, StockTwits, Disqus, Tumblr and WordPress. They’ve put together a killer agenda talking about the many uses of social data and how publishers are thinking about it and what is enabling people to do.

Part of Boulder’s ability to grow as a startup community is our ability to bring high-level events to Boulder. To that end, Foundry Group has worked hard to bring and keep Defrag and Glue in Boulder. We’re excited to have Big Boulder as another high-profile event attracting people to our city. This affords more people to see everything Boulder has to offer a startup community and for our community to interact with attendees. I know that some Big Boulder speakers like Daniel Ha of Disqus are also sticking around to speak to the TechStars teams.

If you’ll be at the conference, please come and say hi.

So far I’m pleased with my shift to Maker Mode this summer.  I’ve managed to get in a solid four hours of writing on my Startup Communities book each day and will have a full draft to circulate to a small group of people on Saturday. I chose deliberately to skip TechStars New York Demo Day (which looks like it went great) this year, which was a hard choice for me but I just didn’t want to break the flow of what I’m doing. And I’m still running on inbox zero and – other than physical proximity – haven’t heard any concerns about my responsiveness or availability. As a bonus, I’m getting to spend 24 hours a day (except when I’m out running) with my amazing wife Amy.

Yesterday I saw a post from Gnip titled You Are What You Do. Gnip is one of the companies we’ve invested in that I refer to as a Silent Killers – they are building an amazing company by just doing things that customers care about, not hyping themselves, and delivering what they say they are going to deliver, ahead of and beyond expectations. No hype – just substance – and execution.

This was coincidentally followed a few minutes later by an email exchange between Ben Huh (Cheezburger CEO) and Rand Fishkin (SEOMoz CEO). Rand and SEOMoz run on a set of principles called TAGFEE (Transparent, Authentic, Generous, Fun, Empathetic, Exceptional) and if you want to see this in action, take a look at the post Rand wrote recently about the financing we led titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future.

Ben (to:Rand, Brad): Just a random thought… Maybe I don’t have the balls to do it, maybe I just think that I want to run my biz differently, but the more I do this, the more I converge on TAGFEE. Thanks for putting it out there in the world.

Brad (to:Ben, Rand): I am 100% convinced TAGFEE is right. It’s so unbelievably liberating. 

Rand (to:Ben, Brad): This email put a huge smile on my face. That said, it’s fucking hard. So hard I can barely believe it. Being TAGFEE yourself when there’s always pressure not to sucks bad enough. But working with a large team and getting managers and individual contributors to act this way (and figure out when/where/how/whether it’s being broken) is the toughest challenge I’ve ever had. Thankfully, it’s incredibly rewarding, too. Oh – and there’s a missing “H” in TAGFEE. For humility. In fact, empathy and humility in potential hires are the best predictors that they’re going to fit with our team and be TAGFEE.

In contrast, I got an email from a VC earlier this week who said “aren’t you worried that one of your LPs will see your post about spending the summer at your place in Keystone?” My immediate reaction was to point him to TAGFEE and say that we try to be 100% TAGFEE with our LPs so I hope they see what I’m doing and appreciate why I’m doing it. I know unambiguously what my job for my LPs is – they give me a box of money and my job is to give them back – over time – a much bigger box full of money. I’m never confused this and I always try to do it in a way that maximizes the size of the box I give them back.

If you line up You Are What You Do, TAGFEE, and Silent Killers you start to get a feel for the type of entrepreneurs we love to work with. An awesome part of it is watching them learn from each other and learning from what they are learning. It informs everything I’m thinking about and the last 24 hours once again reinforced for me the power of TAGFEE and just executing.

Chris Moody, president and COO of Gnip, is back with a guest post in his Moody on Management series. Following are Chris’ thoughts on negotiating compensation with a prospective employee. Enjoy and comment freely!

In my last post, I provided a few tips for job candidates when interviewing at a startup.  This week I wanted to cover a simple process for hiring managers to follow when communicating with candidates about salary requirements.

There is the old saying that people spend more time planning their vacation than they spend planning their retirement.  I’ve found the same concept sometimes applies to job candidates when thinking about their compensation requirements.  As the hiring manager, you need to ensure that a candidate has fully considered their compensation needs before you make an offer.  Over the years, I’ve refined a simple and effective approach to facilitating this discussion.  I’ve used this technique countless times with great results.  The process starts with an email to the candidate:

“Dear Candidate,

From a skills and values standpoint, it seems like we are both excited about the possibility of you joining our company.  If you agree, the next step in the process from my perspective is to determine if we are aligned from a compensation standpoint.  As such, it would be helpful to get the following information from you:

– Current compensation.  Please breakout your base salary from any variable compensation if applicable.

– Your view of your current compensation as it relates to your next opportunity.  It is particularly helpful if you provide this feedback by selecting from either

a) I believe I’m fairly compensated and would anticipate making the same salary at my next opportunity

b) I’d be willing to take less for the right opportunity

c) I feel I’m currently under valued and looking for an increase of $x in order to be excited about my next opportunity.

If it works for you, I’d prefer to have this communication via email.  Over time I’ve found that putting this stuff in writing helps people think about it more before responding.

Love,

Chris”

Of course there are no right or wrong answers.  The goal here is simply to get a clear understanding of how the candidate is thinking about their future compensation by using their current compensation as a frame of reference.   Best case, the candidate’s expectations align with yours and the offer moves forward with a high probability of success.  Worst case your expectations don’t align but you now have a thoughtful starting point for negotiations if you still want to move forward with an offer.

A couple of additional points:

1. Even if the candidate has expressed salary requirements during the screening process or during your discussions, I strongly recommend you have this written conversation as the final step before you make an offer.  For example, perhaps your conversations along the way changed their perspective on salary requirements for the position.

2. The key to this approach is to do this communication in writing.  I know it can seem silly or impersonal, but it makes a huge difference in terms of requiring people to give thoughtful answers instead of answering on the spot.

Before using this approach I had more than a few occasions where candidates indicated verbally that they wanted $x, we offered $x, and then they responded with “I was thinking about it more and I really need $y to feel good about joining”.  Once you hit this situation, it puts both parties in an awkward position and it can be hard to recover.  You can avoid this potential pitfall with one simple email.

Oh, by the way, Gnip is hiring!

My long time friend Chris Moody, president and COO of Gnip, has offered to write some guest posts on management – we’ll call the series Moody on Management. In addition to being an outstanding early stage / high growth executive, Chris has made a study of management in startups and is extremely thoughtful about what does and doesn’t work.

His first post is aimed at anyone looking to get a job in a startup and talks about how to be effective at interviewing for a job. Feel free to weigh in if you have other “Stop, Don’t, Nevers” or “Pleases”

I love interviewing people to work at Gnip.  Unless I’m having a really crappy day, I enter each interview full of hope and optimism.  I’ve done countless interviews in the last 20+ years and I can easily slip into autopilot mode if I’m not careful.  In order to avoid this trap, I mentally prepare by reminding myself “today could be the day I’ll meet the next great team member.” I’ve found this mental pep talk helps remind me that there is no better use of my time than investing in the interviewing process.  In other words, the next interview could be a company game changer and I need to be 100% engaged.

Most interviews don’t directly lead to someone joining our company.  Often the person doesn’t have the right skills or experience.  There are plenty of cases where it becomes clear to the candidate that we can’t provide them an opportunity that meets their interest/needs.  Both of these outcomes are normal and healthy.  Unfortunately, I often find another outcome can occur which is frustrating and deflating.  This situation occurs all too often when a person is so poor at interviewing that we’re unable to determine if there is a potential match.  I’ll invest up to an hour in an interview trying to peel back the layers.   However, I’m frequently unable to get to a substantive layer of discussion that will help both parties determine if there is a potential match.   I’ll leave these interviews thinking, “Maybe that person was great, I’ll never know”.   Over time, I’ve started to referring to these as the “who knows?” interviews.

The good news is that I think job candidates can follow some simple guidelines when interviewing at a startup that will help avoid the “who knows?”

Stop, Don’t, Never

• Stop selling and start engaging.  In order for this to work, we both have to determine if there is a match.   The best way for us to determine the match is to have a thoughtful/engaging discussion.   If the interview process only involves me asking questions and you giving answers that you think will impress me, we’re going to waste a perfectly good hour.

• Don’t talk in sound bites and buzz words.  You might think they make you sound smart, but they don’t because they lack substance.  We need to have a real discussion.   If you find yourself rehearsing answers before the interview even starts, we’re almost certainly going to have an unproductive meeting.  Speak from your heart and your experience not from a script.

• Don’t agree with everything I say. I’m wrong… A LOT.  I once went on an all beer and water diet for a week.   Challenge me.   Startups thrive when each person hired is smarter than the person hiring them.  If you agree with everything I say in the interview, I’m left wondering how are you going to contribute when we are working together trying to solve tough problems.

• Avoid talking about past individual results.  I know this sounds unconventional, but as the interviewer is often very hard to contextualize how these results might translate to our business.  I’m much more interested in discovering what you learned in your last job that we might leverage at our company.  For example, telling me you increased sales by 300% isn’t that helpful.  Telling me how you learned to handle customer objections around price could prove to be very useful.

Please

• Be honest

• Ask lots of questions about stuff that matters to you.  Reviewing a company’s web site before the interview will give you some reasonable background. But, I can assure you that no company web site answers all the questions about a business.    It is often the case that an interviewer can learn more about the way someone thinks from the questions they ask than from the answers they give.

• Ask tough questions.  You are considering investing a huge portion of your waking hours at our company.   Think about the risks and the downsides of the company or the role and freely express any concerns.

• Figure out if our company is a good culture and values fit for you by asking tough situational questions based upon your past experiences.  Questions like “Can you give me an example of how the company handled a situation where a customer had a bad experience with the product?” can be very revealing about how the company acts/thinks.

Ask CEOs of successful startups about their biggest challenge and they’ll often cite the inability to hire great people.  My theory is there are plenty of great people, but many are just terrible at interviewing.  Hopefully these few tips help lead to more great matches down the road.  By the way, Gnip is hiring!

There is this magical moment that happens when a startup finally puts the key components together to build a successful business.  After months or years of iterating and pivoting, they finally have the right product for the right market at the right price.  At this point, the company has to shift gears and change their mindset a little.  They need to stop looking for gold and start mining as fast as possible.  My friend Chris Moody, President/COO at Gnip, refers to this as the execution phase of a business and there is no better example of execution in our current portfolio than the team at Gnip.

After 2.5 years of product development and varying business approaches, Gnip found their magic moment about a year and half ago.  Since that time they have been heads down executing and the results have been incredible.

Today Gnip announced an exclusive partnership with Tumblr.  This monumental partnership will give Gnip’s customers full coverage of an amazing source of social data that has never been available.  With 50 million new posts per day and 15 billion page views per month, Tumblr offers a huge new data stream for companies to analyze and use to drive business decisions.  The fact that businesses will be able to receive this data via the same reliable and scalable Gnip infrastructure that currently delivers Twitter and other important data sources is a major win for the ever growing social data economy.

The Tumblr partnership is the kind of announcement that companies plan their entire year around.  However, in Gnip’s case, it is just the latest activity in an impressive series of events that shows the Gnip team knows how to get shit done.  It is only April and Gnip has already done the following in 2012:

• In January, Gnip announced an exclusive partnership with Automattic to provide firehose streams of WordPress.com and WordPress.org data to the enterprise.  This partnership increased the amount of real-time blog data available for business analysis by 70% overnight.
• In February, Gnip announced a premium partnership with Disqus.  Disqus is the largest third party commenting system in the world (I use it on my blog) and the data offers tons of valuable insights to drive lots of cool business use cases.   The Gnip/Disqus partnership makes this comment data available in full firehose coverage form to businesses for the first time ever.
• Also in February, Gnip released the first ever commercial Twitter historical product.   Gnip’s 30-day replay product allows their customers to go back and replay Twitter history.  As the old saying goes, hindsight is 20/20, and Gnip’s replay product allows companies to replay the entire Twitter stream for a full 30 days to look for things they might have missed.  This product was a monumental engineering feat and a huge portion of Gnip’s customers have already taken advantage of this product in just the first two months after its release.
• In March, Gnip announced Big Boulder, the first ever conference dedicated to social data.  Take a look at the list of speakers – it will blow your mind.
• Just last week Gnip announced that they added the largest microblogging service in China to their Enterprise Data Collector offering.  Sina Weibo has over 300 million members;  brands across the world are very interested in the conversations happening on this enormous platform.  Gnip continues to push to increase the number of international data sources in their offerings and Sina Weibo represents a huge addition to their portfolio.

Okay, so the Gnip team is getting stuff done, but at what price?  They must be cracking the whip pretty hard and creating a real sweat shop, right?  Wrong.  In spite of growing their number of employees by 300% in 2011, Gnip was just named The Best Place To Work in Boulder.  Not the best startup, the best company.  And, the best news of all?  They are hiring!

I recently wrote about how well things are going at Gnip. Here we are just a few weeks later and my friends at Gnip continue to generate goodness in several different directions.

Today Gnip announced it has partnered with Twitter and the U.S. Library of Congress to manage the receipt of all historical data from Twitter and facilitate its delivery to the Library of Congress. This news builds off a release from the Library of Congress back in April where LoC announced that they will digitally archive every public tweet from Twitter’s inception and will continue to archive new tweets going forward. LoC has hinted that the archive will have an “emphasis on scholarly and research” endeavors.

Delivering a bunch of 140 character tweets might not seem like a big deal, but when you consider that Twitter is currently pumping out data at a rate of 35Mbps (and growing) with a max recorded rate of roughly 6000 tweets per second, the challenges of managing this transfer become substantial. Gnip is currently delivering over a half billion social activities per day to almost all the top social media monitoring firms. Since Gnip was Twitter’s first authorized data reseller it isn’t too surprising that they partnered with Twitter and the Library of Congress for this important endeavor. The best part of this deal is that some of the key technical bits that were required to make this project a reality will almost certainly end up in Gnip’s future business offerings so the commercial Twitter ecosphere will likely benefit from this effort at some point too.

Just yesterday, Gnip announced that Chris Moody joined the company as President & COO. I’ve been good friends with Chris for the last several years and am super excited to be working closely with him. I anticipate that Chris and Jud Valeski, Gnip’s CEO, will make a powerful duo.

On Monday, the company announced a much anticipated product improvement that allows existing customers to open multiple connections to Premium Twitter Feeds on their Gnip data collectors. The best part is that customers won’t be charged the standard Twitter licensing fee for the same tweet delivered across multiple connections. Instead, Gnip offers a small flat fee per month for each additional connection. This is a big win for ops managers who have multiple environments to manage for their various release cycles and for large enterprises with systems distributed across data centers all over the world.

For those keeping track, that’s three big announcement in three days. Chris also pointed out on Gnip’s blog yesterday that several other key individuals have joined the company in the last week including Bill Adkins, Seth McGuire, Charles Ince, and Brad Bokal.

Guys – keep on Doing More Faster!

One of my favorite times for me in the life of a company is when it finds its sweet spot and really turns on the juice. Over the past year, we’ve had a number of our Boulder-based investments find this magic moment, including Trada and SendGrid. The most recent Boulder-based company to really hit its stride is Gnip.

Gnip is around three years old and is a testament to our belief at Foundry Group that it often takes several years for a brand new company to really find its mojo. While Gnip is building a business based on the idea that led to its creation, like most firms breaking new ground it has had its share of bumps along the way.

The first version of the product was based on an architectural approach that didn’t aptly satisfy all players in the ecosystem and wasn’t flexible enough. This led to a reset of the business, including a layoff of almost half the team (who were quickly absorbed into a number of other local Boulder companies, including several that we funded) and a different approach to the product. This approach worked much better, but by this point one of the co-founders was frustrated with the customer dynamics (all business facing) and decided to leave to start a new consumer-facing business (he left on good terms, we are still good friends, and he’s much happier today).

At this point, the other co-founder, Jud Valeski, stepped up to be the CEO. Jud is an extremely experienced CTO / technical product manager and developer, but had never been a CEO. The investors in Gnip committed to supporting Jud in any way he needed and he’s done a spectacular job of building the product, growing the team, negotiating several significant deals including the first Twitter data resyndication deal, and unleashing a very compelling set of products on the world. His one-year CEO anniversary is approaching, and things are going great.

The last three months have been pleasantly insane. Gnip has been adding customers at rate that any investor would be proud of, is executing flawlessly on the product and operations side as it scales up, and is posting month over month growth numbers that put it in the “they are killing it” category. Oh, and they are hiring as fast as they can find great people; across the spectrum (business, sales, & engineering).

I’m super proud of Jud and the team he’s built at Gnip. I expect we’ll look back on 2011 as the year that Gnip went from a highly product development focused company to a company that was firing on all cylinders. And Boulder will have another substantial software / Internet company in the mix.

I’m super proud of my friends at Gnip.  Last week they announced that they had closed another $2m investment from Foundry Group and First Round Capital and signed a deal with Twitter to become Twitter’s first authorized data reseller.

Via Gnip, you can now get three new premium Twitter feeds in real time for non-display use:

• Twitter Halfhose (50% of the full firehose)
• Twitter Decahose (10% of the full firehose)
• Twitter Mentionhose (all @replies and retweets that mention a user)

Gnip provides access to over 100 other social media feeds but has spent a lot of time in the past six months optimizing and tuning their system for Twitter-related data.

While Gnip has had its public ups and downs, including a reset of the technical approach and parts of the team about a year ago, co-founder and CEO Jud Valeski has done a magnificent job over the past two quarters of accelerating the business with real customers, adding huge depth to the technology stack, building a team that is continuing to scale nicely, and solidifying a long term relationship with Twitter that has been in the works for a while.

If you haven’t look at Gnip recently or didn’t know they exist, sign up for a free trial and take their social media API for a spin for 72 hours.  Or just contact them directly if you are interested in any of the new premium Twitter feeds.