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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Will 2013 Be Harder For Startups Than 2012?

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tl;dr: Fuck, I don’t know. I’m not in the prediction business. But plan for it. And behave accordingly.

A lot of people have been talking about how 2013 will be harder for startups and fast growing companies. Tiresome things like the endless discussion about the Series A crunch, more conservative behavior from VCs due to the performance of Facebook, Groupon, and Zynga in the public market, and overall concerns about the economy dominate. Counterarguments prevail as different people try to predict and justify what’s going to happen.

All I know is that I have no idea what is going to happen. The macro is exogenous to me – I can’t impact or control it. So rather than try to predict what is going to happen, I’m going to assume a tougher 2013 for startups until I have evidence that it’s not.

I sent Fred Wilson’s post Advice for 2013: Deliver On Your Promises out to our CEO email list. I felt like Fred’s punch line was powerful.

“So if I can give entrepreneurs a single piece of advice for 2013 it would be to deliver on your promises. Not just to your investors but also to your team and ultimately to yourself. This is no time to be in denial. That is a lethal attribute in times like these.

That generated a response on the email thread about actionable advice. So, I responded with two examples:

1. Recognize that your expense plan will be linked to your promises. Tighten the time frame – do what a lot of successful companies have done in the past. Rather than having an annual 2013 plan, have a 1H13 and 2H13 plan. Lag your headcount growth behind what you need by a quarter, running “hot” on all fronts as you try to get the growth you expect. Hire only when this growth materializes. Then, replan 2H13 and 1H14 at the end of 1H13.

2. Make sure you know exactly how much money your EXISTING investors have reserved for you and are willing to fund you in 2013 independent of any new outside investors. Don’t ever be in a position where you need a new outside investor to continue operating your business.

I’ve got a bunch of others, but I’m curious what you think. Operate under the hypothesis that 2013 will be harder for startups than 2012. What are you going to do different in 2013?

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Social Computing Best Practices

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If you are interested in Social Computing in the Enterprise, NewsGator has just put up a Social Computing Best Practices & Resources on their web site.  In addition to a bunch of NewsGator generated content, it has useful links to some of the key blogs on Social Computing in the Enterprise as well as the analysts who cover this area.

NewsGator and Burton Group are also doing a webinar series on IT Best Practices for Enterprise Social Networking – check it out if you are into this stuff.

Consumer Internet Innovation In The Enterprise

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I’ve been wandering around telling people that 2008 is the year that all of the consumer Internet innovations we’ve been blessed with exposed to will be finding their way into the enterprise.  The Denver Post has a nice article titled Work, connected by social networking that describes (albeit at a high level) Alpine Access’ implementation of HiveLive.

Knowing HiveLive well (I’m an early personal investor), they are a great example of how this is going to play out.  One of our portfolio companies – Rally Software – has been using HiveLive to power their Agile Commons community for over a year (if you are a practitioner of Agile software development, take a look.)  HiveLive has taken many of the innovations of social networking and reconfigured them in a way that is ideally suited for collaboration inside and across enterprises – and has done it using a SaaS model that is easy to quickly and affordably implement.

Look for a lot more examples of this in 2008.

Facebook Apps for Business

Comments (2)

CIO Magazine, that paragon of business wisdom, has a a list of five Five Favorite Facebook Widgets for Business Users.  My TechStars friends J-Squared weigh in on the list with Sticky Notes.   Entertaining.

More Thoughts on Consumer Internet Innovations Migrating to the Enterprise

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I have very smart friends.  They challenge me all the time.  One of them sent me the following email in response to my recent posts about the enterprise such as Get Ready For Selling To The Enterprise To Be A Big Deal Again.

His question / comment was: What are the types of Web2.0 things you see moving into the enterprise?  Or is it more “conceptually” rather than specific-product oriented?  I see update of wikis; I think the EventVue type of nice app will be taken up; but the two biggest things in the last couple of years are the dominance of Google (which is already used in the enterprise), and Facebook, which just does not seem applicable in an enterprise sense (people use it, but kind of the same way they use LinkedIn. 

I responded with: I describe it as “consumer Internet innovations migrating to the enterprise” rather than “Web 2.0 in the Enterprise” (although the second is how the pundits want to coin Enterprise 2.0.)  The componentry is what is interesting.

  • Broad adoption of RSS
  • Content tagging
  • Social computing for filtering / communication / relevance 
  • Embedded search across systems 
  • Broad audio / video interoperability within and across companies (“unified communication” – finally) 
  • Industrial strength web-based apps (there is still a remarkable amount of legacy desktop app infrastructure) 
  • Collaboration (this is wiki) 
  • Integration of collaboration and legacy data (database driving wiki) 

When you think of enterprise, don’t think of < 1000 people. That’s SMB and can easily adopt the consumer facing and SaaS stuff. Think 10,000+ with an IT organization and a ton of legacy shit.  That’s where the fun (and money) is.

He responded with: All these things make sense to me.  It seems like the key is that the way you adapt them to the enterprise may actually be quite different than the way they are used and organized in consumer circles.  The children that develop the consumer app will get hammered in the enterprise unless they bring in some gray.

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