Brad's Books and Organizations

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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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I Invest In CEOs Who Are Learning Machines

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On my run this morning, my mind drifted to a common characteristic of CEOs that I work with. It was prompted by me randomly thinking about two back to back meetings I had yesterday – the first with Eric Schweikardt (Modular Robotics CEO) and his VP Finance and then with John Underkoffler (Oblong CEO) and his leadership team.

I’m regularly blown away by these two guys ability to collect new information, process it, and learn from it. Any meeting with them is not an endless socratic session from me to them, but rather the other way around. They know what they are trying to figure out and use me, and my broad range of experience, data, and opinions, to solicit a bunch of data for themselves that they use as inputs into their learning machine. Sure – I ask plenty of questions, but they do also, and as we go deeper, the questions – and the things that come out – get richer.

So – as I turned around on my run and headed back home (today was an out and back run), I started thinking about other learning machines that I get to work with. The ultimate is David Cohen, the CEO of Techstars. The entire model of Techstars is build around the context of the entrepreneur as a learning – and teaching – machine, where learning and teaching (which we call “mentoring”) are the different sides of the same coin.

Bart Lorang (FullContact CEO) is an awesome learning machine. While Bart isn’t a first time CEO, his level – and intensity – of inquiry is stunning. It reminds me of a younger Matt Blumberg, who has taken the concept to an entirely new level in his book Startup CEO.

I could keep going – almost of the CEOs I work with are in this category of learning machine. As I rounded the last turn and headed for home, I realized the learning machine model is consistent with a deeply held value of mine – reading and writing. More about that in another post.

Founder’s Syndrome and Origin Stories

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I just did a long 90 minute video interview stretch with Boulder Digital Arts that generated a number of specific videos on entrepreneurship. While they are selling them, a few are free. One of the free ones is on Founder’s Syndrome and Origin Stories. Given the last few posts I wrote on CEOs, and some upcoming ones, I thought you might be interested in this one.

If you liked that, take a look at some of the others. They include:

While they are inexpensive, if you use the discount code “Feld2014″ you can get an additional 15% off.

Startup CEO Online Class with Kauffman Fellows Academy

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tl;dr – If you are a CEO and want to take an amazing online course about being a CEO by Return Path’s Matt Blumberg, sign up for Startup CEO from NovoEd now.

Yesterday, I wrote about Rand Fishkin of Moz falling out of love with the CEO role. Today I read Jason Goldberg of Fab’s great post on his struggles as CEO in 2013 and what he learned from it. This topic is front of mind for me as many of the companies I’m on the board of are growing extremely fast and the demands on the CEOs are significant.

It’s really hard to be a CEO. Becoming a great CEO takes a lot of time, work, focus, coaching, and introspection. I’ve had the privilege of working with some incredible entrepreneurs who, over many years and several companies, became remarkable CEOs. Dick Costolo (Twitter CEO) immediately comes to mind. While I didn’t work with him at Twitter, I was on the board of FeedBurner and worked with him and his three founders (Eric Lunt, Steve Olechowski, and Matt Shobe), who are all still close friends. I learned an amazing amount from each of them, but especially from my time with Dick.

Another great CEO I’ve had the honor to work with is Matt Blumberg who has led Return Path since founding the company in 1999. Matt is a first time CEO and has a fun blog titled Only Once which references the idea that you can only be a first time CEO one time. In a delicious twist, he’s now been a first time CEO for 14 years. While Return Path has had countless twists and turns along the way, Matt has been CEO from inception and presides over a large and significant company that continues to be a leader in a market it helped create.

Fred Wilson, who is on the board of Return Path with me and Matt (along with the FeedBurner board, and the Twitter board) had a frank and insightful post about turning your team three times through the life of the company to meet the different challenges that face a company from its journey from sweat driven startup to massive scale. Often this process of turning the team includes the CEO; other times it doesn’t. In Matt’s case, there have been plenty of team changes along the way, but Matt has demonstrated an impressive ability to scale and adapt himself in the evolving role of a CEO of a rapidly scaling company.

As a result, when Matt started talking to me about writing a book about the role of a Startup CEO, I was super excited. I encouraged and supported this, and it resulted in another book in the Startup Revolution series that I’ve done with Wiley. Matt’s book, Startup CEO: A Field Guide to Scaling Up Your Business, is a must read for any CEO.

Last summer, Matt began exploring doing an online course around the content in Startup CEO. He teamed up with the Kauffman Fellows Academy to put together a course titled Startup CEO, an online class that really drills into the important material of the book. It’s the real deal with hours of video, Q&A that Matt did in front of a live studio audience of NYC startup CEOs, as well as engagement with the teacher through the NovoEd platform.

I’m encouraging all the CEOs in Foundry Group’s portfolio to take the class, and I encourage you to take the class as well.

The class starts on January 20th on the NovoEd platform. You can learn more about it on Matt’s blog post about the Startup CEO course.

Falling Out Of Love With Being CEO

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I was a CEO once. In my first real company, Feld Technologies, there were two founders – me and Dave Jilk. I was President (we didn’t use the CEO title then, but as the President, I was the “chief executive officer”) and Dave was Vice President. As we grew, other people had different titles, but the two of us ran the business.

I’ve been told that I was a good CEO, but after about ten people I didn’t like the role of CEO. But we stayed after it and built a successful company that was consistently profitable and acquired by a public company in 1993 for a few million dollars.

At the time it was acquired, we had 20 people. For the next nine months, I ran the consulting group of this public company. I reported to the two co-chairman and we quickly scaled up to 50 people in two offices. By the time we got to 50 people, I hated being the CEO of consulting group (I have no recollection what my title was, but again my role was the CEO role of this group.)

The parent company acquired a much larger consulting company – about 200 people – and I quickly handed the keys over to the new CEO (well, President) allowing Feld Technologies to become two of the branch offices of what ended up being AmeriData Consulting.

I have never wanted to be a CEO since. It’s a really hard job. Some people love it. Some people are outstanding at it. Everyone I’ve ever worked with in the role has struggled immensely at different points in time.

And some people grow to hate the role.

Recently, Rand Fishkin, the CEO of Moz, took an incredibly brave step. In his post Swapping Drivers on this Long Road Trip Together, he handed the CEO role over to his long time business partner Sarah Bird. As of January 15th, Sarah will formally become CEO and Rand will become an individual contributor on the executive team, reporting to Sarah.

We invested in Moz in April 2012. Rand wrote an epic blog on the financing titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future. It was so epic that the mainstream tech press didn’t really want to report on the financing since there was no new information they could discover, since Rand blogged every last detail.

Since that date, I’ve developed a professional love affair with Rand and Sarah. As an investor, I have no hesitancy to become close friends with the entrepreneurs we invest in. Rand and his wife Geraldine have become extremely good friends, and I have deep respect and affection for Sarah.

In the middle of 2013, Rand called me up and said “What do you think of the idea of me handing over the CEO reins to Sarah?” I reacted immediately with “That would be awesome.” There was silence – I don’t think Rand expected that reaction.

I knew Rand was unhappy as CEO. He was exhausted in his role. He had a strong senior team but carried around every ounce of stress and responsibility for all aspects of the business. He traveled constantly evangelizing Moz, SEO, and marketing. He loved certain aspects of what he was doing, but hated others. And many of the ones he hated were the ones that a CEO of a scaling business is responsible for.

I recognized this. It’s the same stuff I would hate if I ran a company the size and stage of Moz. It’s the stuff I hated when I was co-chairman of a 1,000 person public company and effectively acting CEO since the CEO we had recruited bailed after accepting the job, leaving us with a four month scramble to find a new CEO. It’s the stuff I remember hating leading a company of 50 people.

Now, Rand and I are different people. But he’s special. And magical. And amazing. And his special, magic, amazingness was being squandered as CEO, especially when he sat next to Sarah, who will be an awesome CEO while allowing Rand to be special, magical, and amazing in the next chapter of Moz.

I’m so incredibly proud of Rand for how he’s approached this, talked openly about it, and dealt with his own emotions, insecurities, and fears around this decision. And I’m extremely excited about Sarah become CEO and unleashing her talents on the new wave of growth at Moz, while Rand spends his time being true to what he loves in the context of Moz.

Building a company is hard. Being a CEO is hard. Working with people you trust, admire, and adore is a delight.

I’m A Talking Rubber Duck

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Phin Barnes at First Round Capital just nails it today with his post To get the most out of your investors, turn them into rubber ducks

Go read it – I’ll wait and will be here when you get back.

I love Rubber Duck Debugging. I use this approach when writing, which I call “Writing with Yoda.” I have a little Yoda figurine staring at me at all times and when I stall out I just talk to him for a little while and then get started again. He always looks serene and wise and I almost always get going after talking to him for a little while.

Phin describes five steps to turn your investors into rubber ducks:

  • Frame the problem you are facing: describe the challenge in enough detail that I can understand it without being an expert (because I am probably not an expert)
  • Create context for an answer: Explain why this problem is a priority for you and the business and why you need to solve it now (because I am not involved in the day to day operation of your company)
  • Propose a few solutions: Describe a few paths you might take and talk through how you would choose between them (this helps me understand the outcome you want to achieve)
  • Be patient: Be open and engage deeply in the questions that I have and explain your answers with specific detail (even if it seems obvious)
  • Be active: The goal is to debug the system and the builder is most likely to find the bugs we seek (and to see others along the way)

These are similar to how to engage a great mentor, which we teach over and over again in Techstars – both to the entrepreneurs and the mentors. If you’ve ever done a Top of Mind Drill with me, you’ll recognize the Rubber Duck approach with one twist – storytelling.

I’m a storyteller. I learned this from my dad. It’s part of why I love to write – it’s a way for me to think out loud and figure stuff out while telling stories. So – my favorite Rubber Ducks are the ones who can also tell stories, at the right time.

The risk of a Rubber Duck only approach as a VC is that you become overly socratic. We all know the VC who just asks question after question after question. The questions are often good, and they drive you deeper into the problem, but at some point you need to take a break. You need a breath from answering more questions. You need an analogy to relate to.

This is when the Rubber Duck should tell a story.

At a board meeting recently, the CEO looked at me and said “just tell me the fucking answer.” So I did. And that works also. But not until the CEO wants that. Until then, be a Rubber Duck.

Remember – the CEO makes the decision, not the VC. Unless the CEO explicitly asks. And – if as a VC you don’t trust the CEO to make the decision, you have that discussion with the CEO right now. And if you are a CEO who’s VCs aren’t letting you make the decisions, buy them some Rubber Ducks.

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