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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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What Should You Do When Someone Rips Off Your Site Design

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I recently received the following email.

I am in a bit of a dilemma and would really appreciate any insight you all have on what to do.

Last month, my team worked with a designer to create a new homepage for my startup. Yesterday, I saw that another company ripped off our entire site design. They have also just recently pivoted into doing exactly what we do.

You can compare the two sites here: Us Them a week ago Them now.

It doesn’t feel right that they can so brazenly steal someone else’s work like that. You would think they would have a reputation to uphold.

Anyway, my question for the group: How can we turn this negative into a positive for us?

My response was:

Welcome to the world. It sucks, but it happens all the time.

There are two approaches:

1. Ignore them and just kick their ass.

2. Make a big deal about it as a way to get more attention for you. Do this in a classy way. Don’t be whiny about it.

So you know, I generally choose option 1. I find that option 2 is very hard to execute and usually a distraction. But if you can do option 2 correctly, especially for a consumer service like yours, it can generate a lot of interest.

After a week or so, a draft blog post, and a little more back and forth the sender concluded:

For a quick update on this front, I think I did want the noise, to hopefully drive more awareness and because I was still kinda mad.

But, after putting it out of my mind for a few days and focusing on making progress on our product and marketing strategy, I feel calmer about the whole thing. Best case scenario we embarrass them – which doesn’t seem as fun anymore now that I’m not as actively mad – and get some sympathy and signups. Worst case scenario it backfires on us. Either way it’s a distraction and a lot of noise that isn’t really my style.

Our team is better, our technology more scalable, our wit sharper. They are right in some ways to make their site a cheap knockoff of ours – our site is great. But they’re fighting a losing battle. So I’m gonna go with option A of ignoring it and kicking their ass.

So yeah, your advice ended up being right on. Thanks for suggesting I sleep on it for a few days and again just for being responsive and helpful overall – it really did mean a lot.

I was proud of this person. The high road is always more fun, especially when you toss boulders down on the person on the low road and crush them before they make any progress toward the top of the mountain.

How Can This Be A Billion Dollar Company?

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I was in the bathroom this morning catching up on all the blogs (via Feedly) that I hadn’t read this week since my head was in a bunch of other things. I came across one from Nic Brisbourne (Forward Partners) titled I’m a stock picker. I wish he had called it “This Unicorn Thing Is Bullshit For Early Stage Investing” but I think he’s a little more restrained than I am.

My original title for this post was “How Can This Be A Billion Dollar Company and other bullshit VCs ask early stage companies.”  It was asked by VCs to several companies I’m involved in last week. While I get why a late stage investor would ask the question when the valuation is in the $250 million range, I really don’t understand why a seed investor would ask this question when the valuation is in the $5m range.

Now, I’ve invested in a few unicorns in my investing career, including at least one unicorn that went bankrupt a few years later (I guess that’s a dead unicorn.) But I’ve also invested in a number of companies that have had exits between $100m and $1b that resulted in much larger returns for me, both on an absolute basis as well as a relative basis, than unicorns have for their later stage investors.

I’ve never, ever felt like the “billion dollar” aspiration, which we are now all calling “unicorn”, made any sense as the financial goal of the company. Nor have I felt it made sense as a VC investing strategy, especially for early stage investors. We never use the phrase “unicorn” in our language at Foundry Group and while we aspire to have extraordinarily valuable companies, we never approach it from the perspective of “could this be a billion dollar company” when we first invest.

Instead, we focus on whether or not we think we can make at least 10 times our money on our investment. Our view of a strong success in an investment in a 10x return. Our view is simple – we don’t really view anything below 3x return a success. Sure – it’s nice, but that wasn’t a real success. 5x – now that’s nice. 10x – ok – now we are in the success zone. 25x – superb. 50x or more – awesomeness.

We also know that when we invest in three people and an MVP, we have absolutely no idea whether this can be a billion dollar company. Nor do we care – we are much more focused on the product and the founders. Do we think they are amazing and deeply obsessed with their product? Do we understand their vision? Do we have affinity for the product? Do we believe that a real business can be created and we can get at least a 10x return on our investment at this entry point?

I recognize other VCs have different strategies than us, especially when they are investing at a later stage. Applying our model, if the entry point valuation is $100m or more, then you do have to believe that the company is going to be able to be worth over $1 billion if you use a 10x filter. But in my experience, most later stage investors are focused on a smaller absolute return as a threshold – usually in the 3x to 5x range. And, very late stage / pre-IPO investors already investing in companies worth over $1 billion are interested in an even smaller absolute return, often being delighted with 2x in a relatively short period of time.

So, let’s zone this in on an early stage discussion. Should the question “how can this be a $1 billion company” be a useful to question at the seed stage? I don’t think so. If it’s simply being used to elicit a response and understand what the entrepreneurs’ aspiration is, that’s fine. But if I asked this question and an entrepreneur responded with “I have no fucking idea – but I’m going to do everything I know how to do to figure it out” I’d be delighted with that response.

How Does A Small Company Make A Big Company Successful?

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Every single day I have multiple conversations and emails from CEOs and people at companies I work with about how to work with Big Tech Companies. You know – Google, Apple, Microsoft, Oracle, IBM, Amazon, Facebook, Twitter, Salesforce, SAP, LinkedIn, Cisco, Yahoo, HP, AT&T, Verizon, Icouldkeepgoingforalongtime.

But this conversation is not limited to just the gigantic tech companies. They include all the up and comers andtheabunchmoreyouprobablydontthinkarethatbigbutare, including a long list of newly public companies or still private but mega-funded companies.

This conversation comes from two different directions.

- BigCo reaches out to LittleCo and has a classic “happy ears meeting” where BigCo talks a great game about all the great things the two companies can do together and how it’s going to be awesome and LittleCo hears what they want to hear, not what has been actually said. And then the giant black time suck hole of the “let’s work together dance” begins. In the typical case, this goes one for months and months without any resolution or action. Eventually everyone gets tired of each other.

- LittleCo reaches out to me and says “Hey – I really think we could be strategic to BigCo. Can you make an introduction.”

My response to each of these is NO NO NO NO NO NO. After I say NO a few more times, I state “You are thinking about it wrong.”

Instead of expecting BigCo to react to you in any way, start from the perspective that if you want a relationship with BigCo, your only goal in life should be to help BigCo be successful.

Start by coming up with a hypothesis about what you are going to do to help BigCo be successful. Then, test this hypothesis. The Lean Startup approach is super helpful here. Test, ship, iterate – just keep trying and keep learning. Use what you are creating to get the attention of BigCo. Don’t spend six months developing a business development relationship. Don’t spend months trying to get the decision maker on the phone before you’ve done anything. Don’t wine and dine endlessly the people you know, or get connected to. And never, ever go single threaded with one person at BigCo, or one BigCo, hoping something good will happen.

Simply go do some shit for BigCo. Be precise. Execute well. Communicate it to the people you know at BigCo. Do it without any formal arrangement. Show BigCo why they care and why you are the one that will move the meter for them.

Then you can start having the business conversation.

As a bonus, this works for sales also. But you probably figured that out already.

After Failure, What’s Next?

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Recently, I wrote a post titled After Your First Big Success, What’s Next? The comment thread was powerful and fascinating, as was the direct email feedback I got, including the following note:

“I think it would be interesting to hear your perspective on how an entrepreneur should approach “what’s next” after coming off a failed business. How should one manage their own emotions and their own perspectives post failure? It’s easy to play the blame game and it’s easy to be extremely hard on ourselves. There has to be constructive ways to move forward rather than destructive ways that could lead to lack of confidence, or depression.”

Having failed at a lot of things, I’m completely comfortable tackling this. But let me establish my bonafides first. My first company, Martingale Software, failed (we returned $7,000 of the $10,000 we raised.) My second company, DataVision Technologies failed. I didn’t have success until my third company, Feld Technologies. While my first angel investment was a success, I resigned as the chairman after the VCs came in and left the board after the CEO was replaced. In the late 1990s, what looked like my biggest success at the time, went public, peaked at an almost $3 billion market cap, and then went bankrupt three years after the IPO. And the second VC fund I was part of, which raised $660 million in 1999, was a complete disaster.

As the cliche goes, I learned a lot from these failures.

I’ve had many more. I remember firing my first employee, which I viewed as a failure on my part, not hers. I remember the first CEO I fired and staying up all night prior to doing it because I was so nervous and miserable about the decision I’d made to back him. I remember the first company I funded as a VC that failed and struggling to figure out how to shut it down after everyone else fled from the scene. I remember the first time someone threatened to sue me for doing a bad job for them (they didn’t.) I remember the first time I was sued for something I didn’t do (I eventually won.) I can keep going, but you get the idea.

What’s next is simple. It’s whatever you do next. In some cases this will be easy – you’ll already be on to the next thing before the previous thing you were working on failed. In many cases it won’t be easy – you’ll be wallowing in the quicksand of the failure well after the other bodies have been sucked below the surface.

How you deal with your own emotions, and perspectives, is an entirely different matter.

I love the approach of Jeremy Bloom, the CEO of Integrate (we are investors) who I have immense respect and adoration for. In 2006 at the Winter Olympics, he was the best freestyle mogul skier in the world. On his last run, he was expected to take gold. Halfway down he missed a turn and placed sixth. As Jeremy told me, he gave himself 24 hours to be angry, depressed, upset, furious, frustrated, confused, and despondent. I imagine him in his room in the Olympic Village systematically destroying all the furniture. One minute after 24 hours, he was on to the next thing, with the failure solidly in his rear view mirror.

Now, 24 hours is a short amount of time. I’ve often carried my failures around for longer, but never much longer than a couple of days. I separate how I feel from failure from how I feel about life and what I’m doing. Interestingly, for me, failure isn’t the thing that gets me depressed, it’s boredom combined with exhaustion. But that took me a long time to figure out.

I’ve found that talking to people about my failures is helpful. Rather than hold them inside, I talk to Amy (my beloved) about them. I talk to my partners about them. I talk to my close friends about them. I don’t ignore the failure or try to bottle it up somewhere. Rather, I set it free, as quickly as I can.

In our book Do More Faster, we have a chapter on the the wonderful story of the failure of EventVue. After it failed, some of Rob and Josh’s friends from the Boulder Startup Community had a wake for EventVue. We celebrated its life, buried it, and moved on. I loved this idea and have done it a few other times for failed companies. It’s important to remember that even in death you can celebrate the wonderful things that happened during life.

But ultimately, you have to know yourself. There is no right answer or magic salve for getting past failure. If you are going to be an entrepreneur, you are going to experience it a lot. It’s just part of the gig. Start by understanding that, and asking yourself what you are really afraid of. And, after you fail at something, let yourself experience whatever you want to experience, remembering that it’s just another small part of the journey through life. And then go on to whatever is next, in whatever time you are ready for it.

After Your First Big Success, What’s Next?

Comments (47)

As exits have been flowing nicely again the past few years, many of the entrepreneurs I work with have experienced their first big exit. I refer to this moment as when you find that you have life changing money in your bank account, which I like to call “fuck you money.” You now can do whatever you want with the rest of your life.

I was on a walk with an entrepreneur recently who was wrestling with this when we ran into another entrepreneur I had backed who had an exit a while ago and had wrestled with the question of “what’s next.” We chatted briefly and then he hopped on his bike and continued his ride.

Later in the day, I got the following magnificent note in my inbox from my bike-riding successful friend.

I was thinking about the ‘what’s next’ conversation. I’m sure you’ve seen everything and are all over it, but in my more limited experience, for some people it’s harder than the what’s first conversation (i.e. should I start a company or not?).

I find, unfortunately, that a reasonable percentage of people chase their tail endlessly looking for the next big win, but they can never catch it because they have no idea what they are chasing. Their life spirals inward as they get more unsure of themselves, more frustrated, more unhappy.

I think this state of uncertainty and self doubt causes more depression, divorce and addiction for some people than starting and running a company. Especially if they’ve never felt failure before. Now they fail all the time and they can’t figure it out.

I think it’s mostly because they never find passion again, or they look for it in the wrong places. There are a million things they can do in the world, but the spend most of their time looking for the next great technology company that sells a better widget, but doesn’t necessarily change their life in any meaningful way.

They have grand opportunity because they are unbound to do something they truly love. If you love mentoring, mentor, if you love the environment, help it. If you love children, teach them. If you love your family, share with them. Give back to everyone who gave to you on the path to success, and then give more broadly to everyone who seems deserving.

To me, that’s the real grand victory.

Totally brilliant. And so simple.

I had my first exit when I sold my first company (Feld Technologies) at age 28. After the dust settled and I had sold all the stock I’d received, I’d made somewhere between $1m and $2m after tax. When Amy and I talked about “what’s next” when I was 29.5 (about the time I finished working for the company that bought mine) one of the options for consideration was to retire and move to Homer, Alaska. I was making plenty of money consulting and, while I was investing much of the money I made from the sale into new companies as an angel investor, the idea of living in Homer was attractive. We figured we could easily live for the rest of our life on consulting income and what we’d managed to save, even if none of the angel investments I was making turned into anything. When one of them was acquired a few months later and we had another $1m after tax, we realized that we could easily live on $40k / year of cash in Homer, which would last us about 25 years if we made no other income.

We were deeply in the “should we just call it quits and go live a different life conversation.” But at almost 30, I just didn’t feel done, and in many ways I felt that I was just at the beginning of a new journey (which turned out to be true.) So we packed up, moved from Boston to Boulder, and decided to build a life in Colorado, while I continued to invest. This was 1995 and the path from there has been powerful and dramatic. By 1999 I had to ponder “what’s next” again after a number of my angel investments returned more money to me than I ever thought I’d have, and then again in 2002 after getting massively crushed by the collapse of the Internet bubble and losing even more money on paper than I expected I’d make cumulatively in my lifetime.

I’ve been through the “what’s next” discussion with Amy several times, including in 2004 when I doubled down on Mobius Venture Capital (instead of packing it up and calling it quits), in 2006 when we decided to start Techstars and Foundry Group, and again in 2013 after spending six months being extremely depressed.

Each time, I’m adjusted how I spend my life in the way my friend talks about in his final paragraph:

They have grand opportunity because they are unbound to do something they truly love. If you love mentoring, mentor, if you love the environment, help it. If you love children, teach them. If you love your family, share with them. Give back to everyone who gave to you on the path to success, and then give more broadly to everyone who seems deserving.

If you’ve recently had some success, as you go into the weekend, take some time out to ponder how you are you thinking about this. And share if you have any insights!

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