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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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Capital Is Cheap And Labor Is Expensive

Comments (55)

I was on an airplane for the first time for business in a while and when I woke up from my nap I found my self staring at CNBC on the DirecTV seat back display. I never watch CNBC so I was attracted to the talking heads, who were silent since I didn’t have earphones in. I kept thinking I was watching ESPN with all the sports metaphors, blinking lights, constantly changing headlines, and tightly coifed and good looking men talking at me in rapid fire.

Between a headline about Carly Fiorina exploring a run for president and Zebra Technologies equipping all NFL players with tracking devices I noticed one about companies who were raising prices to inflation proof their business. At least, that’s what I thought it said since it flashed up there quickly between a headline about “Steel is on Fire” and then a video of Warren Buffett walking around without a headline so I had no idea why they were showing him.

The inflation proofing headline stuck in my head. We’ve had a very long period of low to no inflation, at least based on the way the government calculates it. While my cynicism around government math and how inflation is calculated is substantial, there isn’t much question that since 2008 capital has been extremely cheap. Fred Wilson wrote a great post titled The Bubble Question a while ago where his punch line was:

It is the combination of these two factors, which are really just one factor (cheap money/low rates), that is the root cause of the valuation environment we are in. And the answer to when/if it will end comes down to when/if the global economy starts growing more rapidly and sucking up the excess liquidity and policy makers start tightening up the easy money regime. I have no idea when and if that will happen. But until it does, I believe we will continue to see eye popping EBITDA multiples for high growth tech companies. And those tech companies with eye popping EBITDA multiples will use their highly valued stock to purchase other high growth tech business and strategic assets at eye popping valuations. It’s been a good time to be in the VC and startup business and I think it will continue to be as long as the global economy is weak and rates are low.

But I think cheap capital is only half of the equation. The other half is ever increasing labor costs across all aspects of the wage chain. When I was in business school in the 1980s, we talked a lot about the productivity paradox. The premise was that computers and automation would drastically improve productivity, making labor less important as tasks were automated, resulting in lower cost of labor.

As the technology industry rapidly evolved, the notion of non-productivity kept coming up. Nicolas Carr’s HBR Article “IT Doesn’t Matter” was probably the capstone piece around this and how companies could take advantage of the commoditization of IT, rather than how IT was a transformative input into companies and societies.

Suddenly, in 2010, technology was disrupting everything and the technology industry was booming. By 2013 everyone was talking about a bubble, even though the companies being created this time around were substantial. Once again, wages for IT employees and computer scientist were skyrocketing and suddenly coding schools were popping up everywhere, to the point that people are now saying that Computer Programming Is a Trade; Let’s Act Like It.

Capital remains incredibly cheap, so it’s flowing into wages. But that’s only at the high end of the market around technology jobs. At the other end of the spectrum, we have the famed jobless recovery with the elimination of massive numbers of jobs that previously existed, especially in industrial and Fortune 5000 companies. While this is happening, we have an entirely new class of entrepreneurs, or self-employed, being created by companies like Uber.

Yeah – this shit is super complicated and it plays out over a long period of time. In fact, it might only be really possible to understand what is happening in hindsight. But the combination of cheap capital and expensive labor has created a very powerful economic dynamic which right now is driving massive innovation across virtually every industry sector around the world.

We know that extremely low cost of capital will not last forever. We know that eventually there will be real inflation again. And we know that wages can’t increase endlessly. I wonder what happens to the allocation of capital, entrepreneurship, and the impact on society when capital gets expensive again?

The Colorado CEO Jobs List

Comments (5)

A few years ago, David Cohen and I started a Colorado CEO Jobs list in response to the regular stream of inbound email we got from folks looking to move to Colorado and interested in tech-related jobs. We seeded this list with CEOs from companies Foundry Group and Techstars had invested in. As other CEOs requested access to the list, we added them.

The list was managed in Yahoo Groups and had about 100 CEOs on it. It was simple – emails from people looking for jobs came to me or David and we forwarded them to the list. The hit rate was very high – I regularly get feedback from people that they’ve ended up with multiple interviews and a job from the introduction.

Both David and I felt like the list was pretty tedious to manage in Yahoo Group so about three months ago we restarted it and made it a Google Private Community. We culled the list a little and re-invited everyone, ending up with 56 active CEOs. We’ve been using the Google Private Community for a while and are comfortable that it’s a significant improvement over the Yahoo Group.

We are still keeping it private for now but are looking for any CEOs of tech companies in Colorado who want to join the list as we expand it from Foundry / Techstars related companies. Our goal is to have a wide audience of CEOs for anyone coming to Colorado who is looking for a tech related job.

We are keeping the list ONLY to CEOs for now as we plan to expand some of the things we are doing with the list.

So, if you are a CEO of a tech company in Colorado and want to be on our Colorado CEO Jobs List, just email me (brad@feld.com).

And – if you are looking for a job in a Colorado tech company, email me also and I’ll forward your info to the list.

BetaBrand Embraces Comic Sans

Comments (7)

One of the super crazy fun companies we are investors in is Betabrand. At this point, half of my new wardrobe comes from them.

They are hunting for a new amazing UI/UX developer. But – to show how much they want someone, they’ve designed an incredibly hideous new look for their site.

They’ve got blink tags, Comic Sans, spinning boxes, Nyan cat cursors, Papyrus, an on fire Under Construction prompt, and really bad color overlays. It reminds me of a Geocities page I once created.

Help our friends at Betabrand out. If you are a UI/UX god or goddess, here’s what they are looking for. And – while you are at it – buy some new disco pants.

Little Colorado Company MobileDay Finds Big Hole In Enterprise Bucket

Comments (3)

I’m a seed investor in MobileDay, a Boulder-based company that has helped its users make over two million mobile-based conference calls in the past few months. Its popularity comes from One-Touch Dialing where users press a big green button that shows up on their phone just before a conference call and they’re in. I use it every day – for every call – and am no longer in conference call hell on my iPhone as I go from my calendar to my dialer back to my calendar back to my dialer as I try to remember what the next number in the conference call sequence is. But – this is a show vs. tell type app – just go try it on MobileDay iPhone or MobileDay Android.

When MobileDay wanted to figure out how to make money, they went on the road to talk to big companies. They already knew who has lots of users of MobileDay, so they visited them and said,  “You already have hundreds of employees using our product – how can we work together?”

MobileDay quickly  found out that mobile had disrupted the control that companies used to have over the cost of conference calls. People moved away from land lines and toward mobile, but conference calling hadn’t caught up.

MobileDay knew that they could save time. One-Touch Dialing proved that. But here was a chance to save money also. If MobileDay could make their big green button also dial the cheapest number automatically, companies could save an enormous amount of money.

Enter Least Cost Dialing (LCD). With LCD enabled, the MobileDay app automatically inserts the company’s lowest-cost conference phone numbers. Every dialing sequence is based on the employee’s location, and LCD can reroute calls through the company’s internal voice or data network. MobileDay will provide the same capability for international calls which will create awesome savings opportunities.

While LCD is in the background saving money, One-Touch is up front making conference calls simple. It’s a great victory for both users (ease of use) and the CFO (massive cost savings for a small monthly fee.)

As MobileDay tackles this huge opportunity, they are hunting for senior mobile developers (iOS and Android), enterprise sales experts, and a great product/support person. If you want to be part a pioneer in the mobile enterprise game, email me and I’ll pass on your resume.

Boulder Is Hiring!

One Comment

It’s no secret that many companies in the Boulder/Denver area are looking for talent — there are dozens posted on the Foundry Group and Techstars job pages alone.

If you’re looking to meet some great Boulder companies looking for technical help in person, check out the Boulder Tech Job Fair Sept. 11 from 3-7 p.m. at the Boulder Chamber building, 2440 Pearl Street in Boulder.

A total of 13 companies are looking to fill more than 100 technical positions covering a wide variety of programming languages and ranging from entry-level positions to senior embedded engineers with 10 or more years of experience. These companies are interested in speaking with qualified applicants from not only Colorado’s Front Range, but from other cities as well. While most positions are based in the Boulder/Denver area, some companies are looking to fill openings in other cities.

Participating companies with immediate openings include:

  • Cardinal Peak
  • Coalfire
  • Confident Financial Services
  • FullContact
  • Gnip
  • JumpCloud
  • Kapost
  • Mocavo
  • Pivotal Labs
  • Rally Software
  • SendGrid
  • Quick Left
  • Simple Energy

For more information, applicants can visit BoulderTechJobs.biz where there are links to all participating companies, as well as more detail on the job fair and information about Boulder. Qualified applicants not able to travel to Boulder for the fair may also request Skype interviews with participating companies.

If you’re curious, stop by. You’ll meet some great companies and see just what a strong market Boulder/Denver is.

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