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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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On The Road Again

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After a year of zero travel for business, I’ve started to venture out into the world again. I just got back from my third business trip this summer – this time to Seattle for the past three days.

After 20+ years of traveling 67%+ of the time for work, I was sick of it. So I’m wandering back in with a little trepidation.

I’ve decided to take a very different approach. Historically on a three day trip to Seattle, I’d have 10 meetings a day, starting early in the morning and going until after dinner. I’d pop from place to place, taxi-ing (now Uber-ing) around town. I’d check my email in cars between meetings, and I’d be a sweaty, smelly mess by the end of the day. I’d meet with every company we are investors in (Moz, Cheezburger, BigDoor, Rover, Techstars, and Impinj), meet with a bunch of entrepreneurs for companies we might be interested in, hang out with a few of my long time Seattle friends, visit at least one or two Seattle VCs, and do a public event or two. And then I’d stay up until 1am trying to grind through my email.

This time I planted myself at Moz on Monday and Tuesday and then Cheezburger on Wednesday. While I had plenty of meetings at Moz, they were all about Moz. I spent Monday with each of the four product teams, going really deep on the existing products. I spent time with people on the leadership team, including significant time with Sarah Bird (CEO) and Rand Fishkin (Founder). I had a dinner with Sarah Monday night followed by a hangout at Rand’s house with Rand, Geraldine, Sarah, her husband Eric, and the tireless Jackson-child.  We had a board meeting on Tuesday along with a bunch of 1:1 meetings. Tuesday night I had an awesome meal on the roof of Terra Plata with the Moz leadership team. And just for fun on Tuesday morning I went for a run on the waterfront with my long time friend TA Mccann, who if you know our origin story includes a run at the first Defrag (where he kicked my ass, just like he did Tuesday morning.)

I slept in on Wednesday, did some email in my hotel room, made a few phone calls, and had a late breakfast with Andy Sack at Purple. I then had lunch with Ben Huh (how’s that – breakfast and then lunch, with nothing in between – what more could you want out of life) followed by a great board meeting at Cheezburger.

As I napped on the flight home last night, I felt very different returning home. I love Moz and Cheezburger – and the people I get to work with there. Each company has had different challenges over the past two years (like every company I’ve ever worked with), but both feel like they are in a great place to me right now. When I was walking to lunch with Ben, he asked me a question about how I was feeling in general and I said that at this point I believe that I’m only working with entrepreneurs who I love, adore, have respect for, and am friends with. That’s a big part of it for me. I know this doesn’t always, and won’t always happen, but as I’ve gotten older I realize it’s an important part of my value system and selection criteria for who I work with.

While I’m not going to turn the travel spigot back on in a radical way, being very deliberate about how and why I’m traveling is part of my new trip planning mantra. We’ll see how it works on the next ones, which are to Austin, LA, and New York.

Today’s Fun – Gnip, Twitter, Uncommon Stock, and Pre-Seed Rounds

Comments (7)

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.

Real Transparency

Comments (19)

Lots of people talk about being transparent. Lots of companies espouse principles of transparency. Lots of statements start out with “I like to be transparent” or “I’m being transparent when I say …” And several years ago the notion of transparency became the new in thing, especially around the VC and startup worlds.

Most of it is bullshit.

If you want to see real transparency, take a look at Moz’s 2013 Year in Review: More Than You Ever Wanted to Know About Moz, and Then Even More.

I love being an investor in this company.

When Rand Fishkin decided to hand the CEO reins over the Sarah Bird, he wrote Swapping Drivers on this Long Road Trip Together. Or if you want to compare how they did in 2012 to 2013, just read Rand’s post Announcing Moz’s 2012 Metrics, Acquisition of AudienceWise, & Opening of Our Portland Office.

And while Sarah and Rand were disappointed in their off-plan performance of 33% revenue growth, GAAP revenue of $29.3 million, and an EBITDA loss of $5.7 million, as an investor I’m delighted. Given all the things in motion, they and their team have done an amazing job of navigating another step function in the growth and development of the company. They are extremely well positioned on all levels for 2014 – product, strategy, infrastructure, financials, cost structure, and team. And they have huge hearts.

I know transparency is hard. Our legal and regulatory system makes it even harder. Having been on public company boards, I’ve been involved in the endless discussions about level of disclosure. I’m not naive about how the system works. And I know how many people view opacity as a competitive advantage, which is some cases it is.

But when you talk about being transparent, it’s often useful to have a standard of “real transparency” to compare yourself too. I’d put Moz at the top of that list in my book.

Falling Out Of Love With Being CEO

Comments (40)

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.

Do You Publish Your Board Book To Your Entire Company?

Comments (32)

Over and over again people talk about transparency. Many people assert they are transparent, or are being transparent. Few actually are.

I was thinking about this last night while watching the last few episodes of Revenge: Season 2 with Amy. Suddenly the word “transparent” started being thrown around by the Grasons, referring to their new found desire to be transparent. In this case, it was simply disingenuous - they are transparent only when it suits their purposes and usually as a setup of some other nefarious act they were about to perform (or had performed).

Whenever a word makes it into a TV show like Revenge, you know that it’s lost all meaning. And, as I’ve observed in the world of tech and startups I play in, transparency is used all the time to justify something, but rarely actually supported by behavior.

In the “everything that is old is new again” category, the master of transparency, and likely the originator of “open book management“, is Jack Stack. I remember meeting Jack and hearing him talk at the very first Birthing of Giants event created by Verne Harnish in 1991. I read Jack’s book – The Great Game of Business: Unlocking the Power and Profitability of Open-Book Management – about his experience at Springfield ReManufacturing Corp - and was blown away by his thinking. My first company – Feld Technologies – was definitely not run with an open book and Jack’s ideas were very provocative to me.

Over the years, several CEOs I’ve worked with have been incredibly open book, or – if you want to use today’s lingo – transparent. My two favorites are Matt Blumberg of Return Path and Rand Fiskin of Moz. Matt shares his entire board book after the board meeting with everyone at the company (now over 400 people). He’s been doing this since the beginning, and only redacts specific compensation information and occasional legal stuff. Rand shares – well everything – including one of the best, most detailed, and completely transparent posts about a private company financing in the history of private company financings.

When an entrepreneur says he’s transparent, I now ask “do you publish your board book to your entire company?” I view this as a benchmark for transparency. If the answer is “no”, then I ask the entrepreneur what he means by “I’m transparent.” If you can’t be open with your company about the information you report to your board, how can you actually be transparent?

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