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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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Calling All Boulder Tech Companies To Engage With Downtown Boulder, Inc.

Comments (23)

I had never heard of the organization called Downtown Boulder, Inc. until I was asked to keynote at the annual meeting which I did a few weeks ago where I talked about “entrepreneurial communities and why Boulder is such an awesome one.” I got plenty of positive feedback and met a number of owners of businesses – most of them retail – based in downtown Boulder.

A week or so later Dave Jilk, the CEO of Standing Cloud, forwarded me a newsletter where Downtown Boulder was endorsing HR 5660 – Main Street Fairness Act which is yet another poorly thought out Internet-related tax aimed at online retailers not operating within the state asserting the tax. I’ve written about the stupidity of these types of taxes before in posts like Amazon Fires Its Affiliates in Colorado Because of Colorado HB 10-1193. I blew this off (incorrectly, I might add) because I’m just so annoyed by all of this sort of stuff since it’s just evidence that organizations like Downtown Boulder, Inc. don’t really understand the actual business economics of having a vibrant entrepreneurial community in their downtown.

Dave ignored me and sent out a note to me and a dozen other Boulder-based entrepreneurs. This started a very engaged conversation between us (up to 35 emails in my Gmail conversation as of right now) and eventually looped in the folks from Downtown Boulder, Inc. They acknowledged that it is important for them to better engage and understand the “Second Floor Businesses” (e.g. non-retail) in downtown Boulder and how they impact downtown Boulder.

Independently I had a meeting set up with Sean Maher, the Executive Director of Downtown Boulder, Inc. in a few weeks. Niel Robertson, the CEO of Trada (now occupying the Daily Camera building) rallied and put up a database to collect information about any downtown Boulder technology company (name, address, contact, # employees, and # sq. feet occupied) where downtown Boulder is defined (by DBI) as 8th Street to 21st Street, Pine to Arapahoe.

I then suggested that we all join DBI since my experience is an organization like DBI takes you a lot more seriously when you are members. Their fee is only $149 / year, which is affordable for most tech startups. Jud Valeski, the CEO of Gnip, suggested that everyone give me the application form and check for me to deliver in one big thud (sound of pile of checks landing on desk) to Sean Maher when we meet.

So – if you are a downtown Boulder-based tech company, I have three requests:

1. Please fill out the Downtown Boulder Technology Company Impact Survey (it’ll take 60 seconds).

2. Consider joining Downtown Boulder, Inc. If you are game, drop off a check for $149 made out to Downtown Boulder, Inc. at my office (1050 Walnut Street, Suite 200) along with the information on their application form.

3. If you aren’t willing to join Downtown Boulder, Inc., that’s fine, but please do #1 AND consider leaving a comment why you don’t want to join (or send me a separate email with this information.)

Help us make Boulder an even better entrepreneurial community by linking us up with the downtown Boulder business community more directly.

  • http://freepository.com John Minnihan

    Unsurprisingly, it sounds like there are [at least] two Boulders, epitomized by the 1st floor/ 2nd floor euphemism, and their views of the internet are markedly different.

    Stating the obv, of course, but old v. new plays out like this everywhere.

    • http://www.virtuallybing.com Bing Chou

      I agree John. Having spoken to hundreds of Boulder business owners (and aspiring entrepreneurs) via the Boulder Small Business Development Center, an affiliate of the Boulder Chamber, there are definitely two Boulders in terms of business.

      Brad, kudos on rallying the technology businesses in the DBI area. Asking tech business owners who will not be joining to state why will be incredibly valuable to Sean and DBI, as well as the Boulder tech community as a whole.

      While the community has done a great job of serving its own needs, there still seem to be gaps that organizations like DBI and the Boulder Chamber can help address. That said, those organizations need help in understanding: 1) what tech businesses needs but are not being provided, and 2) how important tech businesses are to the business fabric of Boulder.

      It seems to me that there are plenty of opportunities to move the two Boulder business communities, both “new” and “old”, towards each other without toomuch overlap. Having DBI tech businesses to join DBI will move that conversation forward by helping DBI better understand that downtown Boulder is not just a collection of retail and food and beverage businesses (as important as they are on their own).

  • http://freepository.com John Minnihan

    edit:
    for folks who don’t know me: I’m not based in Boulder (I’m in Highlands ranch, abt an hour away), but have lots of friends up there. I support the community directly thru involvement w/ Silicon Flatirons, CU NVC etc. and indirectly thru sponsorship of the Denver/Boulder conferences Defrag & Glue put on by Eric Norlin.

    And I’m a huge fan (not fanboy, btw) of Foundry + Techstars and talk them up any chance I get. Not because of anything they can do for me (no business relationship w/ them, btw), but because of what they do for the community + the industry in which I spend a vast amount of my life’s time + energy.

  • http://msitarzewski.com/ msitarzewski

    Hey Brad, encourage the proper parties from DBI to attend this week’s Boulder Open Coffee Club. It’s the perfect place to discuss this kind of thing. Tuesday (2/1), 8AM, Atlas Purveyors.

    • http://www.feld.com bfeld

      Great suggestion. Will do.

  • http://www.durablestartup.com Denis

    Brad, I noticed that B&M businesses are mostly focused on prices. Their philosophy is that everything is commoditized and customers flock to the store with the lowest price. The best way to engage them & to turn them into friends of online business is to teach them about customer experience & other factors of attracting customers.

    • http://www.feld.com bfeld

      Interestingly I think many of the downtown boulder businesses are very
      good at differentiating themselves on services and unique customer
      engagement. I agree it’s what they should focus on.

    • Pat

      Only the Walmarts of the world. The SMB can’t compete on price – only on service

  • Pat

    @Brad –

    Wow,

    First question: How does Foundry Group contribute to the Boulder downtown? I do not see Foundry (nor Standing Cloud mentioned). Why should DBI listen to FG doesn’t contribute back to the community?

    Second question: How long has DBI been around? I would be willing to bet that DBI has been around for 30 or so years. And in all those years, no one once has figured out how to start a successful business. Damn its a good thing you just dropped in to lecture them.

    Third question: So because you can’t think of any ways that Amazon benefits from Colorado infrastructure, must mean that there is no such benefit to Amazon? Let me help you out:

    http://sworddance.com/blog/2011/01/30/internet-businesses-should-pay-sales-tax/

    (Partial list:
    * Police protection
    * Fire protection
    * Roads
    * Electricity
    )

    • http://www.feld.com bfeld

      Pat, in response to your first question. my partners at Foundry Group
      and I have been very involved in Boulder downtown. From a purely
      economic perspective, our office is based on the corner of Walnut and
      10th but for the past 15 years we have been investing in companies
      based in downtown Boulder. Some of these companies have been very high
      growth companies that result in significant discretionary spending in
      downtown Boulder. In addition, all of them are national in scope and
      as a result bring many people into downtown Boulder, to stay at
      hotels, eat at restaurants, and buy stuff from downtown merchants. I
      can’t even begin to imagine how much positive financial impact this
      has had on downtown Boulder over the past 15 years.

      Non-economically, we have been very involved in helping establish and
      promote Boulder as one of the best entrepreneurial communities in the
      United States. We’ve done this through a variety of activities,
      including co-founding and actively supporting TechStars (which has now
      generated 40 new companies in Boulder – many of them who remained
      downtown) and promoting Boulder throughout the country on a regular
      basis. All of this has direct positive impact on downtown Boulder
      businesses.

      Re: the Amazon argument that I see you posted on your blog (or I think
      it’s your blog) – this argument has been hashed out numerous times on
      both sides. Fundamentally I believe it ignores basic economics of
      local economies and how they work and instead focuses on a
      protectionist argument for local businesses.

      • Pat

        O.k. So you are so involved you didn’t even know about a CBA like DBI even though is clearly a central driving force behind the Boulder downtown that you enjoy.

        I notice that you paint them as “old” businesses. Or say that the owners “just don’t get it” seems like a stereotype labeling. If you don’t like my stereotype labeling, then you shouldn’t use stereotypes yourself.

        So you talked and the business owners said they liked your talk. I hoped you listened to them as well. Did you take the time to understand their issues and their fears and even their day?

        Some of the things I have found in my research:
        1) downtown business owners know way more about marketing than a bushelful of internet marketing types (some times they don’t realize how much they know).
        2) downtown business owners have a greater sense of place and community that a tech company which occupies space in a building.
        3) retail businesses know how to personally sell in a way that puts internet companies to shame.
        4) A single coffee house adds way more to a *community’s sense of self* that all the self-absorbed tech companies. A coffee house survives only because of its community that it invites into the business. A tech company is indifferent to its community which it excludes.
        5) A small business owner works hours that would put a tech company to shame. (6am-10pm in some cases)
        6) A small business owner is the point person in a way that a tech CEO only pretends to be.
        7) A small business owner relies strongly on the community to survive and thrive. (The phrase “Location, location, location” – is life or death for a retail business. Not at all important for a tech company.)

        Quick question: A tech company can have virtual workers – can a coffee house or a restaurant?

        You are also very proud of the money that you have brought into Boulder. That is easy. Giving money (which you have lots of) requires no sacrifice. I challenge you to give of yourself and to listen and understand.

        Please stop being very dismissive of people who have sacrificed a great deal for their business and work just as hard as the tech. They are not stoopid. They know what makes for a great downtown community because they have built one.

        If Foundry Group threatened to move to another city, would Boulder really care? I dare say there would be more concern about st. julien hotel and spa ( http://www.boulderdowntown.com/go/st-julien-hotel-and-spa ). How much revenue does the hotel (and its visitors) generate for Boulder v.s. Foundry?

        Finally, to your dismissal of the vast majority of my post:
        “I believe it ignores basic economics of local economies and how they work and instead focuses on a protectionist argument for local businesses.”

        Really?

        From http://www.boulderdowntown.com/lovethelocal:

        “For every $100 you spend at Boulder stores, you pay sales taxes for these city services:

        47 cents for police protection and services

        23 cents for fire protection and services

        60 cents for transportation (maintaining and improving streets, sidewalks, and bicycle paths)

        10 cents for library services”

        Sounds pretty protectionist to me, nothing on that list I would pay for… the taxes must be there purely to featherbed someone’s slush fund.

        • http://www.feld.com bfeld

          Pat, I encourage you to read my post again with an open mind. You are
          making a lot of assertions below that have nothing to do with what I
          actually said. It seems like you have a fundamental bias / issue
          against tech-related companies and/or a perspective that tech
          companies (or, more specifically, me) have a fundamentally negative
          view of non-tech companies or tech entrepreneurs.

          Your assertions that I don’t know anything about how downtown Boulder
          businesses work couldn’t be further from the truth. I’ve invested (not
          through Foundry Group, but with my own money) in several downtown
          Boulder businesses over the years. I’ve supported them financially
          when their other investors wouldn’t, just to try to help them stay in
          business. I’ve watched the owners spend enormous amount of their time
          and – in several cases – all of their personal financial resources -
          just to try to stay in business. When several of them went out of
          business and I lost my entire investment, I tried to help however I
          could to help the owners land on their feet. And, more importantly,
          even in cases where I lost my entire investment, I remained friends
          with the owners and have tried to be helpful in their next role in
          business (and in life.)

          That said, none of this is about me, although you seem to enjoy, or
          think it is important, to attack me and for some reason I’m trying to
          give you more context about my background and basis for my point of
          view. Rather, it’s about engaging the tech entrepreneurial community,
          which operates in and loves Boulder, more closely and actively with
          the non-tech community in Boulder. Both of them benefit from each
          other and – if the tech community wants to be extraordinary over a
          long period of time – it should have a great relationship with the
          non-tech community in downtown. And vice versa.

          If you read the post carefully, you’ll notice that I end by asking all
          the tech companies in downtown to help us make Boulder an even better
          entrepreneurial community by linking up with the downtown Boulder
          business community more directly. I encourage you also to engage in
          this positively, if you in fact want to make downtown Boulder an even
          better place than it already is.

          • http://www.mattemmi.com Mattemmi

            Pat,

            In my 8 years of living in boulder, there is no one person (Brad) and no one company (Foundry) that’s done more in the County for the health and well-being of Boulder.

            I know of dozens of people who have moved to Boulder because of Brad’s blog or one the companies he’s invested in. Nearly everyone I know has been effected in some way by the tremendous work FG has done over the years.

            Upon moving to NYC this summer, I found everyone here to be talking about how they could create a startup community like Boulder Co. Seeing Boulder as a role model for NYC was stunning. This community would not exist if it weren’t for Brad.

            I don’t understand your tech vs. non-tech company tone. I’ve not seen anyone draw these artificial barriers and don’t see any value in doing so. I’ve patronized countless downtown boulder businesses as I worked alongside many of these tech companies. I see them as one in the same.

            I know it’s easy to baselessly bash someone online. I suggest you do a bit more homework and research on your target before your next diatribe.

            Matt

          • Pat

            @Matt — Fine, Brad is a really great guy with sparkling teeth. As Brad pointed out that isn’t the question.

            Read my reply to Brad that I posted just now. My position is that DBI represents their members. Just because Brad disagrees with their position does not make them wrong. If Boulder tech companies want to change the DBI’s position then they should join and get involved.

            WRT sales tax and retail B&M businesses, DBI’s position is completely logical.

            If you disagree with DBI’s position go join the organization and change it! Spending time telling me how wrong I am is pointless. If DBI becomes less retail focused, fine.

            A thought though….. retail defines a downtown. Tech companies define an office park. Tech companies if they are going to be part of the general community have to figure out a way to bring the community in. Tech companies need to stop labeling retail as “old” if they truly want to be part of the greater Boulder community.

            There are lots of ways to do this:
            1) Open houses for high-schoolers
            2) Science fair sponsorship and engagement.
            3) when the street fairs are happening have an open house.
            4) when there is trick-or-treating around halloween – set up a haunted house in the office for the kids.

            But being all grumpy about perceived personal slights does not engage Boulder. Doing so requires getting off the computer, ignoring me, getting out the door, and regularly attending DBI meetings!

            P.S. wrt of people drawn to Boulder by Brad: University of Colorado at Boulder has nearly 30,000 students and … ( http://www.colorado.edu/about/ataglance.html ):

            “The University of Colorado at Boulder is a Tier 1 research institution that received more than $280 million in sponsored research awards for the 2008 fiscal year, placing us 13th nationally and 6th among all public universities.”

          • Pat

            Hi Brad –

            Thank you for adding this additional information. The fact that you have participated in Downtown Boulder businesses as an investor, is a new piece of information. A piece of information that is missing from the original post. As far as I can see you have never mentioned any such investment ( http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=site:feld.com+investing+businesses+boulder+retail+OR+restaurant )

            Also,
            Your second to last paragraph: about the tech community coming out and engaging with non-technical types is *incredibly valid*. I hope you are successful. I suspect you will end up with a much better product from those companies as a result.

            I haven’t met you, what raised my hackles was at the beginning of the post you said:

            “I had never heard of the organization called Downtown Boulder, Inc. until I was asked to keynote at the annual meeting which I did a few weeks ago”.

            So clearly you were ignorant of DBI’s existence, yet this ignorance did not stop you from saying that:

            “I’m just so annoyed by all of this sort of stuff since it’s just evidence that organizations like Downtown Boulder, Inc. don’t really understand the actual business economics of having a vibrant entrepreneurial community in their downtown.”

            Yet in spite of the just admitted lack of knowledge, this conclusion is made. Yet you are upset that I called you on it.

            From my perspective, DBI’s stance is a very valid conclusion. The act will help Downtown Boulder businesses, who are members of DBI, compete better. DBI is representing their members. It is not DBI’s problem that the tech companies that could join and cast a vote didn’t bother to join or vote.

            But claiming that DBI is lacking understanding of how entrepreneurial community works is just irritating. DBI recognizes that sales tax revenue drove the development of Boulder as it is today. Untaxed internet sales threatens that sales tax revenue needed by their membership. DBI is doing what a membership organization does – represent their members! The fact that you don’t like the result of the DBI stance is understandable.

            So join the DBI! But while you are joining the DBI and advocating against the sales tax issue. I actually dislike sales taxes myself. Very regressive.

            “It seems like you have a fundamental bias / issue
            against tech-related companies and/or a perspective that tech
            companies (or, more specifically, me) have a fundamentally negative
            view of non-tech companies or tech entrepreneurs. ”

            Hmmm – actual not, ’cause I would hate myself.

            What I dislike are well-off/well-connected people that come in and don’t understand the needs of the community before “fixing” it. (In the Bay Area we have a transit system “designed” by ribbon cutting opportunities for Tech CEOs not a system that actually serves the transit dependent community)

            What I LIKE are people that use their influence for better: Warren Buffet, Bill Gates…..

            … and I hope YOU !

            So some questions *** which are not rhetorical! I hope you can answer these affirmatively****

            1) But what to replace the lost sales tax revenue with? Hand-waving the Reagan myths does not add to the city coffers.

            Are you willing to say as Warren Buffett and Bill Gates, Sr. do “tax me more for the betterment of the community?” I hope so.

            2) All retailers compete with some thing online. All retailers will care passionately about this issue. Tech companies are less passionate (sell online some don’t). How do you propose to persuade the downtown bookstore and other retailers to agree with your position so as to get the votes to change the DBI’s position? How is not taxing internet sales in their best interest?

            3) You are a busy person. So are the companies you fund. Are you planning on encouraging those tech founders to attend the DBI monthly meetings? Will you be able to make time in your schedule? I hope so. Technologists should be more involved with non-technical types – they would produce better products!

            4) Can you educate the technology founders to not refer to B&M as “old” businesses? Can you educate them that just because a store owner does not care about the store’s website does not make them stupid nor ignorant?

      • Pat

        Oh, and you really should also understand the three-legged taxation stool that finances the state/local government ( sales tax, property tax, income tax). Each leg is focused on a completely different aspect of government. And they are *not* interchangeable.

        • http://www.feld.com bfeld

          I am quite aware of how state and local taxes work. This post was also
          not fundamentally about taxes. I get that you disagree with my
          position on Internet taxes, which is fine, However, I’d suggest that
          many people, including many state government officials (including at
          least one of the sponsors of HB 10-1193) – don’t understand the
          dynamics of Internet commerce (not just ecommerce) and, as a result,
          don’t realize how some of these tax policies actually lowers their net
          taxes based on the second order impact of behavior from the ecommerce
          companies, their affiliates, and the local consumer.

  • http://www.treklightgear.com/ Trek Light Gear

    As the owner of a downtown Boulder retail business and a member of DBI, I think this is a fantastic initiative to bring what people are calling ‘the two sides’ of Boulder together. One of the great things I’ve seen in the DBI organization is that they have always shown a commitment to evolve, to listen to the needs of our weird, wild and awesome community and always be looking for ways to make our business community stronger.

    My retail business also has a strong online presence and I have many friends in the tech startup community here in town. There may be differences between how our businesses operate but that’s exactly why we should be strengthening this collaboration and finding out how to make sure Downtown Boulder is the best business community in the country. This is a huge step in the right direction and I’m looking forward to seeing what comes from this.

    • http://www.feld.com bfeld

      Great encouragement Seth! It’s exactly how I feel.

  • http://www.oceanmediainc.com Kyle Claypool

    I’ve been to a couple of Boulder startup events (Ignite – Boulder, for instance) and love the energy and enthusiasm of that town! The startup/tech scene is still pretty new there, isn’t it? Or am I just discovering it later than most people? Either way, kudos to all those who participate!

    • http://www.feld.com bfeld

      It’s been growing steadily over the past 15 years with a real
      acceleration in the past five.

  • DaveJ

    Brad: one correction, my original note was addressed to DBI, with all of you copied.

    I’m sort of curious what businesses in downtown Boulder really compete with Internet retailers. Restaurants & bars – no. Coffee shops – no. Weird t-shirt, bead, crystal shops – no, their sales are mostly impulse and tourist. Athletic gear – a little. Peppercorn and other specialty shops – maybe a little. Boulder Bookstore – sure, but people who favor Amazon over BB do so because of selection and convenience, not sales taxes – after all, they have to pay shipping and wait for the book to show up. Just wondering what I’m missing here? Who are these Boulder retailers that are losing business to the Internet?

    • http://www.mooreds.com/ Dan Moore

      Hi DaveJ,

      I think that any of the retailers that sell physical goods (Peppercorn, shoe stores, athletic gear, the Boulder Army Store) compete to some extent with online retailers. You make a good point about some of the purchases, especially at the bead-type shops, are impulse/tourist driven, but I don’t think that purchases at Prana or Peppercorn have the same motivation. (Banks are also affected.)

      I guess it depends on your buying habits (are you an impulse buyer, or can you wait the 2-10 days for shipping), but with mobile tools like RedLaser, I don’t expect the problem to go away anytime soon.

      I don’t know to what extent people are shopping in physical stores but purchasing online, but I did dig up some interesting academic papers that touch on the issue:

      Do Internet Tax Policies Place Local Retailers at a Competitive Disadvantage (2006):
      http://www.scstatehouse.gov/citizensinterestpage/TRAC/StreamlinedSalesTaxSubcommittee/Exhibit%20E-2.pdf

      Tax avoidance is part of internet shopping (2006?):
      http://else.econ.ucl.ac.uk/conferences/consumer-behaviour/ellison.pdf

      Etailing affects rents in malls (2000?):
      http://cbeweb-1.fullerton.edu/finance/jrepm/pdf/vol06n02/v06p185.pdf

      No easy answers, in my opinion.

      Dan

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