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

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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.

Q&A on Startups, DevOps, and Agile

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Raj Bhargava (CEO of JumpCloud) and I have been talking about how startups can leverage DevOps and Agile more. We created a conference on DevOps last year for our portfolio companies and it was a huge hit.

DevOps is a movement that we are deeply interested in from multiple perspectives. It’s integral to almost all of the companies we invest in and many, especially in our Glue and Protocol themes, are DevOps driven companies.

In addition to investing in these companies, we are promoting DevOps concepts throughout our portfolio, encouraging learning activities such as the conference, and involved with initiatives such as DevOps.com that is a site to educate the IT community about DevOps.

When Raj asked me to do a Q&A with him on my views around DevOps to help more people understand why I am excited about it, I immediately said yes. If you are interested in hearing my thoughts around how companies can leverage Devops, head on over to JumpCloud’s Q&A with me on DevOps and SaaS and let us know what you think.

And – if you are a VP of Marketing, JumpCloud is looking for a great one.

In WordPress Hosting Hell? Pantheon Now Supports WordPress

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You may noticed from prior posts that we’ve had a difficult time at Foundry Group managing our growing portfolio of WordPress sites. We are not alone. You would think that by now, managing websites would be a solved problem, but that’s just not true.

Talk with any professional marketer about their websites and two things will become clear: 1) websites are absolutely central to how digital marketing gets done and 2) websites are a giant pain in the ass.

In our portfolio of startup companies, following is how websites usually get managed.

When companies are just getting off the ground, the founders often build the websites themselves, increasingly with flat HTML because it is simple and efficient. The websites are usually thought of as simple extensions to the product themselves.

At some point (hopefully) the business starts growing and a professional marketer is brought on board. In order to do their jobs marketing needs a content management system, often WordPress for simple use cases.

This is where things start to break down. Startup engineering teams are now tasked with managing a CMS system. This may be simple at first, but things get complicated very quickly. Hosting offers little beyond just hardware and maybe some server configuration. Professional website developers need much more than that — they have to collaborate in teams, work with version control, deploy changes, and as the company grows scale their site and make sure it is running fast 24×7 — aka website DevOps.

Guess who’s responsibility this becomes? The startup’s ops and engineering team. Every hour invested in this marketing infrastructure comes directly out of the bandwidth available for product improvements. Total break down.

At Foundry Group we went through a similar pattern, but here at Foundry it was Ryan (a co-founder and former engineering leader at Excite) who played the role of VP Eng. He spent too many hours over the past year baby-sitting our WordPress mess. He eventually got sick of me texting him that there was a problem somewhere.

This is why we are so excited to announce that our portfolio company Pantheon now supports WordPress. Over the past two years they have worked entirely in the Drupal ecosystem (their roots) and now run over 55,000 sites. They have built an incredibly powerful multi-tenant platform with the best set of website developer tools in the world and a container based run-time that can scale sites from 0 to >100M page-views entirely in software. All of their technology is now available to WordPress developers.

We like many of their customers were begging for some time for them to support WordPress. That day has finally come. Ryan is retiring the website pager and I’ll have to find some other way to annoy him on a regular basis.

Rover Cuddles Up to $12 Million

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Today, Rover announced that Menlo Ventures has led a new $12m round of financing. As is our style, we participated, but we’re excited to have a new partner to join us, Madrona, and Petco in this fast growing adventure.

Lots of VC firms are once again talking about online marketplaces. Some get it; many don’t. Being systematic about what it takes to build and scale a marketplace effectively and make it an enduring enterprise is difficult.

We learned this dynamic in the early 2000’s with our investment in ServiceMagic. We invested in the company in 1999 during the ascension of the Internet bubble. We loved the two founders, Michael Beaudoin and Rodney Rice, but knew very little about marketplace businesses or the home improvement category. But a lot of people were funding marketplaces and other online “things” in this arena – well over $500 million of VC capital went into the home improvement market alone.

It was an unmitigated disaster for almost every company except ServiceMagic. In 2000, Michael and Rodney cut the business drastically, changed the business model to a lead-fee system, which they pioneered online. By 2003 nearly all of their competitors had failed, the companies that went public pre-bubble were trading sub-$1 / share, but ServiceMagic was growing like crazy and was very profitable.

Before ignoring vanity metrics became trendy, ServiceMagic ignored them. Michael and Rodney were data obsessed, getting hourly reports with key metrics. They understood the different dimensions of the business and were laser focused on drivers of supply and demand in each market they operated. They eschewed slick marketing, were systematic about growing headcount, learned how to master local expansion models, and stayed obsessively focused on the quality of transactions, instead of simply the quantity, moving through the marketplace.

We invest early in the life of a company. While we weren’t the first investor in Rover, when Madrona partner Greg Gottesman called and told me that I had to meet Aaron Easterly, the co-founder of Rover, I happily obliged on my next trip to Seattle. In ten minutes I knew I wanted to back Aaron as he had the same characteristics as Michael and Rodney. And, while after 10 minutes I knew nothing about the dog sitting market, as a dog owner I instinctively understood and appreciated the problem.

So – our first order sort in the case of Rover was Aaron and the team. We loved what we saw. No bullshit. Total quants. Deep domain love. Complete lack of interest in marketing nonsense and overpromotion.

And yes – after a little more exploration it was clear that Rover had a huge addressable market. Current commercial solutions are generally despised and the opportunity for a two-sided marketplace is enormous. Best of all, there are very obvious RAM (remnant asset monetization) dynamics to the marketplace.

Sure enough, a year after our initial investment, our premise for the investment in Rover shows clearly in the data. All of the underlying marketplace metrics – including activation, fill rates, and repeat usage – are accelerating rapidly. Dogs owners trying the service now will spend twice as much monthly as those trying the service 18 months ago. Sitters joining the marketplace now will earn 50 times more money in their first three months than those signing up 18 months ago.

Oh – and Michael Beaudoin from ServiceMagic joined the board last year as one of our outside board members.

If you are a dog owner, or want to be a dog sitter, try Rover out today.

Orbotix: Creating the Future of Connected Play

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I’ve loved being involved in Orbotix from the very beginning. I got to know Adam and Ian, the founders, even before they got into Techstars. Their original company name was GearBox and they probably wouldn’t haven’t gotten into Techstars except that both Nicole Glaros and I said “we love these guys – fuck it – let’s try a hardware company this time.”

Paul Berberian, one of Adam and Ian’s lead mentors during Techstars joined them as the third co-founder before demo day and we led the seed round shortly after. Orbotix is now 40 people, with hundreds of thousands of Sphero’s out in the wild and being played with, and a new product (currently codenamed 2B) coming out this fall.

The company is on the forefront of a new category I like to call “connected play.” It’s not a static toy, like kids have been playing with since the beginning of time. It’s not a game on a pane of glass like an iPhone or iPad. It’s a dynamic toy that you can play with online, via  your pane of glass, or in the real world, with friends, connected together online. And it gets upgraded continually, with new software and new games.

I’ve talked in the past about how I love origin stories. I bet you didn’t know that before there was Sphero, Adam and Ian made an iPhone-based garage door opener well before that was cool and trendy. Enjoy the three minute origin story of Orbotix.

Orbotix: Creating the Future of Play from Sphero on Vimeo.

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