Month: August 2012
I’m still buzzing from yesterday. The entire day was dedicated to TechStars Demo Day in Boulder. It started with a run on the Boulder Creek Path, followed by Demo Day, lunch with Paul Berberian, Mark Solon, and Pam Solon, a handful of TechStars meetings in the afternoon including one with the guys from J-Squared Media (members of the very first TechStars program), a hangout with Jerry Colonna at his new house in Boulder, dinner with Jerry, Mark, Pam, David and Jill Cohen, Nicole Galaros, and Jason Seats, and then the TechStars Demo Day afterparty.
When I got home at 11:30 I was done. Deeply happy, but wiped out. I woke up late this morning (7am) and wandered into my kitchen to see Mark Solon on his laptop preparing for a run (Mark and Pam stayed at my condo in Boulder this week). We talked for a few minutes and the deep pleasure we were both feeling about being alive and part of the Boulder startup community was apparent.
He then said something that I noticed last night but hadn’t thought much of. At about 10pm the Boulder Cruisers, on their weekly Thursday ride, went by Shine where we were having the afterparty. There was the usual cheering, hooting and hollering, and just generally good karma at 10pm on a warm summer night. This morning, Mark pointed it out as a magical moment. The mix of two totally different communities of people – a huge crowd of entrepreneurs, nerds, and techies in Shine crossed with an equally cruising bike crowd on the street. And the only feelings that were flowing were happy ones where everyone was glad to be there.
Mark then said “That’s the magic of Boulder and TechStars. Everyone is part of the community. Everyone feels like part of the community. Every single person at TechStars Demo Day was part of it – whether they were mentors, investors, lawyers, or the hundreds of people from the broader Boulder tech community who attended.”
The third of the four key principles of the Boulder Thesis at the core of my Startup Communities book is “The startup community must be inclusive of anyone who wants to participate in it.” We saw that on display in many different ways yesterday. Listening to Mark play it back to me reinforced once again how powerful it is.
TechStars Boulder Demo Day was today and all I can say is WOW! This is the sixth TechStars program in Boulder and I’m just blown away by the entrepreneurs, their companies, the mentors, the investors, and the Boulder community. Clare Tischer put up a TechStars Demo Day 2012 post with descriptions of the companies and links – rather than repeat that here, I’d encourage you to go take a look. There are already a handful of posts from various teams up – my favorite so far is a tribute to Nicole Glaros from the RollSale gang.
If you are an investor and missed demo day but find any of the companies interesting, it’s easy to connect with them via the TechStars Demo Day Email Intro App (ok – that’s not the official name for it, but it just reinforces that you shouldn’t let me name things.)
And – if you are interested in following the story of these teams, the Founders series is back in the fall that tracks a number of them through the program. Here’s the trailer.
I just got out of a meeting with one of the TechStars Boulder teams from the first program. They are going strong, have grown a sizable company, and are amazing people. It makes me so incredibly happy to get to hang out with and work with everything around TechStars. David – thanks so much for showing up for random day in 2006 – it continues to be an awesome journey.
Many of you know that I’ve been working on several new books this summer. I’m completely obsessed with the radical transformation of our society from a hierarchy to a network, the integration of the machines into every aspect of our lives, and the radical transformation of the way – as humans and organizations – we work. Hopefully this shows through in what we invest in (for example, most recently Full Contact and Modular Robotics).
As a result of this obsession, I’m launching Startup Revolution, starting now.
I view Startup Revolution as a movement. Since my partners and I started Foundry Group in 2007 we’ve had an incredible experience working with a hundreds of entrepreneurs across the US in the 50 or so companies we’ve directly funded. We co-founded TechStars and have gotten to work with thousands of amazing entrepreneurs and mentors, many of whom are also incredible entrepreneurs. We’ve written a few books, including Do More Faster and Venture Deals and met many more entrepreneurs through them. We’ve invested in other VC funds with our own money (and subsequently met even more entrepreneurs) and evangelized tirelessly about startups around the US, working with organizations like the Startup America Partnership.
Lots of community has developed around startups, what I’ve learned, and what I think at the Feld Thoughts site, but I want to create a community that is broader. My partners and I continually learn all kinds of things about startups. We learn by doing – through our investing at Foundry Group. But we also learn by teaching – through writing (books and blogs), talking to entrepreneurs continually about what we are thinking, and evangelizing the power of startups and entrepreneurship as widely as we can. And all of this makes us better investors.
The Startup Revolution movement is another step in this. Like any new thing, I’m launching early and iterating often. The next few moves are the Startup Revolution site (and subsites for each book – Startup Communities, Startup Life, Startup Boards, and Startup Metrics). Leave anything you want me to add, change, or think about in the comments.
Finally, pre-orders for Startup Communities: Building an Entrepreneurial Ecosystem in Your City and Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur are now up on Amazon.
The Startup Revolution is well underway. Don’t be left behind.
My partner Seth Levine turns 40 today. I’ve known and worked with him for 11 years. It’s been awesome.
My first memory of Seth is him showing up in our office at 100 Superior Way with red velour platform shoes. There wasn’t much I could say since I was probably wandering around barefoot or in sandals at the time. But it made an impression – I knew he’d always be more stylish than me.
Seth started working with me in the fall of 2001. This was a truly shitty time for me for a variety of reasons, some having to do with the implosion of many of the companies I was an investor in due to the collapse of the Internet bubble, some having to do with 9/11, and some having to do with the overall stress on the system from lots of directions. Seth didn’t seem to mind that most of our conversations started with me saying something like “well – this is all fucked up, but I need your help on …”
I remember when I realized I was going to learn a lot from working with Seth. We were working together on Service Magic. He’d dig in deep and really understand what was going on. I had a pretty strong sense of it using my jedi number mind trick. But when I really wanted to understand something about their extremely highly analytical business, I just asked him. And he always knew the answer.
There came a point early in our work relationship when I realized I completely trusted his judgment. I knew he’d get whatever work done that was put in front of him, and this was good, but it was really table stakes for being a VC. Seth quickly took it to the next level and within a few years we were working as partners on things, even if we theoretically weren’t partners. That would change – in 2007.
In 2006 we started talking about creating Foundry Group. The early conversations were clear – this would be an equal partnership, not a “Brad thing” with other people working for me. The last thing I wanted was a hierarchy of any sort, especially since I’d fully embraced the concept of a network in all aspects of my life. Seth embraced this and on day one when we started Foundry Group was an equal partner with me.
Five years later I realize how unbelievably lucky I am to have three equal partners – Seth and our partners Ryan McIntyre and Jason Mendelson. We are best friends, love working together, and treasure each moment of life that we get to spend together.
Seth – your 40th birthday is a special one. I remember 40 like it was – well – almost seven years ago – and it was the beginning of what has been an awesome decade so far for me. I’m thankful that I got to spend so much time with you when you were in your 30s and I now get to spend so much time with you while you are in your 40s. It’s going to be an amazing time!
Happy birthday @sether.
Rajat Bhargava and I have been working together since 1994. We’ve been involved in creating seven companies together (the most recent ones are MobileDay and Yesware) and, while most have been successful, we’ve had a huge number of positive and negative experiences along the way. We’ve mostly had a lot of fun and, when we haven’t, we always made sure we figured out what went wrong.
Minda Zetlin just put up an interview with us on the Inc. Magazine site titled 4 Signs You Should Say ‘No’ to a VC which I thought was excellent. She explores the entrepreneur – VC relationship and suggests four warning signs for an entrepreneur when interacting with a VC.
- The VC isn’t fascinated with your product
- He (or she)’s just not that into you
- You can’t be completely honest
- The VC doesn’t treat you like an equal
The paragraph on “you can’t be completely honest” is a seminal moment in my relationship with Raj. It also was a key point in my work career where, upon reflection, I completely and totally grokked the importance of being honest in the moment, clear about my reasoning, and willing to change my perspective based on new information, rather than feeling stuck in simply delivering a message. The section from the article follows:
“The important thing is to be completely transparent,” Bhargava says. “It’s very, very difficult to be transparent about your business, but it goes a long way toward building that relationship. ‘Here’s what I’m going through; here’s what I’m struggling with; here’s what I need help with.’ You have to know if that will spook the investor or if they’ll want to dig in and help you.”
That ability to be honest was a great asset in Feld and Bhargava’s relationship when they worked together on Interliant, the only one of their ventures that did not survive. After some politicking by a different executive, Feld removed a part of the company’s operations from Bhargava’s oversight. Bhargava took a few days to calm down, but then he explained forthrightly how disappointed he was and why he believed Feld had made the wrong decision. “Being open and directly confronting the issues, you get through it,” Bhargava says now. “I felt hurt, but I think our relationship is that much stronger.”
As for Feld, he recalls returning to his hotel after discussing the matter over dinner and feeling physically ill. “I knew I had completely screwed up,” he says.
I count Raj as one of my closest friends and trust him with my life. He’s had an enormous influence on how I behave as an investor and how I interact with entrepreneurs. Raj – thanks man – I look forward to many more years working together.
This week I had two meetings with CEOs of companies we’ve recently invested in where the question of “what is an ideal board meeting” came up. I’m writing an entire book on it called Startup Boards: Reinventing the Board of Directors to Better Support the Entrepreneur so it’s easy for me to define my ideal board meeting at this point since my head is pretty deep into it intellectually.
One of the things I always suggest to CEOs is that they be an outside director for one company that is not their own. I don’t care how big or small the company is, whether or not I have an involvement in the company, or if the CEO knows the entrepreneurs involved. I’m much more interested in the CEO having the experience of being a board member for someone else’s company.
Being CEO of a fast growing startup is a tough job. There are awesome days, dismal days, and lots of in-between days. I’ve never been in a startup that was a straight line of progress over time and I’ve never worked with a CEO who didn’t regularly learn new things, have stuff not work, and go through stretches of huge uncertainty and struggle.
Given that I am no longer a CEO (although I was once – for seven years) I don’t feel the pressure of being CEO. As a result I’ve spent a lot of the past 17 years being able to provide perspective for the CEOs I work with. Even when I’m deeply invested in the company, I can be emotionally and functionally detached from the pressure and dynamics of what the CEO is going through on a daily basis while still understanding the issues since I’ve had the experience.
Now, imagine you are a CEO of a fast growing startup. Wouldn’t it be awesome to be able to spend a small amount of your time in that same emotional and functional detachment for someone else’s company? Not only would it stretch some new muscles for you, it’d give you a much broader perspective on how “the job of a CEO” works. You might have new empathy for a CEO, which could include self-empathy (since you are also a CEO) – which is a tough concept for some, but is fundamentally about understanding yourself better, especially when you are under emotional distress of some sort. You’d have empathy for other board members and would either appreciate your own board members more, or learn tools and approaches to develop a more effective relationship with them, or decide you need different ones.
There are lots of other subtle benefits. You’ll extend your network. You’ll view a company from a different vantage point. You’ll be on the other side of the financing discussions (a board member, rather than the CEO). You’ll understand “fiduciary responsibility” more deeply. You’ll have a peer relationship with another CEO that you have a vested interest in that crosses over to a board – CEO relationship. You’ll get exposed to new management styles. You’ll experience different conflicts that you won’t have the same type of pressure from. The list goes on and on.
I usually recommend only one outside board. Not two, not three – just one. Any more than one is too many – as an active CEO you just won’t have time to be serious and deliberate about it. While you might feel like you have capacity for more, your company needs your attention first. There are exceptions, especially with serial entrepreneurs who have a unique relationship with an investor where it’s a deeper, collaborative relationship across multiple companies (I have a few of these), but generally one is plenty.
I don’t count non-profit boards in this mix. Do as much non-profit stuff as you want. The dynamics, incentives, motivations, and things you’ll learn and experience are totally different. That’s not what this is about.
If you are a CEO of a startup company and you aren’t on one other board as an outside director, think hard about doing it. And, if you are in my world and aren’t on an outside board, holler if you want my help getting you connected up with some folks.
I continually refer people to the post I Don’t Hate Marketing which is a great example of a bunch of chocolaty goodness all rolled into one little post. Now, my friends at Haiku Deck have made it slick and pretty!
Don’t let your marketing suck. Set your story free with Haiku Deck.
I’m Going to See Legitimate Front Play the Fox Theatre August 25th!
If you are in Boulder on August 25th, join me at the Fox Theatre at 8:30pm to see my partners Ryan and Jason debut their band’s album Off The Hook. I’ve long followed their musical exploits through their former band Soul Patch – Legitimate Front is their latest collaboration.
Off The Hook has a modern but retro-inspired sound with musical DNA from the 1970’s. I’ve heard a few of the soon-to-be released tracks, and I really like them. You will too, if you liked the 70’s music scene – their original music celebrates everything from 70’s hard rock to R&B to funk.
The $13 ticket price gets you in the door and lets you download the album for free – the tickets are available here.
I’ve been told that their special guest, Dechen Hawk is also giving away his album with the price of admission.
I spent most of the day yesterday at TechStars Boulder. Demo Day is a week away and I did my annual “talk about how to finance your company” thing which included meeting with each company and giving them advice on where they were in the process. As I walked to dinner, I felt incredibly energized – once again there is a great set of companies coming out of the program and it’s awesome to reflect on the progress that they’ve made in 90 days.
My “near the end of the program” talk has become a ritual for a few of the programs – I just sit around and answer questions about the financing process for an hour. This lets me tune the discussion specifically to what’s going on and what is top of mind of everyone at this stage in TechStars. Since everyone in the program is in the room, they get to hear specifically what their peers are going through and how things are being addressed. This is obviously not a steady state phenomenon from year to year as while some of the issues and dynamics around fundraising stay constant, the environment is continually changing.
I woke up to an email this morning from Isaac Squires of Ubooly which said “Best Analogy Ever: I think it went something like – “VCs are like D&D players – I’m the psi mage, and Jason is the barbarian…” It was part of my rant about VC archetypes.
One of the biggest mistakes entrepreneurs make is to assume “all VCs are the same.” Over and over again I hear questions like “how do I raise venture capital” or “how do I approach a VC”, or “what does a VC want to see in the first meeting”, or “now that I’m going to pitch a VC, what should I show them?” The answer – generically – is “I have no fucking idea – WHO are you meeting with?” This usually gets the person’s attention, at least a little.
The point I go on to make is that there are dozens are archetypes of VCs. Yesterday I listed half a dozen quickly off the top of my head using one line descriptions. I then paused and used an analogy that occurred to me in the moment and caused all the nerds in the room to smile. I said something like:
“Think about D&D, or Magic the Gathering, or any other game like that. The VCs are individual characters in D&D. Each character has a different set of skills, weapons, money, and experience points and over time develops more. A firm is a combination of different characters – at Foundry Group you might have a mage and a barbarian – and the combination is what you have to pay attention to.”
I played a lot more D&D than Magic (D&D was my junior high school game of choice) but the analogy holds exactly for Magic or even in simpler form Werewolf. One you realize you are dealing with many different archetypes with different skills and skill levels, and the configuration of these archetypes into a firm are similar to how characters combine and interact in a battle, you realize that there is no “generic VC.”
I moved off the analogy to make the point that you should do your research on the person and firm you are talking. It’s easy to do today via the web and the power of all the network connections between people. If you understand who you are talking to, what motivates them, and what they care about you can both target them better as well as have a much more effective conversation with them.
I expect I’ll use this analogy again and again – it’s better than saying “there are lots of different VC archetypes.” I need to think a little harder about the specific archetypes at Foundry Group since right now we all appear to be 3-D printed bobble-heads when you look at our website. At least there’s the consistent theme of beer in the background.