Counter Cliche: But It’s Ok If Some of Them Turn Out to Be Frogs This week, Fred says You Can’t Kiss All the Pretty Girls, meaning that it’s easy for VCs to get a little carried away, get outside their strike zone or core thesis for investments, put money to work in too many places, and make some mistakes. Sure, some pretty girls turn out to be nightmares when you actually start to date them. But if you’re a VC, it’s ok if some of the pretty girls turn out to be frogs. You have a diversified portfolio. You invest in dozens of companies, and as many VCs have said over time — you lose all your money on 1/3,…
Category
Entrepreneurship
Big Apple, Little Company
Big Apple, Little Company Ed Daciuk, on of my blog subscribers, questions: What is your view on the benefits of being in NYC as a startup? Fred wrote a good posting several months ago and a related one this week on early stage investing in the NYC market from the perspective of a venture capitalist. His main points: (1) NYC is a great place to invest in early stage tech-related businesses as long as they’re not "core technology" businesses like semiconductor or hardware, because (2) core technology companies are more exciting to investors, and therefore the investors have clustered around those companies in places like Silicon Valley or Boston. He also thinks this dynamic is changing as more and more…
Counter Cliché: And Founders, Too
Counter Cliché: And Founders, Too This week, Fred’s chiche is that "the success of a company is in inverse proportion to the number of venture capitalists on the board". I’d argue that the same statement is true of founders or management. Boards help govern the company and watch out for shareholder interests. Boards give outside perspectives and strategic advice to the company’s leadership. Boards hire and fire the CEO. And — more and more every day with large public companies — boards keep management honest. How can these critical functions occur when a Board has too many members of the management team on it? They can’t. We’ve had outside directors at Return Path from Day 1. I’m not advocating that…
Counter Cliche: Pick a Geek Term
Counter Cliche: Pick a Geek Term Fred has a good cliche this week — he talks about how an organization has a particular "clock speed" and needs to hire people who can operate at that speed. I agree whole-heartedly but have always referred to this exact thing in a different way. We have always said when we’ve acquired another company that we need to "port that company onto our Operating System." So pick your favorite geek term, but I like the notion of porting someone to another operating system better because it implies that people can change a little bit more.
Counter Cliche: I Know When I See One, Too
Counter Cliche: I Know When I See One, Too I haven’t written a counter to one of Fred’s VC Cliche’s of the Week for a while now, but today’s was too good to resist. While I haven’t (and most entrepreneurs haven’t) worked with 200 VCs, I have seen, heard about, been one (sort of), and worked with enough of them to know enough to comment as follows: as is the case with Fred and entrepreneurs, I’m not sure I can define what makes a great VC in one phrase, but I know one when I see one, and here are some of the characteristics they exhibit: – Major pattern recognition — "I’ve seen this movie before, and I know how…
Book short: Myers-Briggs Redux
Book short: Myers-Briggs Redux Instinct: Tapping Your Entrepreneurial DNA to Achieve Your Business Goals, by Tom Harrison of Omnicom, is an ok book, although I wouldn’t rush out to buy it tomorrow. The author talks about five broad aspects of our personalities that influence how we operate in a business setting: Openness to Experience, Conscientiousness, Extroversion, Agreeableness, and Neuroticism. These traits are remarkably similar to those in the popular Myers-Briggs Type Indicator that so many executives have taken over the years. It’s not just that you want to be high, high, high, high, and low in the Big 5. Harrison asserts that successful entrepreneurs need a balance of openness and conscientiousness in order to be receptive to new ideas, but…
Million Dollar Baby
Million Dollar Baby I had one of those aha moments today while looking over some insurance numbers with Rob Mattes, our CFO (and a gentleman and a scholar). I know it’s dangerous to think about dollars in the aggregate across years, but I’m pretty sure that by the end of this calendar year, we will have spent close to $1 million on insurance over the course of the 7 years we’ve been in business at Return Path. I think I gagged when I realized that. I mean, one million dollars? Really? How is that possible? And how many other ways would I have rather spent that million dollars? Well, it all adds up — we have coverage for, among other…
Memory Lane or Dark Alley?
Memory Lane or Dark Alley? We had an interesting meeting today. A small group of the old-timers at Return Path, including one of our founders who doesn’t work at the company any longer, convened a summit to brainstorm ways to reinvent our original, original business, Email Change of Address (ECOA). For those of you who don’t know what it is, ECOA is a very simple idea — that people who change email addresses need help updating their personal and business contacts, and also their most trusted commercial email newsletter relationships. It’s a free service for consumers, and a paid service for opt-in email marketers and publishers who use our service to reacquire their customers with renewed permission and a shiny…
Book Short: Which Runs Faster, You or Your Company?
Book Short: Which Runs Faster, You or Your Company? Leading at the Speed of Growth, by Katherine Catlin at the Kauffman Center for Entrepreneurial Leadership is a must read for any entrepreneur or CEO of a growth company. It’s one of the best books I’ve ever read targeted to that audience – its content is great, its format is a page-turner, and it’s concise and to the point. The authors take you through three stages of a growth company’s lifestyle (Initial Growth, Rapid Growth, and Continuous Growth) and describe the “how to’s” of the transition into each stage: how you know it’s coming, how to behave in the new stage, how to leave the old stage behind. I didn’t realize…
Angel Investors, Part II
Angel Investors, Part II A while back, I posted about angel investors and strategic investors, and the puts and takes of taking money from them as you start your business. Tom Evslin has a great and much longer post today about finding and dealing with angel investors that’s worth a read if you’re giving any thought to this topic.
Like Fingernails on a Chalkboard
Like Fingernails on a Chalkboard Anyone who worked in the Internet in the early days probably remembers all-too-vividly how silly things got near the end. Even those who had nothing to do with the industry but who were alive at the time with an extra dollar or two to invest in the stock market probably has some conception of the massive roller coaster companies were on in those years. The memories/images/perceptions all come crashing down in the latest chapter of Tom Evslin’s blook hackoff.com in a manner that reminds me of the sound of fingernails racing down a chalkboard. You’ve heard it before, you can’t forget it, you squirm every time you hear it, but you can’t tear yourself away…