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March 28, 2008

Board Skills and Personalities

I really enjoyed Jeff Bussgang's post about American Idol in the Boardroom.  I think that he cleverly captured the personality types you need on a Board -- domain expert, cheerleader, and truth teller.  The truth teller is usually the person who the entrepreneur gets mad at the most.  But, they are the most valuable -- you need people on your Board who will bring objective input to the company from the outside and who will challenge assumptions.  You have to remember that investors and Board members are not your friends.  You want to have a good, open relationship with them, but you don't want them pulling any punches or worrying about your feelings.

I've often thought that investors tend to bring three types of skills to a company, each person with their own combination.  Note that this is different than the personality types that Jeff described.  In general, when you finalize outside investment and put your Board together, you want to get representation from all three personality types and all three types of skills below.

Skills from VCs:

  1. Raw intellectual horsepower.  There are many VCs who are just super smart.  They can connect the dots faster than anyone else and think through the outcomes of various courses of action.  They often may be linked to the truth teller as you want the smartest person to not pull any punches.
  2. Deep contact network.  Most VCs have deep rolodexes and close contacts with people in the industry -- potential partners, acquirers, other entrepreneurs, other investors, etc.  You should certanily expect to leverage these networks from your VC.  Make sure that the individual you bring on the Board has these connections directly, rather than representing connections that their firm has.  Most entrepreneurs will tell you that VCs are generally poor at leveraging relationships that their partners have.
  3. Attention to detail.  You want to have an investor or Board member who will read everything and try to understand everything.  A lot of VCs are so busy that they don't have time for the details.  But, the management team needs to focus on the details, and, hopefully, one investor or Board member will be digging into these details to make sure that management stays on track.

As you put your Board together, make sure you have a good mixture of these skills and the personalities that Jeff Bussgang described.  Think about each prospective Board member along these dimensions and make sure you know how you score them on these scales.

These days, many entrepreneurs are raising angel money rather than VC money.  That's a good thing, but it doesn't mean you shouldn't think about your Board.  You can still put a Board together with some angel investors or industry people to give you an independent, outside perspective.  Too many times I see very early stage companies that don't put a real Board together.  These companies tend to 'breathe their own exhaust' for too long and lose site of where the real market opportunity really is.

Are there other styles or skills that you would like to see from Board members and VCs?

March 26, 2008

Clifford Stoll is crazy...

...and really smart...and fun to listen to.  Another great TED Talk.


Amazon has better music

This article in VentureBeat reminded me to post something about Amazon Digital Music.  I've totally stopped buying music from iTunes.  Amazon has a great selection of totally DRM-free MP3 files.  You can easily move files to multiple devices, including non-iPod devices.  Their pricing is the same as iTunes and oftentimes better.  And, they have a downloading app that easily adds your downloaded music to your iTunes library so it is easy to get the files onto your iPod.  The files are all encoded at 256kbps, so the quality is great.

You should definitely try it the next time you are tempted to browse the iTunes store.  It looks like more and more people are going with Amazon.  And, I think it is important that Apple not have a virtual monopoly on digital music.

March 25, 2008


Finally added one on the right sidebar.  Long overdue.  Conveniently powered by NewsGator.

Topless Meetings

Don't get upset.  I'm not advocating some level of undress for business meetings.  Instead, I'm glad to see that some businesses are declaring that meetings should be free of laptops (or 'top'-less), PDAs, etc.  This was written up in today's Boston Globe.

Now, sometimes a laptop is necessary in a meeting.  That's the case where the presenter or meeting leader needs the laptop to display a presentation or as a focus point of collaboration.  I could imagine some types of meetings where you are brainstorming and want people to be able to do their own searches while you come up with ideas.  All very good.

But, the cases where people bring their laptops and PDAs in order to sneak a peek at their email or otherwise be distracted are very damaging.  If some people aren't paying attention, then others won't either.  This makes the meeting even more of a waste of time.

I don't like meetings.  I think that they can be very inefficient.  I remember having a meeting-hating boss who used to count up the annual salaries of all the people involved in a meeting and announcing every once in a while how much money the meeting had cost.  In a big company where everyone feels that they have to be part of every meeting, the cost skyrockets.

Meetings work when there is a clear leader, a defined agenda, crisp discussion and decision making, and well documented action items.  A well run meeting can take less than half the time of a poorly run one.  And, it can get better results.

If people aren't paying attention, it sends a message that the meeting isn't important and that one person's time is more valuable than the rest.  This is very divisive.  I'd rather make sure that the meeting is run efficiently, and then let people get back to their office, and the laptops, in order to plug back in to their email, IM, and social networks.  You could argue that for some jobs these activities don't add value anyway.  So, why would you let people do them in a group setting, dragging down everyone else's productivity?

March 24, 2008

Strategies For A Downturn

Today's Wall Street Journal had an article about how businesses can weather and even succeed during a downturn.  If you are blocked from reading the article due to the lack of a subscription, here are the highlights:

First, don't panic.  You can't predict how long or deep a downturn will be.  So, plan for the long term.  Hopefully, your business is not so highly leveraged that you have some economic cushion.  Debt-ridden companies or those that are thinly capitalized are a the most risk.

Seize opportunities while you can.  JP Morgan's purchase of Bear Stearns is a great example.  It looks today that they will have to pay more than they first thought in order to satisfy existing shareholders, but the price will still be pretty cheap.  JP Morgan moved fast to take advantage of a very unique situation.

Look overseas for growth.  If you export, then your US-dollar denominated products should look cheap these days.  And, many international markets will continue to grow even if the US is slow.  Lastly, there are different technology requirements in different markets.  Your product may very well be a better fit in some international markets than it is in the US today.

Keep debt low.  I have always been a believer in this.  I think that businesses that keep their debt level low and manageable have the most flexibility.  Similarly, they will have the cash around to take advantage situations which arise from weaker companies in distress (see Bear Stearns).  These cash-strong businesses can also invest more in new product areas while their weaker competitors can not.

Get your resume on the street.  If you haven't been an active networker, now is the time.  I have met many 40+ and 50+ executives lately who have been in one job for a while and are now looking for their next opportunity.  In some cases, they haven't been actively networking and have to establish relationships from scratch.  That's tough to do, particularly if you want to break into a new market sector, like clean energy.  I always advise people to devote some of their time to networking events in whatever sectors interest them.  You have to make a conscious commitment to this, perhaps attending at least 2-3 events per month.  Find the groups you like that have the most dynamic membership.  Don't fall into the trap of just sitting down for coffee with the same group of 10 or so people every time.  Although that might be enjoyable, if you aren't meeting new people through this effort, it's friendship and not networking. 

I use Outlook to capture my contacts.  Every once in a while, I go through and look at how many new contacts I have added each month.  If I see that the numbers are down, I know that it is time to push myself out into some new networking events.  No one knows everyone!

March 23, 2008

Walking the Greenway

I walked the Rose Kennedy Greenway today in Boston.  This is the park that sits atop the submerged Route 93.  It's the 'big win' from the Big Dig.  The idea is to have a park that runs through the city, stiching together neighborhoods that were separated by the elevated highway that had been up for decades.

It's pretty much complete, but not as green as the above picture suggests.  The trees are still very small.  It feels like a narrow wasteland through the city.  There were a few other walkers, but not a lot of activity.  Maybe it will be nicer in the warmer weather.

I think that the Greenway needs some small scale buildings and kiosks to draw people into it.  It's a thin series of block-wide parks.  There are plenty of benches, but people aren't used to hanging out there.  Many of the buildings are turned away from the Greenway because they didn't want to look out over the old ugly elevated highway.  Some nice cafes and small shops would be nice, but I don't know where they plan to put such things.

I walked this path to really see the new city vistas.  After having lived in Boston for so many years with the old elevated highway, it looks much more open now.  The skyline is beautiful while walking through the park or sitting on one of the many benches.  I hope people get into the habit of taking advantage of it.

Play Ball!

There are a few times when my love of entrepreneurship overlaps with my love of sports.  Here are a couple of those stories.

I first met the founder of Dugout Central when it was called BaseLine Report.  The idea was to creat a baseball-specific community oriented around highly detailed content that would appeal to the rapid, stats-oriented fan.  The founder was working with former Yankee Mike Pagliarulo.  As a Yankee fan, I was intrigued.  However, I had big concerns about how big you could build such a specialized community.  And, it wasn't clear how you could make money from such a community.  i suggested to the founder that he try to bootstrap the company before he raised VC funding.  They had some deals to syndicate some of the scouting content that Pags was generating.  I thought they could use this revenue to get the site started.

Although the founder didn't really want to hear this, that's what they ended up doing.  In fact, by coincidence, they hired another friend of mine to design their site in exchange for equity.  Luckily, my friend had outside consulting income which gave him the flexibility to design the Dugout Central site in his spare time.  And, as a baseball nut, he was motivated to work on this.

Now, they seem to be building some traffic, have an interesting site, and are in business.  I am still not sure of the revenue model, but, like many web sites, starting off on a shoe string is the way to go.

Although I don't have the same type of connection to this one, I've also met the founders of Fancaster.  This is an interesting marriage of YouTube and play-by-play.  Users generate live play-by-play accounts of games that they are watching.  Other people can listen in while they watch the same game.  I think that there are some potential legal issues here, but I also see the potential for some budding broadcasters to make a name for themselves.  I wish them well.

As baseball season is about to begin, hope springs eternal.  My Yankees have made some moves to get younger, but probably not enough for my taste.  I don't expect them to win this year, but I hope they are building a good young foundation for the future.

March 19, 2008

I can't go to sleep, they need me

One of my favorite lines in the movie Fever Pitch is when the the Jimmy Fallon character declines the chance to go to Paris with the Drew Barrymore character because the Red Sox "need him" to attend the games at Fenway.  That's a great insight into the overly committed sports fan.

And, I have reached that point on this year's Boston Celtics.  I've gone to about half of their home games.  And, I watch most of their road games on TV.  Last night, I was up late watching them break the Houston Rockets 22 game winning streak.  The night before, I watched them come back from an early 22-point deficit to beat the Spurs, also on the road.  I'm sleeping less, but I am sure that they "need" me to watch while they are on the road.

The Celtics got off to a great start, but the experts expected them to come back down to Earth when they had to go on the road and play all the West Coast powers.  But, they have a great record against the West, including on the road.  And, after they play in Dallas and New Orleans in their next two games, they will have finished the most difficult part of their road schedule.  Their home schedule includes upcoming games against Phoenix and New Orleans.  After that, their April schedule looks relatively easy.  If anything, they run the risk of not being tested enough immediatley before the playoffs.

They have been the most consistent team in the NBA this season, and they play the best defense.  They now have a deep bench, including the recent additions of PJ Brown and Sam Cassell.  They have the rest of the season to integrate these new pieces, keep everyone sharp, make sure that recent minor injuries are healed, and tune up for the playoffs.  I love their style of play -- tight defense, lots of player movement, and unselfish passing.  But, when they need the superstar to just make a shot, they still have Pierce, Garnett, and Allen.

I wrote last month about Doc Rivers being Coach of the Year.  I still think he deserves it.  Sure, they have a lot of talent.  But, Doc made sure that these players blended together perfectly, with no complaints about roles or playing time.  It's particularly a tribute to Ray Allen who had to sacrifice more than the other big players in order to fit in.

Paul Pierce won't win the MVP, but he is probably the Celtics MVP.  Kevin Garnett has been fantastic.  His intensity and defensive commitment set the tone for the Celtics from the start.  But, Pierce has come through with the big defensive plays, the big rebounds, assists, and scoring.  He is all over the box score with his defensive contribution starting to be recognized throughout the league.  Pierce was immature earlier in his career, but it's great to see him get a chance be on a winner after toiling with under-talented and inexperienced teams for the past couple of years.

So, if you see me with bags under my eyes, check the Celtics schedule.  They probably had a late night game the night before, and I was watching because I know they "need" me.

March 17, 2008

The Name Game

Congratulations to my friends at the former IDG Ventures, now called Flybridge Capital Partners.  In reading about how they picked their name, it was reminiscent of how we picked the name for Sempre Management:

  • Easy to say; easy to spell
  • The name has some meaning that you can tie to the business and positioning
  • The trademark is available in your target market -- the more creative you get, the more likely this will be the case.
  • The domain name is available in a basic format (avoid hyphens, abbreviations, acronyms, etc. in the URL as no one will remember them).  Ideally, buy a bunch of domain names that are similar to your main one so people who guess wrong will still find your site (and your email).
  • I like the name Flybridge in that it does tie into their business (once you learn the meaning of the boating term).  And, the short form (flybridge.com) was available as a domain name.  Although people may not know what it means, it is easy to say and spell.

We like Sempre for similar reasons -- a musical term meaning "to perform in the same manner throughout".  Hopefully, it will be music to an investor's ears!  People confuse it with Semper, the Latin word from the same root.  Hopefully, this won't cause us spelling problems in the future...Also, they think we must be ex-Marines -- Semper Fi!

The Wall Street Journal had an article today about naming a small company.  They point out that most people don't put the time into picking the right name and regret it later.  Like most things, it pays to get it right the first time.

If you can't read the Journal article because it is behind their subscription firewall, here are some tidbits (the web site says that the article is on page R7 of the March 17, 2008 Journal if you look in the hard copy):

But many small companies don't understand the basics of choosing a good name. They put little thought into the process, says Peter Montoya, president of a financial-services marketing firm in Tustin, Calif., and end up settling on names that are meaningful to them but not clients.

Find the Unique

But, Don't Be Obscure

Avoid The Mundane

Get Reactions -- Ask Friends and Clients before you finalize a choice

One other thing I have learned over the years in naming companies and products -- you may not like it the first time you hear it.  Let it sink in for a while before you make a final choice.  That's where reactions from others, over time, can be very important.  Don't rush the decision process -- you'll be living with the results for years.

March 13, 2008

Entrepreneur means you can't give up

Jeff Bussgang from IDG Ventures wrote recently about a breakfast sponsored by AlwaysOn to promote their upcoming AlwaysOn - East conference.  Jeff points out that many entrepreneurs play 'Blame the VC' when their business plans don't get funded.  It's true that some entrepreneurs are so enamored with their business plans that they feel that the VC who passes on the deal must be stupid.  And, if 50 VCs pass on the deal, they all must be stupid.  But, I haven't found this view to be very prevalent in the entrepreneur community.

I was at that breakfast, too (and had the pleasure of sitting next to Jeff).  My view of the entrepreneurs' tone was slightly different.  There were quite a few entrepreneurs who spoke up about the fact that their business plan had been funded, but not by Boston VCs.  Perhaps their plan was funded by angel investors, corporate investors, or the ever looming West Coast VCs.  I have some expereince helping out entrepreneurs whose plans I think deserve to be funded by VCs. Some of them have a lot of commercial traction.  Despite some introductions, Boston area VCs haven't moved ahead and funded these entrepreneurs.

But, these entrepreneurs aren't deterred.  They have raised money from angel groups and individual investors.  They are courting VCs that are out of town.  And, they have modified their plans to take less initial capital in order for them to prove some commercial viability before they go try to raise more money.

If these entrepreneurs succeed, it doesn't mean that Boston area VCs are dumb.  Maybe they are too conservative.  Maybe they don't understand the market segments that these entrepreneurs represent.  Maybe they are unwilling to back first time CEOs or willing to build out a team after they fund the company.  Maybe they can't justify a small initial investment.  The best entrepreneurs won't let this stop them.

Instead, these top entrepreneurs with their strong plans will let the marketplace show who is right.  There is a lot of capital out there from many sources.  A great entrepreneur has to be a great sales person.  If you can't sell your plan to anyone, then either you aren't good at sales or the plan really is flawed.  The whole world can't be dumb, can it?

Since we are raising money now for our new investment fund, I have a front row seat for these types of meetings.  Some of our target investors have strategies that don't line up with ours.  Others only look for funds with a certain profile that perhaps we don't meet.  It's our job to find investors who are the right match for our fund.  There seem to be more than enough out there of this type that we can get our fund off the ground.  We're very encouraged by the response and optimistic about our success.

But, if we aren't successful, it will be because of a shortcoming of our team or strategy, not the fault of our target investors.

March 08, 2008

For some, MIT for free

I was happy to read about this today:

MIT announces need-based financial aid plan - The Boston Globe

As a donor to MIT, I am happy to see them using their endowment to make MIT more affordable for more students.  MIT isn't the first to do this, but they are as aggressive as anyone in raising the maximum income for a student to attend free ($75K), in not counting home equity in the calculation, and in eliminating loans as part of the financing package for lower income students.  There is more information in this letter from President Susan Hockfield to the MIT Community.  There are some interesting facts in here:

  • Average net tuition for MIT students was only $8,100.  Of course, about 10% pay in full and more than one-quarter now will pay zero.
  • Median debt for MIT graduates is only $11,500.  This is very low for a top-tier school.
  • More than half of the class of 2007 graduated debt free.

Of course, there are self-serving reasons for doing this.  Harvard, Yale, Stanford and others have made similar moves, and MIT has to compete.  Also, Congress has been pressing many universities to use their large endowments for just this purpose.  But, as I have kept in touch with some of today's MIT undergraduates, I know how significant the financial strain of going to MIT is.  This type of move should provide some welcome relief.

It's great to see the donations of the alumni being used to lighten the load of those who come afterwards.  The only thing missing is a reminder to today's undergraduates that they will have a responsibility to do the same after they graduate and are successful.

March 07, 2008

Good example of bootstrapping

My good friend, Stacy Swider, has started another company, Talkphoria.  Stacy is co-founder of GateRocket, a company I have been advising since its inception.

Talkphoria is starting out in the best way a company can.  Stacy saw a market opportunity from her own life.  She's an avid reader and a member of a book group, along with a bunch of other suburban moms.  But, moms are busy these days and have varying interests.  It's hard sometimes to get everyone together in person and to agree on what books to read.  So, Stacy had the idea of hosting virtual bookgroups at Talkphoria.  Hosts post the books they are reading and set times for conference calls.  The conference calls are hosted by a third party provider at a very low cost (each caller pays).  Visitors to the site browse for books they are interested in discussion and join the calls they are interested in.

Like all new consumer-oriented start-ups, you have to work hard to get the word out.  Stacy is exploring many types of partnerships to get some exposure.  Who knows how big this can be?  But, I love the entrepreneurial spirit that sees an opportunity and is willing to pull this together on her own time and money (not a lot of money so far). 

You can follow Stacy's progress on her blog.  As Stacy is juggling multiple jobs (mother, wife, entrepreneur), you get a flavor of all of this on her blog.

March 06, 2008

Got Fooled Again

I listen to a lot of NPR via podcast, including On Point.  Tom Ashbrook is a very good moderator who keeps the discussion moving.  Yesterday's show got me thinking:

WBUR & NPR's On Point : Bogus Memoirs, Book Publishers, and Us

I listened to the show last week with the author of what turned out to be a bogus memoir.  The author was compelling and drew a lot of sympathy.  She was a mixed race woman who had grown up in the projects of LA, caught up in gangs and drug trade.  Or, so she claimed.

It turns out that the whole book and her claims were bogus.  She lied about everything.  Today, On Point addressed the issue of bogus memoirs, and it made me think about journalistic standards in general, including bloggers.

Some journalists have complained that bloggers aren't held to the same standards as more conventional journalists.  To be sure, you don't know how accurate anything is that you read.  These bogus memoirs drive home the point that this isn't only an Internet phenomenon.  Liars and frauds have been with us for a long time.

The only solution is for people to build up and defend their reputations and for frauds to be exposed for all to see.  In this case, Tom Ashbrook clearly felt horrible about being fooled.  Kudos to him for coming forward immediately and apologizing.  He's defending his reputation.  Maybe publishers of non-fiction should do more diligence on their authors.  But, of course, they can't fact check an entire book.  This memoir may have been exposed, but what if the author had just exaggerated and embellished her otherwise true story?  There's no way you can expect a publisher to catch that.  It would be too expensive.

Democratizing media has its risks, but it's still better to have all the new voices.  We all just have to be vigilent about who we believe.

March 05, 2008

Guilty of Relaxation

For the first time in years, I took the Acela to New York City from Boston today.  I had to get down to NY for some early meetings and get back to Boston in time for a Board dinner.  Long day.
But, traveling on Acela was a breeze.  I strongly recommend it for anyone going to NY on business, particularly if you live in Boston or near the station in Westwood.  I don’t live near either, and I still thought it was a good trip.

I was on the 5:20 AM train from Back Bay Station.  Being used to arriving early before flights, I got to the station at 4:45 AM (after parking my car).  I was too early.  The station was locked!  There is no need to get there that early.  They opened the station at 5 AM, plenty of time for everyone to get on the 5:20 AM train.  Next time I’ll get the extra 15 minutes of sleep.

The ride itself was incredibly pleasant.  After being harried on so many shuttle flights and scrambling between planes, taxis, and traffic, I almost felt guilty just sitting at my seat, snacking on a bagel and coffee, and catching up on my email.  My laptop was plugged into the outlet, and the Verizon broadband wireless was doing a decent job keeping me connected.  I happened to see an old friend on the train, and we had a nice chat.  The 3 ½ hours passed pretty quickly as we were comfortable and productive.  Door to door, from my house to the parking garage to the train station to Penn Station in NY was 4 hours and 45 minutes.  That’s probably about 30-45 minutes longer than a typical trip to the airport for the shuttle, depending on traffic to Logan and from La Guardia to midtown Manhattan.

Even with the extra time, it was worth it.  I got a lot done, much more than I could do on a plane trip.  And, I arrived very relaxed, rather than stressed out.  As I said, I almost felt guilty enjoying the travel.  Business travel isn’t usually like that!

March 03, 2008

Glad I bought one of these


I bought one of these jerseys at the Super Bowl.  Although the shock of the loss hasn't really gone away, it would be much tougher if the Patriots didn't have Randy Moss next year.  Glad he signed today.

The word on Obama

Whenever I have written about politics, I have tried to be as even handed as I can.  I've tried to focus on principle rather than on candidates.  But, I read something today that crystallized my own feelings on Barack Obama.

Marc Andreessen wrote about his meeting with Barack Obama in early 2007.  His summary of Obama is:

Smart, normal, curious, not radical, and post-Boomer.

More interesting to me was Obama's answers to the two big questions: 1) lack of executive/management experience and 2) lack of foreign policy experience.  On 1), Obama predicted that he would run a well-organized campaign.  Hard to argue with that.  And on 2), he points to his personal background and his experience on the foreign relations committee.

That second answer is OK, but doesn't really show experience.  I'd like to see Obama complement himself with some real hands-on experience, like Bill Richardson.  Perhaps he will.   But, in general, I don't think any Senator reall has foreign policy experience.  They may have knowledge, but not real experience.  That comes from being in the State Department, an ambassador, at the UN, etc.  You have to face real trade-offs to have experience.

We have a family friend who had Obama as a law professor at the University of Chicago.  She calls him the smartest person she has ever met.  That confirms Marc's impression of intelligence.  And, Marc is pretty smart, you have to be smart to impress him.

I was drawn to Obama for many of the resons Marc listed.  I also think that he is one person who can really unite the country.  After almost 16 years of very divisive politics, I think that the country wants to come together more than we want to argue.  Most politicians and pundits don't get this.  That's why so many Republicans ignored Rush Limbaugh's lambasting of John McCain.  They liked McCain's moderate positions and appreciate his frankness and independence.  More proof that we, as a country, want to be united and less polarized.

I expect that Obama will win the two major primaries tomorrow in Texas and Ohio.  If he does that, it's over.  And, we should have a pretty interesting general election season.

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