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August 28, 2009

Person-to-person communications

I wrote yesterday about how the personal touch (exemplified by the late Senator Kennedy) is an essential part of building relationships with people.

According to today's Wall Street Journal, this is becoming a lost art with today's youth.  Call me a curmudgeonly old man (why not, my family does), but I think that it is essential to put down our digital appliances and just talk to other people once in a while.  If you don't get your kids into the habit of doing this, they'll never learn.

I am a pretty avid computer user and blog (of course), use Facebook, Twitter, and spend plenty of time on email.  I'm not against any of these services and find them very valuable.  But, there is also a place for personal connection.  Losing the ability to read non-verbal cues is a major disadvantage in life.  It will hurt you in job interviews and in business dealings (at least until everyone loses the ability to read non-verbal cues).

We try to have a family dinner most nights of the week.  Texting and cell phones aren't allowed.  We actually try to have conversations.  With two teenage kids, it's not always easy.  But, we're all better off for it.

My biggest pet peeve in business is having someone look away from a conversation to check their email or text messages.  Why not just hold up a sign that says "There must be something in there that is more important than you"?!  The worst example of this I have seen was during a company pitch.  There were three people in the room -- the CEO, the VP of Engineering, and me, the VC.  When the CEO was finished with the intro, he turned the presentation over to the VP of Engineering for the technical portion.  And then, THE CEO CHECKED HIS EMAIL!  I am sure he had heard the pitch before, but if he wasn't interested, why should I be?  And, I wasn't.  In fact, I stared at the CEO for a good five minutes before he realized that I wasn't paying attention to the VP of Engineering, who was getting increasingly nervous.  Needless to say, the company didn't get very far.

Don't get so immersed in social media that you forget how to just be social.  And, in business, it's very valuable to understand the Science of Schmooze.

August 27, 2009

Personal Touch

I spent a lot of time yesterday thinking about the passing of Senator Ted Kennedy.  He was elected to the US Senate when I was 1 year old and had always been a visible public figure in my life here in Massachusetts.  Whether you agreed or disagreed with him philosophically, whether you forgave or were horrified by his personal troubles, there was no doubt that he cared deeply about the people he represented.

I am always most moved by the Ted Kennedy stories where he put his own time into helping or comforting some 'regular' person.  He wasn't doing this as a quid pro quo for a donor or political ally.  He wasn't doing it for the press coverage as there was usually none at the time.  He didn't brag about it later in speeches.  He just did it because he thought it was the right thing to do.  This personal empathy for his constituents is an important lesson for all of us.  So few leaders exhibit tihs quality today.

Here are two stories from today's Boston Globe which highlight this aspect of Senator Kennedy's life:

His compassion lifted many

A man who knew pain eased it in others

And, a couple of quotes from the second one:

There was no use arguing.

It was Aug. 18, 2008. The senator read in the paper that two servicemen from Mashpee had died in Iraq and Afghanistan. He knew their grieving families would be together that afternoon, gathering for sandwiches and fortitude before a candlelight service at Mashpee’s veterans memorial.

It didn’t matter that he was in the middle of yet another chemotherapy treatment at Massachusetts General Hospital. It didn’t matter that he was clearly exhausted. It didn’t matter that people would understand if he couldn’t make it. He wanted to be with them.

“When you think it’s the moment not to call, that’s the moment to call,’’ he always told his aides. “The sooner, the better.’’ He wanted the relatives to know he was there if they needed him and to tell them he had lived their pain.


The ailing senator was in no hurry to leave. He had words of comfort for every person in the house that afternoon.

“It gave me great admiration for him,’’ Maria Conlon said, “that somebody going through such a hard time with his own life, and for everything he’s suffered in the past, and still, he took the time to go to the family’s house, to sit there, not for five minutes, but for hours.’’

He wanted to attend the candlelight service, he told the families, but it was best for him to stay away.

“If I go, I’ll be in the spotlight,’’ Vicky Baron, Paul’s aunt, recalled him saying. “I don’t want to take away from what these young men did and what they gave up.’’ 

And so the senator hugged the grieving families goodbye and left the house, unseen.

I find these types of personal connections inspiring.  They remind me that in everything we do, it pays to take the time to have a personal touch.  I've done a bunch of fund-raising for various charities.  In looking back, the approaches that have worked the best have been the phone call, the in-person meeting, and, the most effective of all, the hand-written note.  Taking the time to write something by hand in this era of word processing and email and Facebook and Twitter shows a real commitment to the cause and to the recipient.  Personal commitment elicits a response, whether it is from donors, customers, partners, or investors.

If Senator Kennedy had the time to do this, we can all find the time.  It's a matter of putting our time into what's important.  And, a personal touch is one of the most important things of all.

August 25, 2009

Steering clear of the rocks

Q: What's the one thing in common among every business plan that has ever been pitched to an investor? 

A: The plan is wrong.

Don't worry about the plan being wrong.  The plan represents a set of assumptions that hang together to produce a business venture that, if everything went according to plan, will generate positive returns for the investors and other stakeholders.  It's impossible to get all of the assumptions right.  It's management's job to adjust the plan as the assumptions don't line up.  Somethings go better than you expect.  Other things go worse.  And, there will be factors which emerge that you never considered.  That's what makes being an entrepreneur fun (and stressful!).

One of the most common mistakes that entrepreneurs make is failing to recognize that things are going off track until it is too late.  Entrepreneurs are optimists, generally.  You need that optimism or you'd never try to get a venture started.  Objectively, the odds are against you.  But, it's the thrill of the opportunity that motivates most entrepreneurs.

You can't panic when you miss your first milestone or your first assumption turns out to be false.  But, you should objectively analyze the impact.  If your development project is starting to fall behind, can you really make up time in the coming few weeks?  Or, should you re-adjust some of the features and change priorities to add more slack in the schedule?  If your revenue generation is behind schedule, can you realistically make that up in the remaining months of the year?  Or, should you ratchet down your initial assumption to match the reality.

There is no easy answer for this.  But, here are some things to keep in mind as you analyze.

  • Don't dismiss any missed milestone or projection as 'no big deal'.  You need to find the root cause and assess whether other assumptions you have made are wrong.  One of the most common occurrances is the cascading of missed objectives.  An optimistic assumption in one area is usually coupled with optimism in other areas.  Even when you re-double your efforts, it can become hard to avoid falling behind faster due to the inherent optimism in the original plan.
  • Get objective input.  It's very hard to avoid drinking your own Kool-Aid as an entrepreneur.  You are the visionary that sold everyone on this plan.  You convinced everyone that you could overcome the obstacles.  So, as the new obstacles appear, you still believe you can overcome those, too.  I'm not saying that you shouldn't try.  But, you need to get someone outside the daily fray (board member, advisor) who can assess the situation and give you objective feedback.
  • Listen!  Your board members, advisors, and team members are probably trying to give you some subtle messages about adjusting the plan.  There's a fine line between giving up on the plan and making the right adjustments.  A key skill for the CEO is to be able to listen objectively to all input, question their own assumptions, and then make the right decision.
  • Act early, act often.  Early action when a plan is going off track is your best friend.  By taking early action (adjusting sales plans, reallocating resources, cutting expenses, etc.), you are buying yourself the most time to get back on track.  If you make up your shortfall or catch up on your project plan, it's not hard to ask the resources back that you may have given up.  Or, you may find that you can get by just fine with less.
  • There's no shame in adjusting the plan.  The real shame is in failing to adjust the plan.  Again, here is where the entrepreneur's passion can become their weakness.  You've overcome so many obstacles to get your business to this point.  Of course, you can overcome the current obstacle, too.  What you have to think about is, what if we can't?  Am I spending too much money for the case where we don't get back on track?  Chances are, the answer is yes.  Way more companies have gone out of business by spending too much money than by spending not enough.  Keep the odds in your favor by adjusting your spending as quickly as possible when you start to go off track.
  • Don't wait for the Board to force you into making changes.  Most times, the Board will defer to management as management has much more detailed information.  So, if you believe that you can make up for a miss, the Board will usually give you a shot.  But, just make sure you aren't fooling yourself first.
  • Most of the 'misses' with a plan are negative, but you may also exceed aspects of a plan.  This is great when it happens.  Don't be afraid to adjust a plan updward if you are really confident that you are ahead of the curve.  If you really are growing ahead of plan, no one should object to ratcheting up the spending proportionately, too.

I'd be interested in other approaches that people have taken when your best laid plans go astray.  Please share them in the comments.

August 24, 2009

Dinosaurs aren't going anywhere

Scott Kirsner has a very interesting blog post today entitled "Why Waltham Doesn't Matter."  His opinion is that most of the local VC's (particularly those with offices in Waltham in what Scott calls Mount Money) are dinosaurs that are out of touch with the latest happenings in the local tech community.  They don't pay attention to young entrepreneurs and don't fund ideas in the coolest new technologies.  Like a bad doctor, Scott has the symptoms correct but the diagnosis wrong.

Most of the more established VCs do tend to focus on areas that have been successful for them in the past.  And, they'd prefer to work with entrepreneurs who have been successful in the past, too.  There are so many risks with early-stage start-ups, why not increase the chance of success by limiting the places where you will fail?  And, there have been plenty of strong returns in recent years from following this formula.  I'd submit that the list of local IPOs and large acquisitions is dominated by companies in this category.  There are exceptions, but this is where the money has been and, for many, continues to be.

There are other VCs who can't break into this space successfully.  Or, perhaps they decide that to make their mark, they'll venture into some riskier waters.  The jury is still very much out as to whether they'll make money from these deals.  There are some good exits to date, but not enough to prove the point.  The contrarian in me will argue that they have a better chance of long-term success as these areas should be less crowded and will attract less capital in the short-term.  In fact, if every local VC flooded these new areas, they'd probably overfund a lot of mediocre companies, which would hurt everyone.

I've focused on the exits because that's what VCs and their investors (limited partners) care about.  Market development, fostering young entrepreneurs, networking events, etc. are nice.  I actually like them and have participated in more than my fair share.  But, they don't pay the bills unless they lead to deals that generate big returns.  Some VCs may feel that they do.  Others may feel that they can generate large returns without them.  I don't see the point of bashing one strategy over the other, particularly when I think that the old-fashioned way is still generating stronger returns.

I like Scott.  He's on a mission to have us all invest more in developing our local market.  Many of the VCs he's bashing do that, but perhaps not in the way he'd like.  They sponsor entrepreneurial events at MIT and elsewhere.  They've all done at least some deals in newer technology categories (even if they don't take the brave step of having the recent college grad run the company).  It might be nice if more of them did even more.  I think that seeing strong returns from the upstarts will make that happen.  Until then, Scott's 'dinosaurs' will continue to do pretty well for their investors and themselves.

And, don't be blinded by all the market development activities that Scott mentions.  At least some of those firms do these mostly for marketing appearances.  They want to appear to be more 'early-stage' and 'leading edge' than they really are.  Check out how many of these early-stage, seed-stage, wet-behind-the-ears deals that these firms really do.  Some, but not a lot.  Just like the dinosaurs.  They just do a better job marketing themselves doing it.

I'd love to see more VCs networking with young college students and entrepreneurs.  I've done a lot of mentoring of first-time entrepreneurs.  Although they are passionate, most of them don't deserve to be funded (just like most business plans put forth by experienced entrepreneurs).  It's a very fine sieve that filters out most of these unworthy ideas and leads to the small number that do get funded.  There are also a bunch of interesting ideas that don't fit the 'venture model' and have to get funded by other means -- angels, bootstrap, etc.

I think Scott would be more successful if he was less harsh.  He can heap praise on all the nice market development activities that he is in favor of.  But, he should also recognize the deals that become the strong exits that pay the bills.  Once some of the upstart firms that back upstart deals generate outsized returns more consistently, you'll see even more activity, even by the more established firms.  Until then, the dinosaurs and the evolving new species will co-exist.

August 22, 2009

It's the Future

After all my invitations to The Donkey Show, I have to provide a review after the show.  See also this piece in Sunday's Boston Globe describing the production.

My friend, Kevin, said it best as we were boogieing on stage at the end of the show.  I asked him if he liked The Donkey Show.  He said "It's the future."  And, I think that Diane Paulus has shown us what the future of theater is like.  It's more of an experience than just a play.  At a play, you sit quietly in your seats and applaud politely at the end of each act.  Maybe you stand and clap at the end.  And, it's all very nice.

That has nothing in common with The Donkey Show.  The show starts out on the street where the characters give you a glimpse of what will go on inside Club Oberon while you wait in line to get in.  When you enter the night club, you can do some disco dancing with more of the cast while you have a drink or two.  At some point, it segues into the start of the show.  Although the plot isn't very heavy, it parallels Midsummer Night's Dream.  But, it isn't Shakespeare.  Most of the lines are straight out of disco song lyrics.

The place to see the show is from the dance floor.  These are 'standing room' tickets, but no one stands still.  Not only do you end up dancing along to the disco standards, but you have to move around as the show happens around you.  The actual play was probably only 75 minutes long, but everyone stayed to dance with cast for quite a while afterwards.  I'm probably the last guy you'd expect to be disco dancing on stage, but, since there is photographic evidence somewhere, I'll have to admit to it.

The Donkey Show is something you experience.  It's more like a concert than a play, although there is very good acting.  The characters keep it going, from before the show starts to the dancing afterwards.  I'm definitely going back, and I'm bringing more friends with me.  Don't forget to bring your camera.  Taking pictures is encouraged!

Tonight I was on the dance floor.  And, although we have reserved seats for another date, I'm going to exchange them for dance floor tickets.  Like a good club, the action doesn't stop on the dance floor.  You won't want to miss it.

Back off, Jim

Even as a Yankee fan, I always liked Jim Rice.  He was a fearsome hitter for the Red Sox in the 70s and 80s, when I followed baseball with a youthful fervor.  I think he played the game the right way and was happy that he finally made it into the Baseball Hall of Fame this year.

Yesterday, while at the Little League World Series, Jim complained about the bad example that many of today's major leaguers set for kids.  He cited Manny Ramirez and Alex Rodriguez.  I can accept the criticism he puts on both this ex-Red Sox and current Yankee.  However, he threw Derek Jeter into the same category.  Now, back off, Jim.

Derek Jeter is the ultimate gamer.  Rice complained that today's major leaguers only play for the money and don't care about winning as a team.  You can say that about a lot of players, but not Jeter.  Even the most die-hard Yankee-hating Red Sox fans have told me that they respect Jeter as a fantastic competitor.  He's never had a hint of off-field issue, and he gives generously to children through his Turn 2 Foundation.  Maybe Rice is jealous of today's high-paid players.  There is no doubt that Jeter is highly paid.  But, I don't think the Yankees have regretted one dollar of it.

Jeter even diplomatically brushed off being included in Rice's criticism.  He's a class act, and Rice should apologize.

In case you forgot, Jeter gives his all to win.  Check out this video from 2004 (photo below).  That's not the effort of an overpaid spoiled brat.  And, no Yankee fan was surprised that Jeter was setting a sterling example.

August 21, 2009

Fake news, real discussion

I love The Daily Show.  We went to see it being taped back on August 3rd.  It was incredible to see how they do the whole show in just one take, breaking only for commercials.  At the show we saw there was no editing and no re-takes.  They got it right the first time, with impeccable comic timing.

But, even more impressive is that Jon Stewart can actually have an intelligent discussion with a guest, with comedy mixed in.  Last night, he had Betsy McCaughey on the show.  It was her op-ed piece that started the 'death panel' ruckus, although she never used that phrase.  Instead, she said that the health care bill called for "euthanasia for the elderly", which is not true.

Jon Stewart does a great job interviewing her.  The interview ran long for the show, but is captured in three parts on the web site.  It's worth watching.  It also makes me long for more meaningful discussion of these issues on real news shows.

Part 1

Part 2

Part 3


The Daily Show With Jon StewartMon - Thurs 11p / 10c
Betsy McCaughey Pt. 1
Daily Show
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The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Betsy McCaughey Extended Interview Pt. 1
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Political HumorHealthcare Protests
The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Betsy McCaughey Extended Interview Pt. 2
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Political HumorHealthcare Protests

August 20, 2009

One more reminder about The Donkey Show

One more reminder about the special offer I have going for The Donkey Show at the American Repertory Theater's OBERON (2 Arrow Street in Cambridge) Saturday, August 22, at 8 PM.  If you email me, I can send you a special discount code that will let you buy dance floor tickets for half-price for this performance.  We've got a nice group going, and the more the merrier!

August 19, 2009

Tax holiday, not math holiday

For the first time since I was a kid, I wrote a letter (or email) to the newspaper today.  Today's Boston Globe had an editorial entitled "Let retailers host tax holiday."  Although I agree with the general sentiment that the state should allow retailers to pay the tax on the part of consumers if they want to, the editorial got the math wrong.  As a long-time math geek, I couldn't let this one pass.  My email to the Globe:

In today’s editorial, “Let retailers host tax holiday”, the Globe got the policy right but the math wrong.  I am in favor of allowing retailers to pay the sales tax on the part of the consumer.  But, for this to be revenue neutral to the state and the consumer, the math doesn’t work.


If an item is sold for $100, there would normally be a $6.25 tax charged by the retailer and sent to the state.  The consumer is out $106.25, the retailer makes $100, and the state gets $6.25.  If the retailer wants to ‘pay the tax’ on the part of the consumer, they would charge the consumer $100, but what do they send to the state?


If they send the state $6.25, that implies that the item cost, without the tax, was $93.75 (a 6.25% discount).  That would normally mean that $5.86 in tax would be charged, for a total consumer cost of $99.61.  So, the retailer would be overcharging the consumer 39 cents and passing this on, in full to the state.  That keeps the state revenue neutral, but overcharges the consumer.  And, the consumer would pay a total of $100 vs. $106.25, a 5.88% discount (not 6.25% as was incorrectly calculated in the editorial).


An alternative would be to charge the consumer $100 and send the state $5.88.  This reflects an underlying item cost of $94.12.  The $5.88 is 6.25% of this.  This is neutral to the consumer and would reflect a 5.88% discount.  However, the state loses $0.37 or 5.92% of the original tax revenue.  This is probably what you meant when you said ‘have the retailer pay the tax’, but will cost the state some money (but nowhere near as much as a state tax holiday).  In these tough times, the state probably can’t even afford this.


To keep the state and consumer neutral and have the whole thing funded by the retailers, the best idea would be to keep the item price at $100, charge the consumer $106.25 total, including the $6.25 sales tax, and do an after-the-fact rebate of $6.25 to the consumer.  The state gets their full $6.25, the consumer only pays $100 net, and the retailer ends up with $93.75.  No law needs to be changed or passed for this to happen.  It’s not clear that a 6.25% rebate would be attractive to consumers, but that’s the one that makes the math work.


The bottom line to all of this is that to undo a 6.25% mark-up (our sales tax), you only need to take a 5.88% discount.  Perhaps it’s this confusion that caused our elected representatives to take a voting holiday on this issue.  Let’s hope they spent the time studying arithmetic.




Mike Feinstein



It's a fine point, but somehow or another, retailers have to report their sales and tax payments to the state.  So, the math has to be right.  And, basic math seems to elude even well-educated editorial writers at times.

August 18, 2009

Join us at The Donkey Show

Yesterday I announced my special offer to join me at The Donkey Show at the ART's OBERON in Cambridge this Saturday.  We've got about 10 responses so far, so come join usEmail me for details.

August 17, 2009

Blogging our way to the theater

I've been a subscriber to the American Repertory Theater in Cambridge, MA since 1982.  As a long-time supporter, I recently joined the Board of Trustees.  In honor of that, I'm making a special discount available to readers of this blog (as well as my Facebook friends, Twitter followers, and LinkedIn Connections).

I'm very excited about the first show of the season, The Donkey Show.  I've been to rehearsal, and it's going to be wild.  Think Midsummer Night's Dream set at Studio 54 at the height of the disco era.  It's playing in a night club setting at OBERON (formerly Zero Arrow Theater, Cambridge).  Based on the success of the six-year run in New York City as well stops in London and Seoul, this is guaranteed to be a unique and enjoyable time.

Here's the special offer for readers of The Fein Line.  I'm hosting the performance on this Saturday, August 22, 2009, at 8 PM.  If you want to join me at this performance, email me for a special discount code that will let you buy 2 dance floor tickets for $25 (that's half-price!).  And, you'll be in the middle of all the action.  Tickets for other dates are always available at the box office.

If we get a good response, I'll organize an informal meetup before the show, near the theater.  See you then!

This video will give you a sense of the show:


August 12, 2009

Just debate the facts

President Obama is committed to making changes in our healthcare system.  We have a huge problem as a nation where healthcare costs are spiraling out of control.  This is slowly strangling our economy as one way or the other, we all pay for our healthcare costs.  If you get your healthcare through work, then the customers or financiers of your employer are paying the bill.  If you buy your own healthcare, as I do currently, you are obviously paying directly.  And, if you have no healthcare, you are either probably depriving yourself of care you may need to keep you from endangering the rest of us, or you get care for free through some mechanism that is indrectly paid for by taxpayers.

So, I don't think anyone argues about wanting to lower the cost of healthcare.  But, there is a lot of disagreement on how to do it.  I'm no expert, so I'm not going to discuss this.

The second issue is coverage.  Most people in this country get healthcare through their employer.  If you don't have a job, or you don't have a job that includes healthcare benefits, you have to either buy insurance yourself or go without.  The government already insures our oldest citizens and some of our poorest through Medicare and Medicaid.  Since we all end up paying for the cost of our healthcare one way or the other, it makes sense to get as many people as possible insured.  But, it's not clear how to do that.  And, it seems to me that it would be desirable to make sure that if someone is insured that their insurance actually covers them without kicking them out when they get sick or if they had a pre-existing condition.  This aspect of reform seems to be the least controversial, but we'll see.

I don't know much about healthcare policy, but I do know that we'll never get anywhere unless we debate the facts.  Instead, a lot of opponents of the reforms being debated in Congress have resorted to ridiculous lies and distortions rather than attacking the actual facts of the proposals.  I am sure that there are weaknesses in the proposals being discussed in Congress.  But, the issues of the so-called Death Panels that will decide when your grandmother will be killed, the insuring of illegal aliens, or the forced government-funded abortions are scare tactics.

The Boston Globe today had an article that addressed the distortions and discussed what is really in and not in the bills being debated.  This article is consistent with other analyses I've seen that look at the facts.  These proposed policies are certainly subject to disagreement, but let's avoid distortion.

You might expect so-called pundits on TV to spout ridiculous distortions.  But, when people who consider themselves statesmen and stateswomen do the same, it's shameful.  I'm not sure what they hope to gain.  Didn't they see that Obama won by pulling in the middle?  Fear-mongering may rally the far right (in this case), but it will push away the middle.  If the Republicans want to regain some momentum, I think that they should abandon their extreme base and take the high ground on policy, ethics, and fiscal conservatism.  The middle will be the first part of the country to move away from Obama if he doesn't meet their needs.  But, the Republicans aren't giving them any place to go.  And, with ridiculous distortions, they'lll just be left to yell at themselves.

August 11, 2009

General Partner math

I chuckled when I read this entry on PEHub today.  According to a study done by Peracs, 77% of private equity funds could manipulate the benchmarks they compare themselves to in order to claim to be in the top quartile (25%) of all funds.  I guess just about all the funds are way above average.

If you read this carefully, it doesn't say that 77% of funds do this, just that they could.  But, most VCs do claim that they have strong performance.  And, of course, many of them can't.  I remember my first day at MIT when then President Paul Gray said to the freshmen picnic "all of you were in the top 10% of your high school class, but 50% of you will finish in the bottom half of your graduating class at MIT."  It wasn't exactly a pep talk, but it was a dose of reality for many students who had never finished anywhere but on top.

And VCs have some of the same issues.  Most are bright and high-achievers.  But, if you face the reality of the low VC returns from this decade, half of them must be below that.  So, unless they monkey with the benchmarks as Peracs suggests, half of the VCs would have to admit that they are below average.  And, the average isn't very attractive.

All of this means that the VC industry has to contract.  Limited Partners are figuring out that they can't keep pumping money into this asset class.  Some firms have strong performance and a good reason to believe that they'll continue to do so.  Others have niche or regional strategies that aren't over-crowded.  But the rest may have to come up with some creative mathematical marketing to justify their existence.

I think it was George Carlin who said something like "Imagine the average American.  The scary part is that half of America is dumber than that!"

Update: Shortly after I wrote this, the NVCA released their latest VC performance numbers.  Not very pretty.

August 06, 2009

Board Meeting Thoughts

Both Fred Wilson and Brad Feld have written recently about Board meetings.  Having been to many Board meetings myself, from both sides of the table, I thought I would weigh in, too.

I totally agree with Fred on the value of face-to-face meetings.  I also admire Fred's determination to be at out-of-town Board meetings in person.  To me, that is a must.  I have been in many Board meetings where someone was on the phone.  It's a distraction, and you know that they aren't paying 100% attention.  I don't blame them.  It's hard to follow a multi-person conversation over the phone.  Of course, you miss out on the body language, too.  My own personal attendence record at Board meetings is above 95%.

Just as VCs tend to have a higher hurdle for out-of-town deals, I think that entrepreneurs should have their own higher hurdle for an out of town investor.  What evidence is there that an out-of-town investor will put in the face time to get to know the company?  Do they have a network that can be helpful to you?  Many times, non-Silicon Valley companies try to add a Bay Area investor to get some visibility and access to contacts in the Valley.  That makes sense to me, but most of your Board members should either be local or have a track record of showing up.

I also liked Fred's comment on putting in time beyond just the meeting to get to know the company and the other directors.  I have seen others do the same.  One person I brought in as an independent director at a past investment flew in to every meeting and planned to spend about one full day beyond the meeting with the company -- meeting with management, having dinner with the CEO, one-on-one meetings with other directors either before or after the formal meeting, etc.  This made them a much more effective director.

I'm less in synch with Brad on his point of 80% of the meeting being forward looking.  I think that some directors gravitate to that -- they don't have the patience for operational details.  I haven't been on a board with Brad, so I'm not describing him.  But, I have been on boards with other directors who only pay attention to the big strategic points.

I'd favor more of a 45% operational, 45% forward looking, and 10% administrative split.  I think that there is a ton to be gained by looking at how the CEO and management team are running the company.  You can spend a lot of time discussing strategy, but if the company is dysfunctional, it will never be able to execute against these great strategies.  I believe that more companies fail due to poor execution than due to a failed strategy.

One good approach is to have an operational overview at each meeting, with an emphasis on different departments on a rotating basis.  This also gives the Board a chance to see some of the other executives in action as each executive should present their department details.  You can also learn something of the team dynamics to see how all the executives interact.

Another lesson I have learned is that the CEO has the opportunity to control the meeting and the agenda.  Only a weak CEO loses this.  The best CEOs keep the meeting on track and communicate surprises in advance.  This allows the directors to get their emotional reaction out of the way in advance of the meeting.  The focus of the meeting should be to build consensus among the board members, or at least have a discussion which leverages their broad points of view.

One last thought -- there should be detailed action items captured in a Board meeting, with reporting back at the next meeting on the status of these action items (even if the CEO decides to abandon a particular item).  Don't lose the decisions that are made at these meetings.  Early stage companies probably have board meetings once per month, so there are probably a lot of short-term decisions made.  Later stage companies slow down to once per quarter, and the decisions probably have more long-term impact.

I'd be interested to hear in the comments about other things people like or don't like in Board meetings.

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