Most common mistake made in negotiations

Simply put -- over optimizing.

It's common for everyone to try and get the best deal possible in a negotiation.  However, it's important to know when to stop negotiating, to say yes, and to get the deal done.

I'm currently in a negotiation which I think is falling apart because the entrepreneur is optimized the deal.  We had gotten to a point where both sides of the negotiation were equally uncomfortable with the deal and had agreed to terms. Then, the request for additional terms kept coming and coming. Each additional request was small in and of itself but when added to a deal in which both sides were uncomfortable -- one small request actually was the straw that broke the deals back -- so to speak.

Tuesday is theft day at our offices

I came into the office today and there were 2 police cars parked out in front. I thought this can't be good. It turns out our office building was broken into last night.  All the laptops and projectors were stolen. All the desktops were NOT taken. Guess it's an argument for desktops -- they're harder to walk out the door with and turn into cash!  The cops are in here taking fingerprints. Reminder to everyone to backup and leave as much in the cloud as possible. Bummer way to start the day.

Some sobering Venture Capital Statistics

The below is from the Nollenberger Capital Report

  • This is the first time since 1978 that no venture-backed company made it public during a quarter. The last venture-backed IPO was ArcSight in February 2008. In the first half of 2008, there were only 5 IPOs that totaled $283 million. That compares to 43 IPOs during the first half of 2007 totaling $6.3 billion. During the first half of 2008, 42 companies were in registration for an IPO.
  • For 2Q 2008, 50 M&A deals were announced involving venture-backed companies which totaled $2.4 billion. The first half of 2008 was the slowest first half M&A market since 2000 with only 142 deals. During the first half of 2008, there were 120 venture-backed M&A deals, compared to 169 during the first half of 2007 which amounted to $6 billion, compared to $8.5 billion in 2007, a 42% decline for investors.
  • In the first half of 2008, U.S. venture firms raised $16.2 billion, a 5.41% increase over the same period in 2007. The $85.5 billion that LP’s invested into LBO funds was 20.5% below the $107.6 billion invested in the first half of 2007. This is the first time since 2003 that we have seen Y/Y fund raising decline as PE firms experienced capital raising delays for their latest buyout funds. 72 new venture capital funds raised money, 10 more than in the 2007 period. The largest raise was $800 million for Lightspeed Venture Partners VIII LP fund.

My travels

It's hard to summarize my month off into a post. In fact, I don't really want to do because I feel like the time off was so precious! That said, you should know that my travels took me to Cuba, Cancun, Las Vegas, Miami, Santa Fe and a bunch of other places. I didn't do anything really -- and had a great time doing nothing. I ate well. Exercised. Watched movies, CNBC and read newspaper and trashy magazines like US and People. I didn't read email, make phone calls, or conduct any business so to speak. My favorite drinks of the trip were coffee, dark rum straight no ice (an acquired taste for a cuban drink), and vodka grapefruit.  My favorite dinner was at nobu in Miami with my good friend Michael. Oh and one more thing, I napped often!

First day back

I'm back from my month off!  I had a great time. The best part of the month off was the different relationship with time. For the past 20 years, I've been running my life with appointments and responsibilities -- both personal and professional. For the last month, I completely stepped away from that and had little to no appointments and little to no responsibilities. The resulting sense of freedom was refreshing and revitalizing. I'm excited to be back in Seattle and at work. I'm also happy to see my family again!

A month off? What a novel idea in America...

I'm leaving tomorrow on a month off. I originally asked for a month off for my 40th birthday -- and my wife granted my wish 18 months ago. Over the last 18 months, I've had the good fortune to climb Mount Kilimanjaro, dive in the great barrier reef, and motorcycle Europe.  I've had the gift of dreaming -- and that was a great gift in and of itself!
Now, the reality of a month off is upon me -- I'm heading to Las Vegas to check out the world series of poker and then I may make my way to Cuba.  I'm not sure what I do after that....I'll let whimsy and spontaneity take me where they will.
I'm not planning on being in touch -- either by email or phone. And I'm not planning on blogging -- though I reserve the right to do all of the above :-)

So if my blog seems silent or empty -- forgive me, I'm on extended holiday. 

My question for you -- is if you had 1 month off and were traveling alone -- where would you go and what would you do?

Electric convertible with 100 mpg


Think Global, originally uploaded by a sack of seattle.

Think Global, a Norwegian startup that bought what was once Ford's electric-vehicle program, has sold about 1,800 of its Think City, a tiny electric commuter car, in Norway. So far the company has raised $95 million from investors, including General Electric. The two-seater, which comes in convertible and hardtop, will sell for about $25,000 and go 100 miles on a few hours' charge. The firm aims to sell some 30,000 in the U.S. in 2010.
Maybe great for gas mileage....just not so great for Seattle rain.

Hands free photo law in Seattle


hands free photo, originally uploaded by a sack of seattle.

A new law is going into affect in Washington July 1, 2008.

Under the new laws, drivers who read and compose text messages or talk on a cell phone without a hands-free device could face a $101 ticket. The text-messaging ban takes effect Jan. 1; the cell-phone law will be enforced starting in July 2008.

This is an interesting law - and kind of a weird photo - so I thought I'd blog about it. In case you're wondering, I'm in favor of the law. I am afraid to drive a motorcycle (and my car) because I think the roads are less safe than they used to be due to cell phone and texting usage. That said, I am the occasional offender -- I'll need to cut the texting down.

Closing an angel round on friday

I'm in the process of closing an angel round for one of my companies today.  I was asked by one of the investors how the closing was going and I wrote:

Like any closing with angels ....

  • 60 percent close with no problem,
  • 30 percent close a day or two late, with little problem and a little massaging
  • 10 percent close in a week or more, with plenty of problems and lots of massaging.

Overall, I'm reminded of :

  • The benefits of working with institutional funders.
  • Never to try to close a financing on Friday.
  • The similarities amongst Angel financings and herding kittens (or greased pigs -- kind of funner image :-). 

Entrepreneurs organization is an excellent organization

If you are the owner of a business that generates more than 1MM in sales, I'd highly recommend you consider joining EO (Entrepreneurs Organization).  I joined EO when I was 28 -- at the time the organization was called YEO. I've been a member for 12 years now and have made some of my best friends and business acquaintances in the group. In addition, I've learned a lot from the people I've met. The organization is now international and has thousands of members. Check it out in your city -- it's definitely worth the cost (and the cost is not insignificant).

My jawbone is missing

Jawbones. You know the cool blue tooth headsets that actually work and may prevent you from getting brain tumors from your cell phone (they don't promise this value prop -- I've just assigned it to them). I love these devices and so do many other people. My problem is I can't seem to keep track of them. I'm on my third one and I can't find it. If you find it, please return it to my desk. Thanks.

Don't start a company in the local online space

I continue to get emailed and calls from entrepreneurs who see gold in the online local space. My advice to them is similar to the advice my dad gave me about going to medical school and becoming a doctor. Don't do it! He told me there are easier ways to make money and there are easier ways to care for people. He gave me that advice because he wanted to force me to think carefully about what my decision process.
Unfortunately he wasn't there to give me the same advice about starting a company in the local online space.  So I thought I'd pick up where he left off and take his place for all those internet entrepreneurs who think they can tap into the 90% of purchases that happen locally.  I believe in the market -- and think established companies will one day have huge local online businesses. Existing companies should absolutely be incrementing their way to satisfy the consumer need for local online resources. But start-ups should view this market place with caution and trepidation. It's quick sand.  It's a slog! There are easier ways to make money!   If you contact me and ask advice about your local online start up, that's what I'll tell you. 

Hillary Clinton's speech breaks records

I thought Hillary's speech on Saturday was awesome, historic, and moving. The speech was incredibly well written, had the right message and was delivered in the right tone. If the person who delivered that speech on Saturday had been the same one to campaign over the past 6 months, I believe she would have beaten Barack Obama.  I've been frustrated over the last 90 plus days as the math proved that Hillary couldn't win and yet she insisted on continuing to run for President. On Saturday, I forgave her. She didn't apologize explicitly. Rather, she gave such a moving uplifting speech filled with the passion and commitment that she embodies -- and I forgave her for her missteps, dirty politics, and egotistical actions. It's an awesome moment in America that a woman got as close the oval office as Hillary did!  It is remarkable and you should listen to the speech on Youtube here.

Loving my job at Founder's Co-op

I'm loving my job at Founder's Co-op.  I'm busier than I've been in a while and am enjoying all that is entailed in the creation of this new investment vehicle. Meeting entrepreneurs, mentoring entrepreneurs, fostering the entrepreneurial community in Seattle, meeting with potential investors -- it's all play to me and it's my work.  All this makes for a happy person....despite the rain in Seattle.

My lunch card is filled for now

Thank you to all those who offered to accept my lunch offer. I got about 20 to 25 responses. What I'm going to do is put all the names in a hat and pick 5 -- and then schedule those lunches out over the course of the next 90 days. I say 90 days because I expect to be able to do 2 in June, I'm gone in July, and then I'll do 3 in Aug.

The people that I don't get to have lunch with -- I invite you to Open Coffee's on Tuesday at Louisa's Cafe on Eastlake Ave. E. I'm there most Tuesday (but I won't be there in July either!)

Survive medical school and earn a tequila shot

My wife, Alexa, started medical training in 1992 as a post-bac at Harvard extension school. After finishing an undergraduate degree in Psychology, she needed to go back and take the pre-requisites for medical school.
Hear ye, hear ye - she finishes her residency this month. Last night, we through her a surprise party and I took a tequila shot or two. It's been a hard, grueling and long ride. I'm proud of my wife ....and I.  My wife seems to have found her passion and niche in life : as a psychoanalyst.  I'm super grateful for that.  I'm even more grateful that this whole 16 year medical training thing has (is) coming to an end!  Tequila shots for all those finishing medical school and medical training; they help wash down the memory of the process :-)

Lunch with a younger generation: I'm buying

I had lunch yesterday with a junior in college. The student, named Jeff Widmer, is an impressive, thoughtful young guy trying to figure out his path in life. He's taken it upon himself to contact people older than him and ask them to lunch and listen to see what he can learn. It's a simple gesture -- and not many people do, which makes it incredibly effective.
I've decided to follow Jeff's lead. I'd like to talk to more recent graduates: so if you are reading this post, live in or travel to Seattle, are in your twenties, and want a free lunch, I'd like to treat you the first 5 people to respond to this post to a free lunch. I promise not to bore you. I'm interested in learning your perspective on life, politics, technology, relationships, etc.  After I do the 20 something generation, I'll probably turn to some people in a later stage of life.  I'm looking forward to it!