The benefit of no

Entrepreneurs here the word "no" more often than not. The entire experience of entrepreneur is figuring out why people say no, and getting them to say yes. That includes customers, investors, and employees.  When people say no to you, it's an opportunity to gain understanding as to what exactly they're saying no to. Take the time to try to figure out what they're saying no to -- is it the problem isn't a problem, is it the problem you're solving isn't a priority, is it that you're charging too much, is it that your service is too new, is it that they don't like you ....and so on. Listening to what the customer is saying no to is the first step in getting to yes...and it's the power of no. :-)

I love Craigslist

I fell in love with Craigslist while I was operating Judy's Book. This site (and Google) are the reasons that the newspaper industry is failing today. I remember talking to someone at the NYT and they were asking themselves how do you compete with "free". If you're wondering about local online -- you should wonder about craigslist. The site defined local online.

Speaking of anniversaries -- my wife and I will be going away for our 15th

It's funny to have just written a post about Cooler Planet being 2 years old and to think about my wife and I being 15 years old. Alexa and I got married in 1994. I had just graduated from MIT business school and was starting my first internet company.  The most amazing thing about our relationship -- which has had its share of ups and downs -- and frankly the thing that keeps me happy in our marriage is the fact that I still enjoy Alexa's company more than anyone elses.  

2 year anniversary dinner of Cooler Planet

I went out last night with Tom Staples and Danny Vo of Cooler Planet to celebrate the 2nd anniversary of the company. We had a lot of fun ....and a few tequila shots at Joey's In Seattle. It was fun to look back at the history of the company and think about the things we did we and the things that we didn't do well. We actually made a list of the the top 3 important milestones of the company and they are:

  • Agreeing to partner with ASES
  • Deciding in Nov. 2008 to become profitable (and cutting costs appropriately)
  • Focusing in on our top 5 keywords

We also made a list of mistakes that we could have made but didn't and they are:

  • Expanding beyond the solar market into other verticals
  • Eliminating our focus on qualification -- we believe that qualifying leads on behalf of merchants is a critical differentiator for us
  • Become an outside sales force for solar installers

I'm super proud of what these guys have accomplished in the last 2 years and can't wait to see them continue to succeed. They're doing a great job -- I have a ton of fun working with them.

Having a steady hand on your business tiller

I was recently reminded of the time when I was in my twenties and worked on financing abuzz (purchased by NYT in 1999). I used to freak out about every step of that companies financing. I was calling all the vcs every day as if they had nothing better to do other than to tell me that nothing had happened since yesterday.  I'd ask them -- did you talk to my references, what's your thought on the market, did you review the financials, is there anything else you need from me?

 I was reminded -- because I've now met entrepeneurs who remind me of me then. It makes me smile -- urgency and anxiety are good things -- they're motivators that help entrepeneurs push through financings.  My only comment is to try and keep the anxiety in check -- because they can have you push too hard and the perhaps screw things up. Even if you're not screwing things up, you're wasting lots of energy on useless activity.

Now this is a wedding video

My mom spams me on a regular basis. She doesn't know it -- but that's what she does. She's on all sorts of mailing lists -- inspirational, comedy, photos, and videos -- and she feels compelled to share it all. I love my mom but she hasn't quite figured out the email thing -- that said, this morning I actually clicked on one of the links she sends me -- and didn't get an adware ask nor a prediction for my astrological sign. I got this wedding video and it made my day. Looks like a really fun wedding. Thanks for sharing mom!

Do I suck as a venture capitalist?

I thought I'd write a post following up on my guest post on TechFlash and let everyone know some of the things that I know I suck at when it comes to investing.  You should feel free to comment and add to either list  (I of course prefer you add to the why I don't suck :-) .  

Why I don't suck as a venture capitalist

  • I have experience running and selling start up technology companies. I've been doing this for 15 years, and have managed to sell 3 companies for a nice sum of money and 2 for a loss (both about $0.50 on the invested dollar).
  • I have managed up to 120 people. I've recruited lots of VPs before and managed many management teams.
  • I love sales of all kinds -- and know how to sell.
  • I blog and try to be transparent about my position on topics.
  • I have an opinion and am direct. You may not like what I have to say but most people know where they stand with me and whether I like their business.
  • I think of myself and am told that I'm approachable and open.
  • I know my shit smells  -- and I know I've made lots of mistakes (and continue to make them)
  • I'm scrappy, cheap, aggressive,and know how to bootsrap business 
  • I'm willing to be wrong
  • I have an emotional IQ
  • I try not to take myself too seriously
  • I care a lot about entrepreneurs and the community. 
  • I pay my taxes and am a huge fan of the films : Old School and Meet the parents

Why I suck as a venture capitalist

  • I'm now an investor and think like one
  • I'm valuation sensitive. We tend to deals in the sub 2MM pre-money valuation zone. 
  • Our deals include a liquidation preference as a standard term.
  • I think my experience should matter to you
  • If I dont' like your business or you, I usually tell you (doesn't win me friends)
  • I'm cheap and sometimes negotiate too aggressively.
  • People have told me that my direct style intimitades them. I don't mean to!
  • I don't read all my emails and am occasionally lame about follow thrown
  • I have definately mismanged expectations in the investment process on more than one occasion.
  • I like to make money.
  • I am wrong plenty. 
  • I care about the people side of business a lot.
  • I don't have enough money to invest -- I have a small fund and thus can't do bigger deals.
  • I like the movie Wall Street and once thought about being an investment banker, an options trader, and a management consultant. I did none of the above but would probably still enjoy being an options trader.

In defense of Ignition Partners

This is a comment I wrote on Tech Flash in response to the recent Ignition bashing (be sure to read the comments section to get the full discussion)

I've actually worked with Ignition Partners and lost some of their money when I wasn't able to get Judy's Book to a successful exit. Moreover, I haven't had any business relationship with the firm for the past year.

I tell you this so you have context for my comments.

I wrote my post about "Do VCs suck" in part because of the negative comments about venture capitalists (and Ignition in particular) on this board.

I encourage people to read that article -- and to give this firm (i.e. these guys) a break.

  • Yes -- they're venture capitalists.
  • Yes that means they have companies that don't make and entrepreneurs that they say "no" to.
  • Yes -- they've human and make mistakes (entellium).

But I have to say, you learn a lot about a firm when you see how they deal with things not going according to plan (i.e. something other than success). In my experience over 3 plus years, they're smart, well meaning professionals with a lot of value add.

In general, I recommend these guys. I would work with them again. They have operational expertise, know-how and relationships that are of tangible value.

If you're an entrepreneur and want an informed opinion of this firm -- contact me.

One last thing -- I think the anonymous flame throwing posts on this board (i.e. Tech Flash) are crap. If you've got something negative to say -- put your name on it and stand behind it.

I'm a huge fan of UGC, but it needs to be managed and constructive and right now this board's tone and value add to the community sucks.

Updates to investors

We've become huge fans of weekly updates by our entrepreneurs.  Not all of the entrepreneurs are doing this yet....but in time I expect (*hope) all of them do.  The weekly updates have the following benefits:

  • Require the entrepreneur to process their thoughts and their progress toward goals regularly.
  • Assist investors who care about the success of the advisor to feel emotionally connected to the company
  • Enable investors and advisers to proactively make suggestions and proffer guidance 
  • Make commitments of milestones (i.e. sales and revenues) to many people. The more people you say you're going to do something the more likely you are to do it -- if you don't do it, you have more egg on your face!

The ping pong case was the give away

I attended the Tech Flash ping pong tourney and BBQ on Thursday. It was a great event. I was a bit unlucky in my ping pong draw -- my bracket had the odds on pre-tourney phenom "nam le" (sp?) in it and in my first and only game I played Isaac of mechanical turk fame (formerly from Amazon).  I knew I was in trouble when he pulled out his ping pong case and it had a selection of 3 racquets. I know lots of people with ping pong racquets. Heck -- I own one. But I don't know many who have the ping pong case!  it was a dead give away for a ringer. I couldnt' do anything with his spin serve -- and lost 2-0. I had fun anyway. Nice job John Cook and Todd Bishop -- the organizers of the event and the founders of TechFlash.

Big tuna toasted well

This is my new favorite daily order at the high end convenience store across the street from Founder's Co-op. I just ordered it for lunch again and the order gave me a smile. It made me think "am I a big tuna?!" and it also made me think about the daily rituals of my life like:

  • a 7 minute steam shower and shave followed by a few tabs of Chanel aftershave
  • a single shot non fat latte from louisa's
  • a tour of twitter and Facebook
  • a quick check of CNBC and stock prices of the S&P, Apple, Google and Amazon
  • a walk to lake union to check out the water and the boats
  • a review of Google news for headlines and hopefully some of my favorite blogs
  • 15 minutes of some kind of exercise (stairmaster most often)
  • Lastly -- write a blog post (doesn't happen everyday but I want it to)

What's the impact of the 2009 financial crisis on American culture?

I was recently asked this question by a reader of my blog -- and thought it was such a good question that I'd ask all of you.

My initial answer -- "I don't know" was accurate but insufficient.  I think that this past year is going to be perceived as having a significant impact on our culture. Below are some random thoughts on the question in the title of this post:

  • The crisis was self inflicted and could not be externalized that easily. It's a little like a smoker who develops a bad cough.
  • The crisis was not bad enough to cause real crisis in the streets -- or more specifically, the crisis wasn't so bad as to unite people in an emotion of grief, frustration, anger.
  • The Madoff story gives both an externalized bad guy and a mechanism for uniting people emotionally. 
  • People who were conservative with debt are the ones that worked through this period the easiest. 
  • Our way out of the crisis includes the issuance of massive amounts of country debt -- the repayment of which remains a question.
  • I like the idea of Pres. Obama and Gov. Schwarzenegger as the best bond salesman in the history of the world.

Is it an ah-hah moment or a duh moment?

I was talking with Tom Staples of Cooler Planet about a recent realization he's had about our SEO and SEM strategy. Tom made the declaration at a recent meeting that he wants to focus on "Solar Energy" as one of the main key words for the company. It is among the highest volume keywords in our niche.  If you started a company in the solar space 2 years ago (and we did) you'd think that "Solar Energy" would be an obvious keyword to focus on ....and it was. But there was something in the process of the past 2 years that made Tom reiterate the need for renewed focus on the keyword "Solar Energy" for SEO and SEM.  In that moment, I wondered if we had both an ah-hah and a duh moment. Well, it was both. But, better to focus on the positive ah-hah moment and really operationalize the focus on the Solar Energy keyword.  Throughput a company's life, you constantly remind yourself of some of the things you knew at the beginning. That is good. This is just one very concrete example.If you're in business online, focusing on high volume (perhaps lower conversion) obvious keywords is a  good place to start....and to return to. Duh.