Feld Thoughts

Grinfucking

Brad Feld — Sat, 04 Feb 2012 15:39:41 +0000

I first heard the word “grinfucker” a decade or so ago from a close friend who was a former investment banker. He said, in response to a meeting we were in with a person who was very polite and charming “he’s such a grinfucker.” I loved the word and, as I found out later, it described the person perfectly.

I had an encounter with someone on Friday that made me think to myself “that person is a grinfucker” and I vaguely remembered a post on the web from someone about grinfuckers. A quick Google search generated a post from Mark Suster titled Don’t be a Grin Fucker. It’s excellent - go read it – this blog post will wait patiently for you to come back.

I was at dinner mid-week with another friend talking about a bunch of stuff. During that dinner we started talking about SOPA/PIPA. He has another friend who is one of the SOPA/PIPA advocates. He told me what the person said about it, which was basically “the tech industry misunderstands what we are trying to do – it’s only about foreign websites – there is nothing bad in the bills.” I responded to my friend that this person was lying. We talked about that for a while. As I reflect on the conversation, it wasn’t simply that the pro-SOPA/PIPA person was lying, he was actually grinfucking our mutual friend. Which, ironically given the specific context, might even be worse than lying.

I try to live my life where I always say 100% what is on my mind. I rarely hold back and, although I try to be polite about it, I’m sure I piss plenty of people off. But I’d rather annoy and piss them off than grinfuck them. And I’d much rather someone be brutally honest with me about whatever they think, especially if they disagree with me or think I’m doing something stupid, since that information is so much more valuable to me than a disingenuous good vibe.

I’ve started doing something new at the end of most of my public talks. I have always ended by giving out my email address and encouraging people to reach out directly if there is anything they want to discuss. But I’ve added on the following:

If I said anything you disagree with, think was confusing, stupid, or just plain wrong, please tell me. I won’t take offense – don’t sugar coat it – just tell me. That’s the best way for me to learn and get smarter.

I suppose I could add “please don’t grinfuck me by saying how wonderful the talk was as you think in the back of your mind ‘wow – Feld is a real moron – he totally missed the point on the blah thing.’”

I encourage everyone to chew on this. Honest, direct, and clear debate is so much more powerful than bullshit. We are living in a very complex era and the information we are trying to process is extremely confusing and contradictory. If you like or respect someone, don’t grinfuck them. And if you don’t like or respect them, don’t grinfuck them – tell them why.

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What Makes An Awesome Board Member?

Brad Feld — Thu, 02 Feb 2012 16:57:36 +0000

Over the past two years I’ve been struggling mightily with the dynamics of “classical VC funded board of directors” and how these boards work. When I hear a VC say “I’m an active board member” it gives me the same nauseous feeling I get when someone says “I’m a value added investor.” I’ve been on some awesome boards, some terrible boards, and everything in between. Today, I refuse to be on a shitty or dysfunctional board and I’m proud that every board I’m on is one that I’d consider to be effective, although they all operate in different ways.

I’ve experimented with a bunch of different approaches across a lot of boards and have been thinking hard about this lately. I’m working on a book called Startup Boards with Mahendra Ramsinghani and have done some interviews about this topic lately, including a chaotic one the other day with James Geshwiler on the Frank Peters Show.

My long term friend Matt Blumberg (Return Path CEO) and I were going back and forth about his recently board meeting (which ironically I missed) and he wrote some kind words about me and his other board members (Fred Wilson – USV, Greg Sands – Sutter Hill, Scott Weiss – A16Z, and Scott Petry – Authentic8.) I asked him if he’d write a guest post about what makes an awesome board member. He was willing – it follows.

I’ve written a bunch of posts over the years about how I manage my Board at Return Path. And I think part of having awesome Board members is managing them well – giving transparent information, well organized, with enough lead time before a meeting; running great and engaging meetings; mixing social time with business time; and being a Board member yourself at some other organization so you see the other side of the equation. All those topics are covered in more detail in the following posts: Why I Love My Board, Part II, The Good, The Board, and The Ugly, and Powerpointless.

But by far the best way to make sure you have an awesome board is to start by having awesome Board members. I’ve had about 15 Board members over the years, some far better than others. Here are my top 5 things that make an awesome Board member, and my interview/vetting process for Board members.

Top 5 things that make an awesome Board member:

They are prepared and keep commitments: They show up to all meetings. They show up on time and don’t leave early. They do their homework. The are fully present and don’t do email during meetings.
They speak their minds: They have no fear of bringing up an uncomfortable topic during a meeting, even if it impacts someone in the room. They do not come up to you after a meeting and tell you what they really think. I had a Board member once tell my entire management team that he thought I needed to be better at firing executives more quickly!
They build independent relationships: They get to know each other and see each other outside of your meetings. They get to know individuals on your management team and talk to them on occasion as well. None of this communication goes through you.
They are resource rich: I’ve had some directors who are one-trick or two-trick ponies with their advice. After their third or fourth meeting, they have nothing new to add. Board members should be able to pull from years of experience and adapt that experience to your situations on a flexible and dynamic basis.
They are strategically engaged but operationally distant: This may vary by stage of company and the needs of your own team, but I find that even Board members who are talented operators have a hard time parachuting into any given situation and being super useful. Getting their operational help requires a lot of regular engagement on a specific issue or area. But they must be strategically engaged and understand the fundamental dynamics and drivers of your business – economics, competition, ecosystem, and the like.

My interview/vetting process for Board members:

Take the process as seriously as you take building your executive team – both in terms of your time and in terms of how you think about the overall composition of the Board, not just a given Board member.
Source broadly, get a lot of referrals from disparate sources, reach high.
Interview many people, always face to face and usually multiple times for finalists. Also for finalists, have a few other Board members conduct interviews as well.
Check references thoroughly and across a few different vectors.
Have a finalist or two attend a Board meeting so you and they can examine the fit firsthand. Give the prospective Board member extra time to read materials and offer your time to answer questions before the meeting. You’ll get a good first-hand sense of a lot of the above Top 5 items this way.
Have no fear of rejecting them. Even if you like them. Even if they are a stretch and someone you consider to be a business hero or mentor. Even after you’ve already put them on the Board (and yes, even if they’re a VC). This is your inner circle, and getting this group right is one of the most important things you can do for your company.

I asked my exec team for their own take on what makes an awesome Board member. Here are some quick snippets from them where they didn’t overlap with mine:

Ethical and high integrity in their own jobs and lives
Comes with an opinion
Thinking about what will happen next in the business and getting management to think ahead
Call out your blind spots
Remembering to thank you and calling out what’s right
Role modeling for your expectations of your own management team
Do your prep, show up, be fully engaged, be brilliant/transparent/critical/constructive and creative. Then get out of our way
Offer tough love…Unfettered, constructive guidance – not just what we want to hear
Pattern matching: they have an ability to map a situation we have to a problem/solution at other companies that they’ve been involved in – we learn from their experience…but ability and willingness to do more than just pattern matching. To really get into the essence of the issues and help give strategic guidance and suggestions
Ability to down 2 Shake Shack milkshakes in one sitting
Colorful and unique metaphors

Disclaimer – I run a private company. While I’m sure a lot of these things are true for other types of organizations (public companies, non-profits, associations, etc.), the answers may vary. And even within the realm of private companies, you need to have a Board that fits your style as a CEO and your company’s culture. That said, the formula above has worked well for me, and if nothing else, is somewhat time tested at this point!

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Starwood and AT&T #FAIL And Bless Me With $180.76 Of Phone Charges

Brad Feld — Wed, 01 Feb 2012 10:49:20 +0000

Put this in the “every business traveller thinks this on a regular basis” rant category. Sure – I’m whining, but I imagine I’ll feel better after I get done. I doubt it has any impact on the universe, but hopefully it’ll be a story that rings true to some of you out there who travel as much as I do. And to my friends at Starwood and AT&T, you made my day yesterday, which was already intense, a lot harder than it needed to be.

I just woke up, made some coffee, turned on my computer, and noticed that my hotel bill was shoved under my door. Last night before I went to bed I tweeted “Dear AT&T and Westin Hotel Wifi: I give up. Good night.” I rarely look at my hotel bills but this time I was curious so I grabbed it. $323.10 for the room, $32.32 for State and County Tax, $9.95 for Internet Service, and $180.76 for 10 telephone calls.

Remember that I said I rarely look at my hotel bill. I travel constantly and I’m what I’d describe as a high end utilitarian traveler. When I travel alone I’m not terribly picky about the hotels I stay at, generally prefer modern to classic, just want a dark, clean room that I can make cold at night, and want to be left alone. I try to be super polite to the hotel staff while simultaneously very low maintenance.

I used to be annoyed that I’d pay $500 or more for a room and get hit with a $14.95 bill for Internet access. I stopped being annoyed by that a while ago and just view it as part of the cost of the room. I don’t watch television so my time in the room is spent working on my computer, talking on my cell phone (or my computer via Skype or Google Chat), sleeping, or being in the bathroom. That’s it. Oh – and I appreciate the free coffee service in the room since I get up at 5am and there’s rarely a coffee option anywhere until 5:30am.

Yesterday at about 2pm I arrived at the Westin Arlington Gateway. I’ve got a set of meetings tomorrow at the National Science Foundation so I’m staying down the block. My amazing assistant Kelly had scheduled a dozen phone calls between 2pm and dinner so I figured I’d just sit in my room and grind away on calls and email. A few of my calls where Skype calls and my phone number is a Google Voice number so I’d just sit in front of my computer and work in between the calls.

When I checked in at 2pm, the room they had assigned me to wasn’t ready. The guy checking me in was super nice, asked me a bunch of questions (do you want a high floor or a low floor, near the elevator or away from the elevator) to which I answered “I don’t care – whatever room you have will be fine, and found me a room. He informed me that my Starwood preferred number was on file (whatever that means) and was very polite.

I plopped down in my room, took out my laptop, went through the “connect to the Internet” process which appeared to cost $9.95 for the day, and got to work.

After 10 minutes I knew I was screwed. The Internet performance was painfully slow. Since I had back to back calls, I didn’t have a window to call “tech support” and have them take a look so I put up with it for a little while. I figured I’d use my iPhone as a hotspot as the backup and switched over to it. That was even worse. I tried to make a phone call with my iPhone instead of Google Voice. It took three tries for it to go through and then it dropped after 60 seconds.

I was officially in RidiculousTelecommunicationStan. I struggled through the first few calls (anyone on the other end, especially the poor souls on Skype, could probably sense my frustration and theirs was probably higher) before giving up and switching to the landline in my room. Yes – a landline. I had to think for a moment whether to dial 9 first or 8 first (remember that I’m in a hotel), got it right, and simply made all the calls from that phone. Internet performance was still miserable, but by using Sparrow I managed to work “semi-offline” and the emails went through what seemed to be simulating a 2400 baud modem.

Eventually I had 15 minutes between calls so I pressed the “Service Express” button on the phone to ask for Internet tech support. The nice person took down my info and said someone would call me back. They did 15 minutes later which overlapped with my next call. I eventually called them back just as I finished up but before I left for dinner. We did all the standard troubleshooting things which indicated that the Internet was slow and after an escalation, resulted in someone “resetting a router” remotely. I went to dinner, was about 15 minutes late, but was optimistic that when I got home I’d be able to jam through another hour or so of email.

No such luck. After calling Amy on the land line and saying goodnight, I struggled through 15 minutes of email before deciding to just screw it and go to bed. I tweeted out my frustration and quickly got a response from @StarwoodBuzz that said “Sorry about that. If you can DM us your stay details in full, we can do our best to help. We’ve followed you.” Nice, but I was done for the night, closed my laptop, and will DM them this blog post and see what happens.

And then I woke up this morning, started a cup of coffee, and noticed by $180.76 bill for 10 phone calls. Total stupidity on the part of Starwood where I’m apparently a “not very preferred guest.” It’s been a long time since I resorted to using the landline in my hotel room and it didn’t even occur to me that they’d rip me off like this. I remember staying in a Marriott near an airport recently and the cost for Internet and unlimited long distance phone calls was $9.95, so I’m doubly perplexed. And I don’t see any of those little plastic signs saying “if you use this phone to make a call we are going to charge you $2 per minute” (which is what it appears they were charging based on a few of the calls.)

I can’t remember the last time I made a fuss when I checked out over a hotel bill. I’m sure I eat some extra charges her and there, but whatever. This morning, when I head downstairs, I’ll ask to have all the phone calls taken off my bill. We will see what happens.

In the mean time, I’m going to keep reminding myself that this is 2012, not 1996, where we are just discovering the expensive magic of Internet in hotel rooms. I look forward to 2024 when I no longer have a landline in my room and the Internet works flawlessly for the $9.95 I pay a day to use it. Or maybe AT&T will work in the middle of Arlington, Virginia. Or maybe pigs will fly.

Update: The manager at the Starwood Arlington left a message for me that he had reversed all of the charges. So he did the right thing and I appreciate that. An AT&T customer service person also called and assured me he would talk to the hotel and explore if there is a dead spot in the area. I’m now on Acela to NY where their Wifi doesn’t work for shit but AT&T is tethering ok today. Now, if I could only get the soccer mom two rows up to stop telling stories about her 7th grade son’s soccer team I’d maybe be in a less grumpy place.

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Reflections On CES From A Perspective Of The Future

Brad Feld — Tue, 31 Jan 2012 13:16:12 +0000

I believe that science fiction is reality catching up to the future. Others say that science fact is the science fiction of the past. Regardless, the gap between science fact and science fiction is fascinating to me, especially as it applies to computers.

My partners and I spend time at CES each year along with a bunch of the founders from different companies we’ve invested in due to our human computer interaction theme. In addition to a great way to start the year together, it gives us a chance to observe how the broad technology industry, especially on the consumer electronics side, is trying to catch up to the future.

We are investors in Oblong, a company who’s co-founder (John Underkoffler) envisions much of the future we are currently experiencing when he created the science and tech behind the movie Minority Report. Oblong’s CEO, Kwin Kramer, wandered the floor of CES with this lens on and had some great observations which he shares with you below.

Looking back at last year’s CES through the greasy lens of this year’s visit to Vegas, three trends have accelerated: tablets, television apps platforms, and new kinds of input.

I gloss these as “Apple’s influence continuing to broaden”, “a shift from devices to ecosystems,” and “the death of the remote control.”

Really, the first two trends have merged together. The iPod, iPhone, and iPad, along with iTunes, AirPlay, and FaceTime, have profoundly influenced our collective expectations.

All of the television manufacturers are now showing “smart” TV prototypes. “Smart” means some combination of apps, content purchases, video streaming, video conferencing, web browsing, new remote controls, control from phones and tablets, moving content around between devices, screen sharing between devices, home “cloud”, face recognition, voice control, and gestural input.

Samsung showed the most complete bundle of “smart” features at the show this year and is planning to ship a new flagship television line that boasts both voice and gesture recognition.

This is good stuff. The overall interaction experience may or may not be ready for the mythical “average user”, but the features work. (An analogy: talking and waving at these TVs feels like using a first-generation PalmPilot, not a first-generation iPhone. But the PalmPilot was a hugely successful and category changing product.)

The Samsung TVs use a two-dimensional camera, not a depth sensor. As a result, gestural navigation is built entirely around hand motion in X and Y and open-hand/grab transitions. The tracking volume is roughly the 30 degree field of view of the camera between eight feet and fifteen feet from the display.

Stepping back and filtering out the general CES clamor, what we’re seeing is the continuing, but still slow, coming to pass of the technology premises on which we founded Oblong: pixels available in more and more form factors, always-on network connections to a profusion of computing devices, and sensors that make it possible to build radically better input modalities.

Interestingly, there are actually fewer gestural input demos on display at CES this year than there were last year. Toshiba, Panasonic and Sony, for example, weren’t showing gesture control of TVs. But it’s safe to assume that all of these companies continue to do R&D into gestural input in particular, and new user experiences in general.

PrimeSense has made good progress, too. They’ve taken an open-hand/grab approach that’s broadly similar to Samsung’s, but with good use of the Z dimension in addition. The selection transitions, along with push, pull and inertial side-scroll, feel solid.

Besides the television, the other interesting locus of new UI design at CES is the car dashboard. Mercedes showed off a new in-car interface driven partly by free-space gestures. And Ford, Kia, Cadillac, Mercedes and Audi all have really nice products and prototypes and employ passionate HMI people.

For those of us who pay a lot of attention to sensors, the automotive market is always interesting. Historically, adoption in cars has been one important way that new hardware gets to mass-market economies of scale.

The general consumer imaging market continues to amaze me, though. Year-over-year progress in resolution, frame rate, dynamic range and cost continues unabated.

JVC is showing a 4k video camera that will retail for $5,000. And the new cameras (and lenses) from Nikon and Canon are stunning. There’s no such thing anymore as “professional” equipment in music production, photography or film. You can charge all the gear you need for recording an album, or making a feature-length film, on a credit card.

Similarly, the energy around the MakerBot booth was incredibly fun to see. Fab and prototyping capabilities are clearly on the same downward-sloping, creativity-enabling, curve as cameras and studio gear. I want a replicator!

And, of course, I should say that Oblong is hiring. We think the evolution of the multi-device, multi-screen, multi-user future is amazingly interesting. We’re helping to invent that future and we’re always looking for hackers, program managers, and experienced engineering leads.

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A Flying Fuck

Brad Feld — Mon, 30 Jan 2012 20:32:58 +0000

It’s Monday and I’m back in Boulder after being on the east coast for three weeks. My partner Jason Mendelson got me possibly the best remote control toy ever.

Even though I’d love to stick around Boulder all week, I’m heading to DC tomorrow and then NY for a day. Oh well.

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Connect to Facebook, LinkedIn, Twitter, and G+

Brad Feld — Mon, 30 Jan 2012 13:00:46 +0000

I noticed something when I tried out two apps (Mingly and Cobook) this morning – they each immediately asked to connect me to Facebook, LinkedIn, and Twitter during their onboarding process. And, by using my Gmail as the starting point / authentication, they connected me to G+.

Microsoft is conspicuously absent from this. I’ve noticed this many times in the past but when you onboard yourself in two contact-related apps in the same morning and there is no Microsoft anywhere, there’s something going on that’s important. I wonder if this will change with Office 365 – I hope Microsoft is building a trivial to use oauth to O365 so it’s easy to connect to, along with a good sync API.

I was trying to think of other authentication that would be helpful to me in the context of my contacts. Almost everything else I use is based on either my email address or auth with one of these four services. Hmmm.

So far Mingly feels basically the same as Gist but Cobook seems different than anything I’ve used. I have no idea if I’ll keep using either of these, but like many things in the themes we invest in, I love to play around with new apps for a while and see if it sticks.

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Creative Construction

Brad Feld — Thu, 26 Jan 2012 16:40:54 +0000

After a long really fun day yesterday at TechStars and StartLabs I wandered over to 34-101 to be on a panel for Joost Bonsen and Joe Hadzima‘s IAP class 15.S21: The Nuts and Bolts of Business Plans. It’s not really a class about business plans rather a class about starting a business and has been regularly modernized by Joost and Joe. On the panel were the two founders of Super Mechanical (creators of Twine) which is an awesome project that used Kickstarter for its initial financing (and that I’m an excited supporter / customer of.) I had a fun day and wish I had found more IAP courses to help teach and participate in this trip.

After the course finished at 9:30, Joost and I wandered over to the Muddy Charles for a beer. When I crawled into bed at 12:30 my head was full of a ton of awesome ideas that came out of our rambling three hour discussion. I’ve been friends with Joost since the early 1990′s when we first met around the MIT 10K competition and have been a huge fan of his ever since.

Among other things we talked about the startup ecosystem in and around MIT and the evolution of Boston as a region. The comments in my post from yesterday titled I’m in Cambridge, Not Boston were great and stimulated additional thinking on this topic, as did Joost’s experience here over the past 20 years. Joost has incredible knowledge and history of the region and of MIT, which occasionally appears in posts like How Kendall Square Became Hip: MIT Pioneered University-Linked Business Parks but is really apparent when you spend extended time with him talking about MIT, how it evolved, what it is today, who has been involved along the way, and the entrepreneurial community that has evolved around it.

About mid-way through the conversation Joost dropped two phrases on me that blew my mind. The first was “Creative Construction.” As we were talking about startup communities and the new book I’m working on, Joost said “How about a play on words on Schumpeter’s “creative destruction” and call your theory about startup communities “creative construction” instead. After I put the exploded pieces of my brain back together and said “that is exactly fucking right” he went on. “Think of entrepreneurship as a tool of mass construction.”

The play on words is just delicious. And right on – we are talking about an awesome positive force in the world and should be using language that represents that. At the core of our conversation was the notion that an entrepreneurial region like Boston is actually a collection of 100,000 person “entrepreneurial neighborhoods” (that’s what Kendall Square is, as distinct from the Fort Point Channel area, or the Leather District, or what’s going on in Davis Square, or …). And the idea that creative construction drives this – and the neighborhoods are part of a broader entrepreneurial community (in the region) is a construct that resonates with me.

I’m off to HubSpot to give a talk, a swing through Venture Cafe at CIC, and then back to StartLabs for the rest of the day. My three weeks in Boston (well – Cambridge) with a side trip to New York is coming to an end. It’s been amazing, enlightening, educational, productive, and a lot of fun.

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I’m In Cambridge, Not Boston

Brad Feld — Wed, 25 Jan 2012 10:27:18 +0000

Over the last three weeks I’ve had numerous people ask me how my trip to Boston has been going. For a while I corrected them and said “I’m mostly in Cambridge” but gave up. Tonight, after hanging out at the TechStars Boston Mentor evening and program kickoff, I got into a long discussion with a Bill Warner and Ken Zolot about Cambridge, Boston, and startup communities. At some point in the conversation I blurted out “I have no idea why we call this program TechStars Boston instead of TechStars Cambridge.” And then something that I thought was important dawned on me.

My entire entrepreneurial view of “Boston” is centered around Cambridge. I’ve been here for two of the last three weeks (I spent four days in New York). I’m staying in a hotel in Kendall Square across from Google and next to MIT. I’ve spent my days walking to meetings at MIT, Kendall Square, Tech Square, Central Square, and East Cambridge including what I refer to as “the old Lotus building”. I’ve had all of my meals in Kendall Square or Central Square. Other than running, I’ve only been physically in Boston four times – first when I arrived at the airport, then when I took the train to New York, then when I returned on the train from New York, and finally when I spent the morning at Fidelity’s FCAT offices at Summer Street.

Now, I know there is plenty of startup activity in Boston. My old neighborhood near Fort Point Channel (I used to live on Sleeper Street in a condo at Dockside Place) is bustling with startup activity. There’s plenty of stuff on 128 and 495. There’s are other entrepreneurs tucked around the city. But that’s not the interesting story, at least in my mind.

The few square miles in Cambridge around MIT is the white hot center of startup activity in the region. One of my basic principles of startup communities is the need for what I call entrepreneurial population density (EPD) which I calculate as the total number of entrepreneurs and employees of entrepreneurial companies divided by the total number of all employees in a region. Then an even more powerful metric is entrepreneurial density, which is EPD / size of region. A large EPD in a small physical region wins.

Part of the magic of Boulder is the entrepreneurial density of the place. And as I wander from meeting to meeting in Cambridge, running into people on the street who I know, or who I met with the day before, or I who I want to know, reminds me of the dynamic in Boulder. For example, I ran into Matt Cutler on my way to Rich Levandov’s office and we walked over together. I bumped into the StartLabs organizers when going to a meeting with Will Crawford. I saw Joe Chung while hanging around StartLabs. I saw 50+ mentors who I knew last night at TechStars and expect to see more today when I’m there. While having breakfast with Michael Schrage at the Cambridge Marriott Joost Bonsen came over and said hello. At Dogpatch meeting with Yesware I saw Dave Greenstein and gave him a hug for his new kid. And the list of moments like this, which happened with 10 square blocks, go on and on. But when I hop on the red line and travel to South Station, the magic disperses.

I remember when the Boston VC community moved from downtown Boston to Waltham. I understood it was an effort to create a “Sand Hill Road” like venture community but the big miss was that an MIT student couldn’t hop on a bike and ride to Waltham like a Stanford student could with Sand Hill Road. And it’s no surprise that downtown Palo Alto, which is even closer to Stanford, is an attractive place for VCs to hang out. The snarky message when the VCs moved to Waltham was that they wanted to be close to their fancy houses and their private golf clubs and the entrepreneurs could come to them. It’s no surprise that many of these firms have relocated to Cambridge, recognizing that they should be in the middle of the entrepreneurial energy.

I’d suggest to the Cambridge and Boston startup communities that they should think of themselves as two separate but related communities. Even within Boston, it seems like there are different startup communities in downtown, 125, and even 495. I think that thinking of it “Boston” is a mistake.

In my world view, the entrepreneurs drive the startup community. Focus on entrepreneurial population density and entrepreneurial density – and make sure your geographic region is small. Over time, linking the critical mass together in a larger region (e.g. Silicon Valley or Boston) is fine, but the real power comes from the startup communities with the largest EPD in small physical regions which are big enough to have critical mass.

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Resegment If You Aren’t In The Top Three

Brad Feld — Mon, 23 Jan 2012 12:21:21 +0000

Six months ago I wrote a post about how I think about competition which included a list of topics that summarizes my philosophy. I covered the first item, Be The First Mover, but then went on to other things, like thinking about competitors every single day. I’m back today with the second topic, “Resegment If You Aren’t In The Top Three.”

If you look at the Foundry Group portfolio, you’ll notice a lot of market leaders. Zynga is the obvious one, but I’ll assert that there are many others, including AdMeld (now part of Google), Cheezburger, Fitbit, Gnip, Makerbot, Oblong, SendGrid, Topspin, Trada, and Urban Airship. After that there is a category of companies who might be market leaders, but it’s too early to tell as they are still very young. And, if you look at some of the successful companies we have had from our previous investing at Mobius Venture Capital, you’d see market leaders like Postini, Return Path, FeedBurner, Rally, Stratify, NewsGator, and Sling Media.

An important nuance is that these companies weren’t unambiguously market leaders when they got started. While some of them created entirely new markets, others entered into existing markets. In some cases, there were only a few players as the markets were new. In other cases, they took the existing market and resegmented it.

Existing markets are wonderful places to go play in especially if they are expanding rapidly. Entrepreneurs are drawn to fast growing markets, which is awesome, but there are many who I see that are simply trying to play a fast follower game. I’ve been there, having invested in “company #17 in a market.” Unless you get lucky, that generally sucks.

I’ve developed a viewpoint that if you aren’t in the top three in your market segment, you should “resegment.” Step back and redefine the market segment you are going after. Change the customer, change a product focus, change the distribution channel, or change the partner dynamic. Sometimes it’s a tweak, other times it’s more radical. But change something so that you are in the top three of the “new market”.

Don’t bullshit yourself about this. I’ve been the investor in many companies who weren’t in the top three that were going to get there with the next release, or a new sales VP, or something exogenous that would happen to the existing market leaders, or a magic trick that no one had thought of yet. This is almost always a losing strategy. Don’t count on luck. Resegment.

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A Few Last Thoughts On SOPA/PIPA From Last Week

Brad Feld — Sun, 22 Jan 2012 19:35:06 +0000

After sleeping 13 hours on Friday night and then 14 hours last night it’s pretty clear that a week like last week isn’t sustainable for me. At brunch today, Amy guessed that I worked 80 hours between Monday and Friday, ran three days (after coming off a double long weekend where I did two 10 mile runs), travelled from Boston to NY and then NY to Boston late at night, and generally wore myself out.

I’m heading out for a 15 mile run in Boston and expect I’ll be garbage collecting all the random thoughts from the week. The backdrop in my world was dealing with SOPA/PIPA, which I’m glad is dead, for now. Based on all the rhetoric over the weekend, I have no doubt that it’ll be back soon as an issue and/or woven into some other bill that seems totally innocuous. Regardless, the experience around this over the last few months has impacted me pretty profoundly – both in my disdain for politics as usual, liars, and ass covering as well as my pride for grassroots leadership and the power of the Internet and the Web to get the word out and engage people.

I hope to spend zero minutes on this topic this upcoming week, although I put that in the fantasy category as I’m sure reality will interject itself. In the mean time, I encourage you to go take a look at a few more posts just to cement in your mind what is going on so you can be prepared for the next wave of it.

Joel Spolsky has two last things about SOPA/PIPA and then he will shut up. I hope he never does – he’s brilliant, articulate, and totally gets it. His two suggestions are to (1) use what we’ve learned to start lobbying for our own laws and (2) figure out a way to shift political ad dollars from TV to the web. It’s free to advertise on YouTube – let’s force it to be free to advertise on NBC, or at least so prohibitively expensive on a relative basis that it’s not worth it.

H.R. 1981 - Protecting Children From Internet Pornographers Act of 2011 – has embedded in it an amendment that’ll have your internet service provider tracking all of your financial dealings online. And yes, the sponsor of this is Lamar Smith, the same guy who sponsored SOPA. I wonder how many more bills there are out there like this – I certainly have no time or bandwidth to deal with them since I’m trying to help create the future.

Does Online Piracy Hurt The Economy? A Look At The Numbers. Here is some empirical evidence in Forbes that it doesn’t.

If Congress wants jobs, it can’t want SOPA. Talking point #1 for SOPA/PIPA morphed into “piracy costs jobs.” Over the course of last week, there were many people who were polite against being against piracy (for example, I am), but I don’t know of one who said “but piracy actually costs jobs and I can prove it.” I’ve concluded the piracy costs jobs thing is classic talking point rhetoric – if we hear it enough times then it must be true. Wouldn’t it be ironic if there was actually net job growth based on the dynamics of the current content economy?

If you were involved in opposing SOPA/PIPA recently, thank you for your efforts. These were horrible bills at some many levels and they needed to be shut down. The cynic in me knows that this is far from over but for now I’m going to go for a run and try not to think about it too much.

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