Archive for the ‘General Business’ Category

Reputation Matters

Reputation matters. You know that and so do I. But it’s easy to forget that you’re either building or destroying that reputation in every interaction you have. Not to mention widespread reputation travels in our ridiculously connected world.

I was reminded (again) of this today from an exchange on our CEO email list (which includes about 75 CEOs of Foundry portfolio companies). The email read:

To: FoundryExec
From: [CEO of Foundry portfolio company}
Subject: Have you done business with anyone on this list

I'm on my way back from [an] investor conference where we met a bunch of VC & Private Equity guys.

The event was really useful. Not only did I discover a whole bunch of folks wanted to speak with us about investing, but I feel like I’ve been through an intensive two day course on Series B/C financings. Plus, it was useful to network with a bunch of CEOs and I think we made a few sales in the process :-)

If any of you have ever had any dealings with the firms and/or individuals below I’d appreciate your feedback/tips.

[this was followed by a list of 20 or so firms and individuals]

The response was close to instantaneous – probably 20 messages exchanged in the course of an hour or so listing out people’s experience with various firms. Responses ranged from positive: “Good guys, and super smart.  Happy to take meetings.” and “He was nice, quick to provide feedback, clearly smart.”; to practical: “They want $5m run rate before investing” and ” Very good investors but super picky. Min check size $25M”; to negative: “The most negative experience I’ve had with a VC. …the partner was totally disengaged, dismissive, and rude.” and “Generic VC.  Another friend has him as main investor and every board meeting is “Why can’t you grow faster.”; and “He came late to the meeting. Came off as arrogant and bored”

There were tons of other comments, but you get the drift. The point is that people talk (in this case the topic was VCs but you could imagine the same thread on larger technology company partnerships or the best tools for managing metrics across your business, etc.). And while there are always two sides to a story (and certainly everyone can have an off day) it’s important to remember that with every interaction you’re either building or harming your reputation. I forget this plenty. And this morning was a reminder of why I shouldn’t…

August 15th, 2013     Categories: Foundry Companies, General Business     Tags: , ,

The best company vacation policy

VacationQuick note here before I jump in to remind you that I’m not your lawyer (in fact I’m not a lawyer at all). I’m not offering legal advice. You have your own lawyer for that…

I’ve seen all sorts of variations on vacation policies over the years (some harsh, some that famously pay you to take time off and everything in between). And I’ve come to a conclusion on the best PTO and vacation policy: none.

Of course I’m not suggesting that you not let employee take time off, nor am I suggesting that you not have a formal policy. But after seeing all the variations – and importantly have had to unwind companies with various PTO policies – I think the best practice is to have a formal policy of not having a formal policy. In such a plan employees don’t have a set number of days that they can take off; there’s no difference between a day you take off to go to the doctor or sit on the beach; there’s no need to track days off; there’s just an agreement between the company and employees that they’ll take time off appropriately (and after checking with their manager). Here are a few reasons why I like the “no policy” policy:

- There’s no need to track days. In my experience most companies do a horrible job of tracking employees vacation usage. Having a policy of not having a policy eliminates the need for this. There’s also no difference between a sick day a personal day and a vacation day. They’re all just days out of the office.

There’s no vacation accrual. As a result of not tracking vacation days, there’s no vacation accrual (which is inevitably wrong – see bullet 1 above). Vacation accruals in my experience turn into a perverse – and often unearned – “bonus” when employees leave a company. And they’re a huge pain to deal with if things turn south. But most importantly I think they set up the wrong incentive/expectation. Companies shouldn’t put employees in the position of choosing between the monetary value of time off and actually taking time off. Companies have vacation policies because employees who take vacations are better employees (this is at the heart of FullContact’s paid paid vacation policy that I referred to above). The value of vacation is the actual vacation, not in some artificial bank account that grows as you grow more miserable in your job.

It’s better for employees. It’s good for people to get out of the office once in a while, for sure. But the other benefit of having a no policy policy is that you’re saying to your employees that you trust them to make good decisions. You’re empowering employees and managers to do their jobs and to manage their time off appropriately. That’s a powerful message to send to the people who work for you.

It’s easier. For all the reasons above, not having a formal policy is simply easier. There’s no tracking, no accounting, no paperwork.

The vast majority of the companies I work with have formal vacation and PTO policies (this includes Foundry Group itself, actually). But a few don’t (as is true at many other companies I know) and I think that’s best.

Would love to hear your thoughts on this.

July 15th, 2013     Categories: General Business    

Measuring customer satisfaction

trada There was a great thread this week on the Foundry CEO email list about Net Promoter Score and how companies are using it to measure the satisfaction of their customers (specifically in the case of NPS, their propensity to recommend the product or service to others). NPS can be a useful tool when used properly (which was much of the discussion on the email thread – who to measure, how often, etc.). But NPS can be cumbersome to measure, hard to understand granularly and not very helpful in letting you know what any given customer is really thinking about their interactions with your company (other than the extreme outliers).

The discussion and thinking about both the benefits and limitations of NPS got me thinking about a clever way that Trada measures customer satisfaction in their app on a customer by customer basis that I thought was worth passing along.

On most pages in the Trada app (Trada has a b-to-b focused application but this advice holds for b-to-c as well), there’s a small smiley face in the nav bar. It can exist in only one of four states – Happy, Meh…, Unhappy or Confused. It can only be set by the customer themselves (the admin login that the Trada customer service team uses doesn’t allow them to change the state) and customers are regularly prompted to update its status (which does not start “happy” so there’s no bias to just leaving it alone). It’s amazing how powerful such a simple idea has been for keeping tabs on how individual customers are feeling about their interactions with Trada and its application. It’s easy enough to use that customers engage with it. It can only exist in a limited number of states so it gets ride of the gravitation away from the edge that larger measurement scales tend to product, and is a great early sign to Trada’s customer service team that something is wrong with a client. The company uses data from this metric to reach out proactively to customers who are expressing confusion or dissatisfaction with their work on the platform. For Trada this doesn’t replace measuring NPS, which gives management a higher level view of overall customer satisfaction) but has been an extremely effective tool to help them deliver a fantastic customer experience.

Sometimes simple solutions can be very effective.

 

April 17th, 2013     Categories: Foundry Companies, General Business     Tags: , ,

Let’s agree to disagree

Is there much disagreement in your company? I’m not talking about where to head for lunch – I mean real, passionate, fundamental disagreement on product, marketing, operations, etc.

I hope so.

Even more so the earlier you are in your business. Running it is a messy business. There are tons of decisions to be made and each decision is amplified by factors such as your short runway of cash, new competitors entering the market and new team members joining your company. So a healthy amount of disagreement and discourse is not just a good thing, it’s inevitable. In fact I’d venture to say that if there’s not disagreement at your business, you’re not encouraging enough debate and people don’t feel free to speak their minds. Of course after listening to this robust debate you’ll ultimately have to make a decision and move forward (end of debate – don’t let it stretch on after the decision has been made), but I’d encourage you to create an environment at your company where differing opinions are both valued and encouraged. You’re hiring great people after all. Make sure you give them the space to speak their minds.

February 28th, 2012     Categories: Company Creation, General Business, Uncategorized    

2012 Planning / Working Together

It’s been way too long since my last post. I was going to jump in with a post on not blogging, but thought better of it. Better to actually do than write about whether to do or not do. So much for my resolution to write/blog more this year… Hopefully this was just a January hiccup with too much travel and work to fit in regular blogging.

If you’ve read this blog you know I’m a pretty deliberate guy. I like to know where I’m headed and I like to be explicit about where that is, what’s working and what’s not. To that end, towards the end of last year I went through an exercise with each of the companies I work with to lay out both top level goals for this year as well as get some feedback on the interaction pattern between the company and me. I’ve always done some version of this, but this was the first year I was this explicit about it (and the first time I included a request for specific feedback on my working relationship with the CEOs that I work with). The email looked like this:

I’ve been thinking a lot about feedback loops recently and thought it would be helpful to touch base on how we worked together in 2011 and think a bit about anything that we need to change about our interactions in 2012 (talk more; talk less; more concentrated time together; etc.). And overlay onto that the key priorities/challenges for 2012.

With that in mind can you send me your thoughts on:
- what worked best working together in 2011
- what didn’t work (either specific situations where we weren’t on the same page or some overall interaction pattern that just didn’t work)
- what should we do differently in 2012
- what do we together need to focus on in 2012
- where can I be most impactful to the business in 2012

I appreciate your spending some time thinking about this. I’m doing the same and will respond to your thoughts with some of my own.

In terms of how I’m thinking about 2012 for Spanning I think about a couple of key ares of focus:
- [bulleted list for each company of the top 4 or 5 things I felt would really move the needle in 2012]

Obviously there are a million other things that are going to take place in the business in 2012, but these are the general areas as I’ve been thinking about it (would love your feedback on these as well).

This turned out to be a more positive exercise than I ever imagined it would be. While I’ve always talked to the companies I work with about the key goals of their business (and, of course, this is an ongoing conversation), being this explicit really helped spur some interesting conversations. More importantly I’d never asked in a systematic way to all companies in my portfolio how our working relationship and communication pattern was working for them. In the past these tended to either come up on occasion (but never aligning across the portfolio), or be something that was discussed when some kind of problem arose. I’ll write a separate post (hopefully sooner than 6 weeks from now!) about communication patterns between companies and their investors and some of the explicit things I learned through this exercise, but I’d encourage anyone reading this to consider engaging in this conversation with their investors. It changed how I thought about interacting with a number of the companies I work with, reinforced some behavior and forced me to change other behavior. And my relationships became stronger and the goals for 2012 that much clearer.

February 9th, 2012     Categories: Advisors, Board of Directors, General Business    

Efficiency

Like you, I’m a pretty busy guy. I’ve always been high energy and (I hope) high velocity. My job requires me to be in many places at one time (and at any one time have a few dozen different things spinning around in my head). It’s tiring and doesn’t always leave time for the kind of balance I look for in my life. There’s always someone else to talk with, some other conference or “it” even to attend; another great idea to look at investing in. But in the last 6 months or so I’ve really hit a different stride that’s allowed me to both feel more productive and more balanced. Given that every one I know struggles with this I thought it would be worth putting a few ideas down on paper in hopes that others will pile in with what’s worked for them.

Gmail: Gmail is simply fantastic. Sitting here it’s hard to even contemplate the number of years I spent in the purgatory known as Outlook/Exchange. It was a strange purgatory – I didn’t really know I was in it, but at the same time always had an uneasy feeling about it. You’re probably already on Gmail (what hipster tech person isn’t?), but just in case – it’s at the top of my list of things I’ve done in the past year that have really impacted my time. Plus Gmail enables a bunch of other productivity enhancing apps (see immediately below for a few of them).

Unsubscribe.com: If you don’t have Unsubscribe.com run, don’t walk, to get the plug-in. It’s free now, which makes the bar to install it even lower (although as I posted previously, I’d gladly pay for this functionality). The key here is to actually use it. And use it often. I’m absolutely relentless about my use of Unsubscribe. I’ve had the same email address for at least a decade and over the years the newsletters and lists have piled up. At some point I tried to unsubscribe myself from them, but it was impossible to stay on top of. Now with a click of the Unsubcribe.com button they’re gone. I’m not joking when I say that I’ve cut back my email traffic by 150 emails A DAY by my relentless (and continued) use of this tool.

SaneBox: Here’s one you may not of heard of. I understand that messing with people’s email is a recipe for disaster. And everyone has their thing in terms of how they like to have their email sorted. For me that wasn’t any of the other email productivity tools I tried and it definitely wasn’t Priority Inbox from Google. SaneBox uses information in my social graph, contacts, calendar and past email behavior to separate out my email into important (in my inbox), deal with later (send to *another folder* to deal with later, possible spam (anything that’s not caught by Postini) and blog comments (there are some other options as well if you want to mess around with it). What I like most about it is that non-important emails never get into my line of sight. And since I have no email self control this turns out to be pretty important for keeping me from getting distracted. I have one inbox for stuff that I need to deal with right away and another (that I can train by the way) for everything else that I can batch process a few times a day. Slick.

Just say no: Not to be a jerk about it but I say “no” more than ever now. It’s too easy to end up with a full schedule and running from meeting to meeting can make for a very unproductive day (and despite this increase in “no’s” I still have plenty of days where I’m doing just that). But I’m ruthless about saying no to scheduled meetings. Instead, I’m pushing people to Community Hours, which is a great, rapid fire way to meet new people; or I’m calling people; or I’m saying “no”. Meeting time is generally reserved for companies in the Foundry portfolio, companies in which we’re thinking of making an investment and little else. It’s really helped me prioritize what’s most important (which is to say companies in the Foundry portfolio and companies in which we’re thinking of making an investment).

Few scheduled calls: See above for step one of this process. Step two is that I try to stay away from scheduled calls. The more on my set schedule, the less flexibility I have to either work in solid blocks of time or to respond to things that come up during the day. I posted a while ago about my need for a call list app. I found one (CallList), which is a bit kluge but generally does the trick (it’s sole purpose is to manage – both online and in an iPhone app – a list of people that I need to call along with some basic notes and information to give me context). I use this app to effectively manage these call backs. This opens up time on my schedule and also allows me to better make use of down time (for example on my drive to the airport, which if you’ve been to DIA you know is a long one from anywhere one actually might want to live in Colorado).

Batch email: All the research suggests that humans do better when they concentrate on one task for a period of time, rather than jumping from task to task. I’m trying to move my behavior from an interrupt driven mode where I am constantly stopping what I am doing to check in on email, to one where I’m batch processing instead. So I work in blocks of time and try to keep my email in the background except when I’m actually working on email (which is still plenty of my day given how much of my job is done over email).

Get out of the office: I wrote an entire chapter on this in Do More Faster and I’m trying to take my own advice to heart. Maybe it’s Boulder. Or maybe I can get away with it more because I’m a VC. Whatever it its, I’m trying to take more walks, hikes and bike rides in lieu of lunch meetings, “coffee” and meetings where I sit in a conference room. I’m not talking every meeting, but a few times a week where instead of sitting around talking, I’m walking and talking. Not only are the meetings more fun, but I find that I stay much sharper for the rest of the day when I get both some time outside and some basic exercise. Obviously these are to be avoided if you need to whiteboard something out or if you need to dial someone else in, but if you think about it you’ll realize that you have plenty of meetings each week that can happen outside of the four walls of your conference room or office.

Don’t worry about Inbox Zero. I was never a great Inbox Zero guy – I use my inbox to keep emails to deal with later too much to get down to fewer than about 5-10 emails at one time. But it used to stress me out that I always had a few things left to do. No longer. I try to get back to people who email me in a reasonable period of time. And I try to respond to most emails (I’ve given up on “all” emails in that last sentence in the last 6 months as well – some emails just don’t deserve to be responded to…). But I’m a lot less stressed about it and as a result I’m a lot more efficient at getting back to people.

Don’t panic! In this world of social media and always being connected, there’s somehow always the sense that you’re missing out on something. And you know what – that’s right. At this very second you’re missing out on something. It’s probably fun too. And there are lots of other cool people involved. But not you. So don’t worry about it and pay attention to what you’re doing now, vs. what you’re not doing. This goes for missing something in your Facebook feed, letting something pass you by on Twitter, etc. If it’s that important someone will repost or retweet it and you’ll see it. Or maybe not. And the world will go on.

This is one of those topics that could go on forever. These are just a few ideas that have worked for me to lessen the load at “work” and make more time for “life.” I’d love your thoughts as well. (and here I’ve focused on the work side of the equation – there’s another entire post that one could write on the life side)

September 12th, 2011     Categories: General Business     Tags: , , ,

John Mack on the inside of the financial crisis

A friend recently sent me a link to a talk John Mack gave at Wharton that I think is absolutely fascinating. I’ve read a number of books and articles about the key events surrounding the financial crisis but I find these sorts of first person accounts so much more interesting. And I think Mack is an extremely engaging person.

I started my career at Morgan Stanley as an analyst in 1994 and actually had a great personal encounter with Mack that was probably my most memorable moment working in the banking industry. I was just starting my 2nd year at MS and was holed up in an empty office editing a draft of an offering document. Having undoubtably slept only a few hours the night before, I’m sure I was hardly the picture of professionalism with my slightly long hair, undone tie and stocking feet up on a chair, when in walks the head of my group, the head of the Investment Banking Division and John Mack. Mack says to me: “Do you mind if we use this conference room for a few minutes?” Startled, I respond something to the effect of: “Of course. I was just using this for a quiet place to review this document,” and started to gather my things. Walking out of the office, Mack calls to me and says: “I know a quiet place for you to read up on the 42nd floor.” (that’s the executive floor). I sort of chuckle but quickly realize that he’s serious. He introduces himself and picks up the conference phone: “Barbara [I'm making that up - I can't remember his assistant's name], Seth Levine is on his way up – can you please make him comfortable in my office.” Five minutes later I’m sitting in John Mack’s office. Alone. Reading (or trying to read, at least) and mark up a prospectus. And for context, at the time my apartment in NY was maybe 300 sq ft. Mack’s office was probably 8 times that size. I was sitting at a small round conference table, but the room also contained a sofa and chairs seating area, at least two desks and plenty of other things I was likely too nervous to notice. About 30 minutes later Mack comes back and proceeds to sit down and talk with me for probably 20 minutes. What did I study in school? how did I come to work at Morgan Stanley? how has my experience been? etc. The man is as engaging as he appears on this video. I can see why so many people are incredibly loyal to him.

July 6th, 2011     Categories: General Business, Management     Tags: ,

Exit Numbers – $100M is rarer than you think

Fred Wilson put up a post today that grabbed a slide from a recent presentation Mark Suster gave at a Founder Showcase event. The chart (and Fred’s post) back up with numbers the qualitative argument I was making in my recent post on Pattern Recognition (I wish I had these data when I wrote my original post!).

In my post I argued that while there is plenty of talk about a handful of high flying companies (Zynga, Twitter, Facebook, etc.) that vast majority of venture back companies can expect significantly more modest outcomes. In fact history suggests that a majority won’t even return invested capital to investors. All this talk about the stratospheric valuations of this small group of companies however has investors fundamentally misjudging the chance that their latest investment will do the same. As the chart from Mark’s presentation clearly shows, not only is it the extreme exception for a company to hit the kind of valuations that are getting all of the press attention but even hitting the $100M mark is rare. On some level I think we all know this, but seeing the numbers in black and white really puts a exclamation point on exactly how rare it is. And as Fred points out (as did I in my prior post), investing in early stage companies at the kind of valuations that are prevailing today is a losing bet…

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June 22nd, 2011     Categories: Company Creation, Fundraising, General Business     Tags: ,

What makes Boulder great

Someone asked me this week for some qualitative data on the factors that lead Boulder to emerge over the past 5 or so years as one of the country’s top markets for start-ups. It’s a great question and I know that there are many other cities that are trying to follow Boulder’s example. I thought it was worth posting these thoughts – I’m sure others will have things to add to this.

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image The quantitative data are pretty boring – Colorado has stayed very consistent in terms of overall venture investment activity (~ $600M/year putting us clearly in the 2nd tier of venture markets). In fact an increasing percentage of this funding has come from out of state investors (93% in the last year I saw data for – 09’).

Given this it’s an interesting question why Boulder is considered such a great startup market (as I think you know, BusinessWeek voted Boulder the most entrepreneurial city in America, the NYT did a great story on Boulder, Fox Business was just out here, etc.). There are a couple of keys to this success in my view.

Boulder has many leaders. I said this in a post in response to a Forbes article last week on Boulder/Foundry, but Foundry, while active, isn’t the center of Boulder entrepreneurial activity. No one is and that’s one of the keys to Boulder’s success. For sure my partners and I do a ton to support and promote Boulder, but we have people like Robert Reich who started the NewTech Meetup here (attracts 400+ people monthly to their event); Andrew Hyde who organized TedXBoulder (great event, tons of stuff on that on the web), StartUp Weekend (which started in Boulder), Boulder.me (recruiting event in Boulder) and Ignite Boulder (sells out the largest space in town every time he does it); Joe Pezzillo who organizes a bunch of iPhone developer stuff locally; Eric Norlin who along with us brings the Defrag and Glue conferences (ok – he doesn’t live here, but he organizes great events here); and of course David Cohen who started TechStars here (and you know that story). You get the point – I think THE key to Boulder’s success is that we have many many pillars of the tech community.

Boulder rocks. Seriously – who wouldn’t want to live in Boulder? I say that only partially in jest. We import a lot of talent (Boulder has the highest per capita number of engineers of any city in the country, for example). We have great natural assets and we’re not afraid to use them. I regularly pitch people on moving to Boulder and it’s an easy sell. Everyone here is in shape, has tons of interests outside of work and you’re minutes from cycling, mountain biking, trail running, skiing, etc. To be sure there are plenty of great cities in the country, but we Boulder is definitely among the great places to live in the US (in my opinion!).

TechStars. I don’t think you can underestimate the effect TechStars has had on the Boulder community. It galvanized a group of tech professionals as mentors. It brought a bunch of young talent and energy to town (many of whom stayed to build their businesses here after the TechStars summer) and it helped raise Boulder’s national profile.

Openness. I could have put this under “Boulder rocks” but one of the truly great things about Boulder is how open and helpful people here are. There’s little to no BS around making sure you’re doing better than everyone else and it’s considered an expectation of people in this community that you give back. To other entrepreneurs. To your favorite charity. To programs like TechStars. It’s had a huge effect on this ecosystem.

October 29th, 2010     Categories: Boulder, General Business    

Boulder featured on Fox Business News

For a long time my hometown of Boulder, Colorado has been known as a great place to live but more recently Boulder is taking on a reputation as a great place to start a company as well. And the rest of the country is starting to take notice (see BusinessWeek, HuffPo and the NY Times). Today Fox Business News did a few live segments from Boulder highlighting some of the people and institutions that are helping create great entrepreneurs and great companies here. I was fortunate enough to be interviewed live along with Lijit CEO Todd Vernon (Foundry is an investor in Lijit). I have to say it was a little nerve wracking to be doing a live feed (this occurred to me about 30 seconds before going on air, before which time I was perfectly calm, after which time I thought my heartbeat might be visible through my shirt). In the end it was super fun and great visibility for Boulder.


October 12th, 2010     Categories: Company Creation, General Business