Does a small amount of capital lead to small companies?
For the past few years and it’s especially true this year, that there has been tremendous growth in the number of seed stage investments and the number of angels (people investing their own money) and VCs (people investing their own money *and* other people’s money)
We have been making seed investments since the earliest days at Spark. We take these seed investments very seriously. We do not invest in competitive companeis and we go through the same decision making whether it’s a $250k investment or a $2MM investment. We just do our best to stage the capital appropriately to find the right balance (company needs, founder dilution, our ownership).
An easy way to describe the decision process is we ask if we believe the founders, their vision and ability to execute have the opportunity to create something ultimately quite big
Even if it starts out quite small (as they mostly do). Sometimes it works and sometimes it doesn’t.
If we believe the company is best served by a quick flip or small exit then we encourage the founders to raise money from investors that are comfortable with that strategy or help them feel out if bootstrapping is a better model.
Truth be told i am seeing a rise with some founders that are interested in a quick flip. That’s not what I wanted to do when I worked in startups and not something i’m thinking about as a VC. It’s not a personal judgement - it’s just not something I want to do.
Yesterday i read Max Levchin’s excellent post about some of his experience and observations about the a rise in quick flip founders. I encourage you to go read it. Heres the link
I do not believe that raising a small amount of capital initially means that you can’t build a huge company. I disagree with people that tell me that there is no way you can build a big company from a mere $250k. You can actually do it with less.
In my mind the opportunity has little to do with the size of the first round of capital.
(please excuse typos and lack of links. Wrote this on my iPhone)
Each year of parenthood brings about new things to learn and figure out.
Right now it’s all about middle school.
Our oldest is 11 and she just started 6th grade. Her backpack is filled with more books than I could possibly imagine.
And the homework load is much bigger than I anticipated. Right now she’s getting about 2 hours of homework every day. Last night I asked on Twitter if this is normal. Most folks said that was fairly normal and that by 9th grade it goes up to 4 hours per day (!).
Outside of school, our daughter has a passion for ballet. She’s been doing it since she was 4 years old and she absolutely loves it and she is extremely good at it as well. I’m thrilled that she has found something that gives her so much joy and self confidence as well as something that challenges her.
At her level of ballet, she is required to attend ballet school 4days per week with a 2 hour lesson each time.
So the schedule basically is like this: she gets up at 6am, goes to school, gets picked up at school, goes to ballet for 2 hours, comes home, has dinner (quickly), homework for 2 hours and then bed so she can get 9-9.5 hours of sleep a night.
That didn’t feel right to me but I bit my tongue for the time being.
This morning before she went to school, she said to me, “dad, I’m gonna skip ballet today, I just have too much homework to do this week”.
I could see that she had her mind made up which made me feel good that she was prioritizing school and she has the ability to know her limits. But I could also see that she was a bummed out.
Maybe I’m a rookie dad at having a first time middle school kid. But this doesn’t feel right to me. Any tips or suggestions from more experienced parents would be great. I’m all ears.
Last year my friend Brad Feld told me he was writing a book based on the lessons learned from working with entrepreneurs and mentors in TechStars. I’ve been an investor and mentor since TechStars started here in Boston a few years ago. He asked me to contribute a section and I happily agreed.
The book is called Do More Faster and will be available in early October (you can pre-order as well). I’m very excited for Brad and David Cohen. These guys are tireless investors, mentors and great guys.
“Whether it’s tied to an entrepreneurial vision or simply made part of your every day life, giving pays back in ways you might not anticipate. Whether you’re helping a teacher and classroom in need, donating clothes or canned foods to a local shelter, volunteering for disaster relief, or giving up your birthday to help others get clean water, you’re doing something that makes a difference in the world. Don’t think you have to wait to do these things—get started right away because here’s the secret: there is compound interest in altruism.”—Biz Stone: There Is Compound Interest in Altruism
When I first met David Karp he hadn’t yet launched Tumblr. He had a consulting company called Davidsville and Marco Arment became his co-pilot. They also built a bunch of cool things — they also created Tumblr back in 2007.
I started using the product right away and fell in love with it. At the time, Tumblr was inside of davidville. David and I spent a bunch of time together over the following months. And that’s when I met Marco. We decided to build a company around Tumblr. I believe the service had less than a 100k users at the time.
Yesterday Marco announced that he was leaving his full time role at Tumblr. I’m happy for him and he should be extremely proud of his work and accomplishments. And I am grateful for that work and for the opportunity of getting to know him personally. It was an absolute pleasure.
I’m giving Android another try. My brother is a huge Android fan and he showed me a bunch of great stuff on Android this past weekend that I was inspired to give it another try. So the Blackberry is back in the desk drawer.
There is a lot to love about my new Android (i’ll save that for a future post). But there are some things that are confusing too - at least from a long time iphone users perspective.
Here’s my current wish list for Android:
-can’t figure out how to easily select and copy text in the Gmail app. right now the only thing I could find was to hit the menu button, then press the more button, then tap “select text” then try to highlight the text I want to copy. But you get one shot at it. If you get it wrong you gotta do that whole set of steps all over again. That seems nuts.
-the guy at the verizon store wasn’t sure how much memory i could buy for the HTC Incredible. He said 16 gigs and then the other sales guy said 32 gigs. What’s the right answer? Can I store apps on the memory card? they didn’t know the answer to that one either.
-is there a google app or 3rd party app that syncs with Google Tasks and provides offline access as well?
-what’s the best way to get ringtones on the Android. I don’t really like any of the built in ones.
-how do i take a screen capture on Android? I do this all the time on the iPhone
-why did HTC put the USB connector on the left side. Makes it hard to hold or type while the phone is charging.
-I use Google Voice. How do I set up a speed dial list like I have on the iPhone. I figured out how to create shortcuts on my home screens but the shortcut icons don’t distinguish from Lauren’s cell and Lauren home.
-search. i love voice search on android. it’s one of my favorite things. But I actually think that iPhone search is more powerful. on the iphone when I use search from the home screen (swipe right), and I search for “lauren sabet” it first searches the phone and shows Lauren’s info in my address book and then calendar entries and then mail.
if i search for “lauren sabet” from the home screen on Android, it will do a google web search for lauren. how do i get it to search the phone first?
-i find the keyboard on the Incredible to be a bit compressed. I can type much much faster on the iphone. I heard you can download alternative keyboards from the Android Marketplace. which one should I get?
My enthusiasm for Android is as high as ever. But it still has some more work to make it as good as iOS. But I’m rooting for them since iOS is getting heavier and less stable.
“And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices. But when they say “we,” they mean “you.” Sacrifice is for the little people.”—Paul Krugman - The Angry Rich and Taxes - NYTimes.com
Every so often I recieve an email from a student in high school or college asking me if they should drop out of school and start a company. I get a number of them every year and I just received another one this week.
I understand the question. Many great entrepreneurs left school to start building things and school wasn’t a good fit. It’s well known that the Steve Jobs, Bill Gates, Mark Zuckerberg didn’t graduate from college.
We also have a number of amazing founders in our portfolio that never graduated from college. I can think of 7 of them off the top of my head as I write this post.
But here’s the thing: asking a venture capitalist if you should drop out of school probably means that you aren’t ready. I can’t possibly imagine having any influence on any of the founders (in our portfolio) decision to drop out of school had I met them earlier in their lives.
It’s just a different desire for different people. For some people college isn’t interesting compared to alternatives. For others, the college experience is one part education and all the experiences that come along with it. I chose the latter path.
I think it’s about listening and being honest with yourself. That will lead you to the right answer.
I have been a loyal iphone user since the beginning.
I bought the very first one after standing in line forever with @nabeel
Then I bought the next one and the next one after that. And I bought the iphone4 this year. And I love this phone.
But it feels like iOS is getting heavy and buggy.
Apps crash or do strange things. Even native apps. The mail app crashes on me once a week. Sometimes I goto the calender and everything on my daily schedule is gone. I catch my breath and advance to the next day and then come back and it’s all back again.
I find myself getting into rituals like powering cycling my phone every morning just because…
I remember getting so frustrated with the orignial iphone because I couldn’t copy/paste and there wasn’t any way to search the address book or install 3rd party apps. but that phone and that OS was rock solid.
“The very first company I started failed with a great bang. The second one failed a little bit less, but still failed. The third one, you know, proper failed, but it was kind of okay. I recovered quickly. Number four almost didn’t fail. It still didn’t really feel great, but it did okay. Number five was PayPal.”—
Two of our portfolio companies made recent announcements that I thought I’d share.
Boxee is a free application that you can download to your PC or Mac and brings the full internet experience - video, audio and photos to your television. And you can control the experience with a simple remote control or iPhone or iPod Touch.
Gdgt is a growing platform and community about all things gadgets. Whether you are a gadget lover (like me) or if you just getting started along your gadget journey. It’s a great place to check out reviews, specs and ask questions.
Ryan block and Peter Rojas and the gdgt team are throwing a party/meet up in Boston on Sept 22nd. They will be showing off the latest gadgets as well as giving away some cool stuff. It’s going to be a lot of fun. It’s open to everyone and free. I hope you can make it.
Walk into a store and someone will kindly ask you? “May I help you?”
Sometimes the answer is yes because you have something in mind. but often it can be a simple, “no thanks, just looking” because you are in browse and discovery mode
I don’t know about you but the latter experience hasn’t made it over the web yet. To me, online stores are about transactions and some do it much better than others. It’s really about putting stuff in your cart and then buying it.
Now before you end up making a purchase decision, there are a lot of great web services that help us make better and more informed on the front end - price comparison, user reviews, etc. Thankfully these have all become much better and no doubt that will continue.
But i’m looking for something that replaces the simple and act of “just looking”.
That “just looking” thing is very important and useful. It’s a big reason why buying stumbling on a cool thing in a store rarely happens online.
In the past, i’ve seen folks try to take a 3d and virtual world approach to the discovery part of the shopping experience. Those never took off. Far too complicated and replaced utility with eye candy.
Someone’s is going to nail this. It’s a big opportunity.
It’s really a marvel. So small and the screen is fun to tap and swipe.
It’s a superior interface to that old click wheel that apple brought us so many years ago. And the battery life on the new nano seems to go on forever.
But I’m not sure I’m gonna keep it. Originally I thought i would use it for running along with my nike sneakers and sensor. I currently log my runs with the iphone and the nike iphone app. But apparently you need a separate dongle to connect it to the Nano. Some how I missed that one.
The dream ipod nano for me wouldn’t require a dongle. Otherwise it’s a terrific device for tunes and working out.
I can’t get this opportunity out of my head. Probably because we use the second screen so much in our house.
But I think there are many opportunities to provide new second screen experiences that are completely different than things we already have at our finger tips. And mind you, I am hooked on the second screen already.
Just like Flipboard created a whole new way to consumer tweets on the iPad, I want a whole new experience for the second screen that does the right thing with the big screen.
Over the last few weeks, we’ve seen some very large companies launch products that compete with products created by self funded startups.
Few notable examples:
Yesterday, Nike launched an iPhone app that no longer requires a separate sensor in your running shoes. The new app is a direct shot at RunKeeper.
A few weeks ago, Google lanched Priority Inbox which is a direct shot at SaneBox.
The idea of big companies going after self funded startups is nothing new. Happens all the time and always will.
The founders of RunKeeper and Sanebox both wrote excellent blog posts about their motivation in a world where the 800 pound gorilla is the direct competitor now. They are both excellent and worth a read.
Here’s Stuart’s (from SaneBox) response to Google Priority Inbox:
My answer is that I still believe in the honest democracy which is the Internet and that the better product will win.
For the record, let me say that if Priority Inbox is ever more accurate and easier to use than SaneBox then Google deserves to win this one. And, I will be the first to admit it. But, so far, that doesn’t appear to be true.
So, what is Nike to do? Well, as of today, they have jumped into the game with their own GPS fitness tracking application. Bravo, it is about time Nike! Except for one problem. All of you big guys jumping in with major marketing budgets, you are doing this as a brand play. We are not. You are doing this to try to ultimately sell more people your footwear/apparel. We are not. You are big and slow moving. We are not.
So, before anyone asks, our plan is this: We plan to stay intentionally independent, and avoid aligning with any one major brand or equipment maker. Instead, we will integrate with everyone, so no matter what device/equipment you use to collect your data, you will ultimately be able to participate in the RunKeeper system. We will make bold moves with how we capitalize the company, and we will plow forward with a slew of new improvements, many of which are well underway. And in the end, our input-agnostic approach, our headstart, our ability to move quickly, and our ability to push the envelope in areas that would make big companies uncomfortable, will prevail. And while it is scary to have these big, well-resourced competitors jumping in, we believe strongly that our approach is the right one, and that the independent system will win in the end.
Competing with big companies isn’t easy.
Many self funded startups don’t have the ability to pull it off.
But history is filled with successful bootstrapped davids vs goliath stories. Craigslist is a perfect example. And naturally I’m more than biased because my life’s work is in helping create, operate and invest in the david’s of this world.
I remember splurging and getting a second landline in our SF apartment about fifteen years ago.
I was working in Palo Alto so sometimes I would work at home in the morning hours to avoid traffic on the 101. And I wanted to have a different line than the one I had been sharing with Lauren.
We kept that second line until we moved to Boston. At that time, we ditched the 2nd line and just used our mobile phones fill that need.
But this solution has had issues. For one, there are parts of our house that are dead or unreliable. I tried AT&T’s microcell but it didn’t work for me.
I didn’t want to get another land line though. To me that always felt like going backwards.
I followed Fred’s post about SIP phones and VOIP with great interest and came close to putting in that system in our house but I never got around to it. I also was hesitant to have yet another phone number in my life to give to friends & colleagues.
Then a few weeks ago, Google Voice made it inside of Gmail. I had already been a big Google Voice user since I’m often carrying around multiple mobile phones. But Google Voice on my Mac is a game changer for me. It’s better than Skype because now when I make a call from GV on the Mac the Caller ID is correct & useful. Plus I can initiate or respond to SMS in the browser which is dreamy. I also use the Google Voice Chrome extension which allows me the ability to click on a phone number in the browser and initiate a call.
Now when people call my GV number, my mobile phone rings and the iMac in my home office and my office rings too. My friend Stu suggested this Logitech USB headset and it’s very good. Fits well and the audio quality is excellent. I bought one for my home office and at work.
I’m told I can transfer a GV call from my mobile phone to my desktop but I haven’t tried that one yet.
I’m happy with my Google phone system. So far, I can think of three things that could be better:
-I can’t figure out how to do 3 way calling with Google Voice
-can’t do MMS on Google Voice (ie if someone sends me a MMS they don’t get an error message and I don’t get receive anything)
-there isn’t a google voice app for iphone.
But those are worthwhile trade-offs.
At some point, we will get rid of the landline at the house or just keep it for emergencies. And my office landline will probably follow suit.