No good venture investors invest in companies with the primary strategy being to flip them. This isn’t because they are altruistic – it is because it is a bad strategy. You are much better off investing in companies that have a good chance to build a big business. This creates many more options including the option to sell the company. Acquisitions depend heavily on the whims of acquirers and no good venture investors bet on that.

Thanks John.

The best part of this job without a doubt is the opportunity to work with extraordinary people. 

One of those people is John Maloney. 

I met John more than four years ago shortly after our first round in Tumblr. David (then 20 years old) was thinking about hiring a business partner and John was a natural fit. Besides his experience and entrepreneurial chops, John had hired David years prior at his startup Urban Baby. Their trusted relationship gave us all the confidence this was the right move. 

John decided to climb aboard and I’m glad he did.

After four years, last week John decided to step down from day to day operations at Tumblr. I am proud of all of John’s accomplishments and grateful for all of his many contributions and leadership. And I appreciate our friendship. 

Thanks John – for everything. 

Should founders meet every single hire?

One of the hardest things every founder must deal with is finding and hiring the best people.

And it only gets more challenging over time.

In the early days the founder typically hires folks he/she knows. the early team can often be an opportunity to get the old band back together again

But as the company grows and staffing beyond the early team means going outside of your immediate network

It’s painfully time consuming, it’s risky and significantly more difficult – and yet critical.

The one thing I encourage all founder/ceo’s to do is to make sure they meet or at the very least review every single candidate. Do not let your management team hire folks without your knowledge and specific approval about the position, candidate and economic package.

I’ve heard from many people that Larry Page reviewed every single position and candidate at google well into the time when they had thousands of employees back in the day. I’m not sure if this still happens at Google today. 

This isn’t always easy especially if your company is growing quickly and there is often a desire to empower the management team.

But not paying attention or shying away from this responsibility can create huge problems with culture, quality, expenses, and overall effectiveness of the company. 

Hiring the best people and creating a positive culture takes constant work and attention. And it’s worth every minute you put into it. 

Just keep playing, no matter how weird it gets.

kind of a great life lesson too, no?

Bob Dylan, to Levon Helm and The Band before their first concert together. (via davehyndman)

Getting to know someone

There are people you meet in business or online (or both) over the years that go into a relationship. 

And that relationship builds over shared experiences in both tough times and in good times. 

You may follow them on Twitter and Tumblr, see pictures of their friends and loved ones, read their posts and you get a bit closer and closer. I know I feel closer to some people this way. 

But there is nothing like breaking bread & opening up to really get to know someone.

The other day I had a meal with someone i’ve done business with for years. He’s someone that has created a bunch of great things and should be very proud of his work. 

And just when I thought i knew him after all these years, i got his life story. Not the one on Linkedin or on some professional bio. I got the real deal. 

Absolutely inspiring and I was extremely moved. That he was able to overcome so many challenges in his life to get to this place. In a way I admired him more for keeping those adversities close and not wearing them on his sleeve. I was also touched that he shared those stories with me too. 

The thing I’ve been thinking about since that meal is how much we take for granted about people all around us. We assume we know them. We can’t imagine or aren’t mindful of the struggles they have had to face in their life. We dont’ take into consideration the personal demons they are dealing with every day. We don’t think about them fully as people. 

I suspect if we did we would be more considerate to each other and have a more impactful and healthy relationship. 

At the very least we would take an extra moment, take a breath and listen more to each other.

And then we would really get to know that friend or coworker that we’ve “known” all those years.

The Innovator’s Patent Agreement

Patents were designed to protect the innovator. The idea was if you built something special that you would have the ability to protect that right.

And in many ways the essence of the patent system was originally intended to help the little company vs the big company.

But those days are long gone. The current patent system, (when it comes to software patents in particular) doesn’t work for startups. And that is bad for this planet – as most innovation comes from startup companies. 

Today we have two problems with software patents.

First, we have non-operating entities suing companies for patent infringement. Their business model is a settlement to fund the next wave of litigation attacks. The cost of settlement is more attractive to many than fighting out a lengthy court battle. 

The bigger threat is from large companies that literally file thousands of patent or PCT applications per year. That is a game that is not workable for startups. They simply cannot afford to build such a legal warchest.

A startup uses capital for innovation – not litigation. What’s even worse is that engineers at those large companies have no idea or say about what their employer might do with these patents. 

Today, Twitter announced an important effort to reform the tech industry’s practice of patents. They created the first draft of the Innovator’s Patent Agreement (IPA). 

via Twitter

The IPA is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.

This is a significant departure from the current state of affairs in the industry. Typically, engineers and designers sign an agreement with their company that irrevocably gives that company any patents filed related to the employee’s work. The company then has control over the patents and can use them however they want, which may include selling them to others who can also use them however they want. With the IPA, employees can be assured that their patents will be used only as a shield rather than as a weapon.

I encourage you to read the entire post and the draft on Github. 

I am pleased to announce that my partners and I at Spark Capital are very supportive of the IPA principles.

Starting today, we will recommend to our portfolio companies that they collaborate in the discussion Twitter has started & support the basic principles of the IPA at their own company.

To be clear, we can only recommend this to entrepreneurs. Just like our position on getting rid of employee non-compete agreements, we cannot force this position on anyone. But we sincerely hope that this effort gains additional supporters and positively reforms our industry in a meaningful way. 

Well done Twitter.  

(disclosure: Spark Capital is an investor in Twitter)