Customer Loyalty
I travel a lot. It’s mostly to relatively fun places (New York, San Francisco, Seattle, etc), but it’s pretty much all within the US. Living in Denver and traveling to the coasts makes it pretty difficult to rack up frequent flier miles (a round trip to New York is barely 3k miles). So while I feel like I’m constantly on the road (trying to change this habit for this year – more on that in a different post), I’m perennially falling just a little short of reaching 1K status (100,000 flight miles) on United.
So when I checked my account balance after my last scheduled business trip in December and found that I was only a few thousand miles short of 1K this year I felt compelled to remedy the situation. Even if it meant a pointless flight (United won’t allow you to purchase a flight to get miles – you actually have to make the trip). It’s a great example of what happens when you offer your best customers meaningful rewards (in United’s case better upgrades, shorter lines, priority boarding, etc; see a great post on this topic from Jim Keenan here). I spent about $600 and a day of my life flying from Denver to Washington, DC to earn just enough miles to hit 1K (I ended the trip with 100,030 flight miles in 2009). And I did it happily. Just to get the additional rewards offered by 1K.
Now I hope to never make 1K again (that’s a lot of miles and too many nights away) and at least one of my partners thinks I’m completely insane for doing what I did, but I’m extremely happy with the effort and the outcome.
Let’s hope United can get me where I’m going a little more reliably ontime this year…
Linking around 8/15
Here are a few links worth taking a look at: Google Trends – www.google.com/trends (thanks to Jason for the pointer). I played around with this a while ago – they’ve improved it so you can compare search trends for different terms at the same time and also see what region the searches are coming from. Woot – Think you can’t make a business based on one product sale at a time? See www.woot.com. splunk’d – You may have heard that AOL released their search database (that actually had customer identifying information attached to the search terms – oops). www.splunkd.com will let you search against this database to see what people were actually looking at – compare your searches to the population at large.
Enjoy!
With the Federal Government Doing Nothing, Communities Step Up
As a follow up to the OpEds we published in CNBC back in April (To save the US economy, policymakers need to understand small business 101 and Stampede for emergency loans is crushing lenders, putting millions of small businesses at risk), Elizabeth MacBride and I published a third piece today, Communities across America rush to save Main Street as federal relief for small business stalls. In it we talk about the continued failure of the federal government to help small businesses and highlight some encouraging ways that local communities have stepped into the void to help. It’s inspiring but not surprising to see people across the US step up to help businesses stay afloat.
I’m disappointed that the Senate stepped away from their negotiations around the additional relief bill. It’s become clear that millions of small businesses have already closed or are just hanging on by a thread. We need to do more to support them and it appears the government is shifting that burden of effort to our local communities which are already stretched too thin. Amongst other things, the OpEd highlights an innovative fund that Colorado has set up to support small businesses, the Energize Colorado Gap Fund. I’m really proud of the work that my partner, Brad Feld, along with Wendy Lea, Mark Nager, and others have done to inject resources into the struggling small businesses in Colorado. But to be clear, those resources should have been supplemental to the support the government was providing to grassroots entrepreneurs. Without the Senate doing the hard work of finding a middle-ground, we’re leaving a majority of our country’s small businesses twisting in the wind. Many of them will not survive until after election day when it’s most likely the Senate will look at passing the next large relief package. I’m hopeful that some additional pressure from constituents will make a difference.
Op-ed: Communities across America rush to save Main Street as federal relief for small business stalls
Last week, the U.S. Senate gave up the fight to save America’s small businesses. They walked away from negotiations that would have extended a lifeline to grass roots entrepreneurs on the front lines of one of the worst economic catastrophes in U.S. history.
But from Colorado to Ohio to Virginia, we have seen communities across the country stepping up where the federal government has failed. As we’ve been researching an upcoming book about the future of entrepreneurship, we have found cities dipping deep into strained budgets, turning to new technological solutions and coming together in creative ways to save their local businesses, lending hands and providing investment dollars to struggling businesses in their communities.
Communities are leading where the Trump administration is failing and as election-year politics freeze Congress into inaction on renewing and simplifying the aid programs passed last spring.
Consider what happened in the small mountain city of Staunton, Virgina. On Aug. 8, a storm cell stalled there, dumping five inches of rain in an hour and 40 minutes. Rivers ran through the downtown, four feet high. Cars went through windows, according to Debbie Irwin, the director of the Staunton Community Creative Fund, an entrepreneurship support organization.
At least 50 small businesses flooded. This after six months of a pandemic assault that has devastated businesses and dragged revenue down by as much as 70% to 80% across this community. The morning of the flood, Irwin started messaging Greg Bean, executive director of the Staunton Downtown Development Association. “What can we do,” she texted.
Within hours, they had organized hundreds of volunteers to carry trash and scoop mud from the storefronts and restaurant floors. Their GoFundMe page, set with a $20,000 goal, surpassed $100,000 within four hours.
“We’ve been relying on the grit and resilience of small business owners,” said Irwin. “I don’t know how much more we can expect from them.”
Even as communities such as Staunton act, they know it won’t be enough.
An economic catastrophe in the making
The probable loss of millions of small businesses over the next six months is an economic catastrophe of historic magnitude. America is home to a lot of big companies that dominate the headlines, mindshare and financial markets of our country. But the real story of American business has always been about small.
Small businesses create two-thirds of net new jobs and are the driving force behind U.S. innovation and competitiveness,” says the SBA, which tracks business trends for the U.S. government. Small businesses accounted for 44% of all economic activity in the United States and were responsible for $5.9 trillion in GDP in 2014, the last year for which data are available.
Small business closures will instantly swell unemployment numbers and put further strain on localities’ budgets. Small business is a broad term and includes an array of companies across the country, and there are some who haven’t been affected or that have benefitted from the pandemic. But what you might think of as “grassroots entrepreneurs” represent by far the greatest number: Restaurants, hair salons, local shops and markets. They’re getting clobbered, and it’s going to get worse as we move from summer into fall and winter and the weather deteriorates.
Some 400 miles away from Staunton, trying to stave off the catastrophe, the city of Akron, Ohio, has given out more than $5 million in direct grants through the CARES Act. More than 90% of the 13,262 employers in Akron in 2018 had fewer than 50 employees, employing as many as 160,000 people. Those establishments likely include some larger restaurants that survived the first wave of the pandemic, but might not survive the winter.
“To permanently lose 20% to 30% of them would be catastrophic,” said James Hardy, the deputy mayor for integrated development by email. “Particularly when you consider that Akron had only recently ‘recovered’ from the Great Recession. Meaning we had returned to pre-recession job numbers.”
Even worse is what happens to the employees. “It would be a gut punch to thousands of local residents and entrepreneurs. One that could send them and their families back for a generation,” Hardy said. “60% of Akron residents live paycheck to paycheck or worse. We know from this and other research that Black and female workers and business owners will continue to be hit the hardest.”
The city is now experimenting with a new app — the city’s version is called Akronite — to promote small businesses and to encourage residents to shop locally. About 2,600 people have signed up so far.
Akron is spending more than $200,000 on the app over two years. Akronites spend money in small businesses to earn “blimpies” (think Goodyear) and redeem the rewards for cash at small businesses.
Hardy expects the investment in the app to pay off in terms of higher spending at local businesses. But the biggest benefit: The small business owners will feel that somebody cares. “They’re scared and frustrated,” he said.
So is he. “I’m choosing my words carefully,” he said. “There is a lack of leadership in Washington, D.C.”
Grassroots relief efforts
A handful of communities are helping small businesses that are willing to sell equity in their companies through local investing platforms, including MainVest, outside Boston, LocalStake, based in Indiana, and Milk Money, based in Vermont. Investors can buy into local businesses for as little as $100, based on business or expansion plans.
But the most important thing communities can do for small businesses now is find some way to get them cold hard cash until there’s a real end to the pandemic. The support can come in the form of grants or – less preferable – low-interest loans and other forms of support to help rebuild their businesses.
When the federal aid programs ended July 31, many localities stepped up to offer support. The city of Staunton, for instance, offered $12,500 grants. Augusta County, Virginia, also offered assistance to its local businesses. Many communities have been taking some of the money from their own CARES Act allocations and instead repurposing it to support businesses in their communities instead, according to Lewis.
But that money is quickly depleted. In Colorado, an innovative statewide loan program called The Gap Fund began offering grants and loans to Colorado businesses with fewer than 25 employees. Launched with $25 million raised from public and private sources, the fund received almost 1,500 applications in its first 24 hours. The average funding request was $24,000. It’s a great start, but clearly the need is many times the capacity of its current resources.
“The most important thing communities can do for small businesses now is find some way to get them cold hard cash until there’s a real end to the pandemic. The support can come in the form of grants or – less preferable – low-interest loans and other forms of support to help rebuild their businesses.”
Back in Staunton, nearly 90% of the businesses affected by flooding in August have re-opened their doors, Irwin said. A handful of businesses have closed since the pandemic started, including a loved bookstore, and two restaurants. “We’re going to lose more,” she said.
In Staunton, small businesses are the heart of the small city and they are the gathering places and the vehicles for people to connect. “We are Zoomed out. We are technolog-ied out,” Irwin said. “During the flood, you saw what happens when people prioritize community over their own interests.”
America’s losses will be incalculable if the next six months go as we expect them to. One recently released working paper by economist Robert Fairlie suggested that the number of businesses in the United States fell by 22% — 3.3 million businesses — between February and April of this year. Not surprisingly, this was the largest drop ever recorded. And that was just in the initial months of the pandemic. We’re bracing for a fall surge that could devastate America.
Our leaders can learn something from what’s taking place in communities across our country. Citizens are stepping up to save their Main Streets because they understand how important our local businesses are to the fabric of America. It’s time for Republicans and Democrats in Congress to put aside their differences and act.
What Policymakers Don’t Understand About Small Business
Entrepreneurship in the United States has been changing in ways that many people have not yet recognized. I’m working on a much more extensive piece on these changes (and have been for some time – more on that project in a future post) but as the Covid-19 crisis took root, it became clear to me and my writing partner, Elizabeth Macbride, that policy-makers fail to understand the nature of entrepreneurship and small business in America (from the composition of entrepreneurs to the types of businesses they are starting to the rise of the “gig” economy) and that this failure was causing them to miss the mark on programs they were implementing to help. Last week, Elizabeth and I wrote an OpEd published on CNBC that describes the confusing landscape that businesses face trying to navigate the federal aid landscape. Earlier this week we penned a follow-up that describes at a high level some of the changes in the American entrepreneurial landscape as well as the ways in which policy can and must be adapted to keep pace. The text of our latest OpEd is below.
_________________________________
To save the US economy, policymakers need to understand small business 101
Policymakers in Washington, D.C., fail to understand fundamental changes in the U.S. economy and the ways in which entrepreneurship and the small business landscape have changed over the past few decades. That misunderstanding is leading to poor decisions and poor policy and will lead to a failure of current stimulus measures to reach critical parts of the struggling U.S. economy.
Thousands of small businesses are probably gone for good because of the failure of the federal government to act quickly enough. More will be gone soon if we don’t change our actions now.
The current programs, including the Payroll Protection Program authorized by Congress and the Main Street Lending Program from the Federal Reserve, seek to help small businesses and their employees. They sound good. But because of the way in which they are being implemented, they will fail to reach vast swaths of the American entrepreneurial landscape.
Take, for instance, the Federal Reserve’s $2.3 trillion in loans, announced last week. It does the right thing by, among other things, extending credit to banks involved in the PPP program. It also makes $600 million in loans available to “Main Street” businesses — “small and mid-sized businesses that were in good financial standing before the crisis, by offering four-year loans to companies employing up to 10,000 workers, or with revenues of less than $2.5 billion,” the U.S.Treasury said in a release.
But it doesn’t go far enough. It bases lending formulas on metrics that won’t result in typical businesses being able to access the capital they need, doesn’t include a forgiveness provision like the PPP, and still fails to address the needs of most sole proprietor businesses and the gig/freelance economy.
Most businesses have few employees
Some 90% of the typical businesses in America — a salon, corner shop, restaurant or fitness center, those hit hardest by the current crisis — employ fewer than 20 people, according to data from the Census Bureau’s Annual Survey of Entrepreneurs. If you include the 24.8 million businesses that are sole proprietorships, 98% of U.S. businesses employ fewer than 20 people. Overlapping with these businesses are the 57 million Americans who freelanced in 2018 (what’s popularly termed the gig economy), according to the Upwork: Freelancing in America Survey. The current programs aren’t built for these businesses and aren’t accessible to them because the programs are based on payroll and are being administered through banks.
Drilling down on small business demographics
Here’s another misunderstanding: America’s small business owners aren’t white males anymore. The entrepreneurs of the future are women, people of color and immigrants (who are also the entrepreneurs of our past). The number of women-owned businesses increased 31 times between 1972 and 2018, according to the Kauffman Foundation. Meanwhile, the fastest-growing group of entrepreneurs within women-owned businesses are women of color, who are responsible for 64% of the new women-owned businesses being created. Immigrants start businesses at twice the rate of native-born Americans.
These shifts raise all kinds of questions for the stimulus and the recovery. Women and people of color are less likely to have relationships with traditional banks and the SBA, which have been the center of the stimulus package so far. Small businesses generally, and women-owned businesses specifically, are much more likely to make use of contractors. Early guidance by the SBA indicated that contractors would be included in the calculations of payroll, but final rules exclude them.
This not only lowered the amount of aid many small businesses qualified for, it also left these employees to fend for themselves through state unemployment system not structured for freelancers and the gig economy. Additionally, for many small businesses, rent, utilities and inventory outweigh payroll.
By pegging lending formulas on this single statistic, the PPP fails to address in any meaningful way the needs of most American businesses. The key feature of the PPP is the forgiveness of the loan amounts if certain employment metrics are met. This again leaves most businesses — and critical businesses such as restaurants, corner shops and hospitality businesses, all of whom have shut down indefinitely — without access to the program’s most important aspect.
The sheer magnitude of the problem makes it almost impossible for the SBA and its banking partners. In 2018 the SBA generated approximately $30 billion in loans. Under PPP the SBA was originally tasked with doling out more than 10 times that amount — in a period of weeks, not months, and the sums are growing.
In the early weeks of the crisis, the lenders with the best connections to people in need in their communities, community development financial institutions, were quickest to set up loan funds and have been meeting fundamental needs. But some weren’t included in the bill. Nearly a month into the crisis, the U.S. Treasury finally enabled financial technology firms to become lenders. This is a positive step, and more like it, which will allow broader distribution of funds available, need to be taken.
But beyond that, the programs themselves need to be expanded to offer more assistance, and assistance based on need beyond that calculated by the limited metric of payroll, to more businesses.
If we don’t get this right, we have the recent past for evidence of what will happen. During the Great Recession of 2008 and shortly thereafter, the net number of new firms created in the United States was negative: More companies closed than were being started. The result was 117,000 fewer companies in 2014 than there were in 2007. Entrepreneurship rebounded, but only in a few places. In the 30 years leading up to the Great Recession, 80% of metro areas saw an increase in the number of firms annually (a period that includes prior recessions). This trend was completely reversed by the Great Recession, after which only 20% of metro areas have seen an increasing number of companies created.
Our entrepreneurial spirit unites America. When it falters, our divides grow.
Now is our moment to change how we’re handling the substantial need that exists across the American business landscape. It’s not about either/or decisions. It’s about rebuilding the infrastructure of community finance and taking advantage of all the assets and conduits we have to help small businesses. It’s about getting funds into the hands of America’s vast and diverse set of entrepreneurs who can help rebuild us out of this crisis.
Elizabeth MacBride is founder of Times of Entrepreneurship, a publication covering entrepreneurs beyond Silicon Valley. Seth Levine is managing partner of the The Foundry Group, a $2.5 billion venture capital firm in Boulder, Colorado.
The “real” America
I’ve generally avoided political issues on this blog, but this isn’t something I can keep my mouth shut on.
Yesterday Meb Keflezighi became the first American to win the New York City Marathon in 27 years. Born in Eritrea on the east coast of Africa, Keflezighi moved to the US when he as 12 (more than 20 years ago), is an American citizen and has raced for the US Olympic team.
Still, there are some who are calling his achievement diminished because he’s not “technically” an American by virtue of having been born outside of the United States – chief among them Darren Rovell of CNBC. Rovell writes:
It’s a stunning headline: American Wins Men’s NYC Marathon For First Time Since ’82. Unfortunately, it’s not as good as it sounds. Meb Keflezighi, who won yesterday in New York, is technically American by virtue of him becoming a citizen in 1998, but the fact that he’s not American-born takes away from the magnitude of the achievement the headline implies.
This is appalling (not to mention racist). I know I’m particularly sensitive to this kind of bigotry because two of our three children were born and lived for a time outside of the United States (not that far from where Keflezighi was). They are not any less American than our oldest daughter who was born in Colorado. It’s amazing (and sad) to me that people really think this way. By Rovell’s definition many of America’s Founding Fathers weren’t “technically American”.
This is a nation that was founded by immigrants and built on the promise of equal opportunity for all those that come to this country. The vast majority of Americans are only a few generations from their immigrant pasts. It’s unbelievably disturbing that we’re losing sight of what’s made our country great. From the basics of our immigration policy to how we handle foreign-born workers looking for jobs in America we’re increasingly becoming a nation of xenophobes.
Darren Rovell probably doesn’t think of himself as a racist or a xenophobe – and therein lies a large part of the problem.
Please sir….may I have more targeted advertising
A few days ago I received a note from Plaxo in my inbox that said in part:
As you probably know, Plaxo was acquired last year by Comcast and is now a business unit of Comcast Interactive Media (CIM). Not surprisingly, given the above focus, we’ve been working on enabling interoperability between Plaxo and other CIM Websites. In advance of rolling out this common identity system, we’ve developed a unified Terms of Service and Privacy Policy that will apply to Plaxo and the other participating Comcast Websites, providing consistent protection and eliminating the complexity and potential confusion of having different terms and policies for each Website.
Among the things that were updated in the policy was the section pertaining to what information Plaxo could use. Specifically they are now able to make use of “Demographic portions of your data (such as zip code, gender, or industry) and usage patterns may be shared with our trusted partners who deliver advertising to you on our behalf.”
I may be in the minority here, but I’m actually happy to have non-personally identifiable information used by third party ad networks in an effort to serve me better ads. And, in fact, I’m shocked at how little information it seems these networks actually know about me. For example, despite all the time I spend searching on Google, on Google docs, Google groups, and other Google sites, I was shocked at how little they actually know about me (see my post on exposing Google cookie information here). I’m involved in a handful of advertising related businesses and I understand a lot about how the advertising ecosystem comes together to try to figure out what ad to show what user. We talk about things like “behavioral targeting” a lot in the industry but it’s surprisingly limited in its overall use and effectiveness (there are a handful of very specific categories that advertisers and networks are looking for – most of the rest of us don’t make the cut). State of the art is to categorize based on location and possibly a cut at your gender (either indirectly based on the demographics of the site you are visiting or slightly more directly based on the usage patters that have been observed). While there are a handful of companies out there that are trying to take this to the next level their reach is so far pretty limited.
So rather than be upset at Plaxo for taking the information it knows about m to build a better business and a smarter advertising ecosystem I say the more the better. I’d like to see more ads about cycling and home building and fewer urging me to attend the University of Phoenix.
Venture Capital in the Rockies Winter 2010 Unveils Promising Growth Companies Ahead of Conference
Twenty Companies Ranging From Seed Stage to Mezzanine Will Showcase Next Generation Technologies from Various Industries at the 27th Annual VCIR Winter 2010 Conference
Denver, CO, February 23, 2010 – The Rocky Mountain Venture Capital Association today unveiled its final lineup of growth companies at the 27th annual Venture Capital in the Rockies (VCIR) 2010 Winter conference. This year’s conference will highlight twenty promising early-growth companies; all based in the Rocky Mountain region and a majority of which are focused on clean technology, a burgeoning industry in the area.
The VCIR Winter 2010 conference will be held at the Park Hyatt in Beaver Creek, Colorado, February 23-25, showcasing early-growth companies from Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.
Along with company presentations and ample networking opportunities, Dan Caruso, CEO of Zayo Group, will give this winter’s keynote address. As an active member of the telecommunications and Internet community, Caruso will address the attendees about the virtues of starting a company in the Rocky Mountains.
The conference will also feature a Technology Showcase, an inaugural demonstration of five very early stage technology companies that is designed to feature the next generation of innovation from the region and further VCIR’s legacy of entrepreneurial mentorship.
“The Venture Capital in the Rockies 2010 Winter conference is a premier event for both promising companies and attendees,” said Seth Levine, chairman of VCIR and a managing partner at the Foundry Group, a Boulder, CO-based venture capital firm. “Over the last 10 years we have seen impressive numbers that show the conference being an initiator in the future success of presenting companies.
“That is why the conference has become an annual opportunity to identify great companies from around the Rocky Mountain region,” he continued.
Companies from Colorado represent the majority of presenters and constitute all of the clean technology and new energy companies participating in the conference.
· zettasun manufactures efficient commercial rooftop solar panels using proprietary optical technology to dramatically reduce the cost of solar electricity to be at or below grid costs.
VCIR Launches 20 Promising Companies/Page 2
· Cool Energy is an energy technology company that has developed a 100% clean conversion engine that transforms heat to electrical power for solar-based combined heat and power home applications and for waste heat recovery.
· RavenBrick delivers innovative solar-controlled windows, which reduce energy costs by up to 50 percent.
· BioVantage offers an algae-based, “green” alternative to classical wastewater lagoon aeration significantly reducing costs while helping municipalities to comply with new stringent mandates.
· Eco-Products is the nation’s leading brand of single use food service products made from renewable and recycled resources.
· Ice Energy delivers distributed energy storage and smart grid solutions to leverage higher efficiencies associated with generating and transmitting less expensive off-peak power.
· Pure Energy Solutions is the developer of superior wire-free charging technology and rechargeable battery solutions for consumer electronic devices.
· VanDyne SuperTurbo offers a product that increases horsepower and therefore improves thermal efficiency in vehicles, potentially improving fuel efficiency 36% in gasoline cars and trucks, with no loss of performance.
· Green Garage is a new kind of garage that makes cars gentler on the planet and easier on the wallet. Green Garage aggregates proven, sustainable, energy saving automotive maintenance/repair related products and delivers them through convenient consumer valet and corporate mobile on-site services.
Additional Colorado Representatives
· TruEffect merges the interactivity and reach of the Web, with the precision and effectiveness of direct marketing to deliver increased media performance and unparalleled new insights to global advertisers.
· UniversityParent.com provides college parents with critical campus information and connects parents with local services near campus, such as restaurants, hotels, and storage facilities.
· TopSchool, Inc. is a leading SaaS provider of Student Lifecycle Management (SLM) solutions for higher education, empowers student-centric institutions to drive growth, reduce costs and meet accountability requirements.
· Clementine Arts markets the first full line of natural art supplies for children. All of the products are made in the USA and are naturally non-toxic, while functioning on par or better than traditional art supplies.
Consumer, Information Technology, Medical, and Imaging Technologies also Represented
· iMemories provides a single Web destination for consumers to digitize, preserve and store their full length home videos and photos online, regardless of the original media format, and share them across multiple consumer platforms, ranging from televisions and mobile phones to popular social networks and blogs.
· Mangia allows sports fans to order food and merchandise (and eventually tickets) using a mobile phone and have it delivered right to a stadium or arena seat.
· DICOM grid is a healthcare information technology that helps hospitals, imaging facilities and physicians manage and distribute radiology health records to meet the needs of the rapidly evolving healthcare industry.
VCIR Launches 20 Promising Companies/Page 3
· Infopia is a leader in SaaS (Software as a Service) eCommerce platform solutions—giving retailers the tools they need to sell effectively online and helping merchants grow their business faster and more effectively than any other technology provider.
· CradlePoint engineers and manufactures wireless 3G/4G broadband routers and software platforms that facilitate secure Internet access via 3G/4G wireless (cellular) broadband networks.
· Firerock Technology develops, licenses, and sells proprietary hardware and software that improve the performance, security, and reliability of Information Technology systems.
The three-day conference is about both new companies and new ideas, as well as giving attendees a chance to network with over 300 investors, CEOs, entrepreneurs, and service professionals.
About VCIR
Venture Capital in the Rockies (VCIR) is the region’s oldest and best attended venture capital conference and will hold its 27th annual VCIR Winter edition in Beaver Creek, Colorado in 2010. Along with the annual VCIR Fall conference, the two VCIR conferences encompass the premier venture investing conferences in the Rocky Mountain region and among the most respected venture conferences in the country. Creating a dynamic marketplace for ideas and investment, both editions of VCIR invite over companies seeking investment to present to panels of venture investors, as well as an audience of other entrepreneurs, CEOs and professionals servicing the venture community. More information can be found at www.vcirwinter.com
Venture Capital at Altitude
Every year the Colorado Venture Capital Association (soon to morph into the Rocky Mountain Venture Capital Association after combining with similar associations in a few neighboring states) puts on the “it” conference for Colorado venture capitalists, entrepreneurs and the lawyers, bankers, search firms, etc. that support us – Venture Capital in the Rockies. I love this event – it’s a great chance to see the best of Colorado deal flow and it concentrates pretty much everyone in the region who has anything to do with venture in one place for the better part of two days with plenty of opportunities to connect, catch up, share ideas, gossip, etc (oh – and did I mention that the conference is in Beaver Creek?). The goal of the conference is to draw out of state venture capitalists and show off the best companies in the area that are currently raising capital.
This year was outstanding. We had 30 presenting companies and attendance maxed out at around 250 people. I’ve been on the selection committee for the conference for the past 5 years and I can tell you that this year clearly stands apart from the rest in terms of the overall quality of the companies that submitted. We’ve always had an excellent group of presenting companies, but this year the bar was raised (as I described to someone at the conference, this year we had both the best overall group of presenting companies and also the best group of companies that didn’t make the cut that we’ve had in my time with the conference – there were a bunch of really interesting businesses that we just didn’t have room for).
You can see a full list of the presenting companies here. Three of these – NewsGator, Rally and Oxlo – were from the Mobius portfolio. David Cohen from ColoradoStartups has a nice presenting company recap. Also, you might want to check out what Dan Primack from PE Wire had to say about his experience at VCIR here.
I thought I’d highlight a few of the company presentation that I attended:
- Indicative Software – Indicative is an app management company that was spun out of HP a few years ago. I have to admit that after investments in Dante Group, Cyanea and Xaffire (all application management businesses), I have a warm spot in my heart for Indicative. They actually bought some technology from Xaffire a few years ago and I was glad to see that they were starting to put this to good use in their product. Sounds like the business is doing extremely well – revenue of $5m last year which more than doubled from the previous year and a great list of customers.
- Me.dium – I love Me.dium and have been on their private beta since it started. They’re about to roll out more broadly – be sure to watch for it. Me.dium gives context to your browsing by allowing you to see the behavior of other people (‘friends’ and otherwise) who have similar search behaviors. You can use the service to discover new relevant web pages, surf in a group and to see what your circle of friends is doing on-line. Very slick.
- Adam Aircraft – So I have to admit that I feel a little bad that I blew off the Rally presentation to go see Adam Aircraft (then again, I know the Rally business extremely well and how many times do you get to hear a pitch from a company building a new kind of jet airplane…). I don’t understand much about the Adam Aircraft business other than 1) it’s incredibly capital intensive (they’ve raised $180m in equity to date and are about to close another $125m in debt on top of that) and 2) planes are cool. For me the presentation went something like “Bla bla bla bla . . . [picture of really cool plane] . . . bla bla …” and so on. Actually what Adam Air is working on is pretty amazing (a very cheap, very light jet plane) and given the smart people around the table (not to mention the backlog slide they put up), I suspect they’ll be pretty successful.
- OpenLogic – OpenLogic has a platform for deploying and managing open source projects. They’ve “certified” 250 open source projects and their software allows companies to more safely implement open source stacks (OL takes care of ensuring the latest versions of each project is available and tests new versions for problems and adverse interactions with other programs). I’ve been following this business for a while – I looked at the Series A a couple of years ago and have been testing out some ideas on open source investing for a while. It can be a difficult area to map out venture type returns, but for those that are successful (such as GlueCode was with a very similar business model) there’s definitely money to be made.
- Outlast – Ok – this was pretty high on the cool factor as well. Outlast produces temperature regulating yarns and fabricks. These were originally developed for NASA but are in relatively wide use in outdoor gear and other clothing (while the company generated $15m in revenue last year they indicated that this translated to their yarn being used in about $750m worth of finished product). Their technology is apparently very efficient at regulating temperature and as a result keeps the wearer or Outlast based garments in a tighter temperature zone. This is one of two local companies with groundbreaking technology in the yarn/fabric business (the other is Cocona which also has groundbreaking technology but did not present). I guess you’d expect to find these businesses in Boulder given the area’s strong affinity for outdoor recreation.
- ThoughtEquity Motion – ThoughtEquity is one of those companies that took a while to figure out what it was going to be when it grew up but once it did, really started to take off. I’ve known the founder/CEO Kevin Schaff since well before he came up with the original idea behind THM and then watched for several years as he morphed his original idea behind the company into the leading distributor of stock video footage in the country (the Getty Images of video). They didn’t completely invent this market, but came pretty close and while there are few other companies that license stock video footage, THM is far and away the market leader. Kevin is one of those entrepreneurs who is going to keep at it until he’s got it right – he’s clearly done this with THM – it was one of the most exciting growth stories at the conference.
So mark your calendars for next year (sometime in late February – the exact date hasn’t been set yet) and come join us – I promise it will be worthwhile.
Some thoughts on adoption
I don’t often write about very personal topics on this blog (although hopefully my personality shows through in my writing some) but with my wife 8,500 miles away adopting our third child (2nd adopted child) I thought that I might take a post or two to talk about our experience.
I wrote about adoption after we came home with our now 5 1/2 year old daughter a few years ago and was turned off by the experience after receiving some annoying comment traffic (mostly challenging me on why we didn’t adopt domestically – none of their business, of course, but especially in the way they commented about it). I expect I’ll see some of that again, but I’m hoping to do a better job ignoring it this time.
Why adopt? Of course this answer is different for everyone who goes through the process. For us it was a very personal decision about what we felt would be the best way to grow our family. We love being parents to our biological daughter and we equally love being parents to our two adopted children.
Why Ethiopia? Both of our adopted children are Ethiopian. There’s no formula for how this works – it was a decision that my wife and I came to after looking into programs from a number of countries and after considering a domestic adoption (I don’t really want to get into our reasons for choosing an international adoption over a domestic adoption but I’ve found that there’s a certain group of people in the US who think that adopting a foreign born child is somehow unamerican. As I referenced above this can often be pretty mean spirited and xenophobic. I don’t run around asking people why they chose to have biological children vs. adoption – I expect people to give me the same privacy around why we adopted and why we adopted from Ethiopia).
How long did the process take? What’s it like? For us, both of our adoptions took a little under a year, but it varies (often quite a lot) from country to country and on how well organized you are in pulling together the volumes of information that adoption agencies and the government require as part of the process. My wife jokes sometimes about the process that “no one every accidentally adopted” – a reference to the multiple finger prints, government clearances, reference letters, financial statements, etc that adoptive parents have to provide. And then there’s the home study, which involves a social worker making several visits to your home and interviewing you, your spouse (together and separately), your kids and checking out your home. In some states (Colorado included) you are also required to take “parenting classes” – in our case 24 hours of classroom time.
Can you really love an adopted child as much as a biological child? I thought I should just get this out there. I don’t get asked this question much, but I have the feeling a lot of people wonder this. I also expect that it plays a roll in people’s decision to adopt (or not to adopt) as well. Our experience is a resounding “of course!”. This may sound stilly because our adopted kids have a different skin color than we do, but sometimes I truly forget that they’re adopted. I just don’t think about it that way at all.
Aren’t there a lot of really religious people who adopt? Is that weird if you’re not religious? I’ve been asked this a few times as well and it has occasionally been a bit challenging for me. We participate in a number online forums and groups about adoption and yes, there are many very religious people who choose to adopt. And some of them can be pretty evangelical about their beliefs (although many are not). And for someone like me, who is not religious, it is at times a little over the top. I mostly just tune out the religious stuff. We’re friends with plenty of devout people so it’s not that. But there can be something a bit “in your face” at times about the way religion works its way into adoption circles and I do sometimes feel a bit like the odd man out. I’ve heard from some people that this has turned them off some from adoption and I’d encourage you to not let that happen if that’s on your mind.
Baby or older child? Again, a very personal decision. Both of our adopted children were toddlers when we brought them home. There are a lot of adoptive families who prefer younger children but there are also a large number of wonderful older children who may have to wait longer for a family because of their age and would love a great home.
How did the first months go? Although this is not always the case my sense is that the first few months for most families is really really challenging. For us it absolutely was, made worse by the fact that we thought at the time that we were pretty much the only family in the history of adoption that had a rough time coming home (the transition period is something that’s being talked about more now in adoption circles but at the time was pretty much a taboo subject). We now joke with our daughter about her early aversion to ice cream (she loves it now), her insistence on wearing her shoes to bed and her absolute fear of our dogs (she now wants to be a “doggy doctor”). These are just surface examples of what was really going on at the time which both my wife and I found extremely challenging. Fortunately with a little time things eventually eased up and the challenge of those early months has faded to a distant memory.
Next post – things you shouldn’t ask an adopted family. Stay tuned!
Twittering away
I have to admit that when I set up my Twitter account I thought I’d be turning it off after a few days for lack of interest. Instead I was calling up T-Mobile ordering a higher volume sms package.
I have to say there’s something addicting about it – I like the short message format; I like hearing what my friends are up to; I like the record of my day that it creates for me and for people that are following me; in short – it’s just fun. My Twitter ID is Sether (www.twitter.com/sether) if you want to see what I’m doing.
A few quick comments, in case this post finds its way to the Obvious gang (creators of the Twitter app):
- it’s too hard to find users and even harder to add them to your network. seems like this should be much much easier. and while we’re talking about it, what’s the difference between friends and followers?
- i’d like to be able to reply to the individual sender – replying to a twitter message sends a note back to twitter (meaning it gets broadcast as a twitter message to your friends and followers) rather than sending a message back to the poster. at a minimum a reply should trigger a ‘comment’ like feature (that would keep it w/in the twitter ‘system’ if that’s what the issue is), but ideally, you could reply directly to the message originator.
- it would be great to be able to twitter pictures.
If you really get into the service, check out TinyTwitter (www.tinytwitter.com) – an app written by my friend Kevin Crawley which will save you the hassle (if you think of it that way) of constant IM pings. Very slick and in typical Kevin fashion both simple and extremely useful at the same time.