[cross-post from the VCIR Winter blog]

There’s a nice article up on Rocky Radar that highlights VCIR Winter. One of my favorite excerpts is below.

Venture Capital in the Rockies was designed by the organizers to cater to a diverse audience. For CEOs, there is plentiful networking time and a chance to experience novel technologies. For venture capitalists there is an occasion to catch up with colleagues and “see some opportunities not on the radar screen of Sand Hill Road.” And for the entrepreneurs there are the eyeballs of over a hundred investors in attendance, as well as the chance to mingle with other companies and service providers.

But let’s not forget the snow. The Colorado mountains are having one of the best seasons on record, with Beaver Creek over 5 feet ahead of its year-to-date average snowfall. With a Thursday schedule that allows for a full day of skiing, Venture Capital in the Rockies could be enriching for body, soul, and bottom line.

You can check out the full article here.

Some of you know that I’m chairing the annual Venture Capital in the Rockies conference this year (now called VCIR Winter).  VCIR is put on annually by the Rocky Mountain Venture Capital Association and brings together a national group of venture capitalists for presentations by 22 rocky mountain companies that are currently seeking capital.  This year’s conference will be held March 3rd through 5th up at the Hyatt in Beaver Creek (hey – we play to our strengths and the skiing up there is fantastic!). 

Being the conference chair has been a pretty involving job (certainly more than I thought I was signing up for – especially in a down economy with sponsorship budgets tight) but also a very rewarding one.  Among the things that I’ve changed around this year is the conference web site – www.vcirwinter.com.  Along with a new look and feel there’s some new functionality – in particular the VCIR Blog. We’ll use the conference blog to not only put up announcements about the conference but also to give the presenting companies the chance to post about their businesses, have some long time attendees talk about their experiences at past conferences and, of course, to live-blog the conference itself.

I hope you’ll check it out and subscribe.

Most startups spend plenty of time working on things like their product plans, requirements docs, market studies and the like. They are important aspects of running their companies and the kind of things that improve with collaboration and varied input from as well as from the iterative and inclusive process they typically require. You’d expect to find documents related to these sorts of activities on an intranet or company wiki and you’d expect that they’d be included in the occasional board package and discussed with advisors.

I’d suggest companies add something else to this list: a detailed overview of how they conduct hiring.

Most start-ups will tell you that hiring great people is one of the most important determinants of a company’s success. Why then is the process of hiring generally treated as a completely ad hoc exercise? In my view this leaves to chance and happenstance something that is much too critical to the successful operation of a business.  Here are some ideas I was recently kicking around with one of the companies I work with that takes the hiring process extremely seriously (and as a result has been extraordinarily picky about who they’ve brought on board).

• Have a job description. I get it. You’re an early stage company and "people wear a lot of hats" around your shop.  Whatever. Get over that and write up a description of what you’re looking for.
• There’s more to the job than the "to do" list. A good job description should include more than the daily task list for the job at hand. What kind of individual are you looking for? What kind of company culture are you trying to create? What personality traits are necessary for people to be successful at your business?
• It’s not just the hiring manager’s job. I’m a big believer in having potential job candidates meet with people from across a company. This holds whether you’re in a 5 person start-up or a 10,000 person organization. I strongly believe the companies make better hiring decisions when more people are involved.
• Try before you buy. While not everyone is open to a 30 day consulting gig before they come on full time, your interview process should include some kind of working session so you can get a good sense for how your job candidate works. This could be a product requirements meeting, a UI/UX discussion or building a sample financial model. It’s a great way to involve other people from the company even if they are not a part of the direct interview process and a well designed session should give you a good sense for how your candidate can contribute to the business.
• Aim high. In the fast paced world of start-ups there’s a natural tendency to need to get everything done yesterday – including that latest hire.  As a result, it’s pretty easy to convince yourself that someone is "good enough" or "better than not having anyone".  Not true. Don’t settle in your hiring. It’s better to delay a product/release/market launch to find the right person for the job than to hire low and suffer the consequences. A bad team member brings the productivity of the entire team down.
• Trust your gut. Isn’t this true of most things in life? It’s definitely true of hiring. If you have a bad feeling about someone, move on.
• If it’s not working, call it. This is such a cliche, I almost didn’t include it. But it’s too important not to mention. It’s part of the old adage "Hire slow and fire fast" but if it’s not working out, it’s time to move on (see "Aim High").

Much of this post stemmed from a conversation that I had with one of the companies that I work with. At this company we had a long discussion with the entire company (at the time only 7 people but we’ve repeated this company wide conversation as we’ve grown) about how to avoid hiring mistakes and the stake that everyone around the table has in making sure that we bring only great people on board.

So talk openly at your company about your hiring practices and work as a group to come up with your own plan for how you’ll make hiring a core competency . . . and then put all that on your wiki so you don’t forget it.

 

We were talking today at our regular Monday partner lunch about accessibility and openness. At Foundry we strive to be transparent and available – from our various blogs (the Foundry blog; plus each of our personal blogs -  Jason, Ryan, Brad as well as this one) to direct email addresses on our website. While in many ways venture capital has been somewhat of a mystery to most people, we’re hoping to provide a little transparency into our daily lives, into the mechanisms we use to evaluate companies and into how VCs think about investing in and growing companies.

With that as a backdrop, I wanted to remind readers that I love hearing from you. Comments to blog posts are great, but please feel free to email me directly – seth@foundrygroup.com.  I particularly enjoy hearing questions or suggestions for future blog posts. So keep the comments and emails coming!

At Foundry, we’re trying not just to respond to the conversation, or even to simply be a part of it.  We’re looking to help form and shape the conversation around technology areas that we care deeply about.  Maybe this sounds cheesy, but it’s absolutely true.  My partners and I are technology geeks first and foremost.

To that end we’ve been lucky enough to team up with Eric Norlin to work on a few conferences that bring together thought leaders in the technology industry.  I’ve written about Defrag several times – a conference that we’ve helped Eric create here in Denver in the past two years that has focused on leveraging technology to better organize, interpret and consume disparate information (thus the name "Defrag"). 

In 2009 we’re introducing another conference to the mix that we’re calling "Glue".  If Defrag is a high level discussion about meta-information, Glue is a more nuts and bolts discussion around the actual technologies that we use to pull this information together.  Presuppose the notion of cloud computing/platform as a service; assume the web as a platform.  Ok – now what?  Glue is going to bring together technologists to start to answer these questions. The discussion is generally going to be "below the browser" and if you check out the agenda (in process) you’ll see plenty of topic areas that relate to the details of the changing technology and architecture landscape.

Another thing that’s different about Glue is the price. I’d challenge you to find another two day event of this caliber anywhere close to this price point (a conference pass is $395).  Use the code "early1" and get $50 (but there are a limited number of discounts available, so best to register now, since you know you’ll be attending).

A special note to my techgeek friends from Denver and Boulder.  We’re working hard to build up this region as a real center for the conversation around emerging technologies. In my view every technologist in the region should be at this conference.  Register now and show your support. This is a golden opportunity to participate in a national conversation without having to fly to one of the coasts…

While the financial world may seeming to be coming to its end and everyone’s natural instinct may be to baton down the hatches and not do anything to rock the boat too much, I think that now is actually a great time to start a business.  Our own experience suggests that many great companies start their lives in down markets and this view informs our belief that as early stage investors we should remain consistent in our investment pace in both good markets and in bad.

In fact, I think there are some great natural advantages to starting companies in a time when the markets are down.

There’s less competition. For money; for talent; from 10 other people who have a similar idea to yours. As a result it’s easier to to get above the fray (since the fray is smaller). 

There’s less pressure to get something out there NOW. With fewer new ideas starting there’s a little less pressure to push something half baked out the door and before its ready (for fear that someone will beat you to it) – a down market may give you a little more breathing room (real or perceived). 

You’re less likely to waste money. You know I think businesses have a tendency at all levels to spend too much. There’s nothing like a really tight market to make you look more closely at every dollar going out the door.

While it’s harder to get funded, generally better companies receive financing in down markets.  Maybe that doesn’t feel like an advantage (unless you’re an investor <g>) but actually I think both companies and investors benefit when financing is a little more difficult to come by. Fewer companies means less competition for talent, mind-share, market-share and overall less "noise" in the market. And lets face it – when markets are hot more bad ideas get funded (I was going to say "crappy companies" but don’t want to offend anyone . . . ). In tight markets more investor work goes into the front end of investments (shouldn’t this always be the case?!? A topic for another post) and fewer marginal ideas find financing. Those that do have a natural advantage.

You’ll be ready when markets turn around. Instead of starting a business when the markets being to heat up, how about having a product ready to go when the markets are on an upswing?

So go get ’em!

First off, happy 2009 to you all! I’m looking forward to a little more frequent blogging this year (if not exactly a resolution for 2009 since I think those are a bit cheesy, at least a goal for the year).

A few items of note to start off the blogging year:

Today NewsGator, AdMeld, Technorati, Gigya, Medialets and Tremor Media announced AdBurner – a partnership that is designed to optimize the management and monitization of network traffic for large publishers. NewsGator is providing the distribution platform through their widget network and existing publisher relationships and the remaining companies are the key partners for monitizing that traffic – whether that traffic is a diverse media type, on a mobile platform, etc. With NewsGator, AdMeld and Technorati all in the portfolio (NewsGator and Technorati are Mobius portfolio companies, AdMeld is a Foundry Group investment) I’ve been close to the formation of this partnership. There’s clearly a market need here and the companies involved are all clearly top of class – they together have really created a compelling product.

In case you missed it over on the Foundry blog, Brad has a nice post up that summarizes the 7 new investments we made as a firm in 2008. It’s humbling for me to read through this list of great companies and think that each chose to work with us.  I’ve said it many times and Brad says it at the end of the post – it’s the entrepreneurs that make our world go around and we have great respect for them.

Lastly, my partner Jason has a post up (both on his own blog as well as the on the Foundry blog) that describes our latest investment (we completed it just prior to the end of the year) – FirstDocs.  For me the title of Jason’s post says it all – "Our Investment in Law Firm 2.0". Jason has been a thought leader around some of the changes that are happening (or should be happening) in the legal world and our investment in FirstDocs follows directly from his work in this area (and not just figuratively – FirstDocs initially reached out to Jason after reading his posts on Lawfirm 2.0).  The company has developed a software platform that automates much of the creation process for the legal profession’s most commonly used documents (freeing up time, energy and client money for more important matters).  This will definitely be a fun one to watch!

Forwarded from my partner Chris Wand. 

An Investor’s Rendition of ‘Twas the Night Before Christmas (by Travis Cocke)

‘Twas the night before Christmas, when all through the land
Not a banker was lending, not even “Gold-Man”
Foreclosures were hung by the courthouse with care
In hopes that Hank Paulson soon would be there.

The Bankers were nestled all snug in their beds
While visions of bonuses danced in their heads.
And my teachers in their offices and me in my room
Had just settled an argument about the depth of the gloom

When out on Wall Street there arose such a clatter
I sprang from my bed to see what was the matter
Away to the computer I flew like a flash!
Started up the ticker, and threw up some cash…

The i-banks on the brink of another bad blow
Sell all your stocks and look out below!
When, what to my wondering eyes should appear?
Green on the screen as the Fed interfered

With the same old chairman, so ready to lend
I knew in moment it must Big Ben
More dovish than Greenspan, his governors they came
And he printed and lended and called them by name!

“Now Lockhardt! now, Lacker! now, Evans and Plosser!
On, Geithner! On, Fisher! On Yellen and Krosner!
To the Treasury! To the Mile High Mint!
Now print away! Print away! C’mon now print!”

As credit spreads that before defaults do fly
When they meet with an obstacle, they drop green from the sky
So up to the Capitol the governors they flew,
With a chopper full of money, and Rick Wagoner, too.

And then, in an e-mail I read from a friend
Capitalism was dead, and this was the end
As I sold my last stock and started to cry
On the TV came Buffett and he said “Time to buy.”

He was bullish on stocks, from Nike to CVX
And his portfolio was tarnished with options and CDS
A bundle of buyouts he had flung on his back
And he looked like a genius, just following his knack

His stocks how they fell! His returns how scary…
Yet his cash-how it swelled! And His letters so merry…

He was chubby and cheerful, a right jolly investor
And I smiled when I saw him, despite my dreadful semester
A twinkle in his eye and the use of his cash
Soon gave me the know that stocks wouldn’t crash

He spoke not a word, but went straight to his work
Shoring up balance sheets, and buying preferreds
And laying his finger aside of his nose
And giving a nod, UP & UP Berkshire rose!

He sprang to his NetJet, to his pilot gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, as he drove into the sky,
“Happy Trading to all, and to all a good buy!”

The last couple of months have been tuff ones for me. I’ve felt constantly behind (thus the lack of blogging consistency) and most days consisted of running from one meeting to the next (typically 10 minutes behind). This has contributed to my feeling both burned out and feeling that I was letting too many things fall through the cracks.  This was evidenced by 1) my inbox growing most days, not shrinking; 2) waking up at 5am to try to work on #1; 3) an over-reliance on multitasking (walking to a meeting, on the phone while responding to email); 4) my wife never being able to reach me during the day; and 5) generally feeling stressed and off-balance.

My week off for Thanksgiving definitely helped clear my head. But now I’m back to my old pattern (I’m writing this on a flight to NY where I’m running around from breakfast through dinner for two days and then catching the late flight home in time to get back for another set of meetings).  I was talking about this with Greeley the other day and we came up with some ideas for how to break this cycle.  I’d love to hear from others on how they do this as well. Here are a few key ones I’m going to work on in 2009

1) Take fewer meetings. Duh. Obvious, I know, but clearly the #1 thing I can do to clear space on my schedule. I make this resolution ever six months or so and get better for a few months before faltering. In 2009 I’m going to guard my schedule more diligently and push back on meetings that just fill space.

2) Schedule email time. This may sound crazy, but I’m blocking off time every morning next year (that I’m not traveling, that is…) for e-mail, phone calls, research and the like.  With rare exceptions, no meetings in 2009 until 10:00am.  Rather than starting my day running around, I’d like some solid time to get work done and start my days getting ahead rather than behind and feeling like I constantly need to catch up.

3) Take more vacations. I mentioned this in my post about going off-grid – I did a crappy job of taking time off in 2008.  The lack of time to recharge definitely weighed on me towards the end of the year.  Not so in 2009 – we’ve already planned our spring break vacation and are working on several others blocks of time to take off.

4) Work out more.  This may not seem like a good plan for time management, but for about a month this summer I got into a great pattern of riding my bike up Flagstaff mountain (a "hill" near the office) several times a week.  Not only did I feel great exercising consistently, but was a consistent time to just clear my head.

Thoughts?

I just returned from a full weeks vacation "off-grid", by which I mean that I neither checked voicemail or email, took any work related calls, etc. I was reachable, but made it pretty clear that this was for emergencies only. No nightly checks of my email, no popping upstairs for a quick conference call, no calling into the office "just to check in".  Having zero willpower when it comes to this sort of thing I aided my quest to be off-line by leaving the laptop at home and turning off the data feed to my cell phone (I couldn’t imagine resisting the temptation of taking a peek at the hundreds of emails that were piling up if I saw them sitting in my phone cue). Without these interruptions I let my mind run where it wanted to, quickly forgot about the 50 "urgent" things waiting for me upon my return and focused on relaxing and having fun with my family.

I don’t know why I don’t do this more often – it had been about 18 months since I spent any amount of time off-grid.  And while before the vacation I probably would have told you that I really didn’t need to go to this extreme and that the time I had taken off earlier this year (but where I checked in daily, took probably 2 hours of calls per day and had one full day of meetings in the middle of my trip) was sufficient. With hindsight I realize that I was deluding myself. I needed the time away to clear my head and I was stupid to run so long without doing so.

I look around me at colleagues and friends and see very few that truly take time away to recharge. It’s a shame that we live in a society where "connectedness" is prized above all and I think every so often (but certainly more than 1x per year) people should buck the system and just go dark.  Maybe for a week, maybe just for a long weekend, maybe the 3rd Saturday of every month.  Give it a try – you won’t regret it!