It’s a VC cliche that great management trumps a great idea.  In this case there’s a lot of truth to the cliche. Over the course of my venture career I’ve been exposed to all combinations of teams and ideas and am constantly reminded of not only the power of great teams, but also of the pitfalls of poor ones.  We’ve thought about this a lot at Foundry and have pushed each other hard on investing only in people we’re ecstatic about as entrepreneurs (and resisting the temptation to "fix" management teams that are not A+ or fool ourselves into believing that an outstanding idea is more important than the people who implement it).  This last point is often missed on our industry – I think there’s an incorrect belief that a mediocre team can push their way through a great idea. While certainly there are cases where a company manages to a great outcome with a sub-par team, my own experience has been unequivocal.  While I’ve had a handful of cases where – with the benefit of 20/20 hindsight – the idea we were pursuing was only fair but where a fantastic management team has managed to guide a company to a good outcome, I’ve had almost no cases where we’ve placed a company in the hands of sub-par managers and reached a happy ending (as I mention above there are some edge cases where mediocre teams manage to a happy place, but to me these are just lucky exceptions). 

It’s tempting at times as a VC to get behind an idea you’re really excited about with a team that you take on as a "project", just as it is easy to fall into the "here and now" trap when hiring a replacement CEO (or deciding not to replace an existing one who has grown a company as far as they can realistically take it).  Doing so is a mistake.  Bad management = bad outcome.  Not to mention that life is too short to work with people who aren’t great…

One of the companies I work with is in need of some first class UI help. Ideally we’d like someone who has a great design aesthetic and who also can code that design in Ruby or PHP.  However for the moment we can use someone with the former talent (who can wire frame up their work which we can then get coded) since we’re looking to get our basic prototype up and running. The company is based on Boulder, but the designer doesn’t necessarily have to be local.  Email me directly if you’re interested (or know someone who is).

For me the greatest impact of Barak Obama’s historic victory yesterday is the generational shift that it enables. I’m not talking about his generation, although there’s clearly a passing of the baton from the 60’s generation (people born in the 40’s) to the 80’s generation (people born in the 60’s).

I’m talking about his kids (and your kids and my kids) generation.  About the millions of children who woke up this morning with real possibility – with the realization that there are truly no limitations on their ambitions. 

I’m talking about the son of my best friend – about as aryan looking as one can be – who now likes to wear white shirts because he thinks they make his skin look darker and who laments that his blond, straight hair isn’t black and curly "like Barak’s". Or my own daughter whose eyes light up when she talks about she and Barak Obama having the same skin color.

Barak Obama ran a campaign of hope and change.  But really it was a campaign of possibility.  For us. For our kids. For the world. Whatever your politics, I hope you’ll stop to think about the amazing impact the events of the last 24 hours will have on generations of Americans who will follow us.

If you’ve read this blog for a while you’ll know that Sonos is one of my favorite all time inventions.  For those of you living in a closet, Sonos is a system that allows for wireless streaming of music throughout your home with the ability to separately control dozens of music "zones".  You can easily stream music from various online sources (or your own music library) and their controller makes it easy to create play-lists, cue up music and play different tunes in different parts of your house.  If you have ears, you should own one of these.

Last week Sonos announced a bunch of new features – free integration with Pandora (I was already paying for this – it my be the single best feature of the entire system), more internet radio options, integration with Last.fm and … the ability to turn your iPhone into a Sonos controller (seriously cool).

Awesome!

I find it strange that Google felt the need to send the following note out to their publishers (are we going to stop writing/publishing because we fear the bottom has fallen out of the CPC market?!?).

Dear Publisher,

We understand that the recent economic turmoil has created a lot of uncertainty in the lives of AdSense publishers. During these difficult times, we’re continuing to invest in innovations that improve publisher monetization and advertiser value in the content network.

We’re focusing on further developing our product offerings and boosting ad performance for publishers. We recently announced advancements in AdSense for search and experiments to make ads more effective. We’re bringing DoubleClick technologies to AdSense publishers, and we’ll continue to launch new products and features. We’re also continuing to improve our offerings for AdWords advertisers, making it easier for them to target the Google content network. Features for advertisers, such as the new display ad builder, are designed to improve ad performance on AdSense publisher sites.

We’ll keep driving technological progress, but our best asset will always be our publisher partners. The strength of AdSense lies in the value of the content you bring to users and the quality of the sites you bring to advertisers. Our success is tied to yours. We look forward to partnering with you for the long term, and remain dedicated to helping you succeed.

A recurring theme in venture circles these last few weeks has been "Back To Basics" with VC pundits boldly prognosticating about the current state of the markets, talking about the infamous Sequoia deck and trying not to make people wince as they lay their claim to how they saw all this coming (I’m not immune to this myself and offered what I hoped was some practical advice in a recent post).

All of this gets me thinking, however – why is it that companies got away from "the Basics" in the first place. Every time people think the rules have been rewritten and that somehow "this time will be different" they are wrong.  So if we take anything away from this current crisis, for me it should be a reminder that most successful businesses are built carefully, over several (if not many) years and require a steady and disciplined approach.  At the core if this process is being realistic about what you can accomplish in any given period of time and not letting costs get ahead of where you are in both your business cycle and access to capital (see my take on that from last year – all of which still holds true).

Building businesses is in large part about the basics – let’s not get too far away from them next time.

I really do try to stay away from politics in this space (with the somewhat recent exception of my post on attending the Democratic Convention, although even that post didn’t discuss policy).  However I can’t seem to hold myself back this time.  I’m completely frustrated with some of the rhetoric coming out of the Republican party.  Specifically the notion that there is a single "right" point of view on any given issue and that if you disagree with the Republican position, you’re simply not a real American.  It’s part of the view Bush laid out several years ago that you’re either "for us or against us" and precludes the possibility of any real conversation or debate.  It’s complete bullshit.  I understand that campaigns can be nasty and that in this campaign both candidates (and their proxies) have at times stretched the truth (although certainly McCain has run a significantly more negative campaign than Obama).  But I’m sick of being labeled "un-Americain" or "un-Patriotic" because I don’t support the Republican platform. I want a president (Democrat or Republican) who supports and governs all Americans, who sees and embraces the diversity of opinion in our country and understands the nuance of policy differences that results from that diversity. If we’ve learned anything in the last 8 years it’s that presidents who see nothing but black or white, who apply simplistic heuristics to analyze complex situations and who refuse to live anywhere but in their own bubble, are destined to fail – and to do so miserably and completely.

The real reason the Republican message is falling short this year is because they’ve made it clear that in their view they are there only to support "real Americans" and unfortunately for them, most American’s apparently aren’t their kind of "real".  It’s sad, too – I had some respect for John McCain in the past and would have seriously considered voting for him back in 2000 (when he was truly a centrist and closer in politics to Bill Clinton than he was to George Bush).  No longer….

There is nothing linear about starting and building a business. There are plenty of twists and turns along the way and successful companies are not only are open to change from their original ideas but build systematic processes for checking and rechecking their business assumptions during the early days of their company.

The idea really hit me this summer at TechStars, when I began thinking about the idea of company creation as "agile" (akin to the agile development methodology) watching how fluid the most successful TechStars companies were. They were constantly checking and rechecking the assumptions behind their businesses and reacting to what they were learning from prospective customers, early users and mentors.  These check-ins were very deliberate and occurred at regular intervals.

To me it’s the perfect model (and "agile" is the perfect analogy) for the early days of a start-up. Be flexible. Seek outside input. Be introspective. Stop and consider what you’re learning and if it effects key assumptions behind your business idea. Tweak what you’re doing.  Repeat.

I can’t state it more simply or directly than the title to this post – you should be coming to the Defrag conference (www.defragcon.com). 

Foundry started Defrag with conference veteran Eric Norlin to bring together a group of technologists to talk about the challenges around increasing fragmentation of data online and the tools and technologies that are being developed to make sense out of this data mess. We strongly believe that rather than sitting on the sideline watching and listening to the conversation taking place within the markets we care about that we should be actively facilitating and participating in that discussion (you’ll hear more about a new conference we’re working on withe Eric soon).

With industry thought leaders such as Esther Dyson, Doc Searls, Chris Shipley and many others, the conference is a hotbed of new ideas.  Most importantly the sessions are designed to stimulate debate, discussion and disagreement and the engagement level of the attendees is truly unique.  This is truly a "must not miss" event.

I’ve been to a lot of conferences over the years and think the most of them pretty much suck. They are too preachy, the attendees are too varied and numerous to enable meaningful interaction and they skim the trees in terms of content.  Defrag couldn’t be more different.  It is everything conferences should be – stimulating, engaging, meaningful and thought provoking. 

Register Now!

Special note to my Denver/Boulder readers: It’s not often that a world class technology conference sets up shop in our area. We specifically located Defrag in Denver to help encourage local entrepreneurs and companies to become even more a part of the conversation.  The conference brings world-class thought leaders to our hometown.  I’ve seen the registration data – the conference is attracting talented entrepreneurs from all around the country. But registrations from Denver/Boulder are lagging.  What gives? Represent for your local community. Take part in the national conversation.  Get to Defrag!

For those that scoffed at my posts (here and here) about the US savings rate falling below zero (written during the summer of 05′) here’s another, somewhat less scientific data point (not that the skeptics need further convincing these days). The National Debt Clock which counts the total national debt (not consumer debt, but that of the government) ran out of digits a few weeks ago.  Oy.