Micah has recruited a number of Colorado bloggers to promote the 2008 DonorsChoose Bloggers Challenge.  There are some great (and well deserving) projects up – you can take a look at them by checking out the widget on my blog (scroll down a bit to find it) or head directly to the DonorsChoose website. Be generous!

Now that I’ve received a link to the Sequoia "Holy Shit" presentation about 30 times along with about a dozen emails asking "what do you think?" it’s probably time for a post.  My partner Jason has a great post up on the subject (with a more general discussion of how the current markets effect our business – definitely worth reading) and Brad has some practical advice up this morning on his blog as well.

There’s no question the markets have changed dramatically in the last few weeks and that there are serious short and long term considerations for investors and companies.  Here’s my 2c.

1. Don’t panic. Markets are cyclical. While everyone knows this, it’s hard to keep perspective in downturns. Particularly when those downturns are bigger/faster/scarier than you were expecting.  That said, it’s good to keep a long term view about things (but see below for some ideas for the short term as well). The rules have NOT changed. The market is not fundamentally different.  No more so than it was during the bubble (after which we were reminded that things like real products, customers and a business model were important); nor during the last downturn (during which investors who carefully continued to invest were rewarded); nor today.

2. Worry about what you actually control. It’s easy to lose sight in wild market fluctuations of those things that are actually within your control. Don’t.  Worrying about things you have no control over will drive you crazy.  Worrying about those things you do control will drive you to better/smarter decisions.

3. Back to basics.  Relating to #2 above, now is the right time to consider your core assets/business attributes. It’s easy in good times to get distracted by spurious data points (and sometimes get rewarded for it).  Now is not the time for that kind of distraction.  To be clear, I’m NOT saying now isn’t a time for your business to invest wisely, just be focused and deliberate about what you’re doing.

4. Conserve cash.  Whatever you think about the current market volatility one thing that is widely agreed on is that capital raising (whether debt or equity; early, mid or late; private or public) is much harder today than it was a few months ago.  Since it’s not clear when things will ease up, don’t go crazy with the checkbook.

5. Invest wisely. I firmly believe in investing through cycles (since you can’t time markets – certainly not in my business). This is as true for companies as it is for investors. Reacting to market turmoil by putting your head in the sand it about as smart as when a threatened ostrich does the same. It may make you feel good for a few moments, but isn’t a wise short- or long-term strategy.  Down markets bring as many opportunities as they do pitfalls – especially for companies that were well positioned from a product, cash and market standpoint before the sell-off.

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I spent last Thursday at Microsoft for their annual VC Summit. While there are plenty of ways that the company can improve, I walked away with the very distinct feeling that the "market" underestimates the innovation coming out of Redmond and the ways in which the company is clearly changing and adapting to the new technology world.  Specifically, the products and people I encountered were forward thinking – clearly moving well beyond the OS and embedded software mentality that is the history of the business – and significantly more platform agnostic than they are given credit for (both product demos I saw included at least one Mac and other non-Microsoft based products).

And then there’s Google, which in many ways may be the best thing that’s ever happened to Microsoft. It’s given them something to rally around and a benchmark by which to measure themselves by.

Watch out for the not-so-slumbering giant…

A handful of Boulder companies are pooling resources to bring 100 software developers to Boulder (see Boulder.me). If you’re interested in a chance to come out and see what we have to offer, take a look at what they’ve pulled together (my partner Chris Wand is heavily involved and has a post up about the event on the Foundry blog). 

Not only is Boulder a beautiful place to live, it’s a fantastic place to work and build successful companies (see Ryan and Jason’s view of moving from the Bay Area to Boulder here and here).  To quote from the "Boulder Wants You" post:

In the last several years, Boulder has been named #1 in Forbes’ “Smartest Cities in America”, #1 in Outside Magazine’s “20 Dream Towns”, #1 in Business 2.0’s “Top 20 Boom Towns”, and Best Overall in Men’s Journal’s “50 Best Places to Live” (three times in the last five years).

So if you’re a top notch developer, check us out.

I’m trying to purge the word "deal" from my lexicon – at least as it relates to investments (i.e., companies are not a "deal", it’s an "investment opportunity"; the actual transaction itself is still fair game). 

I’m amazed how often the term comes up in the venture industry. To me it seems somehow demeaning and way too generic. Entrepreneurs who put their heart and sole into a company don’t need to hear us talk about their companies like they’re a commodity.

If you’re a VC reading this, try it for a day and see how often the word comes up . . . and how difficult it is to stop using it…

A few things that might be of interest.

Foundry announced our latest investment – Pie Digital. Pie has created an "IT department in a box".  Brad jokes that he’ll no longer have to provide tech support for his parents. My dad is literally a rocket scientist, so I can’t exactly make that claim, but like Jason (see his post here), I’m looking forward to their product rolling out. You can read the Foundry post here.

I sat down with BusinessWeek’s Spencer Ante to talk about the Denver/Boulder tech scene. I liked Spencer a lot – very amiable and obviously knowledgeable about technology.  Here’s the article.

Want to know what you’re start-up’s worth?  Here’s a site that says it can predict what that will be.  Amusing…

How much should your company be burning? For you math geeks out there who were unsatisfied by my post on burn rates, see "You’re burning too much money", here’s a more scientific view.

While I’m a fan of politics (and my wife and I are active supporters of causes and candidates we believe in), I’ve never been particularly "political" and generally don’t find myself at political speeches, rallies, etc.  But last night when I had the chance to head over to the Democratic National Convention being held here in Denver, I figured that it was something worth seeing in person. I wasn’t disappointed – it really was an amazing scene.

I managed a tour of the press area courtesy of VC Adventure reader Elliot S., who was there working for NBC (broadcasting live over their temporary DS3 set up specifically for the convention). It was pretty unbelievable to imagine what needed to happen to bring together the number of broadcast agencies in one place (ranging from NBC and CNN to Al Jazera).  The picture below shows some of the cabling that was put in place over the last few months to run all of this.

To say that security was tight is an understatement. The entire area around the Pepsi Center was completely cordoned off – you needed a credential to get within about a half a mile of the facility. There were literally thousands of cops (at least the ones you could see) – many in full riot gear, some with sniper rifles. I also noticed that they were taking pictures regularly with digital cameras (especially at the protestors who were just outside of the gated entry points to the grounds).  The pictures below don’t do justice to the enormity of the police and secret service presence, but give you an idea of what it was like (both of these pictures were taking inside the gated area).

I know there was a lot of consternation on the part of some of the groups who were demonstrating at the convention that they wouldn’t get enough access to the delegates, but from what I saw most delegates arrived from downtown by foot (there were a few tour busses, but not many) and had to pass through the protest areas (which were filled with people expressing their views on various subjects) before entering into the secured area.

Inside the arena was electric. The Pepsi Center holds something like 18,000 people at an average hockey or basketball game.  There were significantly more delegates than I had expected – their seating took up the entire floor and the first level of arena seating.  I had a floor pass and wandered around to find the combination of a good vantage point and a spot where I could stand without getting kicked out by DNC staffers.  It took me about 5 minutes to realize that I had managed to situate myself right next to the CNN floor platform and about 5 feet from Wolf Blitzer, Anderson Cooper, James Carville, etc. (see photo below).  From here I had a great view of the stage and could also turn around to get full view of the crowded auditorium.  I realized the power of the crowd as the flags came out for President Clinton’s speech. The crowd was screaming; the flags were waiving – it was pretty amazing. Despite the crowds, I was really taken by the intimacy of the event (at least from where I was standing).  Clinton in particular had the ability to really make you feel like he was talking directly to you. 

I won’t wax political on you, since there are a ton of sites you can visit to see coverage of the speeches themselves, but I relay the following reactions:

• Bill Clinton is an amazing speaker.  His speech on the floor on Wed reminded me of why he was such a popular leader – he has an amazing ability to make every person in an arena of 18,000 feel like he’s talking just to them.  All I can say is WOW.
• If John Kerry had shown the fire that he showed in his speech from the floor last night he would have run away with the 2004 election – hopefully a reminder to the Obama camp not to play it too soft.
• I expected more from Joe Biden. I understand that this was his "introduction to Joe Biden" speech, but I wanted to see him hit McCain harder and show a little more offensive fire (hopefully we’ll see more of that in weeks to come).
• One of the very best speeches came from Tammy Duckworth, an army helicopter pilot who lost both of her legs in Iraq. She now runs the Illinois VA system.  Forceful; direct; spoken from an experience that few of us can even think to imagine.
• Of course the highlight of the evening was the appearance of Obama himself – the man inspires confidence.
• The convention was extremely well coordinated. Signs were passed out in perfect timing and in great numbers; media seemed to always be in the right place; even with the long lines, entry into the event was pretty reasonable and efficient. 

I was pretty wowed by the entire experience – certainly once in a lifetime for me. Hopefully this post gave you a little taste for what it was like.  A few more pictures from the floor follow.

Long overdue, but here’s an account of my recent bike ride from Denver to the top of Mt. Evans (elevation 14,264 ft) and back.

First some quick technical and summary data in case you’ve found this post looking to do a similar ride. I ride a lightspeed titanium bike with a standard front crankset (39/53) and a slightly climbing friendly rear cassette (13/27). The ride up took us 7 1/2 hour (ride time) and covered some 10,000 feet of climbing over 72 miles. While that’s a lot of climbing, the gradient actually didn’t kick up much past about 8% (and for most of the climb from Idaho Springs was more like 6%). My training had been pretty modest – I ride about 50 miles a week, including a hill ride at least every other week – and this ride was probably about 2 times the length (and difficulty) of any other ride I had attempted (which is to say that if I can slog it up – you probably can too).  I twittered my entire ride up, which turned out to be great way to keep my wife and friends informed of our progress while on route. The ride profile (until the battery on the GPS went dead) looked like this:

Below, for those that care to read on, are more details and some pictures of the ride. I rode with a friend – Walker Fenton – who has been making an annual tradition out of this trip for the last few years (and who planned the route for us).

4:00am, Denver: Rolled out of Wash Park and through downtown Denver, stopping at the "mile high" step at the state capital (I’m sitting on the step in the picture below). Temperature was a pretty comfortable 60 degrees, although the ground was still pretty wet from the torrential downpour the night before.

5:47, Lookout Mountain: We had made the trek out of Denver and were at the top of Lookout mountain by sunrise -some 20 miles of mostly flat riding in at this point.  We definitely had some strange looks from the few groups of people who appeared to be ending their night out drinking by watching the sun come up over Denver.

Our route took us over Lookout mountain and up through Genesee. For the most part we stayed off of the major highways, however the small exception was a few unpleasant miles on I-70 from the Buffalo Overlook to Evergreen Parkway (which thankfully only took a few minutes).  From there we took the frontage road over Floyd Hill and down to Kermit’s where we hopped onto the old HW 6 (which is now a bike path) which took us all the way to Idaho Springs.

7:42, Idaho Springs: By breakfast we were 40 miles in and had reached Idaho Springs where we stopped for some coffee and a burrito. From here it was to be about 30 miles straight up to the top of Mt. Evans.

The road out of Idaho Springs isn’t particularly steep, but it climbs steadily uphill some 15 miles to the fee station for the Mt. Evans road.

10:06, Mt. Evans Road Fee station: Turns out that even on a bike you have to pay to get to the top of Mt. Evans ($3 for each of us). It was pretty amusing to wait in the line of cars to pay to get to the top part of the road.

11:51, Summit Lake: It’s 9 miles from the fee station to Summit Lake and for me these were the longest miles of the trip (and as you can tell from the time gap, we stopped several times, including a long snack break, on the way up).  The grade wasn’t that steep (probably about 6%) but with some 60 miles on my legs and over 5 hours in the saddle, it seemed interminable at times.  My body felt off and I found it really hard to keep my energy up (I was eating on the entire ride at least every 30 minutes – but at this part of the ride it wasn’t providing the boost I was looking for).  Making it up to Summit Lake I was elated that I was almost at the top, but a little fearful for the 5 hardest miles of the trip. I’m pretty tired in this picture taken at the lake (in case you can’t tell!)

I was wrong about those last 5 miles.  For me, at least, the increase in grade actually made the riding easier.  The views were spectacular – at times it felt like we were riding to the top of the world (see the picture below).  With the steeper gradient came more frequent switchbacks and the air at 14,000ft is noticeably thinner when you’re peddling along.  My body perked up and I was keeping up a great rhythm.  I think the storm that appeared to be rolling in pushed us a little harder as well.

 

12:51: Summit at last!:  What a great feeling as we rode through the parking lot, literally to the end of the road. We were 7 1/2 hours of riding time into our ride (about 9 hours total elapsed time with stops and food breaks). The odometer read 72 miles and we were about 9,000 ft higher than when we started out that morning.

1:33, off the summit: We literally flew down the Evans road (trying to avoid getting stuck up high when the storm hit).  I like going downhill and you can really burn down the straights (thanks to some new break pads which quickly slowed me down as I hit the switchbacks).  At the fee station we turned right and headed up and over Squaw Pass (just couldn’t resist some more climbing).  Just as we crested the top of Squaw the skies opened up and we were hit by a classic Colorado rain and hail storm.  With the hail pelting us and pretty much soaked to the bone, we negotiated down the back side of the pass (trying to strike that elusive balance between going fast enough to make it down quickly, but not so fast that the hail pelting us in the face was going to do serious damage).  I wish we had taken the camera out during the storm, but we were just too focused on getting out of the rain and cold.  Eventually we managed to move past the weather and by 3:40 had made it to the relative dry ground of Evergreen.

4:19, Morrison: For us, Morrison was the end of the line.  With the storm bearing down on us again and the prospect of 20 more uncomfortable miles on wet city streets back into downtown we decided to call in the sag wagon (Walker’s wife Michelle) for a rescue. 

Final Ride Stats: 122 miles; somewhere around 12k of climbing; 10 hrs ride time; 12 1/2 hours elapsed time.  It was an amazing ride – I’m looking forward to next year’s already!

I’ve written before on effective board communication, how to run effective board meetings and other "governance" topics related to companies and their boards of directors. Today’s post is a little more ethereal.

I’ve noticed a real difference in how various CEO’s I work with refer to their boards – particularly when talking internally to the rest of their management teams and employees.  On the one hand are the CEO’s that consistently refer to their board of directors as "The Board" (capital "T", capital "B") and often use them as some kind of foil (as in "The Board has said that we really need to do XYZ") – almost separating themselves from whatever decision or direction it is that they wish to convey and treating the board as some kind of amorphous entity like the borg in Star Trek.  On the other had are CEO’s that more often refer to the board by their individual names, including themselves in the list as well. It’s obviously much harder to absolve yourself of responsibility for a decision if you speak in this fashion. It’s also much more difficult to use the board as the foil (since "Seth, John, Jamie and Susan" sounds a lot less threatening than "The Board").

What’s interesting to me as an observer of this behavior is not just my obvious preference for communication style, but for what a predictive marker it is for other behaviors that I also care about.  CEOs that treat the board as individuals rather than a single entity are more likely to seek meaningful advice and counsel from their board members, are universally better at board level communication and have board members that tend to be more involved (in a good way – at least in my opinion) in helping solve day to day business challenges.

Something to think about as you plan for your next company meeting…