Cross posting this article I wrote for The Community Foundation of Colorado. As many of my readers know, I’ve been passionate about the intersection of startups and community for years. And specifically developing a worldwide movement of startups giving back to their local communities from their very founding.

I blog a lot about community: entrepreneurial, local, national, international, social, etc. The short takeaway is that a group of people acting together towards a common goal can have a far greater impact than they expect – and certainly more than they would acting alone. I often use a great scene in the movie Office Space to illustrate this point.

An outgrowth of The Community Foundation’s EFCO initiative – Entrepreneurs Foundation of Colorado – Pledge 1% is a movement that’s caught fire among community-minded entrepreneurs around the world, helping startups set aside 1% of equity, 1% of employee time to volunteerism, and 1% of product to benefit their local communities. We’ve seen immense success in our Colorado community that can be traced directly back to EFCO and Pledge 1%…and now we’re seeing the movement spread around the globe through the Pledge 1% initiative.If you think about any great startup, they tend to share certain common traits. In particular, once they figure out the formula for success, it’s natural to want to scale that as far and as wide as possible. We’re doing that with Pledge 1%. After a fantastic startup year where we were housed within The Community Foundation, it’s time to spin off Pledge 1% so it can truly scale globally. To accomplish this, we’ve chosen Tides to house the organization and to ensure its continued global growth – even as EFCO continues to operate under the umbrella of The Community Foundation, working as the entry point for Colorado companies inspired to join the movement.

EFCO is tightly connected to The Community Foundation, and I’ve seen firsthand the foundation’s crucial role in providing the foresight, expertise and resources needed to test the premise and scalability of the EFCO model. I’m both impressed and thankful that the foundation recognized the broader potential of EFCO, and galvanized around it alongside some big players – including the Salesforce Foundation, Atlassian, and Rally for Impact.

The Community Foundation provides the kind of nurturing that’s needed to launch and grow innovative ideas – in this case, EFCO’s paving the way for startup companies to give back to their communities has ignited action worldwide. For entrepreneurs passionate about giving back to the communities in which they build their businesses, the potential is endless.

Case in point: via EFCO, the Foundry Group made a gift of $300,000 to Boulder County nonprofits last summer in response to a 62% funding cut from Foothills United Way. This is just one of a number of gifts that Foundry has channeled through the EFCO program. And this is the kind of impact that drives EFCO members: filling the gaps affecting local nonprofits, helping individuals and families who are struggling to make ends meet, and strengthening the very communities that have contributed to our own success. All told, since its founding eight years ago, EFCO – more than 100 members strong – has generated more than $4M for local nonprofits.

It starts with being community-minded, and The Community Foundation has long fostered the notion of giving locally. The success of EFCO and rapid spread of Pledge 1% bear witness to the fact that we can accomplish more together than we do alone – right here at home, and in “local” communities around the world. I invite you to learn more at www.efcolorado.org and www.pledge1percent.org. Join the movement and make an impact!

Ryan Hunter, VP of Marketing for Mobius portfolio company Newmerix, has started the Front Range CMO’s – a networking and professional organization for marketing executives in the front range. You can check out the group’s blog at www.frontrangecmos.com. The group’s first event is going to be on February 4^th down in Denver. You can email Ryan directly if you’d like to learn more. He’s got a great group of local marketing execs already signed up – should be a great event and long term a great resource for the Denver/Boulder marketing community.

I’ve been advised that I need to have a legal disclaimer on my blog. So here’s my disclaimer…. I’m responsible for what I say, and all comments are my own personal responsibility. They – and this blog – are in no way affiliated with Mobius Venture Capital, Foundry Group or any other company that I have any involvement in. If I’ve made a mistake, it’s my fault. You should not rely on anything in the blog as legal, financial, accounting, investment, tax, or any other kind of regulated advice. I’m merely a guy living in Colorado who likes to write, enjoys working in technology, and has plenty of opinions.
Also, my co-writers are incorporated herein by reference, which is legalese for “what they say is their own stuff and not affiliated with any of the companies they work for either.”

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[see the bottom of this post for an invite code to a new service that helps solve the problem I’m describing here]

It’s probably passe to say that we live in an information economy.  It’s also probably not correct anymore because really we live in an information NOW economy.  Staying on top of the topics that are important to you and your company has never been more important.  And with the explosion of media sources (particularly on-line) this has never been more of a challenge. 

Back in the day, large companies would outsource the function of knowing what was said of them and their competitors to various "clipping services", so named because they would line up the major new outlets of the day (mostly the large daily newspapers and national magazines) and literally clip out the stores that were of interest to their clients with scissors.  Every week they’d compile these clippings into a briefing and ship it off to their client.  These services weren’t very efficient and they were extremely expensive, but there was little other choice.  While these services have evolved in more recent years to incorporate technology, they’re still expensive and for the most part involve some 3rd party culling through the data to sort for relevance. 

Google Alerts is the most notable exception here – they’ve developed a service that in theory will let you know when any particular key word (really any search string) is crawled by Google spiders.  However in my experience Google Alerts quickly falls down. For starters, I get relatively few hits across my keywords and most of the hits I get are repeat ones (I can’t understand this at all – with probably 60 keywords I get almost no alerts and while I share keywords with some of my colleagues I rarely am sent the same hits that they are). I have other friends with the opposite problem with Alerts – their inbox is flooded with responses.  In some cases so much so that they had to turn the service off completely.  There’s also no good way to aggregate these alerts into any kind of trend data or manipulate them, group them, etc. 

Enter Filtrbox.  Filtrbox was one of last year’s TechStars companies and the the one with which I worked most closely (after the summer TechStars program I participated in their angel financing round).  They’ve developed a system that if you had to describe it in a single sentence is "Google Alerts on steroids".  That said, it’s almost unfair to compare the two as Google Alerts just isn’t designed to provide users with the accuracy, level of coverage, ability to tune and provide feedback to alert terms and the overall representation of data that Filtrbox provides – even now in the relatively early version of the Filtrbox platform.  Filtrbox allows me to set up a series of "filtrs" that contain various keywords so that I can organize the things I’m looking to track.  Every morning I get a "daily briefing" email that lists all the hits from the last 24 hours and online I can use their dashboard to see up-to-date hits in list and graphical form, manipulate the data, adjust the sensitivity of the report (so I see fewer, but more directly relevant hits) and tune the system by providing it feedback on the information it provides me.  Below is a snapshot of their dashboard to give you a sense of what I see every day (in true Web 2.0 fashion, everything in the image below will give me more information as I mouse over it and I can adjust the data I’m seeing on the fly by checking and unchecking keywords or entire filtr groups or adjusting the sensitivity (the slider in the top center of the page).

The service is in private beta, but they’ve given me an invite code that I can use to let people try the system out.  For smaller users, the service will be free (you’re limited in the number of keywords you can use and by the length article history).  For larger users there will be paid "pro service" ($20/month) and for teams of users a group account that enables some additional sharing and other group related functions (for $100/month for the team).  You can sign up for the beta at https://www.filtrbox.com/signup.php?code=foundry.  If I’ve run out of invites, drop me a line and I’ll try to make more available. 

With April 15th right behind us, I thought this would be as good a time as any to write about the fun topic of Audit and Tax Prep fees for companies. I know you’ve been waiting for this, so here it goes…

While audits can sometimes feel like overkill for startups (certainly early ones), they’re generally pretty good hygiene. As a practical matter, most lenders will require them, so if debt is a potential part of your cap structure you’ll eventually need one. And most major investors will also require annual audits (we sometimes waive this for seed stage companies, although even then it can make sense). And, of course, if your company is acquired you’ll typically need to provide audited financials to the acquiring company.

First, let’s talk about who is doing the auditing. There are plenty of solid providers out there, including your brothers’ friends’ wife (more on that later) for all sizes and types of companies. Most of our companies start with a firm outside of what’s commonly referred to as the “Big 4” (Deloitte, E&Y, PwC AND KPMG). Most typically companies use a firm from the tier just below that, although we do occasionally have firms use a regional auditor. There’s nothing wrong with that approach, but do keep in mind that as your company grows you may find yourself in the position of outgrowing your firm’s capabilities. In my almost 20 years in venture we’ve seen the big audit firms come in and out (and in again) of the venture stage company market. They’re not set up to compete well on price for smaller companies but when they’re “in” market they’ll discount for a year or two with the hopes that venture companies grow quickly to mid-stage companies and better fit their fee model. When that doesn’t happen there can be some conflicts as the larger audit firms try to push on pricing and/or use more junior staff to save margin. Selecting an audit firm is typically a multi-year commitment (and should be – bouncing around from firm to firm is time consuming, looks like you’re trying to hide something, and creates inconsistencies). In fact, we typically recommend that when you are bidding out audit that you get multi-year pricing to be sure expectations are aligned on both sides.

I was curious what fees we were seeing in the portfolio at Foundry so we sent a survey to some of our CFOs to get a sense for what firms they were using and what they were being charged. The charts below are based on those responses (18 in total, so just a sub-set of the portfolio).

You can see what I was describing above. Some of the companies in our survey do you Big 4 audit firms, but the majority use someone from the next tier down.

I was a bit surprised by this next chart – the majority of our companies use the same firm for audit and tax prep. There’s convenience to this for startups – especially with limited finance staff – but as you grow it’s more typical to use a different firm for audit and tax.

Here’s the key slide and what led me to the survey in the first place; fees. This generally falls in line with what I expected – there’s an audit floor in the $25k range that’s hard to get much below, but it doesn’t really start scaling until you reach $10M or more in revenue. From there it does scale up, but is dependent on factors such as the complexity of your revenue recognition, the number of jurisdictions you operate in, etc.

With states now paying more attention to nexus and the sales tax landscape post Wayfair, many of our companies are paying more attention to the states in which they file (below we’re talking tax, but there’s also the related question of what states you need to register in; often they’re not the same as there are different thresholds for each). Obviously the graph below is just illustrative that companies are paying attention to this, as w/o knowing the specific businesses in question it’s not possible to say if these numbers are low or high relative to where they should be. But they’ll almost certainly be going up as companies pay more attention to this.

Hopefully these data are directionally interesting and helpful. We’ll plan to run this survey regularly and pull in some more data points.

Sorry – meant to have this one up a little more proximate to the actual event . . . You go to Gnomdex? Me neither.  I was bummed I missed it, so I spent some time rummaging around on Google and Technorati looking for some links.  Here’s a few that I found that, while they don’t replace the experience of attending in person, at least give you a little bit of the flavor.

Here’s the conference site. – http://gnomedex.com/

Here’s the conference update site (scroll down and track the action) – http://gnomedex.com/updates/ Here’s the conference blog roll (links to attendees who blog) – http://www.gnomedex.com/updates/2005-04.phtml

Here’s some photos put up by “laughing squid” – here and here.

Of course the big announcement at Gnomdex was Microsoft’s broad support in Longhorn for RSS. Nick Bradbury had a great review here.

I’ll see you there next year. <g>

With the fate of many small businesses remaining up in the air, after over a year of Covid related restrictions and challenges, my New Builders co-author, Elizabeth MacBride and I just authored a piece for Fortune that talks about the importance of saving America’s more Main Street businesses. We titled it Tech entrepreneurs grab the headlines, but COVID relief should target grass-roots small businesses – I hope you’ll check it out.

The article talks about the importance of small business and tells the story of one New Builder – Carmen Portillo – who is the first certified chocolatier in the state of Arkansas. We tell Carmen’s story in more depth in the book, but the highlights are important to add texture and color to the debate around why small businesses are so important to our economy and to our communities. Small businesses are critically important to our overall economy. Together, small businesses employ nearly half the labor force and generate nearly 40% of annual GDP. They also provide a certain connection to their communities that is both hard to put into words, but impossible to replace. But there is a huge disconnect between today’s entrepreneurs and the largely white men who control our systems of finance (and whose energies focus on high growth companies and hunting unicorns). Some 80% of small businesses don’t receive any formalize form of financing as they get their start (either from venture capital or similar sources, or from a bank).

The Covid crisis put an entirely new angle on what was already a growing problem for America’s Main Street entrepreneurs and we knew it would be important to capture the true impact of the pandemic on our nation’s small businesses. The fast growth promised by tech is mostly an illusion, because it’s narrow. We need a broad-based recovery, not one that only boosts a handful of companies.

I hope you’ll check out the full Fortune article and, if you’d like to learn how we can solve problems facing today’s small businesses, pick up a copy of The New Builders – it’s available tomorrow, May 4th.

Here’s an interesting experiment to try. Get a friend. Think of a song (one that you would reasonably expect your friend to know as well). Tap along with your finger while you play the song to yourself in your head. Now ask your friend what song you were taping out.

It turns out that the taper’s estimate of  how easy it will be for someone to guess what song they are tapping is vastly greater than the success their friend will have in actually coming up with the correct song. The taper believes they are conveying much more information than they really are.  (Apologies for not being able to find the actual study reference I was looking for – I couldn’t find it on Google Scholar and I’ve long since thrown out the psychology textbook I had that referenced the study.)

There’s an important lesson in this experiment. Often times we’re in a position where we have an idea, thought, emotion, etc. that we are trying to get across to someone else. As humans its our nature to overestimate the ease with which other people can understand the information we are trying to convey. What we may feel is very clear – tapping our finger to a song that we think is very obvious – may in fact be completely obscured to the people we are trying to convey this information to.

Something to keep in mind thenext time you’re waiving your arms around at a meeting boisterously trying to make a point . . .

Like you, I’m a pretty busy guy. I’ve always been high energy and (I hope) high velocity. My job requires me to be in many places at one time (and at any one time have a few dozen different things spinning around in my head). It’s tiring and doesn’t always leave time for the kind of balance I look for in my life. There’s always someone else to talk with, some other conference or “it” even to attend; another great idea to look at investing in. But in the last 6 months or so I’ve really hit a different stride that’s allowed me to both feel more productive and more balanced. Given that every one I know struggles with this I thought it would be worth putting a few ideas down on paper in hopes that others will pile in with what’s worked for them.

Gmail: Gmail is simply fantastic. Sitting here it’s hard to even contemplate the number of years I spent in the purgatory known as Outlook/Exchange. It was a strange purgatory – I didn’t really know I was in it, but at the same time always had an uneasy feeling about it. You’re probably already on Gmail (what hipster tech person isn’t?), but just in case – it’s at the top of my list of things I’ve done in the past year that have really impacted my time. Plus Gmail enables a bunch of other productivity enhancing apps (see immediately below for a few of them).

Unsubscribe.com: If you don’t have Unsubscribe.com run, don’t walk, to get the plug-in. It’s free now, which makes the bar to install it even lower (although as I posted previously, I’d gladly pay for this functionality). The key here is to actually use it. And use it often. I’m absolutely relentless about my use of Unsubscribe. I’ve had the same email address for at least a decade and over the years the newsletters and lists have piled up. At some point I tried to unsubscribe myself from them, but it was impossible to stay on top of. Now with a click of the Unsubcribe.com button they’re gone. I’m not joking when I say that I’ve cut back my email traffic by 150 emails A DAY by my relentless (and continued) use of this tool.

SaneBox: Here’s one you may not of heard of. I understand that messing with people’s email is a recipe for disaster. And everyone has their thing in terms of how they like to have their email sorted. For me that wasn’t any of the other email productivity tools I tried and it definitely wasn’t Priority Inbox from Google. SaneBox uses information in my social graph, contacts, calendar and past email behavior to separate out my email into important (in my inbox), deal with later (send to *another folder* to deal with later, possible spam (anything that’s not caught by Postini) and blog comments (there are some other options as well if you want to mess around with it). What I like most about it is that non-important emails never get into my line of sight. And since I have no email self control this turns out to be pretty important for keeping me from getting distracted. I have one inbox for stuff that I need to deal with right away and another (that I can train by the way) for everything else that I can batch process a few times a day. Slick.

Just say no: Not to be a jerk about it but I say “no” more than ever now. It’s too easy to end up with a full schedule and running from meeting to meeting can make for a very unproductive day (and despite this increase in “no’s” I still have plenty of days where I’m doing just that). But I’m ruthless about saying no to scheduled meetings. Instead, I’m pushing people to Community Hours, which is a great, rapid fire way to meet new people; or I’m calling people; or I’m saying “no”. Meeting time is generally reserved for companies in the Foundry portfolio, companies in which we’re thinking of making an investment and little else. It’s really helped me prioritize what’s most important (which is to say companies in the Foundry portfolio and companies in which we’re thinking of making an investment).

Few scheduled calls: See above for step one of this process. Step two is that I try to stay away from scheduled calls. The more on my set schedule, the less flexibility I have to either work in solid blocks of time or to respond to things that come up during the day. I posted a while ago about my need for a call list app. I found one (CallList), which is a bit kluge but generally does the trick (it’s sole purpose is to manage – both online and in an iPhone app – a list of people that I need to call along with some basic notes and information to give me context). I use this app to effectively manage these call backs. This opens up time on my schedule and also allows me to better make use of down time (for example on my drive to the airport, which if you’ve been to DIA you know is a long one from anywhere one actually might want to live in Colorado).

Batch email: All the research suggests that humans do better when they concentrate on one task for a period of time, rather than jumping from task to task. I’m trying to move my behavior from an interrupt driven mode where I am constantly stopping what I am doing to check in on email, to one where I’m batch processing instead. So I work in blocks of time and try to keep my email in the background except when I’m actually working on email (which is still plenty of my day given how much of my job is done over email).

Get out of the office: I wrote an entire chapter on this in Do More Faster and I’m trying to take my own advice to heart. Maybe it’s Boulder. Or maybe I can get away with it more because I’m a VC. Whatever it its, I’m trying to take more walks, hikes and bike rides in lieu of lunch meetings, “coffee” and meetings where I sit in a conference room. I’m not talking every meeting, but a few times a week where instead of sitting around talking, I’m walking and talking. Not only are the meetings more fun, but I find that I stay much sharper for the rest of the day when I get both some time outside and some basic exercise. Obviously these are to be avoided if you need to whiteboard something out or if you need to dial someone else in, but if you think about it you’ll realize that you have plenty of meetings each week that can happen outside of the four walls of your conference room or office.

Don’t worry about Inbox Zero. I was never a great Inbox Zero guy – I use my inbox to keep emails to deal with later too much to get down to fewer than about 5-10 emails at one time. But it used to stress me out that I always had a few things left to do. No longer. I try to get back to people who email me in a reasonable period of time. And I try to respond to most emails (I’ve given up on “all” emails in that last sentence in the last 6 months as well – some emails just don’t deserve to be responded to…). But I’m a lot less stressed about it and as a result I’m a lot more efficient at getting back to people.

Don’t panic! In this world of social media and always being connected, there’s somehow always the sense that you’re missing out on something. And you know what – that’s right. At this very second you’re missing out on something. It’s probably fun too. And there are lots of other cool people involved. But not you. So don’t worry about it and pay attention to what you’re doing now, vs. what you’re not doing. This goes for missing something in your Facebook feed, letting something pass you by on Twitter, etc. If it’s that important someone will repost or retweet it and you’ll see it. Or maybe not. And the world will go on.

This is one of those topics that could go on forever. These are just a few ideas that have worked for me to lessen the load at “work” and make more time for “life.” I’d love your thoughts as well. (and here I’ve focused on the work side of the equation – there’s another entire post that one could write on the life side)

One of my favorite services is unsubscribe.com. It’s a gmail plug-in that with one click lets you rid your inbox of unwanted newsletters. I recently analogized newsletters to tending a garden. You have to stay on top of the weeds or they get out of control. Unsubscribe.com lets you do that.

With this as a backdrop, I was pretty surprised to receive the following in my inbox last week:

Thank you for being one of our paying customers, your trust and support helped propel us to where we are today.

With that being said, I’m excited to tell you that beginning yesterday, August 4th, 2011, we have made our full suite of products (Email Unsubscribe and Social Monitor) completely free, which means we owe you the pro-rated amount of $9.62 and have discontinued any further billing.

Please fill out this quick form on your Account Settings page so that we can send you a refund check. We would like to simply refund your card, however that is not something we can do with our current payment processor so we will instead have to send you a physical check, sorry.

Thank you again and we look forward to keeping your inbox clean and your social networks secured.

Team Unsubscribe

I was blown away. Here was a company that was deciding to stop charging for it’s product. That’s not all that uncommon (although see my post with some thougths on free models here for a few ideas on pricing). But giving back my pro-rated unused account balance? Now that’s really taking it to another level. Here was my response:

Hi. You guys rock. Seriously. I love your product. I think it’s great that you have a model that will now allow you to offer the unsubscribe product for free. I think it’s even greater that you decided that if you were going to make the product free that you should grandfather in existing customers (even though we all signed up with no expectation that we’d receive a later discount). I’ve personally received much more value out of the unsubscribe.com service than I realized I would at the time I signed up (I’ve even tweeted about my love of unsubscribe.com a few times!). You’ve saved me countless hours either deleting emails I never had an interest in reading or trying to navigate the labyrinth of dozens and dozens of companies “unsubscribe” processes. Please keep the balance on my account. I couldn’t be happier with you guys and I couldn’t possibly accept anything back given the tremendous value I’ve received by using your product.

I love it when companies do the right thing. Even if I’m not planning on taking them up on their offer…