The New York Times is running a series of articles on the last days of the Enron crisis (actually excerpts from Times writer Kurt Eichenwald’s forthcoming book on the subject).   It reads like a soap opera (by both design and because that’s really what this story amounts to).  The amazing take-away for me was just how far Enron had strayed from the most basic forms of financial management (they didn’t track their cash balance, nor did they track when their debt came due – so they had no idea either what they owed or how much they had available to cover that debt).
Take a look at the article here (in case the link doesn’t work the url is http://www.nytimes.com/2005/03/13/business/yourmoney/13enron.html?) .  It’s worth a read.

[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. 

Entrepreneurship in the United States is changing pretty dramatically – in ways that many of us have failed to notice or understand. Specifically today’s American entrepreneurs are more likely to be female and non-white. In fact, the number of women-owned businesses has increased 31 times between 1972 and 2018 according to the Kauffman Foundation (in 1972, women-owned businesses accounted for just 4.6% of all firms; in 2018 that figure was 40%). Meanwhile, the fastest-growing group female entrepreneurs are women of color, who are responsible for 64% of the new women-owned businesses being created. There’s a lot more to dig into here, which I’ll do in future posts. But it’s urgent that we begin to understand this because we’re failing to build systems to support these new entrepreneurs. This has become especially clear in the current economic crisis, as I pointed out in this piece I wrote with Elizabeth Macbride a few weeks ago for CNBC as well as this post from last week. Relief money authorized by congress under various programs of the CARES Act and other initiatives is failing to reach many women and minority owned businesses and is highlighting structural issues with the way we support entrepreneurs in the United States. For example, it has been widely documented that women and minority owned businesses are not accessing aid through the Payroll Protection Program (PPP) – see for example, here, here, here, here, here. This program requires businesses to have relationships with certain approved SBA lenders, which women and minority owned businesses are less likely to have. Its initial roll-out excluded certain types of financial institutions (most notably CDFIs) which disproportionately bank these businesses. It also left much of the underwriting criteria up to the banks themselves, who favored other customers. And the program itself – based on W2 payroll and primarily benefiting businesses that were in a position to open up quickly – failed to address the kinds of businesses most likely to be started by this new generation of entrepreneurs.

We can and must do better.

Which is why I’d like to highlight for you a great program called EforAll.  Launched in 2013 with a mission of partnering with communities to help under-represented individuals successfully start and grow their businesses, EforAll is a pretty special organization. I’ve gotten to know them well over the past two years (Brad and his wife Amy, as well as Greeley and I are financial supporters of EforAll). EforAll combines immersive business training, mentorship and an extensive support network to help support their entrepreneurs. It’s incredibly compelling and urgently needed – now more than ever. EforAll is up and running in 9 communities in Massachusetts and Colorado and, to date, they’ve supported entrepreneurs in starting almost 350 businesses, 83% of which continue to be actively pursued by their founders. About a year ago we launched in Longmont and that program just graduated their first class (I attended the virtual demo day/graduation – it was inspiring).

We’ll be starting up another Longmont program this summer and are looking for mentors in Boulder and the Front Range (although potentially for this one anywhere – we anticipate much of this summer’s program will end up being virtual). This is a fantastic opportunity to help female, minority, and immigrant entrepreneurs pursue their business ideas.

A few stats:

EforAll National
– Over 500 ventures graduated
– Nearly $35M in capital raised
– Over $25M in 2019 revenue

EforAll Longmont
– 9 businesses (11 entrepreneurs) went through first Longmont accelerator
– Those entrepreneurs were from the North Metro area, Boulder County, and Weld County
– Ventures in the first program ranged from gluten-free beer & pastries being made from ancient grains & traditional Peruvian recipes, to a financial literacy app for elementary school students, to a husband & wife duo manufacturing adaptive underwear for individuals with sensory disabilities
– Highlights from the first accelerator include an entrepreneur securing her first two grocery store clients for her plant-based meat product, an entrepreneur raising 40k from friends and family, and an entrepreneur launching their first online marketplace for disability-focused products
– EforAll Longmont was also mentioned in this href=”https://www.nytimes.com/2020/02/07/your-money/entrepreneurship-philanthropy-gururaj-deshpande.html”>New York Times article, received support from Google, and worked with more than 50 volunteers during our first accelerator (including about 30 mentors)

EforAll Mentoring Ask – Mentoring with EforAll is a fantastic way to support small businesses and aspiring entrepreneurs in your own background. Accelerator Mentors come from a variety of backgrounds and use their business and leadership experience to guide new entrepreneurs through the process of starting or growing a business. Mentors work in teams of three and are matched with an entrepreneur based on schedule availability and desire to work together. The team meets as a group to help reaffirm topics and themes raised during classes, while also strategizing with the entrepreneur on how to reach their specific goals during the program. Mentoring with EforAll is a 90-minute per-week commitment from July-September and all meetings between entrepreneurs and mentors will take place virtually. For more information, you can click here and you can also email EforAll Colorado Executive Director, Harris Rollinger, at harris@eforall.org.

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!

Today is the 36th anniversary of the first moon landing (July 20, 1969).  Moon’s almost full, so you’ll get a great look at it.

Google put up a moon site recently – www.moon.google.com.  Be sure to zoom all the way in <g>.

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.

Bet you didn’t know that he had it in him.

Enjoy!

http://www.thepartyparty.com/

(thanks to Chris for the link)

I had an exchange with an entrepreneur last night that I couldn’t resist posting (I did resist including the guy’s name, however). It started with a relatively typical email. One which I wonder why I still receive but still get regularly. The entrepreneur writes:

Seth…..I’d like to pitch you on a start up. I need the help of someone like you. I haven’t filed any patents yet and I need a nda signed. can we do it?

I respond as I do for all requests like this by saying:

Hi [name redacted]. Like most VCs I don’t sign NDAs (see: https://www.sethlevine.com/wp/2008/01/why-i-dont-sign-ndas). Let me know if you’d still like to show me what you’re up to (totally understand if you feel it’s too sensitive).

Here’s what I received in response:

Seth….I’m reaching out to you here, lets get off this old cookie cutter vc "don’t sign nda’s" attitude, it’s only until the patents are filed. I believe I’ve got one of the biggest deals to come down the pike in years. This isn’t my first rodeo. Just FYI, no matter how hard you crunch the numbers, this is a 20+B per year deal. I already have demo software and I need you to help me put a team together, the money will come as soon as we are able to "show and tell" so to speak. Please reconsider.

Really? That’s how you’re engaging with me? I can’t imagine how you think this is a winning strategy. Am I supposed to be bowled over by how amazing this potential opportunity might be, change a cardinal rule of our business and through this series of emails think that you’d be a competent manager, effective advocate for your business and a good guy to work with?

The initial email is completely casual, full of mixed cases and grammatical errors. Oh, and totally un-researched. But the second response really takes the cake and what caused me to post this for the world to see. Of course you have one of the biggest deals ever. Clearly this isn’t your first rodeo. Certainly you’re playing in a $20BN market. And without question I’m just one of those cookie cutter VCs. Obviously I should change my attitude.

[BTW, in case you were wondering, I didn’t bother responding]

In case you were wondering what goods Google has on you check out http://www.google.com/ads/preferences/ from the browser you typically use for web browsing and search. If you scroll down you’ll see what interests Google has you pegged for and get to see the data they have collected on you in your cookie.

For me the most interesting part wasn’t the data they had on me, but looking through the Google interests taxonomy at the bottom of the page.  There are specific tags for individual car brands, for your love of Bollywood movies, pest control, screensavers, etc. It’s an interesting glimpse into how Google thinks about the world (and more importantly into what categories Google thinks it can make money by trafficking).

If you’ve been a reader of my blog for any time you’ll know that I’m intrigued by (and a big fan of) the notion of The Democratization of Entrepreneurship. It’s not that I think entrepreneurship solves all the world’s challenges, but I deeply believe in the notion of entrepreneurship as a catalyst for positive social change across the globe. It’s a powerful force and we’re seeing more and more examples of entrepreneurs creating real change around the world, community by community.

Late last year I had the opportunity to spend a week in Palestine working with entrepreneurs and traveling in the region. It was part of my work as an advisor to Sadara Ventures – the only Palestinian focused venture fund (Google, Soros, the EU, Skoll Foundation and others are investors in the fund). It was an eye opening trip to say the least and a truly amazing experience to be working with entrepreneurs in an area that is experiencing so much turmoil.

This is a personal story and one about entrepreneurship. But it’s impossible to tell that story without the context of the political reality on the ground. In fact everything in Palestine to some extent takes place with that backdrop (and perhaps – at least as it relates to business and investment – in spite of it).  I’m in no way trivializing the conflict nor suggesting that the answers to the region’s problems are easy ones that can be fixed if we only better supported entrepreneurs. But it was refreshing to spend time with people living literally behind the wall, but looking past the political situation to try to create an environment in which entrepreneurs can survive and thrive. While in Palestine I had the opportunity to work with a number of entrepreneurs, meet with locals in shops and restaurants, but also to meet with a handful of key business leaders as well as the Vice President of the Palestinian Authority. The perspective I gained was a true cross section of Palestinians and as varied as the backgrounds of the people I met.

A little background and context. Palestine can be a rough place. GDP per capita is low – about US$ 1,650 per capita. The overall labor force participation rate is only 43% and unemployment is over 20%. The population is very young – 70% are below the age of 30 (and 40% younger than 15) and youth unemployment is over double the overall rate.

Movement in the territories is pretty restricted (and here I’m referring to the West Bank and not Gaza, which is completely closed off). The West Bank itself is about 5,600 square kilometers (so not exactly tiny) but movement into and out of the territory is difficult. As a foreigner I could come and go as I pleased (as a side note, getting into the West Bank was much easier than getting out – really meaning getting back into Israel; the very heavily armed Israeli soldiers weren’t all that impressed with my US passport, nor I suspect my very Jewish sounding name given where I was coming from).  Some Palestinians do have papers that allow them to travel into and out of the West Bank (particularly those born in/living in East Jerusalem which is an area in dispute, but is on the Israeli side of the wall). Israelis are restricted from entering Palestine – by the Israeli government (presumably concerned that any violent act by or on an Israeli would case a political storm) – and several of the Israelis associated with Sadara had to obtain day passes to enter and exit (they were denied the ability to stay overnight in Palestine and instead had to drive back to Jerusalem each night; I was able to stay in the center of Ramallah at what turned out to be a pretty nice hotel). Cars in the West Bank are restricted to the territory if they have a white license plate but can access Israel if they have a yellow one. Even in Israel travel is a somewhat restricted with frequent check-points on the main highways (traffic slows, but does not stop through these).

Entrepreneurs in Palestine are like entrepreneurs everywhere – optimistic, hard working, a tad fanatical at times. And while many of the businesses I was helping with were building products targeted to the Arabic speaking world in the EMEA region, the businesses they are creating would be familiar to any entrepreneur – travel and hotel bookings, content for kids, a gaming platform, 3D rendering systems, etc. It’s that passion for their projects combined with their desire to build businesses in Palestine that really stuck out to me from my visit. Many of the entrepreneurs I met with were educated in the US or Europe and had papers that would have allowed them to start their businesses elsewhere. But they’ve chosen to come back to Palestine to work there in an effort to try to make a difference in their homeland. Many spoke eloquently about this choice and the decision to move back home. I have a lot of respect for that kind of national pride. But especially in the context of the political situation in the West Bank where another Intifada would put the region again in a tailspin – business leaders in Palestine talk openly about wanting to avoid this but also with the understanding that there was little anyone could do to either predict or prevent another uprising (although they also recognized that economic stability leads to greater political stability).

I left Palestine completely energized about the work going on there in the entrepreneurial community and hoping that I can continue to help pursue economic development in the region.

What follows are some images from my visit as well as some background about them.

Video from the “no-man” zone on the Palestinian side of the wall but not yet truly in Palestine (the Israelis set this area up basically as a buffer to Israel but its become this sort of bizarre in-between land that’s neither a true part of Israel or Palestine. There are several refugee camps just to the south of this area that we passed on our way in.

https://www.youtube.com/watch?v=S-Q9vaLS0qc&feature=youtu.be

The difference between the Israeli side of the wall and the Palestinian side makes it clear who erected the barrier. The Israeli side is pristine while the Palestinian side is covered with graffiti.

Pictures of Yasser Arafat are everywhere in Palestine.

I was fortunate to have the opportunity to have lunch with Dr. Mohammad Mustafa, Vice President of the Palestinian Authority. He’s widely talked about as the next PM of the Palestinian Authority. Interesting to say the least (my visit happened to coincide with a visit to the region by John Kerry, the US Secretary of State).  The details aren’t appropriate to get into, but Dr. Mustafa has an economics background (he was trained in the US and worked for 20 years in Washington) which I think lends itself to a pragmatic view of the world. Although even with that, the severity and length of the conflict leave even practical thinkers on both sides at odds over certain of the most difficult points of contention.

I had a chance to tour Jerusalem for half a day. It was my first time in Jerusalem – obviously a city rich with history. The pictures below include me at the Western Wall as well as some of the marketplaces and architecture around town.

My tour guide in Jerusalem said something to me that, while I hope isn’t true, really stuck out to me. We had just gone through the Church of the Ascension and were ending our tour. Sitting on the steps of the Church I said to him: “You seem like a pretty reasonable guy and you’ve lived here for something like 20 years, what do you think the solution is to the fighting and disagreement in the region?” To which he responded: “That’s such an American question. What makes you think there’s any solution? This is a place where people have been fighting each other for 3,000 years. Maybe that’s just how it’s going to be.” I certainly hope that’s not the case, but the idea of finding a “solution” as being a distinctly American way of thinking was something I’d never thought about in that way before (I asked him if this view was broadly held he said it was, although he and many of his friends do hope that there’s some kind of path to peace).

I was also able to tour around Ramallah and the West Bank a bit and captured some photos from that part of my trip as well. Among the photos below is the “Stars and Bucks” coffee shop in Ramallah, the still under construction city of Rawabi – sometimes referred to as the “Palestinian Settlement” (it’s a full city being constructed for Palestinians in central West Bank; I had a chance to meet Bashar Masri who is a well known Palestinian entrepreneur and the main force behind the project). There’s also a picture below of the Entrepreneur Meet-up that we hosted in Ramallah one of the evenings of my visit. We had over 100 Palestinian entrepreneurs get together to talk about creating entrepreneurial communities and enhancing opportunities for Palestinian entrepreneurs. There’s also a picture of the “Startup Weekend Ramallah” sticker that I saw on many laptops around town – Ramallah has now hosted two such weekends.

The final story from my trip comes as I was leaving. The airport in TelAviv is famous for its security – I had to show my passport 3 times before I even got to the check-in counter. As part of this process every passenger goes through a triage process where they’re asked various questions about why you’re traveling, what they were doing in Israel, etc. Basically trying to suss out whether you’re likely to want to try to sneak a bomb onto your plane (based on this interview they then put you through various tracks of security ranging from pretty much what you’d experience in any US or European airport to hour+ interrogations accompanied by detailed bag and person searches). Upon taking a look at my passport the triage team in my case then spent the next 10 minutes quizzing me in a way that I can only summarize as “Exactly how Jewish are you?” I had provided them some information on the purpose of my visit (but no details on where I went or whom I met with) so that had at least a little context – you would think – to give them reason to ask about what I was doing there. But no – all the questions were centered on where I went to temple, how often I went, etc. Apparently I successfully convinced them that I was Jewish enough because after 10 minutes they let me through the light version of Israeli security.

A huge thank you to Saed and Yadin from Sadara for hosting me. And especially to all the great entrepreneurs I met with while I was there (especially George for the great meal in East Jerusalem and Yousef for our breakfast in Ramallah). It’s both humbling and exciting to be welcomed so warmly into this great community of entrepreneurs.