A few years ago, my partner Brad Feld suggested that entrepreneurs “take a giant step back” and look for a non-technology based analog for describing their business/idea (the “analog analog“).

Today at a board meeting we spent some time working out our analog as a way of describing our young company. It occurred to us that the best analogs were all technology ones, which made me think:

Have we come far enough in technology that digital analogs are now acceptable (or even preferred in some cases)?!? Perhaps we’re enough generations along the technology curve (Web 3.0?) that it’s now ok to switch our analogs to digital ones . . .

Probably the most consistently overlooked “best practice” in venture backed companies is the CEO review. In my experience most companies provide little, if any, structured feedback at the CEO level. Perhaps the board or the members of the compensation committee might provide the CEO with limited (and mostly ad hoc) feedback at the beginning of each year when/if a CEO’s bonus for the previous year is awarded. More often the CEO review is essentially a review of the numbers vs. the financial plan. While that step is important, so is a meaningful discussion of the strengths and weaknesses of the CEO and ways they can improved their performance based on the collective input of the board and other mangers at the business.

I think skipping the CEO review is a huge mistake and I’m working within my portfolio to start implementing a standard CEO review process. Not only is it important for CEOs to get regular, meaningful and structured feedback on their performance, I think a properly organized review process can serve as the basis for an ongoing conversation between the board and the CEO that extends beyond the review period itself. My partner Brad likes to say that the three most important things that VCs do for their companies are 1) make CEO hiring and firing decisions; 2) aid in capital raising and financing strategy; and 3) help facilitate exits. Managing a real CEO review process fits squarely into category 1 which more broadly interpreted is really about managing the success of a CEO.

For those of you looking for a template for this review, here’s what a colleague used for one of the companies we work on together (and which I’ve now used a few times; I’m not sure if this was a form that she put together or that was passed on to her from another source). Feedback of this type should be collected from the board and all of the CEO’s direct reports (and can be expanded to include other important investors and other managers in the business, although may need to be modified some to work in those cases). While incorporating specific feedback is important, I’m not in favor of showing a CEO the raw information that is collected in this process. Instead someone from the board should be appointed to manage the process of collecting information and distilling feedback into a format that is both direct and actionable for the CEO. Finally this person and one other representative of the board should sit down with the CEO and review the feedback in a structured format that focuses on highlighting the positive aspects of the CEO’s performance as well as specific areas that s/he can improve their performance.

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(rate performance on a 1-5 scale, 1 being least favorable and 5 being most favorable; provide support for your rating in the space provided):

Vision: Creates vision and strategy. Communicates vision and strategy both internally and externally.

Leadership: Ensures the support and execution of the vision and strategy by:

1. Establishment and communication of priorities;
   
2. Driving change for improvement throughout the organization;
   
3. Team-building; and
   
4. Creation of high performance environment.
   

Operating Management: Develops and executes sound long-term and annual business plans in support of approved strategy. Manages operations and resources efficiently and effectively.

Values and Integrity: Maintains consistent values and exemplary conduct. Promotes positive corporate culture to reflect corporate mission statement.

Shareholder/Investor/Financial Community: Serves as chief spokesperson, communicating effectively with shareholders and stakeholders. Is well regarded and respected by investment and financial community.

Strategic Partners: Maintains personal rapport with strategic partners through open, ongoing communications

Human Resources: Ensures the development of effective employee recruitment, training, and plans and programs to provide and motivate the human resources necessary to achieve objectives.

Public Relations: Ensures that the company and its operating units contribute appropriately to the well being of their communities and industries. Represents the company in community and industry affairs.

Board Relations: Works effectively with the Board of Directors to keep them fully informed on all important aspects of the status and development of the Company. Facilitates the Board’s governance, compositions, and committee structure. Implements Board policies and recommends policies for Board consideration. Supports a relationship characterized by trust, mutual respect, open communication and responsiveness to feedback. Uses Board meetings effectively.

Financial Results: Financial Results – Establishes appropriate annual and long-term financial objectives and manages to consistently achieve these goals; ensures that appropriate systems are maintained to protect assets and maintain effective control of operations.

Key Challenges in the Year Ahead:

Thoughts and Concerns:

Other comments:

From CES. The bit with Bono is particularly amusing!

Enjoy!

http://www.youtube.com/watch?v=Xr5w3X4R8b4

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 wrote in my last post that soon after installing Memeo I couldn’t figure out how I had lived so long without it. I had a similar – in this case instantaneous – experience last night after installing my new Sonos. I’m not entirely clear why I waited to long to buy one (actually I am clear – I’m cheap and Sonos isn’t exactly inexpensive) but now on the long side of my buying decision, whatever benefit my frugality brought me was completely dwarfed by the sheer joy and excitement I had about 15 seconds after setting up my system.

Because my house was not wired for speakers and because of my aforementioned penurious nature I had cobbled together a suboptimal system that involved broadcasting music around the house with a low power FM transmitter (to a series of Tivoli receivers placed in various rooms). This worked ok in the living room where the receiver was about 5 feet from the transmitter, but not so well in the other rooms of the house where static was common when a person or dog walked in the wrong place (despite my hack to boost the transmitter power). Even in optimal conditions, I lost much of the low and high end audio clarity.

Enter the Sonos, which couldn’t be easier to set up (despite an errant trip to Radio Shack for an adaptor it turned out I didn’t need – note to self: look at the jack before heading out the door since you probably don’t need anything that isn’t already in your box of spare wires/adaptors). I plugged everything in and the system found each of its piece parts. I quickly set up an account, linked in my existing Pandora and Rhapsody accounts, and in about 5 minutes was effortlessly streaming audio around the house (and running around from room to room saying things to my wife like: “look – I can mute just this zone!” and “watch how easy it is to change music!”).

WOW – why did it take me this long to make the jump? If you love music you’ll love Sonos. And if you know someone who needs a hacked FM transmitter, let me know . . .

Yesterday Memeo announced an $8.1m Series B funding led by Foundry. Memeo offers simple, elegant, but extremely powerful backup and synchronization capabilities for both the Windows and Macintosh platforms. I couldn’t be more excited about the Memeo opportunity, about the Memeo team or about our co-investor, G-51 (with whom we’ve teamed up with in past investments). And while I rarely judge the merits of an investment based on my personal experience with a product, I can say that having installed the product as part of our due diligence process I’ve been amazed with how powerful and simple to use the Memeo’s Life Agent. It’s one of those things you add to your technology stack and quickly realize that you can’t live without it. The fact that it blows its competitors away with its ease of use just adds to the experience (yes – managing the back-up and synchronization of your digital assets SHOULD be this easy).

My partner, Ryan McIntyre, is going to represent Foundry on the board of Memeo and wrote a nice post here on the business and our decision to invest.

I have a few pet peeves about personal business habits that I’ve joked about in the past (see How do you sign your emails and Where was that you went to school, for example). Here’s another one that’s been bugging me lately: outgoing voicemail messages

With apologies to my many, many friends who do this, it really bugs me when people have their assistant leave their outgoing voicemail message. I get it – you’re busy; you’re very important; you have an assistant; you don’t really have time in your schedule to deal with things like setting up your voicemail. But really? Do you honestly not have the 30 seconds it takes to set up your own personalized outgoing message? Or is it that you just can’t figure out how to do it . . . ?

And while I’m on the topic of voicemail, how about not setting your outgoing message to the automated “John Smith” . . . “can not take your call right now. I’m the guy who always gets tricked by this (often multiple times by the same person), thinks you’ve picked up your phone and starts a conversation with your voicemail before the systems completes the message and I realize I’m just talking into the air. It does not make me feel very smart . . . although I still feel smart enough to set up my own voicemail <g>

EOR

At Mobius/Foundry we take the week between Christmas and New Year off from work. Combined with a few days before, Christmas this makes for a pretty nice break from the office. Historically I average about 50% for being able to actually take meaningful time away from work over this time period (there have been a handful of years where an end of the year deal has made this impossible). This was one of the good years.

I forget sometimes how nice it is not only to take time off but how great it is to stick around every once in a while during a holiday. Especially in a place like Colorado, there just a lot to do close to home. We split our vacation between our place in the mountains (got our girls on skis for the first time and had some great back-country days!) and at our house near Boulder (more back-country skiing with my wife thanks to some opportunistic babysitting).

I’m charged up for 2008. Lots to write about. . . Lots to do. I’m looking forward to sharing it with you through VC Adventure.