Take Decisive Action to Stem Covid-19 NOW
It’s hard to keep track of all the data around the current status and potential spread of Covid-19. The data are overwhelming, there is a lot of disinformation spreading, and the data and advice from various public and private sources are changing almost hourly. It’s a scary time, and as I wrote on Friday, a time to make sure we’re staying connected, even if we’re physically distancing ourselves from each other. …
March 15, 2020· 3 min read
Social distancing vs social isolation
I took a poll of the Foundry portfolio this morning to check in on the shift to Work From Home. As of today, about 1/3 of our portfolio companies have implemented a mandatory work from home policy. The vast majority of the rest are recommending people work from home but are not mandating it (meaning they’re not physically closing their offices). Only a couple are still operating with their offices fully operational. …
March 13, 2020· 3 min read
Organizational Scaling
For the early part of your business you’re likely too busy to be spending a lot of time thinking about management structures, team optimization and how your business scales. You’re just getting shit done. And, even for experienced executives, making quite a few things up as you go along. The solution to many early scale challenges is to find something that works and then do more of it. That works great, right up to the point where it stops working completely. We’ve had a lot of companies go through scale challenges (I’d say typically around 100 people, but plenty of companies have muscled through that point and built 200 or even 300 person organizations without paying much attention to the scale structured needed to make that kind of organizational scale actually work. Here are a few things to think about/look out for based on our experience messing this up over and over again. …
October 22, 2019· 4 min read
Polar Bears!
Kaktovik lies at the far northern edge of Alaska’s North Slope region, about 640 miles north of Anchorage (and almost 400 north of Fairbanks). Located on Barter Island and due to its location, is mostly cut off from the rest of the world. Everything – fuel, supplies, infrastructure, needs to be brought in either by plane (to a small, gravel, landing strip) or by barge – of which there are between 1 and 3 a season. It’s just about the farthest northern town in America (Utqiagvik, which used to be called Barrow, is slightly north of Kaktovik). During the winter, the sun doesn’t rise for 2 months. Despite this isolation – or perhaps because of it – Kaktovik is considered one of the best places in the world to see Polar Bears. Female bears with their cubs make Kaktovik their summer home (the ever receding polar ice is about 200 miles north) where they wait out the season in anticipation of the ice reforming starting in October so they can venture north to hunt seals. The town is populated primarily by Inupiat, who continue to practice some of their native traditions, including the hunting of whales (they’re allowed up to 3 a year under treaty with the US government). While they use the majority of the whale for food and other purposes, the remains are deposited in a “bone pile” that the bears feed upon. It’s also not uncommon to see a bear in the village itself. …
September 30, 2019· 4 min read
The Markets Are Great . . . but Venture Outcomes Haven’t Changed Much
A few years back I blogged about the hard data behind venture outcomes and the challenge of creating a venture portfolio that produces strong returns. That blog post – which turned into one of my most read posts ever – grew out of a study done by Correlation Ventures showing the distribution of outcomes across over 21,000 financings during the years 2004-2013 as well as some of my own observations. The Correlation study produced a lot of interesting data and showed that the typical “1/3, 1/3, 1/3” model that many VCs talk about was significantly more optimistic than the reality of typical venture returns. The vast majority (almost 2/3rds) of venture financings fail to return capital. And only about 4% produce a return of greater than 10x. Pretty humbling. Here’s the graphic I used from that post: …
September 20, 2019· 2 min read
How Well Do Founders Do in Venture-Backed Exits?
A few years ago I wrote two posts – Venture Outcomes are Even More Skewed Than You Think, and Some More Data On Venture Outcomes – that challenged the mythology that only 1/3 of venture-backed deals failed and showed just how rare large (10x and greater) venture returns really are. I think the sharpness of the curve surprised a lot of people and contributed to a bunch of discussion at the time around just how rare “venture outcomes” really were. Not surprisingly, I was looking at the data through the lens of an investor and in so doing was only focused on how well investors fared in company exits (as a side note, I’m hoping to update these data now that a few more years of a bull market are behind us). …
September 9, 2019· 3 min read
How much should you be paying your auditor?
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. …
April 18, 2019· 4 min read
A-B-E
Almost universally our best companies are constantly experimenting. This takes different forms in different parts of their businesses but the common theme is that every process, every page on your website, every communication to a customer is an opportunity to test and optimize. Sometimes this is chipping away at a mountain (small improvements that add up over time). Other times we see large jumps in efficiency (I had a company recently change some text on a landing page and see a 10% improvement in sign-ups to a white paper). The improvements are important – businesses become efficient over long periods of time and these efficiencies compound each other to create significantly better operational outcomes (and business outcomes). And even small improvements over long periods of time (and when combined with other improvements in the same flow) add up to significant changes. And it’s worth noting that optimization is a never ending process – even when you find something (like the landing page example above) that seems to make a big difference, that doesn’t end the experimenting. Tastes change and effectiveness of pretty much any page/email/process tends to go down over time. …
April 10, 2019· 1 min read
How To Get a Job In Venture Capital
One of the most frequent questions I get asked is “how do I get a job in venture?” In fact, I’ve written two posts over the years on this topic – one way back in 2005 and a follow-up to that a few years later in 2008 (the 2nd of the post is the more practical advice if you’re pressed for time; or just keep reading below). A lot has changed in the past 10 years since I wrote my most recent post on this subject. And a lot hasn’t. Below is an updated overview of the venture job landscape as well as some current thoughts on how to break into the industry. …
February 7, 2019· 8 min read
Designing the Ideal Board Meeting – Board Conflict
This is the 5th post in my Designing the Ideal Board Meeting series. Today’s post focuses on board conflict and disagreements. It’s not something that’s often talked about on boards and I think the fear of conflict often drives some of the negative behavior I’ve encouraged you to avoid through my earlier posts (a great example of conflict avoidant behavior is a CEO calling each board member ahead of the meeting – something I think at its core is done to head off any disagreements at the actual meeting itself). …
November 30, 2018· 8 min read