Every day I get emails from entrepreneurs that make me think.  In this case, it’s from a friend who is on the fundraising trail.  He started off the email with “I felt compelled to share this with you as someone who would appreciate it.”  I thought it was dynamite and asked him if I could share it since – in its unedited form – it captured so nicely what I expect many entrepreneurs feel. And, just as importantly, it’s something I hope VC’s realize that entrepreneurs – even very experienced ones – feel.

I am fortunate to have successfully raised venture capital from top tier investors before. 

I have been a failed and successful CEO and know the difference.

I have earned my CEO stripes by being a successful operator in startups and big organizations.

I can lead, problem solve and think strategically.  I am technically adept, I can sell.  I work hard.

Yet, as I set out to raise money, I still have a great feeling of unease of the result.  I guess I have humility as well.

I’ve noticed, or maybe more accurately, I’ve become aware of the ether that is between a venture investor and entrepreneur.  In the ether, all things that can make or break a deal exist: idea, market risk, technical risk, team competence, economy, deal flow, competition, VC mood that day, entrepreneur pitch that day, first impression, gut feel, blog post for or against the idea read that morning, breakfast/no-breakfast, bias for or against, smarts or not-so-smarts of the VC and entrepreneur.

In my pitch experience, VCs I have been convinced hated me and my company after my pitch have invested.  VCs I am sure as shit loved me and my company after my pitch blew me off.  I have also been right that VCs I thought hated me and my company told me they in fact did; and, those who loved me and my company did in fact invest.  It’s been a crap shoot at best. 

Assuming there is something of merit in the idea, market, team and company, somewhere in the ether is a term sheet and a kick to the curb.  Coalescing just the right combination of elements in the ether at the right time has proven to be more art than science.  Anti-portfolios highlight how successful companies didn’t get it coalesced with one investor but did with another.

If I get it right and a financing comes together for my new company, I hope to have learned something that tips the scales of randomness in the scrum.

At dinner tonight we started telling miserable airplane travel stories.  Everyone has a least one (or 7,321) so it’s fun to hear some of the really abysmal ones, especially the night before I head to the airport to catch an early morning flight.

We were also talking about various philosophies of life and how to deal with difficult stuff.  After a while the conversation circled back to air travel.  And then I heard the best line of the night.

“When I travel I pretend I’m luggage.  From the moment I set foot in the airport, my expectation is that I’ll be treated no better than my luggage gets treated.  As a result, my expectations are so low that any little bit of happiness and politeness brings me great pleasure.”

I laughed out loud.  It was said with a sardonic grin, so the backdrop was framed appropriately.  There was a quiet pause after my laughter.  And then I pondered it – and thought how incredibly right this approach was.

Rather than bitch endlessly about the misery of our air travel experiences, let’s all spend November pretending we are luggage.  The only goal of the plane is to get us from point A to point B.  I guess there are circumstances where this won’t happen, but in most cases we’ll eventually get there.  Time doesn’t really matter to a piece of luggage, nor does comfort.  Politeness?  I’ve shoved many a piece of luggage into a space that it didn’t fit without even saying “excuse me.”  Oh – and I’ve put my smelly feet on my luggage many, many times.

In addition to pretending I’m luggage, I’m also going to make sure I use my super power on every plane flight this month. Luggage is very good at sleeping on planes, as am I.  Luggage sleepers unite.

See you at the airport.

We’ve been investors in Oblong since 2007 and I’ve talked about them regularly on this blog including a post titled I’ve Seen The Future from my first meeting with them.  I’ve known two of the founders – John Underkoffler and Kevin Parent – since we lived together at MIT (we all lived in a fraternity called ADP on Mass Ave. at the same time, along with a bunch of other entrepreneurs including Colin Angle – the founder of iRobot and Jeet Singh / Joe Chung – the founders of ATG.)

A few months ago my partner Jason Mendelson was introduced to a reporter from Bloomberg who was looking for “innovative companies to interview” for an upcoming Bloomberg TV series called Bloomberg Innovators.  Jason immediately thought of Oblong and made the introduction. 

Bloomberg Innovators has four thirty minute episodes – the first one titled Turning Point is about Oblong.  In addition to highlighting the amazing stuff the gang at Oblong is doing, the show takes you through the history of how the innovation that is called Oblong’s g-speak Spatial Operating Environment was created.  As part of this, you get to see some pictures of John Underkoffler 20+ years ago in the Media Lab working on the Luminous Room along with some background on John’s work on the movie Minority Report.

If you are interested in how innovations evolve, the future of human computer interaction, Oblong, how some VCs think about investing in the future, or just want to have your mind blown with some amazing stuff, spend 30 minutes enjoying the show.

Bloomberg TV doesn’t allow embeds, so you’ll have to launch Bloomberg Innovators: Turning Point from here.

Three of my VC friends (Santo Politi, Mark Suster, and Kate Mitchell) were on Fox Business’ Capitalist Ad”Ventures” series.  The underlying theme of this segment was the characteristics of entrepreneur that VCs look for.

Fox doesn’t seem to have embeds, so you’ll have to use this URL to watch “The Future of Venture Capitalism”.

While Santo, Mark, and Kate weren’t the maniacal crazy people (although I’m sure some will argue that), they were clear about the ones they are looking for.  Nice job gang!

We spend a lot of time talking about “computers in the home” as part of our Digital Life theme.  Over the past year, I’ve heard the phrase “Home Networking” with increasing frequency.  It made the rounds a while back (anyone remember when it was called a HAN – home area network) but seemed to fade into the background for a while.  I’m not sure what caused it to show up at our party again (although I’m suspicious that it is Windows 7), but it’s back.

My mother doesn’t know what “home networking” is, nor does she care.  And she is an example of a typical user.  Virtually any home that has a broadband Internet connection now has a HAN because of the router involved in the broadband connection.  These routers are generally wireless at this point so people now have wireless networks in their house, whether they realize it or not.

When I time travel and find myself in 2015, I notice that every electronic device in my home is “network enabled” and connected to the Internet.  For example, I just bought a new Withings Connected Body Scale which connects to my “home network” via Wifi (and subsequently to the Internet.)  Yeah, I get all the old cliches about my refrigerator being connected to the Internet, but as the Jetson’s have proved over and over again, the future that was envisioned in the past often eventually arrives.

Calling this stuff “home networking” is kind of like calling the electrical closet in a house a “home power plant.”  While I realize that make the technology disappear into the background is part of the mission, I’ve always felt that “getting the words right” as things go mainstream also matters.  All of us nerds (and our marketing friends) playing around with “home networking” probably have another shot to get the language right.  I’m going to spend more time talking to my mom, Amy, and other non-techies about what they call it other than “that fucking computer shit.”

There are two CU Silicon Flatirons Entrepreneurs Unplugged events next week – one on Monday November 2nd at CU Boulder in Atlas Room 100 and one on Wednesday November 4th at the Denver Art Museum.

The 11/2 Entrepreneurs Unplugged is with Steve Halstedt, the co-founder of Centennial Ventures.  Steve co-founded Centennial in 1981 and was one of the fathers of the venture capital business in Colorado.  When I moved to Boulder in 1995, Steve was one of the first VCs I met with here and he’s been a great friend and mentor ever since.  I look forward to interviewing him about his experiences, especially how entrepreneurship has evolved in Colorado since the early 1980’s.  Please register and join us!

The 11/4 Entrepreneurs Unplugged is with Nir Barkat, the Mayor of Jerusalem.  This is a special Entrepreneurs Unplugged event Silicon Flatirons is co-hosting with Governor Ritter, the Colorado BioScience Association, CSIA, and the Mizel Family Foundation.  I’ll be in Seattle at the TechStars 2009 Demo Day in Seattle so Brad Bernthal will be interviewing Mayor Barkat.  In addition to being the Mayor of Jerusalem, Barkat is a successful entrepreneur and VC having started BRM Partners and subsequently Backweb Technologies.  While I’ve never met Barkat, I remember Backweb well as SOFTBANK was an investor in the company when I was a SOFTBANK Affiliate – shortly before a group of us created Softbank Technology Ventures.  This promises to be a special event held at the beautiful Denver Art Museum from 2pm to 4pm on Wednesday 11/4.  Registration is now open.

Bloomberg TV is running a show called Bloomberg Innovators.  One of our portfolio companies – Oblong – is the focus of the first episode that airs this Friday (10/30) on Bloomberg TV at 9pm and 11pm ET.  As a special bonus, Jason and my Donkey Kong machine are in the trailer and both Jason and Ryan are in the episode that stars John Underkoffler, Kwin Kramer, and a bunch of the Oblong gang.  Oh – and Jason’s hair looks funny.

In case you were wondering what the Boulder Snowstorm resulted in (so far – it’s still coming down) at my house in Eldorado Springs, here you go!

So there is no ambiguity, my dog Kenai loves it.

And – no surprise, so does Brooks!

Talking about scale and growth is hard.  Many people talk in percentages in pre-determined time periods (e.g. let’s grow revenue 100% next year).  I find this to be relatively useless.  Instead, I like to challenge people to think on a bigger scale over a variable time period.  My favorite line of late is “add another zero – you pick the metric and the time frame.”

I used to call this “increase X by an order of magnitude” until I realized that lots of business people don’t actually know that an increase in an order of magnitude is equal to multiplying by 10.  While it’s silly, there’s no ambiguity when you talk about “adding a zero to the end of a number.”

For example, I’m an investor in a company that is growing its user base as they had planned.  However, they are coming up far short on a variety of measures, including daily active users (DAU’s) and virality measures (they have several that are good, well defined, and easy to measure.)  So, my simple statement to them is “Nice job on user growth.  How do you add a zero to the number of DAU’s and the virality measures – you pick the time frame?”

In another case, I’m an investor in a company that had a great year on all accounts.  They are the clear market leader in their segment, well funded and – while still losing money on a monthly basis – have a very clear path to being cash flow positive in 2010 on the cash they have in the bank.  We are no longer worried about them becoming a relevant company – our attention is now shifting to how to grow to be a very big and important company.  The question I asked them was “How do you add a zero to your annual revenue number – you pick the time frame?”

This question can apply to any metric.  If you have one customer, how do you get to 10 customers?  If you have 10 customers, how you get to 100?  If your users are on your site for 1 minute a day, how do you get to 10 minutes a day?  If you are generating $100,000 per customer, how do you get to $1,000,000 per customer?  If your largest customer has 1,500 seats of your software (or service) deployed, how do you get to 15,000?  Add another zero – you pick the time frame.

While there are natural limits to this when you approach it top down, it becomes very powerful when you approach it bottom up.  I call this cascading leverage.  For example, if you focus on individual user behavior and try to add zeros to key user-based metrics, you’ll increase the metrics all the way up the chain.  If you happen to find two metrics that impact each other (e.g. you get value out of the growth of X multipled by the growth of Y), you can actually get 100x impact on higher order metrics if you can add a zero to both of them.  Understanding the linkage from the bottom up also helps create better clarity on what to measure and where to invest to grow the business dramatically.

The variable time period is a key aspect of this.  I tend to match the time period up to the natural rhythms so I can remember them – daily, weekly, monthly, quarterly, annually, two years, five years, ten years.  But this isn’t necessary – any time period is fine.  The key is to let the time period vary by metric to which you are adding a zero as this changes the texture of the conversation (e.g. you tend to have a very different conversation when you talk about adding a zero to a metric over the course of a month vs. over a course of a decade.)

So – as you go into your annual planning cycle for 2010, try the “add another zero” approach on some of your numbers. Or, get granular, and try it today on some of your underlying metrics.  Just don’t default into “let’s grow revenue 100% in 2010”.

The Defrag Conference in Denver is just around the corner – November 11 and 12 to be exact.  Eric Norlin has put together a remarkable agenda for this one including an incredible closing panel titled Cluetrain at 10 starring JP Rangaswami, Chris Locke, Doc Searls, and Rick Levine.  This will celebrate the 10th anniversary of the The Cluetrain Manifesto and as far as I understand is the first time in a decade that Chris, Doc, and Rick have shared the stage. If we are lucky, Rick might even bring us some Seth Ellis Chocolates.

I’ll be there the entire time as will my Foundry Group partners.  Last year at Defrag was the first time I spent any time with TA McCann and that worked out pretty well for Gist (at least so far) – who knows, maybe this year will be someone else’s turn.

In the spring just before the Glue Conference, I offered up a group dinner event at a Boulder NewTech Meetup for anyone in Colorado that attended.  A bunch of people ended up coming and I never followed through on the event.  I’ve finally started to get my act together – we’re going to do an event in The Bunker (with lots of food and booze) in the January time frame.  As a special bonus, I’m going to open it up to anyone from Colorado that also comes to Defrag (no – you don’t get two events if you went to Glue also, but I’ll give you a hug.)

But wait, there’s more.  Use the discount code “fndry1” to get 20% off of your registration.

One of the challenges of living your life out in the open is signaling where you are going to be.  I’ve struggled with this on and off, tried a bunch of different web services, and have never been happy with any of them.  I’m going to keep trying, but in the mean time I’ve decided to put a calendar up on my blog using Google Calendar.

It shows two things:

1. Which city I’ll be in by day
2. Any public events that I’m attending or speaking at

As with anything “calendar” be wary of time zones.  All the time zones listed here are in mountain time.

Feedback and suggestions about other approaches welcome.

VCs say a lot of stupid things.  I’m guilty of it plenty and whenever someone calls me on it I try to acknowledge and change.  One that I try really hard not to do is say “my company” when referring to companies I’ve invested in – I think it’s one of the most annoying things a VC can say.

I was talking to a VC the other day about a few companies he had invested in.  By the third time he referred to one of the companies as “my company” (as in “My company is working on X”, “My company would like to talk to Company Z about thing Y”) I felt myself starting to react.  I didn’t really have a relationship with this VC, but I knew that he had never run a company (investment banking post college, MBA, then VC). I realized I wanted to stop him at some point and say “dude – it’s not your company – you are merely an 18% shareholder in the business.”  I bit my tongue and had the conversation, but I’ve been thinking about this in the back of my mind ever since.

One of the great lines from TechStars is “It’s your company.”  That’s the way David Cohen and I remind the TechStars’ founders that ultimately all the decisions are theirs – the mentors (and us) are providing data, feedback, thoughts, and insight – but not telling them what to do.  Sure – a lot of our (and the mentors) language is directive (e.g. I just sent an email to a TechStars CEO that said “you should do thing W right now”) but ultimately the decision as to what to do is the CEO’s.

While I’ve got plenty of rights as an investor, I’m very aware that I’m “an investor.” If you are a CEO or an entrepreneur, I can’t imagine anything more annoying than hearing one of your investors refer to the business as “his company.”  Now, if the investor owns more than 50% of the company, I guess this is a legitimate legal perspective, but it’s still an incredibly demotivating position to take.

So – to all my friends out there in VC-land – let’s try to change the language.  Some of the VCs I respect the most – like Fred Wilson – diligently refer to investments they make as “portfolio companies” (as in “our portfolio company X").  I often refer to them as “our investment” or “our portfolio company”.  Regardless of the approach you take, think about the language you use, especially the impact on the people who are working their asses off every day to make “their company” successful.

Sorry if this feels pedantic to you.  It’s now out of my head and on this blog so I can move on.  As someone I love likes to say “my work here is done.”

On the heels of the FCC doing what everyone expected them to do today with regard to Net Neutrality, I thought I’d remind you of the awesome Ask a Ninja on Net Neutrality from 2006.

Yesterday I mentioned my strong support of Net Neutrality.  As part of this, I signed on to a letter from a bunch of VC’s and entrepreneurs to Julies Genachowski, the chairman of the FCC.  Fred Wilson reprinted the letter (he also signed it along with his partners at Union Square Ventures) in his post Net Neutrality.

Not surprisingly I received some emails and had a few conversations with folks that amounted to “I don’t really know anything about this Net Neutrality thing – can you explain it.”  I did my best but after the third time decided to pull together a few public posts that might provide some perspective on the debate.

First, Ivan Seidenberg, the Verizon CEO slamming Net Neutrality.  I have trouble reading this stuff (and am glad I wasn’t at the Supercomm speech) as I just violently disagree with his perspective.  But – it’s useful context.  One thing you’ll notice if you read across a bunch of this is that it’s pretty consistent language from the CEO’s of broadband providers, which is usually a clue as to how politicized this stuff is.

Next, you get a very interesting post from Eric Schmidt (Google CEO) and Lowell McAdam (Verizon Wireless CEO) titled Finding common ground on an open Internet. I’m not sure this post actually resolves anything, but it does a useful job of setting up the conversation and reinforcing the key principles being discussed and debated. It’s also ironic (or perplexing) given McAdam’s statements given the position that Seidenberg takes.

The best article is My chat with Google’s Vint Cerf in the Washington Post.  If you don’t know Vint Cerf, he’s also commonly referred to as “the father of the Internet”  It’s a great, clear interview that expresses the position I support.

I expect there will be an incredible amount of rhetoric around this over the coming months.  Buckle up.

Wow – I guess Web 2.0 is happening somewhere (fortunately I have a delegate there – my partner Ryan McIntyre).  That not withstanding, the tempo of stuff going on today is staggering.  I’m having a blast sitting here in Boulder just trying to stay mildly ahead of all the stuff flying around.  I thought I’d share some of it with you in case you need a fifteen minute break like I do.

Angels Weigh In on Net Neutrality: The WSJ has an article talking about the letter a bunch of VCs (including me and my partner Jason Mendelson) sent Julius Genachowski in support of Net Neutrality.  I’m seriously bummed out that my good friend and Representative Jared Polis is opposed to Net Neutrality – if you are in Jared’s district (or any district) fill out the FreePress Save the Internet petition and have it sent to your congresspeople. (update: it looks like according to the OpEd that Jared wrote yesterday that he supports Net Neutrality.)

Incubating Change to Immigration Law with the Startup Visa Movement:  Mark Hendrickson over at TechCrunch has a nice post up on the Startup Visa Movement.

Lijit contributes analysis to Technorati State of the Blogosphere 2009: If you are a stats geek, Lijit has some great info for you including Search Engine Referral Data (some of it is surprising), average blogroll size, the impact of Twitter, and some special ad tag info.

When you need an “app for that”, Slice of Lime can build it: My friends at Slice of Lime are now building iPhone apps built on the NewsGator TapLynx framework (more on that soon).  If you’d like to carry me around in your pocket, give the Foundry Group iPhone app a try.

Gowalla + Foundry Group: I like to play with Gowalla.  I like it so much, that they created a special icon for the Foundry Group spot.  That’s one (very effective) way to get my attention.

Music Hack Day Boston: Ian Rogers, the CEO of Topspin Media point this out to me.  It’s happening on 11/21 and 11/22 in Boston at Microsoft NERD and includes plenty of friends (such as Harmonix, Sonos, and Boxee).  If you are into music + tech don’t miss it.

GoogTweetBing: Yeah, you read it hear 3,412,413th.  Google+Twitter and Bing+Twitter.

I just punked my partner Seth (I expect he’ll figure it out before he reads this) and had my first good run in about 30 days.  Now if the sun would come out I’d be uber-happy.  Back to work.