A Sack of Seattle

Being right and wrong at the same time about Judy's Book

2009-12-18T13:22:29-08:00

I received emails from 2 of my former investors this week.

Brad Feld wrote me:

Re: you were ahead of your time

It took Google a while but they finally built Judy’s Book. At least the data side.

Brad

2) Chris Ackerley wrote me:

re: Google to scoop yelp

Click here.

Chris

Chris sent me an article from Fox news speculating that Yelp had $30MM in revenue and might be valued at $500MM. If you heard that sound -- it was me swallowing hard or saying WTF.

This start up stuff isn't for the faint of heart -- and it's an easy game to play in the rear view mirror. I'm going to sleep on this one and write about some new lessons learned -- they just keep coming !!

TechStars is coming to Seattle 2010

2009-12-16T14:14:00-08:00

I'm happy to publish the press release. I'm super excited about this! I think this is a great thing for the Seattle Startup community!

TechStars Expands to Seattle

TechStars announced today that it will launch a Seattle program in the fall of 2010, with Seattle-based entrepreneur and investor Andy Sack as Executive Director. TechStars is a mentorship-driven, three-month-long "startup boot camp" for software entrepreneurs that typically receives hundreds of applications for 10 spots. The selected companies receive up to $18,000 in seed funding, three months of intensive mentorship from successful entrepreneurs and investors, and the opportunity to pitch to angel investors and venture capitalists at the end of the program.

Sack is already well-known on the local startup scene as co-founder and Managing Partner of Seattle-based seed fund Founders' Co-op, guest lecturer in entrepreneurship at the University of Washington's Foster School of Business, and host of the weekly tech meetup Seattle Open Coffee.

"We believe that TechStars can energize the startup community in Seattle in a unique way," said Sack, who had previously served as a TechStars mentor in Boulder and Boston. "Having experienced it up close in Boulder and Boston, I am excited about working closely with first-time entrepreneurs and involving the entire community in building 10 new companies literally from the ground up, many of which have the potential to change the technology landscape in important ways."

The leading venture investors in Seattle have committed their support and also will act as mentors to TechStars in Seattle, including Bezos Expeditions, Buerk Dale Victor, DFJ, Founder's Co-op, Ignition Partners, Madrona Venture Group, Maveron, OVP, Second Avenue Partners, Trilogy Partners, WRF Capital, Voyager Capital, and Vulcan Capital. Boulder-based venture capital firm Foundry Group, the Director of The Center for Commercialization at the University of Washington, and many prominent angel investors also have committed to supporting the program financially and as mentors.

"It's incredible to see the support TechStars has engendered from the venture and angel community in Seattle," said Greg Gottesman, Managing Director of Madrona and a mentor for TechStars. "So many key investors and entrepreneurs have raised their hands and said we want to make this effort successful, and we're willing to put our time and resources behind it. If community support is an indicator of where this program is headed, we literally could not have had a better start."

Mentors for TechStars Seattle include Alex Algard (White Pages), Rich Barton (Zillow), Adam Brotman (Starbucks), Adam Doppelt (UrbanSpoon), Marcelo Calbucci (Seattle 2.0), Chris DeVore (Founder’s Co-op), Geoff Entress (Voyager), Michelle Goldberg (Ignition), Greg Gottesman, Steve Hall (Vulcan), Steve Hirsch (Natural Village), Josh Hug (Shelfari), Ben Huh (Cheezeburger Holdings), Nathan Kaiser (nPost), Glenn Kelman (Redfin), Shane Kim (Microsoft), Dan Levitan (Maveron), Melinda Lewison (Zefram/Bezos Expeditions), Andy Liu (BuddyTV), Ethan Lowry (UrbanSpoon), Bill McAleer (Voyager), Jamie Miller (Blinkx), Josh Petersen (43 Things), TA McCann (Gist), Patrick O'Donnell (UrbanSpoon), Linden Rhoads (Center for Commercialization at the University of Washington), Dave Schapell (TeachStreet), Jonathan Sposato (Picnik), Katie Thompson (Trilogy), and many more. The full list of TechStars mentors for the Seattle program as well as the national mentor list are available on the TechStars website.

Applications for the Seattle program will open in May. You can learn more about TechStars at http://techstars.org.

About TechStars

TechStars was founded in 2007 by Boulder-based serial entrepreneur-turned-investor David Cohen and venture capitalist Brad Feld. TechStars has operated in Boulder for three years and in Boston for one year. Since inception, TechStars has supported 39 companies and approximately 75% have subsequently received follow-on financing from outside investors. Several companies that have emerged from TechStars have already successfully exited to notable acquirers such as AOL and Automattic (WordPress). The most recent batch of companies resulted in seven VC-led follow-on funding rounds and three additional angel-led rounds. TechStars companies attract the attention of seed-stage investors nationally.

My podcast about angel investing

2009-12-15T14:05:58-08:00

You can listen to my recent interview here

Comment lurkers playing SEO games

2009-12-15T06:50:00-08:00

This comment came from Disney World Vacation Rentals:

"Its really good to see this blog,you have nice information about vacations at Disney.People who are looking for hotels there,you really have good material for them. I got valuable links. I will like too see this blog again."

For those of you who don't know -- this firm is trying got get link value from my blog to their website. Yes their attempt is weak and I didn't publish their comment but the game they're playing is very real.

The value of the first position on Google is approximately 5x

2009-12-14T00:08:00-08:00

Congratulations to Cooler Planet -- the social media and energy efficient web site tat I invested in 2 years ago. Just this past week, Tom Staples and gang managed to get their web site on solar power to become #1 on Google for the search term Solar Power. Check out the traffic graph below. On the fist week of being in that position, organic traffic has increased about 5x! Also, check out another one of Cooler Planet's sites on Solar Panels .

Check out my post on Seattle 2.0 today on Tiger, Twitter, and the everyday celebrity

2009-12-11T10:16:27-08:00

Here's the link

You've got to find what you love - Steve Jobs commencement speech

2009-12-10T19:40:36-08:00

This has been circulating on twitter. It's awesome. Read the whole thing. I didn't write it -- Steve Jobs did.

You've got to find what you love,' Jobs says

This is the text of the Commencement address by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, delivered on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't interest me, and begin dropping in on the ones that looked interesting.

It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together.

I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.

My third story is about death.

When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something.

Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now.

This was the closest I've been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

3 years of startups is like 10 years of marriage

2009-12-09T09:06:05-08:00

I had coffee with a young entrepreneur that I've become quite a fan of. This particular entrepreneur, age 28 (best guess), started his company almost 2 years ago. His business originally was an online marketing and promotions company aimed at the college market. After about 6 to 9 months, he realized that business wsn't going to work and started to marketing and promotions on twitter. His business has continued to evolve -- as it should. I met him about 4 onths ago and he was "rudderless". He didn't know what he wanted his business to be when it grew up. He came to the coffee with a piece of paper with 5 very different strategic opportunities on it. The common theme: all were based upon twitter. He was thinking about customer service, lead generation, and marketing business all using twitter. I told him he had to decide what he wanted his business to do.

Well, at yesterday's coffee, he articulated for the first time a business that could be a business. Since the last coffee, he's met with lots of customers and gotten input and has figured out what he thinks he could sell NOW. He's realized he needs a "need to have" not a "nice to have" product. I don't know if he's right but it sounded directionally credible to me. That's Good. He knows what business he's building.

And now is where startups become hard. He's tired and his cap table is a bit upside down. He has 2 other people that have been working with him. They've taken little to no salary for 2 years. They raised an initial 300K but most of that is spent. They now spend 10K per month in total expenses including salary for 3 peopel (if you call it that). I told him founder weariness starts to set in around the 2 year mark and really kicks in around the 3 year mark. I told him it's a bit like what happens in marriages around the 7 to 10 year mark (for me it was 10 years). Things get REAL and get hard. The fantasy and dream of starting a business give way to the reality of no salary and limited success. This is when most people either push through or bail. He seems prepared to push through but....

His cap table is kind of upside down. He's raised 300K in a convertible note that assumed he'd raise a venture round in 12 months. Well, the venture round never came. The 300K is all from family. His dad recently agreed to give him 50K more into the same instrument. The problem is that when he makes traction in his new business and goes out to attract money for it...he's going to either get massively diluted himself or need to deal with those shareholders and cram them down.

I had a lot fo respect for him. I hope he succeeds. It's stories like this that are the real startups. We all dream about building the next Facebook, Google, or Twitter-- but mroe often than not success comes more slowly and with greater challenges and difficulty. Start ups are hard. They're not for the faint of heart. And capitalism isn't kind.

A Thousand Word Tiger Woods Post

2009-12-03T08:56:41-08:00

Here's the audio message too if you haven't heard yet. And here's the remixed version!

In this case, A picture and a voice mail are worth a thousand words. I admit it -- I am fascinated by this whole store.

Rookie entrepreneurial mistake or professional move? Probably both

2009-12-02T11:45:46-08:00

I have been talking to a potential investor in one of our deals and we were talking about syndicating the round to other institutional investors. He said he wanted to have a say in who the other investors were. I told him I understood this conceptually...but specifically, what did he think about investor x....and I gave the name of the investor. He said he didn't see a problem if x wanted to invest. Then he followed that up with the question : "so who else are you talking to" and I answer "y and z" and actually gave the names of firms -- I'm leaving the names out here to protect the innocent) The conversation continue for another 30 minutes.

On the way home, I was beating myself up for telling him the names x, y, and z. I told him for a simple emotional set of reasons: I like him, trust him, and feel like he's going to be a lead investor and so wanted to treat him like one. In that way, answering his questions, theoretically advanced our relationship and was a pro move. But he is not yet the lead investor -- and I just gave him the names of some of the people that I've been talking to and that information in no way can help me. One of the first lessons I learned in raising capital is don't tell the investors who else you're talking to. It's raising money lesson 101! What a rookie mistake.

Since that conversation, I actually talked about whether this was a mistake with the investor -- I'm not overly worried about it and it probably was both a mistake and a pro move. If he ultimately invests, then it was a pro move. If he doesn't, I'm sure I'll view this as one of my errors!