bijan sabet

Baba O’Riley - The Who Forgive me for the back to back...

Mon, 09 Nov 2009 06:00:00 -0500

Baba O’Riley - The Who

Forgive me for the back to back songs from The Who. But last night I saw Roger Daltrey and Simon Townshend rock the House of Blues in Boston. So many great songs, one after another. Roger blew us away with “Young Man Blues” and Simon’s “Going Mobile” was just awesome. But there was nothing like a large crowd singing at the top of their lungs:

“Don’t cry / don’t raise your eye / It’s only teenage wasteland ! “

Love Ain’t For Keeping - The Who I’m going to the...

Sun, 08 Nov 2009 07:02:25 -0500

Love Ain’t For Keeping - The Who

I’m going to the House of Blues tonight with a few college friends to see Roger Daltrey tonight. I can’t wait.

Myers + Chang

Sun, 08 Nov 2009 06:58:34 -0500

Last night Lauren and I went to Myers + Chang in the South End.

It was absolutely awesome. Food was delicious, lively atmosphere and service was great.

We had a tough time picking from the dinner menu because everything looked good. We ended up going with the fresh rolls, Chinese sesame cucumbers, spicey brusells sprouts, edamame and celery slaw, and a delicious cod. For dessert we decided to keep eating and had the banana creme caramel w/black and white sesame brittle (which was amazing).

We also met Joanne Chang who is the co-owner. She was founded Flour down the street which is my favorite bakery in the city. Joanne was very nice and found out when we got home that she’s also on twitter. We didn’t meet her husband Christopher Myers but he also co-owns the restaurant Radius in town.

I like that she’s using Twitter to reach out to folks like me that visit the restaurant but also to tweet about other stuff happening at the restaurant like this :

Besides crazy waits, only snafu was 4top in @7 sayg they made ressie 2day-but book full 4 few days now, we didn’t have, they walked out po’d (via @myersandchang)

How’s that for authenticity.

Go check out Myers + Chang. I know we’ll be back.

Meet Me On The Equinox - Death Cab For Cutie I’m not into...

Sat, 07 Nov 2009 06:00:00 -0500

Meet Me On The Equinox - Death Cab For Cutie

I’m not into Twilight but this soundtrack is mighty fine.

Stock options: vesting & change of control

Fri, 06 Nov 2009 10:53:00 -0500

Fred has a post about option pools and their impact on valuation this morning. It’s a great post and will be very helpful to many folks without a doubt. I share the same point of view and it’s one of many reasons I like co-investing with USV.

Once you set up a pool there are some typical and different ways to structure the terms and rights associated with them. There are number of issues but for this post I want to talk about vesting & change of control.

Vesting

Vesting is important for retention but more importantly it allows the company to put the equity in the hands of the folks that have put in significant time & value into the company.

We have a vesting schedule with our team at Spark Capital and I’ve had a vesting schedule everywhere I’ve worked previously.

Since startups require a fairly long time to create & build the company most options have a 4 yr vesting schedule (or less especially if the team has been working for some time) with some sort of initial hurdle period - also known as a cliff.

The structure I’ve seen the most is one that requires the employee to work at the company for a year before vesting any options. At the one year anniversary they vest 1/4 of their option grant on the spot. After that they vest the balance of their options on a monthly basis.

I’ve seen cliffs as low as 6months and in some cases I’ve seen zero cliff. But the latter is extremely rare and I don’t like it much.

Change of Control

This is a term that describes what happens to the employee vesting schedule if the company is acquired by another company.

Let’s say you work at a company for 2 years, vested half of your options, and the company is acquired.

If the company option plan doesn’t have a change of control provision then either:

a) everyone lives with their original deal. You own what you vested. If you remain with the new company you vest the balance as you continue to work

b) a new deal is cut between the company/employees and the acquirer. The terms become jump ball at that point. New compensation, new vesting, retention bonus’, etc.

Founders like to have some sort of change of control acceleration. I’ve seem partial or full acceleration upon a change of control. That means at the time of the company sale some/all the invested options vest.

The challlenge with the change of control acceleration clause is that the buyer (acquirer) most of the time is buying the company because of the people that created the value. So if the employees are fully vested at the time of sale it will impact the purchase pice of the company.

One compromise I’ve seen is a “double trigger change of control” clause. That means the acceleration only happens if the company is acquired and the employee is fired without cause.

It’s a reasonale compromise. Although the double trigger will impact price and will make the acquistopm a bit more complex. The other issue is that it sets precedent. If you give it to yourself as founders and your senior team this right, than most likely you will have to give it to everyone in the company. You don’t have to of course but it can become complicated when everyone has a different set of terms.

Keep it clean & simple

I believe startups should adopt a clean and simple stock option plan. The cleanest way to do this is to make sure everyone has the same terms and rights (not everyone will have the same strike price which is expected and fair). And its a plan that you can live with as the company grows and won’t cause complexities in the future.

Photo

Thu, 05 Nov 2009 22:09:49 -0500

Jeter and Matsui (via John Maloney)

Thu, 05 Nov 2009 14:19:33 -0500

Jeter and Matsui (via John Maloney)

Why I'm going to get the Droid

Thu, 05 Nov 2009 12:41:00 -0500

At this point, there are plenty of opinions about the Droid’s hardware, software and user experience.

Some people love it. Some people don’t. Some have mixed feelings.

But I think there is only way to see if I’m going to like it. And that is to try it myself. Reading reviews isn’t going to help me.

So I’m going to swing by Verizon tomorrow and give it a try for a week full time and see if it works for me.

That’s the only way to know for sure.

At The Bottom Of Everything - Conor Oberst, M. Ward & Jim...

Thu, 05 Nov 2009 06:42:41 -0500

At The Bottom Of Everything - Conor Oberst, M. Ward & Jim James

Still high from Tuesdays show.

Yes!

Thu, 05 Nov 2009 06:35:00 -0500

Yes!

I am still over the moon after seeing Monsters of Folk last...

Wed, 04 Nov 2009 06:35:06 -0500

I am still over the moon after seeing Monsters of Folk last night at the Orpheum. So many great songs back to back. I loved the Conor Oberst & M. Ward duo singing “Smoke Without Fire” (this video is from a different show).

Jim James blew us away and so did M. Ward last night. Conor Oberst has a special place in my soul. It was an awesome show.

Dream - Sasha Yatchenko On Sunday, Lauren and I and the kids...

Tue, 03 Nov 2009 06:56:00 -0500

Dream - Sasha Yatchenko

On Sunday, Lauren and I and the kids were in Harvard Sq for dinner. After dinner we were walking around and we saw this young woman singing her heart out on the street with a keyboard. My girls ended up saying hi to her and we bought her CD. There is a lot of Regina Spektor in her voice.

Do DVR users watch ads ?

Tue, 03 Nov 2009 05:37:00 -0500

Like many folks, we’ve had a DVR for over 10 years in our house.

The first DVRs that came from WebTV Networks and then TiVo brought us a new user interface to the old set top box guide.

In addition to a new UI, the DVR brought something else. As I wrote last week the DVR was more than just a glorified VCR. It was something completely new and refreshing. Beyond season events or one click recording, I could actually pause live tv. Or I could go back 30 seconds. Or I could record a show and then start watching the show 25 minutes later so I could catch up in real time by skipping all of the ads.

The only live stuff we watch is sports like the World Series that is going on at the moment. Other than live sports, we watch everything from disk [actually live content is also buffered on the disk but I digress :) ] — and we skip the ads entirely. Lauren and I actually compare how well we can time the fast forward button with the end of the commercial break.

These days over 30 million US households have a DVR. That DVR is either purchased at retail (TiVo) or users lease a DVR from their satellite/telco/cable operator. Consumer pay extra for our DVRs because the value prop is clear.

This Sunday, the New York Times had an article that caught my eye - DVR, Once TV’s Mortal Foe, Helps Ratings. In the story, Nielsen says that 46% of DVR owners watch commercials during playback.

That is in contrast with TiVo’s recent research which states that 84% of commercials aren’t watched. There is another important data point shared in that report:

“As we see every month, there is little correlation between the top rated programs and top viewed commercials”

Essentially, if you are buying TV ads on top tier shows like LOST, CSI and 30 Rock, you are overpaying since +80% of those ads are being skipped entirely in the 30million households with a DVR. And that number is only growing.

Many will remind me that the TV industry is huge with big ad dollars, a proven business model and great content. I agree — but it seems like traditional monetization models need to evolve. And even for live television (where I’m forced to watch the ads), well, the ads aren’t relevant or targeted. How many times did Fox show me the same Chevy ad during the ALCS and World Series. They could show it to me another 100x and I’m still not buying a Chevy.

At some point the set top box needs smarter software. It needs to tell the content owner what’s going on. It needs to tell the advertiser what’s going on. And it needs to keep the users needs front and center.

Not surprisingly, I think the web (mobile and PC) are going to be a huge part of the solution. Two way networks, rich analytics, modern advertising platforms, search, discovery and social nets. And that’s just the tip of the iceberg.

My Top 5 Artists (Week Ending 2009-11-1)

Mon, 02 Nov 2009 16:11:50 -0500

My Top 5 Artists (Week Ending 2009-11-1):

Imported from Last.fm Tumblr by JoeLaz

Scenic World - Beirut I love this band.

Mon, 02 Nov 2009 06:00:00 -0500

Scenic World - Beirut

I love this band.

Exit Strategy

Sun, 01 Nov 2009 20:46:00 -0500

When I meet an entrepreneur for the first time I like having a conversation about the idea or see the product (or prototype) in action or even a “chalk talk” for those of us that are more visually inclined.

I’m generally not a fan of slides, especially if it’s an early stage company.

But if the founder wants to use slides then I usually go along. Founders should use whatever tools they feel most comfortable.

The one thing I am allergic to is when a founder includes a slide that says “Exit Strategy” and then has a few bullets that says “IPO or sell company to company a, b or c.”

Oy.

An early stage company should be thinking about how to create something great and how they want to get there. How to build value. Not think about exits.

Now most VCs that I know feel the same way about that dreaded slide. But there is a topic where I’ve seen disagreement amongst successful VCs related to the concept of exits when considering an early stage investment. Some VCs will think about who might be the potential buyers of the company.

They do this analysis upfront because most companies never go public. So they want to know if there could be multiple buyers of a company someday. If there aren’t any potential buyers then they it might impact the VCs decision.

I don’t see the world that way.

If you build a great company then you don’t have to worry about exits because you will have many options (e.g. public, get profitable & stay private, secondary offering, sell the company).

I believe there have been many exits where the actual buyer wouldn’t have been on any list at the time the initial venture investment.

This is just speculation on my part but at the time of the initial investment in the following companies who would have guessed the ultimate buyer:

-Flip Video (Cisco)

-Danger Research (Microsoft)

-Daily Candy (Comcast)

-Sling (Echostar)

-StumbleUpon (eBay)

The list goes on.

Yes, you can imagine the strategic rationale for those deals. But not on day 1 of the venture investment. The world just moves too fast to try and predict this stuff. And it’s not the most important question anyway.

We would all agree, the real question is whether a particular team & product can make something special.

Update: A few folks have reblogged this post and disagreed with me. To be clear, I never said exits aren’t important. I just don’t believe it should be something founders or VCs should think about at the start.

Roll Away Your Stone - Mumford and Sons David Noel turned me on...

Sun, 01 Nov 2009 06:00:00 -0500

Roll Away Your Stone - Mumford and Sons

David Noel turned me on to this band a month ago and they’ve been on heavy rotation since.

My favorite part of the Yankees win last night

Sun, 01 Nov 2009 05:55:00 -0500

…was when Andy Pettitte hit a single and brought home Nick Swisher.

That was awesome.

Ocean of Noise - Arcade Fire Magical.

Sat, 31 Oct 2009 06:30:00 -0400

Ocean of Noise - Arcade Fire

Magical.

Thinking about App Stores

Fri, 30 Oct 2009 11:41:00 -0400

These days there are no shortage of App Stores. iTunes, Android, Blackberry, Palm, OneForty, Boxee and there are many more still and many more coming.

My favorite app store model is the open one like Android and Boxee. You can install an app from their app store or from the open web.

Having said that, the app store model provides important value. For the users, the app store provides aggregation, search and reviews. For developers, the app store provides distribution and economics.

The key requirement for a successful app store is a vibrant developer community.

The best thing about Facebook’s platform for third party apps is that they are great for users and developers can make a real business from the platform. Good for users + economics for developers is great for Facebook.

I was in a cab with Fred and Andrew last week. We were talking about how some apps can generate huge velocity on Facebook. Fred mentioned the three things on Facebook, newsfeed, requests and inbox tied with the social graph, are the keys to that distribution network.

That is absolutely correct and other App Stores can learn a lot from this.

Imagine if you checked into iTunes and saw a your friends or folks you follow in a newsfeed or timeline:

Mo Koyfman just downloaded Tweetie2

Brad Feld just purchased MLB.com

Lauren Sabet likes Word Wrap

And with a single click you could install or buy that app.

It’s a simple example but those viral functions don’t really exist on any other app store that I’ve seen. But I suspect they will shortly.