Three Early Lessons From My Dad by Brad Feld

Three Early Lessons From My Dad:

by Brad Feld

Last night I had the pleasure of talking at a dinner at Emily White’s house. Emily is on the board of the National Center of Women & Information Technology with me, is ex-Google, currently at Facebook, and with her husband Brian are amazing hosts. We had a fascinating group of NCWIT board members as well as a bunch of local entrepreneurs and members of the bay area entrepreneurial ecosystem who had a connection either to Emily or to me. The environment, food, and evening was delightful, and I led a discussion about a wide variety of topics after doing a 30 minute space jam in answer to Emily’s lead off question of “So Brad, what’s on your mind?”

We covered a lot of stuff around entrepreneurship, creators, the magic of doing things, the importance of asking “why”, and my belief that we are in the midst of a massive societal behavior shift. One of the questions that a long time friend asked was something like “My daughter is in high school and worries about the path she needs to be on to make sure when she gets out of college that she gets a good job. If you were me, what would you tell her?”

I don’t have kids so I don’t really feel qualified to answer this from a parents perspective, but I answered it with a story of three key things my dad said to me between the ages of 10 and 17 that had a profound impact on what I’ve done and how I live my life.

Age 10: You can do anything you want: My dad is a doctor. He came home for dinner every night but would often go back to the hospital in the evening (and on weekend) to do rounds and visit patients. Until I was 10 I’d often go with him. I loved hanging out with him, would bring a book, and plop down at the nurses station and read while I waited for him to go about his business. At 10, I decided I had no interest in being a doctor. I didn’t like the way hospitals smelled, I didn’t like the noise and the chaos, and I lost interest in all the doctors I was meeting. I remember telling my dad that I didn’t want to be a doctor. I blurted it out – think of a very nervous 10 year old just spitting out “Dad – I don’t want to be a doctor.” I remember my dad looking me in the eye and saying very clearly, “Brad – that’s ok – you can do anything you want to do.”

Age 13: We didn’t want to discourage you so we were supportive: When I was 10 – 13 I was a serious tennis play. I played all the time and was on the Texas junior tennis circuit. I was pretty good – consistently getting to the quarterfinals in singles and occasionally the semifinals. When I turned 13 I bought a computer for my bar mitzvah. I also hit puberty and discovered girls. I lost interest in tennis. Recently I was talking to dad about this and wondered what he thought at the time. He said that he and my mom were supportive of my tennis, but were relieved when I decided to quit playing. They were sick of schlepping me around Highway 80 and other places in Texas to spend the whole weekend watching me play, scream and yell, throw my racket, and then mope when I eventually lost. He said “I didn’t want to discourage you, so we were supportive, but we were relieved when you went down a different path.”

Age 17: Give it a year: My first two months at MIT were awful. I was homesick – all my friends, including my girlfriend, had gone to UT Austin. I got a 20 on my first physics test and went in my room for an hour and cried. I was completely overwhelmed by Cambridge and Boston – the people, the dirt, and the hustle of the city. The fraternity I lived in was filthy. The early winter chill startled me. And I thought Dallas, where I grew up, was the greatest place on early. My parents came and visited me in mid-October for a weekend. We were walking around on a crisp fall day in Concord, MA when I told them I hated MIT and wanted to drop out and go to UT with all of my friends. We talked to for a while – with my parents mostly listening – and then my dad said “You’ve only been here two months. Give it a year. If you still hate it after a year, switch to UT. But give it enough time to really understand it.” I ended up staying at MIT, getting two degrees, dropping out of a PhD program (I finally got to achieve my desire to drop out), and – while many of my days at MIT were brutal, I ended up loving the experience and treasure the impact it has had on my life.

I’m really lucky to have parents who have been awesome and incredibly supportive of me. When I reflect on the things that shaped the path I’ve taken, it was often short little one liners like these at a critical moment. My dad was just magical with his timing and his message. I can only hope I can be as good as he is.

Giving Feedback - By Prof Craig Wortmann

1. Be ‘present’ to every interaction you have with people

2. Square your shoulders toward the person you are talking to

3. Make eye contact

4. Don’t think it’s weird to touch someone’s shoulder or arm when interacting

5. Speak in concise sentences that you’ve thought through

How Convertible Debt Works by Brad Feld

How Convertible Debt Works:

Last night I gave a talk hosted by SVB at their Palo Alto office. It was part of the “Never Ending All Old Is New Again Venture Deals Book Tour.” I had a ton of fun talking to and answering questions from about 75 entrepreneurs who – at the minimum – enjoyed eating the great food and wine that SVB provided on a luscious evening in Palo Alto. Oh – and I signed a bunch of copies of Venture Deals.

Several questions came up about Convertible Debt. We touch on it in Venture Deals but realized that we didn’t cover it in enough depth so Jason recently wrote a Convertible Debt series on Ask the VC. The series is now complete – here are the links to the posts in order.

• Convertible Debt Series


• Convertible Debt – The Discount


• Convertible Debt – Valuation Caps


• Convertible Debt – Conversion Mechanics


• Convertible Debt – Conversion In A Sale Of The Company


• Convertible Debt – Other Terms


• Convertible Debt – Warrants


• Convertible Debt – Early Versus Late Stage Dynamics


• Convertible Debt – Wrap Up

If you feel like we missed anything, or got anything wrong, or were confusing in our explanation, please chime in on the comments on the post. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents.

As a bonus to the evening, I got some direct, constructive feedback from one of the attendees via email later that night. While the “thank you” and “good job” notes are nice, I only learn when someone criticizes me (hopefully constructively, but I can handle it in any form.) The feedback was:

May I make a constructive criticism regarding your talk tonight? Your answers to audience questions tend to be overly long and rambling…..you “overanswer,” to invent a word. You start strong and respond right to the essence, but then your focus blurs and you keep taking verbal baby steps away from the thought stream. If you trim a minute or two off each answer, you can call on more people and hear more questions, which sends more people home happy. I think if you self-critique a video of yourself in a Q&A session, you’ll arrive at the same conclusion.

It’s a good suggestion. I often try to provide additional context to the question, but it sounds like – at least for one person – I went off on a few space jams that weren’t additive. I love the phrase “overanswer” – it’s a lesson from TV interviews 101 (e.g. just answer a question – any question – quickly). Something to ponder as I continue the Never Ending All Old Is New Again Venture Deals Book Tour.

Oct 9, 2011 (yesterday) Building A Company vs Building A Business from A VC by Fred

Matt Blumberg, CEO of our portfolio company Return Path, wrote an interesting post last week about the differences between building a company and building a business.

I've been an investor and board member of Return Path for over a decade and I've witnessed the company fail with its first product/business and then through a series of acquisitions build a very strong business and company. Matt and his team built the company first then the business, which is backwards, but it worked.

Matt is right that most of our portfolio companies build the product first, then the business, then the company. And building a company is often difficult for founders because they are so focused on the product.

Roelof Botha, a leading VC with Sequoia, once gave me a great piece of advice in helping founders start to focus on company building. He said founders should think of their company as a product and build it and shape it with the same passion and care. I've taken that to heart and passed it on a few times.

No matter how or when you do it, building a company is a required step to sustainability. Positive cash flow is not enough to keep the company independent and solvent. You need a culture, systems, and processes to keep everyone happy and functioning well. That is company building and Matt and his team are among the best I've seen at it.

The rules for building a cloud commerce community

September 29, 2011 | Kent Parker

Add a Comment

inShare

Amazon.com. eBay. Facebook. LinkedIn. Many of us rely on these online communities to manage our personal commerce, relationships and finances. Now, with increasing frequency, companies are demanding similar tools to manage their business.

A decade ago, the Internet was viewed primarily as a consumer application, with limited viability for critical business processes. Today, nearly every company is using it to help run their business in some significant way.

What brought about the shift?

Certainly, the Internet has evolved — it’s faster, more secure and proven. But the business world is also a much different place today. As business has become more global, the traditional enterprise as we know it has morphed into something new called the extraprise.

In the extraprise, it’s not just about executing a process within a company, but also across the entire value chain — especially outside the four walls of the enterprise. It’s not just about the intelligence within an organization, but also the extended intelligence networks that are developed through communities.

This new approach to business commerce won’t be driven by enterprise applications. Companies have invested billions in such technologies to simplify tasks like developing proposals or taking orders. Why? Because commerce happens between companies. And the closed systems and processes that have long been the domain of installed enterprise applications aren’t designed to accommodate this fluid company-to-company, extraprise activity.

How do you build the cloud community?

So what does it take to build these networks and communities to drive and support collaborative commerce? A whole new way of thinking and operating. Performing as a cloud commerce community requires a whole new set of rules:

Break down application silos: Participants in business commerce networks want to acquire capabilities – not purchase tools or application models as they did in the legacy software era. To enable this, vendors must break down product-oriented boundaries among applications and make development a more intertwined process.

Make innovation a constant: Innovation and capabilities are now expected as part of business commerce networks, not as a product tool to be purchased and installed. The concept of innovation extends to reporting, hosting, monitoring and security and must be frequently streamed.

Focus on quality: While innovation is key, quality trumps all other considerations when it comes to business networks. Remember the Golden Rule: “Thou shall not break anything.” And when it comes to business commerce, buyers and sellers demand greater integrity. They expect to be able to conduct complete transactions without disruption or any compromise of their data. This also means scrapping traditional notions of software availability in favor of a more comprehensive definition of business commerce availability.

Stay agile: Constantly evolving needs and shifting priorities, dictated by a more connected, globally engaged business environment, have made speed the new market requirement for success. And this means organizing to operate in a more nimble and flexible manner than ever before.

Overhaul customer support: Participants in business commerce communities have outsourced much of what used to be the function of their internal IT departments to the network provider. As a result, assistance with software and non-software challenges as well as process enablement to drive more efficient and effective business commerce is not only expected, but required. And in an always-on community, customers demand immediate, proactive responses.

Redefine customer relationships: In the legacy software product world, customer relationships were episodic. Upon “go-live,” the relationship was essentially considered complete. In a network-driven cloud community, customers and other participants require more continuous, ongoing assistance.

Lots of companies are reaching for the cloud. It’s a more scalable, efficient way to do business on a global basis. It requires no software, hardware or resources to deploy. Time to value is near immediate, and results can be astounding.

But to reap these rewards, organizations must transform in ways that enable them to deliver products and services that meet a completely new set of business challenges and customer needs. Otherwise, the benefit of the cloud will remain nothing more than a dream.

Kent Parker is chief operating officer of Ariba. He submitted this story to VentureBeat.

[Image via Jozsef Bagota/Shutterstock]

Next Story: Review: Quora’s new iPhone app is great for casual and experienced users
Previous Story: Box.net founder Aaron Levie is poised on the edge of startup stardom

Finding Your Focus: Self-Discipline vs. Passion

Finding Your Focus: Self-Discipline vs. Passion

(Thomas Jefferson)
“The end of democracy and the defeat of the American
Revolution will occur when government falls into the hands of
lending institutions and moneyed corporations."

Raising trillion dollars by taxing the rich is the solution? Think about which one is sustainable - increase money inflow or decrease governments operational inefficiency? I wonder what Mr President's advisers are thinking.

Who is ahead of the game? - Chinese War for No. 1 Spot

I read an article recently that claimed that that USA is more than No. 1 economy in this world and there is no comparison between China and USA. He cited China's medical system, which is at a stage today that USA passed 30 years back. I agree with his hypothesis and I not only think that US did it 30 years back, but USA is still moving in a big way. Recent disruption in Japan raised questions on USA's capabilities for evacuation in the advent of a similar event. Well, look at China. They have only 11 reactors operating and they are constructing an additional 10 each year. Who is overseeing that?

As you can testify using gazillion trivial examples, that USA has taught innovation and governance lessons to this world. Its core strength is the constant infusion of super-brains from all over the world. USA encourages that brain to think and act ahead of time and build innovative systems when the rest of the world is adopting 10 year old technologies and criticizing most technology evangelists.

This should be noted that total no. of nuclear plants in most Asian countries are less than what USA has in one state. USA has adopted nuclear power years back and controlled it well so far in a much broader geography. We should audit those countries first that have almost no experience and trying to do it in one shot. These countries need to first build the credibility that they "care" for human beings more than their reputation by  relaying correct information and asking for help when needed.

Seven steps to better brainstorming

A. Plan

1. Know your organization’s decision-making criteria

Likewise, what constitutes an acceptable idea? At a different, smarter bank, workshop planners collaborated with senior managers on a highly specific (and therefore highly valuable) definition tailored to meet immediate needs. Good ideas would require no more than $5,000 per branch in investment and would generate incremental profits quickly. Further, while three categories of ideas—new products, new sales approaches, and pricing changes—were welcome, senior management would balk at ideas that required new regulatory approvals.  

2. Ask the right questions

Decades of academic research shows that traditional, loosely structured brainstorming techniques (“Go for quantity—the greater the number of ideas, the greater the likelihood of winners!”) are inferior to approaches that provide more structure.¹ The best way we’ve found to provide it is to use questions as the platform for idea generation.

It’s easier to show such questions in practice than to describe them in theory. A consumer electronics company looking to develop new products might start with questions such as “What’s the biggest avoidable hassle our customers endure?” and “Who uses our product in ways we never expected?” By contrast, a health insurance provider looking to cut costs might ask, “What complexity do we plan for daily that, if eliminated, would change the way we operate?” and “In which areas is the efficiency of a given department ‘trapped’ by outdated restrictions placed on it by company policies?”²

3. Choose the right people

choose participants with firsthand, “in the trenches” knowledge.

B. Execute 

1. Divide and conquer - The real action

To ensure fruitful discussions like the one the catalog retailer generated, don’t have your participants hold one continuous, rambling discussion among the entire group for several hours. Instead, have them conduct multiple, discrete, highly focused idea generation sessions among subgroups of three to five people—no fewer, no more. Each subgroup should focus on a single question for a full 30 minutes. Why three to five people? The social norm in groups of this size is to speak up, whereas the norm in a larger group is to stay quiet.

When you assign people to subgroups, it’s important to isolate “idea crushers” in their own subgroup. These people are otherwise suitable for the workshop but, intentionally or not, prevent others from suggesting good ideas. They come in three varieties: bosses, “big mouths,” and subject matter experts.

The boss’s presence, which often makes people hesitant to express unproven ideas, is particularly damaging if participants span multiple organizational levels. (“Speak up in front of my boss’s boss? No, thanks!”) Big mouths take up air time, intimidate the less confident, and give everyone else an excuse to be lazy. Subject matter experts can squelch new ideas because everyone defers to their presumed superior wisdom, even if they are biased or have incomplete knowledge of the issue at hand.

By quarantining the idea crushers—and violating the old brainstorming adage that a melting pot of personalities is ideal—you’ll free the other subgroups to think more creatively. Your idea crushers will still be productive; after all, they won’t stop each other from speaking up.

Finally, take the 15 to 20 questions you prepared earlier and divide them among the subgroups—about 5 questions each, since it’s unproductive and too time consuming to have all subgroups answer every question. Whenever possible, assign a specific question to the subgroup you consider best equipped to handle it.

2. On your mark, get set, go!

After your participants arrive, but before the division into subgroups, orient them so that your expectations about what they will—and won’t—accomplish are clear. Remember, your team is accustomed to traditional brainstorming, where the flow of ideas is fast, furious, and ultimately shallow.

Today, however, each subgroup will thoughtfully consider and discuss a single question for a half hour. No other idea from any source—no matter how good—should be mentioned during a subgroup’s individual session. Tell participants that if anyone thinks of a “silver bullet” solution that’s outside the scope of discussion, they should write it down and share it later.

Prepare your participants for the likelihood that when a subgroup attacks a question, it might generate only two or three worthy ideas. Knowing that probability in advance will prevent participants from becoming discouraged as they build up the creative muscles necessary to think in this new way. The going can feel slow at first, so reassure participants that by the end of the day, after all the subgroups have met several times, there will be no shortage of good ideas.

Also, whenever possible, share “signpost examples” before the start of each session—real questions previous groups used, along with success stories, to motivate participants and show them how a question-based approach can help.

One last warning: no matter how clever your participants, no matter how insightful your questions, the first five minutes of any subgroup’s brainsteering session may feel like typical brainstorming as people test their pet ideas or rattle off superficial new ones. But participants should persevere. Better thinking soon emerges as the subgroups try to improve shallow ideas while sticking to the assigned questions.

3. Wrap it up

By day’s end, a typical subgroup has produced perhaps 15 interesting ideas for further exploration. You’ve been running multiple subgroups simultaneously, so your 20-person team has collectively generated up to 60 ideas. What now?

One thing not to do is have the full group choose the best ideas from the pile, as is common in traditional brainstorming. In our experience, your attendees won’t always have an executive-level understanding of the criteria and considerations that must go into prioritizing ideas for actual investment. The experience of picking winners can also be demotivating, particularly if the real decision makers overrule the group’s favorite choices later.

Instead, have each subgroup privately narrow its own list of ideas to a top few and then share all the leading ideas with the full group to motivate and inspire participants. But the full group shouldn’t pick a winner. Rather, close the workshop on a high note that participants won’t expect if they’re veterans of traditional brainstorming: describe to them exactly what steps will be taken to choose the winning ideas and how they will learn about the final decisions.

C. Close

1. Follow up quickly

Decisions and other follow-up activities should be quick and thorough. But the odds that concrete action will result from an idea generation exercise tend to decline quickly as time passes and momentum fades. communicate the results of the decisions quickly to everyone involved, even when an idea was rejected. While it might seem demoralizing to share bad news with a team, we find that doing so actually has the opposite effect. Participants are often desperate for feedback and eager for indications that they have at least been heard. By respectfully explaining why certain ideas were rejected, you can help team members produce better ideas next time. In our experience, they will participate next time, often more eagerly than ever.

 

Courtesy McKinsey & Company:. Read full article here:

https://www.mckinseyquarterly.com/Strategy/Strategy_in_Practice/Seven_steps_to_better_brainstorming_2767

 

 

How Great Entrepreneurs Think

What distinguishes great entrepreneurs? Discussions of entrepreneurial psychology typically focus on creativity, tolerance for risk, and the desire for achievement—enviable traits that, unfortunately, are not very teachable. So Saras Sarasvathy, a professor at the University of Virginia's Darden School of Business, set out to determine how expert entrepreneurs think, with the goal of transferring that knowledge to aspiring founders. While still a graduate student at Carnegie Mellon, Sarasvathy—with the guidance of her thesis supervisor, the Nobel laureate Herbert Simon—embarked on an audacious project: to eavesdrop on the thinking of the country's most successful entrepreneurs as they grappled with business problems. She required that her subjects have at least 15 years of entrepreneurial experience, have started multiple companies—both successes and failures—and have taken at least one company public.

Sarasvathy identified 245 U.S. entrepreneurs who met her criteria, and 45 of them agreed to participate. (Responses from 27 appeared in her conclusions; the rest were reserved for subsequent studies. Thirty more helped shape the questionnaire.) Revenue at the subjects' companies—all run by the founders at that time—ranged from $200 million to $6.5 billion, in industries as diverse as toys and railroads. Sarasvathy met personally with all of her subjects, including such luminaries as Dennis Bakke, founder of energy giant AES; Earl Bakken of Medtronic; and T.J. Rodgers of Cypress Semiconductor. She presented each with a case study about a hypothetical start-up and 10 decisions that the founder of such a company would have to make in building the venture. Then she switched on a tape recorder and let the entrepreneur talk through the problems for two hours. Sarasvathy later collaborated with Stuart Read, of the IMD business school in Switzerland, to conduct the same experiment with professional managers at large corporations—the likes of Nestlé, Philip Morris, and Shell. Sarasvathy and her colleagues are now extending their research to novice entrepreneurs and both novice and experienced professional investors.


http://www.inc.com/magazine/20110201/how-great-entrepreneurs-think.html

Basics of wines

White wines for sweetness and red for tennics. In order of sweet to dry for white:

Ice Wine
Muscat or Muscato
Gewurtztraminer
Sancerre
Reisling
Pinot Grigio or Pinot Gris
Sauvignon Blanc
Chardonnay

For red wine, I wouldn't classify it as sweet - maybe more fruit forward and/or less tannic, but because the grape skins come into contact with the liquid during the fermentation process, this is why reds are drier than sweet:

Beaujolais
Grenache
Pinot Noir
Shiraz
Zinfandel
Merlot
Cabernet
Petite Sirah
Nebbiolo