Archive for the 'VC' Category

Innovate, Communicate, Collaborate… Don’t Hibernate

Scott Kirsner would make a heckuva marketer or PR person (or history teacher too but that is another matter) if he ever gives up his current gig as a freelance journalist and writer.  For the past several years – both before he relocated to California and upon his return to Boston – he has written blogged and spoken passionately about two things, among many others:

1)      the role the Boston area has played in serving as the “minor leagues” to Silicon Valley by cultivating and growing young talent as well as great small and medium sized technology and Internet companies only to see them get gobbled up by the Big Boys from Palo Alto, Sunnyvale, San Jose, etc.

2)      and the need for New England, Boston and more specifically, Route 128’s academic, technology and venture capital communities to dig deep to try to restore some of the luster we’ve lost to Silicon Valley and other tech hot spots over the years.

Scott’s latest big idea was offered up in his most recent Sunday Boston Globe Innovation Economy column in which he designates June as Innovation Month in New England.  He writes, “We can do a better job of connecting executives who’ve built big, influential businesses with entrepreneurs who are just starting out. We can do a better job helping shaky start-ups find the funding they need to succeed. We can do a better job ensuring that every student who comes to New England to earn a degree has at least some exposure to some of the innovative companies based here, whether through an internship, a company visit, or a classroom presentation from the founder.”

Scott is onto something and he is starting with some really attainable goals. He’s passionately encouraging people to start small – converse, connect, communicate and collaborate.  He’s pushing events, conferences and tweetups as the vehicles for driving more innovation, more idea sharing and more energy around innovation. He is also encouraging people to post their ideas (or links to innovation-related initiatives more people should know about) on the Innovation Economy blog at

As Massachusetts entrepreneurs, business owners, investors, residents, etc. we all have a vested interest in fostering more innovation. Enough with the complacency fear and uncertainty that goes with the current down economy. As Scott and others quoted in that column, get out, get over the “depressions” and do your part to improve our chances at recovery.  Let’s just keep this party going into July, the rest of the summer and the rest of the year.

— Posted by Tim Hurley

60 seconds or less…

Breaking down hot topics in technology, media and marketing for your reading pleasure… in 60 seconds or less.

  • File under, “Really?!”  A charity auction for an internship at the Huffington Post has collected bids as high as $13,000. What’s worse…college grads so desperate for a job that they’ll pay five figures for one, or media companies trying to make their margins by selling internships?
  • Entrepreneurs, fear not! After meeting with more than a dozen Boston-area VCs, Tech Journal South reports that venture funds have available cash to invest, are actively looking for new deals and don’t expect the rest of the year to be as bad as the first quarter.  
  • The Wall Street Journal issues “Social Media Rules of Conduct” for its staffers. Among the rules? Editor approval is required before “friending” sources in Facebook or twitter.  Check out the entire list here.
  • What did you do by the time you were 25? Did you start a company that has generated 200 million users? Were you named one of the The World’s Most Influential People by Time Magazine? Were you ranked one of the richest people in America by Forbes, with a net worth of $1.5 billion? Had you made $240 million off of Microsoft? Well Facebook founder Mark Zuckerberg, who turned 25 yesterday, has checked all those times of his list. I know, it hurts.

— Posted by Melissa Coyle

60 seconds or less…

A new weekly feature breaking down technology, b2b and general marketing news for your reading pleasure… in 60 seconds or less.

  • Twitter has rolled out a new update to its website that includes real-time search, trending topics and a slightly improved user interface. Will Twitter 2.0 be less buggy than the original? Magic 8 Ball says, “Reply hazy, try again.”  
  • According to a recent study, personality may be a more effective prediction tool for media usage than demographics. For instance, sarcastic folks who balk at rules are 60% more likely to be high consumers of media. Can’t wait to see those direct mail/email lists – “Sarcasm & Rule Breaker List, $425 CPM”.
  • Hot or not? Forecasts for mobile ad growth have been reduced, thanks to the current economic climate. But it’s still one of the faster growing ad segments, expected to grow 36% year over year.
  • A slew of recent surveys indicate that the slump’s not as bad as we might think in the tech sector. Among the data, Mass High Tech says 44% off the nearly 700 New England tech companies surveyed  have no plans for staffing changes (up from 35.4% in Q4).
  • First, TheFunded shook up the VC world with its blatantly honest reviews of firms. Now it’s changing the model for start-up incubators with TheFunded Founder Institute, free from on-site meetings and alternative stock compensation plans.
  • Looks like we’re safe, at least for one more Sunday. Does anyone else find it ridiculous that the Boston Globe union was so unwilling to compromise on the lifetime job guarantee issue? Talk about an antiquated mentality.

— Posted by Melissa Coyle

Fear The Valley Of Darkness

Many among us are too young to remember The Stepford Wives, an early 70s movie and novel that chronicled the lives of once independent women turned mindless, follow – the–herd housewives in the fictitious cold coast town of Stepford, Connecticut.

Well fast forward 35 years and cross the country to Silicon Valley. If you agree with the premise of this outstanding piece by Tom Foremski in the Silicon Valley Watcher, a similar phenomenon has unfolded out west as it relates to the VC community. Tom is one of the smartest, yet most grounded (not to mention most approachable) journalists/bloggers in the game today. He shows it yet again with this piece. He’s also a pro in every sense of the word who understands the story is not about him, but about the companies, entrepreneurs, investors and yes, sometimes even the marketers who are making it happen in the tech community every day.

In his latest piece, Tom essentially takes to task not so much the folks at Sequoia Capital, but others in the SV VC crowd who aren’t exactly thinking and acting independently these days when it comes to funding and working with their portfolio companies through this current down cycle. Tom gives Sequoia their props for its considerable influence among the rest of the VC crowd. But he also shows he believes in the next upturn and is urging other investors not to follow the crowd and “act like sheep.”

Tom’s prescription for start ups and the investors that fund them is refreshingly simple:

Think long term – 2-5 years is what matters most to young companies, not what is happening right now.

Don’t just cut for the sake of cutting. Be smart about building your businesses and don’t get bloated in the first place.

It is a great time to be at start up because things will get better; those who have kept or increased their investments in their best people and invested in their brand – through PR, social media, marketing – will emerge in a much stronger position.

One can only hope that if entrepreneurs and their investors are looking to follow someone’s advice it is Tom’s.

Nothing Ventured

Live blogging …..I am sitting in on an interesting (and brutally honest) panel discussion among venture capitalists at DEMO which is being moderated by Matt Marshall, Editor & CEO of Venture Beat called The Changing Venture Model: Making VC Work for Investors and Entrepreneurs. Matt is joined by Chris Greendale, General Partner, Kodiak Venture Partners, Krishna ‘Kittu’ Kolluri, General Partner, New Enterprise Associates, Eric Tilenius, Partner, Maveron.

Matt kicks things off by stating the pretty obvious – we are in the worst IPO draught in 32 years and then proceeds to grill the group about everything from rising salaries for VCs (16.6 percent this year) to whether the “built to flip” mantra is an anathema to long term growth strategies for entrepreneurs.
Kodiak’s Greendale is doing the best job at telling entrepreneurs how they can ride out the current storm and giving really honest, practical advice that many of them need. He acknowledges that valuations “are down a half to two times…. that VC firms’ reserves are in trouble and that entrepreneurs have to be patient.” He goes on to say that while it is a tough time to raise money and concurs that exits are down, he gives some hope. “The time required to raise money will be double what you expect. You will have to jump through hoops much more so than even a year or two ago. But you will get funded if you have the right team, the right idea and the right approach.”

He urges entrepreneurs to take their time when evaluating VCs. VCs can be “god like” and they don’t like to answer questions, he jokes. “But this is like getting married. The term sheet process can be painful, but that pain will go away. If a VC is ornery or defensive, get up and leave.”

What should you ask them? – where are they in the lifecycle of the fund? Are they fund raising? What kind of returns are they getting?

Greendale points to SaaS and digital media as two of the most promising sectors and identifies, Workday, Eloquent as the hottest SaaS plays. He notes that his firm will continue to look to make more smaller bets and they will be quick “to pull the plug” if CEOS and their companies are not meeting objectives and reaching milestones.

Other interesting tidbits:

Kittu does not see much disruptive technology in the IT area but surprising says one of the hotter areas is hardware – including flash technologies as hard drive replacements and cloud computing.

Chris using a baseball analogy – singles, doubles and triples are great. An IPO would be a home run obviously.

BladeLogic Soars

Here’s a company that got funded just days prior to September 11, 2001. In someone else’s abandoned office space just off 128, a team of entrepreneurs began an unbelievable journey. These guys were excited, optimistic, energetic and passionate. The Internet bubble had already burst, but severs were quietly proliferating in enterprises around the world and this team held the keys to helping IT people manage those servers. The goal was to deliver results, one customer at a time, and create steady, real value in the company.

And then September 11 hit. The rules had changed overnight. In fact, our entire way of life had changed overnight and there were no rules. What did remain was a strong desire to move ahead in spite of constant reminders from the roar of aircraft from nearby Hanscom Field.

Building on the mantra of delivering results and creating real value, BladeLogic got going, one customer at a time. As the momentum grew, this management team kept its composure. They never compromised on the standards they had created at the outset. They never stopped believing in the superiority of their technology. They never sacrificed real value for “buzz” or hype.

Yesterday, BladeLogic’s IPO debuted. The stock price closed at $25. Sometimes the good guys really do win.

Web (2.0) of Influence

Okay, who among us can admit to having heard of TechCrunch a year ago or even a few weeks ago? The Silicon Valley-based blog headed by Michael Arrington came into our consciousness fairly recently when researching media (make that new media) opportunities for a few of our Web 2.0 clients. Well, now the secret is out big time. Arrington and TechCrunch are the subject of a very positive profile in the Wall Street Journal today. Pretty amazing story when you consider that Arrington, 36, has had an unspectacular career in the tech world to date and even more amazingly, just two years ago was living the life of a “surf bum” in SoCal, according to the Journal piece. Now, he’s become as big or bigger than many of the venture-funded start-ups he blogs about. He rubs shoulders with Bill Gates, Sun’s Jonathan Schwartz and he throws some very well attended keg parties in his backyard in the Valley.

My favorite take-a-way from the Journal piece – and this should be a real eye opener to anyone who doubts that blogs have in many cases usurped the power and influence of traditional business media – is this little story about oDesk Corp. This company said a mention in a TechCrunch piece in September resulted in it acquiring five times as many new customers as it did following inclusion in a Business Week article. A couple of other tech firms reported getting serious interest from VC firms after appearing on the blog, as well.

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