February, 2010

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Advertising Wants to be Measurable – An Investment Thesis

Both Sides of the Table

One of the investment themes I’ve been focused on in the past 3 years has been Performance-Based Marketing. When I started investing the US advertising market was $300 billion with only 10% of it ($30 billion) of it being online and measurable. One recession later and the US advertising market is about $245 billion – but still only 10-12% is online and measurable.

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A tale of two cities: Bewildered by the city government's continued cluelessness on NYC's innovation scene

This is going to be BIG.

I generally like NYC City Council Speaker Christine Quinn. I think she's smart, hardworking, and I think she'd probably make a good mayor someday. However, her take on the NYC innovation economy during her recent State of the City Address confirmed my thinking: Most of what the NYC government should be doing to support technology entrepreneurship in NYC is to try and stay out of the way.

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Money comes smart or dumb. Find smart.

Berkonomics

This statement could be considered controversial. We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. Now we explore the other side of that coin. Professional investors usually bring “smart money” to the table, defined as money that comes along with good advice and great relationships for corporate growth.

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Virtual Goods, Accounting, and the Power of the “Rental” Model

abovethecrowd.com

American journalists and corporate executives have been slow to appreciate the beauty, brilliance, and consumer allure of the virtual goods business model.It’s not that they did not have data points – China is chock full of multi-US$billion market capitalization companies that are based on this business model. That said, many luddites predicted it was an [.].

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Digitalization: 5 Tech Updates That Will Help You Survive The Recession & Thrive

Lack of digitalization decreases business competitiveness. To thrive, embracing modern solutions becomes essential. The approach to digitalization often aligns with a company's business model. This shift not only boosts productivity but also automates processes and improves security. The tech market offers a wealth of technologies tailored for management, planning, and forecasting, replacing outdated pen-and-paper methods.

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73.6% of all Statistics are Made Up

Both Sides of the Table

How to Interpret Analyst Reports. The headlines in the media are filled with that latest stats. Stats sell. The stats are often quoted from the latest reports. People then parrot them around like they’re fact when most of them are complete bullsh*t. People throw them around at cocktail parties. Often when they do I throw out my favorite statistic: 73.6% of all statistics are made up.

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Stories of Opportunity from the First Round Capital Key Hire Wire – COO, VP of Business Development, Online Marketing Director

This is going to be BIG.

If you know of senior level business and technical professionals looking for exciting startup opportunities, they can sign up here: [link]. **Correction: Last week's CTO position at Modcloth is actually a San Francisco opportunity, not Pittsburgh. VP of Business Development, DNAnexus - Palo Alto, California In the not too distant future, everything will be determined by your DNA--your job, what retro 50's decor you'll buy, how tightly you'll slick back your hair, whether or not you can date Uma

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Entrepreneurs Don’t “Noodle” They Do

Both Sides of the Table

This is part of my series on Entrepreneurial DNA that was originally published on VentureHacks. I know this series has been running for a while (and is getting long in the tooth) – I promise it’s nearly over. I started with a “top 11″ list – only because I couldn’t fit them into a top 10. But in the end I ended up with 12.

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How Do You Reference Check a VC?

Both Sides of the Table

This is part of my ongoing series on Raising Venture Capital. I often tell people that raising money is worse than getting married. I have to be careful in how that sounds because I love my wife and am happily married. But the truth is that in marriage if you’re unhappy you can at least get divorced (in most countries). Not so in venture capital.

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This Week in NYC Innovation - February 22, 2010

This is going to be BIG.

Are you still not getting this weekly in your e-mail inbox? Fill out this form so you're not missing anything. Nothing interesting to say here. I'm still trying to figure out this curling thing. How do you get into curling as a kid? Are there now kids in the projects tying cinder blocks to skateboards as we speak--inspired by their idols in Vancouver?

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The Big Payoff of Application Analytics

Outdated or absent analytics won’t cut it in today’s data-driven applications – not for your end users, your development team, or your business. That’s what drove the five companies in this e-book to change their approach to analytics. Download this e-book to learn about the unique problems each company faced and how they achieved huge returns beyond expectation by embedding analytics into applications.

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The Sleeper Agents of Innovation

This is going to be BIG.

Your industry? It’s in trouble. Your most experienced execs can’t stop the bleeding and they’re jumping ship—or you’re having to throw them over the side to save money. Yet, somewhere deep within the halls of your enterprise, you have bright young talent that was once really motivated. Corporate bureaucracy, reluctance to take risks, lack of innovation and protectionism have beaten down their morale—and frankly, your earnings.

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Open Angel Forum and The Amazing Disappearing Funding Gap in New York City

This is going to be BIG.

About a year and a half ago, I wrote that New York needed more dedicated early stage capital. Let’s look back at what has happened since the beginning of August ‘08… Betaworks raises more than $10 million in September ‘08. First Growth Venture Network formed to mentor high potential seed and early stage companies. First Round Capital makes 11 new investments in NYC, hires me to be here fulltime, and announces a new NYC office in Union Square.

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Stories of Opportunity from the First Round Capital Key Hire Wire – VP of Sales, CTO, VP of Engineering

This is going to be BIG.

A week or so ago, we launched the Key Hire Wire at First Round. We realized that there were certain open positions in our portfolio we wanted to call extra attention to. Over 1,000 senior professionals have since signed up for the mailer, which goes out on Fridays. I tried to make it a little more entertaining than your average job RSS feed. If you know of senior level business and technical professionals looking for exciting startup opportunities, they can sign up here.

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Running More Effective Board Meetings at Startups

Both Sides of the Table

Like many of you I’ve sat through my fair share of Board Meetings over the past decade. For the most part I’d call them Bored Meetings. The first 7 years I was running them and the past 3 years I’ve been attending them. Most board meetings aren’t as effective as they could be. Everyone has their own opinion on board meetings so you’ll get conflicting advice.

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PE Mastery: CAPTARGET's Playbook for Quality Lead Flow

CAPTARGET presents a masterclass in M&A deal sourcing. Learn to cast a wide net, embracing seller self-identification. Consistency is the linchpin: keep the origination process steady for a reliable flow of opportunities. Diversify your tactics, employing various tools and vendors. Tech matters! Understand DNS settings, domain authority, and brand presence for optimal outreach.

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Raise cash from trusted, close resources first.

Berkonomics

This insight follows closely the conclusions from the previous declaration, that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to sell their shares and more. And yet, in an earlier insight, we spoke of the problems that come when taking unstructured investments from friends and family.

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The Danger of Crocodile Sales

Both Sides of the Table

This is part of my series on Startup Advice. When I worked in London there were a ton of Aussies. I love working with Aussies because their outlook on life seems very similar to what I grew up with in California. Pretty laid back and non-hierarchic. I also loved learning all of their sayings. My favorite was when I guy told me to beware of Crocodile Salesmen.

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I Would Only Fund an Entrepreneur with High Integrity

Both Sides of the Table

Back in November I agreed with Nivi over at VentureHacks to do a series on the ten most important attributes of a successful entrepreneur. This is the last post in that series. This is actually an addendum to my list rather than “on&# my list. That in itself will be controversial, I know. When Nivi published the series he titled it “the top 10 things I look for before I write a check.&# As a result I felt compelled to add this final attribute because it matters a lot to me.

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Domain Experience Gives Entrepreneurs an Unfair Advantage

Both Sides of the Table

This is the final part of my series on Entrepreneurial DNA that was originally published on VentureHacks. OK, it’s not really my final part. I started with a Top 10 list for Nivi (at VentureHacks), but I couldn’t cram it into 10 so it became a Top 11 list. I originally conceived it as the Top 11 things that I believe “all entrepreneurs need to succeed.&# If it stuck to this theme then I would stand by my top 11.

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How to Stay Competitive in the Evolving State of Martech

Marketing technology is essential for B2B marketers to stay competitive in a rapidly changing digital landscape — and with 53% of marketers experiencing legacy technology issues and limitations, they’re researching innovations to expand and refine their technology stacks. To help practitioners keep up with the rapidly evolving martech landscape, this special report will discuss: How practitioners are integrating technologies and systems to encourage information-sharing between departments and pr

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Anecdote from an actual turndown note I wrote today

This is going to be BIG.

"Growing up, my mom would overcook steak, and so I never really liked it. I didn't know I loved steak until I went to a work event at Del Frisco's--didn't really know how good steak could be. The problem in this scenario, is that it would be prohibitively expensive for a steakhouse to try and acquire me by giving me a free steak.and you have a market where customer acquisition costs are "steak" expensive, and we all grew up with similarly overcooked experiences.".

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Pardon our appearance (moving to SquareSpace)

This is going to be BIG.

As you can see, things are looking quite different around here. I'm in the middle of porting my blog over to SquareSpace. I have *most* of the comments moved over with the most excellent help of Daniel Ha and fellow Regian Paolo DeDios. They would have ported fine, but SquareSpace and Typepad don't have the same URL creation syntaxes and that's the only way Disqus can tell what set of comments to post, so we have a few missing ones here and there that should get fixed soon.

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App is Crap (why Apple is bad for your health)

Both Sides of the Table

Absolute Power Corrupts, Absolutely. I was living in Europe in 2000 when the first WAP phones (Wireless Access Protocol) were introduced. These phones were so over hyped. They were going to bring the Internet to your mobile phones ushering in the era of “m-commerce.&# Gag. I had just returned from living in Japan where I witnessed the hugely successful launch of i-mode by NTT DoCoMo so I knew the potential that the mobile web would ultimately bring, but I saw so many flaws in the launch

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Photo: First Round Capital's new NYC office under construction

This is going to be BIG.

Photo: First Round Capital's new NYC office under construction , originally uploaded by ceonyc.

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Statement of Cash Flows vs. Cash Flow Statement

Speaker: Wayne Spivak - President and Chief Financial Officer of SBA * Consulting LTD, Industry Writer, and Public Speaker

The old adages that "cash is king" and "you can’t spend profits" still hold true today. But however well-known these sayings might be, it requires a change in mindset to properly implement a cash flow management system that predicts your business's runaway as accurately as possible. Key to this new mindset is understanding the difference between the Statement of Cash Flows, a historical look at the source and uses of cash, and the Cash Flow Statement, which uses transaction history and forward-l

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The Fallacy of Channels: Startups Beware

Both Sides of the Table

This is part of my ongoing series on startup advice but also filed under my sales & marketing posts. No advice I give will ever apply to 100% of companies, 100% of startups or even 100% of tech startups. I just want to state that up front because while I believe that this post will apply to most startup technology companies out there, I’m sure there will be exceptions.

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In Cloud We Trust: First Round invests in Backupify

This is going to be BIG.

I am excited to share the news of First Round Capital 's recent investment in cloud-to-cloud backup service Backupify. This is the first deal I've closed for FRC and I've also joined the board of the company. Josh Kopelman will be working closely on this investment as well. Joining our investment in the $900k round were General Catalyst, Betaworks, Jason Calacanis, and Chris Sacca.

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Time is the Enemy of All Deals

Both Sides of the Table

A reminder that it is important for all entrepreneurs is to remember to be careful about “deal drift.” I think the perfect saying to have as a reminder is “time is the enemy of all deals,” or as my wife is all too tired of hearing me say, “Don’t pop the champagne until the ink is dry on the contract and the money is in the bank.”. So, where does this all come from and how can you apply it in practice?

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New idea or product? Don’t rest until you test!

Berkonomics

So you have a great new product or service that you and your associates love. Early adopters should climb all over each other for a look. But what have you done to test the concept against the realities of the marketplace? Have you developed a prototype, alternate pricing schemes, even a PowerPoint mockup to show to potential buyers? I would be very, very nervous without testing the product in the market as early as possible, ready to make changes and enhancements before committing to

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How to Avoid the Pain and Cost of PCI Compliance While Optimizing Payments

Speaker: P. Andrew Sjogren, Sr. Product Marketing Manager at Very Good Security, Matt Doka, Co-Founder and CTO of Fivestars, and Steve Andrews, President & CEO of the Western Bankers Association 

PCI compliance can feel challenging and sometimes the result feels like you are optimizing more for security and compliance than you are for business outcomes. The key is to take the right strategy to PCI compliance that gets you both. In this webinar, we have a great set of panelists who will take you through how Zero Data strategies can be used as part of a well-rounded compliance and security approach, and get you to market much sooner by also allowing for payment optimization.