Matisyahu – One Day

it’s not about win or lose
‘cuz we all lose when they feed on
the souls of the innocent
blood drenched pavement
keep on moving though the waters stay raging
in this maze you can lose your way
it might drive you crazy
but don’t let it faze you no way

sometimes in my tears I drown
but I never let it get me down
so when negativity surrounds
I know some day it’ll all turn around because
all my life I’ve been waiting for
I’ve been praying for
for the people to say
that we don’t wanna fight no more
they’ll be no more wars
and our children will play

one day one day one day
one day one day one day

- Matisyahu from “One Day” from his latest album Light

The Constancy of Start-Up Stress

Earlier this month, I had the privilege of speaking on a panel at the Foley Emerging Technology Conference entitled “Prospering in a Volatile Market: an Investor Perspective” along with way smarter investors than myself, including Paul Maeder, Nina Saberi, and Michael Skok. If you’d like to listen to the session, it’s archived on that first page/link.

As we were putting the panel discussion together our intrepid moderator Gabor Garai broached the topic of whether economic downturns create particularly more stressful times for entrepreneurs. The question made me stop and think for quite a while.

The topic came up again earlier this week when I was addressing the Northeastern University ACM chapter as we talked about, among other things, “what to expect” when starting a start-up.

Here’s the thing: start-ups are inherently risky, and risk creates stress. There’s no way around those two facts.

Sometimes risk creates fun stress – like when you’re about to bungee jump off a bridge. Mostly though, risk creates garden variety “stress stress”. Are you going to be able to make payroll next week? Is some competitor about to crush your nuts? Are you going to make the quarter’s numbers? Is the product going to work? Is your top engineering team looking to leave? And so on and so forth.

Some things are absolutely “more stressful” in a downturn, such as raising money, and closing sales. QED. However, while I won’t argue it’s a zero-sum game, there is a yin-and-yang as it concerns the stressors created by the economic environment.

Successful technology start-ups usually exist longer than the peak or valley period of most economic cycles. If you were crazy enough to start a newco in the early 90s, you had a tough time raising money and getting going. Once you hit the late 90s, the economic world was nearly inverted. Now you were frustrated you couldn’t hire great people or find decent offices or keep track of the dozens of copy-cat businesses VCs were funding daily! Your stress level didn’t materially change between those two time periods – the types of stress just changed.

The nice thing about economic cycles is that you get to pick when you start your company – you can effectively “pick your poison” .

Start-ups are stressful. No way around it. If you don’t like stress, go find a nice 9-5 at the RMV or something.

“Luck is the residue of design”

Things worthwhile generally don’t just happen. Luck is a fact, but should not be a factor. Good luck is what is left over after intelligence and effort have combined at their best. Negligence or indifference are usually reviewed from an unlucky seat. The law of cause and effect and causality both work the same with inexorable exactitudes. Luck is the residue of design.

- Branch Rickey

“Always With You”

Quite possibly one of the finest mash-ups ever constructed. All props due Divide & Kreate FTW! Okay, I guess Willie Nelson and U2 and MARRS deserve some props too .

Perfecto.

WELL DONE  > WELL SAID

The Illusion of Security. Thank you XKCD.

Entrepreneurs: Don’t Pay To Pitch

Jason Calacanis put up a hilarious and serious-as-a-heart-attack post on Friday railing against investors who charge startups for the privilege of pitching them.

Jason is mobilizing his net.troops. He wants the practice to stop, and …

… if this is not done immediately, my group of startup CEOs and angel investors will begin targeting specific groups for elimination. We will launch competing, fee-free events directly opposite your events. We will encourage angels investors, service providers and startups to boycott your events. You may even find our street teams outside your events handing out flyers. This isn’t a joke and this is a threat: stop charging startup companies to present or we will do everything we can to put you out of business with a competing, free option.

Check out the list of investors on Jason’s post who charge for pitching. Folks are adding to it, but hopefully it’ll stay short.

I’d love to hear from groups that charge fees to present. What are the arguments? Presumably you guys have logical reasons for this (though perhaps misguided)?

I’ve worked with hundreds of startup CEOs over the years, and I always advise them that the minute a potential investor asks for money in order to hear you out, you should slot them to the very bottom of your list (at best).

I had a conversation with Charlie O’Donnell last week over breakfast about this. He also had an interesting thought about mobilizing the community to boycott investors who require pay-to-play. Smells like a meme developing…

“Startups are what make me happy”

TechStars Boston was fortunate to be able to coax the inimitable Megan Leigh Sweeney to Cambridge from Colorado to film what has become Episode 13 of The Founders – the series of exceptional, short videos that covered the TechStars Boulder (until now!) program.

The result is “The Founders: Bean Town”. Enjoy!

ET EDT GMT-0400 GMT-0500 — Shoot Me.

As most readers of this blog know, I have some issues with how time is represented . For starters, I can’t stand the whole “AM/PM” nomenclature (as opposed to 24 hour clocks) and the whole ET/EST/EDT daylight savings time bullshit drives me batty.

I got the following today about a meeting I have next week (emphasis and redactions mine):

When: Wednesday, October 14, 2009 8:00 AM-9:30 AM (GMT-05:00) Eastern Time (US & Canada).
Where: XXXX Federal St. XXXth Floor, Boston, MA 02110
Note: The GMT offset above does not reflect daylight saving time adjustments.

I have no clue what calendaring system generated this reminder email to me, but it basically made my head explode.

In time zone ET, we have daylight savings time until the first Sunday in November. We switch out of DST on 11/01/2009 at 02:00 ET (we “re-live” 01:00:01 through 02:00:00). During DST, ET is GMT-04. Outside of DST ET is GMT-05. The above text says the meeting starts at 0800 ET but that the offset for DST has not been reflected. What the fuck does that mean?!? Is the meeting at 0800 (GMT-5) or at 0900 (GMT-4)? I happen to know it’s at 0800 ‘cuz I was there when we scheduled it, but c’mon folks!

Is “Revolutionary Angels” either?

This article in today’s Xconomy outlines a new “pay-to-play seed fund competition” (my words) created by a new firm called Revolutionary Angels (“RA”). From what I can tell their program works like this:

• ~100 companies apply (apparently per quarter)
• those companies pay $5K each to apply
• thus RA “raises” ~$500K per quarter
• the 1st place winner gets a $250K seed investment from RA at a $2.25M pre
• the 2nd place winner gets a $50K seed investment from RA at a $450K pre
• so $300K gets invested, and the other ~$200K goes to RA operations/overhead

I don’t know the folks involved in RA (which perhaps reflects well on them ) so I can’t speak to their intentions. My  knee-jerk reaction though was negative, as I have an allergy to anything that consumes precious start-up capital that does not generate product progress, customers, or revenues.

RA argues that the $5K is not simply a lottery ticket because their folks will add value to each applying start-up during the application evaluation phase, including a detailed written commentary on their business plan(s). They also have a list of sponsors and partners who can add value to the start-ups. Whether that value is worth $5K in precious cash we’ll need to wait and see.

It’d be interesting to see if there could be a way to marry start-ups with sponsors so the often-impoverished founders aren’t shelling out cash they usually don’t have.

It’d be interesting to see if they could get their operating costs lower, which could lower the application fee. We run each TechStars program with less OpEx than that, and that includes office space during the program for 30+ people.

It would be exceptionally interesting to figure out if they could distribute the equity participation in the two winners to all the people who pay into the fund. Although this is a legal quagmire, if your $5K got you a tiny piece of the two investees, it might pay the investment back; as-is, AR gets 10% of the two winners with no outlay of their own cash.

I’ll be watching the program closely. I hope it can be a positive one for the ecosystem.