I’ve been a long time fan and supporter of the work of the Ewing Marion Kauffman Foundation in Kansas City. In the mid 1990’s, I was an “entrepreneur-in-residence” there, which was basically a fancy phrase for “consultant” (I spent a day a month working on a set of programs run by Jana Matthews called “Learning Programs for High Growth Entrepreneurs.”) One of the tangential things I was involved in was Entreworld – a web site on entrepreneurship sponsored by the Kauffman Foundation. It remains one of the richest sites on the web for learning about entrepreneurship and I recommend it highly.
Periodically I write an article for Entreworld. Recently, they asked me to write an article about a “35,000 foot view of the Internet today from an entrepreneur’s perspective.” I wrote the article on a flight back from visiting my wife in Paris – I thought the title was appropriate given that I was on a plane at around 35,000 feet up at the time. The article follows and can also be found on the Entreworld web site.
The Internet at 35,000 Feet, Circa 2005
As a software entrepreneur and early-stage investor since 1985, I’ve experienced (and contributed – for better and for worse) to the dramatic rise, fall, and rise again of the Internet as it has become deeply embedded in all aspects of life and business, particularly, entrepreneurship. Today, as I sit on a Delta Airlines airplane on a trip home from a week in Paris, I’ll give you a figurative view of the Internet from 35,000 feet, as it applies to entrepreneurs, while experiencing a literal view.
Prediction and Perspective
First, a prediction: “You ain’t seen nothing yet.” I expect that the way entrepreneurs interact with the Internet (and with computers in general) will be as radically different 20 years from now as it was 20 years ago. In 1985, when I traveled to Paris, even doing something as simple as making a telephone call to the United States was expensive and difficult (especially if you don’t speak any French). Forget about having access to your email (which wasn’t ubiquitous anyway, so it didn’t really matter). When I was in Paris last week, I was connected 100 percent of the time in several ways: my laptop (via a wireless DSL connection in the apartment we rented); my Tmobile Sidekick II (always on email); telephone (my regular U.S. number); the Web and AOL instant messenger–except when I turned it off at night (so someone in the United States calling my number wouldn’t wake me up); and Skype (free VoIP calling from my laptop).
Just for perspective as to how far we have come, on the way to the airport, the taxi driver asked me which terminal I was going to. I was clueless, but I whipped out my Sidekick, went to Google, typed “charles de gaulle paris delta,” and the first entry that came up five seconds later had “Terminal 2C” in the first sentence. The entire experience took less than 30 seconds. In 1985, we would have gone from terminal to terminal until I found the right one (or even worse, the taxi driver would have dropped me off at Terminal 1, and I would have had to struggle with my luggage and a bus to get the Terminal 2C).
Things Have Changed
So today entrepreneurs are starting with an always-connected world. This has dramatically lowered the friction involved in communication. The nasty side effect is that it’s hard to get people’s attention in real time, and handheld email devices like the Sidekick and the Blackberry generate “low attention span behavior.” This, however, is a correctable phenomenon, and the benefit of being able to be easily connected whenever you choose far outweighs the short-term rudeness from people who can’t “keep it in their pocket” while you are talking to them.
Today, even a company founder can now be a content publisher. While everyone who uses email generates a lot of content (I like to joke that a big part of my job is to be a professional emailer, phone caller, and Board meeting attendee), new forms of one-too-many communication mediums are appearing that increase an individual’s reach. A year ago, I started writing a blog, which, if you aren’t familiar with the idea, is my own personal Web site. It is easy for me to maintain and update. I write about a variety of topics, including venture capital, entrepreneurship, the activities of my companies, book reviews, and some of my personal exploits. Within a year, I’ve developed a daily readership of more than 2,500 people from all over the world that is currently growing at roughly 25 percent a month. Twenty years ago, putting out a simple newsletter once a month to 2,500 people would have been a giant production-and it probably would have cost about $5,000. Today, I can post articles daily for virtually no cost on an annual basis.
I don’t go to the store anymore. In 2000, the promise of e-commerce reached a staggering crescendo and then crashed on the rocks of a major stock market nosedive, followed by a series of events that dramatically reconfigured the technology industry. However, in 2003, things started to look up again, and today those of us who were investing heavily in e-commerce in 2000 can sheepishly (although in some cases proudly) say, “We were right.” If you sell goods or services, the Internet and the Web should be a major part of your infrastructure-both for direct sales of products, as well as promotion for your company. As broadband continues to spread throughout the United States, the preponderance of people like me who happily buy as much as they can over the Web will continue.
Now for the Bad News
But – all of this still doesn’t work very well. Here’s the problem. While the Web and my email are my primary user interface and access point to how I interact with my computer (while I do use Word, Excel, PowerPoint, and a handful of other desktop applications, the vast majority of software I use is now Web-based), I continue to spend a ridiculous amount of time interacting with my computer infrastructure. I have to remember passwords for numerous Web sites. I have to manually navigate through the same things over and over again to get to the content that I want. I am constantly entering new data into the various Web applications that I use, and I regularly have thoughts like, “Why can’t the computer do this for me?” And I like using the computer! I pity the vast majority of humans who don’t like using it.
Today, while entrepreneurs can be completely connected, there is very little user-centric intelligence going on. The techies that make everything run understand this and are starting to shift their focus to this issue. However, we are taking baby steps compared to where we should be. Over the next few years, you’ll hear the phrases Web 2.0, Web services, XML, and API continually-these are all names for technical building blocks that start to connect different software applications at a data level, which is the first-and critical-step to increasing the relevance of what your computer does for you on a daily basis.
In 1995 at a Young Entrepreneurs Organization (YEO) national conference, I gave a talk on the Internet. When I asked the question, “How many of you have email?” only about five people in the standing-room-only gathering of 200 raised their hands. If I asked the question again today, I’d bet there’d be only five people who didn’t raise their hands. But if I asked the question, “How many of you continue to be mystified and frustrated by your computer because it doesn’t do enough for you, is too hard to use, and continues to get more complex as it gets embedded in your every day work life?” I’d expect most of the hands would stay up. We’ve made a lot of progress in the past 20 years, getting technology in general-and the Internet, in particular-to work for entrepreneurs. However, we’ve got a long way to go. Stay tuned for an even more exciting time ahead.
I spent a day in Washington DC last week on my continued mission to evangelize for the National Center for Women & Information Technologies. We had an evening event that was kindly hosted by the folks at McKenna Long & Aldridge with our local Colorado Congressman Mark Udall keynoted the evening.
In between my normal daily email and phone calls, I had three completely fascinating meetings concerning women and information technology. The Honorable Paula Stern was my guide for the day (Paula used to be the chairwoman of the International Trade Commission and is a huge friend of NCWIT) and she generally kept me out of trouble.
My first meeting was with the folks from the Committee for Economic Development (the people that gave us the Marshall Plan). Charles Kolb and his team had a major clue, got the issues we were discussing immediately, and laid some groundwork for future collaboration. I left their office with a pile of scintillating material to read, including publications such as (a) Making Trade Work: Straight Talk on Jobs, Trade, and Adjustments and (b) Learning for the Future: Changing the Culture of Math and Science Education To Ensure a Competitive Workforce. These dudes are smart, data driven, and intensely logical thinkers – I look forward to more interaction with them.
Next up was a short meeting with Bruce Mehlman and Karin Hudson at Mehlman Vogel Castagnetti. Mehlman is the Executive Director of the Computer Systems Policy Project – an affiliation of CEO’s from nine computer companies: Dell, HP, IBM, Intel, NCR, Unisys, Motorola, EMC, and Applied Materials. One of NCWIT’s core messages is that we need to encourage women to join the US IT workforce to increase the long term competitiveness of the US computer industry. We thought this would resonate with Bruce. It didn’t. Karin got it however so there’s hope that we’ll make some progress in the future with them and CSPP.
Finally, I wandered over the Russell Senate Office Building (nope – I’d never been there before – man those ceilings are high) to meet with Senator Hillary Rodham Clinton’s chief of staff Tamera Luzzatto. Tamera is a total rock star – she got it immediately (even while watching the house vote on stem cell research out of the corner of her eye) and committed to include the NCWIT messages and agenda in their future thinking. I had to split early because of a meeting with one of our LPs, although Paula stayed behind and finished the meeting. Unquestionably the most powerful meeting of the day.
Paula was a little disappointed that we were only two out of three for the day (three out of four if you include the awesome evening event.) I explained to her that two out of three is a phenomenal result for a VC and that – while I was only marginally more clueful about Washington DC then I was at the beginning of the day – I was delighted to have spent it with her.
Yeah – I know that “Rwanda Venture Capital” sounds a little out there and no – this isn’t yet another email scam migrated to your RSS feed. A Denver-based friend – Rob Fogler (a partner at the law firm of Kamlet Shepherd) and his colleague Antoine Bigirimana (the founder of the Kigali Center for Entrepreneurs) have started a Rwanda-based Venture Capital firm called Thousand Hills Venture Fund.
While I’m personally not terribly clued into Rwanda (or Africa in general), a number of my friends in Boulder (including Amy) are and it’s easy to support guys like Rob (Amy and I are investors in THVF) who believe “that the US business community must pay greater attention to the opportunities and challenges of doing business in emerging markets if it will continue to thrive in the globalizing marketplace.”
Rob pointed me to an article in the Washington Post by Carol Pineau titled “The Africa You Never See” which asserts that Africa’s media image – which is filled with stories about hardship, AIDS, war, genocide, poverty, and corruption – does the people of Africa a major disservice. Pineau suggests that the side of Africa we see is a “one dimensional caricature of a complex continent. Imagine is 9/11, the Oklahoma City bombing and school shootings were all that the rest of the world knew about America.” Pineau’s article is great – she argues that while the view of Africa the media presents gets us to “dig into our pockets or urge Congress to send more aid” she goes on to say that “no country or region ever developed thanks to aid alone. Investment, and the job and wealth creation it generates, is the only road to lasting development. That’s how China, India and the Asian Tigers did it.”
Rob recently attended the IFC Annual Conference on Global Private Equity in DC. The IFC’s top delegate, Executive Vice President Assad Jabre, said in his remarks that he’d like the global private equity industry to focus on two areas in the coming years: (i) Africa and (ii) equity investments in the range of $50,000 – $500,000. Thousand Hills Venture Fund is the only true for-profits venture fund anywhere in the world doing just that!
The venture capital that Rob and Antoine are doing is truly risk capital and far ahead of the curve. Guys – you make me proud to be associated with you.
The CEO’s of my companies have probably gotten tired of me saying “c’mon guys – put a blog up as part of the front page of your site.” While folks are still issuing press releases, the “home page corporate blog” is a great way of quickly getting messages out about your company and your products. Plus – if you do it right – you can use the voice of people in your company, rather than just boring-as-shit PR/marketing speak.
While many of the CEO’s of my companies are blogging (JB, Dick, Terry, Ed, Jim, and Matt), it’s been slow going to get the corporate blogs up. Not surprisingly (since they live and breath this stuff), NewsGator and Feedburner are the first two up. NewsGator Daily covers all things NewsGator and – as CEO JB Holston says – will “have multiple authors contribute, embedded directly on our site.” Feedburner’s weblog – Burning Questions – has been up for a few months, but they’ve just added Publisher Buzz (“recent posts from people who kind of dig Feedburner”).
If you want to subscribe, the links are below:
Rob, Dan, Terry, Mike, Ed, Jim, Marie, Tim, Matt, Raj, Ramana, Dave – what gives?
Last week we were one of four VC firms recognized by the Women’s Technology Cluster for our significant investments in women-led companies. The other firms recognized were NEA, Vanguard Associates, and Versant Ventures.
While we are flattered to be acknowledged like this, my partner Heidi Roizen said it well when she was quoted as saying “But make no mistake about it, we don’t fund women out of some sort of ‘diversity cause.’ It is just the opposite. We funded these women because they are great entrepreneurs and it made smart business sense to do so. Any VC not being open to women entrepreneurs is missing out of half the population, a lot of smart, talented people, and a lot of opportunities to generate great returns.”
As chairman of the National Center for Women & Information Technology, I look forward to the day sometime in the future when awards like this are obsolete because there isn’t any discernible reason to call out either male or female entrepreneurs based on gender. Lucy Sanders – the CEO of NCWIT – is fond of saying that her goal is to have NCWIT be out of business 20 years from now because it has accomplished its mission and is no longer relevant.
For those of you that like to read about entrepreneurship and venture capital from a VC’s perspective, three younger VC’s have recently started blogging.
Will Price: Will is a Senior Vice President at Pequot Ventures. Last month I led a financing for Klocwork which Pequot had originally spun out of Nortel and have been working with Will and Karen White on the company. Will and I have plenty of two degree of separation action – he used to work with Seth Levine (who works for me at Mobius) at Morgan Stanley and my first company (Feld Technologies) was bought by Will’s boss at Pequot, Jerry Poch (Jerry and I have had a few monster hits together – including Service Metrics – along with some crummy failures – can anyone say Guggenheim.com (Rex – stop snickering)).
David Beisel: David is an associate at Masthead Venture Partners. They led the recent round in NewsGator. David has been working with me, Seth, and Rich Levandov on the company.
Charlie O’Donnell: Charlie is an analyst for Union Square Ventures. While I haven’t yet worked with Charlie, I’d met him a few times when he was at GM Asset Management (they are one of our LPs) and I’ve worked closely with Fred Wilson from Union Square Ventures on a number of companies, including Return Path.
You’ll definitely get a different perspective on the venture capital business through the eyes of this younger crowd (god – it’s scary that I’m now part of the “older crowd”.) Welcome guys.
As an unrepentant Ben and Jerry’s worshiper (thanks to my dad for my ice cream addiction). I’m always sad when my favorite flavor disappears. I like everything chocolate – the stranger the better – and they’ve had some strange ones (Makin’ Whoopie Pie or Reverse Chocolate Chunk anyone?)
These flavors got sent to the Ben and Jerry Cemootary. I guess enough folks like me believe in ice cream resurrection so you can now vote to have them come back to life. Vote now.
And – in a hat tip to Seth Godin’s Cow – it’s Purple!
Jeff Jarvis has a comprehensive summary of Rupert Murdoch’s recent speech to the American Society of Newspaper Editors. I don’t follow all the media titans, but Murdoch coming out and talking clearly about how print media needs to change – especially in the face of blogging and the way that the next generation of digital natives (“young people” – according to Murdoch) deal with news and information – is an important acknowledgment of the changing zeitgeist in mainstream media.
If you are a Warren Buffett fan like I am, then you’ll enjoy The Warren Buffett CEO: Secrets From The Berkshire Hathaway Managers. While Buffett’s Letters and Berkshire Hathaway’s annual reports give lots of hints about the various Berkshire companies and the CEO’s behind them, Robert Miles has in depth interviews with 19 of them. In addition to a great history on the companies and the folks running them, you get a clear sense of how Buffett – and his CEO’s – manage the business.
Miles finishes the book with several chapters of his thoughts concerning comparisons between the CEOs, their evaluation and compensation, the opportunity for a Buffett CEO, and what Berkshire might look like post Buffett. Among other conclusions, Miles characterizes all the Buffett CEOs as having four things in common:
The book was published in 2002 so it’s missing several of the more recent acquisitions, but it still feels very current. While it gets a little tedious at times as the detail can become overwhelming, it’s a must read for anyone that’s a student of Warren Buffett and Berkshire Hathaway.