Finding the RIGHT investors

September 23, 2013

I recently went through a low point, a crisis of confidence in our startup’s plan, the team, and myself.

Anyone who has been through startups knows that this happens in the seed phase, often multiple times. (As an aside, I am amazed at how few people admit it.  Everyone else seems to be “crushing it.”)

After multiple phone conversations, I had a Board sit-down meeting where I led the board through a number of alternatives. Our seed stage VC was such a voice of calm reason, helping to guide the conversation and helping me to see the big picture.

It struck home with me how lucky I am to have this VC investor and mentor.

While I know he has a duty to look out for his investment, I never felt that he was doing so during this conversation or the follow ups. What I felt was his concern, guidance, and empathy.

So entrepreneurs, do heed the guidance of those who tell you to do your due diligence on your investors- check with other management teams how your investors have acted when things are not going well. It will give you a sense of what support you are likely to get when you go through it.


Is Microsoft Giving Up?

September 19, 2013

Yesterday brought news that Microsoft is raising its dividend by over 20% and allocating $40B of its cash horde to buy back its own stock.

Rational stock market investors and business school graduates will probably applaud the move. Generally speaking, it is better for a company to give money back to shareholders through dividends or buybacks rather than spending it on uncertain initiatives with unknown paybacks. That is true in many industries and I’m sure we’ll see Microsoft stock move up as a result.

However, Microsoft isn’t in most industries, it’s a technology company. Technology companies are supposed to make bets on uncertain initiatives in the hope of producing exceptional returns. In consumer and enterprise software, consumer entertainment technology, Internet media and search, and consumer and enterprise communication (and mobile phones and software), the world is changing rapidly. Competition is coming, and coming hard. And many of Microsoft’s emerging businesses, like Skype, Bing, Windows Mobile and Xbox are not dominant and could use additional investment or influx of talent from acquisitions.

By moving forward with the buyback, Microsoft seems to be signaling that it does not intend to invest further in these businesses, nor does it want to acquire large technology companies to pursue new talent, new technologies, or new ideas in order to stake a leadership position in an emerging area. (To be fair, Microsoft will still have billions available for acquisitions of smaller innovators). The company has been playing catch up in mobile, in search, in SaaS, and in consumer platforms like tablets.

The combined buyback/dividend raise seems to me like a very strong signal that they won’t invest internally NOR will they invest externally. While the PC isn’t going completely away, and Windows and Office will continue to generate substantial cash flow, it seems quite clear that Microsoft isn’t sure how to pursue dominance in any of these emerging areas. While they did just spend $7B to get Nokia’s mobile business, I’m not sure exactly what they got for it.

Feeling Blessed

September 11, 2013

I did not wake up today remembering that it was 9/11.

Instead, I woke thinking about my blessings: my family, my health, my supportive wife, my entrepreneurial journey (which I try to remember is a blessing despite the wild ups and down of the business and my psyche). I am so incredibly grateful for these blessings and so many more. I am trying to use gratitude as a way of channeling my energy, anxiety, and ADD tendencies. I think it’s working.

But realizing that is it 9/11 prompted all kinds of other feelings and memories:

Twelve years ago today, I was attending a board meeting as a VC.  Another board member was attending the meeting by phone and alerted us that a plane had flown into the World Trade Center. We all thought it was a small craft and kept going with the meeting. When he informed us that another plane had hit the Center, we adjourned the meeting. I spent the afternoon and evening watching the news with my wife, feeling numb and helpless.

-Realizing how thankful I am that I am in good health. I am rather lucky that my genetics enable me to keep my weight stable despite not working out anywhere near enough and with high levels of stress. I really need to change my workout pattern, for stress and sleep benefits. Today I re-committed to that.

-I am trying to enjoy the journey, the learning, the personal growth, especially that which comes from being an entrepreneur.  As a goal driven person, it has been quite a challenge for me to embrace the uncertainty, the downs (that of course go with the ups), and the feeling that, some days, I don’t know what I’m doing. This has arguably been one of the toughest things I have ever done. Through another blog, I came upon these beautiful words from Antonio Machado- “Traveler, there is no path. The path is made by walking.”

-Thankfully, 9/11 didn’t impact me directly too much. But thinking further about my blessings has heightened my understanding of how precious my relationships are with family and friends. I have not done a particularly good job in including the friend part of my life with business and family. It’s tough to do, but I am increasingly realizing that it is something I need. As driven as I am, and as much as I attach self-worth to my work, it is family and friends that really give life meaning. I don’t have enough friend connectedness right now. That needs to change.