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  • Building a Financing Plan around Value Creation Milestones

    DFJ Esprit's Nic Brisbourne coaches that the value investors put on a startup generally moves in a step function, even when the company itself is making steady progress.
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    Twice in the last week I found myself coaching founders on how to build a financing plan around value creation milestones so I thought I would share what I said here.

    The idea of thinking about value creation milestones comes from the observation that the value that investors put on a startup is generally moves in a step function, even when the company itself is making steady progress. There are certain types of events that investors look to as evidence that a company has overcome certain challenges and has therefore reduced risk in the business and become deserving of a higher valuation.

  • Who Are the Mobile Power Players?

    The first annual Mobile Power Players competition has begun! Nominate your favorite champions of Internet and mobile entrepreneurship and check out the list of players that have already been nominated.
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    Behind every successful mobile startup is a handful of power players guiding the founders. Smart and savvy investors may give you a kick start, or a corporate strategic partner might chip in some expansion capital and join your board. In celebration of these key insiders, AlwaysOn is seeking nominations for your favorite Mobile Power Players. 

    The folks that have made the Mobile Power Players list so far are listed below.

  • The Coming Meltdown in College Education and Why The Economy Won't Get Better Any Time Soon

    Guest Blogger Mark Cuban warns that by the time higher education institutions realize they need to change their legacy infrastructure, the cost will keep them doing it.
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    This is what I see when I think about higher education in this country today:

    Remember the housing meltdown ? Tough to forget isn’t it. The formula for the housing boom and bust was simple. A lot of easy money being lent to buyers who couldn’t afford the money they were borrowing. That money was then spent on homes with the expectation that the price of the home would go up and it could easily be flipped or refinanced at a profit.  Who cares if you couldn’t afford the loan. As long as prices kept on going up, everyone was happy. And prices kept on going up. And as long as pricing kept on going up real estate agents kept on selling homes and finding money for buyers.

  • Hey Graduates: Forget Plastics - It's All About Machine Learning

    Flybridge Capital's Jeff Bussgang begins to think through the practical implications of what the advent of the information explosion really meant to both individuals and corporations.
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    I still remember reading this profound question on December 24, 2007 in BusinessWeek's cover article on Google and cloud computing like it was yesterday.  It was an interview question, posed by then senior Google engineer Christophe Bisciglia (later founder of red-hot cloud software company, Cloudera and more recently WibiData) to job applicants.

    For the first time, I began to think through the practical implications of what the advent of the information explosion (now commonly referred to as “Big Data”) really meant to both individuals and corporations.  How would this onslaught of information effect decision-making across a range of industries, what were the practical implications to businesses and executives, and what were the resulting investment opportunities?

  • SDN May Drive a New Data Center Development Cycle

    Vantage Data Center's Greg Ness says increased power demands will force the development of new data centers that can handle sizable increases in power consumption within the same IT floor space.
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    This is a follow-on blog post on HP’s OpenFlow announcement (HP Takes a Shot at the Hardware-Centric Network) as it relates to the impact that OpenFlow and the subsequent commoditization of network hardware could have on overall data center demand.

    Many of today’s production data centers are static by nature.  They are filled with a myriad of specialized appliances that are all potential bottlenecks to the flow of data between ever powerful servers and devices.

  • Should VC Board Observers Rights Exist?

    Foundry Group's Brad Feld says with the addition of too many observers, board members have a difficult time forming a tight and effective working relationship.
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    Over the past year, I’ve been systematically trying to change the way the board meetings work for the companies that I’m on the boards of. I’ve done a bunch of experiments and continue to learn what works and what doesn’t work.

    Ever since I started investing in the mid-1990′s I’ve been exposed to a concept called “board observer rights.” When we did investments at Mobius Venture Capital, in addition to a board seat, we always got board observer rights. This was a way for us to bring another person to the board meeting other than the board member (usually an associate or a principal but sometimes another partner), or have someone sit in for the board member if the board member wasn’t available.

  • Q1 Reports Remain Strong

    Reporting for the first quarter remains strong even as the market stumbled, reacting to wavering U.S. jobs and renewed volitility in Europe. Check out this week's best and worst performers.
    X_Fund_art_smooth_200x102.jpgThe AlwaysOn X Fund portfolio finished the week down 3.4%, the NASDAQ was down 0.8%, and the S&P 500 declined 1.1%. Year to date, the AO X Fund is up 13.6%, the NASDAQ is up 12.6%, and the S&P 500 is up 7.6%.

    Priceline reported 61% EPS growth and 28% revenue growth for Q1. In the different segments, hotel nights grew 47%, airline ticketing was up 5%, and rental car days increased 41%. PCLN lowered its Q2 revenue guidance, and the stock responded accordingly, finishing the week down 8.2%.
  • To Be Successful, You'll Need to Shake Hands and Kiss Babies

    GRP Partners' Mark Suster reminds us that, no mater how hard travel is, you need to get out there and meet with people, shake their hands, and yes, kiss their babies.
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    It’s Wednesday late afternoon. I’m aboard Delta flight 1833 from Cincinnati (actually, Northern Kentucky for what it’s worth) to Los Angeles.

    I had a very enjoyable day in Cincinnati meeting many local entrepreneurs, angels and accelerators. I was here to see one of our LPs (limited partners are the people who invest money in VC funds) called Fort Washington. They’ve been a long-term investor in our fund – GRP Partners – and it was important to me to spend time with them in their home market and meet the people with whom they deal locally.

  • Too Many Seed Investment Choices

    Foundry Group's Brad Feld takes time to look at what it means to be a seed investor and how it affects his fund as he makes tough investment choices.
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    Yesterday I sent emails out passing on participating in two seed rounds for companies I really like. They had lots of investors trying to invest and each company was competitive with two other seed stage companies we’ve seen in the past 30 days. All are exciting, all are working on something that we like, and all of them are at the starting line with different strengths and weaknesses.

    So far this year the number of high quality seed investments we are seeing in themes that are relevant to us is overwhelming.

  • The AlwaysOn OnMobile 100 Top Company Competition

    The second annual OnMobile 100 private company competition has begun! Nominate your favorite mobile technology companies and check out the list of companies that have already been nominated.
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    AlwaysOn has officially kicked off its second annual OnMobile Top 100 Private Companies Competition. We're looking for the top emerging mobile companies that are creating new business opportunities in the high-growth mobile markets. This includes private companies that are demonstrating significant market traction and pursuing game-changing technology in the following sectors:

  • Tolerance and Prosperity

    Union Square's Fred Wilson recaps his conversation with NYU's Paul Romer, who teaches that cultural norms, even more than laws, are a determinant of prosperity and economic development.
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    Yesterday, my partners and I invited Paul Romer over to USV for lunch. For those that don't know, Paul is a leading thinker in the world of economics and currently a Professor at NYU. It was a fascinating conversation. My favorite part of it was Paul's "lecture" on William Penn, early Pennsylvania, and the reaction to the growth of Pennsylvania from neighboring states.

    William Penn was a Quaker and when King Charles II gave him a large piece of his land holdings in America, Penn created the colony of Pennsylvania and grounded it in the notions of tolerance and religious freedom.

  • Democratizing Education Technology

    FirstMark Capital's Amish Jani looks at the massive changes taking place in online education, heralding a new generation of collaborative learning, adaptive learning, and more flipped classrooms.
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    Today, we’re announcing an investment in Schoology, a next generation collaborative learning platform that combines the elements of a learning management system, a social networking platform, and enterprise resource system all in one hyper-intuitive interface.

    I’ve known the Schoology team for some time, having spent the last year getting to know them. It’s a testament to the power of building enduring relationships.

  • Balancing Conviction and Feedback - A Key Skill for Entrepreneurs

    DFJ Esprit's Nic Brisbourne focuses on helping entrepreneurs figure out who to listen to and when to take feedback on board.
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    I think that one of the hardest things about being an entrepreneur is figuring out who to listen to and when to take feedback on board. At the earliest stages there may well be precious few people who understand what you do well enough to provide constructive criticism and there may well be hoards of people (particularly non-techie friends and family) who don’t get what you are doing and advise you to stop what you are doing or radically change course.

  • Amazon and the Enterprise IT Monoculture Myth

    Vantage Data Center's Greg Ness unwinds a recent, and unecessary, dose of vapor from the Amazon marketing machine in the form of some very forgiving and easily forgotten ten year predictions.
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    I didn’t know whether I should chuckle cynically or slow clap the recent hubris of an Amazon executive, quoted in InformationWeek, with a tech prediction set to be fulfilled in a mere ten years: Amazon: Era Of Data Centers Ending:

    The era in which most big companies operate their own data centers is coming to a close. Instead they’ll turn, slowly but surely, to the cloud. That’s the bold prediction Amazon’s Adam Selipsky, VP of product marketing, sales, and product management, made Thursday at Amazon’s Web Service Summit 2012 in New York.

  • The AlwaysOn Global 250 Top Company Competition

    The fifth annual AlwaysOn Global 250 private company competition has begun! Nominate your favorite technology companies and check out the list of companies that have already been nominated.
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    AlwaysOn has have officially launched its fifth annual AlwaysOn Global 250 Top Private Companies competition. The AO Global 250 is a competition for the top emerging private companies that are creating new business opportunities in the global technology industries. This includes private companies that are demonstrating significant market traction and pursuing game-changing technology in the following sectors:  

  • LinkedIn Beats Expectations

    LinkedIn had a great third quarter, finishing the week up, while Web.com also impressed with its results and advanced more than 17%. Check out this week's best and worst performers.
    X_Fund_art_smooth_200x102.jpgThe AlwaysOn X Fund portfolio finished the week down 3.1%, the NASDAQ was down 3.7%, and the S&P 500 declined 2.4%. Year to date, the AO X Fund is up 17.6%, the NASDAQ is up 13.5%, and the S&P 500 is up 8.9%.

    Web.com had a strong first quarter with 132% revenue growth and 67% EPS growth. Web.com added 1,600 new subscribers for a total of 2.95 million. Its average revenue per user increased 2% to $13.15, and its churn rate remaines at 1%. For the week, WWWW advanced 17.5%.
  • Giving "Good Phone." It's WTDoTYASES.

    Duck9's Larry Chiang brings home the importance of engineering pre-entrepreneurs talking on the phone.
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    This is what they teach you at Stanford Engineering School in ENGR 145: Talk on the phone.

    Old people do work on the phone. As an undergrad in engineering, we need to stop asking for in-person coffees. We as engineering pre-entrepreneurs have a much better chance to get important people on the phone.

  • Where's My Billion Dollar Check, I Wonder

    Union Square's Fred Wilson sums up the blood, sweat, and tears that go into a startup and the heartbreak of missing that elusive pot of gold at the end of the journey.
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    When a blockbuster deal happens, a lot of people get excited. The press is all over it, money comes pouring into startups in search of the next one, people quit jobs and school to get in the game. It's a gold rush.

     

    But there's another reaction that I have heard a lot in the past few weeks that is quite different. It is "why not me?" The title of this post is from an email between me and an entrepreneur I know who will go nameless.

    It sums up the emotion so well for me.

  • Gamification – A Maturing Concept

    DFJ Esprit's Nic Brisbourne elaborates on his experience with the gamification of web services, finding that, having lived through the hype cycle, it can now be used to good effect.
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    My engagement with the concept of gamification has followed the pattern below. I think this has been true for many people.

    The badges on Foursquare were fun and I thought the idea of using gaming concepts to make non-game service more engaging had legs. I started to get bored with earning meaningless badges and points all over the place. I started to see the word ‘gamification’ in business plans as a sure-fire, but unexplained, driver of success (for a time ‘viral marketing’ was used with a similar lack of understanding and lack of impact). I lost interest in the whole concept.
  • The AlwaysOn OnHollywood 100 Top Company Competition

    The sixth annual OnHollywood 100 private company competition has begun! Nominate your favorite digital entertainment companies and check out the list of companies that have already been nominated.
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    The sixth annual OnHollywood 100 competition has begun! Disruptive technology is forcing big changes in Hollywood: new contracts, new genres, new stars. As the behemoth industry steps into the digital era, entertainment execs will be paying even closer attention to the global Silicon Valley—especially the startups that are writing the rules and creating the tools for the digital entertainment age.

    To help identify these startups, we'd like your help. We're looking for the top emerging private companies that are creating new business opportunities in digital entertainment.

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