Posts from July 2004

One of the biggest challenges these days to building an engaged Board of Directors is everyone’s tendency to multitask.

I like Matt Blumberg’s advice on this and I think it should apply to all Board meetings.

Microsoft announced this evening that they were paying a $32bn dividend and also were initiating a $30bn stock buyback program.

I own shares in Mister Softee, as Jim Cramer calls the House That Gates Built.

But I sold about 1/3 of my position last week as I began to realize that the company was never going to generate the kinds of returns I want off the capital base they’d accumulated.

Am I sorry? Yes. I should have held on for the $3/share payout that all shareholders of record are going to get. But I still have 2/3 of my position so I am not terribly upset.

As we were headed back home from the airport tonight, the news came across my Blackberry.

My partner Brad and I talked about it. What does it mean?

For one, it means that Gates and Ballmer have realized that there is no way they can effectively invest the $60bn they have in the bank. They are going to give half of it back to the shareholders and invest the rest in buying back the stock over the next four years.

We decided its like Juian Robertson or George Soros recognizing that they can’t generate the returns they want to with the huge capital bases they’ve accumulated and so they give it back to their investors. Gates and Ballmer are not any different.

Can they invest $10bn in their business over the next four years at the rates of return they want. Probably.

Can they invest $60bn? No way. So they are giving it back.

I think its a good move.

I am not sure how Wall Street will react but I think it should help the stock get moving again.

Since I still own 2/3 of my position, I sure hope it will.

On the plane back from Denver today, I made a note to do a more thoughtful piece on Boards. I fired off my post on the subject fairly quickly last night after reading Brad’s post.

I’ve got some really strong feelings on this subject.

But Jerry beat me to it.

This is one of the most misunderstood issues in startups and possibly in all of business. There’s a lot more to say on this subject, but Brad and Jerry have done a good job of getting the conversation started.

Jackson, aka my brother Ted, points to one of the funnier gun control stories out there.

I just realized its Monday and therefore time for MP3 of the week.

I’ve been travelling a bunch and must have lost sight of my weekly routine.

I haven’t had much time to think about this one, but since its been almost three weeks since I’ve seen my eight year old son Josh, who is at camp this summer, I think I’ll go with his favorite song right before he left for camp.

It’s Franz Ferdinand’s Jacqueline

The song’s best line:

“It’s always better at holiday, that’s why we only work when we need the money!”

Brad Feld has a great post that is a reprint of an essay he did several years ago called Boards That Aren’t Bored. It’s a great rundown of the key issues in building and using a board.

It reminds me of the real problems of creating a great board. I’ve sat on over 30 boards in my years in the venture business and I can count on somewhere between one and two hands the number of boards that have been truly effective. Brad calls them working boards. That’s a good name. But I’ll call them engaged boards. Because boards that are truly exceptional are interactive, candid, engaged, involved, and passionate about the businesses they support.

I believe you can have a good company without an engaged board. You can even have a good company with a bored board, but its not that common.

But to have a great business, you must have an engaged board.

It takes a lot of work, but the payoff is always worth it.

The Galloping Goose was a hybrid bus/train combo that took people and packages from Durango into Telluride. The Gallping Goose has been preserved and is now on Main Street in Telluride next to the Town Hall.

The track that the Galloping Goose took was razor thin and traversed some sheer cliffs. This must have made for some pretty sweaty palms.

Anyway, the railway is gone but the track is now a hiking/biking trail.

We opted to bike the trail and the result was some great downhill runs among the rock gardens that line the trail.

The Gotham Gal tried to make it down a highly technical grade, over a tree stump, and across a creek. I chose to walk that part. She went for a tumble at the tree stump part but seems no worse for the wear and tear.

The picture on the right was taken after the fall and she’s still smiling.

This is a fun ride if you are out that way.

I’ve been a lot of places in the rockies but I’ve never seen anything quite like the Bridal Veil Falls at Telluride. The falls are pretty spectacular, but its the power station that sits at the top of them that is just way out crazy wild.

The power station was built around the end of the 19th century to provide power up to the mines above the falls. It was taken over more recently and turned into a single family home. The guy who owns it runs a little power station out of it. I can’t imagine a more wild place to live.

We started our hike up the Wasatch trail from the power station and got up to about 11,000 feet. We were almost up to the saddle where we were going to drop down into the Bear Creek trail and head back down to Telluride.

But then the weather came in so fast you can’t imagine. One minute, it was clear blue skies and the next minute we knew we were going to get wet.

We decided to head back down to make sure we didn’t get hit by lightning. We didn’t really get that wet heading back down because it was sleeting instead of raining. That’s how high we were.

It stopped sleeting about 1/3 of the way down. And sure enough, it got nice again pretty quick. I guess that’s the way it is in the Rockies in the summer.

Anyway, its a great hike and if you are in Telluride and in shape for some mountain hiking, I recommend the Bridal Veil Falls to Bear Creek Trail hike.

So the Gotham Gal and I left Aspen on Friday afternoon and headed to Telluride. My friend Mark offered to loan us his plane and more importantly his pilot, Capt Bob (that’s him on the right).

The clouds were coming in but we decided to get to Telluride anyway. Those who know me well know that I am not a huge fan of flying. Big planes are not a big deal, but the little ones give me some heartburn.

We flew up into a few big clouds. At one point we started to get bounced around pretty bad and then the hail and sleet started pounding into the side of the plane. Capt Bob and the Gotham Gal didn’t seem too fazed, but I was a mess.

We got through those clouds and then we had the southern rockies out to the left of the plane. It was an amazing site.

The landing at Telluride is pretty crazy. It’s the highest commercial airport in the country and its a mesa and you land right over the edge of the mesa. Capt Bob handled it beautifully and we were on the ground. And I was happy about that.