Posts from May 2006

Luke Archer said in his comment to my Stadium Arcadium post:

Always loved the Peppers…but they are sooo eighties.

I don’t think the Peppers have lost a thing and the new record proves it.

But this record, Blood Sugar Sex Magik, which came out in 1991, has stood the test of time and led people to think that their best days are behind them.

From the minute you hit the play button and Flea’s bass comes into play on The Power of Equality you know you are listening to the Red Hot Chili Peppers.

The Red Hot Chili Peppers are so aptly named and this record is too.  You can just sense what you are in for when you hear the name. Great funk, rap style lyrics, a pounding beat, and searing rock style guitar licks. Yumm.

If you haven’t heard this record, you should do something about that.

Is because he writes posts like this.

I came across this article explaining that the RIAA is suing XM over its new Inno device.

The lawsuit isn’t the issue I want to discuss. The RIAA seemingly is in the business of suing people and companies, and suing a well loved company like XM is so typical of the way they act that it was predictable.

But later in the article it discusses a new bill called the PERFORM Act
(Platform Equality and Remedies for Rights Holders in Music) of 2006, which is sponsored by Dianne Feinstein, Democratic Senator from California.

The PERFORM Act would force the use of protected formats for all streaming
media services, whether online, on cable or through satellite radio and TV.

When I go looking for wisdom, I often look back at the myths and fables I learned as a kid.  I find they contain the wisom of prior generations that are being passed on to our generation. And few myths are as powerful and full of insight as Pandora’s Box.

In this case, Pandora has released digital technology upon our society. Maybe it is a misfortune like the ones released in the fable (clearly the RIAA thinks so), maybe it is a gift from the gods (I certainly think so).  But one thing is for sure. You can’t put digital technology back in the box and as much as the RIAA and our goverment may try, the rules of the analog world cannot and will not be used to hold back the innovation unleashed by digital technology.

What’s worse is that Senator Feinstein’s bill requires "protected formats" for all streaming services. Protected formats is a code word for DRM and unfortunately it means proprietary formats that are being used by big corporations (like Apple and Microsoft) and the media companies (like those who are behind the RIAA) to stifle the flow of bits in an open network and an open ecosystem.

Senator Feinstein is from California so I would have thought she was hip to all the amazing amount of innovation, job creation, and wealth that has been built upon open technologies and "democratized innovation". Clearly she missed that boat.

Which leads me back to the music business and this post by Altay where he suggests that once the artists are free from the business models required by the analog world (packaging, distribution, and analog promotion), that they may be better off with a world where the music is in fact free and the money is made in other ways.

I think we are headed in that direction for sure but it will take a long time to get there, and things like the PERFORM Act will only make it harder to get there.

I recieved the following comment to my Backlog Blues post.

What a load of B.S.! If you are too busy to get back to people then
that means you have either bitten off more than you can chew, are bad
at organizing, or are simply too accessible? I mean do you really need
4 different voicemails? Ever heard of call forwarding? Do you really
need ten email accounts? How about simply cutting back to a more
manageable amount on information consumption!?!?

It is when we become "too important" that we start missing out on good opportunities.

Posted by: James | May 18, 2006 6:06:06 AM

James, I have two email accounts, one for Flatiron and one for Union Square Ventures that are forwarded, and two voice mails, one for my office and one for my cell that are not. I may have bitten off too much (and always have) but I will never be "too accessible".  That notion is unacceptable to me

UPDATE: I have changed the format of this post, and all future comment of the day posts due to some great feedback from John Brothers.  Thanks John!

Backlog is usually a good thing. In its usual connotation, backlog are orders that are yet to be filled.  They mean revenue in the future.  More is better.

But as this great post outlines, backlog in our personal communications is a really bad thing.

We all face unanswered emails, voice mails, IMs, text messages, unread feeds, unwatched tivo’d TV shows, and unread books and magazines.

I am going to take some advice from the person who wrote this post.

As
of now, my fancy-pants, community-generated, emergent-behavior
data-sorting heuristic is: a calendar. If I haven’t gotten to something
in a week, it dies. Stick that in your attention economy and smoke it.
I’m re-booting. Feed list: empty. In-box: empty.

Sorry if I haven’t returned an email or a phone call in the past week. If it’s gone that long, there is a really good chance I’ll never get to it.  Send it again please.

Many in the venture industry have lamented that there hasn’t been a good IPO market in years. And for the most part they are right. But in our Flatiron partners portfolio (where the average age of our investments is 6-7 years), we’ve had three IPOs in the past couple years and we have one or two more scheduled this year. So there has been and continues to be a market for profitable companies with good growth prospects.

But as Adam Lashinsky correctly points out in this Fortune article, we are now witnessing the kind of offerings that will ultimately kill the resurgent IPO market.  Unprofitable companies that have huge capital requirements and uncertain tracks to profitability (ie story stocks) will always come public in a hot market, but often make for terrible investments.

I am not suggesting we regulate the IPO market.  Letting the market work is fine with me. In this case, I suspect it will work just fine and the investors who get burnt will stop buying for a while meaning less liquidity for the profitable proven business models that follow them.

Tom Evslin continues to riff on this subject, this time in reaction to a comment posted by Steve Goldstein, CEO of Flatiron portfolio company Alacra.

Like most of my posts, the best part of it was starting the discussion. Everyone else is doing a great job keeping it going.

There is one thing I know for sure about raising money from investors. If you don’t want the investor’s money, they will want to invest even more. It is a sure thing.

Lately I’ve been taking a lot of meetings with entrepreneurs I’ve known for years, many of whom are starting companies again after taking some time off. They call me up, and ask to come in and get some advice from me, but tell me they don’t need money.  I take the meeting, they lay out what they are doing, I give them some advice, then we break. Never once do they ask for money.

It’s a great strategy because the best way to raise money is to ask for advice and the best way to get advice is to ask for money. It’s human nature to want what you can’t have and to not want what you can have.

So why do I take all these meetings when its just an exercise in frustration? Shouldn’t I be focused on taking meetings with people who actually do want money? It’s a good question.

As I’ve posted before, we like to "hang around the rim" of startups.  We want to see the opportunities long before they are ready to take money from our firm. If we can give some good advice, make a few important connections for them, steer them toward good decisions, etc, then we put ourselves in the position of getting the first phone call when they come back for real money.

Of course the downside of the cliche of the week is the second part, the best way to get advice is to ask for money. When you are looking for capital, you’ll get a lot of advice from VCs. That’s just part of the dance. VCs love to give advice.  Frankly, its a big part of what we do; before, during, and after we make an investment. That is not to say that we give good advice, although I would suggest that the advice I give is generally pretty good.

We had lunch with a couple entrepreneurs yesterday who have been spending the past month raising a first round of capital for their company which they’ve been operating for almost three years. We got to talking about what they are going to use the money for.  And one of the entrepreneurs said, "after all the advice we’ve gotten from VCs, we need to double the size of the round to do everything we’ve been advised to do".  That got a good laugh from me.  Because the best way to get advice is to ask for money.

So with all of this in mind, here is my advice (notice that you didn’t ask for it:)

Make sure to ask for advice from a VC before you want their money.  Don’t ask for money first. Because the best way to raise money is to ask for advice and the best way to get advice is to ask for money

I haven’t listened to anything other than this record for the past four days. It is the fantastic new album from the Red Hot Chili Peppers.

The thing that makes this record really stand out is that everytime John Frusciante takes a solo, the songs explode. He is an amazing guitar player and this is a guitar lover’s record.

It’s a double record so it takes a little longer to get the hang of it, but the effort is worth it.  There is almost 2 hours of quality music on Stadium Arcadium.

But like most double albums, its tempting to think about what the best 14 15 songs would sound like on a single record.

Here’s my dream single album version of Stadium Arcadium (which is now a playlist on my iPod):

Dani California – great opening track. my kids love it
Snow (Hey Oh)
Charlie – i love this song
Hump De Bump – funky groove
Warlocks
C’Mon Girl – this is a great song
Desecration Smile
Tell Me Baby
21st Century – best song on the record
Make You Feel Better
Strip My Mind
Animal Bar
So Much I
Storm In A Teacup
Turn It Again

The record is number one on iTunes and number two at Amazon so it may have been fine to release this as a double record.  But what a single record it would have been.  Probably best of the year so far.  But for now, that still goes to the Arctic Monkeys on my list.

UPDATE: Jackson (the musician in my family) says: I like ‘Strip My Mind’ the best – so far. It’s not only the guitar work
that Frusciante is responsible for, but all the vocal harmonies as well
– he’s a mad genius.  So I went back and gave Strip My Mind a listen and I’ve added it to my playlist.  He’s right as usual.  Strip My Mind is great.