Posts from December 2008

Thoughts On Milan

  Gallerie Vittorio Emanuelle 
  Originally uploaded by fredwilson.

I don’t think we did Milan justice. Josh and I missed the opportunity to see AC Milan play Udinese because we didn’t plan ahead and the girls would probably have preferred a fashion week to the pre-christmas weekend we spent in Milan.

But there’s a lot to recommend about Milan. The Duomo is beautiful and the christmas markets that filled up the Via Dante and the surrounding streets were colorful and fun.

We also enjoyed seeing the restored Leonardo painting of the Last Supper. There is something very magical about that painted wall.

I also loved the Castello Sforzesco and the Galleria Vittorio Emanuele. Both are awesome structures that leave a strong impression.

The food was hit or miss. The hits include panninis at De Santis and a dinner at Bebels. I want to thank everyone who twittered Milan restaurant suggestions to me. We ended up sticking with the reservations we had when we arrived. If we had stayed longer, I would have liked to try a bunch of them.

We stayed at the Four Seasons and enjoyed fantastic service and comfort. It turns out Posh and Beckham were staying there as well but we did not get a sighting. That would have been fun.

I don’t think Milan can compete with Florence, Rome, or Venice in terms of things to do and see, but it has plenty of the classic italian charm. I’m glad we stopped by for a long weekend and I suspect we’ll be back. If so, I’ll make sure to add San Siro to the itinerary.

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#Blogging On The Road

Boxee Will Soon Be Open To All

Boxee’s CEO Avner announced yesterday on the Boxee blog that the invitation only phase of the alpha will end on January 8th and that they will clean up all invites that are backlogged before Christmas.

He also mentioned in a reply in the comments section of the same blog post that the windows version will be available in alpha in early 2009 starting with thousands of invites per week.

You can still get an invite from me by leaving your email at this page.

#VC & Technology

Investing In Thick and Thin

A few weeks ago at Le Web, I participated on a panel made up of VC investors. There was a really good discussion about what next year holds for venture investing.

The moderator Ouriel asked if we would be cutting back our investing in 2009 and I replied that we did not plan on doing that

I went on to explain that the venture business is very cyclical and that I’ve seen at least three and possibly four cycles in the 22 years I’ve been in the venture business. But I don’t feel that its possible, or wise, or prudent to attempt to time these cycles

Our approach is to manage a modest amount of capital (in our case less than $300 million across two active funds) and deploy it at roughly $40 million per year, year in and year out no matter what part of the cycle we are in

That way we’ll be putting out money at the top of the market but also at the bottom of the market and also on the way up and the way down. The valuations we pay will average themselves out and this averaging allows us to invest in the underlying value creation process and not in the market per se

Eric Archambeau of Wellington Partners was on the panel and he described some research work he and some associates did a while back. They went back to the 1970s and charted for each year through the late 1990s the number of venture backed companies started that year and the number of $1bn revenue companies and $500mm to $1bn revenue companies that emerged in each ‘vintage year’. The result of that work, he explained, was that the number in each category was relatively constant year after year with no discernable pattern and certainly not correlated with or against market or economic cycles. Interestingly, the data was not correlated with innovation and technology cycles either

This says to me that, like the lottery, "you got to be in it to win it" and staying on the sidelines is not a wise approach in any market environment

Mike Moritz was quoted in an SF Gate piece today making a similar point (which inspired this post and its title).  He said:

"We’ve always invested through thick and thin. In fact, we prefer to invest in thin"

It is easier to invest in thin times. The difficult business climate starts to separate the wheat from the chaff and the strong companies are revealed. With many investors on the sidelines (particularly corporate buyers/investors and ‘momentum’ investors like hedge funds and the like), there is less competition to invest in these ‘winners’ and the prevailing valuation environment means you get more equity for your dollar invested. That’s quite a recipe for success.

But its not a lot of fun to be operating in the ‘thin times’ even as an investor. Most good firms have a portfolio full of companies that will be struggling to stay afloat and the VCs will spend more time working with their companies in this environment. And when we get an opportunity to put more capital to work in a portfolio company we know and love in this kind of market, well that is often the best investment of all. Note that SF Gate piece mentions that Sequoia just led a big new round in AdMob which if I am not mistaken is an existing Sequoia portfolio company that is a top mobile ad company. Look for more of that sort of thing in this market.

As I’ve written here recently, I see no signs that the venture market is drying up. Its changing, for sure, and if you aren’t running a company that’s emerging as a clear winner, its going to be tough to raise money in 2009 from anyone other than your existing investors. And look for them to be more cautious, more diligent, and less generous than they may have been in the past few years.

There’s money out there in venture land and its going to get invested in 2009 and its going to get invested wisely for the most part. At least that’s our plan and I’m confident we can execute on it.

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Disrupting Class and Playing Games

I’ve started reading Disrupting Class, a book by Clayton Christensen, Michael Horn, and Curtis Johnson. It’s a look at what’s wrong with the education system in this country and what we can do about it

I’ve just started the book but was quite interested by the assertion the authors make in the introduction that a big part of the problem is the motivation (or lack thereof) of the students.

Here’s a quote from the book that makes an interesting point:

When Japanese companies were developing their world-class manufacturing clout and passing American companies in the 1970s and 1980s, a common explanation was that four times as many Japanese college students were studying math, science, and engineering than were US students – despite the fact that Japan had only 40 percent of the population of the US. ….

As Japan reached prosperity, an interesting thing happened, however. The percentage of students who graduated with science and engineering students declined. Why did this happen? … Prosperity was the culprit. ….

The same downward trend is now beginning in Singapore and Korea.

The basic point the authors are making is that students will only tackle difficult subjects when they are motivated by economic reasons (upward mobility) or by a passion for the topic.

That makes sense to me. But what doesn’t make sense to me is that parts of our country are in serious economic decline and I am not aware of an uptick in engineering and science students in those regions. It may exist and if it does, I would love to know about it

But in any case, we can also work on developing the passion for science and engineering in children at an early age. We’ve been doing that with our son by supplementing his schoolwork with afterschool work on programming videogames which is his passion (and the passion of most 12 year old boys that I know).

I blogged earlier this year that 39 out of 40 kids in a college comp sci class said they developed their passion for programming playing video games.

That’s what I am talking about. We could use a similar dynamic in bioengineering, energy technology, and other important new technologies.

Infecting our kids with passion for learning is key and we must do a better job of it.

#VC & Technology

The Founder's Footprints

Jefferson adams

Image via Wikipedia

I’ve heard people say, “If you want to know about a company, all you need to do is look at the leader” and it certainly is true that companies exhibit the traits of their leaders. But it’s also true that companies exhibit the traits of their founders. In fact, I’d argue that founders leave a longer and more indelible imprint on the DNA of companies than the person who is currently running them.

There are a host of reasons for why that is. To start, the business that the company is in is more often than not determined by the founder. And companies can move into different businesses over time, but most stay fairly rooted in the initial business that they started in. It’s also true that the culture of a company is defined early on and it’s hard to change it. Some companies are technology driven, some are product driven, others are marketing driven, and others are sales driven. That most often comes from the founder and it’s hard for a new leader to change that mindset. Another important reason that the founders often have the greatest impact on the DNA of a company is the entire initial management team is most often built by the founder. That initial selection of people is a critical determinant in the way companies evolve and behave and new management will always struggle to change the behaviors a company exhibits.

And it is also true of countries and nation states. I finished Steven Johnson’s The Invention of Air on the flight to Milan and the last chapter is about Joseph Priestley’s impact on Adams and Jefferson. From 1812 until their deaths on the same day in 1826, John Adams and Thomas Jefferson engaged in a continuous debate over the lessons of the American revolution via an exchange of letters back and forth. And central to that debate was the role of science and the explorations of “natural philosophy” in the core beliefs of the new nation. During Adams’ administration, there was a panic about spies and seditious behavior which resulted in the infamous Alien and Sedition acts. Priestley, the discoverer of oxygen and the father of modern chemistry who had moved to the US to escape his enemies in England, was among the people who were suspected of seditious acts. Adams ultimately protected Priestley from those who wanted him silenced but that didn’t spare Adams from Priestley’s attacks. Jefferson, on the other hand, was an ally of Priestley’s in the debate and when Jefferson followed Adams into the White House, Priestley went from an enemy of the state to one of its most celebrated members. And the meaning of that whole drama was debated by Adams and Jefferson to their very end.

The fact is the United States was founded by an amazing set of men that included Franklin and Jefferson, two of the greatest friends of science and innovation that have ever lived. And our country has benefited from that fact immensely. The DNA of the United States comes directly from our founding fathers; Franklin, Jefferson, Adams, Washington, and the rest of them. And their desire to make the big experiments, to push the envelope of what a nation could be is firmly implanted in our psyche a full 233 years after the Declaration of Independence.

Jefferson wrote to Priestley the following words shortly after he became President:

As the storm is now subsiding, and the horizon becoming serene, it is pleasant to consider the phenomenon with attention. We can no longer say there is nothing new under the sun. For this whole chapter in the history of man is new. The great extent of our Republic is new. Its sparse habitation is new. The mighty wave of public opinion which has rolled over it new. But the most pleasing novelty is, its so quietly subsiding over such an extent of surface to its true level again. The order and good sense displayed in this recovery from delusion, and in the momentous crisis which lately arose, really bespeak a strength of character in our nation which augurs well for the duration of our Republic, and I am much better satisfied now of its stability than I was before it was tried.

It’s hard for me to read those words, which were written about the alien and sedition acts and the ensuing crisis, without thinking about 9/11, our country’s reaction to 9/11, and the “recovery from delusion” that it appears we have now made in our election of Barack Obama. Now it’s very high praise (and not yet earned) to compare Obama to Jefferson, my favorite founding father and President, but I am also “much better satisfied of our nation’s stability” and I believe that our nation’s commitment to science, innovation, and what is “new” will pull us out of the serious mess we are in. It’s in our DNA and I am so thankful that it is.

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#Random Posts

Heading Out Of Town

It’s been a rough year for everyone and while I’ve been more optimistic than most (and still am) about next year, it’s been rough on me too. The past few weeks in particular have just ground me down and I’ve been feeling sick but working anyway, trying to get year end stuff done.

I’m happy to say that I got through the year end grind and that I’m now on my way out of town, along with my family, for our annual year end vacation. We were planning to go to India but called a last minute audible and are now headed to europe for two weeks. Hopefully, we’ll be going to India next year instead.

As always, I plan to blog a bit during vacation, about what I am reading, where we are visiting, and the occasional observation on the news and the tech scene.

I’ll also be checking email once or twice a day, but I’ve turned on the out of office notification and won’t be responding to email unless it’s something that can’t wait until I’m back.

#Blogging On The Road

If You've Got Suggestions For Boxee ....

Over the past month, I’ve given out close to 500 invites to Boxee, so many of you all out there probably have some thoughts about what’s good and what’s not so good about the service. Yesterday, Boxee announced that they’ve hired NYC-based UX guru Whitney Hess to help them improve the user experience.

In the blog post they asked for feedback on:

what you like, don’t like, what is missing, how are you using boxee,
when and where are you using boxee, why are you using boxee, etc.

And within a couple hours Whitney was overwhelmed with user feedback so they set up a getsatisfaction account and are now collecting the feedback there.

I am a quid pro quo person, so if you asked for an invite from me and got one, please take some time over the next couple days and go to the getsatisfaction page and let Whitney and Boxee know what needs to get better.

We are big believers in the value of a good user driven design and improvement process. I am very happy to see Whitney and Boxee doing just that. It’s going to make for a much better service. I am sure of it.

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#VC & Technology

StockTwits Gets Stocked

My friends Howard and Roger have teamed up once again, this time to fund StockTwits, the stock service built on top of Twitter.

Roger’s got a great post on his blog about it in which he calls stocktwits (and other services like it) "a long tail meritocracy". I like that phrase.

Roger also details a long list of super connected power users who made up the financing. I love the idea tht the company was financed by its biggest users. Something is just so right about that. Well done guys.

#VC & Technology


Andrew and I met with David Porter, founder of 8tracks, the "legal muxtape", yesterday. David offered to let me try their new uploader (not yet available) that lets you drag and drop iTunes playlists into 8tracks. It’s killer.

Here’s what I did with it in about 2 minutes. I hope you like it.

And here’s my 8tracks page, where my other mix is also listed.

#My Music#VC & Technology

How To Survive A Horrible Seat Assignment

Tonight on the flight out to SF I found myself sitting in the last row in coach. My seat did not recline but of course the seat in front reclined all the way to my lap

And to make matters worse a husband and wife were occupying the other two seats of the row and the husband was quite large and sitting and sleeping in the middle seat.

I could not sit comfortably facing forward because the man to my right was taking over half of my seat

I could not use a laptop because one would literally not fit between my body and the seat back in front of me

So here’s what I did:

I turned my body to face the aisle, knees sticking into the aisle, and sometimes my legs were too

I put on headphones and turned on my ipod. I listened to relaxing music like sigur ros, thao, and bon iver. Gotta keep the heart rate low and a chilled out vibe

I put on a neck pillow and tried to sleep. I got some nodding off but no real sleep. People kept bumping into me and slamming the door to the rest rooms

I read quite a bit even though the reading light to my seat did not work

And I worked on my blackberry, a form factor optimized for the 4 sq ft work space. In fact I am writing this post on the plane on my blackberry

Every time the big guy leans on me, I gently push back towards his wife

And I spent a good amount of time hanging in the back with the flight attendants

I could have watched the movie, a cute funny film called Son Of Rambow. But I’d seen it in the theaters. Its good but not good enough for a second viewing

Mostly I tried to feel as small as a little kid and to relax and tune out my surroundings

It worked out pretty well.

I am passing this advice to all of you because I don’t plan to need it again. The next time this happens to me, I’m walking right back off the plane

This is no way to spend six hours. Anyway, I think the Obama adminstration is going to outlaw it in their review of gov’t interregation techniques

#Blogging On The Road