The Long Game

Entrepreneurship and startup investing is a long game. It requires patience, resilience, capital, commitment, and much more.

But even so, the average life of a venture capital investment is seven to ten years. It is rare for it to go longer than that. But it can happen.

Yesterday marked the end of an almost twenty-year relationship between me and what was once a startup and is now a fairly large company called Return Path. We announced yesterday that Return Path is being acquired by Validity.

My former venture capital firm, Flatiron Partners, that has not been actively investing since 2000, made its final investment in Return Path in mid-2000. I joined the board shortly after that and have been working with the founder and CEO Matt Blumberg ever since.

In many ways, this company and this entrepreneur define my career more than any other. Matt and I stuck with this company and each other for almost twenty years and in the process built an incredibly trusting, supportive, and, ultimately, profitable relationship.

We had partners in this long game. Brad Feld and Greg Sands joined the board a year or two after I did and they are among my closest friends in the venture business now. And we have had incredible independent directors like Scott Petry, Jeff Epstein, and Scott Weiss. The management team has turned over something like a half dozen times in twenty years but a few leaders have stuck it out including Jack Sinclair, George Bilbrey, and Ken Takahashi. All of these people are responsible for an incredible journey that I have gone on for the last twenty years with this company.

Matt and I have been through a lot together. We had a least four or five near death experiences when we should have lost the company but did not. We had a deal to sell the company fall through the night before the closing. We sold lines of businesses, we bought lines of businesses, we did several large reductions in force, we did several big expansions. We hired and parted ways with many executives.

Through all of that, we celebrated with each other, yelled at each other, cried with each other, annoyed each other, frustrated each other, and supported each other. Matt has made me a much better investor. He has taught me so much about supporting entrepreneurs, building and leading a great board, and hanging in there against long odds for a very long time.

When you see me do something, say something, explain something, here or elsewhere, my approach and philosophy comes from my experiences and nowhere did I get more experience than my time working with Matt and Return Path. So if you are getting any benefit from me, you are getting that benefit from Matt too.

I hope to work again with Matt and his team on another company or two or three. Hopefully they won’t all take twenty years.

The Mobile Phone Generation

When those words are spoken, we think about the millennials or gen-z, both of whom have grown up with phones in their pockets or purses and are native users of smart phones.

However, I think my parents’ generation, those who were born in the 20s and 30s and are now in their 80s and 90s, are the generation who may get the most utility out of smartphones.

The last time I visited my parents, my mom asked me to put Uber on her phone. Since then, she has used Uber to go to doctor’s appointments and other places that she did not want to drive to. At some point she and my dad will stop driving entirely and then Uber and Lyft and other ridesharing services will be even more valuable to her.

I was visiting my parents the last couple days and while I was there my mom asked me to put Lyft on her phone, so she had an alternative to Uber, and also Instagram so she could see what her extended family is up to.

But maybe the most amazing thing, to me anyway, is that my mom has pretty much stopped using her land line phone. She tells everyone to call her on her mobile phone. For a generation that arrived on planet earth around the same time as the rotary telephone to be abandoning the landline phone in favor of a mobile phone is really something to see.

If you think about it, though, it makes all the sense in the world. As you find it harder to do things that you used to take for granted, having your own personal computer on you or near you, that allows you to talk to your friends and family, via audio or text, see what everyone is up to, and get someone to come pick you up and take you to Church, the doctor, the store, or anywhere else, is really incredibly useful.

Maybe my dad will read this and decide he wants one too.

Kickstarter Turns Ten

I noticed that the Kickstarter logo on my phone had confetti on this this morning.

So I clicked on it and the app loaded this message on startup:

I like that they ended that birthday message with “show me projects”. Even in celebrating ten years, 16 million backers, $4 billion in funding to 160,000 projects across 22 different countries, Kickstarter is reminding us that their mission is to help bring creative projects to life.

As Aziz Hasan, Kickstarter’s new CEO wrote in his blog post today;

We’ve accomplished a lot since 2009, but we also recognize that we still have a lot to do — creative work needs more support. At Kickstarter, that means we have a responsibility to evolve our service, strengthen our dedication, and increase our impact.

In the midst of all of that serious work, Kickstarter is also having some fun with their tenth anniversary. If you go to the Kickstarter 10 landing page you will find amazing project stories as well as some fun things to do there. Click on the Kickstarter 10 logo to get started on the fun.

So to help Kickstarter celebrate it’s tenth anniversary this week, go visit them, have some fun with the “easter eggs” and find a fun project to back too.

I plan to go do that now myself.

Paid Posts, Guest Posts, Etc, Etc

I get five to ten emails a week from people, companies, agencies, brokers, etc asking to post content here at AVC.

If you are one of the folks who send me those emails from time to time, you can stop doing that because there has not been a guest post here at AVC for over five years and I don’t have any current plans to do them.

Beyond that, the only guest posts that I ever ran here were from friends, colleagues, and AVC community regulars. I may do that again, but have not felt the urge to in a long time.

I do post a crowdfunding project most Fridays and a video or audio embed on Saturdays. But those are chosen by me based on what I am interested in or what I think you all would be interested in.

I have never been compensated for a guest post and would never accept compensation for a guest post. All the content that is published here, since the start in 2003, has been created by me or by people I know that I thought you should hear from.

I am not opposed to paying for promotion and I understand that influencer marketing is a big marketing channel now. Some of USV’s portfolio companies spend real money doing that.

But this space is not for sale, to anyone or any message. And it never will be.

Followership

In evaluating leaders, at the top of a company, or in the ranks of company leadership, an important quality that I look for is followership. Specifically, will the team line up behind this person?

Of course, leaders have to have other qualities. They need to have domain expertise if they are leading a specific function, they need to understand the needs of the business and the sector that it is operating in, and many other things too.

But what I have learned is that followership is super important. If the team doesn’t line up behind a leader, it is extremely hard for them to be effective.

For internal promotions, it is relatively easy to see followership and promote people who have it. You can also help people develop the management skills (listening, communicating, etc) that lead to strong followership.

When hiring someone from the outside, determining if they will have followership is harder. You can reference for this quality. But to some extent followership is a function of the culture of the organization. Someone who had strong followership in one kind of organization may not find it in another one.

It can take a leader some time to develop followership, particularly if they are hired from the outside. The team will need some time to figure out this new person, how they operate, and how they feel about them. But if a new leader has not developed the followership they need to lead the organization, or a part of the organization, within six to nine months after joining, then it is likely that a change will need to be made.

When developing your own organization and internal leaders, you should be very specific about followership and the need to develop it on your team. You should help mentor and coach younger managers on how to develop it and you should move quickly on leaders who don’t have it and won’t develop it on their teams.

It is always so impressive to me to see what leaders with strong followership can accomplish, when everyone is lined up behind them and delivering on what they ask of the organization. That is what I would wish for every organization, but sadly many don’t have it and they underperform as a result.

Funding Friday: Redacted Clothing

Our friend Saarim is funding an apparel line based on the redaction meme that has been front and center since the Attorney General took his pen to the Mueller Report. You can back it here.

Here are some images of the products he will be making if this project is successful.

I have closed comments today since I don’t want to host a discussion here of the Mueller Report today or any day.

Do The Right Thing

Airbnb has been operating in NYC and NY State for about ten years now and yet we still don’t have comprehensive home sharing legislation on the books in NY State. The reason is that the enemies of Airbnb, mostly the hotel employee unions, have been fighting Airbnb’s existence in NY State very effectively in Albany.

Many of the largest cities in the US and around the world now have comprehensive home sharing legislation on the books. It makes sense. It allows homeowners to share their homes legally and earn extra income but it also protects neighbors and neighborhoods from bad actors who abuse the system.

It is time for the folks in Albany to join that group and put fair and balanced and serious home sharing legislation on the books.

The good news is that we have good comprehensive bills before both houses of the state legislature right now.

Assemblyman Joseph Lentol and Senator James Skoufis have recently proposed comprehensive regulations for short term rentals in NY State.

An increasing number of New Yorkers rely on home sharing services not only when they travel, but also for the additional income they generate by opening up their homes here in New York.

The bills proposed by Lentol and Skoufis will create fair and restrictive rules to govern short-term home rentals in New York. Existing NYC legislation has unfairly penalized everyday New Yorkers for sharing their homes and left many confused about the law.

The proposed legislation bans short-term rentals in all affordable housing and also limits NYC residents to listing only one home. The bills also mandate data-sharing with New York City to boost transparency and enable NYC agents to target and take action against bad actors abusing the system.

The proposed legislation also allows Airbnb to collect and remit taxes on behalf of its users. Currently, NY State is missing out on badly needed tax revenue.

It is time for the NY State Legislature and Governor to pass clear and commonsense legislation to safely and responsibly regulate the home sharing industry. I would like to acknowledge Assemblyman Lentol and Senator Skoufis who have the common sense and courage to lead the way.