The Third Board Meeting

Short, sweet and to the point.

That pretty much sums up our meeting this month. Interestingly, most of the board wasn't there in person. Brad and Jerry were on the east coast, David was, I think, in Cali somewhere and only Niel and I were in the room with the speaker phone.

Interestingly, it was one of our more collaborative interactions as a group.

Maybe it's just me getting a little better at prep and pre-meeting meetings. More than likely, though, it's my board being supportive and guiding me in the right direction. I may be old by startup standards, but it turns out I can still learn.

Jerry and I, for instance, are doing weekly coaching sessions. This is one of those added bonus type things you get when you have a great board of directors. Didn't know Jerry Colonna is an executive coach? Either did I, but he is, and a damn good one. He coaches several people, including the CEO's of other startups. Once a week for about an hour we talk about what it means to lead in a start up; what turns your crank, your fears, your weaknesses and what you can do about improving them, how your folks are doing, where to focus, what personal things might be going on that effect life and work, a broad range of things, all useful. And he does it in a way that's supportive but firm. He asks tough questions that make you pause and really think through issues. Fun? Not the word that pops immediately to mind, but when we're done it feels like I've really learned something, and most of it was in there already. Jerry just helped find it and bring it out.

Yea yea.. I know.. sounds all touchy feely. To a degree it is, but only a little. The results are real. Having an experienced, resourceful, intuitive, honest and damn smart guy to talk things over with who's got a very objective point of view is incredibly helpful in figuring out how to do what you need to do.

We scheduled the board meeting for our usual 3 hours. I distributed the pre meeting materials a couple of days beforehand as easy to print PDF's for everyone and set a simple 4 point agenda. 3 'handling board business' type things and one major item: Products and Markets.

We put spent about 10 minutes on the first three points and the rest of the meeting on an overview presentation of the business, products, product mixes, potential markets and associated (est.) revenues from each market. With Brad, Jerry and David on the phone and Niel and I in the room, the conversation flowed very well.

Although the presentation was about 40 pages, we only used about 5 or 6 of them for the entire conversation (with a couple of references to other pages for numbers or target markets). I led them through each of the key slides, we discussed what it meant, bounced back and forth between the concepts a few times, expressed opinions, disagreed, debated, found agreement and came out with a pretty clear picture of what we should be doing as a business.

Our problem has been the typical startup problem: too many opportunities and potential directions to go in. If you build a really flexible feature rich platform that can do a lot of things and can be used in a broad range of potential markets..what's the business you focus on and go after?

The presentation framed (most) of the best potentials (but substantially more than we could do with the resources on hand). First, we got agreement that this was a good overview to work from (focus…), we looked at the four big areas, decided pretty quickly that the first two were low hanging fruit (addressed reasonably broad markets with self serve tools and could be implemented with reasonably minimal effort) and we should just do them. 2 down, 2 to go. The third was by far the biggest revenue potential, but also the hardest to nail down.. so we skip that for a few minutes and look at the fourth area and quickly determine we like it, but it’s payoff isn’t big enough right now and we’ll back burner it for the time being (ahh.. more focus, take something out of the mix).

Back to the third big potential. Each of the board members likes a slightly different set of 2-3 primary markets. We debate this for awhile but we don’t settle on specifics. So, I asked them to each think about the complete list (about 15 markets) and for each of them to get back to me with their top three markets. This was, essentially, assigning homework. Brad then comments that between the 4 of them, once we nail the markets down, they could likely get several dozen companies to open their doors to us for a pitch. If we included our angel network (and we have something of a dream team of angels), we could potentially make that a couple of hundred leads to work with. Nice.

Jerry suggests I set a due date for each director’s ‘top three’ (let’s make it 4 days from now). We all agree. Wrap up.

Total meeting time? About 90 minutes. Could we have stretched it out another 90 minutes to fill the entire 3 hours scheduled? Probably, but why? It was good to have the time available if needed, but what we really needed was to get one pretty major thing done and we did it efficiently and reasonably quickly. The bonus was an hour and a half of extra time for a bunch of time starved folks. I even got a ‘great board meeting’ text message from Brad after the fact.

Lesson learned? Keep it focused, get your board business wrapped up quickly at the front end and spend your time on what you really need the collective intelligence of the board’s help with. No less, but also, no more.

And if you can, give them some of that time back,. Time’s one of the few things your board members are likely short of. They’ll appreciate it more than you know.

And yes, they all did the homework and via email we narrowed it down to 2 markets (and maybe a 3^rd) within 4 days. Great stuff and exactly how I envisioned an active and engaged board of directors really adding value to a startup.

What Every Startup Needs: A King Arthur and a Merlin

King Arthur or Merlin. Which are you?

I suspect that many if not most successful high tech companies have both as founders. A King Arthur, the front man, the person facing the world and the overall leader, and a Merlin, the magician behind the king who, with Arthur, puts together the magic of the company like products, strategy, teams, vision and council to Arthur.

Think Steve Jobs and Steve Wozniak of Apple, Chad Hurley and Steve Chen of YouTube, and of course, Captain Kirk and Spock of Star Trek (OK, that's a stretch, but you get the idea).

Startups that have both of these archetypes in the early stage mix seem to generally do better than those that don't. Of course, you don't have to have these two, you can start with one or the other, but if you want to truly get both great product and market traction, and do it quickly, you'll be better off if you have both.

So ask yourself: Do you have both? If you don't, and you're a Merlin, get yourself an Arthur. If you're the King already, don't try to do it alone.

Blogs and Newspapers

I got an email today from someone at The Denver Post announcing that they were going to do a business oriented blog.

I’m writing to introduce and invite you to a new blog now featured on the Denver Post website.

blogs.denverpost.com/bizbuzz/category/technology

This blog will feature information and commentary about developments in the rapidly-changing world of technology, but heavily focused on Colorado and surrounding regions.

OK, interesting. Might be worth reading and I'll check it out. But then this:

While this blog – and all of our Denver Post blogs – are not replacements for news, this kind of interaction is designed to supplement and hopefully strengthen the exemplary news coverage you find in our newspaper daily.

This is interesting. They're saying: "This isn't news or meant to compete with news". To a degree, that's true, it's context for news. It's also, often, The News to me. It's all I read, if there isn't a relevant link. Where do newspapers think we get news now? Yes, often, it's an article in the NYT or WSJ if it's national, or the Denver Post or the Boulder Camera if it's local. But, almost always, I read that story now as a link from a blog. Someones blog recommended the story (or referenced it in a context I'm interested in). Either that, or from Google News, Digg or Reddit. I haven't read a paper newspaper in years, and only rarely do I go directly to newspapers websites anymore. I get to them through the context of someones opinion.

If newspapers really wanted to drive the creation and consumption of news on the internet, they should consider using their editorialists as context creators. Encourage and empower those folks writing their editorials (i.e. their blogs.. pretty much the same thing) to talk about things we're interested in, and then reference the stories in their papers (and if they were really smart, other papers and information sources as well). That, assuming I like and or trust the editorial/blogger, is much more valuable to me in finding relevant reading than context free news stories.

Boulder Smartness, education or attitude?

Is Boulder, CO. really America's smartest city? David Cohen in his Coloradostartups blog tidbits section pointed me to the Forbes magazine article on this.

The article, dated December 15th, 2006, in Forbes, titled Amercia's Smartest Cities is here.

They seem to be using two criteria: Percentage of population with Bachelor, Masters and PhD degrees, and 'degree of stickiness' (keeping people in town after they graduate).

I have to wonder if this is a valid criteria. At the same time, I have to admit, Boulder IS a great place (considering it's actual population of a few hundred thousand people) for finding really talented people (or attracting them).

This focus on education level, though, bothers me. Education is a great thing, but at the same time it's also limiting in that it can create a sort of fence around what you're willing to accept as the right way to think about (and effectively, how to do) something. It can limit you. I've known more than my fair share of MBA's from very big named schools that KNEW the only way to size up a market and allocate R&D money, for instance, because they learned it in school and by god, that was how it was done. Period.

I'm not against education, if anything, Colorado needs more and better systems around education, but equating 'smart' with 'education' isn't, really, 100% accurate. Some of the smartest people I know didn't finish college. Hell, the guy who designed the hardware motherboard for the first Macintosh was a high school dropout.

But, the other allures of Boulder remain. Beautiful surroundings, ton's of things to do, healthy lifestyle, interesting people, an open atmosphere for new and offbeat ideas and yes, a high degree of 'smartness' in the air. I like to think education is just one part of that equation though, and, likely, not the biggest part.

Web 2.0 and VC's= maybe a good thing afterall.

There's been a huge amount written in the blogosphere about how Web 2.0 with it's low startup costs and rapid growth patterns negates (or at least minimized) the need for traditional venture capital.

Fred Wilson of Flatiron Partners in NYC has an excellent blog post up on how, and why, Web 2.0 and VC's mix very nicely, thank you. He sums it up with the following graph:



His premise is simple. The cost, in the early years, of a startup has dropped significantly. As the business takes off, all the usual business expenses (hardware, bandwidth, sales force, etc.) still pop up. So, the costs rise and need for capital required from VC's kicks in.

The upside is much of the risk is removed for VC's in the early stages (due to the low costs) and, assuming your company survives and grows, more of the equity remains in the hands of the founders (because much of the risk was removed along the way, requiring less equity be given up).

Nice trade off all around.

4 hours of snow in Boulder

LOTS OF SNOW. Three pictures taken of a table on my back deck. 3:30pm, 5:30pm and 7:30pm. Check it out:

The Second Board Meeting

So, our second board meeting for ClickCaster was yesterday. We had everyone in attendance: Myself and two of my folks (Pete and Marsha) and our directors, Brad, Niel, Jerry by phone, and a guest (David, one of our investors) who's likely to join the board shortly.

We went over some of the mechanics (approving the minutes from the last meeting with some input on how they should be short and highlight via bullet points what was discussed, how to best report finances consistently, etc.) and then went over the current state of the business.

This was an excellent discussion. We went over our activities over the last month such as development, new product capabilities, growth, status of existing customers and contracts, and results of interviews with potential customers but we spent the bulk of our time talking about where the business should go.

We looked at competition and determined we were well positioned. We looked at and discussed other companies our board members were familiar with that had similar business models but were farther down the road in the market and we were able to draw excellent conclusions on what directions we should be taking with our product development, market focus and definition of what the business really was all about.

One thing that really stood out and isn't always obvious to a Web 2.0 type company is an obvious one: Are you a consumer business serving end users or do you sell the platforms and tools necessary to enable others who already have relationships with targeted customer bases? And who's, really, driving your development? The 'perceived' end users customers or the businesses who will actually buy your product and use it to reach their customers?

Are you building your feature set based on what your developers (and their friends) think are cool or on what paying customers are willing to pay for? I know, obvious right? Product management 101 stuff, but it's easy to let those 'cool' things take precedent over the less cool things you can actually sell. Often they overlap, but not always. It's something every resource constrained early stage company needs to watch carefully, and manage even more carefully.

This is a question that I think more and more of the current crop of internet startups will be facing. With the recent pull back from the market (and taking 'parts' out for other future businesses) that Odeo (a company similar to ours in some respects) recently announced, it's pretty clear that not all consumer focused businesses are standing on solid ground.

The first board meeting was great for setup of what's to come and this, the second board meeting, showed us how bringing the full intellectual, market knowledge and general experience of a group of seasoned investors and fellow entrepreneurs has immense value to a young startup.

Most of what was discussed are things we would very likely have gotten to without the boards help and direction, in about 3 months (if we were lucky) and more likely 6 months or more. And in our world, 6 months is, literally, a lifetime.

What's becoming obvious is that by having a highly engaged board that's looking hard at your business, meeting monthly and communicating alot in between meetings is that you have a focusing effect that's exceptionally difficult to get without a group like this helping you to clearly think through the issues.

Often it's simply easier to 'let that problem go' for another month or two with the belief that it'll work itself out. What we did was identify where the weaknesses are and come up with a clear plan on how to address them and shore up the problems, do it with some real discipline and focus, and get ahead of the market, just enough-not too much, to become a major player.

I suspect many boards are more like 'reporting' exercises where the companies execs run through status and what they're planning. There's alot of nodding, a few questions and everyone goes out for lunch.

Not so with our board. We did have lunch (during the board meeting) but what we came out with was a much better view of things like: what our real business is, where we sit in the market, who we need to focus our sales and marketing efforts on and how to get there, much more quickly, than we could have done without the direct input and hands on involvement of a fully engaged board of directors.

We have work to do, and some of it will be difficult and less than fun, but most of it's exciting stuff that moves us to where we need to be. Fast, and with multiple big brains guiding the ship. I'm loving it, and find myself already looking forward to the next board meeting.