Monthly Archives: July 2007

An Early Stage Management Team–a VC’s perspective

I saw this in a newsletter I received the other day from one of the recruiting firms in Seattle.  These perspectives are provided by a highly regarded managing director at one of the premier Seattle VCs.  I thought these were strong points across the board:

One of the ongoing debates in venture capital is “What matters most, the team or the market opportunity??” For me, the answer is the team. Great teams, even if initially unfocused, are often able to discover the most promising market and establish a leadership position in that market.

So, what are the keys to a great early-stage management team? While the answer is as much subjective as objective, there seem to be a set of common attributes.

Soul of the company: The core of a great team is a person or two who embody the soul of the company. These individuals, usually the founders, combine vision, passion and expertise that function as a magnet for early employees, customers, partners and investors. Sometimes their role transitions to a more strategic (less operational) and culture-shaping role as the company progresses. But, their importance in establishing a vision and a culture early-on set the company?s foundation. For example, Sujal Patel and Paul Mikesell founded Isilon Systems in 2001 and are the soul of the company. Sujal continues to serve as CTO seven years later.

Complimentary fit of core capabilities: No individual or founding team has all the ingredients to succeed alone. A great team requires a complimentary mix of skills, experiences, personalities and business networks. The key here is fit. A visionary, high-energy CEO often needs a detailed, lower-key business partner to help turn the vision in to a reality. We often find with our portfolio companies that the tie-breaker between two equally qualified candidates is personality and culture fit.

Complimentary business networks are also an important yet often overlooked ingredient. Talented executives typically are able to bring an entourage of customers, partners, past work associates and best practices along with them. Hugh Crean, CEO at Farecast, has assembled a team of travel industry executives with past experience at a mix of travel companies (Expedia, Smarter Travel, Priceline). He has also supplemented his board with the former CEO of Expedia (Erik Blachford) and a Managing Director of a travel-focused hedge fund (Brad Gerstner) who have extensive and complimentary industry ties. A management team made up entirely of former employees from one company usually benefits from some team diversity, to leverage the entourage effect. The balancing consideration here is that individuals who have worked together in the past and share a common business vocabulary are often the most productive teams.

Experientially curious and intellectually honest: These two attributes are tightly linked. Genuine curiosity about what may happen and what, in fact, does happen when customers evaluate or purchase a product is critical to management success. This experiential curiosity is often more important than being a strategic superstar. Especially today when so many business inputs are variable, management teams need to be comfortable with experimenting quickly and learning from success and failure.

Intellectual honesty must follow from experiential learning. Empirical data is important to obtain, but an unbiased assessment of that data is essential to maximizing learning. Management teams that are willing to look at the facts and engage in an honest debate about the implications are often first to discover insights and implications. In emerging and rapidly changing markets, early access to market insights is critical to success. Curiosity and an unbiased analysis of data help great teams rapidly identify a winning approach in an emerging market. Glenn Kelman, CEO of Redfin, is an exceptional example of blending experiential curiousity and intellectual honesty.

Balancing conviction with humility: The last attribute to highlight is a cultural one. Business leaders need to have strong convictions about how to grow their companies. Business convictions are typically driven by a core set of values and past professional experiences. Without strong convictions, business executives struggle to constructively contribute their distinct perspective to a team decision making process. However, no one is fully able to see all aspects of a key decision or always have the best answers. Having the humility to recognize that your view may not be the only valid perspective and respecting the different viewpoints within a management team ultimately leads to better decisions.

It can be challenging to assess these attributes when building a management team or hiring a new executive. I believe that taking the time to get to know someone in both formal and informal environments increases the likelihood you get an accurate read on their fit with a specific team. In addition, company needs and the capabilities of the management team required to succeed change over time. Periodically stepping back to assess the attributes and fit of each management team member for the road ahead helps position a company for sustained market leadership.

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Filed under Business, Entreprenuerialism, Management

The Darjeeling Limited

cover art 

I saw a buddy of mine link to this trailer from the Apple website today in an update to his Facebook profile:

http://www.apple.com/trailers/fox_searchlight/thedarjeelinglimited/trailerb/

I hadn’t heard anything previously about this movie but it’s one I’ll, no doubt, check out in the fall.  The trailer is certainly appealing and the film immediately recalls great Wes Anderson  pics including Rushmore and RT (The Royal Tenenbaums. )  I personally love those two movies, and their odd and quirky flair, far more than the other well known Wes Anderson flic, Life Acquatic.  While Bill Murray and Owen Wilson were classic in that film, I felt like it dragged terribly and lacked the comedic wit of Anderson’s other flics.

The addition of Adrien Brody to this new, upcoming film is an interesting touch.  Brody fits the mold of Anderson’s characters well and I expect he’ll play nicely along side Owen Wilson and Jason Schwartzman, two Anderson film mainstays.  This has the makings of another classic film in the odd Andersen genre. 

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Filed under Flics, Video

Preliminary Joost Experience

I have no idea how this is working exactly. I’m experiencing Joost for the first time and, through the “widget menu” feature, I’m also able to post to my blog.

While this feature is quite cool, I’m mixed about my first Joost experience. The video quality is solid, not spectacular, the initial content offerings are decent, not spectacular, and I hesitate to confirmly state that this type of “lean forward” viewing experience for TV is definitively the future.

All that said, I’ll be back here in the future without hesitation to experiment and be entertained further.

More Information about the program.

Title : Punk’d – Office Meltdown, New Porsche, The Wedding’s Off!

Description : Just when Hollywood thought they could relax, that Punk’d was finally over, Ashton and his crew of misfits were at it again. Putting celebrities where they love to be: in the spo…

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Filed under Tech, TV, Uncategorized, Video

Coffee Names

I was in a Peet’s Coffee today when a friend and business colleague of mine did something unusual.  When the girl behind the cash register asked him for his name, he replied, “Ted.”  However, his name was not Ted and, thus, I shot him a surprised look. 

“Ted” explained to me that “Ted” is, in fact, his “coffee name.”  Why might one have a coffee name you ask?  In the instance where one’s name is either difficult to pronounce or difficult to spell, it makes sense to coin an alternative identity referred to, in this case, as a “coffee name.”  Here, it’s utterly irrelevant whether the person behind the cash register knows your true identity nor does it matter if the barista gets the spelling correctly on the coffee cup.  It’s a simpler, and rather humorous approach, to going through the near ritualistic daily process now of ordering a latte or mate or whatever your preferred beverage may be.  The only catch is making sure you remember your “coffee name” when the barista shouts it out upon completion of your order.   

BTW, “Ted,” if Jerry Seinfeld comes calling me about this post subject for future material is his stand-up routine, I’ll share with you some of the royalties…

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Filed under Random

Pirilloisms

The name Chris Pirillo gets tossed around frequently in the world of technology and digital media.  He’s a renaissance man of sorts within tech and, among other things, is largely responsible for the well-known Gnomedex conference in Seattle. 

Chris is frequently referred to in an Oprah-revered manner.  Where he is, is where one needs to be.  What he is thinking about is what one should be contemplating as well. 

I finally spent some time on his blog site tonight and, not to my surprise, found a lot of what he had to say fascinating.  This is a guy, mind you, who has been blogging for years–actually, he is probably one of the folks who created the form of communication. 

This post was interesting to me.  The cynicism is a generally common aspect of his blog.  And, I’m happy to say I’m starting to feel the EXACT same way these days on this subject (eg my recent post on Facebook SPAM):

http://chris.pirillo.com/2007/07/10/this-is-why-im-fing-sick-of-web-20/

I also appreciated this comic strip on the bottom of his blog:

Pirillo comic

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Filed under Cool Links & Stuff, Tech

Page Views Getting Poo Pooed

I was pleased to see today a headline news story from PaidContent.org, and originally found on AP, focusing on the recent Nielsen decision regarding web metrics and page views.  Simply, Nielsen is dropping page view measurements in exchange for time spent on a site.  There are several catalysts for this move including the following:  page views are too fuzzy of a concept, Ajax technology allows updating a page without reloading (and thus distorts accurate view counts) and video websites, which rely partially or fully on streaming technologies, can garner massive usage that doesn’t show up on view counts.

Websites have notoriously been inflating, intentionally or not, page views for a long time.  I had personal experience with this exact issue last year.  It also gets difficult sometimes to qualify exactly what page view is meaningful or not since many of the views may not be fully “impressionable” from an advertising perspective.  Hence a page view with no ability to display an ad on it is, to most business models, worthless. 

I see this being particularly useful to websites like Yahoo or emerging players like Pageflakes and live social media sites including ManiaTV.  AOL already is benefitting from the modification via the massive usage that occurs on AIM, another app not appreciated in the former world of page views.  Those types of websites have been continually affected by the challenge of measuring actual performance and success by page views which aren’t being defined by their products.  It will also be helpful in the increasingly prominent virtual world environments where places like There, Gaia or Doppelganger likely had no accurate way to describe page view activity and thus were stuck presenting their success (or not) via other mechanisms. 

My one question around this transition in measurement relates to how this will impact business models and financial modeling efforts going forward.  While I fully agree that “time spent” is a more accurate reflection of a sites value to users, what does the correlation look like between “time spent” and advertising dollars?  If an integrated or comprehensive sponsorship deal is cut, the point is moot.  But, if ads served somehow ties to activity on the site, and banner ads are still a unit being used, I don’t comprehend fully how this applies.  Another part of the announced news today relates to user “log-in” sessions being also standardized as a metric.  Perhaps that will become a more fundamental tool for modeling purposes and advertisement measurements.   

Other than that point of hesitation, this is a positive development and one that I’m sure many websites and tech companies are cheering about now this week.         

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Is Content Still King?

Throne 

When I first got heavily involved in the world of digital media at the beginning of this decade, I was quickly informed about one of the fundamental tenents of the media biz:  content is king.  I was exposed to that lesson fairly early on while grappling, with virtually no leverage, with studios, TV producers and music labels alike.  The deal typically offered by the content king was the deal the distributor took and all good content was considered “lost leader” programming from an economic basis.

However, over the past few years, the tide has started to shift.  TV and box office figures are flat and music sales are generally down.  IP distribution platforms that have relied solely on licensing “mainstream” content have failed to fully connect with users (eg Movielink, CinemaNow, Vongo and Napster) and have spent millions of dollars to achieve modest member penetration figures. 

Conversely, YouTube exploded on to the now dubbed “social media” scene with a technology and solution platform so elegant and effective the company came to control over 60% of the video sharing marketplace in 24 months and now has inked major deals with Google, who acquired them, and Apple, who is promoting them on its new iPhone commercials, in the last 12.  The YouTube business rose to prominence without a business model that included any content licensing of the “mainstream” content.  The company, simply put, developed a powerful platform solution, one of the clear keys to victory (per my recent post on the subject.)  Now, next generation video IP sites are also rising in popularity (well, on a publicity basis at least) and one would assume that the group which includes the likes of Joost, Slingbox, Orb and others will produce at least one or two more big hits. 

I don’t believe it’s far fetched to consider that a “Web 3.0” (man I hate the idea of that term though) world will be largely predicated around figuring out transformational ways of consuming media.  I consider this notion…which is a first stab I’ve laid out on this idea:

  • Web 1.0: The Age of Commerce (redefined–eg Amazon.com, eBay)
  • Web 2.0: The Age of Communication (redefined–eg MySpace)
  • Web 3.0: The Age of Consumption? 

In this next generation world, which I’ll certainly have to explore more in subsequent posts, will the object formerly known as the tail (technology) be wagging the dog (the content)?  Consider, for a moment, the recently publicized negotiations between Apple and Universal Music.  The original iTunes agreement between the two companies is coming to an end and the Universal Music plan is to move to a month to month model rather than agreeing to a deal with Apple that would include no shifts in iTunes pricing or royalties and certainly no splits to the labels for the iPod device sales.  Stepping back from the actual banter of the negotations for a moment, I find it interesting to simply recognize the fact that a leverage shift appears to have clearly resulted here in the first place.  And, I would even venture that, in the world where Universal Music and Apple are no longer in business together, a lose-lose scenario would result but UMG would feel the pain much more so than Apple.  To Apple, they’ve moved on from “just music” now within iTunes and are a massive platform for music, onlined education, TV programming, movies and more.  UMG, on the other hand, would be losing sales volume from the recently dubbed #3 music distribution platform.  Numero tres–just behind Wal-Mart and Best Buy.  Greed is being labeled as the negotiation buzzword but I think “stupidity” would be more apt to describe the act of walking away entirely from Apple.

I guess what’s more realistically happened here is a moderate shift in power where meaningful content companies are much more “on par” with meaningful technology companies than was once the case.  Digital piracy has much to do with that as does the natural innovation continually occurring inside tech companies (but not so much inside content companies.)  A YouTube could make the splash it did with virtually no content licensing activity in place but, to make it in the long run, they’ve come to realize that at least some deals with mainstream content solutions are important.  Social media and unformatted, viral video is certainly popular but it’s also not likely long-term in terms of critical appeal.  Talent and quality programming still have a home.  Similarly, a Universal Music Group must negotiate reasonable and fair agreement terms with an Apple or else suffer the consequences of even more burdensome piracy than already prevalent.  And the potentially landmark appeal process on the RS-DVR case with Cablevision, which not only appears to be casting legal doubt on the “RS” but also the “DVR” concept in general, clearly demonstrates how vital it is for technology and content to be lock-step in sync these days.   Anyone who has ever used a DVR knows how dramatically it changes the TV consumption experience–but, what good is a DVR without any content worth recording?      

As a user of digital media and a business person in the space, I’m certainly glad the leverage tides appear to have shifted some–it opens up the opportunity for technology companies and effective distribution platforms to play an even bigger role in helping define the media industry, and perhaps Web 3.0 activities, going forward.   

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Filed under Music, Tech, Video