1. In a recent interview you were asked “What challenges should startups be tackling that they’re not?” and you answered:
“I don’t think enough people have accepted that the machines have already taken over. They are patiently waiting for us to catch up with them. The next time you are in front of your computer, notice how much information you are entering into it. It’s unclear whether we will have a computer-enhanced human future or a human-enhanced computer future, but it doesn’t matter. Our world is now interdependent with the machines, and more entrepreneurs should be working on the symbiosis between the two entities.”
Q’s: How did you come to this conclusion?
Brad Feld:
I read a lot of science fiction and am constantly thinking about the future, both from the context of the present, as well as the context of the past (say – writing 40 years ago about today). When I let my mind run free, it’s clear to me that the machines have already taken over. From this has emerged our human computer interaction theme.
Industry Leaders of Tech 2.0:
What are the smartest entrepreneurs doing in this space?
Brad Feld:
Some examples of companies we’ve invested include Oblong, Fitbit, Makerbot, Orbotix, Sifteo, and Occipital. We think the entrepreneurs behind these companies are extraordinary.
Industry Leaders of Tech 2.0:
What criterion do you use to evaluate their work?
Brad Feld:
We focus obsessively on the product and the people involved. Do we think the product is transformational in the context of HCI? Do we think the entrepreneurs involved can create something amazing that plays into the transformation? If yes, then it’s interesting to us.
Industry Leaders of Tech 2.0:
What do you see as some of the dynamics and size of this market?
Brad Feld:
I don’t think about things this way. We believe the macro of everything we invest in is enormous, so we aren’t constrained by markets.
Industry Leaders of Tech 2.0:
2. Brad, in 2011 Business Insider placed you #1 on its list of the most respected VC’s. In your mind, Brad, what are the characteristics of the VC’s that you most respect and consider to be most effective?
Brad Feld:
1. Putting the entrepreneur first. 2. Taking an approach of working for the entrepreneur, instead of viewing the entrepreneur as working for the VC. 3. Having a clear strategy. 4. Being incredibly open, transparent, and TAGFEE about what you do. Fundamentally, it’s about being open, honest, direct, respectful, and humble.
Industry Leaders of Tech 2.0:
3. You have an amazing blog, FeldThoughts, where you’ve written across over 100 topics (from Venture Deals to Robots to Relationships to Failure - one of my favorite of your topics is pet peeves). The site boasts a healthy community, with typically several dozen comments per post.
Q's: How did the blog start?
Brad Feld:
I started writing the blog to learn more about two technologies I was interested in – RSS and user generated content. I wanted to understand (in 2005) what it was like to be a content producer as I viewed it as an area I was going to be very interested in investing in. I had no expectations around who would read it or get benefit from it – I just started.
Industry Leaders of Tech 2.0:
How has it evolved?
Brad Feld:
I’ve always loved writing and at some point the blog became my outlet for exploring thoughts, sharing experiences, talking about things I was involved in, and thinking out loud.
Industry Leaders of Tech 2.0:
What functions does it serve for you and you hope for your audience?
Brad Feld:
I[t] doesn’t serve a specific set of functions for me – it’s just part of me and how I lead my life. My hope is that anyone who reads what I write finds some value in it somewhere.
Industry Leaders of Tech 2.0:
What is its role within the context of your total activities?
Brad Feld:
I don’t think about it this way – I write whenever I feel like writing, about whatever I want to write about, which is often.
Industry Leaders of Tech 2.0:
4. In one relatively recent blog post, “What I’m Obsessed About At Work” you wrote “I found myself easily saying no to a wide variety of things that – while potentially interesting – didn’t appeal to me at all. I took a break, grabbed a piece of paper, and scribbled down a list of things I was obsessed about. I didn’t think – I just wrote. Here’s the list.
Startup communities
Hci
Human instrumentation
3d printing
User generated content
Integration between things that make them better
Total disruption of norms
If you are a regular reader of this blog, I expect none of these are a surprise to you. When I reflect on the investments I’m most involved in, including Oblong, Fitbit, MakerBot, Cheezburger, Orbotix, MobileDay, Occipital, BigDoor, Yesware, Gnip, and a new investment that should close today, they all fit somewhere on the list.”
Q: Brad, what are the “points of intersection” or “sweet spots” that connect your varied investor interests and how are they reflected and optimized in your investments?
Brad Feld:
We filter everything we look at based on our themes. If something doesn’t fit in a theme, we say no in 60 seconds. If something does fit in a theme, we go really deep on the people and product to determine if we want to be long term partners with the entrepreneurs.
Industry Leaders of Tech 2.0:
5. In 2007 you co-founded the successful VC firm Foundry Group, having earlier co-founded Mobius Venture Capital and founded Intensity Venture (you also are the co-founder of leading tech incubator TechStars (now a network of programs).
According to http://foundrygroup.com/about/, Foundry Group has invested in over 100 companies as an institutional investor and over 50 companies as an angel investor. Foundry Group’s latest venture fund, closed in October 2010, is $225 million.
“As true early-stage investors, we are comfortable making small seed investments (as little as $250,000 - $500,000)… Regardless of the size of our initial investment, the size of our fund allows us to continue to support our portfolio companies through their entire financing lifecycles… We believe that success comes from building a collaborative and supportive relationship between Foundry Group and the entrepreneurs and executives in whom we invest. Having walked the proverbial mile in the entrepreneur’s shoes, we understand where we can add value—such as helping build out a management team, thinking through strategic business development and growth opportunities, or providing advice on exit strategies—and we aren’t afraid to roll up our sleeves and get our hands dirty…
Foundry Group’s investing activity is largely driven by a thematic approach. The themes we pursue tend to be horizontal in nature and are often driven by underlying technology protocols and standards or emerging market trends and customer needs. Rather than looking for short-term hits, we focus on themes that have the ability to drive a cycle of innovation (and hence provide multiple investment opportunities) over a period of five to ten years or more.
Examples of the investment themes we are currently pursuing include Human Computer Interaction, Implicit Web, Email, Glue, and Digital Life. As one might expect, we are always in the process of evaluating current themes and investigating new ones. That said, we don’t strictly limit our investing activities to our themes—great entrepreneurs with great ideas still count for a lot in our book. In fact, our thinking about these themes can be born from and evolve as a result of our investment in an entrepreneur at the leading edge.”
Q: Brad, can you explain a bit in regard to how these investing themes are developed and evolve, and how they interact with the collaborative focus that you have with entrepreneurs across the funding lifecycle?
Brad Feld:
The themes are areas that we are intellectually interested in. We try to focus on broad horizontal technologies or shifts in the technology landscape. We then go deep in a handful of the themes. Our goal is to become thought leaders in each area with a view to investing in the theme over a 20 year period. Part of becoming thought leaders is working closely – and deeply – with the entrepreneurs in the themes we invest in.
Industry Leaders of Tech 2.0:
6. Thefunded.com, a well known site in which entrepreneurs can anonymously share their experiences with investment firms lists Foundry Group as the second highest rated fund on the entire site. One rating, entitled “Foundry Rocks” reads “We pitched to 30+ firms for our B-Round in 2009 and got a good dose of the VC world. Some good, some not so much. Foundry was the only firm where we did not have a direct intro. I started reading Brad's blog and felt that they really understood our space. An email, a phone call, a meeting with Brad, then a meeting with everyone and a term sheet within a month. The best part, a year+ into the investment - they really are who they appear to be on their blogs.”
Another, entitled “Brad Feld is a VC Rock Star” states in part ‘I have known Brad Feld since about 1990, when he was recently out of MIT and running Feld Technology. He has a deep technical background in software and IS design, and he became convinced as early as 1994 that "the Internet will take change the world."… WIth most VCs an introduction is almost a necessity. An introduction would obviously help with Brad but is much less necessary, I think. The reason is that Brad has already done a lot of pre-thinking and already knows the sectors he is interested in and the approach that he thinks people should take. So more than most VCs, he will already be up the learning curve… Brad is very product oriented. Rather than talking about the product, show it to him. If your site is not yet functional, show him a mockup. He likes entrepreneurs who are passionate about the product (e.g., Steve Jobs).
Brad tends to look at things from the point of view of the entrepreneur, in part because he has been one.”
Q's: Brad, describe some of the critical components of successfully dealing with entrepreneurs. You are highly visible and accessible. How do you find the best entrepreneurs, and what are the key factors in regard to locating, maintaining and managing deal flow?
Brad Feld:
I try to respond to everyone, I try to be direct, offer something of value when I can, and just be myself. I don’t think hard about finding the best entrepreneurs – I just get involved in the mix, engage deeply, and good things emerge.
Industry Leaders of Tech 2.0:
7. I’ve purchased two of your books, Venture Deals (with Jason Mendelson) and Do More Faster (with David Cohen) and can tell you (as I hope you’ve realized by now) that you are a genius. Venture Deals is subtitled “Be smarter than your lawyer and venture capitalist”. Common-sense insightful wisdom is contained throughout.
One nice feature is “The Entrepreneur’s Perspective” in which the ideas under discussion are presented through the eyes of the entrepreneur. One “The Entrepreneur’s Perspective” reads “Managing directors or general partners have the mojo inside venture capital firms. If you have anyone else prospecting you or working on the deal with you (associate, senior associate, principal, venture partner or EIR), treat him or her with an enormous amount of respect, but insist on developing a direct relationship with an MD or a GP as well. Anyone other than an MD or a GP is unlikely to be at the firm for the long haul. The MDs and GPs are the ones who matter and who will make decisions about your company”.
Another “The Entrepreneur’s Experience” reads “’Less is more’ when it comes to an investor presentation. There are only a few key things most VCs look at to understand and get excited about a deal: the problem you are solving, the size of the opportunity, the strength of the team, the level of competition or competitive advantage that you have, your plan of attack, and current status. Summary financials, use of proceeds, and milestones are also important. Most good investor presentations can be done in 10 slides or fewer”.
Q: Brad, not that it so easy by any means, but in one paragraph how would you distill what you have learned in the VC business so far, and what you would most like entrepreneurs to know?
Brad Feld:
There is no single VC archetype – every VC, and every firm, is different. Do you[r] research in advance so you know who and what you are dealing with. Be direct and honest all the time. Only work on things you are incredibly passionate about. Recognize that there are lots of ups and downs and failure in the entrepreneurial process – embrace the chaotic part of it. Nothing is easy so don’t embark on the journey unless you are willing to work incredibly hard on it.
Industry Leaders of Tech 2.0:
8. In “Do More Faster” you wrote a chapter entitled “Two Strikes And You’re Out” (Alex: Thankfully I still have both strikes to go) in which you write in part: “I live my life by a simple rule that I call the ‘Screw Me Once Rule’. I permit everyone I work with to screw me over once. When this happens, I confront them, forgive them, and move on. However, if they screw me over a second time, then I’m done with them forever…like a yellow card in soccer, you only get to trigger the Screw Me rule once. If it happens again. We’re done. Forever. I’ve handed out plenty of yellow cards and received a few. In a number of cases, my strongest relationships are with people who have gotten yellow cards. Fortunately, the list of people who have gotten the equivalent of a red card from me is very short.”
Q: I love this, because it strikes a productive balance between strict accountability, growth and even reconciliation. I love also your emphasis on process and relationship building, and, as they say, not letting a crisis go to waste. Can you say a little bit more about how this has worked for you?
Brad Feld:
I’ve used this approach over many years to make sure I spend time with people who I trust. I don’t have to agree with them, and they don’t have to agree with me, but the relationship has to be one of mutual respect and trust. This rule allows we to eject the people who don’t follow it from my life.
Industry Leaders of Tech 2.0:
Also, how do you prescreen people to begin with, eliminating from the beginning those who would be more likely to wind up in the red card category over time?
Brad Feld:
I don’t prescreen people – I just start working with them and give everyone the benefit of the doubt on the front end of the relationship. I believe you learn the most about people by doing things with them.
Industry Leaders of Tech 2.0:
9. I watched a sampling of videos of you. In this one you develop a very direct but common sense, even kind, basic set of rules of thumb for entrepreneurs to approach and interact with investors. Here you are on “This Week in Startups” (I love “This Week in Startups”, Jason is very good - I found out you also have a place in Alaska, “Angel group practices that make me vomit”, Jason walked through walls, you’ve invested in over 300 companies, being comfortable with and wearing your idea, etc.)
Q's: For entrepreneurs that may be interested in working with you and are thinking of approaching you to gauge your interest, what are some things that they should most keep in mind as they do their due diligence on you to assess potential compatibility?
Brad Feld:
There’s an enormous amount about me on the Internet – just go read it as a starting point. It’s easy to get to people who know me, or ask me directly and I’ll connect you if it makes sense. And don’t be bashful about asking me direct questions.
Industry Leaders of Tech 2.0:
Who are a few people in the industry that you would most like to interview if you were to sit on the other side of the table (who are you most curious to learn more about?)
Brad Feld:
I don’t have a list – I work hard to connect with whomever I’m interested in getting to know better. When I think about this question, it’s more in the context of people who are dea[d]. I would have loved to spend time with Einstein, Ben Franklin, Thomas Jefferson, Richard Feynman, and FDR.
Industry Leaders of Tech 2.0:
and what would you ask them?
Brad Feld:
I don’t know – I’d want to just have a long dinner with them and see where it goes.
Industry Leaders of Tech 2.0:
10. Brad, you have run 21 marathons as you work on your goal of running a marathon in all 50 states (I’ve run two marathons and haven’t even visited all 50 states). What does running mean to you, and what motivated you to take on this exciting goal?
Brad Feld:
Running is my form of meditation. It’s a chance to be alone, enjoy the planet, and let whatever thoughts are in my head wander around. I decided to go after the goal about a decade ago as a long form plan for getting into and maintain a high fitness level.
Industry Leaders of Tech 2.0:
11. Brad, finally, how do you get everything done? You serve on the boards of (from http://foundrygroup.com/team/bradFeld.php) BigDoor, Cheezburger, Fitbit, Gnip,MakerBot, MobileDay, Oblong, Orbotix, SEOMoz, Standing Cloud, and Yesware.
And that’s just the start. “In addition to his investing efforts, Brad has been active with several non-profit organizations and currently is chair of the National Center for Women & Information Technology, co-chair of Startup Colorado, and on the boards of Startup Weekend and the Application Developers Alliance. Brad … writes the widely read blogs Feld Thoughts and Ask the VC.”
In addition, Brad, you are very active in regard to tech community events and interviews, have a strong social media presence (https://twitter.com/#!/bfeld, http://www.facebook.com/bfeld, http://www.linkedin.com/in/bfeld), as noted run marathons, of course meet regularly with entrepreneurs and are quite accessible and who knows what else? The amazing thing is that you are a leader and maintain such a high level of quality across your professional pursuits.
Oh yes, in 2012, you published two new books as well (and you blog occasionally for The Huffington Post.
On Tuesdays and Fridays you spend two hours each helping little old ladies cross the street. Ok, I made up just the part about the little old ladies but the rest is true. Which of course begs the obvious question: Are there several Brad Feld clones running around helping you get all this done??
Brad Feld:
I work hard. I try to have a lot of structure around how I spend my time and I’m constantly experimenting with new approaches when I feel bored or burned out. Overall, it’s easy, because I love most of the things I do.
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