Sisyph.us - Erik's personal blogs

There's and article in the Times today about the state of Venture Capital. The gist is the economy is tight and things are bleak. They see a shakeout coming in the VC industry and amongst startups.

There's no question that times are challenging.

I can't even describe the roller coaster week we've had and it's only Wednesday.

But bad times can build great companies that build value for investors. Buy low/sell high is far more lucrative and less risky than buy high/sell higher.

I started in the technology business in 1989. 1989 was a bleak time in the sector, you had to love what you were doing and believe in your product to work for a start up then. Jump forward until the late 1990s, I'm working at Yahoo! in the epicenter of the internet revolution. A different kind of person came to came to work at Y! in '98 and '99. They came not because they believed in what we were doing, but to stick around long enough to vest, flip their shares and cash out a million or two. The same thing happened in the VC industry, in a bubble all kinds of new VC firms show up to try to ride the wave. Most of them fail.

I do a little surfing (funny I write that as we're getting another foot of snow). To get on a wave you need to paddle before the wave starts to break, once a wave is breaking, it's too late to ride.

If you're for real, now is the best time to do a start up. It's a lousy time for wannabes to do a start up. It's also a lousy time for wannabe VCs and investors (and there are as many of them as there are wannabe startups).

This is not the time for a quick flip. This is the time to identify a business problem and solve it. This is a time for patient founders and investors to build important companies.

Foneshow raised a venture capital round last summer. We're starting to think about our next round.

It feels kind of like this:

You want to be going as fast as you can, but you need to make sure you don't run out of runway.

You're trying to avoid this:

We have an Apple Mini hooked up to the 42" Panasonic Commercial Plasma that hangs over the bar in our office. Here Liza and I chat with Erik (and Ellie!) and Mike - and watch CNN in the picture-in-picture!

Sleep is for wimps

"In what sounds like a dream for millions of tired coffee drinkers, Darpa-funded scientists might have found a drug that will eliminate sleepiness"

Here's the article from Wired.

Re-Blogged from Found/Read

“There is nothing more difficult to take in hand, more perilous to conduct or more uncertain in its success than to take the lead in the introduction of a new order of things.”

— Niccolo Machiavelli

I found my 3 year old daughter reading The Prince the other day (we're a precocious bunch). Her older sister should beware.

As promised, here's an in situ picture of one of our new cheap-o whiteboards (this is the one in our conference room). The whiteboard was $10.97, the Ikea lights over it were another ~$20.

We think it looks pretty good.

The key to the success of a start-up is the people who work there. We are very picky about who we hire. Here are some tips to help stand out.

1. Write a cover letter. Don't write a fluff cover letter. The cover letter is where you point out how your resume fits the job requirements. If you don't write a cover letter, we have to figure out why you might be a good candidate. You know why you'll make a good candidate, tell us why. This is your first chance to demonstrate to us your powers of persuasion. If you're a biz dev professional, and can't explain to us why you are a good fit, why should we think you can explain our products to partners?

2. Spell check. Spelling errors pretty much immediately kill a candidacy. It might seem petty, but if you lack the care and attention to detail to spell check your resume and cover letter, it is also likely you lack the care and attention to detail to work here.

3. Do some research. Read our blog. Try the product. Ask questions.

4. Have a passion. Any passion.

Startups live on white boards. But if you go to Office Depot or Staples you will discover big white boards are really expensive. We did some pricing, and discovered to entirely cover one of our office walls with white boards would have been a more than thousand dollars (nothing gets the ideas flowing better than an entire wall you can write on). I am way too cheap to pay that much.

Then I discovered Thrifty White Tileboard from Home Depot. A four foot by eight foot sheet of tileboard from Home Depot is $10.97 (a comparable size white board from Staples is about $400). It works like a charm. Rumor is you get some ghosting after a year or so, but it's so cheap you can just replace it then.

That's our tech start up tip for the day. Photos are be forthcoming.

Foneshow's new offices are right over an awesome coffee bar called JavaNet. We opened an account with them. Coffee is an important part of any start up.

I suppose the fact that I remember this video kind of dates me...

Edit: Moronic typo fixed

Foneshow is one year old today. One year ago Nic and I came up with the invention that none of our competitors had thought of.

There are lots of people doing audio on the cell phone (just look at out competitor module), no one else is doing it the way we are.

Never try to close a VC round during the summer.

The problem is magnified if you're using a syndicate of several firms. The timing issues are a nightmare. Your VC will go on vacation (times however many VC firms are in the deal). Your lawyer will go on vacation. The VC's lawyers will go on vacation. Things that should take days, take weeks instead.

I'll be making a number of posts over the next few weeks detailing how we put together a VC investment.

The New York Times had a great article today about the ongoing ConnectU/Facebook kerfuffle (pdf). There are many lessons here for those starting up a technology company.

They quote R. Scott Feldmann, an intellectual property lawyer and a partner at Crowell & Moring.

Ideas, Mr. Feldmann explained, are protected either by trade-secret contracts or by patents and copyrights. “Trade secrets may be maintained indefinitely,” he said, but “it does not appear that ConnectU had Zuckerberg sign a nondisclosure agreement, and disclosing a trade secret to someone without doing so would ordinarily result in loss of any trade secret status.”

At the same time, Mr. Feldmann said, “copyright will not protect ideas themselves, only their expression” — in a Web site’s underlying source code, for instance. But if Mr. Zuckerberg was an unpaid, casual worker at ConnectU, and not an employee, then “he owns the code,” Mr. Feldmann said. Thus, even if the ConnectU plaintiffs can prove that the codes of two social networking sites were similar (an argument that Facebook seems confident it can refute), the Winklevosses might have no claims on Mr. Zuckerberg.

“On the surface, it appears ConnectU will have some challenges,” Mr. Feldmann said.

Given all the sturm und drang this case has kicked up on the blogosphere (now also in the offline press), the thing that keeps running through my head is the old Peggy Lee song...

Please make your San Jose to Boston redeye (flight 470) leave a little later.

You guys know I love you. I've even forgiven you for leaving me at JFK for a few days last February (a few flights on United reminded me what really bad airline service was like). Like any "outside the valley" tech entrepreneur, the SiliValley redeye is a staple of my work life.

But a redeye that leaves at 9PM and arrives at 4:50AM defeats the purpose of a redeye. It leaves too early to fall asleep easily and it arrives too early to get anything done with your extra time in Boston.

If you could change the departure time to 11PM, many technology entrepreneurs in New England would be grateful.

Thanks.

Be back soon.

Here's some linky to Scott Converse and his great BigCo vs. Start Up post.

Marc Andreessen (of Netscape fame) has recently started blogging and he's really good at it.

If you're thinking of starting (or working at) a start up, you should go read this.

Here's a taste:

Second, in a startup, absolutely nothing happens unless you make it happen.

This one throws both founders and employees new to startups.

In an established company -- no matter how poorly run or demoralized -- things happen. They just happen. People come in to work. Code gets written. User interfaces get designed. Servers get provisioned. Markets get analyzed. Pricing gets studied and determined. Sales calls get made. The wastebaskets get emptied. And so on.

A startup has none of the established systems, rhythms, infrastructure that any established company has.

In a startup it is very easy for the code to not get written, for the user interfaces to not get designed... for people to not come into work... and for the wastebaskets to not get emptied.

You as the founder have to put all of these systems and routines and habits in place and get everyone actually rowing -- forget even about rowing in the right direction: just rowing at all is hard enough at the start.

And until you do, absolutely nothing happens.

HT to Fred

There's a Japanese Proverb: "Deru kugi wa utareru." It translates to "The nail that sticks up gets hammered down." Nowhere is this proverb more true than in big companies (speaking as one who has been a nail standing proud in a big company). Working at a start-up is a whole different world. In a start-up everyone needs to be the nail that sticks up. While doing your job is necessary, it is not nearly sufficient.

Foneshow will soon be hiring our first non-founders. Those first few hires are key to defining the culture of the organization. We want people who get pissed off at things in the world that don't work well. But they can't just rant about them, they need to at least try to do something about them. We want people with strong opinions who will make cogent arguments supporting those opinions. We want people who will passionately argue their position. I'd be surprised if we hire people who don't have their own blogs or podcast. There's no room for standing on past achievements, it's all about what comes next. It's not about following instructions, it's about getting stuff done. Getting rich can't be the goal (although it might be a nice side effect). The goal is to change the world.

In the words of Thomas Jefferson, "all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed." If you're good at suffering evil, then you're likely not a good fit in a start up. We want rabble rousers.

David Beisel on the "Concurrent Startup Idea Generation and the Pervasive Copycat Fallacy". Someone else is working on your idea and you're far better served by talking and networking than being quiet.

Scott Converse from ClickCaster on starting a company: You're over 40 and you want to start your first company. Now what?. Starts off as a riff on Fred's post about founders over 40, but Scott expands and most of his best points are not about age.

Brad Feld sums up why iPods are a bad platform for podcasting.

Carnival of the Mobilists 72 is up.

Yahoo paid $52 million for Bix? I'm not getting something here, I don't think Bix had an audience yet and the technology is merely OK. I had put this one at ~$10-20 million.

NYT on cell phone video.

Speaking of the New York Times... How cool is this picture?

Finally, I've been a San Jose Sharks fan since the came into existence. I was a season ticket holder from 1991 until I left the bay area in 2004.

Ron Wilson needs to be fired. He actually needed to be fired after the Edmonton series last year, but better late than never.

The US Supreme Court raised the bar for obtaining patents on new products that combine elements of pre-existing inventions. I'm glad they're doing something. The patent system in the US is a mess.

If the combination results from nothing more than “ordinary innovation” and “does no more than yield predictable results,” the court said in a unanimous opinion, it is not entitled to the exclusive rights that patent protection conveys. “Were it otherwise,” Justice Anthony M. Kennedy wrote in the opinion, “patents might stifle, rather than promote, the progress of useful arts.”

Because most inventions combine previously known elements, the court’s approach to deciding what sort of combination is so “obvious” as to be ineligible for patent protection will have widespread application. The result will be to make patents harder to obtain and defend.

“Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress,” Justice Kennedy said. He added that such patents were also undesirable because they might deprive earlier innovations of “their value or utility.”

The opinion was unanimous.

It's about doing a start up outside of SiliValley.

It's called Outside the Valley, check it out.

Duh, but a surprising number of entrepreneurs don't.

Also use (but don't obsess about) your competitors services.