Today is my 43rd birthday. As I think about the last year, my good friend and CEO coach, Kirk Dando, comes to mind. On page 141 of his excellent book Predictive Leadership, Kirk writes:
Was 42 the answer to my life, universe, and everything?
Why big life transitions are so hard and why it is so worth it to keep at it
Life is like a record album, composed of songs to form the whole. From age 24 to 40, I had been playing the song "entrepreneur". I set a goal when I was 25 to one day found a tech company and take it public - by the time I was 40. Fifteen years later, I achieved that goal (my ultimate BHAG - "Big Hairy Audacious Goal"). Society didn't know about this very personal BHAG (only a few friends, my parents, and my wife did), and they expected me to keep playing the same song over and over again. This was natural, expected even. But as I wrote about in my "time is money or is money time" post, I was determined to step back and think deeply about my next move post being the CEO of Bazaarvoice. I didn't want to just set the same goal all over again (i.e., "now I'll found a sixth company and take it public again"). I knew I wanted to help entrepreneurs - I had always enjoyed doing so while I was at Bazaarvoice or Coremetrics but I had done so very sparingly due to the time constraints that I had (managing high-growth ventures takes a lot of time). I had love in my heart for Austin and thought I should do my part, along with many others like Josh Baer of Capital Factory, to help our scene evolve. So I jumped into that part of the arena - but in a more "grandfatherly" role as opposed to being the actual "man in the arena" (a nod to Theodore Roosevelt's powerful speech in 1910). As far as becoming an entrepreneur again and going back to that song, I had to think very deeply about it.
What I love about angel investing
Today is my 43rd birthday (you can read about what I learned over the past year inmy Lucky7 post about age 42). Looking back on my last year, I've grown to really love angel investing. My wife, Debra, and I run a family office that we call Hurt Family Investments. She takes the lead on philanthropic projects, and I take the lead on startup investing. For the past two years, we've invested the same financial amount in non-profits as we have in startups. We always agree on what to invest in - she has to meet the entrepreneurs before we make a decision - and that leverages the best of both of us. Debra is a contrarian thinker and was also born to entrepreneur parents. We both learned a lot about entrepreneurship growing up, and we actually started Coremetrics, my fourth business, together. She has terrific entrepreneurial instincts and there are a number of companies that I haven't started because I listened to her (thankfully), when I was playing the song "entrepreneur" on my record of life. Now, we are involved in 34 startups (mostly in Austin) and multiple VC funds that give us exposure to at least as many additional startups (you can see our portfolio here).
Facebook made the most epic tech company pivot of this decade, and on pivots in general
Pivots are gut wrenching. The more eyes there are on the company, the tougher they are. Therefore, public-company pivots are usually the most gut wrenching. Many public companies of the past ceased to stay public because their leaders couldn't face the pivot (change is a bitch - who moved my cheese?!), their business radically declined, and they eventually got delisted from NASDAQ or the NYSE.
Investing in natural network effects in SaaS
Sometimes startups we meet with (I've personally seen over 1,000 pitches in the last two years) talk about their network effect in a hopeful way. But most of the time it is just that - hope, and hope is not a strategy. But Bazaarvoice actually has a working network effect that benefits all participants: retailers, brands that sell through those retailers, consumers that shop at those brands and retailers, and Bazaarvoice and some of its partners. In other words, the more participants that are on the Bazaarvoice network, the great the effect of that network for the benefit of all. I wrote about this in detail in my first annual shareholders letter after Bazaarvoice became a public company.
Why B2C is so hard to get funded in Austin
My good friend and the founder of Capital Factory, Josh Baer, wrote a post last year saying that he will invest in your B2C startup. Well, so will we. We wrote the first check for ROIKOI, which went on to raise well over $1 million, and also made investments in Bigwig Games, Blue Avocado, Deep Eddy Vodka, Dropoff, and Threadover the past two years. We were also one of the first checks for Wisecrack, but that is based in Los Angeles, and invested in the Series A for talklocal, based in DC. And we are investors in several venture capital funds, including Lead Edge Capital, which holds early positions in Alibaba Group, BlaBlaCar, and other large-outcome B2C companies but these are not in Austin so I guess I'm diverging from my point of this post. In any case, that is a total of eight B2C company investments (if you include Wisecrack and talklocal) out of a total of 33 startups we are involved with, representing 24% of our portfolio (and 18% if you exclude Wisecrack and talklocal).Real Massive also has a kind of B2C dynamic, even though it is B2B, so maybe I should count them too as they are Austin-based. But our primary focus is SaaS, for which we have holdings in 19 startups (57% of our portfolio). Both Bazaarvoice and Coremetrics were/are SaaS businesses and we have the most experience to bring to that category. SaaS is also far less risky than B2C, and that brings me to the real point of this post.
Observations on the Austin startup scene with Jason Seats, Managing Director of Techstars Austin
Techstars has become quite a force for startups, recently surpassing $1 billion in capital raised for the startups that have graduated from various Techstars program (see the stats breakdown). That is a staggering figure, to say the least. So I decided to kick off the New Year with an interview of our own Jason Seats, Mananging Director of Techstars Austin. I've been proud to be a Mentor of this great program since it launched.
What I learned from my top three Lucky7 posts in 2014
December 5th marked my second year of blogging personally (I had previously been a corporate blogger for 7 years at Bazaarvoice as our CEO). I began blogging primarily as a service to entrepreneurs - a form of giving back to the community that I believe is the greatest force for change. If you are wondering why my blog is named Lucky7, it is as a tribute to my amazing mother, who passed away two years ago. Myfirst Lucky7 post on December 5, 2012 was a revisit of my manifesto written to the Bootstrap Austin community on March 15, 2005, months prior to starting Bazaarvoice. Much has changed in the nine years since and it wasn't unusual at all for Austin startups to raise seed capital vs. bootstrapping in 2014.
How to select the right gift for someone you appreciate (in business)
With this being the season of giving and saying thanks, I wanted to share some thoughts on the right way to do it. Unfortunately, it is common in business to rush through your to-do list and quite often that means not thinking hard enough about what gift to give, especially when it comes to giving chotskies at tradeshows. In business, there is much mediocrity.
What I've learned about eating animals - and what the future holds (Part Two)
This is Part Two of Two in a series about our love for food, cultural practices, nutrition, the way we treat animals, what the Torah (Bible) says about eating animals, and where I think the puck is going (Part Two is the one bit about entrepreneurship, or future forecasting what I believe will be a very lucrative opportunity for the right entrepreneurs). This is more about what I've learned about these topics over the past four years in adopting a mostly vegan diet than my typical Lucky7 posts about entrepreneurship (with the notable exception I just mentioned above). I will not be offended if you stop reading now, and you now understand the context if you continue to read this series. I want you to know what you are getting into before you proceed; I believe this series will be a Matrix-type learning for you ("take the red pill, Neo") and once you know the truth you cannot "unlearn" it. You have been warned. :) Having said all of that, this is a topic that I'm very passionate about. My drive to write this series comes from the many questions I get from people about my diet, so I'm writing this to openly share what I've learned and this will also be more efficient - and comprehensive - for me than telling bits and pieces of this learning each time in conversation. My drive also comes from losing my father to a heart attack because of his diet. He was too young to pass away, and I miss him very much. I wrote a tribute to him here - he was an amazing entrepreneur and man.
Before I begin, I would like to thank my good friend, Ryan Cush (one of our best for many years at Bazaarvoice and an executive of Food on the Table, recently acquired by The Scripps Network), for discussing and reviewing this series with me. He is a wise and good man, and I always enjoy collaborating with him.