Venture Deals explains it all

Venture Deals, by Brad Feld and Jason Mendelson, is a highly useful, and highly readable, overview of how venture capital works, with lots of very-specific examples and descriptions.
This isn’t a high-concept book full of abstractions; it’s a detailed explanation of the people and vocabulary you’ll encounter in the VC world. And it’s more than definitions: it also explains the reasoning and motivations.
I have been building a startup for twenty years, have been involved in several acquisitions and funding events, and I learned a lot from this book. It got me thinking about my business in a new way. If you’re at all interested in raising money for a business, or even if you just want to understand how this important part of our economy works, I highly recommend it.
Nota bene: This isn’t any kind of coded message about Logos. It’s just a book I read and really liked.

If you’re learning a lot in class, you’re doing it wrong.

I recently spoke with a student majoring in Computer Science who was interested in working for my company. When I asked if he understood a particular concept, he told me he hadn’t taken that class yet.
I understand learning about English composition in a class on that subject, or even picking up some physics in Physics 101. But learning about the subject you’re majoring in, and the field in which you hope to make a living, in a classroom? There is a better way.
You only get a few hours a week in the classroom. Don’t waste them trying to understand something new. You have the textbook, the syllabus, the library, and the Internet. Read ahead! Use the precious little time with a professor to have something explained a second way and to ask the questions that remain after you’ve already absorbed the basics. Understand the big picture, be familiar with the vocabulary, and impress your instructor with your advanced comprehension and thirst for knowledge.
Better yet, skip the first batch of classes in your major. The first few classes are designed for people who know nothing about the subject. They’re easy to test out of, and a waste of your tuition dollars to take. Every slot you free up at the front end is a more advanced class or elective you can take on the back end, increasing the value of your tuition and distinguishing your otherwise predictable transcript.
“Everything in software changes every three years,” the student told me in the course of our conversation.
True. So why would I hire someone whose primary education was in a classroom? Three years out of school they’ll be out of date. I want to hire people who have demonstrated that they can learn and grow on their own, who used their classroom time not to be introduced to new subjects, but to consult an expert and to supplement their self-education.

The Maxwell Hotel (Seattle, WA) is perfect

Full disclosure: The owner is a friend of mine. But that’s why I can really say it’s perfect: I got to tell Michelle what I wanted in a hotel before she built it. You made it this way just for me, right, Michelle?

The Maxwell Hotel is exactly what I want in a hotel.

First, it’s new: spotlessly clean (solid surface floors — no grimy carpet!), everything works, modern fixtures, appliances, flat-screen TV, DVD player, iPod-dock alarm clock, etc. (I hate old hotels.)

Second, no nickel-and-diming: parking and Internet are included; there aren’t lots of extra fees. You can’t beat the value.

Third, it’s got a Keurig coffee machine, a microwave, and a fridge. And the fridge isn’t full of expensive mini-bar junk, it’s just got cold half-and-half for coffee. (There are snacks and beverages at the front desk, and a 24 hour full grocery store just two blocks up the street.)

I’m a frequent traveler, and I generally stay in chains. They’re boring, but safe and predictable. The Maxwell Hotel is a boutique hotel, and the interior decorating is more whimsical than you’ll find in a chain. But feature-wise it’s almost exactly like the best, newest Hilton Garden Inn. Only much cooler.

(Okay, this isn’t the perfect Seattle hotel. To be perfect, it should be in the center of downtown with spectacular water views from the 30th floor. But then it would be $600/night. The Maxwell is on the north side of Seattle Center. But the price and the easy free parking makes up for that, and you’re about 2-3 minutes from anywhere downtown by car/taxi. Or better yet, walk into Seattle Center and take the monorail right downtown for $2. This is probably the only hotel in the city for which the monorail is a useful bit of public transportation instead of just an amusement ride!)

Where the semantic web breaks down

We’re using semantic web technologies for a lot of cool stuff in Logos Bible Software, and I’m coming to appreciate the tools and structures, especially when you control  both the data creation and consumption. It’s also cool to see more semantic data showing up in web pages, microformats, etc.

Hearing Clay Shirky speak this week sent me back to his site to re-read articles, including The Semantic Web, Syllogism, and Worldview in which he points out “In the real world, we are usually operating with partial, inconclusive or context-sensitive information.”

That point was made especially clear for me when I noticed in my teen daughter’s Facebook stream that she recently acquired a sister: a girl I’d previously known as her second-cousin. Also, according to Facebook, my young daughter is married, to her best friend.

OpenGraph and the semantic web are opening up a whole new world of semantic data. But without context – knowing my daughter, for example – it can be just as messy and inaccurate as the raw data that preceded it.

You’re not eating enough Georgian food

I was introduced to Georgian food on a trip to Moscow, and ever since I’ve been marveling that there isn’t a Georgian restaurant in every city in America. (Maybe it’s the confusion between the Republic of Georgia and the land of peach cobbler?)

“Georgian cuisine uses … walnut, aromatic herbs, garlic, vinegar, red pepper, pomegranate grains, barberries and other spices combined with the traditional secrets of the chef’s art … which make Georgian cuisine very popular and unique.”

Or, as Eli puts it, ”What are we going to do with all these walnuts?”
So we’ve got to make do at home. Start with khachapuri (cheese bread, recipe below); the lamb in pomegranate marinade is tasty and not too exotic, and I like the equally accessible potatoes with walnuts.
You’ll find most of the ingredients familiar and readily available; it’s the proportions and combinations that are unusual. Lots of herbs, lots of flavor, lots of happiness.
I studied this khachapuri video carefullly, and translated it to my American kitchen with great success.
Dough:

2 cups yogurt (matsoni = Bulgarian yogurt = I used plain “regular” yogurt)
1 teaspoon baking soda
1 tablespoon vinegar
2 eggs
4 oz butter
3 cups of flour

Filling:

2 lbs cheese (I found the traditional sulguni/suluguni, but have seen half-feta, half-mozzarella suggested as a substitute)
2 eggs
4 oz butter

I let the dough rise for two hours in a warming drawer. Split it in two and and shaped and filled as shown; brushed with egg and milk wash and sprinkled with salt, baked at 400 F on a buttered tray until golden brown. (I had only purchased 1 lb of cheese, so I made half the filling and it was still wonderful.)
I meant to include a photo, but we ate it all. It looked like this, and can look like these.

O’Reilly TOC publishing conference

I’m back from the Tools of Change for Publishing conference. This was the best year yet! I met a lot of people, saw many old friends, and got caught up in the excitement of the next phase of publishing.

I am thrilled about the direction we’re going at Logos, and to see so many publishers getting ready to make the changes necessary to succeed on digital platforms.

It was all exciting the first time, too, in the late 1990’s. I enjoyed talking this week with fellow attendees of the ACM Conference on Digital Libraries ‘98 and the early NIST e-Book conferences. E-books: an overnight success decades in the making! And it’s funny how many of the products in the exhibit area look exactly like ones we saw back then; only this time the prototypes are shipping. Now it all feels “real.”

The slides for my session Network Effects Support Premium Pricing are online at the session page. (These slides have the outline I spoke from. I didn’t show it during the session because I hate reading bullet points off slides, and didn’t have the time to do all the art.)

It looks like the Ignite presentation (20 slides that auto-advance every 15 seconds – stressful!) isn’t online yet, but you can read about how Sean Boisen stumbled upon it on his blog.

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On failing our customers

I try to stay accessible, publishing my email address, answering my own phone, participating in our forums, etc. In normal days this means I get occasional complaints from customers, and I’m able to make that customer happy and hear about weak spots in our product or systems.

But now I’m hearing from upset customers every day. And I don’t blame them: wait times to talk to customer service or technical support can be over half-an-hour. (It hurts me to type that!)

We released Logos 4 on November 2nd. Knowing that upgrades always create extra customer service, we planned appropriately. We scheduled overtime, extended our hours, opened on Saturday, and even catered lunch for the team the first few days.

It’s not been enough. Within a couple weeks our reps were burning out, and we had to cut back the extended hours. We started hiring, but too slowly. We kept thinking “the rush is almost over.” But it’s still not; Logos 4 upgrade sales were more than double my expectations, and in the first eight weeks of our release we had as many users move to our new platform as move to our platform in an entire “normal” year.

And now we’re facing limits we didn’t even consider. We need to recruit, interview and train more service agents. We need to shuffle departments to make more space for desks and chairs. We’re out of phone lines; we’ve hit capacity on our telephone trunk line. (The one I thought would last us forever!) And our six-year-old phone system that was supposed to grow with us? It was discontinued the year after we bought it, and we’re having problems expanding it to support a second receptionist.

Our goal for customer service is every email answered in 24 business hours, every phone call answered — by a person – in a few rings, and no more than two minutes, if any, on hold.

These are ambitious goals, and we’re not meeting them today. I’m sorry. But we’re working hard to get back there as fast as possible.

Lonely at the end? Yes, so keep a few of the pirates…

Derek Johnson is a young entrepreneur here in Bellingham who’s been setting the world on fire with Tatango and his “cover the earth” social media strategy. I think he’s going places.

Today he posted about how there’s now not one other person at Tatango who was there at the start.

It’s true, the people who are a perfect fit for a startup or small business often don’t fit when the business grows. People and businesses change. Employees who like or thrive in the chaos of a startup don’t always like the structure and organization of a profitable business. And the people who work well in a stable, profitable business often don’t have the attitude (or the courage!) to work on a shaky startup.

I joke that Logos in the early days was staffed by pirates. We were a motley crew of ignorant youth, corporate refugees, failed entrepreneurs, dropouts, disc jockeys, roofing salesmen… a lot of people you wouldn’t have hired, myself included.

Today people apply to work at Logos because they’ve heard we’re a strong company with good pay and benefits that treats people well. (It’s true! And we’re hiring!) And we hire people with relevant education, experience, and a track record.

It works well for everybody. And there’s less yelling in the office.

But some of those pirates were amazing people. Some could do tech support, write code, and fix the company van, all in one day. One built a loft for developers to sleep in, up under the eaves, and baked a blackberry pie from berries picked behind the office.

And most importantly, they weren’t afraid to speak the truth.

18 years later, we’ve managed to hold onto a few of the pirates. 2 of 3 founding partners are still here, along with some family members, employee #1, and a few from the second year.

And I love these people. (Most days.) Because they will do whatever needs to be done. Because they do remember that time when… Because they never call me ‘sir’. And because they will fearlessly speak the truth when others keep their mouths shut.

Derek, it’s going to get even more lonely. As you move from success to success, which I am sure you will, you’ll find more and more people who tell you what you want to hear. People will join you because you’re a meal-ticket. They’ll work for you because they want a stable, safe job. And that’s great.

But keep an eye out for those few crazy pirates who can grow with you. People you can count on today, and tomorrow, and who will be there to give it to you straight when no one else will. Even when you don’t want to hear it.

Solve tomorrow’s problem (or get out fast)

Necessity is the mother of invention, and as a consequence, lots of new products address today’s felt needs.

If you’re developing a tech product, though, I think it’s a better plan to address tomorrow’s needs than today’s. Because by the time you develop and market your product, today will be history, and gone with it may be the problem you were trying to solve.

Remember the dedicated e-mail devices that were sold in office supply stores? A small screen, keyboard, and phone-line connection so that you could get on e-mail for a couple hundred bucks instead of buying a more expensive general-purpose computer.

Not a big hit, because the price of the computer was falling every day.

The family radios? (Higher-powered, more phone-like walkie-talkies.) Released just a few years before everyone and their dog got a much more useful cell phone.

Of course you can be too early. E-books are hot now, but none of the pioneers of the late 1990’s are with us today.

There is money to be made solving today’s problem, and if you’re able to move quickly and exploit a window in time, good for you. But if you’re making a large investment, it’s worth looking down the road.