Posts by hugo

How I Got the Monkey Off My Back – Today Was a Good Day

Posted by on Apr 4, 2014 in Both Sides Of The Table | 0 comments

I become a venture capitalist in September 2007 – exactly 6.5 years ago.

I spent my first year developing proprietary deal flow and learning the business and then the Sept 2008 / Lehman Bros collapse / financial meltdown happened.

As a result I didn’t write my first venture capital check until March 2009 – exactly 5 years ago. That company was Invoca, which just announced a $20 million fund raise led by Accel.

Invoca

I remain a huge supporter and am very proud of our accomplishments and hugely optimistic about our future.

5 years ago. It turns out it actually takes time to build a high-growth business with differentiated intellectual property and roll out large, enterprise-class marketing solutions. I remember a few years ago people (LPs mostly) used to ask me why I didn’t have any realized returns to show. At the time I pointed out:

“If I had realized exits almost certainly it would be because I invested in a company that failed. Lemons ripen early, great companies take time.”

Still. It was frustrating having to answer what I considered an obvious question to people who I thought would have known better.

In 2010 somebody posed the question on Quora, “Is Mark Suster a Successful Venture Capitalist?” I thought it was a fair question and I gave an honest answer at the time. I divided success into the phases of venture capital and 18 months into writing my first check here was my view (details on each in the link above).

1. Sourcing high-quality leads: 9/10
2. Working with early-stage teams:  coaching, mentoring, setting strategy, rolling up sleeves: 9/10
3. Helping companies get to next financing round successfully: I was just beginning this phase in Sept 2010 and said so.

Since then?

Not just the $20 million round at Invoca, the $70 million I helped us raise at Maker Studios, but I was intimately involved with the earliest funding round at DataSift and every subsequent round which has recently announced $42 million led by Insight Venture Partners and $70 million in total.

datasiftI’ve now been involved with many other successful foll0w-on financings. So I think it’s now fair to rate me at 9/10 on follow-on fundings.

4. Getting Exits / Driving LP Returns: This was always the knock on me. The monkey on my back. “Ok, so this guy can write a blog and source deals but can he make any money?” Yup. Heard that knock many times. And in an industry measured by a decade rather than a year it’s hard to refute so you mostly just move on in the conversation. This is what I wrote on that Quora answer from Sept 2010

“I think the best VCs help drive exits alongside their entrepreneurs.  I have done 6 VC investments – all within the past 20 months.  None have exited.  That’s normal.  If they did it would be because there wasn’t a huge outcome.  

 

But the truth is only time will tell whether I’m financially a successful VC and I’m comfortable in my skin saying that.  Any VC 3 years in saying otherwise would either be exaggerating, lucky or an extreme outlier.”

So it’s now March 2014 – 5 years since I started investing. How is my scorecard looking? Here is the first 3 months of 2014 …

2014

                                                                                                                                                                      .

1. AOL Acquires Gravity for $90 million

gravity

2. Apple – Burstly / TestFlight

burstly testflight

And now this just in …

3. Disney Acquires Maker Studios f0r $500 million and with earn-out potentially up to $950 million.

disney maker studios

This investment started with Dana Settle (Greycroft) and I each putting in $750,000 into a young company doing less than $1 million in sales and has blossomed into one of the fastest growing companies in Los Angeles if not the entire country. Because it’s video it is understood so poorly by the normal tech elite but the company has an amazing combination of content production, marketing, talent management and technology (tech team of nearly 60) and I can’t think of a better partner and home to develop this great company than Disney. I feel confident in saying that Maker will perform to any even higher level in the years to come as a result of this partnership.

And while of course the founders & management deserve all the credit for Maker’s success and will no doubt get their accolades in the press, from an investor perspective, Dana & I were hugely active in the company for years behind the scenes in recruiting, PR, product strategy, M&A, etc. And while the press always likes to mention the other big media investors who participated  in the investments (Time Warner, Canal+, Astro, Singtel, Elisabeth Murdoch, Robert Downey, Jr. – there were many), the reality is that Upfront & Greycroft were the largest shareholders in the company.

As a result of this activity I have now personally returned significantly more capital in my 5 years than I have invested. I have huge confidence in the companies that I’ve backed that are still active.

I’m already back to work. I am closing 3 new fundings in April (2 new, 1 follow-on).

At a minimum, I’m glad to have the “exit question” off my back in 2014. I helps me be even longer in the positions I am still in.

All I could think about this morning was this …

featured image from 500px

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Asking a More Beautiful Question

Posted by on Apr 4, 2014 in Leadership Now | 0 comments

If our questions are so unimaginative and predictable that Google can guess what we’re asking before we’re even three words in, says Warren Berger, then we aren’t asking the right questions.

“It’s the questions Google cannot easily anticipate or even answer that we should be asking. Asking the right questions helps us figure out what matters, where opportunity lies, and how to achieve our goals.”

We are drowning in answers. What we need today are good questions. In times of great change, doubt is the norm, so good questions, not answers, have the edge. John Seely Brown says, “If you don’t have a disposition to question, you’re going to fear change. But if you’re comfortable questioning, experimenting, connecting things—then change is something that becomes an adventure. And if you can see it as an adventure, then you’re off and running.”

Beautiful Question

In A More Beautiful Question, Berger shows how the most powerful forces for igniting change is the question. Example after example demonstrate how often off-beat “why” questions were at the foundation of many innovations. But he cautions, “Just asking why without taking any action may be the source of stimulating thought or conversation, but it is not likely to produce change.” He suggests the following sequence: Why? What If? and How? It brings some order to an otherwise chaotic an unpredictable process.

We must even question the questions. Neurologist Robert Burton says we should step back and inquire, “Why did I come up with that question? Every time you come up with a question, you should be wondering, What are the underlying assumptions of that question? Is there a different question I should be asking?

Finding that one big beautiful question for you is not easy. It is a process—a way of looking at life. “You don’t have to be a recognized expert; you just have to be willing to say, I’m going to venture forth in the word with my question and see what I find. As you do this, you’re in a strong position to build ideas and attract support. Because, whereas people are more likely to ignore or challenge you when you come at them with answers, they almost can’t resist advising or helping you to answer a great question.

Live the questions.


* * *
(A More Beautiful Question has more than enough examples of questions that led to great ideas to fire up your brain. Interestingly enough, in place of a standard index, he has an Index of Questions.)

• Why do kids ask so many questions—and more importantly, why do they stop? (p.39-70)

• Considering that today’s schools were built on an industrial model, is it possible they were actually designed to squelch questioning? (p. 4-60)

• Should businesses replace mission statements with “mission questions”? (p. 162-165)

• How do the most innovative companies foster a “culture of inquiry”—and how can any business or organization do likewise? (165-174)

• What has worked for me before—and how can I bring more of that into my life now? (p. 193-194)

• Can I use productive “small failures” as a means of avoiding devastating “big failures”? (p. 199-202)

• Why did George Carlin see things the rest of us missed? (p. 39-40)

Quote
A beautiful question is an ambitious yet actionable question that can begin to shift the way we perceive or think about something—and that might serve as a catalyst to bring about change. What is yours?

 

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Analysis Must be Implemented by People to Provide Value

Posted by on Apr 3, 2014 in Curious Cat Management | 0 comments

Guest Post by Bill Scherkenbach

photo of W. Edwards Deming with a cat

Every time I look at this picture, I think of Dr. Deming’s words to drive out fear and take joy in your work. We were talking in my home office when Sylvester saw a good lap and took it. Our conversation immediately shifted when both Dr. Deming and Sylvester started purring.

The greatest statistical analysis is nothing if it can’t be implemented by people. But people learn in different ways. Some like good stories, others like pictures. Only a few like equations. Dr. Deming always liked a good laugh; and a good purr.

By what method do you get your analyses implemented?

Bill Scherkenbach taught with Dr. Deming at the Deming 2 day seminars and received the Deming Medal and the author of several books on Deming management principles.

Related: How to Get a New Management Strategy, Tool or Concept Adopted part 1 and part 2Getting Known Good Ideas AdoptedRespect People by Creating a Climate for Joy in WorkPlaying Dice and Children’s Numeracy

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How to Quickly Position Yourself as a Trusted Advisor

Posted by on Apr 3, 2014 in Jill Konrath | 0 comments

How can you quickly position yourself as a trusted advisor when meeting someone new?

Here are 3 strategies you can use to immediately be seen as a credible, potentially invaluable resource:

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15 Ways to Set a Positive Example as a Manager

Posted by on Apr 3, 2014 in Great Leadership By Dan | 0 comments

“I’m not a role model… Just because I dunk a basketball doesn’t mean I should raise your kids.”

– Charles Barkley

When you’re a manager, like it or not, you ARE a role model. All eyes are on you. The example you set has an enormous impact on your direct report employees and those around you. If you are a newly promoted or hired manager, your employees will watch, listen, and learn about what matters to you, what’s important, what to do and what not to do. If you’ve been a manager in the same role for a while, they already have learned, and the norms you’ve perhaps unconsciously established are more powerful than that “Our Company Values” poster on the wall.

In addition to influencing your employee’s behavior and attitudes through your day-to-day behaviors, you’re also having an impact on their long term development. We all learn powerful leadership lessons from the examples – both positive and negative – from current and former managers.

Do you want your employees to conduct themselves with the highest level of professionalism? You may want to review following list and ask yourself the following questions:

Is this what I would expect and want from my employees? Am I setting the right example? What kind of lessons am I teaching?

Note: none of the items on the list below are made up – all are from the Great Leadership files of actual manager behaviors. Hopefully not my own.

1. Arrive to work and meetings on time, and don’t make a habit of leaving early.

2. Pay attention to your own development. Be a humble and continuous learner, and be transparent about your development needs and what you are doing to overcome them.

3. Ask for feedback – be open to it and listen – and be willing to give caring, constructive, and frank feedback to others.

4. Be open to change – especially when the change isn’t your own idea. When a change is announced, employees will be looking at you to see how they should react.

5. Don’t participate in gossip, spreading rumors, or speaking poorly about your boss, fellow managers, or about another one of your employees.

6. Be discreet and respect confidences.

7. Keep your non-work related business to a minimum. And don’t ask your employees to assist with your non-work related business (i.e., picking up your clothes at the drycleaner).

8. Treat everyone – regardless of their level or degree of influence – with respect.

9. Tell the truth – be a straight shooter, with no white lies. Own up to your own mistakes.

10. Keep the cynicism and sarcasm to a minimum. It poisons the work environment.

11. Maintain a sense of humor – about yourself – but never at the expense of others.

12. Pitch in and lend a hand doing the dirty work now and then.

13. Watch your language – with few exceptions, don’t swear. I don’t care what the studies say – there’s no place for F-bombs in the vocabulary of a professional manager.

14. Don’t lavish yourself or your management team with perks that are off-limits to the rank and file.

15. Maintain a professional distance from your employees – you are their manager, not their friend.

While you may not agree with every item on the list, wouldn’t you prefer to work for a manager who follows most of them?
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