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Preview: Chase Market Velocity

Chase Market Velocity

Market Velocity is about reaching that point when your business takes off. Two key themes drive market velocity. First, the principles Mark Leslie has espoused with his Enterprise Sales Learning Curve framework. Second, smart Internet-based marketing.

Updated: 2018-03-02T09:39:02.062-07:00


Website SEO Issues


Hi,   My name is Jessica Lee I'm a Search Specialist.    I wanted to share some major issues I found that are currently harming your search rankings:   • There are many technical problems on your site, such as: HTML errors, missing Meta tags, broken links etc. Confirm this by visiting or   • There are very few external links pointing to your site. Confirm this by scanning your website with   • There are several 'bad' or 'suspicious' links pointing to your website. Confirm this by checking with Google Webmaster Tools.   • There are other websites duplicating your content, which adversely affects your website rankings. Confirm this by visiting   I can help you fix these issues and get your website ranking on the 1st page of Google.    I'd be happy to send a proposal for your website, including prices and results achieved for other clients. If you are interested, just email me back or provide me with your phone number and best time to call.    Best Regards, Jessica Lee SEO Specialist   PS: This is not spam. I studied your website, prepared an audit report and believe I can help with your website promotion. If you do not want me to contact you, you can ignore this email or ask to remove and I will not contact again1[...]

Re: Chase's contact info


Dave wants to stay in touch and would like your latest contact info Here's what they have for you now: Phone Number (Mobile) Confirm or Edit For your safety, this link expires in 48 hours Featured on: Why did you receive this email? The sender wanted to confirm that above contact info is up-to-date Your displayed contact details are what they currently have for you Your info is 100% secure and private between you and sender Please email us with questions at Happy staying in touch! Confirm or Edit Your Contacts, Synced Anywhere Learn More Brewster, Inc. 11 East 4th St, #2F New York, NY 10003 Unsubscribe [...]

Favor: 2 minutes & $1 to help my company win a contest


Background: My startup has a goal to incorporate the most important member of the care team in healthcare into the care process. This person is frequently the most ignored member of the care team. I call them people/individuals. The healthcare system calls them "patients". When the patient is incorporated into the process, that's when the best outcomes happen (and significant money is saved). We've worked hard to make this happen and are getting some great recognition (features in the Wall Street Journal, NY Times and a recent invitation to the White House). This has all been accomplished before taking a dime of outside money. If you are interested, follow the link in my auto-signature for some coverage we have received. We're at the early stages of the company but things are going very, very well - great customer response, etc..

There's a relatively new model of building support for a company that helps make prospective customers aware of a product you may have heard of -- crowdfunding. The most famous/successful of these is Kickstarter but they don't allow healthcare projects. So MedStartr has filled that void and is led by a seasoned veteran of healthcare and one of the key Kickstarter team members. We are excited to be one of the first projects on MedStartr. MedStartr has already received coverage in the Wall Street Journal, TechCrunch and many publications as it's filling an important void.

My request to you: Please take 2 minutes and go to our Avado page and read about it (if you'd like) and click on the "Back this project" button. Unfortunately, it doesn't allow a $0 contribution or I'd ask for that. The minimum is $1. It's not about the money but the signal of support that is important. This will help us win the contest for the most supporters which will help us. Of course, if you'd like a signed t-shirt, fitbit, itouch or ipad, we'd love your support (details at the link). In the process, this will also foster much-needed innovation in healthcare.

Thanks so much! I rarely, if ever, send these types of emails and appreciate your patience/consideration. If nothing else, this gives you a quick update on what I'm up to...

Dave Chase
Google Voice: 425-835-DAVE (3283) - rings all my lines...local, cell, etc.
Twitter/Skype: chasedave

Latest coverage & commentary from the NY Times, Reuters, Forbes, Wall Street Journal, Washington Post, Bloomberg, TechCrunch, VentureBeat, Business Insider, KevinMD, Huffington Post, etc.

Bruce C


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When is the time right for Renaissance vs. Coin-operated Sales?


I’m posting more frequently on Altus Alliance’s blog. Here’s a link to my latest post over there -- When is the time right for Renaissance vs. Coin-operated Sales?


Prospect Theory trumps "Economic Man"


This post talks about multiple research examples that strongly indicate people choose guaranteed small benefit over a non-guaranteed but potentially large benefit. Interestingly, this only applies to decisions not based purely on the math and probabilities.


"This experiment, repeated again and again by many researchers, across ages, genders, cultures and even species, rocked economics, yielded the same result. Directly contradicting the traditional idea of "economic man”, Prospect Theory recognizes that people have subjective values for gains and losses. We have evolved a cognitive bias: a pair of heuristics. One, a sure gain is better than a chance at a greater gain, or "A bird in the hand is worth two in the bush." And two, a sure loss is worse than a chance at a greater loss, or "Run away and live to fight another day." Of course, these are not rigid rules. Only a fool would take a sure $100 over a 50 percent chance at $1,000,000. But all things being equal, we tend to be risk-adverse when it comes to gains and risk-seeking when it comes to losses.


I can see how this applies in some of the partnerships that I strike. For example, if I’m working on a revenue share deal I could offer a guaranteed payment or we could do a straight split (e.g., 50/50) of revenue that came in. Even though it may be the majority of the cases would result in a greater payment to the partner, I could see how they’d prefer that my company take on the margin risk. Let me make this more concrete. Let’s say I have a widget to sell that we can predict should fetch at least $100 and where the partner would be happy with $50 out of every unit sold. In reality, it may be that I can sell that widget for $120 some times and $75 other times. As long as I believed I could net north of $50 of margin per sale, I’d go with the flat fee to the partner and they’d probably be happier that way.


I know of a real world example in the travel industry. Most vacation property managers pay a set percentage of the rental fee they collect (separate from direct costs). There’s a property manager who runs one of the best property management firms out there who takes a different approach. They have worked out an arrangement where they pay a fixed per night fee to their property owners. It turns out that they are good at yield management so they are able to get a much better financial return by paying the fixed amount. Both parties are happy.

GM gives $1.5B jolt to online advertising


From Media Buyer/Planner:


“GM, in what could signal a no-look-back shift to digital marketing, will dedicate half of its $3 billion budget to digital and one-to-one marketing in the next three years. As the country’s third largest advertiser, GM’s switch may be the online marketing shot heard round the automotive world.


The news is not good for traditional media and may be exacerbated by a directive from GM’s Brent Dewar, vp-field sales, service and parts in North America. Dewar told Ad Age late last year that the auto maker will try to persuade its regional dealer ad groups “to shift their focus to digital vs. spot TV” starting this spring after the dealer co-ops, which spend $500 million annually, are revamped.


Other car makers are also upping online buys; Hyundai will double its online spending in 2008 over 2007.


Auto dealers are increasingly shifting their spend to online, with a particular focus on customer ratings and reviews and online video. 59 percent of dealers say they plan to use video on their own websites within the next 12 months, up from the current 33 percent.”




One of the more unique Keiretsu Forum companies - Banshee Riverboards


This company out of Boise is popularizing a new sport called riverboarding. Banshee Riverboards received much of their funding from Keiretsu Forum members. Check out the demos of their product below.

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Google: The world's largest ad agency


I wrote a series over 3 years ago for where I explored the advertising market in 2010. One piece of this predicted that Google would be the largest ad agency by 2010. So far, it looks like most of what I wrote is playing out. Here’s a look back at that segment of the series. In the third of three parts, Dave Chase of the Altus Alliance predicts that in five years Google will be the world's biggest ad agency. Editor's Note: In part one of this short series, Dave Chase explored where interactive media and marketing will be in five years, and described the media consumption habits of a hypothetical married couple, Mike and Jill. Then, in part two, he discussed the backend technology that could serve ads to the couple. Will Google be the biggest ad agency in the world by 2010? In part one, I laid out a future of how internet-based advertising models will pervade the TV world. If you buy it, then changes will inevitably happen in the ad industry. I predict that Google will be the largest “ad agency” in the world by 2010. Dramatic industry shifts usually don’t happen from obvious places. Ample evidence of that exists, whether you look at the music business, the encyclopedia business, the newspaper classified business, the retailing business or many others. Companies that too narrowly define their competition inevitably have their business cratered from unexpected places. Aggressive, growth-oriented companies -- Google and Wal-Mart are just two examples -- don’t care about pre-existing industry dividing lines. If it weren't them, some other organization would gladly eat away at incumbents’ businesses, even though the leaders of the change are attractive bogeymen for those under attack. If you take a step back, the purpose of ads and search are to connect buyers with someone selling what buyers want (even if they don’t know they want it yet). In both cases, fees are collected from the people who have something to sell for connecting them with buyers of those items. No one is rushing to categorize Google as an ad agency -- “they’re in the search business.”  You don’t have to study Google very hard to realize they aren’t limiting themselves to the “search business,” which is increasingly hard to define in any case. It’s important to recognize that Google isn’t charging for search: their income comes from advertising. As the old saying goes, if it looks and quacks like a duck, it is a duck. If they were considered an ad agency, they’d already be in the top five with a much stronger trajectory than any of the top five agencies. You may be saying, “Wait a minute, they are more like a media outlet than an ad agency” (which is largely true today), but withhold judgment for a moment and some interesting insights can be drawn. To begin with, they are already doing media planning if the business has a high volume of clicks and it’s highly likely they are working on ways to make that easier (and thus scale to smaller advertisers). If I walked into most offices of the leaders of the largest ad agencies in the world today and stated that Google/Yahoo!/MSN are their competitors, at best I’d get a polite laugh. They may say that I don’t “get” the ad agency business. Having been on both sides of the challenger/incumbent equation, I can say unequivocally that not “getting it” is usually an advantage for the challenger. The challenger isn’t shackled by the current way of thinking or, perhaps more importantly, the current business model. Like virtually every other company (especially a public company), Google and “their competitors” are inspired by what will make them the largest sum of money[...]

Lipstick on a Pig


My first experience working on a web-based media property was in 1995 at the dawn of the commercial Internet. I was one of the original members of the Sidewalk team that swelled to over 300 at one time. My original job was striking partnering deals with newspaper and other print partners which provided me a great education on the media business and print media, in particular. We genuinely wanted to strike favorable deals with them but most looked at Microsoft with great suspicion as Microsoft was reaching the height of its power so we couldn't expand as fast as we would have liked and contributing to an unfavorable financial picture. To the potential partners, they thought that we were putting lipstick on the Microsoft pig.Despite the fact that I worked for the deepest pockets in the world (Microsoft/Bill Gates) and Bill had OK'ed that we'd go $500MM in the hole to go after the long-term prize of local ad $$, it was my first lesson that even deep pockets run short of patience. Lesson: The best way to build a long-term sustainable business isn't to build it banking on the ongoing largess of deep pockets. Rather, it's building it a step at a time building off of cashflow. With Sidewalk, we hemorrhaged money as planned. Even today, though it hasn't been around for years (Citysearch bought it; more on that later), I still have people tell me it was one of the best sites on the Internet. Sites like Seattle's Sidewalk were truly great websites. Unfortunately, they weren't great businesses due to their cost structure.The following is the tale of the evolution of how the deep pockets start to cut off your "air supply" and how it relates to pigs and lipstick: I became the general manager of cities to ensure that Sidewalk got far more efficient in how we rolled out and ran Sidewalk city teams. My team consisted of a team rolling out cities far more efficiently (we cut the time and cost in half to get up & running) as well as the Publisher/GMs of each of the new cities. I had 1/3 to a 1/2 of the entire Sidewalk team under my purview and boy were we losing money. Rolling out cities less expensively wasn't enough. From corporate headquarters, the executive management team was indifferent as to which markets to remove or pare down. A city was either a source of losses or profits and the message was clear what to do about losses. To take pressure off, we tried to put Lipstick on the Pig to make Sidewalk look better internally. Thus, we made the difficult decisions to cut cities wholesale or reduce staff size. This despite the fact that Microsoft was more profitable and growing faster than virtually any company in history at that point in time. Unfortunately, they saw past the lipstick. Never forget that even deep pockets expect a strong return on investment and it's usually sooner rather than later.Of course, it's hard to shrink your way to success. The Internet ad market was still years from taking off and it was time to cut the losses as far as senior management was concerned. What's next? "Investigate strategic options." That's corporate speak for either shutting down or selling off a business. Key Sidewalk leaders were tasked with putting "Lipstick on a Pig". In other words, try to make the business look at good as possible so we could salvage some money from a sale rather than simply shutting down the whole operation (and there was a short fuse). While everything was perfectly legal, you do all you can to try to boost revenues and reduce or shift costs so that the potential acquirer thinks it's a great business they are buying. All this is done while trying to keep the troops as in the dark as possible so they don't get de-focused and/or want to jump ship.The ultimate example of putting Lipstick on the Pig is when it comes time to report to the industry and[...]

Book recommendation: Join the conversation


A former colleague of mine (Joseph Jaffe) has published his 2nd book on what he calls “new marketing”. Joseph is often quoted in the business press and is a thought leader in the marketing field. His first book was titled “Life After the 30 second spot” commenting on what businesses should do now that the 40+ year old 30 second spot is dying out in effectiveness in the age of TiVo. The book was a top seller on Amazon — one of the top selling business books the year it was published. The next “new marketing” book that’s been published reflects the explosion of social networks, empowered consumers and what has been called “conversational marketing”. His book “Join the Conversation” is applicable whether you are a business or a public official. The book has been as high as the #2 top selling business book since it was released. Recently, many a business has suffered by thinking they shouldn’t enter the fray and engage in the “conversation”. People no longer accept being ignored by businesses as they have in the past. Companies like Dell suffered mightily when they ignored the conversation (Google “Dell Hell” to see an example) and have subsequently fundamentally changed how they approach their customer base. Here’s a blurb from the book cover… Book Description With the continued fragmentation of the media and proliferation of media options, the balance of power has shifted from the marketer to the individual. In Join the Conversation, Jaffe discusses the changing role of the consumer and how marketers must adapt by joining the rich, deep and meaningful conversation already in progress. This book reveals what marketers must do to become a welcome and invited part of the dialogue, and how to leverage and integrate the resulting partnership in ways that provide win-win situations for businesses, brands and lives. From the Inside Flap Throughout the history of advertising and marketing, communicating with consumers has been a one-way street. Marketers produced and disseminated messages and customers consumed them whether they liked them or not. Today, every person sees thousands of advertisements a day—and totally ignores the vast majority of them. Yet, companies still spend billions of dollars each year yelling at customers who don’t want to hear it. In this follow-up to his bestselling book, Life After the 30-Second Spot, author Joseph Jaffe explains how marketers must adapt to the brave new world of the Internet, social media and networking, consumer-generated content, blogs, and podcasts by joining the rich, deep, and meaningful customer conversations already in progress. Consumers today are active participants in the advertising process, not silent targets and sitting ducks for one-way communication. Forget about the medium being the message; today, consumers are both the medium and the message. The future is bright for organizations that can join the ongoing dialog and leverage their customer relationships to build win-win situations for businesses, brands, and individuals. Through the power of community, dialog, and partnership, marketers finally have the power to talk with consumers rather than at them. Traditional marketing is a red flag smart consumers can see from a mile away; an outdated idea lurching toward them with the same predictable exhortations and tired come-ons. They’ve had enough, and it’s time to change the dynamic. When marketing is a conversation, marketers can get to know their consumers as individuals, not as silent members of a faceless demographic subsection. Join the Conversation uses real-world brands and companies, real case studies, and real conversa[...]

Love at First Site


This was forwarded to me in an email so I don’t know the author or I’d give him credit. I think this a good story/lesson for positioning a company for funding.     Love at First Sight Yesterday I joined my fifth board and my first for Crosslink. Years ago I had just received a term sheet for Series A venture capital and went looking for a looking for a bank.   My accounting firm suggested we consider a certain banker at Summit Bank (New Jersey).  I came home that evening to my little rented house, called my friend Steve, and declared I had just had lunch with the perfect woman for me.   We have been married for 21 years. When you know, you know. My partner Gary Hromadko and I met with a small SaaS company about six weeks ago.  (I will keep the specifics out, as they have not yet announced the funding.) Not knowing what to expect, we sat down and began to listen. What unfolded was a crystalline and complete story.  The whole package was so clear and compelling, I walked out of that meeting 90 minutes later with a sense of déjà vu. We had just met the perfect deal for us.  When you know, you know.  So what was it that rang such an obvious and compelling chord?  I can easily enumerate the points. Greenfield Opportunity SaaS is a platform shift in the delivery of software.  Every bozo vc knows that by now.  And we all know that existing product markets always get replicated on new platforms, resulting in new businesses built in the ashes of old ones. is built in the ashes of Seibel.  Netsuite is trying to build itself in the ashes of SAP or Quickbooks.  This one was a SaaS version of a category that was multi-billions in annual enterprise software revenues, and there is no clear leader in the SaaS version of the category, yet. Experience and Domain Knowledge The founders had strong credentials (both business and academic) with a record of real achievement in exactly this product category.  They knew who the customers would be, why they would buy, and why a SaaS version would be appealing.  They also recruited strong, experienced marketing and sales executives whose experience and approach to the job were context-appropriate.  The sales strategy is the right one for the business and the VP of Sales has deep experience with exactly this kind of sales process. Clear and Simple Product and Roadmap The product demo was short (10 minutes) and drove home all the key points.  The key success factors were well established in the earlier part of the pitch, making it very easy to see how the product met those market requirements, and why the scheduled future releases amplified the core story and did not take the company in a new direction.  The product can become a franchise. We Came Prepared We knew what we were looking for.  As a firm, we have been developing a SaaS practice for some time.  While we were looking at this company, Gary was finalizing our investment in OpSource, which was announced about two weeks ago.  We also are investors in Omniture, which has blossomed into a franchise in SaaS web analytics, and several other smaller SaaS companies.  I had come close to two other SaaS investments earlier in the year.  So by the time we showed up, we had a clear idea of what quality looks like, how to value it, and how to assess it.  Our diligence confirmed our instincts.  Not only did the team check out as we expected, the customers raved about the product.   When we asked customers about switching, we uniformly heard the “from my cold, dead hands” response. Why am telling you all this? It is n[...]

Curious what life as a startup founder is like?


Marc Andreessen (founder of Netscape) nails it describing the good and the bad. Here's a taste of his post...

    First, and most importantly, realize that a startup puts you on an emotional rollercoaster unlike anything you have ever experienced.

    You will flip rapidly from a day in which you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again.

    Over and over and over.

    And I'm talking about what happens to stable entrepreneurs.


Sidewalk: Insider's view of why & how it was killed (aka sold) and why Steve Ballmer now regrets it


I was one of the first dozen or so members of the Sidewalk team at Microsoft that swelled to over 300 at one time. Personally speaking, it was the best of times and the worst of times. In my dozen+ years at Microsoft, it went from being the strongest team I'd ever seen assembled at Microsoft to my first evidence of Microsoft being infected with politics and big company shenanigans. In the 12 years or so since Sidewalk's inception, I've yet to see an accurate story of what really happened with Sidewalk. The local newspapers who reported on it not only didn't have an inside view but they also had a clear agenda to cheer Sidewalk's demise (e.g., the Seattle Times would never even publish Sidewalk's name). The industry trades simply took the story that was spun by Microsoft's PR and didn't dig deeper. Even astute industry commentators like Jeff Jarvis, Tom Evslin (an ex-Microsoftie), Frank Barnako, Stowe Boyd, Dan Gilmor and Fred Wilson, who often comment on the local Internet scene, aren't aware of some of the sordid history of Sidewalk. I hadn't thought much about Sidewalk since I left that team in late '97 after spending a couple years on the team. However, a few things have brought back those memories and I thought people might find it instructive or at least somewhat entertaining to hear the story and share some perspective on the application of those lessons in today's web environment. It also shows how hard it is to incubate a new business inside of a behemoth corporation given the lack of patience that is often exhibited. The following is an excerpt from a recent Herald Tribune article:In 1999, Microsoft sold Sidewalk, an online city guide service. It seemed a wayward foray outside Microsoft’s software business at the time. “But Sidewalk was really aimed at what we now call local search,” Mr. Ballmer says. “Sidewalk is one we should not have gotten out of.”Sidewalk was purchased by Citysearch in 1999 which is now a part of Barry Diller’s empire (along with Expedia, also started by Microsoft...he tried to purchase other Microsoft assets but that's another story). I recently had the pleasure of meeting Charles Conn (founder of Citysearch). Coincidentally, we now live in the same town and are on a non-profit committee together. Though I’d never met Charles, I was very aware of who he was (one of my Sidewalk colleagues had been a McKinsey partner with him) and we always had respect for Citysearch as a strong competitor that had some innovative go-to-market approaches. After sitting down for a coffee with him and sharing some battle scars, I realized that as the acquirer of the business, he’d gotten spun a good story that didn’t mirror reality yet that story is what is broadly understood to be the “real” story about Sidewalk. The reality is quite different although Charles shed light on things from Citysearch's perspective which was enlightening.I realize that describing what led to Sidewalk’s demise is a bit like a blind man describing an elephant. There are several perspectives but I had a pretty well rounded view not only from my own experience but that of several people in other parts of the organization that stuck around longer than me. I jumped off what I saw was a sinking ship when I got the opportunity to fulfill a career goal of being a general manager of a business at Microsoft ( One of the impressive things about Microsoft is its patience and determination. However, this tends to apply to traditional technology businesses (e.g., Windows and the Server businesses for Microsoft took ~ 10 years to pay off) versus the customer side of the business or media businesses that it has yoyo’ed in and out of.[...]

Why VCs don't invest


A former colleague of mine, Paladin Partners' Janis Machala. spoke at a recent event in Seattle and laid out the top ten reasons why VCs choose not to invest.

1.) Saying the company has no competition.

2.) Saying you will do an IPO or be bought in next year or two.

3.) Saying the financial numbers are conservative.

4.) Saying that this will be the last round of private capital needed.

5.) Arrogant entrepreneurs.

6.) The executive team doesn't have "skin in the game."

7.) No focus on milestones.

8.) Unreasonable valuations or terms.


I'm betting on Crayon like I bet on Jaffe 4 years ago


Crayon is “a new marketing company” launched by Joseph Jaffe, Shel Holtz & Neville Hobson of For Immediate Release fame and C.C. Chapman. I’m proud to say that if I wasn’t Joe Jaffe’s first client, I was certainly his biggest in his first year when he left working for “the man” and hung out his own shingle. At the time, I was working in MSN as Managing Director of Industry Marketing and Relations. Joe was instrumental in working on a project we called “Interactive Marketing Best Practices”. At the time, the Internet ad market was still in the tank and those that were starting to understand the power of Internet-based marketing needed some guidance on how best to use the array of tools available. Joe did a terrific job of not only creating much of the content (despite the fact that he wasn’t initially the project leader) but also doing yeoman’s work to travel the country and deliver the content that was very well received. It was one of the efforts along with the Cross Media Optimization Studies led by MSN & Rex Briggs and the Universal Ad Package (i.e., ad size standards) also led by MSN (Yahoo was also a key driver) that were critical in turning around the Internet ad market.   Joe was ahead of his time then and he still is. While Joe is certainly a talker/thought-leader, having worked with him, he’s also a doer. For those companies smart enough to hire Joe and his team, I’m sure they’ll get value. I don’t know Shel, C.C. or Neville but I’m certain Joe would only surround himself with people of his caliber. Joe doesn’t suffer fools (or at least not for long). One of the nails in the coffin that solidified my leaving Microsoft was seeing how Microsoft had evolved from a company of ruthlessly focused strategists/doers to having more and more corporate suckups that were threatened by (or jealous of) people like Joe. One of the people I worked with at Microsoft had worked with Joe at one of his agencies where this guy worked on a more prestigious brand than Joe probably because he was an effective suckup there too. He had a chip on his shoulder about Joe as Joe was well on his way to becoming an industry thought leader while this guy had only honed his suckup skills during the time Joe was building his reputation in the industry. This guy had the fantasy that MSN had made Joe a thought leader. While I’m sure it didn’t hurt to give him visibility, Joe was going to be a thought leader sooner or later regardless of what MSN did.   The Crayon Manifesto sounds like Joe talking. If you are considering working with Crayon, it’s worth reading the manifesto a few times. I would give Joe only the highest recommendation professionally and personally. Here are a few excerpts from the manifesto.   1. We are shape shifters. Winning in today's ever changing and volatile landscape requires versatility, flexibility and the ability to morph on demand and as needed. We are a different kind of company that mashes-up a combination of consulting, agency and advisory services. We'll also do windows and serve tea if required.   2. We are not superior and we are not subservient; we have strong and defined points of view and we look for clients of similar ilk. We want to be challenged and we want to challenge you. We're not yes men or women and never will be. If you can't handle the friction, passion and intensity, we'll gladly refer you to another company.   5. If you're still with us at this stage, you're still far from the comfort zone of convention. W[...]

5 screw-ups and Ten Rules from a high-flying startup CEO


Liz Gannes recaps a talk on a high-flying startup whose CEO was remarkably candid in a recent speech. What’s particularly interesting is this same CEO wrote a much reach piece entitled Ten Rules for Web Startups (see excerpts below). Here’s the list of screw-ups… Williams went through a tidy list of the top five Odeo screw-ups: “Trying to build too much” – Odeo set out to be a podcasting company with no focus beyond that. “Not building for people like ourselves” – For example, Williams doesn’t podcast himself, and he says as a result the company’s web-based recording tools were too simplistic. “Not adjusting fast enough” – The company thought its comprehensive web-based strategy would win out over the competition, primarily Apple, in the long term. “It turns out long term is not soon enough for a startup if you’re trying to get a foothold.” “Raising too much money too early” – Williams seeded the money with $70,000 of his own money, and after the TED excitement added another $100,000. After he tied up over a million in angel funding, a term sheet came through from Charles River Ventures at three times the angel round valuation. They took the money. “Not listening to my gut” – “When you’ve got a bunch of money and you’ve hired a lot of people and you’re talking to your board and you’re talking to reporters, your gut can get drowned out.”   Ten Rules for Web Startups The following are the ten rules with a couple of samples of his rules. Click here for the details behind each. #1: Be Narrow Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there's less chance for conflict. This is all so logical and, yet, there's a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.   #2: Be Different   #3: Be Casual   #4: Be Picky   #5: Be User-Centric   #6: Be Self-Centered   #7: Be Greedy   #8: Be Tiny   #9: Be Agile You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting? The same is true of successful startups—except they may start out heading toward Alaska. Many dot-com bubble companies that died could have eventually been successful had they been able to adjust and change their plans instead of running as fast as they could until they burned out, based on their initial assumptions. Pyra was started to build a project-management app, not Blogger. Flickr's company was building a game. Ebay was going to sell auction software. Initial assumptions are almost always wrong. That's why the waterfall approach to building software is obsolete in favor agile techniques. The same philosophy should be applied to buildi[...]

Top 5 Tools For Generating Sales Leads


From a podcasting news site, this talks about the top 5 sales lead generators. When asked, "Which offers are 'very effective' for generating high-quality leads?" marketers in all three areas studied - technology services firms, and business software and hardware - put Blog and the Podcast in the top five. The information comes from Marketing Sherpa's annual survey of business technology marketing executives. About 1,900 responded to the survey. Top 5 Tools For Generating Sales Leads ·         1. Free Trials -- Business software marketers ranked free trials extremely highly, with 54% calling trials very effective. ·         2. Webcast -- At 41% this was another favorite for software marketers, however technology services and related hardware firms also ranked webinars at 33% and 31% respectively. ·         3. White paper -- All business technology marketers rated white papers fairly evenly, giving white paper offers ratings ranging from 31-36% 'very effective.' ·         4. Blog -- 35% of software and ASP marketers rated their blog as very effective, as did 33% of technology services firms. However, just 19% of hardware companies felt that a corporate blog was effective. This may be because general business executives are more likely to read a blog, while IT staffers may not. ·         5. Podcast -- Last year the concept of a podcast was barely on the technology marketing map. By June 2006, 22% of software marketers who'd given a podcast called them 'very effective' lead generation tools. Perhaps IT professionals are more likely to be in an early adopter community that might listen to a podcast. Source: Marketing Sherpa (PDF) [...]

Venture 2.0


In light of my recent post on what I see as the most creative solution to fill the funding gap between angels and VCs, Peter Rip’s post on Venture 2.0 is worth reading. In the first part, he does a preamble on Venture 1.0 that’s worth a read to better understand the current landscape. Here’s his intro to the series…


This the first in a series of posts on the idea of "Venture Capital 2.0."  I thought it was appropriate to first set the stage of Venture Capital 1.0 as the point of contrast.  This first post is obvious stuff to those of us who have been in the business for a while, but less so for the casual observer.


It will be interesting to see if he comments on the implications of fund sizes on the current landscape. In a nutshell, most Limited Partners (“LPs”) don’t want to invest less than $10M at a pop and don’t want to own more than 10% of any given fund. This makes the minimum fund size $100M. A fund can only manage so many deals at a time due to board commitments, etc. thus they typically need to invest $5-10M at a pop. That figure is no issue for some sectors but it is overkill or premature for others leading to unnecessary dilution for founders and current shareholders.


New venture investment model launched at Keiretsu Forum event in Sun Valley


One of the main reasons I have been light on blogging of late is my input to a new fund model that has been formed by Oracle and Microsoft veteran, Doug Woodward. Among other accomplishments, he was a founder of Microsoft Consulting Services and has worked with a number of startups in CFO roles. His firm, SmartStarters, and his board have been behind what I think is one of the most creative approaches to filling the funding gap between angel investors and institutional investors. Read the article I’ve excerpted from SunValleyOnline below for more details on the fund as well as the event that I catalyzed the Keiretsu Forum to put together. The event pulled together some of the best deals within the Keiretsu Forum network to present to a group of investors who descended upon Sun Valley last month.   Like the famous Allen & Company event held in Sun Valley every July, the most interesting discussions and deal-making happen outside the formal program. Though the attendees at the Keiretsu Forum-sponsored event weren’t household names like Gates, Buffett, Murdoch and the Google Guys, there were movers and shakers in the entrepreneurial world from Seattle, Silicon Valley, Washington DC and Atlanta. One of the most interesting side conversations creating buzz was a new venture funding model that fills a growing funding gap between angel investors and venture capital. The formal agenda operated like a typical angel investor event with a sprinkling of what makes the Keiretsu Forum unique. That is, they have a major focus on relationships and collegiality as well as philanthropy. Randy Williams, the founder of the Keiretsu Forum (KF) exemplified this by sharing his passions (he must have read “Never Eat Alone”) and his vast rolodex. KF prides themselves on doing whatever it can to help the companies who go through their screening process. During the presentation given by Martin Hedley (CEO of Positron Systems), Randy jumped in with how a contact he had in New Mexico in the aerospace sector could help Positron since they focus on aerospace (Positron’s intellectual property came out of the Idaho National Laboratory and has the potential to revolutionize aircraft maintenance). The philanthropic facet of the Sun Valley angel investor event was evident at a fireside chat given by the extraordinary couple Paul and Debbi Brainerd. Paul is a retired tech industry legend who founded Aldus. Aldus and Paul are credited with creating the desktop publishing industry with the landmark product PageMaker. Aldus was purchased by Adobe for several hundred million dollars in 1994 launching Paul into the philanthropy world where he’s had an enormous impact. Even before the rise of the Gates Foundation, Seattle has been recognized as the most dynamic place for philanthropic innovation. Paul and Debbi spoke about two of the organizations they have founded – IslandWood and Social Venture Partners.   After the fireside chat, the buzz along with the Brainerd chat was the aforementioned new venture model. Watchers of the capital markets for startups have observed that Venture firms have ‘receded’ to later stage deals due to risk aversion and size of fund. That is, most funds these have more than $100M in the fund leading to the funds needing to invest $5-10M per deal which is more than many companies need or want. This has led to a shortage of funds for earlier stage deals since VCs are moving to later stage deals (so called “expansion st[...]

Take Care of the Big Rocks First


This little story is applicable both for running a startup as well as taking some breaks…   A philosophy professor stood before his class and had some items in front of him. When the class began, wordlessly he picked up a very large and empty mayonnaise jar and proceeded to fill it with rocks, rocks about 2" in diameter. He then asked the students if the jar was full? They agreed that it was. So the professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles, of course, rolled into the open areas between the rocks. He then asked the students again if the jar was full. They agreed it was. The professor picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He then asked once more if the jar was full. The students responded with an unanimous - yes. The professor then produced two cans of beer from under the table and proceeded to pour their entire contents into the jar - effectively filling the empty space between the sand. The students laughed. "Now," said the professor, as the laughter subsided, "I want you to recognize that this jar represents your life. The rocks are the important things - your family, your partner, your health, and your children - Things that if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter, like your job, your house, and your car. The sand is everything else. The small stuff." "If you put the sand into the jar first," he continued, "there is no room for the pebbles or the rocks. The same goes for your life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out dancing. There will always be time to go to work, give a dinner party and fix the disposal. "Take care of the rocks first, the things that really matter. Set your priorities. The rest is just sand." One of the students raised her hand and inquired what the beer represented. The professor smiled. "I'm glad you asked. It just goes to show you that no matter how full your life may seem, there's always room for a couple of beers."     [...]

Basis for Altus' methodology published in Harvard Business Review


Regular readers of this blog know that we (Altus Alliance) have been working with Mark Leslie for 2 years putting into practice the framework that Mark and Chuck Holloway have been developing over the last few years that we anticipated would be ground-breaking for the tech startup world. Mark has previewed this framework with some select audiences in the venture community which has led to several people very positively about it. These have included VC’s such David Cowan, Ross Mayfield, Tim Oren, and Jason Ball. There was also a recent post by Ed Sim on “When to hire a VP of Sales” that espoused ideas strikingly similar to Leslie’s framework. One of the most popular posts on this blog has been “What does Vinod Khosla know about Web 2.0 that others don't?” that recapped my take on the applicability of Leslie’s framework in the Web 2.0 context. With the recent publication, we have drafted a news brief that we’re sending out to a few of our contacts that I’ve previewed below.   Venture Consultancy, Altus Alliance, delivers on the promise of the Sales Learning Curve – published in the Harvard Business Review this month.   For the last 3 years, over 30 companies have sought out a new method to grow their companies and challenge the traditional strategy of startups who are taught to raise as much money as possible, grow a sales force and “get big fast.”  One of the core elements of the new approach is that the cheapest and most sustainable form of capital was revenue.  Another, is that when you introduce new products, there’s an inevitable period of “bumping around in the dark” while you refine your product, marketing and sales strategy and execution where you want to avoid over-investing in sales resources. In other words, slow down the initial trajectory in order to speed up the path to scalable and profitable revenues. These guiding principles formed the basis of a venture consultancy (Altus Alliance) focused on helping early stage companies gain revenue traction in a manner that preserves and expands their limited cash reserves.   At the same time, in the Bay Area, the former CEO of Veritas (Mark Leslie who is a current Stanford Graduate School of Business professor) was formulating a ground-breaking framework published this month after years of development in the Harvard Business Review (HBR). This framework had a strikingly similar premise to what Altus was implementing with its clients in Seattle. Mark is a member of an extremely small cadre of entrepreneurs who have taken a company from zero revenue to well over $1Billion while sitting in the CEO seat. With billions of dollars of venture capital residing down the street from Stanford University on Sand Hill Road, Leslie and his Stanford colleague Charles Holloway (the Kleiner Perkins Caufield & Byers Professor of Management) have been attempting to answer a fundamental question, “why does it always take longer and cost more to build a high-tech company than anyone ever expects?” For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80 percent of venture capital investments do not pan out.   The answer (at least a key one), according to Leslie and Holloway lies in the Sales Learning Curve laid out in the pages of the HBR which they hope will prove as powerful a construct in the hig[...]

Sun Valley Angel Investor event


Yesterday, we wrapped up the angel investor event in Sun Valley orchestrated by the Keiretsu Forum. The weekend offered the attendees a chance to golf, hike, raft, bike, relax, etc. before heading home and making way for Gates, Buffett, Murdoch, the Google guys and the rest of perhaps the biggest collection of billionaires in the world at the Allen & Company conference that takes place each year in Sun Valley. Given the short notice of the event, it was well attended with angel investors coming in from Seattle, Boise, San Francisco, Denver, D.C., Atlanta and Sun Valley. They heard presentations from 3 companies in a wide range of arenas – Voxilla (operates in the VoIP space), Festival Media (trying to do what NASCAR did for stock car racing in the festivals business), and Positron (exclusive licensee of some killer Dept of Energy IP in what’s called “non destructive testing”). They all did a nice job presenting but I was most intrigued by Positron. If they can execute, they are going to be picked up by someone like GE.   Friday evening, I hosted a gathering at our place that was highlighted by a fireside chat with Debbi and Paul Brainerd. Paul is credited with creating the desktop publishing industry by founding Aldus which created the landmark PageMaker product. Aldus was purchased in the mid-90’s by Adobe for over a half billion dollars. Paul turned his attention towards philanthropy and became one of the key people who turned Seattle into a hotbed for philanthropic innovation along with a few others such as Scott Oki (longtime MSFT exec who started Microsoft’s international business), Jeff Brotman (co-founder of Costco) and of course Bill Gates. Paul and Debbi are amazing people who’ve done tremendous work with the Brainerd Foundation, Social Venture Partners, IslandWood and many other organizations. They spent most of their time talking about SVP and IslandWood – both stellar organizations I’ve had first-hand exposure to.   It was fun to see all of the relationships that were built throughout the few days people were in town. As I’d hoped, I thought there’d be benefit in cross-pollinating angel investors from around the country. There were already discussions about doing this more often as well as having collaboration from a few angel groups around the Northwest that are interested in joining forces with the Keiretsu Forum. For example, there is a great angel group in Boise that has many seasoned entrepreneurs and successful executives who’ve moved to the Boise area. One of their leaders (Phil Bradley – CFO of ProClarity which was recently purchased by Microsoft) attended the event and is the kind of seasoned entrepreneur enriching the startup community in Idaho which is still growing. He saw a number of synergies with the Keiretsu Forum that could benefit Idaho’s startup ecosystem. [...]

Angel investors: How to write off a trip to Sun Valley


The following article about an upcoming "Best of the Best" Angel investor confab was posted on
“Angel investors” are a critical part of the funding ecosystem for young companies. Virtually every household name in the technology business (Google, Yahoo, Apple, etc.), for example, got off the ground due to angel investors. There are over 200 angel investment organizations throughout N. America. The largest of them all is called the Keiretsu Forum and has members ranging from the former head of Charles Schwab to numerous “serial entrepreneurs” who want to put their money to work in this exciting (and high risk) form of investing. Dave Chase, a Sun Valley-based tech industry veteran, SunValleyOnline blogger and Keiretsu Forum Seattle member conceived of the idea bringing the best angel investing opportunities from around the country to a forum in Sun Valley that the Keiretsu Forum leadership embraced. The event will take place just prior to the Allen & Company conference at the Sun Valley Lodge (July 6-9).

From the Keiretsu Forum’s release: “This July the Keiretsu Forum will host a special "Best of the Best" Keiretsu Forum weekend in Sun Valley, Idaho. Keiretsu Members and special guests will review presentations from the three "Best of the Best" portfolio prospects, enjoy an evening reception with a fireside chat with PC industry and venture philanthropy pioneer Paul Brainerd and a relaxing weekend of hiking, golf and guided fly fishing with fellow K4 Members from around the country.” The Keiretsu Forum is open to Accredited Investors. If you are an accredited investor interested in attending or joining the Keiretsu Forum, please contact SunValleyOnline ( specifying your desire to receive an invitation.

If you are an angel investor, I hope you can join us in Sun Valley and learn more about some hot young companies and the Keiretsu Forum.