Archive for November, 2007

What is it like to leave VC and go back to being an entrepreneur?

Tuesday, November 27th, 2007

After a stint as a VC, some parts of being an entrepreneur seem easier. For example, it’s much easier to see things from the investor and the board perspective, because you’ve been in their seats. You know how to pitch to investors, and what information they need. You know what is relevant to the board and what is not, and generally how to handle a board meeting.

There are a few things you forget after being a VC for a while. Hiring and recruiting is harder than I remembered – not the sales part, but just finding people and interviewing them. Making tough decisions about how to spend your limited cash and other resources is harder than I remembered. There are a million and one details that you don’t have an executive assistant or a CFO to handle for you. Travel planning alone is a time sink.

I have to reach out a lot more proactively. I didn’t realize how easy it was to just answer the phone and email all day, but as a VC, a lot comes at you. When I was a VC, it took incredible discipline for me to put that aside and actually be proactive, and I wasn’t doing it very well. As a CEO, the phone doesn’t ring much, which means I reach out a lot more.

One other thing that is much easier as an entrepreneur is the focus. I find that my top few priorities are quite obvious, and I’m not really at loose ends about what is most important to be working on right now. Sometimes there are too many top priorities, and it’s almost paralyzing, but mostly I can just crank without too much reflection. As a VC, I found that much harder. While there were still a million things to do, deciding which ones were priorities was much harder for me. Of course, there were some obvious times when we were doing financings and such, but often I had many different potentially valuable things I could do, and no good way to decide between them. And the feedback cycle was so long that it was hard to even come up with good rules of thumb.

I travel a lot more now, visiting potential customers and partners, and my kids are having to adjust to having me gone more, which can be heartbreaking. I’ve been lucky to have dinner with my kids an awful lot the last few years, and that’s getting harder. But my family definitely senses my excitement and enthusiasm, which helps a lot.

By the way, I’m not the only one who has done this. Danial Faizullabhoy also did this relatively recently, you could ask him what it’s like. Other folks I know who made this transition are Darlene Mann and Perry Wu. There are also VCs who occasionally step into CEO roles for a while, like Alex Mendez at Storm Ventures.

Who leaves venture?

Monday, November 19th, 2007

When I went to the “dark side” and joined a VC firm, everyone asked me how it was different from being an entrepreneur. There were a couple of obvious things, of course: you suddenly become a lot better looking, for example, because everyone wants to talk to you. You trade pesky customers for pesky investors and entrepreneurs. You have no direct reports, but have to learn how to influence big egos on boards. You don’t actually do anything, but you talk on the phone a lot, and have lots of meetings. You get home for dinner with your kids a lot more often.

Mostly I loved the intellectual stimulation of having a really smart person or team come in and passionately pitch their best idea to me. I had to assimilate a lot of information, and learn to think at a pretty high level, just to ask decent questions. Getting to do this several times a week was a fabulous experience.

So why did I leave? What’s not to like?

I missed the feeling of taking real risk, the kind of risk that makes you feel alive. I wanted to build something of my own, and feel the energy first-hand again. Go to sleep at night thinking about something, and wake up energized to start working on it. So when the stars aligned to present a huge opportunity perfectly suited to my experience and abilities, I left my cushy job to jump on it.

Taking the plunge – moving from VC (back) to entrepreneur

Friday, November 16th, 2007

I have big news: I’m going on leave from Woodside Fund to become CEO of a brand-new startup called Yieldex. We are developing online ad optimization and inventory management technology targeting publishers and ad networks with a focus on display advertising. Yieldex was founded by Doug Cosman, a MatchLogic guy who has invented some amazing technology for inventory management and ad optimization. As it happens, I wrote a paper on this topic a while back, and considered it as a PhD thesis topic before I was seduced by the Dark Side of venture capital. So when I saw this technology, I saw a unique opportunity for me to jump back into the game.

We just raised our Series A, from Sequel Ventures, First Round Capital, and Woodside Fund. I am now building out the team, and starting to sign beta customers.

Watch this space for more entries on what it’s like to transition from VC to entrepreneur. It’s great to be back!

Rename Do-Not-Track to Give-Me-Irrelevant-Ads

Wednesday, November 7th, 2007

Anybody who has done any survey work knows that the answer depends quite a bit on how you ask the question. The Do-Not-Track list is a perfect example. “Consumer advocates” (who appoints them, anyway?) are pushing for an FTC-controlled Do-Not-Track list to allow people to opt opt of being anonymously tracked in order to get relevant ads. The problem is, they are comparing this with the Do-Not-Call list for telemarketers, which implies both that this advertising is incredibly disruptive, and that if you put your name on the list, you won’t get any ads. Both are wrong. Here’s the difference in how the questions could be asked:

Do you want your every activity tracked online by some company you’ve never heard of, just like those awful telemarketers? Yes/No

vs

You are going to get ads in any case. Do you want completely random ads, or ads that might actually be a little bit useful, based on some information about what you’ve done online lately? Random/More relevant

Just call it the “Give-Me-Irrelevant-Ads” list, and I’ll be fine with it.

Micro Persuasion: “Do Not Track List” is the First Shot in the Behavioral Targeting Wars