When I was in college, I thought I would end up on Wall Street…but my dream was to make a life coaching basketball – and to be good enough to get “the call.”

The call comes from the elite programs. It comes from North Carolina, Kansas, Kentucky or UCLA. When the phone rings, you don’t ask questions, you just say, “yes.” These programs provide the infrastructure required to win championships and expect you to get it done. Coaching at one of these schools doesn’t make you great, but it means there are no excuses if your program can’t raise a banner to rafters. All doors are open. This was my dream.

It turned out both Wall Street and coaching took a back seat to my love of sneakers after college. I turned down Goldman in 1997 for an unpaid internship at a little t-shirt company with aspirations to be the number one basketball company in the world. I played hoops every day at lunch and got paid to think about sneaker culture the rest of the day.

I have been in the startup industry ever since.

Like a coach, I have had my ups and downs over the past 15 years as an early employee, founder and investor. I have put some wins on the board and had some tough breaks. I have had great teams that did more than anyone thought possible, and teams that were only great on paper.

After several years as an investor at First Round, the phone rang. It was “the call.” I said, “yes” and could not be more excited to give Kent a cross-country fist bump as we join Josh, Howard, Chris and Rob as partners at First Round Capital.

I love that I can commit 100% of my energy to helping amazing entrepreneurs build great companies. I love that we have a specific point of view on the market and are focused on a specific niche – seed stage all day, everyday. My favorite time in a company’s life is the early days when the DNA is established. At First Round I get to help a business grow from three employees to 30; I get to be a part of the process as founders identify their first customers and get their first products to market; I am privileged to provide a third opinion as they rubber duck their way through a problem and empowered to help them activate my network, the First Round Community and the collective resources of my partners to maximize their chance of success.

In my time at First Round I have learned from an amazing group of people – colleagues, mentors, founders and co-investors. It is like coaching at a basketball powerhouse – you get to recruit and work with the best players, support them with the best products and deliver all the services required to maximize their potential to create great teams that can win it all.

Since day one at FRC, people have asked me if I miss the operating side of the business and now I can say no.

First Round is my startup.

New York is my city.

If you work in the startup industry and I can help, let’s do it.

It is May day and the 99%/OWS have NYC buzzing. Got me thinking about what 99% is on the web.

It is accepted that 1% create, 9% curate and comment and 90% just consume content on the web. Mobile will be THE interface for the web because it is read first and optimized for consumption — it is built for the 99%.

The 99% prefers to consume content and make brief comments rather than create from scratch. Infrastructure changes and wireless bandwidth mean the 99% will no longer be forced to trade speed and fidelity for portability. The 99% have been denied quality UI/UX as the creators of the device and application layer of the web have catered to the needs of the 1% — This will not stand. The 99% will no longer suffer from interface pollution and the distractions of entering redundant personally identifiable data. They will no longer be subjected to long conversion funnels. Curated experiences will surprise and delight and bring down the oppressive wall that has long stood between editorial content and commerce. (this paragraph inspired by the mission at wearethe99percent.tumblr.com)

Mobile first is happening. Everyone is talking about it. We see it in our portfolio with Path, Uber, Sincerely and Hotel Tonight and the numbers that Fab has seen on the tablet are astounding. My friend Amanda had a great post on this a few weeks back and it is definitely worth the read.

10 years of rip and replace for dial-up to braodband

Mobile, and specifically touch, is the first interface optimized for the 99% who consumer rather than being over-built to serve the 1% who create. It is read first, contribute second. Mobile offers bigger images, swiping actions that are intuitive and physical to create a visceral experience with fewer buttons and way less typing. This shift from PC to mobile as the primary access point for the web will be a rip and replace similar to the move from dial-up to broadband or from regular TV to HDTV. Similar, but with a dramatically compressed timeline due to faster replacement cycles and cheaper hardware. I don’t think this will take 5 years or more as analysts are predicting, but more like 3 years on the outside.

Mobile is access to the world wide web optimized for the 99%. This is why mobile matters and why I think it will be the ONLY interface in 36 months or less.

Working in the startup industry, you are always on the clock, always in a race against time. In this world a strong bias toward action seems to pay off and doing things fast is often better than improving what you will do with further discussion. In my experience working in startups and now as an investor and board member working with startups, you can tell how your company is doing by tracking how much of what you say you are going to do actually gets done. This is the Say/Do ratio.

1 or less is healthy. You say you will do something and it gets done, often leading to other things getting done that you did not plan, but become obvious as you are executing.

1 to 1.5 is worrisome. In the lower end of this range it implies that you either have the perfect strategy and have thought of everything and the world is playing out exactly as you planned (doubtful), or your teams are following a plan on paper and lack the freedom or creativity to extend. In the higher end of this range your plan was too ambitious or you are failing to execute or both.

1.5 or higher is trouble. As the ratio approaches 2, you have real execution and management problems.

Both start-ups I worked at were competing in markets full of big companies trying to kill us. At both of these companies we had plans that evolved along with our view of the world and what we knew about our competition and our customers.

At my video game company, other game publishers like EA and Activision were happy to let us take the risk required to validate (or dis-prove) the fitness gaming market. But, they told me, if it worked they would buy us cheap or just steamroll us from behind. At AND 1, as we started to scale into percentage points of the basketball market, we got a copy of an internal sales presentation from NIKE that described how they were going to kill us in 3 slides:

slide 1: Our 5 best selling shoes and our logo as seen through a rifle scope -crosshairs etc.

slide 2: Mushroom cloud

slide 3: The 5 shoes NIKE was offering to retailers to replace us

In both cases, we planned our strategy, set goals and did what we said we were going to do. In both cases we moved fast and acted decisively. Not sure if our strategies were the best, but our actions were good enough to at least buy time. This was valuable because as a startup we could to do more with that time than the big companies could. We listened to the consumer more. We iterated the product more. We focused on surviving more.We said more. We did even more than that.

During intense times, our Say/Do ratio dropped well below 1. We delivered more than we thought possible, faster than we planned and consumers loved it more than we imagined.

I say this is what the startup industry is all about and this is what startups do.

where is aft anyway?

I was on a Boeing 757 coming back from the west coast last week and I noticed a sign that indicated when the toilet in the back of the plane was in use. It said “Aft Toilets” and “Occupied” would light up when all the bathroom doors back there were locked.Whoever put this sign in the plane was not seeing the world through the customer’s eyes.

I bet 90% of the people on that plane did not grow up on a boat and have no idea what “aft” means. This sign forces users to think about what is being communicated and decode the information through contextual clues. The sign is supposed to make the experience of using the facilities on the plane more efficient, but actually adds a cognitive load to the user and increases the friction in a key decision/use case. I see this type of disconnect sometimes when I talk to start-ups about product so I thought it was worth posting this example. People want to feel included and they want product that speaks to them. As a product person, you should be able to see the world through your customer’s eyes and in many ways become them. If you can you will flush the “aft bathroom” problem from your product.

At AND 1 and at my game company we were obsessive about our users. We wanted to know everything about them – what they read, what music they listened to, what they ate, what they bought, what movies they liked, did they get buttered popcorn and in what size…We studied our users’ lives to the point of understanding them deep enough to be them, to look at our product like them and to know what they would want a trash slogan to say or what type of pep talk they would want from a virtual trainer.

We worked hard to be schizophrenic and we were able to deliver on details in ways that consumers loved — little discovery items that just made sense to them and when we really got it right, made people smile. When you add all these features up, you get great product that makes sense to the user, is intuitive (to them) and easy (for them) to use…and you don’t leave anyone wondering where the bathroom is.

This weekend I had the opportunity to speak along side a bunch of fantastic people at the AgileUX NYC conference. The event was awesome, you can see all the presentations on the conference site and I can’t wait for the next one. Thanks to Jeff and Will for putting it together and for everyone who took a Saturday and dedicated it to elevating the conversation about design and the agile product creation process here in New York City.

My slides are embedded below and followed by my speaking notes for context. Each bullet is a slide. Formatting drove me crazy here, apologies in advance.

• RPM – Releases per month – the argument is about focusing on process over pixels.
• My experience learning to speak design started at Rucker park while I was working in the footwear industry for AND 1.
  1. When all the parts you have to work with (foam, rubber, leather) are commodity, design matters
  2. We followed the typical consumer product cycle of Design – Build – Test — Learn
  3. Our product process at AND 1 was powerful because we focused on shortening the time between the steps and creating tighter and tighter feedback loops.
• Changing landscape of company building and product creation on the web is familiar to me as a consumer product guy.
• Building blocks of the web are getting bigger and bigger and more easily manipulated by clumsier and clumsier hands. These platforms = cheaper tests and should result in more tests.
• Web has returned to basics of customer development
  1. Assumption is design must follow but agile is a classic design process: Vague problem — Understand/better define that problem — Create solutions that might solve the problem — Improve on these solutions with feedback and data — Implement the best solution (maybe) — Repeat

• Or design must choose to lead
  1. the classic design process is agile.
  2. Design must lead not just product, but companies
  3. We are sitting at a chocolate/peanutbutter moment — Being design focused is a good way to add value and remove risk in any operation but particularly suited to/useful for the internet in 2012
  4. Designers/UX practitioners are responsible for moving whole companies to a design mindset
• Mindset is all that matters when you want to increase RPMs
  1. Design mindset add value/remove risk – systematically
  2. I look for this mindset when investing and designers should demand it from their companies.
  3. But how do you know if you have it?
• # 1: No ego – best idea wins
  1. Two types of people I don’t like to see at companies
  2. The person who knows what the consumer wants better than the consumer – the design/product/architecture genius…the all knowing, lone visionary –aka unicorns – very rarely real
  3. Assholes
  4. Often lots of overlap in these two personalities – neither one listens
• Value option value
  1. People with a very strong vision are a risk vs listeners who Pivot.
  2. Perfection gets in the way of participation
  3. “Vision” can conflict with a willingness to make big changes based on what others suggest
  4. It’s tough when you’ve been selling a vision and you have to admit you’re wrong.
  5. EGO
• Apple Stock Chart — unless the unicorn asshole is Steve Jobs – then forget rule #1 and grab them by the horn and ride them over the rainbow
• #2: Feedback must be practiced as a craft

• How feedback usually works – Mr. Flamehead and Mrs. TickingTimeBomb

1. Designers get it second hand and translated
2. It’s blunt, often not actionable (make it pop, have you seen path? Always site the same existing site as an example for all inspiration)
3. Unexpected eMail bomb – “we should talk”
4. It is not iteration – it is linear steps forward and back

• Good feedback

1. Give it directly – and focus on the idea behind the pixels/product. Understand the intent.
2. Try not to make the event overly formal – the process is continuous
3. Know what to expect – set expectations in advance for breadth and fidelity
4. Ask questions to understand intent not to critique the result
5. Ask the creator to re-state the problem they were trying to solve (as they understood it)
6. Why did you? Did you consider? How do you think this would work if (possible use case)

• Watch real people fail to use your product – every week – in person

1. Watch the clips as a team
2. Amazing to see how much more everyone cares and how much less they argue – paint footprints on the wall?

• #3 How do you balance qualitative and quantitative data? What moves the crowd/make people dance and your company?

1. Combine qualitative and quantitative data gathering
   i.     Why are people doing/not doing – the behaviors and the numbers–Tight loop between quantitative and qualitative – how does it feel? And then using numbers to figure out he scale
2. Is data a weapon to prove a point? –  if so, bad news
   i.     It should be focused on provoking good questions
   ii.     It should be focused on identifying opportunities
   iii.     It should be focused on telling a more interesting story to help define the future of your product

• List all the ways you are collecting data — The goal is to motivate more great questions from a broader set of people.

1. Figure out how they can work better in concert – what is blocking them from doing so today?
2. What do you measure that’s unique to you as a company?
3. How might you visualize that to better understand what is going on?
4. How can you make it actionable across the organization?

• #4 Make it a full stack thing – We are talking about a cultural shift – product is a symptom of organizational culture – what do you honor? What do you celebrate? How do you show the love?

1. Marketing ad communications
2. Brand and visual design
3. Product/UX
4. Internal tools
5. Work environment
6. External perception?

• Commitment to design — make it tangible

1. Hire people who make good design happen – teams, not unicorns
2. Demand that everyone is respectful of and collaborates with colleagues and other disciplines – no assholes
3. Demonstrate that good design matters — other people talk about it – press, customers – so that it becomes part of the public story of the company
4. Celebrate good design – yours and others – point to success you are having due to great design

•  Stop looking at your design team + the latest version of path and saying WTF?  And crank up the RPMs – if your company leadership will not listen and if the design mindset is not taking hold, e-mail me and we can get you a job at a start-up where design matters or help you start a company of your own. — thanks

And if you read this far, here is all of this on a handy single slide courtesy of Ross Belmont:

Crib notes from Ross Belmont

This morning I headed over to BluePrint Health to hang out with some entrepreneurs. It is fair to say I have healthcare on the brain and I am going to write a little bit about why over the next few days.

To start, $2.6 Trillion is spent on healthcare in the US every year and 75% is spent on the treatment of chronic disease. This is really scary for the health of our country, but it is a huge opportunity for people who know how to build engaging software.

The key to reducing this massive expense is patient engagement – something that anyone who has built a product that people love knows a ton about.

When I was building my fitness game,we knew if we could motivate small behavior changes in the near term, we could improve (our mostly sedentary) consumers’ fitness level– and ultimately this noticeable improvement in their health would lead to lifelong habits. To get this done, we focused exclusively on consumer engagement.

Over the last few months I have been re-connecting with a lot of the people who helped me build my fitness game. These people have dedicated their lives to helping people live healthier lives and helping doctors close care gaps wherever they exist. I have also been able to connect with government leaders like Todd Park and innovators like the folks at start-up health. It seems there has never been a better time to have a consumer-centric mindset  in the start-up industry – especially if you care about solving the healthcare problem.

Changes are coming. Unprecedented access to data about providers, results of procedures and quality of hospitals and other care giving institutions will be expanding in amazing ways as electronic health records legislation ripples through the industry. The BlueButton Health project is a great example and this is just the beginning. Open data enables fundamental shifts in the way patients manage their health and it will influence trillions of dollars in annual spend.

The start-ups that most deeply engage consumers around this data – the ones that help them understand it, consume it and make it actionable — will have the most influence – and will create the most value.

Last July I talked about how the coming revolution in healthcare would be consumerized but I didn’t realize how fast this was happening. The US healthcare machine is massive, measured in $trillions. As with any big, heavy object, there is a ton of inertia, but it is moving – accelerating – and if you are an entrepreneur who wants to change the world, you should jump directly in its path. NOW. We have already made a couple investments in the space that are yet to be announced, and I am really excited to be focused here and to work with entrepreneurs in this world.

If you are building healthware, I would love to learn about it and help you if I can.

Without a shared sense of urgency you will fail to sync with your investors

I have bookcases full of things my wife and I have read but mostly don’t remember. I also have a 9 month old baby girl named Etta. When these two things come together, I have a mess… or the best algorithm ever for re-discovering books to read over the weekend.

This weekend while I made coffee she cleared a shelf that included Einstein’s Dreams. The book is full of metaphors for time. One of these metaphors describes time as a wheel. As the wheel spins, every point on the wheel takes the same amount of time to complete one revolution. But, physics requires that a point near the hub/center of the wheel not travel as far to complete a full turn as the point way out on the edge of the wheel.

She went down for her morning nap, I re-read the book and thought about how different time is for founders and how important it is that investors respect it.

When I decided to start-up, my total focus was on my company. I was obsessed with the idea of bringing gaming technology and fitness together for the first time and nothing could move fast enough for me. All I wanted to do was go faster, build faster, test sooner, sell more, ship earlier. Delays caused by partners, retailers and vendors taught me patience and perseverance. Slow service from investors was the most frustrating thing in the world. They were “moving quickly,” but I was racing the clock and anything other than real-time felt like not in time.

We were lucky to call some big companies and major retailers partners. But big as these guys were, with what felt like never ending armies of decision makers and infinite layers of red tape, I had more visibility into their process, where we were in that process and how they would make their decision than almost all the VC’s I pitched.

VCs are busy, and while we like to talk about how busy we are, we do not sit on the outside of the wheel. We get to work with people who are hanging on to the rim with a single finger, creating their own way, zooming by, screaming into the space beyond for more.  Investors are service providers to the outside riders, and need to deliver service at a level that feeds the founder’s need for speed.

When you diligence your investors, ask other CEOs they have worked with about the service level. If your investors don’t share your sense of urgency, if they don’t understand what it is like to be way out on the edge of that wheel of time, it might be hard to have a shared vision about anything else.

I can't hear your idea and the answer is NO!

If you are responsible for delivering a product that works and doing it on time, you have a monster inside. It starts as a small feeling in the pit of your stomach, but this menacing character can quickly take over and as deadlines approach, Dr. No is unleashed and this evil doctor cannot be controlled.

There is a tension between people who dream up product on paper and people who build product for reals for reals…I have had to work through this tension with every product team from sneakers to mix tapes to video games and iPhone apps…the creators keep asking for more and the builders say no louder and louder and if not managed effectively this split causes you to loose the valuable collaboration between disciplines and the creative solutions that come out of great engineering teams.

If your engineering lead has become Dr. No, you may have a culture that treats engineering as a resource to be consumed, as executors who can never work fast enough or hard enough to deliver for everyone else. Can you hear it in your product meetings? No…silent behind a blank look. No…wrapped in rolled eyes or a shrug. No…articulated with a frustrated shake of the head. No…slicing through a suggested change before it can be considered. NO…cutting off the thought before it is complete.

You are the CEO. It is your f’ing fault. It Sucks for everyone. You have to fix it.

At my game company, I was responsible for product and Dr. No was in the house as soon as we started writing code and it was my fault. I had spent 6 years managing design and development at a sneaker company. The process of game design was similar, but building a digital product was totally different than working with leather and molded rubber. I knew what I wanted built but I didn’t understand how our product was built and didn’t get why some “big” changes were easy and some “small” changes were impossible. I started to think it was a personnel issue and that I needed a more creative/open minded and hard working CTO/engineering team.

Turned out I just needed to learn some basic logic about our product architecture and incorporate these constraints into my thinking. Also, once I started trying to learn, started listening to the reasons why some of my requested features were crazy, the engineers started listening to me and identifying the goal that lay under the feature request — adn finding awesome ways to achieve the goal without derailing the entire product process.

It was a communication issue and I had to own it so the two sides of product creation could stop speaking past each other in different languages based on different assumed priorities and different work flows and processes.

I worked with my team and we adopted some simple rules that really helped.

1. We started every product change or feature request with a statement of the goal. Before any work was done, we got to agreement on the goal.This put everyone on the same side, trying to find a solution leveraging their expertise/knowledge
2. We moved from a culture of “no” (engineering saying no to requests and design saying no to new ideas for product coming out of engineering) to a culture of “why?” that focused the whole team on understanding an approach and collaborating to remove blocks in the process and to understand the trade offs that have to be made as resources are allocated and deadlines approach.

The head butting didn’t stop, but it got down to a healthy level. People learned from each other and made each other better. Designers worked within the constraints of what could be done and engineers found ways to deliver product that met the designers’ goals.

I don’t think designers and other product creators need to be able to code, but they need to understand the engineering process enough to consider it as they design. Engineers do not need to “get design” or be UI/UX experts, but they need to internalize a view of the end user as interpreted by the product/design team.

For some more on this with specific tactics for designers and engineers, see this piece on designstaff.org

When you start-up you are building a fire and there is lots of wood to chop. Most founders could bring down trees by hand and snap the logs into fire wood over your knee. You have a vision, you are consumed, you will get it done with tools or with your bare hands — somehow, some way it will get built and it will burn.

VCs are tools. Tools are heavy, hard to carry and if not handled properly, they can hurt you. But, a good tool applied to the right problem at the right time can make you more efficient and help you build with higher quality and greater precision. The best tools can open up new worlds of possibility and help you focus on hitting exactly what you’re aiming for; remove friction and point all your energy at blasting through the market you are attacking.

When you are ready to build, tool choice really matters.

The best builders know what they need, how to choose the best tools and get the massive leverage from a great match of tool/builder/project. When you are about to put metal to wood, ready to make the first cut, take the time to carefully evaluate and select your tools. There are a ton of options out there and most are great for a specific job — each offers specific advantages and all have specific limitations.

There are lots of axes you can choose to pick up and swing. Make sure you don’t bring an ice axe to get shit done in the wood shed.

I am setting my priorities for 2012 and starting by betting that doing less, slower in will lead to accomplishing more, period.

Start-ups are a natural home to frenetic activity. People work super hard and put in long hours to see their vision fulfilled. In this world you have to do more than you think is possible faster than imaginable.  Investors are the same way, doing everything we can to see everything, go to every event, talk to every entrepreneur and make sure we don’t miss out. On either side of the table chasing every opportunity without focus or priorities is a fast path to working more and more and accomplishing less and less.

I love hustle, but hustle without depth and focus is a waste of time.

With this in mind, I spent some time looking back at 2011 – the milestones in life and at work.  Life was great with a move to Brooklyn and a new baby. Professionally 2011 was fantastic in a lot of ways and I loved spending a year in New York meeting really smart people who are busting it to build really cool stuff. However, looking back, I brute forced my way through much of the year and in 2011 I got eaten by my inbox.

Last year I spent a lot of time in the glorified position of inbox zero, but at what cost? What was urgent (often for other people) bubbled to the top and got done, but things that are important to me – time to engage deeply with a product or service; a lunch meeting that extends into post lunch coffee when the conversation is great; letting an idea you are passionate about or area you want to learn about consume you for a morning or a day; carving out time to chip away at a long term project in a consistent way for a month or a year – got squeezed out of the calendar.

My 2011 accomplishments, the goals achieved, all came from the discipline to focus and the control to slow down and make time for deeper, more meaningful engagement and learning. But somehow, the sense of accomplishment in the measurable elimination of unread e-mail often over-shadowed the need to prioritize my time, energy and focus each day.

I can’t let this happen again, so all the respect in the world to Brad and David, but in 2012 my new year’s resolution is to do less, slower.

Culture: wear it loud

Use your company culture as the first filter in the hiring process. If someone doesn’t like the experience, they are not a fit. Move on.

Culture is a powerful thing and when you get it right, it can be a guiding force in you business — how decisions are made, how innovation occurs, how people are motivated, what they are motivated to do…all culture. Whatever culture you create, it should be intentional, related to your mission and make it obvious to anyone who walks in the door what is important to you as a business.

If you make the culture obvious, make it loud and ubiquitous, you can create experiences for potential hires that expose them to the culture and really evaluate cultural fit — before you hire them.

AND 1 was a basketball company and we played hoops at lunch on the full size court in the middle of the office. Everyone who interviewed for a job over our first 100 hires had to play in the lunchtime run. Most people thought we were evaluating their game but we didn’t care if they could talk trash or hit a J with a hand in their face. We actually cared about the 5 minutes before the game. We cared how they reacted when we asked them to play — were they open to new/uncomfortable situations. We cared how they responded when we took them into the supply closet to pick out shorts, shoes and a shirt — did they love the product and engage in finding a cool hook-up with stuff that matched. We cared how they acted on the court — did they have fun and commit to the game or remain uncomfortable and nervous. For us, this was all about fit.

Recently I saw this piece on our portfolio company Fab.com and I think is shows how they are wearing their culture on their sleeve (and i don’t just mean Bradford’s ink). If I were interviewing potential hires for Fab, I would make sure to meet them at the front door and point them to the person they were going to meet — across the office. If they could walk across that office and not stop to look at something or pick up an item off someone’s desk just to check it out, I am not sure they would be a good fit. The company is all about design, the office is full of amazing design objects. It is totally subjective, but if a potential hire is not drawn to pick up at least one, does not appreciate an image or object for a moment as they head to their meeting, I would question if they are right for the job.(they are hiring by the way)

Creating the culture is the hard part, but once you have it, use it as the primary filter in your hiring process. It will pay off.

how much true grit you got?

I am not a big believer in quantitative predictors of start-up success, but Fast company had a great piece today on some research out of Upenn finding that “grit” is the real key to success.  We all know starting up takes grit but researchers at Upenn have discovered the elements of Grit and developed a test to measure how much grit you have. The thing that struck me about the piece was the definition of someone with “grit” sounds like someone ready to start-up:

• A clear goal
• Determination despite others’ doubts
• Self-confidence about figuring it out
• Humility about knowing it doesn’t come easy
• Persistence despite fear
• Patience to handle the small obstacles that obscure the path
• A code of ethics to live by
• Flexibility in the face of roadblocks
• A capacity for human connection and collaboration
• A recognition that accepting help does not equate to weakness
• A focus and appreciation of each step in the journey
• An appreciation of other people’s grit
• A loyalty that never sacrifices connections along the way
• An inner strength to help propel you to your goal

Take the test this weekend and see how you score. If you come out above a 4.5, call me

(first post from my mobile)

Over the past month, I have spent a lot of time working with companies on their plans for 2012. Everyone wants to do more than their resources allow and getting the most out of limited resources is in many ways what it means to be an entrepreneur.

But, teams often start editing the options before taking the time to fully create. They say no to opportunities before exploring them because the resources to support them are not in the current plans. The decision is obvious in the current headspace — but editing like this, locking in to your current headspace, makes it really hard to understand the value or potential of an effort and to optimize your opportunities instead of allocating your resources.

A simple example of this is travel. At my video game company I was responsible for product, marketing and sales. As the product got close to completion, I started to travel a ton. From Portland, OR, I was working on marketing partnerships in New York, Cincinnati and Chicago. I was also making trips to Seattle, Minneapolis and Bentonville trying to sell a fitness game to any buyer who would listen.

I scheduled all this travel myself and worked really hard to get the most out of every trip. As hard as I tried, there were meetings and opportunities I missed because it was impossible to get from one place to another, through security and across timezones to make it work for both meetings.

Once, I had to choose between meeting the head buyer at Wal-Mart and a national media opportunity in New York. I knew my priorities and based my choice on what I thought was best for the company.

We sent the product to Good Morning America and it was included in a segment (instead of me having my 15 minutes of fame by being on the show). I went to Bentonville to try to sell some games. I made the trade off based on the headspace I was in — a commercial traveler trying to generate revenue for my company.

But what if I had a private jet? How would my decisions and opportunities and priorities change in this new headspace? If I had a jet, I might have taken the time to more fully understand the chances of appearing on the show and the value of a focused segment vs. inclusion of the product in a segment on fitness gaming.

I think I allocated resources rather than optimizing my opportunities.

As you make your 2012 plans, fine people $100 for saying “no” and push them to imagine a world where anything is possible, unconstrained and with infinite ability to execute. Figure out what you would do and where the company would focus to optimize opportunity. Be clear about why.

Use this vision of the biggest opportunity to set your priorities and allocate your resources in the real world.

Last night I got an e-mail from a friend and classmate asking if I would spend some time with his friend who is graduating this spring from a top 3 b-school. He said she is:

…moving from consulting to a start up and would like to know how to best position herself in order to build the necessary skill set and make the transition to VC in the longer term (sales & ops, biz dev, sales etc).

start-ups are not stepping stones

I really don’t know what to say to this. People who start-up suffer, they grind, they obsesses, they push against the way the world is because they believe they can change it– for the better. You cannot survive this if you are not driven by passion and you will not do well if you are focused on what is next rather than what is now. Working at a start-up can open lots of doors — if you crush it. But if you view it as a stepping stone in your perfectly planned, career management optimized life plan — you will fail. Doors will close.

When I hear this type of multi-step plan I want to be helpful, but I struggle. I think the most successful people find ways to always pursue the opportunity they are most passionate about at that moment. Life is too short to spend years “learning the necessary skillset” to do what you actually want to do. You can be successful at a job if your motivation is to build the necessary skill set to make the transition to something else. If you want to be a VC, or anything else, then do that. Don’t waste a start-up’s time and money by optimizing for your future instead of the future of the company.

When I joined AND 1, I saw the opportunity to work on sneakers, a life long passion, and to play hoops at lunch, another life long passion. When I joined the footwear department, it was a department of 2 (me and a co-founder of the company) and I spent my first week organizing a storage closet and making photo-copies of design sketches. I loved it. I loved looking at the sketches and I loved being in a closet full of shoes. I also loved playing ball at lunch everyday and talking trash with a bunch of other young, smart people working their asses off to be part of the number one basketball company in the world.

I had no idea what I would do next and I didn’t care. We ended up at close to $200M in revenue and I played my part, but I never could have been part of this journey if I was motivated by anything other than love of the game.

When I left to build a fitness gaming company, I knew it would be hard (maybe impossible) but I was compelled. I could not help myself. I needed to work on the idea because I could not think of anything else. If I had thought starting that company would have helped me get a job in VC, we never would have pivoted from triathlon training software to home fitness games; We would have quit when we couldn’t get developer kits from Microsoft for X-box; We would have closed the doors when NIKE chose to work with Sony (instead of with us) on a fitness game; We would have given up when the gaming retailers said no and we never would have gotten Nordstrom or the fitness video buyers as Best Buy and Wal-Mart to say yes. If anyone on our team had been looking forward to their next job, we never would have raised money, built the product, sold over 100k copies and helped a bunch of people discover a personalized, interactive, goal-oriented home fitness experience…we would have just failed…sooner.

If you are a second year MBA and you are going to McKinsey or Goldman, great. You have a job. Enjoy. If not, spend the break getting back in touch with your heart and forgetting the strategic idea of necessary skill sets and career trajectory. Come back in the spring understanding the career safety net that lives in the risk mitigating degree you just spent 24 months earning and be ready to pursue a passion – be ready to jump.

When you want to talk about that, how to do it, where to start, I bet you will find lots of MBA alumni, including me, ready and willing to help. If you are still trying to figure out the stepping stone game to the end game that you can’t define because it is 5 years out…maybe talk to career management instead…

UPDATE: for another/additional look at this, see this piece on designsstaff.org

It is a great time to be a designer. Big companies are recognizing your value and your scarcity and start-ups are investing in design. With all this attention starting to focus on the craft, you will get calls, lots of calls.

Be excited, but be careful.

If the "product guy" can't answer these three questions, move on

Design is a hot topic right now and the bandwagon is filling up fast. Recruiters, investors, product guys, all calling to see if you want to come work at a start-up that has a great concept and early traction, but really needs some help on the design side…

When you hear this, listen. It could be a great opportunity. When you hear this, be skeptical, it could be some investor pushing a team to check a box. Everyone is saying you need a designer to be successful, but most people don’t know what a designer needs to be successful – and it is up to you to figure out if you are just a name on a list and will be a resource to be consumed or if this is a chance to be an integral piece of a culture that is driven by design.

I have been there, at the start-up that needed a ton of help on the design side to be successful. When I was the creative director for AND 1, we decided to invest in design and opened an office in Portland, OR. We ended up pulling some of the top designers from NIKE and Adidas over to our side. We built a fantastic squad. It started paying off immediately in marketshare and mindshare. Leading this team was a blast but I think we created a real advantage because this talent was poured over a culture compatible with design rather than into a department to be consumed as a resource.

The recruiting effort was intense and we went after top people across the industry – selling them on joining a start-up as designers. As the conversations progressed, I realized that all the best guys were asking us the same 3 questions in different ways and they all related to our culture.

1.    Where do new ideas come from? For example, how did product X or marketing initiative Y go from idea to in market? Who was involved? What did the process look like?

In my experience, designers flourish in a best idea wins culture. Look for a company where you are expected to contribute on any topic at any time. You will be more successful at start-ups that want engagement and vision on every consumer touch point and internal process and are set up to act on individual insight. If the person interviewing you knows what they would do with a great idea, it is a good leading indicator of this type of culture.

2.    Who is your customer? How do you know? What would it take to change the definition of your customer?

The best product teams I have been involved with always got the vision holders close to the consumer and created powerful loops of market feedback. Look for a culture that counts on everyone to help define the customer and that is open to new perspectives from customer service to finance to sales etc. A well formed, but plastic customer description that is expected to evolve with new insight means the door is open for innovation and that your developed sense of consumer empathy will be put to good use. 

3.    What does your brand stand for and what are your product priorities? 

At AND 1 we started and finished with the ball player with attitude and believed in brand above all else. Companies that have a well defined vision for the brand and believe in building brand across all consumer touch points are more likely to support successful designers. Brand conscious start-ups tend to be consumer centric and have a native, design driven culture where you can have material impact without material politics.

I think any designer considering a role at a start-up should be asking some version of these three questions and learning if they will be a design resource or a successful designer. If the company is not set up to let you succeed, keep waiting, the phone should ring again in 5…4…3…2…1…

If you are a designer thinking about joining a start-up I hope you will reach out. If you have other questions you think are critical to ask, I hope you will leave them in the comments.

Last week I spoke on a panel about subscription commerce at the Biztech@Wharton conference.  First Round has eCommerce in our blood and we are always looking for innovation in the space. Online subscriptions are an emerging trend and we have some great companies in our portfolio who are innovating around subscription commerce.

These businesses are much more than putting things in a box once a month. On the panel we talked about paid and organic customer acquisition, the complex operational requirements of the business and the value of original content as an engagement mechanism.

The most interesting piece of the conversation for me was around the question “how do subscription commerce companies create value and are there industries or subscription models that are more or less attractive for entrepreneurs and investors?”

Check the box to create maximum value in subscription eCommerce

Across all the “Birchbox of X” companies I have seen in the past 12 months, I think there are two things required to create maximum value in the subscription commerce space:

1. Opt-out economics
2. Brand voice

Value Driver #1: Opt-Out Economics

One of the great things about the subscription model is consumer commitment. When they subscribe, the consumer makes the purchase decision one time, but they buy every month. The best services completely separate the pain of the purchase from the reward of the product. The consumer gets a ton of distance from the pain of paying and may even think of the service as a gift. Big eCommerce businesses can be built by making compelling offers to your membership on a regular basis, but if the decision not to make a purchase in a given month is not equivalent to canceling your membership, then you are a building push commerce and might be closer to a flash sale site than a subscription business.

Value Driver #2: Brand Voice

Subscription commerce is most valuable when it fundamentally changes a consumer’s consideration and buying process. These companies need a powerful brand voice because the conversation with the consumer is on-going. It is this voice that builds an unfair advantage when it comes to curation and personalization in a cluttered market. It is this voice that helps the consumer discover what they want, shows them why they need it and delivers the surprise and delight to generate loyalty, motivate engagement and drive incremental purchases.

Because of these two must have value drivers, subscription businesses work best in categories of consumer goods that are overwhelmed with choice from infinite brands; categories where the consumer understands quality in a qualitative rather than quantitative way and where experimentation with a new product is both low risk and delivers immediate results.

When you have all these things working for you, you have built a service that moves people. You have the chance to change the way people shop.

The conversation covered a ton more than this and I really enjoyed it. Thanks to the other guys up there with me, including moderator, Anand Sanwal from CB Insights, Greg Alvo from OrderGoove, Rob Lafave from our portfolio company Foodzie, Matthew Smith from Shutterstock and Todd Smith from Stunner of the month

the pre-mortem, a no BS look into the future

Post-mortems help you do it better next time. In start-ups, sometimes you only have one shot and so I love the concept of the pre-mortem to help you do it better this time.

When I was building product at AND 1, we always did post-mortems on product launches and other strategic initiatives. It helped us get better as a team and build a culture of make mistakes, but never make the same one twice. In lots of start-ups, you see post-mortems in the form of Eric’s 5 whys when things break, when dollars are wasted and when people are looking to improve for next time. This is great, but it doesn’t help make what you just did any better and it doesn’t help eliminate the group think that probably caused the mistake in the first place.

The true “best idea wins” culture is rare in a company of more than about 10 people. As an organization scales, you have more structure and more meetings and often you get conversion around an idea or strategy and lose the highly valuable dissenting opinions.  A systematic post-mortem will help the company make better decisions over time, but to really make better decisions as a group, the institutionalized pre-mortem is one of the best ideas I have heard in a long time.

In a pre-mortem, you get your team together after a strategy or plan of action has been set and instead of asking them to project what will happen, you tell them to imagine it is 12 months from now and the effort was a complete disaster. Their job is to describe, in a detailed narrative, what went wrong and the impact of each mistake. You may not kill the project, but pushing your team to point their creative talent at imagining the things that got messed up a instead of the arguments for going full speed ahead, you will look through the curve and see errors before they happen.

Rather than group think, you have institutionalized dissent.

The term was created by Gary Klein and I heard it in the video below where Daniel Kahneman talks about the concept and how to apply it (the whole thing is good — the topic is how to think of decisions as products and implement quality control mechanisms, but the specific part I am referencing is from about 13:00 minutes left to about 8:30 left). Let me know if you try it and if it works for you (or doesn’t).

If you are going to buy something, it should be exactly what you want...it should be Custom Made

Today I am psyched to announce our investment in CustomMade.com. You can read about it here and here, but I wanted to give a little backstory on why this company and the marketplace they are building is so exciting.

I am addicted to sneakers and probably always will be. But, at the peak of my addiction, the recreational drug of mass produced kicks available at retail was not enough. In the deepest grips of my addiction, I took a deep dive into the hardcore world of custom shoes.

Working in the footwear industry, I became obsessed. I would seek out the craftsmen all over the world who could create the 1 of 1 custom footwear I needed to feed my addiction. There is magic in participating in the product creation process and getting something built just for you. The product says something about you, represents you, makes a statement that can only come as the result of a handcrafted project.  But, most people I know would never do this.  The process of creating these statement shoes was difficult to manage and very inefficient. I had to create a detailed description of what I wanted to some guy who would turn them into art. After a bunch of back and forth on the design, we would negotiate the price and I would cross my fingers and send full payment for the final product. Sometimes it worked out, sometimes it didn’t, but it was always a difficult process.

They don’t do sneakers (yet), but when I met the team from CustomMade, I fell in love. The team is building the first online peer-to-peer marketplace connecting shoppers with skilled artisans who create unique, luxury custom goods including furniture, cabinetry and jewelry.

It is a hard problem to solve, but if you can take friction out of the system and make it as easy to discover or create a custom item as it is to shop the generic stuff online, I think a large audience will never shop retail again – not just for shoes, but for all the products in our lives from tables and chairs to engagement rings, pool tables and picture frames. When a consumer can get better quality and personalization for the same price as big box retail, it becomes an IQ test, not a decision.

We were joined in this investment by a great group of syndicate partners including Google Ventures, Founder Collective, Launch Capital, NextView Ventures, Andrew McCollum and David Tisch.

The power of managing a complex transaction and creating trust for a consumer is obvious when you look at Uber and TaskRabbit, ReadyForce and Docracy. We have also seen the brand value that is built when you deliver unprecedented access to curated, high quality, personalized goods and services in Birchbox, Modcloth, KiwiCrate, Fab and Chloe + Isabel. I think the CustomMade marketplace will leverage these themes and we are excited to help the team build a leading brand in this space.

Fred had a great post yesterday about one of his portfolio companies gathering continuous feedback from the board after each meeting. I am a huge fan of gathering and measuring feedback and letting the results guide your next steps. I believe in it for product development, for corporate development (as Fred talked about) and for professional development (as in 360 reviews).

A few months ago I decided I wanted to have a more direct sense of how the founders I meet with each day, my customers, felt I was doing. What did they think of the SneakerheadVC product? Was it worth their time to sit down with me and help me learn about their business?

I said the VC product was broken for 99% of founders and began collecting feedback in a simple survey that I send people after every meeting.

Here are some results after more than 100 meetings.

VC’s are “always late” and spend some portion of the remaining meeting time describing how busy they are as a form of apology. I hate late and do my best to avoid it. As you can see, not good enough.

My sense is most investors, especially early stage investors, do not spend the time to dive into the pitch decks or summary plans prior to meeting with a company. Most meetings start with the open ended, “so, tell me what you do and give me a little background on the team…” Having spent days putting together summaries and pitch presentations for my companies, I think a meeting that starts like this is already headed in the wrong direction. With a little effort up-front I have found first meetings cover the ground of a first and second meeting and regardless of the outcome in terms of investment, I feel like I am able to be more helpful when I am more prepared. Again, still not perfect,but I am psyched to see more than 65% say I at least understood the business before the pitch and almost 20% say I was extremely prepared.

It is one thing to be prepared, another to add value. I also ask if people feel the time they spent with me, instead of building their business, was worth it. Time is a founder’s most valuable resource and if you give me an hour, I want to make sure you walk away feeling like it was well spent. It is great that most of you do, and interesting that  the percentage (4.55%) who feel it was not worth is the same as the percentage of meetings where I was late…

Thanks to everyone who spent the time to respond to my survey. I have some more data on my Net Promoter Score and the sources of my meetings that I am putting together for a future post as well as some of the free form feedback that i get in answer to “what could i do better” that is actually the most valuable part of the whole project for me.

If you have thoughts on better questions to ask or other feedback on the survey, please leave it in the comments or send me an e-mail.

So an architect, a psycho killer and an evangelical preacher walk into a VC’s office…Sounds like a decent joke, but the punch line is you need these three characters to get funded.

I have been on one side or the other of thousands of pitches and get asked about what makes a good pitch all the time. This is my attempt to answer that question. At AND 1 we pitched athletes to sign with us and pitched retailers to buy our product. We got pitched by agencies, potential partners and a few acquirers along the way. At my video game company I had to pitch investors, potential employees, retailers and partners from Microsoft and Sony to P&G and McDonald’s. We got pitched by distribution partners and content creators looking for placement in the game. Now, at First Round, entrepreneurs pitch their businesses and I pitch our platform and approach.

The Architect: Sketch something that will still be visionary in 100 years

Thousands and thousands of pitches over 13 years, some good, some bad, but none perfect…none that combined the ideal mix of clarity of vision, obsession with the problem and evangelical passion for their solution, until yesterday.

The sketch– Architectural clarity of vision

This team had a strong idea and clear vision for the brand rather than just the product, business model or distribution mechanism. Just like in design, the best ideas are things that can be drawn on a napkin. When someone asks what you are starting up, you should be able to sketch the business for them in a sentence or two. The perfect pitch starts with this sketch and gets everyone in the room leaning forward to learn more.

Psycho Killer: An obsession that lets you run through walls

The obsession – Psychotic depth of understanding

It was clear that the team had a medical grade compulsion to solve the problem and that this obsession with the consumer and the details of their experience were the foundation for every decision. As you describe your product and your vision, describe the insight that motivated the decision. The perfect pitch shows everyone that you know more about your consumer, your competition and the dependencies in your model than any sane person should and more than anyone competitor ever could.

The Evangelism– Religious passion

The Evangelical: Can I get an Amen? AMEN!

As the meeting went on, I could see the excitement in the room rising. The team was weaving emotion into the narrative and their passion for their solution was tangible. Every pitch should describe the innovations in product, distribution and business model, but as you build momentum, the best switch from pitching to preaching. The perfect pitch is not an objective business meeting but a baptism: a true believer working to convert the unwashed masses and at the end they get an amen!

Love to know if you all agree and if there are other characters that play a role in the performance that is the perfect pitch.