Both Sides of the Table


Just back from vacation and also some work travel and want to get back to blogging so expect a few posts over the next couple weeks.

During my absence I posted a couple new episodes of Bothsides TV recently. I’ll try to get write-ups shortly but for now here is an overview of my interview with Nanea Reeves – President and COO of textPlus. I could have listened to her for hours as many of her lessons were ones I hadn’t heard before such as how she used online gaming when she was younger as a way of both teaching herself tech as well as learning to lead remote teams.

Just so you know I work directly with Nanea and her arrival last year at TextPlus as President & COO has been transformational for the company. I’m sure I would speak for the entire board and management team in asserting this. I’ll try to do a future blog post on some of my insights in watching Nanea enter the role and how the founders enabled her success. It has been awesome to watch what most would have thought impossible.

Nanea Reeves has a storied career in senior leadership roles at technology companies. Check out these amazing credentials before concluding why you should watch this episode or at least some of the powerful clips. Nanea help leadership roles at EA (SVP, COO Global Online), Gaikai (Chief Product Officer, Chief Strategy Officer), JAMDAT (SVP), Machinma (COO) and currently textPlus (President & COO – including leading engineering and product). In our video we discussed leadership topics such as managing product and engineering teams, communication and company organization.

Here are some things we discussed:

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Last Wednesday I had coffee with an old friend and former colleague. We haven’t worked together in a while and were reminiscing about the old days. I miss the old days when we used to be locked in battle together on the issues affecting our company.

Seeing him again also reminded me of one of my first big lessons as a VC – knowing when giving in is more important than being right. So I Tweeted that the next morning:

“When the consequences of “being right” are not great enough sometimes graciousness & conceding is a better option”

Yes. Of course it’s a universal lesson and one that I’m doomed to learn over and over.

I wrote about it in this widely read post, “Be Gracious When it’s Time to Give In.

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I recently attended and presented at Dave McClure’s PreMoney conference in San Francisco. I go every year because I love events hosted & moderated by insiders involving discussions by insiders because it maximizes the amount of real discussions people have. What you’ll see if you watch the video is an unscripted and unfiltered look into how Scott Kupor & I see some of the changes and challenges of the venture industry.

tl;dr version

Scott and I agree on nearly everything: The VC structure is changing and there appears to be a bifurcation into small & large VCs with an impact on “traditionally sized” VCs. I wrote my version here and Scott wrote an excellent write-up of his views here.

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There has been much discussion in the past few years of the changing structure of the venture capital industry.

On the surface the narratives have been

The rise of “micro VCs” or seed-stage funds
The rise of alternative sources of capital (crowd funding and the like)
The poor performance of the asset class (this analysis has largely been wrong as I pointed out here –> most analyses were clumsy rear-view mirror looks at the data)
We are in a bubble (with so many private $1bn+ valuations)

15 years ago we were at the peak of Internet hype with the launch of many over-capitalized businesses with a market size & opportunity was limited.

Where are we today?

50x more Internet users (2.4 billion)
Online connections that are 180x faster (10.

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Since 2009 we’ve been in an unequivocal bull market. Venture capitalists have raised increasing amounts of money from their investors (LPs) every year. An impressive number of new VCs have been created – most of them with new seed funds. We’ve had an explosion of alternate sources of financing from crowd-sourcing, angels, accelerators, incubators, corporates, corporate incubators.  And importantly we’ve had revenue. Consumers buying through smart phones, travelers using the new, shared economy and businesses replacing old software with modern cloud-based solutions.

It has been a good run.

But it won’t last forever. It could last 6 more months or 6 more years for all I know. But the economy grows in cycles and always has: Expansion & contraction. For what ever reason we’re wired to have amnesia during the run up and prescient memories of how we ‘knew it all along’ as soon as the slide begins. I do believe that we are in structural change where technology will increasingly play a bigger role in all facets of life so the long run up for tech is promising through all of these cycles. Once you understand both sides of the cycle you start to recognize signs of behavior during each phase.

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