Venture Voice: February 2006 Archives

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February 23, 2006

VV Show #28 - John Bogle of The Vanguard Group

If you’re making lots of money in a fat industry for doing relatively little, then the last thing you want is a competitor like John C. Bogle. He founded The Vanguard Group in 1975 and revolutionized the mutual fund industry by slashing management fees. By creating the world’s first index fund, John showed investors they could invest in the market without giving a large portion of their earnings to fund managers. While it sounds easy in hindsight, it was a difficult path. John was fired along the way and made many enemies in the industry. But John, like any good entrepreneur, is a fighter. And at age 75, he’s still ready for a challenge.

Show notes:

3:30 College years at Princeton

“I’ve always been a terrible idealist – or a wonderful idealist.”
The mutual fund industry was described as “Tiny but contentious.”
“I’m even more idealistic now than I was then.”

13:15 Executing on a senior thesis by starting a career in mutual funds

Became head of Wellington Management Company by age 36.
“I fell for it hook line and sinker.”
“My merger partners… banded together and fired me.”
“It was awful, I cried. And why wouldn’t you? But I know I’d made a terrible mistake and ended up paying a terrible price.”

18:00 Started the world’s first index fund

A thousand times growth since start.
“Fired with enthusiasm.”
“I can assure you I am no saint. If you don’t believe that ask my wife.”
“The more the managers take, the less the shareholders make.”

23:40 Idealism and execution

“The Lord has created few people with a greater feeling of determination than I have.”

28:00 Keeping costs low

“I’d be embarrassed to walk into an executive dining room.”

32:15 Values in a company

“For God’s sake let’s always keep Vanguard a place where judgment has at least a fighting chance to triumph over process.”

38:45 Managers have usurped power from owners

Describes this problem in The Battle for the Soul of Capitalism

49:15 Fighting corruption through the market

“Mutual fund directors are pretty useless appendages.”
“If I were persuaded it would never happen, would I start doing things differently? Not at all. I’d do them even stronger.”

55:20 Going against the grain

“Nobody in this business had more fun than I had. Nobody.”
“Entrepreneurship is about the joy of creating.”

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February 15, 2006

VV Show #27 - Following Entrepreneurs at DEMO 2006

Download the MP3.

When a startup launches its first product, should it expect a lot of fanfare? It should if it launches at DEMO before an audience of hundreds that includes some of the nation’s top journalists and venture capitalists (not to mention Venture Voice). DEMO is a two-day conference, held in Phoenix this time around, that features about 70 never-before-seen technology products. Most of the products come from scrappy startups. We follow two of those startups through the process, Sproutit and Sharpcast. Along the way we’ll talk to countless other entrepreneurs on the floor and some people who came to pick companies to cover or invest in. We covered this event last year (part 1, part 2) and followed VideoEgg, which was recently funded by the venture capitalist we introduced them to on that show. Let’s see what happens to Sproutit and Sharpcast.

Show notes:

:30 Covered VideoEgg last year; it got funded by David Hornik of August Capital

1:35 DEMO took place in Phoenix, Arizona

1:50 Introduction to Charles Jolley about of Sproutit

“Mailroom answers e-mail, which is a pain that a lot of people feel – they’re [customers] willing to give us five minutes of their time just to see if it works.”

“We’re an Internet company. You can do this from anywhere. Let’s put our money where our mouth is. So we moved to Prague.”

“Go to Prague, save your money, so you can come party out in Phoenix for a few days and meet lots of press.”

DEMO Superbowl party including The Wall Street Journal’s Walt Mossberg.

10:15 Introducing Gibu Thomas of Sharpcast

Former company was acquired by Handspring, which is now part of Palm.

“In those days it’s just you holding each other up.”

“Entrepreneurship is often the triumph of passion over reason.”

“The Treo didn’t become successful with multimillion dollars in marketing. It became successful because enthusiasts got the product and told other people about it.”

16:15 Introducing Mike Brown of Partech International

“If we sell the company some day it will be enough to buy a small Korean automobile.”

“Bootstrapping is not fun.”

"Not having a lot of money actually bring a lot of disciplined to companies.”

19:00 Andrew Graham from Bones in Motion

“We were on our third script when we realized we need to be true to the product. And it’s a storytelling product.”

20:35 Andrew Wright from Smilebox

“If I had it to do over again I maybe wouldn’t have raised my round two weeks ago because I’ve had a lot of interest here today and I probably could have gotten a higher price… or… well, who knows.”

22:10 Oliver Starr of MobileCrunch

"If you’ve covering technology and you’re not at DEMO, I think you’ve blown it.”

“These is a phenomenon with these Web 2.0 companies, which many of these are, that they’re not built to be stand-alone enterprises. They’re built to be acquired by Google or Yahoo or perhaps even Microsoft.”