What Venture Capitalists Are Really Thinking

I cofounded a company called Sawhorse Media that's making sense of Twitter (Twitter was founded by past Venture Voice guest Ev Williams).

We decided to launch a new site called Venture Maven to make it easy to follow what VCs and angels are tweeting about. For example, if you were pitching Spark Capital, you could have checked Venture Maven yesterday to see one partner was at the dentist and a principal just got off painkillers after a knee surgery. Better open the meeting with a good joke.

Please let me know your feedback. We're also thinking of launching a similar site for founders and CEOs.

You can find Venture Voice on Twitter at @VentureVoice and me personally at @Gregory.

Posted by Greg Galant on May 13, 2009 | Permalink | Comments (3) | TrackBack (0)

Angel Financing Without Hellish Legal Fees

It's great to hear stories like the one where Andy Bechtolsheim handed the Google founders a $100,000 check before they even set up their bank account. Convince an angel to invest and you're off to the races! However, what many aspiring entrepreneurs don't know is that after the one or two page term sheet there are dozens of pages of documents that go into even an angel financing.

Since law firms have templates for these deals you might think it's no harder than copying and pasting. The problem is there are lots of different templates floating around law firms, and a countless number of terms that could be changed. Many of these terms really don't make too big of difference, or if they do their effects are so hard to anticipate that arguing over them isn't worth the time. Lawyers get paid by the hour so they have an incentive to find terms they don't like (and there are always terms to not like). So lawyers will often spend weeks bickering over trivial issues, racking up $10,000s of legal fees, delaying the financing and putting the deal itself at risk.

Enter angel fund Y Combinator, which has just released the financing documents it has standardized and used with dozens of entrepreneurs. If these documents get a reputation for being fair (which is likely given the Y Combinator's good reputation), they could save million of dollars in legal fees for startups. The key is that both the entrepreneur and the investor trust that the Y docs are a fair deal for all, and trust enough to tell their lawyers not to mark it up! This could do to angel investing what Creative Commons did to copyright or what McDonald's did to hamburgers.

UPDATE (8/14): Scott Rafer (a past VV guest) posted his convertible debt note (direct link to doc) he's using for his current company, Lookery. Rafer did a convertible debt deal, which has many advantages as my friends at Venture Hacks have argued. On the other hand, Josh Kopelman has argued against it, pointing out several disadvantages. It seems to be the type of issue that could go either way depending on the dynamics of the particular company, oppertunity and investors -- but if we had a standardized set of docs for each verified by a trusted third party it'd be very powerful. The NVCA did this for later stage docs (of course they're funded by the VCs). Who could do this for convertible debt rounds?

Posted by Greg Galant on Aug 13, 2008 | Permalink | Comments (4) | TrackBack (0)

Uncensored Interview

The folks at Uncensored Interview were nice enough to turn the tables on me by interviewing me on their show. You can watch all the clips here. Here's me talking about what makes a good interview:

Please join our new Venture Voice Facebook Page.

Posted by Greg Galant on Jul 6, 2008 | Permalink | Comments (0) | TrackBack (0)

Next Question?

In our last round of questions on this blog, we asked each former guest about his or her first time (raising money). What should our next question be?

Give us your ideas in the comments or via our contact page.

We've got a number of new audio interviews scheduled. To support the show, please consider becoming a Venture Voice member by clicking here. (Just like NPR, but for entrepreneurs and without the tote bags.) More members = more interviews.

Posted by Greg Galant on Jun 1, 2008 | Permalink | Comments (1) | TrackBack (0)

David Sacks' First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

David Sacks: I asked Peter, Max and Elon to finance "Thank You For Smoking" with me. I didn't have to do too much selling since I had worked with them at PayPal and was putting in my own money.

Posted by Greg Galant on Apr 24, 2008 | Permalink | Comments (0) | TrackBack (0)

Kelly Perdew's First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Kelly Perdew: I raised my first round of financing ($500K in equity) from friends and family while I was still in business school. Be very careful about taking money from friends and family... while it is easier to access, if things don't go well, you tend to stay in the deal much longer than is good for you to try and save their money!

Posted by Greg Galant on Apr 22, 2008 | Permalink | Comments (0) | TrackBack (0)

Evan Williams's First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Ev Williams: I asked my mom for $10,000. She gave it to me.

Posted by Greg Galant on Apr 21, 2008 | Permalink | Comments (0) | TrackBack (0)

Jay Adelson's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Jay Adelson: The first round of financing I ever raised was from angels. I was working with Al Avery, who co-founded Equinix with me in 1998. A good friend of mine, who had founded a company in Silicon Valley in the mid-nineties and sold it to Cisco, was mentoring me to avoid going initially to the VCs.

From his perspective, nothing could be worse; Showing up at VC with a business plan, with no executive team, no execution, amounted to no valuation, and the VC taking way too much of the company for a series A.

Instead, he felt, do everything you can to bootstrap or angel fund it, then go back (even a month, or six months later) to the VCs with something they can't argue is as risky.

This friend of mine went to two friends of his, and we raised $100,000.00 to start. We followed his instructions to the letter; We hired some executives, we started the process of operating our business, got an office, etc. We made the business real. Most importantly, we found a great corporate law firm to start all the paperwork, who later would help us negotiate and deal with the VCs.

Three months later we gave away roughly 40% of the business for $12 million dollars. The $100k was set up to convert to essentially $200k worth of stock at the close of Series A. I think they did quite well, and we're all still good friends.

Posted by Greg Galant on Apr 18, 2008 | Permalink | Comments (0) | TrackBack (0)

Joel Spolsky's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Joel Spolsky: I put in a very small amount of money (I think it was about $50,000) from my own savings. That carried us to profitability.

Posted by Greg Galant on Apr 17, 2008 | Permalink | Comments (1) | TrackBack (0)

Fabrice Grinda's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Fabrice Grinda: The first time I had to raise money was for Aucland, a copy of eBay for Southern Europe which was my first Internet startup. I was lucky not to have to raise seed money. While in college at Princeton, I built a company exporting high end computer equipment to Europe (motherboards, memory, CPUs, hard drives, etc.). Given its profits, I left Princeton in June 1996 with $50,000 in cash.

When I joined the McKinsey New York office as a consultant in September 1996, I ran a sophisticated real estate rent versus buy model. The model and my rule of thumb analysis (see Rent … unless you want to buy) were screaming BUY! I bought a large 1 bedroom apartment on 54th and 2nd for $115,000, putting $25,000 down.

With the other $25,000, I bought 4 stocks: Yahoo, Microsoft, Amazon and Intel. When I decided to create Aucland in July 1998, I sold the 1 bedroom apartment for $185,000. I sold all the stock I owned. After taxes, I was left with around $300,000 in cash. I invested 100% of it in Aucland.

Click to read more.

Posted by Greg Galant on Apr 16, 2008 | Permalink | Comments (0) | TrackBack (0)

Scott Rafer's First Time (Raising Money)

This is the first of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Scott Rafer: The first money I raised was for Fotonation in 1996. We just had a cashflow issue, so borrowed $25k off a friend of mine in NY, paying him back the principal plus interest and warrants. It was the right thing for the situation. My mistakes were later.

Posted by Greg Galant on Apr 15, 2008 | Permalink | Comments (0) | TrackBack (0)

Google is Making the Web Free. Will DoubleClick be its Next Free Service?

Over at Silicon Alley Insider, Hank Williams is arguing that VCs are supporting free services that ought to be paid for on the hope advertisers will foot the bill down the road -- thereby eliminating the opportunity for noble paid services to make a couple honest bucks by charging users. It's a dubious argument, as pointed our by the site's own editor (ouch).

If we accept the argument that free is a bad thing, then wouldn't Google be to blame? It's acquired several companies such as Urchin and VC-backed Feedburner (our first guest) that offered paid services and made them free. Google also acquired VC-backed Jot (their CEO talked about plans to charge users on Venture Voice) and GrandCentral, then accelerated their development into free services.

Google understands there's at least two ways to make money from "free" services. Ads, which are time tested and Wall Street approved. And data. Data has tremendous value, especially to Google (as opposed to VCs), as Google can use it to decide on new services to launch and to choose acquisition targets. (Who even needs to do due diligence on an acquisition target if you already are running its analytics?)

What's next? Look to the past. When Google acquired Urchin, Google was working on its own analytics product that it dumped in favor of Urchin's battle-tested service. Urchin had a hosted stats product that was turned into the free Google Analytics service, and a downloadable product with a license fee. Now, Google has its own ad server in development but just closed an acquisition of DoubleClick (their founder interview here) that charges for its industry standard hosted ad serving service and downloadable ad server. Why not dump the Google's beta free ad serving product and just make DoubleClick's hosted ad server free?

To most companies, it'd be a fine strategy to have different product lines for different market segments (e.g. Microsoft Works vs. Office, Toyota vs. Lexus), but not to Google. The beauty of Google has been allowing the same service to scale to companies of any size, most famously in the case of AdSense/AdWords. Will it break this tradition to preserve DoubleClick's hosted ad serving revenue, which is already under attack from many competitors and from an open source solution (OpenX)?

Disclosure: This blog entry is free.

Posted by Greg Galant on Apr 4, 2008 | Permalink | Comments (0) | TrackBack (0)

Entrepreneurship in South Africa

We just received this e-mail from Sydney Mfuniselwa who gave us permission to post it:

My name is Sydney from South Africa, I am really moved by the interviews on show. I wish we had something like this here in South Africa because I think my country needs stuff like Venture Voice as it still developing.

My point is I am 25 young black man as software developer, trying to go on entrepreneurship but its hard in this part of the world because most of the people cannot even use a computers and I already made my mistake by planning and planning for a long time in developing a database for the company I work for which i did developed and presented to my senior manager but just heard the company has already sign up for a new system to be implemented because of this I felt so down for a while up until i manage to put my hands on one of venture voice interviews. Two things I have highlighted from the entrepreneurs you interviewed are:
1. Do not waste time trying to plan a perfect product execution is the key.
2. And do not let million rejections wear you off.

Now I am trying again because i believe I should be an entrepreneur and i just open internet cafe on one of historical known building in Carlton in the Johannesburg CBD.

I truly appreciate Venture Voice.

Posted by Greg Galant on Dec 11, 2007 | Permalink | Comments (3) | TrackBack (0)

Silicon Valley Postcard

Silicon Alley Insider asked me to write about my trip to the West Coast (DEMO in San Diego, Podcast Expo in LA, meetings in Silicon Valley). Enjoy!

Posted by Greg Galant on Oct 2, 2007 | Permalink | Comments (0) | TrackBack (0)

Venture Voice Rebooted

Save the orange for later

We took off for the summer from Venture Voice. E-mails like these from loyal fans made it a painful experence:

Great show, have you taken the summer of? I hope to hear you back on the pods soon.


Penticton, BC


I talked with Joel Spolsky recently and he said that you are no longer doing Venture Voice! I have learned so much from your podcasts and was disheartened to hear this news. I do hope that you continue VV. I wish you the best in what you are now doing. Diwant

I can explain!

I was busy launching a new business called News Groper, a network of parody first-person blogs. For example, if you want your fix of business news, you can read blogs "by" Tom Perkins, Ben Bernanke, Stephen Schwarzman and Jeff Skilling.

But fall's upon us. Venture capitalists are back from vacation, customers are ready to do deals again and entrepreneurs are more than ready to pounce. As such, we're ready to give you the content you need.

I'm very excited to announce that Eddie LeBreton has joined the Venture Voice team to help take things to the next level.

Now we need your help: What can we do better? Who should we interview? Any other great ideas for us? Want to sponsor Venture Voice? Please post in the comments or contact us.

Click to read more.

Posted by Greg Galant on Sep 18, 2007 | Permalink | Comments (6) | TrackBack (0)

Facebook: Crossing the Chasm in Reverse

I had the pleasure of being in the very first Facebook generation. My college was one of the first 13 to be added to Facebook, and we were all jazzed just to see photos of each other and occasionally get a "poke" -- the implications of which are not clear to this day.

I only have a couple of friends from college who are not on Facebook. The rest are. And I went to a college without a computer science department.

Generally the way new technologies spread, according to Geoffrey Moore's Cross the Chasm, are by starting with early adopters and spreading to the early majority. The early adopters are visionaries and do things simply for the sake of trying a new technology (e.g. being at the leading edge of "social networking"). The early majority are pragmatists who try something when they're sure of it's value (e.g. seeing what your friends are up to). Crossing from one to the other is a huge and often fatal challenge.

LinkedIn took this challenge and started with the early adopter Silicon Valley scene. They started to invite their friends, VCs, lawyers, bankers, etc. until it eventually spread so that many professionals -- even here on the East Coast -- know what it is. Reid said on my show that he doesn't think it's hit its "tipping point", but I believe it's crossed the chasm.

Facebook's another story.

Their first few thousand users included most of the college kids at the original 13 schools allowed in. While college students are more computer literate than many, most of that audience could not be considered early adopters. I had friends on Facebook in those days who didn't know what a blog was.

Facebook didn't start with the traditional early adopters, or if they did they only started with a small subset of them and didn't stay there long.

Moreover, they didn't even allow in the typical Silicon Valley/TechCrunch 53,651 early adopters in until recently (unless they happened to be in college).

Now, after Facebook has launched its API and the tech world has taken notice in a big way of the business opportunity in Facebook, you're starting to see lots of typical early adopters -- tech entrepreneurs and VCs (e.g. Fred, Josh, Roger, Dave, Howard, Andy) -- experiment with Facebook.

What does it mean that the early adopters are giving their two cents only after the early majority (at least among 18-30 year olds) have already adopted?

Posted by Greg Galant on Jul 7, 2007 | Permalink | Comments (0) | TrackBack (0)

Teaser for Next Episode: iContact

I usually don't like to give hints about who's coming up on Venture Voice, but I can't resist breaking news: Ryan Allis -- who left college early to start his business iContact -- just raised a $5.35 million for his already profitable company. Stay tuned to hear the story.

Posted by Greg Galant on Jun 29, 2007 | Permalink | Comments (0) | TrackBack (0)


I was reminded of how immigration policy affects all parts of the economy while reading Fare is Fair, one of my favorite columns in The L Magazine that's a collection of quotes from those most in the know in NYC: the cabbies.

A number of our past guests on Venture Voice are immigrants. How does the immigration policy affect entrepreneurship in the US?

Posted by Greg Galant on Jun 25, 2007 | Permalink | Comments (0) | TrackBack (0)

Bad Influence

Bill Gates gave a very provocative Harvard Commencement speech. I was struck by this passage:

But I also want to be recognized as the guy who got Steve Ballmer to drop out of business school. I’m a bad influence.

While he said it jokingly, it's a great reminder that one of the entrepreneur's biggest jobs is team building and convincing others to take risks.

Posted by Greg Galant on Jun 12, 2007 | Permalink | Comments (0) | TrackBack (0)

(Un)fair Advantage

Anyone who's worked with venture capitalists knows that they have a language of their own -- and for the most part it's quite fun. Terms like "burn rate", "first-mover advantage", "monetization" and "defensibility" never get old. But I've noticed that many VCs I respect are using the term "unfair advantage" to simply describe an advantage. Jeremy Liew describes having the best news coverage as an "unfair advantage". Susan Wu calls having a community and leveraging network effects an (outdated) "unfair advantage".

Click to read more.

Posted by Greg Galant on May 8, 2007 | Permalink | Comments (3) | TrackBack (0)

Good Angry Customers and The Death of Sucks Sites

The social news site Digg (whose CEO is a past Venture Voice guest) recently had a user revolt after it gave in to the demand of a cease and desist letter and blocked a posting. The users voted stories up to the main page of Digg that criticized Digg. It was viewed as a big negative at the time, and journalists are still reveling in the site's supposed hardship with headlines like Digg Flap Exposes Cracks.

Click to read more.

Posted by Greg Galant on May 4, 2007 | Permalink | Comments (0) | TrackBack (0)

Worthwhile Reading

After mistaking me for an expert, people often ask me what I read. Sure, as you can tell from numerous past posts, I read all the sites you must read to keep up with the industry, including paidContent, Techcrunch and Techmeme (the founder of which, who I recently met, is both a fan of Venture Voice and an adept impersonator of my voice). I also read blogs from past Venture Voice guests, such as Fabrice's, Dick's and Jason's, which always offer interesting thoughts.

But if entrepreneurship is dependent on seeing the world in a different way from others, then we can't let the media we consume be defined by our industry or job title. I go out of my way to find writing that's bold, provocative, and unafraid of breaking social mores. Here are the sources that I won't start my mornings without:

Click to read more.

Posted by Greg Galant on Apr 29, 2007 | Permalink | Comments (2) | TrackBack (0)

Join the Venture Voice Team

How would you like to be the first person to hear the next episode of Venture Voice and even make a couple of bucks for listening? We're hiring listeners to write show notes for new episodes (just check out past shows for an example). Great writers will even get to take a shot are writing the intro paragraph. If you're interested, please contact us.

Posted by Greg Galant on Apr 22, 2007 | Permalink | Comments (1) | TrackBack (0)

West Coasting

As I mentioned in my last post, we do our best to cover how business gets done on both coasts, and everywhere else. I'm headed out to San Francisco for the first time in a few months for the Web 2.0 Expo. If you're out there too or you know of anyone we should be talking to, drop us a line.

Posted by Greg Galant on Apr 11, 2007 | Permalink | Comments (0) | TrackBack (0)

NYC Entrepreneur Panel

I had the pleasure of moderating a panel of excellent entrepreneurs for MBAs at NYU's Stern School of Business. The panel included Thrillist co-founder Adam Rich, Daily Candy's Eve Epstein, Sean Pfitzenmaier of stealth startup Social Sauce, Music Nation founder Daniel Klaus and Jonah Beretti who's a founder of The Huffington Post and BuzzFeed.

Click to read more.

Posted by Greg Galant on Apr 9, 2007 | Permalink | Comments (0) | TrackBack (0)

Run Your Startup in the 2008 Election

On the cover it would seem entrepreneurs and politicians have little in common. One creates value in the economy, the other, um, I'll refrain from any bashing of politicians. But both entrepreneurs and politicians have a lot to potentially gain in the drawn-out election season leading up to November 2008.

Click to read more.

Posted by Greg Galant on Mar 2, 2007 | Permalink | Comments (0) | TrackBack (0)

The Sincerest Form of Flattery

If imitation is the sincerest form of flattery, then we must have been dead on in our list of the Top Five Venture Capital Firm Web Pages. In a very bizarre case documented by Dan Primack of peHUB, Sequoia Capital is suing ComVentures for copyright infringement of its website:

Click to read more.

Posted by Greg Galant on Feb 26, 2007 | Permalink | Comments (0) | TrackBack (0)

Online Social Network Entrepreneurs Social Network Offline

Last Saturday, Venture Voice show producer Koshlan Mayer-Blackwell dropped in on the Community Next: The Present and Future of Online Communities conference held at Stanford University. Here are some of his musings on day:

Click to read more.

Posted by Greg Galant on Feb 14, 2007 | Permalink | Comments (1) | TrackBack (0)

Talking Back to Your iPod

Ever listen to Venture Voice and wish you could say something back to our guests? You can. Pop onto our site and leave a message in the comments -- most of the guests read them. Our most recent guest, Fred Seibert, just highlighted a provocative comment from a Venture Voice listener in his blog. One blogger mischaracterized some data Guy Kawasaki shared with us, and Guy corrected him in a comment on his blog.

If you feel text can't do justice to the passion in your comment, remember you can leave a message on our listener line, just dial (212) 461-4850 or skype "venturevoice".

If there are any other ideas out there to further enhance the Venture Voice community, let us know!

Posted by Greg Galant on Feb 14, 2007 | Permalink | Comments (0) | TrackBack (0)

David Sacks Launches Geni

Past Venture Voice guest David O. Sacks launched Geni today, as TechCrunch reports, which aims to be the ultimate family tree.

Many have tried in this area before, none have achieved dominance. I've tried about 5 of these types of services in the past (including one from Joe Kraus's Jot) and none have caught on with my family no matter how many e-mails I've sent out.

Geni's got one of the fastest registrations I've ever seen, so I couldn't resist pestering my family members yet again. As I've said before, never bet against a PayPal alum. Let's hope that, as Valleywag eloquently put it in reference to his Hollywood venture, David Sacks has another "disgustingly successful foray".

Posted by Greg Galant on Jan 16, 2007 | Permalink | Comments (5) | TrackBack (0)


Jazz has undergone the ultimate irony. Born in New Orleans, Jazz was once deplored by the music establishment and academia as modern day rap is now considered offensive by ears accustomed to Beethoven. It was the devil's music. Now it's hard to find an article about it in anything other than media outlets aimed at upscale audiences. The New York Times just printed an article titled Jazz Is Alive and Well. In the Classroom, Anyway.

Click to read more.

Posted by Greg Galant on Jan 7, 2007 | Permalink | Comments (0) | TrackBack (0)

Confusing Comfort with Happiness

I'm not sure that there's any correlation between entrepreneurship and fitness, but there seems to be a lot in common among people at the top of their game -- be them entrepreneurs or athletes. Outside magazine ran an interview with "ultrarunner" Dean Karnazes (thanks to Michael Hyatt for the link) in which he said:

Click to read more.

Posted by Greg Galant on Jan 5, 2007 | Permalink | Comments (2) | TrackBack (0)

Bah, Humbug!

Nothing like A Podcast Carol to change one's outlook on podcasting for 2007.

How are you keeping in touch with your clients before the new year? What does your vacation look like?

Happy Holidays!

Posted by Greg Galant on Dec 22, 2006 | Permalink | Comments (0) | TrackBack (0)

Taxing Entrepreneurship

The government pays a lot of lip service risk-taking, entrepreneurship and small business. In fact, many believe that it can be advantageous for tax purposes to be an entrepreneur (write-offs, SBA loans, hiring family members, etc.). In a fascinating blog post titled Should We Worry about the Rising Inequality in Income and Wealth?, Judge Richard Posner considers how a high marginal taxes effects entrepreneurs and other risk takers:

What are the causes, and what are the effects, of this trend in the income (and of course wealth) of the highest-earning segment of the distribution? Part of it is reduced marginal tax rates, because high marginal tax rates discourage risk-taking. Consider two individuals: one is a salaried worker with an annual income of $100,000 and good job security, and the other is an entrepreneur with a 10 percent chance of earning $1 million in a given year and a 90 percent chance of earning nothing that year. Their average annual incomes are the same, but a highly progressive tax will make the entrepreneur's expected after-tax income much lower than the salaried worker's.

Posted by Greg Galant on Dec 19, 2006 | Permalink | Comments (1) | TrackBack (0)

The Irony of You

Setting off a barrage of cutesy opening lines by bloggers, Time Magazine designated "You" as the person of the year. Bloggers responded with begrudging thanks, collective self-congratulations, lessons in semantics and more musings. Triumph! Citizen media has finally overtaken professional journalism in influence. However, what does it say that a silly magazine award (published by the "M.S.M." no less) can still set the blogosphere a flutter?

People have always placed too much authority in the "Man of the Year", I mean "Person of the Year", oh, "People of the Year" award. But the editors at Time did their job well: They cause controversy and got attention. After all, they're pros.

If this shift was really the most significant thing to happen in 2006, why not give the award to one of the entrepreneurs behind it? After all, all of the big players in this shift were startups, not new ventures by existing big companies. When a politician has a lot of influence, "you the voter" who put him or her in office doesn't get the award. Let's remember that entrepreneurs change the world, and that they made their mark on 2006.

Posted by Greg Galant on Dec 18, 2006 | Permalink | Comments (1) | TrackBack (0)


With so much change going on in media, it's hard to tell who's your friend or your enemy. Having a good strategy for dealing with others who could either be a great partner or a fierce competitor is crucial for many startups, as we saw with PayPal and Zingy. A few weeks ago at an event put on by The Week, I heard WPP chairman and CEO Sir Martin Sorrell use the perfect term to describe such a relation (in this case referring to Google): frenemy.

If Sun-tzu was right that you should keep your friends close and your enemies closer, then what should you do with frenemies? Smart entrepreneurs should at least start recognizing who their frenemies are. To give them a push, I just created an entry in Wikipedia for Frenemy.

It's my first Wikipedia entry, so please help clean it up and add your thoughts. Here it is as I originally wrote it:

Click to read more.

Posted by Greg Galant on Dec 6, 2006 | Permalink | Comments (1) | TrackBack (0)

Wharton: "Where Entrepreneurship Comes to Die"

We've covered the ongoing debate over "teaching" entrepreneurship. Now we have a report from the front lines.

Ravi Mishra, a University of Pennsylvania junior double majoring in engineering and business who still describes his location as "Silicon Valley, California", writes a blog post titled Where Entrepreneurship Comes to Die.

He tears apart his fellow b-schoolers' business ideas with an entertaining vengeance usually only seen in a venture capitalist (I wonder what he scored on the VCAT), which includes building the craigslist for college students (as if craigslist isn't the craigslist for college students) and a plan to bring the campus meal plan off campus.

Yet Ravi doesn't lay all the blame on his Ivy compatriots. He says of the class:

Click to read more.

Posted by Greg Galant on Dec 5, 2006 | Permalink | Comments (1) | TrackBack (0)

The VCAT (Venture Capital Aptitude Test)

Would be law students have their LSAT, medical schoolers have their MCAT, and MBAs have their GMAT. Why should aspiring venture capitalists be left out of the fun of proving their self worth in a quick test?

Past Venture Voice guest Guy Kawasaki announced in his blog today that he's developed the VCAT (Venture Capital Aptitude Test).

Anyone who's just dropped $100k and two years of their life on an MBA will be loathe to learn that their degree will cost them 5 points. And just when you thought you'd seen your last aptitude test!

On the other hand, Guy might be viewing freshly minted VC analysts with a glass-half-empty mentality. The wise anonymous blogger at Going Private points out that the VC gigs might save the world of more management consultants. She writes "For the small gift of just $175,000 per year and a reasonable carry, you can save an MBA from the horror of Booz Allen. That's less than $480.00 per day." Do your part today at Dan Primack's 4th Annual Internship Drive.

Posted by Greg Galant on Nov 29, 2006 | Permalink | Comments (0) | TrackBack (0)

Top Five Venture Capital Firm Web Pages

While VCs rightly demand that their portfolio companies have great marketing, they generally have awful marketing themselves. If you've ever been an entrepreneur in fund raising mode, you've read some line to this effect a million times on VC sites: "We partner with great entrepreneurs to build world-class companies." Just try Googling it.

Since I have yet to find the venture firm that openly aims to fund mediocre entrepreneurs to create miserable companies, I've always found this a case of stating the obvious. But, believe it or not, there are some cool VC sites worth checking out. Here's a list of the top five VC web pages. (Note: This does not rank the quality of the firms, just of their sites.)

Click to read more.

Posted by Greg Galant on Nov 12, 2006 | Permalink | Comments (0) | TrackBack (0)

Area Man Achieves Your Dream

As many guests have said on this show, there's little value in an idea that's not executed. The Onion illustrates this concept perfectly in a recent news brief:

Click to read more.

Posted by Greg Galant on Nov 8, 2006 | Permalink | Comments (0) | TrackBack (0)

How to be a Great Entrepreneur

How do you become a great entrepreneur? According to Fortune, the answer is practice, practice, practice.

The article specifically addresses how this relates to business:

Just one problem: How do you practice business? Many elements of business, in fact, are directly practicable. Presenting, negotiating, delivering evaluations, deciphering financial statements - you can practice them all.

The article does give some unattributed advice. There's a section called "Be the ball", which is advice famously given by Ty Webb in Caddyshack. It's hard to argue with advice on greatness from such a great movie.

Posted by Greg Galant on Oct 29, 2006 | Permalink | Comments (1) | TrackBack (0)

Success From Failure

You can't study entrepreneurship without studying failure. The New York Times recently offered an in depth account of Friendster's failure, but it's too early to see if anything good will come out of that failure aside from a classic case study.

The man with one of the best jobs in the world (making fun of cubicle life), Dilbert creator Scott Adams, writes in his blog that he's failed 9 out of 10 times in his own business ventures. However, he doesn't consider his early failures in vain: "I’m not complaining, since that’s the disgruntlement that led directly to Dilbert."

Posted by Greg Galant on Oct 22, 2006 | Permalink | Comments (1) | TrackBack (0)

The PayPal Alumni Club

Harvard, McKinsey and Goldman Sachs all have famous alumni clubs. There's an old joke that you hire the kid from Harvard because if he screws up, you can always say, "How was I suppose to know he was a dud? The kid went to Harvard."

If I were a venture capitalist, I'd fund the kid from PayPal in a heartbeat. The New York Times just published a great article titled It Pays to Have Pals in Silicon Valley, profiling PayPal alumni's adventures in entrepreneurship. These guys seem to be free of the baggage that hinders some second-time entrepreneurs.

We've interviewed PayPal's David O. Sacks and have recently recorded but not posted interviews with two other PayPal alums. Stay tuned.

Fun fact from the NYT article: "[Peter] Thiel tapped his network of friends from Stanford, many of whom had worked at the Stanford Review, a libertarian magazine that Mr. Thiel co-founded in 1987. They populated PayPal’s business ranks."

Posted by Greg Galant on Oct 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Wall Street Journal Analyzes Facebook's Coolness Factor

The Wall Street Journal's reporting that Facebook's in acquisition talks with Yahoo! This isn't the first time there's been such speculation.

The WSJ repeats a familiar line when describing Facebook in its subhead: "Youthful Audience Is Fickle." The article goes on to say "As the Internet has sped up the life cycle of success and failure, it is possible some of these sites will flame out as their young devotees flock to the next thing."

Click to read more.

Posted by Greg Galant on Sep 21, 2006 | Permalink | Comments (2) | TrackBack (0)

Venture Voice on the Podium

Margaret Atwood has been quoted as saying "wanting to meet a writer because you like their books is like wanting to meet a duck because you like pâté." If her advice applies to podcasters, and if you want to do something unwise, then I thought I might share my upcoming speaking schedule for the next month with you:

Posted by Greg Galant on Sep 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Monday Morning Quarterbacking ODEO and The Chinese Woman

In July 2005, Ev Williams broke the news on our show that he closed a round of venture capital for his podcasting business ODEO. This was a very different style of business building than he had with his first startup, Blogger, that was bootstrapped and understaffed. Recently in a speech that was summarized by GigaOM's Liz Gannes, Ev issues a mea culpa and "went through a tidy list of the top five Odeo screw-ups."

Click to read more.

Posted by Greg Galant on Sep 16, 2006 | Permalink | Comments (0) | TrackBack (0)

The Other Side of the Mic

One of the most frequent compliments we get about Venture Voice is that we let the guests speak for most of the time by asking concise and focused questions. So in essence I’m being patted on the back for shutting up. Some would take that as a blessing, but because I do enjoy talking it’s nice to have a pulpit now and then. Eric Schwartzman provided me that opportunity by interviewing me for On the Record... Online.

Posted by Greg Galant on Sep 6, 2006 | Permalink | Comments (0) | TrackBack (0)

Startup Sold on eBay for $258,100 (or: eBay turns iBanker)

A web-based calendar startup called Kiko put all of its assets up on eBay a little over a week ago as its founder explained on his blog. As far as I know, this is the first time a technology company has essentially sold itself on eBay for a six-figure amount. Seems like a fitting way to exit for a totally web-based company. Putting Kiko on the auction block caused a lot of buzz: Techcrunch placed Kiko in the deadpool (they seem to have taken a page from Pud), GigaOM called the space "crowded" and our most recent podcast guest Jason Calacanis reminded us revenues (rev-a-whats?) still matters for a business.

One of the most interesting parts of this transaction is that eBay -- along with all the publicity generated about the auction -- essentially acted as the investment banker for this deal, not that any self-respecting i-banker would touch a deal this small with a 10 foot poll. According to eBay's fee schedule, eBay netted a cool $3,891.86 on this deal. After larger percentage fee on the first $1,000, eBay charges 1.5% of the closing price. You can only get that kind of low rate with pro i-bankers at the $100 million mark according to past guest Fabrice Grinda's blog post. Can selling companies on eBay scale and create a more efficient market for startups, or is this a one off success caused by a high profile failure?

Posted by Greg Galant on Aug 26, 2006 | Permalink | Comments (3) | TrackBack (0)

After Labor Day

If there are three words an entrepreneur dreads hearing in the summer, perhaps it's "after Labor Day". People such as venture capitalists and customers who take things called vacations (what's that?) often say this to entrepreneurs trying to schedule meetings. In the startup world, a few weeks is a long time. On the other hand, maybe this is a sort of forced semi-vacation for entrepreneurs.

Posted by Greg Galant on Aug 22, 2006 | Permalink | Comments (0) | TrackBack (0)

Lemonade Stand: School of Hard Knocks For Young Entrepreneurs

While there's no standard education to become an entrepreneur, almost every entrepreneur gets an early education in the lemonade business. The kids may be cute, but that doesn't mean they're not cut throat. In fact, Inc. Magazine just announced the Best Lemonade Stand in America Contest Winner.

Click to read more.

Posted by Greg Galant on Aug 15, 2006 | Permalink | Comments (1) | TrackBack (0)

Entreprendre: What Entrepreneurs Do

Jeff Cornwall, a professor of entrepreneurship, reminds us that "entrepreneur" is just a noun. A farmer can farm, but we can't simply say we're off to go entrepreneur.

Click to read more.

Posted by Greg Galant on Jul 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Green Entrepreneur

Green can mean a lot of things to an entrepreneur. You can have a "green thumb" which means any business you're involved in will grow and make money. You can be "be green" as in inexperienced. To a new crop of entrepreneurs, however, being green means creating a business that benefits the environment.

Click to read more.

Posted by Greg Galant on Jul 8, 2006 | Permalink | Comments (1) | TrackBack (0)

Extreme Poverty Should Be Scared (Or The Hungriest Foundation Executive Ever)

"How can I top this?" was perhaps the only big question left on Bill Gates's mind after his tremendous success with Microsoft. Venture capitalist Bart Schachter wrote in a hilarious PE Week Wire column that his colleagues should thank God (or Gates for that matter) that Bill did not decide to become a VC as many successful entrepreneurs do.

Click to read more.

Posted by Greg Galant on Jul 3, 2006 | Permalink | Comments (1) | TrackBack (0)

Startup Workshop Success

The first ever Venture Voice Startup Workshop was a huge success. We've already received unprompted thank you notes from half of the attendees. Thanks to the speakers and attendees for making it so meaningful -- Entrepreneurship is a hard thing to communicate without getting a lot of fluff, but there is no fluff at our Workshop. Apologies to anyone we haven’t responded to yet, I’m already in Seattle for Gnomedex. We’ll post a podcast of the Workshop soon, but in the meantime you can view the photos on Flickr.

Posted by Greg Galant on Jun 29, 2006 | Permalink | Comments (0) | TrackBack (0)


Past guest, venture capitalist and former entrepreneur Brad Feld observes in his blog that "I’ve noticed a pattern in many of the VC and entrepreneur blogs I read – very few people ever talk about failure."

Click to read more.

Posted by Greg Galant on Jun 23, 2006 | Permalink | Comments (2) | TrackBack (0)

Added Startup Workshop Speaker: David S. Rose of the New York Angels

We've added David S. Rose, the founder and chairman of the New York Angels, to the Venture Voice Startup Workshop speakers roster. He joins Dick Costolo of FeedBurner, Scott Heiferman of, David Hornik of August Capital, Jeanne Sullivan of StarVest Partners and Tom Szaky of TerraCycle.

We've got all angles of the entrepreneurial process covered now, from entrepreneurs to angels to venture capitalists. The speakers have great diversity of backgrounds, geography, age and industry. They'll be a lot of great insights to share.

Posted by Greg Galant on Jun 20, 2006 | Permalink | Comments (0) | TrackBack (0)

Startup Workshop in One Week

There's only one more week before the Venture Voice Startup Workshop. We've arranged it so there will be lots of breakout sessions to let you interact with the speakers about issues facing your startup. Be sure to register before it's too late.

Posted by Greg Galant on Jun 19, 2006 | Permalink | Comments (0) | TrackBack (0)

Netscape Got Start Up, Needs Catch Up Too

AOL's relaunching Netscape by using the format of the popular startup Digg, which allows users to decide what news is noteworthy though a voting system. According to a New York Times article, this effort to build the new Netscape was run like a startup by recently acquired entrepreneur Jason Calacanis who founded Weblogs, Inc. Perhaps for the first time in years, Netscape is startup-like again.

Click to read more.

Posted by Greg Galant on Jun 15, 2006 | Permalink | Comments (0) | TrackBack (0)

The Difference Between a Small Business and a Small Business Mentality

Advertising Age, a publication not known for being aimed at small businesses, published an article titled Why Small Marketers Need to Reach for the Stars.

While we're reminded all large businesses start small, the point of the article is that there are no special rules of small business that small businesses need to follow. In other words, think big. And what better examples than Bill Gates and Michael Dell?

Click to read more.

Posted by Greg Galant on Jun 12, 2006 | Permalink | Comments (1) | TrackBack (0)

Venture Voice Startup Workshop

We've extended the registration discount on the Venture Voice Startup Workshop. It's a unique opportunity to interact with top entrepreneurs in an intimate setting on June 26. Speakers include Dick Costolo of FeedBurner, Scott Heiferman of, David Hornik of August Capital, Jeanne Sullivan of StarVest Partners and Tom Szaky of TerraCycle.

All participants get to fill out a survey when they sign up about what they're looking to get out of the Workshop. The sooner you sign up, the more influence you'll have on the agenda. Look forward to seeing you there!

Posted by Greg Galant on Jun 6, 2006 | Permalink | Comments (0) | TrackBack (0)

Startup Geography: New York vs. Everywhere Else

Paul Graham asks "Could you reproduce Silicon Valley elsewhere, or is there something unique about it?" in an essay titled How To Be Silicon Valley. It's a very insightful analysis of what's essential to a startup economy. He concludes that people matter most and the geographical challenge is to attract the people -- which is not an insurmountable challenge.

Click to read more.

Posted by Greg Galant on May 30, 2006 | Permalink | Comments (0) | TrackBack (0)

Meetup Fee

Newsweek just posted an interview with Meetup founder and CEO Scott Heiferman titled See You Offline.

When we interviewed Scott exactly 11 months ago tomorrow, he had just started charging a fee to use Meetup. At the end of the interview I told Scott I'd be attending the Podcaster Meetup the next day. Scott said "maybe I'll pop in" and he did. Podcasters like to talk so much that Scott never got to identify who he was. Scott sat there listening intently as a couple people complained about the Meetup fees without knowing the Meetup CEO was in the room. Talk about direct customer feedback.

Despite any past gripes, the Podcaster Meetup is still going strong and the last meeting was one of the largest yet. Newsweek asked Scott about his revenue transition:

LEVY: A year ago you changed from free service to one that charged your Meetup groups a fee. What was the impact?
HEIFERMAN: We almost instantly lost half our activity when we started the fee. That was pretty damn painful. Most of last year we sort of crawled up, but this year we've just exploded. Now there are more people than ever RSVP'ing for meetups. Also, after each meeting we religiously poll members and ask them to rate it on a scale from 1 to 5. Before there was a fee, the average rating was 3.8. After the fee, the average rating is a 4.2.

The difficulty of creating fee based services seems to be a common issue with many of the entrepreneurs we interview. We'll be sure to find out more when Scott speaks at the Venture Voice Startup Workshop.

Posted by Greg Galant on May 21, 2006 | Permalink | Comments (0) | TrackBack (0)

Not-So-Well-Balanced Entrepreneur

One of the common themes we notice in the people we interview is that they don't lead very well-balanced lives. We recently received an e-mail from a past guest saying "I am working 100+ hours a week again." Unfortunately this symptom isn't alien to us either. So we were excited to read Inc Magazine's proposed solution: hiring a life coach.

Think spending $400 to $1,200 per month on a coach (the amount Inc cites from the International Coach Federation) would decrease or increase your stress?

It's an interesting topic. We're going to try to find a well-balanced entrepreneur (if such a thing exists) to interview, and hear how it's done.

Posted by Greg Galant on May 17, 2006 | Permalink | Comments (5) | TrackBack (0)

How to Build a Business on Amazon's Back

I never thought of Amazon as a friend of entrepreneurs. Several years ago I remember a friend of mine who self-published an entrepreneurial handbook for teens telling me that authors had to give up too many rights to list a book themselves on Amazon. They do have the Associates program that lets website operators make money by linking to Amazon products (which I use, more for tracking than for income), but that's old news and doesn't generate serious money for many anymore. Amazon enables entrepreneurs to sell over Amazon, but eBay clearly dominates that enterprise. Slashdot even posted an entry titled Google's Love For Small Businesses that points to a Cringely article, but both don't even mention Amazon.

If you look closely at Amazon's portfolio of services, you'll see they now produce some extremely disruptive tools that they've opened up to any entrepreneur with the vision to use them. Here's your Amazon arsenal:

Click to read more.

Posted by Greg Galant on May 14, 2006 | Permalink | Comments (3) | TrackBack (0)


BusinessWeek ran an article asking if we're in a bubble, again. It starts by citing Flickr co-founder Caterina Fake's post It's a bad time to start a company, which we weren't alone in writing about. The articles quotes some Venture Voice alumni who weigh in.

Click to read more.

Posted by Greg Galant on May 13, 2006 | Permalink | Comments (1) | TrackBack (0)

Asking the Hard Questions

I really enjoy hearing from listeners. The best comments are the ones that challenge us and make us think about how we run the show. Andrew Cheung recently sent one in using our nifty contact form and selected the "You may quote me on this" option, so I'm going to share his comment and respond to it here.

Click to read more.

Posted by Greg Galant on May 10, 2006 | Permalink | Comments (0) | TrackBack (0)


For some reason we just can't help covering the blog search wars. Our first run in with the fledgeling industry was our interview with Scott Rafer, the then-CEO of the then-rocking Feedster. A couple months after that he left the company along with one of its co-founders, Scott Johnson. We interviewed Scott J. about his new company Ookles, but also got to hear his analysis of what happened in his battle for blog search domination: “Dave’s wicked smart.” Referring to Dave Sifry, the CEO of Technorati, who we just interviewed. Keep in mind Dave's also faced competition already from Google Blog Search and Mark Cuban's IceRocket.

Click to read more.

Posted by Greg Galant on May 2, 2006 | Permalink | Comments (0) | TrackBack (0)

Going to School on Entrepreneurship

Fortune Magazine's Patricia B. Gray wrote an article, Business Class, asking the age old question: Can you teach entrepreneurship?

I've been asked that question ad nauseum since I've led an entrepreneur workshop aimed at high school and college students for the past five summers.

Click to read more.

Posted by Greg Galant on Apr 24, 2006 | Permalink | Comments (2) | TrackBack (0)

Camp Entrepreneur

Forget dodgeball, entrepreneurship is now the thing to do in camp according to BusinessWeek.

Within a two-week period recently, I had the opportunity to speak at class day to a group of 4th graders and to two MBA classes at one of the top three U.S. business schools. I asked the 4th graders if they knew what an entrepreneur was. None of them did. They all liked the concept when I told them, but I truly won them over when I showed off my iPod. Unfortunately I was then upstaged by the two prison guards who presented after me who had their guns and nightsticks as props.

Click to read more.

Posted by Greg Galant on Apr 20, 2006 | Permalink | Comments (3) | TrackBack (1)

Skippin' the Ladder

The Wall Street Journal just ran an article by Emily Meehan titled Young Entrepreneurs Aim To Skip Corporate Ladder. It cites a woman who launched a business venture about ten years ago that didn't succeed.

Ms. Baker was so absorbed in building her business that she lost track of many friends. "It was a very lonely time because nobody my age was really going through that."

While Jenny Baker's experience sounds quite painful overall, that feeling of loneliness seems to stick out in her mind. Rightfully so. Even as more young people start businesses, they'll still be overshadowed by the army of recent grads going into corporate training programs and law school.

I wonder if it would be just slightly different today, now that so many young entrepreneurs from all over the world are blogging, social networking on-line and appearing on podcasts. Perhaps we're forming a virtual Club of Terror.

Posted by Greg Galant on Apr 19, 2006 | Permalink | Comments (1) | TrackBack (0)

Entrepreneurial Terror

When I read Steve Hindy’s excellent book Beer School in preparation for my interview with him about how he started the Brooklyn Brewery, one small section jumped out at me. Steve remembered his experience reading an editorial in 1987 by Wilson Harrell, the then publisher of Inc. magazine, titled “Entrepreneurial Terror.” Though Steve and I discussed this on the show, I think this topic deserves more exploration.

Here’s an excerpt of Steve’s summary in his book of Wilson’s article:

Click to read more.

Posted by Greg Galant on Apr 18, 2006 | Permalink | Comments (1) | TrackBack (0)

Moderating at the Perfect Venture Conference

I just moderated a panel on "How to Build a Winning Management Team" at the Perfect Venture Conference that included Adam Farber of IDT Ventures, Don Rose of Global Media Fund, Elizabeth Sigety of Delaware Crossing Investor Group, Jeanne Sullivan of StarVest Partners (by total coincidence, I had interviewed her business partner Deborah Farrington last September) and Jack Bloom of Apex Capital Corporation.

It was a great panel because each panelist had very different resumes. It was also an unusual venture panel because 2 of the 5 panelists were women. SiliconBeat just ran a post titled Old Boy Network? Forget it. Try the Old Girl Network that led us to a Red Herring article titled The Risk Mistress that cites the National Venture Capital Association statistic that women account for 10% of US venture capitalists. We beat the national average by 30%.

There were a couple disagreements, but I made the panelists duke it out which made for a fun time -- and the panel ultimately got to some interesting conclusions:

One entrepreneur in the audience made the interesting suggestion to use a "cliff" when hiring people. That means they only get to keep the equity they're awarded if they stay involved with the company for a certain amount of time.

There was a bit of debate between the panel and the audience when I asked how long a startup should wait before firing a new hire who doesn't seem to be preforming. One of the panelist said to give a new hire at least a month to settle in and 2 to 3 months to show performance. And audience member retorted that he fired someone after just a couple of weeks of bad performance, and regrets not making the fire sooner.

We've got many new interesting entrepreneurial topics to explore.

Posted by Greg Galant on Apr 6, 2006 | Permalink | Comments (2) | TrackBack (0)

Exclusive: Fabrice Grinda Launches OLX, Says Users Will Challenge eBay and Craigslist

Fabrice Grinda
Judging by the user comments, Fabrice Grinda has been one of our most popular guests. We interviewed him last December on his last day at work at Zingy, the ringtone company he founded, sold for $80 million, then grew to $130 million in sales. Before Zingy, he started the leading auction sites in Europe and Latin America.

We can now break the news of his most ambitious venture yet: An ad-supported auction site to compete with Craigslist and eBay. It's called OLX, and it's already live. We grabbed him for a text interview to give us an update.

Click to read more.

Posted by Greg Galant on Apr 5, 2006 | Permalink | Comments (5) | TrackBack (0)

10% Scott

We just posted our 30th show! Aaron mentioned Scott to me and I had to ask which one. We've interviewed 3 Scotts so far: Scott Heiferman, Scott Rafer and Scott Johnson.

Are Scotts disproportionally entrepreneurial?

If they are, it's not because of good luck. Scott Johnson, who we just posted an interview with, reports that Venture Voice has been trumped by tornado concerns around his home in Indiana.

Although we might not be hitting the mark on diversity of first names, if our guests are dealing with tornadoes it at least shows we've got some geographical diversity.

Posted by Greg Galant on Apr 3, 2006 | Permalink | Comments (1) | TrackBack (0)

Market Shrinkage

Venture capitalist Josh Kopelman gives some excellent examples from his career of disruptive entrepreneurial businesses in his blog. He cites his investment in Jingle Networks, the company that runs 1-800-FREE411. We covered Jingle's launch at DEMOfall. Americans spend $8 billion on 411 calls. Jingle simply makes it free and ad-supported. If successful, Americans will spend a lot less on 411 calls but Jingle will prosper at the exponential expense of the phone companies.

Posted by Greg Galant on Apr 2, 2006 | Permalink | Comments (0) | TrackBack (0)

Altruistic Disruption

The New York Times just published a story called Death by Smiley Face: When Rivals Disdain Profit. It describes what we recently referred to as disruptive businesses -- a company that can grow while shrinking margins in its industry. In other words, a disruptive business can expand by making one dollar for every several dollars it takes from its antiquated competitors. Except The Times attributes the motive behind this business model to be altruistic, while we naively thought it was just a great entrepreneurial opportunity.

Their primary example is Craig Newmark, the founder of Craigslist. It's hard not to agree with The Times on this one. Craig probably has not made as much money as he could have with Craigslist without hurting user experience to the point that it would decrease traffic. If there was a one line AdWords-style ad in there, would you stop using it? This seems to be a good example.

It also cites FireFox as an example. FireFox is definitely not profit-driven as it's managed by the not-for-profit Mozilla Foundation. This is a pretty good example, but it only gets a couple lines in the article. It's also not strictly a disruptive business. Microsoft gives out Internet Explorer for free in part to drive traffic by default to its media properties. FireFox gets money from Google to drive users to its search site. Seems to be more of just an alternative.

However, Craigslist and FireFox are the only examples The Times cites that stands up to scrutiny for their altruism behind disruption theory. Their other two examples (which command most of the article) are:

I'm not making the Gekkoian greed is good argument. I'm not even saying that these entrepreneurs are enamoured with Ayn Rand. I'm just saying that disruption and integrity often make for good business in the long run, and to ascribe any other motive is the challenge of the author.

Now let's try to figure out the motives of some of the disruptive entrepreneurs we've had on the show:

Ascribing motives to the actions of others (or even to your own actions) is very tricky business. I hesitated to even analyze the motives of my guests before writing this post, but I figured if The Times can do it then so can we. However, if disruption does not require altruism, then this dubious analysis might not be necessary.

Posted by Greg Galant on Apr 1, 2006 | Permalink | Comments (1) | TrackBack (0)

April Fools? managing editor Allen Wastler tells us that April Fools' Day can be a dreadful time for anyone trying to cover the news. I'm starting to know how he feels.

Here are three news items I wonder about:

Don't write off all of these stories though. Steve Jobs and Steve Wozniak filed their partnership papers on April Fools' Day in 1976. Imagine if we'd written them off with just a snarky post.

Posted by Greg Galant on Apr 1, 2006 | Permalink | Comments (0) | TrackBack (0)

Invisible and Disruptive Entrepreneurs

While the popular mentality has shifted over the past couple of decades to recognise if not admire entrepreneurs, economic theory has largely ignored them according to The Economist's article Searching for the invisible man. And who would know better than The Economist?

Many people bicker over the definition of entrepreneurship, but the literal translation The Economist cites is quite satisfying.

Translated literally, entrepreneur means one who undertakes—one of life's doers. To start a firm you need gumption, and to succeed you need an eye for a gap in the market. That in turn demands alertness, as Israel Kirzner, of New York University (NYU), has pointed out. But it does not always demand much originality or power of invention. The fresh-born firm may be a mere clone of another one in a neighbouring town.

Replace the word town with country, and that last sentence is pretty close to Fabrice Grinda's international idea arbitrage concept.

The article focuses on the distinction in innovation between incremental improvements (making a slightly better version of what's already out there) and "discontinuous breakthroughs" (they cite the incandescent lamp, alternating electric current or the jet engine as examples). Through seemingly only large corporations would have resources and R&D budgets to make breakthrough innovations, the article points out that most come from entrepreneurs.

Why? The article gives two reasons:

The first explanation seems paradoxical. Breakthroughs are, by definition, more difficult than routine innovations. Surely, they should be beyond the meagre means of the independent entrepreneur? But as Mr Baumol points out, building the Kitty Hawk was much cheaper, and less complicated, than upgrading the Boeing 737 to the 747. Genuinely new ideas are often breathtakingly simple. They grow more elaborate as improvements and modifications are laid on top of them. If you are the first to discover a tree, you get to pick the lowest-hanging fruit.

The second explanation is more intuitive. Revolution is a risky endeavour. Of 1,091 Canadian inventions surveyed in 2003 by Thomas Astebro, of the University of Toronto, only 75 reached the market. Six of these earned returns above 1,400%, but 45 lost money. A rational manager will balk at such odds. But the entrepreneur answers to his own dreams and demons. Mr Baumol thinks a “touch of madness” is probably one of the chief qualifications for the job.

The first reason, that simplicity defies established companies, would surely be appreciated by Jason Fried. The second reason, that entrepreneurs are irrational, seems like a fine explanation too as evidenced by the many guests we've had on this show who've shunned high-paying and stable career options in favor of startups (of course, their irrationality is up for debate after they succeed).

I think the article missed one reason: That many breakthrough innovations are disruptive. A disruptive business can grow by making one dollar for every five it takes from its antiquated competitors. Craigslist only makes tiny amount of money (if any) on users who would otherwise spend a lot of money with a newspaper. The same relationship exists between TerraCycle and Miracle-Gro, and John Bogle's index funds and traditional high-expense ratio mutual funds. Disruptive innovations are on the side of the angels, better for consumers and will ultimately defeat their fat targets.

Why would a profitable corporation want to make a disruptive breakthrough? And if they did make such a discovery, fear would likely keep them from bringing it to market. In fact, Xerox PARC made many breakthroughs such as the mouse and advanced graphical user interfaces. It didn't have an incentive to cannibalize its dominant paper copy business, so it didn't put much effort into spreading those innovations. Steve Jobs had nothing to lose from building products on those innovations (except for the long-term health of one of his investors, Xerox, but that didn't matter to him), and ultimately computers progressed to the point that fewer paper copies were needed.

Similarly, I imagine that newspapers would not have developed Craigslist had they thought of it first (even if such a site was inevitable), Miracle-Gro would not brew TerraCycle had they thought of it and high-expense ratio mutual funds would not have organized the first index fund.

Entrepreneurs don't only have an edge because they're crazier and can come up with simpler solutions. Established players are made great because of large profit margins and don't want even their own disruptive breakthroughs to eliminate those margins. That's the entrepreneur's job.

Posted by Greg Galant on Mar 27, 2006 | Permalink | Comments (0) | TrackBack (1)

Venture Voice to Newsweek in Under Two Months

While many of the entrepreneurs we've interviewed on this show have already made it big, we go to conferences like DEMO to scout out the up-and-comers. At the last DEMO conference, we followed Sharpcast through the process of unveiling their technology to the world. Now, not even two months later, Sharpcast has been featured as part of a Newsweek cover story on the "Next Web". That was fast.

Posted by Greg Galant on Mar 26, 2006 | Permalink | Comments (0) | TrackBack (0)

Having Too Much Fun in the Valley?

David Heinemeier Hansson of 37signals, whose co-founder Jason Fried has been a guest on our show, counters a post by Caterina Fake, who started Flickr with her husband and sold it to Yahoo!, titled It's a bad time to start a company. (Disclaimer: I'm a happy paid user of both of their products.)

Caterina's central focus is that while entrepreneurship is in vogue as it is now, competition increases for talent, space and venture capital. This both drives up costs to start a business and increases the likelihood of competition. Ironically, while times are good, battle-hardened entrepreneurs noticed some advantages of the good old days of a bad economy. Some of our past guests including Fabrice Grinda, Joel Spolsky, Philip Kaplan and Shoba Purushothaman had a blast building businesses in what is normally referred to as an awful environment for entrepreneurs. Venture capitalist Deborah Farrington did quite well by making investments during the dot com bust, including an investment in soon-to-IPO NetSuite. Don't get me wrong, these entrepreneurs did have to bang their heads against the wall and shed a lot of blood, sweat and tears to survive, but the bad economy separated the real entrepreneurs from the faint of heart.

While it's fun to argue over timing, it's the factor that us entrepreneurs have the least control over. What we do have control over is geography, which underlies Caterina's sixth and final point in her thesis:

There's too much going on. Every night there's a Mashup get together, or a TechCrunch party, or it's Tag Tuesday, or SuperHappyDevHouse or SXSW or this conference or that conference. And this stuff is fun. It's a real community. But all of these things are great by themselves, but terrible in combination. I see some entrepreneurs in photos from *every single event*. Who's talking to the users, writing the code, tweaking and retweaking the UI? It ain't the Chief Party Officer.

Of course, these parties aren't going on in Vancouver, where Caterina started her company. It's mostly happening in Silicon Valley, where for better or worse a geek can party like it's 1999 every night. Tech entrepreneurs from other parts of the country can only enjoy the parties vicariously through Flickr photos and blogs. Here in New York we're starting to have some fun as documented in a recent article in the Fashion & Style section of The New York Times. But even so, when I meet people at most parties and tell them I'm in the podcast business, I usually have to follow up with an explanation of what podcasting is and often resort to just telling people I run a radio show they can get through the Internet. And I'd never even think of saying tagging is cool at the average New York media event for fear of people thinking I still pay the children's game of tag.

For all its advantages, is Silicon Valley too distracting from the serious business of building a business? Does it cloud an entrepreneur's judgement about what consumers need?

David argues against the Silicon Valley area that Caterina is now based in:

You don't need to live in San Francisco to make it big. Or rather, if you want to make it big, don't live in San Francisco...

Is the San Francisco Web 2.0 party too much fun? This reminds me of something Scott Rafer said on the show:

Silicon Valley and San Francisco, I hesitate to call those of us out here running companies entrepreneurs, [it's too easy to get the infrastructure].

The Valley offers entrepreneurs unparalleled resources, infrastructure and support but threatens to distract from focusing on customers and sales. The rest of the world offers focus and the school of hard knocks precisely by offering few resources meant specifically for tech entrepreneurs.

Where is the best place to open a business? Let's find out by watching what businesses thrive in the long run.

Posted by Greg Galant on Mar 25, 2006 | Permalink | Comments (2) | TrackBack (0)

Tracking Venture Voice Alumni

Soon after stating this blog, I realized I had no consistent and reliable way to track the latest news about our past guests. What have I gotten myself into? Only a few of them have PR people who send me press releases regularly -- and press releases are usually pretty boring reads.

So I've decided to try using the tools built by past guests to track them. I first went into Feedster (which used to be CEOed by VV interviewee Scott Rafer) and entered in this short little search phrase: "Dick Costolo" or "Philip Kaplan" or "Joe Kraus" or "Scott Heiferman" or "Kelly Perdew" or "Jeremy Hague" or "Brad Feld" or "Scott Rafer" or "Deborah Farrington" or VideoEgg or "Tom Szaky" or "Jason Fried" or "Mena Trott" or "Derek Sivers" or "Joel Spolsky" or "Fabrice Grinda" or "Randy Komisar" or "Bo Peabody" or "John Bogle" or "Shoba Purushothaman" to get these search results. I then ran that RSS feed of the search results through FeedBurner (CEO Dick Costolo was our first guest) so it would be a bit more manageable and came up with this feed (if anyone subscribes to it I'll update it with the names of people we interview in the future).

Just for fun, you can view some of the real-time headlines about our past guests here:
Venture Voice Guest Tracking

The results are overwhelming. There are hundreds of entries a day! When I did this search the first time it was dominated by references to a post titled Kate Moss is Not an Accredited Investor in response to Brad Feld's post Are You Accredited?. While Brad recommends against taking money from unaccredited investors, the thought of never having Kate Moss as an angel gives some pause for thought.

This could be a lot of work.

I tried giving Google News (no, I haven't interviewed Larry and Sergey... yet) a shot and the results were pretty good. On average it has about one news item per day. However, it only searches traditional news sources which often miss the most interesting stories about entrepreneurs.

Looks like I'll have to do some work to get the real story here, but these searches should be a good start. In the end, there may be no finer method to get the scoop than working the telephone.

Posted by Greg Galant on Mar 25, 2006 | Permalink | Comments (0) | TrackBack (0)

Media Devolution or: How I Learned to Stop Worrying and Love the Blog

We’ve come a long way since we first started this podcast nine months ago.

When I used to go to tech conferences and tell people I had just launched a podcast, the response was usually something along the lines of “Podcast, very cool. How long have you been blogging?”

After hearing I’d never had a blog and still don’t (unless you count the text portion of our podcast a blog, which I don’t unless it will get us more press), I’d usually get a strange stare. “No blog, are you really Web 2.0? Isn’t a blog a prerequisite for a podcast anyhow?”

I didn’t care though. In my mind podcasting was always a cooler – or at least richer – form of media than a blog anyhow.

So why would we stoop to launching a blog on Venture Voice? Simply because entrepreneurs are doing too many cool things! We want to tell you about them pronto.

Past guests have had some major accomplishments since they’ve appeared on our show. We’ve also noticed a lot of trends in the startup economy that we’d like to point out quickly to our audience. However, we adhere to a very strict format and only release podcast shows when we’ve got an in-depth interview or a story to share.

I also like to write.

So now we’ve got a blog component to keep you up-to-date on all things entrepreneurship, particularly as they relate to what’s been said on our podcast. As always, we’ll do our best to keep our opinions to ourselves in favor of illuminating the world of new ventures and provoking discussion.

A couple of housekeeping matters: We’ve relegated the blog to a separate portion of our website, but we’re combining the RSS feed. You can now find all of the events we’re involved with or attending on our new events page. We’ve also added a navigation bar that makes it easy to browse our podcast library, read what the press has to say about us or contact us.

Enjoy the blog.

Posted by Greg Galant on Mar 22, 2006 | Permalink | Comments (0) | TrackBack (0)