Some Recommended Reading for Investors

There’s a lot of advice out there for new (and experienced) investors, and it can be hard to sift through it all to find the best stuff. So when I find something particularly helpful, I like to pass it along.

Paige Craig, a founder and managing partner of Arena Ventures, has some excellent blog posts in which he shares his own experiences in a really honest and transparent way. His stories and advice have some incredibly useful insights for both investors and entrepreneurs.

Paige is also an experienced angel investor who has invested in over 110 startups, including AngelList, Twitter, Wish and Zenpayroll.

These two posts from Paige are both fantastic. Thanks, Paige!

Airbnb, My $1 Billion Lesson

The 4 Ways Investors Find Great Startups

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The negative space of your words

We see quite a few pitches at Techstars. And we also therefore are involved in many Q&A sessions afterwards.  In one recent session, I noticed lots of what I call “negative space” so I wanted to jot down some thoughts.

When answering questions, especially in a group or public setting, you can show mastery by answering questions quickly and succinctly. Anticipate the normal questions and practice your answers. Make sure they’re short and clear answers.

Also, train yourself to avoid phrases like “To be honest,” or “That is a great question.”

Both of these create negative space.

If you start your response with “To be honest,” it gives the impression that you’re not usually honest, but in this case, you decided to tell the truth.

“That’s a great question” seems innocuous enough, but it implies that the other questions were not as good. (And if you say it after every question, it loses its significance.)

A few seconds of silence never hurt anyone. When someone asks a question, if you have to pause to think about your response, that’s fine. Pause. Think for a few seconds. Then give a thoughtful answer. You don’t need to create negative space while you stall. Thinking is allowed!

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I’m loving Soundwall

It’s art. It’s a speaker. It’s a conversation piece.

With Soundwall you can stream music to an interactive flat-panel speaker that also happens to be a beautiful piece of artwork.

It’s really cool to have art that surprises people, and everyone always wants to talk about it. The sound is incredible thanks to Distributed Mode Loading technology, and you can choose from a wide variety of artwork, or even create your own custom design.

Soundwall is being used in places like hotels, event spaces and hospitals. In addition to the Nova, which is aluminum artwork, they have now introduced a new, smaller product called Solstice, made from a canvas-quality magnetic material. With Solstice you can also get additional prints to switch up the artwork whenever you want.

Solstice pricing starts at $499, but right now they’re offering an introductory special price of $399 as they launch the new product.

Check out for more info and to see how cool this new product is.

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Remember factoring out from math class, where you had to simplify an equation by finding the common factors?

Startups often start out as a fairly simple equation. But over time, as your organization grows, it becomes more complex. As you scale, your business model gets complex. It creeps in naturally.

You know what’s complex in your business. As you scale, focus on simplifying those things.

Once in a while, you have to stop and factor out. Take the equation of your business and figure out how you can simplify it.  Complexity can be a killer.

Where can you factor out complexity as you scale? One example is in your contracts. Try to keep them as standard as possible. You’ll have more leverage as you scale than you had when you did your first few agreements. By standardizing, you’ll remove complexity that someone has to remember, track, report, and comply with that is different from every other deal you’ve done. Or maybe your chart of accounts in your accounting system has gotten too complicated. By combining things where you can, you get a simplified view of the performance of your business. And take a look at your org chart. Do you have lots of “dotted lines” and managers with one person working for them? These are signs that your org might be getting too complex.

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.”
Hans Hofmann

I love the “start, stop, continue” exercise. Make a list of all the things you’re doing, and then get in a room with your team and decide what you want to stop doing and what you want to continue doing. What you stop doing might lead to opportunities to start doing some meaningful new things, or at least to continue doing some things with a renewed focus.

Go kill one complicated thing your business is doing. I bet you’ll get addicted.


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The Business Blockchain: the future of authenticity and trust on the web

I recently read The Business Blockchain by William Mougayar, which provides a really strong description of the practical applications of this important new technology. This goes way beyond bitcoin. William anticipates a future with thousands, possibly millions, of blockchains that will enable frictionless value exchange and disrupt traditional business models.

He defines blockchains as “new technology layers that rewire the internet and threaten to sidestep older legacy constructs and centrally served businesses.” A blockchain injects trust into the network.

A couple years ago, William and I wrote an article about the trust web, in which we explained how the transfer of authority and trust to a decentralized network enables the continual recording of transactions on a public “block,” creating a unique “chain” known as the blockchain.

The Business Blockchain further explains what the blockchain is and how it works, and goes into depth about the blockchain’s multiple layers. He also includes practical examples of how to implement the blockchain within specific industries.

According to William, we shouldn’t be asking what problems the blockchain solves. Instead we should be focusing on new opportunities. It’s hard to even imagine the possibilities that will develop as traditional business models are disrupted and a new level of trust and transparency is enabled.

If you’re at all into authenticity and trust on the web, this book is a must read.

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How Microsoft, Uber, Twitter, and Google came to Boulder

A thriving startup community provides a boost to the greater community in lots of ways. It encourages innovation and investment, attracts creative, entrepreneurial people, and generates a certain energy– making the entire city a more desirable place to live.

Additionally, when local startups are acquired by big companies, and those companies hire more people in the area, the result is more jobs, which boosts the local economy in a lot of new ways.

A great example of how big companies get here is Sketchup, a startup that my partner Mark Solon invested in back when it was a tiny company. Google acquired Sketchup in 2006 (yep, I was blogging about Colorado startups way back then), and we’ve had the footprint of Google’s presence in Boulder ever since then. Bolstered by the addition of around 1,500 jobs in Boulder, over the years that acquisition has significantly contributed to Boulder’s growth and housing boom.

Similarly, in 2011 Federated Media purchased Lijit (now Sovrn), leading to an increase in hiring at the Boulder office. And in 2014, Boulder startup Gnip was acquired by Twitter, leading to their large office here. By the way, even as I write this Twitter has 10 job openings in Boulder right now.

Microsoft brought an office to Boulder when it bought the startup Vexcel. Later, Uber opened up a Boulder office when it acquired some of the Bing assets and Microsoft continued to operate here.

There are plenty of other examples in Boulder alone. By my count, about 2,000 high paying, high tech, “big company” jobs in Boulder can be traced back to startups from the last decade. Not to mention the many thousands more jobs that are enabled by the current generation of startups today.

This is how an active startup community impacts the broader community, well beyond just the startup community itself. It impacts all aspects of the area, including real estate, retail and housing in major ways. Next time you find yourself wondering if startups really matter to a community, take a look at Boulder and ask yourself why Google and Twitter employ so many people here. Startups are responsible for most net new jobs in America. As big companies continue to cut back, we can continue to look to startups to create our future.

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