Derek Pilling
Working with Friends
Last week I wrote about the value of repeat relationships in the venture capital and private equity business. I used the example of a portfolio company that recently raised capital from a firm we have worked with on a repeat-basis. I intentionally left out the investor’s name as well as the companies knowing that this [...]
One Surefire Way to Screw up Your Lifestyle Business
Some businesses are designed – maybe even destined – to be owner operated. Industry parlance often refers to these businesses as lifestyle businesses. Wikipedia has a nice definition. They are typically small, profitable, generate cash and enable their owner-operator to sustain a well-above average lifestyle. In some circumstances, they may even make their owner-operator filthy [...]
An Entrepreneur’s Growth Equity Conundrum: Should I sell stock or sell growth?
Two times in the past year, I’ve been close to making an investment in two separate micro-cap growth equity opportunities only to have the opportunity go sideways deep into the process. The two businesses share a lot in common; they are similar in size, profitability, and growth prospects. Both are capital-intensive; the first being asset [...]
Soccer, Fail Whales and APIs
I played a good bit of soccer as a kid and even more in college. I mostly played defensive positions. One of the things I most appreciate about the game is that the smallest of errors can have game-changing impact. As a defensive player, an errant pass in the mid-field or a moment out of [...]
Why I’m Contrary on Compensation
When I was a teenager, I spent two summers working in a furniture manufacturing factory. The company, Steelcase, was (and still is) one of the largest office furniture manufacturers in the world. I worked in the binder-bin plant – a binder-bin is the cabinet that mounts on the back of your desk at about eye-level. [...]
Platforms: Of Governance and Taxes
I like analogies. This week, Brad Burnham of Union Square Ventures wrote a thoughtful post based on an analogy between software powered platforms and governments. Bob Warfield of the SmoothSpan Blog did a follow-up post claiming that application developers should seek platforms that act like Switzerland; something Warfield has apparently been saying since 2007. The [...]
Twitter is No Longer a Platform
Twitter no longer deserves the label “platform”. There, I said it. Its recent decision to lock out third-party ad networks, combined with its clear move in to the edge application space fundamentally alter what Twitter is. It is no longer a platform for application developers to productize around core stream functionality and monetize the edge [...]
The “Leo the Late Bloomer” of Business Models
My kids love the book “Leo the Late Bloomer”. As the story goes, Leo was a tiger cub who hadn’t quite hit his stride yet. Leo couldn’t do anything right. He couldn’t read. He couldn’t write. He was a sloppy eater… Leo’s father, playing the classic fatherly role, was very concerned. He couldn’t figure out what was wrong with [...]
When Platforms Collide; Mobile and Payments
A few weeks ago, I wrote a post that covered my areas of investment interest for 2010. Three of the areas I find most interesting are the mobile ecosystem and the payments sector and the theme of “platform” business models. You can find that post here. The natural question I’ve since been asked is: “What [...]
You set the price; I’ll set the terms
Bill Daniels, a cable tycoon, was a consummate deal maker. I never had the honor of meeting Bill, but his reputation in the industry has stood the test of time as have some quotes that have been attributed to him. My Partners, some of whom had the great pleasure of knowing and doing business with Bill, are [...]
The most important app on your phone
The last couple of days have seen a flurry of activity in mobile. Apple announced its response to Google’s acquisition of AdMob by acquiring mobile ad network, Quattro. Google announced the much awaited Google phone, the Nexus One. The bulk of the discussion has been around the mobile application battle between Apple and Google. Henry Blodgett thinks [...]
Areas I’m most likely to invest in during 2010
I have always been fairly thematic in my investment approach. For me, the process starts with identifying big markets that are either 1) emerging (and will therefore be created over the next several years) or 2) undergoing some structural shift that will enable new entrants to grab market share from incumbents. I have seen Companies succeed in [...]
Affirmations for a VC in 2010
For me, the end of a year and beginning of a new one is an opportunity to step back and reaffirm core beliefs. The list of affirmations (really reaffirmations, because I have believed what is written below for some time but never committed the thoughts to writing) are what you might consider guiding, daily operating principles. Because these beliefs may [...]
What we have here is a failure to plan
Well, it’s that time of year; the end of the year that is. Time for holiday cheer, budgets and for a rare few, strategic planning. I say for a few because I’m frequently surprised at how little I hear from the VC community and VC-backed CEOs about strategic planning. When I do hear about planning, it is [...]
Why cash is such a tough competitor; last cash markets
I’ve been spending a bunch of time recently thinking about last cash markets – markets that are still dominated by cash payment – and how electronic payment can penetrate these markets. Some of these markets (vending, taxis, paid parking) are huge (measured in billions). The lack of connectivity with the point of acceptance is a huge issue for [...]
