Unicorpse and The Moral Hazard of Making Unicorns
I’m sure that many more thoughtful than me has written about the moral hazard of venture capital. In economics, moral hazard occurs when one person takes an unreasonable risk because someone else will bear the burden of the negative consequences. In the age of unicorns, the moral hazard in venture capital has never been greater. Moral hazard […]
We Sell the Ultimate Commodity – Money
Last month I participated in a panel discussion at Denver University organized by Maclyn (Mac) Clouse. Mac is a long-time educator and supporter Denver’s entrepreneurial community. I was joined by Peter Adams, Executive Director of the Rockies Venture Club. Mac’s setup for the discussion was “dangerous” because he offered both Peter and I the opportunity […]
Improv at the Office: Yes, and…
When I get really busy, I communicate less effectively. Truth is, I don’t listen as well, I get short in my responses and I cut off conversation prematurely, because I’m so focused on getting onto the next thing. I’m not proud of it, but it happens. The First Rule of Improv When I was in […]
Finding harmony between advice and self-interest
I just wrapped one of those calls where I had the opportunity to give advice to an entrepreneur that runs counter to my short-term interests. In this case, it is a story of a first-time entrepreneur who has built a $7 million revenue business and is wrestling with the decision whether to take growth capital […]
What is an entrepreneur to do when restrictive covenants become restrictive
Restrictive covenants are standard features of venture capital, growth equity and private equity transactions although each investor type has its own standards. Restrictive covenants are the actions a company cannot take without investor approval. A short list of typical restrictive covenants includes: A sale of a Company or sale of a majority of the Company’s […]
What Entrepreneurs Can Learn From Peyton Manning
I’m not a huge football fan. But I do marvel at the drama of professional football. In particular, I admire what Peyton Manning has done for the Broncos the past two years. His individual contributions are well documented. But what I’ve been most impressed by is the positive impact he seems to have had on the […]
The fallacy of averages
A discussion with a portfolio company CFO reminded me that statistics are a dangerous thing and averages are misleading. “There are three types of lies — lies, damn lies, and statistics.” Most businesses analyze their performance using overly simplistic tools. For an extreme example, imagine a scenario where the average customer produces monthly recurring revenue […]
You missed your numbers. Now what?
By now, you should know where you stand relative to your 2013 budget. Hopefully, you made it or beat it. For some, the finally tally will show a “miss to the downside”. When i say miss, I’m referring to performance against the original budget – the one you put together in December 2012. Performance against […]
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 […]
Implementing Enterprise 2.0 at Intuit, Part Five: Operational Impact and Lessons Learned
This is part five (and the final part) in a multi-part series on how Intuit is implementing Enterprise 2.0 within their organization. Part one covered the business drivers of Enterprise 2.0, part two looked at some of the change management issues of Enterprise 2.0, part three explored cultural and organization shifts, part 4 talked about […]
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. […]
Implementing Enterprise 2.0 at Océ Part Five: Lessons Learned and Future Plans
This is part five (and the final part) in a multi-part series on how Océ is implementing Enterprise 2.0 within their organization. Part one covered the Business Drivers of Enterprise 2.0, part two covered Making the Push for Enterprise 2.0 , part three covered Change Management for Enterprise 2.0, part four covered the Operational […]
What is this “Momentum” of Which You Speak?
A meeting with an entrepreneur last Friday reminded me of the most frustrating and overused feedback entrepreneurs receive from VCs: Talk to me when you have “momentum”; or I need to see some “traction” first. With more and more VCs looking to make later stage investments, entrepreneurs are receiving this feedback more than ever. You can […]
Managing your Board; Give ‘em a job!
In a post last week, I addressed the notion that everyone needs someone to report to. After all, you can’t report to yourself. The reporting relationship between a CEO and a Board is critical for a Company’s success. That relationship must be based on trust, candor, and transparency. While that hierarchical reporting relationship is necessary and […]
The math of SaaS revenue growth
A conversation with the CEO of a SaaS company today reminded me of the importance of the rule of 78s. What is this “rule”, you ask. If you run a recurring revenue business, it is the most important number you have never heard of. Back to my conversation with the CEO. We were talking about the […]
