Altgate

Live Long & Prosper: Spock.com

First let me confess that I got the title idea from my good friend Ed Zier when he sent me an email asking whether or not I too had been getting deluged with emails from Spock.com.  And then I realized that for the past couple of weeks I have, in fact, been receiving a bunch (as in two or three per day) of emails from these folks.

From what I understand, this company is in the category of "people search" which includes competitors like Wink.com, Whozat.com and I suppose companies like ZoomInfo and LinkedIN.  Unlike Google, where if you type in someone's name then you get a stream of results often in the tens of thousands, results of people search sites are only people (or at least that's the idea).  There are a number of companies that do people search in the physical world (like Intelius which I've heard is a $100 million-ish revenue business) but these firms are primarily about background checks and finding your physical address or phone number.  The new crop of online people search firms are more about finding your online presence (Facebook, LinkedIN, Wikipedia, etc.).

To give a quick example, here is screen shot of a Google search for "venture capital boston."  Note how the results page includes a map and a list of links to venture capital organizations as well as firms. 

Now, if we look at the same results from Spock, the results are a list of venture capitalists in Boston and instead of a map, I get pictures of people.  Pretty cool.

So as for Spock, is it worth it?  Well, I have to say that the user interface is nicely designed and the search results are fairly good.  Not only am I able to find people with unique names (like me) but it also does a pretty good job of finding people with common names by filtering.  For example, if I know that the person I'm looking for is in New York or that they work in venture capital, I can add those search terms.  The results are definitely better than a simple Google search.  So with that, my sense is that Spock really ought to be a tab on existing search engines (i.e. add "people" to the existing list of images, news, videos, etc.).  In the meantime, I plan to use Spock and other people search engines when I'm looking for someone.

Startup Seeks CFO In DC Metro Area

As a follow up to a recent post on Mobile Posse, I wanted to mention that the company is currently recruiting for a CFO.  This is a new position just created after closing on a $10 million round of venture capital.  Details of the job description are here, however the quick summary is that they are looking for a seasoned startup veteran (i.e. previous experience as CFO of a venture backed company, ideally with a happy exit).  I can attest that this is a great company with a strong team and prospects and they are the clear leader in mobile idle screen advertising...heck, I'd apply myself if the company were in Boston!  If you or someone you know are interested, feel free to contact me or the company directly as indicated in the job description.

'Tis The Season To Change The CEO

December is the month when (venture backed startup) boards tally up performance for the year and compare it to the plan (er...fantasy) you gave them back in December of last year.  If the actual is some small percentage of the promised and this is the second or more time this has happened, then the board is seriously trying to figure out what to do.  And odds are that replacing the CEO is at the top of the list.

Why is that?

Well, from the board's perspective (particularly the VCs on the board), what else can they do?  There are basically only two remedies that startup boards have to any particular problem: (1) invest more money or (2) replace the CEO.  That's it.  The first time the company misses plan, they are implicitly agreeing to invest more money.  The second time they often decide to do both.

So what can you do if you're facing this scenario? Well, in my view you have four options (pardon the war analogy):

1. Cower in your foxhole.  This is the do nothing strategy...basically you are biding your time waiting to get shot.  Most often when I have seen this happen is when the CEO is unaware of what is going on.  It could be he/she is working 20 hours per day trying to make the numbers or it could be they just don't understand the board's responsibility.  In either case, inaction is a decision to put your fate in someone else's hands.  In this case you probably get a pity-payment and a neutral future reference.  My only advice in this case is to not be surprised.
2. Jump on the grenade.  Similar to what you imagine, this is the scenario where the CEO proactively goes to one or more board members with a message of, "I've lost my footing and here's what I think we should do."  And that suggestion is to replace the CEO and probably transition himself or herself into another role within the management team or to do an orderly transition out of the company.  Depending upon the personalities involved and how much water has gone under the bridge, this is usually one of the best outcomes: the company avoids trauma, the management team remains motivated and everyone has hope of strong future financial returns.  And despite the title, sometimes the CEO lives to fight another day.  Overall, you'll end up with a positive reference for future fundraising.
3. Banzai charge.  In this scenario you basically go nuts, charge the lines and hope to take out a few of the "enemy" in the process of getting killed yourself.  I've seen this go down when there is too much water under the bridge...basically the board and the CEO have drawn two lines in the sand and they have burned all their bridges.  Usually lawsuits (or threats thereof) fly back and forth.  The bummer about this scenario is that it is the worst on the company and the team.  As CEO, you might get some greenmail out of it, but you damage the company and you end up getting a crap reference (i.e. it's hard to raise money again).
4. Recruit new troops and organize a counter attack.  I have seen this work, although it is very difficult to pull off.  Basically, you need to hire some strong, seasoned second-level managers (C-level folks) and put together a plan that is ultra convincing.  Another angle is to pull off some super-big deal (investment, partnership, sales, etc.) that gives hope of achieving next year's plan.  Done well, you keep your seat, the company thrives and everyone makes money.  I make this sound easy, but in reality you have to break some eggs and bully your way into this because the "easy path," particularly for VC-stacked boards, is to pull the rip cord.

Anyway, that's the scoop.  Good luck!

Sales Is A Science, Not An Art

A lot of folks will try to convince you otherwise, but don't believe it.  Seth Levine has a good blog post on this topic.  It's sort of in the vein of my post asking why there isn't a degree offered in sales and sales management at leading universities.  I asked about this on LinkedIN's Q&A forum a while back and elicited some very interesting responses.  Bottom line, I have to believe, like most things, there is an 80/20 rule here where the bulk of great sales is a "science" and the rest is magic applied by really talented, charismatic sales people / managers.

Mobile Posse Launches Idle Screen Advertising

I have recently spent a lot of time with this company (in conjunction with Softbank leading an investment).   It's really an amazing company with promising technology and a talented team.   

While there are many companies offering mobile advertising, almost all of them are inserting advertising in WAP sites or providing ads via SMS.  A few companies are attempting to insert ads in mobile video or other applications like games, but Mobile Posse has the lead in terms of offering mobile advertising on the idle screen.

What is idle screen advertising? The best way I can describe it is to think of PointCast, that company from back in the mid-1990's that put content and ads in a computer screen saver...but for mobile.  Basically when the phone is not in use, the Mobile Posse application launches a little notice that disappears if you start using the phone or after a few seconds.  If, on the other hand, you click to view more information, you get more details.  I've included a screen shot where you'll see a notice and details on weather.  And that's part of the beauty of Mobile Posse's application is that they combine content like weather, news, sports scores, horoscope, etc. along with promotions.

Idle screen advertising makes a lot of sense because most phones in the US have small screens and no standard keyboard making WAP surfing cumbersome.  Same goes for video, games and other applications.  By putting an application on the idle screen it is more accessible.  Of course, the key is to get the right blend of content and relevant promotions that users value. 

 

What To Include In A Board Package

In response to my post on board management tips, I got a few questions on what to include in a board package.  So here's my take.  Obviously some of the materials will be unique to your particular situation, for example if you're negotiating venture debt, you might include term sheets to review, but there are some basics that you should provide to the board at every meeting and these include:

• Board presentation deck (PowerPoint).  These run anywhere from 15 to 50 pages in length and are typically broken up into sections that have one of two goals: (1) updates or (2) decisions.  More on format and content of board decks later.
• Financials (Excel or PDF). Send the most recent month's results.  If you were able to schedule your board meetings for the second or third week of the month, that should be enough time to close out the previous month and include those figures. Ideally you want to include an income statement, balance sheet and cash flow statement. You should also include actual performance versus budget.
• Cap table (Excel or PDF). While this doesn't change that dramatically on a monthly basis, you will be well served to include an up to date copy in each package.  Be sure to include new options approved in previous board meetings as well as option cancellations from ex-employees.
• Board minutes (Word). Somebody should be responsible for taking minutes in the board meeting. These are not very lengthy minutes, but more formalities (who attended, when it started, topics discussed, etc.). You will want to circulate the draft minutes from the previous board meeting with the package and then during the meeting call a board vote to approve the minutes. In terms of who takes the minutes, it's typically either the CFO or corporate counsel.  Most attorneys will join the meeting by conference call and prepare the minutes without charging, or at least without charging much.  I'm a fan of using your attorney for this as it keeps your records organized (hopefully your CFO has something better to do!).
• Summary (Word). I confess I have never done this, but I have seen other CEOs do it and plan to do this in the future. The summary is basically a 1-3 page prose document which gives your 360 view of the business, e.g. how it’s performing relative to plan, any big strategic issues, etc.

Provided they are accurate and timely, a board package that includes these 5 things will be very well received by your fellow board members.

Founder / CEO Succession

Professor Noam Wasserman has a nice piece on founder / CEO succession in HBS's Working Knowledge.  To summarize he talks about the heads-you-win-tails-I-lose phenomenon that founders face as they grow their business, i.e. if they fail they get replaced and if they succeed they also often get replaced.  I think what Noam is observing is actually the case, but in the "success" scenario, I don't think that success is causal with replacement.  More likely it is some new aspect of the larger, more successful business that other board members perceive the founder as not being able to manage (e.g. more of a focus on sales management than new product development).  Either way, the lesson is clear to founders: success in a startup doesn't guarantee you get to keep your job.