Porch the Paper

I used to have a paper route when I was in 6th grade.  I would deliver the daily paper for San Jose Mercury on my route on the Cupertino/Saratoga border. I actually kept it for a few years and handed it over to another kid in the neighborhood when I got to high school. These don’t seem to exist any more as kids’ jobs, in fact I haven’t seen a kid on a bike delivering a paper in years. Like 20 years. Adults now do it from their cars, cover a bunch of different routes, and make a decent wage. But I digress. I loved it. You’d be up early in the morning before the rest of the people had woken up…say around 5 am. I’d ride my bike to the corner of Saratoga-Sunnyvale Road and Prospect where the papers were dropped off at Jake’s Pizza. I’d sit there on the cold ground and fold each paper, put in any inserts, and even put them each in their own “Weather or not, we deliver” bags to keep the paper dry if it was raining.  By 5:30 or so, I’d be on my first cycle, meaning I’d have packed the pouch thing that hung over my neck and held about 20 papers in the front and 20 in the back.  On a normal day I could do my entire route in just two shifts meaning I’d only have to come back to Jake’s to reload once and then I’d be done.  Usually I’d be back at home before 7am and be ready to go to school.  The biggest pain though was Sundays.  Instead of 20 on each side of the pouch, you’d only be able to fit six or maybe eight per side because they were so huge.  The pouch was heavy, you’d have to keep going back to Jake’s to reload and you’d finally be done after a few hours of this.

The good news was you’d make real money.  As a 12 year old, making $150 per month was great cash and the experience was actually really fun.  I loved cycling by homes with their lights off and seeing a rare person getting up at 5:30 or so to get to work.  It was peaceful, quiet, and you felt super independent.  I always felt older than my age when I was working hard, earning money, and doing something that seemed totally crazy.

One of the things that I learned though, was that anybody can do virtually any job.  There were paperboys before me and paperboys after me.  Everybody got the papers to the houses usually on time.  But the guy who trained me told me to “porch” every paper.  He said that the tips were better and that he’d been doing it for years so now the customers expected it.  What this meant though, was that you had to stop your bike at every house, get off, walk up to the house, and place the paper on the porch of the customer.  It slowed you down…a lot.  Others would just peddle by on their bikes, reach into their bags, and toss the paper on the house’s driveway as they sped off.  As I was porching every paper, I wondered if it was worth it, etc., but then I had my first round of collecting and I understood the power of taking the extra step to provide excellent service.  The act of “collecting” for a paperboy involved going around at night to the houses on your route and knocking on the door to try to get the subscriber to pay for their month’s worth of service.  Nobody paid in advance, nobody paid by credit card.  You literally had to track down 80 different subscribers every month and get them to give you $10 or write you a check.  It was a pain (but fun…a lot of times when folks paid cash we’d go straight to Jakes for pizza and Asteroids).

The point of this rambling post though, is that I realized the value of providing great service when I’d collect and talk to the customers.  They were so appreciative of having the paper on the porch every morning.  They raved about it.  They tipped me a ton, and they trusted me and cut me some slack if I ever needed it.

As I look at products being sold today, I look for the equivalent of “porching” the product.  You know it when you see it.  You are using a product, go to some small part of the product, and see that it was super well thought out and created to delight you.  I remember when I first used the calculator on the first iPhone.  I accidentally turned it sideways and it turned into a scientific calculator.  I was amazed.  Obviously the calculator wasn’t a key part of the core “phone” service, but when I saw that I knew they put a ton of love and care into every part of the product.  They “porched” it.  I’d advise this to any startup or product company…go the extra step and amaze your users.  I’m also not a believer of the Minimum Viable Product philosophy as I think you miss your best chance to amaze a user…that being their first impression…either that or my definition of “Minimum” is a lot more than bare bones.  Either way, porch the paper and make everybody happy.

Cal vs. Stanford for VC Money

GigaOm had a good story today highlighting CB Insights’ University Entrepreneur Report that tracked how much money was invested into startups from various different universities.  In a nutshell, Standford, Harvard, Berkeley, NYU, Penn and MIT did the best (in that order).  The thing that struck me, and has bothered me for a while (as a true blue UC Berkeley alum for both undergrad and law school) is that Stanford is miles ahead of Berkeley in getting companies started and funded by VCs.  I was actually surprised that UC Berkeley got nearly 25% of the venture funding for companies between the two school from 2007-2011 ($1.3B vs. $4.1B)…I would have thought it was even less than that. When you think about it…where did the most disruptive companies in the Valley come from?  Google, Yahoo, Sun, Cisco, eBay, HP…they all came out of Stanford.  What is the single largest, most amazing, earth changing company to come out of Berkeley?  You could argue Apple, since the Woz went there, but it wasn’t started at Berkeley.  But for Yahoo? Gerry Yang and David Filo were grad students while at Stanford when they started it.  Google? Sergey Brin and Larry Page were grad students at Stanford when they started it.  Cisco…same story.  Sun, same story.   It goes on and on.

Its not that the Stanford students are much smarter, as both schools boast top 5 engineering, business and law schools.  Its not that the location is much different as they’re less than a 40 mile drive from one to another.  So what is the difference?  Most importantly, I think its the easy access to venture capital funding as well as a culture that encourages entrepreneurship.  Do a search in Google Maps for “Venture Capital, Berkeley, CA” and you get two actual venture firms (Roda Group and Navitas Capital).  Do a similar search for “Venture Capital, Stanford, CA” and you get 104 results.  Although not scientific, its a good indicator.  A few years ago, I did some research and also looked at the top VC firms and how many of the General Partners of those firms (the guys who make the investment decisions) got their MBAs at Stanford vs. Cal.  I found 196 GPs went to Stanford and only 19 went to Cal for their MBAs.  This was a few years ago, and it does look like UCB is closing the gap by the fact they actually were in 3rd place on the list in the CB Insights’ report, and UC Berkeley has a great guy, Andre Marquis, who is heading up the Lester Center for Entrepreneurship & Innovation…but the local VC community is still lacking.

So for the VCs in the valley who complain how “frothy” the startup market is these days, and how crazy valuations have become, its partly because you are all looking at the same deals.  Next time, take a drive 40 miles to the East Bay, and take a look a the growing UC Berkeley startup community.  Opportunities are aplenty over there.

Moving to San Francisco

The San Francisco Giants and Firespotter Labs (my incubator) have a really tight history.  I officially started Firespotter on Nov. 1, 2010…the day the Giants won their first World Series in 56 years.  As a long suffering Giants fan who still feels the pain of losing the 2002 World Series to the Angels (after being up 5-0 in Game 6 with a 3-2 series lead no less!), this was a great omen for Firespotter.  Now that the Giants have won again, we’re officially moving our offices to downtown San Francisco and will be open for business just in time to go to the parade down Market Street on Wednesday.  Another great omen for Firespotter.

Its always amazed me how important location is for a startup.  Granted, I’m biased as I was born in San Jose, grew up in Cupertino, went to school at Berkeley, and mostly stayed in the Bay Area my entire life…but location is important for a startup…very important.  We started Firespotter Labs out of my garage in Danville, CA and then out of Google Ventures’ Start Up Lab once we outgrew my garage.  When we went for our own place, I chose Pleasanton, CA because its (1) close to my house, and more importantly (2) is an easy place for people from both San Jose and San Francisco to get to as its a reverse commute for both and there’s a BART station there.

That said, I came to realize that being more centrally located to all the action is the important.  Important to be able to go have meetings with partners or vendors without burning the entire day driving around the bay area…and for recruiting; young talented engineers and designers are in San Francisco.  That’s ground zero (see the map of SF startups from Ian Chan’s blog for more proof…and its only getting more and more crowded).  Even more so than Palo Alto and the traditional “Valley”…San Francisco has become the place to be in the tech scene out here, and its easy to see why.  Great restaurants, lots of people, lots of activities, interesting bars, great sports teams (new Warriors arena coming soon), etc.  If you were moving to the Bay Area to start your career in the tech world, honestly, would you choose living in Mt. View over San Francisco?  Maybe if you were married with kids, but mostly likely you aren’t and the City is the place to be.

I meet entrepreneurs a lot, and from all over.  There are great entrepreneurs and great companies all over the place, but I do always feel bad for the guys trying to get something started in a real out of the way location.  When there aren’t a ton of VCs around, talent, partners, etc., its just that much harder to get noticed, funded and growing.  And I felt a little isolated just 30 minutes from the Valley…I can only imagine what it feels like starting a company in another state.

So we’re moving.  We found a great spot in downtown SF that will be harder for me to get to, but better for most of  the rest of the team and certainly better for the company overall.  And for any entrepreneurs who are starting something great, I highly suggest getting out here as soon as possible…you saw what it did for Zuckerberg and Facebook, and they were already in a great spot in Boston!  Who knows, maybe you’ll be here in time for the next Giant’s ticker tape parade.

Starting to Blog

Ok, its been ages and I’ve never published my own personal blog.  I’ve kept one for a while, but only as a notes for myself to remember hectic or exciting times.  Either I have the courage to do it now or don’t worry too much about things anymore, but either way I’m going to take a shot at doing this pretty frequently.  I think I have a pretty unique perspective from growing up in Cupertino and staying here most of my life working in tech. Sorry about this first post being long, but it will hopefully provide some context for future perspectives.  I kind of hate it when people blog or spout off about topics and then you realize they have 3 months of experience in the field.

I’ve been lucky enough to wear a lot of hats in the Silicon Valley and have seen virtually every side of a business transaction.  I started as a corporate and securities attorney representing clients out the Palo Alto office of Brobeck, Phleger & Harrison, which in its day was the best (or tied with WSGR as the best) firm in the Valley.  I was able to know venture deals, M&A transactions, IPOs and start up activities inside and out by working as an associate for years with a great group of attorneys who not only showed me the ropes but had a lot of fun while doing it.  I represented startups, VCs, bankers, acquirors, targets, etc.  It was an awesome time in the Valley (1994-1998) and being in the eye of the storm helped me see things from every different parties’ perspective.

I then left to join Telesoft Partners as a VC.  I had nearly zero investment experience, but knew deals well.  Thankfully Arjun Gupta had a great nose for deals and the firm did great in those days.  But it wasn’t always easy…when I started the fund was only half raised, and it was getting licensed as an SBIC (amazing program where the government would invest $2 for every $1 you raised, took similar risk to all other LPs, but limited their return to some modest percentage…all the returns above that limit were then shared with all the other LPs and GPs).  Amazing structure that provide huge windfalls for the investors in Telesoft I.

After seeing deals from the VC side, I took an operating role at one of our investments, Dialpad Communications, when it looked like the company was completely dead.  It was fall of 2001 and the “internet bubble” had officially burst.  Dialpad was losing $3M – $4M per month and there were no prospects for more cash (the $65M they raised in their first 18 months was long gone).  I joined as CEO to try to turn it around and I got to see life from an operator’s perspective…in the most dire circumstances possible.  It was totally painful and a non-stop ulcer as you’re trying to continue providing service to your users while your vendors are threatening to turn off the power, telephony, internet, etc. every day.  We were able to structure a deal that got us through a Ch. 11 bankruptcy and we slowly rebuilt the business up until the point we got acquired by Yahoo! in 2005 (by which time we were actually profitable).

From there I left to start GrandCentral Communications, which was a much smoother ride and we started in early 2006 and got acquired by Google in July 2007.  In fact, GrandCentral was an example of what happens when everything goes right at a startup.  We had an idea, had great investors who shared the vision (Ron Palmeri and Halsey Minor were looking at the space independently and we were happy to find them), built a great team from scratch (finding a CTO from MIT with a PhD from CalTech who wrote software for the original payphones and had VoIP experience as well as traditional telco experience…how lucky is that?), launched a full blown amazing product in 9 months, had great users/following/PR, and got acquired 9 months after launch by the most dynamic company to ever grace the earth in Google.  I think it was a karmic payback for the years struggling to keep Dialpad alive.

Once within Google, I was able to see the world from another perspective (again)…that of a big company with resources to acquire other companies and partners who were lining up to work with you.  We did great deals with Bandwidth.com and Sprint to name a few, and acquired Michael Robertson’s Gizmo5 to get our PC-phone business in gear.  I also got to see the inner workings of a multi-billion dollar deal being considered (we passed on Skype a few times), and what it takes to launch a new product in a massive company (Google Voice, you’ll always be my favorite!).  But all good things must come to an end and after 3 years of being inside of Google I new I had to do another start-up before I got too old.

The journey then took me to Google Ventures (as their first EIR), Firespotter Labs (my current company and incubator backed by Google Ventures and Andreessen Horowitz), building mobile apps and services (Nosh, NoshList, Jotly) and finally back to telephony…ÜberConference.  We launched UberConference at TechCrunch Disrupt in NYC in May 2012 and won the coveted Disrupt Cup (we had to pass it off to the next winner, but made this cool video).

I like Fred Wilson’s blog, AVC.com, as he talks about VC issues day in and day out with a lot of honesty and candor.  Hopefully I can do the same from a variety of viewpoints, but probably most as an entrepreneur.  Huge inspiration has come from watching Mike Arrington at Uncrunched (loved the theme you used so much I borrowed it) and TechCrunch, Om Malik at GigaOm, and Andy Abramsom at VoIPWatch.

I’ll assume nobody is reading this, which is great as it gives me the freedom to ramble (as seen by this first nearly 1000 word post!).  I promise to be more concise in the future.

- Craig