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    - Venture Capitalist @ GGV Capital
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Great Day for a Great Cause

Thank you to all who participated and donated in our 3rd Annual Stag Day at Ruby Hill benefitting the First Tee Tri Valley – we raised $6K for a great cause!

Steve Wozniak: “Keep the Internet Free”

Steve Wozniak – cofounder of Apple and one of the guys who pioneered much of what we know today in consumer tech – wrote an open letter to the FCC which appeared in The Atlantic today.  It’s really worth reading.  His main point – keep the Internet open.  Seems like a cause we should all be rallying around (sorry friends in the telco industry).

Though not nearly as eloquent or entertaining as Wozniak, I posted on this topic on my VeriSign blog in October of 2007 (calling it the “hottest Internet topic of 2008”) and again in February of 2008.  My guess is it will still be a hot topic in another three years…

PE Hub Article: Replacing a Management Team Spells Trouble

Mark Boslet put up a nice post today on PEHub with commentary from a panel I was on this week at the AlwaysOn Venture Summit in Half Moon Bay.  The main thrust of his post reflects comments I made during the panel about two core tenets of GGV’s investing model:

1) The CEO.  We strongly believe in backing great CEO’s.  By the time a company gets to growth stage financing (usually a second or third round of venture funding), we expect to see not only a good/great CEO, but also a strong management team around him/her.  This may not sound too different from the way other venture firms approach their investments, but the primary point here is we are highly unlikely to fund a deal if we don’t see a strong CEO in place.  In short, if you’re a CEO raising money from GGV, we no doubt love the company/team/market, but the majority of our bet is on YOU.

2) The Relationship.  We tend to have known the companies and the teams we are investing in for an average of 9 months prior to our investment (and as Mark points out, in the case of Internet music leader Pandora, 4 years).  Getting to know entrepreneurs and CEO’s early in the company’s lifecycle enables us to watch them in action, become highly knowledgeable about their business and often helpful in building out the team, making customer introductions, etc. long before we invest.  Having spent the last 10 years as an entrepreneur/CEO, I’d advise anyone in that position to do the same.  Getting to know your investing partners on a personal and professional level long before they wire the money is a (very) good thing.  NOTE: This doesn’t mean we move slowly.  Although I had known Chris Barbin, CEO at Appirio for about 8 months before we invested, we moved from first presentation to term sheet in just 4 days when the opportunity arose to lead the company’s C round and join Salesforce.com and Sequoia as investors.

Glad to see Mark at PEHub giving a little love to the pro-entrepreneur mindset that I know many of us in the VC world have (despite what you might read elsewhere!).

Good Karma

When I tell people I spend 25-50% of my time with early stage entrepreneurs and companies, most think I am crazy – GGV  is a growth/expansion stage investor.  Yesterday I got an email from an entrepreneur that really made me happy – and validated a lot of what I spend my time on.  In short, I’ve been there as an entrepreneur, and I know how helpful good introductions can be.  I really liked what this entrepreneur is doing (though we haven’t met), and introduced him to a few angels who I thought might like it as well.   Per his email below, the intros really helped.

To be fair, it’s not all about good karma – hopefully my intros and his angel funding help him create a great company that GGV and other VC’s can fund 1-2 years from now!

From: <> [mailto:name@name.com]
Sent: Wednesday, December 15, 2010 7:23 AM
To: Jeff Richards
Subject: Thank you

Jeff,

Just wanted to thank you for your introduction to <<Name>>.  When you and I first spoke, you said “I want to help you finish out your round”.  Well sir, you were incredibly instrumental in making that happen and I wanted to say thanks!

<<detail on names / amounts of investment>>

Basically, I’m way oversubscribed and wanted to thank you very much for the connection.  You and I haven’t met so it’s especially important for me to let you know how much I appreciate the good will you showed me.  Please let me at least take you to an amazing dinner the next time I’m in SF.

Regards,

 <<Name>>

This is a Big Deal – WSJ Article on Google Search Results

This is a big deal.   The Wall Street Journal today has an article titled “Rivals Say Google’s Search Results Play Favorites” that I suspect will generate quite a bit of chatter in the media over the next few weeks – and it should.

Here is Google’s rebuttal post on its public policy blog – titled “It’s All About the Best Answers for Users.”

From a personal standpoint, I have to admit I find Google’s new search results easy to use and helpful when searching for a restaurant, etc.   Rather than getting a morass of SEO’d links from all over the web, I get clean and concise results which are much more relevant to my search.

On the other hand, as a free market consumer, an entrepreneur and a VC, I find it troubling.  If regulators didn’t like what MSFT was doing with IE a few years ago, they’ll have a field day with this topic.  Throw this in with the Net Neutrality discussion and it’ll make for decent fireworks on Capitol Hill in 2011 (though I think we all find those public floggings to be more about publicity than anything else).

GGV Mobile Commerce Dinner

We held our quarterly CEO dinner on Tuesday night in Menlo Park, CA.  This quarter’s dinner was focused on mobile commerce + mobile payments.  Terrific group of companies/CEOs in attendance (see below).  A few takeaways:

1) Belief that NFC is going to “be for real” in 2011, with notes of caution.  “Embedded in phones doesn’t mean widespread user adoption.”  “Will take time for users and retailers to embrace.”  “Most likely will see things other than payment as first wave of feature adoption for NFC – think of what Bump does for communication/collaboration.”  This last point was reinforced this week with Google’s rollout of NFC-enabled Places check-in kits.

2) Widespread discussion of how to create value for consumers and retailers.  This crew gets it, IMHO.  “Taking pain out of the transaction for retailers and credit card companies does nothing for consumers.”  “Winners will focus on how to create new transaction value for retailers and ease of use functions for consumers.”  Think – in-store advertisements, offers, prioritized payment options, etc.

3) Our straw poll of “hot company, not your own” revealed a number of really cool companies in the mobile space.  After several years of hope, it feels like we may start to see some scalable businesses built in the mobile business (by startups).  My bet’s on one or more of the companies at our dinner!

4) Like it or not, the “elephants” of the industry will play a key role – banks, carriers, Visa, Mastercard, etc.

Companies attending the GGV Dinner included:

Billing Revolution

BlingNation

Lookout Mobile

LocationLabs

BillShrink

PayNearMe

MopedPayments

PlacePop

Sparq

TrialPay

TapJoy

Trumpet

Dilemma

Vesta

Amazon

RIM

Dell

PayPal

Great article by a great entrepreneur

Great article by Mike Lazerow, CEO of Buddy Media, on raising venture capital.

We’re not an investor in buddy media – and IVP is a “frenemy” for GGV (a firm we both work with and compete with) – but I really thought Mike wrote a great piece here, and Jules is one of the hardest working guys on Sand Hill Rd.

Shortage of Engineers in SV

Thought Vivek Wadhwa put a well written piece on TechCrunch today on the shortage of Engineers in Silicon Valley.  His bullet point analysis of the “why” we have a problem is spot-on, in my opinion.  In particular, at some point, growing tech companies are going to have to learn how to hire and train engineers straight out of college.  Most don’t today, opting to pay higher comp rates for engineers that are already trained and ready to hit the ground running.  This has traditionally made sense, but the shortage is surely causing some hiring managers and executives to rethink this strategy (I met with a company in Boston last week that is recruiting engineers straight out of MIT undergrad). 

Other roles that seem to have a large mismatch between demand (high) and supply (low), especially in the cloud and consumer internet spaces: VP Product and VP Sales.

Steelheading on the Klamath

Great trip this past week with Ken Loveless (SVB), Tim Connors (new seed inv fund TBA), Justin Fitzhugh (Mozilla), Brian Lillie (Equinix), Chris Barbin (Appirio), Earl Rennison (Trovix) and Bruce Helberg (SVB).  Lots of great fish caught on 5 weight rods and guide Chuck’s “Roach” fly.  30 degrees and snowing – not for the faint of heart!

Recently Read: Delivering Happiness (Tony Hsieh, CEO, Zappos)

Really enjoyed reading Tony Hsieh’s book Delivering Happiness, the story of how he funded, became CEO, and sold Zappos for over $1B to Amazon.  It’s a great story if you are interested in entrepreneurship, and a well-written read (not all great stories are told well) – 225 of the 238 reviews on Amazon are either 5 or 4 stars. 

Although it gets a little preachy on the customer service angle (there’s a reason – Zappos is one of the best in the world at it), there are some great lessons for entrepreneurs on a) how to build a winning and customer-centric attitude within your company, b) what it takes to survive 10 years of ups and downs in the e-commerce space (might be a good read for entrepreneurs with companies started in the last 18 months), and c) some of the pros and cons of raising venture capital (although Hsieh personally made $200M+ on the sale to Amazon, the book described a scenario where he did not want to sell). 

Although the part about selling under duress from his investors garnered all the headlines, this is actually a good read throughout, with some great lessons on how to build a winning culture that will stand the test of time – whether you get acquired by Amazon for $1B or go it alone.  I’d put it up there with Danny Meyer’s book Setting the Table and Howard Schultz’ Pour Your Heart Into It as recommended reads for entrepreneurs.

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