In this episode of the 20 minutes VC, host Harry Stebbings chats with renowned venture capitalist Brad Feld, co-founder of Foundry Group and Techstars. Feld shares his journey from early entrepreneurial failures to becoming a leading figure in venture capital with successful investments in companies like Fitbit and Makerbot. He emphasizes the importance of learning from failures, the power of being on the creative side of business, and the significance of founders being obsessed, not just passionate, about their products. Feld also discusses Foundry Group's investment strategy, focusing on affinity for the product, founder obsession, and mutual desire for partnership. Additionally, he touches on his deep-held beliefs, including maintaining a consistent fund size and the importance of directly supporting CEOs. Throughout the conversation, Feld offers insights on leadership, the evolving human-computer interaction landscape, and his latest investment in Glowforge, a 3D laser printer company.
"Brad is one of the world's leading vcs. Having cofounded Foundry group, Brad has made investments in the likes of Finger, Makerbot and Fitbit, just to name a few."
This quote introduces Brad Feld as a significant figure in the venture capital industry, highlighting his achievements and contributions to the tech community.
"My very first company was a company called Martin Gale Software, which I started with a handful of fraternity brothers to write software for the Mac when the Apple Mac was just coming out... the end result was we made almost no progress building any software for the Mac." "But I also got paid 5% royalty on all the software I wrote. So I didn't get equity in the company. But for every sale of the products that I wrote, I got 5% of the gross."
These quotes detail Brad's early entrepreneurial efforts and his initial exposure to the software industry, as well as his introduction to the financial benefits of royalties in lieu of equity.
"I think I learned how to fail gracefully. It sucks to fail, but it's part of the experience." "I prefer to think of failure as a continuous thing that happens all throughout one's life on all vectors."
These quotes reflect Brad's perspective on failure, emphasizing its role in the entrepreneurial journey and the continuous nature of overcoming challenges.
"Especially if you're playing a long term game, which is to say that you might have a company that fails, but if you do it in a way that's respectful of everybody, it's likely that a number of those people will be there for you the next time, because you've learned a lot from the failure."
"I got introduced to James Park, one of the two founders... I did a conference call with James... I wasn't excited. I wasn't super into it... And so I passed."
"Jeff Clavier at SoftTech and John Callahan at True... both encouraged me to spend time with James and take a meeting... Jeff was way more direct... he basically told me I was an idiot if I didn't take it seriously, I took it more seriously this time."
"I realized that I had completely and totally misread James's affect, and that had inappropriately influenced the way I thought about things."
"We have a filter on the front end. We have a set of themes that we're interested in... We then focus our energy on three things. One is, do we have affinity for the product... Second, the founders have to be completely and totally obsessed about the product... And then the last part is, do the founders want to be partners with us as badly as we want to be partners with them?"
"Obsession is a different thing, and not an unhealthy obsession, but an obsession that's palpable."
"Two areas of investing that captures most of my attention. Two of our themes. One is human computer interaction... And then the second area is an area we call glue..."
"software that does stuff. So it's not the system layer or the network layer in the Internet, but it's the application layer and then software that cuts across that application layer."
This quote explains Brad Feld's focus on the application layer, which is the layer where users interact with software, distinguishing it from the more foundational network and system layers.
"What? Maybe when I was in 1980s, when I was at school and running my first company would have been called middleware and protocol are companies that are built around technology protocols that don't necessarily have to be formalized protocols."
Brad Feld reflects on the evolution of technology, indicating that what is now considered application software was once referred to as middleware and protocols in the 1980s.
"They could be things like push notifications, which an example of that would be our investments in urban airship or investments around SMTP, which is effectively the protocol underlying email, such as Sendgrid or return path."
This quote provides specific examples of the types of technologies and companies that Brad Feld and his firm invest in, highlighting their focus on foundational internet technologies and services.
"We have a set of what we call deeply held beliefs, which doesn't mean they're immutable. They can change and evolve over time, but they're deeply held."
Brad Feld emphasizes that while their beliefs are fundamental to their operation, they are not inflexible and can adapt as necessary.
"Another corollary to that is that every fund we raised would be the same size. So we've raised multiple funds. Every one of them is $225,000,000."
This quote specifies one of the deeply held beliefs regarding the consistent size of the funds they raise, which is part of their strategy to focus on value creation rather than firm growth.
"We started to make some progress after about month four, month five, we started to have some well-regarded LPs commit, and then we had a series of things that happened from our previous fund that were exits of companies that we were involved in and managed that were quite significant, that created even more momentum."
Brad Feld describes the turning point in their fundraising efforts, which was bolstered by the success of their previous investments and the commitment from respected limited partners (LPs).
"And our largest investor and one of our closest friends really didn't want us to raise more than 200. That was the sort of magic number that they wanted us to cap out. And we eventually agreed that 225 was a comfortable number."
This quote reveals the negotiation process behind their fund size decision and the importance of investor relationships in that decision.
"So part of the magic for us is a philosophy that we carry around, which is as long as we support the CEO, we work for her."
Brad Feld underscores the firm's commitment to supporting the CEO and acting in the best interest of the company, which is a core part of their working philosophy.
"Every single CEO needs something different, and every single company, at different points of time, need different things."
This quote highlights the tailored approach that Foundry Group takes with each company and CEO, recognizing the unique needs and timing for each.
"One is a book I recommend every entrepreneur read is then in the art of motorcycle maintenance. And I actually think anybody who creates anything should read the book and read the book slowly and allow it to just be something that you enjoy."
Brad Feld shares his recommendation of "Zen and the Art of Motorcycle Maintenance" for its value to entrepreneurs and creators, suggesting a thoughtful and leisurely reading approach.
"In terms of science fiction, which I read a lot of, I would encourage anybody that's interested in understanding what's potentially happening five years from now to read the books. The singularity series by William Hurtling."
This quote provides a specific recommendation for those interested in speculative insights into the future, emphasizing the value of science fiction in understanding upcoming trends.
"True ventures. We've done a bunch of investments and have very close friendships there. Soft tech. I mentioned Jeff Clavier earlier, Greg Goddessman, Fred Wilson. We've done a number of investments with the gang at Spark and I think we like to work together a lot and complement each other well. Techstars Ventures, which has techstars, which now has a venture fund called Techstars Ventures. We have co investments there. Those are probably the top list."
The quote emphasizes the importance of strong relationships and mutual respect in co-investment partnerships, highlighting several VCs that meet these criteria for Brad Feld.
"I've done 23. I don't have a plan for next one. I haven't run one since the fall of 2012. And I'm just sort of letting myself decide when I feel like being back in a marathon rhythm, which it feels like it's coming."
This quote reveals Brad Feld's approach to marathoning as a personal journey, where he listens to his own readiness rather than following a strict schedule.
"I would have traveled around the world a lot more when I was younger. I definitely traveled in certain places...But I have not traveled around extensively in lots of places...I find myself in lots of places around the world uncomfortable when I don't feel like I necessarily need it to be. And I think my perspective on society and the world in general is good, but I've got lots and lots of blind spots as a result of not having immersed myself in different parts of the world."
The quote reflects on the value of travel for personal growth and understanding of the world, suggesting that early life experiences can shape and enhance one's perspective.
"Len Fassler, unquestionably...Len bought my first company in 1993...Len and I have done several other companies together...The other person that I would put in that category, that who I've learned an amazing amount that I think is one of the world's best leaders in a corporate setting is Charlie Feld, who's my dad's brother and my uncle."
The quote provides personal insight into the leaders who have significantly influenced Brad Feld, emphasizing the impact of their entrepreneurial and corporate leadership on his career.
"I always read Fred Wilson's blog, abC.com...I'm an investor in Mattermark. I think the Mattermark daily that they put out has become awesome, phenomenal. And I read Dan Primax term sheet every day, and I think Dan's one of the best writers and the best, I would say not just best writer, but sort of the most thoughtful provocateur."
The quote highlights Brad Feld's daily reading habits and the value he finds in these particular writers and newsletters for their insights and thought-provoking content.
"So the most recent investment I made was in a company in Seattle called Glowforge...Dan Shapiro is the CEO...The hot seat is the book...We have deep affinity for the product...Dan is the epitome of obsessed about what he's doing...And last, I think we kind of collectively fell in love with each other in a very quick process of us evaluating them and them evaluating us."
The quote explains the rationale behind the most recent investment decision, highlighting the importance of product potential, CEO passion, and mutual respect between investors and the company.