Chris Dixon

(at least I think it is old..?)

via

also reminds me of the classic “day in the life of a vc”

5:45am – Alarm clock. Pick up Blackberry from night-stand, fire off an email to portfolio company CEO to demonstrate “round-the-clock” vigilance. Go back to sleep.

8:30am – Wake up. Decide whether to have breakfast in the kitchen, dining room, sunroom, veranda, or gazebo. Have “breakfast meeting” with Rex and Fido.

9:45am – Drop child off at nursery school. Banter with child’s teacher. Haha, that teacher doesn’t make in a year what I spent in Lanai over New Year’s. Wow. I haven’t been to Hawaii in three months. Call assistant, re: technology conferences in Hawaii.

10:30am – Arrive at office, remark loudly that these breakfast meetings are killing you. It’s been ‘go, go, go’ all year. The pace is killing you. Makes you wish it was 2002 again.

10:45am – Call CEO of semi-conductor portfolio company. Ask if he’s considered building a Services component to his business.

11:45am – Damn. Late for lunch. Sometimes they run out of the olive bread at Il Fornaio. Gotta run. Thank god for the Carrera. That damn 545 didn’t have any giddy-up.

1:15pm — Call CRM portfolio company CEO, remind him that blogging is hot. Has he ever thought about Customer Support blogs? That’d be cool.

1:30pm – Oops. Late for meeting with entrepreneur looking for funding. Hee. Finish game of “Minesweeper”.

1:45pm – Apologize for being late. It’s been ‘go, go, go’ lately. The pace is killing me. Our firm is a little different… all of our partners were operators, so we know what it’s like to run a company. We’re pretty conservative investors here – we only put money to work where we can really make a difference and add some strategic value. We try to be respectful of your time, so we’ll give you a “quick no” if this isn’t something that interests us…

2:30pm – Wow. 15 voicemails from entrepreneurs. “What’s the next step?” Why does everyone need to know what the “next” step is? I’ll tell you what my next step is… out my office door to the lunchroom. Ooo. Blackberry Odwalla. I love Blackberry Odwalla. Note to self: have wife buy See’s candy for the Office Manager who buys the juice next Christmas. Odwalla, Odwalla, Odwalla. I love Odwalla.

2:45pm – Shit. Sequoia has a term sheet out to Acme Intangibles. Find Associate. Why the hell didn’t we look at Acme? That fucking company is hot. Instead, you bring me this piece of shit company in storage management? Christ. Goddamn Associates never see the big picture. Oooooo… The TED conference. When is TED? Gotta get into the Monterey Plaza. Margaret stuck me at the Marriott last year. How much did that suck?

3:15pm – Fax term sheet to Acme. Wonder what the hell they do? No worries. Those guys at Sequoia diligence the hell out of deals.

3:45pm – Isn’t there any political candidate who still needs a fundraiser? How the hell did Gorenberg get Kerry? Stupid, stupid, stupid. Should’ve snagged Kerry back in December. What about the Senate? There must be a senator who needs electing.

4:15pm – Sharon Heights. Networking. Bob said the monthly dues are deductible, right? Bob rocks. Best accountant ever.

8:15pm – Sorry I’m late honey. It’s been ‘go, go, go’ all year. Can’t do this too much longer. Can Isabel stay late tonight to make some dinner?

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The most important term in a startup term sheet that no one seems to think carefully about is founder vesting.   There are two key points about vesting:

1) All startup employees – including founders! – should vest over 4 years from their start date (with a one year “cliff”).  When I used to work in VC I can’t tell you how many companies I saw where some random former founder who was long gone from the company and was only there for some short period of time owned some big chunk of the company.  Not only is this just plain unfair, it also means there is a lot less room for giving equity to employees and for raising new capital.  Even if you are founding a company with your best friend – actually, especially if you are founding a company with your best friend – everyone should have vesting.   If you have a lawyer who tells you otherwise, get a new lawyer.

2) Founders should always have acceleration on change of control!  In particular, you should have full acceleration on “double trigger” (company is acquired and you are fired).  In addition you should have partial acceleration on “single trigger” (company is acquired and you remain at company).  I prefer a structure where you accelerate such that you have N months remaining (N=12 is a good number).  This gives the acquirer comfort that the key people will be around for a reasonable period of time but also lets the founders get the equity they deserve without spending years and years at the acquirer.  Consider the scenario where your company gets acquired 1 year after founding and you have 3 years of vesting remaining.   Suppose further that you just aren’t a big company type and leave after 1 year.  In that case you would forgo half your equity.  It’s always surprising to me how much time founders spending focusing on valuation that might change their ownership by a few points when vesting acceleration (albeit under certain circumstances – but I have seen this happen) can have a far larger impact on their ultimate equity ownership.

The Name Inspector has a good post today regarding 6 naming myths to ignore. I think it’s generally right on.   Naming is so important and so incredibly hard, especially for consumer internet companies that not only have to find a good name but also get the URL.   I am convinced that a big part of Twitter’s success, for example, is it has such a great name.  Simple word, easy to spell, great imagery, and also evocative of what the product does without being overly literal.

I have been involved in naming a number of startups, including my two most recent companies:  Hunch and SiteAdvisor.  Each time it was a long and painful process.  Here are some things I’ve learned along the way.

1) Probably the most important thing is that the name be easy to spell after someone hears it pronounced.  I was involved in one startup before where every time you said the name the person says “what?” and then you have to spell it.  Trust me, it becomes really tedious and also adds friction to word-of-mouth buzz.

2) You should have different naming goals for different products.  For example, SiteAdvisor was a security product.  You really can’t make security “cool” so we didn’t even try to bother to do that with the name.  Instead we went for a name that helped explain in a very literal way what the product did.  Before we came up with the name SiteAdvisor, I probably had 100 meetings where people said “I don’t understand what you are building – is it an anti-phishing toolbar, a spyware blocker or what?”.   This included meetings with VC’s who focus on security and other experts.  I knew the name SiteAdvisor was a winner when my father in law wrote the name on a high school blackboard and asked the kids what they thought the company did and one kid said “They advise you about websites” (and then he said ” … or construction sites” ).   Also we liked the name because we imagined in the future doing more than just security – for example warning about adult content.  (Alas, we never got that far).

3) I tend to disagree with The Name Inspector about name length.  Shorter is definitely better.  In particular the number of syllables is important.  SiteAdvisor, while good at describing the product, is really clunky to pronounce.   I also tend to really dislike Latin-y portmanteau names like “Integra” “Omnitrust” etc.  Sounds like a pharmaceutical product.

4) A few things I’ve learned about methodology.  I think it’s very rare to have an epiphany where you come up with a great name.  First of all, even if you do, the domain is probably taken and too expensive.  For systematically brainstorming, I really like the Related Words function on RhymeZone.  I try to make lists of words that are sort of related to the product and then look at all the related words, look at all those words’ related words, etc, making lists of words and word fragments that sounds good.  Then I have a systematic process for checking domains to see if they are buyable.  If you are super lucky (and picked a multiword domain name) you might get it retail, but at this point almost all .com names (yes, I think you still need to own the .com) are owned by someone and the question becomes whether they will sell it at a reasonable price.  The best case is usually that it’s owned by a professional domainer and it’s not very monetizable via Adsense (domainers make a lot of money from Adsense on sites like candy.com so you’d need to offer them a tons of money to sell it).

Naming is tough!

Can someone explain to me why anyone listens to Larry Summers anymore?

Also – side note – everything they teach you in finance class at Harvard Business School has now been proven once and for all to be false.  CAPM, efficient markets, diversification, the importance of financial innovation (derivatives etc), deregulation, etc.  The only diversification that matters is institutional (to avoid counterparty risks and Ponzi schemes).  When things go down everything becomes correlated.    Banks were regulated after the great depression for a reason.   Good hedge funds actually did better overall that the market in past years and during the crash last year.  The only people who should be allowed to use derivatives are people who are actually hedging for fundamental economic reasons.  Short sellers don’t make the world a better place (ask anyone who trades financial stocks at a good hedge fund).   Most private equity funds don’t create economic value – they just arbitraged cheap debt and should now go away.

The good news is now engineers will go back to doing productive things again and New York City will become affordable for non-bankers again.

I love the NYTimes and read it every day.

But almost every computer security related article I read in it is just dead wrong. As someone who started and succesfully sold a computer security company (SiteAdvisor to McAfee) I feel like this is one area I know something about. (scary thought: does the NYTimes just happen to be wrong about my area of expertise or are they wrong about a lot more and this is the only area where I’m able to detect it?).

Today’s poorly researched and flat-out wrong security article claims Macs Aren’t Safer, Just a Smaller Target. The sole piece of evidence comes from a study by Symantec, a company that sells Mac anti-virus software. When your only source has a significant business interest in “results” of the study, shouldn’t the “newspaper of record” get a second opinion? For example, maybe talk to an operating systems expert, most if not all of whom will tell you Mac’s Unix-based OS is just a vastly better architecture from a security perspective.

Moreover, as comments on the article point out, Mac’s market share is big enough now (~10%) that it certainly seems like a reasonable target. In fact with all the talk of how Mac’s don’t get viruses, if I were a virus writer today looking to make my name, I’d imagine targeting the Mac would be a far more interesting way to go.

I literally can’t remember the last time I met a techie in CA or NYC who used a PC. At this point using a Mac versus PC in the tech world has become an IQ test, not a preference.