This interview is full of stories of successful entrepreneurs because Jerry Colonna has invested in or worked with some of the best of them.
As I listened to Jerry tell stories of the people he worked with, I kept noticing that the founders who made it big were building companies that were a part of who they were as people. Take Seth Godin for example. Before Seth was a famous marketing guru Jerry invested in his company. Jerry told us how that business was the embodiment of Seth’s marketing theories.
On the other hand, Jerry told us about an entrepreneur who he didn’t fund because when Jerry asked him why he wanted to start a company, the guy said that all his friends were starting companies.
Today Jerry is a coach who uses his business experience to help businesspeople get through their “now what” moments.
This is a mechanical transcript. You can edit it (or read the user-edited version) here.
Andrew: One of the things you are going to hear in this interview that you are about to listen to is that you and I and we who are building new companies, who are building new projects from scratch, we are the ones who are changing the world. And you are going to hear that. I know that that sounds like one of these clichéd statements, but there’s an hour of substance to back that up in the program you are about to listen to. So what does this have to do with Haystack, the company that’s sponsoring me here on Mixergy? Well, when you have an idea that is going to change the world, one of the first things you need is a design for it – a way to communicate that idea with your potential customers, with the people whose lives you are going to change. So where do you get started? Check out Haystack.com because Haystack isn’t one designer, it’s not one firm, it’s a place for you to see lots of designers, lots of different firms. And from each one of these firms you can see their past work so that you can find out who you are going to click with. I’d scroll down on this webpage for you on Haystack.com before so you can see how easy it is to be inspired to find your next design firm. To find the person who is going to “skin” your next project – really give it the flesh that everyone’s going to interact with. I want you to do it yourself. It doesn’t cost you anything to look, it doesn’t cost you anything to come on here and find the right person to be connected with them. It’s just a great directory for you to go through and find your next designer. Check it out – Haystack.com. Its where you are going to find the right web designer for your next project. Thank you Haystack. Here’s the program.
Andrew: Hey everyone! Its Andrew Warner, founder of mixergy.com home of the ambitious upstart. What if you could sit down with a venture capitalist and say “Don’t judge and criticize me and tell me why I’m not worthy of your time and your money, but instead just give me some of your advice. Teach me what you’ve learned over the years.”? Well, essentially that’s what I think you get with Jerry Colonna as a personal coach. This is a guy who has not only invested in companies that we all know of like Geocities and sat on boards, but he’s had a lot of business experience that we are going to be talking about here directly. And today, Jerry am I right, you are coaching entrepreneurs and business people about how to be at their best?
Interviewee: That’s right.
Andrew: Okay. Alright, I want to talk to you about some of the issues that they face and learn some of what you are teaching them. Just to establish some context, let’s go over your biography a little if you don’t mind.
Andrew: The first thing I want to talk to you about is: 1984, you were working for Information Week as an editor.
Andrew: Doesn’t seem like the ideal background, or the typical background for a venture capitalist. No?
Interviewee: Well, Mike Moritz from Sequoia was a former journalist. It could be argued that former journalists actually know how to speak and write so we make better venture capitalists.
Andrew: I’ve heard that you’ve said that there are other similarities there too, right?
Interviewee: Yeah. I mean I think that probably the most significant similarity…in the early days in which I was a reporter, what was my job? My job was to listen to entrepreneurs, listen founders of companies as they came in, trying to get our attention as reporters, and probably my most significant task was to separate the wheat from the chaff- to really figure out which companies were going to make it, had some potential, were worth following up on. And then follow those companies over several years. Well, when I first became a venture capitalist, that process was very familiar, because I had done that for so many years as a reporter and editor.
Andrew: How did you do that as a reporter and editor so well? Knowing that they want to snow you, knowing they want to get a certain story out of you, how do you get at the truth? How do you get at the real story underneath it?
Interviewee: Maybe, although, you know, that’s always a difficult challenge for a journalist is having a set of opinions but maintaining an open mind and not confusing yourself as a journalist with technologies because it’s certainly different. I think that was one skill set. The other skill set, though, that’s worth noting is, which I think, I used today as a coach and I certainly use as a venture capitalist and when I sat on all those Boards of Directors, and that’s simply the ability actually to speak to people. Get them to speak and get them to tell you their story in a way that you could really understand what was happening for them psychologically.
Andrew: I see. And we keep saying story over and over, and that’s something that I wrestle with here as I do my interviews with entrepreneurs. I want to get their story and let the listener come up with his own lessons, with his own take-aways, but people what to be fed those take-aways. Maybe you could help me understand or explain to our listeners here today why a story is so important? Why, on its own, there’s value to listening to a story from the business?
Interviewee: That’s a great question, and I’m trying not to get too philosophical and esoteric with it so bear with me if I sound a little bit like that.
Andrew: Jerry, I got to tell you, one of the things that I love about you from the research that I’ve done before this interview is that you do get philosophical, that you do go deeper than most people are willing to go. So, rip into it, be yourself as much as possible.
Interviewee: All right. So, I think that story is the main way we, as humans, connect with one another, and perhaps, it goes back to sitting around a campfire, telling our traditions, talking about who we are. We use story, and I’m not just saying fiction, we use story as the way to understand. We use metaphor to make it more powerful–I’m doing it right now with you–to connect in a deeper way.
I think what ends up happening, though, is that those skill set, which are, I believe, innately human, are sometimes subjugated when we’re positioning ourselves as business people. We become a little too one side of the brain down, and we fail, in effect, to see the story behind the numbers or the story behind the technology or the story, importantly, behind the entrepreneur who’s walking into your office and saying, “Oh, by the way, I’m going to change the world.”
I mean, what an audacious statement, and we lose that connection when we say, “Well, great, this is just like Amazon and they felt they blah, blah, blah.” Can we hear that story? Can we understand that? And then we can place them in a sort of a larger context and say, “Wait a minute. Maybe there’s something powerful here that’s worth listening to.”
Andrew: I see. OK. And that entrepreneur who is coming into your office, the numbers might say he’s got no traffic, he has no revenue, he has no profit, and that alone sounds like a dead company. But when you hear the story behind it, where he says, “This is where I came up with the idea. This is how I think it will change the world. This is why I am the person to do it,” that let’s you know something much deeper.
Interviewee: Let me tell you a story about the way story–here we go again–about the way I would read a business plan back when I was in active investment. At our height at Flatiron, we would get 200-250 business plans, unsolicited, a week, and I had a very simple and fast way to read a business plan. The first thing I would do is read the [unintelligible], what’s the problem that this entrepreneur is trying to solve? Either I saw it as a problem or I didn’t. I need to get it right away or I didn’t. If I got it, and I usually was curious enough to get it initially, the next thing I will do is put, almost to the back, usually to the back, to say, “Who is this person? What’s the management biography? Who is this person?” I don’t need all of that sort of filler in between, which is important material, but the first two questions I always ask is, “What’s the problem” and “Who is this person who thinks they’ve got a solution.” If their background intrigued me, not are they picture perfect, are they out of central casting in Hollywood? But if their background intrigued me, they’re almost invariably are called in for a meeting. And said…go ahead.
Andrew: No, no, no, and said…
Interviewee: Well, I remember for example, one of the dominant questions I would ask, once I got past the first few conversations would be, “Why are you doing this business? Why you versus anybody else and why this business versus any other business?” and you’d be amazed at the answers you’d get. I remember one guy telling me that the reason he launched the business was that he was sick and tired of his business school classmates who were not [unintelligible] launching businesses and succeeding, and so therefore, it was his turn. And Andrew, I didn’t back that guy.
Andrew: I see. Do you have a story of somebody who did have an answer that got you to back him?
Interviewee: …If their background intrigued me, not are they picture perfect, are they out of central casting in Hollywood, but if their background intrigued me, they’re almost invariably are called in for a meeting, and said…go ahead.
Andrew: No, no, no, and said…
Interviewee: Well, I remember, for example, one of the dominant questions I would ask, once I got past the first few conversations, would be, “Why are you doing this business? Why you versus anybody else and why this business versus any other business?” And, you’d be amazed at the answers you’d get. I remember one guy telling me that the reason he launched the business was that he was sick and tired of his business school classmates, who were not as smart as he is launching businesses and succeeding, and so, therefore, it was his turn. And Andrew, I didn’t back that guy.
Andrew: I see. Do you have a story of somebody who did have an answer that got you to back him, that got you to feel passionate about his story?
Interviewee: Sure. I mean, the investment, for example, at Starmedia, which flamed out after it went public, was an incredible story. Fernando Espuelas, who is, I think, a radio personality right now in California, you know, it was a classic case. This was one of the few investments I ever did or recommended, because Fred, my partner, fled and ended up taking the board seat and running with the investment. But I was the one who found the business plan, and it did come in over the transit, unsolicited, without any introduction, which is very rare.
I remember being intrigued by this notion, and there was always a line with Fernando we talked about, which was that the countries of Latin America were artificially disjointed from one another as a result of colonialism. And that the opportunity, the technology presented was to unify disjointed people. Well, I get chills, and I still think about it now, because you and I – I mean, you’re in Buenos Aires, I’m in New York – we know what the power of technology is. We know how powerful that can be to change society and, dare we even say it, provide some social justice.
So, my first reaction was, “Who the heck is this guy?” So, I go to the biography and he’s got a classically powerful biography. You know, well trained, brand manager, I believe from AT&T, intriguing enough that I got him in. And then when I heard his story, it blew me away. Where did he get the idea for Starmedia? He was on a track in Nepal or the Himalayans, I don’t remember which country it was. And where did he grow up? He grew up in Greenwich, Connecticut. OK? Bastion of wealth, except that that’s not what his mother did for a living. His mother was cleaning the houses of the wealthy people. And when you combine that kind of a background and that kind of a personality with someone who has the audaciousness to say, “I am going to write 700 years of colonial wrong,” that’s pretty audacious.
Andrew: I see. What is your story? What’s your audacious “This is why I am” story? “This is why I am, who I am.”
Interviewee: Well, the thing that occurs to me is, you know, I’m just a kid from Brooklyn. You know, I grew up going to local Catholic schools and then to a local public high school. And then I went to Queens College, the city university in New York, which [xx] was really founded to educate the children of immigrants. The first kids to go to college and their family, I was that classic story of that. So, for me, I’m still that kid from Brooklyn, sometimes, with a chip on my shoulder, still trying to prove that I can make it with the rest of the world. But mostly today, I’m the kind of guy who’s really more interested in the nexus of who we are as human beings and how we manifest in our work. To me, that is the most rich and interesting area of exploration.
Andrew: I got that passion, too. And that’s why, you said, “Chip on your shoulder,” and you said it almost as a point of pride. Just the other day, I talked to…do you know Mark Suster, he’s now a venture capitalist at GRP Partners?
Interviewee: I don’t.
Andrew: Well, I hope you get to meet him. I did an interview with him earlier this week and he says that one of the things he looks for in an entrepreneur is that chip on their shoulders. Why? Why is that so helpful? Why? Can you talk about this significance of that?
Interviewee: Well, you have to be careful because the chip can turn into arrogance and it can turn into, you know, a real and angry relationship with the rest of the world, which does not serve a leader well. But, it’s about, you know, the more positive side of that metaphor is that it’s about being driven to prove yourself. It’s not about money, and it’s not even necessarily about…
Interviewee: …area of exploration.
Andrew: I’ve got that passion, too. And that’s why you said, “chip on your shoulder”, and you said it almost as a point of pride.
Andrew: Just the other day, I talked to, do you know Mark Suster? He’s now a venture capitalist at JRP Partners.
Interviewee: I don’t.
Andrew: Well, I hope you get to meet him. I did an interview with him earlier this week. And he says that one of the things he looks for in entrepreneurs is that chip on their shoulders. Why, why is that so helpful? Why? Can you talk about this, the significance of that?
Interviewee: Well, you have to be careful because the chip can turn into arrogance and it can turn into, you know, a real, an angry relationship with the rest of the world, which does not serve a leader well. But it’s about, you know, the more positive side of that metaphor is that it’s about being driven to prove yourself. And it’s not about money. And it’s not even necessarily about proving yourself vis a vis others. It’s really about answering your own insecurities and being able to say “I can make it. I can compete. I can, not that I’m entitled to, but with hard work and some luck, I can realize this audacious notion that I have, that I’m going to overturn the status quo in some capacity”. And you know, in the sense, powerful entrepreneurs are a bit revolutionary. You know they dive at the technology disruption, the social, the commercial disruption, and they fuel it along. They push it along.
Andrew: I love that. You know what? We’re in a part, I’m in the part of the world right now where revolutionaries used to carry guns. Where that’s the way you had an impact. Not just here, I guess, but all over the world. Today what I see is, it’s guys who are creating mobile technologies, guys who are making the internet more accessible, guys who guys who are allowing us all to connect. Those are the real revolutionaries who are going to turn change the world. People who are listening to us right now have an idea. Those are the ones who are really going to have impact on the world.
Interviewee: I agree with you. You know, again, another story. One of the first investments we did at CMG Adventures was Lycos. Do you remember what Lycos is?
Andrew: Yes, Lycos. I used to spend a lot of time on Lycos. It was one of the first search engines, I don’t mean to steal your thunder. Lycos was a type of spider, which is why the site was called Lycos. It would spider the web. Lycos had a dog on the cover because people didn’t understand what a spider was, I guess. So there was Lycos, go get it, those commercials with the loveable dog that would go and get your answers for you. And I’m going to shut up now and let you tell the rest of the story.
Interviewee: Well, you tell it well. The dog was named Fetch. You get it? Fetch, OK?
Interviewee: So Lycos, we did a technology transfer out of Carnegie Mellon. This is a technology that had been sitting on the desk of a college professor and a couple of graduate students. Brilliant guys out of Carnegie Mellon. And we got the opportunity to fund this and actually pull it out and establish the business. And I remember an early conversation I was having with a guy who will remain nameless for right now because he’s still active in the industry. And I was describing what I thought was the potential for search. And this was 1996. OK, and he said to me and we were debating. Should search be ad-supported or should Lycos be in the business of selling their software to other enterprises so that they could search the data on their computers? And I said to him that the bigger opportunity was going to be in advertising-based area. And I remember this phrase explicitly. He said, “Oh, come on. Do you think that anybody’s ever going to sell 200 million dollars worth of advertising on the internet?” Now contrast that, I think that’s what Google does, you know, a month. You know, I mean. Yes, I think people are going to sell 200 million dollars worth of advertising on the internet. You know I went to the association. The association with that story was. It takes a bit of audacity, hubrus, courage and foresight to turn around and say in 1996 yes there’s going to a day when people will sell 200 million dollars worth of advertising on the internet, based against search. So…
Andrew: Fair to say, too, that it takes a bit of audacity, courage, and all those adjectives that you used, to be in business today to change the world through entrepreneurship.
Interviewee: Yes, I think, you know, you asked, in effect, two questions: to be in business and to change the world. You know, I would argue that there are plenty of people who are in business who are marked in time, shall we say? You know, hash marks on the cubicle wall? And then there are people who are saying, “There’s got to be more out there.” And this goes back to that sort of deeply personal thing. You know, I believe very strongly that we all have some deep profound calling. One of my favorite writers calls it “a sacred dance,” the dance that we do that we were born to do. Some of them are exciting, interesting, even sometimes, failing entrepreneurs, that’s their sacred dance. And…go ahead.
Andrew: Sorry. We’re on Skype, and so sometimes, it feels like we’re stepping on each other’s words. I want to make sure that you say the name of the author. I know that you’re an avid reader and I know that our listeners are, too, and so they should be exposed to your reading list.
Interviewee: Sure. So, the book I was referring to is called “Soulcraft,” one word, and it’s by a writer named Bill Plotkin. He’s actually quoting a native American wisdom teacher when he talks about the fact that we all have two dances: a sacred dance and a survival dance. It’s the sacred dance that is actually the much more powerful place for us to be.
Andrew: All right. I’ve got so much here on the agenda, I want to make sure to get to all of it. We talked about advertising, so let’s talk about the next stage in your career which is TechWeb. I didn’t have it on my list for some reason before we started this interview, and you said, “Andrew, we should talk about it, that’s only the third entity online to accept advertising.” How did you get on with that? Can you talk a little bit about your experiences there?
Interviewee: Sure. So, I worked on that as a project while I was working for CMP Media. I had spent the early part of my career there. After doing some internal projects, Michael Leeds, who is the son of the founders of the company, came to me and said, “What do you want to do next?” I had had some success with an internal system that we had deployed. I had made the shift from an editing job more into a corporate job, and I remember, this is probably 1993, my saying to Michael, “I need to figure out what this electronic media is going to be. What’s going to happen to print long term?”
So, I started working with a woman, another staff person, named Kelly Flynn Post, who had just started working for the company a few months before. We sat in an office, just the two of us, and we kind of talk everyday and just brainstorm and brainstorm. The first thing we did was we started to sort of manage all of the company’s relationships with the online services, people like America Online and Compuserve and Prodigy, you can’t believe it, even Delphi, I think, we had a relationship with. We tried to centralize all the relationships there. We started down the path of doing one deal with America Online, which is just going to be one all encompassing deal and we were going to bring all of our publications to America Online.
One of my fellow editors, a guy named Mike Azzara, came to me one day and he said, “You know, I know you’ve been talking to America Online, but have you seen this thing called Mosaic?” and this was probably early January 1994. So, I worked with the IS department and actually got a connection directly to the internet. Big deal. I went to the Mosaic site and using FTP, downloaded my first browser, and I think I looked at the entire Web in about 10 minutes. Because that was it! There were only about 10 websites and you were done! It was one of those moments where I said, “Jesus, this is the future. This is it. Forget this America Online relationship, this is the future.”
A few weeks later, my company was one of the sponsors of an important communications industry trade show, and like all publishing companies at trade shows, you do a show daily. At this point, we had a couple of staff, some really bright people started working with us, and we decided to do something really radical. We produced a show daily in HTML on the Web. Now, I think we were the only people who read it, but to my knowledge, it was the first time anybody was actually publishing a newspaper on the Web, on a daily basis with daily deadlines. You know, we did this for three or four days, and we came back and we said, “This is radical. This is completely different.”
So, while we were simultaneously negotiating with AOL, and at the time, Seth Davis was about to launch its proprietary online service and Microsoft was about to launch MSN, we started planning for a Web-only service to be launched that fall. We launched it November of ’94, and it was like a rocketship.
Interviewee: …and like all publishing companies at trade shows, you do a show daily. At this point, we had a couple of staff people, some really bright people had started working with us, and we decided to do something really radical. We produced a show daily in HTML on the Web.
Now, I think we were the only people who read it, but to my knowledge, it was the first time anybody was actually publishing a newspaper on the Web on a daily basis with daily deadlines. You know, we did this for three or four days, and we came back, and we said, “This is radical. This is completely different.”
So, while we were simultaneously negotiating with AOL, and at the time Ziff Davis was about to launch ITZ Proprietary Online Service, and Microsoft was about to launch MSN, we started planning for a web-only service to be launched that fall. And we launched it in November of ’94, and it was like a rocket ship.
I remember being on the show floor of COMDEX in Vegas at the time, and people just…in fact, the theme song that we had picked for our part of the trade show booth was, “This Is The End of the World As We Know It,” by…I’m blanking on…
Interviewee: REM. And just playing that constantly. And I remember the print salespeople coming up to us and saying, “This is terrible. I can’t believe you’re doing this. You’re putting our content away for free.” And I said, “Either we do it to ourselves, or it’s gonna be done. Just get used to it. Print is over.”
And two months later I was out of that company, and I was working with CMG Adventures and starting an Internet business, or starting investing in Internet.
Andrew: Was that the first pure play investment in Internet companies?
Interviewee: The first pure play venture capital. That was the first…CMG Adventures was the first entity to invest solely in Internet related businesses, and at the time nobody knew what that meant. What was an Internet business? But that was the way we marketed ourselves. That’s why the name Adventures.”
We were really trying to do something that hadn’t been done before, and it was a very tiny fund. It was 35 million dollars. But, it was a group of really smart people, and we made some really interesting investments at the time.
Andrew: I want to skip ahead a little bit to Flatiron partners.
Andrew: Why Fred Wilson? We talked about why you decided to back certain entrepreneurs. Why did you decide to go in business with Fred Wilson? This if Fred Wilson before he became THE Fred Wilson, famous investor, today.
Interviewee: Before he became Fred Wilson [laughs]?
Interviewee: Well, first off, I’ll tell you what I’ve heard Fred say, “Why Jerry Colonna?” When Fred and I first met, it was through a guy named Mark Pincus, who’s now doing Zynga. Mark and his partner, Sunil Paul, had launched a business called, “FreeLoader.” And I was looking at it…I had known Sunil from his days at AOL, and I was looking at it on behalf of Adventures, and Fred was looking at it on behalf of Euclid, his former fund.
And when Fred and I started looking at this deal together, and Adventures ended up not doing a deal for a complicated reason, but when we first met, I was sitting in an office in New York that I taken as a part of Lycos. Lycos had an office New York, and I just took an office there, because I was living in New York, and the venture firm was based up in Boston.
And he tells the story that he walked into my office, and I was sitting there in a ripped Yankees T-shirt and a Yankees baseball cap with ripped jeans on, and he said, “OK, this is an Internet guy!” [laughs] Little did he know that I was just a bum.
Interviewee: Anyway, we went through a bunch of machinations. We started to get a little bit closer, and then one day, I was on my way to a flight, and Mark Pincus paged me. This was back in the day when I had pagers and not cell phones, OK? That’s how old I am.
Pincus is a great guy, but he’s a little hyper, and even though I wasn’t an investor, he used to call me all the time for advice. So, I looked at the phone. I said, “Oh, shit. What’s he calling about?” And then I walked over to a pay phone. I said, “All right, let me call him back.”
I call him back, and he says, “I’m so glad I got you! Fred’s going to leave Euclid, and you should be his partner.” I said, “OK, well, that’s kind of interesting.” So, I went to lunch with…I made plans to go to lunch with Fred. And then the day before, the morning of, Fred cancelled on me. And it was the reason that he cancelled that made me realize that he was the partner for me. He cancelled because he had forgotten it was his daughter’s graduation from kindergarten. His daughter, by the way, is now at Wesleyan. And what moved me was, this is a guy whose values are in the same place as me. He was going to cancel a business lunch with a potential partner so that he could go to his daughter’s kindergarten graduation, and that’s the moment when I knew he was my partner.
Andrew: Why is that a plus? Don’t we as business people need to constantly be on, be working non-stop and texting under the table while we are having a meeting with somebody who is important?
Interviewee: Yeah, keep doing that. I mean, you’ll be calling me or a psychotherapist in ten years. Okay.
Andrew: Is it that entrepreneurs…Sorry go ahead.
Interviewee: It can kill you. It can kill you.
Andrew: What about five years of doing nothing but that? Ignoring the rest of the world, no family, no friends, five years focusing in building something incredible and then having the luxury to go and relax?
Interview: Yeah, Randy Komisar who was a, I think, a venture capitalist, now out on the west coast, wrote a wonderful book a few years back, the name escapes me. But he has a chapter in there called “The Life Deferment Plan.” That’s what that is.
Andrew: You’re talking about….
Interviewee: I work hard for the next 5, 10, 15 years and then I’ll have a life. You know what happens? Life happens.
Andrew: But didn’t he mean that…I don’t know why I can’t come up with the name of the book…didn’t he mean that as working a job that you are not passionate about so you can earn enough money to start a business that you can focus on. That don’t work a job.
[Andrew’s note: the book is called “The Monk and the Riddle” http://bit.ly/86dc6n
Interviewee: What he meant was putting your heart and soul to the side for a couple years. So what you’re asking is – “Is it okay, in effect, to spend say, your 25-35 not focused on having a life?” Okay, here’s a story for you. I was 38, I was working at JP Morgan earning a lot of money I had made a lot of money. And I remember coming home one night, after having flown to the West coast and back in a day. Cause I was working really hard. And I fainted, just as my then 3-year-old daughter was walking down the stairs. And to this day she remembers that moment. She remembers it as the moment in which she saved my life. I don’t know if that was true, but I knew that at that moment I could have died. And, you know, all of those crappy little posters that we see in frequent flier magazines on airplanes, you know, they’re right! Now that doesn’t mean that as an entrepreneur you should… [pauses] It’s a difficult nuanced dance because your work as a founder as a proprietor, the sole proprietor of a business, becomes a part of your life. I’m not a big proponent of that phrase “Work-Life Balance” because I think that work and life are too enmeshed. But what it does mean is that the values that you want to instill in your life must be a part of your work. If you want to live your life, if you want your son or daughter to live their life so that they dedicate themselves to their work, even if their work is their entrepreneurial passion, then keep going. Because that’s the modeling that you are going to be doing.
Andrew: I see. Alright.
Interviewee: Am I being clear?
Andrew: I think so, yes.
Interviewee: This is a powerful passionate place for me.
Andrew: I see what you mean. I think that there’s an early part of you life where it helps, before you have kids maybe, where it helps to work non-stop. I wouldn’t be here in Buenos Aires if I hadn’t done that – worked non-stop and ignored the rest of my life. Just so I could build something that would take care of me later on. I take care of it passionately; it takes care of me for the rest of my life.
Interviewee: There is a danger there.
Andrew: Yes, there is.
Interviewee: You are playing with fire. And the danger is that you lose yourself in the process. That you wake up one day….. What’s the difference between being passionate about your own business and being passionate about working for Goldman Sachs? And, you know, spending 10,15 years doing it? So you are working for the man. So what? You are making 10 million dollars a year.
If you lose yourself in the process, whether you’re an entrepreneur, or an intrapreneur, or you’re working within a company, if you lose yourself in the process that’s the tragedy. Now, if you’re going to be flat out and you’re going to say “for the next five years I’m going to be working on this business,” you know and you’re still managing to exercise, you’re still managing to read, you’re still managing to go to the movies, or talk to a family member or a friend now and then, and go out to a dinner, okay. But, the problem is that too many people lose completely themselves in that process, and then they wake up one day and they say, “What the hell happened? I’m gone, I’m empty.”
Andrew: Alright fair enough, and the truth is that at the end of it I did get burned out and if I hadn’t burned out who knows where we’d be today. Maybe I would’ve kept the company instead of selling it, maybe I would’ve continued to grow it and things would’ve been differently. I get your point.
Interviewee: I’m reminded of a quote that was particularly poignant and moving to me at the time when I decided to leave J.P. Morgan and it maybe apocryphal but apparently Neil Armstrong after landing on the moon suffered severe depression and he said, “After you’ve seen the Earth from the vantage point of the moon, what’s left?” Well, if you lose your life in the process of building a multi-billion dollar company what’s left? If you think of all the great entrepreneurs that people like you admire, the folks who just take it to the next level, a Richard Branson for example, do you think he’s really lost his life? I think he’s found his life through his work.
Andrew: I see. So when we look at Fred Wilson today blogging from airplanes on trades, talking, giving speeches, and so on it’s a part of his life, it’s not like he has to ignore his family and go blog for three hours, it’s a part of who he is, he might do it on his Blackberry on a flight home from somewhere.
Interviewee: Well, you know check with Fred on your book, but what I would notice is, notice how much content on his blog is about music or his wife…
Andrew: Or his kids.
Interviewee: …or politics. He tries to steer away a little bit from the kids because, you know I have teenagers too, they don’t like you talking about them, but you know there is a balance there, and that by the way, that balance, makes you a much more interesting business person, much more interesting. How can you set yourself up as an audacious solver of the world’s problems, otherwise known as an entrepreneur, if you’re not aware of the world. Right? What compels someone to breakout and solve a problem or create an opportunity is an awareness of what the world needs. Well, if you’re not paying attention to the world how do you know what the world needs? So think of it as a part of your job, is to read. Part of your job is to have a social life.
Andrew: And by the way, I love that line too. Entrepreneur is an audacious solver of the world’s problems.
Interviewee: That’s right.
Andrew: I’ve got to ask you about one other personality, you guys backed Yo-Yo Dine, the company that Seth Godin used to build his reputation, the one that he taught us the lessons from for years. How did you meet Seth Godin? How did you back him up? Can you tell us a little bit about your experiences with him?
Interviewee: Well, it’s a great question because in another way Seth is one of the reasons why Fred and I got together. What I mean by that is there’s a guy in New York named Tom Cowan, Tom is a consonant broker of businesses. He’s probably the only person from whom I’ve bought or made an investment multiple times because he’s just, he’s very smart. He’s great with working with young entrepreneurs and Tom when I was at Ventures had introduced me to Seth with the notion of investing in Yo-Yo Dine, and I brought Yo-Yo Dine to my partners at Ventures. For a variety of reasons that investment didn’t go through, but I loved Seth and I loved what Yo-Yo Dine was all about. When Fred and I first got together we started talking about deals that we liked and the first name that came up was Seth Godin and Yo-Yo Dine and we looked at each other and said, “Okay we have similar tastes in deals, we like the same kinds of people and we’re drawn to the same kinds of opportunities.”
So Yo-Yo Dine was one of the first investments we made at Flatiron because we knew going in that that was one of the best deals out there in the market place. And, of course, I think it was a year, or perhaps two years later that, Yoyodyne was purchased by Yahoo. I forget the purchase price, but it was a very good return on investment for everybody including Seth.
Andrew: Today Seth is a marketing guru. Back then he was just an entrepreneur. What was it about him, the young Seth Godin, that attracted you?
Interviewee: He’s still young [laughs].
Andrew: [laughs] But back then he was really young.
Interviewee: Can I argue with your premise?
Interviewee: Because the premise of your question is that somehow he has changed. Actually, he’s just become more refined as who he was. If you go back to what Yoyodyne was, Yoyodyne was an embodiment of permission marketing, and this is so typical of Seth.
He’s not just the kind of guy who’s going to opine thoughtfully, but he puts his money where his mouth is, and he starts businesses. Squidoo is another example of that. He believes in a theory. He believes in a position. And then he tries to manifest it, and I think that’s what gives his marketing “gurudom” credibility.
Andrew: Yes, one of the things that I admire about him is, and I’ve told him this when he and I chatted the way you and I are doing now, I said I love how when he has a book with an idea on marketing, he uses that idea to market the book.
Andrew: Like you said, puts his money where his marketing speech is.
Interviewee: That’s right. That’s right. Or, to put it in another way, he’s testing his ideas all the time. I love Seth enormously. He is constantly generating new ideas.
Andrew: But was he…
Interviewee: It must be very difficult to be Seth [laughs].
Andrew: He loves it. Like you said, he’s one of those people who’s living his life, and his business is his life. His thoughts must constantly be coming to him, his business ideas. But, what am I trying to get at here? I just lost the point with him.
Oh, was he still preaching then? Was he at the time saying, “This is where I see marketing going online. This is how I see the future working. This business is the embodiment of those thoughts.” Or, did he just say, “Hey, guys, I’ve got this great idea for a business.”
Interviewee: Oh, I don’t think Seth every really lacked for confidence in his view of the way things would unfold. I would never say that he was preaching. That has a negative connotation to me.
Andrew: I should have said teaching, if I said preaching.
Interviewee: After the Yoyodyne investment, and after Seth spent his year in Purgatory working for Yahoo, he came back to New York, and in those days, at Flatiron, we had a bunch of people who would just come in and sit around. In a venture capital firm, the Monday partners’ meeting is the defining meeting. Everything happens during that meeting, and Fred and I had a philosophy of just inviting lots and lots of people into our process.
In fact, the roots of that go back Jason Calacanis in to just talk, just to be a part of the process, because we were just always interested in interesting ideas. And Seth had some of the most compelling ideas of anybody, some of which proved out to be wrong, and some of which proved out to be right. And on the whole, he’s been more right than he’s been wrong, with a lot things.
Andrew: I’ve got to say one more thing about Seth Godin before we move on. The reason you and I are doing video I can contribute to Seth Godin. He was the first person to do a video interview with me. I said, “We’ll get more attention if we do it by video instead of audio.” He said, “Let’s give it a shot.”
And he didn’t see my past work before. He didn’t say, “OK, this is a guy who knows how to work the camera, knows how to do the editing.” He just went for it, and because Seth Godin did it, really, nobody else resisted the idea. They said, “Seth Godin’s on there. That’s the way it works.” He blessed it. That’s the way now you and I are communicating. It changed everything for me. I love that guy.
Interviewee: I have to confess. I didn’t even know that you had interviewed Seth, and I tried to go on to your site yesterday, and it was down.
Andrew: Ah, yes.
Andrew: It was, like, half an hour it was down, and it happened to be the half hour you went on. I’m sorry. Today, it’s not even necessary. In the early days, to say Seth Godin was on and show a link got people to trust the process. Today there’s enough of a history that people trust it.
One more person that you mentioned who I’d like to talk about and then move on past this section of your life – Jason Calacanis. There’s a bulldog. There’s a guy who will work nonstop.
Interviewee: No pun intended, right?
No pun intended because of his dogs…
Andrew: Yes, he has bulldogs who I’ve told him in person he hasn’t clipped them, they’re bulldogs who are able to mate, so they’re aggressive too, just like him…
Interviewee: I’m sorry I interrupted what was your question?
Andrew: What was it about him that was compelling, i’m trying to get a sense of the ideas that draw you in and the ideas that help your thinking.
Interviewee: OK so, I met Jason when I was still working at Atventures and what had happened was Lycos had bought a company called Point Communications back in the day they had come up with this notion, a guy named Chris Kitsee had come up with this notion of awarding website with what was called the “Top 5% Batch” it’s was a brilliant marketing tactic, you click on the badge and it drove traffic back to point, it was a way to create a directory, of course the top 5% of all websites was an enormously large number.
But, I was in the office and I forget how Jason and I first met, but he came into the office and he was carrying Xeroxed copies of a magazine, a “zine,” that he was trying to produce that was sort of a knock off of something like Starlog, sort of a geeky science fiction thing, and when this kid—because he was a kid at the time—I guess I was a kid at the time, he walked in, honestly he reminded me of me, he had a relatively thick Brooklyn accent, you know it was a badge of honor from my perspective, and he was just tenacious, and kind of lost, wasn’t really sure of what he was doing, and I just loved him, immediately. And we began having him, and then you know Fred and I went forward with FlatIron, and I think I introduced him to Fred or he may have met Fred through Nimba the NY Newmedia Association. Anyway he started doing some work with us, now Hue will take credit for Geocities which is insane because Adventures had actually made an investment in Geocities before him, but he really helped us write the investment memo that convinced our partners Chase and SoftBank to invest along of us in Geocities, and he worked with us on a number of different areas and then he turned that sort of mimeographed xeroxed thing into the first editions of Silicon Alley Reporter which he would hand deliver and drop off in bundles which then became the magazine and then he became a star-maker and the rest is history with Jason.
Andrew: And today he’s running his own interview show talking with entrepreneurs called This Week in Tech which I was on, of course he’s running Mahalo in edition to doing a billion other things and he’s got a baby on the way…
Interviewee: He’s going to be a dad soon!
Andrew: I’ve watched you guys talk back and forth about it on Twitter. OK a lot of us who were in the industry in the early days are affected by the bubble burst.
What was it like for you, you were investing in companies in a world that was falling apart, what was it like for you, and how did it shape you?
Interviewee: When the bubble burst which was really, I remember getting a message from Fred, a text message from Fred in March of 2000 I think it was, and I was on a family vacation in Washington, and he said something like you know“The world has collapsed, the NASDAQ is down 500 points or something. The next two years was particularly hard, and it was hard for me personally, I actually went into a fairly major depression which in a sense was fine because it ended up being, taking to where I am today, but the bursting of the bubble, you know I think it was in 1998 I wrote an article, an opinion piece for the Times…Ktel, do you remember them?
They would advertise on television and they all had these somewhat crappy music compilations, had gone public and on the strength of Ktel.com had had this incredible run up, and I remember writing that this was a really bad situation because what it was going to do was it was going to taint really powerful and important companies when the bubble burst, inevitably. And you know, two years later we had the burst, and that’s in fact exactly what happened. Anything that was Internet related became. And so it became emotionally, personally a very difficult time. It was that time though, Fred and I wound down FlatIron as an active investing entity, I took a position with JP Morgan which had ended up owning a relationship with FlatIron, but it was during that period that all the reordering of priorities started to happen for me, that kind of lead to where I am today. I apologize I need to do a time check, I only have two or three minutes left.
Andrew: OK let’s leave it there. I’m trying to think how we can finish it, OK, today what kind of companies are you working with?
Interviewee: Well as a coach, I bill myself as life coach more than a business coach because going back to that life and business are kind of intertwined in that way. I have over, about 40, 45 clients, it kind of fluctuates as people come and go. It is in effect my sacred dance to work with people, to help them figure out who they are and what they want to do. Probably a third of my clients are first or second time CEOs of startup businesses and a big part of what we cover is how do I deal with my crazy investors and my crazy board of directors. I was meeting with a client just this week on Tuesday and he was going through, the topic of conversation was an upcoming board meeting which, quite frankly he dreads his board meetings, he says they suck, so what we did was I sort of took him through 30 minute training of how to run a really effective board meeting, more importantly how to get the most out of your relationship with your investors. Because you know, it’s your responsibility, to run that meeting and to make sure that what’s happening is that you’re getting the value that you need from your board of directors. That’s not to say that of course there aren’t crazy ass boards of directors, and the line I often use is I’ve never seen a board of directors guarantee a company’s success, but I’ve seen it guarantee its failure. And so managing that becomes a big topic of what I do.
Andrew: And do you only work with companies that are funded already, or I know we met through Dan Putt who doesn’t even have a business yet, do you also work with people his size?
Interviewee: I don’t just work with companies, about two-thirds of my clients are actually, hire me directly as individuals, and I work with them, there might be someone like Dan who’s trying to sort through what his entrepreneurial ideas are, it might be you know someone who’s slightly older who’s hit the wall, and had that burnout, and is trying to figure out what the next thing to do is. I’m looking around for my businesses card if I could show you, can I go get it?
Andrew: I would love it, yes. This is kind of cool, I love it when people come here on Mixergy and give out their personal information, I’m guessing that we will get his contact information off that business card too, I’m always surprised when we do these interviews and the interviewee the guest will give out his cellphone number in the interview or an email address.
Interviewee: OK this is what I wanted to show you, you recognize this artist?
Andrew: It’s coming, yes, I interviewed him, there’s Gaping Void.
Interviewee: Huma Cloud, that’s the back of my business card…
Andrew: Anyone anyone who didn’t see it because you’re listening to the audio, it just says “Now What” right?
Interviewee: Right it says “Now What” with a little guy who’s screaming, and for me that’s the key marketing moment, that’s the key moment when hiring a coach is really powerful. It’s the… “Oh shit, I just got fired, I just got promoted”
Andrew: Alright, well I’m going to give people a way to connect with you on the post where I put up this interview, for now I know you’ve got to rush. So I’m going to say thank you to you, thank you to everyone who’s watching us. I want your feedback on this interview, and on all the work I do on Mixergy. Come back to Mixergy and give it to me in the comments, or send me a direct email. I will find a way, lots of ways probably, for you to connect with Jerry. And click around Mixergy – [there are] tons of other interviews. Thank you for watching, or listening. Bye everyone, for now. Jerry, thank you, this was incredible, I want to spend the whole day with you! I had to force myself to stop! Especially listening to the old stories.
Interviewee: Well, I appreciate your interest in them; I know I can get a little long winded at times. We can talk –
Andrew: Not at all! I would do this all freaking day – I love you! And we only met for like an hour.
Interview: Well anytime you want to do a follow up, I’d be happy to do that.
Andrew: I would do a follow up every week with you, so don’t say that unless you mean it.
I’d be happy to talk with you. As you can tell, look, I love looking at these questions. As I said before, you know, we spend so many hours of our day manifesting as business people, and I think that if we can get that piece right, we can, you know, be happier. You know, I’m a Buddhist, which we didn’t even talk about.
Andrew: And I had it in my notes, too, and we didn’t get to it. I had a lot in my notes we didn’t get to.
Interviewee: And one of my friends, I was having a conversation with, and she said, you know, “So what’s the point of this Buddhism? You know, you’re going to spend all this time and, you know, you’re sitting there in meditation. What do you think, you’re just going to be happy? I mean, what if everybody’s just happy?” And I just smiled, just like you’re smiling right now. It’s like, “Yeah, so what if everybody’s just happy?” I mean, that’s such a bad thing? You know? And that’s kind of what I want to do. It’s not that I want to make everybody happy, it’s just, entrepreneurs are so exciting. They’re interesting people to be around, and there just isn’t enough of a support system in place to help them. So you know, so the little bit I can do to help.
Andrew: A few years ago, I would have asked that same question: “What if everybody’s happy?” That sounds crazy to me. So we have to earn our happiness and have layers of it. The people who work the hardest deserve the most…Hey do you mind if I include this in the interview too?
Interviewee: I don’t mind.
Andrew: That little clip? Thank you. Alright, I’m going to let you go, I don’t want to take too much of your time, because we’re going to be doing a series of interviews for the rest of our lives I hope. I would love to keep talking to you. Thank you for doing this.
Interviewee: You know how to reach me.
Andrew: Thank you, bye.
Interviewee: Take care, Andrew. Bye.
– Hear stories about well-known entrepreneurs before they were well-known, like Seth Godin, Fred Wilson, and Jason Calacanis.
– See why an ambitious person might want to take a break from work.
– Learn the big mistake that many entrepreneurs make (you could be making it right now) that causes them to lose themselves.
– I’ve been adding a transcript because you’ve been asking for it. How does it look?
– What do you think of the work-life balance conversation we had. Do you think entrepreneurs need to obsess for a few years?