"What we want to do in the venture capital business is take a lot of risk (which should be rewarded with a low entry valuation) and then actively mitigate the risk we took as much as we can (thereby reducing the risk for future investors and increasing the valuation).

It's the same thing that entrepreneurs want to do. When they leave their safe job and go out on their own, they are taking a lot of risk. Their entry valuation should be zero, meaning they (collectively if they have partners) own 100% of the business for whatever startup capital they invest.

By the time they offer equity to new investors, they should have reduced some of the risk. By developing a product, or by developing a technical and operating plan, by attracting other talented people to the team, or by getting customers and revenues (and sometimes even profits)."

--VC Fred Wilson, writing about risk and rosk mitigation on his blog

I've spent part of the morning--and will spend some more time--updating my lifestream data to reflect what I'm up to right now. So Louis Gray asked, what am I up to?  So, here's where my attention is going to be these days:

Co-founder, People's Software Company
People's Software Company is creating a new community platform that will make it as easy to start a community site as it is to start a blog today. Even better, our tools will make community sites lively and sustainable even for small groups. It's the magic of crowds -- for smaller crowds.

I'll be writing about our start-up experiences here and on the soon to be launched PSCO blog, will share more about our products, roadmap, business model and what problems we've solving/what's different as it moves from concepts to execution.

And of course, as a TechStars 2008 company, we're getting a great incubator experience.

Evangelist, Knight News Challenge, 2008-09
The Knight News Challenge just awarded over $5.5 million dollars to  16 software development projects from across the globe that support online discourse, community dialogue and engagement, and news as an empowering information tool.

I was a reviewer in 2007-08, and I will work with the strong team at Knight to run the 2008-09 awards. Applications will open in September, and we want to have a broad diversity of great projects...more on plans to spread the word and support prospective applicants in the next few months,

BlogHer CE
I've been writing for BlogHer since the early days, and value a chance to be part of this community. Sometime, it's a stretch, time-wise, but I want these connections to deepen and continue, so I keep fitting it in, somehow.

What's off the list?
Consulting, advising, general trouble-making will have to be on hold for the foreseeable future. 
Those 22 working hours in every day just aren't going to be enough, so this is going to be working smart, prioritizing, and GTD, all the way. And it will be tough, I know that--but I am excited about our plans and the value these projects can deliver to people.

I've been at TechStars for about 36 hours; the program started Tuesday night and it's Thursday morning now. My hopes when I accepted the spot we were fortunate enough to be offered was that this would be both an accelerator for building our company and launching our idea, and a good school to learn about being a CEO and co-leader of a small business.

After 36 hours, my sense is that it is going to be both of those things (more all all that in some other posts), but it is also going to be a major journey of transformation.  After 3 months of this program, I am going to be significantly altered in what I know and what I have experienced--and that seems amazingly exciting.

Two of the themes that have started to emerge at TechStars are: "Find amazing mentors" and "Early stage VCs fund people, not ideas."

TechStars director David Cohen (who is wonderful) is the proponent of the first statement and what it means to him (and therefore to all us eager students), is Find people you click with, who have knowledge you need, and listen deeply, learn from them, and build those relationships."  We have about 50 mentors who are part of the program, mostly local (or seriously passing through) and a big part of the focus is meeting with them.  But we're also encouraged to reach beyond these folks, into the local community and into the world, letting the TechStars team help make connections, if needed.)

Brad Feld, another founder (and a bold and interesting VC), is the person who talked about how early stage VCs fund people, not ideas. According to Brad, much of  the judgments about early investments are based on feelings about the founders, the team and whether the person can deliver. Because ideas morph, both to meet budgets and timelines, but also because of user feedback on your early releases, So while having a business plan, a sense of where revenue is going to come from, and some solid data are all important, the relationships are core(at least for Bard and his circle.)

For me, this implies that part of the TechStars experience is learning how to develop ideas and run companies; while getting the right focus for our big idea and truly defining what problem we are solving--and then iterating a product solution to address these solutiuons --is key, so is absorbing this wisdom so we can do it again and again--and that feels amazingly transformative.

So, it's Boulder.

The start up that my partner and I are working on got accepted as a TechStars 08 incubator company, so we're here for the summer, working away, building the product, learning as much as we can.  We're new, we have tons to do, and this is going to be our place to make it happen.

I'll be posting daily about what I'm learning, the product we're developing, and what it's like to build a product--and a company--in this environment.

For many people, Paul Graham is an essential touch point in building a new company. His perspectives have the ring of experience--and a lot of wisdom, so I'm compiling my own list of nuggets to absorb--here's a batch of good points from the most recent post (worth a whole read).

• Release early: "Users hate bugs, but they don't seem to mind a minimal version 1, if there's more coming soon."
• Release often: "Force yourself, as a sort of intellectual exercise, to keep thinking of improvements."
• Value the users: "The vast majority of people who visit your site will be casual visitors."
• Be afraid: "You should compete against what someone else could be doing, not just what you can see people doing."
• Determination is everything. "The only way to convince everyone that you're ready to fight to the death is actually to be ready to."
• Manage your optimism: "Shielding your optimism is nowhere more important than with deals. If your startup is doing a deal, just assume it's not going to happen."

And the money quote: "Economically, a startup is best seen not as a way to get rich, but as a way to work faster. You have to make a living, and a startup is a way to get that done quickly, instead of letting it drag on through your whole life."

Brad Feld pointed to a super astute and articulate post from VC Dave Feinleib on why startups go bloey. Cheat sheet summary is (and the whole thing is worth a read):

• They spend too much on sales and marketing before they're ready.
  
• Spending on the sales and marketing operations means there is no return if customers don't bite. When you spend money on the product that work can be leveraged in future versions. (In fact, the key to effective product delivery is to try a lot of things and see what sticks.)
• The market outpaces the startup's ability to execute. In the case of the startup in a hot sector that means how fast do you make critical decisions, hire key personnel, and manage limited resources. If, on average, you're slower or less efficient than your competitors, you're very likely burning more cash than they are as well.
• There is no Entrepreneur.  But rare is the man or woman who can take an idea and transform it into a sharply defined product and then sell it to top-level prospective hires, investors and customers. An Entrepreneur as opposed to his lower-case counterpart is a product picker and a market visionary.
• The market takes too long to develop.

(Via Brad)

"I can't think of a company that I am more impressed with than Google, but they are coming to grips with the fact that "startup energy" can't be faked. There's nothing quite like going from five people to fifty or a hundred."

_VC Fred Wilson, issuing an open recruitment call to Google employees who want "something more entreprenurial."

Susan sez: I like this because a) it's probably a true observation, b) it is so amusing to see someone use the start-up story on their blog as a way to woo staffers away (who want to go, natch), c) I feel a small bubble of jealousy for the now well-fund companies Fred is doing this for--we're way more early stage and I don't have substantial real money yet to woo away Googlers, so I am both admiring and a little envious.

(And having said that, if you are kick ass FE and want to work with a very cool start up this summer, I am the woman to contact..we are early stage enough you can have a BIG impact.)

"I can't think of a company that I am more impressed with than Google, but they are coming to grips with the fact that "startup energy" can't be faked. There's nothing quite like going from five people to fifty or a hundred."

--VC Fred Wilson, issuing an open recruitment call to Google employees who want "something more entreprenurial."

Susan sez: I like this because a) it's probably a true observation, b) it is so amusing to see someone use the start-up story on their blog as a way to woo staffers away (who want to go, natch), c) I feel a small bubble of jealousy for the now well-fund companies Fred is doing this for--we're way more early stage and I don't have substantial real money yet to woo away Googlers, so I am both admiring and a little envious.

(And having said that, if you are kick ass FE and want to work with a very cool start up this summer, I am the woman to contact..we are early stage enough you can have a BIG impact.)

In two weeks, I move out of the Silicon Valley area for a brief stint and head for the next great adventure. The work it's taken to get to this moment and the degree of focus getting a start-up into even a semblance of operating mode is considerable, and I feel like the longer, more reflected and crafted pieces I wanted to--and occasionally wrote and published--on this blog, have suffered.

Instead of commentary on social media, it's been tasks, chores, logistics, errands, recruitment, funding, operations, moving--all the time, pretty much (with some writing specs and planning).

Even my reading has narrowed down alot more into the startup stories--Hacker News is my new best friend.

So starting this week, I'll be doing more blogging about where leaving Yahoo has led me--to starting a new company--and about the start up experience in general.  My intent is to chronicle what happens to us over the next four-six months. I want to capture the experience of pulling a team together, creating a plan and a product, and share some of the stories of winding our way through the funding and focusing process, getting to alpha, and making real quality execution and value happen.  I've started alot of businesses, run my own consulting company, and been an exec building value at a number of big companies--but this is my first run at a true start-up--and the engines are reving now.

Meanwhile, I know many other people have knowledge and experience to share. So, iff you have great reading, great resources, or stories to share, please post in  the comments, or ping me directly...thoughts, comments, etc. welcomed.

So we're creating this start up, see. And my co-founder and I live in different places.

And while we're be together for a chunk of time very soon, we're not now. So we have these looonnnggg telephone conversations about everything: the product, the use cases, the solutions, the tech innovation, the coders, how we will make money, what we will build and in what sequence, why we'd do it that way, why we wouldn't do it that way, and on and on.

What is interesting to me is that three things are happening as we hammer away at all this--really, as we hammer away at everything.

A) We're norming one another to a common view of our business and our products; ie talking it out makes it clearer and we speak the same words/share the same vision.

B)  We're learning how to communicate on a deeper level--we've been friends for a while, but we've never done something this bit together--and we're still getting one another's styles.

C) We're figuring out what's the  right story, the right set of paradigms to describe what we are making, who is is for, and what problems we want to solve.

And C is just the most interesting place to linger, because it's where we align our vision with what we want to tell others, with the competitive landscape and with the paradigms and metaphors that will make our story come alive.

The story we're telling isn't unified yet, which mean it isn't completely right, but it's exciting as hell to get the process (along with about 90,000 other things) truly going.

"How do you know if you're in over your head in a healthy way as compared to an unhealthy one?  One entrepreneur gave me a good rule of thumb for this just yesterday.  He suggested that entrepreneurs follow an 80/20 rule - they should always feel in command of 80% of the business, but feel way over their head 20% of the time.  It's that 20% stretch that makes it fun and challenging. "

--Boston VC Jeff Bussgang, writing at Seeing Both Sides, about the stretch running a company can create--he's got some good coping suggestions as well.

"Free is the next disruption.  Like all platform shifts, it begins as a small but structural change in the economics of adoption. It ends with the re-alignment of the market, with a couple of survivors, and many more new entrants."

--Peter Rip, Early Stage VC, writing about how cloud computing, Google Apps as a free provisioning environment, etc. is disrupting economic models for infrastructure, frameworks, hosting, scaling, etc.

So, now that I am starting a company(more specifics on that later, and with a great partner), I've got an amazing number of things to balance. There's the ideas, the plans, the people to work with, the timetables, the costs. And then, on the other side, there's the budget, the funding, the roadmap..all those things that take resources and dollars.

In my usual fashion, one of my ways to learn is to talk with people about their experiences starting companies (thanks, you know who you are), what they learned, what they wouldn't do again. And then there's my time honored exercise in reading as a means to knowledge. I've been rooting around, looking at entrepreneur's blogs, founder's blogs, VC's blogs, and all sorts of other resources.

And here's what I learned: There's a hellofva lot I am going to know six months from now, I don't know today. But if I don't find a way to manage the info flow, I am going to a) drown and b) interrupt all the stuff I really have to do to get our idea going.

How do you balance getting critical things done/momenteum with absorbing information? What's your style? Comments here, or elsewhere, welcomed.

This is a picture of the most recent ycombinator Start Up School at Stanford. Take a good look. Seems like it was a great program.  Anyone able to tell me what is wrong with this picture? Post in comments, please.

I'm still waking up, but this is a great post by one Hank Williams, whydoeseveryhingsuck?:

"It is entirely possible that before Twitter makes its first penny, it will become too important to exist in its current form, and the community will feel it has to be replaced by an open source distributed framework. This should strike fear into the hearts of anyone who decides open their API. While the Open API strategy has clearly worked in terms of adoption, it may have worked too well. In fact it may have worked so well that Twitter may be killed before it has even really made it out of the womb, by people that find it so important that they can't afford to really have it be a company."

I don't think this is going to happen to twitter, but like the concept of Open API perhaps not being enough as a big worrier for any developer.

Also think this is a good articulation of a higher-order problem.

" Smart people will find big markets."

--Developer, VC legend and YCombinator co-founder Paul Graham, discussing what makes a start-up successful (clue: it's the people, their skill & persistance.)