VCball

Celebrate Groundhog Day Every Day

Whenever I hear it's Groundhog Day, as I am sure with many Bill Murray fans, it reminds me immediately of Bill Murray's movie, Groundhog Day.  No matter how many times I see it, I still love it.   For those of you that have never see the movie, Groundhog Day "the holiday", is a non-event barely worth reflecting on, an elementary school classroom discussion memory at best. 

You might ask: what the #*$#@% does this have to do with entrepreneurship and venture capital?  Allow me to digress and change your perception of Groundhog Day.

For those of you that haven't seen it or need refreshing, Groundhog Day, the movie, (stop reading now if you haven't seen it or don't want me to ruin it or skip 4 paragraphs) is about a weatherman reporter, Phil Connors, and his reporting crew that go to Punxsutawney, PA.  The crew is covering the ironically named Phil, a celebrity groundhog.   With great pomp, the groundhog comes out to see his shadow on Gobbler's Knob, something that has been done since the late 1800s, true premise.   Phil Connors the weatherman gets pretty depressed that his whole life's ambition is now to watch a groundhog and do a weather story on whether or not the hog sees his shadow, which he does over and over each year as a reporter. 

Anyways, in the movie, Bill Murray's miserable character, Phil Connors, begins reliving the same ridiculous day, Groundhog Day, and all the things that happen that day.  Same clock radio song "But You're Mine" by Sonny and Cher wakes him up, same accidents happen, same conversations occur over and over and over again, until he can't stand it any more, and he tries to kill himself.  One one suicide attempt he actually is successful, only to find he still wakes up the next day to the same day, Groundhogs Day in Puxatawny, day after day, with the same events happening.   

At that point, after weeks and weeks, and months and months, of repeating the same day Phil decides, what the heck, with all that time, he might as well be happy, and he goes about bettering himself, and finding happiness.  Which he does, falling in love with a co-star Andie McDowell, playing Rita. Only then does he finally gets to the next day of his life, the day after Groundhog Day, to his great relief and happiness. 

Aside from the cosmic meaning of life, again: what does this have to do with entrepreneurship and VC?

Well, I think Phil the weatherman's experience is a reflection of what great entrepreneurs and VCs do over and over again to finally get it right.  They go through several stages of emotional grieving pattern when hit with a crisis: 1/ denial, 2/ anger, 3/ begging, 4/ grief, 5/ depression, and finally, 6/acceptance.  Not necessarily in that order.   But the faster they get through the cycle, the more likely they will be more successful.  Unfortunately, many entrepreneurs and the VCs that back them never make it to stage 6, acceptance.  In the end they find themselves stuck in one of the 5 prior states as their company folds around them. 

Negative events are a part of building a startup.  Products don't work.  Financing doesn't come in time.  Customers bolt or don't pay.  Key managers leave.  The economy or the sector you are attacking tanks.  The technology doesn't scale as expected and malfunctions.  Competition drives down pricing.   It's not about failing fast, it's about accepting the situation with as clear a view as possible and focus on getting to stage 6 as soon as possible.  It's not about finding blame or fault; it's about rising from the ashes like a phoenix, accepting it, and moving on to the next quickly, that makes for a successful entrepreneur in the long term.

To me, this is why having experienced managers and, yes, experienced VC investors (at least 10 years) is critical in growing a company.   The more experience, the less the turbulent day to day blowups in a startup fazes a veteran startup manager or investor, and the better they can be at contributing positive energy. 

In this business of building new businesses, and backing them, a lot of people will try to get you down, and tell you it's impossible, and to give it up, and by the way-- you suck monkey turds.  I am not saying ignore the critics, just turn it into positive energy.

The best entrepreneurs I know, founders like Sean Morgan who I backed in 2004 at Critical Media (the holding company for two very cool online video companies, Critical Mention and ClipSyndicate), have their critics.   Some of the criticism is well founded, of the business, and Sean, personally and professionally, as we all have our flaws.  But Sean accepts the criticism and moves on to build a bigger better and smarter company for it.  He turns negative energy into a volcano of positive effort, like nothing you have every seen.  And I think a big part of that motivated effort, is being able to quickly get through the normal emotions that entrepreneurs face and feed on that energy instead of being sucked dry of the positive energy. I am not saying don't have those negative emotions, but to try to channel that energy positively and quickly, and recruit partners, managers and investors that can do likewise.   

We are all human but we should all aspire to what Phil Connors did and Sean Morgan does: we should all celebrate Groundhog Day, every day of the year.    

Get a Kindle

I've been hearing about this e-newsreading and book nirvana ever since I was an entrepreneur servicing the newspaper industry over a decade ago.  The talk back in the mid-90s is how people were not going to buy newspapers but were just going to read them on a thin film of ePaper.   Like in that Harry Potter movie.   

Well that tomorrow is finally here.

Yep, it's true.  I've been playing with my Kindle for about a week now.   I am totally digging it.

For those of you who don't know (and apparently a LOT of people don't know about the Kindle outside of the techno blogosphere bubble), the Kindle is a new handheld electronic reading device with a more readable screen than your CRT or LCD screen, as it doesn't refresh, and looks more like paper.  In other words, you can read it for hours without eyestrain.

Unlike other eReaders, the Kindle wirelessly enables users to download electronic books, newspapers, magazines and, yes, blogs.    The unit costs $399; books run from $1.50 to about $10; newspapers, magazines are $10/mo about; and blogs are $1 per month about.  If you send yourself a document, it costs $.10 to have it translated to your Kindle via their service, as you get your own Kindle email account.  These content charges subsidize the wireless element so there is no monthly wireless fee. 

I think it's going to be a lot bigger than people realize.  Steve Jobs is totally missing the boat on this one saying that "40% of Americans don't read"; Americans are e-reading more now that ever before.   Between surfing the web, blogging, texting and emailing, Americans have cut their TV time down dramatically.  If you work in an office, you are mainly ereading; it's likely you are ereading right now.

Jobs is spreading FUD about Kindle is my feeling; he stragetically misled people about not releasing an iPod phone if you recall, as well as the video iPod and my guess an iBook is not too far off (hmmm... wonder who owns that URL?).  Jobs knows that being able to carry around in readable format thousands of electronic books, as well as wirelessly accessing newspapers, magazines and blogs, and being able to email yourself large documents is a killer app.   Jobs is scared that he missed the boat hanging out with the cool kids with AppleTV which has been a flop, only to be out totally geeked by Jeff Bezos.

The Kindle ergonomics are not quite right, but I'd say they got about 80% right, about what it takes to get it mostly right enough for early adopter.  You might recall that it took Apple a few iterations to perfect the iPod, and it fell down flat with the Newton, only to see Palm and RIM take that market by storm.   

Guy Kawasaki, the former Apple Evangelist, suggests a 10X is the improvement you need for a new product to really take off and replace the old regime, change the world.  Historically, the argument against eReaders is that books are sooo portable, so technologically simple, why wouldn't I carry 20 or 30 pounds of paper versus 2 pounds of electronics that can carry the library of Congress?  Come again?

There is no question that the Kindle is 10X better than lugging around 20 pounds of paper versus lugging 2 pounds of electronics.   You might ask: why would anyone lug 20 pounds of paper around, and you'd be right.   However, I can now eread the Wall Street Journal, the Financial Times, and the New York Times, anywhere-- and I don't have to choose just one.  I don't have to schlep to the book store to buy that book or audio book anymore.  And I don't have to squint at a computer screen reading blog readers.   I can look up stuff on Wikipedia right away or the Dictionary.  I travel and commute a great deal, do a tremendous amount of reading, of books, newspapers magazines, newsletters, and business plans.  As we get thousands of business plans a year, and there is so little time to get through them all this is a huge boon to me. BK (before Kindle!) I'd print them out stuff them in my bag and try to get to them.  Often I fell behind. In addition, I am finding I surf through newspapers faster, as well as get to blogs and newsletters that I haven't had the time in the past.   

Frankly, I think that there are a lot of back and knee injuries from carrying around so much weight; $399 and some monthly subscription fees (which are cheaper than the paper products!) are a lot better than back surgery or physical therapy or missed work.

Here's something else that I've noticed: pretty much everywhere I go in the subway or the train, if just pull out my Kindle, about 6-7 people are staring at me.   Over this last weekend, I mentioned the device at an extended 50 person family gathering and showed it to several people; by the end of the party, nearly everyone had come up to me to learn more. None of them had seen one, and pretty much everyone was going to get one.  With my extended family, that type of geewhiz reaction I see only with truly dramatic disruptive consumer electronics.

I think people are underestimating how much potential demand there might be.  My expectation is that Kindles and ereaders will be mainstream in 5-10 years, just as Blackberries are now.  It might not be Kindle itself that wins out, but it will be something similar.   And if you think Amazon is just going to stop at just selling eBooks, emagazines and enewspapers, you're wrong.  This is going to be a handheld shopping unit where you can order anything on Amazon anytime.  It wouldn't surprise me at all if Amazon gave these things away like the mobile cell phone carriers do cell phones now.

You heard it here first.  Get in line for Kindle, see what I am talkin' bout.