“Venture Capital Insiders” with Jeff Bussgang of Flybridge Capital Partners

Over the years, we’ve had the pleasure of interviewing many industry influencers with whom we have relationships – media, entrepreneurs, analysts and more – and we’re excited to expand further with our new “Venture Capital Insiders” series. Jeff Bussgang of Flybridge Capital Partners did us the honor of kicking things off.

Jeff is a General Partner at Flybridge Capital Partners, whose investment interests and entrepreneurial experiences cross consumer, Internet commerce, marketing services, software and mobile start-ups. Jeff currently represents the Firm on the boards of Cartera Commerce, ClickSquared, DataXu, i4cp, Plastiq,  SavingStar, SimpleTuition, tracx, and is a Board Observer at  ZestFinance.  He was previously a Director at Brontes Technologies (acquired by 3M), BzzAgent (acquired by Tesco), Convoke Systems, go2Media, oneforty (acquired by HubSpot), PanGo Networks (merged with InnerWireless), Ready Financial (merged with AccountNow), and Transpera (acquired by Tremor Video).

Jeff’s book on venture capital and entrepreneurship, Mastering the VC Game, is an insider’s guide for entrepreneurs on financing and company-building. The book has been hailed by the Wall Street Journal, BusinessWeek, TechCrunch and The Financial Times as an essential guide for entrepreneurs.

Jeff serves as a Senior Lecturer at Harvard Business School and teaches a class on entrepreneurship and lean start-ups called Launching Technology Ventures.  He has co-authored three HBS cases that are taught in “Founder’s Dilemma” (Curt Schilling’s Next Pitch) and “Launching Technology Ventures” (Foursquare and Predictive BioSciences).  Jeff is also the co-author of “Ruling The Net,” a 1996 Harvard Business Review article on the Internet’s potential for commerce.  He is also on the Board of MITX, the Massachusetts Innovation and Technology Exchange, and is a Founding Executive Committee Member of FirstGrowth Venture Network, a network of venture and angel investors supporting first and second time entrepreneurs building exciting companies in the New York area.

Jeff’s popular blog on helping to demystify the venture business for entrepreneurs, “Seeing Both Sides,” can be found at www.SeeingBothSides.com, which is syndicated by BusinessInsider.com, Reuters, PE Hub and others.  You can follow Jeff on Twitter @bussgang.

How is the VC climate different now than it was 10, 15 years ago?

There are two new phenomena that impact the VC climate as compared to 10-15 years ago.  First, entrepreneurs require less capital than they used to – thanks to the declining cost of technology, the cloud and the application of the Lean Start-Up methodology.  Second, new companies are able to accelerate their growth much faster than ever before, thanks to global broadband penetration, the cloud and the social fabric that connects consumers and businesses.  As a result, seed investing has also proliferated as a method to get connected to young start-ups early in their development, and growth equity investing has become popular for companies that achieve product-market fit and have the privilege of scaling fast.

What makes Boston’s VC climate unique?

Boston is the second strongest entrepreneurial climate in the world after Silicon Valley and arguably the most diverse and dense.  With its deep information technology roots, burgeoning health care industry and emerging energy sector, Boston has emerged as one of the hot spots for entrepreneurs and investors alike.  As a result, every major technology company is either headquartered here (e.g., “anchor companies” such as Akamai, EMC, Thermo Fisher, Vertex) or has a large presence in the region (e.g., eBay, Google, IBM, Microsoft, Oracle).

Any advice for the first time entrepreneur seeking institutional investment? 

The odds are against you – most VC see hundreds of opportunities for every one that they invest in – so recognize that you have to have something special to attract institutional investment.  Make sure you do your homework before approaching an investor.  Entrepreneurs seek money once every few years, but investors are pitched by entrepreneurs every hour of every day.  Thus, there is an information asymmetry that entrepreneurs need to work hard to overcome.

What makes your book, Mastering the VC Game, an insider’s guide? What’s different about the advice you give vs other insider guides?

I think entrepreneurs have found the book valuable for three reasons.  First, it’s written by a practitioner.  I’m an active investor, not an author or consultant, and so my perspective comes from being engaged in the business for a decade.  Second, I used to be an entrepreneur, so I have empathy for their struggles to build and fund a company because I’ve been there myself.  And I know what information I would have wanted back when I was an entrepreneur.  Finally, I interview over a dozen VCs and entrepreneurs – folks like Twitter’s Jack Dorsey and LinkedIn’s Reid Hoffman – to explore their case studies and wisdom.  This mix of an informed, personal perspective and compelling case studies seems to be what is resonating with entrepreneurs.

You teach at Harvard as a Senior Lecturer at Harvard Business School. What do you learn most from your students that helps you navigate the VC world? What are their biggest challenges as aspiring, upcoming business leaders?

I learn a tremendous amount from my students – it is very much a two-way street.  They give me great insight into what’s hot in the market, what the latest trends are and what some of their biggest challenges are.  At the macro level, their challenges are similar to all entrepreneurs – finding a unique, differentiated market opportunity and marshalling the capital and human resources to pursue it.

Talk a little about your co-authored HBS case study that is taught in “Founder’s Dilemma” (Curt Schilling’s Next Pitch) - where did 38 Studios go wrong? Did they? Was it the RI business climate?  How will it – or did it already – change the VC landscape moving forward?

The Curt Schilling case is one of the most interesting I have worked on.  Curt was trying to do two very ambitious things at the same time.  First, he was trying to build a hugely valuable business from scratch in a super-competitive field.  Second, he aspired to personally transform himself from being an All Star baseball player to becoming an All Star entrepreneur.  Many professionals attempt personal transformations and so Schilling’s efforts, which were so dramatic, provides great lessons for entrepreneurs in this area.  As for what happened to 38 Studios and the situation with Rhode Island, I’ll leave that for a future case.

How does the VC environment differ from the East Coast to the West Coast?   What are the challenges in navigating the differences?

The differences are more modest than many observers try to make it and there are many East Coast VCs who are investors in West Coast companies and vice versa.  Both markets are very competitive, but the West Coast is probably even more competitive, as there are more investment professionals managing more capital.  As a result, the deals can be pricier than East Coast deals.

Did you want to be a Venture Capitalist when you were a kid? What led you to this career?

No, I wanted to be an entrepreneur when I was a kid.  I had never heard of venture capital until I came to business school and met a few firms.  When my partners started Flybridge and asked me to join them in founding the firm, it was too good an opportunity to pass up.

What is next for you for the remainder of 2012?

Whatever my investors, partners and portfolio company CEOs tell me to do!  They are the customers I serve.

“Influencers Who Inspire” Interview with Ari Herzog, Digital AH

As we continue to connect with influencers within the industry, we’re delighted to share an interview with Ari Herzog, Digital Media Strategist and Principal of Digital AH. As a digital media strategist, Ari Herzog provides services in auditing, marketing, and training (http://digitalah.com). A former columnist for Mashable and the Huffington Post, Ari explores new and emerging media on his 5-year-old blog at AriHerzog.com. He is also President of Social Media Club Boston and a 2-term elected city councilor in Newburyport, Massachusetts. Tweet him at @AriHerzog.

You are an elected city councilor.  What role do you feel social media played in the election process?

“I want to be the first Jewish President of the United States,” I told Mrs. Stockus in third grade when she asked the class about our future aspirations.

While I no longer have desires to run the country, I do enjoy local government and ran for elected office as a city councilor in 2009.

Integrated with neighborhood mixers, candidate debates, newspaper interviews, and yard signs, social media played a big part. I blogged, Facebooked, Tweeted, started an email newsletter, and uploaded a few videos. They were all a hit — and residents were excited to meet me in person after reading my blog or receiving my emails.

I continued to use the web during my first two years as a councilor — and people began to appreciate my prompt response times when they emailed me. They told their friends about me, and their friends subscribed to my civic blog (http://councilorariherzog.com) or liaised with me through other media.

My passion for the web and my sincerity to connect with residents helped me win re-election to the council last fall. I’m currently serving my second term. You can listen to me elaborate on some of my campaign tactics in a government radio podcast  recorded in the days after my first election.

You have a diverse background and wear many hats. Which role do you find most rewarding and why?

My favorite hat is the political one, being a city councilor. While I’d worked in both state and local government previously (and earned much more money than the $5000 I receive every year as a councilor), my 2009 election was proof — to me, more than anyone else — that I could do anything I wanted to do, including reaching for that political gold ring I fantasized about in third grade.

I choose to do business as myself and not work full-time in Corporate America. I’ve been there, done that, and, while I may return to a full-time job someday working for someone else, I like being my own boss as a digital media auditor and digital marketing instructor. I like awaking on my schedule and deciding when and if I want to go the gym or take a walk. I enjoy networking with other people and I’ve discovered how to perfect my elevator pitch so the other person instantly understands what I do and how to help me.

As a college instructor, what is your overall goal in terms of teaching your students? As they complete their coursework, what is the one major element you hope they have learned/gained from having you as a teacher?

Among the ongoing courses I teach (http://ariherzog.com/teaching) is a 4-week interactive course on social media marketing. My syllabi include the following course objectives:

1. Introduce core concepts of social media including interactivity and relationship building.

2. Increase awareness of how social media can help organizations enhance their objectives.

3. Learn the importance of listening and the best ways of doing it online.

If a student walks away with one new fact or tidbit that was unknown when sitting down, I did my job. If the student walks away with three or more facts to help improve Internet knowledge or online productivity, there is nothing more to make a teacher proud.

Where do you find inspiration for your blog posts?

I used to write at AriHerzog.com every day — inspired by social bloggers in my RSS reader such as Danny Brown, Kristi Hines, Phil Gerbyshak, John Haydon, Louis Gray, Mark Schaefer, Shelly Kramer, and others.

While I still read their blogs and am inspired to comment or socially share, I lack the desire to take something they wrote and either echo it or re-slant it on my own blog. I am also trying to write less about the “what” or the “how” and more about the “why” of new and emerging media. For instance, I recently opined why sole proprietors and freelancers should consider deleting their Facebook pages, and as you can gauge by clicking the link, people are engaged to respond.

I am reading Gip Plaster and Farnoosh Brock more frequently these days, enjoying their blog posts on smart living and improving your life.

What is your “ideal client” (if you could hand pick one) for Digital AH?

Cookie Monster’s spoof of Carly Rae Jepsen’s song “Call Me Maybe” is a great example of the social content being created by Sesame Workshop — and that is the ideology of company I’d enjoy working with in the coming months. Much of my development as a toddler, adolescent, college student, and beyond is based upon the social interactions between Big Bird, Oscar the Grouch, Mr. Hooper (remember him?), and Ernie and Bert.

While I have zero experience in childhood development or social work, I do possess a bachelor’s degree in sociology — and societal issues such as race, ethnicity, and power – which I wrote about in college papers – are coming to life every day on the social web. Kudos to Sesame Workshop for their strong usage and evangelism of social networking channels. I’m sure there are countless TV shows or producers wanting to use the web to promote their versions of Big Bird and Oscar. I’d really like to help them.

What is next for you in 2012?

I will teach my first digital marketing course to MBA students at Endicott College this fall.

I’m reaching out to government technology vendors to partner with them in digital marketing areas.

I am stepping up my schedule of submitting proposals to speak at conferences in New England (and around the country) and am hopeful their organizers like my ideas.

And, there are some other surprises I can’t talk about yet!

 

Persuasive Picks for week of 9/3/12

The balance of power in B2B public relations has shifted. No longer does the media hold all the cards, although they are still important influencers. Fast Company writer Wendy Marx provides some Best Practices In B2B PR to consider as the B2B public relations ecosystem continus to evolve.

B2B marketers have one of the most difficult and underappreciated jobs on the planet. Their mission is to create memorable brands out of some downright “unsexy” products. How do they do it? MarketingProfs‘ Russell Glass explains that the best B2B marketers are successful because they start with building a brand in How the Best B2B Marketers Think Like B2C Marketers: Five Strategies to Emulate.

Using social media correctly is like putting your Rolodex on steroids. Perhaps the best thing about using social media is that it allows you to communicate with all of your contacts at once through status updates. But Melinda F. Emerson at The New York Times warns there are some important lessons to learn and gives some insights on How Not to Pitch Your Business in Social Media.

Are you one of the many marketers who launch their social media programs because they feel they need to and then scramble to understand both how they will make these work and how they will be managed? Online marketing veteran Jasmine Sandler urges you to stop chasing your tail and start Your Social Media Marketing Plan in 5 Easy Steps via ClickZ.

Top 10 Do’s & Don’ts: A PR Executive’s Crib Sheet

It’s easy to play up the adversarial relationship between “Hacks” and “Flacks,” but the truth of this perennial love/hate relationship is that that we really do need one other. Although the value of PR professionals to journalists is often called into question, as this article points out, “the popularity of services like HARO and ProfNet should be proof enough that journalists have a need for PR professionals.”

That said, as PR professionals, our jobs are two-fold: Not only are we advocates for our clients, but we’re also here to make life easier on our journalist comrades. Between a non-stop news cycle, scary budget cuts and mounting competition for clicks, there’s a good chance they’re working in a pressure cooker environment, so the best thing we can do is to think from their perspective and assist rather than annoy. After all, it comes down to relationships, and there’s nothing worse than trying to work with someone who makes your job harder.

So, without further ado, here are our “Top 10 Yeas and Nays” for better PR practices. Although some may seem pretty obvious, those are often the ones that are first forgotten.

DON’T even think about…

  1. Not doing your research/reading a journalist’s articles before pitching. Know who you’re targeting, and only send something to them that you think would be of interest.
  2. Sending a pitch via email blast. The shotgun-spray approach is not appreciated; rather, think like a sniper.
  3. Asking if you can see and/or edit an article before it’s published. This is a huge no-no!
  4. Making up a response if you don’t know the answer. It’s perfectly acceptable to say, “I’m not sure. Let me check and get back to you.”
  5. Disregarding deadlines. Your journalist friend has theirs, so make sure you meet yours.

If you want to develop good working relationships, DO try…

  1. Respecting the journalist’s preferences. If they’re an email person, and you’re more comfortable on the phone, adapt. Work their way.
  2. Keeping pitches and releases short and to-the-point (and as buzz-free as possible). Repeat after me: Less is more.
  3. Thinking about how to streamline the process. Have assets and answers ready, and be available when the reporter is writing and may have a question. (Package the story beforehand as much as possible: angle, visual content, facts, references, spokespersons, etc.)
  4. Proofread, proofread, proofread. And when in doubt, hit spell check again before sending that pitch – perhaps even send to a colleague to review with fresh eyes before contacting the reporter.
  5. Focusing on relationships. I said it above, and I’ll say it again – it’s all about relationships. They make the job easier and a whole lot more fun! For example, interact with, read, comment on, share and praise a reporter’s work that you find of interest –  not just when it’s a story about your company or client.

And, as always, there’s often no better place to hear it than from the horse’s mouth. So unless you don’t mind finding yourself mocked publicly (yep, we’re quite aware of the conversations going on here, here or here), we also suggest checking out (and heeding!) veteran reporter Rafe Needleman’s Pro PR Tips: http://proprtips.com/

Which tips would you add to the list? Feel free to share your thoughts in the comments below.