A Benign Addiction

The holiday period is a tricky time for me, presenting too much opportunity to fall off the wagon...

My addiction started one day with a thought experiment. Until the age of about 26, I had found even fresh grapefruit juice too sour to drink. And yet, when served a half grapefruit, I always loved to spoon out every drop of the succulent citrus. Why did I have such opposite reactions to different presentations of the same food? I conducted an experiment to test the impact of expectations on taste--I closed my eyes and imagined that the juice in my glass had been spooned out of a fruit that very instant. I sipped it ever so slowly, as I would from a spoon, and the result was literally sensational.

From that day on, I had to drink grapefruit juice with every meal. The best juice, of course, flows directly from the grapefruit--freshly squeezed at time of consumption, but Who Has Time For This?

So I came to learn the intricate differences among retail brands of juice. Now, each batch of juice is unique. The color ranges from yellow to pink, the taste from tart to sugary, and the texture from thin to pulpy. I have my preferences, but also know that there is a time and place for each vintage. Sweet, pink, and pulpy juice can be breakfast all by itself, whereas thin, tart, yellow juice really hits the spot after a workout. But variety only goes so far--I wouldn't ever recommend drinking any grapefruit juice that is made from concentrate, or that smacks of the taste of rind, or that doesn't taste super fresh (older juice tingles from the onset of fermentation).

I came to frequent restaurants (like this one) that offer fresh-squeezed juice. And with one taste, I could instantly tell you if it was really squeezed that morning, or squeezed the day before, or store bought, or actually made from concentrate. And if the juice was store bought, I could easily distinguish the different retail brands--Tropicana, Just Squeezed, Odwalla, etc.


In time my preferences became so strong that the only commercial product I could stomach was Odwalla. Delightfully, each batch of Odwalla had a different color, sweetness, thickness and freshness, and I came to open certain bottles for certain meals or occasions based on the look of the juice, or the date (once you sampled a batch, every juice from that date was the same).

I know I sound crazy, but am I really any different than the wine enthusiasts you know, who relish the juices of a different grape fruit?

At the peak of my addiction, I was consuming well over half a gallon per day. If supplies ran out, cravings compelled me to immediately shop for more. When I found myself cruising for Odwalla in the 24-hour Safeway at 2AM, I knew something was wrong with me.

So I confessed the addiction to my doctor and sought her guidance. Her response: grapefruit juice is good for you--if you're going to crave something, you might as well crave grapefruit juice. (Her only caution is that grapefruit juice can dangerously accelerate absorption of certain medications.) Blessed by science, I surrendered to my whim.

But as I neared the age of 31, my supply went bust. E-Coli bacteria infected a batch of Odwalla apple juice. EPA tests at the factory turned up negative, but somehow many children became ill, one fatally so. To protect its strong brand (and, I think, to do the right thing), Odwalla responded quickly and openly to address the problem. With FDA guidance, Odwalla inserted multiple inspection points and began to pasteurize its apple juice. But alas, in their zeal to restore their good name, the folks at Odwalla decided to also pasteurize citric juices, in which the threat of e. coli infection is only theoretical.

That day, my only source of high-quality commercial juice dried up. Forced into withdrawal, I adjusted to life with only an occasional glass of the home-squeezed nectar.

Except... on lazy, rainy, holiday weeks like this one, I find myself at home with enough time, fruit, and helpful children to re-kindle and satisfy the urge.

...I think I'll go squeeze some right now. L'Chaim!

UPDATE May 9, 2006: Scientists isolate the molecule in grapefruit juice that increases absorption of drugs.

The Truth Behind Visto's Lawsuit Against Microsoft

Many press reports and blogs in the last week have implied errors in their coverage of Visto's legal action, including the notion that Visto is suing Microsoft for patent infringement using the intellectual property that Visto had licensed the day before from RIM antagonist NTP. Though I haven't been involved in Visto for many years, I do know that Microsoft is actually infringing Visto's own, original patents--I know this because at least one of those patents has my name on it.

In late 1995, I attended a Network World trade show where rows of net-connected PC's had been set up for use. These PC's were running on the same large TCP/IP network as my PC client at Bessemer as well our Exchange server, and yet there was no way for me to access my corporate email and calendar. As I thought about the problem, pondering the range of computing devices that would ultimately participate in reading and writing email/PIM data, I concluded that we'd eventually need virtual desktops to synthesize and synchronize the workspaces instantiated in each device.

So I recruited the assistance of Daniel Mendez, a technologist I knew from the Harvard Computer Science Department (and now a board member of Kepler's), as well as a team of developers recruited mostly from Sun (starting with Chris Zuleeg, now at eBay). We searched exhaustively but unsuccessfully for known commercial technologies to solve this problem. So we specified and crafted our own solution that anticipated the widespread use of disparate fixed and mobile devices, and addressed many challenges, such as synchronizing through corporate firewalls. In mid 1996, with funding from Bessemer, we incorporated Visto (called RoamPage back then) to develop and sell the technology as a service (first reviewed here in 1997). 13 of us had worked in a single room (plus a smelly toilet closet) behind a flower shop in Mountain View to develop this service--our only assets were 17 computers and a very well used futon. But in the coming months we filed broad patent applications that were subsequently granted.

It took years (frankly, more than I expected) for the wireless platforms to develop the processing, storage and bandwidth Visto needed to extend the virtual desktop to mobile users, but finally (after $150 million+ of venture capital) Visto leads a robust market for device-agnostic synchronization of email/PIM workspaces.

But now that the market is finally maturing, Microsoft is doing what is does so well--bringing products to market based on other companies' technology. Microsoft does indeed have a good track record of enhancing established products--I certainly prefer Word over Wordstar, Excel over Visicalc, and Access over dbaseIV. And if Microsoft can improve upon mobile PIM synchronization, I'll be the first to subscribe, but they can't expect to infringe upon issued patents without attracting lawsuits.

That's why Visto licensed NTP's patents--to respect others' intellectual property. NTP's patents are not cited in Visto's lawsuit. NTP, in turn, invested in Visto because of Visto's growth and intellectual property--not, as some have reported, to financially prop up a licensee. Believe me, prior to the NTP deal Visto was already very, very well funded (as one must be to keep step with Microsoft's lawyers).

I expect 100 comments on this post decrying the evils of patent litigation, but I am here to bear witness that these patents were not crafted by a bunch of attorneys in order to pick deep, corporate pockets. These patents were written by programmers who were engaged in building a viable, commercial platform, and genuinely wished to protect the invention.

As an informed insider, there's one last thing I can tell you about this lawsuit: Visto is going to win.

Profiling: A New Approach to Desktop Security

Speaking of the limits of rationality, often it is ignorance, not brain structure, that impairs the quality of our decisions. Sometimes we simply need to get a little expert help. That's why Bessemer (led by Rob Stavis of Skype fame) incubated and funded SiteAdvisor, a security startup with a fundamentally new approach to defending the flock of internet users from hungry predators...

A flawed premise characterizes the plethora of internet security technologies--a mismatch that fuels the growing scourges of spam, phishing and exploits. The flawed premise is that Users will be secure if they have the data to decide for themselves whom to trust.

Thanks to this superficially compelling idea, we have applet signatures, SSL certificates, 30 page online license agreements, and pop-up warnings when we are "about to enter an insecure website." Do any of you really stop what you're doing because of obscure language in an online license agreement, or because a pop-up window alerts you that an SSL certificate has expired? We all know what really happens, with the inevitable consequence that we are spammed, phished and exploited.

The idea that more information protects us springs from early technologies like PGP that relied on a rudimentary social network to convey trust. For a small community of 10,000 programmers who actually understood the details of public key encryption, PGP worked well. But for a billion internet users bombarded with technical jargon, too much information annoys far more than it defends. Sometimes fewer options are better (see prior post on the negative value of options when decision-making is sub-optimal).

SiteAdvisor tackles the problem of internet security by offering expert recommendations while you surf. For example, maybe you don't really want this Google search result, because that web site links to a lot of malicious sites (see icons added to the search results on the right). Er, are you sure you want to enter your real email address in this form? If you do you should, based on our tests, expect 254 emails per week in your inbox (see second screenshot)...

In a sense, SiteAdvisor extends the functionality of Websense, going far beyond content analysis. For example, SiteAdvisor's software analyzes the impact on your desktop from downloaded code, the security of pages referenced by hyperilnks, and the number of messages you should expect from sharing your email address. You can read a comprehensive review of SiteAdvisor in an article published today by Ben Edelman at Harvard titled "Deciding Who [sic] To Trust". Screenshots that illustrate the depth of SiteAdvisor's analysis are available here.

Profiling may be a dirty word in US airports, but it is widely hailed as an effective--and even critical--security mechanism. SiteAdvisor elevates reputational internet profiling to a higher level by encompassing all the elements of a web site--not just the public key, URL, IP address, or applet cert.

Personally, I will feel much freer to explore the back alleys of the net with a bodyguard watching my back.

Update: A preview version is now available here using the login "websafety" and a blank password.

Limits of Rationality: Beware the Paralimbic Cortex

My prior post featured a game theory question from my undergraduate Economics mid-term that illustrated, if nothing else, the practical dangers of applying rational logic to real world economics. While it's fun to ponder the fate of the sheep, who among us would actually take the little lamb's place, shielded only by the recursive logic that promises safety in large even numbers of rational yet ravenous predators? Even setting aside the cerebral limits of feline cognition, we naturally discount the purely logical solution because we intuitively understand the scientific findings that my college roommate has published on the limits of human rationality...

David Laibson is a pioneer and rising star of Behavioral Economics, a new branch of economics that models the reality of non-rational decision-making (I'm guessing he's the only Harvard economics professor to achieve tenure before puberty). Economists initially pooh-poohed Laibson's field (Myron Scholes once told me over a round of golf that behavioral economics is nonsense), but pioneers like Laibson proceeded to produce models that exceeded classical models in their prescriptive power. Laibson now teaches a slew of popular courses on campus including Ec 1030: Psychology and Economics in which, I imagine, he considers in gory detail what really happens to the sheep.

(Our other roommate for all 4 years of college and the first avowed atheist I ever met, Aaron DiAntonio, is also on the Nobel path for his work at Washington University on the biochemistry of fly brains. I was clearly the dunce of the dorm room, tolerated only for my pizza money and general tidiness.)

Laibson's research has focused on inter-temporal choices--that is, decisions we make that affect us later (such as how much to save for retirement). Specifically, studies confirm that many people make short term decisions when offered immediate gratification, and long term decisions when asked to make the same choice well in advance. Consider the following two examples:

1. You are in a shopping mall next to your home and you win a drawing, which pays out either $10o today or $105 tomorrow. Which do you think you would select? Not surprisingly, many people would choose the $100 today (probably because there is something they immediately want to buy). But what if the choice of prizes is $100 credited to your account in 90 days, or $105 credited 91 days from now? Almost everyone (even the people who selected the immediate $100 payoff in the previous situation) figure that they might as well wait the extra day for $5 more. (Of course many will evidently change their minds if given the chance on day 90!)

2. It's time for dessert, and you have just enough room left for the slice of pie presented before you. Of course, sometimes you eat it and sometimes you don't. But if you make the choice well in advance of the meal, you are much more likely to make the longer term choice of declining dessert. We all intuit that it's easier to avoid putting the treat in your shopping cart than it is to avoid the treat at mealtime.

These examples expose the illogic of human decision making. If $100 today is better than $105 tomorrow, than discounting back 90 days ought to yield the same calculus--$100 in 90 days must be better than $105 in 91. And yet it's not. The same goes for eating dessert.

The immediate gratification of food, sex, sleep, entertainment, shopping, comfort and other personal leisures factor stronger in real time decisions than they do in long term planning. That's why we often choose to restrict our own options (buy illiquid investments, buy only healthy food, ask the hotel clerk for two wake-up calls, and avoid old girlfriends)--we don't trust ourselves to make the right decisions. And often when we do trust ourselves, we fail to recognize that we will change our minds when making the same decision in real time. This psychological fact defies the rational assumption in economics that options can only help the optionholder, not hurt. Sometimes, in fact, we act in ways that imply a negative value to our options!

Collaborating with neuroscientists from Princeton, Laibson published fascinating findings last year in Science Magazine. Using functional MRI, they showed that short vs. long term decisions are made using different parts of the brain depending upon the immediacy of the short term benefits (paralimbic cortex for immediate gratification, lateral prefrontal cortex and posterior parietal cortex for delayed gratification). No wonder we can make drastically different decisions around the same set of tradeoffs!

Human intellectual frailty impairs not only classical macroeconomic models, but also our lives. The good news is that, in the absence of immediate gratification, our posterior parietal cortices compel us to overcome irrational impulses. We shop smartly to help our diets; some attend church sermons to curb "sinful" tendencies; as of last week, non-smokers can even take a vaccine to prevent unwanted addictions; and sheep avoid fields populated by large, even numbers of smart but hungry lions.

Finally, this phenomenon explains in part why thoughtful entrepreneurs raise venture capital (Hah! I told you I'd bring this baby home)...

Many entrepreneurs try to control the composition of their boards of directors, but more experienced entrepreneurs tend to share control, inviting the participation of their venture investors and outside directors. Surely, the entrepreneurs reduce their own options in the process, but those options have negative value! They expect good, experienced directors to compel them, once every quarter or so, to stop fighting fires and consider the long term direction of the company. Are we on plan? Why are there variances and what should we do about them? Do external factors (such as competition) warrant a revisit of our plan? Without the deadline of a board meeting, it's easy and natural to let these critical questions slide for too long. Raising venture capital from an investor with a track record of bringing this discipline is tantamount to making the right long term decision before the paralimbic cortex takes over!

Lion Bait

For those who enjoyed the hand-shaking puzzle, here's a problem from the mid-term exam of my undergraduate Economics game-theory class...

A sheep sits in the middle of a field surrounded by n lions (where n is some number greater than 10). Any lion can eat the sheep but, as each lion knows, it would become so tired that it would be as defenseless as a sheep itself--easy prey for another hungry lion who would in turn become tired and defenseless. The lions are all hungry (equally so for lamb or lion meat), super rational, but naturally not suicidal. Does the nearest lion, or any lion for that matter, pounce on the tasty ovine?

The solution to this puzzle illustrates a point that I will reference in my next post. Eventually, I really will show some relevance to venture capital (beyond the obvious metaphor of nasty lions devouring poor helpless lambs).

Meanwhile, be the "first person on the blog" to post the correct answer (a simple yes or no without proof will not suffice)!

RSA Acquires Cyota

Congratulations, and thanks, to CEO Naftali Bennett and the whole Cyota team!

I've had the honor of serving on Cyota's board for barely a year, but during that time I've been blown away by Cyota's relentless defense of banks against fraudsters. At a time when phishing, pharming, and identity fraud expose our accounts to easy pickings, the accountholders of Cyota's banking customers have been protected by a formidable suite of anti-fraud services. Thousands of banks--including 8 of the largest dozen in the world--use Cyota to process Verified-by-Visa, authenticate online bank transactions, shut down phishing attacks, and detect credit card fraud in real time. During my service on the board, customers like Capital One, RBC, Barclays, ING, Bank of America, Chase, US Bank, CIBC and Providian so valued the service that Cyota's account churn was absolutely zero.

Naftali and his co-founders Amir Orad, Lior Golan and Gilad Zvi have been sweating at Cyota for years, zigging and zagging through different business models as they crafted the right suite of anti-fraud services. They recruited top talent like CFO Jason Schwartz from Shopping.com, board member and former US Cyber-Security Chief Amit Yoran, VP Sales Geoff Geane from HNC, and Chairman Kelly Doherty (ex Vice Chairman, Bankers Trust). This outcome was not a product of luck.

Congratulations as well to RSA on acquiring this premium property right on the heels of the FFIEC industry directive to secure online bank authentication--RSA has an exciting year ahead. Despite offers from several acquirors, Cyota accepted this particular deal due to RSA's strong brand name and presence in online authentication. (The last time I negotiated a corporate development deal with RSA was in my Los Altos apartment over a poker game with Jim Bidzos, where we decided to spin out his certificate business into a newco, Digital Certificates, Inc., later re-named Verisign.)

Finally, kudos to Justin Label of Bessemer, who chased down Cyota (and every other anti-phishing vendor) as part of a focused road map initiative.

SETI, Limbo, Walmart and Will

I know many of you wish I'd stick to venture capital stuff, but sometimes the superstition just piles up, and I can't help but vent. Here's what came in today's news feeds...

1) George Will opposes Roe v. Wade and other judicial defenses of our Constitutional right to privacy, citing U.S. Judge Raymond Randolph...

Since 1973, the privacy right has, as Randolph says, "morphed." Now it means personal autonomy - everyone's right to do whatever he or she pleases so long as others are not harmed.

And what is wrong with that? If we're not hurting anyone, why on Earth should government--or for that matter any institution--restrict us from doing what we want? George, please take 10 minutes to read Smullyan's dialogue between God and a mortal (from Hofstadter's Mind's I), and tell your friends about it.

By the way, I'm not trying to provoke the very complex debate on whether a fetus counts as an individual who shouldn't be harmed. George isn't even making that argument. Instead he is evoking the moralistic position, with an air of self-evidence no less, that actions can be evil and worthy of punishment even if they don't harm anybody. Of course, you have to think like George if you believe that blasphemy, idolatry, homosexuality and pre-marital sex are all evil.

2) Store Manager turns Walmart opening into a revival.

3) Vatican holds summit on Limbo. Where do the unbaptized babies go? What about all the other good people who never had a fair chance to embrace the New Kingdom? Someone needs to decide!

3) Intelligent Design proponents seek credibility by asserting the scientific equivalence of ID and SETI. After all, IDers see a Creator behind earthy complexity, just as SETI presumes that any complex signal in space implies intelligent life behind it. Wha? SETI is listening for clearly artificial sounds, not just the sonic, astronomical equivalent of eBay's Virgin Mary grilled cheese. Here, SETI researcher Seth Shostak has to defend his scientific credibility and spend valuable time debunking the ID camp's ridiculous excuse for logic.

Unfortunately, this morning's news feeds suggest that SETI needs to take a back seat to SeTI: the Search for Terrestrial Intelligence.

The Secret of Success

Commenters on my previous post have correctly pointed out that a logic puzzle is probably a weak indicator of VC skills. So what is a strong indicator of success? The question reminded me of an encounter in 1990...

The first person I ever met from Bessemer was Neill Brownstein, one of Silicon Valley's pioneer venture capitalists (with investments like Ungermann Bass, Telenet, Maxim, Veritas and BusinessLand). At that interview, he asked me this question:

What do you think is the most common trait among successful venture capitalists?

I thought hard, trying to impress him. "Deep industry domain knowledge."

"No," he said.

"Um, analytical skills?"

"No."

Uh oh, I started grasping. "Rich network of contacts? Operating experience? Engineering background? Financial background? Skepticism? Patience? Sense of Urgency? Salesmanship? Decisiveness?" (the last of which I clearly didn't display)

"No."

"I give up. What is it?"

"Luck."

I have since followed Neill's advice.

Coincidentally, the second most important factor, I now believe, is a strong, stable platform with great mentors (like Neill and Felda) and smart partners.

How Many Hands Did She Shake?

Eary stage VC's must make investments decisions with very little information. No wonder that barely half our investments turn a profit.

Here's a question I have often asked aspiring VC's to see if they persist in the face of seemingly incomplete information...

My wife and I went to a dinner party with four other couples. At the beginning of the party, some people shook hands. (Obviously, no one shook his or her own hand or spouse's hand, and no one shook hands with the same person twice.) During the party I surveyed all the other people as to how many hands each one shook. I got different answers from everyone. What did my wife say?

If the aspiring VC gives up on this solvable problem, I don't see how he or she will face down the much murkier puzzle of predicting a startup's success.

Update: The solution is presented visually in a nice way here.

More Wormholes by the Day

Since my post on the Wormhole Factory, Netli has continued to grow unabated... Motorola, T.I., Samsung, Boeing, Ingram, SAP and Nokia are just some of the companies who have recently hyper-jumped onto Netli's warp speed internet. In fact one of them reported to us this week that Netli's elimination of application latency has increased their site usage by 200%!

Kansas School Board More Religious Than Vatican

When a senior Vatican priest says "Oh, c'mon now, you're taking the Bible just a little too seriously," you know you're not in Kansas anymore.

Even the Catholic World News confirms the widespread reports that "Vatican Astronomer Rips Intelligent Design Theory."

Nov. 18 (CWNews.com) - The director of the Vatican Observatory has lashed out at proponents of the theory of Intelligent Design, the Italian news service ANSA reports.


"Intelligent design isn't science, even if it pretends to be," said Father George Coyne. He said that if the theory is introduced in schools, it should be taught in religion classes, not science classes.

So now that that Kansas School Board has crippled their science curriculum, they're moving on to other critical subjects. According to The Kansas City Star, the Board intends to restrict sex education classes to students whose parents specifically demand them, in writing (eventually resulting in, I fear, more Kansans). As for literature, the Board's Chairman Steve Abrams has been aggressively advocating the banishment of "pornography" in schools, such as the novel One Flew Over the Cuckoo's Nest. [Insert your own quip here regarding Abrams and the Cuckoo's Nest.]

Review Your Doctor, Find a New One

Healthia is beta-testing its new doctor search and review feature. I invite you all to please try it out--it's actually quite satisfying to publish your doctor's foibles (or worse)!

(Healthia is the Consumer Driven Healthcare startup I announced earlier.)

Amendment to Post: The Healthia beta site has now added consumer reviews of health plans.

How To NOT Write A Business Plan

Entrepreneurs often ask me for a sample business plan they can use as a model for their fundraising efforts. They are surprised when I send them a powerpoint file.

It's always a good idea to put down on paper your plans for the business, so that your team can build consensus around objectives and metrics. Make it as thick and wordy as you like (though show some restraint--over-modeling the future only wastes your time). I'm sure that Brad Feld's upcoming series on business plans will become the authoritative online reference for this kind of internal operating document.

But my advice is to never send a document like that to a VC.

Keep in mind that you are not alone--entrepreneurship is thriving around the world. In fact, we assess about 100 times as many investment opportunities as we fund, so as everyone knows, it's hard to get a VC's attention. It's not exactly true that all VC's are stupid (not exactly), but we do not have the luxury of an attention span. Drop a thick document on a VC, and it will, wrapped in good intentions, go straight to The Pile.

The Pile is a dark, evil tower--impervious to attack--that looms over every VC's desk. My Pile, like many, is constructed out of business plans, white papers, analyst reports and scientific journals, waiting to be read with quiet thought and deliberation... Who Has Time For This? My only opportunity to curb the Pile's growth is airline travel, where I have some downtime to chip away at it (that is, until I can email and Skype using on-board WiFi). You'd think that with the recent surge of VC activity in Asia, we'd really have time to work down our Piles, but instead our Piles only grow taller, fortified by new material imported from China and India.

That's why nothing slows down a VC as much as a comprehensive business plan. Powerpoint presentations, in contrast, can be quickly emailed and skimmed, eliciting much faster indications of whether there is a fit. And if there is a fit, the VC will have an easier time educating the firm about the opportunity. So powerpoint plans greatly increase your chance of getting a term sheet, or at least the dignity of a quick No.

I was first exposed to this notion in 1995 by a super smart CEO, whose name I regretfully forget. His company (Eo Networks, I think) developed fiber termination units optimized for rural networks. He was walking me through his slides, and when I asked him for his business plan, he pointed to the laptop, looked me in the eye, and said, "this is my business plan." I thought, What? Oh. Okay.

So here are my specific tips on constructing a business plan...

Your presentation should not exceed 10 slides. The appendix can include as many slides as you want. The more the better. Nothing beats responding to some VC's question with a slide from the appendix. Sales productivity? Here are the historical numbers. The competitor's software? Here's a screenshot. Most operating details will remain safely ensconced in the appendix, eliminating unnecessary friction in the presentation.

You might structure the 10 slides as follows:

1. The cover slide should offer complete contact info, and a tagline if you've got it. One of the benefits of a powerpoint plan is that it forces you to perform the critical exercise of describing the business in very few words.

2. A mission statement is a good idea to present, unless it's rather obvious from the tagline (as in BlueNile.com: Education, Guidance, Diamonds and Fine Jewelry). Select a mission statement that is achievable, but not yet achieved. Bad mission statements:

"To create the world's largest software company." [too broad and unrealistic to practically guide decision-making]

"To develop the world's best technology for defending DNS servers from worm attacks." [er, you said you've already done that, right? Mission accomplished!]

A clear mission statement also includes a clear idea of what the startup will NOT do. Here are some nice ones...

"Healthia will operate America's most widely used comparison shopping portal for consumer driven healthcare, enabling businesses and their employees to choose health plans, ancillary health benefits, and medical services objectively and transparently."

"Prolexic will create and dominate a new network service category that defends web applications from distributed-denial-of-service attacks."

Sometimes the white space on the slide is filled with customer logos or testimonials.

3. Introduce the team. On one slide, highlight the backgrounds of the key members of the team, and any directors or advisors (not too many) who bring something special to the startup. Explain verbally whom you intend to add to the team in the next year. (If that includes a CEO, say so up front, without waiting to be asked.)

4. Without yet getting into your product or service, describe the nature of the problem you address. Emphasize the pain level and the inability of incumbents to satisfy the need.

5. Introduce your product, and the benefits (which should obviously address the market problem you just described).

6. Elaborate on the technology or methodology you have developed to enable your unique approach. If appropriate, mention patent status.

7. Show off early customer or distribution progress: numbers, logos, testimonials.

8. Sales strategy. Show the expected cost of customer acquisition.

9. Competitive landscape. Be sure to anticipate competitive responses (before the VC does), and never deny that you have competitors, no matter how unique you think you are. Really, it's okay to compete. Even against Microsoft (as Flock will prove).

This is also a good slide on which to show market size estimates.

10. Earnings Statement, historical and forecast. For each time period, add headcount and cash balance. It should be clear how you expect the company to perform top line and bottom line three years out, and how much capital will be required now and later. Prepare lots of backup slides to illustrate the assumptions behind these financials.

Okay, so you might need an 11th or even 12th slide to cover all the financials, to describe the follow-on businesses that may arise, or to provide a timeline if you have a complex product road map.

Ideally, find the opportunity to walk the VC through your powerpoint plan in person, or at least by phone. If not, at least find a mutual friend to persuade the VC to review the powerpoint on his or her own.

If it's helpful, comment on this post with a link to a powerpoint plan that you have crafted along these guidelines--I'd be happy to publicly critique one such powerpoint, and others might weigh in, too.

Update: Before presenting your pitch, be sure to read Boris' tips. Also, here is advice from Matt Cutler that marries my tips with those of Brad and Guy.

What I Learned From Smart People I Met Last Week

Walt Mossberg (at Dow Jones Conference): Schwarzenegger is nuts to pick on nurses...the dam has broken on downloadable prime time TV.... Apple's on fire, but Dell fell... Can Google overcome the "arrogance of the engineer"? ...Microsoft Xbox360 was designed in Redmond on 3,000 Macs!


Harvard University President Larry Summers: Despite his personal distaste for Intelligent Design, the academic icon dodged my challenge to position the university squarely on the side of Science, since (he said in more diplomatic words) Harvard still serves the Red States. (So there's plenty of time left on the Divinity School's lease.)



Jimmy Wales: Wikipedia today serves billions of impressions per month. This precursor to the Hitchhiker's Guide to the Galaxy enjoys broader reach than the New York Times, the LA Times, the Wall Street Journal, MSNBC.com and the Chicago Tribue... combined. If you haven't yet contributed to this corpus of the human intellect, you're missing a thrill.






Jesse Andrews (Book Burro author, hosts UserScripts.Org): GreaseMonkey still exposes desktops to many vulnerabilities--not yet for the faint of heart, but maybe in Firefox 2?

Peace Rally Triggers Memory

I saw a news report today that reminded me where I was exactly 10 years ago.

That was the Saturday afternoon that Nathalie and I found ourselves in a traffic jam in downtown Tel Aviv. Sirens blared all around us as we inched our way to our hotel, only to learn in the lobby that an hour earlier, at a peace rally two blocks away, Prime Minister Yitzhak Rabin had been shot. By the time we checked into our room, Rabin died on the operating table. This moment was every bit as horrible for Israel as the assasination of John F. Kennedy was for America.

Yitzhak Rabin (יצחק רבין), a native Israeli, fought in the Israeli Independence War, and then, as Chief of Staff, defended Israel in the 1967 Six Day War to a stunning victory. As Prime Minister in 1976, Rabin boldly mandated Operation Entebbe, a spectacular raid of Idi Amin's fortified airport in which commandos rescued 100 hijacked Jewish airline passengers (as well as the entire Air France flight crew that courageously declined to be set free so long as any of their passengers were captive).

But Rabin showed his true courage in his second term as Prime Minister, during which he recognized the PLO, signed the Olso Peace Accord, and reached an historic peace treaty with Jordan. For this, he was awarded the Nobel Peace Prize. For the first time in this little nation's history, hope grew that Israel might finally live in peace with her neighbors, released from the constant threat of annihilation. For a society with mandatory and truly dangerous army service, Rabin promised the young generation a chance to strive for something beyond mere survival.

Nathalie and I wandered down to the Kings of Israel Square--the site of the assasination--where people wandered, dumbstruck. We felt ourselves drawn to the crowd, feeling the reflections of their pain.

The next day, we learned that the assasin was a reactionary, fundamentalist Jew enraged by Rabin's intention to negotiate peace with the Palestinians. So what? Who cares what kind of maniac pulled the trigger? It mattered to Nathalie and me. It propelled our growing realization that all flavors of religious fundamentalism (not just the Muslim flavor) destroy life and liberty.

The day after that, world leaders flew in to attend the Nobel Laureate's funeral. Nathalie and I joined the crowds in an unplanned procession through the streets of Jerusalem, winding our way to the national cemetary, where hundreds of thousands held vigil. When sirens signalled the moment of silence, all traffic in Israel stopped, and every person froze.

Kings of Israel Square was renamed Yitzhak Rabin Square. For the remainder of the week, people gathered there every evening, all night. No one fired shots into the air, and no one called for vengeance against "enemies" of any kind. We sang songs of peace around lit candles, to mourn the loss of a true leader.

Since Rabin, prime ministers have tried and failed to revive the peace process. But even from the grave, Yitzhak Rabin promises hope. This week, 200,000 Israelis held a peace rally in his memory. How wonderful that Israel's next election promises a race between Likud's Sharon, who is moving slowly toward peace, and Labor's Peretz, who wants to move there quickly.

I found this photo, below, that I took the night after the Prime Minister's death. The artist had impromptu picked a wall in the square on which Nathalie and I watched him paint his memory of Rabin. I hope this image remains there today.

Grammar Nerds

This is actually a post that I had drafted some time ago, but never published because I couldn't muster the courage... until today, when MetroDad inspired me by coming clean as a grammar nerd.

Hello. My name is David, and I am a Grammar Nerd.

It started as a child, when my big sister Alison graciously offered to edit the articles I had drafted for my school newspaper (my sisters taught me 80% of everything I learned before college). Unfortunately, Alison's journalistic talents failed to rub off on me, but I easily absorbed the more mathematical elements of her English writing lessons--the rules of grammar. I suppose I got carried away, having failed to appreciate how unusually high a bar my sister had set for me (she hadn't yet become the star New York Times investigative reporter that she is today). Further compelled by a rather unhealthy obsession to score 800 on my English Achievement Exam, I proceeded to master English linguistics, naively overestimating the necessity, utility, and appeal of perfect grammar. Sadly, proper usage of the subjunctive tense (e.g. "If I Were A Rich Man...") never scored me a date.

Today I resign myself to the chronic nature of my disorder. I recognize grammatical mistakes in every conversation, and in most things that I read (except, of course, Alison's articles). The errors jar me. In fact, if you wish to hurt me, mis-conjugate the form of be, conjoin unparallel syntactic elements, or apply participial phrases to the object of a sentence (as in, "Filled with bad gas, he drove his car despite the knocking sound").

But no linguistic offense grates me more than hypercorrection--the growing epidemic of grammatical errors motivated by desire to flaunt superior English proficiency. Some examples of hypercorrection have proved particularly contagious:

"They met with Fred and I for an hour."

You wouldn't say that they met with I, so why say that they met with Fred and I? The misuse of subjective pronouns following prepositions is the most common hypercorrection.

"I need to pay whomever went shopping for us."

The less pretentious "whoever" is actually correct here. This one's a little confusing because, indeed, it is obviously fine to say "I need to pay him." But the object of the sentence is more than just "whomever" so the proper substitution is: "I need to pay he who went shopping for us."

"Are you still feeling badly today?"
"No, I'm feeling good, thank you."

The question, not the answer, is incorrect. We use adjectives, not adverbs, to describe the subjects of sentences with linking verbs (e.g. be, seem, taste, feel, smell, look). If you feel bad, then you are ill, but if you feel badly, then you are just numb.

If you share my affliction, I offer only one message of consolation: it's okay to correct my grammar--I actually like it!

But if you're not like me, you have probably concluded by now that I am just an asshole. You see my problem here. As a venture capitalist, I've already got two strikes against me, and grammatical snobbery hardly helps!

Picked Up in the Blogosphere...

Some treasures I have found recently through blogging...

Findory. Greg Linden, architect of Amazon's personalization engine, challenged my post Saving Serendipity with a comment that led me to his startup. Findory personalizes news and blogs, which I now feed into my RSS reader (okay, I confess I still use My Yahoo), so news gets better every day. In fact, I have replaced the useless "Archives" section in this blog's sidebar with a window into the some of the news generated for my profile. Findory will have to innovate fast, though, to keep up with some new, stealthy challengers coming to market...

Nivi. Babak Nivi, an MIT Media Lab graduate, has attracted a strong following for his insightful blog on new technology ventures (now on my blogroll). I found Nivi through his blog and, I'm pleased to report, recruited him to Bessemer as an EIR. (He's much, much smarter than he looks.) Check out his web-based voice mail app Slawesome.

Browster. In case you haven't tried this pre-fetching and content previewing plug-in, check it out. It really speeds up the web experience, and enables you to examine web content more deeply than you otherwise would.

Genius Architect, as posted. I actually found two!

Slippers with Headlights, thanks to an anonymous commenter on my post First VC Blog in India. These babies safely light my way to the bathroom at night.

Heracles' Marathon to Olympus, Athena Awaits

For lack of fresh content, I offer an old, true, personal anecdote--a rerun, I guess, of the blog I would have written had the web existed. Warning: don't expect a happy ending.

Friday May 31, 1991: B-school summer break begins. My plan is to catch up with my fiancee, Nathalie, who has been backpacking around Europe. We haven't had phone access for 4 weeks but our plan is set: she is picking me up tomorrow morning at Athens airport, where we grab a bus to Brendizi and a ferry to Mykonos for two weeks in the Greek islands, and a weekend in Rome (before slutting myself out to a consulting firm for the summer). This is the vacation we've anticipated for years.

11:30 am

I arrive by cab at Boston Logan Airport, weighed down by my carry-ons and two full, heavy, non-rolling suitcases (one for Nathalie). No problem, only a few dozen yards to the check-in counter...

11:45 am

I'm checking in, quite proud of myself for being uncharacteristically early to my United 1:30pm flight to Athens (with a stop in Dulles Airport). As the United agent hands me back my passport, she asks, "oh, it's still valid right?"

"Of course" I say, with so much confidence that I volunteer the passport back for her to inspect herself.

"Oh, I'm sorry, your passport expired yesterday." That's right--it was exactly 10 years AND A DAY ago that this passport had been issued.

"What? Yesterday? Let me see that. Oh, no. Hehe, okay so what do I have to do here?"

"Well, I can check availability on flights for late next week if you think you can get an emergency replacement issued by then."

"Next week? No, no, no, I have to go today. You don't understand--my fiancee is there waiting for me, I can't reach her, and we have these ferry tickets--"

"Well I can tell you," she offers, in a genuinely helpful tone, "that you're not going on today's flight to Greece."

"But I HAVE to. Is there a supervisor I can talk to, or a passport office somewhere around here?" Apparently not, she insists, while starting to look at the next passenger in line. I can see I am about to lose her attention, so I get in one last question: "Are there any other flights to Athens today?"

"Let's see... the only other one today is an American Airlines flight that leaves here at 2:15pm. Next!"

I can only imagine how disappointed, worried (and eventually pissed) Nathalie will be when I don't get off that plane in Athens. I had promised this time to her, and we have non-refundable ferry tickets and hotel reservations. More importantly, I have all her clean clothes with me!

This is a major screw up. There is no way to talk my way onto that plane. My heart rate speeds up and nausea sweeps over me as I realize that I can't even call Nathalie to tell her (no cell phones back then). But I can't just sit around and count down the minutes to 2:15pm. I resolve that until both planes physically depart Boston, I'm going to exhaust every possible option of boarding one of those two flights.

So I lug all my baggage out to the taxi line.

12:06 pm

I get a taxicab and ask, "is there a passport office in the Tip O'Neill building downtown?"

"I suppose so," he responds, considering whether to resent the implication that all cab drivers must be immigrants intimately familiar with INS facilities.

"Please take me there as fast as you can."

"Sure. Why the rush? Are you planning on flying somewhere next week?"

"No, this afternoon at 2:15."

"Whoaa. You're never going to make THAT flight."

"Please, just drive as fast as you can."


12:20 pm

I spring from the cab (as much as one can spring while lugging 2 heavy suitcases and carry-ons) and wind my way through the Tip O'Neill building until I find the Passport office (of course, it's up two flights of stairs). I run in, and see before me a long, long line of people standing there with newspapers and snacks, apparently settled in for the wait. This looks bad.

"Excuse me, everyone! I'm sorry to bother you all but I HAVE to catch a flight today to Greece where my fiance is waiting for me, and so I desperately need a passport right away. Is there anyone here who would mind if I went to the front of the line?" Pathetic as I looked, everyone shrugged as if to say Okay, but you're dreaming if you think you're going to make it.

12:28 pm

"Please, I need to get a replacement passport immediately--my old passport expired only yesterday, and I have a flight this afternoon at 2:15, and my fiancee is waiting for me there, and I have no way to reach her, and..." I can see that the INS clerk standing before me thinks I'm quite an idiot.

"Well, you're not going to make that flight today. I can't just issue you a passport like that. An emergency passport takes 24 hours, and tomorrow's Saturday, so possibly on Tuesday."

"Oh, please, isn't there anything you can do?"

"Sir, even if I wanted to, you don't have a passport photo."

"Photo? Where do I get a photo?" I ask, looking around the room, as if.

12:32 pm

With a bit less spring in my step, I lug the baggage down the stairs, and wander the streets looking for passport photos.

12:41 pm

A locksmith two blocks from Government Center advertises Passport Photos in the window.

"Please, I need a passport photo RIGHT away."

"Sure, but what's the rush? When are you travelling?"

"Hopefully, this afternoon."

"And you don't have your passport? You're NEVER going to make THAT flight."


1:03 pm

Once again I ascend the stairs with all my baggage, clutching the ugliest Polaroid head shot I've ever seen of a sweaty, harried, soon-to-be-single-again traveller. Inside the passport office, the same people are still standing in line, right where I had left them.

"Excuse me, everyone--"

"Yeah, yeah, just go."

1:11 pm

"Here, maam, I have a passport photo now. Please, I really need to make that flight today."

"I'm sorry, but it does take one business day. Maybe you can take a Tuesday flight."

"Could you just PLEASE talk to your supervisors back there and see if there's any way you can make an exception?"

"Well, allright, have a seat. But don't expect much."

1:15 pm

I sit down and catch my breath. I watch the clock as each minute ticks by (to this day I remember every detail of that clock face).

1:20 pm

I know now that I have missed any chance of boarding my 1:30pm United flight, but I still harbor hope of buying a ticket on that 2:15 American flight. I wonder how I'm going to afford the full fare one-way ticket.

1:50 pm

Half an hour later, it isn't looking good...

1:56 pm

"David Cowan?"

I bounce up to the counter and see before me a shiny new US Passport! "THANK YOU!!"

I spill down the stairs with all my baggage, into the street, in search of a cab.

1:59 pm

I say to the cabbie, "Airport, as fast as you can!"

"What time's your flight?"

"2:15"

"You're never going to--"

"Yeah, yeah, just drive!"

2:12 pm

I rush into the American terminal (as much as one can rush lugging my own weight in summerwear and books) and make a dash for the gate, clumsily pushing through the security check point.

2:17 pm

I arrive at the gate. There is the plane, ALREADY PUSHING OFF, with the doors closed and no one around to hear my pleas.

I collapse upon my suitcase, defeat washing over me. All that's left to do is to wallow in self-loathing and pity.

But... but... wait a minute. My original 1:30 flight has a one-hour stop in Dulles, right? I check my itinerary and see that it is scheduled to leave Dulles at 4:05pm.

2:20 pm

I'm talking to the first airlines employee I can find. "Please, are there are any flights anywhere in this airport leaving right now for Dulles Airport?"

"Hmmm. Let's see. There's one at--no, that's tomorrow. Let's see. Let's see. There's a Delta commuter flight that leaves at 2:26, but you're never going to make--"

And there I am, literally sprinting out of the gate, off to Delta. I wobble with my suitcases down the long corridors to the very back suburbs of the airport where commuter flights gather.

2:25 pm

"Please, please I need to buy a ticket on the flight to Dulles." I'm waving my credit card around, and trying not to draw attention to the four bags I'm lugging.

"Sorry sir, that flight has already boarded."

"Oh, please, I really need to catch a connection out of Dulles--it's the last one to Greece today, and my fiancee is waiting for me there, and I can't reach her, and..."

I must look really awful by now, because mercy is the only explanation for what happens next... The agent grabs her radio and says "Flight 87, hold for one more passenger."

She swipes my card, and I run down two flights of stairs and outside to the tarmac. The pilot is surprised to see so much baggage showing up at the last minute for his tiny, 14-seater commuter aircraft.

2:52 pm

The flight attendant, hunching over so as not to bump her head, makes one trip down the aisle offering water.

"Excuse me," I say. "Is there any chance that you might be able to ask the pilot to fly faster? I'm trying to catch my flight to Greece."

Fly faster? she almost says, but when she looks into my eyes, she sees my desparation. "What time is your connection?" she asks instead.

"4:05."

She looks at her watch and shakes her head. "I'm sorry, but you're not going to make that flight."

"Right, but could you please just ask?"

She promises she will.

3:58 pm

Delta Express Flight 87 disgorges her passengers into Dulles Airport, 8 minutes early. I run to the terminal's docking station, where you wait for this bus-ish thing to transport you to your terminal.

4:00 pm

I board the bus-ish thing, and we depart.

4:04 pm
We dock at the international terminal. I run, run, run to Gate 33. My heart is pounding, my lungs are bursting, the nerves beneath the baggage shoulder straps screaming for relief.

4:05 pm

I see Gate 33 down the hall! The agent is just getting ready to close the door. "WAAAAAAAAAAAIIIIIIT!!!!"

She looks up, prepared to be annoyed, but realizes at once that I haven't just been hanging out too long in Duty Free. She props the door open, examines my ticket and shiny new passport, and welcomes me on board, suitcases and all. I made the flight!

Never in my life have I been so happy to get a middle seat. Hot, frazzled, drenched in sweat, heart still pounding, eyes watering, back aching, I just sit there and laugh out loud for a good 10 minutes.


I warned you not to expect a happy ending, but I didn't rule it out, either.
:-)

Maybe Harriet Wasn't So Bad

With President Bush losing support on so many fronts, he has decided it is good enough to simply satisfy his core base of Bible thumpers by nominating a devout, activist Catholic to the Supreme Court. I guess the rest of us can all, literally, go to Hell.

You've read what Samuel Alito will do to Roe v. Wade. But are you familiar with his positions on school prayer? So much for Murray v. Curlett. By the time Alito is done re-uniting church and state, he'll qualify for Time Magazine's Man of the Year.

Here's an anti-Alito petition drive where you can donate your John Hancock and maybe a few Abraham Lincolns.

2 B or not 2 B?

The title of this post is IM-speak for the self-referential question that seems to have gripped the blogosphere: Is Web 2.0 a bubble or not?

Marc Andreessen changed my vote during a conversation we had at the Copa (I mean of course the Cafe Copa in Palo Alto, not the-hottest-spot-north-of-Havana Copa). Between sips of my soy-decaf-mocha, I lazily referred to the Web 2.0 bubble, when Marc challenged me with "What bubble?"

This struck me as an important question for a VC like me to seriously consider, not only because Marc has been right more than once in his life, but also because he is twice my size.

I blabbered on about the web2.0 frenzy, after which Marc politely observed, with unassailable logic, that frenzies do not imply bubbles. Domestic internet IPO's are sucking up little if any public capital, and U.S. venture capital investment in internet companies actually declined in Q3 (which is backed up Thomson Venture Economics).

Marc was right again. Suffering from VC-herd-mentality, I had confused the excitement around today's new technologies with the excessive IPO march of Web1.0. All we have now is some soap--to blow a bubble we'd need a stream of hot, airy IPO's. (if only...) True, anecdotal data alert us to a coming wave of venture capital that will indiscriminately flow into every startup touting AJAX, wikis, RSS, tags, Open Source and consumer content. But over-funded ventures do not always beget IPO's--remember Go, Pointcast, Napster and Friendster?

So (in a further tribute to Godel, Escher and Bach) I assert that all that bubble spotting is itself just another bubble. The much more important question is whether there is substance to the frenzy. Many of us, including Andreessen, seem to think so, but let's save all the reasons for an O'Reilly conference, not a Saturday 2AM blog.

I have one last question to pose here, and to ask Marc next time I see him:

Why now? Why did all these new technologies seem to emerge in 2005, in a surprisingly sudden end to the internet's first Dark Ages? How much of it springs from the finanical success of Google, or the integraton ease of XML? Or should we expect this rate of innovation to only increase as we accelerate inexorably toward Ray Kurzweil's singularity?

I posed this question to my fellow panelists on a VC podcast, and the only answer I got was "2002"--that is, the year when programmers had nothing to do but dream up new stuff. (Great, another reason for Republican think tanks to advocate unemployment.)

So returning to IM speak... IYHO, iz w2 1 tym tng o d nrmL st8 of INOv8n?

CUL8R!

The Next Intel Emerges From Stealth

Our focus on consumer technology isn't restricted to web2.0 startups. Our wireless, security and media investments have all followed the consumer. (Flarion, GoTV, Mforma, Revver, Visto, Gracenote, Skype...) And our semi-conductor practice is no exception. Led by Rob Chandra, Bessemer's semi team has been funding the next generation of low-power, mixed signal chip design to enable the rapid evolution of mobile, multimedia devices (as well as dense, overheating datacenters).

One such portfolio company, PA Semi, emerges from stealth today at the Fall Processor Forum in San Jose. This crack team of chip designers was responsible for DEC Alpha, Opteron, and Sibyte.
Expect to enjoy the company's PowerPC microprocessor in video games, routers, server blades, storage appliances, supercomuters, printer/copiers, cars, etc. According to today's Wall Street Journal:

P.A. Semi, funded by the venture-capital firms Bessemer Venture Partners and Venrock Associates, expects to deliver samples of a chip next summer that operates at two gigahertz, yet draws only 13 watts of power. That product will have the core circuitry of two microprocessors, along with other circuitry often found on separate chips; P.A. Semi eventually expects to put as many as eight processors on a single piece of silicon.

By contrast, Intel's latest "dual-core" chip for servers operates at 2.8 gigahertz and draws up to 150 watts of power. Mr. Dobberpuhl concedes that competitors also will reduce their power consumption, but he expects P.A. Semi products to retain a threefold to fivefold advantage over competitors.



This powerpoint reveals more details about the company.

Wanted: Genius Hacker, Genius Architect

I'm seeking geniuses for two distinct startup opportunities in Silicon Valley. If you or someone you know qualifies, please email me a bio.

Genius Hacker: Come lead a vulnerability research lab for a successful, fast-growing security company. Be adept at reverse engineering applications and finding exploits. This is your chance to play a prominent, leadership role in the security industry (without getting arrested).

Genius Architect: Architect and develop a desktop application for an exciting web2.0 startup that we're incubating in our offices. Recruit your own technical team. Know Windows, GUI design, and web services. This is your chance to co-found a well-funded, high-potential startup with the team of your choice.

If you want coin-free laundry, free pizza, and pretty admins, join Google. If you want to play a critical role in building your company and earn lots of pre-IPO stock options, join us. (Okay, the pizza is negotiable.)

Do No Weevil

My Go-Ogle post has apparently provoked Doug Merrill, who directs Google's IS department, to blog. His debut post celebrates the boll weevil.

Indeed, weevils rock, but on African safari in 1999 my Masai guide taught me that dung beetles rule. Without these va-pooh-rizing insects, our planet would be a stinking ball of feces. Then Doug's company would have to change the name of its Earth imaging software to Google Shit.

Read This Only If You Shave

Sometimes technology helps our lives in unexpected ways.

For those of you who shave, you MUST--if you haven't already--switch to the Schick Quattro. I had thought that the Gilette Mach3 offered all the blade I'd ever need, but I must admit that four blades are perceptively better than three. All it ever takes is one pass of the Quattro razor to mow your facial lawn. (Remember having to always make multiple passes? Who has time for this?) Plus, the redundant slicers relieve the need to press the flesh so hard that you strike blood.

Plus, Nathalie likes to see me move my business away from Gillette. Meanwhile, I hope the scientists at Schick Labs are hard at work on a Pentium product.

It's a Wonderful Life

Kepler's Bookstore re-opened its doors this morning with a ribbon-cutting ceremony attended by throngs of supportive readers who cheered on Clark Kepler and his dedicated staff. Cafe Borrone distributed free cookies while Mayor Winkler announced a city proclamation thanking Daniel Mendez and all the other tireless volunteers and investors for saving the cultural landmark of Menlo Park. Throughout the afternoon, a jazz band serenaded the festive plaza, as the crowd descended upon the store shelves. As of this moment--5 minutes to closure--the checkout lines have still not receded, and the number of neighbors who signed up for Kepler's Membership far surpassed anyone's expectations.

As my son and I spoke to Clark today, his determined but friendly demeanor reminded me of Jimmy Stewart in Frank Capra's classic film It's A Wonderful Life (re-enacted here by bunnies). Upon his father's death, George Bailey reluctantly set aside his personal ambitions to assume the family business, for the good of Bedford Falls. Many years later, when circumstances beyond his control threatened to bankrupt the business, George felt responsible for the failure, and sank into a state of despondency. But as George reflected upon his contributions and importance within his community, he felt a renewed sense of purpose; meanwhile, all his grateful neighbors converged upon his home with unexpected pledges of financial and emotional support that saved his troubled business.

Substitute Menlo Park for Bedford Falls, and you have the story of Clark Kepler. Perhaps today, just like George Bailey, Clark realized that he is a more successful man than he had thought.

So here's to Clark, the richest man in town!

A Day of Mashups, Wikis, AJAX and Open Source

Energetic, young and crowded. Developers-turned-entrepreneurs filled the halls to hear Google, Yahoo and Interactive slip hints as to what they'll acquire next. Open source zealots cheered on the demonstrations (on Mac OS, of course) of new web services stitched together in the hopes of attracting huge communities. Zimbra impressed all with the search and sharing features of its AJAX collaboration suite. Ross Mayfield showed off SocialText's cool Wiki apps, and AllPeers demonstrated an application framework that I can't explain because I don't understand (ok, they had only 6 minutes). Rollyo impressed me with its ability to develop new search engines on the fly, and Michael Tanne (Flock angel) of Wink showed collaborative filtering at work in search. Orb streamed a video from its CTO's living room, and remotely turned on his lamp. Jumping on the bandwagon, KnowNow re-spun its alert service as an RSS alternative (but the software persisted in displaying annoying pop-ups during the subsequent demos). Real Travel, ZVents (click this: ), Writely, PubSub all demoed well.

My favorite, of course, was Flock, even though the company obviously jumped the gun demonstrating a feature or two that weren't yet ready for the spotlight (at least not in its Mac browser). Coincidentally, the Flock launch was today's #1 read story on BusinessWeek.com.

Web2.0 was a great place for me to catch up with other VC's, such as my blog muses Fred Wilson, Stewart Alsop, Ryan Macintyre, Nivi, and Dave Beisel. I also ran into lots of enterprise-focused VCs like Mitch Kertzman and Mike Orsak showing up to see what all the fuss is about.

In one year the Web2.0 show has evolved from a band of angel-funded startups sharing ideas to a myriad of VC-backed companies touting their products. Next year, will O'Reilly have to rename the event Bubble2.0?