Yearly Archives: 2012

The Birth of the Dallas Startup Eco-System

Have you ever wondered what it would take to build a startup ecosystem in your community? You might be surprised at how easy it is to build a robust community of entrepreneurs in a relatively short period of time. My story covers the years between 2005 and 2012:

Several months ago I met Derek Holt, Managing Director of Startup America and Trey Bowles, Texas Chair for Startup America for lunch. We spent the next hour talking about the history of the Dallas startup scene and by the time he finished his salad Derek asked me if I would be willing to retell the story at the Startup America board meeting in December. I agreed and put together the following presentation:

Direct link HERE. Without narration the presentation won’t mean much to most of you, but so many of you have asked me to share my ‘slides’ I decided I better post something sooner than later. In the coming weeks I will narrate the presentation and create a video. Through the presentation I attempt to give a brief and incomplete history of the Dallas Startup Scene from my perspective.

My story begins in 2005 with the creation of the Texas Startup Blog. Over several years I wrote more than 4,000 posts sharing my startup experience and the experience of other entrepreneurs. I think I began writing about startups because I didn’t really know anyone in Dallas who I could talk to about startups. Interestingly hundreds of entrepreneurs or would be entrepreneurs reached out to me causing me to realize there wasn’t a dearth of startup of folks – but a dearth of venues to facilitate the creation of a startup ecosystem. Dallas needed a way to interconnect these entrepreneurs – knowing me wasn’t going to help them very much – but knowing each other might be huge.

In early 2006 I convinced a bunch of the people I met through the blog to help me coordinate an un-conference called Barcamp. The idea was to bring the entrepreneurs who reached out to me via the blog into a single room so they could connect to one another. Many of the connections made in 2006 resulted in the creation of other events, venues and organizations that became vital pieces of the startup eco-system we enjoy today. Over the next couple of years Dallas hosted several other Barcamps, PitchCamps and DemoCamps, but I was still frustrated with the lack of regular interaction with local entrepreneurs.

By the summer of 2008 my business partner, Scott Ryan, and I decided to begin hosting a monthly startup happy hour for entrepreneurs. We decided to provide the venue and the beer (224 kegs to date) to see if anyone would show up. Since then we have hosted 54 events for more than 5,000 local entrepreneurs (BTW we still host them). These regular events helped strengthen the connections we all made at the bigger events like Barcamp and SXSW. Many of us met business partners at the events. In the presentation I tell a few of these stories.

By 2009 we were all sick of Barcamps, but through David Cohen of TechStars I met Andrew Hyde who came up with the idea of a Startup Weekend. By October we had hosted the first Startup Weekend in Dallas and over the years six more have been held all over town.

The next part of the presentation covers the creation of CoHabitat and Tech Wildcatters and the part they have played in the creation of LOTS of local startups. If you have any stories you’d like for me to include in the presentation or corrections – please get them to me before January 1st (I am planning to start working on the video shortly after the new year).

Is there a Series A Crunch?

There is a LOT of discussion about a so-called “Series A crunch“: startups who receive seed or angel investment not being able to raise their first institutional round of financing. I would argue there really ISN’T a Series A Crunch, but instead a proliferation of seed and angel deals and this is a GOOD thing. First lets look at the numbers (via CNN, CB Insights):

No. of Deals   2009   2010   2011   2012 ytd
Seed/Angel      472     770     1064  1747
Series A             418     515       703    688

From 2009 to present there has been a small increase in Series A deals, but a HUGE increase in seed/angel deals. The advent of the cloud and agile software development techniques mean that a lot of startups can get to their MVP (minimum viable product) without raising a Series A. With a small amount of angel or seed funding a company can build and launch their product AND get user feedback very quickly.

So is the increase in seed and angel investments relative to Series A investments a bad thing? First, I would argue it is great news for entrepreneurs because it gives them the ability fail faster, more frequently with less risk. If you are lucky enough to get a Series A investment it can take you three to four years to fail – this means an entrepreneur is lucky if she gets three or four times at ‘bat’ in her career. The proliferation of seed and angel rounds opens up the possibility of several more times at bat. Second, I would also argue that it is great news for investors because it creates a much larger pool of entrepreneurs with experience – eventually the pool the increased angel and seed rounds are creating will lead to an increase in Series A deals – its just going to take some time.

Don’t worry about the Series A crunch, instead celebrate the explosion in early stage deals.


Don’t cold call Bill Gurley, ever. . .

Did you just cold call Bill Gurley from Benchmark? Shame on you. NEVER cold call a VC. That is so 1999. It is 2012 – have you heard of Google?

Raising venture capital seems like a black box to most entrepreneurs, but it is actually pretty easy once you understand the rules. First, never cold call a VC – that is the first rule. Get an introduction (more on that in a minute). Second, only call VCs that invest in similar companies. Don’t bother calling a bio-tech VC with your mobile app unless it can cure cancer. Visit their website. Check out the sort of deals each firm does. Then visit the profiles of each partner at the firm. Each partner has a bias and a particular focus. Find the right partner for you and your business. Once you have found the right partner start reading his blog, his Facebook page and his twitter feed. Get to know him. It will take a day or two – but it is vital to understand your prey before stalking him. Lets pretend Bill is our prey, visit the following before reading further:

Crunchbase Profile
Twitter Account
Facebook Account
LinkedIn Account

You might be surprised to learn Bill is a Longhorn. Yes, he went to the University of Texas for his MBA. He is also a geek – an engineer with Compaq. Oh, and he is a Zac Brown fan – that is key info. Now you know Bill a little better lets take him down!

Lets assume you don’t know anyone who knows Bill. Remember, don’t cold call him – huge mistake. But all hope is not lost. We can still get an intro. Bill is an investor in:

Dog Vacay – CEO: Mike Jones
Ubiguiti Networks – CEO: Robert J. Pera
Uber – CEO: Travis Kalanick
Grubhub – CEO: Matt Maloney
(BTW – there a bunch more)

Now lets call all of them. Let them know you are considering taking an investment from Benchmark and Bill Gurley. At least one of them will call you back. Ask them what it has been like working with Bill. Ask them if they would do another deal with Bill. You might be surprised what you hear. Eventually you will run into a CEO who is not a big fan – listen to them. But at the end of the day if you hear more good than bad it might be time to set the hook. Call Bill and let him know you talked to [insert name of CEO], that he had great things to say about him and that you wanted to talk to him about investing in the next Uber (or whatever).

100% of the time you are going to get a return call. It has NEVER failed for me, ever – if it does, call me and I will get you the meeting myself. Of course, once you get him on the phone it is your job to get the meeting. I’ll save that advice for my next post, “How to get the meeting.” Good Luck!




When should you raise money?

Earlier this week I was on a panel at MobCon with Michael Gorman (managing partner at Split Rock Partners) called, “Investing in Mobile Companies” and one of the early questions was about WHEN an entrepreneur should raise outside capital. Michael put me on the spot and asked my opinion. To be honest, I have had a bias against raising outside capital since I raised my first $11M when I was in my twenties. The process was time consuming, frustrating and ultimately heartbreaking. In the case of my lastest startup, ShopSavvy, we waited WAY too long to raise outside money (three full years from the start). We starved the company until last year. I decided to answer the question based on my current bias.

If you are starting a high-growth company today, it is my opinion that you should raise capital as soon as possible even if you don’t actually need the money. Why? I believe you need the social proof outside funding provides. In the case of ShopSavvy we kept getting download volume that seemed to give us the social proof we thought we needed, but the reality was without the capital the social proof would have helped us get we were really squandering the opportunity we had. We needed three or four times the staff we were able to field on our own – outside money combined with our traction would have ensured we exploited the opportunity that was in front of us.

If (and when) I start my next deal you can bet that I will participate in an early stage accelerator like TechStars, Y Combinator or 500 Startups. After I get my inexpensive ‘social proof’ from an accelerator I will immediately raise a small angel round (likely a convertible note) from folks like Dave McClure, Jason Clavier and Aydin Senkut. And then, as soon as possible, I will attempt to raise a Series A from a top tier VC like First Round Capital, Benchmark or Andreessen Horowitz.

Is it possible to build a successful business without going through these three steps? Sure. I’ve done it several times, but I have never built a HUGE business. If you want to build a billion dollar business you are going to need a LOT of help. You are going to need the people you meet in the accelerator, you are going to need the people who fund your angel round and you are going to need the help of the partner you work with at the venture capital firm. You are going to need their help to help you get out of your own way. Very few of us have the ability to scale from zero to a billion and we need the best of the best to help us take our nascent ideas to the next level over and over again. Don’t mess around with you business – trust me – raise money ASAP.

The StartupMuse is Back!

Just a quick programming note – I am going start writing about entrepreneurship on the StartupMuse once again. Expect one or two posts a week. If you have any particular topics or questions you’d like me to write about please feel free to reach out to me directly at

The StartupMuse is on hiatus. . .

When I started this blog back in 2007 I was excited about the prospect of sharing my experiences as an entrepreneur. I wrote posts once or twice a day. Fast forward to 2012 and the reality is that I simply don’t have the time to write about entrepreneurship because I am actively involved with my own entrepreneurial adventure. As a result I am going to stop feeling bad about not writing here anymore – I am going to officially put the StartupMuse on hiatus.

If you want to know more about what I am working on, you can find my writing in one of two locations. First, I helped co-found a new organization called FORA – Future of Retail Alliance. You can ready posts from me and others who are interested in the future of retail. Second, I have started a new personal blog called the Future of Retail where I share my own personal thoughts on the future of retail. Feel free to check both out. I’ll be back here AFTER I change the world of retail.

Is kiteboarding is the new golf?

Two or three years ago I began doing business with a fellow entrepreneur named Philip McNamara. Philip told me about his passion – kiteboarding. I didn’t really think much about it until earlier this year when I was in the Florida Keys and I took a lesson. Afterward I mentioned to Philip that I had tried out kiting and he immediately reached out to Bill Tai and suggested that he invite me to this year’s MaiTai event in Park City, Utah. MaiTai is invite only, but getting an invite is pretty easy if you really want one (i.e. start kiting).

MaiTai is a gathering of entrepreneurs, innovators and athletes who contribute their energy to a shared experience centered around the kiting lifestyle. Friendships are formed in an informal setting as kiters learn from each other’s successes and failures in all endeavors as everyone attempts to master the sport of kiting. The event was started by Susi Mai (pro kiteboarder) and Bill Tai (venture capitalist from Charles River Ventures).

The attendee list was amazing – a veritable who’s who of entrepreneurs – I felt very lucky to be there. That being said, the first morning I spent on the kite I was miserable. Facedown in the snow over and over, I crashed my kite into a couple of other kiters and got pretty demoralized. By lunch I was convinced I would never figure out how to fly the kite, much less figure out how to do it on skis. But Philip wouldn’t let me quit. Instead he pushed me and somehow I managed to start flying the kite. It was soon after that I was able to do it on my skis and all at once it clicked (I have video to prove it). I’ll have to admit I am hooked.

If you haven’t read the Forbes article titled, Kiteboarding: The New Golf, you should give it a read. If you are interested in giving kiteboarding a try, a small group of Dallas entrepreneurs are going to be getting together each month to kite on one of the many lakes in the area – email me.

Turning 40 Update. . .

As I am fond of saying, I turned 39 a year ago – i.e. I am now 40. Back in August I wrote about turning 40 and unknowingly set about changing my life. You can have all of the success in the world, but if you don’t have your health you really don’t have anything. Seven months later I am really beginning to see a difference in every aspect of my life – to be honest I haven’t been this happy in years. So what have I done?

In a nutshell my health has made a 180 degree shift. When I began in July I weighed almost 260 pounds, had high blood pressure and I was generally depressed. Sure things like my business were going well, but I wasn’t really in a position to enjoy it because of how out of whack the rest of my life was. To date I have lost 82 pounds – I am now down to 188 (just four pounds from my February goal). I am running 4-6 miles on the weekends and 3 miles twice a week. I am also taking advantage of our wellness program at work – working out three or four times a week with our trainer. My blood pressure is ideal and I feel more alive than I have in a very long time.

Ironically, it isn’t just my health that has improved – but almost every aspect of my life. Our business is growing faster than ever and new opportunities keep presenting themselves because I am more open to them. My relationship with my children is better because I am more engaged. My relationships with others are better because I am more available and positive.  Finally, I am getting involved in activities that I would have NEVER considered like snowkiting – Bill Tie invited me to join his group in Park City, Utah this week and I will be strapping on a kite when I hit the slopes.

At the end of the day turning 40 was the kick in the pants I needed to get my life back on track. I started out thinking I needed to lose some weight, but I needed to change my life. My journey has just begun, but I wanted to give you an update.

Picture below – me in Marine Corps, me on FOX last year and me now.


Co-Founder of Akamai to Speak at Happy Hour on Thursday!

Looking to connect with other high tech entrepreneurs in Dallas? You might want to check out the Startup Happy Hour event this Thursday at 5PM. Join the MeetUp Group and RSVP Here:

It’s time to get the happy hour rolling again! We’re happy to announce that our guest speaker will be Preetish Nijhawan, Managing Director of Cervin Ventures, an early stage VC firm focused on B2B companies.

Preetish co-founded Akamai Technologies (NASDAQ: AKAM) in 1998Most recently, Preetish was CFO for Neon Enterprise Software. Before that, Preetish was VP of Strategic Alliances at NeoEdge Networks, a video game advertising company. Preetish was also VP, Portfolio and Program Management for BMC Software. Prior to BMC, he was VP, Operations of iVita Corporation, an asset management software startup he helped found.

Preetish has advised senior executives in hardware, software and telecom industries for McKinsey and Company. He also worked for nearly six years in the Electronic Design Automation (EDA) division at Intel in various engineering and program management roles. Preetish earned a Bachelor’s degree in Electrical and Electronics Engineering from the Birla Institute of Technology and Science, Pilani, India, a Master’s degree in Computer Engineering from The University of Southern California, and an MBA from MIT Sloan School of Management.

Dawn of a new day at Yahoo?

I had the pleasure of working with Scott Thompson and his team at PayPal back in 2009 and 2010. I was impressed by his energy and drive – if I wasn’t building my own startup I would have jumped at the chance to work with him. Today Yahoo announced that they have appointed him their CEO. Bravo Yahoo! Scott is just the sort of leader Yahoo needs. Scott has a great understanding of payments, shopping and mobile – everything I think Yahoo will need to help turn around public perception of the iconic internet brand. Additionally, Scott will be able to attract the right people to join/rejoin the Yahoo team. I know I would be thrilled to work with him again. Best of luck Scott and best of luck Yahoo!