Last year, First Round Capital made an announcement that I thought was pure genius: FRC was the first venture fund to offer an exchange fund for entrepreneurs. Portfolio company founders were given the option to trade a small piece of stock in their personal venture in exchange for a piece of the action of the larger pool of all FRC companies that choose to participate. This is a great way for founders to help hedge personal risk, and it probably encourages more support/camaraderie across the portfolio. If I was an entrepreneur actively seeking a venture round, you can be sure I would go talk to First Round.

I believe this same approach can and should be applied to incubator programs.

I like the model at the incubator level because it provides a small hedge on what is perhaps an even riskier endeavor that raising a VC round (working for peanuts for three months with no guarantee of even an angel round). In fact, the exchange fund model has been used successfully by founders at later stage companies for years.

If you were participating in TechStars, or Y Combinator would you take advantage of such an offering?

I recently volunteered to help the NYCEDC with a forthcoming project called NYC Venture Connect. NYCEDC and Bloomberg are really doing some awesome stuff to promote entrepreneurship and startups in New York and I’m happy to be doing whatever I can to support the cause.

NYC Venture Connect needs a summer intern to gather great content and compile resources. The specifics of the PAID position are here and the job will run through August.

If you know anyone in college, etc, looking for a cool gig dealing with startups in NYC please have them apply or get in touch with me for more info.

When do you know it’s time? When do you know it’s really time to start the business, shut the business, expand the business, invest in the business, quit your job, end the job search and take the offer on the table, leave your spouse, marry your girl/boyfriend, move to Australia, come home from Australia? When do you know?

“A warrior accepts,” writes Pema Chodron in Comfortable with Uncertainty, “that we can never know what will happen to us next. We can try to control the uncontrollable by looking for security and predictability, always hoping to be comfortable and safe. But the truth is that we can never avoid uncertainty. This not-knowing is part of the adventure. It’s also what makes us afraid.”

I think the only answer to the plaintive poignant question of “When do you know?” is embedded in the bit of Buddhist wisdom: You can’t know–not really, anyway.

Maybe the hardest part of leadership—be it leading a company, a family, a relationship or simply your own life—is that often times you don’t know and you still have to act. Leadership in some ways is built on learning to be comfortable with not knowing, with imperfect knowledge, with the inherent uncertainty of it all

-from an awesome new blog, The Monster in Your Head.

I’m re-publishing this post written by Nate:

When a 7 year old tells his mom, “Mom, I can’t do my math homework. It’s so hard. I’m no good at it”, how many parents tell their kid “You need to hire someone to do that for you”.

None.

This is a constant lament though of adults. Especially adults trying to start businesses and their own projects. In any kind of gathering of people talking about starting businesses, the odds are huge that you are going to hear someone say “I have this great idea for a software company, I just need someone to build it. How do I find a technical co-founder and build this business in a couple months?”.

First of all, the relationship between co-founders of a business is very much like that of a married couple. So that’s like asking “How can I find a wife and get married in 2 months?” Sounds ridiculous.

Secondly, why let your lack of knowledge of how to do something ever stop you from what you want to accomplish. Learning math and reading was hard at one point, but we all learned some of it. I remember arriving to math class my Freshman year in high school, and the teacher began with a review of what everyone already knew. Everyone except me. He asked everyone what FOIL stood for. Every single student knew that it was First-Outer-Inner-Last. Except me :)

I tried on my own to learn it, and failed. So I showed up for tutoring every day for about 2 weeks until some of this brand new material started to click for me. And then I was out of the starting blocks.

And most of us continue to learn something new our entire lives. So when do some of us reach this point where we start feeling “you know what, I’m too old to learn something new, and I’m going to have to watch my dream go unfulfilled unless I meet someone else to do it for me.”

I’m not saying it’s easy. I’m not saying you’ll magically get good at this skill you don’t have right now. But you can probably learn it enough to accomplish at least a baby step of your goal.

Programming is often this skill people don’t have that they need someone for.

I look at my mom. She’s almost 70. Hasn’t had a programming class or even the desire to learn to program her entire life. But she wants to sell flip flops. She has a few things she really wants like to display a slideshow of her wares. Problem is, inserting a slideshow into a Shopify page isn’t an easy task for someone like her. Where do you insert this chunk of weird bits of code? Well she figured it out. She didn’t wait around for someone to do it for her. She left some extraneous characters of course in her html :) which is then easy for someone who does know what they are doing to remove (I’ll leave it for now as an example)

I look at the example of starting Inkling. We knew we wanted to make work places more efficiently democratic, and prediction markets were a means to accomplish that. We also knew we wanted to use an algorithm to make the tool easy to use. The great part was this algorithm was out there for everyone to read. The bad part was a very smart economist wrote it.

And so I had this scientific paper laden with math describing something that I wanted to do but was pretty foreign to me. I tried to get a friend with a PhD in Math to help me out, but he was busy with his post doctoral stuff at MIT. Only one good way to make sure it gets done then. Learn it myself. Took some time. Hurt the brain a bit. Doubted myself a ton. But eventually it clicked, and we had it working, and were on our way.

Don’t get me wrong about building good teams though. I very much believe in partners and finding awesome people to collaborate with. I have people at Inkling that do many things a thousand times better than I could ever do.

But if I didn’t have them, I refuse to sit on my hands, hoping to meet someone to help me accomplish what I want to do.

Even the act of learning a new skill for the sake of accomplishing your goal, is a great way to meet that partner of yours. So your project might start off rickety because of your amateur hands, but you’ll start surrounding yourself with people either through classes, or conferences or online forums, wherever, who might just make the perfect spouse to take your seedling and grow it into a success.

If you have the resources, then by all means hire the right talent to get your projects done. But if you don’t, if I don’t, I refuse to let my dreams slip by.

Being home for the Holidays means lots of driving in my family. Driving, in turn, means listening to the radio. Right now, listening to the radio means listening to Lady Gaga. As both my sisters are big fans, I started doing some research into the Gaga phenomenon and have been utterly amazed at both the rapid rise and business acumen of the Lady. Even Mayor Bloomberg is a fan.

And apparently I’m not the only one interested — Victor Niederhoffer has a great post on Daily Speculations titled, Lady Gaga: 10 Things We Can Learn

For the uninformed, Lady Gaga has now sold 4 million albums and 20+million singles tracks. Yet, as recently as 2005 she was just a lowly NYU Student. Here’s a pretty spectacular piano performance she gave while attending New York University:

Reading Niederhoffer’s post I was immediately struck by how much startups can learn from Lady Gaga. Read his full post, but three things in-particular jumed out to me as related to startups:

1) 1000 true fans. If you have read Kevin Kelly’s thoughts, it won’t surprise you that Lady Gaga has gone on record numerous times attributing her success specifically to an early community of devoted gay fans.

2) You have to be technical to be a success. Lady Gaga is no Milli Vanilli. She is a seriously talented technical singer and can write her own tracks. She is both a maker AND a manager.

3) What’s in a name? Changing her name from Stefani Joanne Angelina Germanotta to Lady Gaga allowed her to create a tremendous brand. Was Lady Gaga a Googlewhack? I bet it was. Gaga is also two syllables — I remember once having Luke Nosek tell me that the Founders Fund only likes to invest in companies with two-syllable names because they are the easiest to remember and brand.

Batman image via Wikipedia

Jon Steinberg had a great post several weeks’ back where he coined a new term (Approach? Philosophy?); “hackable business development.â€�

For $500 and four weeks of late night emails to eLance developers, you can basically spec and build simple, rough apps that knit or build upon open APIs to create things that are interesting and potentially valuable.  To be clear, you can’t build complicated apps or the next Salesforce.com on this kind of shoestring, but you can achieve the kind of learning, vetting, and experimentation that is left undone if you don’t.

I call this process Hackable Business Development.  If you’re interested in a platform or service from an intellectual, career, or partnership prospective, you simply must build on it.

I love Jon’s concept, especially because it resonates with two things I have been thinking about: tinkering platforms and Batman. Tinkering platforms I’ll talk about in another post.

“Batmanâ€� is the perfect metaphor for an increasingly common entrepreneurial archetype I’m observing. Nearly everyone I meet in the tech/media space these days seems to have two lives: their ‘9 to 5 identity’ typically working away to collect a paycheck and then their ‘late-night identity’ where they throw on the entrepreneurial cape and crank away into the wee hours working on their own startups and side projects.

From my observations many of these projects are like micro startups, small in scale and often involve three of or four individuals teaming-up and dolling out responsibilities. They tend to work on applications of a simple nature. Projects often involve innovating on API’s and typically leverage word-of-mouth conduits like Twitter. Sometimes it’s even the same teams that work together during the day for “the manâ€� teaming up at night. Nobody gets paid; teams are self-sufficient. Business development doesn’t exist.

The traditional manager’s perspective on this is simple: UNACCEPTABLE. For reasons ranging from conflicts-of-interest to less-focused-teams, managers tend to get freaked-out and pissed-off when they learn that a developer has something else in the works, even if it never interferes with his or her ability to perform their job.

However this is the wrong approach. Developers, designers and the rest of us need our own version of Google’s 20% time. Side projects keep talented folks sharp, motivated and happy.  I think this new era of Batmen is both necessary to move innovation forward and a reality that’s here to stay. Managers are best served to embrace the trend rather than hate on it.

Note: Interesting thoughts here by Sam Lessin on why building on API’s may not be a good thing

if you want to see an example of as perfect of a resume line-item as you can get, look no further than David Sack’s description of his position and accomplishments while at PayPal:

COO
PayPal

(Public Company; 5001-10,000 employees; ebay; Internet industry)

1999 — 2002 (3 years)

As Chief Operating Officer, I was PayPal’s product leader, managed 700 employees, and built many of our key teams.

I was responsible for product management and design, sales and marketing, business development, international, customer service, fraud operations, and human resources functions at PayPal.

During my tenure, we grew payment volume from $0 to $500 million/month and revenue from $0 to $240 million/year. We beat eBay on its own platform, winning the auction payments space. We became the world’s #1 financial website, from nothing. We introduced business accounts and made our users pay. We expanded into multiple currencies and over 80 countries. Finally, we successfully IPO’d and became a public company, before ultimately selling to eBay for $1.5 billion.

Great scene from a recent Entourage episode…Ari goes off on Turtle about business plans (go to minute 15:22)

…and here’s another funny clip with Vince talking to Eric about Facebook

I’m not a morning person. I’ve always believed I’m most productive after about 8pm — something that I have tried to change a few times, but to no avail.

However, reading Paul Graham’s most recent essay was an eye-opener and, I believe, explains my nocturnal habits. Simply put — people who are at least partially on a “makers” schedule require periods of uninterrupted work. Since it’s almost impossible for me to achieve such periods during normal business hours (on manager’s schedule) it makes sense that I’d find focus at off hours when I’m much less likely to be interrupted by phones calls, emails and the like.

There are two types of schedule, which I’ll call the manager’s schedule and the maker’s schedule. The manager’s schedule is for bosses. It’s embodied in the traditional appointment book, with each day cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you’re doing every hour.

But there’s another way of using time that’s common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started… continue