John Kluge Redux: Entrepreneurial Life Lessons

This is part of my various Series on Entrepreneurial Culture and Mentorship.

I recently wrote this post about the passing of the entrepreneurial giant, John Kluge. 

Today I want to share excerpts from this piece in the Columbia Forum that relayed some delightful stories and experiences from John Kluge's life. These priceless anecdotes and pearls of wisdom were originally relayed by Kluge's own son in a piece entitled John Kluge: Stories.

Entrepreneur or not, I am certain you will fund these vignettes enjoyable and perhaps instructive. I know I did.

My stepfather didn’t believe in education.

He wanted me to stop going to school after the eighth grade. That was all the education he thought necessary for a young man. He wanted me to go into the painting business with him. He already had his own children working for him, so I knew I would always be a second-class citizen. I would always be under his thumb. I convinced him to let me go on to high school, at least for one year. And so I skipped part of eighth grade and went straight to high school.

I left home at fourteen.

After my first year of high school, my stepfather still wanted me to quit and join his business. I wanted to get more tools for bettering myself and he didn’t believe in that, so I left home at fourteen.

There was no big scene. I still stayed in contact with my mother, and I never had any dislike for my stepfather. I was never really mad at him, because if it weren’t for him, I wouldn’t have come to this country and I would have been in Hitler’s army.

Over the years, I don’t know whether I was looking for a father, but I had a number of older men who were very generous with their time and advice. I listened to them, and they were good substitutes. Allen Crow was one. Teddy Prentiss was another. Elmer Auden, Judge [Allan] Campbell. These were all men I respected and learned a lot from. But my stepfather, after I finished my first year in high school, said, “No more schooling.” I either had to go into business, or I would have to leave home. I chose to leave home.

I was never afraid of making a decision.

It was an immediate decision, even though I didn’t know where I was going to sleep the first night. I was never afraid of making a decision, regardless of the consequences. For a few days, I slept at the school and washed cars for food money. I waited until after dark so I could shower with the hose. Then I went to the home of one of my teachers, Gracia Gray DaRatt. She taught typing and shorthand in high school, and I took her classes and became quite proficient, which served me well.

James Lin and John Kluge, with three of the Detroit civic leaders who organized their tour of the city. (Lin, center front; Kluge, back, to the right of Lin.)James Lin and John Kluge, with three of the Detroit civic leaders who organized their tour of the city. (Lin, center front; Kluge, back, to the right of Lin.)I washed Mrs. DaRatt’s car, and she asked me what I was doing. I said, “Well, I’ve left home,” and I told her why and she took me in. She was a great woman but not someone to make a show. She said, “Here’s the refrigerator, here’s your bedroom, here’s your bathroom,” and that was it.

At fourteen, you’re a boy. Between fourteen and eighteen, I became an adult. I grew up very fast. While there was never any pressure, I wanted to be what Mrs. DaRatt wanted me to be, and that was an outstanding student who would go to school beyond high school. She was a remarkable woman, and she encouraged me. She opened up my world. Remember, I was still rather constricted, in every way — in language, in religion, in education. She taught me manners, “the graces.” She even introduced me to American foods, such as the baked potato. Corn. She was a very bright woman but quite pragmatic. Not a lot of warmth on the surface. If I had a cold she wouldn’t say much, you know. She didn’t pamper me at all, and that’s good. She hoped that I would be an independent spirit, which she was. Tough American stock. She was all black and all white, nothing in between, and as you’re growing up that might be a very good influence.

I listened to them and I learned.

I remember Mrs. DaRatt would have people over — doctors, businessmen, judges. I listened to them and I learned. Allan Campbell was a friend of hers. He was a judge, the founding dean of the Detroit City College Law School, and one night Judge Campbell was talking to a realtor about a piece of property he owned. You have to remember this was during the Depression, and the judge was going to lose some money on this property. And I remember this distinctly. The realtor said, “Well, you can do so and so and save some money.” The judge said, “Oh, yes, I can do that legally — but not morally.”

Things like that, these were sign posts to me. It’s not how successful you are. Did you do it without being either a con artist or a person who was so burned up with success that anything goes? I don’t feel comfortable with “anything goes.” Never have, never will.

You know, the teacher said an interesting thing to me once. She said, “John, you’re one of the few people I know who can learn from other people without going through the experience yourself.” I felt that what they said — the judge, all these others — was so important, so meaningful, I could and should apply it to myself. It became important to do that.

Living with Mrs. DaRatt, little by little I formed a conclusion that I wanted to be somebody but not on the basis of cheating or fooling people. It’s been a principle I’ve lived with; I’ve always been much more interested in substance than perception. If the substance is right, I feel that everything is right.

What difference you can make, you should try to make.

In the sands of time, individuals make very little difference. But what little difference you can make, you should try to make. That’s what I’m going to put on my tombstone, because there’s too much avarice in the world, I think. There’s too much competition for things that don’t mean much in the long run. If you make a contribution that makes the world better, not only are you somebody, but you’re implementing. I don’t want to hurt anybody, and I don’t want credit for it. I am not oriented toward getting credit. And so much of that came from the teacher.

In 1953, I was in St. Louis. I’d just closed a deal, buying a radio station in Clayton, Missouri, and I got the news of Mrs. DaRatt’s death. I was the only person at her funeral. It was in the winter time, in Fairhaven, New York, and cold. I had to really take the gravediggers to task, because it was so cold they didn’t want to get out of their hut. I remember so distinctly driving away, and I cried but the tears just froze, it was that cold. Bitter, bitter cold.

She was an inspiration for me. All my life I keep her memory.

I wanted to go to Columbia because it was in New York.

And not because it was Columbia. I knew I’d need a scholarship so I called Allen B. Crow, who was head of the Detroit Columbia Club.

[The following is Mr. Crow’s recollection of the conversation, many years later.]

I received a phone call at home one evening. The caller asked, “Is this the president of the Columbia Alumni Club?”

I said, “Yes, it is.”

“Do you have a scholarship available?”

“Yes, we do.”

“Well, I want it.”

“Do you have any money at all?”

“No, but I’ll earn the rest. I’m willing to work my way through. But I want your scholarship.”

Well, I admired the boy’s pluck.

“These hands will pull me through.”

I applied for the scholarship and it came down to two fellows: Ed Litchfield and me. Ed was on the debating team, and he was very well-versed in the English language, while I really was not. I wore rough clothes and he was very refined. We both went to Mr. Crow’s house for the interview and I said to Mr. Crow, “I’d like to be interviewed second, if you don’t mind.” So Ed was interviewed first. When Mr. Crow got to me, he asked various questions, the usual things. We were in his sun parlor. Then, as I’m walking to the front door, I turned and walked back. I said, “Mr. Crow, I don’t know whether I’ll get this scholarship, but I want you to look at my hands.” They were very rough because I did a lot of work with my hands. I said, “I don’t know whether I’m going to get this scholarship but even if I don’t, these hands will pull me through.” Well, I think that took Mr. Crow so by surprise.

I still think Litchfield should have gotten the scholarship. But he didn’t get it. I did. Litchfield went to the University of Michigan. You know, he became president of Carnegie Tech at a later time. He was an outstanding fellow, certainly better material than I was.

I had little chance to get the scholarship but I did.

The point is, I always felt that I could work my way through, and I did. I didn’t feel the world owed me anything. As a matter of fact, I consider that, even today, a weakness. The world doesn’t owe anybody anything, because it’s all within yourself. I can’t remember where I ever complained about my life. I always thought my life was wonderful. I really did, even when I didn’t have a penny.

But I can’t understand, even today, why anybody in this country who has his health can complain, because there are always opportunities. If somebody wants to work in this country, they can find work. Oh, sure, it may be cleaning windows, maybe cleaning sewers — whatever — but you can find a job.

When I got the scholarship, I wrote back and said it wasn’t enough.

I was realistic enough to know that I needed an increase for me to go to New York. If they wanted me, they would do that; if they didn’t want me, they’d say no and I would have to live with it. Mrs. DaRatt said, “You know, they’re just going to tell you it’s been nice to have made your acquaintance, but you go somewhere else because you’re too rich for our blood.” But that’s the chance I took.

Well, they gave it to me, but it took a month or so to find out. That schoolteacher, she and I would stop at the post office every day — Box 63 at the Ferndale Post Office — and I would look into that little window for a white envelope with blue printing, and one day there it was. I came out to the car, a little Ford, and I showed the letter to Mrs. DaRatt. She said, “I’ll bet they turned you down.” I said, “I’ll bet they didn’t.” And they didn’t. They gave me the double scholarship.

I learn every day, even now.

Going to school is predominantly to discipline your mind. It’s also to encourage you to go on learning throughout your life. I learn every day, even now. Children have a sense of awe and that’s something we should never lose as adults. The people who have the attitude of knowing everything are sad cases. A scholar knows that when he knows everything, he shuts his mind to anything new.

I think a person needs curiosity, and a sense of enthusiasm. It doesn’t matter what you’re enthusiastic about. To be enthusiastic is to be a participant. It’s a sign you’re alive.

I remember getting ready for Columbia.

Mrs. DaRatt said, “You’ve got to have a tuxedo, and even tails,” and she found some for me. I was standing at the tailor’s as they were downsizing the tuxedo and the tails when I heard one of them say, “Isn’t it too bad that so-and-so died?” So I knew these clothes had belonged to someone who was dead. I could never wear them.

My first roommate was Henry Galbraith [’37] , from El Paso, Texas. I kept telling him, “Henry, you go to dances and all this, you really ought to have a tuxedo and tails.” I finally sold him the whole outfit for twenty dollars: five dollars down, five dollars a month. I didn’t need a tuxedo after all. Beautiful material in it, though. The lining was pink.

I came to Columbia with fifteen dollars, and I left with seven thousand.

To get my scholarship, I had to really work — get all A’s and that sort of stuff. When I went to college I didn’t care. I didn’t care about the Phi Beta Kappa or any of those things, because I had three or four jobs while I was in school and a lot of times I wouldn’t sit down to my studies until midnight. I came to Columbia with fifteen dollars, and I left with seven thousand. I guess I got a B-average. That didn’t bother me. I got what I wanted, and it wouldn’t make any difference what my grades were, as long as they were passing.

I was always selling something.

At graduation they had a cemetery full of headstones for everyone in the class, with quotations on the stones. On my stone they put, “I’m wiser. I sold my body for fertilizer.” I was always selling something.

I was a pricer at the John Jay Dining Hall, so I got my three meals. I had a stationery business. Every freshman who comes in wants to write to his friends, or his girlfriend, or his family, on the stationery of Columbia, with his name or his initials and the year he graduates. Being a pricer at the dining hall, I was able to say to students, “Is this your first year?” Yes. “Have you got any stationery?” He might say no. I’d say, “Give me your room number. I’ll be up to see you.” So being a pricer also gave me a place to sell stationery.

I gave personal service. I brought the stationery to them when it was finished. I did that, also, to collect the money. The printer wanted to get paid right away, so I had to collect the money right away.

Gracia Gray DaRatt with what may be the car Kluge bought for her with his contest winnings.Gracia Gray DaRatt with what may be the car Kluge bought for her with his contest winnings.

In 1938, the Detroit Times had a contest, and I won second prize — $2,000. That was a lot of money then! I used part of it to buy Mrs. DaRatt a car.

I also cleaned motor rooms in boats on the river. I would work cleaning engine rooms on Saturday and I’d have grease all over me. It took half a day to get rid of the grease. I didn’t want to come up to the Columbia campus with all that grease.

I represented a shoe company, and I would go around the campus with one shoe under my arm. A guy said, “That’s a good-looking shoe,” and I’d say, “Come on up to my room. I’ve got the other one there.” I represented a clothing store on 114th Street, and I got my clothes at a very deep discount.

Nothing really bothered me, because I needed the money to exist. Being a pricer, I got my meals. With the scholarship, I got my room and tuition and books. Any clothing I needed, any other money I needed, I got from the stationery or the odd jobs. And all the ways I raised my money were honest ways.

I was a gambler.

I gambled with sugar heirs from Cuba, anyone who wanted to play. One day the dean of Columbia College asked me to come to his office. He said, “You know, we don’t understand you. You’re gambling all night and you’re here on that scholarship.” I said, “Dean, you’ll never catch me gambling again.” That’s the first time I realized the dean of Columbia College didn’t understand the English language. I didn’t say I wouldn’t gamble again, I said he’d never catch me again.

I remember playing stud poker and five card, with the first card down and the next four up. One night I had a five up and the next card was a five. The two after that didn’t mean much but the third card was a five — three fives. Just as the betting was really getting hot, there was a knock on the door. We had all agreed that as soon as there’s a knock, all of the cards will go under the table and be cancelled out. So the cards went away and I opened up a book. The door opened and believe it or not, it was a guy who had a headache and wanted some aspirin. I never knew that a headache could be transferred that quickly. So ever since, there have been three fives always landing in my mind.

When I bought the DuMont television stations, they had a Channel 5 in New York and they had a Channel 5 in Washington. I went up to Boston to buy their Channel 5, and I borrowed the money, two hundred and twenty-two million. I said, “You’ve got a week to decide,” because I didn’t want them to shop the station and run up the price. And that’s how I got the three fives together for Metromedia.

They took my appendix out for no reason.

My roommate introduced me to beer. I was pretty woozy from that first drink. We came back to the dormitory and I went to the lavatory — there was just one common one on each floor. Well, I looked in the bowl and there was blood. I ran down to our rooms and I said to my roommate, “I’m dying!”

We went directly to St. Luke’s Hospital and they took my appendix out. I was there ten days and when I came back, we had a powwow on the floor. This one fellow asked me, “Why did you go to the hospital?”

I said, “I was bleeding, the night of so-and-so.”

He took me down to the lavatory and he said, “Which stall?” I showed him. He said, “That’s the night I had a nosebleed.” They took my appendix out for no reason. But while I was there, I met a very nice young woman, a nurse there, and we went out for some time. So something good came out of it.

“Outstanding people want to be with outstanding people.”

Columbia, I think, is a great institution. Nicholas Murray Butler [Class of 1882] was president of the university while I was there — both before and after, until the 1940s. One time, I asked him, “Dr. Butler, how is it you’re able to keep some of these professors here?” He said, “I’m going to tell you. Outstanding people want to be with outstanding people. They don’t want to be alone. It doesn’t stimulate them.” I think he’s right, and Columbia’s had some great people.

When you have nothing, why not take a risk?

There was a professor, Armin K. Lobeck, and he was in geology. He mesmerized me, my second year at Columbia. He made geology so interesting, I thought I would become a geologist — specifically, a paleontologist —and would probably work for an oil company, traveling the world. But in my third year and then, reinforced by my fourth year, I thought it over and I decided I wanted to go into business. I think basically I always wanted to go into business, but this geology course was so interesting, Professor Lobeck made it so interesting, that I darned near changed my mind. If I’d gone in that direction, I can tell you one thing — I would have been a wildcatter. My instincts are always to take a risk. I like taking risks. I guess it’s like an addiction. My addiction is taking a risk. When you have nothing, why not take a risk? You can only fall on your face.

I know this sounds crazy, but I don’t really like a sure thing. It doesn’t give me any excitement. As I got older, the risks became more calculating. I felt they would be worthwhile, they would succeed, and it often turned out that way.

And though I like risks, I don’t go into them unprepared. I think about them a lot, and I try to read as much as I can. I’m an information junkie, a news junkie. I paid nine dollars once for a New York Times in Iran. I gather information and I consult with my people but then I have to make that decision.

Most often, I make it on the basis of — will we add something to this business? I am oriented to improving a product or service. Just me-too business, that’s not interesting to me. Every business I’ve ever been in, my thoughts were always to improve what they’re doing. It might not be successful, but I love taking a risk. I really don’t like a sure thing. That doesn’t give me any thrills.

© 2009 Winterhouse

The photographs that accompany this piece are drawn from the papers of John W. Kluge ’37, held by the Kluge Center at the Library of Congress.

Attention NYC Students and Startups: Time to Gear-Up for HackNY October 2010!

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Hackny_winners

I was talking to my friend and colleague Chris Wiggins today about the upcoming Hackathon. Chris, Evan Korth and Hilary Mason as you may know are the visionary founders of HackNY. If you haven't heard of it, it's perhaps one of the best opportunities for student hackers to dive into the startup scene and for startups to identify super-talented student hackers. Read all about it below and check out this awesome video to get a taste of what these hackathons are all about. Here's what you need to to do to apply:

ATTENTION ALL NYC-AREA STUDENTS AND STARTUPS:

hackNY is thrilled to announce the fall 2010 hackNY student hackathon October 9-10!

In April, more than 200 students from almost 40 NYC-area schools participated in the first ever NYC-area student hackathon. Some of NYC’s hottest startups presented their APIs, shared their datasets, and helped organize students into teams of coding monsters to work on projects of their own design. 24 hours of pizza, caffeine, and intense hacking later, teams demo’ed their code for appreciative judges from the NYC startup community. Winning teams presented at the New York Tech Meetup in front of an audience of hundreds of NYC area technologists, and several participants went on to join the 2010 class of hackNY Fellows, interning at NYC startups. For more about the Spring 2010 hackathon, see the FAQ or the movie by Eric Wu, official hackmeister of the Yahoo Developers Network.

The Fall hackNY hackathon will be October 9-10, back at NYU’s Courant Institute; we look forward to seeing what members of the NYC-area student hacking population will create!

Hackers: please hack on whatever you want but if you’re competing, we
are only accepting hacks based on APIs or datasets presented at the start of the hackathon.

STUDENTSRegister here.

STARTUPSApply here to present at the Fall 2010 hackNY hackathon. You will be asked for your startup’s name, a description of the API or dataset or other tech you’d like to demo, and availability to help organize teams among the student hacking population.

ABOUT HACKNY: hackNY is an initiative founded to federate and mentor the next generation of NYC tech all-stars. During the summer we organize the hackNY Fellows program, including internships with NYC-area startups as well as a lecture series and housing. During the school year we organize student hackathons to introduce students to fellow members of the hacking population and to the exciting startups in NYC where their skills are enthusiastically needed. For more information just email info@hackNY.org.

ABOUT HACKING: note that all hacking will be of the awesome variety, not the evil variety. Thanks.

 

John W. Kluge, 95, RIP. Entrepreneur, Benefactor to Columbia University

John jluge

John Kluge, entrepreneur extraordinaire and one of the great benefactors to Columbia University, the University of Virginia, and the Library of Congress has passed away. 

Of modest means and son to a family of  immigrants from Germany, (where he himself was also born), Kluge was given a chance at a college education by Columbia University in the early 30's- receiving a scholarship that allowed him to attend and receive an Economics degree in 1937.  He was never to forget this opportunity and its significance to his life.

The cumulative donations he has made to Columbia during his lifetime, and now, upon his passing, total in excess of $500 Million. All of this money was donated by him for the express purpose of providing financial aid.

There are  many stories today that cover his extraordinary entrepreneurial career in the press. You can find a few of them  here, and  here. The best one, however, can be found here, and was written by his son.

I will simply leave you with a few references to quotes he made in the rare interviews he granted over the years. I need not also elaborate on how important I think it is for Universities to do all they can to encourage and cultivate the entrepreneurial spirit in their student body. 

"Work isn't really work for me, I didn't think I've ever really 'worked' in my life, because 'work' to me means that you're really doing something that you don't like. I hate to tell you this, but I've never liked the weekend in my life. I was enthusiastic about Monday morning from the day I left college."  

John Kluge (as told to Forbes Magazine in a 1990 interview)

“Young entrepreneurs should spend an awful lot of time thinking about what they want to go into,” he added. “The last thing you want to do, unless it’s a very unusual situation, is to invest money. You should have a fund of knowledge of something and out of that you make up your mind. Money is not a fund of knowledge.”

Source: Bloomberg

"Kluge “wasn’t particularly a man who wanted to be rich or enjoy a grand life,” Patricia Kluge, one of his ex-wives. “He took a small idea and turned it into something grand.”

As told to Washingtonian Magazine by Patricia Kluge, one of his ex-wives, in 1990.

“In 2007, Kluge pledged a $400 million donation to his alma mater, Columbia University in New York City, designated for financial aid to students. The gift was the largest in Columbia’s history and, according to the Chronicle of Higher Education, the largest ever to be earmarked exclusively to help students afford tuition.”

Source: Bloomberg

Respecting OPM

Kid middle finger

This is part of my various Series' on Angel Investing, Venture Capital and Entrepreneurial Culture

Every entrepreneur who has sought to raise capital at some point in their career knows that sometimes it's just really hard to get other people to invest in your startup. Also, depending on who one approaches, the reasons for this difficulty can of course be anything and everything. Furthermore, although some angels or vc's will tell you exactly why they are passing- most will simply not tell you the whole story. So whether it's the economy, the market, the team, you, the technology or any other perceived weakness, the entrepreneur sometimes keeps spinning his wheels and doesn't necessarily see a pattern forming- (if there is one at all). In today's post, however, I'm going to highlight a very specific problem that I haven't seen discussed very often by way of the following real-life scenario:

I know one fellow who has been hawking an investment in his startup in the healthcare space for at least 18 months. Not a single angel or vc has shown a scintilla of interest. He nevertheless persists and shows up at every imaginable investor forum or event he can find. Some part of me admires his determination for sure, but another part of me wishes he would take more stock of his situation. In his case, I think investors shy away from him for two reasons. First, his technology is too early and un-proven and he needs to show more proof of concept. But secondly, I think the investors perceive that he does not really care too much about returning value to them. He talks past them in conversations and the impression he leaves is of a person who isn't after building a long-term relationship in the least. He's definitely throwing off the vibe by everything he says and does that he wants to conduct his "proof-of-concept" experiments on someone else's dime- and it doesn't matter where it comes from- so long as it's not from his own pocket. He certainly won't put any of his own savings in the mix nor will he approach his family and friends. If there ever were an example of a friends-and-family-round, this would be it. Yet by insisting on relentlessly going after outside investors, he's signaling that he's all about OPM (other people's money), and that he does not have confidence in the outcomes.  This is definitely not the right approach or mind-set to have if you are looking to raise money. 

In my experience entrepreneurs with a sense of loyalty and obligation to investors have the right mentality. My experience is that most entrepreneurs who actually do get funded, in fact, possess this mind-set. Ones that don't seem to get weeded out right off the bat or at least after their first venture. 

An extreme example of this type of commitment was shown by Ev Williams, (currently CEO of Twitter), who returned all his investors' money after his effort with Odeo did not pan out as hoped. He then gave all of these investors the opportunity to invest in his next venture, which happened to be Twitter! On a much smaller scale, a first-time entrepreneur I backed who's efforts did not pan out recently returned 2/3 of my investment to me though he certainly did not have to do so. It was an impressive gesture that took me by surprise and I'm very inclined to back him on his next venture. 

Of course these last two are extreme and unusual examples. But having been on both sides of this equation (as an entrepreneur raising money and as an angel investor investing in other people's ventures), I'm merely pointing out that investors have a keen eye for whether someone they back will feel a keen sense of commitment to the investment and the investors. 

Everyone in the early-stage ecosystem knows this is a super high-risk game and we're all big boys and girls after all. But if there's even a whiff of the general lack of concern about someone's else's investment on the part of a prospective entrepreneur- most investors will pick up on it right away. 

Discussing University Entrepreneurship in NYC with MIT's Entrepreneurship Review

Wall Street Bull

I was recently interviewed by MIT Entrepreneurship Review, MITER, a very cool new online journal covering the topic of innovation in and around the university space. One of MITER's founders, Erdin Beshimov, a Sloan MBA student formerly with Polaris-backed startup Experience and I had a good conversation about university entrepreneurship generally, but with a focus on all the good things happening in NYC.

I told him that whereas we still have a lot of work to do-  we are making great strides with university entrepreneurship in NYC of late.

For the full interview, click here.

Mapping the Whole Venture Ecosystem (or my new life as a Venture Cartographer)

                               Venturemaps_widget
This is part of my various series on Venture Capital, Angel Investing and Entrepreneurial Culture.

It all started when it occurred to me that we were missing a nice visual map of Silicon Alley's early-stage ecosystem available for everyone to use. Entrepreneurs were always asking me about various angels and VC's and I just thought that such a map would be a good resource to which I could refer people. I also thought that adding the twitter addresses of all these investors would be a nice feature as well. So one night I did just that and mapped out New York's early-stage tech investor ecosystem and posted it here on my blog.

After receiving so much great encouragement and so many submissions and corrections, I thought I'd do the same for our neighbors to the north- my old stomping grounds- Boston! That took me a bit longer, of course, because the ecosystem is quite a bit larger than NY's coupled with the fact that I couldn't do most of it from memory. I haven't lived in Boston for over nine years now! 

Well, the encouragement and emails kept flowing. There was a real need for this. No one enjoyed wasting hours looking various funds up online or clicking through some spreadsheet or flipping through one of those venture capital directories for that matter. I knew then that I had to take the next step into what appears to be a new discipline- I think I am going to call it Venture Cartography.  :)

The Silicon Valley/San Fran map was soon to follow and I'm happy to say it is now up and running! Corrections, submissions, etc. more than welcome as usual. Bring it on!

At this point, however, I realized I needed help. I really wanted these maps to be interactive and provide richer information for us all. So I gave my friend Shane Snow a call. He is a super-talented entrepreneur, hacker, designer and journalist extraordinaire who can basically do anything. 

Our collaboration has resulted in this interactive map, which is a precursor to us mapping the venture ecosystem of the entire world in its component parts. Now all you have to do is just click on the city you are interested in and then click on any investor to get a good understanding of his or her background, investments, blogs, opinions, twitter-feed and the like. 

We've put a lot of effort into teeing this up, but this is meant to be crowd-sourced on an ongoing basis- so please- send us all the names, the people, the angels, the accelerators and the funds we are missing! You can email us here: info at venturemaps.co   (yep, that's .co, not .com)...

We'll be thankful for all the help you can provide. Apologies in advance to anyone we've left out.

I want to offer a special thanks to the folks who have given us excellent insight into their respective ecosystems, especially the venture investor and irrepressible gadfly Stewart Alsop  (@salsop) as well as my buddy JJ Freitag  (@jjfreitag) over at Azure Capital. Thanks guys!

How Not to Piss People Off When You Present to Them

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This is part of my series on Entrepreneurial Culture and University Entrepreneurship.

I was recently part of a pitch competition event which was actually pretty important for the entrepreneurs doing the pitching. I saw some things going on which frankly amazed me. Some were extremely humorous but frankly some troubled me because in several instances the presenters started royally pissing off a few of the judges. Obviously no one caused a scene or was carried out on a stretcher- but as a result, some young entrepreneurs with some very decent businesses blew themselves up and were eliminated in the closed-door session afterwards. I was of course inspired to write this only slightly tongue and cheek post with some real suggestions about how not to piss off people to whom you are presenting. I hope this helps.

  • Don't start all your responses to questions with the word "So". You really do come off sounding pompous and signal that you have never operated a business.  ie., "So I conceived of this idea whilst swimming across the Hellespont with a good friend from B school", or, "Soooo we're thinking that the pre-money valuation is.....". This will mostly piss off any entrepreneur/investor in the room over the age of fifty.
  • Don't say "that's a good question" back to the person who asked you the question. It sounds completely inauthentic and ridiculous. One presenter said this to an 85 year-old guy worth $500M+ who has launched some massive businesses in his day. The old fellow reddened visibly but kept his cool (until the closed-door session afterwards where he unloaded on this presenter). Of course he asked you a good question you jackass! He doesn't need you to tell him that you approve of and are judging the quality of his questions. Just answer the damn question and stop pissing him off!
  • If one person is not really going to present don't have them on stage with you. Often in certain student business competitions "co-founders" just stand stiffly to the side of the main presenter, often scanning the faces in the room like a secret service officer working his detail. They look ridiculous and the question surfaces at some point in people's minds- why is this guy standing there? Is he a prop, is he packing heat, is he unable to speak, what value to the venture does he add? It just ends up making people feel uncomfortable and pissing them off.
  • If you are asked a question, don't bob and weave. Either answer the question directly or tell the questioner that you do not know the answer and will get back to him or her. Anything else is disrespectful and will piss off your questioner.
  • Try not to wear a tie, especially if you don't wear one every day- remember, startups are not a fashion show. If you don't wear a tie every day- you will definitely look like you are wearing a costume. Be and dress as you always do. Also, if you insist on wearing a tie, please don't show up with a massive tie knot, (like they wear in London), that has a larger circumference than your neck. It will definitely piss people off!  
  • Don't give a canned talk with slick and practiced answers. Be prepared of course, but also be in the moment so you can really respond to the nuances of what happens during your pitch and the subsequent Q & A session. Be authentic or you will piss people off.

My point in all this is that you can have an awesome powerpoint and be super-prepared for your presentation- but if you piss off the judges/investors- all that effort has gone for naught!

 

For Part 26 in in this Series, click here

Map of Boston's Early-Stage Tech Investor Ecosystem (Updated)

This is part of my Series' on Venture Capital and Angel Investing.

After I posted the recent map of Silicon Alley's early-stage venture ecosystem, a healthy number of people found it to be very helpful and several suggested I do the same for Boston.

Well, here's my first stab at capturing what is just a massive early stage venture ecosystem! Until you lay it out on a map, you just have no idea of the sheer sweep scope of the venture/tech community. Amazing stuff really.

Though I lived and ran my first business from Boston for a number of years, I'm going to ask for your help again- especially from the Bostonians among you! I'm sure I have made plenty of errors, I definitely need the twitter addresses of those investors that tweet- and I'd love to hear from the angel groups and angel investors in Beantown. Please keep the twitter addresses coming!

I'll be updating the map periodically based on people's feedback and will eventually put all these maps on an interactive and hyper-linked template.

As the print is currently quite small due to the sheer size of the map, simply click on it and it will open in a separate window. You may then use your zoom feature or simply click it again to enlarge once more at that point.

Looking forward to your feedback!

Boston Early Stage

For the next post, a crowdsourceable map of the global entrepreneurial ecosystem, click here.

Map of Silicon Alley's Early-Stage Tech Investor Ecosystem (updated)

 

This is part of my various Series on Venture Capital and Angel Investing.

In that I am a heavy user of mapping software and think programs like MindNode are excellent visual aids, I decided to put together a first draft of the early-stage tech investor ecosystem here in Silicon Alley as a resource for entrepreneurs. As this is a first stab, I would ask your help in the comment section of this post letting me know about any early-stage investors I have left out and/or about any corrections of errors you come across on this map.

As the print is quite small due to the size of this map, simply click on it and it will open in a separate window. You may then use your zoom feature or simply click it again to enlarge once more at that point.

Looking forward to your feedback.

 

YOUR EARLY-STAGE NYC COMPANY

For the next post in this Series, click here.

 

Evening Read: 6-10-2010

Weekend Reading 6-4-2010

Columbia University Hosts Hatch Match 2010

Logo-hatchery Logo-columbia_university

Join us at Columbia University for an evening of facilitated networking with New York’s leading web/Internet/IT investors and advisors.

Thursday, June 3rd 2010
5:00 – 6:00 pm  Registration + Networking
6:00 – 8:00 pm  Investor Meetings + Networking
 
The Event will be held at Low Library on Columbia University Campus

Register: Here

HOW THE EVENING WILL WORK:
We’ll have two rooms, a general networking forum in the Low Library rotunda and a private back room area where investors will be set up at individual tables.  After checking in at the event registration desk, head to the private room to sign up for your investor meetings.  Sign-up is on a first come, first serve basis, and each one-on-one meeting lasts 5 minutes, so arrive early and have your elevator pitch honed!  After your investor meetings are over, return to the general networking forum where advisors and other entrepreneurs will be mingling.  Light refreshments will be served.
 
WHAT IS COLUMBIA HATCH MATCH?

What defines a great networking event is meeting people you want to meet and having great conversations that stimulate action.  Columbia Hatch Match is designed to help you do just that!  Through active, facilitated networking, Columbia Hatch Match makes introductions and provides you with access to more than 30 advisors and investors in a format that’s convenient, efficient, and fun.

Columbia Hatch Match is an annual event, organized by Columbia Technology Ventures and The Hatchery.  Columbia Hatch Match aims to bring together entrepreneurs, investors, and other parties interested in growing and being part of New York’s vibrant internet/web/information economy.  This year’s event is being co-hosted with the Center for Technology, Innovation, and Engaged Community at Columbia University's School of Engineering and Applied Science, by Columbia Business School's Lang Entrepreneurship Center, and by the Center for Advanced Information Management.

Morning Read: 6-1-2010

Profiles in Entrepreneurial Courage (2): A Family Affair: Jules Lambert (and his family!)

Jules_lambert_RV

This is part of my Series on Entrepreneurial Culture.

I recently had the pleasure of getting to know a remarkable entrepreneur by the name of Jules Lambert, President of PROBAR.  Jules was telling the story of his entrepreneurial journey, which, as is the case with most “natural born-entrepreneurs”, was essentially one and the same with his personal journey.

His entrepreneurial odyssey is as varied as they come. It took him from his native Northwest Washington all the way to the Ukraine, Russia and back- only to begin again with a journey that essentially saw him circumnavigate the entire expanse of the United States.  In fields as varied as personal health and wellness to family-owned kitchen and bath design/build firms to the food industry, his distinctive brand of ingenuity, willingness to adapt to any circumstance and unwavering integrity has carried him through the ups and downs. As I do not have sufficient space here to relate his entire tale, I will begin at what was perhaps the most critical juncture:

In 2004, Jules, his wife and two daughters found themselves in a very tight spot. After almost six years in the family business in their hometown of Bellingham, WA, they sold the house and everything they owned and moved to Salt Lake and settled into to the basement of his in-laws.  Sara was 7 months pregnant and Jules was looking for his next move- but money was extremely tight. Circumstances were in fact critical. As always, he remained positive, kept his chin up and was out in the field talking to people. Through one chance conversation he was introduced to the founder of PROBAR, a Utah-based maker of great-tasting (I’ve tried them) and nutritious bars containing 15 whole foods that are 100% vegan.  Although he had no direct experience in the field, the owners saw something special in him and the CEO, Jeff Coleman made him a simple proposition: Sell bars and we’ll figure out the rest later.  If not, well - no harm, no foul.  As the first full-time employee/commissioned sales person for the company, Jules set out to build the sales and found immediate opportunities to implement systems and structure to the foundation of the new venture.

Jules and his family did not take this opportunity lightly. Recognizing this as a major opportunity in their lives, they, as a family, were going to make the most of it. Jules, his wife Sara and their (now) three daughters proceeded to embark on a two year road trip aboard a 100 sq. ft. RV bedecked with the PROBAR logo and provisioned with loads of cases of the PROBAR product. (You can see the photos of the family and the legendary RV above and below this post.) Five months into the epic journey, Jules parked the RV outside a birth clinic near Boston and Sara gave birth their first son, Nicholas in Milford, NH. Ironic but unplanned, Nicholas followed his father's footsteps as Jules was born in a VW bus 32 years earlier en route to a birth clinic in the Pacific Northwest. Embracing the gypsy lifestyle completely, Sara proceeded to home-school their daughters and Jules proceeded to sell and promote PROBAR all across the United States while crisscrossing the country.  It turned out to be a transformative journey for the Lamberts and for PROBAR.

Today Jules is the President of PROBAR and is one of the owners of the company. During his tenure, he has, along with his colleagues helped transform PROBAR from a small, single product organization selling to a regional audience to an innovative natural foods company on a mission with 18 products on shelves across the US and Canada.

Here are some additional items of interest about both the company and the RV journey:
*PROBAR now has 40 full-time employees
*PROBAR manufactures all of its own products
*Jules and his family traveled to 48 (mainland) states while in the RV - the RV wouldn't fit on the ferry to Hawaii, but it might on the Alaska Ferry!
*Backing up on a NYC highway to avoid one of the low overpasses is very difficult at night - but the kids never woke up despite the passing, honking drivers.

*Mission: PROBAR® creates delicious, convenient, healthy, plant-based food products. “We strive to become the leading provider of REAL FOOD choices, always maintaining our commitment to quality, sustainability, and fantastic taste.”

*Core Values at PROBAR: “Treat business like you treat family. At PROBAR® we recognize that growing our business goes hand-in-hand with nurturing relationships and encouraging personal growth. We create meaningful, long-term connections with our employees, vendors and customers in a community where trust rules. PROBAR® is not just a job, it’s a shared passion.”

JulesLambertCloseUp

Morning Read 5-26-2010

A New Style of Russian Roulette

Putin_smiling
Emilianenko Levchin Brin_Sergeo_russia Chatroulette
  Arlovski Demidov Yuri_milner_small Vitali_Klitschko Prokhorov_and_girls

This is part of my ongoing Series on Entrepreneurial Culture and Venture Capital.

In the tech world there was of course Sergey and that little pet project of his (and Larry's) at Stanford we came to know as Google. Then there was Max and his partners- unfurling the behemoth of PayPal and then Slide.

In the fight game Andrei Arlovski appeared suddenly out of nowhere, shaking-up the heavyweight division in the UFC with some magnificent wins. But then came the ascent of the legendary fighter Fedor Emilianenko, also known as "The Last Emperor", who may be the greatest mixed martial artist the world has ever seen.

In boxing the amazing Klitschko brothers, Vladimir and Vitali, wear practically all the world's heavyweight championship belts between the two of them. Vitali also happens to hold a PhD and I am told both play a mean game of chess.

In high stakes poker Ivan Demidov exploded on the scene in 2008 making the final table at both the World Series of Poker and World Series of Poker Europe.

In chess the Russians have of course been absolutely dominant for almost a century. Kasparov went out on top as the world's #1 a few years ago, is running his own political movement, and now is throwing his support to his old nemisis, Karpov, in the latter's bid to become the new President of FIDE, the world chess federation.

Here in the US, the NBA has now cleared mega-billionaire Mikhail "The Giraffe" Prokhorov's purchase of the New Jersey Nets (not to mention the major stake in the Brooklyn arena in which they'll be playing). Any whiff of oligarchism is off the rose- this guy is 6'7", likes to jet-ski (check this out) and was wrongfully arrested a while ago in France for traveling with too many attractive women. They erroneously thought he was pimping. He was just living his life.

That brings us to the VC game where Yuri Milner and the boys at Digital Sky Technologies have made a huge splash. They swaggered in with some Goldman Sachs polish, rolled up in limos and started laying massive bets all over the table. Valuations were suddenly off the charts. Liquidation preferences? They thought you meant Stolichnaya. "No thanks, we'll just take common shares." Some players in the VC and PE community looked up bleary-eyed from the dingy tables they'd been playing all night and said, "what the f@#$ just happened?".  Meanwhile, entrepreneurs like the CEO of Groupon were quoted as saying:

"DST is just cool..... I think they're disrupting the entire late-stage investment business. They are good at identifying exceptional companies and getting behind them in a way that entrepreneurs want them to. They don't get all caught up in terms. They are very accommodating." (Source: Business Insider, SAI)

In startups there is of course the phenomenon of high-school drop-out Andrey Ternovskiy, who rolled-out Chatroulette from the cramped confines of a Soviet-era apartment in the outskirts of Moscow after being inspired by the movie Deer Hunter! He is young and raw and not into the usual niceties. Word on the street is that Fred Wilson pulled some strings with immigration to get him over here with a special Visa. Milner too sent a limo to pick the kid up, but the lad wasn't impressed. I hear he's been making the rounds in Cali and is speaking at TechCrunch Disrupt this week. Something tells me this is one savvy kid and he's here to stay.

It also seems to me that much like so many of his erstwhile countrymen, he's having the time of his life playing this new game- and playing it his own way...

На здоровье!

Christopher-walken-deer-hunter1

Columbia University's Lang Fund Selects Four Companies for Funding

Columbia-business-school

This is part of my ongoing Series on University Entrepreneurship.

Fourteen years ago, Eugene Lang '40 endowed a Fund at Columbia Business School intended to help foster student entrepreneurship at his alma mater. Today the Lang Fund is part of a robust year-long process at the business school's Lang Entrepreneurship Center that culminates in the most promising ventures receiving seed funding. Our most recent venture-backed high-flier is Recycle Bank, which is backed by RRE, Kleiner, Sigma Partners, Coca-Cola, and others:

"RecycleBank is a company focused on recycling rewards. It does this by measuring the amount of material each home recycles and then issuing RecycleBank Points based on the amount of materials recycled. These points can be used at participating local and national rewards partners. These partners include Regal Entertainment Group, Green Mountain Coffee, CVS Caremark Corporation, Whole Foods Market, Starbucks and ActiveCause."

Hearty congrats to this year's recipients, all of whom worked incredibly hard. Below I am re-posting the announcement which was made here:

Olapic LLC Olapic helps brides and grooms easily collect all the pictures taken by the guests during their wedding. Pau Sabria ’10, Luis Sanz ’10 and Jose De Cabo ’10

RightsCube RightsCube is the standardized source for all of the world's film and TV rights information. More purchasing power for buyers. More monetization for sellers. Josh Brody ’10

FSA-Store.com: A new website for Flexible Spending Accounts (FSA’s) that allows employees to spend and manage their FSA funds efficiently and with ease.  Jeremy Miller ’10

Peartree Preschool: Peartree Preschool is the first eco-healthy preschool in New York City. Denise Adusei ’10

The four selected were chosen from 26 ventures submitted by students, who presented their ideas at The Annual Spring Venture Showcase (formerly The Lang Fund Final Event) in April. A group of evaluators comprising over 60 mentors, faculty advisers, alumni, and administration heard business plan presentations and made recommendations to the Lang Fund Board regarding final funding decisions.

The Fund makes an immediate initial investment, typically in the amount of $25,000-50,000, in the form of a convertible demand note, in ventures that meet its investment criteria.

Evening Tidings: 4-20-2010