It’s always good to hear an outside perspective. Last night, Boulder, CO-based entrepreneur and investor Brad Feld, the co-founder of Foundry Group, Mobius Venture Capital, and TechStars, gave a talk at the Palace Ballroom in Seattle. The event was organized by Dave Schappell of TeachStreet and T.A. McCann of Gist. The crowd amounted to well over 200 people, and there was a ton of buzz about this event.
As there should be. Feld is the author of a popular blog, Feld Thoughts, and he had a lot to say about his entrepreneurial experiences in the 1980s and 90s, as well as lessons learned as an investor. One of his most recent projects, TechStars, is a mentor-driven seed funding program for tech startups. Last week, TechStars announced it is expanding from Boulder to Boston, MA (where Feld went to school—he’s an MIT alum). So Feld had some interesting thoughts on what entrepreneurial communities and innovation clusters need in order to be successful.
Here are my top five takeaways from the evening:
1. Entrepreneurs are king. “Entrepreneurs drive all the innovation that matters,” Feld said. “Especially in times that are economically difficult, when people in powerful positions are in a ‘woe is me’ state.” (I took that to include VCs and heads of big companies.)
2. Entrepreneurial communities need to focus. “Seattle has a lot of interesting things going on,” he said. “Entrepreneurs don’t have that many focal points to engage in. You want breadth, but you also want depth.” People interested in startups and new ideas need more substantive ways to interact than meet-and-greets, he said. (In terms of Seattle, this would seem to include events and educational programs from WTIA and NWEN, as well as mentoring and seed-funding organizations like EO Seattle’s Accelerator and Founder’s Co-op. And content-based events from media outlets like TechFlash and Xconomy.)
3. It’s not the economy, stupid. “There are two categories of people—those who do stuff, and those stuff gets done to,” Feld said. “It doesn’t matter if things are good or bad, people who do stuff will do stuff.” Don’t view raising money as the big goal, he added. If you’re a business person, “find some nerds you want to work with”—and vice versa. “Just do it. Don’t say, ‘I’ll wait ’til this is better or that is better.'”
4. Web 2.0 and online advertising models aren’t dead. “If you’re smart about optimizing your tools, you’ll do well. It’s the same as two years ago,” Feld said. “I agree there’s way too many of the same thing…that’s usually true. The current cycle is challenging some assumptions.” (I took this to mean the field is crowded, but if your technology and business model are sound, you still have as good a chance as anyone. Committed founders will find a way.)
5. The VC model is still strong. “It’s not broken at all,” Feld said, adding that he’s amazed by all the attention from the media and others on “what doesn’t work when things get tough.” Venture funds are a decade-long process—they take 10 years to sort out winners and losers. The pulling back and self-examination that’s going on now is “probably healthy,” he said.
On a related topic, Feld also pointed out that although it’s cheaper to start a software or Web company these days, “it’s not necessarily cheaper to scale a business to a large company…To create a large company, you still need $20-30 milion…it’s not that $250K gets you there.” At the least, venture capitalists have a strong role to play there.
After Feld’s talk, Schappell announced to great applause, “This time next year, TechStars Seattle really needs to happen.” It will be interesting to watch how that program might scale to different cities—and I’m sure Feld will keep an eye on the Northwest (he’s been an investor in local companies AdReady, Smith & Tinker, Shelfari, and Judy’s Book, and is on the board of Impinj).
But perhaps the highlight of the evening was when someone asked Feld for the best Seattle pitch he’d heard that night. His answer marked the return of the Dildo Dude—a legendary local entrepreneur who’s working on a new, uh, application for vibrating electric-toothbrush technology. As Feld summarized it, “Most sex toys get up to 80 Hertz. His goes to 200 Hz.”
