Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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Monthly Archives for 2010

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Checkingout Checkout...

Googlecheckout Craig Danuloff, the founder and President of Commerce360 (a First Round Capital portfolio company), has some interesting insights into Google's new Checkout product.  Worth the read!

People, Quality and Passion

What is the optimal rate for scaling a business?  Do it too fast, and the momentum is unsustainable. Do it too slow, and the opportunity is lost forever.

Often companies confuse scaling up with growing their team size. I firmly believe that the size of a team is measured in the number x quality x passion of people. Give me a small team of intelligent people who passionately believe in a dream, and I will show you a company with an unfair advantage. If you think about it, this is why small start-ups succeed against big entrenched competition. The real challenge in scaling a start-up is to keep the quality and passion quotient high simultaneously.

This topic came up in a recent conversation with one of my portfolio companies which is looking for a business development person to augment their team.  This is a (stealth) company that has a strong technology base and they are already getting good traction in the market. The team has an impressive pedigree and has maintained extremely high standards in recruitment on the technology front. In fact, the company does not have any "business person" and is looking upon the business development position as a key position to sustain their current momentum and scale up their business. They have interviewed dozens of persons for the spot, and they haven't even come close to an offer yet.

I asked them for a description of the person who would be ideal for this position. Here is what the company came back to me with:

We are looking for a fresh person somewhere between a newbie and a veteran, who is proud of a few key demonstrable successes in previous start-up experiences.

This is a remarkably short and clean job description! And it makes a lot of sense. A fresh person is lean and hungry for growth with the ability to try new approaches. A few key successes, on the other hand, give this person the requisite confidence to get their fouls. And start-up experience helps in working with new situations in the right context.

Often start-ups hire business people for their Rolodex or previous experience in the same area.  While that often is necessary and valuable, this start-up has a good network of investors and advisors, that can open up enough doors, and they are already in a market hurting for a solution to its problems.

The non-substitutable attributes however are extreme intelligence and self-confidence.   No amount of external value-add can make a dumb person smart, or generate perseverance in the face of a hard task; no amount of experience and practice will do that either.  As we know, every start up has a healthy dose of known-unknowns and unknown-unknowns that require business plans to be changed in response to opportunities, customers and competition.  It is the native skill of people, their persistence and their passion that carry the day.

In any case, if you know someone who fits the description, or this person happens to be you, send an email to bizdevjob [at] firstround [dot] com. I will be happy to make an introduction!

Recent investments...

Today we updated our website to reflect several new additions to the First Round Capital portfolio. Specifically, we announced our investments in:

Ambient Devices, Inc
You might have first seen Ambient through it's award-winning "Ambient Orb" - which was based on a technology spun out of the MIT Media lab. However, we are most excited by Ambient's proprietary and patent-pending wireless technology called "bit-trickling" to power embedded wireless display devices. In fact, we believe that Ambient possesses one of the largest, if not the largest, datacasting networks in the United States.  Ambient's vision is to provide the infrastructure to make embedded wireless affordable and ubiquitous.

Attributor, Inc.
Attributor is an early stage company that is enabling new landscape-shifting mechanisms for content publishing across the internet. It is led by seasoned Internet entrepreneurs and backed by some of the earliest investors in companies like Google, Skype and Overture.

Mashery, Inc
An increasing number of companies are exposing web services interfaces through the use of APIs and XML feeds - and an increasing number of developers are building "mashups" utilizing these new web services.  In fact, it seems like almost every new website is exposing an API.  (For example, our portfolio company, Riya, recently launched their API here).   Mashery is developing tools for API providers and users, providing a range of services that make it easier to develop, deploy and use web services.

RockYou

Personal customization is a multi-billion dollar market worldwide ($4B in ringtones alone). RockYou is a market leader in the creation of viral customization services for the web. Their first product (a web service that enables users to create photo slideshows and upload them to other Web sites such as MySpace, Hi5, Friendster, and Xanga) has experienced very strong consumer adoption.  Other investors include Sequoia Capital and Lightspeed Venture Partners.  More about RockYou can be found here and here.

Wikia, Inc.
Wikia, Inc. was founded by Jimmy Wales, a founder of Wikipedia, a site that has become a top 20 web site in every country in the world.  Wikia's mission is to enable communities of users to organize around topics and build valuable guides for consumers. To date, Wikia has over 1200 topics started in over 40 languages, on subjects as diverse as: ancient coin collecting, caring for pets with diabetes, college hoops, and Lost the TV show. You can see the full list of topics at: http://wikia.com/wiki/List_of_Wikia. Much like eBay in the early days, the users are global, they're organizing in vertical communities and they're growing the content at 1,000% a year, despite a very rudimentary user experience. In fact, my good friend Gil Penchina, an eight-year veteran of eBay, has recently joined Wikia as CEO.  We invested in their Series A funding round led by Bessemer Venture partners and  Omidyar Network.

Balance...

Check out this blog post on work/work balance by Howard Morgan (my partner in First Round Capital) - he does an unbelievable job in managing his time...and this post really nails the time allocation challenges of a seed-stage investor!

Calling all chefs...

Cook_1At lunch today, a friend of mine asked me about my adjustment from being an entrepreneur to being a VC. Specifically, what mistakes I've made and what I've learned from them. A great question! Here was my answer:

I think that my one of my biggest early mistakes was the way I listened to company pitches. At first, I would listen to a pitch and try reduce the business opportunity to its raw ingredients. Rather than focus on the entrepreneur's business plan (since every business plan is wrong), I would try to imagine myself as the CEO and get excited about all of the great things I could create from those ingredients.

However, I've come to realize (the hard way) that I am no longer the chef. While I (hopefully) have the ability to influence the entrepreneur and make recommendations as to the menu, I am an advisor and he/she is the chef. As a VC I have to make an investment decision based on my confidence that the chef can create a wonderful meal with the ingredients he has at his disposal...

I invest in chefs -- not raw ingredients.