We sold ClickEquations today. And I’m changing my name back to Lucinda Bromwyn Duncalfe (long story, and no I’m not getting divorced). So it seems like a good time for a fresh blog - and you found it! (My old stuff is still at www.cerealceo.com.) I also have a new email address: lucinda at duncalfe dot me and a new Twitter handle: @LucindaD.
I will help with the transition for a month or so, then spend the summer with my girls (yeah!). I plan to do one more company - let me know if you have a great idea or know someone who does.
I’ve been actively using and thinking about social media and how to use it effectively as a tech start-up CEO for over a decade. Finally, in just the last month, I think that I have achieved a balance of channels that works. I use each for a specific type of communication with a specific audience.
I started this blog a year and a half ago, and hardly ever post. I find it difficult to prioritize the time and, more importantly, I usually cant write about the things that consume me and that I think would be really valuable for those in my community. Id like to write about how we think about strategy and our competition, corporate development and major deals, the capital raising process, the dynamics on our board and with our investors, and our culture and people issues. Mostly, what would be interesting and informative are the big opportunities and big problems. These are, however, exactly what I cant share here. My conclusion is to keep the blog as a place for writing like this but not to worry about posting regularly.
In contrast, 347 updates ago I started using Twitter (@LucindaDH), which works a lot better for me than blogging not that theyre the same thing at all. I started during the SXSW conference when everyone else did (as @LucindaH) but I couldnt get going; I just didnt get it. Then, afraid I was aging, I made a month-long commitment to Tweet. And I was hooked. Its a terrific way to keep in touch with friends, get to know acquaintances and colleagues better, and connect with people beyond my network. I found that the most constructive effect was that it connected me better to other C360 people. And it gives me something to do when Im sitting at red lights.
I do love that I can update Facebook with my Tweets. Facebook is purely secondary for me, but there are a lot of very active users, and I can keep my page fresh through Twitter. It’s a place that you have to be if you work on the Internet, it’s a great way to connect with old friends, but it’s not a main platform for me. There are many other networks that I use but don’t contribute to (Yelp), some I find intriguing but don’t use regularly (Tripit), and those I choose to ignore (MySpace).
Again in contrast, LinkedIn has become critical to my business life. I use it to find new employees, to get background on people I’m going to meet with, and to find paths to get to people I’m trying to meet. It’s great, but it’s more as a database than a social space.
So if I blog as an occasional way to publish long-ish thoughts, Twitter to connect a level deeper, maintain Facebook as a seat at the table, and leverage LinkedIn as a business tool, is that the right mix?
No. This all brings us to Yammer. I love Yammer. Yammer fills a key void in the social media mix to date. I introduced Yammer to Commerce360 a month ago and find it invaluable already. People post really interesting things (to me anyway) like what theyre working on, competitor announcements, industry news, client feedback, that there are cookies in the kitchen, or that they’re going to lunch. Our dev team updates Yammer automatically through our source control system so we can all see hour by hour what’s happening. It all adds up to giving me a finger on the pulse of the organization in a way thats hard to get otherwise, particularly because I spend so much time out of the office. I also think that it helps people to have more visibility into what Im doing. I post things like meetings that Im in, what were talking about, what Im reviewing, client and sales call outcomes, how the board meeting is going, My hope is that this helps everyone stay excited about what were doing, and that how I spend my time is a signal about what is important to the organization.
Which, back full circle to the beginning of this post, is really the promise of social media for the CEO: it can help us connect to our constituencies in a more direct, genuine way.
So, with the addition of Yammer, I’ve finally developed a mix that works:
1. Yammer for inside the company
2. Twitter for quick exchanges with the tech community (and their spouses)
3. Facebook for a broader community
4. LinkedIn the business world workhorse
5. This blog for occasional longer posts
I'm slow finding it, but Bill Burnhams Why Your VC is Acting Crazy is a must-read for entrepreneurs with or wanting to have VCs in their lives. I've unfortunately experienced crazy vcs twice, once with one of my own investors and once with a potential acquiree's investor. Bill outlines some of the things to watch for, but in practice much of his advice is hard to implement. For example, only one of the many funds I've dealt with has been open about the funds own performance issues it just isn't that easy to know what's going on. I think that the sad part of this dynamic is that investors typically position themselves as partners in your business. But true partnerships are two-way, and vcs don't welcome entrepreneurs as partners in their businesses. There is a fundamental imbalance of power in the dynamic between most VCs and most entrepreneurs that the entrepreneur has to accept because of the golden rule: he who has the gold rules. Deal terms formalize the hierarchical structure and interpersonal dynamics vcs tend to be older, richer, and more arrogant than entrepreneurs cement it. The only glimmer of hope is that things do even out a bit with performance. When a company is kicking butt, it has options, which means that a crazy vc may drive you crazy, but he (they are almost always hes) can't really force you to do anything. And over time, as entrepreneurs are successful deal-to-deal, vcs start to view us as long-term investments and treat us more like peers. At the end of the day, though, it is critical that we are aware of where our vcs are sitting. Sometimes they're on our side of the table and sometimes they're on the other side. And it's never in their best interest to point out when they've switched sides.
Today Fred Wilson posted about VC-backed women entrepreneurs. Being one, I thought I’d weigh in.
First, let’s be clear about the numbers. Forbes says (emphasis mine):
“According to the Center for Womens Business Research, the number of firms run by women grew at nearly twice the rate of all U.S. firms from 1997 to 2004. But a new study released this month by VentureOne, a unit of Dow Jones, shows that the number of women-owned or women-run businesses backed by venture capitalists has been on a slippery decline since 2002.
“To be clear, the number of venture-capital-backed,female-owned firms wasnt very big to begin with. In 2002, only 7.55% of all venture-backed companies had women as chief executives. But in the first half of 2006, that number fell to 3.7% (the lowest percentage since 1997). The number of venture-backed companies with women in top management bottomed out at 29.7%versus 34.8% in 2002.”
We received only 3.7% of the deals, and even worse only 2.7% of the dollars. My experiences anecdotally support those tremendously sad statistics. Just this week I was at one of our VC’s portfolio company conference. Other than the fund’s non-investment staff, there were two women. The second was a VP of Marketing. At another investor’s conference earlier this year the statistics were the same. In the many rounds I’ve raised Ive pitched to a woman exactly twice.
Why? I don’t know. But here are two thoughts.
First, the VC-entrepreneur relationship is based on trust. (At least one way the VCs have to trust that the entrepreneur is going to do well with the investment.) Most of the entrepreneurs I talk with view trusting a VC as 1) a nice-to-have and 2) naive. I’ll save that for a later post. The main point here is that VCs do have to trust the people managing their companies. I believe that people tend to trust those who they understand. It’s a lot easier to understand people who are like oneself. VCs are (white) men, so they’re more likely to trust (white) male entrepreneurs.
Second, expanding to a cultural divide, I think that most women are ill-suited to raise venture capital. Most VC pitch meetings are a jousting match. The first time I raised capital, I had a potential angel investor who wanted his VC friend to look at us and opine. I called the VC every day for about three weeks, and he kept ducking me. Finally, his secretary slipped and said “I’m sorry, he’s on the phone.”
“I’ll wait,” I replied.
That VC kept me on hold for almost an hour. Finally, he picked up the phone, and proceeded to drill in and belittle me. After too much of this, it became clear to even me that I wasn’t go to get anywhere, and i purposely, by mistake, referred to him as a vulture capitalist. “Ah,” he said, with a smile in his voice, “like I didn’t know I kept you on hold for 45 minutes. I come by my arrogance honestly, I was a cardiac surgeon before a venture capitalist.” And then, since I had established my machismo, we made nice. Many months later, I pitched that VC’s firm. Although he was health care and our deal was tech, he joined the meeting, recounted the story with gusto and recommended to his partners that they should back anyone with my persistence and “ability to go toe to toe.” It’s an extreme example, but it does illustrate the competitiveness in the environment. Women just aren’t brought up to be so in-your-face.
For me, the fact that there are so few women entrepreneurs is a huge positive. I’m memorable I suspect that VCs I pitched for TurnTide in 2003 are 50 times more likely to remember me today than a male with as good a company. Being 6’ tall puts me on equal footing. Growing up surrounded by boys and spending my first 25 years consumed by highly competitive athletics taught me to be comfortable in the boys’ world without being a boy. But, although the status quo might be good for me, I can’t be selfish on this issue and wish that things stay the same.
Women and men are at the peak of the bell curve wired differently. We give birth, and we typically bear more family responsibility than men. We tend to be better with people and worse with machines than our husbands. But the sum of all of these differences, and more, cannot explain even half of the 26x difference between the number of men and women in whom venture capital invests.
Whatever is going on isn’t fair and it hurts everyone. Great women with great companies that fit the investment profile for venture capital are being passed over because they don’t fit the cultural profile. So the companies can’t take full advantage of their opportunities. And investment returns are suffering because good deals are being missed.
I've started and/or run too many venture capital-backed software companies, plus one ill-fated food startup.