How Many Unique bit.ly Combinations Are There?
I was thinking randomly about how many bit.ly combinations there are and how much unique shortened URLs they can generate given their current construct. Here’s their construct:
- Up to 6 characters after bit.ly/
- Any mix of capitalized letters, lowercase letters, and numbers
If you limit the combinations to only ones where bit.ly is the domain (and not partner domains), and you presume they can go up to 6 characters (i.e. 1–6) as opposed to exactly 6 characters – how many total combinations are there? Any math whiz out there who can figure it out pretty quickly and enlighten us in the comments section? My small math brain was getting cramps thinking about it.
Given that they shorten 40–50 million URLS per day, I also wonder how long they can last on this construct. Probably a long time I suspect even including their growth. Random thought for the day, and thanks for the help.
Which Is More Important – The Stock Market or The Bond Market?
This topic was raised to me today in a meeting, and after thinking about it, doing some research, and trying to put aside my biased interest in stocks – I think a stronger case can be made that the bond market is more important than the stock market. There are a number of reasons for this, most notably starting with size.
The global bond market is about $82 trillion. The global stock market hovers around $40–$50 trillion. So, on pure size alone, the bond market is almost twice the size of the stock market. That’s a substantial difference. Point – bond market.
The bond market has a broader set of issuers as you have different segments: corporate, government & agency, municipal, mortgage backed, and funding. Whereas the stock market is a construct for a limited set of corporations – for example, the US has 17,000 public companies. Point – bond market.
The stock market is arguably more influential on sentiment. What’s the key indicator of the stock market? My guess is most would say S&P 500 or Dow. What’s the key indicator of the bond market? Probably most don’t know (e.g. indexes like Merrill Lynch Domestic Master). That, in and of itself, gives the stock market a broader reach and voice. Point – stock market.
That being said, and this may be a reach, but I think the bond market is more influential on the stock market than the other way around. The primary reason is that the returns on bonds are more predictable due to the fixed yields. If yields are very high, there’s no reason to invest in stocks. The comparative risk-reward isn’t there. But, if yields are low, that’s an incentive to move into risk assets like stocks. It doesn’t work as seamlessly the other way around because returns on stocks are less predictable and more volatile. Point – bond market.
This is hardly a scientific analysis, but based on just off the cuff research, what’s more important – the stock market or bond market? I’d probably have to go with the bond market.
Volition Capital Leads First Investment – G5 Search Marketing
I am pleased to share in today’s announcement that Volition Capital has led its first investment with a $15 million financing in G5 Search Marketing.
The investment thesis for G5 is pretty simple. 100% of mid-size businesses would love to have an online presence that consistently generates high quality, low cost leads – and 99% of mid-size businesses don’t know how to do it. To achieve the goal you need to be expert in website design, search engine optimization, search engine marketing, and multi-channel lead management. And, perhaps most importantly, you need to understand how all of these areas interrelate specifically in your industry. G5 fills that gap in certain large verticals where they have domain expertise – like self-storage, multi-family housing, and senior living. The thousands of mid-size businesses that have become G5 customers have their website and marketing efforts outsourced to and managed by G5, and they see the impact immediately in terms of low cost, high quality leads.
The wide disparity in results between using G5 and doing it yourself has led to a highly recurring, bootstrapped business which is right down the sweet spot of Volition Capital’s investment focus:
- High growth & solid revenue base: 20 consecutive quarters of record revenue.
- Capital efficient & founder-owned: They have never taken any outside capital or debt.
- Under-served geographic area: Beautiful (and hard-to-get-to) Bend, OR
- Volition Capital investment: First and last institutional capital, active Board involvement
One attribute of G5 which is key to all of our investments is we want to see the team have an “aspiration for greatness”. Every Volition portfolio company needs to have both a proven business and breakout potential. The latter starts with the management team thinking big – which is certainly the case here. The number of mid-size businesses that could benefit from using the G5 platform is not just thousands, or tens of thousands – but potentially hundreds of thousands if not eventually millions. The first-generation “local search” vendors adjacent to this space have a narrow/weak offering and poor value proposition – which is readily obvious given their high customer churn rates and lack of profitability. G5’s intensely loyal customer base and strong financial performance demonstrates that they are doing things both differently and better. We believe G5 represents the next-generation in local marketing solutions and couldn’t be more proud to partner with them.
My Trip To Haiti
I wasn’t originally planning on blogging about my trip to Haiti as the decision to go was more of a personal one. But, having been back for a week now, I figured if blogging about it could help in some way, then I might as well. So, here it goes:
I spent a week in Haiti serving through a collaboration between two organizations – Jordan International Aid (JIA) and J/P Haitian Relief Organization (J/P HRO). Our sending organization, JIA, has been sending medical teams to Haiti every third week of the month since the earthquake first hit Haiti. Our receiving organization, J/P HRO, manages one of the larger tent cities in Haiti – Petionville. The two organizations collaborated such that our team at JIA would be staffing the hospital and triage clinic at Petionville – a tent city of 50,000 people. J/P HRO also enabled us to set up some mobile clinics at other tent cities where the refugees in many cases had never received medical care.
When we first landed in Haiti and drove around Port-Au-Prince, I was struck by how the city looked frozen in time a full six months after the earthquake. There were buildings that had been pancaked from the earthquake and others clearly damaged beyond repair – just sitting there untouched. I was struck by the lack of both demolition and construction. The earthquake could have happened the day before. Port-Au-Prince, itself, was terribly congested with a mix of cars and people owning the broken streets. Our team stayed at what used to be an orphanage – needless to say, we felt lucky to have some semblance of running water, power, and intermittent Internet access at our home for the week.
The team was principally comprised of doctors, nurses and a couple pharmacists from the Bay Area, alongside a few non-medical folks (like me) from my church. Our principal role was to help staff and run the “hospital” and “triage clinic” at the Petionville tent city. If you can imagine M*A*S*H, you’d get the idea of where we were serving. They were basically tented areas with stretchers and boxes to sit on. Every day hundreds of people would line up from the tent city, and often wait for hours to receive care. We had the usual pediatric issues of fever, dehydration, diarrhea, etc. We would often also see lacerations, burns, and blunt trauma. There were individuals we treated with longer-term issues like AIDS, cancer, and stroke. There were a number of babies also delivered during our time. And underlying all of the traditional physical issues – there were serious issues like post traumatic stress disorder that were prevalent. Each day, we would see about 150–200 patients at Petionville. We also had the opportunity to set up mobile clinics at other tent cities in surrounding areas.
Though Haiti was just a 2 hour flight from Miami, I couldn’t have been further from my little world of Boston private equity. And, that is a good thing. It was really helpful for me to see the plight of the Haitians and hear their stories. So many people stick out in my mind from this trip. The boy who came in without complaint, despite having a severely burned arm from top to bottom. The woman who gave birth to two very premature twins who did not ultimately survive. The girl who couldn’t have been older than 13 years old, coming in with her three younger siblings – all orphaned. The deaf and mute boy on the Petionville grounds whose spirit could not have been brighter. Our many Haitian friends and staff at the hospital and Petionville who had lost loved ones.
I’m sure many people have given money to Haiti – but I came to appreciate that giving time in many instances is worth a lot more because it’s through time that you build relationships and start to really care. I also came to appreciate that in situations of devastation like Haiti, anyone who has an interest to help, can help. I’m back in the saddle at work now, but I think about Haiti every day – wondering if there’s a broader way to help that country. I’m quite sure I don’t have the answers, but somehow I think thinking about it is a good thing.
The U.S. Company That Knows More About China Than China Does
What if there was a U.S. company that knew more about commerce and money flow in China, than China itself does? Firstly, China would not be happy about that. And, they’re not. Secondly, this company would own an incredibly valuable asset, which they do.
This company has 300 million Chinese users using its payment platform to process payments. This company also had the largest online retailer in China with 200 million Chinese shoppers. This company also owns the largest B2B trading platform in China with 50 million suppliers on it giving it a granular view into China’s trading industry. Between all of these properties – this U.S. company would be collecting invaluable data daily about how Chinese consumers shop, how Chinese businesses are transacting, and how money flows within and outside of China. What if this were the case?
This is the case, and the company might surprise you. The company is Yahoo. Yahoo put itself in an incredibly compelling position in China through its $1B+ investment in Alibaba in 2005. They are now the largest shareholder of Alibaba. Since 2005, the three primary properties underneath the Alibaba Holding Company have all grown to become landmark properties in China. These properties are Alibaba (largest B2B marketplace), Alipay (Chinese Paypal), and Tao Bao (Chinese eBay). The growth and leadership position of these properties in China have put Yahoo in the position of having as much or more visibility into Chinese online commerce and money flows, than perhaps any other company in the world. And, for that reason, China is not happy about it.
Something has to give in the middle of this conundrum as “China’s Alibaba” is now trying to buy back Yahoo’s stake. But, why would Yahoo sell its stake in a holding company that is arguably worth more than Yahoo itself? Something has to give as it is untenable that the Chinese government would let a U.S. company sit in such a strategic position in the Chinese economy. It’s one of the more interesting dramas to watch over the next several months on the global technology landscape.
Does God Answer Prayer?
In response to the question presented in the title of this post, the following poem was read at my church service this morning – author unknown. I thought it was insightful, so decided to pass it along here:
I asked God for strength, that I might achieve,
I was made weak, that I might humbly obey.
I asked for health, that I might do greater things,
I was given infirmity, that I might do better things.
I asked for riches, that I might be happy,
I was given poverty, that I might be wise.
I asked for power, that I might have the praise of men,
I was given weakness, that I might feel the need of God.
I asked for all things, that I might enjoy life,
I was given life, that I might enjoy all things.
I got nothing I asked for, but everything I hoped for.
Almost despite myself, my unspoken prayers were answered.
I am among all men, most richly blessed.
The Small Fund Advantage
Silicon Valley Bank came out with a report today, called Dialing Down, that puts some data around the commonly held belief that better returns come from smaller funds. In this case – conventional wisdom is clearly true. Their fundamental conclusion is that venture capital funds are getting smaller – and that’s a good thing because it’s the small funds that generate outsized returns. The most compelling statistic compared the returns of large funds versus small funds (large funds being defined as above the median size for their vintage year). The result:
- 2% of large funds returned 2.0x or better.
- 48% of small funds returned 2.0x or better.
Volition Capital is committed to a small fund model precisely for this reason. But, why is it more likely for a small fund to succeed? I think there are a number of reasons – some more obvious than others.
1. The law of large numbers. Take a typical large VC firm with a $750M fund that averages 20% ownership in each portfolio company. For that fund to return a 3x, the portfolio has to be worth over $11 billion. And that is before accounting for fees and carry. A good fund is lucky to have one billion dollar company, but 11 of them? Not likely.
2. Small fund GPs are more aligned with their LPs. It’s pretty simple really: small fund GPs make their money from carry whereas large fund GPs make their money from fees. Large fund GPs still want to generate carry, but they don’t have to in order to create wealth. Small fund GPs need to make great investments to generate wealth. Who do you think is more hungry and will work harder to find and make those great investments?
3. Small funds are more focused. When you have a small fund, you can’t make every investment under the sun. You can’t be a late stage & early stage & PE, tech & cleantech & healthcare, US & Europe & India & China… fund. You don’t have a lot of capital to deploy so you get razor focused and develop the culture, methodologies, domain knowledge, and accountability – around a specific type of deal. You get good at something – and that makes better returns more likely.
4. Small fund GPs like each other more, probably. If you could start a firm, are there 10–15 people you would be willing to call “partner”? Someone you’re willing to bet your career on, whom you trust implicitly, whom you don’t have to ask and you know they will do the right thing? Are there even 10–15 people that you’d want to spend 50–70 hours per week with every week making joint decisions? Unlikely. Since large funds have grown their partnerships – the resulting 10–15 partners are more likely to just work together rather than be true partners at the core. Small fund partnerships don’t have the pressure to grow the partnership making it easier to preserve the “partner” in partnership.
That all being said – there are some great larger funds out there and I’m fortunate to have worked at some of them. As the stats show, 2% of large funds did well. It’s harder, but it can be done. But as the stats also show, your odds are much better with a small fund.
Why Growth Equity Is The Best Risk/Reward in Private Equity
There are really three general asset classes in private equity: buyouts, growth equity, and venture capital. So why is growth equity the best risk/reward among the three in my estimation?
1. The downside protection of leveraged buyouts is exaggerated. The lure is that LBO firms are buying highly profitable companies with consistent cash flows, levering up the balance sheet, and ultimately trading the business while covering the debt for multiples on its equity. The challenge with the model is that the equity of the LBO firm is not the senior security on the cap table. Clearly, the debt is senior. Every LBO investment is a bad quarter away, a tripped covenant away, or a bad economic cycle away from being under water from an equity perspective. That’s the reason so many LBOs of all different sizes and shapes have been written off completely during this down cycle. As it turns out, despite the perceived safety in leveraged buyouts, in reality, there is little room for error. The loss ratios in LBO portfolios are higher than one might think.
2. The upside potential of venture capital is exaggerated. By venture capital, I mean traditional early stage venture capital. Firstly, the large venture funds run into the law of large numbers – no matter how good you are, turning a good multiple on a large fund is hard especially when you have modest ownership levels in your portfolio. Secondly, traditional venture models justify their investments based on upside scenarios (i.e. swinging for the fences). The reality is the vast preponderance of venture-backed exits are at modest outcomes so often times the investment case is divorced from the reality of where exits tend to take place. That’s why venture capital has become more dependent on bubbles to make the math work. Thirdly, venture-backed companies often take multiple rounds of financing thereby diluting both the ownership and governance of the early investors. Finally, venture investments are often done at the very early stages of a business’ lifecycle where the risks are high and little is proven. It’s a high risk asset class with moderate reward potential at the fund level.
3. So, why is growth equity such a great risk/reward in comparison? Growth equity doesn’t run into the problem that LBOs have being junior on the cap table to the debt. These are mostly non-levered equity only investments thereby making sure the investment is senior on the cap table. Growth equity investments are traditionally done in companies that haven’t taken prior institutional investment and don’t require future institutional investment. Therefore, the problem traditional venture firms have of diluted ownership and governance generally does not apply. In addition, growth investments are traditionally made at a point in time when strong financial growth is proven in the business – this removes much of the early stage concept risk. Finally, growth equity investments are, to state the obvious, growth companies. So, they have tremendous upside potential, but the investment case is not dependent on the upside scenario happening like is often the case in venture.
There will be winners in all three asset classes for sure. And for full disclosure, Volition Capital is building its franchise in growth equity. Nonetheless, I’ve seen winners and losers in my career in all three asset classes, and in my opinion, the best risk-adjusted asset class of the bunch is growth equity.
Who Is Scott Kirsner?
Today marks the first entry in a new series called “Who Is”. This series will be about getting to know people in a slightly different light. My favorite part of the work we do at Volition Capital is getting to know people. So, I figured I take a little time each month and tell one person’s story. Some people I profile will be known commodities to the readers of this blog and others might just be folks who have an interesting story. We’ll see how it goes. Today’s first entry is about Scott Kirsner. Scott is a well known journalist in the greater Boston innovation economy, which is appropriately the name of his blog. Arguably, he has interviewed more people in the Boston-area technology and entrepreneurial communities than anyone else. So, I thought it’d be fun to turn the tables on him. Here we go…
LC: The title of this post is going to be “Who is Scott Kirsner”. So, who are you?
SK: Well, I think I’m a journalist who writes about innovation often in the Boston area but often in other places and other industries. My main interest is in the Boston and New England ecosystems. I have written a couple books and help organize a couple conferences like Nantucket and Future Forward. And, I blog and do video and am interested in all sorts of new media ways of doing journalism.
Can you give me your 60–second life story?
Grew up in Miami. Always interested in technology. I learned how to write Basic at a very young age, fell in love with my Apple IIE computer, and briefly ran a BBS in the pre-web days. Always really liked journalism and writing so I thought I’d have a career in that. I briefly went to a school for the arts and studied saxophone, so I thought maybe I’d have a jazz music career, but then when I came up to Boston to go to BU, I noticed all of these Berklee School of Music kids were much more focused and better on the music front and gave up the idea of playing saxophone professionally. Came up here to go to college and stuck around ever since, with the exception of 2.5 years that I spent living out in San Francisco to get a taste of the west coast scene.
So you went to a performing arts high school?
Yes, I went to a performing arts high school. I studied journalism at BU. And then after college, I worked in management consulting for a couple of years just because there were no journalism jobs to be had. I kind of worked at marketing, editorial issues, and started the first website for this management consulting firm. Built in ground up in the days of Mosaic. And that led me to my first job at the Globe which was helping to design, build and launch Boston.com in 1995.
What’s your family background?
I have one son and we live in Cambridge which is a great place to live. Most of my life happens along the red-line. I go long stretches without driving which I really like about Cambridge. I grew up in Miami in the suburbs, in the years before Miami was a really hip place to be. I go to South Beach now and I don’t have the right clothes, am not in good enough shape, I don’t have the tan. I’m very out of place there.
What are your other interests?
I’m playing a little more piano now more than saxophone. Just trying to improve my piano playing skills which are not very good. It’s fun to do sing-a-longs with my little son. It’s better to do sing-a-longs with piano than saxophone. Other interests – I collect some vintage posters, vintage movie travel posters. I like to go to drive-in movie theaters in the summer. There are still a few of those that exist.
What’s the best one?
The best one people don’t know about is the Mendon Drive-In and it’s actually just out of 495. Totally awesome. The best one people do know about is up in Cape Cod in Wellfleet. The Wellfleet Drive-In.
So you wrote a book about movies, what’s your favorite movie?
I’m not sure I have a favorite. My favorite movie would be something cheesy from my childhood in the 80’s like Back To The Future. It’s from the love of technology and of tinkering and crazy science projects. It’s not a really good movie. I also get the chance to go to a lot of film festivals so I see a lot of independent film. So the latest movie that I saw down at SXSW, there was a documentary about Saturday Night Live called Saturday Night. I really enjoyed that.
Tell me about your greatest achievement before your professional career?
I started an underground magazine when I was at BU called The Rumor – a humorous satire magazine. That was my first experience trying to manage people, manage writers, manage salespeople and doing a start-up. That and some other start-up business experiences have given me a good sense of just how challenging it is for a lot of the people I write about to get that first dollar of revenue. As an aside, I actually sold the very first ad on Boston.com because my manager told me we needed some ads before we launched. Even though I had a mostly editorial job, I went hustling on Newbury Street to all the different stores because it was right around the corner from our office.
Who bought the first ad?
This second hand clothing store called Second Time Around. Of course, this was in 1995, selling an ad also meant building a website. It was not a really profitable endeavor. “Yeah, we’ll buy an ad on your website, but we don’t have a website to link to so can you help us with that.”
What’s the political or social issue you most care about?
The Start-Up Visa thing is really important. All of my political issues are linked to entrepreneurship. I think it’s important to help people who want to start companies here, wherever they’re from. In the state, getting rid of non-compete agreements would be really positive for the innovation economy here.
Your pet peeves?
I don’t have a lot of pet peeves about other people. My personal pet peeve is running late. That drives me crazy. One that has been surfacing lately is people who leave you a phone message and say, “Hey, this is Scott Kirsner, I’d love to talk to you, can you call me back at this number?” And you don’t know what it’s about. And you’re playing this long game of phone tag. And they don’t put any information in the phone message. Whenever you try and email them they just want to schedule a phone call. I’m done with the we need to have a phone call about everything mode of interaction. It’s very 20th century.
Your house is burning down, your family is OK, what’s the one item you take with you?
I think my wife would be mad if I didn’t say the cats. But, if they’re part of the family, to be honest, I have a framed marriage contract. In Judaism you often have a nicer, decorative marriage contract sign. We have a really nice one at the bottom of our stairs. I think that’d be a good thing to take both from my perspective, and my wife’s perspective.
What’s something you’re wrestling with?
I’m wrestling with what makes a good newspaper column to print on Sunday, and what makes a good blog post. I think of my blog readers as being a little more insidery and participants in the ecosystem here, and the Sunday column readers as being a general newspaper reader who may not know or care about venture capital or start-ups and trying to find interesting stories for them that don’t feel very insidery.
Do you have different journalistic standards for both?
Yeah, I’m trying to get things accurate. The great thing about blog posts is you screw up and you can instantly correct it and strike thru the words where you made a mistake and update it. In a way, it feels a little bit less damaging when you make a mistake as opposed to having half a million copies of the Boston Globe that you can never correct.
Right now, you’re writing books, your hosting conferences, you’re writing for The Globe, you’re blogging – can you rank order them in terms of your personal enjoyment?
Right now I’m doing a lot of conference organizing, so I’m a little bit overwhelmed by the sheer amount of that. So, that’s not my highest level of enjoyment right now. Although ordinarily, I do enjoy that a lot. And certainly when the conferences roll around, I just enjoy seeing a mix of interesting people talking about fun stuff often without powerpoint in an unstructured way. For me it’s about being out and about, not so much writing the column, sitting in front of my laptop or writing a blog post. It’s more about being out and about, hearing what people are working on. Meeting entrepreneurs at conferences or little get togethers whether it’s OpenCoffee or webinno. I like being around the entrepreneurial energy.
You’re known as the innovation guy, you’re pushing innovation here. When did that start, how did you get onto that theme, where did it come from?
I left full-time employment at The Globe in 1997. I started doing a lot of freelance writing for Wired Magazine, Wired’s website, Fast Company, and a bunch of other places, CIO magazine. Then in 2000, at the height of the dot com, The Globe asked me to do a weekly column on Internet stuff in Boston because I had helped launch their website and had been doing this freelance writing. Over time that expanded, as Internet stuff stopped happening as much in 2001, and in 2002, I started expanding to other areas of technology – life sciences, energy, any kind of start-up enterprise. When I got back from CA in 2007, I just really felt like no one in California talks much about Massachusetts, or knows what’s happening here, and that was a little troubling. I wanted to take a more of an activist role with the column. What are the issues that we ought to think about, work on, and talk on that are holding us back, not just in a Boston versus Silicon Valley way, but let’s be a globally competitive place that attracts people to work in all kinds of innovative industries.
How would you assess how you are doing?
Well, I think there are a lot of people who are more influential at it than I am. I think Bill Warner, the founder of Avid, is very involved with the Mass Tech Leadership Counsel. I think what David Beisel has done with webinno has been very powerful for the community. I don’t think I’ve been a major influencer, but probably in an annoying way, I try and write about things that would move the needle and would make Massachusetts and New England a better place for entrepreneurs and just encouraging people here to be a little louder and prouder about what we do here – be more self-promotional and be more promotional of the region.
How many people do you think you’ve interviewed in your career?
I’m so bad at math. If you just talk about the Globe column – this is my 10th year of writing the weekly column. That’s 50 columns per year, and on average I interview 7 people for every column. So, that’s 350 people a year times 10. So, let’s say 3,000–3,500 people just for the Globe column.
What’s your most memorable interview for whatever reason?
I’ve had the chance to interview lots of interesting people for books. One really fun interview is I interviewed Morgan Freeman in a trailer of the set of a movie for one of my books. It was just a really interesting conversation oddly about movies being delivered over the Internet which he was really an early promoter of. That would be one that stands out for me. Another one was interviewing Chad Hurley from YouTube very early in the days of YouTube in 2005. I was writing a piece for the NY Times. It was very hard to tell at that time that YouTube was going to be the winner in online video.
What do you consider your best piece of reporting ever? And conversely, where did you really screw it up?
I feel like occasionally I have an article that doesn’t turn out the way I hope. For me, the thing that is really successful is having a central story or anecdote about an interesting people that you can really relate to – like a famous column that I wrote about you once. So often I do feel like I fall short. Nothing comes to mind as being egregious like I wish I could take that column back. I don’t know if I want to judge what the best piece of reporting I’ve ever done. There are a couple of columns that have illustrated conflicts between entrepreneurs and VCs that I got really good response from – not from the VCs usually, but just the entrepreneurs. Because I think the power dynamic entrepreneurs in a lot of cases being supplicant and needing the money and needing it from VCs, and the VCs having the ability to look at every company in the space and decide where they’re going to invest.
What do you think would be the words that a typical Boston-area VC would use to describe you if I asked them, “What do you think of Scott Kirsner”?
“Who?”. I don’t think everyone knows me. Maybe they know who I am. Probably annoying, inaccurate, irrelevant. I don’t think most VCs feel like I have that much of an impact and they probably think what I’m doing is constantly just needling them for insignificant stuff. Which is sort of true. The VC’s main job is to make money for their LPs and everything else is secondary. That’s the way I look at the bottom line. It’s not to maximize the return for entrepreneurs or team members or do great things for the community. When I’m needling them about doing more stuff for the community, you should be blogging, sharing your thinking and your vision – a lot of them think that’s just annoying and maybe obnoxious too.
For the VCs that do think that, what would you want to say to them?
That my job is to be annoying and needle people and write about the issues that could be holding back the regional economy and could improve it. You may not agree. I am interested in hearing from people when they don’t agree. I love when people tweet their rebuttals or email me or do a blog post about it. I think everything is a conversation. The thing that is great about social media, the people that disagree with you and the people I write about, have a big platform now to share their viewpoint. It’s not just the big media having the only platform and I think that’s a really positive thing.
What do you think an average Boston-area entrepreneur would say?
“How come you haven’t written about me?” I hired this expensive PR firm, they’re pitching you all the time, why haven’t you written about me? My response is I’m just one person. I try to write about the stuff that feels the most interesting and relevant at the moment. It’s not my agenda to write about every company. In a way, I’m a little bit frightened about the TechCrunch approach to journalism, or a lot of blogs, where every company that gets $0.5M in funding is worth writing about even if it’s the 36th company in the location-based check-in game space. To me it’s not interesting to write about that 36th company getting funded to take on FourSquare.
If you could theoretically have stock in the company of any entrepreneur that you’ve interviewed, which company would you want?
That would be a real conflict obviously. If only in theory, to be honest the company that is most promising right now just because they so own the business model is Zipcar. They’re not really a pure technology company at all. I just feel like Robin Chase and her co-founder Antje Danielson were just so brilliant in bringing that business model over from Europe. They and Scott Griffith have been so great at expanding it. That just feels like a company is poised to be a nationally or globally relevant and really successful company to me. It’s changing the way people live in a fundamental way. The only thing I’d disclose is I’m a Zipcar member so I use it and have that experience of wow, this has stopped us from buying a $15,000 second car that has insurance costs and gas costs and registration costs.
When you look down the road 10–20 years, where do you hope to be, what do you hope your legacy is, what will you be doing?
I’d like to transition by then to being a snowboard instructor in the winters and take my summers off. But, in terms of impact, there are a lot of great initiatives that are trying to shape Boston and New England. I think this is one of the most innovative corners of the world and I want to help spotlight what people are doing here. The analogy I use a lot, because I grew up in Miami, I think of South Beach. I grew up in South Beach in the 1980’s – I didn’t grow up in South Beach, I grew up in Miami, but when you would go to South Beach, it was a totally abandoned place. Two kinds of people lived there – senior citizens and the muggers who preyed on senior citizens. In 10 years, it totally changed. All the New Yorkers want to have a second house there and go there on vacation. You have giant art festivals. I do think you can really change the culture of a place in a short period of time, and I’m hopeful that’s happening in New England. I think a good achievement would be to spotlight, write about, and help bring attention to the work that other people are doing to really change the culture of this place. Change the way that we think about ourselves and change the way the rest of the world thinks about us.
Cortera – Crowdsourcing Business Credit Ratings
Congrats to Volition portfolio company, Cortera, which launched their new website yesterday. Cortera has a pretty simple mission in life – bring great financial and credit information on businesses to users at their fingertips for free or nearly free. Cortera also allows any business to rate any other business on how they pay their bills. It’s crowdsourcing for credit.
It may not be obvious, but business credit ratings are driven by a few thousand large companies. They contribute accounts receivable data (information on how their customers are paying them) to companies like Cortera and others. That data is sliced and diced to produce credit ratings that businesses use for every day decisions like extending payment terms and credit decisions.
The flaw with the model is that if you are not one of those large companies, the experience of how your customers pay you never enters into the calculus of credit ratings. On the flipside, if you aren’t a customer of one of those large companies, you may never be rated for your credit worthiness, even if you pay your bills in a timely fashion. Millions of small businesses are left out of the credit equation today.
The only way to address this problem is to democratize the inputs for credit ratings. Allow any business to rate any other business on how they get paid. Expand the data contributors from a few thousand companies to a few million companies. And then make credit and financial data easily accessible and very inexpensive. Better data for everyone is the result – that’s the aim for Cortera. It’s a grand and worthy goal that we’re proud to be working with them on.
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