Seeing Both Sides

Mastering the VC Game Is Available Today - Why So Grumpy?

My book, Mastering the VC Game, is officially available today (and 40 pages of excerpts are available for free if you want to preview it), yet I'm kind of grumpy.

I've gotten nice reviews (see AVC, Boston.com and YoungEntrepreneur for a few examples) and TechCrunch, BusinessWeek and Upromise have done really nice excerpts.

But I confess I'm a bit of a perfectionist (when I'd come home with a 95% on a test, my parents would ask me what happened on those 5% points - I wonder if that has anything to do with it?) and so I find myself mulling about the mistakes I made with it.  Tangible, print products are tough because, unlike a blog post or a piece of software code, you can't just change it on the fly.

Here are the top three things I've been stewing on:

• I regret that I didn't spend more time discussing the recent phenomenon of super-angels, as covered nicely in a recent VentureWire article.  Guys like Chris Sacca, Roger Ehrenberg, Dame McClure and Ron Conway as well as small seed funds like Chris Dixon's Founder's Collective and Mike Maples' Floodgate are worthy of more treatment than I gave them although I do cover First Round and profile their co-founder Howard Morgan.  There are pros and cons for entrepreneurs who take money from these groups and I'd like to expand on these in future blog posts.
• I'm sorry to have left out any great cleantech entrepreneurs.  With yesterday's announcement of Cape Wind going forward, it's another reminder that the energy sector is brimming with entrepreneurial opportunities and I should have included a few stories about some of the emerging starts there, like EnerNOC, A123 and Silver Spring.
• I'm annoyed that my publisher, Penguin, and Amazon.com are locked in a battle over royalties, resulting in my book not being available on the Kindle.  As a result, all new authors are getting punished.  The book is available on iPad, Sony e-Reader and the Nook, but I've been getting tons of complaints from folks that they want to download it on their Kindle and can't.  What kind of a technology VC writes a book that isn't available on a Kindle?  Yeesh.

Those are my top three.  I have a few other smaller ones, but I guess that's why they print second editions.  Let me know if you spot any more.

you can follow me on Twitter at www.twitter.com/bussgang

Money for Nothing, Content for Free

When I embarked on writing a book about venture capital and entrepreneurship, I struggled with one question:  how do I produce a 250 page document that is professionally edited, packaged and distributed, yet communicate the information consistent with the spirit of the blogosphere - open and free.

Desipte the best efforts of many, the publishing industry remains a financially-driven business.  Agents, publishers, editors, retailers and others in the value chain all make a living doing what they do.  They don't have the luxury of another job that supports them while they write on the side, like many VCs and entrepreneurs.

So, I decided to take the best compromised approach I could figure out.  First, I convinced the publisher (Penguin's business imprint, Portfolio) to allow me to distribute a meaningful chunk of the book for free.  The first 40 or so pages of the book can be found at www.jeffbussgang.com and can be downloaded, read and distributed for free.  Go for it.

Second, I decided to donate a meaningful portion of whatever meagre earnings I receive from the book (after digging into the business, I was kind of shocked how little money is left for the author after agents, editors, publishers and retailers all get their cut of your $20-25 hardcover!) to Endeavor, a terrific non-profit that promotes global entrepreneurship.  Endeavor was founded by Linda Rottenberg, an amazing entrepreneur in her own right, who has built a global network that promotes and supports entrepreneurship.

Third, Penguin has been kind enough to agree to allow me to give many hundreds of copies of the books away to universities, incubators, and other forums where it might be useful to entrepreneurs.  I keep thinking about any way possible to reduce the friction between an entrepreneur and a successful business and incubators and business plans and shared office space are all terrific vehicles.

So that's my gameplan.  Not perfect, but the best I could figure out given the constraints.  Let me know what you think - or if there are other angles I should be thinking of.  The book is widely available next week, so I still have time.  :-)

You can follow me on Twitter at:  www.twitter.com/bussgang

Glory Days for US Technology

Forgot the news about the increase in retail earnings that suggest the American consumer is back.  Forget the fact that the Dow Jones closed on Friday right at 11,000 - the highest it has been in 18 months.  Want to know the really good news?  The US technology industry has never been in better shape, and has arguably entered what may become one of the greatest sector growth eras in business history.

Lost in the news of the tepid (now maybe solid) recovery over the last year is that the top US technology firms have become absolute world beaters and are surging through the recovery.  The US now has seven leading technology companies with over 100 billion in market capitalization that have never been in a better position in their respective industries - Apple, Cisco, Google, HP, IBM, Microsoft and Oracle.

Want proof?  On October 9th, 2008 - the last time the Dow was at 11,000 - the aggregate market capitalization of these seven companies was 770 billion.  At the closing bell on April 9th, 2009 - with the Dow back to 11,000 - the aggregate market capitalization of these seven companies was 1,238 billion.  In these 18 months, while the Dow fought its way back to par, these seven companies saw an increase in their market capitalization of over 60 percent!

Anecdotally, each of these seven companies is arguably in a stronger position than they have ever been and poised to take advantage of the very bright future presented by the dual forces of innovation and globalization.  Apple?  iPad, iPhone, iTouch, iAd, 'nuff said.  Cisco?  Think of the bandwidth IP video is going to require over the next 5 years.  Google?  The youngest company in this cohort, they continue to suck billions of advertising dollars away from media and traditional advertising companies into their online money-making machine.  HP?  The company has remade itself under Mark Hurd's steady leadership to once again become a trusted enterprise solutions company for IT and a surging leader in the PC industry.  IBM?  With its globalization push, the company is taking advantage of every major industry around the world treating technology and enterprise systems as a competitive weapon.  Microsoft?  Its Windows hegemony remains a strong cash cow, despite threats from Apple and Google.  (Interestingly, at 266 billion, Microsoft has the largest market capitalization of this group, but its valuation growth of 34.2% over the 18 month period was the smallest.  At 170.4%, Apple's was the largest.)  Oracle?  They continue to get rewarded handsomely as they continue to stitch together the software that runs business aroud the globe.

Behind these seven behemoths, there are numerous other leading US technology companies that are emerging as potential long-term winners.  Amazon's market capitalization is 62 billion - over 150% higher than it was 18 months ago.  They clearly have a shot at entering the 100 billion club and also appear to be in an extraordinarily strong position for the future, with secular growth expected in their core strength areas of e-commerce and cloud computing.  Never mind the private companies, like Facebook, that continue to grow rapidly and may someday enter into this elite 100 billion club.

So forget about the good news about the America consumer, the return of the Dow, and even that baseball is back.  The best news of all - it's glory days for US technology.