What Makes a Community?

I normally write articles that carry a bit of authority. I usually write what I know about and have a high degree of confidence writing. I don’t write often because I want what I do write to carry authority and be hard-hitting.

This is not really one of those articles.

I haven’t done what people like Alex Hillman has done in creating collaborative working environments for independent entrepreneurs at Independent’s Hall in Philadelphia.

I haven’t been an organizer and champion of city-wide entrepreneurship like Josh Baer has in Austin.

I haven’t fostered a product community like they have over at StudioPress with the Genesis Framework.

What I have done is work within the context of a thriving WordPress community of developers, users, consultants and advocates.

I have lived in a city that has made it’s name on entrepreneurship and arts in Austin.

I have helped and supported entrepreneurs in their quest to build products in DC and find ways of succeeding both with and without investment money.

Moving Back to Baltimore

For some weeks now, I’ve made it clear that I’ve decided to move back from Austin to Baltimore. In 2008, I left Baltimore because I saw awesome things developing in technology in DC. At the time, there were guys like Peter Corbett who was just beginning to do technology advocacy work in the Nation’s Capital. By 2009, iStrategyLabs would launch the first Apps for Democracy contest that challenged contestants to create web and mobile applications with civic intent. That would morph into similar contest like Apps for America, etc.

You would also see some organizations that would flare out dramatically because of business model, ideas, weak leadership, lack of community involvement, etc.

I would then move to Austin where I would see a city immersed in technology. Lots of money flowing. Lots of incubator action, such as the products and entrepreneurs who would be graduated from the Capital Factory incubator. I would see ATX Startup Crawl occur several times a year as guests would have the opportunity to move around town and visit some of the great startups like TabbedOut, InfoChimps, uShip and more. Thousands of people would come through these offices and see the great technologies and ideas being built, all while enjoying local Texas beers and eats.

I would see awesome projects like We Are Austin Tech highlight influencers in that community (including myself) come up.

And I watched Baltimore grow as a technology community to the point where DC entrepreneurs started paying attention to their up and coming little brother 45 mins up I-95. I watched from afar as Dave Troy would put his heart and soul into building Baltimore as a center of entrepreneurship and tech. I’d watch as Greg Cangialosi would build his Blue Sky Factory marketing firm out and have a successful acquisition, all while continuing to personally invest more in the Baltimore scene.

I even watched great tragedies like the systematic destruction of Advertising.com by Aol.

I watched this all over the last 4 years and realized Baltimore was coming into it’s own. It had successes. It had failures. It had investors. It had bootstrap. It’s still not entirely cohesive, but from my seat, it looks promising.

So I’ve decided to move back to my home and put my money where my mouth is and see if I can take what I’ve gleaned from DC and Austin and apply it here in Baltimore. I may be one of those failures. Or I may not be, but I’ve got to try.

What Makes a Successful Community?

In the last few weeks, I’ve had several conversations with Baltimore business owners and entrepreneurs, and I’m finding a common question and point of discussion: What makes a successful community? The answers and opinions are intriguing. Again, I can’t say my opinion carries any authority. What I can say, however, is I’ve been in a bunch of communities and witnessed elements of success.

Some folks think a successful business community requires investors who are willing to commit their time and money. Anyone who has gone through the fundraising process knows that hands on investors are the best kind. If a VC or Angel investor can help a portfolio company supplement resources (human capital or otherwise) through their network, they bring quite a bit of upside to a startup. Investors who wire money and never pay attention to their portfolio companies, expecting the founders to execute according to plan, are in my opinion bad investors.

So in this light, some entrepreneurs here in Baltimore find the lack of investment money or engaged investors as detrimental to the community.

On the flip side of the coin, some entrepreneurs seem to be thinking that the mark of a good startup community is going to be in the number of entrepreneurs who are able to successfully bootstrap. There is some validity to this claim as well. The more you can do on your own, the less of your company you’re giving away (as I noted in the “Valleyboys” segment of this article a few weeks ago).

However, there is also value in bootstrapping and taking money, if the situation is right.

Other folks I’ve talked to feels the value is in the number of people attend professional meetups compounded by the sheer number of meetups. In Austin, we have a vibrant meetup community. From the Austin WordPress meetup to Austin on Rails to Austin Lean Startup to Refresh Austin and the list goes on.

My opinion is that a city startup community is built on all these things. It’s not money, really. Money will follow success. Perhaps Baltimore needs to have an IPO or high profile acquisition that allows the company to continue to operate and hire in Baltimore to put them on the map and in the conversation. I don’t really think it’s that, per se, but that certainly helps.

It would help if the State of Maryland was more business-friendly to small businesses, as Texas is. People come to Texas, and more specifically Austin, from California and New York because the environment is notably friendly to small business. More business would be created in Maryland with better business policy. It might even attract out of state growth.

Beyond that though, meetups are important but meetups don’t create value if the conversations end at the meetup. The idea of building something – a prototype – as you might get out of a Startup Weekend is good… if it continues afterwards from prototype to business product.

But I think the biggest thing that makes community grow is collaboration and the willing to share ideas without being defensive, sharing resources without being possessive, sharing physical space without being prohibitive. It takes more that an entrepreneurs flying solo behind his Macbook Pro in a coffee shop, but it takes less than structured office space with prohibitive managerial org charts.

It doesn’t take sacrificing lifestyle on the altar of work, but it does take entrepreneurs willing to gut out ideas by working with other entrepreneurs and customers and transparently sharing war stories of success and failure while helping to mentor others new to the space.

It does takes the karmaic “pay it forward” approach without fiefdoms and regional rivalries to ensure that a rising tide raises all ships. What you put in to other companies you have no direct stake in, but can help with informal advice (when solicited) makes for a circle of life that encourages a community to exceed expectations and move from one level to the next. Mentorship is not an ROI term, but it is critical to the ecosystem.

Am I off-base in my thinking here?

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Drawing by Romancement on Flickr. Used by Creative Commons.

Five Articles I Wish I could Take Back

Last night I was going through Google archives looking for a post (that I never found) from 2007-2008. I went through 30 some pages of search results and remembered some of the older content I wrote. Some of it is stuff I either wish I didn’t write or I don’t agree with anymore. So I figured I’d share some of these posts and explain why I feel differently today:

It’s a Read/Write/Execute Web and We Just Live in It.

In this post from 2009, I posit that the first generation of the web was a read-only web. It was website that were not engaged with outside of simply reading. The second generation of the web was a “read/write” web marked by social interaction. The third I called a “read/write/execute” web where I railed on the future of the internet being API oriented and that government should

Drawing by Romancement on Flickr. Used by Creative Commons.

get on board with open data initiatives at the time.

Where I have a modestly different view today and I did slightly alude to it back then, is that the next generation of the web would actually be mobile. That prediction would have been true, and while APIs have played a significant role in making that happen, the APIs were merely a means to an end.

There are hundreds of thousand apps on the Apple app store and Android Market, not to mention other available app stores out there. Games now are played largely on smartphones and tablets as the shift away from consoles, while mild, is undoubtable. Today, with HTML5 and CSS3, websites are being creative with “responsive” design that allows for appropriate displays on appropriate devices.

Fun Fact: In 2004, I mused about what a world look like if we were not dependent on keyboards and mouses. I think we see that world in front of us now.

Are People Talking About You?

Originally published in 2007, I rode a train of personal brand for a long time. Not in that I had it. Everyone has something and some people have more than others. It’s actually not personal brand. It’s just reputation. I have a reputation. I have a reputation as a no-BS guy that doesn’t have a lot of respect for drama professionally or personally. I’m a confidant and advisor and I know WordPress really well. I get clients via word of mouth because I have a reputation for great work that speaks for itself with a fairly in depth intimacy with the WordPress core code. That’s reputation, but if you must, you can call it personal brand.

Regardless, I wrote this in that article:

It’s important to create great “stuff” (define “stuff” for yourself). It’s really important to stand out above the crowd. It’s more important to get other people talking about you. You are a brand. You are a subject matter expert. Well, you have the potential to be a subject matter expert. But you’re not yet. Not if no one is talking about you when you’re not around.

Aaron, you had me until, “It’s more important to get other people talking about you.”

This is why I was completely wrong. Nobody knows Mike McDerment. Well a lot of people do, but he isn’t a household name in tech or startups. However, he is the CEO of the largest cloud accounting company in the world. He built Freshbooks from the ground up to solve a problem that he had in 2003 (I just read his back story today).

Similarly, do you know Jason Cohen? You might know him because I’ve mentioned him or because you use WP Engine but otherwise, Jason isn’t a flashy guy. When I got the call from Jason right before moving to Austin to come help start WP Engine, I was thinking he was another guy named Cohen. I had no idea how successful and amazing he was. He wasn’t worried about promoting himself. Product is everything and product speaks for itself.

So I entirely disagree with my 2007 theory of self-aggrandizement. The only reason you have to worry about personal brand is if you’ve got nothing going for you. Otherwise, shut up and do epic shit. The rest will follow.

Age of Exploration 500 Years Later

First of all, this story is all fluff. I tell a nice story of explorers and all but it takes me to the last paragraph to even make a point, much less a thesis statement. And even then, I’m unsure of my point.

Imperial Stout
Photo by Brostad. Used by Creative Commons

What I think I was trying to say is that technology and, more specifically, embracing technology and change makes us better business people, better communicators, better humans.

If I had to rewrite the end of this post, I’d say this:

All of these explorers that went before, discovered new lands, races, tribes, experiences and opportunity opened up the door to new innovations. They were able to lay the groundwork and stepping stones for new expansion of influence and find new technologies that would allow for growth into the Industrial age.

I would then use the example of the Imperial Stout created in England for the Queen of Russia:

Through the expansion of the Russian Empire, King Peter the Great of Russia discovered British Stouts. As they became popular among Russians, a problem emerged. There was no way to get these stouts in Russia because the trip was so long that the beer would spoil before arrival. In the 1800s, an English brewery, responding to demand, developed a way of “hopping” their stouts in such a way to allow the beer to be preserved and delivered to Queen Catherine of Russia. Thus, this more hoppy version of the typical stout became known as the Russian Imperial Stout, or just the Imperial Stout.

I would use that segue to explain that even in our technology-centric world, it takes innovators developing technology in order for other, new technologies to emerge. A classic example of this from the programming world is that of Ajax, an extension of JavaScript which has been around for years. Ajax is a technology that allows background communication with servers without the page reloading. Without Ajax being developed a few years ago, the interactivity we have come to expect on sites everywhere would not be able to exist.

So it’s not that I disagree with myself so much as I didn’t explore the real premise of the article enough.

Roadmap to Victory at the Washington Post

This article is still an interesting one. On one side, I saw the Washington Post, and traditionally print-based journalism, as a dying trade. On the other I made a naive assumption that newspapers exist for the sake of journalism.

Both of these premises are wrong. Let’s address both presuppositions.

Traditionally print-based journalism is alive and well, as it should be. It isn’t going anywhere, nor should it. Blogs and digital media are not in competition with newspapers. They complement newspapers. Both sides serve different roles. While it’s true that newspapers (print) can’t break news anymore, they should count their blessings.

There are no opportunities to destroy credibility with Dewey Beats Truman moments (or more recently, Mandate Struck Down, as famously misreported by CNN). There are plenty of opportunities for solid, in depth investigative reporting-style journalism. I know it costs money. So save money by not trying to break news and let the digital sources do that.

Secondly, my cynical take feeds right into that last sentence and is why the challenge lies in money. Journalism today is an art, and is a respectable skill, trade and profession. But news organizations aren’t run by journalists. They are run by business people. Many of them are not non-profits, so they are implicitly for-profit. That means the bottom-line, which is dictated by readership, circulation and sometimes the ratings of television sister networks, are what inform the decisions of the company.

Samuel Zell, owner of the Tribune Company, ran his media empire as an entertainment company and not a journalism company. Guess what? Tribune is still trying to emerge from bankruptcy protection.

Let’s get back to the Washington Post, though. When I wrote this story, WaPo was trailing in the digital race. Today, they did everything other than what I suggested in my piece and have become one of the foremost digital journalism centers around. Their blogs, including Capital Weather Gang and DC Sports Blog are stellar and I still read them regularly, even though neither pertain to me anymore.

Unlike when I wrote this post, WaPo’s digital and print operations are integrated, instead of separate. Online metrics are key and closely watched. Online traffic is the indicator of success at the Post. Circulation is not. Subscriptions are not. Traffic. Eyeballs on their apps, their blogs, their articles. That’s the important metric at the Post. No longer are digital operations a second class citizen. They are equal or greater than print.

Even the New York Times sees it:

They can look at where online visitors are when they read the site. And if their computers are registered with a government suffix — .gov, .mil, .senate or .house — editors know they are reaching the readers they want. “That’s our influential audience,” Mr. Narisetti said. “If a blog is over all not doing that great but has a higher percentage of those, we say don’t worry about it.”

The Washington Post is smarter than I am, clearly, and I applaud them for it.

Valleyboys: It’s All About the Money

Wow. How far off the mark can I be? This article, which matter-of-factly states something that was anything-but-fact, is a clear example o my lack of experience in 2007. In 2007, I apparently thought I knew everything there was about running a startup and raising funding. That from a perspective of someone who was  just over a year out of the corporate world working for my first startup. I wasn’t a founder nor had I raised money. I didn’t understand a thing about reputation (there’s that word again) of founders, the importance of co-founders, how to safely determine a valuation based on things like profit and loss, revenue, the value of burn, the value of users and more factors that go in to that process.

I don’t really know why I was so pissy at the Valley, but in 2012, let me go on record and say that it’s not all about money in the Valley and there are a lot of people working hard to create value. Many do raise money, but many bootstrap as well. There’s pros and cons to both, and that’s left to a different article.

In my defense, there is some absurd money flying around not just in the Valley, but everywhere. For instance, I still don’t see the reasoning behind a $30M raise on an 8x valuation for Path, a round that included Virgin empire mogul Sir Richard Branson. That company has pivoted so many times and still doesn’t seem to have a clue what it’s doing. Nor do I understand the $1 BILLION Instagram buyout by Facebook.

Here’s the money line (see what I did there?). Whether there’s a lot of money flowing or not is not the question. It is a question, but not the question. The question is whether there are good, innovative products being built that create value in the marketplace. If that can be done with no money, great. If it requires funding money on orders of magnitude, that’s a decision that the investors and entrepreneurs have to make. Money doesn’t come without strings. Big raises with low revenue and no profit generally mean the investors get more of the company and if the company sells, then the founders get less. But then big raises for profitable companies with low burn and high user numbers could also mean that the investors just want a piece of the action, even if they don’t get a big piece of the pie. But there’s always strings and the amount of money matters less than the percentage of ownership and the length of runway as it relates to a burn rate and overhead.

So if I believed in deleting articles entirely, this one would be a prime candidate. :)

In the spirit of making sure I’m not perceived as a douchebag, here are some good article I wrote many moons ago. Enjoy!

Friends vs. Fans, The Most Expensive Question, Social Media: How Much is Too Much?,

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money

Venture Capital Irony, Bubbles and Booms


Photo by epsos

Late in 2008, after the rest of the economy crashed and burned due to the housing crisis, the tech sector seemed to be fairly resilient. Maybe it’s the nature of the industry… less money at stake, generally, in tech VC deals than other industries. For instance, Biotech.

That all went out the window when Valley-based VC behemoth, Sequoia Capital, gathered a now-infamous meeting of all its portfolio companies and gave them what can only be described as a “the sky is falling” lecture.

In that lecture (that presentation is shown below), they advised their companies to buckle their seatbelts, lay off employees, and get rid of non-essential expenditures. They said it would be a dangerous ride ahead and that only the companies that had enough forward-thinking prowess to survive, would do so.

The presentation opened with an ominous title slide with the words: “RIP Good Times”. The presentation instructed CEOs to look for M&A deals as quickly as possible, raise new cash now (i.e. late 2008) if they were looking to raise a new round, and have at least a year of cash in the bank.

Pretty ballsy move that, frankly, spelled the beginning of the tech sector decline. If Sequoia was instructing their companies in this way, then something must be severe, thought many other VCs who followed suit with their respective companies.

In some ways, Sequoia was correct. It would be a long road to recovery. In other sectors of the economy, the recovery is ongoing or is just beginning.

The tech sector is not that way, however. In the past year, we’ve seen huge investments in 2010. Twitter raised $200M+ on a $3.7B valuation. Zynga, the social gaming company, raised $147M on an estimated $5B valuation. Tumblr raised $30M.

The bubble has been gaining full steam. And then there was yesterday.

Yesterday, you might ask? Yes… yesterday. Yesterday it was announced that Sequoia Capital led a $41M Series A round (Yes, you heard that right… Series A!) for new mobile social photo sharing company, Color.

I’ll let you read about what Color is because, though it’s a bright, shiny object that is interesting in some ways, it’s not, to me, a $41M play.

Sequoia seems to be taking the approach that many smart VCs these days, including Mark Suster from GRP Partners, said last week when describing investment strategy relating to teams and not products.

Whatever you’re working on now, the half-life of innovation is so rapid now that your product will soon be out-of-date. Your existence is irrelevant unless you continue rapid innovation. Your ability to keep up is dependent on having a great team of differing skills. Individuals don’t build great companies, teams do.

And while I fully agree with Mark, I do have to question Sequoia making a $41M play less than three years after they virtually single-handedly drove the nail into the coffin of the tech sector. To me, it seems Sequoia made an opportunistic opportunity to drive the market rates down on valuations, to eventually make a big play like this at lower valuations (Disclaimer: I don’t actually know the terms of the Color deal). With a lower valuation, they can throw more cash and own the lion share of the available stock ownership. You know… waiting for a slam dunk, as it were. Mission Accomplished!

However, it’s notable that the Color team is truly a notable team. The former Chief Scientist at LinkedIn. The guy who sold Lala to Apple in 2009. Five other notable experienced entrepreneurs and successful startup people.

I’m sure Sequoia knows what it’s doing. It’s certainly interesting to watch investors defend them. There’s just very practical questions about how the company that started the tech recession could come out guns blazing on this one.

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