NOTE: Excerpts from World After Capital will resume next Monday We just returned from a wonderful week skiing. One of our family traditions is to all work together completing a puzzle. It’s a fun activity that involves a surprising amount of teamwork, such as finding pieces that belong in a part of the puzzle someone else is working on and trading off working on different areas. We had always picked 1,000 piece puzzles. This time we wound up buying a 3,000 piece puzzle. After all, how much ha...

Mark Birch has a great post today about using LinkedIn correctly when asking for introductions. Very timely as I was planning to write about introductions today and now need to write only a fraction because Mark covers everything else (he links to some prior posts which are also worth reading). And now for my two small additions that may be specific to me but probably will work fairly well for others also. First, I only make opt-in introductions. So if you contact me about an introduction, pl...

Fred has been posting a wonderful series of MBA Mondays posts that I recommend to everyone who wants to know more about the business side of startups. If you come from the engineering side, it may also help to think about business using engineering principles. My favorite one is the idea of a “single binding constraint." When the execution of a program runs into a hardware constraint, it tends to be a single binding constraint: the program is either CPU-bound, memory-bound or IO-bound but gen...

The amazing team at our portfolio company Twilio has done it again: taken something that was previously complicated and made it super simple. This time they set their sights on business telephone systems (formerly known as PBXs, which – if anyone remembers – is short for Private Branch Exchange). Most legacy PBXs are incredibly hard to program. For instance, the one we have at Union Square Ventures, has some completely proprietary setup which essentially requires us to pay someone every time ...

Historically in the software business high gross margins were considered essential. It is not clear to me that the same logic will apply for cloud-based services. Their cost structure might wind up being quite different. Much smaller development teams can accomplish amazing things on top of a cloud stack substantially reducing the fixed cost component. On the other hand, COGS may increase significantly as the underlying cloud services are paid on a variable basis. With that in mind, it could ...

A decade ago I was in the heat of a deal negotiation with a large company when they suddenly went silent for a week. I was furious. I thought they were trying to string us (startup) along to see if we might back off from some of our deal terms as the deal dragged on. Only much later did I learn that their deal team simply got pulled into a 50x bigger deal. And no-one bothered to let us know the reason for the delay (maybe there was some concern about rumors of a larger deal leaking). It was t...

Blogged about “The Business of Code, The Code of Business” yesterday on the Google Code blog. “The Business of Code” part talks about how the economics of being an independent software company are being transformed by the web and by cloud computing, potentially limiting the number of opportunities available. “The Code of Business” part addresses how the structure of industries and corporations is being transformed, which provided a countervailing force that is likely to create some very excit...