Entrepreneurial Leadership and Management . . . and Other Stuff


Dual Bolt Pattern Wheels

Until my new wheels and tires for my truck arrived from Tire Rack yesterday, I didn’t even know that dual bolt pattern wheels were made. The bolt pattern for a wheel is the layout of the lugs (the bolts) that protrude from the car’s hub and are used to attach the wheel to the car. For a variety of reasons, there are no standard bolt patterns. In fact, there are a huge number of different bolt patterns for wheels. When buying aftermarket wheels, it’s very important to get the correct bolt pattern, or else the wheel won’t fit on the hub.

IMG_2019-800x600To make a wheel fit on more vehicles, aftermarket wheel manufacturers sometimes, apparently, drill two sets of bolt patterns in their wheels (cheaper wheels, like I purchased). See the picture on the left (click to enlarge). After seeing this dual bolt pattern on my new wheels, my first thought was that there must be a structural issue with having that much open space next to the bolts. So I hit the web, but couldn’t find anything on failing wheels as a result of having 2X the number of bolt holes.

While trying to mount the wheels, though, I discovered the real problem with dual bolt patterns – tolerances are tight (there’s no play in the bolt hole and the inside edge isn’t beveled to make threading the bolt through the hole easier) and aligning the wheel to the bolt pattern is significantly harder. The difficulty factor is almost assuredly amplified by the number of lugs that your car has per hub. My truck has 6, making 12 bolt holes in each wheel. Aligning six lugs all at the same time without any play is a challenge. Even further, the tire/wheel combination is about 30 pounds – just not an easy one person job while trying to fine tune the placement of the wheel.

IMG_2016-800x600All this made an hour-long job take about 4 hours (Bower Factor of 4). Some of that was learning the process, for sure, but it still took a long time and that was in my garage with pneumatic and electric tools. I can’t even begin to think how miserable a job this would be on the side of the road in the rain. I think I’m going to keep a factory wheel as my spare.

 October 30th, 2010  
 Stuff with a Motor  

No Pro Rata Investment Rights?

I passed on an investment this week because the terms of the deal didn’t include the right for investors in the current round to maintain their percentage ownership in the company, through additional investment, in future rounds. This is usually outlined in the term sheet, in legalese, as “Preemptive Rights,” “Right of First Refusal” or even “Right of First Offer.” Basically, such a right simply allows early investors to keep themselves from being diluted in future investment rounds. There is no free ride in this situation, of course, the investor must pay for their pro rata share at the next round’s price, just like everyone else. What was particularly troubling about the term sheet in question was that it was pretty clear that the lead investor excluded such rights from the terms in order to have the ability to flush out smaller, early investors in subsequent rounds of financing.

I’ve seen this before (although less frequently over time) and it boggles my mind. Yeah, if you have a boatload of little investments the cap table can be a bit complicated, but that’s just math. Generally speaking, smaller investors don’t have any strong voting rights, board seats or other forms of control so punting on them doesn’t improve the speed or operations of the company. It’s treating form well ahead of function.

So why explicitly exclude or inhibit any investor small or large from investing in your next round? Are you afraid that you might scare off a large, future investor who doesn’t want smaller investors involved financially? Think about it. Are there rational people who would take this position? If so, are these people you want to deal with? To me, the fact that existing investors want to invest more money to retain their ownership is a hugely positive signal indicating that the people who know a lot about the company have faith in its progress and opportunities for success. As an entrepreneur, don’t you want to encourage such behavior?

By not explicitly giving investors pro rata rights (keep in mind that this provision simply grants the investor the right, it’s not a requirement – I’ll write a post on “Pay-to-Play” term sheet weirdness soon), you not only create a problem in subsequent rounds of funding, but you also create a problem now, in the current round. If, as a potential investor, I fear that I may not be able to prevent my dilution in future rounds, how anxious a I going to be to get involved. I’m not. Thus, my exit from the deal this week.

As my long-time friend and corporate general counsel, Peter Johnson, always says, “it’s, at worst, giving them the sleeves of your vest.” “Them,” in this case, being the investors you want to have involved in the company now and, hopefully, in the future.

BTW, there are loads of resources on the web discussing term sheets from many points of view. I highly recommend you take a look at Brad Feld’s and Jason Mendelson’s term sheet series as a starting point.

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 October 29th, 2010  
 Investing, Startups, VC  

Fixing Broken MP3 Files

About six months ago, I updated to a new version of iTunes and found that only about 20% of my MP3s could be added to my library. That’s not 20% of the new ones, but 20% of the songs that were already loaded in the previous version of iTunes (I’m omitting the long story of why I cleared my library and reloaded it). So, out of my 3,000 or so songs, iTunes only recognized about 600 of them. The first thing that went through my head was that Steve Jobs had personally blacklisted almost all the tunes I like. Come on . . . that’s now more rational than your first knee-jerk reaction to it, right? After dismissing the idea that Mr. Jobs might be carrying out a personal vendetta against me, I really panicked when I thought my music had somehow actually become corrupted. But no, the music was recognized by the myriad of other music players on my computer without any problems – I could even play them without issue from Windows Explorer.

My next thought was, do I even care? After all, the other music players were playing my music just fine. The trouble is that if you want to get music on any of the latest generation iPods/iPhones, you need iTunes. Eventually, the other players will catch up, but Apple seems determined to stay ahead of them, making iTunes the only method for transferring music and building playlists on cool, little Apple music players. Nothing like openness . . .

Figuring out what was actually wrong was a challenge. Internet searches yielded almost nothing. While I suspected that iTunes itself was the root cause of the problem – screwing up the files at some point in the past – I couldn’t verify that. So, I had to hack at searches until I stumbled upon MP3val, a free tool (Windows only) that checks the integrity of any MP3 file. Once run, I found out that the headers of most of my MP3 files were corrupted. Recent versions of iTunes, apparently are a real bitch about having proper MP3 headers, so rather than telling me what was wrong, they just chose not to import the files with “problems.” I used MP3val to “fix” a few files and iTunes imported them without any issues. Finally, a solution.

But not so fast . . . while fixing the headers, MP3val lost most (almost always all) of the tag information in the header – title, artist, album art, album title, song title, etc. So, to really fix the files, I had to run them through MP3val and then re-insert all the tag information again. A serious pain in the ass. I experimented with several methods and came up with this one. If you have such a problem. I hope this helps.

  1. Make a copy of the directory tree where your music is – everything. You never know when you’ll mess something up even more and have to restore from your copy. Don’t worry about the disk space, assuming you have what you initially need, you’ll delete this backup when you’re done.
  2. Now, iterate through manageable segments of your music library (a hundred files or so at a time if you can – I keep my music in subdirectories broken up by genre and/or date so I just dealt with one directory at a time) – and perform each of these steps on the group of files:
    • Use your favorite tagging program (iTunes, obviously won’t work) to create new filenames for the songs that contain all the tag information from each MP3 file (they’ll look something like this: “Doobie Brothers – Long Train Runnin’ – Best of the Doobies – 02 – Rock – 1976.mp3.” If your problem is similar to mine, you’ll be able to get everything except album art into the tag. I used MP3tag’s “convert” function to do this. The idea is to retain as much tag information as possible prior to running MP3val to fix the header.
    • Then, use MP3val to “scan” then “repair” the files with problems. You’ll likely, but not always, lose all existing tag info.
    • Go back to your tagging program and reverse the process in number 1, above. Convert the file name back to tag information.
    • If you have missing or incorrect tag information, now would be a good time to fix it. This includes importing album art. Most tagging programs can look up the album art for you automatically assuming you have the correct album name.
  3. Once you’re sure everything worked out, delete the backup.

There you go, just three steps. OK, one of them is complicated and if you have to go through 2,400 files, time consuming too. When I was done, iTunes read ‘em all. I also got the anal-retentive monkey off my back by making sure all my music had it’s correct information and album art. While I still hate iTunes, I recognize its necessary evilness and am coping with it thanks to MP3val and a boatload of time to fix everything.

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 October 28th, 2010  
 How To, Software  
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Who Should I Hire?

I’ll take a great team over a great idea in business any day of the week (of course, having both is even better). Why is that? Because ideas are often fleeting – markets change, technology evolves, competition is a moving target and customers are, sometimes, fickle. Great teams can adapt and continually innovate. Great ideas without great teams behind them stagnate.

This is even a bigger problem for startups than it is for established companies. In startups, ideas tend to be in more flux than in mature companies because of the limited time and resources startups have to completely understand the customer. While older companies aren’t immune to these challenges, they are generally not subject to the same limitations.

So, how does any organization hire the right people? Well, starting with a great team helps, of course, but understanding what’s important in expanding it is crucial. Here are a few things to ask yourself when trying to identify the next person you’ll add to your team.

  • Is there a cultural fit? Far more important than having the knowledge required for the job is whether the candidate will fit in with the rest of the team and, in fact be a driver and communicator of the culture you want in you company.
  • Is the candidate a risk taker? He/she should be. Why would you want someone who is going to move slowly and cautiously in your organization. The best people are aggressive in their actions and play offense all the time.
  • Does the prospective employee fear change? Hope not. In fact, the candidate should love change and even seek it out. Many people are afraid of change and even fight it in passive ways, slowing the organization down. If you want a hard-driving, fast-moving organization, you need people who love to drive and be involved in change.
  • Can the candidate work as part of a team? Not only are great people more effective as individuals, but when put together as part of a team, they can virtually make miracles happen.
  • Does he/she have the skills you’re hiring for? Duh. You’re probably hiring because you’re either stretched too thin or you need new skills in the organization. It’s good to thoroughly check if the candidate actually has these.

This is far from a complete list. There are going to be criteria specific to your organization and core to your success that you’ll add to it. The key point here is that hiring the right people is as important as it gets when it comes to running a company or managing any group of people. It’s the team you have that will make the difference in the end and having the best team possible should never be sacrificed.

 October 11th, 2010  
 Management, Startups  
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Do More Faster . . . Accelerating Your Startup

If you’re an entrepreneur and you’re not familiar with TechStars, it’s time to get your head out of the sand. TechStars is a mentorship-driven seed stage investment program. Its goal is to help fledgling companies and entrepreneurs get going. The key to this help is guidance, mentoring, a little hand-holding and an opportunity to get financed at the end of each three month session.

I’ve been fortunate to have been a mentor for the last two years and an investor in TechStars Boston. I’ve also made seed investments in three TechStars companies, AccelGolf, Socialsci and Marginize. I truly enjoy the mentoring part of the program, there’s nothing quite as fun engaging with smart people on interesting topics and reflecting on the experiences I’ve had starting companies myself over the years.

To capture the thoughts and ideas of some of the mentors in the program, David Cohen and Brad Feld, the brain trust behind TechStars, have compiled a book of advice to startups called, Do More Faster: TechStars lessons to Accelerate Your Startup.

I was honored when David and Brad asked me if I’d write a chapter for the book on hiring people who are better than you are. It’s a subject near and dear to my heart since I fundamentally believe that successful companies are built around superb teams and not necessarily great ideas alone.

Congratulations to both David and Brad. The book, by the way, is available through Amazon now. You can check out more about it at the Do More Faster site.

 October 6th, 2010  
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