Hi, and Happy New Year, dear reader! Hope you had a wonderful holiday. StrictlyVC’s personal reel featured an outing to “Elf the Musical,” a punishing game of Nerf-N-Strike, and the flu, briefly. It was a terrific break; it’s also really nice to be back.
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Top News in the A.M.
The WSJ talks with Mark Zuckerberg and his top lieutenants about how reshaping Facebook’s business around mobile phones has “forced” Zuckerberg to “grow up.” It’s the “story of a vertical learning curve,” Facebook director Marc Andreessen tells the Journal.
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Tony Hsieh and Ev Williams Use Holacracy: Should You?
Last week, we learned that Zappos’ management structure is being replaced with a “self-governing” management system called Holacracy that dispenses with job titles and throws an elbow at traditional hierarchies, replacing them with a flatter structure that distributes power more evenly.
At first blush, the news could be interpreted as a predictably quirky Zappos maneuver by its employee-friendly CEO, Tony Hsieh. But Holacracy isn’t as zany as it sounds. In fact, rather than throw out much of a company’s structure, Holacracy actually applies far more structure to every decision to make it easier and faster to get things done. For example, a traditional management structure where only a few people are authorized to make decisions can lead to delays and missed opportunities. By contrast, Holacracy assigns different aspects of the decision-making process to a wider range of people, theoretically yielding a shorter turnaround on new proposals.
Brian Robertson — a Philadelphia-based management consultant who dreamed up Holacracy in 2007 after struggling to manage his first company — shared a bit more about how it works last week.
Holacracy involves different “circles” and uses “tensions” to steer an organization. Is there another way to describe Holacracy to those who might be confused by that kind of language?
At its core, Holacracy is a power structure for how to run an organization. Alignment, accountability – those are usually done through a management hierarchy. Holacracy doesn’t throw out those things but uses a different structure to get there, so instead of a single CEO, power formally rests in a constitutional process, and everyone is kind of on a level playing field because they know how to influence the organization through those rules.
So Holacracy is less about democracy and more about transparency.
It’s not democratic; decisions are autocratic, with every employee holding a different authority to make certain decisions. So it’s not a big consensus system; it’s just more distributed.
How would a CEO go about learning more? Should they start by scanning the constitution you’ve created? Do they need to hire you?
Any company is free to do what they want with the constitution itself, though we don’t recommend it. It’s a complex game; it’s hard to learn by reading a rulebook.
We find people who are already looking for alternative approaches – CEOs who are aware of the limits of the conventional ways of managing but who don’t know there’s an alternative. Then we offer to come out for a day, and we put them through the Holacracy system and the meeting processes that we use. We also try it with some of the company’s real, live stuff. There’s a big learning curve, but it’s easy to see the potential of it straightaway. We often hear [at these trials] that a company just got 10 times more stuff done than it normally would.
Along with Zappos, the publishing platform Medium is probably the highest-profile company using Holacracy. How did Medium cofounder Ev Williams discover it?
David Allen, the author of Getting Things Done, is highly respected by a lot of interesting people, and when he started talking about us [publicly], Ev noticed.
We wound up having a great breakfast. Ev said when he left Twitter [to start Medium], he was feeling this sense of dread, because he loved creative work, but he hated being a bottleneck manager. He was getting further and further from the work he loved. In fact, most of our clients aren’t people who are excited to have the [CEO] title for the first time; they’re pretty seasoned leaders who experience the same problems [as Williams].
Do you have any proof that Holacracy works?
We definitely lack hard data, but we do have a lot of stories from our clients, including David Allen Company and Precision Nutrition, in Canada. What we hear again and again is that it’s pretty transformative, and it’s usually the CEOs who are our biggest advocates.
New Fundings
Amprius, a six-year-old, Sunnyvale, Calif.-based maker of lithium-ion batteries, has raised $30 million in Series C funding led by the Asian private equity firm SAIF Partners. All of Amprius’ previous investors, including Trident Capital, VantagePoint Capital Partners, IPV Capital, Kleiner Perkins Caufield & Byers, Chinergy Capital, Google Chairman Eric Schmidt, and Stanford University, participated. Amprius was founded by Stanford professor Yi Cui.
DNAnexus, a four-year-old, Mountain View, Calif.-based company that uses cloud computing to manage and analyze DNA data for use in clinical research, has raised $15 million in Series C financing led byGoogle Ventures. Claremont Creek Ventures, TPG Biotech andFirst Round Capital also participated in the round, which brings the company’s total funding to $31.6 million.
Good Technology, the 18-year-old, Sunnyvale, Calif.-based mobile device management company, is raising a new $10 million round, according to an SEC filing that shows it has raised $4.2 million toward that end. Good had raised $50 million in April of last year and has raised hundreds of millions of dollars over the years, including fromOak Investment Partners, Rustic Canyon Ventures, and Draper Fisher Jurvetson among many others. The Wall Street Journal reported last March that Good had hired four investment banks to explore a possible IPO.
Integral Ad Science, a four-year-old, New York-based company whose algorithms help advertisers best place (and protect) their brands on ad-supported sites, has raised roughly $30 million in fresh funding, according to an SEC filing. August Capital appears to be leading the round; the company has raised about $50 million to date, including from Atlas Venture, Pelion Venture Partners, andFounder Collective.
Spredfast, a nearly six-year-old, Austin-based company whose software helps companies manage, monitor, and measure their social media campaigns, has raised $32.5 million in Series D funding led byLead Edge Capital. Other participants in the round included Austin Ventures, InterWest Partners, and OpenView Partners. The company has now raised $64 million, according to Crunchbase.
Vidible, a months-old, San Francisco-based company behind an online marketplace for video content, has raised $3.35 million in Series A funding led by Greycroft Partners. Vidible’s co-founder and president, Tim Mahlman, was most recently the chief revenue officer of Klout; he stayed just 10 months, leaving in June 2012 to become an entrepreneur-in-residence at Greycroft.
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New Funds
Forerunner Ventures, an early-stage venture capital firm based in San Francisco, has raised its second fund, according to an SEC filingthat shows the outfit has raised $55 million. The money comes about 18 months after Forerunner announced the close of its first, $40 million, fund. Forerunner, founded by managing partner Kirsten Green, focuses on digital commerce startups and has backed dozens of startups in the category, including Warby Parker, Bonobos, Dollar Shave Club, and Hotel Tonight.
StageOne Ventures, an early-stage venture firm based in Tel Aviv, is looking to raise up to $100 million for its second fund, says VentureWire. The firm invests in Israeli startups focusing on software, communications, Internet and media. You can find a list of its investments here.
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People
Phil Barnes, a partner at First Round Capital in New York, talks with Fast Company about his New York office, which he designed with an eye toward putting entrepreneurs at ease. “The idea is to create a living room sense,” Barnes tells the outlet, which notes the space could “pass for a showroom at cheap chic retailer CB2, which supplied much of the furniture.”
Amazon founder Jeff Bezos was reportedly flown by an Ecuadorian navy helicopter to his private jet on Baltra Island near the center of the Galápagos on New Year’s Day, so he could be whisked to the U.S. for emergency kidney stone surgery. Bezos was apparently aboard a cruise ship when he became ill. Asked by CNBC to confirm the news, an Amazon spokesperson passed along Bezos’s response: “Galapagos: five stars. Kidney stones: zero stars.”
NPR interviews Paul Bragiel, the San Francisco-based VC who has been struggling to transform himself from “chunky computer nerd” to cross-country skier in the Sochi 2014 Winter Olympics.
If you thought former FCC chairman Julius Genachowski might re-join the world of venture capital after returning to the private sector, you’d be wrong — but not terribly far off! The Carlyle Group has hired him as a managing director and partner on its U.S. buyout team. Before joining the FCC, Genachowski was an operations chief at IAC/InterActiveCorp. He also launched his own venture fund that specialized in digital media companies, Rock Creek Ventures, and helped start the tech incubator LaunchBox Digital.
Greylock Partners’ Reid Hoffman talks with Re/code. Among other highlights, Hoffman says that “interest around the quantified self is interesting. But, for us, we still don’t think it makes it at a venture level.”
The Telegraph profiles super-entrepreneur Elon Musk, and though much of his story is well-known by now, the piece features somefascinating details, including that as a boy, Musk “often withdrew into his own world so completely that he was feared deaf and had his adenoids removed.”
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IPOs
UniQure B.V., a Netherlands-based biopharmaceuticals company whose gene therapy product received regulatory approval in the European Union last year, has filed to go public. UniQure emerged from the ashes of an earlier gene therapy company called Amsterdam Molecular Therapeutics Holding N.V. (“AMT”). Its principal shareholders include some of AMT’s biggest stakeholders, including the life science investment firm Forbion Capital Partners, which owns 35.6 percent of the company. Other principal shareholders include Cooperatieve Gilde Healthcare (it owns 13.5 percent of the company), Advent (it owns 6.2 percent), Coller International Partners (it owns 44.5 percent), and Chiesi Farmaceutici S.p.A. (it owns 9.1 percent).
Greentech Media looks at five cleantech companies that could go public this year.
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Exits
Bitspin, a Swiss company that makes an Android alarm clock app, has been acquired by Google; it plans to keep the app available for free indefinitely, reports The Verge. Terms of the deal were not disclosed.
Mandiant, a 10-year-old, Alexandria, Va.-based information security firm, has been acquired by its publicly traded competitor FireEye in a $989 million mix of stock and cash. Mandiant’s CEO told the Washington Post last week that Mandiant sees annual revenue of $100 million and employs 500 people. The company had raised one, $70 million, growth round of funding in 2011 from One Equity Partners, JPMorgan Chase, and Kleiner Perkins Caufield & Byers.
Sequoia Capital has sold its 1.75 percent stake in SKS Microfinance, an Indian for-profit microfinance institution, to the investment group WestBridge Capital for INR 155 ($2.47) each; Sequoia purchased the stake in SKS five years ago at INR 138 ($2.22) a share.
SnappyLabs, a two-year-old, San Francisco-based photo technology startup, has been acquired by Apple, reports TechCrunch. SnappyLabs was founded and employed by one person: John Papandriopoulos, an electrical engineering PhD from the University Of Melbourne. TechCrunch notes Papandriopoulos dreamed up a way to enable iPhone’s camera take full-resolution photos at 20 to 30 frames per second — far faster than Apple’s native technology.
Twisted Pair Solutions, a 14-year-old, Seattle-based company, hasbeen acquired by Motorola Solutions for an undisclosed amount. Twisted Pair’s technology creates an integrated communications system for smartphones, tablets and PCs, allowing them talk to each other securely in mission-critical business, public safety, and military applications. According to Geekwire, Twisted Pair raised one round of financing, a $9 million Series A round from Ignition Partners, Core Capital Partners and Chart Capital Partners.
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Happenings
It’s early January, which means it’s time for the annual “Super Bowl for geeks,” the Consumer Electronics Show in Las Vega$, baby. Will the Hollywood stars, popular musicians, sports legends and TV personalities in attendance be enough to draw you into the mix?
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Job Listings
Thomvest Ventures — a venture firm that invests on behalf of Peter Thomson, whose family owns the majority of Thomson Reuters — is looking for a venture analyst. The job is in Redwood Shores, Calif. Applicants should have between one and three years of investment banking experience; a past role at a tech company (big or small) is a plus.
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Data
According to Pitchbook, 868 venture-backed deals, funded by 1,814 investors, generated $56.5 billion in exits last year. More here.
Looking ahead, says CB Insights, long-beleaguered Kleiner Perkins Caufield & Byers now has a bigger pipeline of potential 2014 tech IPO candidates than that of any other venture capital or corporate venture capital investor. Says the outfit: “Of the 590 private U.S. tech companies with a real or rumored valuation over $100 million and who are demonstrating significant momentum based on our private company Mosaic ratings, Kleiner Perkins has 50 of them.”
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Essential Reads
“60 Minutes” reported last night on the “cleantech crash.” The video and script, which you can find here, has cleantech investors like Rob Day asking the show to “pay more attention.” As Day tweeted last night, “If the @60Minutes piece had come out 3 years ago, it wouldn’t be such horribly stupid uninformed drivel.”
“Some years, you are up. Other years, you are down. One month, you are running the Valley’s most celebrated company. And the next, you are everyone’s favorite punching bag. Sometimes you raise a motherlode of a Series B, and a year later the entire landscape has changed around you and you’re screwed.”
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Detours
The world’s ultra-rich are snapping up units at a new high-rise in Miami. Maybe it’s the car elevators?
Isaac Asimov’s predictions for 2014 were eerily prescient, except for the Internet.
Snowstorms, then and now.
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Retail Therapy
Bugatti, in partnership with Roland Iten, now makes a mechanical belt buckle that effortlessly cinches one’s pants. At a cost of $84,000, you may think it absurd. But to a one-handed billionaire? Maybe not so crazy.
This IPhone lanyard is so wrong that we might have to buy one.
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