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Mistaken at the top of one's voice

Let’s face it.  It takes a fair amount of hubris to play venture capitalist.  We have the confidence to choose perhaps one out of every fifty companies that we consider in any depth, we pride ourselves on our judgment of entrepreneurial character, and we freely offer advice in and out of the boardroom to our portfolio managers, themselves deep experts in their fields.  We do so while betting on growing and volatile industries characterized by rapid technological change.  And we continue to do so although we collectively have now compiled a 10 year track record of futility.

At Osage Partners, we even manage to take pride in our modesty.  We believe that entrepreneurs are the engines of wealth creation, and venture capitalists are the caboose.  We articulate our respect for entrepreneurs by celebrating their role and, to some extent, downplaying our own.  When a management team shows up at Osage for a 10:00 pitch, the meeting starts at 10:00.  Every Osage team member in the room has read everything the entrepreneur has provided us – before the meeting.  We have a no Blackberry rule.  And, where possible, we give direct and immediate feedback on what we like and don’t like about the opportunity.  In other words, we believe that the entrepreneur’s time is no less valuable than our own.

We try to treat modesty as our core investment philosophy.   We get nervous when we feel too strongly about making an investment.  I like to think about the lessons to be learned from Ambrose Bierce’s The Devil’s Dictionary, starting with:  “Positive” means “Mistaken at the top of one’s voice.”  When in the past we started shouting about a deal, we have always stopped listening about it as well.  We also get extremely nervous when our co-investors start crowing with confidence.  Another Bierce reflection:  “They say that hens do cackle loudest when/There’s nothing vital in the eggs they’ve laid.” 

Modesty aside, we are still VCs, and we think we are pretty decent at what we do.  We love our portfolio and think that we bring something pretty special to our enterprise software niche.   We have done this long enough to have an idea or two that are to the benefit of the entrepreneur and to the company.  Otherwise, we would be doing something else for a living.   In the end, we try hard to balance our deep conviction in the uncertainty inherent in venture investing and our commitment to the centrality of the entrepreneur with an acknowledgment of a healthy self-esteem.   And when the latter begins to become too much, the The Devil’s Dictionary sets us straight.

Self-esteem, n.

                An erroneous appraisement


  *   *   *

A few other favorite Bierce definitions:

Future, n.

The period of time in which our affairs prosper, our friends are true and our happiness is assured.

Opportunity, n.

                A favorable occasion for grasping a disappointment.

Patience, n.

                A minor form of despair, disguised as a virtue.

Vanity, n.

                The tribute of a fall to the worth of the nearest ass.

Zeal, n.

                A certain nervous disorder afflicting the young and inexperienced.  A passion that goeth before a sprawl.


Why Do We Fly For Business  

Having just walked from the front of economy of a crowded plane to the back and then forward again, it is ever clear to me that most people do not work on airplanes.  It’s 1:35 in the afternoon on Monday January 10, this plane has Wi-Fi and it has been a smooth flight.   Most people have their laptops out – and – have their movies playing or have their games going.   Facebook is a strong third.   Would we be doing this at the office?

Face it.  We don’t work when we travel or we certainly don’t work as much.  At trip from Philadelphia to the West Coast for four days – what do I gain, what do I lose, what could I have done through a less  costly and less life-invasive approach?   The problem is that companies are spread out, their customers are global, people need to collaborate and the tools we use today for collaborating remotely are unsatisfying or are overly complex or both.   Put me in a netmeeting like LiveMeeting, Placeware, or Gotomeeting and I spend half the meeting doing email, browsing the web, or doing my typical ADD office behavior.   Put me on a multi-person video cast, assuming my company has spent the money and has the IT support for this, and it still takes 30 minutes for 80% of the participants to get coordinated, and 20% call in.   By the way, how do we share data effectively and quickly among multiple parties under either a netmeeting or a video conference?  Not easy if it’s possible.

Our portfolio company, ProtonMedia (  has taken a different approach to remote collaboration using a virtual world environment, avatars, and data carousels for information collaboration to allow people to be brought together in highly engaging interactive sessions.   When people who have used the solution, including world renowned scientists in poster boarding sessions, say that it is better than being there – we sit up and take note.  Now that ProtonMedia has gone live as a Microsoft Lync partner, corporate access and mainstream use has become even easier.   While still early and still evolving, ProtonMedia users are going to think twice before getting on a plane – unless they are behind in their movie watching.

ProtonMedia has a great blog you can get here  or get to through their website or check out this recent interview of ProtonMedia CEO Ron Burns by industry thought leader , Tom Keating, highlighting the recent ProtonMedia and Microsoft Lync release. ( .

In a couple years, I hope that the evolutions toward advanced collaboration solutions, including those like ProtoSphere, ProtonMedia’s virtual world, will make this trip and many others not necessary for me. 

Well, my battery is dying so it’s time for a movie on my IPad.




Democracies Cannot Operate in Fear  

The shooting of Rep. Gabrielle Giffords in Tucson is reprehensible and disturbing.   For a congresswoman to be stuck down on a street corner in her district, just because of her political positions, cannot be tolerated.  Yet as reprehensible and disturbing as the violent act in Arizona is, it is not shocking.  That in itself may be the scariest fact of all.

Last spring I had the opportunity to speak to a member of congress soon after the Healthcare Reform bill had passed.  I congratulated this congresswoman for having achieved such a victory which she had strongly supported.   She spoke of the environment of fear in Washington during the weeks preceding the vote.  She described how congressional security officers had discouraged members of congress or their staff from walking on the mall.  She provided vivid detail of how frightening it was for members and staff to be entering and exiting the Capital as protestors screamed at and threatened them.   It was an awakening for me that members of congress not only needed to be brave about their convictions, but by supporting or not supporting specific bills, they put their lives at risk.  Such bravery is not on the congressional job description.

This is no political statement and I am in no way championing congress or endorsing their performance or any party over the other – this is a business issue.  We at Osage invest in businesses in this country and as investors we rely on a rule of law, a culture of informed debate, and a stable and working government not cowed by fear.  If those who govern fear, not reelection but their lives, by voting their conscience, then the structure and basis for many institutions run the risk of crumbling.   Congress cannot perform its duties while operating in fear, and those entrusted to protect congress must ensure that congressional members can vote their conscience and not their security.   Bottom line – there are many committed public servants in Congress who should not be voting out of fear of violence, only out of fear of losing the support of their electorate.


Enterprise Technology and the Jobless Recovery  

Many people look at the current economic indicators and shake their heads.   Unemployment just under 10%, consumer debt issues lingering, over 3 million additional home foreclosures expected in the next 12 to 18 months, yet the Dow is close to or above where it was when the financial crisis hit in the third quarter of 2008. 

How is it that business has recovered and jobs have not? 

I came across an article written by the consultancy, Oxford Analytics, which was published on almost 18 months ago.   This article gave predictions for the jobless recovery and the reason for it.  I have pulled some key points:

“ Jobless recovery. Economic theory offers a possible explanation as to why the effect of downturns on labor demand can be extremely long-lived or, in other words, why recovery, in effect, can be 'jobless':

--When there is a downturn in economic activity, employment rates fall (i.e., jobs are lost) and companies stop investing in new technology.

--However, since the innovation cycle is much longer than most downturns in the business cycle, the rate of innovation in the economy is not overly affected--new discoveries continue to be made.

--This means that when demand starts to recover, surviving companies have the option to buy into the latest technology.

--Those that do so soonest are likely to be the most competitive and hence best able to increase productivity.

--For a time, companies can increase production by investing in new technologies, and thus delay re-hiring people. “

As enterprise technology investors, we at Osage Ventures have had the opportunity to see the impact of the recession and recovery on a variety of portfolio companies as well as on hundreds of businesses who come to us seeking capital.  What we have seen, especially over the last twelve months, is strong confirmation of these predictions.  Corporations that typically purchase technology from our portfolio companies are indeed opting to spend dollars to improve productivity through technology investment instead of hiring or rehiring and that the prediction of 18 months ago is being realized to the detriment of the American worker and to the benefit of enterprise technology innovators.

To extend this thought further, one could argue that the cutting of people and the temporary freeze on technology spending shifted the status quo for IT departments and that when spending on technology was restarted, it was done with a sense of urgency that this spending must be efficient, must address the most critical corporate issues, and must be focused on step change, not incremental innovation  -  innovation which had continued to evolve and to push forward during the recession

We believe that the benefits of this corporate technology spending shift will accrue to the new innovators in enterprise technology and not the traditional legacy technology providers, thus creating a very attractive investing environment in the foreseeable future.


Fables for Our Time

When I was in middle school I was briefly addicted to James Thurber.  I thought he was the funniest writer on the planet, and was thrilled to learn a decade later, in a literature course in college, that he was not only a funny writer but also an exceedingly skillful one.  For a time I had the bad habit of trying to describe every situation in Thurberesque terms, but over the years I kicked the habit, mostly.

Thurber wrote a series of satirical short stories, called “Fables for Our Time,“ one of which involved (and was called) “The Owl Who Was God.”  A series of woodland animals approach an owl who, limited in his vocabulary to the expression “to wit” and “to woo,” miraculously answers every one of their questions with wisdom and accuracy.  Word quickly spreads that the owl not only sees at night but has supernatural wisdom, and a great crowd of animals make him their leader and follow him while he marches them, in the (to him) blinding noon-day sun, into the path of an onrushing truck.  The owl, unafraid, marches right onto the highway, the awe-struck animals, shouting “He’s God!” follow, and the inevitable catastrophe ensues.  Thurber’s modern moral:  “You can fool too many of the people too much of the time.”

It is easy pickings to Thurberize the venture industry.  We are repeatedly fooled by the latest hot catch phrase (we lost our to-wits during the dot com craze, and we have been easily to wooed by the cleantech goldrush).  We have an exceedingly high false positive rate when it comes to choosing our entrepreneurs.  We most certainly engage in group think.  We pride ourselves on our pattern recognition skills, but (and this is a topic I hope to take up in the future) what we recognize are mostly important bricks in the edifice but not the underlying architectures of success.

What I like about the story is less the lemming-like quality of the secondary characters but the deep innocence of the protagonist.  Investment crazes are not led by cynical schemers; rather, they are led by true believers who, having made perhaps one or two perspicacious comments, suddenly find themselves anointed and quickly believe their own press.  Those of us who have lived through a few bubbles and have perhaps even benefited once or twice by being on the right side of one, know what it is like to believe – at least for a few glorious months – that everything your grandmother ever bragged about you was the gospel truth.  It turns out that it is not that hard to be blinded by a noon-day sun.

The best defense against being fooled is a very healthy sense of modesty and a religious commitment to asking questions, including dumb ones.  In Thurberland, the most successful and long-lived characters are usually the most modest ones.  The dog who is loathe to fight; the fox who asks the question everyone else thinks is moronic; the sparrow who accepts the premise that air has crystallized in a nearby field (a large piece of plate glass) and refuses to try to fly through it.  I suspect that modesty is a key success factor for venture capitalists as well.  

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