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In his book Outliers, Malcolm Gladwell talks about the power of circumstance. He explains that Bill Gates and Bill Joy had unprecedented access to the earliest computers and, as a result, they built a couple of the most important computer companies in the history of computation. A quick look at the folks who graduated from law school with me at the dawn of the Internet age (it sounds so long ago when you put it that way) and you can see the power of circumstance at work again. In my law school class were four of the most well-respected Internet scholars: Professors Jonathan Zittrain, Yochai Benkler, Kevin Werbach and the Obama administration's deputy CTO, Andrew McLaughlin. It is an impressive group of very thoughtful men and I consider myself lucky to have been in school with them and to continue to trade ideas with them from time to time.

For those of you who are interested in hearing what one of these experts is thinking about internet law, there is a great event taking place on Wednesday night (November 18th) at the Computer History Museum. Jonathan Zittrain will be giving a talk on "Minds for Sale," followed by a reception. The event is being put on by the Berkman Center -- Harvard's center for the study of the Internet. I am a huge fan of the Berkman Center and occassionally am lucky enough to spend some time back east in their hallowed halls. There will be a fantastic group of folks at the event and it is open to the public. So if you are interested in meeting up with the friends of Berkman and hearing a great talk by Professor Zittrain, please come on by.

True, no one asked me. But here's my two cents anyway. Twitter should open up its platform to advertising. That's right, advertising. Forget all this hoo-ha over selling data or paid business accounts or dashboards . . . Twitter has everything it needs to build a wildly-successful ad driven business model. It should get on with it.

The two hallmarks of successful advertising-driven businesses are 1) massive scale and 2) abundant context. How has MySpace built such strong advertising revenue atop their social media platform? Huge scale and a ton of context. Same is true of Facebook and Yahoo and Six Apart. And, of course, the mother of all ad supported businesses -- Google -- is all about scale and context.

Twitter's scale has been well documented. Huge and growing. Does the fact that much of the Twitter traffic exists on third party clients make in-stream advertising less practicable? I don't think so. I think it actually solves the problem of how Twitter will be able to monetize its off-platform traffic. Third party apps can choose to present ads along with the rest of the stream or pay a fee to receive advertisement-free data.

As with each of the social media platforms listed above, Twitter's unique experience will require a unique ad format. In this instance, I think the format is pretty easy to envision. Twitter should constrain advertisements on its system to 140 characters or fewer. By doing so, Twitter ads will be pretty spartan. But if Google ads have taught us anything, it is clear that a relatively small number of characters and a link are more that sufficient to engage a consumer. Moreover, by matching the ad format to that of a tweet, the ads will not only fit well with the consumption behavior on Twitter.com, it will also work well with the many third party experiences enabled by Twitter's API. Twitter need only create some visual distinction between tweets and ads and it can very simply insert the ads in the tween stream, as can Tweet Deck and Siesmic and Tweety and StockTweets . . . .

What about context on Twitter? Huge and growing. The very data others have suggested Twitter should sell to third parties is invaluable to create the necessary context for a successful advertising model. Not only will Twitter know the things about which any given user is tweeting, it will also know who that user is following and the things about which they are tweeting. That's a huge amount of context for advertisers. I'm guessing Toyota would love to advertise to an individual who tweets about shopping for a new Honda Hybrid. And they are likely just as eager to advertise to an individual who follows numerous eco-tweeters. It is easy enough to envision a self-serve platform that allows a huge range of advertisers to bid for context and get great results.

The best thing about context-driven advertisements is that, when well-executed, they can be viewed by consumers as content, not just advertising. Look at Google's ads as case in point. It has been a long time since I've heard even a hint of objection to advertisements on Google. Why? Because the ads are often more compelling than the organic search results they appear beside. True, Twitter ads won't be a response to a query like in Google. But there should be more than enough signal for businesses to get great results advertising on the platform.

Finally, I think that users would embrace Twitter ads. We all recognize that Twitter needs a business model and we all want a long-term sustainable platform. If executed well (watch out for those lurking privacy trolls!), Twitter ads would become a natural part of the Twitter experience and add value, not take away from it. Better yet, we could all stop speculating about Twitter's business model and move on to more interesting discussions about things like the transformative impact of the real time web. So do us a favor Twitter and start serving ads already. I, for one, look forward to it.

First came the announcement earlier in the year that Marc Andreessen was joining the ranks of "capital" -- a welcomed defection from "labor." And now my friend Reid Hoffman has jumped into the fray as well, joining Greylock Partners in their new fund (although he is not quite abandoning "labor" -- for the time being he will continue on as Executive Chairman of LinkedIn). Having two superstars like Marc and Reid join the venture business is excellent news at a time when the press is gleefully touting the demise of our profession. While the venture business is, no doubt, under serious pressure these days, Marc and Reid have rightfully determined that there will always be room for brilliant, thoughtful, long-term investors who see the immense value of innovation. There is no question that Marc and Reid both fit that profile and will have long, successful venture careers.

I have known Reid Hoffman for a long time and have greatly enjoyed the time I have spent with him. Reid has fantastic instincts, is a generous soul and is an intellectual powerhouse. But the thing that I think separates Reid from most of those around him is his thoughtfulness. Reid does not shoot from the hip. Ask him a question and he doesn't immediately launch into an answer. He cocks his head, thinks, and -- only when he feels he has an answer worth delivering -- shares his thoughts on the matter. His thoughtfulness as an entrepreneur, an investor, a board member (I have the pleasure of serving on the Six Apart board with him), harken back to his roots as an Oxford-trained philosopher. Reid's opinions are rooted in history and reason. Things need to "make sense" in the broadest sense of the term for Reid to embrace them. And as a result, he shares smart thoughts, builds smart businesses and makes smart investments.

When word of Reid joining the venture business was first announced, a friend of mine lamented the fact that Reid was now the "competition," but I have to say I really don't see it that way. I can't think of a single wildly-successful, venture-backed company that only had one venture firm as an investor (I guess with the exception of Microsoft, in which my partner Dave was the only professional investor). Company building is a team sport and now, more than ever, who's on your team really matters. That obviously includes the team of entrepreneurs who are building the company. But it also includes the team of investors who are supporting that team of entrepreneurs. So I don't view the arrival of Reid and Marc as greater competition in the venture business. I view it as the arrival of fantastic new collaborators with whom I look forward to working. The more smart people around the table, the better. Welcome, Reid and Marc! We're thrilled to have you on our side of the table.

In the past three weeks, I have attended 2 memorial services and 2 brises. The brises celebrated the births of two future superstars -- the sons of four of the smartest entrepreneurs and venture investors in the Bay Area. The memorial services celebrated the lives of two recently deceased superstars -- both entrepreneurs and venture investors in their own right. As I listened to the stories of the lives these great men had lived, and listened to the toasts and prayers for these great men-to-be, it struck me that there were lessons to be learned for entrepreneurs and venture investors alike.

Just over two weeks ago, I sat in Stanford's Memorial Church, listening to the friends and colleagues of Rajeev Motwani share stories of Rajeev's incredible life and legacy. The outpouring of love and respect for Rajeev was overwhelming. He had touched so many people as a professor, investor, advisor, father, friend. I left the memorial feeling grateful to have been Rajeev's friend and colleague and awed by all that he had accomplished.

Sadly, today I attended another memorial service -- this time for Craig Johnson, the founder of Venture Law Group. Again, the memorial service was filled with stories of a life well-lived. Craig was an incredible builder and connector. After helping hundreds of up and coming entrepreneurs get their businesses off the ground, Craig couldn't help but innovate himself. He launched Venture Law Group in a time when others were complacent to practice law as it had always been practiced before. And recently jumped into the fray again, innovating on the model once more, this time founding Virtual Law Partners. Craig was an unendingly positive man. I was lucky to have started my professional career in the Bay Area in the house that Craig built (VLG) and am deeply saddened to see Craig go.

As I sat in today's service, it struck me that there were certain common themes that flowed through both Rajeev's and Craig's memorials. And it struck me that those themes were perhaps at the heart of what it takes to be successful in Silicon Valley.

Both Rajeev and Craig were deeply intellectually curious people. They loved to learn new things. They loved to explore new ideas. And when they became enthralled with a new idea, both Rajeev and Craig couldn't help but explore that idea with a rigor that one might say bordered on obsessive. They dug in and looked at the idea from all angles. They examined and cross-examined the idea. And those ideas that survived their scrutiny inevitably proved interesting and valuable and worthy of investment (be it in time or energy or dollars).

Both Rajeev and Craig were incredible connectors. So many of us at their memorial services had been introduced to one another by none other than the men we were there to honor. And the scale of both memorial services was a testimony to the vast reach of their respective (and overlapping) networks. But networking wasn't a cynical endeavor for Rajeev or Craig. It was a natural outcropping of their intellectual curiosity. They were as curious about people as they were about ideas. They took a genuine interest in the people with whom they surrounded themselves, and therefore were able to make real, valuable connections among their friends and colleagues.

Most importantly, both Rajeev and Craig were unendingly generous with their time. They were wonderful people to have as friends. They were superb mentors. They were patient advisors. But they weren't just generous to those people they already knew. Rajeev and Craig made time for everyone. And they managed to do it in a way that made everyone feel special. Rejeev's graduate students all felt that they were getting a disproportionate amount of his time. Craig's clients all felt that they were his priority. Rajeev's portfolio companies all felt they had instant access to his advice. Craig's colleagues all felt that he was their personal confidant. And they were all right. Rajeev and Craig were there for everyone. They always made time for those of us around them. And, in return, we all would do anything for them. All they had to do was ask (which, not surprisingly, they didn't do very often).

I will miss both Rajeev and Craig. They were amazing men. And they were amazing role models for all of us in SIlicon Valley.

Relatively recently I hosted a meeting of the advisors to one of my portfolio companies. It was an impressive group of tech veterans. Each of them had been involved in the building of multi-million dollar high tech companies. Yet, what struck me about this summit was how many of these computer gurus carried with him a good, old fashioned notebook. Two varieties seemed to dominate the gathering -- the classic, leather-bound Moleskin and the pocket-sized graph paper Rhodia. I was surprised to see so much scribbling and so little typing. Since that meeting, I have kept my eyes out for this notebook phenomenon and have been amazed by how many startup CEOs, Venture Capitalists, attorneys, etc. have forsaken the digital world for the analog.

Why is it that this all-star crowd of tech moguls had pushed aside the very digital domain about which they were so madly taking notes with pen and paper? I think the answer is data overload. The digital world is a land of plenty. Plenty of emails. Plenty of social networks. Plenty of corporate wikis and portals and knowledge management systems. The typical executive these days needs to deal with hundreds, if not thousands, of data points across dozens of services each day. While we all necessarily find ways to consume this huge amount of information, segregating the truly important stuff remains a big challenge. And this is where the notebook comes in.

Notebooks have certain enviable characteristics. They are instant on -- even faster than a laptop with a solid state drive. They have virtually unlimited storage -- just boot a new notebook when the pages are filled. And they perform better than tape for archival storage. Direct sunlight is no problem for a bright white piece of paper. And power management is rarely a problem (although your pen may run out of ink). Notebooks don't require any connectivity. They aren't susceptible to viruses. And they are highly portable. [1]

Given all the analog goodness of notebooks, it is no surprise that there has been a resurgence of paper. Don't get me wrong. I'm not a Luddite by any means. I'm a firm believer in a laptop in every room and a smart phone in every pocket. But, when it comes to keeping track of priority information, it would appear that notebooks are becoming the tool of choice for technology's elite. Perhaps I should hedge my bet and buy some stock in Apple and in Mead.

[1] I realize Notebooks aren't perfect. They perform about as well as laptops when exposed to the elements. They are a terrible collaboration tool. And I have yet to see an effective way to backup your notebooks.

This weekend I was reading a blog post written by Chris Douvos. Chris is an investor in a number of well-known venture firms and writes a blog called Super LP. His commentary always cracks me up, even when he's writing about the finer points of risk curves, financial models and the like.

In his post entitled "Keeping the Window Open," Chris cautions the investor community to not be too overzealous in taking companies public during this time when the gently re-emerging market is so fragile. As he rightfully points out, those companies that go public and then promptly miss their numbers, not only tank their own valuations but also spoil the markets for everyone else. If investors can't trust newly minted public companies to do what they said they were going to do, the markets will simply reject future public offerings as more of the same old head fake.

The conversation reminded me of the good old days when I was an attorney. One of my final acts as a lawyer came at the board meeting of a rapidly-growing but somewhat erratic startup. The venture investors in that startup sat at a board meeting reveling in their growing user-base and began discussing the idea of taking the company public. The VCs were in rousing agreement that we should promptly commence work on the company's S-1.

Lacking a certain self-preservation gene, I pointed out to the VCs that should the company miss its numbers after going on file, it would have to pull the filing and be in a much worse position than when it started. Thus, I strongly recommended that the company wait until it had greater predictability of revenue before filing to go public. Not only were the VCs not wowed by my erudite advice, they promptly fired me and hired another attorney to draft the S-1. Of course, I would not be telling this story if the startup did not ultimately miss its numbers and have to pull the filing. More importantly, this was precisely the sort of company Chris cautions us VCs against taking public this time around -- and I am with him one hundred percent.

There are too many great companies lined up and ready to get public for us to jeopardize the IPO window trying to get middling companies out. As Chris rightfully notes, if we can take solid companies public, "[t]heir success should lead to more opportunity for other companies." If, however, we take marginal companies public, their lack of success will spoil the market for even the most solid of performers.

I realize that the lure of liquidity may be too much temptation for some in the venture community, but I would urge patience in the face of uncertainty. The venture business is a long-term business and the more we can do to grow the overall pie by being circumspect about those companies we bring to market, the better off we all will be in the long run.

When I first became a Venture Capitalist, I had been a practicing attorney and my partner Dave passed on the somber news that he believed there was a good chance that I would fail at the venture business. He explained to me that lawyers were "agents" and Venture Capitalists were "principals" and that being good at one was no indicator of being good at the other -- in fact, Dave felt that being a good agent suggested you would not likely make the leap to being a good principal (but, hey, he liked me so we'd give it a go). Dave's assessment wasn't without historical support. If you look at the venture business, service providers (lawyers, accountants, etc.) don't have a great track record of making the transition from agent to investor. But, despite that fact, I think that being a service provider was excellent training for the venture business.

I got to thinking about this question earlier in the week when I was asked by a friend to discuss "brand" and "brand building" with his team of service professionals. He suggested that it might be interesting for me to talk about how I approached building brand as a lawyer vs. building brand as a VC. And as I pondered that question, I realized that I thought about it exactly the same way.

I should start with my definition of brand. In the venture business (or legal business, for that matter), I don't think of brand as some abstract piece of intellectual property acquired through countless millions of dollars in advertising, sponsorships and the like. Rather, for individuals and firms of individuals, brand is acquired through countless interactions with your customers and the relationships you build from those interactions. In other words, brand is a reflection of how you are perceived on a personal level by your customers.

So who are my customers? One might argue that my customers as a VC are the Limited Partners who invest in my fund. And, to a certain extent, that is true. Without my LPs, I would have no money to invest. But, to my mind, the best way that I can serve my LPs is to appropriately view entrepreneurs as my primary customers. Without entrepreneurs, I will have nowhere to invest my LP's money. And without great entrepreneurs, I will have no economic returns to distribute to my Limited Partners. In fact, without entrepreneurs, the VC business would be a bit like "Waiting for Godot."

Given all that, the conclusion that I have come to is that the best way to be a successful VC -- and maintain a positive brand in a business so fraught with detractors -- is to act like a service provider. The executives of my portfolio companies are my clients. But all entrepreneurs are potential clients. And I need to behave accordingly.

When I was a service provider, I built a reputation on sound advice, responsiveness, attention to detail, ethical behavior, loyalty, tenacity . . . all of which, I believe, are valuable traits for a Venture Capitalist. In the past, I have been asked by entrepreneurs "what will you do for us if you are our investor?" My answer is always the same -- "what do you want?" It is my job as a VC to serve my entrepreneurs (and, in so doing, serve my Limited Partners). Whatever I can do, I will. And I believe that is the right way of thinking of it. Entrepreneurs are not here to serve VCs. VCs are here to serve entrepreneurs. What can I do for you?

I've just returned from a trip to Paris with my family and have to say that I found the use of my iPhone on the trip pretty transformative. For those of you who haven't travelled as a tourist in a foreign city before the iPhone, it used to go something like this -- buy a travel book (or two or three) and plan out what you'd like to see, as best you can. Email your friends and gather as much advice from them as possible to assist in the process of picking out things to see and places to eat. Get a tourist map when you arrive in the city and mark down the locations of the things you want to see and the places you want to eat. Go to your closest subway station and get a subway map, then try to match it up with your tourist map. Commence touring around city with tourist map and subway map scrunched in your back pocket and guide book in hand, periodically pulling out unwieldy maps and books to try and figure out where the heck you are and what you are seeing. At all times look like a dorky tourist.

Enter the iPhone. No need for those paper maps. No need for those heavy guide books. This one little device in your pocket literally does it all.

Before heading to Paris I did two things that set me up for smooth traveling. First, I called up AT&T and pre-paid for international data. Data doesn't come cheap in Europe but it is cheaper if you pre-pay. I never made a phone call while in Paris, but I used plenty of data. The second thing I did was loaded up on a bunch of useful apps. I got a good translation app -- invaluable when stuck on a menu item -- and a French Tutor app. Sadly, no amount of listening to the proper pronunciations of French phrases could help my accent (just ask my kids, who teased me mercilessly every time I attempted a French word). I also dowloaded a French Metro app that had a full subway map and would use GPS to find the closest Metro station from anywhere in the city. Along with those apps, I spent five bucks on a Rick Steve's Paris Tour but didn't really ever use it. It had some good histroical info but I tended to use Wikipedia for that, rather than Rick. Ok, ready to cross the pond, as my dad would say.

While in Paris, I could count on the iPhone to answer two questions reliably: 1) where am I? and 2) how old is that? While that may not seem like much, I would say it accounts for more than 50% of inquiries while traveling around Europe. I can't understate the power of pulling up Google Maps on the iPhone when you emerge from the Metro. No more trying to orient yourself on a paper map. Just launch Google Maps and there you are. Better yet, if you have the new iPhone, you can even see which direction you are pointing, so you won't have to walk a block just to realize that you are walking in the wrong direction. Looking for a particular museum or restaurant? Search for it on maps and, voila, there it is located with a red pin. The iPhone takes out all the gueswork in navigation.

"How old is that?" isn't the only question the iPhone can answer. It can also answer "Where did Picaso live?" or "Who's burried in Père Lachaise?" or "is the Louvre open on Tuesday?" If you are looking for a good crepe in the Marais, the iPhone will pull up all the crepe restaurants around, along with ratings and reviews. If you're wondering when's the best time to visit the Eiffel Tower, no problem.

Admittedly, the iPhone isn't the only device that can help you find your way around Paris. Nearly any smart phone will do some or all of the things that made my experience with the iPhone so satisfying. I am not a an iPhone zealot by any means. I still carry a Treo in one pocket and iPhone in the other (give me an iPhone with a keyboard and I may think about carry just one phone). But the combination of useful apps, smart map and GPS integration and powerful web browsing made traveling in a foreign city with the iPhone a joy.

I would like to take this opportunity to welcome Marc Andreessen and Ben Horowitz to the Venture Capital fold. In a time when venture investors are often criticized by the entrepreneurial community, it is a pleasure to have two of the greatest entrepreneurs of our day join the VC business. I am often asked by my business school and law school students what the best path is to becoming a Venture Capitalist. My answer has been pretty consistent over the last decade -- start or join a wildly successful startup and add a lot of value. It is hard to argue that Marc and Ben haven't done that in spades. They have touched some of the most important technology companies of the last decade and continue to play an influential role in Silicon Valley. As such, they have seen all sides of startup creation and financing. They bring perspective, intellect, integrity and energy to Venture investing and I couldn't be happier to have them join the industry.

As I understand it, the Andreessen Horowitz firm and August Capital share a number of the same Limited Partners. That doesn't surprise me. As I read Marc's blog post this morning about his new firm, I was struck by the similarity of our focus. He lays out a vision that is nearly identical to ours at August Capital. When we were out raising our current fund at the beginning of this year we articulated to our limited partners our continued belief in great technical founders who are building game changing technology and we made clear that we remain bullish on the future of technology and the ongoing capacity to make a lot of money investing in information technology startups.

I would urge you to read Marc's blog post about his new fund. As I said when Marc first started blogging, he is one of the most articulate voices in the technology industry. And he is now one of the most articulate voices in the Venture Capital industry. Just to hit on a few of the highlights of the Andreessen Horowitz philosophy:

• Technology and its advancement is absolutely central to human progress. Entrepreneurs who create new technologies and technology companies are improving the standard of living of people worldwide and unlocking amazing new levels of human potential.
• A technology startup is all about the entrepreneurial team and their vision. Our job as venture capitalists is primarily to support entrepreneurs by helping them build great companies around their ideas.
• And, while there are many extremely bright and capable entrepreneurs all over the world, there continues to be a special magic to Silicon Valley -- which is where we will focus.
• Above all else, we are looking for the brilliant and motivated entrepreneur or entrepreneurial team with a clear vision of what they want to build and how they will create or attack a big market. We cannot substitute for entrepreneurial vision and drive, but we can help such entrepreneurs build great companies around their ideas.
• We are hugely in favor of the founder who intends to be CEO. Not all founders can become great CEOs, but most of the great companies in our industry were run by a founder for a long period of time, often decades, and we believe that pattern will continue. We cannot guarantee that a founder can be a great CEO, but we can help that founder develop the skills necessary to reach his or her full CEO potential.

As I said at the outset, I don't know that I could articulate it better myself. I welcome Marc and Ben to the Venture industry and look forward to working with them.

I have spent the better part of this afternoon and evening trying to do anything other than think about the passing of my good friend Rajeev Motwani. But I have failed. The thought that Rajeev has left us is hard to fathom. Rajeev was part of the fabric of Silicon Valley. He was part of the fabric of Stanford. And he was part of the fabric of August Capital.

For a number of years now, Rajeev has attended our partners meetings every Monday afternoon. As a tenured professor, Rajeev could not join us as a partner of August Capital. But he enjoyed participating in the back and forth of the partnership discussions. He enjoyed debating the merits of every new innovation. And he was quick to share his point of view on each technology or company or entrepreneur. But he particularly enjoyed that when partner meeting talk turned to the mundane or administrative, he could give us a sly smile and quietly slip out the door.

Rajeev didn't have time for the mundane. He was too busy talking with everyone about everything. You would be hard pressed to find a more connected or more informed professor, technologist or investor than Rajeev Motwani. He worked tirelessly, meeting anyone and everyone who requested an audience with him. Students sought his advice on grad school. Entrepreneurs sought his advice on financing strategy. Investors sought his advice on technology trends. We all just wanted a little bit of Rajeev's time. And he always seemed to have that little more to give us.

For those of you who didn't know Rajeev, you might get the impression that he was your typical Silicon Valley insider -- loud, brash, full of bravado. He was anything but. Rajeev was soft spoken and gentle. He was self-confident but didn't feel the need to prove anything. He didn't speak to hear his own voice. And he didn't need to be the center of attention. Rajeev just wanted to be helpful. And he was. To so many of us.

Perhaps that is why so many of us thought of Rajeev as a friend. It is one thing to be friendly with someone in the business world. It is another thing altogether to consider them a friend. Rajeev genuinely liked people and people genuinely liked him. So it is no surprise to me that testimonials about people's friendships with Rajeev Motwani are popping up all over the Web (here are the words of friendship and admiration from Sergey Brin, Om Malik and Dave Morin, to point to just a few). I am sure that the testimonials will keep on coming in for days and weeks to come.

While I could certainly go on about Rajeev's intellect, his curiosity, his business acumen, let me just say one more thing about him and his character. Rajeev was a wonderful family man. I say that as the very highest form of praise. Rajeev loved his wife Asha (as do all of us who know her) and he adored his children. Rajeev's face lit up when he talked about his family. And he prioritized them above all else. No one will miss Rajeev more than his wife and kids and, while I can only feel some small piece of their pain, my love and support goes out to them during this tough time.

Rajeev Motwani, you are missed already. And you will be missed for years and years to come. You have left us far too soon.

Today TechCrunch posted a list of the "Top VC Blogs (According to Google Reader)." I was very pleased to find out that I came in at number three, sandwiched between Fred Wilson and Brad Feld. But I have to admit, the ranking makes me feel a little guilty. Not because I don't think there's good content on VentureBlog (after six years of blogging, there must be some good stuff in there somewhere). But because I really don't blog enough. Every couple of weeks or so, something jumps out at me that demands a blog post. In stark contrast, Fred and Brad post all the time. I have huge respect for them for that. And not just because of the quantity, but because they post great quality stuff day in and day out. So my hat is off Fred and Brad, who are the rightful owners of the top two VC blog spots without any questions.

The challenges posed by trying to maintain an active blog are only further exacerbated by the incredible proliferation of "media channels" these days. I don't mean professional media channels. I mean user-controlled media channels. Blogs. Podcasts. Twitter updates. Facebook and LinkedIn status messages. YouTube channels. Etc. The list is daunting. Yet anyone who takes seriously the idea of communicating directly with his or her "customers" really can't ignore the opportunities posed by each and every one of these channels.

What's more, each of these media channels serves a different purpose. Podcasting can not replace blogging, which can not replace tweeting. A jogger isn't going to read my blog while taking a morning run, but may well listen to VentureCast. An entrepreneur trying to quickly get up to speed on the state of Venture Capital is not likely to listen through 30 hours of VentureCast, but could easily browse through VentureBlog for relevant content. And anyone foolish enough to care what I'm doing on a day to day basis will not likely find that out on VentureBlog or VentureCast, but could certainly subscribe to my Twitter feed and get the latest and "greatest."

The more I think about the relevance of each of these media channels, the more I realize that it is important for me to engage on each and every one of them. To that end, I have recently revived VentureCast -- now with my partner Howard Hartenbaum. We intend to record a new show about twice a month. The first two we've recorded are already available on iTunes, so check it out. It also means that I need to share more thoughts on entrepreneurship and Venture Capital on Twitter, which I will surely continue to do. And, of course, it means that I need to blog about the world of Venture Capital more frequently. If nothing else, this post is a good start.

Just yesterday I had breakfast with Rene Lacerte, the founder of PayCycle, and we discussed the power of great customer service. When Rene first pitched me on the idea of PayCycle, the service was not yet built. Nonetheless, he was already discussing how he would integrate the customer support experience into the overall service offering. He rightfully pointed out that every change you make to an online service will have implications for the customer support team -- whether it is training, navigation, speed to resolution, etc. So from its inception, PayCycle's product management and customer support went hand in hand. Rene is now building his second customer-focused service called Bill.com and it too has been built from the bottom up with customer support in mind.

As we ate breakfast yesterday, Rene and I had a long discussion about the fact that despite being called Software as a Service, very few SaaS organizations put any emphasis on the "service" piece. Sure, you could argue that the "service" in SaaS is all about delivery and not about customer support. But that would be a mistake. Service businesses live and die based upon the satisfaction of their customers. While it is conceivable that your software could be sufficiently foolproof that customer support is limited to receiving "thank you"s from your happy customers, so far no one has quite found that Holy Grail. Customer support remains a significant piece of all SaaS organizations and the more a company recognizes that going into building their service, the more likely they will succeed.

So what does that have to do with the Rosewood Hotel? I was reminded of the importance of customer service this morning as I experienced the Rosewood Hotel's stunning disregard for their customers. For those of you who have not yet been to the Rosewood Hotel (and I would not recommend that you go), it is the new "high-end" hotel that was just built on Sand Hill Road in Menlo Park. For those of us parked in VC-land here on Sand Hill Road, it was a welcomed new place for breakfasts and lunches and, in fact, I have eaten breakfast there 12 times in the little over a month that it has been open. But never again. (Warning: herein begins a rant -- a well-deserved rant, but a rant nonetheless.)

Three weeks ago, when parking for breakfast, I was surprised to see broken glass in one of the parking spaces. As I left breakfast, I pointed the glass out to a maintenance person driving his golf cart by. I assumed it would be cleaned up. Two weeks later, the glass had still not been picked up, so when the manager of the Madera restaurant came by to say hello to me (after all, I was there every other day), I pointed out to him that there was broken glass in the parking lot that had not been picked up despite the fact that I had pointed it out two weeks earlier. The restaurant manager apologized and assured me that it would be picked up. To my shock, it was not. Undaunted, I figured I'd give it a third try. Two days ago, on my way to an event in a conference room in the hotel, I asked to speak to the hotel manager. A nice young man named Daniel came to talk with me and I recounted my tale of woes. I explained to him that while the glass hadn't particularly inconvenience me, that I thought it didn't reflect well on his hotel and that he might want to take care of it. He assured me that it would be cleaned up by the next time I visited, which I told him would be two days later.

I must say I was surprised to see the glass still there two hours later when I got out of my meeting, but I figured I'd give him the benefit of the doubt and assumed that it would be picked up by my breakfast on Friday (today). I was wrong. To my horror, as I drove up to breakfast this morning, the glass was still there. Was I cut by the glass? No. Did I get a flat tire from the glass? No. So why do I care? Because I think that customer service matters. I think that if you care about your customers, you should do more than pretend to listen to them. So rather than park, I drove up to the front of the hotel and explained to them (amidst a fair amount of swearing) why it was that I would not be eating breakfast there any more. The same manager, Daniel, was there and fell on his sword, taking full responsibility for the incident. But as far as I am concerned, it is too little too late. Such blatant disregard for your customers maybe deserves a second chance. And, if you are feeing extremely generous, a third change (particularly when the restaurant is so convenient). But not a fourth chance. So I guess I'm heading back to Il Fornaio for breakfast.

Customer service matters. And it matters more than ever in this age of blogs, and Facebook and Twitter. If you search for PayCycle, you'll find a whole lot of happy customers. And if you search for Rosewood Hotel, I'm guessing you'll see a whole lot of dissatisfied customers. You'll certainly find me there.

Update: Shortly after I posted this rant about the Rosewood Hotel, I got a call from Managing Director of the hotel. Through the power of blogging, twitter and facebook, the Rosewood's MD had read my complaint moments after I had posted it and promptly called a staff meeting to address the situation. He then came over to my office to offer up his apologies for what had happened and his commitment to make customer service a priority of the hotel. While I wish it had not escalated to the point of needing such attention, I certainly appreciate that the hotel's MD took it seriously enough to come to my office and have the discussion.

A short time ago I wrote about my investment in Aardvark. As I said in that post, I believe that in many ways search is broken and getting worse. Not only are there voracious efforts at Search Engine Optimization (SEO) throughout the Web, but the scale of the Internet is monumental today and getting larger by leaps and bounds virtually every minute.

The massive scale of the Web not only creates huge challenges for search, it also cripples discovery. Gone are the good old days in which fortuity would lead to the unearthing of interesting new Websites. Remember when Web directors would lead you to great sites on the topic of your choice (you may not recall but, in the early days, "Yahoo" stood for "Yet Another Hierarchical Officious Oracle" and Srinija Srinivasan, Yahoo's chief of ontology, was one of the most powerful people on the Web). Better yet, remember the good old days of browsing libraries -- the Dewey Decimal System created the propensity for discovering new and interesting books as a result of their being shelved next to related categories -- while looking at one book, other books in its general vicinity would likely pique your interest.

That sort of accidental discovery was driven out of the Web a long time ago. The only sorts of chance Internet encounters most of us have these days are a result of mistyped URLs -- not exactly a recipe for exciting new discoveries. Thankfully, one company has made it their mission to bring back discovery to the Web. StumbleUpon delivers nearly half a billion recommendations per month. Those recommendations can be across broad categories (e.g., photography, video, etc.) or in very focused niches (e.g., electric violins, VC blogs, Alice in Wonderland, etc.). The StumbleUpon experience brings the unforeseen and unexpected back to your browser. I like to think of StumbleUpon as a discovery engine bringing fortuity back to the Web.

Enthralled by what StumbleUpon was doing, a couple years ago I began chatting with the founders about their business. The more I learned, the more excited I got about the prospects for assisted discovery at StumbleUpon. But before I had an opportunity to propose financing the company, it was purchased by Ebay.

Nonetheless, I've stayed in touch with Garrett and Geoff and continued to talk with them about the power of StumbleUpon. So when they began discussing the possibility of spinning StumbleUpon out of Ebay, I was grateful to have the conversation. The need for discovery on the web has not gone away since Ebay bought StumbleUpon. To the contrary, the problem has continued to grow more acute. And StumbleUpon continues to be the best solution to the problem. Over 7.5 Million registered members discover, categorize and review Web pages, making StumbleUpon the Internet's most powerful recommendation engine.

I am thrilled to join the original StumbleUpon team in spinning the company out of Ebay. Along with Garrett and Geoff, Ram Shriram is reinvesting in the company and going back on the board. The primary financial backers of the spinout will be August Capital and Accel Partners and Sameer Gandhi and I will go on the board as well. I look forward to working with Garrett, Geoff, Ram and Sameer to continuing to build StumbleUpon into a large and important piece of the Web's infrastructure.

As one of the leading analysts and Web Strategists in the social computing space, Jeremiah Owyang meets with a lot of companies. He has the luxury of talking with big companies and small companies, public companies and private companies, venture-backed startups and bootstrapped companies. He is constantly looking at what makes one company successful and another one less so. Not only is Jeremiah a really smart guy, but he has a ton of data to support the conclusions he draws both in his day job with Forrester and in his role as confidant and advisor to numerous startups.

Given all that, I was thrilled to read Jeremiah's post "Beyond the Money: Some VCs Provide Startups With A Competitive Edge." In his post, Jeremiah asserts that VCs (at least the better VCs) are good for more than just money. What are we good for? Jeremiah lists a number of categories: Thought Leadership, Strategic Guidance, Being Part of the Family (e.g., Keiretsu), Ancillary Services (marketing, recruiting, etc.), Umbrella Branding (e.g., "an August Capital company"), and Networking. I would probably add to this high level list Recruiting and Capital Raising, both of which VCs can be very helpful with. Jeremiah concludes that "What [VCs] do beyond the investment makes a different - I can see it."

Thank you, Jeremiah! While I recognize that my job as a Venture Capitalist is to invest other people's money and, if all goes well, turn it into more money, I have a hard time thinking of Venture Capital as a "financial services" job. It is certainly the case that the financial services aspect of the job isn't what gets VCs up in the morning. What gets us up in the morning is the prospect of working with really smart people to build new and exciting businesses. And Jeremiah does a great job of listing the fun parts of our job -- advising, connecting, recruiting, etc.

All too often I fear that VCs are thought of as fungible -- one VC's as good as the next. It is certainly true that our money is fungible -- a dollar from any other VC will buy as much as a dollar from August Capital. But the aggregate value of taking money from another VC will be vastly different from taking money from an August Capital. My partners and I work hard to deliver value to our entrepreneurs on all the fronts Jeremiah describes. And those efforts can have a big impact for a company. VCs don't build companies, entrepreneurs do. But good VCs can do a whole lot more than simply write a check.

It is a challenging fundraising environment out there for sure. And that is not just for startups. This economic crisis has far reaching-tentacles. As the public markets have declined, so too have the liquid portfolios of universities, endowments, foundations. And it is those institutions who are among the most significant investors in Venture Capital. As a result, VCs are finding it equally challenging to raise money of their own.

With that as a backdrop, we at August Capital went out to raise a new fund at the end of last year. And I believe that our experience mimicked that which startups are seeing in the market today. No matter how good your track record. No matter how good your progress to date. Fundraising is hard. Investors are swayed and distracted by external factors that may or may not have anything to do with your business or the likelihood of your success.

That said, just as the strongest startups today are managing to get funding (sometimes even in up rounds), so too are the strongest venture funds. The partners at August Capital have been in the venture business for as long as three decades and have consistently delivered positive returns to our investors in up markets and down. Just as we remain bullish about investing in great companies in these challenging times, our investors remain confident in our ability to make great investments in these challenging times.

As a result, my partners Dave Marquardt, John Johnston, Andy Rappaport, Vivek Mehra, Howard Hartenbaum and I have recently closed August Capital V, a $650 Million fund. We remain focused on early stage high tech startups throughout the technology landscape (software, hardware, chips, etc.). But we also believe that this economic environment will result in a number of larger opportunities -- spinouts, PIPEs, buyouts, etc. -- that will prove to be extremely attractive investments. Thus, we have the flexibility within our new fund to invest as much as several hundred million dollars in a single deal, should a sufficiently compelling opportunity become available. We look forward to investing on both ends of the company spectrum and now have significant resources to bet on the great companies we see, big and small alike.

We certainly consider ourselves very fortunate to have such steadfast support from our investors. And lucky to have the flexibility in our new fund to take full advantage of the opportunities that will arise out of these challenging times. As we said repeatedly during the fundraising process, we believe that an investment in August Capital is a bet on the future of human innovation, and we are very long on human innovation. We have already made four investments out of our new fund and look forward to continuing to invest in the great entrepreneurs we meet every day. We are certain that important new companies will be born during this economic downturn and we look forward to providing the funding they need to grow and prosper.