I think what we are learning from the rise of social Q&A sites like Formspring is that this is a distinct category of social behavior. Just like Foursquare shows us that the "checkin" is its own vertical category. And part of what it means to be a distinct vertical is that people prefer a distinct experience or channel for this activity. I expect over time we will see other examples of social verticals. And, having missed Foursquare but gotten into Formspring, I hope to back some more of them!

Ask me anything

We are sad to see the inimitable Kamal Ravikant move up and out of Dogpatch SF. But Kamal’s farewell email to his Dogpatch comrades does such a nice job of capturing the spirit we aspire to foster that I asked his permission to reprint the email here (please forgive the gratuitous praise to me and Ryan):

Thank you Dogpatch

Most of you know me – the guy with the crazy hair, sitting by the window. I’ve been at Pier 38 pre-dogpatch (yup, there was such a time). It was just myself, the Etherpad team, Jambool, the Mr. Tweet trio (Ming et al), and Socialmedia. I loved working here, told people that I had the coolest office in the world. So cool, that I moved and sold my car so I could walk to work and spend more time at the office. Socialmedia expanded, then contracted. The Etherpad team ran away to join Google. Jambool expanded. Ming became a permanent fixture at the office, here no matter how early you got in or how late you left – there was Ming, working, hunched over his laptop, eating a bowl of…..something.

Then, the office got infinitely cooler. Ryan and Mike from Polaris started bringing in small teams of highly-talented and motivated folks. I loved it. This place became my personal think tank. Have a question about online payments? Just walk downstairs and talk to the guy who built Amazon payments. Issues with building out your team – anyone here can empathize and will share hard earned advice. Startups came and went and I made close friends. Our team grew, contracted, and is growing again.

And now, with growth, it’s time to move to the next phase. We’re leaving Dogpatch. I’m doubling my walking commute from 4 to 7 minutes – that’ll be tough, but more than anything, I will miss this space and energy of such talented and driven people.

I’ve been in the Valley since the tail end of the first .com boom. Been part of rather interesting things, but this is my favorite experience so far. Ryan and Mike are some of the best Venture guys you could ever choose to work with. Mike genuinely cares about his companies and founders. You should hear the pride in his voice when he describes them. And Ryan is a former entrepreneur, as solid as they come.

I want to express my gratitude to them for allowing our team to become a part of this community and highly recommend that you involve them in whatever you do, whether it’s at Dogpatch or after. I know we will.

If I can be of help to any of you in the future, please don’t hesitate to contact me.

Thanks,

Kamal

Entrepreneurs are often curious to know what a VCs style is for working with his/her portfolio companies. And, we usually respond with a bunch of bland generalizations about “collaboration,” “partnering,” “value-add,” blah, blah, blah.

The reality is, for me at least, that I end up having different styles with different entrepreneurs. My favorite dynamic is where the entrepreneur sees me as an extension of their team; while not likely (or able) to participate in the same capacity as team members, nonetheless welcomed inside the tent either to offer perspectives or sometimes just to know the company, and its challenges and opportunities, better.

Three of my companies have put their products where their mouths are, inviting me to join the realtime group communication tool they use internally. Automattic and Thing Labs using their own technology (P2 and Picnic, respectively), and The Start Project using Socialtext. And each of these has been a great opportunity for me to get closer to the daily lives of these startups, which I am sure will make me a more effective board member/investor/advisor.

So, if you are an entrepreneur, and have some sort of internal messaging system for your company, I’d encourage you to consider using these systems to bring your investors and advisors inside your tent.

Yesterday Formspring announced its $2.5m Series A. Led by Baseline Ventures and FreeStyle Capital, the round included a who’s who of other angel investors including Ron Conway’s SV Angels, Maples Investments, Chris Sacca’s Lowercase Capital, Kevin Rose, Travis Kalanick, Dave Morin and Scott Dorsey.

And Polaris.

Though a departure from the typical VC model (we were a relatively small “follower” in the round, taking a very small ownership position in the company and not taking a board seat), we are thrilled to be involved with Formspring.

Formspring is a “social Q & A site” that makes it very simple for people to invite their friends/followers to ask them questions. Just as the “check-in” is becoming a particular form of social network activity, so too is the “social q &a.” As sometimes happens in the consumer web, formspring seems to be simply addressing a strong consumer impulse.

Since launching last Thanksgiving, Formspring has had a meteoric rise to 50M monthly uniques and is seeing a torrent of activity on Twitter and Facebook. After writing this last sentence, I did a search for “Formspring” on Twitter, and saw 500 results generated in under a minute. Yes, 500!

What is particularly exciting to my partners and me is that Formspring directly addresses a problem we have been thinking about for a couple years now: helping people come up with things to publish or post. This was the original thesis behind our seed investment in Plinky, but after several months founder Jason Shellen pivoted and has since been focused on Brizzly. Enter Formspring.

If you are running out of things to post about, don’t sweat it — sign up for Formspring and let your audience do the work by asking you questions. Leave your creative juices on the couch, sit back, and answer!

Inside Facebook has very interesting coverage of Levi’s Facebook advertising strategy around its “Fader Fort” event at SXSW. One of the takeaways: there are benefits to doing Facebook advertising in short but intense bursts.

Typically, display ad campaigns are designed to maximize reach and frequency. But advertising around a social graph introduces a new dynamic. If a number of your friends have recently interacted with a brand’s FB app, those actions are more likely to show up in your news feed, which will drive more viral growth of the app. So, it makes sense to deeply penetrate particular social graphs in a short period of time as opposed to hitting a broader demographic with consistency over time.

Brands like Levi’s are getting increasingly sophisticated in understanding social graph dynamics and developing new advertising strategies for the new media known as Facebook, and it is worth watching them closely to learn the latest tricks of the trade.

The meteoric rise and billion dollar valuation of Zynga has made social games the hot new thing. So we should all be rushing to fund the next Zynga, right?

Wrong.

The biggest deal about Zynga’s runaway success, for me at least, isn’t that a social games company can be a huge business. It’s that game mechancis are now cool. Seems like every Consumer Internet entrepreneur I talk to these days is applying game mechanics to make apps outside the game category more engaging and more viral. And I think this is a great thing. Game mechanics are designed to help people have a fun and engaging experience; what consumer app doesn’t aim to offer a fun and engaging experience?

Great entrepreneurs tend to be great salesmen. They have vision and passion and are able to communicate it.

While this is a great asset most of the time, on occasion entrepreneurs forget that they need to check their sales pitch at the door when it comes to working with their board and investors. Sometimes consciously, often times unconsciously, entrepreneurs have been know to “pitch” their boards instead of informing and collaborating with them. This is a big mistake, for at least two reasons.

The first reason is that the entrepreneur is isolating him/herself on an island when it comes to dealing with challenges and problems. While the prospect of sharing bad news with investors can be unpleasant, the reality is that, whether we like to admit it or not, VCs hear bad news all the time — it is part of the startup process and part of the VC job description. Any VC worth his or her salt should respond to bad news, provided it is shared in a timely fashion, by helping the entrepreneur figure out the best way to respond rather than dwelling on what went wrong. In my experience, entrepreneurs feel relieved to have company in their problem set as opposed to feeling left all alone to deal with it.

A second reason why entrepreneurs should lose the habit of pitching their investors is that it will quickly lead to losing their credibility, which is toxic to a constructive entrepreneur/VC partnership. Early stage ventures are filled with ambiguity. Entrepreneurs and their investors need to make quick decisions based on information that is far from complete. This necessitates relying to a very substantial degree on the entrepreneurs’ interpretation of the situation and prospects. When an entrepreneur loses credibility and the board’s trust that he is interpreting and communicating things in a reasonably accurate light, the result will be constant questioning of his/her judgment. Which is not a happy place for either the entrepreneur or the investor.

We all say this and hear this routinely: “money is cheap, you want an investor who is really going to add value.”

Yeah, sure, of course. But just how should you to expect your VC to “add value?”

There are lots of different examples from recruiting to making introductions to helping with strategy.

But I think an important question entrepreneurs should ask themselves, and ascertain of VCs they are considering working with, is what is their general attitude toward the role of a VC investor. In particular, there is a huge difference between investor-directors who consider it their job to give an entrepreneur instructions as opposed to those who view their role as helping entrepreneurs make good decisions. I just read a great post, called “Startup Therapy.” Here is an excerpt:

Therapists don’t tell you what to do. Rather, they ask probing questions that get you to discover for yourself what is true for you, your situation, and what you want. You’re smart. You’ll make good decisions.But you also get bogged down in daily minutiae and putting out fires, meanwhile missing the big picture.

That’s where this article comes in: To splash cold water on your face, forcing you to face reality and continue to defend or change the important choices inside your business.

I really liked this passage, because it made me think about what I’ve seen great board members do. They don’t tell you what to do, they ask great questions.

So next time you are picking which VC to work with, ask entrepreneurs who have worked with him/her whether he/she asked good, probing questions that “splashed cold water on your face,” or whether he/she told you what do to.