All of us at Foundry Group try hard to be substantive members of our community. We have all chosen to live in Boulder, Colorado and we share the belief that giving back to the community in which we live is an important part of supporting this goal. In addition, we strongly believe in the cliché of “putting our money where our mouths are.” As a result, we are proud to announce that we have recently become members of the Entrepreneurs Foundation of Colorado.

In early 2007, Brad was one of the founding members of the Entrepreneurs Foundation of Colorado (EFCO). EFCO was created to encourage the various constituencies of entrepreneurial companies in Colorado (including founders, employees, and investors) to incorporate philanthropy early in the creation of their companies and contribute to the long-term health and sustainability of our community. To date, eighteen entrepreneurial companies in Colorado have joined EFCO – Foundry Group makes nineteen.

The mechanics of EFCO are straightforward – companies contribute 1% of their post-Series A equity to EFCO. This is done in the form of a warrant that is only exercisable in a change of control so that there is no administrative overhead on the company. At the time of the grant, the company also allocates the future gift to a community foundation, a specific charity, or some combination. When the company has an exit event, the cash generated from this gift is distributed to the designated organizations.

The Entrepreneurs Foundation has chapters in eight other major cities around the country and one in Israel. To date there are approximately 700 member companies (representing over 20,000 employees) who have contributed over $15 million to support various charities. In Foundry Group’s case, we are contributing 1% of our carried interest (the functional equivalent of 1% of our equity) to the Community Trust Endowed Fund of the Community Foundation Serving Boulder County.

In addition to the financial contribution, EFCO serves to engage all employees of an EFCO Member Company in the process of philanthropy – to the extent that they want to. In August EFCO will have its first major Entrepreneurs Foundation of Colorado Members event where it will gather as many members and their families together for a half day to learn more about local philanthropy, engage in a specific family friendly project that benefits our community, and have some fun together.

We are proud of how quickly the Colorado entrepreneurial community has embraced the Entrepreneurs Foundation of Colorado. Given that many well known venture capital firms participate in the Entrepreneurs Foundation program on a national basis, we hope others follow our lead and up the ante by participating financially.

As part of our ongoing discussion of the investment themes we focus on at Foundry Group, it is time to discuss digital life. Certainly anyone who is reading this blog post is living a digital life, and among the partners at Foundry Group, we are all gadget-lovers, early adopters of software and online services, part-time IT support staff for our own home networks, and digital media creators, curators and consumers.

Our digital life theme evolved from our own experiences as early-adopter creators and users of digital media, as well as from time spent over the years evaluating dozens of investment opportunities that we categorized as digital home, digital living room or convergence companies. After sifting through the landscape of these digital home companies for several years, we came away with only one investment: Sling Media, makers of the Slingbox.

In fact, we began calling digital home an “anti-theme”, because it seemed to serve more as a filter for companies we knew we wouldn’t invest in, rather than ones we would. Our investment in Sling happened precisely because Sling was quite unique and unlike any of the other digital home companies we looked at over the years. After a great outcome with our Sling Media investment, we decided it was time to take what we learned and refine our thinking behind the digital home theme and recast and refine it into the theme we now call digital life.

So what it is different about what we are calling digital life vs. what we used to call digital home? Some of it is simply a matter of timing – when we first started looking at this area in the 2000/2001 time frame, PVRs were a relatively new concept, home network deployment and broadband penetration were just starting to accelerate and the iPod was only beginning to take over the digital music world, while the cost of processors and storage needed be halved several more times by the (thus far) relentless work of Moore’s Law.

Since then, we’ve seen a massive increase in computing power, huge growth in storage capacity (with estimates that the average household will use nearly four terabytes of space by 2010), deep penetration of broadband, a proliferation of devices capable of playing back digital media and a huge increase in the speeds of wireless LANs. So convergence is finally (sort of) here. All media and all devices have gone digital. Users want access anywhere, anytime. But managing the explosion of media assets, networks and devices remains difficult. Software and services that just work and make our lives easier in this realm are needed to help the average user cope.

Back in the day, there was also a tendency for digital home companies to either attempt to sell gadgets and set-top-boxes or provide a software layer to power said gadgets and STBs. However, both approaches met with challenges: either low-margins from attempting to sell hardware at a consumer price point or tremendously long sales cycles and shallow revenue ramps as a result of trying to sell software to the incumbents who provide devices in the home like Scientific Atlanta, Motorola, DirecTV, Sony, Phillips, D&M, etc — none of whom has a clue when it comes to delivering a good user experience via tight software/device integration. A third approach was to increase the lifetime value of a user by tying a device to a subscription service or revenues from ongoing purchases of content to feed the device (think TiVo and iPod).

When we invested in Sling, we had been looking at companies that fell into the above three basic buckets for several years. Sling had a refreshing approach – sell a gadget and make nice margins, without charging ongoing service fees — a good thing from our point of view since we think the consumer suffers from subscription fatigue. And Sling’s pioneering concept of place-shifting was an elegantly backwards way at looking at looking at the problem: instead of trying to get content off the PC and onto the living room TV and stereo, Sling decided to do the reverse and focus on getting the living room entertainment center onto the PC and smartphone, regardless of the user’s location.

Breaking into the living room continues to be a challenge even for the behemoths. Microsoft has had relatively little luck in this area with their Media Center PC, though clearly the horse they are riding into the living room now is the Xbox, with the folks at Sony and Nintendo also playing here with their respective consoles. Even Apple, the king of digital media devices, has only dipped their toe in the water with the Apple TV, which is clearly a first-gen (and tentative) step into the dangerous waters of the living room.

Our experience with Sling provided us with some guideposts as we refined our thinking around digital life: focusing exclusively on the living room as the center of the digital home was going to be extremely difficult for most startups given the power of the incumbents who control the devices that live there. And it is no picnic for the incumbents either, as mentioned previously.

Another big observation from our work with Sling is that the user experience has to be great from the moment the box is opened: unpacking the product, setting it up, installing the software and day-to-day use has to be brain-dead simple and a pleasure to use, or the thing won’t enjoy widespread adoption. And with the current state of the art in home networking technology, this is very difficult for any vendor to achieve.

Furthermore, in most cases, trying to build a device is a tough road to hoe for a startup, for the reasons mentioned previously. So within this somewhat broad definition of digital life, what are the kinds of things we are interested in at Foundry Group?

In general, we will be intrigued by software and services (and occasionally, but not very often, devices) which work well with the existing entertainment infrastructure in the home and which help a user cope with managing the complexity behind their growing mountain of digital media and menagerie of devices. These solutions should work wherever a user may be and allow them to consume, create and share the media which comprise their digital lives. Finally, these products must be extremely well designed and brain-dead simple to use. The usability bar for digital life products is very high — they should work automagically and be easy for technophobes to embrace, or their adoption will be permanently impaired.

In the Foundry Group portfolio, Memeo is currently the standards-bearer of the digital life theme. We’ve explained in detail in a previous post why we are excited about our investment in Memeo, but put briefly, Memeo deals with the rapidly-growing mountain of digital content each of us must manage by providing content-aware and multi-device capable continuous backup, data synchronization and sharing. These simple but powerful tools might have previously been considered professional grade or enterprise-class solutions, but just like terabyte NAS or real-time encoding and streaming of HD video, they are making their way downstream into the consumer market.

So if you’re building a company focused on improving our digital life, please let us know, we’d enjoy hearing from you. We love playing with new toys and thinking about what the next important company in this ecosystem might be. Worst case scenario, you’ll get some product feedback and perhaps a few new users.

In a time when many folks view Twitter, Facebook, and LinkedIn as the new darlings of the Internet, we still believe that email has been and will long continue to be one of the Internet’s few enduring killer apps.

Several of us at Foundry Group have been deeply involved with the email industry as insiders and investors at a number of email-related companies, including early email service providers (Email Publishing and MessageMedia), email hosting companies (Critical Path), email security companies (Postini), and email delivery assurance companies (Return Path). Email has been a successful theme in our historical investments over the past dozen years, and we believe it has an equally bright future.

So, perhaps we’re biased. Nonetheless, not many people would dispute the critical role that email plays in our daily lives.

Nowhere is that truer than within the enterprise. Knowledge workers (the cornerstone of the U.S. economy’s future) live and breathe email. Our email is where we start our workday, and it’s usually the last thing we look at before we leave the office. In between, whether we’re sitting at our desks or out of the office but still glued to our cell phones and wireless email, much of our day revolves around our inbox.

And yet, for all our dependency on email, email tools have evolved little since the day they left the mainframe world. Remember the early networked email systems? Microsoft Outlook 2007—the de facto enterprise email client—certainly has more bells and whistles than the first email clients such as cc:Mail, but the interface and, more importantly, its substantive capabilities really haven’t changed:

   Send. Receive. Read. Store.

The first email clients did all that when they were first introduced, and all email clients/servers created since have faithfully replicated that paradigm with little variation. The biggest “advance” since the advent of client-side email has been the integration of contact management and calendaring with email.

Why haven’t enterprise email solutions evolved? Certainly, the pervasiveness and the role of email have changed dramatically since then. The sheer volume of email that the typical knowledge worker deals with is well beyond what we could have imagined in the early days of email. And more than simple communications, the email infrastructure is now being used for more than just email—it’s a collaboration tool, a document exchange mechanism, and even a de facto file storage system (to many this is a huge problem in itself). Email is the core, and without doubt knowledge workers need a new generation of tools to manage it effectively and get the most out of it.

However, we believe the next generation of email is about more than individual productivity. The amount of explicit and implicit data, knowledge, and relationship information stored in a typical corporate email store is staggering. Take, for example, just the enterprise social graph data in Exchange. With the right analysis, one can determine not only who knows whom (within or outside of the enterprise), but also the length, depth, frequency and velocity of that communication and relationship. Indirect connections between multiple individuals (akin to what LinkedIn does) can be discovered but without requiring any explicit user data entry or behavior modification. The ability to piece all of this together—across an entire organization—is a very powerful concept.

Beyond the enterprise social graph, think of the implications for knowledge management if the enterprise could effectively tap into the email store (using tools such as content analysis and unstructured data management) to discern and expose expertise across its workforce. Past knowledge management approaches have often suffered because they depended on individual users to explicitly enter data or take actions beyond their normal day-to-day routine, with little immediate benefit to them. What if knowledge management was instead seamlessly driven by our existing behavior?

Unfortunately, the lack of innovation in enterprise email has left us with inadequate tools to manage the massive amount of information that resides in and passes through our inboxes. And, more importantly, it has locked some of the enterprise’s richest data just beyond our reach.

In contrast to enterprise email, mainstream Web applications and platforms have experienced hyper-evolution. Indexed search has existed on the Web since [1993]. Outlook/Exchange users, however, had to wait until 2007 for that native capability. (Never mind that this newly-added capability is slower and less useful than Lookout Software’s Outlook plug-in for indexed search, which Microsoft acquired and shelved in July 2004.)

Social networking sites like Facebook and MySpace have garnered popularity in good part because they recognize that the social graph is what matters. Companies such as Salesforce.com have thrived because they view themselves not just as an application but as a platform to facilitate the gathering, organization and integration of data across disparate sources and applications and because they recognize that data are more useful and actionable when freed rather than trapped.

Fortunately for all of us knowledge workers, there’s hope. Xobni’s approach to exposing the meta-data in Outlook is a good leap forward (albeit, only part of what we think is the solution). Clear Context is promising tools to help email users manage their inboxes more effectively. And even Microsoft, with its announcement that it will be opening its entire set of APIs for Exchange and Outlook 2007, is showing a glimmer that maybe they now understand that Exchange wants to be a platform, not an application.

With folks like Om Malik and Microsoft insider Don Dodge and mainstream media like the New York Times shining a spotlight on the email inbox as the next beach head for social networking, it’s inevitable in the consumer space. Similarly, in enterprise we think that the next generation of email is going to make today’s technology look as antiquated as the GNU Emacs that many of us email old-timers used for our first email interface. Let’s just hope it doesn’t take too long.

In a follow up to our Who We Are post, Ryan and I thought we would compare VC life in Boulder, CO to that of the Silicon Valley. In some ways it’s remarkably similar and in some ways wonderfully different.

For those of you who don’t know, Ryan and I met in 2000 while at the California offices of Mobius Venture Capital, became quick friends and even started a band or two. (Shameless Plug Alert: Our band Soul Patch has recently released a new album. Check out the web site and buy on CDBaby, iTunes and Amazon. Become a fan on Facebook!). When the concept of the Foundry Group was born, one thing that the five of us agreed on was the need for one (and only one) office.

It didn’t take us long to decide that both the Boulder and Foundry Group opportunities were what we wanted to pursue with our careers, so, after a combined 27 years in Northern California, we sold our homes in the Bay Area and moved to Boulder in mid 2006. We’ve now been here almost 2 years. What have we learned?

Boulder is an entrepreneurially vibrant community. We were both surprised and encouraged by the sheer amount of startup activity there is in Boulder. It’s not just a by-product of having several good universities nearby; rather it’s really part of the culture and fabric of the community. I’d compare this to Ann Arbor, MI, where I went to school. Many people compare Ann Arbor to Boulder (without the mountains). While I see plenty of similarities, Ann Arbor is missing the ingrained culture of entrepreneurship (and associated risk profile) although it may have similar engineering and management talent.

Boulder is a supportive community. There really is a sense of community here. While there is a ton of activity, I don’t know if we’ve ever been to place that is as supportive in each other’s efforts. Instead of competition, there is collaboration. Whether it’s the Boulder NewTech Meetup, the Boulder OpenCoffee Club, Boulder Software Club, or TechStars, there is a general sense of community and responsibility to help the entrepreneurial community grow. I can’t say that I ever felt that sense of responsibility and “giving back” in the Silicon Valley that I feel here.

Boulder makes nationwide travel much easier. As national investors, it’s much easier for us to travel anywhere in the US from a central location like Denver. We’ve even been able to take day trips to New York, an impossible feat from the Bay Area, at least without a private jet. While an East Coast day trip is not the most fun one can have, our families appreciate us being home at night. And getting back and forth to Los Angeles and San Francisco, where we travel most frequently, is a relatively painless and efficient experience.

Speaking of travel, both Ryan and I (coincidentally) live on the same block in a neighborhood a few blocks away from our office. Our “commute” to the office is infinitely easier than our prior commutes in the Bay Area. The time saved can be spent on work or play, but either way, it’s not spent in the car. (For those voyeurs among you, you can check out our neighborhood by going to Google Maps and clicking “Street View”.

Being in Boulder helps focus our West Coast activities. There is no doubt that the volume of startup activity in the Bay Area dwarfs that of Boulder, and we have often been asked if we are concerned that we are missing out on opportunities by not having an office in the Valley. On the contrary, we consider being outside of the (sometimes provincial) echo-chamber of Silicon Valley to be genuinely useful. After experiencing life as VCs in the Valley for several years, we experienced a very real “time tax”, which resulted from taking meetings with entrepreneurs and executives we knew we were unlikely to invest in, but we felt were ultimately necessary to participate in in order to maintain our relationships with friends and colleagues in the area. Not being in California every day means we can opt out of that process. With our new location in Boulder, we still have our great networks and deal flow in California, but we have removed the Sand Hill Road friction from our day-to-day lives. When we do go to California to look at deals, meet with entrepreneurs or attend board meetings, we are better focused at the matters at hand and tend to have higher quality meetings, since those meetings have passed the “is it worth hopping on an airplane to meet face to face?” test.

Boulder’s culture encourages a healthy work-life balance. Boulder has an incredible amount to offer with easy access to mountains, hiking trails and natural beauty. People actually have time and focus to concentrate on things outside of work. It’s definitely a slightly saner pace. It’s not that people don’t work hard – they do – but there is a certain amount of balance that isn’t completely explainable unless you live here. For us, it’s meant that the hours we do work are more efficient and our brains are sharper.

So is Boulder utopia? No, nothing is. Ryan and I will “forever” tease our partners who told us that winters were mild in Boulder. Upon our arrival, we had the “opportunity” to experience the worst winter “ever” in 2006-2007. We’re also being told this winter is “below average,” which means that we’ve clearly brought bad luck with us. Either that or we were sold a bill of goods. More on that next year, I suppose. Also, we both miss some of the culinary options of the Bay Area, but we’d be in the same situation if we lived anywhere else but New York or Los Angeles (with apologies to Chicago). Finally, we must mention that the Denver Airport has the worst parking facilities in the world. They are regularly full, making for some tense moments pre-departure.

But in general, Boulder is a great place to live, work, play and (in Ryan’s case) raise kids. We’ve embraced our new hometown, and we look forward to continuing our integration into the community, both from professional and personal standpoints.

Since the launch of the Foundry Group blog, we’ve written at length about our thematic investing style, some of the specific themes we are looking at (HCI, Glue and Implicit Web), our backgrounds and our view of how geography factors into our investment criteria. We have yet to write about any of the companies we’ve actually invested in thus far – something we plan to do regularly in this space.

Not all of our portfolio companies are ready for us to start making noise about them, which is hard for us since we are passionate about the entrepreneurs and companies we back. But for those companies that are publically launched and have announced our investment, it is high time we start talking about them. Over the next several weeks you can expect to see posts from us on each of the investments we’ve made so far (at least the ones we can talk about) – a trend we’ll continue as we add new companies to the portfolio.

Today’s post introduces Memeo, one of the handful of investments we made shortly after we closed our fund in November last year. I wrote in detail about our motivations behind investing in Memeo on my personal blog in January, so I’ll just provide a short summary here.

Since we’ve been busy talking about investment themes, it is worth mentioning that Memeo fits into a theme we call Digital Life (a theme that we haven’t blogged about yet, but one which we’ll talk more about in a future post) For the purpose of understanding our Memeo investment it’s enough to simply understand that the Digital Life theme encompasses technologies and products that include digital media, consumer electronics, so-called digital home applications and the software and services that help consumers deal with the ever-growing number of devices and technologies they must manage on a day-to-day basis. An example of a previous investment we made in the Digital Life theme is place-shifting pioneer Sling Media, makers of the Slingbox, who were acquired by EchoStar last year for $380m.

Memeo has built an intelligent media-management technology platform that is aware that different media types (photos, videos, audio, etc) need to be handled differently, that the number of devices (laptops, phones, cameras, networked media-players, etc) and destinations (web-drives, NAS storage, USB thumb drives, etc) are only going to increase over time, and that users will need increasingly sophisticated (yet easy to use) tools that will help them protect, manage, synchronize and share their media. The elegance of Memeo’s platform is that it recognizes that backup, data synchronization and sharing are all just different facets of the same thing: digital media management. This awareness has enabled Memeo to deliver a suite of products that are simple to use, intuitive and work “automagically”, something we look for when evaluating a new product or technology.

Memeo’s first product, memeoAutoBackup, is an award-winning real-time, continuous backup solution for both Windows and Mac OS. They’ve partnered with major hard drive vendors like Western Digital, Seagate and Buffalo, and are now bundled on the majority of hard drives shipped in North America. They then followed with a second product, memeoAutoSync, which keeps a user’s files and folders synced across multiple devices and destinations, and a third, memeo Internet Disk, allowing backup and sharing of files and photos to an internet-based drive. Finally, Memeo will soon be releasing a beta version of their next-generation product, memeoShare, which will enable simple sharing of files among multiple users, which will showcase the full power and flexibility of the Memeo platform.

Needless to say, we are extremely excited about our investment in Memeo, we are avid users of memeoAutoBackup and memeoAutoSync, and we can’t wait to get our hands on the beta version of memeoShare the moment it launches. So head on over to memeo.com and try their great software for yourself, we think you’ll be impressed with its simplicity and power.