Every venture capital firm starts with people. In our case, Foundry Group consists of four experienced venture capitalists – Brad Feld, Seth Levine, Ryan McIntyre, and Jason Mendelson – who have been working together for the past eight years. We all met through our work at Mobius Venture Capital. Following is the story of what we have done and how we found each other.

Brad started his career as an entrepreneur in 1987 by creating a very creatively named company, Feld Technologies, with a partner in Boston. Feld Technologies was funded with ten bucks and was acquired in 1993 by a public company called AmeriData Technologies. While at AmeriData, Brad started making angel investments and was a seed investor in successful companies such as NetGenesis (IPO), Critical Path (IPO), and Harmonix (acquired by MTV.) In 1995 Brad moved to Boulder, Colorado, and shortly thereafter connected with the guys at Softbank who were aggressively investing in the first wave of Internet-related companies. Brad worked as an affiliate of Softbank until 1997 when – with three other partners – he co-founded the firm that became Mobius Venture Capital.

In 2000, Ryan McIntyre joined the Mobius California office. Ryan was one of the co-founders of Excite in 1993 and was involved in the very beginning of the first iteration of Internet search. Ryan left Excite in 1999 about a year after the Excite@Home merger was announced.  While contemplating the next company to start, he ended up joining Mobius.

Shortly thereafter, Mobius recruited Jason Mendelson to join the firm as its general counsel. Jason started out life as a software consultant for Anderson Consulting, lost his mind, and decided to become a lawyer, joined Cooley’s California office, and found himself doing a lot of work for Mobius. Jason joined Mobius in 2000, took over all back office responsibility in 2004, and started making and managing investments at that time as well.

While Ryan and Jason both started in the VC business at the peak of the bubble (Ryan fondly describes this time period as “the point in the party where the kegs had run dry and the cops had just shown up”), Seth Levine joined Mobius on September 6, 2001. Brad met Seth through their close friend and colleague Mike Platt, a managing partner at Cooley’s Boulder office, demonstrating that lawyers can actually be useful for something (although we always liked Jason, even when he was a lawyer). Seth had just come off a stint running several divisions for FirstWorld Communications – a company that went public two days before the NASDAQ hit its peak in 2001.

As both entrepreneurs and investors, we have had vibrant and exciting careers, having worked actively to create companies through one of the most exciting times in recent history (1994 – 2000) and one of the most difficult times as well (2001 – 2003). While we have had both great success and dismal failure, we believe that the best years of our working careers are still ahead of us. As such, we have decided to embark on creating a new early-stage venture capital firm with the goal of creating many new important companies over the next 20 to 30 years.

One of the impetuses for the creation of Foundry Group and a fundamental tenet of our philosophy is our strong love of what we do. We believe that the great company creators of modern times deeply enjoyed their work and we – in the words of one of our wives – have found a special segment of the universe to live in where “our work is our play.” It may sound trite, but we really enjoy hanging out with each other and this personal dynamic makes the work even more fun.

Most entrepreneurs who have raised venture capital have heard the popular cliché: Venture capitalists only invest in their backyard. The venture press and popular media are full of interviews with venture capitalists who emphatically state they’ll only invest in companies that are within driving distance, live in the same area code/zip code, or belong to the same golf club.

While there are often plenty of reasons for us not to invest in a given startup, geography (or, more specifically, lack of physical proximity to us) generally isn’t one of them. As we’ve already discussed in a prior post, Foundry Group takes a thematic view of investing. If we then further layer a geographic filter on top of our thematic approach, the potential universe of investment opportunities shrinks dramatically—too dramatically, we think.

Our goal as thematic investors is to back the best entrepreneurs and companies within our themes, not just the ones with locations that are most convenient to us. All of us at Foundry Group have come to accept that travel is simply part of our work (even if our loved ones haven’t embraced our travel schedules so readily). Our location in Colorado certainly works to our advantage here—travel to most places in North America (we don’t invest outside of North America) is rarely an all-day commitment like it can be for an investor whose office is on one of the coasts.

Our geography-agnostic approach also signals one of our core beliefs: We believe it’s a common venture capital fallacy that an investor must be constantly present physically to “manage” a portfolio company. Foundry Group isn’t in the business of investing in entrepreneurs who need to be micromanaged or who need us camping out in their offices to make stuff happen. And we suspect that really great entrepreneurs don’t want their investors stopping by in person for daily updates any more than we do (all you entrepreneurs, tell us if we’re off base here…). Between well-timed, in-person board meetings and all the great technology we have at our fingertips, geography really isn’t a barrier to effective communication and collaboration between a company and its investors, and we think our experience bears this out.

Nonetheless, we’ll admit that there are advantages to investing “locally.” Whether it’s helping our portfolio companies recruit new hires or minimizing the brain damage of hiring lawyers, accountants or other service providers, we like to leverage our local knowledge as much as the next guy. More importantly, local knowledge can pay off in vetting the entrepreneurs we invest in. Simply put, no amount of due diligence can substitute for really knowing an entrepreneur over an extended period of time. Having an entrepreneur in our backyard improves the likelihood of that kind of knowledge. So, as previously discussed, there are times when we’ll invest outside of our themes; often we’ll do so because of our “local” knowledge of a terrific entrepreneur.

To be clear, however, we don’t view Colorado as our only “backyard.” Brad lived in Boston for a dozen years before moving to Colorado, and both Ryan and Jason each lived in Silicon Valley for 10+ years. We have numerous investments in pockets around the country, and we like to use those investments as springboards to build deeper relationships with other investors and entrepreneurs in those regions. As a result, we’re often able to get to know high quality entrepreneurs well before their fundraising process begins.

So if geography isn’t about avoiding travel or having physical access to manage an investment, when does geography become a filter for us? A company’s physical location becomes a concern for us when it limits that company’s future potential. Maybe it’s the lack of a local talent pool to recruit from as the company grows or being in a location that makes it really difficult to attract talent from outside the region. Or, it might be that a company is too removed from key customers or partners to efficiently scale the business. We want the companies we invest in to win, so if geography is likely to reduce a company’s odds of success, that’s when it becomes a concern for us.

In our continuing series discussing some of our investment themes, we’d like to introduce a topic that we’re calling “glue”. Glue is our term for the web infrastructure layer that facilitates the connections between web services and content companies. As this ecosystem becomes increasingly complex and as web sites and web based applications rely on more underlying services, this “glue” layer of the Internet is becoming more and more core to overall web infrastructure.

Commerce, content and relationships are increasingly moving online, enabled by user-generated content, social networking, distributed applications and the underlying commerce and advertising infrastructure that supports the economics of the new web.  As the variety and robustness of this content increases, the web has become a powerful platform – enabling light weight applications to be easily delivered to a variety of different endpoint locations. Not only are web sites more robust and interactive than in the early days of the web, but sites on the Internet now collect content from disparate repositories (other web services, multiple advertising platforms, various widgets, RSS feeds, etc.) before delivering them in one unified view to their end users.

In many ways the web is paralleling changes that took place in the enterprise environment during the 90’s when once disparate systems were stitched together through what was termed enterprise application integration (“EAI” for those old school software folks in the audience) The result of these efforts was the freeing of data from traditional corporate IT silos for use in a variety of enterprise applications. This enabled an explosion of applications that could now more easily access corporate information and share that information with other services. The programming required to create these overlay applications became much simpler and the result was that application development could be accomplished much more easily and with less specialized resources. Past investments by Foundry Group partners that took advantage of this enterprise trend include Dante Group (acquired by WEBM), DataPower (acquired by IBM) and Cyanea (also acquired by IBM).

We believe that enabling web technologies are going through a similar development cycle as enterprise application integration technology did 10+ years ago. Companies are creating tools, applications and platforms to enable more productive and automated uses of resources that have become ubiquitous parts of the online ecosystem. We think about these enabling technologies as the glue that will increasingly hold together that ecosystem.

Many of our initial blog posts have focused on the themes that we use at Foundry to guide our evaluation of companies and technologies for potential investment. Ryan has written at length on our views of Human Computer Interaction and The Implicit Web and Jason has provided an overall backdrop to how we think about themes. We believe that the trend described above is both broad and enduring and we’ve been working in the last year to develop a theme that encompasses our thinking in this area. We’re also working with Eric Norlin on a conference (also called “Glue” – see the conference site at www.gluecon.com and Eric’s Glue blog at www.gluecon.com/blog) that will bring together thought leaders in the area of Internet infrastructure to further explore and develop these ideas.

We’ve also made two investments that fit into the Glue theme. Both are in development stage and we’re not talking about them much (although one was reported on TechCrunch – a new business that we’re working on with Eric Marcoullier). As these businesses further develop and as we make additional investments in this area, you’ll hear us talk more about our Glue theme and our evolving thesis around it.

Now that we’ve blogged about our thematic investing approach at Foundry Group, we thought we’d spend some time explaining some of the themes we are excited about. Yesterday we wrote about our interest in next-generation human-computer-interaction applications and technologies, and today we are going to talk about another one of our active themes.

One of the areas we are deeply interested in is what we (and many others) call the implicit web. While it may be imperfect as an umbrella term, it is easier for us to say (and still respect ourselves) than something like Web 3.0, which we sincerely hope does not ever enjoy the ubiquity (and subsequent meaninglessness) that the Web 2.0 moniker attained.

As often happens, our interest in the implicit web evolved out of another, earlier theme we’d been working on, RSS, which led to our prior investments in FeedBurner (now part of Google), NewsGator and Technorati. As we explored the world of RSS, we began blogging and subscribing to hundreds of blogs and mainstream-media news feeds. When we added this new deluge of content to the information onslaught we were already experiencing from email and other information sources, it quickly became apparent to us that the computing tools we used every day would need to evolve to help us cope with the familiar (yet ever increasing) problem of information overload. Around the same time we added feed-reading to our growing list of required daily activities, we were also beginning to spend time maintaining our (stove-piped) social networks in LinkedIn, Facebook and elsewhere.

While there is huge value to be gained through the judicious use of these new tools and technologies, the overhead required to manage them can be onerous. We could all gain even more leverage from these new technologies if our computing environment had even the most basic understanding of how the people, places, things and actions in these different tools were related to one another.

We think of the technologies that fall under the implicit web theme as a next-generation set of applications, tools and infrastructure that stitch together a long list of interrelated and overlapping ideas: the academic and theoretical ideas behind the Semantic Web, the utility of social networks and social media, crowd sourcing/wisdom-of-crowds, folksonomy, user attention data, advanced search and content analysis tools, lifestream analysis and numerous others.

When combined, these technologies offer the promise of a more unified computing environment that spans the applications where a user consumes and creates information (email clients, web browsers, RSS readers, etc) and is aware of the user’s preferences, interests and interpersonal relationships without requiring a ton of heavy lifting on the user’s part to get useful work done.

Naturally, there are many possible embodiments and applications of these ideas. For example, consider messaging and social networks — why do we have to explicitly program multiple sites with our social network data again and again? Wouldn’t an analysis of a user’s actual messaging traffic across twitter and their various IM and email accounts provide a better, more empirical view of their true social network than the one that was explicitly input into LinkedIn that may be more aspirational than actual?

As another example, suppose a user reads every last word of Brad’s posts about technology and entrepreneurship, but always skips over his posts about the show 24 and running marathons. And suppose that same user not only reads all of Fred Wilson’s posts about venture capital but also takes the time to read each of his posts about music and always downloads the mp3s that Fred posts to his blog. Perhaps our compute infrastructure (which includes all the web apps and client apps and computers and devices a person uses) should help the aforementioned user by placing Brad’s technology and entrepreneurship posts and Fred’s VC and music posts at the top of his to-do list, put Brad’s running and TV posts at the bottom of the list, and download Fred’s recommended songs while also suggesting additional related bands and noting upcoming nearby performances of those musicians.

Tools and applications like this are certainly possible today — some aspects may be fiendishly difficult to implement, while others “simply” require a novel combination of tools and a UI that will appear obvious in hindsight after they have spurred mass adoption.

While much of this may sound theoretical, we have already put our money where our mouths (brains?) are. In our portfolio, Lijit is our initial investment in the implicit web theme. Lijit produces search tools and statistics for bloggers and publishers that provide incredibly rich and highly targeted search results based not only on the content that appears on a blogger or publisher’s local site, but also extends out to the broader network of content related to the publisher — it searches their photos and tags on sites like del.icio.us and flickr, and also searches content found and produced by people who appear in that publisher’s blogroll and social network. In effect, Lijit produces a custom search engine that includes the universe of content related to a specific person or publisher, providing highly relevant results by taking a person-centric and relationship-aware view of the web.

Of course, we are actively looking for other investment opportunities that fit within this theme, so if you are working on something interesting, we’d love to hear about it.

As we mentioned in the previous post, at Foundry Group we structure much of our investment analysis and thinking around themes. For us, a “thematic investment approach” is something broader than investing in market sectors, rather we look at the world in a horizontal fashion. A theme is applicable across consumer and enterprise customers, and is usually based on an underlying technology, protocol or broad market trend that we believe will drive investment opportunities for a five to ten year period as the familiar adoption/disruption dynamics play themselves out over time.

We tend to have half a dozen or so active themes at any given time that we will talk about on this blog. Some past (and current) examples of themes we’ve been active in include email, IT management, RSS and Implicit Web. One relatively new one that has been coalescing for us over the past couple years is the accelerating evolution of human computer interaction, or HCI.

Brad and I have written about HCI on our individual blogs numerous times in the past, and Brad already has a successful personal investment in the HCI theme under his belt via Harmonix Music Systems, the creators of the wildly popular Guitar Hero and Rock Band games. Additionally, in our Mobius VC portfolio, we have an investment in the world’s first single-chip digital silicon microphone company, called Akustica, which also fits into the HCI theme in the sense that their microphones help endow the computing environment with the sense of sound.

The basic premise underlying our enthusiasm for the HCI theme is that the world of computing is ripe for a series of major shifts in user-interface paradigms. We’ve all been living in a keyboard-mouse-windows-GUI world for the last twenty years, and this paradigm has been responsible for the massive success and near-ubiquity of the personal computer.

But with the proliferation of new devices with substantial compute power (the computational might of an iPhone would once have categorized it as a super computer) and new “senses” supplied by accelerometers, touch-screens, digital microphones, cameras, we now encounter computing devices in our cars, on our nightstands, in our pockets, in our stereo cabinet, in our conference rooms and factories, at kiosks and screens in the mall and many other places. In fact, a 2003 study suggests that the average American encounters at least 70 microprocessors in the course of a day.

While we consider billions of PCs and mobile phones to represent ubiquity, true ubiquity occurs when something is so commonplace, it fades into invisibility in the background. Some have dubbed this idea pervasive computing.

In an era of pervasive computing, it is very often undesirable or impossible to interact with a nearby computing device via a standard windows-based interface. (Especially if the device we are interacting with lacks a keyboard, mouse or display!). Thus we must be able to command our computers by touching their screens, simply gesturing to them, looking at them, speaking with them, or to get really sci-fi, by thinking at them. Freed from the confines of pointing and clicking on a two-dimensional screen to control our machines, we will see entirely new applications and capabilities emerge.

We can see current-day examples of these next-generation interface ideas embodied in the iPhone, Microsoft Surface Computing, the Nintendo Wii, GuitarHero/RockBand and many others. Notice that these innovations are applicable across numerous domains: mobile phones, enterprise computing and gaming. Any time we see an area with broad horizontal applications like this that runs across consumer and enterprise, we get excited because we smell “theme”. Furthermore, these innovations might live in software (applications or infrastructure), devices, services or combinations of any of these.

We’ve already made one investment in the HCI theme in a company called Oblong, which is commercializing the interface ideas seen in the movie Minority Report. The capabilities and application potential of Oblong’s platform are mind-blowing, and we will talk more about Oblong as they begin in the coming weeks and months to explain more fully to the outside world what they are up to.

In the meantime, consider this our announcement to the world that we’ve got the HCI religion and would love to hear from anyone else who does too…