It’s Monday, time for another lesson I’ve learned in the venture capital business. Today I will tell a story that I love telling. It has some of my favorite people in it.

Back in 2004, early in my blogging career, I heard about a service that had just launched called Feedburner. It provided a number of useful services for a blog’s RSS feed. So I went and signed up and AVC became one of the first users of the service. I immediately liked the service and the idea.

I’ve just read Bill Barnett’s article on Winning as a self-fulfilling prophecy which argues that optimists’ irrational belief in their chances of success makes them to try longer and harder to get there and makes them better motivators and leaders of teams. They are therefore more likely to succeed than people who are more even headed. He cites Steve Jobs as an example:

“Steve Jobs was said to have been surrounded by a “reality distortion field,” in that he would believe in possibilities even when others saw them as unthinkable. Of course, once Steve believed, then others would too – making his vision more likely to come true.”

The AlwaysOn X Fund portfolio ended the week up 3.0%, the NASDAQ advanced 0.8%, and the S&P 500 was up 2.1%. Year to date, the AO X Fund is up 18.7%, the NASDAQ is up 15.9%, and the S&P 500 is up 16.9%.

Last Monday, we sold our positions in Web.com and Qihoo 360, as both stocks started to be expensive, in our opinion, given their growth rates and visibility. We made >50% gains on both stocks and will keep them on our watchlist. Additionally, we also sold our small position in Yelp, as we found better companies we want to own at their given valuations. We are keeping Yelp on the watchlist as well.

Welcome to the fourth annual OnDemand! This year, Hewlett Packard is streaming the event live from its Executive Briefing Center in Palo Alto, CA. You can view our webcast coverage of the OnDemand main stage during our exciting OnDemand event beginning today at 12:00pm (PDT).

This year, we’re welcoming a group of exciting cloud, on-demand, and SaaS CEOs, founder, entrepreneurs, and venture captialists to speak at the event, including an exclusive fireside chat with Dylan Smith, the Co-Founder and Chief Financial Officer of the OnDemand Company of the Year, Box. This year’s event highlights vigorous emerging and mature companies that are going beyond creating new business opportunities. The cloud infrastructure, SaaS, and on-demand marketplace is reinventing computing—how it’s powered, where data is stored, and where and when we access it.

At this year’s NVCA meeting, my partner Jason Mendelson (who was the chair of the event) interviewed Dick Costolo, the CEO of Twitter. Dick is an awesome CEO, awesome human, and awesome interviewee. Among other things, he’s hilarious, and PandoDaily wrote a fun summary of the interview in their post What CEOs could learn from comedians.

Dick had many great one liners that fit in 140 characters as you’d expect from someone who is both the CEO of Twitter and was once a standup comedian. But one really stuck in my mind.

SnapChat sends shivers up the spine of traditional media. It’s a service that deletes texts and pictures once they’re viewed.

Traditionally, I use new tools to close deals. While I did not form the innovation “booty call,” I do mentor how to close a deal via voicemail.

Yes. I’ll use both ends of the tech innovation spectrum.

As Amazon (AMZN) continues with its amazing public cloud momentum, Palo Alto-based VMware (VMW) has stepped up its efforts to educate the industry about an even more powerful and disruptive form of cloud computing, called hybrid cloud. According to VMware, hybrid cloud promises to be an upcoming disruption in how applications and services are delivered by enterprises of all sizes.

I told this story in the comments to saturday’s video post, but since not everyone reads the comments and I want this to make it into MBA Mondays, I figured I would turn it into a case study.

In the early days of Tumblr, I used to bug David Karp, the founder and CEO of the Company, about comments. Though I had hacked my tumblog with Disqus, I wanted to be able to comment on other tumblogs and the vast majority of them had no comments because Tumblr did not support them natively. I was fairly persistent in my argument.

In size, scale and commercial results China’s Torch Program from MOST (the Ministry of Science and Technology) is the most successful entrepreneurial program in the world. Of all the Chinese government programs, the Torch Program is the one program that kick-started Chinese high-tech innovation and startups.

In the last decade Torch managed to break free of China’s state central planning bureaucracies. Of all the Chinese innovation programs, Torch is the one that was run like a startup – iterating and pivoting as it learned and discovered. This enabled Torch to evolve with China’s rapidly global economy.

The AlwaysOn X Fund portfolio ended the week up 4.4%, the NASDAQ advanced 1.7%, and the S&P 500 was up 1.2%. Year to date, the AO X Fund is up 15.3%, the NASDAQ is up 13.8%, and the S&P 500 is up 14.5%.

Tesla reported impressive Q1 results, with its first ever profit of $0.12 EPS. It beat its previous guidance significantly by delivering 4,900 cars vs. the 4,000 initially expected. In addition, the company raised its guidance for the full year from 20,000 car deliveries to 21,000.

When I was new at Venture Capital I was trying to figure out the business. It was a fun period for me because everything was new and I was curious.

What kind of deals should I be doing? What stage? What price? With which other investors? Should I focus on geographies or industries? Should I trust my instincts for founders and products or should I be more focused on the market size or business plan?

One of the major calibration pieces for me was where to find deal flow. As a VC you want to feel like you have “proprietary sources” of deal flow. Otherwise you’re a stock picker, which in this business isn’t a good thing.

AlwaysOn is proud to announce that Matthew Prince, co-founder and CEO of CloudFlare, Inc, will present a fireside chat hosted by David Chen, Managing Director at Morgan Stanley, at OnDemand May 21st. CloudFlare protects websites from online threats while speeding up loading time. CloudFlare is easy to use, and their core service is free. CloudFlare was founded in 2009 and is backed by New Enterprise Associates, Venrock, and Pelion Venture Partners.