Posts from June 2007

Neighborhood News

I just added the outside.in neighborhood news widget to this blog. It’s on the right sidebar above my books widget. It’s focused on news about the Union Square/Flatiron district. It looks like this:

 

If you are a placeblogger and want to show headlines from around the web about the place you live and/or write about, get the widget here.

It’s cool that the Gotham Gal gets a link in there for her Sapa post.

iLash

The iPhone backlash begins, predictably, on the day after the product finally shipped. There’s no way the product will ever live up to its hype. I am not saying it won’t be a breakthrough product which many users will love. But the "jesus phone" surely won’t cure cancer.

The first salvo in the iLash comes from Joe Nocera in a column on the front page of today’s New York Times business section. I’d link to it but it’s behind a wall that makes linking worthless. Arghhhhh.

I have half a mind to reprint the whole column here just to stick it to the idiots at the NY Times who continue to reject common sense and good business judgment and who won’t play nice on the web. But I can’t even get into Times Select without getting a free trial which I refuse to do on principal. So no cut and paste here.

Anyway, enough of that. Joe explains that the iPhone doesnt’ have a removable battery and that after 300 to 400 charges, the battery will stop charging and you’ll have to send your phone (that’s right your phone) back to Apple for a replacement. He tried and tried to get an answer from Apple about how they plan to handle this issue, but could not.

You would think that the black eye that Apple got over the iPod battery issues would have knocked some sense into them. But Apple is like the NY TImes. Stubborn and consumer unfriendly.

I expect that bad behavior like this will bring more grass roots "open source" mentality to the consumer electronics business. I sure hope we see the open source hardware movement gaining momentum from nutty stuff like this battery business from Apple. I am betting on it, frankly.

Open To Buy

Facebook_apps
The Gotham Gal started out her career in the retailing business and spent time as a buyer at Macy’s. The way that job worked was she’d get her "open to buy" report and then go into the market and buy. I always loved that term. It meant it was time to go shopping.

Facebook went open roughly a month ago. And now VCs, web companies, and media companies have opened their pocket books and are going shopping for Facebook apps. It’s actually a bit of a feeding frenzy if the reports I am hearing are to be believed.

Yesterday was Facebook day in the office. We started off with an awesome meeting with the Jarvis father son duo. Not sure who I learned more from. But if you want a Facebook app, you can hire Jake. The first two Facebook apps I installed (last.fm and flickr) were built by Jake so I can vouch for the work he does.

Then I spent time with a good friend who I don’t think wants to be outed on this blog who is building a very interesting facebook oriented business. And he’s in the market for apps. He’s open to buy.

And at the end of the day, I spent time with an entrepreneur who made a smart buy early in the Facebook craze and now is sitting on a bunch of apps and is now raising money to build a business on top of that foundation. He’s done his buying for now.

Then I came home to see back to back posts in Valleywag pissing on the Facebook app craze. Phew, someone is throwing some cold water on this fire. Gotta love Nick Denton. Always the contrarian.

So let’s look at some of the facts I learned yesterday.

Facebook apps sell for the number of users who have installed the app. The price was $0.10 per user last week. Now its $0.25 per user.

The CPMs that Facebook apps are getting are what you’d expect. Less than $1.

The churn rate is high. Some apps are down as much as 60% in the past week. 20% weekly churn is pretty typical.

You can build a Facebook app in an afternoon. Maybe the more complicated ones could take a man week. So let’s just say the cost of building a Facebook app isn’t that high. Certainly less than $10,000.

There are a total of 1,131 apps.  Of the last 500 to be approved, only 5 have over 100,000 members, and none have over 200,000.
This fact came word for word from the Hypebusting post on Valleywag.

So what do we have here?

A marketplace where the early entrants were able to amass a large user base quickly but where new entrants are having a much harder time. So the early birds have something that everyone else covets. And they are now monetizing it. That makes senses.

But what’s the right price to pay for a popular Facebook app? Let’s say you have a million users. Let’s say the average user visits the app page once a day. [I have no idea if that's a good assumption. Some help here please]. That’s 1 million PVs per day, 30 million per month. Let’s say that there’s a single banner at the bottom of the Facebook app page, which is what I’ve typically seen. So at $1 cpm, we are looking at a $30,000 per month revenue stream for a one million user app. That’s $360k/year. But that is with no churn. It seems like the lifetime of a typical Facebook user is less than a year. Maybe less than six months.

So these prices of $0.10 per user to $0.25 per user make some sense to me. It’s not entirely nutty. But the churn is concerning. And I really have no idea what the right assumption is on average user visits per day per app. And I bet it varies wildly from app to app.

Markets are fascinating. And this Facebook app market fascinates me. I don’t know if VCs should be participating in it. I don’t know if our companies should be participating in it. I don’t know if it’s a bubble or a bargain.

But you cannot ignore what is going on in Facebook. It’s a hyperactive development platform on the web in the middle of a community of 27 million (May comScore numbers) people. It’s like nothing I’ve ever seen before in my 20 years in the VC business and I think you have to get your head around it and soon.

To that end, Union Square Ventures is hosing a Facebook Developers Meetup next Monday, July 2nd. I’ll be there.

More Bandwidth

I don’t know about you, but I am sure feeling busy these days. There is so much going on in the sector we invest in, internet/web services, that its hard to stay abreast of everything. First and foremost we have to be available for our portfolio companies when they need our time and attention. And we need to be responsive to the new opportunities that are coming our way. On top of all that, we need to be thinking about and making sense of all the new things going on in our sector.

So we’ve taken an important step in adding some bandwidth at Union Square Ventures and have formalized a venture partner relationship with our good friend Albert Wenger. More details are on the Union Square Ventures weblog.

July 5th is Unlocked iDay

Tomorrow is iDay, in case you didn’t know. People will be lined up around the block at the Apple stores here in NYC to get their hands on an iPhone. I am not even sure I’ll get one, but if I do, it will be unlocked. I don’t care about visual voicemail. I’ve already got one better with Simulsays Beta (still buggy) running on my Blackberry.

What does interest me is an iPod with a killer browser. And I’ll run it on whatever carrier I want to run it on, which in my case is T-Mobile. Here’s what I need.

Unlocked_iphone

Here’s a couple places you can get unlocked iPhones on the web:

Apple iPhone iPod Unlocked GSM Phone – Popular Electronics

Buy Apple iPhone Black Unlocked GSM Cellular Phone, Apple Cell Phones

And here is where you’ll soon be able to get a software unlock.

iReviews

26iphone600
So I spent some time this morning reading the iReviews. Apple let Walt Mossberg, David Poque, Steven Levy and several other tech journalists have an iPod iPhone for the past couple weeks. Given all the iPod iPhone hype, I am surprised none of these journalists had stories of beating back the crowds during their two week preview. Ryan Block’s got a good rundown of the new facts that are coming out as a result of these test drives.

The most interesting comments came from Walt, who liked the keyboard:

The iPhone’s most controversial feature, the omission of a physical
keyboard in favor of a virtual keyboard on the screen, turned out in
our tests to be a nonissue, despite our deep initial skepticism. After
five days of use, Walt — who did most of the testing for this review
— was able to type on it as quickly and accurately as he could on the
Palm Treo he has used for years. This was partly because of smart
software that corrects typing errors on the fly.

But other facts like the lack of search and cut and paste indicate to me that this phone is still not business ready (thought it might be people ready).

I suppose I should get one to play around with it. If it’s easy enough to do, I’ll probably do it. But I won’t be one of the millions who will be lined up tomorrow/iDay to get one.

I am still in love with my Curve.

UPDATE: Sorry about calling the iPhone an iPod twice in this post. Must be a freudian slip of some kind. I wonder if there are people who will get an iPhone and only use it for music and browsing. I could be one of them. Maybe that was my subconscious working.

UPDATE: Dave Budde left a link to this in the comments. In this case, a video is way better than any other review I’ve seen. Well done NY Times.

Wilco In Brooklyn


  Wilco 6/26/07 
  Originally uploaded by muzikspy.

Wilco is one of my top ten bands based on any measure you want to use. Its been that way for the past six or seven years

When Jeff Tweedy comes to town, I go see him play. And he never lets me down

This week Wilco played two shows in NYC, last night at The Hammerstein in Manhattan and tonight at The Warsaw In Brooklyn

Even since Jackson told me about eating perogies, drinking polish beer, and listening to Paul Westerberg, I’ve wanted to see a show at The Warsaw

Tonight it happened courtesy of Basquali, the owner of a hipster cafe in fort greene brooklyn called Smooch. You see the Warsaw show sold out in about five nanoseconds. You don’t get to see Wilco very often in a venue that small

But thankfully Basquali makes the best coffee in Brooklyn and as a result he knows a few people. One of whom got him and a few friends into the show. I was fortunate to be one of his friends

The current Wilco lineup is the best yet. Nels Cline and Glen Kotche in particular are master musicians

The version of Ashes of American Flags that Wilco does these days is vastly superior to any other simply because Nels Cline lays down a mesmerizing solo, ala Jerry Garcia, at the end

But as strong as the band is, I couldn’t help but think that Tweedy may never write songs like the ones he wrote on Summerteeth and Yankee Hotel Foxtrot.

Writing songs that intense and personal could kill a man and maybe it almost did. Jeff’s a happier person now and his songs reflect it. I enjoy the new stuff for sure, but it doesn’t give me the chills like the those two amazing records, the ones his label hated, btw

Wilco played something like eight encores tonight and ended with Woody Guthrie’s Hoodoo Voodoo and The Replacement’s (actually Wilco’s) Outtasite (Outta Mind)

They rocked and I loved it. Like every other Wilco show I’ve been too

I’ve been seeing a lot of 20 something bands lately and often am among the oldest people in the room. It was nice to be back among my generation. The Wilco generation that still loves rock and roll.

Misunderstood – Wilco – From Kicking Television They opened with this – a gift to all of us who still love rock and roll

Thanks to muzicspy for the photo that decorates this post. That was taken last night at the show, a bit closer to the front than where I was. Here’s the whole photoset from the show.