Posts from October 2007

Happy Halloween


  pumpkin lit 
  Originally uploaded by minipixel.

Here’s to a Happy Halloween for everyone.

In addition to being Halloween, today is the last day of the Blogger’s Challenge. It doesn’t look like I’ll get to $25,000 unless I top it off. Which I just might do. But I’ll wait until 5pm today to do that.

If you wanted to donate to Blogger’s Challenge, but have been putting it off, don’t wait any longer.

Disqus Officially Launches

Yesterday the comment system that I’ve been using since the late summer, Disqus, officially launched. They call it "public beta" but that’s just a way of saying there are still some imperfections in the service. It’s live and anyone can use it.

For those who have been using it on this blog, I have two things to ask of you.

1) please let us (me and disqus) know what you think of the "beta version" that is now running on this blog. please leave me a comment. Daniel is making a run at Jackson for most frequent commenter so he’ll see all of your thoughts.

2) please go into your disqus settings and do a few things:

    – put up a picture/icon/avatar. ever since i whacked typepad comments, we’ve lost the myblog log integration which put your photos next to your comments. i miss them.

    – in the "notification settings" change the settings so that you can be alerted via email (sms soon) when someone replies to a comment you made. I do that a lot (thanks to disqus’ cool email reply feature) and you might want to know if I replied to a comment you made on this blog.

Hosted third party comment services are here to stay. Andrew has Intense Debate on his blog and I like that service a lot too. The next step is getting all these third party comment systems to interoperate so that having a profile on one of them is like having a profile on all of them.

Ganging Up On The Leader


  The neverending Risk game in AT 
  Originally uploaded by Aaron Michael Brown.

When I was a kid, I played a lot of Risk, the board game where your aim is to take over the world. Nowadays, when I want to play Risk, I do it on Facebook.

The thing that always happens in Risk is everyone starts ganging up on the leader. It’s the only way to stop someone who has control of large continents with lots of armies.

That’s where Facebook is today in open social networks. It has the social network with the most mojo (if not the most traffic), it has an open platform that has attracted a mind boggling number of developers, and it is about to launch a profile based ad targeting network that certainly appears to be a compelling offer for advertisers. Not to mention at whopping $15bn valuation thanks to Microsoft.

No wonder the other players in social networking are ganging up on them. The NY Times has a story up that explains how Google has roped a number of other social nets (including LinkedIn, hi5, Friendster, Plaxo and Ning) into supporting their "open social net platform". What this means is you can develop on top of the Google tools and immediately run on many platforms instead of just one.

I think this is smart. Just yesterday I was emailing with several colleagues about a company we are involved in. They are trying to decide which of the coming open social net platforms to support (myspace, beebo, google, meebo, etc, etc). Social networking is starting to look like the mobile business, there are too many things that you need to write to.

It’s true that you can wait until a platform has scale (as Facebook does) and just support those platforms. That’s what most developers do. But it’s not lost on anyone that most of the Facebook apps that have become popular were launched at the very start. Getting on board early is a big advantage.

So a set of standards is a welcome thing. I like what Google is doing with Open Social. Ganging up on the leader is a time honored way of competing. And a level playing field is usually good for the newcomers, and we have a portfolio full of newcomers.

 

Skunk Drunk In The Sad Assed Backwater

Sorry to use that term in two straight headlines but it’s so good I have to. John Heilemann can sure turn a phrase.

This post is not about John’s piece. I’ve said what I think about that.

This post is about Steve Rubel’s post last night,  The Web 2.0 World is Skunk Drunk on Its Own Kool-Aid. Steve’s fed up with all the hype, the parties, and the money flowing through the web today. He says:

I am sorry to be a party pooper on conventional wisdom, really. But
I miss the days of 2004 when the class that includes Flickr,
del.icio.us and others started. They really were about changing the
web, not making a quick buck (they did so only because they added
value). There are companies still out there like them. Twitter is one I believe takes this approach. Automattic (the company behind WordPress) appears to be another. Dave Winer also shares this spirt. He creates services like NYTimes River because it’s fun and he thinks it will add value to our lives (and he is right).

However, most of the rest of today’s net startups are only after the
almighty dollar and while that’s capitalism, it saddens me because it
has done little but breed hubris.

I’d like to go back to 2004 too. It was easier then. Less hype, less noise, less competition for deals.

But we are where we are. And even though Heilemann basically calls me "chicken little" in his story, I think all is not lost. We have the following opportunity in front of us; the web is going mobile, programmable, social, and semantic all at the same time. And this is happening on a global scale in real time. In ten years, we will have a completely different world wide web and I am not going to miss out on the fun of helping to build a few parts of it.

So bring it on.

Posting From The “Sad-assed Backwater”

I posted this quote today on my tumblog with the tumblr bookmarklet:

Sad_asssed

John Heilemann, who wrote the piece in NY Mag, wanted to know why it didn’t get on the "main stage" (that being this blog). Truth be told, it’s just too easy to post to Tumblr with the bookmarklet and I find myself doing that more and more.

But upon reflection, I cannot help myself. I am going to respond to some of the crazy assed (as opposed to sad assed) things John said in that article.

First of all, John uses me, Howard Lindzon, and Henry Blodget as his examples of NY-based "chicken littles" who are running around claiming the sky is falling. Nothing could be further from the truth. Howard, who lives in Phoenix the last time I checked, is starting something like a company a week. And Henry just launched NY’s version of Valleywag meets Techcrunch. And me, well I think you all know what I am up to.

Next, I take objection to the notion that failure is accepted more in the bay area than in NYC. That our  "wall street culture" rejects failure while silicon valley embraces it. Wall Street is full of people who have made a living failing and greed creates amnesia here in NYC just as much as it does on the west coast.

But this quote from Seth Goldstein put the icing on the cake for me.

“People in New York feel a chip on their shoulder because they’re not
in the center of this thing,” says Seth Goldstein, a longtime Silicon
Alley player now decamped to Marin County.

I’ve known Seth a long time and I don’t recall him ever having a chip on his shoulder when he lived in NYC. Another case of amnesia it seems.

Well I for one am happy to live and work in this sorry assed backwater that I call home. Silicon Valley is the mecca for sure, but there is plenty of great stuff going on in NYC right now and John’s web 2.0 story doesn’t ring true to me.

The “Lead Investor”

One of the most misunderstood concepts in the venture/startup world is the concept of the "lead investor". I got an email from a friend yesterday who I won’t name because I am not sure he wants his financing efforts blogged about openly. He said that he’s got indications of interest from a number of investors but they are all waiting for a "lead investor".

I told him that what he has is a bunch of followers who have no real conviction about his business because if they did,they’d step up, negotiate a deal, and get their money into his company. But instead they are going to sit on the sidelines, wait until someone with conviction shows up, and then try to get in alongside the investor with conviction.

Those kind of "sit on the sideline" investors are worthless to you if you want to get a financing done. They don’t impress the kind of investors who have conviction because investors with conviction are going to want all of the deal for themselves (or their friends they will bring in alongside of them).

If you are raising a financing of any kind, spend all of your time looking for a lead investor. Qualify every meeting upfront. If the investor won’t lead, don’t take the meeting.

Here’s what a lead investor will do for you:

1) they’ll raise their hand and say "we are in".
2) they will negotiate price and terms
3) they will hire a lawyer, negotiate documents, and get the deal closed
4) most of the time, they will take a board seat
5) they will work on the investment after the deal is closed
6) they will be your first call when you need to discuss something with your investors and they will help you manage the rest of the group (if there is one)

In short, your lead investor does all of the work for the investment syndicate, is your financial partner, and is focus of your investor group. When thinking about an investment, focus all of your effort on your lead investor and they will make the rest happen for you.

There are plenty of situations when there are "co-leads". This happens for two reasons, one good and one sort of lame. The good reason is when your deal is ideally suited for two investors (in my mind always a good thing if you can make the economics work), the investors will pair up and do the deal together, usually on a 50/50 basis. It’s typically two firms/investors that have a history of working together and you’ll often get both investors on your board. That’s the way Bruce Golden of Accel and I did comScore, for example.

The "sort of lame" reason is that investors often keep score of "lead investments" for their investors (limited partners). Investors like to be able to say that they "led" some large number (like 80%) of their deals. That gives the impression that they generate their own deal flow and don’t rely on the generosity of others. I think its lame because it causes investors to play games with words and muck up the concept of "lead investor".  Most investors who rely on the generosity of others won’t be around for too long. You can’t generate top quartile returns in the venture business by being a follower.

In the venture capital business, there is only one sustainable investing model. You have to be a lead investor. You have to have conviction about what you are doing. And you have to lead.

Two iPhones Per Person

This has nothing to do with insuring availability of iPhones. It’s about shutting down the gray market in iPhones, particularly unlocked iPhones.

The availability of various software unlock schemes has led to a vibrant gray market where people buy as many iPhones as they can, unlock them, and sell them, mostly to the international market, for a very nice profit.

This is part of the ongoing cat and mouse game between Apple and hackers and hustlers. I think in the long run Apple will lose this game.