Posts from July 2006

One of my favorite cliches is "there is no such thing as indentured servitude". I use that line to talk about the fact that talent can’t be bought and sold. It must be retained with something more than money.

You can give someone a big fat paycheck and a big slug of equity but if they don’t believe in you, your company, your vision, your team, and your culture, its a total waste of money. Because they will be unproductive and have one foot out of the door all the time. And when someone else offers them that big fat paycheck, they’ll be gone, leaving a hole in your organization.

I see this all the time in acqusitions. Big companies lock up entrepreneurs with earnouts, traunched payouts on equity, vesting, etc. So they "stick around" to get paid. But are they really doing anything of value for the buyer? Maybe, but I’d bet that they are mostly marking time. Entrepreneurs are entrepreneurs. Golden handcuffs can’t change a person’s DNA.

So you must sell your people on what you are doing. Take them up the mountain. Get them excited about the climb. Get them to buy into the vision. And keep selling the vision, the culture, and the company. Sure you have to pay your people their market value. People won’t work for free either. But paying market value is surely not enough to keep your best people. Because there is no such thing as indentured servitude.

Madison Square Park is a case study in urban park renewal. When the Gotham Gal and I moved to NYC in 1983, we used to live right down the street from the park. And we’d walk through it during the day and wonder why it was so downtrodden. We wouldn’t walk through the park at night.

Almost ten years ago, Danny Meyer and a group of donors, including us, went into partnership with the NYC Parks Dept and rebuilt the park and created a conservancy to keep it up. The result has been nothing short of amazing. I’ve blogged a bunch about the park, including the Shake Shack
and numerous festivals they have there. It’s become a hub of activity day and night and everytime I walk into the park I am filled with pride and joy for that.

Last night the conservancy held its annual fundrasier in the park featuring many of the best restaurants in the neighborhood who set up stalls, ala jazzfest. We went from one stall to the next sampling some wonderful food.

But the best part was this bluegrass band they had called City Grass. I caught them here doing a bluegrass cover of Pink Floyd’s Wish You Were Here. Excellent stuff.

Continuing our effort to blog what transpired at our recent Union Square Sessions event, Brad has posted his thoughts on the Net Neutrality discussion in a post he calls "Through the Looking Glass into the Net Neutrality Debate".

I just spent some time on the june comscore media metrix numbers and all the big social networks (and many of the smaller social networks) are basically flat june over may. It’s probably the summer months, kids getting off from school, doing something other than staring at their computer screens, etc, but it’s interesting nonetheless.

This chart shows how much bigger myspace is over all the other networks, but it also shows that there is a group of services bunched in the 10mm to 15mm users range.  It includes photobucket, youtube, facebook, and sixapart. And several of those, like sixapart and facebook, have been relatively flat for the past year.

So we may have to wait until the fall to see where all of this is headed but my sense is that "social media" is here to stay. The individual properties may rise and fall (remember Geocities and Tripod?), but the idea of media that is personal and social is a lasting one and an important one.

Robert Young posted his thoughts on this subject on Om Malik’s blog earlier today. And he really nailed it with this paragraph:

But just as the Internet was not a subset of AOL, social media will not
become a subset of traditional media. In fact, social media will
increasingly begin to compete directly with traditional media
consumption. Yes, it is true that the media output produced and
distributed by the audience itself will generally be of lower
production value and quality. Even so, they will prove highly
competitive to Hollywood products, as the personal engagement factor
inherent in personal media outweighs any loss of production value.

Robert did not highlight that last bit, I did. Because it’s the critical insight. I prefer reading Tom Watson’s posts on the Mets over the NY Times’ Mets coverage because Tom is a friend and I get a little bit of him in addition to the Mets.

Josh’s band, The Four Fellas, are a far cry from the Rolling Stones, but given the choice, I’d prefer to see The Four Fellas play live every time.

Personal engagement does compensate for a lack of production values. But it’s not one over the other. Robert compares it to cable versus broadcast, and I guess that’s a reasonable way to describe it. Social media will co-exist with produced media, what the ultimate market share of each is a big open question, but I believe they are both important.

And most importantly, social media can bring great value to produced media. YouTube is beginning to be embraced by the TV and film industry because it can help create demand for their products. I am spending the vast majority of my time using social media to find new music that I ultimately purchase from traditional record labels.

Social media is a fantastic development, and is a critically important piece of the emerging new media landscape. It’s not going to replace traditionally produced media, but it does compete with it for audience,and most importantly, its is highly additive when integrated with traditionally produced media.

I just posted a longish post on the Union Square Ventures weblog summarizing the patents discussion at our recent Union Square Sessions event. If you are interested in the subject of patents and how they impact innovation, go give it a read.

Last week saw the release of the fifth and final record in Johnny Cash’s American Recording series. We haven’t had a chance to listen yet, but I am sure its excellent. But I did find this song off the record where Johnny looks at death right in the eye. It’s called Like The 309 and I found it via the hype machine. It comes from blogs are for dogs. Thanks Josh.

Like the 309 – Johnny Cash, American Recordings V

At Brainstorm I attended a breakfast panel on the future of entertainment and Bobby Kotick, CEO of Activision, handed out this really cool Guitar Hero playstation2 game. I finally got around to hooking it up this weekend and the Gotham Gal and I spent time playing around with the game. You basically play a "toy" guitar along with songs like Smoke On The Water, I Wanna Be Sedated, I Love Rock and Roll, and many others. We have a way to go before we get to be rock stars (in the game or real life), but we had fun. If you are interested, you can get the game at Amazon.

We did our first podcast in three months today. We did it from our beach house and the music has that mellow summer weekend feel. This might not be the best podcast for that morning run or workout, but if you are just hanging out, I think this will do the trick.

Here is the song list:

• Summertime – Josh Rouse
• Other Side of the World – KT Tunstall
• Jacob’s Ladder – Bruce Springsteen and the Seeger Sessions Band
• I’m Only Sleeping – Roseanne Cash (Beatles cover)
• Rollercoaster – M Ward

Listen Live Here

To listen in iTunes or on your iPod, get iTunes version 4.9 or above, then select Advanced, Subscribe to Podcast, and then enter this into the box:

http://feeds.feedburner.com/Positively10thStreet

I read Bob Lefsetz regularly, pretty much every post he writes. And I generally agree with him.

Jackson, Tony, and Chrispy don’t like Bob ever since he posted that thing on Flea. They didn’t like his attitude or his message. I think the message was right, but the attitude was certainly in your face and disrespectful of Flea. And you really shouldn’t be dissing Flea no matter who you are.

That’s the thing with Bob, his "in your face" approach to everything can be oft putting. But I think you’ve got to get past that and listen to what he’s saying.

Bob’s been on a roll lately. Something like five posts on Thursday and Friday, covering the key issues in digital music:

iTunes,iPod, Satellite Radio, Internet Radio, FM Radio, CD sales, Singles, Albums, Hits

Check out some of these quotes (linked to the posts they come from):

For the first time ever, the record industry is not forcing a new
format down customers’ throats.  They’re not making the CD obsolete,
people are WALLOWING IN IT!  Maybe because they don’t know much better.

Because people want to own all this new stuff,
A LOT OT IT!  Not for a buck a track, maybe just the equivalent of a
nickel or a dime.  But imagine if the whole world were music crazy,
think of the revenue POSSIBILITIES!  But rather than harness new
technology, the old farts with no knowledge of computers want to keep
the music locked up, want to SUE to keep it locked up.

We all now know that the Telecommunications Act of 1996 killed
radio.  Put a stake right through its heart.  We ended up with
consolidation and ever more limited playlists.  Terrestrial radio is
THROUGH! But who knew that the record labels/RIAA would go on
to kill not only file-trading, but Internet radio.  So concerned about
getting paid, the record labels killed exposure.  And aren’t they happy
now, in a world where you can’t REACH enough people to get a diamond
disc.

Turns out they can’t even GIVE Napster/Rhapsody, et al, away on
college campuses.  Yup, NOBODY WANTS IT!  They don’t want services that
are incompatible with iPods where when you graduate you end up with
NOTHING! Now do you expect these college students to change
course after graduation?  To then embrace rental?  Do you think their
high school brethren will be quick on the uptake?  No, rental, if not
quite dead, is a marginal business.

So there you have it; the record labels are screwed, the CD is going to be history, FM radio is "through", subscription music services are marginal, and Internet, satellite, iTunes, and p2p are the future.

I basically agree with where Bob says we are headed but disagree with some of his statements. I often wonder if he actually means everything he writes because Bob contradicts himself all the time.

Take the subject of "rented music". Bob acknolweldges that people want to have access to a ton of music and might pay 5 cents per song for that. I pay $9.99/month for Rhapsody and probably listen to 200 different songs per month on it. That’s 5 cents per song.

Napster and Rhapsody are better solutions than satellite because you can get the music played to you or you can search find and play what you want when you want it. But as Bob points out in one of these posts, until a subscription music service is paired with a mobile player (a subscription service from iTunes please!), we won’t have mass uptake of "rented music".

Rented music is a great solution and so is Internet radio. I think we’ll get most of our music over IP connections soon. Maybe the only place we won’t get it is in cars where its hard to deliver a consistent high quality IP connection. Maybe HD Radio’s extra bandwith is the answer there.

Bottom line is Bob is right about where this stuff is headed but I think you have to decipher his message between the excitement and hyperbole that makes him so much fun to read.

I was listening to this Keira Knightley alt-rock playlist on Rhapsody as I wrote this post. It’s a great example of what "rented" music can do if people would just take the time to check it out.

Keira Knightley Rocks Out