Posts from February 2008

Free Is A Great Way To Make Money

That’s how I ended a post I wrote almost three years ago, called In Defense Of Free. It’s a concept that regular readers of this blog know well. But I still get comments like this one from hyokon:

I am a bit worried about the current craze about ‘free’. There is
nothing that ‘should’ be free, but it seems like becoming a requirement.

I replied to Hyokon and suggested reading my post in defense of free. But I’ve got a better idea. Go read this post by Chris Anderson in this month’s Wired.

Chris credits me with the word freemium in the post and he’s wrong about that. I suggested we come up with a catchy name but Jarid Lukin delivered the name and try as I might, he never seems to get credit for it.

Other that that little nit, Chris nails the issue of the free business model in his post. Here is the key insight:

The most common of the economies built around free is the three-party
system. Here a third party pays to participate in a market created by a
free exchange between the first two parties. Sound complicated? You’re
probably experiencing it right now. It’s the basis of virtually all

And before everyone starts crying "advertising overload", Chris goes on to identify a number of non-advertising based free business models.

Bottom line – go read Chris’ post. I am happy to have his company working in defense of free.

#VC & Technology

Thoughts On Choosing Board Members

I am a professional board member. I’ve been sitting on boards for almost 20 years and I’ve seen a lot. I’ve seen some of the best board members in action and have tried to copy them. I’ve seen some of the worst board members in action and have tried hard to forget them.

Here are some thoughts on choosing board members. This advice is for everyone, but it’s of particular use when you are a bigger company, maybe public, and need to fill your board with good people.

  • Avoid "big names"  For the most part, they are useless.
  • Select people who will attend each and every meeting, who will pay close attention to the business
  • Select people who have an affinity for your business, who understand your challenges and your opportunities
  • Avoid putting someone you can control on your board. In tough situations they will have a fiduciary duty to do what’s right and you won’t be able to control them when it matters most to you.
  • Don’t let conflicts get in the way of selecting the ideal board member. Conflicts will be disclosed and can be managed. Many times the people who will understand your business best are conflicted in some way. There are ways to deal with this problem.
  • Make sure to have an experienced accountant/auditor on your board and have them run the audit committee. That is no place for amateurs.
  • Make sure to have at least two or three CEOs of comparable companies on your board. Make sure they are on the comp committee. Compensation issues are best handled by people who understand the talent market.
  • Select people who have the time to do the job right. Being a board member is a job. It’s not a retirement perk. If someone cannot commit to attend each and every meeting and to spend at least several hours a week on your company, they are not the right choice.
  • Select people who will get along with each other. The very best boards I am on are friendly social active groups. Serious business doesn’t have to be stilted and formal. It can and should be fun.
  • Above all else, look for great judgment and ethics.

Hope that helps.

#VC & Technology

Why I Read Techmeme

I’ve been critical in the past of techmeme and I still feel that too many people are writing to/for techmeme and that it’s getting gamed. But I read techmeme every day, without fail, often two or three times a day. I also follow techmeme firehose on twitter via twitterific and that is a great experience.

There is one thing that Techmeme does that makes it a must read. The related links under the headline.

Take this CNN story yesterday about the Japanese satellite. I saw it but didn’t really want to read it. I was curious if it was a big deal or not, but didn’t think CNN would tell me that. So I didn’t click thru.

Then this morning I saw the following:


If you look at the related links under the main story, you’ll see a link that says "Fractals Of Change". That’s my friend Tom Evslin’s blog. Tom will know whether this is a big deal or not. So I immediately clicked thru and read Tom’s thoughts. It’s not a big deal.

Seeing the big news headlines of the day is important and I love watching them come through in my twitter feed. But seeing the related links and knowing when someone you trust is talking about an issue is the big deal for me in Techmeme. Others do this as well, but to my mind Gabe does it best and that’s why Techmeme is a daily read for me.

#VC & Technology

There Will Be Blood

Cameron asked for a review of There Will Be Blood with this comment last night. So here it is.

Daniel Day Lewis
is one of the top actors working right now. His performance in this movie about the early days of the oil business in the US is fantastic. Paul Dano also delivers an over the top effort as the preacher who torments him.

The acting is the star of this movie. The historical context is interesting. I was fascinated by the way the oil business developed in the early days of the 20th century.

But overall, I really did not enjoy the movie. The story didn’t pull me in and I honestly can’t say it was entertaining.

Bottom Line – see it if you like great acting but don’t see it if you want to be entertained.

#Random Posts

The Globalization Of Facebook

Erick Schonfeld generated a lot of discussion in the blogs yesterday with a post talking about facebook fatigue and the flattening of the facebook growth curve in the US.

But the charts in Erick’s post tell me that Facebook is a global business now and what’s happening in the US is not anywhere near the whole story. Here are some stats I culled from comscore.


Check that out. The percentage of monthly uvs coming from the US dropped from 76% at the start of the year to 35% at the end of the year. The percentage from the three big english speaking countries (US, UK, and Canada) dropped from 96% at the start to 64% at year end. Europe is now 23% of Facebook and Asia is now 14%.

Here is where Facebook’s growth is coming from right now.


#VC & Technology

Slide, Rock You, and Zynga

At the risk of wading into hostile territory, I am going to blog again about facebook stats and the rise of our portfolio company Zynga on the leaderboard. Here is the adanomics leaderboard that shows the leading facebook app companies.


I have no idea what UADA is, but the top three facebook app companies are Slide, Rock You, and Zynga. They and Flixster are the only facebook app companies with more than 1mm daily users. There are some other interesting companies on this list. It will be interesting to see how companies like Chainn, esgut, Blake, Watercooler, and 42 Friends develop over the next 6-12 months. Will they build or sell?

The other issue that this list brings up is the head versus the tail of facebook apps.

I realize that they are overlaps and duplicates, but the top 10 facebook apps generate a total duplicated and overlapping reach of over 13mm daily visits. The next 10 facebook apps generate a total duplicated and overlapping reach of about 3mm daily visits. And it does down from there.

It’s a classic power law curve. It’s not surprising at all. But it raises some interesting questions for everyone in the facebook ecosystem.

#VC & Technology

New Smartlink Icons

Some of you may have noticed little music icons next to the links to artists and records in my "three records" post from yesterday. That is if you cleared your cache. Otherwise you might have seen the old smartlink icons.

These are the new smartlink icons from our portfolio company adaptive blue. Alex Iskold, adaptive blue’s CEO, explains the new icons in this post.

Here are some examples:

Golden Delicious, the new record from Mike Doughty
YHOO, the stock that I should have bought a month ago
Brad Feld, my friend and co-investor in adaptive blue and a lot of other companies
Vintage Tunina, one of my favorite white wines
Spotted Pig, our favorite local haunt where Gotham Gal and I ate last night
There Will Be Blood, a movie Gotham Gal and I are seeing tonight

I am really excited about this little change because it showcases the power of smartlinks in a way that the old icons did not. All you need to do to generate these smartlinks is put one line of javascript into your blog template. For many of the popular blog platforms, there is a one click install.

After that, when you link out to a movie, a book, a restaurant, a stock, a record, a person, etc, on many of the most popular websites, the link will be decorated with an icon to show what that link is and give you the option of "exploding the link" to find related information without navigating away from the page.

These semantic anchors are going to start showing up all over the web and the web is going to get just a little bit smarter in the process. And that’s a big deal.

#VC & Technology

Three Records I Am Into Right Now

Sorry for the lack of music posts here at AVC. I am going to make it up to you with three for the price of one.

Nada SurfLucky – These guys, Matt, Ira, and Daniel, are fantastic individuals who make great music.

Their past three records, including the current one, have been family favorites. After they played a fundraiser gig in our old backyard, Josh listened to The Weight Is A Gift non-stop for months.

The new record is not as edgy as the prior two, with more acoustic guitar and melodies. But they write great songs and this is so listenable.

Whose Authority – Nada Surf – Lucky (thanks Butter Team for the mp3)

Oracular SpectacularMGMTFred Graver turned me on to this band with his year end mix which featured the awesome track called Kids.

I’ve been listening to them on hype machine since then and finally succumbed and bought the record. To be honest, it’s not consistently great, but there are five or six killer songs on it.

Their music is described as "electronic indie dance rock". I guess that’s a good description. I call it fun.

Time To Pretend – MGMT – Oracular Spectacular (thanks to Instrumental Analysis for the mp3)

Made In The DarkHot Chip – While we are on the subject of electronic music, I have been into the remixes that Hot Chip does for the past year. They are often featured on the Hype Machine. My all time favorite is this remix of the Stone’s I’m Free.

I got the new studio album and like the MGMT record, I feel that it’s mixed but brilliant in parts. The diversity of style and sound is simply amazing.

I can’t find an mp3 on the web right now, so click thru to my tumblog and listen to Touch Too Much, a ween-sounding track that is my current obsession.

#My Music

My Song Circle

Daryn told me about this cool trick with his tumblr player. You can type in as many tumblr urls as you want (separated by commas) into his script and get a player that plays a whole song circle’s playlist. Here’s my song circle in action. Enjoy.

warning – the load time is long if you put about ten blogs in it like i did.

#My Music

Comment Of The Day

We will be seeing a version of this play out in
Turkey. It’s an interesting market. Piracy has all but killed physical CD sales
and, online, people just don’t seem to be convinced to pay for music (i am
excluding mobile here). So far, online
sales have largely been subsidized by FMCG companies as promotions. Now TTNet, the Turkish broadband monopoly,
has cut a deal with all turkish labels (turkish market is 90% local music) to
offer the entire digital Turkish music catalog through a subscription. Then, they went ahead and included the
subscription in their higher-end pricing, and are offering it at a nominal rate
to other subscribers (nominal meaning $3-5/mo.) So it is now a utility. Supporting your last paragraph, Fred, I am watching to see how
progressive they will get with this. The
smart game is building a robust API and let tothers get creative.

posted by Cem Sertoglu to David’s Got It Right

#My Music#VC & Technology