Posts from June 2009

Friday's Chat With Howard

My friend Howard Lindzon asked me to show up at 9am and do a live chat while the market opened on Friday morning. It's part of the Stocktwits video channel. We covered a wide range of topics, including TheStreet.com, my best and worst investments, how Howard turned down the opportunity I gave him to invest in the first round of twitter, and bunch more. Here's the show and the transcript follows the video clip.

The Transcript:

Howard Lindzon: All right we're live.
We're live with Fred Flip Wilson. I don't know if you guys all remember
Flip Wilson. 

Fred Wilson: So if you do. 

Howard Lindzon: What. 

Fred Wilson: I know that. If you go to, I forget with some website and
you do a search for Fred Wilson. You get a lot a whole Sanford and Son. 

Howard Lindzon: 'Cause with Flip. You know, he wasn't Fred. 

Fred Wilson: It's Fred Sanford. 

Howard Lindzon: It's Fred Sanford and see your name come up with some
of those? 

Fred Wilson: No, they never asked me about that. 

Howard Lindzon: So, welcome. You are my first investor in Wallstrip. 

Fred Wilson: Correct. 

Howard Lindzon: And now we got a new site called StockTwits which you
didn't invest and you said it was a bad idea. 

Fred Wilson: Terrible idea. 

Howard Lindzon: So Fred, passed on this one and now we're just jamming
it down to the throat with our success. 

Fred Wilson: Wait a second. Did you passed on when I offered you a stock
in Twitter. 

Howard Lindzon: So Fred called me and said I got this deal for you.
It's Twitter. I don't do California deals. Is that what you said to
me. But it just gonna be like one of our first California deals. And
I said, I mean what's the valuation. You said, 17 million (pre money).
[note: Howard remembers the valuation incorrectly, it wasn't 17 pre]  And I said, I'm out. I think, you said Jeff Pulver took that stock. 

Fred Wilson: He did. Jeff Pulver took that. I offered to you first.
You said no. 

Howard Lindzon: You're not sure you offered to me first. I know, it's
legend. How is it for me. I mean, honestly you did offered it to me. 

Fred Wilson: I did offered it to you. You don't remember that. 

Howard Lindzon: I don't remember any. I think, I forgot where I said
that you still. It's like Zynga. You owed me 25k. 

Fred Wilson: I don't owe you anything with Zynga. 

Howard Lindzon: That's Pincus. So the… 

Fred Wilson: But,  I will tell you something about Mark Pincus. He one
time promised me a Porsche. 

Howard Lindzon: If. 

Fred Wilson: It was the first investment I ever made with Mark in 1995.
It's called FreeLoader. He said you know when we sell FreeLoader. I'm
gonna buy you a Porsche. 

Howard Lindzon: If. 

Fred Wilson: If we sell FreeLoader. 

Howard Lindzon: If. 

Fred Wilson: A Porsche. 

Howard Lindzon: So, Fred is a man who lives up to his promises. He backed
Wallstreet. He made a bunch of phone calls for me. I remember you said
called Brad (Feld). Brad (Feld), said I'm busy but here's 25 grand.
I never knew when he hear the idea.

Howard Lindzon: And that's what the (clue in throw). I'm good friends
with Brad still. So, it was the beginning of what I have termed social
leverage. 'Cause I met you as many people like there now at StockTwits
interacting together through your blog. What comment system you think
you were using way back? 

Fred Wilson: TypePad. 

Howard Lindzon: So you are using TypePad comments like commonly abscure.
bizarre, funny comments. 

Fred Wilson: Hilarious comments. 

Howard Lindzon: Hilarious comments. You heard it from Fred and Fred
claim to fame in our world. Where there's many claim to fame. But Fred
was the first investor in the Street.com. So, I don't know if I can't
get him today to talk about it Jim Cramer. 

Fred Wilson: That's not actually technically correct. That was the first
outside investment, Street.com. Jim and Marty. Marty Peretz and Jim
Cramer who started the Street.com together. I think they put maybe $5
million in to the Street.com before my firm, Flatiron (invested). 

Howard Lindzon: So who approached you on that investment. 

Fred Wilson: Dave Kansas. You know Dave Kansas? 

Howard Lindzon: Yeah and Dave is now at Wall Street. He is a good guy.
We interviewed him at Wallstrip. 

Fred Wilson: Yes. So, Dave is actually not at the Wall Street Journal
anymore. For brief period ran a joint venture between the Wall Street
Journal and Interactive Corp. called FiLife. 

Howard Lindzon: Right. 

Fred Wilson: And then. 

Howard Lindzon: He has one unique amongst visitor. 

Fred Wilson: It may be both be true. 

Howard Lindzon: Okay, so you. 

Fred Wilson: Is that you? 

Howard Lindzon: I don't know just checking to see if they lunched. 

Fred Wilson: They had lunched. And then Dave is actually moving to London. 

Howard Lindzon: Is he? 

Fred Wilson: Yes he is. 

Howard Lindzon: Okay. So he called you and you said I got a must-see
investment. What year was this? '97, '98? 

Fred Wilson: No, he didn't told a must-see investment. He said, we need
to raise an outside money to get Street.com. 

Howard Lindzon: Okay. 

Fred Wilson: And so, I said, yeah I like what you are doing. I'll come
down and I came down to meet with them. Dave, Brendon and Simon. They were the three people who running the company at that
time. 

Howard Lindzon: You know Cramer at the time? 

Fred Wilson: I mean, I was meeting him. 

Howard Lindzon: Oh, you meeting him. 

Fred Wilson: Yeah. 

Howard Lindzon: Okay. So you're waiting him to come in. How long did
it take you before he thought this could be a winner. 

Fred Wilson: I thought it was a winner before even met with him. 

Howard Lindzon: Okay. 

Fred Wilson: You know, Jim Cramer, invented blogging. 

Howard Lindzon: You know, Robert Scoble was here yesterday and he said
he invented blogging. 

Fred Wilson: Well. Jim Cramer, was writing what were essentially blog
posts from his trading desk in 1996. 

Howard Lindzon: Is this, was he medicated then or no? 

Fred Wilson: I have no knowledge of it whatever. 

Howard Lindzon: Okay. You never saw pills? 

Fred Wilson: Never seen pills. 

Howard Lindzon: I've seen pills. So first meeting. 

Fred Wilson: Right. 

Howard Lindzon: What impressions? 

Fred Wilson: I didn't meet Jim on the first meeting. 

Howard Lindzon: Okay. 

Fred Wilson: I met. 

Howard Lindzon: Is he in the cage somewhere? 

Fred Wilson: Well. Jim was running Cramer Berkowitz at the time and
the Street.com was a seperate company. And he had these three guys.
Dave was running editorial. Brendon was kinda running the business side
and Simon was the money guy. And so I met them, they seem like young
but capable guys. I said you know we could maybe do something interesting
here. And so we asked to meet to Jim. We went down, we met Jim. We were
working with the guy the time of my business who knew Jim from I think
Harvard. He actually gone to school with Jim in Harvard. And he said
here is the good news and the bad news about Jim. He said is crazy.
Jim is brilliant. He is a winner. But he is gonna drive you crazy. 

Howard Lindzon: So right on front, full disclosure. 

Fred Wilson: Yup. No, this guy Lee Greenhouse was working for us at
the time who had known Jim for I guess that point, 20 years. 

Howard Lindzon: So, you where in the stocks or he was just 'cause you
are in the new media. How did you know about reading some. 

Fred Wilson: We wanted to invest in leading internet companies at the
time. We never have anything in our portfolio in the finance category.
And even back then I thought the big media companies where vulnerable.
I thought we could take on the Wall Street Journal with the leaner,
meaner, more nimble finance side. And I thought Jim was great frontman
for that. 

Howard Lindzon: And so you invested. Were you do only investor. 

Fred Wilson: We're the only investor then. There were subsequent rounds
where we brought other investors in. 

Howard Lindzon: So when did you first realized that Jim is crazy. Nah,
I'm kidding. So what don't you tell us. 

Fred Wilson: You know. Jim is crazy like a fox. I mean, there is a method
to Jim's madness. 

Howard Lindzon: I don't understand what method is. To be famous? 

Fred Wilson: No, no. Jim is an idea-minute guy. He can't stop himself. 

Howard Lindzon: He would have been a great VC. 

Fred Wilson: I don't know. He is not patient.  Jim is impatient. 

Howard Lindzon: So he is yelling on his entrepreneurs. He think too
fast. 

Fred Wilson: Yeah and he is mercurial. He changes his mind a lot. 

Howard Lindzon: Okay. 

Fred Wilson: But Jim saw this whole thing coming. Way before anybody
else did. He understood that anybody could publish to a website. He
understood that you could go direct to the audience. It didn't need
to go through. 

Howard Lindzon: Editors or … 

Fred Wilson: The media whatever and he understood stocks with one of
the most addictive forms of media out there. And it, you know, you could
build large audience talking about stocks all day long. So he knew all
that. Like 10 years before the rest was figured out. 

Howard Lindzon: So why he seem doing anything creative now? Do you think? 

Fred Wilson: I think Jim was always very caught up with TV and the idea
that, you know, he could have a bigger megaphone on TV than internet.
I think he really like what he is doing with mad money. I thinks that's
really a good venue for him, honestly. 

Howard Lindzon: So who did the IPO? 

Fred Wilson: Goldman Sachs.   

Howard Lindzon: So Michael Perrick love that. Did all that stuff. 

Fred Wilson: I believe Michael was the analyst. 

Howard Lindzon: I just saw Michael yesterday. 

Fred Wilson: I believe Michael was the analyst. I'm not sure about that. 

Howard Lindzon: And so what was the valuation when you guys went public. 

Fred Wilson: I think, it was like $250 million valuation. But then
it traded to like a billion dollars. 

Howard Lindzon: I remember like the first few days. 

Fred Wilson: It drove Jim crazy 'cause he knew the company wasn't worth
a billion dollars. And he was just pounding his head on the table saying,
oh my god, we screwed up, we screwed up. Now we got a valuation we can't
sustain.  Then he also saw that we were screwed at that moment which we were. 

Howard Lindzon: Right. So flash forward to the new web. The new fund
Union Square Ventures. The you have second Union Square Ventures this time. 

Fred Wilson: We have 2 funds. 

Howard Lindzon: Yeah. 

Fred Wilson: Union Square 2004. Union Square 2008. 

Howard Lindzon: And has 2008 had made any investment? 

Fred Wilson:Yeah. We've made 7 I think, 6 or 7. 

Howard Lindzon: So tell me about. So Fred is obviously an early investor
in Twitter. My luck is been, I had made an investment in Twitter through
Summize and through  my investment in beta works. 

Fred Wilson: Right. 

Howard Lindzon: So I have an investment there and I think it seems like
Twitter stole Summize. What's you're thinking there. 

Fred Wilson: Stole Summize? 

Howard Lindzon: Yeah. 

Fred Wilson: I think, it was… 

Howard Lindzon: You called Summize a search or a Twitter search. Do
you still call Summize or Twitter search? 

Fred Wilson: You wanna know the truth? I actually type Summize.com 

Howard Lindzon: Right. 

Fred Wilson: 'Cause it is shorter than Search.Twitter.com

Howard Lindzon: Right. 

Fred Wilson: Although, now search is integrated in to the each user's
homepage. So I tend to actually go there now most of the time. 

Howard Lindzon: So you gave me a quote for a front page when we're doing.
I don't know if you remember it. It's like you knew the stocks maybe
because you're inside in the Cramer scene. But if you knew that Twitter
and stocks. Or I wrote that poster company years ago, you knew that
was a good idea. 

Fred Wilson: Yeah, great idea. 

Howard Lindzon: People. I think you said, if you like to stocks and
you like talking about them all day long. Then StockTwits is for you. 

Fred Wilson: I think that is right. 

Howard Lindzon: So what are we doing right and what are we doing wrong? 

Fred Wilson: I think mostly right. I think the idea of building StockTwits
as a platform on top of a bunch of social platforms. Starting with Twitter.
Now Facebook and ideally any other social platform that opens up it's
API. Is a great idea. Imagine if, there are now about version of Twitter
and Facebook all around the world. 

Howard Lindzon: Right. 

Fred Wilson: So there's Facebook clones in 20 countries. There's Twitter
clones in 20 countries. If all of those… 

Howard Lindzon: There's Twitter clones in 20 countries. 

Fred Wilson: Yeah. 

Howard Lindzon: That's it. 

Fred Wilson: If all of those services were open in the same way that
Facebook and Twitter are, Twitter is more open than Facebook. But I
think Facebook is trying to become as open as Twitter is and if all
these other services became open and StockTwits set on top of all of
that, right?. I mean in the people in China is using the Chinese Twitter
clone or chatting out Chinese stocks and that's what coming into StockTwits,
you know that's you've aggregated the entire global conversation about
stocks. 

Howard Lindzon: Right. 

Fred Wilson: That's brilliant. 

Howard Lindzone: But I'm not that smart. So… 

Fred Wilson: Yes, you are. 

Howard Lindzone: So I need that. So we need another 20 or 30 tech guys. 

Fred Wilson: Oh, yeah. Yes, you definitely need a brilliant technologist,
I agree with that.  

Howard Lindzon: And then so what do you think, we're doing. I mean are
we following it enough to see like what other stuff we could be doing
or adding or you're not following it close enough.  

Fred Wilson: I checked StockTwits maybe 2 or 3 times a week. I'm not
in it everyday.  

Howard Lindzon: Well you're not that in to stocks. 

Fred Wilson:  Not really. 

Howard Lindzon: Anymore. So, Fred  sold Google and Amazon this morning. Last October, I think you were buying Google and Amazon. We're bought
buying Amazon. You're buying Google. 

Fred Wilson: I was buying Google, Amazon and Apple and then late last
year I bailed out my Apple 'cause I just didn't like the fact the jobs
wasn't really being straight with the street and I just felt like. I
mean it's a great company, but I just thought like I didn't really want
to own stock in a company who's CEO is not necessarily being transparent.
So, I got out of that, you know that was, you know economically a mistake
cause the stock is done great, but I don't feel bad about it.  

Howard Lindzon: And then Google is up. 

Fred Wilson: Google I bought. I bought Google between 325 and 275
in October, November last year. So, I probably, average cost to 300
and I bought Amazon between 35 and 40. So, probably an average cost
of 37, 38 and I did that because it felt to me like the world was putting
a fire sale on stocks and you know I just  went in and bought the stock
that I understood and I bought it 6 to 8 times earnings which I feel
like when you're getting the best companies in the world is 6-8 times
earnings, you just got to do it and a lot of conviction about it and
I wrote, you know series of blog post about that fact that I was doing
it and why I was doing it and how I was doing it and I built up a position
in those stocks like I got out of Apple whenever I got out of it, when
the job thing happened and then I held on to the Google and Amazon.
Traded in and out of Google once I sold it 330, got back in it 300 and
then I just saw yesterday that Google was like a 420 and Amazon was
like at 82 and I said you know what, I don't have that conviction anymore.
I don't feel like these stocks are on sale anymore. It feels like they
fairly valued now. I don't know if the market is gonna go up or down.
I don't have, I don't have any convictions. If I have conviction I should
known these stocks. 

Howard Lindzon: But generally you're not a stock person.  

Fred Wilson: No. I did it because you know I'm a contrarian, you know
when everybody else says, oh my God the world is falling apart you can't
own stocks. To me it's like I got to buy stocks. I want to buy stocks
when that happens.  

Howard Lindzon: Okay.  And then tell me about Twitter investments itself.
Who approach you and how did it happen.  

Fred Wilson: What happened with Twitter was, that I started using Twitter
in the winter of 2007. So January, February and March of '07. And then
I read a blog post on Evan Williams blog talking about the creation
of Odeo. Not the creation of Odeo the creation of Obvious which was
incubated that he, he turned the company called Odeo into incubator
called Obvious. And then I called them up and said are you gonna spin
Twitter out of Obvious in the same way that Bitly got spun out of Beta
Works and he said yeah we're thinking about doing that and so I said
when I can come talk to you about it and he said yeah I why don't you
come let's talk about it. And I brought my partner Brad with me. We
flew out to California and basically had a 2-hour conversation with
Ev and Jack and we said this is what we think Twitter can be and this
is what we would do if we were you and this is why we want to invest
and we had a great conversation and then flew back to New York, basically
flew out for the meeting. Flew back to New York I called them the next
day and said how it goes and said we like you guys. And I said can I
send you term sheet and said yeah. I sent them the term sheet and he
like the price and he called me back. Waited for the weekend call me
back the next week said I think we're gonna do this with you.  

Howard Lindzon: Did you have any other investors do the deal with you? 

Fred Wilson: Charles River Ventures which was an investor in Odeo  

Howard Lindzon: Okay. 

Fred Wilson: Took a small piece of it and people like Marc Andreesen
and Dick Costolo and I believe Mark Pincus, my former partner Jerry
Colonna, Chris Sacca, Ron Conway, a lots of angels. In fact what we
did was we said we'll take $5 million for the round. But we'll let you
cut us back to $3 1/2 million because we believe that there's a lot
of smart people out there who understand how big Twitter is gonna be
and they can provide added value so you can sell up to million and a
half dollars… 

Howard Lindzon: So, I learned that strategy from you. It's like you
have the power to be the lead not me, but you share it all kind of it
helps in this age. Is that the biggest thing that's change in venture
capital maybe?  

Fred Wilson: Well, I think the venture capital is actually gone the
other way, I think people become greedier about their deals. When I
got into the business in the mid 80's people were very eager to syndicate
deals and as people have raise larger and larger funds they now feel
the need to put more money into these companies and then the less wanting 
to syndicate. But I think syndicating investment is the smartest think
you can do because you get a lot of smart people who now have invested
interest in the thing and then they want to go make the company successful.  

Howard Lindzon: And what about, okay so Twitter today how many rounds
a big, how much is the raise. 

Fred Wilson: Twitter is on 3 rounds. Our round and then a year after
that in the midst of the worst period in Twitter history which was March,
April, May of last year. The service was down more than it was up and
it was just really, you know problems. We run out of money and we talk
to a lot of venture capitalist and we got a couple of term sheets and
the most aggressive over them all was Spark Capital with Bijan. And I
got to give them a lot credit because they've really saw the Twitter
you know is gonna come through all this, you know technical issues that
they had and they made bet out of a very difficult time. So that was… 

Howard Lindzon: Did you bring…so you use some guys in San Francisco
to fix that yes or no? 

Fred Wilson: You wanna know my opinion of what fix Twitter. 

Fred Wilson: I think the thing that really, I mean and Twitter is not
"fixed", but the service is become much more stable and much
more reliable. I don't think these services are ever "fixed"
because they continue to grow and grow and grow and you have to scale,
scale, scale, scale. So, I think fix is a wrong term to be using, but
when we did the Summize acquisition. We got the Summize tech team integrated
with our tech team and Greg Pass who was one of the 2 founders of Summize 
became the VP of engineering at Twitter and Greg and his team from Summize
combined with the talented people we had at Twitter meshed and the culture
in the Engineering organization became a great positive can do culture
and they just, they got, they act together and the service has become
more stable and so Twitter fix its own problems. 

Howard Lindzon: And so let's talk about. Give me some, I mean I don't
know how close you are with the company. How many employees, 40 something. 

Fred Wilson: I think Maybe 50 now.  

Howard Lindzon: So what happens when these niches  start develop like
StockTwits. I'm was hearing from Robert yesterday that Twinkle has created their on Twitter. Right so let's say. 

Fred Wilson: Twinkle has created their own Twitter?

Howard Lindzon: No back in duplicate copy or version of Twitter.  

Fred Wilson: All right. 

Howard Lindzon: So let say that happens in moms and other sites. How
is that gonna  effect, you know when the niches decide what if we can't
figure how to monetize on Twitter we're gonna create their own platform.
Like what do you think Twitter. If you are running the company, can
you tell me what you think the monetization strategy would be or would
you be chasing monetization or you will be doing… 

Fred Wilson: Well, I wanna.  

Howard Lindzon: It's not really great question… 

Fred Wilson: I wanna address the first question you asked which is can
people build services on top of Twitter and then take their communities
off of Twitter into private communities. I think they can do that but
I think the challenge with doing that is that not everybody is you know
is stock conversation in StockTwits. But because StockTwits is built
on top of Twitter those conversations they're going back and forth in
the Twitter. So, I could be in Twitter or TweetDeck or some other Twitter
application and I could see an update that you wrote about something
from within StockTwits and so if you take the community entirely out
of Twitter then I'll never see that anymore, those conversations are
gonna be silo'd off and not part of the larger conversation and I think
that's a mistake strategically for people who are building the services
on top of Twitter and Facebook.  

Howard Lindzon: So how you monetize?  

Fred Wilson: Well… 

Howard Lindzon: If I can't take of  ___ community or if I can't take
that data. Let's just passed it on the community and create more features
'cause Twitters only have a certain amount of features.  

Fred Wilson:  Oh, you can create more features. I'm not suggesting that
you take the…I'm not suggesting that you don't create more features.
I think that's exactly what you should be doing. You should be creating
a lot  applications specific features. Things the people who talked about
stocks want that they can't get a Twitter.com or TwitDeck or (Seismic)
or somenthing like it. 

Howard Lindzon: And you're saying build them on top of Twitter?  

Fred Wilson: Build  it on StocksTwits like you already have.  

Howard Lindzon:  Um.. 

Fred Wilson: You have charting application. You have…you can search
by ticker. You can do all this things and StockTwits that you can't
do on Twitter. The point is the basic atomic element, which is the Twit,
the update. That I think needs to continue to be connected into the
Twitter ecosystem or Facebook ecosystem and ideally Facebook and Twitter
should get connected to each other right. So we have one  sort of global
status update ecosystem. And all these applications that are built on
top of it are communicating back and forth into that. So that it's one
system in the internet. 

Howard Lindzon:  So when you see this… when you started her did you
see this one when you started? 

Fred Wilson: Not really. 

Howard Lindzon:  So when you making an investment like that. What are
you still considering taking, are you still taking a flyer by nature. 
Or you just betting on the service or betting on the fact that you love
the product or you're betting on.  

Fred Wilsson:  Every investment we make is a flyer. Let's just be clear
about that. It's an educated flyer in a sense that we have some thesis
about why we should be making this by. And about a third of them worked
out better than we thought that they would. Burt a third of them worked
out horribly and by a third of them worked, but if we have known that
they that were gonna worked  at that level we'd probably wouldn't make the
investment. 

Howard Lindzon:  Or the past… 

Fred Wilson:  So all the returns comes from about thirty percent of the bets
we make.  

Howard Linzon:  It's up in the same way since the mid 80's where your
in there.  

Fred Wilson:  Yeah. You know, if you go back the Union Square 2008 fund
is probably the 6th or 7th venture fund that I've involved with in my
career. And I have all accessed to all of that data from every portfolio
that I have been involved with. And if you crunched the numbers and
some have been better performing funds. But the 1/3. 1/3, 1/3  numbers kind of
all shake out in similar way. . 

Howar Lindzon:  Which is a deal that you have done…talked about your
worst deal. 

Fred Wilson:  Well, I tell people that my worst investment was the company
called StarMedia. Even though StarMedia went public and traded up to
couple of billion dollars, 2.5 billion dollars in market caps. So you
would say well "how could that be your worst deal?" but that
company blew up and ended being worth nothing. And I was on the board
and you know, I feel like the board didn't do the things that it needed
to with respect to the management team quickly enough and as a result
that company spun out of control and we lost everything. So that in
my mind was the worst, that's my worst investment.  

Howard Lindzon:  And what investment are
you like the proudest of?  

Fred Wilson:  Well, I'm really proud of what Mark has done with Zynga.
I mean, it just blows me away. And I've been investing with Mark for fifteen years.

Howard Lindzon:  So talk about Zynga for a second. 

Fred Wilson: Zynga is the leading social gaming… 

Howard Lindzon:  'Cause I'm supposed to be in Zynga but Mark has forgotten
to remind me.  

Fred Wilson:  Should we just stop talking about it now? 

Howard Lindzon:  No, I want to hear it. Well how much money  I didn't
make.  

Fred Wilson: Except my Porsche.  

Howard Lindzon:  So what's Zynga? 

Fred Wilson:  Zynga is the leading social gaming company in the world.
They make social games, which are games that exist in social networks
and take advantage of the fact that you and I are connected in Twitter
or you and I are connected in Facebook. So if I'm playing Mafia Wars
I can get you to be part of my Mafia and we could play the game together. 

Howard Lindzon:  Right. 

Fred Wilson:  And the other thing important about social games is that
the best social games. We don't play in realtime together. Like, you
know, some social games you're playing in real time together like Texas
Hold 'Em poker, which is a Zynga game. You and I will be playing poker
together at the same time. But most of the best social games we don't
play at the same time together. We're playing together, but I'm playing,
you know what at 8:00 in the morning and you're playing at 4:00 in the
afternoon, but we're seeing each others play and we're reacting to them.
Little bit like Fantasy Baseball works. You make your trades, I make
my trades. I see your trades, you see my trades, you see my stats. Fantasy
Baseball is probably the first social game.

Howard Lindzon:  Why so have made an investment in just fantasy sports. 

Fred Wilson:  We did actually back in Flatiron. We invested in a company
called…what were they called…ah I have drawn blank. It was one of
the top fantasy sports services on the Internet and we ended up selling
it to Sporting News.  [note: it was called Small World Sports]

Howard Lindzon:  Let's wrap up. Looking forward the next five years. 

Howard Lindzon: You know, speaking of to Michel Perrick who would built
it's IPO business in the '90's. He was telling me he is never been this
excited since '94, '95. 

Fred Wilson: Oh, he feels the environment for entrepreneurship today
is as good as it was 15 years ago. 

Howard Lindzon: The environment from tech in the sense of mobile apps
and access. He was laying his ground work when you know. You know he
did, you and nanny said, you know, you had the access. And then he could
see the vision like the 10 different layers of companies that were gonna
come public after that. IPO market's death. 

Fred Wilson: You know market. 

Howard Lindzon: Did ever comeback. 

Fred Wilson: No, no. The IPO market is not dead. 

Howard Lindzon: Well. I'm saying it's been dead. 

Fred Wilson: It been dead. But it doesn't mean it is dead. 

Howard Lindzon: No. Absolutely no. 

Fred Wilson: You know the conviction that I had around buying Apple
and Google, and Amazon last October, November. Is the conviction I have
about the IPO market. If the IPO market has stock, I'll be buying it
right now. It can only go in one place – up. 

Howard Lindzon: Yeah. 

Fred Wilson: And there is no way that there is not gonna be an IPO market. 

Howard Lindzon: Well I just think. I just think there is something common.
I don't know if it will be after the fall or next year or another year
away right now. Where people seeing what fresh company. This is, I'm
gonna start from scratch and I wanna buy the best of the best with this
new greater comp. that may have better controls. It may have, the SCC
may have better control. I'm not saying they will. But I'm saying, I
think there's gonna be a little bit of a turn there. And say you know
what, that were the best companies to invest. 

Fred Wilson: But. 

Howard Lindzon: But he was saying that mobile is the place to be for
that. 

Fred Wilson: But not just mobile. I think with the iPhone showed was
by creating a software based phone that was open. That people could
innovate on top of it with the SDK in an AppStore. Right were anybody
could create an app for the iPhone. Right? So what is, there is 10,000
apps for the iPhone, 15,000 apps for the iPhone. It's amazing. You know,
I wrote a post this morning about Boxee. And Boxee is, if you've created
an AppStore in you're set top box. That's basically what's Boxee is,
right. So I listed like 20 new TV channels that were build in the past
month on Boxee by hackers. Somebody wanted a TV channel for bass fishing.
Okay. 

Howard Lindzon: Ahuh. 

Fred Wilson: So they created the bass fishing app on Boxee. So there
is now TV channel for bass fishing. 

Howard Lindzon: And where does pulling shows from. Who's choosing the
shows? 

Fred Wilson: The web. You could create a StockTwits TV app for Boxee.
Right? And then that it would become a channel on the same way I add
the apps I want to my iPhone. People and whether it's Boxee or Apple
TV or Windows Media Player or some piece of software I haven't seen
yet. That's what gonna happen on the TV too. You gonna decide what channels
you want. The cable company is not gonna tell you what channels. 500
channels and you don't give a shit about. 

Howard Lindzon: So Boxee like a Firefox for television. 

Fred Wilson: Boxee, Firefox for television. 

Howard Lindzon: So it's Boxee.com. Is it? 

Fred Wilson: No, .tv. Boxee.tv. 

Howard Lindzon: Boxee.tv show. Is it still in like a private that you
have to get an invite. 

Fred Wilson: Next week, June 23rd. 

Howard Lindzon: June 23rd. 

Fred Wilson: In San Francisco. 

Howard Lindzon: In San Francisco. 

Fred Wilson: At a club called Mezzanine. 

Howard Lindzon: Mezzanine. 

Fred Wilson: It's gonna be an enormous. 

Howard Lindzon: Are you in San Francisco right now? 

Fred Wilson: I can't, I wrote a post about how bummed I am. I got. 

Howard Lindzon: I don't read your blog. 

Fred Wilson: You don't read my blog? 

Howard Lindzon: Yeah. 

Fred Wilson: You read my Twits? 

Howard Lindzon: No. I declared time bankruptcy yesterday. You'll hear
from my attorney. 

Fred Wilson: How long will have that for. 

Howard Lindzon: I have a time bankruptcy attorney. I don't know. It's
just a very tough problem. So you're gonna be, so Boxee launches. 

Fred Wilson: Boxee is doing a big launch party on June 23rd in San Francisco.
It's next Tuesday night at a club called Mezzanine. And it's gonna be
an amazing event. If I was in San Francisco, I would be there. But I
won't be. 

Howard Lindzon: Explain how this could change. I mean obviously there's
people think that Apple TV could do the same thing. 

Fred Wilson: Apple could do the same thing. 

Howard Lindzon: Okay. 

Fred Wilson: Apple did on the phone. 

Howard Lindzon: Right. 

Fred Wilson: They haven't yet done it on the TV, they might.  

Howard Lindzon: The show. 

Fred Wilson: They might. 

Howard: They might. But and if they do, there could be a place for two
browsers. 

Fred Wilson: Well, we still use the BlackBerry's. 

Howard Lindzon: Right. 

Fred Wilson: Just because Apple came up with the phone. It doesn't mean
they gonna, every single person in the world is gonna use the iPhone. 

Howard Lindzon: Yeah. 

Fred Wilson: There is usually 2 or 3 providers. 

Howard Lindzon: You're so geeky. So how I would I set up Boxee. If I
can get it. 

Fred Wilson: Oh, Boxee is, so Boxee is geeky. Right? 

Howard Lindzon: Yeah. 

Fred Wilson: Twitter started out with the geeks. 

Howard Lindzon: Right. 

Fred Wilson: That's where you gonna start 'cause those people who built
for the platform. 

Howard Lindzon: Right. 

Fred Wilson: So you gonna service them first. But this holiday season
there would be Boxee boxes in the stores. So you can go in the store
and get a Boxee box. And you could take it home, you connect it with
you TV which most of us can do. And you're done. 

Howard Lindzon: But I thought the whole idea was not to have a box. 

Fred Wilson: No, Boxee is not making the box. 

Howard Lindzon: I understand. But I thought the whole idea is you are
just getting the internet on your TV. Why can't that just happen. With
some guy with the. 

Fred Wilson: I think. I think within a couple of years. 

Howard Lindzon: App showing. 

Fred Wilson: I think within a couple of years what's gonna happen is
your TV. This thing right here that we're looking at is gonna have a
processor in it. It's gonna have Boxee and Front Row and Windows Media and a whole bunch of media browsers.

Howard Lindzon: Where you gonna get this clip through when you turn
on your TV. 

Fred Wilson: And you pick which one you wanna use 

Howard Lindzon: Just like remoting your computer. 

Fred Wilson: And boom.  Then you gonna watch it. So won't need a Boxee
box in 2 or 3 years. But today not every TV and you know not every TV
is gonna have that. You know consumer electronics business is, you know. 

Howard Lindzon: So what will be up if we create StockTwits TV programming.
Well, you'll be able to watch it on your machine or catch up later at
home. 

Fred Wilson: Well. Yes, if you create StockTwits app for Boxee then
I added it to my Boxee. Then when I logged in I see oh there is a new
show in StockTwits, boom, watch.  

Howard Lindzon: From your TV.  

Fred Wilson:  From your TV.  

Howard Lindzon:  It's pretty hot people. So your blog is at HowardLindzon.com.
Oh wait a minute your blog… 

Fred Wilson:  I actually did a domain take over. It is now HowardLindzon.com.  

Howard Lindzon:  So your blog…  

Fred Wilson: Its now (HowarSchminzon.com).  

Howard Lindzon: There is a fake poser on Twitter. And I think I know
who it is. Twitter doesn't return my calls. Howard (Schminzon).  

Fred Wilson: They don't return anybody's call. Don't take it personally.  

Howard Lindzon: I know. The blog is… 

Fred Wilson:  A V C  

Howard Lindzon:  Adam Victor Charlie dot com. And he's been blogging 
there since 1960? 

Fred Wilson: I was born in 61.  

Howard Lindzon:  Oh. So did you take it over from your parents?  'Cause
they do the who is. It seems like they go way back like… 

Fred Wilson:  2003. 

Howard Lindzon:  When did you know that you're gonna be a nerd? 

Fred Wilson:  Before they was… 

Howard Lindzon:  What the nerds do, like 10 years different? 

Fred Wilson:  I think I knew I was gonna be nerd when I was a teenager.
I got into computers.  

Howard Lindzon:  And what like that 1986 or even before that? 

Fred Wilson: No, my dad was a professor at the military academy West
Point and they had a computer center and some friends of mine, some
nerd friends of mine  and i would go down there and they let us in the
evenings and we could write code on these cool machines with this really
main frame type terminals… 

Howard Lindzon:  Right. 

Fred Wilson:  Thats when  I knew I was a nerd.  

Howard Lindzon:  And MIT. 

Fred Wilson:  Yup. 

Howard: And what's MIT like? Lot of chicks? 

Fred Wilson: No. 

Howard Lindzon:  … 

Fred Wilson:  When I was there maybe 15-20% of the student body was women.
Now I hears its pretty much 50/50.  

Howard Lindzon:  Did those women shave?  

Fred Wilson: No. 

Howard Lindzon:  MIT women do not shave. You heard it from Fred.  

Howard Lindzon:  And when did you started going out with women that do
shave? 

Fred Wilson:  When did I started going out with women who do shave? 

Howard Lindzon: Yeah. 

Fred Wilson:  I'm not gonna answer that question. 

Howard Lindzon: All right. 

Howard:  When did you meet the lovely Gotham? So your wife also blogs.  

Fred Wilson:  Gothamgal.com 

Howard:  And she got a new blog. It's nice. 

Fred Wilson:  It is. 

Howard Lindzon:  She blogs about food. So I generally read her blog more
than yours.  

Fred Wilson:  That's a great idea. You get at least get something to
eat when you read her blog. 

Howard Lindzon:  She got it down. So how does she put with you? How does
someone's, how long have you been married?  

Fred Wilson:  I will give an answer to that question,  in 2 words, stick
tolerance.  

Howard Lindzon: So there you have it. It's stick tolerance. I know that.
I know where that comes from. I have that same thing at everybody in
my life. They put up a lot of sticks. All right. So thanks first of
all for backing Wallstrip. 

Fred Wilson: It's was great.  

Howard Lindzon: And thanks for not helping that on StockTwits.  

Fred Wilson:  That's okay.  

Howard Lindzon:  Its helped a lot.  

Fred Wilson:  Good. 

Howard Lindzon: And continued good luck with the Twitter and all your
portfolio companies and we'll talk soon.  So avc.com Fred Wilson and
good luck today in the markets. All right thanks man. 

Fred Wilson:  All right.

Reblog this post [with Zemanta]
#VC & Technology

Building Successful Long Term Relationships

Twenty-two years ago today, the Gotham Gal and I were married. I've learned a lot in the twenty-seven years that we've been living together and much of those lessons have spilled over into my business life. I also have to say that observing my parents, who have been married fifty-two years now, provided a lot of learnings for me early in life that have helped me with my own marriage.

I thought today might be a good opportunity to talk about some of those lessons and how they impact how I approach building successful long term relationships in business. In my business, the most important relationships are those between my partners and me, and the relationships with the entrepreneurs we back and their teams. It's absolutely critical to get those relationships right and sustain them for the long haul.

A marriage is not an easy relationship by any means. The stresses of children, finances, families, and a shared living space (and many more) wears on the partnership and causes tension and friction. It takes work and a lot of communication to make it successful. But in addition to constant effort and communication, I think there are two other critical factors – tolerance and shared vision/values.

Rabbi Niles Goldstein told a joke in his last shabbat service at the New Shul. He asked a woman to explain the success of her marriage. And she replied "shtick tolerance". I've tweeted and told that joke a few times publicly since hearing it a few weeks back. I like it very much. I know that my shtick gets old and nobody has heard it as much as the Gotham Gal. She knows how to mute it. And I can do the same with hers (and yes, she has a shtick too). Tolerance is critical to a successful long term relationship. You need to be able to tune out certain stuff that gets old and let it pass you by without getting annoyed or upset. I've had to work hard on that and it has paid dividends in both my marriage and my business life.

Even more important are shared values and vision. Milton Pappas, the man who taught me more about venture capital than anyone else also taught me a lot about marriage. When we got married, I was working for Milton. When our first child, Jessica, was born, he told me, "make one night a week date night. do it every week without fail. and when you are alone, don't talk about the daily grind, talk about your hopes and dreams, what you want to do together and what you will do together". That was very sage advice. I must admit that I don't practice it enough, but I do practice it (like many things in my life).

Tolerance and shared vision/values are critical in business as well. This past thursday night, I talked to Prof. Ari Ginsberg's class at NYU's Stern School Of Business. In the Q&A after my talk, a young man asked me "when you are in competition for a deal, how do you win the deal?".

I replied that we compete on cultural fit and shared vision/values. I explained that we don't compete on price, terms, "value add" or any other of the typical things VCs talk about. We focus on building a relationship with the entrepreneur that makes them comfortable with us and that convinces them that we will have tolerance for their shtick (and man do entrepreneurs have shtick). And most importantly we talk about their hopes and dreams, how they plan to get there, and why we share those hopes and dreams and want to help them achieve them. That is the only way I know how to win a deal and it works when both parties are sincere and open and honest with each other.

Like a marriage, a venture investment is a long term relationship. None of mine have lasted twenty-two years and none will be as important as my marriage. But if you treat them like a marriage (on both sides) and work hard at them, communicate early and often, are tolerant, and most importantly share your vision and values, it can be a very rewarding experience, both emotionally and financially.

Reblog this post [with Zemanta]
#VC & Technology

Why I'd Like To Be In SF On June 23rd

If there was one event I'd like to be at next week it would be the "people's choice awards" on Tuesday night at 7pm at Mezzanine in San Francisco. It's actually not called "the people's choice awards", it's called the Boxee Dev Challenge.

But I call it the "people's choice awards" because Boxee is going to show what happens when you let the viewers determine what channels they want on their TV. Instead of the "500 channels and nothing's on" programming that the cable companies deliver, Boxee is going to show what hackers working on open source software for your TV can do in less than a month.

Here's a taste of it:

The Amie Street channel
The Any Clip channel

The We Are Hunted channel (my personal favorite)
The National Film Board channel
The WatchUWant channel
The PokerStars channel
The Twitter channel
The Movie Times channel
The Local Video channel
The Radio Controlled Devices channel
The ABC7 News (KGO) channel
The Twitter/YouTube/News channel (another favorite)
The Videogames channel
The BBC channel
The Mozy Backup Your Media channel
The Ethnic TV channel
The I Can Has Cheeseburger channel
The Cobra Snake channel
The Open Courseware channel (talk about hacking education!)
The UK Open University channel
The L8R channel (watch later project)
The C Dans L'Air channel
The Bass Fishing channel
The Boxee Queue channel (watch later project)
The Weather channel
The Daily Kitten channel
The HotForWords channel
The Guild channel
The Facebook Photos channel
The Drop.io channel
The White House channel

and that is just what has been submitted so far. There's another five days left in the contest so I expect the final list will be twice as long.

Imagine if your set top box had an "app store" like the iPhone has. That's what Boxee is all about. You put Boxee on your TV and let hackers around the world build channels and you pick which ones you want on your TV.

That future vision will be on display full tilt next Tuesday night in SF. If the turnout is anything like the Webster Hall Boxee meetup this spring in NYC, it will be one hell of a fun night. And so I am totally bummed that I can't be there. I hope you can.

#VC & Technology

Disqus Is Growing and Hiring

Our portfolio company Disqus, which provides the comment system on this blog, has been growing like a weed for the past year and a half and has now reached the point that it needs to hire some additional tech resources. It is amazing what the small team of the two founders, Daniel and Jason, and a couple of additional developers has been able to do. But everything needs to scale at some point, including the team.

Disqus is looking for three technical hires in the bay area:

– A front end developer who can work in javascript
– A senior back end developer who can work in Python/Django
– A systems/server engineer to keep it all running smoothly

The detailed job descriptions are here. If you are interested or know someone good they should go after please email me or [email protected]

Daniel and I appreciate everyone's help with this. Disqus is a great company which is starting to break out and it is a great place to work with nice upside.

Reblog this post [with Zemanta]
#VC & Technology

Clearing Something Up

If you search my name on twitter, you'll see a gazillion tweets that say something like this:

Fred Wilson predicts Twitter will be a bigger traffic source than Google for many websites within the year

But, of course, that's not what I said. It's what Erick Schonfeld says I said at the 140conference yesterday in a post on TechCrunch. Now I know that we aren't supposed to believe what is written on TechCrunch and I certainly don't but I fear that many people still do.

So let me be perfectly clear about this. I said social media, led by Facebook and Twitter, will surpass Google in driving traffic to many websites sometime in the next year. The tweets in this stream validate that. Erick was in the audience but so were most of those twitterers.

Or we could just look at Jonny Goldstein's wonderful notes he took during my talk.

3633576060_5406a88f09

Ok, now that I've gotten that off my chest, I'll return to the regularly scheduled programming.

Reblog this post [with Zemanta]
#VC & Technology

How Are We Signing Into This Blog?

A week ago I sent Daniel Ha, founder and CEO of Disqus, an email asking him to pull some stats from this blog's comment service (which disqus powers). I wanted to know the breakdown of commenters for the previous two weeks and how they logged in to comment.

Here is the data:

TOTAL COMMENTS:

Facebook Connect: 44
Guest (anonymous): 125
Twitter Sign-in: 130
Disqus Profile: 888

TOTAL UNIQUE COMMENTERS:

Facebook Connect: 33 people (avg: 1.3 comments / person)
Twitter Sign-in: 78 people (avg: 1.6 comments / person)
Guest: 125 people (avg: 1.0 comments / person) 
Disqus Profile: 362 people (avg: 2.4 comments / person)

The dominance of the disqus profile should not be surprising since I've been using them for almost two years now and most of the frequent commenters on this blog have a disqus profile.

But the rise of Facebook Connect and Twitter Sign-in are impressive. I've had Facebook Connect for a few months and I've had Twitter Sign-in for the past month. In a short period of time, they have taken over guest logins and are generating significantly more engagement than a guest login.

My hope is that guest logins start to fall away. This blog will always support a guest login for commenting (and over the weekend guest logins got the ability to subscribe to a comment thread). But I feel that people who comment with a real profile are generally more thoughtful with their comments and it creates a stronger community.

I'm also pleased to see Twitter sign-in doing so well. I've tried commenting via Facebook Connect and Twitter sign-in and I think the latter is much simpler. So it's not totally surprising that it's doing a little better on this blog. Both are strong products and I expect when and if I do this query in a year from now, we'll see both Facebook Connect and Twitter sign-in with even more penetration than they have now.

I'm curious to hear all of your thoughts on the sign in process, the new options from Facebook and Twitter, and what more you'd like.

Reblog this post [with Zemanta]
#Weblogs

The "Watch Later" Project

In the talk I had with Scoble a few weeks ago, I said the following:

What I want is a video plugin, where I have a little thing on my
browser, anytime you e-mail me a link and I see it in Gmail or you pass
a link to me in Friend Feed or Twitter, or I see a link in Facebook, or
I come across a video, I just want to bookmark it. But what… I really
want [is] to … queue it. And then, after I get home at
night, after … dinner with the kids and homework, that
hour-long time that I have where I sort of lean back, linear video, I
just want to go to my queue which I've built up over the past day or
two and just boom, sit back and watch linear video, watch this video,
and then the next thing is some funny clip somebody sent me and then go
watch Charlie Rose

[note – thanks to the simulscribe api for this transcription]

I've been saying this to anyone who will listen to me for the past six months. I've got Boxee on my big screen in our family room and when I am home at night, I'd like to fire up Boxee and watch all the video I've come across on the Internet but did not have time to get to.

The crazy thing is the same day the talk with Scoble was published, I got my wish (sort of). A developer named Monsur Hossain submitted a tool called BoxeeQueue to the Boxee App Competition. BoxeeQueue does exactly what you think it does. There's a bookmarklet that you add to your browser and you send video to a queue that is actually an rss feed in Boxee. I used BoxeeQueue over the weekend to watch some video and it works well.

But just as quickly as BoxeeQueue showed up, we've got a horse race going. My friend Daryn launched L8R which works via delicious. You simply tag videos with the L8R tag in delicious and they show up in a Boxee app Daryn built called L8R. I did not get to check out the L8R app this weekend, but L8R also has a web app and here are the videos I've queued up to watch L8R 🙂

But Daryn and Monsur are not the only people working on this problem. The comment thread to the Scoble talk mentions a few more and I'll be trying them out as they launch.

For the record, I don't think anyone has yet "nailed it" in terms of what the "watch later" tool should do. Here are the requirements as I see them:

1) Both a bookmarklet and extensions for the browsers that support extensions

2) You should be able to right click (or control click on a mac) on any link and have the video behind that link added to the queue. You should not have to click thru to the page to add something to the queue.

3) The queue should be available as a web app (as L8R has done) but also as an app on every media browser or media player out there. Boxee is a great place to start and I sure hope everyone starts there since its an open platform built from the ground up for something like this. But the queue should be available on xbox, playstation, wii, roku, appletv, windows media center, etc, etc.

4) There should be mobile apps for the iPhone, Blackberry, Pre, Android, Windows Mobile, etc. And it would be great if the mobile apps cached at least an hour of video so you can use the "watch later" app when you are not connected.

Since this "watch later project" is being done out in the open, I'd love to hear all of your thoughts on additional features this tool should have and also please let me know about any other groups, companies, developers working on this. I am sure there are a bunch out there. I'd like to compile a comprehensive list and publish it here.

UPDATE:

Here is another service I learned about yesterday

Vodpod, Vodpod FF extension here

#VC & Technology

Give Bing A Chance

I'm not optimistic that Microsoft's new Bing search service will be able to displace Google as the king of search, but I am going to give it a chance. I think the biggest challenge is not convincing users that it is better (or even as good). I think the biggest problem is erasing our collective muscle memory that causes us to go to google whenever we want to search for something on the Internet.

So I've taken the step this morning of installing the "official" Bing firefox add-on which puts Bing into the search box at the upper left of Firefox. And I've also moved it up to the top of the list of search engines I use in Firefox. I will use Bing as my default search engine for the next week and see how it goes.

I'll report back next weekend on how this experiment works out. And I encourage all of you to do the same thing and let us know how Bing is working for you too.

#Web/Tech

Nanomedia

Fredwilson I have an internet radio station called fredwilson.fm. You can listen by clicking on that link or by clicking on the black banner at the bottom of this blog.

I add one new song each day and so when you listen to fredwilson.fm, you are listening to my favorite songs (mostly new stuff that I find on the web) in reverse chronological order. That's it. Pretty simple and very easy for me to program.

As Internet radio services go, fredwilson.fm is tiny. It averages around sixty listeners per day and gets around 1,300 visitors per month.

Fredwilsonfm stats

Fredwilson.fm is a perfect example of nanomedia. The service has a tiny audience and will never amount to anything other than a hobby of mine. There may be some hardcore fans of fredwilson.fm, but they are measured in the tens, certainly less than a hundred. It will never be a commercial property. It will never run advertising.

So it's easy to ignore services like this. And many do. But those who do miss a very important point about nanomedia. Each service in its own right is borderline meaningless. But the aggregation of all of these nanomedia services are a big deal.

My friend John Borthwick and I were interviewed by Seth Goldstein a few weeks back at his social media bootcamp. The video of that interview is here. I asserted then that "the aggregation of all of this social media is the greatest media that has ever been created."

Let's keep looking at music blogging (which is what powers fredwilson.fm). My stream and your stream and your friend's stream might not get much of an audience. But when you combine them all together as the Hype Machine, elbo.ws, and We Are Hunted have done, you get music services which start to amass sizeable audiences.

On the open web, services get built on top of services. Fredwilson.fm is built on top of Tumblr and Streampad. Hype Machine and Elbo.ws are built on top of services like fredwilson.fm. As we move up the aggregation stack, we start to assemble larger audiences. And then a song like the Velvet Underground song, Pale Blue Eyes, I posted to fredwilson.fm a while back can get more plays (1505 as of right now) than the total number of visits fredwilson.fm gets each month.

The new media is a disaggregated medium, where the channels themselves may be small but the microchunks that flow out of them can be very large. And that's why nanomedia is important.

#My Music#VC & Technology#Web/Tech#Weblogs