Posts from November 2011

I was on the phone with an elected official the other day. He said "we have to do something about this theft that is occurring." I lost my cool. I told him that if he was going to use that word we could end the call. He was shocked that I got so upset with him. 

It does upset me that lobbyists in Washington are positioning copyright infringement as theft. Cam MacRae left a comment on this blog last weekend that explains it well.

You're talking about copyright infringement, not theft. 

Theft, in plain english, is defined as the dishonest appropriation of property belonging to another with the intention to permanently deprive. Stealing is the act of theft.

Copyright infringement is not theft, although some copyright infringement is criminal. In each case the remedies are different.

Theft, stealing etc. are terms co-opted by a particular lobby for their emotional weight, but have no place in any rational debate.

Well said Cam. 

One of the things we try to avoid in our investments is gatekeepers. We would prefer that a company has easy access to end users and doesn't need to navigate through a gatekeeper or a series of gatekeepers to get into the market.

Mobile internet investing has been tricky for as long as I have been doing Internet investing. Initially it was the carriers and handet manufacturers who controlled access to the end user. If you wanted to be in the mobile internet business, you spent your time working with carriers and handset manufacturers to get distribution. We didn't like that business and didn't invest in it.

With the advent of the iOS app store model, we saw a change in the market and changed our stance. To date, we have at least a dozen investments where mobile apps represent an important part of the user base.

But in the past ten days, I have seen three different situations, not just in our portfolio but with companies I've met with or know well, where the company's app was either not approved or pulled from the market. This is not limited to the iOS app store. It has also happened in the Android marketplace. And of course, we have seen RIM's removal of a Blackberry app create great harm to a portfolio company.

These actions are always taken in attempt to enforce terms of service and to protect end users. I am not complaining about the actions or saying they are unfair. They are what they are. But the mobile Internet is not the open web and may never be.

Welcome to the new boss. Same as the old boss.

I came home on thursday evening to find some leave behinds from a board meeting the Gotham Gal had been at earlier that day. She's an angel investor in little Bits. I ripped the box open, sat down at the dining room table, and started having fun building simple electronic circuits. The Gotham Gal grabbed my android and filmed it.

If you want to get one of these little Bits sets, you can find out how to do that here.

When Amazon opened up pre-orders for the kindle fire, I bought one immediately. I received mine on Tuesday and I've been playing with it for a few days. So I thought I'd post a few thoughts.

A lot of what you think of kindle fire will depend on what your use case is. If you are looking for a less expensive iPad, then this is not for you. But if you, like me, are looking for a kindle with a browser on it, this could well be the device for you.

My biggest frustration with the kindle is that I can't jump out of the book and do a quick map lookup, wikiepedia lookup, google images lookup, etc. I blogged about that a few months ago. I've solved that problem by moving all my reading from the kindle to the kindle app on the iPad. But the 11" form factor of the iPad isn't ideal for me. I like something a bit smaller for reading on the couch, plane, or in bed. So that is why I hit the pre-order button immediately when Amazon announced kindle fire.

A number of critics have said that kindle fire is slow. I have not experienced that very much. It seems plenty snappy for me. Again, I'm mostly using it for reading and light browsing. I am not doing email on it. I am not doing spreadsheets on it. Graphics rich applications like Google Maps do seem to be slower on the kindle fire though.

So with all that said, here's a quick tour. The main screen is what you'd expect. Navigation and apps.

Just a word to the wise. Those Twitter and Facebook apps are web apps, not android apps or kindle fire apps. One of the things I don't understand is why the kindle fire doesn't run android apps natively. I think that's a huge mistake on Amazon's part. The Netflix app is a native kindle fire app.

The best part of this device is the kindle functionality. This is a kindle with an OS and a modern browser. Here's the book library and the book reader.

As a book reading device, kindle fire works great. It is heavier than a kindle, about the same weight (I think) as an iPad. But because it is a smaller device and the same weight, it feels heavier in the hand. That said, I do not have any issue reading on the kindle fire for long lengths of time (same with iPad).

The browser great for reading. Here's the Gotham Gal's blog on the kindle fire.

I do have a few issues with the way Google Maps works on the Kindle Fire browser. It seems less functional and a bit slower.

In addition to books and web, the kindle fire has tabs for newstand, music, video, docs, and apps. The only tabs that interest me on that list are apps and videos. I use the web to access everything else on that list (and much of the video I watch is also on the web). I used kindle fire to watch a youtube video in full screen mode on the treadmill this morning and it worked great (with headphones on).

The app store looks like this. It is pretty sparse right now from what I saw.

Amazon Prime Instant Video is a pretty awesome service. We use it a lot in our home on our mac mini (sure wish it was available on Boxee). Here's what that service looks like on the kindle fire.

So that's a quick tour of the kindle fire. I think it will replace the iPad next to my bed as my primary reading device. It's smaller and fits better in the hand. And while it is not much lighter, it still feels like a better reading device. The browser works fine. I can jump back and forth between reading and browsing easily.

It will be interesting to see how the rest of the family reacts to it. I will put it on our family room coffee table for a few days next to the iPad and see what the rest of the family thinks. If I learn anything interesting, I will report back.

Bottom line – if you are in the market for a kindle or a new kindle, consider this. If you are looking for a less expensive tablet, this is not a good choice, at least yet. I think the android tablets are a better choice for that.

Additional reviews:

Mossberg on Kindle Fire

Pogue on Kindle Fire

We have a portfolio company that will remain nameless that does something I want to call out as super awesome. Every board meeting, as homework after the meeting, they ask each board member to fill out a simple Google Form with two questions; three things we are doing well and three things we need to do better. They've been doing that every board meeting that I've been to.

They use this information as part of their continuous feedback loop to improve their management of the business and in turn improve the business. Based on their progress since our investment, I'd say it works pretty well.

This is one example of a larger theme I am noticing in our portfolio and the startup world at large. Companies are using simple web tools to get continuous feedback on their performance. They are using this kind of approach to do performance reviews of everyone in the organization, they are using this kind of approach to get feedback from their customers, and they are using this kind of approach to get feedback from their Board, investors, and advisors.

This makes a ton of sense. Startups are rapidly changing systems. If you use an annual review cycle, you aren't getting feedback at the same pace that you need to adapt and change the business. Doing this kind of thing continuously matches the frequency of the feedback loop with the frequency of the business.

I've written in the past about continuous deployment and how I have seen that work really well at some of our portfolio companies. Continuous feedback leverages many of the same principals and has many of the same advantages. If you haven't tried this approach, you might want to. From what I've seen, it works.

In a week when those in Congress are contemplating messing around with the it (I had stronger language but thought better, I'm pissed), my partner Albert lays out a great post on the architecture of the Internet and the history of wide area networking protocols.

The work Bob Kahn and Vint Cerf did back in the 70s laid the groundwork for all that we have today:

This idea was first put forth in the early 1970s byBob Kahn.  After setting out crucial core principles of “open-architecture” such as no global network control (i.e., a distributed system) and only requiring best effort (i.e., no guarantee of delivery), Kahn worked with Vint Cerf on coming up with a protocol.  Their incredibly productive collaboration results in a first version of what became known as the Transmission Control Protocol (TCP) that allowed for reliable information transmission and still adhered to the core principles of an open archtiecture.

 A short while later they realized that TCP was too comprehensive and it was broken up into two pieces which became widely known as TCP/IP where the IP stands simply for Internet Protocol.  The Internet Protocol defines what an address for a computer on the network looks like and how those addresses are used to route packets from one computer to another along a path of potentially many intermediary points.  Those addresses are known as IP addresses.

Vint Cerf is now at Google and he spoke out on the bills in Congress yesterday:

"Even our own government is beginning to go overboard in the protection of copyright"

“The open ability to develop new applications and try them out has been vital to the Internet’s growth and to the space in which we currently operate. It has interesting ways of enhancing both sides of the equation.”

“Remember, governance is a big word that includes human rights, freedom of speech, economic transactions on a worldwide basis — it touches everything. It’s everywhere, and that’s why Internet governance is topic A in many corners.”

Topic A here too at AVC. More to come. I'm still pissed.

UPDATE: Just saw this letter dated today to Congress from many of the largest Internet companies in the US.

We got so many ideas for this Business Arcanery series on MBA Mondays that I'm not going to do it as a series. I am going to do one of these every month. There is enough business arcanery out there that I could do a years worth of weekly posts without running out of material.

We'll start with the term "going concern." What the hell is a going concern?

From InvestorWords.com, "going concern" is:

The idea that a company will continue to operate indefinitely, and will not go out of business and liquidate its assets. For this to happen, the company must be able to generate and/or raise enough resources to stay operational.

Going Concern is an accounting term that makes its way into business jargon because it captures an important concept – "will the business be around for the long term?" A going concern is a business that has the cash and other resources to sustain itself. It can also be a business that has very little cash and assets but has strong and repeatable cash flow.

Accountants are required to assess whether a business is a going concern as part of issuing an opinion in an audit of a company's financial statements. I believe (but may be mistaken about this) that the business must have enough cash on hand to sustain lossses for at least the next twelve months to be considered a "going concern."

Many of our portfolio companies are not going concerns. Most startups are not going concerns. That explains the bags under most entrepreneurs' eyes. Startups are often operating at the edge, with the hope that customers or investors  (or both) will come through and keep them operating.

There is no shame in failing to obtain a going concern opinion, at least in my eyes. We work with such companies all the time. I suspect every great company wasn't one before they became one.

But it is important to understand this concept. And when you are doing business with a company, it is helpful to understand whether they are a going concern or not. If they are not, make sure to get paid quickly because they might not be around much longer. And if your company is not a going concern, you should expect vendors to be more antsy about getting paid because they are doing the same calculus that you are.

The purpose of this series on Business Arcanery is to decode business code words. Going Concern decodes into "are you going to be in business long enough to pay me?"

This coming wednesday, when you visit AVC, you will see this image over the AVC logo:

That's because we are going to participate in American Censorship Day. I'm hoping that thousands of web sites will be showing this message over their logo that day in a coordinated protest over the SOPA and PIPA bills that are currently before the House and Senate.

Nov 16th is the day that Congress will hold hearings on the idea of putting in place a series of legal mechanisms that will be the first coordinated set of changes to Internet law to effectively allow for censorship of the Internet here in the US. It's a slippery slope from there. 

If you aren't aware of what is at stake, please take a minute or two to watch this video.

PROTECT IP Act Breaks The Internet from Fight for the Future on Vimeo.

 

If you operate a blog or website, I hope you'll join in this protest on wednesday. Here's how.

I interviewed Dennis Crowley yesterday at the NYU Entrepreneurs Festival. I tweeted out the livestream so I'm sure some people were able to catch it live. I hope they put the video up soon because Dennis was great and I think people will get a lot of value out of his thoughts on entrepreneurship, startups, and building a product and a company.

But this post is about something Dennis said about product roadmaps that really struck me. Dennis said that all the way back to Dodgeball, the predecessor company to Foursquare, he and Alex had a roadmap for the product that was years ahead of what they could actually build. When Dennis and Naveen decided to start building Foursquare, Dennis pulled out that roadmap and updated it to reflect the power of modern smartphones. And that roadmap goes way out, well beyond what Foursquare is today or what it will be in a year from now.

So when I asked Dennis about the moment when the Foursquare team watched the Facebook Places announcement, he said "I got up and told the team that any company can copy what we have built, but we just have to go on and build the things we want to build because nobody else has that roadmap."

That is the power of a visionary founder leading a team to build the things that are only in his or her mind. I recall Mark Pincus, in the early days of Zynga, tell me about a game he wants to build someday. Zynga still has not released that game. When Jack Dorsey came back to Twitter, he said he was finally going to build Twitter 1.0. Think about that. And think about what Twitter 5.0 is in Jack's mind.

The best founders have these long roadmaps.  If they can stay engaged in their companies, they can realize them over extended periods of time. There are so many reasons why this doesn't always happen. Founders leave. Companies are sold. But when it all comes together, the result is magical.