Posts from January 2012

A Post PIPA Post

On my way from a breakfast meeting to the office yesterday I got a phone call on my cell phone with a 202 area code on it. I picked up the call and on the other end of the line was someone in Congress who I've known for a decade or more. He told me that the Senate Majority Leader Harry Reid was going to pull the PIPA bill in about thirty minutes. He also told me that the technology/Internet community had done a great job fighting the SOPA and PIPA bills and that the fight was over for now. I thanked him for the call and then I told him that we need to find a different way to address the online piracy problem because otherwise the technology community was in for a game of whack a mole with the content industry every year or two with our elected officials getting caught in the middle. He agreed.

I'm not in the mood to celebrate in the wake of the news that SOPA and PIPA are dead. Because the online piracy issue is still very much on the table and the content industry is not going to just walk away from the it. And as I've said in most every post on this issue, I am sympathetic to their concerns.

I think what Anonymous did in the wake of the Megaupload shutdown is deplorable and I am not a fan of vigilantes and mob rule. In stark contrast,  I am extremely proud of the online demonstrations we all participated in over the past month to change the mood in Washington over the two bills. We showed that the Internet can be a medium for "peaceful demonstration" and we do not need and should not resort to stunts like Anonymous pulled this week.

I'd like to make a couple points about this whole SOPA/PIPA fight and then go on to where we go from here.

First, the Internet community's opposition to these two bills was never coordinated by a central organization. When my partner Albert first raised the alarm bells on what was then called COICA back in September 2010, we could not find anyone other than a few policy wonks who had this on their list of issues. Our industry does not have an MPAA or an RIAA. For the past 15 months we have been working with various individuals, a few companies, and a few advocacy groups to fight these bills. We found each other over the Internet, coordinated efforts (or not) over the Internet, and used the Internet to protect the Internet. The opposition was chaotic, distributed, diverse, uncoordinated and extremely effective in the end. Just like the Internet.

Second, these two bills were drafted by the MPAA and the RIAA and walked into Washington without an iota of conversation with the technology industry. I can't tell you how many Senators and Representatives have told me that they were told by the MPAA and the RIAA that the technology industry was on board and that these issues would not impact the Internet and tech community adversely. This is no way for one industry to propose that Congress regulate another industry. I think it is absurd that one industry would have the arrogance to think it is appropriate to ask Congress to regulate another industry for them. And yet that is what went down on these bills.

So where do we go from here? I think we should come up with an entirely new framework to think about online piracy. The PIPA/SOPA framework was litgation heavy and very invasive. It was "we are going to do this to you." It's not surprising the tech industry didn't like it one bit.

We need a new framework that is based on a shared set of goals and objectives. The tech industry will benefit if the content industry makes more money online. And though they seem not to believe it, the content industry can make a lot more money online. So we should be able to get alignment around that issue. We can help each other. The tech industry has already helped the content industy many many times. On that topic, I love this Nat Torkington rant:

All I can think is: we gave you the Internet. We gave you the Web. We gave you MP3 and MP4. We gave you e-commerce, micropayments, PayPal, Netflix, iTunes, Amazon, the iPad, the iPhone, the laptop, 3G, wifi–hell, you can even get online while you're on an AIRPLANE. 

So I've been busy over the past few days thinking about a framework that is based on a partnership between the content and technology industries. I have a bunch of ideas on this and I've heard a number of good ideas from others in the past few days as well. I have no doubt that a group of leaders from the tech community would be happy to sit down with the content industry and come up with an entirely new way to think about and address online piracy. But before that happens, the content industry, as represented by the MPAA and the RIAA, needs to understand that a litigation heavy invasive approach will not fly and they need to forget about that framework and come ready to come up with an entirely new one. I hope they can do that.


Fun Friday - Diet & Nutrition

In our last fun friday we talked about exercise routines. The discussion in the comments was terrific and many connected exercise to diet and nutrition, which is totally logical. So I thought we'd just move on to diet & nutrition as our next fun friday.

The way fun fridays work is I talk a little bit about my current favorites in a topic category (books, movies, music, exercise) and then I turn it over to all of you to discuss in the comments. It is fun and I enjoy these friday discussions very much.

When it comes to diet and nutrition I am blessed in the sense that I have a fast metabolism and I have always been able to eat whatever I want and not gain weight. I was thin as a rail in college. I've added a bit of weight since then, maybe 10% of total body weight. A fast metabolism is a good thing for me because, as many of you know, the Gotham Gal is a very good cook and food is a big deal in our household.

I grew up in a household full of people built just like me. Diet was never a big issue in our family. My mom's advice was always "moderation in everything." We always had sweets, sugar, fatty food, etc in our diets but we didn't eat a lot of it. We didn't eat a lot of anything.

Then one day when I was about 12, my dad came home and said that his doctor told him his cholesterol was too high. My dad takes stuff like that seriously and so he (and our entire family to a lesser degree) went on a low cholesterol diet. We cut back on eggs, red meat, fatty foods, etc. To this day I still think twice before putting anything like that in my mouth. But I do put "stuff like that" in my mouth. My guiding light is "do everything, but do it in moderation." I think my mom would be proud.

Living with the Gotham Gal for 30 years now has brought a whole different approach to food to my life. We always have food out in our kitchen. This past weekend we had a chocolate cake. Two nights ago it was homemade "Hostess Ding Dongs" in our kitchen. Both came from a friend of ours who just had to share her amazing creations. And they were amazing. We keep ice cream in the freezer, usually from some boutique gourmet provider. And it seems like we always have homemade chocolate chip cookies in the cookie jar. My kids' friends like to come to our house.

We eat dinner at home most nights during the work week. But we go out to eat a fair bit too. You can read Gotham Gal's blog to get a sense of it. Our family are foodies and I very much include my kids in that description. We eat pretty much everything and we enjoy food.

But that does not mean our diets are bad. The Gotham Gal has counted calories and fat in her food intake since long before I knew her. And our kids know how to count calories and what is good and what is not. My girls like to go on juice cleanses and my oldest daughter avoids fried foods and red meat in her diet (with an occasional steak just because).

So that's my approach to diet and nutrition. Which is basically no specific approach. I eat everything but try to do it in moderation. I try to avoid the bad stuff most of the time. But I let myself enjoy it every now and then. I just had my annual physical and my doctor gave me a clean bill of health. At age 50, that feels good.

So with that backdrop, I'd love to hear what all of you do.

#Food and Drink

Boxee Live TV

Last week I stopped by our portfolio company Boxee's offices to catch up with the team. On the way out, they gave me a "dongle" and an antenna to put into the back of the Boxee Box in the conference room in our office. I did that earlier this week and now we have live HD TV coming into our conference room over the air.

Boxee showed this off at CES last week and here's a short one minute video from The Verge showing how it works (with a 20 second pre-roll).

When I set this up in the USV conference room, the Boxee Box found 53 channels being broadcast in HD over the air. We have the basic broadcast channels, CBS, NBC, Fox, ABC, plus channel 9, 11, 13, and a whole bunch of other channels I never knew were broadcast.

If you don't have cable and are relying on the Internet for your video entertainment, this is a great way to get additional content for free. It reminds me of my childhood when we connected a TV to an antenna and turned it on and we were watching TV coming in over the air into our home.

The Boxee Live TV dongle and antenna will be available shortly. You can pre-order it here. You do need a Boxee Box to make this work.


Developer Conferences in NYC

I love attending developer conferences. That's where I meet the most interesting entrepreneurs. I'd rather go to PyCon, RailsConf, or Node Summit than TED, Davos, or SXSW. In fact, I've never been to TED, Davos, or SXSW and don't have any plans to go to them. But developer conferences are a different story.

Just last week the Node Summit folks reached out to me on Twitter and I replied back.


Node Summit is next week in San Francisco and I've got board meetings both days in NYC so I can't attend. Bummer. I'm certain that there are a ton of amazing things going on in the Node.js world that I'd love to learn about.

Which leads me to the point of this post. Why aren't there any developer conferences in NYC? Why are they always in the Bay Area, Austin, New Orleans, Atlanta, Orlando, or some other location? NYC is an amazing place to visit. There are great nightlife opportunities for post conference networking and fun. There's a huge web/tech community here. And plenty of people who could help make up a great program for developers.

I know that City Hall has a program to put together hotel deals and venue deals to bring conferences to NYC. I'm going to work with a group of folks I know to help change this. If you think it's a good idea and can help, please contact me. I'm fed up with saying no to the conferences I do want to attend.


The Management Team - While Building The Business

This is the third and final post on the subject of the management team. The final phase of company development I am going to cover is "building the business." Building the business largely means building the management team. They are one and the same.

Many founders are naturally talented at building product and building the user base. But building the company comes harder to them. I once discussed this with Roelof Botha and he made a fantastic suggestion. Founders should think of the business as yet another product they are building. It is the ultimate product they are building because from the company can come any number of additional products and any number of additional initiatives. The company, if built correctly, will be more important than any single product it can create. Think about Steve Jobs and all the amazing products he created. But Apple is the most important thing he created. So building the business requires a deep commitment from the founder. At the appropriate point, they must turn their attention to it and make it their top priority.

Let's quickly review the three stages so founders will know when they must turn their attention to building the company. The first stage is building the product. That is before product/market fit has been obtained. The second stage is building the user base. That is the period where you, either through organic growth or sales and marketing, build the user base to a level where you are certain you can build a long term sustainable business. Once you've built the user base to the point you know you can build a business, you enter the building the company stage.

As I said before building a company means building a management team. You start with a senior management team. You will need leaders for every part of the business. You will need a leader for your engineering team, you will need a leader for your product team, you will need a leader for your customer support/community team. You will need leaders for finance, marketing, sales, and business development. And to help you build and manage all of these people, you will need a experienced and talent HR leader.

Many founder/CEOs don't look for a partner to help them build the company. I think that is a mistake. The HR leader can be this person. But you need to recruit someone senior and experienced enough and make them an integral part of the senior team if you really want a partner to help build the company. I have also seen founder/CEOs recruit a strong number two, a President or COO, to help them with the company building piece. That can work too if the President or COO is a strong manager and team builder.

Companies are not people. But they are comprised of people. And the people side of the business is harder and way more complicated than building a product is. You have to start with culture, values, and a committment to creating a fantastic workplace. You can't fake these things. They have to come from the top. They are not bullshit. They are everything. There will be things that happen in the course of building a business that will challenge the belief in the leadership and the future of the company. If everyone is a mercenary and there is no shared culture and values, the team will blow apart. But if there is a meaningful culture that the entire team buys into, the team will stick together, double down, and get through those challenging situations.

Building a company is the most interesting work I know of. It is what every entrepreneur should set out to do. A company is a self sustaining entity that expresses the hopes, dreams, vision, values, and culture of the founder and leaders. It is an amazing thing and I have been blessed to watch a number of incredible companies be created.

Some startups won't reach this stage. That is the way it is. But for those that do reach this stage, I challenge all of you to step up to the work of company building with a passion and commitment for it. It will not be easy. It will be among the hardest things you will do. But the rewards are so great. Atoms and bits can be assembled to create fantastic things. But it is the things you build with people that are the most fulfilling of all.

#MBA Mondays

Scarcity Is A Shitty Business Model

The Gotham Gal has been under the weather this weekend. Last night we made soup for dinner and decided to sit on the couch and watch a movie and go to bed early. After dinner, we fired up Boxee and checked out Netflix. Nothing good there. Then we fired up the Mac Mini and checked out Amazon Instant Video. Nothing good there. Then we went to the Cable Set Top Box and checked out movies on demand. Nothing good there. Frustrated and unwilling and uninterested in heading to a "foreign rogue site" to pirate something good, we watched a TV show and went to bed.

Making movies is expensive and risky. I totally get that the studios need to make a lot of money on those movies to make their business model work.

But denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model. It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.

We would have paid good money to watch Sherlock Holmes or Tinker Tailor Soldier Spy. But it simply was not an option. So we went with a TV show that was free and then went to bed.

I am sure there was a time when scarcity was a good business model for the film industry. And I am sure that many of the leaders of the film industry came of age during that time. I understand their muscle memory in terms of the scarcity business model. But restricting access to content is a bad business model in the age of a global network that costs practically nothing to distribute on.

I've argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market. That just doesn't make sense to me. If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can't see how they wouldn't make more money.

I understand that many participants in the broader film ecosystem might do worse under this model. And I understand that moving to such a model will cause great disruption and pain to the broader film industry. But the studios themselves are likely to do better in a direct distribution model where they reach a broader market at lower effective prices to the end customer. This is what happens in digital distribution. Prices come down, markets expand, customers see lower prices and broader availability. Producers do better. Everyone else does worse.

But for some reason the fim industry doesn't want to move to the new model. They want to stick with scarcity. So they lost a transaction last night. And they lose transactions every night, to piracy, to competing forms of entertainment, and possibly to apathy brought about by frustration. Such a shame.


I Want AVC To Go Dark On The 18th

A number of popular websites will go dark this coming wednesday in protest of the SOPA and PIPA bills. Apparently Reddit, Minecraft, Craigslist and possibly Wikipedia will go dark. I want to join them.

I don't control my blog's web server. Typepad controls it. But I control my domain, I'm guessing the right thing to do is redirect where goes on the 18th. But where should I redirect it to?

If you have good ideas, please share them in the comments.

And I'd encourage everyone who has a blog do to do the same.

And I'd encourage Twitter, Facebook, Google, YouTube, Vimeo, eBay, Amazon, Etsy, Tumblr, WordPress and Typepad to go dark too. I know most of these services won't do it. They need to be respectful of their users' needs. But it would sure make a strong statement about the importance of the Internet and the danger of messing with it.


The Academy For Software Engineering

A number of years ago, I wrote a blog post talking about the need to teach middle school and high school students how to write software. In the comments (where the good stuff happens), a Google engineer told me to go down to Stuyvesant High School and meet a teacher named Mike Zamansky who had taught him to write code in high school. So I did that and thus begun my education into the world of computer science education in the NYC public high school system. What I learned was that other than Mike's program at Stuyvesant and a few other small programs, there wasn't much. So began my quest to see more computer science and software engineering in the NYC public school system. 

Yesterday I went up to the Morris High School in the Bronx to watch Mayor Bloomberg's State of The City Address. In a speech that was largely about the intertwined nature of education and the economy, he announced that the city is opening The Academy For Software Engineering this fall in the Union Square neighborhood of New York City. It was a proud moment for me and Mike Zamansky, who was seated next to me on the stage.

I want to personally thank the Mayor, his education team led by Dennis Walcott, and his economic development team led by Robert Steel for adopting an integrated set of technology, economic development, and education policies and then aggressively rolling them out city wide. The Academy For Software Engineering is just one part of a much bigger strategy of developing new industries and new jobs in New York City and making sure we have the education resources, both in K-12 and at the college/university level, to properly staff these new industries.

The Academy Of Software Engineering is not a "specialized school." It will be open to all students as part of the high school admissions process in NYC. The City's goal (and mine too) is to open up opportunities for many more students than the small number of specialized schools can deliver. Hopefully the curriculum that is developed and teachers that are trained at the Academy will get rolled out into high schools all over the city in the coming years.

The Gotham Gal and I have provided the initial financial support to hire a new schools team and recruit a top notch Principal. But we do not want to be front and center in this story. The team at the DOE and City Hall that has brought this school to life and the Advisory Board of educators and industry leaders (led by Evan Korth of NYU) should get way more credit for what has happened to date. And we will need more financial and industry support (as well as a fantastic Principal) to make this school a success. So if you would like to join us in this effort, please email me via the contact link at the bottom of this blog and let me know how you would like to help. This is an ambitious effort and we will need it.

#hacking education#NYC#VC & Technology#Web/Tech

Pseudonyms Drive Community

This will not be surprising to the AVC community but will certainly be a shock to the "real names" crowd. Disqus has shared some research they have done on three kinds of commenters; real names, pseudonyms, and anonymous commenters. Click on this link and check it out.

But if you are not going to do that, I will summarize the data:

– Pseudonyms lead to higher quality comments


– Pseudonyms are more engaged and active

Comments per user

Of course, nobody in the AVC community will be surprised. Kid Mercury, Fake Grimlock, JLM, LE, Panterosa, Prokofy, etc, etc, etc, etc, etc. We have tons of pseudonyms in action here and they enrich and enliven the community.

Props to Disqus for putting out this data. There are so many misinformed and uninformed people working in social media, even at some of the top platform companies. Hopefully this will cause everyone to think a bit more before forcing the real names paradigm down our throats.


Shapeways and 3D Printing

Last week, in the thread on Herky Jerky Investing, the AVC community forked into an incredible discussion about 3D printing and our portfolio company Shapeways. If you click on this link, you'll see that the conversation just goes on and on and on. Clearly 3D printing is something that has captured the imagination of many members of the AVC community.

We are huge believers in the power of technology to feed creativity and new kinds of businesses. 3D printing in general and Shapeways in particular is exactly that kind of transformative technology. It is still not on the radar of most people. But that is rapidly changing. To get a sense of how fast things are changing in the world of 3D printing, check out this prezi that Shapeways published on their blog yesterday (hint: go into fullscreen mode, it's way better).


#VC & Technology#Web/Tech