Posts from VC & Technology

Everybody is wrong about something sometime.

And Umair has proven it with this post.

There are issues with the VC business for sure, but not the ones Umair talks about in this post.

Umair says about VCs:

they exist to sustain asymmetries (in information, resource, capital, etc)

That’s wrong.  VCs may do a lot of dumb things (like everyone else), but we don’t sustain anything.

We are in the business of investing in change.

Abnd have been since the industry was created.

And that hasn’t changed.

And won’t.

Chartreuse has an interesting post about the future of TV (not bullish).

Here is the most interesting part of the post:

How many people do you think it takes to produce The Abram Report on MSNBC?

It was watched in (on avg.) 215,000 homes per day last week.

Rocketboom was watched (on avg) in 200,000 homes per day last week.

Just like the music business, television has become economically unfeasable at it’s present size.

Saul Hansell has a story in today’s New York Times about Lloyd Braun’s new strategy at Yahoo!Media Group.  Lloyd is backing away from long form video and focusing on user generated content and "content acquired by other media companies".

Lloyd is quoted as saying:

"I didn’t fully appreciate what success in this medium is really going
to look like," he said. "This is not about creating one-off hits like
in my old business. That is not going to create a sustainable
competitive advantage over the long term."

Frankly this is a good thing. Nobody really knows what "this medium is going to look like". So weaving and bobbing is what is required right now.

But I’d be remiss if I didn’t point out that I saw this coming last September when I posted about another article in the NY Times about Lloyd Braun.  At that time, Lloyd was promoting this strategy:

"more immersive," "more engaging," and most of all, more "original programming"

I said in my original post:

My initial reaction was, "that’s not going to work".  Original programming isn’t really what the Internet is all about

Lloyd’s challenge, and the challenge of anyone coming from the
traditional content world, is to forget what they learned about
original programming.  That’s not where its at on the Internet.

The challenge is all about how to take the work of the masses and
assemble it into compelling content.  The company that figures that out
will do very well.

It’s good to see that Lloyd and his colleagues at Yahoo! are figuring that out quickly before they throw lots of time, energy, and money down a rat hole.

How do you elminate viral marketing?  Put a wall around your content.  Times Select shows how its done.

I get a monthly email from the New York Times with the ten most emailed articles.  It’s a very interesting list and is telling in many ways about what news is most important to readers.

It used to be at least half columns penned by their top columnists like Maureen Dowd, Frank Rich, Thomas Friedman, etc.  Here is a list of all of their op-ed columnists.

Well guess what?  Not one of them is on the top ten list anymore.  Of course.  Because they are barely read online anymore because of the crazy Times Select idea.

Here is the list of the top ten list for February:

Wednesday, March 1, 2006 Here are the 10 Most Read Articles on NYTimes.com from February. 1. White House Knew of Levee’s Failure on Night of Storm By ERIC LIPTON, Published: February 10, 2006 The Bush administration was alerted to broken levees and flooding in New Orleans hours after their collapse, documents show. 2. Fellow Hunter Shot by Cheney Suffers Setback By ELISABETH BUMILLER and ANNE E. KORNBLUT, Published: February 15, 2006 The downturn in the 78-year-old’s health significantly changed the tone of the White House reaction to the hunting accident. 3. Low-Fat Diet Does Not Cut Health Risks, Study Finds By GINA KOLATA, Published: February 8, 2006 A large study has found that a low-fat diet has no effect in reducing the risk of getting cancer or heart disease. 4. U.S. Reclassifies Many Documents in Secret Review By SCOTT SHANE, Published: February 21, 2006 At the National Archives, intelligence agencies have been removing from public access thousands of historical documents. 5. To: [email protected] Subject: Why It’s All About Me By JONATHAN D. GLATER, Published: February 21, 2006 E-mail has made college professors more approachable, but many say it has made them too accessible, erasing boundaries that had kept students at a healthy distance. 6. The Freshman By CHIP BROWN, Published: February 26, 2006 Rahmatullah Hashemi was the Taliban’s chief spokesman abroad. So how did he end up at Yale? 7. After Neoconservatism By FRANCIS FUKUYAMA, Published: February 19, 2006 A former neoconservative theorist argues that with the Iraq conflict, the ideology that won the cold war has come to threaten peace. Can a movement turn away from militarism and toward a more durable use of power? 8. Cyberthieves Silently Copy Your Passwords as You Type By TOM ZELLER Jr., Published: February 27, 2006 Software that copies users’ keystrokes and sends the information to crooks may be the next big trend in cybercrime. 9. No End to Questions in Cheney Hunting Accident By ANNE E. KORNBLUT and RALPH BLUMENTHAL, Published: February 14, 2006 The White House sought to explain why it took most of a day to disclose that the vice president accidentally shot a fellow hunter. 10. Some Democrats Are Sensing Missed Opportunities ADAM NAGOURNEY and SHERYL GAY STOLBERG, Published: February 8, 2006 Heading into this year’s elections, senior Democrats said that they sense they had failed to exploit Republican vulnerabilities.

Read it and weep Thomas, Maureen, Frank, and the rest of the gang.  Because your opinions aren’t flying around the web anymore.

I think I am going to start a videoblog.  I love to play around with new technologies and I got a taste of videoblogging yesterday.

One of my portfolio companies is having a company meeting next week and I was asked to attend and make some remarks.  I have to be in Arizona and San Diego next week for several conferences so I could not make it.  Instead the CEO of the company suggested I record a short video.

I got a $20 small tripod that fits on my coffee table in my office (pictured here) and connected The Gotham Gal‘s Sanyo Xacti to the tripod, flipped the LCD display so I could see it, and hit record.

10 minutes later I had my first videocast.  It’s not something I want to post for the world to see because it is my thoughts about that particular company, but the process was so instructive to me.

I am not sure what to videoblog about and how often I should do it. Your thoughts and suggestions are welcome as I figure that part out.

I’ve been involved in the birth of HD Radio for over seven years as an investor in and a board member of iBiquity, the developer of the HD Radio technology.  It’s been a long haul as it took years to get the technology endorsed by the FCC and even longer to get the broadcasters on board, and we aren’t done yet as more radios need to hit the market at lower price points and more programming needs to be rolled out for the new HD channels (but we do have a country station in NYC now! – 103.5 HD2).

The first sign of success is the growing ubiquity of the digital signal. 

This chart shows that over 700 radio stations are now broadcasting in digital and that number continues to grow on a very steep curve.

The broadcast radio industry is in the midst of its digital upgrade now.  And that is a very important first step in the conversion of radio from an analog technology to a digital technology.

The growing ubiquity of the digital channel is not without its issues and one of them is front and center in the Wall Street Journal today.  It used to be that small AM stations’ signals could be heard fairly far away from their core coverage area.  But when AM stations in the adjacent band upgrade to digital there is interference outside the core coverage area.  The answer is a digital upgrade but not all AM stations are doing these upgrades right now citing cost considerations, which are real for many small time operators.

The story goes on to explain that Leonard kahn, a long-time critic of HD Radio, has filed an anti-trust suit against iBiquity and some of its radio partners.

Clearly there are people who don’t like HD Radio and it’s impact on their businesses. I see that as an opportunity to improve the HD Radio system but I also see that as a sign that HD is showing signs of success. It’s about time.

Adam Lashinsky of Fortune Magazine has a piece on DEMO that is worth reading.

He really captures the pulse of the event.

I tried to blog my DEMO experience and posted a bunch of times while I was there.

Clearly there was a lot of the dating game going on.  Guy Kawaski’s quote in Adam’s story is the most memorable:

"It’s a great event, especially if you understand the dance that’s
going on: entrepreneurs acting like they don’t need capital, and
venture capitalists acting like they don’t need entrepreneurs," says
venture capitalist Guy Kawasaki. Participants’ behavior at Demo, he
says, is a bit like "acting prudish in a brothel."

But for me, it wasn’t so much about finding a company to invest in as it was a great way to see "the market" in a couple days.  Chris Shipley does a great job of assembling a group of companies that are very representative of the most exciting new areas for investment and you can really get a feel for what’s happening by spending a couple days at DEMO.

Another notable quote in Adam’s story comes from Tom Shields at Woodside Fund who said:

"A lot of these companies could get picked up by Yahoo for $30 million,
a huge success for the entrepreneur," says Tom Shields of Woodside
Fund. Selling a company for only $30 million, says Shields, "would be a
huge failure for me."

I understand that comment having lived through that exact experience recently with Delicious.  But we view Delicious as a great success, not a huge failure, and I think the venture business needs to figure out how to make an entrepreneurs’ successes their own.  If there’s a will, there’s a way.

I tend not to dwell on the past.  I try to look forward where there is opportunity.

This was a gift of my upbringing as an army brat.  Every June we moved to a new army base or a new town and I forgot all the friends I made and got ready to make new friends.  I am long on optimism and short on sentimentality.  That’s who I am.

So when I look at the lawsuit that CBS Radio filed against Howard Stern yesterday, I just shake my head.  Why focus on the past?  Stern was a huge money maker for many years for CBS Radio.  Surely he profited from the Sirius deal at the expense of CBS and maybe he took liberties that he shouldn’t have.  But who really cares?

What has to happen now is for Stern to figure out how to make money for himself and Sirius (and as a huge stockholder of Sirius I bet he’s focused on the big picture there).  And Joel Hollander and Les Moonves should focus on the future of CBS Radio.

Every ounce of energy that goes into this fight over the past (this sure looks like a divorce, doesn’t it), is wasted energy that should be going into the future.

Bob Lefsetz (my latest great blog find) says it best in his post:

As for Howard…  If you’re not listening to Sirius, you’ve got no idea
how good he is, as good, if not better, than ever.  But almost nobody
knows this, almost nobody talks about his show anymore, because as
stated earlier, almost nobody HEARS IT!  I’d say this is problematic
for Howard, but he’s gone on record that escaping the FCC was enough,
he doesn’t need everybody listening (not that I wholly believe that.)
But that’s Howard’s plight.  Terrestrial radio is a different ball
game.  They hold the cards.  They own the market share.  They own the
dominant incompatible format, just like Apple does with the iPod.  The
key is to CAPITALIZE ON IT!  Not to complain about what you once had or
what your competitors are doing.

Exactly.

Human capital is top of mind for me right now. We are seeing a return to the late 90s when really good people are the scarcest resource in the company creation process.

Jerry Colonna taught me a lot about developing people and one of his mantras was "hire from within".  His view is that if you have a worthy candidate inside the company that you know and trust, why would you go outside to fill the position.  And after thinking about it a lot over the years, I tend to agree with him.

But hiring from within isn’t really possible when you have eight employees and need to grow to twenty by year end.  And that is where many of our portfolio companies are in their development cycles.

But you can take the "hire from within" mantra to heart in this situation as well.  Your current employees are the best path to new hires you’ve got.  Way better than Craigslist, Careerbuilder, or any other job board.

I suggest three things that every CEO should do to take advantage of your existing human capital in the hiring process:

1 – Get everyone on LinkedIn and encourage them to actively use it "map" their personal networks.  Then when you want to hire someone new, ask everyone in the company to search their personal networks on LinkedIn for candidates.  There are other tools that can be used to do this, but I think that LinkedIn is a great place to start.

2 – Incent your employees to help you fill positions.  I think a "spiff" of $500 to $1000 per hire is a great way to get everyone focused on the hiring issue.  You should circulate every open job spec to the entire company (subject to the occasional hire that you can’t broadcast around the company).  And talk about hiring in the company meetings.  When your employees have an economic incentive plus are well versed in the specifics of the search, they can and do deliver great candidates.

3 – Always be recruiting "world class candidates".  Never stop asking your employees for ideas.  Every employee has former colleagues that they have tremendous respect for.  Do you know who those people are?  You should.

You can’t always hire from within but you can start the hiring process from within.  It’s the best thing you can do.