Posts from VC & Technology

With the venture capital and IPO markets opening up big time, everybody is an entrepreneur again.  That’s good news.

Everybody also wants to raise venture capital again.  That’s bad news.

Martin Tobias has a great post where he talks about telling three entrpereneurs in one day to avoid VC.  That’s pretty good.  A VC talking against his own game.  I like that.

I sometimes do a class at NYU’s Stern Business School called "Venture Capital, When You Need It, When You Don’t".  I make the point in this class that Venture Capital is the wrong source of capital for the vast majority of entrepreneurial ventures.

Here is the powerpoint I use when I teach the class.  If you are thinking about raising venture capital, give this a read and think hard about it before you start the process.

This week I am going to make fun of a commonly heard VC cliche.

I’ve been in quite a few board meetings over the years when things aren’t going so well and the Board goes into executive session (a code word for kicking the management out of the meeting). 

I should stop and say that executive sessions are good things for Boards to do, but let’s just call a spade a spade, they are designed to let the Board talk without management in the room.

Once the management is out of the room, someone, usually one of the VCs says, "What we need in this company is a world class CEO".

I used to sit there and agree.  But I’ve come to realize a number of things about the "myth of the world class CEO" as Jerry calls it.

1 – There isn’t such a thing as a world class CEO
2 – If there were, they’d be interviewing for the CEO job at Disney, not your little piss ant company
3 – A world class CEO isn’t going to fix a bad investment
4 – Many "hired managers" are good at operating but lack the passion, drive, and vision that founders/entrepreneurs bring to the table
5 – I’ve seen more world class CEOs (who weren’t world class or CEOs) screw up companies than founder/entrepreneurs

The next time I am in that executive session and someone uses that world, I am going to jump across the table and strangle them.  Then I am going to bring the management back into the room and tell them that we need some help, some "A students" to keep the trains running on time and support the "B students" that got us into this mess.

As to who has what title, that’s an important factor and time will tell what’s right, but really its about building a group of talented people that can function as a team and get the job done. 

There are no silver bullets in building a company.

I am home sick today, so what do i do with my time?

IM with our crack analyst Charlie about his decision to sell his GM stock after he left GM to join us, of course.

That led to a little fun with Yahoo charts which in turn led to Charlie’s blog post on the subject.

His post is great, so I won’t add anything to it other than a larger view of the chart.

His is too small for my 43 year old eyes.

Bill Burnham has an excllent post about software as a service being the preferred way that IT organizations buy software today.  I agree with Bill completely.

But I wonder if web services and the ease of integration that Bill talks about in his post are going to bring more change to the enterprise software business in the coming years.  Will IT organizations move to lower cost lightweight web services and just integrate them in order to get the functionality they get from their hosted software vendors today?

There was an interesting article in today’s New York Times business section by Saul Hansell on Landmark Theater’s decision to convert all of their projectors to this cool looking digital projector that costs $100,000 per theater.

Landmark is co-owned by Mark Cuban, so maybe this isn’t such a big thing.  Cuban believes in being digital after all.

But it got me thinking about the pace at which most media businesses convert to digital. I’ve lived through this in the radio industry where the broadcasters waited almost five years to adopt HD Radio and it was only when satellite started really hurting them that they did it. They did not embrace digital as something they needed to get behind quickly. They were forced to do it by competitive pressures.  And interestingly enough, the cost to convert a radio station to digital is about the same $100k that it costs to convert a theater to digital projection.

So back to the theater business.  Cuban isn’t converting his theaters to digital because the picture will look better (it will).  He’s doing it because digital changes the game.  He can now do short run movies cost effectively.  He can broadcast live events.  He can show movies that come straight from the camera to the screen.

These are the benefits of being digital.  Low cost, instant delivery, intelligence in the bit stream, network effects, etc etc.

Landmark will use these benefits to its advantage and change the game in the theater business.  I wonder if the big chains will wait five years until its clear Landmark is winning to react.

Last week I posted my frustration with Technorati.

I mentioned two big issues, link count wasn’t working, and my own posts were coming up in my results.

Sometime in the past week, they fixed both issues.

I don’t know if they fixed the service or just fixed my results, but now I have "546 links from 365 sources" and none of them are my own posts.

I still have my concerns about Technorati, but this is a great step in the right direction.  I’ll be watching closely to see if link count is fixed for good.

There’s this idea that’s "brewing" as John Battelle says about sell-side advertising or "open ad tags" as Jeff Jarvis calls them.  The idea is if you’ve got an ad, you just put it out on the net somewhere, tag it, and let the ad networks’ crawlers come get and run it wherever.

The critics claim this scheme is prone to massive fraud.  And I suppose that solving the fraud problem is a neccessary step in realizing this vision.

But I honestly believe we are headed in a direction where all the existing models get flipped and the power of the open internet gets harnessed in ways that we are just beginning to imagine.

So into this emerging/brewing ideaspace steps my friend Mark Pincus who is always at least one step ahead of me.  He takes it one further and says this flipped/open model is going to work for social networks too.  And he should know since he runs one of the largest social networks, called Tribe.net.

Mark calls it the PeopleWeb.  A great name like all of Mark’s ideas.

The PeopleWeb will open up the closed walls of the existing social networks and turn the web into one big one.  Mark’s got it right.  Go read his whole rant on the subject.

As we move from text (blogging) to audio (podcasts) and video (streaming video), we are missing what Jeff Jarvis calls "link love".

Links are the currency and the lubrication of the online world.  They are huge.

And they are missing from audio and video content today.

I love my podcasts, but generally really want to link to a very specific part of the podcast (5:33 into it when the joke is told or the song is played).  And I can’t do that.  And it’s incredibly frustrating.

You can imagine the mixed emotions I felt when I saw the news on Curbed that someone is doing Kozmo again.

This time it’s called Max Delivery.

My first reaction was "great, when can I sign up?"  The Gotham Gal and I were huge Kozmo customers and I suspect we’ll be huge Max Delivery customers too.

My second reaction is to offer them some advice.

1 – Don’t raise venture capital

2 – Stick to New York City

3 – Keep the number of SKUs manageable

4 – Don’t do any big real estate deals

5 – Don’t take money from big strategic partners

6 – Don’t become the cover boy for Web 2.0

This can be a great business if its done right.  Most people don’t realize this but Kozmo made money in NYC.  It was the 18 other cities that brought the company down.

Good luck Max Delivery.  I am rooting for you.