Posts from New York Times

What Is The Net Native Model?

My partner Brad is fond of reminding us at USV that taking the offline model for something and porting it to the web is not often the best way to build a business online.

John Markoff's piece in the New York Times on online education got me thinking about that this morning. MOOCs are all the rage in the online ed world these days. And most of the MOOCs I have used remind me a lot of the traditional classroom model of teaching. The question I am noodling is if there is a better way to teach when you have tens of thousands of people wanting to learn something that you can teach them.

John contrasts the MOOC model to our portfolio company DuoLingo in his piece. He says:

there are early indications that the high interactivity and personalized feedback of online education might ultimately offer a learning structure that can’t be matched by the traditional classroom.

Although DuoLingo was built by one of the most popular teachers at Carnegie Mellon, there are no teachers in their learning model. It's all software, content, and users. Now maybe language learning is easier to teach this way than other things. I don't have a fully formed opinion on this. I am just thinking outloud.

But what we have seen over and over again is that taking a model that was optimized for the analog world and porting it to the internet is almost always suboptimal. And that the person or team that finds the optimal model for the internet is almost always the one who ends up with the big win.

And I think that will be true in education as well.

#hacking education

Demand A Plan

Regular readers of this blog know of my great admiration and appreciation for the work of our NYC Mayor Mike Bloomberg. One of Bloomberg's signature issues has been gun safety. When you ask Mike about this issue, he tells you that after a few visits to the wives and children of NYC police officers who have been shot and killed on their job, you get pretty worked up about this issue. And worked up he is.

Bloomberg and many of the urban mayors around the country have created the Demand A Plan organization to fight for gun safety. It is currently the leading gun safety group in the US.

Many leaders in the Internet/tech industry have been working with Demand A Plan over the past few days to kick off a large and sustained social media and regular media campaign to pressure our leaders to do something about the gun safety problem in our country. I have been involved in this effort and I support its goals completely.

Here are a few things that are launching today:

1) A full page ad in the New York Times which I have signed personally

2) A viral social media campaign at the Demand A Plan website

3) Change your twitter avatar (I changed mine)

I will update this post with additional efforts that launch today. Like the PIPA/SOPA efforts last year, this effort is diverse, distributed, chaotic, and hopefully effective and powerful. I am not aware of everything that is going on right now. There is a lot of activity out there. But I will try to stay on top of it today and keep you all up to date as well.

In addition to our Mayor, I would like to thank Ken Lerer, Ron Conway, and Eric Hippeau for their excellent leadership of the tech sector's work on this issue in the past few days.

#Politics

Bypassing Wall Street

Ron Lieber has a column in today's New York Times called "A Financial Plan For The Truly Fed Up" where he lists some alternatives to investing your savings with the banks and brokerages that make up Wall Street.

His roadmap is basically what the Gotham Gal and I have been doing since the aftermath of the financial market meltdown in 2008. We invested pretty heavily in the stock market as the market was melting down in 2008 and I blogged actively about that here at AVC. But we took our gains early, in the first half of 2009, and then have more or less stayed out of the stock and bond markets since then (we do use our portfolio company Covestor's service).

We are in cash, real estate, venture capital, and private investments centered around our neighborhood and city (retail, restaurants, etc). Other than cash, we are invested in things we can touch and/or impact and understand.

As Ron talks about at the start of his piece, the never ending blowups on wall street are eroding confidence in that system. It certainly has eroded our confidence in that system. So we are staying out of it for the most part.

We do have our cash at a large money center bank. Ron advises credit unions instead. We haven't made that move and I am not sure we will.

Ron also advises people to check out peer to peer lending markets and mentions our portfolio company Lending Club. I was very happy to see that Ron has come around on peer to peer lending. Our firm is a big fan of these markets, having invested in two of them and looking at others.

And he describes a movement he calls Slow Money described in this way:

“Let’s just take some of our money and invest it near where we live in things we understand, starting with food,” as the movement’s founder, Woody Tasch, puts it. He describes returns as being in the “lowish single digits,” ranging from roughly 3 percent to a few percentage points higher.

The Gotham Gal and I are big fans of this approach. We have invested in a number of busineses in our neighborhood and city with expectations properly set for the occasional loss and in general low returns on the portfolio. But we are helping folks start their own businesses and create establishments we can use and that we want to see in our neighborhood. It feels good and I think it will turn out to be as good an investment as cash in the bank. At least I hope so.

As one system seems to be failing on a regular basis, it makes sense that there are new systems that operate differently that are emerging. We are seeking to invest in the ones that can scale at USV and the Gotham Gal and I are also looking to support these efforts in our personal investing. I am optimistic about this emerging movement and I am pleased to see mainstream media starting to talk about it.

#stocks#Web/Tech

What Is Going On?

I talked to my mom yesterday. She was upset about the jobs situation and worried that Obama will not have any solutions when he addresses Congress on the issue this week. I'm worried about all of this too. But I have no illusions that Obama or anyone in government (including those who want Obama's job) can do much about it.

The most interesting piece in the New York Times yesterday was not David Carr's hatchet job on Mike Arrington. It was the piece about problems at the US Postal Service:

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs. As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail. At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

Right there you have in a microcosm the issue facing most developed economies, particularly western europe and the US. We are undergoing a big time technological revolution that is disrupting big industries and big companies all over the place. And many of these big companies (and societies) have in place huge entitlements that make it impossible to operate them profitably.

The US Postal Service story is not a unique situation. It is the situation. And we are going to be living with this situation for many years to come. We are crossing a huge chasm from an industrial society to an information society. And there is immense pain in that transformation. Obama can't solve the problem nor can any of his opponents. Time will solve this problem as new industries get built, people learn new skills and new jobs, and we dismantle entitlement systems that are not sustainable.

That is what is going on. I'd love to hear Obama tell the country that. But I doubt he will. But someone should.

#Politics

On Porous Paywalls

Felix Salmon has a couple great posts on the New York Times' paywall. He notes that it has been successful and explains why. Felix says:

Yes, the NYT paywall is porous — but that’s a feature, not a bug. It allows anybody, anywhere, to read any NYT article they like. That makes the NYT open and inviting — and means that I continue to be very happy to link to NYT stories.

I've been a fan and a proponent of porous paywalls since studying the FT's model a few years back and was very pleased to see the NY Times go with the FT's model. 

Monetizing digital content requires a different mindset than monetizing analog content. The marginal cost of another unit of digital content is nominal. Unlike printing and delivering a paper, serving up another page view doesn't cost the New York Times much. So while the New York Times must charge its customer to recieve the paper, it doesn't necessarily need to charge a customer for every page view, particularly since they do run ads on every page served.

This doesn't mean that the New York Times can't and shouldn't ask their most active readers to pay. My partner calls this ex post facto monetization. You get paid after the fact, not before. And that's a mindset that many people used to getting paid before the fact have a hard time understanding.

Felix explains that since turning on the "paywall" at the end of March, the New York Times has signed up almost 400,000 paying customers for its online product and links to Seth Mnookin's excellent NY Mag piece on the Times.

The internal projections have been closely held, but several people have confirmed that the goal was to amass 300,000 online subscribers within a year of launch. On Thursday, the company announced that after just four months, 224,000 users were paying for access to the paper’s website. Combined with the 57,000 Kindle and Nook readers who were paying for subscriptions and the roughly 100,000 users whose digital access was sponsored by Ford’s Lincoln division, that meant the paper had monetized close to 400,000 online users. (Another 756,000 print subscribers have registered their accounts on the Times’ website.)

These 400,000 subscribers have been obtained with seemingly no loss in visitors and traffic to the NY Times' website since the paywall launched at the end of March this year:

Times traffic

So that's $80mm in annual revenue with no loss in traffic. That's what a porous paywall can do for you.

I'd encourage the Times to be even more agressive with it's porous paywall stratgy. The mobile situation – where I have to pay for the mobile app but can read the website in the safari browser for free makes no sense. With ex post facto monetization, you want your customers to want to pay, not force them to pay. I think they can be smarter and more creative with their mobile monetization strategy.

But all in all, I'm very pleased to see that content creators are starting to find new online models to fund their content creation costs. It costs a lot of money to send journalists around the world reporting on the important stories of the day. Printing presses and delivery trucks will be a thing of the past someday. But journalism will never be a thing of the past and we need to make sure it can be funded.

#Web/Tech

Some Thoughts On Comments

Tereza asked me to comment on the NY Times piece that ran this weekend on news sites' decision to move away from anonymous commenters. I think anonymous commenting leads to a lot of bad behavior and it should be discouraged. But I think anonymous commenting should be allowed and I allow it here. There are enough examples out there of why someone would want to comment anonymously that I think it has a place in the online conversation.

In the world of user generated content, you are always going to get posts that you don't want. Fortunately, there are a number of techniques that can be used to downgrade or even largely hide that behavior from the vast majority of users without taking it down. I think anonymous comments should be subjected to some of those techniques.

For blogs and online publications that get a lot of comments, and this blog is on the cusp of that place, I think we need a way to highlight top comments for each post. Disqus does allow the comment reader to "sort by" most popular or "best rated" but that requires user action. I think Disqus should offer blogs with a lot of comments the ability to run a window above the comment thread with the half dozen or dozen best comments that would be automatically calculated with the possibility of override by the blog author. Some blogs are already doing this like Business Insider, Gawker, and Huffington Post.

We need to introduce game mechanics into commenting systems and I think Disqus can and will be at the forefront of this effort. Game mechanics will reward the kind of behavior the community wants and will punish the kind of behavior the community does not want. The anonymous commenter who has valuable information but can't publish in their own name will be rewarded. The anonymous commenter who leaves a hostile name calling piece of crap will be punished. And the comment thread and community will be better off for it.

The other benefit of this approach is the community can police the comment thread. I do a fair amount of that today helped out by our community bouncer Kid Mercury. Turning that job over to the community in its entirety is the obvious next step.

The comment threads on this blog are now well over 100 comments on most days and get up to 300 or more comments on the most popular posts. I continue to read every comment because it is important to me to see them all. I also want to make sure they aren't spam or hate filled crap. But you may notice that I've cut back on the number of replies. It used to be that out of a 100 comment thread, my replies might be 30 or more. Now its probably 10 or less. I make up for some of that by liking comments a lot more.

But this community is following a pattern that all online communities follow. In the beginning, I was a huge part of the threads. Now I've cut back and let the community do more of the talking. And I think that's a good thing. Hopefully Disqus will give us more features like the ones I talked about earlier in this post to take the community powered moderation and rating and presentation to the next level. I'm looking forward to it.

Enhanced by Zemanta

#Weblogs