The Post Money Value

The Wise Guy

Here in Toronto, Canada, we have a wise guy.  Sean Wise.  For many years, Sean has been deep inside the entrepreneurial community doing a number of things including boot camps for start ups, working with start ups to get funding and sitting on the board of the Toronto Venture Group.  I've known Sean for many years and consider him to be a trusted friend and knowledgeable guy about the world of start ups.

The CBC is launching the reality TV Show the Dragon's Den which has seen success in the UK and Australia.  Sean ran around Canada looking for contestants and has a site where you can learn more about it.

Sean is also speaking at a TVG breakfast on the Dragon's Dean. You can register for this event here. It's about the lessons you can learn from this reality show, more about raising capital, etc.  The TVG breakfast gatherings are a good chance for entrepreneurs, service provides, VCs, and others in the community to get together, network, and learn about various opportunities.  It is worth your time to attend.

And to round out this all Sean all the time post, check out his goofy but surprisingly right 'elevator pitch' video here.

All kidding aside, Sean is one of the guys that works hard to help grow the start up and entrepreneurial community in Canada.  It's a pleasure to be working with him on a number of opportunities; Canada can use more.

Well done, Sean.

VC Pain 2.0

I'm wrapping up a term sheet with a US VC for a deal with are both looking at.  I've been surprised at a few things that see a bit, well, not so cool side.  At the risk of every US VC never working with me again, I'll offer up some observations on some of this stuff.

Expenses:

What is this notion that a start up pays expenses even if the deal doesn't close?  I think this is unfair, don't ask for that, and don't expect anybody to give on that.  Seems to me if all of the white hot start ups out there who are getting multiple term sheets in a bidding war will take a step back and say no, this "its normal" excuse will start to fade.

90 days of exclusivity:

Dharmesh Shah had a great post on this process taking so long. One reason in my view is people let stuff like 90 days of exclusivity become "normal."  In my personal opinion, 45 days is pressing it and is all I'd expect to get.  90 days seems unfair.  One alternative is to get the VC to buy the exclusive. Offer the 45 days and charge a non-refundable  $1,000 a day for every additional day up to a max of 90. At least you get the light/rent paid for. Yes, I know, not likely to happen.

Founder Buy Back:

This is where if the founders quit, get fired with or without cause, the company (or in two cases I've seen the investors) have the right to buy the founder's shares for nominal value, usually less than what the investor valued the company at.  This right decreases over time, usually 2 ~ 3 years, on a monthly basis.  The investor side of the story goes this is a way to lower the value of the company if the guy(s) we bet on walks and/or can't do the job.  The start up gal says, hmmm, the ink is dry, you fire me for no cause, pay me six months and basically buy my shares for some discounted price.  Sign me up... NOT.

My view on this is a bit convoluted.  I think if you walk out the door after telling me this is the greatest thing in the world, you need to hurt. I bet on you, ma'am, so you need to feel some pain.  On the other hand, having the right to toss you on whim is unfair without me taking some pain.  What I think is fair is that if you get fired for (well defined) cause, this buy back should have some teeth/rights.  If we get up on the wrong side of the term sheet and toss you for no reason at all, this clause simply shouldn't apply. It's not fair and if the investors decide you ain't it, fine, but fair is fair. You steal, lie, cheat, grossly under perform, etc; we make a cause case; buh bye. You don't have the "CEO mojo to take it to the next level" nonsense, screw em, you get to keep your stuff.  On change of control this, of course, goes away immediately, etc.

These are the three big ones that have popped up recently.

Next up the last 50 presentations, no harm/foul meetings and some common themes.

Watching Security - Live

I'm on a very early flight to NYC this morning from Toronto.  At 5:30a, the word came down: Pop back in the fridge.  When the last scare happened, there were not cans or bottles of soda (pop) being sold anywhere in the airport except where they could open it, pour it into a cup and tell you to finish it before you've boarded.

In the Maple Leaf lounge, they locked up all the drinks and had one person standing by the counter, opening a can and pouring you a glass, etc. It was (for them) a pretty messy solution given the zillions of people going in and out of here.

This morning, I happen to be in the Maple Leaf lounge when I overheard one of the supervisors excitedly telling the staff:

"The terrorists are in full retreat, return the Pepsi at once!"

Out came the carts filled with cases of pop and all is right with the world. First, diet coke, next toothpaste!

See you in the big apple.

If we could just get rid of customers

Via Seth Godin.

There is this web site, FourPawsDesign, that has some interesting things for dogs and, when not selling stuff for scruffy, they do web site design.

Seth's post pointed out this tidbit in the FAQ:

"Unfortunately, we can no longer take phone orders. Customers forget to tell us something and after the order is placed and processed they claim we wrote down incorrect information. By placing an order online we have a record of exactly what you want, especially for custom-designed items, leaving no room for error."

The best part about the Internet when it comes to your start up, is the almost unending supply of examples of what not to do.  On the contact page, they make the point about clearly not wanting to talk with you regarding an order:

Four Paws Design
00 Street
Pepperell
Middlesex
Massachusetts
United States
01463
Email: orders@fourpawsdesign.com
Phone (orders): Email Only (emphasis mine)

You can actually get the phone number for Four Paws off the Internet much the same way Nik, in his spare, time took out after the resident Skeptic. 

My observation, tho, is slightly different then Seth's.  I had dinner with my friend Chris.  Chris used to work with me as the CTO of a company I ran. After that exercise, Chris went off to live in Thailand and, when not dodging tanks, runs an electronic commerce business selling T-Shirts. Yeah, really. And to my surprise and delight, he is bringing in millions of dollars.

Chris also doesn't take phone orders. He doesn't take bulk/wholesale orders. He doesn't sell what isn't in stock, i.e. no back orders. And on and on.  Did I mention millions of dollars in revenue and (shh, confidential) P R O F I T S.

What's different about Chris and the Barking Business above is each one of these negatives is turned into a positive when Chris deals with customers.

He has been focused on exactly the business he can successfully handle and orders he can provide with 100% satisfaction.

Hence:

No phone orders is portrayed as "we keep costs down and our silly mistakes to a minimum by routing all orders electronically"

No bulk/special orders is portrayed as "to make sure we deliver what we promise, we don't go outside what we are good at which is in stock items where we can get things to you on time as promised."

No back orders is portrayed as "to ensure you get what you want as promised, we only show you, in real time, what is in stock and available for immediate shipping."

Chris has spent a bunch of time tuning his process and being incredibly focused on the right customers for him. He has the disipline to turn down orders that fall outside of what he can do and do well.  It works and his cash profits, very happy customers, and growing business seems to validate his methods.

Lot of lessons for you.

We invest in the team: Clarified

VCs invest in people. People. Is everybody with me? No?

For clarification we turn to the VC world's resident and youngest PhD, Dr. Paul Kedrosky:

"No sane adult moves to the Bay Area for lifestyle; they move there because they think they can make money. So, while I think it's nice people like to ski, hike, bike, climb, surf, and golf, I don't care. I want people who are greedy , competive bastards who would move to Fargo in January to make money, and who don't know any other way to work than hard. The rest of it is just selfish distraction at a shitty time."

See? People. What he said, it's about people. 

Via: Beware of Lifestyle Immigrants.

An Old Scoble Plea: Full Feeds

A long (in Internet time, anyway) Robert Scoble railed against blogs with partial feeds, making screaming statements about how he refuses to read them, link to them, or even buy their kid's girl scout cookies.

While I could never do justice to a Scoble rant (it's just one of life's unique pleasures), I would like to raise my hand and, while at 36,000 feet, ask all you partial feeder types to toss me (and the .05% of the world who uses an RSS reader) a bone. Send me your full feed. Please.

Consider the upgradedtraveler blog, a creation by Dr. Vino, who actually has some interesting things to say:

When the TSA announced that it was allowing personal lubricants such as K-Y Jelly on board, I honestly asked myself why. Besides gaining some inflight intimacy with a flying partner, or possibly performing some Ghostbusters-esque special effects onboard (to the inevitable delight of the flight crew, I'm sure), why would anyone need to have K-Y on board?

Partial feed. Bummer.

It's one feed I'd like to get in full.  So Doc, I've linked, I've loved. Send me the feed.

And rumor has it Scoble is in a happy place, being all nice -n- mellow, etc.  Another one goes Hollywood, I guess.

It's apple juice, really

This is going a bit overboard:

"Flying internationally into Minneapolis-St. Paul Airport? Bringing in some duty free liquor? Taking a cab? Better hide the hooch, and hide it well.

A number of Somalian cabbies in the area, citing their religious beliefs, have been refusing to transport passengers who are carrying or are even suspected of carrying liquor. It's become pervasive enough that the city is considering a system for marking cabs that are anti-booze."

Heh.

Via Better Living Though Miles.

Pissed Off Customer 2.0

When I'm in foreign countries (like today's Texas trip), I try to schedule time amongst the working world, outside the tech/blogging echo chamber.  I spent some time in the Irving Mall, just south of DFW airport and got to watch the brewing of some seriously angry customers, who don't know its coming.

The "Vista Capable" logo which is now appearing on computers all around the world is the catalyst of this fun.

Consider this story from the Circuit City store inside the mall.

A guy is standing in the aisle looking at various laptops. He's in the market for a replacement. I know this because he is telling all to a helpful employee.

Customer 2.0: "So, will this Sony run Vista?"

Emp: "Yes sir, see that thar sticker, riight thar? Means them Microsoft gals and them Sony guys are all right friendly and working."

Okay, he actually just said yes.

To which, I jumped in and said the magic, time honored words: It depends.

After a dirty look from the Circuit City guy, I proceed to explain that capable only means that the machine will boot the thing, run the core but maybe not a bunch of the gee whiz stuff which might, depending on usage, matter to you. Really, says the customer?  Yeah, that's correct, says the employee.

Even after taking a look at this brochure Microsoft helpfully provided retailers, the customer wasn't clear and really wasn't sure what was happening. "If I get a brand new laptop, I'm not able to use all the new stuff? That's just stupid." was the customer's general feeling.  I left him and the clerk reviewing Vista and figuring out what was actually required.

I thought I overheard the employee talking about just using Firefox and waiting to upgrade, but I could have been mistaken.

In a class I recently gave, I pointed out why dominant market share players always end up creating these types of problems.  You can be sure that nobody from the logo team at Microsoft, nobody from the OEM group, nobody from the hallway where mini-Microsoft lives, nobody went to the computer store(s) and watched people pick a computer out or watched to see what the reaction would be to this Capable vs. Full on Vista nonsense. 

They didn't do that because, well, they didn't have to.  The capable logo and the (rapidly approaching) free upgrade coupon in the box promotion is designed to keep computers flying off the shelves, thus avoiding the Osborne Syndrome. (Short History: Osborne Computers pre-announced a new model, killing sales of old model, new model late, company augers into the ground.)

To pulse check this, I roamed the store and asked 4 other Circuit City employees a simple question: "How do I know if I buy a new computer, I will be able to use all these new features of Vista I keep hearing about?"  4 and oh, folks. All of them said, no problem, if it has that logo you are good to go. That logo means it will run Vista.

I zipped over to Best Buy and yep, same story; see logo, feel the Vista goodness were the pearls of wisdom coming from 3 employees at that store.  A quick call to a Dallas Fry's (the one off LBJ) got me a person in the computer who told me that if I waited for about a month, any computer with the logo would get a free upgrade to full Vista goodies. You mean all that good graphics stuff, sir ( I said excitedly). You betcha.

Sigh.  The bad part is none of this will matter. The average person won't read blogs, pick up a PC magazine or hear the screaming of the customer before them.  The average person will get "Capable" and will only get pissed when somebody pops out the hottest [fill in the blank] which requires a feature of Vista the no kidding, runs everything like a dream, version.

It makes a case for alternatives and competition so these consumer casualties are kept to a minimum, eh? 

Raw meat for Dead20.COM

Via inFlightHQ, we hear about Bringo:

"The idea is they do all the hard work of calling a company, waiting on hold, and navigating the system to get to a human -- so you don't have to.

Here's how it's intended to work: From their directory, you find the company you'd like to call, enter your phone number and then wait while they navigate the phone tree. At the right moment, they call you back, you then pick up your phone and voila! You're talking to a human at the desired company. "

This lady tested it on AOL and United Airlines; it worked, got a human on the spot. But, and Jeff Jarvis must be howling, Dell fails:

"Finally the big test, Dell customer service (for home users.) Result. My phone rang and when I picked up I was on hold, being prompted to enter a numeric choice of options -- no human. I hung up. Perhaps Dell, in their never ending quest to minimize support expenses have found a way to counter the Bringo system... "

Business model? Long term viability? Nifty use of VoIP technology and/or 1000s of poorly paid people in [fill in your favorite country]?  Don't know and I'll leave it to the Dead 2.0 man (or woman) to dig into this one.

Also via inFlightHQ, we hear about "My Wet Stuff" which does exactly what you'd expect, order up what you need and they deliver it to your hotel room.  The quote:

"My fiancé made an excellent recommendation about how to avoid the liquids and gels problem and it bears repeating. My Wet Stuff is a really cool service, and they’re giving away the first $1 million worth of products free. Despite this, I still had to check a bag on a recent trip because the service does not stock my preferred brands of makeup and skin care products. But for folks who aren’t as absurdly picky, that could come in really handy."

Given that the British have decided, starting next weekend, to let toothpaste and other liquids back on the plane, this baby has to be at the top of the charts for the Dead 2.0 pool. 

However, in a weak attempt at fairness, you can see that this is a somewhat out of the tech echo chamber blog and, well, who knows.  I'll be waiting for the Skeptic on this one as it just cries out for sarcastic commentary.

Woof and Why

[updated to correct link]

I was going to simply refer you to two excellent posts that I hope start a trend, that being more posts on why an investment was made.  These posts, in my opinion, are great because beyond the typical review which is I like or don't like, somebody coughed up some coin. 

The why behind the cash going out the door should be useful for a number of reasons, especially to the start ups looking for cash.

David Beisel, an excellent writer and experienced VC at Masthead Venture Partners wrote about why he likes his Tremor Investment.  He broke it down into the market, the team and the approach, giving you some insight into his thinking and the business. It is worth a read as is most of David's blog.

Michael Arrington also posted why he liked his investment in Dogster.  Mike did a good job of laying out some reasons:

"Dogster was started on table scraps from a few friends and family of founders Ted Rheingold, John Vars and Steven Reading. These guys kept operations extremely lean from the start, and brought the company to profitability about a year ago, just shy of their two year birthday.

Growth in terms of users, page views and revenue continues to increase aggresively [sic]. And while Dogster is still small, the company continues to run on a very tight budget. No money is wasted."

He also put in a plug for the team:

"But what I like even more than the business model and growth metrics is the team. The founders are all solid, street-smart entrepreneurs. They recently brought on Jeff Clavier and Scott Rafer as advisers, two people I have a great deal of respect for. And as part of the round Michael Parekh agreed to join the board of directors of the company as well. He’s one of the smartest people I’ve ever met, and that pretty much sealed the deal for me."

I was going to wrap up with we need more posts like this and start working on my own why do I like, when newsgator dropped this puppy (sorry, Mike) into my inbox. A posting from our resident skeptic came rolling in, also quoting the above snippet from Mike and then saying the following:

"I hate to say it, wait.  No, actually I don’t hate to say it at all.  This may be one of the poorest “reasons to invest” I’ve ever heard!  There’s plenty of smart people out there.  Tons of em in fact.  Guess what?  Lots of smart people fail.  In fact, seeing as how most startups actually fail, and there’s tons of smart people running startups, you could actually twist the logic slightly to say: odds are pretty good investing in smart people will result in failure."

First, my thanks, well done, Mike (and David) still stands. Dr. Dead 2.0 is not known to most of us. Basking (or hiding, depending on your perspective) like Mini-Microsoft and Sand Hill Slave in anonymity, it's difficult to tell whether this is tongue in cheek wise guy stuff or he(she?) really believes smart people makes a dumb reason to invest.

So to be sure, kind start up, smart people = good. Entertaining tho s/he may be, s/he is dead (get it?) wrong, it is a great reason and often time the thing that allows a so so plan to actually make it. While smart people fail, yes, not so smart people fail more often. I'm good with smart people or, failing that, not so smart people being smart enough to hire really smart people. Got all that? Good, you're smart.

And while Dead 2.0 piles on along with lots of others in taking shots at Dogster, let us pause and try to remember a few pesky details.

• Profits.
• Small Team.
• Growth.
• Tier One Advertisers who've stayed and increased purchases.
• Small investment for working capital.
• Did I mention profits?

If that company sells for 2m bucks, its a double and every angel in the world will do those deals all day/night. If it sells for a measly post bubble crash valuation of 10 million, everybody high fives to the bank.

So, if you are looking to be successful, a formula appears to be forming:

1. Tap into non-echo chamber stuff (hint hang out at a pet store and watch these people).
2. Take a little cash.
3. Be small.
4. Grow.
5. Make some profits.
6. Have many of Mike Arrington's readers, along with a healthy dose of the blogging community, call you lame. That should clinch it.

Nice, Michael. Good luck with the investment.

The Freebie World

Here is a site that has a fairly good/long list of free software.  While not the Web 2.0, ruby on Ajax Javabeans web site design on the month, it does have a good pile of stuff which should keep you downloading for a few days.

One interesting note about the website design: in the upper right hand corner you can click the light bulb for a light or dark background. Hmmm.. 

Anyway, here you go.

http://www.concisefreeware.com/

The Good of Web 2.0

Michael Arrington continues to maintain a justification for bashing Squidoo and I promise this is the last post I'll do on this topic but I wanted to share something important.

You can read the entire blog entry regarding Squidoo's charity work here, but this is the quote that I think really matters:

“This is John Wood, founder of Room to Read. Seth and Megan at Squidoo said I could introduce your monthly payment report with a bit of great news. Thanks to contributed royalties from thousands of lensmasters, Room to Read has built a library for children in Cambodia. We hope to help these kids break the cycle of poverty through the lifelong gift of education. You can see our pictures of the library here: < a>. Congratulations on a job well done, and thank you for your help.”
–John Wood, www.roomtoread.org

Memo to Michael Arrington: You may not be proud of Squidoo but I'd venture to say that those kids in Cambodia are. I'm pretty please/proud that for all the nonsense which goes on with Web 2.0,  some tangible good is coming out of it.  You clearly didn't do your homework on Squidoo. You've asked for "evidence" and then you "retract" your statements. Here you go.

How many more books in a library do you need, Mike? Please let me know and I'll send a check to Roomtoread.org, if that's what it would take to get you back off.

A very long time ago, when I was in seriously dire straits, the Red Cross came through for me. Since then, I have a raw nerve when it comes to this type of cheap shot behavior exhibited by Mike. I may be over the top in my Arrington rants but people in positions of influence need to do more not less for anything and anyone who gets money to those in need, especially given the world we live in today.

For the rest of you, including you, kind start ups, here's a thought:

Everyday in my office, I meet smart people. I meet passionate people that have amazing ideas, raw knowledge, and wonderful ways for technology to solve problems.

Share some knowledge and make a bit of a difference. Set up a lens on Squidoo and let that little amount of money you generate get put in with other little amounts of money in order to get good things like roomtoread.org or one.org some needed help.   Based on this CrunchNote posting, Michael will continue to do his thing and live in the all is okay world, which is fine. 

We now return to our regularly scheduled blog, thanks for your patience.

Michael Arrington Responds

Michael took the time to respond to my previous post. The comments in full are:

I've heard that squidoo is claiming significantly more traffic than their Alexa rankings suggest, but the checks they are still sending to top lenses are so low that it's hard to believe this. I think it would be great if Squidoo publicly reported what they are donating to charity (if they do this already I don't know about it). If it's substantial, or trending towards substantial, I will retract my statements. But from what I see, Seth is trumpeting how much they are doing for charity when very little is actually being donated.

I want to reiterate that I don't have access to hard data in coming to conclusions...I'm just making assumptions based on alexa and hearing about very small payouts to lensmasters.

I appreciate Michael coming by and responding but this doesn't address the "I'm not proud" comment. In addition, I don't understand how a specific amount going to charity (being substantial or trending towards substantial) gives cause to a determination of a retraction.  I'm sure Michael isn't saying that if he decides it is enough charity then he will say, okay, I guess squidoo is in the good column.  Some could read it that way, however, which would be a shame as by all accounts, Michael is a nice person.  Maybe the "I'm not proud" thing is some culture/valley speak, dunno.  Maybe Michael has something personal grudge/thing with Seth Godin, dunno that either.

Money is going to charity, that point is not in dispute.  The people getting the money are extremely grateful, that point is also not in dispute. In most case, people getting some positive value/money out of Squidoo are way outside of the echo chamber and probably don't know or care about Michael Arrington (or me for that matter).

They end up, along with the actual workers inside of Squidoo, being the collateral damage resulting from these types of flip remarks. 

I would have hoped, "oops, not proud was over the top", could have been the response from Michael but so be it.  I also would have hoped that "I've heard" and "I don't have access to hard data" to be cause enough to temper one's shots until one could rely on direct information and real data but again, so be it. 

I would have hoped Michael would take his own pulpit and clarify he wasn't meaning to take shots at people donating money to charity vs. commenting here about what the requirements would have to be in order to get at least a retraction. But so be it, people can conclude what they want.

My offer still stands, Mike:

"So, Mike, here's a deal. You sign up, in public, to stop taking shots at Squidoo and others that actually try to do a little good and I'll make a donation to your favorite charity."

 

Mike Arrington - Sit Down

From time to time I roll my eyes at some of the antics that go on within the start up community, "the Valley", and other things so called Web whatever dot oh.

But every now and then the pontification, the 'attitude', etc, goes over the line. Maybe it is the environment down there or possibly the water, but the foot in mouth disease just seems rampant.

Consider the ZDnet story about Mike Arrington's talk at The Future of Web Apps Summit.  In typical fashion, he (like anybody else including me who was asked) lists  his winners, not yet winners, etc.

I was struck by this quote in the story:

What were they thinking: Inform, Gather, PubSub, Browzor, Jigsaw, Squidoo
These are not necesarily [sic] loser companies, but I am not proud that they exist, Mike said

The resident Skeptic's blog upped these companies to looser status.

I actually don't know much about any of these companies except Squidoo. I've spent time with the founder, the management, the developers, etc. And I've read the FAQ  (see questions 10 -14) which talks about the charity work that is going on. I know that 100% of the beta test's resulting money went to charity. I know about the thousands of dollars that continue into charity. I've spoken to lensmasters who are delighted that a little effort on their part results in somebody getting some food, clothes, maybe a book, or blanket.

So to summarize: Mike Arrington is not proud that a web service is around which, according to the last numbers I was privy to, is helping to get thousands of dollars to charity. 

You might want to believe Mike didn't know about this charity aspect of Squidoo. You'd be wrong as he has been blasted on this point before by me and others.  This notion of taking shots at something that doesn't fit the Mike Arrington mold is annoying only when it attacks good people doing good work.  He is entitled to an opinion. But taking these types of shots is, in my opinion, over the line.

Of course when Arrington starts this nonsense, it invites other thirty something kids like Matt Haughey (founder of Metafilter) pile on with equally stupid comments.

Consider this from a Valleywag IM transcript between Matt and (I assume) Nick Denton. Matt was in the audience listening to the speech:

Matt: the What were they thinking? slide
Wag: pics or it's not real
Matt: inform.com, gather, pubsub, browzar, jigsaw, and squidoo
Matt: squidoo is so fucking lame

Read the complete transcript if you want but my point is one of piling on nothing more.

So, Mike, here's a deal. You sign up, in public, to stop taking shots at Squidoo and others that actually try to do a little good and I'll make a donation to your favorite charity. 

As for Matt Haughey? Now you know so how about laying off Squidoo.

The European Chunk of Touring

Shel and I have scheduled some October time wandering the globe to check out new ventures, interesting opportunities, and smart people.

This is the schedule:

Oct. 14. London-- dinner with small group of entrepreneurs.
Oct. 15-16--Scotland. Learning about social media in public education system
Oct. 17--Cork. Meetings with entrepreneurs/blogger dinner
Oct. 18--19 Dublin. Blogger dinner; participate in SaaS conference Trinity College
Oct. 20--Brighton, England, meet entrepreneurs
Oct. 21,2--Brussels, meet with entrepreneurs
Oct. 22-24--Estonia, meet leaders of online community, private dinner.
Oct. 25--Berlin, meeting with entrepreneurs as well as companies in Jenna.
Oct. 25-30. Rome, Guest of American Embassy. speaking meeting with Italian entrepreneurs.

If you are around, please let us know as we would love to meet up with you.

Peter Chernin - The New AOL Boss

A hearty congratulations to Peter Chernin, Chief Operating Officer of News Corp as the new AOL CEO. What, you didn't hear about it? Sure you did.

Surely, you read Marshall Kirkpatrick's MySpace posting.  Okay, maybe I'm jumping the gun here but consider these words:

News Corp. chief operating officer Peter Chernin told company investors today that, “If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flickr, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace.” MultiChannel News is reporting that Chernin said there is no reason why News Corp. couldn’t build parallel businesses, targeting YouTube in particular. “Given that most of their traffic comes from us,” he said, “if we build adequate if not superior competitors, I think we ought to be able to match them if not exceed them.”

or Marshall's excellent summary:

To summarize: the COO of News Corp. says that Web 2.0 is leaching traffic off of MySpace, that they can build their own services to compete with any of it and that there’s going to be an increasingly aggressive commercial push on the site.

Marshall says "dangerously arrogant" but I say naah, it's part of the master plan. NewsCorp wants to turn MySpace into a giant walled garden complete with all the restrictions and we don't no stinking, well, stinking anything attitude.

In other words: AOL. 

Brilliant! Now all we need is a giant billion piece mailing of MySpace CDs and life is good.

Hugh Macleod, paging Hugh Macleod: emergency cartoon required, aisle three.

Still think you've got time?

I'm heading out to LA today. While driving to the airport, I had a idea for small application that would solve a problem, I believe lots of people have.  It is some I need as part of a larger solution service I'm working on.

While waiting for the plane (at the gate, leeching some free wireless off the Maple Leaf lounge), I typed in the requirements to, yeah, you know, Rent-A-Coder.

I land in Denver to change planes, a couple hours later, with a whole bunch of bids in my inbox.  I have coders offering to send me a prototype/demo to see if they understand what I want.  I reply please, I would like to see, thank you.

Two hours later, landing in Burbank, I have email with zip files flying into my blackberry.

That's not to say that having a meeting to schedule the meeting whereby a crossfunctional team will assess the needs of the reengineering process is a bad thing; naaah, go right ahead.

Some Case Study Reviews

Nisan Gabby an analyst at Sierra Ventures has a blog with a growing number on what he calls "successful Internet Start-Ups."

He defines success as either/or:

a) significant exit

b) large revenue

c) strong Internet brand

While everybody can probably tweak the definitions, the case studies are good reading. 

The recent myspace entry has not only good data on myspace, it's plans, etc, but you will find the exit and who actually made what a nice people of informative writing.

Nisan clearly is spending some serious time on these cases studies. They are well worth your time reading.

The blog is www.startup-review.com

[side note: It's probably a bad thing to turn your laptop over and have multiple screws rattle around and fall out, right? Hmm, that's what I thought.. must be Monday.]

Microsoft Max and You

Important note: If you hate Microsoft, aren't a developer, etc, hit the next blog entry, nothing to see here.

Important note 2: I used to work for Microsoft, good comments, I'm an unpaid shill, bad comments I'm a sour grapes, ex-employee, feel free to pick either.

There is a fairly good love affair happening around Microsoft Max, the photo and newsreader application currently coming out of Redmond.  You can read the blog entry from the team here.

You can read Don Dodge's comments, Mark Evan's comments and Robert Scoble's to get the general view that the Max team deserves a hearty well done.

WIth respect to Don and Robert (who isn't with Redmond anymore), they missed the bigger picture about what you, geek and/or start up type should know about Max.

If you attended the past Microsoft PDC or the other web 2.0 conference thing Microsoft did, you were shown how to build Max in September of 2005. 

In fact, you were given a pile of CDs with code and tools, had access to videos which included a demo showing the newspaper view of Max and were able to get access to product code named Sparkle months before Max shipped. 

Ryan Stewart got it dead on with the "Windows Presentation Foundation in action"  title of his blog entry.   The reason? Microsoft Max is a great application that shows off what you can do. 

Yes, this has the appearance of Microsoft "rah rah" but hear me out.

1. The tools to build Max or his brother/sister/evil twin/step child are free to you today/now.

2. Microsoft is putting out Max along with other goodies which, hopefully, will get a critical mass of users  who have the core components already installed, thus giving you a target market.

3. "Nothing has changed" with respect to Microsoft and Developers, Developers, Developers except that super developer evangelists like Scoble and others (Vic) have left the building. Makes it a bit harder but the TechNet and MSDN teams are still plugging away to get you products/tools/events, etc, that are designed to help you be successful.

All of this spells opportunities for you to build great stuff. Applications, in my humble opinion, are not dead and there has never been a better time to build some great stuff.

[Personal Note]

I'd be remiss if I didn't point out that when I see things like Microsoft Max, I miss the good old days when I was part of a small team of technical evangelists (the original Microsoft DRG) that would have had 150 developers out there doing 1000 products 10,000x better and out the door before Max ever saw beta.  That's not to take anything away from Max.  I've just been blessed with being exposed to developers around the world (see my ongoing love affair with TEO) and know that armed with the right tools, tons of great stuff can be produced. 

Let's see what you've created; operators/beta testers (me) are standing by. If you get really lucky, this will be you selling your product.

Why I like working with Startups

Easy. Just go read this.  I love this stuff.

Welcome, Mark Zuckerberg

Mark Zuckerberg is the newest member of the gasoline on the fire group of Founder/CEO types that haven't learned how to properly react when a group of customers go bananas over something you offer.

As you probably have heard, Facebook got its members in an uproar over some new features.  Mark, being the CEO/Founder, jumped up and posted some commentary to deal with the rising tide of screaming complaints.

For you, kind start up person, here are some lessons/observations.

First, ignore the feature debate. Doesn't matter for these purposes. 

Second, ignore the privacy debate over the features, for you, also doesn't matter.

Third, pay close attention to people outside the echo chamber as they offer a fairly good 'normal' view of what's really being said.

I passively watched this fun until this morning when two things happened.  The first was somebody forwarding me Mark's blog posting; we'll get to that in a moment.  The second was a conversation with a women that doesn't live in our echo chamber.

Her words:

"I just read in the paper about this facebook privacy problem, jezz, I have to tell my daughter about this. Damn, another place for people to stalk my children. They should shut sites like this down."

That's a mom worried, knowing pretty much nothing about the site, etc, only relying on some snippet she read in a newspaper.

Now on to Mark's blog entry.

He starts off with the title: Calm down. Breathe. We Hear You.  Hmm.. I'm at 7 out of 10 on the arrogance scale but I withhold the points award because this might be a fun, oops, aw shucks, sorree, type posting.  

The first paragraph, the most important paragraph, falls flat on it's face.  Consider this sentence:

"We think they are great products, but we know that many of you are not immediate fans, and have found them overwhelming and cluttered. Other people are concerned that non-friends can see too much about them."

Given that about 1000% of the concerns were all about privacy, all about stalking, etc, this type of dismissive, we like it lead off, with yeah some people are bitching, is not good.

Lesson: Acknowledge and agree with the big concern. In this case, Privacy is a top priority/concern should have been the first words written. 

With respect to privacy, there was this dumb remark:

"And we agree, stalking isn’t cool; but being able to know what’s going on in your friends’ lives is"

There is more about what you can do with respect to facebook's data here:

"Maybe if your friends are all going to a party, you want to know so you can go too."

I don't want to take this stuff out of context.  When you read all of Mark's blog post, you will see Mark defending what Facebook is all about and why the features he has in the product add value to his product vision.  What comes through, loud and clear, however, is a blind eye and deaf ear to the concerns being raised with respect to privacy, stalking, etc.

Mark had a perfect opportunity to address these issues with a simple blog entry saying privacy is our top concern, we take it seriously, nothing we do will ever compromise your privacy, etc, etc. 

There is this attempt:

"We didn’t take away any privacy options. [Your privacy options remain the same.] The privacy rules haven’t changed. None of your information is visible to anyone who couldn’t see it before the changes."

The problem here is that Mark simply doesn't get the issue.  Obviously, rolling out these types of changes hit a raw nerve in the privacy department. Obviously, the simple thing to do would have been to opt in for the new changes, reset everybody to max privacy, then let people slowly open things back up (yup, close the walls as they call it), etc. 

Lots of company options that, for sure, would have resulted in complaining but, for sure, would have allowed the company to make a strong statement about privacy and the values/principals of the company.

That, of course, is up to Mark and his apparently equally tone deaf board/management team to decide.  My daughters use Facebook and I don't much care about this either way. They are grown and understand the world we live in.  Other parents may not feel this way.

But for you and your start up? Learn from this. 

When 200,000 people start bitching and complaing, you swan dive onto your sword. Don't even attempt to rationalize, simply say, oops, here's what we heard and what we are immediately doing about it, not hey dorks, learn how to use the privacy settings and keep the cards -n- letters coming.  That's what I (and others) read into Mark's blog entry. 

Again, you should read his entry for yourself and use it as an opportunity to learn how to respond to problems. 

Welcome to the club, Mark, you aren't the first and won't be the last.

update: Ed Sim has an excellent post on this topic.

The Windows Live Messenger Add On

As promised, this is the source code (visual basic 6, I believe) and the executable which can be used to alert you to when an individual contact comes on/offline, etc.

The executable is here . Note messenger has to be running for this to work.

The VB source code is here .

No technical support, complaints, etc, plz. It works for me and I hope it will work for you. If you like, consider hiring DEN for your own coding work.

The Rent-A-Coder Follow Up

A couple of weeks ago I realized that the feature of being able to individually be notified when somebody logs on/off to Messenger is actually pretty handy for a number of reasons.

I popped a bid into RentACoder with a description of what I wanted:

"Windows Live Messenger does not allow you to set individual alerts when just certain people come on line or go off line. In the product you can set a global option to be alerted when people come online. This is an all or none option, not by the contact.  I'd like a tray option that does the following:

1. bring up the list of contacts.
2. check the ones where I want individual notification
3. when people come online that I do want notification of, I get a small indication, much the way messenger's default works. It comes up in the corner and then goes away after a couple of seconds.

This would require messenger to be running and would also assume the global notification is turned off. This is a windows only requirement. This can be for the current version of windows live messenger with not back compatibility required."

After putting this request up and within 4 hours, 220 people had viewed it.  A coder in Columbia posted a message that basically said, try this and see if it is generally what you want, if so, I can make it into the tray icon, clean it up and send it to you.  I tested it, accepted the bid and a couple of days later, presto, my problem solved.

It cost $200.

There are some interesting aspects to this. There is the obvious, i.e. I got a problem solved quickly and for a great price.

The larger, probably not so obvious issue, is the notion of micro-problem solving.  There are a million hassles in the world of computers. If there was a site called "I'd like this problem solved dot com" where you and I could post little things like this along with what we'd pay, maybe other people would jump on and say, yeah, I'd spring 10 bux for that, etc. Once there was some actual cash committed, somebody comes along as simply codes it up.  My little nit was worth 200 bux. If there are 400 people out of the millions of messenger users out there that thought this was worth a buck, in VC speak, it's a double, but for some coder, it might be some good coin.

I'll upload the files, including the source in another post since Windows Live Writer, which I'm using now, doesn't allow for files to be attached. (only partially true, I can code it into  HTML page but I'm lazy.)

P.S. The really good part? The coder (DEN), added hand features I didn't specifically ask for because he simply thought they made sense. Sweet.