Monday, December 19, 2011

Joining Genacast Ventures

After spending my entire career at startups, including one that went bust and two that got acquired, I became a big bad MBA (stop me if you’ve heard this story before), and joined the corporate development group at a [relatively] large company. While I was having fun meeting with entrepreneurs and reviewing their companies for potential acquisition, I found myself longing to be on the other side of the table. Knowing that there was booming New York Tech scene going on, I decided to jump ship and see what it was all about. After a year of exploration and learning from a bunch of super-fit, super-fun, super-smart, and super-caffeinated entrepreneurs, I am thrilled to announce that I am joining Genacast Ventures as a Senior Associate. My role at Genacast will be to give the fund a full-time presence here in the greatest city on earth, as well as to help Gil and Austin with all aspects of the venture cycle with the goal of increasing Genacast's investment pace from their already phenomenal track record.

This announcement is very exciting to me for a number of reasons:

  1. I have always been energized by startups and entrepreneurs. The thrill of the being the steward of your own destiny; the creativity of inventing your own business model; the reward and recognition not merely for making successful bets but for making any bet at all; is not something that organizations past a certain size are structurally able to offer. I am self-aware enough to recognize that I don’t have the super-high risk tolerance that Alex Taub talks about, so I see VCas my way of helping entrepreneurs by providing them capital - and hopefully more - to enable them to realize their dreams. I hope that the NY Tech community will hold me to this standard.
  2. VC has been my own dream since I first learned about it. I spent the dot-com boom with my head down, writing code, and the second two startups I worked at were not VC-funded, so I didn’t know a whit about finance until I got to business school. After about a week of flirting with private equity I learned about VC, and there was no looking back. You mean there was a job that consisted of meeting and working with entrepreneurs to help them succeed? And I could get paid for it? It was like finding out that not only does Santa Claus exist but that he’ll pay you to ride his sleigh (with all due apologies to the fact that I’m Jewish and the fact that my using this analogy may upset my family).
  3. I <3 New York. I am a product of Ellis Island. Four generations ago my great-grandparents – all eight of them, each in their own way – fled Eastern Europe and settled in the Five Boroughs. A hundred years ago my great-grandfather had a store on the Lower East Side. My paternal grandparents were raised in the Bronx; my maternal grandparents in Brooklyn. My father was born and raised in Queens, and I used to visit my grandparents there a few times a year until they moved to Florida. My grandmother tells me that she always knew I would move back to New York. I had been forced to reconcile with having to choose between tech – meaning San Francisco, Boston, or Israel (another love of mine, but that’s a story for another time) – or NY, but not both. So the opportunity to be a contributing member of the NY tech community feels like having my proverbial cake and eating it too.
  4. The New York tech scene is thriving. Or exploding. Perhaps booming. Showing huge growth. Ron Conway saysNew York has built a tech ecosystem as strong as Silicon Valley” – at a conference in San Francisco – even if Paul Graham doesn’t agree. And we’re all in it together because as PaulG did get right, if there is one thing you can count on New Yorkers for, it’s to come to our city's defense when someone hates. This will be the topic of a separate post, but let’s just say that New York was the capital of American entrepreneurship before California was even a state.
  5. Genacast is a tremendous firm, and Gil is a tremendous entrepreneur and investor. As the co-founder and CTO of TACODA, the first behavioral ad-targeting company, and Real Media, one of the first ad networks back in the mid-1990’s, Gil has been a pioneer in the Internet world. Barely three years into his second career as a VC, he has already participated in successful exits in Invite Media and Demdex, as well as the initial investments in companies like DoubleVerify and Enterproid, both of whom have recently raised significant follow on rounds (the latter of which has a very cool and intuitive product that I finally got the chance to play with the other day). I look forward to learning from him and the entrepreneurs that we invest in.
  6. As a joint venture between Gil and Comcast Ventures, Genacast brings a unique value proposition to technology entrepreneurs. As a seed fund providing the “first money in” to its portfolio companies, our interests are aligned with the entrepreneurs, including the ability to make good returns on an “early exit” rather than needing a moonshot. At the same time, if you do want to go for the home run, we have the firepower of Comcast Ventures behind us, who has invested in follow-on rounds in 3 out of 5 of our early-stage deals (although not in DoubleVerify's $10M or $33M rounds; while we often partner closely with Comcast we certainly do not require our portfolio to work with them). Similarly, if you want to work with Comcast itself, well, we know some people.
  7. Our strategy is to focus on the digital media and internet sector whose innovation is changing the world, with an additional emphasis on core technology as a differentiating factor. We believe that this is an area where our own engineering backgrounds and excitement about solving hard problems with technology allow us to add value to our partners, including our portfolio companies and our co-investors. That’s not to say that we expect a seed-stage company to have a fully built technology platform, but we are looking for founding teams whose engineering and technology chops give us confidence that they will manage to stay one step ahead of the market both on the business and technology sides. When we invest in consumer web companies like PackLate, you can be sure that they are doing something interesting on the backend.

I’ve run out of words to express my excitement, but I’ll sum it up by saying that I am humbled by the opportunity to work with Gil, Austin, the Comcast Ventures team, and all of the amazing entrepreneurs, investors, and hustlers who make this city so great. I have so much to learn and I am super excited to get to it.

Thursday, December 15, 2011

Lean Back Reading

Dave Winer wrote an interesting blog post a couple of days ago on the app vs the web debate, entitled “Why apps are not the future.” The post was written as a rebuttal to various declarations that the web is dead and apps are the future. Dave’s thesis was that the web will triumph in the end because apps don’t have hyper-linking.

This got me to thinking about my own consumption of written content. I am a voracious consumer of the medium formerly known as “print.” I read the print versions of The Economist, New York Magazine, The New Yorker, and Time Magazine every week; I read the print version of Foreign Affairs monthly. I read the Android app versions of the New York Times and PaidContent daily, and I skim through Twitter,, Facebook, etc, which generally refer me to TechCrunch, various startup and digital media bloggers (such as Dave), and the web sites of various news organizations. Between my primary interests of digital media and international relations, I seldom run out of material.

I’ve been noticing recently that I prefer my written content sans links. The lack of links inside of apps is a feature, not a bug. I think content creators understand this, and so did Steve Jobs. Paul Graham certainly gets it; you'll never see a link in any of his essays except to the footnotes at the bottom. For lack of a better term I’ve taken to calling the experience of old-fashion, non-hyper-linked written content lean-back reading

Like everyone else I was seduced by the idea of hyper-linking to adjacent or background content when the web first started, and I confess to continuing that infatuation until recently. I hadn’t even considered the possibility of digital content without links until I started reading the NY Times on their app instead of their web site. However I’m coming to the conclusion that in-content links are a never-ending rabbit hole of distraction that actually prevent me from mentally engaging with the writing and seriously considering the thesis or opinion being expressed, rather than just linking through. Links also keep me from enjoying the quality of a journalist’s or author’s writing, which for publications like the New York Times is often very high, especially for features. Note that I am talking about aesthetics, not technology. I’m perfectly content to have the same lean-back reading experience on my smart phone as in print.

Links were great for the web when it was all early adopters who were really excited to link to each other, like Twitter @ reply shoutouts, but they were adopted wholesale into richer writing by bloggers, journalistic feature pieces, and other content they were never intended for. Blogs and online news have become so link saturated that as a writer the pressure I feel to link to the sources my ideas has reached the point where it has become a distraction and interference with my writing.

In the obsession with the provenance of ideas rather than their content, we are missing the point. Once upon a time links made sense as a way to show where other relevant information lives. However now that we have Google, there is no need to link to everything that explains each term in our writing. See something you don’t understand? Look it up. Want to read the post that inspired this piece? I’ve included enough information for you to find it pretty easy on Google. Too lazy to look it up? It probably wasn’t that important anyways. 

You get the idea.

Legal Ruling Analogizes Twitter to a Colonial-Era Bulletin Board

In United States of America vs William Lawrence Cassidy, in which Cassidy was accused of harassing a Buddhist religious leader via Twitter, the judge drew a fascinating distinction b/w public speech on Twitter and blogs on the one hand, and speech "specifically addressed to and directed at another person" such as email (and Twitter DM's one presumes?). The distinction was based on an analogy to the communications media available at the time that the Bill of Rights was written.

The judge said that a blog, or a micro-blog, was like a bulletin board that a colonist might have planted in their front yard: “If one colonist wants to see what is on another’s bulletin board, he would need to walk over to his neighbor’s yard and look at what is posted, or hire someone else to do so.”

Twitter, according to the analogy, would be like having news from one colonist’s bulletin board automatically show up on another’s. The key is that the second colonist could choose to “[turn] on or off" such a feature on his bulletin board. “This is in sharp contrast to a telephone call, letter or e-mail specifically addressed to and directed at another person,” he concluded.

I love these kinds of historical analogies to existing technology. Basic human needs hardly change over time, so every new technology should have a functional analog from an end-consumer perspective.

In this case however I think the judge's analogy is flawed. Twitter is designed for @ replies to indeed be addressed and directed at another person, despite also being public. The analogy would be something like writing an open letter in the newspaper harassing the victim, shouting at her in the town square in a voice loud enough for all to hear, or perhaps writing her a letter and distributing it to the public on a leaflet in addition to giving her a copy. I'm not a legal scholar, so have no idea what the legality of this would be.

The story was reported by the New York Times here.

Sunday, December 11, 2011

How Air-Conditioning Created Our Current Political Climate

I'm deeply fascinated by the social effects of technology, but this is a particularly good one:

Before there was a long-tail internet full of self-reinforcing blogger and social communities; before there were 24-hour news cycles and Fox News; before there was cable even; there was something even simpler and more disruptive: air-conditioning. By making life in the South more palatable to Northerners, air-conditioning changed the country's demographic landscape, which in turn changed our political landscape. The migration to the South skewed towards older individuals and retirees, who tend to be more conservative. This simultaneously made the South more conservative and the North more liberal. As the Democratic Party became more liberal, the tensions with the conservative Dixiecrats grew until they gradually and then completely shifted to the Republican party. This led first to the liberalization of the Democracts and then to the hard-line conservatism of the Republicans.

Indeed, the first secure Republican seat outside of Appalachia was St. Petersburg, FL - a winter resort - and the second was Dallas, TX.

Credit for this theory and the much more detailed research and analysis that went into it goes to Nelson Polsby, one of the foremost experts on the US Congress.

Monday, December 5, 2011

Henry Blodget is Conflicted out the Wazoo.

This disclosure comes from Blodget's article on the Silver Lake - Andreesen Bid for Yahoo. And it's awesome.
DISCLOSURE: I work for Yahoo (as a host of Yahoo Finance). I am a Yahoo shareholder (since 1998--oof). I know tons of people at Yahoo and on Yahoo's board. I know lots of Yahoo investors, many of whom I like personally. I know Marc Andreessen, Reid Hoffman, and many of the other players in this drama, and I like them personally. Marc's an investor in Business Insider, which I greatly appreciate. Yahoo and Business Insider have a syndication partnership, which I am thrilled about. Yahoo's bankers, Allen & Co, are investors in Business Insider, and I like them personally and don't like to do things that make them not like me. I have relationships with dozens of other folks that might create conflicts of one sort or another when I write about this topic. So, basically, I'm conflicted out the wazoo.

Tuesday, November 8, 2011

Facebook's Endless Conversation Threads Are Creepy

Yesterday I went to send congratulations over Facebook to an ex-girlfriend who just had her first child. When I landed on the messaging page I had a rather awkward experience. Since Facebook shows your entire messaging history in one column, and since we only used Facebook to communicate at the beginning of our relationship, I was presented with a string of intimate messages from another era that were, let's just say, grossly inappropriate to my current heartfelt message to wish her the best in her new motherhood and her life with her husband. It was as if Facebook had sent me back in time and was denying that my life had different phases and that while I might know the same people across them, I might want to start the conversation afresh.

Monday, November 7, 2011

Is Becoming a Nation of App Builders a Bad Thing?

The New York Times Magazine launched a new column this weekend called "It's the Economy," by Adam Davidson, designed to "demystify complicated economic issues." Davidson knows a little about this, as the cofounder of Planet Money, "a podcast, blog, and radio series heard on NPR’s Morning Edition, All Things Considered and on This American Life." His first post was a provocative article called "Can Anyone Really Create Jobs?" The thesis was that only a broad improvement in the economy could create jobs, and there was nothing that CEOs, Governors, nor even Presidents could do to create them directly (except potentially for stimulus on a scale that is politically unfeasible).

Most provocatively - at least to the circles in which I run - was his assertion that:
We don’t need to become a nation of app designers. An economic downturn is a great time to learn things — carpentry, say, or aerospace engineering — that others will eventually pay for
In other words, tech is being driven by a force that Davidson fundamentally believes to be unsustainable: the rise in apps, mobile and web, that are in turn driving the consumer web boom. This is interesting to consider given that tech is one of the few sectors that is not just hiring but can't do so fast enough, and because of its implications for the "are we in a bubble" debate.

I'm not sure if I agree but I'm not sure if I disagree either. It comes down to whether a startup is just an app or a real business. Apps are a powerful technology like the Internet is a powerful technology, but just as with the Internet the sustainable companies will mostly be businesses that leverage apps, rather than app businesses.

Thursday, November 3, 2011

VC, Like Every Other Industry, Gets Disrupted but Survives

I don't usually like to repost whole articles, but sometimes something comes along that I like enough to do so anyways. I remember the "conventional wisdom" Pascal writes about as being like gospel from 2007-2009, when I was in business school, yet the startup world keeps evolving in ways that even the "professional" visionaries never quite see coming. It should be interesting to see how long the current "barbell" model lasts.
"For a while, the conventional wisdom on venture capital was fairly straightforward: because of the dotcom bubble, VCs had grown too fat and raised too much money. This wasn't apparent because funds are typically raised for 10 years, but now was the time of reckoning, when VCs would start dropping like flies and even the top of the industry would have to slim down.
Then, two funny things happened:
  • Plenty of small funds ($20-$50 million) started popping up,
  • in Silicon Valley and elsewhere;
  • Some funds have taken to raising huge funds, sometimes in the billions of dollars.
What's going on? 
VC is not just slimming down (though it is, as the chart above shows), it is completely reconfiguring. 
On the side of the small VC funds (the so-called "superangels"), they are largely happening for two reasons:
  • Web businesses are incredibly capital efficient and so smaller fund sizes make sense (the demand side);
  • Through sheer math, smaller funds have a better time delivering ROI to their investors (the supply side). 
On the side of the mega funds, here's what's going on: there is a "flight to quality" for LPs (Limited Partners, the institutional investors who invest in venture firms) who have gotten battered by low VC returns over the past decade (not just in tech--biotech and cleantech have been disappointments as well). Even though they are cutting their allocation for venture firms overall, that's still a very large pie, and more of that remaining pie is going to the very top funds.  
So instead of getting a VC industry that looks much the same except a lot smaller, we're getting a VC industry that's smaller but also very different, with a bunch of very small funds on one hand, and a handful of very, very large funds on the other hand.
Stuck in the middle with them, some VC funds that are sticking to the traditional model, like Union Square Ventures and Sequoia Capital, are thriving. (And others dying.)
From The Way Companies Are Getting Financed Is Completely Changing
Pascal-Emmanuel Gobry

Saturday, October 8, 2011

What Steve Jobs Taught Me About Technology and Forgiveness

Dear Steve,

I never knew you. I never really even liked you, to be honest. I thought you were arrogant and controlling, a genius of consumer psychology who turned everything we know about technology adoption on its head, but a sort of evil genius – or at least a selfish one – who did it all for his own legacy (you never struck me as financially greedy), and who did not hesitate to trample on anyone who stood in his way.

It took your death to let me see you for who you really were: an intensely focused man who cared deeply about bringing beauty and elegance to the digital world; who wanted the benefit of computing to be not just available but attractive and even exciting to the majority of society that just wants to enjoy their tools and toys and could care less about hacking them. I was ripping MP3s in 1997 using Winamp; why did I need iTunes? I knew how to install programs (not "apps") on my color, touch-screen, 3G smartphone six months before the first iPhone and 18 months before the App Store. Why were people so stupid and simple-minded that they needed Apple to hold their hand on the way to these already self-evident technologies?

As I grew up I started to realize that life was too busy and complex to master everything, and that it was nice to rely on experts in fields that I couldn’t be bothered with learning. I don’t want to be an electric engineer or a literary critic – I want my electricity to just work and I want other people to review books for me so that I can easily find the ones I want. Slowly I came to understand that most people look at technology the same way – they just want it to work so that they could focus on their own lives. Yet it took your death to let me see that that was your raison d'être, the thing that drove you to do all that you did: making peoples' lives simpler, not self-promotion.

And yet the greatest insight you gave me in death was not the greatness of your life but how I had blinded myself to it. The gnawing, empty pit I felt on hearing the news forced me to ask the uncomfortable question: why was I mourning for a man I had no great fondness for during his life? 

For two days I wrestled with this question. It wasn't until last night, on Yom Kippur - the Jewish holiday  of fasting and asking for forgiveness from God and ones fellow man - that I found the answer as I drifted off into sleep.

Monday, October 3, 2011

Bitly's Slowing Growth

As I was doing some research on Bitly at the request of one of their investors, I read a number of articles that mentioned the rate at which Bitly-shortened links were being clicked on.  In March 2009, 87M click-throughs were recorded by Bitly. Two years later this number was 7 billion. I decided to collect a few data points in the middle and see how Bitly's "link-clicking" (for lack of a better word) was growing over time. The graph is below and it is stunning:

Those who are interested in the exact numbers and data souces can view the underlying Excel spreadsheet here: (irony intended). This is far from scientific, but most of the numbers are self-reported and the trend holds even if small shifts are made to the timing of the data points. I would have liked to have a more recent data point but was unable to find one.

Wednesday, September 28, 2011

Thoughts on Centzy from the First ER Accelerator Demo Day #ERA1

(Note: This was supposed to be my thoughts on all the startups presenting , but I got lazy so it's only my thoughts on Centzy, the first company to present. What can I say, there are advantages to going first.)

Last Friday was the first ever Entrepreneurs Roundtable Demo Day, and I had the honor of watching a bunch of great startups demo and meeting a lot of fantastic folk from across the NY tech ecosystem. Anything in quotes is from the description of the company in the event program or something they said during their presentation.  This post includes exactly zero outside research.

1. Centzy

Overview: Centzy's is described in the event program as "a comparison shopping engine for local service."  That's a lot of buzzwords, so I prefer the way they describe themselves on their web page: "Find prices and ratings for every service in your neighborhood."  Centzy focuses on services costing <$100, or what they call "everyday services."

Apparently, only 25% of local services businesses post their prices online, and other local services such as Yelp, Google Place, etc. only post cost by crowd-sourced category (e.g. $, $$, $$$, etc.), if at all.  The consumer is left to the subjective, vague judgment of the crowd, or to making phone call after phone call to do any sort of price comparison.

  • This is obviously a huge market. I don't remember the latest quote for the size of the local services market but I think it's approximately $7 gazillion.  And there are, you know, a couple of small companies targeting this space.
  • I'm sure someone else is trying to collect local price data, but it's a big enough market for multiple startups to exit at good prices, and none of the big players seem to have this feature.
  • They are explicitly targeting women as their primary users. I can't stress how unusual and insightful this is. All the data shows that women overindex on practically every measure of social and digital media, yet the predominantly male founders tend to consciously or unconsciously target men (Whitney Hess has a lot of good thoughts about this, although the golden paragraph is buried in the middle of this post).
  • If my memory serves me they have a strong team, and the CEO gets bonus points for being a UPenn alum and for having degrees in Computer Science and Business :-)
  • What is their cost per business for acquiring - and maintaining - accurate price data?
  • What are their user acquisition costs?
  • Centzy claims that you can make an appointment right from your app, but it wasn't clear how they do this or if it was implemented yet.  They could get a cut of each sale if they could integrate with the businesses, but that will be a challenge that could require a huge sales force and some technological challenges. SeamlessWeb had to go through this with restaurants, but restaurants at least have screen-based POS systems. Services-based local businesses tend to have a simple credit-card swipe machine, or worse yet could be cash only.
  • Combining the previous points, can they get enough lifetime gross margin from each local business to overcome the acquisition/maintenance costs?
Conclusion: Like but need to dig into the execution.

Thursday, September 22, 2011 A Tool to Find the Most Relevant Person in Your Network to Talk to About Anything

This story about using is pretty awesome. (and SnapGoods) was co-founded by a friend and classmate of mine from Brown, so I'd heard about it, but I never really got it until I read this post. These use cases blew my mind.  It's exactly what you wish you could do with your social network but couldn't if you were a mere mortal without a million Twitter followers. I will follow up w/ some of my own use cases once I get an invite code.

Saturday, September 17, 2011

Personalization and Online-to-Offline, Not "Mobile, Local, Social"

The technology buzzwords of the day are “social, mobile, local“, but personalization and online-offline better describe the broader trends.


Personalization technology can be roughly fit into a few groups - targeting, collaborative filtering, social, and customization of creative, although in the real world these are often integrated and inseparable. If the internet started with the contextual and broad-based targeting of the offline world, and then moved to backlink-based search, personalization has long been taking market share from search as the mechanism to drive the online world from advertising to content to commerce (although search itself is becoming ever more personalized than more or less deterministic PageRank-style algorithms). The shift was enabled by the vast and accelerating rate of data online services collect about their users, but it only succeeds because of entrepreneurs who can figure out how to turn this data into information and then to action.

In ad-tech this has taken the form of behavioral, demographic, psychographic, and semantic targeting, in rough chronological order. My recommendation to premium publishers is to create halo and valence data to integrate into ad targeting ASAP to monetize the incremental value of their own brands vs. lower quality sites, and I think this represents an interesting void for ad-tech startups to fill. Collaborative filtering is invading the ad-tech world, with AdKeeper recently telling PaidContent that “The way to understand the ‘good’ ads from the ‘bad’ ones is to let consumers actually come out and tell us what they are.” Social ad-targeting is on everyone’s radar but cultural barriers remain as illustrated by LinkedIn’s misstep with social ads in August. Opt-in social recommendations have been far more successful, primarily in the form of Facebook likes and Twitter mentions, but this is not quite advertising. Personalization of creative is taking ad-tech beyond the question of what product to advertise where and to whom, but also what that ad should look like as the where and to whom vary. Companies such as SundaySky and EyeView customize video creative on the fly on a per-user basis, while Dapper and Tumri do the same for display. 

In content personalization has primarily taken the form of collaborative filtering by companies such as Netflix, Taboola, Outbrain, Sailthru, and nRelate, with some recommendations from the social graph although this again raises privacy issues.

Online commerce is increasingly personalized, with Amazon leading the way in applying collaborative filtering to suggest purchases, and practically every e-commerce site of any scale following in their footsteps. FourSquare is lead the way towards location-based analytics for brick and mortar merchants, while niche sites like BirchBox and Fitocracy can offer incredibly rich data to such mammoth industries as beauty and fitness, respectively.


I have long postulated that online-to-offline is a basic axiom of media, whose appearance in digital media and the mobile web are the natural evolution of these technologies rather than a paradigm shift. Every form of mediated human communication, from the printing press through the telephone to the various incarnations of the internet (Web 1.0, Web 2.0, mobile Web) has been about facilitating and optimizing real world results, rather than some sort of masturbatory self-referential information exchange (jokes about internet pornography aside). As technology matures it ceases to be technology per se but rather becomes just another tool to enable the satisfaction of our eternal human needs: food (Yelp, Menupages, Zagat), shelter (AirBNB, HomeAway, HotelTonight), transportation and navigation (ZipCar, GetAround, Garmin), in-person social interaction (Meetup, Evite, Paperless Post), work (LinkedIn,,, sex and intimacy (JDate, HowAboutWe, PlentyofFish) and finance (Mint, BankSimple, LearnVest), sports (RunKeeper, Fitocracy, DailyBurn), entertainment (Netflix, Hulu, CollegeHumor), etc. Email and sms are no more intermediated than letters and telegrams, and the technology of previous generations such as airplanes, ATMs, and microwaves were no less wondrous or disruptive when they were launched than the internet, smartphones, and tablets. This concept is neatly summed up by the Alan Kay quote that “Technology is anything invented after you were born. Everything else is just stuff.” It is true that the pace of disruption has accelerated, but I don't believe this represents a discontinuous break with the past.

The long-term trend in the world of digital media products or services – be they apps, software, hardware, etc. – is therefore not determined by feature sets or tech specs but by utility as a tool for solving a real-world problem, defined as effectiveness in creating real-world results with the least real-world effort. The digital media companies that succeed in transforming their “technology” into everyday “stuff” will be those that heed the above. Apple is the pinnacle of this transformation, but there is room for plenty more companies to get this (if they can).

Mobile, rather than distancing people from the real world, makes them more effective in dealing with it. Mobile has taken the utility of media to its natural conclusion, by bringing the media (“online”) to the physical location in which its consumption is most effective ( “offline,” aka “the real world”). Printed guide books and handwritten travel directions are perhaps the original forms of mobile media, but required far more effort while producing far inferior results. Their replacement by digital mobile media was therefore inevitable.

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Tuesday, September 6, 2011

September 2011 New York Tech Meetup #NYTM

20110906 Sept NYTM Notes.doc Download this file

This is an experiment to see what posterous does w/ my raw notes from the New York Tech Meetup. Will edit and repost later.

Sent from mobile

Posted via email from SYSTEMS ANALYSIS

Tuesday, August 30, 2011

What Makes A Startup Successful? 14 of the most interesting trends identified by the Startup Genome Report

Every once in a while an article comes along that is just so awesome you want to quote it in its entirety.  I haven't read through the methodology so take all these findings with a grain of salt.  The most interesting finding for me was that "balanced" teams (one technical founder and one business founder) significantly out-perform business-heavy and technical heavy teams.  To often I think technical founders question the value of a business co-founder, to their detriment.  Build it and they will come only works in the movies and exceptional cases.

The below is quoted directly from the TechCrunch article "What Makes A Startup Successful? Blackbox Report Aims To Map The Startup Genome"  the Startup Genome blog (it looks like TechCrunch ripped this off as their own):
  • Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
  • Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.
  • Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.
  • Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)
  • Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.
  • Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.
  • Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.
  • Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.
  • Most successful founders are driven by impact rather than experience or money.
  • Founders overestimate the value of IP before product market fit by 255%.
  • Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.
  • Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.
  • Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.
  • B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.
The full report is available here.

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Wednesday, August 17, 2011

iPad vs the Rest: It's the Marketing, Stupid

James Kendrick of ZDNet wrote a nice article today on why no one can challenge the iPad.  His thesis is not that the iPad has an unassailable first-mover advantage, that consumers automatically associate "tablet" with "iPad," that the iPad has the superior ecosystem, or any of the other arguments that are usually made.  Rather, according to Kendrick, it is the end-to-end pre-purchase experience that Apple presents the consumer.  While I am sure the other factors play a role as well, I think that Kendrick is on to something.

Essentially, Kendrick's thesis is that no one cares about the technical features of their tablet. Unlike a computer, the majority of buyers don't think of a tablet as something they need, but rather something they want.  They want the "magical" experience that Steve Jobs offers them, from his initial unveiling of the iPad at a frenzied press conference down to the last detail of his gleaming white Apple stores.  

By comparison, other tablets are aimed at the tech-savvy crowd, and come from companies whose DNA - and marketing message - is computing rather than consumer electronics.  Even if a competitor could come up with a marketing message that appeals to the masses, Apple's "coup de grace" is "carrying the magical marketing experience right to the cash register." Other tablet makers simply lack the infrastructure to even compete on the retail front.  Not only do other tablet makers lack their own retail channels, but the shopping experience that is offered is abysmal, writes Kendrick:
Go in any Best Buy or other big box retailer that carries tablets and there’s no telling what you’ll find. Maybe there will be a counter with tablets scattered all over. Maybe some of them will actually work. The only consistent part of the retail buying experience for tablets is that the sales reps don’t know much about any of the products, much less help you decide which one is right for you. They don’t care, frankly, and that message gets through loud and clear.
In the online channel, where design is more fluid, cheaper, and under the manufacturer's control, the other tablet makers should in theory be able to compete on the shopping experience.  However, writes Kendrick, this is not the case:

If you don’t believe that, simply visit and try to buy a TouchPad. It’s in the Home & Home Office section, and the first thing you see is not magical marketing, it’s a small sales page that compares the two models of the TouchPad. No pizazz, no marketing, just click to buy.
The same holds true for all online retailers selling tablets. They are designed for selling computers [emphasis mine], and expect the customer to have some idea what they want coming in. Their sites aim to help you decide between competing products, which assumes some prior knowledge. There is no sales technique at play, simple point and click to buy. Or to leave, which is apparently what most customers are doing if sales numbers are accurate.

So what can tablet makers do to compete with the Apple juggernaut, besides having better marketing campaigns?  A couple of off-the-cuff ideas:

  • Control the retail channel: either do a better job partnering with existing retailers, or set up more stores like the Samsung Experience.
  • Find alternative distribution channels to the traditional consumer electronics retailers, where they can be the exclusive tablet offered in the store.
  • Create a more compelling brand story around their products.  Apple realized long ago that computing is personal, and that people would identify with their computing devices like they identify with their fashion choices.
Ultimately however it will depend on tablet makers getting outside of their computer-seller box and getting into technology-as-fashion.
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Thursday, August 4, 2011

How iPhone, Android, and BlackBerry users stack up. Plus, 33% of Americans would rather go without sex than their smartphones.

This is a fascinating infographic on how addicted Americans are to their smartphones, as well as the differences b/w iPhone, Android, and BlackBerry users.  My favorite stats:

  • In favor of the appeal of Android's hardware diversity: 50% of Android users think their phone reflects their personal sense of style, versus only 35% of iPhone users and 43% of BB users.
  • In favor of the appeal of the iPhone to developers: Only 38% and 37% of Android and BlackBerry users have ever paid more than $1 for an app, vs 55% for iPhone users.  The dig on Android that users don't pay for apps might have some truth to it.
  • In favor of BlackBerry: nothing really.  Sorry RIM.


Posted via email from SYSTEMS ANALYSIS

Wednesday, August 3, 2011

Notes on the August New York Tech Meetup (#NYTM)

I finally got to go to the NYTM yesterday, for the first time since December.  I can't quite remember the format from last time, but I really liked this one: domes were done in groups of three, making it easier to remember your questions; big companies were allowed to present their tech innovations (although the focus remained on startups, as it should); the event featured a really fun hack demo of a web-controlled helicopter (that was not allowed to go higher than 10 feet to avoid setting off the sprinkler systems, which apparently cannot differentiate helicopters from fires); and the happy hour was held in a hall on site, which allowed presenting companies to set up "booths" for interested members of the public, and avoided the loss of people that shifting venues inevitably entails.  

Here are my notes on the presenters, taking in real time on my dinky little QuickOffice app on my Android phone.  Audience questions were jotted down and have the presenters answers in the same bullet point, following the end of the question.  I may edit and/or add more thoughts later if I have time:

Friday, July 8, 2011

Why Facebook May Really Be Worth $100Bn

I wrote my last post about how Facebook was a bubble, so now I am going to eat my words and explain why I think Facebook might be worth its price after all.  

I have long been a FB-apostate when it came to seeing the platform’s monetization potential: big, yes, but $100Bn big?  Now however I’m starting to see the light.  And it's not because of advertising.

I believe that Facebook has won the online identity war, and the spoils will be enormous.

Companies like MSFT and GOOG have forever been trying to create a single identity for users to use across the web, from MSN Passport cum Windows Live, to the simply titled Google Account (or is it Google Profile?) cum Google+.  Other, parallel efforts have focused on being a one-stop destination for all things online, from the Yahoo! Portal to iGoogle. But FB has actually done it, and not as a bolt-on afterthought but as their core competency (granted the portal was Yahoo's core competency, they just weren't very competent at it).  Because identity is a natural monopoly, this makes FB’s dominance of this space difficult to challenge.  

Wednesday, May 4, 2011

More Proof that Facebook is a Bubble

(Note: this is largely a summary of Social Media Ad Revenues Will Reach $8.3 Billion by 2015 by Erik Sass at MediaPost)

In a post yesterday, Erik Sass noted that BIA/Kelsey predicted that the Social Media ad spending - a decent proxy for Facebook revenue, as they seem to be earning almost all of it - will quadruple from ~$2Bn/yr to $8.3Bn/yr.  This is a healthy 32% growth rate, "reminiscent of the first surge of Internet advertising in its glory years from 1997-2000 and then again from 2003-2008."

Facebook logoImage via Wikipedia

Facebook, as recently as January, was claiming run rates of $2Bn annually while selling through Goldman Sachs at ~$50Bn EV, or 25x revenue.  That's already quite bubblish, but check this out.  On Monday, the WSJ reported an implied IPO valuation of $100Bn for Facebook assuming a Spring 2012 IPO.  Assuming little cash or debt on the books (i.e. Market Cap approximates EV), and assuming that Facebook gets 100% of social media ad spend, this implies ratio of 12x for 2012 EV to 2015 revenue.  That doesn't give Facebook IPO investors very far (anywhere?) to go over those 3-4 years and get any returns.  That's practically the definition of a bubble - when future success is already baked into current prices - and then some!
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Friday, March 11, 2011

Where Are the Women in Tech ... Karaoke?

Folks who know me know that I like women, tech, and business, and perhaps with some connection between the topics spend more than statistically average thinking about why there are not more women in tech and business and discussing said topic w/ friends and associates.

Thus, when I read MG Siegler's post entitled There Will Be Karaoke: SXSW RVIP Goes East Coast Vs. West Coast Vs. Press Vs. Investors, I couldn't help notice that among seven singers representing four constituencies, that it was all dudes.

Now I realize that most of the reasons for the lack of women in tech and business are systemic (dearth of women in engineering, MBA programs, finance, senior executive positions across the Fortune 500, etc. etc.), and also that there is a lot of backlash that asking about the number of women in tech is the wrong question.

But seriously folks.  This is karaoke.  Can anyone seriously say anything in defense of a karaoke event being all dudes?  

How about looking at it from another perspective: when was the last time you went to a karaoke event that was all dudes, anywhere? (other than a fraternity or one of those fraternity-equivalent-finals-club-thingies in The Social Network)  Talk about low-hanging fruit for having women visibly involved on the tech scene (and for the haters, I'm hardly suggesting that karaoke should be a woman's place or goal in tech, but if you look at who the other participants are you'll see this is hardly about fluff)

Besides the sheer mind-numbing obviousness of it from a PR point of view (at least to me), let's look at the self-interest involved.  I'm going to go out on a limb here and say that maybe, juuust maybe, a guy and a girl together could sing a broader range of songs than two guys alone, and that maybe, just maaaybe, that would be an advantage in a karaoke competition?  To paraphrase MG Siegler's "There Will Be Karaoke" title, where there is karaoke, There Will Be Celine Dion.

Wednesday, March 2, 2011

Twitter and the Danger of Listening Out of Context

You know that guy that overhears a line of your conversation and jumps in, with the completely wrong context?  With Twitter we are all That Guy - or least the barrier to being That Guy is dropped waaaay lower.

I was just reviewing @christinacaci's tweetstream to decide whether to follow her (I did), when I read this one:

@ I also saw a few parks trending on Foursquare this afternoon, which seems a solid indication of springtime.

I was about to give her shit a la "you know you're in a social media bubble when you use Foursquare to tell the weather"- b/c seriously, who uses Foursquare to tell the weather? b/c I was feeling snarky after finding a time to catch up with her had involved more reschedules than a NY airport in a Xmas blizzard, although in her defense I've been guilty for a couple of the reschedules and she's been incredibly gracious about it - until I saw the context of the conversation and noted that the person she was talking to was a) the head of product at Foursquare, and b) had just made a comment ending in "Screw you Winter!"  Suddenly her tweet made so much more sense, was so much more nuanced than originally perceived to be, and wiped away all snarkiness to the point I felt bad about even the mildly-ribbing tweet I'd made about 4Sq having a new use case - telling the weather.

11:26PM, March 2, 2010.  Note to self: you're already pretty good at being That Guy; be double careful on Twitter!

Friday, February 11, 2011

A Theory of Saudi Fear of Egyptian Democracy

I was discussing with a friend recently why the Saudis are so worried about Mubarak's fall that they would offer to pay Egypt's aid if the US cuts it off.  I doubt they are worried about Saudis taking to the streets - Saudi Arabia is not only a kingdom, as opposed to a dictatorship pretending to be a democratic republic - the country is actually named after the ruling family, the House of Saud.

Tuesday, February 8, 2011

Wael Ghonim, Google, and the Greatest Social Media Campaign in History

The recent revelation that Wael Ghonim - the Google exec who was detained by the Mubarak regime and was missing from January 27 until today - was the administrator of the We Are All Khalid Said website and facebook page that declared Jan 25 to be the Egyptian day of protest makes for a plot worthy of Hollywood, or perhaps a novel by Naguib Mahfouz were he still alive:

Following the fatal and unpunished beating of a small-time businessman in Alexandria at the hands of the police after he "posted a video on the Internet of officers sharing the spoils from a drug bust among themselves" (scroll down in this link for the full story), an anonymous hacker decides to seek revenge.  Known only as El Shaheed - the martyr - he creates a page that galvanizes an entire nation against a ruthless dictator who has held power and destroyed opposition for nearly 30 years.  In a country threatened by sectarian violence and a populace so disenfranchised the trash in the street becomes a symbol of its decay, a day of protest is declared that hardly dares to hope (dream?) that perhaps it will be the one to finally bring this despot down when so many have failed before.  Using the latest in communications technology and the simplest handmade signs, a fierce unity is created between Christians and Muslims, Secularists and Religious, Rich and Poor, all rising up to take the revolution to the streets - even sweeping them in their wake(!) - while the world waits with baited breath to learn the outcome of the standoff between the people and their universally despised autocratic leader.  Men on horse and camel back, riot police, and fighter jets attempt to intimidate the people, but they will not back down.  Finally, the government cuts off the internet - but too late. El Shaheed goes quiet, but his role is done.  Older forms of social media - also known as word of mouth - take over.  Unable to ascertain his identity, a Newseek reporter writes:

"Fires still burned on the streets of the capital; in their flickering light, people huddled together to talk openly about revolution for the first time in many years. ... Perhaps somewhere in the crowds was El Shaheeed."

But alas our hero was nowhere to be found, and the drama builds.  

Thursday, February 3, 2011

Mirror for Sandmonkey - Egypt Right Now!

Sandmonkey is back online; you can read his blog (highly recommended) here:

I have saved my own copy of the post which he wrote before he was arrested and beaten, which at the time of my writing this is at the top of his blog (link above) or direct link here:

Wednesday, February 2, 2011

Why I Support the Egyptian People’s Revolution as an Israeli and a Jew - and Why You Should Too

The West, and Israelis and Jews in particular, seem to have come to the foregone conclusion that if Mubarak leaves power (probably better said as when Mubarak leaves), Egypt will be overrun by a barbaric horde of Jew-hating, warmongering  Islamists whose first action in power will be to rip up all peace agreements and send their entire military to conquer Tel Aviv and Jerusalem.  I understand their anxiety; Egypt has a powerful army and the idea of fighting an all-out war on the southern front - something we haven't had to do since 1973 - is scary.  I however am much more optimistic and support the Egyptian people unequivocally, as an American, an Israeli, and a Jew, despite my first concern always being for the welfare of Israel and the Jewish people.  I would suggest that other Israelis and Jews do the same thing, or at a minimum be supportive of the Egyptian people while watching carefully to see what kind of government emerges post-Mubarak.

Thursday, January 20, 2011

A Tale of Two Entrepreneurs, or Why Mark Zuckerberg Deserves More Privacy than Steve Jobs

The usual conversation about privacy in the tech world has been turned upside down recently.  The CEOs of Apple and Facebook have been in the news a lot about privacy recently, but not for the usual reasons.  Although I'm not a big fan of the way they chose to structure it, Mark Zuckerberg and Facebook´s investors certainly have the right to keep their company private for as long as they want and for whatever reasons they want, including Zuckerberg's own privacy.

Steve Jobs on the other hand, is running a public company with a $300Bn+ market cap.  That means that the public absolutely has a right to ask about the possibility that he will be unable to continue to contribute to Apple.  Obviously I am sympathetic to Steve Jobs' medical situation, and I wish him the best and speediest recovery, out of general humanistic empathy as well as a recognition of the loss his passing would represent to the technology ecosystem that I love and live off of.  I am also sympathetic to the general need for privacy, which only grows in times of personal duress.  But the trade-off for going public is surrendering your privacy.  Want your privacy?  Don't go public (see exhibit A, "Mark Zuckerberg.").

Thursday, January 13, 2011

Groupon's International Acquisition Strategy and Its Long Term Future

When it comes to acquisitions, Groupon has been most widely questioned for its rejection of Google's $6Bn offer (Facebook, which is five years older, has 2-3x the revenue, and is, well, Facebook, is probably the only VC-backed company to reject a larger offer, in absolute terms, since the dot-com bubble).

Tuesday they announced a trifecta of acquisitions enabling their entrance into India, South Africa, and Israel.  Clearly they wasted no time putting their $950M round to use (of which the firm probably only pocketed ~ $525M - but what's $425M among friends?).  What surprised me most though as someone who apparently was not following the fastest growing company in history closely enough, is that this was not even close to Groupon's first international acquisition and that in fact they've been on an international acquisition tear since last May, just after the last round of gargantuan fundraising.  In fact I'm not sure if Groupon has entered any international markets organically.

To me this raises some questions: