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August 31, 2005
When a Beta Isn't Enough
One of the great benefits of Web2.0 consumer internet services is that the product cycles have diminished. No longer are the next versions available and shipped every eighteen months like traditional shrink-wrapped software. Instead, when a new feature is ready, then it’s ready to go live to beta test. Google has led the charge of conditioning of us to view these beta versions as an ever evolving service. After all, GMail is still in beta well over two years after its initial release.
For startups, however, is there market adoption risk in the perpetual beta? Or, more importantly, is there risk in launching with only a half-baked or quarter-baked service? Yes, I know and agree with all of the virtues extolled in the continuous launch approach – immediate feedback from customers, quicker time-to-market, ability for building buzz. It seems to me, though, that the widespread early beta launching perhaps has gone just a little too far.
It appears that the word “beta” is slowly losing its original meaning. Or maybe it’s just evolving. Wikipedia says a “beta release usually represents the first feature complete version” of a product. Is that really true of all Web2.0 start-ups slapped with the “beta” moniker? Perhaps “alpha” (“still awaits full debugging or full implementation of all its functionality”) or “pre-alpha” (“not feature complete; that is, it is at the stage where designers are still wondering about what functionalities the product should have”) are more suitable labels.
The purpose of this post isn’t to complain over semantics, but about suggesting that startups more actively think about managing the expectations of its users. Many times I have visited new sites (wearing my consumer hat, not my VC hat) and been completely turned off because of the utter lack of functionality of the beta version. Will I forgive them and return at a later date remembering that, after all, it was a beta? Maybe, but less likely. Everything’s a beta these days, so why should I be any more tolerant of deficiencies? While the early adopter community may be forgiving and conscious of the Web2.0 beta paradigm, the average consumer is not.
I am not suggesting that we go back in time and resurrect extended product cycles. Hardly. I am suggesting that emerging web services startups should give some deliberate thought about what constituencies are ready to see a release – and especially a new launch – before it is opened up to the general public.
August 29, 2005
Fishing for a Podcast
Like Jeff Nolan and Russell Glass have recently expressed, I am struggling with the excitement surrounding podcasting. Yes, I understand that it is an extension of user-generated content into another media type and that it rides the wave of digitized sound files becoming ubiquitous with portable listening devices. I’ve listened to a fair share of technology-related podcasts myself (most of which have been forwarded to me by others), and they often provide unique insights (like Dave Winer’s May interview with John Palfrey and Jim Moore a month before they announced their RSS Investors fund).
But I think that the main difficulty I have with podcasts stems from the fact that they are temporal in nature. Unlike static text or still-photographs, audio files (and video files, for that matter) possess a time component to them. This attribute poses two issues: first, the content cannot be easily scanned and adjusted accordingly by the reader. I can skim an article or a set of pictures to determine if I want to read the whole thing or view one in more detail. Instead with podcasts, I am required to listen to the content in its entirety to fully appreciate the value contained within it. In addition, temporal content doesn’t allow for easy and direct pointing from other user-generated content. One of the great things about blogs compared to mere “old-fashioned” websites is the ability to trackback and point to another part of the conversation because an entry is permalinked. The ability to do this with audio files is more limited.
On the content creation side, no matter how easy the technology is now, it is still a larger production hurdle to create an audio file versus typing or taking a snapshot. Although I consider myself an avid blogger, I don’t feel the impetus to create in these formats.
Perhaps I am thinking of this content type too much in a blog paradigm and not in a news/analysis/entertainment one. Yet because of the limitations above, I am having trouble seeing the kinds of content that would uniquely find this medium best, as opposed to the extremes of purely text or a full audio-video file. While the full audio-video format enabling vblogging posses the same limitations enumerated above, it appears to me to be a much richer experience that transcends these drawbacks for many types of content.
But one person is just one datapoint (especially myself). Obviously there is a lot of enthusiasm surrounding the phenomenon, including blue-chip VC investments. Perhaps over time I’ll begin to see it myself; although I am just not there yet.
Mobile Phone Advertising
I’ve recently just begun to spend a little bit of time thinking about marketing and advertising on mobile phones. With my background in online/e-mail direct marketing, I can easily see the potential power of direct marketing opportunities that the mobile phone platform offers. Obviously, members of groups like the Mobile Marketing Association (MMA) see the promise as well. It seems to me, however, that most of the mobile marketing to date has been the utilization of white-labeled storefronts for brands to extend into images, ringtones, and games. Or MMS/SMS opt-in promotions. Will we ever see banner-ads or text-ads, akin to those online, enabled by advertising networks embedded into applications or even onto the deck itself? In five years will I open up my flip-phone and see an ad before I answer my call?
It seems to me that the difference between online and mobile marketing is that the consumers fundamentally view media consumption on these channels as different. Consumers expect everything online to be “free,” and thus tolerate an amount of intrusiveness from advertising. On the other hand, consumers are conscious of and willing to pay for their phones’ service and the content that goes with it. An inappropriate or ill-timed advertisement could overly disgruntle a user away from either the carrier or the marketer. The hurdle promote on a mobile phone seems like a high one which deserves careful attention of those who are pursuing these avenues. But if approached correctly, it seems like quite an opportunity. Because of this working hypothesis, I’m going to continue to spend more time here; again, it’s something that I’ve just started to think about.
Browsing Office and Storage 2.0
Coincidentally (or maybe not so) in the past week, I’ve been in a few conversations about more and more apps coming to a browser near you enabled by Ajax – namely an alternative to the Microsoft Office suite. Paolo Massa is working on AjaxOffice and Writely is an alternative to Word already available in beta. Which begs the question – where is all of this data going to be stored? Flickr already stores my photos, but what about every other filetype? Perhaps it would be better if all of my own files were tagged and stored remotely, as Jesse Andrews suggests, “Web 2.0 needs Data 2.0! A del.icio.us for files.” Will the browser finally render my OS inconsequential and break the MS stronghold? I am not saying that these ideas/plans aren’t without concerns, but they are definitely thought-provoking.
UPDATE: It’s tough to continually monitor the blogosphere for everything relevant to a conversation. Case in point, last night I as I was catching up, I saw this post by Robert Scoble and the follow-up by Om Malik debating the role of thin clients. Also, read Richard MacManus’s thoughtful piece as well.
Posted by at 4:58 PM | Permalink | Comments (0) | TrackBacks (0)August 25, 2005
A VC Wiki Solution?
Yesterday Jeff Nolan raised the idea of creating a VC wiki as a central repository for all of the valuable content created by venture bloggers as of late (spurred on by Brad Feld & Jason Mendelson’s Term Sheet Series). I asked the same question in a post two months ago – is it time for a venture capital reference wiki?
Since that blog entry I’ve had a number of conversations about the idea, both over e-mail and in real-time. And because of these, my thinking has changed. My own new thoughts on the issue are as follows:
1. Reference vs. opinion material. Much of the content which would be included is not necessarily purely reference material as I first believed, but really advice-based content. Though it is not time-sensitive (like most other information in wikis to my knowledge), it is indeed opinion-based, as opposed to purely factual. So while Allen Morgan’s Ten Commandments from Entrepreneurs is a great timeless series of pieces to continually refer back to, I see it as inherently different type of content than, say, that found on Wikipedia. Somehow to me, the type of material we are discussing doesn’t neatly fit into a reference wiki form.
2. Whose content is it? My hypothesis is that some of the leading VC bloggers would prefer not to decouple their content from their own site, as they would like to retain the associated authorship of such work. (Note that I am not attempting to ascertain the intentions of anyone specifically, just making a broader general comment.) An attempt to create a site that includes VC authors’ text (with citations) rather than just links to their text on their own sites may go against the grain of how the spirit of how their content to was intended to be used. And I agree with this sentiment from a reader standpoint as well - there is value not just in citing an author of the content, but also tying the content with an author. Because much of the content is advisory rather than just factual, I want to know who is communicating it to me.
3. Limiting conversation. An attempt to create a go-to reference site for VC advice (as a living document continually evolving with consensus) limits open and outwardly facing discussions of the issues at hand in the blogosphere. While there are often cases where there aren’t severe disagreements on certain topics, I would think that there are subtleties to many issues at hand which are worth highlighting in conversational format (as opposed to a reference one).
Because of all of the above concerns, I don’t think that a VC Wiki is necessarily the best way to proactively archive the extremely useful time-insensitive content that is emerging in the VC niche of the blogosphere. Perhaps the better way to approach the situation is to be proactively organized about tagging content of this type in delicious, as both Brad Feld and Toby Padilla suggested in comments to my original post. I’ll think about that notion more. That being said, both Ross Mayfield and Tom Shields are hosting viable VC Wiki sites that could be used as a platform, if consensus moved in the other direction. Other thoughts and reactions? Obviously this is an evolving discussion.
August 19, 2005
Seeding User Generated Content
One large difficulty facing web startups relying on user-generated content is the chicken-and-egg problem of creating both the content and an audience. Without people creating/sharing material, there’s no reason for people to surf the site; without traffic, there’s little reason to contribute.
As I’ve written before, different content types require different levels of contribution before the offering as a whole delivers tangible value. Photo sharing sites, for example, don’t need a large number of contributors before the content contained within is worth viewing. On the other end of the spectrum, however, are local yellow pages and directories. These sites necessitate both a wide and deep contribution-level before the service is a go-to destination for such information. Once this magical level of “critical mass” is reached, a virtuous cycle of audience and content-generation follows.
So what’s a company stuck in this situation to do? One way to prime the pump is to in effect pay users to contribute. Judy’s Book rewards users with a $5 coffee card and for adding five posts and gives them an iPod Shuffle for writing 50 reviews and inviting ten friends (aiming at both sides of the equation). It’s appealing to explicit & external rather than the intrinsic rewards for creating material.
Unfortunately for startups, the large portals and established internet players have a leg up because they already posses an audience. (Yahoo Local just relaunched emphasizing user-generated content and already has some good user-written reviews of restaurants.)
But my favorite example of seeding user-generated local content just came last from Amazon. When I opened my inbox this morning, I found an email entitled, “Tell us about Masthead Venture Partners”:
Dear Amazon customer,We want to introduce you to the new Amazon.com Yellow Pages!
We are sending you this email because you recently shipped an Amazon.com purchase to the location of Masthead Venture Partners. You will find Masthead Venture Partners listed in the Amazon.com Yellow Pages because we have provided a free business listing to them.
We are asking business owners, employees, and customers to submit more information about businesses free of charge, so we can help businesses and customers find each other. Last year tens of millions of customers conducted a shopping transaction on Amazon.com, so we know this will be a powerful tool for business owners and consumers alike.
You can help improve the information of Masthead Venture Partners now!
* Tell us more about the business:
http://www.amazon.com/gp/yp/B0008JOL94/ref=yp_ema_dp_biz/#improve
* Upload your own custom pictures of Masthead Venture Partners:
http://www.amazon.com/gp/yp/B0008JOL94/ref=yp_ema_dp_ima/#improve
* Write a review!Check out the current free business listing and see how you can make it better!
http://www.amazon.com/gp/yp/B0008JOL94/ref=yp_ema_dpBy taking a moment to tell us more about Masthead Venture Partners you can make the business listing more attractive to potential customers.
Thank you for using Amazon.com Yellow Pages!
Sincerely,
The Amazon.com Yellow Pages Team
Specific, targeted, personalized direct marketing – now that’s a great way to seed user-generated content. I think Amazon was very clever in realizing and capitalizing on the asset list that it already owns.
(Yes, this communication could be construed as spam-like and alienate some customers. I hypothesize that a cross-functional e-mail like this one sparked internal debate in the company.)
As user-generated content continues to become increasingly important, I think we will continue to see new and innovative ways to spark both an audience and material for that audience.
Posted by at 10:14 AM | Permalink | Comments (1) | TrackBacks (1)August 18, 2005
Google to Gobble Gobble Gobble or Just Selling High
Just one day after I suggested that Google’s acquisition strategy is to cherry-pick small pre-significant-funding startups to buy innovation and engineering talent, the company announces that it plans to sell approximately $4.2B in shares of its stock. And as Paul Kedrosky concluded, “It seems fairly certain, therefore, that Google has some company-buying in mind.” Large company-buying if that’s the case. It appears that Google’s past purchases are perhaps not necessarily indicative of its future ones. So now both low-flying seed-stage companies and larger-cap techs are potential acquisition targets. Internet startups seeking liquidity have even more reason to become hopeful.
The alternative explanation, however, is that Google views its stock as overpriced and is “selling high” while it can. This is at least the second event this month of “selling search” - the other was Jupitermedia Corporation selling Searchenginewatch.com and the SearchEngine Strategies show.
UPDATE: Apropos, you can check out Rags' blog for a job posting from Google "looking for people of all levels of experience to join its M&A team."
August 17, 2005
Google Gobbles Mobile
Earlier this morning, it became public that in July Google purchased Andriod, a company which makes mobile software for mobile phones. While there is little known about the company or the transaction, I have a couple quick thoughts and reactions:
• Between this acquisition and that of Ubiquity Labs, it is now obvious that Google has its sights directly set on the mobile platform as a next frontier. To me, it is clear this event is just another recognition of the fact that mobile phones are rising to become an integral personal media device (PMD) with functionality and uses far beyond just two-way conversation.
• This acquisition is just another in a chain of Google and Yahoo cherry-picking small pre-significant-funding startups. I, along with others, have wondered if there is new model for startups in the post-bubble era (see my earlier post). The counter argument, of course, is that News Corp is looking for acquisitions with very deep pockets – and a willingness to use them. The difference, it seems, is that while Yahoo and Google are buying innovation and engineering talent, Murdoch is potentially buying an empire. These two dissimilar strategies of Internet company acquirers are providing ripe exit strategies for startups regardless of size and stage.
August 16, 2005
One Size Search Doesn't Fit All
With search becoming increasingly verticalized, I am seeing both the need and demonstration not just of searching within a specific domain, but also ranking results along multiple dimensions in that domain. For example, Indeed lets me search for positions with certain job titles, as well as identify how recently those jobs have been posted. Blinkx.tv has a great slider-bar feature that lets me shift between the importance of date and relevance in ranking my results. It even lets me toggle the sources of video content. Kayak has similar slider-bars allowing me to sort through flights easily by time-window.
But I (and mabye others?) want even more. As we become more sophisticated in what we are searching for, we should be able to toggle and sort though the dimensions of what is most important to us. For blog searches, sometimes I want to ensure that I read something with strong authority, sometimes I want to read something with the utmost timeliness, and sometimes I want to read something with highly dense mentions of a certain topic.
Google’s PageRank philosophy worked well in identifying the most relevant static pages. But as we are continuing to move towards the Incremental Web, perhaps the criteria for determining the best given search result is multidimensional rather than one-dimensional – and easily changeable by the user.
August 11, 2005
All That (Content) Glitters is Not Gold
Starting before it, but increasingly so after the MySpace acquisition last month, we at Masthead have seen an inordinate amount of companies pitching web services with a foundation on “user-generated content.” I personally believe that there is a lot of opportunity in user-generated content – we just invested in Intercasting, for example, which enables it on mobile phones. But a careful filter needs to be run through all of the companies out there screaming the buzz-word du jour.
All Content is Not Created Equal. First, different applications and different vertical subject areas have different users who are supposed to create the content. And there are many reasons why people generate content in the first place. For some, it is for intrinsic rewards, like a positive feeling of contribution for sharing and a sense of connecting with others. For others, the rewards are intangible and external, as many blog authors are seeking fame and recognition. And in some cases, like on Helium Knowledge, the rewards are explicit, tangible, and external ¬– there users get paid to contribute. For every vertical, the rewards must be sufficient in the area to match the user’s motivation to contribute. This “why” of user-generated content is extremely important, as it is paramount that the content itself contains value.
Size Matters. User-generated content can come in all shapes and sizes – from microcontent (text snippets, photos, and location information) to full-length (podcasts, vcasts, essays/articles, etc.). Does the type of content that users are going to generate match the type that they want to consume? How much of a critical mass of content is required before the system or offering as a whole delivers tangible value? In some cases, a tiny bit of info is immediately beneficial for the user, but in other cases it is not. (ex: Perhaps a wiki of all scientific formulas is much less valuable without a strong set of them in the compilation?)
Build it and they Will Come? Just because users can create a collection of content, it doesn’t mean that it is in turn valuable to consume it. Some areas of subject matter require certain authority to support the material. Trusting the source is imperative in nearly all types of information. So while end-users bear great authority on TripAdvisor, in some non-consumer applications they do not. There is a reason why people turn to experts in many cases for information – they’re the ones who know better.
User-generated content is indeed valuable, and I think that there is tremendous opportunity for significant innovation and investment in this arena. But professional content-generation – “traditional” media – is not going away anytime soon. All types of information out there should not be user-generated. The dimensions enumerated above (along with many other characteristics) must match both the producers’ and consumers’ needs when they are one in the same. So yes, there are certain applications where user-generated content makes a lot of sense; but there are many verticals and applications (especially outside the consumer arena) where content creation should be left to the professionals.
August 9, 2005
Why I Like Our InterCasting Investment
Yesterday, Masthead Venture Partners, along with syndicate partner Avalon Ventures, announced an initial Series A investment in InterCasting Corporation.
The company’s vision is to "enable the mobile media network revolution" by becoming the "first Location-Aware Media Networking Operator (LMNO) providing applications for personal mobile devices." InterCasting has already launched its first application, Rabble, currently available on Verizon and soon on many other carriers’ handsets. Rabble is part blogging, part location-based personal networking application that connects individuals in a unique and intuitive way by turning "users" into "producers" with mobile user-generated content. And this product is just the beginning – as they are building a platform to create markets for many types of user-generated location-aware mobile content.
Working with both Rich Levandov and Brady Bohrmann here at Masthead, along with Steve Tomlin at Avalon, I’ve been closely involved with the deal. And like I outlined with our NewsGator investment in April, I wanted to highlight why I personally like this company and the investment in it. In short, I believe that InterCasting is at a unique intersection of "the right time & place" with "the right people to do it."
The right time and place. There are numerous converging trends that position this company in a unique situation. First, the company is riding the wave of the mobile phone’s transformation towards a fully integrated personal media device (PMD, as the company calls it). In addition, the rise of user-generated content as a viable mode of self-expression and information gathering, while greatly proliferating on the web, is still in its infancy in the mobile space. The introduction and of location-aware meta-data through location based services (LBS) likely later this year will also have a profound affect on mobile applications and content. And finally, the potential opening of carrier platforms because of alternative data sources and the increased acceptance of social networks as viable personal introduction & connection source also provide support for our investment thesis. Each of the previous trends plays a vital role in determining "why" this opportunity is distinctive and exciting, along with establishing the reason "why now."
The right people to do it. Both founders, Shawn Conahan and Derrick Oien, have a true drive and passion for the business. Shawn is a real visionary to lead the company, as evidenced by the thoughtful and articulate writings on the InterCasting blog. As President of Moviso, Shawn built the company into the largest ringtone provider in North America before it was sold to InfoSpace in 2003. Derrick is equally as impressive, with a successful track record of building and running growth media business. He was both President of VUnetUSA (a division Vivendi Universal) and COO of MP3.com, leading to its sale. One testament to their ability to execute is the fact that they were able to fully develop and launch a mobile application while still in bootstrapping mode.
The perennial venture capital discussion is whether to bet on the right market or the right team. Sometimes this tradeoff is really a false dichotomy, when both are outstanding, as I believe it is in this case. There are number of exciting opportunities emerging in the mobile space, and I believe that the InterCasting ship has the wind against its back with a great crew.
Posted by at 7:48 AM | Permalink | Comments (0) | TrackBacks (0)August 5, 2005
Public Information Made More Public
Slashdot reported today that Google is not talking to CNET until July 2006 in protest over an article published by the online publication which included personal information about Google CEO Eric Schmidt. I’ll leave the comments about the validity of each side’s argument to others, but I wanted to highlight something which John Battelle picked up in his reaction, “that a search engine never gives a full or necessarily accurate picture of the person.”
The original CNET article uses Schmidt’s publicly-available information as a sensational teaser, but then goes on to explain that the more potentially dangerous situation is the information that Google collects and doesn’t make public. While I understand why that is a concern, I believe that the dissemination of partial and incremental already public information is a greater threat in the near term. There are many public relations controls that will inhibit a highly visible company like Google from grossly misusing the information that they posses.
But personal publicly available information is not only becoming easier to retrieve, but also more widely available. Yes, search engines have exposed a set of information that was available previously, but would have been cumbersome to practically seek out. As we move further along in Web 2.0, new technologies will make this issue increasingly salient. Perhaps everything available about you online will soon be tagged with your name on del.icio.us (as George Bush is today). Or any photo taken of you could be found on Flickr. The rise of user-generated content opens the possibility a wealth of potential information about someone – perhaps out-of-context or misrepresented – available to anyone with a few keystrokes and clicks of the mouse.
In previous post entitled Knowing Your (Incremental) Online Reputation, I made that case that “your online reputation does matter, and I’d argue it will increasingly do so.” Today’s concern originated over personal information about a celebrity CEO; tomorrow’s could be over non-famous people with an incomplete or inaccurate online presence.
August 3, 2005
The (Perfect) Timing of Selling Search
Yesterday Jupitermedia sold its SearchEngineWatch.com and SearchEngine Strategies show to UK-based for Incisive Media $43M in cash. CEO Alan Meckler outlines his reasoning in his blog stating that it was the most effective way to raise cash for future acquisitions given that he views his stock price as undervalued.
Rafat Ali of paidcontent.org wonders,
“They have a saying in our circles: When Alan Meckler sells, you know the market is at its peak. Meckler is the king of timing, and has always sold his companies at the right time. Does that mean people should get out of search? Just a thought...”
Hmm… I sincerely believe that there is still additional upside in search, but Rafat raises a very interesting counter-perspective to ponder.
August 2, 2005
Embrace or Shun RSS
Last week, Forrester released a number of reports on RSS for marketers. One of the notions that emerged from the study was that “only 2% of all online households were ‘using RSS.’” WebWatch at Silicon.com picked up on this fact and published a quick piece entitled RSS: 98 per cent of Surfers Shun It:
“If only they loved it as much as the marketers. While news sites and bloggers are getting hot under the collar about RSS, it seems hardly anyone else is.”
The spin on this story is completely misleading. Charlene Li identifies that the number doesn’t “include all the people who may be using RSS (for example, through My Yahoo!) and don't realize it.” She’s absolutely right and this point should be re-emphasized. I wonder if you asked a set of U.S. households if they were currently using SMTP - would even come close to actual e-mail penetration?
That is not to say that there aren’t issues here - one problem is that subscribing to RSS feeds isn’t always easy. This difficulty has likely inhibited the growth of general adoption of RSS-enabled blog and news reading. But the misconception should be cleared up that RSS isn’t just for blogs, news, and marketing materials. It’s a technology that enables and facilitates the syndication of all types of content. Yes, the implementation of applications on top of it are a little raw right now, but the power underneath it is still emerging.
According to Dictionary.com, The American Heritage Dictionary defines “shun” as “To avoid deliberately; keep away from.”
Consumers aren’t deliberately avoiding RSS – they are both still learning about and using it without even realizing it.
Posted by at 9:02 AM | Permalink | Comments (0) | TrackBacks (0)August 1, 2005
Knowing What You Don’t Know
Every entrepreneur is a first-time entrepreneur once.
How do VCs, then, evaluate first-time entrepreneurs? How can they garner the confidence to place both their money and time in someone who hasn’t started a company before?
Of course, investors look at other past experiences as both a signal and substitute for an entrepreneurial endeavor.
A friend of mine at another firm told me that they also explicitly look for one intangible quality. For every entrepreneur who comes in to pitch they ask the question, “Does he know what he doesn’t know?”
Yes, entrepreneurs know the information that they know. It is this experience and comprehension that guides them, and gives them inspiration. But what about the information that they don’t know? Are they aware of their lack of knowledge in a certain area? Or are they (blissfully) ignorant of it?
“Knowing what you don’t know” means understanding where your knowledge-set is limited. If often suggests asking for help, guidance, and additional information when it is needed. This quality doesn’t preclude someone from being confident; quite the opposite, it demonstrates self-assurance to understand your own shortcomings and seeking assistance when appropriate rather than act upon a loose foundation of information.
Venture capitalists want to be assured that their money is in knowledgeable hands. But they also want to know that those hands will look to others when they aren’t fully capable. It is much better to admit that one doesn’t know something than to act blindly without it. And it takes a special person to even realize and perceive when an area of understanding is lacking.
You know what you know, but do you know what you don’t know?