Friday, August 29, 2008

Is the smallness of Web 2.0 killing the big wins?

Great story from the New York Times.
Judy Estrin, who has built several Silicon Valley companies and was the chief technology officer of Cisco Systems, says Silicon Valley is in trouble. In a new book, “Closing the Innovation Gap,” which will be in bookstores Tuesday, she writes that the valley’s problems are symptomatic of a crisis in innovation facing the country as a whole.
I have to agree, but it's not just Silicon Valley. Unfortunately, I'm learning this from direct personal experience with my own startup.

We started as ClickCaster, a podcasting platform that was veryy good at making it simple to create and publish an audio or video podcast. We built a great product and great team. We did everything 'right', but podcasting, so far, hasn't become a business. So, about 6 months ago, we sold it to a company down in Texas (the URL, userbase and a license for the software). We kept the software and intellectual property as well as the team that built it and brought in some new business folks that really understand video.

We created a new company called Medioh and started work on what I call Broadband Social Television. Everyone we've talked to says it's the right thing and the right direction, including customers, and we've got a big jump on it with years of experience dealing with media on the web (creating it, aggregating it and distributing it with a social networking twist).

We want to augment, or better yet, replace, much of the existing media infrastructure with web based solutions. Tools, content and social sharing aspects... all at an order of magnitude less cost to implement, but with the same really big advertising revenues associated with traditional television.

The problem is, it's a swing for the fence kind of play.

There's significant competition, and, the huge legacy media companies think they know what's going o. Some do, but most don't. It just scares the hell out of investors because it's obvious there are only going to be a few winners.

In a word: A Bit-O-Chaos.

I love chaos. Within chaos lies massive opportunity, if you've got the ramp/resources to sniff it out and make it real.

We're as well positioned as anyone to do that (better than most) and we've started the conversation with VC's, but we're not getting alot of traction. Granted, it's early days, but the initial discussions, to date, aren't as encouraging as i'd like.

The market meltdown hasn't helped and, potentially, has killed off pretty much all the potential funding. People are afraid.

As Judy says, the 'big' plays scare today's investors. They're looking for the short term win.

Ms. Estrin traces Silicon Valley’s troubles to the tech boom. She said that’s when entrepreneurs and venture capitalists started focusing more on starting companies to turn around and sell them and less on building successful companies for the long term.
“Starting in 1998, there was such a shift in Silicon Valley toward chasing money and short-term returns,” she said.
For us, I suspect some of the problem comes from the "ITV" or "IPTV" push 10 years ago that failed so miserably. Billions where spent and it didn't take off. Everyone thought it would take a year or two and viola! we'd have webtv everywhere.

As Bill Gates says, we tend to overestimate what will happen in the next year, and underestimate what will happen in the next 10 years. He was so right.

It's been 10 years since the boondoggle of internet video from the late 90's, and the infrastructure, audience, technology and inclination is now very much there and very real.

But the money guys are afraid. They remember (or have heard) the late 90's horror stories and don't want to take the risk.

And as the article says her book implies, it's a broad problem.

Our fund raising situation? I think, we're just a symptom.

Thursday, August 28, 2008

Boulder Parking: A Sort Of Protection Racket?

I've heard of this, but I just experienced it directly today.

Boulder is running a scam on it's citizens and as far as I'm concerned it's a form of parking ticket enforcement fraud.

Know what this feels like? It feels like a revenue generating operation that's a tiny bit like a protection racket.

In an approx. 30 day period from mid June to mid July, the meter maids gave me three $15 tickets, and within 45 days of the last ticket, turned it into $180 in fines and booted my car (another $40 charge). $220.00.

Not a bad hall for 3 slips of paper and 6 minutes of meter maid time. How many times does this happen in a day? How much revenue does this generate for the city?

What' the ROI for the city? I'm betting: really really good.

Interestingly, this was all with zero warning. No letters (at least none that I got), no warning stickers on the car, nothing.

Apparently, Boulder enforces the 'laws of the state' around parking much more stringently than it does, for instance, laws about smoking pot in public (ever been to the annual '420' event?). I'm not against the 420, but it's "against the law" too. Do they get 'tickets'? Nope.

Sooo... what heinous crime did my car commit?

I have no front license plate. The reason is there is no place to put it (no plate holder , no holes for screws). I just got it a few months ago and haven't gotten around to buying a drill and putting the front plate on yet.

This is one of those 'you have to look for it' kind of tickets. You have to walk around the car and look for no plate. I park in the same general area downtown and apparently I've caught the eye of the meter maid who own this particular turf.

Why the need for front license plates? I think it has to do with red light cameras that take a picture of your front license plate and send you a really big fine in the mail. Apparently cities all over the country (like Boulder) are adding more of these cameras to their red lights and shortening the yellow light span to produce more tickets.

Oh.. you think a city would never do that? Think again:
In fact, six U.S. cities have been found guilty of shortening the yellow light cycles below what is allowed by law on intersections equipped with cameras meant to catch red-light runners. Those local governments have completely ignored the safety benefit of increasing the yellow light time and decided to install red-light cameras, shorten the yellow light duration, and collect the profits instead.
Boulder uses traffic tickets to create substantial amounts of revenue. They sent out over 10,000 red light tickets last year alone.

Back to parking tickets.

Normally I pay things like parking tickets right away (simplifies life) but these three tickets got put into a cubby hole and I simply forgot about them. Simple human mistake.

I don't even mind paying a penalty. Say, 25% of the value of the ticket....but $180 for $45 in parking tickets? All within 60 days of getting the tickets and then booting my car with no warning?

What the hell is that about? That's about 1600% annual interest rate. Even the IRS doesn't dream of doing something that outrageous. The only people that get rates like that are loan sharks and, last time I looked, that's illegal.

And booting the car with no warning? That's the municipal equivalent of a loan shark 'breaking an arm' until you pay up.

If a business tried all that they'd be brought up on modified RICO charges.

I'm getting a new bumper sticker made up:

Boulder: Bring your pot but don't f**k with our meter maids.

Tuesday, August 26, 2008

Is Apple a Republican?

I don't mean this in the political sense, I mean it in the 'how we do business' sense.

I've noticed that Apple simply never, ever, says it's sorry. It also never admits it's wrong without being called on it, repeatedly, by many sources, over days or weeks (sometimes months). The latest example being the 3G phones unreliability and the MobileMe online service outages and outright failures.

Apple is also the most secretive company in the business. everything is a secret, even inside the company with product teams working on the same product. It's compartmentalized and everyone is isolated from everyone else (outside of their immediate group). Sound a bit like our current administration? Just a little?

I've also noticed that all the latest "I'm a Mac, I'm a PC" ads, although cute, funny and fluffy, are negative ads. Negative in the sense of attack ads, similar to what the Republican's do so very well.

I know.. it's a stretch, but comparing the Rovian Republican attack ads to Apple ad's that have the PC guy doing most of the talking, usually pointing out what's wrong with the PC or the OS, vs. having the Apple guy talk about what's good about itself seems like a reasonably fair comparison.

The only difference is Apple does it with a sense of wry humor .. all soft and fluffy... vs the lead pipe/scare the hell out of you Republican approach. Same result though: You're left with the kind of residual feeling that the other guy's a loser and not to be trusted (or purchased over an Apple product).

Have you seen a positive Republican advertisement lately?

Watch the Apple Ads. Have you seen a positive Apple ad for the Mac (that's not denigrating the PC somehow) lately?

Me neither.

And the similarities between the control freak Jobs and the control freak Cheney are alot closer than any of the Mac Fanboys would ever want to admit.

I'm bi-computational. I own two Mac's and an iPhone. I also own several PC's. I use them all for different things. Apple makes an overall great product. I'm not really attacking the products there, I'm criticizing the company itself, and it's way of doing business, more than anything.

I could also expand this a bit more into the 'elite' (meaning: Rich/Republican) vs. 'everyday joe' (meaning: Average/Everyman/Democrat) argument and make a pretty convincing case for how PC's, which are cheap, ubiquitous, easy to repair (or just replace) are the every day joe computer where the Mac is (perceived as) expensive, difficult to upgrade/repair and generally embraced by more of the rich elite, but, being the Libertarian Hippie that I am, i won't go any farther with that line of thought.

So, add it up: Denying problems that are obvious to everyone, ignoring problems and not addressing them unless the press exposes them over and over and then doing something minor to create the idea that you're trying to alleviate the pain, but still not admitting fault; obsessive secrecy about everything they do both inside the organization and in what's presented outside and, finally, attacking your opponents relentlessly via attack ads sounds a lot to me like business as usual for the Republicans.

And now, if you just stop a minute and think about, Apple Inc as well.

Steve Jobs may be a far left Buddhist/democrat, but his company looks very Republican to me.

UPDATE: How to upgrade a Mac (click for original):

Thursday, August 14, 2008

Ultimate Geek Out

It doesn't get much better (or more geeky) than this.

Presenting the Large Hadron Rap:

White female science writer turned rapper Katherine McAlpine knocks it out of the irony park.

You have no choice but to love it.

Google Kills Feedburner

This is sad, and I have to wonder what the motivations behind it might have been.

About a year ago, Google bought Feedburner, an RSS tracking system that did a very nice job of creating advertising revenue for RSS powered content. Google announced they'd shut it down a few days ago.

Why would Google spend a reported $100M on a company and then, a year later, shut it down? I don't think they transferred that business to their adsense network (Allen Stern, in the video above, agrees with me here).

I suspect this was an example of a big company seeing that a small company had something very innovative, were first movers and were creating an 'alternative' ad network to adsense on Google.

Having worked in some really big companies I've seen this kind of behavior over and over so it's possible I'm being overly cynical ... Maybe I'm giving Google too much credit for thinking into the future and being a little bit evil here. But, maybe not.

I'm effectively saying that Google bought Feedburner with the intention of, eventually, shutting it down. They did it in a way that bought off the digitari so their image as 'not like other big companies' would be held intact. Feedburner folks and it's investors were well paid and, in the end, that's what makes for a lot of positive buzz in the blogosphere. I find this to be the goodness part of this. Unlike some companies that smash small startups that might threaten them, this IS, in a oddly mercenary way, a 'nice' way to shut down a budding competitor.

I still think it's sad though. Dick and gang put a lot of mental horsepower and hard work into creating a great company and a compelling product. I'm sorry to see it go.

The good news is without a similar product that provides similar functionality and monitization levels to take it's place at Google (adsense is not that product) someone, somewhere, can now do it again.

Thursday, August 07, 2008

Librarians as Free Speech Shock Troops

Every so often, I read a blog post that makes me go 'wow' and sticks with me long and hard. Posts like that are rare so when I run across them I believe it's important others have the opportunity to read them as well.

Jamie Larue just wrote such a post called "Uncle Bobby's Wedding".

The subject matter is a childrens book about gay marriage, but it could be about any idea that one person or group of persons disagrees with and doesn't feel should be made available to another group (in this case, children aged 2-7). It addresses the importance of free speech and open thought. He's addressing libraries, but it extends well beyond that to any free speech be it in a library, or on the internet.
"Our whole system of government was based on the idea that the purpose of the state was to preserve individual liberties, not to dictate them. The founders uniformly despised many practices in England that compromised matters of individual conscience by restricting freedom of speech. Freedom of speech – the right to talk, write, publish, discuss – was so important to the founders that it was the first amendment to the Constitution – and without it, the Constitution never would have been ratified."
It's an incredibly well thought out and respectful response that I find, in our polarized world, sadly lacking in the public discussion of ideas.
"Finally, then, I conclude that “Uncle Bobby's Wedding” is a children's book, appropriately categorized and shelved in our children's picture book area. I fully appreciate that you, and some of your friends, strongly disagree with its viewpoint. But if the library is doing its job, there are lots of books in our collection that people won't agree with; there are certainly many that I object to. Library collections don't imply endorsement; they imply access to the many different ideas of our culture, which is precisely our purpose in public life."
Bravo Mr. Larue. You have, again, reinforced my belief that The Librarians of the world are our shock troops for free speech and the dissemination of ideas and open discussion.

Saturday, August 02, 2008

Benevolent Dictators and Cross Pollination in Boulder

Rebecca McKinnon did a great post on Silicon Valley's benevolent dictatorship. Personally, I think she nailed it. To a large degree, she exposed how a large number of high tech people tend to think about this space. Benevolent Dictatorships are, indeed, largely what creates great companies in Silicon Valley. I won't go into her take on the downside of that, read her post. It's worth it.

The guys over at Techdirt, not to be outdone, write a post about Rebecca's post that adds an important additional side note in the last couple of paragraphs about the cross pollination of people and ideas is one main reason Silicon Valley tends to be so successful. These two things, based on my 20 plus years of observing it and 10 years actually living there, make up a large part of why Silicon Valley succeeds beyond the obvious things talked about and copied by other areas many times before (money from VC's and Angels, access to universities, quality of life, etc.).

So....Benevolent Dictators and Cross Pollination of technology, people and ideas. Really really important.

Can you apply that formula to a place like Boulder, Colorado? A town that fancies itself many things, one of which is a '2nd tier' startup capital, alongside towns like Austin, Portland and Seattle?

I think you can, but I don't think, in Boulder at least, it looks the same.

Our benevolent dictators seem to also be our Money People. The VC's and Angel investors that make startups here possible. They don't act like Steve Jobs, they're far more subtle, but the effect is very similar. What they say goes, and what they want happens. This is certainly not a bad thing, but it's a real thing. We have no Apple like companies in Boulder, it's just not big enough, so a different configuration of a similar model seems to have formed up.

On the second point of cross pollination, I'm not sure we do as good a job. This is due mostly to scale.. we just don't have it here, and it's also who our benevolent dictators are.

Even 'Northern Colorado'....bringing Denver/Ft. Collins/Loveland/Longmont/Greely into it we don't have near the same number of high tech folks or money people as The Valley (I'm not counting Colorado Springs in here because Colorado Springs is to the rest of Colorado what Texas is to the US).

But, it's also partly due to our money people, or rather, our lack of them. Generally, VC's and even Angels are not overly keen on their companies hiring employee's away from each other. This is very understandable because, in a small company, a key person leaving can be devastating to that small companies progress. Because we have far fewer money people in Colorado than Silicon Valley has, there's alot more talk among the startup people running the companies about how 'VC X' really hates it when you hire someone from his/her company.

If that money person is already involved in your company, you don't want to do something to upset them. And, due to the size of the money pool being limited in this area, if that money person isn't involved with your company, chances are you'll want them to be, or at the very least have something nice to say about you, so, again, you don't want to do anything to upset any of those money people. This gives them a disproportionate level of influence (back to Benevolent Dictatorships) on the startup world in our area.

This isn't a Boulder problem alone, it's any area that doesn't have a big enough VC/Angel population which is pretty much anywhere but Silicon Valley.

Unfortunately, this creates a low level fear of hiring from other startups (i.e. limiting cross pollination) if they're involved with (or want to be) some of the bigger VC or Angel folks in the community.

In a smaller ecosystem like Boulder (or even Northern Colorado), that has a real dampening effect on cross pollination, one of the key features of Silicon Valley's success.

I don't have an answer here short of getting several dozen VC's and several hundred Angels to move to Boulder. And I'm not saying Boulder is a bad place for startups (it's actually very very good) but, the components that make Silicon Valley so successful don't yet exist here in Boulder (or by what I can tell anywhere else) and until that happens, The Valley will rule.