Pick your iPartner iWisely (or: How AT&T is wrecking the Apple iPhone Experience)

Yet another report of a lousy 'getting it going' experience from Brad Feld with the iPhone.

I've read about 2o of these in the last half an hour. It seems AT&T just didn't think it through very well. Apple's just as guilty. (what is it they say about being able to judge a man best by looking at how he marries?).

Goes to show how you can spend years, 10's of millions of dollars and use up lots of braincells to create an amazing product and STILL, easily, have the users first experience with that product (arguably the most important experience) destroyed by choosing an incapable, immoral or just inept (AT&T, it seems, fit's all of this and more) partner.

just say no to that subpoena

"Bush's attorney told Congress the White House would not turn over subpoenaed documents from former presidential counsel Harriet Miers and former political director Sara Taylor. Congressional panels want the documents for their investigations of Attorney General Alberto Gonzales' stewardship of the Justice Department, including complaints of undue political influence."

"Increasingly, the president and vice president feel they are above the law," said Senate Judiciary Chairman Patrick Leahy, D-Vt. He portrayed the president's actions as "Nixonian stonewalling."

His House counterpart, Judiciary Chairman John Conyers, D-Mich., said Bush's assertion of executive privilege was "unprecedented in its breadth and scope" and displayed "an appalling disregard for the right of the people to know what is going on in their government."

Gee. Does this mean if I get a subpoena, I can just ignore it? You know.. this could be get really interesting.

Over 30 Age Meme.. this one's getting old

Dave Winer's at it again. He's baiting Fred Wilson into continuing the 'over 30 means you can't do a startup' meme.

Fred should know that Dave's a master at this (especially the baiting part) and has been doing it very successfully for years. For Dave, I suspect, it's fun. A sort of sport really.

The age meme discussion is getting too much play though. I'm gonna sum it up and pack it away:

-Yes, if you're over 30 (or 40 or 50) it's harder to do a startup than if you're under 30.
-Yes, you're harder to 'deal with' for VC's and angels because you've had time to learn up from down. They'll deal.
-Yes, it's likely you'll work less if you're still married with kids. Or married w/o kids. Or divorced with kids.
-Yes, it's only likely you'll work like a 22 year old if you're single or divorced w/o kids.
-Yes, over 30's know more and can avoid potholes under 20's cheerfully bee-line into.
-Yes, if you're willing to find us (single/divorced/healthy/withoutkidsathome) we are gems.

Any money guy who bases a decision on funding primarily on your birthday isn't a funding guy you should be dealing with anyway (even if you're under 30).

Fred knows this. Every top notch VC or angel knows this. And Dave knows it too.

And now... I'm done commenting on this one.

Blogging: Average Persons Way To Immortality?

I know that's an odd title, but I think it's true.

The Chinese have a great saying that puts everything into perspective:

"Every 100 years- All new people".

Think about that. It's effectively true. For the vast majority of people on Earth, their time here is nothing more than a blink of the eye and then they're gone. Poof. Dust. Forgotten.

Unless they write a blog.

I suspect that, 1000 years from now, your blogged words, thoughts, ideas, rants and tirades will, somehow, somewhere, still be stored in the Googleplex, or on the Internet (or it's equivalent) and accessible. Effectively the only thing left of you long after you're dead and gone.

I doubt anything else you do with your life will have that kind of personal staying power. Maybe if you write a book or record a song, but that's not something the average person does. The only other thing that might be really equal in representing you, and what is uniquely you is the DNA you pass on to your children.

Even then, your thoughts via blog are more personal, public and representative of you when you were alive and spewing energy into the void.

I've always known whatever I wrote here was available to anyone, anywhere. What I didn't think about before was that also means anytime. Now, or 1000 years from now.

This stuff isn't going away anymore. The internet saves everything somewhere.

I'm sure you've all thought of this already and you're doing the 'so what'. Still, the TIME aspect and what that means to a human with a deterministically short (<100 years) existence never really sunk in until recently.

Time to go read a book. :)

Hatchery's vs. Angel Investing

I've been watching what Brad and David are doing over at TechStars and I think they're really onto the right model. I've heard David say that it's the evolution of angel investing, and I think he's right. Especially in the high tech/internet/media sector.

I look at what I've done with ClickCaster, which was a traditional angel model. First the founder invests his own money/time/resources to get an idea to a certain point (a team that delivers, a market identified, a beta product in production) and then he goes for either angel money or VC money depending on how big his/her plans are. In high tech/internet, with the costs to get to the next level so low, it's usually angel money. Certainly less than $1m, and usually half that; call it $500K average.

So I'm an angel investor, and I've got, say, $50 or $100K into an angel round of an early stage startup. I've put a pretty fair amount of betting money into this one deal. Is that good? Is it the most efficient way to invest money on high risk ventures? Until recently, I'd have said yes. Now, I'm not so sure.

David Cohen's TechStars is bringing in 10 groups at $10-15K investment each. Invested amount of around $150K total. Another $50K for things like creating a space for 3 months for them to work out of, maybe some datacenter setup with servers and bandwidth everyone can use to prototype on and some computers in the space they'll work in.

$200K. 10 companies. 20-30 hungry and foolish entrepreneurs with big dreams. Out of that you're likely to get 1 or 2, maybe 3 real companies that get their claws dug into a real market. For the money put in, you get 5-6% of the company. But they've been seriously vetted to get there. Maybe 200 applicants for 10 slots of which 2 companies will emerge. That's a hell of an efficient tunnel that happens in very short order (2 months to screen the 200, 3 months to screen the 10). Get your other legal, data center, entrepreneur and angel friends to help out and, man, you've got a wisdom of crowds market that, I suspect, kicks ass on the traditional angel investing or even early stage VC model.

Old news to many of you I'm sure, but here's what's new news (at least to me).

I put in about $200K of my own money for ClickCaster and a couple of years of my life (so far). I'm over 40, I've got some money to bet, I'm reasonably smart. I've been involved in starting things for a couple of decades, I'm well versed in the high tech/internet space and I want to get involved in the startup world.

Would doing a hatchery have been a better approach than focusing on a single company? Should a guy like me do this as opposed to a single focused startup with that $200K?

I don't know the answer, but I would bet big that several thousand guys like me, and angel investors who already have networks of friends, VC's and resources needed to do startups, are having this exact thought right about now.

They're watching TechStars and Ycombinator and the other hatchery's and looking to see if this way of filtering ideas, people and markets is the best approach for this particular investment sector.

If I were an entrepreneurs or angel investor (or a wanna be) who was looking for what's next, I'd want to talk with David and gang, get the initial formula/playbook (and blessings), move to Austin, Santa Fe, Iowa City, Portland or any of a couple of dozen smaller cities with high quality of life, a university, get plugged into the local scene and fire it up.

One side note on Hatchery's vs. Incubators:

David likes to point out this is not the old bubble days incubator approach. An incubator owned a larger percentage of the companies, was more deeply involved in the day to day business and didn't have a well defined near future endpoint when the money stopped, dead, and you were kicked out of the nest to live or die.

A hatchery is fast, ruthless in it's selection process and, after everyone involved votes (by what I can tell, with angel or even VC money) shuts down the 7-8 companies that didn't make the cut and does everything it can to help the 2-3 survivors.

Darwin, I think, would be proud.

The "bad news for graybeards as entrepreneurs" meme rears it's head again- or - In defense of the over 40 entrepreneur

Well shit.

Here we go again. Now Valleywag says you can only do a really big win startup if you're in your 20's and then Fred Wilson back peddles (sort of) on his back peddle about funding in their 20's vs. over 40 entrepreneurs .



Valleywag:

Bad news for the graybeards: a quick check on the great tech companies of the last three decades shows a pretty brutal rule. The most spectacular successes are launched by founders still in their twenties. The peak age: 26. Within a year of that age were Google's Sergey Brin and Larry Page, Apple's Steve Wozniak, Yahoo's Jerry Yang, Skype's Janus Friis, Chad Hurley from Youtube, and Tom Anderson from Myspace. Full post here

Fred:

So I don't know if youth is an advantage in the tech/startup world, but it certainly isn't a disadvantage. And I see our job as being able to work with young entrepreneurs in a way that allows them to be their best while helping them where they need it. It's something we are working very hard on perfecting. Full post here.

At least Fred tempers his with 'it's a state of mind' more than anything else. He's right. It IS a state of mind. I refer, again, to my post last year "Are early stage start ups and normal lives incompatible?"

Of course a 23 year old with no family, no mortgage, no kids, no college funds, no IRA or 401K to fund in perfect health (and no medical or health insurance bills), a paid for 1990 volvo and 3 roommates (who are also your co-founders), no cube life/big company work experience with the requisite cynicism/dilbert disease and with no fear and a 140 IQ unimpaired by 20 years of (pick one): Drinking, drugs, bad relationships, lousy kids, all of the above bills, etc. has an advantage.

Doh.

Life can wear you down. And it does most people. Doing a startup requires dedication, focus, naive belief in the impossible, more dedication, long hours and sacrificing 'life balance'; at least for awhile. That's why alot of entrepreneurs kill themselves and succeed (or fail) take off a few months (or in some cases a few years if the battle was particularly gruesome) and do it again.

I would put forth that it takes a particular (some would say peculiar, others would say slightly warped) personality type that's similar in some ways to the addictive personality to do a startup company. In our case, the addiction is the process of creating something useful and valuable from nothing and marshaling it through all the creativity, elation, pain, fear and fun that doing it entails.

Age isn't the defining factor. However, it does change the equation. I would bet fewer over 40's have it in them to do it than the same personality type does in their 20's, for instance.

Our society tries it's best to beat individuality and creativity out of you as soon as you hit 'the workforce'.

Even the good companies do it. Near the end of my tenure at Apple, my boss had an executive consultant (who worked with executives and CEO's to make them them better at their jobs) work with his reports. She set up as series of meetings with me for a 6 week period. In our first meeting, we talked for 4 hours. At the end of it, she said "Scott, I'm cancelling the rest of our meetings'. Thinking I'd done something wrong I asked why. She said "your one of those guys that drive corporations crazy. You have the qualities all of them are trying to bring out in themselves, but they can't control you. They want to find a way to tame it, and still have it. If I put you through this, it's like taming a wild stallion (no shit, that's exactly the phrase she used) and this company needs people like you". My boss was a little pissed, but, interestingly, he also gave me alot more funding and leeway after that.

Most people in their 40's have had it beaten out of them. Even big company senior execs and CEO's (there's a whole consulting industry built around it). Them, maybe, more than most.

But some of us survive the process. Not many, but some. And those of us that do are the over 40's that are capable of doing startups.

And we bring experience, contacts and resources no 23 year old has.

So...if we over 40's successfully run the product, market and funding gauntlet alongside the 20 somethings, even with a graybeard, we shouldn't be written off or filtered out just because of a birthday.

Granted, I'm biased, but if you ask me, smart investors should seek out that hard to find seasoned just right over 40 entrepreneur. There's likely 1 of us for every hundred 20 somethings of like mind, but if you can find us, we're worth it.

David Cohen on Vertical Social Networks.

David Cohen, of TechStars (www.techstars.org) a huge supporter of entrepreneurship in Colorado (www.coloradostartups.com) , and Angel investor, has a series he and Brad Feld do called Big or Bullshit. He just wrote one on Vertical Social Networks.

His question is: Will they ever be big enough to be worthy investments? His second question is: Doesn't the aggregation of these networks contain more value?

On the first one, I say: big, not bullshit. Why? Community. We're communal animals and community has been part of how humans operate from the beginning. We're clever beasts though and we use our tools to improve community. I won't go through a history of it here, but I'll start with computers. In the early 80's, modems became available to the average person. What's one of the first things we did? We wrote BBS's(Bulletin Board Systems). Each tended toward specific communities. The whole social networking phenom of today isn't new, it's just more common to have the tools in your day to day life. In 1982, few people had personal computers. Today, the majority of US households do. Put a cell phone in the mix (which is becoming the PC of choice for the rest of the world), and you have the tools you need to participate. Social Networking is just better interface, easier to use and more realtime communications and richer media. MySpace is just one big BBS system with more advanced user tools.

Can verticals be valuable enough to be worth investing in? Again: yes. It all depends on the drivers. Here's an excerpt from an article from CNN's Business 2.0 magazine on one set of verticals (note that the title is a bit sensationalized, this is, after all, CNN territory):

The accidental 'friend' finder

Andrew Conru didn't aspire to be a sex-industry mogul. But his $200 million empire attests to the old adage: If you can't beat 'em, join 'em. Business 2.0 Magazine reports.

(Business 2.0 Magazine) -- You know how you'll be trying to do work, and the Internet will inexorably drag you into porn? That's exactly what happened to Andrew Conru's career.

A mechanical engineering doctoral student at Stanford who grew up with churchgoing Lutheran parents in northern Indiana--the kind of guy who holds the door for everyone until he gets stuck there so long that someone has to make a joke so he can let go--Conru started the first online dating site, WebPersonals, in the early '90s. He sold it in 1995, pocketed a minor windfall, and started all over again.

Now he owns 27 sites under an umbrella company called Various, controlling twice as much online dating traffic as better-known rivals Match.com and Yahoo (Charts) Personals. But his clients tend to be much more fun. That's because most of them post pictures in which they're having sex. When you've already seen your date naked, it's a lot easier to focus on what she's saying.

Of all the dating sites Conru has launched--ones for Latinos, seniors, Asians, Jews, churchgoers--the biggest by far is AdultFriendFinder, which accounts for more than 60 percent of Various's revenue. Conru says his privately held, 450-person company brings in well over $200 million in annual revenue, averaging 40 percent growth for the past nine years. With more than 35 million visitors in 2006 and 75,000 new users registering each day, AFF ranks among the 100 most popular sites in the United States.

OK, I'll grant you, this is effectively adult content and we all know how popular that is. But this (if you take recent numbers on the porn industry in the US into account) is around 8-10% of the entire adult business take in the US (about $2.4B in 2006). And non of it is professionally produced. It's all user generated social networking DNA at work.

People are passionate about sex (doh!) but what about their dogs? Music? Religion? Politics? It's all based on the driver and if that driver is something emotionally important to that community, that's powerful stuff. Will Dogster get to $200 Million a year in revenue? I doubt it, but $20 million? Yea, that I can see happening. And that's a marketcap in the $150-200M range. Not a bad investment if you ask me.

The packaging of these (and using the same infrastructure, development and some content) is where you can get to FriendFinder levels of revenue and profit. How about Petster Inc. doing a Dogster, Catster, Snakester, Birdster, Fishster, etc.? Go down the long tail and add it all up. Dogs and Cats-the most popular pets (the head): Say, $30 million (60%). All the rest (the long tail), say $20 million (40%). That's up to a $500M marketcap potential there if you play it right.

Second are his observations on aggregators. He says, take the idea of OpenID and expand it into your 'full profile'. These will take off as well, but for different reasons centered mostly around convenience for the user and the perceived, by the user, value of that information. As we become more sophisticated about the value of our own personal information habits online (your Clickstream) we'll want to control that and gain some financial advantages for our attention (discounts, coupons, better targeting of the ads we know we have to see anyway, etc). That's not community though. There's nothing social about it (if anything I'd say it's more selfish than social). Is it a business? Absolutely. A big one? Most likely yes, but it'll take average people becoming aware of the value of their attention first. That's going to take time.

In the meantime, everyone loves their dog.

If I was thinking 'next 3-5 years' and had to pick vertical social networks or social network aggregators, I'd put my money on the vertical social networks.