In his blog, Peter Kim (ex Forrester analyst , ex Razorfish marketer) posts a great (and growing) list of how brands are usig online media (blogs, Facebook, Twitter) to extend their reach. Some of the examples were great for both the simplicity of the communication channel and the ability for community engagement.
Some of my favorite:
AMC's Mad Men. Microblogging: Fake Twitter accounts. [CHG: extend the life of your characters! brilliant] BMW. Social networks: Facebook 1-Series Road Trip application. Rampenfest fan page. Heinz. Online video: YouTube contest. Motorola. Wikis: MOTO Q Wiki with how-tos on using the phone [CHG: because its so darn hard to use?] United States House of Representatives. Microblogging: Twitter account. [CHG: really?] Securities and Exchange Commission. Microblogging: Twitter account. [CHG: highly practical for hedge fund bankers to be alerter for upcoming regulation] Virgin America. Microblogging: Twitter accounts for information and sales. [CHG: question is...any sales come out of this?]
There is enough emotional sentiment out there against the new Facebook UI with thousands signing petitions against it. From the business side of it, with Facebook app developers like SGN, Zynga, Playfish and others receiving millions from VCs, there has been some concern that the new UI will lower adoption and use of the apps (and eventual/possible/hypothetical monetization).
The guys at All Facebook have gone out and crunched numbers to determine the impact. Their full analysis posted here. The most alarming metric: "The average monthly active users for the top 1500 applications has dropped 15.6 percent from its peak toward the end of September."
At FOWA London, Mark Zuckerber, addressed the platform, the new UI and the impact on the apps ecosystem. His general comment was that applications that relied on long term engagement and sharing have grown while the ones that relied on a box in the profile will have seen a drop. (Also interesting comments on monetization and mobile and location).
Saul Klein, Index Venture Partner, Seedcamp founder and Skype lucky-dog exiter, did a presentation on European startups and VC in Berlin last week. Fred Wilson posted it on his blog.
Some interesting insights around
- Three of top $1B+ markets for VC now in Europe - Some pretty famous (and wealthy) firms were started in downturns (Apple, Microsoft, Skype, MySQL) - Bootstrap as much as you can - Use free resources (Gears, App Engine, Seedcamp)
European VC (and European startups) still face several challenges around the cost to expand (localization, infrastructure, feet on the ground) across the region, the return from VCs (and therefore the funds flowing into it), and the public markets. That being said... Seedcamp and Saul's efforts are some of the best efforts going on to build up the next Skype.
Mucking around with Marvel site I came across the Marvel Universe Connections app which blends years or Marvel character intertwinings with Web technology to finally explain the connection between Thor and Wolverine... (they were both part of the Avengers although apparently its not really Thor but rather the body of Thor with the soul of a mortal...). Anyways... hours of procrastination await on this site..
I don't think Andy Rubin and team had this in mind when they chose the date, but the T-Mobile G1 launch yesterday coincided with my birthday (wohoo!)
And so the day is finally here: The first Android device is out in the wild (aparently some folks who pre-ordered got it 2 days early). I have pasted some reviews at the bottom of the post.
Talk about a strong statement... A few weeks after Sequoia told its CEOs to buckle up for a tough ride, it turns around and invests $15.7M along with Accel in Admob. This raises Admob's total funding to $34.3 million...
And in all the excitement, they let it be known that they have turned cash-positive and are serving over 5B ads... How is that for a nice middle finger to the doom sayers!
I must admit I love what Admob is doing and how they are doing it. Their mobile metrics provides great insight into the growing trends in mobile advertising (even if it is very skewed towards the US and some emerging markets) and Omar Hamoui (CEO), Russell Buckley (MD Europe) and the team are ever-present in the mobile ecosystem (disclosure: I serve with Russell on the Board of the Mobile Marketing Association).
In any case, a great piece of news in this otherwise dire market...
This is huge. The concept of an end to end mobile OS stack, run time engine, Webkit browser, etc ALL open sourced.
For those not in the industry, what this means is that hopefully the Android effort and investments will enable handset makers to leapfrog into a best-of-breed high end mobile OS FOR FREE (as compared to paying Nokia or Microsoft on a per-license basis). Lets hope that savings is reinvested into innovation on top of the platform.
A video outlining the launch of the Open Source code is below:
Oxyweb has a graph and post on social networks and reach. MySpace still leads in the US and local players (Skyrock in France, VKontakte in Russia, Orkut in Brazil and India :) their local positions.
The PWC MoneyTree Q2 report has come out and shows a slowing down in VC investments. With a 16% QoQ drop.Techcrunch's post on the subject highlights that the $7.1 BILLION might be the first quarter of decline in investments since the dot-com implosion.
And so... Wall Street hit Main Street and has now hit Sand Hill Street. My assumption is a few quarters of slowed down investments with a lot of the $$ going to "inside rounds" leading to an upswing in 2-3 quarters as new valuations drop and "scarcity builds clarity."
Image via CrunchBasePaul Graham, of Y Combinator, just posted on his blog a message that goes against the negative theme of the Sequoia/ Ron Conway emails and presentations. Titled "Why to Start a Starup in a Bad Economy" and the main point is that "[an] advantage of bad times is that there's less competition." and a great time to find opportunity while being scrappy!
October 2008
The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies.
When Microsoft and Apple were founded.
As those examples suggest, a recession may not be such a bad time to start a startup. I'm not claiming it's a particularly good time either. The truth is more boring: the state of the economy doesn't matter much either way.
If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it's rounding error compared to the founders.
Which means that what matters is who you are, not when you do it. If you're the right sort of person, you'll win even in a bad economy. And if you're not, a good economy won't save you. Someone who thinks "I better not start a startup now, because the economy is so bad" is making the same mistake as the people who thought during the Bubble "all I have to do is start a startup, and I'll be rich."
So if you want to improve your chances, you should think far more about who you can recruit as a cofounder than the state of the economy. And if you're worried about threats to the survival of your company, don't look for them in the news. Look in the mirror.
But for any given team of founders, would it not pay to wait till the economy is better before taking the leap? If you're starting a restaurant, maybe, but not if you're working on technology. Technology progresses more or less independently of the stock market. So for any given idea, the payoff for acting fast in a bad economy will be higher than for waiting. Microsoft's first product was a Basic interpreter for the Altair. That was exactly what the world needed in 1975, but if Gates and Allen had decided to wait a few years, it would have been too late.
Of course, the idea you have now won't be the last you have. There are always new ideas. But if you have a specific idea you want to act on, act now.
That doesn't mean you can ignore the economy. Both customers and investors will be feeling pinched. It's not necessarily a problem if customers feel pinched: you may even be able to benefit from it, by making things that save money. Startups often make things cheaper, so in that respect they're better positioned to prosper in a recession than big companies.
Investors are more of a problem. Startups generally need to raise some amount of external funding, and investors tend to be less willing to invest in bad times. They shouldn't be. Everyone knows you're supposed to buy when times are bad and sell when times are good. But of course what makes investing so counterintuitive is that in equity markets, good times are defined as everyone thinking it's time to buy. You have to be a contrarian to be correct, and by definition only a minority of investors can be.
So just as investors in 1999 were tripping over one another trying to buy into lousy startups, investors in 2009 will presumably be reluctant to invest even in good ones.
You'll have to adapt to this. But that's nothing new: startups always have to adapt to the whims of investors. Ask any founder in any economy if they'd describe investors as fickle, and watch the face they make. Last year you had to be prepared to explain how your startup was viral. Next year you'll have to explain how it's recession-proof.
(Those are both good things to be. The mistake investors make is not the criteria they use but that they always tend to focus on one to the exclusion of the rest.)
Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I've been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. The cheaper your company is to operate, the harder it is to kill. Fortunately it has gotten very cheap to run a startup, and a recession will if anything make it cheaper still.
If nuclear winter really is here, it may be safer to be a cockroach even than to keep your job. Customers may drop off individually if they can no longer afford you, but you're not going to lose them all at once; markets don't "reduce headcount."
What if you quit your job to start a startup that fails, and you can't find another? That could be a problem if you work in sales or marketing. In those fields it can take months to find a new job in a bad economy. But hackers seem to be more liquid. Good hackers can always get some kind of job. It might not be your dream job, but you're not going to starve.
Another advantage of bad times is that there's less competition. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself.
You're an investor too. As a founder, you're buying stock with work: the reason Larry and Sergey are so rich is not so much that they've done work worth tens of billions of dollars, but that they were the first investors in Google. And like any investor you should buy when times are bad.
Were you nodding in agreement, thinking "stupid investors" a few paragraphs ago when I was talking about how investors are reluctant to put money into startups in bad markets, even though that's the time they should rationally be most willing to buy? Well, founders aren't much better. When times get bad, hackers go to grad school. And no doubt that will happen this time too. In fact, what makes the preceding paragraph true is that most readers won't believe it—at least to the extent of acting on it.
So maybe a recession is a good time to start a startup. It's hard to say whether advantages like lack of competition outweigh disadvantages like reluctant investors. But it doesn't matter much either way. It's the people that matter. And for a given set of people working on a given technology, the time to act is always now.
I came across Mobclix a month ago. They had just succesfuly presented at TechCrunch50 and were selected as finalists for Seedcamp as well
A good idea with brilliant timing, their service enables data analytics for iPhone (and eventually other platforms) applications.
Given that Apple provides such limited information to developers (and the industry in general) their dashboards are like gold. Borrowing from Admob's playbook they are becoming *the* source for insight into Apple apps.
9to5mac has a post on Mobclix as well outlinging the distribution of apps by category:
Games: 1,027 (31.4%)
Utilities: 476 (13.5%)
Entertainment: 407 (12.4%)
Productivity: 240 (7.3%)
Education: 213 (6.5%)
Books: 202 (6.2%)
Reference: 191 (5.8%)
Travel: 184 (5.6%)
Healthcare + Fitness: 176 (5.4%)
Lifestyle: 158 (4.8%)
I think these guys might be onto something... its no longer enough to know the install base of Symbian vs WinMo vs J2ME enabled handsets... its about the use that each platform will drive.
She walked around the office and Prince Phillip was obviously more engaged with the gadgetry than Her Highness. He stopped at several desks, walked into a conference room and interrupted a Video Conference call.
"AMERICANS today spend almost as much on bandwidth — the capacity to move information — as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on gas and heating oil.
Just as the industrial revolution depended on oil and other energy sources, the information revolution is fueled by bandwidth. If we aren’t careful, we’re going to repeat the history of the oil industry by creating a bandwidth cartel."
I agree with the dependence of my modern life on connectivity and the annoyance/fear when I loose that connectivity (damn you Tiscali!)
The ironic part is that free bandwidth being freed up in the transition from our analog TV and radio world of the 1950s to the IP based digital world of today... and yet we are not allowed to tap into it -or at least not freely, something that Larry Page seems to feel passionate about.
Despite the doom and gloom of my previous post, I am still amazingly bullish on the potential of mobile.
Tochnidot, a TechCrunch50 finalist, made me smile... THIS is the stuff that gets me excited about the mobile space, about the mobile potential, about what I have been preaching for close to 10 years... Brilliant! As the "pundits" say..this is what we have been dreaming of for years.
Techcrunch just posted an email from Ron Conway to his portfolio companies with some advice about the economic pressures (read: Wall Street implosion). I am pasting the email below, the full post is here. Aparently Sequoia also called a meeting of its portfolio CEOs.
UPDATE: The slides from the Sequoia CEO meeting are posted here. "R.I.P Good times" seems to be the theme.
——— Forwarded message ———- From: Ron Conway Date: Tue, Oct 7, 2008 at 12:12 PM Subject: IMPORTANT PLEASE READ ASAP …..REGARDING CURRENT MARKET CONDITIONS…Confidential
We have all been absorbed by the turmoil in the financial markets the past few weeks
Unlike the turmoil of 2000 when the “action” was centered right here in Silicon Valley this time is it centered on Wall Street…..but it has rippled to the west coast quickly and we will not be “immune” to its drastic effects.
I was an active investor in 2000 when the “bubble burst” and remember it vividly and want to give you the SAME EXACT advice I gave to my portfolio company CEOs back then.
I have pasted in the emails I sent on April 17th 2000 and May 10th 2000 and every word applies today.
Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again.
The message is simple. Raising capital will be much more difficult now.
You should lower your “burn rate” to raise at least 3-6 months or more of funding via cost reductions, even if it means staff reductions and reduced marketing and G&A expenses. This is the equivalent to “raising an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible. Letting go of staff is hard and often gut wrenching. A re-evaluation of timelines and re-focus on milestones with the eye of doing more with less will allow you to live many more days, and the name of the game in this environment in some respects is survival–survival until conditions change.
If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible but face the fact that if you can’t raise money now you must cut costs.
While I do not own a large percentage of your company I hope you will consider this thoughtful advice.
I was here in 2000 and want to share what I learned through many years of experience and historical “pattern recognition”!
Here are the two emails from the year 2000 that I referred to above and all the statements apply in today’s market:
To: Angel Investors, L.P. Portfolio CEOs Date: 04/17/2000 05:24 PM From: Ron Conway RE: Market Conditions Effect on Angel Investors, L.P. Portfolio Companies
The down draft in the stock market sends us some obvious “signals” and we can’t help but mention them.
1. If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible.
2. Many companies are ignoring certain VC leads we’ve provided in order to concentrate on the top tier only. While we have preached that in the past, this is no longer the case. Currently, top-tier VC bandwidth constraints, coupled with the market down draft, make it very important to take meetings with any VCs where you can get their attention. We have been working hard to open up this new bandwidth.
3. You must aggressively examine and pursue M&A opportunities (unless you have over 12 months of cash reserves!) ro insure you have critical mass (including funding, customers, rolodex power, market share, cash, synergy, etc.).
4. Be realistic on valuations - they will fall so be ready and willing to co-operate.
5. Look for corporate partners to invest so you can raise more money. You should also consider a sale of your company to your corporate partners.
6. If you are entering a funding cycle start raising money sooner rather than later.
7. While it’s safe to say entrepreneurs have had negotiating leverage with the “down draft” in the market, the VC community will start exercising their leverage. —————————————————————————- —————————————-
To: Angel Investors, L.P. Portfolio CEOs Date: 05/10/2000 05:23 PM From: Ron Conway RE: Market Conditions Effect on Angel Investors, L.P. Portfolio Companies
I want to “touch base” again; given the continued uncertainty in the capital markets.
As the market turmoil continues, we must underscore the advice that we have provided since mid April and it boils down to just a few points:
1) The capital market window is shut, including IPOs and VC Funding (VCs are looking at their existing portfolio funding needs - not new opportunities). Basically the market is now looking for PtoP (Path to Profitability) instead of BtoC, BtoB, etc! PtoE will prevail price to sales ratios! You must lower your “burn rate” to raise at least 3-6 months more of funding via cost reductions, even if it means selective staff reductions and reduced marketing and G&A expenses. This is the equivalent to ‘raising an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible.
2) If you have $10M or less in the bank you must do #1 above plus look at M&A options for your company; especially if your company is BtoC, content, advertising model, community, commerce, and even BtoB. An M&A transaction will allow you to gain critical mass and to get two sets of funding sources and rolodexes working on your behalf. M&A transactions take over 90 days so you need at least that much cash to fund your company. You must attend our M&A day on May 24th at the San Mateo Marriott at 3:00 PM. We will have investment banks there in addition to entrepreneurs who have successfully accomplished M&A transactions. We will send you details.
We are still developing many new funding sources for our portfolio companies that are in funding cycle.
Digg has a visual representation of its data in its Digg Labs As a story begins to attract Digg users, the Labs interface reflects the popularity of the story as a stack graph a swarm or other display formats.
I find the display of digital data in graphical formats fascinating. One or my favorite is the Dopplr's Raumzeitgeist which maps Dopplr member's stated travel to world cities.
Technology (and security) meets fashion. Miguel Caballero, a Colombian designer now sells designer vests and jackets at Harrod's. They call him the Armani of Armour.
Ironically, guns are illegal in the UK so I am assuming the Harrod's sale are for the "export market."
I finally got to play with the final UI of the TMobile G1 Android device over the last few days and I must admit I was impressed. Understand that my comment carries some Google bias, but more importantly strong skepticism having launched v1 mobile OSs before (ahem Motorola MPx200) and my recent frustration with the iPhone.
Here are some of the things I like the most:
Search: A lot of the features that we have implemented on the web including suggest and history make typing queries A LOT easier (the keyboard also helps. Video of the search features below:
The Android Market: Easy to browse, easy to find cool apps based on feedback, and a large number of FREE apps!
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