Monday, June 13, 2011

The Latest from TechCrunch

The Latest from TechCrunch

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D.O.E. Grants $83 Million To Biofuels Startups (Not One Of Them In Silicon Valley)

Posted: 13 Jun 2011 08:44 AM PDT

Maybe it’s just a biofuels thing this year, but it seems like the feds are giving cleantech grant money to companies and institutions that are based anywhere but in the nation’s capital of venture capital.

The U.S. Secretary of Energy Steven Chu announced six recipients of $36 million in total grant funding via the Department of Energy’s Biomass Program on Friday. That non-dilutive funding went to organizations working to make the production of “drop-in” biofuels and plant-based chemicals better, and to ultimately bring affordable alternatives to petroleum-based products mainstream in the U.S.

Despite the region’s reputation as a cleantech hotbed, not one Bay Area organization or business scored a piece of this funding. They also missed out on a previous grants round from the same program, announced in May, which doled out $47 million to eight companies in the sector.

The grant receiving companies in Friday’s announcement are from San Diego, Calif., North Carolina, Michigan, Texas and Wisconsin. They included: General Atomics, Genomatica, Michigan Biotechnology Institute, HCL CleanTech, Texas Engineering Experiment Station and Virent.

The organizations in the earlier grant funding announced by the Biomass Program are based in: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Montana, New Jersey and South Carolina. They included: the U.S. Forest Service Rocky Mountain Research Station, the University of Kentucky, University of Kansas Center for Research, University of Florida at Gainesville, Metabolix, Exelus, the Domtar Paper Company, and Cellana.

Where were the Bay Area’s bio-fuels and -chemicals companies, schools and labs? We’re talking to you, L39 in South San Francisco, Solazyme, and Amyris. Maybe they were too busy hiring, and going public to apply for grants from the D.O.E.

A 2010 study of Clean Tech Job Trends by Clean Edge ranked the San Francisco Bay Area number one among major metropolitan areas in the U.S. for cleantech jobs. The study looked at job listings, early stage investment activity, job presence and patent activity.

[Ed's note: We'll be watching this space to see if there's some kind of disadvantage, when it comes to government grant getting, for cleantech companies in and around the Valley.]



Whispers Of Unions At Apple Stores

Posted: 13 Jun 2011 08:31 AM PDT

According to a Reuters report an employee at a San Francisco Apple store, Cory Moll, is working on forming an Apple retail employees’ union, thereby giving the geniuses a few bargaining rights.

“There’s definitely no call to action yet. Right now what I hope to gain is to get people to start talking about it and get comfortable with it,” he said.

Read more…



SugarSync Adds Mobile Device Management To Send Files To Devices From The Web

Posted: 13 Jun 2011 07:21 AM PDT

SugarSync, a close competitor to file sharing services like Crate and Dropbox, just added a mobile device management feature to their web interface. The new service takes advantage of SugarSync’s web-based upload system to control which files appear on which devices, thereby allowing you to send specific files to a phone or laptop directly and remove said files when necessary. Think of it as a sort of filesystem remote control. You can also see what data appears on which device (it works with iOS devices right now) and you can update the local folders on any device connected to your SugarSync account.

The feature will appear in SugarSync accounts over the next few days.

Read more…



Former Googlers Raise $13 Million From Bain And Greylock For Personalized Ad Solution

Posted: 13 Jun 2011 07:00 AM PDT

TellApart, a startup that enables eCommerce companies to use customer data to offer more personalized display advertising to both their loyal and potential customers alike, today announced that it has closed a $13 million series B round of funding. The round was led by Bain Capital Ventures, with contributions from Greylock and others.

As a part of the new round, Bain Capital Managing Director Ajay Agarwal will be joining TellApart’s board of directors. The new capital infusion adds to the $4.75 million the startup raised in April of last year, bringing total investment to $17.75 million.

For every 100 customers that visit a company’s website, only a few will buy something. The key for digital advertisers in today’s Web-osphere is to figure out which of those 98-odd people might buy something in the future if they’re served the right kind of targeted ad. The idea is to hit those potential customers with personalized ads as they navigate their favorite websites — a process fondly known as “retargeting”. TellApart, which was founded by former Google ad execs Josh McFarland and Mark Ayzenshtat, specializes in this very process.

Retail brands and eCommerce share deep user data with TellApart, which then curates this data and uses it to power more personalized marketing, including retargeting potential customers as they’re out clicking their way through cat videos and Etsy offerings. On average, the company says, it has been able to offer an average of three to five percent lift to its clients overall revenue.

This lift primarily comes from using TellApart's dynamic display ad remarketing solution called “Transactional Retargeting”, the primary app that sits on top of the TellApart Customer Data Platform. The Customer Data Platform is used to compute a proprietary Customer Quality Score (otherwise known as “CQScore”) for each individual shopper, based on the data collected from previous customer behavior. This is then used to decide which customers have the most potential value to the business, and to serve them product-specific display ads.

TellApart also uses realtime, auction-based bidding for each ad impression, allowing the startup to differentiate between the values of each unique impression on every unique user. This enables TellApart to be more calculated in its ad buying and targeting.

The startup prides itself on being able to "tell apart" the best prospective customers from the rest of the bunch, hence its name, and presumably why it claims to be offering an average 7.5 percent user click-through rate, which is significantly higher than the industry standard.

Co-founder of TellApart, Josh McFarland, spent five years at Google (pre and post Google IPO) as a business product manager, working on many of Google’s advertising platforms, like AdWords and Audio Ads, etc. McFarland was also a part of integrating Doubleclick, the digital marketing services and technology company that Google bought in 2008. Doubleclick, it also happens, was funded by Bain Capital and Greylock. As Bain Capital Managing Director joins Greylock Partner James Slavet on TellApart’s board, this is a team that is very familiar with each other and has been around and part of successful ad businesses (and exits).

"We fundamentally believe that customer data is the single most effective sales and marketing driver for retailers", McFarland said. "While at Google, we recognized the enormous opportunity this data has for e-commerce growth, but it's one that most companies are unable to handle on their own and the data is too precious an asset to hand over to Google. TellApart exists to address this need by helping online commerce companies leverage customer data to dramatically increase sales."

As to TellApart’s monetization model, the startup is attempting to offer retailers and eCommerce companies a low-risk, high-return solution by opting for a pay-for-performance model. A share of revenue is paid to TellApart only if and when a prospect coverts a customer by clicking on an ad and making a purchase. The startup counts Hay Needle, Ebags, Diapers.com, cafepress, and drugstore.com among its early clients.

For more on TellApart, check out TechCrunch’s own Mike Arrington interviewing the startup’s cofounders here.



Apple Now Worth As Much As Microsoft, HP And Dell … Combined

Posted: 13 Jun 2011 06:48 AM PDT

If you look at how Apple fares on the public markets today, compared to other tech powerhouses, you’ll notice that the Cupertino computer giant is currently valued at roughly $301 billion, which is close to the sum of the market cap of three of its closest rivals: Microsoft (~$200.3 billion), Hewlett-Packard (~$72.8 billion) and Dell (~$29.3 billion).

Market cap is of course just one metric – and arguably not even the best one – to make comparisons between companies. It is, nevertheless, a most excellent trend barometer and a simple way to compare valuations.

To be frank, I’m not sure this is the first time Apple’s equity value has come this close to the combined value of Microsoft, HP and Dell, but it’s most definitely the first time I’ve noticed. And while we’re at it …

It’s been a little over a year since Apple passed Microsoft in market cap (they also turned out to be more profitable than the Redmond software company last quarter).

That was a pretty big deal. And then the next 12 months happened.

Today, the difference in market cap between Apple and Microsoft is approximately $100 billion.

That’s more than the combined worth of Research In Motion, Nokia, Netflix and eBay.

Or: $100 billion is the sum of market capitalizations of Amazon and Adobe.

Or: $100 billion is only $15 billion shy of Intel’s total market cap.

As for Microsoft, they’re in a rough patch. The company that boasted a market cap of around $400 billion 10 years ago (compared to Apple, which then hovered around $8 billion) saw IBM edge past them for the first time in 15 years just a few weeks ago.

Both IBM and Microsoft currently boast a market cap of around $200 billion.

And now the next 12 months will happen.

(Image via Flickr user jpctalbot, used with permission)



What To Do When A Tech Giant Decides To Eat Your Lunch

Posted: 13 Jun 2011 06:40 AM PDT

Editor's Note: This is a guest post by Mark Suster (@msuster), a 2x entrepreneur, now VC at GRP Partners. Read more about Suster at his Startup BlogBothSidesoftheTable.

WWDC. The annual Apple event where no real hints about what products they plan to release are floated in the public domain in advance. No private head nods are given to small startup companies to help them prepare. We’re in a market where 800-pound gorillas throw their weight around and the rest of the market races to react and survive.

Any company who develops products reliant on iOS spends weeks crapping their pants before WWDC. No vacation schedules allowed for weeks before or weeks after. The announcements come out in one day and then even if you survive the annual release announcements you often still have to scramble to make sure your product is ready to work on time.

It's madness.

This happens with Google, too. Every change in the algorithm wipes years of effort off of the traffic numbers of affected companies as anybody hurt by the Google Panda release will tell you.

Or Twitter launches its own photo-sharing app integrated into their product.

What is a startup to do?

For starters, fear not. The world seldom ends. You just have to deal with some insufferable VCs and journalists for a while. They risk little but of course knew better all along.

It is the same movie I saw 10 years ago when every VC would say to me, "yeah, I get that you're an online document sharing service, but what's going to happen when Microsoft enters the market? You'll be dead."

Puh-lease. Tell that to DropBox. Or Box.net. Tell that to DocStoc, Scribd or SlideShare.

Right. Just like Microsoft stopped AOL from winning the early online wars. And AOL stopped Yahoo! from winning the Internet portal wars. And Yahoo! in turn killed Google when it came to search. While Google stopped Facebook in their tracks when they built a social networking company. And Facebook stomped out Twitter from building an open social network. And we know how Facebook stomped out FourSquare.

And on and on. eBay / StubHub. Amazon / Zappos. Twitter / Instagram.

Focus wins.

In your head you know that the reality is that bigger companies simply cannot compete effectively on all fronts. Focus by extremely talented teams beats breadth. It's why we all exist.

The golden rules to live by are:

  • Platforms are channels not businesses. Don't confuse the two. If you put all of your eggs into one platform shame on you, not them. If their business torpedoes you, you should have been diversified.
  • You need to be clear on what your sources of differentiation are from the biggest competitors or you’re dead anyways. If your product isn’t 10x better in your own mind, hang up your cleats now.
  • You need to be "known" for your sources of differentiation so even when the press declares you dead because Facebook, Google, Apple, Twitter are going to eat your lunch they are describing the threat in terms of them copying you. When they talk about “check-ins being dead” it’s because you created them. Or “gamification.” Innovation has become synonymous with you.
  • You need to stay focused. Have clarity of purpose. Don't be scared. Be willing to shift positioning based on new market information but not lose your inner core.

Here are some examples.

FourSquare – I was recently asked on Quora whether I thought FourSquare was dead now that Facebook was going to launch “Places“. Others feared Yelp. Me? I chuckled. Sure, if Zuckerberg thought that check-ins were the single most important part of his future business and put 200 engineers on the problem and all of their market might, they'd squash FourSquare like a bug. That's not going to happen.

In reality Facebook will have a small team on it. They'll have to integrate with every other initiative on Facebook and adhere to common internal standards. They'll fight for resources. End users come to Facebook to share photos, chat with friends or play games. Checking in is an afterthought for most. FourSquare is a different and unique product. The law of large numbers means Facebook will have plenty of check-ins on Places but that doesn’t negate a focused competitor.

I can't tell you whether FourSquare will end up being a huge and lasting company or not. I'm not on the inside. But I feel confident that its future is its own to execute and innovate on and whether it succeeds or not will have little to do with Facebook itself. I have on several occasions said publicly that I felt the biggest challenge for FourSquare is to know what comes after the check-in? What is the next major innovation. They seem to have several interesting ideas.

It will certainly be interesting to watch.

Group Messaging –  We just came off of another annual WWDC. In it Apple announced its new iMessage product. Apple built the product, so no doubt it will be freakin' awesome. I’m sure I will personally use it as we own 2 Macs, 2 iPads, 3 iPods and 2 iPhones. Yes, we’re a fanfamily. The New York Times came out with their list of companies impacted by Apple’s new releases and all of the major group messaging companies were on the list of companies in need of checking their shorts.

The major players are GroupMe, Kik and TextPlus (I'm an investor). Actually, I wouldn't consider all of them "group messaging" companies but ever since SxSW that seems to be what the press wants to talk about.

Let's look at some simple facts:

  • Apple will let you communicate seamlessly with all of your other friends using Apple devices. That's a lot of people.
  • But the much larger market for smartphones will be non-Apple and all of the app-to-app messaging companies allow you to communicate with a much broader set of smart phones. iMessage will not. At least not initially. It does for the Apple world what BBM was for the RIM world.
  • And beyond app-to-app messaging some of the products will allow you to also send SMS messages to the 10′s of millions of people who don’t yet have any smart phones at all.
  • Many of the services are moving toward providing you phone numbers, voicemail and eventually free phone calls
  • Some services like Tango already do video calls. This is already better than what Apple’s Facetime provides out-of-the-box.
  • Beyond that I see the market bifurcating into “utility players” that provide iMessage-like services on a cross-platform basis and those that evolve into either mobile, social networks or mobile, social games companies. iMessage will not quickly follow either route.

BBM will have another major push and we expect an inevitable Google rebuttal to iMessage. Purely being “group messaging” will be stuck in the cracks of the giants. Group messaging isn’t a market, it’s a feature.

Are the companies competing in this sector shitting their pants? Hardly. They’re focused. They know their purpose. They know where they're going. It will be differentiated. It will be hard for the largest players to compete with their vision. If they don't get there one day it will be their lack of execution.

Bit.ly – Remember when Twitter announced that they would be embedding their own URL shortening and the Bit.ly obituaries were written in the first 24 hours? As far as I can tell Bit.ly is still around. In fact, they continue to be the dominant URL shortner and provide a plethora of analytics data to go with it. Next market moves? I dunno. But dead? Hardly. I still use them nearly every day.

Boxee – I remember talking with Avner Ronen before the announcement of the new Apple TV last year and just as Google TV was ramping up their marketing messages. Boxee had gone from marketing darling to dead man walking in the press in a matter of months. Avner was so calm. He pointed out that Apple would build a closed system that would appeal to part of the market. Ultimately a small percentage of his total opportunity. Boxee was about being open. It was about freeing up content to be displayed on big screens regardless of the source or content type. Where Apple would veer toward control, Boxee would bend toward open.

And whenever you see closed systems all of the major players not invited inside the velvet rope will search for technology partners. The enemy of my enemy is my friend. So every OEM not included in the Apple TV universe now knows they’re on notice to innovate. And no TV manufacturer with a brain doesn’t see that Apple will likely one day have its own Internet TV that will be scooped up by adoring fans like me. They already have beautiful monitors that are practically TVs. So hardware players need some software friends. Boxee might just be what the doctor ordered.

And GoogleTV? Yeah, that would slow down his discussions with OEMs whom he hoped would be building on the Boxee software stack more quickly, but he said to me,

"Mark, we're not looking to build a quick flip. We have a long-term vision that video content will be widely available whether you produced it and it sits on your computer, whether it's the sports you love but is currently only available on a content bundle or whether it's long-tail content that appeals to large audiences of people who currently can't get it over the Internet. And we'll build the best discovery engine to find the best content."

Will he get there? I'm not sure I'd easily bet against Avner. He really does have a great vision in a market that will undoubted be disrupted. But his story doesn't map to an easy headline. Let's see if he can put up the numbers over the next 3-5 years.

Summary
It's not a sufficient strategy to think you're going to win because you're competing with big, dumb companies. They're usually much smarter than you think. But they're not nimble. They can't take as many risks. They can't iterate as quickly. They can't easily have a focused set of marketing messages and a user experience that will have clarity of purpose for users.

You must figure out how you deliver real differentiation. What you'll stand for, be known for. You have to have a core. You can't let the market machinations and press proclamations worry you. The big guys can't crush you as easily as others think. Be a cockroach. Be indestructible. And remember that competing with the big boys is not for wimps. Fight hard. No cry babies. The big boys will do what the big boys will do. And if you raise VC make sure your backers have a long-term vision and the internal fortitude to last the periods where it seems that the big boys will eat your lunch.

And if there are no big boys—you're probably in the wrong market.

Good luck.

Image courtesy of Fotolia via @ryanborn



Unseat.me Adds A Social Layer To StubHub; Takes The Anonymity Out Of Selling Tix Online

Posted: 13 Jun 2011 06:25 AM PDT


As much as a season ticket holder would like to make it to every single game of their team’s season, most of the time that’s just not in the cards — at least not while keeping a job and a family. So, when one has to pass on a game and wants to make a little of the money back, one might go set up a seller account at StubHub, RazorGator, Tickets.com, or just list them on craigslist.

With millions upon millions of listings between them, these sites all offer great choices for buyers and sellers alike. And, speaking at least for StubHub, tickets are free to list. Shipping is easy, or can be done quickly and digitally (depending on how you choose to list them), and you don’t have to get into a conversation with a buyer like you might on eBay or craigslist (i.e. it has confidentiality cred), and there’s a secure payment system already built in. But it’s not all sunshine and kitty cats. As a seller, StubHub is going to take a 15 percent commission, and for some people, the anonymity and confidentiality can be a limiting part of the ticket exchange.

It just so happens that there are a lot of people who have season tickets but don’t necessarily want to sell tickets to a stranger anonymously through a sometimes needlessly complicated transaction process. Enter: Unseat.me, a social layer built on top of StubHub that gives every ticket seller the tools to be a broker, taking advantage of the ticket marketplace as a payment processing and ticket fulfillment engine.

Unseat.me Founder Lael Sturm conceived the idea for his startup from a simple need: He is a San Francisco Giants season ticket holder, and he wanted to sell more of his tickets to people he trusted, without the fuss and without the anonymity — and make some money while doing so.

Sturm said that his intent is not to compete with StubHub and other secondary ticket markets but to supplement them and offer sellers more options. So, for example, when a user sets up an Unseat.me account they input their season ticket seat info. Unseat.me then does an API call to see if any of those tickets are listed in StubHub, at which point the seller can just connect Unseat.me with their StubHub-listed tickets, through a simple “Buy Tix” button (which you can see in the image above). When a buyer clicks on the button, they are redirected to StubHub, which then acts as the payment and fulfillment system.

But Unseat.me also presents the remaining schedule for user’s team with a ‘Display/Don’t Display’ toggle button. If the user chooses to display the games, he or she can also manually input the price and quantity. That game will then appear on the frond end with a “Contact Me” button that generates an email to the page owner. The buyer and seller can then arrange to meet in person. For users that prefer to sell direct, a la Craigslist, this is the solution for them.

By not competing directly with StubHub, Unseat.me can remain in an agnostic position, allowing the startup to work with all the secondary ticket markets. In fact, Sturm said the startup is close to deals with several of the other markets, though he declined to say which. Remaining agnostic also allows Unseat.me to stay out of sticky exclusive agreements, like the $300 million deal recently forged between StubHub and MLB, for example.

The other primary focus of Unseat.me is to offer as many ways as possible for season ticket holders to go to their friends, families, and colleagues first. Unseat.me allows you to share your tickets on Facebook and Twitter right from the listing. Sturm also said that he’s considering adding LinkedIn, especially if they find serious demand among corporate ticket holders.

The founder also said that startups like Disrupt NYC finalist Sonar have spurred him to think about the value of proximity and geolocation at venues, as this could be a powerful tool to leverage in bringing people together to share tickets. GroupMe (and other group messaging services) could also offer interesting tools for bringing people together and cutting through the noise.

When I asked Sturm if he had considered talking to StubHub about adding an Unseat.me button to StubHub listings, he said that it was a conversation he’d love to have with the ticket giant, but in the meantime, Unseat.me is very close to announcing similar integration with one of StubHub’s competitors. So there. What’s more, Facebook Connect integration should be right around the corner as well.

As to funding, the startup is mostly bootstrapped, with a bit of angel financing at this point, though Sturm said he’s in the process of raising a larger seed round and has had some investor interest. Revenue model? Unseat.me is still in the proof-of-concept phase, i.e. it’s all for free, but Sturm said he’s considering everything from affiliate fees from secondary ticket markets, a freemium version that provides additional functionality, fee-based promotional tools, or data products.

It’s still very early-stage at this point, but Unseat.me has a few interesting things going for it, especially as it will be expanding to NFL tickets soon, and I’m looking forward to see where it goes next. Stay tuned for more.



eBay Settles Lawsuit Over $2.4B GSI Commerce Acquisition, Deal Expected To Close This Week

Posted: 13 Jun 2011 06:20 AM PDT

eBay announced its $2.4 billion acquisition GSI Commerce in March and today the company is one step closer to its acquisition. The two companies have announced that they are settling claims filed in a Delaware state court; and GSI shareholders will be paid a settlement amount equivalent to about $0.33 a share.

The acquisition is expected to close this week, on June 17. With more than 180 customers across 14 merchandise categories, GSI has long-term commerce services relationships with a wealth of retailers and brands. eBay says it expects GSI clients to benefit from eBay's Marketplaces and PayPal services, particularly.

The lawsuit was filed in late March by an investor, claiming that the offer was a "bargain price."

As we wrote previously, as part of the transaction, eBay will divest 100 percent of GSI's licensed sports merchandise business and 70 percent of ShopRunner and Rue La La.



The HP TouchPad Gets A Series Of Official Video Demos Ahead Of Its July 1st Release

Posted: 13 Jun 2011 05:48 AM PDT

HP has done what any company looking to drum up a bit of buzz tends to do: release demo videos on YouTube. Not that you can blame them. The HP TouchPad is hitting the US retail market on July 1st and outside our little tech blogging community, it’s probably as well known as the Notion Ink Adam. I’ve yet to see a national commercial advertising the purported iPad killer. These demo videos, embedded for your viewing pleasure after the jump, shows off a bunch of the tablet’s exclusive features: HP Synergy, Palm notification tether, Touch To Share, inductive charging and the sexy webOS.

Believe it or not the HP TouchPad is almost here. It seems like forever ago that the tablet finally broke cover after months of speculation. But actually, HP announced the TouchPad only back in February, which creates only a six month announcement to release span; RIM announced the PlayBook seven months prior to its release. The 16GB version will hit at $500 with the 32GB costing $600. The fancy inductive charging Touchstone dock costs an extra $80.

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Pure Storage Raises $28 Million, Says Flash Will Disrupt Enterprise Storage

Posted: 13 Jun 2011 03:33 AM PDT

According to this SEC filing, Pure Storage has raised another $28 million in venture capital, adding to the $25 million it has raised over the past few years. And the company's solution is still in private beta testing. The SEC filing includes names of two management team members, founder and CTO John "Coz" Colgrove and CEO Scott Dietzen (most recently president and CTO of Zimbra and former Yahoo VP) as well as investors like Aneel Bhusri (Greylock), Satish Dharmaraj (Redpoint Ventures), former Veritas CEO Mark Leslie and Mike Speiser (Sutter Hill Ventures).


Microsoft NUAds: Engage With Xbox Kinect Game Ads Through Voice, Gestures

Posted: 13 Jun 2011 02:34 AM PDT

Last week, Microsoft filed for an interesting U.S. trademark for ‘NUADS’, describing it as:

Advertising services, namely, promoting and marketing the goods and services of others through online interactive video games by enabling consumers to interact with third-party advertising content through voice or body gestures via computer game console and sensor devices.

Sounds like a new interactive advertising platform for Xbox Kinect indeed, as eagle-eyed tech blogger Manan Kakkar opined before the weekend.

A trademark application does not a product make, but it sure seems like Microsoft is plotting the introduction of a platform that will enable advertisers to run in-game ads that Xbox Kinect users can engage with through body motion and voice commands.

More opportunities for people to look like idiots in front of their TV screens!

But seriously, is Microsoft planning the next generation of intrusive ads? Or is this the inevitable future of advertising that they’re smartly preparing for? We’ll find out soon.


Manan Kakkar
Microsoft will be introducing interactive ads in Kinect. Going to be called NUAds. Gestures and all in games.


It’s A Facebook World … Other Social Networks Just Live In It

Posted: 13 Jun 2011 01:48 AM PDT

Twice a year (in June and in December), Vincenzo Cosenza creates a “world map of social networks”, showing the dominant social networks by country, based on traffic data gathered from Alexa and Google Trends for Websites.

In June 2009, Facebook was already quite big, and at the end of that year its accelerating growth became even more apparent. By December 2010, the map colored bluer than ever.

The trend shows no signs of stopping this year. How long until it turns all blue?

You can see an animated version of the different maps here. Pay close attention to how many social networks made it to the map in June 2009 compared to June 2011. From 17 to 9.

Facebook is now the ‘leader’ in 119 out of 134 countries Cosenza has analyzed (he added Ethiopia and Tanzania this time around). Since the last update of the world map, Facebook has conquered countries like Syria and Iran, despite struggles against government censorship.

According to data from Facebook’s Ads Platform, Europe is now the largest continent on the network with more than 205 million users (out of roughly 700 million in total).

Cosenza posits that The Netherlands and Brazil will be the next countries to “surrender” to Facebook’s steamroll (it’s already happening, in fact).

Meanwhile in Russia, Odnoklassniki seems to be putting on a good fight against VKontakte.

Also worth noting: Twitter and LinkedIn appear to be on the rise in the United States, Canada Australia and big parts of Europe (UK, France and Germany in particular).

Interestingly, Inside Facebook just reported on apparent big traffic drops for Facebook in North America. On a global level, however, Facebook is drawing more visitors than ever.



If Something On Twitter Seems Too Bad To Be True, It Probably Is

Posted: 12 Jun 2011 11:15 PM PDT

Anyone else seeing an influx of blog headlines that go “Updated: [Thing That We Just Wrote About] Is A Hoax”?

While Internet hoaxes have been around since the Soviet Union wanted to join Usenet in 1984 (remember LonelyGirl15?), we’ve had quite a few doozies this week, from the woman who got a tattoo of 152 of her Facebook friends on her arm, to the eHarmony user tearing up over her love of cats, to the kidnapped lesbian Syrian blogger turning out to be a not kidnapped married guy in Scotland. Heh.

People have always been gullible, and gullible people having access to methods of dissemination like Facebook and Twitter only turns their folly up to eleven. But aren’t we as reporters paid to be filters of news, in essence paid to know better? Then why the rampant media coverage of every single one of these hoaxes?

The only answer I can come up with is that the demands of churnalism (or the recently dubbed “hamsterization” of journalism) and the quest for advertising traffic are only increasing for bloggers as more and more readers spend more and more time and money online.  This begs the question: How many of us uncritically posting on incredulous rumors and unverified viral stories are cynically calculating how even more traffic will inevitably come from our correction posts (“Update: This Was A Hoax, Again”)?

Perhaps the more innocent among us are fooled by the fact that the Internet has also increased the amount of ridiculous but true news. Media frenzies like #Weinergate and Sarah Palin’s description of Paul Revere’s ride remind us that there is plenty of bona fide news that people wish was fake, making the tech media landscape pretty much a crapshoot for bloggers focused on speed.

Even we covered that Facebook Friends tattoo story as if it were serious news. And how I wished that that story were real, letting me transform it into some bloated pseudo-intellectual weekend think piece about the ephemerality of online friendships and the quest for permanence in a digital age. Instead you guys get this.

It was only after I discovered that the  YouTube user account only had uploaded one video prior to “My Social Tattoo” and any kind of identifying details about the poster were nowhere to be found did I drop it as a viable source for reblogging, moving on (quickly as always) to the next source of news. But man, like everybody else, I wanted to believe that some idiot got this breathtakingly dumb tattoo. I mean it could happen, right?

In 2011 a retweet can function as the online equivalent of gawking at a car crash, even when the story seems too good (or more likely, bad) to be true. Perhaps this is why the hashtag #SeriouslyMcDonalds was a trending topic this morning, after a sign mandating African American McDonald’s patrons pay a $1.50 surcharge went viral.  Even McDonald’s Twitter account quickly declared this a “hoax”, but the #SeriouslyMcDonalds hashtag continues to appear in around 20 tweets a second.

Perhaps the most interesting hoax story to come out of an slow summer week  otherwise filled with Apple news, was the tale of a David Voelkert, who was arrested after his ex-wife lured him into revealing his plans to murder her, by posing as a teen admirer on Facebook.

While the initial wave of stories were along the lines of “Man Arrested After Wife’s Facebook Teen Ruse SHOCKER ,” the updates to the story provided a very interested interesting twist, as it turns out that Voelkert suspected that his wife was behind the fake profile and went to a notary in order to prove himself innocent before sending the otherwise incriminating messages.

Voelkert did what we bloggers should be doing more of, taking what happens online with a grain of salt. Granted, he probably had way more time.

Image: Yfrog



The 9 Most Important Things to Remember If You Want to Sell Your Startup

Posted: 12 Jun 2011 10:02 PM PDT

Editor’s note: James Altucher is an investor, programmer, author, and entrepreneur. He is Managing Director of Formula Capital and has written 6 books on investing. His latest book he’s giving away free. He built and sold Reset, Inc in 1998 and Stockpickr.com in 2007, among others. You can follow him @jaltucher.

Don't BS me. Everyone wants to sell their startup. We all pay lip service to building a billion dollar Groupon but in general that's a lie. Even Larry Page and Sergey Brin wanted to sell Google to Yahoo for $1 million within ten seconds of starting their company. And Yahoo said, "No".

As soon as I start a company, I want to sell it. I've sold four companies and I'm invested in another dozen that have been through various stages of the selling process. It's not pleasant, it's ugly, and everyone paints a pretty face so they look good on the first date. But later on in the dating process you realize who beats their children and who doesn't. It's important to keep track of the following nine things throughout the process so you don't end up being beaten too or even worse—broke and out of business.

And by "the process" I mean everything you need to do from the moment you start your business to the moment you get cash for your shares in it. Everything else in between aims for that final moment.

1. Prepare a year in advance. Everyone that you want to sell to. Start talking to them right now. The first company that I sold (in 1998) I started meeting with all the ad agencies about a year in advance of selling. I wasn't ready then (I would've sold then but I was too small) so I kept everyone in the loop with monthly updates. And lunches or breakfasts every three months just to update on the business in general. By the time I was finally ready to sell we had 4 or 5 instant offers. Ultimately, we sold to a company I had never contacted before. But they had heard of us because the word was out that everyone was talking to us.

2. The 20:6:3:1 rule. In 2004 a company I owned a small piece of (a mental health facility. And no, I wasn't an out-patient) wanted to sell. The founders were investors in a fund I was running. They got an offer out of the blue for $10 million. I said, let me take a shot at selling this.

A friend of mine had been in the business of brokering sales of small companies for about 30 years. He told me the 20:6:3:1 rule, which worked here. Call 20 companies in the space. We identified 20 private equity firms, public companies, private rollups, and ancillary companies all interested in owning a mental health facility.

Out of that the ratio worked like magic. We got 6 follow-up meetings. Then three serious meetings, all of which led to offers. Then we took the highest offer (it was double the other offers) and sold the business for $41.5 million. For a company that had $1 million in EBITDA

3. Ask for advice / give ideas. The key is getting your foot in the door. For every company that you can potentially be a fit for, come up with ten ideas of how you can integrate easily with their current business to generate revenues, customers, etc. for them. Meet them (they will meet you if the ideas are halfway decent. They have nothing else to do all day). Show them the ideas. Ask for their advice on what the best way is for you to work with them on these ideas. Make sure they make money on every idea. A lot of it. What does this do for you? It gets you a champion within the company (the CEO? The head of Biz Dev? The head of Marketing or Sales or Tech?) and it gives them all the ammo they need to present the case to their CEO and board. Without an internal champion you will never sell to that company.

When I was trying to sell Stockpickr.com (we sold to TheStreet.com in April, 2007) I spoke to Yahoo, AOL, Google, Reuters, Forbes, and a few others. Even though I didn't sell to any of the above I still developed business relationships between several of those companies and Stockpickr that continued even after Stockpickr was acquired by TheStreet.com.

I have one friend who does the exact opposite. He trashes every company he can think of. By trashing those companies he thinks they will trash him back and that will direct some of their audience to him. I can tell you, in the short run that works very well. And in the long run it causes your company to fail.

4. Before the negotiation: come up with the mathematical formula that will value your company. A very simple mathematical formula that both sides agree on even before you look at the numbers. For instance, we will value ourselves at 6 times forward earnings assuming you throw the weight of your customers behind us. If they say no, you can say , "ok, half that!" And they will probably say yes. Or, with theStockpickr.com/ street.com deal we assumed how much more traffic we would get with their full weight behind us, assumed we would get their CPM on our ad inventory and cut in half their market multiple so it would be an immediately accretive deal. Once we agreed to that it was a matter of figuring out (and this is where the real negotiation took place) what their real CPM was and how much traffic they would drive.

Many companies that sell to a Google or Yahoo just use market comps. That's fine also. But agree in advance what the comps are and what the multiples are. Because then you can always argue that your better than the last company that sold for X because of A, B, and C and that will allow you to negotiate for more.

5. During the negotiation: its not all about the number you get. Once you agree on a number, and their board agrees to buy you, they will close the deal. Now the key is to list as many things as possible that you need: salary, options, options for employees, when lockup ends, office, transportation, other expenses, responsibilities, earnouts, etc. You want to have as big a list as possible. A bigger list than their list. Larry Brilliant, former head of Google's charity efforts and former CEO of Softnet, once told me "this is the way you can give up the nickels to get the dimes". Or maybe he said it the other way around. Either way, you get more than you initially negotiated for.

6. After the Negotiation: this is the painful part. The deal is done. But it's not done. You're working for them. But you're not yet working for them. At any moment the deal can unravel. Whatever you do, just shut up as much as possible and make sure your lawyer is making progress every day. This has been the most painful part of my life in every deal. Make sure your due diligence package is all set in every possible way by the time you sign the binding Letter of Intent so that that can't be an excuse for any company to back out. One company once tried to loan me money in between the Letter of Intent and the day the deal closed. NO WAY! Another company wanted me to sign a six year employment agreement. NO WAY! Make sure it's very clear how you can eventually sell your stock if it's a stock deal. You don't want permission from the CEO or you're never going to be able to sell your stock. There are so many things that can go wrong here it's almost worth another article but suffice to say make sure you have a good lawyer and make sure you know even more than your lawyer, which is not an easy task.

Also, most important, keep building your business after the deal is agreed upon but not closed. Keep building more and more strategic relationships. You essentially want to send the equivalent of a press release every week to the company buying you, showing how great you are doing and how you are talking with other companies about strategic deals (that can easily turn into acquisitions if they back down).

7. Show up. Once you start talking to any company about any strategic whatever (but before the deal is agreed upon), then help them in any way you can. Give them advice how to make their site better even if it involves introducing them to your competitors. Get the CEO a girlfriend/boyfriend. Take them to a baseball game. Go out to dinner. Go on vacations with the families. Call your media contacts to get them favorable stories. Perform magic tricks at their favorite charities. Be their psychologist at four in the morning. Pitch them other business ideas you can do once you are on board. I've done all this and more in every acquisition I've been involved in.

8. Keep building your business.  What if you are just at the beginning stages? My best techniques for building up:

These methods alone will get you customers and get you in position to sell.

9.  Most Important: Don't Fail. The ultimate key to selling is to stay in the game. Here are the 9 easiest ways to fail at your business.  Avoid them.

Let's say you signed the deal and now you're waiting the month or so it takes the lawyers to dot all the i's and cross all the t's. There's going to come a point where you get incredibly stressed and paranoid. This is a law of the universe. Not a theory. Here's what you need to do: go to the nearest firing range. Get a rifle. Get as many bullets as you need. And keep aiming for the center of the target until you are too tired to even move.



Social Network For Kids Everloop Lands $3.1 Million In New Funding

Posted: 12 Jun 2011 09:02 PM PDT

Everloop, a social network for children under 13 years of age, has raised $3.1 million in funding from vFormation, Band of Angels, Envoi Ventures, Richard Chino, Wayne Goodrich, Deena Burnett-Bailey and additional investors.

Everloop wants to be the Facebook for kids under the age of 13. The site offers a private social network where parents can actually monitor the day to day activities of their children on the network. Everloop combines music, social games, videos, photos, animation, user-generated content and other experiences.

The startup prides itself on a high-level of security within the network, so parents can constantly monitor their child’s interactions on the site for foul language, bullying, inappropriate pictures and more.

The company is also adding Disney exec Sandy Barger as Chief Marketing
Officer, AOL’s Tobin Trevarthen as EVP of Business Development and Alan Goodman as Creative Advisor.

Everloop faces competition from Togetherville, which was recently acquired by Disney.



The Little Red Dot.

Posted: 12 Jun 2011 04:46 PM PDT

I see it right there, staring me in the face. It's like a laser beam burning a hole in my retinas. I can't help but click. That damn iOS notification red dot gets me every time.

And things are about to get much worse.

I've been addicted to Push Notifications since their inception with iOS 3 — and that's in spite of the fact that they've more or less sucked for all but a handful of apps. But other apps like Boxcar have fixed that for me. And now Apple is on the verge of fixing them system-wide with iOS 5.

While we got a glimpse of how the new system will work during the WWDC keynote last week, there are no shortage of reports out there that outline the updated feature in great detail. (Apparently Apple's developer NDA stands for "Not Doing Anything" — as in, it's not stopping anyone from leaking and posting on new features.) And it looks very, very good.

Yes, Apple copied/borrowed some of the best features of notifications on Android and webOS (they did hire the guy who made them for webOS, after all). The truth is that they had to. Those guys were doing it right. Apple was doing it wrong. Now that it looks like they've nailed it, I'm scared to think of what it might result in.

Currently, I turn off almost all pop-up Push Notifications except for a few (such as the Twitter app notification that pings you if a person you follow @replies you). Instead, I rely on app icon badging (the little red dot), and the aforementioned Boxcar. It's a bit of a hacked-together system, but I've learned to make it work for me.

But as I alluded to, I have a very serious problem with the red dots. When I see one, I have to click on it. I know in my head that the update is likely not important, but I just have to know for sure. Much of my day feels like a game of Whack-A-Mole as a result. Red dot appears, hit the app, clear it. Another one? Hit the app, clear it. Etc.

But it's manageable because those red dots only appear when I actually unlock my phone. With Apple's revamped Push Notification system, I see myself going back to the full-on pop-up notifications (which are less pop-ups and more drop-downs). And that means seeing them even when my phone is locked. I foresee it being a mixture of heaven and hell for me.

It will be great because I'll actually be getting pushed relevant information that I can see in realtime. It will be a nightmare because I will never have any quiet time ever again.

You might think I'm an extreme example, and you're right. Right now. But going forward, realtime notifications are going to become a way of life for everyone across all kinds of devices.

The mobile ones are obvious, and notifications will have the biggest impact there. A good notification system will become perhaps the key feature for any device you carry around in your pocket. And while you might think that's an overstatement since notifications only come one way, consider that Apple's new iMessage system is built on top of their Push Notification platform. Two-way.

Outside of mobile, apps like Growl have given us system-wide notifications for a long time. Boxcar is now in this game for moving web/app notifications to the desktop. And Apple hinted during WWDC that Push Notifications would find their way to the Mac as well.

And now notifications are transitioning into the browser too. Google has been experimenting with many different types of notification systems. They range from deadly and awesome, to necessary (in the new Chrome OS). Boxcar has been moving in this direction as well.

Facebook too has been perfecting notifications. This is both on facebook.com and on your desktop. Because they pump up engagement, solid notifications are a must for any serious app. You can probably expect Facebook to invest a lot more in this going forward.

Then there are Quora notifications letting you know that you have a question you should respond to. And location-based notifications from Foursquare, Gowalla, and the like (Apple's new iOS 5 Reminders app also has a location-based notification element) are becoming more prevalent. Twitter. Yammer. Calendars. iMessages. This is going to get ugly.

But again, at the same time, it could be beautiful as well. As long as the notification management systems work, push alerts may actually streamline the way some people consume information in realtime.

I'm both excited and scared. Okay, more scared.



Why Japan’s GREE Overpaid For Mobile Social Gaming Startup OpenFeint

Posted: 12 Jun 2011 01:40 PM PDT

Over the past year, there’s been an apparent trend taking place of Japanese gaming companies acquiring U.S. social game developers. DeNa bought social gaming company Ngmoco for $400 million last October, adding to an acquisition of mobile social gaming studio GameView in September. A little over a month ago, Japanese mobile gaming company GREE dropped $104 million on OpenFeint, a plug and play mobile social platform that allows developers to create social games on the iOS and Android platforms.

As we’ve written in the past, OpenFeint’s platform includes online game services such as leaderboards, virtual currencies and achievements running in a cloud-based Web environment. The platform first launched on the iPhone and iPad and more recently adding Android game developers to its community. In fact, the company has been growing like gangbusters on the Android platform, adding 215 Android games in the past six months.

But when you take a look at OpenFeint’s financials, the picture is not quite as rosy. In 2010, the startup made $282,500 in revenue and posted a loss of $6.6 million. So, GREE (which makes hundreds of millions in revenue each year), essentially paid nearly 400 times (368 times to be exact) OpenFeint’s yearly revenue for the platform. It’s rare for a company to pay such a high premium for a startup.

Of course, it’s important to note that the strength of the strength of the yen compared to the dollar makes it less expensive for the Japanese company. But still, even with the conversion rate factor, why did GREE overpay by so much for OpenFeint?

We recently spoke with GREE CEO Yoshikazu Tanaka about the reasoning behind the acquisition, and he revealed exactly why the purchase made sense.

New Games

When the announcement of the acquisition was made, GREE established an American entity, GREE International, which was the acquirer of OpenFeint in this transaction. At the time of the acquisition, it was unclear what this entity was for.

But Tanaka tells us that GREE will be launching a number of mobile social games using OpenFeint’s technology, the first of which will be unveiled at some point this summer. He and OpenFeint CEO Jason Citron declined to give specifics about the games but said these games will be targeted towards English-speaking users in the U.S.

Smartphones and International Reach

In February, Tanaka spoke to existing and potential third-party developers in Japan on the future strategy and goals of the company. Two of those goals included reaching 100 miliion users and moving beyond the Japanese gaming market.

Combined, the GREE and OpenFeint gaming ecosystem will reach 100 million users worldwide and Gree gets access to a piece of the American and European mobile social gaming market. And Tanaka confirms to us that the company was primarily interested in OpenFeint because of its strong foundation in the U.S. market.

Gree is planning to load up on engineering talent for OpenFeint, and plans to hire as many as 30 engineers and designers.

Tanaka has also said that ‘smartphones will be the most important platform for GREE's social games in the future,’ and OpenFeint provides a built-in platform for GREE to create and build social games for iOS and Android.

It’s also worth noting that GREE just partnered with DCM, Tencent and KDDI to launch the A-Fund, to support early-stage Android entrepreneurs. And GREE is partnering with mobile community MIG33 and Tencent.

DeNa and Ngmoco

One of Gree’s biggest competitors in Japan, DeNa, already had a foothold in the U.S. Gree had to act quick after DeNa scooped up U.S. mobile gaming company Ngmoco for a whopping $400 million last October. DeNa and Ngmoco were quick to reveal that it had big plans in store to capture the U.S. gaming market, stating publicly at the time of the acquisition that the two companies would be expanding mobile social gaming platform Mobage to the U.S. with a number of new games.

Fast forward six months or so, and DeNa’s Mobage launch outside of Japan to U.S. and European markets is imminent. Considering that Mobage has tens of millions of users in Japan (and brings in billions), the expectation for Mobage’s reach and success outside of Japan are high.

Clearly, DeNa/Ngmoco is a formidable competitor for GREE in its expansion plans for mobile social gaming and the company had to act quick so that it could churn out its own social gaming network for smartphones.

On the financial front, GREE is keeping a close eye on OpenFeint. Tanaka tells us that the CFO of GREE will now be the CFO of OpenFeint. Reading between the lines, it seems that GREE is stepping in to see how they can turn the company around financially and help it begin to make some meaningful revenue and profits. In fact, Tanaka says that ten GREE execs and staffers will be joining the ranks of OpenFeint to “help execute and facilitate expertise.”

We still don’t know how well Japanese players like GREE or DeNa will do in the U.S. and European gaming markets. And clearly the companies are wagering big bucks on the space. Hopefully these hefty investments pay off.



Game, Set, iMatch

Posted: 12 Jun 2011 10:42 AM PDT

Usually Apple launches are all about new product, and the WWDC keynote by Steve Jobs and crew was no exception. IOS 5, OS/X Lion, and iCloud were the tech version of a triple play, mainlining the iPad into the Mac and virtualizing the two product lines via the Cloud. What this means for Apple’s competitors is being debated right now, particularly in Redmond and the GooglePlex. But The Company Formerly Known as Don’t Be Evil has its work cut out for it, with little room for error.

Some thoughts on the realignment fostered by Apple iCloud:

1. iCloud Match is the strategy Google failed to adopt with Buzz. Instead of shoving it down our Gmail throats, Apple encourages us to move online with iTunes knowing that liner notes will quickly expand the music business into the publishing business. Although the 256k quality does not replace CDs, it does meet the same threshold some of us use to rip music off disk. Match implies an upgrade to better quality if Amazon or a Hulu-like Gang of Four emerges with a competitive offer. And what happens when Apple Matches the Android Marketplace for a yearly subscription?

2. Documents in the iCloud directly attacks Google Docs with everything but collaborative editing in a richer UI that feels more directly competitive with Office. Notice the heavy pounding on APIs at the event; developers will think twice about feeding productivity development to Google when the richest market (iPad and the AppStore) is ceded to iOS at the very moment OS/X is merging into the iPad OS. It’s a kind of reverse Microsoft strategy where you write to Windows and it cascades down through to Xbox and mobile. Build iOffice on the iPad and port it to what’s left of the desktop.

3. Notifications, iMessages, FaceTime, and AppleTV represent a formidable infrastructure play that could push out Skype and bleed the carriers dry of high margin SMS and voice services. Apple TV may seem like an outlier, but what happens when the only big hits like The Voice become online advertising and location-based auction vehicles for Twitter and notification-friendly interApps? Android will have to come off its phony open stance and interoperate, or be shut out of the new studio model that will emerge over a remarkably short period of time.

4. You may have noticed Twitter is now turbo-charging @mentions by sending an email notification when someone you follow @mentions. This tends to filter out those who are trying to game the social cloud, while establishing a corollary to the notifications router being released in iOS 5. The analytics around such messaging will produce more elaborate filters, and third parties will mine the data and resell it to marketers. Another reason why Google has to wrap its arms around the model rather than waste time pushing Flash out as a differentiator.

5. Notice how Facebook is missing from these and many other words we’re hearing these days. The iOS/iCloud/Twitter integration suggests why Apple and Facebook ran aground on Ping, but iMatch will really head Facebook off once it migrates from music to TV. It’s already working with apps, which means publishers like the New York Times who integrate video and AirPlay will have an interesting subscription-based hybrid magazine/record/broadcast model unencumbered by the cable and satellite crowd. Paging Netflix.

6. After all, who is to say that all iMatch is about is checksums on music files. If Apple can sell a subscription for 30 bucks a year to consolidate your music, it could also aggregate a best of cable news, sports, and events and outbid or partner with a Netflix to leapfrog Comcast. Use the Twitter @mention signals to define and sell direct to those high value customers, and turn around and buy the programming from the studios. And most importantly, create the programming themselves, as in launching the new record business to finance the new television and film business.

7. Isn’t that enough?

Where is Microsoft in all this? Investors and customers are asking the same questions. The House That Bill Built may be in worst shape than even the Ballmer pushers suggest. If iOffice gets traction with the social crowd, it will put pressure on @SteveSinofsky just as he assumes control of a two screens and a hail Mary strategy. Developers hold the cards, and the AppStore beckons. Android blocks Windows Phone from accelerating, and iCloud keeps the media pinned down. Right now it looks like Game, Set, iMatch.

Photo: @Trae Chancellor



(Founder Stories) How Mike McCue Came Up With Flipboard: “What If We Accidentally Deleted The Web”

Posted: 12 Jun 2011 10:31 AM PDT

So you sold Tell Me,and then presumably had lots of options for as to what to do next? A lot of people will go off on BBCs or angel investors. You decided to jump back in and do another start up.

Yeah. I didn't, I wasn't planning to start another company.

OK.

I thought I would do some angel investing. I really wasn't sure what I was going to do. I was pretty red of it, I'd been ten years at that point. And so, I thought, we just had a baby girl and I thought I'd just hang with family and chill for a while.

But you know what I found out was that, the way that I relax is if I'm on the beach, the first thing I do is get a notebook and start sketching out ideas. It's just what I do for fun. And so I'm just kind of addicted to it and I love product.

At TellMe I always lamented the fact that we did a lot of great product work in the first year in a half, and then the other eight years were spent basically just selling that. And so I became chThink about, well, it will be fun just to do a thought experiment and do some cool prototyping and the thought experiment was one where, I don't know if you ever written a presentation or an email and And then you had to redo it from scratch knowing everything we know today.

So get rid of all the sort of historical kind of cruft and think about something totally from scratch. Knowing where the social media is. Knowing the state of banner advertising and what's happening there.

This is before the iPad had come out.

This is before the iPads. Yeah.

You were really kind of ahead of that trend or whatever. You didn't know, no-one at that time really knew the iPad. I mean there were rumors of it.

There were some, like, rumors.

But no-one really knew that it would be that good and that successful.

Right, right. I had started thinking about my days at Netscape when we worked with publishers and the web and then my time at paper software where I was so into the whole idea of tablet computers and I thought wow! I looked at magazines and I looked at an pulling Time magazine, and it looks so beautiful, and then you look at the same article on a website and just a shadow of itself.

I thought why is that? Why are we still living in the mid to late 90's in terms of these web templates? And then, what's the deal with advertising?

I mean advertising is actually making the whole experience worse. Everybody hates the ads. Nobody really clicks on them. They are infinite inventories. So of course basic economics say that of course these ads are not going to be worth very much.

And so now we're talking about pay walls and we are in a really problematic time for the web, and I thought it would be great to reimagine it in the realm of social media, in a realm where you have things like HTML 5 emerging.

And I thought about specifically a tablet type of form factor and magazine, sort of re-creating some of the aesthetics of a magazine, the content's always there, you don't have to wait for anything to load. You can just sort of flip through things. It looks beautiful. There's a sIt looks different, and if you ask people who have magazines, you know, hey, like Mountain Biking Magazine, you know, do you want one without the ads or one with the ads.

Which one you are going to plunk down four dollars for? And they all want the one with the ads. But then, if you ask...

Well, isn't like, Lucky Magazine just like all ads?
Or People.

Well, yeah. Or Vogue for example. You know, Vogue has 1.2 million circulation and they make 3, in the US, they make $300 million a year in just advertising alone against that. In the US. I mean, it's amazing.

So, I think that there's an opportunity here to, you know, tenex the web in terms of advertising, to make the content far more beautiful. And I think the technology trends around social media, HTML5 and the iPad, are enabling that role to finally start to happen and I thought, wow, we could play role in that.

And it felt to me...it's interesting. I think a lot of iPad and iPhone apps feel to me like they're just ports of the web-based version.

Yeah right, that's right.

I sort of felt like Flipboard was like one of the first, probably the first kind of the thing that could only exists on the tablet, like the true tablet native application.

I love hearing that.Say Apple made it app of the year or something right? I mean they probably loved that too. It's like you're really, truly taking advantage of the medium.

Yes, and I think when you're starting from scratch and you have the luxury of no installed base and you see a brand new device like that come out. Yeah, it is an exciting opportunity and so that's what we did. We did put a 100% of our energy into that. It's why we are not any other platforms yet right now, because we are so committed to the iPad and that form factor.

How did Mike McCue come up with the idea for Flipboard, the iPad reader that’s seeing more than 10 million flips a day? In these final two video clips from his Founder Stories interview with Chris Dixon, McCue says that he had no intention of starting another company after selling TellMe to Microsoft (which he talks about in Part I and Part II of this interview). He was tired after ten years at TellMe. He just wanted to take some time off.

But that was easier said than done. “The way I relax, if I am on a beach, the first thing I do is get a notebook and start sketching out ideas,” he tells Dixon. “I am kind of addicted to it.”

McCue did a thought experiment. “What if we accidentally deleted the web and then you had to redo it from scratch?” McCue thought magazines were beautiful, but look at the same article on the web and it is “a shadow of itself.” And the ads are just as bad. Nobody clicks on them because they are ugly.

His very first startup had been Paper Software, during the first wave of pen computing startups in the early 1990s, so when the iPad came along, he knew what he had to do. rethink the reading experience on the Web to look more like a digital magazine. Strip out all the extraneous junk, and you can even make the ads look good. McCue thinks the opportunity for advertising on the Web is “10X” what it is today, and a lot of that is going to be on tablets and HTML5 websites (which is why he recently raised $50 million for Flipboard).

The the video below, McCue and Dixon continue their conversation. They dig into some of the strategies that traditional print publishers are taking on tablets, iPad subscriptions, and the promises (and dangers) of content atomization. “Once things are atomized,” warns Dixon, news publishers lose the cross-subsidization that supports things like “foreign policy journalism.”

McCue thinks the key is to try to recreate the economics of print on tablets and the Web. One of the advantages to Flipboard is the speed with which it delivers new information from a variety of sources in a much more pleasing format. “It's almost like an accelerated version of the web,” says McCue. “We strip out the stuff people don't like about the web”—the blinking ads, the navigation toolbars—and replaces it with better typography and bigger photographs. There are many steps to go, but McCue is betting his company on that future.

Related:

(Founder Stories) FlipBoard's Mike McCue: The Builder

(Founder Stories) Mike McCue On Surviving A Downturn: The TellMe Years

So what do you think about like the New Yorker yesterday or a couple of days ago started their, their iPad service and people seem to like it and there is other things that The Daily which seems to have had less success and so lots of experimentation is going on like New York Times switch to the pay wall.

I personally find there plans of, I mean, in the New York Times I find they had, like, 18 layers of served up, I can't figure out the pricing model.

Right, right, right.

It seems like this is a lot of experimentation and maybe.

Yes.

confusion. What is your vision for how this lend up shaking out?

Well. I don't think it will be a surprising to say that. I am going an optimist on this. I think that the world of publishing is going to come out of this state. There is a lot of things been good that already started to happen and a lot more to come. We are only about a year into the iPad itself and I don't think iPad necessarily Quote, unquote the 'savior' of media.

Media has to be savior of media, but I think the iPad and HTML 5 and social media are all super powerful trends that they can leverage to create a new kind of media experience.

And that harkens back into the high quality esthetic that they have in print, but is also still digital. And this is a journey that everyone is on. They are trying to figure it out, and everybody has different approaches. You know, the Daily has gone down the path of making, what I think, is a very courageous bet to say, "We're just going to do something on the iPad, we're not going to do anything with paper." You know, in fact, do you know heirNew York Times in New York, you know, the printing facility, its massive.

The parking lot alone, its like size Isn't just like classic innovators dilemma those still so hard to give up these on a cash cow business.

Yeah. Yeah. It is a very challenging call Even though everyone know this is going away.

Yeah.

But its like making all these money. So it's like how do you do it?

Yeah. No I know and some won't survive and some will and then there will be new players that will be come into the market. So we are going through a tremendous transformation. But I think that like for example, just look at the New Yorker, what they just did, with Apple is like now figured out a way to have a better subscription model that enables people who are already print subscribers to get the iPad version for free, right.

So just that simple step. You know, makes the whole experience better. And, you know, we have to get to the point where magazines, content or downloaded in the background they aren't so heavy weight and their mobile time.They are not seen as separate apps. That's another big issue like who wants to download an app to read one publication, right?

Also there is a lot of atomization that's going to be happening with content, right? So it is not only about the bundled form of premium content, right? That's one form that people will get the magazines and for example, but then other forms are the atomization of this content and you will get lots of different articles from lots of different sources and then hopefully you might find a source that you think is really great and you decide to become a subscriber to that and get the bundled stuff as well.

But isn't the atomization make it, I mean isn't it sort of like historical accident that the classified ads supported foreign policy journalism, right? Foreign policy journalism on his own, probably couldn't be a single business model.

Yes.

And then like I worry as a citizen let's say, is that like things like investigating journalism, foreign reporting, once things are atomized like you can't have sort of this cross optimization going on. I think that is an excellent point and there is still many open questions in with respect to the business model and how really great content gets funded.

And I think what I am hopeful of is that on the web, we were going to move away from this banner advertising model which banners impact the contents themselves.

They cause people to want to do unnatural things to present the contents, for example long form piece of journalism would be spread out over six or seven page views and you have to hit next page, and it reloads. And every time there's that latency in loading to a next page, you lose readers. And I bet you the number of people who actually get to the end of one of the articles is very, very low.

And so, and meanwhile people are pushing the management to these companies like drive 25 percent more revenue and so they are just doing whatever they can to basically sort of eek out whatever they can, with what they have. now. I think that what's happened with the iPad, though, is been transformative.

Because now people are taking a huge step back and saying, wait, wait, wait. Let's stop the madness here and let's think about, we do have great content. We do have amazing writers. And, you know, if we could just get the same economics for advertising that we do in print online, that would solve most of our problems.

We wouldn't even need a pay wall.

Meanwhile, the whole, you know, element of subscribing, you know, to content is way simpler when you can just push one button and now you can buy an article or a week's worth of, you know, a publication, or you can subscribe to a year. So the barrier to doing that is much lower.

And we know that, like, you know, people happily buy, you know, $4.95 a Time, you know, issue of Time in or The Economist in the train station or at the airport no problem, right? So how can we replicate that?

Yeah. I think also, like, what Apple did was they reset, you know, everyone was so used to getting content for free. They kind of reset expectations. Suddenly people were used to, started paying for content again.

Yes! Logically, it was a different, like it was a different kinda, like you didn't expect things everything to be for free on the iPhone and the iPad. Feels like it's a huge opportunity right.

Yes it is, it is and when the content is beautifully rendered.

It has to be.

And loads instantly and it feels more like that kind of print experience that people know in love. Then I think it's going to like I said, I am an optimistic thinker on this. I think this is going to be a big deal, still many steps to go. But I do believe that that still.

So your goal is to sort of be there should be one app and your goal is kind to be that app.

Well, our goal is to be a player in the space. So way I think about ourselves is you got the high end premium bundled content from lets say the New Yorker or Wired Magazine. At a new isle they have the website which has like a lot of sorta of real time logging kind of stuff as well as samples or you know pull our articles from their premium stuff that sort of mixed in.

And you may have some community Built content there etc. and then we sort of have the connector in between. We make it easy for people to discover content or share content and then to browse that content in a magazine-like format, even though it might be stuff that's written in a blog.

On the website we can make it look and feel like the pages of Wired magazine and then we can help them sell full-page print style advertising against that. That is many times more valuable than banner ads, and you don't have the ads then competing for the screen real estate with the content and blinking at you and stuff.

You have a far better experience and you also set it up, so one of the things our platform does really nicely is, all the content's just right there. You really don't wait for anything to download. It is almost like an excelerated version of the web.

We strip out all the stuff that nobody really likes about the web all the navigation tool bars, all the side bars. And then we let the publisher reinsert the good stuff like, typography, beautiful photographs at full-screen resolution. And then accelerated version of the web.

Yes. Well I think that were out of time but thanks so much for being here and My pleasure it was great to talk to you.

Great talking to you. Thanks.

Thank you.


The Math of TechCrunch, Part 1: Is TechCrunch Still About Startups?

Posted: 12 Jun 2011 09:30 AM PDT

Editor’s note: We often hear the complaint that “TechCrunch doesn’t cover startups anymore.” Yet we feel like we are covering them more than ever. In this guest post, Mark Goldenson breaks down exactly how much TechCrunch covers startups. The results may surprise you (while we haven’t independently checked the numbers ourselves, they look about right). After reading his analysis, let us know in comments what you think is the right mix of startup versus big tech company coverage.

Goldenson is CEO of Breakthrough.com, a startup that helps people find a therapist and get online counseling. His email is mark@breakthrough.com.

Recently I went through a Valley ritual: pitching a story to TechCrunch (not this one). We liked our chances: we were announcing funding, contracts, and growing metrics. It was our first TechCrunch pitch.

Like most press pitches, it went into the ether. We understood; journalists are swamped and cutting through the noise is hard. Yet I noticed that day out of TechCrunch's forty stories, only two were about early-stage startups. The rest were on large or high-profile companies like Google, Twitter, and Foursquare.

It spiked a long-time concern: how much is TechCrunch still about startups?

I wanted to get data to that question and the answer, surprisingly, is both yes and no.  TechCrunch is covering more early-stage startups than ever before, but sadly that coverage is often drowned out by an even greater volume of posts on larger companies.

Methodology

PayPal GM Matthew Mengerink and I did the following:

  • We crawled all 23,547 TechCrunch stories from the first post on June 11th, 2005 to May 11th, 2011.
  • We pulled each story's title, author, and covered companies according to TechCrunch's tags. One story often mentioned multiple companies.
  • For the 6,308 companies covered 40,380 times, we used the Crunchbase API to lookup any data on each company's funding, headcount, category, and investors.
  • We categorized companies by their size:

More on methodology is in the footnotes. Not all stories are correctly tagged and CrunchBase is sometimes inaccurate but we believe it still has a wealth of data.

Here are six of our findings:

1. TechCrunch is now 22 times more prolific than its founding year

Every year, TechCrunch has grown. Last year, it published 22 times more stories, covered 14 times more companies, and had 5 times more authors than its founding year.

2. TechCrunch now covers 10 times more seed-stage startups

TechCrunch's growth has certainly helped seed-stage startups. They were covered ten times more last year than in TechCrunch's first year.

Was I wrong about startups becoming marginalized? Not quite…

3. On average, each late-stage company is covered 7 times more than each seed-stage startup

Here's where seed-stage startups could start griping.

Every year, TechCrunch has increased its stories per late-stage company and decreased its stories per seed-stage company.

In Year One, this ratio was 4 stories per seed-stage vs. 3 stories per late-stage company.

Last year, the ratio was under 2 stories per seed-stage vs. 15 stories per late-stage company.

4. Ten companies account for one-third of TechCrunch's coverage

Even among late-stage companies, coverage is top-heavy. Ten companies now account for 30% of TechCrunch coverage.

The top ten has changed a bit each year, though Google has always been #1. Google has been covered in 1000 more stories than #2, Facebook.

Top 10 Covered Companies by Year (blue: joined top 10, red: left top 10 next year)

5. Foursquare, Digg, and Twitter are the most covered mid-stage companies

A regular complaint among TechCrunch commenters is that a few startups become over-exposed. These tend to be mid-stage companies that have rocketed to traction. Some are arguably late-stage but did not have enough CrunchBase data to qualify.

Top 10 Covered Mid-Stage Companies by Year

6. In summary, TechCrunch's long tail is now 14 times longer but the fat head is 24 times bigger

These graphs illustrate the rub: TechCrunch's long tail of seed-stage startups is now much longer, but its fat head of top ten companies is even bigger. More than half of all stories on TechCrunch — 52% — are now about big companies.

Is this shift justified? It well could be.

There could be fewer groundbreaking startups as the web matures, more innovation by large companies, and most importantly, more people may just want to read about tech's giants. If TechCrunch started publishing story views like BusinessInsider, we could learn if it is just delivering what readers want.

Is this shift still troubling? I think so.

I genuinely believe Mike and the TechCrunch staff are philosophically champions for startups.  TechCrunch Disrupt launches them and the Crunchies celebrate them, but TechCrunch's coverage is crowding them out. Every story about Dennis Crowley's sweater and Twitter going down – "in true
TechCrunch tradition we need to celebrate the downtime with a post" – is less attention to innovations like strong AI, digital locks, or just making landlording easier. In investing terms, seed-stage startups are being diluted.

This change matters. Millions of readers follow TechCrunch, as do dozens of media outlets that amplify its stories. If technology's Goliaths eclipse its Davids, our most promising innovations can wither. When Mike wrote about resisting jadedness at 40, I think he recognized this:

"I sometimes feel that skepticism creeping into my thinking when I look at a new idea being presented by an eager and innocent young entrepreneur… [S]o please call me on it if you see me starting to act my age."

"Sometimes all an entrepreneur needs is a few credulous people willing to say that they have a chance. That gives them the psychological boost they need to fight on for another day."

If TechCrunch continues as is, is there an opening for disruption? I think so, as Marc Andreessen writes on Quora:

"The most remarkable yet easily explainable thing that the existing major blogs do not cover, but should, are the companies that do not have “heat” on them. Lord knows I love Facebook, Apple, Twitter, Foursquare, and all of the other super-hot companies that draw lots of press/blog attention, but there are lots of other companies that are outstanding at various stages of growth that are not as white hot from a public perception standpoint and therefore get covered much less."

"As an aside, the major frustration I hear from some excellent people who work for the major blogs is that they have to focus on the hot companies because those are the companies that drive page views and therefore revenue. While that makes sense, I think there has to be another opportunity covering the less hot but equally high quality companies that will be equivalently lucrative."

TechCrunch deserves its success and has every right to cover what they like. Now at AOL, I hope Mike and the staff take time to introspect. What do they want to be as TechCrunch grows up? Will they be a champion for David or Goliath?

Part two of this story will look at TechCrunch coverage by category, investor, and author. Thanks to TechCrunch for being open to this critique.

Footnotes: Categorizing company sizes is tricky, especially without internal data. Some companies have low funding and few employees but high traction (Craigslist), or have high funding but few employees and little traction (Color). These lines are fuzzy and debatable.

When data was very incomplete, we categorized as accurately as we could. For example, we had to manually categorize Hewlett-Packard as late-stage. We did this for a lot of companies but not all of them as CrunchBase is too large.

To try accounting for companies growing over time, we used any available data to evaluate their status at every coverage. For example, Twitter was covered 9 times at seed-stage (before it raised $1M and Mike understandably called it a total snoozer), 240 times at mid-stage (before it raised $50M), and 1,426 times at late-stage. This is only an approximation since CrunchBase can't always know funding dates and doesn't have employee growth.

Disclosure: Breakthrough.com is headquartered in the incubator at AOL, TechCrunch's parent company.



Household Air Conditioning Unit Doubles As Water Heater

Posted: 12 Jun 2011 08:23 AM PDT

Storing heat may be the last thing you think of when turning on an air conditioning unit, but one model takes advantage of the sweltering weather to heat water while cooling the air.

The aptly named Air Conditioner Water Heater, or ACWH, from Hotspot Energy has a condenser unit that sits outside of the building, collecting heat that the air conditioner compresses and expels from inside. The heat passes through a copper heat exchanger that connects to a home or building’s hot water tank. According to the company, the unit can cool a 1000-square-foot room and heat about 100 gallons of water per day. At its peak, the ACWH can provide 18,000 BTU, or 1.5 tons of cooling using 1333 watts per hour.

Heating water while cooling a building can help save energy, since the heat recovery process eases the load of the air conditioner. The unit has to be installed relatively close (ideally within 150 feet of) the water heater, however, and only heats water when the air conditioner is running and there is enough hot air to warm the water. Using the unit on a mild summer day won’t make a significant dent in water heating costs, but it could have an impact for homes with multiple residents who use hot water throughout the day to shower or wash dishes.

HotSpot Energy, which makes the ACWH, sees buildings as large solar thermal collectors, ripe for gathering heat. Although the unit can be installed anywhere, it was designed with the southern U.S. in mind, where many residents use air conditioners during spring and fall, in addition to summer. Commercially, the company envisions restaurant kitchens, laundromats and server rooms benefiting from their technology.



Fight Mike Arrington, Bing Gordon And More With GraFighters

Posted: 11 Jun 2011 07:38 PM PDT

The tale of graFighters is one of a Kickstarter project that went wrong and then went oh so right. Last fall founders Eric Cleckner and Dave Chenell tried to raise $20K on Kickstarter for the “first online fighting game for your sketches,” but barely raised $3K. Luckily for them, a German investor poking around Kickstarter for projects stumbled across the project and called Chenell to invest. The pair ended up raising a $200K round, 10x their original Kickstarter ask.

GraFighters is a browser-based game that lets you upload your own sketches and customize them for battle with other users’ sketches. If you don’t have any drawings you’d particularly like to see duel lying around your computer you can always use the games pre-existing characters, which include my beloved boss Michael Arrington, gaming legend and VC Bing Gordon, the infamous @Pud or the myriad of previously uploaded made up characters like “Barnaby Bear” and “Floppysaurus.”

As you can see in the demo video above (created at Union Square Ventures per Fred Wilson’s request) the whole endeavor is tons of fun. And while the game is still in private beta as the two co-founders iron out the bugs, TechCrunch readers can include something about TechCrunch in the “Why do you want to graFight?” and get in earlier — When graFighters is ready to handle more beta testers.

The game opens to the public in September.



A Look At The Three Startups That Wowed The Judges At Plug And Play’s Summer EXPO

Posted: 11 Jun 2011 03:33 PM PDT

Like Y Combinator, Plug and Play Tech Center is a startup accelerator located in the heart of Silicon Valley, although you may not have heard quite as much about Plug and Play as you have its counterpart. Nothwithstanding, the five-year-old business accelerator has built a community of over 280 tech startups, across a number of verticals, including Web 2.0, cloud services, systems, semiconductor and telecomms. Since its inception, the tech center has helped its startups raise over $750 million in venture funding.

Not unlike Y Combinator and other accelerators of its ilk, Plug and Play hosts a 10-week summer program designed to immerse young startups and entrepreneurs into the Silicon Valley environment. “Plug and Play Startup Camp”, as its known, provides startups with a curriculum of workshops, speaker series, mentor sessions, as well as offering extensive coaching to help entrepreneurs cement business models, prototypes, and so on. This summer camp for startups runs through August 18th, at which point there will be an EXPO to showcase the accelerator’s latest batch.

Plug and Play also organizes 4 EXPOs (unrelated to Startup Camp) at the end of each quarter, as well as 2 University EXPOs, in which a host of startups present their businesses to as many as 100 VCs and investors. Those esteemed judges vote on the top three companies, which then presumably go on to fame and fortune — or at least have a good shot at raising a bit of funding.

The latest EXPO in the Plug and Play series took place Thursday, and below you will find a brief introduction to the three nifty startups that tallied the most votes and impressed the judges. Definitely worth checking out.

    Aisle411 is an in-store retail navigation app for mobile consumers. The startup is building a mobile shopping platform that allows consumers to search, map and navigate to products in retail stores down to the very part of the aisle in which the product is located.

    With billions of pre-planned digital shopping lists, aisle411 is set to allow digital publishers to integrate the startup’s in-store solutions with digital lists, recipes, and mobile coupons. aisle411's ad network has early brand buy-in from Coca Cola, General Mills, as well as several other retail partnerships and is already live in 1500 locations.

    Over 70 percent of shoppers use a list prior to shopping, and as smartphone saturation grows, the majority of shopping lists and products searches will be executed in-store on a mobile device. As Google Wallet, Paypal and Square look to deploy mobile payments, aisle411 offers highly targeted, high margin offers delivered seconds prior to the purchase. The startup is also offering an API that includes a proprietary in-store ad engine that can target messaging to specific user based on their current and historical shopping lists, as specific as branded products within specific aisles. Pretty cool.

    Creaza Inc is an online video production platform designed to enable users to collaboratively produce, share and store user-generated video. By combining the power of cloud-based computing and broadcast-quality HD, with a user-focused experience, Creaza's platform is attempting to make video truly social.

    Creaza's social video platform enables users to shoot, edit, share and store their self-generated videos. Content can be shot with any video-enabled decice and easily syncs with the user's private Creaza media library — all in the cloud. Users can edit their video clips with professional-looking titles, transitions, effects, animation, music and narration. The startup’s cloud-based architecture enables easy and secure video project collaboration and co-creation among friends, colleagues and others. Final videos can be shared in an online workspace: downloaded to a favorite device or stored with Creaza. Everything happens in the cloud. No installs, no upgrade, ad no file conversions.

    The startup says that it’s trying to transform the video industry. I like the sound of that, but you be the judge.

    XYZ Interactive is developing a series of low cost sensors that can be used to determine the precise location of objects, and use gestures to control devices without touching them. (Kind of like what Gilt Groupe is doing with their iPad app.)

    The startup claims that its technology can replace competitors’ sensors at a fraction of the cost with better performance. Advanced sensing arrays are three times less expensive than the competition and overcome limitations such as blind spots and outdoor operation, allowing for mass adaption for touchless and gesture control of displayes, tablets, and mobile devices.

    XYZ’s tech is adding depth, touchless control to your devices to help make them smarter, ranging from enabling simple presence, distance and gesture measurement in mobile and consumer electronics devices — to complex 6DOF 3D (six degrees of freedom in three dimensions) absolute position information as required un augmented reality environments, sport simulations, home and industrial automation, retail sales conversion, novel interactive toy and display controllers, and hospital environments.

    With granted, pending, and provisional patents, XYZ Interactive provides the technology for sensors and systems to precisely, and very inexpensively, locate objects in 3D to within millimeters of accuracy at meters of range. Awesome stuff.



Fear Not, Unemployed Girl Kittens Sticking It To The Man! The Internet Community Has Your Back

Posted: 11 Jun 2011 02:13 PM PDT

It’s one of those stories about which it’s impossible to be cynical. Alice Pyne, a British teenager suffering from terminal Hodgkin’s lymphoma, has drawn up a “bucket list” of things she’d like to achieve before she dies.

This being the social media age, Alice posted her list online and – this being the Internet age – thousands of well-wishers are now using Twitter, Facebook and the rest to help make a dying girl’s dreams come true.

Or as the standfirst of Mary Elizabeth Williams’s Salon article put it: “Alice Pyne still has a few things she’d like to do. Now the Internet community is making them happen.”

Hrm. It might be impossible to be cynical about Alice Pyne and the generous folks who have rallied to her comfort — but as for the wider notion of a good and noble “Internet community”? Yeah, that one is way overdue for demolition.

Let’s start with the phrase itself: The Internet Community – that ragtag band of 2.09 billion people currently online who, while counting Nobel prize winners, Presidents and other overworked souls amongst their numbers, are always ready to take up whatever cause seems most deserving. Especially if that cause happens to have as its figurehead a sick child, a brave soldier, an attractive woman fallen on hard times or – I dunno – an unemployed kitten who is bravely trying to overthrow a murderous Arab regime. (The only thing the Internet Community loves more than the underdog is the undercat). One might as well praise the amazing work being done by the “electricity community” or the “oxygen community”.

Really, what the press calls The Internet Community is more accurately described as The People With Too Much Time On Their Hands Community — or perhaps The I Spend My Life Dicking Around On Twitter And Call It A Job Community, The I’ll Do Anything The Internet Tells Me To Do Community or The So Fucking Gullible I Should Be Locked Away For My Own Safety Community.

Just take a look at some of the Community’s other triumphs over the past few weeks. Back on May 25th, they declared a Fatwa on Urban Outfitters after the evil corporate behemoth (The Man: check) ripped off some jewelry designs from Etsy member Stevie Koerner (attractive woman on hard times: check). The result: a gale of Twitter and blogosphere outrage directed against the company and a ton of orders for Koerner, who told NBC Chicago:

“The internet community is so strong, and I’m happy people are fired up about supporting independent artists and designers… It’s very inspiring to be part of a community who has unified through the internet and whose voice has been heard.”

By the time Regretsy’s Helen Killer pointed out that Koerner’s own design was far from original, and that Urban Outfitters were probably innocent in this case, the Community had already moved on to their next good cause.

Step forward A Gay Girl In Damascus, a young lesbian blogger (check!) called Amina Abdullah who was reportedly arrested by Syrian forces (check! check!) for her brave stand (check!) against an oppressive regime. It didn’t take long for Amina’s plight to be the talk of the Twitterverse, with The Internet Community demanding that “action” be taken (and emails be sent to the Syrian government) to secure her release. “A Gay Girl In Damascus Blogger Kidnapped: Take Action!” cried Feministing.com, linking to a “Free Amina Abdullah” Facebook page. It was only after the dreaded mainstream media (lead by NPR’s Andy Carvin) picked up the story that questions began to be asked: has anyone actually met Abdullah? Why does every attempted telephone or in-person interview with her end up being cancelled at the last minute? Why is the profile picture posted on Abdullah’s blog actually that of Londoner Jelena Lecic? Legitimate safety concerns or a cruel hoax? Who cares! As the moderator of the Free Amina group put it…

“Questions about Amina’s identity are surfacing. However, we think it is possible that the writer of the blog is indeed in custody, in which case, it is important to continue to support her.”

Moving on…

On Wednesday it was time for another boycott; this time against Delta airlines for their shameful treatment of a group of soldiers returning from Afghanistan (ding ding ding!) who were charged $200 each in excess baggage charges for their equipment. The soldiers in question made a video naming and shaming Delta and within hours the Internet Community were on the warpath. Meantime, back on the Reddit thread that sparked the initial outrage, people familiar with military transport (and airline) policy began to raise their hands and point out that – uh – Delta already has a special allowance for troops to check three bags at no charge, with the military reimbursing soldiers for any baggage charges beyond that. Sure enough, the video has since been deleted. Too late though – the calls for a boycott had already made it halfway around the world before the truth had put its pants on, forcing Delta to apologize for doing nothing wrong.

Spend a few minutes Googling The Internet Community and for every heartwarming success story like that of Alice Pyne’s bucket list you’ll find a hundred misplaced boycotts, bone-headed DDOS attacks, ass-backward outrage and hours wasted in the pursuit of non-justice. There’s a reason for the popularity of Snopes.com: the long-suffering mother of the Internet, constantly reminding its Community that it’s probably unwise to poke forks into electrical outlets.

Malcolm Gladwell wrote in the New Yorker that the most effective online campaigns are those which require the least effort: a click, a retweet, maybe an email or two. It should come as no surprise, then, that many self-styled Internet activists can’t find the time or inclination to carry out the most basic due diligence before throwing their hat into the ring of outrage.

And yet, suggesting that moronic, over-sentimental, knee-jerk outrage is unique to some mythical “Internet Community” is as ridiculous as giving that same Community credit for doing good. For all the seductive nonsense about the wisdom of the crowds, large groups of people have always tended to act in stupid ways. The Internet just makes it easier than ever to turn that stupidity into action.



Fred Wilson On Disruption: “You Can’t Stop What People Ultimately Want To Have Happen”

Posted: 11 Jun 2011 01:05 PM PDT

New York’s Internet Week featured a panel discussion with Union Square’s Fred Wilson, Hunch’s Chris Dixon and SV Angel’s David Lee. We took a camera to the event and have been posting excerpts all week. In this outtake – the three dive into a discussion about disruption.

Dixon teed up the conversation by talking about areas he considered ripe for disruption: Education, finance and government—saying government incumbents and lobbyists hinder development and have no real reason to push for change. Lee took the mic and tossed healthcare into the mix before wrapping by saying “there is a lot of inefficiencies in those systems … and we think that … anytime there is that type of inefficiency there is an opportunity.”

Batting third, Wilson claimed that “politics and government have been a terrible place to invest, education has been a terrible place to invest but that is because the entrenched interests make it a terrible place to invest. The way you invest in those sectors is you go against the entrenched interests, you try and disrupt the entrenched interests, not to service them.”

Wilson highlighted Sal Khan who created more than 2,000 free online classes through his Khan Academy and noted that “the vast majority of people who are on Khan Academy are not in the United States.”  Saying “if you really want to see how the world is changing go to Sub-Saharan Africa or go to Southeast Asia or go to Eastern Europe and parts of the world that have not had things that we take for granted and look at how they are using the internet to get access to those things and I think that is where you see the big game changing things are going to happen.”

The three go on to discuss disruption in the TV, hotel (Airbnb) and music industries with Wilson noting “you can’t stop what people ultimately want to have happen.”



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