Tuesday, September 26, 2006

Facebook goes public...

And I don't mean an IPO. Facebook finally opened their doors. They declared war on the MySpace empire. Now, anyone can sign up, join a network, and be on Facebook.

Good thing or bad? Most college kids don't like the idea of it. But screw them, right? It's overall registered users and page views that matter. And most pundits agree the move will boost both, thus increasing the site's overall value.

However, I feel their analysis could be a little superficial. Today, college kids make up the vast majority of Facebook users, especially the avid ones that sign in almost every day. How will this move affect them?

Well, their non college friends will be able to get on the network, so more friends means more time on the site right? Not necessarily. As an example, today I received a friend request from a someone I used to work with.

And the dilemma hit. Clicking accept would give this guy insight into the college-me. The partying, off-color joke making, irresponsible, immature me. Not the image I want this guy seeing. Or any potential employer. Or certain family members. The list goes on and on.

So what does this mean on a large scale? This move could simply take the "social" out of Facebook's social network. When Facebook was college-exclusive, its members felt safe. Facebook was their place, where they could express themselves and not worry about who was looking over their shoulders. So they did, and did so often, giving Facebook a very active user base.

But now Facebook is open. To me the problem is real - do I strip my profile down to the bare bones (a picture, name, and email), removing the social aspects of the site (my wall and photos, for example)?

And how many other people are pondering the same thing? Sure, not many today. But the question will spread, because at the end of the day, it's not actual privacy that concerns people, it's perceived privacy. The company can implement all the privacy restrictions it wants, but people are only as safe as they feel. And when a freshman with a profile picture of himself drinking a beer gets a friend request from his Mom, he's going to reevaluate how much social "expressing" he really wants to do on Facebook.

And when the site's members feel they can't express themselves freely, they'll stop. No more posting pictures or writing on each other's walls. No more creative profiles. And Facebook will be reduced to a glorified address book, if that.

OK, so I'm not saying all of this will necessarily happen. But I am painting a picture of a possibile future. And the crux of the issue rings true - Facebook enjoys an active, avid user base primarily because college kids have deemed it an acceptable online outlet for social expression. If that changes for any reason (real or imagined), Facebook could fall out of popularity very quickly, at least with the college audience.

At the end of the day, the move will probably help the company compete directly with MySpace and other social networks. However, its consequences may lead to it backfiring if Facebook's heaviest users decide the site is not secure or exclusive enough for social expression.

And, if they do decided that, could it be that the site's total page views could, gasp, go down? No one knows, but as always, time will tell... Thoughts?

Friday, September 22, 2006

Apple/Google Partnership

We've seen this one before, right? Two up and coming companies (or in this case one that is regaining some of its luster from the 1980's) teaming up to take on the the titan, Microsoft. More than a decade ago, Sun and Oracle, led by Microsoft-loathing Scott McNealy and Larry Ellison, respectively, teamed up to take on the behemoth. Today, both are shadows of their former selves, yet Microsoft marches on, barely scathed from the onslaught.

And now Apple and Google's flirting have them headed in a direction to attempt to finish what McNealy and Ellison could not. Eric Schmidt joined Google's board about a month ago, and the companies recently entered talks - the pieces are in motion. The topic has been a hot one in the Valley - Om, Robert Young (who writes for GigaOm), and Michael Arrington (of Techcrunch fame for you east coasters who don't know...), to name a few, have all blogged about it recently.

Their general consensus has been positive - Om warned competition about the companies' synergy in the media distribution market, Young pointed out that Google's internet-platform focus fits nicely with Apple's hardware/software core competency, and Arrington mentioned Google Video on Apple's upcoming iTV as an intriguing possibility.

My take on it isn't so rosy, and it's not just because I love flying in the face of conventional wisdom (well ok, maybe it is a little bit...).

To start off, synergy in media distribution (i.e. watching a movie on Google Video and then buying it through iTunes, etc.) breaks down when the market is thoroughly examined. The hallmark of the online media industry is razor thin margins. Thus, though partnering could reach a wider audience, in the end, vertical integration gives the most potential for profits. For example, if SoapBox and Zune both take off, the two could be linked to increase video sales for Microsoft. It's not a surefire strategy, but it hints that perhaps Apple would be better off not having to share profits with Google and attempting to vertically integrate rather than partnering. Still, Om astutely points out that there are certain overlaps between Google's search capabilities and iTunes that make a potential partnership valuable (linking song searches to buying songs, for example). So maybe A/G can add some real value this way.

But the real groundbreaking potential of the partnership lies in what Young delved into - aiming a dagger at Microsoft's heart, Windows - the Holy Grail that McNealy and Ellison chased for years. Making a pretty penny of media would be great, but taking down the juggernaut has to be the ultimate goal. But how? Young argues Apple's hardware/software approach juxtaposes nicely with Google's internet platform applications.

And to an extent, he's right. As he states, the next step in computing is the bridge. The future is headed towards an online OS and the "dummy terminal" dream that has launched and failed so many times. Some day, our computers will be simple ports from which we can access all of our data, instantly, via the web. But because technology has not yet brought us to that point, today we must aim for a hybrid of local and online apps, a set of goals that seemingly aligns nicely with Apple's and Google's core competencies.

So A/G could potentially join forces to bring us that bridge. Apple provides the hardware and a sweet OS, while Google keeps churning out web-based applications. A close partnership could lead to well-knit integration that adds seriously value in terms of UI.

Of course (and here is where I take the position that makes you scratch your head and wonder if I'm crazy), I just don't think they will win. Hear me out. Yes, they can build some pretty cool stuff and yes, they have a bunch of very smart people working away at it. But here's the dirty little secret that's slowly getting out: Gates is one step ahead. Boss man Bill is at it again - he's realized his weakness, as great leaders and minds often do, and rectified it via the creation of Live, Microsoft's next gen series of web applications.

And to be blunt, Live is awesome. Sick. Dope. Ridic. Even the Microsoft haters admit it. Microsoft was vulnerable, sure, but the key word in that statement is was. The core of the A/G partnership would be the integration of desktop features with web applications (the so-called "webtop"). For example, there could be an icons on the desktop that open Google applications (spreadsheet, maps, etc.) and other tie-ins between offline and online programs.

But Microsoft beat them to it. If they've got half a brain (admittedly questionable as of late), the boys from Redmond (thats Microsoft you east coasters) will integrate Vista (their new OS) with their Live applications.

At that point, A/G's attempt begins to smell a lot like the one from a decade ago (or two decades ago with Mac vs. Windows) - too little, too late. I can't believe I'm saying this, but I think Microsoft has them outfoxed. Furthermore, Microsoft has a clear advantage in terms of integration between the OS/desktop and web apps because it owns both, whereas Apple and Google are two separate companies who will have to collaborate. To top it off, a serious partnership would be somewhat contingent on Apple regaining market share, and for all the hype they've been getting recently, they still own an extremely small segment of the computer industry.

My conclusion - the A/G partnership is a nice thought, but they will suffer the same fate as Sun and Oracle. Many have tried to dethrone Gates and Co., but none of have succeeded. Media distribution could be a cool card trick, but attempts at winning the OS/platform war will fail.

Then again, Jobs should be used to it.

Thursday, September 21, 2006

MySpace vs. MTV

Om wrote a great article on Murdoch and Redstone and the battle they are fighting for control of the various media industries. Om Malik is the man behind GigaOm, an immensely popular Silicon Valley blog, and is currently starting a media-related company after relinquishing his position as senior editor at Business 2.0. And from what I gleaned from a dinner over the summer, he's a really good guy as well.

The post is the kind of piece I aspire to write (and have tried to many times on this blog as you loyal readers know), but his analysis is obviously far superior. Stay tuned for a similar article (by me this time) on the merits of the possible Google/Apple partnership.

Thursday, September 14, 2006

Bow Wow

Barked Dogster Inc., as they formally announced the completion of a $1 million Series A round on Thursday. The firm, which has grown to 10 employees, had been raising money for the past few months and finally reached their goal of $1 million.

The occasion holds special significance to me - my boss over the summer, Scott Rafer, is an adviser for the company, and I was lucky enough to meet the men and women behind Dogster and spend a few days at the office. Jeff Clavier, who I was fortunate enough to meet this summer and is one of few VCs who is a truly great guy, wrote a great piece on the company on Thursday when the news broke.

But the biggest reason the news is so joyful is what it represents. At its outset, Dogster was a few guys with a dream - to unite dog owners and give them a place to express and share their love. But their story isn't just a feel good one - they followed a winning strategy: "thinking small." It seems counterintuitive, but it just may be the recipe for success in the Web 2.0 world.

Conventional entrepreneurial thought tells us the individual shouldn't be afraid of going all out, of thinking big. One guy can change the world, right?

Maybe, but that isn't always the healthiest attitude for a start up to take. The founders of Dogster identified a problem, built the solution, and concentrated on getting it out fast, rather than adding a lot of features. They weren't trying to take over the world, and thus they didn't try to build a product to do so. Rather, they focused on a niche they intimately understood and immersed themselves in a labor of love.

And, in many cases, that is what being an entrepreneur is about. We shouldn't be starting our companies to flip to Google or Yahoo, we should be doing it to make our own little dent in the world. As Web 2.0 continues to revolutionize our life, many of the companies that succeed will be the ones born out of passion.

As Clavier points out in the article, Dogster's numbers look great, and their future is bright, but, for me at least, it all starts with love. And they really love dogs. Their "office" is a room big enough for 10 desks and a couple couches with no less than 4 dogs running around. Forgive me for sounding like Steve Jobs, but Dogster's employees don't just work for a company, they work for a cause.

So what does it all boil down to? Of course, start ups need a sound business plan and product. But though it may sound cliche, at the end of the day, success starts with passion, and that passion can be harnessed by "thinking small," by not worrying about the big picture and focusing on your niche.

Godspeed, Dogster.

("Thinking Small" was a presentation at Comdex a few months back, one that my boss preached to me as a strategy for approaching a project of my own. A video of the presentation and the slides can be found here.)

Zune launch

Microsoft announced a press conference scheduled for tomorrow regarding their new Zune line of products (which I blogged about a while back). Stay tuned (or just go to TechCrunch) to get details. Interesting timing though, a few days after Apple's Showtime event.

Tuesday, September 12, 2006

Apple unveils...

A bunch of stuff at the Apple Showtime event in San Francisco. It's late and I don't feel like giving details, but basically Apple enabled movie downloads off iTunes, added some features (but nothing great to the iPod), and, coolest of all, a little device that enables viewing on your TV of content on your computer. The iTV, as it will be called, is the yet another to bring computer content to the television but could easily be the most successful.

For the full story, check out TechCrunch's article.

My 2 cents: by all accounts, Steve Jobs was at it again. He worked the room in true form. His status as a genius has often been debated, but theres no denying he's a master showman. More than 2 decades after the legendary Mac launch, he can still capture the hearts and minds of Silicon Valley and the world.


I decided to name this post after the episode of Entourage where Ari leaves his old agency, as it alludes to the dark underbelly of almost any organization: betrayal, mutiny, and treachery. Such scheming can be the undoing (or salvation) of any organization, but its effects are greatly magnified when it comes to start ups due to their small size.

We've all heard stories - VCs replacing the CEO with their own man, founders turning on each other to increase their own equity, and many more. Conventional wisdom frowns on such practices, but my I'd like to question that.

At what point is the backstabbing ok? Granted, it's never the preferred option, but sometimes it must be necessary, right? Otherwise, it would never happen. (Yes, that's debatable, but stick with me for a bit.)

I'd contend that the survival and success of a company always comes first. The organization is above the individuals, and its salvation is of utmost importance. To that end, the founders who oust one (or more) of their own are somewhat justified. Sometimes the circumstances and people involved leave no other path - trying to openly solve via discussion just puts a band-aid on the would, one that will inevitably come off.

But making the decision is hard. Most early stage start ups are comprised of people who are already friends. When your company has 10 people, all of whom you know well, how do you gather the courage to fire the bad apple? And what if that bad apple is your CEO?

It's tough. But I firmly believe that the members of the company have an ironclad duty to the firm as a whole, one that supersedes ties to individuals, and that they must do the right thing for the team, regardless of the consequences and any apprehension. That's the sign of true strength in an organization.

Of course, it's easy for me to sit here and write this. When you face this problem, good luck executing. (Yes, that was a pun.)

Saturday, September 09, 2006

Why, Microsoft, Why?

Microsoft has unveiled a YouTube competitor, Michael Arrington reported today on Techcrunch. SoapBox, as it is rumored to be called, will basically be a YouTube clone, offering a similar set of video sharing services.

Arrington rightly wonders why they are launching the service under the MSN brand, rather than the Live brand. The Live set of products are it - the next generation applications that will enable Microsoft to stay atop the market over the next few years. It's really, really cool stuff (a post on it to come shortly). But then why launch SoapBox as an MSN product? MSN has labored for years to be the type of all-in-one portal that Yahoo is, without much success. Launching on Live would give SoapBox traction much faster, crucial for a service that derives its utility from its user base.

However, in my mind, the more obvious is question is "Why?" Why launch a video sharing service in the first place? It just doesn't make sense - YouTube already owns the market by a wide margin. Just as importantly, the space is crowded - really crowded. How many video sharing sites have sprang up since YouTube gained popularity? Google and AOL have already joined the rush, not to mention countless start ups. Does Microsoft really think its SoapBox can pull a number on YouTube like its Explorer did on Netscape?

It's not going to happen, and this will probably be yet another failed experiment on Microsoft's part. But the move really makes you wonder - what are they thinking? Has the the preeminent tech company of our generation really fallen so far? Do they really believe their minuscule chance of success is even worth the effort? And even if they do succeed, what will they have gained? The reward is almost non existent, regardless of the risk.

The "chicken with its head cut off" syndrome has become far too common place at today's tech titans. I don't even think this post is all that insightful - I think I'm just stating the obvious, that SoapBox is a horrible idea. But that's the point - it's so obvious, but Microsoft is still doing it. The market leaders keep churning out these pointless projects and clones rather than sticking to the ingenuity that made them leaders in the first place.

But I guess it's not so bad - at least it leaves room for you and me to make our own little dent in the world...

Thursday, September 07, 2006

Ethanol Debate

Robert Rapier, co-author of The Oil Drum, recently wrote a scathing post on Vinod Khosla's stance on ethanol. For those who don't know, Vinod Khosla is one of Sun Microsystem's four founders and currently runs a prominent VC fund in the Valley, Khosla Ventures, which he started after leaving his post as general partner at Kleiner Perkins. Rapier co-authors the fairly prominent blog and proclaims environmentally friendly aspirations despite working for an oil company. (The two don't seem as much at odds after reading his post.)

To summarize, Khosla has been pushing ethanol as an alternative energy source for a while now, claiming many benefits. As stated above, Rapier blasts Khosla's stance with solid economic and technical arguments. VentureBeat has a great summary of the debate here.

I'll throw my lot in with Matt Marshall and VentureBeat - I think Rapier makes better points and generally wins debate as Khosla needs to fall back on moral arguments to have a case. From what I know about ethanol from a scientific perspective (granted, not much), it doesn't seem to be The Answer to the energy debate. The economics just don't add up, but read the debate all the same.

Cool side note (as told to me by Rahmin, who has been previously mentioned in this blog and is co-founder of Involver): Ethanol is only around because of socialist policies our government put into place in the 1970s. Basically, laws were created to protected domestic corn producers, offering subsidies to help support the declining demand for their crops. Over the years, this led to an overabundance of corn until some brilliant scientist discovered it could be used to produce ethanol. It'd be interesting to see what would have happened had the government let the Invisible Hand do its thing.

(To be clear, the above paragraph is most certainly NOT meant to be complimentary towards the government. Because they didn't have the guts to make the farmers find new crops, we're stuck with a mediocre un-solution to the energy problem thats draining manpower and resources. I'm very much against the governmental aid for ethanol for which Khosla is lobbying.)

Wednesday, September 06, 2006

Facebook (update)

The wrath has been harsh and swift. Reactions to facebook's new design have been extremely negative, with more than 100,000 joining a group called “Students Against Facebook News Feed.” And that's just one such group - there are tons more out there to the same tune.

Oddly enough, most of the preeminent tech blogs were praising the changes as a quantum leap in social networking, as written below. (Ok, maybe not a quantum leap, but you get the point.)

There probably is a middle ground in terms of new features and maintaining some level of privacy from stalkers, but time will tell if Facebook can find it. In Zuck's own words: "Calm down. Breathe. We hear you." A little condescending, but at least they realize they have a problem.

Tuesday, September 05, 2006

On Facebook

So Facebook finally did something. Most of you have already noticed and probably formed some sort of opinion. The tech blogs are ablaze about it, of course, with the majority of the feedback being positive. TechCrunch, SiliconBeat (which has actually been renamed VentureBeat as of late) and GigaOm are all fans, to varying degrees (in that order).

To summarize, there are two new features added. The first is an RSS feed-type aggregation of what your friends have been up to (writing wall posts, friending, joining/creating events, etc.) and the second is a mini-feed that appears on your own personal page about what you have changed on Facebook.

My thoughts on it all are mixed. I think they've taken a fairly unique approach to social networking, and the new layout offers a plethora of information at users' fingertips. It's nice to keep up with friends, especially those you don't see much. From a business standpoint, the features will probably result in increased page views, as users now have more to look at. Quite simply, Facebook has become a more interactive social experience, so people will probably spend more time on it, especially the moderate to heavy users who currently spend much time "facebook stalking." (However, an alternative theory could be that since the info is all there, people won't spend more time looking for it and thus page views will decline. Thoughts?)

On the flip side of all this is a very real worry about privacy. The (few) people I've already talked to have echoed these concerns. For example, I may not want everyone to know when I've signed a wall or friended someone. Facebook was already a privacy nightmare, and the new design has only exacerbated the situation. The facade of protection that came from requiring college email addresses has long since evaporated, as employers and many others are already on the site. In regards to the new features, "it's too much" seems a be a popular response.

Another interesting note is the launch of the redesign coincides very closely with YouTube's announcement of a college section on its site. Though the move received mixed reviews, it is clearly the first real competition Facebook has faced. Oddly enough, the current Facebook design doesn't include video sharing, which is the logical response to YouTube's move. Time will tell what, if anything, Facebook does to directly address YouTube's threat.

But I want to conclude with an interesting angle that (I believe) hasn't really been considered yet. My first take on the redesign was that, with a little more work, it could be a fantastic events portal. The events scene has been getting a lot of attention generally (Upcoming getting bought out, Zvents, Eventful, etc.) and personally with my boys Rahmin and Matt launching Involver recently (which will garner a full post once I get the time to poke around the site thoroughly). But if people start using the events functionality on facebook, the new interface would be great for keeping track of whats going on and who is going where - the long sought after, first true social events network.

But then again it's doubtful people will really start using the events, and it's more doubtful Facebook will gear their site around events.

As always, and especially with this topic, your thoughts are highly encouraged...

Sunday, September 03, 2006

Guess who's back

I finally got my laptop back, so the posts should be coming frequently now. I'm going to need a little bit to catch up with what is going on (as I am, unfortunately, in Philadelphia) and settle down here, but basically all is well on this end.

I'm also attaching this blog to facebook, so hopefully it can reach a some people who wouldn't otherwise read it. And keep the comments coming.

All in all, I'm back.