In my mind, helping to bring some cohesion to our region's distributed network of talent, capital and is a 15-20 year project. ......

Getting to the right point takes time, and the cycles that kicked off what we now know as Silicon Valley began nearly 50 years ago.

Investing legends like Arthur Rock (Fairchild Semiconductor), Don Valentine (Cisco, Apple, EA), Don Lucas (Oracle), Dave Marquardt(Microsoft) and John Doerr (Netscape, Amazon, Google) and the entrepreneurs they backed created franchise businesses that still dominate the technology industry today. But maybe more importantly, all these businesses created the raw materials (talent, seed capital and technology) for next generation of the today's winners like Google, Facebook, Salesforce.com and many many others.

I made the same point last week to Laura Rich of Fast Company who is doing a piece on startup ecosystems. I think it is good to think about decades when you think about the development of new startup hotbeds.

In the first decade, you are largely making it up, copying what works elsewhere, the VCs and entrepreneurs are largely doing it for the first time, and while you can have successes, they are mixed with a lot of failures. That was 1995 to 2005 in New York City and 1965 to 1975 in Silicon Valley.

In the second decade, you start to get it right. The entrepreneurs are doing it for the second or third time. The infrastructure has developed (lawyers, VCs, recruiters). And it is easier to get talented employees to do a startup. This is where we are in New York City now and is where Silicon Valley was from 1975 to 1985.

In the third decade, the ecosystem is fully formed and producing great companies. That is where Silicon Valley has been from the mid 80s on.

The only other startup ecosystem that is as fully developed as Silicon Valley is Boston. It got started even earlier than Silicon Valley with General George Doriot's ARD in the 1950s. Boston is an interesting case study because although it has all the infrastructure in place and plenty of serial entrepreneurs, role models, and success stories, it has had a harder time making the transition from tech deals to web deals. It is getting there now.

So back to new startup ecosystems developing in europe, asia, and elsewhere. It can happen and it will happen. But it takes time. And you can't fast forward because we are talking about experience which can't be manufactured. You simply have to put in the time.

When Brad and I first thought about our firm's website back in 2004, we quickly decided it should be a blog and that is what it has always been and it is what it will always be.

Our investment thesis is not a static thing, it is a living and evolving thesis, and the only way we know how to express it is in a series of blog posts in reverse chronological order. As we've added to the firm, our website has grown to include new voices like our partner Albert and also Andrew and Eric. It was time to refresh the look and feel and organization, but we've not changed the goal of the website.

There are three things I'd like to highlight. The first is our "focus" page. On this page we've simply collected all of the blog posts that we've written over the years on usv.com that are about our investment strategy. If you read all of the posts on the focus page, you'll understand what we invest in and why. And as our focus evolves, you'll see new posts explaining how we are evolving and why.

The second thing is the portfolio company page. Each portfolio company has an entire page on usv.com and that page is dynamic. Here is the Boxee page on usv.com. It has a short explanation of the company's business and then links to recent posts from the company's blog, along with photos, videos, and tweets from the company. This page is powered by a slick tool from Magnify. We appreciate their help in making these pages come to life. I think they are terrific.

And I'd also like to highlight the team member page. It is also powered by Magnify and includes a similar set of content as the portfolio company page. Here is my page on usv.com.

The new look is the work of a talented web designer named Phoebe Espiritu. In addition to her considerable talents, she is terrific to work with. The project was managed by Eric Friedman and I'd like to thank him for all of his effort on it.

I'm very pleased with how this came out. Our business and portfolio is changing rapidly and we've now got a website that changes in real time with it. That's the way it should be.

I'm sorry to say that it is overwhelmingly male, 92% of the respondents are men. I'm also disappointed that 75% of the respondents live in North America. Other than those statistics which I am hell bent to change, I am pretty pleased with the composition of this audience. We are bloggers, twitterers, early adopters, travelers, and people who want to make their mark.

If you haven't gotten around to taking the survey, you can do so right in this post.

I'll accept that critique. And take it one step further. The option pool is absolutely a piece of the price negotiation. But it is a very important one as I'll explain.

But first, let me lay out a few things for those who aren't well versed in these matters. The pre-money valuation is the value of the company before the money comes in. Let's say we call it $4mm. And let's say the financing is $1mm. Then the post-money valuation is $5mm and the $1mm round is 20% dilutive ($1mm/$5mm).

But to the entrepreneur it might be a lot more dilutive due to the inclusion of the option pool in the pre-money valuation. Let's say that the VC's term sheet says that a 15% "fully diluted post money" option pool needs to be in the pre-money valuation. What that means is that the investor wants 15% of the company, after the financing is closed, to be in an option pool that has not been granted to anyone.

In the case of the $5mm post money valuation, that means there needs to be $750,000 worth of options in the pre-money valuation. If the pre-money valuation is $4mm, then that means the true pre-money valuation to the entreprenuer is $3.25mm. And therein lies Mark's critique that the option pool is just another way to lower the price.

I am sure I lost a few of you on all of that math. If you want to drill down on it, please leave a comment and we'll help you figure this out. It is very important you understand all of this if you are or want to be an entrepreneur who raises venture capital.

The bottom line is the deal I described leaves the entrepreneur and his/her shareholders with 65% of the company after the financing, the VC investor will own 20%, and there will be an option pool representing 15% of the company that has not been issued yet. The $1mm financing was not 20% dilutive, it was 35% dilutive.

So it is not surprising that entrepreneurs hate this provision and fight about it every time. And like most terms, VCs have been abusing it for years by asking for excessive option pools making the provision hated more than it needs to be.

The first point I'll make is that VCs should be upfront about this provision and the fact that it is simply about price. In the example above, I'd be happy to pay $3.25mm pre-money with no option pool. Or I'll pay $4mm pre-money with one. They are the same thing to me. What an entrepreneur needs to do is find out what the market price for their company is with and without an option pool in the number. Once they do that, the negotiation over this point is a lot less contentious.

The second point I'll make is that the option pool request needs to be reasonable and based on some kind of budget. I generally ask the entrepreneur to put enough options into the "pre-money pool" to fund the hiring and retention needs of the company until the next financing. My thinking on this is that I don't want to get diluted between financings. So I like to see a headcount based hiring plan with expected options against each hire combined with a retention plan for all current employees who will need additional option grants.

In most of the early stage financings I've done in the past few years this work on the option pool has shown a need for around 10% in unissued options. I've seen it as big as 15% but that is rare. I've also seen it as low as 5%, but that is even more rare. But the point is this; don't guess or negotiate this number. Do the work, figure it out, and put it in the pre-money and then negotiate price.

I'll wrap with a true story about this provision. When Mark and I were negotiating the first round of financing for Zynga, we got into a real tussle about this provision. He did not want an option pool in the pre-money valuation. I did. Once we agreed that it was just a fight about price, the conversation got easier. I got him to give me an estimate of the pool he would need. We added it to the valuation we had agreed to. He got an increase in price, I got an option pool. And I got one of the best investments I've ever made.

It was a great moment for me. I got to meet many readers who I know by name but not in person. Putting a face to a name is a wonderful thing. I also got to meet Sarah Bunting, whose blog, Tomato Nation, raised $315,000 for Donors Choose in October. Talk about "blog stars". I've got a lot to learn from Sarah.

And I got to meet a bunch of teachers. One woman teaches middle schoolers in the Bronx with special needs. A couple others teach music in a middle school in southern brooklyn. A third teaches pre-K in the East Village. I met several others as well. 

I am telling you that these people (all women) are doing god's work. And it made my day to meet them and know that we all did something to help them.

It may have been the first meetup I've done with all of you, but it won't be the last. Thanks to everyone who showed up. I know we were competing with the Yankees but I got home in time to see them put the Phils away and I suspect most everyone else did too.

I send emails like that a lot. I might send a half a dozen or more every day.

I get even more emails like that. Sometimes dozens a day.

And I'd like to propose some email intro etiquette which I follow almost religiously myself:

When introducing two people who don't know each other, ask each of them to opt-in to the introduction before making it.

Last night I got talking about this with some friends who also get a lot of email intros. All of us get email intros that we don't want to follow up on. Some just ignore them. Others reply with something like "I'm really busy now and will get back to you in a month." And then never do.

I don't really like either of those two solutions and I also don't like responding to an introduction email with something like "I'm sorry but I don't really want to meet you".

So I often take meetings in these situations that I don't really want to take. And that means I'm less available to meet with people I do want to meet.

My friends said that I should simply keep track of who is giving me bad intros and let them know about it. I'm sure that I should be doing that and probably am at some level.

But I think asking for permission to make an email intro before making it is good form. I try to do it as a matter of practice. And I wish more people would.

But there are a number of ways that firms can execute their focus on a particular area. Two of the most popular are "thematic investing" and "thesis driven investing".

They are very different.

Thematic investing involves identifying big themes and going after them. Examples from the world of web services would be "social networking", "online video", "ad networks", "social media", "real time", "mobile". I know many VCs who go about it this way. They identify the themes and then get busy filling out their portfolio with companies that fit those themes.

Thesis driven investing involves drawing a picture of where your particular area of focus is going. I like to take a five to ten year view. And once you have mapped out that picture, it becomes your thesis. And you evaluate every investment you make in the context of that thesis.

The two venture firms I've been involved in founding are good examples of these two approaches. Flatiron Partners was largely a thematic oriented firm. We identified the web as a big theme and within it we identified content, commerce, and community. And we made big bets in those themes. It worked out pretty well but we didn't see the web changing at the end of the decade as much as we should have.

Union Square Ventures is a thesis driven firm. I owe that to my founding partner, Brad Burnham, who has the discipline to force everyone to do the work to develop our thesis and the discipline to make sure we put each and every investment through the thesis test.

Just last week, we were meeting with one of our LPs and I was talking about the mobile web in that meeting. Later that afternoon, Brad walked into my office and put our thesis on web vs mobile web on the table and we made sure we were seeing the mobile sector play out the same way. An important factor in thesis driven investing is everyone in the firm needs to buy into the thesis or it won't work.

Thematic investing is good for bigger firms. It allows each partner to pick a couple themes and go after them. Thesis driven investing is good for smaller firms. It requires a tight team that works to keep themselves on the same page executing after a singular vision.

I believe thesis driven investing produces the best returns when the thesis is directionally correct and probably also the worst returns when the thesis is wrong. I believe thematic investing works less well because it can lead to "bucket filling" where the firm just runs around filling the themes with deals without much thought to why and how they will work. It also leads to a lot of "me too" investing which is a scourge that the venture industry can't seem to figure out how to rid itself of.

But both thematic investing and thesis driven investing are better than a generalist approach because they both promote domain expertise which is critical to building a sustainable investment advantage. I think "generalist" or "opportunistic" investing is likely to underperform domain expert driven investing in all but the most turbulent markets.

It would be good to talk more about how one goes about building a five to ten year map of where an industry is headed. That's a longer conversation than I have time for this morning. But I'll leave you with the thought that this blog is a part of how I build mine.

Here's our three year history:

It is interesting to me that the total amount raised by this community has been relatively constant over the past three years but this year we really took up the level of participation.

That may be a result of the meetup I am doing this coming week on wednesday evening. The deal is anyone who gave to the donors choose campaign via my giving page is invited, irrespective of the size of the donation.

There are 115 people rsvp'd for the meetup which is almost equal to the increase in donors this year over last year. That tells me that the meetup strategy worked. I am looking forward to meeting all of you on wednesday evening.

I'd also like to point out that donors choose raised a total of $630,938 in the blogger/social media challenge. That number includes the $200,000 match from HP. Even without the match, Donors Choose was able to increase the giving from $270,000 to $430,000. Some of the big new categories were Twitter, led by Livia Stone's $18,422 and Craig Newmark's page which tallied $12,091.

But nobody can touch Sarah Bunting's Tomato Nation, which has dominated this whole campaign the past three years. This year, the Tomato Nation community pulled in $314,158. I believe Sarah will be at the meetup on wednesday. I'm dying to meet her as she has proven that blog communities can do amazing things.

In conclusion, I want to thank everyone for putting up with my non stop promoting of the donors choose bloggers challenge this month, and I especially want to thank everyone who contributed. It's a great cause and I'll bet that many of you will make additional donations when you see how amazing the follow up/thank you process is. Donors Choose is a fantastic public service and I'm really proud to be involved with it.

I'm familiar with the slow food movement and I would say that our family, led by the Gotham Gal, are active participants in it. I'm less familiar with the broader slow movement. This quote from Guttorm Fløistad via Wikipedia explains:

The only thing for certain is that everything changes. The rate of change increases. If you want to hang on you better speed up. That is the message of today. It could however be useful to remind everyone that our basic needs never change. The need to be seen and appreciated! It is the need to belong. The need for nearness and care, and for a little love! This is given only through slowness in human relations. In order to master changes, we have to recover slowness, reflection and togetherness. There we will find real renewal.

There are now sub-movements like slow travel, slow parenting, slow art, slow sex, etc. All of them promote the idea that we should slow down, relax, and take our time at things instead of "getting it done and moving on".

I'm not much for any orthodoxy but I do appreciate the sentiment behind the slow movement and I've been thinking all week about what "slow capital" would be. And of course, I believe that Union Square Ventures practices slow capital. Here are some basic tenets of slow capital:

1) doesn't rush to conclusions and doesn't expect entrepreneurs to do so either

2) flows into a company based on the company's needs, not the investor's needs

3) starts small and grows with the company as it grows

4) has no set timetable for getting liquid: slow capital is patient capital

5) takes the time to understand the company and the people who make it up

I've spent almost twenty five years in the capital markets watching investors behave. Way too often it is a "wham bam" experience and then off to the next deal. Things like exploding offers, "fly by" board members, and shotgun marriages are so common that you sometimes wonder how anyone makes any money.

There's a reason why Warren Buffet is the best investor of his generation. He practices slow capital and I am proud to say that our firm does as well.

I agree that visionary young people are worth backing and we do a lot of that at Union Square Ventures.

But there is another kind of entrepreneur I love backing even more. It's the serial entrepreneur who has had a number of successes under their belt and now wants to swing for the fences. We have a bunch of them in our portfolio and there is nothing more fun than watching someone who has a ton of experience get behind the wheel and really step on the gas.

When someone has two or three startups under their belt, they understand a bunch of things that a first time entrepreneur doesn't. They understand the value of setting a very clear vision and getting everyone on that page. They understand that they need to hire the very best people. They understand how to raise capital and pick their investors carefully. They understand how to make quick decisions and not let issues fester. They have a rolodex of talented people and potential business partners they can get on the phone or email quickly when they need them. Most of all, they ooze confidence and make everyone better around them.

These entrepreneurs usually have enough money in the bank that they are not looking for a payday. They don't build their companies to flip. They build their companies to go all the way. They are doing it for money, but they are also doing it for the thrill of the game, for ego, and to build a legacy. Those are very powerful motivators, much more powerful than money if you ask me.

If you look at our portfolio, you'll see quite a few startups created by young visionaries and quite a few startups created by serial entrepreneurs who are swinging for the fences. There isn't much else to be honest.

We are open to all kinds of entrepreneurs and we don't screen for age or track record. If you have built a web service that fits into our investment thesis, you'll get a hearing at our firm regardless of who you are and what you have done. But it is also true that we tend to back young visionary founders and successful serial entrepreneurs most of the time. That's because we've made a lot of money doing those two things and not so much doing anything else.

When I checked in this morning at Pastis, I added a shout that said "getting a demo of a hot new web music service". The CEO of Targetspot, Eyal Goldwerger, saw that on his phone and jumped in a subway to come down and see the demo too. Sadly, we had left by the time he got there.

But both anecdotes are examples of why foursquare has such potential. It seems like such a simple and whimsical service. You just checkin to places via your phone. But the data that it creates and the way it is published out to your social graph is powerful. I expect we'll see a lot more of this sort of thing as the user base on foursquare hits six figures and hopefully seven figures in the coming months.

Disclosure: Foursquare is a Union Square Ventures portfolio company.

And so I am very pleased to see that our portfolio company Adaptive Blue has announced the introduction of a very useful web service to supplement it's Glue plugin. The Glue plugin recognizes all sorts of web sites and catalogs the users visits to them.

I've been using the Glue plugin for several years. Glue automatically recognizes books, movies, music, artists, stars, stocks, restaurants and wine on hundreds of popular sites around the web. Glue works on Amazon, Netflix, Last.fm, Rhapsody, IMDB, Citysearch, Wine.com just to name a few. Here is a full list of Glue supported sites.

Now all of that activity is captured for each user and displayed via a public profile. Here is mine.

Each Glue user has a profile in the web service. Each item (book, movie, music, etc) has a page in the Glue service. So Glue is building a social network of people and items and showing connections between them.

And it is making connections and recommendations between items and people based on all of the data it has collected over the past couple years (and will continue to collect).

Here's an example. There's a BBQ restaurant near our office in NYC called Hill Country. Here is the Hill Country page on Glue. On that page, you can see the Glue users who like Hill Country, you can see what they say about it, and you can see similar barbeque joints, including my favorite in NYC, Fette Sau, in Williamsburg, Brooklyn.

There are a few other additions that I think are noteworthy. Glue now has a "game like" element in which you can collect stickers and become the Guru of a particular item in the service. As we've seen with foursquare, such gamelike features can really enhance the engagement levels of a web service.

The recommendations are delivered via a stream so they are "light and easy" to consume. The Glue service uses streams throughout to give the application a "live" feel. Here is the live feed of all user interactions.

Glue is about using the power of implicit behavior (web surfing) combined with occasional explicit behavior (likes and short comments about the items) and semantic analysis to develop a rich data set to power recommendations across many web services.

Give it a try and let me know what you think. You can download the extension here to get started.

I like the way it came out so I figured I'd reblog it here.

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Fred Wilson, managing partner of two venture capital firms and well known "VC blogger" at AVC.com, discusses the relationship between entrepreneurship and blogging, and what's next for blog-based businesses and the web. 

You’re one of the best know “VC bloggers.” What originally motivated you to get involved in blogging, and how has it influenced your life and career?

I got into blogging because it was a new internet technology back in the early part of this decade and I wanted to understand it better. As I got into it, I realized it could help our business a lot by building a direct channel to entrepreneurs. It has allowed us to build a reputation as one of the best web-focused early stage venture firms.

What’s your take on and advice to VC-backed entrepreneurs who publish blogs?

It's not easy for an entrepreneur to find the time to blog. But for those who do it, it is a great tool to communicate with the various stakeholders in their business and build a reputation for thought leadership.

Blog-based businesses and blog networks have seen a lot of activity over the last few years in terms of investment and acquisitions. Given the economic downturn, what does the future look like for blogs-as-businesses?

I think it’s better than ever. Blog-based businesses have lower cost structures and are more "authentic" and as a result are drawing larger shares of ad budgets.

You’re a passionate early adopter and experimenter with web applications in general and widgets on your blog in particular. What’s turning you on these days?

Mobile apps and new commerce models. 

What’s your advice for aspiring professional bloggers?

Show up every day with something interesting to say and don't be afraid to speak your mind.

I am excited to announce that we've got a match to play around with in the Donors Choose Bloggers Challenge. It is from HP and it works like this:

HP has committed to contribute a total of $200,000 pro-rata to all of the campaigns in the challenge.

This community has contributed about 7% of the total raised to date, so we are on track to get a match of $14,000.

Everyone who contributes (or has contributed) via my giving page will get a Donors Choose gift card to spend that $14,000.

The allocation of the $200,000 will be made on Sunday night so the more we raise between now and then, the more of the $200,000 we'll get to allocate.

I just made another donation (my third) to get us above $14,000. If you haven't given yet, please think about doing it today. If we get to my goal of $20,000, we'll actually get to $34,000, and that is 1.7 to 1 leverage on your gift.

Click here to contribute to the Donors Choose Bloggers Challenge.

One of the arguments from the telcos is that Net Neutrality will hamper investment in the infrastructure. I agree that is a risk. But if the FCC does not set the ground rules and insure open access to the infrastructure for everyone, that will hamper investment in what runs on top of the infrastructure.

That is why I signed my name to this letter earlier this week along with many other leading VCs and entrepreneurs:

Dear Chairman Genachowski:

We write to express our support for the Commission’s ongoing efforts to adopt rules to safeguard the open Internet.  As business investors in technology companies, we have first-hand experience with the importance of a guaranteeing an open market for new applications and services on the Internet.  Clear rules to protect and promote innovation at the edges of the Internet will reinforce the core principles that led to its extraordinary social and economic benefits.  Open markets for Internet content will drive investment, entrepreneurship and innovation.  For these reasons, Net Neutrality policy is pro-investment, pro-competition, and pro-consumer.  

Permitting network operators to close network platforms or control the applications market by favoring certain kinds of content would endanger innovation and investment in an investment sector which represents many billions of dollars in economic activity.  The Commission is absolutely correct to propose clear rules that require competition.  The promise of permanently securing an open Internet will deliver consumers and innovators a perfect free market that drives investment, job creation, and consumer welfare.  These principles should apply across all Internet access networks, wired or wireless.

Investment and innovation at the edge of the network will create not just jobs but also new tools and opportunities for communication, education, health care, business, and every other human endeavor.

We look forward to working with you in developing clear rules to protect the open Internet, and in building together a framework to secure its future and promote its continued growth.

We have a winner of that contest and in the spirit of closure, here it is. We will return to our regularly scheduled programming after this.

Same with a new web service. This morning I read about DailyBooth getting funding from Sequoia, Betaworks, and an excellent group of angel investors. I'd heard about DailyBooth before. It was a Y Combinator company this past summer and some of my colleagues at Union Square Ventures had seen their pitch at demo day. My partner Albert had mentioned it to me as a company that was relevant to many of our portfolio companies.

So, I decided I needed to wrap my head around what DailyBooth is doing. And the only way I know how to do that is to use the service. Here is my DailyBooth timeline. You'll be familiar with most of those images if you follow me on Tumblr.

It took me all of fifteen minutes to set up an account, follow a few people (including Gary Vee), and post a few photos myself. I can't say that I am an expert in what they are up to, but I sure have a good feel for the service, what it is all about, and why it works. And I can't get that from reading a blog post. I have to actually use it.

That is why our firm rarely invests in a company pre-launch. We've done it a few times with successful serial entrepreneurs we know very well. But it is not a comfortable thing for us to do and we won't do it with a team we don't know well. We need to touch and feel a service to get our heads around it, understand who uses it, why they use it, what the value proposition is, and what the potential is.

I get emails all the time that are ten paragraphs or more, and include a twenty page attachment. I do my best to read them and give a good response to them. But honestly, a one paragraph email explaining who you are, why you are writing, and a link to you web service is a whole lot better. If I am going to spend fifteen minutes on your business, I'd much rather it be fifteen minutes using your product than reading about it.

I am not particularly concerned about whether these web services are deployed in a browser or in an app running on a mobile device. I realize that these are big issues for developers and that the mobile web suffers from too many browsers, too many operating systems, and too many device configurations and screen sizes.

But the power of the web in your pocket is so large that none of this really matters at the end of the day. The "mobile web" is where "it" is at right now. And it is also where it is all going.

And this past week was a big one for the mobile web. We got three big things we've needed badly:

1) A real competitor to the iPhone - the Droid

2) A scalable business model for mobile apps - in app transactions in free apps

3) A standard for broadcasting video (and audio) to mobile devices

Here's why I think these are all big deals.

First and foremost, we need competition in the mobile web market. If Apple were to own the mobile web opportunity that would be very bad for developers, for consumers, and for innovation broadly. Nothing against Apple, it would be true with any company. Android is the best hope for a strong competitor to Apple. In fact, as I've written here before, Android is a lot like Microsoft's Windows OS. It was a copy of Apple's operating system in many ways, but it was open and it could run on many devices. And it became the standard with Apple retaining a small but important share. I believe the same thing will happen with Android and the Motorola/Verizon Droid looks to be the first really great Android phone to come to market. And I love this ad for it.

In addition to competition in the mobile web market, we need a scalable business model for mobile web apps. Display advertising is not likely to be that answer. In app transactions seems like a good one. It has worked very well in social gaming and is starting to show up in other web apps. But it is even more powerful on mobile devices where the user already has a transactional relationship with one or more providers of the device. Apple has decided to allow in app transactions on free iPhone apps, something they have been reluctant to do until now. This is a big deal. I think this could be an "order of magnitude" kind of inflection point for monetizing mobile apps.

We also need a way to offload bandwidth sucking applications from the carrier's networks. The AT&T network has suffered as iPhone users have adopted rich media on their devices. The same could happen to Verizon if the Droid is as popular as I think it can be. But there are ways to offload much of the high bandwidth services. Instead of watching the Yankees game via the AT&T or Verizon network, you can watch it over the digital TV broadcast spectrum using the ATSC standard that will ultimately find its way onto mobile devices. We've already seen this happen with the digital audio broadcast standard, HD Radio, that is now on Microsoft's Zune and will soon be on all kinds of mobile devices. Last week, I started listening to last.fm radio on the Zune via the the 102.7 hd2 channel here in NYC. There is a lot of one way spectrum out there that is now digital and can be used to push high bandwidth content onto mobile devices. I expect we'll see mobile device manufacturers and carriers work to leverage that spectrum to free up their networks for more interactive uses.

As important as these three developments are, I suspect we'll see like weeks like this past week a lot in the coming years. The mobile web sector is developing quickly and innovation is happening all over the place. It is very exciting to see.

But MongoDB is worth talking about. As 10gen's marketing says, MongoDB contains "The best features of document databases, key/values stores, and RDBMSes in one".

MongoDB was built by some of the former engineers who scaled Doubleclick to be the largest ad server in the world. In the process they found out that traditional relational databases presented some hard scaling challenges and the experience left them asking if there was a better way. MongoDB is their "better way".

And now MongoDB is available as a hosted web service. So if you want to play around a bit with MongoDB and see if it's a good choice for you next web project, just go to MongoHQ and request a beta invite.

If you do that, I'd love to hear what you think. Either in the comments or via email if you prefer.

But I think we are witnessing something more profound. As big swaths of the world modernize and gain large populations who have the time and the means to enjoy films, we will see more and better films come from outside of the US. We are already seeing it.

What that means is we'll need a better way to do subtitles. And we need to look no further than wikipedia and the world of open source to see the future of subtitles.

Last night, The Gotham Gal and I decided we wanted to have a quiet night at home. She made dinner and I downloaded Män som hatar kvinnor (The Girl With The Dragon Tattoo). The Gotham Gal had read the book by Steig Larsson and had really enjoyed it along with The Girl Who Played With Fire. A commenter on her blog let her know they had made a film in Sweden out of the dragon tattoo book and she asked me to set it up on Boxee. So that's what I did.

The film is in swedish and the download I got did not have english subtitles. But fortunately Boxee supports Open Subtitles. If you are streaming or watching a downloaded video in Boxee, you can simply ask for subtitles and Boxee goes out and fetches them from opensubtitles.org.

You can also do this with the VLC player. When you load a file into VLC, you can check the box to load a subtitle file. You can get the subtitle file (a .srt file) from opensubtitles.org or a number of other subtitle services on the internet. Sometimes you need to play around with the delay parameter to get the syncing right, but it works well.

The larger point I am making here is that by open sourcing subtitles, we are making it easier to watch films and other forms of video that are made in other languages. People in Israel can watch TV shows and films made in the US in hebrew subtitles. People in the US can watch TV shows and films made in India in english subtitles. The possibilities go on and on. We don't need to wait for the producers of the films to release them in foreign languages (if they ever choose to do so). We can simply get the footage we want to watch and find a subtitle for it on the Internet.

The open subtitle market today is focused on popular films and TV shows, but there is no reason why it won't eventually grow to support everything from last night's Jon Stewart show to a viral video on YouTube. As the tools get easier to create .srt files and the various video players start to support them, the possibilities are endless. And the world will get just a little bit smaller as a result.

I've also seen "startup fundraising agents" out there that charge entrepreneurs upfront cash to make intros to potential investors. They should also be avoided. A basic rule of thumb for fundraising agents is that they must work on a success fee basis or you should not use them. Otherwise, they have no incentive to see you actually get funded.

Both the agent groups and startup agents that want to charge upfront cash make the argument that it is a quality filter. But that is nonsense. Some of the best startups I've ever seen were totally broke and living and working in a friend's apartment. And some of the worst were well off and working in fancy offices. The ability of a startup to pay has absolutely nothing with the quality of the team and the idea.

Like any other sector, the startup sector has its share of scams and scam artists. I think it is great that Jason is outing them.

I heard something this past week that stuck with me all the way to the weekend. To the life of me, I can't remember who said it but at least I remember what was said:

The three current big megatrends in the web/tech sector are mobile, social, and real-time.

I like to think of this as the golden triangle. You can build interesting businesses in each of these three sectors. The iPhone is the poster child of mobile. Facebook is the poster child of social. Twitter is the poster child of real-time.

But it is what happens inside the golden triangle that is really interesting to me. What if you build a service that is mobile, social, and real-time? Well that's a big opportunity folks and I've been seeing quite a few entrepreneurs doing exactly that. It is an exciting time.

I was reminded of that yesterday when Paul Forster, the CEO of Indeed, said this at our portfolio summit yesterday:

We tried charging for our API without much success.  Then we paid developers to use it and it took off.

It is such an interesting move to make on the market. In the case of TACODA, they initially built a powerful behavioral targeting solution for publishers to segment their audiences and sell them to advertisers. They sold the technology to about twenty large online publishers. But the sales cycles were long and the license fees were smaller than they needed them to be.

So TACODA built an ad sales force and said to publishers, give us your inventory and we'll send you back money. That was a much easier sell all around and the business took off.

In the case of Indeed, they initially offered online publishers the ability to pay for a real time search API of online jobs. Not many took them up on that offer. But when they injected their sponsored jobs into the API and offered to share the revenue with publishers, the demand was huge.

Not every company that has an API can do this jujutsu move on the market, but many can and should. It makes life much easier.

If you want to join us, click here.

I'm not sure what is wrong but something sure is. I'm going to make another $100 donation this morning and I hope you will all take a few minutes to do the same.

Here are a few reasons why you should consider it:

1) You can use PayPal and do the whole thing in less than one minute from clicking this link.

2) If you've never contributed to Donors Choose, you should give it a try because the experience is so awesome, especially the thank yous you get. Click this link and see what I mean.

3) This is one of the ways I get "paid" for showing up here every day and sharing my thoughts and experiences. I don't think the quality has gone down by 6x this year.

4) Everyone who contributes gets an invite to a meetup I am doing in NYC in November. Given the number of contributors so far (ten not including me), it will be an intimate affair. Click on this link if you want to come to that.

I'm done begging and cajoling. Let's see if this changes anything.

Fred Wilson At Clickable's Interesting Cafe: What Makes The NYC Startup Sector So Great? from Max Kalehoff on Vimeo.

Our portfolio company Zynga's Farmville game is the most popular social game online ever with almost 20mm people playing the game every day. On Friday Zynga released a new kind of seed into the game called "Sweet Seeds for Haiti". Since Friday, they have sold about 100,000 of these seeds which cost 25 FV cash.

Here is how the offer is described in the game:

Salutations, y’all! Today, FarmVille is proud to release “Sweet Seeds for Haiti”. In this event, y’all will be able to purchase Sweet Potatoes that NEVER WITHER, yield XP and 125 COINS PER HARVEST! Even better than that is the fact that 50% of the proceeds will go to helpin’ children in Haiti. What could be sweeter than lending a helping hand to children in need? You’ll also get a SPECIAL GIFT with your purchase so hurry on over to FarmVille and check it out!

And here are the details about where the money is going in Haiti:

Haiti is the poorest country in the Western Hemisphere and the 7th poorest in the world. Zynga’s mission of connecting the world through games is enhanced by our opportunity to support the health and education of these children and their families. For additional information on the recipient organizations, please see www.FATEM.org and www.FONKOZE.org.

FATEM is a non-profit organization based in Mirebalais, Haiti, and originally organized to bring information technology to the people in the region, thus helping with the economic advancement of the area. More recently, however, FATEM recognized the need for a sustainable means by which to support the general education of Haitian children and to ensure that these children have the necessary meals that will permit their young bodies and brains to learn and grow.

FONKOZE, based in Port-au-Prince, is an alternative bank for the poor. It is Haiti’s largest micro-finance institution and is committed to the economic and social improvement of the people and communities of Haiti and to the reduction of poverty in the country.

It's a bit tricky to estimate how much money the Sweet Seeds For Haiti has raised to date because you can earn FV cash and you can buy FV cash. When purchased, 25 FV cash costs $5. So if everyone bought the FV cash that has been used to buy the roughly 100k of sweet seeds to date, then $500k will have been raised, $250k of it going to charitable organizations in Haiti.

Even though that is best case, it's a pretty big number for three days. The key to this is that the seeds have value in the game and are tied into the game play and game mechanic. So not only are players doing something good when they buy sweet seeds, they are also advancing their own interests in the game.

I can imagine this approach being adopted across a multitude of online social games. It's an exciting development and an area to keep an eye on.

The owners and operators of these businesses have been trained to think their strengths are local and relevant content, their monopolies or near monopolies on distribution (spectrum in the case of radio and TV), and their brands. All of these assets are waning quickly.

But there is one asset that is still quite significant and the value of it is growing, not shrinking. It is their large, well trained, and well connected salesforces.

I was reminded of this fact when I read Claire Cain Miller's piece on Curbed and the Village Voice today. Before I go on I should disclose that The Gotham Gal and I are small investors in Curbed and The Gotham Gal is what I like to call a "hands on investor" in the company.

As Claire explains in her piece:

The Village Voice .... has built this sales force over five decades as a weekly newspaper. So it is acting as a local ad network for Curbed, Mr. Steele said, selling local businesses ads for its Web site as well as the Curbed blogs and then sharing revenue. In return, it gets to offer Curbed’s articles and readers, in addition to its own, to lure advertisers.

This story is playing out all around local media these days.

We have an investment in the leading online audio ad network, Targetspot. Targetspot has online audio advertising inventory from many of the largest radio station groups, as well as audio inventory from "pure play internet" services like AOL, Yahoo, Live365, Slacker, and several more that have not yet been announced. Advertisers don't buy the individual stations or services, they buy the network, either on a national, spot, or local basis.

When the network is "sliced" along a local dimension, like "all online audio listeners in New York City" that inventory is valuable to a local advertiser. And Targetspot's radio station partners who have salesforces in New York City can make good money selling the local network buy. And increasingly they are interested in doing just that.

But it doesn't stop at CPM buys like banners and audio ads. The same thing is happening in search and leads. Our portfolio company Clickable has a service called Platform that local media companies use to resell search and leads that come from search ads to their local advertisers.

This makes all the sense in the world. The media business, either on the national or local level, is losing its grip on audiences as they fragment and disperse all over the digital realm (including of course mobile). But they do not need to lose their grip on the relationships they have built up with local merchants since the days of Mad Men. What they need to do, and what they are increasingly doing, is reselling the inventory of others to their customers. As Claire points out in the NY Times piece on Curbed and The Village Voice, it is a win win for everyone, including the local merchants and their customers and potential customers.