false precision

CES 2012 Recap

2012-01-11T10:52:59-07:00

I try to go to CES about every other year if I can. Consumer electronics, and actually consumer behavior in general drives the US economy. The reason internet advertising is so huge in the US and quite nascent in other companies is for just this reason.

I love 'stuff' and specially electronics. I'm not quite the early adopter (that's adopter, not adaptor like I hear people say all the time) because as I've become older I really value stuff to just work all the time. I have a lot less patience with stuff that works sometimes, or most of the time.

Supporting the Home Team, The machines are taking over

One of the reasons I wanted to go to CES this year was that Orbotix was exhibiting their robot ball. They had two booths at the show that were always packed with ball drivers. Right before the show they launched a few more apps for Sphero.

Paul did a great job of rejiggering their location on the floor and by my count the show is going to do very well for them. I visited the AR Drone booth as well and they seemed to be having similar success. Each year there are more robots, often rip offs of last year's most innovative robots. I think I saw 5 different Roomba vacuum type rip offs this year. International shows like this are interesting because with the exception of TV's, cool stuff gets invented in the US and then, 're-invented' elsewhere in the world.

The TV Update

The fun part about going to CES with some regularity is you track the trends. For instance when I was there two years ago all mainstream TV's were backlit LCD and the new thing was LED.

One company as I recall was showing an OLED prototype but that was the state of affairs. Now LED is general place and OLED is getting closer. Next year is probably the mainstream OLED year. Interestingly however I think the major players (Samsung, LG, Panasonic, Sony) are now concentrating more on the electronics again than the screen. I think screen size and quality are just about played out.

Interesting demos I saw were the coming screens that are employing up scaling to take 1080i signals to 4K or 8K. This is probably out of necessity as all the major guys are showing 60, 70, and 80 screens as the norm now. 1080i starts to look a little jinky above 70 inches so I suppose that's driving the research. I was quite impressed with a side-by-side demo at the Sharp booth of 1080i and 4K.. The picture was much clearer, which kind of surprised me as there isn't more data in the signal.

3D is where the innovation is

Another major difference was the much more widespread 3D adoption. I considered upgrading my main screen this year (a 60 inch Plasma) but im glad I didn't. 3D really requires a much larger screen to be really cool and I probably would have done something in the 65 inch range before watching a lot of TV's at CES. As a result I would now be tempted to look at 70 inch screens or perhaps wait a year of two for 75 or 80. Sounds big, but the image looks much smaller in 3D. This combined with up scaling says wait another year to me.

Another thing I noticed at one of the booths (Samsung I think) was a demo comparing 3D images at different screen refresh rates. In previous years the side-by-side demos of refresh rate frankly weren't that compellingly different, but clearly with 3D it makes a much larger difference. I think it's because each eye is only seeing half the refresh rate and time difference between those frames jacks with your brain and the image quality. Probably NOT the year to go 3D until everyone is turning out fast images.

Sony was showing technology that computes harder on foreground images in 3D. Seems cool but probably just a stopgap as processor speeds increase and they just do that for entire image.

If your waiting for 3D with no glasses, it going to be a while

Saw a few demos of 'no glasses' 3D. The paint is pretty wet on that technology and frankly may never really get there. It will probably work well in 5 years on laptops but not sure how it's going to scale into multi-viewer situations. The problem is that screen has 'see' the viewer and modify the image based on the location of the viewer. Not sure how that works with multiple viewers. In any case don't wait for that to get perfected; it's going to be a long time.

Headphones are where it's at

If you own a brand that in any way is now or has ever been associated with sound, you are now big in the headphone market. Bob Marley was dancing around his booth wearing giant headphones, Marshall the iconic Amp guys, have line of headphones. The older guys like Sennheiser and Audio Technica, everyone has huge headphones. What surprised me is how bad most of them sound. The current trend (which I predicted over a year ago) is for huge headphones. Pretty sure it all spun up when Beats by Dr Dre came on the scene. I'm a fan of larger headphones as all ear buds universally suck for sound quality. Most I tried sounded really poor and I have to conclude based on reasonable experimentation that the headphone thing is currently 100% marketing rather than technology. For my ears the Audio-Technica stuff sounded the best.

If you are worried about you product line, add iphone cases

Humorously it seems every company, with a brand or not, in the entertainment space or not, serving the mobile market or not, has added a line of iphone cases. Can't believe Starbucks doesn't have any. They must literally be the only at business at CES that didn't have a line of iphone cases.

Love the Asian manufacturing companies

There is always a floor at the show that is inhabited by the Asian manufacturing companies that frankly are building the stuff for everyone else anyway. What I love about them is the way they market. If Steve Jobs is the most successful technology marketer in the world, the Asians as a group are the worst. I took this photo because it just made me laugh.

The company's product is "Smart TV Box". I'm sure they debated to even include 'Smart' in the name. I love these companies, they products are simply horrible. They always have 10 times the features of the products they copied but have literally no positive ergonomics. It's very interesting.

Here is a monster cable rip off at one of these booths. I can't fault them for their strategy. Americans like their soft drinks large and their cables larger. I picked up this little beauty as I'm sure it will make my surround sound system sound thumpin!

On the same theme it is staggering over the years how the real Monster Cable booth has grown larger and larger – seemingly to Monstrous proportions. No idea how that company does but my guess based on booth size is they have figured out how to convince people that the digital signal 'they transfer' between your components sound and look better than the exact same ones-and-zeros that radio shack transfers.

And yes, they have a line of headphones J

Become or embrace your inner Nerd

2011-12-08T11:02:23-07:00

I read a good article yesterday called The Rise of Developeronomics. It brought together two concepts that I have thinking about for a long time. The first is the incredible marketability of software developers and the second the encroaching job crisis that many people are faced with.

I started my real career as a software engineer. I really enjoy writing software although I do very little of any longer. I was really in my zone back in the late ninety’s when the entire Internet world was on fire. Around 1996 or so I realized just how in-demand software developers were so I picked my bets carefully, meaning startups and founders, and essentially stopped worrying if I would have a job next week. Even in the dark days of the Internet nuclear winter the fact is I could always get a job, could probably get that job in about 10 minutes, and ironically would probably be making more money not less. It might not be the job I wanted, but I could – get a job – if things went bad. Really the only risk was that I may work someplace that didn’t have upside potential, meaning I may risk only working for the salary. Literally, for me to be happy I have to have plausible belief I am working toward a total homerun – or im out. That does not mean job hopping – it means picking my bets and seeing them through.

If you juxtapose that thought process with the news every single night (yes I get my news old-school from the NBC nightly news), I’m astounded how so many people are seemingly out of work and giving up on finding work. Of course, we all know these people are in a different position. They worked hard, and were loyal employees and probably did concern themselves with selecting the safe jobs. But, while they were doing that, the world made a slow and insidious shift out from under them like a slow moving glacier. The world of software and technology slowly ate their existence. We were all told it would happen very fast, starting with robots first eating our medications, but in reality it took about 20 years. The fact is, if you are waiting for middle-management and clerical jobs to come back, they are not coming back. If you are selling cars on a lot or books in a story, they are not coming back. They were replaced with Amazon.com, Saleforce.com, personal computers, iphones and ubiquitous broadband connections.

The two worlds of technology enabled and not technology enabled are not colliding, in fact they are moving apart from each other at an accelerated pace. I do not believe that government polity will help. Stimulus will not help because jobs that will be created will be for the technology enabled. If you are not that person, you simply can not stand on the sides lines and proclaim you are not that person. You will for all intents and purposes financially perish. You must go educate yourself in something.

If you are now a software developer or a technology-enabled person, my advice is NOT to hand wring about your career stability. I honestly feel you have nothing to worry about IF you can handle being out of work and uncomfortable for a few weeks here and there. YOU are the ones that will be making jobs for everyone that needs one.

Market Size and Velocity in Tech Startups

2011-12-06T12:41:30-07:00

I was talking to a friend the other day that was contemplating doing a startup. He is a tech guy and tech guys tend to come at company building from a specific technology innovation and then look for a problem (market and product) to solve with it. It's not right or wrong but has its own challenges.

I was replaying my experience with Lijit and the old startup adage "Market Size fixes all problems". I had never really considered in great detail what that statement meant or all ramifications. The simple concept is if there is a huge market, you don't need to own a huge part of it to make a good size company. The Lijit experience however has given me new clarity around some of the dynamics of market size and tech company formation.

Lijit is in the AdTech space. AdTech has been a heavily funded sector by VC's in the last 5 years. This is due to two major things. First, online advertising is a huge macro market in the US, over $34 billion will be spent in 2012 trying to reach consumers online. Secondly, there is a huge discrepancy of advertising spend verses consumer time spent on the Internet.

Put another way, people are spending more time online but advertising dollars have not proportionally moved to online (yet). Hence this has created a huge opportunity for tech company's to facilitate advertising on the web. Not only is the market already huge, there is a forcing function of cash (like water pressure in a hose) that makes everyone complicit in spending advertising money as fast as possible and in ever increasing amounts. I have heard this referred to as "product pull" as well – meaning people want to buy, you don't need to convince them.

Interestingly however, there is a second dynamic of a frothy market that makes tech companies easier to build in very strong markets. They don't have to be that Innovative. After observing different AdTech companies over the last 18 months, I would classify most as reasonably successful and exhibiting a revenue growth rates that are healthy if not explosive. But when you look under the covers the innovation they have produced in term of products and intellectual property is marginal at best. Most developed a little trick here of there but nothing on the scale of market moving.

I have a theory that the larger and hotter the market a tech company lives in the, less disruptive or innovative the actual product needs to be. By contrast, my friends that live in more conventional markets need to have extremely innovative products that are major market disruptors. By definition that's a lot harder to do. And when you do finally find that product, you of course then need to own a huge portion of your market to make the company successful. If the market is too small, you may even have to enter a new market to keep growing the company. That's probably the worst of all worlds in my opinion. You have to effectively build two companies.

But, the benefits of market size and velocity don't end there. Naturally it's easier to get a company in a hot market funded but it's also easier to keep the company funded. Any startup takes a bit of experimenting to get the equation correct. In hot markets investors are more likely to stay with the vision. In smaller slower markets investors get concerned much quicker about the likelihood of success. Part of Lijit's success was that the investors stayed onboard and part of that was due to market size and velocity.

My advice to most people I meet with is do something in a market you absolutely love because you are going to be there a while. It's equally important to pick a market that is on-fire, or about to be on-fire. You're still going on a marathon run, but at least the wind will be at your back.

Open Letter to TiVo

2011-11-30T20:26:12-07:00

Guys, I love you. I have loved your product since I got a Series 1 in 2000. We have been compadres for 11 years now. Your interface, now 11 years old, is still so much better than the brain dead stuff from the Cable guys that it is almost laughable.

Ahh, but many of you are saying – "TiVo is too expensive." Yes, I agree – but not for the reason you are about to drone in my ear. I'll get to that in a minute.

Forget about the economics of all this for a minute. Many people have commented over the years, "just get a Comcast DVR", "why aren't you using the Microsoft Crap Shifter"? "Boxee is awesome", and "Roku is amazing.." Yes, yes, I understand all that. Cable boxes suck, have no storage and are soul sucking. "But Comcast on-demand is awesome" – yes and has tons of crap I don't want to watch and none of the stuff I do want to watch. "Boxee is cool"… but gets no live content. "Roku is awesome !".. but can't play content off your own network. "MythTV is orgasmic!" – if you're a troll living in your mothers basement wearing your brothers skin. Save me all that bullshit. TiVo is awesome because it does it all. And for this they have suffered, as they are beholden to cable guys – who as we all know are terrorists.

TiVo, my issue isn't your solution, or your service, or the $12 a month, or the cable cards, etc.. My issue is the damn power supplies!

Starting in 2006 I weighed in heavy. I run 4 Tivo's in my house, two series 3's and two TiVo HD's.. I have another Series 3 "on the bench". Over the years I have found out the hard way that you guys have a major, major issue. YOUR POWER SUPPLIES FAIL ALL THE TIME !

As of today, I have replaced the power supplies in all my TiVo's at least once. The one in my basement 3 times! In the six years since "going all in" I have replaced 6 power supplies. At $100 a pop, well you do the math.

Thankfully it's easy enough to order them from WeaKnees and put them in yourself. I honestly don't know what your customers do that don't know how to or don't what the issue is.

Tonight I just finished the install of power supply number 6. Guys, really? I'm still in till there is a better solution but it can't be too far away (right?)…

I would like to thank my investment passengers

2011-10-05T14:00:40-06:00

By now, 24 hours later, the news is out that Lijit Networks has been acquired by Federated Media Publishing. The deal was an outstanding value for all involved (One of our investors quoted the press release)

This transaction is a great outcome for Lijit, its employees and shareholders. While the details of the transaction itself weren't released, this acquisition ranks among the most significant outcomes for the region in the past 10 years.

I'm super excited about what comes next. This is not an end but rather a waypoint toward building a huge media company that now has a major operation in Boulder Colorado. Investors in Lijit are now investors in Federated Media. I and the entire Lijit team will continue to build value toward a greater exit in the future.

A friend once told me the lifecycle of a venture backed startup company is like driving a bus.

You, as the bus driver (founder) get up in the morning before sunrise and go to the lot. You start your bus (company), which can be difficult as they don't always start (fail). Once you get the bus running (small team getting paid nothing) you go pickup your first few passengers (Angel Investors). By the time the bus starts to warm up and run a little better the sun is up (you have something to show) and you as the bus driver are feeling happy. You pick up a few more passengers (your intuitional investors). You drive for a while, sometimes getting lost but generally going the right way. Hopefully, you won't need to completely turn around, but you may need to avoid traffic problems (strategy and tactics). As the day goes on (the investment rounds go up), sometimes the passengers get tired and occasionally grouchy and want to go home (exit). The bus driver can also get a little grouchy. But, as these things go, everyone eventually decides they actually love the bus, it's all ok. Finally, almost magically, certainly unexpectedly - the bus arrives at the last stop (acquisition). It turns out the ride was shorter than you expected – maybe not. It turns, out someone really wants your bus. In fact, your bus is perfect for the people they need to take on another ride. You let some of your passengers off the bus, most stay on but now rather than going home – they want to ride longer.

I tell you this story because over the course of a long bus ride the fate of the ride is often unknown. Who you have on the bus is super important. I had some excellent passengers that I would be happy to drive around again. I want to take a minute to thank just some of my passengers by name.

Brad Feld

Brad was my very early anchor angel and friend that helped me get the idea put together in the first place. Brads style: "your overthinking that –just do it", helps a lot in the early days by sorting between decisions you actually have to make, and decisions you 'think' you have. Brad's simple term sheet approach is the way to do deals. Thanks my friend.

Friends and Coworkers from Raindance my previous company.

Between you guys, Brad and I we made up 100% of the first $500K of invested capital that got Lijit off the ground. I know a few times along the route, I wanted my $120K back, I suspect you felt the same once in a while. I understand the investments you made were investments in me and not any specific idea. You did not need to ride the bus and I won't forget that you got on anyway.

Jerome Contro, Chris Marks / High Country Ventures

Jerome invested High Country Ventures in Lijit very early on as an institutional investor in an Angel Round. That was not any easy thing to do but I was thrilled to have Jerome around the table. High Country Ventures has been super supportive of Lijit and I thank you for that. Chris became involved when Jerome went on to bigger and better things and immediately started adding value. Chris's easy going style and thoughtful comments are great to have around the board table.

Peter Roshko, Kyle Lefkoff / Boulder Ventures

Peter led the first true institutional round of investment in Lijit - effectively jumping into a swimming pool with an unknown amount of water. Through past several years Peter and BV supported the company through every bob and weave. Kyle for all intents and purposes invented venture capital in Colorado. In a world where regional funds come and go (mostly go), Kyle has built a Venture Firm that excels year after year. Boulder is lucky to have a strong hometown Venture Firm in Boulder Ventures.

Brad Feld, Chris Wand, Seth Levine / Foundry Group

After Foundry Group finished raising their first fund the entire team there immediately mobilized to help Lijit and really assumed the lead investor role for Lijit from that point on. I can't say enough good things about Foundry Group as they are a very different kind of VC. Seth was personally involved in our early Ad channel relationships essentially creating the opportunity that eventually set us up for success. Seth, like Brad earlier was a true member of the team and transcended the investor/management team designation (in a good way). Seth should have a Lijit business card.

Mark Solon / Highway 12 Ventures

I barely got to know Mark and the Highway 12 Ventures guys as we sold the company so quickly after the last round of financing that they led. Unfortunately for Boise, I believe we were the last new investment of their last fund. Although involved for a short time in Lijit I found Mark's interactions with me to be first class and thoughtful.

Thanks to everyone that got us where we are. Some coverage from the last 24 hours….

Startup - If your Competition is Google, here is your Trojan Horse

2011-08-02T15:55:47-06:00

I have been a talking a lot with CEO's lately about their companies, their market opportunity, and about their competition. The competition thing has come up a lot lately, specifically when the competition is Google or Yahoo or 'insert other large company here'.

In every case the analysis has been the same, especially with regard to service based internet businesses. Customer service wins, and it's not the dirty word you have been taught to believe.

Let me give you a few examples.

First, I'll use Lijit. Lijit is winning a landslide of business these days and we are killing it. We are doing this while competing with Google and other more established companies in AdTech. In each case a large part of why we win is simply because we care and will talk to our customers. Our publisher base uses Google AdSense in nearly every case to deliver some portion of advertising on their sites and revenue to their pockets. It would seem that Google will or should - 'kill us'.

Quite the opposite, I liken it to going to a restaurant but rather than a waiter or a person to order from at the counter, you are only able to send notes to the kitchen. The chef may respond, but probably won't. If you are confused, there will be no help. If your food is bad – or in fact never shows up – sorry. You might get your food – or not. The FACT is, the restaurant you just walked into is Google and they actually don't care if you eat. Statistically, they know a lot of people will eat but if you don't you're just collateral damage, an unfortunate side effect of delivering a "Web Scale Business". But, rest assured they will, do no evil.

We see it every single day. Google simply doesn't care about you Mister Publisher. In fact, they reportedly are paying around $400M for AdMeld who did talk to their customers. Through this acquisition they will, for a short period of time, be able to feign interest in them. Eventually, when the AdMeld culture is synergized, it will be back to - "No Soup For You".

Another example, I just read this article about SendGrid. A few months ago they could have had an oh-shit moment on their hands when Amazon released their simple Email Service. In contrast however, SendGrid took off. If you read the article CEO Jim Franklin says, "SendGrid has a service culture Amazon doesn't have". I recognize what that means. There's a person to talk to. I'm sure Amazon read that and said, "Idiots, that business will never scale".

The Web world was built on an engineering centric thesis that if you did a good job building your service you never had to actually interact with your customers. If you push on this thesis, Web Scale companies will say – we are building a very large business, we can't possibly talk to all our customers. Maybe - but Apple talks to their customers a lot. In fact, they built physical stores to make sure they do it in person. The conventional thinking when they opened the Apple Stores was they were crazy. I believe Apple will do just fine.

I feel like we are just starting to see the phase of the internet where companies are realizing that talking with a customer is actually an important part of the business process. It's not a liability on your business, it's an opportunity to transcend the economics that may or may not be in your favor.

There are a lot of customers that want to be treated like people out there, and especially for startups it's your secret weapon.

U2 – The Gold Standard of Stadium Shows

2011-05-23T13:39:41-06:00

Darby and I went to go see the U2 show on Saturday night. It was epic to say the least. The sound in our seats in the Club Level was perfect and as you can see from the photos, it was a total spectacle to watch.

I told Darby I thought it unlikely she will see a larger, more elaborate or better produced stadium show in her life. It takes so many things coming together, a band that appeals to a large enough group of people, an audience with enough disposable income to pay-the-price of the ticket, and tour producers that will take the risk.

I was expecting The Claw to be large as there are photos around the web of it – but once you get in the stadium you are blown away with the size of the structure.

Darby and I rode along with our neighbors Tom and Nichole. Tom had crazy good 3^rd row seats. We sat in the club level but frankly the show was probably awesome no matter where you sat.

The giant integrated screen above the stage always had the best view of what was going on and real testament to the quality of the production.

I shot some video with a Nikon 9100 point and shoot camera I just bought. I usually take video using the iPhone but you really need an optical zoom for a show like this. Here are a couple songs from the show.

Elevation

With or Without You

Totally Epic Concert, nothing more to say. U2 always brings it.

The Precious Came via FedEx Yesterday

2011-05-17T11:33:54-06:00

When I found out the last show of the Rush Time Machine Tour was at the Gorge in Washington State and everyone said The Gorge is a MUST SEE Venue, I knew it had to be! A quick stop off at StubHub and a significant lightening of the wallet later…

A nice bookend to the first stop on the tour I saw in Albuquerque almost exactly a year ago. I threw in the two RedRocks shows as well just to make sure I got complete coverage. And of course there was the 'stalking incident' at Frasca in Boulder between shows.

Admitting you have a problem is the first step.

I uploaded the opening video to Youtube during that first Albuquerque show and through the entire tour I have maintained the pole position for views at 94,034 as of now.

This show is the end, hopefully not for good, but at least for few years. When I met Geddy and Alex at Frasca they were very cool. I just thanked them for touring as im sure they don't need to do it.

As long as they keep doing it, I'll keep going!

Friends, Team Members and Employees

2011-05-16T16:25:31-06:00

Last week ended sucky.

A really strong friend, employee and team member at Lijit has decided to move on in her career and go to another company. I get it, she is young and needs to try new stuff and move up the ladder. She has been with Lijit for 3 years and when you're younger I think it's important to move around. Not a lot but deliberately a few times to see what you like in a company.

So I rolled into the weekend feeling like maybe we could have done something to keep her engaged. I tried to talk her back into the company (and continue to), but it didn't work.

So rolling into Saturday I was bummed out. I guess melancholy is a better word.

Then out of the blue on Saturday afternoon I got this email from friend that used to work with/for me a Raindance.

I haven't talked to this person in probably 5 years. It was perfect timing and it really made me happy that someone had that experience back at Raindance.

It's always a fine line with Friends, Team Members and Employees. Where does one start and the next pickup.

I wish my newest friend from Lijit good luck and wish my old friend good luck with his new company and product.

Accidental Art 3

2011-05-16T15:01:50-06:00

Last night at the Fillmore I used the excellent Occipital 360 Panorama to create this image of the The Cars show. The flattened image turned out really cool looking and consistent with my Accidental Art theme, here and here..

For those less interested in the art and more in the show. Here a few videos I shot on the iPhone.

Just What I Needed

Since You're Gone

Let's Go