Sand Hill Blogger

MLK JR was amazing on so many levels

noreply@blogger.com (SandHillBlogger) — Fri, 21 Aug 2009 21:34:00 +0000

from the book "I Have a Dream"

Whatever your life's work is, do it well. Even if it does not fall in the category of one of the so-called big professions, do it well. As one college president said, "A man should do his job so well that the living, the dead, and the unborn could do it no better." If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures, like Shakespeare wrote poetry, like Beethoven composed music; sweep streets so well that all the host of Heaven and earth will have to pause and say, "Here lived a great street sweeper, who swept his job well." As Douglas Mallock says: "If you can't be a pine on the top of the hill Be a scrub in the valley-but be The best little scrub by the side of the hill, Be a bush if you can't be a tree. If you can't be a highway just be a trail If you can't be the sun be a star; It isn't by size that you win or fail- Be the best of whatever you are."

Twitter & Iranian Election

noreply@blogger.com (SandHillBlogger) — Mon, 15 Jun 2009 00:16:00 +0000

I am sure you all have seen the explosive turn of events happening in Iran after the rigged election by the hard line establishment.

I have been following this all weekend and what has been amazing is the use of twitter by Iranians to do two things:

Communicate with the outside world. If you search twitter for #IranElections, you can see the latest messages coming from the frontlines: http://search.twitter.com/search?q=%23IranElections
Mobilize the movement within the country. The Mousavi campaign and the revolutionary leaders have been using twitter to mobilize the events/protests. This has been especially critical because the government shut down mobile networks to prevent mobilization planning.

Additionally, twitter has been powerful in getting mainstream media to cover the true/real story. Twitterers on the streets started using #CNNfail in their tweets and the trend exposed how different CNN's coverage was from what the feet on the street were reporting. Well, the crowds have spoken and CNN has adjusted coverage accordingly throughout the weekend.

It seems that the Mousavi camp learned a lot from the Obama campaign and the use of social media to mobilize movements.

ShortForm.tv

noreply@blogger.com (SandHillBlogger) — Mon, 01 Jun 2009 00:09:00 +0000

The business model we have at NSVG is very unique. On the one-hand, we work with our corporate clients playing the role of an entrepreneur and advising them on technology innovations they should embrace to remain relevant in the constantly disruptive tech world. On the other hand, we invest in or incubate startups that share our view of the world gained through our work with our clients.

Our most recent incubation that I have been involved in is ShortForm.tv. We are still in early development, but should have our initial Facebook app out in early July. As I have been actively involved in the video space for almost two years now, I am particularly excited about the prospects of this venture. ShortForm.tv solves two inherent problems with online video today:

Finding shortform (3 minutes or less) video content is difficult. We are either sent links or have to conduct our own searches on video sharing sites and social networks
Quality control is almost nonexistent because of a lack of content editors/programmers that exist in old media (e.g. TV, Radio, etc)

To solve these two problems, we categorize online shortform videos into the equivalent of television channels, a whole new viewing experience for online videos. We classify the most sought after video clips into news, sport, entertainment, humor, etc. channels. We empower content editors to monitor audience viewing patterns and adjust or discard content to maximize time spent viewing. ShortForm.tv's key value proposition is twofold:

While we are building a robust crawler to find and categorize videos, we rely on professional content editors to manage content quality and relevancy.
We turn online videos from a predominantly pull based model to a push based model. Viewers can select a channel and watch a continuous feed of relevant content or easily skip to other videos within the channel.

In addition, we are building a host of social elements that will allow viewers to easily engage their friends in ShortForm.tv.

Look for our Facebook app in July.

twitter and journalists

noreply@blogger.com (SandHillBlogger) — Thu, 14 May 2009 04:13:00 +0000

The real value in twitter as opposed to FB is that it provides more important information like interesting articles or news from anyone we care to follow (it is fully open, we don’t need people’s permission to follow them). Thus, we are all micro-reporters that people can follow.

A problem will arise when all the so-called micro-reporters (all of us) have nothing to report because all the paid journalists who we reference via links in our tweets go away because the entire value chain that pays them crumbles. You see, twitter works because people have links to share. When all the reporters lose their jobs, we will only have material that is subpar to share. So, while the value chain gets undone and reformed, it is unclear where the money will come from to pay the actual journalists who we all like to reference via links in our tweets. Until very recently, the journalists got paid by the newspapers/magazines, where the real money in journalism was being made. However, as print content continues to fade into the background and more content is consumed online, new forms of online content monetization have not surfaced in a manner that is sufficient to pay the people who actually cover the news.

Simply put, online advertising hasn’t cut it, something else has to come along. Until then, we will lose more and more talented journalists who have to find other means to make ends meet.

More on Google Profiles

noreply@blogger.com (SandHillBlogger) — Fri, 01 May 2009 17:11:00 +0000

The first 10,000 people to sign up will get free business cards of their Google profile. Clearly, they are moving in the direction of disrupting Linkedin.

Google Profile Business Cards: http://www.google.com/profiles/me/bizcards

NVCA's Plan to Revive the IPO Market

noreply@blogger.com (SandHillBlogger) — Thu, 30 Apr 2009 16:15:00 +0000

The National Venture Capital Association released a four-point plan to revive the market for VC backed IPOs.

1. Tax incentives via low capital gains
2. SOX and other regulation reform
3. More boutique I-banks and accounting firms focused on VC backed companies
4. New liquidity paths through secondary exchanges

NVCA 4-Pillar Plan to Restore Liquidity in the U.S. Venture Capital Industry

View more presentations from NVCA.

Google Profiles

noreply@blogger.com (SandHillBlogger) — Sat, 25 Apr 2009 16:52:00 +0000

Google announced this week the launch of Google Profiles, allowing people to create profiles of themselves that can be selected to be made available on Google searches for your name. The incentive for people to create such profiles is pretty clear. Google verifies these profiles, giving individuals the capacity to control what people glean about them when they "Google them".

The implications to the internet could be pretty far reaching:

Through these profiles, Google learns more about individuals, giving them more context to leverage in their expanded advertising efforts with DoubleClick and beyond. It is similar to the type of context that social networking properties are collecting. However, unlike the social networking properties, Google has an established advertising network to expand on with this data.

There could also be a disruption to Linkedin. With Facebook controlling most communications amongst members of a social graph, Linkedin's core consumer value has been scaled down to enabling people to study other people's backgrounds prior to meetings, introductions, etc. If the Google Profiles become people's primary professional profile, then Linkedin's consumer value will slowly fade into the background, and Google may in fact broaden their profiles to encompass a flavor of social or professional networking as well.

online videos

noreply@blogger.com (SandHillBlogger) — Thu, 02 Apr 2009 21:47:00 +0000

I spent the winter really digging into the online video space with the gang here at NSVG.

Today, the online video market is roughly an $800M business. This is peanuts compared to TV which is closer to $70B. My conclusion from the forces taking shape is that the online video market is poised for explosive growth that will attract new ad dollars, in addition to ad dollars shifting away from TV to online video.

Before explaining the forces taking shape, let me begin with my definition for online video as opposed to TV. I think of online video as any form of video content that is delivered over the internet. I think of TV as broadcast/cable network channels.

Now to the forces:

1. Short-form content: My friends at TubeMogul tell me that based on their data, 75% of online video viewers drop off by the end of the second minute. The reason for this is twofold. First, there is a shortage of compelling content online today. Second, the attention span of online video viewers is in the minutes, not hours. There has been some limited success by groups creating short-form content that are compelling in nature and fit the short attention span, including EQAL (lonelygirl15, KateModern, etc) and Revision3 to name a few. My prediction is that we will see much more compelling content like EQAL's and Revision3's come out of small studios that will fuel the growth of online videos and attract advertisers who want something other than user generated content to put ads on. In a recent trip to LA, I was impressed with the movement of very talented creatives away from traditional studios towards independent production of online shorts.

2. Categorization and Channeling: Today, most of us find new online videos when our friends send us an email with a link, or when we search our Facebook newsfeeds and see videos our friends posted, or when we search video sharing sites like YouTube and Metacafe. The problem is that for the most part, we are pointing/clicking our way through content versus sitting back and being entertained as we are when we tune into channels on our TV. Companies like ffwd and 1Cast are doing some good work in categorizing content into channels that you can sit back and watch. I believe we will see more companies tackling this problem and we'll slowly turn online video viewing into something that you can sit back an enjoy versus point/click your way through. There are challenges though, like deciding on categorization techniques from the limited metadata that exists for online video. That said, it is where we need to go and we are seeing the forces take us there.

3. Advertising: Although part of the reason that online video ad spend is only at $800M today is in fact the lack of compelling content, another reason is the lack of appropriate ad units. While pre/mid/post rolls and overlays on video have had some success, the data suggests that consumers are not happy with them. Clearly there needs to be some innovation around new forms of video ad units that are appealing to both advertisers and consumers. I've seen some interesting seed stage companies recently that are doing very cool things like stitching ads into white spaces in a video or doing post video production product placement. The market is telling us that online video advertising is not working today, and the forces are moving us towards better solution.

4. Convergence: Perhaps the most exciting of the forces is that of convergence. I envision a day when we no longer pay Comcast or Dish a monthly subscription fee because we have all the content we want at our fingertips on the TV through the internet. Yahoo's TV widget platform is one indication of the big boys pushing us in this direction. If the Yahoo TV widgets take off (I think they will), you can envision all the content in the world being available through various widgets on the TV and people can view them for free with advertising or for a fee without advertising. In addition to Yahoo, Apple is making the same bet through their Apple TV service. However, the beauty with Yahoo's TV widget platform is that you don't need another box like you do with Apple TV. You simply connect your TV to the internet and you are off and running. We are still worlds away from this reality, but the forces are clearly moving us in a direction where one day all content will be delivered through the internet.

As these four forces materialize, you can bet that online video will grow from an $800M business to one that could very well surpasses where TV is today.

More on Change.gov - Startup America

noreply@blogger.com (SandHillBlogger) — Mon, 19 Jan 2009 04:01:00 +0000

Over the weekend, my good friend Marc and I brainstormed an idea for the Obama team, and Marc submitted it to the Citizen's Briefing Book. Perhaps it will get some attention, and Marc will be called into action to lead it :)

Details:

Startup America: Bringing Innovation Back to America (A Government VC Fund)

I have been watching the government bailout with intrigue for several months, wondering why America is investing billions in industries mired in uncertainty, merely prolonging the inevitable. Therefore, I propose Startup America, an initiative for the government to invest $1B in venture capital financing to startup companies in a variety of different industries, with up to $1M per company. The fund would work in much the same way a typical seed stage investment company works, whereby there would be a board to review each idea on a variety of metrics, and upon submitting a term sheet, the government would receive equity for their investment. This would allow the government to recoup their investment and potentially more while providing a great financial resource for our citizens.

Startup America would ensure that innovatiion remains America's strongest asset. It would create jobs and industries for thousands, if not millions of people. It would certainly jumpstart the economy. It would create tremendous value for depressed areas all across the nation, providing people with resources to turn their dreams into reality. It could be the first step in solving our energy crisis, curing cancer, improving education, eradicating homelessness and malnutrition, improving foreign policy, increasing security, and vastly improving current technologies . The possibilities are endless. Our minds are our only limitation.

change.gov

noreply@blogger.com (SandHillBlogger) — Sat, 17 Jan 2009 00:07:00 +0000

Last night I listened in on a panel and was reminded again of the super use of Internet and social network technologies by the Obama team.

The New York Times reported that Obama met with Marc Andreesen at the San Francisco airport in February of 2007 to discuss how the Internet and social networks can be leveraged to communicate his message. It was the beginning of a well orchestrated campaign that leveraged these tools to not only communicate a message, but to build a brand, and to empower people to be part of the change they wanted to see. There was not a day that I did not refresh my Facebook feeds without seeing friends joining Obama groups or attending Obama events or communicating Obama messages in their status updates. It allowed us all to be part of the experience versus just voters. We felt a connection with the brand and we took a sense of ownership during the campaign. We adopted the message and not only became supporters but became evangelists by enlisting our friends to join in on Obama groups or to distribute/attend events or to communicate messages to their friends via their status updates. The result is now obvious and nearly two years after Obama's meeting with Andreesen, we are set to swear in a movement that we hope will indeed finally demonstrate a government of the people and for the people.

If the trends of the campaign continue, there is no doubt that the Obama administration will continue to leverage the power of the Internet to allow all residents to be a part of government on a daily basis. The launch of Change.gov, in addition to the current presence across social networks gives the administration a two-way communication with the American people (make that the world). If you visit Change.gov, you will notice something called the Citizen's Briefing Book. This is where people can stop in and share ideas with the Obama team and then it is opened up to the masses to vote the idea up or down (+1 or -1), very much like Digg. The ideas receiving the most votes will bubble up to the top and come to the attention of the administration. Interestingly, I just visited Change.gov and noticed that the idea with the most votes is Ending the Marijuana Prohibition with 72,310 votes. Hem, I wonder how the administration will respond to that one. While the discussion of ending marijuana prohibition might be political suicide in most cases, if truly over time the wisdom of the crowds points towards this as an issue that is important to a majority of Americans, the administration will have to have an answer in some capacity.

We are moving into an era where all our voices can be heard in government, and on January 20th when Obama is sworn into office, it is all of us who joined in on Obama groups, advertised Obama events, or wrote about Obama on our status updates that are also getting sworn in. For it is us through the power of the Internet that made this happen, and it will be us through the power of the Internet that will continue to participate in the administration. I Hope.

2009

noreply@blogger.com (SandHillBlogger) — Fri, 02 Jan 2009 17:27:00 +0000

I spent new year’s eve having a quiet night in with my girlfriend. Although we are grateful for many things like our health, our family, our friends, and most importantly the freedom to wake up and pursue our passions, we just did not feel right about celebrating this year.

In both of our lives, we have never seen the world in such a state of volatility, uncertainty, and despair. Two things stand out above others:

1. The ongoing global wars in Afghanistan, Iraq, Darfur and many other regions which our media fails to bring to our attention: http://en.wikipedia.org/wiki/Ongoing_conflicts. In the addition, the current escalating violence in Gaza and the humanitarian crisis that has once again unfolded in the region.

2. The global financial meltdown. In the U.S., we had leveraged a false sense of reality to finance our excessive ways for too long and those false realities were unmasked this past year.

a) Houses appreciating at an 8-10% clip between 1998-2006, compared to a less than 1% clip between 1930-1997

b) Foreign ownership of U.S Treasuries growing from about 20% in 1996 to about 60% today

c) Total debt as a percentage of GDP approaching 300%

d) an explosion in subprime lending.

All of this resulted in the U.S. becoming a pure consumer economy, as we borrowed beyond our means to spend/consume/spend/consume/etc. Over 70% of our GDP is now associated directly with consumer spending versus real value creation. The false sense of realities came crashing down on us this year and this past holiday season we witnessed the vulnerabilities of the U.S. consumer economy when consumers have less access to debt. With the credit markets in a total state of redefinition, the U.S. economy is now in a state of equal shock as it has to come to grips with real value creation versus living in excess through the false realities noted above. The net result is a decrease in consumer spending and an increase in unemployment. Both of these in turn lead to greater foreclosures, temporary deflation, and long term inflation as a result of the actions from the fed/treasury. The pain of this financial crisis is felt by everyone, from families losing sources of income, to families forced into foreclosure, to retirees forced out of retirement, to students without access to student loans, etc. It is a crisis unlike any our generation has experienced.

As such, we just did not feel right celebrating this year, and instead had a quiet NYE with the hope that collectively as a nation we can create a more peaceful and prosperous 2009. With change ready to take the helm in the U.S. on January 20^th, we are hopeful that the global wars and humanitarian crises can be met with intelligence versus violence. As for the economy, which we have more direct control over, it is time to create versus take. It is time to wake up and build businesses that create value, create jobs, and grow our economy through value creation versus consumer spending. It is time to become disciplined about not living beyond our means and spending our limited time creating value versus spending. It will help us not only economically but spiritually.

Here is to Hope for a better 2009 for everyone, let us all do our part!

Microsoft and Yahoo Search

noreply@blogger.com (SandHillBlogger) — Sat, 13 Dec 2008 00:19:00 +0000

Recent discussions about an acquisition of Yahoo's search business by Microsoft have centered around two synergies that would come from such a deal.

Costs
The first is an obvious one around costs and that the combined search business for Microsoft will spread fixed costs over a greater revenue. For Yahoo, it will be the elimination of all associated fixed/variable costs with their search business.

Revenue
The second is less obvious and questionable at best. It is the assertion that a combined Microsoft/Yahoo search business will have an increase in revenue per click (RPC) as a result of the increased overall search market share. The chart below from Credit Suisse shows their projections of where a combined Microsoft/Yahoo would fall in RPC.

Google today commands close to $0.70 per click from advertisers, while Microsoft is closer to ~$0.30 and Yahoo is at ~$0.35. The analysts predict that the laws of supply and demand will push the RPC numbers up for a Microsoft/Yahoo search as more advertisers gravitate towards properties with higher market share and bid up keywords in auctions.

There is just one problem with this. It is an assumption and not a scientific fact. How can Microsoft be sure that more advertisers will gravitate to the combined search business and bid up words? Advertisers may simply be spending a majority of their current search advertising budget on Google and then spreading the rest across other properties. If that is the case, we will not expect much difference after a combined Microsoft/Yahoo search deal.

The deal could be a sweet one for Yahoo if it happens. It will allow them to unload their search business which has become a huge distraction for their management and will allow them to focus on being the media property that they should be. However, for Microsoft, I am not sure a combined Microsoft/Yahoo search property will give them the competitive weapon they are looking for to stop Google from not only dominating search but leveraging search to encroach on Microsoft's office business. The combined search business will continue to struggle along for Microsoft until there is a clear alternative to Google from a user's perspective. A re-branded and retooled search property may be the only path for Microsoft. Though the real question is why Microsoft wants to compete in search? Is it not a distraction and futile effort? Are they and their shareholders not better served pursuing their core strategy, like building the most kick ass cloud based online operating system running office productivity tools?

Bailout Chart

noreply@blogger.com (SandHillBlogger) — Wed, 26 Nov 2008 19:03:00 +0000

I ran into this chart today that puts the current economic challenge in perspective to historical U.S. government expenditures (inflation adjusted). Very sobering.

Scraping Twitter for election Results

noreply@blogger.com (SandHillBlogger) — Tue, 04 Nov 2008 21:49:00 +0000

An interesting twitter hack by setfive consulting trying to predict the election through the voice of twitter users. It updates every 10 seconds, and so far it is all blue. Obviously, this is not a valid sample, as it seems that most twitter users are voting democratic. Nonetheless, another interesting use case of twitter, by scraping the mounds of data for prediction modeling.

Obama and Startups

noreply@blogger.com (SandHillBlogger) — Wed, 15 Oct 2008 17:51:00 +0000

One reason (of many!) that I am supporting Obama is that his economic plan is fundamentally more sound, especially when it comes to early stage innovation.

Obama understands that to stimulate the economy, we need to get startups off the ground to sell new products/services and to create new jobs. In his Small Business Emergency Rescue Plan, Obama notes that "we need to encourage investment in small businesses to help create jobs and turn our economy around. That’s why Obama will eliminate all capital gains taxes on investments made in small and start-up businesses."

In a time when angel investors have lost fortunes in the public markets, they will need incentives to continue to take risks on new startup investments. I believe Obama's plan provides a sound incentive for angel's to stay in the game, vs. retreat to the sidelines. As more institutional VCs move away from seed/early stage financing towards later stage investments, there is a growing gap between company formation and a traditional Series A investment. This gap is filled by angel investors and if they move to the sidelines, we will see many new startups never make it to a Series A because of cash constraints. Thus, it is important to keep the angels in the game, and eliminating capital gains on their investments is one sound method. It will keep the innovation engine of the U.S. alive and humming.

Sequoia Capital’s Take on The Economy

noreply@blogger.com (SandHillBlogger) — Fri, 10 Oct 2008 21:21:00 +0000

In case you have not already seen this slide deck, it is Sequoia Capital’s presentation to their portfolio companies. It has some great data and sound advice.

Sequoia Capital on startups and the economic downturn

View SlideShare presentation or Upload your own. (tags: depression recession)

The Economy & Startups

noreply@blogger.com (SandHillBlogger) — Thu, 09 Oct 2008 16:21:00 +0000

My post college business boot camp came at Intel. Intel’s co-founder Gordon Moore famously said many years ago that “you can't save your way out of a recession." It has become words by which Intel lives by in every downturn. During the last downturn in 2001, Intel increased investments in R&D and semiconductor manufacturing technology. Those investments are what is driving their revenue growth today in server processors, ultra mobile processors, etc. When I first heard Gordon Moore’s quote at the age of 22, I was too young to fully appreciate the deep wisdom within those words. However, a decade later, I have come to understand that downturns are one of the most opportunistic periods to create the future, for several reason which I will share.

Less Noise, More Signals:

The noise in the startup world dies down during downturns. People will become very cautious and less people will leave their big company jobs for startups. Thus, it is times like this that great companies are born. Those that will take the risk will be more calculated and disciplined. They will strive to create new companies that are less copy/paste plays and more grounded on solving real world problems.

Sound Economics:

The days of getting eyeballs and eventually figuring out monetization are over. As the noise in the startup world dies down, the companies that are created will be focused on monetization from the onset. While advertising will continue to be one approach, new creative ways for making money will be developed. At the same time, the cost side of startups will become more disciplined. CEOs will watch costs and not spend money on anything that is not directly tied to product development or sales.

Grade A Talent:

CEOs will recruit for only the critical and necessary roles, and will be that much more stringent on ensuring that they are bringing in top notch teammates. There is no place for mediocrity in startups during downturns.

VC Investments Will Continue:

The thing to keep in mind is that while the debt markets are drying up, VC firms are sitting on funds that need to be invested over the next five years. Thus, while the likelihood of getting financing for a copy/paste business that does not have a revenue model will go away, the sound companies that will emerge in this downturn will find money. On the flip side, entrepreneurs will need to bootstrap for a longer duration as angel financing will get tougher because the net worth of most angels has plummeted. And so, true to Gordon Moore’s philosophy, VCs will not be saving their way out of this recession.

It is for the above reasons that I am waking up optimistic these days about the days to come. I think we will be in a period of less bull shit and more substance. And while many will hide away in big companies, the few who take the bold risk to start a company are more likely to play the game smarter and increase their likelihood of winning.

Cost of the Financial Bailouts

noreply@blogger.com (SandHillBlogger) — Fri, 19 Sep 2008 16:52:00 +0000

A quick back of the envelope calculation on the impact of the financial bailouts to the American taxpayers.

I understand that some of this money is in the form of loans and/or equity investment that should end up having a positive return, however, it is a risk that could also turn negative. Furthermore, we the taxpayers have not paid taxes with the expectation that our government would use our money to bail out companies while their CEOs walk away with lucrative exit packages. What sort of message does this send to our future business leaders? These were risks corporations took to increase shareholder value. Those bets turned against them and we the taxpayers should not be paying for it, bottom-line.

X for Y, or X meets Y

noreply@blogger.com (SandHillBlogger) — Tue, 16 Sep 2008 21:09:00 +0000

Recently, it feels like many internet based businesses being born in the valley are not revolutionary new technologies, business models, or use cases. Rather, they fall into one of two categories:

X meets Y

X for Y

A great example of this is Yammer, which won first place at last week's TC50 conference. What is Yammer? It is "twitter for the Enterprise". Don't get me wrong, I like Yammer and think it could do very well as a micro-blogging service in the enterprise, but is it a revolutionary new technology, business model, or use case? No, but it does fill a gap as twitter had not yet made much traction in the Enterprise. An "X for Y" service such as Yammer winning first place at a premier silicon valley conference such as TC50 is a clear indication of the state of the valley.

I think there are two reasons for what we are seeing. We are either at the top of the S curve in the evolution of the internet or we are creating businesses with the objective of having a quick exit. My opinion is that many of the ideas being generated around the valley today are focused on how can we get a quick exit, versus how can we build a business that can grow into a profitable standalone enterprise. Sure, the opportunity for a quick exit exists in these copy/paste type of businesses, but the real opportunities and up sides are in new revolutionary plays. My own belief is that we are not yet at the top of the S curve by any means, but somewhere in the middle with a whole lot of opportunities for services that leverage the data layer more deeply ready to be born.

Viral Videos

noreply@blogger.com (SandHillBlogger) — Fri, 29 Aug 2008 20:16:00 +0000

I was forwarded two viral videos this week by friends.

The first was a viral video put out by Deloitte to market the firm to MBA students to increase the applicant pool for post-MBA consultants.

The second was a viral video meant to promote the book Damn, It Feels Good to Be a Banker. The video shows bankers and consultants squaring off on Wall St. with a hip hop challenge.

The use of viral videos to promote firms and products is a growing and effective trend. The latest numbers from Nielsen show that in July, there were over 7B video streams (5B+ on YouTube alone). Yes, those numbers are for one month!

The online video space is growing in importance and the fragmented landscape continues to see new players claiming a stake in the ecosystem. This week saw the funding of StudioNow, which is a marketplace for those who want to create a professional online video, and those that can help produce them (Videographers, Editors, Animators, etc)

I have been studying this space more closely lately and will share my ongoing findings in future posts.

Widgets

noreply@blogger.com (SandHillBlogger) — Thu, 07 Aug 2008 21:16:00 +0000

I attended a fantastic widget event last night hosted by the SF New Tech Meetup and moderated by my friend Lawrence.

While I went to the event already bullish about the business of widgets, I came away even more excited about enabling new opportunities in this growing segment of the internet. There were close to 600M widget views last month worldwide, according to Widgetbox. That said, even with such immense distributive power, the total advertising spend on widgets in 2008 will only be approximately $40M. There are two possible conclusions that one could draw from these numbers. The first is that the widget business is one that is tough to monetize. The second is that the widget business is still in its infancy and the vehicles for advertising through widgets are just ramping. I would agree with both of these conclusions.

Widgets are most definitely tough to monetize. Many advertisers worry that because of the distributive nature of widgets, their ads may end up on sites which could tarnish their brand's image.
The widget business is also a fairly new business. The average person still asks what is a widget? As the widget business evolves and advertisers grow to understand the reach they can have through widget advertising, they will grow more comfortable with delivering ads through the widget distribution channel.

Additionally, the overall cost of creating widgets is dropping towards zero. Last night, there was a demo from Gigya which on top of providing distribution to widget developers also provides tools to advertisers to create branded widgets. Even more impressive was a demo by iWidgets which allows web site publishers to easily create engaging widgets of their content, allowing them to reach their content consumers wherever they may spend their time (iGoogle, Facebook, etc.). Other players in this space include Zembly, which also presented, and Clearspring. When it comes time to search the world of widgets for your specific needs, the place to go is Widgetbox. They are the authoritative gallery of widgets and are quickly approaching a total of 4B widgets served.

While the $40M in 2008 advertising spend seems small, there is no doubt that widgets are powerful and have a reach that advertisers will come to not only want, but expect.

Awesome event Lawrence and Myles from SF New Tech Meetup!

Repbulic.com 2.0

noreply@blogger.com (SandHillBlogger) — Sun, 27 Jul 2008 19:02:00 +0000

I spent the last week away on the coasts of Mexico near Puerto Vallarta with my girlfriend Nicole. We spent time hiking, horseback riding through the rain forests, boating to isolated beaches, and exploring the local neighborhoods. I also got a chance to do some reading. One of the books I started reading during the tail end of the trip came through a recommendation from my friend R Why called Republic.com 2.0 by Cass Sunstein. R Why thought that I should give this a read because he wanted to balance my passion for the personalized internet and media experience with a well reasoned opinion on the side effects of the personalization of content.

While I have only started reading the book, Cass Sunstein raises some very good points. He states that a well functioning democratic system should 1) expose people to material they would not have otherwise chosen on their own, and 2) enable people to share some common experiences. He notes that without these, a democratic system will be tough to sustain because of the inability for different groups of likeminded people to understand and collaborate with one another. His thesis centers around the notion that various filtering and targeting technologies have "the consequence to encourage people to narrow their horizons, or to cater to their existing tastes rather than to allow them to form new ones." The natural result will be a slow decline of common experiences amongst people who share different tastes.

So far, I agree with Sunstein that collaborative filtering, contextual advertising, and other such technologies do have the negative side effect of minimizing exposure to content and advertising that may otherwise have enlightened us to see an issue in a different light or to appreciate a perspective which we did not previously understand. While I am a staunch promoter of personalization technology to limit the noise that comes our way, I think continuing to consume media which we would not have otherwise chosen is important for our democratic system. We cannot solve today's problems with blinders and seeing media that people different from us consume is important for shaping our opinions. How can such information be best delivered to consumers of media is the question. How can we give consumers the media they know they want and also serve up the media they may not otherwise have chosen in an engaging way?

iPhone 2.0

noreply@blogger.com (SandHillBlogger) — Tue, 15 Jul 2008 15:52:00 +0000

Although I did not purchase a 3G iPhone, I did update my original iPhone software to 2.0 on Friday with great difficulty. When the software finally updated some 7 hours later, my frustration from the installation process was quickly overcome by excitement for the new platform.

In my opinion, the iPhone 2.0 represents a monumental milestone in the role of the mobile phone in our daily lives for the following reasons:

1. Platform: the iPhone is the latest platform that is generating entrepreneurial passion. I spent the weekend downloading and engaging with a handful of apps, and I did so while out and about in cafes, restaurants, lounges, and the park. A few apps I tried were Twitterrific (a twitter reader), whrrl (a location based service to find friends and see where they are at/going), and the facebook app. Both Twitterrific and Facebook offer a very cool feature to take a picture and automatically load it into your feeds, thus removing one of the painful manual processes in social media which I talked about in previous posts. Apple has done a wonderful job managing the platform via the App Store, which makes finding and loading apps extremely easy and efficient. Additionally, the process to get an application approved for the store creates an environment which is far less polluted than other platforms like facebook and MySpace which have become breeding grounds for application spam.

medialets , a startup ad network for iPhone applications has been posting some very interesting analytical data about the economics of the app store. The chart below indicates that in a few short days, simple economics are taking shape and the average price of iphone apps on the platform is dropping as competition increases with each additional app that is added. My belief is that most apps will end up being free as a result of price wars amongst competitors and applications will modify their business models to monetize through advertising via companies like medialets.

2. GPS>LBS: The GPS technology enables location based services which will finally come alive on the touch screen iPhone. it is the iPhone's touch screen and ease of use that finally moves LBS services like whrrl and loopt from niches plays into the mainstream.

3. True Internet Experience: The iPhone 1.0 was the first mobile phone to deliver much of the full internet experience on the go. In 2.0, it is combined with the application platform and GPS to deliver functionality that come close to matching or surpassing those that we achieve on our PCs. While the PC will have a place for writing documents, crunching numbers, etc, the scope it will have in our lives will begin to trend down.

Social Media Aggregators

noreply@blogger.com (SandHillBlogger) — Mon, 07 Jul 2008 22:14:00 +0000

I tried a handful of social media aggregators today.

The first was FriendFeed which provides a feed of all of your activities across the social web. You designate services that you belong to (e.g. twitter, blogger, YouTube, etc) and FriendFeed aggregates all of your activities across those services into one feed to be viewed by those following you. Similarly, FriendFeed makes it easy to find friends to follow or others that you may want to follow based on who your friends are following.

The second was Swurl which is very similar to FriendFeed but also has a calendar view to see feeds in a calendar format with the ability to drill down by day to get further details on any given day.

The third was Spokeo which is more of a spying service than a social media aggregator. It does not require you to follow anyone and pulls in available information about any contact based on unique email addresses from most available sources. At a glance, you will see your friends updates from LinkedIn, Hi5, MySpace, Filckr, etc. without anyone even knowing that this information is being shared or viewed. I was amazed by the wealth of information I was able to find about people I know. There are also premium services to access further information that will be useful for HR managers to do background checks before making a hire. Spokeo is screaming with privacy concerns.

I draw two conclusions from these three services.

The first is that our digital selves are becoming a commodity. There is so much information about each of us available across the Internet and social media sites that the power now rests in the ability to aggregate and present everything about us in a manner that engages the audience. With so many moving parts, it is hard to predict a dominant winner with each new service aggregating more information and adding further capability.
The second is that while aggregating information about ourselves is useful to communicate a comprehensive view of our digital selves, it still does not solve the manual uploading challenge. A big problem still exists in the upload process to get our media into the social media ecosystem in the first place.

Digital You vs. Professional Content

noreply@blogger.com (SandHillBlogger) — Sun, 29 Jun 2008 20:30:00 +0000

I read a research report from Avenue A Razorfish this past week titled 2008 Digital Outlook. Two themes that resonated with me were 1) the proliferation of the digital you, and 2) the proliferation of self promotion. These themes are completely aligned with my post last week about omnipresence.

I am amazed by the willingness of those participating in the social media phenomenon to share vivid and personal content about themselves. In this space, the lines of personal versus professional are increasingly getting blurred. I use to find myself deciding whether a relationship was a personal one or a professional one, and this decision would influence whether I would connect with an individual on facebook (personal) or Linkedin (professional). Increasingly, I find that the digital me is not something that is personal or professional, but just a digital composition of me and that I only need one platform to manage this (is Linked in trouble?). Social networks have become a vehicle to self market, and people are using such services to self promote for both personal and professional purposes.

That said, what I struggle with is whether there is a business in the proliferation of the digital you or self promotion. facebook has struggled to monetize on a platform with 120M+ users. Additionally, I read posts this past week on blogs that discussed the limited monetization of content on YouTube which is predominantly user generated content as compared to say hulu which serves professional content and is managed by NBC/Fox. While YouTube streamed close to 4B videos last month, hulu streamed only 80M but has been able to monetize those streams far more effectively than YouTube because the content engages users for a longer duration and far more actively.

The conclusion I draw is that while the digital you is fun and we will certainly scroll through and see what our friends are posting, we will not engage in the content long enough or actively enough for large scale advertising revenue to kick in. While I may watch a video on hulu for 30 minutes, my attention span on a YouTube video or my facebook feeds is in the seconds. I quickly scroll through my facebook feeds to get a quick snapshot of my friends activities and neglect any advertising that may be presented to me. Similarly, I watch maybe 30 seconds to 1 minute of YouTube videos that come my way. The quality of content is what drives user engagement and I believe it is professional content or content of quality that keeps users on a site long enough to click on advertising. While social media, the digital you, and self promotion are fun and keep us connected, they are certainly not engaging us in the same manner that professional content does. Quality versus quantity comes to mind, and although facebook's 120M users and YouTube's 4B video streams last month are impressive, the quality of the content is simply not there to drive significant magnetization. This may change, but for now, the digital you is more fun than big business.