Henrik Torstensson's Weblog

The New Dork

2010-03-10T18:00:00.001+01:00

Way more online biz geekier version of Empire State of Mind.

Google's Parisian Love ad is a great feature-oriented ad

2010-02-09T18:59:00.004+01:00

Google's Super Bowl-aired commercial Parisian Love is a great featured-oriented advertisement. It does a really good job describing the depth of Google search to "ordinary" users. An advertisement that shows everyone trying to explain a product that it is possible to explain a deep product in less than a minute.

Happiness and life

2010-02-06T13:53:00.002+01:00

Jim Rohn: "Happiness is not something you postpone for the future; it is something you design for the present." [via: Amanda Rose]

Chris Dixon interviewed, startup life and business models

2010-02-03T22:48:00.004+01:00

StockTwits.tv: Interview with Chris Dixon of Hunch. Good video interview with one of the best Internet biz/startup bloggers out there.

The Monster In Your Head: Disappearing into the Fire. "How many of us create companies, create products where our blood and bone fuse with the glaze to create something so exquisite as to never have existed before? How romantically seductive is the image of giving one?s all to the fire? After all, as Whyte says:

"Work is the very fire where we are baked to perfection, and like the master of the fire itself, we add the essential ingredient and fulfillment when we walk into the flames ourselves and fuel the transformation of ordinary, everyday forms into the exquisite and the rare."

I have to understand this viscerally if I'm going to be of service to my clients. But I have to be mindful, too, of the cost. In disappearing into the kiln, the potter created the most meaningful thing possible. But in the end, he ceased to exist."

There are both good and bad days in the world of startups.

Master of 500 Hats: Subscriptions are the New BLACK. (+ why Facebook, Google, & Apple will own your wallet by 2015). "We have largely WASTED an entire web decade of time, energy & venture capital on extremely inefficient revenue models. There have been a few interesting examples of startups acquired in the 00's for large amounts due to amazing growth (eGroups, MySpace, Skype, YouTube) or advertising potential (aQuantive, DoubleClick, AdMob, RightMedia). However, mostly the decade has been an uninterrupted string of uninspiring business models and small-time acquisitions of Web 2.0 startups filled with rainbows & unicorns, rather than those based on simple, transactional revenue models."

Read the entire post for perspective, but I'm pretty bullish on branded advertising for the next 5-10 years. Especially video advertising. For sites that are not traditional media sites (games, services etc) I see user paid growing as it makes more sense than remnant ads.

Chris Dixon: Institutional failure. "The TV show The Wire is an incredibly instructive lesson on how the modern world works (besides being a great work of art). The recurring theme is how individuals with good intentions are stymied by large institutions."

The Wire is an excellent series (watch it if you haven't already), read how some lessons can be applied to startups and big companies.

Health, bonuses and NYC

2010-02-01T22:29:00.005+01:00

Both Sides of The Table: The Yo-Yo Life of a Tech Entrepreneur - A Cautionary Tale. "I somehow never really felt stressed during all of this. At least not externally. Immediately following the closing of the round I flew out to a big real estate conference in France to meet with prospective customers. On the trip I nearly collapsed. I felt dizzy and had an aching in my chest. I started feeling panic attacks. I had never had any symptoms like this in my life.

[...]

The doctor told me that while I didn't ever show my anxiety to my friends and colleagues or even acknowledge it myself, my body still went through the stress internally. How had I let myself get to this point? If you're still young I'm sure you think it would never happen to you - you're fit, right? Age and life catches up with you. I was you, too."

Being an entrepreneur is not the rosy story politicians too often tell.

Steve Blank: Incentives and Legends. "Everyone at our startup was working on startup starvation salaries, and Bob had taken a large pay cut to join us. When the Japanese partner deal was done, Bob said, "Steve, I deserve at least a $10,000 bonus. I haven't been home in weeks, and I pulled off a financing even you admit was unbelievable."

I patiently explained that this type of miraculous event was the norm for startups. The engineers were pulling off miracles on a daily basis, we were all taking fumes for salaries, but our payoff will be when our stock is worth something. Until then, tell your wife you'll get $10,000 when hell freezes over. No bonuses in a startup. To his credit Bob said while he understood, he was going to hear about it at home for not being appreciated.

[...]

I said, "Extraordinary work in a startup is the norm, but you performed even beyond my expectations. In my startups that's worth recognizing.

Rewards for extraordinary effort became part of the company's legend.

[...]

In three or so years these cash incentives added up to no more than $50K. While everyone understood the theory that we were working to make the stock valuable (and we did,) the cash reminded them that we cared and noticed."

Good points.

Chris Dixon: The NYC tech scene is exploding. "The one thing we really need to complete the ecosystem is a couple of runaway succesesses. As California has seen with Paypal, Google, Facebook etc, the big successes spawn all sorts of interesting new startups when employees leave and start new companies. They also set an example for younger entrepreneurs who, say, start a social networking site at Harvard and then decide to move."

Stockholm is developing quite nicely too, but more angel investors and some decent exits would benefit the Stockholm web scene.

YouTube monetizing 1+ billion videos per week and Spotify sales are ?50+ million per year

2010-01-25T20:35:00.003+01:00

Some data points worth noticing in Midem(Net) Blog's Live Post: Conversation with Spotify and YouTube and BBC News'
Spotify boss Daniel Ek sets out future plans.

- YouTube monetizes more than 1 billion videos per week (for each $1 in average CPM for a mix of overlays and pre-rolls YouTube has sales of $1+ million per week/$52 million per year)
- YouTube sells pre-roll ads in the UK for 15-30 pounds
- Spotify has 250,000+ subscribers (about 30+ million euros per year) and Spotify's "advertising business is in the tens of millions of euros each year" making it sound like it is at least on a ?50 million revenue run-rate and growing)

Mark Pincus and Bing Gordon on Internet entrepreneurship

2010-01-25T00:11:00.002+01:00

Really interesting presentation at Stanford by Zynga founder Mark Pincus and former Electronic Arts COO Bing Gordon. Highlights available in shorter clips at Stanford

Themes for 2010 and interesting links

2010-01-23T15:57:00.004+01:00

The Big Picture: The Economy's Lost Decade. Eye-opening data on US job growth, GDP growth and household net worth in the last decade. A horrible decade if you look at underlying growth.

Paul Kedrosky: Playing "What If" With $10,000 From 12/31/1999 to Today. Gold, raw materials and treasuries did well in the last decade, U.S. stocks and venture capital did not.

VentureBeat: How Jajah, a little phone company, sold for $207M while everyone else got killed. Somewhat of a post-mortem (some success factors and key events) on VOIP company Jajah's life as a startup from launch to being acquired by Telefonica.

VentureBeat: Hulu?s success stats: 43 million users, 924 million streams, 14,000 hours of TV. Online video is growing quickly as TV shows are going online. Hulu is an obvious U.S. example, but local Swedish ones (TV4, Kanal5, TV3, SVT) are growing quickly too.

Fred Wilson: Areas of Interest. Union Square Ventures' areas of interest for 2010: Mobile, Mobile What?, Gaming, New forms of commerce and currency, Cloud based platforms and APIs, Education and the Energy/Environment.

Fred Destin: Investment and innovation themes from the Defrag conference. Making e-mail better, Making lifestreams relevant, Measuring and monetizing influence, Extranets, Selling data, Meaning is the new search, Breaking up the corporate IT environment, Education, Application Marketplaces, Identity Metasystems.

Chris Dixon: Why the web economy will continue growing rapidly. "Right now there are lots of inhibitors to brand advertising dollars flowing onto the web. Among them 1) most of the brand dollars are controlled by ad agencies, who seem far more comfortable with traditional media channels, 2) it is hard to know where your online advertising is appearing and whether it is effective, 3) banner ads seem extremely ineffective and are often poorly targeted, 4) big brand advertisers seem scared of user-generated content, today?s major source of ad inventory growth.

But economic logic suggests these problems will be figured out, because advertisers have no choice but to go where the consumers are."

On Playahead closing and Facebook's willingness to change

2010-01-23T11:02:00.003+01:00

The Swedish community Playahead, which was acquired for 102 million SEK in early 2007 (sv), will be closed down this spring (sv). Obviously Facebook's success has eaten into Playahead, but one should not forget Bilddagboken's impact.

In this context it is worth reflecting on Mark Zuckerberg's willingness to make changes to core parts of Facebook's user experience (news feed, privacy settings etc) about once a year. If one is not willing to change a social service, it will die sooner rather than later.

Google revenue up 17 % in Q4 2009

2010-01-22T10:07:00.003+01:00

Google's growth of 17 % to $6.67 billion in Q4 2009 is highly impressive in a slow growth economy.

How to think about Google

2010-01-10T07:18:00.004+01:00

Chris Dixon: What's strategic for Google? "Google makes 99% of their revenue selling text ads for things like airplane tickets, dvd players, and malpractice lawyers. A project is strategic for Google if it affects what sits between the person clicking on an ad and the company paying for the ad. Here is my rough breakdown of the "layers in the stack" between humans and the money:

Human - device ? OS ? browser ? bandwidth ? websites - ads ? ad tech ? relationship to advertiser ? $$$

At each layer, Google either wants to dominate it or commoditize it." Read the entire post.

1000 people can change the world

2009-12-23T22:52:00.002+01:00

Seth Godin: First, organize 1,000. "What's difficult? What's difficult is changing your attitude. Instead of speed dating your way to interruption, instead of yelling at strangers all day trying to make a living, coordinating a tribe of 1,000 requires patience, consistency and a focus on long-term relationships and life time value. You don't find customers for your products. You find products for your customers."

Feature vs product

2009-12-15T01:00:00.002+01:00

Venture Hacks: Sometimes the feature is the product. "How can you tell if a feature is really a product? You can wait for customers to start adopting it, see if they love it, and then try to jump in as an investor or an employee."

Redeye VC: Let's just add in a little virality. "The most disappointing answer is when they say "Oh, we'll just make it viral." As if virality is something you can choose to add in after the product is baked - like a spell checker. Let's imagine the conversation at the marketing department of the wireless phone companies. "Let's see. Should we spend $4 Billion on advertising this year... or should we just make it viral?"" [via: Good Old Think]

Wingify: Only three metrics matter for your online business. "1. Monthly growth in number of paid users. 2. Retention rate of existing paid users. 3. Monthly Revenue."

A VC: The Herd Instinct. "I think there are two approaches that work in the venture business. One is the contrarian approach. When everyone wants to be a consumer web investor, do software as a service/enterprise. Go where the money isn't.

Or you can just be earlier than everyone and anticipate where the herd is going to be next. That is really hard, maybe too hard to do well over a sustained period of time.

But I do believe that both of those approaches will get you top tier returns if you execute them well."

Sunday links

2009-12-06T00:27:00.002+01:00

dshen: Talking People Out of Being Entrepreneurs. "It's sexy being an entrepreneur. The rewards are great. The upsides are what everyone sees, and nobody sees the downsides. Dealing with the downsides is where the rubber meets the road and where you'll be tested sorely on whether or not you are a great entrepreneur. But if you're not entrepreneur material, you're not and that's that, whether it's your personality, life stage, or otherwise. You're not a bad person; it's just not for you and we should all just realize this, and not fool ourselves into thinking otherwise."

Financial Times: The rise and fall of MySpace. Good read on the corporate side of MySpace post-acquisition.

New York Times: Swan Songs?. ""A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That?s less than one percent of the songs."

Seth Godin: If Craigslist cost $1. "Money creates a sort of friction. In the digital economy, magical things can happen when there is no friction. You can scale to infinity. On the other hand, sometimes you want friction.

If you lead a group that allows anyone to join, for free, your group might be large, but it's not tight, it's not organized to make important change. Commitment slows things down in the short run, but ultimately aligns interests."

The future of CPM advertising, Google's secret sauce and Facebook's future

2009-12-03T00:05:00.000+01:00

A few weeks ago Christian Rudolf did a video interview with me about CPM advertising, Google's system to get its customers to spend more on Adwords and Facebook's ad model. Head over to Disruptive for the six minute interview (in Swedish). Please leave feedback in the comments section at Disruptive.

The interview inspired Christian to do an in-depth video on Google's business system and what entrepreneurs can learn from it (also in Swedish). So if you find the subject interesting, you can dig deeper.

Videoplaza hiring - 10 open positions

2009-12-01T18:44:00.002+01:00

Video ad serving company Videoplaza is looking for ten people (a mix of developers, sales and admin). Please take a look at the openings and apply if you like any of them or tell your friends about the openings.

Please consider helping these organizations make the world a little bit better

2009-12-01T01:13:00.006+01:00

If 2009 has been good to you, please consider joining me in contributing to the following organizations that try and make the world a slightly better place.

* charity: water - charity: water is a non-profit organization that brings clean and safe drinking water to people in developing nations. I haven't contributed previously, but as both Shak and Daniel have repeatedly tweeted about the organization and its cause I've made a contribution.

* Creative Commons - Copyright law needs to adapt to a networked world and Creative Commons is an example of how works can be copyrighted in a way that facilitates remixing and creative use. I think a good example, like Creative Commons, will play an important role in changing legislation over time.

* Kiva - Kiva aggregates microlending organizations and lets you lend directly. Kiva works with local partners who find entrepreneurs seeking loans and manage the contact with the entrepreneurs. As a lender one chooses which entrepreneurs to lend to. Read more about Kiva and the concept of microlending in the blog post I wrote when I made my first loan in 2008. (If you sign-up as a Kiva member as a result of this blog post, feel free to add my e-mail henrik@torstensson.com in the Referred by a friend? field on the sign-up page.)

* M�decins Sans Fronti�res / L�kare Utan Gr�nser - M�decins Sans Fronti�res is a medical humanitarian organisation that delivers emergency aid to people affected by armed conflict, epidemics, healthcare exclusion and natural or man-made disasters. MSF helps people in very bad situations in some of the worst places on earth. Please donate.

* Wikimedia Foundation - Wikimedia is the foundation that runs Wikipedia. Wikipedia, even with its issues, is an amazing thing that deserves support.

How do you improve a startup?

2009-11-26T23:34:00.002+01:00

Glenn Kelmann: Good Question! The Eight Best Questions We Got While Raising Venture Capital. Good questions, not always easy to answer.

Steve Jobs' secret: having a vision, being right and executing amazingly

2009-11-26T23:27:00.003+01:00

Fortune named Steve Jobs CEO of the Century some weeks ago. In understanding why that came to be, watch his presentation of Apple's vision from 2001 (via: Andie):

All over the place, but good reads

2009-11-26T23:08:00.002+01:00

Andie's Log: Nokia N900 experiences and what's in the iPhone usability fairy dust. "A major reason in my view that the iPhone is such a huge success is because Apple found a way to force conceptual simplicity on the right level - basic usage navigating between applications with complex and powerful features is always the same, and something you can teach a person in less than 10 seconds. Behind that, each app can provide as much complexity as it needs or likes, but for the user there is just one basic rule of operation to learn. The rest most people don't even know about, and it doesn't matter. They can still use the device, and thus discover in time more and more things they can do. The overall system model you need to understand to have agency and feel in control of your experience with the device is small, and always the same. That empowers users, and makes the technology invisible."

Chris Dixon: The importance of institutional redundancy. "The importance of institutional redundancy is profoundly more important when applied to the internet at large. The US government originally designed the internet to be fully decentralized so as to withstand large-scale nuclear attack. The core services built on top of the internet ? the web (HTTP), email (SMTP), subscription messaging (RSS) ? were made similarly open and therefore distributible across institutions. This explains their remarkable system-wide reliability. It also explains why we should be worried about reliability when core internet services are owned by a single company."

VentureBeat: Hulu U.S. video streams soar almost 50% in October, Google?s YouTube flat. "The video portal for professionally produced content attracted 47 percent more views over the month. It pulled in about 850 million views in October compared to 583 million views in September. The site?s also stickier: the average user is watching about 20 videos, up from 15."

Jesper �str�m: The 80 dollar Waste of money on Online Advertising. "That is what this relationship is telling us. 80 dollars on advertising, 1 dollar on conversion. We should be ashamed. I say We as I am in the middle of all of that. I want people to spend money on social media, SEO and other activities to draw people to buying their stuff. After seeing these numbers in front of me I am considering dropping the social media and SEO completely to focus my activities on what I am really the best at, namely making engaged people buy stuff."

Wingify: Three effective tips to get started with conversion rate optimization. "1) Test your "Call to Action", 2) Simplify your conversion funnel, 3) Don't let your visitors doubt your business trustworthiness"

John De Mayo: Display Advertisers: De-average or perish, the ad exchanges are here. "In summary, if you buy display advertising, get sophisticated, and get sophisticated fast. Understand exactly what user actions or conversions you associate value with and make sure you or a company on your behalf can correlate this value to every single data point that you or they or the data exchange has on a possible impressions. Those who fail to de-average groups of inventory will be stuck buying the slop, and firms who properly value inventory across a huge number of dimensions (both declared and proprietary data dimensions) will benefit significantly in this change in the way advertising impressions are allocated to buyers."

Silicon Alley Insider: Facebook Cracks Down On Developers' "Sneaky Little Viral Tricks". "All those benign but sneaky little viral tricks that were perfected by the leaders in the space are getting a beatdown from the new Facebook terms.

While the changes will keep Facebook a cleaner and more spam free place, they will also drive app developers to spend more and more directly on Facebook ads.

What are some of the changes? Here are three big ones."

Good reads on running a company

2009-11-26T22:53:00.003+01:00

Both Sides of The Table: Don't Roll out the Red Carpet on the Way out the Door. "In life you only come across A++ players occasionally. In every company I think 4-5 people really make most of the difference in your success. Everybody employed at BuildOnline and Koral was important to me ? don't get me wrong ? but 4-5 were the "core." Ryan was certainly one of them.

My lesson: don't take your superstars for granted. Find ways to Roll out the Red Carpet while they're still in the castle."

Fred Destin: How a great entrepreneur deals with complexity. "1. Oversimplify and execute well. If you make a mistake in strategy you can generally correct it by executing well even if you execute something else [...]
4. Push your team beyond what you and they think they are capable of - they will be more empowered and will be able to complete more on their own if they are reaching for a high bar"

Knowledge@Wharton: Apollo Management's Marc Rowan: 'The Best Returns Follow Chaos'."But the core that we created, the belief that we created almost by accident, was no Chinese wall. The thing that we have done really well as a firm is run the firm without any information blockages. The way we think about our business is that we have a library of information. That library, today, is very prevalent across eight or nine different industries. In those eight or nine different industries, we have partners who have worked 15 or 20 years. We've owned multiple companies, multiple CEOs. We get a tremendous amount of industry information.

One of the sectors that I've mentioned that we are very active in is in the metals business. We own aluminum plants. We own metals distribution companies. We own metals resources companies. We therefore possess not market-based metal information, but unique, on-the-ground, customer flow, spot information about what is happening in various markets. Sometimes we monetize that information by making equity investments for control. Private equity. Sometimes we use our knowledge of that business to make good debt investments. That's the core of our lending business. And sometimes what we do is we blend the two. We see both a trading opportunity as well as an opportunity to run a business that can provide differentiated returns for investors, like a metals hedge fund.

So what we are doing is, we're simply leveraging the information that already exists within our firm, and expressing it not as a private equity fund, or not as a mezzanine fund or as a debt fund, but as a commodities trading fund. You will see us not just grow a commodities trading fund, you will see us build a commodities private equity business around the same capability."

Colin Powell on leadership:

Colin Powell's Leadership Presentation

View more presentations from guesta3e206.

Zynga passes 100 million unique users, poker chips the main revenue driver

2009-11-24T00:43:00.006+01:00

Just shy of three months ago I wrote that Zynga didn't have 100 million unique users. Now it's time to change that statement as Zynga has announced that it has 100 million unique users of its games.

Zynga also announced that more than one million users pay real money for virtual goods each month, indicating a conversion rate in the 1.0-2.0 % range. If the rumors of Zynga attaining more than $200 million in revenue in 2009 are correct, monthly average revenue per paying user would have to be $10-20. That is a high number for games like Farmville, Fishville and Caf� World. Given that those three games were launched in the second half of the year, they didn't generate any revenue in the first half essentially doubling the monthly ARPU needed to reach the annual revenue number.

The only way a $200 million revenue number make sense to me is if Zynga Poker/Texas HoldEm Poker is the main revenue driver. Zynga Poker has been around the entire year, it currently has almost 20 million monthly players (it's the seventh largest Facebook application, i.e. BIG) and selling poker chips is a business that works pretty well online and can drive exceptional ARPU.

Stardoll looking for front-end developer (employee or consultant)

2009-11-19T16:36:00.003+01:00

This is almost turning into a job board, but Stardoll is looking for a strong front-end developer (employee or consultant) starting immediately. Requirements are knowledge of HTML/XHTML, CSS, JavaScript and preferably jquery. Somewhat longer list of requirements (in Swedish):

* Mycket djupa kunskaper om HTML/XHTML, CSS & JavaScript. G�rna erfarenhet av jquery.
* K�nsla f�r UI/design.
* Goda kunskaper i svenska och engelska, b�de i tal och i skrift.
* Erfarenhet av utveckling/design av communitysatsningar �r meriterande.
* Erfarenhet av java och/eller php �r meriterande.
* Dina personliga egenskaper �r teknikintresserad, ansvarstagande och flexibel.

Please contact me at henrik@stardoll.com.

Looking for a project manager to join Stardoll

2009-11-18T11:18:00.003+01:00

I'm looking for a great project manager to join Stardoll in Stockholm. Web experience is a must, technical knowledge is an advantage. Contact me for more information or with potential leads.

Let's buy a company

2009-11-09T20:01:00.003+01:00

* Electronic Arts to acquire Playfish for $300 million plus $100 million earn-out
* Google to acquire AdMob for $750 million
* Skype founders end up with 14 % of Skype in exchange for IP rights and cash