Silly story reporting that Facebook has cooled because equity sellers failed to sell at a $90 billion valuation or a 80% increase (240% annualized return) in valuation only 4 months after the Goldman/DST investment at a $50 billion clip. Dumb, at least with the facts stated in the story, but perhaps these are the story memes that make investor reexamine the Facebook thesis. See prior posts – here, here, here and here.
Practical advice on buying a domain name from AVC. This is the most useful insight for me:
“A good domain name is short and memorable. It doesn’t need to mean anything. Etsy is a good example of this. The word etsy doesn’t have any meaning in the english language. But it is short, memorable, and fits well for a handmade marketplace. As a marketing person once told me “find a name that means nothing and inject your meaning and brand into it.”"
There is also a contribution in the comments with great advice on how to negotiate a purchase of a domain name, and the dynamics of the negotiation.
One Internet business model mega-theme, that I discussed in a prior post, is the Internet as a tool to shake up established markets by disrupting existing methods that consumers use to manage search costs.
Another mega-theme is the Internet as an evolution of better (or at least more novel, fun, or cool) tools with which individuals can express themselves. I can chart a chain of tools from when I first started using the Internet: interest-based UseNet groups, listservs, GeoCities and other “create your own website” tools, blogging tools, YouTube, Facebook and social networking sites, Twitter, Tumblr and microblogging sites, photosharing tools etc. When consumers find a better way to express themselves, whether by finding more convenient ways to share and publish content, or better reaching audiences, customers flock to these sites creating valuable properties for entrepreneurs. In particular, the recent “expression” tools have made expression easier and easier. When you think about the limited opportunities for most folks to have a meaningful megaphone pre-Internet, and the degree to which people take advantage of their ability to express themselves now that they have them post-Internet, it is easy to understand the value-creation opportunities that the Internet has opened up, as there is a whole new level of human expression that has been enabled.
Facebook launched its GroupOn/LivingSocial daily deals competitive offering in a few markets. This is going to help answer two questions at the heart of two of the dominant models on the Internet today. First, it’s another test, like Messaging and Places, to see whether the Facebook social graph conquers all, justifying its “Jack and the Beanstalk” valuation. Second, it’s a great test of the hypothesis that GroupOn’s growth and margins are unsustainable, because of the lack of entry barriers. (Rumors are that Facebook is taking a smaller cut from merchants than GroupOn, so it will interesting to see how quickly this puts pressure on GroupOn’s pricing power.)
OK, Chris Dixon, this just rocks. Read the whole post, but here is an excerpt:
“You’ve either started a company or you haven’t…I don’t care if you succeed or fail, if you are Bill Gates or an unknown entrepreneur who gave everything to make it work but didn’t manage to pull through. The important distinction is whether you risked everything, put your life on the line, made commitments to investors, employees, customers and friends, and tried – against all the forces in the world that try to keep new ideas down – to make something new.”
It’s about finding out what you are about, awakening the beast within, seeing what kind of horsepower that you have…and you cannot figure out these things unless you are the one jumping and exposed. This post is a great reminder of why we need to take the leap.
In my experience with Twitter thus far, what I have found most useful is the sharing of links from users who I don’t know but admire (Vinod Khosla, for example) to interesting items that they are reading or have written. A person’s feed provides an insight into the person’s mind and a compass to interesting reading.
I find less useful most of the random chatter that people post, however much I admire them. Most people are less witty in their observations than they think! There ends up being too much “clutter” to sort through, which is perhaps the greatest frustration, and for my use case, means that I “unfollow” accounts that I would otherwise follow, where it appears to me that the ratio between interesting and uninteresting content is not worth it to follow in real-time, despite the occasional killer post.
However, even where the content created is too much to manage in real-time, it can be a tremendous resource to look back on such posts even when I don’t follow an account when I have a specific interest that I would like more information on. After the fact, I may want to get a sense of the Twitter universe’s opinions on an event or a movie or a recent issue. It seems to me a tremendous use case as a search database — an alternative or supplement to other search engines. For some issues, particularly recent or current issues, I think the utility of the results may be better than core Google. Given that utility, I would love to know what if anything Twitter is doing or has done in “paid search.” Isn’t this a natural revenue model to monetize by either jumping into search in a more serious way and complementing it with paid search or selling to a search engine who can monetize the content?
Twitter and its users have created a stocked pond of content; it’s time to fish in it.
I didn’t know who Joi Ito was until reading about his appointment to head the MIT Media Labs. Now he’s someone I want to learn more about. I am fascinated by folks who can design their lives to maintain and chase their curiosity, engaging in career discovery instead of slavishly following a playlist, and Ito sounds like one of these few folks. In his career, he has been a self-directed learner, entrepreneur, investor, activist, head of a non-profit, and now academic lord, and many others things in many places along the way. I like the quote below:
“You embrace serendipity and you pivot as you go along this longer term arc. That’s the way I have lived my life. I’ve jumped around in terms of career and geography.”
On Ito’s leadership qualities, Nicholas Negroponte says:
“Joi is very good at enabling others. I’ve never met a 44-year-old who is able to enable others in this way. Most people who are at that age are into themselves and their career.”
Fred Wilson had a post a while ago describing how Yelp helped him find quality coffee and dining on a trip to LA, allowing him to avoid chain store coffee and food. He applauded Yelp’s ability to provide consumers and smaller establishments a way to bypass the scale advantages of big brands, allowing them to compete for customers who in another era would not be able to find the smaller guys.
This illustrates a much larger point about the power of the Internet. By providing a way for consumers to find a fuller set of providers of services or products, it allows them to bypass or neutralize some of the usual shortcuts that we, as consumers, use to keep our search costs under control, such as reliance on often stale brand names and “reputations.” By doing so, Internet business models can revitalize competition across markets.
When search costs are high so that consumers have to rely on short cuts to make decisions, they miss good alternatives. There is also a tendency for the brand name to get lazy, fat, and content. When consumers come to you regardless, suppliers that have been successful start cruising and going through the motions in their business. This goes far beyond coffee and restaurants; it is true across consumer products, b2b products/services, and in professional services. Through giving the consumer the power to find information through a search engine, through sites that collect reviews on products or services, and through information passed via various social tools, the Internet can shake things up. And it provides infinite opportunities for entrepreneurs to shake up the delivery of products and services by finding creative ways to intermediate between consumers and suppliers, providing platforms to spark competition between suppliers, help the consumer find better value, and enable overlooked or new suppliers to reach new consumers.
Examples are sites like Citysearch (local reviews), Yelp (local reviews), TripAdvisor (travel reviews), Ebay (small merchants), Etsy (small craft merchants), GroupOn (local deals) and indeed many other internet businesses that do this in one aspect or another. But as a basis for new business models, the insight that existing marketplaces can be disrupted by bringing attention to alternate suppliers has so much farther to go. For the entrepreneur, it is one helpful way to conceptualize a business idea.
In the wake of the revelations of data capture by Apple and Android phones, there is an amazing article in the WSJ about the enormous databases of information collected from tracking cellphone usage. The article is eye-opening in terms of the type of data that cellphones can track (locations, calling data, messaging activity, search requests, online activities, movements, people proximity, light levels, rotation, direction) and the range of potential questions that the data can be applied to (sickness, stock movements, political trends, drug marketing, health care decisions). The number of records collected in databases is also staggering. The article refers to a database of 100,000 European mobile users with 16 million records of cell data, time, and position, available to researchers at Northeastern; AT&T has its researchers using records of hundreds of thousands of subscribers in NY and LA to do research on commuting; a database of location and billing data from a billion calls in Belgium; and Verizon and Sprint (at least) provide “anonymous” location data to a company called AirSage so that it can track millions of cellphones and billions of data points to generate live traffic reports.
The power and utility of these data sets is fascinating and not so surprising when one thinks about it. What is surprising is how this appears to have fallen through the cracks of privacy concerns, particularly given the huge uproar over behavioral advertising and proposals such as Do Not Track. In comparison, the wireless databases seem much more threatening to privacy and the fact that companies have been mining the data and sharing them with others without oversight or debate is mindboggling.
To summarize and simplify what I know about privacy law, the fractured regime in the US focuses on a concept called personally identifiable information (‘PII”). PII is data such as names, phone numbers, email addresses, social security number or other information that directly links to someone’s identity. If something is PII, then there may be potential restrictions or duties related to the collection (by an authorized party from users), use (by the authorized collector), disclosure (sharing the PII with a third party), and access to the PII (by the user). If something is not PII, there are probably no such duties right now, but this is something that is being intensely debated. The problem is that the more data you collect and the more powerful are the tools to analyze the data, it is possible to take a collection of non-PII data and link it back to an individual user. This has been shown again and again in the behavioral advertising context and according to this article, it’s also been shown in the wireless context (unsurprising given the robustness of the databases).
There are a lot of good reasons for creating systems that encourage users to give consent to sharing their info, including in the potential beneficial research that can be done and, as in the behavioral advertising context, to enable great services that are supported by ad revenue and are otherwise “free” to users. That said, society is struggling through these issues on the behavioral advertising front and it is amazing that this data on the wireless front has been collected and shared with researchers and companies with so little scrutiny by society to date. This will, as it should, spark a serious debate.
Interview with Chris Cunningham of Appssavvy from the Corner Office series with some great thoughts on looking forward rather than backwards when hiring and after hiring, setting a vision and importantly letting team members understand how their involvement will be meaningful in achieving that vision:
- “We look for people who really want the job. And that sounds really simple to say, but some of the most important people in the organization who shine and are really transformative people were the ones who were almost jumping out of the chair, saying: “I have to be here. I’ve been studying this company. This is all I’ve ever wanted. And if I’m not here, I’m not going to be happy.” Those individuals took that extra step as well to follow through after the interview. We watch how quickly the person follows through, and how much thought they put into how they want to contribute. But how badly do they want the job — I can’t stress that piece enough.
- “Their résumé, I believe, is one of the least-valuable components of an interview. For me, primarily it sits on the desk as a reference point, and to potentially make that person feel comfortable that I’m a professional C.E.O. But the truth is, I’m not interested in the résumé. I’m more interested in understanding the time that the person took in understanding our business, product and the industry landscape.”
- “It is the same theory that I believe in today with Appssavvy, which is to be really clear about the vision and how you’re going to get there, and tell people how their involvement will be meaningful. The more you can make people feel that they have a hand at the wheel, that they’re driving something, the more that they’ll participate and own it like you own it.”