August 28, 2008
A few weeks back on the weekend of August 2nd I spent a few days in Chicago with friends. On Friday we attended the Chicago Cubs vs. Pittsburgh Pirates game at Wrigley Field and then spent the evening at Lollapalooza. Unfortunately the Cubs lost despite all the “it’s gonna happen” signs displayed on high.
That afternoon we saw The Raconteurs on one of the big stages. They were pretty good and pulled a huge crowd. I thought their music was a nice combination of indy creativity and mainstream appeal but they certainly looked wild. It was a fun show overall. That evening we saw Radiohead on the other main stage, with a crowd literally eight football fields in size. The visualizations with lights above the stage and on the display screens was pretty cool but the music was slow and from a combination of the heat, humidity, and the dragging on and on of each tune the crowd thinned out early. We left with about an hour left to head into town for a bite to eat.
On Saturday we saw Dierks Bentley in the afternoon and then spent the rest of the day before dark preparing for what was sure to be a blowout show that evening in Rage Against the Machine. We lined up with a packed crowd about one and a half hours before show time, about 60 “rows” back from the stage. We were at the top of a very small bump in the lawn which gave us a great vantage point and made keeping track of our original standing easy as the crowd forced us to migrate throughout the evening. Everyone was standing in a crowd that was easily over 200,000 in total. Walking without people in your path from the front edge of the stage to the back of the lawn would have probably taken 5 full minutes at a fast clip and the width was easily 200 yards.
MTV.com put up a nice review of the intensity and urgency of the situation that began shortly thereafter. The show started with Testify and Bulls on Parade and as soon as the first note screamed out the surge of the crowd pressing forward tightening everyone in around us. The group didn’t even make it to the end of the third song in the set before they pulled the power and shut the music down in an attempt to calm the crazed crowd. The intensity was incredible and the tunes brought me back to listening to Rage and similar genres while cruising down the ski hill with my headphones on in the cold of winter. It’s certainly the type of music that gets you excited and that’s what it did to the crowd.
I shot some video of the band pleading with the crowd to take several big steps back and to calm down which they did a total of four times throughout the night. We joked that it was like Rage had an insurance policy they were worried about as their pleas seemed more like the demands of the man than their honest intention. At one point the band even put one of their security team members on the microphone to plead for people upfront to thin out to prevent injury. Our jokes were probably as much out of jest as they were out of nervous concern for our own safety as kids nearby started shoving and punching circles into the crowd. The best indication I saw all night of the damage going on up in front of us was a husband and wife and their probably 14-year-old son holding hands and rushing in a single-file line while pushing hard to escape the crowd just minutes into the show. Their eyes said it all, pure panic.
Overall it was one heck of a show and one heck of an experience but I got what I wanted out of it. Next time I’ll be there with similar intensity but probably at a vantage point a few more feet back from the stage. Rock on!
August 28, 2008
Since 2003 I have been following the local and national venture capital market from a distance. In the early years because of the possibility of using venture capital funding to further our growth at iContact and more recently as a source of growing capital and helping other North Carolina businesses along their paths to success. Since 2006 I have felt like venture capitalists in the Triangle area of North Carolina have been slowing down. A number of the funds that were actively pursuing technology investments 2-3 years ago seem to have gone silent.
Although my impression could just as likely be from a shift in their focus from information technology to bio-technology startups as I live entirely within the web tech startup world these days. I do know that most of these funds in North Carolina claim to have expertise in assisting both info-tech and bio-tech companies and most employ some sort of credentialed academic with a background in chemistry or biology to assist them in evaluating deals.
I read an article this evening in USA Today covering the new challenges of the venture capital industry. They mentioned the new landscape of startups that are now located all around the globe and highlighted DFJ’s strategy of putting small offices everywhere to increase their local-touch coverage. They also mentioned that the lack of venture backed IPOs in the second quarter of 2008 is further discouraging VCs and their limited partners, the people who give them money to invest.
As a few experts mention, venture capital funds are toiling with a strategy of long term growth that requires them to put more money over more time into their portfolio companies which means a few things. First, they won’t be expecting to get cash back from the proceeds of the sale of their companies quite as fast as they’ve expected in the past and second, with more money going into their companies assuming a stagnant or falling average fund size they will be forced to invest in fewer companies overall. This will of course result in them being even more stingy in their review of potential investment deals than before because they’ll expect to live with them longer and to have fewer alternatives in their overall portfolio in case things turn south.
The number of VC firms was also mentioned, with the total since the dot-com era being nearly 1,000. It’s incredible to consider the challenge that most entrepreneurs have in raising VC money considering the sheer number of opportunities available to them. Although, if you were to narrow this total number down by region and by specialty (information technology, bio-technology, clean energy technology, etc) and by the stage of company typically invested in (concept, pre-revenue, early revenue, expansion, long-term growth) I bet you would get a much more realistic picture of what we’re all up against as entrepreneurs and that is a small handful of VC funds within a two hour flight that have a clue what you’re talking about when you make your pitch. I’ll hold judgment on who’s fault that is
The also article took note of the emotional result of the challenges that VCs now face stating that “[n]ot surprisingly, venture capitalists are gloomy about the near future. ” It mentioned a survey done by University of San Francisco entrepreneurship professor Mark Cannice among VCs in the high tech corridor in California and that “[t]heir confidence last month fell to record low of 3.0 on the 5-point scale of the Silicon Venture Capitalist Confidence Index.”
With the economic uncertainly of the moment right now is a great time to get down to work building a great business behind the scenes. Looking for investment capital right now is going to be a challenge because VCs have to be very very careful where they place their bets. Build for the long term and build for the type of profitability that will allow you to fund your own growth. On the flip side, if you’re a growing company that is profitable or that has profitability in sight now may be the perfect time to raise venture capital under great terms. Firms that are traditionally more early stage investors are looking now to make investments in slightly more established companies that offer them a higher chance of survival at the cost of missing out on some tiny diamonds in the rough that might have provided them a 10X or greater return over the mid-term. As a growing, cash-flowing company focus on proving the predictability of your revenue streams and don’t lose sight of the fact that VCs need your growth in their portfolio. But also keep a version of your plan hidden in your top desk drawer that gets you through to IPO without any additional outside equity investments. If the VC market crams down any further in the next few years hunker down may be the name of the game for a while.
August 17, 2008
Facebook’s November 2007 launch of Beacon, a new advertising system meant to allow Facebook users to share information on-site about what they’re doing across a number of different properties elsewhere on the web, has already been named to the list of Biggest Tech Flubs of 2007 but the pain Facebook has suffered didn’t end with the immediate fallout of users and the general media smear that ensued.
Recent class action lawsuits now mention Facebook and a slew of Beacon advertising partners including Fandango, Blockbuster, Overstock.com, and Hotwire among others according to TechNewsWorld.com. So not only did Facebook get themselves in a lot of trouble they brought a group of overzealous advertisers eager at the opportunity to insert references to their brands within Facebook users’ profiles along with them.
In response to the backlash Facebook quickly rolled out a new version with much better control given to the user, ie: defaulting this type of sharing to off and allowing users to turn it on if they prefer. Clearly their mistake was not in the development of this new functionality but instead in their act-without-permission approach in the implementation. Simply put, using data you have about your users within a social network without their permission is social network suicide. Users must trust that the system will obey their own requirements for how they would like their information handled, without that trust the user will not stay engaged or involved.
I find it very interesting that Beacon is still such a hot topic nearly ten months later. But I’m not surprised because I don’t believe that they’ve really buttoned things down all that well when it comes to external parties pushing user data back into Facebook. Just a few weeks ago my friend Erik (real world friend and Facebook friend) went over Fandango.com and purchased movie tickets to the new Batman movie. He says that he was logged in to Facebook at the time of his order but that he doesn’t use the same email address as his user name at Facebook as he does at Fandango. Within minutes of his Fandango purchase an announcement of the purchase and the name of the movie was inserted into his Facebook profile mini-feed. He also claims that he has never enabled anything that would allow a third party site like Fandango to push information into his Facebook profile.
Facebook has commented regarding the privacy of their users “that it only tracks and publishes data about their purchases if they are both logged in to Facebook and have opted-in to having this information listed on their profile.” Although there is now information from researchers at CA that Facebook is tracking information about its users from third party sites even if they have opted out of Beacon. I wonder if Facebook is being tricky in their wording when they say “tracks and publishes.” Because of the ‘and’ another logical iteration is that they may track or they may publish (although publishing first requires tracking so this doesn’t make sense) data about their users’ purchases if they are logged in to Facebook but have not opted-in to the display of this information within their Facebook profile. It appears that CA has proven technically that Facebook is tracking user behavior across partner sites without user permission and from my friend’s recent example it appears that they’re publishing this information without user permission as well.
It’s really hard to imagine that Facebook is saying that they’re not tracking and publishing this information without user permission and that they’re blatantly doing both because publishing means that the data will be visible within user profiles in plain sight where it will obviously be noticed and reported (remembering that the point of these call-outs was to get third party advertiser/partner brands noticed in the first place). This would most likely lead to widespread complaints. But it seems possible that Facebook is tracking user actions via third party partners without user permission and that they’re making the user permission settings that control the usage of this information somewhat confusing which is causing some of their users to approve the display of this information without their knowledge.
August 17, 2008
I took a few minutes this afternoon to play around with the new beta of Google Ad Planner. After logging in to my Gmail account, which I rarely check, on a whim earlier today I saw an email with subject “Welcome to Google Ad Planner!” How exciting… although it was dated July 14th. The good news was that the link to begin using Ad Planner inside the email was still active and within 30 seconds I was on my way.
Here are my impressions after playing for about 15 minutes:
- It takes a good 15 minutes of playing around with the tool to really understand what the heck you’re doing (I spent a few minutes just selecting and unselecting things to see what fields changed in result). Once you figure it out you realize that it’s really simple. Any time you need something from the tool you’ll be in for 5 minutes and then on your way to do something with the list of sites you’ve built.
- The beta does feel like it’s holding a bit back. Google is known for their ability to take big data sets and understand what things mean in human terms and so far the tool allows you to select and restrict data sets in a pretty direct way. It sort of feels like an Excel template wrapper built on top of a linear data set. But this isn’t bad, just not earth shattering. They do mention that the category that each site is placed into is determined by automatic tools. I learned this after digging for more detail on why gigaom.com, Om Malik’s technology blog, was placed into the ISPs category. It looks like the ISPs category includes mobile technology which is a direction that I know Om is leaning these days but a quick peruse of his homepage turned up one out of six posts on mobile and a single category heading on the topic.
- This tool is going to be great for a very small subset of people (a set of people which Google Ad Planner can likely tell you more about)… what other sites do people who visit Google Ad Planner also visit?
- The key intuition you can get from Google Ad Planner right now is really this: assuming I know a site that I convert a lot of good visitors from now (likely the result of data I’ve collected over time from a CPM campaign) I can use this tool to find other sites that get similar visitors. The composition index score is a number made of pure magic that when higher numerically represents a higher correlation to sites I’m using to baseline my audience. In English Google says it is “how concentrated your audience is on a specific site relative to internet users within the country you have specified” and in Googlish (the language used by the smart people who work within the Google empire) it “is calculated by dividing the site’s reach into the audience by the percent reach into the audience on the internet within the country you’ve specified.” Holy guacamole. I’ll take your word for it Google. I think that sentence needs some parenthesis in there, order of operations?
- The secondary intuition you can get from Google Ad Planner right now is a list of sites that contain a high percentage of visitors within a range of country, gender, age, education, and household income. Gender and country are probably less of a range than the others.
Just for the heck of it I spent a few minutes configuring the tool as if I was theladders.com, a job site for $100k plus jobs, looking for people who I figured would be most likely in my target audience using the filters along the left side of the interface. Interestingly opentable.com had the highest composition index among well educated, high income, middle-aged men and women. Other not so surprising sites included Barrons.com and Williams-Sonoma.com. DrudgeReport.com and JetBlue.com also made the list… I’m learning more about how the wealthy stay that way. The resulting list is a good representation of the secondary value I mentioned above.
Now for the key value, I entered a site into the online behavior list that I figured would be a good source of prospects for theladders.com. I guessed msnbc.com. The real value of course would be in using a site that performs extremely well among real online advertising campaign data from theladders.com. Anyway, the list was quickly revised to include a large number of sites I’m not familiar with. I had ever heard of four out of the top twenty results. I think that’s the point of Google Ad Planner. These are not sites I would have otherwise added to my online campaigns and they have a good concentration of people that are similar to my best online prospects. Value delivered.
It is worth mentioning that I am making an assumption about the value of the ‘online behavior’ comparison which is that I’m assuming Google knows something more about each site than the demographic details it lets me filter by. I figure they have online user path information that shows visitors surfing around the web and when these sessions include two or more sites they draw a correlation. This correlation is of course stronger than any comparison of age, gender, income, etc because it represents what people actually do online, which if you know user-reported data you’ll know is much more valuable than what a user directly tells you. Other than just figuring that this is how they do it, they also don’t adjust your demographic selections when you enter a site or list of sites you want to compare visitors against. If they were just scoping your search to the demographic data of the sites you enter I figure they would go ahead and realign your demographic filters to match your site list. They still could just be doing this, I don’t think so though.
Anyway, back to the data in action. For first time advertisers the value here comes from the progression from the demographic matching list to the site comparison feature. First you start with a list of sites with a high density of visitors that fit your basic demographic requirements and you run some online campaigns to see which sites perform the best for you. A few hundred thousand bucks over three months and I figure you’ve got a great list of sites that are performing the best for you. Then you come back to Google Ad Planner and enter your original target demographic filters (or maybe don’t, there is interesting value here either way) and then add your list of online behavior site filters. Now you get another list of even more targeted sites that you can put into your online advertising campaigns. Assuming Google’s data is good pretty much all of these sites should outperform the original list of sites you pulled from Ad Planner. If so, value delivered. Some sites will ultimately perform better than others and your ad management platform will take you from there. For example Doubleclick with pixel optimization implemented will automatically allocate your budget in the best places as the winning sites take statistical significance over the rest, just like it did with your original list of demographically correlated sites.
The process I mentioned here involved “go plug the list of sites into your online advertising campaigns” twice which is why Google created Ad Planner and precisely why the export button on the page has an ‘export to Mediavisor CSV’ option conspicuously presented. Mediavisor of course being Doubleclick’s online advertising platform (owned by Google). Back duly scratched.
August 8, 2008
I think I’ve figured out what Delta has been working on instead of doing a decent job of providing service to their customers and taking the stress out of travel. As a follow up to my post from June 19th Delta has announced a partnership with Aircell that will soon allow me to “surf the friendly skies” as it was said. They’re considering a cost between $10 and $13 per flight for broadband access throughout. I guess it doesn’t really matter if it’s wireless or wired broadband service to the laptop because at some point along the transmission… it’s gonna be wireless. Also the cost of running wires throughout the plane to each seat would probably be ridiculous. I have a hunch that making custom changes to standard airliner seating is a bit pricey.
A current description of the service is as follows “The “Gogo” system will let customers traveling with Wi-Fi enabled devices, such as laptops, smartphones and PDAs, to access the Internet, corporate VPNs, and corporate and personal e-mail accounts, as well as SMS texting and instant messaging services.”
I also wish they would charge a bit more for it considering the concerns I mentioned about people using broadband IP phones via their computer to conduct conversations while in flight. Maybe the latency will prevent it, I have yet to see any information about real throughput and latency numbers for this service in action although they must exist. If it is fast enough for IP phone usage I could take my FeatureTel Cisco IP 7940 Series phone with me and when you called me at my local 919 area code desk number it would actually ring in my lap at 34,000 feet. If this is the case it shouldn’t be long before IP phones get squeezed down to mobile phone size as my Cisco desk phone would currently fill up my entire lap. Almost more than email and web surfing I’m looking forward to chat from the air. That’s gonna really make on-the-go productivity a reality.
Next thing to consider, porn on a plane? I guess it already comes on DVD and I haven’t ever seen it on a plane yet so maybe it isn’t a concern.