We are still in the early days

My guess is that most people that read this blog consider themselves to be early adopters. Many of you have a blog of your own, use Twitter and/or Facebook, own a smart phone, love tinkering, hacking and trying new things out.

There are more early adopters than ever. In fact that word “early adopters” may not even be an accurate word anymore. But I’ll leave that for a future post.

But we all know plenty of people that don’t have a blog. They don’t use Twitter. They signed up for facebook but aren’t active. They dont’ share their lives online with people they know and don’t know why they should share with people they don’t know.

And even though companies like Facebook have over 250million worldwide users, we all know at some level that we are still in the early days of all of this. That is humbling and exciting at the same time.

In the past week I had two recent experiences with folks that either don’t understand or simply don’t care for the world of facebook, twitter, blogs and social media.

First story:

This weekend, we had a number of old college friends stay at our place for the weekend. It’s an annual tradition. They live in CT and NY. Three couples and their kids. None of the parents (all of us are 40yrs old) use social media. They don’t work in tech industry. They had lots of questions about Twitter and why they should use it. I told them why I started using Twitter and why I use it everyday. My wife, @laurensabet, told them why she uses it and how much she would love to see them on twitter. Even after describing it to them in detail and showing them how it works they weren’t really convinced.

But they were good sports and wanted to try it. So at the kitchen table I helped them set up a twitter account for each one of them. Some of them wanted to keep their tweets private, others were okay with the public default. It was an enlightening experience for me to see them react and ask questions. I hope they get into it. We don’t get to see them often and it would be wonderful to hear about their daily lives on twitter in addition to the monthly phone calls & annual gatherings.

Second story:

I was at a fantastic restaurant recently. I’ll leave out the name of the place to protect the innocent. The owner is a very talented person. Smart and gifted. He told me that he doesn’t like blogs, facebook, twitter, yelp, etc.  His concerns:

1. Competitors could say bad things about his place online anonymously.

2. One customer with a big online social following could  give his place a negative review and drown out the positive reviews by the majority of happy customers.

3. He liked the previous model where restaurant reviews where done by experts in their fields.

He had other issues with social media but those were the big ones.

My response:

1. Customers and competitors are online so the train has left the station. There is no turning back.

2. There are benefits of embracing the social web with more voices in the mix than a limited number of experts.

But I was enjoying the meal and I didn’t want to get into a full debate especially since he was so nice to us and was passionate about his views.

I believe there are plenty of things that restaurants could do to benefit in our connected world where all users are publishers/reviewers/critics/customers… all at teh same time.

Today most/all restaurants have a website. You know what it looks like. There is a menu, along with some professional photos of the restaurant and some food shots. Maybe a history of the place along with a bio of the owner.

If I owned a restaurant I would embrace twitter/facebook/blogs and do much more. In no particular order:

-I’d share the behind the scenes of the place. Just got a new delivery of bread. Take a photo and share it. Just hired a new bartender? Same. New candles? Same. New espresso machine. Same.

-I’d tweet at times about what’s going on the restaurant right now. Someone is having a birthday at the bar. One of the regulars just walked in. New dessert tonight. Special items on the menu. Things taken off the menu. Someone just proposed to their fiance and everyone is clapping in the place. These restaurants are vibrant and alive communities in their own right. They are not just a place to eat and pay your bill. Let people know what’s your place is really like!

-I would be all over twitter search to see what people are saying about my place. Have a thick skin but pay attention. Jump into the conversation. Let them know you care because you do.

I’m sure there are better ideas out there. I’ve never owned a restaurant and I’m sure it’s way harder than I could possibly imagine. But that conversation I had with the owner was also very helpful to me.

I came away with a great deal of “food for thought” (pun intended) and it also served as a reminder that we are still in the early days of all of this stuff.

Sonos

We have been loyal Sonos users since late 2006.

We originally purchased Sonos to stream mp3s from our server throughout the house. Over the past year they have released a number of updates including support for Rhapsody, Napster and Last.fm.

The strength of Sonos is really the ease of installation of a multiroom sound system. It just works. (I think it’s overkill if you only want audio in one room. It’s also not inexpensive). I would say the original Sonos remote control was probably the weakest link though.

Last fall, Sonos shipped an iPhone app. The touch screen interface made the app a joy to use.

Earlier this week, the kind folks at Sonos sent me their latest controller. It’s a color, touch screen controller with dedicated buttons. Adding it to my home system was a breeze. This remote is awesome. It’s even better than the iphone app. Navigation, search, zones, everything is easier.

I just fell in love with our Sonos system all over again.

Next on my wish list: it would be wonderful if Sonos went open source or created an SDK/API. Imagine if you could build apps for it. I’d love this controller to work with Boxee for starters.

That would be dreamy.


Thoughts about the App Store/FCC/Google/ATT thing

Last week Apple rejected the GoogleVoice app.

This created a huge negative response from users.

And now the FCC is looking into it.

Folks are cheering on the FCC with this investigation.

I’m often guilty as charged for my liberal and progressive tendancies. But I’m not really into government intervention on these types of matters (the tech industry).

Even in the late 90’s, when Microsoft was feared and dominant, I wasn’t supportive of the DOJ efforts to break Microsoft apart or force them to decouple the browser from Windows. I (rightly or naively) believed that tech innovation moves faster than the government could predict. Today, Microsoft is a very different company and not because of regulatory oversight. Innovation won out. Apple is thriving and Microsoft has stronger competition than ever before at the OS, browser, server and app levels.

The wireless industry is a different matter though. Its not possible or practical to have the same level of innovation at the physical network level. We essentially have 4 carries in the USA with VZW and ATT as the dominant networks. They often cut exclusive deals with handset manufacturers. The business model is clear: attract subscribers with new subsidized appealing handsets and lock them under 2 year contract. Right now you can only get the iPhone on ATT and you can only get the Palm Pre on Sprint.

And on the iPhone there is only one way to install apps – the iPhone App Store.

So now FCC investigates. Was the Google app rejected because of Apple or ATT or both?

Look, here’s the thing. First, I know Julius Genachowski, the head of the FCC, personally. He’s brilliant and a very good guy.

But I’m not so sure about the government getting involved here.

Ulimately I believe in innovation vs regulation.

Already prominent iPhone developers are blogging about their frustrations with Apple. Steve Frank has had enough & now moving on to the Pre. Marco isnt happy either and makes some great points on his blog too.

And the market keeps moving faster and faster. The Palm Pre is an amazing phone. The new Verizon Tour is so good that I’m noticing a ton of people that carry both the Tour and the iPhone at the same time (i’m thinking about making that move as well.).

A year ago there wasn’t an app store for the iPhone. Hackers jailbreaked the iPhone and showed everyone the opportunity. Shortly after the App Store was born.

I’m guessing that Apple App store is going to open up for all apps soon. But it will happen because users and developers are demanding it not because the government requires it.


Thinking about education

It wasn’t long ago when conventional wisdom believed that building software to sell into the education market was really really hard (at best). School budgets are constantly under attack, infinite sales cycles, suboptimal IT infrastructure & connectivity, teacher training…the list goes on and on.

And frankly, many of those issues still exist.

But there are new models & technologies emerging that break through those old rules. The web once again shows us not to paint with a broad brush. So let’s not count out education either. Education is a critical area with enormous potential for innovation.

I’m excited about all of the possibilities. Few thoughts:

0. Impact of open source (software, courses, textbooks)

1. New learning models (peer-to-peer, virtual worlds, gaming, distance learning, online degrees)

2. New platforms (ebooks/kindle, iphone, cloud, collaboration, digital music, art)

3. Better informed parents & students (peer produced reviews is starting to happen with college and graduate schools – we need more of this and also would love to see it at the middle school & high school levels. I’ll leave it for another post how i picked my high school and college as a kid)

4. New types of funding/fundraising/financing (ie cMarket, Donors Choose)

(it’s just after midnight and I’m starting to fade – pls pardon me as I’m sure I’m leaving out important areas. Please add to this list in the comments and I’ll update this post later)

Many of these new models and businesses do not require a sale to the school or the state. They go direct to the parent and/or the student. That’s a big change and we’re going to see more of that.

Some of these new models are freemium based which make it dramatically easier for the teacher and schools to support.

And some of these new models may require a direct sales effort to the schools. But even that is getting better as everyone involved (teachers, administrators, students, parents) has the motivation to improve our current system and try new things. Plus, more students have computers and schools continue to improve their connectivity.

I’m delighted that our firm, Spark Capital, made an investment in 8D World which is our first portfolio company in the education market. We look forward to making more investments in the future of education so please let us know if you are working in this important area.

Introducing Sensobi

I’m very pleased with the group of new startups at TechStars Boston. This is the first summer and these entrepreneurs are working like crazy building their products.

Brad Feld cofounded TechStars and was nice enough to ask me to join as a mentor and investor. I’m very glad I did.

Earlier today, Brad wrote about one of the TechStars Boston companies – Sensobi. I’m really proud of how much Ajay & Andy have accomplished in such a short period of time. They are focused and are extremely passionate about their product & the opportunity.

Sensobi calls themselves a better address book for the blackberry but I think that is an understatement. I think they are also making a dent in the broad inbox problem that we all face everyday.

Here’s a link to our invite code so give Sensobi a try (blackberry users only for now).

Don’t paint with a broad brush in this downturn

We are still in an marco economic mess.

I’m not going to pretend to predict when we will get out of it.

But there is something very familiar about this down turn as the last downturn.

There are some folks (VCs, press, bloggers, entrepreneurs, bystanders, critics) that have decided to paint with a broad brush.

That happened in the Web 1.0 crash.

In those days, some people said generically:

1. Too much money chasing too few deals. And they got out of this startup ecosystem business. Thankfully many stayed in the game or jumped in.

2. Startups can’t succeed in the consumer electronics space. Thankfully Sling & Flip didn’t listen.

3. Ecommerce is dead. Thankfully, Netflix, Amazon, Zappos and others didn’t mind those naysayers.

4. Free is dead. Thankfully TripAdvisor, Skype, MySpace, Facebook, Google and many many many others ignored them.

5. Open source is dead. Thankfully MySql, RedHat, jboss and many others ignored them.

And now in downturn 2.0 we are hearing many people make grand statements about big markets, like:

1. Online video is dead

2. Social networks can’t make money

3. Where is the business model in open source

4. Venture is dead

5. I’m only investing in things with “proven” business models.

6. Free doesn’t work.

7. There isn’t a business model with online music.

Sound familiar?

Look, here’s the thing. There are plenty of bad ideas out there and mistakes are being made. And there are good ideas with poor execution or other challenges.

At the same time there are people inventing stuff and executing like crazy. There are people innovating in almost every category and inventing new ones along the way.

I’m an optimist. I believe you can’t be an optimist only in good times.

Build a great company in any category you want.

Thinking about simple inbox hacks

I took Thursday and Friday off this week and went away with lauren and the kids for an extended weekend. We are having a blast.

For the most part and except for a few unplanned work related things I’ve been off the grid.

Tonight, everyone was wiped out and went to bed early. I’m still wide awake.

I’m staring at my inbox getting back to the most important items (family, urgent portfolio company matters, my partners and very close friends).

But my inbox doesn’t care about me and it’s all there. And growing. And in no particular order. It only cares about the most recent stuff because that is what it “bubbles up to the top”.

Not nice.

Time of email receipt isn’t the most important thing for me right now.

At a glance my email inbox looks probably a lot like yours:

-tons of work emails

-personal emails

-calender invite emails

-blog comments (disqus)

-Twitter DMs

-social net messages (so & so wants to be your friend, social net messages)

-PhoneTag voicemail transcriptions

-ecommerce receipts & status

-spam

The list goes on.

I need a way to fix this and I’m not willing to declare email bankruptcy.

When I get back home I’m going to do some simple inbox improvements:

1. Create a separate email gmail account for my disqus comments. iPhone handles multiple email accounts beautifully.

2. Create a separate email account for phonetag. (is there a way to use iPhone visual voicemail and Phonetag at the same time? I think the answer is no on this one.)

3. Create a separate email account for ecommerce stuff.

4. re-configure twitter to send DMs to sms only

5. Right now my work and personal email goto the same place. wondering if that is a good idea or not.

6. since switching to gmail, spam has gotten lighter. but it’s still a problem.

7. can i filter gmail to show me only messages where I’m on the To: line (vs cc) ?

Please share any simple inbox tips. I’m sure I’m missing some obvious ones.

Maybe I’m tired too :)

Understanding good data from the useless stuff

One of the best things about online services is the data. The amount of data can get massive quickly.

We all know that data is valuable for a variety of reasons.

But the thing I want to talk about is how that data can make your product better (vs data monetization).

Many web services do capture and record vast amounts of data. But a lot of that data isn’t very helpful. The key is identifying the important parts that can improve your service.

First, if you aren’t capturing that data then get busy and start. I recently met an entrepreneur who created a widely used Firefox extension. But he wasn’t keeping track of any data. He is now :)

Next, find out what data is important. Well, that’s the hard part.

Few examples to consider.

I recently spoke to an executive that ran a successful subscription based virtual word. He told me that as soon as users invested x hours into the product they were subscribers for life. The assignment in their case was pretty clear: focus on user engagement and the business model will compile. Other data was helpful but much less important than getting users to invest time in the game.

Another entrepreneur told me that in his social app, if a user connected with 5 friends then there was a high likelihood they would become highly active. They are working on improving their invite a friend component and friend discovery. Other features are taking a back seat for now.

Yet another entrepreneur told me that reducing the sign up process to a bare minimum, user name and password and nothing else, generated a 3x increase in sign ups. They did a lot of A/B testing of their home page & sign up experience.

In all of these companies the critical data components were different from one another.

A lot of this seems like common sense but it’s a challenge to figure out and prioritize. That’s especially true in a startup where you are chronically under funded and understaffed.

But I encourage you to make the investment & track down the good data and ignore the useless stuff.

(n.b. the entrepreneurs mentioned in this post are not in the Spark portfolio).

Right on Trent

Trent Reznor from the Nine Inch Nails has some great advice for young, unknown artists trying to make it.

via Trent:

Forget thinking you are going to make any real money from record sales. Make your record cheaply (but great) and GIVE IT AWAY. As an artist you want as many people as possible to hear your work. Word of mouth is the only true marketing that matters.


To clarify: 

Parter with a TopSpin or similar or build your own website, but what you NEED to do is this – give your music away as high-quality DRM-free MP3s. Collect people’s email info in exchange (which means having the infrastructure to do so) and start building your database of potential customers. Then, offer a variety of premium packages for sale and make them limited editions / scarce goods. Base the price and amount available on what you think you can sell. Make the packages special – make them by hand, sign them, make them unique, make them something YOU would want to have as a fan. Make a premium download available that includes high-resolution versions (for sale at a reasonable price) and include the download as something immediately available with any physical purchase. Sell T-shirts. Sell buttons, posters… whatever. 

Don’t have a TopSpin as a partner? Use Amazon for your transactions and fulfillment. [www.amazon.com

Use TuneCore to get your music everywhere. [www.tunecore.com

Have a realistic idea of what you can expect to make from these and budget your recording appropriately. 

The point is this: music IS free whether you want to believe that or not. Every piece of music you can think of is available free right now a click away. This is a fact – it sucks as the musician BUT THAT’S THE WAY IT IS (for now). So… have the public get what they want FROM YOU instead of a torrent site and garner good will in the process (plus build your database). 

The Beastie Boys’ site offers everything you could possibly want in the formats you would want it in – available right from them, right now. The prices they are charging are more than you should be charging – they are established and you are not. Think this through. 

The database you are amassing should not be abused, but used to inform people that are interested in what you do when you have something going on – like a few shows, or a tour, or a new record, or a webcast, etc. 

Have your MySpace page, but get a site outside MySpace – it’s dying and reads as cheap / generic. Remove all Flash from your website. Remove all stupid intros and load-times. MAKE IT SIMPLE TO NAVIGATE AND EASY TO FIND AND HEAR MUSIC (but don’t autoplay). Constantly update your site with content – pictures, blogs, whatever. Give people a reason to return to your site all the time. Put up a bulletin board and start a community. Engage your fans (with caution!) Make cheap videos. Film yourself talking. Play shows. Make interesting things. Get a Twitter account. Be interesting. Be real. Submit your music to blogs that may be interested. NEVER CHASE TRENDS. Utilize the multitude of tools available to you for very little cost of any – Flickr / YouTube / Vimeo / SoundCloud / Twitter etc. 

If you don’t know anything about new media or how people communicate these days, none of this will work. The role of an independent musician these days requires a mastery of first hand use of these tools. If you don’t get it – find someone who does to do this for you. If you are waiting around for the phone to ring or that A & R guy to show up at your gig – good luck, you’re going to be waiting a while.

Fantastic advice. That’s exactly right.

The only thing I would add is that I wish Trent would get a blog instead of posting in the NIN forums. And naturally, I would recommend using Tumblr just like Ra Ra Riot recently did :)

What’s most important: features, schedule or vision?

I learned a lot of valuable lessons working with Steve Perlman at WebTV Networks and Moxi Digital.

If you worked or met with Steve you would easily agree with me that his passion is nothing but extraordinary. He is positively obsessed about building amazing products.

I learned other things from Steve as well. One of my favorites is V.S.C.F.

Those letters stand for: Vision. Schedule. Cost. Features. And in that order.

This is how how Steve explained it to me:

1. Vision. Without a doubt, the founder’s vision of the product is the most important thing. Everything flows from that vision. I couldn’t agree more.

2. Schedule. Steve would often say, “Market windows don’t move”. Shipping the product on time is a big deal. If you slip late the market may no longer be there. Schedule trumps cost & features. Especially in a world of software or connected devices you can always add software improvements later (e.g. iTunes App Store is a beautiful example).

3. Cost. Cost is a bit tricky to think about when it comes to consumer internet applications vs consumer electronics like WebTV or iPhone. Cost is important. But you have to get the vision & schedule right. Cost will improve over time if the product is great along with engineering innovation & volume. We subsidized WebTV in the early days. One could argue that was a derivative of freemium.

4. Features. There is no question that features are important but vision, schedule and cost are more important. I think that’s right. Consider Twitter as an example. They shipped early, with less features and with a powerful vision that drives the company’s every move.

I keep VSCF in my mind all the the time.