Growth5 Blog

Monday, August 31, 2009

'Cloud' Computing: What Does it Mean for Consumers and Marketers?

In today's ClickZ article, Sean Carton wrote about the move to the 'cloud' and what that means for consumers and marketers. Some highlights:
1. Consumers are starting to leave the hardware behind. The gaming industry has seen a 30 percent decline in video game console sales.

2. While people aren't buying the gaming hardware as much, there has been a 22 percent increase in online gaming. They're still gaming, just not via the consoles.

3. Netbooks sales are up. Trends are leaning towards smaller, lightweight computers that can get Internet access anywhere via broadband plans from AT&T or Verizon Wireless. Some would say the iPhone fits this exact description.

4. "Netbook-centric" operating systems are replacing the need for Apple and Microsoft. As the world moves from "atoms to bits" -- music from records/cds to mp3s; movies and tv from video tapes/dvds to streaming sites like Netflix & Hulu and documents from paper to floppy discs to the Internet. "It's inevitable that whatever becomes digital moves into the cloud."

5. For marketers, this will present an opportunity "to reach customers across all aspects of their lives, rather than just when they're in front of their Web browsers." Mobile Marketing will need to be prepared for even more mobility from consumers - "we will need to pay pay more attention to where they are physically as well as what they're looking at and when."

6. "We'll also have to take into account that the always-on consumer is going to have a lot more chances to make their voices heard and we'll have to respond by really understanding how to manage brands and reputations in an increasingly mobile, social space."
photo credit: PC Mag

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Sunday, August 30, 2009

Weezer

My brother and I went to see Weezer in Hartford, CT last night. Unfortunately, we forgot that much like the Nissan Pavilion in VA, the Comcast Theatre in Hartford has one road in. We were in traffic for quite awhile.

We missed a little of Weezer's set, but what we saw was an excellent show, we had a great time.

The band wore full bright yellow jump suits complete with reflectors. They were obviously out directing traffic prior to their set so there would be some actual people in the theater to hear them play.

Weezer's lead singer and principal songwriter, Rivers Cuomo, was very entertaining. He's quite the character. If you have a minute, check out his bio here. He's led a very interesting life, including: growing up on an ashram, graduating Phi Beta Kappa from Harvard and writing/recording over 800 songs.

One of Cuomo's most recent projects is writing a "sawng" in collaboration with YouTube users. I'm not certain, but I'm pretty sure when he's not writing or performing music he works at my accountant's office.

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Saturday, August 29, 2009

First Round Funding Terms

Chris Dixon covers Ideal First Round Funding Terms in this excellent post. Entrepreneurs should read his entire post. Here are the highlights (in bold):
1. Investors get either common stock or 1x non-participating preferred.
-Common stock makes financing easier down the road. I think some basic preferred is ok too and shouldn't prevent later investors. Later investors preferred should be as basic.
2. Pro-rata rights for investors. The right for all investors (including small angels) to put money in the following rounds.
-This is a great idea as the Angels are often taking all of the risk. They should have the right to protect against dilution as later investors realize what a great investment choice the Angels made way back when.
3. Founder vesting with acceleration on change of control.
-Founder vesting is important. Dixon recommends four years. That sounds like a good number. If the company is acquired all vesting accelerates to 12 months remaining - this gives the acquirer and the founder(s) 12 months to work together and see how it goes. If the Founder(s) are replaced upon acquisition, they vest fully. Dixon calls this the "double trigger".
4. Keep the first round docs simple, legal fees down.
-95% of the time the docs end up being mostly the same with or without months of negotiation and all sorts of legal posturing. Start close to where you will end up anyway and save the money.
5. Small board to start. One investor, one management and one mutually agreed upon independent director. If five board members are preferred, two investors, two management and one independent director.
- If you have the right three, a small board is better to start. Keeps you nimble, leaves room for board members in follow on rounds without the board getting too large and potentially less effective.
6. Founder / management salaries: subsistence level. Enough to not worry about money, but nothing more.
-If you have entrepreneurs who can't or aren't willing to take this level of pay during the seed/earliest stages, move on.
7. Small angels investing beside VCs should get the same economic rights (share price, warrants & pro-rata) but no control rights.
-Totally agree. Give the early risk-takers the same benefits as the VC/PE/Institutions that come in later. I also agree they shouldn't have control rights - you don't want your Angels blocking follow on rounds that are necessary, but they should be able to invest pro-rata in those rounds.
8. Option pool (10-20%). The chosen % should be based on a hiring plan, not just as a deal point.
-You want your management team to have "skin in the game" and benefit alongside their hard work. Some firms forget to plan for this and can't attract top talent. Yes it's dilutive, take the dilution early on and have the option pool in place, it will be worth it in the long run.
9. All other points (registration rights, dividends, etc...) should be standard NVCA terms.
-Sometimes all you need to do is show the founders these NVCA templates. Be patient, they will often come around. If they don't, move on.
10. Valuation & Amount Raised. These are the only two terms that should be negotiated. Everything else should be standard terms.
-Valuation is often in the eye of the beholder and is based on market conditions, how competitive the deal is, who the founders are, etc... I recommend focusing on the amount raised. What are the milestones that will create a significant bump in valuation for the next round of financing and how much money is needed to get there. Add some % multiple on top of that - Dixon recommends 50%. It always takes more money and more time to get there, so plan accordingly.

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Friday, August 28, 2009

Idfive Lands University of Baltimore

Congrats to our web team - idfive - for landing the University of Baltimore. I am extremely proud of the work idfive has done in the higher ed space (and all other verticals) and am looking forward to watching the team hit it out of the park for UB.

Here's UB's announcement. Full text below from the UB site.

New Web, Marketing Contract Awarded to Idfive

Local Firm Cited by UB as Best Among 30 Proposals; Comprehensive Campaign to Include Emerging and Traditional Marketing Services

August 27, 2009
Contact:University Relations
Phone: 410.837.5739

A new five-year, $4 million contract for marketing and Web development services for the University of Baltimore has been awarded to idfive, a Baltimore-based advertising and web development agency. The University will retain idfive to provide online and traditional marketing, Web development and creative services.

A cross-campus committee at UB reviewed more than 30 proposals from local and national firms for this work, which is intended to further enhance UB's brand in local and regional higher education markets through a combination of innovative marketing and advertising via new and traditional platforms. Among the agency's tasks will be a redesign of the University's Web site—a primary vehicle for conveying messages about UB to prospective students.

"We look forward to telling the UB story to a new generation of college students," said Peter Toran, vice president of Planning and External Relations for the University. "Technology has changed and challenged traditional notions of marketing, and we need to embrace new ways of reaching our audience. Idfive's Sean Carton is a nationally recognized leader in higher education marketing—where it's been and where it's going—and he understands UB. We're excited about working with idfive because of their impressive accomplishments in higher education marketing, their innovative thinking and their understanding of how to use emerging media."

Carton, chief creative officer at idfive, added, "We are absolutely delighted to be working with one of the top up-and-coming universities in the region. Many of us here at idfive have been either students or teachers at UB. We're thrilled to apply our nationally-recognized expertise in higher education marketing to such an incredible institution."

UB staff and idfive will work to increase enrollment at the University of Baltimore with a target of 8,000 students (UB currently enrolls roughly 6,000) by elevating the awareness of the University's 4-year undergraduate programs as well as its numerous professional graduate offerings. Drawing on their expertise in lead generation at other institutions, idfive will develop an integrated marketing campaign that will include print, television, radio, out-of-home, online advertising, search marketing, and social media. Idfive will also utilize its own proprietary services to help the University to create a new Web site that both attracts prospective students and provides outstanding service to current students, faculty and staff at the University.

Idfive will partner with several other agencies, including Leap Frog Solutions, an Oakton, Va.-based Minority Business Enterprise agency for creative and strategic support; minority-owned Barb Clapp Advertising of Timonium, Md.; Green + Associates of Baltimore; and Moran Interactive of Baltimore, all for online and traditional media planning and buying services.

UB's contract with idfive was approved by the Maryland Board of Public Works at its regular meeting on Aug. 26.

Idfive, LLC, is a Baltimore-based advertising, web development, digital media, and brand consulting firm founded in 2005 by a seasoned group of online advertising, marketing, and web development firms. Concentrating mainly on higher education, not-for-profit, financial services, health care, and business-to-business verticals, idfive's "informed design" methodology allows the firm to design beautiful and effective solutions for their clients' marketing challenges. Their higher education clients include UMBC, the College of Notre Dame of Maryland, the Cornell College of Human Ecology, SUNY Potsdam, Kent State University, the Graduate Management Admission Council and the American Academic Leadership Institute.

The University of Baltimore is a member of the University System of Maryland and comprises the School of Law, the Yale Gordon College of Liberal Arts and the Merrick School of Business.

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Thursday, August 27, 2009

Paid Search vs. Organic: For Retail, Paid is Better

The NY Times posted this short article on paid search vs. organic search in retail. The article is based on a study by Engine Ready, an internet marketing company. The findings:
1. Visitors that get to retail sites from sponsored/paid links at the top and right side of the Google results page are more likely to buy than those who clicked on the organic (non-paid) results.

2. The average order of a paid linker is $11 higher than those that click on the organic results, at $117.06.

3. Engine Ready speculated that shoppers might be turned off by the tricks that make a site show up higher in the organic Google Rankings.
The idea that "some company paid for this" via a paid search ad gives the perception that it might be more legit than if they didn't. Anyone can get an organic search result, "who knows what I'm about to click on."

Also, paid search ads often have the benefit of trusted brand recognition. We are more likely to click a paid search ad for a product on Amazon.com and use our credit card than we are to click the organic result for Uncle Chuck's Music Hut and make a purchase.

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Wednesday, August 26, 2009

Building Your Startup Sales Team

Dharmesh Shah of OnStartups.com posted this excellent piece on building a startup sales team. There are 14 points/paragraphs in the article, I encourage you to read them all. I have condensed them here:
1. Don’t hire sales people too early.

2. You don’t need sales people, you need sales.

3. Don’t hire several sales people at once. Figure out the type of sales people you need and who best to sell it to first.

4. The "Sales" type: not bad people, they’re just different. Be prepared.

5. Keep compensation plans simple.

6. Iterate! Refine your demo script, your slides, and any other collateral information. Use what you learn.

7. Sales people's behavior is often based on their incentives.

8. ALWAYS connect incentives somehow to ultimate customer happiness.

9. Make sure you understand the economics of your business. Figure out your total COCA (Cost of Customer Acquisition).

10. Your LTV (life-time-value: how much revenue you expect to generate per customer) should be higher than your COCA.

11. Track data maniacally.

12. Your pricing should be in line with your sales structure.

13. Once you get beyond three or so people, start looking at CRM systems (like Salesforce.com).

14. Start watching the shape of your “funnel” as early as possible. How many leads are you getting a month? How many turn into opportunities? How many of those convert into paying customers?

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Tuesday, August 25, 2009

Yahoo's CentMail: Will You Donate A Penny An Email to Fight Spam?

Researchers at Yahoo would like you to put a virtual one-cent stamp on each email you send. The proceeds will go to charity. The idea behind CentMail ("Do Good. Fight Spam") is that paid email will differentiate itself from spam blasts and get to their intended targets without a hitch. Since spammers send millions of emails every day it will be prohibitively expensive ($10,000 per million emails) for them, and you know they don't want to donate to charity, they're spammers after all.

Some highlights from the article:
1. It is estimated that spamming consumes 33 terawatt hours of electricity every year.

2. Anti-spam companies estimate that spam comprises more than 90 percent of all email.

3. Users would pre-pay an amount of $5 or so to get "stamps" for 500 emails. The $5 would go to the charity of their choice.

4. Microsoft has its own research project and AOL's Goodmail offers anti-spam protection to large marketers.

5. The most current widespread authentication solution is the Sender Policy Framework, which helps prevent spammers from pretending to send emails from a company's domain name.
CentMail is not available yet, but you can go to the site and enter your email for updates. I'm not sure CentMail will prevent the amount of spamming going on. There will always be those who will click thru from these spam emails and keep the spammers in business, but CentMail could improve the spam filtering process for those that use it.

This is another example of where micropayments make sense, especially when the money is going to charity.

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Monday, August 24, 2009

Andreessen Backs New Browser: RockMelt

I pay attention to where Warren Buffet invests Berkshire Hathaway money because he is right a decent portion of the time. I pay attention to the startups that Marc Andreessen funds for the same reason.

Back in February we talked about Andreessen's appearance on Charlie Rose and his new fund under the Andreessen Horowitz umbrella.

Andreessen announced recently that he is investing in a new browser technology called RockMelt. Andreessen knows a thing or two about browsers, he developed Netscape way back when.

Earlier this summer, Andreessen said that the internet has become a network of complex Web sites that need a new kind of browser to effectively deliver services to end users. "There are all kinds of things that you would do differently if you are building a browser from scratch," he told the NY Times.

RockMelt will face a crowded browser space. It will have to deliver something differentiable to get people to pay attention. There's "
market leader Microsoft, second-place Firefox, Apple's Safari, Google's Chrome and others. Also, Flock, for example, offers what it calls a "social Web browser" that acts as a single interface to the largest social networks, such as Facebook and MySpace."

As with Buffet, betting against Andreessen is not a great idea. Expect RockMelt to have an impact, or at the very least make Andreessen Horowitz investors some money.

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Sunday, August 23, 2009

New Scanning Technology

I thought this was pretty cool. In an effort to get books scanned quickly for digital consumption, the Ishikawa Komuro Lab at Tokyo University is developing a technology that scans the pages as they are turned.
"Using a laser range projector to estimate page geometry, the camera adjusts for light and movement distortion as necessary and retains faithful copies of the original."
Sure beats turning the page, setting the book as flat as possible, scanning, turning the page, and repeating forever.


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Saturday, August 22, 2009

80 Years and Counting

Some analysts are predicting that consumers will stick with money-saving habits practiced during this economic downturn and not go back to the frequent shopping sprees they were previously accustomed to.

Using my grandmother as a case study, retailers may be in trouble for awhile. For eighty years my grandmother has been making spending decisions shaped by living through the Great Depression...

  • Why buy food when you can grow it?
  • I can make that dress for 1/10th the price.
  • Who needs a car, ever.
  • Credit cards, why? If you don't have the cash you shouldn't buy it.
  • Waste not, want not.
Sorry retailers, despite what I can guess is in the trillions of ad dollars, you're 0 for 80, and counting.


Article find: Sean Cohen - thanks.

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Friday, August 21, 2009

Mint.com Raises $14 Million

Have you checked out Mint.com? It's a personal finance site. The "best free way to manage your money" according to their home page. The site will help you pay off credit card debt, understand how to budget, how to invest, buy a car, pay off student loans, save for retirement, spend less eating out and get ready for tax time. The site gets great user ratings.

Mint is an excellent example of a free online service that has the potential to be highly profitable. They just raised $14 million to hire more engineers and make upgrades to the site. A good portion of the capital is expected to be spent on new features surrounding their budgeting services, helping users track and save money.

After an early seed round and the last three rounds of funding, Mint.com has now raised $31 million since its launch in September 2007.

Mint has 1.4 million users and generates most of its revenue through affiliate deals wherein they promote corresponding financial services products like credit cards. "Tell us how you use your credit cards and we'll find the best card for you." Various Discover, Capital One, and Chase cards are prominently displayed as the cards of choice. How much are these credit cards paying for that sticky promotion? Quite a bit I would imagine.

Another area that Mint will look to produce revenue will be in the selling of anonymous user data. According to this article, "The site claims to be tracking over $175 billion in transactions and $47 billion in assets..." This type of data has great value.

Mint releases quarterly data on the spending trends of its users for free. For example, Mint users' spending had been declining for four straight quarters until 2Q09 showed an uptick. Good news. For a fee, companies can pay for more specific data. As a test of this concept, VentureBeat requested data from Mint comparing how Mint users were spending money at Apple stores vs. Fry's Electronics. You can see the results here. No surprise, Mint users are spending more money with Apple.

As Mint expands their service offerings and increases their marketing budget, they will gain more users. Affiliate deals will be more lucrative and group data will be more reliable and expensive.

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Thursday, August 20, 2009

Six iPhone Apps You Should Check Out

Fast Company points out Six Overlooked iPhone Apps that could be of use to you. They are:
1. myBatteryLife | $0.99

Apple's built-in battery indicator doesn't do much in the way of exactitude, so a bunch of iPhone battery apps have cropped up to fill the niche. This is one of the best: it gives you to-the-minute battery life estimates for talk time, video playback, music, and Web surfing--all in a big, readable display.

2. AirCam | Free/$7.99

AirCam streams live audio and video from your webcam to your iPhone over Apple's Bonjour networking, letting you do all kinds of nifty stuff with almost no set-up. You can set your webcam to be motion activated, making it good for security; you can also set it to record video in five-minute increments. Don't have a Mac? You can still install Bonjour and make it all work.

3. Instapaper | Free/$4.99

With Instapaper's bookmarklet installed on your computer, you can browse interesting articles and promptly put off reading them. Hit the "read later" bookmark and they're transported into your Instapaper Web account, and also onto your iPhone with this app, where you can read them at your leisure. Setup isn't exactly turnkey, but it's worth it.

[We featured InstaPaper here, so these six apps haven't been completely overlooked ;-)]
4. Omni Invoice | Free/$4.99

Omni Invoice and its free iteration are complete, one-stop invoicing, price-quoting and billing apps that will eliminate your need for desktop invoicing software. Instead of checking out a job site or project and waiting 'til you get back to the office to gin up an estimate, do it on-site; if someone has forgotten to pay you, send them an invoice from the road. It's easy to use, and formats your email invoices in beautiful rich HTML.

5. Craigsphone | Free

It's always in the most inconvenient moments that you decide you need a new couch, or computer, or bike, or cat. Now whether you're riding the train or in the middle of a work meeting, you can surf Craigslist for the stuff you need. With GPS enabled, you can even search what's available nearby.

6. Polarize | Free

If you have the iPhone 2G or 3G, you know: most of the photos it takes look like crap. With Polarize, you can add vignetting and a vintage-feeling Polaroid feel. There are several apps that do this, but Polarize has the formula right: otherwise-garbage iPhone photos actually turn out looking kinda cool.

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Wednesday, August 19, 2009

Solution Clarity

Seth Godin's blog entry, "Are We Solving the Same Problem?" makes an excellent point about the disconnect that happens when you're focusing on the solution and not the problem.
"The more clarity you can get about what a successful solution looks like, the more likely you will be to have a delighted customer when you're done."
One of the five principles of growth we subscribe to at our venture capital marketing firm has a similar tone: Circumstances over Attributes. Too often we focus on marketing to a prospective client's attributes: age, gender, geography, income, etc... What we need to be focusing on is their circumstance. If we work on the solution for their circumstance or problem we will have gained a happy client regardless of their attributes.

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Tuesday, August 18, 2009

Social Media: Where Did It Come From? How Does It Work?

Slideshare.net contacted Sean Carton, the Chief Creative Officer of our web team - idfive - with the following message yesterday:
Your presentation is currently being featured on the SlideShare homepage by our editorial team.

We thank you for this terrific presentation, that has been chosen from amongst the thousands that are uploaded to SlideShare everyday. Congratulations! Have a Great Day!

- the SlideShare team
A terrific presentation indeed. It's called Taking the Plunge: A Social Media Workshop. I highly recommend you click thru here or below. Sean put this together for a higher ed audience, but it's relevant to anyone wanting to learn more about what social media is, where it came from, how it works and how to use it to communicate with your constituents.

Congrats Sean!

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Monday, August 17, 2009

Capital Raise Rejection: You're On Your Way

If you're out there raising money, you're going to get rejected, a lot. You know that, many of you are living it. It's what you do with the rejection that is important.

Getting a "no" from any investor -- family/friends, Angels, VCs, Private Equity, Institutions -- can be deflating. "They don't like me, they don't like my idea, this is never going to work."

You need to realize that oftentimes your rejection has very little to do with you or your idea. It could be that you're not in the right industry for that investor, you're in the wrong geography for them, you're not in their sweet spot as far as the stage of your business or most likely it's just not the right timing.

When you get a "no" use it to your advantage:

1. Try to find out why. Some investors will tell you, some won't. Approach the investor for the sole purpose of feedback - don't come across as if you're trying to change their mind, again. Whatever helpful feedback they give will better prepare you for your next presentation. If you use this feedback properly, you're more likely to have answers in your next presentation before the investor even asks.

2. Ask the investor if you can keep them posted on your progress, then update them when you actually have progress. Investors talk to each other (see #3). Even if after two or three quarters of updates you don't hear back from that specific investor, they may forward you on to someone in their network who might be interested.

3. Ask the investor if they know of another Angel or VC that your business might be a better fit for. This might be the most valuable information a "no" can give you. Investors know other investors, they know what kind of deals they're doing. A "no" investor just might be a link to your "yes" so don't forget to ask.

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Sunday, August 16, 2009

Tweeters Affect Box Office

This NY Times article, What Tweeters Have to Say About the Movies introduces the site skinnipopcorn.com; a site that promotes itself as "the world's first social media movie buzz barometer."

Unlike Rotten Tomatoes, a site that aggregates film reviews from professional reviewers, skinnipopcorn ("get the skinny") collects tweets from moviegoers. At the site, click on "now showing" for "an unedited, unfiltered stream of Twitter commentary."

How much affect do these real time 140 character or less film reviews have on box office? It is believed that negative tweets helped sink “Brüno” by its 2nd night and positive tweets pushed “The Hangover” along to stellar box office results.

Thanks: Glenn

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Saturday, August 15, 2009

iPhone Apps: Bringing Back the Album

This Wired article, "The Album Is Dead, Long Live the App" has an interesting take on how music artists are using iPhone apps to bring back "bundles" of their work that more resemble an album, or at least a music cd.

The iTunes music store changed how we buy music - one song at a time. Hear a new song that you like, go to the iTunes store and buy it. A "one off" distribution system that has served Apple well. If they haven't hit it already, iTunes is approaching seven billion songs sold. They average a billion songs sold about every five and a half months, the six billionth song was sold in January 2009.

Through iLike's dashboard feature, artists are now selling their own customized iPhone apps that include songs, music videos, photos, news, games, concert listings, "community" features, etc...
"Now that iLike has allowed app creation to scale across hundreds of thousands of bands, and other mobile platforms are emulating Apple’s modular app concept, the artist-specific app could become a formidable music format in its own right.

If that happens, the idea of buying a bundle of music won’t die with the album — it will survive with the app."

Keep your eye on iLike. They just launched their own music download store, they have Facebook's most popular music application, and they're profitable. The company has tremendous growth potential.

Related: iLike rumoured to be raising new capital in an effort to push out early investor Ticketmaster.

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Friday, August 14, 2009

Your Wireless Network

This NY Times article has some great information on how you can improve your wireless network. Here's what I took away from the article:
1. Your wireless network probably runs on either 802.11b or 802.11g technology. The latest Wi-Fi standard, 802.11n can transmit data twice as fast as "g" and is more than five times faster than "b".

2. Wireless technology is heading towards the 5GHz frequency vs. the current 2.4GHz. 802.11n can use either 2.4GHz or 5GHz. You will want 5GHz eventually, as an 802.11n Wi-Fi network transmitting at 5GHz frequency can support a dozen nonoverlapping channels. This will allow you to run all of the smartphones in your house, your laptops, video games, streaming movies, printers, etc... all at the same time over Wi-Fi without interfering with each other.

3. If you don't want to upgrade to an 802.11n network or don't have the computer to support it, the article covers several products you can buy for your current "b" or "g" networks that will extend your wireless network to parts of your house your Wi-Fi doesn't currently reach.

There are some excellent signal "extenders" available, and if that doesn't work, "Powerline" technology uses the electrical wiring in your house to transfer data so you don't have to run ethernet cables through your walls.
The Slingbox (watch your tv anywhere with an internet connection) I recently purchased came with "powerline" adapters so I could have a hardwired signal going from my DirecTV box through the electrical wiring in the walls to the router on my network which is in a completely different part of the house. It works great.

Wireless world: last night I was at my house watching the PGA Championship I had recorded earlier in the day when the cab came to take me to the airport. I paused the DVR, turned the tv off and headed out. When I got to the airport I used my Verizon Wireless card to get online, I logged into my Slingbox over the internet and picked up watching golf on my DVR where I had left off.

Thanks: Tom

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Thursday, August 13, 2009

Great Resource: VentureBeat's Entrepreneur Corner

Entrepreneurs: you should check out VentureBeat's Entrepreneur Corner - an excellent resource for startups and small businesses that are looking to get to the next level.

Here are some of their recent stories:

1. The Benefits of Failure: Failure is never fun, but it’s not something you should live in fear of. JLABS CEO Judy Estrin, in an entrepreneurial thought leader lecture given at Stanford University, notes that when they’re not given the opportunity to fall short of new goals, engineers and thinkers are incapable of setting their sights high.

2. The Delusion of the Perfect Product:
I’m going to tell you something you may already know: There is no such thing as a perfect product. While it’s a pretty obvious fact, it’s still something that any manager can (and often does) forget – and the results can be like quicksand for the company, turning your lean start-up into a lumbering beast.

3. 14 Tips for Building a Startup Sales Team: Your sales force is your company’s lifeblood. No matter how good your product is, it won’t sell itself, no matter how much you believe otherwise. Establishing a competent, effective team to draw customers is often challenging for entrepreneurs, though, who would rather focus on research and development or chase VCs.

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Wednesday, August 12, 2009

Capitalizing on Viral Video: Sony

You might be one of the 18-million plus people who watched the "JK Wedding Entrance Dance" video where Jill Peterson, Kevin Heinz and their wedding party make a grand entrance to the Chris Brown song "Forever."

This article talks about how Sony was able to monetize the viral wedding video while Simon Cowell was unable to make anything off of the more than 100 million YouTube views of the Susan Boyle video.

Sony saw the wedding video as a way to make money, which is important to remember as similar rights owners are having videos like these yanked because of "copyright" violations -- which technically this video is, but why lose out on the revenue.

Sony contacted YouTube and allowed them to keep the video up provided they could share in the ad revenue the video generated. They also added "Click-toBuy" links over the video so viewers could purchase Forever on Amazon or at iTunes. The song catapulted to #4 in the iTunes music store and #3 on Amazon.

Who doesn't get paid? The wedding party of course. They should just be happy they weren't sued for playing the song publicly.

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Tuesday, August 11, 2009

Spezify: Visual Search Results

Have you checked out the Spezify search engine? Type in a word or phrase and the engine will return clickable visual results. From their site:
Spezify is a search tool presenting results from a large number of websites in different visual ways.

We take web search further, away from endless lists of blue text links and towards a more intuitive experience. We want you to get a good overview of a subject, find useful information and be inspired with Spezify.

We mix all media types and make no difference between blogs, videos, microblogs and images. Everything communicates and helps building the bigger picture.

We collect websites and are aiming to use as many relevant, free and open APIs as possible to generate extensive and diverse search results.
Here's what was returned when typing in "Baltimore Ravens":


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Monday, August 10, 2009

Freemium Done Well: Financial Times

Content providers have been experimenting with all sorts of freemium plans: basic services for free, premium services for a fee. News outlets have had a hard time deciding which content is free, and which isn't.

The NY Times decided that their news was free, but opinions weren't. There's a good "my two cents" joke in there somewhere. ESPN requires you to pay for their "Insider" information; or have a subscription to ESPN the magazine.

I like what the Financial Times decided. They didn't devalue any of their content by saying "this content is free, but over here we have this content that you will want to pay for." They decided to separate "free" and "pay" content by usage.

If you (your computer) reads more than three Financial Times articles a month, they ask you to register. Once you've registered if you read more than ten articles a month, they ask you to pay. This is a model people can wrap their heads around. If I use this a lot, I need to pay for it, fair enough.

We wrote awhile back about micropayments and how publishers could benefit from their implementation. Essentially, the Financial Times model is similar, they just don't charge the per article amount from the beginning -- they wait until you use their service enough to be a regular and then ask you to pay for their efforts. And by not walling off the "better" content you have a chance to sample all the content they provide before declaring yourself a regular by your usage.

It's a great plan. I suspect more news outlets will adopt this plan over time.

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Saturday, August 8, 2009

Zappos.com CEO Tony Hsieh

Shortly after Amazon purchased Zappos.com for $840 million, Zappos CEO Tony Hsieh talked here about what has contributed to Zappos success. Hsieh talks about how important it is for Zappos employees to understand the Zappos vision of having "the brand be synonymous with the very best customer service as well as making sure that we hire people that are a fit for our company culture."

Hsieh's list of the ten core values that define the Zappos culture is a great list for all of our companies to aspire to:
  1. Deliver WOW through service.
  2. Embrace and drive change.
  3. Create fun and a little weirdness.
  4. Be adventurous, creative, and open-minded.
  5. Pursue growth and learning.
  6. Build open and honest relationships with communication.
  7. Build a positive team and family spirit.
  8. Do more with less.
  9. Be passionate and determined.
  10. Be humble.

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Friday, August 7, 2009

Did You Know You Are Working as an Unpaid Data Entry Specialist?

Every time you enter your information when registering at a site, making purchases or even just browsing, you are performing the data entry the collectors of this information need to exploit "serve" you better.

This article from the NY Times explores how some companies are combining your offline profile with the data collected online to get to know you even better.
"The technology that makes the connection is nothing new — it is a tiny piece of code called a cookie that is placed on a hard drive. But the information it holds is. And it is all done invisibly.

“Now, you’re traveling the Internet with a cookie that indicates you’re this type of consumer: age group X, income level, urban versus rural, presence of children in the household,” said Trey Barrett, a product leader at Acxiom, one of the companies offering this linking to marketers."
If you trend as a budget shopper you will be given better deals online or via email for products that other consumers will pay full price for because their habits indicate they will buy it anyway.

Not all companies are combining offline and online information.
"In 2000, DoubleClick abandoned plans to connect online and offline data after a huge outcry. Google, which later acquired DoubleClick, has been conducting studies that connect the two areas, but it does not currently collect or serve ads based on such personal information without user permission, Sandra Heikkinen, a Google spokeswoman, said.
Since you know you are contributing to your own exposure, for starters, there a couple things you can do to hold onto some of your privacy. First, you can delete cookies and/or set your browser preference to not accept them. Secondly, you might have to start reading a little bit, but don't just ignore the privacy policy of sites you are registering at or frequenting. Sometimes you are giving the site permission to use or sell your info without knowing it. Read the policy and opt out of the info sharing.

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Thursday, August 6, 2009

Instapaper: Browse Now, Read it Later

I use NetNewsWire as my RSS reader. In its most recent update (3.1), a new feature labeled "Send to Instapaper" was introduced. Instapaper is a "fast, easy, free tool to save web pages for reading later."

From their site, here's how InstaPaper works:
1. You find something you want to read, but you don't have time now. You click the "Read Later" button on your browser.

2. When you have time to read, you come to the Instapaper site on your computer or phone and get whatever you wanted to read.
The "Read Later" button is set up by simply dragging it from the Instapaper site onto your browser. Whenever you have a link you want to check out later, you hit the "Read Later" button and that link is automatically saved to your InstaPaper account.

I have found Instapaper useful for saving articles that I want to read later, especially when I know I will be traveling and it won't be convenient to use my laptop. For example, you can update/refresh your Instapaper iPhone app before getting on a plane and all of the articles you have "sent to Instapaper" are downloaded onto your iPhone so you can read them on the plane without an internet connection.

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Wednesday, August 5, 2009

Live By Free, Die By Free

A couple weeks ago we posted the Social Media Timeline created by our web division's Chief Creative Officer, Sean Carton. One of the takeaways was that over time it has been difficult for most of these sites to stick around for any period of time despite being immensely popular at one point in their life cycle.

Mark Cuban wrote a great post as to why a lot of these sites don't last: When you succeed with Free, you are going to die by Free. Some highlights:
1. The more success you have in delivering free, the more expensive it is to stay at the top... The more important remaining successful is to management, the more money they will spend, the more chances they will take, the more infrastructure they will build, the more people they will hire. All of the things that will prevent them from staying lean , mean and flexible. All of the things that distract them from innovating within their core competency.

2.The rule that eventually KILLS all freemium based content plays: There will always be a company that replaces you... Their product will be better or more interesting or just better marketed than yours, and it also will be free. They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo... Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience.

3. Google: For Google, who lives and dies by free, we dont know who their [replacement] company will be... The only question is when... They are spending incredible amounts of money in search of the “next big Google thing”. When their [replacement] competitor appears, they won’t be in a position to compete with the newly presented model, particularly if its free based because their ecosystem has bloated to the point where they can no longer create anything for free.

The same will happen to Facebook, Twitter, pick any company who lives off of free.

4. Making money: Its not that they can’t make money offering free. They can , have and will. The problem is that they know that its literally impossible to be the king of the mountain forever. But that won’t stop them from trying. And that is exactly what will kill them.

5. When you succeed with Free, you are going to die by Free. Your best bet is to recognize where you are in your company’s lifecycle and maximize your profits rather than try to extend your stay at the top.

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Tuesday, August 4, 2009

Great Lessons For Startups: Looking at What Went Wrong With Joost

GigaOM's founder Om Malik wrote this great piece on what went wrong with online video startup Joost.

If you are an entrepreneur, you'll want to pay attention to each of these "Don't Dos" for your startup.
1. Too Big, Too Fast: Joost hired too many people, too quickly. It never behaved like a startup but instead always felt like a grown-up company with too many bureaucratic layers.

2. Too Geographically Spread Out: The company was based in multiple geographic locations — New York, London and The Netherlands — and as a result, each location became somewhat of a silo.

3. Not Enough Focus: Remember what your mom used to say when you took too big of a bite? If you’re not careful, you’re going to choke. Startups are just like that. Unless you focus, you’re going to choke. Joost couldn’t focus on one single market — and startups need to focus on one market at a time in order to win.

4. Too Much Hype Too Soon: Like many, we were one of the early fans of this startup. Its founder pedigree generated a lot of pre-release interest. Nearly 250,000 folks signed up for the beta version of the software. But when technology problems hit, the pre-release buzz turned into buzzkill.

5. Slow to Fix Its Technology Problems : Joost’s P2P network had technical problems early on that resulted in user defection. The company didn’t move to address those concerns fast enough. These technology problems have continued to nag the company throughout its life, even when it switched to a browser-based focus.

6. Client vs. Browser: The company took too long to realize that the client-based strategy was going to lose out to browser-based video services. Its legacy of building clients became its Achilles’ heel.

7. Didn’t Press Its Early-Mover Advantage: Joost had correctly identified that it needed the blessing of the content owners, but it failed to move aggressively enough to convince them to work with its platform. The client and technology problems didn’t help matters, either.

8. Big Media Dis-Connect: Its big media investors were never willing to give Joost a content edge over the competition, prompting users to tune it out in favor of other services.

9. Too Many Internal Problems: The company had some serious management problems, some of which led to the firing of its CTO in January 2008.

10. Hulu: It started with a simple, easy-to-use interface for its browser-based video service, offered higher-quality video and used content from its backers, NBC and Fox, to become a household name, which in turn allowed Hulu to convince other content owners to sign up for its platform. Now it owns 10 percent of online video traffic.

11. Chasing Its Own Tail: Joost also made some basic mistakes, such as not having a good SEO strategy. It never quite figured out a social media strategy in order to garner viral growth, either. It was like a tech company from the 1990s — out of sync with today’s web environment.
If I had to pick one of these as the most important for any startup, it would be #3. A lot of startups try to be everything to everyone. It never works. Pick a very small group of your potential customers and FOCUS specifically on what they need and how you can best provide it for them. Talk to them, get their ongoing feedback, don't stop until you've won them over - grow your business from there.

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Monday, August 3, 2009

Keep Your Remote Workers Connected With Campfire

A friend of mine who lives in New York started working remotely for a company in California. There are three employees at headquarters in LA and ten more that work remotely from all over the country.

To stay connected, they are using an online program called Campfire.
Campfire is a web-based group chat tool that lets you set up password-protected chat rooms in just seconds. Invite a client, colleague, or vendor to chat, collaborate, and make decisions. Link to a room on your intranet for internal communications.
The team members log into Campfire when they start their day and then communicate as needed in the main chat room as to what they're working on, if they are stepping away for lunch, etc.. You can also create private chat rooms to work one-on-one or in small groups.

If you are using Basecamp as your project management tool, Campfire integrates seamlessly into that work flow.

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Sunday, August 2, 2009

Welcome Google User, We Hope You Enjoy Your Stay

Have you noticed that certain sites add a message to their home page if you are visiting them from a referring site such as Google? I have seen a couple, this is what it looks like (click for larger version):









The message at the top in yellow says,
"Welcome visitor from google.com. For the very latest in music news, subscribe to our artist, track, video or post feeds, follow us on Twitter or Become a Facebook Fan."
What a great way of helping your audience along. If the visitor to your site has stumbled on the site from a Google search, the message gives an instant assessment of what they're getting into. Sure, the message is friendly, what follows the welcome is the instant context the visitor might need to stay and look further.

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Saturday, August 1, 2009

High Frequency Trading: Not Illegal, Yet

Picking whether or not a stock will go up or down in any market can be difficult, especially our current one. But financial services companies need to post a profit regardless, so what do they do? They continue to game the system. How? Super fast fiber optic cables, lightning-speed processors, a couple good programmers, a decent network position close to market computers and about 30 milliseconds.

When Bernie Madoff was returning suspiciously consistent returns year after year, his critics thought he might be illegally "front-running" - peaking at orders for stock trades his clients were making, then sneaking his own investment orders in ahead of his clients. The idea was, his clients' orders would move the stock price, by getting in just ahead of them he could potentially get a better price and ride their orders to profit. Turns out he wasn't front-running, why do that when you're just flat out stealing the money, too much work.

Work that some financial services firms have turned over to their computers. In about 30 milliseconds these super fast computers run algorithms that assess the orders coming in before they hit the market, estimate where the price of the stock will go based on these orders, then conduct millions of trades to profit from this information. This is called High Frequency Trading.

If front-running is illegal, why isn't High Frequency Trading? "While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."

How are hedge funds and the larger banks like Goldman Sachs making so much money so soon after the market nearly collapsed? "High-frequency trading is one answer."

The market of the last several years rode inflated housing prices at 40 to 1 leverage before everyone realized it was a house of cards. If the recent surge is based even partially on super computer "front-running" don't be surprised if the market drops back once this loophole is closed. Unless of course the next great loophole is exploited quickly enough.

Sources
Hurrying Into the Next Panic? (NYT)
Stock Traders Find Speed Pays, in Milliseconds (NYT)
Thanks Tom!

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