Monthly Archives: April 2008

I Told You So: Blockbuster Sued over Facebook Beacon

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In December, I wrote a post stating that Companies using Facebook Beacon as a marketing tool would get sued and demonstrated the privacy policies in effect at a number of the Beacon partners. One of those is Blockbuster, which as noted in the December post, was so over the top with it’s privacy policy. It’s, in fact, criminal, in my opinion.

Techcrunch is now reporting that Blockbuster is in fact being sued by a Texas woman who under the premise of a 1988 federal law called the Video Privacy Protection Act (18 USC § 2710) which was enacted after Supreme Court nominee Robert Bork was b0rked when video rental history was released during his confirmation hearing. The law prevents video rental companies from disclosing personally identifiable data regarding a member and his/her rental history.

Sidenote: Can someone do a LEXIS/NEXIS search for me and find out if this law has ever been upheld by the SCOTUS?

This is pretty important. Admittedly, I have not done any significant research into how Beacon works with partners since late last year, but at the time, the data was shared by identifiable email addresses. How else do you associate a users partner activity with a Facebook account?

This flew in the face of their privacy policy which stated:

Blockbuster will not provide User or Member e-mail addresses to business partners, unless the User or Member has provided express permission to Blockbuster.

Regardless of whether a Facebook user has opted in or out of Beacon advertising within Facebook, express opt-in is required on the Blockbuster side. And at the time, and pertinent to this lawsuit, even with consent it is criminal for video rental companies to share this kind of data, per 18 USC § 2710.

Stick around Technosailor for more of what you need to know. ;-)

Update: Online Media Daily writes, “But the Beacon platform still allegedly transmits information about people’s activity from Blockbuster to Facebook, unless they have checked a box telling Blockbuster to never send such information.” Enough said.

Interview with the Entrepreneur: Ann Bernard of WhyGoSolo – Part 1

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I recently had the opportunity to speak with Ann Bernard of WhyGoSolo, an innovative social networking startup here in the DC area. She has been working hard to create a platform that might change the way you look at events and various other things that you might have gone to by yourself and were looking for a buddy to join you in something that interested them as well.

The interview is in two parts and for Part 1 we discuss her background, what is WhyGoSolo and its business model and how this in this “everything for free” era WhyGoSolo will make tons of money.

So let’s get started….

1. Please provide us with a bit of your personal background in business and entrepreneurship. I was born into an entrepreneurial family ““ I was working in restaurants, arcades and on construction sites at a very young (and illegal) age and loved every second of it. Although I joined the Marine Corps, I always knew I would build my own empire someday. When I got out of the Marine Corps, I became a life and business coach and that gave me the opportunity to work with a lot of small business owners. I feel blessed because I was born business savvy ““ my clients always wanted to know how I knew what I knew and all I could say was “œIt just makes sense to me.”

2. Your current venture is WhyGoSolo – what’s your elevator pitch for it?

WhyGoSolo is the ideal online solution to quickly create one-on-one or small group connections for active participation in offline activities. The Social Media Platform For the Entertainment Industry: WhyGoSolo aims to serve as an all-in-one social media platform for event promoters and entertainment venues by providing the technology and the tools needed for online targeted promotion and community building.

3. There’s a ton of competition in the social networking space. What makes WhyGoSolo unique?

A few things:
First ““ WhyGoSolo is focused on making offline interaction take place. You don’t come to WhyGoSolo to hang out online ““ you come to WhyGoSolo to find what you’re looking for and than go out (offline) and be active. We bridge people’s online worlds to their offline worlds.
Second ““ We are building WhyGoSolo has a social platform that will act as a hub not as an end point. We’ll deliver the information our members want ““ where they want to receive it. We fill the gaps that exist on the bigger social networks.
Third ““ We are the New Media platform for the brick and mortar establishments and groups looking to create and take part in social media and building communities.

4. Since your business model seems really aligned with pushing the boundaries using Web 2.0 technologies. What is the general roadmap of your platform so readers get a sense of your vision.

Hmmm”¦not too sure how much I want to talk about this one I don’t want to jinx myself. What I can say is that at the end of the day it’s old business logic ““ provide a service that provides much added value and people, organizations and companies will pay for that service.
Everyone talks about free being the way of the web, but I don’t completely agree with that. I also don’t agree that you should build a product online and worry about the business model down the road.
So the actual answer to the question is that our general roadmap is to offer our members the most value possible and become a service they need and love. Be a service they turn to as part of a solution to either their problems or to enhance their lives.

5. Could you elaborate a little more on your approach to revenue creation?

We have three distinct revenue streams. We’re not sure as of yet which one will lead the way or how well once one is selected; we’ll be able to implement the other two. We’re raising money to finish development and hire a sales team. WhyGoSolo is a SALEABLE product and service and that will create revenue!!

That was a great Part 1 and in Part 2 we will continue our discussion of people, funding competition and what makes a startup company successful. See you next time.

On Funding: Where have all the good angels gone?

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I am in the middle of raising funding for my business right now and the one eternal question that many entrepreneurs struggle with is do I go for angel funding or go for VCs?

For many that is easy. If you don’t really have revenue and are in prototype phase without customers you are really in the seed/angel stage. If you have customers and some revenue/traffic track record you could go for venture funding.

But alot of that is changing.

I was motivated to write this post in response to a TechCrunch post “Where have all the bold VCs gone?” that took an excerpt from Paul Graham’s post “Why aren’t there any more Googles?” who astutely observes:

I used to think of VCs as piratical: bold but unscrupulous. On closer acquaintance they turn out to be more like bureaucrats. They’re more upstanding than I used to think (the good ones, at least), but less bold. Maybe the VC industry has changed. Maybe they used to be bolder. But I suspect it’s the startup world that has changed, not them. The low cost of starting a startup means the average good bet is a riskier one, but most existing VC firms still operate as if they were investing in hardware startups in 1985.

They’re terrified of really novel ideas, unless the founders are good enough salesmen to compensate.

And yet it’s the bold ideas that generate the biggest returns. Any really good new idea will seem bad to most people; otherwise someone would already be doing it. And yet most VCs are driven by consensus, not just within their firms, but within the VC community. The biggest factor determining how a VC will feel about your startup is how other VCs feel about it. I doubt they realize it, but this algorithm guarantees they’ll miss all the very best ideas. The more people who have to like a new idea, the more outliers you lose.

TechCrunch points out that most web startups don’t need $2 million, but rather $300-500K. The reason most VC’s don’t do those smaller amounts is not risk but rather resources. Many entrepreneurs don’t understand the VC fund model so I will give you the quick and dirty explanation:
- VC’s that have a fund of let’s say $100 million have only a certain amount of partners and associates that can sit on boards and actively participate in guiding the companies to their next round or their exit.
- The lower equity position for a higher investment round stays within a risk-return ratio they have established at their respective firm.
- Despite many VC’s saying they invest in risky ventures, they are still investing other people’s (their limited partners) money and have to produce a return or they are dead in the water to raise money for a future fund.

So with all of these innovative companies that only need $300-500 to really get traction and become an excellent acquisition target, where have all the good angels gone?

Back during the Internet boom (oh, those were the days) everybody and their brother with a little bit of liquid assets where investing in web companies thinking they would have the next Yahoo or Amazon. As we know, that didn’t pan out to be the case and many people went to more solid things like real estate and bond markets. We all are seeing the bottom falling out of the heated real estate market so there should be people out there ready to dip their toe into the Internet pool again.

So again I ask, where have all the good angels gone?

Sure, there are angel groups and investment groups that pool investments from rich doctors or real estate developers but their risk level is not what it should be in order to take advantage of this new market landscape.

I have a two part solution.

Part 1: A separate seed fund within a larger VC fund.

- This would be a fund of $2-5 million that would have higher risk-return and separate books for those LP’s looking for diversification in their portfolios. You could get a few associates and one partner to manage this and the fund would have a ready portfolio of companies ready for their next stage of funding with better terms.

Part 2: Angel groups need to partner with venture funds
One of the greatest challenges to an entrepreneur raising angel funding is they know that the money is enough for a while to reach certain milestones but they know they will have to almost immediately start working to raise the next round. If angel groups are partnered with VC firms the angel groups will be more apt to find these diamonds in the rough to get them ready for VC rounds with an agreement to not get badly diluted. For the entrepreneurs they will see an easier path to future rounds of funding without having to spend so much time fund raising and can focus on running their business and delivering their product.

So I put this out there to the audience, where have all the good angels gone? Do you have any examples of this working in the marketplace that we should know of? Please comment and share your opinions.

Your Blogging Success is Based on Conversions, not Page Views

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If you listen to the masses, you can only enjoy success in your blogging if you’ve got pageviews. The establishment has been setup this way and the theory is shoved down our throats from the very first day we start blogging. This theory is peddled by advertisers looking for impressions, the elbowing that occurs among bloggers trying to display their endowment and networks who build their businesses on such (Disclaimer: I work for a blog network).

I wonder if the whole establishment is backwards though.

I think the real value for bloggers, particularly business bloggers but also personal bloggers on a different level, is in the ability to “convert” readers and make them “buy in”. The old adage that “content is king” is usually used in the debate over the importance of aesthetics over the importance of hard, quality content. I think, however, that “content is king” really counteracts the establishmentarian mindset that the real value in having a blog is in the traffic that it sees.

As time goes on, it is becoming increasingly difficult to follow the breadcrumbs to where and how your content is being used. On the nefarious side, content scrapers are lifting RSS feeds and blatantly repurposing them into splogs, or spam blogs. On the completely legitimate side, content is being consumed into applications sitting behind corporate firewalls or used in industry newsletters (I can think of one such case where my content is being used in a low-tech email distribution to lawyers trying to understand social media).

This stuff can’t be tracked, and you can bet that a large portion of those eyeballs never lay their eyes on my site. Does my content be become devalued to advertisers and readers if those eyeballs never rest on my site? I think not.

Businesses have to understand that ideas are, by nature, open source and that the content they write will represent them, no matter where or how it is being used. I’ve come to a point where I don’t care if spammers use my content, because at the end of the day, I remain the authority on the topic and my reach is increased. My content is all distributed under Creative Commons Attribution-Share Alike 3.0 so, while spammers are not explicitly permitted to take my content and repurpose it, I am overtly encouraging the use of my content to extend my reach.

And that’s where the value comes in. Reach allows you to influence and shape the minds of others outside of what you would normally reach. If you insist on stipulating the use of your content from within the comfort of the four walls of your blog, you will reach your target audience, but you’ll never influence anyone outside of your target market.

Reach gives you the chance to develop new business, become a thought leader outside of your market, and extend your influence. The internet is increasingly becoming more open, despite the best efforts of over-reaching government. Just as newspapers have to deal with more people getting their news online than ever before, you have to deal with the the fact that more and more people are reading your content and engaging your ideas in unknown centers of the globe. To the winner go the spoils.

Ubica a tus Amigos con Livecontacts

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FindWhere lanza el beta de Livecontacts.

FindWhere, proveedor de servicios de ubicación y seguimiento via GPS, lanzó hoy la versión beta de su herramienta social de ubicación.

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Livecontacts funciona en cualquier red celular GSM y eventualmente funcionará en teléfonos sin GPS. Según la compañía, pronto podrás incluir data de ubicación en tu mensajería de texto, juegos y redes sociales desde tu celular. El sistema de ubicación puede ser activado por el usuario según su preferencia.

La posibilidad de ubicar a tus amigos en tu celular (y que estos te ubiquen a ti) abre interesantes posibilidades (dodgeball ha intentado algo parecido), pero también nos obliga a pensar más a fondo en nuestra privacidad y hasta donde estamos dispuestos a cambiarla por comodidad.

Hasta ahora hemos estado dispuestos a compartir mucho de nuestra vida profesional y cotidiana via redes sociales como Twitter y Facebook con perfectos extraños que sólo conocemos por referencia (a veces de otros extraños). Aplicaciones como Livecontacts nos permitirán compartir nuestra ubicación física con nuestra red social… fomentando encuentros en el mundo físico. Se cierra de esta forma el círculo social, usando la internet para encontrarnos fuera de ella. Espero que esto sea para bien de los usuarios y nadie salga lastimado.

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Social Media Is Only As Valuable as What You Put Into It

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As a company, your job is to make money. Trust me, I get it. Launching into social media is a scary place to be, if you’re a company that has not historically embraced transparency and customer facing transparency. Again, I get it.

However, in todays age, it is becoming increasingly difficult to simply not engage in the conversation happening around you. It’s going to happen. The feedback will occur. My friends in PR have taught me the idea of “getting out in front of a problem”. This concept says that if there is a potential for bad press, you do what you can to try to avert the nightmare by proactively engaging the customers.

There’s nothing wrong with being wrong. It happens all the time and any company who thinks they are immune to mistakes should not be in business. More importantly, any company who thinks they are immune to the weight of social media also is deceiving themselves.

Recently, on Twitter, Comcast showed up on the scene when Mike Arrington had a most unfortunate situation involving many hours of downtime. While the talking heads have talked extensively about the fact that Comcast called Arrington up after seeing his tweet, I’d like to look at the aftermath.

Frank Eliason, presumable a customer relations manager at Comcast, registered Twitter username ComcastCares. Some folks have complained about the nuance of the name and that Comcast really doesn’t care, but putting all that aside, the outreach has been simply amazing.

It is unclear if ComcastCares is officially sanctioned by the company, however it is obvious that Frank is in a position of some power and influence and is able to get things done at Comcast. On Sunday night, Frank was seen engaging many customers about problems they had and services the company offered. Some of the conversations got heated and were handled as ably as possible.

As a company looking to dive into social media, you can take two routes. You can setup a blog and use it as a one way communication tool, posting blurbs about your company and not engaging in a whole lot of conversation (maybe comments are turned off). On the other side of the spectrum, you can jump into Twitter and Facebook and blogging, etc fully prepared for and engaged in the exchange of ideas with your customers.

Direct2Dell is a great example of a company who has done the latter. At the end of the day, your company will get as much out of social media as you put into it.