Writing for B5 Media – Come on over to Startup Spark

Hello all, just wanted to let you know that I have been offered an opportunity to write for a great blog on the B5 Media Network.

The blog is called Startup Spark and is similar to Venture Files but is a broader version on all types of entrepreneurship.

I invite you to check it out and subscribe. This blog will continue but in the coming months I will be focusing this blog more on innovation topics and will be unveiling a new design.

So keep reading Venture Files and add Startup Spark to your feed reader and your daily viewing.

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An Entrepreneur's View: 5 Things Digg needs to do or it will die in 2008

I was guest blogging for my friend Aaron Brazell who writes Technosailor. We live near each other and run into each other at Starbucks living the Bedoin lifestyle.

We talk alot about the techology scene and I made the comment that Digg would be dead or made irrelevant by next year. So he challenged me to write about it on his blog.

The original post is here.

I did a repost below to read the article as an alternative:

The Future of Web Apps (FOWA) conference this week and Kevin’s presentation “The Future of Crowd Generated Media” got me thinking about how long Digg might last or stay relevant.

Granted, Jason Calcanis wrote a month ago about how Digg would “die a death of 1000 cuts”. He is right that they own the “Young Tech Male” or YTM demographic and it is hard to go beyond that group. I subscribe to Netscape and the quality of articles are dramatically different. Netscape has far fewer votes but the news is real and relevant (their interface just needs work).

The death of Digg will not be 1000 cuts but because of its failure to extend and protect its brand. So much time has been spent on covering them and how cool they are that they have ignored the fact that there is no reasonable way it can meet its revenue goals.

Jason does a good analysis of the deal and I agree on the valuation. To quote directly:

“The real challenge for Kevin and Co. at digg now is that they probably raised their $8.5m round at 60-80M post-money. That means that the latest round of investors are going to look for 10-20x that amount as an exit. That’s a 600M -1.6B exit. That means they have to get to $30-50M in revenue. That means that Kevin is right when he says they have no interest in selling the company–they’ve got 4-5 years of work to get to those revenue numbers… start building the sales for now because to hit those numbers you need a 20-person sales team.”

Kevin Rose says that they have not interest in selling and that is smart. Unfortunately, in 4-5 years Digg will be irrelevant so he has about 1-2 years to make it work for an exit. You are seeing the beginnings of chinks in the armor. Friends list or no friends list, spammers, censorship, gaming the system and a lot more. Digg did not invent “social voting”, Slashdot did and Digg only got popular because the YTM saw this as a better venue to troll and trash each other. Their community is powerful (900K as of this writing) and the “Digg effect” is far reaching for what geeky things they find interesting.

In fact, every new site that adopts “social voting”, Netscape included, has been profiled as “taking the Digg approach”.

So is Digg going to become a verb like Xerox or Tivo and lose its brand equity?

In order to save this company and keep it going here are the five things I would do in the next 12 months to maintain Digg’s leadership:

#1 – Don’t fight the Digg Clones – Own them – There are Digg clones popping up all over the place. Why not screen them and make them niche sites within the digg community. Similar to a blog network (like B5 Media). This will create a niche army of targeted sites. Digg has created a brand for the Young Tech Male so it is going to be near impossible to break away from that perception. It needs this to stay on top.

#2 – Do a deal with MySpace – These are your future users and huddled masses looking for ways to make MySpace more relevant. The Digg model for artists, MySpace blog entries and news could add a whole new dimension to the ugliest site in the world. The revenue share could be gigantic.

#3 – Create a relevance metric for contributors – We should know that there is more weight on a submission from a 50 year old PhD with expertise in that topic than a pseudo-intellectual 16 year old.

#4 – Hire topic editors – Now, we don’t want to run the risk of paying Digg members to submit. This is quite the opposite. We want new people who can help monitor and own a topic to add value, prevent bias and . Social voting is great but there must be oversight or the “Wisdom of Crowds” will turn into the “Wisdom of Mobs”.

#5 – License the Digg software to major news outlets and Fortune 500 companies – Let’s face it, traditional media can’t keep up. Some are just now finding blogs and a limited few are experimenting with the Social Voting/Digg approach. Why not have Digg show them how to do it and take ad money and license revenue from the deal? Dell’s new site should have been running a Digg system feeding back to the mothership. In this case, it just borrowed the concept, baked it up and served it to customers. Digg not included….

Otherwise, if things like this are not done in the next 12 months, Digg will be outdone by a site that is cooler and sucks the core “Diggers” to the new site.

If you were the entrepreneur in charge of Digg, what would you do?

I look forward to everyone’s feedback.

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Welcome to Thunderdome: Bill Gates and Steve Jobs on stage at the D Conference

When I read that Bill Gates and Steve Jobs were going to be on stage together doing joint appearance at D:All Things Digital, the Mad Max movie came to mind.

My mind kept echoing….”Two men enter. One man leaves. Two men enter. One man leaves.”

Unrehearsed and unscripted? This is rare and should be a memorable event.

This is going to be the ultimate in geek spectator sports and for the entrepreneur’s out there an interesting study in communications styles and how to handle yourself in a tough crowd.

God I hope they stream this for those of us who can’t make it up there.

Source:
Bill and Steve’s Excellent Adventure

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Social Networking 4.0 – Meta Social Networks

Social Networking has gone through three phases so far and I firmly believe that we are at the beginning of the fourth phase.

I refer to these first three phrases from Dave Hornik’s seminal blog entry “Social Networks 3.0” written in December 2005. I accept his interpretation of the first three phrases as follows:

Social Networks 1.0 - Group communications (i.e., AIM, ICQ, eGroup)
Social Networks 2.0 - Basic and Broad Social Networks (i.e. Friendster, LinkedIn)
Social Networks 3.0 - Experience based and more niche focused

Unfortunately, this has left us with a multitude of social networks that just make the noise much louder and they will surely fail because the are selling to the echo chamber and not doing something innovative.

So where does that lead us?

With Om Malik’s post “Are Social Networks Just a Feature?” it got me thinking as to how things are starting to froth to the point where they either need to converge, consolidate, commit suicide or connect. Marc Canter is one person that has it right and has put the tools in place to enable your personal social network or define a niche one with a white label solution. Now this could contribute to the noise, but on the other hand it could allow people to be in one place and aggregate their social network memberships and relationships.

With the recent press coverage of social networks finding new growth with APIs there is the beginning of a ground shift that over the next 18 months will lead to Social Networking 4.0.

So what is Social Networking 4.0?
Social Networking 4.0 is what I call Meta Social Networks. Om is right that tools that build this as a feature will exist but I don’t think many have the desire or sufficient motivation to build a MySpace. I believe that this will lead to increasing the value of intranet systems and back a few years ago when “portals” was the big buzzword, we used to call this concept “Enterprise Expertise Portals”.

The extension of these API’s will allow not only wicked cool Mashups (that is for a later post) it will allow some smart enterpreneur (HINT: FREE BUSINESS OPPORTUNITY HERE) to create an identity portal that allows you to manage your profiles on each network and all the details, yet respecting the dotted lines – FOR EXAMPLE: keeping your Goth Emo profile on MySpace separate from your professional business resume on LinkedIn is a necessary thing. Unless you wanted to let your business colleague know about your penchant for black and finding everything so depressing. Then again, they might already have a clue….

So eventually your “Identity Portal” could use various plugins and mashup API’s to take the social networking sites to another level.

This actually leads us full circle to Om Malik’s post of social networks becoming a feature. But in my opinion they would be called foundation and not just a feature.

Still, there are some challenges to overcome:

  • Multiple Identities – This could be overcome with an identity portal but standards like OpenID could help move this along.
  • Social Network API standard – It is good some are opening up. But there should be some standardization of basic profile data so it is easier to work with when connecting to profiles.

I look forward to hearing the communities thoughts on this and if it might work, what other challenges and what “Identity Portal” you might build.

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Is the "Cult of Apple" really a cult? – Part 2

In the first part of this post I was talking about an article called “The 8 Marks of a Cult” and took with a sense of humor how Apple might size up to this analysis originally written in 1961.

So let’s take the remaining 4 Marks and see how they shape up…

Mark #5 – The “Sacred Science
Definition: (Taken from “The 8 Marks of Cult“)
The cult’s ideology becomes the ultimate moral vision for the ordering of human existence. The ideology is too “sacred” to call into question, and a reverence is demanded for the leadership. The cult’s ideology makes an exaggerated claim for possessing airtight logic, making it appear as absolute truth with no contradictions. Such an attractive system offers security.

Observing Apple’s Actions
This is a tough one. Although using Apple is not the ultimate moral vision for the ordering of human existence, in the IT world everything Apple is sacred and people do demand reverence for the brand in a way that they can do no wrong despite many examples of the contrary (i.e. Lisa, Newton, Mac Clones). Yet the Apple ecosystem does present this air of security because everything works together very well when everything is an Apple product.

Close to the Mark? 6 on a scale of 1 to 10

Mark #6 – Loading the Language
Definition: (Taken from “The 8 Marks of Cult“)
We are all familiar with the use of the cliches “capitalist” and “imperialist,” as used by antiwar demonstrators in the 60’s. Such cliches are easily memorized and readily expressed. They are called the “language of non-thought,” since the discussion is terminated, not allowing further consideration.

Observing Apple’s Actions
Apple’s language for the most part is full of “i” and “Mac” but that is just branding. Where they really hit the mark is “transforming”, “innovation” and “breaking away”. I don’t see it much but it is there.

Close to the Mark? 4 on a scale of 1 to 10

Mark #7 – Doctrine Over Person
Definition: (Taken from “The 8 Marks of Cult“)
Human experience is subordinated to doctrine, no matter how profound or contradictory such experiences seem. The history of the cult is altered to fit their doctrinal logic. The person is only valuable insomuch as they conform to the role models of the cult. Commonsense perceptions are disregarded if they are hostile to the cult’s ideology.

Observing Apple’s Actions
This one is strong at Apple. From what I read if you work there, you don’t really matter insomuch as how you contribute to the doctrine of Apple and its ultimate goal to rule the universe through innovative products that transform industries. It is interesting when you look at the history of Apple . Most recently at Macworld, the name change from Apple Computer to Apple, Inc. might have many thinking it is to allow them to be the Sony of the 21st century. However, it might be to alter the doctrine that the company was a consumer electronics company all along when we know they were and are a computer company. If you disagree, Apple will get hostile with you and might even sue.

Close to the Mark? 7 on a scale of 1 to 10

Mark #8 – Dispensing of Existence
Definition: (Taken from “The 8 Marks of Cult“)
The cult decides who has the “right” to exist and who does not. They decide who will perish in the final battle of good over evil. The leaders decide which history books are accurate and which are biased. Families can be cut off and outsiders can be deceived, for they are not fit to exist!

Observing Apple’s Actions
As for the history books we only need look at the bios like iCon or movies (Pirates of Silicon Valley) where Steve Jobs didn’t have input and got pissed off about it.

As Apple introduces new products it expects to dominate in and almost without saying it has the power to decide who lives or dies.

It is a stretch and therefore a low mark.

Close to the Mark? 4 on a scale of 1 to 10

SO THE FINAL ANALYSIS?
Well, adding up the numbers we get 51 out of 80 or 64%. There is no scale as to what it should be graded but I will say with that high of a number that we can scientifically (yeah, right) prove that the Cult of Apple is a real thing.

So I just want to know one thing. To donate all my possessions and give myself over to the cult, do I have to make the trip to Cupertino or will any Apple Store do just fine”

Is the "Cult of Apple" really a cult? – Part 1

As an avid Mac user and a new convert to all things Apple, I have experienced the RDF (Reality Distortion Field) first hand at MacWorld last year during the key note when Steve Jobs launched of the MacBook Pro (which I am using right now).

I have seen many books on the “Cult of Mac” or “Cult of Apple” but with the growth in market share and its appeal to the masses, I wonder how much is really true.

This weekend I came across an article called “The 8 Marks of a Cult” and it was written in 1961 when the beat movement was in full swing and the Communist threat put our paranoia on full alert.

So with full tongue and cheek humor, let’s take the 8 Marks and see how they shape up…

Mark #1 – Milieu Control
Definition: (Taken from “The 8 Marks of Cult“)
“Milieu” is a French word meaning “surroundings; environment.” Cults are able to control the environment around their recruits in a number of ways, but almost always using a form of isolation.

Observing Apple’s Actions
If you look at how they talk to the press and keep a tight lip on product releases their control of the press is legendary. Witness the Macworld Keynote where they absolutely control the environment and it is filled with MacHeads in isolation waiting for Steve Jobs.

Close to the Mark? 7 on a scale of 1 to 10

Mark #2 – Mystical Manipulation
Definition: (Taken from “The 8 Marks of Cult“)
In religious cults, God is ever-present in the workings of the organization. The organization is given a certain “mystique” that is quite alluring to the new recruit.

Observing Apple’s Actions
Everywhere there is Steve Jobs. Steve Jobs is everywhere. There is no more to really say here

Close to the Mark? 6 on a scale of 1 to 10

Mark #3 -Demand for Purity
Definition: (Taken from “The 8 Marks of Cult“)
The world is depicted as black and white, with little room for making personal decisions based on a trained conscience. One’s conduct is modeled after the ideology of the group, as taught in its literature. People and organizations are pictured as either good or evil, depending on their relationship to the cult.

Observing Apple’s Actions
All the products are usually in black and white with the “professional” silver throw in. Don’t forget the occasional colors to mix it up but it always comes back to black and white.

Another example – Apple good. Microsoft evil. I would say that is pretty black and white, wouldn’t you?

Close to the Mark? 10 on a scale of 1 to 10

Mark #4 – The Cult of Confession
Definition: (Taken from “The 8 Marks of Cult“)
There is often a tendency to derive pleasure from self-degradation through confession. This occurs when all must confess their sins before each other regularly, creating an intense kind of “oneness” within the group. It also allows leaders from within to exercise authority over the weaker ones, using their “sins” as a whip to lead them on.

Observing Apple’s Actions
Most people who switch love to start their story with confession. “I used to be a Windows user for 10 years until I found the Mac and made switch”. As if almost they have found oneness to admit their wrong and connect with the fellow MacHeads.

Close to the Mark? 7 on a scale of 1 to 10

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NEXT TIME: Part 2 and the other 4 Marks analyzed.

The Technology Cold War is OVER – Apple and Microsoft are truly competing again…FINALLY!!

The nucleus of this article came from the recent Macworld theme “The First 30 Years where just the Beginning”.

It got me thinking how the next 30 years will be after looking the last 30 years roller coaster ride.

After decompressing from all the CES and Macworld activity, two very basic things occurred to me:

1.) The “War for the Living Room” is in full swing.
2.) Microsoft and Apple are truly competing again.

This means that the technology cold war is over. A new battle is about to begin.

To support my “revelation”, I did a quick analysis of the battles between Microsoft vs. Apple and I break down like this:

Tech War I -“The War for the Desktop” – 1980-1995

Most historians see this era as the “personal computer era”, but by 1990 it was squarely Apple vs MS as they battled it out to be that computer on your desk or optionally on your lap. This saw the acceptance of computers as a broad business tool and networking technologies take hold to connect us at the corporate level. Unfortunately, Apple lost this round and Microsoft gained market share dominance that they hold to this day.

Cold War – 1995-2006 – Mild escalation

As Apple went through its issues and almost disappeared forever, Microsoft was truly entrenched in the office and almost every home that had a computer. For most of us, the focus turned toward the Internet and we had a new battle to fight. Microsoft was late to the game and has played catch up for the most part. As the 90’s were coming to a close, Steve Jobs returned to Apple and many hoped for a turnaround. In the early part of this century, Apple introduced the iPod and just last year moved their platform to the Intel chip gaining market share and making the platform a solid alternative for many (including your humble author). At this point, Microsoft is losing the Internet battle to Google and Apple has regained market share because of solid innovation.

Tech War II – “War for the Living Room” – 2007-“?

Computing has become not just about using it as a tool in the home office or while at work, it is integrated into every aspect of our lives. Laptops, PDAs, Smartphones, Cell Phones, Web Tablets, Video Game consoles and MP3 players connect and distribute media into exciting new ways.

However, there is on thing missing – bridging the gap between the content that resides on computing devices and allowing easy access and viewing/listening through living room via the TV. Sure, MS has media center, but at $2000 for a machine and needing to have a background in systems engineering, it really was for the early adopter. There have been many devices for the iPod to connect music into the stereo and low end devices to view videos on the iPod.

But with technologies like Tivo and IPTV, the living room is where people really want to view their content. Everything is trapped on the computer and this year is the tipping point where people will really move to access it in the living room.

HERE IS HOW I GOT THERE:

WHAT I DON’T KNOW
If Windows Mobile will be able compete with the MacPhone
If Microsoft make the Zune a worthy competitor?
If Vista make any impact other than collecting default revenue because people need to upgrade their computer and don’t have a good choice.
If Apple’s OS X Leopard will innovate to stay ahead
If Apple’s shift in name and brand put them on the path to become the Sony of the 21st century?
Will Microsoft make the Media Server easy to use and affordable?
Will DRM kill everything by charging and re-charging for content we already own?
WHAT I KNOW
If Microsoft doesn’t put on its innovation pants, it is going to lose this battle by the end of the decade
If Apple keeps going with widescreen iPods, multiple iPhones, HD content for sale on iTunes and greater AppleTV systems, they are going to create the “Living Room ecosystem” people are crying for
If Apple keeps its control freak nature for much longer, Microsoft can trump them with a system that allows for freedom
It is going to be a fun time to be alive as these two companies really go at it again.
This year is going to be known as the “War for the Living Room”.

So, What do you think?

OTHER GOOD ARTICLES TO REFERENCE:
The Microsoft showdown with MacWorld & the Apple Phone from VentureBeat
Jobs versus Gates

Bubble, Bubble, Bubble. – In Private Equity not Web 2.0

Being a serial entrepreneur I have been through many business cycles, but the Internet boom of the late 1990’s was an extremely heady time. People were so enamored with what the Internet could do, every one really believed that the old rules didn’t apply.

The reality was that those rules applied more than ever and with the crash in the early part of the century we have tried to learn our lesson.

With these new companies deemed Web 2.0, everyone is expecting another bubble. So many of the same types of companies have been funded so there are bound to be consolidation and just plain failure.

According to Michael Arrington, his entry “Bubble, Bubble, Bubble“, the despite the fact that some companies are failing, the sky is not falling.

In fact I would call this time around the ol’ startup track “saner, saner, saner”.

Despite many of these companies basing their success on being an aftermarket for Google, the smart ones I think many people know that you have to be in this to create a real enterprise and one that makes money. It is not so much about the VC’s but about the ability to use the low cost and barrier of entry to innovate.

But the DEAD POOL is not cool .

I think that the blog A VC gets it right his counter points on “Building It Up and Then Knocking It Down” are right. He says “over hyping young companies where people are working their butts off and then throwing them overboard quickly into a “dead pool” when they fail is not healthy.

I believe it is dead wrong to put this up there. It just feeds the fire for the chicken little’s of the world. Mike Arrington has known successes when he co-founded helped flip Achex and sold it to First data. I don’t know if he has experienced building a company from scratch and having it fail, many times from circumstances out of your control.

BUT THERE IS A BUBBLE DEVELOPING and not where you think…..

The bubble is not with companies it is in the private equity market itself. The model of funding and the way people are evaluating companies is changing. The way investors look at companies is not based on a fast IPO but aligning it to be a sweet acquisition target.

This is helped in no small part since most VC’s invest like they are teenage girls. “Oooo, you invested in a video sharing site, I want one too! You put $5 million into social networking for eco-friendly baby boomers? Find me one so I can get one too!!

HERE IS HOW I GOT THERE:

  1. The amount of money chasing deals have lightening strike twice to find that repeat of unrepeatable past returns is growing rapidly
  2. The number of opportunities are declining and there are too many copycats plus the cheap money is pouring out to fund them.
  3. Not enough VC’s to serve on boards effectively and make the existing investments get to a proper exit
  4. IPO market is still not there and there is and there are only so many acquisition partners
    Higher prices of entry and lower returns

WHAT I DON’T KNOW:

  1. When the IPO market might be friendly to tech stocks
  2. If investors will broaden their portfolio choices to get their money working in unique ways
  3. If funds might start giving their money back

Only time will tell if this comes to pass. If you have a good idea, the money is out there but might not be for very much longer.

Crystal Ball? 2-3 years or mid-2008 this is gonna come to a head. Only time will prove me right or wrong.

Analyzing the Keynotes: Bill Gates and Steve Jobs

This is fascinating. I was thinking of doing an analysis of Steve Jobs and Bill Gates keynotes. I watched them both and their styles are so different.

Steve Jobs is the modern day PT Barnum. His charm is high and his enthusiasm is contagious.

Bill’s Keynote was tired and a bit boring with skit like demonstrations. The Windows Server was cool, but the iPhone that Steve Jobs presented was light years beyond.

This analysis is great and includes Michael Dell.

Bill Gates and Steve Jobs: Keynote text analysis

What really strikes me is the “Average Words per Sentence” number.

SJ is at 10.5
BG is 21.6
Michael Dell is 16.5

The bottom line for a communications guy like me is that shorter sentences that are not dense with fancy words works the best. It is nice to have this proved for the hard numbers people out there.

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iPhone Lawsuit – Kettle? Please meet the pot.

I find it ironic that during the Macworld Keynote yesterday where Steve Jobs boasted about the 200 patents for the iPhone and how they would enforce them that they get a lawsuit for the one thing they couldn’t protect.

So Kettle, please meet the pot. It will be a fun topic of discussion and give Apple free press for the next 6 months.

My guess? I am betting it becomes the ApplePhone. Cisco will keep the name and their product will continue to suck and not make money. Apple will change the name and everyone will go “that’s great”!

It all depends on branding strategy. It seemed like the “i” was for consumer electronics and the Mac was for computers. With the iTV now AppleTV, I just don’t know.

Could it be…..

THEN: iTV
NOW: AppleTV

NOW: iPhone
FUTURE:”?

This will have to be worked out by June, no matter what.