Category: The Internet

The movie Crash is #1 on Netflix

Posted on

crash_poster

I read a really interesting article today.  It turns out that since 2005 the movie Crash has been the top rented movie from Netflix.  That’s 4 years of renting.  Crazy to think about.  The article interviews the writer/director Paul Haggis about this phenomenon. He has no idea why this is the case and has some funny quotes:

“I just assumed it was some sort of anomaly,” Haggis told the Tribune recently. “I have no idea why anyone went to the movie in the first place, let alone rent it. It was a little independent film, and when people started to see it, I was amazed.”

“It doesn’t make it any better of a film. I just know that these were things that were upsetting me, and I wanted to get them out,” said Haggis. “I happened to like my second film [‘In the Valley of Elah’] better than ‘Crash,’ but no one went to see it.”

It doesn’t mention that maybe it’s because it won the Academy Award for Best Picture and nobody saw so everyone put it in their queue.  I wonder how many people got it delivered to them and sent it right back so they could get disk 3 of House a little bit faster.

Reblog this post [with Zemanta]

Fred Wilson's Take on Twitter

Posted on
Image representing Twitter as depicted in Crun...

There’s a good video by Fred Wilson about Twitter and what he, as an investor in it, thinks about it.  What he boils it down to is three points:

  1. “the single most important is that twitter from day 1 is a platform that others can build upon”
  2. “it is very one-dimensional…it doesn’t do anything that is not in the timeline….It’s power comes from that – it’s straightforward”
  3. “Twitter is the news feed for the web” as people embed links in their tweets and it’s now an alerting system

What else is interesting is that Twitter wasn’t pitched to Fred but rather he was an early user of it and he pitched to them to try to get them to take money from Union Square Ventures.  This is why i think Fred is one of the best VC’s in the business because he uses the products.  The web is all about product.  It’s not like the industrial revolution, it is a consumer facing which means that the usability is extremely important.  He is an early adopter and gets into the weeds. I have a hard time imagining other VC’s using Twitter when it was still a part of Odeo.

[youtube=http://www.youtube.com/watch?v=Fzl5k2B84Kg]

Reblog this post [with Zemanta]

I Do Not Agree with the Hog Pile on Facebook

Posted on

There’s a growing trend in the media to attack facebook.  It started when their redesign got pretty bad reviews, continued when their CFO left, and now is gaining steam as mainstream outlets are questioning it’s core business proposition. There are three different things here and the media is pointing to them as an indication of Facebook‘s failure.  I disagree.  Here’s why:

Product enhancements. One thing i’ve admired about Facebook is their ability to keep pushing their product forward.  They introduced a great photo experience before any of their competitors (and have grown to be #1 on the web).  Even as they were experience phenomenal growth (they hit 8 million student readers), they completely redid their home page when they introduced the News Feed.  While initially hated by their users (FB blog) and the media (Time article), it set the standard for how social networks should display user activity and is now seen as a stroke of genius.  And growth climbed even higher.  At 70 million users they then completely redid the profile page to be a feed-based page as this is the best way for users to continuously portray themselves (see Tumblr for an example).  This was hated at first too.  Now, they redone the Facebook Home page to better showcase conversations and user activity.  Is it like Twitter? Yes.  Is it hated by their users? Yes. But it is also an improvement.  More than any other company i know of, Facebook is constantly pushing to get better in all areas and doing it fearlessly.  Even if they misstep, I applaud them for it.  From my experience at AOL i’ve seen that when yoy have a large user base it’s very easy to become tentative and second-guess every move.  Not changing becomes the easiest path.  It also means you start dying.   This latest change is more an indication that they’re not dying but moving forward.

Valuation.  Facebook got an absurd $15 billion valuation from Microsoft when it sold them some equity.  That deal was more than just equity sales but it also solidified Microsoft’s relationship with them as their exclusive third-party ad provider (story).  That valuation has become a problem as every new raise that happens in the industry (Twitter,  FriendFeed) is evaluated against it.  Facebook is now raising at a more reasonable level at a $5 billion valuation.  I don’t think this is an indication of failure of FB but rather a reflection (a) that these raises are straight equity and not part of an ad sales agreement, and (b) the market is the worst it’s ever been.  I think it’s ridiculous to think that the environment is the same as it was in October 2007.

Business Model. The media talks about Facebook’s failure to make an ad business out of their inventory.   Time’s article this past week was called, “Facebook Takes a Dive: Why Social Networks Are Bad Businesses.” This is completely ridiculous.  First of all, MySpace is making money.  Let me repeat. MySpace is making money.  They were bought by Fox for $580 million and they then immediately did a deal with Google to sell ads on their search page from 2006 to 2010 for $900 million dollars (details here).  That’s a quick profit of $320 million.  Everything else on top of that year-in and year-out seems to be gravy.  The article in Time continues to say:

What is true is that social network sites have had trouble making money. MySpace was supposed to be a big part of the revenue growth at News Corp. Wall St. thought Murdoch was a genius to buy it. Last year, News Corp had to admit that MySpace would not hit its revenue targets. That is usually not the hallmark of a property that is going to take over the Internet.  Analysts believe that MySpace rival Facebook had revenue of $265 million last year. That is astonishingly low for a company that had 57 million unique visitors in the U.S. last month. And, Facebook also has a very large international user base.

So let me get this straight, even though MySpace is profitable at $500-800 million dollars a year in revenues and even though it’s generated hundreds of millions of dollars for News Corp it’s a bad business becuase they missed their revenue target last year?  That is completely ridiculous. Facebook is a differnt issue.  They have repeatedly said that they are deprioritizing ad revenue and instead focusing on growth and user engagement. Since they started saying this (starting in late 2007), they have grown from 50 to 200 million users.  I’d say that’s pretty good execution. Facebook makes about $275 million a year.  Could they make another 100-200 million if they started selling more ads on search pages and profile pages?  Absolutely.

All of these reasons above are why sensationalist articles discussing the demise of the social network drive me nuts.   Nobody knows what the future holds, but one thing that we can pretty much be sure of is that sites that have great user engagement and activity – and facebook has over 20 million users update their status at least once a day – will get the ad dollars.  Nick O’Neil has a good post on AllFacebook today on why he’s willing to pay a $34 CPM on facebook.  It’s not the silver bullet but it shows that there is a profitable end in sight for the company and it’s not necessarily the horrible business the media would like it to be.

Thoughts on URL shorteners

Posted on
Image representing bit.ly as depicted in Crunc...

This week there was lots of buzz around Bit.ly, a URL shortener company from Beatworks that raised 2 million dollars.  Betaworks is an incubator started by John Borthwick who i had the priveldge of working with at AOL.   Bit.ly is pretty sweet. Check out the things it can do for you:

  • It uses a cookie to remember the last 15 links you’ve shortened and displays that history on the home page when you visit
  • It allows you to set up a custom URL ending for your link.
  • It automatically creates 3 thumbnails for every page you save a link to.
  • It saves a cached copy forever of every page you shorten a link to, on Amazon‘s S3 storage (processing is done on EC2, as well, so uptime looks good).
  • It tracks click-through numbers and referrers so you can see what kind of traffic your shortcut got and from where.
  • There’s a simple API for adding Bit.ly functionality to any other web app
  • It uses Reuter’s Calais to determine the general category and specific subjects of all the pages its users create shortcuts to.
  • All the data, including traffic data and thumbnails, is easily accessible by XML and JSON feeds.

That’s pretty slick indeed.  I think it’s interesting to see that investors see a service that helps developers and others garner more value from the web as a legitmate business. I’m presonally not sure where the business is in there.

An interesting post i read related to this is Delicious Joshua Schachter’s blog post about URL shorteners.  As he states, there are 3 people involved in shortening: (1) the site the link refers to, (2) the site/service  – the transit – containing the shortened URL, and (3) the user clicking on the shortened URL.  In his view, ALL are harmed from this service.  As he states:

The transit’s main problem with these systems is that a link that used to be transparent is now opaque and requires a lookup operation. From my past experience with Delicious, I know that a huge proportion of shortened links are just a disguise for spam, so examining the expanded URL is a necessary step. The transit has to hit every shortened link to get at the underlying link and hope that it doesn’t get throttled. It also has to log and store every redirect it ever sees.

The site where the link points to has milder problems. It’s possible that the redirection steps steals search juice. It certainly makes it harder to track down links to the published site if the publisher ever needs to reach their authors. And the publisher may lose information about the source of its traffic.

But the biggest burden falls on the clicker, the person who follows the links. The extra layer of indirection slows down browsing with additional DNS lookups and server hits. A new and potentially unreliable middleman now sits between the link and its destination. And the long-term archivability of the hyperlink now depends on the health of a third party. The shortener may decide a link is a Terms Of Service violation and delete it. If the shortener accidentally erases a database, forgets to renew its domain, or just disappears, the link will break. If a top-level domain changes its policy on commercial use, the link will break. If the shortener gets hacked, every link becomes a potential phishing attack.

Those all sound hairy, although it seems that Bit.ly has taken care of the some of the problems of the site disappearing by caching the page.  Even still, is the additional metrics provided by Bit.ly worth the loss of SEO juice?  It will be interesting to see how services like this begin to change the linking landscape and whether their services of providing accurate gauges of what’s “hot” are useful

Related articles:
Reblog this post [with Zemanta]

Go narrow and do 1 thing well

Posted on

I did an interview last night for USC business school where i was asked a lot of questions about Qloud and its beginnings.  Questions like “What advice would you give to aspiring entrepreneurs? What have you learned?”  Well here goes…

i often hear people talk about “doing something big.”  While I admire their desire to change the world, i find it interesting that quite often the companies that do end up changing the world started as small passion projects/startups.  And the business model they find is usually nowhere in sight at the beginning.  Some examples:

  • Facebook started as a Harvard-specific tool to get people to better interact with each other.  After it worked well for Harvard, it expanded to the Ivy’s (and Duke & Stanford), then slowly to other schools and eventually everyone.  That wasn’t it’s original goal.  They just wanted to make it easy for people to hook up – i mean, connect
  • Craigslist started as an email list to share functions, jobs and stuff in San Francisco.  They sat in an office and got emailed tips as to what was going on.  They then added some comments and emailed it out and eventually just posted it to a web site.
  • The Google guys were in grad school and staring at some big servers they had.  One idea they wanted to try was to index the entire web.  Once they did that, they then had to brainstorm as to what they could do.  They never started with the desire to dominate web advertising.  Larry Page Speech
Kathy Sierra at SXSW

This thought of doing something you believe in and are passionate about regardless of the size really hit home for me when i heard Kathy Sierra’s keynote at SXSW this year. She had 16 points on how to make breakthroughs happen.  Point #15 was Don’t mistake narrow for shallow. She pointed at hyper-focused blogs like Passive Aggressive Notes and the “Blog” of “Unnecessary” Quotation Marks as mastering a very tiny sliver of the internet. But you could point to the 3 i mention above (Facebook, Craigslist, and Google) as examples of companies that started narrow and gradually expanded to be game-changers.

When thinking about companies, i think it’s important people try new ideas and things they are passionate about. You’re going to be working 24 hours a day 7 days a week on one idea, so you have to love it. Or as Tim O’Reilly says Work on Stuff That Matters.  It’s clear that startups don’t have all the answers when they begin so at least you can start with something you’re willing to continuously think about.

I was again struck with this thought this morning when i read Clay Shirky’s great post about newspaper and the change they are going through.  He too talks about Craigslist saying:

Imagine, in 1996, asking some net-savvy soul to expound on the potential of craigslist, then a year old and not yet incorporated. The answer you’d almost certainly have gotten would be extrapolation: “Mailing lists can be powerful tools”, “Social effects are intertwining with digital networks”, blah blah blah. What no one would have told you, could have told you, was what actually happened: craiglist became a critical piece of infrastructure. Not the idea of craigslist, or the business model, or even the software driving it. Craigslist itself spread to cover hundreds of cities and has become a part of public consciousness about what is now possible. Experiments are only revealed in retrospect to be turning points.

So, my advice to aspiring entreprenuers is – (a) focus o  something you love; (b) don’t focus on changing the world but rather focus on doing something, one thing, extremely well.  If you execute on those 2 points, it’s easy to expand into something more powerful and profitable.

Reblog this post [with Zemanta]

Raising Money Suggestions

Posted on
Travis party
Image by pescatello via Flickr

This is a great post done by my boy Travis Kalanick who is one of the most kick-ass entreprenuers out there. He kept RedSwoosh alive from 2001-2008 before he sold to Akamai.  There are quite a few tough years in there but he completely scrapped it out and rocked it.  His post outlines what every entreprenuer needs to know when raising money.  Check it out here.

One part i liked talks about bringing the passion, saying:

Passion/Chrisma is the X-factor. It separates the men from the boys in fundraising. If you’re doing a startup, you’re trying to change the world, you’ve kicked your cushy job to the curb, you’ve had Ramen noodles for breakfast lunch and dinner as far as you can remember, and maybe you’ve moved back in with the ‘rents. You’ve definitely got the passion…why else would you be doing this? Don’t be afraid to show it. Every pitch could be your last one (i.e. the dude across the table writes you a check!), know that… give it your all… listen to some music that pumps you up before you get into the meeting, think about all of the great shit you’re doing and could do.

My favorite music to listen to is this speech by Al Pacino.  I find it really motivating – and it got the job done when i was pounding the pavement in Palo Alto. Click here to listen:  Inches are Everywhere!

Reblog this post [with Zemanta]

Twitter Thoughts – More like MySpace than Facebook

Posted on

I spent a lot of time this weekend explaining Twitter to people.  People want to know not just what it is but why they should use it.  It’s confusing for people who have never tried it.  It’s so simple yet so confounding.  This chart explains the early stages well: twitter3

One thing i’ve noticed in my explanations is that Twitter is much more like MySpace than Facebook.  I also heard the term “egocasting” for the first time.  It makes sense. Both Facebook and MySpace are social networks but if you look at their architecture, you’ll see that Twitter is more like MySpace in that all profiles are public by default and it’s a place for sharing.

Let me explain more.  one of the strangest things i noticed during SXSW last week was that during panels, whenever someone asked a question, they came up to the microphone and (a) stated their name, (b) said their twitter handle, (c) asked their question.  Everyone did that.  It was amazing.  People at SXSW are entrepreneurs but more than promoting their company, they are there to promote themselves.  People are brands now more than ever and promoting yourself and your brand is more important now more than ever. Twitter lets you do that better than any other social tool.  Just like MySpace allowed bands to simply say, “hey go to www.myspace.com/pinkfloyd” users can say, “hey just go to twitter.com/pescatello to find out about me.”  It’s public, it’s just a URL and it will provide all the info you need to get to know someone.

Whether it’s good or bad that the popular tools of society are built to broadcast yourself out to the world is a good question.  Regardless of the answer, the fact is that Twitter is here and embraced and only go to grow in strength and adoption.  There’s a whole other post on why Twitter caught on. I do think it’s a good tool for our time and it combination of “egocasting,” easy mobile usage, and a great API have helped. I’d love to hear more about what you think. Please comment below

twitter

Related articles:
Reblog this post [with Zemanta]

Obama poster drama

Posted on

obama

I heard a great podcast yesterday on NPR about the iconic Obama poster (seen above). The poster is done by a fascinating artist named Shepherd Fairey.  It’s a little known fact that Fairey is also responsible for the Andre The Giant “OBEY” sketches that i remember from the 90’s.  He really gets around.

In this case, Fairey took a photo he found on Google and then altered the neck, the eyes and the colors (and cropped out George Clooney) to make a poster than came to symbolize the campaign.  Shepherd always claimed that he made the poster from an Associated Press photo and about a month ago, it was finally determined which photo he used and who the photographer was. It was a photo of Obama sitting at a press event in Darfur with George Clooney.

darfur

All this would be nice and peachy except that because the photo was an AP photo, the AP came to Fairey and threatened to sue if he didn’t dish out a percentage of revenue he made from the poster. Fairey acknowledged that he’s willing to pay the standard license fee and attribute the photo to the original photographer but he won’t be bullied into paying.  So, instead he sued the AP in an attempt to discourage companies from punishing artists for creating art.

While his argument stands on fair use, to me the real issue is about people making derivative works. It’s the 21st century and lots of people take lots of images and transforming them into art. If each is penalized into paying a bounty for the original source we’re limiting and hurting society.

In this day and age, users are both consumers and creators of content.  So many YouTube videos have copyrighted works in them.  Last week there was a huge fiasco around Facebook’s Terms of Service when they claimed they owned all user uploaded material.  Thankfully, they backed off.  But the backlash from the users illustrates that ownership of property, attribution, and sharing is really important to the web.

If anything this just leads me more and more into believing in Creative Commons. It’s truly the only mechanism that let’s people properly manage their rights

Reblog this post [with Zemanta]

Kindle and eBook Formats

Posted on
NEW YORK - FEBRUARY 09: Amazon.com founder an...
Image by Getty Images via Daylife

I must admid it, i want a Kindle 2.  I like the thought of having all my books in one nice little electronic device.  I like the thought of downloading and saving and storing all the things i want to read.  I’m intrigued.

This is why i was interested in this article in Forbes from Tim O’Reilly about formats.  He talks about the importance of supporting an open format in the success of a product.  For instance, the iTunes/iPod ecosystem is a popular platform and even though it has it’s own proprietary AAC format, it also supports the mp3 – an format that anyone can encode into.  Supporting both allows the iPod to take advantage of both customers and the web at large.

O’Reilly argues that Amazon should do the same with the Kindle.  The fact that it supports only it’s own eBook format will lead to its demise in the same way that Microsoft and AOL’s support for their own formats led to theirs.  The O’Reilly camp is only supporting the open e-book platform and they have seen it have success:

But we can already see the momentum on the open e-book platform. Stanza, the epub-based e-book reader for the iPhone and other Web-capable phones. Lexcycle, the creator of Stanza, announced recently that its software has been downloaded more than 1.3 million times, and that more than 5 million e-books have been downloaded.

While The Kindle is the slickest of eReaders and the most popular with 500,000 – 700,000 sold, the game is far from over.  The Sony Reader which also uses e-Ink has sold around 300,000.  Should Amazon remain closed, it could very well miss out on a huge opportunity, or as O’Reilly says: “Open allows experimentation. Open encourages competition. Open wins. Amazon needs to get with the program”

Of course, another way to look at this is:  AOL was about to build a $150 billion company by making it easy for people to get web information and only after the web matured did they fall.  Perhaps The Kindle will be the first out of the gate and will take the early lead because of the streamlined format and operation of it’s service.  Personlly, while i understand the need to be open, i’m still willing to check out The Kindle.

Related articles:
Reblog this post [with Zemanta]