Innovation blog by The Venture Company

Why the best cloud is still your own

The Venture Company | venturecompany.com — 2012-05-03T12:08:01-04:00

The illusion proposed by the cloud is that it offers tremendous business benefits, but along with that enthusiasm and (as technologists) our ability to quickly deploy such a technical infrastructure, comes a new set of business risks a cloud prospect needs to think carefully about.

The move to the cloud (usually from a local intranet), is in essence nothing more than a transition of storage or processing of data onto an extranet (available from anywhere), accessible through a virtually (metropolitan) omnipresent Internet.

Clouds move
Now the enthusiastic deployment of the cloud is to hand such external processing over to a third party (like Amazon for applications, or say Apple's iCloud for documents and media), who can provide robust processing, generic security, backup (and recovery) and instant scalability should you require. And even though in some cases you can decide to maintain management of that infrastructure, you have just moved certain business risks into the laps of others.

A centralized computing environment used by many customers changes the individual risk from a manageable one-to-one to a less controllable many-to-one. It concentrates the single point of failure now also used by your newly acquired technology "neighbors". And that concentration in turn promotes the attraction to hackers, increases the likelihood of cross pollination from misconfiguration, and puts pressure on expertise and technology choices of central management generally under price pressure of industry commoditization.

Furthermore, centralized computing environments aim to offer best-of-breed generic computing capabilities that serves many and thus implicitly ignores the supplemental requirements of every implementation that are non-uniform.

Business on earth
Let’s look at two simple examples of real world requirements, one in each cloud category. Cloud service menus blissfully ignore that every application customer still needs logical application security (unique to each application) to prevent vulnerabilities that can wreak havoc with sensitive and mission critical customer data (nepotism: WhiteHat Security). Or, related to documents, can you imagine having to call Apple to restore a single version of a document, lets say a book you are writing, that inexplicably got lost in the shuffle. What number at Apple would you even call?

So, with a move to the cloud, the control and management of the ecosystem of risk factors that delivers a reliable, optimal and safe computing infrastructure compatible with your unique business needs, has fundamentally changed.

Stay in control
Given the reputation of many high flying, "capital efficient” yet immature technology companies with their general ignorance to the specific business risks of their customers, we have decided to use Dropbox over iCloud to manage our documents from anywhere.

The reason for that is not that the capabilities of Dropbox far outweigh those of iCloud, but simply because Dropbox allows us to mitigate the risk of a single point of failure, is better suited to offer a smooth migration from intranet to extranet, and does not force us to put our eggs in one basket.

To be specific, we deployed Dropbox for some of our document storage that should be accessed from any device (MacBooks, iPads, iPhones) using applications that run on all, and syncs back automatically and immediately to all. Since one of those devices is using Apple’s Time Machine to archive continually locally and runs a daily backup to a networked dynamic RAID by Drobo, we have full control over their recovery while at the same time benefit from the universal access delivered by the Dropbox cloud. A set-and-forget configuration.

Planted firmly on earth, yet on top of the world
Most importantly, and even though the service has performed flawlessly since we implemented it, we do not need to put all of our trust in Dropbox and hope for the best to be comfortable with the fantastic benefits of the cloud.

Short of a prominent cloud company to listen and act upon your unique needs, the best cloud is one that you can control and customize so that it meets all of your specific (rather than generic) requirements. And that the decision to embrace the benefits of the cloud is purposely out of sync with your decision to where you want to put your trust.

Let the merit of the rush of cloud service providers (supported by their investors) flush itself out before you put your trust in them. For the sake of your business risk and continuity.

Agenda for Apple's next board meeting

The Venture Company | venturecompany.com — 2012-05-01T09:36:44-04:00

Apple as one of the most valued companies in the world faces challenges no other technology company has faced before. Instead of just pushing products into the marketplace, Apple now needs to build products from the start that are not only great innovations, but innovations that embody the free-market principles that lie on the wish list of many gubernatorial and social economic agendas. And that means the agenda at Apple’s board meeting needs to change.

I warned Apple (2 years back)

The Venture Company | venturecompany.com — 2012-04-12T09:11:44-04:00

I warned Apple on November 17 in 2010 that their iTunes stance is in violation of free-market principles. Whether the exact circumstances of the alleged collusion between booksellers and Apple insinuated by the DOJ hold any merit in a court of law remains to be seen. What is more important is that the desired role of Apple is in violation of free-market principles, is unsustainable macro-economically, will prevent unencumbered growth and is simply bad karma.

4G LTE is the new social network

The Venture Company | venturecompany.com — 2012-03-28T11:00:00-04:00

AT&T lit the mobile internet on fire when it enabled 4G LTE in one of its test markets in Chapel Hill recently. Speed tests of 16.34 Mbps download and 5.40 Mbps upload through my shiny new iPad blew my home-office landline internet connection away, which makes one think about the strategic consequences of landline internet and the many devices built for it.

iMessage in a bottle

The Venture Company | venturecompany.com — 2012-03-08T11:41:20-05:00

I wrote a pretty damning blurb on the last public version of iChat, stating it had no credentials to live up to the capabilities of freeware Adium. With the beta version of iMessage that tide has now turned.

Innovation in … pants

The Venture Company | venturecompany.com — 2012-01-09T09:25:52-05:00

When you think something as mainstream as pants have been around for hundreds of years and its innovation has come to a halt, you need to check out relative newcomer Kühl. An american company “born in the mountains” puts a new spin on a product we wear everyday, with an innovative philosophy.

The future of photo editing

The Venture Company | venturecompany.com — 2012-01-03T11:45:04-05:00

Three-hundred years of photography innovation has left us with dramatically improved distribution of marginally improved content quality. Photo editing, intrinsic to the camera, pre or post image capture is currently the only way to mimic more closely the vision of what our eyes and brain detect. Every cameras applies it, every photograph needs it yet few technologies do it well. A great investment opportunity that would drive differentiation for pretty much any technology vendor. The future I see and the lessons I learned when driving this gigantic opportunity through a startup innovation process.

KLM social seating

The Venture Company | venturecompany.com — 2011-12-07T08:24:26-05:00

Dutch airline KLM, part of the Air France conglomerate yesterday introduced social seating, as reported by the Huffington Post. A great idea and service for those interested in socializing because they cannot sleep on long transatlantic flights. The service will allow Facebook and LinkedIn users that opted in to select who they want to sit next to (or not). Curious to see if other airlines will follow. Now if we could only find out from social networks who snores the most…

Google does not care

The Venture Company | venturecompany.com — 2011-11-29T08:52:49-05:00

We recently received an e-mail from the company Apture, the online service we used to automatically make live references to Wikipedia and to enable on the fly deep dives into certain terms we use on our site, stating they have been acquired by Google and will be terminating the service in about one month.

More than a disappointment that the service will disappear, it demonstrates how both the employees at Apture and Google think about customers. Terminating a service without a respectable forwarning to “thousands of publishers” demonstrates how many technologists are merely opportunists, trolling from one financial reward to another while trampling its hard earned early adopter customers in the process.

Here is the gist of the e-mail Apture sent on November the 11th, 2011:

On December 20 we will discontinue Apture's product and services. When this happens, users will no longer be able to highlight and search terms with Apture on your web pages.

I will easily forget about Apture, but I will never forget about the real reputation of Google as witnessed by the actions of the company it acquired. It is not smart to bite the public hand that feeds you, and it hurts those trying to make an earnest living in the innovation’s business.

Eat to scale

The Venture Company | venturecompany.com — 2011-11-23T09:13:41-05:00

If you are tempted to eat too much during the holiday season, check out the Withings digital scale that sends your measurements including those of 7 other family members to the cloud where you can keep track of weight, lean mass, body fat and BMI on a constant basis.

Bye bye Time Warner OnDemand

The Venture Company | venturecompany.com — 2011-10-20T10:52:14-04:00

In an age when time shifting of media is crucial in achieving mass consumption, Time Warner has regressed to bow down to its advertisers by disabling fast-forward in its OnDemand recorded TV programming. I refuse to spend 20 minutes of one hour of TV programming wasted to advertisements. So long On Demand.

LightZone is dead

The Venture Company | venturecompany.com — 2011-10-13T23:23:05-04:00

From a well informed and trusted source I hear LightCrafts, the maker of LightZone photo editing software is shutting down. Learn the startup turnaround lessons I have learned in the process, such as knowing when a product is not yet a product…and what it takes to convert a promise into reality.

Caution in the cloud

The Venture Company | venturecompany.com — 2011-09-25T22:42:14-04:00

The Internet Service Provider where The Venture Company website is hosted was hacked today, along with many other corporate websites the ISP hosts. There are great advantages to entrusting your data to the cloud (for one a single point of truth), but with many underfunded (or “capital efficient”) companies struggling to escape commoditization making wonderful promises, the cloud should not become your single point of failure just yet (or ever).

Missing Steve Jobs already

The Venture Company | venturecompany.com — 2011-09-20T09:19:51-04:00

It does not take a genius to make the prediction that after the incredible high Steve Jobs has given Apple a slow glide downwards in the company’s future performance is expected. Nothing against Tim Cook, I don’t know him - so I can only judge by what I see. And I see a few dark clouds brewing.

The challenge in building successful innovation is to marry macro-economic behavior with support from modern information technology to create tangible social economic value. Apple like no other company has succeeded beautifully, yet not perfectly in that objective.

The danger to Apple is that it can be beat only where it just beat other technology companies; macro-economically. And content will topple distribution. Apple is very vulnerable with the staunch implementation of media sales - it does not own - through iTunes, and unchanged it will only take a smarter technology company to support the labels with the freedom they previously enjoyed. Winner-takes-all marketplaces, by economic principle, cannot be achieved through marketplaces that are not economically free. And iTunes violates free-market principles. Proprietary marketplaces such as iTunes can become free (not the other way around), but the timing has to be just right. So far few technology companies have the smarts to challenge Apple macro-economically and thus it continues to gain momentum successfully.

The first sign of trouble for me is to find the mention of a restart option (depicted above) if the computer freezes in the energy panel of Apple’s new operating system (Lion). That small detail, an admission of guilt if you will, is something Steve Jobs with his presence of mind would have never allowed to enter. For Steve Jobs would rather have delayed the OS to figure out why their computers freeze than let this pass by quality control. And since Macs already rarely freeze, providing an option for restart in that extreme scenario communicates how people without the rigor and tenacity of Steve Jobs are now suddenly allowed to think and act for themselves.

It is a small but important signal of how Tim Cook’s management style (to defer) and Steve Jobs’ (trust but verify) are already deviating. Steve Jobs is a product guy, realizing that product capability, perfection and ultimate-user-experience beat operational excellence - Tim’s forte - on any day. For me that single option in the energy panel demonstrates that the slide of Apple has begun, even though in the land of the blind its future will remain brighter than many other technology companies for quite some time.

In full disclosure: I have been a staunch Apple user for more than 20 years and have been “forced” to use a PC on occasion but always bought Apple, way before the fair-weather supporters of Apple entered the fray. I believe in Apple because it feeds a more pressing and more profitable computing need that serves the world, rather than the technocrats. And I have converted many a neighbor PC user to Mac.

iChat does not (yet) quack like a duck

The Venture Company | venturecompany.com — 2011-08-23T20:12:59-04:00

Apple's iChat does not quite quack like the Adium duck just yet. Expanded with Yahoo! chat in the recent Lion release, iChat has difficulty reconnecting with many of its chat services (AOL, Yahoo!, Google and Facebook through Jabber) and fails to reconnect to Facebook's chat. Adium, with its open source code also offers connectivity to Skype's chat capability through a free extension. [Links: Adium]

Bose Videowave impression

The Venture Company | venturecompany.com — 2011-08-15T15:09:24-04:00

The Bose VideoWave system incorporates some impressive audio engineering that lacks the proper positioning to meet the needs of modern and informed home theater users, or for that matter my daughters bedroom.

The Bose VideoWave is therefor in our opinion a strategic misfit, dragging some impressive engineering with it into its demise.

Quark quake

The Venture Company | venturecompany.com — 2011-08-09T11:44:10-04:00

Quark, the leader of desktop publishing tools before Adobe took the reins has been taken over by Platinum Equity (financial terms undisclosed). Finally, because not its products lacked capability but Quark's macro approach remained unchanged to a market that has fundamentally changed in composition. It would be good for the marketplace if Adobe were to be given a run for its money. [Links: PEHub]

Calibrate; Thunderbolt; MacBook Pro dead

The Venture Company | venturecompany.com — 2011-07-27T09:33:43-04:00

First thing every new Mac needs is display calibration, right out of the box. In my twenty years of buying Macs I’ve never encountered one that is close to correctly calibrated. Expect more realistic colors from your Mac when calibrated with a piece of hardware such as Pantone’s HueyPro (priced below $100). [Links: Pantone]
For many years I bought into maximizing my Mac experience and thus into Apple’s serial interface dance, reaching all the way back to the Apple Desktop Bus, that many times has led to an accessory stalemate at the next rendition of innovation. So I couldn’t be more surprised to discover (not published anywhere but in the new MacBook Air’s manual) that Apple’s Thunderbolt interface is compatible with Mini Display Port, which means last year’s 27 inch monitors will work with the new MacBook Airs released last week. [Links: Apple]
Those MacBook Pros are awesome laptops, just not as portable as Macbook Airs. And Apple knows it, rumor has it Air is going to replace the whole MacBook Pro line-up. [Links: AppleInsider]

Lion spam boon

The Venture Company | venturecompany.com — 2011-07-22T09:26:25-04:00

The new Mail application in Lion no longer supports turning preview off in its default new look, which is a boon for spammers. Suddenly all e-mails that did not get detected by the spam filters get opened by simply selection and with some clever HTML reference and inclusion alerts the spammer who did so. Expect your information to get collected and to get spammed even more. Automatic mail previews is a insecure concept. [Links: Lion’s new mail]

Gesture (on PC) is out

The Venture Company | venturecompany.com — 2011-07-21T17:16:07-04:00

Gesture recognition (hand or full-body) remains a very inaccurate science that only performs well when the interpretation of commands is equally forgiving as its navigation. As the former CEO of a full-body gestural recognition company I should know.

So, I am disabling most of the gestural recognition in the preference pane, not because I don’t want my iPad and MacBook to behave the same, but simply because they are not.

Palm's bad apple

The Venture Company | venturecompany.com — 2011-07-06T09:31:25-04:00

Palm’s former CEO Jon Rubenstein proves HP bought a bad apple, and worse he rebuts poor Touchpad reviews with correlation to the past. Poor strategy is once again married to bad PR. Success in technology is no longer dependent on just cool hardware, but a seamless user experience that blends the previously disparate components. And that emphasis does not only require a skill Palm does not have, it requires something HP does not have today either. HP needs to make harder calls to compete in this marketplace, self cannibalization would be an appropriate strategy for a company who’s customers have already voted against them. [Links: AppleInsider]

New photo camera technology

The Venture Company | venturecompany.com — 2011-06-22T12:56:12-04:00

As the former CEO of LightCrafts, the creator of LightZone photo editing software and avid hobby photographer we know quite a bit about photography. After years of research at Stanford, Lytro has just gotten off the ground with a new “light field camera” that changes photography as we know it and allows you to establish focus and other aspects after the picture has been taken. We will do a more in-depth analysis when we get more information about the camera.

According to Mashable Andreessen-Horowitz put about $50M in to fund its development, another deal subprime VC could never touch. Innovation is alive and well if as an investor you put the right shingle on your door. [Links: Lytro, Mashable]

Ostendo curved display

The Venture Company | venturecompany.com — 2011-06-21T11:03:26-04:00

Ostendo made the worlds first curved display at a resolution of 2880x900 at a little over $6,000. Useful for purposes when a wide screen is more important than vertical resolution, and desktop computers are used. By comparison, my 24 inch Apple LED display measures 2560x1440 and can be driven by any Mac laptop. But maybe when the demotion of the PC by iCloud works well we will all be buying desktops for when we need the raw power in our office. And then, the Ostendo CRVD is the beauty you may just need. [Links: Ostendo]

HP unchanged

The Venture Company | venturecompany.com — 2011-06-14T10:58:06-04:00

HP reorganizes itself again, now with an employee reporting to the CEO in essence becoming a boss of the CEO, as a board member. Clearly HP does not understand how to turn a page nor the aforementioned benevolent dictator concept. Change is not change, unless it involves real change. [Links: MacNN]

PhD bubble

The Venture Company | venturecompany.com — 2011-06-06T08:03:36-04:00

Matt Might, assistant Professor at the University of Utah does an interesting set of charts on what it means to have a PhD in relationship to being the master of many trades you need to be as an entrepreneur or an experienced VC. It demonstrates visually how we should not put so much stock in formal education or what Peter Thiel refers to as the most worrisome bubble in the U.S. today. More on how valuable a college degree is here.

Leave Ballmer; How low can you go

The Venture Company | venturecompany.com — 2011-05-31T08:56:24-04:00

Influential hedge fund manager David Einhorn called Microsoft CEO Steve Ballmer "the biggest overhang" on the company's stock at an investment conference, six months after we suggested he should leave. The problem however is not the executives Steve got rid off, but the ones he did not. The only change that can save Microsoft is a change to its core operating principles, and many large companies guided by socialistic boards will simply die in consensus before they ever give in. [Links: AppleInsider]
Talking about elephants that take a while to kill, GoDaddy CEO did the inexcusable and rebutted his actions on their website. Rather than to defend his actions as helping the locals protect their crop, he should have funded an operation to relocate the close-to-extinct animal. But he revels in turning the controversy into a monetary benefit. No surprise perhaps from someone who uses boobs to sell internet real estate. How low can you really go? Now you know why he shows up in Haiti too. [Links CNN]

Oprah Masterclass; Higher Education bubble

The Venture Company | venturecompany.com — 2011-04-11T10:59:55-04:00

Every entrepreneur should watch Oprah's Masterclass where she describes her rise from suppression in a way every entrepreneur will. Follow your heart and authentic passion, and ignore prejudice and precedents (my words). [Links: Oprah]
Peter Thiel (PayPal co-founder, hedge fund manager and venture capitalist) says what I believed for a long time. Higher education is in a bubble, and business gives too many free passes in life to students who don't deserve (just yet) such real world credentials. I have never hired on academic credentials in startups, only on passion, desire and ability to execute. Being a judge on the Venture Capital competition (VCIC) underscored the fact academic credentials in Finance represent an even bigger bubble. Few MBA's wanting to become VCs are taught or understand that you cannot put a valuation on a company when you don't know the business and its conversion rates. Hats off Peter. [Links: TechCrunch, VCIC]

eBay post-mortem

The Venture Company | venturecompany.com — 2011-04-07T09:21:53-04:00

eBay has completely lost my trust, confirmed by telephone. After eBay demonstrated 3 times in a row to be a platform for scam buyers I decided to leave it for good and remove my account, exasperated by eBay's support for a buyer who tries to do business outside of eBay, rather than pay for the item. eBay's trust should be embedded and enforced by the system, not outside of it. Because then one might as well use craigslist. After a one hour phone call I did manage to get eBay sales commissions invoice reversed for a product that didn't sell, huray! What a waste of time and energy. Who wants a shiny previous generation MacBook Pro?

Bye bye Ebay

The Venture Company | venturecompany.com — 2011-03-27T10:28:11-04:00

Daniel Leffel, a former eBay employee wrote an interesting piece a while ago of how eBay allegedly manipulates transactions thereby destroying the trust its free-market relies on. It is a must read to anyone who is trying to do business on eBay.

Even for a casual seller like me, who is trying to get rid of a hardly used PowerBook, eBay has lost the trust I put it in by harboring three false buyers in a row. And worse, leaves one supposed buyer the ability to leave negative seller comment, without actually forking over the money that was agreed to. Instead suggesting to circumvent eBay's protection policies, a trap I won't fall for. Yet, in terms of feedback left in the marketplace, a buyer who is not prevails, "supported" by eBay.

You could argue how to prevent each of these fake buyers to participate on eBay (and it should), but the fact that eBay has become a marketplace in which a highly popular item does not sell is a sign eBay has lost its credibility. No amount of free listings can compensate for that. Three strikes and you are out for me.

Nice knowing you eBay.

TV is dead

The Venture Company | venturecompany.com — 2011-03-22T06:24:43-04:00

TV is dead, not because of its lack of distribution but because of its deplorable content. We are close to the tipping point of losing interest, not in the distribution medium of TV but its deplorable content.

Another new HP; the good, the bad and the ugly

The Venture Company | venturecompany.com — 2011-03-16T12:58:49-04:00

I listened to the full 39 minutes of Leo Apotheker's (former SAP) pitch to press and analysts and the press interviews later. I have always had a warm heart for HP, since its innovative alphanumeric HP-41C ignited my affection for technology when I was about 12 years old, that I used to program my way out of the Dutch clay. I have since had many experiences with HP, through a partnership relationship at Oracle, the sale of one of my startups and individual consulting arrangements after. I'd like to see HP become less of a commodity player that merely pleases Wall Street. Industry leadership success does not come from a great new story you tell the press, it comes from an authentic belief customers subscribe to by purchasing innovative products.

Good
The good part about Leo as the new CEO of HP is that we must assume he knows software better than anybody at HP ever has. It is probable that Leo will be able to strike a more healthy balance between the delivery of hardware, software and services that makes for a meaningful information technology ecosystem to customers.

Bad
The bad part about Leo's story is that open and best-of-breed just don't go together. There is overwhelming evidence in tech and non-tech that openness is diametrically opposed to deliver the ultimate experience to end-users. So, to an experienced strategist Leo's story is not plausible, albeit his execution in certain segments (which he declined to discuss) may not coincide with his generic proclamation of strategy to the press.

Ugly
What will be ugly is how HP employees for the third time in five years will be faced with a new strategy to which they suddenly need to learn how to dance to. But by now those employees who are still at HP will know how to ensure that when everything at HP needs to change, their role will stay exactly the same.

I will start to believe in change for HP when certain executives (I won't name any names here) will drop out of change. Because their unwillingness to change will mean that this time around, change is indeed change. [Links: VentureBeat]

eBay's losing gambit, no iPad2 for me

The Venture Company | venturecompany.com — 2011-03-16T05:45:32-04:00

I love how eBay started out with an electronic version of the Dutch auction free-market principles of selling. I have used eBay sporadically in the past and just recently tried it again by selling a fully maxed out built-to-order 2010 MacBook Pro that I had used for two weeks. My experience was not great: the first buyer was someone who used someone else's account without their approval, the second one was a new buyer from Latvia (even though the transaction restricted shipment to US only). So, rather than eBay swaying new transactions and launching 50 free-listings beginning the month of April perhaps it should ensure that the trust of its tenants is secured first. Because arguably, both of the above described fake transactions should not need to occur if eBay over the years had spent more time building software algorithms and protections to nail down those who inevitably try to abuse a free-market system. eBay's price reductions are a losing gambit if it does not protect the trust of those who enter its free-market system. If my third attempt does not reach a trusted buyer I will invoke the three-strikes-and-you're-out rule.
I was an early adopter of the first iPad last summer and have since settled on a fully-loaded MacBook Air for work and passed my iPad to my eager six year old who now also enjoys watching Cable TV on it. The reason I am not buying the iPad2 is that there is no smooth migration strategy from the "old" way of computing to the new. Or perhaps more distinctly, the iPad is great for information consumption and not very suited for information creation. And once you find yourself switching those modes frequently, the iPad is not for you. Apple should focus more on the software support for iPad rather than trump the hardware specs, a "Rosetta"-like transparent migration to iPad would have been great. But then again, I can understand how chasing a massive greenfield of customers may just be too tempting for Apple. At least equip the Macbook Air with a 3G/4G antenna already, so we get parity on the connectivity side of things. [Links: Apple]

Cable TV on iPad

The Venture Company | venturecompany.com — 2011-03-15T12:14:10-04:00

Time Warner just released TWCable TV on the iPad and it works like a charm over WiFi, producing a clear HD TV signal straight on the iPad - for existing Time Warner subscribers only. That will kill the need for TV's in every kitchen and kids room. A great reason to buy an iPad if you still needed one. A $500 iPad is not a bad TV replacement, quite the opposite. This is a big deal. [Links: iTunes]

Kid Rocks

The Venture Company | venturecompany.com — 2011-03-14T10:58:25-04:00

Kid Rock in his interview with Piers Morgan states how he agrees with my analysis that iTunes' stance on music is wrong. iTunes should embrace multiple pricing mechanisms rather than attempt to displace the labels' or musicians' right to do so. Apparently, Kid Rock is doing just fine without iTunes. [Links: Piers Morgan on CNN]

The Chinese Internet

The Venture Company | venturecompany.com — 2011-03-11T22:13:16-05:00

Global public relations and communications firm Burson Marsteller publishes a presentation on Chinese Internet trends. Some interesting stats:

450M internet users
10M new internet users per month
98% broadband
303M mobile web users

Get more by reviewing the complete presentation, including more in-depth demographics and social networking stats. [Links: Slideshare]

At ease with Drobo; $1B pre-nup

The Venture Company | venturecompany.com — 2011-03-08T08:26:47-05:00

Everyone with loads of data collected on their computer over the last decade should buy a Drobo. Having daisy chained Firewire 800 external backup drives to a server for quite a while, I have seen the fragility of these commoditized (and sometimes low quality) drives with numerous failures. One such failure wiped out a set of original photographs of which only smaller digital replicas remained. No longer, Drobo can host a minimum of 4 standard SATA drives (one 2TB drive now costs around $79) and automatically and transparently protects against any single drive failure. Without any downtime the system reconfigures itself around one fewer drive, and a simple replacement (or upgrade) of the failing drive re-establishes the storage capacity. Drobo is a must have for anybody with a large iTunes, photography or business library of files and should really be built into many OEM computer strategies. Why VC investors Greylock, NEA, RRE and Sutter Hill have not been able to blow up this company in size and to an IPO already is a mystery to me, or is it? [Links: Drobo]
Microsoft allegedly paid Nokia a $1B to play nice. Tells you who is the ugly rich guy in this marriage. Both companies need a pick-me-up, but not from each other. What do you think will happen when two losers collide? [Links: BusinessWeek, two losers don't make a winner]

Bye bye Microsoft

The Venture Company | venturecompany.com — 2011-03-05T08:18:22-05:00

Microsoft is putting more emphasis on getting rid of its own menace, than launching products people want. Internet Explorer was one of those products where Microsoft tried to change the way the web works and make it theirs, which failed. For years developers had to create separate versions of their websites to make them compliant to IE6 (Microsoft is still doing proprietary things today, such as limiting embedded CSS, again forcing developers to jump through hoops).

In Microsoft's own words: "Friends don’t let friends use Internet Explorer 6. And neither should acquaintances. Educate others about moving off of Internet Explorer 6". A dangerous proposition for Microsoft, because a re-evaluation of the browser on an old computer leads to a reevaluation of the computer. And today's best computers are not running Microsoft.

But what is more interesting to see is how many people still use this outdated browser and thus, use an outdated computer. More than 1/3 of internet users in China use an old computer, other countries with quite a bit of stale information technologies are India, Saudi Arabia, Japan, South Korea, Taiwan, Vietnam. All great candidates for post PC era iPads.

Nintendo laurels

The Venture Company | venturecompany.com — 2011-03-03T21:51:17-05:00

Nintendo CEO Satoru Iwata made a foolish statement that ignores how the definition of gaming has changed. Full-body gestural recognition like Kinect have proven to broaden the appeal to console gaming and mobile games have in volume of titles and customer appeal obliterated the old console model. Nintendo would be better off supporting games wherever customers want to play them, rather than forcing them to use a specific hardware configuration. The powers that be have shifted, and it is time for Nintendo to stop resting on its laurels.

Apple please dump Ping, LinkedIn time-bomb

The Venture Company | venturecompany.com — 2011-02-25T14:53:47-05:00

By economic principle Facebook is a winner-takes-all (if it doesn't trip up), or put differently social networking is not a category but a platform (to which extensions and applications can be built) owned by Facebook. Hence building Ping, a social network around music from Apple (and integrated in iTunes) is poised to fail. Apple instead should stick to its knitting and enable Facebook "likes" to optimally cross-pollinate media content to some 500 Million users instantly. Segmentation of social networks is not in the interest of users, because it is impossible to segment people's social behavior and subsequently expect them to maintain its fragmented access.

Mark my words.

Even LinkedIn is doomed if it tries to encroach on Facebook's territory with more social networking capabilities for business. All Facebook needs to do is turn their social attention to business (which is still somewhat rudimentary today). LinkedIn is not a free-market as it does some pretty shady and in-transparent things when people are looking for a job, such as providing unwarned access to people who are not your references (something I was offered when I was evaluating people through LinkedIn for a startup). LinkedIn better run for its IPO real fast, while the public has no clue of how much shorter its shelf-life has become since Facebook.

Back to Ping: you can drag the album art in the Store directly to the "add link" section in Facebook, should you want to do Apple a favor.

Best Buy doesn't translate

The Venture Company | venturecompany.com — 2011-02-25T08:24:23-05:00

According to Bloomberg Businessweek Best Buy the electronics chain popular in the US is closing its stores in China in favor of opening 40-50 more higher end Five Star stores it acquired locally in 2006. A sign that brands don't simply translate. Having lived in Silicon Valley for 17 years and enjoyed shopping at the much more geekier Fry's Electronics stores I always thought Best Buy was the electronics store for uninformed America. And people in China treat their electronics as a status symbol, to which the commodities sold at Best Buy don't lend themselves well.

Free everything for startups

The Venture Company | venturecompany.com — 2011-02-24T09:22:35-05:00

Startups can now get free office space with internet in Durham, North Carolina if they just have a good idea (says who?). And Obama's StartUp America will hold its first roundtable there. Let the stampede for money and office space begin. Do we really believe that we get better returns on innovation when we make everything free? Great karma but without better innovation arbitrage deployed by VC this will simply spawn more of the subprime ideas that were responsible for generating minus 4.6% VC returns over the last ten years. Nothing will change unless we change the financial system that holds innovation hostage.

Twitter value, Closed is better, Illy to scale

The Venture Company | venturecompany.com — 2011-02-21T07:49:29-05:00

Twitter is close to being valued at $5B but I do not believe Twitter is worth one more cent than it is making. I base that on my own experience in having deployed our well regarded blog entries over Twitter for quite a while know, only for those messages to be submerged in what I call the barking dog syndrome; excessive spamming of categories by people with less thoughtful content. What Twitter is missing is a reputation method, a way of letting people determine by virtue of their actions what content deserves exposure. Now Twitter is just a cesspool in which the frequent barking of the little dog drowns out the more thoughtful (yet less frequent) bark of the big dog. And a house full of barking dogs is an unpleasant place to be. I can think of many other spamming platforms that could similarly be valued at more than $1B, if we use sheer presence as the metric of valuing companies.
Why closed is better than open, for end-users.
Italian coffee maker Illy appears to make a run for scaling itself a-la Starbucks with more Italian style coffee bars in the U.S. and more restaurants serving Illy espresso after a great meal. But Illy better start making fully automatic machines that make the espresso the way it aught to be made real soon, to avoid waiters watering down the quality of what is served in that Illy branded cup. The unique experience and taste of Illy espresso can only be produced by a diligent barista (in person or as a machine), or put differently: the quality of an experience is highly dependent on the quality of distribution. Having experienced Illy espresso in quite a few restaurants now, Illy's current distribution quality is deflating its brand rather than expanding it.

Newspapers are reborn

The Venture Company | venturecompany.com — 2011-02-18T07:58:44-05:00

Pay attention to Paper.li from Swiss private company Small Rivers proving that online newspapers are not dead just yet. We have recently seen a disproportionate uptick of traffic coming from their site to ours. With Paper.li everyone can create their own newspaper, composed of RSS and social media feeds in the same way many traditional news sources would pluck from Reuters and the Associated Press. Newspapers are alive and well if you trust the collectors as much as the creators of news.

AT&T dreamer, Facebook Offline Chat

The Venture Company | venturecompany.com — 2011-02-16T22:22:32-05:00

AT&T’s chief wants cross-platform mobile apps sales through standardization of store programming methods (through the carrier). Oh please Randall Stephenson, now that your iPhone cartel ride has evaporated you want standardization. Like Java? Remember the damage that did to my DVD player at home? I prefer the rat race on completely proprietary, yet ultimate computing experiences that earn their merit based on authentic customer adoption, rather than complex developer collusions that break so easily.
With Adium on a Mac you can now connect directly to Facebook chat, without a Facebook page open. Simply add a Jabber account with your Facebook username (not your email address, can be found under the account profile menu) composed as follows: username@chat.facebook.com and enter your Facebook password, and that’s it (do not add a Jabber server etc.).

New Whole Home Time-Warner DVR

The Venture Company | venturecompany.com — 2011-02-14T14:10:53-05:00

Rumored for a while by its technicians but whole house DVR’s are now available from Time Warner. Watch in one room, continue in the other will be a favorite in our household. Some nice changes on the broadband Internet side are on the docket too. Do you hear me now Comcast, with your empty 3-year old promise of a Comcast Tivo box?

Microsoft and Nokia, Apple iAds, Cisco's consumer, Faster medical device adoption

The Venture Company | venturecompany.com — 2011-02-11T08:28:18-05:00

Nokia and Microsoft are teaming up. Do two losers make one winner? Good luck blending two losing platforms together. The problem is your business model Microsoft, from which you can never build an ultimate computing experience.
Apple’s iAds are hurting according to TechCrunch. No surprise, since when does a company that builds great value to consumers and gained their trust expect to be successful in attracting technology that does the opposite? Traditional online advertising is dead anyway (in terms of producing real turnover), social recommendations are much more valuable and less disturbing.
Cisco’s top consumer executive is leaving. What a surprise, coming from a little company called Flip video cameras that Cisco acquired in 2009. Cisco’s proficiency in consumer technologies requires a rebuild of their DNA. For the exact same reasons Oracle has a problem driving anything into the market beyond its core business model. I have been there, tried that.
Did you know medical device introductions happen 1-3 years faster in Europe than they do in the US? So says the Netherlands Foreign Investment Agency. Request the study here. I am sure the FDA has something to do with that. You can probably get them to market even faster in Mexico.

Used iPads

The Venture Company | venturecompany.com — 2011-02-09T13:12:13-05:00

You know you have succeeded in reaching social economic acceptance when less than one year after the introduction a whole commercial website is dedicated to selling used versions of your product (the iPad) in addition to many vying for new ones. Just kidding. I passed mine on to my very happy daughter.

I am just “proud” that I was able to beat Walt Mossberg somewhere on the planet (Malaysia?) with my last summer’s first 48 hour review of the iPad.

Microsoft re-org

The Venture Company | venturecompany.com — 2011-02-08T08:11:25-05:00

Microsoft will clean house. Problem is Microsoft’s business model which it perceives as its strength, actually is its weakness. You simply cannot build an ultimate computing experience from discombobulated pieces and agendas from other vendors. At some point you are going to have to put the car’s ultimate driving experience together.

Walt On Verizon iPhone

The Venture Company | venturecompany.com — 2011-02-03T09:42:52-05:00

Verizon beats AT&T in voice calls for iPhones, according to Walt Mossberg at All Things Digital, unless you travel to many other countries frequently (except for China) where Verizon phones are rendered useless. AT&T’s network averaged 46% faster at download speeds and 24% faster at upload speeds he concludes.

Jaguar experience, Skype Access

The Venture Company | venturecompany.com — 2011-01-28T05:31:06-05:00

Driving a (rented) Jaguar is a treat, except for the deplorable built-in GPS. It is a driving experience all right, just not ultimate. But their external styling is amazing.
Skype Access saved my few hours layover in Washington airport (IAD), it delivered flawless wireless experience on a per minute basis (directly taken out of my reserve) where a multitude of wireless providers struggled to compete for the attention of a block of time charged to my credit card. I will give Skype Access a try more often. You can find it at the bottom of the File menu in Skype.

Dutch treat, Simple Localization

The Venture Company | venturecompany.com — 2011-01-26T03:22:24-05:00

The commute is just as nasty as the weather in Holland. Most amazing are the cameras that compute your average speed along a certain route, and send you a ticket when your average speed surpasses a certain threshold. Information technology at work to produce a splendid Dutch treat, apparently Hertz is getting boxes full of tickets.
Using Google from another country changes it language from english to local. Really Google? Since it knows so much about its users, can’t it figure out that I prefer english based on my domicile, wherever I go?

No Air, Ex-pedia, Get it together Apple

The Venture Company | venturecompany.com — 2011-01-24T05:27:58-05:00

Sometimes my Macbook Air is without air, especially when switching screens with my 27 inch display. Panic crash report alludes to problems with NVIDIA, maybe time for Apple to make their own graphics cards and step away from PC derived commodities? But when it has air, this little computer is the best one I have owned so far, gotta love 6-7 hours of battery life.
More free-market lies. Not only do travel sites suggest to give you the ultimate selection of available flights to a certain destination and charge airlines a fee to come out on top, they also omit certain flights that do not involve flying to a preferred vendor’s hub first. Such is the case with my flight to Amsterdam today, where the only way to book it from Raleigh to Amsterdam via (the shortest path) Washington is to do it the old-fashioned way, directly with the airlines. Good to know Expedia.
More excellence needed at Apple. Ever noticed that the definition of iTunes varies based on the computing device you use? On the Mac it is the all encompassing music library, on the iPhone iTunes is where you purchase and iPod is where you play, on the iPad the same as the iPhone except that videos play in an external video app. Get it together Apple!

Location-location-location

The Venture Company | venturecompany.com — 2011-01-21T08:14:14-05:00

Location based services from Google Maps trump those from secular vendors TeleAtlas (now TomTom) and Navteq (now Nokia) strategically. Think of the latter two as proprietary databases and Google Maps as the application that can seamlessly map multi-nodal information derived from anywhere to serve dynamic routing and information requirements. Because of that Google Maps is not only more flexible in what information it can present but often way more complete and accurate than TomTom claims to be. After almost 4 years TomTom still cannot find the street I live on, and neither does the Navteq service in my BMW.

Air Temperatures

The Venture Company | venturecompany.com — 2011-01-19T11:54:42-05:00

Traveling in large groups is really an uncomfortable endeavor, for many reasons: cramped spaces, unfriendly service, bad food. Everyone has their own pet peeves. But regardless of whether you are in business class or coach where some incriminating circumstances can be alleviated, temperature and humidity are the best indicators of how pleasant a flight will be. So, I bought a temperature and humidity gauge and measured boarding and cruising altitude temperatures on some of my recent flights. Temperatures above 80F are considered uncomfortable, and your car’s default temperature position is set to 72F. The chart below shows that the temperature on some Delta flights is out of control, but many other airlines appear to struggle or care less about maintaing healthy comfort levels. We’ll keep aggregating and reposting as we fly those “friendly skies”. Based on those aggregates we will make our decisions on what to fly next.

Zinio iMagazine, University programs

The Venture Company | venturecompany.com — 2011-01-13T11:15:55-05:00

I love Zinio on my Macbook Air which beats carrying around stacks of magazines when traveling, and I am surprised they haven’t been scooped up yet. Apple is undoubtedly going to enter the magazine business, in fact I wonder why they have not already tucked magazines right into iBooks.
A university employee yesterday described to me the entrepreneurial programs at universities as an oxymoron, where some high and mighty educational bureaucrat thinks he can ‘direct’ these university companies to success. Kind of like an admin telling an entrepreneur how to become an entrepreneur. I happen to think universities can be great sources of innovation, the minute they are pulled into the real world cleanly, and once they are firmly attached to macro-economic need. At that point students would be very well served by someone teaching them which investors to avoid.

Respect as currency

The Venture Company | venturecompany.com — 2011-01-11T14:26:47-05:00

Establish a relationship before you ask people favors, is what I told an investor today who deployed loan-shark tactics to a European startup and having the company moved to the U.S. now finds out that growing the business requires more than money, it requires authentic vision and relationships based on respect. Squeezing entrepreneurs does not garner my respect.

iPhone 5

The Venture Company | venturecompany.com — 2011-01-11T10:01:03-05:00

Waiting for iPhone 5. Forget “Antennagate”, its problems are exaggerated anyway. I like my iPhone 4 functionality but hate its industrial design. An angle of 0.3 degrees slides the phone off of most surfaces (arm-rests, desks), as a result this phone is prone to dropping. Its symmetric design also does not allow the phone’s position to be recognized without looking at it, dangerous in the car, dark environments or other precarious situations and the source of many fumbles. The asymmetric iPhone 3 with a curved back and flat front was much better. But it can’t beat Retina.

Homeland Security, Airport security

The Venture Company | venturecompany.com — 2011-01-10T04:19:20-05:00

Amazing to see how leadership at Homeland Security operates in a fog. With super advanced smart card technology from LaserCard (under) utilized in green-cards for years, we can ensure that every american citizen, legal alien, or migrant worker is at least who he/she says he/she is, and connect their reputation to a taxable income for the United States and a much stronger sense of homeland security. The United States can learn a lot from the water management lessons learned from the Dutch; who realized that when you can’t prevent the water from entering, you at least control where it goes. We should apply that lesson to immigrants. But the new cards would cost $5 instead of $1 for the old drivers license, perhaps a better way to spend money than putting up a Berlin wall in the south?
Heads up Apple Airport users. To get the maximum speed out of your network set the security to WPA2 Personal (not the default). Any other setting reverts the speed back to a meagerly 54Mbps, according to an Apple document.

iTunes, Bose, Logitech, Philips, Android, Time Warner, BMW

The Venture Company | venturecompany.com — 2011-01-07T19:37:01-05:00

No official word from Apple, but I am expecting iTunes to run in the cloud real soon, with reduced tethering dependency on the PC.
I love my Bose 901s, but a recent visit to their stores demonstrates that their best speakers will not work with any recent home theater amplifiers that support HDMI. So I guess buying 7(.1) of them is no longer an option. Time to look around.
With flawed Venture economics as the main reason why Venture Capital cannot perform and 95% of VC being posers with no performance to back up the merit they claim, why does Mark Suster of GRP Partners keep hammering on how entrepreneurs need to meet GP expectations? Isn’t that the world upside-down? Instead, VCs need to learn how to locate real entrepreneurs who know how to make VCs big bucks. General Partners need help, not entrepreneurs.
The Canon 5D mark II is a great camera but suffers from BMW’s iDrive menu control complexity and redundancy, the Rebel XT user-interface was better. Nothing I can’t master, but hard for technology novices with a good eye. With professional optics the camera lacks sufficient controls to balance aperture with speed.
Philips gave up on their powerful, but cumbersome to program Pronto Universal remotes last summer, and I switched to Harmony’s Universal remotes (now Logitech) with cloud based configuration. Not perfect, but not bad at all. But which genius at Harmony decided that when the battery runs out, docking or hooking up USB charger disables all capabilities. Yet when it is charged it passes “the girl test” in our house. Check out the fantastic channel resources on RemoteCentral.
After a bit of searching the most crisp font for the new MacBook Air - for now - is embarrassingly (to Apple) the Android font available from Google. Download for free and select Droid Serif in Mac Mail and notice a newfound clarity. Hope Apple’s new quality control guy picks up on this one, and that he fixes some anti-aliasing that is broken on the Air and in Safari.
Time Warner has released an impressive beta version for online scheduling of DVR recording, for a PC web experience that is. Manages multiple DVRs as well. But who needs multiple DVR’s with their new one DVR-in-the-home service. Better internet upload speeds for consumers (Roadrunner +) are coming, apparently driven by World of Warcraft latencies experienced by many Time Warner users. The power of gaming.
BMW’s second to last iDrive (still in some of today’s models) explains the main issue in User Interface Design vendors struggle with, where not its consistency but the language is the problem. The new one on the brand new BMW 5 series is slightly better.

CNN, Bose, Tumblr, Ads, OSX apps

The Venture Company | venturecompany.com — 2011-01-07T08:08:35-05:00

Apple launches the AppStore for Mac OSX , don’t buy the suggested update to iWork just yet, it’s a bug. And what about transferring purchases to a new computer? But found some great new pieces of software, including a vital one that cleans up the address book.
Puzzled about what traditional media is thinking comes from the 30-second ads that accompanies every video on CNN you want to watch. The same Google Chrome ad every time makes me want to use Internet Explorer first. Even worse are the new ad curtains, whose advertisers have become the spammers of a new age. Pay attention to your brand experience guys!
Why this blog is not on Tumblr, 20 second load time of a reference site is unacceptable. Nor would I trust “giving my content” to technologists who have taken subprime money, without a solid export strategy.
Fantastic parental new years resolutions from family psychologist John Rosemond.
Bose releases the first in-ear headset that stays in my ear while running, make sure to order the MIE2i headset for iPod/iPhone control. Wonder what marketing genius came up with that name.

Apple's iTunes stance is wrong

The Venture Company | venturecompany.com — 2010-11-17T16:01:52-05:00

Apple can do much better with iTunes, so as to embrace the music industry with truly open arms and offer whoever is in control of content, record label or artist the most comprehensive free-market model it can to let the music sell itself.

In the land of the blind Apple is King

The Venture Company | venturecompany.com — 2010-10-24T11:04:04-04:00

The future of computing is in its ability to hide complexity rather than to expose it. That one can drive a car without knowing what goes on under the hood. And from that perspective Apple remains the company that in the land of the blind remains the one-eyed King, leaving Google, Microsoft and many others far behind...

The need for a new habitat of innovation

The Venture Company | venturecompany.com — 2010-09-03T10:24:43-04:00

The Silicon Valley emperor is dead. And as a result leaves behind a graveyard of underperformance that begs for a new ecosystem...

Idiot entrepreneurs

The Venture Company | venturecompany.com — 2010-08-09T12:03:40-04:00

To complete my affectionate series of "idiot" articles (idiot CEOs and idiot Limited Partners) I am adding idiot entrepreneurs to the list, to help them out a bit...

The first 48 hours, my iPad review

The Venture Company | venturecompany.com — 2010-05-03T15:53:51-04:00

Apple has singlehandedly changed the computing agenda from business to lifestyle, and managed to serve its fast growing customer base with an experience that truly meets their every day needs...

Why entrepreneurs should not follow an investor compass

The Venture Company | venturecompany.com — 2010-04-08T08:37:39-04:00

I think it is quite hilarious to see so many Venture Capitalists tell entrepreneurs everyday how to build a successful business, given that they have no political leg to stand on to offer such advice...

How to set and ask for valuations

The Venture Company | venturecompany.com — 2009-09-15T02:12:51-04:00

Every time I see the quarterly reports on Silicon Valley valuations I cringe. Not because the report is wrong, but because I know how entrepreneurs and Venture Capitalists use the valuation medians to establish their starting, or worse their ending negotiation positions. And they are both so wrong...

Idiot CEOs

The Venture Company | venturecompany.com — 2009-05-11T17:36:32-04:00

That's how one of the many CEOs that contact me recently described his colleagues who submit to Venture Capital ...

Why "ServiceForce" is a bigger deal than SalesForce

The Venture Company | venturecompany.com — 2009-04-07T19:57:21-04:00

I get excited by the surprising discovery of a technology proposition that can actually make this world a better place...

The new HP way; the inverse of now

The Venture Company | venturecompany.com — 2009-04-07T11:04:52-04:00

Turning HP around is actually very easy. It requires the innovative mind that "believes nothing it hears but anything it sees". It requires a visionary who cares about nothing but customer adoption, and an ability to model a company towards its purchasing power. Everything else is simply irrelevant.

Don't take TheFunded serious

The Venture Company | venturecompany.com — 2009-03-31T13:35:29-04:00

I am fervent proponent of transparency in the Venture Capital business which before TheFunded did not exist. But apart from the publicity prank they pulled for April Fools Day, I am as much against any system that treats entrepreneurs unfairly as I am against a system that treats Venture Capitalists unfairly. The latter in my view is what TheFunded represents...

How not to raise money, real world examples

The Venture Company | venturecompany.com — 2009-03-24T22:44:28-04:00

Today sub-prime investments occur primarily because of underfunding, but the opposite - overfunding - happened in the bubble days. Here are two real world examples of how both types of investments deflate...

Not so fast, US defectors

The Venture Company | venturecompany.com — 2009-03-21T15:49:35-04:00

I often liken todays Venture Capital business to the sub-prime lending business where too many people without the skills to assess risk accurately, put the whole technology ecosystem at risk.

How to compete with Apple

The Venture Company | venturecompany.com — 2009-03-18T18:21:39-04:00

Most of Apple's competitors are now simply chasing the iPhone strategy or music strategy, as they've chased market leaders for so many years. But that will never work...

How sub-prime VC stings twice

The Venture Company | venturecompany.com — 2009-03-04T13:37:24-05:00

Just like working for Carnival Cruise looks glamorous but is not the way to explore the world, unsuspecting young entrepreneurs who fall for sub-prime investors will soon find out that building those technologies has all the glamour but few of the rewards associated with innovation...

Introducing the new VC blacklist: 217 and counting

The Venture Company | venturecompany.com — 2009-02-23T23:13:48-05:00

The enclosed chart includes the names of every investor (Venture Capitalists and Angels) an entrepreneur has spoken to face-to-face, conversed through e-mail and is scheduled to connect with...

Fotonauts: a smooth piece of the photography puzzle

The Venture Company | venturecompany.com — 2009-02-23T18:56:15-05:00

Fotonauts is an improvement in terms of its ability to create an instant and good looking web site with some powerful social media capabilities that promise to increase traffic to your photographs. It blends offline and online capabilities...

Why Comcast still does not deserve my triple play

The Venture Company | venturecompany.com — 2009-02-19T11:26:34-05:00

If you can’t service one single offering well, don’t expect to sell three...

While Steve Jobs is away; 10 priorities

The Venture Company | venturecompany.com — 2009-01-28T16:07:49-05:00

Steve has proven to be the best guy to ever run Apple, but that doesn’t mean the company can’t improve. Here is what I would do...

Innovating back to the future

The Venture Company | venturecompany.com — 2009-01-22T12:36:18-05:00

The key to a lasting technology business is not just the introduction of snazzy new technology, but more importantly, how well macro-economic improvements address the needs of everyday consumers.

Mobile is dead, continued

The Venture Company | venturecompany.com — 2009-01-09T19:56:41-05:00

I wrote about the death of mobile application investments a while back and the recently leaked e-mail (posted by Tech Crunch) from Tapulous shines more light on those unattractive economics for investors. Investing in the Long Tail of content (the games category) is not a good idea.

Now I want to preface that selling 100,000 copies of a game is a great accomplishment (good job Bart and thank you Apple), but the $1M or so this very popular game generated can hardly be called a venture funded business that is going to emerge with a billion dollar market cap anytime soon.

Here is what needs to be accomplished to generate a little over $1M:

#1 most popular game for iPhone & iPod touch for 2008
#3 most popular app overall for the US
5 million unique installs on Tap Tap Revenge! (that doesn’t double-count when a user upgrades TTR)
100,000 paying customers

So, if being the #1 most popular game on iPhone means you make $1M, I can’t see how:
1/ This initial success is going to continue with an avalanche of other attractive games entering the market
2/ The company is going to be able to produce a consistent stream of similar “winners”

And so here is another example if subprime investing, this time provided by a long tail of angels.

Tap Tap Tap.

How to spot subprime VC

The Venture Company | venturecompany.com — 2009-01-08T01:58:06-05:00

Subprime VC is easily recognizable, here are some of my metrics. Run for the hills when an investor...

I'm just not that into you

The Venture Company | venturecompany.com — 2008-12-16T13:16:02-05:00

Very few startups should be materially impacted by the state of the economy, here is why:

Three rules for successful consumer technology companies

The Venture Company | venturecompany.com — 2008-12-08T17:26:34-05:00

We spend a lot of time with consumer technology companies and developed the following rules for success:

Which investors to avoid

The Venture Company | venturecompany.com — 2008-12-08T13:46:30-05:00

The bottom line is that we recommend entrepreneurs not to squander their great ideas with the first investor that waves money in their face. Real disruption does not become extinct quickly and so you literally have years to find a great investor out of the 790 firms that exist in the United States.

cooliris is cool

The Venture Company | venturecompany.com — 2008-12-01T18:35:09-05:00

Cooliris is cool new navigational technology from browsing media. And until we have more advanced browsers can be a valuable add-on for now.

Educating pictures

The Venture Company | venturecompany.com — 2008-11-09T20:29:00-05:00

I was pleased last week with a visit from Rick Smolan, the creator of some very creative photo-projects, such as From Alice to Ocean, America 24/7, Blue Planet Run and his latest America At Home. Since the early 90s, From Alice to Ocean stuck with me when it was first introduced and distributed with Apple computers and the clever use of multimedia capabilities built into the Mac early on. But the great thing about these projects is not just the stunning imagery but rather what they evoke. Again, the value of photography is in the eye of the beholder.

Rick approaches photography in the same way I look at business; by simply surfacing the facts. So much in our lives is influenced by mountains of politics and rhetoric that reduce the chance of quick resolution and success. How do you think we can ensure a vibrant global economy and peace if 1.1 Billion people - 1 in every 6 - worldwide have no access to clean water. The book Blue Planet Run displays that with chilling accuracy.

But Rick Smolan's projects shed light on reality, good and bad. America at Home is a compelling compilation of how American families live at home, rich and poor, photographed by the families themselves and complemented by photographs from professional photographers. The pictures and their captions are so inspiring that a country decided to buy more than 200,000 books to educate their children on who Americans really are. Transparency works both ways.

I would like to see Rick do a book of “The World at Home”, so I can continue to sit down with my daughter and give her a peek into the living rooms across the world.

Our welfare greatly depends on our ability to become a citizen of this world. To achieve that every school should at least purchase one of Ricks books so our children receive an objective view of the opportunities and problems in our global eco-system and thrive.

Demise of image Super-Stores continues

The Venture Company | venturecompany.com — 2008-10-24T14:35:29-04:00

Imaging super stores make no economic sense, here is why...

Digital Railroad in trouble?

The Venture Company | venturecompany.com — 2008-10-20T19:00:31-04:00

Apparently Digital Railroad, another storage provider of the digital photography market is in trouble. No surprise again, because the company never supported a free-market model for photographers and buyers...

Building efficiencies - continued

The Venture Company | venturecompany.com — 2008-10-16T15:34:03-04:00

The fundamental shift in thinking that needs to occur in Silicon Valley, is to develop technology with a fresh mind, looking from the outside in, and serve a larger, less specialized, constituent.

Building efficiencies in tough times

The Venture Company | venturecompany.com — 2008-10-14T13:13:43-04:00

Great products make up for an endless amount of sales and marketing deficiencies, but in most cases sales and marketing spend too much time making up for lost product opportunity and become an endless money drain...

The odd face of Facebook

The Venture Company | venturecompany.com — 2008-09-17T14:17:25-04:00

Facebook, one of the fastest growing social network sites has really screwed up User Interface design with its new look...

Photoshelter, another one bites the dust

The Venture Company | venturecompany.com — 2008-09-13T14:04:11-04:00

Two days ago we got word about the demise of the Photoshelter collection marketplace. Not surprising because Photoshelter was not a marketplace...

The Google argument.

The Venture Company | venturecompany.com — 2008-08-07T11:25:03-04:00

Google lays important development groundwork that has and will continue to do us all good. They also provide valuable incubation of new technology ideas a commoditizing Venture Capital market rarely picks up on...

Beware of the platform that is not.

The Venture Company | venturecompany.com — 2008-08-06T14:12:05-04:00

As a consumer, buying into separate photography management silos will cost you significant time and money (as the former CEO of a photo software company, researching the alternatives, I tried). My advice is to wait until an agile vendor steps up and turns media management into a core competency of the computing experience

Mobile is dead, for VC that is

The Venture Company | venturecompany.com — 2008-07-11T20:36:13-04:00

We challenge the viability of mobile phone applications as an investable asset class, because in essence they are no different than user contributed content, where the content consists of logic...

The remarkable resemblance between innovation and photography

The Venture Company | venturecompany.com — 2008-06-17T11:04:23-04:00

Photography is a fantastic craft to which now, with the introduction of digital photography, many more people have access. Great photography relies on an ecosystem of factors to turn a simple scene into a compelling vision. Just like in business. The similarities between photography and business are remarkable:

What makes Apple different

The Venture Company | venturecompany.com — 2008-06-10T10:09:24-04:00

Is the question that was posed to me recently. My short answer is: macro-economics.

Don't listen to customers

The Venture Company | venturecompany.com — 2008-06-06T11:25:59-04:00

The key to understanding customers is to observe them, rather than to listen to them. As in most life scenarios, what people do and what they say are quite different...

The sweet taste of success

The Venture Company | venturecompany.com — 2008-05-18T19:06:09-04:00

My grandfather did not have access to the funds we have at our disposal in Silicon Valley, but the rules of success have not changed...

Getting to know your VC (better)

The Venture Company | venturecompany.com — 2008-05-14T15:42:37-04:00

Be prepared to talk to more Venture Capitalists and saddle up for an extensive roadshow. The cost of doing business to entrepreneurs and investors has increased dramatically...

The (simple) difference between Apple and Microsoft

The Venture Company | venturecompany.com — 2008-04-21T16:57:59-04:00

The difference between Apple and Microsoft can be viewed in a simple manner, just...

The (technology) language is the problem

The Venture Company | venturecompany.com — 2008-04-02T15:26:06-04:00

The democratization of the internet requires that we make technology more accessible and easier to understand and implement. Only then will it reach real mass adoption...

How developer platforms (should) drive marketplaces

The Venture Company | venturecompany.com — 2008-03-24T15:28:42-04:00

Since a platform is the technology foundation for a marketplace, platforms - to achieve extraordinary growth - need to instill the rules of marketplaces...

Why Amazon is not a marketplace

The Venture Company | venturecompany.com — 2008-03-17T15:38:08-04:00

Amazon.com is a Super Store which, by expanding the relationship with other premium suppliers mimics the appearance of a marketplace, but is not...

10 Fundraising lessons learned over 10 years

The Venture Company | venturecompany.com — 2008-02-28T19:03:01-05:00

Since we raised a fair amount of money ourselves in the last 10 years we've been focused on startups, I wanted to give some advice that may be helpful to any first time entrepreneur...

Getty Images sold for $2.1B; did Grandpa posthumously bail them out?

The Venture Company | venturecompany.com — 2008-02-25T14:00:09-05:00

Getty-Images pulled it off as we indicated would happen, and sold itself to private equity group Hellman & Friedman LLC in San Francisco (and the "network of the private equity group" which apparently includes the Getty empire) for a little over 2x revenues, assuming also an additional $300M in debt. Someone clearly felt that was an accurate price for its organic growth business: "Wall Street was paying more attention to the stagnating core business than to its emerging segments."

Indeed, non-organic growth is hardly ever a sustainable endeavor, lacks core competency and focus and often hides many skeletons in the closet. Now the fun part of discovering its real value starts, although the company does not forecast a lot of changes according to this interview with Jonathan Klein, Getty-Images' CEO and PDN. We could suggest a few fundamental changes along the lines of my blogs and then some.

But anyway you cut it, this will turn out to be good for photographers and the market. New competitors will spring up and VCs will now perhaps see the value in supporting imaging marketplaces. So for that, we need to congratulate Getty-Images.

Loving Apple TV even more

The Venture Company | venturecompany.com — 2008-02-24T14:48:37-05:00

Media and content are the new Consumer Packaged Goods of this century and if technology vendors don't invest in the ecosystem around it their technology solutions will continue to yield mediocre user experiences and sub-par adoption...

Getty-Images: Q4FY07 Earnings call fog

The Venture Company | venturecompany.com — 2008-02-14T19:15:30-05:00

We could debunk every statement Getty-Images made in its recent earnings call but we've essentially done so in our extensive blogs about the company. Apart from the negative outcome of the call, we instead want to highlight the systemic attitudinal problem of the company.

First off, Getty's success is based on the fact that it believes it can predict how images (or other media assets) are going to be used by the buyer. It continuously re-purposes images and image rights to meet a supposed buying trends it is never going to be able to predict. With massive changes in photography Getty has frequently trailed trends rather than enabled them. The usage of the image should be determined between seller and buyer, with Getty's infrastructure merely supporting that transaction.

Second, the usage and type classification in the earnings call is the kind of double dipping I've seen many companies in trouble do. There is a dramatic overlap between editorial, creative, rights managed, royalty free, royalty ready and a myriad of other popular image definitions. The sole metric of success for the company is number of images sold at what ASP, and at what cost. No Wall-Street investor will be able to make sense of the fog Getty has put up in the conference call to hide the fact that organic growth is miserable.

Third, Getty arrogantly describes their (lackluster) performance as the market trend, as if they are the market. No, Getty, the market of image usage is actually growing faster than you are able to support. The real news is that Getty is losing market-share.

The lack of transparency makes Getty-Images an un-investable business, both from a market and acquisition perspective. The bottom line from the call simply confirms that, forget about everything in-between.

Getty-Images; the king is dead. Long live...

The Venture Company | venturecompany.com — 2008-02-14T16:52:15-05:00

While there may be some value left in Getty-Images, remodeling an "old-house" in this case appears to be much more expensive than building a new one. We just completed a formal business plan to build a real photography marketplace for less than $5M first round (est. $13M total, less than 1 fiscal quarter of Getty's capital expenditures, to shed light on Getty's inefficient business model).

The "body" of the Total Addressable Market is $22B / year, ignoring the size of the Long Tail of photography Getty-Images has no penetration in, we will. So, a $13M investment would yield $600M in annual revenues based on 30% market-share (even if we were to cover "the body" only). A darn good business, and best of all, it will help great new photographers get "free" and transparent access to buyers. So good karma too. The walled gardens of the imaging marketplace will be torn down.

Aperture 2.0: nice but unnecessary

The Venture Company | venturecompany.com — 2008-02-12T21:39:28-05:00

Apple has just released Aperture 2.0 today. A nice product to manage your photographs has gotten even nicer. But -- there should not be a need for Aperture...

What's next for Getty-Images?

The Venture Company | venturecompany.com — 2008-02-11T12:15:32-05:00

Getty-Images appears to be having trouble getting sold for $1.5B according to an article in The New York Times today. Perhaps the 40+ investment banks on Wall street and an equal amount of large private companies that visited our website really took our Puffer Fish analogy to heart.

So what could be done with Getty-Images? The problem with finding an acquisition partner is Getty-Images' hybrid business model. For a technology acquirer the services business with staff photographers is a burden they will not want to swallow. On the flip side, very few other services companies than perhaps the Associated Press can find solace in the photographer factory that is an integral part of Getty-Images.

1/ Buy company at a decent value
2/ Separate content producer business from content distribution
3/ Privatize each
4/ Sell content production business
5/ Revamp content distribution

ad 1/ To establish a fair price I am eager to see the operating plan metrics separating content production from content distribution in order to find out to what extend both lines of businesses have suffered from being under one roof (there may be some opportunity hidden in there)

ad 2/ Content production is a business model that, in today's world, needs to be separated from distribution. With the internet in place as the conduit for distribution, very few company can still afford to compete with the content produced by a "free-market". There is some remaining value left in the production of "premium" content for a "premium" audience, in the same way the Associated Press is able to provide this service to a confederation or co-op of newspapers.

ad 3/ Build companies that focus on what they do best, one produces content - one distributes it. Not within a single company or P&L or board. Each with its own growth trajectory.

ad 4/ Just like in the "premium" production of news articles (where bloggers compete), the news media will require a "premium" production of editorial photographs that has some trust associated with it. Perhaps a deal can be struck with AP - or a new version of AP can be created with identical goals. Getty-Images already has established a large installed base of agencies who can lease resources on a subscription basis.

ad 5/ Long term, content distribution is where the money is. The Long Tail of photography is massive, much larger in total image exchange than any Super-Store will ever be. Thanks to the Internet. But to build an effective free-market, a core of premium supply is needed to create its initial pull, Getty-Images certainly has that. To make this new company a winner though, it needs to truly support free-market principles, something very few companies can pull off.

We'd be happy to assist in the assessment of the Getty-Images acquisition value along the lines of the aforementioned strategy and even more in the post-acquisition execution. Our passion for photography, the ever increasing reach of the internet, and the value produced by all photographers around the world creates a fantastic new opportunity.

Puff, puff, puff, puff ........... poof

The Venture Company | venturecompany.com — 2008-02-07T18:05:34-05:00

So, if you've read my blogs on the imaging market .... why would you plunk down $1.5B to acquire an Image Super Store like Getty-Images (alias Getty).

Consider this:
1/ Non-agency images are always owned by photographers not by Getty
2/ Getty's assets can vaporize quickly, photographers can switch their assets to a better marketplace instantly
3/ The vast majority of images in the world are not transacted through Getty
4/ Getty qualifies premium photographers not premium images
5/ Getty needs to cannibalize its business model in order to meet the Long Tail market requirements
6/ Getty is diluting focus to higher margin media like film and music, fat chance
7/ Getty has the expensive overhead of an agency, with declining image ASPs
8/ Hundreds of new and competing sites indicate Getty's non-supremacy

There is value in Getty-Images, as an agency or as an image store, but I would not put two diametrically opposing business models on the same P&L. Neither one is worth $1.5B. The imaging Puffer Fish is about to deflate.

Fleeting assets of the imaging Puffer Fish

The Venture Company | venturecompany.com — 2008-02-07T16:28:56-05:00

The Puffer Fish of the imaging market, as described in my previous blog have large volumes of fleeting image assets. In the end that apparent growth comes at a high cost. So witnessed by the most recent disappointing earnings reports...

Diving deep with imaging Puffer Fish

The Venture Company | venturecompany.com — 2008-01-29T18:43:53-05:00

Getty-Images by no means, has amassed critical penetration in the Total Addressable Market of image exchange. But if you artificially constrict the size of the market by calling it stock, rights-managed, royalty free, editorial or creative, perhaps you can swing it. Undoubtedly someone will buy into it.

The Puffer Fish of the imaging market

The Venture Company | venturecompany.com — 2008-01-27T15:03:16-05:00

Twenty years ago Getty-Images started with a $20M investment from grandpa Getty and has continued to purchased a wide array of photo agencies (hence the Puffer Fish) and large libraries of photographs that over time become stale ...

Imaging sales market broken from the top

The Venture Company | venturecompany.com — 2008-01-23T14:09:44-05:00

I have received quite a few comments on my previous post (like this) on the imaging marketplace and I am making an attempt to clarify my condensed writing.

The market of selling photographs is fundamentally different from that of selling music, books or other goods. Rather than selling "premium" supply as defined by the number of people that buy the same product, the value of a photograph is defined by how little it sells (just like art). Fundamentally a photography superstore (like Getty Images, Corbis, Jupiter Images and even Digital Railroad) that sells the same image the way Amazon sells books yields the wrong value to the buyer.

A buyer doesn't want the photograph he is about to purchase see appear in deep circulation, yet a reader of a book makes a buying decision based on popular opinion (Oprah, iTunes) and purchases it too. Selling images (and art) requires an inverted superstore that derives its value from the massive distinctive images it sells. Coincidentally the imaging marketplace has changed dramatically from a monolithic market (between agency and pro-photographer) to a Long Tail of supply and demand (between anyone and anyone).

A fantastic opportunity lies ahead to create a new marketplace for photography that caters to new and high growth audiences. Don't get discouraged by the puffer fish of the imaging industry, that portray they own the market. They don't.

Image catalogs in peril

The Venture Company | venturecompany.com — 2008-01-21T16:40:58-05:00

I doubt that Digital Railroad will develop the appropriate macro-economic strategies that determine the success of any real "free-market" marketplace at this point, and it is therefor doomed to fail...

Bose: A great company experience

The Venture Company | venturecompany.com — 2007-12-30T11:12:30-05:00

Bose, still private company to balance earnings with a sincere interest in keeping its customers happy is admirable. More fundamentally, successful companies understand that building a lasting brand means they pay attention to customer retention...

Develop an experience, not just a product

The Venture Company | venturecompany.com — 2007-12-13T14:00:01-05:00

I see too many BMW engines being developed without attention being paid to the development of The Ultimate Driving Experience®. True, you can't build the driving experience without great engines, but BMW, like no other vendor understands that the total experience is the selling point...

Pairing chefs and cooks in technology

The Venture Company | venturecompany.com — 2007-12-05T14:35:06-05:00

In the food industry there is a clear distinction between a chef and a cook. A chef invents new dishes from scratch through experimentation, deep knowledge and experience.

The new photo-editing era, a me-too service

The Venture Company | venturecompany.com — 2007-09-18T12:26:17-04:00

Photo-editing today is still an art form, a specialized and necessary art - and "endured" by prosumers. The great photography you see hanging on walls, on websites or in magazines, all have been edited digitally. Not necessarily to create some outrageous creative effect but because not a single camera accurately captures what your eyes see. Not since the invention of photography in 1870.

Camera vendors promise better results when their customers purchase a more expensive dSLR (digital Single Lens Reflex) camera, a better lens, a solid tripod, a new filter, and, while we’re selling: a new photo bag. Yet, none of those products do anything to change the fundamental difference between what your eyes see and what the camera produces. With a healthy growth of more than 60% worldwide in dSLR sales (according to new 2007 numbers from CIPA), most camera vendors are not in a hurry to out-innovate themselves as their current stance is feeding their business so well. So, the problem remains, camera output is far from ideal.

So today, the great results photographers strive for can really only be achieved through editing, reproducing what you tried to capture. That editing today happens primarily on the desktop (less than 10% of the whole photography market edits online) and by digital SLR users with a great sense of quality and aesthetics. Products are plentiful, such as Adobe Photoshop, Adobe Lightroom, Apple Aperture and my favorite: LightZone. Yet none of those products completely hide photographic complexity to its new users; the massive numbers of dSLR buyers that just want to create great photographs.

Photo-editing should work like a car, simply put the key in the ignition and drive (without having to worry about how the engine and the transmission works). The editing tool of the future should embed the photographic knowledge and make decisions or recommendations for you, rather than requiring its users to become proficient in the minutiae of color and light. Just like a car, photo editing should be able to go where others have gone before, enriching the experience of new users on a continuous basis. New editing techniques should be sharable through a language we all understand, a photograph. In short: edit "like-Mike" and me-too editing is born.

I believe photo-editing will move away from what it is today, a basket full of technology tools to a service through which the sharing of editing techniques will enable the new "language" of photo-editing. That dramatically simplified language will subsequently enable editing for the long-tail of the photography market, the massive market of point-and-shooters. New technologies such as Pixenate, Picnik, Adobe Photoshop Express already rush to deliver a new basket of tools for the consumer market. And many others will follow.

Today, plenty of opportunities remain in the prosumer editing space in which no vendor has amassed even close to 30% penetration. New editing capabilities are bound to drive the marketplace in which monetization of photographs and, eventually a free-market for photography can flourish.

What's left for the innovative camera vendor is to build a proprietary imaging pipeline that dramatically reduces the need to edit. With 90% of dSLR vendors using the same imaging pipeline (behind the sensor) the time is right to change the way a camera captures data before it reaches the sensor. In the same way your eyes do very smart tricks before light hits the retina.

I have a dream...

The Venture Company | venturecompany.com — 2007-01-08T22:35:29-05:00

Many times I am asked to help a foreign (usually European) company to make it in the United States. But the pursuit of the American dream requires that sacrifices be made. Everyone wants to be a star like Elvis Presley, yet few have the real determination to do so.

So, why are US companies so different. The internet is releasing the fictional boundaries of technology, making its usage and its future development available to anyone. Universities in Europe are doing a much better job teaching technology, yet we don't see a significant amount of European companies become successful. What is going on?

While I don't have all the answers, I can offer a few personal observations of why the American way - and - dream is alive and well:

1/ More entrepreneurs are bred by a capitalistic society than a socialistic society. Entrepreneurs with a personal stake and drive for success boost investor deal flow and premium supply. A significantly larger investor pool yields higher valuations for premium supply.

2/ Solid early-stage business acumen. While technology and programming skills can be acquired by virtually anyone, the European petri-dish, the ecosystem that supports the early-stage exchange of technology products and services is missing. As a result people with the business skills needed to bring those early stage products to market rapidly is virtually non-existent in Europe.

3/ Resilient attitude. Young Americans (and ex-pats like me who never felt at "home") are taught to make money and make themselves happy, young Europeans are taught to get a job at a reputable company and be happy. Taking risk and thinking different is a requirement of being a successful entrepreneur, in addition to withstanding a great amount of adversity.

4/ More risk-taking buyers. Customers, partners and acquirers are more entrepreneurial too. Aggressive competitive cultures force buyers to be more entrepreneurial. Technology innovation is accepted as the instrument of differentiation in many US businesses and customers will buy products that give them competitive edge and better quality-of-service.

5/ Continuous focus. Focus on success, short and long. Building a business that goes through several transformations to meet continuous market milestones is crucial to success, rather than a formal majestic plan with many dependencies that never materializes.

So, is there no hope for foreign technologists? Au contraire, I've seen some great technologies that, if unlocked, can find early traction and impressive valuations. It's time to judge a technology not by the country it comes from but the content of its innovation. The american dream is waiting for you. Are you up for the ride?

[In remembrance of Martin Luther King]

New opportunities in gaming

The Venture Company | venturecompany.com — 2007-01-07T12:12:33-05:00

While the console vendors battle it out on price and performance, we are seeing new entrants prepare themselves to enter the home entertainment demographic with new "game-play" propositions. The console vendors will see competition at a different level

Quality is important

The Venture Company | venturecompany.com — 2006-11-12T12:02:45-05:00

ctv_logo

To quote Walt Mossberg of the Wall Street Journal at Consumer Technology Ventures last week, quality is an important pillar of success for consumer products and I couldn't agree more.

Per-plaxo-ed

The Venture Company | venturecompany.com — 2006-08-01T00:08:12-04:00

I am perplexed about Plaxo. With so many hot-shots of the Silicon Valley VC elite on the board, including Michael Moritz from Sequoia, Tim Koogle of Yahoo! and Ram Shriram of Sherpalo, this company still seems to be looking for its identity and even worse, its strategy.

Since the Mac beta version was released just recently, I took a moment to try it out. But without going into detail about that disappointing experience, let me tell you how I achieved Plaxo nirvana without it. For over two years I 'abuse' LinkedIn in a way that tops the Plaxo service: every now and then I re-upload all my 2600-and-growing contacts to LinkedIn and then export the whole list back out as a group v-card. The Mac address book will then import those and politely ask me to update the existing contacts. Voila, all contacts are up to date from a single source.

LinkedIn is much more than contacts however, it draws in users that want to connect with others based on past experiences and then exchange their contact information. So, Linkedin is essentially the application on top of a contact database. With 10 Million users Plaxo better figure out real fast what the application on top of it looks like, LinkedIn is moving upstream to a higher value proposition but has an opportunity to move downstream and squash Plaxo whenever it feels like.

So who is not paying attention here?

BlackBerry just got a make-over (by Cingular)

The Venture Company | venturecompany.com — 2006-07-27T16:54:14-04:00

Did Cingular read my my rant about the ugly designs of Blackberry? The new 7130c from Cingular (not to be mistaken with the still ugly 7130 from other carriers) comes closer to what modern design for a PDA-with-phone should like like.

Having tested a ton of phones, PDA's etc over the years, the 7130c is a very attractive competitor to the bulky Palm Treo 650 and ... certainly more usable. The small dimensions of the 7130c cuts the size of the older Blackberry almost in half, a little thicker than the Motorola RAZR (which I love) and a bit taller, the 7130c still fits in the pocket of my pants easily. I like it so much, that I decided to get rid of my old Blackberry (on eBay) and my RAZR (although I'll keep it around, just in case) and combine two capabilities into one.

The 7130c with EDGE internet connectivity is actually fast enough to make it a delight to browse the internet (and visit the WAP site of CNN) and read e-mail, while waiting for the traffic light to turn green. The industrial design is good enough (not great) and appealing, the screen that is clearly visible in bright sunlight and adjusts automatically to your surroundings. This is absolutely the best screen I've ever seen on a mobile device.

Phone services are integrated into the PDA capabilities, but this part could be more intuitive. The heritage of the scroll menus from the Blackberry PDA platform complicates things beyond what is necessary. More 'special purpose' buttons would solve the problem. For now however, the Blackberry 7130c has become my new one-eyed king in the land of the blind.

Web 2.0: a technology foundation for free-markets

The Venture Company | venturecompany.com — 2006-07-10T17:46:12-04:00

Many times the question comes up, what exactly is Web 2.0? Although we are not great supporters of buzzwords that have little real meaning, we are - just this time - tempted to put our big-thinking in the mix.

We believe it describes a set of technologies to support the immense popularity and growth characteristics of free-markets.

Free markets have been in existence at least since 1637, when dutch growers imported Tulips from Turkey and engaged in heavy bidding wars with buyers at the onset of the flower markets. [In the interest of "full-disclosure"; I grew up in Holland].

The Dutch auction (also referred to as "The Essence of Fairness" with respect to IPO markets) was created when ample supply was met with equally impressive demand, and a unique trading mechanism was developed. Apart from the details of the trading options (which eBay has adopted), we want to focus here on the dynamics of the market that are so different from the technology industry in its current incarnation.

The technology industry (still in an immature state) has built success around companies that identify and carve out a one-to-many relationship with customers. Successful companies like Microsoft, Oracle, Cisco etc. staved off early competition and now act as the single asset owner of the technology they sell to many customers, fearing little organic competition. We call them what they are; demi-cartels. A great position to be in and very profitable, but the technology market is about to get a shakeup, not dissimilar to what happened in the flower markets.

The creation and composition of technology assets, whether those assets are applications, databases, code or new media content, is emerging from the hands of specialists into the realm of a much broader set of providers.

Suddenly, the technology industry faces competition it has never seen before. And it is responding by changing its tactics [technology taxonomy in motion], it has to. Oracle loses a big customer because it refuses to put up with fat margins, exorbitant pricing and 20% support fees and makes the switch to a little vendor called MySQL. New online capabilities enable Craigslist, where posting classified ads is free of charge, to hasten the demise of traditional newspaper classified advertising. MySpace takes the need for people to express themselves out of the hands of the specialists.

New many-to-many market models arise and dramatically impact the old rules of the game. New content establishes micro-celebrities that drive the popularity of a free-market technology platform. The Pareto principle is dead (well, not really - its amplitude will change).

So, Web 2.0 is a platform strategy (rather than a proprietary stack) that enables many-to-many relationships between buyers and sellers of electronic assets. When transparency and integrity are key objectives in the creation of these marketplaces, Web2.0, with whatever technologies that represents, actually has a chance of becoming a buzzword we can speak fondly about.

Security 3.0: from after-market to security platform

The Venture Company | venturecompany.com — 2006-04-21T12:02:14-04:00

Internet security companies are the Jiffy Lubes of the auto industry, they require constant innovation to keep up with the changing product stack they attempt to optimize, but not own. Some companies achieve innovation through non-organic growth (Symantec), others build a set of urgently needed technologies that becomes bigger as customer requirements grow (Trend Micro, McAfee). But keeping up is a challenge, and I expect security companies and the stack owners to aggressively pursue acquisition strategies to round out and secure their own future. Stack owners (Microsoft, Oracle, IBM, Cisco) will become fierce competitors to security companies, if partnerships are not appropriate. Today's Security leaders need to change and look into new business strategies.

Looking at the security marketplace from a fresh perspective, I give the current marketplace a 1.2 grade on the following evolution scale.

Security 1.0: the internet is not secure by any stretch of the imagination, but neither is the conventional world. So, get over it. Security is also not an absolute science. Spam, Viruses, Exploits, Worms, Cross-site scripting etc. deliver a vast amount of opportunities to security companies that provide band-aids to the multitude and severity of security gaps. 83 Enterprise AntiSpam companies battle it out every day. Leaving it up to customers filled with fear, uncertainty and doubt to wade through a plethora of point products to select which one is best, and when. It's a jungle out there.

Security 2.0: a secure enterprise, shielded from some of the garbage on the internet, needs protection in the same way you secure your house. Depending on personal preferences that define the vigor and quality of security, securing the doors without securing the windows doesn't make a whole lot of sense. Security is really a risk management issue, a delicate balance in which no single piece of security, data type or communication channel prevails; the equilibrium of security techniques (AntiSpam, AntiVirus, AntiSpyware, Web Application Security etc.) needs to provides sufficient shelter and trust. Leading security companies need to move towards marketing that equilibrium and scope.

Security 3.0: while internal threats are becoming a force to be reckoned with, many security companies are developing a Security 2.0 strategy that incorporates content compliance and other technologies to protect company assets against the employees themselves. I believe security companies should focus on aggressively protecting against outside threats, yet stimulate and enable the internal exchange of information. Content compliance should be checked but not enforced. The integrity of your business lies in the hearts and minds of people, not technology. Moving on, Security 3.0 is a platform strategy consisting of a framework in which a multitude of vendors can provide plugins that separate threat detection from distribution. It will be a free-market in which the best technology will plug into a framework that allows this technology to be used on any type of information, in motion or at rest. I believe many stack owners and security behemoths will play a pivotal role in defining the key components of this security platform and new security specialists will define the new, and highly specialized, security threat detection capabilities.

Bottom line: plenty of acquisition opportunities continue to exist for emerging security companies as the incumbents and stack owners battle to own a large part of the security framework that is essential to instill trust with customers.

The size of after-market providers like Jiffy-Lube, AutoZone is larger than the market size of the car manufacturers, proving that after-markets will exist for quite some time. Security is still the after-market of the technology industry and I see no vendor changing that paradigm significantly today. New security vendors will continue to reap rewards and the incumbents will slowly move towards owning something they've never had, a technology (or platform) stack.

The brains are in the service

The Venture Company | venturecompany.com — 2006-04-10T19:40:49-04:00

Recently I was asked to think about how to improve the phone features and functionality in an ever commoditizing "Terminal market" (an Ericsson acronym). There is a lot at stake here; lots of people buying phones, 2.2B of them to be exact, not enough of them buying the associated internet service.

Improve the specs and make it look good is the easy answer to that question. That is, if you are building a phone not a PDA. In a PDA you can pull technology, services and memory into a bulky enclosure and rely on nerdocrats to buy them; not a large market. So how do you build a phone that is just as smart and fits in the enclosure of a RAZR? Or smaller? Research shows that people buy cool looking phones, rather than bulky ones stuffed with functionality.

The answer in my view is services. Just as the power of the iPod stems from the iTunes library on your desktop connected to the iTunes store, phones should become re-play devices to services provided on the backend. The phone should be an iPod geared towards managing and replaying service data; contacts, calendar items, music, news are pushed out to it automatically, pictures are taken, stored and uploaded automatically to your section of the "store", ready to be shared and, yes, sold. Enabling free market principles to the content distributed by these services, completes the value chain and drives growth of the platform, regardless of phone.

Phone manufacturers need to learn how to build a value chain, not just a phone. Business innovation is just getting started.

Bye, bye Treo and Palm

The Venture Company | venturecompany.com — 2005-09-30T07:35:00-04:00

Last week I bought a Motorola Razr to replace my Treo650. It is beautiful, highly functional and tiny, and folds open to something substantial in my hand. The Razr synchronizes all business data from my Apple Powerbook wirelessly over Bluetooth, including most contacts and calendar appointments. At a quarter of the size, and a third of the price of a Treo it keeps me just as informed. No wonder Motorola sold 6 Million of them. Lucky Ed Zander, Motorola's CEO who rolled into Motorola (from Sun) after the Razr had already been conceived.

Apart from previous comments in this blog about the Treo with regards to UI, target market etc., the Treo's bulky form-factor (which still reminds me of the old Ericsson, pre-Sony phones) with its pointy antenna, really started to bother me. I felt like a cop patrolling the neighborhood with a gun in its holster.

But the real reason for my change is a strategic one. I lost confidence in the Palm (Source) platform and so apparently has Palm's CEO. The announcement of the Treo700 based on Windows Mobile has reduced Palm to a commodity hardware player with not much to be proud of. Owning and refining the Palm OS and segmenting it to identifiable target markets would have been the winning business strategy.

Amazing is the power and persistence of Microsoft who now delivers the Windows Mobile version on PDA phones from Motorola, Sharp, Samsung, HP and other brands, steadily repeating its Windows PC software success downstream. I am eagerly awaiting Apple's foray in the phone OS business.

Great Technology = Great Company?

The Venture Company | venturecompany.com — 2005-09-02T15:26:00-04:00

On a regular basis entrepreneurs approach me with jaw-dropping technology, wonderful to look at from an innovation perspective but many times hard to envision as a standalone sustainable profit center. So what technology makes a successful company?

Technology is becoming a commodity. Think about it from a macro-economic perspective. Information technology is the instrumentation, not the differentiation of customer businesses. World's largest retailer, Walmart does not rely on technology to be successful, technology was barely available when Walmart started. Walmart built an effective business model and, in-house continuous to shape technology to support the business model. No packaged apps, or technology silos here.

Technology companies do become successful when their technology drives, usually with incremental improvements, the evolution in a marketplace. Google is successful because it optimized the online advertising business model and increased its effectiveness. It's all about market principles, not technology (BTW: which average user can tell the difference between Google and Yahoo! search). eBay is successful because it empowers free-market principles and supports true meritocracy in the sale of goods.

Bottom line:
1) Investigate defunct, constricted or outdated markets and build technology that improves the effectiveness of those markets.
2) Find capital from investors that understand the market and appreciate technology, not the other way around.

Market principles are seldom wrong, the instrumentation often is.

Perception is reality; Apple a consumer company?

The Venture Company | venturecompany.com — 2005-08-16T16:48:00-04:00

"Apple is going in a different direction than we want to go." That is the statement from a long term Apple customer (10+ years) we recently talked to. The Apple Store in Palo Alto has recently been revamped to where the iPod and its accessories seem to make up the majority of the new store layout. Media software has been tucked into a little corner in the back. Enterprise software for Small and Medium Enterprises (SME), like FileMaker Pro Server is virtually non-existent, "you can get that online" was the response from an Apple representative.

Did you know Apple is actually making more strides than ever in the enterprise business? Oracle, MySQL and a lot of other mission critical software now runs on OS X. Apple risks loosing SME foothold if it does not carefully balance advertising the iPod trojan horse with the reasons why it created the iPod, selling higher margin products. Enterprise software may not be bought in a retail store, but providing exposure and demo stations with enterprise and SME solutions are critical to changing a destructive perception. Or does Apple plan to open new Business Stores soon?

Broadcast Media unleashed

The Venture Company | venturecompany.com — 2005-08-09T15:04:00-04:00

Traditional Broadcast Media is about to get a major overhaul. Traditionally the demi-cartels, consisting of the networks (like ABC, NBC, CBS or in radio Clear Channel, Vivendi etc.) have a stronghold over content production and distribution. Control of these segments is under tremendous new pressure.

1/ Content stronghold
For less than the average cost it takes to setup a restaurant, no more than $50,000, a professional video content production company can be created to produce top quality 1080p HD content (radio can be produced at a fraction of that cost using podcasting technology). Imagine a world in which the number of content production firms rivals the number of restaurants in your town (and not just Al Gore's new Current Network). Soon we will embrace new anchors and fresh programming throughout the whole season, instead of the four seasons of repetitive programming mix we have been forced to swallow for so long.

2/ Distribution stronghold
Most networks own the stations. Up-and-coming content producers are forced to do business with and, obey to the rules of distribution players to get exposure. Now with the advent of IP Television, Podcasting and upcoming convergence technologies from Tivo and Netflix and others, diverse content will be brought to anybody with an internet connection. The judgement of good content will finally rest in the hands of the viewers.

Two major factors play a role in the acceleration of change:
1/ The slowdown: The FCC is working at its own pace to change the 40-year old rules of broadcasting through governmental processes and buy-in.
2/ The speedup: The unstoppable adoption of the Internet will create new broadcast heros and "networks" that reach a broadcast and market hungry audience; our youth.

Networks better get their act together, build their own internet distribution delivery strategy, determine what people really want to watch, use real (not analytical or statistical) popularity data to up-sell popular internet programs to network television. It is not too late for networks to respond, but their time is running out.

Let the games begin.

Advertising Make-over

The Venture Company | venturecompany.com — 2005-08-08T18:06:00-04:00

Blog readership in the first quarter of this year jumped 45 percent to 49.5 million people, or one-sixth of the total U.S. population, according to a report in Red Herring today. As potential buyers are looking to learn from micro-celebrities what to buy and visit the blogs that gave these micro-celebrities their status, advertisers have new opportunities to attach specific marketing messages to specific content in these blogs. A new Adwords or Vibrant Media - like opportunity where blog content is matched with pre-defined and pre-paid advertising keywords or categories is on the horizon. Advertising strategies are changing fast and about to get a big makeover again. Never before have advertisers been able to target buyers more precisely. Another reason why the Internet is becoming such a powerful distribution channel.

PowerPC or Intel, who cares? Or do I?

The Venture Company | venturecompany.com — 2005-07-09T04:56:00-04:00

Apple switching to Intel is a move that stunned the faithful Mac community, yet most of us knew Mac OS X was derived from a dual core OS Steve Jobs had been running for a while at Next. Had we forgotten?

Did the success of the iPod blur our vision? But more important than the choice for Intel CPU's is the impact on the choice for other hardware components of the computer. The Mac derives its cool look, slim laptop design, unique features and true innovation from a primarily proprietary hardware design process. Low cost and commodity designs from mostly Intel, AMD, and other mass market producers still turns out computer bricks. Intel performance is good, instead of "Intel Inside" just add "Apple Everywhere Else".

Oracle Collaboration "sweet"

The Venture Company | venturecompany.com — 2005-07-09T02:51:00-04:00

While attending Tony Perkins' Media 100 beer-and-burger bash at the Alpine Inn, I was confronted by another opinionist that questioned Oracle's foray in the Enterprise Collaboration business. Indeed, it has been a long road; Oracle*Mail, Oracle Office, Oracle Library, Oracle Documents, Oracle Workflow, Oracle InterOffice Suite, Oracle InterOffice, Oracle Collaboration Suite is the reincarnation Oracle's installed base has been hit up with since 1990. As the lead salesman (or should I say Director of Worldwide Marketing), more than 7 years ago for Oracle Office and InterOffice I learned a few important lessons that stuck with me forever.

For one, technology does not sell. Oracle's collaboration tools were then, and are now some of the best in the business.

Two, deliver a proposition to sales people that matches the vendor's existing business model. Incompatibility of business models is why 800-pound Gorillas can't buy themselves into new categories.

Three, commission sales people competitively to other proven product offerings. Don't let your weakest sales people hide behind selling the "impossible". Again, Oracle's technology is not the problem, incompatible business models is the real issue. I see a bright future for Oracle's Collaboration Suite as the software-as-a-service solution for customers who have bought into Salesforce.com's business model.

Now, Digital Asset Management, often erroneously merged into the Collaboration substrate, is a market category that Oracle needs to own and quickly. "Unstructured" data and corporate media management markets are currently growing at a clip of 45% a year, faster than RDBMS or ERP growth. If Oracle wants to be the database for all corporate data, digital asset management is the real opportunity, not only because it works best with Oracle's organic business model. I've got suggestions for Chuck (Rozwat and Phillips) of who to buy to get in quick.

Step it up Skype!

The Venture Company | venturecompany.com — 2005-06-29T13:22:00-04:00

As the number of simultaneous Skype users topples two million, audio quality starts to degrade and excitement about a great alternative to costly international calls starts to wane. My weekly calls to Australia and Europe are getting less reliable every month. It is time for Skype to step up its relationships with eager VPN providers (perhaps even the ones that have not joined the proprietary VOIP deployment) to deliver quality-of-service levels that maintain the superb voice-quality we got accustomed to during Skype's inception. I would have no problem paying a small fixed monthly service fee to improve call quality and it could turn Skype in a much more viable and profitable business. Any network provider would be eager to become the backbone of Skype's popularity. Akamai, are you listening too?

Podcasting; a new free market by Apple

The Venture Company | venturecompany.com — 2005-06-28T14:00:00-04:00

Radio is about to get a major overhaul. With iTunes, record companies are losing their arbitration, no longer are we forced to buy collections (CDs) in order to enjoy that one favorite song. In the near future that power will be diminished even further. Musicians will post their music without intervention and arbitration of a record company, giving buyers the ultimate selection of music they want to enjoy. Pod-casts is the technology that allows you to pick which radio segment you'd like to listen to (instead of a whole program), and deliver it to you at whatever time is convenient. More exciting is that the creation of pod-casts is open to everyone, allowing anyone to get on the soapbox and speak their mind to the world. Independent reporting from the trenches is only minutes away. New music stations will spring up and deliver music from all corners, to all corners of the globe. Welcome to a free world.

LaserCard; Silicon Valley's best kept secret

The Venture Company | venturecompany.com — 2005-06-26T20:22:00-04:00

With homeland security as a hot topic these days, LaserCard in Mountain View (NASDAQ: LCRD, formerly known as Drexler Technologies) quietly continues to ship millions of unique memory cards as the foundation for "Green" cards and National ID cards to US, Italian, and Canadian governments and others. In addition to its incredible resistance against wear and tear (we punched holes in it and it still read successfully) and unique security features, the LaserCard stores an impressive 2.8M of personal and biometric data. Fingerprints, retina scans, voice encoding or whatever becomes the prevalent set of biometric verifiers, can be combined with visual authentication to ensure the holder of the card is indeed the one presenting himself. All these attributes can be stored on the card and read offline without the need for centralized databases. So why is homeland security not using this card to it's fullest potential? Why does it waste time on privacy debates with regards to centralized storage? Why, four years after 911 are we still not able to verify a persons real identity?

Google versus eBay; room to spare

The Venture Company | venturecompany.com — 2005-06-21T11:49:00-04:00

No-one can ignore the power of Google. Undeniably it has built a brand that draws huge advertising dollars. Not dissimilar from Yahoo five years ago. Unlike Ray Lane (who we recently pitched to with a marketplace investment) we don't believe Google will be the player that takes all. Google is a place where you find things (among a lot of things you don't want) and eBay is a place where you know what you want and trade it. Google CEO Eric Schmidt left a little more room than Ray in a recent interview with Charlie Rose, clearly leaving the door open for both players. But what is eBay doing? eBay still seems to be getting bigger, but not much smarter. As with any company, staying true to the core of your success as you grow is a challenge. Many temptations lie ahead.

But fundamental to eBay success are the free-market principles. Offer virtually unlimited supply without arbitration to a Long Tail demand, and simply reap the transaction commission benefit. What does the $620M acquisition of Shopping.com add to that proposition? eBay's opportunity is in developing new trade verticals (consumer, pro-sumer and professional) in which historically demi-cartels limit the supply, open those up with the existing transaction engine and voila. Google is a technology company relying heavily on technology innovation to sustain growth. eBay markets to users who are not necessarily technologists and it should act as a market influencer opening up constricted markets with modified versions of its existing technology.

Treo650: In the land of the blind, the one-eyed is king

The Venture Company | venturecompany.com — 2005-05-26T09:01:00-04:00

As a fervent Macintosh user (I have never bought a Windows PC in my life, but been "forced" to use one), the Treo650 is about the only game in town to get your office with you on the road. The success of the Palm in 1997 started with a simple concept, provide business users with four simple buttons that gives them access to everything they need. No more, no less. Since then the Palm platform has grown in all directions, except the one I need; better support for the business user. I like access to e-mail and a decent browser, I don't like the fact that many of the phone software capabilities are not truly integrated with the original Palm software capabilities. Bluetooth performance of the Treo is below par, calls sometimes do not get sent to the Treo headset, regardless of the button you press (the headset works fine with my Powerbook and Skype). Categories don't work with the Mac. Call log can't be scrolled through using navigation keys. No keystroke consistency between applications. No global hot button consistency. Inconsistent user interface behavior between applications. Should I go on?

Opinion: I wish Apple made a phone, using a proprietary device that serves the needs of a business user very well (a key target considering its $500 price point) , instead of trying to appeal to a broad software market. In the same way the iPod did that for music players. Proprietary platforms competing with "open-source" will yield better customer value, Apple please bring it on.

Seismic changes in Digital Entertainment

The Venture Company | venturecompany.com — 2005-05-06T14:52:00-04:00

Attended the Churchill Club seminar under the same name. Interesting speakers were Chuck D (Public Enemy), Roger McNamee (Integral Capital Partners, Silver Lake Partners, Elevation Partners) and Blake Ross (Firefox creator). It is becoming clear that the old rules of how to create or tap into large media markets have changed. To own these markets one must provide a large selection. MP3 music sharing has given listeners a taste of virtually unlimited supply they are not willing to give up on. The Long Tail roars its head yet again. Tivo1, Mike Ramsay added that 50% of programs recorded on Tivo are non-popular programs. Roger quoted the Death of the Pareto principle. The Palo Alto library has known this for many years, more than 75% of its purchasing budget is for non-popular selection. Mobility and locality were mentioned as important side effects of Long Tail markets. The ability to serve up that wide selection on a wide variety of devices is crucial. Arbitration of content (the way record companies enforce The Pareto principle) is no longer accepted by buyers. Buyers want to find any creative material they are interested in, and in some cases, want to have the ability to get in touch with the artist directly. New search capabilities become important to weed through large selections, Google capabilities were considered insufficient. Scanning type search, "I know it when I see it", provides interesting new browse capabilities for buyers. Blake added that as a technology industry we have the responsibility to make things easier to use before we move on to another golden opportunity. We agree with Roger that media should become the new Consumer Packaged Goods.

Getty Images; the image demi-cartel

The Venture Company | venturecompany.com — 2005-03-28T18:44:00-05:00

Getty Images, the self proclaimed market leader in the $7B stock photography market, recently posted an impressive $622M in 2004 revenues. Our in-depth analysis of the market actually shows a 2004 decline in Royalty Free and Rights Managed images sold compared to 2003 and Getty making it up by increasing ASPs significantly and a small increase in editorial sales. Royalty free images were sold at an ASP of $210 compared to $150, Rights Managed images moved up to $585 from $560 in 2003. While the company boasts an impressive 70M images on file, our analysis shows Getty Images sold no more than 1.5M images in 2003, a 3.5% market share of 43M images sold each year in the stock imagery market. Hardly a gorilla, want to know what are they are really selling?

Our opinion: Agency & distribution model are in conflict, restricting organic growth.