It’s inevitable. Every year we have our “first real snow” in Boulder. That would be – today.
Coinciding with the first snow – 100% of the time – is an Internet outage at my house and at our office. Since we use IP phones, are connected to our infrastructure in our California office via point to point, and my T1 line from my house is direct connected into the office, and outage is – well – a major pain in the ass (did you know you can’t make a phone call on an IP phone from your house if your network is down – duh – yeah I’ve got a land line in this server room somewhere, now where the hell is it?)
I got home Saturday afternoon from being on the road for 18 days. I was looking forward to a mellow weekend with Amy catching up on stuff, including a bunch of random things that I wanted to get to on the web. Wrong. No Internet. Qwest dispatched someone to my house Saturday night (kind of a drag, but at least they were trying) but he couldn’t do anything because no one was “at the other end of the line” to troubleshoot things.
Ok – well – that’s not such a big deal – I went to Amy’s office in Boulder with her on Sunday and we camped out there (she has a beautiful office in downtown Boulder close enough to the Rio for some awesome huevos rancheros (no – not the Ranchero/NewsGator kind.)) We punted the “Qwest: we’ll try again on Sunday night” thing and just decided to have an Internet-less Sunday at home and an early night.
Not knowing access to my email was out in my office (due to the CO – CA point to point being down), I got to the office bright and early at 7am ready to catch up on the weekend stuff I didn’t do. Wrong again. My poor embattled IT guy (Ross) rolled in at 8am cursing and muttering as he went after the Qwest guys to try to figure out what was going on. Did I mention that it was snowing?
It’s 3:45pm and everything is back up. The problem – apparently over the weekend someone ran over one of the Qwest pedistals with a car exposing the wires inside. The solution – put a big orange bag on it.
Now, while that’s a technical solution that will appeal to someone, apparently the bag wasn’t waterproof an the lines got “wet”. My reaction (and Ross’s) – “you’ve got to be fucking kidding me.” It only took two days to troubleshoot that one (and I don’t know how many truck rolls).
It’s last week’s news (literally) but if you are interested in hearing directly from Brent Simmons (NetNewsWire) and Greg Reinacker (NewsGator) on NewsGator’s acquisition of NetNewsWire, Niall Kennedy has a good interview online.
As part of the VC Advisory Board for Microsoft’s Emerging Business Technology group, I like to say that I work for Microsoft three days a year (this is how often the EBT VC Advisory Board meets). We have a meeting coming up this week and – as I get ready to trek up to Redmond – I was pondering the meeting agenda when I came across Dan’l Lewin’s (who runs EBT) recent post titled “Should Microsoft Invest in Startups?”
I have huge regard for Dan’l and have always really enjoyed working with him. While I’m not a Microsoft shill, many of the companies that I’ve been involved in – going back to the very first company that I started – have had “deep and meaningful” relationships with Microsoft. While I’ve been on the wrong end of things with them at times, the benefits of the relationship have far outweighed the costs. Today, Microsoft is a huge place and understanding how to navigate them, work with them, and be effective is non-trivial. Dan’l and his team do a great job of helping VCs and VC-backed companies – it’s rewarding to see some of the ideas and philosophy that we bandy around in our Advisory Board meetings come out in Dan’ls public thoughts.
I didn’t go to Web 2.0 – I hate attending conferences (although I enjoy speaking at them) and try my hardest to avoid them. I’ll go if the conference is relatively convenient to my travels and I’m speaking (like I did at WeMedia – I was already in NY for other stuff), but generally I enjoy hearing about what’s going on from a distance through blogs (it is Web 2.0 after all, right?), the web, and the people from companies I’m invested in that attend. Then – I like to sit in front of my computer and actually play around with the stuff.
The most profound thing I read this week was from Fred Wilson. Read it slowly and carefully. Jason Calacanis’ What now? post is also important – read the seventh paragraph twice (the one that starts “Mark Cuban …”; BTW – congrats Jason on your sale to AOL.)
The overwhelming attempt at pattern matching from 2001 (Bubble this, bubble that) completely misses the point. There were a number of very successful companies founded between 1999 and 2001 that didn’t implode when the bubble popped, with entrepreneurs who kept their heads down, built real businesses, and then started to reap the gains in 2003 and 2004 when the markets became more receptive to younger tech companies, especially ones that had built business engines that generated real positive cash flow (e.g. long term economic value).
My favorite example of this that I was involved in was Service Magic – a company we funded in 1999. The company found themselves in a market segment that raised over $300m of VC money and had several early IPOs that raised even more money. The entrepreneurs – Mike Beaudoin and Rodney Rice – were extraordinarily focused on figuring out how to build value into their business, obsessed with solving the fundamental calculus of how to make money in their market segment, and then implementing and scaling up a business that did this. By 2003 they were the unambiguous leader in their market, most of their competitors has evaporated, and they were generating cash at a ferocious rate (I remember having regular “holy smokes – what amazing numbers” moments.) In 2004, they were acquired by IAC, who very respectfully valued what they had accomplished.
So much of what I’m seeing in Web 2.0 are – at best – what Fred calls “second derivatives.” VCs are once again throwing money at this stuff just to “get in the game” – I saw a quote somewhere from a VC that said something to the effect of “if the company can’t identify its four likely acquirers, I’m not interested in it.” This is craziness and – like all irrational things – will end badly for many VCs (and unfortunately for the entrepreneurs they back.)
This isn’t an attempt to throw cold water on the current enthusiasm around web-based applications. I think it’s extremely exciting, a ton of fun to be involved in, and hugely interesting to play with. However, there is a big difference between building companies that have value vs. simply creating incremental features. As you look at your business, think about where the fundamental value is. If the answer is “I’m just hoping to get bought by GAMEY” (one of Google / AOL / Microsoft / eBay / Yahoo), think harder.
If you aren’t an avid Scobleizer reader you might have missed the GooglePark cartoon series. Hysterical.
It just feels so real. Web 2.0 fans, beware the underpants gnomes.
A trip to New York isn’t complete without art. Amy and I managed to squeeze in The Met (mostly modern stuff), the Guggenheim (Russia – top two floors were great, Malevich and Kandinsky are total stars, the rest was portraits of peasants, workers, farmers, and royals), and galleries in Chelsea last weekend.
Chelsea disappointed in a major way this trip. We did 23rd to 25th street and had high hopes. I only really liked two artists – Chris Jordan and Danica Phelps. Both do crazy obsessive stuff (which massively appeals to me) while maintaining a supremely deft touch with their subject. Maddeningly, the two Jordan’s that I wanted to buy (Circuit Board 1, Circuit Board 2), were both sold.
The best line of the day – alone on a large canvas – was by Robert Price at the Perry Rubenstein Gallery: The way she looks in the morning! She ran after the garbage man and said, “Am I too late for the garbage?” He said, “No, jump in.” …
After about 20 galleries, I felt like I had enough data to make the pronouncement to Amy that “Apple is the dominant IT supplier to the New York Gallery market.” It was wild to see iMac after iMac after iMac at each gallery. Amy was not impressed by my powers of observation.
They are radically difference conferences addressing the same thing from two totally different perspectives. The schedules and the agendas tell the complete story. We Media – all media, all day long – in New York. Web 2.0 – all tech, for a couple of days – in San Francisco.
Ten years later, the bifurcation on the Internet between tech and media seems as big as ever. I wonder which party is going to be more fun (actually, I don’t, but it was a good closing line.)
It appears that Google has finally officially declared war on Microsoft. I find this completely perplexing, as I’d think a more effective strategy would be to simply sidestep the whole desktop OS / app thing and just continue to innovate like crazy. Why pick a fight when you don’t need to?
NewsGator announced today that it has acquired NetNewsWire, the most popular Mac-based RSS reader. Many of the folks involved, including Brent Simmons (NetNewsWire), Greg Reinacker (NewsGator CTO / founder), Nick Bradbury (FeedDemon creator – now part of NewsGator), Sandy Hamilton (NewsGator EVP Sales/Marketing), and JB Holston (NewsGator CEO). Rather than repeat what they’ve said, I’ll try to cover different ground.
When I originally invested in NewsGator in June 2004, the company consisted of Greg Reinacker and one other part time person. I wrote a post describing why I invested in NewsGator. In September 2004, I wrote a post about NewsGator’s new CEO and how Greg and I worked through the notion that I thought it was critically important to bring on a partner early in the business as CEO so Greg could focus on what he did best.
Greg then went to town. It’s hard to believe that it’s been only a year since JB joined the company and 15 months since I made my initial investment. In February 2005, Greg posted NewsGator’s product roadmap and put a firm stake in the ground about what he wanted to build. In May 2005, NewsGator acquired FeedDemon (and added the incredibly talented Nick Bradbury to the team), filling a clear hole in the product roadmap. The NetNewsWire acquisition is similar – NewsGator now has a Mac client to add to its family along with another hugely capable guy on the team – Brent Simmons.) Oh – and NewsGator shipped their Enterprise Server product on Friday.
So – why are we doing this? One word – “platform.” Rich Tong and John Zagula (both ex-Microsoft – now partners at Ignition Partners) have written an excellent book called The Marketing Playbook on a series of different strategies a software company can take. The platform play is one of them and the one we are executing at NewsGator (and at FeedBurner).
As a result of my blog and all the stats I collect, I have insight into the way people are using (or not using) RSS to consume content. While I have access to other data as well, my FeedBurner subscriber stats are incredibly useful as I don’t have any “inappropriately biasing” data (e.g. none of the newsreader default feeds list my blog – automatically including them in my user counts). In addition, I have the law of large numbers on my side (with n > 4000 subscribers and all of the top 10 readers having n > 75, I’ve got a decent shot at qualifying for statistical significance.)
The top 10, in order, are:
I won’t bore you with rate of change data, but I have that as well and – while Bloglines is still the largest – their rate of change has slowed materially over the past few months while the various NewsGator products have accelerated. Amazingly, there are another 45 different readers with at least 2 reported subscribers, and many more with only 1 (of which a number of them are clearly not reporting their subscriber counts to FeedBurner – something that will improve over time.)
As a huge consumer of RSS-based content (my current blogroll has around 350 feeds that I monitor daily), I bounce around between NewsGator’s various products. Historically I’ve used NewsGator Outlook. Recently, I’ve been exercising FeedDemon (and loving it) – especially combined with NewsGator Online. Occasionally, I’ll use NewsGator Mobile on my T-Mobile Sidekick. My Mac at home has NetNewsWire on it and once sync with NewsGator Online is completed, I’ll use it when I’m home. Now that NewsGator Enterprise is in production, I’ll de-install NewsGator Outlook on my machines and simply roll with NewsGator Enterprise to feed my inbox. NewsGator’s sync platform underlies all of this capability as I have a completely seamless transition between products.
Now that most of the key pieces to the platform, including the API, are in place, NewsGator Enterprise edition is out, and Nick is almost able to code like a maniac again, look for rapid innovation on all fronts, especially NewsGator Online.