The Gong Show

Rich Skrenta (CEO of Topix.net) posted an interesting analysis on the self-declared failure of We Media. He describes We Media conferences as a “round of self-flagellation by a group of attendees.”

I particularly like the section in which Rich critiques the few successes in We Media:

There is still a power law to success, and the few continue to reap disproportionate rewards, as they always have. Pub media turns out to be a farm league for big media. The bloggers who “make it” look more and more like regular media than “us”. They graduate to to the A-list, and start to get lumped in and criticised along with the establishment. Success looks like a sellout to a big media company, or a good business doing job boards and conferences on the side to pay the bills.

I find this section particularly insightful because it sets up a futilism in We Media success. As soon as any effort that once identified with We Media starts to “succeed” (ie pull away from the pack), then they are no longer a part of the “We” in We Media. Success is often measured by fame and prosperity. But, both fame and prosperity are limited commodities that are measured relative to the rest of the population. By definition, everyone cannot be famous or prosperous.

Rick identifies this problem (the limited commodities used to define success) when he says “There is still a power law to success…” But, in this statement I think Rick implies that this power law can possible be removed or diminished in the future, and I’m skeptical of that possibility. I wonder if We Media will eventually find a new way to define success that incorporates the A-listers which have pulled away from the pack, or if they will find some new way to measure success that could allow everyone involved to succeed without rivaling or comparing themselves to each other.

There has been a lot of conflicting views on the notion of aggregation and consolidation of social networking features. The geeks want it, and the less-tech-saavy seem indifferent.

Here’s a few examples to explain the “nerdvana” of social networking: why do I need 43 different profile on different sites that all say the same thing about me? Why can I write my profile in one place from which all other social networks can read? How come everytime I want to check my social network site messages, I need to login to each site individually? There needs to be common login credentials that all sites share. And, why do I have to rebuild by friend network on a new social network? If I’m friends with Sue and Bob on Friendster, and Sue and Bob are also on Myspace, it should be easier (one-click) to re-establish these friendships with Sue and Bob on Myspace.

Jon Udell thinks its time to solve these problems as they hurt the potential for a site to reach critical mass. Tim O’Reilly echoes similar sentiments.

danah boyd thinks that this notion of portability and consolidation is strictly an the desire of adults, and she has field research with teens to support her claims:

While adult bloggers talk about building an identity through extended blogging, i keep finding teens who got locked out of Xanga and responded by making another Xanga (or a Blogger or a LiveJournal). They have expressions scattered across numerous services with numerous handles. Some teens chew through IM handles like candy; their nicks are things like “o-so-funny” rather than the first name, last name standard that seems to pervade professional worlds. It’s not seen as something to build an extensive identity around, but something to use to talk to friends in the moment.

Teens are not dreaming of portability (like so many adults i meet). They are happy to make new accounts on new sites; they enjoy building out profiles. (Part of this could be that they have a lot more time on their hands.) The idea of taking MySpace material to Facebook when they transition is completely foreign. They’re going to a new site, they want to start over.

Dave McClure falls closer to danah’s camp; he says that most people (not geeks) are more concerned about forgetting their passwords than about sign-in consolidation.

Of course, I love the idea of interoperability and portability, but I think danah makes the strongest arguement out all the voices I’ve heard on this subject. She knows what the mainstream audiences actually want because she watches their behavior and asks questions to tease out their motivations.

Can you imagine your average high school Freshman using OpenID in its current state? It’s a usability nightmare. Your user name is a URL… that concept alone cripple the experience, not to mention the permissioning system involved in joining new services.

That being said, no user could have possibly asked for VisiCalc before it was invented… and if the designers of VisiCalc made choices to reinforce existing usage of paper spreadsheets instead of optimizing and improving behavior, VisiCalc would never have been invented. Just because OpenID is difficult to use, doesn’t mean that the “VisiCalc of consolidation” isn’t out there just waiting to solve all our frustrations with social networking fatigue.

I don’t know if social network aggregation and consolidation is a real trend for the future of web services outside of the TechCrunch crowd or not. My opinion relative to all these authors is somewhere in the muddy gray middle. But, I’m fascinated by the current discussion.

Union Square Street Sessions

Originally uploaded by gothamistllc.

Brad just pointed out coverage of this event to me. Here’s NYT coverage.

This is awesome; did anyone out there go to this? I can’t believe I missed it.

I attended the Calexico show @ the Allen Room, Lincoln Center… though the show was technically at Columbus Circle, not Lincoln Center. So confusing. Anyway, it was a fabulous show, and I highly recommend people check out any band at the Allen Room, just to soak up the beauty of this venue. Calexico played in front of a majestic 80-foot glass wall. From where I was sitting (dead center, last row) you could see all the way down 59th St to the East River, and we were at 8th ave!!

As you can see from the pictures (one up top, two down below), it was quite a site.

Calexico did a terrific job. They opened the set with just two guys (vocal/guitar and drums), and then slowly invited out the rest of the band along with endless guests, such that by the end of the show it looked like an orchestra on stage. The big latino-inspired orchestral songs were epic.

My only complaint was that they invited Beirut (songs on Myspace page) to perform with them… but they really should have given Beirut an opening set. I would have been elated to see Beirut live alone without Calexico, and it was a wasted opportunity to just have them perform a bit part in the Calexico set. Oh well. Still a fantastic show nonetheless.

Here’s some images and a Hype Machine link for Calexico:

Adam Bain (EVP, Production and Technology, Fox Interactive) kindly contacted me this morning via email as a follow up to my blog post yesterday about Brave New Web. In my previous post I briefly touched on a triangle graph that can be used to justify acquisitions, which Adam described. Adam followed up with me with a more detailed description of this triangle graph analysis and the possible implications. Adam’s email was really interesting, and I asked permission to blog it. He approved, so here it is:

We were running out of time at the end, so couldn’t really spend a bunch of time on it, but glad you picked up on on the Framework Triangle for Acquisitions. Basically the points of the triangle are:

• Technology Advantage
• New Audience or New Revenue Streams
• Long Term Strategic Influence (Does it help you for the long term by enabling some larger end goal down the line? Sometimes this may also mean: an acquisition to stop the technology or product from falling into a competitor’s hands)

Once set up in the triangle, you get a framework that companies can be judged. When acq targets hit all three points on the triangle, it’s an easy decision. Usually the tough decisions come when you only have two out of the three points. So here’s what happens when you see just two points:

Tech + Long Term Strategic Value (and therefore lacking Audience) = The company is an Enabler. These are potentially undervalued by the marketplace. Personally I like these types because these are the growth companies/hidden gems.

Audience + Long Term Strategic Value (and therefore lacking Tech) = At best case, a Network Effect. Worst case: it’s an overvalued company whose core product is easy to replicate since it doesn’t have a unique or defensible technology advantage. Feast or famine here.

Tech + Audience (lacking Strat) = At best Case: A Category Expander. Worst case: Non-core. Or…a sign that the acquiring company may be in trouble– because the acquiring company is looking at a business which has unique technology AND audience or revenue (thus traction) BUT it doesn’t currently fit into their world view of long-term strategy.

I hope you enjoy his analysis as much as I did. From my perspective in venture capital, it’s great to get an insight into the thought process of the buy side regarding a potential acquisition.

I attended the Brave New Web conference in Boston today. It was Web 2.0 conference, which, considering the range of services that are considered to be Web 2.0 today, is a very broad topic. Here are a few quick highlights:

Making the Case for Investment
Adam Bain of Fox Interactive said that when he makes the case for an acquisition, he maps the decision based on three variables:

• Technology (is this innovative?)
• Revenue/Traffic (is this popular and is it monetizing its popularity?)
• Strategy (I’m not sure what he meant by this, but it could be two things: is there a sound big picture strategy and is this a smart strategic move for Fox?)

Adam stopped there, but I thought it was interesting that one can map these three variables on a triangular plot and then measure the effective area. The larger the area, the better the investment. Of course, this assumes that each variable is equally-weighted, which is likely not the case in an investment decision. Still, pretty cool.

A Tale of Two Bay Areas
There was a lot of debate about the advantages/disadvantages of doing a startup in Boston vs Silicon Valley. I didn’t hear many new points made, but someone near me in the audience noted: “I bet they don’t have this conversation in Silicon Valley.” Too true.

Traction Trials and Tribulations
The best session was a panel on scalability. During this panel Antonio Rodriguez of Tabblo made a few great comments (which I’m only paraphrasing):

• “Ten years ago, 300,000 users using your software was a major life acheivement. Today, 300,000 users means you can finally start considering moving your company out of your parents basement.”
• “Once you hit a certain point in the growth curve, you have to choose between building out advanced features to keep your early adopters happy and building out basic trailing-edge hand-holding features for the mainstream users that don’t know the difference between uploading and downloading.”

The second comment here really resonates with me because balancing the design needs of power users compared to novices was the biggest dilema I faced while working in Product Design at Homestead, and I never figured out the answer. It’s a very difficult balancing act of resources and screen real estate.

Overall, the conference was entertaining, but no more informative than a day of posts on the blogosphere. The information exchange going on everyday on the blogosphere is the cutting-edge of thought leadership today. That being said, I dig conferences for the value of getting out from behind a computer and meeting people. There’s no substitute for face-to-face conversation.

The posts over at CenterNetworks are solid if you want more info on the event.

I don’t want to sound like a just another sound-reflecting plate in the echo chamber… so, I’ll keep this post short. But, this one section of Steve Jobs’s recent announcement to drop Apple’s “FairPlay” DRM is too juicy to ignore.

Jobs breaks down why Apple does not currently have its customers locked in by DRM, and it is interesting commentary on the digital music e-commerce market:

Some have argued that once a consumer purchases a body of music from one of the proprietary music stores, they are forever locked into only using music players from that one company. Or, if they buy a specific player, they are locked into buying music only from that company’s music store. Is this true? Let’s look at the data for iPods and the iTunes store – they are the industry’s most popular products and we have accurate data for them. Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

There are a few statistical fallacies in this arguement, but even if you assume them all to fall in favor of Apple adoption, Apple still has incredibly little traction in grand scheme of digital music, and yet, Apple is the leader in digital music e-commerce (4x bigger than the closest competitor, eMusic)! This shows that the digital music e-commerce space on whole is pretty poor. Very interesting.

I went to a McSweeney’s live show at Stanford a few years ago. It was a bunch of great authors: Zadie Smith, Dave Eggers, and others mashed up in an event with They Might be Giants. It was a culture-filled afternoon of pensive though and hedonistic rock. I highly recommended it at the time.

Now, McSweeney’s is doing a live show in NYC. Authors are:

• John Hodgman of The Daily Show and author of The Areas of My Expertise
• David Rakoff – author of Fraud and frequent contributor to This American Life
• Joshua Davis – author of The Underdog
• Rodney Rothman – former Letterman head writer

The live music is an all-star collective called Internet (I wanted to link to something about this band, but it’s impossible to search for “Internet” on Google… brutal disambiguation problem). Band members are:

• Dan Boeckner & Hadji Bakara of Wolf Parade
• Nick Diamonds of Islands
• Syd Butler of Les Savy Fav

This show looks terrific; It’s on March 15 at Peter Jay Sharpe Theatre, and I’ll definitely be there.

Source and details for this post from BrooklynVegan

As a Wallstrip fan, I feel compelled to post this great video. The web video daily star, Lindsay Campbell, fails to recognize the CNBC tv anchor, Dylan Ratigan, yet Dylan clearly recognizes Lindsay. Too funny. I hope we see this trend continuing as quality web video dailies, like Wallstrip, continue to crop up.