Building Web 2.0 Companies

Fred Wilson writes:

It may take only two or three great developers to build and launch a web service. But it still takes a bunch more to maintain it, develop it from there, deal with scalability, deal with feature enhancements, take the service in new directions, respond to competitive threats, etc, etc.

Two years into the creation of a web services company, you’ll certainly have more than ten engineers on your team and you could be looking at closer to twenty. That costs money.

Another unavoidable fact is that customers are expensive. They require service. And you can’t provide customer service forever with a blog that most of your customers don’t even know exists. You have to provide email support for sure. And more and more web services company (certainly the ones who want to service mainstream customers) are moving to some form of phone support.

Google vs Salesforce

HipMojo writes:

Think about it: Google can essentially take:

– Gmail
– Docs and Spreadsheets
– Google Payment (whats the name again?)
– Google Talk (replace all of the other instant messaging services you use as a sales person)
– Google Maps (for directions to clients offices, or meeting spots)
– Google Calendar (obvious, to track dates, calls, meetings, etc.)
– Picasa (so you can see what people look like or people can put a face to their favorite salespersons voice and name)
– Video player (for demos, presentations etc.)
– Analytics (prospecting tool par excellence, I mean most sales people rely on Alexa, not Nielsen Net Ratings or comScore)
– Blogger (so your clients can read about you, your products and services)
– Jotspot (so employees can share intelligence, or clients and salespeople can share information)
– Alerts (a prospective client announces something, you can hit them up ASAP)
– Finance (so you can check out the size of the company you are hitting up)

Oh Thats just half of it: Google should then integrate Ad Sense to create an embedded lead generator. That would be insane. That, my friend, would be the Salesforce.com killer.

TECH TALK: The Best of 2006: 3. Data Centres

George Gilder wrote a brilliant essay in Wired about the importance of the data centre. These information factories are the real power behind today’s Internet.

Today Google rules a total database of hundreds of petabytes, swelled every 24 hours by terabytes of Gmails, MySpace pages, and dancing-doggy videos a relentless march of daily deltas, each larger than the whole Web of a decade ago. To make sense of it all, Page and Brin with Microsoft, Yahoo, and Barry “QVC” Diller’s Ask.com hot on their heels are frantically taking the computer-on-a-chip and multiplying it, in massively parallel arrays, into a computer-on-a-planet.

The data centers these companies are building began as exercises in making the planet’s ever-growing data pile searchable. Now, turbocharged with billions in Madison Avenue mad money for targeted advertisements, they’re morphing into general-purpose computing platforms, vastly more powerful than any built before.

All those PCs are still there, but they have less and less to do, as Google and the others take on more and more of the duties once delegated to the CPU. Optical networks, which move data over vast distances without degradation, allow computing to migrate to wherever power is cheapest. Thus, the new computing architecture scales across Earth’s surface. Ironically, this emerging architecture is interlinked by the very technology that was supposed to be Big Computing’s downfall: the Internet.

In the PC era, the winners were companies that dominated the microcosm of the silicon chip. The new age of petacomputing will be ruled by the masters of the remote data center those who optimally manage processing power, electricity, bandwidth, storage, and location. They will leverage the Net to provide not only search, but also the panoply of applications formerly housed on the desktop. For the moment, at least, the dawning era favors scale in hardware rather than software applications, and centralized operations management rather than operating systems at the network’s edge.

Wasting what is abundant to conserve what is scarce, the G-men have become the supreme entrepreneurs of the new millennium. However, past performance does not guarantee future returns. As large as the current Google database is, even bigger shocks are coming. An avalanche of digital video measured in exabytes (10 to the 18th power, or 1,000 petabytes) is hurtling down from the mountainsides of panicked Big Media and bubbling up from the YouTubian depths. The massively parallel, prodigally wasteful petascale computer has its work cut out for it.

Tomorrow Persistent Search

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Search Startups

Red Herring writes:

If pundits are right, search will soon do a much better job finding multimedia and going mobile. It will also offer more accurate probes of local information, health information, gaming, music, and other areas of interest to consumers, as well as get better at finding the best deals in travel and real estate. No one is seriously challenging Googles dominance. But Google, or even Yahoo and MSN, cant do it allso nimble startups across the world are seizing opportunities in emerging areas of search.

Geo-Presence

Kevin Maney writes: “You might already know what presence is. If you use something like AIM or Skype, it’s the ability to see that someone you know is also online. The next thing will let you also see where they are. Helio just came out with cellphones that can show where your buddies are on a map. The Wi-Fi network at the Massachusetts Institute of Technology has been set up so users can pinpoint their friends.”

2007 Broadband Trends

Broadband Directions writes:

1. Apple’s iTV box will likely succeed
2. All eyes on Google
3. Ad-supported video dominates (at least for now)
4. Syndication grows in importance
5. Community-building around video goes mainstream
6. Brand marketers score with broadband video
7. Legitimate P2P gains traction

Podtech’s Strategy

NewTeeVee talks to Podtech CEO John Furrier:

The key to reaping rewards from programs on niche topics like automotive news10 is appealing to microcommunities, Furrier said. Advertisers want to put their content in front of audiences that they know are contextually and behaviorally what they want. By involving and engaging a particular community, he said, lines of communication between the advertisers and the influencers can be opened up. It will be interesting to see if the same principles will apply to the entertainment and comedy channels Podtech is planning on adding soon.

Were not really publicly talking about it. Were just out there doing it, he said. Were creating a media network, in a new way, in a different way. By treating media creators more like software developers, letting advertisers directly access potential customers in a compelling way and giving their users what they want, Podtech could do just that.

What VCs Look for In A CEO

VC Confidential writes about some of the attributes:

Resourceful: he/she should be weary of raising capital and be thoughtful about taking on any dilution. Large capital raises limits exit potentials, defocuses management and ends up usually being wasted.

Relentless: Technology is all about being the market leader (as they say, who was the second person to fly across the Atlantic?). I like CEO’s who are competitive and paranoid about the competition.

Creative Thought: we appreciate entrepreneurs who look at problems differently. Successful companies do so not by doing things the same way as their competitors.

TECH TALK: The Best of 2006: 2. Social Networking

The rise of MySpace, Facebook, YouTube, Cyworld and Mixi has focused a lot of attention on social networking. Combined with user-generated content, social networking is making connecting and staying updated on family and friends that much easier. In India, too, social networking sites are starting up hoping to replicate the magic of a MySpace. In this context, it is useful to keep in mind these thoughts by Danah Boyd:

A “social network site” is a category of websites with profiles, semi-persistent public commentary on the profile, and a traversable publicly articulated social network displayed in relation to the profile.

To clarify:

1.Profile. A profile includes an identifiable handle (either the person’s name or nick), information about that person (e.g. age, sex, location, interests, etc.). Most profiles also include a photograph and information about last login. Profiles have unique URLs that can be visited directly.

2.Traversable, publicly articulated social network. Participants have the ability to list other profiles as “friends” or “contacts” or some equivalent. This generates a social network graph which may be directed (“attention network” type of social network where friendship does not have to be confirmed) or undirected (where the other person must accept friendship). This articulated social network is displayed on an individual’s profile for all other users to view. Each node contains a link to the profile of the other person so that individuals can traverse the network through friends of friends of friends….

3.Semi-persistent public comments. Participants can leave comments (or testimonials, guestbook messages, etc.) on others’ profiles for everyone to see. These comments are semi-persistent in that they are not ephemeral but they may disappear over some period of time or upon removal. These comments are typically reverse-chronological in display. Because of these comments, profiles are a combination of an individuals’ self-expression and what others say about that individual.

For good measure, Danah has also put together a timeline of social networking sites.

Tomorrow: Data Centres

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Mobile Advertising

iMedia Connection has an article by Sarah Keefe:

Mobile ads physically can’t emulate their bigger web cousins due to restricted screen real estate.
There’ll be banner ads but much smaller than on the web. There’ll also be text ads but they’ll likely be squeezed into the body of a page that’s highly relevant. Expect creative directors to explore new ways to get the message across– just as they did when web advertising was in its infancy. In the mobile arena, you might see voice ads stream while you’re browsing a WAP site or ads being delivered while interstitial pages are waiting to be downloaded.

Mobile marketing campaigns can be fine tuned.
Imagine having valuable information, such as the consumer’s country and network. That knowledge can help fine tune marketing campaigns enabling them to effectively target a particular region and track local success. Advertisements also could be targeted to a user’s handset make and capability. So, if you sell games for a particular device type, only people with compatible handsets will see your ads.

Inside Wii

The New York Times takes a closer look at Nintendo’s new gaming console:

One controller is shaped like a sleek television remote (sometimes called the Wii-mote); the other plugs into the remote with a short wire, creating a vague resemblance to the two-handled martial-arts weapon it is named for, the nunchuk.

And beneath the controllers white plastic shells are an array of time-tested digital technologies working together in new ways.

The controllers communicate with the Wii console, a $250 box no larger than a childs lunchbox, with the wireless technology known as Bluetooth. It is the means commonly used to link cellphones with their wireless headsets. The Wii remote also uses infrared, the same technology that links television sets with their remote controllers, to track where the controller is pointed.

Web and Software Predictions

Don Dodge writes:

1. Online Video / TV – YouTube burst onto the scene in a big way last year paving the way for consumer generated video. BrightCove is my pick for the commercial side of Internet TV/Video.
2. Browser based applications – JotSpot, SocialText, WikiCalc, Zoho, ThinkFree, and others released first versions of Office like productivity applications. Expect to see these apps get better and the competition to heat up.
3. Mobile web – The press calls cell phones the third screen (TV, Computer, Phone). They have it backwards, the cell phone is the first screen for the younger generation. Mobile applications are hot, going far beyond ring tones. Location Based Services will be hot in 2007. Mobile search is a multi billion dollar opportunity. Companies to watch; uLocate, ScanBuy, EnPocket, Innovectra.
4. RSS, Blogs, Wikis – These are already hot for the tech crowd but they will go mainstream in 2007. Blogs and Wikis will move beyond simple applications to becoming a platform for applications. Companies to watch; Blogtronix, Telligent.
5. Vertical Search – I have written extensively about the three monster markets for search; Mobile Search, Local Search, and Classified Ad Search. Other areas that will be hotter in 2007; People Search, Product Search, Video Search.

Internet Strategy

John Hagel writes:

I have a growing sense that all the major Internet players Google, MSN, Amazon, Ebay and AOL have lost their sense of direction and differentiation. Rather than carving out and rapidly enhancing areas of distinctive advantage, these major players appear to be leaping like lemmings into the red ocean.

This growing homogenization of the leadership ranks might be understandable if the Internet were a maturing business arena. Given the rapid and sustained pace of innovation in the underlying technology, the rapid growth of usage, the continuing shift of spending to the Internet and the proliferation of new businesses created on the Internet, I find it hard to characterize this space as maturing my sense is that it is still in its infancy.

Improving Digg

Stuntdubl SEO offers some suggestions:

1. Develop a payment revenue share model for users
2. Weight users votes with topical expertise
3. DONT Alienate your users – solicit feedback – and COMMUNICATE with top users – a forum (public or private) would probably be effective. RETAIN the goodwill you have – dont abuse it
4. Attract more celebrities and mainstream mindshare
5. Build an index (even if its beta on a subdomain)

TECH TALK: The Best of 2006: 1. User-Generated Content

As 2006 makes way for 2007, it is time to look back at the year that was in technology through some of the best writings. I have picked a few which I think reflect the major themes of the year and which came back to me as I started recalling the year. Let us start with the one word and three letters which capture the essence of the year: You and UGC (user-generated content).

It started with home pages on sites like Geocities nearly a decade ago. People created all sorts of pages about themselves. The problem was hardly anyone came visiting. This time it is different. Blogs, wikis, podcasts and video blogs are powering a resurgence in user-generated content. Mainstream media has been taking notice. TIME magazine named us (you) as the Person of the Year. It wrote:

Look at 2006 through a different lens and you’ll see another story, one that isn’t about conflict or great men. It’s a story about community and collaboration on a scale never seen before. It’s about the cosmic compendium of knowledge Wikipedia and the million-channel people’s network YouTube and the online metropolis MySpace. It’s about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes.
The tool that makes this possible is the World Wide Web. Not the Web that Tim Berners-Lee hacked together (15 years ago, according to Wikipedia) as a way for scientists to share research. It’s not even the overhyped dotcom Web of the late 1990s. The new Web is a very different thing. It’s a tool for bringing together the small contributions of millions of people and making them matter. Silicon Valley consultants call it Web 2.0, as if it were a new version of some old software. But it’s really a revolution.

Web 2.0 is a massive social experiment, and like any experiment worth trying, it could fail. There’s no road map for how an organism that’s not a bacterium lives and works together on this planet in numbers in excess of 6 billion. But 2006 gave us some ideas. This is an opportunity to build a new kind of international understanding, not politician to politician, great man to great man, but citizen to citizen, person to person. It’s a chance for people to look at a computer screen and really, genuinely wonder who’s out there looking back at them.

Tomorrow: Social Networking

Economist Survey: The Brain

The Economist writes:

Modern neuroscience has taken many directions, and this survey will not attempt to look at all of them. Instead, it will concentrate on four areas that may shed light on individual identity: the study of the emotions; the nature of memory; the ways that brains interact with each other; and the vexed question of what, exactly, consciouness is.

Such science is very much work in progress. Indeed, it is science of a type that would have been familiar to Broca and his contemporaries, for in many cases the researchers have only the haziest idea of where they are going. In the 19th century, when scientists were feeling their way towards big concepts such as the laws of thermodynamics, electromagnetics and the periodic table without really knowing what they were looking for, that was normal. These days there seem to be fewer new big concepts around, and experiments are often conducted in the expectation of particular results. But neuroscience is one area where big concepts certainly remain to be discovered. And when they are, they are likely to upend humanity’s understanding of itself.

Presenting to Win

Will Price writes about a new book:

Jerry Weissman’s great book, Presenting to Win, is a practical how-to guide on the “art of telling your story.” The book is the culmination of several decades of coaching technology companies and legends on how best to connect with audiences and effectively communicate ideas. His past clients include Sequoia, CSCO, Yahoo, MSFT, and many others.

I suggest ordering the book and include a short synopsis below:

Five Presentation Sins

1. no clear point
2. no audience benefit
3. no clear flow
4. too detailed
5. too long – what he humorously refers to as (MEGO, or mine eyes glaze over)

Lessons for Startups

David Beisel writes about seven lessons. Among them:

“Input not consensus.” Scott K. While many have different views on management styles, I favor decision-making processes being inclusive to all parties who deserve to share their opinion, but having the ultimate decision made by a single person who is ultimately responsible for it. The problem with true consensus thinking isnt that good decisions dont come out of it, but rather that its unclear when final decisions are made. Startup situations arent the right place for muddled thinking or unclear directives. Once a decision has been made, owners of responsibility must immediately run off and execute. Although many extremely successful organizations were built on consensus-driven cultures, my opinion is that there isnt time for it in a startup – but there is absolutely time for everyones input.

Telecom’s Future

IHT writes:

When Olivier Baujard looks into his digital crystal ball, he sees us all being customers of “comminfotainment” providers.

Within five years or so, the familiar land-line “telco” and even the mobile operator will disappear, in his view. Instead, broadband service providers will replace them, selling packages, bundles or channels of communications, information and entertainment.