Jeff Clavier's Software Only

Software Only is two years old

What a bizarre way of celebrating the two-year anniversary of this blog: my last post was eleven days ago, and I have not found the time since then to blog or comment on anything – I have been heads down on a couple of projects that I can’t talk about, met a few very interesting stealth companies and have held a number of private meetings. Not much material to blog unfortunately .

Anyway, looking back at the past two years, I have published close to 500 posts, had an average of 2 comments per posts, one trackback and interestingly – for each comment I get, I receive 2 or 3 private emails. It is not surprising since many of the things my readers discuss with me are the confidential kind. Ever since my FeedBurner feed sees all subscribers, the number of subscription has raised to more than 14,000, with Rojo being the most popular RSS reader for my feed – a very unusual case.

I decided a long time ago not to blog about my blogging, but I went through multiple phases, on both the read and the write side:

• Three to four years ago (when I was still a General Partner at a venture firm), I started following a few blogs as bookmarks I would visit every now and then, and then as RSS subscriptions (in Newzcrawler initially). It took me some time to comment.
• The first three months of the blog, following that initial post, were essentially an experiment: finding my style, themes, rhythm, length of posts, etc. What became clear after a while is that what seemed to “work” for my audience was a mix of financing tips and news, comments on the consumer Internet market – both trends, companies and M&As, and every now and then a bit of rants and thoughts. Also very popular are the reports of the numerous events and conferences I have been attending over the past couple of years.
• January 2005 is when I decided to seriously invest in blogging, both reading and writing. This coincided with the decision I made to focus the activities of my firm on investing and helping build early stage consumer Internet services. One of the key drivers of success of any investment firm is the depth, and of course quality, of its deal flow. This blog has been fantastic in that regard, enabling tens if not hundreds of interesting online and offline discussions – a handful leading to some of my 15 startup investments, or involvements, in the past couple of years.
• In 2005 and early 2006, I spent an average of two to three hours a day reading 200 to 300 feeds, commenting, and posting 5 to 7 times a week. I was hooked on Memeorandum (now TechMeme), and really tracked what happened through the blogs. During that phase, I would almost make a point to scan through all my feeds multiple times a day, going through all unread posts as much I could. And I would have difficulties to write short posts – less than 200 to 300 words.
• Then a couple of months ago, around April/May, I decided to be much more selective on my feed reading, switched aggregators to support that, and started spending less than one hour per day reading blogs – using TechMeme and Wikio (I am an investor) to track developing news and conversations, and switched from MyYahoo to Netvibes (I am an advisor) after 7 years to track the blogs that matter to me. At the eBay developer conference, Anil Dash – who had impromptuously joined  our panel – made the comment that he had almost quit reading feeds because “he did not want to spend all this time unbolding headlines”. And I realized I was getting to the same position, as a result of having way too much to read and way too little time.

What’s next for Software Only, and its French little sibling – Sans Accent ? A few more posts before hitting a well deserved break during which I will most likely go quiet. And when I return, more of the same content, with maybe less posts written at 4am . I also hope to overcome that tendency of mine of not posting short summaries or comments when I only have a few minutes – because I never ever have time to come back to these ideas and express them more fully. Sort of a “Blogge Diem” notion.

And of course, I am – as always – interested in your feedback on what works on this blog, what doesn’t, and what else you would like to hear about.

MySpace now top US Internet property in front of Yahoo (well, not exactly)

Reuters just relayed that, according to Internet tracking firm Hitwise, MySpace has surpassed Yahoo as the number one Internet property in the US. The piece does not indicate which metric is being used (unique visitors, number of visits, number of page views, etc) but it might be visits. Hopefully Hitwise will has released that analysis on their (very informative) blog: MySpace Moves Into #1 Position for all Internet Sites. The chart below shows the growth of MySpace’s market share against Google. It would have been nice to have Yahoo’s  plotted as well.

A few interesting data points:

• MySpace accounted for 4.45 percent of all U.S. Internet visits for the week ending July 8, pushing it past Yahoo Mail for the first time and outpacing the home pages for Yahoo, Google and Microsoft's MSN Hotmail.
• To put MySpace's growth in perspective, if we look back to July 2004 myspace.com represented only .1% of all Internet visits. This time last year myspace.com represented 1.9% of all Internet visits. With 4.45% of all U.S. Internet visits, myspace.com has achieved a 4300% increase in visits over two years and 132% increase in visits since the same time last year.
• MySpace captured nearly 80 percent of visits to online social networking sites, up from 76 percent in April. A distant second was FaceBook at 7.6 percent.
• Of the top 20 search terms driving traffic to Internet sites – over the past 4 weeks, 5 were related to MySpace (myspace, myspace.com, www.myspace.com, my space, myspace layouts) representing in aggregate 1.85% of all searches (and that’s just looking at these five keywords).

This makes NewsCorp's $580M buy of Intermix Media increasingly look like a bargain – especially as FIM improves the monetization of that massive audience and traffic.

Just so happens that Fred Wilson also featured the Comscore Mediametrix June numbers regarding top social networking sites. Per the aforementioned statistics, MySpace dwarfs other networks both in terms of actual audience and growth.

Update: I am late (very) late at publishing this, but Yahoo got very angry at the allegation made by Hitwise, and Tim Smith from Outcast PR reached out to bloggers with the following statement:

The report that Hitwise released today with the headline “MySpace Moves Into #1 Position for all Internet Sites” is misleading. The Yahoo! network is made up of many domains and it is not accurate to compare MySpace.com to just Yahoo!’s mail.yahoo.com domain. When taking into account all of Yahoo!’s domains together as an entire network, Yahoo! clearly remains the number one property in terms of audience share, duration share, page view share and days visited per month.

In the U.S. alone, Yahoo! attracts 129 million unique visitors per month, which represents 74 percent of the online population; in comparison, MySpace reaches only 30 percent of the online population with an audience of 52 million unique visitors. In addition, Yahoo! has the largest share of online time spent than any other property: Yahoo! accounts for 13 percent of users’ online time, while MySpace has only 3.2 percent share in users’ online time.

Yahoo! maintains its leadership position as the world’s most trafficked Internet destination online, with a community of more than 500 million unique monthly visitors from around the globe.

(These statistics are according to comScore Media Metrix, June 2006)

I thought I would ask my friend LeeAnn Prescott from Hitwise what they thought of the reaction, and Hitwise's public statement was:

Hitwise ranks over 500,000 websites on a daily basis, including individual sites as well as the domains and sub-domains of larger websites. The press release issued yesterday included the top-10 domains and at no time did we represent all MySpace properties compared to all Yahoo! properties. The table included in the press release listed the rank order of the individual domains and sub-domains as reported from our data.

Net net: Hitwise seems to have compared apples and oranges when publishing their report, and we (I) have not investigated quite enough before relaying the information.

Tags: myspace

Tags: myspace

The Seattle Museum of Flight is amazing

 
The SR-71 BlackBird
Originally uploaded by jeffclavier.

One of the treats of Gnomedex 6 was a visit and a cocktail party organized at the Seattle Museum of Flight. The huge exhinbit features a stunning display of airplanes from different periods - including one of the Concorde previously flown by British Airways and an old Air Force One. My favorite, and the subject of this picture: the Lockheed SR-71 "Blackbird". You can see more pictures in this set, or better in the set shot by the amazing Scott Beale.

If you are visiting Seattle (or Redmond :-), and have a few hours to spare, do visit it - it is really worth it.

Gnomedex 6: Should TagJag be funded ?

Left to right: Rick Segal, me, Brad Feld 
Photo credit: Scott Beale.

Chris Pirillo had launched a few months ago a meta-search engine he named gada.be, now TagJag (see the most recent TechCrunch review here) and was wondering how he could bring scale to that business. One of the obvious solutions being external funding, he had the idea to do a VC pitch in front of the Gnomedex audience and asked VC blogger Rick Segal to lead that session. Rick in turn kindly asked buddy Brad Feld and myself to participate, and provide our candid feedback on the plan. Knowing how “candid” Rick, Brad and I are known to be, Chris’ decision to get feedback on his first ever financing pitch in public was gutsy. And the dude was clearly very nervous.

Chris did a brief demo of TagJag and explained the vision behind the product: be able to query at once a multitude of search engines in a way that is simple from a cell phone or a desktop. It also meant to be easy to use for every day users (as opposed to geeks). Finally, there was a notion to allow bloggers or site owners displaying TagJag results to get a piece of the action if the traffic they generated as monetized.

I made a few (hopefully useful) comments during the following discussion, which unfortunately was only 30 minutes long, and wanted to add a few things that I did not cover. In no particular order:

• Chris did a good job in providing a vision statement for the product – with a great deal of passion. However, he made the vision a bit confusing by mixing issues of implementation, strategy, resources and repeating how nervous he was. I explained that I prefer entrepreneurs to first give an overview of the What (what is the product/service and the value to users), the Why (why do I this and why me/my team) and the How (providing a very high level idea of an execution plan). And then dive into other considerations.
• The question at hand was whether TagJag should be funded. I pointed out – and have written many times about – the fact that there are many different ways to fund a business (cashflows from operations, cashflows from another business, personal savings and credit cards for small amounts, bank credit lines when there are revenues, and yes angel and vc financing – either as debt or equity), and there should be no reason for entrepreneurs to feel that they have to raise professional money in order to be successful.
  Brad pointed out that Chris wanted to talk about funding, but did not highlight for us what he would use that funding for. Obviously staffing up, but he only had a shallow idea of his needs (he responded 6 to 10 people and $600K – which does not really compute given where Tagjag is today). When discussing funding, entrepreneurs need to be absolutely clear as to how much is sought, what the funding is going to be used for (VCs often call that “use of proceeds”) and what milestone is going to be reached by the company thanks to that funding.
• Another important point addressed by Brad is the issue of overall scale, and potential outcome, of the business. If you are building a lifestyle business for yourself and a small team, don’t bother bringing in professional investors. These businesses can generally be bootstrapped with very little capital – personal or friends and family, and get to be cashflow positive pretty quickly. On the other end of the spectrum, you might want to build a business that will require millions of dollars to develop and operate – like a search engine for example, and it will be necessary to get funding. But in that case, the exit (aka “liquidity event”) will have to be commensurate to the amount raised from investors, and the risk they are taking in supporting you.
• Unlike the audience, we did not have a big hang up on the business model. There are clear precedents to monetize search, and I am much more interested in knowing how users and traffic are going to be acquired, and what sort of demographics will be targeted.
• I did not mention this but it is important to remember that the goal of a first pitch is to come back for a second, generally longer, meeting. So no need to try and cram everything in that one first pitch.
• The value of an aggregator like TagJag or (A9’s OpenSearch) is the relevance of the results it provides. The current implementation does not attempt to provide any sort of ranking or aggregation of individual results. Having TagJag deliver contextual and behavioral filters will be critical. Jake Luddington actually told me later today that these algorithms had partially been implemented.

In conclusion, our recommendation to Chris was to gather feedback from all Gnomedexers, and figure out how far he can push the develop of the idea, and the service, without any professional funding. Rick, Brad and I have committed to help him out figure out some of these issues, and some day, we’ll see whether Tagjag should get funded.

VC bloggers have done a good job demistifying the whole financing process, terms, requirements, etc. and entrepreneurs should absolutely take advantage of these. And they should definitely try to get in touch with VCs or Angels to get some feedback on their ideas or their plans. It might not work with everyone you contact all the time (professional investors tend to be extremely busy people) and it might sometime take weeks to get some feedback (this is a public apology to all the people who have emailed me in the recent weeks and with whom I have not followed up yet), but through your contacts, or at a conference, you should be able to get a few minutes of an investor’s time.

Kevin O'Keefe also covered the session: TagJag : Gnomedex wrapping up with Pirillo pitching tag search engine.

Update: here are the landing page of the podcast, and the MP3 file.

Tags: chrispirillo, tagjag, gnomedex, bradfeld, ricksegal

What if Bill Gates had turned to the dark side ?

This is essentially the theme developed by VC Bart Schachter in his guest post on PE Week Wire. It is indeed not uncommon for CEOs leaving the top spot to do a stint in VC firms as EIRs, venture partners or GPs. Bart pictures it:

Imagine that, instead of taking refuge in the pages the Chronicle of Philanthropy, Bill would have set his sights on becoming (the horror) a venture capitalist. Consider that, in a moment of blissful bridge fantasy, instead of seeking to remedy the injustices of the third world, he might have opted instead to set up shop as a budding VC. Consider the high points of the billgventures.com home page: Operating experience, Value-added Investing, an Eye to Company-Building, Unequaled Access to Global Business Leaders, and in case you missed the first bullet, CEO Experience.

Would Bill Gates have made a successful VC ? We’ll never know, but it is clear that he has been doing an admirable job at the Gates Foundation, which has become the largest foundation ever with the recent pledge of tens of billions of dollars from Warren Buffet.

Kleiner Perkins investment criterias for software startups: Consumer ? Enterprise ? Both!

A few days ago, Don Dodge reported on a panel he did at TiECon East with KP's Ajit Nazre, during which Ajit mentioned the 7 rules that  enterprise software startups must meet in order to be considered for an investment:

• Instant Value to customers - solve a problem or create value with the first use
• Viral adoption - Pull, not push. No direct sales force required
• Minimum IT footprint, preferably none. Hosted SaaS is best.
• Simple, intuitive user experience - no training required.
• Personalized user experience - customizable
• Easy configuration based on application or usage templates
• Context aware - adjust to location, groups, preferences, devices, etc.

Friend Jeff Nolan reminded me that these rules were actually introduced by Ray Lane, a Kleiner Perkins Partner, during his keynote of MR Rangaswami's conference, Software 2006. I actually recommend listening to the podcast and reading through the presentation.

What is interesting is that these rules seemed to be focusing on enterprise software companies, and upon reading them they were really fitting consumer-facing services. Yet another data point showing that Consumer and Enterprise 2.0 are getting closer and closer in the way they are built and marketed. Ben Barren from down under had a similar thought.

During my keynote to the Web 2.0 Irish Conference, I talked about similar things - in the form of the key questions that I ask myself when meeting a prospective investment:

• Value ?
• Adoption ?
• Differentiation ?
• Distribution ?
• Business Model ?
• Technology ?
• Team ?
• Plan ?

What is interesting is that fundamental aspects like the the Team and the Plan are not covered by the 7 rules, so I would posit that there were other aspects being discussed.

Tag: enterprise2.0

Om Malik on the move as well - blogentrepreneurship is the next stage

Wassup with you people ? After Scoble, Penchina, Fletcher and Tara Hunt who left their gigs to start new adventures, it is the turn of da man – Om Malik – to leave his full time editor position at Business 2.0 in order to focus on GigaOM – his renowned blog – and turn it into a business. He will be supported by Phil Black from True Ventures, a new VC firm co-founded by Phil who was also involved in Blacksmith Capital, an investor in Automattic and Sphere.

Because many things in the Valley start when hanging out, let’s get back to the genesis of that hopefully very fruitful relationship.
T’was a nice dinner at Tony Conrad (CEO of Sphere, ex-VC backer of Oddpost, and good friend of mine) that saw Om and Phil meet for the first time – as shown by this picture taken by Flickr’s Caterina Fake featuring Tony, yours truly, Phil and Om (though Phil is paying more attention to his Crackberry than Om – but that is a common trait of many of us).

It is amusing that I was a (clueless) witness of that encounter as Om and I had discussed about what it would mean to turn GigaOM into a full time business. I am really happy for Om who is an awesome dude, and a good friend, and I look forward to seeing him working his tail off the evolutions of GigaOM.

Of note: for someone who scooped so many news, he got punk’ed by Valleywag. Hilarious.

Matt Marshall has a nice background piece following a discussion he had earlier tonight with Om. Can’t help wondering when Matt will start itching . Note that Matt was also at that dinner, as this other picture of Caterina shows (Matt is on Om's left).

Tags: ommalik, gigaom

Happy birthday TechCrunch!

Mike is reflecting on his first year writing TechCrunch, which is just a tremendous example of the power blogs give to individual voices. A year ago, that ex-lawyer dude started a site to review Web 2.0 companies, and wrote with passion hundreds of profiles and becoming the number one launchpad for the next generation of startups, and large Internet companies as well.

I looked back in my email archive to see when Mike and I started interacting and found our first email exchange, in which he said:

I'd like to put profiles of both up at techcrunch. We have about 500 uniques per day now after being up for only a week and a half.

Both was referring to two of my companies I recommended Mike to take a look at: Buzznet and Userplane. I then offered Mike a pass to attend VerticalLeap, the conference that Dave McClure and I organized, and then turned into the Search SIG (which is taking a bit of a break due to total overflow on my part). We then kept on bumping into each other at conferences like BarCamp, TagCamp and the likes, and I had the privilege of being one of the 15 hamburger eaters at that Sept 15th BBQ party that became TechCrunch One. And then I got involved in Edgeio, Mike and Keith Teare’s startup. The rest is history, as chronicled by our blogs.

Not only have you become a key player in our industry, you have also become a great friend. I have to thank you for both.

Happy birthday to TechCrunch, and looking forward to Year 2!

Scoble is movin' and the blogosphere is shakin'

I came back to my hotel room late last night from a fantastic dinner with great company (thanks again Will) and crashed before checking my feeds. What a tidal wave! The news about Robert moving to PodTech.net has completely taken over Memeorandum (and temporarily crashed PodTech's servers because of the traffic)!

What I find almost hilarious is that Robert’s move has leaked as a rumor that the tech bloggers have immediately jumped on (“Rumor”, ”might”, ”may”, ”will”, ”is going to”, ”50%”, ”100%”), before Robert and John had actually crafted their announcement:

I looked at my cell phone and I think there was a call from Om Malik that I ignored (sorry, Om, I didn't know you were calling about THAT). Then the email started coming in. Oh, crud. It was out.

It also means that the reasons and circumstances of Robert’s leaving were subjects to rumors and supputations, so much so that Robert had to counter most of them in Correcting the Record about Microsoft.

I don’t think that Microsoft is going to suffer the setbacks that some posts are predicting, first because the changes that Robert and the other 3000 bloggers of the company have helped kick in gear are already under way, and second because other bloggers (like Niall Kennedy, yes buddy, yours to fill the gap now) have an opportunity to make a similar impact.

I just spoke to Robert for a few minutes ago to congratulate him and Maryam for the move, and I need to do did the same with John who has scored yet another coup by luring the most well known corporate blogger to his startup. I look forward to hearing more about Robert’s new role at PodTech, but what is clear is that he will contribute to getting podcasting, and I would bet video-blogging, to its next milestone, using his footprint in the both the corporate and consumer worlds to evangelize it.

There will be more news coming in the next few days, especially since we only heard one side of the story (cryptic statement that will make sense later this week). And I can't wait for the leaving party (or parties) that will take place around Gnomedex since Robert's official starting date is July 1st.

Update: Dan Farber reports on his meeting both Robert and John at Vloggercon.

Get out of your typical conference circuit and have a chance to meet new/different people!

I’m blogging from my room at the Mandalay Bay hotel in Las Vegas, after just arriving from Philadelphia. Both the eBay Developers Conference and the Hyperlinked Society conference are not typical for me. Ttypical conferences for me would be Demo, PC Forum, SuperNova, BlogOn, Web 2.0 Conference, AlwaysOn, Under the Radar and the boatload of events we have in Silicon Valley, and of course Loic le Meur’s Les Blogs in Paris.

However, you have a feeling to always hang out with the same crowd – and even it is always a renewed pleasure to bump into my good friend David Hornik (the world champion for tech conference attendance), it is nice to get to meet new people. It is why I actually enjoyed a lot attending the Hyperlinked Society conference in Philadelphia. It allowed me to meet a number of academics, bloggers and executives who are out of my regular circle.

After the reception of the conference, a group of 14 (strangers – except for my friends Gabe “Memeorandum” Rivera and Tony “Healthline” Gentile - whose birthday is today) got together for dinner at a nice restaurant in Philly. I got to meet Hitwise’s analyst LeeAnn Prescott who is one of the bloggers of the company, which puts a lot of very useful  bits of information about Internet usage trends “for free”. Also at the dinner was Microsoft Research Sociologist Marc Smith, who spoke during one of the panels. We had a great conversation about our phone (he also has a Cingular 8125) and why it could have been the best phone ever (for us), and what he was up to. We have also decided to hang out on the Microsoft Campus that I will visit the day before Gnomedex. And there were many other useful and interesting discussions that I won’t mention because I want to hit the pool of the Mandalay Bay :-).

The same reason led me to book my spot for Ted 2007, at the strong recommendation of David Hornik, Reid Hoffman and Loic le Meur. I also hope to be invited to Yossi Vardi’s Kinnernet 2007, so that I can hang out with Israeli entrepreneurs over there – something I have not done since 2003.

If there are other non-tech conferences that you find worth your intellectual while, feel free to recommend them in the comments.