Archive for June, 2007



Teaser for Next Episode: iContact

Friday 29 June 2007 @ 6:48 am

I usually don't like to give hints about who's coming up on Venture Voice, but I can't resist breaking news: Ryan Allis -- who left college early to start his business iContact -- just raised a $5.35 million for his already profitable company. Stay tuned to hear the story.




VideoEgg: Three Quart of a Billion Served

Friday 29 June 2007 @ 12:57 am

While I'm talking about user statistics, I might as well talk about VideoEgg. When I first started meeting with the team from VideoEgg, they had all but no traffic. They had a fantastic video upload tool. Their solution was really elegant. But they were serving thousands of videos at best. The discussion within my partnership was about the degree to which they could compete in a market that was dominated by YouTube and a group of fast followers. Nonetheless, I was really impressed with the team and was excited to see how we might be able to put the VideoEgg software and service to good use.

Having determined that creating another video destination site was tantamount to suicide, the VidoeEgg team decided to partner with various services across the web to provide them with the necessary infrastructure to ingest, manage and serve video onto their respective sites. Because the VideoEgg technology and business proposition were so compelling, they quickly signed up a large number of partners, including: Bebo, hi5, Piczo, Consumating, Current TV, Flixster, AOL, Glam.com, Military.com, BlackPlanet, MyYearbook, ringo, Tagged, AsianAve, theU.com, Dogster, MiGente and many more. The results have been staggering.

In the month of June, VideoEgg will serve in the vicinity of 25 million videos per day or nearly three quarters of a billion videos per month. Those videos will be watched by approximately 23 million unique visitors, a number which is growing by 15% month over month. If that trend continues, VideoEgg will serve about 53 million unique visitors by years end. What's more, VideoEgg is able to leverage the distribution across its network to promote original content. For example, in partnership with Motorola, VideoEgg will stream more than 14 million views of The Burg throughout the VideoEgg network. As the network continues to grow, the opportunity to act as a meaningful channel for original content will grow as well. Which is precisely why I view VideoEgg as a next generation television network.

I was just asked today on a panel if I thought that the market for online video was approaching saturation and my answer was an emphatic "no." I am not predicting the demise of television in the near term by any means. But I am predicting exponential growth in online video as the next generation of media consumers spends an increasingly large percentage of their time online. And I anticipate that VideoEgg will play an important role in that media evolution.




Changing Titles

Wednesday 27 June 2007 @ 11:37 am

In an incredible breach of blogging etiquette, I have decided to change the titles of my posts from Shameless Self-Promotion Week. When I started writing this set of posts, I thought it would be nice to have a unified look to the titles. Thus, I adopted the "Shameless Self-Promotion Week: [Company X]" title format. But I have decided that I really hate it. It doesn't say anything about the posts. It is hard to understand out of context. It was just a bad decision. So my apologies but I'm changing titles.




Six Apart’s Traffic is Huge!

Tuesday 26 June 2007 @ 6:27 am

A lot has been said about Six Apart in the past, including by me. I have never been shy about making clear my love of MovableType (VentureBlog), TypePad (SaysMe) and Vox (Hornik, Hornik and More Hornik). I use each of Six Apart's platforms, which makes me an investor, a customer and an evangelist.

But what hasn't been said about Six Apart to date? Perhaps what hasn't been said is that when it comes to web traffic Six Apart is HUGE. According to Comscore, Six Apart's hosted properties (TypePad, Blogs, LiveJournal, Vox, etc.) put Six Apart in the 50 most trafficked sites on the Web. Six Apart has approximately 39 Million unique visitors a month and growing. Six Apart served just over 600 Million world-wide page views in April, of which over a quarter of a billion page views came from the United States alone. And those page views do not even include the massive traffic of the innumerable branded sites that live on Six Apart's hosted platforms, including TheSuperficial, SocialiteLife, Gothamist, BoingBoing, HuffingtonPost, AskDaveTaylor, TreeHugger, ZDNet Blogs, Celebrity-Babies, CuteOverload, Kottke, CoolHunting, and thousands more.

Where are all those page views coming from? There are nearly 20 Million Six Apart bloggers across the various platforms. In the US, they are posting on LiveJournal, TypePad, Vox.... Internationally, they are posting on Friendster, Nifty, NTT.... On nearly any topic on the planet that one might search, there will be results hosted by Six Apart. The number of bloggers is constantly growing, the number of pages is constantly growing, the number of page views is constantly growing. The power of blogging!

On top of that, there are hundreds of thousands of users of MovableType, which represent innumerable millions of page views which Six Apart does not host and does not track. MovableType is the predominant platform for enterprise blogging. Many corporations use MovableType for external blogs, many more are using MovableType internally. While in no way comprehensive, check out this list of companies using MT for their own blogs: ABC, CMP Media Conde Nast, Gannett, Hearst, NBC Universal, NPR, Playboy, USA Today, Time, Walt Disney, Washington Post, Warner Brothers, FedEx, Interpublic, Ogilvy, Organic, UPS, Adobe, Cisco, Intel, Microsoft, Nokia, Oracle, SAP, Symantec, Verizon, GE Heathcare, GE Medical Systems, Genetech, Johnson & Johnson, Pfizer, American Express, Deutsche Bank, the Federal Reserve Bank, Intuit, Standard & Poors, Wells Fargo, American Eagle Outfitters, American Girl, General Mills, L'Oreal, Mattel, Miller Brewing, Mike, P&G, Patagoinia, Wal-Mart, Whole Foods, General Motors, Boeing, Lockheed, Brown, Columbia, MIT, NYU, Princeton, Yale.... And, of course, VentureBlog!

When I invested in Six Apart, I was excited about the incredibly broad applicability of Six Apart's technology. If anything, I've been surprised by just how broadly Six Apart's platforms have been applied. From Standard & Poors to Playboy to CuteOverload to BoingBoing to NPR to my mom's Vox blog, Six Apart has enabled a distributed media "empire" that is truly vast, and growing. It will be exciting to see how Six Apart continues to flourish in the coming years. I am thrilled to be a part of it.




Immigration

Monday 25 June 2007 @ 1:50 pm

I was reminded of how immigration policy affects all parts of the economy while reading Fare is Fair, one of my favorite columns in The L Magazine that's a collection of quotes from those most in the know in NYC: the cabbies.

A number of our past guests on Venture Voice are immigrants. How does the immigration policy affect entrepreneurship in the US?




Nomis Solutions: Price Optimization Guru Focuses on Financial Services

Monday 25 June 2007 @ 12:21 am

I am a bit of a broken record when it comes to my "its all about the team" mantra. But I really believe it. Yes, it is important to have a good idea. Yes, it is important to be chasing a big market. But as important as both of those things are, they pale in comparison to the need for great entrepreneurs.

I've also written a fair bit about what it means to be a great entrepreneur. Some founders are incredibly good entrepreneurs by virtue of their sheer fanaticism and determination -- they thrive on the challenge of building a businesses out of whole cloth and hate to lose. Some founders are "serial entrepreneurs" and get the benefit of the doubt because they have done it before -- they have managed to run the startup gauntlet and make their investors a bunch of money. And other founders are incredible domain experts -- if anyone is going to figure out how to build an interesting business in their particular field, it will be them. If an entrepreneur falls into any one of these categories, you will do well to back them.

A few years ago I was approached about backing a company called Nomis Solutions. The idea behind Nomis was to apply modern price optimization techniques to the financial services sector. While banks and insurance companies do a great job of measuring and optimizing risk, they have historically done less well at measuring and optimizing pricing. As a result, the industry as a whole has left a lot of money on the table. The founders of Nomis intended to build a software solution to help financial institutions engage in profit-based pricing -- pricing that would create the greatest profitability on a product by product basis (auto finance, mortgage, home equity, personal lending, etc.).

Was it a good idea? You bet. Any time a piece of software can increase your profitability by 10 to 20%, it is a good idea. Was it a big market? Monstrous. Financial institutions are historically very difficult to sell software into, nonetheless, they are monumentally large accounts if you can find your way in. So my investment decision came down to the question of how was the team. While there were four fantastic entrepreneurs when I funded Nomis, and I do not in any way want to slight Nomis's other spectacular founders, I want to take a closer look at Nomis founder Dr. Robert Phillips.

Bob Phillips personifies the best characteristics of a great entrepreneur. He thrives on company creation and refuses to lose (when I made diligence calls on Bob, I was assured that he was a killer entrepreneur and that I would do well to back him but that I should never ever play him at Trivial Pursuit). Bob is also a serial entrepreneurs who has made a bunch of money for his investors in the past. As the founder and CEO of Talus Solution, Bob created the worlds largest price optimization company in its day, which he sold to Manugistics for hundreds of millions of dollars. And Bob is the guru of price optimization -- there is no bigger domain expert. If you have been annoyed by the fact that the guy sitting next to you on a plane paid significantly less for his ticket than you did, you have Bob Phillips to blame for that. He introduced revenue optimization to the airline industry many years ago. He literally wrote the price optimization text book and teaches it at Stanford and Columbia Business Schools.

It would be hard to find a better example of a fundable entrepreneur than Bob Phillips. So it will come as no surprise to you that Bob and his co-founders have managed to build an incredible company at Nomis. Their customers are literally a who's who of the banking industry, from Ford Motor Credit to HBoS to GE Consumer Finance to Washington Mutual. And their results have been nothing short of spectacular -- by installing Nomis's software, a bank can increase the profitability of its business by between ten and twenty percent. On a multi-billion dollar loan portfolio, that adds up to real money quickly. As a result, Nomis has been able to make great inroads into a really tough market.

I don't want to ignore the excellent work of Bob Phillips' co-founders. Nor do I want to understate the degree to which great hiring has helped make the company a market leader. But Bob Phillips remains the world's expert in revenue optimization and I would sooner bet with Bob than against him when it comes to price optimization. It truly is all about the team.




VV Show #46 – Jeremy Stoppelman of Yelp

Sunday 24 June 2007 @ 4:23 pm

Download the MP3.

Jeremy Stoppelman

Jeremy Stoppelman is the co-founder and CEO of Yelp, a site where users can write and share reviews of local businesses. Everyone's now a restaurant critic. However, local reviews were not the original focus, but just one of several features in the earlier versions of the site. Noticing the growth of this buried feature, Yelp re-tooled the site around reviews and hasn't looked back since. Does this story sound familiar? Jeremy's the former VP of Engineering at PayPal, which also had to drastically alter its business early in its life. Listen in to hear Jeremy's thoughts on growing a local enterprise, giving users and identity, and how to recognize and act upon the need for change.




Networking the Old Fashioned Way: Dodgeball

Friday 22 June 2007 @ 12:31 am

There are a lot of networking events in the Bay Area every day of the week. If you wanted to be a professional networker, this is undoubtedly the place to do it. But not all networking events are created equal. The massive gathering at a local bar may result in you rubbing shoulders with lots of like minded individuals but it will be loud and crowded and not particularly conducive to building real relationships. The nighttime panel on the startup topic of your choice is equally dubious when it comes to growing your professional network. While the conversation afterwards will require less shouting, it will probably be with other startup neophytes -- it is hard to attract seasoned professionals to take part in such events. The monthly trade organization gathering may well get you chatting with a number of similarly situated professionals, but it will do little to expand the breadth of contacts you have.

What is the solution to these networking woes? Dodgeball. After contemplating the profound networking opportunities on the dodgeball court, YouTube's Hunter Walk, Mint's Noah Kagan and I went about organizing the "First Annual Labor vs. Capital Dodgeball Tournament." And it was a big success. Lots of smart, fun entrepreneurs and venture capitalist came together to throw balls at each other's heads. And in between games of riotous ball-chucking fun, there were lots of opportunities to get to know each other. When folks headed back to work (or home) on Friday afternoon, there were lots of requests for the next Labor vs. Capital event on the circuit. We are still in planning mode but are contemplating Labor vs. Capital miniature golf, or Labor vs. Capital Paint Ball. Whatever it is that we choose, I think the result will be a pile of fun and some good clean networking on the side.

For those of you who didn't make it to the First Annual Labor vs. Capital Dodgeball Tournament, check out the latest installment of VentureCast. Craig and I recorded it at the dodgeball courts. You can even get the play by play of the finals of the tournament. It may well be our best remote VentureCast yet. And if audio from the dodgeball court isn't scintillating enough, check out the great video the folks at the Mercury News made.

It really was a pile of fun. I look forward to the next in the "Labor vs. Capital" series of networking events. Perhaps Labor vs. Capital curling.




LiveOps: From Next Available Agent to Best Available Agent

Thursday 21 June 2007 @ 1:16 am

I was chatting with my good friend Bill Trenchard this morning. Bill was one of the founders of LiveOps and is currently the Chairman of the company. He and I were talking about my LiveOps post from last night and I realized that while I had talked about some great applications of the LiveOps platform, I didn't discuss the thing I found most interesting about LiveOps technology. So before I move on to another one of my portfolio companies, let me share one additional thought about LiveOps.

I am a huge believer in the value of using software and data to optimize transactions. And the more data and the better the software, the more value you can extract from each transaction. In many ways, that is precisely what each one of my portfolio companies is trying to do -- unleash the power of the underlying data to produce the most value. LiveOps is no different. By leveraging the IP underpinnings of its call center platform, LiveOps is able to optimize the experience for its customers in ways that give the company an unfair advantage over traditional call centers and traditional call center management software.

The key to the LiveOps platform is that it tracks and manages each individual answering phones as an autonomous agent. And each agent is characterized by a set of data that makes up that agent's profile. So imagine that my mom decides to make some extra money by becoming a LiveOps agent. When she first starts to answer calls, the system will have very little information about her. But over time it will gather data about the job she is doing. The LiveOps platform will learn things like how quickly she answers a ringing phone, how many minutes is her average phone call, how satisfied are the callers with the outcomes from her calls, how many of her calls result in sales, what is the average amount of money spent on a call she takes, how often does she manage to up-sell the caller, etc. Using all of this data, when a call comes in, the LiveOps platform is able to rout the call, not to the next available operator, but rather to the best available operator. And that is LiveOps' unfair advantage.

LiveOps is in essence AdWords for people. The platform is able to measure and manage each individual agent in real time and route calls based upon the performance of each agent. And that routing doesn't simply rely upon data about the agent. It also relies upon information about the call coming in. If a call to the LiveOps' service is to sell a Ginsu Knife, the agent with the best track record of selling and up-selling will get the call. If, on the other hand, it is a call concerning front line product support, a different agent may have the best record of quick and effective resolution of support matters. Yet another call may come in that is a simple pizza order and get routed to the agent who is the most efficient and most accurate order taker. LiveOps software is designed to manage a large pool of agents and optimize their performance in real time based upon the nature of the call and the characteristics of the available agents. As a result, not only is LiveOps able to provide the low cost solution (by allowing agents to work from home throughout the country), but it is also able to provide the most effective solution by routing calls based upon the specific performance metrics defined by the client.

It is this real time, performance-based call routing that I think has led to LiveOps massive success to date. LiveOps customers include large enterprises that want to use the LiveOps platform to manage their own call centers and their own agents, as well as companies that want to leverage LiveOps' agents and software to provide an end to end solution. Either way, LiveOps customers are guaranteed the most efficient and effective "call center" experience possible. And, to my mind, that's pretty exciting stuff.




The Name Game

Wednesday 20 June 2007 @ 2:20 pm

From appearances, one of the most difficult decisions that a set of founders make about their early stage company is what to call the company and/or first product (often one in the same). The name game appears to be so difficult because, at the end of the day, the rationale for each choice is largely subjective. For this reason, the process often becomes one that antagonizes the company for too long. But it shouldn’t be that way.

It is one thing to have a couple people involved generating and filtering options, and then it’s whole other when too many other constituents (investors, advisors, employees, marketing vendors) are sharing (read: strongly lobbying for) their disparate opinions as well. The last situation you want is a board meeting with bunch of VCs brainstorming name ideas. Ugh. (The only thing worse is asking that group for their thoughts on how the logo should look and what colors to use.) The situation is only exasperated by the limitations of .com domain names available these days or the willingness of everyone to pay up for one that’s parked.

In thinking about this post, I tried to come up with a solid list of go-to rules of thumb to guide in this exercise (e.g. "the name should describe/evoke what the company does," "it should have five letters or less for simplicity sake," "there should no mistake on how the name is pronounced”, etc., etc.). But then I realized not only are these rules broken occasionally, they’re broken often… and very successfully. I think the only rule that matters in a naming process is that founder(s) should listen to all advice but then absolutely trust their own gut as to what runs parallel to their vision. And then everyone should quickly move on. The hurt feelings will fade over time, and if the decision turns out to be the wrong one, it can always be changes later (with costs, of course).




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