I met with a young venture capitalist today who has been investing aggressively in consumer internet over the past 18 months. We discussed investment philosophies and it got me thinking about my own. I began making angel investments in 1999 through Bayview Partners, the Robertson Stephens partner fund. Some went well. Most did not. After leaving Robbie Stephens, I made a few investments on my own. A higher percentage of these went well (Wayport, Cars Direct), but several went to zero or returned less than my invested capital. Over the past two years, as startup fever has consumed New York City, with a front row seat, I’ve resumed angel investing on a selective basis and feel as though my chances for success continue to improve with each successive investment made. Much has been written about venture investing theory, pattern recognition and the like, and I agree with most of it, but I think it takes some actual investing experience over several years to establish a sound approach and philosophy, including a few mistakes along the way. As James Joyce famously said: A man’s mistakes are his portals of discovery. Sadly (for their LPs), some of the new players in venture capital are diving in head first, learning as they go and most likely losing gobs of money in the process.
Roger Ehrenberg, one of the smartest investors in New York City, has written extensively about his investing philosophy More…
Facebook has crossed the canyon. If the “chasm” is the leap from early adopters to mainstream, then the “canyon” is the leap from mainstream to mass commercial appeal. Facebook has taken that leap. In the past few months, my dad, uncle, aunt and the mother of a high school friend have all joined Facebook. Facebook has become, as I explained to a hold-out friend of mine last week, the most fun and efficient way to keep in touch with the people in your life. As recently as five years ago, I reserved most Sunday nights for catching up with people by telephone. That was the way I maintained friendships, particularly with people living in other cities, who I didn’t see face-to-face on a regular basis. I’d call them after dinner, speak for 20-30 mins, get an update on the past few weeks (or months in some cases) and then say goodbye, until the next time we called each other. Today, telephone conversations of this sort are passe. Why waste time on the telephone, a communication medium limited to audio, when we can peruse each others’ photo streams, see what events our friends have been attending, and most of all, from a single page, get a snapshot of their status’. The feature with which Facebook offers the summary view of our friends’ updates is called the News Feed. If we really care, we can review their historical status updates to get a more complete picture of how they’re doing. When’s the last time you received as complete of an answer to the question “How ya doin?” <insert Joey accent>. Most industry wonks agree, the status update is Facebook’s single greatest achievement. It allows people to keep in touch with the absolute minimal amount of effort possible. It’s possible that Facebook makes it too easy, contributing to the loose ties effect that sociologists have been preaching, where our networks become less centered around a few close relationships and more around many looser ones. More than any other tool in my universe though, Facebook is having a significant impact on that shift in the social landscape. Their crowning achievement, the status update, is such a good invention that several companies have been formed around it, the most notable of which is Twitter.
Not surprisingly, Twitter’s growth trajectory has been similar to Facebook’s. Twitter virtually launched two years ago at SXSW in Austin, when it caught fire among a captive audience. Since then, it’s consumed the early adopter market and steadily made it’s way toward mainstream. In the past few months, several celebrities and consumer-focused orgs have caught on and grabbed ahold of Twitter accounts to communicate with their constituents. According to Compete.com, Twitter traffic measured by unique visitors is up 640% in the past year – though this figure doesn’t fully account for Twitter’s influence since a big chunk of their traffic flows through one of several messaging apps that feeds the platform. Like Facebook, Twitter is having it’s own effect on social behavior. I’ve recently noticed conversations taking place between groups and individuals that might be unlikely to converse otherwise. One example is GazaNews who has, not surprsingly, attracted a bunch of followers recently and engaged in some compelling back and forth. This is a good thing. Open dialogue and discourse between people that are geographically and/or ideologically far apart can only be healthy, and for a company as nascent as Twitter to be enabling this is a huge accomplishment. Twitter has essentially peeled off and borrowed a piece of Facebook by identifying and unleashing the full potential of this feature…not that there was anything Facebook could have done about it – it’s unlikely the status update could have been patented. Still, Facebook should buy Twitter to reclaim ownership of the feature and own the social media landscape that they’ve helped transform. It would re-establish them as owners of all things status update-related and give them another outlet for their ad sales activities. Better integration with Facebook would also expand Twitter’s influence exponentially, making it a far more powerful tool than it already is. The reality of Twitter is that it’s a feature that caught fire, but can probably only survive so long by itself. Facebook could likely acquire them for a reasonable price right now and quickly justify it by the further growth they can help fuel on the platform. It would also be a strong defensive move for them. If one of their competitors – in social networking, blogging or sharing – acquired Twitter, they’d essentially be stealing a piece of Facebook and I think that may come back to haunt them down the road.
This chart graphs the traffic on Sphere’s blog in April. As you can see, traffic chugs along fairly consistently at 150-300 visits per day, then spikes to more than 3,000 the day of our acquisition, which was covered by various high profile blogs and mainstream publishers. What’s funny is that the influx of traffic only lasts two days before returning to previous levels. In fact, over the past week, traffic has dipped down in the 100-150 range, which is lower than normal. Perhaps, our ruby slippers are wearing thin:) It just goes to show that fame is often fickle and short-lived….
When I put together Bergen Carroll a year or so ago, I setup a feature whereby readers could showcase their photos in a "featured photo" section by tagging them Bergen Carroll on Flickr.For the better part of 12 months, nobody noticed and the only photos rotating through the system were ones I uploaded myself. Then, something happened and people figured it out, possibly prompted by a few Flickr messages sent to neighborhood residents. Over the past two months, 80 neighborhood photos have been tagged Bergen Carroll on Flickr by 3-4 different photographers. I love that this feature has been noticed and is being used as intended. It shows that adoption can sometimes take time (and can require patience) before usage grows. Though having that patience is often a necessity if you believe a product has real growth potential. Another six months without adoption and I may have taken the feature down…..
This is a thrill and very exciting, but also a tad bittersweet. Exciting because any time a small fledgling startup that you’re a part of building is acquired by one of the large Internet superstars, it signals that we’ve made it; that we’ve created something of value that others recognize and appreciate. Based on our traction in the market and accelerating demand for partnership, we knew this internally, but an acquisition by a brand like AOL announces it through a bullhorn to the rest of the world. It’s also exciting because AOL is giving us the opportunity to remain independent, which we love because the team has really gelled and is hitting on all cylinders right now. It’s fantastic that we get to continue working together and building out what we started with the resources of AOL. Of course, this is also where the bittersweetness comes in. I’ve been involved with Sphere for 14 months. For eight of those, we were engaged in a courtship ritual dance of sorts, that eventually resulted in me joining the team. For the past six, we’ve been sprinting towards the finish line and fending off other competitors trying to take a piece of our pie. Our pipeline is full with some of the biggest and most exciting brands and publishers. Our business should continue to grow and naturally, there’s a part of me that would have loved to ride this one out a tad longer, especially since six months was just enough time to really get in a groove. Though I imagine this is a sentiment that one feels whenever a sale of a business takes place, whether after six years or six months. Now, time to focus on the great opportunities this brings and to finish what we started. Onwards and upwards we go….
Spent the past week with the Sphere team at the COD ranch outside Tucson, AZ. It was a great opportunity to get to know all the members of a team that’s been working closely together over the past 6+ months. When you’re a virtual company, personalities don’t play as strong of a role in the functioning of the organization. It’s more about the task at hand and raw performance. I think this is one of the reasons we’ve been so successful at Sphere. It’s all about personal accountability and this puts pressure on each of us to perform. I’ll always be curious to know how our performance would have been affected if we shared the same office space. I’m guessing we’re better off in our virtual structure, and our friendships are probably better off for it as well:)
Anyway, last week was a great few days on the ranch, getting to know the team better, and drinking a few beers around the campfire. We coded a few new features and even pushed a new productor two out the door. Our founder/CEO, Tony Conrad, turned me onto some new bands, a nice surprise and thereby fulfilling his status as all-around groover.
Last night Sphere co-hosted a cocktail party with The New York Times, Automattic (WordPress), Giga Omni Media (GigaOM), Hearst Corporation and True Ventures. The event celebrated the evolution afoot in the media industry, bringing together large publishers and bloggers. Quite an evening. Thank you to everyone who joined us and a special shout out to True Ventures and Hearst for making the event possible. Here are a couple of photos from the event which took place at the top of the new Hearst Tower overlooking Central Park.
Woah! Seven days in Austin for South by Southwest were all I could handle (in fact, more than I could handle as I escaped for one night to Dallas). I signed up for SXSW without knowing much about it, but with the general impression that it was a fun event and unique in the professional world. Both these assumptions proved spot on. By the second day, I was referring to SXSW as Burning Man for Business. In fact, there is significant overlap in attendance and I found myself discussing Burning Man several times over the week. The format of SXSW is very similar to Burning Man, with sessions and panels organized throughout the four days of the conference (and many people skipping the sessions altogether). While some of the sessions were entertaining and educational, the real meat of the conference happened outside the convention center at the parties, in the bars and throughout downtown Austin. In the evenings, tech stalwarts like Google, Apple, Adobe and a few upstarts in a Super Bowl ad-like move, throw parties at local bars where booze flows freely (as in gratis) into the wee hours. This scenario creates an extremely social ethos, not to mention makes for late nights and late mornings, all making SXSW a giant party for the industry. If you weren’t there, this might sound like a giant boondoggle, but interestingly, I found that more valuable networking and business actually happened that at your average conference. In an industry that is relatively young, where founders and execs in their early 40s represent the high end of the range, we’d all rather do business in fun, social environments than staid office-like conference halls. This proved out over the course of the week as I networked and connected with many dozen industry professionals from around the country. I also found these relationships more authentic and more likely to lead to friendship since the formality and forced interaction are lifted. I did manage to attend a few valuable sessions, my favorite of which was given by Jason Fried on Lessons Learned at 37 Signals. His message was overwhelmingly simple and the lessons he conveyed were mostly common sense. Sean Ammirati has a nice review of the session on ReadWriteWeb. Another session that scored high marks was The Worst Website Ever delivered by Merlin Mann which you can watch here on Viddler. Overall, SXSW was nothing short of awesome, and I’ll definitely be back in future years.
People often ask us how Sphere’s products and technology fare versus our competition. While we believe that the results (namely our footprint) speak for themselves, it’s worth discussing some of the key differentiators between Sphere and other similar services out there:
Behavioral vs Contextual- Several well-funded companies are competing for a piece of our market’s mind-share by offering related content powered by behavioral analysis. In other words, people who read this article also read this one, so we believe there is a relationship between them and you might also want to read it. This technology is very cool and we love it when it comes to e-commerce and the like. When I buy a digital camera, it’s helpful to see the memory cards that other consumers most often purchased. When it comes to content, however, we think it’s much more difficult to establish reliable relationships between, often, very disparate articles. We also understand that click-through rates generated by these services on content are typically significantly lower than those generated by contextually related content, and we think this confirms our hypothesis. Sphere contextual matching will generate higher quality results on content more consistently than behavioral analysis.
Dynamic Results Guarantee Freshness- Sphere’s related content results are generated dynamically in Java-Script every time the page loads. This guarantees that we’ll provide the reader with the absolute freshest content. If I’m reading an article and a blogger and/or journalist published a contextually relevant piece within the past hour, this is something that I’d like to see and thankfully, Sphere will provide. Getting back to the point above, behavioral relationships typically takes time to establish, which prevents me from seeing the freshest results, from the source I’m on or elsewhere.
Breadth of Related Content- Our technology is super-flexible and this means we can generate related content results from a multitude of different formats and sources – including articles, videos, photos and podcasts. When you integrate Sphere with your site, we can generate related content from your own articles or videos, as well as from external sources including blogs, videos and podcasts. Since we maintain one of the largest indices of the blogosphere, segmented by topics, and already work with many large video providers, this all happens very quickly.
Simplicity of Integration- Speaking of speed and quickness, this is the icing on the cake. Several of our competitors require significant excavation and retooling of publishers’ CMS and website. Instead of offloading the work on our partners, we do all the heavy lifting at Sphere, including the indexing and configuration. When it’s all complete, we deliver some slick code wrapped in a red bow with instructions for implementation. That’s it – signed, sealed and delivered. Our typical implementation from start to finish happens in just a few days!!
If you’re a site owner or publisher and any of this gets you excited, send us an email by clicking the "contact us" link at the top right of our site.
I met with a young venture capitalist today who has been investing aggressively in consumer internet over the past 18 months. We discussed investment philosophies and it got me thinking about my own. I began making angel investments in 1999 through Bayview Partners, the Robertson Stephens partner fund. Some went well. Most did not. After leaving Robbie Stephens, I made a few investments on my own. A higher percentage of these went well (Wayport, Cars Direct), but several went to zero or returned less than my invested capital. Over the past two years, as startup fever has consumed New York City, with a front row seat, I’ve resumed angel investing on a selective basis and feel as though my chances for success continue to improve with each successive investment made. Much has been written about venture investing theory, pattern recognition and the like, and I agree with most of it, but I think it takes some actual investing experience over several years to establish a sound approach and philosophy, including a few mistakes along the way. As James Joyce famously said: A man’s mistakes are his portals of discovery. Sadly (for their LPs), some of the new players in venture capital are diving in head first, learning as they go and most likely losing gobs of money in the process.
Woah! Seven days in Austin for South by Southwest were all I could handle (in fact, more than I could handle as I escaped for one night to Dallas). I signed up for SXSW without knowing much about it, but with the general impression that it was a fun event and unique in the professional world. Both these assumptions proved spot on. By the second day, I was referring to SXSW as Burning Man for Business. In fact, there is significant overlap in attendance and I found myself discussing Burning Man several times over the week. The format of SXSW is very similar to Burning Man, with sessions and panels organized throughout the four days of the conference (and many people skipping the sessions altogether). While some of the sessions were entertaining and educational, the real meat of the conference happened outside the convention center at the parties, in the bars and throughout downtown Austin. In the evenings, tech stalwarts like Google, Apple, Adobe and a few upstarts in a Super Bowl ad-like move, throw parties at local bars where booze flows freely (as in gratis) into the wee hours. This scenario creates an extremely social ethos, not to mention makes for late nights and late mornings, all making SXSW a giant party for the industry. If you weren’t there, this might sound like a giant boondoggle, but interestingly, I found that more valuable networking and business actually happened that at your average conference. In an industry that is relatively young, where founders and execs in their early 40s represent the high end of the range, we’d all rather do business in fun, social environments than staid office-like conference halls. This proved out over the course of the week as I networked and connected with many dozen industry professionals from around the country. I also found these relationships more authentic and more likely to lead to friendship since the formality and forced interaction are lifted. I did manage to attend a few valuable sessions, my favorite of which was given by Jason Fried on Lessons Learned at 37 Signals. His message was overwhelmingly simple and the lessons he conveyed were mostly common sense. Sean Ammirati has a nice