WayTooEarly

Demo and TechCrunch50 - Startups are going strong

For the first time in many years, i won't physically get to either  the 18th year of DEMOFall or the second year of the TechCrunch50 (it was 40 last year, supposed to be 20). But through the magic of the world wide web, I can see how vibrant the startup and new product economy really is. Demo has videos up of their new products, and TechCrunch has Qik and ustreams which let non-attendees like me see the good stuff in real time.

DemoFall has 72 companies/products being introduced, some from big companies like Best Buy and Real Networks, but most from startups like SpinSpotter that help to find truth in the stuff you're reading, or alerts.com that lets you set up information push on things of interest. And there's the new Plastic Logic Reader, which is exciting to a Kindle user like me. Of course, they've raised $200 million, which is a little more that FirstRound normally does, so we're not investors.

TechCrunch50 has 52 companies (selected from over 1,000), including OtherInBox, which lets you give special emails and keeps most of the marketing junk mail (not spam), out of your normal inbox, and Yammer, which is a secure enterprise usable communications site, with capabilites of Twitter, IM etc. all protected and tracked.

At FirstRound Capital, we normally look at 2,000 deals a year to make 20 investments, and both of these great conferences provide tremendous raw material (although I must admit we prefer to see them before they've gotten the exposure). But it's really great to know that there are thousands of high quality startups still being created in the US and elsewhere, and that even in this tough economy, the new economics of capital efficient startups is thriving.

Wirewize: Connecting the CE Future to your CE Past

We've all faced the problem of bringing home a great new piece of consumer electronics (plasma TV, DVR, 5.1 surround system), and trying to connect it to the existing system. Even for those considered tech gurus by their slightly more challenged relatives, this is not a simple problem.

First, one finds the the right cables may not be readily at hand. This either means another trip to the store (or web store), or making do with the wrong cables and lesser connections (e.g., S-Video instead of HDMI).  And deciphering the back panels of various manufacturers equipment, with those wonderful icons (some designed for Martians, no doubt), is another intellectual challenge.

About two years ago, Dean Summers, founder of Partsearch Technologies (an Idealab company), came up with a better idea. This led to his leaving Partsearch and starting CE-interactive, and the launch of their Wirewize.com site. (First Round Capital is an investor in this venture).

You can set up a locker by selecting the electronics gear that you already own.  Almost 10,000 of the top amplifiers, TVs, cable boxes, game consoles, etc. are already in the database.  When you want to add a new piece of gear, wirewize.com can tell you what cables you'll need for the best connectivity, and show you detailed pictures of each back panel, with hard to mess up instructions for where to connect each of the cables that it told you to get.

Presto, fewer returns or return trips, better quality pictures and sound, and the ability to return at any time to wirewize and see if there is upgraded software for your devices (yes, much of the CE world now does this). And you can read many of the manuals online as well.  Right now, the free version can be tried at www.wirewize.com.  I've already used it to find a better way to connect my TiVo Series 3 and my Panasonic system.

Look Ma, No Wires

There was one new technology that I saw at CES that really does have promise for the future - wireless power.  Though it's been talked about for years, and many schemes have been tried, there are now some truly revolutionary methods for transmitting enough power not only to charge cell phones or iPods, but also to run big PCs and desk lighting.  Of course, all the power on Earth owes it's debt to old Sol, our sun which transmits it's power to the earth in visible and infrared ranges.  And there are some products that use that directly.  The Solio hybrid energy chargers are solar cells that charge an internal lithium battery, which then feeds USB connectors (with the iGo tip system), so that you can keep your phones, etc. charged up directly from the sun.  One of the products has a clip to go on your backpack, another fans out 3 cells to get even more power.

Bt for a real look at the future, you should see what Powermat, eCoupled and Powercast are doing.  Powercast is using RF technology to send the power, while Powermat and eCoupled are using inductive techniques. Powermat is based on the RFID tags and some very clever drive technology and seemed the best of the lot to me. In addition, there is Wipower and some other folks working in this very hot area.  Some of the key issues are how much power at what distance.  Milliwatts at Meters is Powercast's view, while Powermat seems to be able to have much higher power loads with devices placed on their mats (which are only a few millimeters from the device they're powering).

Here's a light just stuck (magnetically) on the wall, drawing power from the wall surface mat.

One of the nice side benefits to Powermat is that of energy conservation.  Since you don't have all those "vampire" power charges plugged in, you're not wasting nearly as much power. And the Powermat system can sense how much power is needed and deliver it on demand, resulting in what could be significant savings.  It will certainly be nice when I can just lay out the powermat, plug it in, and then drop my PC, cellphones, iPOds, cameras, and a small desk lamp, and know that I've saved the charger weight, the tangle of cables (which drives my wife nuts), and be saving power as well.

I'm hoping to be able to make my desks at home and office Powermats in the next year, and lighten my charger load (physically and electrically).

Eating Our Own Dog Food

As an early adopter, I usually "eat our own dogfood" as our companies get early betas, etc. But as life gets more complex, some of the more mission critical tasks I do won't brook too many crashes.  This is especially true now that I'm on Vista, and a reboot is 10 minutes or more. So I'd gotten somewhat out of the habit. Fortunately not completely so.

This morning, I was searching for a CD by an obscure jazz singer, Katie Eagleson.  Looking on Amazon (often my first quick look), led to a $39.98 price for the CD, which just seemed way out of line.  Then I thought "I wonder what Bigger Boat would suggest?" Full disclosure - Bigger Boat is a First Round Capital investment, and I'm a board member.   I had used it a year ago when we launched, but got out of the habit.  A quick search on Bigger Boat instantly took me to an $8.90 download of the CD - a quick $31.08 savings!

I've also been using the beta of Xobni which gives quite interesting information on my large (12GB) Outlook files.  I've installed and uninstalled it twice, but it's clearly moving forward and helpful. Now to start seeing what one of our newer investments, Mint can save me:)

So yes, it's a good practice for venture capitalists to eat our own dogfood. Not only can we better advise the companies, often they can help us in the same way we hope they'll help all their other users.

John Rain Has an iPhone and I don't, but I've tried one

      John Rain, the Japanese-American assassin anti-hero of Barry Eisler's great series or novels, already has his iPhone, and they're not even on sale.  I was reading Requiem For An Assassin, the latest in the series, which came out a few weeks ago. Rain arrives in Palo Alto from Asia, and needs to buy his tools, so he goes into a Cingular store (pre ATT) and buys an iPhone.  He proceeds to use it for calls, and to monitor a GPS tracker he's put on someone's car.  He does, of course, assassinate a Silicon Valley CEO while making it look like natural causes (his specialty), something I've often thought of doing at the end of interminable board meetings.

Fortunately, I met a friend last night who,as an important member of the press, already had an iPhone, and got to play with it.  The key reviews (Baig, Levy, Mossberg, Pogue) all pretty much have it nailed. The virtual keyboard is not an issue, the screen is gorgeous, the hand feel and design is tops, and the lack of Exchange server connectivity and the use of only the slower part of the EDGE network are killers.  If i got one (which I do not plan to in this version), I'd try and put a screen saver picture of a Scharffenberger dark chocolate bar on it, since it's about the same size, and just as sweet.

I'm going to see Steve Jobs' other debut this weekend, Pixar's Ratatouille, and just put my Blackberry on vibrate.

Too Early - TechForward Makes It Easier

As readers of this blog know, I like to be an early adopter, and an early investor.  When it come to technology, I want the latest gadgets, most up to date computers, etc. But being too early on these things costs money. I'm often faced with the old question of how early to upgrade to the next new best thing. That's why the business plan for TechForward, our latest First Round Capital investment, resonated so strongly. 

TechForward, started by Jade van Doren and Marc Lebovitz, offers guaranteed buyback prices for your new equipment: laptops today, soon other computers, digital cameras, music players and the like.  The operation is quite simple. When you buy the equipment, you can also buy (either at retail or through the TechMyLife.com website) a contract that offers to buy that equipment back from you over the following 24 months. (I'm not sure I've kept any of my computers that long in the last decade).  There are four prices, one for each six month interval (see the example).

When you're ready, you login and tell them, they send a box and you ship back your machine. Assuming its condition is as stated, you get a check for the contract amount to use as you see fit, or perhaps, with retail partners, a gift card for even more than that amount to be used at their store.  There's a lot of very sophisticated mathematical modeling of large amounts of data to determine the upfront fees and buyback prices. 

I love the idea that I can shop for my next machine as soon as I like, with the knowledge that there is a floor on the value of my old one.  Of course, I can always sell it myself if it turns out to be worth more at the end of a particular period, assuming I don't mind all the hassle. So now I can stay too early or way too early with my computers and gadgets, abetted by the TechForward Guarantedd Buybacks effectively lowering my new machine's price to something a little more reasonable.

3 by 5 Marketing - Shameless Self Promotion

My new book, written with the world renowned Professor Len Lodish of the wharton School and Shellye Archembeau of Metric Stream, has just been published.  Marketing That Works is meant to help entreprenuerial marketers, whether in startups or big companies, understand the many issues surrounding how to market the things you have for sale. These include your actual product, your shares of stock, and your corporate image.

The book is organized around our 3 by 5 marketing concept. Simply put, every venture has three key things to sell, to five different constituents.  The three columns are  Products/services,  Shares,  and Image.  The five constituencies are Customers (those who give you money for something), users (who may or may not pay), investors (who also give you money), employees (who cost you money, but want to know why their options might have value, and why it'll be fun to work with you), and others (suppliers, strategic partners, etc.).

The biggest mistake I see as a venture capitalist is that almost all the business plans I see are about marketing the product to the user.  As a VC, you have to market the stock to the investor (me), which has a different focus.  And understanding your business model means knowing why the customer will pay you for the product. Just knowing that you can get a lot of users (eyeballs) may not be enough to sell me or my partners at FirstRound on a deal.

The devil, as you know, is in the details, hence a 300+ page book.

As a favor to my readers, you can get a 35% discount at Wharton University Press, by using discount code MTW35off until September 1, 2007.  Of course, it is about the same price on Amazon every day:)

Gotcha

Monday night (Jan 29) was one of New York's great networking events, the Genesys Dinner, which Jim Kolleger holds each year prior to the Information Industry Summit, Aside from great conversation, some nice words about Esther Dyson, including a plaintive plea for just one more PC Forum (not happening, alas), the evening ended with an important five minutes from  Mark Walsh.

Mark has transitioned from the straight business world (Verticalnet, etc.) into the more political sphere. He was one of the key players behind Air America, the liberal radio talk network, and is now a commentator on MSNBC and XM.  He was decrying the movement in our political society toward sensationalizing "gotcha" moments. 

George Allen's Macaca moment was just one example, and the pouncing of the press on small individual statements, made in settings that thirty years ago would never have been reported, has led to a mean spirited trashing of people.

But Mark's key point is that in marketing, politics leads business.  Be prepared to see the "Swift Boating" of GM, on a site like www.gmisevil (not a real site I hope), paid for anonymously by one of their competitors. Smear tactics have become one of the unsavory and unfortunate weapons in the arsenal of political candidates. Alas,the Lincoln Douglass debates are no more. While the unexamined life may not be worth living, the fully examined life - each and every minute logged on cell phone cameras and uploaded, may be even worse.  And if businesses try to enhance themselves not with better products, but by trashing their competitors, we'll all suffer.

I think Mark is right that the "Gotcha" blogging and journalism will lead to more divisiveness and bitterness. In keeping with this blog's philosophy, Mark is hopefully a little too early with respect to corporate marketers, I'd like to think we can still avoid some of it.

There are ways of pointing out problems in a constructive way - see Mark Hurst's great www.thisisbroken.com site that let's you post stuff, and posts  FIXED buttons when the vendors fix things.

Perhaps a way too early warning will help - and examining one's own behavior.

Information May Be Free - But You'll Pay

I've always admired Fred Wilson's style of thinking about issues.  As the uber venture blogger, he's made the decision to live a largely blogged life, so we readers know about his musical tastes, his family, his travels and his thoughts about politics.

His latest talk, given to the Information Industry Summit in NY yesterday, is an excellent view of how to make money if information is really free. We're trying to do this with some of our companies at First Round and Idealab as well, but I've rarely seen it articulated this clearly.

See the pdf for the slides and his comments on the Union Square Ventures blog. Highly recommended.

Lenovo is Setting The Table

At Fred wilson's suggestion, I just finished reading Danny Meyer's Setting The Table, a wonderful book about his management philosophy in creating a number of New York's great restaurants, including Union Square Cafe, Gramercy Tavern, and the Shake Shack.  Since my office was on the Gramercy Tavern block, I have had many a tasty lunch there.  The book is really about the difference between service and hospitality, and building a culture that engenders good will with employees, customers, the community and investors. Done right, as he has, it leads to a virtuous circle.

I arrived here at CES Las Vegas yesterday afternoon, and realized soon after that I had left my Lenovo T60 power supply at home.  I love the T60, and kept trying to figure out how I could live for 2 days without it. The Blackberry would show me some of my email, but it would be hard to get my thrice daily crossword puzzle fix, and even harder to blog about CES.  Since the T60 supply has a different connector than the old IBM T and X series, none of my colleagues power supplies had cables that would fit.  I looked in the CES directory to see where the Lenovo booth was, and, to my surprise, there was none.  They had decided not to exhibit.

In this funk, I attended the ShowStopper event, a non-sanctioned, but fun party where sixty or so companies each have a 2 foot long table to show their wares to the media.  There is of course, free flowing drinks and food as well.  Right there on the left was a small Lenovo display.  So I went over and asked if I could plug my machine into one of their supplies to at least get some power.  Without hesitation, the Lenovo representative said, "Wait one minute, maybe we can do better." an almost exact quote from the Danny Meyer method of dealing with customer issues.  She returned a minute later and handed me a power supply with a smile, "glad you're a loyal customer."  I have been, and certainly will continue to be. Any company that has its staff focused on great customer experience deserves my business, and yours.