Sunday, December 4, 2011

The Latest from TechCrunch

The Latest from TechCrunch

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Mint Founder’s New Project, Swift, Studies Personal Maglev Vehicles

Posted: 04 Dec 2011 09:29 AM PST


Aaron Patzer, the founder of Mint, has a new project that he is spending half his time on (he continues to spend the other half as VP of Product Innovation at Intuit, which acquired Mint two years ago for $170 million). His new project is called Swift, and it is his vehicle (if you will) to exlore the feasibility of building a personal maglev vehicle transit system.

“The goal is to see if I can develop a new transportation system to displace cars in most urban and suburban settings,” he told me recently, “with the goal being 5x the speed, and bringing the cost of maglev from today’s costs of $50m / mile down to $4-5m / mile, which would be the same as adding one lane of asphalt/concrete road. Not sure if it will pan out, as I’m deep in the science and simulation phase.”

After a lot of analysis and setting up some simulations, he figures that he can built a system with two-person “pods” hanging underneath maglev rails which will operate at the equivalent of 800 miles-per-gallon, at 3 to 4 times the speed of regular cars. But even that will not be enough to displace cars. He’s concluded that the numbers don’t pan out. And he just shared his findings in an extensive blog post. It has all sorts of details on his concept and how it would work, but here is the conclusion:

While a 3-4x velocity improvement, 800+mpg energy efficiency, and 3-4x reduction in cost over light-rail systems, it's not enough to displace cars. The future of transportation is still the concrete and asphalt road, for the simple reason that at $17 per tonne of asphalt versus $900 per tonne of steel or $10,000 per tonne of copper, roads are the only thing cheap enough to be ubiquitous in lower density areas. Not even the ultra lightweight track of Swift looks cheap enough to displace roads outside of dense urban areas where, because it uses a much smaller rolling stock (number of vehicles) and can have higher throughput, mass transit is likely a better approach.

If roads are the future, then so is the self-driving car, functioning like an on-demand taxi system, connected into a centralized traffic database to avoid congestion and minimize time, and driven by computers in a platoon formation of 5-10 cars to minimize aerodynamic drag by up to 35%.

It is quite possible the same system-level traffic engineering algorithms developed at Swift can be used in such a self-driving system. That said, Swift PRT as a maglev concept will be abandoned. No track-based system (not maglev, not light-rail or metro systems) can compete with the cost and ubiquity of roads for population densities below 5000 people / km2.

It looks like those self-driving cars Google is developing might not be such a crazy idea after all. I hope Patzer figures it out. These are exactly the kinds of big, world-changing ideas startup founders should be tackling.

Building For The Long Haul

Posted: 04 Dec 2011 09:00 AM PST


Editor's note: This post was written by guest contributor Aaron Levie, CEO and co-founder of His last post on TechCrunch was Competing Against The Big Guys.

At a recent Startup School, Mark Zuckerberg made some very poignant comments about Silicon Valley's lack of long-term focus.  While the quick turnover of capital, people and innovation makes the Valley an incredibly attractive place for starting companies, it also produces an environment that's almost hostile when it comes to building them for the long haul. The tension is remarkable, yet it's rarely highlighted among the more explicit challenges – say, going up against the 800lb gorilla – faced by entrepreneurs.

Every so often, my non-tech friends half-jokingly ask, "Have you sold yet?"  And for the first few years of Box's existence, to placate them, I would ask for just a couple more quarters. Right after we get our next product to market, after we double again, and so on.  But soon it dawned on me that I wasn't going to stop.  I couldn't.  There was just too much to do, too much unexplored territory. Even when things weren't going well, the challenge of righting them was like another shot of pure adrenaline.

In many ways, starting a company in college (isolation) in 2005, before the dawn of TechCrunch (insulation), permitted a certain innocence.  My co-founder and I didn't fully understand the Valley's business model and constant churning nature until we were smack in the middle of it.

The advantages of being here are obvious – vastly more talent, capital, experience, and resources than anywhere else – but we often forget that most of us started companies simply as a vehicle to get our (hopefully) world-changing products to market.  How quaint.  It's all too easy to get swept up in the social pressures and biases of the Valley, where we idolize those that have sold their companies for large sums of money, mourn those that didn't sell soon enough, and overlook the decisions (and non-decisions) it took to build companies with true longevity.  Victory begins to have a complex definition.

Referring to the mysterious craft of timing exits, one of the greatest investors in the Valley recently told me, "you have to be suboptimal to be optimal."  While remarkably true, this statement assumes you're optimizing for some knowable, local maximum – what if you're trying to build something far beyond today's vantage point?  We often miss the entire point of why most of us start companies in the first place, which is why Zuckerberg was universally seen as arrogant and foolish when he passed up the opportunity to sell Facebook for $750 million to Viacom, even by the smartest and most experienced minds in tech.  He executed brilliantly, and now looks like a genius.  Yet, had it gone another way, most would have said, "I knew that thing had no legs."  Funny how that works.

With hindsight being 20/20, it doesn't take much imagination to concede that the regret of not pursuing the opportunity to truly change the world might outweigh the near-term guarantee of a robust bank account.  Even so, the odds – and public opinion – are generally stacked against you when you decide to optimize for the former.

Everything is working against you

When nearly everyone is rooting for the underdog, maintaining and gaining market leadership can be antithetical to the very nature of the Valley. In building for the long haul, you're competing with dozens if not hundreds of companies with equal determination to move upstream.

Even the motives of the constituencies presumably on your side – customers, employees, founders and early investors – are not always perfectly aligned. While software is busy eating the world, investors are still only content with eating IRR.   The very financiers that make millions building up one internet leader eventually must go on and bankroll its demise.  As they should.

And if you successfully quell external forces and internal conflicts to reach a stage of public liquidity – the new Holy Grail in the Valley – it's not as if you're magically home free.  In nearly all respects, your problems only compound.  Vested employees parachute out, Sarbox slows you down, analysts speculate on acquisitions you have little control over, and the news cycle surrounding your company's every move is now tied to the 'buy' and 'sell' decisions of investors arguably less savvy than your Sand Hill neighbors.  Can you imagine what would have happened to Facebook's stock had they launched the News Feed as a public company?  It seems we'll soon find out.

With opposing forces like these, why would anyone even try to build for the long haul?  Well for starters, it's ridiculously exciting and also extremely gratifying, and you create far better companies and products in the process. If you do it right, you have a chance to change the world.

How you build for the long haul

1. Set up a vision that puts you many years out

Be sure your company is tackling a long-term, complex, pseudo-existential challenge that isn't going away anytime soon.  Not only are these missions the most fun to be a part of, they're the only ones that survive over the long haul. started out as "Earth’s Biggest Bookstore." Now it "strives to be Earth’s most customer-centric company where people can find and discover virtually anything they want to buy online."  Platitudes aside, gnarly goals are essential.  And getting your vision right is so important, because it should drive everything you do, your product most importantly.  

Early on at Box, our vision was less than crisp and put us into a head-on collision with giants that would also want to help consumers store files online.  Through relentless refinement and imagining the shifting landscape over a decade-long view, we developed a roadmap and mission that represented perhaps a much larger challenge (making enterprise collaboration and content management simple), but one that allowed us to imagine how we could fit into this transitioning world.  This dramatically changed what we would develop and how we would go to market, always acting as a straight-forward guide for what we would do next.

Building for the long haul gives you the freedom and clarity to build out a product over a much greater time horizon, realizing an ultimate vision that is far into the future.  Fred Wilson calls it the Long Roadmap.  You get to move beyond a range of visibility limited this quarter's priorities.  And it means that your product today will look almost nothing like what you eventually want it to become.  The stretch of time betweenMicrosoft Windows 1.0 and Windows 95 was a decade.  Even fifteen years after that, the product still has dozens of iterations to go.  I'm guessing with Evernote's vision of "Remember Everything," they're going to be at this for some time.

2. Build an organization that can get you there

With long-term product planning comes the opportunity to build an entire organization based on your terms and vision.  You get to set the culture, pace, tone and attitude.  Watching a startup go from a handful of people to hundreds is an incredible experience. I can only imagine what it's like to take it to thousands.  People will come and go at varying points; some will scale and evolve as quickly as your company and mission, others won't.

It's critical that your culture is established and enforced early on, in large part by hiring people that fit, and maintaining that bar without exception.  How many times have we heard that A-players hire other A's, yet how many organizations stay disciplined when having to quickly build up their ranks?  Is your culture institutionalized to the point that deviating is a fire-able offense?  Are people unwaveringly convinced by and committed to the vision?

Most importantly, you must build an organization that understands this fight will have multiple rounds, and will require excruciating persistence and dedication.  Sometimes this is about long hours and insanely difficult work.  Other times it's about maintaining composure when dealing with the mental stresses and strategic challenges that come with each of the many revolutions.  Every now and then it's about complete reinvention.

3. Constantly reinvent yourself, your product and your ideals. Oh, and occasionally that vision

Nothing about the internet is set in stone.  The cycles between technology revolutions are shortening with every major innovation.  By extension, your company's vision, competencies, and product should always be subject to reinvention.  Organizations that last are constant avengers of the status-quo.

Google made it its mission to manage the world's information. As we've moved toward more of a social vs. indexed web, and now that computing cycles and storage have become exponentially cheaper, this strategy on its own looks less compelling. Google realizes the profundity of this change, and is shuffling resources and people extensively.  Larry "what-is-cloud-computing" Ellison has done an about-face, and is (at least publicly) betting the farm on the cloud.

If you're not incessantly checking to see if your company's tactics, strategies, and assets align with the current (and future) market, there's simply no way to win.  Constant reinvention of your ideals and product is the only path to survival.  Amazon discovered that selling DVDs was no harder than selling books, and selling digital media was not so different from selling DVDs. Now, supplying devices is essential to selling that digital media.  Reinvention.

Now, I'm not saying that no one should ever sell.  God no.  There are generally more reasons than not to sell a company.  Sometimes you've been at it long enough, and you want a great landing for employees and investors. Sometimes your technology's adoption will be accelerated or more impactful under another owner. And on the internet, this ambiguity is at its highest – with few moats to rely on, it's a wonder that any survive.

But perhaps it's the challenge, and thus the scale of the opportunity, that makes it so exciting. With the right conviction, you can build for a distant period with full acceptance of the difficulties and costs of doing so, ensuring that your product and organization are always better positioned in the future than the present.

And for those that can do this –reconcile the need to constantly grow and innovate with the reality that most companies fail or are subsumed– the glory and benefits are sweet.

Photo credit: Robert Scoble.

Exploring The “Labs” Trend in Consumer Startups

Posted: 04 Dec 2011 07:30 AM PST

Photo Credit: Flickr / puuikibeach

Editor's note: TechCrunch contributor Semil Shah is an entrepreneur interested in digital media, consumer Internet, and social networks. Shah is based in Palo Alto and you can follow him on twitter @semil

For those of us who studied (or suffered through) chemistry at some point in life, images from the chem lab inspire nostalgia (or dread). White lab coats. Protective goggles and gloves. Glass beakers and measuring cups. It was a place of experimentation. Students were given strict lab instructions, such as "Don't mix baking soda and vinegar" or “be careful when mixing Mentos with soda,” which many of course ignored. Whether one liked chemistry or not, there was usually an undeniable sense of excitement at conducting experiments that had the potential to cause chemical reactions, the kind that would trigger loud sounds, big messes, and new things.

In the world of technology companies, the "labs" concept and nomenclature found a friendly home. Microsoft Research has FUSE Labs, there's HP Labs, and Mozilla Labs, and let’s not forget the once-mighty Google Labs (R.I.P.), among many others. Digging into the history of big tech "labs" would be the subject worthy of a book, of course, but in the context of this narrow post, it's worth briefly noting that for those that make things and are builders, every big company needed to have something like this for branding, recruiting, and to keep the innovation engine humming as their corporate parents grew larger and more bureaucratic.  Perhaps each one wasn't referred to as a "lab” explicitly in name, as Amazon has A9 and Google now has Google X. No matter the name, there’s something powerful in the word that reminds us of the old chem lab and that spirit of experimentation.

Big tech companies have hearty budgets to set up "labs" for their best and brightest to cook up new ideas within. In the world of tech startups, by contrast, the original image “labs” conjures up is of a few people "sitting in their garage" hacking new ideas. In this world, it's a powerful metaphor and how founders of seminal companies like Atari and Apple etched their legend. Of course, HP was started in a garage in Palo Alto. In these and many other startup garage stories, there’s something primal, something irreverent about the type of experimentation that takes place in the garage versus the big tech lab company.

Fast forward to the eve of 2012, where it's significantly cheaper to develop web and mobile applications now that software costs have plummeted and large distribution networks exist for startups to harness, though it still remains very difficult to get discovered. The "labs" nomenclature is back in vogue in the consumer web and mobile spaces, and the gritty garage has been replaced with urban loft studios filled with hipster gear and Blue Bottle Coffee.

There are a few high-profile "labs" companies, such as Color and Milk, as well as many others, such as Churn Labs (AdmOb founder Omar Hamoui’s new mobile company), Monkey Inferno (Bebo founder Michael Birch’s entrepreneurial vehicle), Tasty Labs (makers of "Jig," a site I really like), RG Labs (building the reputation graph), Nest Labs (which reinvented the home thermostat), and of course, Foursquare Labs. There's everything from the MIT Media Lab (interdisciplinary projects in media) and Dogpatch Labs, an  incubator funded by Polaris Ventures, with “labs” in NYC, SF, Cambridge, Mass. and Dublin, Ireland. (There are many more companies with “labs” in the name, search here for more.)

Why all the "labs" startup companies all of a sudden?

There are a host of reasons. It sounds cool. The language is both inspirational and aspirational. There is a history of carving out these experimental activities within established technology companies, so folks in the community understand the connection and recall their own experiences, either in big tech companies or dating back to school chemistry class. And, it may be easier to find domain names and corresponding social media accounts and username handles with the extra “lab” letters at the end.

These are just surface-level reasons, of course. The deeper trend, especially as it pertains to the consumer web and mobile arenas, is that these shops are being set up similarly to fashion or game design studios. In a game studio, designing just one game can be risky. Instead, these studios work on different concepts on the assumption that they'll learn in the process and (hopefully) increase the likelihood of developing a hit among different projects.

Not everyone welcomes this trend. Some people in the startup community feel that the “labs” concept comes at the expense of company focus and clarity of mission, or that a series of “smaller experiments” could adversely affect employee morale, consumer loyalty, recruitment, and equity considerations. While some of these “labs” may not resemble how companies like Apple or HP started with grander visions, the spirit of experimentation is still there, just in very different forms.

Regardless of whether or not a startup has the word “lab” on its doorfront or legal documents, all new companies are sort of lab experiments in and of themselves and carry similar risks irrespective of semantics. At the current moment, and perhaps for the next few years, a good chunk of mobile tech and design talent is concentrated in these little pockets that morph into labs companies.

Investors are keen to be involved here. It’s a different kind of gamble, but in the mobile app world, the skills are very specific and in short supply. And with all the competition in the various app stores, it’s nearly impossible to predict if a new product launch will flop like Color’s first release did or hopefully explode (in a good way) like Instagram. Furthermore, many of these founders and employees at “labs” companies could be very valuable to more mature startups or larger tech companies, so by creating their own shops, they have amplified this scarcity and created extra leverage in future M&A considerations.

In this vein, I believe the first release from Milk, an app called Oink, will be something we’ll look back on as a case study. Milk has a small team of seven. The founder is experienced and influential (Kevin Rose). Its angel investors are stars, yet it raised a modest sum. Its overarching mission is to develop mobile applications, and it’s first release, Oink, which was shipped in six months and is beautifully designed (though quite a bit of work), is meant to encourage users to rate things inside places. Given these factors, it had everything an app shop could dream of. As a result, Oink has been downloaded, used, and talked about often in tech circles, though we will just have to wait and see how usage fares as the Milk team tries to get broader adoption or ultimately moves on to the next project.

At the end of the day, however, simply labeling a company a “lab” just boils down to semantics. It really doesn’t matter.

What does matter is how these smaller companies are forming around talent that the rest of the community can’t seem to recruit because there are stronger incentives for them to go down the “labs” path. This is rational, and I’d argue, a good thing for the time being. Until more and more people amass and perfect these engineering and design skills for application development, we need the current crop of those who do to start building the next generation of products and services on their own, free of the trappings of operating within a larger company.

Just how this process unfolds, however, will remain a mystery. Startup “labs” could define a goal right upfront that is well-scoped, or they could just collect the best talent and wing it. There’s really no way for us to know what the best way forward is.

While we knew better than to mix dangerous chemicals in the school laboratory, creating a breakthrough product today requires real experimentation and a certain level of disrespect for the rules and conventions, the type of experimentation outside of the traditional “lab” environment that encourages entrepreneurs do totally random things–like mix mint-flavored Mentos with Diet Coke, as in the picture above–hopefully with dramatic results.

Photo Credit: Flickr / puuikibeach

The Lean Finance Model Of Venture Capital

Posted: 04 Dec 2011 12:35 AM PST

Lean finance model

The venture capital industry is going through a ton of disruptions lately. One of the better explanations I’ve heard recently of what is going on comes from Duncan Davidson, a managing partner at Bullpen Capital who gave a great talk on the subject at TechCrunch Tokyo last week. I interviewed him backstage on video, where he summarized his views.

Just as there are now legions of “lean startups” which require less capital to build a product, Davidson argues that a “lean finance model” is also needed. “We are in the era of cheap. The whole concept is keep the company as lean as possible until the company validates its market, then you shovel the money in.”

Tech startups don’t need $5 million A rounds when $2 million to $3 million will do. So A rounds now get bypassed until a company proves itself and then you see these huge later-stage rounds. Or sometimes the startup gets sold for $30 million to $50 million, which is okay, since it didn’t have to grow into a huge valuation to begin with.

In this view, we are not really seeing a Series A Crunch (where the growing number of seed-funded companies are failing to find series A money). Rather, they are getting smaller amounts to see them through until acquisition or a later mega-round where the big VCs throw their weight around. “I call it a shovel-in round,” he says. “We go under the A.”

He notes that now half of all of the first institutional money going into startups is now “coming from a new breed of super angels.” This is a dramatic change from just two years ago,when less than 10 percent of the money was coming from super angels (see slide below).

The big-name VCs will still do okay. In the first half of this year, 7 top-tier firms commanded 80 percent of all the money going to venture capital. It’s the middle tier firms that are scrambling for survival.

Tonchidot CEO Talks 3M Downloads, Augmented Reality, And New App

Posted: 03 Dec 2011 10:19 PM PST

Iguchi TC Tokyo

When I was in Japan earlier this week, I ran into Tonchidot CEO Takahito Iguchi at the TechCrunch Tokyo conference and dragged him back to my makeshift studio for an impromptu interview about the state of augmented reality and mobile apps. Tonchidot launched its Sekai Camera app at TechCrunch50 in 2008 before anyone really believed that augmented reality apps were possible. They were the crowd favorite.

In the video above Iguchi tells me that Sekai Camera has been downloaded 3 million times (mostly in Japan), and the AR app can add data from any partner as an overlay through its API. With Sekai camera, you look through your phone’s camera, and floating icons indicate place information, deals, photos, among other things. It is also an AR platform for social games.

Iguchi thinks he can improve the experience with better data and image-matching technology. One way he plans on collecting better data in the form of user-uploaded photos is a new photo-sharing app he is working on codenamed Peek-and-Poke. He showed it to me backstage. It is a cross between Batch and the original Color in that it makes it easy to create and share photo albums with other people at the same event or location. But Iguchi is more interested in how he can use those photos to augment his augmented-reality app.

A List Of Startups Goldman Sachs Thinks Will Most Likely IPO

Posted: 03 Dec 2011 08:52 PM PST

Screen Shot 2011-12-03 at 8.43.44 PM

Very very quietly (there is almost no Google footprint), investment bank and securities firm Goldman Sachs held its “Private Internet Company Conference” this week in Las Vegas. During the two-day conference, which lasted from November 29-30th, a gaggle of companies presented their business models to an elite audience composed of bankers, investors and peers.

Attendees listened to talks given by A16Z‘s Marc Andreessen and Square’s Keith Rabois (who gave the keynote on Tuesday night). SV Angel’s Ron Conway was also there, being himself. All in all the experience was very, very fun I heard. Makes sense.

So why hold a conference for early stage companies if you’re an IPO underwriter? Well, the event basically functions as an extremely foresighted form of lead generation. According to multiple people I spoke to, these are the 30 or so startups Goldman has designated as potential IPO candidates. And it wants to make a relationship as early on as possible, in case some of them actually do and need Goldman’s services in the process.

So who are these white-hot startups then? Well here you go! (I might be missing one or two, so if you’re on this list or know of someone who should be on this list, please email me and I will put you/them on if your story checks out.)

In alphabetical order:

  • Airbnb
  • Beachmint
  • Beauchamp
  • Birchbox
  • Bluekai
  • Badoo
  • BOKU
  • BranchOut
  • Cloudflare
  • DropBox
  • Eventbrite
  • Gogobot
  • Hipmunk
  • Instagram
  • Jawbone
  • Klout
  • Narrative Science
  • Ness computing
  • Pinterest
  • One Kings Lane
  • Peixe Urbano
  • Polyvore
  • Quantcast
  • Quora
  • Rent The Runway
  • Rue la la
  • Rovio
  • Shopkick
  • Specific Media
  • Survey Monkey
  • Square
  • TrialPay
  • Trunk Club
  • Tumblr
  • Uber
  • Warby Parker
  • WePay
  • Xoom
  • ZocDoc
  • Zoosk

Each startup presented for 30 min to an audience of about 60-80, except for the four or so smaller ones like Gogobot, who presented to all 500 people for 15 minutes. Goldman did a great job of curating the overall list, even though I would have added Spotify to the mix.

But that’s just me.

Update: Screencaps of the full agenda, below. Rumor has that Dropbox was held to be the most likely IPO candidate, by a consensus of conference chatter. And making the list for the Dropbox/IVP party on Tuesday night was a big deal, I’m hearing.

Top image via: Greekshares

Joe Stump And Graham Blache Launch Sprintly, Project Management Streamlined

Posted: 03 Dec 2011 08:21 PM PST

Sprintly logo

It’s been only a month since SimpleGeo co-founder Joe Stump left his last company, following its acquisition by Urban Airship, but he’s already launching a new product (and company) today called Sprintly. The company was actually founded in March by Stump’s co-founder Graham Blache, and Stump tells me he’s “been plotting this product for nearly a decade.”  The startup is completely bootstrapped so far.

Sprintly is a simple project management tool that is built for both software developers and other people in a company who rely on them. It is designed to remove the frustrations developers have with working in their own silo.

Traditionally, programmers use bug tracking tools and the own product-management systems, only to be bugged incessantly by non-engineers about the status of new features or fixes. Sprintly gives the non-programmers a top-level view into what the engineers are doing and how far along they are. For the developers themselves, it gives them a drag-and-drop way for keeping track of projects.

The approach reminds my of Trello, a project management service Joel Spolsky launched last September at Disrupt SF. The video demo below gives an overview of the service, which $9 per user per month after a one-month free trial.

Spare Me From “Product Guys”

Posted: 03 Dec 2011 06:53 PM PST

product douche

Editor’s note: Guest contributor Aaron Harris is a co-founder of Tutorspree, the marketplace for tutoring. Follow him @harris, or take a lesson from him on Tutorspree.

We’re seeing people move away from finance and law and towards a culture of building things. It’s great to see more people seek careers in technology. The problem, I find, is that so many people approach the transition poorly. The first, and I suppose seemingly easiest claim and means to justify your place in the startup world, as someone who has no experience, is to call yourself a product person.

But that claim generally comes with a fundamental misunderstanding of what it means to do product. It is not code for a person who doesn’t really know how to do anything but thinks he can boss engineers around. It doesn’t refer to marketing guys who had an idea. Understanding what it means to drive a product means understanding the full scope of the vision of your company. It means understanding your engineering team, their capabilities, and their priorities. It means understanding what your next move is, and what your 6th move is from every angle.

And here’s my dark secret—a year and a half ago, I was sort of one of those “product guys.” I was still working in finance. I had big ideas, but had never managed product at a tech company. I’m sure I said a lot of dumb things, and there are definitely people who thought I was a schmuck. But, I had managed product for a group of 30 at the fund I worked for—so I had a sense of how to work with developers. I had known how to code at one point in my life (well, AP CS style, anyway). And, I think most importantly, I was very well aware of how ignorant I was (and, to be fair, still am).

When I decided I wanted to lead product, I went and talked to friends who were product managers. If you don’t have friends that are PMs, try to stalk one on Quora until you can get a meeting. Make sure you have the questions you need to ask ahead of time. Pick their brains about what they read, how they think about feature design relative to user needs/wants/haven’t even thought abouts.

Realistically speaking, there are certain people who will never be able to lead product of any kind. But there are also people who might be able to do it, if they worked on it, if they put the time and effort ahead of building jargon. So, humbly, here’s a starter guide for learning product (given some prerequisite imagination).

  • Read About Face. It’s big, it’s long, it can read slowly, but you’ll never look at a product in the same way.
  • Read Design of Everyday Things. It will ruin your ability to walk through doors without complaining, but it will drastically improve the way you think about building anything and everything.
  • Read Don’t Make me Think. It’s standard. It’s great. It is a necessary foundation.
  • Learn to code. You don’t have to get good. You don’t necessarily have to remember the particulars of syntax afterwards. But you do need to remember the basics of how ideas become code and then become product. You have to understand why engineers work the way they do, why they love the puzzles that fascinate them. You need to have a basic understanding of what can and cannot be done easily. There are a lot of tools that can help you. I’d recommend starting with the very awesome Codecademy, and then moving on to a Computer Science Tutor.
  • Keep reading blogs like Steve Blank’sMarc Andreesen’s, and Paul Graham’s essays. Not all of them will strictly be about product, but they will help you learn to think.
  • Ask questions of anyone and everyone with more experience than you. Keep asking them until your comfortable, and then find the things that you don’t know and ask more questions.
  • Build.
  • Screw Up.
  • Build.

Even with this as a starting point, you’re never guaranteed to become great at product. But, doing this, I got a little bit better every day. More importantly, I was able to earn the trust of my co-founders Josh and Ryan that I’d make the best decisions I was able, and take the criticism when I screwed up.

So, “product guys:” nobody is going to believe you or take you seriously until you prove it. If you start talking about mobile local social software as a service (MOLASSES), you will be laughed out of the room. You are not, fundamentally, a product person until you actually build products. In order to get to the point where you can build products, you need to do a hell of a lot of work, and you need to iterate on your own knowledge.

You will need to understand that you are not the boss of an engineer, or superior to an engineer, simply because you think you have vision. If you are lucky, you will become a partner to a great engineer (or teams of them). You will be a member of a team where everyone has a valid say, but the decision will ultimately be yours. Your view won’t win out just because you talk louder or faster—it will win if it’s the right thing and you can back it up with logic, with experience, and with numbers.

So if you want to get into technology and don’t code, if you think you have a knack for product and a killer idea, start reading and learning. Then convince an engineer, as an equal, without blustering. Until you get there, you just have an idea. That’s nice, but it’s the very first step in a long road.

Photo credit: Shutterstock/Paffy

SAP Will Buy SuccessFactors For $3.4 Billion

Posted: 03 Dec 2011 05:00 PM PST

Screen Shot 2011-12-03 at 4.56.22 PM

In what is perhaps the most boring piece of tech news to come out of this week, German software giant SAP has today announced that it will buy the US-based SuccessFactors, a company that “helps organizations align strategy with objectives and manage people performance to ensure execution & results,” IN THE CLOUD, OF COURSE.

I think this means that it provides enterprise software for human resources, but you can never be too sure with these incredibly dull companies. I am too bored to Google it. In fact, I am literally bored to tears writing this, like I am seriously crying here in my local coffee shop and everyone is looking at me weird and I just want to show them this press release so they’ll understand or something.

The deal is all cash, at $40 a share (a $3.4 billion valuation) and will most likely close early next year.

If you are actually interested in finding out more, or having trouble sleeping and need something to push you over the edge, SAP will be holding a conference call on Monday, December 5th, at 3:00 pm CET / 9:00 am EST where you can learn details about the transaction.



Posted: 03 Dec 2011 11:11 AM PST


Your phone might be spying on you. The many cameras you pass every day can recognize your face. Facebook, despite its grudging concessions, still wants you to broadcast your personal life. “Eye in the sky” drones are already watching over borders; next, they’ll patrol the Olympics. It won’t be long before police drones are omnipresent in the skies over every major city, and then every town. Welcome to the 21st century. Smile! You’re probably on TV.

Especially if you live in the kind of repressive state that imprisons its citizens without trial. (You know, like America, if the US Senate has its way.) According to both Wikileaks and that well-known bastion of the left wing The Wall Street Journal, such regimes have been buying up Western-made high-tech surveillance systems like business travellers on unlimited expense accounts. To quote the former, “companies are making billions selling sophisticated tracking tools to government buyers, flouting export rules, and turning a blind eye to dictatorial regimes that abuse human rights.”

Which kind of puts Facebook privacy violations in perspective, so I’m not going to bash Mark Zuckerberg, for once. The guy probably genuinely believes in the merits of a transparency society where everybody’s life is essentially on display all the time. Or even if he doesn’t, he figures that our ever-doubling tech level means we’re inevitably heading there anyways, so he may as well make a few dozen billion dollars from that sea change while he’s at it. Fair enough.

But a transparent society can’t work if it’s built out of one-way glass. The powers that be are thrilled by the prospect of using all this new surveillance tech to keep an eye on the unruly masses, but they seem much less excited about its effect on their own privacy. The Occupy movement (which, you may recall, I have mixed emotions about) can cite a whole bunch of examples of protestors arrested or shot with rubber bullets for the sin of photographing police, and of the police expelling and restricting media from the evictions in NYC and LA.

Wil Wheaton
Dear Media: When the police tell you to leave IS WHEN YOU STAY. You're supposed to be a check on this kind of power!

Earlier this year the chief minister of India’s Kerala state had a webcam installed in his office. A cheap gimmick, yes, but a powerful symbol. If we’re headed into a world where everything becomes public, so be it–but shouldn’t the first people to surrender their privacy be those in authority?

This is partly an economic issue: if Greece hadn’t lied about its finances for many years, the euro wouldn’t be in quite as parlous a state right now. But mostly it’s a moral one. Why aren’t police, border guards, and the TSA required to carry always-on shoulder cameras while on duty, so that the data recorded can be used in court and subjected to Freedom Of Information requests? Why are vague, unsubstantiated “security reasons” always enough to close doors, shut events, squelch protests, fence off areas from the public, and harass photographers and the media, when more surveillance is supposed to make us more secure?

The answer, of course, is that security is only rarely the real issue. Two-way surveillance, the much-touted transparent society, is about the complex dynamic between the relative merits of privacy and public information–and they do both have their merits. But one-way surveillance is all about raw naked power. It worries me that the powers that be all seem to be touting the former while actually trying to implement the latter.

Image credit: zigazou76, Flickr.

Gillmor Gang 12.3.11 (TCTV)

Posted: 03 Dec 2011 10:00 AM PST

Gillmore Gang test pattern

The Gillmor Gang — Robert Scoble, John Borthwick, John Taschek, Kevin Marks, and Steve Gillmor — gears up for a rough and tumble Social Shakedown. Facebook, Path (?), Gmail filters,, Media Redefined — we’re swimming in signal without a paddle. But some of us (@scobleizer) are happy to see the big get personal and the little get better.

Whether you live to serve the social beast, or prefer to stand back and see how big this is going to get, it really doesn’t matter whether this is early innings as @jtaschek and @borthwick suggest or reaching an @mention moment as @stevegillmor expects. The culture of business and the politics of the personal have swapped personalities, and work and play are meeting up in the middle.

@stevegillmor, @borthwick, @scoblizer, @kevinmarks, @jtaschek

Produced and directed by Tina Chase Gillmor. recorded live Friday, December 2, 2011.

The Web Is Rewarding Greed and Bad Behavior (Business As Usual)

Posted: 03 Dec 2011 09:47 AM PST


Editor's note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo.  Follow him @ashkan.

The world wide web prospered and is what it is today because its inventor Tim Berners-Lee didn’t give into temptation and greed and chose not to patent his invention.  But 20 years later, it's evident that the only thing that most online leaders lead in is plain bad behavior and greed.

Business as Usual

Right off the bat, I'll admit that this means that the web is no different than business in general, where corporations aren't exactly boy scouts.  But given the openness of the web, rise of social media, and the expectation of the democratization of society and economy through the web, it's surprising that we find ourselves in the situation that we do.

The Web has Always Spawned Evil

We've seen nasty operators before: WhenU and Gator Corp. (then GAIN, subsequently Claria Corporation) were the poster children for bad behavior.  Critics of these companies accused them of peddling adware and spyware, allegedly hijacking computers and serving ads to unsuspecting and unwilling viewers.  Worse even, oftentimes the adware would "take over" a publisher's own ads and cover them with ads being served – and enriching – WhenU and Gator.

I recall having one exchange with a WhenU executive when I ran sales for an online publisher and wondering how on earth their practice was allowed.  But the fact that the practice was allowed made it inevitable that someone would seek to profit from it.

Meanwhile, despite their unpopular reputation, Claria Corporation actually received backing from major Venture Capital firms such as Greylock, Technology Crossover Ventures, and U.S. Venture Partners. Claria even filed for a $150 million IPO in April 2004 but withdrew the filing in August 2004.  It shut down in 2008 after exiting the adware business at the end of the second quarter of 2006.  Good riddance.  For what it's worth, many of Claria's executives have gone on to other companies including DemandMedia, Dotomi, eHarmony, LifeStreet, and Turn according to the company's Wikipedia page.

WhenU seems to be around to this day, with the totally disingenuous tagline: "Advertising You Want".  Really?

I'm actually not attacking either Claria or WhenU, though. As they say: "Don't hate the player, hate the game", and the game is obvious:

Build something fast and sell it to a greater fool, and then let them worry about cleaning up the mess once they realize the insane lengths the previous management went to boost revenues that were probably not all that sustainable.

The Web’s downward spiral

It's easy to cast Claria and WhenU as vestiges of an era when online advertising was rising from the ashes of the dotcom meltdown and forced companies to push the limits for survival.

Bull-effin-shit.  We are seeing more questionable practices today than ever before, but I would argue that users are largely desensitized or don't care, apart from a vocal minority that makes a big deal out of everything. Most web companies today aren’t as evil as WhenU or Claria, but some of the same greed propels them.

And the Award for poster child for bad behavior goes to…

These days, the poster child for aggressive tactics is Zynga CEO Mark Pincus.  Yes, what he said in front of an audience regarding Zynga's early sales practices is dubious, and his effort to get early employees to give up unvested stock is questionable (to put it mildly), the fact is, with an expected  valuation of $10 billion in the upcoming IPO, and backers including Fred Wilson, John Doerr and Bing Gordon, it's kinda hard to knock Pincus.  In fact, while I certainly don't want to make any excuses for him, even simply reading his LinkedIn profile (read his description of his experience at FreeLoader) suggests a certain naiveté and idealism that was crushed by earlier episodes at Tribe and lord-knows-where-else that pushed him to basically use the rules of "the game" to his advantage.

At the end of the day, Zynga is a company that makes products that millions love and willingly pay (how many consumer web companies can say that?) and no one is forced to actually work there.

Facebook: All of Your Privacy Are Belong To Us

In fact, everywhere you look it seems that it's easier to "ask for forgiveness than permission".  The master at that, is none other than Facebook founder Mark Zuckerberg.

Facebook is being rewarded by investors, who have pushed the company's private stock to roughly $70 billion.  With a rumored IPO set for April 2012 valuing the company at $100 billion, that would be a revenue-to-sales multiple far larger than what Google got in 2003.  Google was generating $6 billion in revenues and went public at approximately $25 billion; Facebook boasts the same $6 billion but is fetching $100 billion.

Google's Do No Evil (?)

And speaking of Google, I will admit that the company does plenty of good.  Its products have made life simpler for billions, but cynics accuse Google of being the 21st century equivalent of Standard Oil and Microsoft.  With 45% of the online advertising pie, that is not an unfair accusation considering that its strength in search, mobile and video will only amplify in years to come.

Nothing Ventured, Nothing Gained

When someone like Max Levchin says that there are "too many incubators" and implies that investors are shunning risk and chasing me-too companies, I agree.  But the problem is: his previous company Slide exemplified what I consider to be half of the largest problem facing the community: smart and driven entrepreneurs who chase small trivial markets and products instead of tackling the large problems that previous generations did.

Of course, the other half of the problem is that the bulk of today's generation of VCs, by and large, lack the testicular fortitude and vision that the previous generation did.  With the new mindset of "failing fast" and focus on "the art of the pivot", the reality is that many would-be promising companies are being sacrificed and prematurely killed in order to chase the latest fad that could be flipped to the next sucker.

When it's said and done, the web isn't all that different from the rest of the business world, but I guess I expected more.

Image: Shutterstock/docent

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