Archives for 2004

iBreakfast: 3 WISE PEOPLE — Investors & Visionaries Wrap Up the Year For Us

My notes from this morning’s iBreakfast: 3 WISE PEOPLE — Investors & Visionaries Wrap Up the Year For Us

Tue. Dec. 21, 100 Park Ave., with:
Esther Dyson, Editor, Release 1.0, CNET Networks
Howard Morgan, V. Chairman, Idealab
Stephen Brotman, Silicon Alley Venture Partners

“Every year, we look for direction and understanding from the industry sages. This year, we ask the people who have launched dozens of new companies about the past year — and their investment outlook at a time when the industry seems to be growing again. “

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Esther Dyson, Release 1.0 at CNET, has devoted her life to discovering the inevitable and promoting the possible. As an active investor and commentator, she focuses on emerging technologies and business models (peer-to-peer, artificial intelligence, the Internet, wireless applications), emerging markets and emerging companies.

COMMENTS

+ A lot of tech spending will be useless; it’s hygiene (E.G., SarBox) not new services.

+ Social networking is going to morph again
She’s now working on attention.xml, a would-be standard for expressing how many people read your blog, how many people looked at your photo.
Social networking is a functionality that will go into other services

+ Physical world has been very separate from the IT world, but that will change. RFID and other technologies will change that. Our big challenge will be filtering, not collecting (just as we have this problem with email).

+ Huge changes in how healthcare works. We’re thinking about healthcare in an innumerate way. Currently, incentives misaligned, and risks not adjusted properly.

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Dr. Howard Morgan, Idealab, began working with Idealab in 1997 and began serving as Vice Chairman in early 2000. Howard is also President and Founder of the Arca Group, Inc., a consulting and venture capital investment firm specializing in the areas of computer and communications technologies. He has more than 25 years of experience with more than thirty high-tech entrepreneurial ventures.

COMMENTS

Josh Koppelman (half.com) and Morgan created his new VC
MyPublisher (one of their portfolio companies) lets you convert online content to offline. TurnTide was a recent success for them.

Trends:

Big getting bigger (Oracle/Peoplesoft, etc.)

VOIP is real.
He’s used VOIP for 3 years and only got one complaint about voice quality.
Soon you’ll be able to call someone on a website just by clicking on it.
Next phase : Video over IP
US is last country in the world to get into thumb messaging. This will become bigger, particularly for gaming/dating.

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Stephen Brotman founded Silicon Alley Venture Partners in 1998. The fund’s institutional investors control over $2 billion in venture capital and include TL Ventures, a Safeguard affiliate, TD Capital and the principles of Draper Fisher Jurvetson and Boston Millennium.

COMMENTS

Good news: wisdom is part pattern recognition and part experience. You have to find opportunities that are patently obvious but yet have a contrarian perspective.
When consolidation happens, it’s not a great place to innovate.
The new paradigm is about corporate dropouts, it’s not about university research. Why? Because the tech world has become corporate.
Capital intensity is much lower now.
To start a tech-enabled business, very easy.
Value of R&D is lower (it’s all in Russia, India); the value is in servicing, design.
The older technologies we described start from zero every quarter. IT services have much more recurring revenues.

For all these reasons, Brotman thinks that the tristate area will generate tremendous opportunities.

20% of Fortune 500 is in tristate area.
590,000 tech workers in tristate area: applied technology people. They write scripts, customize, etc. Many use other peoples’ products, as opposed to using new products.
170,000 tech workers in silicon valley—more coders, etc.
The people in the tristate area are the new paradigm.
SAVP’s portfolio are customer-intimate; they know their industry.
Big customers in CA (Intel, etc.) are very different than big customers in NY (JP Morgan)

In general, 62% of venture capital goes to services businesses
In SF bay area/MA, it’s only 16-17%

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Q&A
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Rick Bruner, DoubleClick
Where will the growth be? What should a 19-year-old study?

Dyson:
The only place with less growth than the US will be Western Europe
To get rich, go to another country.

Howard Morgan:
“History doesn’t repeat itself, but it rhymes”
The rhyme for next 20 years will be biotech/bioinformatics.
PartSearch now outsources for Best Buy, Radio Shack, 13 major chains. $50M revenues next year.
“Rap is universal because you have to have music that annoys your parents.”

Teten: How will social neworking becoming a functionality?
Dyson: People doing other things will incorporate this functionality. For example, she likes Flickr (in which she’s an investor) which allows you to see who else likes the same topics to photograph that you do. She likes Visible Path (in which she’s an investor), which uses social networks for a clear purpose, as opposed to simply doing it for its own sake.

Brotman: open source is end-of-lifecycle for core technologies.
Dyson: It’s also leading edge of pricing shift.
As an investor, focus on the person not the model.

Brotman: they just invested in Critical Mention, which analyzes TV content

Another trend: make customer serve himself
IBM was losing $200M/year on its PC business; it was a good deal for them to sell.

Dyson: ‘online music’ is like ‘electricity-based lighting’—it’s not a separate category.

Morgan: There are 70M cities in China with >1 million people. Those are natural places for social network software.

Profile of Stewart Group Associates for our Online Network Site Guide

We are adding this profile of Stewart Group Associates to our Social Network Site Guide:

Stewart Group Associates

Website:

www.stewartgroupassociates.com

Summary:

Stewart Group Associates serves the networking needs of senior executives and helps executives find new professional roles.

Membership:

The group consists of approximately 400 senior level executives. Most are CXO-level people; about half are employed, about half are in transition. The group is 100% virtual; it does not have meetings.

Minimum requirements for entry are: CEO, COO, President title with P&L responsibility for at least $10 million in revenue. CFO, CIO, CMO, CTO, etc. and VP level candidates have worked for companies in the $150 million revenue range. All candidates should have attained an annual base compensation in the $175,000 range. Candidates submit resumes; complete information worksheets, and are interviewed by phone. Candidates begin the process by emailing a resume and requesting membership.

Members are located in North America, Western Europe, Australia, Japan, etc. Members include CEOs, Presidents, COOs, GMs, and Managing Director level executives. Other senior level titles include CFO, CIO, CTO, CMO, GM, VP Operations, VP Sales/Marketing, VP/HR, VP/Finance, etc.

Launched:

January 2003

Founder:

Jim Stewart, Founder and CEO. Stewart’s experience includes serving as CEO for durable goods manufacturing companies in the automotive, appliance, and building products industries. His most recent role was as President and CEO of a $20 million revenue custom injection molding business.

Corporate Overview:

Stewart Group Associates is 100% owned by Jim Stewart.

Fees:

Basic membership: $150 for the first year and $75 annual renewal

Services include:

– Job Leads

Established Networking Process

Consulting/Interim/Contract Opportunities

Acquisition Funding

Relationship Building

Description:

SGA is a virtual networking group for senior level executives. The network serves as a conduit between executives and private equity groups, search professionals, consultants, and hiring authorities. The group is committed to sharing job leads, career information, and referrals that are related to job search and career development. The primary benefit of membership is the opportunity to network with other CXO and senior management level executives willing to share information on the “hidden job market” and introductions to people they know. A secondary benefit is the opportunity to build relationships with equity investors, search professionals, and consultants.

Notes:

All communication is centralized through Jim Stewart. This is obviously a non-scaleable model. However, it has the advantage of creating a more intimate feel in the group.

Recommendation:

If you meet the barriers for entry, you may want to consider joining this group. As a general principle, the harder a group is to enter, the more valuable it is. The Stewart Group is consistent with that principle.

Disclosures:

David Teten is a member of Stewart Group Associates.

Contact:

Jim Stewart

Dallas, Texas

Office: (972) 934-3869

jmstewart49 at sbcglobal.net

How to Maximize the Value of Your Time in Business School

I gave a talk to NYU’s Stern Scholars on Dec. 9 on “How to Maximize the Value of Your Time in Business School”. (Thank you to Ken Wee for coordinating the event!) Among the topics I covered: career planning, building a school-based network, time optimization, and selective short-term learning programs and scholarships. I based this speech on interviews I conducted of recent graduates from leading business schools, asking them, “What would you have done differently? What is your advice for someone just starting your program”.

You can download the slides here in PDF: How to Squeeze Maximum Value from Your Education. This speech is also available as a 22-page white paper for $5.00.

Of course, I would welcome feedback on this presentation!

What's the Buzz About Buzz Marketing?

from Knowledge @ Wharton

“There’s a new marketing catchphrase that’s getting rave word-of-mouth reviews. From articles in the popular press to conversations in the classroom, huge companies to boutique marketing firms, suddenly it seems you can’t talk about new products without addressing ‘buzz marketing.’ “People are buzzing about buzzing,” says Wharton marketing professor Barbara Kahn who adds, along with others, that word-of-mouth marketing has long been recognized as a way to influence consumer behavior. What’s new about buzz marketing is the structure and hype surrounding it and the attempts to measure its effectiveness on sales.


http://knowledge.wharton.upenn.edu/article/1105.cfm

You know that a phenomenon is developing legs when it develops not just one but two trade associations. Check out the Word of Mouth Marketing Association (founded and chaired by Andy Sernovitz) and the Viral + Buzz Marketing Association.

Spoke has a new CEO: Frank Vaculin

Spoke Software Appoints Frank A. Vaculin as President and CEO. For background, see our comments on Spoke’s strategy.

Caves, Clusters, and Weak Ties: The Six Degrees World of Inventors

Lee Fleming, Lumry Family Associate Professor of Business Administration in the Technology and Operations Management Unit at Harvard Business School, summarizes some research on the importance of weak ties and networks for promoting innovation. My key takeaways from the article:

– Fleming says, “Inventors in regions are becoming more connected. By the end of the ’90s, half of the patented inventors in Silicon Valley could trace an indirect collaborative path to one another.” I suggest that online networks are a key reason for that pattern.
– Non-compete covenants have a very deleterious effect on the spread of knowledge. Compare CA’s economic growth vs. MA’s.

Flex Power (washingtonpost.com)

This is a fascinating article on the social networks of some individuals in the current US administration. It also gives a feeling for how the NGO, private sector, and government power networks all inter-relate.

Flex Power: A Capital Way to Gain Clout, Inside and Out (washingtonpost.com)

– via Valdis Krebs

E-Dating Bubble Springs a Leak

I agree with the New York Times that the The >E-Dating Bubble Has Sprung a Leak…but that doesn’t detract from the fact that online dating, and eventually online business networking, have become mainstream and normative.

“In a sense, the fate of online dating is probably a bit like that of singles bars. There are still singles, and there are still singles in bars. But the “singles bar” that caused such a frisson became a relic of the “Looking for Mr. Goodbar” 1970’s. It became ordinary.

That is probably one reason that online dating seems to have lost its buzz among its own Generation 1.0. “In the last five years, it’s become so mainstream,” said Sherrie Schneider, an author of “The Rules for Online Dating” (Pocket Books, 2002), who remains a great champion of the practice. “It’s your boss. It’s your co-worker. Every single woman in my neighborhood is on Match.com. It’s like brushing your teeth.”

Getting your books from the cheapest Amazon

There are six international Amazon stores. You may think that ordering from the nearest Amazon would be cheaper, but it isn’t in many cases.

This is what you get when you search on Pricenoia:

* We search for the price of a single book in every store in its local currency
* We show you all the prices in the same currency, daily updated (Euro for europeans, USDollar for the rest of the world), to catch the differences in a easy way,
* We add the shipping fares (the cheapest shipping available to your country from each store)
* We show the total amount
* We redirect you to book in the site you select. “

Even if there is a local Amazon store in your country, it can be cheaper to order abroad.

What I’d love to learn more about is the note on their site that says, “in association with Amazon.” The site doesn’t explain exactly what their relationship is. If Pricenoia reduces the tax revenue for some European countries, or the publishing revenues for some US academic publishers, Bezos will likely get some angry phone calls. However, a freer market is definitely better for the consumer!

The Social Life of Paper

For some historical perspective on why wikis and other workplace social software have significant limitations, see The Social Life of Paper. I’m curious to see if the Socialtext’s of the world can surmount the significant obstacles discussed in Malcolm Gladwell’s piece. Feedback welcome.