Monthly Archives: February 2007

How Long is a Piece of String Valuation Theory and The Crash to End all Tremors.

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Posted by Ben Barren on February 28, 2007 – 10:55 pm
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paris bentley
Originally uploaded by benbarren.

Caught up with some of the crew last night @ Bot : The Investment Banker; The Corporate Strategist; The Podcaster and Myself. There is definitely a joke in there somewhere. One of the topics was market correction (3-10%) and impact on the 2.0 space.

Turning on Ch 2 when I got home, a 65 yr old analyst mentioned 1987 parallels, in which there was a tremor a few months before the big crash. A focus on fundamental value, making money and growth are 3 very basic principles to protect one’s business from those who will enjoy a perceived down market to ratchet down valuations and enforce more restrictive terms sheet.

If Web 2.0 is a google aftermarket as Dave Winer said, and I dont disagree with that, then Google is the public market proxy for Web 2.0 and if google was hit 15-20% that would definitely hit. Although locally with the bubble only just beginning to come back, it would be disappointing if it popped before forming :) I think everything will be fine : nothing could be worse than the last crash ! Oh, and I got thru the 2 series of Deadwood (24 eps X 56 mins each…) now i just need series 3…

Internet Outsider : “For the past few years, meanwhile, Internet entrepreneurs have become ever more brazen about not needing a business model in order to cash out big (and who can blame them, given the bounteous rewards that have gone to Google, MySpace, YouTube, and dozens of other companies that postponed revenue for as long as possible–not to mention the vast amounts of venture capital that keep pouring into the sector?). This is reminiscent of the late 90s, when all that was needed (apparently) was a business plan.”

Al Swearengen: In life you have to do a lot of things you don’t fucking want to do. Many times, that’s what the fuck life is… one vile fucking task after another.

"So How Long Would it Take for (Public Company X) to Replicate What You Have Built ?"

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Posted by Ben Barren on February 27, 2007 – 4:38 pm
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Enterprise Two
Originally uploaded by benbarren.

Aint this the truth; Ask the Wizard - “I cannot tell you how many times since we first launched FeedBurner I have heard the following comments from senior executives at large companies, industry pundits, hobbyists, and my five year old son: “We could build FeedBurner in [a weekend, three months with three people, whenever we wanted]“. When you have hidden barriers to entry, you don’t get too worked up about these kinds of comments because you know there are lots of pitfalls and issues and challenges that you don’t understand fully until you are far enough along in development that you stumble into them and think “oh wow, now what do we do”.

I’m regularly asked similar questions, as do most entrepreneurs in these types of businesses. Having spent enough time in large online co’s to know how new product development and tech platforms work, the real question is how long it takes LargeCo to go from A What They Have (ie nothing in designated space x) to B (what they perceive u have.) In LargeCo it’s always hard to go from good .ppt idea to working live approved project. To get through the board, management, functional heads, politics, tech team and so on.

My experience of new product development in the majors (at least locally, which is underweight in engineers and new products) it takes 12 months usually more, with more time in planning and approval than in tech development hours. The best ideas also never make it. You also can’t go back in time. So playing catchup is alot harder than starting out in front, but then you can be too early and prove that the opportunity is not big enough.

A standalone product also does not need to take into account legacy systems, billing, CRM, and a whole raft of issues startups don’t even look at. (this is also often why acquisitions get run as standalone businesses for so long and integration often doesn’t happen or when it does, it pretty much means everything was rebuilt)

In different acquisition cases, the technology is what is of interest, in others the audience, and then there is the management team. Often it’s all three. (flickr would be a good example of this) The Pingdom survey of 7 major sites technology back-end was interesting in the commonality between sites and trends;

“As could have been guessed, LAMP (Linux, Apache, MySQL and PHP) is by far the most common setup of the surveyed websites. The dominance is far from total, though, and the elements of LAMP are all challenged by alternatives that are growing in popularity.”

Penguin the most popular server animal
Apache serves the most pages
MySQL dominates the databases
PHP rules server-side scripting
Clustering for reliability and performance
Going against the grain
- Meebo with Lighttpd
- Alexaholic with Windows, IIS and MS SQL Server
Server-side Java with Apache Tomcat
Different needs = different setups
- TechCrunch has 2 servers
- YouSendIt has 170 file servers split between the U.S. east and west coast just to deliver files.
- Vimeo has 100 content delivery servers for the sole purpose of streaming video.
- Meebo has more than 40 web servers to handle their AJAX-based messaging application
- FeedBurner uses 70 web servers and 15 database servers to, pardon the pun, feed its feeds.

“The greatest challenge was finding the most efficient ways to locate hotspots and bottlenecks in the application,” says Joseph Kottke (FeedBurner.)

Realestate20.wordpress.com Blog.

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Posted by Ben Barren on February 27, 2007 – 1:11 am
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eclassifieds vflyer
Originally uploaded by benbarren.

I mentioned the (Australia) Real Estate 2.0 space yday, but it seems in the US, and I hope not globally, the term is trademarked to Redfin Corporation. I haven’t yet received a cease and desist being in Australia (my blog has no advertising on it thus no commercial asset to go after) The pic I’ve flickrd from vFlyer also nicely summarises the RealEstate 2.0 value chain, which is just starting to infiltrate downunder.

Realestate20.wordpress.com Blog.
“Thanks for your quick response. You may have seen that we had a competition back in April for a new tagline: The winner got $500 and we got the rights to a new tagline, which we trademarked and have been using in commerce since June, 2006. The tagline, Real Estate 2.0, is now a registered trademark of the Redfin Corporation.. While we recognize the right for your blog to exist and look forward to many future posts from a long-overdue blog on new technology real estate sites, we’d like to respectfully ask that you change the name to a term that does not infringe on our mark. Thanks for your understanding and quick action on this.
Eric Heller, Director of Marketing, Redfin.com

I found this email a suitable footnote, while reading about the topical “upload your classifieds” tool vFlyer, profiled in VentureBeat. (which provides freemium tools to home/car/etc sellers wanting to upload their listings onto the major (free) classifieds sites. (which are just entering Australia now, with local vsns like findit.com.au…)

VentureBeat : “It is not competing with classifieds sites. It is forwarding them all traffic, wanting to avoid becoming an actual marketplace destination. (See the chart below for how vFlyer sees the market for classifieds.) Rather, it wants to serve people who want to post ads, and let them do it with as much freedom of expression as possible. With a house ad, you will always have to list the price, and the number of bedrooms and bathrooms. But vFlyer lets you highlight it with different colors and additional photos and links. It makes money when people looking at the flyer, say at Craigslist or Oodle, click on the flyer link for more information. This takes them back to the flyer’s URL at the vFlyer site, where vFlyer presents the viewer with advertising relevant to the product being sold. VFlyer charges a fee for helping you advertise at sites with paid listings. So the question is whether a sufficient number of people adopt vFlyer to let it make money.”

Whose Self Service Advertising Technology Can I Use to Build My Advertiser Base.

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Posted by Ben Barren on February 26, 2007 – 10:34 pm
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2011 Transam
Originally uploaded by benbarren.

A localised version of Quigo.com is the type of publisher driven, credit card taking, adserving integrated solution that is needed in Australia to monetise “The Rest” as Foad@BRW referred to The Tail. Localised white-label ad solutions are a key component to making this all happen. Kewl that they got google to disclose their site revenue splits.

NYT : “Quigo, by contrast, gives advertisers not only the list of specific sites where their ads have appeared but also the opportunity to buy only on specific Web sites or particular pages on those sites. It also allows media company sites like ESPN.com and FoxNews.com a chance to manage their own relationships with advertisers.”

I’d say the Top 50 Social Media/Web 2.0 Sites/Blogs downunder would probably cover the cost and create some really nice upside ie revenue, to cover the quigo licensing/tech integration costs as well as labour overhead to go and sell enough targeted eyeballs to blue-chip advertisers. (there are already players that have a strategy like this in stealth dev btw minus the 2.0 focus) Not every advertiser wants to hear a sales pitch about your website with 20k uniques…. Now 2m uniques they might listen, alot :)

Property.com.au + MyHome.com.au vs Trulia.com + Zillow.com

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Posted by Ben Barren on February 26, 2007 – 12:51 am
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So Australia’s moving into the land of Realestate 2.0 - at least from a user interface point of view - now we have property.com.au from RealEstate and myhome.com.au from PBL. Neither offer the real killer features that have driven global uptake of Trulia and Zillow such as specific home price estimates, added value data about areas or API’s to allow other publishers to create mashups. They do use maps awhole lot better, and there are some neat features such as Watchlists from MyHome.

More tapping into wisdom of the crowds about purchase prices and suburbs, trends would have been nice to see. And some of the design needs to be stripped down a few colours and font sizes. More tools to manage my property purchase would be useful. And if I’m selling a house, sorry. These services have nothing to offer other than some text about selecting a real estate agent. (ala edgeio.com and base.google.com)

The real game esp for myhome is listings, and they dont really have many. Would be nice to see pictures and slideshows done alot better too. (photos on Australian classifieds sites are really bad - in quality, quantity, viewability etc - the whole value chain needs to be fixed.. it’s amazing when u have 2 similar properties or cars (or agents/dealers) that the one with better photos will more likely sell, and sell more.

Newbie warning : I’d also state the obvious that keyword only search boxes then huge mapping based busy search results pages could be worrying to use for the everyday middle market aussie home buyer. Anyway, here is my photographic essay of interesting realestate 2.0 downunder tidbits. I’m off to waste my evening in other ways.

1. HORIZONTAL NAVBARS.

Flickr. The essence of high utility horizontal font, icon, dropdown design

Myhome.com.au - Versus flickr, bloated text. Too much blue. Wrong layout of elements. Gets job done with ajaxy buy/rent tabs. Sell should be deleted (its not dynamic data : ie catalog text. “how to select an agent…” ick. check edgeio.com and google base for how it should be done or can only real estate agents sell on these sites ? what year is it again 1997 ? google will offer local free property listings within 6 months downunder. they already do so globally)

2. HOME PAGE SEARCH BOXES.

Trulia - High utility search box as primary activity with additional guides for newbies and search filters for those that know what they want and are used to such choices.

Property.com.au - Nice enter box google box with suburb clarification drop-down. While I have 100 filters/dropdowns on realestate.com.au search on property.com.au I have only one - keyword. Needs to meet in middle like Trulia and allow me to filter.

3. PROPERTY SEARCH RESULTS

MyHome - Page does not stretch like Trulia, Property hence its slightly limited. Watchlists a great feature even if a gimmick. Mapping blue navigation tool can get annoying, and you cant click on myhome logo to go home. Or any other way. Text search results at bottom too small and marginalised. Still a decent effort even if sneaking suspicion that live.com type ajax is underneath all this.

Trulia - The benchmark on property 2.0 search results pages.

Property.com.au - Nice Page but would prefer search results on left to be a bit wider to incorporate advertiser’s icon and property details. Map is slightly too big and information under it, some of it is not contextual enough to search. Nice scrollover. This page to be used by newbies will need to be heavily explained.

Zillow - Zestimates feature which provides historical est value of properties in area. While such data is not currently used/available/created in Australia, it is an example of how to disrupt a market and get lots of traffic from it. (users could be asked to provide such content, as well as scraping it from blogs.. just because home data doesn’t exist doesnt mean it cant… heck why not just ask another member)

4. PROPERTY PAGE

MyHome - Although you cant click on the icon on the map to view (you need to press view on search result) to view, the presentation of the property is fairly traditional/effective. Fairly standard page.

Property - Really like the mult-tab at top to navigate. No watchlists or other tools here I can use that MyHome has, and photos could be better.

The Most Effective Advertising Medium Since the Invention of the Television.

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Posted by Ben Barren on February 25, 2007 – 9:16 pm
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spider LLo
Originally uploaded by benbarren.

I sometimes miss the traditional ad agency meetings, between new stealth technology company and traditional ad agency execs, acting hip. (most professional services companies, lawyers too, try and “dress/act for the client” which sees some really funny interepretations over time) I did start in an adagency after all. (my title was “new media development” : at 21yrs they didn’t want to append it with “manager”, “executive”, “nobody”; New Media Development Nobody. That’s Me, still hehe.)

So Seek is worth over $2b now because they stuck the vertical course of building brand. By spending the VC dough on acquiring customers and creating positive brand associations. Seek and ye shall find I now associate with a job website.

Fast fwd to Web 2.0 funding, they dont give you money to spend tens of millions to build brand. “We learnt our lesson last time, etc… blogs are so viral yadayada..” So I had to laugh when the global peer of seek - Careerbuilder, who spent and executed their way to number 1/top 2 job board has put their $50m ad account up for review, because their superbowl ad didnt get a good enough response in a newspaper poll. Classic.

AdRants : “CareerBuilder has placed its ($50m) account in review because its ads did not make a top ten appearance in USA Today’s Super Bowl ad poll, a tiny survey based on just a few hundred people with absolutely nothing to do with whether or not an ad affected sales. Cramer-Krasselt President Peter Krikovich is pissed. Livid. Dumfounded. And steaming mad and tells Advertising Age he responded to CareeBuilder’s opening a review based on the poll by asking, “You have to be fucking kidding me, right?” The agency has resigned the account and will not participate in the review. In an internal memo to agency staff, Krivkovich wrote, “To our amazement, to our total astonishment, all that astounding business success was less important than one poll. C-Kers, we have to tell you - in our entire history, hell in the history of this crazy thing called advertising, I’m not sure there has ever been any thing as baseless or as unbelievable as that. It’s so ludicrous and they are so serious about that poll it’s almost funny.”

I don’t know why the agency is so shocked. That is advertising - When you can’t measure it, be ready for clients to love you one day, shaft you the next. Accounts have moved for far less quantifiable reasons. The ads in question are here.

While on advertising, Scott Karp writes an interesting piece on whether brands can be content-creators : “Now that every brand is jumping on the bandwagon to be a content creator to compete in the intensifying war over consumer attention, you have to wonder whether brands can really compete as content creators, lodged between traditional “professional” content creators and the newly empowered army of “users” generating content.“

Scott mentions a Washington Post article re : how Lexus sponsored the creation of a book “Black Sapphire Pearl” from a Grey’s Anatomy writer (Smith) about a stolen Lexus. “So Smith, who also writes for television and film, shaped his novel “to be really cool and different and literary.” He says, “It doesn’t read like an ad.” More like this:

The Lexus loaner turned out to be a GS Hybrid. To say it was an upgrade from the battered Crown Vic I’d driven with the LAPD would be an understatement. For one, you don’t need a key. You keep the remote control thing in your pocket and to start the car you just push a button on the dash. Like on a computer. In fact the car’s more like a super-powered laptop on wheels than anything else.“

Now I know what Careerbuilder should have done : They should have had a pseudoynmous faux blogger start a blog saying they have “lost their identity, and would like it back… ‘does any1 know who i am ?’ thx.. Then it would all go a bit Minority Report, with a video sequence at the superbowl. He gets a job, the girl, spin-off wedding planning reality TV show..

TimeMagazine : “So who will be the YouTube of video résumés? Jobster, an online job board, is teaming up with social-networking site Facebook to launch a career site featuring video résumés in March.”

Avg 2.09 Founders for Successful Net Ventures

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Posted by Ben Barren on February 25, 2007 – 3:09 pm
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Joost Beta
Originally uploaded by factoryjoe.

Brad Feld discussed and linked to this piece looking at number of founders in successful internet businesses; The average is 2.09 founders. Brad said the average is between 2 and 4 founders. (where there is a sole founder, Brad mentions there is often a CEO brought in early to assist)

Aside from complementary skillsets and shared workload, the other benefit of multiple founders is ability to sustain far lower labour costs while still getting the necessary headcount into the business. This is one area where you learn by experience, but overall multiple founders is a good thing. Especially if one is the founding code writer. That is the gap that needs to be covered.

Testing, Testing 1-2-3 Blog : “So it looks like chance of success is definitely better with a team of two. I think two is a good number – it’s easy to collaborate and get things done. A single phone call would be sufficient to get both stakeholders in touch with each other. In addition, two-person team would not take up too much space as well, which makes either a single-car or two-car garage an ideal place to setup office, conference room, server racks, and so on. That’s what I call flexibility.”

"Human interface cognitive load is proportional to the number of clicks/keystrokes/gestures"

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Posted by Ben Barren on February 25, 2007 – 2:39 pm
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black24 YES
Originally uploaded by benbarren.

So it’s Monday Oscars day. If there’s one thing i’ve learnt in last 2 years it’s the “consumer experience” (or navigation, UI, user precedenet etc) needs to be designed differently to the last generation of pro/top down 1.0 sites. Threading the needle between small being the new big, and big being the new big.

What do you want people to do on your home page pre-click, and then what do u want them to click on ? OK Monday morning, back to work. Listening to Cam’s private equity gekko podcast, which seems a suitable audio start to week.

Tantek : “Hypothesis 1: Human interface cognitive load is proportional to the number of clicks/keystrokes/gestures : More specifically, all other things being equal, the cognitive load required to complete an action or task in a human computer interface is directly (probably linearly) proportional to the number of clicks and keystrokes required to complete that action or task. Cognitive load can be roughly defined as “how mentally easy/hard it feels to do something”. “