However what gets me more excited is the splattering of advanced web technologies that are now in millions of people’s hands courtesy of the Apple and the iPhone. Technologies like CSS3 and sqlite that have only been implemented in the tiniest slice of browsers are now able to be taken advantage of on the iPhone.

Safari performance in iPhone OS 2.0 has been dramatically improved, and this is important because it will continue to allow developers to create great web applications instead of simply going the native Cocoa route. One of the beautiful things about creating applications for the iPhone is that you get to pick which technologies you want to use and implement them where they make the most sense. With the advanced layout rendering capabilities present in Safari, you can create some seriously powerful design logic just by using CSS3 selectors to manipulate your content.

Safari and Firefox have implemented many parts of the CSS3 specification, but the problem is if you’re releasing an application to the masses, you have to support the big ugly dog in the corner, Internet Explorer. All the cool things you can do with CSS3 don’t matter if you’re still supporting older browsers, but on the iPhone you’re only supporting one browser and it happens to have fantastic standards support.

So go ahead and bust out your shadows, rounded corners, and background images, Safari on the iPhone can take it.

Wait, what? How is that useful?

Before people get up in arms about my example, it’s on their homepage under the Unlock Meaning section for search queries to try on Powerset. Here’s a list of some other queries they’re hyping as good examples of the technology:

• actors in Pulp Fiction
• what causes diabetes
• who signed the Kyoto Protocol

Perhaps it’s just me and my above-average keyword searching capabilities, but finding these facts on Google would be trivial. When on Google and searching for “pulp fiction actors” the very first result is the IMDB listing with full information and the full answer to my query. When looking on Powerset it gives me a scrollable view of the actors. When I click on an actor, it brings me to another page which is a copy-and-paste job from Wikipedia, but on a Powerset page. The future is here!

If the benefit touted by Powerset is that you don’t have to click to the first result in the list to find your answers — instead, presenting them on the page — and that’s all they’ve got, then they’ve got nothing. The iPhone is killing the cellphone industry not because it’s “everything else that’s out there plus some other features” but because it’s a quantum leap ahead of what’s out there. When Steve Jobs announced it he talked heavily about the “high technology” features and how the technology in the iPhone is at least 5 years ahead of anything else out there. And he was right. Powerset isn’t 5 years ahead of anything, it’s just giving you what Google might have given you if you slightly alter your query.

Danny Sullivan from SearchEngineLand.com had a fantastic quote in the NYTimes article linked previously from which I pulled the title of this blog entry:

“They have a new and interesting technology that most people don’t really need right now,” said Danny Sullivan, a search expert and editor of SearchEngineLand.com. Mr. Sullivan also said that analyzing the meaning of pages, as Powerset does, demands so much computing power that the company is unlikely to be able to index the entire Web any time soon.

Danny his the nail on the head and drives it right into the wood. People are used to keyword searching and they’ve been perfecting their searching skills for years. Powerset gives you the same results in a different format, but it requires a different search syntax. This is like giving professional baseball players a new and improved baseball, but you have to throw it with two hands on the ball at all times. If you throw it with two hands, and do it perfectly, it will go the same speed as you used to be able to throw a normal baseball. What a feature!

Microsoft is rumored to be looking at Powerset as an acquisition target and I truly hope they buy it. If Ballmer thinks that Powerset is the key to taking down Google, then I’d love to see them try and fail over the next 2 years while they ramp up and give it a shot.

The genius behind the Drama 2.0 blog posted his thoughts on the recession’s effect on the tech industry so I’m going to jump in and post two impacts of the recession right here.

What Will Get Cut First?
When budgets get tight and revenues aren’t as high as they were in the glory days, what will go first is marketing. You can’t dip on your core competencies and get rid of a dozen highly-skilled engineers because then you’re cutting your own throats. Getting rid of your top people and replacing them with low-level morons was the reason that CompUSA went out of business, and cutting the head off your engineering department is a similar mistake.

When advertising gets cut, the ones with the lowest ROI will be the first to get the slash, and that’s going to mean CPM advertising. With CPC, a company is putting all their effort into converting the click on their own website so they control the conversion rates. CPM ads put all the pressure on the publisher to get good click-through rates, and if they’re paying top dollar for CPM rates on popular sites and aren’t getting a good CTR, then it’s a waste of money. AdWords and AdSense aren’t going to drop much, but CPM rates will.

Investors Change Their Tune
VCs have been pouring dollars into companies like paper money is going out of style (*cough*) and 2008 will be the year they take a more careful look at their investments and investment strategy. Investing in pre-revenue companies with no revenue strategy is a lot different than pre-revenue companies that have a solid revenue strategy, and you can guess which type of company won’t be raising as much money this time around. The theory of “past success indicates future success” when it comes to startup founders is going to be flipped around and although an entrepreneur may have had a big name a few years ago, investors will realize it’s a totally new game in 2008. If you’re giving away the cow (the service) and the milk (unique value proposition) for free then you don’t have much of a leg to stand on when it comes time to introduce a revenue model for your “at scale” company. You may be big, but you’re not sustainable. And money doesn’t grow on trees anymore.

Google’s Open Handset Alliance announced last week had a lot of hand-waiving and fun illustrations, but was short on actual product. Phones running Google’s Android platform are nearly a year away from being in consumer’s hands, so there are a lot of questions still up in the air. If Google were to acquire Sprint Nextel, it would certainly give more credibility to their hand in the poker game of their cellphone “alliance” and might open up some additional avenues in regards to generating revenue.

So many people hate the telecom industry and cable companies that if Google were to purchase Sprint and use their infrastructure to build out a high-speed, long-distance wireless network, I can see many people ditching Comcast or TimeWarner and jumping on the Google bandwagon. Broadband pipes are so locally saturated in the major metropolitan areas that wireless alternatives might be a good fit for people fed up with lobbyists having a larger impact on their cable companies then their own petitions. Personally I’d love to see Google sell a WiMAX set-top widget that would coordinate with a cellphone widget to push WiMAX speeds to me wherever I am. Unfortunately with Google pursuing the handset alliance it seems if these pipe dreams (no pun intended) come true, iPhone users will be left out in the cold. At least until a 3G iPhone appears and by then anything is possible.

Guy put up the “help wanted” sign over at his blog, saying that Truemors was looking for a few good people, and was trounced in the comments. Here are some choice quotes:

“I hope this is a joke?”

“I agree with most of the comments. It just seems sad. The world doesn’t need another gossip monger.”

“Did you hear that Guy has sunk to a new low? Come on Guy… gossip is one step away from pornography.”

According to TechCrunch, the service will be a “rumor reporting bulletin board with twitter-like capabilities”, or if you switch it around a bit, “Twitter but for rumors.” Unfortunately, that description falls dangerously close to the “it’s like X but for Y” where X is a popular (and normally revenue-free) Web 2.0 startup, and Y is the uninteresting market that X purposely didn’t go for. Truemors gets pwn3d over at that TechCrunch thread as well:

“Cash from rumors. True or not. Potential to ruin lives and reputations all on one board! Great idea, Guy.”

“Wow, how boring and what a bad name. I don’t think Guy has ever founded a real company and his investment record is poor as well – and tumor or whatever is sure to maintain this record. Reminds me of Seth Godin and squidpoo or whatever it was called.”

The comments at TC bring up a good point. If Truemors is essentially “post whatever you want, is it true or not? VOTE!” then I could theoretically post something like “My next-door neighbor John Smith is a Nazi and likes to burn down churches in his spare time” which is obviously libelous. The problem is, the entire Truemors concept is based on posting things that may or may not be true, so how do you avoid defamatory comments in any sort of programmatic fashion? I want to see how they sort that stuff out.

Those crazy cats at TechCrunch have done some more sleuthing, and have somehow gained access to the Truemors beta and produced a screenshot:

The screenshot validates the rumors (ha) about Guy’s new service, and indicates it’s also adopting a Reddit/Digg-type voting style to move individually posted rumors up and down. The site was developed by electric pulp, a design/development agency out in South Dakota that does some really great work. They even have a quote from Guy on their homepage:

“Most tech teams are good, fast, cheap — pick any two. Electric Pulp is all three.” -Guy Kawasaki

Um, not to burst anybody’s bubble, but that’s hardly a compliment. Being good and fast is good, being called or thought of as cheap is not. I’d never want a quote like that on my website, but hey, Guy Kawasaki wrote it so it must be gold, right? Right?

Web Apps Are For Casual Creation

One thing that always bothers me about the Web OS argument is that the proponents continue to skip over my segment of the tech population — people who use desktop-class applications to get hardcore work done. I’m in Photoshop all day long with 15 windows open. I’ve got an Illustrator document to my right with over 40 layers. I have TextMate open with multiple projects, dozens of tabs, syntax-highlighted documents across 4 computer languages, you get the picture. I’m not jotting down little notes or cropping/resizing images (casual), I’m creating applications and creating images (professional, not casual) and that’s the difference. The power and multi-threading of desktop applications is needed when you do anything besides casual computer usage (upload photos, chat on IM, jot down notes, etc.) Unfortunately for Web OS proponents, the vast majority of my day is dedicated to non-casual usage because I use my computer for work. Adobe is taking Photoshop to the Web but will be positioned as the lowest-class Adobe photo app out there, lower than Elements. Hmm, I wonder why? Maybe because…

Forget Internet Bandwidth, Think Browser Execution Bandwidth

The tongue-cheeked answer to “why have a Web OS” is normally “because users’ Internet pipes are getting fatter and fatter and we need to utilize that bandwidth.” It sounds good in theory, but that’s not all there is to it. When you run a desktop application it blazes along as fast as clock cycles and RAM allow, but when you run an application based inside of a browser you have more constricting doors to lock and unlock. First off, you might just be a tab on a window with 50 other fully-loaded tabs, which kills your processor power right there (Camino and FF die slow deaths with dozens of tabs open.) Also, if you’re relying on hundreds or thousands of lines of JavaScript to run your application, it’s only going to run as fast as the JavaScript interpreter is allowed to run, and that depends on the browser and how much RAM is allocated to the browser at that particular point in time. When I used the door analogy earlier of locking and unlocking, I meant that a web application has to unlock the door to the JS engine, which needs to talk to the browser, which then talks to the operating system. At any step along that path, one of the doors might just snap shut or be less than fully open (memory problems, reallocated processor power, etc.) and the web app can’t do anything about it because it is at the mercy of the rest of the food chain.

I Don’t Know About You, But I Like Things Snappy

There’s a reason people buy fast computers and lots of memory and that is so their desktop applications zip around and operate at fast speeds. I have yet to use a web application that was as zippy as a desktop application, and that’s annoying. Why would I replace a perfectly good full-powered application with a crippled and slow web application? How is that alluring?

Former Flockstar Chris Messina is playing an interesting role in the new Mozilla Coop concept, primarily because he came up with it first back when he was working with Flock (and his mockups are a lot nicer). Mozilla gives him a quick shout-out here saying that “our design was influenced” by his original mockups. Instead of Mozilla flipping the friends bar vertically and calling it original, they should just pay Chris a boatload of money and use the infinitely higher-fidelity mockups he already designed over a year ago. As a designer this is pretty upsetting, so hopefully the folks at Mozilla do the right thing or at least give him better credit than a footnote link.

Will this be the end for Flock? I don’t think so, I think it’s a wake-up call. Flock still has incredible potential but the landscape of “social” has changed dramatically since they first began building the application. Now, MySpace is the social king but the royalty doesn’t like to play nice with outside developers. If Flock could manage a business relationship with MySpace (or another large social network) and become the de facto browser for those looking to maximize their MySpace experience, they’d take off. Of course this is a 180° turn from their current target which seems to be tech-savvy people who have del.icio.us and Flickr accounts, but hey, changing in midstream isn’t such a bad idea sometimes.

Google’s MyMaps just launched (accessible via a tab on the normal Google Maps site) and it has some interesting features. For example, here’s a map for the 2004 Presidential Election with state colors corresponding to vote counts. Wayfaring has been offering something similar for awhile now, the ability to create social maps that you can share and annotate. However Wayfaring is somewhat limited by the Google Maps API, whereas Google can do whatever they want because they own the data. The Wayfaring UI is very, very nice, however they don’t have the map drawing functionality that the new MyMaps has. However just like with Flock’s situation, I think that the quality design and architecture of Wayfaring’s application could easily hold its own if it had some unique features that MyMaps doesn’t have, especially better integration with blogs or perhaps an audio/video component that links to your map.

From the email I received, Spivot is an “all-purpose media reader… [that] brings together the functionality of news aggregation (Google News), with social news (Digg), with the capabilities of a feed aggregation tool (Bloglines).” A better description would be, “combines feed aggregation (like Bloglines, but less intuitive) with social news features (that Newsvine and a million other sites already have) with blog suggestion/aggregation (like 9rules, but Spivot doesn’t ask before they take your content) and mashes it together.

The Lock-In

When you bring in content from independent, outside sources (like bloggers) then you better be giving them something in return. After all, they’re doing the hard work of researching and writing articles on interesting topics, so if you have their content syndicated on your site, there has to be some benefit to the blogger or else you’re in the same bucket as those damn splogs we all hate so much.

If you visit the Art & Design blog section on Spivot, here’s what you’ll see:

• A list of blogs in the sidebar that produce the content that section is displaying. Click on one of those links on the left and guess what? It doesn’t go to the actual site.
• A list of articles in the center column from their sources in this category. Click on one of the article titles and you head to a page straight out of 1998 with a frameset and a “spivot toolbar” on the bottom so the actual article URL is hijacked. Most blogs have a “email this article” feature built into the site, but just in case that was too complicated, Spivot provides an email service, except the emails it sends out do not include 1) the author’s name or 2) the actual story URL. In fact, no links in the email land you at the real article at all, they all stick you back at the Spivot site. Oh, and if you don’t have JavaScript turned on, there’s no way to kill the annoying bottom frame nor use 90% of the website.
• The only direct link to a source blog on the entire Spivot.com website can be found by clicking on the favicon next to a story. Think it’s going to take you to the blog? Think again, the link takes you to the RSS feed of the blog so you’re staring at code.

It seems like Spivot takes your content without asking, republishes it on their site, and then doesn’t mention your name as the author, doesn’t link to your site, and doesn’t link to your article anywhere. The only thing that could make this worse is if they shoved AdSense blocks next to blog author’s content.

They Could Definitely Have Done Better

Spivot is brought to you by the folks at Involution Studios, a digital product firm founded by two guys (Dirk Knemeyer & Andrei Herasimchuk) for whom I have great respect. Andrei was the first user interface designer hired by Adobe and designed most of the Photoshop interface we’re all used to today, and Dirk is an internationally-known champion of usability and product design with presentations all around the world. Too bad they took all that experience and knowledge and left it behind while they developed Spivot or else maybe it could have done well.

Oh, and before I forget. This whole concept was cooler when it was called Kinja, that site from another era that Gawker let slip into oblivion. Some of the design reminds me of Kinja too, weird.

The Pro stat tracking features of MyBlogLog are similar to other packages — obviously they track clicks on your site. One of the things that MBL has been tracking (that I have only seen on a small handful of other stat packages) is what they call “iFrame ad tracking”, which is essentially tracking clicks that come from inside iFrames on your site. For people who aren’t super geeks, this is a slightly more difficult thing to track because you have to use the DOM to target the iFrame first, then you have to work the magic. With MBL’s case however, they don’t track generic iFrames and the links on them, they specifically target Google AdSense and Yahoo Publisher Network ads, and nothing else.

What’s also interesting is that they didn’t write this code themselves, but rather “borrowed” it from a third-party developer who put it together for Mint users wishing to track AdSense stats. Here’s part of the code:


//start IFrame ad tracking
//from http://www.digitalmediaminute.com/article/1715/adsense-click-pepper
var m_px=0,m_py=0,m_as_frms=new Array(),is_ie=document.all?true:false;
function m_as_init() {
var ad=document.getElementsByTagName('iframe');
for(var i=0;i if(ad[i].src.indexOf('googlesyndication.com')>-1){
m_as_frms[m_as_frms.length]=new Array(ad[i], 'http://pagead2.googlesyndication.com', 'Google AdSense');
if(is_ie){ad[i].onfocus=m_trk_as;}
} else if(ad[i].src.indexOf('ypn-js.overture.com') > -1) {
m_as_frms[m_as_frms.length]=new Array(ad[i], 'http://ypn-js.overture.com', 'Yahoo! Publisher Network');
if(is_ie){ad[i].onfocus=m_trk_as;}
} else {}
}


As you can see they only target links in iFrames which have the signature Google AdSense or YPN domain inside, aka, your AdSense or YPN textual ad links. When someone clicks on one of your site’s text ads, that click gets registered on MyBlogLog’s servers and stored.

“But wait, Mike, isn’t this a *feature* and not a huge issue?” No sir, it is a huge issue. Stat tracking is a feature in the Pro version of MBL however the code that tracks your ads’ clicks is present on everyone’s widget, regardless of if they’re a Pro account holder or not. Since the vast majority of MBL users do not have a Pro account, the vast majority of MBL users do not consider Yahoo/MBL tracking their ad clicks as a “feature” but rather a “WTF@!!!”.

So why did Yahoo purchase MyBlogLog? Many have said it was purely for the eyeballs and the user account numbers, but now it’s becoming clear that by owning MBL user data they now have unfettered access to every MBL user’s AdSense statistics, which could have been the selling point all along.

If you’re using the MyBlogLog widget and don’t want your AdSense stats poured over by Yahoo, you should take it down right now. MBL has yet to discuss this significant ad-tracking problem so until then, consider your private ad data to be a lot less private.

There is no “type” of person who might be an atheist, but if you look at Web 2.0 community sites like Digg and YouTube, you’ll see a growing number of users there who display anti-religion or pro-Atheism sentiments. I would go so far as to argue that without large tech-oriented sites like Digg and YouTube, the Atheism 2.0 movement would not have taken off as quickly as it has.

Earlier today, a story hit the Digg frontpage with the title “Murdered for being an atheist” and as of 3:15pm eastern it has over 1100 diggs and nearly 300 comments, easily eclipsing other stories that were made popular today. The first comment in the thread was made by the person who submitted the story:

“It seems like people who are deeply religious are prone to having hallucinations and delusions. This guy was completely insane and is probably better off in jail.”

That comment currently has +134 diggs, which for people who aren’t familiar with Digg comment threads, is a very large positive reaction to that comment. The second comment alludes to the killer liking God so much, that he should be executed so that he can meet his maker quicker while saving taxpayer dollars, and that comment has +127 diggs.

A few comments further down, Tekrat writes how any belief system can be dangerous if taken word-for-word by a radical, and how in his Christian beliefs he takes a particular view of the Bible as a whole and doesn’t just pick and choose. Tekrat is not excusing this person’s actions, rather he says “…this guy should never see the light of freedom again…he’s a picture of everything that has gone wrong with Christianity”, but his comment was immediately dugg down to an impressive -51 diggs. Tekrat also linked to a Christian Science Monitor article titled “Atheism, not religion, is the real force behind the mass murders of history”, which has a very inflammatory and anti-Atheistic title, probably one of the reasons Tekrat’s comment was dugg down.

In the last 2-3 months, seven different stories have made it to the front page of Digg that had to do with Richard Dawkins, with 10-12 more about atheism or atheist-related stories. Would many of these news articles become popular on their own if it hadn’t been for the Digg community’s promotion? I don’t think they would.

Recently Newsweek published an article about how the New Atheists are taking to YouTube with their message, denying the existence of a deity in front of thousands of viewers. A video search on “Dawkins” or “atheism” reveals hundreds of videos about atheism, many with over 100,000 views and thousands of ratings. Without Atheism-related videos on YouTube making it to the Digg frontpage, I don’t think many people would be as familiar with Richard Dawkins and Atheism as they are now.

This article isn’t analyzing if there is a God or not, or if Richard Dawkins’ theories are correct, but that Digg and YouTube are extremely powerful devices to project a message to the masses. If you combine the two, as many people have in regards to Atheism, it becomes a veritable force that can sway public opinion like few other outlets can.

Another news startup that’s being hyped more than any other startup in the past 6 months is Daylife, a “distributed news platform” that supposedly gathers and organizes news in ways that are relevant to the user, showing sources and quotes, etc. They recently announced their first round where they were funded by twice as many investors as it has employees (!!!) which I find just astounding. From what I’ve gathered about Daylife, their site is an automated aggregation and customization portal, with possibly a handful of editors making sure everything is greased and working. Again, lots of investors and money and no original content or news-breaking to show for it.

At 9rules we do a lot of the same stuff, but replace “news stories” with “our members’ blog entries”. We aggregate and cache content from hundreds of sources, organize it by topic, relevance, and freshness, and also allow people to post their own stories/content and comment. The main difference is that we’re a team of 3 who only work part-time on 9rules, we’re self-funded (turned down investments, not really needed) and don’t need to hire anyone else as we’re running things and growing just fine on our own. What I’d like to know is who is honestly needed to run these user-generated, completely automated, content aggregation portals? What are these Topix.net people doing besides watching the stories come in and populate themselves in their database? How many engineers and designers do these automated portals really need to hire — it’s like too many cooks in the kitchen, all bustling around, screwing things up. Set up the service, set up the algorithms, the design, the features, and then all you really need to do is make sure nothing breaks. Want to roll out some new features? Great! Write about 10 lines of PHP and pull some data out of the db in a slightly new way and you’ve got yourself a point release.

Topix.net doesn’t do anything special, they’re like Newsvine but with a shitty design and less community-centric features, where’s all this money going to? It’s obviously not “ease of use” or “user-centered functionality”. The way that Daylife is being hyped the site better revolutionize the way people around the globe communicate and comprehend the world around them all while cooking me eggs and singing to me. Where is this money going? Why do people actually need it?

Aaron only attended high school for one year, and since he was so far ahead of the game, he left and started taking college classes alongside a pseudo-homeschool curriculum. It was about this time or a little bit afterwards that he co-authored the RSS 1.0 (RDF) specification for the W3C at the ripe age of 14/15. Yes, the foundations of RSS/RDF were built by someone not old enough to drive. It was about this time (I was 17/18ish) that I learned of Aaron and started paying attention to what he was doing.

In 2002 (finally old enough to drive!) Aaron befriended legendary copylefter Lawrence Lessig and then became the Creative Commons’ RDF lead soon thereafter.

Similar to his high school experience, he only stayed one year at Stanford University before enrolling in Paul Graham’s well-known Summer Founders Program, aka, Ycombinator. It was around this time that Aaron was working in stealth mode on a startup (that I was anxious to find out what it was!) and after some brief flirts with venture capital firms about Idea A (Infogami I believe), he decided to merge with two other people and pursue Idea B which was Reddit. The same Reddit which was purchased this week by Condé Nast for an undisclosed amount.

I find that the “story” I’m most interested in is the 24-48 hours after you sell your company for 7 or 8 figures, because that’s the time period I fantasize about when I’m neck-deep in code that’s misbehaving, or pushing pixels that won’t look right no matter what I do. Out of any entrepreneurial article on the face of this planet, the ones where people say they’re “going on vacation” or “might start an investment firm” after selling their company, Aaron’s posts on the subject are the most brilliantly honest and fascinating:

• The Aftermath & The Afterparty

For all of Aaron’s talents, I think that writing might be his best asset:

“When I woke up the next morning, my head was fuzzy. And while I saw the costumes strewn about the floor, the girls brought home who slept in our living room, the odd emails asking me what I’d do next, I still felt funny. For a shining moment in the morning, it felt as if this whole acquisition thing might have simply been a dream.”

Congrats man, you deserve it.

Last week Mike wrote about Maya’s Mom, and in the comments someone from a competing company left a comment that basically said “oh you write about them and not us, what’s up with that?” and tried to convince Mike to give them some link-love. First off, leaving a comment on a competitor’s review looks incredibly bad and I can’t believe how many times I see this at TechCrunch. The only way that it doesn’t look bad is when somebody else not affiliated with the company posts the link, or, a few dozen links in the case of Cork’d fans commenting at the WineLog review.

Someone from MothersClick (the un-reviewed company) wrote this comment about the situation:

“Actually, I was involved in a startup competitor to Maya’s Mom and we tried to get prelaunch press from Arrington months ago (around the same time as he first announced Maya’s Mom) but he wouldn’t give us the time of day. Now that our site launched (about 2 weeks ago), Arrington has still ignored us, despite press releases and direct contact…and now he’s pimping Maya’s Mom…which is owned by a former colleague and friend of his. Fuck Arrington’s biased ass. He as no credibility anymore.”

Hmm, maybe the reason he didn’t write about the other company is because he didn’t want to, or didn’t like it ever think that? Since when does Mike’s blog have to give equal treatment to all companies in a particular space? Do I care if he knows the entrepreneurs or the investors of a particular company? No of course not, I’m not an idiot, I know that there might be some behind-closed-doors stuff going on but that’s why I’m a human being blessed with free will and the ability to investigate news stories further from other sources. Everything in the world is biased — people you talk to, radio shows you listen to, TV shows you watch, newspapers and magazines you read — you can’t hide from it, it’s a part of daily life.

Here on this site I write about whatever companies I want to, I’m not going to write a fluff review just because somebody pesters me with press releases. Just because TechCrunch is crazy popular doesn’t mean that forces Mike to run the site a certain way, he owns the site, he can do whatever he wants with it. If he wants to write about his friends or companies he may be more familiar with, then he has every right in the world to do so.

If you’re expecting stories to be completely free for subjectivity and opinion, maybe you should go read the New York Times. Ah shit, nevermind.

Amidst the congratulatory reach-arounds was an entry on the Socialtext blog by well-known entrepreneur and Socialtext CEO Ross Mayfield. A quote:

“Our experience has been that JotSpot customers convert to Socialtext when they realize they need a real business-class wiki,” said Socialtext CEO Ross Mayfield. “We have been gaining customers since they discontinued their Appliance offering. We hear a high degree of uncertainty from users faced with a potential lag in innovation and unclear integration strategy with Google. Socialtext is ready to support you and your business during this critical time.”

My translation out of PR speak and into what Ross really wanted to say:

“JotSpot was a competitor and we love it when some of their users come to us. JotSpot isn’t focused on the enterprise-class like we are, and because of that shortcoming we’ve been signing up some new accounts, and now will offer JotSpot users a free Socialtext wiki so that they can do grown-up, adult things like collaborate on Gantt charts and P/E ratio calculations. We’re silently upset that Google bought JotSpot, and the only mud we can sling is that even though Jot users will soon get Google’s world-class servers, there’s still a chance that their data is unavailable for 1-2 hours or the migration takes longer than they planned. If that improbable event does occur, not only will your business lose money but your children will all get projectile diarrhea, so you better migrate now or we’ll have to say we told you so.

Some things that Ross obviously left out of his heart-warming congratulatory post:

• All JotSpot accounts, at any level, are now free, as in beer.
• All JotSpot accounts are still active, you can login and do whatever you want.

See if JotSpot were being evil and shutting down all user accounts, suspending paying users, and holding data for ransom then Socialtext’s offer would be a light shining from heaven. But because there’s honestly nothing negative about the Google acquisition from Jot’s users’ points of view, it just comes out as underhanded. The timing really is interesting though, because just a day before JotSpot was acquired, SocialText announced a partnership with Microsoft to let Microsoft SharePoint users have simple, editable pages….. err….. enterprise-class collaborative wiki solutions be part of their application.

SocialText laughs on Monday but JotSpot gets the last laugh on Tuesday.

Update: Investor Mark Evans posts his thoughts and I think he misses the point completely, saying that the reason it happened is because the VCs had little interest in Odeo and that they were low on money or about to run out. Mark, this isn’t Ev trying to save a sinking ship, it’s him using 7 figures of his own money to buy back control and do what he wants to do, not what his investors think will make the best exit strategy. My comment over there goes into a little bit more detail.

Vox… You Know… For The MySpace Kids
Wednesday also marked the non-beta launch of Vox.com, Six Apart’s new blogging-photo-video tool that not-really-but-yeah-it-kinda-does compete with another Six Apart product, TypePad. Vox is billed as “a free personal blogging service for sharing your experiences with friends and family” but it’s definitely 6A’s product that hopes to allure MySpace users, the kind that have been sharing songs, pictures, and video for awhile now.

I’m not sure exactly why 6A chose to create a totally new product rather than just give TypePad a Vox-like makeover, but maybe Vox is based on a totally new codebase which is something that TypePad desperately needs. As a previous TypePad customer I was constantly frustrated by the slowdowns associated with the service — by the end it took nearly 30 seconds for the stats page to load up, 1 minute to list my recent entries, etc. etc.

I do like Vox from a design and interaction point of view as it’s very well polished, but I just have to wonder what Six Apart is really trying to do here. Their Movable Type publishing software that was the Big Man On Campus just a few years ago is now all but eclipsed by open source WordPress and the thousands of free themes that are offered. TypePad, their once-novel hosted blogging service, now goes up against WordPress.com which offers similar features, greater reliability, and a better price tag of “completely free” which usually makes people happy. Now they release Vox which is positioned up against MySpace and Facebook for the “create your own space on the web, put happy shit in there, meet new people” social publishing/networking niche. In case they haven’t noticed, MySpace is already a noun (“Hey have you got a MySpace?”) and I suspect a lot of paying TypePad users will be defecting to free Vox, so they’re 1) taking on MySpace, and 2) losing their own customers?

Vox is a very cool service but its positioning within the 6A lineup just isn’t clear to me yet. Here’s how I wish 6A’s product lineup looked:

• A free version of Movable Type (or another app) that is as easy to theme as WordPress, can import/export blog entries flawlessly for easy switching, and can easily switch to dynamic publishing without any hassles.
• A “Pro” version of Movable Type that has the features listed above but can also have modified data fields to store/output anything you want and a publishing workflow system built-in, aka, a mini CMS.
• No TypePad, just Vox. Give Vox the same capabilities as TypePad and implement a paid tier that lets you drop your own CSS and templates in. Free for regular users, power users pay $10/mo or something.

It’s nice to dream :)

Bad Location — Startups prosper in some places and not others. Silicon Valley dominates, then Boston, then Seattle, Austin, Denver, and New York. After that there’s not much.

Yup, very true, but I’d rather be exactly where I am then holed up in some garage with 10 other people sleeping on blankets and cots. I live in Raleigh, NC where the tech industry is booming, the housing costs are nice and low, the people are very friendly, and the weather is beautiful. I’m an east coast guy and although I’ve been to the Valley a few times it always freaks me out how completely different the people are over there. My first time in San Francisco, Paul and I were at a bar around 1am and instead of the normal things that go on in a bar (dancing, lots of drinking, laughing, etc.) we saw Apple girl Eris Free, CSS bad boy Tantek Celik, and about 4 other people all huddled around their laptops writing code. Nobody was talking, nobody was drinking, just people nose-down in their work (or play?) at a bar. When I’m out at night, my primary goals are these: escape from work, escape from technology. It seems that if you’re an entrepreneur in SF you’re expected to go to barcamps, tech meetups, tech dinners, VC-funded parties, etc., where people undoubtedly chat about their work, their technology. To me that’s just not appealing.

Now San Francisco might be the place to be if you’re starting a tech company, but do I want the rest of my life to be odd? Gigantic costs of living, crazy weather, people with the unmistakable west coast mentality? I personally wouldn’t want to live there, but you have to make that decision yourself :)

Marginal Niche — Most of the groups that apply to Y Combinator suffer from a common problem: choosing a small, obscure niche in the hope of avoiding competition.

What Paul is saying is that tackling small problems does not a company make, nor does it prove very challenging or fulfilling. I’ve hacked together multiple “widgets” or code prototypes in my day that solve interesting but small problems, and not once did I ever think that I should turn that feature into a full-blown app or company. However on the flip-side Paul Graham has warned against being too broad or directly going up against something that Google could put together, or Microsoft. It seems that picking the problem to solve for your new company can’t be merely “a feature” that should be on some software package somewhere, nor should it be too generic that it loses its usefulness. The fine line between generic and niche is where your solution should lie.

9rules only showcases high quality blogs because we thought it was a more valuable proposition then showcasing all blogs in all topics since that’s been done a hundred times over. Anybody can create a blog, anybody can write for one, and anybody can create a great or shitty blog, but creating a great blog takes the cumulative efforts of various skills — entrepreneurship, talent, passion, charisma — and that’s what we like most about the blog world. Although the generic litmus test for your blog’s popularity could be your Technorati rank or your number of linkbacks, that doesn’t really test the quality of your blog — merely the popularity — and we all know that popularity != quality if you’ve listened to some of the songs on Billboard’s Top 20 recently. Popularity can be bought (marketing, word of mouth, author fame, notoriety, etc.) but quality speaks for itself.

Derivative Idea — Many of the applications we get are imitations of some existing company. That’s one source of ideas, but not the best. If you look at the origins of successful startups, few were started in imitation of some other startup. Where did they get their ideas? Usually from some specific, unsolved problem the founders identified.

I think the main problem with our industry now is that everyone is intent on over-solving the simple problems. How do I find out what cool events/shows/etc. are near me? How do I connect with old friends, or make new ones? How do I publish on the web, can I start a blog? How do I find directions to where I want to go? How do I keep track of my schedule? I’d say that these simple questions represent nearly the majority of the “problems” that startups are now trying to solve, but how many times do they need to be solved? Are the additional 20 solutions that much better than the first 2 or 3? Is the marginal value they provide worth it to me to stop using one and start using another? Paul’s idea of derivative startups not being a good idea is true, but only if you solve the same problem the same way as everybody else, but tack on Feature X or Feature Y. The concept behind 9rules is nothing new, human-edited directories of websites have been around since the mid-90s, but now we’re doing it with blogs and added some cool community benefits. Google Maps isn’t much different than the original MapQuest (remember when MapQuest was a verb?) but they added real-time map manipulation and *poof* it’s a gigantic hit. They went back to the original problem (get me here from there) and added something that made a dramatic difference in how people used it.

Hiring Bad Programmers — I forgot to include this in the early versions of the list, because nearly all the founders I know are programmers. This is not a serious problem for them. They might accidentally hire someone bad, but it’s not going to kill the company. In a pinch they can do whatever’s required themselves. [...] But when I think about what killed most of the startups in the e-commerce business back in the 90s, it was bad programmers. A lot of those companies were started by business guys who thought the way startups worked was that you had some clever idea and then hired programmers to implement it. That’s actually much harder than it sounds—almost impossibly hard in fact—because business guys can’t tell which are the good programmers.

This is a gigantic problem for many entrepreneurs because kickass technical skills are not something you randomly pickup, they have to be inside you initially, you have to love code, love pixels. A team of entrepreneurs with business backgrounds hiring designers and developers to make their dream into reality seems to make sense from the onset, but when you get into the nitty gritty parts of the project it’s a nightmare. The constraints that guide an application’s development (requirements, scope, user personas, etc.) don’t really mesh with pie in the sky ideas, changing concepts, changing business plans, etc. A startup’s goals may remain consistent but goals don’t drive software development, and when the direction to achieve those goals changes so does the software. We tweak things all the time on the 9rules website — layout, wording, icons, list length, etc. — and if we had to hire people to change those things at the same frequency we wanted them to change, it would cost us an arm and a leg.

Matching up business-minded entrepreneurs with haX0rs to develop the software is a gigantic nightmare for all those involved. Unfortunately if you’re in that situation there isn’t really a way out of it that doesn’t involve lots of money or lots of time, and those are two luxuries startups cannot afford.

Raising Too Much Money —It’s obvious how too little money could kill you, but is there such a thing as having too much? [...] Yes and no. The problem is not so much the money itself as what comes with it. As one VC who spoke at Y Combinator said, “Once you take several million dollars of my money, the clock is ticking.”

When we started 9rules early on, it wasn’t our main source of income, so we bootstrapped. After awhile we thought that having some money around would help us achieve our goals faster (which it may have, who knows) so we talked to some friends and some terms were laid out in front of us that we didn’t like, so we turned them down and decided to go back to kicking ass like we had been doing before. Now a few months later 9rules is bigger, stronger, making us some more money, and now that we were considered “more successful” some new investors came to us wanting to give us money. I think that’s the funny thing about VC money — when you need some money to get started they say you need to prove yourself more, but once you’ve proved yourself and are making money people now want to give you money you don’t need, or don’t want.

As Paul notes, when you take VC money your direction is locked down, at least for a few months. You asked for money for specific things and now you have money for specific things, so you’re expected to spend it on those things. What if Big Idea X in your business plan doesn’t really work so well, and you need to switch gears? Well if you hired somebody to manage Big Idea X, what happens to them? What about the marketing budget for Big Idea X, where’s that go?

Jason Fried has a great quote about how failing in obscurity is a luxury that small teams without big investments still have:

“So embrace obscurity. It’s your friend. Launch small, make mistakes in the shadows, get better, and then seek out the spotlight when you’re ready.”

When you’re spending your own hard-earned money you spend it more wisely, you spend it on what matters and not on what doesn’t. Ideas you have that may stray from your original plan are now just experiments, not “initiatives” with budgets. Experimenting, trying and failing or trying and succeeding are all things that you can do relatively cheaply, but if you’re throwing someone else’s money at your experiments then they’re not just experiments anymore, they’re projects, or they’re feature releases, or redesigns. There’s really no such thing as tweaking anymore, and I think that’s the hallmark to a great startup — the ability to tweak and make tiny adjustments until your initial goal is dead in your sights.

The poster (I think it was Ryan) says that by just using simple queries using “keygen”, “serial”, or “name” produce some fun results like keygen code for WinZip, Photoshop, mIRC, and a bunch more. Oh and if you know Java, here’s the function for WinZip that takes in a username and returns a String which needs to be then converted to hex:

    public String computeSerial(String userName) {
	IntBits ib;
	int len;
	int L4;
	int F4;
	int i;
	int c;
	int counter;
	int temp;
	int serial; //This will hold the value of the serial
	if (userName == null) return "";
	len = userName.length();

	L4 = 0; //Last 4 ascii digits of serial
	F4 = 0; //first 4 ascii digits of serial
	ib = new IntBits();
	ib.init();

	for (i = 0; i

UPDATE: Find database login information courtesy WordPress WP-CONFIG files.
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		http://www.businesslogs.com/web_20/nice_little_bloglines_visual_update.php
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		Fri, 29 Sep 2006 17:33:13 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=336
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			I’ve been using Bloglines for at least 18 months now, which probably makes me one of their earliest “customers”.  I thought their service was so amazing after a few days that I emailed support and said, “hey can I donate a few bucks, you guys rock!” and they thanked me, but declined.  I’ve been using Bloglines as my primary RSS reader ever since.


As I do every morning, I loaded up Bloglines in a tab but noticed a few things that were different:

Font-size in the left panel was decreased from 12px to 11px, still keeping Verdana as the typeface.  This allows a few more sites to be listed above the fold.  The “new article” count was decreased to 9px, a good call as well.
Selected site names on the left now have a nice background and border applied to their row, letting the user keep mental note of what site they’re reading.
The side panel now refreshes automatically after a set amount of time, with a transparent visual clue popping up to show how many new items were found. The side panel refreshed before, but the visual clueing is a new feature, and now it’s doing it without a refresh via Ajax.
The ‘R’ key that normally refreshed the side panel now does so via Ajax instead of a page refresh, very nifty.


There are many online feedreaders out now, but in my opinion none of them do the core job of “reading RSS feeds” better than Bloglines.  The simple two-pane interface using frames instead of Ajax, is cleaner and quicker than every other implementation I’ve seen.  In the hustle and bustle of “Web 2.0″ and buzzword/feature pumping, it’s nice to see a company refining the user’s experience the way Bloglines is doing.
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		http://www.businesslogs.com/web_20/the_catch_22_of_web_20.php
		http://www.businesslogs.com/web_20/the_catch_22_of_web_20.php#comments
		Mon, 25 Sep 2006 18:15:35 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=335
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			I think one of the reasons I continue to write on this blog about the funny circumstances I witness in the “Web 2.0″ industry is because I feel like I’m the only person seeing certain things happen — like watching a train wreck in slow motion.  Change the comparison to relate to reputation, innovation, and mindshare and it’s pretty similar.

The following are a few ironic and funny circumstances about this “Web 2.0″ industry we all known and love.
I Can Give You $10 Million But Don’t Ask Me What Ajax Really Means
Venture capitalists have the money that entrepreneurs seek, but have they ever written a line of code? Pushed any pixels? I find that it’s rare to see a VC who is technologically savvy enough to be able to *produce* any type of software rather than just talk about it or invest in it.  I challenge VCs reading this to take my simple Web 2.0 quiz from last year and see if you’ve got the chops to backup the bankroll!
I Want To Start A Software Company Even Though I Can’t Code
I do design work so I’ve worked with my share of “visionary” entrepreneurs — ones that have the big picture together but think they can push a full beta out in 3 months with a distributed development team.  Communicating your vision to a development and design team is difficult because we rely on the little details that non-technical people wouldn’t think about, and without those details figured out in a reasonable time, scope is bound to creep. Another reason that the odds are stacked against non-technical entrepreneurs is because development and design is expensive, and the best team in the world will still get pissed off if the founders are flakey or change their mind a hundred times.
I Know You Gave Me Millions But I “Need” More
To date, Technorati has raised nearly $20 million and has grown to dozens of employees, but their blog numbers and link counts are consistently incorrect, plus the service has been plagued with outages for months.  My question is why they don’t fix these core problems before expanding or taking more and more money? To quote Jason Fried, “ever notice how companies don’t just take one round of funding, they always need more?” Greedy, greedy, greedy.  How could a few million *not* be enough to hire some great people and kick ass?
Industry Pundits’ Own Companies Are Struggling
Michael Arrington is a celebrity in the “Web 2.0″ world, read every single day by tens of thousands of technologists, entrepreneurs and venture capitalists looking to either get the latest industry tidbit or provoke a glowing review.  He’s been profiled in major newspapers and magazines as the King of our budding industry, but his own company Edgeio has seemingly failed to lift off the runway. After a quick Cinderella period users didn’t come back and now I get the vibe that Arrington is distancing himself from the company he founded.  Marketing genius Seth Godin’s company Squidoo seems lead-bottomed as well, with many sites (including Wired) declaring it as dead in the water. Note to everyone: being famous, smart, and rich doesn’t guarantee your idea or execution will be spot-on.
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		http://www.businesslogs.com/reputation/dead_20_outed_vindictive_vcs_upset_about_truth_peddling.php
		http://www.businesslogs.com/reputation/dead_20_outed_vindictive_vcs_upset_about_truth_peddling.php#comments
		Fri, 22 Sep 2006 17:29:33 +0000
		Mike Rundle
				
		

		http://www.fortytemp4.com/?p=334
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			Arrington notes that Skeptic, the brilliant Devil’s Advocate 2.0, has been identified (but without naming his/her name yet.)  I’ll admit it, Dead 2.0 is my favorite “Web 2.0″ blog right now and it’s because it mixes anecdotal humor, truthiness, and the right splash of exaggeration.  I personally don’t care who writes it, I’ll still read it.

The problem with the current state of “Web 2.0″ blogs is that many are afraid to actually speak their minds.  I spoke my mind about the TechCrunch redesign back 4 months ago and now my comments are blacklisted at TechCrunch — price of my opinion I suppose.  The problem is that everyone has a startup or a story they’re peddling to a bigger name blogger, so they have to watch what they say lest they upset the Web 2.0 gods and don’t get their hot product featurette.
Nick Douglas and Skeptic have upset the A-List brethren many times over, probably because nobody likes to hear the company they’re 1) starting, or 2) investing in sucks the big one and is worthless.  I tend to get the most worked up about things I’m upset over, so that’s why I write more frequently about companies I think are doing things wrong rather than the ones that are doing things right.
I honestly don’t care who is writing Dead 2.0, why they decided to hide in the first place, or any other conspiracy theories — I just know that the author sees the Web industry the same way I see it, and I’ll always be a reader.

(BTW: Sorry about the absence… we switched servers, had to do some MySQL jumping jacks, but now we’re back!)
(BTW2: Just fixed the comment submission problem, comment away!)
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		http://www.businesslogs.com/web_20/arrington_lights_it_up_literally.php
		http://www.businesslogs.com/web_20/arrington_lights_it_up_literally.php#comments
		Wed, 23 Aug 2006 00:22:15 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=333
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			What I find hilarious about this picture isn’t that he’s lighting a cigar with a few hundred dollar bills (looks like a Photoshop job if you ask me) but because the website that reports on Web 2.0 Internet Startups probably makes more money than the Internet Startups it reports on.  How many Web 2.0 companies can report that they are making at least $60,000 in revenue a month?  Not very many.

Valleywag’s got the rest of the drop.
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		http://www.businesslogs.com/web_20/gyms_shitting_on_your_startup.php
		http://www.businesslogs.com/web_20/gyms_shitting_on_your_startup.php#comments
		Mon, 21 Aug 2006 17:15:48 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=332
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			By now you’ve probably heard that The Little Calendar App That Could(n’t) Kiko has been absolved and is being sold on eBay alongside diapers, that’s a tough ending, especially for a fledgling company funded through Paul Graham’s prestigious Y Combinator warm incubator.  From Paul’s Kiko eulogy:

“What nailed Kiko was Google Calendar. Once that came out, not only did Kiko’s growth stop, but a lot of existing users defected. Justin and Emmett told me a large fraction of Kiko’s users had Gmail addresses.”
Defected?  Paul makes it sound as though they had no choice and the Google SS was at their door.  People checked out Google’s calendar because it was new, and, well, it’s made by Google.  Kiko still had the upperhand because a situation is only damning if you make it so, and Kiko certainly did that.  Kiko could have surveyed Google Calendar, saw opportunities for innovation, and then executed.  In a business world full of copycats, all you have is innovation and marketing so you better work on those two as much as possible before throwing in the towel.  To this outsider’s eyes it looks as though Kiko sat on their hands and waited for the inevitable to happen, which is one certain way of causing your business a lot of direct harm.

“Google may be even more dangerous than Microsoft, because unlike Microsoft it’s the favorite of technically minded users. When Microsoft launched an application to compete with yours, the first users they’d get would alway be the least sophisticated– the ones who just used whatever happened to be already installed on their computer. But a startup that tries to compete with Google will have to fight for the early adopters that startups can ordinarily treat as their birthright.”
God forbid a startup have to work in order to build a userbase, because that would be too damn difficult.  9rules gets absolutely no love from Silicon Valley (because we’re an east coast company? or we have a black CEO? who knows!), so that makes it even harder to gain traction but it’s happening because we work hard at it.  It’s stupid for any entrepreneur to believe they are entitled to anything, in fact it’s the complete opposite.  If it were easy to start a company and sell it for millions of dollars then everyone would be doing it, but because it’s not, it should be assumed that the process is extremely difficult.  Google Calendar launched and rippled the Kiko dreampool, but to counteract that they should have regrouped, refreshed, and re-evaluated their service, business model, employees, everything.
Kiko wasn’t fucked until they decided they were fucked, and they decided they were fucked the moment they turned around and looked at Google Calendar coming from behind.  What they should have done was keep their head forward and innovate, because that’s the only clear path away from danger.
Update: Check out Richard White’s explanation of what happened:
Did Google Calendar kill Kiko?
No. One of our biggest traffic days was when Google Calendar was released because we were mentioned in all the new stories as one of their top competitors. In fact, we repositioned Kiko to take advantage of a market that most other players, including Google Calendar, were neglecting: users outside the US. We added options like Monday week start and different date formats. We setup a wiki and let our users translate Kiko into 11 languages. And we moved away from a US-only SMS reminder system to one that worked internationally. At last count 60-70% of our users are from outside the US.
So there were definitely alternatives to just hanging up the hat, as Richard mentions.
Google and Yahoo and Microsoft Are In Your Space
What’s the most oft-asked question when you’re asking people for a lot of money?  Well it goes like this:
“What is stopping [GIGANTIC COMPANY] from doing what you’re doing?
Everybody is scared of GYM and deeply in love with GYM at the same time.  Entrepreneurs are scared because of a Google Calendar / Kiko scenario, but we are in love because they might purchase our company.  It’s a love/hate relationship, and if you’re building an application that’s somewhat generic (web-based email, calendar, online office apps, IM, etc.) it’s shifted to the hate side.  There are essentially two ways to innovate, and if you’re lucky, then you do both of them at the same time:

Innovate in your business model, do what others haven’t done before.
Innovate in your execution, produce things that others have not produced before.

When you’re producing an application that’s been done 20x over before you started (web-based calendar) you have no choice but to pick #2 and innovate in your execution.  Kiko could have kept their neck above water if they had stayed the course and built cool new additions into their application, or expanded its reach/audience/target, but they heard the footsteps and fumbled.  It wasn’t that Google destroyed them, it was that Kiko self-destructed.
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		http://www.businesslogs.com/web_20/the_web_20_exit_strategy_sell_it_on_ebay.php
		http://www.businesslogs.com/web_20/the_web_20_exit_strategy_sell_it_on_ebay.php#comments
		Thu, 17 Aug 2006 22:25:34 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=331
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			Kiko, an online calendar application incubated by Y Combinator, is up for sale on eBay.  The starting price of $49,999 has not been met yet, so we’ll see how it goes.

Traditional exit strategies for companies include being acquired or an IPO, but that’s normally for companies that have at least an inkling of an idea about how to make money.  Unfortunately for many “Web 2.0″ companies (like Ajax homepages, Ajax IM clients, online calendars) it’s a tough proposition since what they’re offering is essentially free somewhere else and has been for many years.  People who start these types of companies are banking on the idea that users would be willing to pay for the convenience of having a traditional desktop application available online, but it’s a harder sell then they imagined.
Some startups in these spaces get acquired (like Userplane) but only if their offering fits in neatly with the new parent company, and that’s not always the case.  In the case of Kiko, they are apparently selling the company/app/domain not because they think it’s a failure, but because they believe their time and resources could be better spent on other ventures.  What those other ventures are, who knows, but let’s hope they’re attached to business plans.
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		http://www.businesslogs.com/web_20/why_some_startups_stumble_and_others_succeed_user_generated_quid_pro_quo.php
		http://www.businesslogs.com/web_20/why_some_startups_stumble_and_others_succeed_user_generated_quid_pro_quo.php#comments
		Mon, 14 Aug 2006 11:38:21 +0000
		Mike Rundle
				

		http://www.fortytemp4.com/?p=330
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			The harsh truth that tech and “Web 2.0″ industry pundits don’t like to talk about is that the vast majority of these new “Web 2.0″ companies are failing.  New companies are starting, mashing up, trying to innovate, but none are close to approaching the success of MySpace, Digg and YouTube and there’s a very good reason for that:

They don’t “pay” their users enough.
Now “pay” is a relative term since no users of MySpace, YouTube or Digg (more on this) are being paid cold, hard cash to publish their content on these sites.  MySpace is a social networking site, YouTube is a video site, and Digg is a cool news site, but they’re all based on user-generated content and without this they would not exist; that’s what binds them together.  Their popularity would never have came if it hadn’t been for the first few users to take time out of their days and write/publish/upload content to MySpace, YouTube, or Digg.  User-generated content is their lifeblood.
So what could possibly interest random Internet folk so much that they would stop what they’re doing and drop content onto these three sites?  Well it’s the quid pro quo my friend, it’s what these sites give back to the user.  If you take a look at the most successful “Web 2.0″ companies and websites out right now, you can basically pick the ones out that will be successful and which ones will not by looking at the quid pro quo ratio, that is, how much bang do these sites give back to the end user as a Thank You for publishing content to the sites.  If you spend X units of time/creativity/effort do you get 3X units of pleasure/entertainment/utility in return, or do you only get 1.2X or .6X? That multiplier is the quantifiable way to figure out if your user-generated content site will succeed or fail.
The Economics Of Quid Pro Quo
Before we can equate the multiplier, we must first understand what we are multiplying.  The basis of this theory is grounded in utilitarianism which is “a theory of ethics that prescribes the quantitative maximization of good consequences for a population”, or, the counting of pleasure or pain as individual units someone can possess.  Essentially if you consider watching TV is good but going to the movies is better, the pleasure found in going to the movies is not a different type of pleasure from TV watching, but rather more units of that pleasure.  If X is a pleasure unit, then TV watching could be 10X whereas seeing a movie could be 20X.  Eating a hot dog could be 3X and watching your team win the World Series could be 5,000X.  The X unit is unchanging, but the quantity of pleasure units varies depending on the activity.
Now it could be said that one’s goal in life would be to pursue activities which maximized the X multiplier, that is, generated the most pleasure or utility.  If you have your choice of driving a free Honda Civic vs. driving a free Ferrari 612 Scaglietti, most people would choose the Ferrari.  If you think of that decision in terms of its utility, then you would be choosing the Ferrari because it is maximizing the amount of pleasure units, as that would be your ultimate goal.
Utility Theory As Applied To User Generated Content Sites
Now back to the article.  Previously I said that the most successful sites (based on user generated content) were the ones that gave the most bang for the buck, or, the most pleasure/utility back to the user.  If I put in X units of effort and a site gives me back 2X units of entertainment, that’s good.  If I put in X units of effort and get back 20X units of entertainment, that’s much better.  On the flip side, if I put in X units of effort and get back 1/8th X units of entertainment, that means the X units of effort I initially put in were a complete waste of time, or, the site took my content and gave me squat in return.
I truly believe that the success of a site based on user generated content revolves around this pleasure multiplier, and sites that are successful have the highest multipliers.  Let’s analyze MySpace, YouTube, and Digg in terms of the effort outlaid vs. the pleasure received:

MySpace
You create a profile and have to give only minimal information about yourself to start.  In return you have the chance to browse millions of random people’s profiles, find friends you haven’t talked to in years, view funny pictures and stories from complete strangers, and possibly meet someone you might spend the rest of your life with.  1X units of effort with a 50X+ unit return.
YouTube
You don’t need to create an account or do anything special to view movies, but if you want you can record a video of yourself and upload it.  In return you can spend hours watching people lip sync to the Backstreet Boys or see puppies play with kittens.  If you do create an account and upload a video, then in return you could feel like a minor celebrity when thousands subscribe or watch your videos. No account: 0X units of effort with 20X+ unit return.  With uploaded video: 5X units of effort with 40X+ unit return.
Digg
You don’t need to create an account to just find cool stories, but if you do create an account you can actively vote on those stories as well as post new ones. The return is that you are provided with the top tech stories of the day, or if you write a great article and post it to Digg, your site could get tens of thousands of users in just a few hours. No account: 0X units of effort with 10X+ unit return. With account and uploaded story Dugg to frontpage: 5-10X units of effort (took effort to write the story) with 50X+ unit return.

Obviously these multipliers aren’t set in stone, but you can easily see that these three sites ask very little of the user, but in return give them a lot of entertainment or utility back.  A ton of bang for the buck = people who tell all their friends and return every day.
Now let’s go a site that isn’t on the level of these three and try to determine the utility it is providing users.  Is it asking too much of users?  Are they not giving back enough in return?  Both?

Squidoo
You signup for an account and create a lens where you write content on a specific topic, you can create multiple lenses.  In return, if your content is good enough you could earn about $30 but the vast majority of lens creators make less than few bucks per month. 5-10X units of effort (writing content for your lens) with a 8-15X unit return (a couple bucks). Verdict? Not worth the effort.

As you can see, Squidoo asks a lot from its users, but in return doesn’t give back enough to make it worthwhile.  The delta isn’t large enough to make the initial effort worth the returned pleasure, so fewer people use the site, fewer people recommend it to friends, and so on.  I don’t believe Squidoo will be a success based on many factors, but the most telling factor is the low returned value after the high initial effort put in by end users.
The Web 2.0 Factor
This theory is about sites that thrive on user generated content, but it can be applied other places as well.  Think about a site you went to once and didn’t come back to, what was your reasoning?  It was probably because there wasn’t enough “to the site” to make you want to come back.  It didn’t solve a particular need or problem that you were having, or maybe it was just boring.  The key to having a high comeback rate is to provide some sort of value to the user that they previously did not have, and that’s the true way of building a successful company.
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		http://www.businesslogs.com/blogging-advice/coattail_riding_instructions_for_youtube.php
		http://www.businesslogs.com/blogging-advice/coattail_riding_instructions_for_youtube.php#comments
		Wed, 02 Aug 2006 08:27:29 +0000
		Mike Rundle
				
		
		

		http://www.fortytemp4.com/?p=327
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			Whether you believe YouTube is bigger than MySpace or not (I’m in the “not” wagon) there are still some things to keep in mind if you’re trying to work with the video behemoth.  YouTube may or may not be flipbait because of the copyright issues, but there’s no reason why your company can’t work some YouTube videos into its normal offerings to better your overall interactive experience.

Although you might be itching to flip the camera on and jumpstart your 15 minutes of fame, please don’t.  Here’s a list of things that you shouldn’t be doing because 1) they’re played out, 2) boring, or 3) not innovative whatsoever.

1.  Don’t pretend to be Rocketboom
Rocketboom is like lightning in a bottle, once the cap is off the lightning escapes and won’t come back.  Don’t pretend to be zefrank either — his delivery and style is unique and immediately recognizable.  Make your own style, work at it, and make it popular.  Don’t bite others, be original.  If you imitate others then you’re just spinning your wheels and not moving your site forward.
2. Don’t do vidcasts just because everyone else is doing them
Too many 1-man media companies think they can make readers think they are larger by doing random vidcasts, which is not a good idea.  If everybody else is doing something and you follow suit, they’re already 10 steps ahead and are planning their next move.  It’s not smart to be the last company in “a space” that was only formed a few months ago because you’re not innovating, you’re just following.  Be a leader and not a follower.  How can you be original if you only do things that others have already done?
3.  Don’t be boring.
This almost goes along with #2: if you have nothing to say or cannot be interesting on cue, then don’t record yourself doing nothing.  If your words are boring, then reading those words in a monotone voice while looking into a camera is even worse.  Be interesting, have something to say, do something cool, make your readers’ time valuable by doing something worthwhile in your video.  Don’t read a blog post you already wrote, don’t stare into the camera and utter random nonsense, don’t do anything that wouldn’t hold your own attention if you were forced to watch yourself.
So now that we’ve got the Big 3 mistakes that people make when integrating YouTube into their existing online offerings, let’s go over some things that are cool, useful, innovative, or potentially revenue-producing.
1. Use YouTube as supplemental content, not the highlight.
Interjecting YouTube videos into a blog post works if the content can stand by itself and still be interesting.  Find cool videos and put them in your already cool blog post and you just increased the value of what you published.
2. Be original, be fun.
In stark contrast to weblogs, if a user is viewing a short video then you have their complete attention — so make the most of it.  Don’t just sit there, do something interesting.  Make a fool of yourself, sing, dance, run around, get naked, make my time worthwhile and I’ll come back looking for more…. especially if you’re naked ;)
3. Extend YouTube.
YouTube has an API so you can interact with content and deliver it in new and useful ways.  On top of your blog’s category archives you could pull in recent videos related to that category or tag, or integrate videos into your site’s search feature, or have a random and topical video rotate on your homepage, or whatever.  Get creative with it, add value to your own site’s experience by integrating videos and YouTube content.
Just Like With Everything Else
Whenever something big and new arrives, everyone trips over themselves trying to embrace it and exploit it, be it “Web 2.0″ APIs, RSS feeds, Google Maps, or YouTube videos.  Resist the temptation to sit in the echo chamber — lay back and think before you work because at the end of the day, if your mashup or integration didn’t add as much value as you thought then your work is a failure.  Don’t do what everyone else is doing, but take it a few steps further and add more value that others haven’t thought about yet.  Nobody wants a “me too” attitude, so make sure to innovate at every step instead of just keeping up with the Joneses.
Got any other good YouTube Do’s or Don’ts?
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