One thing you can say about the Flickr team – there’s some fight in ‘em. They apparently were not super pleased with our coverage of their annual (and unofficial) Grant-Pattishall Award given each year to the Yahoo engineer who “who breaks Flickr in the most spectacular way.” I’m not sure why, I think the award is fun.
So now they have a new award, called the Bogan-Martin Award: “The Bogan-Martin Award is given yearly to the Flickr staff member who inadvertently generates the most spectacular media overreaction to a personal comment or inside joke.”
So who won? Daniel Bogan this year, who was also this year’s winner of the other award. And last year was Chris Martin. Both winners names link to previous posts we’ve done. Suggesting that we’re the media that is engaging in the spectacular overreaction.
Ok, Flickr. You won this round.
On Friday, we got a chance to talk to Graham after his morning panel with SV Angel’s Ron Conway. He discussed how his strategy has evolved over the past five years and why the balance of power is shifting in Silicon Valley. See videos ahead.
Grammy award winning artist Chamillionaire (a.k.a Hakeem Seriki) has become a regular at tech conferences, perhaps because the hustle and flow culture of the rap business and the hustle and flow culture of the tech business are surprisingly similar. His stories of struggles between artists and music labels are resonant to anyone who’s experienced the relationship intricacies of startups and VCs.
Chamillionare got his first taste of the magic of the Internet in 2004, with the launch of his first website Chamillionaire.com. The community around the site’s message boards exploded unexpectedly, “at the time it was really creative and really cool,” he told Mike Arrington at today’s Social Currency CrunchUp.
Other highlights from the interview include Mike Arrington calling the hip hop artist’s entourage “goofy,” asking, “What kind of rims are cool now?” and ending with the memorable,”You guys know how to manipulate the tech industry to get what you want, but you have the lamest phones …”
In retort, Chamillionaire insisted that he carries around his 3 phones, a Blackberry Curve 8700, an iPhone 3Gs, and a Sidekick XL, for “simplicity” and joked that he checks in as “Mike Arrington” when he stays at hotels. On why he attends tech conferences, “I just want to get a business card from each of you.”
Curious, we caught up with the artist after the panel and asked him what exactly he thought the tech community had to offer?
“Everything. Access to people through social networks. We don’t build these social networks, we don’t blog on TechCrunch. People here are like what would a rapper care about TechCrunch for? It’s crazy, it’s about distribution of information. It’s just getting information to people, that’s just what major labels are. They’ve got companies that distribute for us now so it’s like cutting the record labels out – I’m doing you a favor, you’re doing me a favor and I’m getting to where I need to get to. “
On his future plans? “I just want to innovate.” He said, insisting that he couldn’t reveal any more information.
Video of his onstage interview, below:
Perhaps you’ve heard: social games maker Playdom was acquired by Disney a few days ago for a deal potentially worth north of $750 million. Playdom CEO John Pleasants took the stage today at our Social Currency CrunchUp in Palo Alto, to talk a bit about the deal and the future.
Pleasants says that he’s not exactly sure what his title at Disney will be yet, but he thinks he’ll be the General Manager of Playdom. He’s also not sure if Tapulous (another gaming company just acquired by Disney) will be under his department, but he doesn’t think so. And he made sure to clarify that the deal was for $563.2 million plus an earn-out of up to $200 million — so he’s not super super super rich, he’s just super super rich.
But the most interesting thing Pleasants noted was that he recently heard (from his own source, apparently) that half of all users on Facebook now play social games. More impressively, 40% of total usage time on the service is spent on these games. That’s meaningful, of course, because “a huge amount the Internet is on Facebook,” Pleasants stated.
When moderator Michael Arrington asked about changes Facebook has made recently to slow the viral spread of these types of games, Pleasants acknowledged they’ve all taken a hit. But he says they’re working with Facbeook on new ways to drive growth. But he made sure to say they had to do it without spamming.
When talking about what’s next, Pleasants notes that they’ve released two new games in the past week alone. When Mike suggested that most of the games are just a combination of blindly pushing buttons, Pleasants noted that things were evolving, and that games were about to get more social.
The biggest issue going forward though? “The lack of credit cards with children,” Pleasants half-joked.
Smart window startup Soladigm announced today its plans to build a factory in Olive Branch, Mississippi. The Khosla Ventures and Sigma Partners backed company makes dynamic glass windows that can be tinted on demand to block excess light and heat.
Founded in 2007, Soladigm had been operating in “stealth mode.” The company employs about 50 people in its Milpitas, California headquarters, and plans to hire about 300 employees over the next few years for the Mississippi plant.
A $40 million loan and another $4 million in incentives from the state influenced Soladigm’s decision to locate operations in Mississippi. Soladigm pledged to invest $130 million by 2016 in its business there in order to receive the state’s full incentive package.
The new Soladigm plant’s proximity to Memphis transportation connections will also help the company quickly ship its glass panels.
According to the company, its tinted windows can eliminate the need for blinds and reduce building heating and cooling costs by up to 25%.
Criticising Valleywag in 2010 is something of a pointless exercise, like offering diplomatic counsel to the Ottoman Empire ten years after the Treaty of Lausanne. More pointless still, attacking the site’s titular editor Ryan Tate is like appealing to the guy responsible for writing parking tickets in Constantinople.
I mean, I get that.
And yet despite the irrelevance of Gawker’s saddest sub-domain and the tragic impotence of its editor, the influence of its parent means that when a Valleywag story oozes its way on to the front page of Gawker.com, it’s important to take notice. And to mop it up so that no-one slips.
Here goes then.
Background:
Some time on Tuesday afternoon, Ryan Tate woke up and padded over to his laptop to check his email. Amidst the tips from disgruntled Friendster employees and pep-talk advice mails from Owen Thomas, there was an email from Nick Stern, a photographer who had spent a few days stalking Facebook founder Mark Zuckerberg. The images were so entirely un-newsworthy – photos of Zuckerberg’s modest house, photos of his “unremarkable” tennis shoes, photos of Zuckerberg’s entirely unfamous girlfriend – that no other news organisation wanted them. Could Gawker spare any change?
Pausing just long enough to wipe the resulting sticky goo from his keyboard, Tate hit reply. “Oh God, YES! We’d love them. It’ll be a Gawker exclusive!”
Of course, much of the above is bullshit speculation, but the result is the same: on Wednesday, under a “Gawker Exclusive” banner, and the headline, “Mark Zuckerberg’s Age of Privacy Is Over” Tate published twenty candid photos, clearly identifying Zuckerberg’s home, his girlfriend, his friends and his regular haunts. In “justification”, Tate wrote…
“If it feels a little naughty to take such a close look into Zuckerberg’s life, remember that this is the executive who pushed the private information of Facebook’s hundreds of millions of users progressively further into the public sphere.”
Hmmm, Ryan.
No, not “hmmm”. That other thing.
GO FUCK YOURSELF. I mean, seriously, Ryan, how did you even write those words without slitting your wrists and bleeding out pure shame onto your copy of Pageviews For Dummies? Even if you accept that Facebook’s handling of user privacy was a misstep (which I don’t entirely), to argue that it’s analogous to following someone around with a camera all week and publicising his home address on the Internet just defies belief. Especially when that person is a billionaire who is more of a target than most for the assorted freaks and lunatics who slosh about online.
But of course Tate had no choice but to cling to his “tit for tat” public interest justification. After all, the photos had no inherent news value (“the most interesting thing about Zuckerberg’s life may well be how ordinary it is,” says Tate in his post) and nor is there an obvious “public figure” justification. Facebook is a private company, Zuckerberg (especially compared to other billionaire CEOs) doesn’t court personal publicity outside of the business press – and his girlfriend certainly doesn’t. All the publication of these pictures achieves is a hundred thousand or so page views, at a cost that includes the personal safety of a 26 year old who, despite his modest home and shoes, is worth, let’s not forget, some $4 billion. If I were his girlfriend, or anyone else close to him, I’d be terrified right now.
What Happened Next:
After reading the story, I tweeted to Tate…
More than anything, I wanted to know if he was proud of his work; whether reading it back he thought to himself “yes, I have done a good thing today.” But at worst I wanted him to defend it. In fact he did neither, instead he replied…
Then, as if to underline his point – that the justification for posting the photos was that he’d done it before – he emailed me the links, with the heading “BREAKING! Valleywag runs unauthorized pictures of people’s homes and girlfriends!!!11!”
After some back and forth over the irrelevant question of whether Tate commissioned the photos himself or whether they landed on his desk as a fait accompli, I got back to the point…
From: Paul Carr
To: Ryan TateYou’re neatly dodging the question though: do you stand by the posting of the photos as news? Are you suggesting a public interest justification for publicizing where a billionaire lives? “We’ve done it before” is not a justification; as any serial killer will tell you.
His answer? An email containing nothing but the contact details of Editor-in-Chief Remy Stern and Founder Nick Denton. The subtext: “I can’t justify my own work; you’ll have to talk to My Two Dads.”
And so I did. I particularly wanted to understand Denton’s take on the misadventures of his underling. For a start, it’s generally accepted that there is only one period in Valleywag’s history that the site was any good, and that was when Denton was running it himself. Also, for all of Valleywag’s prying into the lives of Silicon Valley “celebrities”, Denton held on to at least one basic principle: decreeing that the lives of their non-famous girlfriends, boyfriends, wives and husbands – “civillians” as he called them – should remain off-limits.
So what gives? Has Denton changed his policy or, like in so many other situations, did Tate simply not get the memo?
His reply deserves to be published in full (with his permission, for which I’m grateful).
Hey, Paul –
Thanks for your note.
Facebook is anything but a private company; it has 500m stakeholders. And as Silicon Valley has grown in importance, tech executives have become celebrities. Mark Zuckerberg generates more interest among our readers than most Hollywood stars.
Now you can argue that he doesn’t trade on his celebrity in the same way. But that’s not entirely true. He poses for photos for magazine covers and shows up at conferences. It’s not like he’s a complete recluse.
As for the address… Well, first of all, no, we didn’t publish it. But you can deduce it. And? With online databases such as Nexis Public Records, most people’s addresses are now easily available. You can find all mine there, for instance.
Or here.
I think you’re trapped in a previous era — one in which journalists had special access to information and dispensed it sparingly and “responsibly.” Now there’s much less distinction to the profession: everybody has access to formerly privileged information and anybody can publish it. We’d all better adjust.
Your final point: that even if Zuckerberg was fair game, the girlfriend wasn’t. I have most sympathy for this. But, again, apply the Hollywood model. If an unknown was having an affair with Angelina Jolie, they would no longer be an unknown.
Zuckerberg is the Angelina Jolie of the internet. The media interest in him is undeniable. His lovers, friends and acquaintances — like those of any other celebrity — are caught up in the vortex. He has to make a choice; and they have to make a choice. And none of the choices — retreat from the public eye, abandonment of friendship — are palatable.
Feel free to publish any of this reply.
Regards
Nick
Conclusion:
Reading that note, two things screamed out from the page. One: how conflicted Denton sounds in writing it – speaking of his “sympathy” for my point about Zuckerberg’s girlfriend and acknowledging that the choices that his kind of reporting forces those close to tech “celebrities” to make are “unpalatable”. It can’t be easy to know your editors are doing bad things, but that those bad things are the only way they’ll ever attract page views.
And two: the fact that it was only Denton, and not Tate, who had the wit and intelligence to attempt to justify Gawker’s decision to publish. (In fact, while Denton was accounting for the behaviour of his boy, Tate was publishing a follow up story containing photos of Zuckerberg at an employee’s wedding in India, desperately arguing that his interest in them “underlines Zuckerberg’s growing global celebrity”. Just stop digging, Ryan.)
And it’s for that second reason – his inability to stand by his grubby work – that Ryan Tate, if he has an ounce of pride left in his body, needs to resign. And if he won’t do that – which he won’t, because he hasn’t, and because he knows that the position of village idiot has already been filled – then it’s for that reason that Denton needs to fire him and either go back to running Valleywag himself, or close it down once and for all.
In the meantime, to anyone with a cameraphone or a Flipcam who spots Ryan Tate out and about in the Bay Area: you know what to do. Follow him. Follow him everywhere. Take hundreds of photos. Bug the living shit out of him. Make him understand how unpleasant it is to be followed to your front door by a stranger with a camera.
And once you’re done stalking? Again: you know what to do. Delete the footage. Don’t even think about uploading it anywhere. Yes, there’d be a delicious irony in “Ending Ryan Tate’s Age Of Privacy” because he’s done it to someone else. But, as much as he’d love to feel that his life passes a public interest test, it doesn’t. And just because Ryan Tate has done something hideous and unjustified to someone else, doesn’t mean you should do it to him.
You’re better than that.
Online monetization platform gWallet, which offers social gaming developers a variety of ways to monetize their apps and boost engagement, is looking to put its money where its mouth is: the company is launching a $20,000 cash guarantee to any social gaming publishers that don’t generate more revenue when they switch from their current monetization platform to gWallet.
To participate, publishers are being asked to implement a simultaneous, head-to-head test over the span of thirty days (you can sign up starting today, with the 30 day window beginning August 1). At the end of that time period, if your revenues from gWallet aren’t higher than they are on you original implementation, then the service will pay out the guarantee. But you’ll have to be a pretty sizable game to participate: to qualify, gWallet says that publishers need to be new to the platform, and need to have at least 250,000 daily active users. That said, it sounds like the the company is willing to discuss a guarantee to apps with a smaller user base if you email their partner@gwallet.com address.
gWallet launched late last year, positioning itself as a more trusted alternative to other ‘Offers’ companies in the wake of Scamville. One of the company’s more popular products is the video offer, which can reward an app user virtual currency in return for watching a video ad (they also have more traditional offers).
This is a highly competitive and tough space; major Offers company OfferPal recently had to downsize in the wake of Facebook deciding that TrialPay would be its preferred Offers provider. Still, there’s plenty of room to innovate (and give developers a bigger slice of the revenue) — if gWallet can prove that it earns devs more money than its competitors, it will likely do just fine regardless.
Tomorrow night, July 31, Twitter has announced they are having some planned downtime. Beginning at 11 PM PT, Twitter will likely be down on and off for up to 5 hours, Twitter warns.
The reason for the downtime? NTT America, Twitter’s hosting provider is upgrading a part of the internal network. This is interesting because Twitter is in the process of opening their own data center in Utah later this year. Despite the new tweet digs, they’ve said they’ll keep working with NTT America, so this maintenance is clearly necessary.
If you see the picture above tomorrow night, you’ll know what’s up. There will be a link on it to the Status Blog where you can get status updates on the work.
It’s takes a certain type of person to get excited about a work productivity tool. Mark Nielsen and Patrick Carmitchel, unsatisfied with 37Signals‘ Basecamp, have decided to disrupt the productivity software industry (see their incredibly twee video above).
Says Nielsen “We decided we’d rather not see the light of day for awhile than have to live with knowing that with just a little bit of creative, a pinch of logic and a dash of sexy, we could revive the productivity software world with a tool that would even make Apple cry.”
Previously unknown to the blogosphere, Nielsen and Carmitchel emailed us at 2am last night and emphasized that they were out for 37Signals’ blood (we’ll get more into why we actually listened in a later post). When reminded that the formidable former Facebook co-founder Dustin Moskovitz was also in the collaboration tool space, joining the likes of Salesforce, Zoho, and Atlassian with his stealth startup Asana, they replied “We’d like to see how [Dustin Moskovitz's] deep pockets stand up against moxie and energy.”
The RULE.fm product itself looks like what would happen if Apple got serious about productivity software, with much emphasis on design aesthetics. Right now its basic function is a ramped up contact list manager with real time updates from your contacts pushed to you, a Yammer-like discussion area, a place for tasks, and a communal file sharing functionality. Nielsen describes it as “a place to know and understand everything that’s going on with in your organization” and hopes the company will eventually expand into wikis, customer retention management and accounting tools.
For those curious, the tour is live on the RULE.fm site right now, and the platform itself will go live on Tuesday August 3rd, making the productivity software industry just a little bit more badass.
Today at our Social Currency CrunchUp in Palo Alto, CA, James Lamberti, VP of Global Research and Marketing for InMobi, sat down with our Michael Arrington to tell us a bit about mobile advertising.
InMobi is the largest independent mobile ad network in the world. Overall, they’re number two behind Google’s AdMob. That earned them an $8 million investment from Kleiner Perkins and Sherpalo Ventures a couple weeks ago. But what’s particularly interesting about InMobi is how well they’re doing outside the U.S.
Out of inMobi’s 16.9 billion mobile ad impressions globally, 2.6 billion are in Africa, more than the US’s 2 billion. 10 billion are in Asia, no surprise considering inMobi was founded in India and had more time to develop reach, while Europe follows Africa with 1.6 billion and the Middle East .5 billion. InMobi’s mobile eCPM development is highest in Europe at 29%, with North American coming in a close second at 24%.
When inMobi’s development rankings, are stack ranked by country, Australia comes in first due to its high adoption of the iPhone and Malaysia performs at number two. Not surprisingly the iPhone platform dominates inMobi’s marketshare the US, being responsible for 38.2% of all mobile ad impressions. Globally Nokia trumps other platforms serving inMobi ads, at 22.2% of the market.
Lamberti says that InMobi’s biggest growth markets are in the US, Japan, and South America and the US, partially because of the benefits from Google Ad Mob changes on the iPhone. While 60% of all mobile iPhone impressions are still in the US, inMobi is now poised to to monetize the 40% that aren’t.
Video and slides from their presentation below.
Today during our Social Currency CrunchUp, Yelp CEO Jeremy Stoppelman and John Hanke, a Google VP of Product Management, took the stage. Given that the two companies seem to be at odds with one another recently (following a failed acquisition), it was a little tense.
Specifically, Google’s strong moves into local with their new Places push seem to be going right at Yelp’s core. Sure’s it’s potentially about more than just local venue reviews, but that’s a huge part of it. And that’s what Yelp is all about.
Moreover, Google is using Yelp data to bulk up their Places offering. Yelp can’t like that too much. In fact, we’ve heard they’re particularly unhappy because they used to have a deal with Google for this data, but they pulled out of that deal a couple years ago. But Google decided to use Yelp’s data anyway simply by crawling it. Yelp can’t stop them from doing that unless they want to delist themselves from Google — a move which could kill them.
On stage, Stoppelman acknowledged that Yelp used to have such a deal with Google. When moderator Erick Schonfeld asked if Google was now getting that data by crawling the pages, Hanke responded with “Look…” This drew some laughs from the audience.
But Hanke continued by saying that “there have to be Yelps in the world.” What he means is that Google needs these type of services to be able to point users to them. Of course, Stoppelman argues that while Google used to point users to services like his, they’re moving towards showing that data on their own pages. He believes that Google no longer likes sending large amounts of data to huge sites.
Hanke said that statement wasn’t fair. “We look at what people want,” he said. Google is trying to understand Places better — if Yelp has the best content, we’ll show that, he said. He asked if Google knows what information a user is trying to get at, shouldn’t they show it? “Should we pretend we don’t know what they’re really looking for?“
Stoppelman’s said he understands that argument but believes that if Yelp does have the best content, Google should give people a way to get there as fast as possible.
Basically, agree to disagree.
When Schonfeld asked about the failed acquisition, Stoppelman coyly noted “It’s complicated.” The audience liked that. He caught himself though, “…whatever may have happened.“
Hanke acknowledged the tension between the two companies. But again, he said it’s all about doing what’s best for the users.
Yeah, expect that tension to continue.
Social gaming company Zynga is growing at a rapid clip. More importantly, their revenue is growing at a rapid clip. And they need a big gun to handle that. They believe they’ve just got him: Dave Wehner, formerly a managing director at Allen & Company LLC.
Wehner is stepping in for current CFO Mark Vranesh, who is becoming chief accountant of Zynga. While they obviously won’t say it, it should be fairly clear what this shuffling is all about: it’s not CFO, it’s another three-letter acronym, IPO. While Zynga is still undoubtedly a ways away from such a move, they have to get their finances in order now. Especially since they’re growing so quickly.
At Allen & Co. Wehner was in charge of a number of key investments, including Pandora, Quantcast, and StubHub. He led the corporate finance teams responsible for capital raises and M&A in Silicon Valley.
This move follows moves by LinkedIn, who is also position itself for an IPO run. Interestingly enough, it was just reported that a Facebook IPO was just pushed from a possible 2011 timeframe, to 2012 — well, probably.
Facebook is obviously a key to Zynga, as most of their users come from the giant social network. But a new investment by Google in Zynga points to the search giant getting into the social gaming realm as well.
Last month, we noted that Twitter was testing a “You both follow” feature, showing users you and another user both follow. That’s interesting, but not particularly useful. Today, they’ve begun to roll out a new “Suggestions for You” feature which looks at who you follow, and who the people you follow follow, and suggests new people for you to follow. Yes, just like Facebook does. This is very useful.
In fact, this is arguably the most useful social graph feature that Twitter has rolled out yet. A few weeks ago, Twitter rolled out a new name results area for search — which was incredibly helpful for finding celebrities or brands on Twitter. But this is better. This is all about finding people you may actually be interested in based on your current social graph, but for whatever reason, haven’t connected with yet.
Such a feature would be less interesting if it were only tucked away in the “Find People” area of the site. But Twitter is actually going to put it front and center too. When you click on other users’ profiles, you’ll see a “Who to follow” area in their profile space to show similar users that you might be interested in. And when you follow someone, you’ll get other suggestions based on that follow as well.
In terms of how they determine these suggestions, Twitter says:
The algorithms in this feature, built by our user relevance team, suggest people you don’t currently follow that you may find interesting. The suggestions are based on several factors, including people you follow and the people they follow.
[thanks Tyler]
Sorry, BlackBerry fanboys, the BlackPad — or whatever it will be called — is going to flop in a monumental way. Remember how RIM’s last iDevice clone, the Storm, failed in such a public way? Yep, it’s going to happen all over again. RIM has no business making a consumer tablet.
We all need to give major props to Research In Motion. They were really the first major player to make smartphones relevant by offering a nearly-bulletproof mobile emailing system to business. Eventually RIM started making consumer-orientated email devices that worked with personal email accounts. RIM really showed the world that you need email while you were away from your desk.
But that’s where their claim to fame stops. Don’t misunderstand the Canadian company’s importance in consumer electronics’ history. RIM ranks up there with the best of them, but unless the so-called BlackPad is targeted solely at businesses and enterprise users — and all signs suggest otherwise — the BlackPad will fail.
It’s no secret that loyalty programs — like those hole-punch cards that give you a free Slurpee every ten visits — are a great, cheap way to keep customers coming back to your business. Thing is, running these programs isn’t always as easy as it seems, especially if a business wants to do something more complex than the basic “buy ten get one free”. PlacePop is a new startup looking to make these loyalty programs accessible to any business: the startup has built a self-serve platform based around its new iPhone application which companies can use to distribute virtual, custom-branded loyalty cards.
Today, the company is launching at our Social Currency CrunchUp, and it’s also announcing that it has closed a $1.4 million round of funding. Participants in the round include Affinity Labs Founder Chris Michel, Bebo Founder Michael Birch, and James Currier and Stan Chudnovsky, both of whom cofounded Ooga Labs.
At a high level, PlacePop is pretty simple for the end-user: you fire up the iPhone app, swipe until you find the appropriate virtual rewards card, and “check-in” at the venue you’re visiting. And the startup says that a business can get its loyalty program up and running in five minutes.
PlacePop isn’t the first startup to try to tackle rewards, and it faces the same chicken-and-egg issue that its competitors have: you need businesses to actually offer rewards to get users hooked, and businesses aren’t going to bother if the service doesn’t have any users to begin with. PlacePop is taking a few steps to deal with this (and help differentiate the startup): first, it offers a number of other social features, like sharing photos of the places you’re checking into so the app has some utility regardless of if a business is offering a deal or reward. And second, it’s letting you earning rewards points toward venue on Earth, even before a business joins PlacePop.
That may sound a little counter-intuitive, but PlacePop is hoping that it will lead to a sort of community-led guerrilla campaign where users urge their favorite businesses to join PlacePop. CEO Kent Lindstrom explains that users can start checking-in at their favorite restaurants and other venues, and when venue owners visit PlacePop and see that they already have traction on the service, they can “claim” their profile. I’m not entirely convinced this will work (it’s going to get tough to convince users to check in based on the possibility that a venue may one day start offering rewards), but it’s an interesting tactic.
So why would a restaurant want to use PlacePop instead of a service that is already starting to get traction, like Foursquare? Linstrom gave a few reasons: first, PlacePop allows venues to customize and create their own branding for their virtual card. Second, the platform will allow venues to custom tailor how they want to reward program to work — for example, a business could opt to build their own Groupon-style program, where a special deal was activated if 50 people redeemed a coupon.
PlacePop obviously has its work cut out for it. Foursquare and other location-based services are looking to add deals and rewards as a layer on top of their applications, allowing for a more passive approach to earning rewards. Other startups in this space include We Reward, which lets you earn cash for your checkins.
Social search site OneRiot just announced layoffs and staff restructuring on its company blog, in a post entitled “Welcome to the future, it’s coming fast.”
Now, being agile also necessitates making some tough decisions too, if they are the right thing for the company right now. Unfortunately, today, we have had to let a handful of well respected colleagues go. This is a pragmatic decision based on a strategically focused go-forward plan for the company. It’s in no way a reflection of the talent of the people concerned.
While OneRiot’s post does not reveal how many employees or what percentage of staff was cut, it does announce the following executive changes: CEO and Tesla board Director Kimbal Musk will now take on the role of company Chairman and Tobias Peggs, formerly President in charge of Strategy, Sales, Distribution and Marketing, will replace him as CEO. Co-founder Robert Reich will be leaving the company.
OneRiot’s search results are ranked to reflect the realtime social conversations around any piece of content. The company recently tapped both in to the Google Buzz firehose and Facebook’s Open Graph API.
Today at our Social Currency CrunchUp (which is currently being livestreamed here), Blekko founder and CEO Rich Skrenta gave the first live demo of the startup’s innovative search engine (be sure to check out our initial review). To mark the occasion, Blekko is giving out an invite to 500 lucky TechCrunch readers — just be one of the first people to email a message requesting an invite to techcrunch@blekko.com.
GM is banking large on the Chevy Volt and apparently feels confident about its success. The auto maker just issued a statement, which conveniently coincides while President Obama is touring the assembly plant, detailing the increased production estimate for 2012. The Detroit-Hamtramck facility will now pump out 50% more than previously detailed, an increase to 45,000 from 30,000.
Chances are this production bump is dependent on a successful roll-out of the first 10,000 vehicles slated to hit dealers later this year. If the $41,000 Volt quickly flops, then GM will probably scale the production numbers back to the initial estimate or less.
According to Groupon CEO Andrew Mason who is on stage right now at Social Currency CrunchUp, the breakout deals site Groupon was originally a side project Mason started in order to make money, “We tried a zillion things” Mason said.
Including a cheesy-sounding slippers with flashlights deal, which Mason describes as “act of desperation, pretty impressive considering that the company is currently making $365 million in revenues, a million a day according to our sources. Mason gave no thought whatsoever as to whether or not it would work.
With Groupon now in over 170 cities in over 22 countries, its come a long way from flashlight slippers, and Mason aspires to one day be a replacement for the classic city guide, “We’re focused on creating a market as efficient as possible with regards to getting as much exposure to local business as possible.”
From the humble slipper beginnings, to currently selling deals on laser eye surgery, Mason has not just created a business, he’s created an entirely new business model, now with over 500 clones. Couponing is currently the hottest thing on the internet; Asking the CrunchUp audience whether or not they had bought a Groupon deal Mason joked, “Raise your hand if you’ve only bought a Groupon so you could figure out how to clone us?”
Update: The original slippers with flashlights Groupon, below.
Photo: Uneasysilence
Today, during our Social Currency CrunchUp, angel investor Ron Conway had some interesting data to share for the first time. Conway says that his company, SV Angel, has recently done an audit on the over 500 companies they’ve invested in over the past 12 years. And he was surprised with the results.
Conway expected it would show that about one-third of companies fail, one-third get investors their money back, and one-third bring a 2x to Google-x return (Conway invested in Google early on). But that’s not the case. Conway noticed that during the Internet Bubble in 1997 to 2001 — the failure rate (startups that go out of business and the investors get nothing) was a staggering 77 percent. “It was catastrophic,” he said.
But things improved. The failure rate in recent years — since 2002 — has dropped to about 40 percent, Conway says. He makes sure to note that that’s just his portfolio — which they’re picky about. They only invest in about one of every 40 companies they see.
Conway notes that he was able to make it through the Bubble years because of a very few smart investments in Google, PayPal, and others that also took place at that time. “We were lucky, others weren’t,” he notes.
He also notes that entrepreneurs have a 66 percent chance of being successful on a startup if it’s their second one. But that’s also partially because they’re often doing a second startup if they were successful the first time around.
All that said, Conway notes that his data shows that regardless of the time period — Bubble or Boom — the rate of very successful outcomes has stayed roughly the same. With that in mind, “anytime is a good time to start a company,” he concludes.
Conway says there is a misconception that “every 10 years we get a Google.” “That’s not true,” Conway says. He notes that AskJeeves came, then six years later, Google came. But then six years after that was Facebook. And now the big companies are coming faster. After Facebook, it was only four years until Twitter came around. Then it was two years later that Foursquare, Zynga, and others have come along. “Great companies are being created at a much greater rate,” Conway says.
You can watch the rest of the Social Currency CrunchUp live here.
Today at our Social Currency CrunchUp in Palo Alto, CA, Michael Arrington sat down with investors Ron Conway and Paul Graham. Obviously, these are two of the biggest names in early-stage investing (with SV Angel and Y Combinator, respectively).
Both Conway and Graham had some interesting data to share. Conway, in particular, was able to give some great numbers because he’s recently done an audit on the over 500 companies he’s invested in over the past 12 years.
You can also follow the full Social Currency CrunchUp live here.
Below find my live note (paraphrased):
MA: Ron Conway is the founder of SV Angel which is a $10 million angel fund.
RC: Over 500 companies I’ve invested in.
MA: Ron has some new data to share today that he hasn’t shared before. It will be great to hear that data. Paul Graham is the co-founder of Y Combinator. You guys have funded 212 companies?
PG: 208 companies. 72 companies a year now. First investment was in 2005.
MA: Yesterday was the Angel Conference. 8-10 super angels were speaking, then me. I presented an argument that perhaps Y Combinator and angel investors were destroying Silicon Valley. Ron wants to rebutt that argument. The “Dipshit” argument.
RC: Well referring to these entrepreneurs as dipshits is bullshit. It’s bullshit in my opinion. It takes a lot of guts and passion to start a company. There’s too many M&A in the $25 to $50 million dollar range. Some of them could have been building the next huge company — but they sell too soon. But that’s the entreprenuers decision to make. But the real fallacy is that it’s hurting Silicon Valley. Because the exits are going up it’s helping.
PG: Around 10% or a little more get series A round from VC funds. Anyone who gets that knows they can’t sell for $25 million.
MA: What about the other 90%?
PG: Well most go to angels, the 10% is just from actual VCs. So everything you said if false.
MA: Let’s talk about Mint. Ron you had a stake. Sold for $175 million to Intuit. There’s an argument they could have not sold and become the next Intuit. Some VCs wanted them to take money off the table instead. Same with Aarvark. Investors were begging them to keep going. Isn’t that a bad thing?
RC: Well they’re good examples, but they didn’t stop hiring after being bought. Their parent companies now have a lot more money. And it’s about scaling the idea — much easier now.
MA: There’s been a trend in deals. Facebook has 5 or 10 in the pipeline right now. A small amount of cash, and no stock — but the employees get stock. Some investors complain this is ridiculous — to fund a hiring process for Facebook.
PG: The way to make money isn’t on these small deals anyway.
MA: But if they get a tenth of percent in options — that’s a big deal.
PG: That sounds wrong.
MA: I”m never wrong.
RC: I have another ulterior motive. Founders of Hot Potato, FriendFeed, and Parakey won’t be at Facebook their whole lives. An entrepreneur is an entrepreneur.
MA: Let’s talk data. Paul you have enough companies now to predict if a startup will be successful. Ron, we talked about your recent audit with investments over 12 years. And you were suprrised. You thought it would be different.
RC: I’ve invested in 500 companies over 12 years — there’s a ton of data. People ask all the time what’s the success rate. 1/3 fail, 1/3 you get money back, 1/3 you get 2x to Googlex — I THOUGHT. That’s not accurate. If you go back to the bubble: 1997-2001 — the failure rate (out of business investors get nothing) was 77%. It was catastrophic. But we got Google, PayPal, etc. We were lucky. Others weren’t. That failure rate has plummeted to closer to 40% now. That’s post-Bubble from 2002 to today.
PG: But the failure rate is going to be much higher overall. This is just your portfolio.
RC: That’s right. Just our portfolio that we picked closely from. Repeat entrepreneurs have a 66% of being successful on startup #2.
MA: Does it matter if they were successful the first time?
RC: Well 70% of those companies had a successful first exit. Funny how that works.
RC: A high percentage had huge flame outs too. A third.
MA: What’s the average age of investment?
RC: I don’t know. It’s 25 and under.
PG: Ours is 26 — yours have to be older.
MA: What’s the ROI been?
RC: I haven’t shared that — probably never will. There’s more money coming in. Two more data points: entrepreneurs who start a company, regardless of the climate — since 2002 to today — we’ve had ups and down. Entrepreneurs have the same chance of success — Anytime is a good time to start a company.
MA: Who is the coolest entrepreneur you’ve ever met?
RC: I’m gonna dodge that bullet and say Shawn Fanning. He’s started 3 companies.
MA: Zuckerberg vs. Fanning in the startup pit. He takes him out at the knees right?
RC: Zuck has grown in maturity at an algorithmic scale. He’s a leader. You are a different person than you were 6 months ago. One other point that I think is interesting. People are saying ‘every 10 years we get a Google.” That’s not true. I invested in AskJeeves, then came Google. 4 years later was Facebook. 2 years later was Twitter. 2 years later was Foursquare, Zynga, etc. Great companies are being created at a much greater rate. Awesome news for entrepreneurs. Giant companies every 2 years.
MA: Paul your data has helped you pick entrepreneurs.
PG: We haven’t had enough exits. We noticed that 4 person teams have done badly. We’re not for sure why, but I have a theory. 2 and 3 is good but 1 isn’t great. We’ll fund them, but 2 and 3 is optimal
MA: What about 2 if they’re dating.
PG: It depends. If they stay together. Or if they’re married.
MA: What if you’re gay?
PG: So far it’s all good.
MA: Women?
PG: Only 14 women out of 450 so far. But that’s just because of the applicant pool.
Google has been cleared of any wrongdoing relating to Wi-Fi snooping in the UK. Well, partially cleared. The country’s Information Commissioner’s Office, whose job is to “uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals,” has said that “it is unlikely that Google will have captured significant amounts of personal data” during its Street View mappings.
Google has added weather data to its Google Earth application. As of now, the new feature only supports locations in North America and parts of Europe.
In January, we broke the news that prolific Silicon Valley angel investor Dave McClure was to set up its own venture capital fund.
Yesterday, the man filed for the fund with the SEC, providing us with more details (hat tip to FormDs.com). The name will be 500 Startups – McClure has long called himself the master of 500 hats – and the initial fund will amount to max. $30 million according to the filing.
McClure has turned to 99 Designs to come up with a logo for the fund (my favorite so far).
Here’s part of the brief for the logo design:
500 Startups is a new, edgy, risk taking seed fund which invests in early stage consumer internet companies.
Incubator/seed investment funds are popping up left and right and we’re looking to differentiate ourself through edgier design. Our founder likes to swear. In public. A lot. Think Ari Gold, but for tech companies and without a suit.
We are not — *not* — your typical fund composed of a bunch of stiff white guys sitting around a board table. We’re young. We’re diverse (Women! People of color!). Our investments are blustering balls of sleepless eagerness, And the markets we’re looking to dominate are murky and emergent.
Our values:
- “Fun at All Costs”… authentic, down-to-earth, *real*
- Creative, Smart, Innovative Environment
- Learn & Educate at Same Time
- Move Quickly, Take Risks, Make [Manageable] Mistakes
Sounds like McClure, alright.
For your reference: McClure has been investing in early stage startups for years.
He is a direct angel investor in a half dozen or more startups, including Mint, Simply Hired, Mashery, bit.ly, UserVoice, SlideShare, TeachStreet and others. And he has invested in dozens more through fbFund, a $10 million Facebook investment fund backed by Founders Fund and Accel, and FF Angel, a Founders Fund early stage fund.
Apple’s earnings and revenue growth in mobile have been awe-inspiring to witness. From zero presence three years ago, Apple is now the most profitable cell phone maker in the world.
Apple’s success in this compressed period has helped it become an enormous buyer of components. In fact iSuppli projects that next year Apple will become the second-largest semiconductor buyer worldwide and may edge out HP in 2012 to become the world’s largest.
Though this scale presents Apple with enormous bargaining power, it also begs the question: Should Apple own its own wireless chip development?
This week’s rumors that Intel is about to acquire Infineon’s wireless chip business to make a run at the smartphone market bring this question front and center. Infineon is Apple’s sole supplier for cellular basebands, the core chipsets used in mobile phones to handle voice and data communications.
Based on Apple’s deep relationship with Infineon, and its famed secrecy around M&A, it is a pretty safe bet that Steve Jobs is analyzing the implications of a deal.
Vertical Integration is Back In Vogue:
We are re-entering a period where companies are integrating vertically instead of horizontally. This is happening at an incredible pace at companies like Cisco and Oracle. Even Microsoft recently hinted at creating its own chips, by obtaining an architectural license for ARM processors.
There are even precedents in the mobile phone market—both Nokia and Ericsson successfully managed cellular chip teams up until 2007 before spinning them off in a quest to move up the services stack.
The fact is that despite Apple’s success with the A4, it trails nearly all other large hardware companies in chip development, including Cisco, Sony, and IBM.
Synergies Between Infineon and Apple are Significant:
In addition to having supplied every cellular baseband chip that Apple has ever bought, Infineon is one of only four companies with an ARM architectural license (Qualcomm, Marvell, and now Microsoft are the other three). This allows Infineon to extend ARM’s basic capabilities, and is clearly synergistic with the charter of PA Semi and Intrinsity, which were acquired by Apple for their respective ARM expertise.
But below the surface, the rationale for Apple owning wireless technology runs even deeper.
Because Apple primarily sells just one hardware version per year, it’s infinitely easier for it to match devices with features. Nokia got rid of its chip business because it was impossible to produce different variants of chips for hundreds of handsets.
In this way, it’s Apple’s minimalistic approach to hardware that makes it the perfect candidate for vertical integration at the wireless level, as R&D can be narrowly focused. For example, if Apple’s not going to release a 4G handset in 2011, they don’t need to worry about cramming in pre-release versions of LTE / 3GPP. Or if they are strategically planning around short range wireless micro-payments, they can begin to integrate NFC technology now.
This edge could conceivably help Apple out-innovate larger competitors like Qualcomm who must produce more generic chips which cater to the needs of the broader market.
Lastly, since Infineon is only the fourth largest 3G baseband provider, there are fewer OEM customer relationships to phase out following the acquisition (LG and Nokia are its next biggest customers and wouldn’t be happy buying from Apple, so would turn elsewhere for subsequent designs). But precisely because Infineon is a smaller player, this issue of buying into the supply-chain is entirely manageable.
Apple could also learn better practices in RF design from Infineon, clearly a weak spot per the recent antenna issues.
Financially, It Makes Sense:
Apple can do no wrong right now with Wall Street. That’s why 2010 is an ideal time for “risky M&A” in the wireless space. With its stock at an all-time high and with over $40 billion in cash, Apple can afford to strategically spend capital on expanding into wireless chip development.
Infineon’s wireless group did $1.2 billion in sales last year, and comparable transactions suggest a premium of about 1.5x sales, or a $2 billion dollar price-tag.
Let’s compare this to the ridiculous rumor in April that Apple was going to buy ARM, the maker of semiconductor IP that goes into all of the world’s cell phones. At that time I outlined why buying ARM for more than $5 billion made zero sense. Clearly acquiring Infineon for around $2 billion absolutely does make sense.
And here’s the real crux: If Infineon is acquired by Intel or Samsung, Apple won’t ever be able to obtain wireless technology at this price again. Every other chip vendor supplying cellular basebands is enormous and diversified across industries (Qualcomm, ST-Ericsson, MediaTek, Broadcom).
Not Owning Wireless Is Dangerous For Apple:
Aside from the synergies and advantages to owning wireless chip development, you can bet Steve Jobs is thinking about the risks of not doing so.
In the future, handset OEMs will buy “package solutions”, consisting of application processors (e.g. Apple’s A4, which give mobile phones computing power for handling software and applications), integrated connectivity chipsets (GPS, Wi-Fi, FM, Bluetooth, NFC), and multifunction radios—all from one vendor. Qualcomm is nearly there today, and Intel wants to combine Infineon with its Atom processors to get there.
This poses a threat to Apple, since Qualcomm and Intel will start to integrate portions of digital interface logic into their application processors in proprietary ways in an effort to promote bundled solutions. This will marginalize Apple’s ability to marry merchant wireless chipsets with subsequent variations of its A4 application processor.
And it’s why vertically integrating “half-way” is a dangerous journey for Apple as mobile innovation accelerates and integration levels skyrocket. The truth is Apple is a different company today than before it entered the mobile world. Picking up Infineon would give Apple all the necessary pieces listed above to completely control its future as a mobile device company.
And if Apple misses out, it will likely never get another chance to acquire the wireless technology necessary to do so because the entire mobile component value-chain is consolidating and the remaining players are giants.
Which is exactly why Intel is rumored to be salivating so much at the prospect of snapping up Infineon for itself. Intel has big ambitions in mobile and understands why it can’t let this one get away. The only real question is whether Apple wants to get into a bidding war with Intel.
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Contributor Steve Cheney is an entrepreneur and formerly an engineer & programmer specializing in web and mobile technologies.
