Ustrategy

That's The (Startup) Spirit: First Round Capital Brings On The Moves

My MBA class was very resourceful. Every morning before class new videos, jokes, pictures, and funny commercials would spread around the room like wildfire. That's how we learned in Singapore that Alda woke up all the bats in the night safari (yup, caught on tape crawling out) and why we all gathered around a computer to see Where The Hell Is Matt Now.

This morning, TechCrunch brought back the old sentiment with a Where'sMatt-like First Round Capital version, featuring their startups doing the Matt dance.

Check it out. Super fun. Plenty a holiday spirit to go around.

TweetStalk: Is It Okay To Watch? A Spy Application for Twitters

TechCrunch recently covered a new application that allows people to "stalk" others on Twitter without their knowing. Using a more palatable term, I asked people whether they actually take the time to spy. The online survey I published didn't get much response. One email suggested anonymity was an issue: "I don't really want people to know I'm spying." said the writer. 

When I later asked a few friends whether they would, hypothetically speaking of course, spy on others--I got a few giggles, a couple sideways looks, and an overall admission that they would often "search for information" about people of interest without necessarily following or befriending them.

As noted in the TechCrunch post, most of the content is open to all. It would take an active removal or blocking to not allow a specific user to access your information. With hundreds and thousands of friends and followers, there has to be a good reason to do so (or too much time). So it seems that TweetStalk is simply about aggregating the information that's already there.

The bottom line is that the walls between applications and people have been coming down fast over the last couple of years. At first people complained they had no way to connect. Now it's about over-connection and, perhaps more importantly, a sense of lost control.

If you choose to participate in the groundswell, spying isn't really about spying--it's about staying connected, getting to know people better, and listening to what they were going to say anyway. And while exceptions do apply, it's often people's insecruities that are at play: more often than not, I believe people prefer to be watched than admit that they're the ones doing the watching.

Jackson Fish Market: Visually Beautiful; Poorly Executed

TechCrunch showcased today Jackson Fish Market's new site called What A Lovely Name.

The site, like the other Fish Market sites is beautifully designed -- to those of you with kids, it is sweetly reminiscent of Janie and Jack's gift wrap. And, it is filled with just the right SEO keywords for anything baby, parents, and names.

I so much like the way the site looks that I decide to conduct a brief expert review. Within the first couple of minutes something about it just feels wrong. First, the usability of the site is terrible at best: areas that seem to be clickable aren't going anywhere, the name-by-Disposition functionality works only for some combinations but not for others, and there are lots of missed interaction standards such as clicking an option off instead of on to make a choice.

There are a number of reasons why a high caliber company which was founded by ex-Microsoft employees would launch a site with such poor interaction and functionality: Securing funding in these difficult times is one, another (and not unrelated), is getting lots of qualified traffic to the site. So Jackson seems to have turned into a user-destination site when in fact it's about something else.

Just read the company description on CrunchBase or their 17-page long (!!!) white-paper, and you too will find that Jackson is not a consumer site but is actually about creating branded software applications for other companies. What does that mean? Essentially, Jackson in the business of helping companies grow their brand through what's supposed to be value-ad interactions. In Jackson's case, it might be that Bloomingdale's would use the Jackson's Invitastic site to create beautifully looking invitations customers can send to friends with a special "family and friends" discount code. Or to use Jackson's example--Disney would have a family photo album application brought to you by Disneyland.

So why the baby naming site? And why slap it together to just have it up when the functionality is unquestionably raw?

According to Jackson, the next generation of meaningful advertising is about connecting software and content. And since we're talking internet and there are no hard software products to put on a shelf, it's all about "driving traffic to your site." Jackson says branded software companies should focuses on increasing the number of site visitors and emphasizes the value of repeat visits. With its plethora of sites, Jackson is trying to do exactly that.

In What A Lovely Name, Jackson Fish Market has found a topic that's highly searchable by high-value users (those who will return and can develop loyalty to the site). Jackson then puts the smallest, simplest functionality it can, and released it to get user eyes. If they're true to their own preachings, they will probably evolve it over time. But until they do so, the experience significantly suffers and the user-interaction seems no different from those offered by other technology driven startups.

Let's step back for a minute from the lacking focus on user experience. Jackson does have the right strategy: address the changing landscape of online brand-advertising. They also have some of the right ingredients: the understanding that getting the company up and running early is a good idea given the "breakneck speed" of online advertising, that user-facing applications need to be visually compelling, and that to gain traction as a company they have to get qualified traffic. And if they're looking for funding, getting things up and running fast is key. Unfortunately, in Jackson's case, the whole isn't greater than the sum of its parts and the execution on their strategy is gravely lacking. And as we know, historically, poor execution will bring down even the greatest of strategies.

Like many companies whose product is driven by technology, Jackson is taking a linear top-down approach to creating a solution in a highly lucrative space. But it's neglecting to think from the bottom back to the top--and the bottom--where the end-customers sit--is what counts the most in the advertising space. If a customer cannot find the names she's looking for, and areas she clicks on do not perform as expected, and if, in if 50% of the cases information cannot be found, that customer, to Jackson--is lost. And now we get into the formidable cost of re-acquiring user eyes.

Brand advertising is a great space for capable marketers. Putting together software and content in a beautiful packaging may be the next big thing. And while slapping together What A Lovely Name and getting on TechCrunch may get Jackson great traffic spikes and even a funding round, long-term it is not a sustainable model and it will be easily beat out by a company that truly knows how to fold into its execution an unwavering focus on end-user needs and who goes beyond to create a compelling and delightful interactions that will entice both clients and users to come to the site for more.

Is Social Media Killing PR? Live blogging from Girls in Tech and Horn Group

Panelists: Kara Swisher (Dow Jones and All Things Digital), Jeremiah Oywang (Forrester Research), Susan Etlinger (The Horn Group).

  

Kara Swisher: Talking about the "three ass clowns" of the Valley--Scoble, Calacanis, and Arrington who wrote about social media as the PR killer. Most blogs, Swisher says, are not real news--they're fake news.

Kara says to stay tuned for important news tonight at 9 (under embargo).

Susan Etlinger: Says you must look at what makes sense. Is Robert Scoble the right person to be pitching your company? He might be--or may not.  There IS the Arrington effect. We all know this. Question is if it's the right effect for your company.

Jeremiah Oywang: PR firms are just starting to have Social Media roles in their companies. I'm not sure they understand how to do (social media) yet.

Susan Etlinger: We know that we have to change the model and we are changing it so that we can focus our efforts on what makes most sense to our clients.

Audience member: I disagree. I think PR agencies are already doing this. 60-70% of my conversations are around Social Media and only 30% is around how to get to the WSJ.

Audience member: I want to see someone who understands analytics. 

Jeremiah Oywang is pointing to the potential conflict--or need for evolution--from a relationship business to a reality business--addressing client needs in a holistic approach.

Audience member: Question should be on how to use the current tools for the most impact and in this environment--Techcrunch is a must. We shouldn't do press releases and exclude Arrington. If PR understood how to do this then this wouldn't even be a conversation.

Susan Etlinger: Twitter is not going to be here in 10 years. It's going to be absorbed or turned into something else. Twitter creates this moment--what can you do with this thing, what capabilities does it provide. So you need to think what makes most sense for you. It's all about the context behind the product, some times it's too early...Tivo is an example. Kara Swisher agrees.

Question: What's the most impressive thing you've seen (around Social Media+PR)?

Jeremiah Oywang: Mystarbucks: Company that is making complete company changes. They're changing their services, the whole thing.  We're tracking what Obama did. No one can come and say this is a fad because we point to the president of the United States.

Audience member: Twitter and blogging are forms of communication. They're the new media. You can't ignore them.

Question: One key important "desert island" to leave with the audience today:

Susan Etlinger:  We're in the midst of enormous change. This is time to think...to get the conversation going. We were all stunned by the response. Time to be unafraid and bold about both criticizing ourselves and giving ourselves credit for the new things we're trying and doing. 

Jeremiah Oywang:  There's a business opportunity to use these tools and grow revenue streams for your clients. Align yourself with these technologies. Use these tools to fix your own reputation.

Kara Swisher:  There's nothing new under the sun. What's important is that you're representing a company that genuinely has a good product. You cannot (do) PR (on) a crappy product and it doesn't matter how many press releases you get on a website. All that really matters is that you have a really good product.  I don't remember the last time I picked up the phone and went "Oh my God, it's a communication tool..." Focus on the product!

plaYce relies on virtual goods sales; projects revenue by 2009, profitability by 2011

PlaYce, an Israeli startup and a TechCrunch 50 finalist that created ultra-realist immersive 3D in-browser destination site and platform for gaming developers is making significant headway. Today, the company was featured in an interview with the Israeli newspaper Globes, which said that PlaYce expects to see revenue in 2009 and be profitable by 2011.

PlaYce is basing a significant portion of its projected revenue stream not solely on ads (smart move) but on virtual goods sales--a $1.2 bilion dollars industry today (estimated to hit $6 billion in 2010). Virtual goods is one of the few business models that expect to see growth despite recessionary environment with $1 and $2 spendings multiple times throughout hours of play.  Last month plaYce opened up its platform to independent design developers, who can save up to 50-70% of their development costs. plaYce is currently taking beta requests here.

plaYce was founded in 2007 by Yoram Avidan and Carmel Gerber.  It secured an impressive $1 million angel funding in July 2007.

Disclaimer: I occasionally advise plaYce.

Yammer takes all at TechCrunch50

After three exhilarating days, 52 start-up presentations, expert panels, working lunch presentations--TechCrunch50 came to a close with a selection of 6 semi finalists. Atmosphir, a 3D immersive create-your-own-game technology, won the 'judges favorite' award; Yammer, now dubbed 'twitter for corporations' won the much coveted TC50 Winner title and a $50,000 prize.

The judges chose Yammer for its "brilliant revenue model"--a corporate-network based announcement application which is free for all unless a corporation wants to own and manage the activity. In essence, users of Yammer can "yammer" with anyone in their business or organization freely, posting tid bits of information. While I can see the potential, I question the longevity of Yammer's competitive advantage. First--I doubt organizations are going to clamor for an application that is likely to result in reduced productivity with all that chitter chatter. Yes- it can work great for project-based interaction--but large corporations have many other options, including upcoming video chats, live forums, etc. Second, it should be a relatively minor tweak for Twitter to add a network-based twitting options to its existing solution and, voila- where will Yammer go then?

Atmosphir, on the other hand, presents a truly compelling differentiation--it allows users anywhere at any time to create their own 3D immersive game environment on a PC or a Mac and soon within a game console. Within minutes, a user can create the game's environment by blocking space on a simple grid and then choosing colors and structures (trees, bridges, castles) to put on it. The environment then morphs from 2D to 3D, it can be adjusted and enhanced using simple menus and object click-and-drop functions and- all that's left to do is to choose a player and place them in the environment. The opportunities are limitless. Imagine users can create not only the game's environment but also their own players; imagine a version for kids; game companies can skin the game to represent their brand; games can be played by one or more players--perhaps live across the network, maybe in a browser some day!  It is a super easy to use, visually compelling, clearly differentiated offering.

There were also other favorites. Comments on many of the blogs covering the event demonstrate strong feelings about many other startups: VideoSurf, GoodGuy, DropBox and FitBit to name a few. The fact that there were multiple favorites among both judges and participants is perhaps, more than anything, a testament to the quality of the technology featured at TC50 this year. 

Which of the 52 presenting startups (and the dozen or so DemoPit presenters) will become a Silicon-Valley household name in the coming year is yet to be seen--it won't be the technology that will drive success though--it will be the ability to capture users hearts while executing a sound revenue and distribution models that will make or break many of these companies.

For a full coverage of TechCrunch50 and the presenting companies visit www.TechCrunch.com.

CauseCastic!

CauseCast is an online platform that enables non-profit organizations to create presence, connect with potential sponsors for existing charities or create new ones, encourage donations, build networks and audiences overall through a range of offerings.  The site is sleek and sophisticated--it communicates respect and approachability and builds a high-end brand for giving and philanthropy.

With the growing emphasis on Corporate Social Responsibility, prolifiration of social networking, and increasing awareness of the impact non-profit organizations make (see Kiva.org, Grameen bank, and Jenny McCarthy's Autism cause)--the potential is immense.

Big kudos to CauseCastic for the initiative.

Creating music together anywhere anytime with anyone is coming to a browser near you

1 Giant Leap is one of my favorite media projects. The music group traveled to 5 continent and recorded sound bytes, local songs, chants--then mixed them together to create a remarkable album featuring sounds from around the world in a set of cohesive seamless tracks. Now--users can do the same without the fancy travel using BOJAM--a collaborative music making platform that enables people from around the world to collaborate on creating music.

Each user can listen to a track, see the notes that applies to his or her instrument, learn the role, and then record his or her own track/part into the program. Others can then be invited to participate or join existing projects. You can completely manipulate the recorded streams, equalize the tracks and volume easily using a familiar dashboard interface. The application is entirely contained on the web browser and tracks can be sold on iTunes or any other media service.

While BOJAM is targeting professional musicians, I suspect that this solution will have a great appeal to "underground" DJs and musicians as well as to the average person who has always wanted to be more creative and didn't know how.

Royalties and licensing model still needs to be explained but, overall, in my opinion (and judging by the excitement in the crowd and judges), BOJAM should already start thinking about its expansion strategy...

Robert Scoble on VideoSurf: "Finally a website that doesn't suck!"

Day 3 of TechCrunch50 had a slow start due to, apparently, heavy partying at the Semantec party last night. Some 15 minutes after the official start time, it seemed that the space was sufficiently filled with red-eyed, messy haired audience, and we are on track with the first presentation in the Rich Media category--VideoSurf.

VideoSurf is a sophisticated data tagging application that lets users cull out specific frames in videos and share with others. The technology uses face recognition and deep data analysis to provide users with multiple ways to find and share video frames.

While Sheryl Sandberg, COO of Facebook supports the choice of target market given its immense growth potential, to Bradley Horowitz' point--it is not clear whether consumer video sharing is the best beachhead for this application--there might be a smaller, more focused, more differentiated, less saturated market (security, was one suggestion.)

Regardless, VideoSurve should be noted as having a flexible, intuitive interface that simplifies what could have been a highly complex intefrace. As Scoble put it, "finally a website that doesn't suck!"

TechCrunch50 Day 1- first 16 finalists take the stage

It is the first day of 3 for TechCrunch50 in which startups officially launch their companies in a category-based presentation. Of the 51 companies, one will be selected to receive a $50,000 prize. Eight minutes each, 4 per category, some of the hottest companies present their pitch to an audience of 1700 (plus 2500  via live-cast) and a judge panel you'd love to have for dinner at your home: Marisa Mayer, VP of Product Search and Customer Experience at Google, Dan Farber, Editor in Chief of CNET news, Ron Conway--one of Silicon Valley's largest angel investors, and Chad Hurley, CEO of YouTube.

Day 1 morning competition/sessions included two categories: Youth and Entertainment and Memes and News. Afternoon session focused on Enterprise and Advertising & Commerce.

Of the 16 companies, OpenTrace.org got my full attention. OpenTrace lets users track their environmental impact using an innovative bardoce scanning and data matching technology across the supply chain of the product. Users can purchase a product, scan it just as they would at checkout using their computer's webcam, and get instant information about the role they play in their carbon footprint such as the power required during production, transportation, packaging, etc.  Users can also see how others in their network are doing on their end. While this technology may not be immediately transferable into meaningful behavioral impact, it is an important Awareness Technology--helping people become more conscious of cause and effect brought about by their actions. Just look at new behavioral initiatives like micro-lending, hybrid cars, and the slow food movement--all went through a significant Awareness period before crossing the chasm; all evolved in the process in both features and the communication of benefits and the true value of the behavioral change.

My take: A creative and well focused approach to generating awareness in users' minds about the impact that their personal shopping behaviors have on carbon footprint. While revenue model may not be immediately clear, it rarely is in the case of Awareness Technology. Given the massive Green push in the US and Europe, I doubt OpenTrace would have any problem finding good partners or a home for its personalized Green awareness offering.

On the flip side, while it may be innovative in its customized media and streaming capabilities, blahgirls was the startup that rubbed me the wrong way from the start. As Ashton Kutcher came to the stage, Blah started with a video of big headed, small bodied caricatures who engage in part-animated part-real gossip via pictures, movies, and interaction with the user.

The technology and interaction are buzz worthy: relevant user-generated content, news feeds, and interactive media stream as episodes, and personalized interaction between the user and the characters of Blahgirls based on a range of voice and text bytes are exchanged with the user ("Blahgirls suck?! ?YOU suck!" Said one of the characters in response to a demoed user comment).

Because the model of celebrity news, caricature based animation, and streaming media on the web are already established, monetization should be very easy and from e-commerce to downloads (voice, songs, episodes, customized products, etc.) to show products and to partner product alliances not to mention ad revenue.

But the implementation is problematic from a target audience perspective. Designed for teenage girls, Blahgirls boasts a blatant age-inappropriate language and it endorses poor role models ("celebrities are like so smart!"). It is Saturday Night Live meets South Park while watching Sex and the City to the sound of Clueless.  It could be funny for adults as a spoof but I doubt parents who still have a say in their kids' life would endorse the content or the interaction.

My take?  Interesting approach to streaming news while providing a flexible, interactive experience for users with great monetization potential. Parents on the other hand might have a different preference for the language, focus, and horizon expanding activities to which their kids are exposed.

Best presentation nod goes to OtherInbox not only because of their clean and visual presentation quality but also because of the simplicity with which they solve real time painpoints--such as multiple emails from multiple data providers--specifically, shopping and information destinations. OtherInbox aggregates all those email logins we use for Amazon, WSJ, United Airlines and brings them into a single login interface. There, it provides an automatic folder view of all the email destinations we use. OtherInbox also allows users to create new email addresses on the fly, each one automatically receiving its own folder. To make users' lives even simpler, OtherInbox can recognize which email is an invoice and which is a promotion and track it to its original source (such as in partner promotions).

 

Using the familiar Microsoft Outlook-like interface, there 's little to no ramp up time--users continue to use their primary mental model for information processing, only here, it is all in one place, automatically populated--reducing time and confusion. Pretty cool, hah?

 

My take: A gem of a small solution that neatly and elegantly solves email overload and mess while offering additional value as baseline issues of clutter and tracking management are solved--all while respecting users' current mental and behavioral models. It goes beyond Yahoo's flat attempts at creating an email management and filtering system in that it provides the whole product solution in one place, in one familiar interface.

 

 

About the other companies:

You can check out TechCrunch50 for more information. In general, while each featured one cool technology or another, many of the other companies just didn't seem to know how to translate the technology into a product that customers would choose. From Ithryv—Shryk's Banking for Kids platform that sits on top of a bank and provides banks access to kids early on for relationship seeding, to Hangout Industries which states it is turning Myspace into Myplace for kids while in fact it seems to be creating a near-hedonistic experience in which kids have super powers to flip a pool table, play drums, play games, manipulate the shapes in their rooms--all while being bombarded by commerce (shirts, posters, etc.).

 

It was clear that all of the selected companies have put great effort and thought into their presentations and demos. Each wanted to do well and did well on the technology front. And while they may have had their use-models just right, it was only a couple of companies that passed the customer focus test today and who knew exactly how their offerings apply to their target market, how it is differentiated, and why they made the choice they made when selecting the application they presented.