This blog has led to action - make sure to visit the
Sunday, October 29, 2006
Thursday, October 26, 2006
Interesting to see that some VCs are discovering that adding value in an investment should not be just adding money at a late stage, but rather getting involved early to help the company grow.
The "old school" VCs were doing, they may have to go back to it...
The summary is available on the Cooperation Commons website here . A must read if you try to make sense of what is happening today with media, politics, and social networking in general...
Tuesday, October 24, 2006
On this matter, as I see it, there is what would be ideal (from the theoritical point of view) and then there is economic reality.
We have gotten used to get all services for free, thank you Google and co for my email, calendar, text editor, web pages, blog, forums, photo+audio+video storage etc… This is great and it does cost money (lots of money if you look at how much YouTube was pouring down the tube every month). And while it would be nice to have truly open services, something where the company that owns the infrastructure behaves ethically (The famous Google “do no evil”), then I think that the fake open is a good compromise if it can keep the model sustainable.
It is the same concept as for open source: you get the code, but the experts who built it or improved it get paid to support you using it. Nothing is really free, just easier to access even if you do not have a large budget but lots of time instead. For Open Service, you get the service, but you agree that the content will be on that one website so that they can benefit from the mass effect to get some revenue from somewhere. After all we are talking Infrastructure, this is a better alternative than having the government provide it (and charge us taxes for the service).
My concern is actually that we are not even sure that this model is completely sustainable for the long term. YouTube was said to be loosing money all the way to the day they got acquired. Google is getting so big that they may end up imploding: just think of the payroll they carry for example, how much innovation can you sustain with such a big organization? Could it be why Google Video did not really take off (too much friction internally) and why they had to buy YouTube instead to keep the motion going?
A solid underlying infrastructure is healthy, having large companies to take care of it is ok: we have today at least 3 big players to keep the competition going (MSFT, Yahoo, Google). And it may come a time when P2P technology will allow us to get the same infrastructure from home computers all connected together and sharing resources (a la Skype for example). But even then we will have to figure a way to pay for these computers and these connections. There is no such thing as a free lunch…
Having said this, I am also sure that the day people really want to edit the content that is available and the issue of licensing is clear enough (a whole other subject) that they can do so without problem, then it will be easy for a GooTube to add functionality to let users do this. And if they want to keep their audience they will probably do it too, because somebody else could offer the option and attract users away from them.
The key to an healthy ecosystem is the balance between the investors who want to see some return on their investment, the users who want the service and the company employees who want a salary for their work. A good guideline for Open Services should take this into account. Assuming this, Open Services do not have to be about users doing what they want with their content, but about the communication between the 3 groups (investors, employees and users) and keeping sure it is open enough that all can function together with minimum or no friction.
Monday, October 23, 2006
Howard Rheingold just released on the Cooperation Commons blog a great document produced by Herman Miller and the Institute of the Future that provides an excellent view into the various concepts at play with web2.0 and the related changes brought by social networking and the use of new technologies of cooperation.
A must read for anybody interested in Open Business and how to make it happen...
Howard Rheingold also did a conference on the pedagogy of civic participation with even more pictures here .
It is time everybody gets an avatar, this new world is starting to take shape in a major way...
Friday, October 20, 2006
Thursday, October 12, 2006
A big thank to Ted Tagami for this great video of our recent Coworking day in Sausalito. The place is great, hopefully there will be more days like this one...
Read more at tagami.com/2006/10/12/c...
Friday, October 06, 2006
While I understand audience as a value, what is really this for? From what I have seen, and despite interesting experiments on what can be done in terms of entertainment and next generation reality TV, why would Google care about YouTube. From the reports I read, YouTube is loosing money and had no real revenue model that is worth anything.
Google might as well let them disappear and pick up the left-overs.
If you were wondering whether there is a bubble looming behind the web 2.0 hype, now you know...
Wednesday, October 04, 2006
1- Beware of notes (bridge loans from investors until a round of financing can be completed): notes with discount are not a good idea above 20% of the amount you plan to raise in the coming round (notes typically are to bridge until you can get a real round of financing). The trap is that if you raise too much money that way, you may end up with a problem when the time comes to discuss valuation: if you raised $500K with notes and then you want to raise $1M in a series A round. If the VC/Angels ask for 40% of your company for $1M, then you will also have to give away another 20% to the people with notes (assuming no discount, it will be more if you had a discount included with the note).
2- The other trap with notes, and with friend and family money in general is that you may be tempted to take money from non-accredited investors which will represent a risk for the company, and therefore will pollute your negotiations with future investors. The issue with non-accredited investors is that they could decide to sue if the company does not perform as they expected. And if they are not accredited, they can claim that they were not familiar with investing and they were mislead. Not a good thing.
3- The funding gap (the funding levels that are too high for Angels and too low for VCs) is increasing. It seems that after the clean-up that has happened in the VC industry after the bubble, we have now the same amount of money invested through fewer VCs. As a result, an average VC deal is now closer to $7M (instead of $4M a few years ago). Something that is not going to make the life of entrepreneurs easy...
4- Some good news to finish: some people are trying to help reduce this funding gap by encouraging Angel investment through a tax credit:
"The Access to Capital for Entrepreneurs (ACE) Act of 2006 (HR 5198) was developed to fill a gap in current equity funding between venture capitalists and angel investors. This bill addresses that gap by encouraging accredited investors to increase equity investments in certain qualified small businesses through the creation of a 25% tax credit for accredited investors and certain partnerships (including angel investment pools if all are accredited investors) that invest cash or cash equivalents at an arm's length in a qualified small business (as defined by the Small Business Act)."
More info here
Monday, October 02, 2006
I have spent some time thinking about the concept of Coworking and Telecommuting. And while I am convinced that telecommuting is the way of the future, and Coworking environments a must to make telecommuting a more viable or pleasant experience, I also think that it will take time, and a lot of education, before it becomes something that can be truly sustainable.
In the meantime, as a smooth transition towards the ideal, I think that there is room for "Coworking days" where one day a month maybe I would go in a Coworking environment to meet other professional who like me work from home most of their time. This would allow the establishment of the coworking concept without a critical need for it to be completely sustainable from the beginning.
I was lucky enough that I have been telecommuting for a couple of years before going full time into working from home. I am also lucky that I have an office, and a complete setup that allows me to be self sufficient. But then going from telecommute where I was still going to the office once a week to full time working from home as meant that I do not get to socialize with corporate co-workers anymore. I meet clients and partners, but not this guy that happens to be at the watercooler at the
same time I am and with whom I can exchange and relax.
A coworking day event is the opportunity to do that: keep working from home where I have all I need, but go to a local Coworking place once a month, or once a week to see who else in the neigborhood works from home, and to get a chance to learn what they are doing.
I have a friend who owns a very cool space in beautiful Sausalito (http://www.studiomsausalito.com/), and she has been kind enough to let
us have it for an experiment, trying to make the idea happen.
I have created a page to explain the concept and allow people interested in the idea to sign up. check out details here
Let's see what happens...