The Now Web vs. Blogosphere Relationship Management

Just read a post on TheDeal.com talking about the Now Web
And the post mentions Twitter and Disqus as example of these services in the Now Web.

While I like the concept of Now Web, I believe that Twitter and Disqus belong to 2 very different worlds, at least for now.

I see Twitter as an equivalent of a virtual water cooler where people can come and discuss once in a while (even though some people seem to live there). Disqus on the other hand is a tool to manage conversations with the blogosphere and engage with bloggers. One is truly in the Now, the other is more in the "building over time".

When a blog is equiped with Disqus, or IntenseDebate (what I have on my blog), you can post comments, track replies but also get more info on the bloggers who commented, what other conversations they have other places, what blogs they publish on. With these tools you can accumulate over time records of conversations and connections with bloggers, you can build your personal intellectual property outside of your own blog and you can build a reputation within the group that emerges naturally from all these interactions.
And Twitter is a good complement to let the crowd now that you are doing all these things.

So for Disqus or IntenseDebate rather than Now Web, I would talk Relationship Management, and the good news is that if they can be categorized as such they are one step closer to the enterprise, and therefore one step closer to cash for the entrepreneurs and their investors.

No question in the end that both will make it to the enterprise, as Yammer demonstrated this week at TechCrunch 50. The way we function within and without the enterprise is changing, it will be interesting to see how far this goes...

Inc500 statistics support Guy Kawasaki's plan B

I was happy to read yesterday that Guy Kawasaki is bringing some light on the realities of Silicon Valley, away from the hype and what the newspapers like to show on the front page.
And the timing is perfect, because this week I just received the special issue of Inc magazine where they give us some good statistics on what is happening in the trenches. The numbers give a good prospective on the relationship between VCs and Entrepreneurship - facts from their top 5000 (five thousand, no mistake here, this is what they give us):
- median amount of capital to launch the business $25K
- only 3% of the top 5000 received venture capital
Guy's plan B is right on: forget VCs if you can, this is expensive money anyway, and just focus on building the business with what you have.
Meanwhile I will keep working on the Entrepreneur Commons to help with the "Friend and Family" part, the initial funding that can make all the difference.

The funding gap gets bigger

From TheDeal.com:

$40 billion was invested in U.S.-based startups across all sectors during the past 12 months, compared to $36.2 billion during the year leading up to Aug. 31, 2007. The rounds got fatter, too, as there were 3,084 deals in the past year versus 3,219 in the previous period.

More money, less deals, the funding gap in the US is getting bigger. This is not going to help entrepreneurs trying to start their businesses, I see this as a flag that things are not improving when it comes to financing startups.
Meanwhile the same post mentions that the number of European deals only decrease slightly while the total amount spent is 5% less. So I assume from what I read (there is no number there on this) that the funding gap is decreasing in Europe, something good.
I wish we could see that trend in the US, it would certainly help entrepreneurship. With the economy as it is, it is time for the spreadsheet guys to give the entrepreneurs some room back...

Joost: a good example of what can go wrong when you have too many friends with too much money

Originally posted as a comment by mdangear on VentureBeat using Disqus.

Just commented on Venture Beat post regarding Joost:
The sad thing about Joost is how much money is being spent on an idea that as you say - "I found the idea of Joost to be compelling" - is just an idea.
It seems to me that we have here a typical case of too much money to people who belong to the VC club. They were successful, and therefore they were able to raise a lot of money on just an idea. And then they were able to spend that money without a real need to go and test it against the market until it was all built nice and fancy, with the money spent, only to discover that the market is not here. Not now, not for what they have to offer today. Oops.
Even better, after it did not take off, there were able to get even more money to try to fix the whole thing, in a typical human trait that when you have sunk in cost, you tend to spend more to make it right even when it does not necessarily make sense.
And this is the bad news when you have too many friends with too much money: easy get easy spend. No need to worry about paying the rent at the end of the month, no real need to be smart about your go to market (you have the friends - you have the doe - you have the buzz), just be happy with your idea and go build a nice desktop client that everybody will love. ..
Forgetting one detail: medium is content. So in this case it does not really matter that you have a client or something in the web browser, what matters is what type of content you are showing on a computer.
People are not necessarily interested in left overs from the majors, or old stuff that they agree to let you watch on the PC for free. The type of content that works on the PC has proven to be the 3mns short video, like you have on YouTube. Except that content on YouTube is all over the place, and it is hard to sort out the junk from the rest.
If they are going to spend more money, I believe it should be in producing quality content that works with the PC as a medium.
OR as you suggest, change the medium and go back to TV by becoming an equivalent of ActiveTV or a Tivo, allowing people to watch TV content on their TV, except that is would be coming from the Internet with some kind of box to make the connection.

The problem with LinkedIn

LinkedIn recently rolled out their forum functionality, and proved in doing so that they do not really understand (or do not want to understand) what is happening with the rest of the world:

- First this is a case of being too late. Forum functionality is nice, but conversations are happening mostly other places these days. Not that it is obsolete, but really there are many other places where we can talk, and they have waited so long that most of the LinkedIn groups I belong to already have forums setup some other place (Google or Yahoo).

- Then they keep ignoring the fact that we have now a technology called RSS that is very convenient to stay aware of things. Instead, LinkedIn gives me an email alert of email digest. Another thing of the past, which is also still very useful, but where is the RSS feed that should also come with it?

What this second point tells me is that LinkedIn keeps trying to be a destination website, they are stuck in the web1.0 world when they should instead open their system as much as possible with APIs, RSS feeds, widgets etc...

While they are forcing me as much as they can to go back to the site, with an attitude that is starting to feel almost like abuse, companies like Plaxo will let me sign in with my OpenID, and are giving all the RSS feeds I want, plus groups, messaging, etc... One big thing for exemple is that Plaxo does let me send messages to people I am not directly connected to. And now that I can also have the detail of my professional experience on my profile, it is starting to look as if I might as well switch to Plaxo to do the bulk of my networking.

The gap is closing between the 2 in terms of what I get from the services, and Plaxo is looking like a much better bet moving forward. Unless LinkedIn decides to wake up and catch up with the world with something better than forums...

How much abuse should we tolerate from Brands?

Here is another story on Corporations and how brand (mis)manage their followers:
I am a geek, I have an iPhone, and I love Star Wars - a cliche probably.
And when I updated to the iPhone 2.0 software, I was very happy to find this cool PhoneSaber app (one of the best free apps they were offering then from my prospective) that could make the noise of a light saber when I moved my iPhone, as if I was fighting the dark side myself. Except I lost that battle: I had to reset the iPhone and then I discovered that the lawyers from Lucas Film had Apple remove the PhoneSaber app from the Apple Store because it was not an official Star Wars app. So no more showing off in front of my kids, big brother wants me to behave...
Now the official story is that something that looks like PhoneSaber may come back at some point, but how much of a turnoff is this? I am not sure I will be too excited about the Official Guys feeding me their approved soup after I had a taste of something really cool and creative that was free and did not seem to hurt the brand in any way. All of a sudden it feels like I am in a relationship with an abusive master, who takes away what I like only to give it back when he feels like it. How healthy is this?
With more and more user generated content being posted to the web every day, brands should learn to give some freedom to their consumers, so that the creativity that exist is not killed, but rather channeled for the benefit of all. It is ok to create a cool PhoneSaber app, and good for the brand if people like it and spread it around. If the app is free, it seems to me there is more harm done to the brand when you force the removal of the app than by letting it be, something with the enforcement of copyright has gone wrong in this case.
What is sure is that this is just another example of more to come: social media and open source are about people feeding each other stories and applications, and Media will have to evolve if they want to remain relevant. Maybe "Open Characters" and "Open Stories" should the next big things...

Another story from the corporate world

I am currently visiting friends in Europe, and just heard another story on how a corporation is a machine without a soul, a train running at full speed on its tracks with nobody driving.

This is the story of a very successful entrepreneur who was looking for a cash out event, pressed by the early investors in the business (the "friends" who need to see a return on their equity at some point).

And it starts with a good event, a very juicy acquisition by a US Public Corporation.

And then after that, nothing is the same anymore...

And the big change really is that the acquired company becomes part of this big machine where nobody is responsible for anything, and nothing can be done without the scrutiny of somebody else, which makes it hard to have any decision taken:

- the board is supposed to drive the company, with the CEO to execute on the plan
- the board is supposed to represent investors

BUT

- when investors are a crowd of small stock holders who sometime don't even know they own the stock because it is through a mutual fund, then clearly they are not in charge and who represents them, and how this person was chosen, is anybody's guess. Maybe they represent the larger stock holders, or maybe they are just here because they belong to "the club".
- the board members have director's insurance, so the one thing that is clear is that whatever decision is taken, they are not directly at risk unless they did something really really bad

SO

Back to my entrepreneur who is now a VP in this corporate world:
- he cannot do anything without providing piles of documents that will show that the board members have inquired about the matter,
- and then the real decision in the end comes from the CFO who will confirm whether the ROI can justify the investment,
- and this decision only comes after the lawyers have cleared the matter on the legal side.

What is also clear in the end, is that if anything wrong happens, he will take the blame because whatever he provided will probably be missing a "key" info that would have made the whole difference...

Unfortunately this does not fit the hypergrowth environment that my entrepreneur lives day in day out in his part of the business, and it really makes his life miserable.

And then customers are all confused too, because the deals that could be done before are no longer there: everything has to fit within the very narrow definition of how deals are made with the corporation, because it impacts revenue recognition and should comply with Sarbanes-Oxley. So letters are being sent, trust relationships are being damaged and ultimately the pipeline is being threatened.

At this point, you just hope that what started as a good acquisition is not going to turn into a bad deal because of the blindness of the system.

What's for sure is that whatever happens, nobody will really be responsible:
- the members of the board are doing their job
- the lawyers are doing their jobs
- the CFO is doing his job
- and my newly VPed friend is doing his job as best as he can within this context

If nothing comes out of this new association, everybody can blame somebody else, and the loosers (the stock holders) can only blame themselves for not unloading the stock earlier.

The amazing part after all this is that the system (public equity) still seem to be working from the high level prospective. The train is on track with no conductors, but I guess that as long as people trust that they are going in the right direction then the system holds...

For my part, I will stick to entrepreneurship, and my friend will probably not breathe this corporate air forever :-)

Discussion about Entrepreneur Commons on Social Edge (Skoll Foundation) is now live - please comment

The discussion regarding the Entrepreneur Commons as a new way to fund social entrepreneurs is now live on Social Edge (a program of the Skoll Foundation).


Feel free to go there and add your comments to the discussion.
And feel free to forward to anybody who could be interested :-)

How much of a Buddhist do you have to be to use Twitter?

From what I see, there are 2 ways to look at Twitter:
- an instant messenger for exhibitionists
- a tool to add another layer of randomness into your life

Now who would want to use this? Are you an exhibitionist? some people are... Or are you so bored, stuck and so lazy to work on it that randomness seems to be a nice way out?
Or could there be something else?

One interesting point to me clearly is the issue of randomness. And since I am a fan of management by statistics (and you should too if you have read "Out of the crisis" from Deming ), I am wondering whether it can be the base for a new system.

If you have read "The Secret", you will know that the world is like a big open catalog, and all you have to do is ask and you will get what you want out of it. Start putting yourself in the mood for getting it and it will come. Or if you are a Buddhist, you will know that the reality of life is that it is so complex that the world around you that you believe you are influencing is really out of your control, and therefore the best you can do is work on freeing yourself from the stress of it to be in the "Now" as good and as serene as can be, and good thing will come out of it, if not in this life certainly in the next one or the one after (I apologize for this shortcut description, but this is good enough for the point I am coming up to - if you want to know more, I recommend reading "The Monk and the Philosopher", a great read on the matter)

So now and given that we have no control (and twitter, and the web in general with its information overflow is what we are getting), but that even with things beyond our control we can get what we want, would it be possible that twitter is actually a great tool? Should we embrace chaos? As I am on Twitter (http://twitter.com/mdangear), and knowing I cannot read it all, should I spend the time even looking? What's in for me?

One interesting option is that chaos is the system in itself, and therefore when using Twitter I am just formalizing what happens in the real world anyway, similar to LinkedIn formalizing relationships that were established through networking before, and making an existing mechanism more fluid and more efficient.
If this is the case, all I have to do is follow as many people as possible, and hope that many will follow me. And then I will keep throwing tweet-bottles in the ocean, trusting that the ocean will throw back answers when I need it. Statistically the system could work given enough users... or not ?
How does it work for you?

It's 1995 again

It feels right just like if we were in 1995 at the edge of a new feast: I see web2.0 technologies being adopted by more and more companies, and people are starting to understand that it can bring hyperproductivity to the business. Platform architecture is getting organized, the discussions at Google I/O are a clear indication that there is hope in this area.
If anything the current slowdown creates opportunities: if web2.0 in the enterprise helps productivity, there is a real incentive for companies to seriously look into it.
We may have to wait until after the elections to see the real momentum, but time is ripe for startups now. It should be fun in the coming months...

The reality of fundraising

If you are considering trying to raise funds from investors (angels or professional investors), you should consider the following:

There are 2 types of investors really:

- the ones who know you (friends and family), and

- the ones who do not know you (angels, VCs, etc...)

Getting money from people you know will be the result of the history they have with you. They will be able to trust you as an entrepreneur and trust that if they like the plan you have you will be able to execute on it. I call it "opportunistic fundraising" and this is always worth considering this kind of investment money.

Talking to the other group is doing active selling, except that you are selling to investors instead of selling to customers. There are many issues related to selling to investors: - Investors have no pressing need to buy. They have a limited amount of money to spend, and you are just one among many presenting to them, so while you could be the hot project, the next guy could be that too. And time is on their side, because the more they wait, the more you will need the money and the better the deal potentially. This means your sales cycle is going to be very long, and while you are spending time trying to sell to investors, you are not selling to customers and therefore you are not helping the business itself.

- Investors are not customers, so the story you are building to please them may not be the right story for the market. I see many entrepreneurs try to fit their strategy within the perceived expectation of investors, with buzz words, the hockey stick, the minimum 50M revenue within a few years, and inflated funding requirement to be able to get into the VC framework. So selling to investors sometimes contributes to corrupting the initial plan, which is a good way to get into failure.

- Ultimately, having sold to investors may feel good as it can be perceived as a validation, except that this is not a validation from the market, and therefore does not guarantee success at all. All it does is make it more comfortable for everybody while waiting for more customers. But if the plan you have sold to investors does not work, you will be help responsible for the failure, which mean adjusting the plan later on will be costly to you as the entrepreneur, if not deadly. More difficult than adjusting your plan when you are in charge...

So I believe the best way to raise money is to go to friends and family, and then figure out how you can start generating cash from the little you were able to get there. The good news is that if you look at the top 500 companies of Inc magazine (companies doing between 7x growth for 3 years and 30x growth for 3 years), the average starting capital is 75k, and only 8% ever raised more than 1M. So even with a little you still have a chance to fit within that group of hot companies. This clearly beats have one chance in a 100 to be picked by a VC, only to be told then that you have one chance in 10 to really make it big.

Interesting presentation on Social Web need for normalization

Via my friend's blog: Miguel Membrado at Kimind

Entrepreneur Commons: short video presentation

Vator TV has opened a "Newsroom" where anybody can upload video to discuss about "Trends & News", "Lessons Learned", or present Interviews.
I am exploring this new channel as a way to share some of the experience I have accumulated on entrepreneurship.
Here is a first post explaining what the issue I see with equity at the seed financing stage, and how the Entrepreneur Commons fund can change the current dynamics.

Entrepreneur Commons discussion on OnTheCommons.org

http://onthecommons.org/content.php?id=2082

Testing IntenseDebate

I ran into IntenseDebate.com, which allows me to track comments, including comments I make on other blogs on which IntenseDebate is installed. Pretty cool service...

Entrepreneur Commons discussion on Social Edge

The Entrepreneur Commons will be the subject of a discussion on Social Edge (http://www.socialedge.org/ - a program of the Skoll Foundation) during the week of 7/29. The discussion was announced this week in the Social Edge newsletter as a coming discussion under the title "New Model for Angel Investment". Looking forward to an interesting debate...

How to change the world

Ever wondered what you could do to change the world?
Just decide, say it publicly, and things will start to happen.

This is the theory behind a lot of the recent (and not so recent) ideas that float around, things you can find in the self help book like "A New Earth" from Eckart Tolle, or "The Secret" from Rhonda Byrne, and concepts behind boudhism. The idea is that you have to ask, and start living according to this goal that you are trying to reach, and things will naturally start happening. A lot of this makes sense when you start thinking about it: you are what you do and things happen because of who you are. And it all starts with the story you tell to yourself and to others.

And now there is a chance to experiment with the concept as a way to improve the world we live in:
It is happening at http://www.neo.org : you can change the world by committing to some action in whatever area you choose to focus on. Then you can invite your friends, to let them know about your goal, so that they can be aware of it, and eventually help you achieve it. And then, because all this is happening in public, you will also naturally feel committed to making progress, and this public declaration you have made will help you keep focus during the good days and the bad days along the journey.

This type of website, trying to channel the individual energy into larger bigger world changing projects, is not new. I have seen several instance of similar concept.
But so far nothing that was so simple yet potentially so powerful: it is not voting for an idea somebody else had, or signing a petition, or subscribing to a newsletter, or sponsoring through donation, or pledging time as a volunteer like the many things I have seen before. It is a personal commitment to action. No need to state anything specific if you do not have a plan, but you need to define a mission for yourself, and then see how it feels.

There is an interesting parallel with the dynamics that can be observed in the Open Source movement, where developers commit to work on resolving an issue, and then their work becomes public as part of the open source process. The incentive in that case is to make the best possible work, because it is a showcase for what you can do, and nobody likes to look like a fool in public.

Will it be like Open Source, where a large crowd of remotely connected people with no formal organization (at least not in the sense of an institution that owns the work in itself) can accomplish something very complex and requiring a lot of resources of all kind?

Could this be a recipe for "Open Government"?

Will leaders emerge from this process?

I find the idea interesting, and since I am by nature a naive optimist, I want to believe that it will actually help make a difference.
Give it a try and let me know how it works for you :-)

"Strategy and the Internet" revisited - PPT

"Strategy and the Internet" revisited - Powerpoint Presentation

I have reworked my previous post into a PPT...

View the full size version from the SlideShare website

| View | Upload your own

$20B crumbs

You think $20B is a lot of money. Think again.

$20B is the amount that VCs invest every year.

But where does the money come from?
The reality is that VC funds get their money from Limited Partners, for whom VC investment is considered "alternative investment". This means that it represents a very small fraction of their own portfolio. Something that they do not spend as much of their attention on.

And where does this lead us?
More and more people (including partners in VC funds) agree that something is broken with the VC model. But nobody is doing anything about it:
- The Limited Partners are happy with the people they work with, they have invested their money but even more important they have invested their trust in them. So if anything can be done, they trust that these partners will work on the issue to fix.
- And then the VCs do their best, they apply their expertise, they keep feeding the system with startups that they think will make a difference, and their view of fixing anything is to do more of same except better. Maybe they will widen the scope of their investment, or maybe get into other types of investments so that they can follow the startups throughout their lifecycle. But the one thing they will not do is question too far the system that feeds them, specially when it works good enough that they can make a good living out of it (who would do any different really?).

So in the end, the VC model, however broken people will agree it is, is here to stay for some time, and until somebody decides to deal with the crumbs.

What is interesting is that $20B is also the amount that Angels invest every year of smaller size deal. And again, where does the money come from?
Angel money is the "mad money", the spare change angels invest in startups so that they stay involve with innovation and entrepreneurship (the passion, the energy) while not having to do the hard work. A very precious help for entrepreneurs, but is it money well spent the way it is done today? I have discussed this in a previous post, and entrepreneurs are not getting as much help as they could hope from there either.

This is the challenge for the Entrepreneur Commons (tm), trying to find the Limited Partner or the Foundation that will decide to deal with these $20B crumbs...
If you are or know one of these, please contact me.

Of Executive Search 2.0, and Community Building in general

Hackers know this and you may too: the web is a great resource for Social Engineering.

One of the places where you can gather a lot of information on people, beyond the obvious social networks, are blogs.

And one of the great uses of this content is for Executive Search: digging through blogs, you can get a very good feel for what a person does, thinks. And since the blog typically include a link to a profile, you can also easily access the blogger to engage a conversation and see if they could be interested in switching to a new job.

The beauty with this model is that it gives you access to all these people who have the right skills for the position you are trying to fulfill but have not posted their resumes anywhere because they are not actively looking for a job. From my experience they also are the best candidates, the one who do great where they are but would consider a change.

The experts are blogging, it is time for the recruiters to read these blogs.

And if you are into building a community in any vertical the same applies: I am amazed to see the amount of content available on any given topic, and the number of people interested in this topic you can get to through their blog. The web is the social network, LinkedIn and Facebook (and the many others) are lenses through which you can visualize communities of professionals or friends or experts, and then you can create your own custom lens with a blog reader.

More info on VC funds - and it gets worse...

I have shared my own observations of the VC investment world and the Angel investment world in previous posts on this blog, leading to the Entrepreneur Commons project.
And I have now also found (thanks to my Melcion partners) a very interesting study that shows that in addition to not being a good answer for entrepreneurs, VC investment is also not a good solution for investors (the Limited Partners - LPs - in VC funds). A must-read for anybody interested in VC investment:

The Performance of Private Equity Funds, by Ludovic Phalippou and Oliver Gottschalg - April 2007.

The first striking information from this study of 1328 VCs worldwide is on the returns that can be expected from VC investment:

• S&P500 +3% before fees
  
• S&P500 -3% after the management fees (typically 1% or 2% plus carried interest)

So investors investing in VC funds will make less than market, their investment underperforming the market by 3% on average.

But it gests worse:
The original assumption in the study is that performance of VC funds is related to Size of the fund, Experience of the management team and Past Performance. However a closer study shows that when past performance is included in the equation all the other characteristics lose their significance: Past Performance appears to be the unique explanatory variable for fund performance.
More specifically, it seems that the fund performance after the first 3 to 4 years is the main indicator of the performance that can be expected from this fund at maturity (typically 9 years). Not experience, and not size. If you compare recently raised funds to what more mature funds were doing at the similar early stage, then the conclusion of the study is that new funds have similar expected performance as the mature funds in the study. Again, there is no concept of size and/or experience being a parameter.

What it means is that it does not matter whether the management team has experience from a previous fund, the only parameter that prevails is what they do in the first 3 to 4 years of a given fund, which will be the real indicator of what can be expected in the end.
So while the concept of track record is comforting psychologically, the science does not sustain the idea that it will make a difference.
In the end Limited Partners are playing the lottery when they invest in a new fund, whether it is with a newly formed team or an experienced team.

In summary:

• Each new fund is a new fund, with only what will happen in the first few years to determine what kind of results can be expected
• And in the end what can be expected is less than market by 3% on average

One question remains: why are LPs paying all these fees (the 6% that take their average returns from SP500+3% down to SP500-3%)?
If this is to play the lottery and get a chance to finance the next Google, be my guest. But if this is to finance innovation, maybe there are other options.

If anything, this is one more justification for trying other cheaper ways of financing entrepreneurs: back to the Entrepreneur Commons, it seems that while it originally came out of issues identified with Angel Investment as a way for Angel Investors to try something that may give them a better return on their investment, it is also a good answer for Limited Partners currently investing in VC funds, who could be also interested in the potential of better return on their investment while still staying involved in the financing of innovation.

If you are a LP, I would love to talk to you...

MFIs: where to go next

If you do not have time to read Muhammad Yunus book "Creating a world without poverty", I recommend this article from the Stanford Social Innovation Review:


This is what I got from the article:
- I like to think about these things in terms of ecosystems, where there needs to be a balance between all players. And therefore there should be a cap on the overall returns that an investor can get from micro-finance, and the goal should be to keep these rates at a max that would be close to typical average market returns (S&P for example). This guarantees sustainability from the investor prospective, they are not "losing" money when investing in MFIs, but at the same time higher returns should be not acceptable because then other parts of the ecosystem are getting squeezed. What the investor gets for his money is that he will not loose, and then he is contributing to helping the poor by choosing to invest in the right places instead of going for the usual suspects (oil and guns on the stock market to be extreme).
This is where there is good co-existence between the 2 worlds within the larger global ecosystem, because the markets provide a good benchmark for what is reasonable. Then the decision from the investor prospective becomes a choice between getting high returns from companies whose impact on the world is not considered, or reasonable returns from companies who also do good somehow. An analogy here is what Peer-to-peer lending (prosper.com for example) is doing today, where people decide what level of return they want from one person/project or another. The good news from what I have read is that borrowers tend to get better rates there than from regular loans, because investors value good credit more than a bank would, and they are happy to keep their return "reasonable" if it can help these "good" borrowers.

- Once this is established, I see MFIs being a platform as 2 things (what the article promotes):
-- a blueprint, with processes and governance that can be applied to other under-served areas. This is what I think the examples in the article talking about Grameen Healthcare and Grameen Renewable Energy are about. This is horizontal growth, getting into other "markets" where similar recipes can be applied.
-- and then each individual MFIs is its own platform in the sense that it is a social network of people who work together and share a chart of ethics (the glue between these people) that guarantees the success of their effort. This social network as a platform can be expanded from the original mission to fulfill other needs of the people within the group. Call it vertical growth, expanding from providing loans to providing insurance for example. This is where the reinvestment of profits above the reasonable rate of return come into play.

Clearly a good way to grow from where we are with Microfinance to a better world overall. And very much in sync with the Entrepreneur Commons project I have launched recently :-)

"Strategy and the Internet" revisited

In these times when economic trouble seems to be looming (did you hear about budget cuts and rising cost of gas?), and when the hype over the web20 revolution seem to have been another mini-bubble, it is interesting to go back to the basics. And a good place to look is this article "Strategy and the Internet" that Michael Porter wrote in the Harvard Business Review in March 2001. The lesson from the article is that we should not lose the focus on strategic development and competitive advantage. It was true then and it is true now. But in the light of what has happened since then, a few things should be added to the previous analysis.

Here are some exerts from the article:
>>
The great paradox of the Internet is that its very benefits –making information widely available; reducing the difficulty of purchasing, marketing, and distribution; allowing buyers and sellers to find and transact business with one another more easily–also make it more difficult for companies to capture those benefits as profits. (...) The openness of the Internet,with its common standards and protocols and its ease of navigation, makes it difficult for a single company to capture the benefits of a network effect. (...) In general, however, new Internet technologies will continue to erode profitability by shifting power to customers.
(...) As all companies come to embrace Internet technology, moreover, the Internet itself will be neutralized as a source of advantage. (...) Established companies will be most successful when they deploy Internet technology to reconfigure traditional activities or when they find new combinations of Internet and traditional approaches. (...) Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage.
<<

This remains true if you consider the Internet as a technology, which seem to be the "lens" Michael Porter used when writing his article. But I believe that we need to consider also that the Internet has become more than just a technology, it is now also about people, the famous social networks that appear everywhere and are today the next hot thing, the "ConsumActors" as Xavier Comtesse calls them.
When Michael Porter states that "new Internet technologies will continue to erode profitability by shifting power to customers", he was not taking into account (who could at the time?) the value that customers can add, the famous "user generated content" that can actually help boost profitability instead.

The good news is that in the end, we can all agree that the answer is that "only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage".
And for this, Xavier Comtesse (see my previous posts about his work here and here) is offering us 2 very powerful tools:

• A matrix to understand a market or how to deploy a product strategy that includes customers in the value chain
• And now a Value Chain 2.0, to add on top of the "Prominent Applications of the Internet in the Value Chain" that Michael Porter show in his article

This latest document (Value Chain 2.0) is a great way to clarify how we should consider the management of the ecosystem, by including both internal and external resources into the equation, and by considering how the data+knowledge should shared as the main strategy driver: the company as the underlying platform supporting one large ecosystem rather than a fortress of employees interacting with customers and suppliers. If you had any doubt that there is no other choice than to do it, now is the time to take a look again. Thank you Xavier for clarifying all this for us...

The Entrepreneur Commons™

After looking at VCs, and after managing the European American Angel Club for 2 years now, I have come to the conclusion that entrepreneurs are not really being served properly when it comes to seed funding. And I would like therefore to propose the concept of an Entrepreneur Commons to help with the issue.

Here is the story:

I have seen are roughly 3 types of angels:

• The super-angel, who has enough money to be a one-man show VC playing with his own money (and maybe money from a few friends). Either he is known by the VC community, and he is treated well by them because he can source good deals for the later-stage rounds, or he has enough money within his ecosystem that he can help entrepreneurs all the way through.
  
• The social type, who has money and like toying with the idea that he could invest and may do so one day. He likes attending meetings and talking about it, but the reality is that he never really invests in anything.
• And then you have everybody else in between these 2 types.

These last group of angels is facing a lot of issues with the model as it is today:

• Angels their put money down and they have no clue when it will come back (if ever). Typical time before a cash event is 7 to 9 years if you believe angels who have done it for a while
• When investing in early stage, they have no real data to figure out a valuation, so any equity deal is based on arbitrary valuations where somebody is getting a bad deal on one side (angel) or the other (entrepreneur)
• If the business requires additional funding, Angels are being squeezed of the deals by VCs, who impose liquidation-preference clause
• And finally because you are just an Angel after all and not a fund, you are limited in your resources and cannot really spread yourself into a number of deals that is statistically relevant.
  

So in the end, they are playing the lottery, and they know it. And because they are playing the lottery, they want the reward to be as big as possible if they win, so they tend to shoot for companies with a potential for return of at least 10x the investment.

From the entrepreneur side, this leaves out of the system a whole lot of very good startups with very promising businesses but not "hot" enough. This is even more critical these days when you see an emergence of "social entrepreneurs" who are interested in making money, but whose focus (and measure of success) is also to help the community one way or another. They are not really non-profit, so most of the time they do not qualify for grants, but they are not the 10x type either. Meanwhile they clearly deserve help.

The way I see out of this situation is the Entrepreneur Commons:
A not-for-profit social network of entrepreneurs providing financing for early stage company through debt guaranteed by a mutual guarantee fund. The financial risk is mitigated by the mutual guarantee fund. The risk on the "management" side is mitigated by the social network: loans are by invitation only, so you will have to be approved by your peers to get in. And the typical scalability issue faced by general partners in a VC fund (which causes the famous "funding gap") is also resolved by the social network: the size of loans and the number of entrepreneurs involved is no longer a problem, and if anything it helps stabilize the results of the group as a whole.

The project is starting to get some traction, and we have been getting a lot of positive feedback - the recent post from my friend Jessica is a good example of the reactions I get.
The goal is now to confirm the blueprint for this model, so that it can be replicated anywhere. We have started looking for funds so that we can make loans soon. Stay tuned...

It's time for geeks to learn about design thinking

One thing about Web20 is that it has clearly brought us to a commoditization of services.
With open source tools and with the decreasing price of computers, it has become very easy and very cheap to build a service in a few weeks. Along with that is the fact that if you have an idea, chances are that someone else somewhere else has had or will have soon the same idea. It is very common to see similar ideas appear within a six months window in various places around the world.
Ideas are all over the place, technology is cheap: online services are just another consumer product.

So how will you make your idea/service stand in front of similar others? My take is it's all in the design of it.
Not design as in cute logo or a weird name that you hope people will remember, but design as in thorough analysis of what users expect and how to best present your service to them. We are talking user interface, thinking about design in anything that will be presented to the consumer, and thinking about how they will use the service to make it as easy as possible for them, including intuitive, pleasant, and efficient. The kind of things Apple did for smartphones with the iPhone, a beautiful demonstration of the power of design to other manufacturers who were focusing on functionality without wondering why very little of it was really usable when they were sticking to the computer metaphor and its ridiculously complex navigation on small screens.

If you are thinking, or in the process, of creating yet another web20 service (and we are just seeing the beginning of the services that web20/30 will bring about), you should consider very seriously investing in design before you do anything. Design thinking will help you confirm who your audience is, how and what you should communicate with them and them with you, making it a complete and coherent experience. And therefore it will help you fine tune the product/service you will create. Or in the worse case it may save you a lot of time and money by allowing you to discover sooner rather than later that your idea was not that great after all. Doing anything else is keeping closer to playing the lottery, and hoping blindly that users will like what you came up with. Some are lucky and win, most don't.

Think design!

Non-profit as another step into participative democracy

I attended last week a very interesting seminar at the Stanford Center for Social Innovation by the Stanford Social Innovation Review and FSG on Evaluation for Foundations: how Foundations should measure the results of what they do so that they can learn from the process.
I had always been thinking of non-profits and foundations as charity organizations picking up issues where the government would not or could not go: environment, social matters, etc...
What I had not realized is how this process can be used in a very proactive way to get things done and act where politicians seem to be unable to do anything. What foundations do, when it is proven to work, can and should be publicized and shared widely so that their impact goes beyond the point fixes to benefit the population at large.

A striking example of this was how Tom Siebel worked on the Meth issue in Montana with his Meth Project Foundation:
- The government approach was a typical law enforcement one, resulting in the filling up of jails (50% of adult population in Montana jails is related to the meth issue) and no real progress on the ground: despite this effort, meth consumption was on the rise and kids were not really aware of the dangers of using it, some even though it had beneficial effect on memory, the whole thing costing the State about $100M every year.
- Tom approach of the problem was a marketing one: Meth is a product, and consumers are consumers, therefore the best thing is to reach them as you would reach consumers, and give them the relevant information that will allow them to make an educated choice when it comes to buying and consuming. The results of the ad campaigns (TV, radio, press) and after $15M between 2005 and 2006 was a decline in Meth use in the work place by 70 percent, meth related crime has decreased 53%.
Beyond fixing the meth issue in Montana, what Tom did is that he made a very interesing point: he picked an issue, devided a plan to resolve it, worked out the kinks and documented the process and results, and he is now licensing the "platform" to other States so that they can resolve the issue themselves in other places.

This is very close to what Muhammad Yunus is pushing in his book "Creating a Worlds Without Poverty" in the concept: real things come from people who live in the real world, and so the best way up is to have non-profit collaborate with for profit while governments just provide the infrastructure within which all this can happen.

While business with Web20 is starting to include consumers into the value chain (wikipedia, delicious, digg, google maps edits, etc...) there is no questions in my mind that the same can happen with government processes, where citizens can have a lot more impact than they used to: it is all a question of the data you can access, and how you can document what is being done.

The answer is in the network

Just ran into something very interesting that is proving one year after it was written to be as predicted where social networking is going:
Rich Gordon is right: with the proliferation of social networks of all kinds what will make the difference for me is not which destination site you can attract me to, but rather which data you are able to send to me wherever I hangout. So forget Facebook (or not if this is where I am most of the time), just find where the right place/network is for me and talk to me there. The future belongs to those who have the right social engineering tools to do this.
And if you want to get into this, eCairn is a good place to start: www.ecairn.com

Future of small business forecast report released

Just released: the 3rd edition of the Future of Small Business report. It is called The New Artisan Economy. This was a joint effort by IFTF, Intuit and Emergent Research. The report and related materials are at: http://www.intuit.com/futureofsmallbusiness.

Politics within the Corporation - how bad things happen and nobody feels responsible

The lastest fiasco from Societe Generale is another good exemple of how the political game is played within the corporation:

- let's start by saying that the whole corporate system is conceived to promote people who do not take risk: taking a chance and trying things means taking a chance that it will not succeed, and when the time comes to select a candidate for the next level up, if you took a chance and it did not work, you will be eliminated in favor of the guy with the perfect track record, the guy who did not take a chance.
Granted this is not the complete picture because you also need to ride the various hypes as they come, so that you are always seen at the right place at the right time even though you are not doing anything (the beauty of delegation and getting credits for what your reports do right)

- In such an environment doing nothing also means letting your reports do things that may not be 100% ethical as long as you can maintain an ability to claim ignorance. If the results are good, you will benefit from it, and if the results are bad, you can always join the chorus and protest at the discovery of the facts.
Nobody is fundamentally bad, but it is human to do things that benefit you as long as you know (or think) that there will be no serious consequences to your actions. And not everybody has the same level of tolerance when it comes to evaluating the acceptable from the bad.

- In the end, the dilution of responsibility is built into the system, and it becomes very easy for everybody to never feel really responsible for what is happening. And this is how you get the Enrons, Societe Generale and many other stories that don't always make it to the front page of the International Press.

I worked for many years in this type of environment, I have seen it happen at a small scale, and from where I am today I still do see it happen at a much larger scale in some corporations.

Now: why do we let these things happen? This is the power of status quo: when issues pop up, the press makes a lot of noise and a few bad people are punished, and maybe the corporation is shut down, but who cares if this is not really affecting me. Or is it? But then who am I to make a difference?
The very sad thing about all this is that when the large corporation loses, the real losers are the little guys who have their retirement in mutual funds.
Should we care about these little guys?

Something becomes wrong with Corporations when the entrepreneur who started them disappear behind investors or even worse behind a multitude of public stock holders who do not really have much details (and much less control) on what these corporation are doing! Back to my previous post, let's hope that the changes brought by Social Networking and Peer-to-peer collaboration will bring us better systems to organize how we work together...

Open Business: a world of guilds

Social Networks made a big splash, and we are still trying to recover from the hype (where is Facebook going?). But while it is nice to share pictures and videos, this is not much more than entertainment and another cool way to waste time.

Meanwhile I also see the workforce getting organized and social networks with a purpose. There was the grassroot movement during the previous presidential election, the voting machine incident with Diebold against a network of activists as described by Yochai Benkler in "The Wealth of Networks". And all this is now getting corporate: I watched the coworking movement start in San Francisco and expand all over the Globe, I see efforts at the infrastructure level, such as FON, and I see discussions around social networks of business development consultants, CFOs, developers, designers, tech support experts, etc... Soon you will be able to do business by just getting resources from the relevant network. You will pick them from each other based on their rating, how far they are from people in your direct network and how much they cost.

Michel Bauwens talks about P2P civilization and Xavier Comtesse talks about Direct Economy (and even Direct Anything)
I see the emergence of a world of guilds of specialists, similar to the ecosystems that John Seely Brown describes in his book "The Only Sustainable Edge".

Ultimately, I see a lot of opportunities: if this is where we are going, what else do we need to make the guilds system completely functional?

Web30: Xavier Comtesse was right

While "semantic web" is a very confusing name, and web30 will tell you nothing, I finally got a better understanding of what this is about (sorry if I am a bit slow) when I read the Semantic Wave 2008 Report from project10x.

And I realized that the matrix presented by Xavier Comtesse one year ago (see my previous post on this) is a very good lens that helps figure out what this is going on:

Xavier's matrix looks at 2 axis:
1- Knowledge
-- raw data
-- data with context
-- data with context over time that leads to
-- modelisation and then to
-- forecast

2- User involvement in the value chain:
-- receive info
-- pick and choose (self service)
-- customize (Do-it-yourself)
-- co-design
-- co-creation

From what I see, web10 was about getting raw data on the web, and providing tools to pick and choose. Web20 was about connecting people. Now ajax, mashups, geotagging (connecting intelligence) are giving people the ability to customize how the data is delivered to them (do-it-yourself), and so what is coming next becomes fairly obvious when you look at the matrix. What worked to explain the success of eTrade also works at the macro level to explain what is happening.

If you haven't read this yet, I recommend you look at what Xavier presents: http://thinkstudio.com/text/directeconomy_slides.pdf

The web as an education tool for the next elections

I just ran into a very interesting website, still beta but something worth looking out:
Check out http://www.select2008.com.

The service helps users select their top candidates for the US Presidential Election by answering 20-30 questions. We use advanced analytics to ask the most relevant and selective questions to zero in on your top candidate, from a database of over 1,500 questions on policy and programs. It is both fun and enlightening.

You can view your results at any time in the process and compare how much in agreement you are with candidates on all types of issues, such as the war in Iraq , healthcare, taxes, social issues, etc. You can also register and then compare your results with your friends. The site should be integrated with Facebook shortly.

Isn't the web a beautiful tool?

Venture Capital: the truth behind the myth

After spending quite some time helping entrepreneurs, I am know convinced that the VC model has evolved to a point where it is starting to die from too much success, creating another bubble in its own world:

- Too much money, too little time, resulting in smart people being hired to track the deals, but who have no clue what entrepreneurship is about and spend too much time in spreadsheets. Not a good recipe for success.

- Too much money resulting in a funding gap getting bigger and bigger: in 2006 the average initial investment from VC firms went from 5.9M$ to 6.2M$, and VC firms only invested in 700 "seed and early stage" deals, while angels invested in about 50,000 of these. Big money, later stage deals also means that the return are going to be less, how often can you expect a 10x from a C series investment?

- And beyond the returns on one deal or another, the results overall are not that great: VCs themselves will tell you that out of 10 deals 4 will die, 3 will do so-so and only 3 will do ok to very good. But even worse, the rest of the world will confirm that something is wrong: if you take a look at the Inc magazine top 500 companies, in 2006 only 7% of these were funded by VCs or private equity. So it means that 93% of the fastest growing companies were not part (did not get in or fell out of) of the famous and so well advertised VC process - VCs have been missing something.

- Even VCs are getting tired: raising funds is getting more difficult, and the business is getting very tedious, getting away from the passion of entrepreneurship (what I believe the "old school VCs" were about) and into a more austere financial world (the smart but arrogant MBA with no clue about what is happening in the trenches)

So what next?

- While VCs seem to be lost, the angel community is thriving: about the same dollar amount as done by VCs is invested by angels each year, but it is done by 250,000 to 300,000 individuals investing in many more deals at much smaller amounts. The good news is that if I go back to my 93% of the Inc top 500 companies, the average initial startup capital for these companies was $75K. So it seems angel investment is the right place to be. And these angels are now getting organized into angel groups to spread risk and help scale (sharing the work of screening, due diligence etc...), and they are starting themselves to raise funds (typically from individuals) to increase their reach if needed.

- Angels are getting the good deals: while I have no numbers on this, I have heard VCs tell me that their best deals were referred by angels rather than by other VCs. And I see now VC firms trying to get back into the early stage through scheme such as Charles River Venture Quickstart program, or YCombinator.

- So while it is easier and more sexy for the press to keep talking about the successes of famous VCs (Stories about Yahoo, Google, Skype and who's next?), the real work of value creation is being done somewhere else.

- Beyond the investment aspect, I think the key to success is that we are talking about individuals who are often time contributing their experience directly into the business, mentoring the entrepreneur through his/her own venture. People investing in people, something that looks like the P2P work we see happening in the Open source community, but applied to entrepreneurship. My bet is that this is where the future is...

PS: thank you to my partners Jean-Xtophe and Alberto at Melcion Chassagne et Cie for some of the homework on numbers

Pipl.com

Thank you to my friend Erik for pointing out pipl.com. Yet another people search engine, but with a better UI than what I have seen until now, and an impressive coverage. I was able to find my French friends in there. Scary thing to see how exposed we are - we know that there is no privacy on the internet, but it is always a lesson to see how true it is...

Quickeo is getting visibility

An article in a French magazine on Quickeo: http://www.lexpansion.com/art/32.0.161330.0.html
The service is getting momentum :-)
The hard part for this service is that it is not for geeks, but for the mass of non-geek users who still need an easy solution to share their pictures and videos, and still rely on email rather than hyped websites to do so. And these people are not as easy to find as your average geek, because they do not hang around the web as much. Slowly but surely Quickeo is getting to them, so stay tuned...

Forget Skype, GizmoProject rules

Just came back from a few days off to find that Skype had taken over my machine and would not give it back to me. After the poor performance Skype had a few weeks ago, for which they sent an apology and a credit of a few days for the "Skype Pro" user, I now discover that Skype is using my bandwidth and my CPU when I am not around, and keeps it when I come back. My machine was slow, and my CPU running at 90% for Skype. I understand that they would do that when I am not using the PC, but if it keeps creeping down the system when I am using it, then I have a problem.
Meanwhile GizmoProject quality of calls is just as good if not better, and it is built on an open system, using SIP numbers that can be used across network. If I needed something to convince me to switch this is it, I am now a GizmoProject user. You can find me there at the same ID.

Vator.tv - a new way to do PR for your business

It is now possible for companies to upload a video version of their PR pitch on Vator.tv. A great concept with many opportunities: for investors to save time when looking for deals, for entrepreneurs to showcase themselves in yet another setting.
I have tried the process for Quickeo and it is pretty cool...

Quickeo viewer has been updated to support blogs better

In the album url provided from the Quickeo client (in the Manage screen, click on the URL tab on the right side of the screen), all you need to do is replace www.quickeo.net/qViewer/qViewer.php?key=blabla by www.quickeo.net/qViewer/qViewer4b.php?key=blabla, and add the option scrolling='no'

We will work on something more user friendly in the future, but at least it can be done now :-)

From the web2.0 conference 1st keynote

The news from the first keynote at the web2.0 conference is that there is nothing new:
- Jeff Bezos is working on OnDemand infrastructure, he is a believer of the web as a platform. Software as a Service has been around long enough that I would agree with the idea that the trend is here to stay.
- Beyond this and despite the fact that there is a lot of people attending, not much was said that was a real revelation. Web2.0 is about collaboration, and building blocks are being worked on, but we are still looking for where all this is going to go, and the energy level was not exactly what I expected.
Maybe more will come out of the next few days...

MoveOn's Virtual Town Hall Meeting on Iraq: Apr. 10, 2007

For me Web 2.0 is more about social change than technology, as brilliantly explained by Yochai Benkler in the Wealth of Networks. And MoveOn.org has been a major player in trying to capitalize on this trend. It will be interesting to see what happens with this next one:
>>
MoveOn.org Political Action will hold three "virtual town hall meetings" in 2007 to introduce presidential candidates to MoveOn members and publicize candidates' positions on top issues facing the American people.

The first virtual town hall, on April 10, will focus on the war in Iraq. Subsequent meetings will discuss health care and energy/global warming. Each will bring together thousands of people at house parties around the country to participate through an interactive online presentation.

Quickeo for my blog

The real thing for sharing spreadsheets

Google has tried, but their Google spreadsheet is not really great, nothing I can use in real life.
But there is a start-up who has an interesting solution you may want to check:
http://www.xcellery.com

What is nice about this service is that you do not have to be online to access the info. You access the spreadsheets through your regular Excel software, but the data is synchronized in the back so that the other users you are working with can also see the updates as they happen.

The best I have seen so far on the matter....

Another attempt at managing online reputation - Venyo

I just ran into this very interesting start-up working on reputation. What is nice about their approach is that they tie ratings to tags, so it allows for very flexible rating of people.

www.venyo.org

blog.venyo.org

http://www.venyo.org/download/venyo_reputation_service_presentation.pdf

A service to watch...

The Quickeo website is finally open

For those of you who want to share videos, photos, music etc... with friends (and only with friends, not the whole word), Quickeo is finally available for download. The software is slick (I am on the team, so check it for yourself), and it is addictive. I have to admit that after playing with it for sometime, I really like sending quickeomails to my friends and family, much nicer than plain text :-) Check it out, let me know what you think...

Something really cool from the Gizmo project team

Check this out, it is now possible to call from your browser at gizmocall.com
I love the idea, one less client I have to load at startup...

Protest in 2nd life

A good story here about somebody virtually protesting on 2nd life.
I really believe that 2nd life would be a perfect place to do conflict resolution. No yelling, no fighting, no killing, just sit and listen to the other (if you are willing to get some progress), then take your turn to speak...

A great report on the Future of Small Business

The corporate social contract is broken (no more job for life, much less benefits, etc...) and personal business is on the rise, as a way to provide better life-balance or options for baby-boomers reaching retirement age. If you want to get a glimpse at what the future of work is, the Institute of the Future has produced a very interesting report.
With the new trends, comes a need for coworking spaces such as workclub, and comes collaborative entrepreneurship. Something to look forward to...

2007 - the year for reality check

After a year with a lot of bubble feelings (YouTube acquisition, hype around social networking, etc...), we are now entering into a year of reality checks. Many start-ups have been launched but I have the feeling that the excitement around social networking is cooling down. While the technology is much more accessible, and the price to get a website going much lower, it remains really hard to build a strong community of users, and there is always this unavoidable need to bring value but also revenue at some point.
Interesting enough, it could also be the beginning of the end of the free. While it is really cool to get all these services for free, developers, designers, managers all need to pay rent at one point or another. So I believe we will see more and more of paying services, and I'll be the first to enjoy paying for something that brings me value and does not have the same level of noise that you get with all these ads.
Signs of this trend:
- Google results are being questioned - can you trust page rank? and how are search results being impacted by paying ads?
- Skype is starting to raise their rate, and free calls are being changed into monthly flat rate offers
- Bitwine and Wengo are trying to help people monetize their knowledge, which otherwise could not be delivered online outside of free forums

The end of the free does not mean the end of freedom on the internet though. Actually I see it as an opportunity for entrepreneurs to re-organize around a more sustainable model, so that individuals can better compete against large corporation and collaborative entrepreneurship can take a stronger hold.
So I am ready for another exciting year, and hopefully you are too :-)

Open Source for Hardware

Another interesting idea in the area of crowdsourcing: open source approach to hardware design.
http://newassignment.net/blog/nichole_altmix/dec2006/11/open_source_move

Tech lessons learned from the wisdom of crowds | CNET News.com

Crowdsourcing is making its way into the corporation. A very interesting article on how this is happening:

Read more at news.com.com/2100-1014_...

histoire2femme.com

A very interesting discussion with David Sifry, from Technorati, on what is happening on the web and where this is all going.Thank you Estelle for organizing the meeting and capturing this moment.

Read more at http://histoire2femme.typepad.fr/histoire2femme/2006/12/interview_de_da.html

NewsTrust - Our Guide to Good Journalism - Beta Home

A great service launched today, which brings some balance in the distribution of news through a rating system that helps evaluate the neutrality of news articles. Definitely something that everybody should subscribe to...

Read more at beta.newstrust.net/webx...

Techcrunch » Blog Archive » BitWine Gives Access To Those In The Know

Finally something that will help unleash the voice services market, one of the huge potential offered by Skype that had not really been exploited so far.

Read more at www.techcrunch.com/2006...

Smart Mobs: Boston Launches Small Business Incentive Card Program

This is great news, the Interra project is finally getting more visibility. This program has the potential to change how we function within our community, let's hope more implementations will follow...

Read more at www.smartmobs.com/archi...

Paris blogue t'il?

Maybe this is me being French, but I am amazed at the amount of activity in France around everything web2.0. I see people involved in Coworking, Pinkomarketing, I see great start-ups being represented at shows in the US. Maybe something that has to do with the online culture of people who were raised with Minitel?

I'll will not be in Paris for LeWeb3.0, but I will at least get a glimpse of who is involved in these events the week before:



I will be looking for the begining of an answer there, why so many French are involved in this? Is it me or is there really something?

I love Google :-)

I was not impressed by Google acquisition of YouTube, but since wikis are a key component of building a better web I really like this one:


>>

JotSpot is now part of Google

We're writing to let you know that Google has acquired JotSpot. We believe this is great news for our users. More importantly, we want to reassure you that you'll continue to have uninterrupted access to your account. Both Google and JotSpot are committed to supporting our customers, and we understand that users have invested a lot in our products. In the near-term, we're focused on migrating JotSpot to Google's systems and datacenters. We'll work hard to make that move as seamless as possible so that customers won't be inconvenienced.

Why is Google acquiring JotSpot?

Google shares JotSpot's vision for helping people collaborate, share and work together online. JotSpot's team and technology are a strong fit with existing Google products like Google Docs & Spreadsheets and Google Groups.

What does this mean for JotSpot customers?

We believe that joining Google will accelerate our team's vision of offering users the best collaboration platform on the web. Google shares that vision and presents us with the world's best environment for delivering on it. We'll be taking advantage of Google's world-class systems infrastructure and operations expertise to ensure that access to your JotSpot is fast and reliable. We can't share any of our plans publicly just yet, but we can tell you that we're incredibly excited about the possibilities. We can't think of a better company to have been acquired by.

Will paying customers still be charged?

We will no longer be billing customers for the use of the service. Although you will still have use of the product at your current pricing plan, we won't charge you anymore when your current billing cycle expires.

What about security and privacy?

Your data is yours — that doesn't change at Google. We will continue to work to ensure the privacy and security of your data. Furthermore, Google is as committed to privacy and security as we are. Since the user information you provided to JotSpot will soon be transferred to Google as part of their acquisition of JotSpot, we want to provide you with the opportunity to retrieve your user information and cease usage of the JotSpot service before the transition. If you do not wish to continue using JotSpot, send an email to privacy@jot.com in the next sixty days and we will reply with instructions for retrieving your user information.

Answers to more frequently asked questions are available at http://www.jot.com/. If you have any other questions, please email support@jot.com.

In closing, we wanted to offer our sincere gratitude to you — our customers — for believing in us and helping us achieve success. We look forward to continuing that relationship at Google.

Best wishes,
The JotSpot Team

Blog for Change

A very interesting approach to mobilizing people to help influence the next election: the Blog for Change campaign from MoveOn.org, using blogs as a way to spread to word and recruit volunteers. Something everybody should consider doing...

Is the VC model broken?

Daniel Primack asks this question in his latest newsletter: Sevin Rosen Funds has indefinitely postponed fundraising for its tenth fund, which had been scheduled to hold a first close this week. This is being treated as big news in VC...

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...

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The Direct Economy document has been summarized in English

Following up on an earlier post , I have summarized the document published by Xavier Comtesse on Direct Economy .
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...

Open Services

There is a discussion going on on the Open Business site regarding Open Services and what they should look like.
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.

Designing Business for an Open Model

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...

The next frontier

The word is out, major companies are now moving into 2ndLife. Recently Sun Microsystems held a press conference in 2ndLife , from which you can see pictures here and here
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...

Another idea for YouTube

I have already written here about one of the way I could see YouTube start to make sense from an economic prospective,as a way to foster candidates (people or stories) for reality TV shows. Another opportunity for YouTube would be to become a marketing arm for the Majors: imagine a service where you would ask fans to create their own trailer for a coming movie from carefully chosen clips that would be released to them. Guess how much they would do to spread these to their friends, and the buzz you would get around contests to figure out which one the consumers like best. Something I would not be surprised to see one day...

Tagami.com » Coworking Sausalito

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...

The sure sign of a bubble

Now it seems that it is true that Google is in talks to acquire YouTube (See Techcrunch )
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...

Investment discussion

I just come back from a seminar on Angel Investment, and there are a few things I noted that may be of interest to Entrepreneurs:

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

Coworking day in Sausalito

For those in the SF BAy area, I would like to suggest a Coworking day in Sausalito.

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...