Baron VC

It’s true as they say, you’re only as strong as your weakest point. Just look at Achilles. Without the cursed heel he’d be more a god than man. The great Skype outage of 2007 was amazing in that it was one of the rare major blackouts to hit Skype in all their phenomenal growth. The reason? A massive number of Windows updates happening at once.

I seem to have this curse that anytime I use a tool I rarely use, it goes out. I was extremely puzzled when Skype went out and almost blamed my mac and internet connection. Well, so much for that.

You rarely think of over-dependence on a dominant service like Skype until it gets yanked away from you. In fact, many people jumped over to check out the gizmo project as a result of the outage. It’s always nice to have a back up.

It really illustrates two things:

1. Always maintain a solid track record for crises
2. Always be ready for your competitor to trip

I’m sure a lot of people will forgive Skype and not think about this outage again for a while. However, it wont take much to refresh memories and after the second one people will start thinking Skype’s no good. Such a fickle consumer base. The internet gives us so many useful tools for free. Still, it amazes me how outraged people get over service quality for great products that are given to us for free. I guess it comes with the turf.

What happened on August 16 – Heartbeat

I hope this post title doesn’t bring on a cease and desist… I’ve been thinking a lot about the future of web apps lately along with the “return to simplicity” movement we’ve seen of sorts. At the core of the issue is that we’re all human and with it come all the quirks and flaws that make us human. The explosion of information technology has changed our lives mostly for the better, I think we’re now more or less confused and bewildered by what the web has to offer.

When the web first emerged for the masses in the late 1990s, it did so with all the promises that came with such a revolutionary collection of technology. It would provide the crucial leverage for ordinary people to reach a bigger audience. Fast forward to contemporary times and just imagine if the web emerged in the form that it is in now. Great sources of information on any topic, free high-quality pictures and videos, free international phone calls, cheap hosting for your website or application, various publishing platforms, rich social networks and so on. The stuff we had in the 1990s was practically nothing more than an enhanced collection of MS Word documents online compared to what we have now, yet in a sense things “feel” less exciting than 10 years ago and even noticeably more than say 5.

Now that the novelty of the internet has worn off a lot of things about the internet have more or less faded into the background or the realm infrastructure. Just as none of us get excited about being able to talk to someone on the other side of the world via traditional land lines (unless we’re 5 years old and using a phone for the first time), we’re now at a point where we take the internet for granted. It’s such a seamless part of our lives that it’s hard to give it a place of its own. The only time we’d realize how integral the internet to our lives is would only be driven home by a total, global outage.

The Olympic Phenomenon

I call this the gift and the curse of open source (yes, “curse” is pushing it). If you’re just starting out in development of any kind, chances are you can find a variety of open source languages, frameworks, tools, or software to make it possible. Just look at the top 10 social networks out there (by whatever metrics). I’d be surprised if you even know the number 10 social network (I certainly don’t). However, in terms of features you probably wont notice much of a difference.

The reason why I call this the “Olympic Phenomenon” is because when you have everyone in the world competing against each other the difference between 1st place (a Gold Medal) and 10th place is very little indeed. In a lot of timed competitions the difference is measured in fractions of seconds. It takes a lot more talent and dedication to separate yourself from the fray while mediocre solutions are a dime a dozen and more or less free.

When you look at the Olympics, it’s likely you’ll only remember a handful of people and most of them would be medalists unless you root for a home country that doesn’t do so good. Yet, when you think about it, all the competitors are the top of the top athletes in their home country.

You see this on the internet a lot where someone will take a popular web app only available in English and copy it in another language to launch a successful domestic IT venture. Building your app in English means competing with the best in the world as well.

Ordinary People, Extraordinary Information

Let’s face it, we’re all inundated with more stuff than we can handle. We tend to have a handful of favorite destinations and another roster of destinations that get visited less and less frequently. For an increasingly jaded audience applications have to be:

The nice thing about the internet is that people can fight and bicker but at the end of the day everyone comes out a winner. In real fights people lose teeth, eyes, pride, and much more. Bystanders would be foolish to jump into a crazy brawl but on the internet everyone just jumps right in.

The latest Calacanis theater is brought to you by Dave Winer of Scripting News fame. This time Calacanis was speaking again like he usually does, doing a little entertainment, postulating, and self-promotion. But the man is good and people know to expect a little promotion so he gets offers from all over to speak.

I guess the interesting thing about this encounter is that it happened in real life instead of being initiated on the internet. Just imagine Al Gore heckling George Bush on his position regarding Iraq. That would be a festival for sure.

My friend Dave Winer heckled me from the back row and threw me under the bus on this blog yesterday (insert “with friends like these” joke here). Dave’s complaint was a I was “spamming” from the stage by talking about my latest passion (the internet’s evironmental crisis) and my piece of the solution, Mahalo, I’ve never been heckled—heck, yelled at—like this in mind presentation in 12 years of speaking at events, let alone by a friend.

Apologies to Calacanis (Scripting News)

Accepted

So, at the end of the day we get the usual kiss and make up. I thought that this discussion was interesting not for the celebrity slugfest that it was but because it illustrates the identity crisis of the internet.

All the foundations of the internet are built on open source specifications and software. Not even Microsoft transporting their fat coffers back in time could create the vast infrastructure required to power the internet. All the wonderful things we get from the web is built on such gifts of time and talent. Yet, a lot of the stuff built with such open source tools also happen to be cash cows generating revenue of all sorts.

I think advertising on the web is quickly approaching the sustainability of television advertising (because the internet is eating their budget as well). Just as broadcasting companies spend millions of dollars creating programs for free (with ample ads in between), internet companies are producing web apps instead of TV shows.

Big ideas on the web are worth big bucks. All the open source projects out there give lone developers the power to create powerful commercial products yet open source is rarely if ever financially sustainable let alone profitable. I think the Winer versus Calacanis spat is a good illustration of “ideals versus reality”. Winer is the father of RSS and despite RSS’ ubiquity, he’s not a penny richer for the technology itself. Of course, companies like Feedburner exist only because RSS does. It wouldn’t even be an idea without RSS. I don’t feel sorry for Winer because he’s richer than any of us ever will be but it’s obvious that the man holds certain ideals about the internet very close to his heart.

Maybe those ideals are long dead because the internet is a money machine if there ever was one until something better comes along.

I was just going over Time.com Top 50 and can’t help but wonder what kind of criteria they used to select these sites. Now, many of the sites are well known and solid choices but if you spend any amount of time online (no pun intended) you’d already know about them. The other choices are quirky at best. I guess TIME is firmly grounded in the reality of print media to the point of not being able to see part of the bigger picture of the web.

Oh well, at least they picked MySpace & Evite for the 5 Worst Websites.

What I want to know more than that is what are the greater trends governing the web. Why are micro-blogging type social networks like Twitter gaining ground. What are the implications of Facebook’s open platform for the widgetization of other apps. Is there any staying power for lifecasting such as justin.tv now that we have higher quality video codecs, faster computers, and better broadband?

The last thing I need is a list of popular websites (that’s what Alexa’s for) or quirky ones (I have my own favorites and many more recommended by friends) that make no statement one way or the other. It also shows that we’re approaching an era of stagnation where big sites stay big while others simply whither.

It strikes me how many of the sites are simply information outlets for big media. I guess Google’s separated the wheat from the chaff so well that you’re either niche or big time. Food for thought or not.

Rank Our Picks – 50 Best Websites 2007 – TIME

Dear neglected blog,

This week I did nothing but work. Despite the fact that the project I’m supposed to cut my teeth on hasn’t started I’ve been busy looking busy doing fun and exciting things like coding a toy app that will never see the light of day, looking up obscure APIs, playing with the ruby programming language, and teaching others about rails (to the extent of what I know). With all this “work” I still manage to get dead tired at the end of the day and by Friday I’m spent. Funny how it takes a many hours of decompression before I can look at a computer again let alone code. I’m sure the situation will calm down after a while and then I’ll come back full force. Maybe.

I just can’t give up my idea. I’ve learned from coding a toy app that I semi-care about that my passion is still with my original idea. I’ve also learned that deciding on what you want to program means you skip past the hard problems that pose the most learning opportunities unless they are absolutely unavoidable. I need to put my nose to the grindstone more.

My only respite is to play Tetris DS like a madman against random people from around the world via my wi-fi network. The sad thing I discovered is that playing Tetris before bed significantly decreases the quality of sleep and aggravates fatigue to the point where I nod off in the afternoon. It goes without saying that productivity approaches 0 quite fast.

On the other hand, I’ve learned something interesting about a whole new approach to creating a tech startup that you will never see covered on TechCrunch or the like. It’s the sales-driven startup. The weird thing is that our company subsists on selling non-open source software that is widely available on the internet for free along with custom design, hosting, etc. No prestigious venture capital or anything, just real salesmen cold calling businesses and selling or shall I say re-selling licenses. They’ve managed to leverage this revenue to boost their software development division to hopefully create an interesting web application that may or may not take the company to the next level. If not we’ll continue cranking out apps for other companies until we do in order to earn our keep.

It’s strange to see how a tech startup can start simply by getting their sales division right but when you think about it Microsoft and Dell were essentially sales-driven at the beginning to the point where Microsoft founders sold a non-existant piece of software to make their first coup.

So many geeks quit a comfy, well-paid job, cash out their retirement or stock options, code like crazy and pray even harder. This is the business plan of many startups led by otherwise brilliant people. The first portion of the prayer cycle involves enlisting a sugar daddy investor (like venture capital) and the second stage involves selling off the company at a heft profit (at least to the venture capital) and then quitting to start another until you accumulate enough cash to become a venture capitalist yourself. Seems remarkably similar to real estate flipping.

Anyway, it’s time for me to sleep and go work another day. I hope I can someday start my own company but in the meantime I’ll try to overcome my allergy toward associating personal projects with work and even squeeze out some blogging time. Despite the lack of exercise I’ve even managed to lose 4 pounds. Must be all the sweaty walking in the summer heat combined with the massive amounts of coffee and water I drink at work (hey, it’s free!).

Sincerely yours,

I see a lot of review sites popping up these days. It’s probably the next thing that comes to mind after vertical search engines. With the rise of social networks I think online reviews will get a new breath of life. The fact is, most of us will go around cruising random sites or blogs for a second opinion. This in itself is a valuable form of information but what a lot of people want are comparisons and an idea of how much they can “trust” the person making the review. The biggest problems with review sites come two fold:

1. Aggregating enough reviews to give reviewers and incentive to contribute

   Nobody wants to write a review that no one reads. We all write our opinions in the hopes of influencing someone to action.

2. Dealing with businesses and individuals trying to game reviews

   It’s ironic that a lot of times the success of getting a review service off the ground leads you to spammers, scammers, and gamers.

3. Trying to keep users from getting overloaded with information

   The next step involves limiting information overload for reviews. Scrolling through pages of drivel gets tiring fast. People want a diversity of quality opinions but not be burdened by with spammish stuff. It doesn’t really matter if reviews are well-written as long as they are genuine and passionate.

   This is probably something along with vertical search that will continue to fill the gap or shall I say void of general purpose search.

I pray for the day that Microsoft falls. It’s the same with Google. It’s not out of bitterness or hate but simply because I want to see all the great technology they’ve got locked away in their dungeons unleashed onto the world.

Just look at Microsoft Surface. Looks a bit familiar. Kind of like a large coffee table version of iPhone’s touch screen. Will this ever hit the market? Nobody knows. When it does, the market buzz will probably be all but gone. If it does, it’s likely that it will only be available in a terribly integrated add on to whatever operating system they’re pimping.

Like IBM, Xerox, Bell Labs, and many others before and after them, our modern day equivalent of these technological powerhouses are companies like Google and Microsoft. Smart people like working with other smart people more than anything else and smart people usually carve out their own environment of freedom and creativity. Smart people also don’t know how much they’re really worth nor do they care. A lot of smart people really don’t care if their products hit the market or not.

It takes a really good shakeup of the mothership’s fortunes to let these people loose. An economic downturn perhaps? This is equally amazing when you think of all the crappy web sites that try to pass as startups getting multi-million dollar funding on nothing more than empty promises.

There’s probably a whole universe of interesting projects that we haven’t even imagined before gestating and taking shape within the confines of Microsoft or Google. Yet, we probably wont ever see these technologies see the light of day either.

Notice that I haven’t included Apple in the picture. I’m sure they’ve got a hefty R&D group going but something tells me that all the innovation Apple does is focused on technology they plan to release in the short-term. Frankly, I don’t see the point in heavily investing in technology that will never see the light or day or will some day earn profits for someone else. It sucks your treasury dry while the brilliant technology languishes in some obscure lab tucked away in a major tech company’s campus.

Microsoft Surface Hits The Ground Running

They say the porn industry is one step ahead of traditional content in the realm of tech. If that’s an indication of anything, I think traditional content has much to fear with the steady decline of porn on the web. Of course, there are many differences with regular movies but maybe some of the trends will hold true for Hollywood.

I think the increased availability of bandwidth and the popularity of torrents is what’s going to kill any form of original content. The really successful content will be the super successful blockbusters or simply the esoteric but high quality productions (not budget but quality).

Why Successful Content Generate Sales

Despite all the moaning by entertainment executives, good content manages to sell through traditional channels. I think executives forget that people are social creatures. Sure, you can wait a couple months or weeks for digital bootlegs but do you really want to wait around and miss the chance to chat up the latest production with your friends or coworkers? Sometimes that’s motivation enough to pay the high tax of watching films in a traditional theater (that rack up even more money with food and beverage sales). If you have a choice to watch something all by yourself or with a friend or loved one, most will choose the later. But still, you don’t want to waste your time much less money.

There’s also the good feeling you get of owning something you really like. Sure, you can burn your favorite album of movie onto a DVD from a torrent but a naked disk with the title written with a marker just isn’t the same.

Torrents give you a great choice. Just watch and delete whatever mediocre content you want or economize on the good stuff when you have to.

So, Where Does Porn Fit In?

Unless, you’re seriously into porn you definitely don’t want to dedicate any rack space to your porn collection. If you’re like most you probably don’t want to be caught dead with porn collection to start with. That’s where computers come in. You can have all the crazy stuff tucked away. Who would ever suspect that the 3.5GB movie file titled “Microsoft Word Tutorial – Advanced” is anything more than the title suggests?

Why would you want to buy porn? Do you really trust a porn company with your payment details? Do you really want to type in your name, address, and credit card info? How do you know this company wont sell your info to some seedy spammer based on the other side of the globe? This is probably one realm that people would easily prefer cash transactions.

Fresh Meat

I think digital distribution of bootlegs and competition from low budget amateurs will continue to erode porn revenues until the industry is dominated by both extremes of the spectrum. The fact is that people are constantly overwhelmed by any kind of content available on the web. We’ve become gluttonous connoisseurs and critics of any kind of media. Mainstream porn really has a tough mountain to climb against the small amateur shops.

I think it all comes down to “fresh meat”. The idea of surgically enhanced women that aren’t afraid to do anything in front of the camera is nothing short of grotesque. It easily degenerates into a game of who can shock you more. The industry definitely takes a toll on the women who make a career of it and watching them degenerate into nothing short of human toilets is far from sexy if you ask me.

It’s human nature to get tired of seeing the same old thing and we’re so jaded that we abhor things that seem overly artificial. This is a line that porn can easily cross into because there’s usually no compelling story or emotional investment. It’s all lust.

So on one end of the spectrum you may have stars that can hold an audience until they expire in this disposable industry and amateur or artificially amateur productions that are by definition “fresh”. Couple this with the fact that you can outsource production to Eastern European or other developing countries where beautiful women can be hired by the dozens thanks to economic disparities (this is where the lack of dialogue is an asset).

No More Mainstream

I think we’re approaching an era where there is no such thing as mainstream. Just look at the major blogs. A couple million page views or so right? I think Advil commercials still have a larger audience than a couple of them combined. Yet these blogs can make enough money to run a company or make someone rich.

We need smaller production houses for everything from music to movies. All we need is a distribution method that doesn’t suck and doesn’t overcharge (they need to make money after all) and traditional distribution will suffer even more.

After years of essentially steady increases, sales and rentals of pornographic videos were $3.62 billion in 2006, down from $4.28 billion in 2005, according to estimates by AVN, an industry trade publication. If the situation does not change, the overall $13 billion sex-related entertainment market may shrink this year, said Paul Fishbein, president of AVN Media Network, the magazine’s publisher. The industry’s online revenue is substantial but is not growing quickly enough to make up for the drop in video income.

For Pornographers, Internet’s Virtues Turn to Vices – New York Times

Google search is a staple to anyone’s internet diet like rice or bread. It’s the food with calories to sustain you and keep your body moving through the day but is it the main dish? I know you’re thinking, “but is there anything other than Google?”. To an extent it’s true that there’s no better way of finding stuff than Google but if we look closely, Google is far from our main dish. At least if you spend an ungodly amount of time on the web as most of us do.

Google to me is like a smart missile. It’s great for nailing it when you more or less know the coordinates of your target. I find the most utility from Google as an API lookup (for obscure programming stuff) or even as a phone directory (“Where’s the party held at?”) kind of stuff. It’s really like a massive encyclopedia to me (also all the reference stuff simply links back to Wikipedia). Which is why it’s hard for me to feel a sense of discovery or even excitement when using Google. It’s a boring work horse.

Sometimes it can be tedious too. We all have those “strange itch” searches that also happen to conflict with dictionary words. Try the search for “rails” as an example. It’s hard to imagine everyone on the web that searches for “rails” means the “web framework” and not something related to trains. Such is Google.

It also breaks down when you’re looking for a specific subset of information or when you’ve already got a grasp of what you’re looking for and want something more specialized. It’s probably why people use Technorati to search blogs and other vertical searches that meets their needs better.

A lot of people were surprised that Jason Calacanis would launch Main Page – Mahalo a human-powered search. Like what’s next hamster-powered servers? Still if we look more closely all the exciting stuff happening on the web today outside of Google’s realm is human-powered information services. Social news sites like Digg leverage eager and well-informed users to provide relevant but diverse news and information. Wikipedia (though they’ve got a couple frauds) basically allow well-informed or research savvy “experts” to collaborate effectively to distill knowledge.

Smart people like Niall Kennedy are doing things in the realm like his Startup Search. We’re at a stage where we know we want more from the web but just haven’t seen any viable alternative or earth-shaking paradigm shift.

There’s an Australian startup that tries to provide users with a truly “live” search that serves you relevant results in real time.

MyLiveSearch is fundamentally different. It works through a small browser plug-in. The search terms are put through Google, or other indexed search databases, but those results are treated as “starting points” alongside the user’s bookmarks and other popular web hubs.

From there, the live search takes over, crawling through hundreds of web pages connected to those starting points in search of more information relevant to the search.

Mr Gabriel says the results come back in seconds, and are almost always richer, more detailed and more useful than a standard, index-based search. His product can also search the so-called “invisible web” of dynamically-generated web pages that search engines have trouble indexing.

Better than Google? Creator thinks so

I think it’ll only be a matter of time before we see a “search meets social” paradigm shift. Something that’s more organic and relevant than indexed search like Google but not labor-intensive in the least.

First, I use the word startup loosely (from Silicon Valley venture capital funded companies to unemployed geeks hacking away in a basement). So you’ve been hacking away at a project in stealth mode doing the typical “hard to get” act. Alluding to friends that “you’re working on something” while not giving away any details other than “soon”. Of course, only your hardcore geek friends give a rat’s ass about it while the others shrug it off.

You’ve been slaving away at a vision for months on end. Sleepless nights coding, thinking about the details, running into all kinds of bugs and obstacles trying to get the code to simply work. You might even have a small circle of beta testers to bounce your ideas off of, a small band of passionate users always on the lookout for something new.

After what seems like forever, the moment of truth arrives and you roll out the latest changes and send out a notice to your closest acquaintances.

The reaction? Nada, zilch, nothing, etc.

Yet by finally spitting out the application you’re finally able to see it with an outsider’s point of view. And the picture isn’t pretty. It’s full of flaws. Giving birth to a web app is probably the closest any male web developer will get to giving birth to anything and like the real thing, there is postnatal depression.

The problem? You really don’t have any time to lose. You only have two choices. Give up and write it off as a big mistake or keep trying. The fact is a lot of ideas that look good in your head end up failures in real life. However, no idea is truly a loser. You just need to find a way to revive it and make it a win.

I’ve come to terms with my own creation and I’ve got some ideas to make it better. I’ll just have to keep working on it and use it as a source of inspiration. Has the journey begun or already finished? We’ll see.