Monthly Archives

April 2010

Apple gets more successful, acts more like a bully

By | Uncategorized | 2 Comments

This morning I read that Apple has passed Motorola to become the largest US phone maker, as measured by units shipped.  Apple shipped 8.8m iPhones while Motorola sold 8.5m of their various devices (apparently down from a peak of 46m devices sold in a quarter).  Then the next thing I saw was Steve Jobs’ Thoughts on Flash in which he lists six reasons why Flash isn’t supported on iPhones, iPods and iPads.  The thing that bugs me is that they are mostly user oriented reasons – it uses more battery life, it isn’t optimised for touch – I would far, far prefer that Apple supported Flash and let me decide not to avoid sites that used it, or let developers decide not to use it because the iPhone experience wouldn’t be great.  The iPhone is a hugely mainstream device with a highly varied audience and this one-size-fits-all paternalistic attitude is inappropriate in my view.

But what bugs me more is that to my mind it is more than a little likely that Jobs’ real motivation is cynical market exploitation rather than maximising the user experience.  Apple is in an incredibly powerful position in the mobile value chain right now and it makes business sense to exploit that strength to weaken potential competitors – but if a company is going to go down that route then they shouldn’t pretend that their motives are pure.

Tellingly, Jobs’ sixth and ‘most important reason’ for not supporting Flash is that he doesn’t want developers using third party cross platform development tools.  He would rather that developers write directly for the iPhone and then incur further expense if they write for other devices.  As you may have seen Apple recently updated the Terms of Service for the iPhone SDK to effectively ban the use of third party compilers that create cross-platform apps.

The reason Jobs gives for disliking third party dev tools is that they might not support all the latest iPhone features and innovations, putting Apple at the mercy of the third party.  I’m not sure this is a good argument.  If the features and innovations are good enough then developers will find a way to use them, even if it means ditching the cross party dev tool and writing direct for the iPhone again – otherwise their apps will lose out in the app store to developers who do take advantage of the cool new stuff.

I think the upshot of this approach is that Apple’s period of dominance will be extended and fewer apps will be available on Android and third party platforms, but only for a while.  Over time there will be more smartphone users on other platforms than there are on the iPhone and developers will want to reach them, and then it will start to become cheaper to reach non-iPhone users than iPhone users and apps will start to appear first on other devices.  At this point Apple’s closed system will start to become a major competitive disadvantage.  They might then choose to open, but that will be increasingly hard if Jobs keeps writing posts like his Thoughts on Flash.

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Jack Dorsey, Twitter and venture capital – some musings

By | Startup general interest, Twitter, Uncategorized | One Comment

There is a great post up on Techcrunch which gives Jack’s personal history and some of his views on founding companies and venture capital. There are also some quotes from his investor Fred Wilson which describe his view of venture capital as a service to entrepreneurs.

Their philosophy is to my mind very progressive. Not all VCs and entrepreneurs would subscribe to it, but in the majority of areas I most certainly would.

A few highlights

On Jack Dorsey’s attitude to stealth:

Jack pursued a strategy of: Don’t hide what you’re doing. If you think you’re doing something interesting, get it out in the open, shout it out from the rooftops, and solicit as much feedback and input as possible. This strategy was particularly relevant for an Internet-based consumer service like Twitter

Jack Dorsey on the importance of choosing a VC who you would like to have around the board table:

The way the company and the product gained traction was that we got the best people we could think of and we worked with them. And we wanted the same thing from our VC. We wanted the best person across the table from us. It was not where he comes from, but ‘Is this guy fun to work with? Is he going to challenge us? Is he smart?’ This person was going to take a seat on the board.

Fred Wilson on how he wants to be an entrepreneurs trusted advisor:

I want to be the person they call when they need some advice. Whether it’s ‘I’ve got a problem with sales’ or ‘We need to raise some more money. What do you think the right way is to go about doing that?’ Or, ‘I have this big deal. I’m nervous about it because I’m not sure we can actually meet the expectations. But I want the revenue. What do I do?’ Those are all big questions. The beauty of being a venture capitalist is we’ve seen all these issues a lot of times. I’ve been doing this business for a long time now and I’ve observed enough to know what’s happening and interpret it appropriately

Jack Dorsey on how he wants his VC to be deeply engaged in his business:

I would hate to have a VC investor to whom I just send an email to say, ‘I need a business development person. Can you make some introductions?’ I want a VC who is always thinking a few steps ahead of me. The type of VC who would say, ‘Well, I think we’re doing this, and therefore we might consider defining this new position in this way and therefore talking to this person”.

Jack Dorsey’s perspective on the value of open and direct dialogue with a VC:

We had a lot of conversations with people down in the Valley,” Jack said. “At the end of the pitch, the person across the table would say, ‘Well, we’ll let you know fairly soon, like in an hour or so. We just want to talk internally, but we’re really excited.’ We didn’t react well to that. We wanted to be questioned, we wanted to be challenged, and we wanted to see some of their thinking around actually developing this product.

For whatever reason, Jack found more of those challenging VCs on the East Coast than on the West Coast. “I think it was just an attitude thing,” he said. “I found the East Coast to be a little bit more aggressive. They say what they mean in the hopes of just moving on right away. On the West Coast, people were a little bit more laid back. If they thought we were going down the wrong path, they wouldn’t necessarily say it, but they might make it known in an indirect way. I just didn’t appreciate that at all.

Fred Wilson on the strange service relationship between VCs and entrpreneurs:

I think venture capitalists, first and foremost, need to feel like their job is to make entrepreneurs successful. So I think of venture capital as a service business. The entrepreneur is your client. It’s a very weird relationship because the entrepreneur is not exactly paying you, even though they really are paying you. But they absolutely can’t fire you. In fact, you can fire them. So it’s among the weirdest kinds of service relationships that one could come up with.

Most of the things here are challenging and hard to get right, for both the entrepreneur, but they describe the sort of relationship I aspire to and which I think gives both sides the best chance of success.

Some tips for companies making a 15m pitch

By | Uncategorized | 3 Comments

I have been listening to 15 min startup pitches at the UK and Ireland Tech Tour for most of yesterday and some of the presentations were better than others. Below are some observations on what made I thought characterised some of the good ones and some of the bad ones.

Before I get onto that I want to comment on 15 minute pitches generally. They are a format beloved of investor events and conferences generally, but often disliked by entrepreneurs. Investors like them because they can see four companies in an hour and if you come to one that doesn’t fit your focus you don’t have to wait too long for the next one. Entrepreneurs are less enamoured because it can be hard to fully explain a business in fifteen minutes. I think the trick is to treat the sessions as opportunities to whet the appetite of VCs rather than make a complete case for your business. Give enough facts to demonstrate the excitement and address the most obvious concerns and then leave it there.

Things the good presenters did:
– Get up and move around
– Be funny
– Be interactive
– Do something cool – e.g. one got an iPad out, which is still retry unusual in Europe
– Be lively
– Use pictures
– Tell a story
– Be specific and avoid broad brush generalisations, particularly about 
your market – success in startup land is about doing one thing well
– show their company has momentum
– Don’t read from the slides
– Don’t say ‘umm’ too much

that said the most important thing by far is to have a great business!

Tips for companies making a 15 minute pitch

By | Uncategorized | 5 Comments

I have been listening to 15 min startup pitches at the UK and Ireland Tech Tour for most of yesterday and some of the presentations were better than others. Below are some observations on what made I thought characterised some of the good ones and some of the bad ones.

Before I get onto that I want to comment on 15 minute pitches generally. They are a format beloved of investor events and conferences generally, but often disliked by entrepreneurs. Investors like them because they can see four companies in an hour and if you come to one that doesn’t fit your focus you don’t have to wait too long for the next one. Entrepreneurs are less enamoured because it can be hard to fully explain a business in fifteen minutes. I think the trick is to treat the sessions as opportunities to whet the appetite of VCs rather than make a complete case for your business. Give enough facts to demonstrate the excitement and address the most obvious concerns and then leave it there.

Things the good presenters did:
– Get up and move around
– Be funny
– Be interactive
– Do something cool – e.g. one got an iPad out, which is still retry unusual in Europe
– Be lively
– Use pictures
– Tell a story
– Be specific and avoid broad brush generalisations, particularly about 
your market – success in startup land is about doing one thing well
– show their company has momentum
– Don’t read from the slides
– Don’t say ‘umm’ too much

that said the most important thing by far is to have a great business!

Spotify lines up against iTunes

By | Music | 5 Comments

As reported by Tim Bradshaw in the FT today, and also on the Guardian blog there is a new release of Spotfiy out imminently that will allow you to import your current music collection and mix it seamlessly with the Spotify streaming service.  The great thing about on-demand streaming services is the range of music you can access, but the big problem is that they are unlikely to ever have everything you want to listen to, with the result that most of us have had to run with two different music players.  This release gets over that problem which is a big step forward and will eliminate a lot of the distinction between owning and accessing music, something I expect to hasten the inevitable paradigm shift from an ownership mindset to an access mindset.  As Spotify founder Daniel Ek says, this is a huge shift in mindset and whilst I expect it will now happen more quickly it will still take some time.

Many people, if not most people, currently use iTunes to play the music they own and this move puts Spotify firmly in competition with Apple’s market leading music service.  It will be interesting to see if that changes Apple’s view on the suitability of Spotify’s iPhone app for inclusion in the App Store.  It would be a pretty cut-and-dried anti-competitive move if they chose to ban it now.

The other big thing in this release is deeper integration with Twitter and Facebook.  From the video below it appears as if you log in via Facebook or Twitter your friends will be listed in the Spotify client and you will be able to share tracks by dragging and dropping.  This should be good news for artists who will get more publicity and for Spotify as they seek to grow their user base.

When I first met Daniel a couple of years ago he told me how he would leverage third party social networks rather than build a social network inside Spotify.  In the intervening period some of his competitors opted for the opposite strategy but given Facebook’s announcement yesterday it seems to me his decision to focus resources on building a great music service looks vindicated.  I dwell on this point because I think the same will be true for many other consumer internet services.

From a commercial perspective Spotify have announced that they now have 320,000 customers on the €9.99 per month subscription service, up from 250,000 three months ago.

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Facebook’s Open Graph initiative could be a whopper

By | Advertising, Facebook | 3 Comments

As you might have seen Facebook last week announced their Open Graph initiative.  As a user I’m excited by the idea of getting effective crowd sourced recommendations and knowing which of my friends use a site and which other sites are popular with users of the I’m on will both provide interesting context.  From a privacy perspective I would take the trade off of sharing my personal data in return for the benefits above.

As a publisher, I’m marginally excited hopefully I will be able to install a Facebook widget which will:

  • make TheEquityKicker a better experience for site visitors
  • help me learn more about you all
  • help traffic growth by promoting sharing

From a publisher perspective the one additional thing I would like to see is a way to integrate comments on Facebook with the main comment stream.  I already suffer from a fragmentation problem as maybe 10% of the comments on my posts already happen on Facebook – and that percentage is likely to increase if this initiative is successful.

From a business perspective the rich database of preferences that Facebook will generate should offer powerful ad targeting possibilities, something I have been keen to see emerge for a while, and it will be interesting to see how well the targeted ads perform.  I’m also intrigued to see whether they will make their data available to third party publishers to target ads on their site – which has the potential to significantly increase publisher revenues and profitability.

It will also be interesting to see how this privacy experiment plays out.  As with Alex Iskold on ReadWriteWeb I suspect most people will happily take the ‘nice-service-in-return-for-personal-data’ trade off Facebook is offering.  If they do, and do so knowingly, we will finally have evidence that in practice users don’t value privacy highly and hopefully the privacy debate will move forward from the rut it has been stuck in for a while.

Finally, this move puts Facebook in an even stronger position in the web ecosystem. Borrowing again from the ReadWriteWeb analysis they have created a positive feedback loop between themselves and their users web activity which excludes their competitors and will become more powerful over time.  Google is so strong in part because it exploits a similar feedback loop when it improves search results by looks at which links we click on and how long we stay on the sites.

Twitter Weekly Updates for 2010-04-25

By | Weekly Twitter digest | No Comments

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Approaching a VC by email

By | Startup general interest | 13 Comments

There was a good post on Techcrunch Europe earlier this week with practical tips for entrepreneurs on how to construct an email to a VC they don’t know.

Building on that advice, which was all solid (and worth reading), I would add that it is important to bear in mind that most VCs get a tonne of email and that means it is important to get your key messages across quickly.

I try really hard to get to all my mail in a timely manner, and mostly I do a good job of that, but in order to manage my days effectively I put emails in different priority buckets. If I didn’t do that I wouldn’t be able to respond quickly to my partners and portfolio companies – an obligation that must rank ahead of my duty to entrepreneurs I don’t know. The system I use to manage email is pretty structured and not everyone operates the same way, but most all VCs have a similar requirement to perform some sort of prioritisation.

That means it is important for entrepreneurs sending emails to VCs they don’t know, or don’t know well, to structure their message so that in the few seconds I’ve got to decide which priority bucket your email goes in I see something that makes me rank it highly. A good ranking can mean the difference between getting a reply in a day, a week, or longer, and occasionally much longer.

Good ways to catch my attention are:

– drop the name of a mutual friend in the subject or first couple of lines of the email

– link what you are doing to something I’ve written, done or said – again early in the email

– make a compelling 25-50 word pitch for your company in the first paragraph or two

– make it crystal clear that you are looking for money (or whatever it is you want)

I hope that helps

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London’s got its mojo back

By | Startup general interest | 2 Comments

image On Tuesday night I attended the Geek’n’rolla conference after party and it was absolutely buzzing.  There was a palpable confidence in the air and for the first time since the 2008 crash I think we can now definitely say that the UK and European startup scene has regained its momentum.

Unfortunately I had a board meeting during the day and wasn’t able to attend the conference itself, but the line-up was fantastic and everyone I asked said that they had a great day and learned a lot.  Some highlights from the speaker list who we don’t see too often: Alan Patricof (co-founder of Apax), Chris Fralic (First Round Capital) and Morten Lund.

You can watch videos from the event on Techcrunch Europe.

The conference was organised by Mike Butcher, editor of Techcrunch Europe and I want to single him out as a major contributor to the European scene, both for organising a top event on Tuesday and also for working tirelessly reporting on European startups and on organising other events all around Europe.  Conferences and other networking events are the glue that binds an ecosystem together and the work of Mike and other event and party organisers is critical for our continued growth and progress as we seek to close the gap with our American cousins.

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Nielsen – Facebook’s ads work pretty well

By | Advertising, Facebook, Social networks | 2 Comments

image Nielsen have been working with Facebook to assess the efficacy of ads on the platform and the results are pretty interesting – as reported on AdAge.

First the basics – Facebook ads increase ad recall, brand awareness and intent to purchase.  Specifically the Nielsen study of over 800,000 Facebook users found home page ads generated a 10% hike in recall, 4% in awareness and 2% in intent to purchase.  This tells us that users are not ad-blind and that the messages get through to at least some of them.  Someone in the comments on the AdAge post said that these figures are comparable with banner ads generally.

Now the interesting bit – when the ads got social recall etc. rose even higher.  If the ad featured friends of the user who were brand fans the increase in recall jumped to 16% and if the ads were co-incided with a similar mention in the users news feed the increase jumped to 30%.  Brand awareness and intent to purchase saw similar increases.

I like the way this shows how earned media compliments paid media.  If a brand has gone to the trouble of building up a large base of fans (earned media) it will get better results from its ad campaigns (paid media).  Moreover, keeping the fan base live, as measured by mentions in news feeds further improves the results.

This is all good news for social media sites generally.  I had been wondering if ad budgets were going to shift decisively from paid media to earned media (i.e. from buying ad campaigns to employing people to engage with brand fans) but this study suggests that rather than alternatives paid and earned media work well together.

The Nielsen study stopped short of making the link to actual purchases, but they are saying they will extend the study in that direction in the future.  The results of that will be really interesting, and give us a true calculation of the value of a fan.

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