Baseball is my favorite sport. I was fortunate to be living in NY during the later half of the 1980s. I was even more fortunate to have witnessed Game 6 of the 1986 world series with my own eyes. I also played baseball in high school. I was a mediocre hitter, to be honest, not really disciplined and with some technique flaws. My batting average was ok, but I had too many strikeouts (patience!) and too little home runs (technique!). However, I was a great fielder. I played a mean shortstop (great glove) and was often used in center field as well (good sped and arm). Not a trivial combination. At 36, I still reminisce on the few home runs I managed to pull 20 years ago. I follow the game closely, I have written about it and I still get heartbroken every time the Mets collapse.

Which is why I almost get angry when I see baseball being abused.

Shai Tsur, in his recent posts, has taken a brave swing at explaining the VC model. While Shai has done well explaining the rational of VCs, he has brought to my attention a Marc Andreessen’s post in which he compared the VC model to the game of baseball:

“The whole structure of how the technology industry gets funded — by venture capitalists, angel investors, and Wall Street — is predicated on the baseball model. Out of ten swings at the bat, you get maybe seven strikeouts, two base hits, and if you are lucky, one home run. The base hits and the home runs pay for all the strikeouts.”

In other words, it’s about slugging percentage.

Yeah well.

That’s the only similarity I can find. The differences, however, are more striking. the game is so fundamentally different I don’t really know where to start.

First of all, a baseball hitter doesn’t choose his at at bats. When you’re up to the plate you have got to face the pitcher, be it Johan Santana or Roger Clemens. You can choose your hitting strategy - wait off some pitches and see if you can get ahead in the count, or be aggressive and jump on the first pitch - but in each case you HAVE to perform. VC’s choose their pitchers, pitches, teams, fields, leagues, arenas. Imagine what kind of batting average a decent Major League would pile up if he had such privilege.

The second difference is even more fundamental. In baseball, your goal is to win as many games as possible during the season. Not a single game or a single at bat, but a pennant. This is the source of terms such as pitching rotation, sacrifice, intentional walk, middle relief, etc. Slugging percentage is nice, but it doesn’t really say that much. Barry Bonds had a great slugging percentage but San Francisco hasn’t won anything in who knows how many years.

The third difference is with the true meaning of stats. Baseball is all about stats. If you hit .320 with 35 home runs this season, chances are you’ll hit more or less the same next season. In the start up industry your last at bat doesn’t mean much. In baseball terms, you can have an MVP season and then follow up with a sub mandoza line season. You can find yourself with seed stock at Google and be considered a genius. You can pass on the opportunity to have invested in Facebook and go down as a fool. It’s much more about the guts than about the stats.

VC’s are not baseball teams. A typical VC is a group of talented individuals who work at a firm whose sole purpose is to wisely invest other people’s money. Everybody likes hitting home runs, but striking out in this case could mean hurting someone else’s pension fund. It’s different than waiting for your next at bat. It’s different than losing today and winning tomorrow. In this case, sadly perhaps, every loss counts. You could argue that the law of averages takes care of that, but in reality when it comes to making decisions about investments VCs are much more risk averse than baseball players. The think many times before they swing, a privilege a 95 MPH fastball doesn’t grant.

I’m not saying the models don’t count. They do. VCs do try to make intelligent investments and earn the highest returns they can. But human factors count just as much, which is why people tend to invest in entrepreneurs they already know from past experiences. Images count, which is why VCs look to invest in big names. Job security counts, which is you need to be safe when its time to explaining killing a portfolio company. Nobody knows which company is the next Google and honestly, very few people trust their own judgment when it comes to making such predictions. In the end, the system works its way to its own optimum. It’s only natural, but don’t compare that to baseball.

      

One factor that as a startupist you can’t help escaping is dealing with the size of your ego. It’s not that your ego wasn’t around before, but starting up is definitely a catalyst for its surfacing. There are plenty of reasons for it. You need to make many judgment calls during a single day. You need to fight off inferiority complexes triggered by watching the bigger players and their success. You need to motivate your team (and yourself) continuously and you have got to sell your vision to everyone almost every single minute.

No matter how successful you become, every time something happens to others your ego gets involved. You envy your friend next door for having raised $10M and when YOU get the $10M investment you envy your other friends’ big contract, or exit. You get pissed with a swift move from a bigger competitor that just blew off your business pitch. You feel sour after seeing the VC that turned you down 3 months ago investing in another company in your space. As romantic as it may sometimes seem, starting up involves dealing with rejection, a lot of rejection, much more than in any ordinary job.

It is commonly believed that for an entrepreneur, a big ego is not only a plus but a virtue. One of my friends who is also a partner in a leading Israeli VC has even admitted that they are somewhat looking for a big ego when they scout new ventures. A founder with a big ego (and big balls) can fight this rejection off while claiming an ability to beat Microsoft or Google - all with a confident face. You can’t become big if you don’t think you’re huge, right?

Wrong. As a matter of fact, the more I grow the more my belief is strengthened. The more you let go of you ego the better your chances are to succeed. Big balls have very little to do with big ego. Big balls mean you have faith in your ability to succeed. Big ego means you need an artificial layer to protect you from your own fears.

It’s safe to say every executive I have worked for had an above average ego. Some were good executives and some were bad executives, but none of them benefited from their big ego. It often caused them to never admit an obvious mistake or from taking good advice from people of lower rank but better judgment. When I look at my own career, my ego failed me much more than it helped me for the exact same reasons. It contributed to a wrong perception of reality and to Hubris. Any friction I ever had with a former boss had my ego involved. Professional and personal integrity are great points of character, but we very often disguise our big ass ego by abusing them.

I work with a group of talented individuals at Hooqs.com. All my colleagues are better than I am in at least one aspect of the start up game. The more I tuck in ego in the better I get. The more I listen to my ego, the more I have to regret. Straight and simple.

Getting a start up to a point of success involves a lot of faith, leadership, good perception of reality, resilience, setting personal example and a lot of self hyped confidence. This is called leadership, which in my book does not carry a big ego. You can tell everyone that you can beat Microsoft and that Bill Gates will work for you as a product manager, but it’s a load of crap. The only big shot names you will be able to hire at an early stage for the sake of their name are big shot egos with an agenda you don’t need. Chances are you’ll develop a great gallery of names, a bag of contradicting philosophies and a shitload of political issues to deal with. This doesn’t mean you shouldn’t hire supreme talent, you should, but here again your key to hiring real talent is with your ability to tuck in your ego and to let that talent contribute.

How does that blend with building billion dollar companies? My philosophy is that you can’t plan a billion dollar company. If you build a fantastic company it may eventually become one, but you need to build an excellent company before you even dream of it. The desire to foresee and fore-plan billion dollar companies is an original sin. It’s like trying to predict the future at the expense of decisions in the present. In the early stage, you need to focus on building a good product that people will be happy to use and pay for. You need to execute on a good marketing plan that encapsulates a good perception of reality. You need to make difficult compromises everyday and you mustn’t be deterred. If you do all that well you’ll build a good growing company. 

My ego is not going anywhere, but I am going to do my best to confine it. Confidence, faith, devotion - absolutely. But the border line with just plain ego is very easy to miss.

      

Google’s mobile version of AdSense is finally in beta. After months of second hand rumors, these news now seem substantiated as Google has put together a mobile ad FAQ page. Ads are available in 13 countries: the United States, the United Kingdom, Japan, Germany, France, Italy, the Netherlands, Spain, China, Ireland, India, Russia and Australia. Advertisers can choose between 12 and 18 characters per ad.

The pricing and clearance processes are similar to the ones already established on the web with one major exception. In the mobile version, the user can actually place a call to the published business. If this doesn’t drive mobile click through price up then I find it hard to know what will.

Will this work? Absolutely! I believe this is exactly what the industry needs to kick-back. Banners are limited and the collective user patience for them is exhausted. Useful, contextual information on the mobile phone can actually add value to the browsing session.

      

I spent the week in Monaco at MEM2007. From the personal perspective it was a very exciting show, after all, first time HOOQs was on display. From that perspective we had an excellent show - great feedback and lots of users and leads. We have work cut out for us, but the good news is that the market is HOT! The need for personalized, open, operator independent web to mobile services is all over the place and is welcomed by users, operators, content providers, analysts and bloggers.

MEM2007 is not really a classic exhibition, it’s more of a conference. Participation is nearly exclusive to industry insiders and the tracks, therefore, are very professional. To a start-up-ist, these represent rare opportunities to take a 30,000 feet view and collect some insights that extend beyond the daily challenges. My own personal climax was not a single industry lecture or panel, even though all were very interesting at their own merit. To me, the most insightful session was a focus group with 10 different teenagers. These young adults were gathered from different countries - Australia, England, France, Italy, Finland, Germany - and were all surveyed about their digital lives. Here is some of what they told us:

1. The key elements teenagers look for in their mobile phones is appearance. Then come ability to play music, quality of camera and feature richness. 

2. Nokia is the most popular handset brand. Out of the 10 participants, 5 had Nokias, 2 had Samsungs, 2 had LGs (Chocolate) and 1 had a Sony Ericsson. 7 out of 10 devices were 3G.

3. They don’t do mobile clients - only 1 participant ever downloaded a mobile application. A game. Used it a couple of times and ditched it.

4. Teenagers are smart shoppers. They don’t mind paying for Internet content, but hate buying stuff they can easily find for free. In other words, they will not buy songs for 3 Euros a pop. Contrary to popular belief, they buy a lot of CDs in addition to downloading free music. They know how to manage their music collection and how to get their favorite music on their mobile device.

5. On they other hand, all participants testified they would gladly buy new content if only they could find it easily. All participants agreed that the mobile operator portals are close to impossible to navigate through.

6. On top, the differences between operators and handsets make it impossible for users to share experiences. Not tracks or clips - pure information about where and how to find them!

7. They things they on their handsets are better Internet browsing and memory. They really don’t get why MP3 and Video enabled phones come with such little memory.

8. They don’t mind advertising if it makes content free. They are already used to online ant TV advertising, why object to mobile ads?

9. They all tried Google on their mobile and didn’t like it. The mobile experience does not provide anything close to the internet experience.

10. They don’t do MMS. All of them tried and all of them claim that “it doesn’t work”.

11. If they had to give up their TV, Mobile Phone or PC, 9 out of 10 would give up their TV (the only other answer was PC). None would let go of their mobile phone.

These young adults were not screaming in a vacuum. It was great to hear executives from operators presenting plans to further breakdown their walled gardens and push flat data rates. It seems like it’s only a question of price points now. This is music to the ears of user centric service providers. To me, however, getting the bartenders in front of our booth excited and HooQed was most rewarding than anything!

      

My day job has become my all-around-the-day job lately as you can tell from the lack of recent writing.  Well, the reason why is now out in beta!

HooQs is a user centric web to mobile service. You can search, create, save and share internet media with mobile phones.  Your personal media is aggregated in channels which we call HooQs. HooQs can be saved, managed, sent to mobile phones around the world and of course, enjoyed. Registration is optional, however as a user you get your own internet rich media portal tailored to your own personal taste.

Since the whole idea is to get personal, my own favorite HooQs at the moment are Paris Hilton in Jail, Vintage TV Commercials, Best of Monty Python and Computer Game Nostalgia.  My full HooQ board can be found here.

So get HooQed but be gentle, Beta means Beta! We do promise to do our best to continuously improve and personally I would more than welcome your feedback and comments! 

HooQs is best used on a 3G phone.

      

My friend Shahar has decided to sign off every post from now on with the following:

“Moreover, I advise that the genocide in Darfur must be stopped”

This is a paraphrase on Cato the Elder, who used to sign off every speech with a pledge to destroy Carthage (”Ceterum censeo Carthaginem esse”).

Israel and the whole Jewish people have commemorated the victims of Holocaust last week. We are very good in remembering what happened to us, we suck at preventing it from happening to others. We seem to have an infinite repository of excuses. Once it gets out of our immediate scope we simply do not care. I am not sure which one is worse.  

I am very ashamed of the fact we have not taken a proactive stand in the Darfur situation. I am more ashamed of myself for having done nothing to date.

I am going to take Shahar up on his initiative and sign off every post with a pledge. The thought of generating a lot of noise from the blogosphere is not far fetched.

Moreover, I advise that the genocide in Darfur must be stopped

      

This post was contributed to Degardener by Shahar Even Dar. I strongly encourage you to visit Shahar’s writing here and here (in Hebrew).  Shahar is a long time friend and thinker.

This is the first in a series of posts in which I try to look at the long tail theory from a critical angle and check it limits. It seems nearly impossible to overestimate the impact of Chris Anderson’s long tail theory, and it is surely inadvisable to underestimate it. And yet, one can find examples for both types of wrong reactions. I am not worried, in any sense, about old media corporations trying to dismiss the new reality and I will not shed a tear while watching them drain millions before waking up. It is the over estimators, Chris Anderson naturally being the most prominent one, that worry me.

It seems nearly impossible to overestimate the impact of ’s long tail theory, and it is surely inadvisable to underestimate it. And yet, one can find examples for both types of wrong reactions. I am not worried, in any sense, about old media corporations trying to dismiss the new reality and I will not shed a tear while watching them drain millions before waking up. It is the over estimators, Chris Anderson naturally being the most prominent one, that worry me.The long tail theory was quickly adopted by many people who found it to be the perfect tool for analyzing the new emerging online economy. Those people now tend to look at the long tail as the only possible model for online commerce, and strongly object to any contradicting evidence. In a recent post in Anderson’s blog, for example, he was startled by the claim in a NYT article, that the DVD market is hit-oriented. For Anderson, the mere thought that a niche market does not follow his famous model is a blasphemy. Furthermore, if you are looking at online success, you must think in long tail terms. You either try to become a long tail supplier like amazon or try to carve yourself a respectable niche somewhere along the tail of an existing market by using SEM and SEO. While these two approaches are viable, one should remember that other options still exist.

The most striking example for a success that does not comply with Anderson’s theory is the online T-shirt vendor, Threadless. Threadless, for those who don’t know it yet, is a niche store aimed at T-shirt aficionados. Aspiring designers are invited to submit designs for the open contest (as well as for periodic topical contests), submitted designs are uploaded to the site, to be scored by Threadless registered users. Winning designs are printed in rather low quantities and announced twice per month. Many of the designs get sold out rapidly, leaving users with the option to call for a reprint. In other words, Threadless artificially and on purpose chooses a path which Anderson would regard as crazy; it cuts its own tail. And yet, this is the exact reason for the success story that drives Threadless. This is why there is such a buzz in the blogosphere about Threadless, why people rush to buy the new designs as soon as they get the biweekly newsletter, and why people get emotionally involved with a T-shirt store. Many times artificial scarcity works!

The Threadless success could only happen on the internet, of course, it is based almost only on viral marketing through blog reactions, its customers are T-shirt fans scattered all over the globe, and the online voting process has a major part in creating the customers’ emotional involvement. But all those factors do not make Threadless a long tail company, as I said earlier, quite the opposite is true.

Some people might argue that Threadless simply found a respectable niche within the overall long tail market of T-shirts, in which Gap, for example, is located at the hits end, and Threadless, as well as others is located somewhere along the tail. I beg to differ. Anderson’s model is based on the idea that the availability of information lets each buyer find exactly what he or she was looking for instead of settling for some default hit. Threadless uses the availability of information to create an almost opposite effect, to generate a will for something you did not know you wanted. Instead of relying on infinite shelf space and back catalog, Threadless forces its customers to be aware of the very limited shelf space, and the merely nonexistent back catalog, and manages to do it successfully.

The lesson to be taken from this example is that as powerful as the long tail is, there are still many other paths to success and to exploit the advantages of the online economy, as long as you keep an open mind.

Full disclosure: This post was written while wearing a Threadless “Technology Ruins Nature” shirt.

      

Scott Karp wrote a great post last week about video needing discovery more than distribution. In case you’re lazy, here’s the bottom line:

“Whoever figures out a scalable, networked, distributed, Web 2.0-compliant solution to the online video discovery problem may find themselves in the rare position to compete with Google.”

No more, no less. And I totally agree.

SuTree seems to agree with well. Their video based, end user e-learning service is based on discovery. While many video sharing verticals (Aniboom, 5Min.com) create their own stock and while YouTube and MetaCafe manage huge horizontal repositories, SuTree takes a different approach - it searches, filters and aggregates instructional content from across the big web. This way, they believe, true vertical value can be provided to the user without compromising the content itself.

I tried it and it works.  The results are rich, diversified and fetch content from good sources that I would never have known about otherwise. I ended up discovering not only content but great websites (check out VideoJug). it is clear the SuTree team are onto a good formula and that they build a good blend of technology, editorial work and collaborative filtering. I was very impressed with the depth of content I found. Quite a few categories and subcategories filled with plenty of high quality content. I also liked the “random lesson” which is offered on almost every page an that is very sticky in this case.

It’s not the service is free of flaws. The categories are too “serious” for my taste for example. I would appreciate some lightening up with more fun categories, such that would get me to both explore and contribute more often. I also found the site way too crowded with advertising. Finally, I found the free search very limited at this point. The service needs a lot more time and depth before the “long tail” can be effectively addressed with free search.

in the long run, one is tempted to ask the “why not YouTube?” inevitable question. I am a big believer in verticals and this is no exception. Yes, YouTube can ‘do it tomorrow’ but users will not look to e-learn on YouTube. The bigger challenge would come from the independent e-learning repositories which can expand to search. SuTree may develop a unique position of an ultimate search partner when that happens.

      

I was aware of the fact that ePayments were going through the most significant revolution since the invention of the credit card, but Payoneer managed to blow me away. It’s one thing to solve a real problem. Managing to simultaneously address an array of real problems, on and off the web, is a totally different story. Payoneer mastered a way to put sticking glue on both.

Payoneer’s offering is for businesses, but it is an end user product - a prepaid rechargeable debit card. The card (by MasterCard), is connected to a personal, secure, web based “checking account”. Card holders can use the card on and off the internet, collect and make payments, withdraw cash at ATMs, transfer funds in and out at their will and so forth.

Businesses, on the other hand, can use the cards to avoid the huge headache involved in managing payments. Instead of paper checks, eChecks and wire-transfers, which altogether are complicated to manage, expensive and insufficient, they can opt for a much simpler solution – issue a debit card to each payee and just credit it.

Payoneer offers the solution as a one stop shop, including issuance, management and support and all for a very cost effective price.  The company has announced this week that it has raised $4M led by Greylock Partners. It’s customer and early adopter base already includes names such as MetaCafe, oDesk, ROI Rocket and Plimus. I sat down with Moshe Mor of Greylock Partners and with Yuval Tal of Payoneer for a discussion that turned truly inspiring.

Can you pinpoint your target market?

Tal: “The sweet spot is clearly with web related companies who need to pay both companies and individuals. These companies  can now put together an effective business environment. Managing payments to a global array of individuals is close to impossible. eChecks and direct deposits are not a popular payout method even in the US and then there are all sorts of international banking and currency issues which just kill the whole thing. The result is a market that remains mostly paper based. The web 2.0 economy is dependent on the need to manage payment relationships with people all over the world. Think about paying bloggers for their journalism, for example, or about experts offering their services at expert networks. They all need a pay-out solution as a fundamental component of any business environment. Our customers have a very simple solution – they issue debit cards and then reload it on an ongoing basis without worrying about anything else”

What about the end user?

Tal: “For the individual the situation is even more painful. Take user generated content, for example. Think about what it takes to actually benefit from it as an individual. Cashing international checks is a very complicated matter for many people in many countries. Very few publishers would transfer money to personal bank accounts. This whole situation sets the bar at a point which is not cost effective or time worthy for most people and therefore withholds the huge economic potential”.

So how can another card solve a complicated issue?

Tal: “The card is the best mechanism because it’s simple and universally accepted. MasterCard cards can be used at any store, website or ATM, worldwide. Unlike pure online solutions like PayPal, you don’t need to worry about how to withdraw your earnings. The global economy has created a dire need for fluent payments from US publishers to international contributors, for example, a need that presents a huge and limiting challenge and that is easily addressed by us.”

Mor: “Let’s take a look at the big picture for a minute. The web economy started mostly as a one-directional payment flow; people paying for stuff they buy online. Over the last few years, the web economy has developed to encompass many more payment flows: people paying people (which gave rise to PayPal), people getting paid for directing traffic to web sites (affiliate networks) and more recently, for generating content. While the pay-in flow has been around for a years and therefore has been addressed by multiple solutions, the pay-out flow hasn’t. The globalization of the web added a layer of complexity that required innovative solutions like prepaid cards. So we have an underserved and a growing need”

How can you compete with better established solutions like PayPal?

Tal: “I get this question a lot but you need to understand that Payoneer does not compete with PayPal. It is the credit card companies’ strategic interest to establish position in the pay-out market and they do it with partners like us. PayPal is a great solution but it is also limited. It is much more dominant in the US domestic market and with US bank account holders. You can’t use your PayPal account to get an ATM in India, for example, but you can easily use your MasterCard card and get an ATM card there. Our solution is good for individuals that are practically “unbanked” and for people who prefer not to use their day to day back account to get paid”

This seems like an opportunity for new entrants. What is Payoneer’s secret sauce?

Mor: “Payoneer is coming into this opportunity with what we believe is the first easy-to-use and comprehensive solution. I believe that the main barrier to entry is credibility and domain expertise. Very few teams have the breadth of experience that this unique space requires. It took Payoneer almost two years to develop a platform that can provide a reliable and credible solution and they started with a team that already knew what they were doing! “

Tal: “We needed to rally a major bank behind us, then get through MasterCard and this is before addressing any “regular” start up issues. Both needed to feel very comfortable with our ability to manage this type of operation. Our deep experience with online banking was necessary just to get started. This isn’t a space you simply walk into”

What is your longer term vision?

Tal: “I believe the real benefit businesses begin to realize is the upgraded relationship they will have built with their users. An ongoing billing relationship with an individual is a very meaningful asset. It means your customer carriers your logo in her pocket, literally and metaphorically. It means your customer pay regular visits to your website. Transforming any engagement to a sustainable billing relationship carries much deeper potential for brand attachment and for additional business.

Evidence shows that people tend to spend on the web what they earn from the web. This sets the stage for much bigger economics and our customers already begin to realize that. Check out Plimus, for example. A market place for user generated software that has integrated our solution. A classic example of a web 2.0 service provider that gets it” 

Look, this market will clearly happen, the only question is whether it’s going to be us that get to lead it”

I remembered it was not too long ago that PayPal was a young, promising start up too. I have a strong feeling I will sit back and reflect on this post in a few years when Payoneer will long be a household name.

      

We all know this problem. How can we get our hands around the research that is relevant to our business? Research tracking has become impossible, particularly in an Internet start-up where the full time job is already filled with several full time tasks.

Danny Cohen of Gemini decided to grab one bull by the horn. He opened a research library that covers web 2.0 and Venture Capital. In the process he has also spun his eSnips account very cunningly, showing that the potential for sharing is basically infinite given the right environment. The folder can be reached here:

I personally plan to use it.

      

GigaOM reports that Symbian is about to announce a significant upgrade to its operating system on Monday at CTIA. According to ABI Research, Symbian held a commanding 73% market share of the loosely defined Smart-phone market in 2006, resulting in about 50 Million shipments. 

Improvements include battery and memory management, camera and multimedia enhancements and the introduction of transparent and automatic roaming between WiFi and 3G. MobHappy brings the full details.

The upgrade is very significant for a number of reasons. Symbian is reaching out of the Smartphone niche. The multimedia boost, for example, is clearly a consumer focus. Push email and Voip are communication apps and not “business apps” anymore. Symbian is slowly but surely building an attractive and real consumer position, realizing that the higher end market would pay a little more for high quality feature phone.

The introduction of transparent WiFi - 3G roaming is even more significant. While full handset OEM support is needed, this has the potential of making operator independent mobile internet actually usable. Very few users actually bother with switching networks on an ongoing basis. Making the switch automatic would not only reduce costs for the end user, it would also break a wide open hole in the walled garden. And this does not only apply to browsing but to the very core - phone calls. Now, I don’t see Mobile VOIP going mainstream very soon, but I definitely see a gradual uptake, mostly by the cream of the crop from an operator point of view - the travelling professionals.  

How will Operators deal with this? Good question. So far everybody’s happy with the containment of Symbian devices as “Smartphones”. It makes it easy for everyone to avoid a clash. Some operators force vendors to take off the WiFi feature for now (Cingular and Nokia E62 for example). Some put a more constructive focus on upgrading their 3G networks. In any case, it’s all a prelude to the unavoidable reshuffle of the mobile universe.

      

PayPal is about to make a strategic entry into mobile web with the launch of Mobile Checkout, a mobile service that will allow anyone with a PayPal account to buy things using their mobile browsers. 

Rumors have been flying around as PayPal apparently has been diligently working on the product for quite some time. In fact, I wouldn’t rule out an announcement next week at CTIA. The product is in beta right now and is planned for release later this year. Once out, PayPal Mobile Checkout will allow people to buy stuff they’re searching for on their mobile phones.

We could not get an official comment from PayPal of course, but a credible and passionate inside source has indeed verified the rumor and was kind enough the leak the following screen shot:

The payment process is the same as PayPal online – you enter your PayPal user name and password. Along the way you can create a pin so that future transactions are much faster. You don’t have to fill out a long web form of addresses and credit card numbers – which is unsafe and a pain on a mobile phone.

The mobile web has been yearning for payment solutions for a while now. Premium SMS is commonly used for mobile payments but mostly for single, micro transactions such as voting, media and alerts. While premium SMS is very intuitive, it is not trouble free. Mobile operators grab roughly 50% of the revenue and there have been quite a few reliability issues. The opportunity for real ”Mobile Payments 2.0″ is definitely there.

PayPal announced last week that it has reached 35 Million subscribers in Europe and about 150 Million subscribers worldwide. It was only expected that the successful web giants would start porting their services to the mobile space and PayPal is apparently the first significant player about to make an entry.

      

I have Joost on my computer and it’s practically a new world wonder. Finally, a TV app that looks great and works even better. The user experience is absolutely flawless - sexy, simple, cool. It blends the benefits of TV and Computer interaction very well and the quality of the video itself is the best I have seen. Even the inserted ads don’t look intrusive, perhaps because we are all so used to ad-raping by network TV by now. These folks are doing something right. 

But will it succeed? I see one, huge, problem. It can’t be used at work! And what is the only place left without TV access? That’s right. Work!

Let’s take a look at the successful viral apps of the last decade - Instant Messaging, P2P File Sharing, Skype, Blogging. All have one great thing in common - we can safely use them at work. I am not referring to IT security because most of us couldn’t care less about IT security. I am referring to job security. The ability to play hookie without getting caught. IM and Kazaa could simply run in the background and consume very sporadic attention. You can download a file and write a post without drawing the attention of your roommates, or worse, of your boss. And you can minimize all in a split second if someone walks behind your back.

Can you do that with Joost? Nope. TV is TV. It takes up your attention and it’s intrusive to the environment. Wearing headphones is possible in some places, but then the detachment from the environment is so complete one cannot really sit back and enjoy without keeping an eye on the door. This practically means Joost will hardly be used at work but at home. Except that at home we have a great alternative already - a 30+ inch TV with gazillions of channels.

Which means the premier target audience, for now at least, are kids playing in their room behind closed doors, assuming they have attention span left to squeeze between MySpace, TV and PlayStation. While I don’t underestimate the huge potential of that target audience, I don’t think it’s up to par with the wide audience and virgin attention span IM, Kazaa or Skype enjoyed.

Then again, Joost has all the right ingredients. P2P technology is definitely mature enough for Video on Demand. You couldn’t ask for better founders - both in terms of technology and of marketing. We are all really, really tired of outdated TV content distribution models and Joost will have no trouble at all getting a first time look by any reasonable user.

They should be smart enough to have a plan for that problem too. I am just curious to see what that is.

      

Jerking off.

What exactly is the deal with the “Are We in a Bubble” symposium? Is there a point to this conversation?

What started with a soft spoken debate seems to be going religious. It’s not enough to have just a point of view anymore, you need to subscribe to a camp.  You either think we are about to burst, or the exact opposite.

It’s not that I don’t have my own point of view, of course. Personally, I think some portions of the tech market are somewhat inflated with gold diggers. I see investments in “over valued” start-ups (can someone explain what “over valued” means exactly? over valued compared to what? to the personal taste of the critique?). I see a lot of activity in what seems to be over saturated niches and in technology that will not mature so fast. Most importantly, I see a lot of desire for short term short cuts.

On the other hand, I see so much exciting stuff out there. So many bright, thinking entrepreneurs and so much venture capital - 2 sides that still, for the most part, simply fail to meet. I see so much need for better communications, information management, medical solutions and programs, fun and entertainment, recreation, financial and equity management, personal accomplishment and so much more.  

The debate is not about a bubble but about the road to success - it’s length, it’s mapping, it’s challenges. Long distance runners don’t see a bubble and don’t care for the debate. The term “Bubble” is abusive because it overshadows the industry instead of referring to what it should refer to - the potential for short term speculations.

While this debate is important, it is secondary to the whole scene.

      

After I got busy trashing Google Apps, I finally received a human support callback today (thanks Sonya!). We managed to fix the CNAME and MX issues, got it up and running and ladies and gents, it Rocks!

I still think this whole domain administration challenge is an absurd, but the result is rewarding:

1. Straight forward company Intranet.

2. We are all on the same calendar,  each one of us not compromising access to the personal one as well.

3. Our docs and spreadsheets are aggregated.

4. VERY easy administration.

5. We already know how to use it from our previous experience with Google.

While clearly not an enterprise solution (and not even a medium size business solution) Google Apps is an excellent solution for the Internet Savvy / SoHo.

      

I may be just a tad over my head here, but Mark Cuban is taking a problematic stand in the Viacon - GooTube charade.

In my previous post I wondered about the sense behind this suing. It didn’t take a prophet to predict high satisfaction from the Mark Cuban front and the prophecy indeed came true.

In his You Go Viacom! post Mark Cuban praises the old litigators. That’s no surprise. His criticism of Google’s self righteous de facto piracy has very often gained my sympathy as well.  

What I didn’t appreciate is the patronizing rational this time:

it never ceases to amaze and amuse me how little understanding of the content business, or the business world in general that many in the blogosphere have.

Let me provide a simple scenario for you.

HBO. HBO charges a monthly fee to subscribers. If someone can watch an HBO show on Google Video or Youtube, even if its divided into 1,3 or 6 parts and re assembled into a playlist, they have far less incentive to subscribe or retain their subscription(s).

HBO in turn, syndicates those shows to cable networks. As an example, A&E paid a reported $2.2 million dollars PER EPISODE of the Sopranos. If the content is available online, do you think maybe it might reduce the value to A&E and HBO of the Sopranos ? And that’s before we even get to overseas syndication. Youtube and Google Video have a great deal of popularity overseas because in many cases US shows are not as readily available. Online international viewing reduces the international revenue opportunity.

Then of course there are DVD sales. YouTube downloads every video right to your PC. Google Video not only downloads to your PC, it provides the option to convert it into a PDA format including the iPod.

So tell me why it makes good business sense for HBO to let users post the content they sell for a ton of money ?

Now some of those who are so self absorbed in net culture and have no idea how the real world works might think that all of this leads to more viewing and consumption. Maybe it does. Maybe for some shows, like those on broadcast TV, it really does help to have as much promotional video for the show, even to the point of full episodes available both on YouTube and Google Video. There are definitely situations where it could help a show gain viewers and increased sales of DVDs. All of which has nothing to do with whether Viacom or any content provider should let users upload video.

I have a secret for you. ITS EASY FOR END USERS TO UPLOAD video to Youtube and Google Videos. ITS EASIER FOR THE CONTENT OWNER to do the same thing.

Hold it Mr. Cuban! You maybe smart but we aren’t all stupid. I first intended to re-battle the argument (posted a comment), then I saw a much better comment than mine, one that I agree with 100% and that is worth sharing in whole:

Mark, I think you’re a smart guy but I think on this issue your are myopic. Everyone who doesn’t have their head jammed up their portfolio doesn’t care. This is purely an issue for people who are already rich who want to exploit their IP to become richer. Real artists are happy when people see their art.

If you make money on a business model which relies upon withholding your content from the masses your model is over. Maybe there is money to be made by fighting content-sharing for another decade (maybe a lot). In the long run the more you get your content out the better. There are a lot of people out there who can get it for free who will pay for it especially when they know the companies they are dealing with are not the corporate equivalent of retarded whores. I honestly think people should go out of their way to download corporate music rather than buy it because the RIAA is such a dastardly organization.

…

Peace and keep posting
Roland

Loved to have said it that well myself.

      

For those of you who missed the Viacom vs. Google suit

1. How did you come with $1 Billion? Is it the highest number you could think of? A random exponent of 10? And why such a neat number? why not $3.141 Billion? or $2.71 Billion? or simply $GOOGOL?

2. Do you realize what kind of damage this may cause to the MTV brand among young people who actually love music?

3. Are you going to sue gazillion of video sharing sites? Go back to film? Stop technology?

4. How many start-ups have just lost their funding because of this lawsuit?

5. How many artists can be funded by the fees of your legal team alone?

6. What is the magic number for settlement out of court?

7. Is Mark Cuban happy? [Apparently yes!]

I’d like to quote Om Malik on this:

I have argued in response to that comment that Viacom Inc. could have done something about this a long time ago, but didn’t and basically are using this lawsuit to paper over their own incompetence.

Here is proof: Viacom’s MTV vs YouTube traffic and visitor comparisons. See for yourself, who really missed the boat here! (Data Source: Compete.com) So why sue now? My guess is that they have been reading Google’s SEC filings and trying to figure out how to get some of those billions sitting in the bank! 

Do us a favor guys, stop listening to your lawyers, solve it some other way for all of our sake.

      

The devils greatest trick was convincing man that he didn’t exist, Baudelaire

Our informal corporate motto is “Don’t be evil.” Google Code of Conduct

It’s been a week since I tried moving my company to Google Apps.

(1) My domain has yet to be verified.

(2) My Partner still has no access to his old calendar.

(3) My support call has yet to receive a human or a relevant response.

I did get an automated response though, a totally useless one that copied text from the website, text I was intelligent enough to read in the first place.

Hello Google Support!! Anybody Home??

      

“Laugh and the world laughs with you. Take out the garbage, and you walk alone”
- The Wizard

What a feeling it is to bump into a new blog that really really stands out. Anil Dash (one of the smartest bloggers at own merit) points out Ask the Wizard with the following recommendation:

Ask the Wizard, written by Feedburner CEO Dick Costolo is, flat out, the best new blog of 2007. The thing I love about great writing is it makes the pervasive truths seem self-evident and even obvious. Plus it’s actually funny, not another tech exec wearing a goofy tie and claiming to be full of ha-ha.

I tried and I so totally agree. Furthermore, if you’re in the start-up scene you MUST add this blog to the top of your RSS reader. Attacking Dominant Market Shares, Strategic Advantage Part I, Quantum Hidden Barriers to Entry, Company Culture and the Non Profit Hard Parts provide real insight.

      

Yaron Orenstein is the editor of the blog the.co.ils. Yaron is organizing an Internet event called TWS2007, with the pure purpose of bringing entrepreneurs with great ideas and investors (VCs and angles) together.

The goal is to Identify and present up to 10 small startups with great technology and strong teams. In addition, it’s an informal networking environment - a “pro bono” event with the sole purpose of promoting the Dot.Com industry in Israel.

All necessary information is given on the TWS2007. The event’s organizers have also launched a group in Linkedin, which aims to gather all Israeli enthusiastic Internet people under one roof.

I’m going, hope to see you there!

      

My Buddy Danny Cohen read my Rock Band post and gave me a big compliment by battling back. In his post, Danny highlights an interesting similarity in the area of naming. On the other hand he dismisses the more fundamental point I was trying to make, saying that Rock bands don’t live in the world of “Barriers to Entry” or “Unfair advantage”, and most of them don’t “Fulfill a need”.

This is probably my own subjective point of view, but I argue that rock bands face these exact issues!

Let’s start with barriers to entry. I’ve heard more stories about the long, painful and ugly journeys of rock stars than I have of startupists. Artists, unlike high tech professionals, do not have a decent fallback. Many, Most(!) go through waiting tables and living in misery for long years before they get discovered. If they ever get discovered. After all, do we realize how difficult it is to make a national radio play list? MTV? Billboard  Charts? The journey from a local basement in Cleveland to Madison Square Garden is definitely not shorter or easier than the one from seed investment to millions of daily page views.

Moving on to unfair advantage. If you’re a new-be singer with your own unique style, for example, Britney Spears, Byonce and Madonna can copy you in a split second and use their well oiled machine to produce and distribute. All it takes is a decision. As a matter of fact I would argue that Madonna made a career out of “scout and copy” techniques, but that would be a different discussion. When environments are so educated and so competitive, every trick is easily copied and the incumbents have a huge advantage. In that respect a Google / YouTube and Sequoia are not different than Guns n’ Roses and Geffen. 

Finally, we get to fulfilling a need. I always considered this term to be slightly abused. Unfortunately it’s very hard to rationalize the exact solution to an exact need because needs have powerful intangible ingredients. Take a look at YouTube for example. What need does it answer exactly? Is it something rational, like free storage or free bandwidth? Or perhaps something much more emotional, such as discovery, creativity or personal recognition?

All these factors didn’t deter Gemini from investing in an interesting company like eSnips and for the right reason. I’m sure there are always rational reasons, but there is one force that is much stronger than everything - the need to regenerate. We love new rock bands and we love new start ups. VCs, like Record labels share a common target - finding the new stars and helping them materialize. That requires predictive judgment and gambling on the right, that’s right, superstars.

      

I was really excited when Google announced the rebirth of Apps. My expectations were high due to two main reasons. First of all, it takes a mega brand to do mass market education. I love Zoho, Clarizen and 37Signals, but they are not big enough to drive non-high tech SMEs to the web in masses. Perhaps more importantly, Google have so far managed to apply a “creative chef touch” to online office. GMail, Google Talk, Google Spreadsheets, Google Docs have all displayed freshness that kept the good essence of MS office but went beyond just mimicking; They managed to capture the value of the web over desktop - simplicity, easy collaboration and pure web elements such as free, advertising and blogging.

Then something happened. I really needed a solution for my company. A Solution for simple task and project management and for document sharing. Something not too expensive. Naturally I went online and started with Google Apps. I sadly found out that not only is Google Apps just a new marketing wrap for old stuff, it also has major flaws.

First of all, you need to manipulate your domain DNS to get started. Repeat, manipulate your DNS - CNAME, MX record and other Latin names. Why? Why do I need to touch the CNAME in order to start doing online task management on my domain? Can’t you verify my identity in some other way? It took me an hour just to figure out what to do (and I used to work at this!). Oh, one more little details, it takes about 48 hours for DNS changes to populate the Internet, which means I am still waiting for a verification in order to get started. Hard work and a 48 hour wait! What a contradiction to the whole concept! Do you seriously expect businesses to migrate this way?

During the process something “funny” happened. My partner’s Google calendar (which was registered to his work address, the one I was trying to activate) was deactivated. deactivated! He didn’t understand why he lost access to his calendar all of a sudden. I had to unregister his user at my still not working Google Apps suite. Luckily his calendar ”returned” after about an hour.

I put a stop to it right there. This was clearly half baked. All I needed was effective task management for 15 people in the first place. I checked out Zoho Projects, which seemed like a great web application but an overkill for simple task management. I finally landed on 37Singal’s Basecamp and got started. What a relief! Simple, easy to get started, works. it took me 15 minutes to get started. My colleagues got the hang of it in less than 10 more. 

I’m going to stay off Google office for a while. Let me know when it’s usable.

      

I was a junior at Forest Hills High School when Guns N Roses released Appetite for Destruction. About 6 months later, Sweet Child O’ Mine hit the radio waves and I was hooked. Back then, as a Metal-head wannabe, I could not afford to admit to liking them without risking outcasting. After all, the proper namedropping included icons such as Metallica (Oey Vey) and Ozzy Osbourne (have mercy). Still, these new guys with this new sound were so charismatic I just had to buy the album. Less than a year later GnR were packing stadiums all over the world and got classified as Bon Jovi’s angry rival. It seemed like a pretty comfortable position to be at and the release of the half baked, mediocre 8 track GnR Lies reinforced that impression. I almost lost interest, but then, three years later, came Use Your illusion I and II and instantly blew me away. Wow! what a masterpiece! It was evident Guns weren’t just a successful rock band, but much more - real superstars, the stuff legends are made off.

I could go on forever about Guns and Roses. To me, they were the best of their era and in many ways still are. If you happen to disagree, just listen once more time to Axl’s unique style in Sweet Child, or to the back to back solos by Slash in November Rain. As a matter of fact, GooTube, sit back and rejoice.

Guns were not a VC production. Slash and Axl had their own bands prior to being hooked up by a mutual agent. They have toured (and trashed) L.A. bars with very little success before Tom Zutaut of Geffen Records signed them to a $75,000 record deal. I am not familiar with Mr. Zutaut, of course, but I doubt he had Axl pitch his go to market plan or Slash prove Guns could out duel Bon Jovi. I don’t think it’s was the resumes that did it either. Axl was 21, Slash was 17, neither of them has done much before to show for. And to top it all, they were a risky play in a risky market. You would agree that a rock-punk-blues-trash band with two savage, ego-maniacs filled with testosterone is not the safest bet on earth. How could that compete with Metallica’s genuine fan base or with Jon Bon Jovi’s million dollar smile?

So why did Geffen sign Guns? Very simple, really. Their outstanding star quality was so obvious it was a crime not to. They were passionate, talented, charismatic, with outstanding presence. They refused to play the game; they drank and smoked in their video clips and they ended concerts prematurely when they didn’t appreciate the crowd. They insisted on (and got) absolute creative freedom, a prerogative which they exploited to the full extent and which resulted with 200 full house concerts and over 70 million albums sold. Oh yeah, Guns were a great exit for Geffen. They were the YouTube comparable.

Start ups and rock bands are more similar than different. While not everyone is Guns and Roses (or YouTube), startupists are star hopefuls hopping between auditions looking to get discovered. There is no recipe that defines a star, you either have it or you don’t, but this doesn’t mean it’s easy to get discovered. You need to be in front of the right people, at the right place and at the right time. You need to work extremely hard, be extremely motivated, be very talented and have quite a bit of luck. You need to rally the crowd behind you - be it A&R execs or investors, fans or users, Rolling Stone or TechCrunch. You need to be true to your own faith and desire but be extremely open to your environment. You need to be ready to perform in front of an empty bar when needed and not give up, but you also need to know when it’s time to sign a talent deal.

Start ups are not about presenting a plan, they are about star quality. You can’t expect to spell out where you want to be in five years and why you will be the one getting there. And if, as a startupist, you feel like you are being overly pushed in that direction, just move over to the next scout. Don’t practice the ”pitching to VCs 101″ manual because it’s useless, it won’t help you. The investors don’t believe in that manual either.  

At a certain point, if you have that star quality, the right scout will come along and recognize it, pick you up and hand you the opportunity. While good scouts are as scarce as stars, once in while they all get aligned.

      

The NBA and YouTube announced a deal today, finally making a significant step towards real collaboration between a blockbuster brand and a user generated community.

David Stern gets it. Mixing original content with the pile of semi-legit content will improve the overall result and exposure. And yes, it will push the NBA brand to new markets and demographics it has yet to conquer.

According to the reports, NBA original clips will be aggregated under a dedicated YouTube NBA channel (Pete Cashmore reports about the details). Frankly, I am not going to watch any pre-edited channel, I have other websites and TV channels for that. To me, the most important thing is to find NBA clips will within search results.

Way to go. I wonder what Mark Cuban has to say.

Oh, and is there any chance EUFA will follow? Yeah right…

      

I am an amateur blogger. I don’t play with SEO tips and tricks, I don’t push my friends to blogroll me, I don’t tail Techcrunch fresh releases for trackbacks. Heck, I never even brushed elbows with Mike Arrington or with Guy Kawasaki!

Sometimes I Digg my own posts. I have also sent a few promotional emails in the past to my own email distribution list, but that’s about it. In short, I am the little guy, sitting comfortably somewhere in the middle of the system. 

This doesn’t mean I am not ambitious though. Last week I conducted an experiment. It’s time to share the results.

On Wednesday we hosted Francois Depayras’ Vista Dolorosa at Degardener, (his second post, hopefully of many more to come).  Since the post was Digg worthy, I dugg it. I then sent an email to 50 of my closest friends asking them to Digg as well.

The results?

24 of my original recipients Dugg. This generated 17 additional Diggs (and 8 comments) from people I don’t know, all in all stopping at 41 Diggs (you are most welcome, by the way, to continue Digging) 

For a while, I was a bit disappointed but then I started seeing the stats. My Google Analytics started climbing rapidly and the number of additional views was totally disproportional to the number of Diggs. At the end of the day, the post generated 500 additional unique viewers and over a 1,000 additional page views! We crossed 1,000 unique viewers and 2,000 page views for the first time in Degardener’s short, one year history. And most importantly - 75 more people subscribed to our RSS feed!

In short, 41 Diggs nearly doubled the daily traffic, each Digg yielding a 20x traffic factor and 2x subscription factor, give or take.  

Degardener is almost a year old now. Traffic has been climbing steadily, and while we do not have gazillions of readers, the few hundreds that do read seem pretty loyal. This is a VERY rewarding feeling.

One email generated 75 more regular readers resulting from a page 3 appearance on Digg. 

While not overwhelming, Digg is certainly friendly to the little guy!