A VC

Streaming Kills Piracy

Yesterday morning I was talking to my 13 year old son Josh. He's currently obsessed with the TV show Friday Night Lights. He's going back and watching all the old seasons. I asked him how he is doing that, expecting to hear "bit torrent". But instead he said "Netflix Watch Instantly". I was so happy to hear that and asked him why. He said, "bit torrent takes too long."

And then this morning, I came across this story in The Guardian which talks about a collapse in illegal sharing and a commensurate increase in legal streaming. The story says 26% of 14 to 18 year olds shared music illegally last month compared to 42% in December of 2007. The story also says 65% of teens stream music regularly.

I've been talking about this trend for a long time. In my post about The Free Music Business a couple summers ago, I said this about file-based music versus streamed music:

I am not a fan of file-based media business models. They lead to piracy and they put transactional friction into a system that doesn't require it. Streaming is much better. Unfortunately, we don't have a good mobile broadband system to make streaming possible everywhere. And until that happens, we will have files and we will have piracy.

But the good news is that as the media business wakes up and puts all the media we want out there in streams available on the Internet (paid or free - this is not about free), we see people streaming more and stealing less.

We used to wonder if we could "untrain" a generation to steal. The answer is yes. Just make it easier to get the content they want and they'll stop stealing. It makes my day to read that.

Comments (View) | Posted July 13, 2009 in Web/Tech

Spying On Myself (continued)

I wrote a post about this topic back in early 2006 and have returned to it a few times since. There was a short burst of startup activity in this area back in 2006. It was dubbed the "myware" sector, a reaction to the spyware era of the early part of this decade. But it did not get any legs and most of the people working in the sector have moved on.

But I have not. I still spy on myself and publish my activities publicly where the tools exist to do that.

Here's a page that shows what music I've been listening to recently.

Here's a page that shows what I've been watching on TV lately.

And there's a blogrollr widget on the right sidebar of this web page that shows what blogs I've been reading lately.

I do this for a bunch of reasons. First and foremost, I am interested in this sector of implicit behavior data. I believe that publishing the things I do on the web will allow web services to get smarter about me and give me better experiences. And most of all, I want to control this data set.

There are so many web services out there, from Google on down, that have some or all of this kind of data about me already. The idea that we are going to surf the Internet privately is a non-starter in my mind. But we should own this data, we should be able to edit it, we should be able to determine who gets access to it and why.

Here's a small but enlightening example. Yesterday, I left my iPod playing overnight. When I sync'd my iPod this morning, all those tracks were scrobbled to last.fm. I simply went to last.fm and deleted them like this:

delete lastfm.egg on Aviary.

Blogrollr, the tool I use to record all the blogs I read takes it one step further and allows me to blacklist entire domains.

Of course, there is the potential for embarrassment in doing this. When I was doing some work on Gawker for a post I wrote a few weeks back. I thought I had blacklisted the fleshbot domain, but only blacklisted the straight version of the domain. That led to an amusing email with a regular reader.

I believe there are many ways to protect users from these kinds of embarassing situations. First and foremost, most people won't want to publish what they do on the Internet like I do. Some will but most won't. But they will want to see the activity themselves, edit it, protect it, and be able to share those feeds with web services that can give them better services as a result.

Imagine if you had a single data feed, fredsactivity.xml, that was hosted on the web and you could share with web services. I'd give it to Amazon to get better recommendations. I'd give it to Google Reader to find interesting blogs to read. I'd give it to Twitter to get better recommendations for people to follow. I'd give it to Netflix and Fandango to get better movie recommendations. I've give it to Goolge to get better search results.

I still believe this is going to happen. The burst of activity a few years ago may have stalled out, but I think that's a temporary pause, driven largely by the fact that the mainstream Internet user wasn't ready for this. Maybe they still aren't. But I am. I expect that a few of you out there are as well.

Comments (View) | Posted July 12, 2009 in Venture Capital and Technology

The Fine Line Between Informing and Spamming Your Followers

As of this morning, I've got 27,162 followers on Twitter. I've developed this following the hard way, slow and steady growth for 2 1/2 years. I'll be the first to admit that being an investor in and a board member of Twitter has helped. But I've not wanted to be on the Suggested User List and I am not. The people who follow me on Twitter have chosen to follow me for a reason and I try hard to post things that they'll find interesting.

My rule for Twitter is "four to six a day or you'll send your followers away". According to TweetStats, I post an average of 6.3 tweets per day. So I occasionally break my own rule, but I do edit myself on Twitter.

Yesterday, two things happened to me that got me thinking about this tension between informing and spamming. The first is my friend Seth Goldstein asked me to check out his company's new Twitter advertising system called Twitter Sparq. I went there, created an identical ad to the one I run for this blog in AdWords and submitted it. Somewhere in that work flow, I generated a tweet to all my followers that said:

I didn't even know about the auto tweet until a few friends/followers emailed me and DM'd me about it. They all thought it was an unusual looking tweet coming from me. One follower asked:

To which I replied:

I also informed Seth and he promised to look into the workflow to make sure that doesn't happen to others.

The second thing that happened yesterday is I played around with the Hype Machine's new Twitter playlist. I gotta tell you that this is the coolest new web music thing that I have seen in a long time. Last night at a dinner party, I just put this list on the home stereo and we got great music all night from it.

Anthony, the founder of the Hype Machine, published the algorithm that drives this list on the Hype Machine blog and it's a fascinating read.

Basically, the Hype Machine looks at all twitter links to Hype Machine and counts all those links as votes. But the votes are weighted by this formula:

Well it turns out that I weight really heavily on this formula. Because of my follower count and following ratio, I generate 515 points every time I tweet a song from Hype Machine.

I did that once this week, the new single from the Arctic Monkeys, Crying Lightning. It's a fantastic song that I like more and more every time I listen to it.

Since then, I've been asked by a few artists and fans to tweet out some other tracks. I've been hesitant to do that. I don't want to spam my followers with tons of Hype Machine links. I am trying to figure out exactly how I should play this game. And that's the cool thing about the Hype Machine Twitter playlist, it has game dynamics in it. I like that.

All games built on Twitter, like Spymaster, include spamming your followers as a key component. I'm not comfortable abusing the trust of the 27k people who clicked that follow button by unleashing a ton of music links at them, even if I do really like the songs.

So I am working through this tension between informing and spamming. I thought I had it figured out pretty well but now as new services pop up that include the social (and viral) element of spamming your followers, I am facing some new questions. I think all of us who use Twitter regularly are going to face those questions, or are facing them, and the way we all work through them will be important to the value we get out of Twitter going forward.

Comments (View) | Posted July 11, 2009 in Venture Capital and Technology

Does This Blog Get More Traffic From Google or Twitter?

I made the assertion last evening in Seattle that this blog gets more traffic from Twitter than Google. Mike Arrington called bullshit on that statement. The interchange is about 1:50 mins into this video:

Fred Wilson at Naked Truth Seattle 2009 from Jason Preston on Vimeo.

Thanks to Jason Preston for capturing and uploading it and sending me a link to the video. The transcription (courtesy of Simulscribe video transcriptions) is here.

I offered to share my refer logs with Mike and I might as well share them with all of you as well.

These are AVC's refer logs for the past 30 days. It says clearly that Google drives more traffic than Twitter (14.8% to 8.2%). However, some percentage of the direct (direct + avc.blogs.com) visits are coming from third party twitter clients and URL shorteners like bit.ly.

To demonstrate this, here are the refer logs from the same 30 day period one year ago.

Last year, this blog ran at avc.blogs.com and there was no avc.com, so the direct traffic was 22%. Now it is 39%. Some of that increase is simply more people typing in avc.com into their browser. But certainly some of it is traffic coming from third party twitter clients and URL shorteners.

If just 7% of the 17% increase in direct traffic is a result of twitter links that are not being counted as twitter, then it is true that this blog gets more traffic from twitter than google.

I wish I could be more scientific about this. Maybe the bit.ly guys can help. My assertion last night was based on data plus gut instinct. That's not going to be enough to satisfy Arrington I'm afraid.

Comments (View) | Posted July 10, 2009 in Weblogs

Startup Hotbed Inferiority Complex

I spent this week in the startup hotbeds of San Francisco and Seattle. Last night, I participated in a fun event called Naked Truth put together by leading Seattle entrepreneurs.

It was a wide ranging conversation about Internet business models and how to make money on the Net.

But at the end of the night, the 'silicon valley' question came out. A participant in the audience wanted to know if it was crazy not to do his startup in Silicon Valley. This is what I call the startup hotbed insecurity complex. Deep down inside, every entrepreneur working outside of the bay area worries that they are not as competitive and will not be as successful because they are not in Silicon Valley.

Many of the panelists had flown up from the bay area and pointed out how most of the important tech companies have come out of the bay area. Mike Arrington suggested the question wasn't even worth the time we were spending on it.

To which I responded that the idea that you cannot build an important tech company outside of Silicon Valley is 'a crock of shit'. Somehow that line was tweeted numerous times as 'silicon valley is a crock of shit' which I found humorous.

Let's look at the facts. Seattle has produced Microsoft and Amazon. Boston has produced DEC and Lotus. Austin produced Dell. NYC produced Bloomberg and Doubleclick. Europe has produced SAP and Skype. I'm doing this at 5am on my blackberry on the redeye because I can't sleep so my examples are what I can muster at this moment. I could do better with a clear head and an Internet connection.

But the point is this. Not every great tech company comes out of Silicon Valley and you don't have to be there to be a successful entrepreneur. For all the benefits of Silicon Valley, like density of great engineers and VCs, you have negatives like hypercompetition for talent and the creative cost of living in an echo chamber.

Tim O'Reilly sent me a comment via twitter on my most recent freemium post. He said he likes the perl motto "TMTOWTDI" which means "there's more than one way to do it"

When asked to summarize my thoughts on business models at the end of last night's panel, I said "there's more than one way to do it"

And the same is true of locating your startup. You can build a great startup in any of the dozen to two dozen startup hotbeds around the world. Pick a place you want to live and work and possibly raise a family. And then get busy.

Comments (View) | Posted July 10, 2009 in Venture Capital and Technology