Musings of a VC in NYC

What Else Are You Interested In?

Our portfolio company, TACODA, is the leader in behavioral targeting. They are working with publishers all over the Internet.  They identify what users are interested in using a "data tag" on the publisher's page and then use that data to serve advertising that is more relevant to the user's interests.

It's a win/win/win situation. The publisher gets more revenue per page because the ads are more targeted. The advertiser gets better performing advertising campaigns. And users see ads that they are interested in.

I have been running the TACODA data tag on this blog for several months and I got some interesting data this past weekend that I'd like to share with all of you.  TACODA counted about 50,000 unique visitors to this blog in April.

And these are the interest areas that you all demonstrated as you surfed the web when you weren't on this blog.  If I was running TACODA's Audience Network on this blog, TACODA would use this data to serve up more relevant advertising to you.

How Not To Be Abundant

Build an online community that requires you to be invited to join.

The community is called aSmallWorld.net.

I suspect that the community is aptly named.

While I am the subject of my Abundance post, I would like to thank two bloggers whose work over the past couple years inspired that post, Umair Haque and Mike Masnick.  Thanks guys.

MP3 of the Week

I don't consider myself someone who listens to what is popular in music.

But right now, my "in heavy rotation" includes four of Amazon's top ten records;

Stadium Arcadium - Red Hot Chili Peppers
We Shall Overcome - Bruce Springsteen
Living With War - Neil Young
Broken Boy Soldiers - The Raconteurs

And I suspect I should put the Mark Knopfler/Emmylou Harris record which is also in the top 10 into heavy rotation.  Both Jackson and Jay have told me its excellent. I've listened to this record a couple times on Rhapsody and I have to agree with Jackson and Jay.  It is excellent.

Here is the title track, All The Roadrunning.

All The Roadrunning

If you like what you hear, I suggest you go buy the record.

Nascar Nation

  The Main Event 
  Originally uploaded by fredwilson.

We took the family to Charlotte, North Carolina, to Lowe's Speedway to watch the Nextel All Star Challenge.

It was a blast, we saw a bunch of races, including the kids favorite, the "wreck race", ate a bunch of great tailgate food, saw the Chili Peppers play twice, and immeresed ourselves in Nascar.

Josh and I are hooked. We are going back.  The girls are glad they went but aren't so sure about next time.

If you haven't been to Nascar, I recommend you try it.  It's a lot of fun.

Friday Night Sound Check

  Sound Check - Friday Night 
  Originally uploaded by fredwilson.

We stayed up late last night to catch the Chili Peppers do a sound check for their show tonite in between the first and second race at the Nextel All Star Nascar race.

They sounded great.

Looking forward to tonite.

Abundance

In the physical world scarcity is what leads to value.

In the digital world abundance is what leads to value.

There is no such thing as scarcity in digital goods. They can be replicated instantly and as many times as you want without losing quality.

This has led many who grew up in the world where scarcity was the measure of value to conclude that digitatization equals value deflation.

But I believe the exact opposite happens. You must embrace what digital offers. The ability to rapidly replicate is the way to create value in the digital world.

Take the case of the Jonas Brothers, a band of three brothers based in New Jersey. Their record label, Columbia Records, spent a bunch of money recording a series of music videos based on their single Mandy. They spent more money buying traffic to the Jonas Brothers website to showcase the video. The result was very little traffic.

Then in a stroke of brilliance, Columbia Records put the video in an embeddable player on the Jonas Brother's myspace page.  Within weeks the video had replicated all over myspace. The result was a huge amount of traffic and increased sales of the song Mandy on iTunes. Masive viral replication drove sales.  Abundance at work.

Two weeks ago my daughter Emily became a bat mitzvah. Like most proud parents we threw a party for her. At her sister's party two years before we had a photographer who shot the event and made the photos available via a password protected website. The photos were watermarked. If you wanted prints, you paid him for them.

We hired the same photographer at Emily's party, but we also put up a photobooth where the people who came to the party could take their own photos. The photobooth pictures were all black and white. But these photos were available the night of the party on a totally open website where anyone could take them and do whatever they wanted with them.

The next day the photos from the photobooth had replicated all over the web, to flickr, to photobucket, to typepad and blogger and, most of all, to myspace. Three weeks later many of Emily's friends still have photos from the photobooth as their profile photo on myspace.

And the guy who put together the photobooth has gotten a ton of new business from the people who came to our party and from the people who saw the photos on the web. I even got a request to use the photos in an advertising campaign.

Contrast that with the photos that were taken by the hired photographer. They are locked behind the password protected site and few if anyone will buy them other than our family.

I could go on and on aboiut this. But this is a blog post and I am writing it on my new blackberry 8700g and my thumb hurts.

My point is not that scarcity doesn't matter anymore. Scarcity will remain the source of value in analog goods like oil and water.

But when something goes digital, the value creation exercise is about creating abundance, not scarcity.

A Police State

  An Endless Line of Police Cars 
  Originally uploaded by fredwilson.

I was bikiing on the west side yesterday morning and this line of police cars came down the west side highway.  It went on for at least three or four minutes.

There were at least 50 police cars in this motorcade and I never saw a SUV or some other car that was carrying the person they were protecting.

I have no idea what the reason was for the motorcade but it sure felt like overkill to me.

UPDATE: Lot's of good comments explaining what this was.  It's a "hercules" practice session.  I take back my comment about overkill. I am glad they do this.

Why I Think The Arctic Monkeys Are Here To Stay

From the new EP:

Despair In The Departure Lounge

And the title track is even better but I gotta give you all some reason to go buy the disc.

Quote of the Day

From Howard Lindzon:

"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." Charles Darwin

Surfboard Art

I don't post too often about art, but our good friend Peter Dayton has a show up now at Winston Wachter.

Peter is painting surfboards right now.

They are super cool.

The Gotham Gal has the whole story.