Musings of a VC in NYC

A Great Web Developer Opportunity in NYC

Our portfolio company Targetspot helps internet radio services make money. They’ve built “adwords for streaming music” and they’ve got many of the top radio stations in the country using their service.

They are growing rapidly and are looking for a crack web developer to join the team.  The Company is located in midtown NYC and is a great place to work. Here’s the job spec if you are interested in learning more.

Constraints and Rules

I believe web services benefit from doing less, not more. I believe that allowing the users to stitch web apps together to get increased functionality is better than a web service trying to do everything for everyone. The Facebook app ecosystem is one proof point of this approach.

Evan Williams and Jack Dorsey, founders of Twitter, have talked often of the "constraints" that are built into the Twitter app. You can only post 140 characters in a single message, for example. And because Twitter didn't have desktop client when it launched, a number of them were created and they are probably better than anything Twitter would have created. Same with the iPhone apps like Twinkle and Twitterific.

I think developers of web apps need to think hard about the constraints they are going to apply to their service when they create it. And they need to build an api early on so others can take up where they left off.

But what about when the constraints are dictated to you? This happened last week in the Twitter world when the company finally decided to stop paying a huge monthly bill to provide sms following services in countries (like the UK) where they don't have a direct relationship with mobile carriers that allows them to avoid paying for that delivery. Twitter has now constrained their service in a way they really don't want to constrain it. WIll some third party come to the aid of the users with a solution that Twitter didn't think of? That would be great. More likely, Twitter will cut a deal with the UK mobile operators and mobile operators in other parts of the world. I am not sure if these kinds of constraints are good or bad. It's too early to tell.

And then we have the example of web-based music. Pandora is in the news because they claim they cannot afford the compulsory license they owe music rights holders for the playing of streaming music on the Internet. The CEO of Pandora is threatening to shut down the company if they cannot get relief. And he says that 70% of his $25mm in revenue goes to the music rights holders. The compulsory license for streaming audio is a huge constraint in the web music space and there is no question it is harming innovation. There are solutions, for example Pandora chooses to not run audio ads in their streams like you hear in the car on the way to work in the morning. Our portfolio company Targetspot could provide them that form of monetization today if they wanted it, but it's up to each web app developer to decide how they want their service to look and feel (and sound). If Pandora believes that their service should be free of audio ads, that is their decision. But the constraints of the compulsory license makes it very hard to deliver an audio ad-free experience to their users cost effectively.

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what is this?

My Prediction

Will Pandora close before the end of October?

I predicted No   
on 24th Aug 08

More predictions by me: fredwilson

Hubdub - The News Prediction Game

It's ironic that 8tracks launched this week in the midst of this controversy. 8tracks is a streaming music service that was built with the very constraints that Pandora is dealing with in mind. David Porter, the founder of 8tracks, has been in the web music business for a long time and is intimately familiar with the rules (ie constraints). So he built a streaming music service that enforces the definitions of "internet radio". You cannot put more than one song from each artist into your mix. You can't see the song lists of the streams before you play them. Etc. Etc. And so his service has been constrained in ways that may or may not be good for end users. We will see. Here's a mix of my top 8 tracks this week. Let me know what you think.

I believe constraints are key to building great web apps. I am not sure about rules that are dictated by the market or government. But the reality of the place we are in is that we have to deal with them. And the best entrepreneurs will figure out how to play these rules to their advantage.

The Dream Phone

It seems that a lot of people in tech land are down on Android these days. My friend Howard sent this update via twitter last night:

          Google has another blind spot and a black hole of money - Android - absolute disaster brewing

I don't share that point of view. I can't wait for the Android-based Dream phone from HTC that will run on T-Mobile (thank god!). Here's a video I saw on Apple Insider today of the Dream phone.

Its hard to know if that is a legit video and it's hard to really get a sense of the phone from that video. But it looks a lot my my "dream" phone that I blogged about almost a year ago now.

The things I really want in a phone are a big touch screen with a great browser that supports flash, native google apps, a real keyboard for typing that slides out like the sidekick, and the ability to run it on any GSM network.

It cracks me up that they call this The Dream Phone because that's pretty much what it is for me.

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Etsy Needs A VP of Product

Image via CrunchBase

There are some companies that are just different, special, and doing something important. Etsy sort of defines that kind of company to me. They are trying to make it possible for creative people to make a living off of the things they make. And in the process, they have built a market where you can find amazing one of kind items that make great gifts or things you can wear with a smile on your face.

Etsy has grown a lot in the past three years and they are in the process of adding a few members of the team to help them deal with all of that growth. Maria Thomas joined earlier this year and is now the CEO. Rob Kalin, founder and the initial CEO, is now Chief Creative Officer. Chad Dickerson recently left Yahoo! and is Etsy's new CTO.

That's a killer team. And they have a few more slots on it. The next one up to fill is VP Product. Here's the job spec.

I am telling you that this is a special company, a fantastic team, and an amazing job. If you are a world class product manager, think hard about doing this. If you want to take the next step, send your resume/CV/linkedin profile to [email protected]

The AVC Meetup in DC

As promised, here's a picture of the "AVC" meetup in Washington DC on wednesday night. Here are a few more pictures. It's kind of funny to see a bunch of people gathered together because of this blog and not to be there. But as I said to Jeremy (the organizer) yesterday via email "I don't scale, but this blog and it's readership does".

Jeremy wrote a great blog post about the event.

Here are some stats culled from Jeremy's post:

17 people attended

• 33% from the VC world
• 33% start-ups/programmers/techies.
• 33% folks passionate about the Internet and its potential

How they read this blog

• 75% via RSS
• 25% via the website

How long they've been reading

• About 50% had been reading since 2004 or earlier
• The other 50% had started reading within the past year
• Only one person who started reading Fred's blog in 2005-06 timeframe.

Here's some startup ideas that came out of the meetup:

• challenj.com a cool app for ad-hoc competitions via FB
• predictad.com a way to monetize and enhance site search
• watchlister.com monitor your global micro-brand
• Health Central Network offers better health management
• mixedinkey.com (award for best elevator pitch: “We make the software that Madonna’s DJ uses!”

And yes, that is a good elevator pitch. Sound bites make great elevator pitches.

I'd like to thank Jeremy for setting up the meetup. And if anyone else wants to do something like that, I'll try to make it easy. Use meetup to set up the event and then let me know about it and I'll blog about it.

Google Ad Planner vs comScore

Back in June, when Google announced Google Trends For Websites and Google Ad Planner, I wrote a post comparing Google's data to comScore's data and concluded that Google had a lot of work to do to get their data right.

I've been an investor and board member in/of comScore since 1999 and am clearly biased, but I also know a lot about this stuff. I left comScore's board in June (a bittersweet moment) but I still own a lot of comScore stock through our Flatiron partnerships. So consider me an interested and biased party to this discussion.

Nevertheless, I still think that Google has a lot of work to do to get their data right. comScore's been at this stuff for ten years. The team who started and run the business has been in the market data business for close to thirty years. And they are hard core stastics people who understand panels and how to project using statistically significant and unbiased data.

So I read John Battelle's post yesterday on Google's Ad Planner vs comScore with great interest. John says:

So far, [Google is] not so good on this measure. As Gian and Comscore have long pointed out to me, it takes more than raw data to make for good measurement. Ideally, you weight your data with a lot more knowledge of its context - what kind of machine is creating it (work or home? Man or woman? etc.). While Google once blended Comscore demographic data into its ad network, Comscore confirmed to me that this is no longer the case. And while it is subject to endless criticism, Comscore does have a lot more practice at this game than does Google. At least for now.

If you care about this stuff, go read John's post. There are several charts in it that make the point clearly.

Is Geek Tech Going Mainstream?

There was a set of map charts on some popular blog this week that showed how 'geeky' your web service is. The more its users were centered around silicon valley, the more geeky your web service is.

Of course this is the fear we who invest in leading edge web stuff live with in the back of our minds. That the services we invest in are used by geeks and nobody else

Delicious, one of our first investments, is the prototypical geek service that never went mainstream. And there are plenty more geek oriented web services out there including a lot of our portfolio.

But I've been seeing signs that the 'mainstream' user is starting to adopt these leading edge web services.

Many of our friends are not geeks. We live in NYC where our social circle consists of a wide range of professions and people. When we go to a dinner party, there's usually nobody who knows what venture capital is and facebook is the thing their kids use.

But in the past several weeks, I've been seeing some signs in our social circle that make me very optimistic. The Gotham Gal and her friends are chatting on their blackberries like they used to chat on the phone. My friend whose a mother of two college age kids in long island is twittering about her daily life. We are getting facebook invites instead of evites.

Some of this comes from our kids. They got their moms into bbm'ing and now the moms are doing it with each other. Same with Facebook. Two years ago, my kids wouldn't accept my friend request on facebook. Now they are happy to have us in their social net so they can share photos and other stuff with us in the system that they use as their web space.

Some of it is changing news consumtion habits. Following one or more of the olympic twitter feeds is the single best way to keep up with what's going on in China and I've turned a bunch of non twitterers on to it and they love it. 

But I think the single greatest contributor to this 'mainstreaming' of web apps, ironically, has to do with the mobile phone. Whether its the iPhone, the Blackberry Curve, or the Nokia N95, mainstream people are carrying around powerful web connected devices in their pockets. And web services that have been constructed in the past three to five years were built with the mobile device in mind and they are being actively used by mainstream users, not just here, but all around the world.

I think this is the single most important thing we investors in web tech need to be watching. Monetization is key, of course, but getting these services across the chasm and into the mainstream is going to make monetization a lot easier.

Fire Eagle - Where's The Mobile App?

I love the concept of Yahoo's new Fire Eagle. As Mark Josephson of outside.in said to me the other day:

Fire Eagle is a location wallet

It's a web service that you can tell where you are at all times and manage what web services get to use that info and under what circumstances. It's very focused on security and privacy and rightly so. Here's Yahoo's description of Fire Eagle.

I've set up a Fire Eagle "wallet" and have connected it to dopplr and outside.in radar. There are a bunch of other apps that work with FIre Eagle and they are listed in the Fire Eagle app gallery.

So here's the thing. Fire Eagle needs to know where I am without me telling them. When I first set it up, I chose dopplr as the service that tells Fire Eagle where I am. And when I arrived in San Franscico the other night, I got an alert from outside.in's radar about something interesting happening near where I am staying in SF. I thought - "awesome - this works".

But this morning I got an alert from outside.in's radar about something happening in Boston (where I am headed tonight). I went to Fire Eagle and sure enough it thinks I am in Boston because dopplr does (my mistake).

That was a big realization for me. Using web services that rely on data input to update Fire Eagle makes no sense. It needs to be updated by my mobile devices.

So I figured that I'd put a Fire Eagle mobile app on my iPhone. Except there isn't a native Fire Eagle iPhone app. Here's what they suggest:

Be on the lookout for more ways to update your location:

• Get Dopplr to tell Fire Eagle the city you're in.
• Check into your favorite places—and update Fire Eagle—with Brightkite.
• Update your location on your OSX dashboard with our very own Fire Widgets.
• Use ZoneTag, My Loki or Navizon to broadcast your location automatically.
• Try out Searchquest GPS for iPhone or visit m.fireeagle.com on the go.

But I don't want to use BrightKite, ZoneTag, or My Loki. I am sure they are all great mobile social nets, but I have enough social nets in my life right now and I think Facebook and Twitter are doing pretty well supporting me when I am on my mobile.

I'll see if I can get Navizon (which I like) or Searchquest working well on my blackberry and/or iPhone and use that to update Fire Eagle.

But Fire Eagle has been under development inside Yahoo! for the better part of the last year. Why couldn't they build light simple apps for windows mobile, blackberry, symbian, and iPhone that you can download and use to auto update Fire Eagle? That's really what I want.

From E*Trade To Twitter

Yesterday I sold the gold and silver stocks in my E*Trade account. Gold worked for me, silver did not, but I wanted to rotate out of commodities and into tech.

Around mid-day, the following updates appeared in my twitter stream:

Here's how this happened. Covestor, a Union Square Ventures portfolio company, tracks my E*Trade account and collects all the buy and sell activity in my portfolio. They just added the option to automatically post all trades to Twitter. So I turned that option on yesterday morning (settings, import/export for those of you who use Covestor).

I just put a couple market orders in today to complete the rotation out of commodities and into tech so those that follow me on twitter will see updates when those orders are filled.

I love how all these web services are getting stitched together by us (the users). It's the foundation of the web we are building, an open and connected web controlled by the end users.

This makes five out of the past ten blog posts where I have mentioned one of our portfolio companies. Apparently it's gotten out of hand:

Fred - There's 4 posts about your portfolio companies in the last 3 days... I hate to say it but this blog is starting to feel like a bunch of advertising for companies you invest in. If I wanted to read about pinch media, outside.in, return path and disqus every day I could to go their company blogs.

I'll try to cut down the advertisements and get back to the regularly scheduled programming, but there are some exciting things going on in our portfolio that are the result of ideas expressed on this blog every day. My work and this blog are one and the same. So the ads will continue, but I do take the point.

Disqus Gives Users What They've Been Asking For

Our portfolio company Disqus has released a new version of their third party comment system. This is a big release with a ton of new features. But the one that everyone has been asking for is "native" wordpress integration. What this means is as follows:

* Improved platform integration including WordPress plugin 2.0
   - Powered by the new developer API
   - Comments are SEO friendly
   - Automatic data sync between Disqus and the local database
   - Seamless import/export of old and new comments
   - Moderate right from the WordPress Admin

Now you can use Disqus on Wordpress and get all the benefits of the Disqus system and not lose any of the benefits of native comments on Wordpress. You keep your SEO, every comment is synched into Wordpress' comment database so if you leave Disqus you'll have all your comments in Wordpress, and you can moderate comments in Wordpress.

I love disqus because it amplifies the conversation on my blog. If you want to try it out but have been nervous about some of the issues people have raised, now is the time to give it a spin.

Disqus also announced today that over 30,000 blogs have adopted its comment system. That's a pretty good number and it means that when someone comes to your blog to leave a comment, there's a really good chance that they are already registered and have a profile in disqus. That's a big deal.