Musings of a VC in NYC

Wow

I came upstairs to my office at 5:15am this morning with a simple plan. I was going to read through the comments to yesterdays post and select one and write a blog post.

5am to 7am is my writing/thinking time. At 7am, I head downstairs and wake the family.

It's 6:53 and I've just finished wading through the 344 comments/suggestions and doing my own liking/voting/replying to them.

Quora cannot hold a candle to this community when it comes to startups and technology and investing. You all are simply amazing. If anyone wants to know my secret sauce when it comes to investing, all they need to do is wade into those comments. It's a gold mine.

I promise I will get to blogging about the top five or ten liked comments. And I will aslo blog about another twenty or thirty topics in there that I particuarly liked. But my time for blogging is over today. Time to wake up the family.

Free Software, Paid Support

There is a thread on programmers.stackexchange.com that asks the question "Why do programmers write applications and then make them free?" The top answer right now is:

Because I don't want to feel obligated to provide technical support or offer refunds.

I have always found the free software approach to be instructive. There are many forms of creative expression out there and most of them involve a paid model. But there is a very vibrant community of software developers that build things and then make them available to anyone who want to use them for free. The key is that they don't offer any ongoing support or maintenance.

If you dissect the model, you'll see that the one time effort of building something is something many software creators are willing to do for free. But the ongoing time and effort of supporting and maintaining the software is not something that can be done for free.

This is, of course, the insight that provided the open source business model. Build software, give it to the community to maintain, and charge for ongoing support. There have been a number of successful businesses built using this model including Red Hat, MySQL, and hopefully, our portfolio company 10gen.

Having worked with software driven startups for many years now, I recognize the cost model all too well. The initial founding team can often build the product in three months. That team is often two or three developers. But once the software becomes popular, it requires dozens of developers to maintain and enhance the code base. It takes a team of tech ops people to keep the software available if it is a web service. It requires a team of people doing support via email. The cost of building software pales in comparison to the cost of maintaining, enhancing, and supporting it.

This approach can be mimicked by anything that is made of bits not atoms. It can be applied to writing. It can be applied to music. It can be applied to film. It can be applied to photography, anime, cartoons, etc, etc.

This does not mean that the paid model of writing and selling software is a bad one. It works and will continue to work. This does not mean that the paid model of recording and selling music is a bad one. It will work for some. This does not mean that the paid model of writing is a bad one. It will work for some.

But it does mean that the free model is very powerful and should be considered by anyone who like to create things but does not like to deal with hard work of maintaining and supporting the work. It is the model behind this blog in fact. You get the content for free. Anything else, you have to pay for with equity in your company.

Do You Ever Get Bored Of Blogging?

In the cab home from her basketball game yesterday (they won), my daughter Emily asked "Dad, do you ever get bored of blogging, tumbling, twittering?" I chuckled and handed her my post from yesterday to read (on my android).

The truth is I never get bored of writing. It is something that came relatively late in life for me. I started writing when I started blogging in 2003. I was 42 years old. It's a hobby, something I do to entertain and educate myself and I enjoy it very much. I love putting the puzzle that are my thoughts together every day.

But an unintended consequence of this writing hobby is that I've developed an audience and a public persona. I didn't set out to do that. But it happened. And now I've got a responsibility to serve the audience and manage the public persona. At least I feel that responsibility.

The "work" I referred to in my post yesterday is that responsibility.

I never get bored of "blogging." At least I don't get bored of the writing part of it. I do get bored of maintaining an audience and a public persona. That can get old and lead to ruts like the one I got in with Twitter last year. But all it takes is some great feedback (notes in Tumblr, RT and replies in Twitter, and comments on this blog) to get me over that. The ability to get immediate feedback on my thoughts is a magical thing and at the end of the day, it is what keeps me going day after day.

RSS Continued

This is a followup post from yesterday's one on RSS. Two things I want to add.

There is now an RSS feed just for MBA Mondays. It is available in the AVC RSS page. But for all of you who want to separately subscribe to MBA Mondays, here is the MBA Mondays feed. There's your MBA Mondays book everyone ;)

There were a bunch of requests to see the full refer logs for AVC. People wanted to see if engagement differed measurably by source of traffic (with most of the interest in people who click thru from RSS readers). Here are the refer logs for the top 25 referring sites over the past 30 days. If you want to see it larger, click on the image.

There are clearly differences but I don't really see any evidence that RSS subscribers are more engaged. The most engaged readers seem to come from TechCrunch! Go figure.

RSS: Not Dead Yet

I immediately thought of that great Monty Python skit when I read a series of posts in the past week declaring RSS "dead." If you look at the number of refers/visits coming from RSS, you might conclude that services like Facebook and Twitter are taking over the role of content syndication from RSS. That's essentially what MG Siegler concludes by looking at TechCrunch data in this post.

But as some of the commenters on that TechCrunch post point out, many RSS users consume the content in the reader and don't click thru. That's certainly what goes on with AVC content. Here are AVC's Feedburner stats for the past 30 days:

The blue line is "reach" meaning the number of unique people every day who open an AVC post in their RSS reader. It was almost 10k yesterday and it averaged 7,730 per day over the past month.

Here is AVC's web traffic over the same period:

So AVC averages about the same number of web visits every day that it gets RSS opens (about 7,500 per day).

Not dead yet.

A few other things worth noting. The direct visits of ~80k per month include a substanital amount of Twitter third party client traffic that doesn't report to Google Analytics as Twitter traffic. That's been a missing piece of the analytics picture for a long time and I wish someone (Twitter and Google??) would fix it.

AVC gets about 2,500 visits a day from RSS. That means about 1/3 of the people who open a post in their reader end up clicking through and visiting the blog. I suspect the desire to engage in the comments drives that.

The twin tech news aggregators, Techmeme and Hacker News, drive a ton of traffic to AVC. Thanks Paul and Gabe!

Bottom line is that RSS is alive and well in the AVC community. While I do agree that Twitter and Facebook have gained significantly in terms of driving traffic across the web, for technology oriented audiences, RSS is still a critically important distribution platform and is very much alive and well.

Step Function Growth

I was at a board meeting yesterday and we were looking at a chart of growth. It looked something like this:

It was not straight line growth. It was stair step growth. Back in my math geek days, we called this a step function.

And this is what the user growth charts of most of our portfolio companies look like.

Nick Denton published a manifesto on blog design and blogging earlier this week. In it he showed this growth chart.

You'll note a similar stair step function in this chart.

Then Nick delivers the money quote:

We learned our lesson: aggressive news-mongering trumps satirical blogging. Gawker.com's growth since 2008 — from 300,000 people a week in the US to 1.4m — came in steps. After each story-driven spike — Tom Cruise's Scientology pitch video, Montauk Monster, Eric Dane's hot-tub non-orgy, iPad security breach, Christine O'Donnell's Halloween sleepover, etc — the audience settled back down, but at a higher level. The same pattern holds for Deadspin, which has ridden a sensational series of scoops culminating in the revelation that Brett Favre had stalked a buxom sideline reporter.

Growth comes in steps. There's a big event. Shaq joins Twitter and brings his fans with him. There's a spike. Things calm down, but they don't go down. Then a plane lands in the hudson. Another spike. Things calm down, but they don't go down.

That's how it was with Twitter and that's how it has been for most of our portfolio companies. The big events drive user growth. For Etsy it might be a seller being featured on Martha Stewart's TV show. For Tumblr, it might be Newsweek starting a tumblog. For Disqus, it might be Techcrunch joining the network. For Nick Denton, it is clearly "aggressive news-mongering."

The key learning is that, as Nick says, "the audience settled down, but at a higher level." Big events will drive audiences and some of them will stay. And you will grow in steps.

The AVC Network

Disqus (a portfolio company of USV) has rolled out a really sweet analytics service as part of its "add ons" that were released a few weeks ago. You get the analytics as part of every add on package, including the $19/month Plus service.

There are four main parts of the analytics service; snapshot, activity, people, and network. It's the network tab that has me the most interested. I'm always curious where the most active AVC community members hang out when they are not on AVC. Since Disqus is first and foremost a commenting system, "hanging out" means commenting for the purposes of this post.

Here's the answer:

I'd like to see more than the top six. Ideally I'd like to see the top 25 or more. But this is a good start. Happily I call each of these bloggers a friend, and one of them is my wife. If we had a dinner party with this group, it would be a blast. I'd sit Dave Winer next to Mark Suster and Howard Lindzon just to make things interesting.

This suggests a whole new set of features for Disqus. If they know the communities with the greatest overlap with this community, they can and should build network tools so that readers of this blog are aware of what is going on across the network. If there's a great post/conversation going on at Suster's blog, we should know about that here at AVC and have a quick link to get there from here.

Fortunately the team at Disqus knows that. I'm not announcing any features here. But I am pointing out that communities like AVC don't exist in a vacuum and there is a network of communities out there and Disqus is powering most if not all of them. And so there's a lot Disqus can do to make the network come to life in powerful ways. I'm looking forward to watching them do just that.

Giving Every Person A Voice

I had the pleasure of watching John Battelle interview Evan Williams to wrap the Web2 conference yesterday. John's a great interviewer and it was a memorable talk. But the thing that stayed with me through the night and was on my mind as I woke up this morning was this part, as transcribed by Matthew Ingram.

Williams — who founded Blogger and later sold it to Google — said that “lowering the barrier to publishing” has been something he has spent most of his career on, and this is because he believes that “the open exchange of information has a positive effect on the world — it’s not all positive, but net-net it is positive.” With Twitter, he said, “we’ve lowered the barriers to publishing almost as far as they can go,” and that is good because if there are “more voices and more ways to find the truth, then the truth will be available to more people — I think this is what the Internet empowers [but] society has not fully realized what this means.”

When I started blogging back in 2003, I would tell everyone how awesome it was. A common refrain back then was "not everyone should have a printing press." I didn't agree then and I don't agree now. Everyone should have a printing press and should use it as often as they see fit. Through things like RSS and Twitter's follow model, we can subscribe to the voices we want to hear regularly. And through things like reblog and retweet, the voices we don't subscribe to can get into our readers, dashboards, and timelines.

If I look back at my core investment thesis over the past five years, it is this single idea, that everyone has a voice on the Internet, that is central to it. And as Ev said, society has not fully realized what this means. But it's getting there, quickly.

The Community Box

Those who hang out in the comments frequently may have noticed that Disqus has been slowly rolling out some new features in the space at the top of the comment thread. The latest new feature arrived last night and looks like this.

If you open the comment thread and click on that button, you'll get a popup called The Community Box. This is a real-time dashboard of what is going on in the community. The data is still getting filled out on the back end so it is not entirely accurate yet, but based on my quick look, it seems pretty accurate.

The leaderboards are based on a trending algorithm so they will change over time based on who is active and who is not.

Let me know what you think.

Comment Spam and False Positives

Every successful social media system I have ever been involved with has to tackle the problem of spam. It is one of signs that you are successful. When the spammers start targeting you, it is a sign you have arrived.

Over the years Disqus has had to fight comment spam and they've done a pretty good job of it. Their spam filters catch most of the comment spam. Occasionally one gets through and I manually delete it, most often via email with a reply with just the word "delete" in it (without the quotes).

In the past month, I've noticed a significant uptick in the amount of comment spam being targeted at the AVC comment threads. More is coming in and more is getting through. I asked the Disqus team about this a few weeks ago and they told me they are seeing a significant uptick in spam across all of their communities and they are dedicating additional development resources to fighting it.

One of the costs of tightening up the spam filters is you get false positives. And thanks to Harry Demott, I noticed this morning that a bunch of legit comments by AVC regulars had been marked as spam. I just went in and manually approved those comments and notified Disqus of this issue. I suspect they tightened something up in the past week a bit too much.

If you have been having trouble getting a comment to post in the past few days, this is likely the source of the issue. If it continues to happen, please let me know via email. I will make sure to visit the spam page in my Disqus moderation panel regularly for the next few days to make sure this isn't continuing to happen. And I am confident that Disqus will get this fixed in short order.