VV Show #49 - Rafat Ali of paidContent and contentNext

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Attention entrepreneurs dealing with the current economic downturn: This interview is for you. After working as a journalist for Jason Calacanis at Silicon Alley Reporter, Rafat Ali ended up broke in a market with a dearth of employment opportunities. To try to find a new job, Rafat created paidContent.org as an "interactive resume." Luckily, no one hired him. From these humble beginnings, Rafat bootstrapped his blog holding company, ContentNext Media, for four years before taking a small investment from famed media investor Alan Patricof in June 2006. From its inception paidContent has doubled revenues each year and was recently acquired by UK-based Guardian Media Group for a rumored $30 million. Listen in as Rafat outlines the past, present, and future of online media, while sharing his war stories from another uncertain economic time.

1:35 Early career
3:25 Worked for Jason Calacanis
4:48 Working at Inside.com - "Timing was all wrong."
7:50 Learning on the job with paidContent, "I had no idea, zero idea."
8:45 Growing and getting the word out - "It really did spread by word of mouth. There was no other way."
9:20 Launch of mocoNews.net, a sister site covering the mobile space
9:45 June 4th, 2002: The exact genesis of paidContent
10:57 "People thought that you would have to pay to access websites because the online advertising market had crashed."
11:33 paidContent covers "all the ways in which content gets paid for."
11:45 paidContent becomes a full time gig
14:03 Heeding the advice of Seth Godin: "A downturn is the best time to start a company."
14:15 "I actually did e-mail [Seth Godin] a couple of years after that 'you were one of the catalysts that helped me decide'... and he never e-mailed me back. And I'm kind of still angry about that..."
15:05 Early days and a limited budget
15:30 "There were at least two times I remember when my bank [account] had zero balance."
17:23 Advice to entrepreneurs: Get your finances straight
18:53 The blogging lifestyle
19:04 "I had a phone and an internet connection. That's all you really needed in my business."
19:47 Early attention and awards
21:11 Was it fun?
22:04 From a blog to a business
25:10 Early revenues: "high five figures" after 2.5 years
28:20 4 years of bootstrapping: First investment came in June 2006
28:58 On receiving "a few hundred thousand" in financing from media investor Alan Patricof: "his validation was huge for us." They never raised any more money.
30:15 The financing process
32:18 On Alan Patricof: "Immediately I felt like he got (our business)."
33:11 Giving structure to the business
35:32 Post-funding growth: new sites (contentSutra, "covering India's digital content market"), conferences, seminars, research reports, and jobs sections
42:41 Main revenue streams: conferences, advertising, and sponsorships
43:40 Biting the hand that feeds you, i.e. reporting on your own advertisers
46:43 Competition: "It's not a cliche... having competitors in the market helps you define yourself." Note: One of the competitors was co-founded by Kevin Ryan
48:48 On dealing with the rumor mill: "We don't publish rumors."
50:45 "A gossip rag is tough to monetize."
51:23 "You can't define blogging as one industry."
53:22 "We will probably see some more consolidation in the [online media] industry [in the next six to nine months.]"
54:40 Current state of ContentNext: 25-27 people, will add more but being careful, given the current economy
55:40 A "few million" in revenue
55:52 "We've doubled our revenue every year... and are on track to do it this year."
56:17 On the economic slump: "Because we have multiple revenue streams in multiple countries, we will be able to weather [the downturn] a lot better."
57:03 The exit: ContentNext is acquired by Guardian Media Group
60:00 On exit multiples: "Typically some of the big traditional media companies -- and we are not big and we are not traditional -- get anywhere from 3-5x forward looking revenues."
60:51 Keeping the deal quiet: "Tried to keep it quiet... but somebody beat us to it."
64:38 Rafat's advice for media entrepreneurs in the current market
67:10 What's next for paidContent?

Posted by greg at 11:37 AM | Comments (1) | TrackBack

VV Show #48 - Frank Addante of The Rubicon Project

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Whether working with market trends or against them, Frank Addante has found entrepreneurial success. Before he was 29 years old, one of Frank's companies went public and two were acquired. At his worse, he returned capital to investors. Suffering from serial entrepreneurship, Frank left the Illinois Institute of Technology just four classes shy of his degree. His companies range from an early search engine to a Sequoia Capital-backed enterprise email solution. Now Frank aspires to be a web publisher’s best friend with his new ad network optimization service that he says is boosting their clients' revenues by 30-300%. Listen in as Frank details his ongoing entrepreneurial journey.

1:05 Company #1: Start off with Starting Point – a “card catalog for the internet”
2:20 Decision to leave college and the early days at Starting Point
3:30 Early days of online advertising.
5:11 Life after Starting Point
5:50 Entrepreneurship in Chicago
7:20 Company #2: L90 and Ad Monitor, a focus on advertising technology
8:30 “CEO without the title”
9:15 Comparisons to DoubleClick (Listen to DoubleClick's former CEO on Venture Voice)
10:30 The myth of competing cultures in early advertising
13:25 Surviving a bursting bubble through acquisition
14:34 Thoughts on net-worth volatility
16:03 Leaving L90

• Solving the “what if Frank gets hit by a bus” dilemma

19:25 Company #3: Zondigo

• “The absolute worst time to be starting a company, particularly a wireless company”
  
• Rare maneuver: returning funding to shareholders
  
• Avoiding emotional hang-ups of entrepreneurship

23:45 Company #4: Addante & Associates, an incubator, turns into StrongMail Systems
27:00 Moving StrongMail to the Valley and “the Sequoia connection”
32:05 On taking advice and the “not right now” list
34:38 Company #5: The Rubicon Project

• “A combination of great people, funding and [a] market that brought the whole thing together”

38:01 The Rubicon Project in a nutshell

• 80% of advertising is unsold and filled through ad networks.
  
• Currently 300 ad networks and growing.
  
• “That’s a lot of chaos.”
  
• Great for advertisers, a “nightmare for web sites.”
  
• “Someone has to sit in the middle of all this chaos and that’s what we’re trying to do.”

40:20 The importance of “the team”
41:38 On moving quickly: “Go fast but don’t hurry.”
42:25 Smooth sailing, so far.

• “Customers have seen anywhere from a 30-300% lift in their revenue.”

44:00 On concern from ad networks: “Change will be beneficial for everyone.”

• “33% of consumer time is spent online, but only 7% of advertising budgets.”
  
• “It’s still too damn hard to advertise on the internet.”
  
• “We’re just trying to automate this.”
  
• No channel conflict: “Will not sell direct to advertisers.”

47:00 Stats: 60 top ad network, over 4,000 publishers, 40 employees, $21 million raised
47:20 Thoughts on the future of The Rubicon Project
48:35 Advice for entrepreneurs

• “Mistakes are OK”
  
• “Try not to be a feature”
  
• “Build a great team”
  
• “Figure out your business model early”
  
• “Just go for it”

Frank's Blog: FounderBlog

Frank's pitch for LA:

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VV Show #47 - Tom Perkins of Kleiner Perkins

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The name Tom Perkins is now almost synonymous with venture capital, but it's clear that he cut his teeth as an entrepreneur. Educated at MIT and Harvard, Perkins first made his mark by managing the initial growth of Hewlett-Packard’s computer business while simultaneously inventing the first cheap and reliable laser. The company he built around the laser, University Laboratories, made him independently wealthy and allowed for the creation of Kleiner Perkins, one of the most successful venture capital firms in existence. Kleiner Perkins (now Kleiner Perkins Caufield & Byers) has funded a wide range of well known and wildly successful companies including Google, AOL, Genentech, Sun Microsystems, Compaq, and Tandem Computers. Though Tom's wowed the business press for much of his career, later in life he's gained national attention for having a key role in 2006 Hewlett-Packard board controversy, briefly marrying Danielle Steel, and building the world's largest privately owned sailing yacht. Tom has recently stepped back into the media spotlight by publishing a memoir called Valley Boy: The Education of Tom Perkins. Listen in as he discusses his journey from New York to Boston to Silicon Valley, the creation of Kleiner Perkins, and his advice for the entrepreneurs of the future.

3:00 Early ambitions: the road to MIT.
4:40 From Theoretical Physics to the Harvard Business School.
6:15 Introduced to the Hewlett- Packard company: “a great stroke of luck.”
6:52 “Dave Packard taught me everything I ever learned about entrepreneurship.”
8:42 Simultaneously running HP’s computer business and University Laboratories.
11:15 Thoughts on moonlighting and Google’s 20% time.
12:23 Why not jump ship with University Laboratories? “It was a very tough decision [but] I was so fascinated by the computer business, which was growing explosively.”
13:40 Dave Packard: the first modern VC.
14:30 The Kleiner Perkins model: A “hands on” approach to VC.
15:00 First KP fund: $8 million, largest ever at the time.
15:25 The admirable ethics of venture capital.
19:00 Early KP hits: Tandem Computers & Genentech.
20:15 “Our philosophy was that you find the idea and not the individual.”
22:39 “We’ve never financed anything that’s come to us through the mail or over the Internet.”
23:40 The “Intensive Care Unit” at KP.
26:30 Biggest mistake: “Not funding Apple Computer."
29:02 Thoughts on the modern day venture capital industry: “There’s always been too much money in venture capital.”
31:15 Thoughts on entrepreneurship and venture capital outside of Silicon Valley: “It’s a difference of psychology.”
34:40 Valley Boy, the Tom Perkins memoir.
36:40 Working on the News Corp. board.
41:30 On his own depiction in the media: “A venture capitalist should be behind the scenes… I yield the arena of self-promotion to no one, although Paris Hilton is gaining ground there.”
43:00 Current activities: sailing and submarining.
44:30 Recent comments on the science of global warming.
44:54 Biotechnology: “I still think we’re on the ground floor.”
46:00 Advice for new entrepreneurs.

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VV Show #46 - Jeremy Stoppelman of Yelp

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Jeremy Stoppelman is the co-founder and CEO of Yelp, a site where users can write and share reviews of local businesses. Everyone's now a restaurant critic. However, local reviews were not the original focus, but just one of several features in the earlier versions of the site. Noticing the growth of this buried feature, Yelp re-tooled the site around reviews and hasn't looked back since. Does this story sound familiar? Jeremy's the former VP of Engineering at PayPal, which also had to drastically alter its business early in its life. Listen in to hear Jeremy's thoughts on growing a local enterprise, giving users and identity, and how to recognize and act upon the need for change.

1:45 Early Internet experience

• Joined PayPal at 22

3:10 Uniqueness of Paypal

• Always knew they were "doing something of value"
  
• Macro environment was the problem: surviving the bust
  
• IPOed when IPO's were not happening
  
• "The elephant in the room was how do we charge"

6:00 Switch to business school, but why?

• Interest in business strategy
  
• Wanted to start a company, but didn't feel he had the full toolbox

7:05 What was the value of B-school?

• Accounting
  
• Case studies, referenced to this day
  
• Yet, only stayed for 1 year

9:30 Yelp is born

• Fascinated with the local space
  
• Local hadn't happened yet on the Internet
  
• Yelp catalyst:sick and looking for a doctor, no good method to gage reputation
  
• "Word of mouth amplified"

11:06 Yelp, an evolution not a revolution

• Original idea: "It's the same concept, broadly, but we had a different focus"
  
• Find out who your friends use, if no responses, then reach out to a broader audience
  
• Reviews were an afterthought, "buried in the site"
  
• Looking at the site usage, some people jumped on the reviews

13:25 Earlier on, what did the company look like?

• "Tiny"
  
• Expected a long road, "sipping the cash"

15:25 How did you know when it was right to change the strategy?

• Passion for the problem
  
• Data tells the story

18:50 Please yourself

• "I built a site that worked for myself, and that translated well to other people"
  
• Used personal impressions from use to develop new features

19:30 Catering to a female audience

• Found that females were responding well to the site
  
• Altered the color scheme
  
• Softened the word Yelp with visual elements
  
• Effects were immediate

22:15 Strategy discussions

• Paid reviews? Only in the early stages of a city.
  
• Broad or focused?

25:12 Citysearch differentiators?

• Citysearch = editorial, Yelp = reviews
  
• Citysearch users are semi-anonymous, Yelp users have a profile and identity

26:40 How do you make it popular?

• Get it right, and people will spread it.

30:10 Yelp gets Googled

• Adapted overtime to search engine
  
• Early 2005, site was not crawler friendly
  
• Fixed search engine optimization, still paying off today

32:50 Expansion beyond the Bay

• Use Craigslist and other examples to locate ideal cities for local services
  
• Require cities and population that are "properly wired"
  
• Employs representatives in each major city
  
• Local reps and marketing staff seed the content

36:30 Competition?

• Citysearch
  
• Yahoo
  
• But Yelp has a unique spin

37:18 Revenue model

• Sponsorship program provides an upgraded page for a business
  
• No editorial content (a la Citysearch)

38:42 Is Yelp a tough sell?

• Yelp users and business customers make the introduction by going to places they discover on Yelp
  
• Word of mouth makes it to the owners ears
  
• Existing positive reviews motivate owners to join

40:07 How do you scale a local business?

• "The short answer is we don't quite know"
  
• But building a sales force
  
• Small businesses don't spend a lot of time looking at innovative ways to market themselves
  
• They need to be reached out to
  
• Employing VC dollars to build the sales force

41:01 Current state of Yelp

• Raised $16 Million
  
• Just over 50 people
  
• "Growing as fast as we can manage"
  
• "Revenue's great"
  
• VC backed so not profitable, but a lot of potential in the model

43:20 Biggest challenges?

• "Not screwing it up"
  
• Hiring the right people
  
• Not moving too fast
  
• Most important: taking care of the community

45:45 Any desire to grow faster to secure a large buyout?

• Not really
  
• Always external noise, learned to ignore it a PayPal and focus on the product
  
• "We're one of the rare start-ups that actually does have a pretty crystal clear picture of what our total business looks like"

47:10 Words of wisdom

• "Be prepared for the ups and downs"
  
• Volatility goes down after time, and it's very rewarding past the hump

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VV Show #45 - Kevin Ryan of Panther Express, ShopWiki and Music Nation

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Not many entrepreneurs have a motor like Kevin Ryan's. Kevin is best known for his work as CEO at the on-line advertising firm DoubleClick, which he grew from a 20 person start-up to the largest Internet company in New York at the height of the dot-com boom. After escaping the ensuing bust in an arguably improved strategic position, the company has since changed hands twice. In June 2005, the company was sold to the private equity firm of Hellman and Friedman for $1.1 billion and has made headlines yet again with its recent acquisition by Google for an astonishing $3.1 billion. Yet, this success has not slowed Kevin one bit. Since departing DoubleClick, he has already launched three start-ups, with plans for a fourth this summer. Listen in, as Kevin describes his DoubleClick experiences in both boom and bust, outlines his new start-ups, and explains why now is as good a time as ever to start a company, especially in the Big Apple.

2:00 Early career

• INSEAD by way of Wall St.
  
• EuroDisney: “an incredibly unpleasant experience.”
  
• United Media: launched Dilbert.com, which he describes as a “fantastic experience.”

3:55 The Internet according to Dilbert

• “[P]eople were passionate about the Internet and no one who started using the Internet stopped using it.”
  
• “[The Internet] is most fundamental business shift that is going to occur in my lifetime and it’s going to reverberate through almost everything.”

4:43 Focus on advertising

• “Advertising was going to be a key part of the Internet infrastructure… and the infrastructure didn’t really exist at that point to do it effectively.”
  
• Joined a small startup called DoubleClick because of their “valuable position.”

6:10 What differentiated DoubleClick?

• “People and technology at DoubleClick were really going to make it the long-term leader.”
  
• “They were thinking very big. The plan was that this was going to be a billion dollar company some day.”
  
• “Technology was going to play a huge role. That you could dynamically target these ads… that would make it ultimately much more effective than other medium.”

8:10 The DoubleClick alumni club

• “There are so many companies run by double click alumni.”
  
• “I will feel great in ten years if there are 10 people in this room who are CEOs. And it’s turning out to be the case.”

8:42 Lessons learned as CEO

• “The key was managing the growth … Force everyone to continue delegating”
  
• “[Y]ou’ve got to be able to make changes and make them relatively quickly.”

10:42 Dealing with mistakes

• “As long as you self correct … you can recover just fine”

12:38 Money management

• “We definitely spent too much money… It felt like capital was free.”
  
• “Today, that I’m launching companies and I see other people launching companies, everyone is more careful and more thoughtful and more cautious.”

13:09 The IPO

• “At that time the IPO process went incredibly well and it was easy because investors didn’t know what they were investing in.”
  
• “We were the largest [Internet] company in New York City. So it was just a great time.”

14:03 The boom goes bust

• “I can remember one week in the beginning of 2000 when the stock price, the value of our company went up by a billion dollars and I thought ‘this has got to be the beginning of the end here.’”
  
• “We had 70% of our clients who went under. You were prepared for 10%. You were prepared for 20%. I don’t think anyone prepares you for 70%.”

15:30 Lay-offs began and continued

• “People had lost faith in management.”
  
• “That’s the hardest thing to do. Senior management has to always feel positive and be positive about the future and it’s hard to do in a terrible recession.”
  
• “I never came close to quitting. I always knew the fundamentals of the Internet were going to win out.”

17:57 A changing business model

• “[We] always made more money in the technology business than the media business.”
  
• “Over time, [it] started to feel like we were having some conflicts. Some of the larger players didn’t want to deal with us on the technology side because they thought we were selling ads and competing against them.”
  
• “Getting out of the media business was the right decision.”

19:10 Exit strategies

• Hellman & Friedman buys DoubleClick for $1.1 billion in July 2005.
  
• Google buys DoubleClick two years later for $3.1 billion.
  
• “Three years from now, Google will look back and think that it was a good purchase."

20:00 New ventures

• “Really wanted to get back and felt there were opportunities in smaller companies.”
  
• “I felt like it was a fantastic time in the Internet…Unlimited capital available… The fundamentals of advertising, commerce and subscriptions, which are the three elements of the ecosystem, are all doing great.”

25:05 Start-up #1: Panther Express

• Content delivery network.
  
• “[A] sector that’s going to cross over $1 billion in revenue.”
  
• CDN’s are not a commodity; there is segmentation in the market.
  
• “We felt there was an opportunity for a very low cost infrastructure.”
  
• “Business is going to grow about 10 times from January to December.”

28:48 Keeping it lean: the benefits of a small office

32:30 Start-up #2: ShopWiki

• “We felt, as consumers, that there was a real need for an independent, consumer oriented shopping engine, a search engine for shopping.”
  
• Traditional shopping sites are not searching the whole Internet; “they’re just taking ads.”
  
• Most shopping sites search 6,000-7,000 websites; ShopWiki searches 180,000.

35:15 Time: the most limited resource

• “Prioritizing time is an inexact science but it’s very, very important.”
  
• “At the beginning of the week, I always list the three most important things and make sure that I spent enough time on those three things.”

36:40 Start-up #3: Music Nation

• YouTube meets American Idol.
  
• “Blown away by the traffic.”
  
• “Goal is not to have as many videos as YouTube. It’s to have fewer videos of higher quality.”

39:55 Best entrepreneurial locations

• Community is bigger in the Valley, but New York is closer to your customer base.
  
• “New York is the clear second to Silicon Valley”

42:17 Current health of the start-up market

• “I’m incredibly bullish.”
  
• “I think we’ve got another good five years of very significant growth.”

46:04 Start-up #4!

• “I’m going to launch another one this year in the e-commerce space.”
  
• “It’s in the women’s fashion space, in clothing, but you’ll see it’s a different twist on the business model.”

46:35 Advice to entrepreneurs

• “Don’t be afraid to take risks. Especially in the US economy, you’re not penalized.”

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VV Show #44 - Venture Voice Startup Workshop Coverage (part 2)

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Marketing a startup is tricky business. Every entrepreneur faces the dilemma between allocating time to improving the product and marketing the product. If the two can be mixed just right, then perhaps sterile marketing can go viral. We tackle that issue in part 2 of 3 of our very own Venture Voice Startup Workshop coverage in New York City. David Hornik of August Capital leads the session, but he doesn’t finish uninterrupted as the entrepreneurs on the panel jump in.

In this episode:
David Hornik of August Capital
Tom Szaky of TerraCycle
Dick Costolo of FeedBurner

4:30 Marketing, sales and PR

• According to Wikipedia, “Marketing is ‘human activity directed at satisfying needs and wants through exchange processes.’ I’m fairly certain that’s prostitution.”
  
• “All this stuff is about sales, PR and marketing, if you could avoid it altogether and just get the sales that would be great.”

12:30 Viral marketing

• “If marketing cost money, then viral marketing is free.”
  
• A virus “can’t be lethal because if you spread the virus and it kills you, you can’t spread it anymore. That’s just bad news… It has to be really fun. This is why venereal diseases are awesome.”
  
• “A venereal disease in a really attractive stewardess is a lot more valuable than a venereal disease in, say, me.”
  
• “Measure things.”

25:15 Best practice

• “The best bang for the buck is having a great product that’s highly viral and highly measurable, but if all else fails you can always sell crack.”

25:30 Q&A

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VV Show #43 - Fred Seibert of Frederator Studios and Next New Networks

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Before the rise of the Internet, cable TV was the new form of distribution remaking the entertainment business. Life-long entrepreneur and former jazz producer Fred Seibert pioneered that field, and is known in the industry for branding MTV (remember their ever-changing animated logo) and Nickelodeon (remember Nick-at-Nite). While he was figuring out what to do next, Ted Turner hired him to be president of the then-struggling Hanna-Barbera cartoon studio. Fred turned the famous studio around and kept his hand in the cable business until some friends dragged him into the Internet business. He now runs Frederator Studios which produces several cable and Internet TV shows. He also just launched a new well-funded startup called Next New Networks to create Internet TV networks.

1:30 Getting started as an entrepreneur

• Parents were “mom and pop business people,” they owned a pharmacy on Long Island.
  
• Started a jazz label with a friend at age 19.
  
• “I’ve never looked for a job.”

5:10 Criteria for selecting a business idea

• “I don’t have any criteria.”

6:30 Getting into the cartoon business

• Became a cable television exec in 1980 after being hired by Bob Pittman for a corporate startup that became MTV.
  
• “I’m less an executer than I am an analyst of things.”
  
• “I was a real dark horse candidate” for becoming president of Hanna-Barbera.

12:45 Creative types verses suits

• Hired the now-MTV Networks Chairman and CEO Judy McGrath as a promo copywriter in 1981.
  
• “I don’t know that I’m either.”

17:15 Fixing Hanna-Barbera

• “Hanna-Barbera had not had a hit since 1983 with the Smurfs.”
  
• “I took over Bill Hanna’s office.”
  
• “I was so scared.”
  
• On his first meeting with Ted Turner: “I talked with the guy for 15 minutes. In 10 minutes he was complementing my belt.”
  
• Producer role model: Fred Quimby.

34:00 The Internet

• “I had no particular interest in the Internet.”
  
• Ran MTV Networks online division but quickly left after lack of support from management.
  
• “We are the only major animation producer in the world that keep an active blog.”
  
• Launched online video shows Channel Frederator and VODCars to great success.
  
• Included Herb Scannell and Dennis Miller (not the comedian) in the discussion.
  
• “We like dependability, not predictability.”
  
• “Digital right management is for the birds.”

55:45 Starting Frederator

• Called “best favorite video friend” Jakob Lodwick of College Humor and was introduced to first employee Justin.

59:00 Content

• “It’s less about getting good content than understanding the marketplace.”

61:00 The value of Next New Networks

• “I learned a long time ago that when I laugh out loud, I got to find the guy that did it.”
  
• Business is right for working with someone like Dan Meth but maybe not Andrew Baron of Rocketboom.
  
• “What our venture is about is creating structure where anything is possible.”

67:00 Bad blog reception

• Snarky posts on Next New Networks: VentureBeat, GigaOM and PaidContent.
  
• Characterizing the blogs' reaction to his company: “Here’s some fat old guys.”
  
• “We’re out of the club.”
  
• “The two most important partners are 30 years old.”
  
• “If you saw the nasty things people wrote about us when we were doing MTV…”

73:30 Starting a company

• “Starting a company is always the same.”
  
• On starting businesses: “I think I’ll do that until I drop.”
  
• “I don’t think there’s any confusion or adversity unless you’re confused and adverse.”
  
• Quotes and recommends Adventures in the Screen Trade by William Goldman: “In Hollywood, nobody knows anything.”

Fred’s book: Original Cartoons: The Frederator Studio Postcards

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VV Show #42 - Simon Daniel of USBcell

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The battery is an afterthought for most inventors. All the fun seems to be in developing a device, not in powering it. But when was the last time you cursed your phone, camera or podcast player because it ran out of batteries? Simon Daniel got fed up with his batteries, and decided to do something about it. He invented the USBcell, a standard sized battery (yes, it comes in AA) that can recharge using any USB port. This isn’t his first invention. Previously, he invented the folding keyboard and licensed the technology. This time he’s bringing the USBcell to market himself through the company he founded called Moixa (axiom spelled backwards). Though this might force you to think differently, don’t worry, we won’t play the podcast backwards.

1:00 Working at IBM’s scientific center at Winchester between before college

3:15 Went to Christ College at Cambridge University

• Same year as Sasha Baron Cohen

5:15 Worked at Anderson Consulting (now Accenture)

10:00 Jumping ship to start a new venture and modern art

• Came up with folding keyboard in mid-1990’s
  
• Licensed to Think Outside

13:45 Taking action on an invention

• “We tend to file a patent on the way to make something rather than the generic idea of something.”
  
• “If you just write down the idea itself and don’t do the work, then the patents you get from just doing that stage aren’t that useful.”

18:00 Being too early to market

• “It’s like having a very good joke which is really funny in two years time when there’s a political situation which is right for it.”

21:00 The company

• “The word Moixa is the word axiom backwards.”
  
• “Rethinking a fundamental assumption.”

24:00 Financing strategies

• “Ideas should wash their own face pretty quickly.”

26:00 USBcell

• On traditional battery chargers: “It’s somewhere you’re not.”
  
• “It’s that kind of constrained environment that sometime you get an instant solution…”

36:15 Marketing

• “There was no way we could create a budget to outspend the traditional battery companies.”

46:30 Entrepreneurship in the UK

49:15 Goals for 2007

51:15 Capitalizing on invention

• “Timing is a thing you have to get right.”
  
• “The value of the innovator keeping away is fundamental.”

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VV Show #41 - Premal Shah of Kiva

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Premal Shah believes your last name doesn't need to be Gates or Rockefeller in order to make a real dent in global poverty. After leaving his job as a Principal Product Manager at PayPal, it has taken Premal less then a year to make good on Kiva's pledge that all it takes to become a micro lender is a credit card and access to a computer. Raising money "Howard Dean Style" from over 13,000 online lenders, Kiva has provided more than a million dollars in low-cost working capital to small-scale entrepreneurs in less developed countries from Bulgaria to Uganda. The site boasts high repayments rates and soon hopes to offer lenders interest. We talk to Premal about how working in Silicon Valley has shaped his approach to combating poverty, how he believes the market "bakes in psychic and emotional returns," and how the power of online communities can strengthen the world of micro credit.

Episode producer: Koshlan Mayer-Blackwell

1:35 The pitch: why micro-lend?

• "[Imagine] a woman in Kenya who has a small piece of land. If she had eighty dollars for an irrigation pump she could actually get more productivity out of the land and increase her income from maybe $120 to $1200 a year."
  
• "She can't go to a bank…she is asking for such a small amount of money that it is not really profitable for a bank to serve her. "
  
• "And [micro lending] is not a donation or a handout, because the repayment rates are 95 percent plus."

3:15 When PayPal was no big deal

• "I left management consulting in New York and came out to a small company called PayPal in Silicon Valley"
  
• "At the time it was very small and people, by and large, still thought it was a joke of a company ("what do you mean I am going to email money to friends?")"

4:10 When "the ship" gets too big, just get back to entrepreneurship.

• "What would the intersection of the things I know and love look like? PayPal, eBay, micro finance. What would it look like if they were all blended together? And that's where Kiva.org came into play."

8:44 Entrepreneur lesson

• "I think one big lesson in entrepreneurship is that you just have to get started. Get a product out there and see how the world reacts."
  
• "The biggest danger is spending a lot of time doing a lot of analysis and PowerPoint: lining up all the duck before you even get started."

10:00 Repayment: No Problem

• "The women actually monitor each other and the repayments, and if one of the women defaults on the loan, they will all be penalized by not being able to receive more loans in the future."
  
• "And this reputational collateral and peer monitoring helps keep the repayment rate at 95 percent plus, which is better than credit card portfolios in the U.S. "

10:55 "Howard Dean Style"

• "The average loan size is $73, so it is very Howard Dean style. What I think is interesting is that no one user contributes more than 1 or 2 percent of our total loans raised."
  
• "We believe in grassroots capitalism. How do we get the masses to participate in poverty alleviation, based on mutual dignity with the business that they have sponsored?"
  
• "…our goal is to sign up as many users as possible, getting them to donate 25 dollars at a time and learn that the working poor are actually good credit risks."

12:40 A Favorite Loan

• "Essentially we aggregate funds from across the internet…we pass 100 percent of the loaned funds to intermediary microfinance institutions that are out in the field (say in Kenya, Uganda, Honduras, Senegal)"
  
• "What is exciting about Kiva is that it makes the lives of entrepreneurs transparent."
  
• "A guy in Bulgaria who started a bike shop. He got a $500 loan to start, and to promote his bike shop he started these bike racing competitions."

15:30 Zero percent Interest Rate: that does not sound like a good business to be in?

• "So we are a non-profit and today we are offering zero percent, but what we would like to do is to let interest rates float on the website."
  
• "I think it would be exciting to let people earn a rate of return where they were financially indifferent between Kiva where they are changing somebody's life, and their bank account (on a risk adjusted basis). I think that is possible."

18:40 User-Generated Metrics

• "We think for the first time in history, we will actually be able, through the wisdom of the crowds, to rate each microfinance institutions and the transparency on the site."
  
• "We will actually be able to bake into the financial price the social value creation."
  
• "Through letting the community rate the Internet community rate each loan, just the way you can rate a video on
• YouTube or a photo on Flickr, we think we can create a quantitative metric on social value."
  
• "The lender can weigh the metric on social value as well as the financial return as well as the repayment likelihood and those three variable will help us to create a market where capital can get to the best lending institutions…"

19:35 Transparency is Key

• "If you can be transparent about how the money is being used, be it through MySpace-type profiles, it can motivate a lot of people to participate."
  
• "People want to change the world they just want to know that it is done effectively."

20:20 Can a picture tell a thousand lies?

• Greg: "In the book Blink, Malcolm Gladwell cited a story about why there were no women on the New York Philharmonic. People had all these theories that women didn't have the same hearing or weren’t wired just right. Then, unrelated they put screens between the performer and the people listening to the recitals, and all of a sudden, women started to get onto the Philharmonic …do you worry that photos will get to people's prejudices and not lead to as an efficient of a lending market if you focused the information on more hard numbers?"
  
• "And if they weigh not only financial return and social impact, but also emotional and psychic return, that should be baked into the price."
  
• "A Kenyan is ten times more likely to be funded then a Bulgarian. A Kenyan is 4.6 times more likely than a Cambodian."
  
• "I think that is just fine. The goal is to make it as transparent as possible and see where the capital shakes out."

30:10 Corruption

• "Kiva understands that [corruption] is a fact of life, and our goal is to create as transparent of a platform as possible."
  
• "Creating an online platform where people an actually blog about [failures] to achieve a level of trust... that's critical."
  
• "Loans are an information exchange, as opposed to donations, meaning when you loan your money and you get your money back, you know that something has happened. You know that there is some progress being made that has allowed for that entrepreneur to repay."
  
• "The accountability on each dollar that is donated versus the accountability on each dollar lent. There are just two different stories there."

Posted by greg at 8:28 PM | Comments (8) | TrackBack

VV Show #40 - Reid Hoffman of LinkedIn

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Real business networking takes place in the country club, at the chamber of commerce and on the golf course. After all, the Internet is just for friending strangers on MySpace and poking friends on Facebook. If you said all that to Reid Hoffman, he might think twice about adding you as a contact in LinkedIn, the business networking site he started that connects over seven million professionals. Although his Palo Alto-based company is now profitable and growing rapidly, Reid still thinks he has yet to hit the tipping point. Reid’s goal wasn’t always to be an entrepreneur: He just wanted to change the world. His original career choice was “public intellectual”. Hear if his career switch is paying off.

1:00 Surprising beginnings

• "When I graduated from Stanford what I wanted to do was be a public intellectual, and at the time I thought it was someone who writes essays for the 'New York Review' or 'The Atlantic Monthly'"

2:00 Advancing career

• "And what I realized was if you actually look at software and online services as media objects that could do this, you could go create really valuable media objects that would have a much deeper transformative effect on society..."
  
• "So I went and talked to a few VC's in the fall of '93 when I first came back [from school at Oxford] and they said
• 'Go get a job and then when you've learned some things come back and talk to us.'"
  
• "So I went to Apple computer"
  
• "And did my first startup, Socialnet, in 1997"

6:00 On financing a start-up

• "Basically if you can't get enough capital to get your business off the ground, and usually it's a successive set of influxes of capital, your business fails, and it goes away"
  
• "Venture investment is like marriage, on two power point presentations and a dinner"

8:00 Paypal, lessons learned

• "There was a time at Paypal where we were growing at five percent of transactions per day, and we had three customer service people"
  
• "We were going in the hole about 8000 e-mails a day in terms of e-mails we weren't responding to."
  
• "We had people find out the address, and drive to our office in as far away as Arizona...to deal with customer service."

14:00 On LinkedIn

• "Part of the theme of the internet is essentially power to the people."
  
• "Enabling individuals to have the best possible lives they can is one of the things that's really interesting with the net"
  
• "And LinkedIn, it's every person as a professional can hang a shingle to the web and they can say what kind of business they're interested in doing and then they can find other professionals either that they already know or they wanna get to know in order to connect with them and build business."

18:00 Business model advice

• "One of the things that I tell entrepreneurs and investors, especially if you're in consumer internet, is I have yet to see a series A business model be the business model at the end of the company"

20:00 Target market

• "Our principal customer base is kinda like 27, 28, plus"
  
• "So unlike for example Myspace, or Facebook or Friendster which is 'Wow! A place to play with my friends and I have lots and lots of spare time...' its a 'Prove to me you're valuable.'"

27:00 Delivering value

• "If you go up to your average professional on the street right now and you say 'Well you should have a profile out on the web, stating who you are and what kind of things you do,' most professionals are gonna look at you like, 'Huh, really?' Like it hadn't really occurred to them."
  
• "People care a lot more about their professional contacts than they do about their social contacts"
  "Take the word networking. To most people, networking is a vaguely negative cause it connotes people who say
• 'Can I have your business card? Can you help me?' As opposed to 'Can we help each other?'"

36:00 How LinkedIn works

• "What reference is supposed to be is I refer you to someone based on what I know about you, on my ability to say 'Oh he's a good person, he's hard working, he's trustworthy, he's honorable, he's diligent, he's a close friend of mine, do me a favor...'"
  
• "Better people should be able to create shinier shingles"
  
• "The people that you think are smart and interesting, there's a much higher percentage of the people that they're hanging with are smart and interesting. So, same principal on LinkedIn."

41:00 Web 2.0

• "Launching something is a lot cheaper than it used to be"
  
• "But, on the other hand there's lots more interest."
  
• "Actually if you have a thousand people going out launching shit, for 100k or 200k, the one that can raise 5 million and deploy that effectively has a huge competitive advantage."

43:00 Advice to entrepreneurs

• "Entrepreneurs: it's never a sit in a room and create something by yourself, you're out there in the flow"
  
• "Your idea isn't anything until it starts going, right? Ideas are great -- but traction, reality, launch something, get customers. So LinkedIn is useful for finding all the right people that will support your effort."
  
• "In Silicon Valley, my guess is 95% plus of the people who are pitching venture people are in LinkedIn."

Posted by greg at 11:30 AM | Comments (4) | TrackBack

VV Show #38 - Jason Calacanis of Weblogs Inc., Netscape and AOL

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There are not many entrepreneurs who have spent their entire 10-year careers starting new ventures in online media, but Jason Calacanis just can’t help himself. Jason rode the dot com wave in New York by starting Silicon Alley Reporter. His publishing company Rising Tide Media grew to $12 million in sales. Unfortunately Jason also rode that wave down after the bubble burst. He ended up selling his first business to Dow Jones for a lot less money than he could have gotten before the crash. Undeterred, Jason started Weblogs, Inc. to make money by selling ads in blogs they pay people to write. In only 18 months he grew the business to a point at which AOL (TWX) bought it for a reported $25 million. Now he’s re-launched Netscape as a news website where users vote for what’s important. Jason’s caused a lot of controversy by paying top users of competitive sites such as Digg (whose CEO Jay Adelson was on our last show) to switch to use his service. Hear what’s been driving Jason’s entrepreneurial career.

2:00 First company: Rising Tide Media

• “It became a $12 million a year business.”
  
• “You don’t sleep so well those first couple of night when you’ve got two grand on your credit card and you got to pay it back in a month and you have AMEX calling every week.”
  
• “I was in the right place at the right time.”
  
• “A big part of success is not just execution but picking what beach to go surfing on.”
  
• “When you’re in an up market everyone looks like a genius.”

7:00 Personal style

• “I’ve been given this whole persona of being bombastic.”
  
• “You have to detach yourself from the things are you create as an entrepreneur.”
  
• “I think being delusional and stubborn is a really great quality for an entrepreneur.”

16:00 Starting Weblogs Inc.

20:30 East Coast vs. West Coast entrepreneurship

• “I’ve never been really a ‘valley guy.’”

28:30 Building an ad sales force

• Pays ad salespeople only with commission.

34:00 Re-launching Netscape

• “We didn’t launch it to compete with Digg.”
  
• “If we kill Digg or beat Digg, that would be failure for us.”
  
• “We were on our way to building a social book marking site. We weren’t going to call it Netscape, we were going to call it something else.”
  
• “Anyone can make a Digg clone in a weekend.”
  
• “It was always in the plan to hire bookmarkers.”

43:15 Doing business in social media

• “I e-mailed Jay about it and I said ‘Jay, please don’t call me a thief when you in fact were inspired for your site by [del.icio.us].’ He actually wrote me back a nice note and said we’ll tone it down.”

45:00 Should users get paid?

• “I’m going to cost people money with this idea” to pay users.

50:45 Dialog with Digg

52:00 Social news industry

55:15 Working for AOL

• “I don’t really answer to anybody at AOL.”

Photo credit: JD Lasica

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VV Show #37 - Jay Adelson of Digg

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Digg, the news website that uses its own readers rather than editors to decide what stories are most important, has been growing with a fury. While founder Kevin Rose has gotten a lot of attention including a recent cover of BusinessWeek, CEO Jay Adelson has been guiding Digg toward business success. This isn’t Jay’s first time though the throes of entrepreneurship. He started Equinix, a company that now has a market capitalization of $1.5 billion. Despite its success, Jay didn’t make much money because he held his shares until after the dot com bust. In fact, he had just enough money to put his kids through college and live a more modest lifestyle himself. He was ready to go off and work at a coffee shop or become a teacher until Digg came along. Now he’s back in the game.

2:00 Early career

• “I was focusing on sound engineering. I thought I would do that for the rest of my life.”

5:00 Entrance into entrepreneurship

7:15 Co-founding Equinix

• “I over delegated.”
  
• “I wanted people with experience doing very big things.”
  
• “I wanted [Equinix] to be a billion dollar company, sure, but I think I wanted it to be something that was a little less commodity focused.”
  
• “I’m extremely proud of what happened with that company.”
  
• “I’m never satisfied with myself.”

19:00 Between ventures

• “I drive an eight year old car. Never got the sports car or Ferrari.”
  
• “Unless you’re truly incompetent, it’s really hard to set yourself up so that you’ll never get investment capital again.”
  
• “There are a lot of people who confuse good ideas and good businesses.”

24:00 Quitting entrepreneurship

• “I could get by at this point with a much lower class lifestyle. We made the decision to leave
• San Francisco and move to rural New York.”
  
• “I just kept trying to help him [Kevin Rose] change what was a good idea into a good business.”

28:00 Starting Digg

• “One thing was clear from our perspective: We couldn’t charge users. That would never fly.”
  
• “It wasn’t too hard for him [Kevin Rose] to convince me to come on as CEO [for Digg].”
  
• “Kevin was never satisfied with the specification.”
  
• Digg went live in December 2004.
  
• “Probably less than $5,000 had been spent before the site was public.”
  
• “If I don’t handle the growth, then I’ll implode.”
  
• “He [Kevin Rose] literally is the chief architect of Digg.”

41:30 Virtual business

• Uses http://www.apple.com/isight/ iSight frequently to run Digg.

43:30 Worst business decision at Digg
45:30 Business model
47:00 Biggest competitor

• “My biggest competitor is probably someone I haven’t met yet.”
  
• Competitors: Reddit, Newsvine and Netscape
  
• “They [Jason Calacanis's Netscape] even copied the look and feel.”
  
• “I don’t believe that we should be compensating any Digg user for their participation.”

60:00 BusinessWeek cover

• “Kevin Rose did not make $60 million. He did not have that cash. That was completely invented.”

62:00 Business capitalization

• “I’m not feeling the pressure [to raise a lot of money].”
  
• “What happened to the days when I could just focus on building the business?”
  
• “At Equinix I never sold my stock, and oops. Oh well.”

68:30 The future of Digg

• “The best I can tell you is Digg as a concept can be applied to other content aside from news. Just wait and see what we’re going to apply it to.”
  
• Closing on funding round for Revision3.

Posted by greg at 1:14 AM | Comments (5) | TrackBack

VV Show #36 - Venture Voice Startup Workshop Coverage (part 1)

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If there are best practices in entrepreneurship, you’ll hear the secrets to them in this coverage of the first half of the recent Venture Voice Startup Workshop in New York City. If there are in fact no best practices for entrepreneurs, then you’ll at least enjoy the heated discussion about how entrepreneurs should navigate the startup seas. These passionate speakers fielded a day’s worth of questions and opinions from Venture Voice, each other and the spirited audience. The results are distilled ideas about what it takes to win in business, great war stories and even a few laughs.

3:00 Topic: Partnerships

• Jeanne Sullivan: “I’ve had an e-mail address since 1980.”
  
• David Hornik: “I hate my partners.”
  
• JS: “I believe the CEO is the most important person on the team.”
  
• Dick Costolo: “A lot of people refer to these ‘Barney partnerships’, where you just agree to like each other, write each other down as partners, and hug.”
  
• Scott Heiferman: “One general rule is to not have rules.”
  
• SH: “Don’t necessarily listen to panels like this if they give you a general rule.”
  
• DH: “Never do deals that your venture capitalists tell you to do.”
  
• DC: “Google could build a space station if they wanted to. Of course they could build FeedBurner.”

20:20 Topic: Getting and keeping customers and users

• SH: “If there’s one message to get across to help you focus your thinking and what it is you’re doing, it is the basic understanding that people are confused.”
  
• SH: “People are not waking up in the morning and saying ‘I want to generate content today.’”

29:45 Topic: Building a team

• DC: “You can’t have a big circle at the top with three randomly floating folks unless you’re Google.”
  
• DC: “Sell the hardship… If you’re working for a startup: Sucky hours, low pay, with potentially no benefit.”
  
• DC: “You pay ten times over for bad hires.”
  
• JS: “I’ve become really good at firing.”
  
• DC: “Having the open space is great for team building.”

Hear from the rest of the speakers in part 2 of this series, coming soon.

View photos from the event.

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VV Show #35 - Sharelle Klaus of Dry Soda

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While many restaurants offer dozens of wines, beers and mixed drinks, there are few non-alcoholic options on the menu. Former dot-com entrepreneur and self-described foodie Sharelle Klaus was fed up with her lack of beverage options during the time she was pregnant with her four children. She decided to create the first line of “culinary sodas,” which are less sweet and more sophisticated than sodas like Coke or Pepsi. Based in Seattle, Sharelle’s now peddling her soda all across the country and already has traction in several markets.

Show notes:

1:45 Entrepreneurial streak as a child

• “My dream was to get into politics.”
  
• “It was going to be too slow.”

3:45 Consulted on privatizing airports

• “It didn’t really take.”

5:15 Had two children

5:30 Getting into the internet business

• “At that time the Internet didn’t have much, I remember it was like Yahoo and porno sites.”
  
• Founded PlanetSquid in 1999.
  
• “The bubble burst, and do did ours.”
  
• “I knew that I would never, ever, start a company again that didn’t have a clear revenue stream.”

8:30 After the bubble

• Became president of the Forum for Women Entrepreneurs.

11:15 Going into the beverage industry

• “I was able to break a lot of rules… because I didn’t know any better.”
  
• “I’m building a brand here.”
  
• “Sometimes I say it’s good to be a dumb blond.”

13:30 Coming up with the idea for Dry Soda

• “I go out to eat a lot, but I also have four children, and because of that it’s really been half my life I haven’t been able to drink alcohol.”
  
• “We want Dry to be an event.”

15:30 Executing on the idea and starting Dry Soda

• “I just tapped into everyone I know.”
  
• “I did at least a thousand tests on each flavor.”
  
• Sharelle’s lab was “was probably a thousand dollars total.”
  
• “Chefs love it.”
  
• “I was trying to do all of this for what at the time I thought was going to be $50,000.”
  
• “We’ve ended up being able to capitalize the company with $100,000.”

25:30 Launching the company

• “Within four weeks it was in like 30 of the top restaurants of Seattle.”
  
• After not being able to find a distributor, “I went myself into all the high end restaurants.”

29:00 Current state of Dry Soda

• Full West Coast distribution.
  
• Sold 24,000 bottles.
  
• “We don’t skew as female as I thought we would.”
  
• “We should be nation wide in the next 12 months.”

38:30 The market

• “There’s a great new market and it’s called the adult soda market.”

39:30 Funding

• Oversubscribed for first round of $750,000.

44:00 Team

• “Everybody comes with some great beverage experiences but not so much that they’re jaded.”

Posted by greg at 11:15 PM | Comments (5) | TrackBack

VV Show #34 - David O. Sacks, Co-Founder of PayPal and Producer of Thank You For Smoking

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What do you do after building and selling a business for $1.5 billion in the course of only a few years? That’s the question David O. Sacks, one of the co-founders of PayPal, faced after eBay bought his company. It didn’t take him long to find the answer: Go to Hollywood and make movies. David didn’t waste much time. He recently produced Thank You For Smoking which won critical and audience acclaim. Now you can hear about his journey and get his unique perspective on the convergence of media and technology.

1:30 Clip from Thank You For Smoking

2:45 Interests at Stanford

• Graduated in 1994
  
• Went to Law School: “The default path for people who are smart but don’t know what to do with their lives.”
  
• “I thought I missed the whole Internet boom.”

4:10 Coming back to Palo Alto in 1999

• “When I was in school there, Palo Alto was a pretty boring, sort of yuppie town.”
  
• “There’s just this whole sense of a crazy, money-soaked, carnival frenzy in the air. And about six months later it crashed.”

6:30 Getting involved with PayPal

• Original idea for PayPal: Beaming money from Palm user to Palm user.
  
• “In fact, I think PayPal was voted the worse VC-backed idea that year.”
  
• “I originally came on board being the vice president of strategy, which was a licence to interfere in any part of the company I wanted to.”

8:00 Winning with PayPal

• “If you didn’t have a good product, you didn’t have anything.”
  
• “There were all these companies out there running around making lots of business deals. The problem with that is you can make deals all day long but if you don’t have a great product that attracts users and does something they want to do, it’s all pretty much irrelevant.”
  
• “What I really started focusing my time on was figuring out how to make PayPal a really simple, intuitive application for people who wanted to send money online.”
  
• “What was different about PayPal, and I know it seems really obvious, is just that we decided we were going to be based on dollars -- were weren’t going to try to create a new currency, we thought dollars worked really well -- and we’re going to make it really simple and intuitive to use, so there’d be nothing you’d have to download on your end.”

11:00 Relationship with eBay

• “[PayPal] essentially compressed the amount of time it took for a buyer to complete the transaction from two weeks to a minute. And that tremendously accelerated the volume of commerce on eBay and was very beneficial for them.”
  
• “At the same time eBay kind of felt like they didn’t own their own cash registers.”
  
• “For about two years PayPal and [eBay-owned] BillPoint competed head on and eBay users stuck with PayPal.”
  
• “It was very intense.”
  
• “[PayPal] is the fastest growing financial service, I think, ever in history.”

15:30 Surviving

• “We really believed in Andy Grove’s Only the Paranoid Survive.”

18:00 Exit

• “I did reasonably well.”

25:00 Moving from Silicon Valley to Hollywood

• “Hollywood’s very notorious for taking those people’s [people who come from outside the movie business] money and then emptying out their pockets and sending them on their way.”
  
• Set up Room 9 Entertainment.
  
• “This company’s read over 1,500 scripts.”
  
• Produced Thank You For Smoking based on the Christopher Buckley book of the same name.
  
• Worked with first-time director Jason Reitman.
  
• “It’s been about 10 years in Hollywood development hell.”

29:30 Producing Thank You For Smoking

• “Spin is a way of protecting us from political correctness.”
  
• “On some level, people want their vices.”
  
• “That’s the fundamental hypocrisy: We want these vices but we’re not willing to take responsibility for them.”

Clip from Thank You For Smoking:

33:00 The message of the movie

• “I think the common denominator between the movie and the other things I’ve done in my career is there probably is a somewhat libertarian bent to them.”
  
• “One of the things animating PayPal is the thought that we can make the world freer by creating a frictionless monetary system.”

35:30 Ambition

• “We are going to look at some of the places were you’re getting technology and media converging.”
  
• Interested in companies like MySpace and YouTube.
  
• “They call them disruptive technologies.”

39:30 Cities of disruption

• “If I had to bet on Silicon Valley vs. Hollywood in terms of shaping future of entertainment, I’d probably bet on Silicon Valley just because that’s what it does.”

41:40 David’s movie and angel career

• “You want to work with people who are under recognized.”
  
• Making a movie about Salvador Dali.

See you at the Venture Voice Startup Workshop.

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VV Show #33 – Announcing the Venture Voice Startup Workshop

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Venture Voice has been illuminating entrepreneurship through the podcast for just short of a year. Now, at the Venture Voice Startup Workshop on June 26 in New York, you can interact with top entrepreneurs and venture capitalists to find out how to start and grow innovative businesses. Venture Voice, a podcast known for asking the hard questions about entrepreneurship, brings together highly successful speakers who’ve gotten their hands dirty growing businesses. This full-day event will be intense. Participants will leave with tactical knowledge about growing a business and with the inspiration to do so.

Tune in to this podcast to hear audio clips from some of the people who will be speaking at the workshop.

Posted by greg at 10:57 PM | Comments (1) | TrackBack

VV Show #32 - David Sifry of Technorati

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Starting a service aimed at the blogging community is like jumping into a pressure cooker – all of the users are critics and have bullhorns. Good thing David Sifry, the founder of Technorati, has a thick skin he’s built after founding four businesses. He’s not one to go on the defensive. Dave, a first time CEO after serving as CTO at his prior ventures, simply wants to “be of service.” Technorati is now of service to many people. It tracks 2.3 billion links and is, in its own words, “the authority on what's going on in the world of weblogs.”

Show notes:

1:35 Starting career as engineer

• Worked for Mitsubishi Electronics in Japan.
  
• “I was the first foreigner to come into my factory in 17 years.”
  
• “Being a cog in someone else’s big wheel just wasn’t for me.”
  
• “I’m not an engineer.”

5:45 Learning not to engineer

• Started Linuxcare (now Levanta) in 1998.
  
• “Somebody had to pull my fingers away from the keyboard.”
  
• “Different people react differently under stress. You don’t want to hire a group of people who all react the same way when they get stressed out.”
  
• “You can’t just delegate responsibility. That’s only half the battle. You have to delegate authority as well.”

12:30 Authority and responsibility

• “If you can’t say ‘no’ then what’s the point of saying ‘yes’?”

16:45 Past ventures

• Started first business at age 16 in high school and helped to pay way though college.
  
• First business: Secure Remote.
  
• “You can plan yourself into failure.”
  
• Second business in 1998: Linuxcare.
  
• Third business: Sputnik.

20:15 Motives for starting Technorati

• “I think I’m just weird.”
  
• “I love doing what I do.”
  
• “That’s our mantra: Be of service.”
  
• “I firmly reject the notion that the primary reason for companies to exist is to make a profit.”

26:30 Purpose and profit

• “I sleep like a baby.”

29:45 Dealing with competitors

30:15 Scrutiny of bloggers

• “I work in a business where satisfied customers walk around with bullhorns.”
  
• “And I also work in a business where unsatisfied customers walk around with bullhorns.”
  
• Reason Technorati had growth troubles: “We forgot to buy hardware.”
  
• “I forgot to sign the order to buy more machines.”
  
• “I just screwed up. Mea culpa.”

37:00 Getting the word out

41:15 From CTO to CEO

• “Far more important than the technology you have is the team that you build.”

43:00 Sticking with Technorati

• “I can’t believe they actually pay me for this.”

Posted by greg at 12:24 AM | Comments (7) | TrackBack

VV Show #31 - Steve Hindy of The Brooklyn Brewery

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Being robbed at gun point and being threatened by the mob are not problems the average entrepreneur encounters. Steve Hindy faced these problems and more, but what concerned him most was the fate of his brewery. Steve started the Brooklyn Brewery with Tom Potter. Steve was a journalist and foreign correspondent. Tom was a banker. Neither knew a thing about starting, much less running, a brewery. With grit and determination, they stared down bankruptcy and made it work. In 2003, they sold their beer distributorship for about $10 million. Now Steve’s focused on the brewery (which is doing about $12 million in revenue and has become a global brand) and on the community.

Show notes:

2:45 Starting career as a journalist and AP foreign correspondent

• “Somehow I got it in my head I wanted to cover a war.”
  
• “I was sitting behind President Sadat when he was assassinated in Cairo.”
  
• “Foreign correspondents tend to develop some pretty bad personal habits, much worse than beer salesman I can attest.”

7:30 Getting the idea for the Brooklyn Brewery

• “Entrepreneurship really takes all the creativity and all the resources that you have.”
  
• “I didn’t have the greatest resume for starting a brewery.”
  
• On convincing his partner Tom Potter: “When I suggested we start a brewery, he thought I was nuts.”
  
• On partnerships: “Misery loves company.”

17:30 Being in Brooklyn

• “Yeah, it was very difficult. We were robbed at one point. We had drivers who took off with our trucks. Our last year in business we spent $60,000 on parking tickets.”

20:00 Dealing with investors

• “We didn’t want to sell our friends down the river.”
  
• “What I learned about business is that a lot of people do sell their original investors down the river.”
  
• “In a lot of companies, people on the ground floor get crushed by the people on the floor above, or maybe the fifth floor above, who put in the right money at the right time.”

23:30 Building the team

• “I think early on, one of our best moves was finding a designer who could really do justice to the name Brooklyn.”
  
• Recruited Milton Glaser (who designed the I Love New York logo) to create the Brooklyn Brewery logo.
  
• “The first time I called there [Milton Glaser’s office] his secretary kind of blew me off.”

28:00 Selling the distributorship

29:00 Entrepreneurial terror

• “First time I read that I was just giddy with laughter, maybe nervous laughter.”
  
• “We were scared out of our wits early on.”
  
• “We got robbed at gunpoint at one time. We ended up emptying the safe of $30,000 cash to guys with pistols. And we had a run in with some mob types here in Brooklyn when we were building the brewery who basically were looking for bribes to allow the project to go on. But none of that was as scary as facing the possibility of failure, which is to me the most scary possibility.”
  
• “We’re just very determined.”

35:45 Turning point

• “We left behind the fear of total failure probably about 1995.”

39:45 Brooklyn Brewery today

• “Last year we grew by 18%.”
  
• “Craft beer as a whole grew by 9%.”

42:30 In the community

• “Having a high profile in the community has gotten us into trouble every now and then.”
  
• Brooklyn Brewery has supported Bruce Ratner’s plan to build an arena for the Nets in Brooklyn. Some bloggers called for a boycott of the Brooklyn Brewery as a result.
  
• “Brooklyn is a wonderful place -- two and a half million people. But it’s also a poor place. It always lags behind the city in employment. Brooklyn needs housing. It needs affordable housing. And Ratner has big plans for affordable housing in this new development.”
  
• “We have no regrets about supporting this.”
  
• “The boycott has not had any impact on our sales.”
  
• “No good deed goes unpunished. That’s something you got to face up to if you’re going to be involved in the community.”

Steve and Tom wrote a book about their experence called Beer School.

Posted by greg at 12:05 AM | Comments (7) | TrackBack

VV Show #30 - Scott Johnson of Ookles

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Scott Johnson is a long-time entrepreneur on the bleeding edge of technology. He started his first business in 1987 and successfully sold it. Then he rode the dot com wave up and down with Mascot Network, a company that was trying to do what Facebook does now by providing online communities for college students. Most recently, he started Feedster, which after a lot of early traction ousted Scott Johnson and the CEO he recruited. Now he gives us the exclusive on the mission of Ookles, his new company.

Show notes:

1:30 Early career

• “When you grow up in family business you have one of two options in your life, I firmly believe. You either work for your family or you get pissed at your family and you go out on your own.”
  
• “I was full of piss and vinegar.”
  
• Started a hypertext software company and sold it.

5:15 Worked for Mascot Network in 2000, a company that was similar to what Facebook now is

• “If you’re going to appeal to college students, you’ve got to have subversive, viral content.”
  
• “It was a wild dot com ride.”

11:00 Time in transition and entrepreneurial ideas

• Left Feedster on 12/15/05.

15:00 Starting Feedster

• Got into blogging because of Dave Winer.
  
• Co-wrote the book Essential Blogging with Mena Trott and others.
  
• “A good day for me is getting up and programming for like 15 hours.”
  
• Started company on 3/03.
  
• Was funded by Marco DeMiroz of Selby Ventures. (This same firm funded Sharpcast which we covered at DEMO.)
  
• Competed with Dave Sifry’s Technorati, which raised far more money than Feedster did.
  
• “Dave’s wicked smart.”
  
• Brought Scott Rafer on as CEO.

31:00 What happened at Feedster?

• “I don’t think I’m allowed to say” what happened at Feedster.

34:00 New venture: Ookles

• “Next generation Flickr”
  
• “Photography takes on a whole different dimension when it’s of your kids.”
  
• “Flickr’s incredibly cool, but I sort of wonder if they don’t perceive photography in the same way because it’s more of a cool thing for cool people as opposed to a really important thing in their life.”
  
• “Ookles is full buzz word compliant.”
  
• “I’ll try to suck Robert Scoble into [using] this.”
  
• “You want to attract bloggers, even though they’re not exact target audience, but because they’re the equivalent of the 1980’s power users.”

44:00 Burn rate and market analysis

• “Our explicit burn rate is less than say $3 grand a month.”

53:30 Making money

• “I’d have no problem telling you if I was ready to do it today. I’m not.”
  
• “It’s not pay per click advertising.”

55:00 Geography

• “It’s vastly more expensive to live in the Valley.”

58:00 Outro

Photo credit: Scott Beale

Posted by greg at 12:39 AM | Comments (7) | TrackBack

VV Show #29 - Shoba Purushothaman of The NewsMarket

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Shoba Purushothaman’s career has shifted dramatically since she started her first job as a business journalist in Malaysia. After spending several years working for the Wall Street Journal and Dow Jones Newswires, she grew restless just covering how the world was changing. She wanted to influence it. Shoba co-founded a public relations consultancy that helped corporations ride the wave of change brought on by the rapid expansion of television news. She saw first hand how inefficient video distribution was, so in 2000 she sold her first business and started The NewsMarket to make video distribution simpler. Though she weathered some tough times in 2001, she’s managed to build the company to millions in revenue and recently closed on a $12 million venture round.

Show notes:

1:40 Starting career as a journalist

• Grew up and started career in Malaysia.
  
• Worked for the Wall Street Journal in Washington DC.

8:10 Getting out of journalism and into business

• “I was taking a substantial pay cut.”
  
• “It took me two years before I could admit that I was no longer a journalist, that I had crossed over to the dark side.”

12:00 Taking advantage of the television news revolution

• “Most of our sales, and most of the sales that I’ve personally done, has been cold calling -- not networking driven.”

16:15 Selling to Fortune 500s

• “We often have situations where somebody refuses to take a meeting for a long time because they don’t believe that you have value and then they finally take a meeting and they go ‘wow, why didn’t I take a meeting earlier?’ Those experiences are hard to beat.”

21:00 Starting The NewsMarket

• “Probably the hardest thing for us was raising money.”
  
• “I have no doubt that it was harder to raise money then it was to win customers.”

29:00 Current state of The NewsMarket

• Revenues are in the millions.

30:40 The explosion of video on the web

33:20 Deal with Google

37:00 Rise of user-generated content

39:00 Entrepreneurial opportunities in video

41:50 Outlook for the future

• “I believe the opportunity for video is enormous.”

46:00 Advice for entrepreneurs

• “There are so many things out there that we’re doing that can be improved.”

Venture Voice updates:

48:15 Feedback from last show with John Bogle

49:15 Past guest Scott Heiferman’s Meetup.com announced that it received an investment from eBay

Posted by greg at 4:28 PM | Comments (2) | TrackBack

VV Show #28 - John Bogle of The Vanguard Group

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If you’re making lots of money in a fat industry for doing relatively little, then the last thing you want is a competitor like John C. Bogle. He founded The Vanguard Group in 1975 and revolutionized the mutual fund industry by slashing management fees. By creating the world’s first index fund, John showed investors they could invest in the market without giving a large portion of their earnings to fund managers. While it sounds easy in hindsight, it was a difficult path. John was fired along the way and made many enemies in the industry. But John, like any good entrepreneur, is a fighter. And at age 75, he’s still ready for a challenge.

Show notes:

3:30 College years at Princeton

• “I’ve always been a terrible idealist – or a wonderful idealist.”
  
• The mutual fund industry was described as “Tiny but contentious.”
  
• “I’m even more idealistic now than I was then.”

13:15 Executing on a senior thesis by starting a career in mutual funds

• Became head of Wellington Management Company by age 36.
  
• “I fell for it hook line and sinker.”
  
• “My merger partners… banded together and fired me.”
  
• “It was awful, I cried. And why wouldn’t you? But I know I’d made a terrible mistake and ended up paying a terrible price.”

18:00 Started the world’s first index fund

• A thousand times growth since start.
  
• “Fired with enthusiasm.”
  
• “I can assure you I am no saint. If you don’t believe that ask my wife.”
  
• “The more the managers take, the less the shareholders make.”

23:40 Idealism and execution

• “The Lord has created few people with a greater feeling of determination than I have.”

28:00 Keeping costs low

• “I’d be embarrassed to walk into an executive dining room.”

32:15 Values in a company

• “For God’s sake let’s always keep Vanguard a place where judgment has at least a fighting chance to triumph over process.”

38:45 Managers have usurped power from owners

• Describes this problem in The Battle for the Soul of Capitalism

49:15 Fighting corruption through the market

• “Mutual fund directors are pretty useless appendages.”
  
• “If I were persuaded it would never happen, would I start doing things differently? Not at all. I’d do them even stronger.”

55:20 Going against the grain

• “Nobody in this business had more fun than I had. Nobody.”
  
• “Entrepreneurship is about the joy of creating.”

Posted by greg at 10:55 PM | Comments (7) | TrackBack

VV Show #27 - Following Entrepreneurs at DEMO 2006

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When a startup launches its first product, should it expect a lot of fanfare? It should if it launches at DEMO before an audience of hundreds that includes some of the nation’s top journalists and venture capitalists (not to mention Venture Voice). DEMO is a two-day conference, held in Phoenix this time around, that features about 70 never-before-seen technology products. Most of the products come from scrappy startups. We follow two of those startups through the process, Sproutit and Sharpcast. Along the way we’ll talk to countless other entrepreneurs on the floor and some people who came to pick companies to cover or invest in. We covered this event last year (part 1, part 2) and followed VideoEgg, which was recently funded by the venture capitalist we introduced them to on that show. Let’s see what happens to Sproutit and Sharpcast.

Show notes:

:30 Covered VideoEgg last year; it got funded by David Hornik of August Capital

1:35 DEMO took place in Phoenix, Arizona

1:50 Introduction to Charles Jolley about of Sproutit

• “Mailroom answers e-mail, which is a pain that a lot of people feel – they’re [customers] willing to give us five minutes of their time just