Archives for 2006

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What Happened to Reddit?

I’ve been unable to access Reddit for three days now.  I doubt it’s a major outage, as nobody seems to complain about it.  A Boston-based friend reported not being able to reach it for a day, but then it came back normal.  

I’ve temporarily changed my  DNS servers from Comcast to OpenDNS: same results.  

Any clues?

Thanks.

Update (12/15):  I’ve found the answers, perhaps not surprisingly, of all places on Reddit competitor Digg.  It was indeed a botched domain transfer, but the effect is taking longer than expected.  Oh, and while at it, they also had some backup media stolensmile_angry  The reddit team feels “confident, however, that because we do not collect any personal information from our users, the ability to do harm with the data that was taken is greatly reduced.”   However, since userid, password and email data are compromised, they are warning anyone who uses the same credentials at other sites to change it all.

 

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The "Hidden" Business Model in SaaS: Benchmarking

(Updated)

While we saw a lot of exciting products at the Office 2.0 Conference, the biggest “surprise” was not a product announcement, but FreshBooks CEO Mike McDerment letting the cat out of the bag:

“He basically announced the hidden value proposition enabled by SaaS: competitive benchmarking. All previous benchmarking efforts were hampered by the quality of source data, which, with all systems behind firewalls was at least questionable. SaaS providers will have access to the most authentic data ever, aggregation if which leads to the most reliable industry metrics and benchmarking.

Two months later FreshBooks published the first set of raw data. It includes stats on payment methods, invoicing by email vs. regular mail, browser an operating system usage. It’s a rather limited set, and only covers two months, but it’s a start, certainly to be followed with more business-critical data. CEO Mike McDerment also takes a first cut at analyzing the data, for example:

“Browser Usage

– Internet Explorer 7 – October 5.02%, November 9.68%

– IE 6 – October 37.64%, November 36.77%

– Firefox 2.0 – October 6.61%, November 24.51%

– Firefox 1.5 – October 44.26%, November 22.07%

Analysis

Both IE and Firefox have new versions out. Clearly the Firefox community is quicker to switch to new versions. Remarkably quick in fact.”

I’m not sure I’d agree with the analysis: certainly Mike is right, the Firefox community appears to be quicker in switching to new versions, but aren’t we missing a bigger picture? I’ve dropped the data into Zoho Sheet, the web-base spreadsheet app which generated this chart:

Browser Usage - http://sheet.zoho.com

The “bigger picture” is that IE gained market share vs. Firefox (something that as a FFox user I’m not happy with smile_omg). Clearly, the majority of new IE7 users are not IE6 upgraders, they came from the Firefox camp.

But I’m not here to discuss browser use, nor do I intend to ridicule Mike’s analysis. I picked this example to make a point: the same data set may carry different meaning to you and me. The art isn’t so much in the accumulation of data, but the proper aggregation and analysis allowing customers to benchmark themselves against industry peers – that’s where the real value is, not in raw data. So much so, that I probably wouldn’t entirely give it away; rather market it as a for-fee premium service.

SaaS providers may become the benchmark specialists themselves, but think about it: businesses will likely end up using a few systems from different providers, and if your purchasing, sales, invoicing, service ..etc data are all in different systems (and consequently aggregated by the different providers), wouldn’t you have a better competitive picture benchmarking yourself based on all those aspects? Does this mean we’ll have independent benchmarking consultants in the SaaS world? If so, will there be a secondary market for raw aggregate data?

But wait … whose data is it anyway? Trust in your data being secure, not lost, published, traded with is the cornerstone of the SaaS model’s viability. But we’re not talking about original customer data, rather its derivative – does that change the picture? There’s a potentially huge market opportunity here, yet SaaS veterans like Salesforce.com, NetSuite, RightNow …etc haven’t explored it yet. Why? I suspect for this very trust/ownership issue, which can be a potential mine-field. In the early days of SaaS it simply would not have been appropriate to address it, but now with mainstream SaaS acceptance (MicKinsey predicts 61% of $1B+ corporations will adopt one or more SaaS applications over the next year) it’s high time the industry starts addressing these issues.

Kudos to FreshBooks for being a pioneer in building the service as well as bringing a major industry dilemma to the forefront.

Update (01/04): Jeremiah is thinking along the same lines, discussing how storage companies will (?) eventually pay for your data. Yes, he talks about storage while I talk about applications, he talks about advertising while I talk about benchmarking, but in the end it’s the same: user data being processed to deliever business services.

Update (9/28/2008): Here’s another showcase of benchmarking turned into action messages on CloudAve.

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Concert for Diana – Interview with the Princes

Britain’s Prince William and Prince Harry will mark the 10th anniversary of their mother’s death with an event to celebrate her life. 

The Concert for Diana on 1st July 2007, which would have been Diana’s 46th birthday, will be one of the first events to take place in the new Wembley Stadium.  Tickets go on sale in a few hours;  video of the interview with Prince William and Prince Harry here.

Update (12/12):  Quite predictably, tickest have sold out, in a few hours 20 minutes.

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IdeaWins: Apprentice the Microsoft Way

I’ve previously covered Microsoft’s Contest for Innovative Small Business Idea: basically a promotion for the new MS Office Accounting 2007 package, dressed up as a contest. Still, it’s an opportunity for entrepreneurs, especially those in retail.

Originally MS released the site in a rush and not all components were ready, so submissions were only by emailing a downloadable form. They’ve fixed it now, so here’s the new fancy interactive submission page.

Microsoft also picked “celebrity” judges, lead by Carolyn Kepcher of ex-Apprentice fame.  Now, here’s my challenge: try to find this information on the IdeaWins site smile_eyeroll.  I couldn’t. 

Why hire “stars” (just how much of a star she will be without The Donald is still to be seen…), and “hide” the fact?    I only know about it from an email by MS PR – or so I think, it came from a gmail (sic!) account.  The press release calls Carolyn’s appointment an “unprecedented move to galvanize the imagination of millions of Americans”.  Hm… I don’t know about galvanizing… perhaps I’d feel galvanized by the end of the video, but I admit I did not watch it all the way.  Why?  Because I generally prefer knowing what I am getting into upfront.   In my previous post I stated:  

 “the FAQ is actually all about the Accounting package, and the contest terms are somewhat hard to find.”  

Now it got worse.   There is a  contest-related FAQ – well-hidden, unless you use my direct link.  The real catch: this is only available from inside the interactive signup, *after* you have chosen the high-bandwidth option.  If you picked low-bandwidth, you’re out of luck – and info. smile_zipit.   A “good” example of bad design getting in the way of creativity.  Which is quite typical of  The Microsoft Way. smile_sad

 

 

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SVASE VC Breakfast in San Francisco

I’ll be moderating another SVASE VC Breakfast Club meeting this Thursday, Dec 14th in San Francisco.  As usual, it’s an informal round-table where 10 entrepreneurs get to deliver a pitch, then answer questions and get critiqued by a VC Partner. We’ve had VC’s from Draper Fisher, Hummer Winblad, Kleiner Perkins, Mayfield, Mohr Davidow, Emergence Capital …etc.

These sessions are a valuable opportunity for Entrepreneurs, most of whom would probably have a hard time getting through the door to VC Partners. Since I’ve been through quite a few of these sessions, both as Entrepreneur and Moderator, let me share a few thoughts:

  • It’s a pressure-free environment, with no Powerpoint presentations, Business Plans…etc, just casual conversation; but it does not mean you should come unprepared!
  • Follow a structure, don’t just roam about what you would like to do, or even worse, spend all your time describing the problem, without addressing what your solution is.
  • Don’t forget “small things” like the Team, Product, Market..etc.
  • It would not hurt to mention how much you are looking for, and how you would use the funds…
  • Write down and practice your pitch, and prepare to deliver a compelling story in 3 minutes. You will have about 5, but believe me, whatever your practice time was, when you are on the spot, you will likely take twice as long to deliver your story. The second half of your time-slot is Q&A with the VC.
  • Bring an Executive Summary; some VC’s like it, others don’t.
  • Last, but not least, please be on time! I am not kidding… some of you know why I even have to bring this up. (Arriving an hour late to a one-and-a-half-hour meeting is NOT acceptable.)

Thursday’s featured VC is Jeremy Woan, CEO, Bampton Group. For details and registration please see the SVASE siteIn appreciation of our 40% growth in membership during 2006, we are pleased to offer SVASE members free registration for VC Breakfast Club during December. Non-members will be able to register at the substantially discounted rate of $25. 

The above promotion brings up an issue: it’s easy to register for free events – please only do it if you really mean to attend. The registration system closes at 10 participants, depriving other entrepreneurs of the opportunity to join. (No walk-ins allowed).  So if you need to cancel, please notify us by email.

Here’s a participating Entrepreneur’s feedback about a previous event.

See you in San Francisco!Zbutton

 

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Four-year-old Sexual Predator

“How dare a 5–year old child comfort her kindergarten classmate after she fell on the playground? Shameless children!  Of course their Commander teacher had to discipline them. Somebody please pinch me, wake me up… this can’t be happening, I must be having a bad dream!”   – this is what I wrote in April, reacting to this  Boston Herald story.

Little did I know …  here’s chapter 2:

“Bellmead, TX – Damarcus Blackwell’s four-year-old son was lining-up to get on the bus after school last month, when he was accused of rubbing his face in the chest of a female employee.

The principal of La Vega Primary School sent a letter to the Blackwells that said the pre-kindergartener demonstrated “inappropriate physical behavior interpreted as sexual contact and/or sexual harassment.” “  (full story on wbir.com)

Utter nonsense. Anyone who accuses a four-year-old of sexual harrasment (especially against an adult, what’s more, a teacher) really-really has no business being in childrens’ education.

Update:  This commenter on another blog says it better than I do:

“You might want to think about how appropriate it is to have a teacher that has issues with toddlers hugging her. Someone who could feel sexually asaulted by a hug from a small child has big issues that need to be dealt with by a profesional. Not exactly the person you want teaching small children.”

Update #2: As said as this story is, I can’t help but find some reddit comments hilarious:

“what’s next? arresting babies for inappropriate sexual contact for breast-feeding??”

“If this father has formal school board documentation of inappropriate sexual contact involving his four-year-old he should ask the local police to arrest the teacher’s aide for child molestation and sue the school board for exposing his child to the molester and then continuing to employ her.
And of course, the school board can’t really deny the evidence – they’re the ones insisting on keeping it.” 

You know I have to say the teacher’s aid is really playing with fire. Last I checked any kind of sexual encounter with a kid, even if it was initiated by the kid — is potentially a felony.”

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Winner of the “Not My Job” Award

Winner of the “Not My Job” Award

Originally uploaded by Bully-fied.
  

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Superhuman – Subhuman

Coincidence?  Editorial intent?  Two very different stories follow each other in the SF Chronicle. James Kim’s dramatic effort to find help for his stranded family is called superhuman by many.  Paul Kedrosky finds a way to “humanize” the superhuman:

“Superhuman, perhaps, but also the kind of prodigious effort the parent of any young child can understand.”

 

But what would the parent of any young children think of the next story:

Chazarus Hill Sr., 27, repeatedly used a belt, his fists and switches to assault his son, Chazarus “Cha Cha” Hill Jr., who underwent a “very painful and slow death” after suffering contusions and internal bleeding.”

Why?  The 3-year-old made mistakes identifying numbers and letters on flash cards.  No, you don’t have to be a parent to be shocked speechless by this – just human. Which this so-called father isn’t. smile_sad

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Google’s Unfair Advantage

(Updated)
Google’s Adwords is a fair system – with enough money you can outbid anyone and get top position … or .. can you?

Joe Kraus’s last blog post, It’s a great time to be an entrepreneur has become a much -quoted classic.  Part of his argument is how Search Engine Marketing changed everything, how one can now reach millions of small customers just buy buying the right keywords. Following this strategy a lot of startups spend most of their marketing budget to one company: Google.

Online collaboration company  Central Desktop followed the same path: frugal start and steady growth to profitability simply by having a solid good product and focused Adwords-based marketing. (They have  a really good integrated suite that I warmly recommend to small businesses as well as ad-hoc groups in need of  collaborative editing, groups, calendar, wiki, project management, tasks ..etc.)

It wasn’t until one of Central Desktop’s competitors, Joe Kraus’s very own JotSpot got acquired by Google that CEO Isaac Garcia started to investigate how Google plays its system against their own customers.

“You see, I’m not afraid of competing with Google – but I *AM* afraid of AdWords. Here is why……….
Google Cheats
Google holds the top advertisement (Adword) slot for the following key words:
intranet, spreadsheet, documents, calendar, word processor, email, video, instant messenger, blog, photo sharing, online groups, maps, start page, restaurants, dining, and books (somehow Amazon has managed to appear in the #1 ad slot for ‘books’).
For
spreadsheet, blog and video, in addition to squatting the premium ad position, Google Products also dominate three of the first four search results.
In such cases, Google Product Links and Ads can account for up to 25% of your viewable screen resolution – 30-40% for lower screen resolutions – almost guarantying that users will click on a Google Product over any other search results, sponsored links or text ads.
What this tells me is if you are trying to advertise a product that is competitive to Google, then you’ll never be able to receive the Top Ad Position, no matter how much money you bid and spend.

How successful do you think *your* ad buys would be if your competitor trumped your position no matter how high you bid your key words? “

His three questions to Google:

“1. How much does Google pay *itself* to claim the top ad position for searches relevant to its own products?
2. Does Google hold itself to the same minimum CTR thresholds for Ads placed?
(In case you aren’t aware – Google recently changed its Landing Page criteria; increasing keyword buys to $5.00, $10.00, $15.00+ for companies who’s Ads were not meeting a minimum (unknown) CTR.)
3. What alterations does Google make to its search algorithm to guarantee top rank for search results relevant to its own products?”

I think Isaac hit on something really big here:

“In the beginning, AdWords was hailed as the revolutionary platform that enabled small start-ups, mom and pop stores and businesses all around the world to ‘compete fairly in an open market bid system.’ It was written that “small businesses can now compete evenly with big business – it levels the playing field.””

Yes, it levels the playing field – as long as Google itself has no interest in your particular field.  So if you’re a small business owner, startup entrepreneur, how safe are you?  Today you don’t compete with Google, but considering Google’s appetite for acquisitions chances are tomorrow you will.  Is Google abusing its monopoly *against* you?

Update (11/8): The Inside Adwords blog responds:

“…our ads are created and managed under the exact same guidelines,principles, practices and algorithms as the ads of any other advertiser. Likewise, we use the very same tools and account interface. As does any advertiser, we aim to give our campaigns a budget which is in line with their value to us in terms of the increased traffic we might see. We actively monitor and manage the success of our ads by adjusting ad copy, keywords, bids, and so forth in the same way any advertiser who is concerned with their account performance would. That said, there are no special buttons to push or levers to pull that give our internal account managers special treatment or leverage.

Well, if I want to absolutely win a $10 item on eBay, I may auto-bid generously… $12, $15?   I certainly won’t bid $100.  Not that the price would reach $100, but eBay’s system will keep me in the winning position against all other bidders, who in a crazy bidding frenzy might drive my price up to .. $20? $30?  And, this being real money, I’d have to pay “too much”, above the value of the item.  Of course, if eBay as a company was bidding against me, they could afford that $100, or even $1000 bid – after all, it’s only “funny money”, just like Google bidding for Adwords.
Or, as ZDNet puts it:

“A Google AdWords self-promotion at Google.com, however, IS unique in a key way; The house is playing against the paying players.”

Update (11/8): Nick Carr’s When the auctioneer bids is a must-read.

Update (12/20): “Google recently emphasized they need to pay the same budgets as everyone else to advertise on Google using AdWords. What they might not have told us is that Google might simply not use AdWords in the first place… and instead, display a graphical “tip” Onebox on top of the organic results.”  Full story on Google Blogoscoped.

Update (7/7/2008)Ross Mayfield pondering on why he always gets outbid by Google.

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Betting on the NetSuite IPO

(Updated)

Phil Wainewright at ZDNet is running a poll on whether NetSuite will have a chance to go ahead with the long-awaited IPO or it will get folded back into the Empire.

I’m somewhat surprised by the above results, but since this is an early snapshot, please check the live poll for the current vote count.

Surprise or not, acquisition by Oracle is a realistic scenario, considering Larry Ellison’s close to 60% stake in NetSuite. This is certainly fellow Enterprise Irregular Jason Wood’s take.

I tend to believe that NetSuite is better off being an independent business; there are just too many differences for a merger to work well, and I don’t mean only technical, product-related differences. NetSuite is still largely a small business (SMB) player, and that’s a market that requires an entirely different Sales and Marketing approach, amongst others, and Oracle with it’s current “legacy” salesforce just can’t reach this market profitably. If your products are different, your target market is different, your organization, corporate culture are different, where’s the synergy? Big behemoth Oracle would kill NetSuite – Larry is better off with a portfolio approach, cashing in a 10-digit returnsmile_tongue

Talk about the SMB market – there really is no such thing. “SMB” was sufficient to describe the market to avoid, but now that the software industry is getting ready to actually address the needs of this segment, it’s too heterogeneous to be lumped together.A $100M business is just as different from a ten-person startup as it is from a Fortune 1000 company. When analysts talk about SMB, they really have the mid-market in mind; when SAP is announcing new SMB initiatives, it targets $100-$200M companies.

The forgotten “long tail” represents a huge untapped opportunity: millions of (very) small businesses that can now directly be reached, sold to, serviced inexpensively over the Net – classic SaaS style. Different markets require different organizations – NetSuite serves this segment much better than Oracle (or SAP, for that matter) ever could. In fact SAP would be wise to copy this chapter from Ellison’s book: it should get it’s own “NetSuite” by investing in (not acquiring) an up-and-coming small-business focused All-in-One SaaS provider, like European 24SevenOffice. The next NetSuite.

Update (12/11): NetSuite Gets Ready For Its Close-Up by BusinessWeek.
Update (12/19): TechCrunch is running a story titled NetSuite’s Going Public, Looking for $1 Billion Valuation. I don’t know if it’s based on new information or …. (?)