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Wed, 23 Jan 2008 02:28:17 -0800

What’s There to TokBox?

Thu, 07 Aug 2008 12:13:36 -0700

Will Tokbox Make It?

Bain Capital must be psychic. Apparently they’ve looked into the future and seen that TokBox, a San Francisco-based startup, will either grow into a large company or find a buyer for what is essentially a Flash-based, in-browser video chat service that’s gotten marginal traction. Sure, the company has a new desktop client that allows you to video chat with anyone, but then so does my iChat.

Bain Capital has led a $10 million investment in TokBox. The move comes less than a month after the company named a new CEO, Nick Triantos, who has worked for many tech firms, but has never before held that title.

The company launched in October 2007 and has thus far raised a total of $14 million from Bain and early investors Sequoia Capital. Scott Friend, Venture Partner at Bain Capital Ventures, in a press release announcing the Series B round, said:

“The company is executing well…We are excited to be investing with our partners at Seqouia in a company we believe has the potential to be the next ‘big thing’ in web communication.”

Just to put his words into context, TokBox recently fired its founder and CEO, Serge Faguet. And according to Compete.com, they had about 179,000 visitors in the month of July, though they did sign a deal with Meebo that stands to get them some traction. (For a list of their competitors, check out NewTeeVee’s round-up of video chat applications.)

From the way I understand it, TokBox is using the built-in video capture capabilities in Flash player combined with the Flash media server to offer in-browser video conferencing. When the company launched, I pointed out that it was an “interesting idea, but more of a feature than a platform for a standalone company or model for a viable, long-term business. If (and that’s a big if) TokBox is going to work, it will need to be rapidly adopted by the marketplace.” Rapid adoption hasn’t quite happened, however, and I wonder if it ever will.

But again, the guys at Bain must be able to look into the future better than us skeptics.

Congressional Scrutiny Hurting NebuAd

Wed, 06 Aug 2008 21:15:56 -0700

Sometimes if you combine consumer outrage and an election year strange things happen. That seems to be the case when it comes to NebuAd, which is using controversial technology to inject ads into webpages by tapping into people’s click streams.

The company today announced that it has laid off a “significant number” of employees, according to The Register. The story suggests that NebuAd is considering a different way to use its deep packet inspection technology for advertising, which wouldn’t rely on using an ISP’s customer data. The company originally was the target of consumer outrage after it signed deals with a few ISPs, including Embarq and Charter. Once its Charter trials attracted Congressional interest, and Charter backed off, NebuAd’s proverbial goose was put on the slow burn.

When questioned on how realistic it was to expect Congress to legislate anything regarding consumer privacy on the Web, an activist told me sometimes just shining a light on such practices works. In this case it got NebuAd CEO Bob Dykes to offer a more obvious opt-out notice, which likely isn’t good for the firm’s bottom line. I can’t imagine that consumers would continue to participate in a program where their ISP uses information about their web surfing habits to insert advertising. Of course people do pay good money for women’s fashion magazines, which are advertisements wrapped in a thin blanket of beauty and relationship advice. Maybe the lure of “relevant ads” delivered via NebuAd would keep people from opting out. Nah.

image courtesy of Lucky

Open Thread: How to Fix BitTorrent, the Startup?

Wed, 06 Aug 2008 18:15:57 -0700

Update, Thursday 3 p.m. PST: BitTorrent confirms layoffs, but not everything else.

There are rumors that pink slips have been handed to some of the employees of San Francisco-based BitTorrent. The problems stem from their ill-fated consumer distribution effort, which competed with richer, more deep-pocketed rivals. They were trying to hawk the division to Best Buy for about $15 million, but the deal didn’t work out.

So far it’s all hearsay, but NewTeeVee’s Liz Gannes is trying to get to the facts of the story. If true, then it would be yet another tumultuous twist in the life of this company, which at times has reminded me of a daytime soap. (Not that there’s anything wrong with daytime soaps.) And like daytime soaps, its popularity, especially with file-sharing folks, has remained consistent.

I think BitTorrent can save itself. Such popularity means it can become the infrastructure player that allows for the efficient distribution of big video files. Its BitTorrent Delivery Network Architecture can be put to good use, especially with partners. As noted in a post last year, BitTorrent has been working with a handful of set-top box makers such as Pace Micro, and is trying to embed its technologies into other devices. The funny thing is that even carriers want to work with them. All of this makes this company salvageable.

It’s all a matter of adopting a lower — almost invisible — profile, something startups find hard to do. BitTorrent is clearly dealing with bloated and untenable expectations set by megamillion-dollars in financing — roughly $29 million in two rounds — and the accompanying unrealistic valuations. It should have stayed focused on its core technology.

Open question: How would you fix BitTorrent?

Photo of BitTorrent founder Bram Cohen getting a shave at FoundRead launch event courtesy of Joey Wan via Flickr

Verdiem Wants to Help You Cut Home PC Power

Wed, 06 Aug 2008 12:19:08 -0700

Power management tools are the low-hanging fruit when it comes to cutting carbon emissions out of the computing world — 90 percent of energy-saving tools on home PCs are disabled, and almost half of PC users don’t know what this stuff is or how to use it. Verdiem, a Seattle-based startup that has been focused on selling enterprise power management software, has just launched a free, easy-to-use download called Edison that could help out the rest of us. Microsoft is asking Windows users to download it, HP already has a HP-branded version for its businesses users, and the nonprofit Climate Savers Computing Initiative is calling for 10 million downloads in a year. The company is also backed by investors like Kleiner Perkins and the Westly Group. What more convincing do you need? Read the whole story and check out screenshots on Earth2Tech.com.

Thoof Goes Poof!

Sun, 03 Aug 2008 22:11:35 -0700

This past weekend, Michael Arrington reported that Thoof, an Austin, Texas-based social news site, took a dirt nap. It shouldn’t come as a surprise to our readers. Stacey had the scoop way back in January that the company started by Ian Clarke (one of the founders of Revver) was up for sale.

Thoof wanted to create a Digg-like service by observing people’s click streams. The company raised some seed funding from Austin Ventures and others and hit its peak (in terms of traffic) in October 2007 before it began slip-sliding away into oblivion. Thoof’s web site now redirects to Reddit, one of the popular social news sites that’s owned by CondeNast.

Given that the company was up for sale for about six months, I would say it’s just the latest example of the fact that Web 2.0 remains a buyers’ market — not a good sign for tens of dozens of companies that have cropped up across the web. The buyers remain pretty disinterested — even Yahoo is still busy dealing with its own mess. Microsoft is too distracted to do anything, and while Google and AOL are buying stuff, both of them are being highly selective.

Social.FM, Formerly Mercora, Shuts Down

Sun, 03 Aug 2008 22:11:34 -0700

Mercora, an early entrant into the social music and music search space that recently rebranded itself as Social.FM, has shut down and suspended operations. After being tipped off by a source, I tried reaching the company’s executives, but haven’t heard from them. The site has gone black.

“The Company is unfortunately no longer in business and therefore cannot continue its service to you. Regards,. Mercora, Inc.” Over on the Social.FM home page, the company said “To our Valued Customers,. We regret to inform you and apologize for this inconvenience, but Social.FM will be shutting down the system on July 31st, 2008.” The MySpace widgets have also gone on the blink.

The Sunnyvale, Calif.-based company launched in June 2005 and had raised $5 million from Norwest Venture Partners. It was started by Srivats Sampath, the former CEO of McAfee.com, and launched with a pretty nifty P2P radio software client.

Social.FM had planned to make money by selling ads next to music searches that were conducted on its P2P network. It eventually lost out to more visible competitors, like Pandora and Last.fm, and changed its strategy. Like many other music-focused startups, the company had faced some tough times when the royalty rates for webcasting music on the Internet were raised.

F|R: The Top 5 Reasons Tech Execs Fail

Sat, 02 Aug 2008 10:12:57 -0700

Regardless of the title your company’s top technology executive uses — CTO, CIO, Chief Product Officer or VP of Engineering — your company will ultimately look to this person to produce the software and technical products upon which your business success depends. Through our earlier career experiences (at Quigo, eBay and PayPal), and now through our consulting practice (AKF Partners), we’ve noticed that there are five consistent reasons why a tech executive fails.

Perhaps the most commonly assumed “failure scenario” is that the CTO is simply not technical enough to inspire confidence in the engineering team. This is not the case. In fact, it is actually rare that a CTO is removed because he or she lacks technical acumen. The truth is that your senior technology officer does not need to be the brightest technical mind in the business, except, potentially, during the startup phase of your company. Over time, he or she need only be geeky enough to challenge the strongest technical minds in your company to add value to technical decision-making. Most often, we find that senior executives come to a bad end when they spend too much time relying on their technical brilliance and not enough time cultivating other important aspects of their job.

The Top 5 Tech Exec Failure Scenarios we list below are not mutually inclusive, but they all support one very important conclusion: when technology executives fail, it is not because they lack an individual skill. It is because they lack an an adequate balance of the many technical, operational and leadership skills necessary to make them a complete manager.

5. Failure to Build World Class Team

As important as any other aspect of your job is the need to cultivate the best team possible given the limitations of your budget, mission and headcount. Rather than spending time on improving the capabilities of their teams, we find that many chief tech execs spend a great deal of time attempting to compensate for deficiencies within their teams. A very typical example of this is a CTO personally taking responsibility for every technology decision within a company. While this is a necessary practice when the team is very small, it does not scale into organizations of hundreds or thousands of engineers. All managers must be able to delegate to succeed.

4. Failure to Execute

At the end of the day, our jobs are all about creating and maximizing shareholder value. Failing to bring products to market in a timely fashion, releasing products with unacceptable levels of defects, and failing to meet contracted delivery dates are all examples of failing to execute to the expectations of your customers, partners and, ultimately, your shareholders.

3. Failure to Lead/Motivate/Inspire

Leadership has to do with those things that inspire an organization to achieve remarkable and extraordinary results. Painting a vivid description of the ideal future of your organization and setting aggressive but achievable goals are some of the aspects of leadership most often missing within the office of the chief technology executive.

2. Failure to Manage Operationally
Often, performance lapses by technology executives root to a lack of planning, communication or measurement — the very building blocks of operational management, as taught in business school. But you cannot improve what you do not measure, and you cannot guarantee maximum shareholder value without showing how you are improving results. Planning is an essential management activity as it helps align your team with your vision, mission and goals and helps ensure the efficient use of resources. Communication between and within organizations as well as to your shareholder base helps keep everyone in sync with your progress, needs, accomplishments and corrective actions.

1. Lack of Financial Acumen
In our experience, this is the top failure scenario among technology executives. Most technology curricula do not teach the basics of how businesses operate in financial terms, such as: capital markets, equity or debt finance, sales accounting, cash flow management, or even business strategy (such as Michael Porter’s 5 Forces). By the time most technologists have become executives, they’ve spent a lot of time learning their engineering trade, but they’ve had precious little opportunity to really learn about the mechanics of how a company runs.

Cartoon courtesy of www.philadelphia-reflections.com.

Marty Abbott and Michael Fisher are partners with AKF Partners.

Mobilize Startup Launchpad: Do You Have the Right (Mobile) Stuff?

Fri, 01 Aug 2008 12:13:30 -0700

Are you running a mobile startup, or know someone who is, that has (with a nod to Tom Wolfe) “The Right Stuff”? GigaOM is looking for the emerging technologies — and the companies behind them — upon which the new era of the mobile web will be built. So at our upcoming Mobilize conference on Sept. 18, we will have a startup “launchpad,” where 12 of the most promising mobile web startups will get to strut their stuff.

If you think your startup, or the startup of someone you know, has the right stuff, tell us about it. Just keep in mind the following:

The idea or product must be good. No J2ME creations of 80s arcade classics, please.
The startup or idea must be less than 12 months old.
A working product has either been launched or will launch at Mobilize (preference given to latter).
Someone from the company must be able to attend the ceremony in person.
Funding status is immaterial.

Please include the following details: Startup name and bio (200 words max), product description (200 words max), name and bio of company rep (100 words max). Email us at mobilize@gigaom.com.

Tickets for Mobilize have gone on sale; register now for an early-bird discount.

NewTeeVee Startup Watch: Onecast, Zadby, Anvato, GoAnimate

Thu, 31 Jul 2008 12:11:35 -0700

NewTeeVee has been bursting with startup news this week, including news from a bunch of new companies that have barely been mentioned elsewhere, if at all. So for those GigaOM readers looking for a cheat sheet, I’ve pulled together one here:

Onecast/1cast: Apparently this is something like RedLasso, but it’s been approved by TV networks instead of sued by them. Founded and funded by telco-turned-wireless guy Craig McCaw. The stealth company has nothing but a landing page for the moment, but our sleuthing turned up those tidbits and a few more.

Zadby: A marketplace for advertisers to commission viral ads from top web video producers. But producers have to make the videos on spec and their payouts (if they’re chosen) are based on views, so we don’t think it’s a very appealing deal for them. Reston, Va.-based; has $400,000 in funding from its founders.

Anvato: A new content identification service that quickly and efficiently scans the web using picture recognition to find unauthorized copies of its clients’ videos. Then it places relevant advertising on discovered videos. The company promises big-name customer announcements will come soon. Mountain View, Calif.-based; has $550,000 in angel funding, trying to raise more.

GoAnimate: Very cool web-based animation toolset. Some nice technology that could be used by total amateurs or perhaps even pros looking to make something quick. New York City-based; has $1.4 million in angel funding trying to add $5 million VC round now.

13 Startups Working on Solar-Concentrating PV

Thu, 31 Jul 2008 11:11:07 -0700

We’re all familiar with standard photovoltaic solar panels, and many of us are starting to become acquainted with solar thermal tech that uses the sun’s heat to generate power as well. But there’s also a third option: Over a dozen startups are currently working on ways to use mirrors and lenses to concentrate sunlight hundreds of times onto tiny, highly efficient solar cells. Known as concentrating photovoltaic technology, the systems are meant to cut back on one of the most expensive parts of traditional PV: the silicon-based solar panel. For details on 13 companies in this space, head over to Earth2Tech.

Google Eyeing a VC Arm?

Thu, 31 Jul 2008 08:12:22 -0700

According to the Wall Street Journal, Google may be trying to build out a corporate venture capital arm similar to other strategic venture groups at companies ranging from Intel to Motorola. The Journal reports that Google SVP David Drummond will be in charge, and that the search giant has hired 33-year-old former entrepreneur and investor William Maris to help.

Since Google already invests in plenty of companies, from Current Communications to 23&Me, the genetic information company run by Sergey Brin’s wife, I don’t think this news it terribly new or exciting. It also has a program in place for clean and renewable investments as part of its philanthropic arm. And so far, its track record as an investor has been unproven or weak given issues faced by portfolio companies. Current faces lackluster BPL use, Meraki is trying to stay relevant and electric vehicles are still far out there.

When a company sets up a venture arm it needs to decide if the investments it makes are part of a money-making effort similar to the way Intel now invests its capital, or to push product lines or ideas. Google already invests in companies to further its technology goals, so it may be looking for a strategic arm to create financial returns.

The downside of setting up a formal investment arm is that investing in startups is a long-term effort and many public companies are driven by short-term results. In tough times, it can be hard to write down the value in the portfolio, as Dell and Boeing discovered after the crash. They have both discontinued their strategic investment groups.

Update: To create a successful strategic investment group a company really needs to focus, something Google has not historically done well. If the goal is to complement and push Google’s technology efforts, the comapny needs to figure out what those efforts should be, and ferret out the best startups in that sector. If the fund is motivated by returns, then Google will need to temper its desire to only get involved with the best, the brightest and the hottest items right now (You know like accepting a $17,000 a year daycare instead of $30,000), because valuations on those deals can be sky high. I’m not terribly optimistic that Google has the discipline to handle strategic investing, or even if it really should.

photo of David Drummond courtesy of Google

Web Goes Retro With Firef.ly

Wed, 30 Jul 2008 14:12:03 -0700

For some of us old fogies who grew up using bulletin boards and forums on closed online services, online chat has always held a special allure. Remember, it was chatting that proved to be the killer application for AOL. Yet somehow the chat phenomenon didn’t quite translate as well on the open web, mostly because the implementations were kludgy and the software was too slow.

Still, instant messaging and lately Twitter-styled short messages have only become more popular. At the other extreme, we have Google trying to build immersive communication environments with the launch of Lively. Between those two new communication methodologies, however, there lies a third way.

For the past couple of days I have been playing around with a new web service called Firef.ly, which adds chat and avatars to any site on the web. It’s instantaneous like Twitter, yet is localized to a web page and allows for customization through the use of avatars.

The service, which was developed by Billy Chasen and is likely to go into beta sometime today, is the creation of NY-based Betaworks, who describe it as a real-time social messaging system. I know of many people that have used it and found it to be a better service than what’s offered by some of its rivals like Yaplet.

By adding a tiny bit of Javascript code, any site can become chat enabled. (You need a Flash plugin installed in your browser as well.) If you want to chat about, say, the L.A. earthquake, you go to a page, start typing, and your comments show up on a layer that seems to float above the page. Others can respond in real time.

People conversing are seen on screen either as avatars or a simple mouse pointers. The service also provides a timeline of the conversation, allowing you to navigate through the entire thread. That’s possible because the company stores these conversation threads on Amazon’s S3 service. (You can download and try it here.)

The comments can be posted on a web site; they can also be sent to your Twitter account and be broadcasted to your Twitter stream. This integration with Twitter could result in Flash Mobs versions of a conversation in which people converge on a story and talk about it amongst themselves before moving onto something else.

I like the idea, but I’m not sure how this translates into a business. Perhaps the company can charge publishers for its service. The Huffington Post is one of 300 web publishers that have been participating in a private alpha test of Firef.ly in the last two months, the company says.

Google Moves to Reinvent Transportation

Wed, 30 Jul 2008 09:12:50 -0700

On a sunny afternoon back in June of 2007, members of the media, academia and the tech industry gathered to watch Google co-founders Larry Page and Sergey Brin drive a white Prius around the parking lot of the search giant’s Mountain View, Calif., headquarters.

It wasn’t just a slow news day — the Prius had been converted into a plug-in vehicle, and Page and Brin had gotten behind the wheel in order to announce the company’s RechargeIT initiative, which included, among other things, $10 million to back plug-in vehicle technology.

It’s been a year since that awkward scene, and the motivation behind Google’s foray into transportation has only recently started to become clear. Google just named the first two recipients of funds from its plug-in vehicle program: lithium-ion battery maker ActaCell and electric vehicle maker Aptera Motors.

While Google commonly makes small investments in web and mobile startups and has started backing renewable energy companies as well, this was the first time it has funded companies focused on electric vehicles. With the move, Google has gone from advocating plug-in vehicle technology to investing in it, much the way a venture capitalist would.

The investments themselves shed some light onto the value that Google sees in electric vehicles. As a massive power user, the company has pledged hundreds of millions of dollars toward helping remake the energy industry, investing in solar and wind technology and in making its data centers more energy efficient. Since plug-in vehicles can help utilities stabilize energy delivery, lithium-ion battery technology like ActaCell’s and plug-in vehicles like Aptera’s Typ-1 are essentially an extension of Google’s energy investments as they could provide important energy storage capability to the power grid.

Google is also betting that the future of transportation will be networked and controlled via software, just like our laptops and gadgets. And not just connected via the Internet, but through the network of the power grid, too. Rolf Schreiber, an engineer with RechargeIT, says that beyond these initial investments, Google is also looking to back companies that build software that can control the rate at which plug-in vehicles charge.

And much the way Google has built a business of providing information via the web, the company could add its broadband expertise to the future of connected transportation. Schreiber, for example, recently completed a test of Google’s own, in-house plug-in vehicles using wireless communications and GPS to determine that the cars are getting more than 93 miles per gallon.

Let’s not kid ourselves: Google’s investment in transportation so far is paltry compared to what it’s spending on other industries. But while we’re not predicting that Google will make a G-car any time soon, its efforts to push plug-in vehicles as a way to build out a smarter power grid, and to bring some of the intelligence of information technology to transportation, will be worth watching.

photo courtesy PG&E

This was originally published on BusinessWeek.com.

Tipjoy’s Founders on Passing the Hat

Sun, 27 Jul 2008 07:47:08 -0700

Ivan and Abby Kirigin founded their startup, Tipjoy, to give consumers of free content a new way to pay for the stuff they really like: by leaving a tip. While the idea sounds simple enough, what the Kirigins want to do is actually far more ambitious than their quaint company name suggests. With Tipjoy they aim to exploit the commercial power of micropayments, a hip, Long Tail business concept in which consumers pay for things in tiny increments.

Until now, micropayment systems have proven most useful for philanthropy. No more, say the Kirigins. The couple (they are married) believes Tipjoy’s version of micropayments, which involves consumers paying for products in increments as small as 10 cents, but paying — and here is their innovation — voluntarily, is powerful enough to help Tipjoy become the next PayPal.

The Kirigins developed Tipjoy’s model as participants in Y Combinator’s winter 2008 startup class. Below the couple shares some lessons learned through YC’s collective iteration process.

F|R: “Free” is de rigueur in business, and micropayments aren’t worth much, so what is the value of using them?

Abby: We get asked that a lot: “Why would someone pay $1 for a picture when they can get it for free?” But people are happy to give money for content they like, it’s just that in the digital world they want to get it first, then if they like it, they’ll pay. You can think of Tipjoy as a recommendation engine, like Digg, but lots of arbitrary stuff gets [Dugg], because it’s free and easy. We’re using real currency as a passive filter for quality. Even if you pay 50 cents to “tip” a site you like, chances are you’ll have been more selective than if you paid nothing to recommend it.

F|R: Why haven’t micropayment systems worked in the past?

Abby: One reason is that on sites like Amazon or PayPal Donations, no one knew you were doing it. Because the dollar amounts are so small, people make micropayments for symbolic as well as economic reasons. Without visibility for your payment, the act of making it loses some of its value to the giver — there is no social reinforcement. On the other hand, look at Facebook gifts. People pay $1 to give a “gift” to a friend because it’s fun and social, and they get recognition for it on the site.

F|R: By making payment voluntary, don’t you risk never being paid?

Ivan: For content that is free to begin with, unpaid donations aren’t a big problem. So far, our payment rates are around 30 percent, and the TPM (tips per mille), or eCPM, are competitive with advertising, though this varies with the type of content. We know it works. When Radiohead released their album “In Rainbows” using a voluntary payment model they brought in $750,000. We will support other models, which mandate payment and would require a pre-paid account or payment withing 30 days.

F|R: How do you make money?

Ivan: If you’re a blogger and a Tipjoy client, you have a widget on your site that lets consumers “tip” you for your content. Tips go into your Tipjoy account. We hold the money and earn interest on the float until you withdraw it. When you cash out, we take a 3 percent fee. There are many ways to optimize and improve our business model, which is a luxury of handling money.

F|R: Can you share a key lesson from the Y Combinator experience?

Abby: The most important lesson is also YC’s motto: “Make something people want.” Before Tipjoy there was no marketplace where people could voluntarily give money to each other for stuff they like. So we built it.

Ivan: Another great aspect is the weekly dinners at which we could discuss our ideas with Paul and the other founders. The takeaway is that founders should talk up their idea to as many people as possible. It is invaluable to get outside your echo chamber and solicit feedback. One huge mistake founders make is staying too long in stealth mode, which means you won’t get any feedback. Another benefit of launching early is the community of early adopters. Tipjoy didn’t have plugins for all the blogging platforms on launch, but within a week our community had made plugins for MovableType, WordPress and Textpattern.

F|R: You’ve said you will extend Tipjoy’s business model beyond voluntary payments, why?

Ivan: Our goals are pretty big, and while people like to give back, that alone isn’t enough to build a big business. So Tipjoy will ultimately offer many options for how and when users make their micropayments. Now we support tipping. We could also allow up to a week or month for payment in a “pay later” model. Another options is subscriptions: Pay if you want, but the service is only on if you pay. Web services could use that model. But we think the nature of digital content allows for a real innovation voluntary payments. That’s how Tipjoy started and we’re always going to be very excited about voluntary.

F|R Crib Sheet: A Digital Hack to Trim Your Startup Legal Fees

Sat, 26 Jul 2008 09:53:27 -0700

When I began my career in corporate law 10 years ago, I was floored by the amount of time, money and paper consumed during the closing process of a business transaction. Every deal produces multiple sets of original documents and signature pages, so each party (and sometimes their lawyers, too) can end up with a bound volume containing a full record of everything, just for safe-keeping.

I recently worked on a financing for a young tech company that involved parties in Washington, Paris, San Francisco and Santa Clara, Calif. When the terms were finalized, I assembled the relevant documents and signatures, fed them into a scanner and sent the parties a digital PDF of the deal record. But one party decided they wanted a complete set of originals for their records. So after waiting days for more signature pages to arrive from France, we reassembled everything and physically shipped out a much thicker version in hard copy.

A financing like this one typically costs about $15,000 in legal fees. I’d estimate that the extra documentation and billable attorneys’ hours added another $1,000 to my client’s tab, for zero legal benefit.

Startups, especially those that are bootstrapping, are heavily burdened by such legal costs. The good news is that it’s getting easier, and more acceptable, to use scanned signatures for your transaction documentation. Doing this can save your startup a lot of pain – and thousands of dollars.

In 2000, Congress passed the Electronic Signatures in Global and National Commerce Act, making electronic contracts as valid as physical ones in most situations. (Checks, promissory notes and stock certificates are treated like legal tender, so originals of these are still required.)

But for a startup’s major legal transactions — licensing agreements, employment contracts, even funding rounds — there is no need to produce multiple sets of hard copy documents and original signatures, because the full weight of U.S. law applies to digital versions of both.

Some Web 2.0 startups offer tools to produce actual digital signatures (EchoSign is one), but even these aren’t necessary. The law focuses on “proof of authenticity,” meaning a copy of a manual signature need only be recognizable as the signer’s to be valid, so good old-fashioned scanning is just fine.

Scanned signatures are easier to forge than originals, so a bit more care is required to avoid fraud, but I think the cost benefits outweigh the risks. For one thing, digital documents are not only “greener” but also easier to store, archive and search, which can be handy down the road if conflicts arise concerning a legal contract.

And consider this: A funding round can easily cost your startup as much as $40,000 in legal fees. Bear in mind that in a Series A, the startup foots the bill for the company’s — and the investors’ — attorney fees. Using scanned signatures will not only reduce the administrative headaches of your deal, but also save you thousands of dollars.

Here’s a four-step remedy for avoiding the costly hassle of excessive legal fees in your next business transaction:

1) Establish an administrative custodian to be responsible for sending a final digital record of your deal document(s) to both parties.

2) Require that Party A and Party B each produce a list of signatures from its relevant officers that they scan and email to the custodian.

3) Have the custodian attach the scanned signatures to a final PDF, consisting of all the deal documents, and email the “dealbook PDF” to both parties.

4) Stop. This is the big change: No multiple hard copies; no multiple original signature pages; no FedEx charges for overnighting anything. In my scenario, each side can decide, after the fact, whether to print and maintain a hard copy for its company records.

But be warned: Old habits die hard. The ESIGN law is eight years old, yet many people still aren’t familiar with it, or just don’t recognize that the age-old signature tradition is superfluous. The next time your attorneys or an investor asks you for a set of “originals,” point out that it won’t confer any value, or security, above and beyond that of scanned copies.

Jay Parkhill serves as outsourced general counsel to startups and growth-oriented companies, and writes on legal and business matters at his blog, StartupToolbox.

Data Centers That Will Follow the Sun and Chase the Wind

Fri, 25 Jul 2008 15:55:14 -0700

A plan to combine cloud computing, fast broadband and renewable energy could reduce the demand data centers place on the electrical grid and save companies money on power costs. Data centers’ ability to suck up inordinate amounts of electricity is turning them into the Hummers of the computing world. And much like Hummers, their power-guzzling ways means they are becoming increasingly costly to run. To read about the plan being worked on by Andrew Hopper, head of the Cambridge University Computing Lab, head over to Earth2Tech.

Content Offerings Only Reach a Few Million TVs

Wed, 23 Jul 2008 12:55:35 -0700

Over the past few weeks, there have been a flurry of announcements from Microsoft, Netflix, TiVo, YouTube, Roku and others detailing how their devices can be used to play movies and other video-based content, delivered via the Internet, on the TV. Industry insiders are speculating that with these announcements the tide is finally turning, that Internet-delivered video will soon make a big impact in the consumer living room.

When looking at any new technology offering, however, market penetration rates are crucial. As we’ve seen in the past, the best technology is not what always wins — all that matters is what consumers adopt. With that in mind, here is a breakout of the numbers for these TV-connected devices and content offerings:

Xbox 360: 10.5 million units sold in the U.S. (source: NPD)
Netflix: 8.2 million members (source: Netflix)
PS3: 4.9 million units sold in the U.S. (source: NPD)
TiVo Series 3: 250,00 units sold (estimate). While TiVo won’t say how many have been sold, they did say that 750,000 Series 2 and Series 3 units are connected via broadband. Estimate assumes that two-thirds of them were Series 2.
Apple TV: Roughly 350,000 units sold (estimate). While Apple won’t say exactly how many have been sold, published reports put the figure at less than 400,000, missing Apple’s goal of 1 million units.
VUDU: 15,000 units sold (estimate). While VUDU won’t confirm a number, they did say that sales are in the “five figures.”
Netflix Player by Roku: 10,000 units sold (estimate). Roku isn’t saying how many they’ve sold, but realistically speaking, how many could they have sold in just a couple weeks before they ran out?

By adding up the above numbers we’re left with 19.3 million units sold. On paper, that seems like a half-way decent number. But if we break down these numbers even further, the real number of consumers capable of getting these content offerings is much smaller — so small, in fact, that they barely register.

Take for instance the recent Microsoft and Netflix announcement. While neither side will say just how many consumers have both an Xbox Live account and a Netflix account, it’s clearly less than half of Netflix’s 8.2 million members. So if we estimate on the high side and assume that a third of Netflix’s members have an Xbox 360 console and an Xbox Live account, we come up with a mere 2.7 million consumers.

As for the PS3, Sony only launched their online video service late last week, so it’s hard to estimate any numbers. But of the 4.9 million PS3s sold in the U.S. to date, not all of them are online. Estimating that 20 percent of them are not connected via broadband, we’ll use an install number of 4 million consumers.

When it comes to TiVo, you have to estimate how many of the 750,000 broadband-connected TiVo units are Series 3. Estimating that a third of the units are Series 3 would give us 250,000 consumers. But how many consumers have more than one TiVo? I have two Series 3 TiVos in my house, so while I am counted as two units, I’m only one consumer. TiVo won’t say how many customers have more than one unit, but taking that into account, the number of real consumers that TiVo is reaching with the Series 3 is probably more like 200,000.

That leaves us with the Apple TV, the Netflix player by Roku and VUDU. Using the numbers above, I estimate they reach 375,000 consumers combined.

Adding up all of the new numbers gives us just over 7.2 million consumers, far lower than the original 19.3 million hardware units that have been sold. And this 7.2 million number is even more skewed in that it does not take into account unique consumers. How many of the 7.2 million consumers have an Xbox 360 and a TiVo or an Xbox 360 and a PS3? If you estimate that 20 percent of them have multiple devices, you’re left with 5.7 million unique users. That’s a very small number. And then you have to estimate what percentage of those consumers will adopt and use the new services, and over what period of time?

Even if you had 50 percent penetration from day one, which you won’t, that would still be less than 3 million consumers using these devices to get Internet-based video to their TVs. While it is good to see more content options coming to consumers, adding up all of the install numbers for these devices gives a stark picture of just how small the install base really is. The market is still too fragmented, with too many different devices, all limited by a lack of premium content.

In the long run, the cable operators still have the best shot at bringing Internet-based video to the TV. Set-top boxes still have the most penetration with consumers and provide them with multiple ways of getting content. Unless of course you’re like me and only have TiVo, in which case the single-stream cable cards that most cable operators use don’t allow for any of the functionality of cable TV set-top boxes.

Dan Rayburn is EVP of StreamingMedia.com and has his own blog at BusinessOfVideo.com.

Cisco Buys Pure for a Smarter Home Network

Wed, 23 Jul 2008 16:54:47 -0700

Today Cisco Systems said it plans to spend $120 million to buy Seattle-based Pure Networks, a company that makes software to manage home networks. Pure’s network management software and underlying protocols, which make a connected device visible to a network, are becoming more important now that devices beyond computers and their peripherals are networked in the home.

Cisco has already tried to address this trend by using Pure’s technology in its Linksys Easy Link Advisor program, which was introduced on Linksys routers in April and is aimed at making it easier to manage multiple PCs and equipment. Today’s acquisition was driven, in part, by vendor and consumer satisfaction with those routers. It’s also because Cisco is trying to drive its vision of an intelligent network as the hub of the connected digital home. Pure’s software and HNAP protocol, which works with any IP network, from Wi-Fi to Ethernet, will underlie that intelligent network.

In contrast with Intel, which views the home network as a group of devices centered around a PC, Cisco’s Chris Dobrec, director of worldwide strategy for Linksys, says networked devices can and should have the level of intelligence built into them to recognize and talk to one another without using the PC as an intermediary. That’s a common enough vision, one that would allow you to take a photo with a digital camera and easily send it to your friend’s camera without ever using a PC. The days of standing there for 8 minutes at a family reunion while 10 people pass along their cameras to snag a shot would be over.

The problem with that scenario is that intelligence in devices doesn’t come cheap. In addition to a networking chip, certain protocols require a lot of CPU power or memory in order to identify and disclose themselves to a network. Dobrec says the HNAP protocol is light enough that it doesn’t need additional chips and could easily be embedded on existing hardware. Cisco plans to push the HNAP protocol as a standard and get device makers on board.

Eliminating the PC as a middleman won’t be easy with Intel pushing its own consumer networking technology, Cliffside, which uses Wi-Fi to connect devices and is scheduled to be introduced next year. The capability is already built into Intel’s Centrino chips, and will be activated with a software update in about eight months. Both HNPA and Intel’s Cliffside project will network Internet-connected devices as well as those that aren’t connected to the Internet.

PodTech purchased by ViewPartner for less than half a million, ending a bloody story " VentureBeat

Wed, 23 Jul 2008 15:50:12 -0700

[from bushwald] GroupSwim

Wed, 23 Jul 2008 11:54:49 -0700

Something 2.0-y for work collab hoopla.

GigaOM Acquires jkOnTheRun

Tue, 22 Jul 2008 18:55:07 -0700

In the life of every company, there comes a time when it is faced with the choice of how to extend its reach: Either build a new product or service, or acquire the one that’s already established itself as the best in its class. Larger companies face that question every day, but it is rare for a nano company like ours to have to make such a decision.

I am pleased to announce that Giga Omni Media, the company behind GigaOM, has acquired jkOnTheRun, a blog started by James Kendrick and Kevin Tofel that focuses on the wonderful world of mobile gadgets, including mobile phones and cloud client computers. James and Kevin will join GigaOM, but will continue to work from their respective homes of Houston and Telford, Pa., and jkOnTheRun will become the sixth blog in the GigaOM Network. (James & Kevin write about the deal on jkOnTheRun. Also, coverage on The Houston Chronicle & Techcrunch.)

“Acquiring,” while technically the right word, is a relatively soulless one. I prefer to think of this deal more philosophically. As I see it, we have proudly added two new members to our growing family.

Why jkOnTheRun?

jkOnTheRun is one of the rare blogs that covers the world of mobile gadgets with razor-sharp wit and insight. More importantly, it has a genuinely consumer-centric point of view. I first got to know the blog as a reader and have long considered it good enough to rank among my 10 favorites. (WebWorkerDaily editor Judi Sohn is also a fan.)

Strategically, it’s a publication that rounds out our existing areas of coverage. For instance, GigaOM tracks the world of web infrastructure pretty closely, but very rarely do we write about cloud client machines. And with the exception of the iPhone and some occasional mobile reviews, we don’t provide much gadget coverage, either. I think as we start to cover the world of cloud computing more closely we will no longer be able to afford to ignore the client side of the equation.

What happens to jkOnTheRun?

Absolutely nothing! Sure there are going to be some cosmetic changes, including cleaning up the web site to make room for sponsors and advertisers, but if it ain’t broke, why fix it?

James and Kevin will continue to write their posts, record their podcasts and shoot their videos. The jkOnTheRun feed will be integrated into that of our network and will be syndicated along with our other blogs. We hope some of our readers become part of their community, and hopefully some of jkOnTheRun’s readers will find something in our network that they like as well.

In summary

Getting back to my introduction: We were faced with the choice of either building out a blog that helped us track the mobile revolution more carefully (but with a consumer perspective) or buying one. It would have taken us a long time to build one — buying jkOnTheRun was a far better option.

I think in many ways that is the blueprint of our strategy going forward: When we find blogs that allow us to dig deeper, to complement and extend our areas of coverage, we will acquire them. If we can’t find ones we like, we will build them. But all that is in the future. Today, please join me in welcoming James and Kevin!

Cooliris, Inc. | Beyond the Browser

Mon, 21 Jul 2008 18:51:32 -0700

The Battle Over Your TV

Mon, 21 Jul 2008 08:49:50 -0700

If you were thinking of starting a set-top box company that delivers video content to the TV, let me stop you right there. There are already numerous players vying to dominate your digital entertainment future, and three of them are big names that you already know. Those three are also well-funded, well-equipped, and well on their way to becoming the center of your home video universe.

Amazon: The e-tailing giant just announced its new Video on Demand service, which will stream 40,000 movie and TV titles directly to Internet-connected Sony Bravia TVs and other devices. In addition to already having a huge user base to which it can market the service, Amazon will store all purchased movies on its end rather than with the end user, an approach that is likely to endear it to piracy-hating studios.

Currently the big sticking point with Amazon’s VOD service is that it doesn’t offer movies in HD — a must for this day and age. And hopefully the company will learn from Unbox, its earlier download video service that only worked on PCs and TiVos and didn’t exactly set the world on fire.

Netflix: The DVD-by-mail rental company is prepping for a disc-free future by streaming 10,000 of its titles to the Roku and the Xbox 360. Both offer an all-you-can-watch video buffet baked right into your existing subscription, which makes using the streaming service a snap.

But if Netflix is going to beat out the competition, it needs to build that catalog far beyond just 10,000 titles (most of which are pretty lame). It also needs to offer HD video. The Roku and Xbox 360 are HD-capable, but no word yet as to when HD titles will be available.

Apple: Steve Jobs & Co. helped spark the latest digital video revolution through iTunes and Apple TV, the set-top box that pipes iTunes content directly to your TV. Titles from all the major studios are available on the same day they’re released on DVD, plus the signature Apple simplicity and style makes it hard to beat.

Apple has said it’s renting or selling 50,000 movies a day through iTunes and the service is projected to pump out 18.25 million movies this year. But what we don’t know is how many actual Apple TV boxes the company has sold. The device was projected to sell 1 million units in 2007, but barely sold 400,000. It was then relaunched in January of this year with a renewed effort behind it; popular shows like “The Office” and “30 Rock,” however, still aren’t available.

And while these three have the best shot of succeeding in the digital video download space, they are by no means the only ones trying.

Game consoles, long considered a way for companies like Microsoft and Sony to establish a beachhead through which they could offer more services, are now boasting video capabilities as well. In addition to the Netflix streaming capabilities of the Xbox 360, there is also the Xbox Live Marketplace, from which you can purchase downloadable movies and TV shows. Meanwhile, Sony just launched its video service for the PS3. But the appeal of these devices will always be largely limited to gamers.

Televisions with Internet functionality built in could eliminate the set-top box altogether by offering access to web video directly or using the new tru2way technology to deliver interactive TV functionality. A shift from set-top boxes to the TV would benefit Amazon and Netflix most, as Apple would likely be loathe to give up that much control.

The real wild card in this battle will be the efforts of the cable and telecom companies. Their set-top boxes have a huge footprint in the market (Comcast alone has 24.7 million cable customers), and they have proven, by throttling certain kinds of traffic, that they can play dirty. Now they’re even considering usage-based pricing, which would mean that the more video you download or stream through the Internet, the more you pay.

There are other participants, some that are well known, like HP with its HP MediaSmart Connect, or TiVo. And some are upstarts, like Vudu, Zv, Verismo and Sezmi. But the future belongs to Amazon, Netflix or Apple. It’s still too early to tell which one will win the race to your big-screen TV, but they all have the right combination of size, recognition and content to get there.

This was originally published in BusinessWeek.com.

PodTech Sells For Less Than $500k - FriendFeed

Sun, 20 Jul 2008 15:46:26 -0700

friendfeed thread on demise of a Web 2.0 darling

How to Avoid the Curse of Vision Overload

Sun, 20 Jul 2008 09:49:49 -0700

My Chicago-based startup, The Point, helps people start campaigns for collective actions of all kinds, from organizing a poker game to boycotting a multinational corporation. We’ve been fortunate so far, enjoying steady growth, happy users, and money in the bank. (In February, we raised a $4.8 million round of venture funding from New Enterprise Associates). But hindsight is 20/20 and any entrepreneur, given the chance, would do some things differently.

In our case, we spent nine months developing extra features to accommodate our grand vision instead of focusing on what our users would really need. This cost us precious time, delaying our launch, originally planned for June 2007, to November of that year. Even after launch, the costs lingered — maintaining the extraneous features was a time-consuming distraction from improving the parts of The Point that people were actually using.

Thankfully, we caught on to what I call the curse of “vision overload” — when you put your vision ahead of your users — and quickly reversed course.

This month we’re delivering a major upgrade to The Point, our first release in months, and we’ve actually cut more features than we’ve added. While arguably less grand, it adheres to the critical success maxim of KISS, or “Keep it Simple, Stupid!” All founders face an inherent conflict between their most ambitious visions and the practicalities of execution. Below I explain how The Point addressed this uncomfortable compromise, and how you can learn to KISS, too.

Why didn’t we adhere to simplicity the first time around? We were certainly aware of the KISS principle — in fact, it was uttered frequently around our office — but we didn’t know how to measure simplicity. Obviously a site needs some core features, but where do you draw the line on value added? Our vision was to build a 21st century framework for collective action. This was novel, so how do you determine what is core vs. an enhancement?

The complexity occurred when we allowed vision to drive our feature set. Six months on, we’ve developed a few rules for determining what to leave in and what to leave out at launch.

1. If you don’t mention it in your 2-minute product demo, you don’t need it.

Whether demoing to colleagues or potential investors, we found ourselves glossing over certain features to keep from overwhelming our audience. In the end, the features we skipped over were the same features that went unused. If you can’t fit it into a presentation to a captive audience, then it’s almost guaranteed not to be a factor in the seven seconds the average web user takes to decide whether they’re interested in what you’re doing.

2. Don’t build a race car for foot runners.

Campaigns on The Point don’t go “live” until engagement reaches a critical mass (e.g. 100 participants), so everyone can be assured the campaign will have an impact. So to help organizers determine the tipping point for a boycott, we built a database of 150,000 companies that maps the financial vulnerabilities of boycott candidates like The Gap or Exxon Mobil. Users, however, were efficiently identifying potential targets through simple discussion forums. They didn’t need the fancy tools we had created.

3. Let users problem-solve with the basics first. Then offer the glitz.

We assumed that some campaign creators would want multiple administrators so they could share the responsibilities of management and promotion. Our vision for The Point included group governance, so we spent weeks building a system for proposing and voting on campaign developments. As soon as we launched, we realized that campaign creators managed this task just fine by sharing access to single accounts. The lesson? Sometimes it’s better to let users actually have a problem before you try and fix it; their solution is often simpler.

4. Proselytize your vision in your blog, not your product set.

There are better ways to promote your vision than etching it into your product with features that are unlikely to be used. Write about it on your blog! Speak with community groups on the purpose and potential of the site. Or make a video of yourself in the future talking about how your site changed the world.

Users care about whether you are meeting their needs, not your vision for the company. Save your vision for your investors. Had we focused on the factors that affect whether someone will become a user, we would have had a product out the door months earlier.

Andrew Mason is a blogger and founder of The Point. It is his first startup.