Category: Tech news

It’s universally acknowledged that TV speakers suck. And it’s widely known that Sonos makes awesome wireless speakers. Light bulb!

Western Digital’s latest entry into the media streaming fray is the WD TV Play, a very capable set-top box priced at a wallet-friendly $70.

Editor’s note: Jacob Mullins is a VC at Shasta Ventures who primarily focuses on consumer web and mobile companies. Follow him on Twitter @jacob. 

With the recent talk about the growing “billion-dollar club” in startups, I’ve been wondering, as a Series A investor, what characteristics a $1 billion consumer tech company has. I examined the pool of consumer companies that have had exits over $100 million within the current era of consumer tech, which I consider to be post-recession 2008. I wanted to see what I could learn and ideally reverse-engineer common characteristics that would help me identify the next big winners when I see them today or in the future.

I created a dataset pulling from a number of venture capital data sources, including CrunchBase, and narrowed it down to my own specifics: U.S., venture-backed companies that have had realized outcomes, both IPO and M&A, over $100 million since 2008. Because private-equity funding and M&A details are less clearly reported, this may not be a comprehensive list of consumer companies. Also, I did not include software/enterprise companies, of which there are many more.

Common Characteristics Of Consumer Tech Companies

Here are a few highlights:

• 38 companies over the past five years have exited over $100 million
• Only nine companies over the past five years have exited over $1 billion; all but one of these nine (Zappos) exited in 2011/2012
• 29 of the 38 outcomes happened in 2011 and 2012
• 14 of these companies exited via IPO, all in 2011 and 2012
• seven of the nine most valuable exits were all public offerings (Zappos and Instagram are the two M&A transactions worth $1 billion or more. I’m continuing to value the Instagram acquisition at the original offer of $1 billion, not taking the decreased market value of public Facebook stock into account.)

This simple survey affirmed my belief that achieving outsized results within the consumer company landscape is incredibly difficult. Now that we’re sure it’s difficult, what insight can we glean?

Age

The average age of the nine companies that exited at over $1 billion is seven years, with the minimum being two years (Instagram) and the maximum being 11 years (Pandora). The average age of the 38 companies that exited over $100 million is 6.9 years. Instagram, Playdom and ngmoco are the three outliers who had significant outcomes, $1 billion, $563 million and $400 million, respectively, within two years of their founding. All were fast-growing and sold opportunistically.

To build truly large and valuable businesses, do not expect a short-term play. Plan to be in it for the long haul — the better part of a decade — and build out a team that is willing to dig in and fight hard.

Category

At first I was hoping there would be a certain category or type of company that would stand out, but unfortunately, there’s not. However, the fact that huge opportunities are possible in nearly every category is a positive attribute.

I placed the larger set of 38 companies, which exited over $100 million, in one of five categories and got the following counts: social (4), e-commerce (8), consumer tool (13), gaming (6), marketplace (2), and media (5). It appears that consumer tool is the largest category, but it’s also the broadest categorization, which includes everything from Mint.com to ZipCar.

Business Model

Two of the top five companies, LinkedIn and Pandora, have more than one business model that significantly contributes to their top line – advertising and subscription. Of the nine that had $1 billion exits, four are e-commerce-based, three are advertising-based, and two are subscription-based.

Across the 38 consumer exits over $100 million, advertising is the most common business model at 11 companies; second is subscription, with 10 companies; and third is e-commerce, with nine companies. Game Currency has six companies, and two companies — Instagram and Qik — exited with no business model.

I’m not surprised that advertising is the leading business model category across the list given its broad applicability. Though I am happy to see that subscription is the close second, which demonstrates the strength and importance of providing consumers with enough value that they vote with their wallets. While e-commerce is also well represented, the average exit multiple (1-2x revenues) tends to be smaller than other tech company exit multiples, as reported by the Goldman Sachs Internet Technology Quarterly Report.

Your Founder

The most valuable companies have founders who have unusually strong and focused product vision. They are intimately engaged in every aspect of product development ensuring the product instantiates itself in their image.

In every single one of the top-five most valuable companies on this list (Facebook, LinkedIn, Groupon, Pandora, Zynga) the founder himself was maniacal about the product and molded it to his own vision. In two of these cases (Facebook, Zynga), the founder himself led the company as CEO through its IPO.

Value Proposition

As you look down the list of the nine $1 billion+ exits you recognize that there is a strong common focus on end-user value, each in its own way. Facebook is better at connecting friends; LinkedIn makes professional networking and the job search easier than ever before; Zynga gamified life with your friends; and Pandora plays only the music you want to hear. Not only were these companies able to acquire new users, but they were able to keep users around for days, weeks, months and years after they signed up. They did this by focusing on constantly providing their users value at every step.

Don’t Fear Incumbents

From the nine $1 billion exits, there is not a clear enough trend to say whether or not it’s more valuable to invent an entirely new product category or reinvent a market with a better product. Facebook provided a better experience than Myspace and Friendster. Zappos sold shoes in a better way, with better customer service. Instagram, however, created the mobile photo sharing market, and Pandora invented and wrote the rules for Internet radio.

As an entrepreneur with a revolutionary idea, don’t be turned away because there are competitors in the same space. In many cases, the most valuable products have been built-in areas where the existing solution is just not up to snuff.

Conclusion

After looking through many of the common characteristics of consumer tech companies that have had large outcomes of between $100 million and $1 billion, three things stand out. First, prepare to go for the long haul: Work with teams who are both visionary and tenacious enough to execute on their business for the better part of a decade.

Next, work with founders who have strong product sensibilities and a deep vision for how they see their products unfold and how it constantly provides value to end users at every turn.

And finally, billion-dollar companies can be created in categories and with business models that have been seen before. Don’t be fearful of the competition or the entrenched players. If you can do it better, you can win.

Editor’s note: Tadhg Kelly is a veteran game designer, creator of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.

It seems that the United States may be becoming more open to the idea of real-money online gaming. Real-money gaming has been very successful in certain areas, and among investors it tends to be contrasted against trends like social games in very positive terms. The average lifetime value of a real-money player is generally thought to be far higher than a social gamer, for example, and the expected ARPUs can get pretty crazy. The smell of cha-ching is in the air.

In particular, the U.S. has long been considered a kind of El Dorado because of its size and potential. A variety of companies used to providing gambling in the UK, Europe and Asia, as well as domestic suppliers in the physical casino business and social game companies like Zynga are hovering. Legislation is going through the warren-like process of being passed in several states and some people are forecasting that real-money will be the next big thing for the games industry. And yet, for me at least, the news that real-money online gaming might come to downtown Des Moines, Columbus or Omaha is totally uninteresting. Like, so what?

Professionally speaking, the world of casino, slot, bingo and poker is just as valid as any other sector of the gaming universe. I know several people who work within that sector, and have consulted on a couple of projects over the years – which were as much an education for me as for them. They are busy solving problems of player satisfaction, retention and technical issues just like anyone else, and they take pride in their work.

Several parts of the online gambling universe host cultures of players who behave just like any other gamer. The sector is no more dark or seedy than any other kind of game, and it has its fans and whales just as every other kind does. There are debates within its various communities over who are the best providers, and as a whole the sector has its hardcore genres (sports betting, poker, etc.) and its more casual (bingo, slots) counterparts, too. Even the whole addiction thing is largely handled with the same levels of responsibility as any social game, massive multiplayer game or other provider.

And yet, meh. It’s hard to want to write about it.

My reason is that, although it may have an active subculture all its own much like sports, online gambling is probably the least innovative sector of the games industry. It’s always the same few games repackaged endlessly and the movements within that space tend to be very narrow. Unlike, say, indie games where cool weird stuff like Space Team bubbles up on a regular basis to teach us all the meaning of play all over again, there’s really very little to say when all you have is poker, slots, bingo and so on.

That’s why online gambling remains largely a margin- and customer-acquisition business, and why it rarely generates any real enthusiasm among the gaming press. Games are an entertainment business like TV where the fiction and the mechanic are just as important as one another, but online gambling comes across as about as genuinely exciting as watching QVC. They are so un-innovative largely because of the philosophy that drives them.

I don’t just mean a focus on the bottom line. I mean that gambling companies are behaviorist. They think of games in terms of predictable outcomes and measured rewards, guided user experiences and some degree of manipulation.

Behaviorist game design is very popular among investors these days. The prospect of being able to measure everything is perceived to reduce the guesswork of what is fun, but – as I wrote previously – it doesn’t really. Instead, metrics tend to be good at helping to maximize the effectiveness of a game dynamic which is already fun, but is no good for invention. Successful game dynamics always come from that weird creative place that method can’t quite access, and – not really trusting in that sort of thinking – that’s why gambling companies tend to stick to what they know.

So they are timid, and timidity encourages incrementalism like “inventing” a variant on slots, or a slightly turned-around version of bingo. Sure, fine, but that makes for some incredibly dull product. Bingo with extra numbers and a daily reward schedule may be exciting within certain frames of reference. But outside those walls it’s all very whatevs and the most important consequence of that is that the race to win online gambling is only about marketing spend and distribution. As a sector it’s fundamentally unlikely to lead to a Minecraft equivalent, or even a FarmVille equivalent.

So I find it boring because it feels like it’s over already. Online gambling is already clogged with undifferentiated products competing over small incremental differences, so – if/when the laws do pass in various states – the gold rush will quickly go to whoever can afford to compete. It’s just not the sort of thing that sparks marketing stories and causes revolutions. It’s just too small-minded.

That’s why I’d rather check out The Room because it seems kooky and weird, or play Eufloria. These are games that carry the potential of a marketing story, of gathering attention and excitement based on what they are and what they represent. A game like Minecraft is the sort of thing that spawns a revolution because it becomes a passionate game that folks talk about.

Exciting games marry both creative and business requirements in novel ways. Whether it’s an app, an online game like Spry Fox’s Leap Day or an old-school Steam game, genuine interest comes from taking big risks over little ones. In all philosophies there are conservative game makers who tend to try and increment their way to success (and largely fail to do so), but behaviorists are more conservative than most. That’s why they got dull and the San Francisco revolution came to an apathetic halt a while ago.

I’m still waiting to hear the story about a gambling company that invented a whole new game. Not some adaptation of an existing game, some recasting or re-theming of stuff we already know, but something brand-spanking new. Whether your business is in selling single-shot games, virtual goods or cash payouts, the demand to invent and be weird is one that never goes away because the future of games is all about surprise. So if you want to get me excited, don’t just show me something that’s 1 percent different from everything I’ve seen before.

This week, Kleiner Perkins partner Matt Murphy joined us in the TechCrunch TV studio for our Ask A VC series. As we discussed on the show, Kleiner Perkins has been making a solid bet on mobile for the past few years. In fact, we’ve confirmed with the firm that it has put more than $450 million in 40 mobile companies.

As Murphy explains, these investments include both the $200 million iFund (launched in 2008) and separate investments. So now the $450 million in mobile investments are part of the firm’s digital investing in both consumer and enterprise companies.

For background, the iFund was initially a $100 million collaborative initiative with Apple that focuses on funding and building applications on the iOS platform and the mobile Internet. The company doubled this to $200 million within a few years. But Kleiner has expanded the mobile focus to include enterprise, as well.

And Kleiner has built a pretty impressive collection of consumer-focused mobile investments including Shopkick, Path, Spotify, Pinger and Square. Of late, the focus has expanded to enterprise with companies like Apperian, Crittercism and Egnyte.

Check out the video above from Murphy for more.

Editor’s note: David Teten is a partner with ff Venture Capital and founder and chairman of Harvard Business School Alumni Angels of Greater New York. Follow him on Twitter @dteten. 

I recently had an extensive debate with Tom Grossi, partner with New Enterprise Associates, about why and whether small funds (like mine) tend to outperform large funds (like his). He and I wanted to share the conversation with you.

For some time, the conventional wisdom in the VC industry has been that small funds have better performance profiles than large ones. See the TechCrunch posts by my partner John Frankel and Professor Robert Wiltbank, my recent post on the quality of angel returns data, as well as reports from the Silicon Valley Bank and Kauffman Foundation. An article on the New Enterprise Associates blog by Tom, however, makes an interesting point: most of the megafunds were raised since 1999, a period in which the entire industry did poorly. Though the megafunds did underperform in absolute terms, they may have outperformed in relative terms. While I don’t ultimately agree with the article’s conclusions, I think it warrants consideration.

I agree with Tom on the principle that there is a natural upper limit to fund size before returns tend to suffer, but we are at odds as to where that limit is. I argue that, just as with hedge funds and mutual funds, the larger the venture capital fund, the more difficult it is to generate strong returns. Moreover, VC funds on average earn approximately two-thirds of their revenue from fixed fees.

For larger funds whose partners can earn seven-digit compensation before producing any profits for investors, incentives are not fully aligned. They’re like Bally’s Atlantic City, which The Onion recently featured as having had “‘an unbelievable night‘ Monday”; “Bally’s is in the midst of an impressive winning streak, coming out ahead an astonishing 6,753 nights in a row.” Partners at smaller funds, by contrast, have to hustle before they can cover their mortgage.

Just as with hedge funds and mutual funds, the larger the venture capital fund, the more difficult it is to generate strong returns.

Regardless of whether large funds should or should not be performing better than small ones, the more pertinent question is whether they actually are. Let’s look at each of Tom’s major claims in his article in turn.

He begins by observing that larger funds are drawing a higher percentage of industry capital commitments than was historically the case. He surmises that LPs aren’t buying the argument that large funds don’t perform. Beyond the fact that LP capital commitments don’t prove anything about returns, however, large funds are likely much more resilient to a few bad years than small funds are. The Economics of Private Equity Funds demonstrates that the VC industry survives mostly on fee-based income (of which larger funds have a proportionally larger amount).

Therefore, large funds are beneficiaries of survivorship bias, given the inherent conservatism of institutional LPs. Moreover, LPs have been losing money in VC for years. The Kauffman Foundation points out several reasons why they choose to keep pouring capital into the industry: the J-curve narrative, VC investment allocation mandates (which should disproportionally benefit large funds), the “relationship business” philosophy, and potentially misleading return metrics (such as IRR).

Tom’s next general observation is that although smaller funds have the potential to return much larger multiples, we should only concern ourselves with the performance of the VC asset class as a whole (both from the perspective of LPs as a class and for the purposes of public policy). At a macro level, after all, LPs are definitionally invested in all funds. I think this argument is not relevant for the great majority of investors who only invest in one to five VC funds. Such investors  investors are far more impacted by individual investments than industry-wide returns.

Second, I think it absolutely does matter that the best small funds outperform the best large funds. Many researchers have found that past performance is predictive of future performance in the VC industry. I’m obliged to say that sentiment is not universal. Dr. Susan Woodward, formerly Chief Economist of the U.S. Securities and Exchange Commission, and Partner at Sand Hill Econometrics, observed, “Among the scientists who have studied the performance of venture capital and buyouts, there is no consensus that there is persistence in performance by fund.

Past performance says that LPs will achieve better marginal returns by putting their money into top-performing smaller funds.

The data to speak to this issue are hard to come by. The worst-performing funds fall out of the data altogether. Some big famous old funds share no data whatsoever and are extremely good at eradicating the history of their failures from the Internet (leading me to suspect they aren’t doing quite so well as they would like the world to believe). Counting IPOs gets us only a short distance to an Answer. This is a difficult question to study.”

Assuming you agree (as do most LPs) that past performance is at least somewhat predictive of future results, past performance says that LPs will achieve better marginal returns by putting their money into top-performing smaller funds. LPs aren’t putting all their capital into predictable, low-return fixed income funds because they understand that a higher return dispersion promises higher returns for savvy investors who can invest in top-quartile funds. The same reasoning explains why it is strategic to put money into smaller funds.

Tom agrees with my conclusion and notes that, “I completely agree with you that LPs with access to top-tier smaller VC funds should take advantage of that. But the reality is that most top-tier small VC funds are essentially closed to new capital. Just think about it: if the fund size never expands, the only way for new LPs to enter is if others drop out.  But why would any LP ever drop out of such a fund? So the practical question becomes: if an LP is presented with a choice between a large fund with a top-quartile track record and a smaller fund without one, which should it choose? The data suggests the track record is what matters, and the large fund is the far better bet in that situation.”

Tom draws on two metrics to demonstrate that larger funds are, in fact, more likely to be top performers. The first is that the ThomsonOne database shows capital weighted average returns consistently beating simple average returns for vintage years 1980-2008, implying that larger funds do better than smaller funds. The problems with this evidence are threefold. First, it isn’t very precise. It shows that, generally speaking, larger funds do better, but we can’t define “large” any more than we can formally define “small.” Therefore, the claim won’t extrapolate to any specific brackets. Second, credibility (fund reputation) is a huge confound. It is a variable explaining why large funds are able to raise so much and why some small funds remain small.

If top-performing funds tend to scale up, large funds might be doing well in spite of their size rather than because of it. At the very least, ThomsonOne’s numbers do not prove a causal relationship between fund size and performance. Tom agrees on this point: “I tend to agree with, but can’t necessarily prove, that it is probably the case the large funds are doing well in spite of their size not because of it.” Third and finally, other datasets fail to corroborate the result. Cambridge Associates reports that funds with more than $150M capitalization only generated higher pooled returns than those with less in 11 of the 30 vintage years between 1981 and 2010. Kauffman found that their top performers are mostly small funds. Silicon Valley Bank used absolute divisions (>$250M and $50-$250M) and found that the small funds do better, across the board, in terms of multiples.

The second metric from ThomsonOne shows that a greater proportion of the largest 5 percent and 25 percent of funds are in the top quartile of funds from vintage years 1980-2008 than of the smallest 75 percent. Aside from credibility remaining a confound and other datasets disagreeing, I have two other concerns. “Large fund” is a moving target; the average fund size has crept up since the late ’90s. Additionally, we already know that the top performing small funds do better than the top performing large funds, so the story would likely be different if we looked at the (arguably more important) smallest quintile or decile.

If top-performing funds tend to scale up, large funds might be doing well in spite of their size rather than because of it.

Tom’s article notes two caveats that I suspect are responsible for some of the fuzziness regarding correlations between fund size and performance. Firstly, “fund size” can be misleading as some firms prefer to raise a large aggregate amount split between several concurrent funds. Secondly, none of the VC return studies to date, including the ones we discuss here, are definitive.

To some degree, they are all hampered by data scarcity problems. I think that probably the best data source is the Kauffman Foundation study cited above, because: they are highly sophisticated investors who have access to almost any fund they want; they can calculate precisely the idiosyncratic fee structures of all the funds in which they invest; and, unlike almost every other data source, they understand precisely the dynamics of the limited partners because they are one.

In response, Tom writes, “The Kauffman data set is exceptionally small in comparison to the others and inherently biased (not in a nefarious way, but in the statistical sense that they had an active management policy that selected their investments and those are the funds for which they have return data). I grant you that the data sources I have access to are not that great either, but it was all I have. But the paper I linked to by Steve Kaplan, et al. examined four separate sources using a variety of return metrics. It is by far the most comprehensive and least biased analysis, which is why I linked to it. And it was done by an expert academic in this space.

The results were that 1) fund size doesn’t matter a whole lot; 2) but to the extent it does, it seems there is a slight correlation toward larger funds having slightly better returns. Now, it is true, if you search you’ll find another Kaplan study that shows increasing fund size among sequential funds by the same manager has a negative correlation with return.”

Personally, I think that the Kauffman Foundation, a financially motivated industry insider, represents the motivations and returns of a typical LP more than an outside academic likely does.

Tom also notes (and I agree), “One other point: My points are all macro-level and from an LP’s perspective. Ironically, it may be true that it is better for the VCs themselves to raise smaller funds because the more volatile a fund the more valuable the carried interest (which has, after all, the exact same payout structure as a call option). A cynical observer might argue this is why some firms raise many concurrent small funds… then they have both large management fee streams and high volatility on each given carried interest pool. But I’m sure that has nothing to do with why those firms structure that way .”

Thanks to Dartmouth intern Matt Joyce for help researching and drafting this and for Tom Grossi’s and Dr. Susan Woodward’s thoughtful comments.

Are you noticing that some things are a bit different today? People in cafes are actually talking to each other, no laptops in sight? Drivers at stoplights are accelerating as soon as the light turns green, without that “oops I was just finishing this text” lag?

Don’t panic, you haven’t been somehow transported back to 1995 (though that might be kind of fun, actually.)

We’re in the middle of the National Day Of Unplugging, an annual 24-hour event that began back in 2010 and starts at sunset on the first Friday of each March, inspired by the ancient ritual of observing the Sabbath or Shabbat.

If you’re reading this, you’ve obviously failed at the whole thing already. But there’s always next year, or even next week. It’s a pretty straightforward idea, and you don’t necessarily need to sign a pledge to do it.

The National Day of Unplugging’s website says the goal is simply to “unwind, unplug, relax, reflect, get outdoors, and connect with loved ones.” According to the ten principles of the event embedded below this post, signing the pledge means that you vow to put down the phone, shut your laptop, light some candles, and open some wine. It might sound easy on paper, but thinking about putting it into practice can be pretty difficult.

This week I had a drink with a very successful web entrepreneur who told me she observes a full day of unplugging with her family every single week. She’s a bit older than me, though, and has already had a lot of success at work and built a rich personal network of friends and family. I told her that I couldn’t see myself being able to completely unplug on a weekly basis without having negative repercussions in my career or personal life. “What if someone is inviting me to some amazing last minute party?” I asked. “What if a source emails me with Twitter’s secret IPO documents?”

“It’s ultimately about creating boundaries for yourself, which everyone should do,” she said. “Your career and life will actually be better for it in the long haul. Trust me.”

She makes a good point. For decades before the current “always on” era, many people were able to build great lives and careers for themselves despite not being accessible for 24 hours a day. Though right now the trend is toward working harder, faster, and longer than ever, it might be worth remembering that the people who have historically made really big impressions on the tech industry and the larger world spent a few more hours each day in relatively unplugged solitude than we typically do today.

Stepping away from the gadgets and the web for a few hours here and there might not be a terrible idea after all. If for nothing else, it will prove that we can still remember how to survive without them.

Here are the ten principles of the National Day of Unplugging:

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.

Over the past few weeks, I’ve been genuinely surprised by the depth and reach of the reaction to any moves made by Yahoo! As someone who hasn’t been around the this place for too long, my sense is Yahoo!, despite its recent history of countless missteps, is still vitally important to the cultural memory of Silicon Valley. And, as a result, the moves its new CEO makes becomes the subject of ridiculously intense, global scrutiny, armchair speculation and analysis, and a deafening level of peanut gallery twitter blabber devoid of any reason or context.

Let’s *briefly* recap the multiple serious issues facing Yahoo up to mid-2012. There were years of board mismanagement. Musical chairs in the CEO’s office. The company abandoned search. The portal still resembles a digital media site while today’s hottest properties delivered personalized newsfeeds. An identity crisis of whether its a media company versus a technology company, the one which gave Hadoop to the world. An activist investor who rightly blasted the original board of directors and leadership. While their display ads are profitable, they won’t be able to target them as much as other properties. While Yahoo! may still wield a huge global Consumer Internet brand and act as the portal to the web for a massive audience worldwide, it remains unclear how much growth is left for a company already worth around $20B and one that turned down a juicy $45B offer from Microsoft in 2008.

Yahoo! has a secret weapon, however, and her name is Marissa Mayer.

I say “secret” for a specific reason. Now, it’s obvious to point out the company’s powerful CEO – given how well-known Mayer is, but the following bears repeating: Very, very, very few people in the entire world possess her level of operational experience, product intuition, and deep technical networks. People seem to forget these facts, instead choosing to focus on cafeteria policies. Put another way, more bluntly — only a very small handful of people possess the depth of experience she holds, building products for hundreds of millions of consumers and growing up inside one of the Valley’s most iconic, storied, and successful companies from the the beginning. Period.

The reason I’m devoting my column to this tired, overplayed topic to remind all of us just how rare her experience is. Now, let’s briefly review what Mayer has accomplished in less than a year as Chief Yahoo, in no particular order. She recruited a new CFO & COO. She added Max Levchin to the Board (which again, was originally shaken up by Loeb). She helped engineer a partial sale of Yahoo’s position in Alibaba, netting the company much-need liquidity. She helped steer a redesign of the main homepage and taken steps toward personalization of the newsfeed — anyone who has helped redesign a site even for a small company knows how political this task can be. She closed the acquisitions of Stamped, Snip.it, and OntheAir, smartly scooping up excess talent, especially for mobile, in an environment that has too many fledgling and inconsequential startups to begin with. She is drawing more positive attention for Yahoo! than anyone before her, even using Twitter and Flickr herself to communicate with the community. She improved cafeteria conditions (which also makes it more inviting for visitors). She gave employees iPhones. In about eight months since her installment as CEO, Yahoo’s market cap is up roughly 25% with around $4B in liquid assets and fewer than the 14,000+ employees she began with — and that number may come down again as her new “Work From Work” policy takes effect.

The facts above speak for themselves. In less than a year, Mayer has engineered a series of small victories on what could be a very long journey to turning around the big ship that is Yahoo. It may not even be possible to turnaround, but things are much better now. In the future, I’d broadly expect to see further downsizing (including parts of international), more data partnerships alongside their existing relationship with Facebook, many more talent acquisitions as seed-funded companies slowly die off, which will hopefully tie-in to investment in their mobile app ecosystem to extend their consumer-facing brands globally. For instance, given how hard mobile app distribution is today, Yahoo’s audience and brand could drive even more downloads on both iOS and Android if the company properly invested in this direction. Of course, on Quora there are great, detailed threads with suggestions for Yahoo’s CEO and if it can be saved at all.

Yahoo is a $20B that makes about $1B/year in profit. And, it has been in turbulent waters for years. Now, for the past eight months under the stewardship and steering of Mayer, Yahoo seems to be a good track relative to years past. This isn’t your average turnaround situation. Yahoo is a big ship that will take many more months to turn direction. We don’t know where the winds will take the company, but if the last eight months are any indication, I’m optimistic.

Interestingly, it’s Mayer’s presence that intensifies all the chatter. The Valley — and the world — cannot help but watch, which reinforces the fact that despite what popular sentiment may say, Yahoo! still matters to the web and still matters to the Valley, at least for now. But, Yahoo! needs to be turned-around and reinvented. This is Mayer’s clear purpose, and therefore she has the implicit mandate to engineer this by any means necessary. She’s trying to fix morale and culture in her own way. We can expect further reductions in force. She and the company are also under pressure to create a new property to demonstrate Yahoo! can still create. From my point of view, it will be exciting to see unfold, and I have no doubt when her tenure is complete, Mayer will have left Yahoo! in significantly better than shape than we she inherited it.

Photo Credit: Rachael Voorhees / Creative Commons Flickr

The Gillmor Gang — Robert Scoble, Keith Teare, John Taschek, Kevin Marks, and Steve Gillmor — spent a beautiful Bay Area day chatting amiably about Android, Apple, and the GUI formerly known as the Lock Screen. With notifications becoming the default interaction point with email, social, and app inputs, the Gang is split down the middle.

On one side is @scobleizer and @jtaschek and partially @kevinmarks; on the other more correct side is @kteare and me, @stevegillmor. We think Apple has the more elegant if slightly hamstrung solution, while the rest are Android fanboys waiting desperately for the latest Samsung phone. And of course, @scobleizer sees everything through his forthcoming Glassware, or as he joked, being a Glasshole about it. Oh, the humanity.

@stevegillmor, @scobleizer, @kteare, @jtaschek, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

Friendfeed Chat

We wander the streets with tiny computers in our pockets and in our hands. We talk casually to these computers, just like Captains Kirk and Picard talked to the computers on their Enterprises. With the push of a button, our computers give us unprecedented access to the bulk of human knowledge. These computers sometimes talk back to us. But underneath all the noise and chatter of speech, the computers in our pockets communicate with one another in an endless stream of ones and zeroes. Packets whiz through the air, unseen, unappreciated.

Those invisible ones and zeroes floating through the air cost real money. Proletarians like you and I enjoy a small allotment of ones and zeroes that we’re allowed to send and receive. The robber barons who mediate our access to the bulk of human knowledge grow rich even as they reduce the quantity of ones and zeroes they permit us to send. The computers in our pockets yearn for more ones and zeroes, but we, like over-protective parents at a pizza party, cautiously step in to prevent a binge.

There are some, though, that seek to make it easier — and more affordable — to send ones and zeroes through the air. Karma offers a lilliputian device with simple, easy-to-understand pricing. There are no onerous contracts. You are not required to commit to exclusivity to Karma for several years, unlike what the robber barons demand of you.

The Karma device creates a WiFi hotspot that moves around with you, and connects your WiFi connected devices to the Internet. This is just like the tethering option available on your pocket computer; but Karma sends data through Clearwire’s cellular network. Use it at airports and hotels to avoid exorbitant access fees. Use it with your WiFi-only tablet while you’re riding a bus or a train.

The nifty thing about Karma is the notion of “social bandwidth”. It seems a little extravagant to have a device dedicated to getting your little tablet onto the Internet. The same access point could easily service multiple devices. And that’s just what Karma does: it creates a public WiFi hotspot, with your name right there in the SSID: “Scott’s Karma”. Complete strangers can connect to your hotspot, and the Karma service handles all the account creation and billing nonsense. You just say to the world “Hey, here’s a WiFi hotspot you can use” and you’re done.

When someone new starts using your Karma hotspot, they get 100 MB of free bandwidth to consume; no need to pay anything at all. You also get a bonus 100MB for sharing your connection. Early adopters of Karma can probably accumulate a substantial pool of megabytes to use. After your freeloading guests consume their 100MB, they can purchase additional megabytes at reasonable prices. There’s no need to for these folks to own their own karma device: they can just keep using whatever Karma hotspots may be nearby.

Users of Karma get a dashboard display from which they can review their data consumption, see who has connected to their hotspots lately, and buy additional data as needed. It’s all very easy to use.

Karma is not a perfect solution, though. You must have a Facebook account, which for some may reduce Karma’s utility to zero. Twice while testing Karma I had a real opportunity to offer connectivity to someone who needed it, and both times the offer went unfulfilled because the other person didn’t have a Facebook account.

The other strike against Karma is one of simple security consciousness. I think most people are aware of the dangers of connecting to unknown and untrusted wireless networks. Right now, Karma is brand new — it’s not a household name — so when someone sees “Scott’s Karma” in the list of nearby wireless networks, there’s nothing to really encourage them to connect to it. If Karma devices can proliferate, maybe this situation will change.

In the high-tech metropolis of Columbus, Ohio, the Karma device worked just fine, as long as I was outside. Standing at a bus stop on my morning commute, my transfer speeds were just fine. The device reported a 4G connection, and I certainly had 4G-ish speeds.

As soon as I walked into a building, though, the connection would immediately drop to 3G, if it remained connected at all. In most buildings, the connection light blinked on and off, forlornly looking for a signal. This may be due to the quality of the Clearwire network in Columbus. Or maybe all the lead paint blocked the signal. I don’t know.

Sitting in a coffee shop, I connected all of my devices to the Karma network at the same time: Samsung Galaxy S3, Nexus 7, and laptop. Running a speedtest on all three simultaneously produced very disappointing results:

During my tests, only one other person ever connected to “Scott’s Karma”, and that’s only because I asked my wife very nicely if she’d do so. No strangers connected, so I honestly can’t say how the device will operate in its intended use case.

In all other respects, the Karma was an absolute delight to use. It’s small enough to carry in your shirt pocket. I never completely depleted the battery, even after several continuous hours of use. The signal was strong enough for all the tasks I needed to perform while out and about. A little more than a week’s worth of daily commutes consumed only a couple hundred megs of data. I checked email with wild abandon, trounced friends in Words With Friends, and destroyed an impressive number of Resistance portals while playing Ingress.

If nothing else, Karma provides an inexpensive option for getting WiFi-only devices online in the absence of freely available WiFi. Quit paying the robber barons excessive fees for the privilege of tethering devices to your pocket computer. Bypass the hotel’s rip-off WiFi. Be a nice person and help others avoid rip-off WiFi.

update: I confused the device name with the domain name. The former is just Karma, while the latter is yourkarma.com. My apologies for any confusion.

Evernote is requiring its nearly 50 million users to reset their passwords after the popular personal note-taking app became the latest high-profile victim of wide-scale hacking attempts. The breach follows malicious activity at Twitter, Facebook and others in recent weeks.

Phil Libin, Evernote’s CEO and founder, told TechCrunch in an email everything is running, although if you try to access the site things may not work as normal at the moment: “We just pushed out a password reset, so the servers are going to be saturated for a bit,” he wrote. “Everything is up, although response is choppy. There’s no threat to user data that we’re aware of.”

In a blog post, the company said that “individual(s) responsible were able to gain access to Evernote user information, which includes usernames, email addresses associated with Evernote accounts and encrypted passwords,” but that no payment details were accessed.

“We don’t store any user payment info, so no payment info can be compromised,” Libin told TechCrunch. Asked if this was in any way connected to what happened at Zendesk the other week (that breach affected several other sites), he said that is not yet know. “We don’t know about all the details at Zendesk, so it’s premature to comment on that.”

A spokesperson tells us that the suspicious activity was first noticed a couple of days ago, on February 28:

On February 28th, the Evernote Operations & Security team became aware of unusual and potentially malicious activity on the Evernote service that warranted a deeper look. We discovered that a person or persons had gained access to usernames, email addresses and encrypted user passwords. In our ongoing analysis, we have found no evidence that there has been unauthorized access to the contents of any user account or to any payment information of Evernote Premium and Evernote Business customers.

The spokesperson says that in addition to the blog, the company is sending out direct emails and social media.

“[We] encourage any user with questions or concerns to contact Evernote support directly,” she said.

Changes to passwords will need to be made across all Evernote apps that you may use, including Evernote Food, Evernote Business, and Evernote Hello.

With news of data breaches now happening on a regular basis, it remains to be seen what kind of an impact these breaches are going to have of overall consumer confidence of these services — the question is whether users will become desensitized to the idea, or whether they will turn away from them for more seemingly secure pastures. The fact that they continue to happen certainly does put a dark lining around some of the optimism we’ve seen about the evolution and promises of putting our life in the cloud.

Updating.

Here’s a rather unfortunate development: The proliferation of recording devices and instant distribution is matched by our ability to falsify the information they produce. While they don’t exactly cancel each other out, they do have the awkward effect of turning an age of the most rigorous documentation into an age of jaded (and justified) suspicion.

Take this business of the meteor. I don’t mean the imperturbable Russian who lowered his visor against a cosmic event of beauty and sublimity. I mean the rest of us. Be honest: How many of you, upon first seeing video of the meteor, immediately began thinking of the ways this could be a hoax or viral stunt? Would there be several more videos like this, and when they investigate, it turns out the meteorites were huge Skittles? That’s certainly what I thought, or along those lines.

Or perhaps you remember the amazing photograph published by Reuters of the becrutched Libyan rebel firing an RPG. It was so incredible that to many, it was literally incredible, and immediately a campaign was waged to expose this obvious fake. Of course, it turned out to be a completely genuine (and stunning) piece of photojournalism.

On the other end of the spectrum, consider the fabricated video of the golden eagle snatching a kid. A similar skeptical effort was engaged in over that, but it had its defenders as well. After all, it looked quite real, even if in retrospect one can pick out some slightly stiff animation.

Indulge me in a little thought experiment, though. What if the video was a little better-done, and for some reason the creators and their friends agreed to never speak of it again? I don’t think it’s such a stretch to suggest that the video would be entered into the ledger of history as fact. Golden eagles would be on the record as having attempted to carry off children in city parks. Their fabrication would have become truth.

Of course, that didn’t happen. But do you really think it never has?

Sure, we catch a few in the act. War photographers, or their editors, have been attempting to tart up scenes for years with a little extra smoke, or cropping out a McDonalds, or what have you. Sometimes their clone-stamp antics are detected — good for us. But it won’t always be that easy, and the stakes aren’t getting any lower.

How long before a murder case turns on a faked photograph that can’t be proven beyond a reasonable doubt to be so? How long before a politician loses his seat because someone made a sex tape with his face superimposed skillfully enough that no one would doubt it? How long before a war is touched off because of a set of “leaked” photos of a plutonium-enriching facility?

The truth has always been something of a matter of trust rather than absolute knowledge. But that distinction has always been somewhat academic — a matter for epistemologists to discuss with ethicists. The day is not far off, you can be sure, when the inability to tell the difference between a fake and real document (in the broadest sense of the word — a record of an event) is something we have to deal with every day. Counterfeit is the new real, and vice versa.

In a way, we’re no worse off than we were before. It didn’t take long for the photograph, for a time unimpeachable in its veracity, to be abused and made a tool for fiction as much as anything else. Fakes and frauds are a part of nature. But it’s getting to be difficult to accept the validity of any event or piece of media whatsoever, a situation that may stress our organs of skepticism to the point of harm.

It’s likely a wild goose chase, going after things like authenticity, truth, and permanence at a time when those are increasingly relative terms. But they happen to be important, at least to me, so we should at least keep an eye on the state of things (sad as it may be). To paraphrase that great epistemologist, Donald Rumsfeld, we must question our known knowns and admit our known unknowns.

As Nokia tries to separate out its mapping business and make it a standalone entity earning more than 1 billion euros per year, it has stripped its name entirely out of the unit. This past week, the company said it would take its name out of all navigation products and instead brand them with the word “HERE” — as in HERE Maps, HERE Drive and HERE Transit.

Yes, it does sound a bit strange. The real reason likely has to do with the fact that partners like Amazon and Mozilla, which license Nokia data for their hardware, might be touchy about having “Nokia” branding inside their products.

But in bureacro-speak, Nokia’s reasons are a bit different.

“HERE is a name that I think signifies what I call an ethos in cartography. HERE is about a sense of location,” said Michael Halbherr, the Nokia executive who oversees the company’s location and commerce unit, in an interview at Mobile World Congress in Barcelona this week.

“If you look at the brand, it’s the same font and the same color logic,” he said. “There are other companies that do it successfully with Microsoft having the X-Box, Bing and Skype brands.”

With the acquisition of NAVTEQ for $8.1 billion in 2007, the company brought in a licensing business that helped the unit bring in 278 million euros ($364.7 million) in the fourth quarter of last year.

That business handles four out of every five cars with an in-dash navigation system, Halbherr said. It also recently bought Earthmine last year for the company’s 3D-map making software, and partnered with Mozilla to bring location and maps to the Firefox OS.

Nokia views the model for maps as one that’s mostly about licensing with partners like Amazon and Ford, although they’re exploring commerce partnerships with companies like Groupon and recently launched a direct-to-consumer maps for iOS.

They face a competitive field including Google Maps, Microsoft’s Bing Maps and MapQuest among others.

Halbherr thinks they got a boost from the Apple Maps debacle, although he wouldn’t specify if it actually contributed to new deals.

“What happened when Apple launched maps was that the focus moved to quality and that’s clearly, clearly what is good for us,” he said. “To be a full mapping company, you have to drive the streets, you need data centers. It can look very simple and automated but the last 20 percent takes 80 percent of the work.”

He added, “You will end up in the content business if you want to build a great maps product.”

The downside to pet projects is that they invariably teach you something you didn’t really want to know. This time, it was that most of the people who do what I do are doomed.

Let me explain. Mostly for fun, I’ve recently built¹ a news aggregator I call Scanvine, which ranks stories and authors and publications by how often they’re shared on social media. (TechCrunch does quite well, thanks for asking.) So I’ve been paying attention to a much broader spectrum of news during this last week…which was also the week that Marissa Mayer announced that Yahoo! would no longer condone working at home.

Oh, the hysteria that ensued. The Los Angeles Times hosted a special live video chat on the uproar. Slate had duelling columnists argue the issue; neither of them, remarkably, even mentioned the possibility that perhaps not all companies are alike. The sheer intensity of massive overextrapolation from a single data point really began to feel like:

The upside of Marissa Mayer disallowing all telecommuting in US economy is, I’m assuming, a welcome end to “Work from home!” spam.—
Paul Kedrosky (@pkedrosky) March 01, 2013

The New York Times and Wired and The Atlantic and nearly everyone else fell back on context-free speculation. (And in Maureen Dowd’s case, content-free as well.) Only a tiny minority — notably Alexia and Business Insider’s Nicholas Carlson — actually dug out some of the reasons why the decision was made.

So was it the right decision? Well, as an expert on the subject by virtue of having worked at home for many years, both as a full-time novelist and as a software developer, let me explain: oh, for God’s sake shut up and stop asking already.

Working at home has some benefits and some disadvantages, for both employers and employees. Over time, the benefits have been increasing and the disadvantages diminishing, but Marissa Mayer judged that for the very specific case of Yahoo! today, the latter were outweighing the former. Was she right? Maybe! Who knows! Does it really matter, because it’s a trend-signifying bellwether? Probably not! Is all this handwringing completely ridiculous bordering on insane? You bet!

What’s really highlighted here is not just that many traditional ‘journalists’ are phenomenologically indistinguishable from ‘bloggers’ these days, if there’s any distinction at all any more: it’s that many are not even particularly good bloggers. I’m beginning to realize that the scattered collection of one-off blog posts I find via sites like Hacker News are both more interesting and more thoughtful than most mainstream-media opinion, context, or analysis pieces. Passionate part-timers with a deep knowledge of the subject matter who also happen to be good writers are a lot more interesting than most mere scribes.

Of course this doesn’t apply to what I call High Journalism: investigative journalists digging out hidden stories, international journalists reporting from wars and disasters, the fifth estate holding the feet of power to the flames of publicity. But the problem is that most High Journalism (which is expensive and has a limited audience) has historically been financed by Low Journalism: entertainment, sports, classified ads, etc.

Which is pretty bizarre, when you think about it. It’s as if the space program and Medecins Sans Frontieres were funded by the profits from Chicken McNuggets and Big Gulps. So, of course, the Internet inevitably targeted this economic discontinuity, and Craigslist killed the classified ad, and the Entertainment and Sports and Life sections of magazines and newspapers are being eaten alive by TMZ and Gawker and Deadspin and Buzzfeed–the media equivalent of high-fructose corn syrup–and now everyone’s writing empty pieces about Marissa Mayer’s decision because it’s a hot-button issue and they need the pageviews and the mindshare and the ads.

But that’s a loser’s game. “Will Journalism Go The Way Of Whaling?” asks the title of a recent New York Times conversation between David Brooks and the great Gail Collins, and I fear that the answer is mostly yes. A few of its dinosaurs will evolve into eagles, but most will be eaten alive by the modern mammals–not just because they’re faster and cheaper and more nimble, but because, as this whole Marissa Mayer work-from-home kerfuffle shows, they’re better, within their particular domains. I hope High Journalism finds a new way to pay for itself soon, because the Low Journalism on which it’s riding, once a colossus, now has feet of clay.

¹I’m only a part-time journalist: by day I write software. Whew.

Image credit: Advancing Gingerly, Flickr.

Editor’s note: Jeff Cavins is the CEO of visual collaboration company FuzeBox. Follow him on Twitter @cavwave.

I probably won’t ruffle too many feathers when I say very few people love meetings.

As much as we’d like to think otherwise, meetings just don’t elicit the same emotions as, say, space flight. Of course, that doesn’t mean they’ll stay that way forever. In fact, looking down the road just three to five years, there are some incredible technologies that will hit the mass market and change the way we communicate with coworkers, customers and colleagues. I’d wager that within that timeframe, meetings are going to become less like Office Space and more like Star Wars.

Using new technologies like 3D spatial binaural audio, gesture interfaces, and super-high-resolution video, we will be able to build incredibly immersive (and relatively inexpensive) experiences for workers to connect more effectively. Even new technology that allows visually stunning projection of holograms will begin to find application in the meetings arena. Although this sounds like sci-fi, the idea of near-real remote communication is a Holy Grail for productivity.

We are inheriting a world full of pixels. In cities such as San Francisco, New York and London, the average 14-year old is going to school with $1,500 in technology in their backpack. And the products that they carry and use throughout the day are screens and displays that enable them to communicate visually and in real time.

Meetings are going to become less like Office Space and more like Star Wars.

Studies have long shown how audio and video cues are essential aspects of human-to-human interaction. The better and more lifelike we can make our remote meetings, the better we can work together. Expressions and gestures are critical for conveying body language; in fact, 60 percent of all communication is conveyed via body language.

None of this is as far away as it seems. We’re seeing a lot of this technology in niche use cases today, and things are developing very quickly. The personal jet of corporate communication, a $100,000 telepresence system, can now be recreated using an app and a few UHD TVs over the Internet with a $100 Logitech camera. That would not have been possible two years ago.

That said, here’s a brief glimpse into the technology that will power a not-so-distant future.

Ultra HD Live Video Streaming

Pervasive screens and the theme of pixels everywhere are a major trend in our lives: smartphones, tablets, phablets, and hybrids. These form factors are heading in two different directions – small and portable, and large and immersive.

Everyone is fixated on mobile solutions that sit in our pockets and move with us as we go about our lives, but the other side of this coin has yet to be tapped: the big-screen market of TVs and 30-plus-inch monitors and the way these larger screens and densely packed pixels arrays will enable large-dimension personal telepresence. These new UHD monitors, placed in our homes and businesses, could lead to a whole new set of more immersive, high-end applications for meetings.

Ultra HD-quality screens and streaming of 4K video-conferencing (which, by the way, is four times the resolution of your retina screen) can represent the ultimate meeting experience. When the quality is so good that you feel like you can touch the person on the screen, your eyes are tricked into thinking it’s real, especially when projected onto a life-sized screen. This incredible level of fidelity is available today on high-caliber telepresence systems. Unfortunately, they cost millions of dollars and requires camera hardware that is not available on the mass market, not to mention the prohibitively expensive bandwidth required to actually use them.

Luckily, software is ahead of the curve and can help close that hardware gap. In 12 months, we’ll see $100 cameras capable of capturing a 4K-quality video conference, the release of codecs like H.265 that process the live video to fit through public Internet pipes, and $5,000 Ultra HD screens playing it on the wall.

And this isn’t just for business. There’s a reason why companies, from Apple to Intel to Samsung, are pouring billions in R&D into this space. On the consumer side this is a Trojan horse into the living room.

3D Binaural Audio

Ever been on a conference call with multiple people where folks continually talk over each other? It’s a mess, and nearly impossible to resolve the voices, or better yet understand what is being said. The issue is that the voices are being pushed to you from a one-dimension mono speaker with super-low fidelity. Not only do bad audio calls make your brain hurt, they actually reduce cognitive function and introduce fatigue as you strain to make sense of the conversation. Thankfully, there’s a software-only solution: 3D spatial, binaural sound.

3D spatial binaural sound is where meeting attendees actually sound like they’re coming from different parts of the room (to the left, to the right, closer, or further away), which in turn allows the brain to unlock and understand simultaneous voices. 3D sound is also possible to implement regardless of the microphone or speaker setup. The result is something akin to magic.

Demos have been around for a while, but real-life use cases have been notoriously difficult to implement. Luckily, I can tell you with confidence that 3D audio is fewer than 12 months away.

Gesture Interfaces

Many of us have seen Minority Report, but most of us probably remember the gesture-based, crime-fighting computer interface more than we do the plot. Technology such as the Leap Motion sensor and Microsoft’s Kinect are making this a possibility. In the realm of meetings, this means easily creating virtual breakout rooms with a wave of your hand, gesturing documents from your work screen to your meeting screen for instant sharing, and detailed, no-touch manipulation of images and video. Or effortlessly mute participants with too much background noise and reorganize video feeds.

Combine the gestures with tactile feedback and projected interfaces and you’ve got the beginnings of a life-like holodeck.

Holograms

The video of Tupac Shakur performing at the Coachella music festival in 2012 drew millions of views on YouTube. Behind the Mars-exploring Curiosity Rover, it was the most delightful technological feat of 2012.  Holograms – while difficult to pull off and still prohibitively expensive (the Coachella performance reportedly cost $400,000) – will become the new private jet of communication and threaten to unseat telepresence as a “must have” by CEOs and leaders of industry.

Questions remain about the feasibility of creating holograms in realtime (the company who created Tupac is now bankrupt), and they’ll probably be fairly noisy without curated video content to project, but it certainly remains a possibility that holograms could crack C-level Fortune 100 suites in three to four years.

Either way, these four technologies are not as far away as they might seem. And it’s likely that in just a few short years, the way we communicate will be on par with the furthest reaches of our collective imagination just 30 years ago. So what’s left to invent once we get to holograms, pervasive life-like screens, 3D audio and next-gen interfaces? Will this be the opus of innovation in communications? Well, there’s always teleporting, but that’s just science fiction.