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Is This iOS 5? Dunno, But It’s Likely The Right Idea

Could it be? Is this it? iOS 5?! I honestly have absolutely no clue. But it certainly seems like it at least could have the right idea.

Tomorrow morning, Apple is set to preview iOS 5 for the first time during the WWDC keynote. It’s likely that developers will get access to the initial build as well, so they can start working on updating their apps to take advantage of all the new features/functionality. But some select developers are believed to have already seen iOS 5 (notably those who are likely to present on stage tomorrow). And while not a lot has leaked out, we have heard a few things supposedly coming: widgets, Twitter integration, and revamped notifications.

The last two are particularly interesting given the image above. Again, no clue if it’s actually real or not, but the idea might be right. Notifications that come down from the top bar could be how Apple ends up doing things in iOS 5. After all, this would mimic already existing functionality — when tethering, a blue strip appears along the top; when on the phone, it’s a green strip. Might notifications (or at least Twitter notifications) produce a gray strip?

If so, when clicked on, what happens? Does it launch the Twitter app? Or are you taken to a notifications page to show you all the notifications you’ve missed? Or does it actually copy the Android idea, where you pull down this menu to display all your notifications?

This concept isn’t quite as slick as some of the mock-ups we’ve seen over the past couple of years. Nor is it as slick as some of the jailbroken ones — which actually led to a new Apple hire. But again, it does fit in with the current iOS workflow. That may or may not matter at all. Regardless, this way of doing things would be much better than the current pop-up method for Push Notifications.

Before you go yelling “fake” on the obvious things, a couple notes. First of all, yes, 11:54 PM is in the future — in the United States. But if the Weather app is to be believed, this is clearly a European version of iOS (note the 23 degrees Celsius in the icon instead of 72 degree Fahrenheit as you would see in the U.S.). Second, the Camera app icon is totally different, and looks a little odd being all-black, but who knows, maybe it’s changing. The icons are in the “correct” default order. Finally, if the talk of deep Twitter integration into iOS 5 is to be believed (we heard a bit, others have heard a bit more), it’s entirely possible that these new-style Twitter notifications could be working in iOS 5 right out of the box.

But again, who knows — no one outside of a handful of people before tomorrow morning. Well, and the guy below.

Update: At the very least, we’re hearing “right idea”.

Information provided by CrunchBase


Dogs On Tiny Rocking Chairs: Will A Groupon IPO Injure Them?

Hurrah! It’s time again for my favourite week of the year: the week when tech writers are given a much needed break from the day to day drudgery of reporting and analysis and are instead encouraged to spend time away from their keyboards; having dinner with family members, taking long walks with husbands and wives, kicking around a ball with children.

Yes indeed tech writers, stop all the clocks, cut off the telephone, prevent the dog from barking with a juicy bone: it’s time for International Fuck It Let’s just Phone It In Week.

The week was kicked off in vintage style by the Financial Times’ Cardiff Garcia with a post entitled “How to write about the Groupon IPO when you don’t really care“. The post, which opened with the line “Asinine joke about how this IPO isn’t the kind of discount you’d find on the Groupon site itself. Shoot yourself” perfectly embodied the spirit of IFILJPIIW, managing to both entertain readers and show total contempt for them at the same time. Kudos, Cardiff.

Meanwhile here on TechCrunch, our very own Erick Schonfeld also chose Groupon as the subject of his IFILJPIIW post. With classic Schonfeldian pluck, Erick didn’t even bother writing a single fresh word: instead he just copied and pasted one of his own tweets! Brilliant.

Traditional media got in on the fun too, with the New York Post’s Nina Mandell employing the classic IFILJPIIW trick of reposting an article that has been written four billion times before, and simply updating the headline and date. The result: “1500 people show up for 16-year-old’s birthday party after she forgets to set Facebook settings“. Well played, Nina! (Not to be outdone, the Washington Post’s Rob Stein reports that “Cellphones [are] ‘possibly carcinogenic‘” LOL!)

Of course, there are publications for which IFILJPIIW poses an annual challenge: how to mark the event when your writers already phone it in most weeks? Business Insider’s Henry Blodget solved the problem with deft irony by massively over-reporting a virtual non story. Unphoning in a total phoner! Brilliant! Now back to the slideshows of cute programmers!

Speaking of cute, here’s a video of a duck following a puppy. What do you think of ducks following puppies? Tell us in the comments!




The Power Of Online-To-Offline Is Moving Beyond Local Commerce

While the idea of ‘online to offline’ for purchasing is proving to be powerful in the local commerce world, the trend of linking the physical world to the web is producing a number of startups that are innovating beyond just purchasing from local merchants or finding a product nearby. Many of the most interesting startups that have emerged over the past year or so are making our lives in the real world better; using data, location and curation as their competitive weapons.

And although these startups have presences on the web and mobile devices, they are also disrupting services in the physical world. So who are these startups that are taking the ‘online to offline’ trend to a whole new level? Below I discuss five different types of startups taking advantage of this trend: Uber, J. Hilburn/Trunk Club, Jetsetter, GetAround, Zaarly and Airbnb.

Uber

Take Uber, which allows you order a private car from an iPhone app at discounted rates. Basically, Uber allows you to order a black car to come to your location via the mobile app, and then watch it come to you as the app tracks the car via GPS. Payments are handled automatically by charging the card you have on file, and it costs at least 50% more than a taxi. The online to offline connection is obvious, as you order online for a car that picks you up in the physical world.

While Uber cars are more expensive, the benefit is that you don’t have to wait for a cab. All cars are town cars, so you’re getting a luxurious ride. Uber tracks all cars, so in case you leave something in the car, you’ll be able to track your car down. The startup has a loyal following in San Francisco and has since expanded to New York. And the service will eventually launch in Boston, Chicago, Seattle, and D.C.

The ability to pay and book a car online (based on your present location no less) and then use the car to arrive at a physical destination is no doubt disrupting the private car and taxi industries.

J Hilburn/Trunk Club

Want custom-designed clothes or a personal shopper to pick your wardrobe? No need to visit a custom tailor in your town or hire a stylist from Saks. J Hilburn and Trunk Club are two startups disrupting the men’s fashion industry and bridging the online to offline worlds.

J Hilburn offers an e-commerce site that allows men to buy custom-designed shirts and trousers online. The beauty of the site is that it offers designer-like styles for less. The company also employs a salesforce of 800 “style advisors” across the country, who make appointments to visit customers in their homes and offices. The advisors measure the customers, show them swaths of fabric, and help them select a few options. Revenue is growing fast, and men can find affordable custom made clothes by simple entering their measurements and sizing on the web, and have the clothes delivered to their door.

Similarly, Chicago-based Trunk Club offers men personal stylists to pick out clothing, which is delivered to customers’ homes. Men sign up via the website, pick preselected looks, and answer a small questionnaire with questions like “where do you shop right now?,” “what’s your favorite item in your closet,” sizes, price and color preferences and more. A stylist will then call/contact the customers via their preferred method of communication (many choose email). Once the stylist gets an idea of the customer’s style, he or she will send a “trunk,” of clothes and ship out via Fedex a handpicked collection of shoes, pants, shirts, and more. Clients keep the clothes they want and send back the items that don’t fit. You are only charged for the clothes that you keep.

Like J Hilburn, The Trunk Club buys clothing at wholesale and sells it at a normal retail markup. There are no sales/discounts on clothes and Trunk Club stocks its own inventory. Customers don’t pay anything extra for them as they would in a fancy department store.

Once again, an online experience is disrupting an offline experience in the physical world. In this case, Trunk Club and J Hilburn are making the physical acts of trying on clothes, finding custom made clothing and picking out clothes that match your style much more efficient by adding an online component.

Getaround

Getaround, which just won Techcrunch Disrupt in New York, is a car rental market place where you can rent a car by the day, hour or week through a smartphone app. Getaround’s all inclusive package, which includes insurance, 24 hour roadside assistance, a Getaround car-kit, iPhone app and a web app makes it easy for people to conveniently car share anywhere.

While GetAround is still new, the model has a lot of promise. GetAround disrupts car sharing similar to the way Airbnb disrupted the home rental and hotel industries. Both link the ability to monetize sharing of a physical property.

As of last week, the company had already signed up 1,600 cars for sharing, which is 20 percent of car-sharing giant Zipcar’s fleet of 8,000 cars.

Jetsetter

I am a huge fan of Jetsetter (and so is my colleague Sarah Lacy). The flash sales site for luxury travel has been innovating the hotel industry by allowing consumers to access the best hotels in the world at discounted prices. And the site goes beyond just commerce, even adding an editorial component to accessing information about hotels.

The company, which is a subsidiary of flash sales giant Gilt Groupe, has just unveiled a brand new service which essentially brings services of travel agents online. As Sarah Lacy wrote in her review, Jetsetter’s travel planning service is essentially a travel agent 2.0. Jetsetter is leveraging its network of more than 200 travel writers to help members plan itineraries for vacations. The service isn’t cheap. It costs $200 for three hours of consultation and a detailed itinerary, that their specialists will book and arrange for you at no additional cost. If you book a hotel through Jetsetter, you get $100 back.

While many people don’t use travel agents anymore because booking is so easy online, many travel booking engines miss the personal curation that that travel agents provide.

Airbnb

Airbnb, which launched in 2008, has been disrupting home-sharing for over three years now. As you may know, Airbnb lets anyone that owns space fit for accommodating travelers, whether that’s a couch in a small apartment or entire villages, post that space as a listing on its website and connect potential renters to its respective owners.

The company takes the physical act of renting rooms or spaces in other people’s homes and makes it much easier for users to access this online. The platform grew 800 percent in 2010, and is now being valued at $1 billion.

Airbnb is one of the best examples of a company that brought an online component to a real-world action. And Airbnb continues to disrupt additional markets as well. While there have been bumps in the road, the startup’s success is a testament to the power of the online to offline model.

Zaarly

Backed by an impressive list of investors, Zaarly, a web and mobile service that connects buyers and sellers in a localized market place. It’s sort of like a mobile-centric reverse Craigslist service.

On the site or via the startup’s mobile apps, you post what you’re looking for (i.e. cupcakes), how much you’re willing to pay for it and how soon you need it. Zaarly will then share your request in the local community through the platform, and also allows you also post your request to Twitter and Facebook.

People or businesses nearby can access and see your request and then anonymously message each other to complete the transaction of delivering the cupcakes you want. Sellers bid for the tasks, and the buyer chooses the best one, with Zaarly connecting the two via an anonymous Twilio-powered phone number. You can use cash or Zaarly’s integrated credit card payment system to pay for the transaction.

Zaarly just launched less than a month ago, so it should be interesting to see if it can find the success that Craigslist experienced.

These are just a few of the startups which are making improving our lives by linking the offline world online. Of course, the idea of linking the physical world online isn’t a new phenomenon. OpenTable and CraigsList have been doing this for years.

But of late, there’s been a proliferation of startups that have adopted the OpenTable or Airbnb model of linking online to offline  that have emerged. These startups are continuing to disrupt industries, such as car-sharing, customized travel planning, personal shopping, and more that have not had strong online presences. Essentially these startups make industries in the physical world more efficient, and thus make our lives better. The consumer is empowered with a better experience with the addition of a mobile technology or a web-based platform that saves time and sometimes money as well.

There’s no doubt that this trend will certainly continue as more startups bridge online to offline. It’s just a matter of which industry will be disrupted.


Making Time

Why Netflix rocks is the same reason that tomorrow’s iCloud announcements will rock. It’s not about the technology, it’s because of the technology that counts. You can feel it if you make the time to. Making time means what?

One evening last week we sat at the bar downstairs at 1 Market after a long workday. John Taschek and several others were extolling the virtues, no, the imperatives of motorcycle ownership. You know, the usual keep the motor running head on down the highway testosterone. The kind of stuff Gary Busey still can’t get out of his head no matter how much he resists wearing a helmet. Gary, you’re fired.

But hiding in the camaraderie was a simple truth, that the 15 minute commute into the office on his BMW gives Taschek the time to think. And what we’re going to hear tomorrow is the result of a lot of time to think. And why Microsoft hasn’t figured out how to make that time.

iCloud is a state of mind Apple has been working toward for many moons now. Not so much the OK now we get cloud computing kind of mind set, but the OK now we are ready to apply our methodology toward the sweet spot of our competitors kind of value proposition. You hate iTunes and the stupid sync cable? OK, it’s gone. You feel locked in to the Apple restrictions on what you can do when you want to do it? OK now they’re removed. You want a real bit rate, a real screen, a real sense of ownership again?

These are big promises to deliver on, but from the look of things, we’re about to get them. If we read this right, for starters we’re going to get full quality streaming of the music of our times. For those of us who grew up not so much listening to music as living it, the biggest inhibitor to downloading music was the lack of full quality, the state of whatever art we are at. The Apple codec is excellent, but you could only get that by buying the CD and ripping it. A good compromise between hard drive consumption and quality, nonetheless it still sucked given the fact that my record store has devolved to Starbucks.

The alternative, downloading from iTunes, or worse from Amazon, is capitulation: 128 or whatever pseudo quality iTunes is or Amazon’s MP3. Give me a break with MP3. It’s like putting auto-tune on Aretha. The very thing you can’t quantify is the stuff we’ve been wanting to pay for ever since Napster. If you don’t know what I’m talking about, that’s OK, but trust me, up until maybe tomorrow I’ve only bought the iTunes thing out of necessity.

Let’s say for grins that tomorrow iCloud performs a checksum on our files on disk and gives us a stream version at full quality. If we’ve bought the CD for its liner notes, it gives us the liner notes on the iPad, not just the Mac like the Hendrix Anthology. If I’ve bought the latest Neil Young record on iTunes because there are no record stores left on Sunday or any other day, let me pay the iCloud freight to upgrade to the real deal. Let’s say the algorithm is that if I’m willing to give you access to my credit card on a monthly subscription basis, I’m trustable enough to get access to the real product, not the one with the digital condom desensitivity layer.

Seems like a minor nit pick to you? Much ado about nothing, this 60′s post yuppie yearning for the good old days. Whatever, when an artist like Lady Gaga or the Black Keys taps into what used to be called show business at a meaningful soulful level, the resultant force has only recently been matched by social media. Just what do you think Twitter is all about? What I had for breakfast? No, the context of our times. We live, we die. What happens in between?

This sense of ownership I mentioned, it’s the iceberg just below the water line. The new sense of owning is what the Cloud is all about, the understanding that to the best of our abilities, our access to who and why we are will remain constant. I’ve long since abandoned the notion that because I have something stored on a hard drive or a disk, I own it. In fact, all I own is an object for which the reader has vanished, or the media has corrupted, or the basement has flooded. Netflix is now my basement, cool and safe and shareable.

What I really want is something I can count on, and iterate on, and share with my world, and be shared with. I think it’s very possible that what Steve Jobs will show tomorrow has that same goal in mind. He grew up loving Dylan and the Beatles. And he delivered them, or almost. Unlocking the last foot, the bits, that is something really big. If he turns Apple TV into the flagship of the digital revolution, I’ll gladly pay the freight. And for those who say they don’t want an Apple-owned world, this will open the door for Google as it has with Android. Who knows, even Microsoft may be able to get a piece of the action.

But for Microsoft to be more than an afterthought, they have to make the time to think. Think about what we want and need to live our lives to the fullest. If that means think about a world without Windows in order to understand what we want, that’s a tough one. The usual logic about Windows, or Office for that matter, is that 97% of the world’s on it so it’s not going away. But if you own an iPad, 100% of Windows and Office has gone away. As I started to write this, Pages pushed an update with the new document button replaced by a + sign which when clicked gave me a bunch of iCloudy-looking choices. IDisk?

In the World of iPad, MobileMe is like saying I’ll have a slice of pizza pie. Does that mean two slices? The iPad is MobileMe, and MobileYou too. It’s become for the most part the place where I make time to think. Spare me the Apple fanboy jibes; I’m a fan of big visions that deliver. Besides, something about what’s coming tomorrow makes me think this will turn out well for more than just Apple. It goes back to Netflix and our search for something to watch on a weekend night when the kids are asleep or, in the case of the teenager, taking care not to party too hard.

So we’ve seen all the stupid romcoms and learned that theCuban Missile crisis was actually resolved by bands of warring mutant superheroes. Now I’m on Netflix trolling New Releases, deep in the More button view. If you want to truly grok the depths of mediocrity of Hollywood, go there with me. And then salvation In the strange form of the Scottish guy who appears after Letterman, a Craig Ferguson special shorn of the oh la las and innuendo that are required on broadcast television, and replete with all the funky obscenity and drug references of his dissipated youth. In short, the real full quality stand up of a very funny guy. And as we laughed and cringed at his stroll through our not so secret inner sanctum, he reminded me of what is possible when we put our minds to it. Born in the mix of mediocrity and limitations, carrier lock down and conformity masquerading as 50′s sensibility.

It may seem like a small thing, a foul-mouthed talk show host breaking free for a moment on a streaming connection. But that’s the stuff from which great things came, the Goon Shows from the halls of the straitlaced BBC, your 19th Nervous Breakdown, Jeff Beck’s A Day in the Life at the Rolling Stone Anniversary Concerts, Scoble’s photo on the Edwards campaign plane, the Dylan outakes, the iCloud. It’s an alternate show business that will inevitably swallow the current version and return us to the epicenter of the creative renaissance we are so lucky in which to be born.


Domain Dollars: Pay.com Now Up For Sale

We just wrote about the sale of Social.com, which will auctioned off this week at DOMAINfest Barcelona with an opening bid of a whopping $5 million. The current record holder for the highest sale of a domain is Sex.com, which sold for $13 million in April. And today, we hear a new domain is on the market which could also bring in millions.

Pay.com is now listed exclusively for sale with DomainAdvisors. The domain company’s CEO Tessa Holcomb seems optimistic that the domain will command a “multi seven-figure price tag.”

The time seems to be right for the domain to bring in big bucks, as the payments wars heat up between players like Google, PayPal and Square. Google just unveiled their mobile payments technology, Google Wallet; and Square’s disruptive payments platform is continuing to grow like gangbusters.

PayPal also has a massive presence in the payments space, and is fast approaching 100 million users.

It should be interesting to see if a payments or financial company does snap up the domain. What do you think? Will Pay.com pay up more money than Social.com or Sex.com?

Photo Credit/Flickr/Amagill


Prediction: Facebook Will Surpass Google In Advertising Revenues

Editor’s note: Continuing our exploration of how Facebook could eat Google’s lunch, guest author Hussein Fazal makes the case for Facebook’s potential advantage in advertising. Fazal is CEO of AdParlor, an ad management and technology company for Facebook campaigns.

Not too long ago—the common perception was that Facebook advertising did not work. Why would a user notice an advertisement with a small image discretely tucked away in the right-hand column? In fact, most users were building up their “banner blindness,” and ignoring the right-hand column altogether.

However, much regarding Facebook ads has changed since then. Changes in profile design encouraged users to provide more complete information and advertisers became educated in the value of hyper-targeting. Facebook’s ad serving algorithm improved dramatically and the launch of the Ads API allowed for an additional layer of intelligence to be built on top of that. Gradually, right-hand column marketplace ads became more effective for all types of advertisers—while Facebook concurrently grew its sales team to push out premium ads to brands and agencies. With all this progress, eMarketer estimated Facebook’s ad revenues at almost $2 Billion in 2010 and over $4 Billion in 2011.

Despite all this success, Facebook’s revenues are still far behind the search giant, and claiming that they will surpass Google is a bold statement. However, there is a very clear path for this to happen and it is simply a question of when. The timeline will be dependent on how aggressively Facebook executes on their advertising products. The fundamental reason why I believe Facebook’s revenues will surpass Google is the untapped power of social advertising. The concept that your friend “likes” and endorses the content behind a particular ad unit changes the game.

Data from over a hundred billion Facebook marketplace (right-hand-column) impressions that AdParlor has managed shows indisputable evidence that social ads produce a significant jump in performance. In several cases, we have seen social marketplace ads double the Click-Through-Rate (CTR) and deliver 5-10x the volume of impressions at the same Cost-Per-Click (CPC) bid compared to regular marketplace ads on Facebook (plain-vanilla display ads not socially targeted). Combine that with a lift in brand recall (1.6X), message awareness (2X), and purchase intent (4X) and we can see why social ads is an extremely powerful product. However, to see the real benefit, we need to look beyond the right-hand column ads and see how social advertising can be applied in other areas. Data from Nielsen shows a similar trend:

Display Advertising

When looking at online advertising revenues as a whole, the IAB reports that roughly a quarter come from display. With over 2.5 million web sites having integrated with Facebook Connect and 10,000 new ones joining daily, Facebook is building up a huge network of external web sites with deep Facebook integration. The opportunity for these sites to display advertising that melds contextual and social is a stone’s throw away, and something that Facebook can aggressively turn on if it so chooses.

To take things further, as “like” buttons become ubiquitous across the web, user profiles are growing with data on what they do, buy, and endorse. While Google and others leverage re-targeting, Facebook will be able to take it one step further with social re-targeting. If my significant-other visits Nordstrom.com and “likes” a pair of boots, that advertisement could now follow both of us around the web.

Every few years, a new layer is built on top of traditional display advertising (contextual, behavioural, re-targeting) but we haven’t seen innovation in quite some time. Social will be the next fundamental change, and Facebook is positioned to take advantage of it.

Search Advertising

The same IAB report shows that roughly 45% of online advertising revenues come from search. The reason why search is so much more powerful than any other medium is because it targets users that have explicit purchase intent. For example, if I search for “car insurance,” I have a very real interest in making a high value purchase. Insurance providers pay big dollars to Google for these clicks knowing that they have a good chance of converting that user into a sale.

Alongside Facebook’s deeper integration with Bing, it is inevitable that at some point we will see advertising that combines the power of intent-based search with social recommendations. However, this will be dependent on how much users are willing to share and “like.” Perhaps aggressive campaigns by car insurance providers (“Get $100 off your premium if you ‘like’ us on Facebook”) will allow us to one day search for car insurance, and see which provider each one of our friends is with. This will undoubtedly be more powerful than traditional search.

Even with this layer of social, in order to be successful, search market share must be won. With Facebook’s social graph, they have the first real opportunity at dethroning Google and winning that market share. Whether Microsoft ends up selling their money-losing search business to Facebook as a starting point, or whether Facebook builds an independent search product from the ground-up, this is where the biggest impact will be made in increasing Facebook’s advertising revenues relative to Google.

Mobile Advertising

With over 250 Million active users accessing Facebook via their mobile device, Facebook is building up an audience on the hottest emerging platform. With free and popular iPhone, Blackberry, and Android apps available, Facebook has yet to serve up a single advertisement on mobile and doesn’t seem to be in a rush. However, things may be changing with a small but targeted recent acquisition. It will require some work to figure out the right format, but again Facebook is at a huge advantage with the user base it has and the social graph that connects these users.

The U.S. local online ad spend is estimated at $20 Billion – which is why Google was so interested in Groupon. Now combine local with mobile and social—and you have the blueprint to build a money-spitting machine. Facebook could theoretically serve you an advertisement like this directly on your phone—“You and your good friend John are a block away from each other, you both like Pizza and its lunch time, go to Pizza Hut together and save $5 on your order”—of course with less words and more pretty pictures.

Now that the mobile advertising dollars are finally starting to materialize, we still have not seen the hockey-stick curve that we all expected. This will occur when more innovative mobile ad products are built out—and again, Facebook is at a massive advantage.

When Facebook’s VP of Global Marketing Carolyn Everson said at Disrupt NYC, “We’re one percent done on our ad products,” it may not be an exaggeration. Ads that live within the Facebook site really are the beginning of where things can go. As Facebook gears up for an IPO, expanding its portfolio of advertising products through display, search, and mobile will change the landscape in each one of these areas. It becomes even more impactful when we think about how these different products can work together connected through the social graph.

While many people think about Facebook as a powerhouse due to the number of users on the site, the real power comes with the way they are mapping users to their friends and the products, people, and places that they “like.” When Facebook decides to turn up the revenue dial, they will be able to leverage this graph and create powerful social ads across multiple platforms to a degree of scale and sophistication that no other company can match. As these products develop, Facebook will command the lion’s share of online advertising dollars—and they will undoubtedly surpass Google.


Why Startups Should Raise Money at the Top End of Normal

Editor’s Note: This is a guest post by Mark Suster (@msuster), a 2x entrepreneur, now VC at GRP Partners. Read more about Suster at his Startup Blog, BothSidesoftheTable.

I have conversations with entrepreneurs and other VCs on a daily basis about fund raising, the prices of deals, how much companies should raise, etc. I’ve stopped talking about this as much publicly because it’s such a heated, emotional topic where the points-of-view are strictly subjective and for which the answers will only be revealed in the future.

I’ve decided to take all of my private points-of-view on the topic and make them public in a keynote speech at the Founder Showcase in San Francisco on June 15th.

I thought I’d post on one of the topics beforehand. It’s the one bit of advice I find myself giving to entrepreneurs most frequently these days, “raise money at the top end of normal.”

Huh?

Here’s what I mean. There is an inherent value that any company has. On a public stock market that is the value that investors place on future free cash flows of the business discounted to today’s date to account for the time value of money. The more mature the company and industry, the easier it is to predict its future. When investors are feeling confident about the future they tend to bid up the value of public companies due to an increased perception that the future cash generated by the company will appreciate. The price of public stocks change instantly in reaction to news that is perceived to affect the future value of that company.

Every day shareholders vote on the value of the company by buying or selling shares. There is no price movement without one person agreeing to sell the stock and another agreeing to buy it. Stocks that have a lot of people trading are said to have a lot of liquidity, which basically means it’s really easy to get into (buy) or get out of (sell) the stock.

Private markets for stocks are the opposite. They are pretty illiquid. If you invested in the first angel round of a startup company it is usually very hard to sell your stock—usually for many years if ever at all. So how exactly are prices determined?

There is no great science to it. The earlier you invest the higher the chances the company won’t work out and thus you pay a lower price than later-stage investors. As an investor you’re trying to pay the appropriate price for your perceived risks of the company succeeding and protect yourself in the event that it isn’t quite as valuable as you had hoped. As the risks below get eliminated the higher the valuation investors are prepared to pay.

Over time some “norms” have emerged in pricing based on investors risk / return profile.  The obvious thing that investors think about is making a financial return on the investment they made in your company. Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit” someday—either via selling your company to a larger company or via an IPO. The former is much more likely than the latter. So investors have to have some general sense of what companies that are similar to yours ultimately sell for in the private marketplace via an M&A transaction and they have to have some sense of valuations on public stock markets to be able to back into what their potential returns on your investment might be in the event of an IPO.

For example: If you were to invest $41 million into a company (and one could assume that you owned between 33-50%) then the company is worth $82-123 million at funding. As an early stage investor you’re often planning around 10x your investment at the time you write your first check so in this case you’d be going into your investment expecting an exit of $800 – $1.2 billion. Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. You’re unlikely to want to make this sort of investment with the product or the market not yet validated. The risk wouldn’t be appropriate.

Ah, but you say that for a normal-sized angel check or A round check one shouldn’t worry about the ultimate exit because he or she is getting in really early and at a cheap enough price so who cares whether one pays $5 million pre-money or $15 million pre-money—you just have to make sure you back really big companies. Well, obviously if you knew that in advance it would be big, of course that would be true. But the reality is that you’re faced with two problems: 1) the earlier the stage the riskier and thus more write-offs so you need to have enough ownership percentage in your winners to make up for the losers and 2) the earlier stage your check the more likely the company will need many more funding rounds behind you and thus you face dilution.

So rounds tend to be “range bound” where prices at the top end of the valuation spectrum often being done in boom markets (i.e. 2007, 2011) and for the hottest of companies test the top end of the range, and in bad markets for fund raising (2003, 2008) test the bottom end of the range.

There is no such thing as a uniform price. It is highly dependent upon many factors: experience of the team, type of opportunity (a big biotech or semi-conductor A round is likely to look different from an Internet A round), geography, etc. So the ranges you would expect can be highly imprecise. But to help with the explanation I’d like to put down some markers of typical Internet pre-money valuations done in major US markets (San Fran, NY, LA, etc.) while acknowledging that San Fran deals are often higher valuations due to increased competition amongst investors.

There is no value judgment in my putting up these numbers nor am I negotiating with anybody. I’m just pointing out my gut feel for approximate ranges of deals that I’ve seen with Silicon Valley having the highest valuations, NY / LA / Boston / Boulder / Seattle having valuations in a slightly lower range but comparable and sometimes significantly lower prices in markets that don’t have a healthy venture market. These are not scientific, just anecdotal and just trying to provide some transparency for entrepreneurs on what I’ve seen in the market. And of course there are always outliers.

Prices have definitely gone up in 2011 as depicted in the anecdotal chart below. Again, prices are expressed as pre-money valuations.

For me I think that investors have got to accept the new reality in pricing if they want to remain competitive in markets like we’re seeing now. As ever, prices are still determined by: quality of team, quality of product / market and competitiveness of the deal.

So when I advise entrepreneurs on fund raising I often say that it’s OK to try and shoot for the “top end of normal” for the market conditions. So in 2011 as a startup company if you can generate lots of demand you can definitely raise an A round of capital (say $3 million) at a $7 or 8 million pre-money valuation or slightly higher whereas just two years ago you would have struggled. That’s fine. That’s the deal you get when you’re raising in a good market for startup financing.

What I caution entrepreneurs from doing is raising money at significantly ABOVE market valuations. I’m a VC so I have an obvious bias. But that’s not where this is coming from. I’ve been preaching the “don’t get ahead of your inherent valuation” message for nearly 10 years. I raised my A round at a $31.5 million post-money valuation with no revenue. It was early 2000. That was market. I saw this kind of pricing when I first entered the VC market in 2007. We had companies pitching us that had almost no revenue at all and they were raising $10-15 million in capital at a $40-50 million pre-money valuation. I should also point out that while they had built their products they had limited market traction.

We passed on all of these deals and often tried to discuss the possibility of more modest amounts of capital raised and at more realistic prices. It’s hard to stop a train. One company which was raising at $40 million pre-money wrote a comment about me in a public forum saying something along the lines of “Mark worked really hard to understand our business and was very detail-oriented. But he and his firm were just too cheap on valuation.” Fair enough. But he sold within 3 years for not a huge price after having raised more than $20 million. Another firm we saw tried to raise $15 million at a $60 million pre-money with similar metrics. They did an inside round, spent a bunch of money and then went through a fire sale of the business less than 2 years later.

Here’s the problem. If you haven’t figured out product / market fit and therefore still have a highly risky business you run great risks for getting too far ahead of yourself on valuation. If you raise at a $40 million pre-money on what would in normal times have been a $15 million valuation you’re fawked if the market corrects and you need another round. To any prospective investor you look like you’ve failed even before your first pitch. Even if you have an interesting story to tell, most investors won’t want to go through the brain damage of doing a “down round,” which creates tension between them and early investors.

Finally, even if they could bring themselves to offer you a major down round, the more sophisticated investors know it’s fool’s gold. They get a cheaper price, they wipe out much founder stock value and they reissue you new options. You’ll take the money—what choice do you have? But 6 months later you’re not working past 10pm. 1 year in you stop catching early morning flights. Within 2 years your evenings & weekends are spent planning your next business. And the CEO they would hire to come in and run the business when you go would always be a mercenary.

So my advice: go ahead and ask for a valuation that 2 years ago wouldn’t have been likely. Use competition to make sure you get a fair price. Raise a slightly higher round than you would have previously but keep some amount as a strategic reserve. Make sure that when you need to raise your next round of funding that you are able to show an uptick in valuation that is important for new investor confidence and to maintain great relations with your early investors.

Increase price. But unless you’re already a well-known technology heavyweight be careful about raising above the range of prices that are normal for a bull market. If you’re hot, don’t raise above normal. Raise at the top end of normal.

Other topics I’m going to cover at the Founder Showcase on June 15th:

  • Why I believe convertible debt with no cap is wrong for your investors
  • Why convertible debt WITH a cap is wrong for you
  • How much money should you raise?
  • When should you start talking with investors?
  • Why you shouldn’t stack too many brand names into a round
  • Are we in a bubble?
  • and more.

Hope to see you there.


A TechCrunch Disrupt Proposal

Ah, true love.

Everyone was surprised — even Michael Arrington was left speechless and said he was “discombobulated” — after Julia Hu was proposed to onstage during her special product announcement at TechCrunch Disrupt in New York City.

Hu, CEO and founder of LARK, was near the end of her presentation when someone called out that she had one more slide left to go over. As she clicked on the last slide, she screamed as her boyfriend came running up onstage to place a ring on her finger. It was the first ever TechCrunch Disrupt proposal and we caught the whole thing on camera.

It was sweet, touching, and hilarious. For those of you who haven’t had the chance to watch yet, the proposal and the backstage interview are below.

A huge congratulations to Julia and Jeff!

You going to have a seat?


Yes.


So, you have been
working with a company
in China called PCH.


Oh, oh my god.


We’re going to be OK.


Someone put the slide back up.


Oh my god.


ou .


Sorry.


What ‘s happening right now, just so the audience knows.
Did you just get engaged to be married?


Yes Yeah.


You didn’t actually ask her, you just put-

I asked her on the flight Yes .


Do you guys
want to reverse that and redo it?


Let’s try that again.
All right.


Okay.
So.


Julia, will you marry me?


Oh my God, yes.
I’ve only been waiting for it.


I didn’t know that was going to happen.


Me neither.


Now we get back to business.


How did we, how did that get screwed up.
Is the slide, you guys all saw the slide.
I was like forget that, let’s move
on, we got stuff to do
in the middle of your, so That was 11 years, thank you.


Alright.
I’m ready again.


You had no idea that was going to happen?


No, Did you see me?


Yeah, it took me
a little while to figure out what
was going on but Oh my God.


Did you know that was going to happen?
Or you saw the slide.


Alright.
He it just stole my thunder, didn’t he?


You said yes, because you wanted
to get married, right, it was just
in front of everyone, I
mean, that’s a good thing, and everything?


Oh, yeah, yeah.
My PR firm told me to do
that, no, I was just kidding
Did your P.R. firm actually set this up.


Congratulations.
Jeff congratulations.


Thank you.


Hi, it’s Matt Burns with Crunch
Gear, I’m here with Julia Hu
of Lark this fantastic little
sleep aid but first before
we get to this something fantastic happened on our stage.


Oh my god it was so shocking.


you broke an alarm clock but more than that right?


that’s right.


you got engaged?


yeah.


that’s fantastic.


he totally sprung it on .


And everybody, nobody.


Not even Mike?


Not even Mike, and he loves surprises.
So that’s fantastic, well congratulations.


Thanks

Hi, it’s Matt Burns with CrunchGear.
I’m here with Julia Hu of
Lark, this fantastic little sleep aid.


Yup.


But first before we get to this, something fantastic happened on our stage.


Oh my gosh, it was so shocking.


Well, you broke an alarm clock, but more than that, right?


That’s right!
So, you got engaged?


I got engaged.
Yeah.


That’s fantastic.
And-

He totally sprung in on me.


And everybody- nobody knew.


Not even Mike.


Not even Mike and he loves surprises.
So that’s fantastic.
Well congratulations.


Thanks.


So let’s get back to the Lark.
Can you tell me a little about it?


Yeah, actually I started it because of Jeff.
He used to wake me up
every morning, and go
running and so, I
had nothing to do, I wasn’t
gonna, you know, kick him out
on the streets so I made this happened.


Well that’s fantastic that you are engaged now.
And I know.
And now he gets to live a life with Lark.


Yes, exactly.
So it goes on your wrist.
and you launched this last year
at TechCrunch, San Francisco, right?


Yeah, exactly, it was a concept
that we had thought of
through MIT, when I was a
grad student there and we
got together a bunch of engineers,
won a couple of business
plan competitions.

Right.

And then
built this up.


We went stealth after we raised
a round after TechCrunch,
and today the product’s out!


That’s fantastic.
So the-the big news here
is that you working with PC Edge International, right?


Yes, yes.


You are one of their first major
clients, so could you
tell me a little bit about that process
about how from start to
finish went Yeah.
They work with
much much larger companies, they
chose us to partner, to
become their first inaugural
project for PC Edge Accelerator,
which is sort of I thought
that would be the Y Combinator,
but for hardware start ups. So,
you know they came to us.
We had a lot of market data.
We had prototypes but we
had no idea how much
it took to get from concept to product.


Sure.


So they helped with all the product sourcing.
They helped with initial conceptual designs.
They helped with sourcing all the materials.


Yeah, because getting a gadget to market is hard.


Yeah, yeah.


And so they really took a lot the pain out of it.


Exactly.


Making a web app is relatively easy in comparison, right?


Well everything has its challenges,
so, I think we’re really
good at technology innovation, at
software development, all our
online portal and sleep science.
But they’re really good at taking
the headaches away from you
know, what Velcro do we use.

What Velcro did you use?

We actually sourced an extremely soft, breathable Velcro that’s actually like a fabric. And we went to stores all across the US trying to find this; nothing. They found it in two
weeks in China, so.


You know sleep aids have been
out for a while and we’ve
seen quite a few at
CES, but this one’s different in that it doesn’t go on your head.


Yeah well we want you
to sleep well, Right that’s the
thing, So this is hopefully very
invisible that was our
major major concern and we
want it to be something that you could use everyday.
At the fundamental core of it,
lark is a way to
wake up great and not wake anyone else up.
So hopefully it’s solving a pain.
And then f you want
to improve, like you improve
with fitness, then we can
personally coach you through all of our sleep science.


I have two kids, and I do not sleep very well.


Oh my god.


Is his is gonna help me?


Well, so we will help you
to be much more efficient in
your sleep, and also we
will tell you a couple of
tips of being able to
shift your sleep pattern so
that you can sleep and fall asleep earlier in the day perhaps.
So, when you get woken
up in the morning, it might
not be as jarring for
you, or you can put the lark on the kids.


Yeah, that’s what they need.


And see if they can be trained to sleep better.


Man, they need something.
Even Benadryl won’t work.


Oh my god.


Well thanks so much, Julian and Jeff.


Thanks you so much.


Congratulations, so much.


Thank you.
We’re so excited.


Great.


lark.com.


When does it come out.
I’m sorry.


Today.
Today.
So you can order today online
or here at the booths.
It’s one twenty-nine for Lark
and one eighty-nine for Lark Pro,
which includes the seven
day assessment and the personal sleep coach for a year.


Great.


When Facebook Captured Beluga, They May Have Harpooned It In The Head

When Facebook acquired Beluga this past March, it was an interesting deal for them. Interesting, because they previously had only done deals for talent. But this deal, they told us, was for both talent and assets. In other words, they were also interested in the technology behind Beluga. More importantly, the plan was to keep Beluga running. And they have. Sort of.

Over the past several weeks, users of Beluga have probably noticed some major reliability issues. These range from the mobile apps missing messages because they’re unable to connect to the service, to the service’s website being totally down. Last night, Beluga was totally down for a few hours. There was no indication why it was down, even after it came back. This has been happening more frequently. Not good.

It’s hard not to be reminded of FriendFeed. That service, which Facebook bought in 2009, also reminded live post-acquisition. While that was a talent deal, the core FriendFeed team said they were committed to keeping it up indefinitely. The reality has been that while it’s still up, performance issues and lack of continued development have driven away many of the core users (though, odddly, usage started spiking in Turkey after the deal). It’s a ghost town now. A shell of what it used to be.

And Beluga appears to be headed in the same direction. When Facebook acquired it, we were just heading into a full-on group messaging app showdown. To me, Beluga was the most promising of the new players. It had all the essentials I wanted/needed to replace SMS on my phone. And it was fast — really fast. My social circle started getting really into using it all the time.

We barely use it anymore. Again, it’s just too unreliable now.

I’ve reached out to the Beluga team to see what the deal is. I have yet to hear back, and I may not because Facebook tends to rule with an iron fist about such matters. Officially, the team was assigned to the groups and messaging teams within Facebook. While the new Facebook Messages is finally rolling out to all users, there hasn’t been any major new developments there in months either. There’s certainly no stand-alone Facebook Messages app that some of us had been hoping for — even though Google has quietly been working on one.

At the time of the acquisition, both Facebook and Beluga said that they would be providing details about Beluga’s ultimate future “in the coming weeks”. By my count, it has now been about 13 weeks. It’s time to let us know if Beluga will live, be officially harpooned, or if it will be left to drift at sea like FriendFeed.

I don’t have a good feeling about that answer. Too bad.


Hornik on VC’s Secondary Mania: “If It’s Just Money, We’re All Fungible” (TCTV)

August Capital was doing very late stage deals when most VCs refused to. And its early 2000 era buyout of Seagate was one of the better returns in the firm’s history. So why is it mostly sitting out this round of late-stage mega-deal mania?

In the final segment of our Ask a VC on the road with David Hornik, he explains why the answer to missing out on Facebook early isn’t dumping money in at a $75 billion price tag. The firm has done three $100 million-plus deals of late, but they’re all in companies you haven’t heard of, not the handful of names we talk about all the time.

It goes back to that belief that VCs aren’t just a checkbook; that they actually add value to the companies they back. A lot of cynical or burned entrepreneurs dispute that claim already, and Hornik argues if VCs act too much like hedge funds, they risk giving those cynics more ammo.

One of the last times we had
you on camera it was about
this whole super angel thing which
like-

Yeah, I remember that, yeah.


Funny how that sort
of fizzled and a lot of
those guys haven’t been able to
raise the full funds that they anticipated.
Since then, we’ve seen
this opposite trend of
this expansion of a lot
of the same guys even doing
secondary deals, and these big mega secondary deals.
August was a firm
that actually did late stage
mega deals when no one
else did so I mean Yeah.


has your job and the
way you invest changed at all among this.
Because it has to change
somewhat because we are living in a reality of valuation and dearness of gain.


Yeah.
Oh,yeah.
Yeah.
Well, it’s tricky as you point out.
Ten years ago, or a
little over ten years ago, my
firm was part of the buyout of Seagate.
And we put 130 million
dollars into this deal.
And at the time if you had
asked other venture investors they’d
say, wow, you’re insane like this
is a crazy idea that turned
out to make us, I don’t
know, a billion dollars or something over a short period of time.


And then it was like okay, that’s great.
Exactly.
Except, apparently, not me!
Because I’ve still haven’t pay my law loans.
May be I should get on that.
But then, we created this later
stage fund as part of
our part of the money we raised to say, “Okay.
If we see other interesting things, we’ll do those.”


And we’re doing that
but what we are doing and saying, “Okay.
Here are the early stage
deals that we didn’t do but
now, they’re big and so let’s
invest in the secondary market at a later stage or whatever.”
In particular, because, the prices
that are, the people are talking
about now, if you do the
mass, what is the return?


You know, like, look I
honestly believe that Facebook is
one of the most important companies to ever exist.
So this is in
no way meant to question the importance of Facebook.
I Desperately wish that
I had invested early in this
company because I think it is monumentally important.
Now, would I
invest at 75 billion dollar evaluation?


Well, that doesn’t feel like my job.
Its not what I do, right?


And there’s the difference then?
I think people get this confused
a lot even in the press,
there’s a difference in is Facebook
worth 75 million?
And is it worth it for
a venture investor, managing pension
fund and endowment money, to
invest at a $75 billion evaluation.


Yes.
Is that right?
Now look, it turns
out if there’s an opportunity to invest
at a particular price and then
sell at a higher price,
then I think that’s probably our job, right?
That’s fine.


Yeah.


Um.
But I think we need
to look at these companies,and say, well,
“what value do we bring to the company?
How do we think about it?
What is the risk adjusted-


Right.


-likely return, etc.”
And I just have a hard
time squinting at those things
and saying, look can I justify,
investing a big chunk of
money in these later
stage deals, even if it
turns out that a bunch of
them make money because it’s not,
it just is not on a
risk adjusted basis a good
estimate of the sorts of
thing the venture community should be doing.


I think.


Right.


So, it’ll be interesting to see what happens.
So we do.
We have this later stage fund that
actually, we even funded three
deals in the last six
months to the tune
of about a hundred million dollars
and they, one was
a chip company spin-out, one is
a 4G late stage software investment,
and one is temp workers.
I mean businesses that
make sense where we can
bring in real value, where we
understand how the economics
and how we can be
helpful, right I still think that’s the venture business.


I still would like to think
that, you know, if
it’s just money, then we’re all fungible right?
And then, you know, take someone else’s money and who cares?


Right.


But I don’t think that.
You’ve met a lot of VCs.
People can be helpful or destructive.
You know, they can bring some
value or not and I
would like to think that my
job is still to be helpful
to you as a business, and figure
out how not only can the
capital I bring give you
some leverage but also my
participation will help you build a bigger business.


And that’s the stuff I think we should be doing.


Or at least people get to go your conference.


Well that’s just a bonus.
That is a bonus.


And that’s the biggest reason that you get end deals, right?


Well if it is, then I’ll keep doing it.


Well, you and I
should get back to either hallway gossip, or the conference.
Thank you for joining us David.


Alright, thanks.


OMG/JK: iCloud, gWallet, and tPhotos

Hey!
We’re back for a new episode
of OMG/JK after a brief hiatus after TechCrunch Disrupt.
I’m Jason Kincaid.


And I’m MG Siegler.
First thing we’re gonna talk about
this week is what’s coming
up next week, which is WWDC, Apple’s big developer conference.


I know you’re very excited because there are some big developments coming up, right?


There are from the software side of things
not hardware.
That is going to be a big change.
So you don’t get to go with a new iPhone?
No, there is going to be
no new iPhone no other big hardware.
No surprises from what we’re hearing right now.
So this is a, you know?
This is a big change, but they have
three key major things that they’re going to announce from the software side.


They actually pre-announce them iCloud, right?


Yeah, so, iCloud is the brand
new thing which is, their
new cloud services presumably totally
replacing MobileMe.
And then of course they’re going
to preview further OS10 Lion
which is the new version of OS10,
and the new version of IOS which is the fifth version of it.


So, the thing that, I
think that all of these are
sort of tied together which is
why it’s kind of hard to talk
about one without talking about the others.
The thing that most intriguing to
me This is actually something
I saw described in a hacker news thread somewhere.
It wasn’t just this notion of storing your files on a cloud or whatever.


It was something where developers would
effectively get cloud storage.


Access, yeah.


And then they’d be able to sync their application data between devices.
So you could have an iPhone app that’s hooks up to your app that’s on OSX Lion.


Right.


Which would be just like a
seamless experience where you don’t
have to deal with a firewall version, it’s all there.


That’s something that’s really needed.
Apple puts out there that they want people to upgrade all the time.
Upgrade devices, once a year
they have a new iPhone, they have
a new iPad once a year,
but it’s not that great
of an experience when you do
upgrade because then you have a
game for example, you have
to start over from scratch where you were.


Well, I don’t think it’s just like upgrading.
I think it’s just moving between devices.
These days many people own
an iPhone, an iPad…

Right.


…a laptop and a desktop.


Right.


They have four.


And you want to just use whatever’s in front of you at that point.


Exactly and just having your data available there.
So, I think the question at this
point is will users have
to pay to use the
service to develop have to pay
to store the data…

Yeah, so
that’s, those are two really interesting questions.
Because right now of course a lot
of developers use Amazon’s cloud
services for IOS
apps and for web apps, obviously.
Will Apple cut a better
deal, if they say that they’re going to build just IOS apps?
Is that included in the $99
yearly developer fee that
they already paid to enter into that thing?


And then, from the consumer side, what’s the cost going to be?
There’s a lot of talk that there
will be some base level things
that are free.
And I think that’s important,
because you know,
whether or not you think it’s worth it.
It’s just, there’s way too big
a barrier to entry that
most people will not use it because…

Right.


…why would you pay $100 even if
you do have a free trial for a limited amount of time?


Speaking of which, I have an
unused MobileMe box sitting
in my apartment that I just ever got to use.


Nice.
Well, so there you go.


I can put that on Ebay.
It’s an antique they haven’t given
you enough incentive, I guess, to sign up for it.
But, if they add some of these
other things like we’re talking about now, of course, like the music service.
That’s supposedly going to be a big thing that they talk about.


So let’s talk about
what the reports are as
far as what’s gonna wash, because
it sounds like they will
have this notion of wide ring matching.
Where unlike Google and Amazon,
where you have to upload every
single file in your library…

Right this would be mirroring it.


Apple will look at the
songs you already have downloaded and say, “All right you have these.”
And then it just puts something.


And that’s what Lala did.


That’s what Lala did.
But, apparently, I can’t remember
who reported this, that it’s only going to be for songs you purchased through iTunes.


yes.
So, C-Net had that report.
So, there were two kind of
conflicting reports yesterday which are
the latest about what’s going on.
One says that it will
only be music that
you’ve downloaded through iTunes so far.
So that means, it doesn’t include,
not only obviously pirated music,
but music that you either rip
from a CD or
you get through other legal music stores like Amazon.


It sounds like it would actually be more frustrating than anything.


Yeah.


If I look in my online
library and I’ve only got
a quarter, a third of my
songs…

Right, where, oh, this song yes.
I forgot.


Are people,I mean, that sounds like a
worse experience than what Google
and Amazon are offering…

Well, so, supposedly.


because you have, you don’t haveyou know, and again,
this is all just from these reports right now.
Apple has been negotiating to try
and make it so there’s almost
like an amnesty deal where they


can, at one point, bring in all the music you have.
And then, maybe from this point forward,
it’s only the music that you
buy through iTunes, something like that.
But, supposedly those deals are
not in place right now, and they may try and launch.
And they’re probably not going to actually launch this next week.


OK.


But when they do launch they might try and just launch with iTunes music only.


I would, I mean, I, like
I said I think that would actually
be a worse experience than uploading your entire library.


Yeah, I’m pretty surprised by that.


The whole promise of this
cloud experience is that
all your music is there as
opposed to some of
it and then you’ve got to look through which albums did you buy through iTunes because if you…

Right.
I’m pretty surprised if Apple is actually going along with that.
Obviously, it’s the music labels
that want them to do that because they’re so concerned about piracy.


Right .


But, I mean, it, so,
Lala actually worked out
the deals where it would still,
if you had a song on your computer…

Right.


…regardless of how you obtained it,
it would still be up in
the cloud and the argument is
that if you already have
the song you’re not gonna go buy it.
And yes that incentivizes them going
out and downloading the songs, and
then it mirrors them and they whatever.


But.


I think the labels are just
so concerned because Apple is such a big player, they’re such a major player.
Lala was a small start up at the time.
Apple’s the huge player and
they’re or two other players that
they can kind of leverage or play
off of one another with the Google and Amazon stuff.
So, you know, it
doesn’t sound like the
greatest thing in the world if they do launch that way.


But, you know, we’ll have to see.
I had initially heard that
they were not even trying to
launch anything until the fall music
event which is where they do all the music stuff usually.
But I think that Google and
Amazon kind of force their hand a little bit.


Right.


So, so this will be out there now.


OK.
So, let’s move on to
the next topic which is we
went to an event last this week in New York.


Yep.


And it was the launch of Google Wallet.
And Google Wallet is something
that we coming for some time.
Eric Schmidt actually demoed something to this back in October.


To be clear this is the NFC stuff.


NFC stuff where right now there’s only
one phone does this just
ask where you pull out your
Android phone, you associate a
credit card with it and
then you can tap to pay at
hundreds of thousands of, whatever,
venues around the country.


Right.


And all and Google’s got
partnerships with people, and it’s increasing the people it’s working with.
Did you find it impressive?


I think that it’s
the idea is certainly impressive.
The execution remains to be
seen right now because it is very limited.
I think the main partner
was Mastercard, so it’s
only like certain cards that
you can actually enter into the system right now.


Well the way Google is getting
around that is there’s actually a
prepaid Google card that you can use any credit card you have money on.


Yeah, but that’s another, you know,
level that you have to go in to get.


I thought it was pretty, it’s a smart idea.


It’s a smart idea and I especially love the thing you wrote about the sticker idea.


Right, so it’s actually a little unclear as far as how that’s gonna work.


Right.


But, immediately after the event,
I was running up to the
people who were talking about stuff
that, because I wanted to
figure how it worked for phones that
didn’t have NFC because, obviously, the vast majority of phones don’t.


Right.


And, what I was told is
that there were already these
stickers, that can be,
have their NFC encoded with a single credit card.
You can actually go out and buy this from your credit card company.
Google is apparently going to
be allowing people to order
one these credit cards, and then
it’s going to do some stuff with
the Cloud where you slap it
on your phone and then
when you’re at a point
of sales place you show the
sticker and it routes
around and it still hooks into your phone, using cloud.


That is really interesting.


If it works, that’s awesome.


I mean there’s no way
that, obviously someone like Apple
can block you from putting
a sticker on your phone so, but there’s the app side of things.


The application, right.
And Apple can certainly block it
and actually I’d be very surprised if it
could work with the iPhone because
Android revolves around this notion
of being able to, like, kind of trigger an event, right?


Do you think though there’s a
way that they could come up with
a web app though that did
that where it, you know, kind
of routed over the cloud and then ported into the web app?
I don’t know if that would be
secure enough for that to
even to happen or if there
needs to be something on the
device itself, like a communication between them.


I think in order for it
to work with the iPhone you would
have to you already have the application open on your phone.


Okay.


Which would be sort of a pain.


Yeah.


In other words, I don’t know if
Apple allows anyway for this
sort external source to launch an app on your phone.


Right.
Yeah that’s a little bit murky at this point.


Android has intents, I
believe they’re called, that let you
do that.
that’s a discussion because Apple’s
going to eventually have their
own NFC operation in
place that may or
may coming in the
coming fall when they have
the iPod 5, or it
may be coming next year, but eventually they’re going to do something like this.


It seems like everyone is moving toward this.
And, one of the really
interesting things, I thought, maybe
the most interesting thing about this
whole thing, was how mad PayPal is at Google.


Right.


Because they basically, they took
their main executive who
was in charge of this stuff and
now he’s in charge of it for the Google Wallet team.
And they have the older executive who’s
been there for a while, Stephanie Tilenius,
who’s been there for a
long time and supposedly maybe helped recruit this guy over to Google.


Right.


But they’re really mad.
I mean, the lawsuit was announced the day of.
So, obviously people had been working on it for some time.
Whether or not it was a
coincidence, it happened the same day
as the Google Wallet launch The
really interesting stuff there is the documents.
I read over those court documents
talking about how they were negotiating
deals for Android, to get PayPal payments included.
And then right when they’re during that this guys interviewing for this job.


So, going back to the wall, lets
talk a little bit I think
the question is will users want
this right and so the promise
of the phone wallet
isn’t just that you can tap the pay.
But, that you can have multiple
credit cards on your phone
and then you can also automatically have
deals, which is actually one of Right, loyalty.


the other things that launched as part of this was offers.


Very limited trial it just launched in
Portland right now and
it’s going to come to San Francisco soon.


And the idea is that you
want to search on Google,
maybe it’s for shoes it says
hey an offer at the shoe
store down the street from
you and then you send that offer to your phone.


Right.


So, that you don’t have to
think about where you have an
offer you just go to pay
then your phone knows that you got an offer there.


nd that’s pretty cool I mean
that potentially will get
a lot of people using this you
know, it’s kind of like, well you
get one element that’s group
on, you get kind of one
element that’s sort of like what foursquares is trying do now.
And that’s, but the fact that
Google is in control of this
phone or the phone operating system,
they can really do some interesting things with that.


I think the bottom line for the wall step though is that it still.It
‘s going to be quite a
while before it’s ubiquitous enough that your going to rely on.


Right, I think they were smart to do
the partnership with MasterCard because
they have so many of those
point of sale things all ready
installed, I forget what the
number was, there’s thousands though over the United States right now.


And so that will be able to work pretty much right away.
Obviously it still reliant on
you having the Nexus S, in
particular, and having, you
know, the deals open in your
city if you want to use the deals for that.
But that’s a pretty smart
thing to be able to do it
gets around them having to ship
these point of sale units
to like every single retailer in the United States.


Which somehow that’s going
to have to happen eventually for this to really take off.


Well, I think the partnerships with the
credit cards, the credit cards
have, like, an incentive to work with Google on this.


Yeah, sure.


So.


Sure.


And the final thing we’re going to talk about now is Twitter photos.
This is pretty controversial actually
which is kind of funny that it’s
controversial but it’s yet
another hole that Twitter is filling in their product.


Right.


So when we found out
that this was launching actually like I
was at the Twitter event last year,
and they definitely talked about how this could be coming.


So I read over those statements again.
They sort of implied it, they
claimed that it could be coming,
like it’s something that we’re interested in.
we’re not 100% sure that it
will be coming Like when I
heard Twitter was filling holes
with photo, that’s a big hole.
That’s like the bigges.t


But, you know, like at
least what they’re saying, TwitPic
which is the biggest ecosystem player
actually like, for the photo’s, they’re really mad about this.


Right.


I mean, they supposedly feel like
they were blind sided, and from
what we’ve heard, Twitter did
reach out to a number of
other players, notably YFrog and
Plixi, I think was the other
one which were the two or three players.
But, they didn’t reach out to Twitpic.


I think that some of
the comments on the post on
this were that Twitpic,they
had an issue with licensing photos.
Twitter probably wasn’t such a fan of it.


That was a black eye.
Yeah, yeah, yeah.


Going back to what Twitpic
did, I think it just said,
they are allowed to license and make money off of them.


Yeah, yeah, yeah.


And Twitter made it very clear
now with their new system that
you’re in control of your pictures.
And the most interesting thing
about this to me is that they teamed up with Photobucket.
It’s not like they’re doing it by
themselves, or they are even using
Amazon cloud services or something hosted.


They teamed up with another player, which is really kind of interesting.
Why Photobucket?


I honestly can’t even give
speculation on that other than
to say that maybe they just
wanted to focus on building
out the core product and let people
who have all really handled all the.


Right.
That’s what PhotoBucket said more
or less that they’ve spent so
much time dealing with scaling of photos.


Right.


And they have so much expertise in this space.
The other thing we’ve heard is that
they may have gotten a better
deal from PhotoBucket, in terms
of having to pay for
the storage versus what they would have done with Amazon or something like that.


Because Twitters going to be, as
soon as they put the switch
on this, given the fact
that it ‘s going to be integrated in all the official clients.


Right.


They’re going to be zero to a lot of photos.


So, they’re going to, so, that’s another thing.
So, it’s live right now
for Twitter employees which doesn’t really matter that it’s 500 people.
But starting next week they’re
going to roll it out to,
beginning with all the users,
it’s going to take a few weeks to roll it out.
But it’s going to start on just twitter.com.


You ‘ll be able to click
the little button, and upload a
picture, and like you’re saying that will take over.
Eventually it will become one
of the mobile clients and that will
become the obvious defecto
of Twitterphoto integration.


So, I mean, as far as the
developer uprising, I thought
this one was fairly obvious that it was coming.
Easy for me to say in hindsight.


Right.


I have no money invested in any of these companies.


Right.


But I’m sort of
curious to, there’s a lot of
talk about how once again
Twitter has pissed off the developer community.


Right.


Like, are there any other obvious holes that Twitter is going after?


Well, so first of all, let
me just say about the photo
thing specifically because I think
this is such a controversial
one because this is really
one of the first major third
party eco-system plays that anyone did.
TwitPick was one of the
first ones and, this
was just, like, oh my god,
they’re helping out Twitter so much
because they’re really adding
value to it by adding these photos.


And even if Twitter did
give them little hints of that
something was coming a year ago, what’re they going to do?


Right.


They can maybe do
a white label service and partner
with some major content players or something like that.
But they really are kind of getting screwed by this.
And I mean Twitter’s in
a bad position too because they
have to do what’s best for them
from a product perspective and from
a monetary perspective whether or not this plays into that at all, photo integration.


But that’s the place they’re in.
And so, what they do
next, what other things they
have to fill in, there’s a
lot of things out there still that they could.


Analytics.


Right.


Analytics is an obvious one.


It keeps talking about moving up the value chain or something.


Right.


I was like, well, how much
further up the value chain do
you have to go before Twitter eventually
is going to get there in a year or two?


Yeah.
I don’t know why
people are still kind of in this eco-system at all.
Why third party developers are in this eco-system at all playing?
It’s just too dangerous.
It’s too dangerous to try and build a company.
If you’re doing a weekend side project, that’s fine, that’s great.
You have some fun.


Twitter’s pretty easy to work with in that regard, I think.
But if you’re trying to build a real company, yeah.


It’s a little scary.


Yeah.
All right.


So, I think that does it for this week of OMG/JK.
Thank you for tuning in.
Make sure to subscribe using the iTunes link below.

In this week’s episode of OMG/JK, Jason and I start off with a preview of what may be coming at Apple’s WWDC event next week in San Francisco. Then we get into what Google unveiled at their NFC event in New York City last week. And finally, we talk about Twitter’s move into the photo space.

All three topics have a bit of controversy surrounding them. First of all, WWDC will not feature a new iPhone for the first time in several years. Second, it took PayPal a matter of hours to sue Google after Google Wallet was announced. And third, the Twitter developer ecosystem is up in arms again after Twitter has moved to fill another hole. Well, at least TwitPic is, for sure.

Below, find some of the links relevant to the discussions this week.

Subscribe to us on iTunes!


Hornik on Blippy: “Apparently I Was More Interested in Sharing Credit Card Purchases than the Average Person” (TCTV)

Let’s be honest: One of the reasons David Hornik actually agreed to be on camera at All Things D is that he didn’t have a startup about to file to go public any second. So we talked about some of his more high profile investments that haven’t always lived up to the hype.

Hornik explains why reports of Blippy’s death have been greatly exaggerated, and why he says the investment still wasn’t a mistake. What’s more he dishes (sort of) of the nine-figure annual revenues of another portfolio company Say Media– the love child of VideoEgg and SixApart. And he tells us about an enterprise software company that’s a budding sleeper hit.

More broadly, he argues the immediate-hit-or-it’s-a-failure misses the point of venture investing. (A philosophy Reid Hoffman might agree with after a decade-long slog at LinkedIn.)

Let’s talk about you as a venture capitalist.
I’m just kind of
thinking off the top of
my head, deals that I associate you with.


Yes.


Video X is expired, they’re now one.


Same media.


Blippy, now it’s gone.


No, no.
Not at all.


Well, it pivoted?


Not at all.
Here’s the thing.
The thing that
people associate with Blippy may
not be the billion dollar idea.
But Blippy, this group
of incredibly smart entrepreneurs, is anything but gone.
Actually it turns out that… So
Chris and Ashvin, who were
the founders of Blippy, are
some of the greatest… If you’re
talking about entrepreneurial athletes, like
these guys are unbelievable and you would back them.


And it’s sort of like saying that
it’s too bad that they
didn’t win that particular world
series, but we’ll see you next year.”


So they’re working on some really interesting stuff.
They have a great team that
no one is leaving.
They’re really excited to be working these guys.
And they have enough money
for the next 10 years or something.
So, this idea
that… Gee, it either
works or when it
doesn’t work, then it’s a failure whatever.


Kind of misunderstand the history of startups, right?
And it’s a lot… And
I going to see this
a lot and I can’t… You
have to bet on the
ones that are the winners and the losers are the losers.


Right.


Look, there will be some
that are big winners and it’s
exciting and if you’re
an early investor that’s amazing and congratulations.
But it turns out that there
will be companies that are
built over a period of
time by really smart, hardworking
entrepreneurs that build important
stuff that people value.


So look, I will
admit that our apparently I
was more interested in sharing my
credit card purchases than the average person.
I’m still sort of shocked by
that, to tell you the truth because I
thought it was super fun.


Yeah.but
it’s maybe a good example of
“don’t invest in the things
that you love”, because what
you need to do is find out
the things that are compelling more broadly.
That’s fine.
The good news is that I really…


But I think someone needed to test that assumption.


Yeah.


We wouldn’t have known.


No, it was great.


Like I actually… I mean Alexia wrote a story about TechCrunch about.
Oh, we were too pro-Blippy, I don’t think we were.
I mean looking back at coverage…
Again really, really smart entrepreneurs, trying
something that is completely crazy just because of the outcome?


Yeah.


That doesn’t make any sense.


Yeah, thank you.


That’s exactly right.
Because there have been lots
of Twitter-like things that people tried and didn’t work.
And so what?


I mean, how many times did social networks not work.


Yeah, exactly.
Look at Mark Pincus, he had one of those.
So clearly he’s not
a failure by virtue of
the fact that Tribe.net didn’t succeed
and social networking wasn’t
a bad idea because Friendster
didn’t end up succeeding.


Right!.


And that; so the good
news is that, as a general
matter, you know, at
August Capital, our focus has
been on people we really like
who are gonna, you know,
who are gonna build great stuff and then hopefully they do, right?


Right.


And in a disproportionate amount of
time, they actually end up building pretty interesting stuff.
And so that’s, I mean, that’s a VC that’s all you can do.
So you like, you mentioned Six
Apart and Video Egg; they’re now together.
Well, you know, it’s a huge company.
Same media is a many
tens of millions of dollars of business.


I heard how big their revenues are.
Would you like to share that with our readers?
It’s like fifty million.


No, it’s well more than that.


Like a hundred million?


It is well more that that.


It is my conservative estimate
that this company is worth.
hundreds of millions of dollars.


Yes, there isn’t any question.
It is, it is orders of
magnitude larger than the
things that think they’re
competing with say media, right?


Yeah.


So, people are
focused on other things and
if they want to under value that or whatever, that’s fine.
But the reality is, these were
teams of people who are
focused on very clear things.
So, Video Egg was
about bringing real value to brand advertisers?


Mm-hm.


How do you create a better
brand experience across the social media infrastructure?
And then Six Apart was
about how do you build the
best possible engagement experience
for bloggers, for, and
ultimately for passion based media across-


Right.


-160 million uniques or whatever.
And when you put those things
together, you have a
very big interesting business that
ends up being, I think,
the paradigm for the next
generation of digital media companies.
So you know, eventually people will look and go “Holy cow!,
how did that get to be such a big business?”


So, are they your most exciting company now?
Who gets you out of bed in the morning?


I don’t know.
I mean they’re great.
They’re a fabulous company and I love the people involved.
You know, I have this enterprise
software company called Splunk that I funded.
That where three really smart
engineers who said, “you should
take log files and figure
out how to correlate them and manage systems.”


And it’s, again, I don’t
know, is it a hundred-and-something million dollar business this year?


Right.


I guess we’ll see.
It is a big business.
Companies are getting a ton
of value and the people
building it are worried about
creating value for their companies
and doing a better job of system debugging.
And all these things you go, “well, what is that?”
Who cares about that stuff?
Well, you know, they’re just doing a good job.


So, I love
all of my children the same,
but you know, the ones that
are gonna make more than a hundred million.


He will become your favorite?


Did I?
My kid?
Yeah, that was my daughter.
Yes, of course she’s still
my favorite.
But I’ll tell you
what, if my son, Julian
wins a Tony, he gets to be my favorite for that week.


It’s just up to the Tony jury.


Yeah exactly!
When Noah starts the next
Facebook, he can be my favorite for a week.


So, only for a week though?


Yeah.


David Hornik: Why Real Entrepreneurs Aren’t in it for the Money (TCTV)

We haven’t done Ask a VC for a while thanks to my hectic travel schedule, so I pulled David Hornik out of the hallway at D to catch up on his thoughts on his portfolio and the industry.

But first, we chat about the highlights from the All Things Digital conference. Or we started with that and then talked about how the motivation for starting companies is changing in Silicon Valley, given the soaring valuations and ease of raising money.

And Hornik explains why he’s not a fan of Peter Thiel’s 20 Under 20 Program, although he admits he still hasn’t paid off his own law school education.

Hi, this is Sarah Lacey
with TechCrunch TV down here
at sunny Southern California at
All Things D with David Hornik.


Hello.


Hello, David is bailing me
out because I’ve been doing too
many hallway conversations, that
are off the record, with people
who won’t be dragged on camera, and
you are always willing to be dragged on camera.


I enjoy, I enjoy talking
with you Sarah, on camera, off camera.


Not at the lobby this year, unfortunately.


Well that’s, I was going to say, that has nothing to do with me.
There are two things that interrupt
people from coming to the
lobby: weddings, babies.


Yeah, that’s about it.
So, hopefully I’ll have neither of those next year.


Good.
Next year.


So, you know, we ‘ve
met at the lobby which is sort
of an homage to the fact
the you are always in the
lobbies of conferences gossiping and rarely in the session.


It’s never gossiping, it’s about
industry conversation, doing business.


So, I want to ask
you, a little bit, about
the step that you’ve seen on stage
so far, but then also
about you know all this
super secret conversation you are having.
You have been in the sessions more than usual.


I have.
You I find myself sitting and listening to what’s being said.
It’s exciting.


So tell me, what you
thought about, I mean I
know there was Eric Smith
last night, Dick Costello
spoke today Jack Dorsey, what
were some of the things that
jumped out at you about these guys?


I’ll tell you, as
an investor, right, you
spend all your time meeting with
the entrepreneurs and the
interesting thing is right, you
think that entrepreneurship is about,
people who want you to
think that the entrepreneurship is about getting rich.


Oh yeah.


Entrepreneurship if successful then everybody
gets rich, and its
turn out that is true. That’s
a beautiful byproduct of
entrepreneurship but the people
that you wanna work with that’s it
is not, they are not motivated,
that is not their motivation, right?


Right.


So, if you listen
to Jack Dorsey just
now or Dick Costello
or Reed Hastings all today.
Talking about their businesses and how they’re thinking about them.
What they’re building whatever.
Its about I mean Jack was explicit.
It was like, I’m trying to make people’s lives better here.
Now Kara Swisher called
him on it and said, “Is this a movement or is it business?”
But I don’t think that’s a dichotomy, I think that ultimately.


Well and she had to ask him
that three of four times and
it was clear that the question wasn’t even translating with him I mean.
There are certain people who
sound phony when they talk
about that, and there are certain
people who just sound
really genuine and I think actually
Andrew Mason was the same way.


One thing that jumped out at
me about both Andrew Mason
and Jack Dorsey is, you
know, we are in this
point of the cycle
in Silicon Valley where it’s so
easy to start a company that
most people would say there’s
a lot of people starting companies who probably shouldn’t be entrepreneurs.
And seeing both of
them on stage talking about building
their business, to me, it
is so emblematic of that
is that thing you see in an
entrepreneur when you know they are the guy who should be starting.


Yeah, I mean, its interesting,
we saw this in the late
90’s, when it looked
like there is a lot of money at the end of rainbow.
And people, you know, oh I have
to got stop doing whatever I am doing.
You know even with this
business with Peter Teo and
trying to convince students to stop going to college.


No, I think it’s insanity..
I think its terrible advice.


You think he is like an awful person for
doing it then or some people are.


No, I don’t think he is evil, I just think it’s dumb!
Like if I were the
mother of one of these
students, I’d say, “Real like,
really this is it?”


It’s two years.


So fun you know,what,
spend, make a hundred
thousand dollars, quitting school
for two years or I mean, here’s a thing.
This is what, but it
can this is a bit like we’re like talking about with start ups.


Right.


If you think that going
to college is about increasing your earning potential?
Then, you know, then fine.
Go stop doing it ’cause maybe it’s not increasing your earning potential.
But when I talk
to my children, I don’t say,
“Hey, can’t wait for you to
go to college so you can increase your earning potential”.


Right?
My oldest son intends to be an art history major .
I am fairly certain that no
number of years as in
our history major will repay
his college education. So that can be it, right?
So On the other hand, I would not have them do anything else.
Like why would you?


Your children are also not going into half
a million dollars personal debt Ok.
Maybe.
That is the crucial difference.


But to be fair like I’m still paying off law school debt.


Are you?


Yeah I am, maybe I should pay it off.


You’re a venture capitalist.


I should probably pay it off.
I should probably pay it off.
Yeah every month it subtracts.
I look at my bank account statement,
it has you know Sallie Mae or whatever.


And how’s that law firm going?


Yeah well yeah, I have
been a VC now for eleven years, so.
But I am still, you know,
I am still an inactive member
of the bar, because you just never know.
I might need to represent you.


Probably.


So, when that day comes, I will reengage.
So, anyway.
Okay fine.
I think that’s fair, but it’s
not about, you know, so what,
it’s not about earning potential.
It’s about the people that
you engage with, and meet,
and the conversations you have
and the opportunities and all that.
So anyway if you
look at company building today, I
think people should be building companies
because they cannot think of anything else they want to do.


like what, you know, that’s when you should start a company.


And I think a lot of people
are starting companies because, why wouldn’t they?
Because it’s so cheap and easy to get capital.
Capitalization is so low.
I mean it’s different things driving it than in ’99.
You know I am not a big fan of saying, this is just like ’99, because it’s not at all.


Yeah, it’s not, it’s not at all.


But you are seeing this phenomenon, where there
is a set of circumstances, where if
you’re a kid who has a
halfway decent idea and you’re
coming out of school, there’s not
a downside to starting a company.
I mean, I think it’s more
that has just been taken away than it is…


Yeah, no, I think it’s right!
I mean the reality is that’s also
true, if you don’t mind, if
you can afford to live, right?


Right.


The thing that I don’t
get is this, so like, hurry
up you gotta get out because time is of the essence.


Yeah.


Well, look, by the time
our kids get old, they’ll be living to a hundred or something.
So, if they miss two years, it’s two percent.
It’s two percent of their lives!
It’s fine.


Well, if you listened to the
data that Ron Conway talked
about at Disrupt, those are their best two years.


Yeah, come on!


Do you buy that?
That to be an entrepreneur…

No?


No, I mean I buy that there are great entrepreneurs but what.


You know them by the athlete thing?


Well, they don’t need as much sleep.
I feel I need more sleep.
Then I used to not
sleep at all, now I actually
occasionally I have to sleep, so
I do, I recognize that, but
I don’t know you know, work smart.
The reality is that there have
been very interesting important
businesses built by very young people.


And they have been very interesting
you know its like Henry Betmason is not nineteen.
Ev Williams and Jack Dorsey and Mark Pincus.
They are not nineteen.
He is an old man.
Like he is the Shaquille O’neal of you know.
Although Shaq did just today announce on twitter that he is retiring.
I find news on twitter.
See look at that.


Poor the real Shaq

But
he has a giant superman bed.
You can’t really feel that sorry for him.


He has a pool area is called Shaq Poco.


Why wouldn’t it be?


Do you have one of those?


Yes Hornik a Poco.
Oh, go.


I think something that’s a dormant account.


In Palo Alto, Hornik a Poco is
like a deck, the size of the postage stamp.
But please, enjoy yourselves.


Once again, you’re a venture capitalist, you shouldn’t be throwing-
you should be paying off law bills,
you should be-

Look, you know what, I don’t wanna be frivolous.


Gillmor Gang 6.04.11 (TCTV)

The Gillmor Gang — Robert Scoble, John Taschek, Kevin Marks, and Steve Gillmor — shuddered with expectant glee at Apple’s presumed iCloud announcement at next week’s WWDC event. It’s clear from all the leaks, most interestingly from Apple itself, that the record companies are finally healthy enough to move into the new streaming era. With Lady Gaga selling five times as many records as the next entry on the album charts, the numbers have strongly tipped from retail to downloads.

Amazon helped by subsidizing over a million copies at $1 a sale (8 bucks to Lady Gaga), but by next time, the market will have moved almost completely online. This gives Apple the leverage to get the TV/cable networks and the movie studios on board, with Netflix playing the Amazon role in stoking demand for streaming. Live events are last, probably following the heavyweight boxing matches of Ali and Tyson via pay-per-view but direct to Apple TV and its competitors, of which there are none. iCloud is the moment when the bits stay where they are, and the checksum becomes the value point. See you Monday for a special Gillmor Gang extra.