Great Things

Mozes - a mobile leader is born

Let me first disclose that I am an investor and board member at Mozes. Ok now on to the good stuff. Dorrian Porter is an entrepreneur I have known for the last six or seven years who is in the process of trying to build one of the first great mobile companies.  Mozes has a pretty simple value proposition:  helping consumers connect with things, people and products that matter to them. Sounds good but how does it work? Pretty simple. Content creators or advertisers or people create keywords that trigger an action when you text the keyword to Mozes (66937); sometimes this trigger results in delivery of an SMS to your mobile and sometimes it saves the content for digestion at a more appropriate time. What it does do is provide consumers control and an ability to act on information when they are not sitting in front of their computer. Dorrian sums it up by calling the mobile phone your remote control for your life. I like this metaphor. Check out the service at www.mozes.com and let me know what you think.

Michael Arrington from Techcrunch writes about Mozes here.

The problem with social search

Greg Sterling at the Kelsey Group pointed me to a New York Times article (reg wall) on the issues with relying on consumer reviews for advice on hotels. What are the issues:
1) The hotels are managing the review process by either offering incentives (like discounts) to consumers who review the property or in some cases manufacturing fake reviews.
2) As a consumer, you really don't know the identity of the reviewer and whether you have anything in common with that person.

These issues are common across all of social search -- not just in the travel space. How do I know the Judy's Book review on a local dentist wasn't submitted by his dental assistant? The real answer is you don't. The Judy's Book team would answer that they are developing an algorhythm that ranks the trustworthiness of the reviewer.

So what is the solution? I like getting advice from two types of people: people I know personally (or friends of friends) or people I share interests with. This solution solves the travel problem by taking hotel advice from others in your social circle who have stayed at the property. This solves the identity issue. Shared interests is a little bit tougher. In the hotel space, I would take advice from travelers who liked properties that I like. For instance, if I like the Hotel de Russie in Rome, despite the fact that I can't afford it, I would be interested in hearing Paris hotel suggestions from other travelers who also liked that hotel.

Data: The New Intel Inside

Tim O'Reilly and John Battelle talk about data as the "Intel Inside" of Web 2.0. This reminds of a version of the golden rule printed on my brother's childhood ruler: "whoever has the gold rules." In the case of web 2.0 companies, whoever has the data rules (or generates outsize returns). Before getting into O'Reilly's core thinking, I want to digress to talk briefly about how much I love information businesses. It is really pretty simple - you aggregate data from as many sources as possible, clean it up and then resell it. Although there is a high fixed cost associated with building the databases, there is virtually no variable cost in running queries against the data. Barriers to entry are only significant when you layer on data layers that you own.

O'Reilly gives two wonderful examples. One of how to build competitive advantage (Amazon) and one of how to let opportunity slip away (Mapquest). Mapquest failed in the mapping space, where failure is defined as not building competitive advantage, because they  were licensing the mapping data and they were not layering on any of their own data. Amazon has been successful since they took the ISBN database and aggressively layered on new sources of data; in the process, they have created enormous value.

What other examples are there? The yellow pages space is interesting. The big yellow pages companies are desperately trying to innovate and become more than just a directory. But the upstarts like Judy's Book are having much more success acquiring user-generated content and layering it on top of existing yellow pages data. Just as Amazon created value doing this, I think that Judy's Book is on the right track here as well.

So my reminder to myself today as I go about trying to build an information business is pretty simple. Aggressively acquire data from as many sources as possible and then layer on user-generated content on top of that to build competitive advantage.

Take a risk; life is short

A great post, Death by Risk Aversion, about how great ideas become mediocre products. Kathy posits that management and bureaucracy are the barriers between great ideas becoming great products. My question is what about Apple? How does Apple, a big company, continue to develop "insanely great products?" I think the obvious answer is that Steve Jobs is a micro-manager who oversees every product that Apple puts out. I wonder if the obvious answer is the right one. Is there something Apple is doing culturally that lets its people take risks and lets great ideas become great products? Or is it just Steve dreaming up ideas and then executing them?

GoogleBase for people

In a post this morning, Robert Scoble asks the intelligent question "what if we could enter things in search engines?" He asks the question in the context of finding information on other people or perhaps more importantly, others finding information about you. My friend Dorrian Porter inspired me to start blogging with a pretty simple observation that blogging is an opportunity to have input on the conversation about yourself on the internet. Put another way, would you rather people find you as a collection of quotes from a series of old press releases or would you rather have your personal blog bubble up to the top of the search results. Dorrian is doing a good job with his blog. Check out the google search results on him; his blog gets the top two spots in Google. My search results are not nearly as good. My blog doesn't turn up in the first ten pages of Google search results. Maybe that is something else I need to get done in 2006!

Scoble's broader point is that you should be able to enter information about yourself (or anything else really) into the search engines. So I am going to follow his lead and publish the things I want people to be able to find about me on the web. I am making the choice to withhold key dates in the hope that I make life at least a little more difficult for the identity thieves.

Jamie McDonald’s email: jamiemc@gmail.com
Jamie McDonald’s mobile phone: 416.825.4819
Jamie McDonald’s mailing address: 2 Bloor Street East, Suite 2100, Toronto, Ontario, M4W 1A8, Canada
Jamie McDonald’s significant other: Pamela Meredith
Jamie McDonald’s kid(s): Thea McDonald

One final note, when Google starts doing this for people, they have a real opportunity to make life miserable for LinkedIn. Can you say disintermediate?

And yes, I have accepted Scott McNealy's credo that there is no privacy in the internet world.

Just measure it!

Scott Maxwell wrote an insightful post on the power of metrics-driven management. "The key to getting the right metrics program in place is to eventually understand the minimum number of measures that give you an accurate understanding of the state of your company." Scott's key insight here other than manage your company with data and measurement is to keep it simple. Name a successful company and you can bet the CEO is following 3-5 key numbers every day:
- at Google, the numbers would be number of searches served and average revenue per search
- at Flicker, it would be number of photos uploaded per day
- at Disneyland, it was park attendance every day and average number of rides per attendee (a customer satisfaction driver related directly to wait time)

You get the picture. This really goes back to how simple business is -- you should be able to look at a small data set on a daily basis that gives you blinding insight into the health of your business. Basic stuff like how many customers do I have, how many new customers am I getting, how much revenue am I getting from those customers and how long do I keep my customers. That was easy - we just identified all the drivers of revenue for your business. Now do the same for costs and you have your key metric set for your company.

ps same metrics, same presentation for every board/mgmt meeting; put it all on one page and then graph it so you can see trends and spot opportunity

Execution not ideas

John Roberts is right. "Ideas are not what’s lacking. Execution, talent, stubbornness, focus, and leadership are the currency, in combination, which convert into excellent businesses. Ideas are sprinkled, for free, throughout the industry. Yes, having an idea first counts for something… a slim head start. Not much more."

Ironic that I agree with this given I have been hunting for the right idea to turn into a business for the last six months. At a certain point, one has to realize that there is no absolutely perfect idea with no competition. One has to take the leap, build product, talk to customers and then do it over and over again. I like the words John uses: execution, talent, stubbornness, focus and leadership. The only words I want to add are passion and discipline.

Great people build great businesses. The idea is just a starting point.

Blog blathering on the future of venture capital

One of the things that irritates me about the media industry is that it spends a lot of time and money reporting on itself. The NY Times writes articles about who the new managing editor is. Do I really care? Well the blog world, or the new media world, is starting to adopt that same irritating characteristic. Witness the debate on the future of venture capital. Rick Segal writes a thought provoking post on reinventing venture capital. Of course, reinvention will help Rick because he is not on the inside of the VC club. But the need for everyone, now including me to pipe on the topic, creates very little value in a debate that the market will decide. Mattew Ingram, Mark Evans, Tom Evslin, Doc Searls, Dave Winer and a host of others have commented on the issue. John Battelle seems to be the only A-list blogger not to have throw in his ideas.  Yes, it is easier and cheaper to start companies now then it has ever been in the software/services space. That means that more entrepreneurs are going to get prototypes and customers before seeking financing. But the need for the VC and VC money doesn't go away. There will still be a place for Kleiner, Sequoia and Benchmark to create value by finding great teams building great products in great markets. The question is whether the industry as a whole will be able to generate the same outsize returns in the next ten years that it has generated in the last thirty. Answer, probably not. And this is really a supply issue more than a demand issue. Since there is more institutional money flowing in to the asset class, there will be more money chasing deals. That will drive down startup valuation and industry returns over time.

So what is the answer to Rick's question about what value a VC creates in the new world? Entrepreneurs still need money to build their businesses. But of course, capital is a commodity today. The VC that can create incremental value other than money is rare (according to every entrepreneur I know); the ones that do will be the ones that earn better returns than the industry.

What's your home page?

Om Malik has an excellent post on My Yahoo! being Yahoo!'s greatest asset. His core point is that "My.Yahoo.Com is no longer a portal page, but instead an “attention page” which can be and should be leveraged to become the aggregator site for complicated digital life." My favorite word in that sentence is 'complicated'; think about how ridiculously complex our digital lives have become. Look at the jumble of ethernet and USB wires under your desk. Flickr, Delicious, Typepad, etc.. for managing your web lifestyle. And no one (except perhaps Apple - not a Mac user so I can't speak intelligently to this issue) is really addressing integration in a smart way.

When I worked at Microsoft, I always argued that the company's most valuable asset was Outlook because I managed my entire life from Outlook; that is another way of saying that Outlook has my attention. Now I think Ballmer and Gates would argue that Windows is more valuable because I spend 100% of my computing time on that platform but my only fear of leaving the Windows world is using an inferior version of Outlook for the Mac.

Lets talk about what the customer wants for a second:
- their data held securely and accessible on the entire range of devices
- a simple way to get their work and play done that doesn't involve them calling a help desk

Makes you think that Steve Jobs is on to something with Apple being the hub of your digitial life.  Simplicity - Integration - Design are going to win in the web services world; and I think that if you win in the web services world that will evolve to the platform. Apple, Microsoft, Yahoo and Google (maybe) are the ones trying to deliver the one-stop solution. Microsoft is the best-positioned to deliver on this promise but I think they will miss this opportunity. Apple continues to show the most leadership in the space by tying their products together in an integrated way; their problem, which is also their core advantage, is that they operate in a closed environment. Feels like Google isn't even playing here. Yahoo! seems to be the one stitching together our web life into one integrated customer experience. I sense that they get the vision and it is about execution now. Problem is that execution is difficult when you don't have a platform to build on top off. I am routing for them though. I want My Yahoo! to the hub of my web service life. Lets check back in twelve months to see who is winning. Maybe I will be on a Mac by then.

ps data point: 65% of internet explorer users do not know how to change their home page; this data is a couple years old but it gives insight into the power of IE to drive traffic to MSN. Makes you think that the growth of Firefox is becoming a bigger and bigger threat to Microsoft.

The Great Firewall

I am getting up to speed on Google's decision to censor its' search results in China; I don yet have a ton to add to the volumes that have been written on the subject in three days but I do love Sergey's reference in this CNN article to "the great firewall." Seems like a lot of chinese government geek IQ has been devoted to ensuring that China's internet users can't get the information they want from the web. But no matter how sophisticated the software, the information will flow freely.

In the end, I think even Google at 50% is better than no Google in China and that the government in China has already lost control of the data and the information. Over time, that information will become more widely available.