Wednesday, February 28, 2007

Internet Video Ad Model - Solved!

All kinds of smart people are fretting about successful advertising models for video on the Internet. Text ads wrapped around the player, banners on the page, pre-roll, mid-roll, end-roll, et cetera. What's a millionaire-minded entrepreneur or investor to do?
You can relax, I've spotted the answer.
You see, I have this one friend who is quite familiar with Bittorrent and a connoisseur of tracker sites. At any rate, she has been happily collecting all kinds of hard to find music and video through torrents for a while. It's just like buying The Two Towers on DVD 3 days before it opened in U.S. theaters at the Russian Market in Phnom Penh for $3 - only better! So, the other day, my friend downloaded the previous night's Daily Show, and started watching. Every past episode that she had downloaded had been carefully relieved of any advertising. This one was different, a few, but not all of the regularly appearing ads had been carefully left in the video. And it didn't detract from the viewing experience at all - same great show. The particular way in which some ads, and none near the beginning, were included suggested that Comedy Central itself had uploaded the torrent. This is similar to the time-honored record company practice of Kazaa-bombing, where one might easily find a 4 minute track of silence with 2 seconds of song at the beginning, only with this Daily Show torrent, there's no ill-will, and everybody wins! I would be happy to get high-quality torrents with a couple of ads included, and I would be even happier if Comedy Central was able to layer on additional ad-revenue for it.
Tellingly, this understated ad-model of fewer/shorter ads than conventional TV programming is pretty much exactly what Niklas, Janus, Henrik, et al. have implemented with their TV/Internet project, Joost. These are smart guys who are committed to getting the full user experience just right. Incidentally, I have been beta-testing Joost for a good while now, and have a couple of beta-test tokens to give out. If you want one, convince me to give it to you.

Tuesday, February 27, 2007

Where Are The Customers' Yachts?

You may have seen the Venturebeat thing on Sequoia/ComVentures which was uninteresting, but it led me to the funniest thing ever - the set of ComVentures team profile photos.

For some strange reason, I thought of the classic 1940 Wall Street book: Where Are The Customers' Yachts?

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Cookie Delivery Mechanism

When you're building a a product (and in this case, I mean website) it's always a good idea to look up regularly, try to see the forest for the trees and check whether you can honestly substitute the word 'work' for the word 'progress'. This point is fairly uncontentious - hard to argue against it - but what is the right thing to check against?

If your company is mature, there is a pretty solid metric out there called money - and its various derivatives (sales, ebitda, earnings growth, etc). If your company is less mature, you've got to get more creative.

It might seem reasonable to check work against something that you might call a 'value proposition' or even a 'core value proposition'. I think this is fraught because a 'value proposition' is too wishy-washy for this purpose - even if you invent quantitative metrics that seem to describe 'value proposition'.

Rather, you should take a minute to crystallize what exactly the site does technically - the Basic Business Mechanism - and check work against that.

For example, Judy's Book - especially the portion devoted to online shopping - is a shopping site. More specifically, we are an affiliate site, meaning that we send our visitors on to store websites in exchange for a cut of any sales. Even more specifically, we try to get our visitors to take an action (clicking-through) that sets an affiliate cookie on their computer so that a store knows to pay us a commission.

So, shopping sites are, at root, Cookie Delivery Mechanisms.
Progress for us means delivering more cookies to more people more often in a way that keeps them coming back for more (no bad profits).

Monday, February 26, 2007

Good Friends

I am lucky enough to have a group of about 10 best friends - all of whom I have known well for a long, long time. Since High School, Middle School, Elementary School, Pre School.
As it turned out, when we graduated from High School, nearly all of us found ourselves in college far from Seattle on the East Coast.
That first year, we had Thanksgiving dinner together, and have kept up the tradition ever since.

Like many people in their twenties, my friends and I have moved around quite a bit from year to year. Each Fall, we begin to look for that year's Thanksgiving locus, or center of gravity - the place where we can feasibly get the most people. New York, Boston, Connecticut, Palo Alto, Los Angeles, Minneapolis, Seattle.
I look forward to Thanksgiving more than any other time of year.

And what I really mean is that I appreciate our friendship more than words can say.
Here is one photo from 2006 in Seattle including a few of my nearest and dearest.

Thursday, February 22, 2007

Rahul Pathak - A Scholar And A Gentleman

Rahul wrote his best post ever, about hiring the 'best possible athlete' - specifically referencing Dick Costolo's Ask The Wizard post on the same topic.

In my view, this is right on the money, and can be make-or-break in the startup crucible.

As usual, Joel Spolsky was right a long time ago about trying to find Smart, Gets Things Done people.

The important caveat here was lucidly described by Malcolm Gladwell in his 2002 piece, The Talent Myth which touched on such juicy topics as HBS rockstars working for Enron.

More generally, Naseem Nicholas Taleb, author of Fooled By Randomness, and coincidentally the subject of a Gladwell profile himself, has made a personal crusade out of attacking the notion of 'experticity' pervasive in our society - that is, assuming anyone who has passed the bar is a good lawyer. A good primer in Taleb's typically fun, but dense style can be found here.

Wednesday, February 21, 2007

All About Orolix (In English)

As far as I know, this is the first article about Orolix in English other than Morten’s quick posts:

My Portuguese language skills are entirely the product of extrapolation from rusty French and Italian – so no guarantees.

Orolix is a new Brazilian ISP slash portal founded by Nagib Mimassi, and more recently supported by Morten Lund of Skype and LundKenner notoriety. Apparently, Nagib has done Free ISP’s before in Brazil, but Orolix goes one better – you get paid for surfing.

AllAdvantage + NetZero, in Brazil. Boom. I should really produce.

Presumably, users are required to click ads, fill out surveys, enter sweepstakes, play games, etc. in exchange for their free Internet. Orolix has webmail, photosharing, hot-model pictures, a toolbar, a ‘web-accelerator’, social networking, and comparison shopping.

All of these features, are of course, readily available, and taken as a group, certainly monetizable. The hard part is winning consumer traction – and that’s where free Internet comes in, as an ISP, Orolix can more easily be the first point of contact for a surfing session.

Orolix is an example of a great localization play tailored specifically for the Brazilian market environment. Brazil is developed enough that there is actually a reasonably functional copper telecom network (unlike, say Kenya), but not so developed that a free dial-up ISP is yesterday’s news. Plus, Orolix has a really ‘fun’ feel, that I suspect plays well with the Brazilian audience. I'm sure they will make money hand-over-fist.

I would love it if someone who actually spoke Portuguese would scan through these posts and write up something more informative.

Google This Blog!

Maybe it pays to use Blogger:

Your Mileage May Vary (YMMV) - On a second machine in another location several hours later. I did not come up top spot for this query.

Tuesday, February 20, 2007

Neo-legal-logism, Part I

This is the first post in what I am sure will become a series for me.

Those of you who are faithful readers of Naffziger's Net may have noticed that it has been down for going on 24 hours now.

I told Dave that he should sue 1and1 for 'Reputational Opportunity' damages.

Clearly, it is probable that some big, big wheel would have chanced on Dave's blog today, liked what he saw, and put Dave in charge of say, Acquisitions at Fox Interactive, or something like that; however, due to 1and1's failure to perform to the letter of their hosting contract, Dave has foregone some large bonanza.


Preface everything with "Going forward . . ."

Everyone knows that the past, even when instructive, is the past. But can be hard not to dwell on it.

For the last couple of years I have been a shareholder proxy for a small, private biotech company in the Seattle area. The company is 15 years old, and was launched with a relatively small angel investment (I'm just glad it's not 25 years old at the bottom of $700M hole).

Staying in business for so long and generating a decent amount of sales without taking in any more money is no mean feat. Some might even call it a success - where Some = the entrepreneur.

A few characteristics of the original incorporation have made it relatively easy for the entrepreneur to operate the company as a bit of a lifestyle business.

To make matters worse, communication between the investors and the entrepreneur has been chronically poor, from time to time, vitriolic.

However, over the last year, time has begun to align incentives. The entrepreneur, now 60 years old, has started to think about retirement, or at least, semi-retirement. He is looking for an exit. Coincidentally, an exit also appeals to the investor group.

Old resentments do die hard, and even recently, the odd nasty letter has been sent. Having not been involved since inception, I personally am better able to look ahead - and - going forward - I think things might just work out okay.

Long story short, if you can't say 'Starting from here . . .' or 'Going forward . . .' it's probably not that constructive.

***UPDATE*** Fred Wilson has just written one of his best posts ever, on patience, and it is closely related.

Being largely inexperienced, I have found Brad Feld's Board of Directors Series to be enormously helpful, because corporate governance can get really, really weird.

Monday, February 19, 2007

Always Work For Someone Smarter

A well worn (and true) tech management axiom is 'Only hire people smarter than you' - 'A players hire other A players, B players hire C players' - et cetera. This is all described best by Joel Spolsky in a number of articles, here's one.

Importantly, the converse is equally true: Only work for someone smarter than you. Across the board, the smartest and best employees will check-out if it appears that management isn't up to the task of leading them to wealth and glory. Unfortunately, the mediocre busybodies will keep plugging away, and soon enough, the center of gravity within the organization will swing their way.

I am extraordinarily lucky to work for Dave, who is smarter than me. I know this because Dave gets actual real work done - today, Dave illustrated this quality on his blog. Most people's blog posts do not show any actual real work - just opinion, which is, of course, cheap. To get something done, you have to figure it out. To figure something out, you have to be smart.

The logicians among you might be asking: How can it be possible to both hire and work for people smarter than you? And if not, which is more important?

If you think that you might want to endow a foundation someday, or even own a HondaJet, and you work in a small organization, make sure that everyone is equally brilliant, and that each team member is better than anyone else at a couple of important things.

Niki Scevak is a Smart Guy

I was introduced to Niki Scevak's blog, Bronte Media, by Dave and Andy here at Judy's Book a while ago, and I have had it bookmarked ever since.

I am always trolling the web looking for useful benchmarking-type numbers, which like anything especially useful, are hard to find. Niki posted some good numbers on Friday that shed some light on direct nav. economics, here, in his post about Sendori.

So here's a plug - more people should check in with Bronte Media from time to time.

Sunday, February 18, 2007

Notepad++ for Dummies

Say, just for the sake of argument, you need to swap out all the internally linked images on a webpage for externally hosted ones.
Now assume that while you may not be the smartest man in the world, you are capable of learning through trial and error.
Pretty quickly, maybe even before you start, you realize that you'll be wanting to use find-and-replace. That's a good start.
So what are you going to 'find'? I know, how about 'src'? That's a decent idea. All of the image locations you want to replace immediately follow 'src'. So now all you have to do is keep hitting 'find next' and then paste in the desired image url. Nice!
So now you are cruising through replacing locations, and bingo, you're done!
Let's say that now, you have another page to perform the same treatment on - only this time there are a lot of images to replace.
Now lets pause for a minute and make another assumption: You are lazy.
In a panic, you think to yourself 'There has got to be an easier way!'
You notice that all the image locations look something like this:

img src="images/judysbook.png"

You want the link to look like this:

img src=""

You think a little bit and scratch your head. Then you realize that instead of finding 'src' you can find-and-replace 'images/' with '
Simply punch Replace All, and Voila!

This, uh, happened to this one, uh, friend of mine.

Agile Development Through Speech Recognition

The first few installs of Windows Vista have started to show up at the office. First it was Alex, and then, on a lark, Dave thought he might give it a try.

You can take all the 'glass' and 'rediboost' - I'll have the speech recognition. Speech wins the funn(i)est feature competition hands down - but what I didn't fully grasp at first was the sheer amount of efficiency we could wring out of Vista speech recognition.

As a consumer Internet startup on the venture clock, we care a lot about how to iterate faster and test more - basically, we can never have enough of either.

And now, thanks to a great find from Paul Kedrosky, I have really cracked it!
Here's what we should do (convenient video tutorial):

Saturday, February 17, 2007

Management by Blog Post

We read a lot of blogs at Judy's Book, and by we, I mean me. No seriously, we all do.
As per The LazyWeb, nearly any decision we face has come up before and been elegantly described by someone in the entrepreneur/vc blog world.

I have joked before that we could outsource decision making to a properly tuned blog aggregator and filter - virtual management!

Turns out, the sharp team at Collective Intellect are making this happen, albeit in a valuable and serious way.

As far as I can tell, Collective Intellect aims to be a kind of Bloomberg for New Media - capturing news, experience, and opinion online and packaging it up in a hopefully actionable manner. There is big money in this - hell, four-page, desktop-published hedge fund newsletters can sell subscriptions for $2,300 a year.

Guys, If you're listening, here is a new use-case: I would like to use a product that sorted through all the image stock spam that I get in my email - and separated the *real hot tips* from the chaff. What about this one?

Friday, February 16, 2007

Investor Love

Among the gentlemen who make my great, great job at Judy's Book possible are a few well known bloggers:

Thank you, you are pillars of society.

LundKenner - Two Thumbs Up

I am a bit scattered and manic, so I really appreciate the good work being done over at LundKenner by Morten, Soren, Martin, et al. It pretty much boils down to this:

Work with large n of scrappy, commando startups.

Get things done. Make things happen. Fast.

I want to meet these guys, a lot.

Innovation & Execution

Broad-brush, there are only two things that a startup needs to do to become a wild, runaway success:

1. Innovate
2. Execute

This might initially sound banal - but here's the subtlety:

From time to time, in the thick of product development, we have decided to trade off a little innovation from a feature's original conception in the name of better execution - but when we subtract a little innovation, we simultaneously raise the bar for successful execution - a 'me too' feature needs to be really kick-ass to move the needle, but an innovative feature can be a little rough around the edges.

Sometimes when we attempt to cut execution risk, we are actually increasing the odds against us. Anecdotally, it is pretty common to hear experienced people say: 'In hindsight, I should have taken bigger risks '

Good ideas are cheap - and you can use them to buy yourself a discount on the expensive/difficult stuff - superior execution.

Thursday, February 15, 2007


Not insanity, inanity.

God knows, I love Peter Rip - as a VC blogger, of course. He is the clear leader at 'going deep' but still making a lot of sense. So many classic posts, who knows where to start. And I am sure that his portfolio company Radar Networks is a pretty clever play, but boy, you guys were sure done a disservice by Dan Farber's post that you pointed at. This post goes into the record books for the supreme mastery of inanity displayed.
"Alien invasion . . . intelligent nanobots" - I rest my case.

Other Judy's Book Blogs

So, they have to give me a little link love, right?

and one super-secret side project:

I am positive that I have left a number of people out - let me know so I can include you, too.

Judy's Book Blog Posts

I have a couple brilliant (if I do say so myself) posts over at our Judy's Book Blog, Enjoy:

This One (including a link to my all-time favorite patent)


This One - Oh, wait, I can't find it - Erin must have, uh, edited it out. Anyway, it was mainly about Amazon's very regular, and periodic love/hate relationship with cash flow and equities analysts.

Coupon Site Domain Theorem

1. Coupon site domains are long
2. Coupon site domains combine several words that may not be related to coupons
3. Coupon site domains include pretty much any misspelling you can think of

Therefore, the number of possible funny coupon domains is infinite


We are launching an awesome new coupon site soon - I lobbied to call it Couponistan, which we bought and parked, but our in-house staff of 'risk managers' killed that one.
So, If you would like purchase -I am open to offers.

Startup Job Titles

Judy's Book is small enough that I have thankfully been able to get away without really having much of a job title - people definitely call me names from time to time, but that's another story.

Once you have a job title, it is pretty easy to say "not my job" - of course this assumes that everyone is reasonably responsible and communicative.

Speaking of funny job titles - Over the last couple of years I have had this growing suspicion that a high percentage of LinkedIn members describe themselves as "Visionaries" - Dave Naffziger just posted a Google search I did to finally settle things - And I'm right!

Also, today in 'funny job title' news, Microsoft hired Michael Gartenberg as 'Enthusiast Evangelist' - while that is certainly a mouthful, it still doesn't uunseat my favorite, from a dust-jacket author bio: Independent Commentator

Ocean Shores - February 2006

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Japan - February 2006

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Camano Island - June 2006

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Mount Rainier - July 2006

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Sailboats + Random, Stolen Clip Art & Stock Photography

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