Reflections & analysis about innovation, technology, startups, investing, healthcare, and more .... with a focus on Minnesota, Land of 10,000 Lakes. Blogging continuously since 2005.

Category: Web/Tech (Page 13 of 21)

Rich Karlgaard on ‘Net Disruption and Forbes

Switching back to the event I attended this past Thursday evening, the RAIN Makers Conference, I wanted to pass along some of the insightful remarks made in the dinner keynote by my friend Richkarlgaardheadshot_2 Rich Karlgaard of Forbes. [Or as Guy Kawasaki, another friend and business partner, calls him, “Brother Rich.”]

“Since 2001, the global economy has added the equivalent of the whole U.S. economy,” Rich said, as he opened his talk with reference to macro trends. But, though the fundamentals are good, experts don’t agree that it’s a good economy, he said. And, when experts differ so much, something is up. “That something is we’re living in the greatest period of business model change — ever! Companies can come out of nowhere and knock out big players,” Karlgaard said. He referred to what McKinsey & Company calls the “topple rate” of established industry leaders, which tripled over a 20-year period according to their research. Rainmakersconf_1 One industry where this is happening is newspapers, with the stock of the New York Times, for example, at half what it was in 2002. Why is the industry in trouble? “Craig’s List is one reason,” he said, “a company with 23 employees.” He noted that McKinsey said the topple rate will triple again, and he gave some reasons why this volatility will stay with us. “The backside of Moore’s Law is the part that’s important. As performance increases, prices drop 30% a year. Suddenly, hundreds of millions more people can afford technology every year.” He also cited the example of Google bootstrapping its way early on, with the founders not taking equity investment but instead maxing out their credit cards.

Another reason is that the Internet is an amazing price arbitrage system. “Today, what two students can do on the ‘Net is more than what 10 analysts could do ten years ago. Now, anybody can determine what your margins are and come in well under your prices — maybe even 10% of them. Anyone can pick up your skirt.” Karlgaard gave an example of a 17-year-old kid he wrote about in his column recently who did such a thing and grossed $400,000 over three months, just by putting together a virtual team. He talked to his worldwide team members by phone only twice, doing everything else by email or IM. “Just another example,” Rich said, “of the Cheap Revolution at work.”

A final reason he said we’ll continue to see volatility is the amount of capital available. “Forbes even took capital recently — from Elevation Partners, where Bono is a partner!” Bono Read more about that in this Reuters story. [Another Elevation partner is Roger MacNamee, who has a rock band of his own: The Flying Other Brothers. Hey, I got the t-shirt! Right from Roger a few years ago…] Just how much money is out there? Rich laid it out: “About $1.5 trillion in risk capital is sloshing around looking to cause havoc. And about a half trillion of that is in the U.S. We’ll have volatility up the kazoo — get used to it.”

“What does all this have to do with you?” he asked the primarily Midwest audience of angels and business owners. “Well, cost becomes important.” He gave the example of companies such as Intel and HP that are lucky enough to have sales of $700,000 per employee — which may sound impressive, but it’s still not enough for these employees to really afford to live in Silicon Valley. “Now, Google, at $1.4 million in revenues per employee — they can!” His point: “The cost gap between the Valley and rural America is bigger than ever. But the knowledge gap isn’t.” Media access is not a problem anywhere, either, he pointed out — citing how it was much, much different when he grew up in Bismarck, ND. “All this portends well for a heartland revival,” Karlgaard said. “It’s a great time to be a nimble, small private company in a small or midsized town.” The macro trends favor disruption, he said. And the role of the U.S. in the global economy is “systems integrator to the world.”

How the Internet Is Affecting Forbes
Karlgaard also related some very interesting numbers about his employer, in addition to the recent equity investment by Elevation Partners. The surprising stats to many will be the growth metrics of Forbes.com. Forbescomlogo “It’s growing at 70% year-over-year, and will have more ad revenue than the magazine by the end of 2007.” He said that’s what got Elevation Partners interested. “In the media business, as revenues double, valuation triples.” Forbes has very definitely become a global franchise. It’s seeing most of its growth on the Internet, and most of that growth is non-U.S. “But we’ll never give up on the magazine,” he said.

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Some of the Great People I Met at DEMOfall 2006…

At least the ones I got cards from so I could remember 🙂 …and these are in no particular order:

• Yuvinder Kochar, CTO, The Washington Post Company
• Frank Kelcz, CEO, Moore, Clayton & Co. (MCC Media Group, London)
• Don Gallagher, Senior Director-Audience Development, NetworkWorld
• Brian Dear, Founder & Chairman, Eventful.com, San Diego
• Karl Harris, VP Engineering, Flurry.com
• Joe Lichtenberg, VP Marketing & Biz Dev, Eluma
• Jennifer McLean, Senior Media Specialist, Percepture, Lake Hiawatha, NJ
• Jennifer Bingham, Account Executive, Davis-Marrin Communications, San Diego
• Mark Suster, CEO, Koral
• Jon Levine, Principal UI Designer, Koral
• Rob Crumpler, CEO, BuzzLogic
• Thadeus Eby, Director of Sales, BuzzLogic
• Robert Schettino, CMO, BuzzLogic
• Andrea Roesch, Senior Partner, Tier One Partners
• Jamie Pogrel, Account Manager, PR@vantage
• Scott Ritchie, Cofounder & VP Biz Dev, PixSense
• Yael Elish, CEO & Cofounder, eSnips
• Ellen Skugstad, Director of Marketing, Pluggd.com
• Marc Della Torre, Biz Dev, Jajah
• Buzz Bruggeman, Cofounder, ActiveWords
• Duncan Greatwood, CEO, PostPath
• Adam Marsh, CEO, PrefPass
• Gregor Berkowitz, President, MOTO Development Group
• Chris Dury, VP Marketing, ScanR
• Stefanie Pierce Weaver, The Kauffman Foundation
• Paula Dunne, President, Contos Dunne Communications
• Daniel Terdiman, Staff Writer, CNet.com

A few others I’d met previously, but got a chance to speak with further this time included:
• Becky Sniffen, Principal, MC2 Communications
• Don Thorson, VP Marketing & Biz Dev, Jajah
• Aaron Fulkerson, VP Platform, Mindtouch
• Renee Blodgett, President, Blodgett Communications
• Amy Wohl, Amy Wohl’s Opinions
• Rafe Needleman, Editor at Large, CNet.com
• Dan Farber, VP Editorial at CNet, and Editor in Chief at ZDNet

Great chatting with all of you!

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Final Thoughts on DEMOfall…

Well, two days since my return from San Diego, let me summarize my take on the latest DEMO event and share some random images and opinions. First of all, everything was extremely well run. This is *the* most crack conference team on the planet — logistics, food, press support, absolutely flawless wi-fi, the whole nine yards — even great bumper music. Demofallstagecolors_1 I just wish theyda told me the hotel had two towers, and that if you were unlucky enough to make your reservations a bit too late, you’d get stuck in the West Tower and have to hoof it three-quarters of a mile to where the event was held, in and around the East Tower. For the prices, there has to be a better venue in the San Diego area.

But, more importantly, what was the tenor of the event, and what were the takeaways? I touched on a lot of that in my report published on event-review site Conferenza.com the other day. But let me ramble on a bit more, now that I’m two days removed from it all. DEMOfall was definitely an upbeat affair — exhuberance was in the air at every turn. [Even if sunshine wasn’t. Now, if someone could demo a technology that would remove fog, haze, and overcast from the San Diego climate, that would really be something!] Demofallpavilionscene It was reminiscent of the pre-crash conference scene for sure — and I wondered how many of these people were experiencing this “high” for the first time. My guess would be a large percentage, because there were many, many young faces in the crowd.

The mix of technologies — consumer tech vs. enterprise IT, business vs. home, widgets vs. software (including another kind of widget!) — was excellent. There was something here for everybody. Almost too much — but that’s always the case at DEMO. Trying to cover it all is essentially impossible for any one reporter. Which is why outfits like Ziff Davis/CNet send multiple people — but they have separate media entities, too, which is how they can do that. Demofallpavilionside_1 The press policy is a very democratic one, I learned: it allows only one reporter from any one media outlet, even including the WSJ, NY Times, USA Today. But let me apologize now for not covering all 67 presenting companies. Nothing against any of you that I didn’t — just not enough time. It’s flatly impossible to do, with any depth, anyway. [I did manage to blog some 37 of them, though!]

Would I recommend DEMO as the launchpad for a new startup? Absolutely, positively — if you can handle the rigor and the preparation. It’ll make a better company out of any fledgling startup, I assure you — just going through the process (starting with getting accepted). The next event, which will be #25, is in Palm Desert, CA, January 30 – February 1 (where the weather is guaranteed to be much better). It’s at the Desert Springs Resort & Spa. How does one apply to present? Read all about that here.

Let me share a few more pix I shot at DEMOfall — these with my new little HP Photosmart M425. That’s the one with the new “pretexting” feature… 🙂 Five megapixels, very compact, 3x optical — not bad for a hundred bucks. [More proof of The Cheap Revolution, as Rich Karlgaard calls it.] I’ve included a shot from the demo of the wi-fi bunny, from Paris-based Violet, a product Ed Baig of USA Today called “easily the silliest Demo product.” Demofallwifirabbit Another of my shots shows the two presenters from Eluma on stage, including VP marketing Joe Lichtenberg on the right, who just told me his firm got one of the coveted “Demo God” awards that were handed out at the final evening’s dinner (which I had to miss). Demofalleluma That’s two Demo conferences in a row where companies I’ve run into early and blogged about became Demo God winners. [Just lucky, I guess…]

A funny scene near the end of Wednesday’s closing session was Chris Shipley strutting out with the surfboard giveaway, replete with shades, to the sounds of The Beach Boys’ “Surfin’ USA.” Demofallchrissurfboard I was so hoping to win that nice stick (donated by sponsor Qualcomm). But, alas, the guy in front of me did — and he didn’t even seem excited about it. Dude?

One final ranting bitch about the show, which I just have to get in, is exemplified by my final photo, which is of the CEO of Moixa Energy presenting. [You’ll remember this outfit, if you’ve been reading my blog, as the one that got my vote for the worst name — though I’ve since decided it’s a tie with PrefPass.] His “USB Cell” may be cool — though it certainly isn’t the most visually elegant product I’ve ever seen. Demofallmoixa But could the guy conjur up something better to wear than the most god-awful pair of jeans I’ve even seen? I look better than that when I’ve done lumberjack work for three hours in the woods behind my house, for kee-rist sakes. In his defense, he was just one of several presenters who were dressed shabbily. And, sorry, anything including jeans fits that category for me. Please, Chris, can we have a dress code for presenters? It’s the least they can do for us. Hey, if Steve Jobs is coming on stage — fine, he wears what he wants. But these guys, they ain’t no Steve Jobs — okay? 🙂 Certainly not yet… And having them pretend like they are is just too hard to stomach.

What were the takeaways of DEMOfall 2006?
• The tech economy is strong. But we’re not in a bubble, according to the show’s producers. [How could we be when the Nasdaq is still 55% down from its high in the year 2000?]
• Money is flowing. Many of these startups-you’ve-never-heard-of have already raised substantial funding, as reported in their profiles. And a person can only wonder how so many of them get such amounts, based on what appears to be a sketchy or risky plan. I can only recall a few presenters who said they were bootstrapped — that is, surviving just on their own funds at this point. Whatever happened to the raw, truly undiscovered startups getting a chance? Must they all be VC-backed already?
• Consumer tech continues to influence enterprise IT. And Web 2.0 type services are leading the way here. The center of gravity is now on the consumer or individual user side of things. Internet apps are where the most energy is these days, not in computers, operating systems, desktop apps, and the corporate IT power base of old.
• The tech economy, and really the entire economy, is going global faster than you think. This Demo had the largest number ever of non-U.S. presenting firms. And who knows what percentage of all the firms that pitched are relying at least partially on offshore technology expertise to develop their products. Either that or on immigrants who now call the U.S. home.

One final thing: links to a couple of excellent recaps of the event by some of the good press people covering it. First, a story from CNet with several contributors, including Rafe Needleman, Daniel Terdiman, and Dan Farber, all of whom I chatted with at the conference. And another good story is from Thursday’s edition of USA Today, by Ed Baig.

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More DEMOfall: Down the Home Stretch

The second afternoon of the two-day event was a real marathon session of non-stop demonstrations — 21 pitches in two and a half hours! (With no break!) It was focused on these themes:

• Talk Is Cheap, and Easy – new cost-saving technologies from VOIP, to smart conferencing, to new hardware
• Express Yourself – tools for consumer-generated content, the king of the online world, whether for business, learning, or personal expression
• It’s Nice to Share…Social Content – social networks meet consumer content to bring rich contexts to both relationships and information
• Tag, You’re It! – collecting, managing, organizing, referencing, and sharing the information you find online
• Finding and Delivering All That Rich Media – a presenter that taps the power of peer-to-peer networks to efficiently deliver rich media
• The Connected Desktop – online information is feeding desktop apps, and they in turn are extending to the Internet and beyond

I won’t even think of trying to describe them all — my brain still aches — but let me pick out a few that impressed me. There were some very visually stunning apps and UIs shown this afternoon. Call it the “image” session — as in how it matters on the web. Let’s start, however, with a couple of apps that are more about talk.

Jajah is pretty cool, and a real disrupter. It lets you make free global calls with regular phones — “no software downloads, no headsets, no hassles.” The company was founded in 2005 by a pair of Austrians, and now has its U.S. headquarters in Mountain View, with a European office in Luxembourg. Jajahlogo_1 They’ve raised $8 million for far from Sequoia and Globespan. Today, they announced JajahMobile, which lets you make free international calls from your cell phone — no new phone needed, no new number, and no contracts. I love the way the Demo folks describe their competition: “the global telephony industry.” Yes, indeed, and it should be plenty worried.

Another VOIP play is Grand Central, a unified communications service that integrates all your phones, your numbers, and your voicemail boxes. You get one number for life and, as CEO Craig Walker said, “It’s the last number you’ll ever need.” Grandcentrallogo_1 The system, which has a very clean, attractive interface, always tells you who’s calling, and it gives you four options on how to deal with any call: accept it, send it to voicemail, listen to the voicemail, or accept and record the call. The latter is especially useful if someone’s giving you information but you can’t write it down because you’re driving, for example. Grand Central has been funded to date with $4 million from Halsey Minor’s venture firm, Minor Ventures, also in San Francisco, and it inherited the name and domain from a previous company of Minor’s that was in an unrelated business.

How could a web site creation and hosting service be at Demo, and how could it be something I’d expect you to be interested in? Well, SiteKreator is different! It brings really attractive, professional design to small business owners, many of whom are not yet on the web — or just can’t afford to hire a designer to custom-build their own site. Sitekreatorlogo And the prices for using the site builder tool and hosting services are very reasonable, starting at just $15 per month. If you ever get called on to help friends or relatives set up a web site (don’t we all?), this is where you should send ’em! As described today, SiteKreator offers the elegance and sophistication of a design studio at the price of a common site builder.

Perhaps the biggest newsmaker of all at the DEMOfall event was Wallop, the social networking site spun out of Microsoft. In fact, if you haven’t yet heard of it, you must be living under a rock. It was all over the TV news on Tuesday morning, and in the major print media as well. Walloplogo My first real look at it was in their demo today, and I must say it’s an elegant interface. Changes the game. But it should be for what they paid Frog Design to do it! (Nothing like all that Microsoft money, and Bay Partners, too.) It was completely developed in Flash. Check it out. The business model of this MySpace and Facebook competitor is interesting — no advertising! Its revenues will come strictly from taking a 30% cut of all e-commerce on the site — but that should be a very, very nice number.

Not only do I not have time to frequent social networking sites, but I’m also not a target for scrapbooking — though I do know it’s a huge market in this country (approaching $3 billion annually). Another Demo presenter, Scrapblog, is combining the storytelling qualities of scrapbooks with the sharing qualities of blogs. Scrapbloglogo Each of the “scrapblogs” you create with this free service –and it’s aimed at parents, newlyweds, vacationers, etc — is a rich-media blog that’s formatted very nicely for either sharing online or printing into a high-quality photo book. The design, attractiveness, and ease-of-use of Scrapblog was very impressive.

Okay, so that’s a cool way to be creative with consumer-generated content, photos in this case. But how does the social-networking generation create “personalized multimedia entertainment experiences.” That’s what iBloks wants to bring to the party — and it was one impressive presentation. Ibloks_logo The service lets you use your photos, videos, games, music, and sound effects to create an “immersive” mix, and then share it via email or IM, and/or publish it anywhere, to any web page or blog. The company calls its “mods” creation a totally new way for people to express themselves. And they seem to be convincing, already having raised $3 million in VC from Maveron. iBloks sees a ready market, too, citing a Forrester study that says 31% of consumers now spend an hour or more a day on social networking sites. [Now I’m wondering if anyone’s measuring how much work (or homework) isn’t getting done as a result?]

Another presenting firm I just have to mention is HeyLetsGo — only because I thought they were cute, and had the cutest company name in the whole pack. What do they do? Well, they claim to be the “first social network that connects people face to face.” Unique concept huh!? Heyletsgo_logo_1 What it specifically does is connect them with local events where they can meet their friends — old and new — by the hundreds, it seems. They’re only active in their home base of Boston right now, but they had a rush of 80,000 twenty-somethings sign up on their site in a short period of time recently, still in their pre-launch phase. [And, yes, they already have Series A funding from Highland Capital and General Catalyst.] Naturally, they have plans to go national. You heard it first at Demo, folks…

Another content-sharing site, which appeals to a more mainstream or mature online consumer, is eSnips. CEO Yael Elish told me her site allows “everyday people to share content in one place, without having to manage so many accounts.” Esnipslogo It’s about sharing, publishing, and even selling your creative work — and it’s all free. eSnips puts content at the center of things, and lets it lead the way to creating new relationships. Think artists, photographers, karioki enthusiasts, anyone who wants to share his or her passion or creative pursuits. Users each get 1 gigabyte of storage for free. You just upload to folders, each of which becomes a web site — designated private, group, or public. There’s no limit, and files can be of any type. “It’s a social network focused on finding people,” the CEO said. It must be catching on, because she said eSnips already has one million registered users, and the site is now logging 3 million unique visitors per month. Geographic distribution includes about 30% U.S., and a fairly equal spread between Canada, Europe, and Asia. The Israeli based company received a seed round of funding from Gemini Israel Funds.

Alex Iskold, CEO of Adaptiveblue (and quite a blogger, too, for the Read/Write Web blog), did a great job pitching his “Blueorganizer” smart Firefox extension toward the end of the afternoon. It creates a context-sensitive, personalized web experience, and is “a step closer to the smart browser of tomorrow,” Iskold said. Adaptivebluelogo The firm claims that browser personalization is the next step in personal productivity online, but notes that the market is not clearly defined — overlapping with targeted advertising, for one thing. The Demo producers call Adapativeblue’s Blueorganizer “a sight for sore eyes, going beyond social bookmarking by turning your browser into a productivity tool….It’s a browser with a brain, and it’s about time.”

The final company I’ll mention was in fact the last presenter of the day, Srivats Sampath, CEO of Mercora (and a serial entrepreneur who was on the Demo stage for the fourth time). His firm was added at the last minute by Chris Shipley after one of the others had to drop out. Mercoramlogo250w He was debuting MercoraM, a new service that “transforms your smartphone into a wireless, socially connected music player.” This was very cool, and we got to hear quite an array of great music to wrap up the day’s sessions, including Vanessa-Mae’s rendition of “Classical Gas,” plus some very funky West African music that had the guys on stage dancing, and some audience members joining them. There’s only one question I have for Srivats: when can I get this for my phone, and when will you support the Mac??

That’s it from the DEMOfall showfloor, folks, right here from press row. I’ll try to do a wrapup post soon with some of my final thoughts….

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