Graeme Thickins on Tech

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

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Jeremy Allaire: Minnesota Boy Makes Good (Very Good)

March 16, 2006 / / 1 Comment

I hooked up with Jeremy via email in advance of PC Forum, and asked him if he’d like to do a little interview at the event for my blog, which of course includes lots of readers back in the Twin Cities. And he quickly responded via Blackberry that he’d be happy to. Which I really appreciated, considering how Brightcove344x69 popular this guy is now with his hot, new startup, Brightcove. Jeremy and his company even had a major feature on page 1A of the Wall Street Journal a couple of weeks ago. So, despite being very busy at PC Forum (including as a panelist — see my previous post on business models), he graciously agreed to spend time chatting with me. What’s more, he had to endure several email attempts by me to hook up with him at the conference (thanks Jeremy!). Hey, it wasn’t easy finding a specific person in a group of 450, especially with things spread out over a large property like LaCosta.

It’s hard to believe it will be 10 years this fall that Jeremy and his brother J.J. — just a couple of years out of Macalester College in St. Paul — plus the 25 or so young employees that were then part of Allaire Corp., picked up and moved the company, lock, stock, and barrel, to Cambridge, MA, at their VC’s suggestion. (That was after first considering but passing on Silicon Valley.) Thus began the legendary status of Allaire Corp. around our neck of the woods as the Web 1.0 company that got away — but one that made it very, very big in the process. The company grew to some 450 employees before being acquired for something north of $350 million by Macromedia, where Jeremy then served as CTO for three years (commuting from Boston to San Francisco, which he admits got old).

The move worked well for the company and the two Allaire brothers, Jeremy told me. Both took a strong liking to Cambridge and settled in, got married, and now have two kids each. I asked Jeremy of he ever gets back to visit his parents in Winona, MN. He said not often, but that he sees them regulary at another house they now have in the Boston area.

I also had to ask about the latest big development for J.J. — the acquisition of his startup, Onfolio, by Microsoft. (J.J. was originally scheduled to be at PC Forum and I’d planned to interview him as well, But, alas, he had to cancel due to obligations associated with the acquisition.) Jeremy told me it was a big win for J.J., for a company that he had just self-funded over the past few years. (After Allaire Corp. was acquired, Jeremy said the two didn’t really consider teaming up again in a new business, though they remain close personally — simply because they had different interests.) All six employees of Onfolio, including J.J., are now doing yet another big move — this time to Redmond. How does J.J. feel about that, I asked? “He’s really excited about it,” said Jeremy. First Ray Ozzie leaves Boston behind, now J.J…

Meantime, Jeremy, though he’s not planning to move himself anytime soon, is still quite the traveler, regularly shuttling between Brightcove’s home office in Cambridge and three others already set up: in New York City, Los Angeles, and San Francisco (the cities that most of the major content producers and media companies call home, after all). He told me the company already has 50 employees and is heading to be double that soon.

What’s been the timeline of Brightcove’s short history to date? First, Jeremy told me, he incubated the idea at General Catalyst Partners in Boston for a year or so, after leaving Macromedia. He first presented the company and its planned business model at PC Forum in March 2005. From then through the fall, he and others at the firm began selectively getting the word out to key partners and content providers. That culminated with a presentation at the very well attended insider conference “Web 2.0” (sponsored by O’Reilly), which was held in San Francisco last fall. The company soon had a public debut via a story in the New York Times, which was then followed in February by the major front-page WSJ piece. (I asked Jeremy how he happened to choose his cracker-jack PR firm, SutherlandGold, based in San Francisco, and he said he met them at last year’s PC Forum! I had the opportunity to meet two of those folks at dinner one evening — Susan Cashen, formerly of TiVo, and Amy Janzen — where we shared some good conversation with my colleague Gary Bolles of Conferenza and Microcast Communications.)

So, fast forward, how is Brightcove sitting today? Very well indeed. Jeremy gave me a rundown: it already has 200 of what he calls “broadband channels” or content partners. And, since the company started what it called a “commercial preview” in November, for video producers, it has signed up 450 companies to date. It has 700 of its video “players” deployed, and it has 7000 titles already in its library. It also has an affiliate syndication program, and one client — Reuters — has 1000 affiliates signed up to date. With this Brightcove program for Reuters, any web site or blog can simply fill out a form, put some code into their web page, and become an instant video news broadcaster. (I plan to try it out myself!) Deals with other major media firms include the New York Times, and yet others are still in the works, including CBS (as touched on in the WSJ article) — though Jeremy had no new announcements he could tell me about quite yet.

My final question for Jeremy was this: What’s it like having Barry Diller on your board? “Oh, it’s great,” he said. “He’s a remarkably intelligent guy, with a strong strategic mind for online businesses. And he’s one of the most connected people on the planet.” Jeremy said it’s very rare for Diller’s firm, IAC/InterActiveCorp, to make minority investments, which they did on the case of Brightcove. They tend to only acquire companies outright. Diller sits on Brightcove’s board, which is also quite an achievement for the startup, since he only serves on two other boards: The Washington Post and Coca-Cola.

I closed by asking Jeremy about his management team, which he said is “tremendous.” It even includes one colleague from the early days of Allaire Corp., who was also a friend of his at Macalester College in St. Paul: Adam Berrey, now Brightcove’s VP of Marketing. Where was Jeremy off to next? San Francisco, he said, to keynote at the “VON” conference. And he was going to spend some time at his offices there as well, in addition to catching up with a guy I’ve since met who was employee #4 at Allaire Corp., Ben Cantlon. (Ben recently relocated back to Minneapolis but was visiting SF this week.)

Thanks for the interview, Jeremy, and best of luck as you continue disrupting the video distribution business!

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PC Forum: What’s The Encore for Search?

March 15, 2006 / / 4 Comments

The last panel on Tuesday morning was the best one of the conference, I thought. It seemed the panelists were the best prepared or had the most interesting things to say, which tends to evoke the best array of questions. If I had to vote for the best panelist, it would be Jeff Weiner of Yahoo, followed closely by Rich Barton of hotter-than-a.pngstol real-estate search site Zillow. But the other two, Omid Kordestani of Google and Ellen Siminoff of Efficient Frontier (and a member of the founding team at Yahoo) 031406searchpanel were quite good, too. Esther Dyson kicked things off by referring to some pundit’s remark that search was as good as it’s going to get. “I don’t agree,” said Jeff Weiner. “Search is the great democratizer,” and he says lots more good stuff is coming — “like voting on search results and other Web 2.0 stuff.” But he also made an excellent point: that for a company to really take advantage of search, it needs a smart webmaster (read: for SEO and SEM), or to “be wealthy enough to hire that out.” As an example of something new, Weiner also offered up “Yahoo Answers,” a service whereby anyone can ask a question and anyone can answer. It’s essentially a knowledge search service, he said, which had a December beta launch.

In an attempt to provoke some friendly discussion between the rivals, Esther asked, “Does it come down to algorithms like Google versus people like Yahoo?” No, said Weiner, “They’re not mutually exclusive.” Zillow’s Barton then put in a hard plug for MSN search (former Microsoftie that he is). He said it has more tools to help him with his searching. (He got no rise out of Google or Yahoo on that.) But the most interesting thing Barton had to offer up at this point in the discussion was an analogy to cosmology. “The experts believe only 4% of the universe is visible,” he said, “which is about the same percentage of knowledge you can get at with today’s search.” Finding that “dark matter and lighting it up” is where the opportunity lies. He said, “We found a ‘galaxy’ that’s really interesting” in Zillow. “We knew people were ga-ga about houses, but we didn’t know how much!” In just four-and-a-half weeks, millions have already visited the site, according to Barton. Esther commented on how people are finding new uses for it, too, which Barton admitted his team really hadn’t expected — such as using it in recruiting, as a reference-checking tool, and even for dating research. Yes, you may change your opinion of that loser in the bar when you see where he/she lives….

Where else is there room for improvement in search? Ellen Siminoff says local search is an area ripe for advances — “a long way to go there.” Yahoo’s Weiner talked about how untapped the universe of content is right now. “There are 750 trillion objects put there” (don’t ask me where he gets such a number), and “only 0.0058% of it is indexed today.” So, search startups, start your engines…

“What percent of searches are purposeful, such as work-related, versus just idle surfing?” asked Esther. “Virtually 100% of them,” said Weiner. “Filling idle time is a purpose in itself.” He also noted that search is “increasingly becoming more of a media model.” Siminoff noted that the search engines are not yet taking advantage of determining the real purpose of the search. “It’s been more about the commercial aspect, but only about half of searches today are monetizeable.”

In response to a question about metadata, Weiner make the comment that the word “meme” is popping up in regard to that these days. (See Wikipedia page defining “Meme”.) He said “Maybe we need a ‘Why’ button under a search ad that tells me why I’m getting this ad.” He also noted that, for tagging to work, the value received must exceed the effort put in to do the tagging. “But we need to work on that ‘meme’ word, to make it more user-friendly.”

Weiner went on to say that there’s “radical change on the web…people like to share and be an authority.” He noted that someone had referred recently to photo-sharing site Flickr (now part of Yahoo) as “a culture of generosity.” Which provoked an audience questioner to say: “People want to help other people. It isn’t about machines versus people. It’s all models.” Weiner agreed that different models are needed, including vertical search such as Zillow.

“What other opportunity?” Esther challenged the panelists. “There is lots of dark matter out there,” said Zillow’s Barton. “Healthcare immediately comes to mind.” And another two, said Yahoo’s Weiner, would be “legal search and opinion-based search.” What about better analyzing search results?asked an audience member. “We have Yahoo Buzz,” said Weiner, “and others have things that get at this.” Barton said Zillow even has a feature that’s like a stock chart, showing the value of a house over time. Not to be outdone, Weiner said Yahoo is working on a marketplace for ideas, in conjunction with O’Reilly Media.

“What about new user interfaces, new experiences?” asked an audience member. Barton said search engines have a problem: “They’re stuck in the box” (the search box). “UI designers at these companies are dying to get out of it,” but can’t afford to tick off users (or maybe don’t want to go first?). Another question was about “in-context” search, which is actually part of the basic technology of the Internet, according to the questioner, but hasn’t been fully exploited yet. “Why isn’t more known about it?” he asked. That didn’t really get an answer out of any of the panelists — which tends to make we wonder which of them could secretly be working on it(?). Finally, an audience question from Seth Goldstein of Root Markets: “Will Google or Yahoo allow users to take their search activity data with them?” (Meaning, let it be portable.) Both said yes, that it belongs to them. Hey, more power to the user!

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PC Forum: Business Models at the Edges

March 14, 2006 / / 0 Comments

A great mix of panelists for this one: Marc Benioff of Salesforce.com, Jeremy Allaire of Brightcove, Leonard Liu of Augmentum, and Eric Rudder of Microsoft. Did Benioff face resistance to his business model? Yes, the enterprise market has a lot of resistance to change, he said. But finding the right app (not just a platform) was the key for Salesforce.com. “Build it, let people use it, then pop the top and let them build on it. Our AppExchange service now has 200 apps, and we’re adding 5 to 10 more per week.” Jeremy Allaire’s startup is based on “a direct model for multimedia content.” (Note he didn’t just say video.) “The distribution models of old are quickly eroding.” he said. “We’re actually allowing 031406busmodels individual websites to do global broadcasting.” What’s interesting now, Jeremy said, is that his firm is encountering an incredible willingness to experiment” (presumably by the traditional video distribution businesses, and by video producers). Why? “Out of fear, to pursue new revenue opportunities, just to stay out in front.” Esther asks what friction he’s seeing…. “It’s similar to the early days of e-commerce,” he said, “where manufacturers worried about going direct, then ended up discovering that blended distribution worked best. It’s the same now.” When asked what challenges he sees, Leonard Liu of Augmentum, whose firm is providing software development services for U.S. firms via a staff of 450 in China, says the challenges are many, including language. “But China is the next big player” in this space, he said. “We’ve seen in India what can happen. But it takes a true understanding of China — for example, the young people are different than the old — as far as how the cultures work together.” Liu said 60% of what his firm does is total product development, “from beginning to end.” Intel is one big customer. And how does Microsoft react, now that it isn’t such a target, Esther asked of the fourth panelist. “How can we marry all this friction-free software to the Windows environment,” was his obvious first answer. “But we see many opportunities — advertising, subscription models, Office Live. This is an exciting time, now that we’re unleashed to an extent. We think we’re responding well to what people want and don’t want.”

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PC Forum: Security Panel Nuggets

March 14, 2006 / / 1 Comment

Tuesday’s first panel looked at what individuals can do about online security versus government. Didn’t really get an answer to that, except for a rambling question (comment?) from the audience at the end, by David Kirkpatrick of Fortune, which began with him saying, “If consumers are in charge of security, we’re in big trouble.” A few comments earlier by panelist Stratton Sclavos of Verisign were interesting, however. “Our biggest worry is, in the race, can we stay ahead? The cleverness continues.” He also said, shockingly, that security issues on the ‘Net are getting to the point that Versign has “to overprovision our infrastructure by 150 times” to defend against it. Moderator Esther Dyson asked, “Did you say 150x, not 150%?” (The answer was yes, 150x.) “And it’s a big, big burden.” Want another shocking stat? “Our .com registrations have soared recently from 4 or 5 thousand a week to 7 million a week,” Sclavos said — just from all the interest in “monetizing search traffic.” The question then became, how many of these are legitimate vs. potential security problems. Sclavos basically returned the question, asking “What is ‘legitimate’ use? How do we decide?”

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PC Forum: Behavioral Targeting Goes to the Next Level

March 13, 2006 / / 5 Comments

Behavorial targeting 1.0 got a bad name, and for good reason. Collecting consumer information without permission was a sure-fire way to get flamed and trashed. It’s not that the hearts of these vendors weren’t in the right place — after all, we’d all prefer more targeted, relevant ads. But, lo and behold, as online advertising has taken off on such a rocket growth trajectory over recent years, a lot has been evolving behind the scenes in this space — including even by some of the original transgressors. I’ve been impressed by what Esther Dyson and her organization bring to helping us understand this 031306behavtarg changing world of advertising. Four of their hand.pngcked participants for this morning’s “Behavioral Targeting 2.0” panel gave us a great overview and quick education on the topic. Don McLagan of Compete told us his company has been doing permission-based behavioral targeting for more than 4 years, and now has 50 terabytes of data under its care. He says his firm is “the eyes and ears of what consumers are doing and saying online.” How permission-based is his service? He says it’s actually not a dual, but a tri opt-in system. Arvind Rajan of Grassroots said his firm began life as an ASP for political organizations but now has corporate clients, due to its understanding of the individual activist. Release 1.0 said in its current issue that it “is perhaps the most effective, most one-to-one marketer” here. Dean Thompson of mSpoke offers a service for online publishers based on what it calls its “adaptive personalization engine,” which lets users manage their own content and ad preferences. These preferences are represented in something the user can see and edit, which it calls “memes.” Dave Morgan of Tacoda also is pushing the notion of showing consumers their own information, and letting them change it. They don’t have a direct relationship with the consumer, but implement their service through publishers. Morgan was quick to remind is that “advertising pays for 99% of what’s on the web.” The newspaper industry, in which he once worked, “is dying because it thought it could sell online subscriptions.” But there’s a lot of room for more growth in online advertising, since he said “40 percent of online search results pages still have no ads on them.” And yet 90 percent of online ad revenues go to just those search engines: Google, Yahoo, MSN, and AOL.

After the session, at lunch, I ran into the CEO of another “behavioral 2.0” company — Bill Day of When U (formerly head of About.com) — and I asked him for his reaction to the panel. Esther Dyson had even mentioned near the end of the panel that Bill could have been up on stage himself. He said the 2.0 version of behavorial targeting is definitely characterized as being more consumer centric. He said there are three things central to this new generation of the technology: the privacy model (from a technical standpoint), disclosure, and user value — meaning what consumers get in return. In the 1.0 version, he said the latter “was basically nothing.” Regarding his firm’s privacy model, he said they save no data — it’s all on the consumer’s local machine — and they disclose everything. The user value WhenU provides is all about relevancy. His customers include car companies, ABC-TV, LowerMyBills.com, Travelocity, Orbitz, and the firm has a partnership with Overture (Yahoo). “Eighty-five percent of the web is ripe for a new kind of advertising,” he said. “There are large opportunities.” His firm’s model is direct to the consumer, and there aren’t many in this space, he noted. “And ours is the most realtime solution, too” which is critical, he says, because the life of behavioral data is very short — maybe 24 hours. “So advertisers need us to provide the ability to suggest ‘at the moment’.”

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