ImaginativePRO Blog

'THE SUPER ANGELS', THE NEW BREED OF ANGEL INVESTORS THAT PROVIDE MORE THAN JUST CAPITAL

When it came time last year for Twitter Inc. to sign its first major revenue deals – with Microsoft Corp. and Google Inc. – neither the start-up's executives nor its investors did the negotiating. The hot micro-blogging start-up instead turned to one of its advisors and early angel investors, Chris Sacca, a former head of special initiatives at Google Inc. who has invested in 35 start-ups.

"I went in and helped conceive of and negotiate the search deals with data and licensing with those providers," Sacca said. "I knew [Google and Microsoft] but also we didn't have biz dev guys yet." Sacca's work with Twitter is one example of the increasing influence and importance of an emerging group of angel investors who are using their expertise, and wealth, to help build new companies. Unlike many angel investors - traditionally affluent people who invest on the side and provide little more than their checkbooks - these so-called super angels act more like full-time venture capitalists. They're typically successful entrepreneurs, or like Sacca, former technology executives, who actively work with the companies they invest in and sometimes take board seats. These angels mostly focus on Internet and software-as-a-service start-ups since the costs to create these companies have fallen dramatically in recent years with open source software, open Web standards and cloud computing. This allows the angels to provide much of the early capital that larger venture capital firms used to provide. And, as companies like Facebook Inc. and Zynga Inc. have proven already, the potential to make fast money on the Internet is extraordinary. "It's built over the last year to a fever pitch," said Dave McClure, an early PayPal Inc. employee who invests as an angel for himself while also heading seed investing for venture firm Founders Fund. "All of a sudden it seems like seed investing is the 'It Girl' at the party. Everybody's trying to jump in." The Mini-VCs More and more, these investors are toeing the line between angels and venture capitalists. Some of them are creating small seed funds that can compete with venture firms in Series A deals by pooling together money from other influential angels or even institutional investors. Former entrepreneur Mike Maples, for instance, who has invested in notable Web start-ups such as Chegg Inc., Digg Inc. and Twitter Inc., runs a firm called Floodgate that manages a $35 million pool of angel money. Other prominent angels have even moved onto traditional venture capital. Reid Hoffman, the founder and chairman of LinkedIn Inc. and a prominent angel investor, joined venerable venture firm Greylock Partners as a partner last year. Another super angel, Netscape Communications Corp. founder Marc Andreessen, recently founded his own venture firm with longtime angel Ben Horowitz, following in the footsteps of Josh Kopelman, who helped create seed-stage firm First Round Capital. But many super angels define themselves as more closely aligned to the interests of entrepreneurs than venture capitalists, who some say are too focused on home run exits and don't provide enough hands-on guidance. "VCs generally depend on forcing companies to a binary outcome," said Sacca. "They say, 'Look we don't want you to sell until you go to $1 billion.' I appreciate that you paid to invest but if I go to zero, I [as an entrepreneur] get nothing." One angel that is getting more involved is serial entrepreneur Manu Kumar, who has just raised a $6.25 million fund for his firm, K9 Ventures, which he manages himself. In 1996, Kumar founded SneakerLabs Inc., which was acquired in 2000 by Octane Software Inc. for more than $100 million. He then co-founded Web conference company iMeet Inc., which merged with Netspoke in 2002 and sold in 2005 to Atlanta-based Premier Conferencing. Kumar, who has a Ph.D. in computer science from Stanford, started investing his own money in 2000, but in 2007 he noticed that there was a gap between $5 million Series A venture rounds and smaller angel bets. So he decided to raise a new fund from individuals and family offices, partly from investors in his past companies, to plow large sums of money into start-ups. "I realized I wanted to be making a much bigger commitment at the angel level while also being able to do everything I can to help the company," said Kumar, whose investments include online crowdsourcing company Dolores Labs Corp., doing business as Crowdflower, cloud voice-services provider Twilio Inc., online DNA sequencing company DNAnexus Inc. and Highlightcam, a Web cam service for video monitoring. Leading with a larger angel investment can give the right to a board seat, help draw in other investors to the company, quicken the closing of a deal because a smaller number of investors are needed, and allow one angel to do virtually an entire round if others are not interested. Also, having a fund provides more ability to invest in the Series A round pro rata and a cushion to prevent dilution. Several other prominent angel investors have also recently raised new funds. Ron Conway, arguably Silicon Valley's most well-known angel investor, recently closed a new $20 million fund for SV Angel, which he manages with five partners. David Cohen, director of Colorado-based incubator TechStars, confirmed he just closed a $4.5 million fund. And last year, several notable East Coast entrepreneurs with angel-investing experience pooled their money together to form Founder Collective with a $40 million fund. Also in the market raising funds are Sacca, McClure and Aydin Senkut, a former Google executive who now runs his own firm called Felicis Ventures, according to regulatory filings and published reports. They all declined to discuss the fund-raising, citing Securities and Exchange Commission rules. Flexible Fund Dynamics Driving all these new funds are the changing dynamics of the venture capital industry. In the past decade, venture funds have grown larger, and in many cases are too big to make small investments in start-ups that don't require that much money. Even what is now a relatively small $200 million fund, for instance, can only make so many bets before the portfolio becomes too unmanageable. Also, many venture firms can't make what they consider meaningful returns for their investors on seed investments. For example, even if a firm that manages a $200 million fund made a 20x return on a $500,000 investment, that $10 million return will not significantly "move the needle." McClure said many venture funds need five out of 30 companies to have exits the size of Skype Technologies SA, which was acquired for about $2.6 billion in 2005 by eBay Inc., to be successful. Angels, on the other hand, can shoot for 10 smaller exits out of 100 investments at the size of Mint Software Inc., which was acquired for about $170 million by Intuit last year. McClure was an advisor and investor at Mint, which also received angel backing from Ron Conway, First Round Capital, Felicis Ventures and others. Chris Dixon, one of the partners who runs Founder Collective and who made an early bet on Skype, pointed to Google's March acquisition of Docverse Inc., one company he invested in, in which the price was not disclosed but published reports pegged at about $25 million after raising less than $2 million from seed investors Baseline Ventures, Naval Ravikant and Michael Dearing. "If it was funded by VCs, that's not successful, but because it was angels it's a very good return," Dixon said. "The fact that you put smaller amounts in at a lower valuation gives more flexibility with the size of exits." Larger venture firms, such as Charles River Ventures, CMEA Capital, Index Ventures, Polaris Venture Partners, Redpoint Ventures and Sequoia Capital, have also moved more into seed investing, but some firms are doing this more to generate an inside track on larger Series A rounds than to generate returns from an investment, McClure said. This has led to some competition where some angels prefer to keep certain larger venture firms out of seed rounds, according to Dixon. More Than Checkbooks Super angels are usually chosen by entrepreneurs because they fit in at least one of three categories, according to Paul Graham, partner at Y Combinator. They either are highly networked individuals, such as Conway, who has made early bets in Internet companies like Google, PayPal and Twitter; tech geniuses, such as Paul Buchheit, one of the creators of Gmail, who later founded FriendFeed Inc., which was acquired by Facebook; or have deep business expertise in a certain field or sector, such as Max Levchin, who founded PayPal Inc. and now is chief executive of Slide Inc. One start-up, WePay Inc., an online group payment service, tapped Levchin because of his knowledge of online fraud, online payments and his relationships with banks from his experience at PayPal, said Bill Clerico, chief executive of WePay. "Max built the PayPal fraud system," Clerico said. "We knew that, so that's why we aggressively sought him out." WePay has raised $1.65 million total from August Capital and angels McClure, Levchin, Conway and Y Combinator. What they all have in common is that they're providing more than just a check, getting their hands dirty and helping guide entrepreneurs as they build their companies. "What I'm seeing, particularly with my approach, is almost every angel deal that gets done has one or two angels that get highly involved," said new angel Travis Kalanick, who sold his company Red Swoosh to Akamai Technologies for $19 million in 2007 after receiving $1.7 million in funding. "They're not just financial investors. One or two individuals will help them with marketing or company strategy or hiring." Kalanick, who left Akamai in 2008 and began investing in March 2009, has invested in Blipify Inc. doing businsess as Blippy, Expensify Inc. and Kareo Inc., among others. He helps entrepreneurs with hiring, introductions to partners, strategy or sales, and therefore only has time to invest in about 8 to 10 companies per year. Kalanick often invites his portfolio companies to come to his house in San Francisco for "jam sessions" where entrepreneurs get together and talk shop. The angels in Silicon Valley often invest together and know each other well. Despite having dozens of companies to manage, they often split up tasks for sales, partnerships or marketing among each other to make the work more efficient, Clavier said. Often, Clavier and one or two others who make up 50% to 60% of the investment in a round will discuss which angels would have the best knowledge, skills or connections for a particular company, and then they'll try to bring them in as investors, Clavier said. Clavier, who estimated he has invested in 20 companies with Senkut and 17 with Conway, calls this a "distributed partnership." "We all make independent investment decisions but we work together very efficiently," Clavier said. Ultimately these angels' biggest asset is knowledge from past start-ups that they can pass on to new entrepreneurs. "The big thing for me is having made many mistakes and now being able to help people figure what the right way is to do things," said Othman Laraki, an angel investor and executive at Twitter. "What are the things I learned to start a company that I didn't learn from a book? That's what I can share with people."

With costs to create tech companies falling, a new crop of angels is providing much of the early capital that large firms used to provide, and they are adding their expertise and influence as well. Many super angels say they are offering the kind of hands-on guidance VCs no longer provide.

COMMENTARY:  If you are looking for venture capital and need an angel investor, this is a must read. The angels are all around you.  All you have to do is look.  Thank you, Tomio Geron, The Wall Street Journal's VentureWire.

Courtesy of an article dated April 28, 2010 appearing in The Wall Street Journal's VentureWire    

6 REASONS WHY YOUR SOCIAL MEDIA EFFORTS DIDN'T WORK

You know the value is there in social media, but despite your best efforts (or what you think are your best efforts), you’re still struggling to attract anyone. What’s going on and how can you change your social media luck? Below are six reasons SMBs often fail in social media and how you can turn it around.

Stop me when this sounds familiar.

You have no framework: Perhaps the largest reason small business owners fail to see an ROI with social media is because they jumped in without creating a social plan or framework for what they were trying to do. Social media may be ‘newer’ (in theory, anyway), but it’s still a marketing channel. That means before you go into it you want to develop a framework for your objectives, know how you’ll achieve them and determine the key performance indicators you’ll note along the way to make sure you’re on track. Walking into any marketing channel without a clear plan for why you’re there is a recipe for disaster.  Make sure you create your strategy BEFORE you try to implement one.

If you need help putting things in place or figuring out how/what/where you should be tracking, the folks at Web Analytics Demystified and Altimeter Group put out a free white paper (click to download) on social marketing analytics that includes some really powerful information. I recommend you give it a read.

You don’t have great content: This is a biggie. If you’re finding it difficult to engage people through social media, then it may be a sign that you’re not giving them enough to engage with – ie you need better content! Content in social media incorporates everything from your tweets, to status updates, to the posts you publish on your blog. It doesn’t matter how likable, charismatic or helpful you are online, if you’re publishing things of little interest, no one is going to care about the content OR your brand. You may want to use competitive intelligence tools like Quarkbase or Daily RT to see what pieces of content competitors have had success with, Google’s Keyword Research Tool or Google Trends to find out what people are searching for or work on your copywriting skills to help you write more engaging tweets and posts.

You’re targeting the wrong site/audience: Finding customers in social media does not mean creating an account on the largest social media site and setting up shop there. It means finding the site where YOUR people are most apt to talk about you. And that takes understanding where it is your customers hang out on the Web. It doesn’t matter how many millions of users Facebook has if your target demographic spends it’s time on BallHype. Or, even worse, offline. If you’re using Google Analytics, you can check your referrers to see where social media visitors are coming from or you could do something really crazy and ASK your customers which social networks they use and, if they’d be willing, for their usernames so you could “connect” with them.

You put the wrong people in charge: A good degree of your success in social media will have to do with the person(s) running your social media campaign. Brands that tend to do well are the ones that are personable, humble, and that genuinely enjoy talking to people and being social. If that person is not you or someone inside your organization, then you may have a difficult time attracting anyone. Customers can generally tell if an employee likes what they’re doing or finds having to talk to people as enjoyable as making a return the day after Christmas. They want to engage with people who are, themselves, engaging. If that’s not something you can deliver, then consider hiring someone to help you, whether it’s a new employee or a social media marketing company.

You’re not listening: There are two different kinds of companies in social media. Those that listen, and those that sell. Companies who engage in the latter typically have a difficult time gaining traction. While you can definitely use social media to target customers and sell to them, you have to develop a relationship with them first. You need to know who they are, understand their wants, and then give them something that actually has value to them. This is one of the biggest point of differences we see with Facebook Fan Pages that do well, compared to those that do not. Pages that succeed are the ones who are able to leverage personal relationships with customers to offer them something they’re actually interested in. And they can offer that because they’ve listened. They’ve used Twitter Search to hone in on conversations, they’re watching brand mentions on Facebook walls, and they’re making improvements in real-time. That’s the power of social media – the ability it gives you to bob and weave in line with what your customers are asking for.

You’re just ‘dabbling’ with it: If you spent twenty dollars a month on your television ads, you probably wouldn’t be too upset when they don’t convert for you. Of course they’re not bringing in droves of customers; you’re not really using television. You’re just ‘dabbling’. Well, if you spend nothing on social media, then you’re going to see the same return. And that’s where many small businesses are right now – they’re ‘dabbling’ or ‘experimenting’ in social, but they’re not dedicating any resources to it. They’re not hiring people to do it, they’re not investing in real campaigns, and they’re not paying for tools that will help them monitor and benchmark what they’re doing.  Just like with anyone else, the investment you put in is going to dictate the value you get out of it. Small business owners who ‘dabble’, should expect to get dabbling results.

Above are six of the biggest reasons I’ve seen for why companies don’t get as much out of social media as they could. What have been your experiences with it?

COMMENTARY:  Excellent advice for social media newbies. Social media is very knew and we are only beginning to understand the basic fundamentals. I strongly recommend that marketers get a basic knowledge of social marketing and social media.  Don't go it alone.  Hire a social media expert.  Establish goals, budget and method for measuring effectiveness.  You get out what you put into social media.

Courtesy of an article dated April 27, 2010 appearing in Small Business Trends

    

GOOGLE'S ANDY RUBIN, TALKS UP THE NEW FLASH SUPPORT ON ANDROID FROYO

In a New York Times interview, Google's Andy Rubin seemed to take aim at Apple in the most congenial of ways. He didn't bash Apple, but he did lay out why he thinks Google will come out on top in the smartphone wars--and a lot of those reasons are features specifically absent in the iPhone.

Rubin "promised" that full support for Adobe Flash would come in the next version of Android, 2.2 (also known as Froyo--Android releases are named alphabetically after desserts, having already moved through Cupcake to Donut and now to 2.1, Eclair). Rubin may just mean full support for Flash Lite, which is already supported in some smartphones from Nokia and HTC but which doesn't allow viewing of online video, including Hulu and Netflix . Hopefully he means the full version of Flash, which would be very impressive if true.

He played up the benefits of "openness," though when asked if the average (read: not a Linux geek) cares at all that Android is open-source, he responded that they'd miss it if it was gone. That's not necessarily the most convincing argument, especially when Apple's locked-tight iPhone has proven such a blockbuster.

When asked about the consistently confusing relationship between Android and Chrome OS, Rubin failed to really separate the two:

He said the two platforms represented two different ambitions at Google – improving access to information on mobile phones, in the case of Android, and pushing forward the open Web in the case of the Chrome operating system.

The efforts are not necessarily mutually exclusive, Mr. Rubin said. “I don’t know if there will be Chrome and Android tablets, but if a consumer walks into store and two of those tablets are my company’s choices, I’m all good.”

Undoubtedly, two tablets with two different Google OSes would prove confusing to, well, even me, and it's sort of my job to understand the difference between devices like that (sorry, bosses!). That's a legitimate concern--Android will be scaled up to TVs, as well as remaining on pocketable smartphones, and with different custom user interfaces and a breakneck pace, it may be hard to keep everything consistent. Will an app work on a heavily modified Android phone like the HTC Evo 4G? How about an old but Google-centric phone, like the T-Mobile G1? Rubin merely said that Google was working hard to make sure that issue was addressed--not too reassuring really.

The moment of levity: the Times reporter joked about a top-secret Android prototype being left behind in a bar. Rubin's response? "I'd be happy if that happened and someone wrote about it. With openness comes less secrets." To Andy Rubin: I would be happy to send you my shipping address, to which the next top-secret Android smartphone can be sent. I even promise to write about it.

COMMENTARY:  I want me a copy of the next Android platform boosted smartphone or the pathetic failure known as the Nexus One.  Put me on your mailing list.  Better yet, Mr. Rubin, please leave one for me on the roof of my car, with a note that says, "here take this, and tell your blogger friends, we could use the marketing buzz."  

It's good to hear that the Android 2.2 (a.k.a. Froyo, which is short for frozen yogurt), will have full Flash support. This means that there will probably be a huge spike in the number of porn streams, no doubt.

By the way, good move by Google buying out Agnilux, the supplier of the A4 microprocessor chip used in the new Apple iPad. I bet Steve Jobs is jumping around like a madman, tearing pillows and breaking glass at home. This is what happens when you adopt a contractual mode of operation, and a competitor swoops in and buys a key component supplier to your newest product. What amazes me is that founders of Agnilux are ex-Apple engineers. Cash wins over company loyalty every time.  I guess those engineers won't be on Jobs next Christmas party invitation list.    

Somehow I have a feeling that Steve Jobs is wringing his hands and acting the part of the Hunchback of Notre Dame, displaying a shit-eating grin, and rolling his eyes like an Iguana, plotting how to get even with Google.  Ahh, sweet revenge.  I just love these corporate technology wars, don't you?  Trust me, there will be more of this corporate juvenile behavior.

Courtesy of an article dated April 27, 2010 appearing in Fast Company 

U.S. ORGANIC FOOD AND BEVERAGE SALES GREW 5.1% TO $24.8 BILLION IN 2009

U.S. organic food and beverage sales grew 5.1% to $24.8 billion, last year, according to the Organic Trade Association (OTA). OTA's annual data are based on surveying manufacturers, distributors and retailers

. 

OTA's "2010 Organic Industry Survey" shows organic fruits and vegetables realized the greatest growth last year: up 11.4%, to $9.47 billion.

That means that organic produce not only represents 38% of all organic food sales, but 11.4% of all U.S. fruit and vegetable sales, according to the association. In comparison, in 2000, organic fruit/ vegetable sales totaled $2.55 billion, or just 3% of total fruit/ vegetable sales, OTA reports.

Other organic categories' sales last year, according to OTA: dairy, $3.57 billion; packaged/prepared foods, $3.55 billion; beverages, $3.27 billion; breads/grains, $2.83 billion; snack foods, $1.14 billion; condiments $521 million; and meat/poultry/fish, $456 million.

OTA estimates the total U.S. organics product market -- including food and beverages and non-food products such as supplements, personal care and clothing -- grew 5.3%, to $26.6 billion. OTA puts total non-foods organic product sales at $1.8 billion, representing 9.1% growth over 2008.

OTA pointed out that total U.S. food sales saw growth of just 1.6% last year, and total non-food product sales declined by 1%. "These findings are indicative that even in tough times, consumers understand the benefits that organic products offer and will make other cuts before they give up products they value," said OTA Executive Director Christine Bushway.

Still, last year's 5% organic F&B growth represented a definite softening compared to the robust, double-digit growth of recent years. Last year's OTA industry survey showed organic food sales growth of 15.8% in 2008.

Nutrition Business Journal, a research/publishing/consulting group serving the nutrition, natural products and alternative health care industries, recently estimated that the total organic industry (including food and beverages and non-food products) grew 5.5% (to $24.4 billion) last year.

In comparison, the total organic industry grew by 13% in 2008 and 19% in 2007, according to NBJ. "Some organic categories, including snack foods and beverages, could barely tread water last year, while organic dairy and packaged and prepared foods actually slipped into negative sales territory," noted these researchers. However, NBJ predicts a return to stronger organic growth levels as the economy improves.

Last month, Mintel said that 21% of organic food buyers have reported reducing or eliminating organic purchasing due to budget tightening, and 20% have reported switching to cheaper organic options. (U.S. consumers are not alone: In the U.K., a very strong market for organic products, a just-released Organic Market Report shows overall organic product sales down 12.9%, and organic dairy, fruit/vegetables and fresh meat down 6.5%, 14.8% and 22.7%, respectively, according to The Guardian.

However, Mintel also found that 48% of U.S. organic purchasers were buying as much or more organic food as before the recession and that 35% of Americans as a whole indicate willingness to pay more for "environmentally friendly" products.

Mintel also reported that analysts are predicting that organic-plus-"natural" F&B (a considerably broader product universe than OTA's certified-organic data alone) will grow by nearly 20% between 2010 and 2012. Mintel put organic-plus-natural growth at 1.8% for 2009.

OTA reports that more than half (54%) of all 2009 U.S. organic food sales were through mass-market grocers, club stores and retailers. Natural retailers were next, with 38% of total organic food sales. Although still representing a small percentage of sales, farmers' markets, co-ops and community-supported agriculture operations "gained a lot of interest as consumers increasingly look for locally and regionally produced organic foods," the association added.

In the non-foods sector, supplements increased 12%, to $634 million, to represent 35% of total organic non-food sales, OTA reported. Organic fiber (linen and clothing) totaled $521 million (up 10.4%), and personal care products reached $459 million (up 3.7%).

COMMENTARY:  Was just talking with an entrepreneur testing a new product through Whole Foods.  No wonder Whole Foods is doing so well. They are in the right market, at the right time. That's a lot of organic bananas.

Courtesy of an article dated  

LIFESTYLES OF HEALTH AND SUSTAINABILITY (LOHAS) MARKET REACHED $290 BILLION IN 2008

A new report from the Natural Marketing Institute (NMI) says that consumer spending on products related to health and sustainability reached $290 billion in 2008. The analysis found increases in many spending categories within lifestyles of health and sustainability, known as LOHAS.

"The biggest growth has been in green building and alternate energy, which more than doubled from 2005 to 2008," Gwynne Rogers, NMI's LOHAS Business Director, tells Marketing Daily. Spending within the personal health category -- the biggest of five core categories -- was also up, at $117 billion.

"Sales of organic food hit $23.6 billion in 2008, almost double what it was in 2005," she says. "And spending on personal care products rose from $4.9 billion to $8.4 billion. Those gains aren't surprising, when you think of the greater involvement of large companies, such as Clorox's acquisition of a company like Burt's Bees. With so many larger companies offering LOHAS products, the scale changes dramatically."

Spending on supplements rose to $23.2 billion, from $19.6 billion.

Green building, which includes things like certified homes and Energy Star appliances, came in at $100 billion; eco-tourism at $42 billion; alternative transportation (such as hybrids, diesel and electric vehicles) at $20 billion; natural lifestyles (comprised of apparel and home furnishings) $10 billion, and alternative energy, $1 billion. (While NMI does consider socially responsible investing part of LOHAS, those numbers are not included in the total.)

The Harleysville, Pa.-based company collaborates with Georgetown University to track spending.

Rogers says she expects to see that LOHAS spending will have continued to grow, right through the recession, with the biggest gains in products that relate most directly to health or energy savings. "Those benefits are much more tangible and immediate for consumers, so it's always easier for those types of products to grow faster."

COMMENTARY:  I am really amazed at just how much people spend on supplements or dietary supplements.  This includes vitamin pills, weightloss products, natural medicines, cereals and functional beverages.  Boomers, are the biggest buying segment of this market.  No surprise here.  And, let's not forget those vegans or vegetarians. They are really into fresh organic foods from vegetables and fruits to vegetarian meals.

Courtesy of an article dated April 27, 2010 appearing in MediaPost Publications Marketing Daily

  

RIVALRY: GOOGLE ACQUIRES PRODUCER OF THE PROCESSOR CHIP FOR THE APPLE IPAD

Another day, another -- you guessed it -- Google acquisition. Google has picked up widget maker LabPixies for $25 million, according to Israeli financial news website TheMarker.

LabPixies, which develops gadgets ranging from calendars, news feeds and to-do lists to entertainment and games, was one of the first developers of personalized Web gadgets for Google's iGoogle and Android software applications, as well as for the iPhone.

"The deal is Google's first acquisition of an Israeli start-up," according to Reuters.

"Google loves to build platforms on which programs run -- Android, App Engine, iGoogle, and in the biggest picture, the Web itself," writes CNet's Deep Tech blog. "But platforms are of no use, and aren't much fun, without applications on top, so Google often also kick-starts development with applications of its own."

"Over the years, we worked closely together on a variety of projects, including the launch of a number of global OpenSocial based gadgets," iGoogle team member Don Loeb said in the blog post regarding LabPixies. "Recently, we decided that we could do more if we were part of the same team."

After joining the Google team, Mashable notes that LabPixies will help expand iGoogle across Europe, the Middle East, and Africa. "As far as LabPixies' current products go, there are no planned changes to them, but the folks at LabPixies say they 'will continue to evaluate this over time.'"

Though a bit player, the fact that LabPixies develops personalized Web gadgets for the iPhone won't be lost on some analysts who've speculated that Google buys companies just to annoy Apple.

Just last week, for instance, Google acquired chip maker Agnilux, which was founded by some ex-Apple engineers who helped create the company's A4 chip, i.e., iPad's processing engine.

COMMENTARY:  It's hard to believe that a lil widget-maker like LabPixies can fetch $25 million.  Personally, I question the wisdom of this type of acquisition, because the market for widget-makers is very crowded, like there are app developers for the Apple iPhone. 

However, I do find it very interesting and almost comical that Google would acquire Agnilux, the company that produces the A4 processor chip for the iPad.  I don't know if Apple has sourced suppliers for an alternative for the A4 processor, but they better get cracking.   The above article makes a point that Google acquires companies just to piss off Apple.  Well, I think they found one.  I chuckle at Google's motto:  "Do No Evil".  Sure.

Courtesy of an article dated April 27, 2010 appearing in Reuters  

RESEARCH: FACEBOOK AND SMARTPHONES ARE CREATING A GENERATION OF "SOCIAL NETWORK" ADDICTS

Huey Lewis will have to keep on looking: social media appears to be as addictive as any chemical compound, and while it satisfies some of his key criteria for a new drug -- "one that won't spill, one that don't cost too much, or comes in a pill" -- it fails to meet some of his most important demands.

Specifically, social media withdrawal leaves individuals "nervous, wonderin' what to do," according to a new study from the University of Maryland's International Center for Media & the Public Agenda, which asked 200 U of M undergraduates to forego all media for 24 hours -- including the Internet, their mobile phone, TV, radio, newspapers and magazines. The results are either amusing or disturbing, depending on your degree of attachment to our declining civilization. Even allowing for a certain amount of self-dramatization, the reactions were indistinguishable from addicts deprived of a fairly powerful habit-forming drug, with subjects using language like "frantically craving, very anxious, extremely antsy, miserable, jittery, crazy."

Unsurprisingly the loss of mobile connectivity was probably the most serious blow to the young crackheads in Maryland. One reported: "Texting and IM-ing my friends gives me a constant feeling of comfort. When I did not have those two luxuries, I felt quite alone and secluded from my life. Although I go to a school with thousands of students, the fact that I was not able to communicate with anyone via technology was almost unbearable" (interestingly, the study found that calling and email both trailed far behind texting and Facebook as ways of communicating).

ICMPA director and journalism professor Susan D. Moeller noted the most noticeable complaint was a feeling of social deprivation, as "they wrote at length about ... how they hated losing their personal connections. Going without media meant, in their world, going without their friends and family ... what they spoke about in the strongest terms was how their lack of access to text messaging, phone calling, instant messaging, email and Facebook, meant that they couldn't connect with friends who lived close by, much less those far away."

The U of M study also found that social media double as news sources, with students expressing anxiety at being cut off from information delivered via blogs, text messages, email, and social networks like Facebook and Twitter. The study summarized the findings on news consumption: "Students have only a casual relationship to the originators of news, and in fact rarely distinguished between news and more general information... While many in the journalism profession are committing significant resources to deliver content across media platforms -- print, broadcast, online, mobile -- the young adults in this study appeared to be generally oblivious to branded news and information."

Regarding social media in particular, one respondent described it in terms of animal reflexes:"It is almost second nature to check my Facebook or email; it was very hard for my mind to tell my body not to go on the Internet." Another respondent had to resort to what I would call the old "flushing the cigarettes" approach: "I knew that the hardest aspect of ridding myself of media though, would be not checking Facebook or my emails, so I went ahead and deactivated my Facebook account in advance. It's pathetic to think that I knew I had to delete my Facebook in order to prevent myself from checking it for one day."

Returning to Huey Lewis, it would appear social media actually fails to meet a number of his criteria, including "one that won't make me sick" (withdrawal), "one that won't make me crash my car" (texting while driving), "one that won't hurt my head ... or make my eyes too red" (eyestrain), "one that won't keep me up all night, one that won't make me sleep all day" (all-night Facebook surfing), and "one that won't make me talk too much" (self-explanatory). By contrast, social media only meets a few of the other demands, including "one that won't make my mouth too dry ... or make my face break out." Finally, no decision could be issued on the following, as the criterion is unclear: "One that won't make me feel three feet thick."

COMMENTARY:  I cannot believe what I just read.  If I hadn't read it, I would think it was almost laughable. 

Somehow I have been spared being addicted to Facebook.  It might be cause I don't use Facebook as much as your average college student.  To tell you the truth, I hardly use it at all, except only recently. I made one new friend, Hoorah.  My big thing is blogging.  Twitter is my drug of choice.

What has Mark Zuckerberg rot on the young minds of tomorrow.  Somehow, I must be impervious to this new malady.  I once went nearly week without a single blog post.  Could not find a single thing worth posting to my blog.  Did I panic?  No.  The world can only take so much Facebook and Apple.  Another time I went to Rio de Janeiro and didn't check my email or use a computer for two straight weeks.  You see--I had other priorities.

Having said this, this gives me an idea for a new business opportunity.  Facebook Addiction Withdrawal Centers.  Thousands of them located conveniently next to your local college campus. While we are at it, I will add tanning beds.  Facebook now has an estimated 500 million members, so I feel very confident that I will have no shortage of patients.  Time to put a business plan together. 

Or how about: An Apple Iphone Withdrawal Clinic (iPad clinic coming soon, no doubt). Shame on you Steve Jobs for screwing with the minds of those young Apple evangelists. Anybody that would stand in line for a damn tablet computer has to be a mental case.

Or how about Google and Gmail.  Thankfully, I weaned myself off both a year ago.  The search company that swears, "do no evil", is quietly screwing with your minds.  I keep hearing, "Google me".   Yeah, go ahead, and Google me.      

Courtesy of an article dated April 26, 2010 appearing in MediaPost Publications The Social Graf 

ELECTRIC VEHICLES ARE COMING SOON, BUT IS THE INFRASTRUCTURE AND CONSUMERS READY?

The electric car is coming, but are consumers and the power infrastructure rolling out the welcome mat?

That question has been academic until now, as some 30 electric vehicles will enter the market in the next 18 to 24 months -- including cars from niche players like Coda and Tesla, and those from major brands like Nissan and Chevrolet. The latter on Friday sponsored a panel at Columbia University's engineering school to bat the question around, using the venue to show off the Chevy Volt plug-in electric car. One of the cars, going on sale this year, was parked on the main quadrangle.

The time -- the day after the launch of Earth Week -- and the place -- New York City -- were relevant for the discussion. The city, developers, ConEd, and automakers are trying to dream up a charging infrastructure that makes such cars appealing to consumers, about 16% of whom say they are willing to buy electric cars in New York.

Lawrence Burns, former VP of research and development at General Motors, one of the panelists, said "range anxiety" is probably the greatest barrier to consumer acceptance of electric cars -- something Chevy is hoping to ameliorate with its vehicle. The Volt is designed to go 40 miles on a charged battery, after which an onboard gasoline generator kicks in to power the battery. "Consumers don't want to make a trade-off on convenience, safety, security and time," he said. "They do not want to be inconvenienced because they don't have sufficient vehicle range on a charge. They don't want to be stranded somewhere."

Burns said any revolution in individual transportation must involve innovations beyond those pertaining to drive-train technology. He says urban transport must finally include "mobility Internet" where digitally connected cars communicate with each other, and with their environment and are thereby able to guide themselves to avoid collisions. "We will see vehicles that don't crash or run into people and objects, that can drive themselves so that texting won't be an issue. Most would conclude that driving is, in fact, the distraction -- not texting."

The company will show an example of this -- what it sees as the next iteration of urban mobility -- at the Shanghai "Better City Better Life" World Expo next month, featuring a 750-pound Segway-type electric vehicle for two people.

Panelist Tony Posawatz, vehicle line director for Chevy Volt, said that the price for the new Volt, not officially announced, will be "a little more than a comparable compact car," less than $30,000 for the basic model.

COMMENTARY:  I didn't realize that the number of new EV models was up to 30.  Man, with those kind of numbers, there is going to be a quick shakeout.  I am betting on the big automakers, either US or Japan to take the lions share of the market.  

I think the big automakers are waiting to see how Fisker Automotive and Tesla Motors do with their sports EV's,  Although Tesla Motors is coming out with a sedan, the price of $44,000 is bit up there for my money.  Tesla has a legup on Fisker Automotive.  The latter has received over 3000 deposits for delivery  of their cars in 2011 or 2012.  Gee, that's a long time to wait.  But, I do like their designs.

I totally agree that range is going to be what sells these cars.  The prices do have to come down, and GM's Volt at $30,000 sounds like a good bet.

However, there are to big problems:  

• EV battery technology has got to make a quantum leap forward. A real game changer.  A 40-100 mile range is just not enough, unless you are driving close to home.  On long drives, this simply won't work. 
• Electrical charging stations (ECS) need to be built, and they have to be convenient to EV car buyers or this market is going to grow very slowly. Nobody wants to run out of juice on a long trip.

Just how many consumers will fork up the doe for these new EV's remains to be seen.  Toyota Prius, the popular electrical hybrid car, has shown promise, and is the biggest seller so far.  I don't have the exact numbers, but they appear to be everywhere. They pretty much left everybody in the dust.

As for me, I would like to see a flying car.  There is no traffic problems up there, helps solve commute traffic jams.

Courtesy of an article dated April 26, 2010 appearing in Marketing Daily

   

FACEBOOK SILENTLY SHUTSDOWN FACEBOOK LITE, ITS ANSWER TO TWITTER

Just seven months after first launching Facebook Lite, the company has decided to shut the service down. Facebook Lite was a simplified version of the site which was supposedly “optimized for people with slow connections” but apparently not enough people were using it. Funny enough, many of the people that I knew were using the site were users with fast connections who liked a slimmed version of the site.

First noticed by ReadWriteWeb, Facebook has not said anymore aside from the following message which they posted on the company’s Facebook Page:

Thanks to everyone who tried out Facebook Lite. We’re no longer supporting it, but learned a lot from the test of a slimmed-down site. If you used Lite, you’ll now be taken to the main Facebook.com site.

While the company has made numerous attempts at creating slimmed down versions of the site, I would guess that maintaining both the main version of the site as well as the simplified versions simultaneously has proven difficult. Additionally, Blake Ross, who was the developer behind Facebook Lite, is now focused on other projects including the new Facebook questions product.

COMMENTARY: When Facebook first announced Facebook Lite, I predicted that it would never make it against Twitter.  So it comes as no surprise to me that Facebook saw the handwriting on the wall and killed Lite, and cutting its losses.

I don't know how many times I have said this, but there are several golden rules of technology entrepreneurship and innovation that I adhere to, and so should entrepreneurs, and they go something like this:

• Never launch a new product or service just to have something out there. Being just "another one of them" does not work.  Do your beta-test first.  Get the feedback, and it looks promising, make the changes and do a second beta-test just to make sure. If you get excellent feedback, then you have yourself a possible winner. Facebook did not do this.
• Never launch a new product or service into the marketplace unless it is vastly superior to that of the competition.  Incremental improvements do not work.  Your new product or service must be earth shattering, give everybody an "aha" moment.  The technology must be breakthrough or disruptive and game changing.  EXAMPLES:  Apple iPhone, with smartphones and iPad (I am holding off a bit, and just because Steves Jobs says so, but it is just too early to tell) with tablet computers and eBook readers.
• Never enter a market that is highly concentrated or dominated by a major industry leader(s).  The advantages go to the bigger companies in that industry.  EXAMPLE: Bing and Yahoo have both tried to crack Google's dominance in the Internet search sector, with some success, but without making a significant dent in Google's market share. Google reins supreme, and I don't see this changing anytime soon. Searchme, a search engine of a different color, is another great example of an idea that was doomed to failure from the start. Sorry Jeff Adams. 
• Never enter a market if you do not have experience in that market. Twitter was THE microblogger of all bloggers. Period. If didn't matter that Facebook was a bigger company.  In this case monumental size did not offer any advantages.  Facebook is a online social network community.  Twitter is a  blogging community.  Two different markets filling different needs.  My other theory: Most of the serious microbloggers are already on Twitter.  If you are a serious microblogger you have built "brand equity" via followers on Twitter, and are not going to switch over to Facebook and hope your followers will come with you.   . 

I see this sort of thing all of the time.  It is happening in online video sharing, IPTV and social networking.  The fallout is everywhere to be seen as industry consolidation starts to set in on these industry sectors.     

Courtesy of an article dated April 20, 2010 appearing in All Facebook

HOW TO GET TO NO (OR YES) QUICKLY, WHEN MAKING YOUR VENTURE CAPITAL PRESENTATION

In the early 1980s Roger Fisher and William Ury authored what would become one of the best-selling business books of all time on negotiations, Getting to Yes. The book's theme was how to gain mutual agreement between parties in an objective non-adversarial manner. The core assumption behind the book (and most articles on the topic of selling or negotiations) is that both parties want a "yes." This post focuses on the importance of the "no."

I received an email from venture capitalist and popular blogger Larry Cheng, describing an investment opportunity and ending with a great phrase: "as always a fast no is better than a long maybe." I have since borrowed that sentence many times over. Too often people are not sure if they want a yes and instead create prolonged discussions because they are either: a) too embarrassed to say no, or b) just want option value.

My firm Cue Ball was recently raising capital during one of the most economically challenged periods ever to do so, and I found myself on the receiving end of "no" in more languages than I knew. As the economy improved and our portfolio held strong ground, there were suddenly many yeses and also many maybes. I found myself missing that fast no, because every maybe inevitably involved follow-up meetings, additional information, and by definition an uncertain outcome. A long maybe takes us away from the day jobs we should be doing.

I came to realize that the person delaying a decision is often not the decision-maker, but the person making the pitch. In our own desire to preserve the possibility that an investor could be swayed and cultivated, we create false hopes and become masters of inefficiency. Because of our relationship focus and soft-sell process, we sometimes forget the need to push for the "ask" and more importantly, for a definitive decision. For prospective investors on the other side of the table, there's little downside to delaying a definitive no. Time allows one to see more information and make a more informed decision. How can you blame them?

So if you are on the pitching or selling side of an opportunity, what can you do to drive a prospect to decision? Here are four things that can help:

1. Be clear on the "ask". I have seen people pitch us with brilliant clarity of ideas, but a cloud of ambiguity on what they want from an investment partner in terms of both capabilities and dollars
2. Set a firm deadline and sense of urgency. When meeting any prospective investor, customer, or buyer, set a clear deadline for a decision. In most cases you can get to a definitive yes or no just by being clear about a close date.
3. Agree to and adhere to a post-pitch process. Outline next steps for the follow-up. What additional documents or meetings are required for a decision? When will these occur and will there be sufficient time given the deadline at hand? If nothing is required, agree to the next follow-up date and the form of the follow-up. Make the follow-up timing shorter than your gut tells you: if you think you should follow up in two weeks, say a week. A follow-up in two weeks often means that the person is revisiting the issue in 13 days (the day before follow-up) versus six days for a follow-up in a week.
4. Affirm the silent no and provide an out. Become better at trying to confirm the silent no. Schedules change, people ask for more time, and other priorities take over. Know how to escalate to the no. Prolonged silence or indecision requires a forcing mechanism. Something along the lines of "I want to thank you again for your time considering this and realize that now may not be optimal timing. Can I assume a pass for now?" Human nature is more conditioned to a yes or maybe, rather than a no. Politely providing an out is usually appreciated by the other side, and it is a good way to elicit a definitive decision or gain clarity on the best next step.

A yes is obviously the answer you always hope to get, but the ability to get a no, especially if it is a quick one, is critical to maximizing efficiency and effectiveness. The sooner you get a no, the faster you'll be able to look for that next yes.

COMMENTARY:  If you want to get to NO really, really fast, do what a client of mine recently did.  Screw up the pitch while on a conference call.  The VC and his possee, unnamed to protect the innocent, asked one question after another in machine gun-like fashion, as is typical of most VC's.  My client, one of the co-founders, hesitated, garbled his words, sounded disoriented, then referred the answer to a question to one of the members of his team.

To make a long story short, after 15 minutes, the VC said very coldly, "This is not the kind of deal I am looking for. Doesn't fit with out business model, Thank you for your time, but I have to go."  Click went the phone.  Later that day I spoke with my client and he admitted that he screwed up the pitch.  So people, practice your pitch.  You only get one chance at this. 

I have learned over time that if the VC listens for more than 15 minutes, they are is somewhat interested, but need more convincing.  If the presentation lasts 30 minutes, you are getting closer to a YES, but not quite there.  If the things goes for 45 minutes, you are on third base.  If it lasts one hour, you just scored a homerun.  I have not had a lot of those happy moments, but when they happen, you never forget them.

Courtesy of an article dated April 21, 2010 entitled "How To Get To No" appearing in the Harvard Business Review