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September 29, 2004

Tom Watch: I earned my first dollar today as a blogger!

This is an exciting day, because I just earned my first dollar blogging. It’s $1.45 to be exact and on just my second day with advertisements on my site. And my traffic has soared by 600 per cent since yesterday. At this rate of growth SiliconValleyWatcher.com, will be the world’s largest within just a couple of months…

Unfortunately, I can’t frame my first dollar, but maybe I can frame the screen shot of my G**gle account (I’m not supposed to even mention that there are G00Gly things down there…V or over there >, or even call them @ds, or else they could cut me off, and then how would I survive?)

My ambitions to become a micro-media-mogul are now officially underway, and it is all thanks to YOU, my (hopefully) loyal readers. Thank you, thank you, thank you!

Posted by Tom Foremski at 03:57 PM | Comments (1)

Tom Watch: I ran out of bandwidth Tuesday morning…

I am learning a lot about the daily travails of “blogging” or being a “stand-alone journalist,” as Chris Nolan puts it. You also have to be a stand alone IT expert sometimes, a stand-alone publisher, and a stand alone anything-else-that-needs to be done. That’s at least four jobs rolled into one.

I wasn’t handling the IT job very well Tuesday morning. I had been slowly rolling out this site over the past few days, just telling small groups of people at a time.

But traffic spiked up quite quickly and I ran out of bandwidth. I didn't notice for a while, then it took me hours to find the right combination of username and password to get into my service provider and open up a bigger pipe. So, my apologies, and I hope you come back.

Posted by Tom Foremski at 12:09 AM | Comments (0)

September 28, 2004

Tech Watch: Come listen to Google stories from influential angel investor Ram Shriram

This should be a very interesting evening at TIE, featuring Ram Shriram, an angel investor who played a big part in the Google story.

And TIE is promising quite a lot from Ram:

The TIE web site says:

“Google will become part of the legend of Silicon Valley. Its story will be told and retold, and like all stories, additions, admissions and omissions will occur depending on the storyteller and the listener. But the story is clearly for the telling.

And who better to share that story with us other than one of our own charter members-Ram Shriram-who was one of the original angel investors and who can share with us that personal journey he and the founders of Google took from those early years to the spectacular debut on the stock market.

Come and listen to the strategy devised in those early days and months and many ups and downs and twists and turns of building a great business.”

Mark your calendars for October 28 and book your seats here—only 250 available.

Posted by Tom Foremski at 10:10 PM | Comments (0)

Media Watch: Top Libertarian think tank thinker debunks media myths before a senate committee—with no mention of bloggers

....and kicks off preliminary book tour

Like St George slaying a seven-headed dragon, Adam Thierer, a leading thinker for the Cato Institute in Washington, delivered a very well argued testimony entitled “Overcoming mythology in the debate over media ownership,” delivered September 28, 2004 before the Senate Committee on Commerce, Science, and Transportation.

It’s a good read, and it’s easy to see why Mr Thierer has earned his standing as a leading think tank thinker. (I would kill for a business card that said Tom Foremski, Think Tank Thinker)...

However, his business card reads Director of Telecommunications Studies, Cato Institute, and from that vantage point Mr. Thierer has demonstrated an impressive analysis of the media sector.

But I wonder how the senators reacted to his opening statements, which launched into a full-on pitch for his forthcoming book.

No sooner had he said good morning and introduced himself, Mr. Thierer plunged straight into plugging his book, like a guest on Charlie Rose or Letterman.

“Thank you, Mr. Chairman, for your invitation to testify here this morning on the important issue of media ownership regulation. This hearing is especially timely for me since I have a new book on this issue due out early next year entitled, “Media Myths: Making Sense of the Debate over Media Ownership." I chose that title because I have come to the conclusion that the debate over media ownership is being driven more by myth than reality,” Mr Thierer said.

The testimony is a good read, and Mr Thierer’s lance of reason quickly slays the seven-headed Hydra of media mythology. These myths include ideas such as: that there is not enough diversity in the media; there is less localization of media; that a greater concentration of media ownership is bad; and that a healthy democracy requires a regulated media sector to ensure high quality.

Mr. Theirer’s testimony goes on to describe a media sector that is not in trouble, or troublesome to society, but is in fact throwing up an abundance of news and other types of information, producing an increase in dialogue and debate. All good things in a healthy society, and I certainly agree with some of his points.

However, in his testimony, he did not mention bloggers, blogging, or blogs, yet the blogosphere must easily be the largest, and most diverse media entity in the world. (He seems unaware that this kind of disrespect is not tolerated well within the blogosphere.)

But he did allude to bloggers when he told the committee that anyone who thinks that the Internet hasn’t radically changed the nature of modern media “might want to ask Dan Rather what he thinks about the impact of new technologies on traditional media.”

His testimony described a switched on, wired US population, with a thirst for information and “ . . . with 72% of Americans now online and spending an average of nine hours weekly on the internet surfing through the 170 terabytes of information available online—which is seventeen times the size of the Library of Congress print collections.”

He should have gone further on this point, I believe, and said something along the lines of “and that includes surfing through about fifteen Library of Congress amounts of adult content, per week.” And in less than nine hours--isn't broadband wonderful.

It is a good read and I intend to keep it on file, as it has some very good statistical information in it. And I’m sure well meaning friends have already advised Mr. Thierer to rush out a chapter on blogging for his forth coming book.

Here is his testimony, “Overcoming Mythology in the Debate over Media Ownership.”

Posted by Tom Foremski at 08:00 PM | Comments (0)

Hold your Geek Beacon high--or how to flag a cab in SF part 2

Thanks for the emails and comments on my recent entry about using a Treo and its bright screen to flag a taxi down. I asked for suggestions on what to call it, to see if we could create a successful meme around it, especially since many cell phones now have bright color screens. So far, my favorite is...

...Pace’s suggestion, “the Geek Beacon.”

But, more suggestions are welcome. And hopefully we can have some fun with this and link it to San Francisco/Silicon Valley.

I just don’t want to be in New York next month and see people hailing cabs with the Geek Beacon, and calling it the “Manhattan Salute” or something, and claiming it for their own. Or, in Washington, they’ll start claiming that they invented the “Freedom Light” when hailing a cab.

No, the Geek Beacon demonstrates that indeed, we reside at the heart of all innovative thinking about everything. Yes, New York might be the center of all cultural things (yawn), and San Francisco and Silicon Valley are but a quaint fishing village next to a large business park--to the citizens of Gotham. But, they will not own the Geek Beacon. That stays here. Along with the San Francisco treat.
Join me, and hold your Geek Beacon high (especially at night.)

Posted by Tom Foremski at 01:32 AM | Comments (0)

Media Watch: I have something to say to Om Malik, Business 2.0’s star reporter: stick to writing about broadband, dude!

Om is a dear friend, but his cover story in the latest Business 2.0 is giving away way too much good information.

His article, "The New Road to Riches," partly describes an approach that is a key part of my plans...

And it goes to the root of precisely why I left the Financial Times--because I see excellent opportunities to create small, very profitable ventures that can be developed relatively quickly, sold, and the money used to finance more ventures.

That’s why I chose the name atomicVentures for this business project:

It is a play on my name. It refers to something small but with an explosive nature.

Plus, I can have fun with the logo (thank you Chris Dichtel):

In my case, media ventures are my interest, since that’s what I know something about, and what my team knows a lot about. But, I’m certain the same type of approach can be applied to many things in the “web services” world.

And because there are virtually no capital costs, or long development cycles, there is much less need for venture capitalists and their money.

It’s a new type of world that is better suited to being bootstrapped, or financed by savvy Angel investor groups.

Silicon Valley Angel investor groups such as TIE, and Silicom Ventures have been growing tremendously, and are doing very well, as I mentioned in a recent Financial Times column. Granted, those groups are still mostly investing in traditional type startups, because they have taken over the seed investment part of the financing cycle as the VCs have become more risk averse and moved into later stage financing. But, in what I like to call an increasingly “atomic world,” it is the angel investment groups that will really come into their own, because:

1) They can bring financing into a venture far faster than a VC firm.

2) The combined personal networks of Angel investors can help assemble a management team faster, and with way more experience than Vinod can load up his minivan outside Stanford's Business school.

3) Many small ventures have revenue prospects that are way below the $1bn threshold most VC firms target with their investments.

4) Angel investors know how to flip a company. There are many people at TIE, and at Silicom Ventures that have founded and sold two or more companies in their time.

Posted by Tom Foremski at 12:11 AM | Comments (0)

September 26, 2004

Tom Watch: Fun with a Treo—the “Frisco Wave”

or how to flag down a taxi cab from three blocks away on a busy Friday evening.

I was running late and needed a taxi, but there were few to be seen along Geary Street, and with six lanes of traffic, it was difficult to be seen. Then, I spotted a taxi three, maybe four blocks away, but it was in a far lane, and likely unable to see me until closer, and by then it would be difficult for it to pull across two lanes of traffic to pick me up. But, pulling out my trusty Treo 600, I...

I switched on the screen, which is quite bright and large on a Treo 600, and waved it high above my head. Within seconds the taxi flashed back a response, and it had time to move across two traffic lanes, and I was in the cab and on my way.

“That was the first time I’d seen anybody do that,” Chuck Walker, the cab driver said. “That was very effective, I could see you from a long ways away. Otherwise, it’s difficult to spot people unless they step out onto the road. I told him that it was a spur of the moment thing, but that maybe we were both present at the creation of a new thing, and maybe we could launch it as a meme.

But what to call it? The taxi beacon? The taxi flash, or flash a taxi? Or, the “San Francisco wave,” which would likely be shortened to the “Frisco wave” by outsiders, much to the annoyance of San Franciscans, who generally hate the term “Frisco.”

What do you think that method of hailing a taxi cab could be called?

Posted by Tom Foremski at 02:52 PM | Comments (3)

September 25, 2004

Tech Watch: Silicon Valley's greatest success is failure...

....and copious amounts of failure.
What can be learned from failure in improving the process of commercializing innovation?

This was one of the questions posed to panel members at an SRI International event I was moderating, by Elizabeth Safran, from Trainer Communications. The event was organised by Alison Murdock, president of the IDB Network.

Elizabeth’s question about the role of failure deserves more attention, because I'm convinced that it goes to the root of Silicon Valley’s success. And it points to a fundamental quality that Silicon Valley possesses, and one that is rarely mentioned:
Silicon Valley is extremely good at failure.

In fact, it is extremely good at producing massive amounts of failure.

Curt Carlson, director of SRI, one of the largest research organisations in the US, pointed out that as few as one in 20 Silicon Valley startups succeed. And even then, they are unlikely to make it to their 13th birthday—the average lifespan of an S&P 500 corporation is 12.5 years.

With the pace of change accelerating in many industries and markets, Mr Carlson argues that we have to accelerate the process of successful innovation in order to keep up. But how?

SRI believes it has figured out part of the answer...

From years of studying successful innovation, SRI has developed a week long training course for its researchers and clients. And it seems to be working, judging by the increase in successful research projects coming out of SRI over the past two years. The course is so effective in raising productivity that Mr. Carlson has asked that every employee of SRI, not just researchers, take the course.
I wrote a column on this subject recently for the Financial Times.

The SRI training is no guarantee of success in commercializing innovation. But it will help to kill an unviable project.
Or as Dave Blakely from the research organization IDEO, puts it, “We have to get better at failing early and make our mistakes earlier.”

Another question asked was if there was a way to document what goes wrong in early venture companies and create some sort of central database of what not to do.

Lee Burrows, vice president at VC firm VantagePoint Venture Partners said, “We perform our own post-mortems but it is impossible to collect all the information and document it, because people would not publicly reveal a lot of key mistakes that were made. Or name names.”

Nand Mulchandani, CEO of Determina, said, “What does happen is that new ventures are formed that have teams of people that have worked together in the past. That way, you can try to aggregate the experience of failure in the hope that people have learned from past mistakes.”

It reminded me of a recent conversation with Mike Sheridan, a partner at Mohr Davidow Ventures, “You get back into the trenches with the people that were in the foxhole with you the last time.”

The panel couldn’t provide easy answers to how best commercialize innovation. All of them said recruitment of good people is key. And finding people who can work as a team is essential. Easier said than done.

Other interesting points from the panel:
Norman Winarsky, vice president at SRI International.
--Make sure you are talking with potential customers as much as possible, as often as possible. There are too many examples of ventures emerging after 18 months and finding that their target market has moved on and has no use for their product.
--Don’t invent a technology and then go looking for a market.
--We have seen a lot more success when researchers are involved with customers as early as possible in the development process.

David Blakey, IDEO.
--I’ve seen so many companies not bother using simple prototyping tools to create a mock-up of their product, or not use graphics tools to see what the user interface might be like. These simple procedures would have shown up problems early in the development process.
--You cannot innovate by sitting in a conference room. You have to get out of the room and onto the road.
--The most successful companies we’ve found have a strong, heartfelt connection with the customer.

Nand Mulchandani, CEO, Determina.
--It’s all about team building. Cultural integration is a big part of my job, integrating new people into the team.
--When you start up a company, you round up the usual suspects, people you know because trust is very important. Then as you grow, you create extended networks of trusted people.

Laurie Yoler, chief development officer, Intellectual Ventures:
--I don’t think it is possible to have a cookie-cutter approach to innovation. Although there is a cookie cutter approach in terms of getting funding, in terms of presenting that information.
--Researchers can have a difficult time transitioning into a startup venture because they were interested in solving a problem rather than being involved in marketing and business development.

Lee Burrows, VantagePoint Venture Partners:--You need people with different sets of skills at different points in the life of a venture. We’ve often seen that a startup CEO might not be the best person to lead the company after a couple of years. There has to be a willingness to step aside and learn, so that in a future venture, that person has those skills.
--Revenues are the only measure of success that we look at.

Interesting comments from conversations after the panel:

Clay Bullwinkel, of Bullwinkel Consulting--Poland is becoming an interesting place for outsourcing these days. Costs of outsourcing work to India are rising as wages are increasing, and there is a lot of staff turnover. Poland is being increasingly being recognized as a viable alternative.

Gregory Ruff, G.L. Ruff & Company:-Silicon Valley is too incestuous, we spend way too much time listening to ourselves and sucking up our own exhaust. There is a lot of innovation happening in other parts of the world.

Juan-Antonio Carballo, IBM Venture Group:
--We are keeping a very close eye on Silicon Valley because we need to know who to work with, who to partner with. We are in the solutions business, so we need to know what is out there that we can use.

Posted by Tom Foremski at 11:06 PM | Comments (0)

September 24, 2004

Bits and Bites: A Friday collection...

Ellisa Feinstein sent this in--very funny. A word of warning to my fellow journalists, please do not try this at home...or at the office.

Ellisa writes: "PR people are always given advice on how to work with the media. Here's a link for journalists on "How to Handle PR People." Enjoy ;)".....
http://www.honk.co.uk/fleetstreet/prfaq.htm

And there is more...William Hambricht, Steve Jobs, and is a Silicon Valley Starbucks a good place to place to recruit a startup team?

Is there a CFO in the house?

"The great thing about Silicon Valley is that I can pull together a startup team so quickly. This place has all the talent you need, and it is often right under your nose," said Nand Mulchandani, CEO of Determina, when I met him the other day at an SRI International event.

I started wondering...would it be possible to stride into a Silicon Valley Starbucks and recruit an entire management team? I bet you could get at least two thirds of the team, maybe the rest at the laundromat.

Anybody want to try it? Let me know....it could be a fun.

William Hambricht, the man behind the Google IPO auction, was on Charlie Rose a few weeks back. I Tivo'd it but didn't watch it until recently.

He made a killer point and it went something like this:
"You've always known that half your advertising dollars are wasted, but, you never knew which half. Google figured it out, with its pay for performance advertising."

This is exactly why I believe print advertising will decline further. It's taken several years, but ad agencies now know how to track online ad performance, and more importantly, they can produce solid ROI numbere, plus they get lots of ancillary customer data to explore.

Print advertising can't offer that kind of value; you can only estimate an ROI, and there is usually little in customer data produced.

There are many dead men walking out there, still waiting for print advertising to come back...

Stonestown mall gets an Apple Store.
You have to hand it to Apple. Its Apple stores are hot. About one in seven of Apple's revenue dollars come through its stores--and they are very profitable.

The Apple Store in downtown San Francisco is a superb example of how to control and create a high quality consumer brand experience. If HP and Dell and others want a lesson in brand support and brand experience, they should walk into that store. As Roger McNamee, our local whizz kid uberinvestor gushed earlier this year, "I've never walked into a store where I wanted to buy everything in it."

I think I had that experiecnce when I was a kid...and I know my 10 year old daughter has tried to convince me to buy entire store contents. But why stop at the store, Roger could easily buy the mall..

With the SF Apple store, there is a shocking juxtaposition to contend with. Just across the street from the minimalist design of the Apple Store building is, gasp, The Virgin Megastore! Five floors of CD's, DVD's and books.

Megastore...how touchingly 1980s...mom and dad are browsing for CDs while the kids are at the Apple Store, checking out a DJ workshop on mixing audio tracks.

Here we have two companies with rock star CEOs, two lifestyle-focused companies. Which one is tired? Has Sir Richard spent too much time in his ballon, in the rarefied atmosphere of our blue planet?

SVW Scoop: Did you know that Steve Jobs designed the upstairs theater in the Apple store? He personally selected the chairs himself (by the way, a very stylish choice Steve, nice one.)

Steve Jobs is rumored to be up for the top job at Disney, and I know that Steve would run that business with great gusto. I can see him now, overseeing the installation of the sprinklers outside ABC’s headquarters. I'm not saying Steve has a reputation as a micro-manager, he's just very detailed oriented.

And there's nothing wrong with that. You certainly won’t hear Apple Computer or Pixar investors complaining. Over the past few years they have done very well thank you, under Jobs.

Posted by Tom Foremski at 02:00 AM | Comments (0)

September 22, 2004

PR Watch: No downturn down here as PR companies scramble for bodies

From a Wall Street vantage point the tech sector doesn't look that good right now. Earnings season is coming up and there are unlikely to be many positive surprises from Silicon Valley's public companies.

However, things are cooking in the private company sector, and Silicon Valley's PR companies are scrambling to fill new positions.
One large PR agency, which I'd rather not name...

...has 13 job openings. And many smaller PR companies are also looking for people. This is a good indicator of the strength of the local economy, since startups need representation. And increasingly, many startups are looking for PR companies to present their story to the business press, rather than just the trade press, says Marianne O Conner, president of Sterling Communications, one of the top tier local PR agencies. "Many companies have found that greater visibility in the business press can help them in many ways, such as making it easier to raise funding, and in recruitment," she says.

One problem, however, is that the mainstream business press mostly focuses on publicly traded companies. That is why stories about private companies are difficult to "sell" to the business press. And it is not just because they are small, either. SAS is a $1.3bn revenue software company, the largest private software company in the US. Yet coverage of SAS in the mainstream business press is rare. (There has been more press coverage on SAS in recent months, but that was in connection with the Google IPO, and comparisons with SAS' strong employee focus with that of Google.)

Silicon Valley PR agencies are hiring, but the work is tough, and some agencies are developing a reputation for burning people out very quickly.

This is partly because clients are demanding more and wanting to pay less. Clients have gotten used to being in the driver’s seat over the past few years, when PR agencies were desperate for business. But now? I think there may be a rude awakening coming up for clients…and also one for those agencies that haven't taken care of their people during the past three very tough years. We are all vulnerable to better offers.

Posted by Tom Foremski at 09:48 PM | Comments (0)

September 20, 2004

Media Watch: Mike Magee--successful “stand alone journalist”

Mike Magee was in town recently, and it was good to catch up with this veteran British journalist. Mike runs the tech news site The Inquirer, and is also a co-founder and former editor of the pithy The Register, a very similar news site in look and feel.

But while The Register has a large staff, The Inquirer is put together by one person, Mike...

There is a gaggle of freelancers that he uses now and again when his budget allows, but most of the news stories are written by Mike, and he also does all the other jobs that publishing an online news site requires.

And The Inquirer is doing very well. But is Mike a blogger? He fits many of the criteria that are often used to describe a blogger. Chris Nolan, another veteran journalist (ChrisNolan.com), has been trying to establish the term “stand alone journalism” as a more accurate description of blogging. I like the term, and I would bet that Mike Magee is very likely one of the most successful “stand-alone journalists” in the world.

If The Inquirer were to be acquired, that would be a strong validation of the “stand alone journalist” concept. And the valuation of The Inquirer, in such a deal, would be very interesting. It would certainly help determine a market value for other “stand alone journalism” (and blogging) web sites.

Posted by Tom Foremski at 02:01 AM | Comments (10)

Tech Watch: Amazon’s A9 sets a value on private consumer data

The recent launch of Amazons’s search service A9 is interesting in that it has tried to establish a value on consumer data privacy--and it’s not much.

In return for allowing A9 to collect data on users of the service, and target them with commercial products and services, Amazon is offering a 1.57 per cent discount to A9 users...

...Yes, 1.57 per cent discount is better than a jab in the eye, but, is that all? Surely that personal data is worth much more than that?

It reminded me of some of the conversations I’ve had on the topic of consumer data privacy with senior executives in the tech industry. Yes, ensuring consumer data privacy is extremely important, the tech executives would say (because we don’t want the government setting new laws.) They would also note that while consumers will say they are very concerned about maintaining the privacy of personal data, they will sell that privacy very cheaply. This can be seen in things like supermarket loyalty cards, filling out “win a free vacation” cards in coffee shops, etc.

Clearly, the value of private consumer data is known, there are huge numbers of companies that collect, sell and monetize that information. But, it is not a public figure. If it were made public, I bet consumers would think twice about giving out their private data too cheaply.

I've long maintained that there is a good business opportunity in establishing a venture that would allow consumers to be gatekeepers of their own private data. A system that allows the consumer to be the gatekeeper to their private data, maintain the quality of that data, and allow access to all or part of that data to different entities. And for substantially more than a measly 1.57 per cent discount.

Posted by Tom Foremski at 01:29 AM | Comments (0)

September 19, 2004

Tech Watch: The secret barometer of Intel's health reveals...

...a slight downgrade.

I popped into the Intel Developer Forum (IDF) the other week at the Moscone center. The twice-yearly IDF is a good place to catch up with my Intel contacts and also rub shoulders with analysts and other hacks (Brit. slang for journalists in case you were wondering!).

IDF is also a good place to taste the mood of the PC industry and the mood within Intel. And on both counts, the mood was rather muted. That wasn't surprising given Intel's recent trimming of its 3rd quarter revenue forecast, and large changes in its microprocessor roadmap--not to mention Craig Barrett’s reaming of his staff in a very public memo (BTW not a good idea Craig, it is always best to keep domestic quarrels private.)

But, I did get a chance to check on my favorite barometer of Intel's health...

...Over the years of attending IDF, I've noticed a reasonably close correlation between Intel's business performance and the quality of the backpacks that conference visitors receive. In lean times, the backpacks are flimsy and made from lower grade materials. About a year ago, the quality of the backpacks at IDF jumped dramatically. And for good reason, revenues were strong and growing faster than expectations. Intel was raising revenue forecasts, not cutting them.

The Spring 2004 IDF again produced a top quality backpack, black and electric blue, with good quality ballistic nylon, and stylish use of yellow trim. It was clear that Intel was expecting a good year.

At the Fall 2004 IDF, the conference backpack looked to be of comparable quality. Closer examination, however, showed that there was some downgrade in quality, but that it was minor. Conclusion? Slight downgrade to Intel's fortunes, but still betting on a solid business outlook for the next six months.

Joe Fay, US editor of Computerwire, agreed with my careful analysis but pointed out that the contents of the backpack indicated a rebounding small technology company sector. Indeed, the backpack contained a larger number of chotkis than before. In fact, mine to contain a double amount of pens, tiny measuring tapes, and other promotional items from companies exhibiting at the conference. Conclusion? Smaller PC tech companies are raking it in--a very bullish sign.

Even without the help of my backpack barometer, it's clear that Intel remains in a very strong competitive position. The trimming of revenue forecasts for the current quarter is modest. As for the changes in its microprocessor roadmap, I would expect Intel to make changes as the market changes.

There is no way that it can predict two years ahead, what the likely best combination of microprocessor technologies are likely to be. That's why it runs many microprocessor design teams. And it staggers those projects so that it can drop a design project, or accelerate a more promising design, as market demand changes.

This is cheap insurance for a $32.7bn revenue company. Until there is a clear hit on Intel's revenues, criticizing it for making necessary changes in its business strategy, as many recent articles have done, is a useless exercise.

UPDATE-Thursday September 23
Joe Fay is now reporting that there is a strange smell eminating from his IDF backpack. He has confirmed it with colleagues. I will check mine, but if true, I may have to revisit my slight downgrade of Intel.