How to Predict a Company's Future

From Science Daily:

"The answer lies in the words of the CEO," said Rajesh Chandy, professor of marketing at the university's Carlson School of Management. "By simply counting the number of future oriented sentences in annual reports we can predict future innovation by the firm."

In the paper "Managing the Future: CEO Attention and Innovation Outcomes," forthcoming in the Journal of Marketing, Chandy and co-authors Manjit Yadav of Texas A&M University and Jaideep Prabhu of Imperial College, London University, show that CEOs who focus their attention on future events, as well as external activities, lead their firms to earlier adoption and invention of new technologies and greater and faster development of innovations. In contrast, more attention to internal operations leads to slower detection, adoption and implementation of new technologies.

Chandy and his co-authors studied empirical data collected from the online banking industry over eight years to determine innovation outcomes such as speed of detection, speed of development and the breadth of deployment of technology.

Unfortunately, the paper has yet to be released so I can't pick it apart. My question is whether the online banking industry is a good proxy for all industries. It does seem that it's a good choice when looking at entrenched industries. Startups, of course, are focused completely on innovation, so the study is not very relevant in regards to them.

If you predicted the future of a startup based on what the CEO says publicly, then every company in the Valley would be the next Google. Except mine, we're the next Oracle. Because I'm short and greedy and to quote Mark Zuckerberg, "I'm the CEO, be-yotch!"

How to Stop Wasting Time on the Internet.

This is going to be a quick post - I don't want to suck away anymore of your time than necessary. After all, if you're reading this you probably have a hardcore Internet addiction.

How many times have you got up from your computer looked at the clock and realized that 4 hours just went by and you have no idea where it went? What the hell was I looking at?

Well, there's an answer. It's called Meetimer. It's a little app that runs on your computer that tracks how much time you spend on each website you visit.

And yes, you can exclude sites from being tracked, you know like your favorite porn sites. Because if you really knew how much time you spend looking at porn, you'd be sliding a razor across your wrists right now. Or should I say your palms.

Anyway, Meetimer allows you to plop sites into whatever category you want. My categories are communication, research, and procrastination. Oh, and blogging.

So last week, I spent around 60 hours on the Internet. Here's how it was broken down:
35 hours on mail.yahoo.com - Email
8 hours on google.com/reader - Reading blogs.
2 hours on facebook - communicating with friends/researching facebook apps
15 hours on random crap - shopping, porn, wikipedia

Frankly, I'm appalled that I spent that much time on the internet, even if half of it was sending email. And by the way, I actually cut down on my emailing since last month.

Honestly, just seeing that I spent more than a forty hour workweek online is enough to jolt me to cut down on my internet usage. But Meetimer also lets me identify my problem areas. Now I know exactly how much time I was spending playing Desktop Tower Defense. Answer: way too much. *shiver*I'm going cold turkey in case you wondered.

Why Meetimer vs some other solution?

It's free. It's private - only I can can see the data it collects.

Unhappy Being a Self-Employed Entrepreneur? Get Some Employees

According to a new study from Finland, entrepreneurs with employees rate themselves happier than any other self-employed person. However, despite being the happiest of the self-employed people, an entrepreneur's happiness is only equal to the happiness of a salaried worker.

At this point, I'll remind you that this study is from Finland. You know, one of those Scandinavian countries that offer six week vacations, free education, free quality health-care. A place where being a wage slave is probably pretty nice.

If you did the same study in the U.S., I suspect the salaried worker would rate much lower on the happiness scale than the entrepreneur.

So Does Having Employees Make an Entrepreneur Happier?

Yes, and no. Employees control the speed of the emotional rollercoaster that is a startup.

Employees will surprise you with amazing insights and contributions, and then the next week miss two crucial deadlines. You just to have to roll with it. Unfortunately, unlike the typical entrepreneur, employees have lives outside of work that can sap their productivity. Illness, relationship problems, etc. And the entrepreneur can't control that.

I really hate having to deal with the fact that no matter what happens, no one will be as driven as me to see our company succeed. It's a tough thing to handle. Running a Fortune 500 company must be hell. Just knowing that 20% or more of your workers are just there to collect a paycheck and play solitaire would infuriate me.

But boy, when things are firing on all cylinders, employees are the greatest thing in the world. A united front against the world. Being surrounded by people who share your vision, your goal, your stock option plan, is a wonderful thing.

So do employees make you happier? Well, creating a company is like sex, it's more fun to do it with others, then by yourself in your bedroom. So yes, but some employees like to leave marks.

A Final Note

Farmers were the most unhappy self-employed people. It makes sense, they have to rely on God for their productivity, I just have to rely on freelance developers.

Networking at SFBeta/OnMyList: A Case Study in User Unpredictability

On Tuesday, I finally went to my first official networking event, SFBeta. A batch of freshly baked companies demo their wares to a horde of spring roll chomping tech geeks. Powerset, the buzzable company du jour was showing their stuff so it may have been more crowded than usual. Who knows.

All I know is that I had no idea why I was going. I'm not trying to raise money. I generally find organized networking to be stifling. And it's always a sausage fest. Always. But I went all the same.

So as I sat there sipping my water on a bar stool, surveying the crowd of short guys with bad haircuts and blazers and little yellow founder badges(which sadly, describes me perfectly), I searched for a purpose. Then I hit upon it, I'd pretend to be Mike Moritz and try and find a single company worthy of investment. Which for me means a company with an idea that actually going to affect millions of people for the better and fundamentally change how they interact with the world. Oh, and make over a billion in revenue by year 5.

Case Study - OnMyList: Users Do Whatever the Hell They Want

OnMyList is not one of those companies. However, they do offer a useful case study. The lesson: how you think the user is going to use the product is not going to be how the product is used. It's a fundamental lesson that every startup has to learn.

OnMyList started as a simple way to create lists online and share them with others. The intention was that if you wanted to create, say, a grocery list, and share it with you roommates online, you could. (i.e. very practical stuff)

Of course, the users had other ideas. People have been using OnMyList to create random pop culture inspired musing, such as, "10 reasons why Paris Hilton is a skank", or "the hottest personal sex blogs", or "Things Men have Yelled to Me While Walking in Oakland".

So there it is in a nutshell, a product transforms from utility to self-expression completely independent of the company. And as it usually the case, the change will probably result in the company succeeding. After all, there's at least six other companies doing online to-do list, but OnMyList appears to be the only Flickr for lists...well...so far.

I hope for their success. The founders were supernice, and even offered me a t-shirt, and not one of those Hanes hairshirt. American Apparel, baby. The quality stuff.

So as you may have guessed, I did not find a company that set my checkbook ablaze. I was pretty underwhelmed. But as Teck Chia, serial entrepreneur and overall great guy, told me and OnMyList proved, you never know what's going to succeed, so you might as well take a bunch of small risks. After all, today's shared list app might be tomorrow's enterprise CMS.

How to Be More Likeable - President Lyndon Johnson's Get-Along Guide

In my never-ending quest to become perfect, I stumbled across the rules that former President Lyndon Johnson used to become more likeable. The rules served him well, he's often considered the most effective Senate leader ever, and the most popular. Enjoy.

1. Be An Old-Shoe Person. Johnson believed that you should try to be as familiar to a person as a pair of their old shoes. Focus on making other people feel comfortable being around you, and they'll find your company relaxing and enjoyable. The rules that follow are all techniques that will help you achieve old-shoeness.

2. Get Rid Of Your Scratchy Features. Face it, we all have annoying habits. For me, it's my constant need to be funny. For the rest of you people, it's your complete lack of a sense of humor. See you probably didn't get that joke. First, you have to figure out your negative traits. Ask a close friend, they'll have a whole bunch to share. Then you have to stop your yourself whenever you notice yourself doing it. Some examples: dominating conversation, argumentative, judgmental, prone to interrupting, arrogance, quick to anger, self-righteous.

3. Remember People’s Names. Remembering someone's name indicates to them that you actually care about who they are. Think about how many times you been at a party talking to someone you know could care less about you. Personally, it fills me with disgust. The trick is to repeat their name back to them to make sure you get it right, and then use it a couple of times in the conversation to cement the memory. If the name is unfamiliar, i.e. foreign or one of those weird hippie names, ask them to write it down. Tell them why. There's no shame in being a bad speller.

4. Cultivate The Quality Of Being Interesting. Being truly interesting. It means shutting up and letting the other person talk. The less you talk, the more interesting the other person will find you. It doesn't make sense, but it's true. People like to talk about themselves more then any other topic. Ask a couple of open-ended questions, sit back and listen. Possible questions: why did you decide to move here? How did you know that you wanted to do that for living? What's brings you to the party?

5. Practice Liking People Until You Genuinely Do. I'll be honest, I hate people. In general, I think as a species humans are ignorant and petty. And yet, I can't think of anybody I've met that I don't like. I can find something I like in just about anybody. And so can you. But you may have to look pretty hard. It helps to understand that when someone has some unattractive traits that those traits are usually due to stress, unhappiness, or poor breeding. Knowing that makes it easier to forgive them. It really does.

6. Never Miss A Chance To Praise. Be honest. Don't blow smoke. Insincere praise is worthless and transparent. However, if you're on the lookout, you'll find all kinds of legitimate reasons to praise people. By showing appreciation for the people around you, you can avoid the trap of taking them for granted.

7. Give Spiritual Strength To People And They’ll Give Genuine Affection Back. Be supportive. For most people, life is hard. We all have dreams, aspirations, hope. Don't be the person who is always finding reasons why other will fail, even if you believe that true. Change your mind. After all, who says you know everything. Instead, find ways to help, even if only through words of encouragement. Who knows, your kind words may be the nourishment that leads someone to the next great innovation or the love of their love or a fulfilling career.

Don't Read This Blog!

I mean it. Just unsubscribe.

You'll be happier, more productive, and have more free time.

I've realized that like most Americans, I have become obese...with information. My head is full of facts that I thought might be relevant some day. Except that day never comes. And if it did come, I would have forgotten what I was supposed to remember anyway.

I was following over 300 blogs. I was a feed fattie. I spent around 3 hours a day reading blog feeds in my trusty Google Reader. 3 hours! That's moronic. A huge waste of a human life. Sorry Scobleizer, but it's true.

But like any addict, I thought I needed that information. When I first moved out to San Francisco, I was desperate to gain as much knowledge as possible about the tech industry. At meetings, I wanted to have a deeper grasp of the industry then anyone in the room. And to be honest that kind of knowledge does impress people which makes it harder to let go of.

Ultimately though, impressing people with my knowledge is not worth 21 hours a week of my time. Now, I'll have to rely on jokes about relationships, airplane food and the wacky differences between how white and black people drive.

I'm still subscribed to 77 blog feeds. Mostly friends and competitors. And Techcrunch. And Marc Andreessen, because he's still new to the blogging thing and hasn't run out of interesting things to say, yet.

My biggest regret was dropping Lifehacker, I think Gina Trapani is a fantastic blogger. But honestly, is there anything more unproductive than reading a daily blog about improving your productivity?

I thank three people for this revelation:
Tim Ferris - author of the 4 Hour Work Week. Applying Pareto's 80/20 rule to your life is wise indeed.
Aaron Schwartz - who despite cofounding Reddit, a news aggregator site, believes that reading the news is a waste of time.
Nassim Nicholas Taleb - author of the Black Swan (best book I've read this year) who has been trading stock options and I'm certain other exotic instruments successfully without glancing at a newspaper in 20+ years.

IF YOU GOING TO STILL READ BLOGS

Here's my advice if you can't kick the addiction:

1. Use another blog as a filter. For tech related crap, Scobleizer catches anything of interest anyway - let him do the world. If you're into virtual worlds, MMOs, and games in general, just read Raph Koster, he posts everything of interest. Believe me, I followed the virtual world space extremely closely for the last six months and Raph never missed anything important and fairly promptly as well.

2. Choose only one tech industry source. They all cover the same stuff and usually the same way. Pick one. I chose Techcrunch. Eventually, I'll be brave enough to drop it.

3. Read friend's blogs. They don't post frequently enough for it to be a timesink.

4. Only check you feed reader once a day, or even better once a week. I'll give Tim Ferris credit for that advice. He calls it batching. The idea is that you'll waste less time doing a task in one solid block of time, then constantly changing tasks. Believe em, there isn't anything happening in the blogosphere that so urgent that you can't miss a day, or a week, or a month.

5. If you use Google Reader, use Google Trends to see what you're REALLY reading and drop the feeds you only partially read.

Well dear reader, it was nice knowing you. I'll still be here writing. For your sake, I hope you stop reading.

Tenuki: Changing Direction

For all of you tracking the progress of Tenuki, you'll notice that I've been mute on the subject. I've always been cagey about what exactly we're doing, mainly out of typical startup paranoia.

Well, I hate doing things out of fear. I think it's stupid and short-sighted, and results in bad decisions. So I'm vowing to be more forthright about what we're doing.

What We Were Doing

First of all, we abandoned our original plan to build a MMO centered around casual gaming. We still think it's a great opportunity, and we wish the other companies in the space all the best, especially Three Rings who we like and respect immensely.

Why? We couldn't do it without raising lots of money. We were looking at eight million dollars in funding before we saw the first dollar of revenue. In the current funding environment, that's a ridiculous sum. Everybody else is out raising $250,000 to $500,00 in their first round. We were shooting for 1 million-1.5 million to get to private beta. And since neither John nor I ever was a Senior VP at an online games company, it was going to be a long, hard road to raise that money.

So instead of playing salmon and fighting upstream, we took the advice of the many others who've been down this road before and we scaled back our ambitions. And as a result, we've unearthed many other tasty opportunities. Our current focus is the first of those opportunities, one we know we can launch for zero dollars and within a month or so. Fortunately, much of the technology we had been building was already suited to this purpose.

What We Are Doing

We're building a cross-site multi-player flash game platform. We're enabling players on any gaming site to play against players on any other gaming site. Why? Because it's annoying to find a multi-player game on some site that only has three active players. It's why I stopped playing multi-player flash games on miniclip. You could never find anyone with whom to play.

We're solving that problem. And we'll see where that goes.

One thing I've learned about startups is that the only thing you get from making plans is plans. Make the product, then figure it out. If that one doesn't work, build another one. Repeat as necessary. If that sounds like good advice, I'm sure I stole it from Paul Graham or Marc Andreessen.

The philosophy behind Tenuki has always been make it easy for people to play games together online. It's the reason John and I started down the startup path, and we're elated to still be on it. It's a great path to be on, and if you haven't got on it yet, you should. You won't regret it.

Customizable Simpsons Avatar

Feeling super-lazy today. Here's me if I was a Simpsons' character. Add an imaginary yawn bubble for accuracy.

A Boy and His Avatar

From the New York Times:


NAME Jason Rowe BORN 1974 OCCUPATION None LOCATION Crosby, Tex. AVATAR NAME Rurouni Kenshin AVATAR CREATED 2003 GAME PLAYED Star Wars Galaxies HOURS PER WEEK IN-GAME 80 CHARACTER TYPE Human marksman, rifleman SPECIAL ABILITIES Ranged weapon specialization

I'm a pretty cynical bastard, but for whatever reason this picture made me cry.

Best Networking Event Ever!: Labor vs. Capital Dodgeball

Networking events are generally pretty prosaic, unless someone spikes the orange juice. Even then, the most excitement you can hope for is a term sheet(*yawn*). And even then you not getting a t-shirt, unless you're willing to acquiesce to full-ratchet dilution.

Well, that was all true until last Friday, when Hunter Walk, Noah Kagan, and Dave Hornik launched the 1st annual Labor vs. Capital Dodgeball Tournament. I'll admit I didn't network much, unless pelting a VC with a dodgeball counts...

Video embedded below. If you make it to the five minute mark, you'll see me shouting "hold on to your balls". Not exactly the quote I'll want to be remembered for.

The Early Adopter Problem: To Techcrunch or Not to Techcrunch

Any site that has a social component has to face the early adopter problem. The early users on your site will determine the size, growth, demographics, and culture of your site. As the creator of a site with any social component, you must take this into consideration.

If I was the CEO of a company that had a social component, I'd weigh the consequences of bringing the early adopter/Techcrunch crowd into the fold before the culture of your site has been strongly established. Getting a few thousand early users fast could cost you hundreds of thousands of users later on.

Below are some examples of the effect of early adopters on social networks.

Friendster - Example 1 - Demographics
Take for example, Friendster, yesteryear's favorite social network. Most of Friendster's audience is in the Philippines. Why? Because of one early user (no.91) on Friendster named Carmen. She's a Filipino hypnotherapist living in San Francisco with a lot of Filipino friends.
So what's the problem? Friendster can't monetize Filipino users, but they take up a significant share of Friendster's resources. Obviously, this observation does not speak to Friendster's downfall which has been covered quick well elsewhere, but I find it an extremely compelling example of the unforeseen effect early users have on a social site.

Myspace - Example 2 - Culture
Myspace has always been dominated by casual acquaintances. It was voted the #1 social network to meet a random hookup. People try to accumulate the most friends in hopes to appear more popular, accepting invitations for people they never met. Reminds me of partying in LA. And surprise, surprise, Myspace gathered their earliest users by throwing parties in LA and inviting the partygoers to signup for Myspace. In this example, the entire culture of Myspace was the result of early promotional activities. Myspace did not target the early adopter crowd. In fact, early adopters generally abhorred Myspace for its poor technology and ugly layouts. As a result, Myspace's culture ended up being defined by users that more closely reflected the mass audience then the typical early adopter, and I believe that contributed greatly to its success with the mass audience.

Digg - Example 3 - Size and Growth
Digg's ultimate size is limited by its appeal to a niche audience. Okay, so this one is a prediction rather than an example. Digg's growth is going to peak soon, if it hasn't already. Why? Follow me on this. Digg users are techies (err...I mean heavily educated males/females). There's a limited supply of techies, and by now we've all heard of Digg. Kevin Rose introduced techies into the system early by debuting digg.com on The Screensavers, a TechTV program. However, this was a calculated choice as the management intended to appeal to techies, assuming that they would get better growth out of the box. Techies provided the early content which attracted more geeks. Feedback loop. Now techies dominate Digg and it would be impossible to change that without alienating them. Unfortunately for Digg, most people don't care about DVD encryption, programming languages, or Star Trek.

As a company creating a massive multiplayer online game, we've been thinking a lot about who would provide the ideal early users, the users that will define our culture. It's not an easy choice. The key is to define the audience you want to ultimately reach. In our case, we're reaching for a broad userbase, so attracting early adopters may be counter-productive. It may take us longer to grow initially, but in the long-term we'll be able to growth larger. I think it's a worthwhile compromise, especially if you're building a company for long-term growth and not just a quick flip to a larger company.

Ironically, I'm sure every single reader of this blog is an early adopter. I write a blog about startups, the games industry, and make frequent Techcrunch reference. Typical early adopter fodder. Gulp. I hope you all will forgive me for not handing out beta invites.

Hot or Not Takes on Myspace: Adds Social Networking Features

I haven't seen this announced anywhere yet, so I thought I'd mention it. It appears that Hot or Not is taking on Myspace, by adding social networking features.

They've added a feature called a super profile, which despite its moniker is pretty basic. Here's what it contains: profile picture, friend list, guestbook, and a blog. Standard fare.

I could not find any search capability, but considering that Hot or Not's core feature has always been browsing users one at a time, I imagine moving to a search oriented site might not be in the cards.

The other feature that the Hot or Not super profile offers is a hotlist. No, not a list of the hottest Hot or Not users, *sigh*, but instead a space where you can added branded badges, i.e. a Gucci logo, or in my case, a Starbucks logo. The idea is that people can identify themselves by their brand affiliations. Just like in real life.

The guys over at Hot or Not have clearly been watching the viral growth of Tagged and Peerflix. They've adopted similar strategies. They provide a tool that allows you to connect your other social networks to Hot or Not. I assume this just sends out a mass of invites, because frankly I wasn't ready to take the leap of connecting all my social selves.

I'm still not sure what usefulness a Hot or Not social network is going to offer. Though I'm curious to find out. After all, Hot or Not's core benefit is that it gets people laid. If adding social networking to their core offering helps people get laid then it'll be a huge winner.

Of course, just like a typical social network, it's already being spammed by the webcam babe contigent. I got two messages today, both from girls who wanted me to check out their profile. Of course, their profile contained unsubtle come-ons to visit their private sites.

As Markus Frind, founder of Plentyoffish pointed out, social networks are the new dating sites. Hot or Not may have been feeling the crunch and decided to join the revolution rather than have their cake eaten. In any case, Jim and James are smart guys, it'll be interesting to watch how the new Hot or Not evolves.

Puzzle Pirates v. Club Penguin

Sony is looking to buy Club Penguin for $500 million. Club Penguin is a virtual community for kids where the players can earn currency playing minigames. This is pretty much the best news I could have possibly heard, as our business model is pretty similar. So, yay for me.

I've been tracking Club Penguin since December when we started the company. I found it via miniclip.com, an aggregator of web minigames. It was miniclip's most popular game at the time. It was one of two massive multiplayer games listed on miniclip. the other was Yo Ho Ho! Puzzle Pirates, a pirate-themed (duh) MMO where players earn currency playing puzzle type minigames. Overall, Puzzle Pirates is a much better game than Club Penguin. More attractive graphics, great game design, more features. All around a more engaging experience.

Both games use similar marketing techniques, relying on word-of-mouth and referral traffic from their listings in large game portals, like miniclip.

Yet Puzzle Pirates has less than a 1/20 of Club Penguin's traffic. So why does the better game have less users?



The answer is pretty obvious. Club Penguin loads 100x faster. Puzzle Pirates took ~5 minutes to load on my new-ish laptop via an extremely fast internet connection. Club Penguin loads in eight seconds on a shared connection at a cafe.

Unfortunately, users won't wait for better content. Daniel James, CEO of Three Rings, the company that makes Puzzle Pirates, indicated that 2% of visitors they receive via Miniclip became registered players. I think 2% is correct, Daniel will probably correct me if I'm wrong.
I'd feel pretty comfortable speculating that Club Penguin's conversion rate is probably around 20%.

My advice for anyone doing anything on the web. Optimize for loading time. You'd think we'd all learned that lesson from the days of dial-up, but it bears repeating. Optimize for loading time. When you're making great content, it's easy to believe that the users will wait for the content because it's so tasty. The fact is that fast and ugly wins every time.

I'm willing to bet $100 that Three Rings' new virtual world, Whirled, will load like lightning. Daniel's been bragging about how ugly it is.

Digg Who?

So I'm looking through the program for a play that a friend of mine is in and in the special thanks section, I see listed Kevin Rose and Jay Adelson. Interesting, I think, Digg is sponsoring blackbox theater production in SoMa. So I point this out to my two friends, a girl who does enterprise software sales, and a guy who teaches English. Neither has even heard of Digg, let alone Kevin Rose. Nor were they interested in what Digg offered. BTW, Kevin Rose and Jay Adelson are the founders of Digg.com, a news aggregator where people submit and vote on new stories.

And again, I'm reminded the huge gap between Silicon Valley's perception of itself and its impact on most people's lives. No matter how many cover stories a company like Digg receives, it's still not going to be relevant to the way most people live. I think this applies to most Web 2.0 companies, as well. Facebook excepted.

Some people may ask, how is an online game company relevant to people lives? That's easy: everybody like to have fun. People have been playing games since the dawn of man, they're not about to stop now.

How to Pick a Good Lawyer.

I have no fricking clue. I wish I did. I tried to find out, I really did. I asked around, posted to forums, did a google search. I even visited the websites of some law firms, and that was pretty painful.

Here's the piece of advice that resulted of my inquiries: if you find a lawyer that you like, then hire him. I guess, it's difficult to find a likeable lawyer?

Unfortunately, I had the opposite problem, I've found too many likeable lawyers. And I blame Noah Kagan and Tony Chung. Those jerks put together a networking event called LawYours last night at the Spago in Palo Alto. Check out entrepreneur27.org if you want more details, maybe they'll do it again. For all you blogosphere groupies out there, Michael Arrington gave a brief talk, and you missed it. If you don't know who Michael Arrington is then you're probably not looking for a tech startup lawyer.

So, I spent the night rubbing up against lawyers from the Valley's finest firms, and without fail, they were personable and smart. The freely flowing Chardonnay may have helped with that. Regardless, it's going to be hard to pick one. I'm staring at a stack of business cards right now. *sigh*

Nexon's Kart Rider Finally Comes to America - Domination Expected.

That's right kids, the most popular MMO of all time just hit our cybershores. Kart Rider is in closed beta for now. Sign up and you might get a taste of the game that 120 million people around the world think is pretty rad. Warning: you have to use Internet Explorer to access their site, and you'll have to download a 182MB setup file, and have Direct X 9.0 installed before you can play. The game is going to have to be pretty amazing if Nexon expects the famously impatient American user to jump those hurdles.

I'll let you know what I think, if the file ever finishes downloading.

Five Networking Tips from the "Secrets of Silicon Valley's Master Networkers" - Courtesy of Auren Hoffman

For anyone who doesn't know, Auren Hoffman is Silicon Valley's uber-networker, though he doesn't like to be known as an uber-networker, so giving a talk called "Secrets of Silicon Valley's Master Networkers" may have been counterproductive for him. He's also CEO of Rapleaf, an online reputation system for online buyers and sellers, kind of a Better Business Bureau for individuals.

Auren is seriously connected. Everybody I've met in San Francisco's tech scene knows Auren. I'm sure that I'll eventually know Auren, too, whether I like it or not. Fortunately, he appears to be a very good guy.

I'm not going to cover everything from his talk, just the stuff I found most relevant. If you want more, he's posted the slides from the presentation on his blog. so without further ado...

Auren Hoffman's Networking Secrets

Help People. Auren believes that the best way to make connections with other people is to help them. He's a big believer in karma, the idea that good things that you do will come back to you later on. Of course, a belief in karma is necessary for the CEO of a company whose product requires people to take reputation seriously.

My cynical take: When you help someone, they feel indebted to you. In general, people hate to feel indebted to anyone. As a result, they'll try and pay back that favor as soon as possible.

Find your unique value. You need to know how you can help someone if you're going to be offering your assistance. Simply put, what are you an expert in? Auren offered the example of a woman whose passion for dogs resulting in her becoming the go-to person for people looking to buy new pets. As a result, she found power brokers in the Valley cold-calling her for dog advice. Obviously, everyone out here in the Valley is a technology expert, so the key is to identify your other non-techie skills.

Spend time doing what you like and you'll meet valuable contacts. Out in the Valley/San Francisco, I know this is true. If you live in Peoria, IL, you're probably out of luck. For example, if you're into kite-surfing, you'll probably run into Google founder, Sergey Brin. I agree with Auren, you'll actually connect people on a personal level if you're both passionate about the same thing. Auren claims that he doesn't even attend networking events.

Unfortunately, if you enjoy sitting in your house all day in front of your computer you're unlikely to meet anyone, well...unless you're playing World of Warcraft. Joi Ito wrote an article about how Warcraft is the new golf, i.e. the place for high-powered networking.

Respond to emails within 24 hours. Start doing this today. If Steve Ballmer can do it, so can you. Not only will it help you with your networking, but it'll help you stay productive. I've read that nothing ages you faster than the stress of having an unfinished task hanging over your head. I think this applies to unanswered emails, as well. I always feel exceptionally awkward about replying to messages or phone calls after more than a week has passed, it's akin to the stress of calling a new girl for the first time, a roiling in the stomach.

I was talking to a CEO of another internet company a couple nights ago, and we both agreed that we had missed opportunities from not staying on top of our emails.

Spend time maintaining connections, not just building them. This point is directly connected to the last one. Auren points out, and I believe it's true, that maintaining relationships is much harder that creating new ones. Never rely on the other person to contact you, you have to be the one sending that "I haven't heard from you in month" email. Someone in audience, suggested sending out a New Year's Eve newsletter to all your contacts as a way of keeping in touch. I actually do this, but I find that after a brief flurry of email, all the connections go dark again until the next year.

The truth is that you could easily spend every day emailing or calling contacts and have no time for anything else. My advice is to prioritize your contacts to highlight the ones that are most important in the short-term and contact them more frequently. Sure, this probably means that your best friend from high school is going to get neglected, but they'll forgive you. The head of acquisitions of Google will just write you off.

Summary

Basically, one can sum up Auren's advice like this: be a good, interesting, happy, diligent, and thoughtful person.

Yep, it's going to be hard for me, too.

How Much Money do You need to Create an MMO?

As the resident financial projection guy at Tenuki, I have spent a lot more time than I'd like thinking about this question. Weeks, in fact. And now, just as I have finally refined my development budget to silky smooth perfection, Brian "Psychochild" Green posts a pretty accurate accounting of the numbers for the development phase of an MMO (at least if you have a small, tight team of programmers). If he would have posted this in December he could have saved me from a Christmas Eve sitting at my parent's kitchen table poring over spreadsheets. On the plus side, Santa brought me an HP 12c financial calculator.

BTW, Brian also edited a very good book on the business of game development. Eventually, I'll review it here, but then again I say that about all the books I read.

You Know You're An Early Adopter when...

...you can use your firstname as your username.

While Bret is not the most common name (thank god, my name isn't Mike, Matt, or Om), I've been able to use it at every site I've signed up for in the last two weeks.

I guess another sign that you're an early adopter is when you make an in-joke about TechCrunch, VentureBeat, and GigaOm and expect other people to get it.

Indie MMO Game Developer's Conference on Video

The Indie MMO Game Developer's Conference starts on Thursday (oops, I meant Friday), but alas...in Minnesota. Yeah, I'm not going either. But if you are interested enough to shell out 99 bucks, Last Straw Productions will be making videos of all the conference sessions available online to anyone who registered, even if they didn't actually attend (or should I say, especially if they didn't attend).

Which reminds me, I have two free audio recordings of session I missed at the GDC that I haven't ordered yet, any recommendations?

(via GameBiz Daily)

Kaneva Review w/ virtual world screenshots

Not my review, I never acquired enough Kaneva points, or whatever they call them, to earn my way into the virtual world. However, Ilya Vedrashko, an MIT researcher got a special invite and captured some screenshots along with his first impressions of the virtual world. The interesting thing to me about Kaneva is that (currently) it's only an indoor world. I think limiting the world is a good idea. Part of the problem with Second Life is that is too large, resulting in vast empty spaces that hold no interest for the audience.

However, Kaneva makes a different design choice that I think is problematic. They make you go to a mall to buy things for your apartment. In the review, the researcher goes to buy picture frames for his apartment and has to walk around the mall to find the shop that sells picture frames. I would have given up after about two seconds, but then again I buy everything online. Doesn't it make more sense to give your user the option to buy stuff for his or her apartment while he or she is in the apartment? Why make it hard to buy stuff? That just seems short-sighted.

Kaneva, and maybe every virtual world, makes the mistake of assuming that the key feature of virtual worlds to be exact replication of physical space, and our experience of moving through it. Second Life's original credo was no teleporting, because they wanted users to experience the virtual world as they would the real world. They changed that stance, I'm assuming because users got tired of walking for ten minutes to get to somewhere interesting. In fact, Slurls were developed by third-party developers so that Second Lifers could avoid travel through Second Life altogether(well, maybe that wasn't the intent, but it is the result. A Slurl is a link on a webpage that when clicked takes you directly to a location in Second Life.

I think it's a huge mistake to attempt to make virtual worlds into direct analogues of the real world. Traversing space in the real world is unavoidable. In a virtual world, it is optional. We developers would be wise to remember that.

I have a lot more to say about this subject but I'll reserve it for another post, when it's not 3AM. :)


BTW, Ilya Vedrashko has a very good blog if you're interested in the intersection between games and advertising.

Atari enters the Virtual World fray?

First, Sony announces Playstation Home, basically virtual apartments for Playstation owners that can be decorated with virtual items.

Now, Atari announces that they have something in the works that 10x better than Playstation Home. Details are sparse at the moment, but everybody's favorite buzzwords, "user-generated content" was being bandied about.

Of course, Three Rings already has a world built around user-generated content in closed alpha, called Whirled. I'm still waiting for my invite.

I'm not a news organization, but I'll be following this story.

Fun with Advergames

I've been spending most of my days looking at advergames. I was surprised by the amount of creativity (and production value) I found in a medium that most people dismiss as corporate hackery.

Check out this game. Definitely recommended if you're a fan of the eighties.

Tenuki Update - GDC. Milestone reached! John Rocks!

When I first pitched John (co-founder) on the idea of a blog, he feared that it'd be lame and boring.
Then I explained to him that I'd be blogging the story of Tenuki. But since we're in stealth mode, he felt that I wouldn't be able to talk about all the interesting stuff we're doing, so again boring and lame blog he feared.

Then I wrote a protoblog in Word: twenty entries (most not published) to prove that the blog would be interesting. And he said, it's not boring and lame enough! Mainly because I have a tendency to swear and make sarcastic remarks about our competitors, the government, our close friends, etc.

So I stripped out all the offending comments. Well, most of them anyway and the blog was born.

Looking back over the blog, I've noticed that I haven't been devoting much time to the day-to-day workings of Tenuki. That's bad. After all, that's what this blog is supposed to be about.

So here's what happened in March in the life of Tenuki.

John and I went to the Game Developers' Conference (GDC) in San Francisco. Being a miser about cash flow, I refused to pay the four thousand dollars that it would have cost us both to attend. However, recognizing how valuable the conference could be for us, I started begging for passes. Neil Kirby, one of the speakers at the GDC and all around awesome guy offered me the following advice:

I have got to hand it to you for the "never hurts to ask" attitude. At first I laughed out loud (very glad that I'd finished my morning tea). I do actually wish you the best of luck. I don't have a pass to give away. I did have a pass to give away see http://foundation.igda.org/?p=7 but it has been awarded.

Here are some real ways to get into GDC without taking the financial spear to the chest and simply paying for it:

1) Be a speaker. My personal favorite, it gets you a Giga pass and puts you next to some of the coolest people in the industry. The speaker/VIP party rocks like nothing else. And you can get papers published this way too.

2) Win a scholarship. Good if you are a student. http://www.igda.org/scholarships/

3) Volunteer to be a Conference Associate. The deadline for this is way over but the old URL is http://www.gdconf.com/register/caregistration.htm This is hard work, but the price is hard to beat. I know a number of people who do the CA thing because it fits their nearly-non-existent budget. I once said to my late friend Eric, "always be nice to the CAs, they could be your boss next year." He replied, "Boss? They could be your producer!" This was actually the case for him. To be a CA, you have to be able to work hard and keep a pleasant attitude, even if the people around you are not compelled to have a pleasant attitude. See http://www.joystiq.com/2006/03/25/gdc-conference-organizers-drop-the-ball/ to see how the CA staff can get caught in the middle. If you can't do the "with a good attitude under pressure" part, please, do NOT pollute the ranks of the CA staff. I turn in rude, sexist, un-helpful CAs to the two guys who run the whole CA staff. I also, when I can,!
point out to those same guys when I see a CA exceed my expectations. Good CA staff members get to be CAs year after year. Bad CAs tend to never make the cut again. As a speaker, I know that my session could live or die based on whether a CA can get something done for me [this has happened more than once]. They are "I can help" and "I don't know how, but we can make that happen" kind of people.

John and I ended up volunteering to be Conference Associates, hoping that missing the application deadline wouldn't be a factor. Fortunately, Tim Brengle and Ian MacKenzie, the guys in charge of the CA program let us in just two days before the conference. If you ever plan to be a CA, you'll learn to appreciate Tim and Ian. They're great organizers and really nice people for whom to work.

John and I sat in on as many sessions as we could. Being a neophyte to the games industry, I soaked up every piece of information I could get. John, meanwhile, ran into old friends - John's been in the industry awhile - and pitched them on our company. Thankfully, they were intrigued by Tenuki. They were especially intrigued by what John had accomplished technically in the last couple months. Since I'm not a programmer, I'll admit that sometimes I underappreciate John's skills. Believe me, it's validating to hear other engineers speak with admiration about what John's accomplished. It's like hearing cheerleaders talk about how hot they think your girlfriend is.

I networked some myself. By far, the most interesting guy I met was Bob, a director at Newegg. Met him during lunch, and he gave me enormous insight on the entire mobile space.

Unfortunately, a flu bug was floating around the conference and it took out John, his fiancee, and myself for the good part of the week following the conference.

Nonetheless, we were still able to reach a major milestone, courtesy of John's coding skills. I won't say what at the moment, because I feel like being mysterious/annoying.

What was I doing during that time, you ask? What all startup CEOs do? Gnawing my fingers in terror as I saw competitors rise from every quarter. Trying to suss out their strengths and weaknesses. Figuring out how to position ourselves in the marketplace in response to the new arrivals. Reworking the pitch to incorporate new information. Meeting with smart people to get advice. Emailing lawyers about patents and such. Writing this blog and sucking down tons of feeds with my giant cup of tea. Approaching people who I'd like to learn from who have never met me. Avoiding the five ideas I have each day for other companies that I could start by diligently recording them in a notebook and forgetting about them. Cursing myself every day for not being more productive. And wishing Michael Arrington would notice me. :)

The 8--Bit Tie: Perfect Accessory for the Young Gaming Executive

If Mario had an meeting with investors, this is what he'd be wearing.

Buy it from Thinkgeek.

How to REALLY Negotiate a Term Sheet: Venture Hacks

I love the Internet. Really smart people with direct experience of issues offer free advice to anyone who cares to read their blog. A couple of experienced entrepreneurs recently started a blog called Venture Hacks. The first few posts are about the strategy surrounding board seats. Honestly, I hadn't given board composition any serious thought, so their posts were a wakeup call.

An excerpt:

Whether you negotiate a proportional or investor-leaning board, your term sheet will probably state that the CEO of the company must fill one of the common board seats. This may seem reasonable. One of the founders is probably the CEO and you were going to elect him to the board anyway.

Don’t accept this term. The investors are looking several moves ahead of you.

How to Be Funny: President Bush does Standup

Every year, the president does a monologue at the annual Correspondents' Dinner in Washington, DC. Blogger/consultant John Kinde has a copy of the monologue on his blog and analyzes the jokes. I've done standup in past (not well, I might add) and I found John's analysis to be right on the money.

If you're looking to write your own jokes, check out his blog. After all, nothing wakes up a VC during a pitch presentation quicker than some good insult humor.

(via Ben Casanocha)

From web developer to billionaire in 10 years or less...

How? Sex. Andrew Conru, the founder of AdultFriendFinder started out coding for others and realized that he'd be better off starting his own company. Now, he's a billionaire.

Here's the other pearl of wisdom. He didn't plan to start an adult site. Conru started AdultFriendFinder because he wants people to stop posting naked photos on FriendFinder, the site Conru started to connect people who wanted to do things like fish. Classic. Another case of the customer telling you what that want.

Read and be inspired.

The Internet is Now Everywhere

This is so cool. And smart.

United Villages distributes pre-paid cards to locals in remote villages who can write emails or record phone messages at solar powered computer kiosks installed in schools and community halls. United Villages deploys buses tricked out with short-range Wi-Fi antennas which pass through villages, automatically picking up stored emails and voice messages as they go. Once a bus reaches a city with Internet connectivity, it relays the emails and messages to their appointed destinations via the web.

Full article here.

The Virtual Ipod

Following up on my recent post about the Virtual DVR, I discovered Mediamaster, a free service that allows you to upload a Ipod Nano's worth of music online and access it from anywhere you can get an internet connection. Better yet, they provide an embed code so you can add a music-playing widget to your blog or Myspace page.

The obvious application for this is to create your own online jukebox to share with your friends, however that functionality is not supported yet.

At the moment, I'll opt to carry my Ipod. It's more convenient and I can take it places the internet doesn't go (like the subway). However, once I'm able to get high-quality streaming audio on a handheld device with out playing exorbitant data fees, then an online music vault would make sense to me. I like the idea of centralizing my data and being able to access it multiple ways. And no more Ipod-Itunes syncing.

Storing your media online is just the first step in the evolution to complete virtualization of media. The next step is realizing that for most media, you do not need a personal copy. Every copy of Britney Spears' Toxic is essentially the same, barring bitrate variations and remixes. Why should we store a million copies of the same piece of media when one copy can easily serve a million people?

Again, I'm arguing for the universal media library. The new library of Alexandria. I'm willing to bet 100 dollars that we'll see it in some form within the next decade. Any takers?

(via StartupSquad)

Notes from YCombinator Startup School

John went to YCombinator Startup School on our behalf. I haven't read his notes, yet. But I did find some pretty good notes on Scribd. Read them and enjoy.

Here's a taste - notes on Max Levchin's talk. His usual obsession with metrics are represented.

Max Levchin, “A Crash Course in Product Management”

Founder, PayPal

Product management is about:

• Channeling the user
• Developing a fantastic interface

The best product managers are people who understand computers.

Why do most startups fail?

• Most engineers fail to work out the details!

When you design a product, you need to think about whom you’re designing the product for!

• Try to achieve an out-of-body experience as close you can, while you are using the product.
• Observe the user closely!
• The best product can be used effectively while the user is distracted.

How do you find out what works? Metrics, metrics, metrics

• Measure everything
• Generate statistics
• There is no ready made package that will analyze the data appropriately – develop your own

Practical web design

• Design your sites to use blue; red and green are problematic for the color blind (8% of men)
• Scrolling is OK now that mice have scroll wheels – “keep it above the fold” is less relevant now

The 300: An Allegory of a Start-up?

In college, I had a class on Freudian literary analysis. I learned that if you look hard enough you can always find a phallus somewhere.

Well, now that my mind is awhirl with startups every waking minute, I've take to doing "startup literary analysis". Here is my startup version of The 300.

A senior manager (King Leonidas) leaves his company (Sparta, Inc.) with his best employees and forms a new company(the 300). Microsoft *cough* I mean the Persians, wanting to dominate the marketplace declares war on the company (but only after trying to buy them out first). Leonidas being a smart entrepreneur chooses a small niche (the Hot Gates) from which to make a stand. Wisely, it's a niche whose terrain is very familiar to Leonidas and his men. They arrive in the niche before the Persians and erect a barrier to entry (literally). The Persians throw millions of dollars at the niche, but the 300 are able to withstand the onslaught because they are top-notch entrepreneurs who trust each other to do their job and do it well.

Finally, Bill Gates *ahem* Xerxes meets with Leonidas and offers him 300 millions dollars for his company and the position of Senior Vice President of Greece. He declines. Even at a SVP salary, he'll still be only a wage slave.

Meanwhile, a disgruntled employee, Ephialtes, betrays the 300, revealing to Xerxes a flaw in the Spartan's business strategy that the Spartans hoped no one would realize.

Xerxes uses this information to flank the Spartans in the marketplace.

Leonidas, knowing that his company is doomed, he doesn't have enough resources to fight on two fronts, and the venture capital he was hoping for never appears. He makes a final glorious stand against the giant corporation and is destroyed. His flameout inspires other entrepreneurs and convinces venture capitalists that its a market worth fighting for.

A year later, a fully capitalized startup led by a former employee of Leonidas does battle in the marketplace and carves out a respectable marketshare.

Of course, if this was taking place in Silicon Valley, Leonidas would form another company a year later to fight Google.

Cast of Characters (partial)
Leonidas - CEO
Captain - COO
Xerxes - Bill Gates
Ephialtes - Disgruntled Salesperson
The Spartan Senate - Board of Directors, Sparta Inc.
Ephors - Business Strategy Consultants (McKinsey?)

Virtual DVR, Virtual Everything.

I didn't know there was a virtual DVR. I didn't know a Long Island cable provider, Cablevision, was being sued because they offered a virtual DVR service. I didn't know billionaires like Mark Cuban had time to blog. He does, fortunately, and he's the source for my new-found knowledge

I'm only slightly ashamed that this story is nearly a year old. That was before I began blogging, and at the time I was running an IT shop in an extremely rapidly growing company. Like all IT guys everywhere, I read Slashdot with my morning coffee then got on with the business of the day, firefighting an overtaxed IT infrastructure.

But that's an aside, because I'm really interested in the concept of the virtual DVR. Basically, it's a service that allows you to record any show to a server hosted by a third-party provider and watch it at your leisure. Somebody else stores my favorite TV shows and I can watch those shows from wherever I want. Sweet. Now, in the Cablevision situation, you had to have a Cablevision box, so you had to watch the shows from home, not just anywhere. But imagine if you could just access that show recorded for you from your Ipodlike device via a wireless broadband connection, anywhere, anytime. That's cool.

That's where everything is going: storing massive data collections online and accessing that data on-the-fly via an extremely fast wireless device.

At some point people will realize they don't need to collect copies of their favorite media, but rather access them whenever they want via a streaming service. This is already happening with music thanks to Pandora and last.fm. That's going to be a seismic shift in the media landscape, I'd be interested to see what someone as thoughtful as Mark Cuban thinks about that.

Google is the likely contender to host the world's media, it is, after all, their mission. It's probably why they purchased YouTube. I'm surprised they don't do the same with music. Perhaps, we'll see Pandora or Last.fm acquired soon.

It may be a personal fantasy, but I'm hoping for the day that I can access any book, song, or TV show anytime I want, from anywhere, for free, provided I can put up with ads. Hell, I'd probably opt for the $5 a month subscription.

How to Pitch an MMO?

Even though it's a parody, they have better slides than most people.

http://kotaku.com/gaming/clips/clip-excel-the-mmo-245615.php

(via raphkoster.com)

Game Geek: Wiicade.com, a Trespasser in Nintendo's Walled Garden

Earlier this month I posted about the ability to surf the web on the Nintendo Wii with the Opera Browser. Last week, at the GDC, I overheard a bunch of programmers geeking out about wiicade.com, a site that let's you play web-based flash games with your Wii.

Since the birth of the videogame industry, console manufacturers (Atari, Sega, Nintendo) have extracted enormous licensing fees from game developers in exchange for being allowed to produce games for their console. It's called controlling the channel, and smart companies understand that if you control the channel, then you can demand nearly any sum from others who want to use that channel to reach their audience. It's why Microsoft and Sony don't care if they lose money on every console they sell. They want to own the living room.

Of all the console companies, Nintendo is most strict about licensing. They are obsessed with controlling their console and what content is put on it.

So they must be a bit frothy about wiicade.com, a site that enables developers to create and show off flash games for the Wii. To play the games, you have to install the Opera Web Browser on the Wii, which is relatively easy. Once you have the browser installed you can play any game you like...

...using you wiimote!

I figured I needed to yell so that you would realize how cool that is.

Now, anyone can create a game to be played on the Wii, and they don't need to get Nintendo's permission. That's huge. It's as if the owners of Wrigley Field opened up their baseball stadium for anyone to play on. And I hate baseball, but even I'd like to play on Wrigley Field.

Wiicade is the first crack in the garden wall. Hopefully, the wrecking ball is just around the corner.

The Benefits of Direct Competition

A new competitor for Tenuki emerged last night. From totally off the radar. With a service that is very close to ours. And they're ahead of us. Aargh.

You might say "wow, that sucks for you." Well, yes and no.

Yes, it does suck, mainly because they have a lead on us, and if they executed perfectly, they could tie up a significant portion of the market. But no one executes perfectly.

No, it's kinda great. It does the following things:

• it validates our idea to investors.
• it forces us to focus harder
• it makes marketing cheaper

That last point needs a bit of explanation. The first step of marketing is to educate the consumer that they have a need. When you're launching a novel service, it's usually the case that the consumer doesn't realize that they need that service. For example, did millions of Americans realize they "needed" to send text messages? Of course not. No one was rioting in the streets for the ability to text. However, imagine if you took away that ability now. I'm pretty sure the White House would be torched.

Right now, people don't realize they need what Tenuki and our competitors are offering. Which means we need to spend money to educate them about their need. Sounds cynical, right - educating the consumer that they have a need. Probably why marketing has a bad name.

The early entrants to a market have to spend a larger amount of money on consumer education. In fact, this is usually the most expensive phase of marketing plan. These kind souls pave the way for later entrants who can spend all their money advertising the qualities that make them superior to their competitors, knowing that the consumer is already aware of the type of service that they provide.

So to our competitors: thanks for taking one for the team.

And on the PR front, journalists much rather write about two competitors slugging it out in an interesting new space, then about a company dominating its space. By the way, if you ever want some ink, just create a bitter rivalry - it worked great for Tupac and Biggie...oh right...hmm...er, well, um, it worked great for P. Diddy and Suge Knight (the guys who owned the record labels).

I could talk about marketing strategy all day, but unfortunately the homeless guy sitting behind me at Starbucks has decided that somebody has screwed him over and that someone needs to pay. Time for Bret to go.

Get a Free Pass to the Web 2.0 Expo in San Francisco April 15-18 2007

Yes, a free pass. Sure, it's only an Expo pass (value $100) but it's gets you in. I'll be there, so if you want to mock my haircut, blogging style, or dark obsession with Paul Graham, then have at it.

Here's more details on the conference lifted directly from Dave McClure:

Ok folks, here's the skinny:

• the Web 2.0 Expo conf is April 15-18 in SF
• it's about learning HOW to do Web 2.0, not WHAT
• i'm one of the conference program chairs organizing the event
• we've designed 7 education tracks & over 100 sessions & workshops for geeks, marketers, designers, entrepreneurs, & everyone doing Web 2.0
• over 1000 people have registered -- signup by Monday & save $200
• discounts available for students, educators, non-profits, & groups of 3+
• i've worked my ass off the past 6 months to lineup great speakers.
• it's going to rock. really.
• if you can't afford bupkus, come to the Web2.Open... it's free.

Need Help Projecting the Costs of Building and Running Your Web App?

Ryan Carson, over at Carsonified, has graciously posted the costs of producing his web app, Dropsend, as well as the financial figures behind four other companies: FreshBooks, Maya's Mom, Mobissimo, and Wesabe. Better yet, monthly maintenance costs are provided and broken down into categories.

Very valuable stuff.

It's a PDF, so it may wreak havoc on your browser.
http://www.carsonified.com/sxsw.pdf

How to Choose a VC?: Fred Wilson and the Pixies, and Human Tendencies

Here’s the sad thing about humans, we like people who appear similar to us even superficially. It’s probably hard-wired from the prehistoric days when we roved around in ten person packs and killed anyone who was a stranger. Fun times. (If you want more insight into pack mentality, read the early chapters of Jared Diamond’s Guns, Germs, and Steel. )

Thus, I like Fred Wilson. Why? Because he’s as passionate about the Pixies as I am. I’ve never met the guy and yet I’d be happy to do business with him, because he has excellent taste in music.

Which is stupid of me. I mean, when you’re evaluating a potential business partner, someone who could easily mean the difference between the success and failure of your company, music taste shouldn’t enter into the equation.

Now, obviously Fred has been very successful. By all measures, he appears to be a good guy with whom to do business. But the reason I’d choose him over another VC isn’t his track record, it’s because he grooves on “Brick is Red”.

I think this is human nature and while I’m not proud to make business decisions based on musical compatibility (now there’s an interesting use for iLike), it absolutely influences my relationships with people...just like it did in high school.

Maybe if all VCs and entrepreneurs exchanged a list of their top ten favorite artists as part of the due diligence process, we’d all end up with better business partners.

So here’s mine, as of today, in no particular order:

1. Pixies
2. Weezer
3. The Smiths
4. Joy Division/New Order (yes, I’m cheating)
5. The Magnetic Fields
6. Barcelona
7. The Clash
8. Belle and Sebastian
   
9. My Life with Thrill Kill Kult
10. Curtis Mayfield

I doubt I'll have a hard time convincing Fred to post his favorites.

UPDATE: I was right, it wasn't hard. Fred responded within a minute of me posting this. Check the comments to see his top ten list. And after looking over Fred's list, I realized I forgot Belle and Sebastian. I updated my list appropriately.

Lost Post: Who In Their Right Minds Would Start a Startup?

This is the first of a series of lost posts that I wrote but neglected to publish. Enjoy.

Q: Who in their right minds would start a startup?
A: Greedy Bastards.

Which is why so many startups fail. A lot of people start companies because they have a cool idea. Or a marketable idea. Or rich parents.

I can’t judge them too harshly. John and I started a company because we have a cool and marketable idea. Unfortunately, no rich parents. Thus, we beg at the door of Silicon Valley’s surrogate parents, the Sand Hill Sugar Daddies.

Unfortunately, many people who found a startup company during a frothy period (like right now) often lack the most important motivation: passion for their product. I challenge any CEO of a Myspace clone to honestly tell me that he’s passionate about bringing cat owners together with his brilliant new service, PurrfectSpace (made-up name, feel free to take it). C’mon, the guy doesn’t even own a cat. I can’t believe these things are still being launched, or worse, funded. Having said that, Dogster is doing pretty well, and its CEO Howard Rheingold does seem passionate about pets.

How does anyone find the energy to lead a startup from demo to profitability without passion, i.e. if they don’t believe that their product can change how people live?

When John presented the idea for Tenuki to me, the first thing I asked is would I use it? Then, would anyone else I know use it? Then, being a crass capitalist, can we make any money with it?

Answers: 1. Yes, I’d use it. 2. Maybe, better ask my friends. 3. No idea, better research the market space.

Only while I was researching the market space and refining the idea with John did I realize that Tenuki could actually change the way people live. Not in the way that a perpetual energy machine would, or an immortality pill, but in the way they interact with each other. I finally got the Big Idea. And that’s what made me quit my job and move out to San Francisco. I got the passion. The Passion of the John.

Update: A day after I wrote this entry, Fred Wilson wrote a piece on the importance of passion in running a company.

Starbucks Survey: Ever heard of Second Life?

I constantly remind people that despite the massive news coverage of the virtual world of Second Life, the vast majority of people have never heard of it. For instance, the entire Midwest. However, the average Starbucks denizen in San Francisco has not heard of it either. Nor had they heard of There, Habbo Hotel, or Puzzle Pirates. A few had heard of World of Warcraft, from the TV commercials. Everyone had heard of Myspace.

I, of course, look on the bright side. If few people have heard of MMOs and virtual worlds, it means that the space has that much more room to grow. Myspace, on the other hand, may have reached its saturation point.

Admittedly, my sample size was about 15 people. I did not ask the employees. For comparison, I did the same experiment with MacGyver in DC's Union Station. In a 50 person sample, ninety percent knew who MacGyver was.

By the way, this was in a Starbucks in downtown San Francisco, near to Union Square on a Sunday afternoon. Try it yourself. Insert your own particular obsession/company/product. You'll be enlightened.

Learn How to Speed Read Online - spreeder.com

I'm a pretty fast reader. I have no idea what my pages per minute is or any other useful metric, so you'll have to take my word for it.

I found a very cool website, www.spreeder.com, that lets you paste in a huge chunk of text and then spits the text back out at you, rapidly, in small chunks. You can adjust the chunk size and the speed as you improve. Honestly, it's probably the easiest way to learn how to speed read.

However, if you don't like the automated approach, you're welcome to use a couple tricks that I discovered in college.

Trick 1: As you read look for a very specific bit of information. I was writing a paper on the use of light and darkness in Tess of the D'Urbervilles to highlight or heighten a theme in the book. Pretty standard English Major mumbo jumbo. It's a 600 page book, and frankly I didn't have the time to "savor" the prose. So I zipped through the book, searching for references to light and dark. It took me about an hour and a half, with note-taking included. When I was finished, I realized I had absorbed the whole book so well that I could remember the page number of certain bits of dialogue.

Trick 2: Gist skim. Most non-fiction books are full of fluff. There's no reason to read every word, let alone every sentence, or even every paragraph. Look for the topic sentence of each paragraph, it'll be pretty much all you need to know. Fortunately, it's not always the first sentence in a paragraph, so you'll have to skim the entire paragraph to find it, which gives you a chance to take in the ancillary information.

The sad thing, is that even with these techniques, I can't manage to reduce my daily blog intake to less than an hour a day. *sigh*

The CEO Playbook: Smile Through the Mild Discomfort

I spent the week at the GDC, sucking up information, schmoozing, and stalking the competition. As a result, I slept about 4-5 hours a night. Friday morning, I woke up, feeling dead tired and as I trudged down the street in misery, I wished it was all over. And then I thought of Julius Caesar.

A glimmer of something I read his account of the war in Gaul, "The Gallic War". Something about the standing in a muddy battlefield at dawn after a sleepless night. Just an image. I haven't read the book since junior high, so my memory is pretty faulty.

Anyway, in comparison to Caesar's travails, I realized that it was stupid for me to think that I should even conceive of a conference full of smart, interesting people, free food, and relatively comfy chairs should somehow be an ordeal. I'm actually kinda of ashamed of even thinking that way.

The thing is, if you're going to be the leader, you got to suck it up, drink the kool-aid, and put a big smile on your face. And you have to do it every day. Despite however your body may feel.

It should be easy for you. You probably have a nice bed, in a nice apartment. Money to pay for food and coffee. Tons of friends and business acquaintances. Probably even enough leisure time to play Orcs and Elves on your cellphone, or catch an episode of Lost on your Tivo.

Even more: you have an opportunity to pursue your dream. People may have already given you money to do so. That's mind-boggling. Other people give you money to pursue YOUR dream. How can you not see how lucky you are?

I can. I sometimes forget, but I think I'll go out today and pick up a copy of The Gallic War just to remind myself how easy I have it. Hopefully, the coffee at Borders won't be too acidic this afternoon, I don't think I could handle any more suffering.

Game Geek: I Like It Hard and Long, so Kill Me.

Hard, as in difficult. Long, as in...well...long.

Nowadays, a lot of games, especially console games, can be beaten in ten to twelve hours. They're designed that way. The games industry believes that people don't want to play long games. I think that's true...if the game sucks.

MMOs, like World of Warcraft prove that people want to play a game for months. Once a player is engaged in a satisfying gaming experience, they want it to go on forever. Or at least, as long as it's still fun. The fun part is tricky. It's so tricky, Raph Koster wrote a whole book to explain to people what makes games fun.

Last night, I had fun. I spent about six hours playing Wizardry: Proving Grounds of the Mad Overlord. I'd been craving it since I read the article in Gamasutra about the golden age of computer role-playing games that I mentioned in a previous post. I never beat Wizardry when I was a kid, so I figured now with all my extensive gaming experience, and the help of the internet, it should be pretty easy. Um, well..no. It's still really hard.

For those of you who aren't familiar with it, Wizardry is the standard "party of six heroes descend (slowly) through a dungeon of monsters to defeat an evil wizard" game. Except, I'm pretty sure, Wizardry is the game that created the standard.

By the time I went to sleep at 3AM, all my characters were level 8. Only level 8. After six hours of play. For comparison, if you play World of Warcraft for six hours you will probably have reached level 30. I shouldn't say probably. That's a solid number based on research from Xerox Parc. In fact, in WOW, you can reach level 60, the highest level, in twenty hours.

I'll be honest, if it wasn't for the save state function on my emulator, I wouldn't even be that far. In Wizardry, when one of your characters is killed, they are dead. That's it. Roll a new character. I, of course, cheated, just like I did back in the eighties by making copies of the save file so that if one of my characters died I could just restore the game.

But I kinda wish I wouldn't have. Accepting that your character can die forever, is a completely different way of thinking about role-playing. You can't get emotionally attached to your characters. They die. You punch your computer. You create a new character and add them to the party. You become more cautious about encountering powerful monsters. You run away more often. You don't bully through the game, you assess risks, you think strategically. You learn to accept losses.

Modern gamers never have to accept losses, they just hit restore.

Character death is a game dynamic that I'd like to see return to games. Right now, RPGs are focused on process, i.e. building up character's experience, rather then the ultimate goal, defeating the game. That makes perfect sense for neverending MMOs. But in a standalone title, refocusing the player on achieving the goal and having then make the necessary sacrifices, such as the death of your super-awesome archmage, to achieve that goal would be refreshing, and IMHO, truer to life.

Ooh! I just came up with a name for a game of this type: Dungeon Fodder. I claim it, it's mine, so all you greasy handed, grabby game developers better back off, or I'll have to kill your Night Elf.

Uber-Geek Comedy: Economics Humor Video

Unfortunately, this is the kind of stuff I find funny. It's a five minute video of a guy who calls himself the Standup Economist. I laughed out loud twice, which if you know me, is EXTREMELY high praise.

Top Ten MMOs (according to Xfire Stats)

Xfire, a free specialized IM client for hardcore games, is now releasing daily stats on their users' playing habits. Since they have an install base of over 6 million hardcore gamers, it's likely that it's a pretty accurate representative sample of the online hardcore gaming community.

Right now, the top ten MMOs in average hours played (you'll notice that more than half the list are Asian MMOs. It's easy to tell because you've never heard of them.):

1. World of Warcraft (Shocking!)
2. Guild Wars
3. Silk Road Online
4. MapleStory
5. EVE Online
6. Lineage II
7. Flyff
8. Star Wars Galaxies: An Empire Divided
9. Kal Online
10. RF Online

I was surprised not to see Ragnarok Online on the list, but looking over at Daily Hours Played per Person, it's ranked #3. Weird.

As indicated above, half of the games listed are Asian MMOs. Obviously, Xfire must have a large install base in Asia. However, I'm sure the "massive" popularity of online games in Asia contributes as well.

The Suckiness of Stealth Mode

Okay, so I'll admit it's pretty ironic that the founder of a company in stealth-mode blogs everyday about the experience of running the stealth-mode company. It's pretty fun being cryptic about what we do. Example: we're a early-stage non-traditional games company with a focus on socialization. See, it's almost as bad as corporatespeak. From that description, I couldn't even tell you exactly what we're doing.

I'm going the Game Developer's Conference next week, where I'll meet countless interesting people in the games industry who inevitably are going to ask me about Tenuki. And I can't tell them. I'm going to have to fumble through vague explanations. Toss out the phrase "stealth-mode" a couple hundred times. Or flat out lie.

All options that suck. I want to share the Tenuki vision. Seduce database engineers. Get feedback from the braintrust of the industry. Frighten young children.

Honestly, if I meet Will Wright (creator of all things Sim), I'm just going to have to tell him about us. Right after, I beg for a beta copy of Spore.

Further Reading:
Jeremy Liew over at Lightspeed Venture Partners has a good analysis of the pros and cons of being in stealth mode. At the moment, I'm a big believer in the cons.

Games Industry Stock Tracker

I added a games industry stock tracker widget to my blog. I was inspired to do this by the new games industry stock tracker at GigaGamez, which I didn't care for. GigaGamez's stock tracker included a bunch of companies whose core businesses were not games. For example, they include Sony, Microsoft, and Time Warner in their tracker. The games division in each of these companies is minor compared to their larger businesses. If you're looking for trends, it seems to me that a tracker that includes only pureplay games companies will be more useful. so that's what I created. Unfortunately, I had to leave Nintendo out because it trades over-the-counter(OTC) and the Yahoo! Finance widget doesn't track OTC, yet.

My tracker includes:

Electronic Arts(ERTS) the giant games publisher.
Take2 Interactive(TTWO), the publisher of Grand Theft Auto, among other titles.
THQ(THQI), another large publisher
Shanda(SNDA), a huge operator of MMOs in China.
The9(NCTY), another operator of MMOs in China, especially World of Warcraft.
Gamestop(GME), the largest US games retailer, which also owns the EBGames retail chain.
Atari(ATAR), a subsidiary of Infogrames, a French games company.

Obviously, there are a lot of important games companies missing, but that's because either they are owned by a giant conglomerate, as Blizzard is owned by Vivendi; or they are privately held companies. Or I just forgot to include them. If so, let me know.

Contracts: Never Settle for the Standard Agreement

Just because a standard agreement is standard, doesn't mean it's a good agreement, except for the side that drafted it. Never settle for the standard agreement (SA from here on in). An SA is designed to optimize the rights of the party that drafted it, not to protect your rights. With that in mind, read the contract and look for ways that you can get screwed over. Look for words like exclusive, recoupable, net, penalty, termination, integration. These words usually cluster in areas that promote the interests of the drafting party over yours.

I can tell your eyes are glazing over already. Legal stuff, that's what lawyers are for, you're thinking. Correct. Get a lawyer, a good lawyer, nay, a great lawyer, one that you can trust. However, no one is as interested or understand your business as well as you. If you're negotiating industry specific contracts, you should be able to identify problems areas as well or better than your lawyer. It's your world, you should be able the think through the ramifications of royalty clauses (or whatever) in a direct and visceral way.

Having said that, don't rely solely on your own judgment with legal stuff, you should just be a second pair of eyes to supplement your lawyer's.

I just spend the last hour breaking down a DVD distribution agreement for a friend of mine. He runs a small production company and he's looking for a distributor for his latest film, Ex-mas Eve. A few distribution companies have indicated interest in the film, and he's begun to receive their standard distribution agreements. Man, those things suck. As a small independent producer, my friend doesn't have much leverage for negotiation, so he's mostly stuck with what they give him. I still advised him to negotiate, because if you read my previous post, you never know what you'll get until you ask for it.

So remember, when someone hands you their standard agreement, that's when the the fun part begins.

Note: If you interested in this legal stuff, there's an excellent piece on Gamasutra that has three games industry pros analyzing a development contract for Call of Duty: Finest Hour. Very interesting, even if you're not a game geek.