Image by rogilde via FlickrThe world of Venture Capital, the world of Angel funds, startups and the rest of it are all looking at a protracted and company killing slowdown in just about every economic sector worldwide right now. From the Inquisitr to CNet, Paul Kedrosky and GigaOM everyone is saying the party is over. For many of the smaller companies that are not in a solid business, or are relying on revenues that have no hope of showing up, that is going to be true.
As always with any dooms day scenario, there is always a silver lining, because we will see the healthier companies have an opportunity to start doing M&A at fire sale prices. If you can afford to purchase all your competitors in a market niche, then you stand a great chance of owning the niche when good times return.
If you are in need of money, and need to go meet the angels in town, then you need to plan at least 9 months out, and more like 18. If you don’t think you are in need of money, go meet the angels anyways, because they will give you good advice and that alone is worth the price of admission, worth the price of the pitch.
The sad reality is though in this recent spate of technology building, we didn’t see a party much like we did in 1999, we saw a lot of cool things, but IPO’s were scarce, and exit strategy meant being bought out. There was a lot of M&A activity, that made many overnight millionaires, and this round of technology boom was centered on M&A as the exit strategy. Was that really a good time? If you look at products or groups that were bought out by bigger companies, many of them languished through lack of love, many of the people who developed the product moved on because they didn’t want to work in a large company or never learned how to navigate a larger company. The party never really got started for abandoned but purchased technology at Google, Microsoft, eBay, and a host of other larger companies.
VC’s and Angels still have reason to celebrate the exit worked and they made money. The people who started the company also made money. And there will still be M&A activity even in the down turn, they won’t be as expressive as billions of dollars or millions of dollars, the new M&A might work out to break even but here is the other silver lining.
M&A activity frees up people who have money to go out there and do something wonderful again. People do not just have one idea, and once they have started and sold a company they have much more information on how to do this right. Fire sales are going to free up talent, and money that would otherwise be stuck with an underperforming company, with little to no hope of return. Closing the companies’ doors also frees up talent, if not the money side of the house. Once you have been “bitten by the startup bug” few will ever go back to the large company. Smarter people come out of the process; better ideas come out of the process. Meaning the third tech boom starting in a neighborhood near you now is going to be made of entrepreneurs who are smarter than they are now. This just increases survivability when the third tech crunch comes in play in about 8 years (following history).
While the party might be over for some, the party is just getting started for others. That is the thing to remember, the next big wave is already here and getting started. If you forget that, then you will be playing follow up and catch the leader in 2011.
The house has passed the senate version of the bail out bill today - 263 yea to 171 nay, a 700 billion dollar financial rescue package for wall street. This is going to be very interesting to see what this does to the overnight libor rate, and this might just unfreeze the credit market.
In the mean time the bill has passed, and something tells me that there is going to be a lot more coming from this one than meets the eye. One can not help but wondering if this is the turning point, or a turning point in how the USA does things, who we are, and what has fundamentally changed in how we do business. Or will all this blow over in the next five years, and become something we vaguely remember like 1987, or 2000/2001.
Tags: bill passes, house, bail out bill passes, senate, voting done
Steve Ballmer is giving the keynote tonight at the Bellevue Chamber of Commerce meeting, and it is very cool to watch Steve Ballmer pace the stage like a panther. He really does own the room when he speaks, and is well worth watching if you ever get the chance.
Steve Ballmer has some very interesting ideas about where technology is going to go. He is relating to the idea that the pace of technology has to slow down. But odds are highly likely that it will not, because there is still so much to do that has not been done yet. We are in many ways an industry in its infancy. Computers do not really do that much in relationship to what people do, how they communicate, and how they accomplish tasks either cooperatively or individually. Computers are just now starting to work cooperatively in a meaningful way.
What will the next ten years bring, will we look back with nostalgia as we remember what a 4.7MZH processor is like? Will we laugh at the primitive ways of keyboard and mouse as the only way to access a compute? The access and ability to connect and talk to people like never before. Good for everyone, the real question is where do things go from here, what are the next five years going to look like or the next 10 years going to look like. The assumption is that the technology industry has to slow down, how can that be 10 years of vibrant innovation that has propelled the industry so far? With the advances that the computer industry has made in the last 10 years, think about all the things that still need to be done.
Computers have to learn about you, and how things about you work, can you handle my trip to California? WOuldn’t it be great if the computer could do that. THe computer has to be able to do that, speak the language of human beings and be interactive with speech typing, modalities of interaction that are not happening now, 10 years from now the world is all digital.
Every speaker (previously during dinner) has walked up here with paper, but no one walked up here with a computer. But what if you could and were connected to the resources of the people. Everything that can be digital will be, content, information, data, access. The projection out from what we do today, to where can all these move to be digital tomorrow. The truth of the matter is that technology is part of the solution, but how do we have a virtual meeting that is as effective as a personal meeting? Those are the things that we need to be able to do. Technology needs to go there and own that space to make communication truly viable on the internet.
Very rich formats like a person to person meeting.
What if every surface was an electronic white board? That is the kind of world that we need to be building, and the things that Microsoft wants to go there. Reading a large flow chart on the screen is hard, jammed numbers in spread sheets with large screens to present data. The user interface/actions and how we can improve the use of data in relationship to what we are doing at the time.
We still have the same old issues with computers, and how many times have we all heard “I Can’t find what I am looking for or I can’t analyze things the way that I want to”. The same basic story of what can be done and what can not be done. The idea is that we can not prove our hypothesis because we do not have access to the data that we need to analyze the data. This evokes the idea of BI business intelligence in relationship to the decisions and the actions that we take every day. It is the imagination and creativity of people who create software to answer these kinds of questions.
Microsoft is trying to be the company to build and commercialize things around software than anyone else in the world. The idea is not about the verticals, it is about the software creation and commercialization. Make and commercialize the most popular software so that people can do the things that they want to do using the tools and platforms provided by Microsoft, and indeed sometimes other platforms as well.
Education needs to improve, all the schools doing things that Microsoft needs, engineers, phd’s and invest in the educational system in this state. All employers need a more educated work force. Invest in all of the things that grow the area. There has to be more businesses being involved locally, and we need to attract the best and brightest then there is no way that we can stop innovation. This is the one key thing to solving the problems that we face as a community and as an industrial base, we have to improve those things that we have to improve.
NOTE: I am a little late in reporting this, this is from a speech last week at the Bellevue Chamber of Commerce Dinner where Steve Ballmer was the key note speaker.
tags: microsoft, ballmer, steve, steve ballmer, innovation, future, technology, education
This might not be as bad a thing as you might think. Jason Calcanis the king of link bait, but often very smart when it comes to business has come up with the idea that 50 to 80% of startups will get killed off in the currently happening economic recession about to become implosion.
This might not be that bad a thing, sorry, but if we take a look at all the cool things that have happened from the last dot com implosion, with all the great stuff that has happened since then, maybe this might be a good no fault way to clean the startup house without anyone getting seriously hurt, physically. There will be money lost, but it will come back, people will go without a job, but they will find new ones, might not be the one they want, but it will be the job that drives them crazy enough that they go back out in 4 years after learning tons of cool stuff, or catching their breath, just to enter the game again.
We might see bumper stickers like “OH lord let there be a third dot com boom and I promise not to screw it up this time”.
We might see the market so cleared of similar seeming applications that people see the niches they can successfully occupy.
Fairly darwinistic, but looking back at 2001/2002, and the horrible things that happened in those years, the net result in 2008 is we have some fantastic things that were not even thought of 6 years ago. Who knows what a new collapse will bring?
I do know that they are already working on it in their basement, and if everyone is really smart with their money, they will be looking for those folks now, the ones that have a low barrier to entry, drive, ambition, and are just waiting for everyone else to die off or get out of the way.
When you look at group blogging web sites like BoingBoing , Gawker, Techcrunch, ITToolbox and other web sites, they all have different niches, but they all have things in common. These things in common are community, interest and uniqueness, the number of times each day they blog, and a host of other things that separate the blogs who continue to grow, and blogs that do not continue to grow. Depending on why you blog, following along with the lessons from the top bloggers in the world could help you bring your blogging up to standards that people expect from blogs today.
A strong sense of community, people go there because they end up caring about the people writing, or the issues that the blogs are covering. The community is important, answering back comments are important, learning what is important to your readers is vital. Most blogs have the ability to comment, back track, links, blog rolls, or other ways of sharing “link love ” with someone. The community builds upon itself, and can be a major key to success.
A strong sense of identity, for those that visit the sites often, you already know what you are going to get, or your friends and yourself can talk about the whole experience that these web sites offer. It is often not just about the “news” or the “scandal” value is added by paying attention to the comments, back links, and rebuttal that revolves around each post. The identity of the blog is built around two types of “brands,” the writer and the web site. In some cases, the blog and the brand are the same, in the case of Gawker Media, ITToolbox and other group blogs, the blog brand often surpasses the individual contributors, but the contributors also add to the blogs brand.
There are strong characters or leaders in each group, either in management or as writers. These strong personalities helps guide the direction of the group, or provides support for the group effort. Individual blogs have to be not only their own guidance, but their own manager as well. These good collaborative environments in many ways are just as important for the writers as they are for the readers. While there is a money motive when there is a solid business model to be considered. When the business is about writing, where it is not “vital to be first” there often is a supportive environment for writers. Writers talk to each other often, and share their own experiences with each other. When the motive is readership , and money , sometimes issues become clouded quickly .
They are unique in one form or another, or they have successfully figured out a way to “dominate a niche” or add to the niche in ways that are unexpected and unique. Individual bloggers like Louis Gray, Robert Scoble, Chris Pirillo, and others have all talked about the same thing, yet find interesting ways to add to the conversation. What they add to the conversation as individuals helps form opinions for many people as to what they will buy, what they will use for technology, or how technology, culture, and people intersect in often unusual and interesting ways.
They do this either as a solo effort on their own blogs, or they do this as part of a system like Robert Scoble’s blog that is an extension of Robert Scoble and his current employer. Other ways of reaching the audience and adding to the conversations is that they have also taken on the part of an evangelist that people can believe in. Chris Pirillo runs the very popular “Gnomedex” series of conventions that discusses new media, while larger organizations like O’reilly media use their own blog as a corporate blog to hear what the head of O’reilly media thinks is important. As individuals, they all have made a success of blogging in relationship to what they do, and who they are. The blog is an extension of the social landscape that they exist in at the time. If Steve Jobs or Steve Ballmer blogged, they would also immediately become some of the most read blogs in the world, because it would be as both an individual and as a corporate leader or thought leader in what is happening next.
The social landscape that would support the CEO of Apple and the CEO of Microsoft would also add to the discussion about how those companies can reach more people with their respective audiences.
They are passionate or “true believers” in what they are talking about on their blogs. They want to be around people who are building the things, products, ideas, and social fabrics that we live in, and they blog about. The passion is not faked, it cannot be, they honestly believe in what they are writing about as a solution to a problem, or someone to emulate, or an idea that is worthy of pursuing. Their blogs, and in many cases their lives reflect that infectious enthusiasm for how to use new media, blogging, video blogging, pod casting, and a host of other technologies to unite and bind people together. All blogs to this to a point, they talk about things they believe in, but the truly successful blogs all have a thread of undeniable passion that runs through them.
They write every day, and in many cases, many times during the day. All the successful blogs have more than one entry per day. The output on some of the individual blogs is amazing in its context, content, and frequency. Team blogs are easier to manage with the continual flow of information. Nevertheless, even in a team blog, it is important to blog every day. Bloggers who blog once a week, or once a month often fail to gather an audience. Bloggers who are out there every day, many times during the day often have a much better change of building an audience. There are some that state that blogging every day is a misnomer , that it is more about the participation every day, however at some point, the blogger needs to intersect with their audience every day in one form or another, usually writing a new blog entry, and answering comments will help drive readership.
The threads that bind the successful blogs from the non-successful blogs, from passion, community, identity, leadership, social involvement, and uniqueness are the compelling reasons to read their blogs. They state things that may be out of line with our thoughts, and as we blog about the ideas, we find the social threads to tie these ideas together. We reformat the data, ideas, thoughts, and technology that help drive those changes into a unique solution that works at the time, or does not work at the time. The key to success in blogging is to be all those things, and be consistent in their application within your writing and the social obligations you undertake with blogging. You can blog once a month, but if your goal is to become a professional blogger, then emulating what other bloggers have learned, leaning how to write and believe in what you are doing is a good start.
With an economy tanking, and people finding that their 401K’s and 301B’s are being slowly wiped out by corporate failure, as well as the not fully funded retirement funds for many companies, Briar Dudley and Mini-Microsoft chime in with the .035% compensation pool for Microsoft corporate officers. The news is interesting if the reaction is muted with bigger things going on like the Federal seizure of Washington Mutual this morning.
Microsoft is a great company, and they make a lot of money, the question is going to be what this will look like when there is a huge backlash against executive compensation going on right now in the USA. What is even more interesting is that while Microsoft is a great company that makes a ton of money, what that compensation pool will look like if the country goes into a deep recession, and people start getting laid off from their jobs.
While it will be the contractors who will be the first to go at Microsoft, if it gets as bad as the technology bubble bursting in 2000/2001, this might become a huge albatross round the necks of Microsoft corporate management. This will not be a matter of right or wrong, this will be a matter of appearances, and if it looks like the company is being slowly looted, the crisis in confidence of senior management might drive the stock price down. Not that the stock price has really gone anywhere in the last five years.
This is not a matter of money, or a fully funded pool, retirements or anything else, this is all about the coming backlash against senior executives, the Wall Street effect is going to hit a lot of companies in the next year. If executive compensation seems or even gives the appearance of being out of whack when there are people unemployed, the backlash will be social. It is that social backlash that will have a greater impact on Microsoft going forward than anything else.
This might become as big a deal as “towels” as a rallying cry for the troops, especially if Microsoft starts cutting back on employment or starts firing people in a massive draw down. People will be looking at that 20 million per person cap, thinking that if you pay someone + taxes some 160,000 dollars a year, you could keep employed 125 people. And if you use the 60 Billion that Microsoft made lately, and take the .035 percent of that total value, there is some 2.1 billion dollars there, which means you, could keep employed 13,125 people for the value of that fully funded compensation package. Update: News on numbers - math might be off, if I use the math as shown above, the numbers come to much less, .035% is 3.5% of 60B, or is it less than 1% at .0035%, according to the 8K it is .035% or 3.5% of the total value, then the numbers stand - if it is > 1%, the numbers are way off, and we are looking at 12.5 people and 1,313 (rounded up) jobs that would be saved by removing the executive compensation package.
Excerpt from a soon to be printed book Book and Bust in the Blogosphere.
While the definition of a blog is something that someone does to have a voice, there is one thing that is noticeable between a professionally run blog like ITToolbox, Techcrunch, Read Write Web is that they have all adopted some form of a business model.
The business model that they have adopted helps fuel their growth and their independence for the writers at those blogs. These blogs also have plans and ambitions to be the best in a category that they can be, top in their category, top in breaking news, or the top social network for a type of data or information. They often hire good writers or have good writers initially “guest blog” on their site, and do everything they can do to either break the news first, or develop a community of professionals around a subject topic.
For some of the top bloggers, they are coming from a traditional journalism or media past; they already know how to write for a mass audience. They already know what they have to do to be the best, have quality control on the articles, and in many ways develop a community around the blog itself. Professional blogs, or professional team blogs all rely on quality, an understanding of what people are looking for within a particular niche, or have worked on funding, revenue models that support the way that professional blogs have developed over the last few years.
They have also developed a “brand” around their name, when you talk about Robert Scoble, you do not just read the blog, and the reader has an opportunity to meet the person behind the blog. He writes from a personal viewpoint that is both journalism and personal viewpoint over what he thinks and sees as he discovers new companies or new technology products. New companies or new technology products often seek that kind of attention because Robert Scoble and a Brand and as a Person has the ability to drive sales. He also drives opinions about what is early adopted, or what is “hot now” within the realm of technical bloggers. He is also deeply involved in the blogging community and takes on issues that concern all bloggers, like the blogging code of conduct , and when bloggers are behaving badly . When you read his blog, you think you see the person behind the blog; you get an opinion and one that is often well balanced and heavily cross-linked to other bloggers to support or defend a concept.
When you look at Techcrunch, you see the brand from a group blog that is all about being the first to break news on a subject. Techcrunch does not run a story second, the site, and the owner Mike Arrington is considered a power broker in the world of technical blogging. As much as the “Huffington Post” is the equivalent power broker in political blogging, with a future that has great ambition and plans for what will happen next . Being able to focus on the ambition, be the best you can be in a category, and then work very hard to get to the top. Many bloggers fall by the way side, with failed projects that litter the internet where ambition and ability to execute did not happen .
A personal blog is something that people come and go from, they are used to work out personal situations, or to keep track of notes of things that are going on in someone’s life. Usually these blogs are on Live Journal, Microsoft Spaces, Blogger, Facebook, MySpace, WordPress, and a host of other blogging platforms that people can use to start up a blog, write furiously for a week, or for a month or more, only to abandon the blog much later on. Some sites like Live Journal have book authors that keep up with the blog on an infrequent basis, some writers like John Scalizi and his “Whatever” blog is used to help drive community for his writing.
The “Whatever Blog” is a personal blog, where he talks about the things that are important to him, without advertising, and without an obvious money motive. You can catch nuances into his life that are something that we all at some point deal with, that are addressed with a large amount of humor . There is no ambition to be the next Robert Scoble or Techcrunch, this is his way to connect with fans, and the blog reflects that viewpoint. Fans love it as much as Robert Scoble’s fans love his web site, different audiences, but same idea, connecting with friends, family, and fans, from two different approaches that work for each case.
For the digital archeologist, personal blogs provide a current into more personal thoughts those things that are influencing people at the time it was being written, while the professional blogs based on industry are important for keeping track of what subsets of society thought were important at the time. Personal blogs are rarely linked unless there are discussions about a common cause, like cancer, or used to support fans over a subject/person/personality, and then suddenly that personal blog can be catapulted into the worlds view, heavily linked and show up more prominently in Google search results. A professional blog starts with the idea of collecting cross-links and back links to their stories. Personal blogs are usually first person with few standards on how the English language is used, professional blogs are about quality writing. Depending on the blog, the reason why it was started, the goals, dream and execution, why someone starts a blog is all about ambition.
tags: boom and bust in the blogosphere, book, excerpt, techcrunch, arrington, problogger, robert scoble, fan, important, survivor, interesting
Image by rogilde via FlickrThe world of Venture Capital, the world of Angel funds, startups and the rest of it are all looking at a protracted and company killing slowdown in just about every economic sector worldwide right now. From the Inquisitr to CNet, Paul Kedrosky and GigaOM everyone is saying the party is over. For many of the smaller companies that are not in a solid business, or are relying on revenues that have no hope of showing up, that is going to be true. ![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=f54fb4de-ecca-4648-be6e-06ad636633ba)
