Supernova 2007 - Innovation In, On and Through the Network

Moderator: Robert Massoudi, Cisco
On the panel: Craig Forman, Earthlink; Jason Gaedtke, Comcast; David Young; Verizon; Michael Katz, Berkeley

Community/Entertainment - how the community is generating and consuming content.
Video is complicating the issue quite a bit.
1080p - cost of distribution of a HD, 1 hour video = $5

Need to address the capacity issue - could bring down the network
What are the key capabilities that the networks can bring that could create long-term value in the value chain?

Question: what are the actionable opportunities that can be created with this group?
Question: what are the unique capabilities and value that each player can bring to the capabilities?

Robert: "Please avoid the issue of net neutrality - want to discuss collaboration versus the issue of net neutrality."

Craig: we view ourselves as a non-facilities based Internet dial-tones (24 brands) with 50% narrowband and 50% broadband. Already working/collaborating with many of these people. Are fdoing facilities with the Muni Wireless play. He runs the access business and the applications that run on the network.

No one owes us a living. We do not own some franchise agreement - highly competitive market place. Need to look hard for where you can provide value to the customers.

Earthlink: for product bundles, the question is are offering saving money, time and delight

Jason: what is Comcast Interactive Media? Over ten years, offering interactive, digital download, digital dialtone - gone very far from being a utility video player. As they move into the high-speed dataspace, running into satellite broadband and other players. In digital voice, running into telcos and VoIP players. CIM is an "enabler" of the technology.

CIM "winds of change are continuing to blow and increasing" - concerned about emerging content and how users use the content. Established Interactive Media on how they could work with users needs in the community aspects. Competition leads to collaboration.

David: Instead of content and network - there is a tense relationship between the broadband network and the content players. There is a very symbiotic relationship. Verizon/networks need to understand the use of the bandwidth - so you can access content and applications specific to the device.

Why aren't apps across the phones? Verizon has created an ecosystem on the services around delivery and development. Not the same on the wireline side - only the wireless play.

Mike Katz: Berkeley has an unusual model - teaches to build fundamental technology.
Complimentary products and firms on interactions with the other players. Either fight amoungst each other, capture the value OR create a cooperative environment. How can you create an opportunity to work together. At one point, the thought was vertical integration - but taught that it did not work out. What do you do with thousands of applications with tens of platforms? Can not have the tail wagging the dog.

Will have to have a banding together of relationships - for example, Yahoo! representing a band of applications to the platform players. Or the platform/infrastructure sees the need of the applications. Look at how the console players and the

Pricing, pricing, pricing - micropayments!!! Can make a big difference for a number of reasons. Stimulate customer behaviours, application development and better relationships between players in the ecosystem. Web is still in its infancy in it's pricing models - see the power of google. The real genius, much more sophisticated in pricing models in advertising. We will see the improved pricing of bandwidth.

Are the costs of message transmission significant? One way, they say no. Other way, they say yes. We might need to move toward traffic sensitive pricing. If we assume that the technology on offering bandwidth will be ahead of the technology for using the bandwidth, then no problem with pricing.

Throwing bandwidth at the problem - bad solution, not very scalable. Need to solve the delivery/distribution economics.

Impedence mismatch - between the service providers and

Contextual information - behaviour around the information around activities. Wireline/wireless integration - can switch from one to the other space.

David: where is the bottleneck - with copper, it was at the Central Office. Moving to fiber to home, becomes a virtual unlimited solution. Building out the infrastructure to provide wireline to the home. Wireless - spectrum is the constraining factor. CDMA is squeezed - there is a need for more bandwidth. At universities - traffic management is handled at the uplink side - avoiding the transit costs.

Question from Kaliya: why is bandwidth a problem here? Other parts of the world, no problem. Solving broadcast into the future, broadcast is dying into the future. What are you doing on a practical, process level for collaborative forums. How are you handling the trust issues?

Supernova 2007 - Connected Innovators

adap.tv
Israeli company that offers scalable scanning with intelligence that offers contextual, adaptive, scalable, blah, blah, blah... (I think I saw this with scanscout.com). Can insert appropriate ads into the viewer. Question: does it offer the ability to go into ANY Flash viewer?

Adaptive Blue
Personalization technologies - puts the intelligence in the browser. We focus on people - people and everyday things, people and shortcuts, people and personalization. This is their vision of the solution to the semantic web.

• BlueOrganizer: personalized smart browsing - BlueMenu.
• SmartLinks - smart browsing for everyone. reminds me of snap.com

AggregateKnowledge
Personalization/recommendation/discovery engine - similar to the Amazon recommendation engine. Finding the unexpected, serendipitous content.

Why don't we do the implicit matching concept on a massive scale. World's largest "implicit social network". They are launching a solution for Overstock which is using the implicit information and interests from the prior users and powering targetted ads/product suggestions.

CastTV
Web-wide video search - videos that they want to search online.
Demonstrates search compared to google and YouTube search.
Reminds me of a mashup with blinkx and dabble. (Disclosure - I am an investor in dabble).

Developed indexing side - index sites themselves. Powering the online video guide for TV Guide(?). Again, allows users to find videos, discover and play. DFJ funded - looking for staff.

CriticalMetrics
Music discovery/recommendations/search field - compared to HypeMachine, myStrands, etc. Other services do not keep you informed with "everything". Very few categories of product with such variety. Need some kind of solution to narrow down solution. "THE ULTIMATE MIXTAPE MACHINE" - tag line from their website.

jangl
Manages social communications via the phone. Many profiles on social networks - where is the phone? Need to de-silo phone from social networks. Key is privacy for briding relationships online to the phone.

Pando Networks
Helps deliver sharing large files. Link people together providing a peer-to-peer network (BitTorrent) - now becoming a large P2P media delivery platform. Allows Pando to manage, deliver or remove media content from the network.

Pando coexists with the CDN to work with both the CDN and the Pando P2P network (my assumption is they are using the Pando client to pull from all networks. Pando (I believe) is now the largest BitTorrent client in the world. Pando Publisher - this is what Robert Scoble needs (from our conversation in the Open Space session).

SodaHead
Polling across your social network (waitaminute - wasn't this the Poll option in eGroups?) Aggregate data and individual perspective. Reminds me of bix. "Best Polling Widget on the Planet" - tagline.

SPOCK
People search engine - discovery engine for information - drawing connections. Exposing the relevant information associated around the individuals or definitions on individuals.
One of the funniest people on the presentation.

wize
Change the "what to buy" effort - online product research is where the action is. Simplify the product research effort - so they can find the best product for their constraints. Trolling information across the web and other content, mix in some proprietary analysis tools to help answer the questions for making a purchase decision.

Two features: wizerank - metric on prediction of product success based on recommender and sales success (similar to a Wine Spectator Score) and user reviews.

ZapMeals
"Shortest distance between good food and your tummy" - tagline. "eBay for takeout orders" Looks like a chance for people to resell their cooking skills to others nearby (Hey Shannon - here is an idea...) Matching customers, food preparers and delivery people.

ZenZui
Consumer-centric services + Power of Sync + Focus on Design = ZenZui (the fastest speaking presenter in the West). Seems like it is prepped for iPhone and also works with phone interface (nine phone number buttons). Z key - zooming user interface - 16 tile heatspace. Zooms into/out of space.

Zing
Backend provider of solution - required to connect with a personal computer - Zing provides the connectivity. Untethering the application solutions (e.g. and leveraging wireless IP to provide entertainment onto devices.

Feedback from the panelists: avoid pure webplays, pure destination plays are not very successful. While AJAX exists, user interface is not happening as fast. Need to have simplification and power.

Supernova 2007 - Changing Politics

Question from JD: what is your personal interest in politics and culture?

Victor: Is the Internet capable of rewiring politics? Possibily of bringing in people who have tuned out politics. may be able to bring in some very temporarily. Will we have the same as
Does not think it will rewire politics - no evidence from the blogosphere, electronic town halls, podcasts - nothing is changing the landscape. What does technology do to politics at all? Information flows can be rechanneled and optimized to existing stakeholders - a slight improvement on decision making.

Andrew: got into politics when he was running a night club in NY - concerned with Guliani - joined the community board where the club was - got very active in the local community. 3000 students, 97% on schol lunch, not a computer anywhere. Asked 10 friends - 200 people helped wire the school - became MOUSE for technical support for schools. Public education funding was through politics - discussing technology and education. Politicians do not know the difference between a server and a waiter. Began to give advice to various Democrats - Gephardt, Clinton, - only followup was fundraising requests for $$$.

Became the chairman of the Howard Dean Technology Committee - helped raised money and visibility - raising money generated visibility. In 2003, started Personal Democracy Forum - and grew the magazine and the conferences. Two schools of thought:

1. Technology can be used to maintain top-down control - direct-mail for the 21st Century. Example: MoveOn.org - small group of people who determine the agenda and hope others follow.
2. Technology creates an opportunity for a more robust and participatory Democracy - believe that top-down will be disintermediated. Belief that citizens will connect politics to their lives and reconnect, whereas television has disconnected. Example: Sunlight Foundation - exposing government data to citizenry

Took 15 years before television truly impacted politics - we are in the very early stages of how Internet will impact.

Julius: be descriptive on one element going on now - Julius has been in the private sector - believe that Internet will change politics. Same belief that Internet would have a lag time. We saw the beginnings of it in Dean, thinking that it would be historically significant. Friend of his decided to run for President (Obama) and interesting to see how the campaign is wrestling with the technology and its impact.

What's going on at Obama08.com - tools are familiar from a commercial perspective

1. Over 600K have signed up for BarackObama.com fo a website that has been up since Feb 10th - 4 1/2 months
2. Series of social networking features on the site
3. 70K people have created a profile without any advertising at all
4. Set up groups and meetings - traditional organizing tools - 5000 groups have been set up on BO.com, 10K meetings have been organized where over 50K people have participated
5. Basic blogging function - 13K people been blogging on the community site
6. Early stages on using technology on the policy side: simplified wiki solution for healthcare

100K contributors, 50K were online - of the 50K, 50% were $25 or less, 90% were $100 or less
Mobile - "go" to OBAMA on the networks - just launched

All of this stuff is in beta - all of this is being experimented with - early strong indication for this to participate.

JD Lasica: The Remix Politics Channel - ourmedia.org - give people resource materials/tools/original footage of past Presidential Campaigns and can remix and mashup and create a commentary thoroughout the election.

Question: Andrew Stern on Bill Moyers - how the Internet is changing politics - is MoveOn.org in a position to influence politics? Is this a good thing for the Republic? Is this making compromise more difficult? Disrupting politics as usual? Is it impacting public policy in a good way or a bad way?
Victor: Andrew and I are in violent agreement - old political intermediaries versus the new, emerging intermediaries. By and large that this is the same game - there is a layer of intermediaries. Hope the SunlightFoundation becomes the newest NYTimes. I do not think a TownHall/groundsweel of public discourse. We will still have intermediaries. There will be an evolution (think of Ariana Huffington, Daily Kos).
Andrew: Sunlight is acting as a public data source - no judgments applied. Makes it free to the public to make sense of the data. Filters will not act exactly as the same way. Changes the game. e.g. Netroots elevation of Ned Lamont - from obscurity to national prominence.

Question: is the fact that the Internet is opening up the dialog (e.g. Huffington Post)
Julius: this technology is not changing anything? Not sure if I agree. I think that there is a separate question - which are good and which are bad? Similar to how TV changed politics. Mobile/Internet will not change politics dramatically? What is our evaluation of it in our various roles? What role do we want to play?

Question: in MSM, the political center is falling away - since on the web, the extremems are making people go to the edges. Is this impacting public policy?
Andrew: technology in relation to elections and technology in relation to governance. There is a movement to - politicopia.com - a public wiki for policy ideas. Caused significant changes to two policy issues. But the question is how and to what benefit? How is the technology is deployed and used? Back when, the printing press was supposed to be banned because it would provide both good solutions and bad solutions.

Question from the audience: who decides what are the 12 most important issues on the site at Sunlight Foundation?
Andrew: mission and goals of the foundation is what it is. The organization does everything it can to fight the opaqueness of the governance. The work is to make sure that all the information is available.
Julius: it is important to note that the technology is inexpensive and powerful enough to make these things happen for the discourse to occur.
Victor: MSM tries to separate editorial from reporting.

Question/Commentary from Shel:
Heard representatives to have a gatekeeper to disintermediate. Every single one lead with Nicole Smith. The Internet is about conversations - the politicians and government does not listen to us. Obama is not really doing baby-steps - they are using it to fundraise as well.
Julius: Sympathize with an overwhelmed staff.
Andrew: every campaign is engaging in the traditional top-down process. Obama and Edwards are trying to use a new set of tools to engage more people. There are other kinds of tools - back to the civic side of this. There is no reason why city counsel meetings being blogged - which would allow for far more voices. This would last longer - but there is no one doing this today.
These are all baby, baby steps. We need to remind politicians that they need to listen.

JD: The campaigns are looking to advance the candidates over the political cause - very little in engaging the public around the political causes. Is Obama doing this?
Julius: the campaign is collecting information/thoughts/ideas - they are reviewing it - it is all very hard. How do you organize it to make it effective? How do you allow people to be heard that want to be heard? Groups are more effective than singletons - the tools allow for people to connect with each other. On the site or off the site.

Victor: aren't we missing the conversation? Demographics of bloggers: those that engage in the conversation outside of the major political sites; dominated by educated white males. Very damning, very frustrating - would like to have this groundswell that is other than educated, white males.

JD: is it fair of me to make an assumption, you do not see the same kind of social media activity on her site - foreshadow her style of management.
Andrew: the Clintons are masters of top-down politics. The 1984 video got 400K views before
The reason that video was the online slam that matched the
Hillary Clinton announcing on the Internet - was b***sh*t. If you create good content - the community shared it and then gave people a chance to comment. Hillary reacted
Hillary is going to have a very hard time going top-down - and the Repubs are about top-down.

Question/Commentary from Brad Thompson: wants to argue against the "shortage of political information" - I believe that it is a signal-to-noise problem. it was more about signal-to-noise compared to getting the truth to come out.

Second: revolution has been the reduce the cost of media and fundraising - it will have an effect - but will it be able to change American politics. Maybe it will change to allow for politics to be cheaper.

Question: can't the campaigns use technology to manage efforts of information flow
Victor: there is a difference between discourse and information flow
Andrew: take a look at webcameron.gov.uk to see how the Conservative Party is allowing greater access.

Greg speaks: Sen. Bill Nelson is using mymaps on his website
Andrew: music industry is still not up to speed on music downloads

Question: what are the metrics of good outcomes?
Andrew: education is the pillar of our democracy. Increased education is important.
Julius:
Greg: no metrics to measure civic engagement - only on whether or not you come out on one day and what you do that day. Most people turn to - did the candidate win, how much money did he raise, and what was the turnout?
Victor: we do measure civic engagement - Bowling Alone - how people truly engage.

Supernova 2007 - Research and Relationships

Moderator from Max Kalhoff, BuzzMetrics
Panel: Aaron Coldiron, Microsoft; Ellen Konar, google; Amy Guggenheim, McKinsey

Perspective - market information business (mostly startups) - market intelligence, market information, innovation. Digital transformation - impacts on these areas.
How marketers create their understanding of customers and prospects - built on a foundation of active participation with the customers and consumers. e.g traditional survey research - challenges of elusive consumers, attention erosion. Traditional market research - interception, interruption, coersion.

Interesting value proposition - much more difficult to do true market research - but with these issues, new opportunities coming up with solutions.

Landscape: Major Powerpoint slide with LOTS of dots - brand association map. Mapped out the major words and maps it out with the most relevant association. Breakdown via competitors, products, related concepts, brand attributes. Nice visualization once you take the time to understand this.

Ten Major Disruptions in Measurement

1. Rise in Online and Digital - percentage of adults online over 70%
2. Attention Erosion, Research Adversion - engagement - increasingly becoming an anomoly
3. Speed of measurement increases
4. Data commoditizing and democratizing - blogpulse, google Analytics
5. Passive Behavior and Attention Measurement - hitwise, comscore
6. Measurement and Analysis of Unstructured Data
7. Consumer-centric Measurement and Planning - now migrating toward more targeted distinctions (qualitative factors)
8. Qualitative Comeback/Feedback
   
9. Data Integration Comes of Age
   
10. Attention-Data Ownership - attentiontrust.org - data following consumers around - trail exists into perpetuity. What becomes the relationship between the marketer and the people formally known as the research subjects?

Question: What do you do? Why are you here?
Ellen: comes from google - started in org research, moved into market research (at the time, was with IBM) - thrilled with getting involved with customers, businesses, etc. Worked at Intel in "traditional" market research - got increasing frustrated with the effectiveness of market research. Fits very well with google's perspective - let customers define the products. Launch products in a "beta phase" and watch their verbal and behavioural feedback.

Amy: McKinsey's Digital Marketing Practice on the West Coast - developing McK perspective on digital marketing and issues around that as well as clients and teams in regard to ecommerce/digital marketing strategies. Everyone is trying to figure out what is next.

Eric: work at Microsoft - word-of-mouth marketing - entering conversations online, listening to customers discussions online and how do we figure out ROI online. How do we quantify how the marketing effect how products are bought and/or used.

Question: now, we live in a digital world with a trail of meta data followings - breadcrumbs of insight is everywhere, but we are not using them. What is the gap in where we should go and where we are?
Ellen: on research side, makes the job easier and harder - we used to spend so much time trying to generate data. Did some focus groups to generate data. Now, the data is a lot of noise though cheaper. Can not design a nice little study out of the databases. Datasources are a "hell of a lot harder" - but on the flip side, as a recipient of data - much more fulfilling. Now, not small portions, but by large groupings of data. now it is not hypothetical - it is now directly accessible. It is from the real customer base.

Amy: we are talking about consumers are more and more engaged with companies brands - input to you - how can you evolve your marketing model? Now we are creating "participatory marketing". How can we use users to evolve how we do PR? Customer service? Marketing with a HUGH CAPITAL M. Example of NetFlix - running a contest to improve their movie recommendation algorithm - more than likely someone in company wanted to improve the algorithm and realized he/she could have the crowd develop a better algorithm and give the winner a $1MM since it will be a very effective way to evolve your product. Lots of press and LOTS of engagement. Very organic marketing success. How do you make it programmatic? Need to focus on your "brand promise" - what your brand delivers against that. E.g. Kryptonite video - 15 second video - always used this Kryptonite lock, showed the pen - and became a huge impact. The rumor had been around for years and year, and now - with YouTube and other video distributors - the impact was a heck of a lot more impactful.

Eric: we are all just "getting started" - how is media controllable. The brand is "out of your hand". It is in the digital ether into perpetuity. Difficult to force a particular brand - need to engage the customer on how to establish the brand.

Question from the audience: how do you systemitize it and/or control it - what do you lose when you do this? Amy: some things can be systemitized, make programmatic - salesforce.com opens up the product roadmap.
Eric: when you connect the engineers to the brand - a lot better in developing better products.

Supernova 2007 - State of Investing

On the panel: Ron Conway, Band of Angels; Flip Gianos; Jeff Clavie; Alex Gove, Waldon VC

Markets have changed for investing - people are taking elss money, taking money later - what does that mean in the investment community. What does this mean in return on investment? Greentech takes a lot longer than three to five years.

Question: where do you see the world of investing, from the angel POV
Ron: from 30K in Silicon Valley is the best it has ever been (even better than 98 and 99) - multiple monetization paths forbecoming viable businesses. Cost of company is a lot lower - before $1MM for Oracle DB, $1MM or Sun machines. Now, entrepreneurs can test out the product after it is out there - and can raise products now. Ron and Jeff invest in mainly Web 2.0 companies.
Flip: 600M fund investing in life sciences. Venture business is expanding - growth in life sciences and you can get a lot of money.
Jeff: "I agree with Ron." Capital efficiency plays on this scale now - money can create a lot more companies. Last three years, there is capital efficiency and monetization that we could bring companies to the next level of the market. e.g. Dogster is reaching profitability on 100k in investment. And now, angel invests are now receiving better valuations and angels now can be rewarded much better. VCs are not doing small investments (<100k to couple million), so opportunity for angels.
Alex: agrees with everything that has been said. Similar focus as Jeff and Ron. Points that are really important:

• looking to invest earlier (from past funds) - Series A deals
• more cooperation with angels (post boom, angels got the short end of the stick)
• cheaper to start companies, want to help nuture the companies
• VCs now need to prove themselves more - now VCs are unable to drag entrepreneurs, entrepreneurs are looking for real action from VCs

Question: what mistakes are you seeing this go around?
Ron: spending too much money, too soon - not enough to show after investment. Need to be frugal and accomplish something with each round of fundraising - something tangible. Last 18 months, no companies go out of business until this month. Now, four companies are going out of business. Attribute it to entrepreneurs that said, "give me $2M and I will accomplish X" - then if they did not, they could not get more. If you can not deliver, find a way to give the money back - and then the investor will look more kindly on that.

Question to Flip: what are the changes/evolutions to the investment?
Broadly, there is a lot of angel/web 2.0 services - people are investing smaller amounts but expecting more tangible progress. The mistake they are making, people do not have a very clear idea of what they are starting. If you have to go through a long, arduous process - the ones that get funded are the ones that have a focused targeted effort. Good news: iterative development. All about tangible progress.
Jeff: point out that in this market: the cost of failure is very low. With $25-50K of investment can determine viability. A plan that is not well-defined could still get funded, if there is a good team.
Flip: but if you do not deliver quickly, you are eliminated very quickly. Advertising is a spiggot - it can be turned on very easily, but turning from a small company to a big company is a challenge for most. Big VC want money opportunities that have BIG returns.
Jeff: entrepreneuers without doing their homework - who are the investors, who are the right guys to talk to, where is the ecosystem. Do the research - find the five firm, five angels so you can refine your pitch.

How does an entrepreneur do this?
Jeff: Look what are the names in the people that are invested in - surf the web
Alex: Need to come in with a warm intro. All money is not created equal - angels/VCs are aligned with particular areas. Not everyone competing in the global space. List of names that have done deals in this space - the whole notion of just blast is not the right way it works.
Alex: if you can raise cheap money from angels, go for it.

Question from audience: smarter investors are interested in more "real things" - she sees an ecosystem that is interested in the "unreal" than the "real". More important to see the "unreal" than "real". She is not a PT Barnum - how do we move forward? How do we compete?
Flip: put your head down and get the work done. The financial markets respond to things that are outside of the control of entrepreneurs. In the long term, building a real business with real users and real revenue, that is the way to go.

Ron: Angels are partners for the long run - only 2% of the cases does the investor get cashed out before the major event.
Jeff: there is an open market - control: term sheets are trying to be flexible and reasonable. Angels take a huge amount of risk with a bet on the fact that they will beat the odds - but will have casualties.

Question: what is your success rate - now? Early stage - 50% failing is fine. Ron has had 1%/2% casualty, Jeff has not. Flip: varies by marketplace (med devices: more than 50%, biotech: about 50%, semiconductors: 40% successful, software/services - failure rate is 80%) - produce more than 3x the money.

Question from audience: how do you now evaluate outsourcing?
Ron: if the CTO and he VP of Eng are employed by the company and proven track record, no problem. If all outsourced - run away. Phenominal outsourcing company (PhoDeath???).
Flip: outsourcing is good for later - not so early.

Question from audience: what is your ballpark figure of multiple on return from companies?
Ron: If I invest in 100 companies - 1/3 will die, 1/3 will get 1-2x return, 15% will get 5-10x, 15-20% will give me 15-30x, the remainder will get 50x.
Jeff: Personal hurdle is 10x in X percent of companies in his portfolio then applies a decision analysis effort on the metrics.

Question from Owen Davis: how do you look at an investment decision?
Jeff: when I invest in a company, there is a shot at a 10x return - but it is not in the documents.
Ron: pro-rata investment rights
Flip: couple of different circumstances - it is more common these days, if a small amount goes in ($200-400K) and they have to raise later, a lot of times this is done with notes or warrants. Setting a price at that point is really hard. If you are putting $1-3M, then much more sense to put structured financing.

Question from audience: what is your time frame nowadays?
Jeff: can not plan on when you will have a liquidity event. Ron: usually there is a wave of companies getting acquired quickly - five recently, then 3 to 5 years later.

Question from audience: how has the liquidity events changes and how does it change (e.g. 144 markets)
Ron: facebook and Zappos will more than likely IPO, but all the others are about M&A. The goal is about acquiring by bigger firms. I am constantly presenting companies that are ready for M&A. It is all about M&A.

Question: how does that fly in the face in the product versus feature companies?
Ron: i like them to focus on the metrics and then M&A will play later.

Question from ustream person: where can angels help?
Ron: If a company gets valued at a reasonable valuation, the M&A transaction is just fine. Just do not get reckless with valuation so that investors want to come back when you start a company.

Metrics: I asked - need to get the details from the video - but general answer - relevant to the marketplace.

Question: what is the reasonable exit ballpark?
Alex: bio-tech, nanotech is a longer terms investment, others 3-5 years.
Ron: 3-5 years is the norm. TellMe just sold - after 12 years.
Flip: we are in the money management business - do a 20% return over 25 years. This requires
Question: syndicate of investors - can you talk about the "kind" of money. How do you communicate the opportunity to non-sophisticated angels? Relationship with other investors?
Jeff: does not work with unsophisticated angels. Can not rely on the money to come back at some point. A) never get non-qualified investors in these deals. B) network of co-investors that you have invested with in the past.

Question: when to seek angel versus VC? Benefits in raising angel?
Ron: if you need $1.5M or more, go to VCs. Try this from angels, not easy.
Flip: think of this as project finance - if a small amount of money can get you users and revenue, then go for angels. Map out the milestones, and that will help determine your metrics.
Jeff: cost of capital from angels is higher than VCs, the angels and VCs work together
Alex: talk to VCs early since they can refer entrepreneurs to the "right" kind of angels. Good karma will pay off in the long run. All angels (like VCs) are not created equal.

Question: how do you approach valuation? How much art/science?
Ron: I do not spend a lot of time on valuations - this market $2-5M. Series A - $5-10M. If an entrepreneur is negotiating too much, leave the deal. Chemistry with the entrepreneur is the #1 characteristic that determines the deal.
Jeff: completely agree with Ron - their are parameters. There is an opportunity, could be risky, is the valuation appropriate. If going to take too much of the company, will not play. Maybe go find friends and family money.
Flip: hard question to answer - needs to be specific to the issue. Irrespective to this conversation, the company will have to raise more money, and it will be another issue later. Some point, the company will have to determine a market price within the greater world.

Question: convertable debt - good or bad?
Ron, Jeff: prefer to invest at a set valuation, rather than a bridge loan
Jeff: remember - you can start choosing from different sources of capital

Question: semiconductor companies - different time frames? Differences?
Flip: semicondutor cos are far more capital intensive. More complete team, business plan, tangible product - very challenging - and has a longer time horizon, large capital investment. We are talking here about quick-start processes.
What kind of multipliers? Time frame? 5 years

Question: Patent applications - reasonable to finance patents via angels?
Ron: used to funding patents.Jeff: trying to build a company to flip it is like playing Russian Roulette

Ron: LA and New York, mostly media - absolutely innovation
Jeff: established friend that goes to Europe, then I will invest. The challenge is finding engineering talent outside of the The Valley. Wall Street is recruiting the good engineers
Ron: Greylock, Vessimer, Cannon; General Catalyst loves to seed invest.
Flip: high touch business - be geographically local. Some people invest vertically - disadvantage is being on the airplanes. Angels are working out of their own pocket. There are ways - find the people that are working in that industry segment.
Alex: look at investments all along the West Coast.

Question: what do you see as the future?
Ron: Silicon Valley's dominance is only going to get better/stronger.
Flip: the 90s was building infrastructure. People are now discovering new business models. People are finding new models for monetizing the infrastructure. Going to look more like applied technologies versus fundamental technologies.
Jeff: Agree with Ron - looking forward to the next 25.
Alex: can never predict the future, looking forward to working with entrepreneurs

Supernova 2007 - First session

Making Computers Smart: A Dumb Idea?

Nova Spivak - talking about DAML, semantic web, agents - has the metaphor disappeared? There is a need for the architecture.

Barney Pell - agents will act on our behalf - people will have a relationship with their agents (Scott Banister) - conversational interfaces - persistence - agents will have desires

What do we mean by "agent"? Barney means one thing, Nova means something else. There are many different types of agents that exist. At the very extreme, they are fully autonomous. As we move the other way, they become more related to the owner. Truly autonomous agents will not happen very soon (a lot longer). The model of the web is a client server model - autonomous agents are "off on their own".

Kaliya: agents that are built from tools that will work on your behalf.

Shannon Clark: semi-autonomous agents are pretty close at the moment - with the rise of webservices and the rise of agents moving around with AJAX and structured object data.

Barney: the next step: all this great content is distributed, if anyone wants to mix up or mashup - we are making creativity happen once again. When the knowledge of what these things mean, then you (as a normal user)

Psyche - a long time, long-term project - build common-sense like an encyclopedia - DOD review of Psyche - lots of good, deep things - when you put it all together, no unifying whole. Big challenge. But, it has had some successes - and they are opening up: ResearchPsyche for people to access the information to the community.

Noah: Wikipedia (commons) versus Psyche (cathedral) - people are now working on trying to automate the extraction of "knowledge" from Wikipedia. Nova has seen a lot of holes in Psyche.

Noah: voice will not be the end-all, be-all
Barney: we will see voice augmenting other issues, where ATMs helped augment banking.

Barney is discussing that managing user-expectations on services - what the system can do, can not do. If you apply to ideal, you will be disappointed. If you apply to current, then you will be much happier.

Nova: people do not mind making mistakes, but do not like when apps make mistakes for you. Tagging, blogging - all about mistakes.

Web is a fileserver, desktop is the fileserver - Oracle wants to be the data structure. Semantic web is trying to forward RDF - RDF is a lot simpler than a relational database structure. Just a list. Nice, simple, light-weight data-structure. WinFS - Microsoft was trying to build a database, they could recover, but not right now. Maybe later. Google is certainly heavily pushing that. Especially in a mobile world - you will need remove accessible services. The question: how relevant is the desktop?

Barney: if we had a U-DB-RI, then yes we could. But until then, no. Paper on the website about this topic.

Describe something that having the WWDB?
Barney: handling travel issues is *very interesting* - complex constraints, interactive is very interesting. Web DB will not work unless...

Nova; a better form of collective intelligence. We are already highly fragments. Organizations have pockets of inteligence, but are also very stupid at times. When we are adding metadata - how reasoning can be published as knowledge is being published. As the knowledge and the expertise become virtualized, we will get higher forms of AI. The combination of large groups of human beings, with large groups of data and reasonings. Entering the era of "groupminds" - groups of people will operate more intelligently. Groups will act more intelligence that is greater than the parts which has an intelligence that is derived from the interactions of the humans and the interface with the applications. We will become more like "social insects" - the whole will have intelligence greater than the parts.

If google is the new Microsoft, will google provide the semantic web for us? How much is google the new Microsoft in your world?

Barney: google is the NEW Microsoft. But we are talking about a whole new architecture of innovation. What will the new players apply their energies to and solve new problems. Challenge to google: attraction to improve advertising revenue versus innovation that could have ahigh-risk, high-beta. Look at how google has changed the interface (not much) whereas Microsft and Ask has. Big companies have difficulties in changing at times, but do not bet against the bug guys.

Nova: google has the $$ and expertise, but culturally - they won't. They are primarily a statistic approach, whereas the semantic web is all about linguistics and meaning.


New technology: Sparkle (RDF) - will take a bit of time (1yr or 2)

The Hatchery - June event

At the June event for The Hatchery - attempting to build the technology community here in New York City. A number of companies are presenting their business model to the tech community. I was on a call for the first company, SmartMedicalConsumer, which I will get further information on it later.

The other companies - I liveblogged on each company. Also, as a member of the team behind the Hatchery, I would like to ask your opinion on the event. please make your comments and/or suggestions on the blog post so I can help incorporate them into the next event.

FlyUpload - Amir Shaikh
Allow users of any social media to share files online - any form of media they wish. The actual service providers on social networks are being ignored for other providers (e.g. YouTube on MySpace). FlyUpload wants to becomea "media company" - since the Web is destined to become a "media platform".

Team has built a Facebook widget, iGoogle widget, and others.
Competitors - YouSendIt (their previous company), MegaUpload/Rapidshare, Social Networking/Media Giants
They might become a CDN-type play since they have the IP from a previous company.
Current traffic: 1MM uniques on a monthly basis
Amir was somewhat aggressive/argumentative with the judges - but was adamant on FlyUpload providing a more ubiquous form of upload.

MatchMyPet - Ori
The basic concept: a website for matching breeders and owners of pets to trade pet material (e.g. semen) between breeders and enthusiasts.

• Ori's line: P2P - pet to pet, B2B - breeder to breeder
• Currently, most are using it as a playdate for their dogs, social networking, service directory.
• New developments - Breeders MarketPlace, Vet911, Provider Portal, PriciPet (benchmark for pets and breeding material - how much does the puppy cost once you make one)
• Multi-regional (Brasil market next)

Competitive players? We welcome the competition - no other sites are offering this service yet.

Due to other problems with my computer, I was unable to gather the live notes for the other company: LicencedSandbox.

Feedback from the MeetUp site:

At the moment, I grabbed the quotes from the MeetUp page, and would love to hear your feedback.

• Nate Westheimer - "Very high quality companies relative to other events. I do wish there was an opportunity to submit questions from the crowd. Some important questions went unasked."
• Jean - "Tonight's event was very high quality. The presenters were all well prepared, and all had compelling and interesting business ideas. "
• Hermann Mazard - "The panelists were very prepared and knowledgeable and I would love for them to judge every session. They vetted the presentations with pin-point accuracy; this type of exposure will prove exceptional experience for first-time presenters. It seemed however that first-time presenters weren't treated fairly; perhaps I misunderstood the purpose of the event. I thought this was a venue young entrepreneurs could turn too to improve their business concepts and hone presentation skills. The tone of the judges often became more critical than constructive. It was a turn off when the panel/presenter relationship turned adversarial. I think the sessions can be most productive if the expert panel can offer suggestions on how the entrepreneur can improve her/his strategic positioning in addition to pointing out what s/he didn't do or didn't think of."
• Marc Simony - "The panelists need microphones. Presenters should take advantage of the panelists. What's the point of just answering questions; how about asking some?"
• Jon Thornton - "Some time should be given to audience questions."
• naveed - "Perhaps fewer presentations (3 instead of 4) and some time for attendee questions would be nice."
• Gregory P. Tarris - "Need to limit the time for questions since the audience started to get itchy after a while since the questioning period seemed to go on too long.Need to have a microphone for the panel since they could not be heard."
• Arjun Ram - "It was well organized and was good to catch up with fellow entrpreneurs."
• Ronald Bradford - "It was excellent. I've collated my comments, you can read them at http://blog.arabx... "
  
• Shukriyyah - "I thought event was great. I would invite others to the group. I will submit my idea next time."
  
• Craig - "I think the overall quality of the presenters was very high. But I thought the panel became adversarial and this was not constructive. There is never just one point of view and while they were each experts, they should have approached the presenters with more of an open mind. One final comment, audience participation... PLEASE. Keep up the good work! "
• Andre Archimbaud - "I am still amazed at the ideas that abound from this group. The presentations are all well managed and VERY informative."
  
  

New York Tech Meetup - June 2007

Liveblogging (will correct later)

Robin from GoLoCo (founder of zipcar)
GoLoCo - social networks into your travel networks - drive well with others
Put in where you want to go - and checks the average cost of where to go. Community finds ride shares between each other.
Looking for Ruby on Rails engineers (email roy@goloco.com)

How are you solving chicken and the egg problem? - should make sure that it is a community within your community.

Daphne and Bill - Expo TV (brought by Jed from DFJ Gotham)
Video product reviews contributed by consumers/viewers
Demo - shows "Fisher Price Swing" - goes to most played - demonstrates the swing, storytelling review. Celebrates the creator (lisak157) - this one has 179 videos created. Major information on the product visible for all to see. Click and learn more - goes to the retailer and allows the customer to make the decision.

Attaching meta data to the video - ExpoTV already has pre-information/UPC meta data to the content. They have a relationship with Yahoo! Video and AOL Video making it easy for people to see the content.

Questions: if you get scale, how will you scale against/prevent manufacturers from astroturfing content. expoTV will offer ad space and the community will "suss out" astroturfing.
Who are the primary competitors? Most likely: Amazon, Scripts, AOL, etc. We think they are coming - and it is such a big market.
How much would I make if I make videos? Right now, $5/video. It is nothing you would quit your job over (might lose your job) - social impact.
Do you have a multilingual strategy? Yes - there is a transcribing service - they are hiring
Are you planning to selling info to the manufacturer? Yes - we find that the review are very powerful - the new focus group.

Olga - LiveLOOK
WebMeeting solution - no download
And this was not set up for any purpose
Set up from Bell Labs - visual sharing to the next level
Is there a Java download? No - it will work in HTML (you can see the
FogCreek Copilot - what is to stop me from seeing a bunch of numbers? And how easy is it to disconnect? Very easy.
Any sponsorship from Sun? We want to.
Can more than one person watch at one time? Unlimited people to connect
Olga is a former investment banker, Harvard MBA - located in NJ (spill-over from Bell Labs)
How hardware intensive both client and server? Not very - good from Powerpoint, not good for video.

David Weinberger - Everything is Miscellaneous
Book is available in the back.
Three Orders of Organizing:
First order: stuff
Second order: metadata (reduce to card) - still dealing with physical objects - everything has to go somewhere.
Front page can not reflect everybody's interest. We make the best decisions as possible. Need to use physical means to preserve knowledge. Melvil Dewey comes along (spelled his name Dui for a while). He would try to land in a city on a date that ended in zero - very much into decimals. 90% are explicitly Christian.
Librarians try to fix it - but then a whole craziness occurs (Jews for Jesus)
Now we are digitizing everything - and now we are putting all of the data on the floor and mixing in meta data. Now we include EVERYTHING! Postpone the moment for when it gets classified - give users the tools so we can categorize on the way out, not
3. No different between data and metadata - we do not anymore. Kerman Melville - metadata is what we know, data is what we are looking for.
Socialization of knowledge: upsets authority.
Publicly Negotiated Knowledge - wikipedia and tomatoes - knowledege is captured
Knowledge of groups and discussions is more valuable than knowledge of an individual.
Mailing list is smarter than any of the individuals on it. Tagging adding to the metadata. Embedded meaning.
Infrastructure of meaning - able to mine - multigenerational task. We are building it. Not imposed by other people.
Question: FreeBase Project - from metaweb - a project to develop metadata schema - for the particulars of meta data through wiki methods
Why a tag constitutes meaning? Meaning is something that is placed in a why range of meanings. Most meanings are implicit. We are building an implicit set of relationships. Explicit as in FreeBase.

Karen Teng - AdaptiveBlue
Director of Engineering - jumping into the demo: smart browser, personalization and contextualization. Making sense of the digital age. Sipposedly, the semantic web is a computer chugging on it. Our view - people just browse, more smartly. Browser knows it is an album - can do all sorts of things. Actions centric to this attribute. Find pictures of person on flickr.
Page on AOL music - uniformity across heterogenous sites. Have been building the data - limited by the fact that people need to download Firefox and the extension. Slow adoption curve - so came up with SmartLinks. Inline text SmartMenus. Everyone's smart menu is different than everyone else's SmartMenu. SmartMenu allows you to just focus on your favorite sites.

Questions: what happened to your sidebar? Still there - just short preso. As you are collecting pages, you can collect the BlueMarks.
For everything? Yes - for anything/everything. Please log into our site.
What about IE? The limitation is that we do not have the IE extension yet.
How do you make money? Affiliate revenue and allow bloggers to take share in the affiliate revenue.
What is the story of how this came to be? Funded by Union Square Ventures - she decided to do a Javascript/Firefox extension. Hiring jobs@adaptiveblue.com. Have issues about installing on blogs - karen@adaptiveblue.com

Scott: MeetUp is hiring - can compare working at MeetUp versus google. Looking for engineers and product managers.

Max - Mogulus
New York based company - let everyone launch their own live 24/7 TV channel.
Most of the time - it is a linear TV channel. All of the groups - linear television is dead.
We like video on demand and we like linear. Similar to iPod.
Demo - www.groundreport.com - Ground Report TV - CNN video blog channel.
Virtual studio - as many producers as you want.
Television blogging - unbelieveable.
Questions: what's the technology - all Flash-based, patent on real-time streaming. Also free (every 10 minutes an ad) - and there is a pro version (can pay for it). Closed beta with 200 people.
How many channels do you think you will have that will constitute success. LiveCasters, rebuild a full-TV channel.
Where can you pull video from? YouTube and other places which has an API. Syndicated search - as the sites come up, we will add it. Built on Amazon Web Services - building own CDN - incredibly inexpensive price.
Have their own portal - empowering bloggers to their own channel. It is a TV not a player.

James from Hot Or Not/Facebook App
Everyone is now obsessed with Facebook in the Valley right now. Friendster was the ultimate app. Computer, GUI, Internet, Friendster, now Facebook is now the next connection - viral marketing can now happen. Consistant pipes - next step. Facebook is doing it - everyone in th eValley is doing it.
Power of their social graph - easy to get users there to get traction.
Now Hot or Not is now FREE.
More keywords you have, the less you want to read. Now, they have visual keywords (icons) HotLists - Sharing your style
Now, the entire app is on Facebook - same features, hit 1MM pageviews per day in 4 days on Facebook, hit 1MM pageviews per day in 8 days on the web.
Myspace is trying to be the cool desitination, Facebook is trying to be the utility. Facebook is making the bet as a utility, not a destination.

Scott - it will be amazing to see how a company will decide to launch a product on FaceBook rather than the web.

Now the network will commoditize the software. The friend network is the next network that matters.