Category Archives: Silicon Valley

Welcome to the NFL, Fwd.Us

Having spent a long time now in the software industry, I find politics and Washington, DC a curious, mystifying place.  Avoid lobbying, and you’re playing with fire.  Engage in lobbying and expressing a view, and you’ll take the standard slings and arrows that come with engaging with this pit of vipers.

Today’s New York Times Tech Section calls out the outcry from the left that tech-backed lobbying group Fwd.Us has the temerity to use traditional political advertising tactics to promote its pro-immigration reform agenda.  Welcome to the NFL.

The current themes on immigration and what to do with ‘illegal immigrants‘ has been going on in my recollection since at least the early 80s.  Its a stupid, dysfunctional political debate.  The right views illegal immigration as a shibboleth to rally up its base, so no leadership will come from this side.  Unions own the left on this issue, so door #2 doesn’t help at all.  Serious political minds on both sides will state flat out that our lack of an approach on H1B visas etc is brain dead.  But we’re stalemated, so we just have to deal with it.  In the meantime, our crumby education system is failing to turn out enough qualified graduates for the US to remain a long-term leader in a high growth knowledge and information centric economy.

In this environment, Fwd.Us is stepping in, and good on them in my view.  The fact that there’s flack from the left that the NYT points out is, if anything, a sign that Fwd.Us is probably doing something right.

 

 

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300px-PPTMooresLawai

Good Things on a Tuesday

3 quick observations this morning from the land of tech, all fueling a sense that a fun and relatively rosy future is ahead in the industry.  All from the tech section of the NYT.

At a basic infrastructure level, it was neat to read about Violin Memory’s launch of its data storage cards being made available for individual computer servers.  If you spend any time in this industry, you know that  the march of Moore’s Law is going to increase the capacity and capabilities of computing technology, you just need to give it time.  But it’s always fun to see a discontinuity in things like storage, at least it is to me. :)  I’m not sure what I’d need to buy an individual server iwth 1.4 terabytes of flash memory, but man, would I like to see it.  What Moore’s Law giveth, we all find ways to taketh away.  It’s a Good Thing to read about Violin Memory’s launch, hope they do well.

Second, it seems the disruption of Old World Media by technology continues, with the NYT report that TV Pilots are turning to Netflix, Amazon, Microsoft’s XBOX division and others, as opposed to TV networks.  For a while now, traditional media of TV, movies, and music have all been victims of tech’s massive disruption.  They’ve had to respond, with anything.  To a drowning man, everything looks like a raft.  And it’s awesome to see these new channels and customers coming online.  Netflix’s House of Cards was terrific content, and while there’s always a lot of dreck on the tube, you can find a lot of gems–Justified, Breaking Bad, The Wire, etc., etc.  More distribution channels over the web for better content–nom nom nom.

Third, fun to see a headline calling out the “Cult of Evernote.”  I’m a total Evernote Fanboy.  Not necessarily a cult member, I don’t think, as I’ve not yet found a way to use anything in the Evernote “Trunk,” but I’ve got to hand it to them.  An absolutely fantastic product that’s never let me down, Evernote has built a great franchise.  Let’s hope the recent security scare from the weekend is handled well (so far, so good), as a breach of Evernote would be absolutely disastrous to me, and I assume others.

All in all, 3 Good Things on a Tuesday morning, a nice way to start the day.

 

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Where are we?

Over the past few weeks, I’ve noticed two themes in press and analysis around the tech world.

economist cover

Theme #1 : Where has the innovation gone?  This was represented best I think with this week’s cover of the Economist, asking whether we’ll ever invent anything as useful as a toilet ever again.  This echoed folks like Michael Arrington who quipped that he was bored and Peter Thiel who griped that instead of flying cars, we got instead 140 characters.

Usually, when I hear lots of mainstream concern that innovation is dead, that’s when I start getting excited.  The froth is coming out of the market, and the true innovation is out there, lurking, perhaps unrecognized (yet).  But it’s out there, just waiting to delight.

So on one hand, I’m excited.  Bullish about the future.

Theme #2: Thoughts on the Series A crunch.  Lots has been written about the pending Series A crunch.  I basically agree with Michael Maples Jr’s as quoted in a PandoDaily article, where he says (paraphrasing) that every year there are about 10 fantastic startup companies.  Irrespective of funding environment, those 10 are the ones everyone wants to get into and those have little trouble finding funding.  The goal is to start or be involved with one of those companies.

With that as context, I’ve read with increasing alarm the press that prominent incubators are putting out about how much follow-on funding their companies have attracted.  Here was one such announcement just made today.  I can understand why its useful and its not to take away from the work that incubators are doing to help companies get themselves started and off of the ground.   I’ve never been much of a fan of funding announcements though.  I’m more of a fan of announcements of big customer wins, market share achievements, and partners that are committing to your solution.  That’s real traction and where you have those wins, funding will follow.  I do worry that the signal from incubators on follow on financing is going to, if anything, prolong the Series A crunch.

These are just thoughts.  The concrete action feedback, if you’re a startup, is to stay focused on winning in the market place through traction–customers, market share, partners, revenue, growth, etc.

Delight a rapidly growing customer base and the Series A crunch and the concerns on a lack of innovation in today’s tech market will magically work themselves out.

 

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Disruption Daily: Early Thoughts on Facebook Graph Search

Peter Drucker dies at 95

Big tech news today with Facebook announcing its new Facebook Graph Search.  Wall Street apparently didn’t like the news, sending FB down -2.74% on a day the rest of the market was pretty sharply up.  I might need to lean in and pick some up.

I think it is a big tech story for 2013.  I agree with David Weekly’s initial observation that this is a serious ongoing threat to Google.  It’s a pretty obvious step for Facebook and I think its going to pay off for a few basic reasons.

First, it starts to highlight in a very mainstream way how Facebook has, in effect, become the internet for many people.  People are spending so much time on Facebook that it makes sense that FB would invest in convening a “Dream Team” of Google Search engineers to do some semantic forking and NLP stuff to make Facebook the place you go for search.  It makes all the more sense when you consider that Facebook content isn’t really searchable via Google–I can’t go to Google and search for that status update, photo, or meme you posted.  Just doesn’t work.  So an obvious strategic move.

Will it succeed?  I’m bullish.  It’s one of these strategies where Facebook’s chocolate meeting the peanut butter of search seems to fit really nicely.  Certainly it seems a lot smoother of a fit than Google trying to veer into social with G+.  (With Marissa Mayer taking her talents to Yahoo, I think Google’s push into social is perhaps even more at risk, as her fingerprints in terms of user experience and design were so pervasive.)

Second, I think that there are a variety of scenarios where FB search could be quite disruptive in the shorter term–with local in particular.  We are all connected to friends through Facebook, and I’d bet that a lot of accounts have a huge portion of friend connections who are nearby.  The next time you need to know whether that new Chinese place is any good, are you really going to go to Yelp or Google, or would you like to see that 6 of your friends had “Liked” the place on Facebook.  Local is a big kahuna market, and FB has a nice route to going after it.

Third, it’s a winning move in that FB is growing engagement and retention, and search (along with mobile) gives it a new avenue to continue driving this lift.  Surely there’s an opportunity to go for the jugular over time with Google, and this is good for the industry.

A final point on Facebook’s capacity to disrupt Google in a major way… I remember reading an interview of Peter Drucker in 1997 or 1998, around the time that the Department of Justice was lining up to take on Microsoft for anti-trust violations.  The interviewer asked the father of modern management what his opinion was on the anti-trust case. His answer, basically, was that in the case of the technology industry, the market moves too quickly.  When a company becomes as big as Microsoft  the seeds for obsolescence are in a sense already planted.  He forecast that based on Microsoft’s size, some small, disruptive company that no one had yet heard of would step up to take on Microsoft in relatively short order.  Though there’s no reason to think Drucker had ever heard of them in 1998 when the interview happened, it’s pretty clear that he was prophesizing Google.

Now certainly we’ve all heard of Facebook, so this time around is a little different.  But at the same time, it’s not lost on me that in the same week that the Department of Justice announced it would not pursue action on Google after 2 years of investigation–the true sign of being a tech behemoth–Facebook announced its Facebook Graph Search.

 

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Cha-ching! AngelList’s new round

TechCrunch is reporting that AngelList is raising a “big round of financing at a valuation that multiple sources say will top $150M.”  As a first round of outside financing, it’s a whopper.

I couldn’t be more excited for the team and for AngelList.  It’s been a great service, one which has inserted itself into the necessary workflow of any early stage company executive or investor, making it one of the great interest-based networks out there.  I look at AngelList  a bit like a look at Quora–a key new social property that is immensely useful in my everyday life.  Kudos and congratulations.

I am fascinated by what the opportunity this round holds and by the potential of what AngelList seeks to become.  It is riding several important waves, which the TechCrunch article points out–notably the recently passed JOBS act.  Always a good thing.

If you’re a startup, you’ll want to be working on your AL profile.  AngelList will gain an increasing importance for startups, if it hasn’t already.  It’s like keeping your LinkedIn profile up to date–make sure you’re keeping your AngelList profile up to date.

If you’re a professional investor, you’ll want to be working on your AL profile.  Basically the same type of thing.  If you’re not there or you don’t ‘get’ ANgelList, then spend the time to figure it out.

About the only word of caution I’d have is this.  If you’re a startup, then getting on AngelList <> getting investment.  There’s a lot that goes in to building a company and attracting investors.  AngelList postings aren’t going to do it on your own.  If you’re an investor, same type of message.  Early stage investing is risky business.  The JOBS act and other efforts are lowering the barriers to anyone investing in these early stage ventures.  The adage of fools and their money holds true here.

 

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Be Careful What You Wish For : Color’s Cautionary Tale

TheNextWeb broke the news that Apple is acquiring Color Labs.  This closes what was one of the highest profile, most hyped startups of the last 5 years.  In my time in Silicon Valley, I’d say Google’s launch of Google Wave and the launch of Color were the top two in building massive hype that then came up really short.  (Do you all remember when people were *begging* for Google Wave invites?)

And that’s ok.  Sh*t happens. New ideas fail every day.  That’s reality.  What *has* changed I think that the costs of failing are dropping.  A lot.  Moore’s Law, the continuing growth and robustness of cloud-based infrastructure and open source tools and development environment, and the development of methodologies like the Lean Startup, have all combined to help teams run customer development cheaply and quickly.  They can build and vet ideas quickly and when they start raising money, they have a much better sense of what works and why.

Color ran counter to this–it went big.  On every front.

I think the cautionary tale is that you should be careful what you wish for.  I was once invited to judge a startup pitch contest.  This contest was held at Color’s Headquarters in downtown Palo Alto.  This was post Color launch, and the bloom was definitely off the rose.  Half of Color’s office space was allocated now as kind of event space, which is where we held this startup pitch competition.

Anyway, before the contest, there was a long networking cocktail type event.  I remember standing there talking to different startup teams.  One of the teams I talked to pitched me their idea.  I said to them, ‘hey, what you’re doing is interesting.  I am not interested in investing in it [for wahtever reason, can’t remember] but let me know if there’s anything I can do to help.’   One of the founders looked at me, then glanced around the room and said to me, ‘Well, there’s a $42m check sure would help,’ referring of course to the monster Series A Round that Color had reportedly raised.

My response: “Look, be careful what you wish for.  If I had invested $42M in this thing, and now half of the prime real estate in Palo Alto was being used as event space for cocktail parties and startup pitches, I would want to fire everything that breathed.  This would make me so angry.  Go out and build something awesome.  Then the world of investors will find their way to your door.”

Too much of the press and Silicon Valley community celebrates the raising of money.  Indeed, a raise is seen as press worthy.  I’m less convinced that its news worthy–some founder convinced some investor to write a check.  Meh.

To me what is news worthy is winning a customer, getting a really high profile, value added partnership nailed and in market, landing a truly world class exec or developer.  The really important building blocks to constructing a real company are what we should be celebrating.  Not that you got someone to write you a check.  Focus there, and do that great and the funding announcements will find a way of happening.

 

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Silicon Valley is Stupid

David Weekly is in terrific form with his post today on GigaOm Silicon Valley is Stupid Which is Why it Works.  It is a delight to read his writing–David’s energy, intelligence, wit, and wattage come shining through.  The article itself is spot on, and is really a must read, particularly for groups trying to build more of the Silicon Valley ethos into their region, town or country.

One additional element to Silicon Valley that I think is important, at least based on my own experience, is the openness and general inclusiveness of the community.

In most places, the existing social hierarchy–where one went to school, whose kid you are, whether you have friends in high places–exerts a huge influence and can be a huge help (or barrier) depending on where you fit.  Of course, Silicon Valley has an element of this–certainly being on a first name basis with A-listers like a Ron Conway, Mark Zuckerberg or John Doerr would likely confer a some benefit to you: who you know matters.

It’s not as much who you know, it’s what you’re doing.  In my experience, two elements really balance this out.  First, here in Silicon Valley, the core arbiter is really around what you’re doing and what you’re building.  This focus on what you’re doing (and the quality of the people you’re doing this with) overshadows, in my view, whomever you might know.  For example, I’ve talked to people who claim they were the right hands to Larry (Ellison) and then went built businesses for Steve (Jobs) whom I thought were complete yo-yos.  At the same time, we’ve funded successful companies where the founders were basically unknown and unreferenceable, as they had so few LI connections or prior real work experience. Put another way–if you had the choice of being an awesome team working on awesome projects with no network versus being super networked but working on a meh project with a meh team, you’d take door #1 in a second.

Silicon Valley is more open.  The second element is that the Silicon Valley network is as open as I think you’ll find anywhere in the world.  Not only are the most seasoned and experienced investors or executives generally findable and reachable, but the vast majority of them operate with an ethos that they’ve always got to be growing their networks.  This is not to say that barraging them with a spray and pray email form letter is going to get a response, of course.  That style blows and you won’t get far.

But broadly speaking, if you want to connect with anyone, and you work at it thoughtfully, you can get it done.  Concretely, visualize Bud Fox (Charlie Sheen) in the movie Wall Street, who’d chased his prey, Gordon Gekko (Michael Douglas).  You may have to work at it to connect with someone, but with persistence, creativity, and quality, you should to connect to them.

My own experience in Silicon Valley over these last 5 years is evidence of this.  I moved to Palo Alto from Tokyo, Japan, where I’d spent nearly 4 years working for Microsoft in its Japan subsidiary.  Although I’d really enjoyed my time at Microsoft, I really felt that in the tech industry, so much growth and innovative thinking was occurring in SV that I had to get there.  I knew that I wanted to stay in tech, and I knew I wanted to get involved in smaller companies (an easy threshold to meet, given that when I left MSFT had more than 90,000 employees).

In any case, when I showed up in Palo Alto, other than some former Microsoft colleagues who’d moved here, I effectively knew no one.  I had a network of zero, basically.  From day 0, however, I found that I got great opportunities to meet great new people, that vast majority of them were interested in helping me find my way.  This ethos was quite broad, and time and time again, I was struck at how helpful and thoughtful people were in helping me out when there really wasn’t much upside for them.

Nowhere is this more clear than how I actually met David Weekly.  When I lived in Tokyo, working for Microsoft, I was getting really serious about leaving MSFT to head into the great unknown of Silicon Valley.  I was reading about Silicon Valley, and surfing around LinkedIn to learn about people.  I stumbled onto an article about the SuperHappyDev House events that David was hosting at the times.  (They’ve since mushroomed into something much bigger and more broad.)  These were apparently all night hackathons at some house he was retngin up in Hillsborough.  And what struck me was that his LinkedIn profile had an Endorsement from a police officer who had come to, I guess, break up one of these parties.  I remember thinking to myself, “I’ve *got* to meet this David Weekly guy!”  (I also became a user of PBWiki, a great product, btw.)

Anyway, fast forward 3 or 4 years, and I’ve got myself here, helping out at the FounderInstitute, Adeo Ressi‘s global startup incubator.  Adeo and I were basically neighbors when I moved to Silicon Valley, and he couldnt have been more helpful and fun to get to know.  He was getting the FI rolling, and he was kind enough to give me opportunities to speak, facilitate, and at times just help out.

Anyway, I was moderating an evening’s events at the San Francisco FounderInstitute, and there as one of the guest speakers, was David Weekly.  I introduced myself like a total fanboy, though I’m not sure that I asked for an autograph.  :)  I introduced him to the FI founders with my Tokyo story.

A culture where people are most honed in on what you’re building and what you’re doing.  An environment that’s really open, where people tend to want to just be helpful to others in getting out there and building cool stuff.  Those are two more of our additional stupidities out here that make this place so very great.  Thanks David for the great article!

 

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