The Gang XV - I
The Gang - Jason Calacanis, Dan Farber, Marc Canter, Mike Vizard, and Dana Gardner. Recorded Friday, February 15, 2008.
SG-Steve Gillmor
MV-Mike Vizard
MC-Marc Canter
DG-Dana Gardner
DF-Dan Farber
JC-Jason Calacanis
SG-that mike?
MV- I’m here,
SG-who’s that?
MC-it’s mark
SG-I’ve heard a lot about you mark
MC-yeah, did you spell my name right?
SG-ah, no I do but,
MC-well Linda doesn’t know
SG-are you using your speaker phone again?
MC-can you hear me?
SG-I don’t want you to use a speaker phone, I want you to use a regular hand set
MC-well how’s this?
MC-how’s that work?
SG-is that a hand set?
MC-yeah.
SG-excellent
MC-that better?
SG-considerably
SG-who’s this?
DG-hey, it’s Dana gardner
DG-how are you steve?
SG-hey how’s your vacation?
DG-oh, very nice thanks?
MV-vacation? what’s that?
DG-yeah, well… (other voice) … the new version of vacation is that I work less than eight hours a day, but almost every day I work more than two hours a day it’s a vreak, but not really vacation.
MV-I like the saying that says I’m only working half a day… 7 to 7..
DG-yeah right! hahahah (other man laughs with him)…
DG-ah, but a nice change of pace non-the-less I was really burnt out before it and I feel quite a bit better now
MV-mmmm, yeah, they stop… yeah… you stop kissing the dog?
(door opens in background)
DG-ahh, what’s that again?
DG-I said they stop kissing the dog and barking at the way…
?-yeah.. right… one of those, I was fried after the end of the year, and the holiday’s don’t necessarily rejuvenate, it’s like adding insult to injury
DG-I hear ya, this so ahh, yeah we were down in mexico it was nice and warm and ahh got a lot of walks on the beach which is very really rejuvinative, ahhright and yeah I spend some quality time with the family so it’s .. yeah… (interrupted)
SG-now that your rejuvenated (interrupted)
MV-go.. I’m waiting for that Gilmore gang conference in mexico that he’s going to invite me to by th… yeah, Hawaii would be nice she’s got friends with big places (other man)
DG-yeah… haha
MV-when’s that going to happen?
SG-Gilmore gang? ahh.. ahh.. I’m not familiar with that.
DG-hahahah, would steve?
SG-yeah, well, april 9th,
MV-okay, april 9th, we’re going to Hawaii? Cool (in a sarcastic sounding voice)
?-now, april 9th, ahh,
?-april 9th is the week of our
?-we’re talking about… ahh …ahhh… you know… things we can’t talk about. man
?-oh, we can ah discuss nomenclature
DG-yeah
?-yeah
?-alright, well that’s fine
?-hmhmhmh (clear’s throat)
?-whatever…
?-So how’s traffic been steve, I’ve been away for a few weeks how’s the show going ?
?-ahhh… well… I’m ah the last person to be asked that question
?-mmmm
?-but, ahh did you ever hear mark tanner? did you ever hear from that guy who you were trying to paying about my.. ahh.. mania?
?-nope!
?-so I think you should call brother warawitz right now… uh huh?
?-ahhh… well, he needs a couple of days to get started first, right?
?-right, well, it’ll be interesting to see if he plays the same role and google and as they did it in yahoo
SG-well I did… ahh.. make ahh I .. I spoke with someone at google PR ahh… who was pinging me about ahhh androids and there might be a good conversation that they had ?- ?-ushh a on this other issue and I’d prefer to be able to ahh to talk to directly to them rather than to scream at them over ahh the podcast network..
?-uh huh…
?-the.. so..we’ll see whether he said to give him a call in a week if he doesn’t get back to me…
?-alright…
SG-so we’ll see… ahh I tend to be from Missouri on that one
?-and I have talked to David Recordin about that one.. soo… when he talks to Brad Fits next he’ll bring that up
SG-oh, excellent
?-yeah..
SG-who’s on the call?
DF-this is Dan.
SG-Hey, how are you?
DF-I’m good, good morning.
SG-So we’ve got ahh… mark tanner, Dan farmer, mike fizzard, and Dana gardner..
DF-hello everyone…
?-hey Dan..
SG-there may be some.. uhh… additional uhh, uhhh members of the what I’m now calling the the classic gang..
DF-mrrrr…
?-these people over 50..?
DG-wait I’m not there yet…
?-in dog years maybe…
?-ahh… it’s the.. the young blood huh?
?-mhhhmmmhhhh… (man acknowledging).
SG-well, you know the arrogant person, I.. I.. attempted to contact him this week.. uhhh.. through the usual IM channels with no results… so…
did you say the arrogant person, you said?
SG-no, I the errand…
?-oh, ok…
SG-where… was that a slip of the tongue?
?-no, I was just… that was my comedy section…
SG-Oh, excellent.. and then.. uhhh.. Jason indicated that he was going to come but.. uhhh.. we’ll see what happens… and uhh sam moore will not be here I’m just doing this to take care of the end of the show so that I don’t have to stay ‘til the end.
?-Telling everyone to take a four day weekend that’s what’s happening..
SG-yeah, but they’ve been taking a four week holliday.. uh.. but you know.. we’ve had a chance to talk about some interesting stuff the last few shows.. so.. uhh, I’m ..uhhh.. pretty pleased with it even the I do miss the news gang live feel with all the ahh the twiter gangers showing up randomly and having more interesting things to say than we do … right dan farber
DF-I would say so… I would say so…
?-alright..
?-did they ever put up that video we did, or uhh … did I miss something?
DF-no, that will be going up there pretty soon
SG-what was the video that you pointed .. that you sent ..uhh.. mark.. you sent the.. point or two.. what was that about?
?-the morning was about the portability dot orgs so… one of the only community efforts that they’ve asked for was for people to put up uhh create videos on what they thought the portability should be they can’t even decide what portability is.. but ahh…
SG-and what did you say?
?-ummm.. well I said that it should be an advocacy group that finds ahh holes in the specs… creates news cases and helps promote road shows
DG-it’s like open source, but you know, they’ve got this data portability group and the have all the big swingers that are part of the group or at least have signed on participate in some way.. then shouldn’t they be coming up and commenting on the spec and having a very rigorous discussion and uhh,
?-yeah, you two could, and there is no spec… its uhh group that looks at the other specs..
DG-right, but I mean the standards are all out there, but it’s putting them into a ful ar where everbody can say that this we want the world to look like..
?-yeah, advocacy is the… yeah..
SG-so… so.. classically, uhh, these groups are used by the major venders to .. uhh.uhh.. to slow thing sdown and to you know.. wait for market dominance to take over in terms of standards
MV-yeah.. I mean that’s where the naivitee comes in he doesn’t even realize it but uhh did the web page he put up his little html on the top and the number one position as if it were the most predominant standard… hahah
MV-hahhaha
MV-I’ve thought that kind of amusing that he probably even doesn’t even know what he did
MV-yeah right…
DG-I think it should be a rotating set of features on the page…
MV-yeah.. actually how about working code.. that’d be good..
DG-that’d be radical..
?-yeah..
SG-and I.. so dan barber.. what’s going on theis week, next week
DF-well, next week is the blackcack conference which is in Washington DC which is always fun on security and hacking and uhhh we’ll have a lot of coverage over that ahh but this week at least this morning the big news is that amazon’s has three service data base.. whatever.. is on demand infrastructure was down for a few hours…and there are a lot of web 2.0 companies that rely on this infrastructure and so if you’re a company that does green cards uhh, on demand, you didn’t really have any greeting cards today… and uhh…
SG-that’s kindof like the big news is that its been 9999s for a long time..
DF-right and the the context of this is also that salesfor.com had service disruption this week rim was down for a while the blackberry people couldn’t get their intravenous feeds so basically soft cur is the service guess its … infrastructure was the service I.. is fallible just like on premises infrastructures but the expectation is around what amazon is doing, or sales for us are probably unrealistic especially the way they market the services and the fact that you know where they solely are where the service level agreements and I know that amazon does have one some customers bought into it.. ahhh… so amazon’s going to loan them money…
?-bought the tools for enforcing the insoley isn’t actually measuring the amount of down time was and th eimpact back on the business is still kind of shawdy…
DF-well, I don’t think the tools are shawdy.. I think what’s shawdy is the way they think about it example: planned downtime is not considered down time if you can figure that one out.. unplanned downtime would then be considered whre the vendors in this case are on fall… but to me if your donw your down…
?-I was going to wrap some plan around the down time
DF-yeah.. or in the case of salesfor.com the reason they severed disruption was because they were upgrading to newer versions of the software
SG-who just joined?
JC-Jason just joined
SG-oh, hey
JC-hi
JC-hi guys
?-you heard about yahoo or google going down, right?
?-but they do, they do
DF-the various services go down and uh. you know it say the isse is that there’s not as much redundancy built into those ..
JC-yeah… I think that gmail went down a lot in the beginning but it goes down less now and they have a paid version where they offer 99 thousand 9s right now, I have the .. ahh.. gmail don’t
SG-does that seem to you to be any more robust? than the regular service?
JC-uhh.. I will say it is definitely faster and has no downtime, but, you have to be like a maniacal person to even notice it..
SG-well that would be you..
JC-that would be me… ever go onto gmail? hey your thing is not working.. come back in a second and refresh and you come back in 30 seconds and it works fine and you’re like oh, that was weird you basically don’t get those… for 50 bucks a year, per seed. and you get 20 gigs of free space as opposed to whatever… never have to ever deal with storage space problems…
SG-so, dan farber you were saying that there seems to be this is business as usual.. that’s what you’re saying?
DF-everything is business as usual and high expectations for to expect these new sevices are going to have great up time… but if you look at amazon’s 99.9 uptime during any monthly billing cycle… if they don’t meet this service commitment you get a credit… but I cant remember what 99.9% is.. like 8 hrs downtime per year.. or something like that … soo .. if they were down three hours this time then… and its only feb. could but it’s on a monthly basis… in any case this is still the big switch as nick carr likes to call it… still kindof early… we watched the smartphone sweepstakes this week and Microsoft bought danger and uh brothers had an announcement in franckfurt, so all these services are going to be plugged back in themselves for us and umm yahoo and whatever and
?-also it will be interesting to see how so suddenly millions of people are running around calling on these smart phones on these services that to say they can stand up over time
SG-what was amazing was that belive the iphone has 28% of the share of the market, as far as google’s … that’s an extraordinary number…
JC-yeah.. you think its so low and think it would be up to 80 or 90% like these mp3 players
?-hahahah
SG-unbelievable… I’ve got one daughter and one wife on …
JC-you know what it is?
JC-the apple heads really screw up the statistics because…. I own four or five desktops… I own like 8 mac things … I think their statistics are all messed up because the mac people buy like 3 or 4 times the amount equipment… you see that study this week? there are 50% of people that click on banner heads are like 2% of the market, they’re like obsessive clickers… they click on like every add? like people with terrets.. they have to click on every ad … ummm..
SG-I’m trying to get over … I’m trying to feel your pain Jason…
MV-this is something you’re surprised about ?
JC-no, it’s just something they actually did a study on it and its interesting who they did it on.. they basically said… aol did the study… were they trying to tell people banner heads don’t work? that’s how they make their money… oh well their doing behavioral study now? so… they’re trying to… or they’re trying to say the visual value is greater than the clicks…
DG-I would say its why Murdock is the one to spinning out myspace… I don’t think they’ve seen the peak of the market… the value… theres rumors that they’re selling it..
JC-well, if they get 10 billion for it , that means he’d make 20 times his money…
MV-how about.. 5 billion?
MC-well, he clearly needs that money to prop up the wall street journal…
JC-he just hired 100 people they layed off at the new york times…
SG-I asked saul about that he said it’s not layouts as buyouts…
JC-yeah, are they on the line?
SG-yeah, he said he might come… but so far no…
JC-I think they said it will be buyouts if they can find 100 people that want buyouts, or if not it will be layoffs… I think theyre going to start with who wants to get 18mos salary and retire.. which is really nice thing to do
SG-I find the bits.. uhhh.. section… to be quite interesting the way that it … this past week there were several stories that only showed up on bits a markoff storru… its beginning.. to me what the time sis doing .. what the technology space is starting to tip over to the website…
DG-I… think what youre saying si the impact of the bloggosphere is that the newyork times isn’t competeing anyomore just against the wallstreet journal.. the los angeles times leave them out for now… what they’re competing against is all the people in the bloggosphere that are keeping technology better than they are and I think as a result they started things like bits to be faster and more economical and efficient the way that they get news up and it goes through fewer steps to get (coughs)
SG-I would agree with that… when you see markoff famously saying that he has a blog… its called the new york times… when you see him starting to do content which is not going into the prep work.. that’s an excelleration of what they’re doing.
JC-wow, it only took four.. five years… congratulations new york times.. they still can’t even find techs… you click into technology and there’s this tiny little box, I mean told ?-them many times that they need to start they’re own blogs so they should buy bits.com or make mighty bits.com and have that be a destination, and like I told the new york times they were holdings be? Hello… holdings D is more reading value than the wall street journal does.. hello… absolutely by the insiders?
DG-you think they’re only reading uhhh…uhhh.
JC-didn’t say.. didn’t say that… more they’re going to be reading the more because cara swishers and her style of holding the Microsoft is going to get you more insight than… deeper insight than the wallstreet journal’s (wsj) going to be like scrubbed and sanitized… then theres no edge to it there’s no rumor to it
DG-yeah… I think your right but… the fact is that many of thse case the original recording came out of the times and then was refactured by everyone else including everyone on this call probably including cara, obviously sometime they get the wrong scoops and everything but yeah.. its ..no, I think the danger for the journal is that once the story is out.. it gets refractured and they get left behind …
JC-the nyt (new york times) is like the 3 or 4 ski places we can… they only allow skiing and no snow boarding… and they’re slowing dying because they don’t allow snow boarding everyones’ like we love snowboarding….you know it’s like everyone’s saying we love blogs but the nyt is being dragged kicking and screaming and their like we’ll have blogs on the front page like on Tuesdays… will be snow boarding day.. you know.. like in los angeles their resturaunts that you have to wear certain apparel… but these things are going away… some people will hold on as long as they can to get people to wear a jacket to the club… and the clubs are like yeah, wear jeans or whatever… which is what bloggin is… as long as you’re intelligent it doesn’t matter if you do a little free willing…
SG-I.. I think that uuhhh.. what dan was saying about the journal .. the bloggosp.. everyone else is refractoring the story that’s coming out of the journal.. welll… I don’t think that’s true anymore.. I mean… yes, the journal will … I think the value of the journal is for many people is becoming not what… what Jason said about those stories, not so much that they are breaking anything new, or getting edgy or getting deeply into these stories, its more what is the journal take on the issue? is something that is important to understatnd, because how the market and trad. people that don’t use these rapid tools… how do they perceive the story is part of the story
JC-absolutely… and they’re role in the story is part of the story… these journalists are talking to bankers… job markers are calling people up… I was talking to the google guys, and the talking like the journal is the back guys… of course! and so we’re going to pretend it doesn’t exist?
SG-right, well, what I was trying to do was to role up two ideas… one was what dan was saying before how, essentially the these major publications are be refactured… uhh. and talked about and messaged by the bloggosph… I’m not so sure that’s what so dominated
this point … cause there’s not much in the wsj (wall street journal) story that’s worth commenting on, cause it’s such a watered down story than originally …
DF-watered down, it also represent s the status of the deal on record wwhcih is different from a rumor… if you read what errington said, well theyr’ saying this but that doesn’t mean as much as the wsj (wall street journal) said… err..
JC-id ont know… I’m going to disagree.. cause the wsj said yest the nyt like first reported in text crunch.. and all things D… they first reported.. we’re going to have to discredit these people because there’s probably like 20 more people at yahoo that like google and many more bankers than any other reporter…
SG-well let’s not overstate it …
JC-he definitely has more connection sin the valley..
DF-he’s had a very good week.. they have Bradley horrowitz leaving for google.. he was the first with the newscorp-yahoo connection … uhh.. so to steve’s point, yeah…
JC-he wants a bigger role than that in the valley in terms of being on the inside… maybe cara swisher… but those two are the most opiniated the most hated by mainstream media journalists.. but the most read
SG-hang on a sec… first of all I want to hear what I thought was smart… reiterate what I said…
DF-well.. simply that … you know.. I think a lot of what we’re talking about is that the only original authoritative reporting come from and theres still some that comes from the mainsteam media, and I think as mark cantor was saying … when they speak its going to be sourced better because they’re not going to run with it if its speached rumors. on the other hand what we’re seeing a lot lately is that people in the bloggosphere like mike, or people in my group… we tend to get a lot of scoops too.. I think that’s why you’re seeing the nyt in this case which were trying to adopt more of the type of techniques which are used in the bloggosphere which is more like a guerilla newmaking which is you get out there and you move fast you get stuff up fast you don’t’ have to overwrite it… it’s not like some 12 paragraph story.. just give me the 2 paragraphs that count and give me the perspective on it….
JC-lot less Machiavellian stuff going on too you know..
?-well, the transition..
MC-what are we discovering here… there’s more sources for new than… where are we going…
SG-well where we’re going is … what’s going on here is that uhh you know the absorption of some of the dynamics of the bloggosphere in to the mainstream and vice a versa… its not just a … when I see markofff whose been in the past opposed to this… coming out with significant content is the 3rd thing I’ve seen from him in the past month,, one was a long interview..excerpts from steve jobs interview which didn’t run in the paper at all.. it was all on bits and you know… its not so much that ..the ..teh…
DG-right… well someday changed markoffs strategy and now he’s riding on the bloggosphere…
?-well… if that’s true then its’ interesting transition and does… it is a bell weather of cetain things…
JC-it’s a tipping point…
SG-I do want to bring in without trepidation… nobody like me to talk about politics but you know in the political space.. in this campaign we’re seeing just to the point that mark and dan have made… somehow there’s a more authoratitive source here… if you watch the cable networks and watch the gyrations that chris mathews and others go through about this campaign you’ll see that they’re more like tech crunch in like inuindo and rumors and then having to back down from them when it turns out that they’re not correct… then.. uhh.. some of the blogs like david costs and some of these other sources whose only business is this..
DF-so reckless pundintry …
SG-yeah.. it is.. but (haha) you know.. hhah… the quality of the story is improving but the tools with which you can discern what the quality of the story is have yet to be really invented to built out…
DF-there’s been a fundamental shift and it happened on cable because these guys need to fill up 24 hours a day and it happens on the bloggosphere for pretty much the same reason and that is the first story is not the last story that the new reporting and the response is iterative.. and you throw it up on the wall and you poke at it and ….
MC-yeah… except..
MC-I do watch with amusement when CNN has like you know 2 people standing there in front of computeres reading various blogs around the world and that’s their unquote reporting…
SG-and it’s so high tech as well (saying this sarcastically), when there’s dot com its like.. hey.. you have a computer… cool!
DF-look at it the other way … they have to fill up minutes and this is free content they have to fill up their
MC-the truth of the matter is this though… they’ll make a living looking at the bloggosphere because 80% of the world doesn’t have time to be surfing the bloggosphere and checking out this rumor and that rumor and at some point will be looking for some aggregation point that they’ll find more convenient to use… and ultimately that could be what the nyt and all these people wind up doing..
DF-once again the medium is the message and the medium has shifted to where we’re seeing the message right along with it…
MC-so… in some ways there’ probably some pres. of CNN saying “maybe I can fire all the reporters… the bloggers do all the reporting.. and I’ll just have a bunch of editors aggregate at the content”
?-works for me..
?-that’s what Jason does..
JC-uh huh..
SG-right… he did previoiusly…not that he’s going to admit right jason?
JC-(Jason) yeah… dylon made a lot of music and you know, and it all involved microphones so in that sense, yes.. I’m still using a microphone…
DG-is it … 2.0 or something…
JC-you know what? I spend 50% of my time with dweebs from silicon valley explaining to them cause their simple minds have to put something in the bucket (impersonating these “people”) “ is it yahool… is it wikipedia… is it google?” it’s the same thing that happened with blogs… “is it magazines?” … I just build it… I didn’t throw it down and then they’re like … “oh it’s a blog… or a gadget”…
DG-gadgets are widgets now anyway…
JC-I mean people who define, are not the people who are fun…
DF-That’s very “dylonesk” …
SG-that actually sounds more like a rapper…
DG-are we working toward some point or consensus that this is good or bad?
?-God forbid… god forbid… you’ll never go back on vacation…
?-hahah… I actually think it’s good…
?-yeah.. I think it’s all good.. you know…
?-ahhh. ahhhh…
MC-I think in a world in which we consider the wsj and the nyt as the only and primary sources … is a very bad model.
JC-They are historical documents at this point…
MC-yeah… I would say that all this is much much better…
?- (interrupted)
SG-okay… one at a time please…
MV-if you went back to like… you know… go back to the 1700s there used to be 1000s of people out there generating pamphlets with opinions and news and you know been and you know… and going back to the 1860s and that was that…
SG-In King Arthur’s time it was the original… you know…get this… page view model…
?-hahahha…
MC-yeah… so at the end of the day the more sources or new that are out there the more debate the more vibrant the democracy (?) the better…
DG-we’re moving away from this corporatization of the media over the past 50 years and its prob quite healthy…
SG-well (speaking skeptically)… are we sure about that? I think that’s a reach…
DG-no, I really think that its more voices that can be heard and you don’t need to own a printing press… anyone with a computer connection can get out there and publish… and and we’re seeing a dramatic shift and that’s a good thing.
SG-Dan, do you agree with that?
DF-it’s all good because the opposite of that would be bad… which is to say “only you are allowed to publish”….
SG-well, I mean, that change..
DG-yeah, it will be like the task news agency…
DF-we… we.. said the same thing in web 2.0 when anybody can create a webpage and we said look at all those ugly webpages … those lame people out there putting stuff on the web… well that’s fine.. that’s great! Now..
JC-yeah.. well now people know how to get the…
DF-they’ve learned search engine optimization…
JC-they learned how to pick up the phone and do some journalism, and they know how to hit the streets… and that’s what these journalists in their ivory towers are doing , they weren’t on the street they would go strip clubs and party and others would actually do the work… that’s why they got their asses kicked…
SG-hahhaha…
DG-well there’s something to that.. I mean some of these sit back and wait for the phone to ring and the get the scoop and they write it up and they can get lazy…
DF-one thing that’s fun to see is the story that echos throught the top tier thing that starts on (not clear here) and read and write web … and it’s picked up by the mainstream press and then the next day the examiner carries its… so… it echos through… with a certain delay factor, by the time it gets to the local newspaper…
DG-yeah, I wish we had sam whitmore here because I think he would address the issue that the PR people are getting savvy to this… so they know we’re approaching an influencer is a better way to get into the press than to go and knock on every reporters door…
SG-how’s that? by giving my brother to lose all credibility by giving co-owner of a startup?
DF-well… I’m also thinking about this fact that we made a very public statement to move here.. to sf (san Francisco) and it’s all about this insider tract thing and it all opens up and supposedly listening to its user along the way but it’s certainly not doing as good a job as butterfield did with flicker… the theor is that he’s listening to the constituents and giving them the features though I haven’t gotten any of the features I asked for.. soo…
SG-are you in the beta?
DF-yeah… I mean… I can’t …
SG-what does it do? I haven’t umm… I think that’s what you’re talking aobut
DF-so… it’s a stupid little blogging tool and umm.. you can’t go back… cause there’s no archive so… keeping all these videos around but.. it’s just like this stream uh twitter thing these streams of videos come along so whenever you happen to log in you can see what’s going on then but you cant go back more than a few hours..
SG-well you can with twitter… I mean… if it’s up…
DF-right.. so.. the UI is an iterative process but uhh.. with (?) the process of the funding the process of the marketing and its completely based upon the insider silicon valley scam…
SG-hahah… what’s the scam?
DF-ummm.. that we can … exactly what Jason was talking about which is one of these like that… so its like a video twitter and that’s how it was funded..
SG-okay…
DF-I want one of those.. but video… okay ..
SG-alright.. so… what’s different from that and 1000s of other startups..
DF-well, let’s take for instance what I’m doing.. so… my curse was that I was always ahead of the world so I Identified a couple key features that I’m waiting for the world to catch up to before I put out a product that relies up tthose features.. I’ve actually been waiting a few years for MV-way api… and only until the world has those MV-APIs is the product ready… if I put out the product now it would be a waste of money and time and effort… but if I put out the same product a year later exactly at thte right time when amazon is MV-way API and yahoo has opened up, when google implements… when Microsoft triangulates and starts promoting mash ups … when does microsoft use 5 million dollars to build up mash ups around they…. there might even be an equivalent of office… online office! that would make office stay alive…
SG-but what does that have to do with the mechanics or machinations of the seismic funding?
DF-Because its all official marketing… it’s like lets go ride on Evan Williams coat tail… I just don’t buy that… that that’s the way software gets developed..
SG-but do you think that its going to be successful?
DF-I don’t care…
SG-Okay… so you’re just concerned about the ahh.. .
DG-naw.. he’d like to have the six million dollars…?
SG-well yeah… but other than that I mean we’d all like…
DF-okay… I’m sensing like young impressionable 19-25 year olds who start companies so all of a sudden these (?) things go but I’d rather put my money in a young kid because its kindof stylish and hip to do that then to actually you know look for someone… I guarantee you that half these young kids that are coming up with these business plans are not capable of running these companies…
JC-it’s not about the business plan its about the hunger and the drive and the market… someones who’s got a lot of hunger and drive in a market that’s going way up theyre going to figure it out and so adults who are older like to think that they can make a market or make a market do certain things… and they don’t work hard.. and that’s the problem… and now you get to your 30s and you have family and your basically done… youre not going to make a big company… it’s an thing.. where you have to be able to work 100 hours per week… 12 hours a day… and even if youre not a geneous if your working 100 hours a day… your gonna figure it out..
DG-right…
JC-and people who are old, who overthink things and don’t work hard… they’re not going to make something big… and that’s what the statistics say.. you know..
DF-can we really just break it down by age? Isnt there more to it than that?
JC-of course… obviously there’s young people who are not hard working, there are old people who are super hard working too but in general… everyone wants to build an empire when they’re a kid…
DF-but don’t things like what amazon is doing and what coghead and others are doing which is to make it quite easy to put up applications and start to enter a market… you don’t need the big capital…
JC-yeah… but video cameras got cheap but it’s not like movies go better… you know… its still just the drive inside the person….. people are just lazy they don’t get up and write a movie, you know its not like the 60s where people walk out and make a movie… that’s the difference… young people will actually go out and try something… old people… etc.
DF-I understand your point… I’m not sure your analogy is on target but still these people with drive can now go out and do what they want to do and they don’t have to have a lot of capital they can go and do some scripting and put their head together and for little money put it up on amazon and get some marketing and they have a go at it…
SG-yeah but its still a shelf space issue… just because the barrier to entry is lower doesn’t mean your going to get any visibility…
?-theres a lot of wwebsite and a lot of blogs out there that are getting 0…
DG-yeah…. exactly..
DF-just doing an alpha, or beta of a product does not make a company… and that there is something also endemic about these little fly by little features that are floating out there… for google.. so now there’s no one to buy a company from yahoo… yahoo’s not buying anymore so how you going to get profitable? how’s Will Olson going to get his money back?
DG-yeah… that’s some of VC are talking about…
SG-what’d you say Jason?
JC-I said that’s when you hire the adults..
DF-right…
SG-okay.. explain… so who are the adults?
JC-The adults are those people who work 50-60 hours a week… they know how to sell… they know the business…there’s very few phase 1 and phase 2 entreprenuers and …. they back up some phase 1 or phase 2 and once it’s developed they hand it over to some adult.. so that’s how they the cliché… I’m not saying that’s how I think but that’s how these VCs think in large part… and history has proven them correct.
SG-but that’s about optimization of costs… but getting noticed… getting to the public… building viral growth, that is still seems to be the magic that isn’t really understood…
JC-well its pretty easy to understand…you make a good product the world will find it…
DF-and remember these clouds aren’t just great infrastructure their services their also channels… amazon’s a channel.. google’s a channel, yahoo’s a channel, so if you get in there and you make some noise in a sense there’s a partnership in effect where they’re going to help you get out to an audience if there’s a sharing of revenue whether it’s advertising or otherwise , it seems to me that I’m playing the devils advocate here… but I think there a leveling of this previous affect where you had to go out of silicon valley treck… I’m hoping that there’s more of a grass roots opportunity…
SG-well, I mean the sales force is a cloud, for example … they’ve been very successful in growing revenue… by taking their installed base and building applications that serve them, either directly or through a third party developer…
DF-So it’s good (?) to look at it as a channel…
DF-right.. but where do the VCs… where the money in silicon valley get in? In that equation I don’t think they get in there investing in tech for energy and low carbon footprints and the next nanotechs and because frankly the whole business model around ?-software and IT and the internet is not all or nothing and its not just huge volume plays it can be niche… and these people may bring in a couple million per year but okay…
SG-but you know this is where I disagree with mike vizzar was talking about… not necessarily mike but uhh this scuttle about the number of buyers for the start ups is diminished by yahoos calapse I mean certainly that’s true but.. theres a new kind of … the situation with twitter is really a fundamental which is that they are suffering from infrastructure problems uhh because of their success that goes well beyond this consumer service were designed to provide and is becoming much more of an enterprise solution and I know that everybody will disagree with this but in fact we’ll look back at this in a few months and see that this is an infrastructure that is being adopted by corporations because it’s the fasting way in the media business to get a story out and distribute it to the influences that dana was talking about earlier…
JC-it’s more buyers today than ever…
SG-yeah, but I mean that in order for twitter to stay ahead of the collapse that occurs about every forty minutes on the service right now, they need to have some serious investment… the kind that Microsoft made in facebook for example..
DF-yeah, and youtube got all their money to deficit all that growth …
SG-yeah, exactly.. and what I see is that Microsoft wants, once this deal closes, which I think we were all right about this the day that it happened, when it happened… the idea that the blogosphere builds on iterative rumors and stories is also nonsense but once microsoft is in a position to be able to find at this level, they have to do an open source funding where they basically are putting in enough capital for infrastructure to be built out to test the used case, to me their combination of the venture capitalist and the exit strategies buying up the startups… I think that’s going to be much more common… so I think there’s more way to make money than for startups than there used to be…
DF-yeah, I agree with that… and I think you’ll see less of the model where its more about cashing out in three years, but it’s more about a sustainable ongoing business that doesn’t have a high margin, but that has a healthy margin…
JC-its really you know, the decision to sell or not typically goes down to the entrepreneurs the personal financial situation and how the VCs fund is going… you know? The VCs need to get some wind, they might sell early… if they have a lot of wind they might want to hold on, but the entrepreneurs broke they might want to sell early and if the entrepreneur has cash they’ll probably want to swing for the fences…. so, that’s really the determinant..
DF-Yeah, well I also agree, I think it’s what Steve said, this make more sense in an enterprise or a B to B environment than a B to C, a B to C is a mass audience it requires numbers but in business activities you can have small but highly qualified users and they might pay in addition to whatever revenue service there is… I think there’s a whole
?-untapped community for mashups services , even components to use the old phrase in software in the business environment…
DG-yeah, and I think that will happen but I don’t think Jasons point those are multimillion dollar business or billion dollar businesses , that VCs are going to want to jump all over
DF-but they can support a developer or some smart savvy tech people who undersand a business… they can make a decent living…
SG-your BCs are going to do that? I don’t think…
DF-no, no, they won’t… VCs are going to have nothing to do with that..
?-Right…
JC-Its called the dude market, theres a large dude market today which…. there’s a whole history of people starting little things that may get bigger, ummm but uhhh its definitely a fine route to go…
SG-but it still feels like the impact of the VC community is diminishing rapidly…
JC-actually the biggest issue the VC community… well what’s happening is that the mid-teir VC and the low-tier VCs their returns are getting to the point where they’re not going to be better than the stock market but they’re not going to be better… but it’s finally better than buying bonds or you know financial devices so that’s really the issue, they can’t perform in a really big way, ummm, the best deals are going to the best VCs whatever and so the top teir VCs are getting more the good traffic… they know the entrepreneur and then they have power angels who are you know investing in companies and competing with those sort of bottom tier VCs who are used to putting in 2 million dollars.. you know those kind of level people to put the money in and they can make… and then on the top end, the series B and Cs are sliding out 50 million dollars… that’s being done by the public marking people so it’s a major squeeze you know you can’t get in on the edge and the angels are getting in and the best ideas are going to the top arms and the C deals are getting taken by the public firms that want to get on the companies earlier so their not going to be able to go public like they used to but they have a little tiny space in the middle which is where the VCs make money doing the A or B round.
