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Everything is so amazing, and Nobody is happy…

http://www.youtube.com/watch?v=LoGYx35ypus

For some reason the embed feature is “disabled by request”.  Worth the 4 minutes and makes you think……

What up Z?

Just got this from a good friend, Kam Zardouzian.  Here’s the email he sent:

Drove through the worst snow blizzard I've ever been to...was going so slow that I saw this sign, grabbed my phone, took it out of its cover, turned it on, made an espresso, drank it and took this picture that I hope you enjoy cuz I risked my life to get it....

Interesting Bear Market Chart

Innovating our way out

Thomas Friedman has a short op-ed in the NYT today.  I think he hits the mark on how we should be thinking about investments and bailouts in this country.  If we want to come out of this economic crisis in better shape than we go in, we need to invest in people that are passionately solving big problems.

SONY unveils new f**king piece of sh*t

Reducing ‘value’ to an algorithm

Interesting article in the MIT Technology Review about measuring the value of a company (startup) by measuring buzz metrics (Twitter activity, Techcrunch mentions, Blog posts, etc.).  Similar to the YouNoodle or KillerStartup goal of predicting a companies value and ability to raise capital based on the historical biographies of the management/founders.

All of this is complete and utter bullshit.

In the article Feld has a quote that hits the mark: "factors like this dramatically oversimplify the drivers of success (and failure) in entrepreneurial ventures.".

Also in the article is a paragraph quoting Josh Lerner: he has published research showing that an entrepreneur's second startup has slightly better odds of succeeding than her first, and that having one successful startup makes a second startup more likely to succeed. "That suggests there are definitely patterns out there that work," Lerner says. "I'm sure if you were really to punch the data, you'd find there were many other patterns."    This statement on the surface seems to suggest that indeed there are data patters that point to a positive result for YouNoodle.  That unfortunately is at best a weak linkage, and at most purposefully misleading.

The issue I have is that the article and the stance by both the popularity and valuation algorithms is that they completely miss the point of how value is created in ANY company, startups, or otherwise.  I’m actually amazed that MIT paid any real attention to it.  I’d assume that The Onion would be a better source to cover the news on this one.  Not my line, but one I like is Peter Drucker’s: “the purpose of any company is to create a customer”.

Value isn’t created by buzz or by the ability of a founder or manager to raise capital, its created by customers parting with their money/resources because what you have to offer is more valuable than their money/resources.

Back to the article’s usage of Lerner’s research: if you extrapolate that a 2nd time team is statistically more successful than a 1st time team.. then why does the 3rd time team bump directly into the Experience Trap I wrote about a few days ago and decline in their ability to succeed and create value?

Data: who’s your daddy?

A pullback, slowdown, recession or whatever you want to call it, often exposes big opportunities for people and companies that are wise to the bigger picture.  This is exactly what I think is going to happen in the world of online advertising data.

The ad networks figured this out a while ago.  As did the behavioral targeting firms.  The ‘big guys’, Yahoo, Google and Microsoft all own ad networks and behavioral targeting technologies, so by definition, they’ve also sort of figured it out if not implicitly.

What I mean is that online advertising whether its search, display, video, pop-over, pop-under, affiliate, or whatever essentially is a commodity.  The real and tangible value resides in the data (and one could argue the creative).  This data-value contention is what will eventually separate winners from losers and in the process cause all sort of interesting havoc.

My premise is that most online publishers are fickle.  So are the brands.  They seek to get the best performance, period.  To publishers that means quality advertising that generates them good returns on their investment in publishing and engaging readers.  To the advertisers, that means engagement with their brand in a way that (eventually) generates sales.

The trick here is that understanding the performance of what works, what doesn’t, why/why not, and how to improve is the critical component.  The creative process of course has a huge roll to play here, but I think that roll will always accrue to those that are truly creative.  The data piece of this puzzle is much more up for grabs.

Think of it this way:  An ad agency works on a campaign for Nike, they run it across many types of online media.  Its either successful or not.  Who then owns the data about the efficacy?  The agency? The media buying firm? The ad networks? The ‘big guys’?  What if Google decides to take that data and help Adidas?

The fantastic thing about online advertising is that nearly everything can be instrumented, measured, analyzed, experimented-with, tuned and tweaked.  There is a transparency that makes it a compelling place for advertisers and consumers to connect like never before.  The real battle that will wage shortly is behind the scenes and it will be fascinating to watch it play out.

Fun, easy, and everyone can do it

That is.. make fun or snicker at Twitter’s lack of an obvious economic model.

Nearly everyone I talk to that has any sort of intersection with Twitter loves to talk about the company’s apparent lack of an economic model.  I think that’s a bit shallow and overplayed.

My $0.02

1. If a tweet falls in the forest and no one is around to read it, does it matter?

This is probably the largest barrier to a clear economic model.  I wonder what the “tweet read” stats are?  Subscribers and Tweets are 2 underlying components, but they miss the critical point of how value is conveyed.

2. Ads in Twitter search (summize) is dumb

When affinity gets too close the potential for clicking on an advertisement diminishes.  This is the problem with MySpace or Facebook Ads.  Its also the reason Ads in IM don’t work.

3. The beauty of Twitter in all its various access forms/applications is the Achilles heel.

The open-ness of the platform is its beauty and its power.  Multiple inputs, multiple outputs, open and free to everyone.  Awesome! but all that comes with a giant elephant in the room.

My experience may be a-typical, but I see Twitter as an incredibly powerful tool for:

1. Mass one-directional communication

Imagine, companies, emergency services, municipalities, soccer moms, cycling clubs, whatever.  There are real communication needs here – economics can’t be far behind.

2. Customer service

We use Twitter expensively at Lijit for customer service, outreach, responding to inquiries, etc.  It’s incredibly effective – and immediate.  Again, huge value for companies and brands that care about what people are saying.

3. Innocuous contact

I’m not sure how much business development, networking, or job seeking starts on Twitter, but I think a lot.  Unlike other forms of communication, Twitter enables people who don’t know each other to strike up a conversation in passing.  It can grow, but it starts with a ‘curve of the earth’ high-level contact.

oh yeah… one final reason I think most people tweet: Wasting time.  How many people (really) tweet just to pass a dull moment?

Follow me at: http://twitter.com/wtknapp

Ning Badge

The ‘heads-down’ challenge

For over 14 months now I’ve been working like a banshee at Lijit.  We’ve made a ton of real progress, grown the network of publishers exponentially, and built an entire Ad serving platform.  Sometimes its hard to gauge all that progress because I’m so damn close to everything.

Yesterday, we brought in a handful of thoughtful, smart, and experienced publishers from our network.  We took them through the story, what we’ve been building this past year, and what is on the roadmap for 2009.

This morning Louis Gray wrote a fantastic post that really captured the essence of what we’re doing.  I’m on one hand fired up that he not only ‘got it’ but also was able to articulate our value proposition so clearly.  The disappointing thing is that I realized we’ve done ourselves the disservice of not effectively getting our message and progress out to a wider audience. 

It’s understandable that being so heads-down creates a lack of attention to the external marketing of our value.  The good news is that we can fix that.  We just need to pay more attention to it, and get on that shit! Thanks guys for pointing it out.