Silicon Bowery

Game Over...

2008-12-09T12:30:00.002-05:00

I've moved all of my blogging over to Tumblr as I am officially sick of Blogger and wanted something more lightweight.

You can now find me at www.mikebrownjr.com

Skype is Probably Getting Sold...

2008-08-06T16:21:00.006-04:00

I had dinner last night with a good friend from a former life who now works in Asia, running around on the M&A side in the technology space. During our drunken revelry we got to chatting about the fastest growing companies ever in the tech space from a user perspective and concluded that it was probably Skype. So this morning I was browsing through an old "MS General Tech Info" folder on my computer and dusted off a Meeker presentation from 2005 that one of my friends probably slaved over for countless hours. I chuckled as I was reminded that Mary predicted back then that Skype was on track to deliver $200m in 2006 and $500m in 2007, which was pretty close considering the time she made the forecast (actuals were $195 in 06 and ~$380M in 07) . While the company is probably the "Fastest Growing Application Ever" as Mary states, analysts estimate Skype will probably only earn about $550M in 2008 on a pretty low margin and the two companies have not really found many ways to co-exit and create "synergies," as their CFO is consistently telling the street. Overall, this has probably been a pretty shitty deal for the folks over at eBay and the fact that Draper / Rimer & Co. likely paid off a single fund with this deal probably doesn't help.

Don't get me wrong, I love the product and use it all the time. Working for a British-based company and having numerous conversations with management teams in Europe and South Africa, Skype works like a dream and is free! I'd be more than happy to pay a subscription, as I do see a ton of value in the product if it ended up being cheaper than my phone bill every month. That said, it doesn't make sense for eBay to own it. When I think dream combination, I think Danny DeVito and Arnold Schwarzenegger as twin brothers (anyone who doesn't get that reference get a clue and watch the movie Twins.) They work well together, and the combination is genius. eBay and Skype really doesn't do it for me. I just can't rationalize free VoIP calling service with online auctions, and have no idea where they thought these "synergies" could be.

Bringing it back to dinner with my Asia M&A friend, we concluded that in a sale the company will likely go back to the founders, Nicholas Zennstrom and Janus Friis. There is no doubt that eBay will be talking to everyone, telcos included, but at the end of the day I think that these guys get the model and will be able to run it as a standalone business better than anyone else. Key among running it right is really figuring out the best ways to monetize Skype while keeping a cool, friendly and unique brand. I think these guys are best equipped to handle this. Unless it gets killed due to price and/or valuation, I'd put my money on it going back to the Joost guys (no synergies included).

Business Opportunity...

2008-08-05T15:26:00.002-04:00

Having invested in Pikum, I get questions sometimes centering around the legality of real-money fantasy sports wagering in the US as it relates to the UIGEA. There is in fact a specific carve out of the UIGEA for "high-stakes" fantasy sports and it is completely legal for any U.S. citizen to play fantasy sports online for real-money. After being introduced to Chris Russo from Fantasy Sports Ventures recently and chatting with him about this carve out, it's clear to see that this is both a huge market and no real brand has stepped up to the plate to market itself as THE real-money fantasy sports destination online that is secure, safe and legitimate. Not to put any of the existing sites in the market down, but none of them have a brand and most people that I speak to, while curious and interested, are hesitant to put money down on a site that they don't know and think is a scam. CBS Sports comes close, but they don't market the real-money element of their fantasy sports games. While this is not right for Virgin (for obvious reasons) I do think there is someone out there who can make serious coin on a real-money fantasy sports product. With the right brand, this is a serious business opportunity.

Facecard - Kind of Interesting

2008-07-29T16:20:00.005-04:00

A couple of weeks ago someone sent me through an email on a new pre-paid credit card company launching called Facecard. The concept is pretty simple, and supposedly unique in a very crowded marketplace. Facecard, launched by edo Interactive and Mastercard, is a new pre-paid debit and gift card aimed at Gen Ys and Millennials. It's got all the same jazz as any other pre-paid (appeal to parents because they can monitor spending, teaching financial responsibility, etc.) but one thing makes Facecard stand out - "...for this plugged in group, Facecard's unique draw is its online social networking component." Users can create a profile, connect with other members and ultimately electronically send and receive funds from friends and family. My buddy Mike G over at Carrot Creative continues to talk about "social networking fatigue," and this is a classic example of it I think. The world doesn't need another social network. Period. Not even to connect with young people with a concept centering around banking. They have some pretty funny quotes that make the company sound really innovative like "accounts can be managed via the website, by mobile phone or at the good ol' brick and mortar bank. When money is transferred to an account it is available within 15 minutes - that means that kids can call their parents from the mall and have money on their card before they leave the dressing room." Most banks already have these service and this is nothing new. I'll give them props for having a Flickr page, an informational youtube video, donating to a charity, and partnering with organizations like Bonarroo - very Gen Y of them. Although they haven't done much visible marketing, the brand is very fun and hip, which could work in their favor. Overall it's an interesting concept but I wouldn't bet on them.

Unveiling the White Knight 2...

2008-07-28T13:38:00.003-04:00

Big day today for the folks over at Virgin Galactic as they unveil the White Knight 2, the world’s largest all carbon composite aircraft that will take you all up in to space one day. WK2 has a 140-foot wingspan and is the longest single carbon composite aviation component ever manufactured. 270 people, as of today, have made reservations on Virgin Galactic, giving them the ability to go some 62 miles above Earth. Sweet! We've kept this project pretty secret for some time now, and this will be the first time that Richard and crew will have hardware to show the public. Check out Crunch Gear for live updates...

Finally Back in the US...

2008-07-15T17:23:00.003-04:00

What do you notice about this picture? Solar. That's right, I am just returning from Israel, the solar capital of the world. As you can see, almost every home in Tel Aviv has a solar hot water heater on their roof (I think about 90% was the number a credible source told me) and I saw numerous apartment complexes and developments that had traditional solar panels on their roof for power purposes. I was spent about a week and a half visiting the country and meeting with a variety of technology and venture colleagues. Beyond the fascinating history and culture of the country I was quickly able to see that the tech start-up world in Israel is booming. Most notably, I met up with Ouriel Oyahan who runs a really interesting seed fund called LGi Lab, which is a joint venture between Lightspeed VP and Gemini Israeli Funds and dedicated to seeding interesting Israeli start-ups. They are doing some really great things. Overall it was a great trip although I'm happy to be back after a marathon 2 weeks overseas.

Who Knows If It's Legal...

2008-06-13T14:28:00.002-04:00

Interesting article in yesterday's Forbes outlining a company that recently launched in the US called Centsports.com that offers "a legal alternative to online gambling." Here's how the site works. Each user starts off with 10 cents in his or her account, provided by Centsports. (You need only register a name and password.) From there, they can bet on any event for which Las Vegas bookmakers set a line. Once users accumulate $20 in winnings--the equivalent of doubling your money eight times, or striking gold on a 200-to-1 long shot--they can cash out a minimum of $10 and receive an actual check in the mail. (In terms of "consideration," winnings on that initial 10-cent stake don't constitute ownership until actually cashed out.) Losers risk nothing--except perhaps a touch of pride--and get immediately restaked with fresh dimes.

To violate state gambling laws online, you need three major elements present - prize, chance and consideration. According to Forbes, "because Centsports.com doesn't allow users to bet their own stash, no "consideration" is involved, and thus all is kosher." While a very clever move on Centsports part, I tend to believe that the second that money is "yours" and you wager, you are making a bet and that money is now yours. This is a great company as it will most certainly attract the attention of the Department of Justice if more people keep betting on it. The DOJ has clearly been dormant these past few months, and it will be interesting to see how they react to Centsports operation. Hopefully, if the DOJ intervenes it should put more pressure on legislators to figure out the mess they have gotten themselves into.

Big Win for Bigpoint...

2008-06-10T14:50:00.004-04:00

Another win in the browser-based casual gaming market today as Bigpoint, one of the leading providers of high-quality browser-based entertainment, has been acquired today for around $110 by Peacock Equity and GMT Equity Partners. The site offers 20 multiplayer games as well as a range of flash based casual games, all for free. While many in the US market have likely never heard of Bigpoint, their numbers are impressive: Roughly 24 million registered users with 100,000 signing up every day, over 500,000,000 page impressions/month and over $30 million in revenues, growing at 100% a year. Online games and online gaming portals generally garner roughly $4.49/value per registered user and Bigpoint is achieving some very impressive figures relative to this number. Their effective CPM is roughly $5.17 (not including micro-transactions and subs) and their revenue per registered user appears to be roughly $1.28. All in all, the company is doing a solid job.

This deal is definitely on the large side of the year-old $250 million Peacock fund, which has previously invested in IGA Worldwide, a developer of in-game ads. The fund recently got its first exit in the sale of online ad network software firm Adify, which was sold to Cox for $300 million.

While the primary purpose of the capital raise is to help Bigpoint break into the US market and begin to compete, I thought the deal itself was very important as it validates the model of offering free, high-quality content in the browser and publicizes the success of browser-based games. The financial community seems to be accepting browser based games as the future of gaming, and my guess is traditional media companies continue to scoop up gaming properties as they try and diversify their offerings.

The Importance of Consistency...

2008-06-02T20:05:00.001-04:00

Image via WikipediaI just got off the plane in San Francisco after flying Virgin America for the second time. Before coming to work for Virgin USA I was a huge Jet Blue fan for domestic flights, and have to say they consistently got it right every time I flew-from the service to the in-flight entertainment, they pretty much always delivered. That said, I also loved Virgin Atlantic for my transcontinental flights and had pretty high expectations after seeing what Atlantic offered, even for just a coach passenger.

While this is only the second time I have flown Virgin America and overall the service was awesome, it is the second time that "Red," the in-flight entertainment system, totally missed my expectations. The on screen picture basically kept freezing throughout the flight, rendering it almost impossible to watch any TV (there were some killer movies on!). I was clearly not alone in feeling bummed out and some of my fellow passengers moaned and groaned to the flight crew with no success. Overall, this has been a consistent theme when I talk to people about the airline and what they think. It usually goes something like: "they are really friendly, a bit of tongue in cheek humor, solid service and I like that I can buy my food, but the IFE broke and I couldn't watch TV!"

I never thought free TV in an airplane would have such an impact on user experience, but relative to my two flights it seems that if this isn't working people's expectations aren't met. Should consumers take a holistic approach towards judging an experience or is the TV just a small blip? Will customers consider NOT flying VA next time around? In a world where competition is all around us and consumers are highly demanding and selective, it behooves companies like Virgin to consistently deliver a great experience and live up to its brand values. Let me be clear-I think Virgin does a great job already at understanding the consumer and delivering a great experience, however on my two flights I wondered whether people would continue to fly VA after their experiences. While the TV was a small issue for most people that likely will be cleared up soon (no doubt if people complain), I firmly believe it's the small things that count in the end.

Adding College Mogul.com To The Resume...

2008-05-27T21:09:00.004-04:00

There is no shortage of start-up related blogs on the web these days, and I for one find it very time consuming and difficult to get to everything out there. A few months ago two entrepreneurs who I respect highly and am close to forwarded me a link to their newest project, College Mogul, and I was immediately attracted. The concept is simple - a group edited blog written by students and young entrepreneurs talking about "College Moguls" or entrepreneurs under 25 who are starting companies. Generally the focus skews towards current college students or recent grads pushing innovation, which I always love to hear about. As CM's user base and traffic began to grow by leaps and bounds I became more and more interested in being involved with the company. Long in the short, I'm happy to say that starting next week I will join the team as a contributing writer, with my first posts live from the Under the Radar Conference as I look at what young start-ups are coming out of SF. Check out the blog for some interesting reads, and be sure to catch me starting next week!

Is Your Start-Up Not Tech or Health Care Related?

2008-05-19T13:06:00.005-04:00

Working for Virgin, we get a fair amount of requests for capital from start-ups that are out of the VC "sweet spots" of technology and health care investing (broadly speaking). We've obviously started a fair amount of companies in "consumer lifestyle" areas like airlines, comics, space and music and I was involved in the start-up of one of the first healthy vending companies so when we pass on a start-up I always find it helpful to give them some contacts who might be better suited to fund their company. As a result, I get a fair amount of requests centering around the one question that bugs many entrepreneurs looking to start companies outside of the tech and health care space: who are the VCs in the consumer space that would fund my company? After a pretty thorough review I've come up with the list below, primarily centering around venture firms that invest in early-stage consumer retail. Note that while these VCs invest in the early stage, the check usually skews larger than a traditional VC investment in a tech company given the costs involved in these types of start-ups. Nonetheless, I still don't view these guys as larger, later stage, private equity players. Assuming you can raise a large sized seed round and reach an appropriate level in the company's life cycle, these guys look like a great option for your first institutional financing. The list is hardly exhaustive, so feel free to add more if you know of any!

GRP Partners - The guys who backed Starbucks early, GRP focuses on funding innovative entrepreneurs who are looking to change the consumer landscape. Their investment structure seems very flexible from $5M up to $20M for an intial investment. Investments: Starbucks, Costco, PF Changs, Pet Smart

TSG Consumer Partners - Strictly focused on branded consumer products and consumer services companies and generally skew towards later stage investments ($50M-$100M). Investments: Vitamin Water, Voss, Met-Rx, Smart Balance

Stone Canyone Venture Partners - SBIC in California that invests in small/medium sized businesses in the western US, typically deploying $4 to $6 million over the life of an investment. Investments: Red Mango, Gumps, Jane & Co.

Maveron - Venture firm founded by Howard Schultz, CEO and Founder of Starbucks. Enough said. Investments: Cranium, Pinkberry, Eos Airlines

BEV Capital - Strict focus on investing in consumer companies and the technologies that support consumer companies. Very early stage for this space - typically invest $1M-$5M in a company. Investments: Alloy, Le Gourmet Chef, Private Quarters, Additech

Fluke Venture Partners - Generally focused on the Pacific Northwest but opportunistically looks across the US. Tech and healthcare are major focus but they do have a small consumer group. Investments: Starbucks, Coinstar, Drug Emporium, Red Hook Brewery

Roll International - Holding company owned by husband and wife super-team, The Resnicks look to partner with innovative consumer concepts and build them into household names. Investments: Teleflora, Fiji Water, Pom Wonderful, Franklin Mint

Oak Investment Partners - While they are primarily a tech focused fund, Oak has a small but solid retail portfolio that generally skews towards larger investments ($20M-$80M). Investments: Jamba Juice, Office Depot, Whole Foods

New UK Study on Remote Gambling...

2008-05-14T11:06:00.004-04:00

Some new results out this week from the UK Gambling Commission analyzing findings from a remote gambling study it recently took for Q108 participation. The results seem to be an overall positive for the online gambling industry in the UK as internet gaming continues to be the most popular way to participate at 7.1% of respondents, which compared to 6.9% in March of last year and 5.2% in 2006. While the National Lottery continues to make up a large portion of remote gamblers, these results continue to show the popularity of internet gaming in the UK. More negatively, the study also showed that the proportion of adults participating in remote forms of gambling has remained static at 8.8% for the year despite the lifting of restrictions on advertising. While we do see share of wallet move towards internet gaming, overall participation does not seem to be increasing. The study was a national representative sample survey of 8,000 people conducted by ICM research. Not sure I put a ton of stock in these studies (people don' t generally admit to gambling) but interesting data nonetheless

VC Funding into Online Gaming in Q108

2008-05-08T13:56:00.006-04:00

After speaking recently with some colleagues and fellow bloggers I realized that I couldn't answer the question of how much early-stage money was pumped into casual gaming and online gambling startups this past quarter. I recently sliced up Calibre One's Quarterly Transatlantic Tech Investment Review and compared it with funding rounds from Venture Source and found some interesting data points. Worldwide, roughly $74M of disclosed venture capital dollars were invested in casual gaming and online gambling startups in Q108, with the largest deals being Outspark ($11M) and Zynga ($10M). Note that Gaia Interactive also went through two sizable fundraising rounds in Q1, one from Time Warner and a second later-stage deal from IVP. Both round sizes were undisclosed, however I would guess they were in the tens of millions of dollars which would make these some of the largest deals in the quarter and also contribute to the total amount raised. Specifically on the betting side, Hubdub, Bragster, Betnow and Pikum all raised money in the UK, with Betnow and Pikum the only two with eGambling licenses offering real money wagering. The U.S. remains the dominant venture investor, funding almost 80% of the startups in the quarter. For all you startups, Redpoint Ventures was the most active investor in the quarter, funding Gaia, Rebel Monkey and Sparkplay Media. Full data sheet can be found here.

Pikum Goes Live...

2008-05-06T15:56:00.005-04:00

This week marks the UK launch of a new social betting game that we recently invested in called Pikum.com. In the words of Sir Richard "Pikum! is a completely new way to make bets...it's web-based and innovative; you can have fun making bets against your social network, not just the house. So the more friends you have, the bigger the pool!" We love Pikum and have had a great time working with Sean, Johannes and the entire team these past few months. Our investment thesis on Pikum at a high level is pretty simple. First and foremost, we invest in great management teams and Sean and Johannes are bar-none some of the best entrepreneurs in the business with many successes to date in the space. In addition, their product was and still is very compelling to us - combining office pool based betting on any measurable outcome with social networking tools and features is something very unique to the space that we haven't seen done right before. Finally, the casual gaming and egambling spaces continue to grow as more and more geographies open up their market to real money wagering. For all of these reasons and a few more finer points we felt the need to invest! Anyways, you can check out Richard and Helen Chamberlain's Pikums online now and head to the site and make some wagers. Again, we are open for real money wagering in the UK and are working off of a points based system if you bet from the US (sorry but it's not legal!).

Getting A Job in VC

2008-05-05T17:32:00.004-04:00

Seth Levine had a great post today on getting a job in venture capital. While I don't 100% agree with his idea of going to business school (unless you are making a career transition or need to meet fellow entrepreneurs) it's an interesting read on exactly how to get into the highly coveted world of venture capital. Definitely a great read for anyone young who is looking 5-10 years out on getting into this world.

France is Getting Closer...

2008-05-01T10:28:00.006-04:00

Image via WikipediaThe French government has been one of the biggest hiccups in the European Commission's goal of allowing free competition in all member nations as it relates to eGambling. At the moment, all internet-based games involving money are outlawed in France except for the national lottery and pari-mutuel horse betting. However, recent news that the French government may actually adopt legal, regulated internet gambling in France is a positive. Prime Minister Francois Fillon is currently in the process of studying a report it commissioned in November into how the virtual gambling market might be opened up in France. While the report identified three possibilities for implementing online gambling in France I think the best measure from an economic perspective would be to license all games after going through a strict regulatory approval process, similar to other geographies like the UK. As I have mentioned numerous times in this blog, the path the French are taking here is no different than many other countries. In haste, these countries believe that online gambling is synonymous with fraud, underage kids and money laundering and ban all internet-based gambling immediately. Following, they usually receive flak from neighboring states or nations who are in compliance with the WTO and GATS and see it as unfair. After a multitude of studies and commissions proving that serious regulation of internet-based gambling has been successful elsewhere, these countries see an economic incentive to open the market and usually do so sometime thereafter.

Go Chelsea!!!

2008-04-30T17:19:00.004-04:00

Big ups to Chelsea for winning today's game against Liverpool. As many of you know I primarily don't write about sports on this blog but this is the first time in history that a London club has a shot at winning the title and I am a big Chelsea fan. Frank Lampard - what a guy. His mother dies and he puts the nail in the coffin on a penalty shot against the best penalty keeper in the world. They now move on to the Champions League finals in Moscow to face off against Manchester United.

Online Gambling Firms Not Supporting Problem Gamblers

2008-04-28T10:57:00.003-04:00

Some interesting news out of the UK today that over two-thirds of UK gambling companies have failed to contribute to a fund that supports problem gamblers. "It's the online gamblers on the whole who are not contributing," Mr Foster said. "It's difficult to get money out of these people - some of them are operating from overseas." While the issue that the government cannot get in touch with online gambling companies seems ridiculous (you must be UK licensed to operate in the UK), successive culture secretaries have threatened a compulsory levy if the industry does not contribute more. While I am not necessarily against a levy as long as it is carefully implemented, a recent study by the UK Gambling Commission found there had not been any significant increase in problem gamblers since its previous survey in 1999. Either people will not admit to gambling or we are in fact not seeing a significant increase in problem gamblers in the UK. Nonetheless, a mandatory levy could present another significant hurdle for start-ups looking to enter the UK market with an online/offline gambling product.

VCs in Europe Still Crushing It...

2008-04-25T10:18:00.005-04:00

Some good news out of the European VC market today as Calibre One put out it's Quarterly Transatlantic Tech Investment Review. Net net, there was more venture capital was put to work in Q1 2008 in the technology space in Europe than ever before. The previous high of $1.02 billion in Q1 2007 was easily eclipsed by a huge total of $1.33 billion this quarter. The growth was mostly in the UK where the grand total of $592M was more than the previous three quarters combined - and a serious increase on the disappointing $130M in Q4 2007. Some great deals such as SpinVox ($100M) Moneyexpert ($50M) and Seatwave ($25M) helped propel the average deal size in Europe to north of $10M for the first time ever. Another first was that the UK average deal figure of $11.85M was greater than the US figure of $11.59M for the same period. Next time you are reading the FT and starting to feel gloomy look to this for encouragement.

South Africa Getting Closer to Legalizing eGambling...

2008-04-22T17:27:00.003-04:00

Some exciting news out of the world of online gambling this week as South Africa gets closer to legalizing gambling on internet and mobile phones. A bill proposing the licensing of Internet gambling businesses went to the Select Committee of National Provinces recently and is now tabled in the National Assembly for a discussion around advertising and hopefully final approval. While it's not certain whether the bill will pass, this is a step in the right direction to legalize and regulate online gambling in the $2B market of South Africa. Current legislation bans all forms of organized gambling unless licensed. Right now, only terrestrial casinos, bingo parlors and betting associated with horse racing are legal and licensed.

It is interesting to see the same path being taken time and time again by most countries as they, at first, make online gambling illegal and then backtrack and realize that as long as the market is regulated, it serves in the interest of the state to legalize it. Monetarily, a state can earn significant licensing and oversight revenues from issuing eGambling licenses, as in the case of the UK, Alderney and Malta, to name a few (we at Pikum have an Alderney eGaming license). As long as we can protect society from the negative effects of gambling, protect minors from exposure to gambling, and prevent gambling from being a source of crime and a channel for money laundering there is absolutely no reason why countries should not allow online gambling to exist.

Petwave.com Enters Beta...

2008-04-21T18:35:00.008-04:00

For all you pet lovers out there that find it difficult to find trusted information online about your animals, Petwave.com launched today and seems to be the webmd.com for the pet world. In the words of founder Nick Solaro, “It was amazing to me that despite the role that pets play in our lives, there was no one resource on the Internet that I could trust to help me be a better more well informed pet owner.” My family has an awesome dog, Frank, who is a Rhodesian Ridgeback & Rottweiler mix who is constantly going nuts and hurting herself. My mother being the careful one, always thinks the dog is on it's death bed and spends a pretty penny to take it to the Vet to find out out that there is virtually nothing wrong. Gollash, who works with me at Virgin, just told me that he was searching all over the place last night on the web for "collapsed trachea + yorkshire terrier" and couldn't find a thing that was helpful. His girlfriend was a mess thinking her dog was dead. While everything is fine now with the Yorkshire, hopefully this site will be a resource for my mother, Gollash and all the other pet owners out there who don't have a clue what is wrong with their animals (they don't talk if you didn't know that already.) It's not easy figuring out an animal's symptoms, and I do believe this can be a great resource for the 7.1 million US homes who have a pet. Check out the site and give them some feedback. They are only in beta, self funded and the site is a work in progress so be kind.

HR 5767 To The Rescue!

2008-04-18T11:16:00.003-04:00

As many of you know Virgin recently invested in a new kind of betting game, created and played between friends online, called Pikum. Obviously as Pikum is involved in betting and Virgin is an investor I am naturally now an expert on everything online gaming/gambling : ) and have done a fair amount of research into the world of gaming licenses and the legality of gambling worldwide. What irks me the most right now is the fact that the US is essentially closed to online gambling. Yes I know there are gray areas here and the government has basically no clue how it works but the facts remain - the three worst days in history for an online gambler based in the US were the passage of the UIGEA, Neteller closing its doors to US players and this week's news that ePassporte was backing out of the US. As a social betting company operating in Europe, Pikum (and any other betting start-up for that matter) is interested in heading to the US at some point in the company's life cycle and it flat out stinks that we are unable to operate our site as a real-money wagering product here in theUS. That said, this week's announcement that Republicans and Democrats are teaming up to suspend the internet gambling ban is a refreshing step in the right direction. The Safe and Secure Internet Gambling Initiative (HR 5767) proposed to the House this week by Barney Frank and Ron Paul would stop the U.S. government from taking any further steps on regulations that would require all of the country's financial institutions to block internet gambling payments. It makes absolutely no sense whatsoever to turn the financial institutions into the "gambling police," (it would cost them a ton to review transaction by transaction) and also this would infringe upon two freedoms that are important to many Americans: the ability to do with their money as they see fit, and the freedom from government interference with the Internet. While the verdict is still out on this bill, I am crossing my fingers and happy the government is starting to see the light on the effects of the UIGEA.

Zemanta - What A Great Invention

2008-04-15T11:38:00.005-04:00

Greetings friends and I apologize this page has not been updated for quite some time. I have been traveling a great deal as of late and also writing for a variety of other blogs. On one of my trips over to London recently I was able to meet a great group of guys from a company called Zemanta - a platform that is essentially a content suggestion engine for bloggers. I was able to get a brief demo of the product from Jure, one of their community managers, on his iPhone and was immediately captivated. Essentially what the product does is suggest contextually relevant links, pictures, related content and tags as you type your blog posting. While I have no idea how they will ever monetize this, it's such a pain sometimes to search for pictures and add in links to your post. This platform does it at the click of a button. Overall, I am very impressed and you should definitely check it out. The group raised their seed round from T.A.G. and Eden Ventures in January and are off to a great start enabling bloggers everywhere.

Virgin and Google Get Serious - We're Going to Mars

2008-04-01T03:11:00.005-04:00

Greetings from London! It's been quite busy over here for our first Pikum board meeting, but I have had the opportunity to network into the European VC community and meet a few entrepreneurs with some awesome companies/projects underway. That said, we've got another company out of the gate...Project Virgle. Check out the Google Blog for more information on the launch of this. Richard posted to the blog early this morning and it was immediately picked up by Techcrunch. Awesome!

Shout Out To My Buddies At Songkick

2008-03-19T17:14:00.009-04:00

Many of you have probably seen the songkick widget on the sidebar of this blog and wondered what it was. Well, my close friends over the company today are launching the new version of their site, complete with a Battle of the Bands function where you can pit artists against one another based upon various metrics including myspace friends and myspace song downloads, kind of like an Alexa for Bands. I love this company for a variety of reasons. For one, I am a big music lover and finding tour information and then buying tickets on the web for a variety of artists is an almost impossible feat. Going to myspace to find their tour date, then going to another site to buy the ticket, then getting re-routed to yet another site...its just not easy and Songkick tracks your iTunes account to always keep you up to date on shows (like a kayak for buying tickets). Also, I'm very keen in this day and age to finding new stuff, and music discovery engines have totally sucked in recent years. Using your iTunes data, Songkick makes educated guesses about what music you'll like that you may not have heard before, and then suggests local shows for you to attend. The premise is pretty simple - Enter up to three artists, and they will recommend concerts just for you. That is pretty sweet, and the discovery engine is actually very accurate, more so than anything I have seen out there. While these two pieces are good enough, there is much more to come with the site, although it cannot be mentioned right now. Rest assured their model does not just involve these initial concepts and they are keen on growing the music market by making folks more aware of bands/shows/etc. Its just not out there right now and still difficult to navigate the live arena. They've also just announced a Series A round from two sweet VCs, The Accelerator Group and SoftTech VC, which is really awesome and should benefit them going forward. I'm a big fan of their product and think you all should use it too...

Yeah for New York!

2008-03-19T15:01:00.003-04:00

Good article in today's Red Herring outlining Dow Jones' VentureSource research results on fundraising and general VC activity last year. Outside of the big hoopla surrounding whether or not Web 2.0 has reached its peak (great companies with great fundamentals will always find funding) I thought it was great to see an increase in venture activity in the New York Metro region. Their research showed that 2007 brought more deals and more venture dollars to the New York region, which is promising for anyone who chooses the East Coast to form their start up. As someone actively engaged in the community, I can definitively say that New York is growing by leaps and bounds in terms of tech events, active start ups and venture capital exposure.

"Meanwhile, nearly all other U.S. areas studied by Dow Jones—including New England, New York Metro, and Pacific Northwest—grew more rapidly in the number of deals and the amount invested."

We're Live!!

2008-03-17T15:23:00.004-04:00

I have become a big fan of the Facebook fan pages recently and think they are a useful tool for any company looking to keep a broad community involved in what you are up to. If you have ever been through the pain of hiring PR, issuing press releases, etc. you know how sometimes it can be more worthwhile to let a message spread virally through your friends and then their communities. As a free means of interaction and a less "professional" feel, I don't think it gets much better than the fan pages. With that in mind, I'd like to let everyone know that two absolutely brilliant fan pages are launching today: Virgin USA and Pikum.com. Joining each of them below will instantly make you a cooler person.

Virgin USA

Pikum.com

American Pima Cotton Growers Know How to Throw Stunts...

2008-03-14T15:15:00.005-04:00

I swear it's never a dull moment in SoHo. In walking to lunch today I turned the corner onto Houston St. and immediately found myself walking alongside a beautiful cotton field. Yes, there are no cotton fields in NYC, and this stunt in particular was very interesting as I thought their approach rivaled some of the cool stunts that Virgin does to launch it's businesses. The folks over at Supima Cotton were launching a pop-up store in NYC in an effort to build brand awareness as well as develop and solidify long-term relationships, and I thought this approach was a unique way to have people identify with the brand in a cool way. Kudos to the folks over at Think PR and EdMedia for bringing it together.

Only Accredited Investors You Say?

2008-03-13T15:13:00.004-04:00

I've spoken a ton of times to students and first time entrepreneurs about the importance of having only accredited investors in your cap table and recently realized during a conversation that I was doing a terrible job explaining why this is important. For those of you that don’t know what an accredited investor is, the SEC provides a very clear definition. So why are unaccredited investors so bad?

1. Unaccredited investors are generally unsophisticated investors who don't have a full understanding of what they are investing in. This usually means they do not have serious experience investing in venture deals (getting them to sign anything without question can be a difficult process) and generally do not have a lot of money to put to work. Would you enjoy having investors in your cap table that becoming irrational or hostile when they realized they could lose 100% of their investment? If your company is in a difficult situation, you want investors who will stick behind you and do everything possible to help you get out of that situation.

2. If you have done a private placement for your company you will have to jump through many more hoops to sell securities to unaccredited investors. I can't stress enough having the right lawyer (read: experienced with venture private placement) to handle this process for you. If your lawyers didn't get it right on the private placement, your unaccredited investors have the right to rescind their investment in the company. In plain English, if your company is under-performing they can take their money out at any time. Talk about unbelievable risk/reward!

3. Suppose your company knocks the cover off the ball and you are getting acquired, there are a variety of issues that deter the acquirer in the event you have unaccredited investors in your cap table. For instance, if a private company acquires the company for stock, the unaccredited investors need a purchase representative to trade their stock for the acquiring company stock, or the stock needs to be registered or subject to fairness hearings. Alternatively, the buyer will insist that they don’t want unaccredited investors holding stock in their company, in which case the seller needs to come up with cash to buy out the unaccredited investors. Total nightmare. If you were the buyer, wouldn't you just refuse the deal completely unless the accredited investors bought out the unaccredited? That seems logical to me. Public company acquisitions can present similar problems if the stock being issued in the acquisition is not registered. Total nightmare # 2.

Bottom line is that you should avoid unaccredited investors at all costs unless you 100% believe they are sophisticated enough to understand what exactly they are investing in. If you don't, you might end up like these guys.

And the Winner Is...

2008-03-10T17:56:00.002-04:00

Following up on my post last week after speaking at Columbia University, I thought most of the responses were excellent and have narrowed it down to Naveed's idea of creating a personal concierge service. Most of us here at Virgin are keen on brilliant customer service and giving the customer the most value for money - I thought Naveed's comment on starting something along those lines showed a very good understanding of our brand and who we are as Virgin. While I did like Satjot's idea of gyms and Michael's idea of Virgin Bank, we already have both of these products in Virgin Active (our Euro gym chain) and Virgin Money (our US money play). The idea obviously needs to be better grounded and focused for us to ever take a serious look at it, but at a high level I thought that it made sense. Congrats Naveed!

Virgin As A VC: Pikum Announces £2.6M Series A

2008-03-05T07:47:00.008-05:00

I'm happy to finally announce that Pikum has closed it's Series A financing, led by Virgin USA and First Round Capital. Getting the round closed was one of the more difficult things that we have had to deal with (due to obscure Gibraltar laws) but all of us at Virgin, FRC and Pikum are excited to get down to business and move forward towards launching the company. The full funding announcement can be found here. To digress a bit, I am particularly excited to be involved in this deal as it marks the first "unbranded" investment that the Virgin Group has made in a start-up to date. For as long as the Group has been around, we have never really utilized capital to make unbranded investments in early stage start-ups like a venture capitalist. With the funding of Pikum though, we are starting to take a serious look at backing great entrepreneurs who are looking for Series A ($1-$10m) investments. We have focused recently on major, disruptive, consumer facing 2.0 web plays in the gaming/gambling, music and new media spaces and will likely continue to do so going forward. That said - If you are an entrepreneur out there that thinks you have the next best thing for the web, we want to hear from you! Getting back to Pikum, I'll write about our rationale for investing as we get closer to launch, which should be in a month or so. We've come a long way, and I wish Sean and Johannes the best of luck going forward and am excited to be working with them in the future.

Another V USA Company Out of The Gate: Virgin Charter Officially Launches

2008-03-04T07:25:00.006-05:00

After a longer than expected beta, I am happy to announce we are officially launching Virgin Charter today! In a nutshell, Virgin Charter is the "expedia of private aviation booking," but you can check out all the news on the web today for the official launch and description of the company. Scott and Richard were on CNBC this morning and the video can be found here. So why are we so passionate about Virgin Charter? A few reasons. For people who frequently travel charter, there are very few mechanisms for booking private flights online. You used to have to pay $250-$500K to get into the Net Jets and Marquis Jets of the world, and while you were definitely treated like a king, you still had a limited supply of jets and had to hunk up a ton of coin to get into the system. Virgin Charter has no up front fees for interested travelers and our inventory of jets crushes anything in the marketplace today. Safety is also a huge issue when flying private. Always focused on the consumer, leave it to Virgin to partner with the best (J.D. Power and Associates) in the ratings business. Each jet in our system is assigned a quality rating, so potential travelers will know up front how safe and reliable a jet, pilot and cabin crew are. Another great reason we love Virgin Charter is simple economics - we think we might be able to lower the price of a private jet ticket by opening up the market to a bidding system where operators bid on trips. Also throw in the fact that we will have an empty leg marketplace (the reason you pay so much on a private jet is because of the empty leg the jet flys back to its home) and you've got a very efficient way for a charter operator to constantly have its jets utilized. Overall it is a great product, and right up Virgin's alley. This year is definitely going to be an exciting one for Virgin Charter...the future of private aviation has arrived!

To All My Friends At CORE...

2008-02-27T16:00:00.001-05:00

Thanks for coming to the presentation tonight, I hope you took something away and are more informed as to who Virgin is and now have a better sense about the VC fundraising process. Check out my Drop here to get some more materials on fundraising and technology. My presentation is also included. Feel free to upload photos, leave a message, or send an email to the Drop.

With regards to the Virgin Big Idea, I am going to handle submissions like this: Answer this question in a comment below this post (Click on "X Comments" next to the time stamp on the post) "If I was Richard Branson, I would put my money to work starting _____." Overall, if you can't explain the concept to me in a 100-200 word comment then it probably is too difficult for us to understand anyways. I understand this is very tough, but try and be as detailed and accurate as possible in your description. If you say something like "Virgin should start gyms in the US" but don't elaborate then it's unlikely you have given me enough information to call you the winner. I will moderate the comments and announce the winner on the morning of March 5th, and if you win you will get a free hour or two with the members of the Virgin Corporate Development team to discuss whatever you want. It could be your idea, it could be career advice...whatever you want to discuss. Standard legal jargon follows (don't write a comment unless you are clear on this), and may the best person win!

Note: You acknowledge that you are giving your submission voluntarily, and that no promises or representations (either oral or written) have been made to you by Virgin USA concerning your submission, the use of your submission by Virgin USA, or compensation related to your submission.

I Just Might Be Able To Easily Get My Health Records In This Lifetime...

2008-02-21T15:14:00.004-05:00

If you've ever been to a doctor's office like me you know how much of a pain it is having to fill out form after form after form. I would always wonder why it was such an issue to have a standard database for all of my medical information. Sure security is obviously a big issue in this day and age with medical records online - mostly for no serious reason I might add (why are we so lenient on financial records online?) - but couldn't we just get it to a level where I didn't need to fill out a form again? Today Google announced it's pilot program of their health records application, which will hopefully help keep track of your health much easier. In traditional Google fashion, they are targeting the consumer, which is smart and should allow you to better understand your health conditions through time. For instance, I completely forget when exactly my trips to the hospital were, when the last time I got an x-ray was exactly, etc. As Alan Newberger points out, the product will surely help track and determine particular conditions in your life. Kudos to Google for launching this. While they might not win this game in the end, patient directed care is long overdue and it's crazy that your medical records aren't in your possession and you don't have access to them. I can't wait to see what the doctor wrote down about my last five visits to him or, for that matter, my visit five years ago!

The Future of Music...

2008-02-20T16:02:00.003-05:00

David Hyman, the founder of MOG, had an interesting post today about the future of music that I think is very valid. I cant tell you how many people tell me that music consumption is down by virtue of the fact that no one is buying CDs anymore. This is just plain silly! The CD, after all, created inflated value. Music consumption is at an all time high right now, with online sales obviously dominating. On what labels need to do to continue to survive, David writes:

"Here's what the labels need to do: drop that penny per track per stream rate to about 10% of what it is today (that's right - 1/10 of a penny per stream). When that happens, the labels are meeting the market and giving away music becomes lucrative; everybody and their brother starts doing it. The labels turn all of online music consumption into a revenue stream - every site with all-you-can-eat, on-demand music. Thousands of sites innovate and create new value around how to discover and consume music. By my estimate, that's a $250 million per year market for online ad spending alone.

Next, ensure that every streaming track links to the opportunity to download the track in mp3 (with Amazon or whomever) and the labels have created the ultimate promotional machine for mp3 purchasing (for the next 10 years, people will still need to download for their portables and their car). Then slap on a tempting upsell: offer users an ad-free, higher-bitrate subscription service for a reasonable fee (say $5 per month). Suddenly the labels have a shot at staying alive."

While no one knows exactly what the business will look like in a few years, we can be sure that the transition will be pretty brutal (at least short term) as the majors have to adopt a completely different model than they previously had. Note that I do think that this model will still work for indie labels with a few artists, albeit at a smaller level. I trust David's thinking in that the future is ad supported music + downloads + subscription upsell + artist diversification into tours, merch, etc. Hopefully the labels will get smart and make the move sooner rather than later.

Making VCs Efficient at Picking Winners?

2008-02-19T12:08:00.008-05:00

Can technology automate aspects of the venture capital decision-making process? I personally don't think so. Interesting article in today's NY Times on a new start-up called You Noodle that says it can predict the success of other start-ups. This in turn, might give an edge to venture capitalists and other investors trying to decide whether to sink money into an early-stage company. While it is difficult to get details on how the company's model works exactly, what I found interesting is at a high level they say they are analyzing historical data to identify patterns in the founding teams of early-stage startups. I'm skeptical. First and foremost, I believe that identifying a successful start up is more an art than a science. What A.I. could never tell you, for instance, are the soft skills that the entrepreneur has which often times matter a great deal in a start-up (malleability, tenacity, drive to make the product a success, brilliant salesman, etc). Also, any venture capitalist will tell you that no two start-ups are alike. Budgets, staff, timing, etc. all change a dozen times before you reach a level of critical mass and stability. As a result, I don't think the process can be broken down to analyze historical data and spit out an "invest" or "don't invest" answer. Finally, as Paul Kedrosky points out in the article, if these guys really had a successful algorithm that predicted start-ups, why don't they go out and raise a fund to beat us all? I agree that the venture model is inefficient at picking winners, but I'm not sure that an algorithm can solve that puzzle here. On the flip side, YouNoodle.com is actually a solid place to discover and support early-stage companies and university innovation, and because of this I will likely continue to use and support the site.

Immersive Campaigns Are The Future

2008-02-12T15:26:00.001-05:00

Anyone who is a fan of LOST has likely seen the various Alternative Reality Games (ARG) that dominate the show's web presence each season. I for one, am a big fan of the most recent ARG that ABC put out for Season 4, Find 815. It it basically an intricate web of fictitious events taking place online that guides users through a journey to solve (usually) a complex puzzle. In addition, it follows the law of the masses, where it is fairly obvious that a single person could not solve or unlock the ARG however with everyone on the web searching to find clues to the puzzle the journey becomes infinitely easier. A few lucky individuals within an agency serve as the "conductor" of this symphony, releasing more and more data and giving the audience more and more clues to move the ARG along. What I find so interesting recently are the creative agencies that have spawned to serve as the tastemakers and creators of ARGs for major brands such as Microsoft, Hasbro, Jet Blue, American Express, Sharp, Audi, Song Airlines and Stella Artois.

42 Entertainment, essentially the original creators of the ARG, are absolutely killing it in this space. They just finished up a big campaign for Nine Inch Nails and their album Year Zero and recently announced a campaign for the new Batman film, The Dark Knight. I absolutely love that they tie the internet in with real-world events. Lavish shows at the Bellagio fountain, leaking songs on a thumb drive in the bathroom at a concert, and answering machine messages sent to unassuming fans are all the norm for these guys. Hoodlum is another creative agency in the space that is doing quite well. They are perhaps best known for specific campaigns around TV, and are behind many of the BBC ARGs in addition to the Lost series ARGs. Index Ventures and Accel are betting on the space as well, giving $7M recently to a company recently called Mind Candy, which focuses on ARGs for children.

While the word is out on the success of these companies, I think this is the wave of the future as ad spending moves more and more towards the web and companies become comfortable with the ARG model. Know that it is extremely captivating once you get into it. With major companies now signing up with these agencies to allow them to become puppet masters to the masses, ARGs are here to stay. While I'm not sure what's next out of immersive campaigns, but I would bet it would look something like that Michael Douglas movie "The Game," which will be pretty sweet.

Hard Data on the Potential Bloodbath to Ensue at MSFT/YHOO

2008-02-08T17:31:00.001-05:00

Josh Kopelman of First Round Capital had a really interesting post recently showing what potentially may come in terms of employee exodus in the event a MSFT/YHOO merger goes through. It's a very clever analysis where Josh restarted a Facebook ad campaign he had a while back targeting Yahoo and Microsoft employees to get in touch with First Round in the event they were leaving either company to build their own start-up. Essentially, he was just adding another deal flow touch point and wanted these people to contact him for potential funding. The post read, "Leaving Yahoo to start a company? First Round Capital is a leading seed stage investor, specializing in internet based start-ups." The same exact ad was posted on FB for the MSFT community. While it didn't really matter months ago when he started the campaign, its interesting to see that the click rate increased dramatically for both companies when he restarted the campaign once the announcement of the deal came through. A leading indicator for what is to come? We shall see but nonetheless a smart analysis by a great venture capitalist. Data Here

Deal of the Decade = Not Such A Good Idea...

2008-02-04T16:39:00.001-05:00

I have been following the recent announcement of Microsoft's offer to acquire Yahoo for $44.6B and I have to say Steve Ballmer is a pretty crafty guy. The transaction is pretty much a done deal pending regulatory approval as Microsoft has a $300 billion market cap, $20 billion in cash, and more than $15 billion in annual free cash flow. That is pretty much an impossible hill to climb for any private equity player or other company trying to come into the mix and save Yahoo. Note that Microsoft's offer for Yahoo has no financing contingency--meaning that it doesn't have to go out and sell bankers or anyone else on the deal, like a PE firm would (not to mention raise a ton of debt to buy YHOO). It essentially has the enviable ability to just issue some stock to pay for half of Yahoo and write a check for the rest. In addition, that $15B war chest in annual free cash flow might be spent this year on the acquisition, but you can be it will be replenished next year. That being said, I'm particularly interested to hear Steve Ballmer and the rest of the MSFT circus talk about how "synergies" will occur and the joined company will bring in an extra $1B a year. Here are some reasons why I think this deal is a disaster...

--Microsoft has tried hard and failed many times to enter or grow market share with products or services outside of its core. Unfortunately, it will not become the new age GE in terms of conglomerates. MSFT's corporate DNA is not in owning companies for decades or even centuries like GE, it's DNA is based around a single product: Windows. Once this deal closes MSFT will be competing with IBM, Oracle and SAP on the SAAS side, Apple, Sony, Nintendo, RIM in consumer products/gaming/PC platforms, and Google, TIme Warner, Comcast and AT&T in media/advertising/technology. There is a reason that MSFT's Internet Division has been sucking for over 13 years, it is a sideline business that will always take a back seat to the core in Windows and Office. Bottom line - no company can do everything and fight this many wars.

--Google will surely maintain share, and potentially even grow share as a result of the time that this deal will take. I give regulators about 6-9 months with the potential for this taking a full year before close. No one wants to launch risky products during that time frame (new mgmt could fire them easily) and in addition we could see some hiring shift away from MSFT and Yahoo as post-closure terms are uncertain (MSFT could lay off, say 20% of Yahoo's work force)

--Take a look at the share in search that Google has had over the past five years - it's a line that just keeps on increasing. Its fairly reasonable to assume that this line will keep increasing, year after year, until Google has all of the search market (at least here in the US and the english speaking world), and I don't think there's much that Yahoo! and/or Microsoft can do about it. Why is this so? Simply put, because Google does search better than any of its competitors. It's why you and I use the site 10 times a day, and I doubt you or I are going to suddenly stop using Google and shift to Yahoo or Microsoft search one day. In addition, Google monetizes search much better than any of its competitors so they have better results in the right rail and that is becoming increasingly more important in areas like travel and financial services where the organic results are getting spammed up. Ask yourself - what would it hypothetically take to outseat Google in this regard (big maybe)? Something really revolutionary. Not a word in the MSFT dictionary.

--Finally, history speaks for itself in that web services do not get better when they are taken over by a massive company, they actually get worse. Think about it, consolidation of ownership of web services is not a good thing for the internet - it's a huge distributed network of loosely connected services owned and operated by millions. Google gets the future of the internet, whereas I don't think MSFT really does. No one wants the web to be consolidated. If it becomes that, we will just leave to adopt more distributed services, and I trust you will see Yahoo's core users leave in the event that MSFT changes the tune of Yahoo.

Overall I don't think that this deal makes much sense, despite the fact that there is nothing that anyone really can do about it. Just another terrible idea that Microsoft has dreamed up in it's plan for world domination.

Are Facebook Apps Worth Any Money?

2008-01-31T16:44:00.001-05:00

Anyone who is on Facebook knows there are limitless possibilities now that the application developers have stepped up and created some cool FB features for us. Pick your poison - bite a friend, throw a sheep at them, let your friends know how ugly they are or play games like scrabble if you really want to. It's all there. I have a running debate with a close friend of mine, the owner of a pretty sweet web 2.0 health and nutrition company that these sites are not really worth all that much. I firmly believe that valuations in the space have gone bonkers for an "OK" business model and given the fickle nature of Facebook users. In addition, I don't think these sites, even with their large number of users, generate a serious amount of revenue. Nonetheless, we continue to argue about it.

My case and point revolves around a single site, but granted one of the largest: VideoEgg. The company has announced that its ad network for Facebook applications – eggnetwork – has pulled in around $1.5 million in ad revenue over the past five months. Let me repeat; $1.5M in five months. I get that their costs are relatively low, but even assuming the company continues to grow at this amount for the next 12 months, thats only $3.6M in a single year. I'll even give them 500% growth next year (totally unrealistic) and they still only make $18M in the following 12 months. Even worse, the company claims this is huge news, and a “million-dollar pay day” for developers. I think it's definitely good news that they are making money, but a bit overstated for the company that has 150 apps on its roster including Scrabulous, Flixster, and Vampies, which are well know to be some of the most popular on Facebook.

Don't get me wrong, I do think the platform is unique and the companies will be "OK" businesses going forward. That said, I see a serious disconnect in what they are really growing at and $500M valuations. MySpace was fetching similar valuations 2 years ago when it was acquired...but they will probably do $800M in revenues this year and News Corp has already paid off their investment. In the end, Troy Young from Videoegg must be seeing something that I am not...

Charity, Web 2.0 Style

2008-01-30T16:17:00.001-05:00

Many of my friends sit on boards of non-profits and are very passionate about them. Being that I operate to some extent in the technology world, they constantly ask me if there are any ways they can leverage the web to increase traffic to their site, help process donations, and market their charities. I usually tell them I have no idea how to help them and that they will get ripped off using traditional companies...that is until today. While everyone and their brother continues to talk about web 2.0 in the for profit sense, I was recommended a few companies that cater to the non-profit world today by Chris Fralic of First Round Capital (kudos to Chris on his recent sale). For anyone who is on a charity board or is looking for help a charity struggling in this arena, here are a few useful sites that come highly recommended. Remember though, I'm not a non-profit tech consultant, so don't kill me if I missed a great company!

After terribly under-performing the market for a very long time, I can say now that Kintera is a fairly robust product for non-profits needing CRM and CMS solutions. Translated to the layman, these guys basically provide more than 4,000 customers of all sizes in the nonprofit, government and education sectors their technology and services to manage emarketing, communications, programs, services and online fundraising. They have some cool features that can help users, volunteers and employees with the day-to-day of a non-profit operation like e-mail newsletters, advertising on websites and handling of donations. One of the most interesting things I saw on the back-end was a non-profit's ability to track
its user donations coming in and the product looked pretty robust. Using a simple payment function like paypal just doesn't cut it in this day and age, and it always helps to be able to see the effect of an online marketing push or a blast email when it comes to fundraising. Kintera competes with other sites like Wild Apricot and Convio, which both basically do similar functions but from what I see not the whole package.

"Oh hey dude...I heard you had a friend, who had a friend who knows XYZ celebrity...do you think you can hook me up with XYZ's contact info...we'd love to get XYZ to do some work for our charity." Get real. For anyone trying to get celebrities aligned with their cause, specifically for high profile auctions (which every charity wants), I would highly recommend Charitybuzz. In the company's own words "As product development experts, we work with our partners to offer unique, high-end products and experiences that charitybuzz consumers want. Our team of auction experts will work with your charity to deliver sought-after celebrity experiences, luxury travel, unique memorabilia and specialty merchandise — offerings consumers won't find anywhere else...Simply stated, great products partnered with celebrity causes creates "buzz" and generates sales and raises awareness." I am particularly attracted to killer user interfaces, and this product is very focused on the end-user experience and combines all the latest 2.0 features of an auction site.

You knew it had to happen at some point. Social networks for non-profits are here, and Make the Difference Network is one that I find pretty interesting. They presented at the Clinton Global Initiative this past year and drew a lot of buzz around the product. It has all of the standard features of a normal social network, but since it is a cause-oriented social network, it has the ability to connect nonprofit organizations with potential donors and increases awareness for non-profits. There are a fair amount of celebrities on the site that you can pitch your non-profit to and gauge their interest in aligning with your organization, and one of their coolest features I saw was the "wish" function that allowed users to upload specific wishes (for instance a patient with cancer could upload his "wish" to meet a famous baseball player) to the site for review by the community, similar to a facebook feed. Presumably if you were aligned with a certain organization you would see this feed come in and hopefully try and support or grant the wish.

Headhunters Beware - Notch Up is Coming For You...

2008-01-28T10:39:00.001-05:00

Some friends over at Virgin Charter recently invited me to join the private beta of a job site called Notch Up, which I found pretty interesting and unique relative to what is currently in the market. At first glance I thought this was just another run of the mill job site where it takes 10 minutes to type in all your profile information or upload your resume and being that I am not actively looking for a job felt I probably would not be interested...man was I wrong.

The fundamental problem with most job sites is that most of the people that employers are looking to hire are likely not going to be on said job site. If you are a star at your job, chances are your employer incentivizes you to stay with your firm as it's not in their interest to lose you. If this is you, then why would you be looking for a job anyways? It is a pain as everyone knows and very time consuming. Notch Up seems to answer this fundamental problem, as they are taking the approach that companies looking to hire should pay you to interview for a job.

While the beta still needs a bit of working through (hint: faster servers), setting up a profile on the site is fairly easy, especially if you already are a user of LinkedIn. Basically NotchUp just imports your info from LinkedIn, you set a price at which you will interview at, and you are ready to go. In addition to the overall concept, what I really like about the site is how they allow users to set a price at which they will interview at. While most of us would have no clue what price to set here, the company provides a calculator that takes into account your current position, experience, education, and salary to come up with a number. It's pretty fun to see how much you are worth - see the screenshot to the right for my value. A note here: I don't presume anyone would pay $650 to interview me so I actually input this price at $250 just to see what types of companies contact me, if any. According to the site, Google, Yahoo, Facebook, and Powerset are all beta testers using NotchUp for recruitment, which is a great start for them, although I don't care much for those companies interviewing me.

Overall I like the company's aim and focus, and hope it grows to a level of critical mass. Key to their success and what will be most interesting is seeing whether or not companies looking to hire start to reallocate their budgets for headhunters and search firms and utilize some spend on this site instead. It makes sense to me for employers to spend time to seek out high quality individuals on this site versus paying 20-40% of an annual salary to a search firm, but I have been told before I'm crazy, so we shall see.