TC50 has been going on these last few days.  I attended on the final day of presentation which covered new apps in the Social Stream, News & Discovery and Commerce Marketplaces areas.

I love this event for the unbridled, youthful energy of the entrepreneurs and their followers.  For that rare and exciting idea, the momentum generating potential of success at the conference is huge.  Everyone here is networked and more important, willing to shout it out.  If something is compelling, it can catch fire quickly.

The hit rate on quality ideas appeared fairly low.  Are we nearing a trough for high impact web 2.0 ideas?  I think it’s a period for creating tactical businesses.  Those which fill a targeted need and do it well.  Ideas that leverage, or live within, the existing tidal waves — Twitter, Facebook and iPhone/mobile.  No game changers or companies who become verbs.   There are endless and growing number of opportunities in that domain.  I like concepts that package convenience around existing and emerging user behavior.  For example, there was a company that had a mobile app for ordering from concession stands in stadiums and venues.  The conference winner, Red Beacon, a referral and matching service for local services (plumber, personal trainer, contractor) intends to do exactly this albeit in a crowded space.  A related company that is launching which I think will do very well because of its market focus in Save Energy 123.  This site advises homeowners on energy-saving projects and matches them with local products and service providers. Read more »

• TC50 Winners
• Participating Companies

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Yesterday I appeared on Jason Calacanis’s web TV show, This Week in Start-ups.  You may already know Jason from his current gig as Founder of Mahalo and his successful start-up Weblogs, which AOL purchased. 

TWiT is a recent project by Jason and yesterday was Episode 8.  Last week his guest was a Microsoft exec discussing Bing.   

Our interview was focused on both my efforts at Yahoo as well my previous background in start-ups.  There were a few natural questions about the Local space like how we compare to Yelp and more broadly how Yahoo viewed Bing (short answer: it innovates and that’s good for industry).   We also touched on my experience as Founder and CEO of Covigna, an content mgmt start-up earlier in the decade (whew, time flies).   I enjoyed the few budding entrepreneurs who called in to ask questions.   People often ask me about working in a big company setting (I’ve spent time at AOL and Yahoo!) in comparison to start-ups.  Like I said on the show, entrepreneurship is a journey that might include various stops along the way.  It’s not a career path as much as it is a calling.  Besides that, you can find opportunity to innovate in big settings too.  Read more »

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The NY Times was in the news yesterday – this time, a docile development related to its web site leadership. The Times was nominated for several Webby awards. In fact, the company has the largest presence of any organization with nine nominations, including the following categories: Best Visual Design, News, Newspaper, Best Copy and Best Practices.

Good news is a welcome relief at The Times. The “nation’s paper” is no stranger to front-page storylines. It is the center of several dramatic circumstances that involve controversy over future business direction. In a quick recap, there’s been shareholder discord over share price performance, governance structure (dual-class stock) and future strategy in response to the quickly vanishing newspaper business model. These issues are inter-related because different groups (broadly management vs. shareholders) hold different views on how the address the current industry climate and whether the corporate structure needs to be amended to respond decisively and effectively. Recently, hedge funds were successful in securing two seats on the company’s Board through a settlement with management.

With traditional offline revenue declining at a steady pace (January print revenues were down 9.8%), the foreseeable future does not look promising for overall financial performance. But is there light? In other words, as the core declines, how quickly is the revenue loss replaced by the digital business? Clearly this is a question of rates of change. Currently, the company does about $750mm a quarter in total revenue and about 90% is print. If the digital base, which is about $85mm per quarter, continues to grow at 15% annually while the core continues to decline at 10% annually, online will overtake offline 9 years from now. Can you say web 4.0? Even at 20% online revenue growth, we’re talking about 7.5 years for equivalency. Certainly a long way off and sufficient cause for shareholder anxiety. Read more »

• 12th Annual Webby Award Nominees
• NY Times CEO - Bear Stearns 21st Annual Media Conference
• Shareholder Dissent Peaked Last Year
• Newspaper publishers skid painfully into 2008
• Michael Wolf on the The Times
• Boards Give Up Taming Act

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There are a number of tools available on the web that will take your documents and analyze the contents statistically to help you identify patterns. For the investment community, these technologies are not quite ready for prime time. In other words, the potential to glean insights is hit-or-miss. But, I’ve been impressed with a tool launched a year ago by IBM (IBM) called Many Eyes which does some simple stats on document contents and provides the output in various forms. Many Eyes is a visualization tool for data focused on natural language. When the data is words, as in a lengthy 10K form, I begin to wonder if some processing of these words can tell us something we don’t already know.

I’ve taken the contents of Google’s (GOOG) 2007 10K and loaded it as a data set in the visualization tool. Do you think any meaningful insights can be derived? Here’s a summary of my results in this simple experiment.

First, I loaded the Product Section of the document, which lists and discusses about 35 products within Google’s consumer portfolio. Enterprise products (Google Apps, Google Appliance) are covered under a separate section. I excluded terms/words like “Google”, “users”, “web” and others that don’t inform the analysis.

Click here or the image below to see the visualization results.

Some themes that standout include (based on term-frequency):

=> Mobile
=> Maps
=> Gmail
=> Groups
=> News

Nothing here is a surprise, as these are all product categories where Google has a significant product in the market.

Some other terms that stood out to me are “free” and [user] “experience”, two central aspects of Google’s focus and way of doing business.

One valuable thing I learned from these results is the lack of product focus on web 2.0 trends and drivers. There’s not a major role for “social networking” themes like “syndication”, “tagging”, “sharing”, “commenting”, etc. across the product portfolio. Could this speak to weakness in product breadth? Where’s the web 2.0 lingo and product focus?

Next, I upload the Risk Factors section on the hopes it would reveal patterns related to Google’s concerns. Read more »

• One Month Retro on IBM's Many Eyes App
• IBM Wants Many Eyes on Visualization
• IBM's Many Eyes Project Seeks Stats Freaks

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Many large companies find themselves launching new businesses at unprecedented rates in an effort to maintain growth profiles, margins and leadership status. When a company pursues new markets, that can include a variety of corporate initiatives which are distinct from each other. At the highest level in terms of potential value creation is the process of vying for a new category. I call this category-creation or entry. Category-creation is different than finding a new market for an existing line of business.

In the latter case, an existing product or service is re-oriented from a positioning, capability and/or distribution standpoint beyond existing customer focus into distinct and additive customer groups. This can be a complex activity for an established business because success often leads to inertia. In other words, it’s hard but necessary to unlearn certain aspects of an existing success formula in order to make the business mix work for new sets of buyers. Expansion of existing products lines into new customer groups holds a lower risk profile than the pursuit of a new category because some aspects of these new markets leverage existing capability. But product line expansion to new segments also carries lower magnitude of order growth potential. Only truly new categories move the needle in breakout ways.

These two growth strategies are equally important — one should not exist without the other. But it’s far more likely that a company is proficient at market expansion than market creation and development. That’s why I’m going to share some thoughts on the category-creation process. Read more »

• Reinventing innovation at consumer goods companies - McKinsey Quarterly;
• How companies approach innovation - A McKinsey Global Survey;
• The Granularity of Growth - McKinsey Quarterly

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Comcast has a fantastic marketing campaign these days that you’ve probably seen on television or billboards. Building on the “It’s Comcastic” theme, the company is having fun innovating on the English language in ways that speak to digital life.

This involves devising new buzz-phrases like “snurfing” (surfing the web instead of paying attention to your phone conversation) and “Wi-fiving” (instant messaging a friend to celebrate a specific part of a TV program) that represent a merging of different words into one. Comcast refers to it as triples language.

These buzz-phrases resonate with consumers because they speak to real scenarios that people now encounter in an era of digital living.

My favorite is an advertisement about “quizjacking” where a girl is watching a game show while her brother, sitting within earshot of the TV, is looking up answers to questions on his computer. He’s spitting out answers before she has a chance to take a guess.

Siblings annoying each other is always the basis of good humor and this example was sinisterly familiar. The big picture, of course, is Comcast demonstrating how television and Internet consumption go together in ways that are novel.

I think Comcast is touching the tip of the iceberg in this exercise of digitally inspired word-mashups. I’m no William Saffire, but I’d like to add a few of my own based on observations. Here’s one to start (and more down the line as ideas come to mind): SOFTSUMERISM.

Softsumerism —-> The cross-over influence of consumer applications on the design of enterprise technologies; innovation within enterprise systems addressing the convergence of personal and professional identity. Read more »

• Comcast Triples Language Site
• Interview with Head of Google Analytics
• IBM Teams With Second Life To Build Portable Avatars
• CTIA: Microsoft Touts Convergence

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Marc Andreessen recently wrote a useful post about web platforms. It’s a timely collection of thoughts that has spurred conversation amongst executives at several large technology companies, including Yahoo and Google, according to my sources. There’s a lot of ambiguity around this whole issue of platforms so I’m glad that Marc has taken the lead in throwing down a detailed perspective.

Part of the ambiguity stems from the fact that the word is totally hackneyed and over-played. What everyone seems to agree on is that in the distant future there will only be a few big IT companies – all of them with platforms at the core. Here we mean to say that current borders between layers of the technology stack – network, data center, web services, applications, etc. will fuse together to form platforms that challenge traditional lines. Understanding the nature of these platform opportunities, therefore, becomes an issue of survival. The issue has reach beyond traditional web companies, which are the focus of Marc’s ideas, affecting a spectrum of companies ranging from Cisco to IBM to Google. Read more »

• The Web is the Platform
• The Social Network Operating System
• Andreessen vs. Cisco: Web 2.0 platform competition heats up
• IBM Confirms: Google Poses NO Enterprise Threat

Filed under: Google, Web Apps, Innovation, Enterprise Technology | 3 Comments »

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Labs, research and incubation practices within large companies are growing in importance and influence. For this reason, I’m starting to pull together information on how innovation is being pursued by large technology and media companies, while raising some questions about these approaches in the process.

There’s no doubt the sourcing, development and scaling of innovation will become a way of life for the company of the future. Consider the following statistics which speak to the significance of the matter for large companies:

• A recent study revealed that 72% of corporate executives believe their primary source of competition in 5 years will not be the company which is currently the main competitor, according to Bain & Company and the Economist.
• The well-known author Chris Zook, also of Bain, published data predicting that 10 years from now only 1 out of 3 companies will resemble what it looks like today (one of three will be acquired/bankrupt and the other third will redefine the core business).
• By 2000, the average tenure of a firm in the S&P 500 had declined to 10 years from its historical level of 66 years.
  

Yes, the half-life of market leaders is headed in a clear direction and that’s downward.

Since the nineties, a lot of growth has been predicated on acquisition strategies, but even that is beginning to fade as the fail-safe vehicle for entering new markets. Zook studied the success rates of different strategies when the rules of the core business are in flux (business turbulence). Large/transformative mergers yielded a 5-10% success rate in contrast to a 30%-40% for initiatives where companies re-positioned around new platforms. These are defined as hidden, internal assets which are developed into market-facing platforms. That’s a humbling or encouraging comparison depending upon how you look at it.

We’re living in a time where traditional disruption has become more manageable through known and repeatable business processes. Today’s anxiety is being driven instead by the Black Swans, who lurk without prior knowledge, waiting to upset industrial economics before you know it.

So what the models for innovation and the trade-offs between them? I’m starting to look at some current examples and attempt to glean the best practices. Read more »

• Yahoo Research Homepage
• Cisco Reinvents the Corporate Incubator
• Microsoft's adLabs
• Delivering Innovation at BT

Filed under: Google, Innovation, Traditional Media | 1 Comment »

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So, is Facebook a media firm or a technology company? In case you don’t know, the conversation was spurred by Mark Zuckerberg’s comments at the iMeme event (held in SF during late June), which I attended. Mark takes the perspective that the company is in the technology business. This existential-like question is difficult to wrestle down, not only for Facebook but for the industry more broadly.

Facebook’s position on the matter is very timely, and somewhat predictable, since platform is the strategic mantra of the company now. In case you’ve been living on Mars for a while, Facebook is an engine gaining steam despite its existing scale by opening-up. It’s demonstrated the horsepower to haul the core social networking market but is gaining the strength to pull along all kinds of adjacent services. Under the hood, it’s a jumbo-jet. But the plane has many, many empty seats where applications can sit. These applications are, of course, best sourced from the market and third-parties. Facebook’s core has therefore become open to others to wrap around the social networking phenomenon. Powerful stuff. Keep in mind, not all platforms are alike….plenty of companies have developer programs but they’re offering more of a bus-ride, rickshaw experience or mini-jet seat, compared to Facebook’s Dreamliner. Playing enabler, the company has deduced, supports the notion that it fits “lower in the technology stack” than where media businesses reside. Read more »

• Facebook's Plan to Hook up the World
• Repeat After Mark: Facebook is Not a Media Company
• Facebook: “Not Media Business”
• The Best Facebook Apps
• The Race to Buy Facebook Apps
• Should Yahoo Try Again for Facebook

Filed under: User Experiences, Web Apps, Web 2.0, Innovation, Traditional Media | 2 Comments »

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Much of the dialogue about web content over the last few years has focused on the long-tail. That’s been for good reason – the idea was one of those mega-trends with rippling consequences. It came onto the scene in a big way because it nicely encapsulated many diverse developments in the media world. But along the way, we may have lost sight of it’s equally important cousin – mainstream content.

It’s true that mainstream is not what it used to be. But it’s still around – alive and kicking. In fact, you could say mainstream is bigger than ever. If you don’t think so, just consider the popularity of the Super Bowl, which has always been ubber but continues to grow in reach and cultural significance. Last season (2007), it was watched by over 141mm viewers versus 91mm in 1993. The 10 most-watched programs in TV history are all Super Bowls, according to the NFL. This in no way diminishes the advent of the long-tail, though it raises important questions about how these two cousins will get along and work with each other. Things may be in flux, but there’s no doubt they’re two pieces of the same puzzle.

Mainstream is anything that has universal appeal to consumers despite their differences. Differences in taste, preferences and affiliations. In a globalized world, mainstream content will grow not shrink in terms of audience. There will always be a common denominator that links people. In a frictionless medium like the web, where instantaneous diffusion is built into the system, anything that can capture global consciousness will have a field day.

It would be interesting to know how many things in the public consciousness have wide recall factor and whether this figure is growing. In other words, the number of items that enter into pop culture and how quickly. Safe to say that more things go mainstream and they get there faster? Of course, there’s no precise bar for mainstream. Something doesn’t have to be mainstream at the international level to qualify.

If mainstream is still big, then what’s changing about it? Read more »

• Wikipedia Page on Long Tail
• From Niches to Riches
• The Rise and Fall of the Hit

Filed under: Web Apps, Innovation, Traditional Media | 3 Comments »

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