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Meet The People You Follow On Twitter With YC-Funded Conference Directory Lanyrd
Mixtent Launches to Crack Reputation with Controlled Anonymous Commentary
Power-One Opens First U.S. Factory To Make Inverters, Turn Renewables To Grid Ready Electricity
LibreDigital Raises $4 Million For Digital Reading Technologies
ShareThis Now On 1 Million Websites, Appoints Former Yahoo Marketer As CMO
First Drive: 2012 Ford Focus, A European Car Meant For The World
IntoNow Can Hear What You’re Watching On TV. The Media Check-In Game Just Changed.
The White House Partners With Steve Case, Facebook, Intel, And Others To Jumpstart Entrepreneurship
Unirac, Canadian Solar To Build 30 Megawatts Of Renewable Energy In Ontario
Exclusive: KIT digital Acquires KickApps, Kewego AND Kyte For $77.2 Million
An Open Letter To All Companies Who Grew Revenue By 200% Last Year
AOL Europe Acquires Branded Video Network goviral For $96.7 Million
Plentyoffish CEO: We Were Hacked, Almost Extorted – So I Emailed The Hacker’s Mom
We’re Now Watching The “You” News Network
Live Facebook Press conference: Check-in Deals launches in Europe
Rumors: Facebook Using Face.com’s Facial Recognition, Acquisition Offer Rebuffed
Quora Backlash Slams Head First Into Quora Backlash Backlash
Quora Is Really About A Better Wikipedia, Not Robert Scoble’s Hopes & Dreams
Bill Keller vs Wikileaks: Goodnight, Julian Assange, And Bad Luck
WikiLeaks Founder Assange Tells 60 Minutes: “Our Values Are Those Of The U.S. Revolution”
The Triple Crown
Should You Really Be A Startup Entrepreneur?

Meet The People You Follow On Twitter With YC-Funded Conference Directory Lanyrd

Posted: 31 Jan 2011 09:00 AM PST

In the same events planning space as Plancast and Upcoming, Y Combinator-funded Lanyrd launches today after this weekend’s game changing news of Yuri Milner and SV Angel’s 150K investment in every Y Combinator startup. An IMDB for conferences, Lanyrd has the ambitious goal of becoming the one stop shop for all conference data by pulling in information from the Twitter accounts that you follow.

At first glance Lanyrd is pretty comprehensive. Whether past or future event, a Lanyrd conference page shows you a list of speakers, attendees, and trackers and their respective Twitter accounts as well as a list of sessions, a link to the actual conference page itself, the ability to save the event to iCal and Outlook, a link to coverage, separation by topic, related books, as well as permalink page which enables you to share the Lanyrd conference page with your friends (Whew!).

Upon logging into the site with your Twitter account you immediately see a list of conferences your friends are interested in and perhaps more impressively can view and edit your own conference profile page which presents the number of conferences you’re spoken at, other speakers at those same conferences, future conferences you are attending as well as view coverage and materials like videos audio and slides, using Embedly. Says co-founder Natalie Downe, “We want to make ourselves useful across all topics, and plan to be useful before an event, during an event and after an event.”

Lanyrd is pretty amazing if you’re a conference heavy-hitter and have heretofore have not seen all your conference attendance information in one place. Without having to buy a conference database, its data pool is pretty strong with over 1169 conferences added and over 1/3 of active users having made at least one edit to the site. There’s also an API and Javascript “Upcoming events” badges in case you want to bring back all that carefully complied data to your own site or app. A newly launched email feature brings your event info and updates to your inbox without even having to visit the site.

Founded by Django creator Simon Willison and his wife Downe after finding themselves stuck on their honeymoon in Casablanca with nothing else to do, Lanyrd aims to get you off the computer and “meet the people you follow on Twitter.” Says Downe, “Our success criteria is when someone goes to an event and meets someone they wouldn’t have.”

The two are excited about growing their audience and are especially psyched to have the added encouragement of the Start Fund investment. Says Willison, “It’s a pretty amazing deal, which is clearly designed to be hard to turn down. We’re treating the money as additional runway: We now have a full 18 months to focus on improving our product and building a business around Lanyrd.”

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Lanyrd

Y Combinator

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Mixtent Launches to Crack Reputation with Controlled Anonymous Commentary

Posted: 31 Jan 2011 08:59 AM PST

I’ve talked to a dozen startups in the last month who are trying again to crack the tricky problem of reducing who you are personally and professionally to a reputation score that can’t be gamed and isn’t just a outlet for trolls and haters. I’m not convinced it can be done, as I argued with Klout’s Joe Fernandez, and beyond that I’m not convinced it should be done. Social media has already given plenty of people an unhealthy obsession with measuring their self-worth in friends, followers and retweets. Anyone who faces a mob of angry commenters for every word they blog knows the truth: The Internet is too big to take even a large number of haters too seriously. Even hundreds of comments saying “YOUR AN IDITO!” are still just a tiny angry minority, who just wants to be heard.

But there are some instances where getting closer to capturing reputation online could help solve real world problems, and most are in the professional sphere. After all, I don’t have to care what a guy on the street thinks about me, but if that guy on the street is friends with the hiring manager for my dream job, suddenly his opinion becomes hugely relevant to my life. The workplace is the one place where people’s opinions of you actually matter. I’m actually writing about two new companies today that I think get closer to solving this problem than LinkedIn has, and might be worth the foray into the seedy world of inviting your peers to judge you. The first is Mixtent.

Mixtent is founded by a Venezuelan-born entrepreneur named Jonathan Gheller, who relocated to Silicon Valley after selling his second company. His goal is to make the labor market slightly more efficient on a national level, and fully expects it to take a decade or more to get there. This is not a guy out to flip a company, and he’s already spent years honing Mixtent’s reputation algorithms. (The company has allegedly raised money, but Gheller adamantly refused to give me any information on who it was from and how much, saying he thinks there’s too much attention in the Valley paid to who is backing you, not the product itself. I argued not disclosing it only made it more of an issue. Take that bit of weirdness however you wish.)

Here’s how the service works: You sign up for Mixtent, which is an app on top of your LinkedIn profile. Mixtent scrubs your profile to parse all kinds of information about you, such as how well you know certain contacts and who are your most direct peers. Then it polls other Mixtent users you know on specific job-related questions about you and those peers. Your peers can vote on you anonymously, so you don’t have the LinkedIn issue where people glad-hand recommendations for one another, but there is no way to enter text so the site doesn’t evolve in the defamation morass of Honestly either. Also, unlike Honestly (born as Unvarnished), you have to opt-in to Mixtent, and if you don’t like the results, you can opt out. I think that’s essential to any reputation system. If you build a good enough product, people will use it without being bullied or forced into it.

Mixtent gives you your own dashboard that ranks you against all your peers, but also provides some useful information, like whether superiors tend to like you better than peers, or whether people who work for you are the ones who find you insufferable. I find the idea of an absolute professional rank silly, but the latter is potentially constructive criticism that you could act on. The eventual hope is that Mixtent learns enough about you by the way you vote and others vote about you, that it knows what kind of employee you are and can tailor job recommendations for you, not just your resume. For instance, it could know if you are too autonomous to work well under a micro-managing executive or too thin skinned to work ~~at TechCrunch~~ in certain office environments.

Whether Mixtent gets there is a huge unknown but it could represent another leap up in the ability to hire online, the way LinkedIn used real world relationships and links between people to dramatically leapfrog job boards like Monster. Labor is such an inefficient market and a problem companies will pay handsomely to solve, so you only have to make things slightly better to build a decent-sized company.

What concerns me about Mixtent isn’t the gargantuan scope and challenge of the problem it is trying to solve. It’s that it’s designing a solution for a labor market that may be more polarized than ever before. On one hand there’s Silicon Valley– where an intense war on talent is the single biggest challenge every tech company faces whether its Google, Facebook or a no-name startup. There are simply not enough people to fill certain jobs in the Valley, and salaries and golden-handcuffs are getting to insane levels. Then you have the real America, where a large number of out-of-work people just can’t find jobs anywhere. Those are two wildly different problems of supply and demand. The former, could be helped by a site like Mixtent, especially since programmer jobs are more quantifiable. You can’t fake an ability to code.

But the latter isn’t a problem of inefficiency– it’s a deeper problem of a disconnect between the jobs that are empty and the skills people have. Mixtent isn’t going to solve that. My advice for Mixtent would be to focus on the problem it can solve, that it deeply understands as a startup based in Silicon Valley first, and then try to broaden to other industries.

And even in the Valley, I’m not sure all professions lend themselves to this kind of comparable voting method. For instance, only an entrepreneur whose business has hit the fan can truly judge how good a venture capitalist on his board is at his or her job, and that’s not a big enough sample size for most VCs. Ditto personal assistants– one of the hardest positions to hire for. Similarly, I’d never sign up for Mixtent, because I’d argue sources are the better barometer for how well I do my job, not reporters at other publications who have no idea how hard I may work to break a story, or other times when a scoop just falls in my lap. And even with sources, if a reporter is doing their job well, there should be a healthy amount of hate for them. Ditto anyone in sales. I’m not convinced the algorithms can parse nuances like that.

Still, I think people are hungry enough for self-metrics, they’ll flock to the site, and Mixtent’s future will be interesting to watch. It may come one step closer to solving reputation online and applying it to an actual problem, without giving another megaphone to haters.

Power-One Opens First U.S. Factory To Make Inverters, Turn Renewables To Grid Ready Electricity

Posted: 31 Jan 2011 08:00 AM PST

Power-One, Inc. (NASDAQ:PWER) — a large manufacturer of power inverters for the renewable energy industry and provider of software to manage power harvesting and distribution — opened its first North American manufacturing facility in Phoenix today, where they plan to employ 350 people full-time.

According to a company press statement, the facility will primarily produce photovoltaic and wind inverters that convert renewable energy into a usable form of electricity for distribution on the utility grid. The chief executive of Power-One, Richard J. Thompson, explained ahead of the facility’s opening ceremony on Monday:

“We have manufacturing design centers, service centers and a sales force in Europe, the U.S. and Asia, now. Europe has been where the largest percent of our revenue comes from, some 90 percent today. At the beginning of 2010, we started creating product for U.S. customers who may have [made-in-America requirements] and fielding a sales force and developing a service organization here. This is a continued geographic expansion to bring our technology and services to the U.S. market. “

The company scouted sites in the “sun belt” states, and specifically looked at Texas, Mississippi and California along with Arizona. They chose Phoenix for this facility, Thompson confirmed, due to: availability of technical resources and talent thanks to the proximity of Arizona State University, and grants from local government that are tied to employment in the area over the long run.

Power-One is facing different market conditions in the U.S. where about half the demand for its inverter technology comes from residential and commercial buyers, the other half from utilities, and where government incentives to develop renewable energy generating projects have not been strong as they have been in Canada, Germany and elsewhere.

As such, Thompson explained:

“The Phoenix facility will enable us to do many things, including introduce a new line of products towards the third quarter of 2011, like a liquid cool set of inverters for utilities.

We'll also have a Power-One research and development center in Phoenix that will add some 35 graduate engineers and technicians in addition to our manufacturing headcount over the next two years.

We're also strongly considering manufacturing at this site for export. That was not in our plans earlier. But we like the efficiency we're seeing out of this factory, so far, from a small sample. We’ve had about 40 folks there in manufacturing so far.”

Power-One competitors include Emerson Network Power (NYSE: EMR) based in St. Louis, Missouri, and the strongly venture-backed Enphase Energy, which recently announced plans to triple its capacity and start selling its inverters in Europe.

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Enphase Energy

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LibreDigital Raises $4 Million For Digital Reading Technologies

Posted: 31 Jan 2011 07:56 AM PST

Digital publishing company LibreDigital (formerly known as NewsStand, Inc.) has secured $4 million in debt funding, the company announced this morning (an SEC filing shows they had recently raised $1.3 million for the round).

LibreDigital last raised money back in May 2010, securing $8 million in funding – its total now stands at roughly $31 million.

According to the digital reading pioneer, the capital will be used to help the company go to market faster and support innovation in new reading technology for books, magazines and newspapers.

In 2010, LibreDigital became a preferred content aggregator for Apple’s iBookstore and has risen to become one of the largest providers of book content to Apple. The company also forged deals to provide high-res magazines and newspapers to color reading platforms including NOOKcolor, Sony and others.

In addition, LibreDigital provides an HTML5 reader for major publishers who are offering free content in the Starbucks Digital Network via the Bookish Reading Club. The company also handles e-book distribution for 7 of the 10 largest US trade publishers, providing electronic replica editions for The New York Times, e-book fulfillment for partners like Baker & Taylor/Blio and Harlequin, and book, magazine, and newspaper distribution to more than 50 digital retail marketplaces including Amazon, Google, Apple, Barnes & Noble and Sony.

LibreDigital is backed by Adams Capital Management, Triangle Peak Partners, S3 Ventures, Noro-Moseley Partners and HarperCollins Publishers.

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LibreDigital

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ShareThis Now On 1 Million Websites, Appoints Former Yahoo Marketer As CMO

Posted: 31 Jan 2011 06:27 AM PST

ShareThis, which you may be familiar with thanks to all the buttons online publishers worldwide have been plastering on their sites to lure you into spreading their content, is now live at roughly 1 million websites, aggregately reaching more than 400 million users.

The company has now tapped Kristen Fergason, formerly a marketer at Yahoo, as its new CMO to grow even more. In addition to her hiring, ShareThis has named Julie Greenhouse SVP Ad Sales & Business Development and Ben Slutter VP of Revenue and Ad Operations.

Both were with the company previously.

ShareThis allows users to share content from anywhere to anyone and also offers a so-called ‘social advertising platform’ called AudienceShare.

Fergason will henceforth lead ShareThis’ overall marketing strategy and execution. She previously held executive roles in marketing and business development at companies like Yahoo, where she was responsible for B2B marketing and industry outreach.

Fergason came to Yahoo with its acquisitions of Maven Networks, where she was VP of Marketing. She was also a member of the Major League Baseball Advanced Media executive team for six years, serving in a similar role.

ShareThis competes with companies like AddThis (which claims installs on 7 million domains and a reach of 1 billion users per month) and Gigya (which claims a reach of more than 280 million users across more than 500,000 sites).

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First Drive: 2012 Ford Focus, A European Car Meant For The World

Posted: 31 Jan 2011 06:24 AM PST

What’s the first thing you think when you hear the word “focus.” You might respond, "camera," or "cheap car," or "concentration," but definitely not, "fun,” “technological," or "practical." This will likely change in a second because those are the words I’d use to tentatively describe this year’s Ford Focus, a small, sporty car for just about everybody.

More Americans are ditching their gas-guzzling SUVs and heading straight for the small car market. From a marketing standpoint, Ford's approach to selling a small car to people is by offering all the features found in their larger vehicles, but in a smaller package. No longer do people have to feel ashamed for "cheaping out" and getting a Focus, instead, it's simply a lifestyle choice. Why should the choice take out all the fun of owning a car?

I got a chance to drive the new 2012 Ford Focus last week in LA. Those in the area know the hills overtop the city feature some of the most entertaining roads in the country.

IntoNow Can Hear What You’re Watching On TV. The Media Check-In Game Just Changed.

Posted: 31 Jan 2011 06:02 AM PST

“The problem was that no one wanted to type in the bar they were at,” Adam Cahan told us when we met with him last week to see his latest venture, IntoNow. He wasn’t talking about his startup. Instead, he was talking about Dodgeball, the location-based service that came well before Foursquare. That is, he was describing why Foursquare took off while Dodgeball didn’t, even though they had the same basic concept. GPS being built-in to smartphones changed everything, he said. “Now our industry is in the same place. We’re the GPS layer.”

What industry is that? So so-called media check-in space. (Though don’t use the word “check-in” around Cahan, he hates it.) More specifically, IntoNow is trying to own the tv engagement app space. And while competitors like GetGlue, Miso, TunerFish and others all beat IntoNow to market, they have a secret weapon: it’s called SoundPrint.

Just like GPS with location services, SoundPrint, a new technology created by IntoNow, allows you to automatically “check-in” to watching a show simply by hitting a button in the IntoNow app. How? It reads the sound waves and patterns of each television show (and a growing collection of movies as well) and matches it with a database they keep. Yep, it’s a lot like Soundhound or Shazam, but for video content.

And it’s amazing how well it works.

When I first got a demo from Cahan and co-founders Didier Hilhorst and Rob Johnson, I was amazed to the point where I was dumbfounded. You see, the first thing they demoed the app on was a live broadcast of a CNN show featuring Hillary Clinton talking. Within seconds, IntoNow picked up the exact name of the show. I wasn’t sure how this was possible since the same Clinton sound clip could be playing on a number of different shows. But there are a few keys to how SoundPrint works (most of which the team won’t go into since it’s their patented technology) — one key is to scan all live channels and bring in their audio footprint in realtime.

IntoNow knew the CNN show I was watching because their backend was also watching it. It was just a matter of lining up the audio. Which again, it did, in seconds.

But IntoNow works for much more than live TV. Their content catalog currently includes some 140 million minutes of broadcast TV. That’s roughly 266 years worth of video. And it’s growing more with each passing second. They’re monitoring 130 broadcast channels in realtime, 24 hours a day — all of which is stored and saved.

After a few more demos, I was mostly sold. But, of course, there’s always the possibility that a sneaky startup could try to get things perfectly aligned for a demo. I’m not suggesting anyone would stage something, but there could be ideal conditions (and/or shows) set up. So I took the app home to try it out for myself. It worked even better there.

I put on one show, hit the button on the IntoNow app, boom: 4 seconds later, it got it. I flipped the channel, same result. I tried it with a show I had DVR’d. Worked like a charm. I tried it with an older movie I was watching on Netflix. Perfect. I tried it with a live sporting event. Yep, it even worked with that.

Okay, so IntoNow has clearly built some impressive technology. But why enter this space? Because 62 percent of leisure time is spent watching TV. It’s the biggest single activity that people do after working and sleeping, Cahan says. And when they’re watching, increasingly, they’re interacting with the Internet in some way. Currently, much of that is surfing the web on a laptop or mobile device. So IntoNow set out to make a “companion experience” for TV and movie watching.

Once you “check-in” to whatever you’re watching, that info is sent out to your IntoNow social graph (and you have the option to share on Facebook or Twitter). From here, within the app, you can see what your friends are watching. And comment on any of those shows. You can also see what shows are popular at any given time. And there’s a way to discover new shows that will be based on your social and interest graphs.

The app also has indicators to let you know if a piece of content is currently airing. So if I see a friend is watching a certain episode of a show, I can see that it’s currently on live TV and I could flip over to it. Or, if it’s on Netflix, there will be a link to get to it from within the app.

So, what are the downsides? Well, first of all, IntoNow is iPhone-only for the time being. But the team says that Android support will be coming shortly. Secondly, due to some licensing and/or legal issues, they don’t have a big collection of newer films. This includes not only movies still in theaters, but also those just released on DVD. Again, the technology is based around what has been shown on television before, so newer stuff won’t be there, and they’re not indexing pay-per-view. When I joked that they could send a team into theaters to record the sound of new films, Cahan did assure me that they’re thinking about ways to expand their content reach.

But again, they already have 140 million minutes worth of content. And everything I watched, IntoNow found.

In terms of how they monetize this idea, there are a number of possibilities. They could team up with some consumer electronic makers to build their system directly into hardware. Or they could do some potentially interesting stuff with the viewing data to disrupt something like Nielsen. They’ve also already built in a way for SoundPrint to detect commercials. So when it does, there’s a lot of potential there in terms of what IntoNow could do with advertisers within the app. “We're also into this because we think there's big business behind this,” Cahan says.

Not surprisingly, IntoNow has already received funding from Greylock Ventures and Redpoint Ventures — though they won’t disclose how much. Also not surprising is that those are two of the backers of Auditude, the video monetization startup which just raised a new round of funding and saw Cahan transition out as CEO earlier this month. A few of the IntoNow team members had been working there when they decided to spin this project off (though Auditude owns no part of IntoNow). The IntoNow team members also include veterans of Google, Microsoft, IDEO, MTV, and Stanford’s AI program.

As was the case with me, seeing is believing with IntoNow. So download the app and try it out yourselves.

The White House Partners With Steve Case, Facebook, Intel, And Others To Jumpstart Entrepreneurship

Posted: 31 Jan 2011 05:24 AM PST

As part of a White House effort to promote job creation, entrepreneurship and private-sector investment in startups, President Obama is announcing a new initiative today, called Startup America Partnership, to foster growth in the startup world and jumpstart job creation. The Partnership will be chaired by AOL co-founder Steve Case and will be partly funded by the Kauffman Foundation and the Case Foundation.

Startup America’s core goals are “to increase the number of new, high-growth firms that are creating economic growth, innovation, and quality jobs; celebrate and honor entrepreneurship as a core American value and source of competitive advantage; and inspire and empower an ever-greater diversity of communities and individuals to build great American companies.” And the campaign will work with both the White House and a number of technology companies, universities, and entrepreneurs to help achieve these goals.

As part of the initiative, Intel Capital plans to commit $200 million of new investment in U.S. companies; IBM will invest $150 million in 2011 to fund programs that promote entrepreneurs and new business opportunities in the United States; and HP will be investing more than $4 million in 2011 in the HP Learning Initiative for Entrepreneurs (HP LIFE).

Facebook will be launching Startup Days, a series of events around the country that helps provide entrepreneurs with engineering and design support to build off the Facebook Platform.

Google is partnering with Network for Teaching Entrepreneurship (NFTE), a nonprofit that provides entrepreneurship education for at-risk high school students from low-income communities, to offer a number of NFTE’s lessons and curriculum plans to Bay Area students. And startup incubator TechStars is rolling out “The TechStars Network,” which encourages and promotes regional organizations that operate start-up accelerator programs with models similar to the incubator.

The initiative sounds like a impressive effort if the White House actually does in fact take part in the campaign. In terms of sponsorship, there seems to be a good amount of non-profit, and private sector involvement but it’s unclear how involved the White House plans to be with implementing Startup America’s goals.

You can watch a livestream of the actual announcement of the initiative at The White House at 11 am ET here.

Unirac, Canadian Solar To Build 30 Megawatts Of Renewable Energy In Ontario

Posted: 31 Jan 2011 04:59 AM PST

Unirac — a company that makes racks that are used to install and hold solar panels in place within power generating systems of any size — today revealed a new partnership with solar tech manufacturers, Canadian Solar Inc. (nasdaq: CSIQ).

Through the partnership, the companies will install 30 MW of solar projects in Canada, starting with a 10.9 MW solar park in Napanee, Ontario. According to a Unirac press statement, Canadian Solar will serve as the engineering, procurement and construction entity on these projects, and Unirac will provide the racking infrastructure.

In May 2010, Albuquerque, N.M.-based Unirac sold to Hilti Group, a massive construction sector business. Before it became a wholly owned subsidiary of Hilti, Unirac’s sales increased 100% from 2009 to 2010 said the chief executive of Unirac, Doug May.

He sees tremendous growth ahead for U.S. based solar companies, especially those serving domestic power companies with made-in-America products, yet have capacity to export:

“The U.S. [solar market] was around 800 megawatts this year, and could grow to 2.5 gigawatts. We're slated for growth, near-term. The utility market alone next year, could be the same size as the entire U.S. market was this past year,” May said.

Today, 90 percent of Unirac’s supply chain is in the U.S. — most of its aluminum, for example, is extruded in California — but it gets 10 percent of its supplies from Canada, Europe and Asia.

Since 2009, the company also began building manufacturing, assembly and shipping operations outside of New Mexico, to be closer to customers and take advantage of government incentives in other states and countries, when possible.

Unirac specifically established manufacturing operations in Canada, anticipating a boom in solar project building thanks to the country’s feed-in-tariffs and other incentives.

Subsidized or not, May believes that Unirac’s products can solve problems for those who hesitated to build solar power generating systems due to labor costs, before. He explained:

“Solar projects for large utilities take a long time to get approved, with so many transmission and environmental challenges to be dealt with. They are all massive construction projects.

When it comes to the cost of solar power, people always want to talk about module efficiency. That is important. But the racking has to last for twenty years, too.

If you have workers who have to put a bolt in, or who have to go back down to the ground over and over again to build these projects, it’s going to drive up the costs of solar overall. We think about that.

We put a huge amount of testing into understanding code, snow loads, wind loads, what the ground is doing, and all the factors that influence the racking and ultimately the solar [power generating] systems. Even though we’re not making the panels, it’s highly technical.

Ultimately, it’s about taking the cost out of solar projects at any scale and making renewable energy competitive.”

Unirac was backed by the Maryland-based, private equity group Global Environment Fund prior to its acquisition by Hilti. Competing manufacturers of racking equipment for the solar industry include Zep Solar, also a partner of Canadian Solar, and Sollega, which offers one rack made of recycled materials.

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HILTI

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Exclusive: KIT digital Acquires KickApps, Kewego AND Kyte For $77.2 Million

Posted: 31 Jan 2011 04:13 AM PST

TechCrunch exclusive – If you’d never heard about KIT digital before, you will after today.

The provider of cloud-based video asset management solutions has acquired not one, not two but three social software and video companies.

The company has acquired New York City-based KickApps, Paris-based Kewego, and San Francisco-based Kyte, for aggregate consideration of approximately $77.2 million.

In conjunction with the acquisitions, KickApps CEO Alex Blum has been appointed to the new position of Global COO of KIT digital, while KickApps CFO David Lapter will assume the role of SVP Finance and Administration within KIT digital.

KIT digital, which delivers video asset management solutions for multi-screen delivery, says the acquisitions are meant to enhance its existing product offering while “growing market share across geographies and client verticals”.

KIT digital’s chairman and CEO, Kaleil Isaza Tuzman, comments:

"We are committed to ensuring that our ‘VX-one’ video management platform has market-leading functionality that helps clients realize value across the video distribution value chain, from securing and capturing the right content to delivering it across multiple channels and via social communities.

We are intent on becoming the one-stop shop for medium and large-sized corporations' video needs, delivering IP video management services from the eyes behind the camera shooting the video to the person watching it on any device—from ‘lens-to-lens’."

Alex Blum, CEO of social software startup KickApps, will become KIT digital’s worldwide chief operating officer. Blum was an early pioneer of online video and interactive TV as VP of products at AOL, and was previously president and COO of JumpTV.

Blum will be responsible for the overall business operations of the company, including product management, R&D, client operations, and business administration. He will be based in KIT digital’s headquarters in Prague, Czech Republic, will apparently also spend significant time at the company’s newly acquired R&D centers in New York and San Francisco.

So why KickApps, Kewego and Kyte – apart from the fact their names all start with a ‘k’?

According to KIT digital executives, KickApps adds significant technology and product synergies to the company, its Open Source Media Framework (OSMF) App Studio in particular.

The latter product will serve as a unification point for all publishing-layer technologies across KIT digital’s family of products and enable its clients to leverage KIT’s infrastructure to deliver Flash and HTML5 deployments no matter which module of the VX-one platform they have currently deployed.

KickApps 450+ clients include NBC Universal, American Express, Hearst, Live Nation, Liverpool Football, Phoenix Suns, Scripps Network, Simon & Schuster and Viacom. KickApps is said to derive in excess of $12 million in annualized revenues, with the large majority derived from recurring software license fees from its software solutions.

KickApps has approximately 60 staff members, and raised $32 million in venture funding.

As for Kewego, this French company was founded in 2003 and – much like KIT digital – provides IP-based, multi-screen video asset management solutions for managing, broadcasting and monetizing videos on PCs, mobile phones, iPads, connected TVs, gaming consoles and other Internet-connected devices.

Kewego is also said to enhance KIT's enterprise offering through onsite, digital signage deployments.

Kewego reported fiscal 2010 revenues of $10.2 million, the large majority also derived from recurring software license fees.

The company adds more than 400 clients across 16 countries, including Atos Origin, L’Equipe, Microsoft, Pages Jaunes and Volkswagen.

Michel Meyer, co-founder and CEO of Kewego, will assume the role of senior vice president, product management, and Olivier Heckman, general director and co-founder of Kewego, will become VP sales for Western and Southern Europe at KIT digital (including coverage of France, Benelux, Spain, Portugal and Italy).

Paris, Grenoble (France) and Madrid will continue to be home to Kewego's approximately 60 employees, with Paris becoming an integral part of KIT digital’s existing Europe, Middle East & Africa (EMEA) sales and account management operations.

Kewego raised $19.4 million in funding.

As for Kyte, this company has been around since 2006 and offers a cloud-based publishing platform that enables companies to deliver live and on-demand video experiences to websites, mobile devices and connected TVs. Kyte was acquired as KIT digital plans to leverage Kyte's proprietary platform and application frameworks to serve KIT's global client base.

KIT digital says Kyte also brings key additions to the KIT digital's management team as well, including Erik Abair, CTO and co-founder of Kyte, and Gannon Hall, Kyte's COO.

Abair will join KIT's product development team as senior director of software development, while Hall will become KIT's senior vice president of global marketing, where he will oversee the company's outbound marketing, communications and demand generation efforts. Abair will remain based in San Francisco, while Hall will relocate to KIT's Prague headquarters.

Kyte reported fiscal 2010 revenues of $3.7 million, derived primarily from SaaS platform fees. Kyte adds nearly 100 clients, including CBS, Clear Channel, FOX News, MTV, Walt Disney Company, Nokia, Publicis, Swatch, Oprah Winfrey, and ESPN Europe.

Kyte raised $23.4 million in funding.

We’re still digesting all the news and plan to talk to some key players shortly to gain more insight. Stay tuned.

One thing I want to note straight away, though: Kyte, Kewego and KickApps raised over $74 million in venture funding combined, so a $77.2 million aggregate acquisition price seems terribly low. We’ll update when we learn more.

Update: more details about the deal terms:

The aggregate consideration paid for the acquisitions of KickApps, Kewego and Kyte was approximately US$77.2 million on a cash-free, debt-free basis. This consideration is inclusive of time-based and performance payments, but excludes certain incentive compensation programs for the personnel of acquired companies, which are estimated not to exceed US$4.0 million over a period of years, in a mix of cash and equity.

Approximately US$62.3 million will be paid in KIT digital common stock (based on the closing market price on Friday, January 28, 2011), with approximately US$14.8 million paid in cash. In aggregate, the transactions are expected to be accretive on both a 2010 revenue and EBITDA multiple basis, while meeting or exceeding KIT digital’s EBITDA margin target of at least 24% for 2011.

The total number of shares expected to be issued over time in association with the three acquisitions is approximately 4,611,346 of which 96% are subject to staggered resale restrictions between 12 and 24 months.

Following the completion of these acquisitions, including payment of deal-related fees and charges as well as payments of approximately $4.2 million in net positive working capital adjustments, management estimates KIT digital will have approximately 37.9 million common shares outstanding and approximately US$115 million in cash.

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An Open Letter To All Companies Who Grew Revenue By 200% Last Year

Posted: 31 Jan 2011 03:48 AM PST

I loathe press releases like this one from Ooyala, who I must say is our trusted video platform provider in the interest of full disclosure. I’m singling the company out today, because I’m quite fed up, but this is an honest plea for every company that loves to tout growth without saying anything substantial to, please, stop doing that.

So apparently Ooyala “grew revenue by nearly 200%, its customer base by over 50%, and delivered a record number of video technology innovations”.

Sounds impressive, except the statement says absolutely nothing about its revenues, the size of its customer base or what the company has done to innovate video technology.

Listen, we understand, you’re a privately held company and can’t disclose revenues at this time. We get that. But please stop touting your revenue growth in percentages in an effort to gain some exposure with regards to your income if you don’t feel like talking numbers.

For all we know, Ooyala made $1 in 2009, and $2.9 in 2010. That would mean they grew revenues by nearly 200% last year. Except it wouldn’t be all that impressive, right?

We get emails about this sort of stuff all. the. time.

Hey TechCrunch, we figured you and your readers would be interested to know that we managed to triple our revenues in 2010! What those revenues were, then? Sorry, can’t say, we’re privately held as I’m sure you know, so we can’t disclose revenues at this point.

Wait, why did you get in touch again?

Excuse the rant, but it annoys me to no end. We’re a blog that loves sharing information about the technology business, and primarily Internet startups, with readers, preferably before anyone else does. Numbers are terrific: they provide context, enable readers and industry watchers to gauge trends and startup valuations, allow for honest comparisons to be made between companies across various industries and for us to monitor their growth.

You do not have to report numbers if you don’t want to. That’s fine, no time wasted on either end, and perhaps one day you’ll be a public company and you won’t have any choice but to disclose revenues for the last quarter. Trust us, then we’ll really pay attention.

But until that day, feel free to share numbers we can work with – we appreciate it when you’re straightforward. But if you choose not to, then, sorry, just don’t bother.

Don’t pretend to share information about your revenues when that’s really not what you’re doing at all. It’s obnoxious, misleading and a huge time sink for everyone involved.

Oh, and by the way, have you heard? Ooyala saw a 10x increase in hours of video viewed and a 2x increase in active unique users in 2010! Champagne for everyone!

Update: thanks to a commenter, this relevant Dilbert strip:

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AOL Europe Acquires Branded Video Network goviral For $96.7 Million

Posted: 31 Jan 2011 03:38 AM PST

AOL Europe has lead an acquision of video distribution network Goviral today, to the tune of $96.7 million. Goviral distributes branded video content for mainstream brands, as well as content producers and advertising agencies. Originally out of Copenhagen, the company now has offices across Europe. The initial purchase is for $74.1 million and $22.6 million in a two year earn out. It joins others AOL acquisitions in the last year including, StudioNow, 5min Media, Thing Labs, Pictela, about.me and, er, TechCrunch.

We’re hearing this deal was lead directly by Kate Burns, head of Europe for AOL.

Plentyoffish CEO: We Were Hacked, Almost Extorted – So I Emailed The Hacker’s Mom

Posted: 31 Jan 2011 02:44 AM PST

The title of strangest WTF story of my morning is Plentyoffish CEO Markus Frind recounting how his online dating site got hacked, he and his wife were harassed and someone clumsily attempted to extort his company in the aftermath of the events. If that is in fact what happened …

First up, Frind points out that the site has indeed been hacked last week in a “well planned and sophisticated attack”.

Apparently, POF users’ email addresses, usernames and passwords were downloaded, although Frind does not say how many. Plentyoffish has already reset the passwords for all users and claims to have plugged the security hole that allowed the hackers to enter.

An official statement will apparently be published tomorrow, but Frind’s personal, sleep-deprived recount of what happened – “what it feels like to be hacked /extorted and the intense pressure and stress you are put under” – is well worth a read – for starters.

According to Frind, an Argentinian hacker named Chris Russo – who recently hacked The Pirate Bay – broke into Plentyoffish after two days of sleuthing, under his real name.

Then, this happened (still, according to Frind):

At midnight Miami time my wife gets a call from Chris Russo that plentyoffish has been hacked into and that Russians have taken over his computer and are trying to kill him, and his life is in extreme danger and they are currently downloading plentyoffish's database. Chris is trying to create a sense of panic.

I listened in the background and I closed the breach if indeed there was one while my wife was on the phone and then I immediately ordered an investigation. Over the next 24 hours we got a lot of voice mails from Chris Russo frantically wanting to talk to us.

It gets much more complicated (and confusing) but you can read Frind’s blog post for more details on his side of the story.

Meanwhile, Russo, who describes himself as a bona fide security researcher, says he and his team only discovered a security vulnerability in the online dating site, that hackers were already exploiting the hole, and that he merely reported it to Frind and co in good faith.

Russo says the hole exposed usernames, addresses, phone numbers, real names, email addresses, passwords in plain text and PayPal accounts of more than 28 million users. According to Russo, he simply tried to make an arrangement with Plentyoffish to analyze the security issues in return for compensation.

Frind says Russo and his team were attempting to extort him:

They then say we should find a way to work together as they are a security company. In exchange for complete access to all of our source code and SQL servers they can make sure we aren't attacked again. Now they want us to Sign NDA's Contracts etc.

They also claim they know the locations of where the Russians dumped our data and they can delete it.

They then start talking about money because they need to incorporate a company that can deal with companies outside of Argentina and that will cost $15,000. They also needed to know if they were going to make over $100k/year or 500k/year as that would require different registrations…

Russo alleges that Frind is the one that went ballistic and threatened to “destroy his life” and making sure “no one is ever going to hire him for anything again” (see email).

Frind concludes his blog post by publishing pictures of the two persons who tried to extort him (Russo and his business partner “Luca”) and acknowledges that he went on a counter-offensive, threatening to sue both men and even emailing Russo’s mother.

Russo is actively posting comments on the blog post in response to Frind’s allegations, if you’re interested in watching the back and forth some more.

We’re awaiting the company’s official statement on the security breach. Accusations abound, but if personal data from Plentyoffish users was really as vulnerable to malicious attacks as Russo claims, then that’s what everyone should be focusing on first and foremost.

Update: more reading material: PlentyofFish.com Hacked, Blames Messenger

(Thanks to Miguel Hernandez for the tip)

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We’re Now Watching The “You” News Network

Posted: 31 Jan 2011 02:34 AM PST

Back in November, Reuters published an article titled “Twitter co-founder hopes to create news network” where Biz Stone mulled over the idea that Twitter could create a social news firehose based on verticals. While the erroneous headline ended up being debunked by Twitter, some hypothesized that this could work if news organizations were given access to all tweets on a given topic as well as the power to curate the stream.

Back then my colleague MG Siegler said there was clearly something to this idea. MG is right (sigh) namely because it is already happening. Humans are functioning as defacto news aggregators using the publication tools already available. This, while not a novel idea, really hit home in the past two weeks with the two subsequent revolutions in Tunisia and Egypt. What I and you probably noticed was that interested people we followed took it upon themselves to become individual nodes of information, using the tools they had to serve as their own news networks.

@bencnn
benwedeman

In subway yesterday young man takes marker and crosses out "Hosni Mubarak Station" on map. Everyone applauded. #Jan25 #Egypt

January 30, 2011 8:29 am via webRetweetReply

As we struggled to make sense of local conditions, volunteer news conduits who made an effort of curating information gained attention as go-to sources for #Egypt news. Coverage like CNN’s Ben Wedeman’s became more important than that of any mainstream publication’s with the possible exception of vanguard Al Jazeera. In essence these people went beyond citizen journalism and became their own publications.

The Egyptian news nodes/amplifiers included but are not limited to @arabist, @nolanjazeera, @evanchill, @sandmonkey ,@ianinegypt, @ioerror, @acarvin, @ethanz @Brian_Whit, @danny_at_cpj, @SultanAlQassemi, @monaeltahawy, and @litfreak. On site in Egypt, Director of Google Ideas @JaredCohen actually dictated his tweets over the phone this week, reverting back to a decades-old means of communication in order to push through information to a more modern one.

Silicon Valley angel investor Shervin Pishevar took it upon himself to tweet out so much information related to #Egypt that he actually started an off-Twitter movement (OPENMESH) focusing on creating an easily applicable system of open mesh routers in order to prevent a similar internet blackout from happening again. The case of Pishevar becoming his own publishing platform was so acute that YouTube Product Mangager Hunter Walk labelled him the Shervin News Network. Pishevar ended up tweeting so much he went over the rate limit set by Twitter.

@JaredCohen
Jared Cohen

Calling in my tweets via landline which is only current means of communication #Jan25 #Egypt

January 28, 2011 10:57 am via webRetweetReply

The ‘”You” News Network’ isn’t just found on Twitter. On YouTube user “Wael Abbas” is calling himself the “The first Egyptian digital video channel” and posting on the ground coverage including cars being set fire to in the streets. User “Justimage” posted Egyptian protest videos from Tahrir Square just 11 hours ago, an impressive feat given the general communication breakdown. Facebook Pages are serving as the locus of anti-Mubarek protest news. Independent niche bloggers like Arabist were the first to report the total Internet black out. After its Cairo office was shut down over the weekend Al Jazeera urged Egyptians to “send blog posts, eyewitness accounts and videos to expand coverage of the uprising against President Hosni Mubarak” to supplement coverage.

There are plenty of non-revolution type examples as well, whether it was Blake Housnell dissecting individual WikiLeaks over Twitter or Christine Lu debunking the WSJ’s Tiger Mom story on Quora or the people who liveblog #American Idol or the #SAGawards or WikiLeaks itself.

Hunter Walk added in an email “It’s clear we’ve reached the tipping point where news self-assembles via emergent hubs such as Shervin. Platforms such as YouTube, Twitter and Facebook are both the medium and the message — they are broadcasting platforms but they also shape the news itself: short-bursts of info in realtime, video broadcast direct from the streets available to the entire world.”

Over at GigaOm, Mathew Ingram argued that the movement of serving as your own channel for news was independent of one brand “In the end, the real weapon is the power of networked communication itself. In previous revolutions it was the fax, or the pamphlet, or the cellphone — now it is SMS and Twitter and Facebook. Obviously none of these things cause revolutions, but to ignore or downplay their growing importance is also a mistake.”

Indeed, much like the routers of Pishevar’s OPENMESH, we all now serve in one way or another as routers for information. In a world where 88% of the press is still not entirely free, the ability to self-publish and distribute is a enormous and beautiful thing. Just wait until Egypt gets back online.

Here’s an interview with Pishevar, below.

Image: Time

Live Facebook Press conference: Check-in Deals launches in Europe

Posted: 31 Jan 2011 01:43 AM PST

Facebook is today launching ‘Places Deals’ in the UK and Europe. Facebook users will be able to get discounts and special deals in shops, cafes and restaurants by checking in on Facebook Places on their smartphone.

We’re live broadcasting the press conference above.

The Telegraph broke an early story on this this morning.

‘Places Deals’ launched in the US last November with Macys, Gap and Starbucks.

European partners will be: Starbucks, Yo Sushi, Mazda (Mazda 20% off an MX5), O2, Argos, Debenhams, Alton Towers and Benetton.

Live now in Germany, France, Italy, Spain.

Rumors: Facebook Using Face.com’s Facial Recognition, Acquisition Offer Rebuffed

Posted: 31 Jan 2011 01:33 AM PST

Guy Grimland of Israeli business newspaper TheMarker published two articles (both are in Hebrew) this morning about a rumored relationship between Facebook and Face.com.

The first article claims that Face.com rebuffed an acquisition offer worth ‘tens of millions of dollars’. The second article claims that Face.com is powering Facebook Photos’ facial recognition functionality, which was clearly upgraded in the past few months, albeit, with no indication there was a third party involved.

While the acquisition claim has been swirling around in the local startup community for a couple of months, no numbers have been mentioned. Worthy to note the fact that the company recently raised a $4.3M round of financing, led by Yandex. If the acquisition offer claim is true, both Face.com and its investors clearly believe the future holds a bigger liquidation event than an aqui-hire scenario.

The second rumor, about Face.com powering Facebook’s facial recognition functionality, is more interesting in my opinion and makes more sense for a couple of reasons.

For one, Face.com’s facial recognition algorithms are really quite effective. We wrote about their remarkable quality when the company first launched nearly two years ago. Secondly, from a technology standpoint Face.com’s ability to provide facial recognition economically on a massive scale, has been touted as one of the company’s major IP attributes.

In the case of Facebook, being able to provide such functionality in an economic manner from a computing resource perspective must be seen as a major upside, if not a vital one.

I reached out to Gil Hirsch, Face.com CEO, who declined to comment on both claims.

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Facebook

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Quora Backlash Slams Head First Into Quora Backlash Backlash

Posted: 31 Jan 2011 12:42 AM PST

You know how I know Quora is going to be big? No one can shut up about it.

That includes both people who love it and people who hate it. And that dichotomy is important, because it will keep people talking about it. And that will keep people signing up. And it will keep those that already signed up going back. And that’s important because Quora is a service that takes a bit longer than others to get into.

Anyway, the past couple of weekends have brought some truly great bitchmemes about Quora. Last weekend, it was Vivek Wadhwa who kicked things off on this very blog with his post, Why I Don’t Buy The Quora Hype. That post led to a firestorm of reactions (both positive and negative) in both the comments section and on Twitter. In fact, at one point after the post went up last weekend, I swear my entire tweet feed was devoted to it.

And, of course, there was a huge thread on Quora about it.

And then came the blog posts in reaction to it. Thoughts on personal blogs also quickly jumped over to TechCrunch. God I love bitchmemes.

But this weekend kicked things up another notch. And naturally, it was Robert Scoble who was the catalyst. Scoble wrote a post today entitled, Why I was wrong about Quora as a blogging service … If you haven’t read it yet, you should, if only to get context for Dan Kaplan’s hilarious rebuttal.

Whereas Wadhwa brought up a number of good points in his post, Scoble just seems to be venting by arguing against his own initial argument. If you don’t want to read it, basically, it boils down to: it’s annoying that a moderator buried the answer I took a lot of time crafting.

On one hand, that’s humorous. On the other, it’s also really the heart of the problem here.

Quora is not a blogging platform. Initially, I agreed with some of Scoble’s original thoughts on the matter. But I apparently misinterpreted them to mean that he felt Quora was a part of the next progression of the overall blogging ecosystem. I still think it is. Quora is a great source of information like Twitter and Facebook and blogs themselves. But apparently, Scoble was actually just thinking that Quora was the actual future of blogging. As in, you would and should do it there.

That’s just silly.

To me, Quora is first and foremost about information. It’s about getting it out of peoples’ heads and into a centralized repository that, when mixed with certain social signals, becomes a blooming flower of knowledge. While I do think there is room for opinions on the service (and in many cases, that’s what is specifically being asked for), it’s not for users to go on and on in a highly personal and oddly promotional manner. Which is exactly what Scoble did in his down-voted posting in question (as Kaplan rightly calls out).

Doing that is fine — on your own blog. In fact, it’s perfect for that. But if you put that type of stuff on Quora and expect it to be treated as the most authoritative answer simply because a certain percentage of your 8,000 followers will vote it up, you’re missing the point of Quora. It’s more about the information and less about the person providing the information. That’s simply one of the signals (albeit the most important initial one) to know if the information is any good or not.

Should Scoble’s answer have been hidden? Probably not. And it actually doesn’t look like it is anymore. But because he has so many followers voting up his answer, it does overshadows the others in the thread, which are also good and much more to the point. Perhaps hiding Scoble’s was the way the moderator(s) thought would best ensure that other answers could be seen. Who knows. And really, who cares? Well, besides Scoble, of course.

Again, Quora is not a blogging platform. And it never was. To get angry when you disprove your own misinterpretation is just weird.

The real key here is that everyone can’t stop talking about Quora — no matter the reason. And at a very fundamental level, that means something. Something important. Something that other services that have caught on have shared.

On a much less fundmental level, it means a shitload of press. And press about Quora press. And now even press about press about Quora press. Despite what you’ll read in the comments below (if you dare go down there), it’s the kind of press you can’t buy. It’s the kind that comes about naturally because people are interested in your site. Both people who want to write about it, and people who want to read about it. That is, when they’re not busy using it.

[image: Walt Disney Pictures]

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Quora Is Really About A Better Wikipedia, Not Robert Scoble’s Hopes & Dreams

Posted: 30 Jan 2011 11:51 PM PST

Robert Scobleized Quora today.

It was only a couple of weeks ago that I mentioned super-blogger Robert Scoble’s penchant for taking very strong positions on technology and startups and then reversing those decisions completely on a whim.

I love him for his quick retreats.

And I certainly admire a man who’s willing to rethink his opinion after weighing new evidence.

But that’s not what Scoble did when he trashed Quora earlier today. He decided that Quora was a blogging service, or some kind of Friendfeed or Twitter-like place for conversations. And when he realized that it doesn’t do those things very well, he lashed out. Basically, he got mad that people downvoted his stuff.

“It's a horrid service for blogging,” says Scoble.

Yup. I agree. Quora isn’t a very good place for blogging. Because other people can edit or remove your stuff. It’s the sort of place where you have to behave yourself if you want to be heard. That’s exactly not blogging.

The thing is, most of us have always known that.

Quora is ostensibly a Q&A site. But that’s like saying a car is a device for burning gasoline.

Or, in Robert’s case, he’s mad that his car won’t cook him dinner.

When you think of Quora, think about Wikipedia, not Twitter or FriendFeed or a blog. It is a knowledge base. It says so right on the about page.

Quora is a continually improving collection of questions and answers created, edited, and organized by everyone who uses it. The most important thing is to have each question page become the best possible resource for someone who wants to know about the question.

One way you can think of it is as a cache for the research that people do looking things up on the web and asking other people. Eventually, when you see a link to a question page on Quora, your feeling should be: “Oh, great! That’s going to have all the information I want about that.” It’s also a place where new stuff–that no one has written about yet–can get pulled onto the web.

Accumulating Knowledge
People use Quora to document the world around them. Over time, the database of knowledge should grow and grow until almost everything that anyone wants to know is available in the system. When knowledge is put into Quora, it is there forever to be shared with anyone in the future who is interested.

When I read “Over time, the database of knowledge should grow and grow until almost everything that anyone wants to know is available in the system.” I definitely think of Wikipedia. And I definitely don’t think of a clean, well lighted place for Robert Scoble to have conversations with his followers.

Like Wikipedia, Quora can be a horrid place to voice an opinion. The community (led by Quora’s moderators) want a certain type of content. Stuff that isn’t about wit and rhetoric, but about getting experts to talk about things that they deeply understand. And since Quora bought the domain name and put up the site, they get to do that.

Even if Scoble gets pissy about it.

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Bill Keller vs Wikileaks: Goodnight, Julian Assange, And Bad Luck

Posted: 30 Jan 2011 10:45 PM PST

I'm loathe to write again about Wikileaks, or about its pig-to-man founder, Julian Assange. Not because I've run out of things to say, but because the response is so predictable when I do.

Within minutes, the Assange fanboys – the Wikiliebers, if you like – will swarm into the comments, accusing me of unfairly slandering their hero. "He's sticking it to The Man!" they’ll cry, "he's disrupting the mainstream media!" they’ll holler, "it was a honeytrap!" they’ll protest, until inevitably someone will accuse me of being in the pay of the US government and the whole thing will descend into farce.

No forest of Vanity Fair and New Yorker profiles or unrelated criminal allegations or hubristic statements about having "two wars I have to end" will convince the Wikiliebers of the truth: that Assange is an arrogant computer genius who began Wikileaks with the best of intentions but has since lost sight of his principles in the relentless pursuit of personal celebrity. (I say that like it's a bad thing)

But if I take some flak for my relatively inconsequential badgering of Assange, I can only imagine how much Bill Keller must be getting right now. After all, Bill Keller is the man who is about to put Wikileaks out of business once and for all.

Keller, for the benefit of media non-nerds, is the executive editor of the New York Times. He is also a former Pulitzer prize winning journalist and the poor bastard who oversaw the paper's relationship with Assange and Wikileaks. He also wrote the brilliant introduction to the Times' very first ebook: ‘Open Secrets: WikiLeaks, War and American Diplomacy’ (Kindle, iBooks, Nook) which takes all of the newspaper’s Wikileaks coverage – the reporting, the analysis and the comment columns – and serves it all up as one giant, yet somehow entirely manageable banquet.

For me – and I suspect for many TechCrunch readers – one of the more interesting parts of the book concerns the fight between China vs Google. Perhaps I hadn't been paying proper attention but I'd always understood the animosity between Beijing and Mountain View to be the result of Google's unwillingness to censor its search results to the satisfaction of the Chinese Politburo, or the fact that Gmail was routinely being used by anti-government dissidents.

Not so, says the Times. In fact the root cause of the falling out apparently came when Li Changchun, China’s propaganda chief, learned how to Google himself. What he discovered – a torrent of abuse about himself and his family – made him so angry that he personally oversaw an unprecedented, and sustained, campaign of cyber-warfare against the search giant. In addition to the hacking, Li went after Google's financial interests, ordering three Chinese telecoms giant to sever their commercial ties with the company. I thought I was harsh on trolls. I got nothin' on Mr Li.

The section also covers Beijing's other electronic battles against America; battles which range from the laughably ineffective to the laughably effective. On one occasion, we're told, the Chinese "patriotic hackers" used a Trojan horse document titled "salary increase – survey and forecast" to steal 50mb of data including all of the usernames and passwords from one unnamed US government agency. We’re also told that the Chinese government believes the Internet to be “fundamentally controllable”. That view might sounds ridiculous to us in the West but, as we’ve seen in Egypt this week, China isn’t the only government to hold it.

The China revelations, though, form just one small part of what is a remarkable compendium of journalism: a collection of reporting and writing that's well worth the $6 asking price, even if the bulk of the material has already appeared in print. Just as Times' reporters were able to sift through hundreds of thousands of raw cable and war logs and filter them down into headlines suitable for the masses, so Open Secrets filters that reporting down still further. In one long sitting a reader could go from knowing nothing about the Wikileaks saga knowing it all.

No matter which side of the "Wikileaks: Good or Evil?" debate you're on, the book will likely offer you some comfort. Those of us who worried that Wikileaks would cause a breakdown in relations between American diplomats and the rest of the world are told – in essence – to stop being so silly. In his introduction, Keller quotes Defense Secretary Robert Gates' reminder that foreign diplomats "cooperate not because they necessarily love us or trust us to keep their secrets… but because they need us". Wikileaks won’t change that fact.

Meanwhile Scott Shane's essay "Can the Government Keep a Secret?" reassures us that the Wikileaks scandal has resulted in a lock down of low-level communications: USB ports have been cemented up, read/write access to Department of Defense computers has been restricted: in short everything that should have been done years ago to foil low-level leakers like Bradley Manning has finally been done. Thanks Julian!

The Wikileaks supporters are thrown a few bones too. For a start, the Times stands firmly by its decision to publish the documents (much to the frothing anger of Michael Goodwin in the New York Post who describes the book as a "sloppy defence of Wikileaks… and Julian Assange, the anti-American anarchist behind WikiLeaks"). And to those who would try to downplay the value of the information in the leaks, the Times replies "that's not the point". The "immense value", Keller argues, is not that Wikileaks exposed major secrets (of the 251,287 documents, only 11,000 were marked secret, and none were classified top secret) but rather that "they provide texture, nuance and drama. They deepen and correct your understanding of how things unfold, they raise or lower your estimation of world leaders".

Finally, those concerned about American hegemony in world affairs will be reassured to learn that its diplomats are far from all-powerful. In fact they seems to spend much of their time making concessions to avoid further inflaming anti-American sentiment around the globe. But then again, that might be the opposite of what Assange's supporters want to hear. After all, further inflaming anti-American sentiment around the globe is basically Wikileaks' mission statement. Suggesting that the organisation has achieved exactly the opposite is unlikely to win Keller any friends amongst Assange's supporters.

But that's last point is kind of moot because most Assange fanboys will have been unable to get beyond the description, early in Keller's intro, of Assange as "arrogant, thin-skinned, conspiratorial and oddly credulous". In fact the sound you hear is a million Wikiliebers throwing down their Kindles and storming off to their rooms in a sulk.

Which is a shame, because after that line, Keller really gets stuck in: describing how, when the Times refused to link its online coverage to the Wikileaks website (because Assange failed to keep his promise to redact the names of civilians) Assange flew into a rage, yelling "where's the respect?" And how, when the paper printed unflattering profiles of both himself and self-alleged Wikileaker, Bradley Manning, Assange demanded a front page apology from the Times and ordered the UK's Guardian newspaper to stop sharing information with Keller's team. The Guardian ignored the demand, not least because it soon emerged that Assange had been secretly sharing his documents with rival news organisations and reporters. What happened next was well covered by Sarah Ellison’s Vanity Fair piece – the headline, though, is this: Wikileaks founder threatens to sue newspaper in order to keep documents secret.

The creatures outside looked from Assange to The Man, and from The Man to Assange, and from Assange to The Man again…

And yet, and yet… none of the above is why Bill Keller is going to bring down Wikileaks. As with the leaks themselves, there's very little in Open Secrets that we didn't already know. American diplomats sometimes lie. Jullian Assange is a dick. Bears shit in the woods.

No, it's not what the book says that will destroy Wikileaks, but rather what it represents. Every single page of Open Secrets reminds us of how much value professional journalists bring to the table, and how little is offered by Wikileaks and Assange. You could read through the raw cables between now and doomsday, but without the Times' curation and independent reporting to make sense of it all, you might as well be a dog flicking through a book of Magic Eye pictures.

That was, of course, precisely reason why Assange – prompted by the Guardian's Nick Davies – formed a partnership between Wikileaks and the mainstream media in the first place. The former provided the raw data and the latter sifted, curated and investigated it. And yet, Keller takes pains to insist that at no point did the Times regard Assange as a partner. Rather he was treated as a source, pure and simple – no more or less important than anyone else who has offered the paper information, although certainly more annoying.

That point is further driven home by the inclusion in the book of a profile of alleged leaker Bradley Manning which follows directly after Assange's profile. It's Manning, we're reminded, who – for good or ill – took the bulk of the risk in leaking the documents, finally ending up in Quantico for his apparent sins. For all Assange’s bombast, and the distracting sideshow of his impending (and unrelated) extradition hearing – Wikileaks is shown as little more than a geeky middleman whose one value-add was a promise to keep leakers' identities safe (again: Manning ended up in Quantico)

In fact, reaching the end of Open Secrets, you're left wondering why Wikileaks is needed at all. Assange’s only contribution to the process seems to have been to decree which newspapers could publish what documents – and when, and then threatening to sue when they refuse to show him "the respect". If anything, the book offers a comprehensive and compelling set of reasons why, far from being a disruptor, Wikileaks is itself ripe to be disrupted.

And sure enough, that potential disruption is starting to emerge from a number of directions.

First there’s Openleaks, the rival site launched this week by former Wikileaks operatives after they became disillusioned with Assange's management style. Unlike Wikileaks, Openleaks won't publish or control documents itself. Instead it will simply act as a conduit: blindly distributing leaked material to a wide range of media outlets, charities and special interest groups, while protecting the identity of the leaker. You know, like Wikileaks was supposed to do.

Ironically, though, it's possible that Wikileaks’ most disruptive rival could come from the mainstream media itself, perhaps in the form of Bill Keller’s New York Times. Openleaks’ big promise is that, like Wikileaks, it distribute leaks widely so as to avoid the biases inherent with leaking to a single publication. But that overlooks the fact that many leakers are driven by political and ideological biases of their own. Bradley Manning certainly was, and maybe had he been able to anonymously leak his cache of documents to a like-minded publication able to provide the psychological and legal support he so obviously needed post-leak, there's a chance he would have taken that route as opposed to using Wikileaks. We'll never know.

But next time we will. No sooner had Open Secrets hit the virtual shelves than Keller confirmed in an interview with Howard Kurtz at the Daily Beast that the Times has been working on exactly that kind of secure drop-box for low-level leaks (the assumption is that high level leaks will continue to come directly to trusted reporters). Way on the other end of the spectrum, Al Jazeera has done the same, already scoring its first coup: the so-called "Palestinian Papers" . The Guardian is likely to follow suit too (it also has its own Wikileaks book due for publication in February) as is any other paper that doesn't want to be left behind.

Once enough of these Wikileaks alternatives have launched, leakers will be able to make their choice: either to give their information to an individual publication that's sympathetic to their cause, or to use Openleaks to share it between all of them. And at that point, Wikileaks and its control-freak, middle-man founder will have nothing left to add, save for sound and fury. The disruptor will become the disrupted, and Bill Keller can enjoy the last laugh.

WikiLeaks Founder Assange Tells 60 Minutes: “Our Values Are Those Of The U.S. Revolution”

Posted: 30 Jan 2011 09:01 PM PST

In an interview with 60 Minutes, WikiLeaks founder Julian Assange compares his values to those of the Founding Fathers of the United States and argues that he is actually playing “inside the rules.” He defends his actions by leaning heavily on the First Amendment, stating that “our founding values are those of the U.S. revolution.”

On the possibility of facing prosecution in the U.S. for leaking sensitive diplomatic cables and military documents, he argues: “There’s been no precedent that I’m aware of in the past 50 years of prosecuting a publisher for espionage. It is just not done. Those are the rules. You do not do it.”

Both the U.S. Justice Department and the Pentagon are conducting a criminal investigation against Assange and WikiLeaks, but if WikiLEaks is charged with a crime for publishing classified documents, it begs the question of whether other publishers such as the New York Times (which also published part of the documents) could also be prosecuted. Of course, the U.S. government is not currently going after the New York Times. It is going after WikiLeaks. But Assange makes the case that should not be tolerated:

If we’re talking about creating threats to small publishers to stop them publishing, the U.S. has lost its way. It has abrogated its founding traditions. It has thrown the First Amendment in the bin. Because publishers must be free to publish.

Below are some key exchanges from the interview transcript. Watch the whole interview (Part I above and Part II below).

On whether WikiLeaks is anti-American:

Kroft: There’s a perception on the part of some people who believe that your agenda right now is anti-American.

Assange: Not at all. In fact, our founding values are those of the U.S. revolution. They are those of the people like Jefferson and Madison. And we have a number of Americans in our organization. If you’re a whistleblower and you have material that is important, we will accept it, we will defend you and we will publish it. You can’t turn away material simply because it comes from the United States.

On whether WikiLeaks is playing outside the rules:

Kroft: You’re shocked? Someone in the Australian government said that, “Look, if you play outside the rules you can’t expect to be protected by the rules.” And you played outside the rules. You’ve played outside the United States’ rules.

Assange: No. We’ve actually played inside the rules. We didn’t go out to get the material. We operated just like any U.S. publisher operates. We didn’t play outside the rules. We played inside the rules.

Kroft: There’s a special set of rules in the United States for disclosing classified information. There is longstanding…

Assange: There’s a special set of rules for soldiers. For members of the State Department, who are disclosing classified information. There’s not a special set of rules for publishers to disclose classified information. There is the First Amendment. It covers the case. And there’s been no precedent that I’m aware of in the past 50 years of prosecuting a publisher for espionage. It is just not done. Those are the rules. You do not do it.

On setting a dangerous precedent for future leaks:

Kroft: There are people that believe that it has everything to do with the next threat. That if they don’t come after you now that what they have done is essentially endorsed small, powerful organization with access to very powerful information releasing it outside their control. And if they let you get away it, then they are encouraging…

Assange: Then what? They will have to have freedom of the press?

Kroft: That it’s encouragement to you…

Assange: And? And?

Kroft: …or to some other organization?

Assange: And to every other publisher. Absolutely correct. It will be encouragement to every other publisher to publish fearlessly. That’s what it will encourage.

Kroft: To publish information much more dangerous than this information.

Assange: If we’re talking about creating threats to small publishers to stop them publishing, the U.S. has lost its way. It has abrogated its founding traditions. It has thrown the First Amendment in the bin. Because publishers must be free to publish.

On being an activist:

Kroft: It’s a dirty word. And people think that what you’re trying to do is to sabotage the workings of government.

Assange: No. We’re not that type of activists. We are free press activists. It’s not about saving the whales. It’s about giving people the information they need to support whaling or not support whaling. Why? That is the raw ingredients that is needed to make a just and civil society. And without that you’re just sailing in the dark.

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The Triple Crown

Posted: 30 Jan 2011 07:23 PM PST

History shows us that when disruptive technologies appear, the battle lines are drawn between those who are empowered by the innovation and those who fear they lose such power. So it is with the iPad and its iOS platform, which has sparked a counter attack in direct proportion to the speed of its adoption across the computing landscape. From the desktop to the handheld, from the media it displaces to the media it rehomes, from the companies who benefit to those who are undermined — the pace is quickening.

As my daughter used to say in pre-school, let me undersplain something to one such victim, Microsoft. When you send out your troops to tell enterprises why the iPad sucks, be very careful to not include facts about Windows machines as proof of anything. As a longtime resident of OS/X, I have no use for Windows machines generally. But specifically, nothing about Microsoft-based products comes close to the worst aspects of the iPad circa Version 1.

You know the list: Flash, no Office, etc. These are features of the iPad, not problems. Investing in Flash is like putting money into a parking meter with a one-hour limit. After you reach the limit, the money goes in and doesn't count for anything. Plus you can't get it out. Office creates documents that require email to scatter unevenly across disorganized cc and forward silos where the resulting cloud of authority mangles both management and employee incentives. Etc. is everything else you might want to do on the iPad that Windows machines can do but don't want to because it destabilizes legacy Microsoft revenue streams.

This last point is why comparing a shipping viral product to a non-existent OS-orphaned one is so absurd. But Microsoft is not stupid; they must think they can stall long enough to change the subject again. Which leads to the next surprising iOS data — Netflix streaming via Apple TV passing iPad streams. Actually, it's intuitive if you use both products as I do. Netflix is a cute trick on the iPhone, a traveling companion on the iPad, made for Apple TV and the home screen. With Fox and ABC talking about dropping Hulu in favor of Netflix, Apple TV, and Xbox, the market may be compressing rapidly into a two-party system.

Netflix is interesting because it is the first service to follow the disruptive arc of the iPad. Every time the iPad is analyzed, the projections are anywhere from just plain wrong to what amounts to a niche. Doesn't run applications… now there's an AppStore. Doesn't run Flash… now there's a Flash converter app. Apps don't support a magazine subscription model… Tuesday they will. Won't be accepted by IT… 80% penetration. Will be overwhelmed by Android tablets… Apple will Verizon them with iPad 2.

Netflix: Doesn't run this year's shows… just announced limit of 2 simultaneous streams per subscription. Two problems that actually combine to further growth of the disruptive network. With 20 million subscribers already accounting for a big chance of YouTube style bandwidth, the studios are threatening to starve the service to protect cable and satellite and DVD pricing and windows. The solution: bump up to higher sub price to free up streams for family of four, producing high value customers that finance newer content. Also moving the service rapidly from DVD/Blue Ray to all streaming. What's left? Live news and events, which Hulu Plus is talking of acquiring before Netflix gets too big.

What is reminiscent of iPadnomics is the speed with which the disruption is underestimated, the naiveté with which the backlash is orchestrated, and the resultant vaulting of the service into a near-incumbent position before the deposed incumbents can retrench from the initial mistaken counterattack. Netflix is already at the stage where iTunes was when the music cartel tried to cap it. While Amazon may be a cheaper service without so-called DRM, there’s no device comparable to Apple TV at the end of the value chain.

Instead there are the almostees like Google TV and Spotify, trying to patch together enough coverage to simulate the Netflix/Apple TV combination on the video side and iTunes/iOS on the music side. It’s not so much about Comcast replacement as they want you to think, because live programming has not been built out in this new Net model. A la carte programming is not yet worth piecing together from a cost perspective; it’s easier to keep the cable package and pay the on demand freight as Hollywood continues to roll out mediocre product.

Many of us are spending for a home theater experience plus cable/satellite and testing the broadband cap with streaming over Apple TV and Netflix. Right now for a family of four we’re spending $100 for first run and shifting the mid-tier to 8 bucks a pop plus the Netflix bill for the balance. The first news network to realize they are really competing (and losing – see Egypt) with Twitter and Facebook may talk with Hulu but will think twice before pissing off Apple or Netflix. Then we wait for HBO, or watch AMC or some such to replace them. Already Netflix at 20 million beats Showtime and Starz at between 17 and 18, with HBO not far enough ahead at 27.

Similarly, streaming has disrupted the technology business. Where Comcast and HBO have the most to lose to the Cloud in media, Microsoft and Office do in the enterprise. A generation of netizens is tweeting, retweeting, and @mentioning the stream, before emptying an InBox coming under attack behind the firewall. Microsoft can let some air out of the tire by announcing an OfficeTalk skunkworks project, but taking over the desktop from Outlook without a mobile strategy will be fighting the last war. Redmond is in between a rock and a hard place.

The next version iOS 4.3 supports advanced gestures for navigating between apps. As iPad developers support push notification in their next revs, the difference between micromessaging and the Inbox is secondary to the position in the alert queue. Microsoft could push these realtime messages to the front, but in doing so Outlook is further marginalized by competition with direct messages and @mentions. The Microsoft of the last few years could take part in a conversation about open data, but with Ozzie and Muglia gone and former-Office-now-Windows-chief Sinofsky cementing power, it's a stretch to assume Microsoft won't go classic in its bet on Office as the gatekeeper.

The wildcard here is Mac AppStore, where Apple has the opportunity to unify the social Office as a layer of cooperating apps. Write to the iPad, and run also on the Mac. If Microsoft decides to extend its OneNote iPhone app across Office, they will either up-port it to iPad (and implicitly replace native Mac with native Mac Apps) and damage WindowsPad, or push it to Android with even more disastrous consequences. With Apple TV on iOS, it's write once run anyappware.

Watching Secretariat this weekend reminded me of the iPad/Netflix story arc. After close victories in shorter races at the Kentucky Derby and the Preakness, the Belmont Stakes shaped up as an endurance test thought to bring the speedy come-from-behind horse back to earth. Instead Secretariat broke from the gate and won going away, leaving the field far behind by 31 lengths. Perhaps we're not at the same point in Apple's race, or at the very moment when the studios pull the reins back on Netflix' run. But I wouldn't bet on it.

Should You Really Be A Startup Entrepreneur?

Posted: 30 Jan 2011 05:49 PM PST

Editor’s Note: This is a guest post by Mark Suster, a 2x entrepreneur who has gone to the Dark Side of VC. He started his first company in 1999 and was headquartered in London, leaving in 2005 and selling to a publicly traded French services company. He founded his second company in Palo Alto in 2005 and sold this company to Salesforce.com, becoming VP of Product Management. He joined GRP Partners in 2007 as a General Partner focusing on early-stage technology companies. Read more about Suster at Bothsidesofthetable and on Twitter at @msuster.

One of the most common questions that entrepreneurs who meet me for the first time like to ask is, "Do you miss being an entrepreneur? Aren't you ever tempted to go back and do it again?"

The obvious answer is yes. When it's in your blood, it's in your blood. I guess it's kind of like crack (not that I know from experience). It's addicting. I know this sounds superficial. If you've taken the roller coaster ride that is a startup - you know what I'm talking about.

But I'm very happy now. I'm enjoying being a VC. I thought I'd talk a bit about the differences I’ve experienced between being an entrepreneur & a VC – you know, from “both sides of the table.”

On Being an Entrepreneur

I was asked by somebody recently in a private message on Quora about whether the individual should leave his comfortable job to become an entrepreneur. You would think the obvious thing I would tell somebody is, “yes, of course it’s a great idea.” You’d be surprised. I often advise against it. I really have to know somebody’s personal story and circumstances to know whether it is suitable for that person.

In this particular case I wasn’t convinced it was a good idea from the limited information I had. The following is a short excerpt of what I said,

“… being an entrepreneur is very unsexy. Long hours. Time away from family. Low salary. High risk. High stress. It only looks sexy when you read TechCrunch. There is no shame in being an exec at a company or whatever.”

And I mean this. I’m sure everybody has their own definition of the attributes of an entrepreneur. Some of the ones I would identify are:

Not very status-oriented
Doesn’t follow rules very well and questions authority
Can handle high degrees of ambiguity or uncertainty
Can handle rejection, being told “no” often and yet still have the confidence in your idea
Very decisive. A bias toward making decisions – even when only right 70% of the time – moving forward & correcting what doesn’t work
A high level of confidence in your own ideas and ability to execute
Not highly susceptible to stress
Have a high risk tolerance
Not scared or ashamed of failure
Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff

The truth is that in my experience very, very few people really enjoy the “pure” startup environment: months with no salary, months with no live product and lots of trial, error & rejection. Even many successful entrepreneurs tell me that they’d prefer to do a buy-out the next time rather than go back to square one in a startup. NOT easy.

There are a larger number of people who enjoy coming on when an idea has become validated and thus “de-risked” but I still think this is a small number of people. And also there are a large number of people who would like to do startups in theory, but have high cost bases (family, real estate, school loans, whatever) that makes it very difficult to take the kinds of risks required.

And what gets lost in reading about the glamor of Facebook, Twitter, Zynga, Groupon and the like is that most startups fail. And for ones that do get sold often most of the employees don’t really make huge upside gains. You don’t read about these garden variety outcomes online – only the high profile exits or busts. Mostly you read about fundings, product releases, big valuations, and M&A. So readers of tech journals gain a bias of the chances of success.

I’m not trying to be negative. But I start most conversations with “wantrepreneurs” by saying,

“make sure it’s in your personality type, make sure you have the risk appetite, make sure you can afford to take the risks given your life situations and make sure you know that there is a high possibility your startup won’t be hugely financially rewarding. If you still want to go for it knowing all this and all that you’ll endure – awesome! It’s the best experience I’ve had in life. But not for the faint-hearted.”

You’re in for the Ride

There’s nothing quite like shipping V1.0 of your product. You’ve come full cycle from vision, to hiring some people, raising some cash, arguing about direction, setting a release date, missing a release date, feeling like you’ve effed everything up, regrouping, rethinking, getting back on track and then setting your baby loose into the wild. And then. Whew. Sit back and watch usage. Get your press coverage. Either you arc up emotionally or you arc down. There’s not a lot of flat line.

Snap. Great story on TechCrunch! Inbound calls from partners, people who want to join, “atta boys” from friends. You knew it all along. Your vision was right. VCs are calling wanting meetings. La vita e bella. Uh, oh. Fawk. Facebook DID NOT just announce that! Scoble is saying your best days are behind you? No, I think we can still be huge. We’re just going to have to change our focus a bit. Weekends. Evenings. Regroup. Team losing a bit of confidence in you. VCs pushing out your meetings a few weeks. WTF? Just a month ago they were all emailing you!

Well, you still have 6 months runway. What if we pivot slightly? Not a total change – just a different way of making money. What if we dropped the code that would compete with Facebook and instead go after this other area? Relaunch. Oh, man. Our user numbers are up. Awesome! Loving this new direction. It’s all good.

But … only 2 month’s cash left. Let’s just not pay ourselves for a couple of months. The junior devs need it. They’re month-to-month. I think we can be like the Maccabes and stretch this cash. Do we tell our team? Can they handle knowing we only have 3, maybe 4 months cash? Or if we say that will they all be putting out the word to their friends to look for their next gig?

Great new product release. Another good article. VC meetings going well. Holy sh*t!!! We just landed the biz dev partner we’ve been working on for 9 months. They love us! Awesome! $2 million in VC. Life couldn’t be better. All your buddies want to join. No. Google DID NOT just acquire our main biz dev partner. What? Google doesn’t know if they’re going to honor our contract? We now have to re-convince everybody? But we had a term sheet !!!

You can’t believe it. Eight beers that night. Maybe even tequila. And the next morning – water off a duck’s back. We’ll find a way. Startups weren’t mean to be easy. Back to work.

Anyone who has worked in a startup will know that this narrative is not exaggerated. If anything it’s the tame version. Every one of these events (with names changed) has happened to companies I’ve worked at or closely with. Most of them in the past 12 months. I’ve personally experienced much worse. Imagine how Flurry felt when Steve Jobs called them out by name. They seems to have bounced back nicely.

I remember being a few months before my wedding wondering whether I would walk down the aisle unemployed. It was 2002 – the “dog days” of the Internet and we were running out of cash. I remember an employee asking me whether I’d fill out their paperwork to get a home loan when we only had 3 months of cash in the bank. What do you tell somebody in that situation? I remember having a merger called off at the last minute and having a planning meeting at a pub to figure out how to run a bankruptcy process (luckily, we never had to do it).

And I had all the VCs play head games with me. One investor played chicken with me by threatening not to approve my next-round financing unless I gave him more equity. He wasn’t willing to put in more money but he had “blocking rights.” I had 10 days of cash. He was going on vacation for 2 weeks and told me, “Too bad, I’ll deal with this when I get back.” I literally told him to fawk off and sue me. That is a true story for which I have witnesses. I hung up. He called back and said, “OK, do the deal.”

Really? I had to go there? I learned this lesson long ago – many investors wait until you’re staring at a cliff before committing whether to re-invest in you. It is risk minimization + maximum leverage. I swore never to do that as a VC. Many VCs don’t realize just how destructive this is to team spirit and confidence. Penny wise, pound foolish.

But there is nothing that would ever replace the rush of being on the top of the startup emotional curve. Winning my first million-dollar contract. Getting on the front cover of the most prominent VC magazine in Europe (was called Tornado Insider). Acquiring a competitor with complimentary assets whom we long wanted to beat. Walking into an office at the London Underground and seeing every workstation open and using our product.

I was watching “Meet the Press” this morning and they put a big screen behind the guests with TweetDeck open and showing the constant stream of information about Egypt. That must have been a proud moment in the Betaworks offices.

And on the bottom of the emotional startup curve there is nothing crappier than having to lay off 60 employees in one day. Been there. It tests your soul to have to ask close friends to leave the business. Losing a deal that you had worked on for months after being told you won, having it snatched away from you, will ruin some nights of sleep. There are moments like being on stage when your demo crashes, reading about your competitors raising a ton of cash or having one of your top team members resign that test your will.

My SVP of Sales & Marketing quit 30 minutes before an important board meeting. Dick.

And that’s what it’s like – all superlatives. Your highs are super high. Crack. Your lows are unexplainably low and lonely. It’s the startup roller coaster world. And I miss it.

What do VC’s Experience?

There’s still a cynical entrepreneur in me regarding VC. In my experience many in the industry still think about “my CEOs” or “my companies” as though they are pawns on a chessboard. I’ve heard many a VC comment, “Yeah, I told the company to do A,B,C and they didn’t listen. The management team wasn’t strong enough. That’s why we didn’t succeed.” That’s the rationalization for the failure.

And all too often I hear upon success, “Yeah, I was actively involved on that one. Our advice is what helped them target the right market, hire the right team, build the right products.” And there are some delusional people who really believe it. I remember this attitude really well from working in consulting where people took too much credit for “creating new strategies” and deny any responsibilities for failed initiatives.

The reality is that the majority of successes & failures are created by and experienced by the entrepreneurs. The VC sense of accomplishment or failure is blunted by being slightly removed and by the portfolio effect. I think it looks something like the graph below.

But there are many great VCs also who see the entrepreneur as their customer as they should do and are realistic about how much of an impact we advisors and financiers really have.

We enjoy our jobs. We love working with entrepreneurs. We’d have to be big babies to complain about what we do. We’re paid well to spend time with smart people who want to change the world. We control our hours, our travel and our investment areas. We get to ride your ride, too. But as above, the highs just aren’t quite as high and we don’t have to sweat the lows as much.

Why Many VCs Secretly Envy Entrepreneurs

When I first considered leaving Salesforce.com to become a VC I obviously called all of my VC friends and asked their opinions. It’s a very tough decision to walk away from a senior role at what I consider one of the most successful tech companies of Internet era. Almost universally they said, "Are you crazy? If you’re going to leave, go do another startup? Don’t go into VC."

Huh? Here they were in what I thought was one of the most sought after jobs and they almost all told me not to do it. I was baffled. It was 2007. It was well past the Internet boom, well into Web 2.0, before the really profitable years of social networking and when many in the industry were despondent. Really.

What I garnered was that many VCs secretly wanted to be entrepreneurs. They were envious. Let me explain. Let's say you became a partner in a VC fund in 1995 and started investing heavily in 1997-99. You felt invincible. As John Doerr, the revered partner at Kleiner Perkins said it was, "The largest legal creation of wealth in history."

You were minted. Golden. Making bank. King makers. Internet pioneers. I remember The New York Times wrote an interesting article about it. They talked about how the dream job for Harvard MBAs used to be investment banking where you wore your Rolex watch, drank $200 bottles of wine at fancy New York restaurants and vacationed in the Hamptons.

Suddenly the VCs and Internet pioneers were buying Patek Phillipe watches, ordering $1,000 bottles of wine, getting all of the best restaurant reservations and flying private jets. At the time all investment bankers secretly wanted to be VCs and many did just that.

But the "gilded age" ended quickly. The days of quick flips, quick IPOs and astronomic returns had come to a close. If you became a principal or a new partner in 2000/01 you had a good salary but as it turns out you were very unlikely to see a large upside "carry" return for quite some time. Nobody really talks about this.

So here’s the deal. There are many VCs who have been made partner since 2000 and haven’t previously had an exit of their own. They’ve probably watched smart teams, younger than them, walk in with a paper napkin, get funding, build a modest company and sell it for $20-30 million in 3-4 years pocketing $8 million for each founder. It looks so easy. It looks so alluring. That’s where the envy comes from.

But they don’t have a great idea. And they have the status of being a VC. And a comfortable salary. And the chance at diversified returns. So it’s hard to put your neck on the line and try. But those returns won’t come for 7-10 years for many of them. Some, not ever.

That’s why when I met Mark Peter Davis and heard he was giving up his VC career to run a startup I was seriously impressed. It takes cojones - hats off to him.

So while you’re struggling to get access to VCs and those that meet you seem unwilling to commit – at least take comfort in knowing that many of them secretly long to sit in your chair, as much as you might find that hard to believe. I promise you. They envy your courage, freedom and upside possibilities. Not all VCs want to be entrepreneurs, of course. But I’ve heard it from many, many a VC that they feel the calling to try. Most won’t.

Me? I’m committed to where I am. I have 3 partners with whom I work really well and whom I respect. We have a broader team that have become our close colleagues & friends. I’m enjoying the diversity of working with 6-7 portfolio teams on a regular basis on strategic issues. I’m enjoying watching them grow from nothing to meaningful businesses. Would I take another hit off the startup pipe? No time soon. But I’d never say “never.” It’s such a rush.

Just please make sure to enjoy the ride (up and down) while you’re there. When you finally get off it’s a long line and you have to be really committed to want to get back on.

Roller Coaster image via Rich Evenhouse on Flickr

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