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Gluecon 2011 – Day Two

Day two of Gluecon felt more oriented to the developers attending.  They were a happy lot.

It’s been a long time since I’ve written code, so I spent more time talking with the demo companies than attending breakout sessions, but I did want to note at least one presentation.

Marten Mickos of Eucalyptus gave the morning keynote challenging us to think about macro development trends over the decades.  He posits that we are only at the beginning of the cloud movement, which he predicts will play itself out over the next 10 or more years.  As we transition from the predominant development theme of LAMP to Cloud, our thinking needs to change too.

Where we once though of:

  • code, we now think of APIs
  • scaling, we now think of elasticity,
  • stacks, we now think of ensembles (the group of cloud APIs and services we pull together to make an application)

Marten is a clear thinker and compelling speaker – reason enough to ignore my laptop and listen.  That said, maybe it was the lighting, but seeing his Finnish good looks on stage and hearing the slight accent had me thinking of the Terminator.  Anyone sent from Skynet gets my immediate attention.

On to the demo companies.  Here are some of my favorites:

  • Standing Cloud offers an innovative Platform as a Service (PaaS) solution.  They allow you to quickly create a new image, install many commonly used applications, easily back up the instance, monitor availability, automatically move your images from one cloud platform to another, and more.  Remember the recent AWS failure?  Had you been a Standing Cloud customer, you could have quickly moved your images to a completely different cloud provider.  Yeah, pretty impressive.  Check them out.
  • StatsMix is greasing the skids on collecting, analyzing and presenting internal corporate data.  Think dashboards on the quick.  If you are an internal IT developer and a business manager asks you to start tracking a metric for analysis and reporting, don’t groan.  Instead give StatsMix a try.  In minutes you’ll have solved the problem and look like a hero.
  • BigDoor has made layering game mechanics on your existing site very easy.  At a past company I led, before BigDoor existed, we rolled our own game mechanics and watched a significant improvement in engagement.  BigDoor provides a cloud service that you can expose on your website via a minibar at the bottom of your browser.  They promise to offer widgets soon.  Or, if you have the time and budget you can use their API and customize the game layer on your site.  I wish BigDoor had existed back in 2008.

Glue’s Demo Pavillion of start-up companies was new this year and was a big hit.  15 companies were selected to demo completely free.  What a great benefit to the start-up community.  Thanks to Alcatel-Lucent for sponsoring this welcome addition.

Gluecon was another outstanding Eric Norlin conference.  Didn’t make it?  Take a look at Defrag coming up on November 9th & 10th.

I’ll see you there.

Gluecon 2011 – Day One

If you’ve never been to an Eric Norlin created conference, do yourself a favor and go.

I’ve been fortunate enough to attend several Defrag conferences and decided to check out his Glue conference this year.  What keeps me coming back is that they are so well designed.  They aren’t the huge conferences where you lose yourself and anyone you’re trying to meet.  They aren’t on topics that have been done dozens of times before.  They don’t have speakers who leave you uninspired.

With Glue, Eric has created a community around the white-hot topic of cloud computing and the burgeoning API economy.  Glue introduces you to relevant start-ups, reacquaints you with established companies, and surrounds you with the best thinkers in the space.

Most technologists are familiar with cloud computing and the use of APIs, but what becomes clear at Glue is the vibrant and growing ecosystem that will affect nearly every company out there.  Not having a strategic vision is to your peril.

A few highlights from the first day:

  • Chris Hoff of Cisco gave a rousing opening keynote regarding the weaknesses and disconnects of typical security practices as they relate to cloud computing.  He illuminated why they exist and suggested how they might be solved.  Somehow he managed to use the history of toiletry as an analogy to make his point, which was entertaining and informative in and of itself.
  • Paul Guth of Cloudscaling discussed the complexities of monitoring performance in the cloud, and championed using telemetry that truly reflects the services your users expect.  If a server’s utilization is pegged at 100%, but your user facing metrics are in good shape, you don’t really have a problem.  To those paying attention, he also slyly revealed that he’s a car nut and Formula 1 fan – both good qualities in my book.
  • Dave Asprey of TrendMicro gave a fascinating look at the potential for ambient cloud computing – the use of a volunteer/paid consumer computing devices to create a secure, scalable and very powerful enterprise quality computing resource.  It’s not just for botnets anymore.

Interesting new start-ups demoing their product:

  • ReportGrid offers a cloud-based plugin that gives other SaaS application providers a ready-made analytics and visualization platform.  Instead of an application provider rolling their own, they just use ReportGrid and instantly have Wired Magazine quality infographics. Very cool.
  • LocVox has created a cloud API intended for mobile applications that need military-grade voice authentication.  If you need on-the-fly mobile voice authentication, check them out.
  • Rainmaker has crafted an identity Rosetta stone via cloud API that allows customers to provide a single unique chunk of information about a person and be able to get back a full profile of information about them: phone numbers, email addresses, physical addresses, Twitter IDs, etc.  A bit scary.  I’m glad these guys aren’t evil.

Day two is tomorrow and I’ll report back on other interesting happenings.

Wishing you were here?

 

Instrumenting the offline world

In the last decade there have been major advances in storing, analyzing, and acting upon extremely large data sets.  Data sets that were previously left dormant are now being put to (mostly) constructive use. But the vast majority of information in the world isn’t available for analysis because it isn’t being electronically collected.

This is changing rapidly as new data collection mechanisms are implemented – what engineers refer to as instrumentation. Common examples of instrumentation include thermometers, public safety cameras, and heart rate monitors.

Smart phones are one obvious new source of potential instrumentation.  A person’s location, activities, audio and visual environment – and probably many more things that haven’t been thought of yet – can now be monitored.  This of course raises privacy issues.  Hopefully these privacy issues will be solved by requiring explicit user opt-in.  If so, this will require creating incentives for people to do so.

Foursquare instruments location in an opt-in way through the check in. The incentives are social and game-like, but the data produced could be useful for many more “serious” purposes.  Fitbit instruments a person’s health-related activity. The immediate incentive is to measure and improve your own health, but the aggregate data could be analyzed by medical researchers to benefit others.

In manufacturing, there has been a lot of interesting innovation around monitoring machinery, for example by using loosely joined, inexpensive mesh networks.  In homes, protocols like ZigBee allow devices to communicate which allows, for example, automation of tedious tasks and improved energy efficiency.

In the next decade, there will be a massive amount of innovation and opportunity around the big data stack. Instrumentation will be the foundational layer of that stack.

You need to use social services to understand them

I don’t know if Malcolm Gladwell is right when he claims “the revolution will not be tweeted,” but I can say with certainty that the Twitter he describes is not the Twitter I know. Gladwell’s central argument is that Twitter creates weak ties but social movements require strong ties. I’ve made more strong ties through Twitter (and blogging) than I have through any communications medium I’ve ever used before. The relationships start off weak – a retweet, @ reply, or blog comment – but often strengthen through further discussions and eventually become new friendships and business relationships.

I can see why Gladwell gets this wrong – he doesn’t seem to really use Twitter (he does blog occasionally). I barely tweeted or blogged for a long time too. I read blogs basically since their advent, but social services are fundamentally participatory: reading blogs/tweets is to social services as watching TV is to a real life conversations. I finally relented at the insistence of Caterina, who had the foresight to insist that everyone at Hunch blog, tweet, contribute to open source projects, etc. I now get some of my best ideas from responses to tweets and blog posts, and have developed dozens of strong relationships through the experience.

I made some jokes on Twitter the past few days about Kleiner Perkins’ new social fund.  These were meant to be lighthearted: I only know one person at KP and from everything I’ve seen they seem to be smart, friendly people. But underneath the jokes lies a real issue: the partners there don’t seem to really participate in social services (something they only underscored by announcing their new fund at a press conference that targeted traditional media outlets).

I’d love to engage in a debate with smart people like Gladwell about the impact of the social web on culture, politics, activism and so on. I also think it’s great to see savvy investors like KP allocate significant resources to the next wave of social web innovation. But it’s hard for me to take them seriously when they don’t seem to take their subject matter seriously.

Online privacy: what’s at stake

It is widely believed that a flourishing democracy requires an independent, diverse, and financially solvent press.  With print newspapers set to disappear in the next few years, the future of quality journalism is highly uncertain. This year, the online version of the New York Times will generate about $200M in revenue, a number that will need to approximately triple to support the current Times newsroom.

Most people who understand Internet economics believe that the best hope for online journalism is online advertising. Luckily, online advertising has significant room for improvement. Most of the revenue of the Times’ online business is generated through display ads. The main metric used to price display ads is derived from the rate at which users click on the ads, a rate which today is dismally low.  Thus the Times could continue to support its current newsroom staff if display ads became even moderately effective.

Lots of smart people are working on improving the efficacy of display advertising. Large companies like Google and Microsoft are investing billions in the problem. As usual, though, the best ideas are coming from startups. Companies like Blue Kai and Magnetic are bringing search intent (particularly purchasing intent – the core of Google’s profits) to display ads.  Companies like Media6Degrees are using social relations to target ads based on the principle that “birds of a feather flock together” (Facebook will likely start doing this soon as well).  Solve Media turns the hassle of registration into an engaging marketing event.  Convertro is working on properly attributing online purchases “up the funnel” from sites that harvest intent (search, coupon sites) to sites that generate intent (media, commerce guides). All told, there are a few hundred well-funded ad tech startups developing clever methods to improve display advertising.

Many of these targeting technologies rely on gathering information about users, something that inevitably raises concerns about privacy. Until recently, online privacy depended mostly on anonymity. There is a big difference between advertisers knowing, say, users’ sexual preferences and knowing users’ sexual preferences plus personally identifiable information like their names.  Like most people, I don’t mind if it’s easy to find my real name along with my job history, but I do mind if it’s easy to discover other personal details about me. When I’m not anonymous (e.g. on Facebook) I want to control what is disclosed – to have some privacy – but when I’m anonymous I’m far less concerned about information gathered for marketing purposes.

Before the rise of social networks, online ad targeting services (mostly) tracked people anonymously, through cookies that weren’t linked to personally identifiable information.  Social networks have provided the means to de-anonymize information that was previously anonymous. Apparently, the wall has been breached between 1) my real identity plus my self-moderated public information, and 2) my anonymous, non-self-moderated private information.

The good news is that the things users want to keep secret are almost always the least important things to online advertisers. It turns out that knowing people are trying to buy new washing machines or plane tickets to Hawaii is vastly more monetizeable than their names, who they were dating, or the dumb things they did in college. Thus, there are probably a set of policies that allow ad targeting to succeed while also letting users control what is associated with their real identities.  Hopefully, we can have an informed and nuanced debate about what these policies might be. The stakes are high.

Note:  As with almost everything I write on this blog, I have a ton of conflicts of interest.  Among them: I’m an investor, directly or indirectly, in a bunch of technology startups.  Some of these – including some companies mentioned above – are trying to create new advertising technologies. I am currently the CEO & Cofounder of Hunch, which among other things is trying to personalize the internet through an explicit user opt-in mechanism.

The segmentation of the venture industry

Ford Motors dominated the auto market in the early 20th century with a single car model, the Model T.  At the time, customers were seeking low-cost, functional cars, and were satisfied by an extremely standardized product (Ford famously quipped that “customers can choose it in any color, as long as it’s black”). But as technology improved and serious competitors emerged, customers began wanting cars that were tailored to their specific needs and desires. The basis of competition shifted from price and basic functionality to ”style, power, and prestige“. General Motors surpassed Ford by capitalizing on this desire for segmentation. They created Cadillacs for wealthy older folks, Pontiacs for hipsters, and so on.

Today, the venture financing industry is going through a similar segmentation process. Venture capital has only existed in its modern form for about 35 years.  In the early days there were relatively few VCs. Entrepreneurs were happy simply getting money and general business guidance.  Today, there is a surplus of venture capital and entrepreneurs have become increasingly savvy “shoppers.”  As a result, competition amongst venture financiers has increased and their “customers” (entrepreneurs) have flocked to more specialized “products.”

Some of this segmentation has been by industry (IT, cleantech, health care) and subindustry (iPhone apps, financial tech, etc). But more pronounced, especially lately, has been the segmentation by company stage.  Today at least four distinct types of venture financing “products” have become popular.

1) Mentorship programs like Y Combinator help startups ideate, form founding teams, and build initial products. I suspect many of the companies they hatch wouldn’t exist at all (and certainly wouldn’t be as savvy) if it weren’t for these programs.

2) So-called super angels provide capital and guidance to a) hire non-founder employees, b) further product development c) market the initial product (usually to early adopters), and d) raise follow on VC funding. Often current or former entrepreneurs themselves, super angels have gone through this stage many times as founders and angel investors.

3) Traditional VCs (Sequoia, Kleiner, etc) help companies scale and get to profitability. They often have broad networks to help with hiring, sales, bizdev and other scaling functions. They are also experts at selling companies and raising follow-on financing.

4) Accelerator funds (most prominent recently is DST) focus on providing partial liquidity and preparing the company for an IPO or big M&A exit.

In the past, traditional VC’s played all of of these roles (hence they called themselves “lifecycle” investors). They incubated companies, provided smalls seed financings, and in some cases provided later stage liquidity. But mostly the mentorship and angel investing roles were played by entrepreneurs who had expertise but shallow pockets and limited time and infrastructure.

What we are witnessing now is a the VC industry segmenting as it matures. Mentorship and angel funding are performed more effectively by specialized firms.  Entrepreneurs seem to realize this and prefer these specialized “products.”  There is a lot of angst and controversy on tech blogs that tends to focus on individual players and events. But this is just a (sometimes salacious) byproduct of the larger trends. The segmentation of the venture industry is healthy for startups and innovation at large, even if at the moment it might be uncomfortable and confusing for some of the people involved.

Tumblr Doesn’t Leave Posterous in the Dust (or “Why Facebook is scared of Twitter”)

People do a really crappy job of comparing the success and growth of competing early-stage companies. It’s generally WAY too early to call when companies are just a few years into the (endless) race. Take Richard McManus’ post “Tumblr Leaves Posterous in the Dust“. It’s an interesting post and fine piece of linkbait (I’ve been hooked!), but it’s a pretty simplistic argument.

Let’s ignore Compete entirely (Quantcast is based on real numbers and tends to be more trustworthy, IMO). Here’s the graph that Richard tossed up.

Is Tumblr winning the race? Absolutely. But they started running before Posterous even made it to the starting gates. So the big question is: What did Tumblr look like around 13 months ago? It looks like they were at around 7m global uniques (compared to Posterous’ 2.5m most recently). Certainly ahead, but hardly leaving them in the dust yet.

The big question is this– How powerful is the first-mover advantage? I’m not convinced that it’s that powerful in this particular market. Eventually Tumblr will plateau. The question (that can’t be answered now) is this: Will Posterous plateau at the same point in time or the same point in their product’s lifespan? If it’s the former, Posterous will indeed be eating dust. We’ve got a long distance race where one runner started off slow and is accelerating right now. We’ve got another runner who started the race WAY late but is showing solid acceleration. Either way, 2 years into either companies lifespan is a pretty silly time to call a winner. For a stark example, compare Twitter at year 2 to Twitter at year 6.

Incidentally, this is exactly why it’s silly for people to dismiss Twitter’s threat to Facebook (even though Facebook currently dwarfs Twitter’s traffic and signup rate). It’s not just about growth rate. It’s about acceleration and how much fuel you have in your tank. In other words, it’s about how close you are to the inevitable point where your growth plateaus. For Tumblr and Posterous (two awesome companies that I think have a bright future), it’s WAY too early to call.

Why You’re Going to Hire the Wrong Designer

“We are not UI experts but do know when we see a good design.”

I saw this on a mailing list I occasionally read, in a post where a company was looking to hire their first design employee/contractor. I think it’s a big part of why hiring designers is a process that often ends in failure: because most people who aren’t UI experts (heck, most UI experts fall into this camp as well), don’t know when they see a good design.

The challenge, of course, partially lies in the definition of “good design”. Let’s run through a few, in increasing order of importance.

Good Design = Beautiful/Cool Design

In this arena, we might actually know when we see a good design. We often have pretty good instincts on beauty and have a lifetime of training in understanding what other people find beautiful. Beautiful design can be important– but on the web it doesn’t seem to be a necessary element to success. Take the top 50 sites on the web. For a designer who primary considered themselves an artist, how many of those sites would be a source of pride if they were in their portfolio? Designers who primarily seek beauty/coolness often get lost in their own sense of beauty and engage in what I like to call “design guitar solos“– the visual equivalent of the talent-intensive squeeling that guitar pros engage in which only another guitar pro appreciates (or even understands). In the web design world this can range from a nuanced photoshop manifesto with dozens of layers to an incomprehensible JavaScript-powered UI. With great power comes great responsibility– and oftentimes a simple melody is the most effective song.


(note: grabbed from a 1994(!) article post by Peter Morville)

Good Design = Elicits the Desired “Feeling/Motivation”

This brings us closer to a good definition of effective visual design. While it’s not a web site, take a look at Apple’s FaceTime commercial. It’s simple. It doesn’t have the cyborg eyes and spinning globe of apps that Android’s recent commercials do. The design lead on that commercial didn’t get to do the metaphorical equivalent of playing a 12-minute solo behind his head in front of a sold out crowd. No epic visual effects. Just an emphasis on generating emotion– and pretty damn effective as Apple keeps trying to battle their way to the other side of the chasm. (Side note: I think Android’s robot craziness isn’t all that bad– they are currently aiming at early adopter geek-types. Remains to be seen if that’s brand they can pivot away from when the time comes to court “normals”. It wouldn’t be the path I’d choose, though!).

Good Design = Measurably Gets the Job Done

(note: Dave McClure is putting on the WarmGun Conference on October 8th that’s centered around conversion-centric design – Check it out)

THIS is the kind of design that very few people shop for– and indeed, don’t know how to shop for because they can’t “know it when they see it”. As I’d asked in a post WAY back in 2007 (“Do Designers Deserve a Seat at the Strategy Table“), when was the last time you saw a web portfolio that talked about metrics and goals? That talked about how the new design kicked the old design’s ass as far as the numbers were concerned? That talk about an X% SEO lift over Y months? On multiple occasions, I’ve seen uglier designs tromp prettier ones, and we can look at the aforementioned top sites on the web and see that it’s chock full of ugly.

One thing that’s important to note– the experts are wrong just about as often as they are right. As a self-proclaimed expert (!), this is hard for me to stomach, but it’s true. Check out this (somewhat murky) video of the head of Microsoft’s experimentation efforts. There’s plenty of gold here. First, he runs through a couple of design variations and asks the audience (chock full of startup geeks) to guess which performed better. By and large, the audience was wrong as often as they were right. Taking this further, Ronny tells is that the internal experts at Microsoft had similar luck. Said another way, the smartest people about UX and conversion made educated guesses, tested those guesses, and found that their efforts improved their target metric only SLIGHTLY more often than they made it worse.

Good Design = An unseemly mashup of Usability, Marketing, Credibility, and Usefulness

The problem gets worse, because “getting the job done” isn’t just about pure conversion mechanics and A/B testing.

  • There’s design STRATEGY (most of the above is about tactical design). Is your designer the type of person who wants to have stategy handed down to him? Or is he the kind of person who is going to agitate for a 2-sided referral program? Or something clever like UrbanSpoon’s Spoonback effort?
  • Are they thinking about marketing? Do they think like a user? Do they understand your market? Do they want to? Marketing isn’t just about outreach– there’s a whole discipline around understanding a market, getting their feedback (from user studies to poring through support/feedback email), etc.
  • How do you deal with the conflicts between what your business wants the user to do and what THEY want to do? In my opinion, the best businesses have those goals perfectly aligned– but any ad supported site knows that their job is to find exactly how aggressive they can be with ads and pumping page views.
  • What about SEO? Content sites need to optimize for SEO. Yes, the first rule of good SEO is quality and linkworthiness. But there are design/markup considerations, anchor text concessions to consider, and more.
  • Load time. There are breathtaking studies about the effects of page load time and conversion. How many designers obsess about speed? Not enough, given that adding 2 seconds to page load showed a 4.3% reduction in revenue/user.
  • Considerations vary wildly based on the type of offering. Sites that you use every day clearly need to be faster/leaner. Are there sites out there that can afford to be slower? Apple, for example, serves up enormous (and gorgeous) photography on their home page.
  • Does the designer love writing headlines? Writing is one of the biggest parts of design– if they’d rather you do all the writing and prefer to work with Lorem Ipsum text, they have a big hole in their skillset.
  • How much do they like saying no? At any company larger than a few people, designers meet the “too many cooks” problem fairly quickly. Good design is not only a bizarre blend of graphical, technical, marketing, strategic, and writing expertise– it also requires a healthy dose of political acumen and salesmanship. What are they going to say when Alice swings by their desk and says, “You know what? I think it’d be awesome if we had a block showing our twitter feed on the home page. Maybe with one of those cute blue birds at the top?”

The problem with hiring designers (and the reason that they so often don’t work out as contractors or employees) lies squarely on the shoulders of the people doing the hiring. They’re still looking at screenshots in portfolios and saying, “Beautiful! Wow! This must be our guy/gal,” when they should be looking deeper.

If you aren’t getting rejected on a daily basis, your goals aren’t ambitious enough

My most useful career experience was about eight years ago when I was trying to break into the world of VC-backed startups. I applied to hundreds of jobs:  low-level VC roles, startups jobs, even to big tech companies.  I got rejected from every single one.  Big companies rejected me outright or gave me a courtesy interview before rejecting me. VCs told me they wanted someone with VC experience.  Startups at the time were laying people off.  The economy was bad (particularly where I was looking – consumer internet) and I had a strange resume (computer programmer, small bootstrapped startups, undergrad and masters studying Philosophy/mathematical logic).

The reason this period was so useful was that it helped me develop a really thick skin.  I came to realize that employers weren’t really rejecting me as a person or on my potential – they were rejecting a resume.  As it became depersonalized, I became bolder in my tactics. I eventually landed a job at Bessemer (thanks to their willingness to take chances and look beyond resumes), which led to getting my first VC-backed startup funded, and things got better from there.

One of the great things about looking for a job is that your “payoff” is almost always a max function (the best of all attempts), not an average. This is also generally true for raising VC financing, doing bizdev partnerships, hiring programmers, finding good advisors/mentors, even blogging and marketing.  I probably got rejected by someone once a day last week alone. In one case a friend who tried to help called me to console me. He seemed surprised when I told him: “no worries – this is a daily occurrence – we’ll just keep trying.”  If you aren’t getting rejected on a daily basis, your goals aren’t ambitious enough.

Howard Lindzon’s “Web is Dead” series

Howard’s Stocktwits interviews are always really fun.  Some people don’t get his subtly self-deprecating sense of humor but I love it. Besides discussing the usual suspects (Facebook, Twitter, Apple), we spend some time trashing Wall Street and chatting about some early-stage startups including Founder Collective investments Bnter, Giiv, Ze Frank Games, and Canvas (founder of 4chan Moot’s new startup).  Of course I also shamelessly promote Hunch.

Also, Fred Wilson’s interview with Howard is a must watch.

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