Cogblog

VentureHacks writes a great post: How to deal with lawyers in a start-up.  Now, some people might argue, “that is pretty tough, what incentive will they really have to do work?”, but the obvious answer, that VentureHacks points out, is that they weren’t really feeling incented anyway.  It was a want more than a need and that is a really, really expensive way to make someone feel good for 10 seconds while, in the big scheme of things, affecting very little.

If they think they need the equity to feel engaged, then go find a new lawyer with less emotional baggage.

One of the things I talk about when people start to talk bubble these days is the structure of the bubble and how different it is than the last bubble.  It seems to me like during the last bubble, many VCs were able to get their investments public and cash out, leaving it to public investors to take a bath.  This time around, M&A has slowed a bit and very few companies are going public.  There will be a lot of funds that fail to come out of the first decade of the 21st century showing good returns.

AdReady has now raised $12 million.  Can they really find a buyer that will give those investors 10x returns?

What is interesting about AdReady is that they do not own a network.  They are really a front-end tool for media, but it kind of assumes that all inventory is the same and that performance differences tend to be more about creative quality.  At Advertising.com, I would say that we tend to skew the other way.  We see performance differences in creative, but we also recognize that all inventory is not created equal.

For them to raise $10m, they had to convince Bain Capital and Khosla and others (smart money) that ad inventory is a commodity.  To me, that is a hard sell.  But then, the AdReady team is great and could sell ice to eskimos.   I love those guys, I just think these deals are hard to do.  Probably I think too small.

I did a quick analysis of the last 30 years of my High School and students/former students participation in Facebook. Here is the graph:

The accumulated 70’s and 80’s graduates only amount to 80 people.

The 90’s graduates are less than 500 strong.

The 21st century graduates are almost 2000 and the decade is not even over. There is no single inflection point, but 97 had 46 people and then 98 had 88. 99′ had 93 people and 2000 had 136. Those are the only years where, on a percentage basis, “interesting” growth happened (by that, I mean absolute growth of more than 15 people (so I rule out the years when it went from 3 to 9 or 1 to 5) and percentage growth greater than 30% (91% and 46% respectively))

So this population skews pretty young. We are talking about high school here, so ~75% of the people on Facebook that attended my high school are 25 or under.

My year (Class of 91 - wooooo) had a graduating class of more than 700 and only 27 are on Facebook. Facebook’s efforts to target an older population and business crowd are just going ok, I would say.

It is a shame I don’t have data about when they joined so I could look at how this curve is changing over time. Maybe I should check back in a month or quarter.

Update: Thomas makes a great point that you could compare this to demo data and actually try to build a model of when people stop identifying with their high school - and this might be a better/more accurate thing to do.  He points to a TechCrunch link that shows some basic demo data for Facebook that indicates that ~50% of Facebook members are over 25.   Pretty interesting!  I still want to go back and run these numbers in a month or so and see how they change.

Cogmap is starting down the path of introducing collaborative filtering. Soon, very soon, we will start to tell you maps that you might like, based on maps you have looked at or edited in the past!

We are attempting to use Vogoo, which is a Slope One engine perfect for what we are trying to do. Unfortunately, the documentation is a bit weak. Not terrible, but not great either. I wanted to document a few of my questions and some of the things I did for the next lucky guy!

Set-up

The tutorial tells you how to set ratings, but the installation guide tells you that you should do other things also when you are going to set ratings.  And there are no examples.  Sad face.

I have sat down and tried to implement all of the things they explain at different points and here is what I ended up with (An example, YAY!):

define('VOGOO_DIR','<PATH TO VOGOO DIR>');

include("<PATH TO VOGOO.PHP>");

$vogoo_check = $vogoo->connected;

if($vogoo_check)

{  $rate = $vogoo->automatic_rating($userid,$chartid);

} else { generate_error(0,"Vogoo DB not connecting"); }

Now, I used the automatic rating function because I wanted every logged in view to count as a vote.  Then I use subscribing (which happens automatically on a chart edit), as a “purchase” or indication of love++ for a chart.

Questions

It sure sounds like you can’t do both user filtering and item filtering at the same time.  For a site like this - kind of a social network wrapped around an application - that is kind of bleh.  Ideally I want to say here are the kind of maps you like and then also have a “here are users who dig the same maps”.

Despite my bashing of the documentation, when I sent an email with a question, I got a response 24 hours later…. twice!  So that’s pretty good support and I was using the free version.   Of course, he failed to find my bugs, which in retrospect were dumb bugs.  Hmmmmmmmmmm.

Big Conclusion 

So now we are up and gathering data.  My plan is to run it for a month or so and then look at what kind of data set I have.  According to the Vogoo manual, you have to run a separate php program to compute the links between each item, so I assume (although once again the documentation doesn’t discuss it), that I need a fairly good sized sample.  With more than 3,000 maps, I need a little time to develop and expose relationships.  Once I see what the data looks like, I will begin to figure out how to crowd my UI and add that in.

Now, I am not the world’s greatest programmer by any means. In fact, many would testify that I may be the world’s worst. So take all of my advice with a grain of salt, but enjoy!

– brent

TechCrunch, Read/WriteWeb, GigaOm and others are having a contest.  I figure if everyone that reads this types in “Cogmap”, then I might get nominated.  How many start-ups are there that have raised no money?

I was this close to nominating myself for best business model.  That’s a lock!

Great press release today from Advertising.com announcing their Facebook Application Ad Network.

Federated Media made an announcement the other day, AdBrite has made an announcement, also.

Sounds like tough times ahead for Cubics, Lookery, and Social Media. It is hard to imagine they have the scale to support strong RPMs on a significant amount of inventory. Large network’s strong marketplace of advertisers should position them extremely well to take share in this market. Once they start offering higher RPMs on more impressions, that will make it difficult for small networks to compete.

Popular applications that generate a lot of page views will not be able to get the same eCPM by doing a boutique deal on a small amount of inventory that they can getting significant fill rates from a large network. As the big guys commoditize the inventory, the ability to sell this in an interesting way for small networks should get tough.

Fledgling networks that started with a strong advertiser message by pricing on CPA (installs) like Social Media and Slide will find that the pricing they offer publishers rapidly becomes uncompetitive. The big guys have some of the best CPA deal structures in the world, they will simply have more competitive ways to fill inventory on an eCPM basis.

Crunch, crunch, crunch.