Cogblog

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So for those of you that have not been following too closely, I recently left my day job to focus full-time on an entrepreneurial venture.  And it isn’t Cogmap!  (more on that in a forthcoming post.)

Anyway, during the last 5+ years I have spent working for the man, I have built a nice little LinkedIn network and my policy was straightforward:

This is my non-promiscuous network.  Every person that I am connected to, I am connected to so closely that if they know someone that you want to meet, I can get you that meeting.  Being in the inner circle is valuable because 3rd degree connections work really well via me.

Facebook was my “promiscuous network”.  Since I had my own Facebook app (Football Coach (http://apps.facebook.com/football_coach/ and http://apps.facebook.com/ncaa_football_coach/) I had tons of useless friends that I barely knew and that was fine.

Now I find myself in new, uncharted territory.  There are people on LinkedIn that I know, but not well enough to be able to make the same commitment that I have made previously. However, now that I am doing my own thing, it might be nice for me to be able to take advantage of these relatively weak connections to exploit my own 2nd degree relationships.

One of the things I don’t like about LinkedIn is that, ideally, I would like a way to be able to mark “BFFs” or something, so I can know how strong or weak a 2nd or 3rd degree connection is.  While I know that this probably causes other problems, when I see that someone knows Jason Calcanis and I want an intro to him (I have 14 people that I connect to that know him), I would love to be able to tell who “really knows him”.  I don’t hold my LinkedIn partners to the same high degree that I do.  Especially for someone so high profile and with many partners like that.

Cogmap is out and about.  If you want to meet Brent, I will around soon enough.

Here is where I will be.

NYC: January 19th and 27th, February 3rd

Annapolis: January 26th

Philadelphia: January 22nd

San Francisco: March 7 – 13th

My email: brent at this domain.

If you want to hang, but these days don’t work, let me know.  Going to be really hitting the road for the next month or two I suspect.

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Tons of rumors that AOL is about to acquire Mashable.  In the context of those rumors, I heard comments about whether AOL is willing to write big checks – specifically implying that they were not, coming out of the layoffs, etc..  I have very little to add to the cacophony regarding that specific deal, but I do want to point out a few things that seem interesting to me:

• If I had a newly public company that I was running (like, say, Tim Armstrong), and I thought my company was a mess (like, say, Tim Armstrong probably does), I might be inclined to use my new public stock to go an acquisition spree.  We already heard he wanted to do Associated Content and Time Warner shut him down.  Time Warner probably still has that veto power in the context of board ownership, but if it was an all-stock deal, Time Warner would probably be indifferent to it now.
• If I had a public company and I thought their stock might be flat or go down (like, say, these analysts think), then it would be in my interest to spend my stock like it is going out of style right now.  If every dollar in stock that gets distributed now will be worth $0.90 in the future, that deflation incents you to spend today.  Saving is for people that aren’t earning a negative interest rate.
• If I had a cost management problem, I would either avoid acquisitions that were not going to break even quickly or I would only do the acquisition if I thought it was a key piece of the puzzle.  Of course, the point is that I could still take some risks and try to bring my costs back in line somewhere else.  I assume, on an absolute basis, that AOL thinks that the current cost cutting efforts will bring costs in-line with revenue.  Or close.  That means if they can tell a story that a deal could be accretive at some point, it is an easy story to do.
• My experience with Business Development people is that they don’t get to put on their resume: “Avoided doing a bad deal”.  Biz Dev people are great at painting a story of how something will, given a hockey stick, get to profitability quickly.  They get paid to do deals.  If Tim has given them a green light, they will have a story on how they should do some deals.  If the deal goes south or doesn’t hit a number, it was probably a problem in the integration or execution of the business.  Or changing market conditions.  Or something.

Hey, call me jaded, but I was there when Bebo happened.

So if I was Tim, hell yeah, I would do some deals.  Be shocked if they did not go on a wave of trigger pulling all-stock deals.  A lot of these deals will fall apart because companies will want to get paid recognizing the stock is likely to decline and having that built in.  That could make a deal prohibitively expensive.  But it is certainly in AOLs best interest to make the offer.

Here is an idea: Offer Time Warner $34B in AOL stock!  Blam!

True factoid, based on Cogdata, your sales people are not working as hard as they usually do.

Due to the business cycle nature of Cogmap traffic, there has always been a dip in Cogtraffic as the holidays approach, as our data shows.  If you point to one day that I look at and say, “Ah, a slightly unusual decline starts here”, it is the second Tuesday in December.  Each year, traffic started to decline there in an unusual way.  Isn’t that neat?

So your sales people started slacking there, in case you wondered.

This is also born out if you look at LinkedIn.com Traffic:

Or jigsaw:

So there you go, people shut it down on the second Tuesday of December.

Don’t know if anyone else noticed this, but the wifi in Starbucks now allows you to access Google stuff without logging in and only requires you to login and have an account if you attempt to access non-Google resources.

Shame Google did not consider fighting to make all Internet in Starbucks free.  Not evil, but not not evil…

You bet I am studying the start-up ecosystem closely.

Great article by Bill Burnham recently.  His thesis: It is hard to swing for the fences when investors won’t put a lot of money into an idea prior to finding out if it has traction.  Every business idea has to be based on a quick launch scheme that demonstrates near instant traction.  Something that actually requires rocket science is hard to do in a funding environment where people feel a lot of pressure to put more capital to work in deals.

The second I read this article, I thought of Fred Wilson.  He recently wrote about how he rarely invests in services that are not launched.  Venture Capitalists don’t get much earlier than Union Square.  Charlie O’Donnell, previously an associate at USV and now an EIR at First Round, recently wrote about First Round that he wants to write checks before people even have decks.  This is an interesting tension, because I suspect that Charlie would not think that First Round is trying to be earlier than USV.  But anyway, if the earliest of early stage guys, Union Square, doesn’t do deals until a site is launched, what is someone to do if an idea takes more than a few hundred thousand dollars to get to launch.

I imagine the rejoinder is that people that can’t raise millions before launch have no business starting companies that require millions to launch.  At least, that was the gist of the comments on Bill’s article.  But that really isn’t true.  That is simply a circular and self-fulfilling prophecy.  Certainly, rapid iterations and the inexpensive architecture of Web 2.0 theoretically allow products to get to market faster, but hearing that the market to raise capital for companies that are pre-launch has basically been left to angels for all but the most savvy and experienced serial entrepreneurs is a bad message for East Coast entrepreneurs.

On the one hand, this isn’t entirely accurate, but as both Bill and Fred seem to agree, it isn’t far from the case either.

I knew when I started my new, new thing that I would need to raise capital.  And I knew a fair amount about the process, despite never having raised capital before.  But I learned something new recently that has been a bit dumb-founding:

1. Everyone says, “Don’t pitch the people most likely to invest first.  Practice with people less likely to pitch.”
2. But as it turns out, the people most likely to invest are the people that it is easiest for me to get meetings with and they are the people most open-minded to giving me good coaching.

Funny how that works!

I know I have fawned over expensify a fair bit recently.  I wanted to just point out one more thing.  They recently posted a great job description.

I have always said that I felt that a good job description was a leading indicator of how much the company thought about and cared about a position.  Someone that doesn’t have the time to write a good job description probably won’t be a great manager.  Similarly, a slap-dash job description probably indicates a position that is not appropriately valued by the organization.

Also, asking someone to do some work is a great practice because it identifies people that really care and it is a lot more meaningful metric for work quality than a typical interview process.

No question, I will nick parts of this for future job descriptions I am writing.

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I have talked before about the difference between Twitter and Facebook.  Recently, I said that Twitter was momentarily slumping, but it was just momentary.  I got some push back on that.  Is Twitter suffering more seriously?  Don’t know, but you heard my take.  Let me add this caveat: Twitter, assuming there are no huge changes, will never be as big as Facebook.  Because Twitter is for sharing information with the world and Facebook is for interacting with friends, Facebook has an inherent virality that Twitter does not have in their current model.  Facebook has your friends nagging you to join.  Twitter is where you are missing out on what Ashton Kutcher is doing.  Facebook is where you are missing out on what your friends are doing.  Ashton will never nag you.

While Twitter is a new and different kind of communication from Facebook, the mechanism that they use is not as viral as Facebook because it is about looser linkages of interest than linkages of a specific “knowing each other” relationship.  That is ok.  It just means that it will be a little smaller.  The kind of meaningful data for targeting that they are gathering is great.  Not Facebook great (every aspect of your life), but great just the same.

How many people need to talk to complete strangers?

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I have talked before about how it is far cheaper to build stuff today than it was previously: languages like Ruby, dev environments like AWS, and tools such as Github and Basecamp allow small teams to develop great products for thousands of dollars instead of millions of dollars.

Also, we have talked about how marketing has gotten a lot less expensive for many companies also.  The tools of social media and the ease by which a meme can be spread have never been better.

All of this is great for early stage venture capital.  It used to be that they had to write huge checks to fund product development and marketing expenses.  Now they can write smaller checks.

But I am here to tell you that there is even better news.  The growing science of customer development and lean start-ups has led to start-ups that are out-and-out better.  The odds of start-up success are simply higher than they used to be.  Start-ups have a better idea of how to build a product that customers want.  Plus approaches like scrum and agile have increased the velocity at which great products can be built.

Of course, competitive risk continues to be an issue, but as entrepreneurs systemically work to decrease risk in businesses, investors reap the benefits!