dabig littl-thangs

naughty ashanti
Originally uploaded by benbarren

amazing how in a no longer a startup not quite a pounding business, the little things outside your control, sometimes seem like a horse that gets pipped at the line, which can grind u into near submission, but then u get a little boost if you wait x + 1, and something good happens - u get paid - to put petrol in the car, customer pays a bill, u get good feedback on a UI u have been working on, and suddenly u r off and running again. sometimes the finish line seems far away, sometimes its downhill on the last km of a run where u have alot left in the tank. u never know, but if one thing is sure, the winners are the closers that push themselves that extra yard, when it really hurts. As Mathew Ingram says "Let’s face it — the biggest problem with the Semantic Web is that it’s as boring as dry toast. "

im into it.

gemballa caymanS
Originally uploaded by benbarren

Lifestreaming has hit that post alpha crescendo, so now people outside Mountainview can use them, Ive registered/setup friendfeed and iminta. Both are very nice executions with FriendFeed being very gmailish (as thats where their team came from) and iminta is very neat UIwise and breadth of services it offers.

This space makes me wonder how it will verticalise once every rss feed and API can be used, not to mention more implicit attention behaviour. Not to mention I'm pondering how lifestreaming applies at a local/discovery level.

My Iminta feed is a nice way to get all my delicious, google shared items, flickr, twitter and blogger content all in one subscription. My friendfeed feed is here too.

"A man without hand is not a man. I've got so much hand I'm coming outta my gloves."

vc money
Originally uploaded by benbarren

Needing VC/venture/angel /seriesA/bridge/heck ill take anyone's money is exactly the same as in the early days of a should i stay with this person or not relationship when ala george costanza "hand" episode, if one side is too clingy, needy, dependent, the other will run.

So when your potential investor calls you or your team back for the 15th time, to organise the next meeting, and you are having troubles filling up your petrol tank, you dont really want them to know that you know the price of petrol, and think it's too much. (driving 4 hours+ most days at moment im thinking alot about petrol costs)

"I need hand. I have no hand" says George... leading Kramer to suggest "the pre-emptive breakup" so George can "turn the tables"... "I'm afraid I am going to have to break up with you..." To which the girl says "I dont understand, didnt we have fun doing the crossword puzzles... What do you want ? I know I can make you happy.." George "When u r playing the piano do u think about me ?"

And finally a penultimate scene happy George : "A man without hand is not a man. I've got so much hand I'm coming outta my gloves." - So preemptive breakup with investors may be the best way for me to close my financing and get back to the business of building a business ? :)*

* Epilogue : Im going to ignore the final scene : Girl to George : "I'm breaking up with you"... George "You can't break up with me, I've got hand" - Her : "And you're going to need it."

Also : Seth Levine, whose foundry vc wizard bloggers are talking up their new fund, has an interesting post on the 2stealth or not2stealth debate about whether u should be telling people what u r doing in the build stage. (in most cases i'd say yes, without disclosing pertinent issues, unless u have a shock and surprise have a look at our proprietary dazzling technology....)

mini-nova cofounder on what to buy with 4 billion downloads

Maybach Landaulet
Originally uploaded by benbarren

I've been catching up on Underbelly, The Wire and tonite I have scheduled There will be Blood, so Mini-Nova is definitely my friend, and now they're up to 4 billion downloads. One of their co-founders - Niek - is living it large.*

Torrent Freaks : "I would say this was a pretty nice year. We just bought a Palm Tree island in Dubai (we chose the bottom right leaf, for those who’re interested). I also received my second Bugatti Veyron last week (bonus for the increased Q4 numbers). Oh, and don’t forget to watch MTV Cribs next month to see all this stuff."

* niek's quote may (appear to) be sarcastic but i think he is using reverse psychology + is indeed taking his advertising revenue and driving a veyron around a custom built dubai island.

serial samwer bros'

amerykah
Originally uploaded by benbarren

The Samwer brothers, who are the euro investors and right holders for facebook, def have a neat track record. Neat ? its fn awesome. From Web 2.0 Money : "After selling the German Internet auction site Alando.de to eBay for $50 million in shares, the brothers have made names for themselves and have become even more involved with startups since. After a brief spell working for eBay, they then set up ringtone firm Jamba, which they sold to the U.S. company Verisign for $273 million in shares and cash in 2004. Little later they have also invested in the German Twitter clone, Frazr, and a handful of other startups. Interestign fact to note is that the Samwer brothers also invested in the Facebook clone StudiVZ, which was sold about a year ago for $112 million."

The Steve Stiffler Semantic Search Dance-Off.

meta-NSFW luvulongtime
Originally uploaded by benbarren

I knew there was a reason to subscribe to the hakia blog. It wasn't so I could read about the next google before it met the techcrunch-popsugar effect; Nor was it to learn about deep semantic search technology which I could apply to my own venture; It was to see a Geek Fight, Dr to Dr, both quoted in Forbes, we could have worked at Nasa together, been alumni, this is a full on Nerd Dance Off.

On one side we have Dr Norvig (of Google) : On the other - The Contender - Dr Berkan (of Hakia) It's already got a Jason Bourne Cold War, set in Russia feel to it. Or that film Vin Diesel did after Fast and the Furious ? (and before his career ended)

Hakia's Agent Berkan's blog post seems in response to Norvig's quotes in Forbes about his Semantic coming of age in 1978 : "The result was kind of like a dancing bear," he says. "It was amazing that it could dance at all, but we didn't expect it to star in the Moscow Ballet."" (subtext : 'i did what hakia did 3 decades ago at university, and it bored me.")

So Berkan goes Berko Stifler: It's on like Donkey Kong, beeyotch; "We respect and admire Google (how can you not?) for its simplicity and performance. However, this is 2008, and bear the-semantic-search is not only dancing tango today, it is about to get into ice-dancing pretty soon."

"It's unlikely," says Norvig. "But even car companies have to worry about anti-gravity machines."

Steve Stifler: It's time for me to boom-boom with the bridesmaids, Finch-fucker. 'Cause I'm gonna hang out with my wang out, and rock out with my cock out.'

rolling in your $16m phantom googmobile.

schweet ride
Originally uploaded by benbarren

Damn how's this Rolls Phantom coupe interior ? This scissor door coupe is the waaay to roll. The only way to get this as your trip to the supermarket ride, is have your company bought by MicroHoo or the GOOGmobile - who in 2007 made 17 smaller acquisitions at an average of $16m each which is not bad coin if you can get it.

PaidContent quoting Google's latest filing with disclosures on 17 of their smaller acquisitions in 2007 : "Besides DoubleClick and Postini, during the year ended December 31, 2007, we also completed seventeen other acquisitions. Three of these transactions were accounted for as asset purchases; the remaining 14 transactions were accounted for as business combinations. The total initial purchase price for these transactions was $281.6 million."

Business Model is in the Eii of the....

So if there's one thing that comes up during investor discussions, and keeps you awake at night, it's whether you are working on the right business model. If not, all the hard work may be for nought. The longer your business has been around, with more results/data to measure, the less excuses you have to not have the business model right.

Fred Wilson's post nailed this home for me over summer, which showed that the majority of companies he has invested in, have had to rework their business model to get a successful outcome; "Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial transformations of their businesses between the time we invested and the time we sold."

One of the reasons I have been happy to not take substantial capital into our business in the early days, was we didn't really have the exact 'market ratified' business model. ie one that customers have paid for, with more lining up to do so. To quote A VC again : "Most venture backed investments fail because the venture capital is used to scale the business before the correct business plan is discovered. That scale/burn rate becomes the cancer that kills the business."

When I started looking at what business to start late 2004, early 2005 - it was RSS that most piqued my interest. Using MyYahoo for the first time, starting a blog (with rss) and learning about The Feld Mobius backed companies of Feedburner, Newsgator + Technorati - made me think there was a local business model for RSS. Having spent 1995-2004 in fulltime work largely for large online publishers and consumer companies (ninemsn, sensis, virtual communities) working on large traffic top 20 Aussie websites - also had me not wanting to jump solely on the online advertising train.

Hence the original Feedcorp business model was a hedge of consumer RSS (that being gnoos.com.au - an aussie blog search engine) and Feedcorp - enterprise RSS services, which I developed broad products and spreadsheets for that had services such as Feed Creation, Feed Syndication etc - for publishers. Without really knowing what these products were going to be, or how they would make money. Let alone how gnoos + Feedcorp would interrelate. (other than both being their own Pty Ltd companies, and having the same owner : Red Lion Ventures Pty Ltd, which my cofounder and I owned shares in)

What happened then was the near standard startup experience : It took 3 times as long to ship the first version of gnoos, at 3 times the budgeted cost with 1/3rd of the features it was meant to have (search was meant to be a secondary feature to subscribe and share features which werent shipped) The TechCrunch effect happened after local and overseas traffic, which built investor interest, traffic soared and then dropped, money ran out/low, as investor negotiations continued on.

During this period, no was said to great potential investors who would have funded the life of the business and allowed founders to be paid market (6 figure salaries) as management. But control provisions would have made it almost like a sale of the business, before it had really started. Often when you need financing, the investors or the terms they offer, you know are not right - but may make your short term pain solved. Luckily (prob for both parties) we were able to come out the other side, with our business model much more attuned to the market, while still fitting with our overall vision of blended RSS services for local publishers, and consumers. In this case, a bit more bootstrapped pain allowed us to find the right business model.

On the sales side at this time, speaking to publishers who had noticed our gnoos launch, and thru the standard biz dev portal contacts, what we were meant to do was sell enterprise RSS solutions such as Feed Creation etc. What publishers wanted though was tailored online communities for their verticals. So that is what we started working on for business units of News Ltd + PBL Media.

While these projects didnt make us rich (at all) they did keep the lights on and pay for the maintenance and upkeep of gnoos (whose index of Aussie blog feeds and posts continued to grow and required lots of technical babysitting) Unfortunately it didn't pay for the build out of new features on gnoos, and meant the business became orientated around the 'customer' - The definition being the person who pays us money.

As we grew the business, by sub-leasing office space in more central Prahran where clients and contractors wanted to come (rather than our cold elsternwick converted house office), and we (finally) closed that angel round (12 months later!:) - we started taking on new customers that generated more revenue, but were slightly outside our original scope of enterprise and consumer RSS.

All of this is background to now, in which investors looking at our business model(s)? - have each had different bias towards different parts of the business. We have high net worth individuals as shareholders (but not tech experts) who like the blended businesses, and consider it a bet on "Web 2.0". Newer potential investors have expressed interest in investing in Feedcorp (as it generates the most revenue, and does so from blue chip publishers)

While another who is kicking the tyres is interested in the gnoos enterprise opportunity - which currently supports enterprise customers who using a django/amazonWS framework syndicate portions of the gnoos index (eg travel, auto content) onto an extranet we host, that they can then view live content like an RSS reader setup custom for them.

This investor isn't as much into the Feedcorp community side, as they consider it highly competitive space with services like ning.com, and see it as a way we generated revenue and customers in the 'early days' but post-investment, they view it as non-core to the blog syndication + social intelligence space. Ironically the other investor considers gnoos non-core due to its lower perceived revenue opportunity and potential to beef up costs due to technology upgrades.

So this is what I think about at night : Getting the balance between the money in my back pocket (as you have to always assume an investor deal will not happen and run your business accordingly) and the setting the groundwork for a scaleable business. (that isnt just a web2 developer)

I think the equation is less 2 dimensional, and have been trying to better be able to communicate this. If I go back to my original business model of Feedcorp it was to make money out of feeds and RSS. So even if we dont sell Feed Creation solutions per se, the consequence of us building online community for publishers, is that each of their users that create content that has a public rss feed, which thru gnoos we can index. So in addition to (large topline) revenue from community projects (where there is actually low competition for blue chip publishers in the high end verticals like auto-travel-finance-realestate etc vs the horizontal lowbrow porn based nings), the overall Aussie blogosphere is increased, and we have a more valuable gnoos index. With a model that would scale to other markets with exactly same problems whether that be India, UK, etc

A recent post by Jeff Nolan VP of Newsgator (who have always straddled the enterprise and consumer RSS markets, to their betterment) makes a good case to have a blended RSS model so you can create a true RSS eco-system : "Simply put, attention infers content authority and quality; if you share something I can make an assumption that you found it useful, which we can then use in our attention algorithm. The scoring generated by our attention algorithm can be used to make search more accurate, and it can be packaged as an API that we make available to our partners to enable their services to better filter and sort content. "

For Feedcorp, as well as our gnoos consumer offering helping us understand relative feed and item popularity, our enterprise community projects, help us be able to aggregate high quality and quantity of structured user generated content in verticals of high interest to gnoos syndication and intelligence partners : And we do so, with the help of market leading customers, in verticals where there is currently a dearth of content; The Aussie blogosphere for example, being largely invisible, and also behind the US, has not had millions of people writing structured restaurant reviews like they do on Yelp.com, or share finance tips on Wesabe.com, or recommend travel destinations and accomodation on TripAdvisor.com.

By providing publishers with the structured tools for their consumers to create reviews, click favourite, and share focused recommendations on their blog, as part of a publisher owned community - this when combined with the unstructured Aussie blogosphere found on wordpress.com, blogspot.com, myspace etc - this overall index is what we still believe is a valuable asset to build. When combined with enterprise filtering, and feed syndication tools, and dare I say it widgets and both commercial and non-commercial API's - this to me is this the Feedcorp business model. And the one I intend to build out.... with funding.

The investors that we will hopefully bring to the table, will "get" and in fact invest, because of these interdepencies between the consumer, enterprise community and content syndication/intelligence spaces. It's just getting them to the A-Ha moment, as Aussie investors don't blog or use these services themself beyond a cursory search google level.

It will also probably mean product and clientwise, that projects that do not assist the business in growing the amount of feeds it indexes and then distributes, will not fit into our core operations. Focus, focus, focus.

And there is also that pesky gnoos.com.au site repositioning, away from being a pure (Aussie) blog search engine.. and into a more outside.in/topix meets clipmarks/assetbar type offering.. but anyway thats another post altogether...

Getting Paid. Getting Paid Enough. Getting Paid Again.

Growing up in Kosher friendly South Caulfield - the basis of business being to sell something for more than it costs - was distilled into me, if not from my arts/religious orientated family, then thru friends whose families ran businesses.

In contrast, during the dot com period we had the whole CMGi started it, Geocities, Broadcast.com days of websites being valued on a multiple of the number of users they had. (and there's alot of that still around in 2.0) Combined with working with McKinsey people at ninemsn who loved Discounting Cash Flow Rates to a Net Present Value, I also completed a Masters of Entrepreneurship and Venture Capital with multiple classes on cashflow planning, and entrepreneurial finance (the blog title "Getting Paid. Getting Paid Enough. Getting Paid Again." is by Professor Kevin Hindle who coined this phrase into his "3 Minute MBA" @ Swinburne)

Anyway, It all pretty much counted for nought (although it probably helped condition my deep subconscious in preparation for this moment;) for me till I ran my own business and had to make happen the inputs and outputs; Suddenly there wasn't a magic finance department that advertisers paid, who also provided a company car, petrol card and fortnighly pay. (or dole cheque as i called it during the dotbomb period@the yellow mob.)

Until you have to generate the revenue, collect it, raise the money (also collect it), then also on the cost side ensure the great people you have engaged are paid, you dont really have a 'full perspective' on whether you are a suitable match for being an entrepreneur. And the superbonus can be, you yourself may have had a great year (in 2007) - Generated alot of work, delivered pretty much on what you said you would, created a whole stream of great activity with possible longevity. The catch (if you want to call it that) is you as an owner, are left (in effect) with a percentage of the net difference between the price you charged (and were paid) for what you sold (plus capital raised) minus the costs and investments of the business.

Basically if you didnt charge enough from customers or spent too much (using the best people because you care about the end product), or didnt raise enough capital - then you pay. oh yeah..... :D

Factor in that getting paid in the month of January when people are holidays is a rather delayed activity, and your (Aussie) summer period, you can end up twiddling your thumbs on your unlimited blackberry plan. Except unlike in a corporate gig, in which your fortnightly /monthly paid enters your bank account like a metronome, in a startup, you need to put petrol in the car and go see clients (ask nicely about invoices) and you need to keep staff engaged and paid (as best you can) while you collect dues.

For our business, there's also been a gradual evolution in pricing online community/web2 solutions. Projects (where clients in effect outsource to us) have gone from in 2005/6 toe in the waters with budgets in the tens of thousands, to ones in 2007 worth $100K+ to 2008 in the low hundreds of thousands. We've in effect been learning alot about what types of people (and who they are) are required for these projects, how many hours/days, the rates, and thus how to price.

All the while finishing different multiple parallel projects with different pricing models and income. (eg some have cost us money and were in effect 'investments' in a non-accounting sense :S) Not to mention what happens with setting requirements, and parties expectations and any variations within. Especially in an area that is new (so hard to scope upfront), and where people's passions are usually high to do exciting things.

By next January, one option is (if we don't take funding) to continue to position as a premium offering (but cheaper than the extortion that is the traditional marketing agency pricing) and one that has margin, and thus create some income for its owners. (heck i could buy a newsagent like retiring umpire goldspink and make $150K profit a year yeh ? so why shouldnt i in this business ?) Investors though dont necessarily want this type of business profile. They want to either maximise the potential revenues (to get a higher valuation in the next round through rocketfuelled investments in sales, technology, marketing etc)

Other investors want a less money upfront model and a more recurring revenue type model, buoyed by the success of Saas/Salesforce/Atlassian type companies. (and some - potential acquiring types in the media/consumer space - just want the new new thing with krazy user growth and/or some really wacky semantic web shit their competitors dont...)

To give a practical example, instead of charging $300K for an online community over a 4 month build (with the hope but not the guarantee of ongoing work) - many investors would prefer a business model that charged $30K upfront and then $10K per month (and thus recouped the equivalent amount in 24 months) - With the hope of getting more clients signed up (higher volume) and who used the solution long term (ie 2 years and over) But should I change my business model because a VC in a meeting recommended such as tweak ?

I'm a fan of the SAAS/hosted services/self service model - Who wouldnt be:) ? (with funding for the right tech infrastructure build out) But the difference between being a VC analyst or corporate strategist, who looks at these as just some numbers in a spreadsheet on a deal they are working on : For the entrepreneur, it directly affects the money in your pocket. So you can put petrol in the car, and collect the next invoice and make payroll :) Also, so when you get to next January.. you've got crazy bling.. (ok well maybe not crazy bling.. but..)

(..... story continues.)

I was going to blame my blogging death on twitter. Score 1 - Microblogging. Once you go from multiple daily 500 word posts to bi-hourly 140 characters blackberry texts, your pen-ultimate stop is when you end up just clicking "share" on 5-12 posts from the 1200 feeds you read on google reader and think 'thats close enough to blogging'. But, the final nail in the coffin was the Moleskine Storyboard, which took most of my documented thoughts onto a 9 x 14cm pocketsize book. BenBarren.Blogspot.com didnt have a chance, till now.

There were a few other annoying complications, my landlord decided to make my lovely beachfront rental apartment in Aspendale a $1250 per week B+B, and the off Greville Street office, we were sharing is being moved out of today, with other bidders such as MTV attempting to takeover the digs. So I'm currently commuting 4 hours a day, boarding with 'fam, and within the month finding a new palace and daytime workshop. 3 years ago this would have scared me : "I need security". Now the cliff doesnt seem scary, it's just a cliff. It's there. It will go away. We'll end up with our own offices, and a place with a better view to go home to.

This is all while my Feedcorp day job grows its clients to a 7 figure annualised turnover business that requires systemisation, scalability, and other icky stuff like account management, business analysts, production managers, technical architects and a stream of designers/developers, and the other usual ensemble of folks. We've learnt alot about what works, and what mistakes we need to not make twice.

So to help make 2008 "The Year" (just as the US say "2004" was the vintage year - Australia is always an Olympics behind) I was lucky to land the best of blokes (and a track record to match), to run (ooh they bought in a CEO) and expand the business development side of Feedcorp - Mr Pete Burley. Which will hopefully allow me to have a shot at making gnoos what I intended it to be, and help commercialise some of the customers we have for it on the enterprise side which is very interesting in an inform.com meets newsgator.com sort of way.

Racking up a $400 Citilink bill since November when Pete came onboard, a similar amount of parking fines in the City and Prahran seeing clients/investors has also been a by-product of the maelstrom of activity since November 1, where there has been something like 40 new business and investor meetings and multiple 6 figures of new business. I'm behind on about 15 proposals. (we'll knock em off friday burls, promise!)

Not to mention getting our existing enterprise projects in travel, employment and automotive out of testing (where 2 of them are) and building (where another 2 are) onto the internet, and see how our clients' clients (the consumer that is) react to some of this local 2.0 stuff. We've certainly enjoyed playing with these tools as we build them, but you need to set the kids free at a point.

Growing a startup into a business, all the sexiness of Web 2.0 (oh i remember and love the 987 blog posts I did in 2005) can at times wear off. Business 101 topics like cashflow planning (who pays bills in January, when they're on holiday) and people management (clients, investors and staff are all different beasts with different famishing needs) also has become the central part of my day. Damn, Web 2.0 just became a day job. But that's good.

Thankfully, all the things keeping us up at night are good growth problems. Just like avocado is supposedly full of good fat. There are far too few local companies in the Web 2.0 space (if u want to call it that for ease) that have scale, hyper or solid growth, valuable technology - that are making money or have the chance to in the future; By which I mean companies that are or could be such valuable assets that they just must be owned by someone else at a premium, because replication would take too long, be too hard, and just too risky to take.

Knowing how hard it is to do (build a valuable company that creates more dividends individually than a job/freelancing etc or is acquired etc + being able to scale/keep your site up/pay bills/keep investors happy etc) I only feel empathy for the other Aussie startups trying to do it locally, but I wouldn't say I'm too optimistic on the likely 'home runs' with far too many consumer only/google ads/low cost plays, that are still pet projects not scaleable businesses.

Among the 40 meetings done in the last couple months, there has also been a decent amount of time spent with investors. It's definitely better to be raising money, when you are making it, and don't need it, but all the regular cliches about early stage investing in the Australian market are true. Don't expect local versions of Fred Wilson and Brad Feld to exist. They may visit the local wineries, but their equivalent peers or ex-googlers investing at seed stage just dont exist much here.

Outside of The Brighton Mafia (for those Melb based), who have had successes such as Hitwise and Seek, there are the high net worth new money investors, who were making bucketloads of money in uranium and resources, who logically you would think would want to change their asset allocation policy away from resources into technology. To reinvest. But no. "It's just too easy to make money in uranium" they'd say in 2007. Now the market has crashed, and Tricom margin loans called, people are "staying away from Private Equity" fullstop. "Spooked". "Wait three months they say." "Valuations will drop."

The other type of investor you encounter is the professional "VC" and General Partner of a fund. This isnt a First Round/Mobius/Union Square looking for Semantic Web opportunities. It's a back to basics explaining Web 1.5 and see if you have "globally scalable technology" which is unique. Or for other locally based investors it's about "owning" the Enterprise Web 2.0 market selling a range of acquired, invested or licensed properties. Some want to flip it around and do small cap IPO's of consumer web properties, although some of these plans have been flattened since their BlueFreeWay posterchild went from $2+ to 26 cents by trying to build out a consolidated Blu online marketing platforms. Aaagh "platforms" - Australia is certainly a world a way from the Facebook vs OpenSocial world in the finance world.

But, as always the interesting thing is the (social network) app developers beavering away around new API's, and the Skitch type dudez that are innovating on creating new types of products off their base technology. But taking it to the next level and making it a solid well run, rapidly growing business is another story. So 3 years in, I'm not blogging as much, because I remember how Web 1.0 ended and bubbles will always pop. Tweetrd echo chambers, hyperlinking bloggers, google adsense payments, speaking at conferences, the occasional newspaper business does not maketh a business. (geez ben sounds boring now... sellout)

But when your clients start asking why you dont blog anymore (i didnt even know u read my blog, given u never left a comment:), and that documenting stuff and thoughts as they happen is all part of "The Journey" my user generated content break must now end. I'm thinking of less sardonic hyperlinking and more blunt truthisms. Hopefully it will all help as I enter the fourth year of this Feedcorp journey in making the top and bottom lines continue to increase. And I'd also like to make just a little bit of art. Fo' myself. And see what happens from there...