Feed: WayTooEarly - AggScore: 74.3

I've always liked looking at new ideas and companies early (or way too early, as this blog's title notes). And I'm pleased to say that the economic turmoil has not dampened my enthusiasm, nor that of my partners at First Round Capital, nor that of other early stage players such as New York's Betaworks.

I attended a wonderful afternoon of presentations by 16 Betaworks companies, some, such as Twitter (which bought the Betawork's backed Summize, now search.twitter.com ), that are well known, and others just appearing for the first time. Some that First Round had passed on, though we loved the product, e.g, Someecards.com - a great site.

And now, I'm pleased to let you know that our San Francisco based folks (Rob Hayes, Christine Herron and Kent Goldman), are going to hold "office hours" at the University Cafe in Palo Alto on Tuesday, October 21st from 11-1. They'll listen to new ideas and talk about the economic climate.  More details from the creator at Kent Goldman's Cornice blog, and an RSVP link on Christine's blog.

For the first time in many years, i won't physically get to either  the 18th year of DEMOFall or the second year of the TechCrunch50 (it was 40 last year, supposed to be 20). But through the magic of the world wide web, I can see how vibrant the startup and new product economy really is. Demo has videos up of their new products, and TechCrunch has Qik and ustreams which let non-attendees like me see the good stuff in real time.

DemoFall has 72 companies/products being introduced, some from big companies like Best Buy and Real Networks, but most from startups like SpinSpotter that help to find truth in the stuff you're reading, or alerts.com that lets you set up information push on things of interest. And there's the new Plastic Logic Reader, which is exciting to a Kindle user like me. Of course, they've raised $200 million, which is a little more that FirstRound normally does, so we're not investors.

TechCrunch50 has 52 companies (selected from over 1,000), including OtherInBox, which lets you give special emails and keeps most of the marketing junk mail (not spam), out of your normal inbox, and Yammer, which is a secure enterprise usable communications site, with capabilites of Twitter, IM etc. all protected and tracked.

At FirstRound Capital, we normally look at 2,000 deals a year to make 20 investments, and both of these great conferences provide tremendous raw material (although I must admit we prefer to see them before they've gotten the exposure). But it's really great to know that there are thousands of high quality startups still being created in the US and elsewhere, and that even in this tough economy, the new economics of capital efficient startups is thriving.

We've all faced the problem of bringing home a great new piece of consumer electronics (plasma TV, DVR, 5.1 surround system), and trying to connect it to the existing system. Even for those considered tech gurus by their slightly more challenged relatives, this is not a simple problem.

First, one finds the the right cables may not be readily at hand. This either means another trip to the store (or web store), or making do with the wrong cables and lesser connections (e.g., S-Video instead of HDMI).  And deciphering the back panels of various manufacturers equipment, with those wonderful icons (some designed for Martians, no doubt), is another intellectual challenge.

About two years ago, Dean Summers, founder of Partsearch Technologies (an Idealab company), came up with a better idea. This led to his leaving Partsearch and starting CE-interactive, and the launch of their Wirewize.com site. (First Round Capital is an investor in this venture).

You can set up a locker by selecting the electronics gear that you already own.  Almost 10,000 of the top amplifiers, TVs, cable boxes, game consoles, etc. are already in the database.  When you want to add a new piece of gear, wirewize.com can tell you what cables you'll need for the best connectivity, and show you detailed pictures of each back panel, with hard to mess up instructions for where to connect each of the cables that it told you to get.

Presto, fewer returns or return trips, better quality pictures and sound, and the ability to return at any time to wirewize and see if there is upgraded software for your devices (yes, much of the CE world now does this). And you can read many of the manuals online as well.  Right now, the free version can be tried at www.wirewize.com.  I've already used it to find a better way to connect my TiVo Series 3 and my Panasonic system.

Those who follow my Twitters know that I've just returned from two weeks in South Africa and Zambia, including six days in the game parks at Kruger seeing animals in the wild.  I was amazed at how close we got to the animals - who apparently think of a big open Land Rover as an interesting, but non threatening large companion.  Lions, leopards, rhinos, elephants and the like were in touching distance, while the zebra and giraffe did seem to run at our approach. Maybe they were smart enough to know why the gun was mounted next to the driver.

I find it hard to resist seeing the jungle situations as metaphors for the venture and startup world.  First, Google and Microsoft are the Land Rovers.  They're very big, they're out there, but you have to live your life and go after your own prey, in which case they'll ignore you.  This works well for the lions and leopards, who can go after meat knowing the elephants are vegetarians, and will only trample them if they get in the way. And their trampling won't usually be to get the food source - they have their own.  In our world, this means focus on your own products and customers.

If you have low gross margins, you need to be very big. Elephants excrete, without processng, about 2/3 of their food. Their digestive systems are pretty inefficient. But even on that 33% gross margin from their calorie intake, they have gotten extremely big.  What they don't use, however, provides interesting input for others - here a leopard is eating some of that dung to get at minerals and other nutrients that are easier to find this way.

Specialization is often a way to get big, without conflicting with other parties.  The giraffes mostly eat the high vegetation that the elephants, rhinos and hippos can't reach.  Rather than going for the low hanging fruit - they go after the highest stuff, but have adapted their bueiness model accordingly.

Visiting the awe inspiring Victoria Falls (which the natives call the thunder that smokes), you see the critical nature of timing.  Here are the falls when we were there in March (with flows of millions of kilolitres per second). Here it is in November - almost totally dry.

All in all, it's a trip I recommend to everyone - you recharge the batteries, see where we came from (my 23Across profile makes it clear that my DNA is out of Africa, as is true of all the humans), and puts into context our technology based society.

Of course, I should note that hundreds of miles from civilization, with very slow internet connectivity at the lodges, and no cell phone service in the lodges, you have time to ponder a beautiful sunrise .  Or so I though till we went out on a drive one morning, and, once out in the middle of nowhere, my Blackberry started to vibrate - having caught signal from the only tower for 50 miles. I left it in the lodge for the next rides.

There was one new technology that I saw at CES that really does have promise for the future - wireless power.  Though it's been talked about for years, and many schemes have been tried, there are now some truly revolutionary methods for transmitting enough power not only to charge cell phones or iPods, but also to run big PCs and desk lighting.  Of course, all the power on Earth owes it's debt to old Sol, our sun which transmits it's power to the earth in visible and infrared ranges.  And there are some products that use that directly.  The Solio hybrid energy chargers are solar cells that charge an internal lithium battery, which then feeds USB connectors (with the iGo tip system), so that you can keep your phones, etc. charged up directly from the sun.  One of the products has a clip to go on your backpack, another fans out 3 cells to get even more power.

Bt for a real look at the future, you should see what Powermat, eCoupled and Powercast are doing.  Powercast is using RF technology to send the power, while Powermat and eCoupled are using inductive techniques. Powermat is based on the RFID tags and some very clever drive technology and seemed the best of the lot to me. In addition, there is Wipower and some other folks working in this very hot area.  Some of the key issues are how much power at what distance.  Milliwatts at Meters is Powercast's view, while Powermat seems to be able to have much higher power loads with devices placed on their mats (which are only a few millimeters from the device they're powering).

Here's a light just stuck (magnetically) on the wall, drawing power from the wall surface mat.

One of the nice side benefits to Powermat is that of energy conservation.  Since you don't have all those "vampire" power charges plugged in, you're not wasting nearly as much power. And the Powermat system can sense how much power is needed and deliver it on demand, resulting in what could be significant savings.  It will certainly be nice when I can just lay out the powermat, plug it in, and then drop my PC, cellphones, iPOds, cameras, and a small desk lamp, and know that I've saved the charger weight, the tangle of cables (which drives my wife nuts), and be saving power as well.

I'm hoping to be able to make my desks at home and office Powermats in the next year, and lighten my charger load (physically and electrically).

I've had the Sony Connect Reader for the last six months or so, and have found it a useful way to lighten my load on trips.  I read about a book every other day, and more on airplanes, so I've always wanted a good eBook.  As some of you know, I'm Chairman of Franklin Electronic Publishers, which has sold almost 40 million eBooks - our electronic dictionaries, spell checkers, bibles, translators and other works. They make great Christmas gifts and can be ordered online :)  We tried a Digital Book System back in the mid 90s, and even published Nicholas Negroponte's ground breaking "Being Digital" on our eBook format.  But the screen size was too smal to make it work.

I've been watching the eInk technology for many years, and it is finally ready for prime time. it's the nonvolatile display technology used in both the Sony Connect Reader and the new Amazon Kindle, which I received yesterday.  I find it quite easy to use in sunlight, on airplanes and in taxis, although on redeye flights, my neighbors sometimes complain about the fact that I do need the overhead light on to read easily.  Here I am showing off both the sony and the Kindle at our 40 person Thanksgiving Dinner.

The consensus feeling is that the Kindle is a better product. And I must agree, even though it's only 24 hours since I put the first book on it.

The Sony has three font sizes, while the Kindle has six.  Family members from 8 to 95 looked at the book, and every type size had at least one champion, with both the 8 and 95 year olds liking the largest font. The Amazon product is based on MobiPocket technology, a company they acquired a few years ago, and one in which Franklin was a major owner. It's a bit cleaner and clearer than the Sony. The Kindle also has a better hand feel, with the ability to turn pages from either right or left sides. In the Sony you can use a rocker near the bottom right, or buttons in the middle of the right side, It just feels a bit more natural on the Kindle.

But the best feature is that the Kindle really is designed as a system and service. Using Sprint's EVDO network as the Kindle Whispernet allows books to automatically download in minutes. And it also lets me get the W all Street Journal or New York Times overnight, and ready for reading on the train to work in the morning, albeit at what seem steep prices, given that I can read them online for free (NYT) or less than half the Amazon cost (WSJ now - going to free once Mr. Murdoch finally gets real ownership).  And I can get the first chapter of any book free, to see if I like it or not.

So while it's still early, and I'm not sure how big the audience is for a $399 device (or Sony's $300), it's no longer Way Too Early. If you travel and read a lot, or want to keep your early adopter credentials, by all means get a Kindle.

As an early adopter, I usually "eat our own dogfood" as our companies get early betas, etc. But as life gets more complex, some of the more mission critical tasks I do won't brook too many crashes.  This is especially true now that I'm on Vista, and a reboot is 10 minutes or more. So I'd gotten somewhat out of the habit. Fortunately not completely so.

This morning, I was searching for a CD by an obscure jazz singer, Katie Eagleson.  Looking on Amazon (often my first quick look), led to a $39.98 price for the CD, which just seemed way out of line.  Then I thought "I wonder what Bigger Boat would suggest?" Full disclosure - Bigger Boat is a First Round Capital investment, and I'm a board member.   I had used it a year ago when we launched, but got out of the habit.  A quick search on Bigger Boat instantly took me to an $8.90 download of the CD - a quick $31.08 savings!

I've also been using the beta of Xobni which gives quite interesting information on my large (12GB) Outlook files.  I've installed and uninstalled it twice, but it's clearly moving forward and helpful. Now to start seeing what one of our newer investments, Mint can save me:)

So yes, it's a good practice for venture capitalists to eat our own dogfood. Not only can we better advise the companies, often they can help us in the same way we hope they'll help all their other users.

      John Rain, the Japanese-American assassin anti-hero of Barry Eisler's great series or novels, already has his iPhone, and they're not even on sale.  I was reading Requiem For An Assassin, the latest in the series, which came out a few weeks ago. Rain arrives in Palo Alto from Asia, and needs to buy his tools, so he goes into a Cingular store (pre ATT) and buys an iPhone.  He proceeds to use it for calls, and to monitor a GPS tracker he's put on someone's car.  He does, of course, assassinate a Silicon Valley CEO while making it look like natural causes (his specialty), something I've often thought of doing at the end of interminable board meetings.

Fortunately, I met a friend last night who,as an important member of the press, already had an iPhone, and got to play with it.  The key reviews (Baig, Levy, Mossberg, Pogue) all pretty much have it nailed. The virtual keyboard is not an issue, the screen is gorgeous, the hand feel and design is tops, and the lack of Exchange server connectivity and the use of only the slower part of the EDGE network are killers.  If i got one (which I do not plan to in this version), I'd try and put a screen saver picture of a Scharffenberger dark chocolate bar on it, since it's about the same size, and just as sweet.

I'm going to see Steve Jobs' other debut this weekend, Pixar's Ratatouille, and just put my Blackberry on vibrate.

As readers of this blog know, I like to be an early adopter, and an early investor.  When it come to technology, I want the latest gadgets, most up to date computers, etc. But being too early on these things costs money. I'm often faced with the old question of how early to upgrade to the next new best thing. That's why the business plan for TechForward, our latest First Round Capital investment, resonated so strongly. 

TechForward, started by Jade van Doren and Marc Lebovitz, offers guaranteed buyback prices for your new equipment: laptops today, soon other computers, digital cameras, music players and the like.  The operation is quite simple. When you buy the equipment, you can also buy (either at retail or through the TechMyLife.com website) a contract that offers to buy that equipment back from you over the following 24 months. (I'm not sure I've kept any of my computers that long in the last decade).  There are four prices, one for each six month interval (see the example).

When you're ready, you login and tell them, they send a box and you ship back your machine. Assuming its condition is as stated, you get a check for the contract amount to use as you see fit, or perhaps, with retail partners, a gift card for even more than that amount to be used at their store.  There's a lot of very sophisticated mathematical modeling of large amounts of data to determine the upfront fees and buyback prices. 

I love the idea that I can shop for my next machine as soon as I like, with the knowledge that there is a floor on the value of my old one.  Of course, I can always sell it myself if it turns out to be worth more at the end of a particular period, assuming I don't mind all the hassle. So now I can stay too early or way too early with my computers and gadgets, abetted by the TechForward Guarantedd Buybacks effectively lowering my new machine's price to something a little more reasonable.

My new book, written with the world renowned Professor Len Lodish of the wharton School and Shellye Archembeau of Metric Stream, has just been published.  Marketing That Works is meant to help entreprenuerial marketers, whether in startups or big companies, understand the many issues surrounding how to market the things you have for sale. These include your actual product, your shares of stock, and your corporate image.

The book is organized around our 3 by 5 marketing concept. Simply put, every venture has three key things to sell, to five different constituents.  The three columns are  Products/services,  Shares,  and Image.  The five constituencies are Customers (those who give you money for something), users (who may or may not pay), investors (who also give you money), employees (who cost you money, but want to know why their options might have value, and why it'll be fun to work with you), and others (suppliers, strategic partners, etc.).

The biggest mistake I see as a venture capitalist is that almost all the business plans I see are about marketing the product to the user.  As a VC, you have to market the stock to the investor (me), which has a different focus.  And understanding your business model means knowing why the customer will pay you for the product. Just knowing that you can get a lot of users (eyeballs) may not be enough to sell me or my partners at FirstRound on a deal.

The devil, as you know, is in the details, hence a 300+ page book.

As a favor to my readers, you can get a 35% discount at Wharton University Press, by using discount code MTW35off until September 1, 2007.  Of course, it is about the same price on Amazon every day:)