Took a year, but I think we figured out mobile news: Inside 3.0

fix the internetIt’s taken me a year of iteration on Inside.com, but I think my team and I have figured out mobile news. This team of 14 full-timers and 50 writers has been crushing it for the last four months, building out our 3.0 product.

It’s awesome.

Please download it and let me know what you think.

3.0 is on iOS this month, Android next.

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Our BHAG* is to curate the world’s best news and get people to the truth quicker

[ * big hairy audacious goal ]

We believe there will be a new class of content creators online. They’re not journalists or bloggers, we call them ‘curators.’

Curators find amazing stuff, organize it, and then share it.

If they do a great job you’ll follow them and eventually you might pay them. Yep, curation of content will become a career — book it! Launching our 3.0 product is the first major step in that direction.

You can be a curator right now: download the App, copy any url you find to your clipboard (on your phone), and submit it by pressing the orange pen button.

That’s it. We take it from there by checking that it’s not a duplicate story, and then writing a clean summary (free of link-bait and packed with facts).

inside

Continue reading Took a year, but I think we figured out mobile news: Inside 3.0

“Why the F@#$K is Glenn Beck coming to LAUNCH Festival?”

I’ve gotten this question a couple of times since we announced that Glenn will be sitting down with me.

I don’t know Glenn’s entire colorful history, and his coming to the event is not me endorsing — or not endorsing — his positions. My goal is to have amazing conversations about the future with people who are helping shape it.

Glenn is one of those folks.

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In fact, Glenn represents tens of millions of people who live between New York, L.A., and San Francisco. Those people in the heartland want to know what the hell is going on in the technology industry that is administering every aspect of their lives.

To name just a few examples of this:

  1. the NSA, tech companies, the President, and their devices
  2. their jobs, that seem to be going away because of Amazon, self-driving cars, AI, efficiency, and robots
  3. privacy
  4. education
  5. income disparity
  6. globalization

We live in a rapidly changing world, with major cities experiencing insane growth in jobs, wages and opportunity, while the middle class and the mid-sized and small cities are seemingly experiencing the opposite.

Continue reading “Why the F@#$K is Glenn Beck coming to LAUNCH Festival?”

Awesome eight apps contest!

We’re running a contest to win one of 100 Builder Passes, 10 VIP Tickets, and one coveted Super VIP pass to the LAUNCH Festival.

Here is how it works:

a) Download any 8 of the 12 following Apps (I’m investors in them!)

b) Place them on one screen on your phone & take a screenshot, like this:

APPSscreenshot

c) Tweet that image with: “Eight awesome apps to @launchfestival http://goo.gl/wkeBpU”

We will pick random winners every day until Sunday at 1pm!

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  1. Inside.com: My curated news app! For iOS & Android.
  2. Connect.com: Our 2014 Winner! For iOS.
  3. Calm.com: I’m a mindful practitioner and was lucky enough to invest in this exceptional product. It’s free and it will reduce your stress and make you a better person! For iOS & Android.
  4. Reserve.com: An amazing way to get a reservation! For iOS & Android.
  5. RobinHood.com: Trading of stocks … on your phone … for free! For iOS.
  6. Uber.com: I was an investor in the seed round & love the team! For iOS & Android.
  7. GetBetter.com: I’m an investor and in love with this App. For iOS & Android.
  8. Thumbtack.com: I was the second investor after Marco’s parents & this product is so gorgeous you will wish you built it! For iOS.
  9. Brilliant.org: For Android.
  10. Crossfader.fm: My old friend Seth doing the EDM thing! For iOS.
  11. Whisper.sh: A fantastic community supporting each other anonymously. Proud investor in this one. For iOS & Android.
  12. Wealthfront.com: Another investment in a product that I love. Only .25 to manage your money! For iOS.

best, @jason

The following folks have won a Builder’s Pass, contgrats! (and may win a VIP/SUPERVIP):

 

 

If you want to come in first, aim for second

second placeMy partner on Weblogs, Inc., Brian Alvey, wrote a solid blog post about me being a “fast follower” with a lot of the products in my career. It’s a fair assessment of not only me, but of the long list of folks who are a magnitude more successful than me!

YouTube, Facebook, and Google were the 10th to 25th iteration on video, social networks, and search. Does that take anything away from Chad, Zuck, or Larry/Sergey? Not in my mind.

Getting it *right* is what matters, not getting there first.

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Even the mighty Apple was considered the laggards who didn’t get the phone, tablet, watch — or now, apparently, car — out first. They just did those first two a lot better than everyone else (we’ll see on the watch and car what happens).

I’m reminded of this because in our first “The Incubator” class (aka The LAUNCH Incubator) — which Brian Alvey is part of (#loyalty) — we have seven startups that are all taking on huge verticals with existing players who have done really innovative products.

Yet, there is more innovation to be done!

You’ll see the “Magnificent Seven” next week, debuting on March 2nd in the afternoon (watch live at the LAUNCH Festival):

  1. One is a better Sprig or SpoonRocket
  2. One is a different take on Kickstarter
  3. One is a fresher look at Instagram
  4. One solves a problem FourSquare hasn’t figured out
  5. One is a fresh take on Netflix, but in real life
  6. One is a better Priceline
  7. One is a better version of itself — we call that our “sophomore selection”*

This group of startups did so well over our 12-week Incubator that I decided to take them to see two of my favorite VCs. They were both blown away — even though the startups were building on themes we all know, they were unique and vibrant.

However, one of the two VCs said, “Jason, this is the best overall group I’ve ever seen … how much are you putting into each?”

I replied, “I’m putting $250,000 into each.”

“I’m in. I will match your $250,000,” he said, punctuating it again with, “Best overall group I’ve ever seen.”

Wow.

Continue reading If you want to come in first, aim for second

Be the sponge, not the rock

spongebob

My pal Adeo asked me a prescient question today: which would I rather invest in: a) a solid team with deep experience in a vertical, or b) a supremely talented team who doesn’t have a lot of domain experience.

“I prefer investing in the sponge, not the rock,” I told him.

The problem with people who have a ton of experience in a vertical is that they bring a ton of bias, as well. So, for every “I have a perfect person we can hire to do X!” you get two or three “I’ve been doing this for 20 years — trust me, this is how it is done!”

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Fresh eyes on a problem are frequently game-changing, and let’s face it, you can always hire or buy experience down the road if you need it. So, Facebook hired tons of lobbyists to deal with Washington, and Twitter hired journalists to support news organizations — but a lobbyist could have never created Facebook, nor could a journalist have created Twitter. They would have brought too much baggage.

As an investor I like the sponge brains not the rock brains. The ones who can soak every last ounce of information from everyone they meet and then squeeze out the good stuff into their product.

Rock brains as so stuck in what’s always been that they can’t really imagine a different world.

The Early Days of Blogging

Back in the early days of blogging many people came from journalism — including myself! I had a magazine and thought that the editing process was the magic. I would get pitched by my Silicon Alley Reporter journalists and would give a thumbs up to whatever I thought sounded the most interesting.

When we editors saw traditional journalists like Om Malik and Peter Rojas publishing whatever the hell they pleased without permission, let alone fact-checking or an editor, we were appalled, to say the least.

We were mortified that they inserted their personal opinions and disclosed their biases — how dare they not be objective! The audience could never handle knowing how a political reporter voted, let alone what their stances were on issues like gun control, abortion, or health care!

To actually know that Walt Mossberg used Apple products would be the end of days!!! At least that is what we thought.

Continue reading Be the sponge, not the rock

(David) Sacks’ Law: If you want to bet on startups based on what they could be, you gotta see founders for who they could be

sacks

Legendary entrepreneur David Sacks replied to my blog post “My job: never underestimate anyone” with a particularly pointed tweet:

Not-so-legendary entrepreneur, but absurdly-legendary investor Shervin Pishevar dubbed the tweet “Sacks’ Law,” which I found worthy of consideration and memorialization here on the blog.

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Let’s soak in the two parts of what he said for a moment:

  1. “If you want to bet on startups based on what they could be…”
  2. “… you gotta see founders for who they could be.”

This is particularly important for the “media” to understand, as they frequently judge founders harsher than they do their products. Now, I use the word “media” here because I’m defining two groups of people who create content: a) real journalists, and b) news-as-entertainment content creators.

Why the distinction? Because folks who are doing SCREAMING-BUT-NOT-FACTUALLY-CORRECT headlines like Pando, or TechCrunch’s pathetic process journalism, “We don’t check facts, we publish first and let the audience tell us if it’s true!” shouldn’t be counted in the same league as “journalism” in the way the slow, methodical, and boring (aka the truth!) journalists like Re/code, The Information, and the New York Times.

If Sheryl Sandberg or Sean Parker judged that college dropout who put “I’m CEO, bitch!” on his business cards and screwed all his partners as … whatever … then we would have never seen Zuckerberg’s growing legacy — or his better angels.

I’m not going to defend the long list of “founders with a history,” but we all know that few of us stand up to the worst moments in our younger days — founders of startups, investors, or journalists (or those of us who are all three). Also, we all need someone to believe we can be more than we are.

Phil Jackson believed in Michael, Kobe, Shaq, and now Camelo — all imperfect and frequently derided when the Zen Master believed in them.

Angel investing is an art, where you look at a nascent product which any sane person would find immature and unlikely to succeed, and say to yourself, “But what if it did?”

Continue reading (David) Sacks’ Law: If you want to bet on startups based on what they could be, you gotta see founders for who they could be

Microsoft is interesting again — very

Microsoft has been largely dead to Silicon Valley because for the past decade they struggled in — or completely missed — the last five major technology movements. Those five movements, and who they lost to are:

1/open source (to Linux, MySQL, etc.)
2/search (to Google)
3/mobile (to Apple)
4/social (to Facebook)
5/cloud (to Amazon)

In this piece: why MSFT failed (dividends), why they’re back (Satya) & what 7 things they can do to be as important to the future as Apple, Google, and Facebook.

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Why Microsoft “Failed”

When I came into the industry in 1990, Microsoft was Apple and Bill Gates was Elon Musk. We hung on everything Bill said and did. Windows and Office were juggernauts, and his dabbling in news (MSN, MSNBC, Slate), watches, wallets, personal assistants, CD-ROMs, and tablets were the stuff of legend — even if they were clunky by today’s design standards. 

Steve lost the 80s and 90s to Gates, but he won the new century — before losing his life.

[ Total aside, how much do we miss that guy? Can you imagine Steve around today to demo the Watch? To negotiate a partnership/merger with Elon Musk? Such a huge void up to this day. Losing him early is starting to sink in as deep as losing John Lennon, John Kennedy, and Kurt Cobain: we’ll never know what he would have done with those last 20-30 years. ]

Microsoft failed to be a major player in social, open source, search, mobile, and cloud because Steve Ballmer optimized Microsoft around sales and a bizarre financial innovation called ‘a dividend.’

In the cradle of innovation — from the San Francisco Bay down to the creeks in Palo Alto — ‘dividend’ is roughly translated as ‘capitulation.’

World-changing technologies are advancing so fast that they are only being outpaced by consumers. Those consumers are so willing — heck, desperate — to have their lives reorganized by this technology that they are flying drones over their kids’ heads, wearing dorky Google Glasses, and tweeting instead of talking to the people they’re having dinner with!

Continue reading Microsoft is interesting again — very

Apple will buy Tesla for $75b in 18 months (prediction)

1984 2Apple will buy Tesla for $75b in 18 months — it’s a lock (in my mind).

Let me start out with three important disclaimers:

  1. I have no inside information.
  2. I hold no shares of Tesla or Apple*.
  3. I do own two Teslas and spend $3k per year on Apple products personally (at least).

OK, now that those disclaimers are out of the way, let me break down what I think will happen in the next 12 months based on what we’ve heard so far about Apple’s interest in electric cars.

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For background, there are reports of a massive project at Apple, with hundreds of executives working on an electric minivan. Additionally, an Apple self-driving car has been spotted on the roads.

Elon has been very public in saying that in order to complete the mission at Tesla he needs to get the third generation car out. He has also been very public about creating the sexy Roadster for early adopters ($125k, only ~2k produced), the Model S for the early majority ($60k, project hundreds of thousands will be produced), and the Model 3 for everyone ($35k, projected 1m produced).

Now, historically, Tesla Motors generally announces cars about 24-48 months before they drop (someone correct me if these dates from Wikipedia are wrong).

Roadster Announced: July 2006

Roadster Delivered: Spring 2008 (24 months after being announced)

Model S Announced: June 2008 (24 months after Roadster announcement)

Model S Delivered: June 2012 (48 months after being announced)

Model X Announced: Feb 2012 (48 months after Model S announcement)

Model X Delivery Expected: Q3 2015 (~30 months after being announced)

Model 3 Announcement (guess): Q2 2015 (36 months after Model X announcement)

Model 3 Delivery (guess): 2018 (36 months after being announced)

What this means to me is that Apple would be desperate to buy Tesla between when the Gen 3 is announced but before it is delivered, because once the Model 3 hits the road Tesla’s market cap would make a deal with Apple a merger — not an acquisition.

Continue reading Apple will buy Tesla for $75b in 18 months (prediction)

The Mission

Your humble, 365-days blogger is exhausted. For the past two weeks I’ve been carrying a huge load, including:

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  1. Running “The Incubator,” which is a 12-week program where founders get a modest investment from me before I push them to the breaking point so they can debut to massive fanfare and investment at the LAUNCH Festival. We just finished Week 10 and it’s been amazing.
  2. Selecting and coaching another two dozen startups who will make their debut at the LAUNCH Festival on March 2-4th.
  3. Getting ready for the 10,000-person Festival, at which I will MC, interview, and play host for 12 hours per day — it’s my marathon every year.
  4. Putting the finishing touches on Inside.com’s huge 3.0 release — which is so awesome it’s getting a lot of attention from important people (YES!).
  5. Meeting with a half-dozen partners who figured out what I’m doing with Inside.com and want to either buy, invest in, or partner with the company — which is just great, since for the first six months folks were a little confused about the product. This is exactly what happened with Weblogs, Inc.: people thought I was crazy, thinking blogging would challenge newspapers and magazines. People are starting to say, “Your curation at LAUNCH Ticker and Inside.com are really impressive and important — how can we get involved?”
  6. Doing a dozen interviews with a crazy number of awesome guests for This Week in Startups. I’m so blessed to have a world-class team including Jacqui, my Emmy-award winning producer, Jacob, my art & video director, and Luke, who has kept the lights on. The show is just crushing it.
  7. Writing 600-2k words per day here on the blog … which on the surface seems really hard, but as I write this at 8:30PM, with my wife and daughter playing behind me, feels like my daily run. It’s effort, but one that makes me feel better for having done it.
  8. A dozen portfolio companies either hitting walls or breaking through them. Or in the case of two of my favorites, flat out running out of money. Brutal.

I’ll leave out the personal stuff, but you can assume that being a dad of a five-year old, and moving cities for the first time in a decade, are a little bit of work.

However, none of this work has got me down. In fact, none of this feels like work any more.

Continue reading The Mission

About the truth …

“You can’t know the whole truth, but if there is one, it lies in the space between two people.” – David Carr, September 8, 1956-February 12, 2015

A colleague of mine, David Carr from the New York Times, died tonight. We weren’t best friends, but we shared a couple of meals, drinks, and had some great conversations since he started covering media for the Grey Lady.

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What I always loved about David was that he was an actual reporter. He called and emailed me many times to get background on a topic — most of the times I was never in those stories. I loved that; he was doing actual reporting.

Take note cub reporters, calling 10 people for every two you quote in your story is how you do it right. Of course, most “publications” and “journalists” don’t do anything close to this today. If they did, they would be writing level-headed, fair, insightful, and intelligent pieces — like David did. I didn’t always agree with his conclusions, but boy did I look forward to reading him.

There is a real issue in society today because journalism is failing to do basic things like research, background, and fact-checking. News organizations like the NY Times are up against “entertainment & news” hybrid organizations like Buzzfeed and they’re losing the page view wars.

However, this news business is a pendulum that swings back and forth between pandering and powerful, lazy and obsessive, and “fair and balanced” as a slogan designed to taunt competitors — not describe the product.

David was one of the greats because he knew that even if you do all the work, make all the phone calls, and figure out where all the bodies are buried, you still might not actually find the exact truth.

His wonderful quote above, however, tells us all we need to know about the versions of truth out there in the world — yours, mine, and God’s. I’m an atheist, but I sure hope there’s a heaven, that David’s in it, and that all the unknown truths are waiting up there for him to enjoy.

RIP pal, from all of us who loved, read, and respected your work.

best @jason

How to save money running your startup

money hundiesYears ago I wrote a blog post on how to save money running your startup, and it was one of the most popular things I’ve ever written.

I thought I would take a second stab at this — without reading my original piece from 7 years ago — as an experiment in how much has changed.

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  1. Outsource your HR/payroll to a company like Zenefits & ZenPayroll. Previously, I used TriNet and other PEOs, but those startups charged a whopping $100+ per month per employee. That’s like $1,400 per year per person. If you have 10 folks that’s $14,000 per year and it’s crazy. These new services charge fixed fees, not these absurd monthly fees.
  2. Keep computers cheap by offering folks $500-1k credit toward the computer of their choice — that they own — provided they stay at the company for two years. So, instead of buying everyone $2,500 MacBook Pros (absurdly expensive), just give folks $500 to $1,000 toward buying one they own, if they want. Folks like owning their own gear and it’s free money for them.
  3. Don’t sign a lease until you are at over 20 employees. $500-600 per desk coworking spaces are so much better overall because you have no hidden costs of buildout, buying desks, security, coffee, and cleaning. When you put all those costs together it makes ZERO sense to waste three months trying to find a space and negotiate with these ass@#@% landlords (and they are complete f@#$%$%ing ass@#$#@s more than half the time).
  4. Negotiate flat rate and deferred fees with your attorney. The great firms and attorneys invest in startups and do this for me and others all the time (WSGR and Scott Walker are two long-term partners of mine who control costs — especially in those early days).
  5. Buy a cheap domain and “fake it ‘til you make it.” I know folks are going to say, “Aren’t you the Inside.com, Mahalo.com, and 20.com guy who buys expensive domains?!” Well, I bought those domains for $60k, $14k, and $70k — I got sick deals on them. I would not have bought 20.com for the $1.2m I recently got offered for it, but I would have paid $1m for Inside.com, actually. Instead, get a domain name like “getinside.com” or “insideapp.com” or “inside.co” — or something like that — until you can afford the actual .com (if ever!). Times have changed.
  6. Hire part-time and contract designers for cash and stock. I’ve seen a bunch of designers — high-end ones — take $5,000 in cash and $15,000 in stock (at your next valuation) for their work. Great designers pick projects based on their passion, not the paycheck — and the savvy ones understand the value of stock options!
  7. Hire part-time folks where you can, but get them for what their full-time salary would be. I see folks come to me all the time and say, “We’re going to pay these consultants $200 an hour for 10 hours per week.” I’m like, “How much would they charge as an employee?” And they say “$100,000 per year” — to which I say, “Well why don’t we pay them $50?” The answer? “They’re consultants!” Well, if you talk it through with the consultant you’ll find that s/he plays ball if your project is cool — and you are too! Just say “Hey, I don’t want to put you out, but can you support us now and grow with us and take $50 an hour so we can see if this company is even viable? If it is, we might be able to hire you full time!”
  8. Do not hire a PR firm. If you need press then figure out who the top five journalists are in your space and send them a personal email: “Hey Jason, I loved your story about ‘saving money on a startup.’ Our company has an amazing solution to saving money on cloud computing. I’ve attached our one-pager and I’d love to tell you more. Best, Jane Doe.” The CEO-to-targeted-journalist approach works really well.
  9. Do not spend money on desks, chairs, and anything that doesn’t have to do with the product until you have to.
  10. You can hire folks at rate X, but tell them that you can only pay them 80% of X for the first six months or until you raise your A round. Folks can feel free to take this offer or not. If you are at a startup you shouldn’t be cash-driven anyway, so challenging the cash assumption is fine (you will lose this battle sometimes, of course; especially when you try and hire a Yahoo exec with three kids in private school and who goes to Hawaii for three weeks over Christmas — but you probably don’t want a $200-300k Yahoo exec at your startup anyway!).
  11. Ask your early clients to pay you one year in advance for your work. Many will say yes! Heck, if one in five says yes, that’s amazing! The way you close this deal is by saying, “If you pay us one year in advance, we will be extra attentive to your firm and do a lot of custom training and support for your team as a thank you!”
  12. Get Rackspace, AWS, and Google Cloud to give you free server space for a year or two. They all have programs like this, and if you get to know the reps at those places they can get you even more.
  13. Keep your meetings to coffees, do not do drinks, dinners, or lunches — unless they are clients who have spent money with you. Those take a lot of time and cost 20-30x more to do!
  14. Use “drip campaigns” (low-cost client acquisition) and content marketing to make a name for your company. I need to detail those in their own posts — someone remind me.

That’s all I got … but do share what ideas you have for saving money in the comments!

best @jason

PS – 18 days until LAUNCH festival! Be there!

 

 

How to manage running out of cash / doing a down round

thelma and louise
One of the most brutal things you’re going to have to do at some point in your career as a founder is deal with running out of money.

It happens to everyone if they’re in the game long enough — and boy does it suck. I saw the world’s greatest living entrepreneur run out of money, in fact. It happens, it sucks.

Goal: In this piece I’m going to explain to you how to save your business if you run out of money.

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Now, the worst part about running out of money is that you lose all leverage with your current and future investors. Paradoxically, when you have a ton of money in the bank, and your business is doing reasonably well, investors will chase you down the street and try and throw bags of money into the back seat of your convertible!

The reason folks hate investing in a startup with no money in the bank is because they fear they will be “bad money after good.” Translation: they will feel that if they give $500,000 to a business that has just burned $2m — and that currently burns $100k per month — all they are doing is pushing the inevitable flame-out five months down the road.

And guess what, they’re probably right!

Our jobs as founders is to “reboot” the opportunity by re-establishing credibility and re-telling the story.

Let’s say you are a delivery service like SpoonRocket or Sprig, called Acme.

You have been heads down and thinking you have six months to raise money because you have $600k in the bank and are burning $100k per month. Suddenly you realize that you spent $100,000 more than you thought you did last month because of a trademark lawsuit and a settlement with your former CTO, who you fired with three months of salary.

Oh yeah, you missed your sales target by $75,000 per month for the 4th quarter, so you were down another $225k for a total of $325k in unexpected loss.

You then spent two months trying to clean this up enough to present to your investors — and now you have three weeks of cash left.

F@#$k!

This happens all the time … in fact it’s happened to a couple of startups I’ve invested in.

Here is a toolkit of all the things you can — and probably will — have to do.

Step One: Ask Existing Investors For a Bridge

Go to your investors and explain in detail how you messed up and ask for a six-month bridge at the last valuation. If this works, well, you have awesome investors who believe in you and the business. Congrats, you’re done!

Continue reading How to manage running out of cash / doing a down round

Oh no, Calacanis is mansplaining again!

Diversity in technology is a hot button issue I’ve been told to stop talking about — mainly from a small contingent of radical people who say that “cishet white males” have nothing to contribute to the dialogue and that they should “SHUT UP AND LISTEN!!!!!!”

It is possible, obviously, for cishet white males to *actively* listen and help solve the diversity problems in ways other than “shutting up.” Crazy, right?

In fact, I’ve been talking about the issue constantly on my podcast because my producer and I have been very focused on having groups who are underrepresented in technology on the program more often.

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No one person can solve the problem, but I do think that each of us should be part of the dialogue, both listening and speaking, but most of all, taking action!

I’m going to step onto a huge landmine by writing this post I’m certain, but I’m not going to let my life and my writing be dictated by “PEOPLE WHO WRITE IN ALL CAPS AND YELL AT ME FOR BEING A WHITE MALE WHO HAS SUCCEEDED DUE TO THE WHITE PATRIARCHY!!!!”

No, I’m going to take action and discuss this issue as much as I damn please because it’s important. Additionally, I suggest all folks working on this issue in technology discuss these issues with a big open heart and true intent so that we can all move forward and lead the world on this issue.

Technology executives and companies have reached a level of influence and impact that has rarely been seen in the history of civilization. We can’t benefit from this global revolution, where citizens embrace our creations — be they apps, services, or devices — and ignore the issues of our time: equality, environment, and opportunity among them.

Continue reading Oh no, Calacanis is mansplaining again!

How Twitter will explode revenue: sharing revenue with top users

Things are getting interesting in the Twittreloin … let us count the ways:

1/Twitter is sharing revenue with their video partners right now, just like YouTube — but no one knows it. And no one knows what the split is. I’m guessing it’s 50-50 right now.

2/Video just rolled out to users in the form of 30-second clips. Many partners have the more advanced video uploading tools, which allow longer clips (including my podcast, This Week in Startups@twistartups).

3/Twitter is letting sponsored tweets into other Apps and splitting revenue with App developers.

As I mentioned on CNBC and here on the blog, Twitter will soon allow businesses and civilians to verify their accounts. After this happens the logical next step is splitting revenue with users.

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This would be an unprecedented move in the social media space — but obviously YouTube has been doing it for years in the video space.

In fact, if Twitter starts splitting revenue with verified users (think folks with over 100k followers), the platform would explode with engagement as active Tweeters could start making a living — wait for it — TWEETING!

I know, it’s crazy to think you could make a living tweeting, but it’s not so far-fetched given the fact that some crazy Swedish dude is making millions per year playing Minecraft and acting like a 12-year old in his webcam.

Here is technically how it would work:

Continue reading How Twitter will explode revenue: sharing revenue with top users

When should you “turn on” revenue with your startup?

breaking bad money

There is a ton of discussion around when startups should “turn on” revenue. In this piece I will tell you a) why this debate exists, b) when you should turn on revenue, and c) do you have to invent a new revenue model for your startup?

A. Why Is there a debate over when to turn on revenue?

Revenue is an “elegantly-simple-yet-complex” discussion. The debate about when to “turn it on” assumes there is a tap just waiting to spit out money in the corner of your office —  and life in 2015 is that simple!

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Subscriptions, advertising networks, and affiliate fees for commerce are all available for your startup in hours — not days or months like it used to be back in 2004!

The reason this is such a debated topic is because consumer products are easy to build but hard to get to scale. Savvy investors advise founders of consumer products to not worry about making money until they actually hit scale.

Why? Five reasons:

1. If you try to make money early, the management team will be spending 50% of their time on product and 50% on revenue. You’ll also be spending 50% of your head count on product and 50% on revenue. Every percentage point of resources — time and money — you put on revenue could have been spent getting to scale. When you’re at scale you will make money — it’s guaranteed!

2. If you charge for your product you’ll reduce the number of customers giving you feedback, and that feedback is essential in — wait for it — getting to scale!

3. If you place a bunch of ads in your product it will, on some level, reduce the quality of the product.

That is why if you look at Inside.com today we are not charging for, nor running ads, in the product.

4. There is unlimited funding available to startups that are growing — at least right now. If you grow you get the dough!

5. Cynical people in the industry believe that if you turn on revenue early you will LOWER the valuation a buyer will put on the company. Their theory is that if you make $1 per year with 10m users you will have proven the business is low revenue, but if you have 10m users and no revenue the acquirer can create their own model of how much they can monetize your user base at.

You can debate these points, but this is how our industry works today. If you choose to debate it you’re going to have to convince everyone around you why they’re wrong. Oh yeah, the people you are going to have to convince are millionaires, billionaires, narcissists, and flat-out winners — good luck!

Continue reading When should you “turn on” revenue with your startup?

Twitter can solve harassment right now with verified accounts

the awesome lizzy caplan in Mean Girls https://www.youtube.com/watch?v=-3HM04crs3s

Dick Costolo wrote a heartfelt mea culpa this week to his staff on the harassment and trolling issue. It’s a paradoxical moment because no company has ever built as sophisticated a harassment policy and tool set as Twitter — yet they still have trolling issues.

In this piece I’ll explain three things: first, why Twitter has this problem and Facebook doesn’t; second, how Twitter can solve this issue today (literally, by the end of the day); and third, why “Verified Twitter” would print money for Twitter.

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Why Twitter Has A Trolling Problem: Pseudonyms

On Twitter you can do the following today:

  1. You can block people: If you do this they can’t follow your tweets and you don’t see them — and they know you’ve blocked them.
  2. You can mute people: If you mute people you never see them but they don’t know you’ve blocked them.
  3. You can set your account to private, in which case only your friends will see your tweets.

B.F. Skinner would be touched by number two, as it’s a clear hat tip to “extinction behaviors.” Blocking someone (#1) is a form of reinforcement of bad behavior, and I’ve seen that people who block each other are actually engaging a deeper, usually twisted relationship. Psychologists would have a field day with these things.

Of course, if you create @jasonisafatgreekbastard and I block you there is nothing stopping you from creating @youfatbastardjason the very next hour.

This is because Twitter is an open platform that allows pseudonyms — a.k.a., “a name you made up that is not your legal name.”

Continue reading Twitter can solve harassment right now with verified accounts

I would invest $100k for someone to make “Google Glass Light” to do *just* this

Google Glass was a wonderful ride and I give Sergey and the Google X team a lot of credit for having the gumption to put a raw and promising product like Glass in the market so quickly.

It was clear from the start that Glass wasn’t ready for primetime, from the battery life to Apps to societal norms. However, there was a killer feature and it wasn’t augmented reality or notifications. It wasn’t maps or local data either.

The best feature of Google Glass was taking pictures!

Given that, why hasn’t a serious technology company said, “Let’s create a pair of awesome sunglasses that take absurdly awesome photos!”

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Literally rip off the dorky eye projecting screen and leave only a camera, bluetooth, and some decent storage.

Call them “Photo Glass” and build an API that allows Apps like Instagram, Path, and Twitter to easily connect to them.

I’m guessing these can be built for $50 to $150 depending on the build and sold for $100-250. It would be 1,000x more successful than Google Glass and every parent would buy a pair — hands down.

Continue reading I would invest $100k for someone to make “Google Glass Light” to do *just* this

Answer this question & you’ll get unlimited funding for your startup

“How can this company return 100x on my investment?”

Answer that question and you will have an unlimited amount of investors for all time, because investors are playing for Golden Tickets (almost universally).

Let me run you through some examples.

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My Blogging Company

Weblogs, Inc., my second company, created Engadget, Autoblog, and 80 other blogs when we sold it to AOL for $30m — 18 months after we started it.

When Mark Cuban invested $300,000 for 15% of the business we had a $2,000,000 valuation. Now, Mark never asked how this business would make him 100x on his money, but in my mind I had a very specific answer for how this business *could* grow fast.

  1. 100x on his money would be $30,000,000, which would require someone to buy the company for a $200,000,000 valuation.
  2. We had five blogs when he invested and I predicted that we could get 100 in three years. We would simply launch a new blog every two weeks!
  3. If each blog made $100,000 per year we would have a $10m per year business, and each blog would be manned by a $50,000 per year writer. That would give a 50% margin.
  4. $5m in profits at 40x earnings (for a high-growth startup) = $200,000,000 (from an aggressive buyer).

Now, we had < $100,000 in total revenue when we sold, but he still did ~15x his money in just over a year — not too shabby!

My Human-Powered Search Engine

I had a crazy idea back in the day that humans could build search results just like the Wikipedia built an encyclopedia (Jimmy Wales, co-founder of Wikipedia had a similar idea around the same time).

At the time I was hot, the Wikipedia was hot, and I pitched this idea to the best investors in the world. At the time it was clear that search was $100b market so my idea was, “If we get 1% of that market it’s a billion dollar company!” In truth, today, you would be worth a LOT more than that.

Investing in Mahalo at $10m or $100m made a lot of sense and we got a lot of amazing investors. We did get to 15m uniques and $10m run rate on AdSense — but we missed the window to sell before the big Google SEO correction (called Panda). Hard lessons learned, but we’re still alive: I’ve built Inside.com out of those Mahalo ashes with a similar concept to both Mahalo and Weblogs, Inc. — and it’s working! Never give up, never surrender!

Continue reading Answer this question & you’ll get unlimited funding for your startup

The Founder Pledge: How big companies can build trust with founders

annie

AOL killed two more of my babies today: Joystiq and TAUW.

These two blogs had massively loyal followings, millions to tens of millions of readers in their primes, and were easily profitable (although perhaps not inside of AOL).

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Closing them down makes no sense, since they could easily continue publishing and be profitable for another company.

I’d rather them be orphans for a bit than be sent to slaughter — yet that’s what Tim did today.

I get it, Tim’s under a ton of pressure to simplify AOL and make some sense out of the dozens of brands they still maintain. AOL has been a long hard road for Tim, and he’s made a ton of progress  — and taken a lot of risk. I actually respect Tim.

Now, Tim’s a sales guy at heart — not a content person. Running a large number of brands is really hard, even for folks who are “content people” like me or Nick Denton. For Tim to have managed all these content folks and brands is just hard and, I’m certain to him, illogical.

“Let’s make all our money from three brands!” is a fine approach (although it’s not the one Disney, Conde Nast, Facebook, or Google have taken — all are “houses of brands”).

Continue reading The Founder Pledge: How big companies can build trust with founders