#AOSS09 AlwaysOn Summit at Stanford/Founders + Funders Innovation Outlook

29Jul09

Always On Summit at Stanford is in full swing this morning after having a banner kickoff last night with a standing room only crowd of energetic, optimistic web dignitaries soaking up gems from SV guru Bill Campbell and gang.   Tune for the two-way Vivu webcast where you can participate via video, watch panel discussions as well as Spin Room interviews with audience members (startup execs, angels, VCs) who offer market insights as keen as those on stage:  http://alwayson.goingon.com/permalink/post/12264
Content NOW will be reporting remotely as well as onsite.  In-room WiFi code: AOSUMMIT09.  Below are highlights from today:

AO250
Company of the Year:  Quantcast – web popularity, traffic visualizer.  Consumer Internet Winner – Mint.  Digital Media Winner:  twofish – managing microtransactions online. Enabling Tools and Devices Winner: EverZing – video search.   Digital Education Winner:  Knewton – adaptive test prep with guarantee. SaaS & Enterprise Winner:  Utest – crowdsourcing sw testing.  AO250 exits fell from 25 to 13, deal value down $5.6B to $899mm, avg value $271mm, median $135mm.   IT asset sales make up 30% of M&A now, double the % of last year, 33% of past year’s M&A activity were asset sales, AO250 less chance of fire sale.  451 bullish on M&A, private company valuations up from 12/08…expected rise in deal volume.  http://www.downtheavenue.com/2009/07/quantcast-wins-this-years-alwayson-global-250-award.html

Bill Campbell, Intuit
Coach Campbell SV guru to Google, Apple, Intuit… Too many interested in financial success and not enough in building a great company.  Sergey Brin and Larry Page considered $100mm in revenue a success.  1st hire should be world class product manager, 2nd should be CFO.  Strong product marketing talent to wrangle technologists and customers and make a market.  When you walk into a management meeting, you don’t want your functional hat on, you want your company hat on, a founder has to be a peer in a management team and CEOs need to listen to the founders.  When CEOs try to be imperial and look like big men, the founders suffer.  To founders: don’t waste time asking VCs for advice, ask entrepreneurs. A good VC is a service business, available 24/7.  VCs have enjoyed way too big slice of the pie historically, model must be more participatory, VC funds have grown too large, they’ve forgotten what it’s like to make quick decisions at the table as a team.  Surround the CEO with great management team.  Don’t mistake charisma for real leadership, you’re title makes you a manager, your team makes you a leader, focus on core management skills and leadership evolves.  It’s tough for big companies to innovate, spend R&D to stay relevant and grow.  Wise entrepreneurs know what they’re good at and what they’re not and surround themselves with people who complement them.  Apple is doing the right thing for their product.  Product focus, customer focus, Steve Jobs, there isn’t a thing he does that isn’t perfect.  Jeff Bezos defies Wall Street, took growth mantra and ran with it, did it his way, makes every CEO green with envy.  Many entrepreneurs are scared to give up equity early but without a good team, you’re just protecting yourself from success.  Eric Schmidt is all about judgment.
http://www.downtheavenue.com/2009/07/bill-campbells-take-on-key-entrepeneurs-innovators.html

Bill Gurley, Benchmark Capital
Online Video – Snapshot of a Speeding Train.  Affiliate fees are big deal.  Netflix business model is widely misunderstood, can do what they do with rentals in the digital space, the law does not translate.  Expects Hulu to adopt a premium model to allow for proprietary content in their subscription mix.  Suspects people aren’t buying BluRays because HD digital on demand is coming.  In next 12 months Comcast will launch competition with Hulu, same style interface, but bigger catalog (Fancast?  Comcast Broadband for subscribers?)..Comcast will likely offer a VOD system or introduce metered internet which bills certain content separately..user interface and one click important for digital.  Cable companies don’t want to be dumb pipe providers vs the intellectual brilliance of video aggregators.

Shishir Mehrotra, YouTube Monetization
All offline video models that exist off-line will move on-line (PPV, subscription, ad-supported), but higher ratio of ad-supported, customers won’t spend the same online.  America’s Got Talent has 13mm viewers, Jill & Kevin’s Wedding Video has 11mm.  Advertisers are now asking for performance, once you can measure it (CTR), you do.  Highly differentiated video content producers (NFL, MLB< NASCAR) should be able to monetize.

Adam Cahan, Auditude
In order to have subscription video, you need a truly differentiated value proposition.  Comcast will be interesting in online video.  Time Warner too.

Paul Jacobs, Qualcomm
The US is no longer behind the rest of the world in mobile devices, Asia no longer leading mobile innovation, excitement is coming from SV and Canada.  4+B mobile phone users in the world, 830mm on 3G, by 2013 will grow to 2.4B.  User experience on mobile is often slowed by computing power not slowness in the network.  Qualcomm offers nationwide TV via FLO TV.    Mobile devices are a bridge between digital and physical world.  Qualcomm’s goal is to expand wireless ecosystem into thousands of devices.

Bart Decrem, Tapulous
Mobile gaming is making millions because we’re on a platform where people are used to paying.  Apple has abstracted away the carrier.

Purnima Kochikar, Nokia
I feel like a foreign exchange student at the iPhone lovefest.  Three mobile tool categories consumers will pay for:  get ahead, make more money, get a wife. (Life App – big in India – will become big in US as computer and mobile become one, @tomfahey30)

Matt Murphy, KPCB iFund
Trend to mobile browser is real, unstoppable, independent of app store.

Dorrian Porter, Mozes
Development for browser ensures a more unified experience, app dev gets difficult to update.

Simon Khalaf, Flurry
Now is the rise of the middle class of mobile developers, iPhone and Android are easier to build on than incumbents.  I’d choose iphone first, Android next and what’s going on with BB guys?

Mitchell Baker, Mozilla
Innovation on large scale is next goal.  That’s how we’ll get more personalization, customization.  Find area where you can give up some control in the design process, invite public in, can you deal with that discomfort?  If we did it all over again we would still create collaboration frameworks, but move faster.

Marissa Mayer, Google
Eric says: don’t kill ideas, morph them into better ones.  There’s never a recession on innovation.  Community feedback in the early days made Google think hard about how to make ads more useful.

Dan Connors, Telltale Games
Telltale licenses games adapted from other media (films, comics..), won 29 awards since 1st game launched.  Benefit from the episodic effect to grow audience over time and life of the product.

Italian World Channel
Site targets US Italophiles  who wants art, beauty, food, lifestyle from an Italian perspective, exclusive content from award-winning filmmakers, novelists, jorunalists, feel Italian for 5 minutes a day (a snackable vacation).  Looking for investors and partners to syndicate their content.

Gary Shapiro, CEA
Innovation is disruptive to the status quo, succeeding puts someone out of business, has to be allowed.  Innovation, I can’t describe it but I know it when I see it.  We’ll go down in history for giving our kids digital but less wealth.

Michael Yang, Comcast Interactive Capital

Jeremy Liew, Lightspeed Venture Partners
Social games can be developed much faster and cheaper than console games.  Traditional media is not dead but needs to embrace syndication, program for the web and integrate ads in deeper ways.  There are plenty of media ops left, Twitter and Facebook have not sucked all the oxygen out of the room.

James Slavet, Greylock
What’s going to save the music business – ads, premium subscription, lower costs.  Media industry is not dead but needs to change.

Tim Chang, Norwest Venture Partners
Music industry survives by becoming a service like Pandora.  Millennials like Free to play + microtransactions + tiered service, they don’t consume content, they self-express with it.  Consumption + Downloads are out;  Self-expression + Cloud are in.  Music industry has a chance to become the first ‘media as a service’ industry, enter new age by embracing gaming business models:  virtual goods and subscriptions.

Jason Pontin, Technology Review
Print ad down 30% this year, beloved pubs going bankrupt or laying off newsrooms.  David Weiners – journalists will be replaced by sourcers and that’s a good thing.  Jay Rosen view from nowhere, viewers want transparency not objectivity that doesn’t exist.  If journalists lay out viewpoint, its no longer reporting these are the facts, its editorializing, op ed has its place elsewhere.  journalism is not rhetoric, opinion steer recitation of facts.  Revenue sources to sustain quality writing:  advertising… banner ad dragged over from traditional.  Pay wall did not decrease traffic at Technology Review.

Michael Arrington, TechCrunch
Speaking on future of journalism, business models, journalists if you consider yourself one you are one, will always have a way to make money, Politico, 7mm monthly readers half the age of TechCrunch, all came from mainstream media, turned into a profitable business, 3 days a week print magazine, then look at NYT, still doing $3B year in revenue, hasn’t changed much, nicest offices ever seen, 1200 people in their newsroom. Imagine if VCs gave the top NYT reporters to start a venture like ‘Politico’ they’d do very well, all the overhead has to go. Journalist feel they have objectivity on their side, readers trust transparency more than objectivity, aim for vibrant discussion around content we create, I have a lot of disdain for my readers, they don’t know what they want, don’t want readers input, a camel is a horse designed by committee, porsche designed by committee is a volvo, listen to customers get nonsense, don’t listen get iPhone.  I talk to real journalists, people like Steve Gilmorr who has been a real journalist since the 1700s.  Journalists can’t sit in an ivory tower and assume they make all the rules.  Readers know what’s real and what’s opinion.  Don’t treat readers like gerbils to be protected and shuffled around.  They’re not stupid.  Challenge core pillars of what journalism is.  Was Twittergate the right thing to do?  Didn’t listen to readers that said don’t post Twitter docs.  Not looking to form a mob. (interesting reply @techsmartup:  http://gawker.com/5321659/twitter-might-sue-publisher-of-hacked-documents) Like freemium model, gets audience quickly, people will pay real money for quality, Apple perfect example cuz brand is soooo cool. TechCrunch is a brand, we can make good money at a party.  Make money with 10-12 small square ads, ad rates constatn, not obsessed with page views.  Defended Chris Anderson when moderator called him a hypocrit for writing Free when Wired, a Conde Nast pub doesn’t practice Free – unethical to attack him without him being here.

David Smith, Media Smith
Press is attached to print, print will always exist but in a smaller form, those that recognize that they’re in the news business rather than the print business will survive, news will exist in many forms, long tail of blogs will thrive, way difference bw Fox and CNN and their is opinion in everything we read.  Online advertising buying is broken, systems integration problem, starting to fix pain points, hopefully new media will do better than the web, tremendous inefficiencies, cost 3x as much for agency to place web ad than traditional ad.

Tristan Harris, Apture
Reader has infinite options.  Publishers supplying info, readers demand are infinite, 20-40% of publishers traffic goes to Google, look up journalist political leanings on Facebook, LinkedIn.  HuffPo gets a ton of traffic by stimulating conversation around video.   More rich media, e.g. photos in blog post, draws more traffic.  Or build a brand like TC and monetize it.  leverage as much mm content to leverage in site, never have a reason to leave.  Bring in rich media to allow audience to stay a long time. Integration of widgets, polling, rich media key to reader retention, if its all being fed onto the page, the reader doesn’t need to leave.  The more media we add, the more interested advertisers are.

Vivek Ranadive, TIBCO
Thinks Google’s best days are behind them.  Bing is more of the same. Amused to see MS/Y! tie two rocks together still don’t float (like Excite/Home)  #2 #3 get together, whatever Y! market share is today will be the combined market share.  Bill Gates will go down as great humanitarian (saves a million lives a year).  Steve Jobs what can you say, if this is Florence, he’s the Michelangelo.  Apple should have been a sw company years ago.  But has done amazing things. Listening, no more closed system. (Tony Perkins agreed.  1/3 of SV companies started by Asian or Indians)  SV a global phenom, the greatest place on the planet to live.  This is where innovation is.  Got green thing, biotech..  On VCs..still some good ones.  Entreprenuers spend too much time listening to VCs, VCs give too much money, long shot odds, system designed to fail, KPCB, Sequoia smart culture, great VCs.  AO the place to be!  Bill Campbell is terrific, been winning ever since Columbia. (Find him at Old Pro F 4:30, always there.)  FB amazing, Twitter has promise.  Emerging as a platform, direction they’re going to take.  Look at history, Y! was going to buy eBay, then eBay was going to buy Google, didn’t.  Hopefully will still be here in 5 years. love the Valley, lots of op ahead, investing in companies, storage in stealth mode, like hardcore tech stuff.  To young CEOs, everything that has been done can be done better, work with those smarter than you, never give up.  Your best resource are your people, half of successful companies started in adverse times, people welcome innovation in times of need.

@KeithFerrazzi, Who’s Got Your Back
Circles – Fluid with change in lives, out of box thinker, undisciplined, triangles – will do anything to get to the top, ruthless, square – world need accts, circles need you disciplined, only ones using corporate CRMs, z – fun at cocktail parties, did it my way, do my own thing, silly diagnostic, www.keithferrazzi.com, how do we accelerate the relationships we need, former Deloitte (youngest partner ever), Starwood CMO, worked with Mike Milken, relationship DNA 28 questions how to improve relationship skills, build solid networks and relationships, not about schmoozing, eye-darting, great relationships/success – generosity and real intimacy – real biz relationships are personal relationships in the business world – not transactional, must be authentic – tactics – you need 3 people in your life who have your back, can let your guard down with, mutual generosity, bend over backwards, I’m your ambassador in the world, candor, accountability, P2P support works, successful people have it.  Find someone at this event you can care about, that requires you to ask fundamentally different questions.  When you project that into another person, you light up.  Find someone who you can help.  What did you come here for…maybe I know someone.  Try to make this event more successful for each other, power of events is in the audience.  Find the lifelines in your life, take risk, have more courage.  Do be afraid to ask, the worst anybody could ever say is no.  And it feels so good to give.  (@techsmartup added this: http://www.huffingtonpost.com/keith-ferrazzi/whos-got-your-back-the-fo_b_210954.html, then Tina Seelig went onto networking speed dating and it was off to cocktails).

ONSTAGE TOMORROW:
Vinod Kohsla
Ron Conway
Joe Kennedy, Pandora
Dan Scheinman, Cisco
Norm Fogelsong, IVP
Tom Malloy, Adobe
Shervin Pishevar, SGN
Bambi Francisco, Vator.tv
and so much more

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