» 2008 » December

Understanding the core principles of a Venture Capital deal can be quite the challenge.   For starters, you need to know that VC money can be smart money but its real expensive money too.

There are different stages of funding but today I’m going to be discussing an early stage term sheet.  Also, you need to know that east and west coast deals work differently.  West coast deals seem to have better terms than East coast – this is primarily due to the investment banking type of mentality you find in places like New York and Boston.   First question that probably comes to mind is why shouldn’t I just get west coast funding?  Well, it’s not that easy, West coast VC’s tends to want to have you in their backyard.  So unless your geographical located in Silicon Valley, this will be a challenge.

The most common mistake entrepreneurs commit is that they get completely blinded by a valuation and forget about the terms.  Whatever you do, make sure you get a good lawyer that knows about these things.  If you have a friend who’s already been down this road, don’t be afraid to ask them for a referral to their lawyer.

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Vivek Kundra, D.C.’s Chief Technology Officer, invited me to his office yesterday to discuss the upcoming inauguration and government operations with the other Apps for Democracy winners.  I walked away from the meeting thinking one thing - Vivek Kundra is a bad ass!  I never in my wildest dreams thought a government official would make it to my top 10 technology hero list.  He now sits along side Bill Gates, Steve Jobs, Kevin Rose and Michael Arrington to name a few.

Forget about the fact that he manages a staff of 600 people that provides technology services and leadership for 86 agencies, 38,000 employees, residents, businesses, and millions of visitors, his approach to technology and government spending is unbelievable.  He has taken a $500 million yearly budget and visualized it in such a away that a 4th grader could understand it.  His rationale was that before he arrived, the government was spending an unforeseeable amount of tax payers’ money and nobody could account for it.  Now, everything is elegantly displayed on dashboards that surround what looks like the trading floor of a stock exchange.  The custom built Ruby on Rails solution displays everything you need to know, including budgets, time lines and even a  ‘happiness’ factor.  I’ve seen a lot of cool things and just recently went to the Google I/O conference and the TechCrunch 50 but nothing tops the operation I saw at his office.

If you ever get an opportunity to meet him, don’t hesitate.

The D.C. government is working diligently to prepare for the 5 million plus tourists that are expected to visit our nation’s capital next month.  Challenged to learned more about what the government should do to prepare for the inauguration, I turned to the people.

See what a few tourist said about the upcoming inauguration below.  If it wasn’t so cold, I would have filmed for longer but it got to the point that my finger was too numb to push record!

A very simple yet effective Search Engine Optimization (SEO) technique that I always recommend to my clients is to start out with a small Pay Per Click (PPC) campaign to measure the keyword effectiveness and then move onto SEO.  There are so many SEO consulting firms out there that focus purely on keyword traffic and I’ve never understood this approach.  The same rules that apply to an effective Search Engine Marketing (SEM) campaign should apply to a SEO strategy.

I guess the big question is, do you want traffic or conversions?  I’m curious to hear your thoughts on this.

The other supporting argument for this approach is that its a lot faster and efficient to A/B test a SEM campaign versus a SEO campaign.  How are you going to know what conversion funnel works the best?  Wait months for the SEO efforts to pay off?

Some folks just don’t want to spend the money on PPC.  I know that the ROI would be a lot better and its short sighted not to make a small investment up front on PPC.  So be smart, start with PPC and then transition to SEO or else you’ll find yourself at a dead end.

I was walking down Pennsylvania Avenue, D.C. and caught a glimpse of what seemed to be a new prototype for an electric Saturn.  The 3 gentleman that were rolling the car into a trailer weren’t to enthusiastic about the fact that I filmed a few seconds using my new HD Flip.

HELP US!

Since the start of my career, I have had a never ending feud with Google about their double ad serving policy.  For starters, Google’s customer service team is setup in such a way that they help first time search rookies the same way they help Google certified companies.  There should be some benefit to being a Google Adwords certified company other than just being able to showoff their logo.  I personally believe that these folks should be escalated up the ladder a bit; why else did we spend the time to take your certification.  It’s annoying that every time, I ask a question, I start at the bottom with the same canned answers.  Not to mention, that we spend in excess of a million dollars a year with Google. (more…)

Mark Zuckerberg's lame corporate profile shot

We all know that Mark Zuckerberg is the youngest billionaire but the big question that I have is, did he sell his soul to the devil getting there?

I’ve been a big fan of Facebook since its inception.  However, in recent days, it’s become more evident that their approach to success is selfish and user security and privacy is slowly becoming less of a priority.  I see more and more users getting hacked and sending out crazy emails that bait you into some sketchy malware website - urgh.  I even got fooled the other day by some crazy message.  Where’s it going to stop. (not to mention Facebook is done a good job at keeping this out of the media)

I liked the days where Facebook had a targeted niche of well rounded individuals that didn’t play dirty.  I feel like its become a centralized highway of unsolicited crap that I get on a daily basis which I have to weed through to actually hear from my friends.  It’s getting annoying.

I’m a big fan of opening up the application development but there has to be some sort of quality control, some of these apps are just plain ridiculous and all they want you to do is click on ppc links.

So is the house of cards going to collapse?  Probably not, but it’s due for a major correction.  Current market conditions are making the few surving online advertisors smart and this will eventually catchup with Zuckerberg.  I think he needs to stabilize his growth and think about quality and not quantity.  Advertisers would be happy to pay more to have better conversions.

Call me crazy but I see this as the beginning of the end of the 10 billion dollar valuation.  Facebook is here to live on forever, but I think Zuckerberg is in for a big suprise.

Share it - loose it

I’ve always been a fan of tech videos on the web.  I remember the good old days of Tech TV, previously ZDTV, now defunct.  The newest of them, Techfluff.tv just recently launched its 3rd episode on Europe’s number one Web-Tech conference in Paris, Le Web ‘08.  TechCrunch just recently covered the show explaining that “every week TechFluff delves into the world of web-celebrities and tech startups, particularly the London scene”.

I think online video has always presented monetizing challenges even more so through its syndication channels.  This past summer at TechCrunch 50, I heard Ashton Kutcher talk about his theory on this topic and how he was using product placement on his show, Blah Girls.  I can understand how that might work for an animation of sort but its difficult to execute product placement opportunities when it comes to on-site interviews.

Take Kevin Rose’s Revision 3 for instance, I know that he has sponsorship opportunities on every show and he executes them well but do you think online advertisers expect more?  I think so, I think online advertising is much more about direct response (call to action) type of advertising then branding or sponsorships.  Take a look at the evolution of banner advertising and how far that has gone.

I don’t think showing a sponsor on a show has enough stickyness to it but if they can figure out a really clever way of incoporating the sponsor into the content that would be cool but then again does that break the editorial code of conduct?