Jeff Clavier's Software Only

Twitter: Where Nobody Knows Your Name - Yet ?

Props to Kara Swisher for prompting me to open Ecto and work on a blog post, something I have not done in a long long time (almost 5 months since this announcement of my Seesmic investment). I won't even apologize to my 122K RSS subscribers (what ?) because I am not feeling apologetic at all. I have moved on from blogging - feeling the obligation of developing 500 word pieces that took sometimes a couple of hours to assemble - to bits of 140 characters, and rarely videos, I post every now and then and I suspect that a lot of my “audience” - entrepreneurs, VCs, established Internet companies and other constituents have pretty much followed me to twitter. Disclosure: I did not invest in Twitter but a lot of my friends have.

Kara makes the point in her post that Twitter is not very well known outside of Silicon Valley - yet and asks when we'll see a mainstream adoption. This is true and I suspect very similar to Flickr's initial ramp 4 years ago. In comparison Facebook was broadly known and used in her sample audience, but I would argue that anyone actively using Facebook status messages might be counted in the Twitter “use case”: easy to publish micro bits of information, including pointers/notifications to other pieces media.
This micro-chunking of the information - the arbitrary limitation to a few tens or hundreds of characters in a world of Gigabit networks - drops the time commitment barrier to a couple of minutes tops. Most people can't commit large chunks of time to read/write/comment on blogs, but everyone has a couple minutes to spare a few times a day... not too far away from a phone or a computer.
Offering broad access on the web, on the phone, one message at a time or through applications, in real time (even if you are not pushing it like Scoble does) or in batch mode, allows time (and CPA ?) challenged users to get a quick return on the attention investment they choose to make at any point during the day.

Would we spend more time face to face in order to catch up on our day to day ? No, lack of time. Is it sad that we proxy a conversation with a 140-character max status update? No, because a tweet might lead to a conversation that would not have happened in a first place. You can't speak to me, I won't read you, but do notify me - sort of thing. Do I need to ask myself if I am a writer or a journalist before twittering ? NO. And that's why we'll see eventually millions of users of these simple communication tools starting to publish bits about their lives, even though they will never have a blog or use an RSS reader.

Note that I am making the case for a broad adoption of micro-blogging, or whatever that “super easy posting of a personal status update” is called. As to whether Twitter, Facebook or another yet-to-come service will be the “winner” in the space, who knows. But the broader audience, and the broader need, will be there. As to how you turn this into a business, and make money? There are enough smart people in and around these services, and enough usage, that something will eventually be figured out IMHO.

And if you marry that with the iPhone platform, it gets even more interesting. But that's another story... in 5 months or so.

Photo Credit: PinarOzger. Don't ask me why I felt that this picture of Tim O'Reilly bowing to Dave McClure was relevant to the story, but it did ;).

At, On and In Seesmic

Even though it is still in closed alpha, Seesmic has started generating a lot of buzz in Silicon Valley, in France and in the Social Media ecosystem. I remember clearly when its founder, my dear friend Loic Le Meur, told me months ago about the idea of a video community that would be able to interact and exchange using short form videos - sort of a “Twitter for Video”. I don't recall if my initial reaction was “Doh”, “Yukh” or “Pfffh”. Then, mid October, I had access to the very cut of the product. It was still pretty raw, or at least medium rare, but definitely showed a lot of potential for creating conversations through short form videos on Seesmic itself, but also the on other services that videos can be posted or linked on. I also saw the initial frenzy - that we are used to - around the release of the first set of keys to access the application, and the increasing number of videos created by the first few hundreds of test users. For a group that size, they create a *lot* of video content, and we can see conversations happening around these videos on twitter, youtube or individual blogs.

So yesterday I was at Seesmic, visiting the office - great space I must say, just a puppy promenade away from Dogster's headquarter - where the previously announced recording studio is being built. This gave me the opportunity to be on Seesmic, in show #40 which also featured the inaugural Seesmic logo, aka “The Racoon”. And finally, on that video, I briefly announced that SoftTech VC was investing in Seesmic, joining a list of prestigious investors.

So thank you Loic for giving me the opportunity of being at, on and in Seesmic! And yes, from now on, you will be referred to as “Number 8”, since Seesmic is the 8th investment of the fund. Those paying attention will point out that I had announced 4 investments to date - correctly so. It is just that investments #5, #6 and #7 have not been disclosed yet. They will at the right time in the near future.

I have embedded show #40 in this post, but if you want to suffer watch the full segment we taped, you will find it here.

Finally, I announced on the show that I had a few Seesmic invites, feel free to leave comments, link to this post or message me on twitter (@jeffclavier), and I will send you an invite code.

Tags: seesmic

Announcing SoftTech VC’s $12M seed fund – the Return to the Dark Side

After 3 years of angel investing in 20+ Consumer Internet startups (and profitably selling 5 of them), I am very excited, and humbled, to announce the launch of my very own VC fund, SoftTech VC II, L.P. Some of you may wonder what is actually the difference between what I have been doing until now – after all I am still referred to as a VC by many – and this new $12M fund.

One major difference: I have taken the step (back to the Dark Side ☺) and have raised outside capital, from a mix of fantastic institutional and private investors. Angels invest their own money, VCs invest capital they have raised from others - as well as their own since it is market practice that Fund Managers also contribute to the fund’s capital. In most cases, it is extremely difficult to raise the first fund of a new firm. Despite great individual track records, it might take a year or two of effort to assemble a syndicate of Limited Partners (this is how people investing in VC funds are referred to) willing to back a new team.

When I left my previous fund (Reuters Venture Capital), I wanted none of that: my passion was working with early stage entrepreneurs, supporting them with time, cash and connections. And since I had zero track record in the consumer internet space, thinking that I could raise outside capital in 2004 would have been a total fantasy. That’s why, like so many entrepreneurs, I decided to bootstrap my own startup – using some of the family’s savings and generating cashflows from a few consulting gigs. It just so happens that the “market” I had decided to enter was early stage investing… in other startups. Last June, serendipity helped me decide, and eventually secure, the next logical step for SoftTech VC. As many friends in the angel and VC community were asking me whether I was thinking of joining an existing firm, or raise my own fund at some point, a few people hinted that they would be really interested in investing in a fund if I was to start one.

A few more discussions and one PowerPoint, later the core foundation of my new fund was there:

• invest in 30 to 40 seed stage startups
• average “bite size” of $250K, ranging from $100K to $500K
• able to lead, co-lead or follow other firms or angel syndicates
• focusing on consumer Internet, but with a great flexibility to enter new sectors opportunistically • open to a few non Silicon Valley deals
• capital efficiency, great teams, differentiated ideas and flexibility on “how big it can become” will be common characteristics shared by the companies we invest in
• working hand in hand with the best firms in Silicon Valley, and the usual suspects in the acquisition gang, to build a successful outcome for everyone involved
• I would be the sole Fund Manager of the fund, with the support of a fantastic advisory board: my friends Jon Miller, Josh Kopelman and Reid Hoffman

The actual size of the fund was the subject of an interesting discussions, tossing around different numbers that all would have made sense: $5M, $10M, $20M,… A number of factors led us (my investors and myself) to decide that $12M was the right amount, and a significant portion of the fund was subscribed in just a few days, with final allocations having been made a short time thereafter. You have two ways to look at how long it took to raise the fund: 3 ½ years of hard work since I started investing, or a few weeks. All this would not have happened without the support and wisdom of the great investors who decided to follow me in this adventure: Jon Miller, Reid Hoffman, Josh Kopelman, Geoff Ralston, Jim Bankoff, Mark Fletcher, MR Rangaswami, Loic Le Meur, Brad Feld, Frank Caufield and his firm Darwin Ventures, Tim Chang and the whole Norwest Venture Partners team. And no, I am not naming everyone – some investors want to remain “stealth” and I obviously will respect it. But thanks to ALL of you.

I am used to always direct any bit of attention I get from the media to the real heroes: the entrepreneurs I have the privilege to work with, building great companies, capturing markets and having fun at the same time. I am therefore super psyched to introduce the first four investments of SoftTech VC II. Yes, four. Been busy this summer, between forming the fund, selling two companies (Yay Kaboodle and Maya’s Mom!), and getting these four to the finish lines.

I will write a post about the fund’s investment areas of interest later this week, and want to share a quick background to these new investments:

• SocialMedia.com was co-founded by my good friend Seth Goldstein, and has been building an infrastructure and an ad network targeted at social network application developers. The company will help these developers manage, market and monetize their applications.  After just a few weeks, last Friday’s revenue on Facebook alone, was over $10K - most of which was distributed to independent developers.
• Active Athlete Media’s focus is active consumers who participate in sports, and the advertisers desiring to reach this passionate audience engaged in the sports they love, on thousands of mid to long tail websites. To date, I had been reluctant to jump into a sport-centric community (passion centric communities will still have a strong representation in the new portfolio). However a monetization solution like Active Athlete’s, which has been steadily growing and generating revenues, became very attractive in order to set foot in the category.
• Satisfaction Unlimited announced its funding mentioning me as an angel investor just last week, but I am pleased to point out that it is actually SoftTech VC II that made this investment. I have known the co-founders of the company, Thor and Lane, for a long time, and saw their concept of a People-Powered Customer Service being refined and improved over the course of several meetings through the summer, and could not pass on it.
• Grouply is one of these “The World Needs” companies where one day I decide that a product or service needs a fresh start. There are hundreds of millions of users of message boards, email lists, forums and online groups products like Google Groups and Yahoo Groups, and they have not evolved for a long long time. Grouply will help solve that by enabling users to easily adopt a richer and more powerful experience for their existing online groups.

One of the key factors that have influenced my decision to get on this journey is the sheer number and quality of many of the companies that I have had a chance to be introduced to. I feel extremely lucky to have the best job in the world, and to be given the opportunity to take my passion to the next level.

MySpace now top US Internet property in front of Yahoo (well, not exactly)

Reuters just relayed that, according to Internet tracking firm Hitwise, MySpace has surpassed Yahoo as the number one Internet property in the US. The piece does not indicate which metric is being used (unique visitors, number of visits, number of page views, etc) but it might be visits. Hopefully Hitwise will has released that analysis on their (very informative) blog: MySpace Moves Into #1 Position for all Internet Sites. The chart below shows the growth of MySpace’s market share against Google. It would have been nice to have Yahoo’s  plotted as well.

A few interesting data points:

• MySpace accounted for 4.45 percent of all U.S. Internet visits for the week ending July 8, pushing it past Yahoo Mail for the first time and outpacing the home pages for Yahoo, Google and Microsoft's MSN Hotmail.
• To put MySpace's growth in perspective, if we look back to July 2004 myspace.com represented only .1% of all Internet visits. This time last year myspace.com represented 1.9% of all Internet visits. With 4.45% of all U.S. Internet visits, myspace.com has achieved a 4300% increase in visits over two years and 132% increase in visits since the same time last year.
• MySpace captured nearly 80 percent of visits to online social networking sites, up from 76 percent in April. A distant second was FaceBook at 7.6 percent.
• Of the top 20 search terms driving traffic to Internet sites – over the past 4 weeks, 5 were related to MySpace (myspace, myspace.com, www.myspace.com, my space, myspace layouts) representing in aggregate 1.85% of all searches (and that’s just looking at these five keywords).

This makes NewsCorp's $580M buy of Intermix Media increasingly look like a bargain – especially as FIM improves the monetization of that massive audience and traffic.

Just so happens that Fred Wilson also featured the Comscore Mediametrix June numbers regarding top social networking sites. Per the aforementioned statistics, MySpace dwarfs other networks both in terms of actual audience and growth.

Update: I am late (very) late at publishing this, but Yahoo got very angry at the allegation made by Hitwise, and Tim Smith from Outcast PR reached out to bloggers with the following statement:

The report that Hitwise released today with the headline “MySpace Moves Into #1 Position for all Internet Sites” is misleading. The Yahoo! network is made up of many domains and it is not accurate to compare MySpace.com to just Yahoo!’s mail.yahoo.com domain. When taking into account all of Yahoo!’s domains together as an entire network, Yahoo! clearly remains the number one property in terms of audience share, duration share, page view share and days visited per month.

In the U.S. alone, Yahoo! attracts 129 million unique visitors per month, which represents 74 percent of the online population; in comparison, MySpace reaches only 30 percent of the online population with an audience of 52 million unique visitors. In addition, Yahoo! has the largest share of online time spent than any other property: Yahoo! accounts for 13 percent of users’ online time, while MySpace has only 3.2 percent share in users’ online time.

Yahoo! maintains its leadership position as the world’s most trafficked Internet destination online, with a community of more than 500 million unique monthly visitors from around the globe.

(These statistics are according to comScore Media Metrix, June 2006)

I thought I would ask my friend LeeAnn Prescott from Hitwise what they thought of the reaction, and Hitwise's public statement was:

Hitwise ranks over 500,000 websites on a daily basis, including individual sites as well as the domains and sub-domains of larger websites. The press release issued yesterday included the top-10 domains and at no time did we represent all MySpace properties compared to all Yahoo! properties. The table included in the press release listed the rank order of the individual domains and sub-domains as reported from our data.

Net net: Hitwise seems to have compared apples and oranges when publishing their report, and we (I) have not investigated quite enough before relaying the information.

Tags: myspace

Tags: myspace

Scoble is movin' and the blogosphere is shakin'

I came back to my hotel room late last night from a fantastic dinner with great company (thanks again Will) and crashed before checking my feeds. What a tidal wave! The news about Robert moving to PodTech.net has completely taken over Memeorandum (and temporarily crashed PodTech's servers because of the traffic)!

What I find almost hilarious is that Robert’s move has leaked as a rumor that the tech bloggers have immediately jumped on (“Rumor”, ”might”, ”may”, ”will”, ”is going to”, ”50%”, ”100%”), before Robert and John had actually crafted their announcement:

I looked at my cell phone and I think there was a call from Om Malik that I ignored (sorry, Om, I didn't know you were calling about THAT). Then the email started coming in. Oh, crud. It was out.

It also means that the reasons and circumstances of Robert’s leaving were subjects to rumors and supputations, so much so that Robert had to counter most of them in Correcting the Record about Microsoft.

I don’t think that Microsoft is going to suffer the setbacks that some posts are predicting, first because the changes that Robert and the other 3000 bloggers of the company have helped kick in gear are already under way, and second because other bloggers (like Niall Kennedy, yes buddy, yours to fill the gap now) have an opportunity to make a similar impact.

I just spoke to Robert for a few minutes ago to congratulate him and Maryam for the move, and I need to do did the same with John who has scored yet another coup by luring the most well known corporate blogger to his startup. I look forward to hearing more about Robert’s new role at PodTech, but what is clear is that he will contribute to getting podcasting, and I would bet video-blogging, to its next milestone, using his footprint in the both the corporate and consumer worlds to evangelize it.

There will be more news coming in the next few days, especially since we only heard one side of the story (cryptic statement that will make sense later this week). And I can't wait for the leaving party (or parties) that will take place around Gnomedex since Robert's official starting date is July 1st.

Update: Dan Farber reports on his meeting both Robert and John at Vloggercon.

Gil Penchina takes the CEO spot at Wikia, and other musical chairs

My good friend Gil Penchina, the former VP International of eBay, has taken the CEO spot of Wikia, the company offering a wiki-based infrastructure to build open editable communities, per the official press release. Mike Arrington and Gil have also recorded a TalkCrunch podcast, and I recommend listening/watching Gil's intervention at the Entrepreneurial Thought Leaders Seminar.

Gil is a very active, and gifted, angel investor and even while being based in Paris and traveling all around, he has managed to get involved in a number of interesting companies here on the West Coast. From his LinkedIn profile:

Active angel investor in Linkedin, Wikia (wikipedia spinoff), Flock, Wink, Become.com, Vamoose, Paypal, Findwhat, Evite, Feedster, Betzip, Qype, Bounty, Properazzi, Military.com, eTour, Desktop.com and many more

I actually expected Gil to join a VC firm (and he definitely could have done so) but he decided to jump in the startup world - hats off for that, and I look forward to seeing what happens to Wikia in terms of growth and commercial success. Note that in true Wiki approach, the “About Wikia” page can be edited and I added Gil to the page since he was not listed there yet.

Today also saw other announcements, namely Tara “Pinko Marketing” Hunt leaving Riya, Philippe Kaplan passing the reigns of AdBrite to Iggy Fanlo and Mark Fletcher leaving Ask/Bloglines to look after his cats start thinking about his next company.

Photo credit: Esther Dyson

Tags: gilpenchina

EBay launching blogs, wikis and tags at eBay Live

I blogged yesterday about the panel I am participating to at the eBay Developer's Conference, on Community and Social Tools - and what they mean to the eBay ecosystem. It sounds like Laura Merling, Kevin Rose, Ross Mayfield and I will have an easier job convincing the crowd that these tools can be of great benefit. AuctionBytes just announced that eBay blogs and community wikis were being launched at eBay Live.

eBay will be introducing eBay Blogs, another way to give sellers an opportunity to market themselves, as well as an eBay Community Wiki. eBay is holding sessions on the new tools at the upcoming eBay Live conference in Las Vegas June 13 - 15.

The session called “It's not About Me, it's eBay Blogs!” shows conference attendees how they can use eBay Blogs to write about the things they sell and build their networks. Another session, called “Wiki 101 - An Overview of the eBay Community Wiki,” defines Wikis in general, looks at Wiki implementation on other sites, and discusses Wiki features eBay provides to the Community. eBay has already created a discussion board devoted to eBay Blogs, though it's not yet available on its main list of discussion boards.

A community blog called the Chatter has also been launched last month, hosted on TypePad - and more interestingly, with a TypePad URL: http://ebaychatter.typepad.com/the_chatter. How about listing blogs hosted on edgeio (Disclaimer: one of my investments) ?

Tags: ebay

Wine Spectator launches editors blogs and RSS feeds

The Wine Spectator is one of the leading US publications on the world of wine, featuring reviews, ratings, analysis, etc. The ratings are particularly influential when it comes to how well a given wine will sell, and for how much. Wine Spectator Online subscriptions ($49.5/yr) can be purchased separately from the magazine in order to access to their extensive wine ratings database, articles, etc. The latest addition to the content: blogs, developed by five of the editors/columnists.

Because they make content available behind a toll booth - which I am happy to pay for because of the quality and authority of it, Wine Spectator has elected to make blog posts available only to subscribers, and to my surprise, it does not prevent a lot of comments and active conversations from taking place. Comments are moderated (comments policy here) but at the end of the day, each subscriber is clearly identified - and accountable - through his/her subscription identity, making comments pretty relevant. On that topic, Editor and Publisher Marvin R. Shanken writes (sub req'd):

The blogs make an interesting contrast with our forums. For many years, this site has offered an open forum--and I mean open--where wine lovers can gather to discuss a wide range of wine topics or just rant. These forums are very popular. Thousands of wine lovers have signed up as members, and many more “lurk” on the site just to read the discussions. Some threads end up with many thousands of viewers. It is our way of giving wine drinkers access to a community and a home to visit.

But some of our editors have been reluctant to comment there, myself included. For one reason, the site allows posters to use screen names. While most posters behave responsibly, there are some who write inappropriately from time to time, saying things they would be otherwise afraid to say if they were required to use their real names. Some clearly have a hidden agenda, though we have no way of knowing exactly what it is or who they are.

The beauty of the new editors' blogs is that they are offered behind a wall--that is, only online subscribers can read them and post comments. Everyone is required to use their real names.

RSS feeds are available: all blogs, daily wine picks, etc. Daily picks are available as a free full feed, which is great. Only headlines are available for blog posts, content has to be read on the site - which is a bit of a bummer. I should be able to enter my subscription password in order to access the content in my feed reader, or at least the first paragraph of each post should be made available as a partial feed. I would also add support for trackbacks in order to bring in “outside” conversations, and FeedFlare-like features to the feeds.

Not perfect yet, but a very welcome development. And it is interesting that blogs are used to develop further the Wine Spectator community, as opposed to being used as a lead generation/subscription conversion mechanism.

Update: I have been following some of the conversations between Wine Spectator's editors and their readers/commentators, and I confirm the sentiment of having an expert, or at least highly clued-in, audience getting involved on these blogs. Definitely worth the read.

OnHollywood: Consumer Generated Media - What is it worth ?

The last panel of the day – Consumer Generated Media: What is it worth – just started. Moderated by Howard Kaushansky, the CEO of Umbria, it is an assembly of startup CEOs in the user generated content space (from right to left):

• Ron Bloom, Cofounder and CEO, PodShow
• Cynthia Francis, CEO, Reality Digital (parent company of ClipShack)
• Mary Hodder, Founder and CEO, Dabble
• Chris Klaus, Founder and CEO, Kaneva
• Mika Salmi, Founder and CEO, Atom Entertainment
• Steven Starr, Founder and CEO, Revver

The first question is whether user generated media is now mainstream, and which metric is used to establish the answer. Ron Bloom asserts that within 5 years over 50% of content consumed by end user will be user generated.

On value attributed to user generated content, Mary explains that the equation is not only how much money is mande directly from “content sales”, but revenue opportunities generated because of the content – as in the reputation, credibility and visibility. Therefore only a very small subset of user generated content producers will be able to make a living out of advertising, but a lot of people will get jobs, gigs, book contracts, etc. because of their blog/podcast/vlog. This is not a new argument by the way, since it was already discussed and agreed upon at BloggerCon3.

On cannibalization of mainstream media, Ron Bloom explains that podcasters actually become a new distribution and promotion channels for licensed content like music, and he points to increased sales of music CDs following podcasters playing them on their show. In that case, podcasters reported the fact that they played the music to rights holders but did not pay for it.

On direct monetization, Mary Hodder points to Revver’s model to share advertising revenue with content publishers, and expresses her surprise that to date none of the other large media sharing sites have implemented a similar approach. The issue however is that Revver needs to generate a ton of traffic in order to make that concept work for themselves - and their publishers. And today the YouTube approach of distributing unmoderated content is generating an 80X difference in streams being served (even though it is starting to backfire on YouTube).

Tags: OnHollywood

Viacom's on the move: picks up Xfire for $102M

Xfire, a company that has developed a rich community for online gamers, has just been acquired by Viacom for a $102M in cash. XFire had 4M registered members, 1M active users, and an ad-supported business model. Out of the press release:

The acquisition brings Viacom and its MTV Networks unit the premier community that connects online gamers. Xfire and its users fit squarely into the Company’s multiplatform strategy to build an engaging universe of music, gaming, entertainment, news, networking and interactivity for focused audiences. As part of MTV Networks, Xfire will be better able to maximize its advertising revenues through more aggressive marketing, greater global penetration and comprehensive integration with the Company’s other digital and cable properties that address the gaming demographic.

Launched in 2004, Xfire has four million registered members who use its software. Its one million active users average 91 hours per month, with an average session length of over three hours. The robust, ad-supported Xfire application supports hundreds of the latest PC games and provides social networking, instant messaging and information for online gamers. In addition, the Xfire application provides traffic to its popular website, featuring forums and gaming downloads.

Xfire had received between $10M and $20M (?) in funding from DFJ, NEA and Granite Global Venture (Series C of $5M in 2004, Series D of $5M in 2005) plus several million dollars in their Series A & B (which I could not find exact information about) when they were still called Ultimate Arena. Xfire was actually featured this month in the DFJ newsletter (scroll down).

This exit is providing useful data points for our team at Userplane (Disclaimer: one of the companies I am involved in), that now supports over 100,000 communities with its Flash-based IM and chat room service - including MySpace, Friendster and most brands in the online dating world. Already profitable, and without any VC funding, the company has found ways (i.e revenues) to grow organically into supporting millions of users. Esther Dyson recently met with CEO Mike Jones and has a nice write-up on her Flickr blog.

Tags: userplane, xfire