Jeff Clavier's Software Only

One of the 25 Most Influential People on the Web. Moi?

Well, I would certainly not have claimed it, but BusinessWeek has when putting together this list of usual, and not so usual, suspects that includes yours truly.

You see, what always troubles me having investors being “celebrated” is that our job is to help and support entrepreneurs, and make sure that the attention is focused on them, not us. Like I said when the list of 13 Web 2.0 Kingmakers was published, I feel that I have been extremely lucky to work with a number of really smart entrepreneurs, some (5) who sold their companies in early yet very profitable exits, a few (4) who failed, and a lot (close to 40) who are still working very hard at it at different stages of financing. But four years into investing in consumer Internet, they - collectively - and I still have everything to prove, especially in these most challenging times.

So thanks to BusinessWeek for the attention, and let's hope that in a few years I will have proven them right. It is obviously very nice to share the investor spot with peeps like Peter Thiel and Paul Graham. And many congratulations to my friends Loic "The Communicator", Ev "The Blogger", Matt "The Publisher", Joi "The Adviser", Kevin "The Poster Boy" and Gabe "The Traffic Driver" for this well deserved recognition.

While I am at it, many people have complained to me, over and again, that I had abandoned my blog. As I explained in this post a few months ago, I sort of have - in an extended sabbatical kind of way - but you can always find my rumblings of all kinds on Twitter.

Tags: evanwilliams, gaberivera, joiito, kevinrose, loiclemeur, mattmullenweg, jeffclavier

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 ;).

Turning to page 40

It took me a few minutes to start writing something after putting in this title “Turning to page 40”. I re-read the many emails, Facebook private and wall messages, skype IMs, SMSs, twitter messages and greeting e-cards I received over the past 24 hours. I am grateful for all of these, a big Thank You to you all. One of my journalist friends nailed it: “Just wanted to chime in and wish you a great year ... and decade, I suppose!”. A great decade is what I am wishing myself today, I guess for the first time. I only have a vague souvenir of my turning 20, I remember the 30 transition because of the great wines (and the headaches) we had, but for some reason I find that turning 40 is a bigger deal. Sort of not being old yet, but not being young any more. My good friend Reid Hoffman took the same turn a few weeks ago, and I'll have to confer with him on his thoughts on the matter (happy belated birthday to you Reid :-).

This new decade coincides with two other important milestones. One is personal: in 2 weeks, my beloved wife Bernadette and I will have been married for 15 years, and I have to send a big shout and much love to that beautiful, wonderful and wicked smart woman for having put up with me for such a long time. And for having supported my sort of unpredictable career moves - from being a CTO in France to becoming a VC in Silicon Valley 7 years ago, and then leaving the comforts of the “dark side” to launch SoftTech VC, kinda my own startup.

That is my second milestone: about 3 years ago (and a few months), I decided to start this firm and invest my time and our family's money into early stage startups, more precisely consumer internet startups located in Silicon Valley. Web 2.0 did not exist per se then, nor was it as obvious as today that there was a tremendous opportunity to help launch capital efficient consumer services that would leverage a more mature Internet, one that was widely available, and where monetization opportunities were real (at least in my mind). Three years, 25 deals and 5 successful M&A exits later (Truveo/AOL, Userplane/AOL, MyBlogLog/Yahoo, Kaboodle/Hearst, Maya's Mom/J&J's BabyCenter), I am still very bullish about the myriad of early stage investment opportunities that are in front of us. Yes, there are pockets of over-invested areas in the consumer space, and yes, some valuations got me to wonder wtf some investors were thinking (*), but that does not mean that we are entering Bubble 2.0. That's what I am betting in getting ready to make my next batch of 25 early stage investments in the next few years. And I hope that I will have the same sheer luck of meeting exceptional, smart and passionate entrepreneurs - some of which I decided to join and support, and others I wished best of luck to.

(*) I remember distinctly hearing these same discussions when KP & Sequoia invested in Google, and when Accel Partners invested in Facebook. So these valuations do make sense sometimes...

So thanks again to all for your kind wishes, and cheers to the new decade :-). I am off to a meeting with my lawyers now, writing some of the first paragraphs of... page 40.

Photo Credit: Jeremiah Owyang (congrats on the new gig Dude :-).

Tags: turning40

Twittering or not twittering, that is the question

Much has been written on, about and around Twitter – with a clear acceleration over the past… three weeks ? Essentially the traffic on the site, and the number of mentions in the blogosphere seem to be highly correlated – which is not surprising since a lot of the Twitterati are also highly visible bloggers.

I had not paid much attention to Twitter during my 6–months blogging break, but discovered it two weeks ago when hanging out with my friends Scott Beale and Robert Scoble – who have been twittering away for some time. I jokingly told Scott that I would never use “that” but I did twitter quite a bit at Ted 2007, and since then.

What works for me with Twitter is the fact that I can fire one comment, one thought, one message, in 30 to 60 seconds. And not bother with presenting, formatting or developing that idea – because, or I should say thanks, to the 140 characters limit. I have always had difficulty at writing posts of less than 200 to 500 words, and so that artificial constraint is actually interesting. Obviously, the editorial value of these 140–character messages tend to “vary greatly”, and I would expect only a small number of close friends and/or associates to be interested in that “stream of consciousness”.

What struck me, or at least surprised me, what the speed at which Twitter got its mention in the New York times, was called the blogging killer, had its first mashups, and created a passionate debate between fans and opponents. Talking about mashups, Twittervision is really way cool, and could easily be applied to photostreams.

So it is something new and important happening in front of us, or is it a fad that will burn out that much faster ?

I say who cares? If it is truly useful to some people (like Tara “Miss Rogue” Hunt), it will find its (killer) application amongst other publishing and collaboration tools. And in the meantime I have added my own Twitter badge on this blog.

Disclosure: I have no interest in Obvious Corp, the makers of Twitter.

Experimenting with a few services on this blog

I have always tested a number of tools and services on this blog, to the point of sometimes making the page load time untolerably long (apologies for that - obviously not intended). One of the areas of experimentation is advertising, and you might have noticed sponsored links, banners, both on the blog and on the feed. My motivation is not to make money that way (I would not go very far with the amounts generated), but to figure out how mainstream consumer advertising programs "work" on social media content. The last one - that replaced AdSense - is , Amazon's new advertising program called Omacaze Links. Initial results aren’t too convincing yet – but we’ll see how that automatic contextual matching combined with behavioral targeting performs. To date, I have received the best results from the FeedBurner advertising network inserting ads in my feeds.

I have also added a pretty cool community building feature called MyBlogLog. My friend Brad Feld has been using the service for a long time, and like him I enjoyed analytics that MBL provide daily about your “clicks-out”. Then MyBlogLog has added this automatic creation of reader communities, which I find interesting – any user of MyBlogLog accessing my blog more than a few times is automatically added to my reader community. And it just takes a few minutes to configure the tool and add a piece of JavaScript to your template to get this list of faces having most recently accessed the blog. Last weeek, Eric Marcoullier, MBL’s founding CEO (who has since left the reins of the company to Scott Rafer), has enabled a cool hack: the addition of pictures from readers leaving comments. This feature is very familiar to Flickr or any service that requires a login to leave a comment - but MBL can add this feature to blog running on TypePad or Wordpress. Sort of adding a personal touch to faceless blogging… Note that images are added once the page is fully loaded and therefore it can take a bit of time. Check out MBL's blog here.

And this is post #500. I know that some blogs get there in a few weeks but it took me a couple of years.

Trends in Venture Financing - 2Q06 Data

The 2Q06 compilation produced by Fenwick and West regarding vc financing trends in Silcon Valley has just been released, and it continues to show strength in activity and valuation. The most notable point, which needs to be confirmed in the next couple of quarters to really be meaningful, is that valuations have grown by a lower factor than in Q106 and Q405. Other data points listed in the report (statistics are provided by Dow Jones VentureOne):

• The Fenwick & West Venture Capital Barometer™ showed a 34% average price increase for Silicon Valley companies receiving venture capital in 2Q06 compared to such companies’ previous financing round. Although this was a significant increase, it was less of an increase than in the prior four quarters.
• The amount invested by venture capitalists in the U.S. in 2Q06 was approximately $6.7 billion, an increase over $6.4 billion in 2Q05 and $6.2 billion in 1Q06. The combined total of $12.9 billion for the first half of 2006 puts the
• The industry on pace for its largest investing year since 2001. We seem to be on track for a $25B to $28B total invested capital this year. Acquisitions of venture backed companies in the U.S. in 2Q06 was approximately $7.1 billion in 92 transactions. This was a decline from $8.5 billion/97 transactions and $8.4 billion/103 transactions in 2Q05 and 1Q06, respectively, although the combined total of $15.5 billion/195 transactions for the first half of 2006 puts the industry on pace for its best acquisitions year since 2000.
• There were 16 IPOs of venture backed companies in the U.S. in 2Q06, of which 10 were health care companies. These IPOs raised $1.3 billion. This was an improvement over 13 IPOs raising $.6 billion in 1Q06 and the combined total of 29 IPOs raising $1.9 billion in the first half of 2006 puts the industry on pace to have its best IPO year since 2000, other than 2004 when 67 IPOs raised $5 billion.
• Just to add an additional perspective, VC funds have raised close to $12B in 2Q06 (and about $18B since the beginning of year), according to the Merc. Two funds (Oak and NEA) have raised about $2.5B each, which tends to skew the numbers, but still, it is a lot of capital to deploy in a market that sees companies building much more efficiently.

These statistics cover a large spectrum of deals, from seed to very late stage. What I can say on the early stage is that 1) there is a lot of activity - both in terms of startups looking for financing, and 2) financing rounds actually closing. I will try and dig more quantitative info for that sector (any pointer would be appreciated).

FOX going for Google in multi-year search deal

I just spotted on TechCrunch that Fox Interactive Media has chosen Google to power Internet search on MySpace and its other Internet properties. Per the official press release:

The agreement calls for Google to power web, vertical and site specific search for MySpace.com and the majority of Fox Interactive Media properties. Google will be the exclusive provider of text-based advertising and keyword targeted ads through its AdSense program, for inventory on Fox Interactive Media’s network. Google will also have a right of first refusal on display advertising sold through third parties on Fox Interactive Media’s network.

Whilst interesting details of the deal, such as the revenue share percentage, have not been disclosed - there is a 3+ year commitment for Google to contribute an aggregate revenue share of $900M. This deal is obviously significant as it is one of the last major US search deals that was not yet Google's. It seems to be a logical choice as Google is known to offer the best overall yield and MySpace's traffic is so large - not even mentionning other large properties like FoxSports, IGN or FoxNews that are already monetized - that Google's inventory will definitely be put to work here. The $900M figure, while “non trivial”, strikes me as low - relatively speaking. $900M over three plus years implies less than $25M a month in direct revenue to Fox. Views on that anyone ?

A derivative of this deal is that  MySpace and Google could develop, and deploy, social search at real scale if ever they felt this was an interesting experiment/trend.

Rafat provides a summary of key facts mentioned during the analysts conference call:

• Video not part of this deal, but we will have talks with Google on future opportunities.
• FoxSports.com is NOT part of the deal, due to its existing deal with Microsoft/MSN.
• This is a standard Google ad-revenue sharing deal where the majority of the revenues comes to the content holder.
• We have been planning on releasing a MySpace toolbar and we will think of integrating it with Google.
• It is an all cash deal.
• We are about to launch IGN properties in UK.
• We are about to cross 100 million people profile on MySpace.
• The deal covers every territory except two countries (not disclosing these two countries).
• We had conversations with Google competitors.
• On the remnant inventory– with which we work with 17 providers–Google will have the first right of refusal for this inventory.
• We find that the largest amount of people leave MySpace to Google…that was the most attractive part in the decision leading to the deal.
• We had been using Yahoo in some parts, and our own technology in others.
• Ross Levinsohn: I am not concerned about the relationship between AOL and Google.
• Early on we were looking fairly closely at video search, and the text search only became more important over late.

Tags: google, myspace

Software Only is two years old

What a bizarre way of celebrating the two-year anniversary of this blog: my last post was eleven days ago, and I have not found the time since then to blog or comment on anything – I have been heads down on a couple of projects that I can’t talk about, met a few very interesting stealth companies and have held a number of private meetings. Not much material to blog unfortunately .

Anyway, looking back at the past two years, I have published close to 500 posts, had an average of 2 comments per posts, one trackback and interestingly – for each comment I get, I receive 2 or 3 private emails. It is not surprising since many of the things my readers discuss with me are the confidential kind. Ever since my FeedBurner feed sees all subscribers, the number of subscription has raised to more than 14,000, with Rojo being the most popular RSS reader for my feed – a very unusual case.

I decided a long time ago not to blog about my blogging, but I went through multiple phases, on both the read and the write side:

• Three to four years ago (when I was still a General Partner at a venture firm), I started following a few blogs as bookmarks I would visit every now and then, and then as RSS subscriptions (in Newzcrawler initially). It took me some time to comment.
• The first three months of the blog, following that initial post, were essentially an experiment: finding my style, themes, rhythm, length of posts, etc. What became clear after a while is that what seemed to “work” for my audience was a mix of financing tips and news, comments on the consumer Internet market – both trends, companies and M&As, and every now and then a bit of rants and thoughts. Also very popular are the reports of the numerous events and conferences I have been attending over the past couple of years.
• January 2005 is when I decided to seriously invest in blogging, both reading and writing. This coincided with the decision I made to focus the activities of my firm on investing and helping build early stage consumer Internet services. One of the key drivers of success of any investment firm is the depth, and of course quality, of its deal flow. This blog has been fantastic in that regard, enabling tens if not hundreds of interesting online and offline discussions – a handful leading to some of my 15 startup investments, or involvements, in the past couple of years.
• In 2005 and early 2006, I spent an average of two to three hours a day reading 200 to 300 feeds, commenting, and posting 5 to 7 times a week. I was hooked on Memeorandum (now TechMeme), and really tracked what happened through the blogs. During that phase, I would almost make a point to scan through all my feeds multiple times a day, going through all unread posts as much I could. And I would have difficulties to write short posts – less than 200 to 300 words.
• Then a couple of months ago, around April/May, I decided to be much more selective on my feed reading, switched aggregators to support that, and started spending less than one hour per day reading blogs – using TechMeme and Wikio (I am an investor) to track developing news and conversations, and switched from MyYahoo to Netvibes (I am an advisor) after 7 years to track the blogs that matter to me. At the eBay developer conference, Anil Dash – who had impromptuously joined  our panel – made the comment that he had almost quit reading feeds because “he did not want to spend all this time unbolding headlines”. And I realized I was getting to the same position, as a result of having way too much to read and way too little time.

What’s next for Software Only, and its French little sibling – Sans Accent ? A few more posts before hitting a well deserved break during which I will most likely go quiet. And when I return, more of the same content, with maybe less posts written at 4am . I also hope to overcome that tendency of mine of not posting short summaries or comments when I only have a few minutes – because I never ever have time to come back to these ideas and express them more fully. Sort of a “Blogge Diem” notion.

And of course, I am – as always – interested in your feedback on what works on this blog, what doesn’t, and what else you would like to hear about.

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

The Seattle Museum of Flight is amazing

 
The SR-71 BlackBird
Originally uploaded by jeffclavier.

One of the treats of Gnomedex 6 was a visit and a cocktail party organized at the Seattle Museum of Flight. The huge exhinbit features a stunning display of airplanes from different periods - including one of the Concorde previously flown by British Airways and an old Air Force One. My favorite, and the subject of this picture: the Lockheed SR-71 "Blackbird". You can see more pictures in this set, or better in the set shot by the amazing Scott Beale.

If you are visiting Seattle (or Redmond :-), and have a few hours to spare, do visit it - it is really worth it.