Zach Coelius

I hope everyone had a nice holiday weekend.  I took advantage of the fact that the rest of the world had no interest in talking to me and did some much needed reading.  Great stuff. Now its back to being busy as can be.  Triggit continues move along at a rate that really surprises me.  Gotta love it when the obstacles seem to keep falling away.  Great stuff.  I am still not sure who you are that read this thing but it seems that either one person has been reading my ramblings over and over again or I actually have a readership.  I am surprised to say the least.  Feel free to drop me an email or a comment if you have any suggestions or comments.  As I am sure is very clear I am still learning how write this thing, not to mention simply learning how to write altogether.  Any help or ideas is always wonderful.

The Guardian has an article that tells us that the Royal Society (a club of old academics) in England is worried about publishing research online.  Quote "Why would you pay to subscribe to a journal if the papers appear free of charge?".   You can find the whole article here.  I pray this is an example of a reporter trying to make dumb people look even dumber.  Otherwise I feel that there is no help for the old people.  I guess they might end up just watching helplessly as we get rid of all their anachronisms.

The NYTs has an article about companies advertising on blogs.  Amazing investigative journalism.  What took them so long to figure this stuff out?  What they don’t realize is that the "story" in their story is how amazingly cheap this advertising is even on mainstream blogs.  They claim budget paid 20k for 20 million impression and 60,000 clicks that drove half of the traffic for their site.  That is a buck a cpm and .33 cents a cpc (yahoo, msn and aol can charge up to $30 a cpm)

I know I am not the first to say this but let me join the bandwagon.  We are seeing the beginning of disintermediation of the businessmen who have controlled media since advent of publishing.  The means of production they have guarded so jealously have been wrenched from their hands and given to the masses.  Writers and the producers of every other form of content can now reach an audience without having to ask permission.  This is a big deal.  The question is what effect this sea change in media is going to have on all the other industries which have operated symbiotically with commercial media production and marketing.   Media is not going to change while advertising, public relations, and marketing remain the same.

I was running into issues getting my feed to work.  Argg.  So I just started over.  You will need to resubscribe.  Sorry about the problems.

I hope everyone had a nice turkey day.  Nothing like a good feast. 

Fred, has a post today about how the new context in the internet business is also changing the way we start businesses.  I am sure you’ve noticed that I reply a lot to what Fred writes. It is because I think he is one of the VCs most in tune with what entrepreneurs think (and he has a good blog, smart move).  A lot of VCs are pure finance guys.  They know the numbers inside out but don’t spend a ton of time thinking about the ideas.  It’s the ideas that make being in my business fun and a challenge.  Without a great understanding of the business context your sunk.  We have to think hard, learn a ton, and work our asses off.  Sounds like heaven to me. 

I have been thinking about this for a while and here is my response. 

Fred. You should add that the low costs of starting a company means that a guy like me can come up with an idea and get it to a reasonable velocity before I need to recruit other people to join full time. It used to be that starting a company with a new idea cost so much that you needed a team of people working full time to marshal all the resources to get it off the ground. With my company I was able to get things rolling fast enough that now it is much easier to recruit good people whose skills I was not able to find in my immediate network. That means that rather then having to bring in other people early when the fit of their skills to the eventual company is a guess, I can now bring in better people who skills are a better fit. It is still all about the team, but now we can make a better team.

I think your absolutely right. A lot of people are missing that the changes in the context mean changes not only for what kind of companies are formed but also how we form them. You and your brethren in the VC world are going to have to adapt as fast as we are on the other side. 

Anyway I am starting to feel guilty that I am spending time on this that I could be spending growing my business.  Ah the trials and tribulations of being ones own boss.   Maybe I’ll post more on this latter.

David Beisel has an interesting post where he talks about the new liquidization paradigm that seems to be developing where the big companies are buying companies much earlier in their growth stages then before.  Paul Graham talks about this in one of his essays and pointed out that buying companies before the VCs scale them is a smart move. Can’t remember which one. (Update) Found it here.  David quotes Paul Kedrosky who claims that this type of buying is just like what the VCs are doing.  I think Paul is wrong.  These companies can make these buys for strategic reasons and integrate the tech or people into their companies and solve weaknesses for both sides.  As a result they are very different then a VC.  One, they can pay more.  Strategic buyouts have a very different valuation structure then simple expected growth investments.   Two, they have more resources to solve problems with acquired companies (yes VCs can do some things but compared to a Google that is able to wield total control it is a very different equation).   And lastly their knowledge of their industry is much more evolved then most VCs.  VCs good and bad are speculators.  They think if they put in X they will get 10X eventually.   Thats speculation.  Companies buy companies to solve problems, open new avenues for business or to get smart people.  Its a very different equation.

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Paul Graham has a great essay here on what web 2.0 is and is not.  He has been churning out these really good essays for a while and they are all worth a read (though I admit I have not read all of them, there is a lot there).   His essay on how to start a startup here is really quite good even if he makes the mistake of assuming that only geeks can start a company around technology (much makes a company besides tech is my opinion).  In fact I think I may spend part of the afternoon on reading some more of these. 

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I have switched to feedburner. Sorry for not alerting you first.  Mea culpa.  Hope it woks for everyone.  Let me know if there are any problems.

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Take a look at what John has to say on the NYT op-ed page.  I just found it (my last post sure fits).  I think John is right and wrong.  This is not a “bubble” like it was last time. No doubt.  But “bubbles”-that is self-reinforcing excitement among a group of people that cause them to do things they would not normally- are a naturally occurring phenomenon whenever there are lots of people doing the same thing.  It is the nature of the beast.  And whether John wants to admit it or not, there is certainly a self-reinforcing excitement out here.  That excitement is causing lots of people to try and start companies who would not normally take the risk.  And as a result of the new eco-system that John and many others have pointed out, there are going to be some amazing successes.  And as soon as the investors start noticing all the good stuff we are doing they will get excited as well.    That is going to result in a “bubble”.  Or what it really ought to be called is the normal cyclical nature of business.  We are on the way up again.  So John’s right about the particulars and wrong about what it all means.

The coffee shops out here are full of people typing away on laptops and having meetings.  No one has an office.  Everyone has an idea.  The tide has turned and the entrepreneurs here feel it in their bones.  None of us knows how long this will last.  All we know is that things are getting good.  The techcrunch party tonight has over a hundred people signed up to attend and reg closed a week ago.  I do believe the good times are back.