Venture Explorer

Like.com Raises $32M Series C

TechCrunch reports on portfolio company Like.com's recent funding.

Munjal's timing was exquisite and the company is now very well-positioned to not just survive, but thrive, in a tough climate.

A Must-Read Blog for Entrepreneurs

My friend Eric Ries, co-founder/CTO of IMVU, has a great blog that's a must-read for entrepreneurs: here's the feedburner link: http://feeds.feedburner.com/startup/lessons/learned

Subscribe now!  This will save you time, money, headaches and ulcers ...

Those Who Live by the Sword ...

Cuil, a much-hyped search engine, launched yesterday.  The blogosphere, after eager anticipation, has not been kind to Cuil.  Web 2.0 is all about throwing things out there and seeing what works, but if you're going to drum up hype, you have to feed the hype monster tasty morsels.  The reaction from bloggers and commenters seems all the more vitriolic for having been promised foie gras and fobbed off with crackers instead.

At the risk of seeming to jump on the bandwagon of Cuil-bashers, I must confess that Cuil didn't do a great job finding me on the web either: the search results for "Vineet Buch" seemed of tertiary interest and didn't discover my professional page (that I am a Partner at BlueRun Ventures), or my LinkedIn or Facebook profiles. 

Is Google's Dominance of Search Self-perpetuating?

Mashable's Stan Schroeder expounds an interesting theory: that Google's current (and expanding) dominance in web search, at least in the English-speaking world, has trained websites to do all they can to show up high on Google - to such an extent that no upstart search engine can hope to do better than Google for broad horizontal search.

Stan's review of recently launched, well-funded search startup Cuil, as also the TechCrunch review, are lukewarm at best and support Stan's thesis - but this thesis assumes that Google has the best possible knowledge of a user's intentions, and since websites will compete to match Google's algorithm that expresses that intention in a query, Google is by default the winner in any search competition. 

The flaw in this argument is that Google has very little information about a user's intention - indeed, Google doesn't even seem to use all the information it could have about the user, because of privacy and latency considerations (for instance, I doubt if Google looks up my interests in my Facebook profile when I search as a logged-in Google user, to discover that by typing the search term "kayak" I probably mean a watercraft and not a travel search engine).  Google is constantly refining its approaches to divining intention, of course ... and the masses of data generated by user searches help it get better every day. 

But web search is far from perfect today, and it stands to reason that Google's own momentum - and success - will lock it into the innovator's dilemma of doing little more than tweaking its existing algorithms.  And some enterprising startup will bring a refreshing new take to searching the web.  Wonder what it could be?

Is the Online Display Ad Market Being Overhyped?

Back in April, I'd written about the really slow movement of brand ad dollars online.  Advertising Age just ran an article diving into some of the points I'd raised, and they're worth exploring again.  There are a few choice quotes from Ad Age that I felt compelled to mention here:

The inconvenient truth is that for all its new-media spin, display advertising is "old" media -- a commercial message to be placed next to editorial or entertainment content.

part of why large companies such as P&G spend so little on the web is because of the feedback they get from the marketing-mix models they still use to determine media outlays: TV and other old media still work. (P&G increased its magazine budget by 7% last year.)

For all its glory, the internet still has not proven itself capable of being a primary branding medium. Most ads online are response-based and work best for brand marketers when they complement a branding campaign in other media.

"The biggest gating factor to internet ad growth is the obsession of the players, the [venture capitalists] and the press with 'bottom of the funnel' marketing in a world where the big money is spent at the top," said Rob Norman, CEO of Group M Interaction. [OUCH!]

Marten Mickos of MySQL on building Open Source Software businesses

I had the privilege of attending an informal presentation by Marten Mickos, CEO of MySQL, last week at SAP Labs.  Marten was his usual candid self, and spoke frankly about the challenges of making money in Open Source, why MySQL sold to Sun and the ups and downs after the acquisition closed.  Key takeaways:

• Open Source really is a smarter way to create software; somewhat because of community code contribution, but even more because the omnipresent threat of public scrutiny makes everybody produce better software
• By trying to buy Yahoo, which is built mostly on Open Source tools, even Microsoft has indirectly affirmed the value and longevity of Open Source.  Nokia's acquisition of Symbian and subsequent open-sourcing of its software, and Oracle's acquisition of InnoDB and BerkeleyDB are other affirmations.
• You can't build Open Source businesses on services and support alone; the love and passion of your users is great, but open checkbooks are even better.
• Nothing sells itself. Not Coke, not Pepsi, and certainly not software, Open Source or proprietary.  Most Open Source companies underestimate the need for a sales-force that can generate lucrative leads and close meaningful deals, and that's why so few Open Source companies make money
• Sun buying MySQL made MySQL much more appealing to big enterprises - they appreciate the backing and commitment of a large player.  This is reflected in the warmer reception MySQL's sales team gets at large accounts
• MySQL sold to Sun instead of going public for a couple of reasons, but the most important one, apart from the immediate financial return, was the great cultural fit with a company whose tagline is "The Network is the Computer" - ideal for MySQL, which has long billed itself as the database for the Web
• As the software industry matures and buyers get more power vis-a-vis vendors, software providers will have to cooperate more in a bid to provide workable solutions rather than shelfware.  Sun is already doing this in its relationships with Oracle, IBM, HP ...

Fred Wilson on how he made it as a VC

Fred Wilson of Union Square Ventures just wrote a very informative and articulate post on how he made it as a VC.  Here's what Fred thinks you should do (as opposed to what he did):

The way you do that is you work for at least ten years in the industry, getting operating experience, building a killer rolodex, and learning how the business works from the inside. Then in your mid to late 30s, you can make the move to the venture capital business, as a partner, not as a wet behind the ears associate who doesn't know anything other than how to push numbers around a spreadsheet.

A number of VC firms do, in fact, hire precisely based on this profile.  If you're not prepared to take such a circuitous path, here's a post I wrote a while back on finding a job in venture capital.

Judging at Under The Radar Social Media and Entertainment Summit

I'll be a judge at the Games track at the Under The Radar Social Media and Entertainment Summit June 3rd in Mountain View.  Good mix of companies and I'm looking forward to it!

The Landscape of Cloud Computing

It's pretty well known that Amazon Web Services' EC2 and S3 initiatives have taken off and are gaining users not just in startup land but in Corporate America as well. Amazon provides a compute and storage cloud, and the rush of companies big (e.g., Google) and small (e.g., Nirvanix) beginning to compete with Amazon in providing clouds has spawned a term and a movement - Cloud Computing. 

I've been involved with precursors to cloud computing (Utility Computing, Grid Computing, Application Service Providers - ASPs) from my days at Corio, an early ASP acquired by IBM in 2005. In fact, back in graduate school at Cornell, I did research on assembling commodity hardware into compute grids.  Small wonder, then, that Cloud Computing is an area I'm looking at quite actively for potential investments.

Peter Laird has a great blog post that defines the landscape of Cloud Computing; I encourage anybody interested in the space to read Peter's post.  And Peter's cheat-sheet on the players is invaluable if you want to appear well-informed :-)

Discounted admission to UTR Social Media and Entertainment

Dealmaker Media is offering readers $100 off the Under the Radar Social Media and Entertainment event on June 3rd in Mountain View, CA.  Click here or on the image below to register with the discount.

Here's the conference description (I'm a judge, btw):

Under the Radar: Social Media and Entertainment
June 3, 2008 | 8:00am – 6:00pm
Microsoft Campus |

Mountain View

,

CA

If you can't beat 'em, buy 'em. No longer is big media trying to compete with the content companies that were stealing the show - instead, they're offering them a premium channel. From YouTube to Bebo and MySpace to Club Penguin, every media mogul, Hollywood tycoon and Silicon Valley innovator wants a piece of this pie.  But even Toto knows we're not in

Kansas

anymore - technology has changed, business models and ad metrics are being reinvented, and the pressure to turn millions of eyeballs into billions of cash is on. Blink once and they just might get side-swiped by a startup with a better product, a smarter model and, even worse, nothing to lose.

Under the Radar will uncover 32 startups in the entertainment and social media space that have launched within the year. Covering social networks, advertising, casual gaming, virtual worlds, measurement tools, video, commerce, publishing and more, Under the Radar is the only forum that empowers its audience to discover tomorrow’s leading tech companies. 

PRESENTERS:

33Across - Identifies influential online users
Animoto - Create personalized, professional-quality videos from images and music, offering a new alternative to traditional online photo slideshows
AudioMicro - Stock music and sound effects licensing platform
Aviary -Suite of web-based applications for people who create and a marketplace to sell that content
Dizzywood - A virtual world that allows kids to dress up 3D avatars, play games, explore worlds and meet new friends in a safe environment
Comedy.com - aggregated comedy entertainment site
CrowdSPRING - crowdsourcing of creative talent.
ffwd - Organized, multi-platform, video content delivered via a browser, with social network awareness, and predictive recommendations.
Jygy - mobile social networking
GumGum - A licensing and distribution platform for online content
Hollywood Interactive Group - A mass casual mmo based on reality TV concepts and

Hollywood

stardom.
Jacked - Browser-based “second screen” for TV viewers, which provides synchronized content and a real-time interactive experience that complements what they’re watching on TV
Keibi - moderation and classification of user generated content (UGC)
Kosmix - Categorization engine that crawls billions of Web pages in a unique manner to create algo-generated home pages
Loomia - Social recommendations bridging established social networking sites with media websites
Mochi Media - Provides independent game developers with analytics, distribution, tools and monetization while providing advertisers with turnkey opportunities to reach the one in three Internet users who play online games.
MovieSet - Platform that brings behind-the-scenes filmmaking online, giving fans authentic access through its proprietary toolkit for Producers.
Mytopia -Social gaming community for Web,

Mobile

, Smartphone and TV
Overlay.tv - video commerce platform that overlays contextual information directly onto online video content
PlayCafe - Online game show network
PutPlace - Media storage all the way from

Ireland

Sometrics - Social Analytics and Social Ad Platform
uiActive - Take all your contacts from your social networks with you — on your phone!

CONFIRMED JUDGES:
Kara Swisher, Co-Executive Editor, Wall Street Journal/All things D
Charlene Li, Senior Analst, Forrester Research
Dave McClure, Startup Advisor & Angel Investor, 500 Hats
Lewis Henderson, SVP, William Morris Agency
Amin Zoufonoun, Corporate Development, Google
Scott Sangster, Director of Strategic Planning and Development, Walt Disney Internet Group

Jason Oberfest, VP of Business Development, MySpace
Rob Hayes, Partner, First Round Capital
Robert Scoble, Editor, Scobleizer

Chad

Kinzelberg, Partner, Scale Venture Partners
Rick Bolander, Partner, Gabriel Venture Partners
Vineet Buch, Partner, BlueRun Venures

 

MODERATORS:
Ellen McGirt, Senior Writer, Fast Company
Rafe Needleman, Editor, CNET/Webware
Jeremy Toeman, Marketing Consultant, Stage Two Consulting