Let’s Talk About Revolutions (in media)

Image by Pop!Tech via Flickr

I reread this morning Clay Shirky’s great SXSW piece about the media business and i wanted to share some of his thoughts here.  Let me go through the end of the article a bit.  He starts:

Elizabeth Eisenstein’s magisterial treatment of Gutenberg’s invention, The Printing Press as an Agent of Change, opens with a recounting of her research into the early history of the printing press. She was able to find many descriptions of life in the early 1400s, the era before movable type. Literacy was limited, the Catholic Church was the pan-European political force, Mass was in Latin, and the average book was the Bible. She was also able to find endless descriptions of life in the late 1500s, after Gutenberg’s invention had started to spread. Literacy was on the rise, as were books written in contemporary languages, Copernicus had published his epochal work on astronomy, and Martin Luther’s use of the press to reform the Church was upending both religious and political stability.

I want to draw the obvious parallel to today’s revolution in publishing and in technology. I belive that just having email and IM has increased the literacy in America (maybe the world).  Not 15 years ago no kids were daily expressing themselves in written words, now they do all the time.  In 1996, i would frequently get emails in ALL CAPS and poorly written.  Now it’s a must-have skill.  But let’s continue with the speech….

What Eisenstein focused on, though, was how many historians ignored the transition from one era to the other. To describe the world before or after the spread of print was child’s play; those dates were safely distanced from upheaval. But what was happening in 1500? The hard question Eisenstein’s book asks is “How did we get from the world before the printing press to the world after it? What was the revolution itself like?”

Chaotic, as it turns out. The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

I find this same thing is happening with columnist and journalism.  Poor articles just get overlooked or debunked in comments.  The threshhold for well researched facts is higher as the audience is double-checking you every step of the way.  What happened with Aristotle is happenign today with every sports, politcal, and news writer in the world.

During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

Sound familiar to anyone? Can you say BLOG or TWITTER – such a simple concept.  Take publishing an article on a web page and shrink it to a blog or 140 characters.  What seems like a minor change has some profound responses.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.

Old stuff is indeed getting broken. Newspapers are gone or going fast.  Magazines are next.  Paper is being replaced by netbooks, iPhones and Kindles.  These devices are embracing different technologies and shorter-form content.  This is the real revolution that’s happening in front our face.  That Time Magazine you have in your mailbox will be a story you tell your grandkids about, “hey kids, get this, i used to walk to the mailbox and pick up a ‘magazine’ that had stories in it written down, printed once a week and sent to me.” and they will look at you the same way i look at my grandparents when they talk about a world with radio programs only and no TV.   Our new world has more content, better content, that is more easily shared and discussed – and it’s a beautiful thing.

Related articles by Zemanta

• This Is Our Media Revolution. Who Will Be Our Manutius? What Our Octavo? (snarkmarket.com)
• Gutenberg was a blogger (trishussey.com)
• The printing press as an agent of change (randomthougts101.blogspot.com)

Ze Frank Video

Last night i watched this video of Ze Frank (below).  He’s a kooky guy but totally entertaining. I do like that he takes common elements of the internet and uses them to better connect people and to create social happenings and actual events and items.   Instead of people trying to create products and platforms, he’s actually trying to create content in innovative ways – which i find both interesting and refreshing.  I think some of the things he posted in here were just awesome.

First, he found this song on the internet that a dad was singing for his daughter called “I’m going to whoop somebody’s ass”.  He took the song asked his fans to sign along and interact. The fans did that and more.  This song spawned countless numbers of remixes. A video was created. A video was story boarded by a member of the “audience”, then another member offered portrait sketches to anyone who would help fill in the video. The video was made.  The remix appeared in a movie, in a car commercial and countless other places and suddenly the creator – a unsuspecting PhD-turned-preacher nammed Ray, now finds the trajectory of his life shifted, as he is inundated with countless versions of his song, in audio and even video format.  Awesome.  (below is a video remix of Ray’s song)

Ze does a lot with songs.  Another intance, he created a song for a woman who wrote in that she was scared of the dark and he made up a song for her.  You can hear that song by clicking on the image below

Another fun thing that he did was called “youngme / nowme” where people take picturs of themselves when they were young and recreate those pictures now.  It’s hilarious to see what people have done.  Some are simple, some are very involved.  In both cases, they are fun to look at.  He’s got a whole site with the submissions here 2gfdyuszhp

There are lots of examples of cool things Ze has done in his talk.  These are just a few.  I always enjoy his creativity and if you have some time, it’s worth checking out.

Newspapers & Craigslist

As everyone talks about the death of newspapers, i’d like to remark on one of the majors elements in this death spiral: Craigslist.  To me the two major killers of the newspaper are:

1. Decrease of authority & differentiation
2. Lack of classified revenue

First, the decrease in authority and differentiation.  Every web site and publication needs to be an authority on something, anything.  Newspapers in the past were authorities for:

• local news
• international news
• sports
• entertainment

Over the past 8 years, they have no become the authority for only one of those: local news.  International news is dominated by CNN, Reuters and others who focus explicitly on that area.  Similarly, sports is dominated by ESPN and Fox News and Entertainment has a variety of outlets that provide much more in depth coverage and reviews than newspapers ever did.    This decrease in authority minimizes the importance of newspapers to readers.  For most categories listed above, it’s a nice piece of reading material to have but by no means necessary.

The second piece is Craigslist.  In 2000, newspapers pulled in $20 billion in revenue from classifieds. That went to $10 billion in 2008.  So, in 8 years revenues for newspapers got chopped in half (stats here).  Where did this money go, most of those services are now free on Craigslist.   Craigslist took $10 billion out of the industry and pocketed about $100 million of it.  To be exact, Craigslist is pulled in $80 million as of April ‘08 (stats).  Who knows what that will be for 2009 but prob at or around $100k.  With a  staff of 28 people so that’s pretty damn good.

Imagine that, a staff of 28 people is decimating an entire industry.  That is the true power of the internet.

Related articles:

• Rupert Murdoch on the future of newspapers (vator.tv)
• Newspaper ad revenue plummets! (ceoworld.biz)

Fred Wilson’s Take on Twitter

There’s a good video by Fred Wilson about Twitter and what he, as an investor in it, thinks about it.  What he boils it down to is three points:

1. “the single most important is that twitter from day 1 is a platform that others can build upon”
2. “it is very one-dimensional…it doesn’t do anything that is not in the timeline….It’s power comes from that – it’s straightforward”
3. “Twitter is the news feed for the web” as people embed links in their tweets and it’s now an alerting system

What else is interesting is that Twitter wasn’t pitched to Fred but rather he was an early user of it and he pitched to them to try to get them to take money from Union Square Ventures.  This is why i think Fred is one of the best VC’s in the business because he uses the products.  The web is all about product.  It’s not like the industrial revolution, it is a consumer facing which means that the usability is extremely important.  He is an early adopter and gets into the weeds. I have a hard time imagining other VC’s using Twitter when it was still a part of Odeo.

I Don’t Agree with the Hog Pile on Facebook

There’s a growing trend in the media to attack facebook.  It started when their redesign got pretty bad reviews, continued when their CFO left, and now is gaining steam as mainstream outlets are questioning it’s core business proposition. There are three different things here and the media is pointing to them as an indication of Facebook’s failure.  I disagree.  Here’s why:

Product enhancements. One thing i’ve admired about Facebook is their ability to keep pushing their product forward.  They introduced a great photo experience before any of their competitors (and have grown to be #1 on the web).  Even as they were experience phenomenal growth (they hit 8 million student readers), they completely redid their home page when they introduced the News Feed.  While initially hated by their users (FB blog) and the media (Time article), it set the standard for how social networks should display user activity and is now seen as a stroke of genius.  And growth climbed even higher.  At 70 million users they then completely redid the profile page to be a feed-based page as this is the best way for users to continuously portray themselves (see Tumblr for an example).  This was hated at first too.  Now, they redone the Facebook Home page to better showcase conversations and user activity.  Is it like Twitter? Yes.  Is it hated by their users? Yes. But it is also an improvement.  More than any other company i know of, Facebook is constantly pushing to get better in all areas and doing it fearlessly.  Even if they misstep, I applaud them for it.  From my experience at AOL i’ve seen that when yoy have a large user base it’s very easy to become tentative and second-guess every move.  Not changing becomes the easiest path.  It also means you start dying.   This latest change is more an indication that they’re not dying but moving forward.

Valuation.  Facebook got an absurd $15 billion valuation from Microsoft when it sold them some equity.  That deal was more than just equity sales but it also solidified Microsoft’s relationship with them as their exclusive third-party ad provider (story).  That valuation has become a problem as every new raise that happens in the industry (Twitter,  FriendFeed) is evaluated against it.  Facebook is now raising at a more reasonable level at a $5 billion valuation.  I don’t think this is an indication of failure of FB but rather a reflection (a) that these raises are straight equity and not part of an ad sales agreement, and (b) the market is the worst it’s ever been.  I think it’s ridiculous to think that the environment is the same as it was in October 2007.

Business Model. The media talks about Facebook’s failure to make an ad business out of their inventory.   Time’s article this past week was called, “Facebook Takes a Dive: Why Social Networks Are Bad Businesses.” This is completely ridiculous.  First of all, MySpace is making money.  Let me repeat.  MySpace is making money.  They were bought by Fox for $580 million and they then immediately did a deal with Google to sell ads on their search page from 2006 to 2010 for $900 million dollars (details here).  That’s a quick profit of $320 million.  Everything else on top of that year-in and year-out seems to be gravy.  The article in Time continues to say:

What is true is that social network sites have had trouble making money. MySpace was supposed to be a big part of the revenue growth at News Corp. Wall St. thought Murdoch was a genius to buy it. Last year, News Corp had to admit that MySpace would not hit its revenue targets. That is usually not the hallmark of a property that is going to take over the Internet.  Analysts believe that MySpace rival Facebook had revenue of $265 million last year. That is astonishingly low for a company that had 57 million unique visitors in the U.S. last month. And, Facebook also has a very large international user base.

So let me get this straight, even though MySpace is profitable at $500-800 million dollars a year in revenues and even though it’s generated hundreds of millions of dollars for News Corp it’s a bad business becuase they missed their revenue target last year?  That is completely ridiculous.  Facebook is a differnt issue.  They have repeatedly said that they are deprioritizing ad revenue and instead focusing on growth and user engagement.  Since they started saying this (starting in late 2007), they have grown from 50 to 200 million users.  I’d say that’s pretty good execution.  Facebook makes about $275 million a year.  Could they make another 100-200 million if they started selling more ads on search pages and profile pages?  Absolutely.

All of these reasons above are why sensationalist articles discussing the demise of the social network drive me nuts.   Nobody knows what the future holds, but one thing that we can pretty much be sure of is that sites that have great user engagement and activity – and facebook has over 20 million users update their status at least once a day – will get the ad dollars.  Nick O’Neil has a good post on AllFacebook today on why he’s willing to pay a $34 CPM on facebook.  It’s not the silver bullet but it shows that there is a profitable end in sight for the company and it’s not necessarily the horrible business the media would like it to be.

Go narrow and do 1 thing well

Image via CrunchBase

I did an interview last night for USC business school where i was asked a lot of questions about Qloud and its beginnings.  Questions like “What advice would you give to aspiring entrepreneurs? What have you learned?”  Well here goes…

i often hear people talk about “doing something big.”  While I admire their desire to change the world, i find it interesting that quite often the companies that do end up changing the world started as small passion projects/startups.  And the business model they find is usually nowhere in sight at the beginning.  Some examples:

• Facebook started as a Harvard-specific tool to get people to better interact with each other.  After it worked well for Harvard, it expanded to the Ivy’s (and Duke & Stanford), then slowly to other schools and eventually everyone.  That wasn’t it’s original goal.  They just wanted to make it easy for people to hook up – i mean, connect
• Craigslist started as an email list to share functions, jobs and stuff in San Francisco.  They sat in an office and got emailed tips as to what was going on.  They then added some comments and emailed it out and eventually just posted it to a web site.
• The Google guys were in grad school and staring at some big servers they had.  One idea they wanted to try was to index the entire web.  Once they did that, they then had to brainstorm as to what they could do.  They never started with the desire to dominate web advertising.  Larry Page Speech

This thought of doing something you believe in and are passionate about regardless of the size really hit home for me when i heard Kathy Sierra’s keynote at SXSW this year. She had 16 points on how to make breakthroughs happen.  Point #15 was Don’t mistake narrow for shallow. She pointed at hyper-focused blogs like Passive Aggressive Notes and the “Blog” of “Unnecessary” Quotation Marks as mastering a very tiny sliver of the internet. But you could point to the 3 i mention above (Facebook, Craigslist, and Google) as examples of companies that started narrow and gradually expanded to be game-changers.

When thinking about companies, i think it’s important people try new ideas and things they are passionate about. You’re going to be working 24 hours a day 7 days a week on one idea, so you have to love it. Or as Tim O’Reilly says Work on Stuff That Matters.  It’s clear that startups don’t have all the answers when they begin so at least you can start with something you’re willing to continuously think about.

I was again struck with this thought this morning when i read Clay Shirky’s great post about newspaper and the change they are going through.  He too talks about Craigslist saying:

Imagine, in 1996, asking some net-savvy soul to expound on the potential of craigslist, then a year old and not yet incorporated. The answer you’d almost certainly have gotten would be extrapolation: “Mailing lists can be powerful tools”, “Social effects are intertwining with digital networks”, blah blah blah. What no one would have told you, could have told you, was what actually happened: craiglist became a critical piece of infrastructure. Not the idea of craigslist, or the business model, or even the software driving it. Craigslist itself spread to cover hundreds of cities and has become a part of public consciousness about what is now possible. Experiments are only revealed in retrospect to be turning points.

So, my advice to aspiring entreprenuers is – (a) focus o  something you love; (b) don’t focus on changing the world but rather focus on doing something, one thing, extremely well.  If you execute on those 2 points, it’s easy to expand into something more powerful and profitable.

Raising Money Suggestions

Image by pescatello via Flickr

This is a great post done by my boy Travis Kalanick who is one of the most kick-ass entreprenuers out there. He kept RedSwoosh alive from 2001-2008 before he sold to Akamai.  There are quite a few tough years in there but he completely scrapped it out and rocked it.  His post outlines what every entreprenuer needs to know when raising money.  Check it out here.

One part i liked talks about bringing the passion, saying:

Passion/Chrisma is the X-factor. It separates the men from the boys in fundraising. If you’re doing a startup, you’re trying to change the world, you’ve kicked your cushy job to the curb, you’ve had Ramen noodles for breakfast lunch and dinner as far as you can remember, and maybe you’ve moved back in with the ‘rents. You’ve definitely got the passion…why else would you be doing this? Don’t be afraid to show it. Every pitch could be your last one (i.e. the dude across the table writes you a check!), know that… give it your all… listen to some music that pumps you up before you get into the meeting, think about all of the great shit you’re doing and could do.

My favorite music to listen to is this speech by Al Pacino.  I find it really motivating – and it got the job done when i was pounding the pavement in Palo Alto. Click here to listen:  Inches are Everywhere!

Obama poster drama

I heard a great podcast yesterday on NPR about the iconic Obama poster (seen above). The poster is done by a fascinating artist named Shepherd Fairey.  It’s a little known fact that Fairey is also responsible for the Andre The Giant “OBEY” sketches that i remember from the 90’s.  He really gets around.

In this case, Fairey took a photo he found on Google and then altered the neck, the eyes and the colors (and cropped out George Clooney) to make a poster than came to symbolize the campaign.  Shepherd always claimed that he made the poster from an Associated Press photo and about a month ago, it was finally determined which photo he used and who the photographer was. It was a photo of Obama sitting at a press event in Darfur with George Clooney.

All this would be nice and peachy except that because the photo was an AP photo, the AP came to Fairey and threatened to sue if he didn’t dish out a percentage of revenue he made from the poster. Fairey acknowledged that he’s willing to pay the standard license fee and attribute the photo to the original photographer but he won’t be bullied into paying.  So, instead he sued the AP in an attempt to discourage companies from punishing artists for creating art.

While his argument stands on fair use, to me the real issue is about people making derivative works. It’s the 21st century and lots of people take lots of images and transforming them into art. If each is penalized into paying a bounty for the original source we’re limiting and hurting society.

In this day and age, users are both consumers and creators of content.  So many YouTube videos have copyrighted works in them.  Last week there was a huge fiasco around Facebook’s Terms of Service when they claimed they owned all user uploaded material.  Thankfully, they backed off.  But the backlash from the users illustrates that ownership of property, attribution, and sharing is really important to the web.

If anything this just leads me more and more into believing in Creative Commons. It’s truly the only mechanism that let’s people properly manage their rights

Real-Time Search

I got quite inspired when reading this post by John Borthwick.  First of all, the YouTube data really surprised me in that YouTube is now the 2nd largest search site online, bigger than Yahoo! at over 3 billion searches a month.

Second and more importantly, i started thinking about real-time search.  Finding out what is happening right now on the web is really cool and going to becoming increasingly important and interesting.  As real-time events happen such as earthquakes, sporting events, meetups, etc. we’ll want to search the web and find out what people are thinking.  This is a fascinating new arena that comes with real-time messaging.  We’ve always has AIM and Facebook’s status messages, but we’ve never had a way to search through them and get a snapshot of what’s happening.  Until now.  Go to Twitter’s search at http://search.twitter.com and type in something and you’ll immediately see what people are thinking and doing on the web.  It’s incredible

I’m still getting my head around what this means and how it’ll play out but i have to imagine that real time information will be quite valuable.

Google Latitude

A new feature was released today from Google called Google Latitude.  It’s allows you to post your location onto Google Maps and to see your friends’ locations.  It’s done using GPS and other technologies (Gears, etc.) and works really well.  Here are some thoughts i have on it

First, I like the way it looks and works. The interface is extremely simple.  Entering in info is done inline and the interface is definitely not cluttered with too many bells and whistles.  Adding and viewing friends is also braindead simple.  Overall, it’s a snap to use

It’s a social app but it’s different than a social network. For instance it’s (a) only really useful for people you know, (b) more interesting for people you live close to, and (c) limited to only location information. It’s only a map.  Again, very simple

Not everything is great though. One thing i don’t understand is why they force you to access it (on the web) through iGoogle.  I have a homepage already and see no other reason to go to iGoogle.  That’s annoying and i wish it had it’s own site like Google’s Calendar, Reader, Maps, Mail, etc.  Also, I also wish it would use my profile from other Google products. It seems now that i have a different profile for Gmail, Calendar, Orkut, FriendConnect and Reader.  Why can’t there be just one?

Since i’ve had a iPhone, i’ve become much more aware of the usefulness of my location.  When this information is layered onto web services, those services can become much more useful.  I like this new app because it shows that there’s a whole other layer (location) that is just starting to be explored. I can imagine many applications starting to layer in location and serve information based on this.  Ad targeting, ticketing, messaging, groups all change when this is added.

Related articles:

• Google’s Latitude Adds Location-Sharing to Mobile Phones (radar.oreilly.com)
• Broadcast Your Location To Friends With Google Latitude (techcrunch.com)
• Ten Reasons why Google Latitude will succeed (thenextweb.com)