Yoick - Hightechwire

Publisher Conde Nast has acquired Digg-look alike Reddit.

Michael Arrington notes that users praise social news site Reddit for its very quick load time - as both a Digg and Reddit user, I concur. Reddit wins hands down.

Unconfirmed reports put the acquisition price at around $65 million. It’s also interesting to note that Reddit built Conde Nast a celebrity-focused version of their service for Conde called lipstick.

There are still rumors floating around that News is looking at acquiring Digg.

Kudos to Paul Graham for supporting Reddit.

It still amazes me that mentioning the word ‘wiki’ in conversation can still elicit blank stares. This is about to change and allow Joe Kraus and Graham Spencer to exponentially increase the mission they undertook when they set up JotSpot three years ago. Yip, their company has been assimilated into the Googlepire. According to Joe, they set up JotSpot as a way to bring the power of wikis to a much broader audience.

I’m not surprised at this acquisition from the point of view of Google arriving at, what Michael  Arrington calls a wiki-based project management service. Just yesterday I was delving into the depths of such a system — it is an awesome way to increase team collaboration and productivity.

However, I’m surprised that Google chose JotSpot. Frankly, one of my teams was, until recently, using their paid service and it sucked, big time. Hopefully, getting Jotspot integrated with the other Google offerings and being pushed out over Google’s data centers will make it less sucky.

So a great step forward for wikis, in general.

What does this mean for other wiki and wiki-based project management service providers? I’d love to hear thoughts from folk like Mike Cannon-Brookes over at Atlassian. I note that Ross Mayfield (SocialText) has offered his sincere congratulations to the JotSpot team.  

I was riffing about this the other evening with Marc Woodward, a General Partner at Neo Ventures. Marc gets the Attention Economy. We were talking about another instance in which the industry gorilla (yes it was Google again) enter your space - what does this mean for you as a startup…validation or vaporisation.

It will have a positive impact by making people more aware of wikis and wiki-based project management. Ross agrees:

This is another great validation of the category we helped start.

There is, after all, enough space for companies like Atlassian, 37signals and others to continue to grow. However, one would expect that it will change the risk profile of these companies. From a glass half full perspective, other media companies may also want to make acquisitions in the space.

I’ll give the last word to  Michael Frakowiak , who says in a Techcrunch comment:

Blogger did not eliminate WordPress or others…

Richard MacManus has published a relatively comprehensive overview of companies in the Web Apps space in Australia.

Kudos to Vishal Sharma for the investigative work.

In a recent interview, Kevin Rose, the founder of Digg, described how the business was an experiment that took off…

We just thought it was an interesting project to see if this concept would work…we were lucky to be the the first ones out of the gate to have this type of content and approach…people started ‘Digging”, and then shared it with their friends, and it just took off.

I don’t believe Kevin simply got lucky. He built a ‘killer application’  in Digg and that’s why he went from an experiment to hyper-growth so quickly. Let me explain.

Giving a talk at his alma mater (University of Illinois), Jawed Karim, one of the co-founders of YouTube spoke about how they went from concept to hyper-growth (idea to 100 million videos a day in 19 months). He glommed onto a term from the 90s’ - ‘killer application’ which he defined as:

A computer program that is so useful or desirable that it proves the value of some underlying technology.

He also made the premise that killer applications build on top of each other…so YouTube was built on a base of other killer apps in the social context space, namely:

• LiveJournal (1999)
• HotorNot (2000)
• Wikipedia (2001)
• Friendster (2002)
• del.icio.us (2003)
• Flickr (2004)

Together, these killer apps formed the base for YouTube to become possible.

In the same vein, Digg was built on a base of similar killer applications.

The big question is what will be the next big thing to burst forth from basic idea to hyper-growth and become a killer application.

I wholeheartedly agree with Jawed when he says:

The next big thing -

•  will exploit newly emerging secondary technologies; and
• these technologies will make something that was previously difficult easy.

I’ve been riffing about this with a few select colleagues over the past month or so, and now… totally independently, David Galbraith has encapsulated my thoughts exactly. We must be jacking the same osmotic channel or something.

Even more exciting is evidence that folk are starting to take action - Evan Williams’ move from Odeo to Obvious is spot on the mark.

So what am I talking about? Let me hand over to David:

The correct model for web 2.0 should be sustainable growth, its the Obvious Corp.

When you describe the Obvious Corp - as Evan Williams has, it sounds a bit like an incubator - you work on multiple projects and some may even get spun off, who knows. But this is not an incubator - incubators do not work for the founders, they work for the owners. Founders like to feel ownership of their ideas, and as much of their equity as they can keep.

Most importantly, incubators are still based upon the premiss of exiting. Apple Computer and Gawker Media produce multiple products but they are certainly not incubators, they are both sustainable - i.e. profit making companies that are based upon innovation rather than exit.

As the technology market matures, value added qualitative aspects such as good design will become more important, allowing mini versions of Apple to thrive - companies based upon product design and innovation rather than spreadsheets and MBAs.

I have started Venture backed companies, worked at an incubator and started non-venture backed companies. I have had more fun, produced more and made more money from the latter.

What is wrong with your exit model may be the model of exit itself, and a sustainable [i.e. normal] company like the Obvious Corp. may be the answer that is - obvious.

Keep watching this space, as they say!

Charles River Ventures partner George Zachary makes Sense and Cents - the name of his new blog. I’m sure he is making more than cents over at CRV and he reportedly even made a return when Evan Williams split with former portfolio company Odeo (now Obvious).

Seriously though, his comments on his blog regarding the split do make sense –

Evan wanted a structure with maximum flexibility without the overhead of additional investors other than himself.

 In other words, Evan is looking for the freedom to be a hyper-entrepreneur, the freedom to experiment with a raft of apps and see what sticks. This can fly in the face of the VC model of focus, focus, focus and sometimes one simply has to find another way of doing things. George is quoted in the Mercury article about hyper-entrepreneurs as saying he would prefer to see entrepreneurs focusing 100% on one company.

When I was on the venture side of the table I would’ve agreed with George, but not anymore. Not in the hyper-age we are going through right now, it’s all about portfolio play, for both venture guys and entrepreneurs!

One caveat: I’m in favor of porfolio plays for Attention Economy, Web 2.0 type plays, but for deep technology I believe one company, one focus is still the best model.

The topic for Thursday evening’s Dinner 2.o in Sydney was the question of whether the traditional venture capital model is broken. Marty Wells covers the discussion here, and there are photos up here and here.

My view on the topic:

   Venture Ain’t Broke: It’s Evolving

It’s evolving to the point where different ventures get treated differently. A WIMAX company that has deep technology, a raft of patents and years of fundamental research behind it warrants a different valuation and level of funding than a Web 2.0 consumer play that consists of a two Ajaxians pumping out a beta in a matter of months.

In the Web 2.0 venture space: less is more. Akin to the entertainment industry, venture guys and entrepreneurs need to invest/build in a portfolio play — some of the apps you take to market will succeed, others won’t, but if you have all your efforts tied to only one play the odds are stacked against you.

Given my crazy lifestyle I was beginning to worry. Am I taking too much on, how do I maintain focus, juggle and prioritise competing demands - you know the story. And then I realised I’m not alone…I’m a hyper-entrepreneur.

The Mercury News, in an article titled Isn’t one start-up enough?, focuses on what Constance Loizos calls the hyper-entrepreneurs, folks who are performing extreme balancing acts…starting not one, but two and sometime more high tech start-ups.

Scott Rafer is quoted as saying that everyone he knows is involved in 5 or 6 projects. Scott is currently CEO of MyBlogLog, a blog tracker, co-founder of Mashery and chairman of WiFinder. I like this quote from him:

“VCs spread their risk across numerous companies. Why shouldn’t we?”

That certainly fits with my portfolio approach. And Charles River Ventures partner, George Zachary, says:

“It’s like how multiple people get involved in multiple movie projects as insurance. Entrepreneurs are responding to the hits-driven nature of the industry, where only a few big acquisitions are happening every year.”

Meet Synthtravels, the world’s first travel agency for virtual worlds.

Recently set up by two Italian entrepreneurs , the company takes its customers on tours of MMOGs like Second Life and Entropia Universe.

Join them in Second Life to discover the Post Art Deco architecture of Paragon City or have dinner in Entropia Universe with Deathifier.

Here’s their Mission:

Tough travelers are always looking further.
And now the new frontier of travel is out of our world.
It is hidden in the invisible geography of the cyberspace. 

In a few years, this geography has been expanding, broadening in every direction, configuring new territories, inhabited by new societies.
These are the territories of virtual worlds, synthetic places that exists only in cyberspace, but that exist 24 hours a day. 

In virtual worlds you can find everything, the good and the bad, the poor and the rich, sumptuous castles and futuristic space bases, luscious women and rough warriors.
But, most of all, you can find many lands to discover, extraordinary places to visit, that will ravish your imagination.
Traveling in these territories will be like dreaming: you will see exotic landscapes where among prehistoric trees break out bizarre surrealistic architectures, strange fantasy regions where the elves built astonishing temples, synthetic deserts covered with post-atomic ruins, seas of pixels where float ghostly vessels, organic architectures that conceal undercover avatars.

Discovering these territories is a great deal, but it is not so easy.
Many worlds request specific skills to be seen in their integrity, and if you want to discover the best, you must pass many hours in front of your monitor, accomplishing weary tasks.
Many problems for people who want just enjoy a trip in a virtual world, just to see how it is made, to try a new experience and tell friends about it. 

So, we shall continue to enjoy only real life travels? We will not be able to double our experiences, pairing the travels in real worlds with travels in synthetic realities?

Synthravels is the answer to all these problems.

Synthravels is the first organization to offer a complete guide service to all the people who want to make a tour in virtual worlds without knowing these new realities, even if they have never put their feet in these strange, synthetic grounds.

The tours and the destinations are chosen by the staff of Synthravels, composed by programmers, architects, experienced video gamers.

Synthravels is based in Milan, Italy.
The concept of Synthravels is by Mario Gerosa and by Matteo Esposito of Imille. 

Mario Gerosa is a journalist who has a long experience in travel. He has worked for many years as senior editor of Condé Nast Traveller Italy and for the most renowned travel magazines. He is a member of the GIST, the association of the Italian Travel Journalists, and of the OMNSH, a French association of video games researchers, and he has been organizing in-world meetings with famous Second Life residents for a project of the Indiana University. In July 2006 he launched the project for the preservation of Virtual Architectural Heritage. 

The NY Times recently published an article which intimated in no uncertain terms that to do a successful technology start up you need to be in Silicon Valley: It’s Not the People You Know. It’s Where You Are.

Rather topical, given the debate downunder as a result of the Bulletin article on Web 2.0 entrepreneurs leaving Australia for the Valley.

My take on this perennial debate is:

    It’s Not Where You Are. It’s the People You Know.

Both New York VC, Fred Wilson, and Fred from  We Break Stuff  strongly agree.

The best view on this though comes from Erik Schwartz:

I lived and worked in Silicon Valley for 14 years. I’ve worked for:
-Big overfunded startups in the valley
-Little underfunded startups in the valley
-Big companies in the valley
-Little companies in the valley that became big while I was there

Now I’m doing a new start up, that is not in the valley.

If an entrepreneur has never worked in the valley, then I think it would behoove that entrepreneur to very seriously consider founding a company there. SiliValley has a community that is very valuable to the entrepreneur.

But I’m already a member of that community. I have all of those contacts and relationships. I communicate with that community every day via email, phone and blogs.

There is also a lot to be said for NOT founding your company in the valley. There is a serious “valley myopia”, particularly in regards to understanding mainstream customers for consumer products. This leads to a lot of people blowing smoke up their own asses (see Bubble 1.0). Infrastructure (office space, services, cost of living) are as expensive in the valley as they are in Manhattan. Traffic sucks and the public transit system is a joke.

The answer as I see it is that it is essential to have a Silicon Valley network and mindset, where you base yourself is irrelevant so long as you have good infrastructure (broadband, etc).

That said, the Valley sure is a blast and I love getting my fix (at least once a day :).

I’ll give the last word to Nik Cubrilovic, who is currently living the Valley dream:

Or you get the best of both worlds, like what we have done at Omnidrive. We keep a really thin presence in the valley and have all core engineering back in Australia and in our office in India. I split my time between the valley and Australia and take the best parts out of both (eg. fundraising, partnerships and BD, legal advice, advisors in the valley - engineers, larger office space, support, etc. in Australia and India). I don’t see why more companies don’t do this - being in the valley doesn’t mean that you need 20 people here and a huge office - you can suck up the best parts of being here.

I also know some companies that have a split between the valley and some other part of the USA - and it works well. Don’t think that you need to relocate everything to take advantage of the valley.

Ben: Coming from Australia, I had no problems registering a company, opening a bank account, getting legal representation and raising money within the first 7 days. Also my personal situation has been sorted out where I can get a phone, rent a car, have a credit card etc. and that didn’t take long either. If you need some tips shoot me an email on nik at omnidrive.com

I have worked in 10 countries on 4 continents and the valley is by far the best place to either start or do business - this whole damn place is built around and geared towards tech startups

Living here though, is something else all together

Gotta run, call coming in from …Palo Alto.