Analysis

Health information + Internet

On the one hand, we see a mess: we see 6.5+ billion people most of which know nothing about managing their health, we see the wasted billions people spend on their health every year (or is it trillions), we see charities spending billions (e.g. Gates Foundation) to improve health, we see the battle between scientifically proven medicine and the persistant superstitions, we see obesity and late night TV, the list goes on. On the other hand, we see the Internet, free, increasingly robust, growing like a weed to every corner of the globe, fully capable of getting the right information to the right place. So what gives? Why is health information on the Internet still so bad 13+ years into this?

Has anyone been on WebMD recently? Given it’s the #1 medical site (by Comscore, so take it with a grain of salt), I found the experience suprsingly lacking…lacking in depth, readability, clarity, humanity. Not only does the site navigation and design feel so 1997, so does their unwillingness to give much information other than “consult your physician.” I was hoping that Revolution Health was going to make a difference, and their interface does scream Web 2.0, but I don’t see them getting much traction, and I heard they are burning $6 million per month. With deep pockets, strong vision, real passion and a bunch of very capable management, Revolution Health has probably bitten off more than they can chew.

60% of all medical searches online start at Google, and they do seem to be making some small adjustments to their product that may pay off for users. (See screen shot)

Right above their results for “common cold,” they let you narrow your search so you have a better chance of avoiding the Spam Sites that are trying to swamp their SEO results. If they do that, people will certainly get marginally more educated. But Google, from what they say, are not focused on education as much as they are focused on patient records. It’s certainly a huge mess deserving of attention, and if they solve it, it would make a big difference. (That’s also probably a wise strategy for them — letting other companies come up with the great health information sites they can spider and put ads next to.)

So we are still left with the sense that getting good health information to people in a way they can absorb it and use it could have a big benefit to the world. Could be world changing. The fact it hasn’t happened could be a result of 1) intractability of the problem, 2) entrenched interests don’t want it to happen, 3) good laws and processes we’ve put in place to stop health fraud are now also stopping us from sharing truly useful health information. I’m interested to find out which one it is.

Uncategorized

Love to the Innovators, Part 1: InfoSeek, Bill Gross and Yahoo!

This is the first in a series of posts where I want to make a record of the consumer Internet innovators, so we don’t loose track. They deserve credit for their contribution, as well as our love and admiration, particularly because, if I’m seeing it correctly, I don’t think many of them made much money on their innovations or were recognized much. In fact, I’m thinking there maybe a somewhat negative correlation to being an innovator vs. making money and/or getting the credit. We’ll go through it, see if I’m right, and I expect people to correct me so we can get the record straight.

Let’s start way back in 1994 with InfoSeek. I believe these guys were the first to do Web search by spidering HTML pages. I also think they were the first to do a simple page with a search box in the top and middle, something Google got famous for. Here’s a screen shot from Archive.org of Infoseek’s home page in 1996.

infoseek-home-page-1996_v2

InfoSeek eventually got killed in the search business by Yahoo, Lycos, Excite and AltaVista, and sold to Disney for $76 million. Ouch. No credit, no money. And this was all before Google was well known. (Along the way, InfoSeek’s stock was worth significantly more than $76 million and I don’t know, but perhaps some of the innovators cashed out. Let’s hope some of them did. I know we did at Battery Ventures, but it was at 16X our money, not the 220X the guys at CMGI got from their investment in Lycos.)

Since we’re talking about search, I think we also need to recognize Bill Gross, founder of Idea Lab, who in 1997 or 1998 invented the pay-per-click business model for his company, GoTo.com, which later became Overture. UPDATE, Sept 16, 2007: James Hong of Hot or Not emailed me to say that little known fact is that Scott Banister actually invented the pay-per-click ad, brought it to Bill Gross, and then became “VP Ideas” at idealab. Great stuff, James, thanks!

Now, Overture eventually sold to Yahoo for $1.4 billion, so Bill must have made some money from that one, right? Well maybe not, because IdeaLab raised so much money from investors in 1999, that the investors may have gotten most of it. I really don’t know. In any case, another vindication of his invention was that when Google went public, I believe it was disclosed that they paid $300 million to Yahoo for the license to their patents so Google could continue to use them. Bill Gross is a smart guy and an innovator for sure. Love and recognition to him.

Further on search, we have to give credit to Yahoo! for being the first to come up with the crazy Internet company name and breaking the mold.

Prior to Yahoo!, all important companies needed to have serious names like InfoSeek, AltaVista, and Digital Equipment Corporation. Yahoo! made it safe to have fun, and paved the way for a name like Google. That’s a big deal when you’re talking about marketing to consumers. I love Google as much as the next guy, I really do. I frankly think we’re lucky to have such well intentioned people running it. But I do notice a discrepancy between what they are credited with innovating and the reality. Did they invent Web search? Spidering HTML pages? Simplifying the interface? Business model? Attention grabbing name? They were followers in all of those.

I believe (and correct me if I’m wrong, seriously) the record shows that Google was simply a little bit better in ALL those things in a proven market. At the right time. With the right people. My guess is their success can be boiled down to two main things. First, they turned out to be great consumer marketers. That fact is typified by my favorite innovation of theirs – and I give them lots of credit for this — the “This search took 0.29 seconds” read-out in the upper right corner. I give them a lot of credit for that because that one little feature summarizes the beautifully cohesive, simple and powerful story line which allowed them to grab consumers minds and hearts. It goes something like this: two young Stanford PhD students with a patented algorithm, top venture capitalists come in to help make it a company, biggest server farm, all the techies in Silicon Valley are using it so you should, too, unique culture with 20% time, IPO coming soon so you can get in on it. The story was beautifully played and simple and heart warming enough to be absorbed by consumers.

The second thing Google has is excellence. They have built a culture of unremitting quality which allows them to scale their great product. They have focused on people and never let down their standards. That is something very few companies ever do, and for that, they deserve it all, even if we can’t give them as much innovation love as Newsweek might.

Analysis, Cool companies

Kevin Rose — Silicon Valley’s first Tom Cruise?

Here’s more indication that the consumer Internet is moving closer to the Hollywood operational model. In Hollywood, movies are often popular because of a star power like Tom Cruise. The movie doesn’t have to be good, but if Tom is in it, it will make money. In tech, things have traditionally been different: your product has to make sense and work. Value is created, not just through popularity, but by first-mover advantage, or technical excellence, or discovery of a new business model… typically something substantial.

Certainly there are a few serial winners in Silicon Valley like Steve Jobs, or Mike Cassidy (directhit, xfire) or Peter Thiel (paypal, facebook), but each time they’ve succeeded, they’ve done it from scratch, producing great products and great teams that battled their way to the top. They were never Tom Cruise. Their involvement didn’t guarantee success. In fact, most of the time, when you see people say “He’s done it before, so he can do it again this time, I’m puttin’ money in!” … it typically doesn’t work out. The tech market is unforgiving.

But Kevin Rose, with Pownce at 700 on Alexa in the U.S., may be revealing himself as Silicon Valley’s first Tom Cruise, where if he’s involved with something, it gets high adoption, which creates value, as long as it’s a network effect business. Is “Executive Producer: Kevin Rose” (ala Speilberg) far off?

Ooga Labs

Speed Teams

At Ooga, where we’re building 5 separate products (with separate code bases, URL’s, business models, corporate entities, etc.) we develop in what we call Speed Teams.

A Speed Team is composed of two people: an engineer — who is responsible for programming the database, the application, and some of the front end — and a Designer — who is responsible for the look and feel of the site and most of the front end code. Each Speed Team works with me and Stan on a daily basis, and the project is held together with a simple document that lists the tasks and help us prioritize them. No Product Requirement Documents, no Marketing Requirements Documents, just talk and go. We find this gives us maximum freedom to iterate on a project as it moves along. Without a Board of Directors to hold us to a plan we might have come up with in the past, we are free to do what makes sense based on new information, new ideas, or feedback from the users without having to convince anyone, again adding flexibility.

By constantly adjusting to new information, we hope and expect that it will increase our odds of building something that works. Time will tell. In larger companies, they often have large groups of people on a project, each with a designated expertise. We don’t think this makes sense in the consumer Web space.

At our last company, Tickle, where we also were developing about 5 separate products, we got it down to 5 people per project: database, application layer, front end coder, visual designer, and product manager. This was pretty good and pretty fast, but still time consuming to manage everyone.

When you have good people, they all have an opinion, and it takes time to let everyone have a say. So at Ooga, we’ve taken it the next step, down to 2 people per project. Ideally, in the future, we will experiment with getting it down to 1 person, although finding someone who likes doing all layers is rare. (If you are one of these people, let us know.) As a website grows, we’ll add one or two more engineers, keeping the one designer. We’re not sure it gets much faster after 3 engineers + 1 designer, unless you have a business that can be easily modularized. That group of four will then tap into shared Ooga resources for customer service, IS, and revenue.

We’re confident we can grow a business to a significant size with that configuration given the right people. Some of the challenges with this Speed Team approach so far: 1) Having only two people on a team means each person must be learning constantly in several skill areas to be good enough to execute. 2) It’s pretty intense because the whole product rests on each person’s shoulders. There is no hiding. 3) Our one simple document let’s us know what to do on a weekly basis, but doesn’t yet let us break down tasks into sufficiently small chunks where we know what to do on an hourly basis, so we’re changing that.We’ll talk more about this in the future.

And right now we’re looking for people who think this sounds like their cup of tea.

Uncategorized

The Age of the Studios

I’ve got a theory that the digital media industry will go through the same general phases that the film industry went through. Try this on. In the 1920’s and 1930’s, people were just learning how to make a film: the machinery, lighting, developing the film, etc. The tech was unfamiliar and it was hard to get film out the door and in theaters. Knowledge of the technology to make a film was not widely disseminated during this first phase. The same was true of Internet websites between 1994 – 2004 — Phase 1 of the Internet.

In 1937, out came “Snow White” and in 1939 “Gone with the Wind.” Those two films blew the viewers away, and showed the true potential of the medium. The lucky people who were on the crews of those two films were now among the few that knew what it looked and felt like to make a GOOD film. This was then the second phase of film, the Age of the Studio, where the few people who knew how to make a good film turned their resources into building film portfolios. Talented actors/actresses worked with the same studio for long periods of time, starring in multiple movies. The studios had the money to make a lot of movies because they were previously successful, and because they didn’t need every movie to be a hit to survive. The more movies the studio produced, the stronger their distribution network became, which in turn helped the success of their movies. Their success bred confidence which attracted more talent and customers. The studios ruled.

That knowledge, what it was like to make a GOOD film, spread slowly as more film projects produced excellent results, and by the mid 1960’s it became possible to collect a random group of experienced people in Hollywood and have as good a shot as any to make an excellent film. That permitted the rise of the Agents, who ended the Age of the Studios and took control of Hollywood. I think the Internet has now entered a similar second phase and may see the rise of vertically integrated Studios like Ooga Labs and Obvious for the same reasons we saw them in the film industry. I wouldn’t expect this phase to last 25 years, as film did, but perhaps 12 years, beginning in 2004. It will end by agents, or by government regulation, or by excessive competition (as we have in the film industry, a near zero-margin industry) or perhaps by platforms which will make it possible for literally anyone to play, but I suspect the end result will be the same: that the essence of the endeavor becomes more about politics and who-knows-who, then about talent. If so, then these are indeed the good old days.

Cool Stuff

Fractals yes!

Here’s an old 50 minute film by Arthur C. Clarke I’ve been watching when I can called “Fractals, the Colors of Infinity.” It’s the first video I’ve seen talking about the clear connection between the world we see around us and fractal geometry, even though it’s kind of obvious. You can see some fractals coming out of the fire on the Ooga Labs home page.

Analysis, Cool companies

Facebook F8, a big mistake?

Given the glowing reviews F8 is getting, can we pause for a minute and consider that F8 was a pretty big mistake for Facebook? They say that smart people don’t make small mistakes, they make big ones. Consider that Facebook was going to win anyway, so they could have held off for another 12-18 months before they “platformed” their company. They weren’t facing much tough competition, they had a lock on the flexible clean interface, they were simultaneously growing their new user base and deepening the number of connections per user. By opening up, they have taken on a number of risks they didn’t have before:

1) Their site could MySpace-ize pretty quickly, get chaotic and ugly and loose its interface advantage

2) Worse yet, the UI could get so confusing with so random apps being thrown at you and the feed getting too long that users wouldn’t adjust their settings to reduce the chaos, rather they’d just get overwhelmed and stop using Facebook

3) What Facebook IS to people (their brand) could get confused, and it would be picked apart by a swarm of competitors like LinkedIn, MySpace, Yelp and the 10’s of new vertical social networks. Maybe even some clean college networks would spring up to siphon off users.

4) Maybe this would give too much value to their partners, and the resultant energy would dissipate into the wider net rather than accrue to Facebook like it would if they just build the key apps themselves

All are still possible downsides for Facebook, but in the end, after considering these issues, it’s still a very strong move. First, it is energizing and exciting to their young staff, who are working longer hours than any other startup in the Valley. That alone could be worth it. Second, sure they could have waited another 12 months, but this leaves their any competition flat-footed. Third, there is a magic and a power to the distributed mind, in the collective efforts of 10,000’s of smart people. We saw it with Microsoft and you can see it at SecondLife. Now, of course API’s are not nearly as hard as Win32, so Facebook’s defensibility isn’t necessarily the same as Microsoft’s, and I expect other big social networks to get in the platform business over the next 10 months, but by then, Facebook will be well ahead and be down the learning curve on managing this business.

I think they were right to trust their instincts and fall backwards off the stage into the crowd. For instance, already, several of the applications being built by some of the 30,000 platform developers address my four concerns above. Magic and power. Facebook may not have all the answers, but they’re betting 100,000 smart people do, and that’s not a bad bet. My props to the team at Facebook. They are showing themselves the class of the competition, and they are accelerating the evolution of the social Net dramatically by letting 1000’s social application ideas be tested quickly and easily. Everyone in the social Net, including Ooga Labs, now gets to accelerate their thinking.

As a side note, people have asked what Facebook is worth now. I think of it rather like Schroedinger’s cat where the actual state of the cat cannot be known. This is true for Facebook’s valuation because there is no transaction to be had, so the valuation is indeterminate. Given that the management team knows they will create $X billions of value over the next 12 months, and given that they haven’t done it yet, no one can step up and pay something close to what they know they will be worth. And most likely, even if there were such an offer, it would cause the management team’s belief in their prospects to increase. Perhaps justifiably. And since the company isn’t ready to go public (and shouldn’t!), there is not deal to be done, either by a corporate buyer or the public to establish the state of the cat.

Oh, one more thing, small companies to sell to Facebook in the next 6-9 months will do well. RockYou?

Ooga Labs

SF Chronicle Article

Yesterday there was a great article by Jessica Guynn in the Chron. She did extensive research and jammed a lot into it, and it ended up on the front page, which was really cool. It’s our first public announcement of what we’re up to. My favorite parts were when she compared James to “Timothy Leary the 60’s icon”, and then called the rest of us a “merry band” and an “eclectic clan of nerds.” Heh heh. Story link.

Analysis

Signs the boom is entering the 3rd quarter

3rd-quater-graph

The tech industry cycles very predictably, and somehow it always feels as if it’s for the first time. Very refreshing in a way. Eating lunch at the picnic table in the office, we were talking about what would be some signs that the tech boom is getting into the 3rd quarter…

1) high number of new G.P.’s being hired at VC firms, just in time for their investments to crater in 3 years.
2) more people with British accents around Silicon Valley
3) increasingly attractive people, both men and women, around Silicon Valley
4) VC’s you’ve never heard of, backing companies you think, eh? What the hell is that?
5) new HBS grads joining startups
6) guys in their late 20’s breaking up with their girlfriends rather than getting married and getting distracted from work
7) married couples delaying having babies so they can focus on work
8) pretty large and pretty swanky company parties
9) oversized marketing departments
10) PR companies growing
11) decoupling of earnings from valuations (e.g. Aqantive, You Tube)

Another thought we had was that if a viable business model emerges for YouTube, justifying the acquisition cost and calming the IP lawsuits, the boom might extend because the markets might assume it means that the ad dollars from TV will continue to migrate online, and perhaps subsequently, the online companies could inherit the viewership from the TV companies, NBC, ABC, etc. If a good business model cannot be found for YouTube… then maybe the party in our little corner of the IT world will end more or less on schedule in 18-24 months.

Analysis, Cool companies

Twitter, a great investment for someone

Twitter has tapped a new pleasure center in the human brain at the intersection of cell phones and the Web. That’s a big deal, I think. Instant Messaging was an interface that tapped a new pleasure center in the human brain when all the computers got connected. Social networking was an interface that tapped a new pleasure center in the human brain when digital photography hit. Now it’s happening again, perhaps. Twitter is first with the application, growing fast, and they NAILED the name, which can be a brand and a verb. Investors get in if you can.