I met Michael Mandel at 500 Startups in February.  He’s a former commercial real estate broker in Manhattan.  Been iterating away with his co-founder CTO Vadim Belobrovka and his  Chief Product Officer Jeff Domke for a couple years, refining a information marketplace to serve that market.  Compstak.

I love that market.  “When it comes to wealth creation, there’s real estate, and then there’s everything else.”  And the Commercial real estate side is even more underserved by the tech community that Residential real estate.  I think because fewer technical people have direct experience in commercial.

They have line of sight to liquidity in their marketplace, a great team, and a viable path and the vision to being ginormous.  It’s our only the second time in 10 years we’ve gotten involved in a company in NYC, and the distance certainly presents some challenges, which is why we don’t make it a habit. But these guys are the exception.

Here was the post we put up on CraigsList:

Lead Artist for our online games company with 1 billion page views/mo.

We’re building an online games experience second to none. We already have 2 million users and 1 billion page views per month and we think it can be 10X better. All we’re missing is a passionate and creative Lead Artist to lead the way on the art side.

You’ll get to work with a team whose last company signed up over 200 million people and with one of the legends of casual games who has done this three times before. You’ll be the go-to person for creating the visual look and feel of our games and our website. You’ll be first among equals of a talented team of artists and designers who will work along side you. This is a very hands-on position. You will get to supervise outsourced teams of game developers, providing them with the art and design to implement and insuring they maintain the integrity.

We are building casual games and targeting a female audience, so you should be interested in those types of games and in serving that audience. Our games are Zen-like, they are not violent, they are low on competition, and they are high on cooperation.

We have a sense of humor, we like to have fun, and we are pretty innovative so you must be the same. We also love what we do and work our asses off.

We see a huge opportunity in the casual games business over the next 4 years, and we are running toward the opportunity. It’s that time of life for us, and you should be in the same place.

You should have prior experience developing social or casual games with strong visual appeal for web platforms or PC. You must have superior artistic skills and background with producing visual art. You must have strong team building skills and the ability to communicate with other studio disciplines and management.

Skills

• Experienced artist and manager capable of working in a wide variety of appealing styles. Our core audience is social and casual game players, primarily women 35+.
• 3 years experience in game development with 1 year as lead artist or art director.
• Strong illustration skills.
• Strong character design skills.
• Strong animation skills.
• Excellent knowledge of Adobe Photoshop, Flash animation, and other art/design apps.
• Bachelor of Arts and minimum 2 years training covering design, illustration and animation.

Our last company sold for over $100M. You’ll be mentored here by the best in the industry. Our offices are in downtown San Francisco, near BART, Muni and MoMa.

Send your bio and portfolio to our talent czar jwong@oogalabs.com

As we continue to build our gaming company one of our goals is to promote community in this space.  We are literally surrounded within a 12 block radius by some of the coolest companies in social games now.  Ooga wants to provide a forum for sharing ideas, insight, metrics, and experiences together…so we started the Social Games MeetUp.

Our kickoff event on Dec 9th was a wild kick ass success.  Held at the art gallery 111 Minna, we hosted over 200 game aficionados.

The event was titled:  “Five Minutes With Ten Social Gaming Virtuosos”

Check out this speaker lineup:

• John Nguyen from MySpace
• Bret Terrill, writer of “Bret on Social Games”
• James Currier, CEO, Ooga Labs
• Marc Wilhelm, Creative Director, SGN
• Jing Chen, Co-Founder, Developer Analytics
• Sean Clark, EA Pogo
• Craig Sherman, CEO Gaia Online
• Saurin Shah, Digital Chocolate
• Hugh de Loayza, VP, Zynga
• Jim Greer, CEO, Kongregate

In attendance was a who’s who of the local gaming space; MTV, Peanut Labs, Small Worlds, Mochi Media, PlayFirst, Yahoo, Google, RockYou, Slide, OfferPal, Zynga, SGN, Pogo, Dev Analytics, Three Rings, Kongregate, Gaia, and many many more.

If you are an Engineer, Dev, Designer, Art Director, Entrepreneur, Investor, and/or passionate about Social Games please join our meetup;
http://www.meetup.com/SocialGamesSF/ and look for the next event invite.

I went to the Health 2.0 conference September 20th, and I’ve been mulling what I saw there.

There were health information aggregators like Google, Yahoo, Microsoft, and WebMD. I think we all agree that these players are doing a mediocre job. As you would expect from public companies with a lot of pressure on quarterly financial results, WebMD, Yahoo and Microsoft pages seem optimized for revenues, not optimized for answering people’s questions. Also, the language on these sites is inconsistent, so you never know if what you’re going to get on the next click is what you want or not. Google is the one that is trying interesting things, as this link shows and as we’ve mentioned before on this blog.

There were lots of social networks for patients at Health 2.0, the best being Patients Like Me, covering conditions like ALS, MS, Parkinson’s, and HIV. They said they’ll soon be expanding from those four conditions which is good news. In general, social networks for patients seem to exhibit a tendency to become whining sessions. Don’t get me wrong, when I’m sick, I like to bitch too. But the long-term, hard-core members of these sites — the ones who end up shaping the tone of the content — tend to be the personalities that never get enough of bitching, it seems.

There were a bunch of doctor rating sites, like Xoova.com, Careseek, HealthGrades, and RevolutionHealth. I think this is an admirable thing to do, but rather than rating doctors as bad or good, I’d like to see people rated on their expertise in relation to particular topics and diseases. Who are the experts in the world? Which are the expert organizations or hospitals in a particular condition? Of the professionals within driving distance of me, who is the most expert in the specific thing I’m interested in?

And there were some social networks for doctors, like Sermo, Medical Alliances and Within3. These sites are a bit like LinkedIn for MD’s — professional networking. Cool, but do these guys really have time to get online and chat away? I suppose if it furthers their research, but man, are those MD’s busy. Sermo has a unique and suprising business model — pharmaceutical companies pay them to listen in on doctors’ email and bulliten board conversations on Sermo to hear first what they are saying about conditions and drugs etc. It’s market research for pharma companies. Interesting.

Vimo was a thinly disguised healthcare-insurance-lead-generation site. Smart to go for the money, but tough for Chini Krishnan to pretend he’s trying to help consumers. It’s like LendingTree, where “when banks compete, you win,” but in this case “when health insurance companies compete, you win.” The fact is they are just selling your contact info for $8 or $16 or $22 to these carriers so they can pester you. Ouch.

There were lots of search engines, all optimized for something different. Kosmix’s RightHealth, in particular, appears optimized for revenues. Healthline seems comprehensive, but I’m still not sure what they do that’s different from Google, other than reduce search spam (and Google is working on that as well).

Then there were various insurance companies, content publishers, and associations who were locked in the past and locked in to how they make money today. There is so much money, the systems are so complex, the number of people and organizations that are affected by any change so numerous, and the moral imperative so strong to “do no harm,” that it’s clear why our system feels at once screwed up and at once impossible to change.

There was a lot of discussion about the future and helping people, but the smell of money in the room was palpable. Most of the people on the stage were stuck in this painful tension, talking about all the good they were doing for people, while their faces and voices revealed a desperateness to punch across some invisible line into a place where the cash flows like rain, as it does for many companies in the health industry. It was a common tension in the presenters, and one I came to believe is endemic to this industry, not just in Health 2.0 companies.

The health industry has a dual mission: help people who are often very desperate for you help — and also make money. In this way, being in the health business is not like the auto industry, or the movie industry, or the finance industry, or the electronics industry, or almost any industry, really. There is a moral imperative that comes to bear, but the reality is that we want to have the most talented people in the world working on saving lives, right? And those people could go become investment bankers or real estate developers and make millions, so we need to pay them a lot to focus on improving health. Thus, businesses in the health area need to make quite a bit of money to support the talent and the R&D required to keep pushing the edge. It’s a powerful tension.

As a final note, I had an interesting conversation with a woman who had been trying to change the system from the top down for 30 years, and was finally giving up. She was starting to pin her hopes on some bottoms-up ideas, and she felt the biggest thing we could do to change the system from the bottoms up would be to create a “computer program to diagnose people.” So a person could type in their symptoms and some other personal data (anonymously) and the system would pop out probabilities for various diseases and conditions you might have and what further tests you could do to refine the probabilities. Does anyone know of any efforts to do something like that? I’d love to talk with them.

All this talk in the blogosphere about who invented Facebook. Shouldn’t the credit go to the 3 guys who built InCircle for Stanford students and alumni back in 2002-3? Two of their names were Orkut Buyukkokten and Tyler Ziemann. I don’t know the name of the third guy,

InCircle was one of the first social networks, and the first to limit members by email address. A Stanford Alum showed InCircle to me in 2002 or early 2003 (I can’t remember) and told me that 80% of the people he knew from Stanford were on it in about 3 weeks after it launched. These three founders realized it was a good idea and wanted to start a company to pursue it. At the time, 2002 or 2003, no venture capitalist would fund a consumer Internet company, so they made it an enterprise software company and called it Affinity Engines. (Remember, this was way before Friendster and way way before Facebook)

The goal of Affinity Engines was to sell the software to colleges to run their own student and alumni networks. One of the three founders, whose first name is Orkut, left Affinity for Google to pursue the social network idea there, dropping the email exclusivity and college focus. The other two kept running Affinity Engines and then sued Google over Orkut.com, claiming Orkut stole code from Affinity Engines. Sound familiar?

If you search GoodTree for — Orkut “Affinity Engines” — it’s easy to find the whole story. Here’s an excerpt from the Wired article in June 30, 2004:

After graduating from Stanford in 2001, [Orkut] Buyukkokten and fellow graduate Tyler Ziemann built a social-networking service called Club Nexus, which they sold to Stanford for use by the university’s undergraduates, according to the lawsuit. Club Nexus was a success, and Buyukkokten and Ziemann subsequently decided to form Affinity Engines and design a product for the Stanford Alumni Association called inCircle. As a developer of social-networking software for university students and alumni, Affinity Engines was among the first players in what has become a very crowded field. Today, social-networking services like Friendster, Tribe, LinkedIn and orkut attract millions of users by giving them a way to easily connect to friends and friends’ networks of friends.

Seems that the “college-social-network” idea is a bit like King Tut’s tomb. Whoever opens it is cursed with lawsuits. Many have tried this idea, and it seems only one has succeeded. (By the way, I may have this story wrong in places. It was a long time ago, and I’m working off my own memory of it, so if I’m wrong, in places, please let me know)

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 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.

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.