In the past week or two, the notion of unexpected rewards (think: unanticipated acknowledgment of positive behavior) has come up in two entirely different conversations. But in both instances, the value of rewarding people out-of-the-blue facilitates the same thing – a spirit of goodwill which fosters further positive behavior.
In one context, I was in a discussion around ways to incent an online community in a social website. Of course, there are numerous rewards & recognition systems in place at various communities, often with deliberate actions and points accumulated which trigger specific compensation for participating in those communities. And those structured incentives work very well if executed correctly. But what can also work in addition to formal schemes are random acts of apparent generosity. Selecting top contributors and making a small gesture (sending something like a small mug/t-shirt/stick promotional item, or even as inconsequential as a personal email from an employee) can really encourage those users further. It makes online community members feel like they’re part of something larger and that their contributions are truly being recognized. Based upon those feelings, users usually then contribute even more than would even given the structured incentive in place. It’s amazing to see how much this actually works.
Similarly, in addition to formal compensation of employees in a startup, unexpected recognition of hard work and positive contributions do wonders. Small gestures from managers of a company that are unexpected can really boost moral in a place that sometime appears to be going every which way some days. Like with all gifts, it’s the thought and gesture that counts, not the reward itself. This situation is little more delicate, however, as the gesture really needs to be perceived as a sincere one. But if done in an authentic manner, far from formal compensation structure and conversations, the effects are often very beneficial for all parties involved.
Real recognition – that knowing that others’ notice and appreciate a particular set of actions – is a valuable intrinsic quality that cuts across many situations. Those little rewards can mean a whole lot, especially when people aren’t looking for them.

While I have already privately shared the news with a few, I am pleased to communicate on my blog that I recently joined the venture capital firm Venrock as a Vice President.
This is a very exciting event for me, as this new role brings a new set of opportunities, in addition to allowing me to leverage my current strengths and interests. I will be based in the Cambridge office with Mike Tyrrell, and am looking forward to working with him and the rest of the Venrock team across all of the offices (New York, Menlo Park, and Israel). My focus will continue to be on early-stage investments in the digital media sector (primarily focused on internet and mobile spaces), working with entrepreneurs to start and build successful companies. And as part of that practice, I will continue to blog here at GenuineVC and lead the Web Innovators Group based in Boston.
In exploring the possibility of joining Venrock with the partners here, I was particularly struck by one theme which ran through all of our conversations: the importance of relationships. It became clear that I would fit into a firm which lives up to its heritage – with everyone valuing with paramount respect the relationships which they have with entrepreneurs, with investors, with the community, and with others within the firm. It is that team of investment professionals which I wanted to become a part, as my belief is that the fundamental driver of success in the venture capital industry is these strong connections and bonds.
True to that note, during my past couple years at Masthead Venture Partners, I fostered a number of relationships, including both the principals of that firm and the entrepreneurs who we invested. And while there is no longer a formal affiliation, the foundation on which these were built remains solid and will continue to do so.
A few weeks ago, Venrock announced that it raised $600M for investment in early stage startups across a diverse set of sectors (biotechnology, energy and nanotech, healthcare IT, medical devices, and digital media). I am excited to become a team member at the firm investing this capital in the digital media space, building new relationships and strengthening existing ones.

Interesting figures out of researcher firm PQ Media this month on the size and growth of “alternative out-of-home” media, which includes video advertising networks and screens in theatres, offices, stores, in-transit, and other digital billboard locations. According to their research, the overall category grew 27% to $1.67B in 2006. Take those figures (which assumingly lump in other miscellaneous items) with a grain of salt, but there’s no denying that the proliferation of digital signage with advertising messages is happening.
Patrick Quinn of PQ Media said, “Ironically, the trends impeding traditional media — consumer fragmentation and control, advertising accountability and the emergence of digital technology — are the very catalysts stimulating the tremendous growth in alternative out-of-home advertising.” Much of the technology press attention on the digital media space (both mainstream and blog) has covered consumers’ consumption inside the home (web, digital audio and video) or on their own devices when they leave the home. Yet the availability of digital media has the opportunity to spread to the entire real estate of public life.
Is there a day in the future when property owners with public space, like shopping malls, become media companies focusing on selling not just physical store inventory but also ad inventory? It’s already slipping into the consciousness of these groups; for example, Simon Property Group annual report mentions their providing digital programming in their annual report with “very encouraging” initial response.
But what does this mean? Some people like John Blossom of Shore Communications have argued that media companies have become desensitized to the idea of public space, believing that any and all space is open for media or advertising. Is this really true? Next time you walk outside in public, consider the fact that there’s visual real estate inventory available wherever you look. But whether that perspective is beneficial for society is definitely an issue. Judith Perrolle, a professor of sociology at Northeastern Univ., has called coined the phrase “solid state spam” to label unwanted and unwelcome messages appearing in a public area, when marketers fail to consider or respect the community’s views of space.
But isn’t the notion of the social media revolution that media is supposed to accommodate consumers not violate norms? Don’t consumers have the ability to dictate the here, what, where, when, and why they consume media? Shouldn’t this notion extend to the public space as well?
On Thursday, the Taxi and Limousine Commission of New York approved a plan to install touch-screen monitors in their entire fleet of taxis. These screens will allow riders to pay by credit card, check on news stories, map out where the cab is going and find information about eateries and bars. To me, this example use of a public space for digital screen media seems more than appropriate – it delivers contextually relevant content to people who need it at that moment, and the advertising messages which follow are (presumably) relevant.

As outdoor digital signage continues to proliferate, we’re going to need some public discourse to reach a consensus about what is acceptable public real estate for these media. There are clear benefits – advertisers and consumers alike – for appropriate outdoor digital media as sources of useful information, and the business opportunities to serve this growing market are perhaps under appreciated.
(Thanks to Greg Peverill-Conti of Weber Shandwick who has helped me think about these topic over the past couple of weeks.)

As an early-stage VC, I have a unique privilege of confidentially spending time with a number of entrepreneurs throughout their company formation and initial product development process. And it’s amazed me how many times I’ve seen two entirely separate groups of entrepreneurs without any knowledge of the other’s activities independently come to launch very similar products/services.
Information about new startups and trends affecting them is near ubiquitous given the rise of influential and well-read blogs, as well as the mainstream press and conferences. And based on these visible and salient market trends, smart people tend to be led to the same conclusions about wherein lies the opportunity. If a large objective market opportunity exists, it would be unusual for it to go entirely missed by those with experience in the space. However, not everyone sees it that way – entrepreneurs, bloggers, and others sometimes privately/publicly accuse and dismiss other groups of copycat tactics.
This copycat threat leaves entrepreneurs hesitating about spreading knowledge about their startup endeavors, especially early on. Yes, there is certainly risk in this perspective and there is a logical set of reasoning for operating in stealth mode, as I wrote about a couple of years ago (my opinion is that the best course of action isn’t a binary approach, but rather a nuanced one.) But I believe the risk of another someone literally copying an entrepreneur’s startup idea is largely overperceived and overweighted. Generally-speaking, isn’t it better to bang your drum about your idea with better hopes to attract co-founders, employees, advisors, capital, and other important continents to make your company successful?
Of course, there are exceptions to every rule – sometimes a founder has unique perspective given his/her past experiences that allows her to recognize an opportunity in the market which others do not see. And I would highlight a distinction between the essential startup idea and a trade secret or other proprietary information which provides unique competitive differentiation. But I always start with a skeptical stance about first-mover advantage claims as the primary barrier to entry into a competitive set. Sure, network effects provide clear competitive advantages in many markets, but it hardly guarantees success without other differentiation. Defensibility with other aspects of the business model and above all, execution, mean so much more than a few months time-to-market.
Give entrepreneurs credit where it’s certainly due – very few set out to pursue a true copycat strategy. Almost all are reacting to market dynamics and an authentic (though sometimes incremental) idea. The question when pursuing a new idea for a business isn’t “has someone else thought of this and how can we prevent that from happening?” but rather “how can we beat someone else who is thinking of this right now?”
(And when you see a new company that launches that rhymes with another, I wouldn’t assume it’s a copycat endeavor that doesn’t have other tricks up its sleeve which aren’t yet visible.)

Many have cried about the death of the pageview, largely due to the emergence of video content and AJAX-enabled pages with non-reload updated information. But the pageview isn’t dead. At least not yet. Rather, it’s just being dethroned. In Web1.0 it was the only way to measure engagement. Now it’s becoming one metric of many. Ask someone in online ad sales if pageviews don’t matter today. Of course, pageviews are going to matter less and less over time as other measures emerge, and people have been talking about this fact for months. But I think for a long time coming the act of completely refreshing and loading a new page reflects a deliberate act on the user’s part which signifies a level of interaction and engagement with the web that is meaningful. What is more interesting, however, is not the diminishing stature of one metric, but rather the emergence of others. It’s simply a reflection of the fact that all pageviews are not created equal – and that’s always been the case.
Two weeks ago comScore (with its eye towards announcing its plans to go public yesterday) added the notion of “visits” to its scoring of websites. Peter Daboll of Yahoo subsequently applauded this move (which reboosted their stature in the comScore rankings saying, “This by no means is a silver bullet, as this metric doesn’t count ad consumption and impressions (which, by the way, is also a drawback of pageviews). What it does provide is a valuable reference for advertisers to determine where to increase their ad exposure and budgets.” And yesterday Compete introduced a new metric called “attention” which “fuses engagement (measured by time) and traffic (measured by unique visitors) into a single, more complete picture of a web site’s value.”
Other notable measurement statistics have emerged when innovators take a fresh perspective as the web has evolved with the “new” content type of video. Early-stage startups like TubeMogul (which performs cross-site video and video publisher tracking across MySpace, Metacafe, Revver, Yahoo Video, and YouTube) are trying to make sense of how many people watch video, when, why, and what that actually means. The past few weeks of posts on TubeMogul’s blog have contained some insightful commentary around views of political videos and the effect of those on parties and candidates (see here and here).
Last week Ari Rosenberg wrote an Online Publisher Insider article rightly claiming that we shouldn’t kill the pageview. But his reasoning for doing so is completely incorrect, as he contends that it will hurt the industry with confusion around metrics. I think this is a short-sighted approach to a long term problem about how to effectively measure user’s engagement on the web. As Jeremy Guterman at PaidContent has written, “what do we get with more information? A muddier picture, but maybe a more accurate one.” We’re in the midst of a sticky transition about how we measure actions online – to say that the pageview is dead may be overly sensational, but to contend that we shouldn’t press forward looking for new solutions is myopic.

In the early days of a startup, it’s always all hands on deck. There are a set of founders or founder(s) with an early team, and the roles of who does what and when is often decided by whoever has free bandwidth to address it. These individuals apply their skillsets to whatever needs to be taken care of today with little (if any) thought to process. Results are paramount. Accordingly, people’s roles become fluid and partially interchangeable. They get things done in small ad hoc groups or “tribes” that form and dissolve in lock step with the necessary tasks at hand. And that’s a good thing – in those very early days, it’s imperative that the organization is nimble and flexible to react to the marketplace as it commences in building both a product and a corresponding business model.
At some point, however, a startup team needs to evolve from building a small-team endeavor into building a company with a strong organizational structure. A number of events could serve as a catalyst for this transition: a round of institutional investment, the introduction of a new senior person on the team, or significant growth in the number of people within the company. But maturing from a tribal mode into a healthy functioning organization is often a very challenging process.
Changes in responsibilities and how people relate to each other (especially when process is introduced) is difficult to digest, especially when it seemed to be “so much easier to get things done in those early days.” No longer is a jack-of-all-trades individual supremely valued, but rather those who are concentrating and performing on a specific role. A salesperson cannot be heavily involved in product management process, nor a product manager spend much time on (or be apt to) sales. Everyone used to do a little bit of everything, but that becomes no longer desirable, let alone feasible.
The first key for handling this transition is for everyone in the organization to realize that this process is happening. Startups go through growth, and with that growth comes change. Period. The difficulties in this transition usually arise as cultural ones, and that affects everyone in the company. While some growing pains are inevitable, once there is consciousness as to what is happening, people are able to more effectively communicate about it. I think it’s incumbent on a startup’s leaders to understand this dynamic and address how it affects both specific individuals and the company as a whole.
A question I like to ask early stage startup CEOs – are you in tribal mode, organization mode, or somewhere in between? The only bad answer to this question is “I don’t know.”

Michael Copeland’s latest Business2.0 article predicts a “tidal shift” towards the emergence of tech IPOs in the next couple months. While his language is perhaps excessively strong, I think that his sentiments will likely prove to be correct. There are a number of real growth technology-based businesses which weathered the storm earlier this decade that have emerged commanding both healthy top lines and bottom ones. And some of these even have “.com” in their names. It’s inevitable that the climate will change towards realizing the merit these businesses posses for going public is real.
It’s been interesting to hear similar thoughts in private conversations as the inklings have been written in the press, but it seems as though many are treating this story of impending IPOs like a jack in the box – winding and winding, waiting and waiting for the fun to emerge at one instant. I suspect the acceptance of offerings by public investors will increase steadily and markedly in the next year or so, but those waiting for an overwhelming stampede will be disappointed.

Om Malik wonders “why did Fox buy Strategic Data” saying that “It is becoming obvious 2007 is the ‘show me the money’ year for MySpace and other FIM acquisitions.” At face value, this deal is a notable move of taking important vendor technology in house that will help bolster the revenue base of the property within a larger corporate entity. However, I see this as a larger step for the industry as a whole piecing together what will eventually be a myriad of ways that social software will be significantly monetized.
While the executive quotes talk about the replacement of existing ad network vendors towards in house technology, it is really an acknowledgement that innovation in driving real revenue must (at least partially) come from outside the company. And while the largest social networks like MySpace are indeed media properties (and therefore ad supported), I think that it’s likely we’ll see other valid revenue models emerge as well, whether it’s transactional based, facilitating commerce, etc.
Even in the past couple weeks, we at Masthead have seen a couple interesting startups taking a unique approach to monetizing this type of traffic going beyond ad supported. I believe the key for these endeavors is to fit into an existing revenue model applied elsewhere, be applicable across many niche demographics, and of course scale. We’re still seeing vertical social networks pitched to us without little plans for revenue generation, which is more than a little troubling in my opinion.

Yesterday I came across yet another (read: tired subject matter) article about the perils of living in an “always on” culture with the advent of portable devices like BlackBerrys and Treos. While I fall into the camp of viewing the carrying of a device with me “liberating” as opposed to draining, my reasoning goes beyond purely staying connected via e-mail anywhere I am (which is obviously a huge benefit). With my 8700 series, the mobile browser functionality actually works rather well. And with that, I have my my.yahoo page as the default home page. Even more than with a PC browser start page, I find the having mobile start page is extremely helpful – with feeds from all of my favorite news sources and blogs, to weather, to links to other relevant content I want on the go.
This perspective seems to resonate with a number of the comments around mobile search coming out of this week’s 3GSM conference according to this MocoNews post. Daniel Appelquist, Vodafone’s senior technology strategist, said “It’s about getting to content in zero clicks …and about having the information you want when you pull the phone out of your pocket.” And that’s exactly how I view the content I get when I use my BlackBerry in this way. (Whether an operator like Vodaphone will in the future play a/the central role in delivering that type of information is an entirely different issue.) Jim Holden, Google’s director of global wireless strategic partnerships, “pointed out that search isn’t just about accessing the mobile Internet. It’s also about creating an environment on the phone where users can make use of the information and content they find.” In other words, there is a distinct difference between the “how you find information” and “what information you find” on mobile devices vs. on the PC. And obviously the industry has a long way to go to discover the right model here, especially for mass consumer devices. In the meantime, for me though, the new slim BlackBerry 8800 is making my 8700 look obsolete.

A year ago I posted about when I meet with entrepreneurs for the first time that I like to ask about the founding story, the plot of how the idea for the company was generated and how the principals in it came together. These intangible details of a founding story accurately portray a startup as a unique coalescence of real people, not just a valuable aggregation of human and technological capital.
I wanted to add that I believe that learning the founding story also helps us as VCs evaluate and better understand entrepreneurial teams in situations where we haven’t had prior experience working together. It faciliates VCs learning more about the company along many dimensions, as it sheds light on subtle cues about a team’s core and the values. And it provides perspective around the original thesis upon which the company was established. In understanding a startup’s narrative, we can better ascertain where blind spots could be in the team’s perspective. If there have been bumps along the way, what has the company held onto and what has evolved? How open are people to change and feedback from the original idea, while staying true to the essence of the fundamental thesis? (If the company is too new to have faced major obstacles, that fact exposes a lot as well.) In other words, learning the founding story is an attempt to proxy having had directly watched a startup grow over time. With a greater perspective of a company’s heritage, the more informed an investment decision VCs can make.