Genuine VC

David Beisel’s Perspective on Digital Change

Genuine VC: 

David Beisel’s Perspective on Digital Change

Filtered Posts

Earlier today, NewsGator announced another round of investment from Mobius and the addition of Masthead Venture Partners. I’ve been very closely involved with the deal here at Masthead, working with partner Rich Levandov and the teams at NewsGator and Mobius in making it happen. Mobius’ Brad Feld outlined his reasons for his NewsGator investment in a post last year, and I wanted to share my own thoughts as well.
At the core of my opinion is the premise that RSS is fundamentally going to change the shape of the Internet. RSS is the protocol which is enabling its transformation from the Reference Web to the Incremental Web, as I’ve blogged previously. There are many companies emerging in this mushrooming space, but I think that NewsGator is in a unique position to create significant value for customers, partners, and investors. It may sound cliché, but I truly believe that the company’s strength comes down to two components: its visionary strategy and the team.
Visionary Strategy. Last June Brad blogged “the misperception is that NewsGator is only an Outlook plug-in.” That view has changed, and deservedly so. First, the company offers a synchronized platform for reading RSS feeds on a number of devices, including mobile and media center – not just in Outlook. And as NewsGator’s Executive Vice President Sandy Hamilton has explained, “we’ve been building and positioning the company over the past couple of months to take advantage of the burgeoning demand inside of the enterprise.” In step to that end, founder Greg Reinacker has outlined a strong product roadmap to take the company towards offering enterprises a full RSS solution. So while most other aggregator companies are strictly focusing on the consumer space, NewsGator is taking an approach to include both an enterprise solution and media platform in its offering. And with this investment, the company will have the resources to accomplish all facets of this plan. My opinion is that this comprehensive strategy is the right one to capitalize on the myriad of potential customers who can benefit from NewsGator’s technology.
Team. All start-ups need great people to execute on their visionary ideas. After meeting the team at NewsGator, I am confident that they are right people to do it. Brad Feld said, “I’m dealing with A+ folks.” He’s right. Founder & CTO Greg Reinacker is both extremely creative and energetic. CEO J.B. Holston is well-seasoned and experienced to lead. The rest of the team, including Sandy Hamilton and Mark Nass, are top-notch as well. Just one example of this strength is reflected in the fact that a number of them have fully embraced the blog movement, giving this next-generation start-up a genuine transparency.
The combination of these two factors gives NewsGator an advantage that most of the others in the broadly-defined “RSS space” do not. The company is well on its way to executing its vision. For example, Mobius’ Seth Levine points out, “developing strong partnerships with distribution partners (to drive their subscribers/readers to NewsGator’s platform) is a key part of the mix [in setting NewsGator apart].” NewsGator’s recently signed partner relationship with VNU, which will distribute the company’s consumer and business RSS services for seven countries throughout Europe, is just one of many partnership agreements to come. This is just one example of the significant tangible steps that NewsGator is making towards becoming a true success.
In short, I believe in the power of RSS, NewsGator’s vision to capitalize on its adoption & transformation, and the people it has doing it.

David Beisel
April 20, 2005 · 2  min.

BL Ochman is starting a project to track “how long it takes the New York Times to pick up stories from the Blogosphere.” She cites cases of bloggers getting fired for their personal blogs taking five months to hit the press, and today’s article mentioning Electronic Frontier Foundation’s much criticized recommendation that workplace bloggers should blog anonymously taking ten days.
I personally wonder when we’ll now see mainstream media stories about “how Yahoo got its mojo back” after Om Malik and others (myself included) blogged about it a few weeks ago. Yahoo’s impressive earnings today might be the catalyst.
So what does this lagtime between the mainstream media and blog media mean for the startup world? Yes, companies that are ahead of the trends (both competitive and market forces) have the ability to make preemptive moves – that will always be the case. But there are a new crop of companies, like Cymfony, which offer technology-enabled services to monitor the blogoshpere for competitive intelligence. (That company, of course, has its own blog with posts on the subject). Startups that utilize technology to monitor and search (in a structured manner) this online activity could present themselves as interesting investment opportunities.

David Beisel
April 19, 2005 · < 1  min.

The big news of the day is that Adobe is purchasing Macromedia for $3.4B in stock. Fundamentally, this deal makes sense. The core of both of these companies’ products is an offering for the “creative professional” (that’s the Adobe-speak that I picked up while working there a few years ago). Adobe has had success in the past year increasing their top-line through the bundling of their product line; this acquisition will add another set of titles to supplement that bundle. That part of the marriage makes a lot of makes sense – these companies are in the same neighborhood.
The question that I have with the acquisition comes down to culture and strategy. While both of these companies are in the Bay Area, their physical distance mirrors their cultural and strategic differences. Macromedia up in San Francisco and Adobe down in San Jose are worlds apart sometimes. And especially for these two companies. Remember the bitter lawsuit war that these two companies had a few years ago? Let’s just say that tensions ran high and it’s going to take some time internally for the people at these two companies to warm up to each other. More importantly, Adobe CEO Bruce Chizen has publicly stated that the key component of their growth strategy moving forward is around bringing the PDF intelligent document to the enterprise. How does the Macromedia acquisition fit into that plan? I don’t see it, really.
Moreover, I think that Om Malik has it right: these are “two companies who have not kept up with the times… The deal is proof that there is little or not growth organic growth left in the old Silicon Valley. Desktop publishing, and subsequently Web 1.0 publishing are passe… They are becoming increasingly irrelevant in digital worlds where free programs like iPhoto and Picasa are setting the tone on the desktop.” Adobe has missed out on a huge opportunity in consumer digital imaging. Its offering, Photoshop Album, has been edged out by competitors. The problem comes down to culture – it’s just not a place that embraces innovation, especially in the connected online world. The internal Photoshop fiefdom is used to producing shrink-wrapped software, not online services. It “innovates” around a new tweak in the next Photoshop release, not around new product lines or business models.
At least now Adobe is waking up to the fact that it must purchase innovation, not facilitate it. Look for more acquisitions from the Adobe team in the upcoming year, so it can add a few more houses to the neighborhood it’s building.

David Beisel
April 18, 2005 · 2  min.

Last week, I posted my belief that a significant set of New New Media venues are emerging – ads in video games, mobile phones, and DVR/IPTV boxes. Continuing on this theme, I wanted to point out a few interesting pieces that support this assertion:
A Reuters story in which the Yankee Group is quoting an $800M in-game advertising market by 2009. While all industry analysts’ predictions should be taken with a grain of salt, this claim definitely points to the fact that this venue is going to be sizeable outlet for advertisers in the coming years.
– Two articles which point to emerging DVR/IPTV box advertising opportunity. The first is the release of a study by Accenture stating that currently 5% of all ads are skipped by consumers with DVR devices, and that figure could reach 22% by 2009. This effect could cost the industry somewhere in the realm of $27B. Again, what’s important here isn’t the exact figures, but the sheer magnitude or the problem (and opportunity for alternatives). Add into the mix the story of Tivo reportedly in partnership talks with Yahoo and Google. Of course, the two portal giants are looking to have their hand in delivering ads on this platform, however it eventually manifests itself. How that will happen, is still unclear. But what is clear is that linear television advertising is going wane, then fade, and be replaced by a new set of inventory on DVR/IPTV boxes.
Pamela Parker at ClickZ sums it up well in her assertion that, “[it’s] all about… online inventory.” As opposed to the late nineties when the demand for new media was feebly supported, this time around there are fundamentally solid business models and needs supporting the current surge. This demand will continue and soon spill over into New New Media types as they emerge and mature, while “traditional” outlets begin to whither.

David Beisel
April 18, 2005 · 2  min.

Slashdot reports, “Video Distribution Platform Aiming to Kill TV.” The Participatory Culture Foundation (a new funded non-profit organization) is embarking on an open-source project to create a new platform for internet television and video.
While this effort may not kill television as we know it, my summary follows of it a simple equation: Bittorrent + RSS = Next Step in Video Publishing.
Take the power of distributing via Bittorrent technology, which disseminates the file-serving costs throughout the network, as opposed to on the back of the publisher. Then add the power of RSS in syndicating the content through a standard reception channel. The combination of these two creates a solid platform for true many-to-many video publishing. On the consuming end, while it’s not exactly as simple as turning on the TV and watching anything you could ever wish for, this project is taking a step in the right direction.

David Beisel
April 15, 2005 · < 1  min.

Two weeks ago, I wrote a post, “Social Tagging, What to Think?” Since then I’ve begin to come around to believe its power and potential importance in how information and content will be stored and retrieved on the web in the future. What I am still uncertain about is how exactly this notion is going to manifest itself from a geek buzz item into a service that my mother can and would use. And how a company or companies are going to make money off of it.
Today “A-list” blogger VC Fred Wilson posted his reasoning for his investment in, the now famous collective bookmarking site. I think that his fundamental premise is sound: “We believe tagging is important, its here to stay, is a very important participant in the tagging phenomenon, and we are really excited to be part of its development.”
The portion of his post that I think is more interesting reads as follows: “The question everyone asks is ‘what is the business model’. To be completely and totally honest, we don’t yet know. This was a seed investment and none of the investors put up very much capital. Joshua retained complete control of the service and is going to focus on making it better. That is all anyone wants to see happen right now. In time it will become clear what the business model should be. And there are a number of them to choose from for sure.”
Hmm… does this sound reminiscent of talk from the last bubble? Are these Bubble 2.0 words? To be honest, I am still conflicted on the how big this social tagging / social bookmarking / folksonomies “phenomenon” will be and what the right way to approach it is from an investor standpoint. BUT, Fred is indeed a true visionary in the digital media space, and is placing his chips in something that he believes in. That, I can agree with.

David Beisel
April 14, 2005 · 2  min.

This week, CNET released a set of news articles covering the radical shift that television is undergoing. It covers everything from on-demand programming to custom-made home media networks. It provides a good general overview, although there’s not much depth to the coverage.
That being said, I am very interested in the current transformation of how/where/when we receive digital content, both from my own personal consumer interest and from an investor standpoint. Things are changing so rapidly, and the incumbent players and money at stake is so great, that startups entering the fray have a lot up against them. We’ve looked at a number of new companies in this space here at Masthead, but haven’t found anything that we could get extremely excited about – yet.

David Beisel
April 14, 2005 · < 1  min.

Microsoft’s visionary blogger Robert Scoble made waves in the blogophere two months ago by saying, “You should be fired if you do a marketing site without an RSS feed.” He’s absolutely right.
I would go one step further and say that you should be fired if you do a marketing site and you don’t have a coherent incremental content and digital constituency strategy.
Having a sound online communications plan is more than just putting up an RSS feed. It’s more than just launching a blog.
Who are the online influencers in your space? Do they know and talk about your product? What’s being discussed about your company in online communities? How is your company going to not only monitor and measure those discussions, but make an impact in them?
Answers to the above questions will determine whether you create your own relevant content (e.g. blogging), enable others to create it around you (e.g. discussion forums), syndicate it from elsewhere – or some combination of the three.
The right approach is going to be different for every startup. What matters is that the marketing department (or marketing person or a percentage of a founder’s time) is making a deliberate effort to determine the best way to communicate with important online constituencies through the use of incremental content.
And, of course, whatever you decide, you create a RSS feed for everything.

David Beisel
April 13, 2005 · < 1  min.

Are ads in RSS feeds controversial? Hardly.
Today Paul Kedrosky calls the notion that wide-spread adoption of ads in RSS feeds won’t happen “silliness.” I completely agree.
Dave Morgan, the CEO of Tacoda, wrote a great piece last week, “RSS Advertising, Coming Fast.” He concludes, “This [ad insertion in RSS] is a hot space to watch… It will… become an important supplemental revenue stream to a lot of content owners and small publishers.”
Just as there was some initial pushback to ads on web pages and in e-mail, it’s natural to expect some friction with any impending change. The heart of the issue is that free content needs support from advertising revenue to continue. The situation isn’t any different with RSS as it is with any other technology delivery method. In my opinion, there isn’t any controversy.

David Beisel
April 12, 2005 · < 1  min.

RSS isn’t just for blogs. In fact, RSS is for so much more than blogs. Really Simple Syndication is a protocol that can and will be used for delivering any type of incremental content.
On the consumer end of things, there are so many pieces of information that users in the future will be able to receive on a timely basis – audio tracks, announcements about bestselling books, coupons or sales, relevant news articles, etc. The list is nearly endless. (Rok Hrastnik posted a great list of potential ideas of how RSS could be used for a marketing department communicating with its outside constituents.) User-generated microcontent is another great candidate for syndication through feeds. Already users can be updated on answers to questions like “Any good recipes for salad dressing?” and “What should I know about traveling in Australia?” at Helium Knowledge. As microcontent engines develop and evolve towards critical mass, these information nuggets will become increasingly relevant and timely for the end-user. And consumers won’t just receive RSS feeds on their PC, but also on any “connected” device, like mobile phones.
And in the enterprise, the number of use-cases is also lengthy. The NewsGator Enterprise product page suggests that corporate users will receive content from “applications, collaboration suites, content management systems, and portals.” All of that is in addition to outside third-party feeds entering the enterprise.
Others agree – Richard MacManus says, “Initiatives involving structuring or extending RSS will further push non-blog uses of RSS in the coming months.”
Bottom line: While blogging has brought RSS to the forefront, the myriad of other RSS uses will lead the Internet’s transformation towards the true Incremental Web.

David Beisel
April 11, 2005 · < 1  min.