The Daily 5: Five Topics in 5 minutes or less

The Daily 5 is a new idea with which I am experimenting. The idea formed over breakfast this morning with Christen O'Brien, founding team member and all around awesome human at 500 Startups. 

The Daily 5 will be five topics of the day shared over Meerkat initially and then posted later on the blog. The aim is that each story will be 1 minute or less and heavily related to tech, brand, venture capital and the occasional lifestyle digression. 

The 5 topics today:

(1) Meerkat the brand

(2) The import of the Sandwich Video Fund

(3) Airbnb/Homeaway reality concept

(4) Lean In: 1 major dislike/ 1 major like

(5) LA Tech Eco-system - Christen's perspective 

Video below (note: Meerkat doesn't support landscape mode, apologies for the black bars of death)

What do start-ups and Birdman have in common?

Both are team sports. Both require incredible individual team players who figure out how to work together in a single cut, in difficult circumstances to do something audacious and do it incredibly well. I imagine in both, the teams involved (especially given the technique of Birdman), had to improvise under difficult circumstances to create something singular. 

In retrospect, Michael Keaton’s reluctant quip “Look, it's great to be here. Who am I kidding? This is just great fun.” was one of my favorite moments of the Oscar’s.

For the three of you who did not see the best picture speech (likely because you only put an extra thirty minutes on the DVR record time), the exuberant and eloquent director Alejandro Gonzalez Iñarritu shoved Keaton up to the mic; Keaton said little and looked elated, almost dazed.

Michael Keaton was clearly enjoying the best picture moment as part of his Birdman team. He had lost best actor only moments earlier.

Teams win together and lose together. Ninety-eight percent of the Academy Awards are about individual achievement. Yet, individuals don't make great movies. Individuals will get comments like “X actor did an incredible job, but the plot was convoluted and the other acting was ehh.” The whole point of movie going is to enjoy the entire experience, the amalgamation of writing, direction, acting, editing, cinematography, costume design and the business people who make it all happen.

Birdman may be one of my favorite movies of all time (only time will tell). The script and technique were unique, well executed and incredibly acted. Any one of the component parts- actors, director, writers, composers, etc- could have won an award in my mind (perhaps why I am not asked to vote!).

Much like a start-up, where we revere larger than life founders (or directors/producers), it is about the chemistry of teams (actors, cinematographers, editors, set designers), the way founders, their first set of hires, their next set hires and so on come together to build a company (a movie).

I used to row in college. I cannot imagine winning an award for best six seat. For the boat to win, the company to thrive, and the movie to entertain, the team must win together. Winning as a team also just feels better to me.

Ironically, Birdman is a commentary about the ego and narcissism of an actor and of our society as whole in our “see me” culture. Most of the awards at the Oscars celebrate individual achievement, which is the innocent drug that can drive ego. What I love most is watching the motley cast of talent stand up there together, as a team, having won the award for telling a magical story that takes us to another place.

Why Return to Venture Capital Now?

It has been a little over eight years since I left the venture industry, and I am excited to announce today that I am returning to join Upfront Ventures as a Partner.

During my time away, I have co-headed IAC’s M&A group, led Urbanspoon and Citysearch, and, in my most recent and biggest adventure, launched a start-up, P.S. XO, which has just recently merged to become Seedling. Looking back, these choices may appear to form a path in the rear view mirror, but each new voyage resulted from running down a passion and working hard to see it through. The primary link was my drive to learn new things and help others reach their potential. I have found this flow both in operating and investing.

So why go back to Venture Capital and join Upfront now?

After raising over $10 million in total capital, the new Seedling is on fire. The company is on track to hit $20 million in revenue in 2015, doubling year-over-year. I am grateful to put the day-to-day leadership in the hands of CEO Phoebe Hayman, a uniquely talented operator and data-driven brand savant. The baby that my co-founder Soleil Moon Frye and I created is set up to be a big, important company that aspires to change the way families live and enjoy every day.

With the Seedling day-to-day torch sitting in great hands, it feels like a special and important moment in time for me to become part of what Upfront is creating.  I am excited to come full circle back to VC bringing a sharpened eye for investment opportunities and the perspective I have gained as an operator. 

In Upfront, I have found a firm with values that align with my own combined with a desire to take big bets and enjoy the ride.   I am moved to join a team of operators led by an operator (and my board member) in a market that is not only the 3rd biggest and fastest growing, but my hometown of Los Angeles.  

I have worked in New York, San Francisco and Boston and met incredible friends and operators during those times. I look forward to rekindling those relationships now that I can finally pull up from the day-to-day grind of running a startup full time.

After spending the last decade in the game, I am thrilled to move back to being a coach for others pursuing their dreams.

Goodbye for Now

The time comes for me to say goodbye, but I hope to return again someday.  My stay in the blogworld was short and incredibly gratifying.  I thank you all for reading and welcoming my thoughts, opinions, reviews and rambles (hopefully only occasionally).  In the next couple weeks, I will be joining Interactive Corp’s (IAC) Mergers & Acquisitions group.  Please stay in touch!  I will hopefully have the opportunity to connect with many of you directly to discuss emerging business ideas and models or just to shoot the entrepreneurial breeze.  Possibly, one of my Battery colleagues who is equally excited about digital media may pick up where I left off lest the url sit latent for too long! 

You are with me in my RSS feeds…


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Google Says: I Want My MTV!

What can I say, kudos to Google. For a while it became blogging du jour to take a stab at Google’s video strategy. Some complained the features and functions did not live up to expectations- “the product is delayed…. The content is limited… The player is not working…My account won't authenticate..” Back in January, Andrew Goodman from made the analogy  that Google’s foray into video was akin to a billionaire buying a sports team, a trophy business that serves vanity more than financial profit. Many small businesses praised Google’s aimless “bring your random video here” strategy with their tongue in cheek. This strategy had the nice side effect of providing free bandwidth and hosting to serve up these businesses’ video for free.

And yet as Google’s strategy starts to take shape publicly, it seems to me they are approaching the market with a smart staged approach and a great launch content partner. First, Google’s features are improving, with page layout that makes better use of the page space and adding instream rating and permalinks (similar to YouTube). Second, Google entered the market incrementally, gradually bringing on popular features and new content. Google carefully navigated the copyright waters, brining on clips like The White House Correspondent’s Speech from CSPAN and Pirates of the Caribbean: Dead Man's Chest Trailer from Disney.  Google is increasingly moving users to the video section of their site.  Media companies also seem to trust Google to syndicate copyrighted content over the search giant's powerful network.

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NBC to run TV promos on YouTube

This could also read YouTube sees the fork and takes it! 

When user generated video content comes up in conversation, the question I am most often asked is "What is going to happen with YouTube?" Are the IP/copyright holders goign to sue the video aggregators once they start to monetize content or will they demand royalties?  Will the large media companies allow a trickle of premium content to flow illegially on YouTube as promotion for the more mainstream channels or will they do their best to shut down any illegal copyrighted material?  Is YouTube the next Napster (the first iteration of the company)?

Link: NBC to run TV promos on YouTube.

By Andrew Wallenstein

NBC and YouTube are going from foes to friends.

The network is announcing a deal today that will see select clips of NBC series embedded on the popular viral-video site beginning this week, sources said.

The deal is quite a reversal from the well-publicized conflict that broke out between the companies in February, when peacock parent company NBC Universal ordered YouTube to remove hundreds of copyright-violating clips. A skit from "Saturday Night Live" titled "Lazy Sunday" triggered millions of streams for YouTube, becoming its most popular clip for a time.

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“Web Video Goes Mainstream: Is Your Brand Ready?”

The answer is no for the most part, but people are trying.

I had a chance to speak at the “Web Video Goes Mainstream: Is Your Brand Ready?” conference last week. It bestowed a few pearls of wisdom and edgy speakers, along with the litany of clichés, questions with no answer (e.g., how will YouTube make money?) and humdrum “I come from a big company with a big name who is involved in video on the web in a big way” speakers.

Here’s an idea- after every conference involving video on the web, we should let a panel of attendees from a cross-functional sample set (e.g., agency, brand, internet company, old media company, consultant, investor, etc) rate each speaker. Then we should rank order the companies who have speakers who “get it” and then invest in those companies. My mom used to make investment decisions about retail companies in this manner. She sold off Ann Taylor when she thought the inventory became boxy and matronly and bought up the Gap as they started expanding into Kids/Baby. She did pretty well.*

If we employed my faulty stock buying scheme, I would recommend buying Microsoft, Razorfish/Avenue A and Brightcove (sorry its private, but maybe Diller will float you a couple of his shares). And I would be short Google-- screaming short all the way down the elevator shaft all alone. 

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Storyboarding Video on the Web

Pieces of video on the web info create the storyboard…

Time teenagers spend on the web vs. TV- 3 hours/day for both
Takeaway: If the ratio of US Media Usage to Ad Spending is 2x for TV and 4.7x for Internet, ad dollars have to continue to move.

Akamai used to charge $72 per gig to stream high quality video 5 years ago, 72 cents/gig today.
Takeaway: Moore's Law in the house!

J&J- skipped the up-fronts, but struck an ad deal with Tivo for time shifted ad units.
P&G moved 30% of their enormous annual ad budget from TV to other media.

Takeaway: Brands are starting to shift, but we are only seeing early adopters. These two pieces of information are news, which means the other 498 Fortune 500 are still largely doing ad business as usual.

Recent paraphrased quote from Cadillac’s head of marketing when asked about their video on the web strategy- “It’s a lot of trial and error…" $100M here or there to figure out what works.
Takeaway: Brands are very confused by the fragmented media market. Mass media market has fragmented by channel, time and content type. Advertisers have moved from a world of figuring out how to shave off excesses to building up micro-media audiences. Brands need to figure out how to aggregate audiences on the web. Coke still needs hundreds of millions of people to drink their carbonated goodness. And yet, Coke cannot continue to spend a hundred million dollars on TV and call it a day. But it is hard to spend a hundred million dollars at all on the web, let alone in the day you could do it on TV. Marketers are only just starting to figure out how to buy fragmented inventory.

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The Future of TV

"Here we are face to face, a couple of silver spoons. Hopin’ to find, we’re two of a kind, making a go, making it grow…” Sing it with me. “Together, we’re going to find our way.  Together, taking the time each daaaaay...”  Twenty years ago, I worshiped Ricky Schroeder on my walls, wore his signature crisscrossed jelly bracelets, and never missed my weekly 30 minutes of Silver Spoons.  

If you are Gen X — my people, the remote control generation and ex-lovers of acid wash — rock on, hit the fast forward button three times and skip ahead two sentences!

If you are a baby boomer and know how to use a DVR, pause, rewind, insert theme song from The Andy Griffith Show and say “Now I get it.”

If you are wondering why I was praying to a washed up NYPD Blue actor, grab your iPod, buddy list and use the last fraction of your attention span to play The OC theme song (does it have one?).

Just how big is that gap between TV generations? It’s big and it keeps growing. This could give you a clue: I was speaking to a venerable PR executive recently who relayed a story about a disagreement he had with his teenage daughter. Mid-way through the argument, his daughter said, “Dad, pause, and let’s rewind, I would like to start this conversation again.” Kids today only know a world where they can “start-over.” The     way teenagers interact with video through DVRs and Windows Media Players/Flash is influencing the way they argue with their fathers. And it’s a pretty clear signal that the world of TV has changed forever.

Read on   

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Online Video: Now in Syndication

As I was thinking about a breakfast I had this morning with a rare brain- one that understands macro-economics, emerging media technologies and the traditional agency world, I came across the ClickZ article below.  Both brought me to a similar point-  namely marketing spend is posting double digit growth, but not necessarily in the areas where vcs are putting most of their money. 

For example, online video is still small and large advertisers/agencies don't necessarily get it.  And if they do get it, well they may not want to put their ad dollars there.  Why?  No one was fired for buying IBM (so the adage goes).  When I mentioned this cliche this morning, I was corrected.  Since Lenovo bought a portion of the company, it should now read "No one was fired for buying IBM unless they work for the State Department."  Point being, large advertisers are still only dipping their toe online and while they will get more and more comfortable, online video revenues will not be a deluge.  And yet, the vc community has funded over 180 online video companies. 

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Putting Words in Your Mouth

Everyone knows a market segment is not really a segment until it has an acronym.  The old adage goes- if you don't have one make it up.  ERP was once known as way to manage accounting, manufacturing, hr, etc out of a single system or database.  It became an industry when people stopped knowing what the "P" stood for- planning? production? product? perturbed because I spent $100M on SAP and all I got was this server? Over the years the acronym broke down further into CRM, SFA, SCM, EAI, GL. 

In the great tradition of acronyms, we now have WOM or word of mouth marketing.  Now anyone who likes to talk as much as I do or spent any time as a teenage girl has been engaging in this practice for year- "Hey Sally did you see those fantastic Guess jeans with the purple triangle patch (excerpt from the 80s)?"  If you were a basketball player in the 80s you might have said, "check out my Air Jordans, cool red and black colors and I think I can almost dunk from the free throw line."  Now word-of-mouth marketing is not only seen as a must for marketing new products and services, but an entire industry is growing up around the term, trying to figure out how to create, institutionalize, monitor, and measure word of mouth.  The WOMMA organization, founded in late 2004, was created to support companies "pioneering the art and science of amplifying genuine consumer satisfaction."

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Social Networking is Not a Strategy, But it is an Application

The power of community is now taken as a given as communities like Myspace and Facebook lead the charge with 38M and 10M active users respectively. Simple ad-supported revenue models have emerged. Much like TV networks/programs, the communities with the most scale and active user base (GRPs equivalent) garner the highest CPMs- averaging between $1-$5/user for the different leading communities.

As I mentioned in a recent post, the number of community sites is exploding. I have heard from a few in the trenches My Space users that the site is going a little too mainstream. The aspiring indie musician is a little put off by the huge Netflix banner ad bumping up against their 3 fans in Croatia.

Companies like Bebo (recently funded by Benchmark Europe) is up to 100M page views/day, 30% growth in the last two months. In the past couple months, Bebo has passed Tagged, TagWorld, Buzznet and MyYearbook based on Alexa rankings. Why? The interface is simple, the graphics are better and it has a serious network effect going in the high school community. Users will flock to sites where they can interact with their friends. Closed communities are becoming more attractive as users look to interact with more of their kind. Ex-AOL hancho Bob Pittman recently invested in a company called, an invite only community for the rich and famous. As if Paris Hilton needed another means to meet her Greek or Football throwing boyfriend of the week.

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The One(s) that Got Away: Third Screen Media

I was speaking to Ben Levitan about blogging the other day and he pointed out to me that Bessemer really had the first blog. For years, Bessemer has kept a site dedicated to their “anti-portfolio” or the ones that got away. Every vc does this in an informal way, lamenting the good ones decided not to do or did not pursue preemptively. Some of the more data driven vcs will go back and analyze why they decided to pass on a company that went on to achieve greatness.

 I dare you to look up Cisco or Google in any vc’s database. Actually, most vcs will not have this information in a database (which is fairly ironic since we are a tech loving industry), but if they did, it would either say something serious like “competitive space, concerns about management team, are routers really necessary?” Those with a little humor, who either never got a look at the opportunity or saw the need to alter the past for posterity, would probably have something more like “started by a wacky husband and wife team from a little college named after some guy called Leland Jr.”

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Increased Distribution + User-Generated Content= The Real Four Estate

Stephen Colbert’s White House Correspondent Dinner speech rose to the top of iTunes store over the weekend, as reported by the NYTimes. Colbert’s speech surpassed new releases by bands like Pearl Jam and The Red Hot Chili Peppers. Stephen Colbert, formerly of The Daily Show and more recently of the Colbert Report on Comedy Central, gave a speech in which he took both the president and the press core to task. I personally watched the speech, filmed by C-SPAN, about a week late on Google. C-SPAN ordered video-sharing portal YouTube to take the speech down after claiming copyright violations and instead opted to make the video available for free through Google.

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VOD is Screaming Streaming

Time Warner is very exited about their

South Carolina

and San Antonia trials for their VOD “Start Over” program.  The use case deployed- enabling subs to start a program any time during the program and watch it in full.  So for example, you could turn on 24 at 9:59 and watch the entire show.  It started with five channels to TWC employees and friends in

South Carolina and moved it to 60 channels late last year.  They have found something like 70% of their users are using this feature and using multiple times a day. Oh and Time Warner has deployed technology that prevents ad fast forwarding. The success of these trials proves consumers are willing to watch ads if they can mandate when and where they can access their favorite content. Liberate us from the 9 PM start to 24 (my viewing preferences are becoming clearer) on a day when work never seems to end.

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The Future of Ad Futures

I feel like the web should always create a new term even when an old school business model replicates itself in a virtually identical form. This is why we have “online ad networks” vs. “rep firms”; “in-stream” vs. “commercial break” and Bob Saget’s Americas Funniest Home Videos vs.’s American boy’s funniest home videos.  So let’s talk about web upfronts.  Or what I would like to call video futures. Or how about video straightups in advance?

I do not mean to dwell on linguistics, so let’s get to the topic at hand. The concept of upfronts is moving to the web. I posted about the impact of DVRs on upfronts a few weeks back.  Recently, much has been made in the news about mainstream advertisers like P&G, Gillette and Am Ex shifting dollars to the web. As these advertisers look for insertion spots aligned with premium or relevant content, inventory is still fairly limited. The number of user generated videos served up through Youtube’s 40M streams/day greatly outpaces the number of spots aligned with premium content online.  This is why the online rich media upfront market is maturing  AOL has sold out of its video inventory for In2TV (classic TV shows) for 2006. 

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Even the GOP Wants a Community

Link: News Hounds: If You Can't Lick 'Em, Join 'Em - GOP Mimics

If You Can't Lick 'Em, Join 'Em - GOP Mimics Reported by Marie Therese - May 10, 2006

For years the Republican shills on FOX News have ridiculed and vilified However, it would seem that the Grand Old Party has patterned its most recent outreach campaign on's massively successful concept of the "house party." In what is clearly an attempt to draw in the younger voter, the GOP has set up MyGOP and encouraged Republicans to sponsor house parties. The incentive? A specially designed Republican Party iPod.

I hestitate to put this post in the cool companies segment, but the human brain needs a category (including my own).  Myspace success spawns look alikes left and (a site for high school kids),Bolt (community video site), Xanga (45M users, blogging bent) and now 

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� Google and eBay in Ad Industry Shoot-Out - The 360

Link: � Google and eBay in Ad Industry Shoot-Out - The 360.

Google and eBay in Ad Industry Shoot-Out

A consortium of some of the biggest advertisers in the United States has plans to move the ad industry out the era of the cattle exchange and into the internet age. They’re looking for someone to build an ADSDAQ — an online exchange similar to the NASDAQ where advertisers and media owners can trade.

Google and eBay are the front runners right now — and eBay has the edge. At stake is a cut of the $800 billion total advertising market. Google CEO Eric Schmidt recently boasted that he expects to get his fingers in every piece of it.

Today, at a conference of the Association of National Advertisers, this group, led by Julie Roehm of Wal-Mart, asked ANA members to put up $50 million to test a trading system for traditional media.

Howard Rosenberg, director of trading platforms for eBay, was on hand to demonstrate such a system that eBay has ready to go.

The group, which includes Raymond Warren, president of Carat Media Group Americas, Steve Grubbs, CEO of PHP USA, Ann Bybee, corporate manager of advertising, brand and product strategy for Lexus USA, and Michael Keel, vice president of advertising for Philips Consumer Electronics, looked at four potential partners, including Google and eBay.

But it’s eBay that’s been featured in the dog-and-ponies that the group has presented to the ANA over the last year.

“EBay is more of the pure play,” Warren said, and it has the scale. In his opinion, if the $50 million test went forward, it would go on eBay’s platform. But Keel said that Google still is in the running.

These top advertisers hope to replace the television upfront system, in which advertisers must bid on a year’s worth of broadcast spots each May and June, with a rear-round electronic exchange. Ultimately, they believe all media should be bought and sold through an ADSDAQ. In the short term, they hope to start with less critical buys.

“The upfront is on the tip of everybody’s tongue,” Roehm said. “By breaking it into smaller chunks, [starting with] something less overwhelming than the upfront, we can do it.”

EBay already operates independent auctions for Sam’s Club members to bid on merchandise; the OnePass online auction where Continental Airlines frequent flyers can use points to bid on products; a site the government of Mexico uses to auction off surpluses; and PrimeSeats, an online exchange for event tickets.

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As an old CLEC, deregulated long distance junkie, I have recently rediscovered AT&T. This week, I had the chance to sit down with their Corp Dev and IP TV Groups.  The new AT&T is in fact new, big and all about IP. The company does $86 Bn in revenue, $6 Bn in Net Income.  AT&T operates in 41 DMAs, serve 50M access lines, 54M wireless customers (through Cingular), 110M directories and 500K satellite subs (through AT&T/Dish relationship). The IPTV initiative (either Project Lightspeed if you are an employee or U-Verse if you are press) is the piece of the gargantuan, "most admired" brand I find the most interesting.  AT&T has rolled out the fiber to the home in a San Antonio trial to offer a bundled voice/video offering (IPTV).

As a side, Texas seems to be the hot trial market for IPTV with start-ups like Optical Entertainment Network (building out fiber-to-the-home to 1.6M households in Houston, the 10th largest TV market in the US) and the big guys like SBC going to Texas first due to the recent bill to allow video service providers to get one video franchise for the entire state.

When will other markets roll-out? How many subs will AT&T cover?  How will the offering be priced vs. cable's triple play? How can AT&T strike similarly priced content deals without the scale of MSOs? How much are they spending and where are they building? What does this mean for AT&T's 2wire investment? How is AT&T thinking about digital ad insertion companies/innovation?  Homezone vs. Lightspeed?

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SiliconBeat: Latest VC bloggers: Kara Nortman, Stu Phillips & Josh Kopelman

Link: SiliconBeat: Latest VC bloggers: Kara Nortman, Stu Phillips & Josh Kopelman.

Latest VC bloggers: Kara Nortman, Stu Phillips & Josh Kopelman

Seems like there are more VCs are blogging now than photo-sharing start-ups seeking their capital, which is saying something:

Thanks Matt!  I promise to attempt to keep this fresher than the 18th photo-sharing start-up.  If all else fails, I can always launch a vlogging site.. :)

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