Jun 14 2012

User Adoption Bubble

It’s clear that we are in a bubble. I am not saying we are in a stock market bubble, even though most tech investors will agree that private valuations are frothy and that this frothiness is caused by the bubble in which we are in, a user adoption bubble. Where it used to take a long time for people to adopt a new technology, now new products and services gain more users faster than ever before. It took decades for traditional telephone companies to get a signification penetration rate, were as mobile carriers already have garnered an estimated 97% penetration rate in the United States. A similar user adoption rate acceleration can now be experienced by startups that execute well, Facebook has a stepper adoption curve than Yahoo did, and Google Plus had a steeper adoption curve still for its number of Daily Active Users. Products that execute well, such as Instagram, can see an adoption rate that is appealing to investors. An increase in user adoption rate, especially at the 1 million to 50 million user accounts, and a decrease in the cost of running a startup has been a key factor to the trends we have seen in Silicon Valley. The formula, as demonstrated by Instagram, is simple; small team + millions of users = a billion dollar valuation.

Even though some social networking related startups have seen user fatigue, I don’t see or expect the user adoption bubble to burst at an industry level any time soon, especially for well startups that consistent execute on user engagement and amazement. At the individual product or service we’ve already seen where companies have faltered, such as the reports that Draw Something has seen a significant drop in daily users.

The user adoption bubble has been brought on by a number of factors including the ubiquity of internet access, growing number of smart devices and inexpensive computers, as well as social engaging techniques such as poking, liking, following, retweeting, pinning, etc.


Jan 16 2011

What I Wish I Knew When I Was 20

One of my favorite podcasts is Entrepreneurial Thought Leaders put out by the Stanford Technology Ventures Program. Entrepreneurial Thought Leaders is a lecture series with guest speakers from across different fields and industries. David Heinemeier Hansson of 37Signals, Mark Pincus of Zynga, Robing Li or Baidu, Steve Ballmer of Microsoft, and a great many of other founders, entrepreneurs have spoken at Entrepreneurial Thought Leaders. So when Tina Seelig, the person that runs the Stanford Technology Ventures Program, came out with a book I knew to put it on my Amazon wishlist. Sadly no one bought me anything off my wishlist so I bought it myself to read over the winter break.

A lot of the stories and lessons Tina dives into in What I Wish I Knew When I Was 20 she talks about lectures she gave back in May 2009 and in April 2006 at Standford’s Entrepreneurship Corner.

In What I Wish I Knew When I Was 20, Tina gives some important lesson on creativity, opportunity, and having the right attitude to invite both creativity and opportunity in what you are doing. For example, she speaks of having her students develop failure resumes and to highlight lessons learned from making mistakes. Her reasoning behind failure resume can best be summarized by the following quote from her book.

It’s a quick way to demonstrate that failure is an important part of our learning process, especially when you’re stretching your abilities, doing things the first time, or taking risks. We hire people who have experience not just because of their success but also because of their failures.

Aside from taking risks, and not being afraid of failure, she speak a lot of about having the right attitude to invite the correct atmosphere for success. A persons perspective is important to success, in one because each person defines what they consider a successful venture. Like in the movie The Social Network, where the Sean Parker character says “A million dollars isn’t cool. You know what’s cool? A billion dollars is cool.” For some people success is defined by having 500 million obsessive-compulsive users, and for others it’s about having 1000 paying customers. It is often the case that people let others define their success, but the truly successful are those that define their own success. And defining success has a lot to do with a person’s values and attitudes.

I took a lot of value away from What I Wish I Knew When I Was 20. For example, create a failure resume in Google Docs. I’ve also learning to try to negate the effects of negative thoughts, especially when trying or learning something new.

Here are some choice quotes from What I Wish I Knew When I Was 20:

  • Problems are abundant, just waiting for those willing to find inventive solutions.
  • Steve Jurvetson, a partner at the venture firm Draper Fisher Jurvetson, describes failures as the secret sauce of Silicon Valley.
  • Students are told that it is much better to have a flaming failure than a so-so success.
  • On reflection, there appear to be five primary types of risks; physical, social, emotional, financial, and intellectual
  • Experts in risk management believe you should make decisions based upon the probability of all outcomes, including the best- and worst-case scenarios, and be willing to take big risks when you are fully prepared for all eventualities.
  • Being too set on your path too early will likely lead you in the wrong direction.
  • Planning a career should be like traveling in a foreign country. Even if you prepare carefully, have an itinerary and s place to stay at night, the most interesting experiences usually aren’t planned.
  • The harder you work, the luckier you get.
  • Even when we think we’re paying full attention, there’s usually so much more to see.
  • I realized afterward that thinking about how you want to tell the story in the future is a great way to assess your response to dilemmas in general. Craft your story now so you’ll be proud to tell it later.
  • A few years ago I took a creative writing class in which the professor asked us to describe the same scene twice, the first time from the perspective of someone who has just fallen in love, the second from the point of view of someone who has just lost child at war.
    You shouldn’t take yourself too seriously nor judge others too harshly.

Nov 18 2010

Predictions 2011

Just like opinions, at the end of the year everyone has their own predictions for the new year. I came to these predictions by reading the back of caps of green tea bottles. If you like to see my accuracy with past predictions see the predictions for 2009 and 2010.

  • Mark Zuckerborg will be summoned by congress for a congressional hearing to clarify privacy settings and violations when some White House intern force checks in the President at a Hooters.
  • Digg will buy Reddit from Conde Nast and rebrand the merged organization as Reddigg.
  • DVDs and Blu Rays sales will slow as users switch to on demand streaming service such as Netflix and Apple iTunes.
  • Groupon will be purchased by Yahoo for $1.5 billion dollars.
  • Facebook will have a major privacy and security flaw but non of its users will notice because they all found a pony in their stream.
  • Google will allow its developers to only use cheap commodity Linux machines. Google employees will no longer be allowed to program in Macs.
  • Google will start to aggressively push and market the Go programming language as an replacement of the Java programming language in the enterprise.
  • Google will buy PostreSQL.
  • Google will buy the Library of Congress.
  • Quora will buy the domain ask.com.
  • Ticket Master will buy Eventbrite.
  • Rupert Murdoch will sell MySpace for $35 million.
  • Mashable will be sold to Rupert Murdoch for an undisclosed $50 million dollars.
  • Michael Bay will write, Steven Spielberg will direct, and Johnny Deep will star in Zynga: The Movie.
  • Zynga and Rock Star Games will co-develop a crossover game called Grand Theft Auto: Farmville.

Oct 27 2010

Random Thoughts October 2010

No explanation required, here are some random thoughts that occurred to me during the past month. These ideas were either to long to force into 140 character limit of Twitter but not fully develop to belong on their own post.

In the computer world, Bill Gates will always be remembered for Windows and the blue screen of death. Now that he has moved his attention to education and health care such as vaccines, a blue screen of death in these fields will can really cause someone dying.

If your enemies enemies are your friends, then it is to Microsoft’s interest to see Facebook get into the search space. It makes sense that Microsoft would pay a ridiculous amount of money for the tiniest fraction of Facebook just to see Facebook’s value go through the roof and branch into search, ads, mobile, etc.

I just started noticing people I follow on Twitter start using a new service to take and share their pictures taken from a mobile device. There are already a ton of other services such as Twitpic, Facebook, Flickr, Mobile Me, etc. I consider myself an early adopter, but I think there is a new category of adopter, the “I’ll try everything adopter.” There is a bunch of folks that suffer from the New and Shiny Syndrome where they must try every single new product or service they hear about. They all rave how much better that new product is on Facebook and Twitter for a week and then the herd moves on to the next new and shiny thing.

Every year there are a few companies that everybody wants to work for. It has been reported in many news outlet that there is a micro-brain drain at Google as engineers are migrating to Facebook. Zynga has also seen a tremendous growth and has been attracting talented developers, designers, and engineers. Both Facebook and Zynga are already large establish companies. If you are looking for the next breakout company I think you should look into Second Market. Second Market is building a marketplace for employee stock to private companies, Second Market is building a new market and perhaps a new industry. Second Market is has the potential to eventual be at a level to create or move markets.

Microsoft is anywhere between 5-10 years behind current market leaders in social, search, mobile, internet television, digital music, etc. They only consumer technology that they have a leg up on the competition is gaming with its XBox console system. As Microsoft keeps missing each industry boat in the consumer space, Microsoft more and more starts to resemble a company that only sells to large companies. For example, it took Microsoft a long time to get the security in Windows OS right (from XP to Vista to Windows 7) and all along the missed the mobile as a platform.

Twitter and Facebook need to come out with a year-end zeitgist for 2010. Google has been releasing zeitgists for each year since 2001, see the Google Zeitgist Archives. From Twitter I want to know what event was the most tweeted about, what was the hottest trending topic for the year, and a graph of the number of tweets throughout the year. From Facebook I want to know how many likes does it take to reach the center of a Tootsie Roll Pop, who do they sell private personal data to the most, if they fixed the broken fence that let out all those sad malnourished cows.


Oct 25 2010

US Patent: Virtual Currency

Zynga is one of the fastest growing social gaming companies. Zynga is the maker of compulsion loop filled social games such as FarmVille, CafeWorld, and Mafia Wars. These games have proved to be like crack for people bordering on obsessive-compulsive disorder. Now Zynga has patent the novel idea that has been around for decades of virtual currency. Zynga’s file to patent Virtual Playing Chips in a Multiuser Online Game Network. They claim that real money can be exchanged for virtual currency. The virtual currency can be used to purchase virtual goods between any two users. A user can be credited or debited virtual goods based on the outcome of events in games. The virtual currency can’t be exchanged back to legal money.

There are, and have been for a long time, games that thrive because of the virtual economy built into the game. Games such as Second Life and World of Warcraft, which have been released since 2003 and 2004 respectively, depend on virtual currency to a large degree if you want to get far in the game quick. Within these games you can virtually work and earn currency or simply buy in-game money to buy virtual property such as a house or armor or whatever you like. The maker of Second Life have gone as far as to name their currency after themselves, the Linden Dollars. According to Wikipedia, in 2009 the Second Life economy grew to to half a billion dollars!

Outside video games, virtual currency has been used in real life scenarios such as at amusement parks and or places like Chuck E. Cheese’s or Dave & Buster’s. Chuck E. Cheese’s has game chips that you purchase with real legal tender while Dave and Buster’s uses smart cards to debit and credit in-store currency. In both franchises, the in-store currency can be used to play games priced using the in-store virtual currency. Two users can exchange and gift the in-store currency and based on the results of such game you win points that can be used to purchased goods.

All of their claims have been around for years and have been implemented in a variety of systems for years. Another real life example is iTunes. At most retailers, people can purchase iTunes gift cards. The virtual value that can be redeemed from a given iTunes gift card is usually given at a rate of $1 iTunes dollar to $1 real dollar. But some retailers, such as Costco has rates of $1 iTunes dollar to less than $1 dollars. The iTunes gift card will be used to credit a user with some amount of value which can later be used to redeem virtual goods such as songs, movies, and apps through iTunes, the online network application.

Outside of games that force you to tend to virtual crops for virtual money, in other words virtual share cropping, virtual currency has been used to control runaway inflation.


Oct 15 2010

Google Has Lost It’s Focus

Has Google lost it’s focus? It sure sounds like when you take into account all the investments that Google has made recently, such as investing in social game developer Zynga, a myriad of wind and solar energy projects, and even in DNA analysis outfit 23andMe. But nothing can be further from web search and a self driving autonomous vehicle. You may ask, what does developing an artificial intelligence for a driverless car have to do with Google’s mission of indexing the world’s information. Another question is why wouldn’t Google leave autonomous terrestrial vehicles to the military, or Ford.

Most Silicon Valley pundits have been predicting that Google next project would be Google Me, a social networking site to compete toe to toe with Facebook. But no one predicted these investments outside of search, ads, and mobile.

Over the past few administrations, federal funding for the National Science Foundation and NASA have been cut while military spending has increased. Maybe Google is the new NASA. They are funding and starting projects usually considered the realm of large federal agencies such as NASA or DARPA. What other areas of scientific research will Google fund or get into next?  Will Google invest in unmanned aerial vehicles, much like the MQ-1 Predator?

I wouldn’t be surprised to learn that Google was working on a Googlenet artificial intelligence engine and robots powered with the Android platform.