1000 Flowers Bloom

Defrag 2008 - Thoughts on Serendiptiy

I was speaking at Defrag 2008 on the panel about Serendipity. A few things hit me as I have been digesting this panel (and election results) over the last 24 hours.

The definition of serendipity is not well understood. From Dictionary.com:

"an aptitude for making desirable discoveries by accident."

Carla Thompson from Guidewire really pounded on the accident part of the definition and insisted that anything that interfered with accident or the randomness of the desirable discoveries was polluting the concept of serendipity.

As I reflect on this more I think that serendipity is like luck - preparation meeting opportunity.

You can set yourself up for serendipitous events by preparing to get lucky.

A few great examples from the panel from Kevin Marks in the audience:

• Pixar designs its offices in such a way to maximize serendipity (from Kevin Marks on Twitter)
• One of the reasons Google has free lunches is to get people to mingle with random people instead of just eating at their desks.

I think that Aggregate Knowledge is really providing people with the preparation part of having the opportunity to have serendipitious discoveries. The behavioral context that is analyzed and the recommendations which are generated creates the framework and the structure for people to have serendipitous discoveries.

Speaking at University of Missouri School of Journalism Centennial

I'm excited to be speaking at the University of Missouri School of Journalism Centennial next week on September 12th. The University of Missouri is the world's first journalism and advertising school and they are launching the Reynold's Institute - an advanced studies center for innovation in journalism and advertising.

I'll be talking about why Discovery is the next big thing to come after Search and how Aggregate Knowledge is approaching this. If you're going to be there please drop me a line!

Won't you just get acquired?

I admit that I have a weakness in that I check what people are saying about Aggregate Knowledge on Technorati on a fairly regular basis. Usually things are pretty quiet since most our customers are large media or retail companies that don't really blog about their experiences with us, but we do get spikes when we do conferences like SuperNova. We participated in the Connected Innovators session with 12 other companies (one of them fake). Here's a round up by Rafe Needleman and another by Sean Ammirati.

This is my long winded way of getting to a post by Jennifer Woodard Maderazo about the conference. In general her tone is pretty negative and she seems skeptical in general of what's going on. Who can blame her? The Web 2.0 hype machine has been going full blast for two years now. I can't say I disagree a lot with some of her observations.

The piece of her post that I do want to pick on though is a refrain that I have heard from not only her but from many VCs and other industry pundits.  You're a feature not a company. You're just going to get acquired. Here's a couple of paragraphs from her post:

The panel, which included Josh Kopelman of First Round Capital, entrepreneur Julie Hanna Farris, and entrepreneur and blogger Paul Kedrosky seemed to agree with my take, saying that the applications presented were “FNAC” — “features not a company” — likely to fall short of transforming the way people do things and destined to be “merely acquired” by some giant like Google.

I can’t help but think that most of the entrepreneurs in the room would be fine with that. The mass acquisitions of late seem to be fomenting not creativity but a drive to create what’s most likely to get bought.

When you're an entrepreneur you get this a lot from people. In fact, assuming that your idea passes the sniff test of having a decent market  and being executable, the most likely criticism you'll get is that you're just a feature and that you'll get acquired.

Most of the time this criticism is right.

Most companies fail, some few get bought and a very very few will make it and become great companies that transform the way people do things.

The problem with using that generalization comes when you're evaluating individual companies - you'll always miss the great ones if you assume if you apply too tight a filter.

There definitely were companies on that SuperNova stage that are aspiring to change the way that people do things. Companies that won't necessarily be thrilled to get bought. Not all of them will make it but I do salute all the other entrepreneurs for taking a shot at it. Most will fail, some few will get bought and maybe one or two of us will go on to really change the world.

One last thought - I think that all the companies up on stage were less than two years old. Would anyone have predicted that Google would be where it is now back in 1999 when they were a two year old? Weren't they just a feature that would be acquired?

Starting Aggregate Knowledge - The right environment

Yikes - it has been tough to get enough time to blog about this stuff! First post about Starting Aggregate Knowledge is here. I'm going to try and tag all my startup posts with startak.

Along with doing your homework I'd say that another important facet of starting a company is doing it in the right environment.

Paul and I had the good fortune to meet up with the folks from NetService Ventures. We had a memorable first meeting with Ethan and even though I thought he was crazy, we hit it off with them. They have a little office at the corner of Sand Hill Road and Santa Cruz where they managed to cram in a bunch of interesting startup people. They have a great consulting business that pays the bills and they also find interesting small companies to put money into. They currently have 3 venture funded companies that have come out of this little "incubator": Aggregate Knowledge, 3Jam and Zvents.

It definitely felt like we were a garage startup. We squatted in whatever conference room was free at the time and had to move whenever someone needed it. Highlights included trying to do conference calls and having Hiroshi fax things through the same at the same time. The conditions weren't exactly what you'd find in a well running office!

There were a few advantages to hanging out there a few days a week though.

It may not be the case for everyone, but I definitely appreciated having a spot where we could meet regularly that was not our homes. Getting into a regular rhythm for me helped me be very disciplined about getting things done and feeling accountable for making real progress on figuring out the business.

Of course the most important part of our NSV experience was hanging out with great people. It's a cliche because it is true but hanging out with great people elevates your thinking. The fact that the NSV folks are terrific thinkers who would challenge assumptions and occasionally call us idiots (thanks Rich!) is really important in evolving the thinking. It lets you iterate through ideas and discard ones that don't pass the smell test quickly.

Another important factor was having other entrepreneurs like Tyler & Ethan from Zvents and Andy from 3Jam who were going through the startup grind. For example - the fact that Zvents was six months older than us allowed us to observe what was working well and not well for them firsthand. It gave us insights into everything from the funding environment to the mindset of customers, to the hiring environment. I'd like to think that we contributed a little thinking to them along the way as well.

I'm always a little wistful when I think about that time - it was crazy and I was vastly underpaid, the ups and downs were totally nutty but I have to say it was a ton of fun. I wouldn't trade that experience for anything right now.

Why do a B Round for Aggregate Knowledge?

Well as reported in a variety of places (here a few of them) Aggregate Knowledge just closed another round of funding. It's a large one and I wanted to take a second to talk about why we decided to do it at this juncture as I've seen a few people comment on it.

When we started Aggregate Knowledge we had a vision and a plan for how we thought the business was going to play out. As in any A round company we made a lot of assumptions about the future. The reality, as people like Josh Kopelman (an investor) have posted about, is that your business plan is never right. We got our fundamentals correct - we had a great product delivering measurable value that customers were willing to pay for.

What we were wrong about was how quickly the market would move. We believed that the market for Discovery services would take until 2008 to truly come to fruition.

The rub is that it moved FASTER than we thought it would. The Discovery market is here NOW.

The number of customers who are interested is much higher than we anticipated and the hunger for a solution is stronger than we imagined.

Yes, we could have held off on raising money and grown more slowly and organically. Ironically, as an entrepreneur its actually more  tempting to do that, grow slow and take less dilution. You don't look quite as silly if it doesn't work out for you.

It would be the wrong thing to do though. The Discovery market is maturing quickly and even though we are leading the charge today,if we had to start turning down customers it wouldn't stay that way. We need to ensure that we have the resources to address this market as it grows and keep innovating on the service we provide.

We are the leader in the Discovery Market today and we intend to stay there. I think most would agree that's the best of all reasons to raise more capital.

Starting Aggregate Knowledge - Homework

I've been meaning to write about this for a while but being in semi-stealth mode made me a little cautious about it.

After leaving Tribe my co-founder Paul and I knew that we were going to do something but what should it be?

We had observed a lot of trends during our time at Tribe. Including but certainly not limited to:

• The rise of web services and widgets - ala You Tube embedding itself in Myspace pages. Which in my mind was one of the keys to their success.
• The fight between Google/Yahoo/MSN and traditional media online
• A proliferation of consumer focused services with better user experiences like Flickr
• Data Aggregation - Marc Canter's People Aggregator, Simply hired aggregating jobs, Zvents aggregating events.
• User generated content was white hot. Perhaps too hot?
• The low cost of starting and proving out an idea before needing to take funding.

So we started doing some homework.

We started blogging and using wikis. WSFinder is an early incarnation of this homework as is our Web 2.0 Map of the World. I also started SFWIN to understand better what was happening in the startup ecosystem.

Its easy to lose track of what is going on in terms of broader trends when you're consumed with the day to day activities of operating a company and being able to step back helped set the stage.

Aggregate Knowledge at DEMO 2007

I'm excited to say that we'll be demoing at DEMO 2007 in Palm Springs on Thursday, February 1. There should be a video link up a few weeks afterwards.

We are now getting to the point where we can talk about a lot of the work that we've been doing and really start to let the world know what we're all about.

One thing I thought might be interesting is blogging about some of our experiences getting started and funded. I really thought that the series that Munjal did at Riya (now Like.com) was fascinating.

Aggregate Knowledge is Hiring

We're looking for a VP of Business Development and a VP of Marketing.

If you've got a solid track record we'd love to talk to you.

Discovering Content in a Video on Demand World

Mark Cuban has an interesting post up about finding content in an unlimited video on demand world.

In the new world where there are no more channels to guide us he says:

What if there are no linear channels ? With no linear channels, its a mess. Its an expensive mess to promote TV   shows. ITs a mess to find them. Its a mess .

I think he's right. I think it's a problem that Aggregate Knowledge can help solve by letting users discover the shows that other people who have gone before them like. I bet our technology can help create "virtual" channels for users where they can tap into the vein of content that they like most.

Imagine you could see that people who liked this show also liked that show. I think it's a good start to showing you things you might be interested in.

Free Consulting from VCs?

Josh Kopelman writes about how VCs can provide free consulting to startups. I'm starting that process now and I have to say that when the VC is being candid that he is right.

The things I've been hearing during our sessions have all made me think hard about what we are doing and why we are doing it. It's tremendously useful when the VCs pick apart the business and really challenge the thinking. If a VC is being candid with you in their feedback then it's super useful.

I've heard stories from other entrepreneurs where they have been turned down for an investment by a VC but never got the feedback about why that happened. That's just not useful.

It's fine if the VC feels that there is some flaw in the business, whether that be product, strategy, team etc. and decides not to invest. Please please please be honest with the feedback though. Let us know what it was that you thought wasn't working. A generic blowoff doesn't do the entrepreneur any good. Don't worry about hurting my feelings.

If any of the VCs we're talking to are reading this please - if you're going to say no to us, let us know why. You won't hurt our feelings and we'll respect you more the next day.

Full Disclosure - Josh is an investor in Aggregate Knowledge.