graylightning

Blodget's Tree has Money Growing On It

Lots of chatter on the web today about Silicon Alley Insider's Top 25 most valuable digital private startup's of 2008.

While I think there are plenty of points to argue in this list, and initial comments have not hesitated to offer their "fire and brimstone" as Henry Blodget describes, I applaud SAI for taking a shot at some of these, and I offer only two criticisms.

1. Organizations like Craigslist and Wikipedia can not be valued accurately in their current form. To change these community-created and oriented websites into strict for-profit models would fundamentally disrupt the user experience and therefore the user/contributer bases. Because these sites' value is created by their users (not their engineers), changes in the business model would ultimately change the nature of the products. Measuring them on earnings multiples based on hypothetical advertising or paid listings revenues makes about as much sense to me as judging a football player by how many home runs he might be able to hit if he switched to baseball.

2. Some of the higher prices listed should be swallowed carefully.  Many of these companies are still pre-revenue or even pre-business model, as Henry states of Twitter. Therefore, I would expect many of them to be valued closer the "Twitter" level rather than the "Ning" level.

Confucius say: 'One careless VC over-paying, a valuation, does not make.'

Fun stuff - I wonder where the real-time moving index will go.

AdTech, NBC responds to Digital Disruption

This week's AdTech parties kept me groggy enough on Thursday morning not to post on time, but I had a great time meeting lots of heady entrepreneurs still anxious to change some piece of the Internet and busy building their ad networks and publisher tools businesses despite the rumblings in the economy and rumors that Silicon Valley as gone cold to Web 2.0.

AdTech's Keynote speech on Wednesday from NBC Chief Digital Officer George Kilavkof gave us an insight into how the big networks are thinking about the brave new world of digital media distribution.  They're trying to catch up with the YouTube's of the world by finding technology partners for online, on-demand distribution (i.e. Hulu) and speeding up the placement of live programming to keep them up to pace with viewers who record the shows at home and place them online immediately after (Saturday Night Live).

Adam Lashinsky from Fortune magazine did an excellent job of questioning Kilavkof at every turn (do they talk to Fox regarding Hulu content and encryption? Are they still talking to Apple about a return to the iTunes platform? What impact will the Tibet issue have on NBC's handling of the Olympics broadcasts this summer?)

Kilavkof alluded that discussions with Apple over a potential return of NBC TV episodes to iTunes continue but he was hard-pressed to handover any strategic details of NBC's dealings with other companies.

When it comes to opening your mouth in public, there is a major difference between being a start-up in this world and being a public incumbent as the conversation on Wednesday morning reminded me.

George did as good a job as anyone could expect answering pointed questions about NBC's long-term ability to respond to disruptive web 2.0 distribution business models and ad-skipping technology in front of a geeky audience on the edge of their seats hoping for a public company slip-up.

But you could not help but see how a young entrepreneur would have approached the questions differently. Would a start-up be afraid to disclose dealings with another large player (Apple)? Probably not, more likely would proclaim them. Would a start-up be hard-pressed to dodge a question of Tibet? Much less likely, might even take it as an opportunity to grab headlines.

I wouldn't trade my spot in a venture firm or a conceivable spot in a start-up for the rigors of commercial-speak and political correctness that must come with a public company straight-jacket.
Life is short. Much more fun to be disruptive.

Sushi and Curry and Food for Thought

Two weeks have gone by and I've been missing from the blogosphere.

As goes for Brad Feld's blogging habits generally goes for me, absence usually means I'm busy at work or traveling. Right now, its the former. Lots of thoughts on what's going on in the Valley and in my favorite categories, mobile, financial services, and social enterprises which I'll try to post more about this week. AdTech starts tomorrow and I plan on stopping by the exhibition to see what's new in the world of ad networks. And despite Russel Beattie's departure from Mowser today and claim that "mobile [web] traffic just isn't there...and it won't be," I still think there's lots of interesting long-term potential for mobile browsing, particularly in places that don't have, or for people who don't typically use, PCs during the day. These markets may not be as exciting as the lucrative full-fledged web, but they might be sizable markets nonetheless.

But something else caught my eye today - Brad Feld's mom, Cecilia Feld, has an exhibition with photos from trips to Japan and India, two countries on the top of my mind this week after conversations with a friend who's spent a good deal of time in both places.

As she describes it, the countries strike a foreign observer as almost complete cultural opposites. The first being such a calm and methodically organized place, the later, a pressure cooker full of chaos and spontaneity.

Looking to history for the roots of such drastic differences, I would guess Japan's isolation and relative independence from the recurring land conquests for South Asia offer one explanation. India's geographically far-flung populace and centuries of division under alternating foreign occupiers meant it was never really one country but rather always hundreds of splintered groups. What a difference an ocean makes.

And somehow, I'm not sure I'd trade the excitement of India for all the spotless austerity of Japan...food for thought.