October 04, 2007

The Ebay Skype write down is bad news for venture capital

Since ebay admitted that, really, they messed up with Skype, there is an amusing opportunity for the vcs who passed on investing into Skype 3 years ago due its lack of revenue model to say "I told you so".  It would not be the first time that the vc community thinks its a lot smarter than the listed markets.

But why does the Skype write down worry me? Surely, I hear people say, the vcs shouldn't care. They got in and out and made some good money.

This is quite wrong.

The point is that we will all need to sell a number companies into listed web companies.

We want their acquisitions to make them money so they come back to us for more.

The FT does a good job of comparing the terrible Skype acquisition with the wonderful myspace acquisition which has made lots of money from Newscorp.

A pity they can't all be like Newscorp.

I also think Nic is missing the point.  it's not what you can auction them up to in the short term, it what value these businesses create over the longer term.

I REALLY REALLY hope that CBS eventually turns a terrific profit line from Last.FM .  And I really hope, not that Facebook sells for $10bn but that Facebook creates real value. Real revenues and real profits for an acquiror or for retail investors at IPO.  Without real value being created, over the longer term VCs will be on shaky ground.

October 03, 2007

Apple is the evil empire, stupid

The iPhone will be the nail in the coffin for Apple's credibility.

I have hated Apple ever since I tried to get AAC files to work on a new MP3 player, then a new pc.

I hated Apple even more when I tried to play iTunes tracks in an opensource media player.

Lock-in! Proprietary formats! No flexibility! The bastards.

Yet I was a voice in the wilderness. Whenever I asked either developers or other consumers they loved Apple.  The iPod was a piece of achingly beautiful design. Steve Jobs was cool.  Macs kicked Microsoft's proprietary ass.

The iPhone is changing everything. Developers are beginning to hate Apple and I think consumers will be next.

What's the problem with iPhone?

Mike Arrington at FOWA was half way there today when he said Apple is pissing people off by limiting them to one network.

I think there's a much bigger problem. The genius of the iPhone is that it provides an interface for people like my dad to access and use mobile apps. The problem is how hard it is to do this.

Great technologists like Sutha  are livid that developers can't even officially write to the OS X layer.  They're officially limited to a not-so-rich web-browser in which they can build very simple apps, but that can't take advantage of any of the power of the iPhone. These apps can't run offline, can't take a
peek at your address book, or anything else. They certainly can't do any of the slick graphical things that are making people generally salivate over the iPhone.  You CAN create native OS X apps that do much more but this means hacking the iPhone.

So my dad can have some widgets but they're not really useful.

In essence Apple is going against all the principals of openness and interoperability that so dismays developers and eventually consumers.

And now hallelujah! People are starting to dislike Apple. I am pleased for two reasons:
1)Wonderful opportunities for entrepreneurs.
2) Finally I feel vindicated ;)

September 19, 2007

The Post-Google VC

I have been spending some time with some great entrepreneurs across Europe as part of the FOWA Road Trip and yesterday in Copenhagen was no exception.

In particular it was great spending some time with Nikolaj Nyholm and Nicolaj Reffstrup.

Nikolaj Nyholm made one comment to an entrepreneur which really resonated with me.  To paraphrase:

“You need to raise money from a post-Google VC.  An investor who has lead a company in the last 5 years since Google has been so dominant.”

At one level this is another contribution to the discussion of what makes a great VC (I will leave that one to Fred et al.)

It is, however, of far more significance for entrepreneurs with a web app or offering.

Working for Reevoo and Glasses Direct, both very different businesses, taught me the significance of distribution, and the dominance of Google.  Some examples:

You need first rate SEO?  That will be >£100k p/a for a 19 year old whiz kid.  Someone who will be impossible to manage but can transform your business with organic traffic.

You need to bolster traffic in certain niches?  That’ll be a potentially bottomless pit of adword spending.  (Particularly true if you’re late to a competitive market: look at the differential in adword spend between gocompare, moneysupermarket and confused)

That’s not to mention the possibility of Google using some of their warchest of come after your particular market.

Many entrepreneurs are so focussing on building such a great offering that they also assume virality of distribution is inherent or inevitable.  Unfortunately its not that easy, and Nikolaj is dead right to warn that getting help from people who “get it” is crucial.

September 17, 2007

Calling Copenhagen: Entrepreneurs & Angels

Are you based in Copenhagen and doing something cool on the web? If so come on down to the FOWA Road Trip tomorrow at The DublinerRyan Carson has put together some cracking evenings to date each with a whole bunch of great people. It’s sort of like Open Coffee but with beer, more entrepreneurs, more angels and local VCs (apart from us ).

If you wanna have a word or meet up before hand.  Ping me.

September 10, 2007

FOWA Road Trip - London


We are looking forward to seeing so many friendly faces tomorrow at FOWA RoadTrip London.

Suggestions of > 120 people cramming into the Pitcher and Piano is pretty cool.  We're really excited to be helping out Ryan and the team with the road trip.

I love events like this.  I get to learn so much about what entrepreneurs are up today at the bleeding edge, and I'm constantly delighted to meet so many interesting new companies.  It's at these events where we we get to meet companies we invest in.  I remember meeting Richard Anson from Reevoo at the very first Techcrunch London do in (I think) 2004 (the one where Mike Arrington met Sam Sethi for the first time!). My colleague Frederic Court also met the Moveme guys at something similar.

Please come and say hello if we've not met!