ItsJustSoftware

Handicapping the operating systems

Time from initial equity funding to acquistion

Interesting post on the Lightspeed blog about the increasing length of time from initial funding to acquisition. (Founders be ready for the long haul).

Jeremy draws the conclusion that founders need to expect a longer trip from funding to acquisition which is no doubt true but the graph presents such a high-level summary that it is really easy to accidentally over-generalize the situation.

The chart suggests that for the last 5 years the "average" acquired company was started in 2000 (basically  a 3/4 day for each day slip).  Since there was a huge bubble of starts in 2000, it is possible that the class of 2000 is still dominating the acquisition charts and that companies started in different cycles (2004-2007) will behave differently. The chart also hides the bursty nature of the acquisition cycle.

I guess it's a good chart if you're in the investment business and trying to defend your falling IRR to your LPs ("hey look, it's not us - it's a macro effect").

AdMob Mobile Metrics - still tons of old school browsers out there

One of the few companies in the valley that is going strong and in growth mode is AdMob where my friend Jason Spero is the VP of Marketing. Their ad statistics are always interesting (AdMob Metrics).

From the looks of things, their mobile ad plaform seems to still be gaining traction (traction is the most hideously overused word in the vc community right now by the way) as weaker competitors fall by the wayside. This seems to be a very classic story in ad companies where network effects accrue rapidly to the leader in a particular vertical once someone gets ahead. It will be interesting to see whether they can maintain this lead as the mobile market becomes less differentiated from the standard web.

That's not happening quite as fast as might be expected - especially overseas. The best mobile browsing device by a million miles is the iPhone but I suspect that even there the mobile browsing behaviors are makedly different than on the PC.

When you look at the other devices in the AdMob metrics report it is clear that there is still a ton of Openwave 6.x browsing going on (and other competitors in that class). It's not surprising if one considers the sheer number of devices with the Openwave browser - we were shipping  over 100m copies per year of that thing in the middle of the decade and it's still being pumped out on a huge number of phones.

Number of devices is a dangerous metric however - there are only 3 or 4 million data subscribers on Verizon for example so even though everyone has a browser on their phone the "switched on" number skews heavily towards smart phones (the Moto RAZR is still the number one device for AdMob ads served but per-capita RIMM, Windows Mobile and Apple are dominant).

AdMob is also serving a lot of ads into iPhone applications providing a very nice alternative monetization scheme - you'll get a couple of orders of magnitude more distribution if you're a free app than a non-free app so shipping free and creating an ad-revenue stream is a great solution for many application categories especially entertainment and games. The only concern here is whether the business is moving "real" ads from brands or whether most of the ads are for other iPhone applications .. we saw that pyramid scheme in the FaceBook platform and that ended in disaster so hopefully that is not what is going on here.

The world now has five major smartphone operating systems - that's going to make for an interesting next few years but the competition will ultimately be great for consumers. How will it all pan out -  that's the subject for another post (or series of posts).

More on the long tail distribution from Chris Anderson

Chris Anderson replies to the claim that the long tail for music might be log normal (More long tail debate).

As Chris points out, the distribution can be badly skewed by the lack of good search or other filters. Unfortunately he also implies that this is a rare phenomena and that more accessible services like iTunes or Rhapsody don't suffer from the same distortions.

Anyone involved in running these businesses would laugh their heads off at this. The unfair advantages that accrue to the most powerful players in any industry - particularly in music - are incredible. In music, the four majors form a virtual cartel and have a corner on the market. They arm-twist the value chain every chance they get. For example, their contracts with the music services guarantee them a percentage of the promotional exposure from month to month which can cause artists to "pop" into the head of the curve.

At the head of the curve, distortions from fame, promotional arm-twisting, external events or many other factors are not really easy to model in practice - these are inherently non-mathematical effects - and this changes the shape of the curve from moment to moment. Perhaps further down the curve where each individual track is less significant, the power law is more applicable.

The bottom line is that you're still screwed if you're not in the head of the curve.

2008 Election Map Cartograms

Incredibly powerful visualizations of the 2008 election results based on population and electoral college votes.

Cartograms of 2008 Presidential Election

The final map showing a gradient of the vote across the country is perhaps the most informative - we've been trained by the media to think of things as red or blue and to store a purely geographic map of the country in our heads so it is amazing to see an almost-organic looking view of the election.

Unlikely we'd ever see these on Fox News - doesn't really fit their world view. Actually, it's unlikely we'd see it on the most left leaning media either since they show that while the background of the country is now basically blue, there are large parts of the country which split the difference (e.g. suburbia).

I suppose it betrays my bias to admit that the first thing that came to mind when I saw the final map was that the red looked like a metastatic tumor that had thankfully shrunk significantly since 2004.

No on Prop 8 March - perhaps we should have done it before the election folks ?

This evening I marched with thousands of others in San Francisco to protest the passage of Proposition 8.

There are some great pics of the crowd at SFist: Prop 8 Protest With Pics

The crowd was loud but well behaved and was surprisingly diverse - there is support for same sex marriage from many segments of society which is nice to see.

You could feel the anger and hurt radiating from the crowd. The reaction to the passage of prop 8 is really snowballing - it is re-energizing the community. That's the silver lining here because the community was definitely caught a bit flat-footed by the "yes on 8" campaign. (Hey, give us a break - we were all preoccupied with planning our weddings this summer!) Even this rally felt reactive ... everyone feels stupid that they weren't marching in the streets BEFORE the election. It feels like we were blind-sided and now we want a re-do without having to wait 2 years.

I am sure we will repeal prop 8 either in the courts or in two years via the initiative process. I actually think we should do both - the legal system needs to address the issue of whether the initiative process can be used to narrow a civil right even if it only impacts a small part of the constitution (case law is not clear on this) but now that the amendment has passed by popular vote, the argument will, unfortunately, not be put to rest in the public's mind until a clear majority rejects proposition 8.

Uh oh, the long tail isn't !

A new study (long_tail_debunked) claims that the long tail is log normal rather than a power law curve which means that it is a lot steeper than people had hoped. If the curve is log normal it means that omnibus Internet services such as iTunes and Rhapsody probably reinforce the market power of the head. Of course, we actually knew this for the last couple of years at Rhapsody (we just didn't tell our PR guys) and anyone who understands the importance of being one of the top 3 links in Google search will be saying "duh" but it was a nice fantasy that the Internet would empower the long tail.

That's not to say that a rising tide doesn't lift most boats as long as they're not too leaky but it does say that if you're marketing something far down the curve, you need to be very specialized and focused in communicating with your audience and not rely on the generalized services to save you.

Prop 8

As one of the four thousand same-sex couples married in San Francisco in 2004 who had their marriage annulled and one of the more than eighteen thousand couples married in the summer of 2008 who must now stand as a beacon of hope for the rest of the community, I want to thank all the people - gay and straight -  who were willing to support the effort to prevent proposition 8 from passing either by taking a stand publicly, by donating or by declaring their opposition privately in the voting booth.

I believe that fighting for other people's civil rights at home or in other parts of the world is a moral imperative even though it often takes us outside our comfort zones and I believe that same-sex marriage is a critical issue for ALL Americans who fight for fairness and freedom.

Liberty and Justice for all.

Separation of church and state.

"Separate but Equal" is NOT equal.

If we only apply these principles when it is easy or when the majority has finally come around or when it fits with the teachings of our own religion or when it directly affects us or our families then they mean nothing. We must fight for civil rights and we must fight hardest when and where a majority of Americans turn from them because of bigotry or fear. 

I am deeply disappointed in all the religious institutions that claim to stand for justice and fairness but instructed their "flocks" that it was "God's Word" that they should support proposition 8 and impose their religious beliefs on another minority. The hypocrisy is simply shameful.

I know that in time more and more people will come to understand the emptiness and hate behind Prop 8 and this injustice will be righted.

Early stage funding in a post-financial crash world

Short answer : there isn't any :-)

The change in investor attitudes between the beginning of October and after the second week of October was really quite amazing to observe from ground zero - it was just bizarre to pitch Sequoia the day BEFORE they told all their CEOs that the good times were over.

It's clear that, at best, most funds have decided to be very cautious about early stage investments until they've stabilized their existing portfolios. The advantage is definitely to the biggest players right now - amazon, google, microsoft uber alles !

First day

It's always weird shifting from being "employed" to being an entrepreneur ... today's my first official day as part of the CloudReactor team and I'm sitting in Jumpin' Java working on the nth iteration of the deck. We're off to a fast start - the company will be officially incorporated today and we're getting lots of help from our networks - Silicon Valley is amazing that way.