Thursday, December 21, 2006

Widgetbox Syndication Metrics

Widgetbox just released an analytics dashboard for widget developers. It is free and comes with every widget on Widgetbox.

The release further positions Widgetbox as the leader in the web widget space and as the backplane for syndicating, publishing, and tracking the widgetsphere. Since launch in October, the company has served 8.7m widgets to date and the widgetsphere (check home page for real-time data updates), the total number of widget instances syndicated via the service, is growing by over 40% month over month.

With these metrics, you are able to:
  • Assess the popularity and effectiveness of your widgets at a fine level of detail.
  • Track the spread of your widgets across the Internet.
  • See who your biggest users are, as well as the most influential users (those driving the most new subscriptions to your widgets).
  • You do not change your widget’s code or think about metrics in advance. Existing widgets automatically take advantage of it.
  • It’s automatically available for all current and future widgets registered on Widgetbox. There is no separate sign-up necessary.
  • The data is retroactive from August 2006. You can see the usage statistics of your existing widgets since the day they first appeared on Widgetbox.
  • It’s free as part of the platform. There is no extra charge.
Developers can analyze widgets by these key metrics:
  • Subscriptions - A “subscription” occurs when a blogger or web page owner personalizes a Widgetbox widget and gets it for their web page.
  • Hits - A ‘hit’, or page view, occurs when a web surfer views a web page with the subscribed widget on it.
  • Referrals - A ‘referral’ occurs when a web surfer viewing a web page containing your widget clicks the ‘Get Widget’ button underneath the widget. This takes them to the widget’s home page on Widgetbox. At this point they can themselves subscribe to the widget.
  • Conversions - A ‘conversion’ occurs when a person who has been referred to a widget subscribes to that widget.
Congratulations to the Widgetbox team on providing widget developers the visibility and analysis required in serving the distributed web via a widget strategy.

Tuesday, December 19, 2006

Architected for Openness

Earlier this year, I wrote a post titled Innovation Happens Elsewhere.

The post, inspired by a quote from Bill Joy, argues that no company owns a monopoly on talent and innovation. As such, businesses need to be designed to leverage the innovation of others. Certainly the multiple benefits - cost, innovation, wealth - driven by standards and open-systems speak to the value of building businesses that are premised on the axiom of distributed innovation.

The atomization of the web is well underway. Standards and protocols are enabling end-users to consume services and content on their terms. Companies are realizing that "off-domain" consumption and service/content syndication leverages the optimal mix of consumer preferences and technology.

As an example, in Q306, GOOG's Q306 total ad revenues were $2.66bn, of which $1bn came via non-GOOG domains, or 39% of the total. The rise of GOOG gadgets, Windows Live gadgets, web widgets, etc reflect a creeping realization that no matter how large the brand it is impossible to keep users on a single domain. JavaScript-integration represents the lowest common denominator for the adoption and usage of a given company's services. Like AdSense, it is critical that web companies allow users to consume web services at locations and in the form of the consumers' choosing.

In many ways, DVR, RSS, personalized home pages reflect the demise of the top down architecture that requires program managers and companies to produce, edit, and package content and services on the users behalf. Whether time shifting, JavaScript-service integration, customized feed readers, users are rewriting the rule book regarding how they expect to be served. Today, companies that are architected to be open and to leverage distributed innovation and consumption are architected for success.

Standards and technologies are allowing for a free market, where users are in control. If we consider "openness" a virtue and the "right" side of history, then similarly we can point to "closed" walled garden strategies as being on the "wrong" side of history. We can easily compare and contrast the vibrancy of the PC web with the backward nature of the mobile industry. In mobile, gate keepers, lack of standards, fragmented platforms, massive porting costs, and a subscription mentally are robbing users and the market of the opportunity for innovation, new services, and wealth that are the treasured hallmarks of the PC-based web.

Command and control economies fell victim to the simple fact that central governments are incapable of making better decisions than millions of individuals exercising their personal preferences.

Today, an "iron curtain" mentality still exists in certain industries. The PC web is quickly creating a new digital divide - one between the consumer utility of an open ecosystem and the crap available from product managers at Verizon and AT&T, who are working with their OEMs on what will be "best" for us.

Eliminating friction points that frustrate the freedom to choose when, what, and where to consume represents not only a worthy goal in itself but more importantly recognizes that it is impossible and unwise to under estimate the individual's desire to define utility.

As entrepreneurs think about architecting start-ups for 2007, I suggest thinking about how to best facilitate atomization, syndication, user-defined utility, and the advancements of others.

Thursday, December 14, 2006

Presenting to Win

The first material step in the fund raising process is the "VC pitch."

The VC blogosphere is full of sage advice on presentation templates and structures. Given the vital importance of clearly articulating the value and merits of a business, however, I continue to be amazed by the lack of preparation, clarity, and "aha!s" in the average pitch. As Eminem says, "you only get one shot!"

The presentation, for better or worse, is the medium via which investors evaluate the merits of a company's market, position, and attractiveness as a possible investment. Given the importance of the "pitch," it pays to spend lots of time drafting, refining, and practicing the presentation. Which brings me to the subject of this post...

Jerry Weissman's great book, Presenting to Win, is a practical how-to guide on the "art of telling your story." The book is the culmination of several decades of coaching technology companies and legends on how best to connect with audiences and effectively communicate ideas. His past clients include Sequoia, CSCO, Yahoo, MSFT, and many others.

I suggest ordering the book and include a short synopsis below:

Five Presentation Sins
  1. no clear point
  2. no audience benefit
  3. no clear flow
  4. too detailed
  5. too long - what he humorously refers to as (MEGO, or mine eyes glaze over)
I like the last one, ie, "man, that guy mego'd me."

Point A and Point B
As you walk into a meeting, room, the audience is mentally at "point a," or their starting point. They have preconceived ideas, experiences, and world views that define their starting point. The goal of ALL pitches is to move them to "point b," or to your objective.

As you think about how best to move them to Point B, remember the golden rule - "WIIFY", or what is in it for you, with "you" being the audience. The WIIFY is the "so what" takeaway.

Understand your Audience
Who are they?
What is their knowledge level?

External Factors
What are the exogenous variables that will impact the audiences' reaction to your message - both positive variables (tail winds) and negative variables (head winds)?

When, where, and how will you present (av tools, internet access, room size, etc)?

Opening Gambit
Seize attention and the stage via an opening remark. Wiessman suggests using a question, factoid, anecdote - a vehicle that forces attention on you and gets the audience thinking about the subject matter in question.

Flow Structure/Metaphor
Use an organizational metaphor to structure the presentation - ie Letterman Top Ten List, compare and contrast, rhetorical questions, etc.

The above is merely a snapshot of some of the ideas. Communicating vision, ideas, value, etc is not easy, particularly in a world of information overload, too many meetings, blackberries...

If a start-up idea warrants your blood, sweat, and tears - it warrants an investment in time and practice in order to "present to win."

Wednesday, December 06, 2006

When it Goes Right, What Does It Cost to Build a Great Software Company?

(Click on picture to see data)

What makes software such an attractive area to invest?

Capital efficiency married to the potential for fantastic outcomes.

While the companies above are the 1990s Hall of Fame, the data is still instructive for those of us building software companies and thinking about the time, capital required, and revenue ramp profile of when it goes right.

  • Median Capital Raised: $10.1m
  • Median 1st-4th Year Revenue Ramp: $.1m $.8m $6.9m $21.6m
  • Median Years to Exit: 4
  • Market Comps: Massive variance
  • Lesson:
    • Pricing discipline is critical as multiples at exit are impossible to forecast and may not be consistent with market multiples at time of funding
    • With market pricing impossible to forecast, capital efficiency is critical
  • Software model supports the creation of great companies on <$15m of capital