VC's + Record Labels = Failure

It's astounding to me that VC's are set up just like record labels are - To fail "most of the time". What kind of business does that? Build themselves in a way that it's expected you will fail 90% of the time? People with money, as I've said before, crack me up because they set the rules. You show up with a business plan and a 90% chance of failure and see how far you get.

I don't really hate the Brittany's and NSync's (Microsoft's and Google's) of the world - they help fund good artist who would otherwise not get a shot at doing much. But I can't help but think if labels (and by extension VC's) would stop signing non-winners to begin with and throwing something out there to see 'if it sticks', the industry as a whole might be better off. Start with a Winner. Start with Talent.

I understand you have to invest in a diverse way, but for crying out loud, minimize your risk! Search for the home runs. I'm surprised VC's just don't invest in record labels - seems they both like to lose money.

I propose those with a true plan, get financed by VC's and those with true talent get signed by Record Labels. Let's cut out the waste.

By offsetting publishing, I can make money for any record label with enough money to invest properly. Hey, that gives me an idea... but then, it just might be successful (and we couldn't have that!)

Bubble, Bubble,...Geez.

Michael Arrington over at TechCrunch has a post entitled "Bubble, Bubble, Bubble" in which he says he believes we're not in a bubble with Web 2.0. I agree, and disagee. This isn't a bubble, this is an extention of Web 1.0 with much cooler heads at the helm and cheaper infrastructure. But still... things could change fast. 1.0 and 2.0 have a lot of similarities.

One example he gave for not being in a bubble is Digg, that ever popular site where you can submit your articles and they are voted up or down depending on how much you're willing to game the system. Arrington says Digg was started for $2,000 and that could be proof we're not in a bubble. But in 1.0 we had Napster which was started in a dorm for what I think, was less than that. Both Digg and Napster ended up taking millions of dollars in VC funding. Could Digg fail? Yes.

1.0 saw copious amounts of "copycat jump-on-the-bandwagon services" started. If something was popular another was started. 2.0 is no different.

Back in 1.0 we had "The Blair Witch Project". In 2.0 it's "Snakes on a Plane". In 1.0 somehow or someway people heard the buzz and went to the site. Today we're led to believe something like "Snakes" could never have happened were it not for blogs. Memories are short, hype last longer - and most of the hype in both cases came from radio and TV telling us how popular these movies had become online, despite not being released in theatres. Does that make "Blair" 2.0?

Back in 1.0 we had buzzwords like "sticky", "network effects", "eyeballs"... that sounds familiar, it's called 2.0.

1.0 was monetized by ads. 2.0? You guessed it.

As noted, it used to take a ton of money just to have the bandwidth to support customers. Nowadays we have places like Amazon helping to subsidize Web 2.0 with their S3 service. Cheap, efficient, worth every cent. That's a big difference.

Today we have new languages everyone has become familiar with, PHP, Ajax, Ruby (and platforms like Rails). We have new tools, RSS and readers. There's 'new' stuff poping up all the time. Or is it old?

Ultimately 2.0 won't ever be a bubble simply by the numbers. It can't because it's primarily online, a huge difference to 1.0 when, as noted in an earlier post, VC's sank $300 million in places like webvan (that could fund 300 Web 2.0 companies and your return would be 100 times webvan. They folded.)

I think really the debate between 1.0 and 2.0 depends on who gets hurt most when a company fails. VC's got slammed in 1.0, as did regular Joe investors. In 2.0, regular Joe's aren't going to get that shot.

Links That Don't Suck

Here's a pretty good site for a list of the various new and old SN sites. It has a list of 380 current sites. Look for your idea for a SN, if you don't find it, good luck - hopefully noone has beat you to it.

Noah Kagan's blog is pretty interesting. He's a VC type - but he writes about a little of everything.

I read this little nugget on his blog, courtesy of Adam Jusko:

Ever heard the advice “Just be yourself?” If yourself is a stammering fool when the pressure’s on, like I often am, do not follow this advice. Instead, pretend.
When faced with a fear you can’t get past, think, “What would Richard Branson do?”

The reason I like this so much as it subscribes to a strong belief of mine, "fake it till you make it - and learn the difference in the meantime".

Adam is a really good blogger - and thanks to him I found some more really good information: First time entrepreneurs get to keep 7-8% of their company when all is said and done? 18-25% should be a minimum. A founder should retain no less than equal the amount of the largest investor. (I'm sure I'll be told this is only being naive and in real life, "things just don't work that way")

And last would be this which shows that some people have way too much money.

Web 2.0 Bites the Big One (someday)

It's funny to look back on your life.

This page was a political page where I wrote all manor of prognostications (over 150) on the heavy subjects of the day, and quickly grew bored. I deleted every one of those post when I decided to utilize this space for something else. Well, every post but two.

Jan 1, 2004. Looking back so much has changed, and so much hasn't. My love of writing has led me to start one of the more popular weblogs in Nashville - NashvilleHype! - it's also led me to want to start this one again, only this time, no politics!

The other thing that hasn't changed; I'm still an 'idea' guy. I have one right now. It's a Social Network and it's in Alpha (meaning it sits in my head). That's what got me interested in what will be the current subject of this blog - all the hip new 'web 2.0' stuff. /turn buzzword off.

Can you still make a billion dollars by starting a SN? I think so. I'm not inclined to believe it's impossible - I think the key now is to do something novel. I know, apparently that's pretty hard to do as places like mashable point out - one copycat after another doing what they were born to do - fail.

How many YouTubes, Digg's, Photobuckets, Slides, et.al. do we really need? Once one goes to the top it's kindof hard to knock it off unless the value proposition is better for the customer - hence the rise of MySpace and the fall of Friendster. MySpace, for all its flaws, turned out to be something people wanted in a User Interface (UI). Go figure. Snap Preview is cool - love that utility - and what (to me) embodies a winner.

One place I like to visit is CNET's Top Ten Dot Bombs. This is where you can find out how much money was spent on loser ideas like Webvan ($300 million), Boo ($160 million), and Go ($790 million) - holy shit! It's a good thing to remember when pitching your idea. The people you're pitching to might be powerful, and they might control the purse strings, but they are far from infalible.

What will happen with my idea for a SN? Well, it's doubtful that anyone will do it. Everyone is looking for riches in a different direction. So it's entirely possible I could make a billion dollars for someone and a little pocket change for myself.

HAPPY NEW ....

Oh, you get the idea. 01/01/04. Amazing! Doesn't seem possible. But here it is. And I hope it's going to be a good one for you.

This new year presents a lot of challenges for me personally. Last year I showcased for music labels in Nashville -- that brought about my quick retirement from music. I say quick but actually I had spent a number of years in the field. It was a somewhat successful run. Few people have the opportunity to do what I have been able to do and I'm grateful for that opportunity. I wouldn't nearly call my run a success, but it certainly wasn't an abject failure. But now what?

That's what I've been asking myself since September when my showcase took place. I have been working on a political book, a screenplay, I own a registered TV show - I write constantly it seems and it's what I love to do. But many of these things (writing books for example) is no different from the music industry. You plod and plod along, continue to write and become better, and then you die - after which you're able to sell something, because people finally recognize your talent.

From this you may assume I have no talent really, but I've written with Grammy winners, and Dove Award winners, and top songwriters in various genres--so it's not as if I'm talentless, otherwise, those people wouldn't have even dealt with me. But what now?

I'm trying to decide. I say, "If I could do research and analysis of various markets, I'd be happy". Or, "If I could be the idea guy at a company, I'd be happy." This last one is more true than the former. But businesses don't need or want an idea man, no matter how good you are at innovation. "So I'll write advertising copy!", but I don't have an English degree, or any degree for that matter. Can't work for those places without one. "I'll freelance articles", but nothing I want to write about really matters-- to even me.

Ultimately, I just want to write. One day I'll finish my political book. One day I'll finish my screenplay. One day I'll write another song, probably a long time from now. One day I may take up art - do paintings and stuff. One day I'll make an attempt to sell my pilot to television.

"I'm still young" I say. But I feel like Hell a lot of times, so I don't know if I will get around to any of this -- I may not be around. But if I'm not around, then at least I will have another chance - like I said, appreciation comes after death for a writer, almost never before.

It's 2004. Maybe this will be the year I figure it all out. Maybe not.

Greats in American History

Bob Bartley, former Editor of the Wall Street Journal passed away recently. He has joined another great mind, Charles M. Shultz, at the big "Common Sense Think Tank" in the sky. These two men were the epitome of what was right and good about America. Both men, shy and effacing, never wanting to hog the glory and preferring to stay in the background, made a lasting impact on countless lives all across this great land - and I dare say, around the world.

Bartley gave us rational explanations on so many topics it's hard to pick a quote that would epitomize his thoughts. He shepherded supply-side economics, a rational for tax cuts that was radical at the time, but proven time and time since to be the right thing for the country. He was relentless in the pursuit of free trade and he felt free people could accomplish anything. He was the consummate optimist, always seeing the upside as opposed to the downside. This of course is speculation but I bet even his bout with cancer, which ultimately took his life, he viewed not as a negative, probably thinking about the millions of dollars his foundation would take in as the result of his untimely death, thereby helping countless others with the horrible disease.

Charles Shultz gave us Charlie Brown, that oh-so-typical kid who could never do anything right, but always had the hope and the optimism of, well, a kid. All or most of my life lessons came at the hands of the Peanuts gang, and more precisely, the way Mr. Shultz lived his life through those comics.

One of the cartoons that epitomizes Charlie Brown is the April 12, 1956 set which has Charlie with his kite stuck in a tree. Of course he's mad, but since there is nothing he can do about it, he decides to spend the rest of his life standing under the tree. Most might see that as a defeated little kid. I see it as someone who says that anything is possible and if he stands there long enough, maybe, just maybe the wind will whip up and dislodge the kite. I'm a maybe person myself.

These two great figures in American history leave a legacy of great ideas, unbridled hope and optimism, and nothing less than the finest writing human kind has ever known. Both of these men have shaped more than one generation of great thinkers. Both of these men are something to aspire to. I hope I can serve them well, and I hope that one day, in the very far future, I too can join them at the Common Sense Think Tank in the sky having completed the mission of making a difference in people's lives.