Don Dodge on The Next Big Thing

Parlano MindAlign group chat service acquired by Microsoft

Microsoft announced the acquisition of Parlano, maker of MindAlign, a group chat collaboration service. MindAlign makes it easy for groups of people to form around a topic, discuss it in real time chat (IM), and save the discussion for future reference. Stock market traders use MindAlign to share fast moving market information with their colleagues and quickly form trading strategies. ComputerWorld says;

The application is used by large financial services companies, including Deutsche Bank and UBS, so employees in major cities around the world such as Paris, London, Tokyo and New York can keep track of chat discussions on specific topics that may have occurred even when they were not in the office.

The Emerging Business Team has been working with Parlano for three years to establish a strong Microsoft partnership. First with introductions to the Microsoft Office product groups, and later by including Parlano in marketing campaigns, trade shows, product demos, and partner success stories.

Parlano is another good example of a partner relationship building over time and culminating in an aquisition. Many Microsoft acquisitions start out as partner relationships. Most of you know I worked at Groove Networks (collaboration) where we had a long partner relationship with Microsoft, that again resulted in a mutually benefical acquisition. Onfolio (web research) and Softricity (virtualization) are other examples from the Boston area.

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Paul Graham on Y Combinator - startup incubator

Paul Graham is a serial entrepreneur and angel investor. Paul and Robert Morris founded Viaweb in 1995, the first online web store builder, and sold it to Yahoo in 1998. In 2005 they started Y Combinator, a seed stage investment company.

I got to know Paul personally just recently, after first engaging in a blog debate. Paul wrote an essay "Microsoft is Dead" to which I replied "Since when does growing $4 Billion a year = dead?". It is funny, some of my best friendships have come as a result of arguments and debates. I became friends with Mark Cuban in the same way.

  Y Combinator provides seed stage capital and a 10 week startup boot camp for budding entrepreneurs. At the end of the 10 week session Y Combinator invites VCs and angels to an investor day / demo day. I wrote about the YC demo day a few weeks ago.

Paul is a great guy and has built a huge following in the startup community. I have a lot of respect for him and what he has done. Y Combinator is a great story. Paul agreed to share some details with me. Here it is live and uncut.

When did you start Y Combinator and how did you come up with the idea? 

We started YC in March 2005, after I gave a talk to undergrads at Harvard about how to start a startup.  I realized then that it had been 7 years since we'd sold our company and we still hadn't done any angel investments, which seemed kind of lazy.  So we set up YC as a vehicle for angel investing.  Initially we were just going to do the occasional deal, like other investors.  We were only going to work on this part time.  But once I started thinking about the project I got sucked into it, and our plans became more ambitious.

When did you do the first session? How many companies?

The first was in the summer of 2005.  There were 8 startups in that batch.

How did you recruit the companies for the first batch when YC was unknown?

YC was not so unknown as you might think.  When we started it, a good fraction of hackers had heard of me or Robert.

How many applicants were there for the 1st session?  How many applicants for the most recent session?

There were a huge number of applications the first time because initially we pitched YC as an alternative to a summer job for college students.  We got 225 total.  After that we started discouraging students from applying unless they really wanted to drop out of school, and the number of applications went down to 96 in the next cycle.  It has grown steadily since.  There were 435 for this summer.

How many sessions have you done? How many companies are in the YC alumni?

This summer's was the 5th batch.  We've funded 58 companies total.

Reddit and Zenter are YC success stories. It is still early, but are there others?

Actually Loopt is probably the biggest success so far.  Reddit and Zenter are famous because they got bought early, but there are a whole bunch of companies that could do better eventually.  Six have had series A rounds from big VCs, for example.  Several others have made it to profitability just on angel money.

What kinds of help does YC provide? Legal advice, equity structure, VC intros, hiring, market definition, business models?

This is a long one to answer.  The best place to look is our site.

http://ycombinator.com/about.html

But the two biggest things we do are work with people on their ideas, and help them  raise money from investors.  We also do a bunch of little things, like getting them incorporated, introducing them to lawyers, arbitrating disputes, helping them hire people, etc.

Does YC provide infrastructure during the session? Office space, Servers, Networks, Telephone, etc?

No.  We could easily afford to, but we think this would be bad for them.  Saving people from dealing with legal documents is good, but working in our building or using our servers would make them start to feel like employees.  I think that may be why "incubators" were such a bust in the 90s.

You hold sessions in San Francisco and Boston each year. Any differences in the setup, approach, or nature of companies?

The main difference between the Boston and Silicon Valley cycles is that the Boston startups present twice, once to Boston investors, and then again a week later at our Silicon Valley office.  Otherwise things are much the same.

Are YC companies typically ready for VCs after 10 weeks or are angel investors a better choice?

Angels are a better choice for most young startups, whether they were funded by YC or not.  But there are usually a few in each batch that are ready to raise full series A rounds.

VCs like to invest $3M to $5M, but most YC companies don't need that much. Have you found VCs and angels to fill the gap?

Actually a lot of VCs are starting to invest less.  VCs will do whatever it takes if they like a deal enough, no matter what their stated policies are.  But of course in addition there are a whole bunch of angels that invest in the startups, and these probably account for the majority of the deals.

Has YC had any liquidity events yet? How do you keep score on successful investments?

Four startups have been acquired so far.  Reddit was a merger of two, plus Zenter, plus another one we still can't talk about.  For us, success = the founders get rich, roughly.

What level of involvement does YC have after the three month session? Do companies stay in the area, mentor new companies, come back for advice, stay connected via email and social networks?

We keep doing everything we've been doing, except we don't have dinner every week.  The startups help one another a lot, and obviously this continues too.

I assume you do this because you love building companies, have had success building companies yourself, and want to help new entrepreneurs. Do you think this is a viable investment model? Is 5% to 6% equity enough to compensate for the overall investment risk?

Actually we're doing it more to help the world than individual founders.  We think the world would be immensely more productive if the best hackers started their own companies instead of marching off to work in cube farms.  Think how much more Larry and Sergey did as startup founders than they would have done if they'd gone to work for a big company.  Imagine that multiplied by a hundred or a thousand.

We want to make at least enough money that we don't have to stop. It would be nice to make more, but so far we have no idea whether this would be worth doing from a purely financial point of view. Classic VC funding is a well-understood model.  What we're doing is very different.  We have no idea if it will work.

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Y Combinator accepting applications for Winter 2008

Y Combinator is now accepting applications for their winter start up boot camp in San Francisco which runs from January through March 2008. I attended the Summer 2007 Y Combinator Investor Day recently.

Y Combinator is a seed stage investor with a large network of entrepreneurs, VCs, and all the people you need to start a company. It is hard to explain but it is a cross between a startup boot camp and a traditional startup incubator. The best description of Y Combinator is on its application page.

Here it is in its entirety;

1. If you want to apply, please submit your application online by 10 pm EST on October 11, 2007. Groups that submit early have a slight advantage because we have more time to read their applications.
2. We'll review applications by October 18 and invite the groups that seem most promising to meet us in Cambridge on the weekend of November 3-4. We'll reimburse up to $600 per group for travel expenses.
3. We'll decide who to fund that weekend, and tell you by phone on Sunday evening.
4. Yes decisions will include the amount we'll invest and the percent of the company we'd want for it. We usually invest $5000 + $5000n, where n is the number of participating founders (i.e. 2 founders get $15,000, 3 get $20,000), in return for between 2% and 10% of the company. The median is 6%.
5. If you accept our offer, we'll write you a check immediately for as much as you need to cover your initial expenses.
6. If we invest in you, your group is expected to move to the Bay Area for January through March 2008. (You can of course leave afterward if you want, but it's a good place for a startup to be.)
7. After you're accepted, we'll set up all your paperwork for you, including getting you incorporated.
8. Once your company exists, we'll write a check to it for the rest of the money. You can spend the money however you want.
9. Y Combinator is not an incubator. We have space you can use if you need to, but we expect you to work out of wherever you find to live. It is no coincidence that so many successful startups have started this way; it's the ideal setup for the initial phase.
10. From January through March we'll have dinners every Tuesday for all the founders. At each dinner we'll invite an expert in some aspect of startups to speak.
11. On Wednesday afternoons we'll have an open house at YC for founders who want to demo their latest work or talk about strategy. You can arrange to meet with us any time during the week, but the open houses ensure no one has to wait more than a week.
12. You're encouraged to ask the founders of other YC-funded companies for help. There are now almost 150 of them, and they're usually very willing to give advice or make introductions.
13. About 10 weeks in, we'll organize an investor day at which startups that want additional funding can present to investors. You can of course seek additional funding from any investor whenever you want.
14. YC doesn't really end after three months; only the dinners do. We continue to give advice and make introductions as long as founders need—and so does the informal network of YC-funded companies.

How do we choose who to fund? The people in your group are what matter most to us. We look for brains, motivation, and a sense of design. Experience is helpful but not critical.

Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially.

We're more likely to fund people we know are smart from their submissions and comments on Hacker News. In fact, that was one of the main reasons we wrote it: so that we could get to know people before they applied.

The ideal company would have two or three founders. We'll consider those with four or five. We're very reluctant to accept one-person companies, though we have funded a couple.

We don't expect you to have a formal business plan yet. All you have to do is fill out our application.

$5000 + $5000n is not a lot, but it turns out to be enough. It will cover at least 4 months' living expenses, and that is enough time to build something nontrivial. It's in your interest to take little money in the earliest stages, because you give up less control for it.

The original motivation for Y Combinator was benevolent, but this is not a charity. If our investments pay off, we can invest in more startups, and if they don't, we can't keep doing this indefinitely. So we're looking for startups we think will succeed.

My next post will be an interview with Paul Graham, founder of Y Combinator. I ask Paul lots of questions about how the program works and his philosophy on building startups.

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Mark Cuban says "The Internet is dead and boring" What he really meant was...

Mark Cuban says "The Internet is dead and boring". It is an attention grabbing headline but what he really means is that Internet bandwidth is not growing fast enough to support new innovative applications. The same could be said for cell phone bandwidth and services, Voice over IP (VoIP), video conferencing, etc. Mark's point is that the Internet's full potential will not be realized until network bandwidth grows on a path like processor speed did according to Moore's Law. MySpace, Facebook, and YouTube are cool applications but they didn't push the envelope on technology or innovation, or stretch the limits of network bandwidth or processor speed. This is what Mark means by "boring".

Mark and his partner Todd Wagner founded Broadcast.com back in the 90's, and in 1999 sold it to Yahoo for $5.7 Billion. The idea was to redistribute radio and TV programming over the Internet. The concept was great, and it actually worked. But, the belief at the time was that bandwidth would continue to double every year or so enabling all sorts of innovation. It didn't.

Here is what Mark has to say about Internet bandwidth; "Few people's actual throughput to their homes have increased more than 5mbs in the past 5 years, and few people's throughput (if you don't understand the difference between throughput and the marketed downstream speeds your read from your ISP, you should) to their homes will increase more than 10mbs in the next 5 years. That's not enough to define a platform that allows really smart people to come up with groundbreaking ideas."

Mark Cuban is right, and we see the same problem in the cell phone space. The carriers are dragging their feet, trying to control all the applications, and building "walled gardens" around their users. Just look at all the growth and innovation happening on the cell phone platform in Europe and Asia.

Video conferencing has been around for decades, but it really hasn't taken off in a big way due to bandwidth limitations. Voice over IP (VoIP) is the same story, although we are seeing more of it now that the carriers are involved. Video on Demand works well on cable TV but could open up huge markets on the Internet if there was more bandwidth available.

Cuban's latest venture is HDnet, a high definition TV network sold through cable TV carriers. Mark said in a recent interview; "We have a vertically integrated entertainment company. We make movies; we show them in Landmark theaters; we show them on HDNet; we release them through our own DVD company, Magnolia Home Entertainment, and distribute them through Magnolia Pictures."

Mark Cuban - the next Ted Turner? - Cuban owns the Dallas Mavericks NBA basketball team, is working on a new football venture, and is thinking about buying the Chicago Cubs baseball team. Sports teams create great entertainment content for his vertically integrated entertainment company. Ted Turner did the same thing in building TBS, CNN, TNT, while owning the Atlanta Braves baseball team and Atlanta Hawks basketball team.

Ted Turner bought Hanna/Barbera the Saturday morning cartoon producer for $550M. Ted said other potential buyers saw it only as a library of low budget cartoons that could only be used as re-runs in syndication. But Ted saw Hanna/Barbera as the base content for a new network he would build. He would call it The Cartoon Network and it would go on to make billions for Turner.

Entrepreneurs see things that others don't. At first experts will say it is the dumbest idea they ever heard. But the entrepreneur pushes ahead and makes it happen anyway. Then the experts say, that was simple and obvious...the entrepreneur was just lucky...in the right place at the right time. Entrepreneurs know what I am talking about. It happens all the time.

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Search engine startups - IPO, M&A, or flameout?

The success of Google has spawned over 1,000 search related startups. Search market share is dominated (94%) by the big five; Google 53%, Yahoo 20%, Microsoft Live 14%, AOL 5%, and Ask 2%. That leaves 6% for everyone else. However, remember that "1% of search marketshare is worth $1 Billion". Will any of the 1,000 alternative search engines ever gain 1% market share?

Nitin at Software Abstractions has some thoughts about possible exit strategies for these small search engines. My thoughts? Some of these will be acquired by the big search engines or big content publishing networks. Most of them will fade away. I don't see any of them breaking out and creating a significant stand alone business with the possible exceptions of Powerset, Hakia, and Mahalo.

Charles Knight, keeper of the list of The top 100 Alternative Search Engines has suggested a Universal Interface for all of the alternative search engines as a way to aggregate traffic. There are already lots of meta-search engines, Dogpile is an example, that essentially do this now. They send your query to all the major search engines and present the results on one page. They use only the biggest and most popular search engines, and still they have far less than 1% market share. So, I don't see an alliance of the small search engines working either.

Human powered search, or “pre-created results pages”, seems to be popular now, but it too has been done before. Yahoo’s directory was an attempt by human editors to catalog and classify web sites in the early days. About.com used guides as topical editors to create very rich and useful links to content. Both approaches eliminated spam and SEO tricks.

Mahalo, and others, are doing the same thing today and calling it “human powered search”. Jason Calacanis is a talented entrepreneur, and he has some big backers like Sequoia, Mark Cuban and Elon Musk. If anyone can do it Calacanis can. But, I think history has proven that this approach will have marginal success.

Big content publishers can be very successful with the human prepared search approach. In fact, as readers this is what we expect from them. Be the editors that find and catalog the best content on any subject. They will of course highlight their own content, but that is fine with most readers. This is why I said earlier that some of the big content publishers will likely acquire some of these alternative search engines. It makes sense.

Vertical search - There are lots of opportunities in vertical search such as jobs, shopping, medical, investments, real estate, cars, etc. People search, classified search, and local search are also big opportunities. These are smaller niche markets but attract very high advertising rates. There are two or three players in each of these market segments that can build a reasonably profitable business.

My guess is that most of the alternative search engines focusing on broad web search will fail. A few will achieve some level of success and then be acquired by one of the big five search players or large content publishing networks. Vertical search engines will find some profitable niches.

The big untapped opportunities? Local search, mobile search, and voice search. I think all three of these will converge on the cell phone to create a whole new approach to search, and a new set of winners.

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Web 2.0 = web app + 2 founders + 0 revenue

I was meeting with a very successful VC firm in Boston today reviewing new companies and ideas. One of the partners asked me to characterize Web 2.0 startups. I said, half jokingly, "I think Web 2.0 stands for a web app, 2 founders and zero revenue." But, they all have an advertising model in mind. Read Techmeme any day and you know what I mean.

The Wall Street Journal has a story today "Investors to Web startups: Where's the advertising?"  The story basically says that VCs are nervous about funding anything other than ad supported consumer applications.

Venture capitalists tend to be fans of ad-driven sites since advertising revenue theoretically covers the cost of giving away a Web service free, and free sites attract users much faster than sites that charge money. Such sites are typically also cheap to run because there is often no need for customer-service agents or costs for physical goods. So such companies can have high profit margins if they succeed. Many of today's hottest Web properties are based on the online-ad model, including Google Inc., which pairs ads with search results, and social-networking site Facebook Inc.

Don't get me wrong, I love Web 2.0 apps, social networks, widgets, and UGC (User Generated Content) sites. I use lots of them everyday. But applying a one-size-fits-all revenue model to these ideas is just wrong.

The first thing to remember is that not all page views and users are created equal. Meaning, some page views like SERPs (Search Engine Result Pages) are very valuable and can be effectively monetized with CPC ads, but other page views are essentially worthless or low margin. Simply counting up page views or unique users doesn't necessarily translate to revenue.

There are lots of other revenue models that can make sense for web based applications and services.

Freemium - The Freemium model, upselling from free to premium services is a good model. Many of the widgets provide a free service with options to buy premium services such as more detailed traffic statistics, more powerful services, enhanced customization, or higher levels of service.

Transactions - Direct selling to your audience, affiliate marketing ala Amazon.com, finders fees, or percentage of sales, are all good models for certain types of services.

Subscriptions - Yes, people will buy subscriptions to software, services, and high quality content. There are some great businesses built on subscribers.

Advertising can be a component of any revenue model that includes a large targeted audience, but it shouldn't be the only path. There are only so many ways to split the advertising budget pie...and the big guys are getting most of it. Web 2.0 entrepreneurs need to think creatively about all the possible revenue streams.

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Microsoft Emerging Business Team helps startups build partnerships

Microsoft's Emerging Business Team is led by Dan'l Lewin with a charter to help startups build meaningful partnerships with Microsoft. Dan'l was interviewed recently by Tom Foremski, founder of SiliconValleyWatcher. The video interview is hosted at PodTech.

  In the interview Dan'l talks about  Microsoft's Silicon Valley campus with over 2,000 employees from groups like xBox, Hotmail, TellMe Networks, IP TV, Live Search, and Microsoft Research. Dan'l also talks about how the Emerging Business Team engages with VC backed startups.

The interview runs 12 minutes and covers these and other topics. Dan'l previously worked at Apple and Next with Steve Jobs. He came to Microsoft 6 years ago to build relationships with Silicon Valley VCs and startups and has expanded the role across the USA and around the world.

Here are a few examples of programs and how Microsoft works with startups.

Become a partner. The first step is to sign up on-line as a partner. Microsoft partners are eligible for lots of free on-line training that covers technology, support and business.

Marketing help. Visit the Partner Marketing Center to learn about how you can participate in Microsoft marketing campaigns and resources to help you build your own campaign.

Build your sales channel. Microsoft has a Partner Channel Builder program that helps you find appropriate channel partners and build alliances.

Get free software and support. The Empower Program for ISVs helps new software companies get software, consulting, and MSDN subscriptions for the low price of just $375. The software alone is worth over $10,000.

Join the ISV community. Microsoft has a special ISV Zone for software companies. Find partners, get leads, get beta software, and get involved in the community.

Microsoft Startup Zone. If you are a startup you should visit the Microsoft StartupZone. The StartupZone is managed by the Emerging Business Team which is focused on helping startups build a relationship with Microsoft. The StartupZone includes links to all the partner programs, blogs written by Emerging Business Team business development managers, and case studies on successful partnerships with Microsoft.

TechStars Demo Day - 10 new companies ready to launch

TechStars is a startup incubator based in Boulder, Colorado. TechStars selected 10 teams and provided funding of about $15,000 per team, free office space, operational support, and mentorship from former entrepreneurs and business leaders. TechStars takes a 5% equity position in each company.

The teams presented today to about 50 VCs and Angel investors for the first time. These companies are three to six months old and have two or three founder employees.

EventVue - Social networking for conferences and trade shows. Works like Facebook for conferences, complete with pictures, bios, and contact info. Allows attendees to find each other and network during and after the conference. EventVue gets an affiliate fee for each new conference registration. EventVue is already in use at several conferences. You can see it in use on Brad Feld's blog. Competes with eXtreme Networking and IntroNetworks. Seeking $150K to continue product development.

IntenseDebate - A blog widget that provides threading and organization to comments. It includes a reputation ranking system, moderation tools, usage statistics, and user/topic tracking across multiple blogs. RSS feeds for comment threads or individual users. Supports WordPress, Typepad, and Blogger. Ad revenue model and up sell to premium services. Currently in use on 30 blogs, 500 more have signed up for beta. Seeking $500K.

SocialThing - A consolidated profile page for all your digital content; blogs, photos, music, friends, social networks, and links. Synchronize all your friends on all your social networks, from one profile page. Post pictures or other content once and have them appear on any of your social network sites. SocialThing is also a development platform for multiple social networks. Ad revenue model. Viral distribution through networks, and branded widgets. Seeking $500K.

StickyNotes - A post-it-note type app for Facebook. One of the top 30 Facebook apps. Over 1,700,000 users signed up in just six weeks, and have sent over 4M StickyNotes to date. They are working on several other Facebook apps in related areas. Cost Per Action advertising generating $30K per month. They will also use CPM and CPC in the future. Two developers, cash flow positive, not seeking funding at this time.

Search-To-Phone - Find local products and services by calling Search To Phone. Leave a voice mail asking about a product or service. The request is then routed to relevant local businesses, who respond back to you with information or an offer. SearchToPhone uses Microsoft's TellMe and Gold Systems technologies for voice recognition. They have just signed a deal with Excell Services to process 10 million calls. Ready to launch, looking for more partners, and a small investment.

Villij - A people recommendation engine that analyzes your online content, blogs, and bookmarks to find people of similar interests. When you register for Villij you are presented with a list of social networks, blogs, and websites. You check off the sites you use. Your profile on these sites is compared to other members to find profiles of people like you. Advertising and subscription model. Seeking $500K.

MadKast - A new way to share (push) blog posts with friends. It is a widget that can be placed on a blog to allow readers to send the blog post via email, mobile MMS, or social bookmarking networks, to friends in their network. MadKast also has a widget distribution network for other widgets, and they are working on a blog analytics service. Currently in use on 350 blogs, including Brad Feld, and mine. See the green MadKast icon next to the title of this post. Advertising revenue share model, split with bloggers, They will also charge a premium for the analytics package. Seeking $300K.

FiltrBox - A content filtering service that finds relevant content (blogs, news sites, and other web sites) and delivers it to you via RSS, email, and text messaging. Filtrbox uses topics, keywords, and context to rank relevant content.  There are sliders to adjust the sensitivity or depth of information to filter and retrieve. There is a "thumbs up / thumbs down" voting system to help refine your filter. The system learns what you like. Seeking $500K.

KBLabs - Developers of Facebook apps and widgets. They launched their first application (Wah! Cool) 4 weeks ago. They already have 100,000 users and 1.5 million page views per week. They have built several other apps called Post Secrets, Motivate Me, and Track Bot. Each of these apps has more than 4,000 users and is growing over 100% per week. Advertising model. Not currently seeking funding. KBLabs founders are going back to college this Fall, but will do consulting projects building Facebook apps.

BrightKite - Location Based Notifications via email, IM or SMS. The notifications are all about location or what they call "place-streaming". Streaming content about a "place" from a "place".  Alerts you when friends are nearby, or about great deals at nearby businesses, movie listings, etc. It could be used for conferences, events, bars, parties, or public places. BrightKite is also a platform for other location based apps from third party developers. Advertising model. Seeking $500K.

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Google and Sun release StarOffice in Google Pack

The New York Times shouts "Google goes after Microsoft again" by distributing Sun's StarOffice for free in Google Pack. Mary Jo Foley says "At long last, it looks like Microsoft Office, with its 90+ percent market share,  may get some serious competition."  Dan Farber at ZDNet has a more balanced reaction saying "Over a decade, OpenOffice/StarOffice has not challenged Microsoft’s supremacy, and a free, unsupported version from Google won’t have much impact."

What has changed? Star Office has been around for 8 years and has gained no traction. Sun even made it available for free as open source in the form of OpenOffice. That was 7 years ago. Google will be distributing the same StarOffice that Sun now sells for $70, and OpenOffice distributes for free. Oh, BTW, StarOffice is a 200Mb download...or more depending on your OS.

Microsoft is not standing still. Microsoft Office 2007 is an amazingly powerful product. Microsoft Office is the gold standard for word processing (Word), spreadsheets (Excel), presentations (Powerpoint), and personal databases (Access). The applications work together seamlessly (XML) and the user interfaces are very similar and easy to use. Microsoft Word supports all the popular file formats including save as PDF, OpenXML, and even a plugin for ODF. The new Office 2007 User Interface presents all the features you need in a ribbon format, no more drop down menus.

Microsoft Works is another alternative. It is a fully functional office suite that has shipped on home edition personal computers for years. Works compares favorably with Google Docs or any of the new Web 2.0 office competitors. Microsoft is now experimenting with a free (advertising supported) version of Microsoft Works.

Software + Services - Microsoft has been working hard to leverage the best of client software and web based services into one seamless user experience. Users want to take advantage of the computing power on the desktop for compute intensive tasks like creating large documents and spreadsheets, multimedia presentations, and video editing. There are other times when you want a more lightweight, collaborative, and interactive environment where a web browser is a better choice. Why not create on the desktop and share on the web? Why not collaborate and edit documents on the web and save the changes back to your desktop? Creating a great user experience that is intuitive yet powerful, available online and offline, and synchronized across all domains, is the goal of Software + Services. There is lots of work left to do, but that is the direction.

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Digg-nation is HUGE! Community is more powerful than money or technology

  The Digg-nation caught on to my most recent post "How much equity to investors and employees" and it got Dugg. A Digg user who goes by AlohaMega submitted my blog post and page views immediately jumped to over 30 per minute, almost 2,000 per hour. And this was on a Sunday night at 10:00PM. The traffic continued at about 1,000 views per hour all through the night. This morning it is still going strong. Amazing.

The Digg user nation numbers in the millions. My post was only of interest to entrepreneurs and startup junkies...a pretty narrow audience, and it still got "Dugg" 228 times, and generated over 10,000 page views in just a few hours. I saw two other posts listed near mine that were Dugg more than 1,800 times. Imagine what their page views were. I don't write for the love of links or page views, but the speed and size of the Digg reaction was startling to me.

Kevin Rose, founder of Digg, is well known in Web 2.0 circles. I have certainly read about Digg many times, and have had a couple blog posts on Digg before, but never anything like this. Like lots of social community type services, you don't realize how big they really are until you immerse yourself in it, or get immersed like this.

It is about the community...ask Jason Calacanis - Technology wonks like me need to be constantly reminded it is about the community, not the technology. Most of these Web 2.0 services could be replicated by a few engineers in a month or two. That is the easy part. But building a community of millions of dedicated users can not be easily replicated. Ask Jason Calacanis. He tried to buy the top users of Digg to come over to AOL/Netscape. It didn't work. Community is more powerful than money or technology.

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