Don Dodge on The Next Big Thing

Bing announces search deals with Twitter and Facebook

Microsoft Bing announced a blockbuster deal with Twitter and Facebook that will bring Real Time streams of Tweets and Facebook updates to Bing’s decision engine. The big news is that Bing will apply ranking, relevance, authority sources, spam and porn detection, and eliminates the duplicate entries. Bing will use lots of indicators of authority. Things like how many followers a user has, how often a tweet is ReTweeted, popular hash tags, etc. Real Time search has been around for a while, but no one has been able to apply all these quality filters so that you actually get useful results.

You can find the new real Time search at www.Bing.com/Twitter

If someone has a lot of followers, his/her Tweet may get ranked higher. If a tweet is exactly the same as other Tweets, it will get ranked lower. Your tweets won’t be included if you protected or deleted them, and tweets don’t last more than 7 days in the index.

Real Time search is in its infancy. Bing has just made a giant leap forward, but there is more left to do. Real Time search will go through the same evolution as text search did 10 years ago. The quality and completeness will improve. The response times and display methods will improve. Bing will learn a lot about how people use RT search over time, and make improvements.

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column. You can also follow me on Twitter @dondodge

Ev Williams on Twitter at Web2.0 Summit

Ev Williams, CEO of Twitter, was interviewed by John Battelle at Web 2.0 Summit. John focused his early questions on a revenue model for Twitter. Ev was fairly evasive and basically gave a very “Craig Newmark” style answer “We are focusing on the user experience and making Twitter a great service.” He did mention that doing something around advertising that takes advantage of the real time nature of Twitter and the analytics of the real time stream to better target ads probably makes sense.

John Battelle asked Ev about Hollywood celebs and professional athletes using Twitter. The NBA has strict rules about how players use Twitter. Ev said he talked to the owner of the New England Patriots (Robert and Jonathan Kraft) about Twitter. Said he totally gets it, but doesn’t want his players using it for fear that they might unintentionally reveal secrets, plans,, injuries, etc that might benefit the competition. The Patriots have a great Twitter presence @RealPatriots , and believe me, Jonathan Kraft gets it.

Ev says the Twitter Suggested User List is going away. It was a temporary fix so that new users weren’t faced with a blank screen. They needed to see a stream of Tweets to understand how they could use it. He said they will get better at customer service, especially by explaining their terms of service, and not blocking accounts for violations. the problem is that users don’t know what they did wrong, and don’t have any way of correcting something they don’t understand.

The top 5 countries on Twitter are the US, UK, Brazil, Japan and Indonesia. Twitter is building a platform. "Most new features are launched with the API first, rather than the actual public facing feature" That is how you build a platform and vibrant developer network.

John asked about Twitter tweets being displayed on Facebook, but it doesn’t work the other way. Why don’t Facebook updates automatically appear on Twitter? Ev said he doesn’t think it makes sense for Facebook stuff to appear on Twitter because people use Facebook in very different ways. Facebook id for communicating with friends, while Twitter is for communicating with a broad public audience.

Twitter Acquisition? John asked about Twitter possibly being acquired by Facebook or Google. The response was smart and insightful. Ev said “There are lots of amazing things we can do with Twitter.It blows my mind what we could do. It doesn't get more amazing by making it part of a bigger company. Wise man. Most young CEOs would take the money (hundreds of millions, maybe billions) and run.

Ron Conway, legendary Angel investor, believes the future is with companies that leverage the real time web, analytics, advertising, etc. For more detail on these opportunities see my earlier post where Ron explains what he is thinking. Here is his top 10 list, ala David Letterman.

Top 10 monetization opportunities in Real Time from Ron Conway (More than $5B of revenue opportunities)

10. Lead generation – Twitter and other apps are great lead generators. Followers broadcast to their followers, etc.

9. Coupons – printed coupons is a huge business, even bigger on the RT web.

8. Analytics of the data – tons of RT data that can be analyzed for trends

7. CRM – Customer relationship Management in real time, using social network apps

6. Payments - like PayPal on Twitter

5. Commerce – selling products, referring products

4. User authentication – verification of users and accounts

3. Syndication of new ad types – There will be innovation in advertising types

2. Context sensitive advertising (Display)

1. Real Time Search – Think Google in real time, filtered by your social graph

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column. You can also follow me on Twitter @dondodge

Marketing as Competitive Advantage? Barrier to Entry?

The tech startup world is all about amazing new technology, innovation, and Intellectual Property (IP), things that create “barriers to entry” for other companies and give you a “sustainable competitive advantage”. Dharmesh Shah and Brian Halligan, co-founders of HubSpot, have just released a new book Inbound Marketing: Get Found Using Google, Social Media and Blogs. The premise of the book is that Exceptional marketing can be a formidable barrier to entry. This is revolutionary thinking for those of us in the high tech world and venture investors. Of course it shouldn’t be. If we got out of the technology bubble for a while we would see that successful consumer products companies are all about great marketing.

Dharmesh explains below how VC investors and most startup entrepreneurs think about technology and competition.

For those of you that are new to the investor game (which is usually where the phrase turns up), “barrier to entry” is loosely defined as that thing which makes it hard for competitors to enter your market and reduce your profits.  In most cases, when VCs ask a startup about barriers to entry, the response usually falls into one of two categories:

Type 1:  We’re doing something that is so hard to do that few others can do it.  This is usually manifests in the form of some intellectual property (IP) like source code.

Type 2:  We’ve got exclusive/proprietary access to some important resource that others can’t get to.  This could be in the form of some product integration partnership (like bit.ly has with Twitter).

Many tech startups build products that make things more efficient, essentially the mantra is “cheaper, smaller, faster, better”. In most cases the reality is that a reasonably smart team of engineers could reproduce the product/service in a relatively short period of time. So, how does such a company stay in business and become successful? The tech world has an obsession with “shiny new objects”. We get excited about new things that do things in a new way. As long as the company keeps developing new “shiny objects” every year the customers keep buying. Most startups fail to keep up. So, what to do?

Build a barrier to entry with Inbound Marketing. HubSpot is all about Inbound Marketing for Small and Medium size Businesses, usually referred to as SMB. Pay special attention to the word Inbound. This is not the traditional Outbound marketing, things like advertising, exhibiting at conferences, Public Relations, press releases, etc. Inbound marketing is doing things to get potential customers to contact YOU. How do you do this? First, read Brian and Dharmesh’s book. Second, take a look at the service provided by their company, HubSpot. Third, read Dharmesh’s blog, especially this post on how to do Inbound Marketing.

Here are the highlights from the post. read the full post to get all the details.

1. Use Pay Per Click (PPC) advertising to bring customers to your web site. 2. Search Engine Optimization (SEO) is really important to get potential customers to find your site through the search engines. 3. Create interesting, compelling, insightful content on your site that engages and educates potential customers. 4. Use social media to build a community around your product/service. Things like blogs, Twitter, Facebook, discussion groups, etc.

Sounds simple, right? It isn’t. It is hard work and requires amazing creativity. Great marketing is just as hard, and just as valuable, as great technology. In this market, with very few exceptions, you need both; great technology and great marketing.

HubSpot announces $16M Series C financing - Led by new investor Scale Ventures (Rob Theis), with existing investors General Catalyst Partners (Larry Bohn) and Matrix Partners (David Skok) also participating. This brings the company’s total venture financing to $33 million.

Disclosure: Dharmesh Shah and Brian Halligan, founders of HubSpot, are long time friends. I worked with Brian at Groove Networks, our offices were next to each other. I also know Larry Bohn and David Skok pretty well. I don’t think these relationships cloud my judgment about HubSpot or the importance of great marketing…but I thought you should know.

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column. You can also follow me on Twitter @dondodge

Boston startup events, resources, people you need to know

If you are starting a company in the Boston area there are lots of resources available to you. Last week at the Mass Technology Leadership Council’s UnConference there were over 40 sessions on startup issues. It was the best opportunity to meet hundreds of people who can help you get your business going. If you couldn’t make it, don’t worry, there are other events happening nearly every week.

I am a big fan of conferences. It is the most efficient way to learn, meet people, and make deals. Everyone you need to know is there and available. Setting up the same meetings separately would take months…that is, if you could get on their calendars. Most of these people do 20 to 30 meetings a week and are scheduled months in advance. It can be tough to get on their calendar. But, when they are at conferences they are open to short impromptu discussions, questions, and can offer helpful advice and referrals. Here is a list of startup events, resources, and people you need to know.

Events

Mobile Monday – Monthly meet-up of mobile and wireless startups, VCs, and tech execs.

Tech Tuesday - is a regular monthly meet-up organized by Dan Bricklin, of Visi-Calc spreadsheet fame. Tech Tuesday is for geeks, tech savvy professionals, DIY-ers, press, and other industry luminaries for an informal gathering. Usually meets at Microsoft office in Cambridge.

Open Coffee - Bijan Sabet & Nabeel Hyatt organize this open meeting for entrepreneurs every Thursday at Andala Coffee House in Cambridge.

WebInno – Boston Web Innovators – Organized by David Beisel of Venrock, a monthly meeting of 200 to 400 startup people, VCs, Angels and tech execs. Free, open to anyone. Startups present / demo their new stuff.

MIT Enterprise Forum - Builds connections to technology entrepreneurs. The Enterprise Forum produces a series of educational programs about entrepreneurship and technology.

BYTE – Boston Young Tech Entrepreneurs – Organized by Will Crawford and Jeremy MacDonald. BYTE Nights are designed to bring together entrepreneurs, investors, aspiring entrepreneurs, and other startup-types in a casual networking environment. No web site. Contact Will Crawford.

DartBoston - a community of entrepreneurs, professionals and students under 30, helping one another start their businesses. A weekly podcast, Pokin' Holes which lets new start-ups solicit constructive feedback from our community. Each show is followed by a wrap cocktail party.

MTLC UnConference Twice a year conference focused on helping young entrepreneurs get started. Hundreds of tech exec mentors help startups with advice and introductions at this unstructured conference.

MITX - Mass Innovation & Technology Exchange (MITX) have lots of great events for technology based startups. Check their web site for upcoming events.

The Capital Network - TCN's network consists of entrepreneurs on their way, entrepreneurs who have lessons and talents to offer and investors who may have themselves drifted across the entrepreneurial line. TCN has 3 or 4 events a month.

The 128 Innovation Capital Group -  The regular meetings are held on the second Thursday of every month at the Best Western Hotel on Totten Pond Road in Waltham. Every month an investor provides our formal program. After Q&A, our speaker generally remains to speak with audience members, one on one. After the meeting, a roster with the contact information of all attendees is made available to those who came to the meeting.

New England Angel Capital Conference - The Angel Investor groups of greater Boston meet once a quarter to review their best companies. Each group nominates companies to present. They are all looking for a round of funding that is bigger than any one Angel Group can handle. This meeting lets all the groups get a look at promising companies and pool their investment dollars.

Social Media Breakfast Boston - Features presentations by some of the country’s most advanced thinkers in community engagement programs - bringing a fresh and wide variety of first hand experiences and case studies.

Nantucket Conference – Small intimate conference in Nantucket that attracts creative and forward-thinking entrepreneurs, investors, technologists, and executives. Much of the value of the Nantucket Conference comes from impromptu hallway conversations, serendipitous seatings at lunch, and walks around town.

Organizations

TechStars - A startup boot camp that provides $25K in funding with lots of mentorship, advice, introductions, and access to investors.

Mass Tech Leadership Council – Conducts educational programs and signature events, networking between industry executives and potential partners, investors, and customers.

Massachusetts Innovation & Technology Exchange MITX brings together digital technology, marketing and media professionals, to engage in what is next for the web and how it impacts the marketing and business worlds. Monthly meetings, great speakers and networking.

Stay in MA is funded by Flybridge Capital Partners and is committed to providing as many scholarships as possible, to Massachusetts college students, up to a total of $10,000 total per calendar year.

Boston World Partnerships - helps business leaders worldwide understand and access Boston's competitive advantages. Members gather and share compelling information relevant to Boston's economy, and benefit by plugging into the global network of high-caliber business people.

TiE Boston – The Indus Entrepreneurs – Conferences, educational programs for entrepreneurs, even programs for high school entrepreneurs. Check their web site for upcoming events.

Resources

BetaHouse Boston – Co-working office space for entrepreneurs.

Cambridge Innovation Center - Flexible office facility for growing technology and life sciences companies. The Cambridge Innovation Center offers start-up and emerging companies facilities and state-of-the-art business and technical services in a package that is cost efficient and scales with the company's growth. Currently, over 175 companies are located at CIC.

DogPatch Labs - created by Polaris Venture Partners to connect entrepreneurs and help founders conceive and launch startups. Offers desk space, bandwidth, coffee and lunch to aspiring entrepreneurs.

Summer at Highland - an innovative program from Highland Capital designed to provide selected student/university-affiliated entrepreneurs with the environment and resources for advancing their startup initiative/company to the next level.

People who can help

There are about 100 people you need to know in the Boston startup world. Going to events and conferences is the best way to meet them. They all know each other and will be happy to introduce you to others you need to know. It can be overwhelming to college students and young entrepreneurs to try and identify all these people and establish relationships. They are all important, but start with this short list. A relationship with any one of them is incredibly valuable. Be very specific about what you are doing and the kind of help you need.

Scott Kirsner writer for the Boston Globe, blogger, conference organizer, and connector. Scott knows everyone and can connect you to the people you need to know.

David Beisel founder of WebInno, VC at Venrock, blogger, and connector.

Bill Warner founder of Avid Technology and Wildfire Communications, angel investor, and driver of TechStars Boston. Bill is truly an angel to startups. very helpful.

James Geshwiler managing director of CommonAngels, conference organizer, and connector.

John Landry, serial entrepreneur, angel investor, conference organizer, and connector. The life of the party wherever he is. Fun guy.

Jeff Bussgang serial entrepreneur, VC at Flybridge, blogger, and connector.

Bijan Sabet serial entrepreneur, VC at Spark Capital, blogger, and connector. Investor in Twitter, with frequent tweets.

Dan Bricklin co-creator VisiCalc, serial entrepreneur, blogger, organizer of Tech Tuesday, book author, and technology wiz. Most modest guy you will ever meet.

Sim Simeonov founding CTO at Allaire, angel investor, board advisor, blogger, and serial entrepreneur.

Shawn Broderick director of TechStars Boston, serial entrepreneur, angel investor, board advisor.

Rich Miner managing partner, Google Ventures, co-founder Android, co-founder Wildfire Communications. Rich is at all the area startup events. Very approachable, helpful, and very connected.

Boston Angel Investors

• Bay Angels - Cape Cod, MA
• Beacon Angels - Boston, MA
• Boston Harbor Angels - Boston, MA
• Boynton Angels - Worcester, MA
• Cherrystone Angel Group - Providence, RI
• CommonAngels - Lexington, MA
• eCoast Angels - Portsmouth, NH
• Golden Seeds LLC - Boston, MA
• HubAngels - Brookline, MA
• Launchpad Venture Group - Wellesley, MA
• River Valley Investors - Springfield, MA
• Walnut Venture Associates - Wellesley Hills, MA

Boston Startup News

Scott Kirsner, a writer for the Boston Globe, and a blogger at Innovation Economy is always organizing and promoting startup events.

Xconomy - Bob Buderi, Rebecca Zacks, and Wade Roush cover Boston based startups, technology trends, and VC investments.

Mass High Tech – A weekly publication covering business news of the New England high tech industry. Doug Banks and Galen Moore do a great job covering technology companies. MHT also has a good calendar of events.

VentureFizz - website where you can find all the buzz around Boston's technology sectors; software, internet, mobile, hardware, cloud computing, security, etc.

There are many more events, organizations, resources, and people to know. This is just a starting point. Please add others in the comments section.

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column. You can also follow me on Twitter @dondodge

Guitar Hero, an overnight success, 10 years in the making

Guitar Hero recently released a new version of their smash hit video game that has sold over $1 Billion. To the casual observer Guitar Hero seems like an overnight success, a stroke of luck and genius. But this is a story of tenacity, strong willed entrepreneurs, and patient, supportive investors. I first wrote this story several years ago when I met one of the founders of Guitar Hero at the Nantucket Conference. The recent release of the game made me think of this post, and how the story is timeless. Here it is one more time.

Eran Egozy, co-founder and CTO of Harmonix Music Systems was on a panel at the Nantucket Conference entitled "Tipping Point: The keys to getting new ideas to take off". Harmonix is the maker of Guitar Hero, the wildly successful video game.

Guitar Hero was an instant...overnight success, 10 years in the making, selling over $1Billion to date. Harmonix was founded in 1995 but Guitar Hero didn't come along until 10 years later in 2005.

What did Harmonix do in the first 10 years? Harmonix founders met at the MIT Media Lab and their first idea was to create new ways for non-musicians to experience the joy of making music. Similar to another MIT Media Lab company called HarmonyLine, this idea never really took off.

Eran joked "For the first four years we couldn't sell anything but stock. We knew that wasn't a business model, but at least we had money coming in to keep us going."

Around 2000 they decided to try applying their music technology to video games. But it was 5 more years until they tasted success. They released eight video games over that period, with modest results. Eran said "The trick in the video game business is to make enough money from your game to keep you going until you can release your next game."

Most new video games don't make a profit. The game business is very much like the music business, or even the venture capital business, in that it is a "hits" driven business. One big hit pays for lots of losers.

Guitar Hero was the 9th video game produced by Harmonix, 10 years after founding the company, and it put them on the map with more than $1 Billion in sales. They recently sold the company to MTV Networks, a division of Viacom for $175M.

iRobot a 12 year overnight success. Colin Angle, founder and CEO of iRobot told a similar story. iRobot was founded in 1990 with the idea of creating robots to do interesting stuff. For 12 years they did projects and built products but never really achieved financial success. Colin said they paid employees once a month at the end of the month. They never had enough cash at the beginning of the month to meet the payroll at the end of the month. But they persisted in their dream.

September 11th 2001 changed everything. They decided to apply their robot experience to help the military in dangerous situations. DARPA, the research arm of the U.S. Defense Department paid out grants to lots of companies to develop proposals for new defense technologies. iRobot won a $200K grant to write a proposal for a battlefield robot.

Colin Angle said the company had never had $200K in the bank...ever. So, rather than use the money to write a proposal they just built the robot. What a concept!! DARPA had a big meeting to review all the proposals from various defense contractors. iRobot showed up with their robot and a tiny written proposal. They won the business and DARPA awarded them a $4M contract to build robots for use in Afghanistan. They have since sold over $150M of robots to the military.

Colin said that iRobot entered and exited 18 different businesses over their 12 year existence before finally landing on the military robot idea. They have since entered the consumer market with robot vacuum cleaners and swimming pool cleaners.

Persistence and tenacity are hallmark qualities of successful entrepreneurs. Harmonix and iRobot are excellent examples of that never die attitude. There is a fine line between success and failure. There is no secret formula or obvious path to success. Just one common trait...an indomitable desire to succeed against all adversity and doubt. Very few people have this drive and the leadership ability to attract great people to their cause. This drive is indefinable but we know it when we see it. It is sometimes misdiagnosed as being delusional and fanatical. The difference in diagnosis is success or failure. Succeed and you are a brilliant visionary. Fail and you are a delusional loser. The line between them is very fine.

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column. You can also follow me on Twitter @dondodge