MySpace Prevents PhotoBucket users

It has finally happened.

Cartoon: The Eating Life of a VC

Check out this awesome cartoon inspired by my blog post, The Eating Life of a VC. It was wonderful and totally unexpected. It was written by Dawn Douglass and drawn by Keefe Chamberlain. Very cool - thank you!!

Google Free 411

In case you haven't seen it - Google launched a FREE 411 service.

To try this service, just dial 1-800-GOOG-411 (1-800-466-4411) from any phone.

The Eating Life of a VC

It’s true – I had three lunches on the same day. I’ve had two lunches on the same day before, but never three. I didn’t plan it – it just kind of ended up that way.

When I did my startups, we called it the Startup Diet. We spent all our time working. We ordered pizza into the office, stayed till all hours of the night, and if we went out it was for burritos down the street. If you’re an entrepreneur, you’re living this movie right now.

When meetings are your life, however, you spend a lot of time eating out. Tomorrow I have a breakfast, a lunch, and a dinner; Thursday breakfast, lunch and drinks.

Now don’t get me wrong – I love going out to eat. It’s a lot less formal than meeting someone at the office, plus it’s a lot of fun, and I get to buy – something I rarely did as an entrepreneur. But there are three problems.

First, it’s easy to gain weight. Heart disease and diabetes run in my family and I have to watch what I eat. As a marathoner, more weight means a slower time. All in all, it’s bad news.

Second, when I get to the weekend, I’m ruined by the meals I’ve eaten during the week. Kaygetsu? Lunch Thursday. Town Hall? Dinner Tuesday. Buck’s? Breakfast Monday.

Finally, it’s killing my reputation. As an entrepreneur turned VC, I’ve always stuck to my entrepreneur roots. Now I get remarks like, “I see you’re going for the standard VC breakfast of granola, yoghurt, and fruit,” or, worse yet, “Looks like you’re having no problem adjusting to the VC lifestyle.” Any lean and mean entrepreneur will know that these sorts of comments are like daggers through my heart.

Back to my three lunch day. Here’s how it happened. I scheduled lunch with someone I really wanted to meet. I wanted to have lunch because of the less formal setting (plus, I knew I’d be hungry around 11:45). Then there was someone who suggested lunch and I had to meet with that person – so I accepted. The thing I didn’t count on was lunch #3, the surprise lunch.

I intended to meet up with an entrepreneur for coffee after lunches one and two, and, being a little slow due to the two lunches I’d just had, I asked the entrepreneur if he had eaten yet (this was at 2:30 in the afternoon), and he said – no. I admit I didn’t eat a full third lunch – but I did have a few bites – after all, this was someone I respected and I didn’t want him to have to eat alone. But when you’ve already had two lunches, a third one can really cramp your style.

Don’t worry, though. I’ll do my best to live up to your expectations of the VC lifestyle by taking you out to eat at a great restaurant. I do have a weakness for good sushi.

But if you just want a burger, a burrito at some hole in the wall joint, or a beer, count me in. Taco Bell may have coined the term Fourth Meal, but it’s taken on a whole new meaning for me. Just don’t ask me why I’m not eating.

Next time: How to Eat Healthy as a VC.

The Prosper Trendline

Here's a graph of the total value of loans originated on Prosper over the past 6+ months.


I've been an active lender for over a year now. The market has become more efficient but it is still relatively inefficient. In the short-term, that's good for lenders because it causes rates that are higher than they should be. In the long term, of course, the market has to develop further for the loans to get paid back.

What's interesting is that the trend for loans originated seems to be improving.

10/25 - $20M in loans
1/10 - $30M (granted, some of the slowness could be due to the holiday season)
2/27 - $40M
4/3 (estimated) - $50M

Is There an Emotional Attachment on Prosper?
When I first started out, I looked at every loan. Now I have standing orders and barely look at any of the loans.

Prosper has been called the eBay of loans, but standing orders make Prosper very different from eBay in a fundamental way. With eBay buyers are typically looking at items individually. When you're buying a computer, or a GPS or something like that, there's little emotional attachment. But when you're buying a photograph or an antique, there's a very real emotional connection between buyers and the item in question. Buyers look at each item individually. On Prosper, for the vast majority of lenders, I suspect it's purely about return. But that difference might not matter; where there are lenders and borrowers, there's a market. And in this case, it seems to be one that is rapidly getting more liquid.

The New Google AdSense API

Lots of sites have built hacks to split revenue with the authors of user-generated content. Now Google had introduced an effective new way to share revenue with your users. It's the Google Adsense API.

Anyone who does a lot of keyword buying is familiar with the Adwords API. This API lets you programmatically control your ads on Google. Now individual users can associate ads with the content they publish on your site. Sites traditionally have done this by inserting an author's publisher ID for some part of the ads that are displayed next to an author's content, and then inserting the site owner's own publisher ID for the rest of the time. This provides a revenue split between the site owner and the content creator. But now this can be done via the Adsense API.

This will further cement Adsense into publishers' sites.

Google TiSP

In case you haven't seen it, Google has a great April Fool's Joke...

Required Reading...

I had the chance to catch up on a little light reading over the last week: Founders at Work and Mr. China. Here's what I learned.

Founders at Work is inspiring reading about some incredible founders from the past few years and the past few decades. Key takeaways are that it's people first, ideas second; and that whatever the original idea for a company, success will likely be the result of a much different idea.

Successful entrepreneurs have known for a long time that the best way to start a company is to find some good people to work with and then just to start working. The "right" idea often comes about as the result of working on one thing and then solving another problem in the process, or of being in the right general area and nimble enough to switch courses when a new path presents itself.

The trick for investors, of course, is to invest after a few of the experiments have been run but before the successful experiment plays itself out. The great entrepreneurs in Founders at Work were able to run lean and mean while they were in experiment mode and then used capital to move their business forward more aggressively.

Everyone has been talking about Mr. China and it is a great read. It's the story of a former Andersen consultant who moves to China to enter the new world of business there in the 1990's. He teams up with an investment banker and together they invest (and lose) hundreds of millions of dollars. I loved the book but wondered why it took them eight years to learn the lesson, "when in Rome, do like the Romans."

It was also notable that the author was as surprised as he was by the actions of some of the people he invested in, who then set up next-generation, competitive shops right next door or mis-used their investors' money. The entrepreneurs profiled in the book were extremely aggressive, yet they didn't seem that much different from, say, the Intel founders setting up shop after Fairchild, or the Enron execs mis-allocating money from their stock holders and pensioners.

The author comments at the end on how in fighting the day to day battles he became out of touch with the overall evolution of the country. The fact that in the midst of the action it's easy to lose sight of the big picture is, in and of itself, a great takeaway. Moreover, there will always be someone else who neglects the importance of really understanding the local environment and wants to become the next "Mr. China." The author has done all businesspeople a service by sharing the story of his life in China - it's a funny and very worthwhile read.

Social Networks: The New Platform

The big social networks are the new platform. More than 10 years ago, Windows became the platform of choice. It provided core functionality but allowed companies to build a huge variety of applications that extended the platform and cemented its dominance in the market. Today’s large social networks have the same opportunity. The question is, will they capitalize on it?

As I mentioned last August, widgets are the future. They are today’s new applications and they live on top of the existing social networks. They also run within lots of other environments – blogging platforms, open source community systems, and good old web sites. But their real impact is on the large, established social networks.

The great risk and the great opportunity for Windows was that it was a wide open sytem. This caused users (and CIO’s) a lot of angst because it meant users could run just about any application they wanted to – even applications that caused the system to crash or corrupted their data. But the risks far outweighed the benefits. Windows became the standard not because it was a great platform in and of itself but because of the applications it enabled – communications apps from email to browsers to IM, productivity applications, games, and the list goes on.

Today’s social networks aren’t sure what their policy is on being open. So far they seem to be taking a wait and see approach – kind of like the big wireless carriers.

Where’s the line?
As one entrepreneur described it to me, the line is drawn when other sites try to get revenue (in the form of advertisements) directly within an existing social network. It’s ok to let users put a widget on their page that causes the user to click on the widget and go to another site (you know the ones), where ads are displayed or money is collected.

But the social networks do not like it when these same companies show ads or try to collect money within their widgets directly on the social network’s site, without the permission of the social network. That’s where the line is.

What the social networks should really do is open up their sites. As another entrepreneur said, the site with the broadest support for widgets and third-party supplied functionality will ultimately win.

The social networks should also implement a well-defined and supported revenue sharing mechanism. They should try out Microsoft’s old mantra: “embrace and extend.” Rather than challenging the ecosystem, they should support and encourage it – not just by allowing widgets and the like – but by enabling the ecosystem participants to make money (alongside the social networks).

The big social networks are today’s new platform. May the most open one win.