Bulldog Financial’s Bullblog

I know that’s it’s been a while (about 7 months) since I last blogged, but this is an event that has brought me out of retirement. South by Southwest, more commonly known as SXSW is a two-week juggernaut of an event held in Austin, while the University of Texas kids on on Spring Break. The SXSW conference is split into three distinct but overlapping sections - Music, Film and the most important to me, Interactive. SXSWi is unquestionably the Superbowl of tech related events in Texas. It’s a five day bacchanalia of 5000 (I hear 2008 has 8000 registered) Web luminaries, New Media Mavens, Web Designers and general tech geeks drinking Shiner and Twittering each other silly in between attending panel discussions. This will be my fourth SXSWi and I’m very proud to say that I spoke at the one in 2005 with my friend Blair Garrou of the DFJMercury VC Fund. Since a friend of mine, Imelda Bettinger (an accomplished photographer and Twitter Meetup planner) asked me to talk her into going this year, I put together a few links in an email that will hopefully help sway her decision to come up to Austin:
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I’m really glad that you are going to try to make it, since it’s going to be a blast. SXSW is pretty overwhelming and there is no way that anyone can do it all. I would suggest going with the flow and don’t hesitate to leave something if you don’t think it’s worthwhile. Here are three SXSW guides that should help you figure how to maximize the experience:

http://cruftbox.com/blog/archives/001488.html - short and sweet

http://www.jwphill3.com/2008/02/24/beginners-guide-to-sxsw/ - detailed and very good

http://www.airbagindustries.com/archives/airbag/hampton.php - long, but a bit negative in my opinion

As far as parties go, the best place to check them all out is on http://upcoming.yahoo.com/group/3519/ and http://www.facebook.com/s.php?n=-1&k=400000010&q=sxsw#

Here are two sites you should be on http://www.sxswbaby.com and http://sxsw.ning.com

Three parties that are not on the official SXSW radar, but you should definitely attend are BarCampAustinIII, Ewan Spence’s SXSW Social Media Breakfast and Laura Mayes and the Sk*rt ladies are putting on a coffee meeting at 9am on Sunday at Austin Java in Downtown. They haven’t put out the invite yet, but I spoke with her about it yesterday.

I also think that you’ll probably want to join the Worldwide Flickrite meetup on Saturday:

Not that you’ll get to do everything you want or planned, but this is a good start.

There is this little gadget that no one seems to be talking about from an obscure technology company called Apple (formerly Apple Computing) named the iPhone. I am not going to buy one for a variety of reasons - cost, locked carrier, EDGE internet - but it is undeniably a cool device. It is also a “game-changer” in terms of what it means to the consumer electronics industry, even in the very first day of it’s release. The hype surrounding the iPhone is arguably well-deserved, but no other company on earth could produce such a vortex of public interest and media coverage. I have heard rumors that Apple will sell 1 million units this weekend alone at a unit cost of $500 or $600. Whether that is true or not, the fact that that idea is even plausible is a testament to how large Steve Jobs “reality distortion field” is in the scope of the business and popular culture.

Because I wanted to check out the hype for myself, I took a little field trip to three places in the Houston area selling the iPhone.

The first was the Galleria Mall - I got there around 1:30 and found the line around the Apple store wrapped around center walkway all the way to the elevators - about 90 people overall. I ran into a friend, Imelda Bettinger, who took this picture of me on the phone with Ed Schipul who was traveling and needed someone to buy him an iPhone (Imelda ended up doing Ed the favor). I sent a message that the Apple employees were shutting down the store at 2pm and Dwight Silverman picked it up in his blog.

I then went by the big AT&T store on 59. There were maybe 40 people camped out at 2:30pm with lawn chairs and umbrellas in the heat of a Houston summer. There were also two live camera trucks - ABC 13 and NBC 2 with some on the spot reporting.

By the time I got to the Meyerland Plaza AT&T store, 25 or so people had already set up on the sidewalk. I left around 5pm and the mood was upbeat, especially when they saw several boxes of pizza being delivered.

I went home and had to watch some of the live coverage over the internet - most notably the Higginbothams and iJustine in the Mall of Americas. After a quick trip for gelato with the family, I dragged them back to the Meyerland AT&T store so I could actually play with the phone itself. It worked as advertised from the moment you pick it up. The learning curve is effectively zero. My wife, not the most technically oriented, even remarked that it was cool and the interface was intuitive - which was a pleasant surprise. By 7:15pm they were completely sold out which indicates that the 1m unit number might not be so far off.

Overall, I thought it was fun to be a part of a historic moment in consumer electronics history, but I still think that I’m going to wait for version 2.0 before I buy one.

Houston Chronicle Moneymakers

I was interviewed by our local paper and it came out mostly accurate. I am not a “Venture Capitalist” in the strictest sense, but I am an Angel investor - otherwise the article was all me. I don’t think that I came across as too arrogant or too flippant but you be the judge:

Business
“I’ve come to learn that it’s much better to be really smart in one small niche, rather than be kind of smart in a lot.”
KEVIN FUJII: CHRONICLE

June 26, 2007, 8:16PM
Moneymakers
Five questions with Marc Nathan
Failures help this venture capitalist
By BRAD HEM
Copyright 2007 Houston Chronicle

In an era when technology startups are constantly trying to convince the masses that their new Web site, gadget or software is the next big thing, the first person they need to convince is often someone with money, someone who can invest a few hundred thousand or a few million to get them to the next step.

Someone like Marc Nathan.

After college Nathan went to work for Houston-based ClearWorks.net, providing high-speed Internet connectivity and on-demand video rental for neighborhoods and businesses.
When League City-based Eagle Broadband purchased ClearWorks in 2000 for $137.5 million in stock, Nathan got a “decent payday.”

Since then, he has become a venture capitalist, using his money and that of his friends to help make the dreams of inventors and innovators come true — and make more money.
Although some venture capitalists do only multimillion-dollar deals, Nathan’s firm is still growing, and he focuses on investing up to $500,000 in startups.

Nathan spoke with Houston Chronicle technology reporter Brad Hem about what gets his attention and what new CEOs should never say when they’re hitting up potential investors.
Q: How does someone become a venture capitalist?

A: The very best way to make a small fortune in the venture business is to start with a large fortune. I wasn’t that lucky. I don’t have a rich uncle. I really cut my teeth on doing small investments with many different investors into dot-com deals. I wasn’t particularly a dot-com player, but everything back then was a dot-com deal. I had been there and done that at such a young age. One of the investors on that deal who we were lucky enough to make a ton of money for asked me to look at another deal, and it cascaded from there. What I do is find businesses that need help, and I help them by finding investors that want to help them. I get intimately involved with the companies themselves and grow either their sales, their marketing, their PR, their investment profile, and then manage my personal friends who are the investors, making sure that what they bought is what they get.

Q: What’s hot now? What’s getting your attention, and on the flip side, what won’t you touch?

A: There’s a great deal of biotech in this town. That’s not for me. I’ve done a few biotech and life science deals, but they’ve never turned out all that great. I’ve come to learn that it’s much better to be really smart in one small niche, rather than be kind of smart in a lot. I’ve got one company here in Houston that I love called Podcast Ready. It’s obviously a podcast-oriented company in new media. I tend to focus on what’s called Web 2.0 and new media. Web 2.0 is a conglomeration of a lot of ideas. Essentially to me it means user-generated content on the Internet. I’ve sort of established myself here in Houston through pure dumb luck as sort of the expert to do those sorts of deals.

Q: You must get a lot of cold pitches. Do those turn into deals or are you more likely to seek a company out yourself?

A: I do both. Just today alone I had three separate pitches. I tend not to do deals with companies that pitch me cold. Most investors don’t for obvious reasons. What I tend to do is get pitches from trusted sources.

Q: How do you decide what’s worth investing in, what’s going to stick?
A: A lot of it is based on very extensive experience. Writing checks and having them lose — that’s what tells you what’s right and wrong. Those failures actually give you the experience to know what’s right and wrong. Listening to the same story this month of the same guy who gave you the same story last year that didn’t work makes you understand a little more about the world.
You never know if something’s going to be a true success until you get the checks written. All of them have potential to become tremendous successes. The other side is you never know which ones are failures until they declare bankruptcy. Out of 100 deals that you look at, you’re looking at getting involved with maybe 10 of them. If you get involved with 10 of them, you know that maybe one is going to be a home run that’s going to make up with nine either total losers or deals where you get your money back. We are looking for blockbuster deals.

Q: Are there red-flag words that companies say when they’re pitching you? What should pitchers never say?

A: No. 1 is ‘I don’t have any competition.’ When I hear that, my shutters go up. I put the note on the door that says closed for business. When somebody says that, it means two things: They don’t know who the competition truly is, or they don’t have any competition because nobody wants what they’ve got.

No. 2 red flag is you tell me your numbers are conservative. I automatically cut them in half anyway, so we could go around in circles. At the end of the day, don’t tell me anything. Just show me what you’ve got.

And No. 3 — and there are so many of them — but No. 3 is probably saying that you as a management team or CEO are going to be with the company for the life of the company. The opposite of that is telling me that your CEO is going to step aside when more talent comes on board.

brad.hem@chron.com

When Google bought a company called Keyhole and integrated it’s library of satellite maps into Google Maps and launched Google Earth, it was a ‘game changer’ in the geolocation and location based service industry.

Finding interesting anomalies and strange items in Google Map images has become a hobby for many people and lists like this and this can be found all over the net.

Since Google has given the maps away for free (OK, ad-supported) - their maps and resolution have become the baseline for how most of the world perceives the online mapping world. There are of course other alternatives and premium paid services that have much higher resolution and therefore more information. One example that I stumbled upon (but not StumbleUpon-ed) was this company, Pictometry, that takes oblique, or angled pictures at high resolution.

The difference between free and paid can be summed up in this brilliant billboard promotion that we would unfortunately never see in Google:

This is Google’s Image. You can tell it’s a billboard from the shadow it produces.

This is Pictometry’s Image. You can read the billboard which clearly states: “Play Tic-Tac-Toe With A Live Chicken” Now that’s the level of information I want to see.

I was fortunate enough to attend the first meetup of MamaDramaConQueso - a very nice blend of the Houston Chronicle MamaBloggers and .

It was focused of course on the mommy bloggers, but a handful of men (and Houston Internet Celebrities) were in attendance including: Ed Schipul, Lawrence Simon, Ed T., Robert Nagle , and the Houston Chronicle’s own Dwight Silverman.

It was Dwight’s blog post listing all of the major local Houston technology community meetups that alerted me to the event in the first place. I am very proud to say that I have either attended or been part of the planning committee for every one of these events, except Science Cafe - something I hope to fix in September. I’ve always thought that Houston had a vibrant tech community, but local awareness of events like this has hampered our growth.

The event itself went very well, with lots of interest being generated about forming a new organization for Texas bloggers. I was able to meet and chat with one of the co-hosts - Laura Mayes who launched a “Digg for Women” called sk*rt with smashing success early last week. I was happy to see that she had the opportunity to speak with the OpMom founders Carrie and John Pacini.

Although I’m a dad and a semi-competent blogger, I’m not a DaddyBlogger by any strech - but I was very glad to be able to socialize with this terrific group of MommyBloggers and I’m looking forward to the next one.

I’ve been thinking about spam recently as I’ve been making the slow change from Outlook email to Thunderbird forcing me to reset my spam filters. Whether it’s online, on the phone or in the mail, managing spam has a cost. I want back all of the microchunks of time that it takes to decide what to do with spam once I’ve determined it was in fact spam. I want back all of the delete key presses and I want back all of the missed opportunities due to false positives. Since I’ll never see my wasted productivity back, I want to advocate a new idea on behalf of future spam victims. I think that we should consider reclassifying an obvious spam violation as “Attention Theft” and prosecute it the same way we would any other petty theft. I know it’s not much of a deterrent and that enforcement would be extremely difficult, but it might stop otherwise “good” people from engaging in the practice if they knew there were legal consequences. This would also give some protection to the Opt-in people whom I regard as the white-hats in the broadcast messaging business. Just a thought.

We’re going for the second round of OpenCoffee Club at a new time & place:

OpenCoffee Club encourages informal networking among entrepreneurs and investors to help grow startup companies in the Houston area.

Friday, June 8, 2007
2:00 PM
Starbucks Uptown
1151 Uptown Park #12
Houston, Texas 77056

Optional RSVP:
Upcoming: http://upcoming.yahoo.com/event/195457/?ps=6
Meetup: http://smallbiz.meetup.com/57/calendar/5818119/

Homepage
http://houstonopencoffeeclub.ning.com/

I’m changing the venue to accommodate new and different attendees which I plan on doing each month until we collectively decide on the optimal time and place for most people. Email me or leave a comment to get on the email list.

I’ve already seen a few new faces that have RSVP’ed so I think that it will be another strong event for the Houston area startup community.

Richard Yoo has launched his Web 2.0 profile and information aggregator Natuba. I have a handful of invites left and if you leave a comment I’ll email one to you. The idea is that once you register, your username with various web properties like Twitter, LiveJournal, MySpace etc. and places them on a single page. As someone who writes content in a lot of places on the web - mostly in blog comments - I really like the idea of funneling all of the disparate data into one page.

Conceptually, I like this as a Web 2.0 play since it grabs info from different data silos and visualizes it in an intuitive way. I also like it as a way to repurpose content in order to increase linkbacks for Google PageRank, although this is not the primary function. Richard is a particularly bright guy and a great asset to the Houston startup community so I wish him and his team the best of luck.

If you’d like a private invitation to Natuba, I have a handful left - and I’m sure if I asked nicely, I could get a few more from Richard. I have to mention that it might be a little while until we hear from him considering his pending nuptials - Congrats!

I did a tiny bit of research on the hardware this afternoon, and just as I suspected – this is the least sticky issue. Here is a link to the entire category of mp3/video players on www.alibaba.com: http://www.alibaba.com/trade/search?IndexArea=offer_en&SearchText=mp3. This is the first one that I thought was the most feature laden and extensible – I like the idea of a built in USB port: http://bitland.en.alibaba.com/product/50139966/51203583/MP3_Players/Flash_MP3_Player.html
I think that a case and package (green, no plastic) design contest in partnership with www.core77.com and custom skins from the guys at www.ifrogz.com or www.macskinz.com (who also do laser etching) would be yet another way to get the community involved.
From a marketing perspective, once a website is up, I would make an affiliate marketing widget for a 10% discount to pre-pay for a device and get every podcaster out there to put it on their sidebar. Not to confuse the RSS issue, but direct subscribe badge that looked something like this:     would add a lot of credibility immediately. I’d also put up a store in SecondLife and sell signed and numbered digital copies of the player so copybot wouldn’t be an issue. I’d even consider in-game kiosks to manage feeds – which would really be nothing more than a hosted OPML list.

I really like Michael Gartenberg’s suggestion that you don’t sell cheap add-on accessories like headphones. I’d sell add-on packs or a deluxe version if people really wanted them, but they’d have to be worth putting into another package and getting another SKU. One more way to save money is that I wouldn’t print a manual (it should be intuitively easy to operate) or bundle a driver CD that becomes outdated the minute it’s shipped. Instead I would create a wiki or user forum on the site and print that on the box.

Any one in the Web 2.0 space knows that MySpace is the bewilderingly ugly site that gets more traffic and press coverage than any other site out there with the exception of YouTube, though they are often mentioned in the same sentence. 100 million pages and $580m purchase by a second-tier internet (and first-tier media conglomerate) player set the tone for every other Web 2.0 company out there.

Most people would agree that the deal was a one time phenomenon, but the same can be said of Yahoo!’s orginal IPO, before Google came on the scene. I’m seeing a trend in Web 2.0 portal companies that are targeting various vertical niches, now that the broad “teen” category has been completely conquered by MySpace.

The shorthand for this is “MySpace for X”. The best examples I’ve seen are social networking sites targeting mothers (MomSpace if you will) like www.minti.com, www.clubmom.com (a Web 1.0 rebrand), www.mommybuzz.com, www.mayasmom.com and my Houston hometown favorite, the pre-lauch www.opmom.com. They all have several features in common, but each has their own ‘voice’, much like certain department stores sell the same items, but you feel differently when you go to one over the other.

I think that the vertical niche social network is here to stay, but not strictly as a stand alone sites. Based on people’s differing interests and self-identities, coupled with RSS feeds and widgets more social networks will be portable to other aggregation-based homepages. This is not a bad thing but it means that these niche communities have to stay relevant through personal engagement, not site “bling”.